Buyer's assumptions could not expand a services contract beyond its written scope
The Federal Court cleared an aircraft inspector of misleading conduct, finding its obligations were limited to the specific tasks it had listed in writing.
In Four Air Leitchville Pty Ltd v Hurlad Pty Ltd (No 4) [2026] FCA 976, the court dismissed a buyer's claims against the company it had hired to inspect an aircraft before purchase.
The buyer bought the 1982 Fairchild Merlin III-C from its seller on 11 December 2017 for $880,000. The inspection report, dated 6 November 2017, described the aircraft as "in reasonable condition for its age and hours."
Within months, the buyer found the aircraft needed extensive repairs and was not airworthy. The court observed that the aircraft "may have been something of a lemon."
The buyer sued the seller and sued the inspection company and its director under the Australian Consumer Law, which bans misleading or deceptive conduct and false representations. It settled with the seller in February 2023, leaving its claims against the inspection company for trial.
The court found that the inspector did not breach its contract. It held that the agreed terms were limited to the scope set out in the inspector's email of 30 October 2017, which listed the tasks it would carry out. The buyer argued that earlier discussions, and its aim of confirming airworthiness, formed part of the deal. The court disagreed, finding that those talks came before the scope was agreed and that the buyer had accepted the listed tasks without seeking more. The contract did not require the inspector to give any opinion on airworthiness, the court said.
On the consumer-law claims, the court found that the alleged statements were never made. The buyer said that the report relied on a maintenance program known as the M7 Program. The court held, however, that the program did not form part of the aircraft's maintenance records and that the report did not mention it.
The court also rejected the claim that the inspector misled the buyer by staying silent, finding that the buyer could not have expected disclosure of facts the inspector was unaware. A pre-purchase inspection, the court noted, was "not a certification of airworthiness but a general condition opinion."
The court said the question of loss did not arise, though it recorded that the buyer had claimed $489,979 after its settlement, an insurance payout and the aircraft's later sale for $30,000. It dismissed the buyer's case and the parties' competing claims to share any liability, and left costs to be decided later.
