Question
Car & Truck Traders Pty Ltd (CTT) is a motor vehicle wholesaler whose business is that of selling motor vehicles to retail dealers. One such
Car & Truck Traders Pty Ltd (CTT) is a motor vehicle wholesaler whose business is that of selling motor vehicles to retail dealers. One such dealer was a man by the name of Peter Crank (dealer). In early July 2021, CTT agreed to sell to the dealer and the dealer agreed to buy from CTT eight cars. On or about 19 July 2021, the dealer took delivery of the eight cars, the representative of the dealer then receiving and signing an invoice for the eight cars. The invoice set out several conditions and warranties one of which read: "Where payment is made other than in full settlement and in cash (/EFT), all property rights in the vehicle remain in the vendor." The dealer did not pay any part of the purchase price for the cars. The dealer had earlier entered into a floor plan agreement called "The Bailment Agreement" (Agreement) with the respondent Amigos Quick Traders Pty Ltd (AQT). This Agreement made provision for the purchase by AQT of used motor cars acquired by the dealer as stock on the basis that the dealer would retain possession of such cars as bailee for AQT pending sale of the vehicle during the dealer's retail business or earlier termination of the bailment in accordance with the provisions of the Agreement. AQT agreed to pay 90 per cent of the agreed purchase price of a vehicle on completion of the sale to AQT and the balance when the vehicle was disposed of by the dealer. The dealer warranted that each vehicle sold to AQT would be his own unencumbered property and that he would indemnify AQT against any loss arising from defective title. Clause 9 of the Agreement was in these terms: "Subject to the limitations contained in this Agreement, I will seek to obtain but not as agent for AQT offers to purchase the car or offers addressed to AQT to take the car under hire purchase and I shall advise AQT from time to time of receipt by me of any such offer. AQT may then in its entire discretion sell the car to me but shall be under no obligation to do so and pending any such sale I shall have no interest in or option over the car which shall remain at all times the property of AQT and I shall have no right or authority to sell dispose of or part with possession or custody of the unit or create or authorise the creation of any lien thereon." The dealer completed and signed in respect of each of the eight cars a document headed "AQT Finance" and sent them to AQT. AQT transferred by EFT to the dealer 90 per cent of the agreed purchase price of the eight cars. As CTT had not received payment for the cars, it seized them. AQT comes to you for advice. In-house counsel at AQT wants to commence action to sue CTT in detinue and conversion, seeking the return of the vehicles and alternatively, their value, amounting to $550,000. Advise AQT on its proposed course of action having regard to the SOGA and the Factors (Mercantile Agents) Act 1923 (NSW) as well as relevant case law.
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