Milton is a factory owner. He buys a large electric packaging machine from Phillip who works for Xpert Electrical Services. Phillip manages the sale of machines and he is also an electrical contractor.

Milton tells Phillip that he needs a large electric packaging machine because his business is expanding. He needs a machine that is capable of packing 1000 boxes of tissue paper per hour. Phillip recommends a machine and guarantees it will do the job and Milton won't be disappointed with it. After the purchase, Milton also asks Phillip if he will undertake to install the new electric packaging machine that Milton has bought.

Towards the end of negotiation, Phillip confirms that he is qualified and registered to do the job (which is untrue). Phillip says that he will charge Milton $35,000 for the machine and $15,000 for the installation. Phillip prepares a written contract which he presents to Milton to sign. Milton does not bother to read through the entire contract. He and Phillip both sign it.

Phillip and his assistant begin installing the machinery. Towards the end of the day Phillip is tired and finding it difficult to concentrate. He connects an important electrical wire wrongly. When everything has been connected, Phillip asks his assistant to turn on the electricity.

The assistant says, "Shouldn't we check all the connections first?"

Phillip says, "No. That would take a whole day. If there are any problems, we'll soon know."

A week later, Milton finds out that the machine is only capable of packing 500 boxes of tissue paper per hour. Milton also notices that the machine keeps turning itself off. One day, when power is switched on, the wrongly connected wire causes massive sparking and a large fire. The normal checks would have disclosed that a wire was wrongly connected.

Milton' factory is damaged by the fire and costs $30,000 to repair. Furthermore, production in the factory has to be stopped for two weeks while the repairs are made, and Milton loses $10,000 of the trading profits he would otherwise have made.

Use only common law and/or equitable principles to answer questions 1 and 2. Do not use legislation.

1.Can Milton bring an action in negligence against Phillip?

2.Does Phillip make a misrepresentation when he tells Milton that 'he is a qualified and registered electrical contractor'? If Phillip made misrepresentation, what type of misrepresentation was it?

Use only legislation (and relevant cases) to answer questions 3 and 4. Do not use common law and/or equitable principles.

3.Would the sale of the large packaging machine between Milton and Xpert Electrical Services be considered a 'consumer' contract under the Australian Consumer Law?

4.Is Phillip guilty of misleading and deceptive conduct, as prohibited by section 18 of the Australia Consumer Law when he guarantees Milton that the packing machine is capable of packing 1000 boxes of tissue paper per hour?