[2]

Section 79J of the Fair Trading Act 1987 (NSW) (FT Act) gives the Tribunal jurisdiction to hear and determine a consumer claim the subject of an application under Division 2 of Part 6A of the Act (except as otherwise provided by the Division).
Section 79E defines "consumer claim" to mean (relevantly for present purposes) a claim by a consumer for one or more of the remedies set out in the section that arises from a supply of goods or services by a supplier to the consumer. One of the remedies set out in subsection (1) is the payment of a specified sum of money.
Section 28 of the FT Act provides that the Australian Consumer Law text, as in force from time to time, applies as a law of New South Wales.
Section 79N provides that in determining a consumer claim wholly or partly in favour of a claimant the Tribunal may, subject to Division 3, make any one or more of the orders that are set out in the section that it considers appropriate. One of the orders is the requirement for a respondent to pay to the claimant a specified amount of money. Section 79S provides that the Tribunal has no jurisdiction to make, in respect of a particular consumer claim, an order or orders in favour of a claimant if the relevant total under, or because of, the order or orders would exceed the prescribed amount. By regulation 13A the prescribed amount is $100,000. The prescribed amount limitation however does not apply to a consumer claim arising from the supply of a new motor vehicle that is used substantially for private purposes within the meaning of the Motor Vehicles Taxation Act 1988 (NSW) (Section 79S(6)(a)).
Section 7 of the Australian Consumer Law defines a manufacturer to include, per subsection (1)(e), an importer of goods into Australia if:

Besh v Grand Motors Group NSW Pty Limited t/as Mercedes Benz Parramatta [2026] NSWCATCD 17 | Case summary | Zoe

Ask Zoe →

NSWNSWCATCD

Besh v Grand Motors Group NSW Pty Limited t/as Mercedes Benz Parramatta [2026] NSWCATCD 17;

[2026] NSWCATCD 17

NCAT Consumer and Commercial|2026-01-19

View original source

General information, not legal advice.

At a glance

Source facts

Court

NCAT Consumer and Commercial

Decision date

2026-01-19

Source

Original judgment source is linked above.

Judgment (66 paragraphs)

[1]

On 13 May 2019 the applicant purchased from the first respondent (Dealer) a Mercedes-Benz motor vehicle described in the evidence as an AMG E53 registration number xxx. The second respondent concedes that, for the purpose of these proceedings, it is the manufacturer of the vehicle pursuant to section 7(1)(e) of the Australian Consumer Law (ACL) .
These proceedings concern damage to the engine of the vehicle on 16 November 2022, some 3.5 years post purchase.
Following the lodging of the Application lodged with the Tribunal the applicant filed Points of Claim. The applicant seeks a) an order against the first respondent that it pay the applicant $193,899.52 pursuant to s263(4)(a) of the ACL, b) $156,212.00 (as of 12 June 2014) against the first, alternatively second or collectively, pursuant to s236 and/or 271 and c) costs. He alleges breaches of ss54 and 55 consumer guarantees.
By Points of Defence lodged by the respondents they a) admit that s54(2) and s55(1) applied to the supply of vehicles by the first respondent, b) say that the consumer guarantee provided by s54 does not apply because (i) the applicant caused the vehicle to become of unacceptable quality after it was supplied or failed to take reasonable steps to prevent it becoming of unacceptable quality, by allowing it to stand idle for extended periods of time and not servicing it at required intervals; (ii) such conduct of the applicant constituted abnormal use of the vehicle within the meaning of s54(6) of the ACL; c) rely on the terms of s55(1) for their full force and effect and, d) deny breach of either guarantee.

[25]

In his 10 October 2024 statement (Exhibit A1), the applicant describes attending the dealership of the first respondent on 27 December 2018 and was shown a Mercedes Benz AMGE53 that was on display. He says that that vehicle was the same make and model as the car that he eventually purchased and which is the subject of the current Application. The salesperson spent a long time telling him "... about the great features of [the] very special model". At [9] the applicant refers to negotiating for half a day then finalising a deal. He refers to the specifications that he chose for the vehicle and that delivery was not expected until April 2019. The price negotiated was $193,004.53. He paid the deposit of $5,000 and signed the Contract for the Purchase Of a New Vehicle, a copy of which he attaches to his statement.
He says at [12] that he attended the first respondent again on 13 May 2019, inspected the car, transferred the balance of a slightly increased price then took possession of the vehicle. The amount paid on this occasion was $188,900. He attaches at "C" copies of what he describes as the "paperwork received". Within that paperwork is, on the letterhead of Mercedes Benz, a document described as "Pre-Delivery Inspection". There are a number of boxes that contain ticks under the heading "Check Report". One of the boxes ticked is adjacent to the words "engine oil level checked". Similarly, adjacent to the words "all visible parts in the engine component checked for damage and leaks"; further, a box is ticked adjacent to the words "smooth running of engine and transmission noted during necessary vehicle movements".
Following purchase the applicant says at [15] that he enjoyed driving the vehicle around Port Macquarie but that it had only been driven for a limited number of kilometres when Covid19 hit. The Covid restrictions meant that he and his wife stayed at home as much as he could. He says that meant that he did not drive the car nearly as much as he would have done if things had been normal. He says at [16] that after Covid he was diagnosed with prostate cancer which stopped him driving the car as much as he would have wanted.
He says at [17] that on 16 November 2022 he was driving the vehicle home from Port Macquarie when the engine lost all power. He has since discovered that what transpired was "... a catastrophic engine failure". At that point he says the vehicle had only been driven for 3,224 kilometres. He was able to get the vehicle back to his home then called the first respondent dealership. He also describes at [19] contacting the Mercedes Benz dealer at Port Macquarie, Miedecke Motors, and "explained the situation". The car was booked in with Miedecke Motors and was transported to that dealership by tabletop truck on 17 November 2022.
The applicant describes at [20] and [21] attempts during November 2022 to contact the first respondent and to being advised by Miedecke Motors in February 2023 that they had put an endoscope into the piston cavity which revealed a seized valve. He also describes at [22] being advised by Miedecke Motors that due to the failure of the engine the Miedecke team applied to Mercedes Benz Australia directly for approval to remove the complete engine, as they could not remove the camshaft covers, to have a detailed look at what caused the seized valve. On 1 March 2023 he attended the Miedecke Motors workshop to look at the car.
He was still not aware at that point as to what had caused the engine failure and what needed to be done to fix it. He says that he saw the vehicle "in bits all over the workshop". He then says at [24]:

[27]

He was informed by the Miedecke Motors workshop manager Mr Fussell that "the failure was bound to happen sooner or later".
On 31 March 2023 the applicant was told that the second respondent had agreed to pay the full cost of repairs. He was further told that Miedecke Motors were going to perform the repairs. He then describes the efforts that he took to ascertain when the car would be fixed and says he was repeatedly told that it would be "within weeks". He did not request a replacement car as a result.
On or around 1 August 2023 Miedecke Motors informed him that the new AMG parts to remedy the engine failure would need to be manufactured and sent from Germany and that they could not provide an estimated time of arrival for the new parts. He then says at [30] that after waiting 4 months to be told exactly what had transpired and whether the car was able to be fixed, and then a further four months or so waiting for the repair to occur, he formed the view that the car would ultimately not be repaired properly and doubted that it would continue to be trouble free for the rest of his ownership. He says he lost faith in Mercedes Benz and the car. At [32] he says that in early August 2023 he decided to engage the services of a lawyer to find out what his options were. He was made aware at that time by his lawyer that it appeared there had been a major failure of consumer guarantees and that he had the right to reject the car. He says at [34] that on 22 August 2023 he instructed his lawyer to issue a letter to the first respondent rejecting the vehicle; further, that on 5 September 2023 the first respondent replied to his lawyer saying that it did not accept the rejection and would not be providing a full refund.
Relevant to the issues requiring the Tribunal's determination the letter of the applicant's lawyer at page 201 of the tender bundle, being a letter dated 22 August 2023 addressed to the first respondent, says that at the time of purchase the applicant was at the point of his retirement and purchased a vehicle so as to enjoy "his ultimate dream car". The letter then contends that following purchase and prior to the 16 November 2022 engine failure "the vehicle had been driven for a very limited number of kilometres".
The expert evidence on the issue of s54 breach comes from David Marston, master mechanic and Dr Casey (mechanical engineer); Mr Marston being retained to provide expert reports, and give expert evidence, for the applicant, and Dr Casey for the respondents. Mr Marston's reports are dated 23 November 2023 and 11 March 2025; Dr Casey 10 December 2024. There is also a joint report of the two experts dated 31 March 2025.
In his first report Mr Marston, following his inspection of the vehicle on 30 October 2023, concludes:

[35]

Dr Casey goes on to conclude at [7.1] to [7.8] that the incipient point of the engine damage is due to the HVA binding up which then consequently damaged other parts of the valve gear. He says the fact that 15 of the engine's 24 HVAs have frozen is consistent with the fact that at the time the damage was discovered there were widespread misfires in the engine, consistent with the widespread binding up of the HVAs. The HVA froze, he concludes, because of the lack of oil and that the circumstances are consistent with the vehicle remaining idle for long periods of time since it accumulated very little mileage over three and a half years since its purchase. He says that this will allow the oil to drain out of the HVA and aptly explains the wear inside the HVA as well as the fact that 15 of them froze. He says there are no defects, flaws or issues evident on the fracture surface of the cam load that he internally inspected. He says that this contradicts Mr Marston's claim of a hidden manufacturing defect. He further says that the fractured cam lobes showed a mixed mode fracture without any defects, and that the lack of damage to the edges of the cam lobe cracks is consistent with the cracking occurring at the end of the overall scenario. In other words, the cracking occurred in consequence of two other events, and was not the cause of those events.
Following the service of Dr Casey's December 2024 report, the applicant provided a second statement dated 11 March 2025. He says at [2] that the purpose of the statement was to supplement his earlier statement, and respond to the respondents' evidence. He then details in his second statement his usage of the vehicle following purchase.
The applicant says at [9] of his second statement that with the vehicle he continued a habit developed in respect of a former of vehicle of turning the engine on to warm up the vehicle for approximately 2 minutes before he drove it. He also says at [10] that he is well aware that cars need to be driven, especially high performance cars. He says that he made a conscious effort, even during the Covid lockdown, to drive the vehicle at least once a fortnight, even if just to his local golf course and back. He also says at [11] that he drove the vehicle to see his specialist urologist, his chemist, and attend local medical appointments in the Port Macquarie CBD, a 17 kilometre round trip. He says these trips would be, on average, once a fortnight. At [13] he says that outside Covid lockdowns the vehicle was being used, on average, once a week for "a long drive". He references driving the vehicle to Wauchope, a round trip of approximately 50 kilometres. At [14] he says the vehicle was at least driven once a week to local shops and cafes in and around the Port Macquarie CBD. Further, he refers to his membership of the Port Macquarie Astronomical Association and that he used the vehicle to attend "most" of their meetings, all of which were held at the Port Macquarie Town Centre.
At [29] the applicant disputes "categorically" the contention by Dr Casey that the vehicle had been left idle for long periods of time. He attaches to his statement what are described as contemporaneous diary entries from September 2019 to 16 November 2022; diary entries being referable to the Port Macquarie Astronomical Association meetings, as well as meetings with NSW Public Works.
The applicant's expert, Mr Marston, in his supplementary report of 11 March 2025 was provided with the documents that he refers to in his Appendix 2; of specific relevance the report of Dr Casey of 10 December 2024. A letter of the applicant's solicitors of 13 February 2025, contained within Appendix 2, does not refer to Mr Marston being provided with a copy of the applicant's 11 March 2025 second statement. He sets out at [9] and [10] his instructions in respect of the use of the vehicle. He says that his instructions were that the applicant did not drive the vehicle for many long distance trips but regularly used it for "... multiple short trips to ensure the [vehicle] got to operating temperature, ensuring all the engine internal components were continually and regularly lubricated". Mr Marston sets out at [10] his instructions as to the applicant's use of the vehicle from the time of purchase and says at [11] that the instructions were more detailed than the general instructions received when preparing his initial report. He says at [18] that Dr Casey is a respected expert but that he disagrees with his findings and believes they are based on incorrect or insufficient information. He says that, contrary to the view expressed by Dr Casey, the vehicle "... was in fact never left idle".
In reference to the hydraulic valve adjusters ("HVAs") Mr Marston says at [24]:

[37]

Mr Marston says at [25] that if the HVAs were jammed shut and not operating they would not have the ability to open the valves in multiple cylinders of the engine. He says that that means that the engine would misfire and the engine would idle abnormally or even fail to start. Further, he says that because of this it is reasonable to expect pitting and hammering damage would also be apparent during the inspection of the cam loads, as the HVAs would have too much clearance and would be striking the camshaft causing pitting damage.
At [28] Mr Marston concedes that whilst he had access to the vehicle he did not have access to all of its parts because some of the components were in various locations around the Miedecke Motors workshop. A number of the vehicle's components, he says, we're stored in different places. He says at [33] and [34] that he considered at the time his inspection the vehicle itself, parts available for him to examine during his inspection, as well as images and a video of the camshaft. He says the physical camshafts were not available for inspection but that he was able to establish that two cam lobes had failed from images and the video.
At [38] to [40] Mr Marston states why he does not agree with Dr Casey's opinion as to the vehicle remaining idle for long periods of time. He says at [41] that he is aware from his own education and experience in working on multiple manufacturer's vehicles - including Mercedes - which have hydraulic valve adjusters, or valve adjusters operated by oil pressure, that the adjusters maintain an internal supply of oil and that oil does not drain out of the HVA if a vehicle is not driven for a few weeks. He expresses the opinion at [44] that during the time that the applicant owned the vehicle he ran and drove it sufficiently to maintain constant oil pressure in the HVAs and throughout the engine. At [115] to [117] Mr Marston maintains the opinion expressed in his initial report as to the failure of the engine of the vehicle. He says the vehicle was not of acceptable quality at the time of supply due to what he describes as a hidden manufacturing defect. He says the reason the engine failed was because a cam lobe split and rotated on the camshaft which, he says, caused the engine failure. He says the faulty cam load is the hidden or latent defect. He has that belief because an experienced mechanic or engine reconditioner would expect the vehicle's engine to last the life of the vehicle, with that expectation to be between 150,000 to 250,000 kilometres before any major engine work was required.
Dr Casey and Mr Marston then prepared a joint expert conclave report dated 31 March 2025. That report is Exhibit A6. The conclave report records both experts conferring on 31 March 2025. Despite the two experts considering their previous reports, they maintained their respective views.
Mr Marston concludes at [11] to [26] of the conclave report that the vehicle's engine failed due to a faulty camshaft caused by a manufacturing defect. He (at [17]) agrees with Dr Casey that the vehicle's HVA showed that they operated for an unknown length of time without appropriate lubrication. He refers however to the evidence of the applicant in refuting Dr Casey's theory of oil draining out of the HVAs and says that as the engine did not suffer from periods of idleness. He disagrees with Dr Casey's theory that there was sufficient time for oil to drain out of the HVAs. He says if that was the case he would expect all the HVAs would have lost their oil and failed.
Mr Marston concedes that he has not been able to inspect the HVAs as they were lost at the time of his inspection and so has not been able to examine them for possible defects not considered by Dr Casey. He agrees that both experts opined that the engine showed no signs of global oil starvation. He says at [24] that because only 15 of the 24 HVAs in the vehicle failed this suggests that there was an undetermined defect within some of the HVAs. He concludes by saying that irrespective of whether the engine failed due to a manufacturing defect in the camshaft or a manufacturing defect in the HVAs to prevent the correct amount of lubrication to maintain the manufacturer's designed operation, for an engine with a service life expectation of between 150,000 to 250,000 kilometres to fail at only 3,224 kilometres, this "clearly demonstrates" that there is a hidden defect within the engine. He maintains the opinion that the vehicle was not of acceptable quality at the time of supply due to this hidden manufacturing defect.
Dr Casey says at [6] of the conclave report that it can be stated "to an engineering certainty" that the cam lobes fractured due to ductile overload as evidenced by the coarse and granular fracture surface. He further says that this happened in one sudden event which, he says, is the hallmark of ductile overload failures. He says the force that broke the cam lobes was not normal and that something else must have occurred prior to the cam lobes fracturing to generate that abnormal force. He says the seized HVA absolutely explains that abnormal force. He says that his microscopic inspection of the cam lobes found that there are no faults, defects, flaws or any other issue on the fracture surfaces or anywhere else on the cam lobes. He opines that if there are no faults, defects, flaws or other issues, it is impossible to conclude, as Mr Marston has, that there is a hidden manufacturing defect.
Dr Casey then explains the seizure of the HVA. He says at page 513 of the tender bundle that the only plausible explanation as to why the HVA seized is because oil drained out of them under gravity. He says HVAs are a robust mature technology and the oil does not drain out of them quickly, meaning that an extended time is needed. He says the only plausible explanation as to why the HVAs have ceased is that the engine stood idle for long periods. He says at page 514 of the tender bundle (page 5 of Exhibit A6):

[59]

At [9] of Exhibit A1 the applicant says that at the time of negotiating his purchase of the vehicle he said to the salesman that he "...wanted everything to be perfect because this was my dream car and buying this car was the culmination of a lot of years of hard work and waiting for this moment."
He also says at [11] that the car was marketed to him by the dealership on the basis of its performance, luxury and exclusivity.
The sales documentation annexed to the applicant's statement does not refer to any particular purpose; rather, to the vehicle being sold by the dealership and acquired by the applicant as a consumer as a Mercedes-Benz model AMG E63. There is nothing in the Details of Purchase of the purchase contract, nor in the Special Conditions at the foot of the contract, disclosing any particular purpose.
The letter of the applicant's solicitor of 22 August 2023 at page 201 of the tender bundle does not indicate that the applicant expressed anything to the first respondent at the time of purchase other than that he wished to "...enjoy his ultimate dream car". The author then asserted a breach of s54 of the ACL but did not mention s55 other than a brief assertion of failure to abide the statutory guarantee.
In his Points of Claim the applicant at [27], in referring to s55, says that he expressly made it known to the respondents that he was acquiring the car as a "dream car" and to be able to drive the car with no concern as to its quality. At [28] the applicant says that the respondents, in advertising, describing and selling the car as a prestige brand new vehicle represented to the applicant that the vehicle was reasonably fit for the disclosed purpose. The respondents deny that contention in their Points of Defence.
The applicant submits that the evidence establishes that he did rely on the skill and judgment of the first respondent in selecting, customising and purchasing a dream car for a retiree.
The respondents submit that as s55 is directed towards the actions of a supplier, it can only apply to the first respondent and not the second respondent. The primary submission that the respondents make, and which I accept, is that disclosure to the salesperson of the first respondent, as I accept the applicant did, that the vehicle that was his "dream car" is not a "particular purpose" as defined by subsection (2) of s55. All parties have referred in their submissions, to Vautin v By Winddown Inc (2018) 362 ALR702. There, Derrington J said at [247] that in s55 one looks to whether, at the time of supply, goods were fit for a disclosed purpose.
In Vautin a yacht was sold to the applicant for the particular purpose of motoring on the open ocean when in fact the yacht was not capable of being used in the open seas. The respondents say that those facts are different from those applying here. I agree. Informing a salesperson that a vehicle proposed to be purchased was for use as a "dream car" is, without further, sufficiently vague and imprecise to support a finding that it was, as subsection (2) of s55 requires a "particular" purpose.
The applicant submits that if there was a hidden manufacturing defect at the time of supply then the car was not reasonably fit for the disclosed purpose. His submissions concede that one looks at the question of fitness for disclosed purpose at the time of supply.
Finding, as I have, that making known to a salesperson that a vehicle proposed to be purchased was as a "dream car" was not a particular purpose (as that phrase is used in subsection 2 of section 55) is sufficient to reject the applicant's claim for breach of the s55 guarantee.
A second reason for rejecting the s55 claim is that I have found that there was no failure by either respondent to comply with the s54 guarantee concerning acceptable quality at the time of supply. I have, in these Reasons, found that I prefer the opinion of Dr Casey over that of Mr Marston. The evidence satisfies me that there was no hidden manufacturing defect as opined by Mr. Marston. As such, at the time of supply there was no failure by the first respondent to supply a vehicle not fit for purpose.
Further, I accept the respondents' submission that there is no breach of s55 because it was the applicant's conduct in allowing the vehicle to remain idle for lengthy periods of time and in failing to have the vehicle serviced, rather than a matter present at the time of supply, that made the vehicle unfit for any disclosed purpose.
Accordingly, the applicant's claim of failure to comply with the s55 consumer guarantee fails.