This is an appeal from a decision of the Tribunal given in the absence of the appellant in which the Tribunal found in favour of the respondent.
For the reasons that follow the appeal must be dismissed.
[2]
Background
The respondent purchased a 2014 Golf GTi from the appellant on 2 March 2020.
The respondent's case before the Tribunal was that he wanted a non-modified car. He communicated this desire to the salesman, Terry, when he visited the appellant's premises prior to purchasing the car. Terry told the respondent that this particular car had not been modified and was completely stock standard.
Accompanying the car, as was required, was a Form 5 Motor Dealer's Notice for Motor Vehicles which had been filled out and signed by the appellant. In that Form 5 appeared the statement followed by "Yes" and "No" checkboxes:
"This vehicle has had major modifications and/or repairs, including the replacement or repair of any of the panels, structural members or components by cutting or welding."
The "No" checkbox was checked.
The salesman also represented to the respondent that the car came with a full VW logbook (service) history. This was consistent with what appeared in the online Carsales advertisement for the car which said that the car came with:
"… VW service history …"
The respondent was not provided with the logbook when he purchased the car. He was reassured by the salesman, the appellant's "owner", Mr Awad, and the appellant's manager, Mr McBride, that the car had a full VW service history, the logbook was still at the appellant's workshop, but the respondent would receive the logbook soon.
The respondent's case was that the representations that the car had not been modified and came with a logbook which contained a full service history for the car were misleading or deceptive, that he purchased the car because of those representations and would not have purchased it if those representations had not been made.
Within a day of purchasing the car the respondent noticed a slight noise from the front right of the car which then progressively got worse. He took the car to two independent mechanics.
One of those mechanics told the respondent that the exhaust had been modified and there was no engineering certificate stating that the modified exhaust system complied with EPA emission or noise standards. Subsequently the respondent obtained an MTA Pre Purchase Inspection report which said, amongst other things:
"Exhaust system has been modified and may not meet with RTA and EPA regulations."
In relation to this exhaust the Tribunal found:
"… the (appellant) represented on the Form 5 that the motor vehicle had not been subject to major modification, when in fact its muffler had been subject to major modification."
There is no appeal from the Tribunal's findings that the appellant had represented that the car had not been modified and that that representation was misleading and deceptive because, in fact, the exhaust had been modified.
A number of other faults were also found in the car, but these are not relevant to this appeal and need not be mentioned.
Initially the respondent went to NSW Fair Trading, a division of the NSW Department of Customer Service, to see if that organisation could assist him with his dispute with the appellant. Contact was made by Fair Trading with the appellant.
Through Fair Trading's intervention the appellant indicated that it would be willing to rectify the mechanical issues with the car including the muffler.
However, shortly thereafter, on 16 March 2020, the respondent received the car's logbook which had earlier been promised by the appellant.
The Tribunal made the following findings of fact concerning the supplied logbook:
"In fact, the logbook ultimately supplied did not relate to the motor vehicle purchased by the consumer and contained various falsified and modified entries as to the motor vehicle's purported service history."
There is no appeal from the Tribunal's findings that the appellant represented to the respondent that he would be supplied with a logbook containing a (genuine) full service history for the car and that that representation was misleading or deceptive.
On 14 April 2020 the respondent commenced proceedings against the appellant in which he sought a refund, change over fees, registration renewal costs and costs incurred from his lending institution (he had financed the purchase of the car).
In an email to the Tribunal dated 11 June 2020, which was the only material the appellant provided to the Tribunal in relation to the respondent's application, the appellant said:
"We have contacted Mr. Jarrad Miller back in March to get his car fixed as we agreed with him and he informed us that he has sold the car.
I don't know if he has informed you that.
Thanks for your help."
A little over one month after that email, on 13 July 2020, the Tribunal issued directions for the preparation of the application for hearing. The Tribunal's orders, as emailed to the parties, were:
1. By determination of Member, on 13 July 2020, the hearing was adjourned to a date to be fixed by the Registrar.
2. Leave is granted to the (respondent) to amend the claim to $3,550.
NOTE
A Next hearing is the formal hearing.
B The (appellant) informed the Tribunal today that he had not received the (respondent's) documents.
C The (respondent) has confirmed today that he has now sold the car and he seeks compensation for the reduced amount of $3,550.
3. The time for the (respondent) to provide documents to be relied upon at the hearing, which have already been sent to the Tribunal, to be sent to the (appellant) by email (address) by 5.00PM on 15 July 2020.
NOTE
Documents should include confirmation as to how the sum of $3,550 is calculated and this document also needs to be sent to the Tribunal if it has not already been provided.
4. The time for the (appellant) to provide documents in reply to the (respondent's) documents, to the (respondent) and the Tribunal is extended to 5.00PM on 22 July 2020.
5. Telephone numbers for parties and their witnesses who will attend the hearing by telephone must be provided to the Tribunal not less than 72 hours before the hearing.
NOTE
Witnesses must have provided a witness statement in the party's bundle of documents.
It is pertinent to note that the appellant was present at that directions hearing, it was informed at that time that the respondent had sold the car, it confirmed the email address to which documents could be sent to the appellant and it was present when the Tribunal directed it to provide documents in reply to the respondent's documents including any witness statements.
The following day, on 14 July 2020, the respondent emailed the documents upon which he intended to rely to the email address provided by the appellant per the orders of the Tribunal set out at [22] above.
No documents or witness statements were served by the appellant in compliance with the Tribunal's orders. The respondent confirmed at the hearing before the Tribunal that he had not been served with any documents or witness statements by the appellant other than the appellant's email dated 11 June 2020 set out at [21] above.
The hearing of the application took place on 13 August 2020.
On that date the respondent appeared but there was no appearance by the appellant. The Tribunal made three attempts to telephone the nominated officer of the appellant, but that officer's phone was engaged on each occasion.
The Tribunal was satisfied that notice of the hearing was duly served on the appellant, and the appellant does not contend otherwise on this appeal.
The Tribunal considered the documentary evidence tendered by the respondent and his oral evidence. The Tribunal reasoned as follows:
"(T)he contract for the purchase of the motor vehicle must be set aside because it is clear on the uncontested evidence of the (respondent) that he was induced into the sale contract by misleading and deceptive conduct by the (appellant). In this respect the trader made two misleading and deceptive representations to the (respondent). First that motor vehicle was sold with a 'full log book history' In fact, the log book ultimately supplied did not relate to the motor vehicle purchased by the consumer and contained various falsified and modified entries as to the motor vehicle's purported service history. Second, the trader represented on the Form 5 that the motor vehicle had not been subject to major modification, when in fact its muffler had been subject to major modification. The consumer relied upon this (sic) representations in his decision to purchase the motor vehicle and did so to his detriment because he was left without the reassurance that the motor vehicle had a good service history and had not been subject to major modification.
(T)he (respondent) is entitled to be compensated for the damage and loss he incurred as a consequence of the trader's misleading and deceptive conduct being the difference between the sum the (respondent) was able to sell the motor vehicle for ($21,500.00) and the payout figure for the finance contract under which he purchased the motor vehicle ($24,567.00)."
The appellant has appealed from that decision.
[3]
The Appeal
In its Notice of Appeal filed on 31 August 2020 the appellant set out its grounds of appeal as follows:
"I (meaning the appellant's director, Mr Awad) was waiting that morning for a call and never had it. I have attached files and copy of my phone records to show that I was trying to get in contact.
I thought maybe case was dropped as we agreed with Mr Miller to fix his exhaust and when he didn't show he told us that he sold the car for $21,500 and he bought it for $22,000.
Then he said he wants us to pay for his finance payout that he arranged himself. The case was never about paying for his car but to change his exhaust.
I don't think I had a fair case and I deserve to have the chance to give my evidence and opinion about this matter knowing that we have done nothing wrong with the customer and we were trying always to help."
On 13 September 2020 the Appeal Panel made the following directions and note:
"2. The Appellant is to lodge with the Appeal Panel and give to the Respondent by 07/10/2020:
(a) All the evidence given to the Tribunal below on which it is intended to rely;
(b) Any evidence not provided to the Tribunal in making the decision under appeal, on which it is intended to seek leave to rely;
(c) The Appellant's written submissions in support of the appeal; and
(d) The sound recording or transcript of the hearing at first instance, if what happened at the hearing is being relied on and a typed copy of the relevant parts.
…
NOTE:
(1) If a party does not lodge with the Appeal Panel and give to the other parties documents, sound recordings and submissions as directed above, that party may not be allowed to rely on those documents, sound recordings and submissions at the hearing of the appeal."
The appellant accepted during the hearing of the appeal that an email containing those directions and note had been received by it.
The only evidence lodged with the Tribunal in compliance with the directions were some emails and phone records which suggested the appellant did not receive any phone call from the Tribunal on the day of the hearing.
However, no evidence was filed relevant to or contradicting the respondent's case against the appellant for misleading or deceptive conduct, or in relation to the damages sought by the respondent.
Mr Awad's oral submissions on the appeal (no written submissions were filed as directed) were threefold:
1. The appellant had not been contacted on the day of the hearing.
2. The appellant thought that there was an agreement between it and the respondent that the appellant would fix the exhaust.
3. The appellant should not be required to pay the difference between the sale price and the respondent's payout figure.
[4]
Decision
We are prepared to accept that there is some doubt that the Tribunal attempted to contact the appellant's representative using the correct telephone number. The evidence in support of the appellant's contention is thin, but we do not have a record of the telephone number used by the Tribunal and so the material available to us does not allow us to find otherwise.
However, that does not mean that the appeal must succeed.
If the appellant was not contacted, then an issue of procedural fairness arises as the appellant has been denied an opportunity to fairly put its case. However, denial of the opportunity to put its case does not necessarily result in a new hearing. An order for a new hearing will only be made if the appellant proves that the denial of an opportunity to put its case deprived it of a possibility of a successful outcome - Stead v State Government Insurance Commission [1986] 161 CLR 141. Put another way, if there was no possibility of a different result then a new hearing will not be ordered. On this issue, it is the appellant which must prove on appeal that, if it was given a new hearing, there would be a possibility that it would succeed.
In this appeal the appellant has not demonstrated that such a possibility exists.
The appellant does not contest the Tribunal's findings that misleading and deceptive representations were made and does not contest that the respondent relied on those representations when purchasing the car. The appellant also does not contest that had the truth been known the respondent would not have purchased the car nor that the respondent suffered damage. Therefore, the appellant does not contest any part of the respondent's case which prima facie entitles him to an award of damages for misleading or deceptive conduct.
Rather, the appellant says that it had an agreement with the respondent that it would repair the muffler. Presumably the appellant alleges that that agreement (assuming it existed) operated as a settlement of the parties' dispute and thus would disentitle the respondent to sue for damages. If the appellant alleges some other defence then it was not identified by the appellant and is not apparent to us.
However, there was no evidence served by the appellant (before the hearing or before this appeal and despite the Tribunal's directions) of this agreement or its terms. The sole reference to it is in the appellant's email of 11 June set out at [21] above. That email alleges an agreement of some sort but is not evidence of it.
Further, other than alleging an agreement that the appellant would fix the car, there is no evidence of any term of that agreement to the effect that that agreement was in full and final satisfaction of all legal rights the respondent had against the appellant. The email is silent on that matter.
On the respondent's evidence there was some form of informal arrangement between the parties whereby the appellant agreed to attend to the exhaust problems, but that evidence falls short of the evidence needed to prove an agreement which is a defence to the respondent's claim.
Further still, any such agreement or arrangement came into being before the appellant gave the respondent the logbook which did not relate to this car and which contained falsified and modified entries as to the car's purported service history.
Contrary to what the appellant submitted on appeal, it could not have been in any doubt that the respondent was proceeding on the basis of the falsified logbook, in addition to the exhaust issue, because that was made plain in the respondent's application (which expressly mentioned both the logbook and exhaust issues) and the documents the respondent served on the appellant on 14 July 2020 which included evidence relating to the exhaust issues (such as the MTA Pre Purchase Inspection report) and evidence about the logbook and its falsified entries.
Therefore, if there were a defence to this claim by way of a binding settlement agreement, no evidence was served by the appellant to that effect. All the Tribunal was given was the email of 11 June 2020 (see at [21] above). This did not constitute evidence of a binding agreement. There was, for example, no evidence by way of a witness statement served by the appellant in which evidence was given of any binding agreement (which the appellant had been told to supply - see [22] above).
Neither has the appellant provided any evidence on that issue by way of fresh evidence as the Appeal Panel directed on 13 September 2020 (see [32] above). Such material needed to be served in fairness to the respondent so that he might have the opportunity to respond. The appellant gave him no such opportunity.
The other point the appellant raised on the appeal was the assessment of damages. The appellant says it should not have to pay the difference between the sale price and the respondent's payout figure.
This submission proceeds on the basis of a lack of understanding of what remedies the law provides in a case such as the present. In a case of misleading or deceptive conduct, where the Tribunal accepted that the respondent would not have purchased the car but for the misleading representations, the respondent is entitled to a sum of money representing the respondent's net expenditure which would not have been spent but for the appellant's conduct.
That measure can vary depending on the circumstances of the case, but there is nothing in the material before us which suggests the Tribunal erred in awarding the respondent the sum that it did.
Accordingly, the appellant has failed to persuade us that if there was a new hearing there would be a possibility of a successful outcome for the appellant. Accordingly, the appeal must be dismissed.
[5]
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: 07 December 2020