Cleanairflow Solutions Pty Ltd v Edmonds [2021] NSWCATAP 131 | Case summary

NCAT Appeal Panel|2021-02-15

Background

As noted above, in May 2019 the supplier sold a caravan to the consumer.
Section 259 of the ACL provides that a consumer may take action under that section if a person supplies, in trade or commerce, goods to that consumer and a guarantee that applies to that supply is not complied with. One such guarantee is the guarantee in s 54 of the ACL that goods are of acceptable quality.
If the failure to comply with such a guarantee is a major failure, then the consumer may reject the goods or take action against the supplier to recover compensation: see s 259(3) of the ACL. For these purposes, a major failure is defined in s 260 of the ACL in a way which includes: A failure to comply with a guarantee referred to in section 259(1)(b) that applies to a supply of goods is a major failure if: the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure ...
There was no issue that the respondent was a consumer, or that the caravan was goods supplied in trade or commerce. Nor was there any issue that the guarantee in s 54 of the Act applied to the supply of the caravan.
The issue for determination by the Tribunal was whether the supplier had failed to comply with the guarantee in s 54 of the ACL.

Grounds of Appeal

The Grounds of Appeal are reproduced below: The Tribunal has made the orders listed above on the basis that Member S Sutherland has determined against the weight of evidence that the damage to vehicle was caused by a "defective hub and wheel falling off". The Hanson Report does not make the finding that the wheel hub was defective. The caravan hub is not mentioned in his report. The Hanson Report is also missing critical information including a date, VIN and Important NCAT Expert Evidence requirements. Mr Roudeheni's expert witness report states that "Damage consistent with a hard impact on the left hand side and subsequently wheel falling off". Mr Roudeheni does not mention a defective wheel hub. There is no evidence to suggest that the wheel hub is or was defective. The report concludes that there is damage to the caravan, this is not in dispute. There is obvious damage cause by an accident or collision with considerable impact to the left hand side. The evidence shows that this hard impact has shifted the axle alignment rear-ward. The respondent did not produce any evidence that the damage occurred as a result of the quality of the vehicle or the way it was built. The consumer guarantee of acceptable quality under the Australian Consumer Law does not apply to damage caused by the consumer. The decision of the lower Tribunal did not consider the weight of the evidence that the vehicle was delivered to the consumer undamaged, and that the expert witness evidence shows "user damage". Consideration of "dirt tracks" is not related to the accident or damage, this is not disputed. Member S Sutherland has determined that in Mr Roudeheni's expert witness report, "The reason why the wheel came off is not fully explained" The report however lists on multiple occasions that: 1. Severe damage to the underbody consistent with a hard impact 2. Left hand side wheel has been impacted whilst in transit. 3. Markings consistent with user damage. 4. Axle damage causing mis-alignment 5. Damage consistent with a hard impact on the left hand side and subsequently wheel falling off.
The Notice of Appeal also includes an application for leave to appeal on the basis that the supplier has suffered a substantial miscarriage of justice because the decision was against the weight of evidence. More particularly, the supplier contends that the Tribunal reached conclusions for which there is no evidence, and which are contrary to the evidence of Mr Roudeheni.

Consideration

The Tribunal found that there was a major failure as a result of the initial series of failures together with the left wheel falling off on 7 November 2019.

The initial failures

The initial series of failures is not mentioned in the grounds of appeal listed in the Notice of Appeal and which are set out above. However, in the section of the Notice of Appeal concerning whether the Decision of the Tribunal was against the weight of evidence and which requested the supplier to identify the evidence that had been before the Tribunal, the supplier included the following: The respondent provided a list of minor issues for the caravan. These issues were not supported by evidence. The expert witness report conducted by Mr Roudeheni reported on all aspects of the caravan, including testing systems, and did not find any evidence of these issues.
Applying the principles discussed by the Appeal Panel in Cominos v Di Rico, we treat this as an expression of: 1. a ground of appeal that the Tribunal erred in law by making a finding for which there was no evidence; 2. an application for leave to appeal on the basis that the Tribunal's finding was against the weight of evidence.
We consider these in turn below.

Did the Tribunal err in law by making a finding for which there was no evidence?

The supplier's contention is that there was no evidence supporting the conclusion that there were initial issues with the caravan.
However, the supplier has not put before the Appeal Panel the transcript or a sound recording of the proceeding below. As we do not have before us all of the evidence that was before the Tribunal, we are not in a position to assess whether there was no evidence supportive of a conclusion that the initial issues existed, and this ground of appeal must fail for that reason.
In any event, and contrary to the supplier's submission, there was evidence before the Tribunal of the various matters making up the initial series of failures. That evidence is contained in the 10 January 2020 Report. It is apparent that the Tribunal accepted this evidence (see Decision [16], [38]), and it was open to the Tribunal to do so.

Was the Tribunal's finding against the weight of the evidence?

The expression "against the weight of evidence" in the Tribunal means that the evidence in its totality preponderates so strongly against the conclusion favoured by the Tribunal that it can be said that the conclusion was not one that a reasonable Tribunal member could reach: Calin v Greater Union Organisation Pty Ltd (1991) 173 CLR 33; [1991] HCA 23 at [153], followed in Collins v Urban at [77].
Again, the absence of the record of what occurred before the Tribunal means that the Appeal Panel is unable to determine whether a particular finding was against the weight of evidence.
In support of its contention that the Tribunal's conclusion that there was an initial series of failures was against the weight of evidence, the supplier made the following submissions.
First, that the initial issues had been resolved by reimbursement. The consumer's submission in response was that reimbursement had been sought for four of the initial issues, and that for each of these it had been necessary to commence (earlier) proceedings in the Tribunal. We note that the supplier did not identify evidence of the reimbursement. In any event, we do not regard it as relevant. The Tribunal's finding was that the initial failures, cumulatively, were part of a major failure. As such, the consumer was entitled to reject the goods and to seek compensation: s 259(3) of the ACL. Whilst the question of remediation may arise where the failure is not a major failure (s 259(2) of the Act), that is not the present case.
Secondly, that there is no evidence to indicate that the initial issues were the result of a lack of acceptable quality and the consumer had not discharged his onus of proof.
Contrary to the supplier's submission and as noted above, there was evidence before the Tribunal of the various matters making up the initial series of failures. That evidence is contained in the 10 January 2020 Report. As noted above, it is apparent that the Tribunal accepted this evidence (see Decision [16], [38]), and it was open to the Tribunal to do so.
Thirdly, that the initial issues were not actually issues under s 259(1) of the ACL and it was misleading to include them. This submission is baseless for the reasons set out above.
Fourthly, that statements made by the consumer should carry very little weight unless substantiated by evidence of unacceptable quality. We understand this to be a submission that the consumer's evidence should not be accepted without corroboration. In our view, it was open to the Tribunal to accept the consumer's evidence, particularly as that evidence was contained in the 10 January 2020 Report, which was prepared reasonably contemporaneously with the events in question.
Fifthly, that the initial issues were not identified by Mr Roudeheni in the Roudeheni Report and therefore the initial issues either did not exist or had previously been rectified. However, the fact that Mr Roudeheni did not refer to these matters in his report does not assist the supplier, absent evidence that Mr Roudeheni was asked to consider these issues and evidence that these issues had not been remedied before Mr Roudeheni's inspection in July 2020. The supplier has not identified such evidence.
Sixthly, that the supplier made every effort to obtain possession of the caravan so as to access it and to rectify any minor issues, but the consumer failed to provide access. This submission, which is disputed by the consumer, is not supported by evidence before the Appeal Panel.
Having considered the submissions and the evidence we are not satisfied that the Tribunal's conclusion that there was an initial series of failures involved an error of law. We are also not satisfied that such a conclusion was against the weight of evidence or not fair and equitable, and thus we are not satisfied that the supplier may have suffered a substantial miscarriage of justice or that we should exercise our discretion to grant leave to appeal.

The defect finding

As noted above, the Tribunal also relied upon the fact that the wheel fell off in reaching its conclusion that there had been a major failure.
Adopting the approach suggested by the Appeal Panel in Cominos v Di Rico, we have again considered the supplier's Notice of Appeal and submissions with a view to discerning whether they disclose grounds that may raise a question of law or a basis for leave to appeal. Having done so, we consider that the supplier: 1. has raised a question of law, namely whether there was no evidence to support a finding of fact that the wheel hub was defective; and 2. seeks leave to appeal on the basis that the Tribunal found that the damage to the caravan was caused by a "defective hub and wheel falling off" and that this finding was against the weight of evidence.
We consider these in turn below.

Did the Tribunal err in law by making a finding for which there was no evidence

The supplier has submitted that there is no evidence to support a finding that the wheel hub was defective. However, the supplier has not put before the Appeal Panel the transcript or a sound recording of the proceeding below. As we do not have before us all of the evidence that was before the Tribunal, we are not in a position to assess whether there was no evidence supportive of a conclusion that the wheel hub was defective, and this ground of appeal must fail for that reason.
There are two other reasons why this ground of appeal fails.
The first reason is that it is not clear that the Tribunal in fact found that the wheel hub was itself defective. The Tribunal found that it was "a reasonable conclusion that there was a manufacturing defect which allowed the wheel to come off from the hub causing the threads to need re-tapping" (Decision [33] (first appearing)).
Whilst the Tribunal subsequently referred to "the defective hub" (Decision [33] (second appearing)), and stated "the caravan hub was defective" (Decision [36]), we take the latter statements as being a shorthand reference to the conclusion in paragraph [33] (first appearing) of the Reasons. In other words, the Tribunal's finding was not that the wheel hub itself was defective, but rather that there was a defect which allowed the wheel to come off from the hub causing the threads to need re-tapping.
The second reason is that a finding as to the reason for the failure is not an essential step in the Tribunal's reasoning. The failure was the wheel falling off. The Tribunal was entitled to conclude that this was a failure of the supplier, within s 54 of the ACL, without a specific finding as to why it fell off, in circumstances where: 1. there was evidence that the wheel had not previously been removed during the period of the consumer's ownership of the caravan during which the caravan had travelled only 2,000 kilometres; 2. the absence of any suggestion that the consumer was the cause of the wheel coming off (Decision [31]); and 3. in the ordinary course of events, wheels do not fall off caravans under tow.

Was the finding that the damage to the caravan was caused by a "defective hub and wheel falling off" against the weight of evidence?

The essence of the supplier's submissions on this issue is: 1. there was no evidence to support the finding that the damage to the vehicle was caused by a "defective hub and wheel falling off"; and 2. there was evidence that the damage to the caravan was caused by an accident.
We do not accept the "no evidence" submission for the reasons set out above.
The supplier's submission that the damage to the caravan was caused by an accident relies upon the Roudeheni Report. Thus it is necessary to consider that report in some detail.
Mr Roudeheni professes to be a licenced motor vehicle repairer whose field of expertise is recreation vehicle manufacturing, who is able to conduct assessments and repair work on caravans, to ascertain their road worthiness and able to act as an independent expert witness. He also acknowledged that he had read the expert's code of conduct and agreed to be bound by it. Mr Roudeheni describes the scope of his report as follows: This report will focus on: • The condition of the caravan • Issue that may affect roadworthiness, including structural issues. Reasons will be included where possible for each opinion expressed.
Mr Roudeheni recorded that he inspected the caravan on 14 July 2020. His report contains a series of photographs, which we infer were taken by him. The Roudeheni Report contains the following observations and comments: Exterior Body Clean with no visible damage Doors Clean with no visible damage Windows Clean with no visible damage Lights Clean with no visible damage Seals Clean with no visible damage Underbody Left hand wheel arch is damaged. Axle damage including mis-alignment. Wheel damage. Chassis Chassis still mounted to the caravan no loose mounts or signs of detaching. Exterior Comments The subframe is still connected to the body on all four corners. The mounts are still securely attached to the frame. Severe damage to underbody consistent with a hard impact. Left hand side wheel has been impacted whilst in transit. Evidenced by rubber markings inside the left hand wheel arch and subsequent damage to the fibreglass. Axle mis-alignment has occurred as evidence by measurements from wheel arch to wheel tyre/hub. Left hand side axle trailing arm has been permanently altered, positioning the wheel hub approximately 25 mm forward of the natural position. Markings consistent with user damage on the underbody skirt, wheel arch, spare wheel, brake drum/hub and axle. Lock nuts appear to be after market. … Interior Cabinets Cabinetry loose, including left hand side bed frame, workbench storage cabinet and hanging cupboard. … Interior Comments The interior is in general working order. Signs of general wear and tear on all the cupboards and cabinetry. There is loose cabinetry where the screws have been dislodged from mounts. … SUMMARY Technical Comments • Axle damage causing mis-alignment. Requires replacement. Including hub/braking system due to known damage • Fibreglass damage requires structural assessment/repair. • Cabinetry damage including dislodgement of screws from mounts. • Damage consistent with a hard impact on the left hand side and subsequently wheel falling off. …
The parts of the text of the Roudeheni Report upon which the supplier places particular reliance are underlined.
This evidence, including the evidence of Mr Roudeheni that there was "Damage consistent with a hard impact on the left hand side and subsequently wheel falling off", does not render the Tribunal's finding as one against the weight of evidence, because: 1. the presence of damage consistent with a hard impact on the left hand side is equally consistent with the findings made that the damage to the caravan was caused by the wheel falling off; 2. the suggestion that the wheel fell off after the "hard impact" is a bald conclusion - there is no reasoning supporting it or explaining why that was the sequence of events; 3. the evidence of the consumer, accepted by the Tribunal, was that there had been no prior impact; 4. the photographic evidence in the Roudeheni Report does not suggest that the damage suffered by the caravan was the result of a prior impact rather than a result of the wheel falling off.
The supplier submitted that it was significant that neither the Hanson Report nor the Roudeheni Report mentioned the wheel hub. In our view, this is not significant in circumstances where there does not appear to be evidence that either of them inspected it.
The supplier relies upon the reference in the Roudeheni Report to: "Severe damage to underbody consistent with a hard impact". However, it is not apparent from the Roudeheni Report that such damage was caused other than when the wheel fell off.
The supplier also relies upon the reference in the Roudeheni Report to "Markings consistent with user damage". Again, it is not apparent from the Roudeheni Report that such damage was caused other than when the wheel fell off, or from normal wear and tear.
Having considered the submissions and the evidence we are not satisfied that the Tribunal found that the wheel fell off the caravan because of a defect in the wheel hub, or if did so find, that such a finding involved an error of law. We are also not satisfied that such a conclusion was against the weight of evidence or not fair and equitable, and thus we are not satisfied that the supplier may have suffered a substantial miscarriage of justice or that we should exercise our discretion to grant leave to appeal.

Orders

The orders of the Appeal Panel are: 1. Leave to appeal is refused. 2. The appeal is dismissed. 3. The stay ordered on 8 December 2020 is lifted.

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 May 2021

Error of law

In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [13], an Appeal Panel set out a non-exhaustive list of questions of law which relevantly for present purposes included whether there was no evidence to support a finding of fact.

Leave to appeal

As the appeal is from a decision of the Consumer and Commercial Division of the Tribunal, the circumstances in which the Appeal Panel may grant leave to are limited to those set out in cl 12(1) of Sch 4 of the NCAT Act.
The question of when it is appropriate to grant leave to appeal from a decision of the Consumer and Commercial Division was addressed in some detail in the oft-cited decision of an Appeal Panel in Collins v Urban [2014] NSWCATAP 17 at [65]- [84]. The following principles, extracted from that decision, are relevant.
First, the Appeal Panel's discretion to grant leave is only enlivened if the Panel is satisfied that the supplier may have suffered a substantial miscarriage of justice because, per cl 12(1) of Schedule 4: (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
Secondly, cl 12 does not require that the Appeal Panel must be satisfied that the supplier has actually suffered a substantial miscarriage of justice. All that is required is that the supplier "may" have suffered such a miscarriage.
Thirdly, the concept of a substantial miscarriage of justice refers to a failure in the way a matter was conducted or decided which deprived the supplier of a chance that was fairly open of achieving a better outcome than occurred.
Fourthly, it should be accepted that a substantial miscarriage of justice may have been suffered because of any of the circumstances referred to in cl 12(1)(a), (b) or (c) where there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the supplier had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance.
Fifthly, in order to show that a party has been deprived of a "significant possibility" or a "chance which was fairly open" of achieving a different and more favourable result because of one of the circumstances referred to in cl 12(1)(a), (b) or (c), it will generally be necessary for the party to explain what its case would have been and show that it was fairly arguable. If the party fails to do this, even if there has been a denial of procedural fairness, the Appeal Panel may conclude that it is not satisfied that any substantial miscarriage of justice may have occurred.
Sixthly, if the Appeal Panel is satisfied that the supplier may have suffered a substantial miscarriage of justice on one of the grounds identified in cl 12(1)(a), (b) or (c), then the Appeal Panel "may" grant leave under s 80(2)(b) of the Act. In other words, the Appeal Panel retains a discretion.
Seventhly, the principles which govern the granting of leave to appeal by the Appeal Panel under s 80(2)(b) should generally be consistent with those which are applied by Courts when considering the question of leave to appeal. The general principles can be summarised as follows: 1. in order to be granted leave to appeal, the applicant for leave must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact; 2. ordinarily it is appropriate to grant leave to appeal only in matters that involve: 1. issues of principle; 2. questions of public importance or matters of administration or policy which might have general application; 3. an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; 4. a factual error that was unreasonably arrived at and clearly mistaken; or 5. the Tribunal having gone 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.
Where, as in the present case, the supplier is not legally represented it is appropriate for the Appeal Panel to review the stated grounds of appeal, the material provided, and the Decision to examine whether it is possible to discern grounds that may either raise a question of law or a basis for leave to appeal: Cominos v Di Rico [2016] NSWCATAP 5 at [13].

Materials before the Appeal Panel

The materials before the Appeal Panel on this appeal are: 1. the Decision; 2. the supplier's Notice of Appeal dated 24 November 2020, attaching the supplier's submissions before the Tribunal dated 17 July 2020 which in turn attached: 1. the Roudeheni Report; 2. an email exchange between the supplier and the consumer on 14 and 15 July 2020; 3. a quote by the supplier addressed to the consumer for repairs to the caravan, totalling $8,428.26; 1. the supplier's Application for a Stay dated 24 November 2020 and submissions of that date in support of that application; 2. directions made by the Appeal Panel on 8 December 2020 for the preparation of the appeal; 3. the supplier's submissions in support of the appeal dated 7 January 2021; 4. the consumer's Reply to Appeal dated 27 January 2021, attaching: 1. the consumer's submissions dated 27 January 2021 in response to the supplier's submissions dated 7 January 2021, with the following attachments: 1. an invoice from Noble Auto Repairs Pty Ltd to the consumer dated 20 November 2019; 2. an undated letter from Mr Daniel Hanson of Hanson Caravans; 3. a tax invoice from A'van Adelaide addressed to the consumer and dated 11 November 2019; 4. a document titled "Report to Cleanairflow Solutions Pty Ltd (trading as Carlight) regarding the Euro Caravan sold to me (Trevor Edmonds) on June 2019", dated 10 January 2020 ("10 January 2020 Report"); 5. submissions of the consumer titled "Submission by Respondent in response to the Roudeheni Report" dated 27 November 2021; and 1. the supplier's reply to the consumer's submissions, dated 10 February 2021.
The directions made by the Appeal Panel on 8 December 2020 included a direction that any party who wished to rely upon what happened at the hearing was to lodge with the Appeal Panel and to give to the other the sound recording, or transcript, of the hearing before the Tribunal. The supplier was directed to do so by 15 January 2021, and the consumer by 4 February 2021.
Despite these directions, and the obligation upon parties to comply with them (see Al Bisher v Sabbagh [2021] NSWCATAP 100 at [17] - [19]), neither party lodged with the Appeal Panel a sound recording or a transcript. As a consequence, we do not have before us a record of what happened at the hearing. In these circumstances, the supplier faces significant difficulties in establishing that there was no evidence for a particular conclusion, or that a particular conclusion was against the weight of evidence. We discuss this further below.

Cleanairflow Solutions Pty Ltd v Edmonds

At a glance

Court

Decision date

Source

Judgment (12 paragraphs)

Parties

Cases Cited (6)