David wants to buy a reliable car that he can take camping in the bush with his friends and family. He approaches Harry, who owns and manages a car dealership. Harry has 40 years of experience within the car industry and is a qualified automobile mechanic of 25 years. He specializes in 2^nd hand 4WD (four-wheel drive) repairs.

David tells Harry he has a budget of $35,000 and that he wants to buy a car that is not very old, has been well looked after and will not have any problems when travelling through remote areas and on rough outback roads. Harry, who has been struggling in recent times to return a profit in his business, sees an opportunity to make an easy sale and shows David a Range Rover he has on sale for $32,000.

Harry tells David, “I know the full history of this particular Range Rover. The only person who has ever owned it was named Rick, who bought it six months ago. He was an elderly fellow who returned it because it was just too big for what he needed. But the Range Rover is in perfect condition and has no mechanical issues. I’ve done work on it a number of times and it is pretty much as good as new.”

After some consideration, David takes Harry’s advice and signs the paperwork to purchase the Range Rover. However, the following month, while David is on his way to his favourite camping location, the car’s brakes fail and David crashes into a tree on the edge of the road. David’s insurance company investigates the accident.

According to a report prepared by the insurance company, the Range Rover was first owned by John, who purchased it brand new over 10 years ago. The report states that John misused the Range Rover for nine years through illegal street racing and then sold it privately to Rick through a dealership for $10,000. After 6 months, Rick then decided to sell the car for $5,000 to Harry, due to it having so many mechanical problems.

David phones Harry demanding an explanation. Harry replies, “Mate, I have the logbook here that shows all previous owners of the car. It came with the car when I got it. The only previous owner listed here is Rick. That is honestly all the information I have.” When questioned about the condition of the car, Harry also tells David, “As I’ve said to you before, the car was in great shape when you bought it.”

Advise David as to the most appropriate cause of action he can bring against Harry, based on Contract Law 3.

Evaluate the strength of any arguments that Harry might raise in response.