Bledniak-Zander v Grays.Com Pty Ltd

NCAT Consumer and Commercial|2021-08-18

REASONS FOR DECISION

The applicant claims that there was misleading and deceptive conduct pursuant to Section 18 of the Australian Consumer Law (ACL). The instrument panel was blacked out over the warning lights. The applicant seeks the amount of $2,326.17.
The applicant's documents are marked Exhibit A1 and the respondent's documents are marked Exhibit R1.

Jurisdiction

This is a consumer claim brought pursuant to Part 6A of the Fair Trading Act, 1987. I am satisfied that the applicant is a consumer and this is a consumer claim where goods were supplied pursuant to the payment of a sum of money. I find that I have jurisdiction to hear the claim.

Evidence of the respondent

The respondent agrees that the vendor blacked out the lights on the cluster on the dashboard. The vehicle was sold from the second respondent on consignment and the first respondent was the agent.
The second respondent was the owner of the vehicle and the claim is that the vehicle's panel was blacked out before it came to the first respondent. When a vehicle comes to a booking site of Grays Online, there is a visual inspection of the motor vehicle. The VIN number is typed into the computer and then the features are listed down including the speedo reading.
It then goes into a photo booth at the site and the year and model of vehicle is listed with a description of the vehicle. The information is then uploaded onto the website for bidding. The vehicle comes to the inspection site about two days before it goes live on-line. The auction can run for four or five days.
For the panel to be altered it has to be removed, texta is used to block out the warning lights on the cluster and then the cluster replaced. According to the first respondent, the texta was applied prior to the vehicle being taken to the site.
The use of the "texta" blocking out the cluster makes it hard to see from a glance whether there is any issue with the warning lights. With a massive production line it is difficult to inspect every cluster with 60 to 70 cars per day entering the site for sale.
The first respondent encourages people to come and inspect the motor vehicle and do their own due diligence and to send a mechanic in to do a third party inspection. The respondent as agent, simply presents the vehicle as it is, the onus is on the vendor and the purchaser. The first respondent stated that where they blacked out the cluster with a "texta" is very difficult to see with the naked eye any warning lights. The respondent claimed that it would have been very difficult for the applicant to see the warning lights blacked out and it's most likely that the defects with the vehicle would not have been discovered until the applicant took the vehicle to his mechanic and they did a diagnostics test. The respondent claims that they were also misled by the second respondent.

Agency

The first respondent claims that they are an agent and therefore not liable for the action of the principal, being the second respondent. It is not controversial that the first respondent had an agency agreement with the second respondent.
The law of agency was discussed in Flight Centre Travel Group Limited T/A Aunt Betty v Goel [2021] NSWCATAP 44, "An agent usually means a person employed for the purpose of placing the principal in contractual or other relations with a third party. The agent is one who by authority, performs an act for another. Where a person enters into contractual relations as agent, the agent signifies that it does not sign as principal and did not intend to incur personal liability: see Universal Steam Navigation Co v McKelvie & Co [1923] AC 492 per Lord Parmoor at 503-504. Such principle was referred to specifically in relation to travel agents in Air Tahiti Nui Pty Ltd v McKenzie (2009) 77 NSWLR 299; [2009] NSWCA 429, where Allsop P and Handley AJA said at [21], in answer to a submission that a party who arranged flight travel was liable for injuries sustained on a flight operated by the appellant: We reject these submissions. The phrase "as a principal" describes the capacity of the person who "makes an agreement for carriage". An agent who "makes" such an agreement, such as a travel agent, is not a contracting carrier.
I find that there was an agency agreement between the first respondent and the second respondent. The first respondent agrees that the blocking out of the display was deceptive, but they were unaware of the deceptive and could not have been reasonably been are of the conduct. The respondent claims that it is hard to see with the naked eye the blocked out display and with a massive production line it is difficult to inspect every cluster with 60 to 70 cars per day. The respondents encourage people to come and inspect the motor vehicle and do their own due diligence and to send a mechanic in to do a third party inspection. I accept that submission that the applicant as a reasonable consumer should have inspected the vehicle in person or through a third party before purchase. The vehicle is not represented as new, there is a responsibility on the applicant to inspect the vehicle before its purchase. I accept the evidence of the first respondent that they were not aware of the deceptive conduct until informed by the applicant. Where the first respondent is acting as an agent and advertising the product for the principal as in Flight Centre Travel Group Limited T/A Aunt Betty v Goel , they not contracting with the applicant and therefore not liable for the actions of the principal.

Misleading and Deceptive Conduct

In The Australian Consumer Law the author refers to a contractual promise about an existing matter of fact will contravene s 18 [ACL] where the facts are not promises and this misleads someone who the promisor knew may rely on that promise. A promise may also contain an implied representation of existing fact, namely that the promisor has a present intention to make good the promise, or that the promisor has the means to do so. Stack v Coast Securities 9 Pty Ltd (1983) 46 ALR 451.
The provision of the misleading or deceptive conduct is where the contracting party relies on a promise at the time of entering the contract.
The Appeal Panel considered the test for false and misleading conduct in Forbes v Wan [2020] NSWCATAP 129, in applying Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25 at [24]-[33], the High Court said, "that in considering whether the facts of a case disclosed misleading or deceptive conduct, a two-step analysis is required. The first step involves asking whether facts establish the conduct pleaded. The second step involves asking whether, as a question of fact, the conduct is false, misleading or deceptive or likely to mislead or deceive. It is necessary to have regard to the context in which the representation was made and to the relevant surrounding facts and circumstances. Regarding the alleged misleading or deceptive conduct, the conduct complained of was promises of future conduct."
In Yorke v Lucas (1985) 158 CLR 661; [1985] HCA 65 at [17] the High Court said (when considering the previous but relevantly the same provisions of the Trade Practices Act 1974 (Cth)) that "involved" requires a party to a contravention to be an intentional participant, the necessary intent being based upon knowledge of the essential elements of the contravention.
I am satisfied that the first respondent is an agent and is not liable for the conduct of the second respondent. The claim against the first respondent is dismissed.
There is little doubt that the conduct of the second respondent amounts to misleading and deceptive conduct in accordance with Section 18 of the ACL by blocking out the display the applicant was unable to determine whether the vehicle had warning lights and that the vehicle was defective. The conduct of the second respondent was misleading and deceptive and I find the claim proved against the second respondent.
The following items were withdrawn from the expenses claim (Exhibit A1 [25]), the tyres, the struts, and the claim for costs. I find that each of the other remain items listed may not have been incurred or may have been identified if the display had not been blocked out.
The following items are associated with the misleading and deceptive conduct and I find the damages fair and equitable
Car transport express $882, Tri star motor $345.81, biz tow $123.20, seat sensor $65.41, Autoparts home (locks) $109.90, Best batteries $117 and $335.22, lock actuator $27.48, BM automotive $132.00. Total $2,138.02

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: 14 February 2022

Trade Practices Act 1974(Cth)

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