THE LEGAL COURSE
Fit For Purpose?
with Aaron Koffel by Julia McLean

With the advanced technology available for communication today it is not uncommon for a horse to be purchased without actually being viewed but rather seen on the web, in a magazine or on an exchange of photographs and videos. When the horse or pony arrives and the Purchaser is surprised ….and not in a good way, what rights do they have as a consumer in these instances?

The law, and an understanding of an individual’s rights and obligations, can be a very confusing subject for the lay person as there are many variations that can influence a final outcome, which is why, within the legal circles, there are people who specialise in the various areas of the law.

Purchaser’s rights under legislation vary greatly depending upon who is the Vendor (owner) and these again differ depending on whether the Vendor is a lay person or one who makes their living from breeding, buying or selling horses. 

To illustrate this point, take as an example a horse purchased with the express intent of being used for showing at a high level. Each state has its own statutory requirements, so for this scenario, assume that the purchase has occurred in NSW.

 The horse arrives and it has a big scar on its flank, which was not disclosed in the sale process.  It is generally thought in the show world that a big scar on the flank would be detrimental to this horse’s show career so would render the horse ‘not fit for purpose’ (of showing).

If the Vendor was a professional who made their living buying and selling horses then the Purchaser might have a claim under ‘not fit for purposes’ and be able to claim for damages, which would include the return of the purchase price and costs such as agistment.

However, this option does not exist if the horse has been purchased from a lay person. The law says there is a need to show Misrepresentation, which can be Fraudulent, Negligent or Innocent. In the case of Innocent Misrepresentation, neither party intended for the misrepresentation to occur. 

The difficulty, however is that the Purchaser must show that the “misrepresentation was so fundamental that the party misled could establish a complete difference in substance between what was supposed to be and what was in fact supplied.”
Watt v Westoven [1933] VLR 458

In the scenario the court may not consider a scar to be sufficiently ‘fundamental’.  
The situation could have a different outcome if a contract had been arranged between the Purchaser and Vendor prior to the sale, and certain points had been established in writing.  Emails sent to the Vendor specifically asking about scars may be sufficient to protect the Purchaser’s position. If the Vendor stated in writing that the horse did not have any scars, then this should be sufficient to demonstrate misrepresentation. If not addressed in writing, it may be difficult to demonstrate that the Vendor engaged in misrepresentation at all.

If negligent misrepresentation was able to be proven then damages may be sought.  The original advertisement would be a good starting point – if it actually stated ‘no scars’ then the Purchaser has a case. When scars are not mentioned in the ad, then the advertisement provides no support to the Purchaser’s case. The matter would then turn on correspondence leading up to the sale. Frequently most negotiations for the purchase or sale of a horse are based on telephone calls and it inevitably leads to a dispute as to what was said by whom.

If the question regarding scars had been asked in an email and a written response was received in which the Vendor lied about the scar, then the Purchaser would have secured their cause of action under misrepresentation.

Problems occur when the actual Vendor is not clear and the person with whom the Purchaser has dealt is acting as an Agent for the seller, who is a private individual. The Agent is an established horse dealer and the Purchaser has an expectation of a professional level of service, however, should the sale go badly, the Purchaser will be taking action against the Vendor not the Agent. 

In terms of the scenario, the action under “not fit for purpose” will not exist to the Purchaser as, although they dealt with a dealer or Agent, it is the law relating to the true Vendor that will apply. Therefore, an important step in any negotiations would be to first establish the true owner of the horse.  If the negotiations are with an established horse dealer, who owns the horse for sale, then the Purchaser will have more rights under the law than they would have when purchasing from a lay person engaging in a ‘one-off’ sale.

This case highlights the point that a Purchaser should always establish what it is they require in the horse, the points of importance to them ie: no scars, suitable for showing at high levels, and have either a contract or some sort of written communications to support their case in the unfortunate instance of things going wrong with the sale. 

Disclaimer: The information provided in this article is for informational purposes only, and does not constitute legal advice.

About the Author: Aaron Koffel is an Associate Solicitor at Koffels, which holds a unique place in Equestrian Law from personal hands on experience.  Aaron and his family participated for many years in equestrian sports, and the firm principal,  Ross Koffel, has held office with Equestrian Australia (NSW); Eventing NSW and Jumping NSW.  Koffels are the Honorary Solicitors for Jumping NSW.   The firm offers legal support in all areas in all areas of Equestrian Law from buying and selling to leasing and exporting performance horses, prepare documentation for all transactions including Stallion Agreements in the Thoroughbred Industry as well as advising on the organisation of equestrian activities including shows, competitions and the insurance implications of these activities.

Koffels,  Level 9, 263 Clarence St., Sydney NSW 
Phone: (02) 9283 5599         www.koffels.com.au