Alliance Motor Auctions Pty Ltd v Saman

Background

1. The background to the proceedings is set out in the Decision relevantly as follows: 10. When he first inspected the motor vehicle on 1 June 2017, the [respondent] noted, or a dealer representative disclosed to him, that it had a number of defects that required rectification. Those defects were oil and water mixing in the engine causing black smoke in the exhaust, malfunctioning or broken seat belts, and a problem with the front bar that required correction. The dealer representative warranted to the [respondent] that if he purchased the motor vehicle these defects would be corrected at no charge prior to him collecting it. The [respondent] then placed a deposit on the motor vehicle on the understanding that this rectification work would then be carried out. 11. The [respondent] contends that when he completed the purchase and collected the motor vehicle on 9 June 2017 the oil and water mixing defect had been rectified, but the seat belt and front bar defects had not. That is apparently not in dispute. The [appellant] has submitted into evidence an invoice rendered on it by a motor repairer trading as Gemstar Automotive dated 9 June 2017 which itemises the following work: "supply and fit transmission cooler - new; flush coolant; replace coolant; supply and fit oil filter housing seals; replace oil filter; top up engine oil" at a total cost for parts and labour of $1,250.00. The seat belt and front bar defects were not rectified by the at any time prior to the destruction of the motor vehicle by fire. 12. On 11 June 2017, two days after purchase, the motor vehicle overheated while the [respondent] was driving along the M5 Motorway. The [respondent] had to pull over, and call for roadside assistance. The motor vehicle could not be repaired in situ and had to be towed-to the [respondent's] home in Bexley North. The [respondent] then reported the incident to the [appellant]. The [appellant] arranged for the motor vehicle to be towed to Gemstar Automotive on 14 June 2017 for repair at its expense under the retail warranty. . . . 13. On 27 June 2017 the motor vehicle experienced a total power failure. It could not be started or locked via its central locking system. The [respondent] reported this to the [appellant]. This resulted in the [appellant] arranging for the motor vehicle to be towed to Gemstar Automotive for inspection and repair at its expense under the retail warranty. . . . 14. On 3 August 2017, less than 8 weeks from the date of purchase, while the [respondent] was driving the motor vehicle along Newbridge Road at Moorebank, the engine of the motor vehicle started to smoke and then caught fire. The [respondent] was the only person in the motor vehicle at the time and was able to pull over and escape from it unharmed. However, the fire was intense and spread rapidly. The motor vehicle was totally destroyed before Fire and Rescue NSW could arrive to extinguish it. The [respondent] has submitted into evidence photographs which depict the intensity and scale of the fire which he took on his mobile phone while he waited for NSW Fire and Rescue to arrive. He has also submitted photographs of the motor vehicle taken after the fire was extinguished. They depict the total destruction of the motor vehicle.
2. The Tribunal had jurisdiction to deal with the application as a consumer claim under Part 6A of the Fair Trading Act 1979. The respondent's cause of action is found in s 54 of the Australian Consumer Law (NSW) (ACL) which forms part of the law of NSW and which may be applied in the determination of a consumer claim under Part 6A of the Fair Trading Act. Section 54 of the ACL provides that if a person supplies goods in trade and commence (and not by auction) there is a guarantee as to acceptable quality: s 54(1). Goods must be of acceptable quality in terms of being fit for the purpose for which they are commonly supplied, they must be acceptable in appearance and finish, they must be free from defects, and they must be safe and durable: s 54(2)(a) to (e).
3. The outcome of the respondent's application to the Tribunal was that the appellant had to reimburse him for the total purchase price of the motor vehicle. The respondent had argued that the spontaneous fire must have been caused by a defect in the motor vehicle that was actual or latent at the time of sale. He contended that there was no other satisfactory explanation for the incident given that he had only had the motor vehicle for just under eight weeks at the time, and that there was no other likely cause. He also contended that the serious defects occurring in the motor vehicle since its purchase which required it to be towed to a motor repairer on two occasions was further evidence that the motor vehicle was defective at the time of its sale to him.

Grounds of Appeal

1. The Notice of Appeal was filed on 14 March 2018. The grounds of appeal are stated simply. The appellant submits that the Decision was not fair and reasonable, in that there was "no evidence to support [the] decision other than probability". The Notice of Appeal states: The decision has been determined on probability and even [an] expert report, NSW Fire, could not determine the cause of the fire and had no relation to any previous repairs. Age and kms of vehicle need to be considered. The fact Mr Saman gave false information to [the] insurance company regarding his driving history which led to claim being denied, had this not happened, he would not have pursued [the appellant] for compensation.
2. These submissions were amplified in the three pages of submissions which were attached to the Notice of Appeal. The appellant submitted that: 1. the problems with the motor vehicle prior to the fire were not relevant; 2. there was a lack of expert evidence and any conclusion that the was a defect in the motor vehicle that was actual or latent at the time of sale "merely the opinion of Mr Saman"; 3. the respondent had not proved his case; 4. it was possible that the respondent fitted after market equipment to the motor vehicle; 5. had the insurance company paid the claim, the appellant would not have been held responsible.
3. Matters (4) and (5) were not pursued at the appeal hearing.
4. In the circumstances, the appellant sought that the order of the Tribunal be set aside.

Preliminary issue

1. The Notice of Appeal was filed on 14 March 2018. It should have been filed by 12 March 2018. The respondent did not oppose an extension of time being granted.

Consideration

1. The particular matter agitated by the appellant is that there was no evidence, or insufficient evidence, to support the Tribunal's conclusion that there was a defect in the motor vehicle.
2. The Tribunal, in our view correctly, stated that the question to be determined was: 25. The question the Tribunal must ultimately determine in this case is therefore whether the applicant is able to establish on the balance of probabilities that the fire and destruction of the motor vehicle was caused by a defect that was actual or latent in the motor vehicle at the time of its purchase.
3. The Tribunal answered that question as follows: 26. In this respect the following factual findings may be readily made on the evidence. The fire occurred within a relatively short period of time after the [respondent] purchased the motor vehicle, being a period of less than eight weeks. The motor vehicle had already suffered two major mechanical failures during this period, both of which had resulted in the motor vehicle having to be towed to a motor vehicle repairer where major repairs to the engine had to be carried out. The investigating officer from Fire and Rescue NSW who completed the e-AIRS Report did not consider the fire suspicious. Her or his conclusion was that the most probable cause of the fire was a fuel leak caused by a vehicle component failure. However, that finding was not beyond doubt (hence the "?") and she or he could not determine the area of the fire's origin or its ignition source. Nevertheless, there is no apparent alternative explanation for the fire other than a vehicle component failure and fuel leak. 27 Against the background of two major mechanical breakdowns apart from the fire incident, one occurring within two days of the sale, and the other within three weeks of the sale, I find that little weight can be placed on the e-Safety Certificate issued on 8 June 2017 as reflecting the condition of the motor vehicle at the time of sale or at the time of the fire, even if it was an accurate reflection of the condition of the motor vehicle on the date it was issued. Additionally, it is important in the circumstances to note that the motor vehicle was initially failed on that inspection because of "oil leaks from engine." The work done in response to that failure included the "remov[al] of [the] engine covers and [the] cleaning of] oil leaks." However, it is important to note that no repair in relation to this/these oil leaks is itemised. I take into account that the [appellant] did promptly arrange for repairs to be carried out to the water pump and alternator when they failed, and that it had also caused the repair of the oil and water mix defect. However, this work does not exclude either the recurring failure of these components, or the failure of a different mechanical component.
4. The Tribunal concluded that: 28. In all of these circumstances I comfortably satisfied on the balance of probabilities that the fire was caused by mechanical failure or fault that was actual or latent in the motor at the time of sale, even though the precise nature or mechanism of that failure cannot now be established due to the total destruction of the motor vehicle. The evidence I have outlined persuades me that the reality of that fact is substantially more probable than not, even though the matter is not entirely without doubt. 29. Having made that finding, I am satisfied on this basis, and on the basis that the motor vehicle had suffered two other major mechanical failures since its sale to the applicant, that respondent did not comply with the guarantee as to acceptable quality when it supplied the motor vehicle to the applicant. I am satisfied that a reasonable consumer who knew that the motor vehicle was likely to suffer two major mechanical failures and then another causing it to catch alight and be destroyed, each in less than two months from the date of supply, would not regard it as being of acceptable quality. In this respect, the motor vehicle was not fit for daily use as a family car, it was not free from defects, it was not durable, and it was not safe.
5. We have set out the Tribunal's reasoning at some length to demonstrate the care the Tribunal took in reaching its conclusion.
6. A court or tribunal is informed and persuaded only by the presentation of evidence. Evidence is material which tends to persuade the court or tribunal of the truth or probability of the facts being alleged. Evidence may be photography, documentary or testimonial. But it will only succeed in persuading the tribunal if it appears as being truthful, reliable and cogent. In civil cases the standard or proof depends on the balance (or preponderance) of probabilities. This simply means that a party must prove that their case is more likely than not to be true. If the scales tip in favour of the party, however slight, they have proved their case. But if the probabilities are equal, they have failed to prove their case. In criminal cases the law imposes a higher standard of proof - and that is proof beyond reasonable doubt.
7. But here, as we have said, all that is required is satisfaction on the balance of probabilities.
8. The Tribunal made the following findings of fact, findings which we consider were available to it on the evidence discussed in the Decision:

• the fire occurred within a relatively short period of time after the respondent purchased the motor vehicle, being a period of less than eight weeks;
• the motor vehicle had already suffered two major mechanical failures during this period, both of which had resulted in the motor vehicle having to be towed to a motor vehicle repairer where major repairs to the engine had to be carried out;
• the investigating officer from Fire and Rescue NSW who completed the e-AIRS Report did not consider the fire suspicious; the investigating officer's conclusion was that the most probable cause of the fire was a fuel leak caused by a vehicle component failure.
• however, that finding was not beyond doubt and the investigating officer could not determine the area of the fire's origin or its ignition source;
• there was no apparent alternative explanation for the fire other than a vehicle component failure and fuel leak.

1. Based on those findings, the Tribunal concluded:

• it was satisfied on the balance of probabilities that the fire was caused by mechanical failure or fault that was actual or latent in the motor at the time of sale, even though the precise nature or mechanism of that failure could not be established due to the total destruction of the motor vehicle;
• the evidence persuaded it that the reality of that fact was substantially more probable than not, even though the matter was not entirely without doubt; and that ultimately,
• the appellant did not comply with the guarantee as to acceptable quality when it supplied the motor vehicle to the respondent.

1. As Mason CJ observed in March v Stramare (E & MH) Pty Ltd [1991] HCA 12; (1991) 171 CLR 506 at [17], the common law tradition is that what is the cause of a particular occurrence is a question of fact which "must be determined by applying common sense to the facts of each particular case". His Honour said that that proposition is supported by a long line of authority in the United Kingdom (see for example Stapley v Gypsum Mines Ltd [1953] UKHL 4 at 681), and the High Court's decision in Fitzgerald v Penn [1954] HCA 74; (1954) 91 CLR 268.
2. We see no error in the reasoning of the Tribunal and its conclusion that on the balance of probabilities that the fire was caused by mechanical failure or fault that was actual or latent in the motor at the time of sale, even though the precise nature or mechanism of that failure could not be established due to the total destruction of the motor vehicle. We do not agree that the Tribunal's conclusion is not supported by evidence. We consider that the Tribunal's conclusion was a question of fact open to it a question of fact which it determined by applying common sense to the facts of the case.

Conclusion

1. The Act sets out the basis upon which appeals from decisions of the Consumer and Commercial Division may arise under s 80 of Civil and Administrative Tribunal Act 2013 (the Act). That section states that an appeal may be made as of right on any question of law, or with leave of the Appeal Panel on any other grounds.

Question of law

1. As the Appeal Panel observed in Chandra v RB & RK Real Estate t/as Starr Partners Fairfield [2018] NSWCATAP 122 at [17], we are to do the best we can to distil and understand from what the appellant has written in their Notice of Appeal, and what was explained to us at the hearing, to ascertain whether or not the appeal raises a question of law.
2. It seems to us that no question of law arises. Rather, what the appellant was submitting was that the decision of the Tribunal was against the weight of the evidence before it. As such leave to appeal is required.

Leave on other grounds

1. Clause 12 of Sch 4 of the Act says that an Appeal Panel may grant leave only if it is satisfied the appellant may have suffered a substantial miscarriage of justice because: 1. the decision of the Tribunal under appeal was not fair and equitable; or 2. the decision of the Tribunal under appeal was against the weight of evidence; or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
2. The principles to be applied by an Appeal Panel in determining whether or not leave to appeal should be granted are well settled. The authorities say that, in order to be granted leave to appeal, the appellant must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at or that there was a real challenge to an issue of fact.
3. Ordinarily it is appropriate to grant leave to appeal only in matters that involve issues of principle; questions of public importance; an injustice which is reasonably clear, an error that is plain; a factual error that was unreasonably arrived at and clearly mistaken; or the Tribunal went about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed: Pholi v Wearne [2014] NSWCATAP 78 at [32]; Collins v Urban [2014] NSWCATAP 17 at [84]:
4. We are not satisfied that any of these matters are established. Leave to appeal should be refused.

Other

1. One other matter raised in the papers and at the hearing was the claim by the appellant that the outcome was inconsistent with remarks made by the Member while conducting the Tribunal hearing. To substantiate that point, the appellant produced a typed schedule of certain exchanges. One exchange was that an observation of the Member that Mr Saman would have difficulty proving a defect.
2. We see nothing erroneous in that observation. As we attempted to explain, dialogue between the Tribunal and parties is part of any hearing. In this matter, the Tribunal's decision was "reserved", and a written Decision published. The reasons for the Tribunal's decision are those as reflected in the written Decision. The reasons are not the exchange between the Tribunal and a party when the Tribunal is testing propositions or making observations about the law or which party bears the onus of proof. Most, if not all of the matters relied on by the appellant were matters of that nature. The challenge on appeal is for the appellant to demonstrate error in the Tribunal's reasons. For the reasons given above, none have been identified.

Costs

1. In its written submissions, the respondent indicated that, in the event the appeal was unsuccessful, it sought a costs order.
2. The relevant costs rule appears in s 60 of the Civil and Administrative Tribunal Act 2013. That section provides: 60 Costs (1) Each party to proceedings in the Tribunal is to pay the party's own costs. (2) The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs. (3) In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following: (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings, (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, (c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law, (d) the nature and complexity of the proceedings, (e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, (f) whether a party has refused or failed to comply with the duty imposed by section 36 (3), (g) any other matter that the Tribunal considers relevant.
3. The authorities establish that: 1. "Special circumstances" are circumstances that are out of the ordinary, they do not have to be extraordinary or exceptional: CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [23]- [31]; 2. the Tribunal must weigh up whether or not the special circumstances involved in the particular case warrant a departure from the usual rule that each party bear their own costs: Obieta v Australian College of Professionals Pty Ltd [2014] NSWCATAP 38 at [81]. 3. the discretion to award costs must be exercised judicially, having regard to the principle that parties should ordinarily bear their own costs: eMovePty Ltd v Naomi Dickinson [2015] NSWCATAP 94 at [48].
4. The respondent relies on s 60(3)(e), that is that the appeal was frivolous or vexatious or other misconceived or lacking in substance. The only basis that this argument appears to be advanced is because the Notice of Appeal did not identify an error of law.
5. We do not see any feature of this appeal that is out of the ordinary. We do not consider that the respondent has established that there are special circumstances warranting an award of costs.
6. The application that the appellant pay the respondent's costs is refused.

Orders

1. For the above reasons, the Appeal Panel orders that: 1. the time for filing the Notice of Appeal is extended to 14 March 2018. 2. leave to appeal refused. 3. appeal otherwise dismissed. 4. the stay of the orders made in application MV 17/38014 is lifted. ​

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 31 May 2018