Deepwater Production Pty Ltd v SMG Holdings Pty Ltd t/as Worthington BMW & Anor

1. This is an internal appeal under s 80 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act). These appeal proceedings arise out of a decision of the Consumer and Commercial Division of the Tribunal dated 12 February 2025 in which the appellant's case was dismissed after a hearing.
2. The appellant purchased a new BMW vehicle from the first respondent in April 2022 for $101,961, including trade in and discounts. The BMW was supplied by the second respondent, a wholly owned subsidiary of the German manufacturer. The BMW developed water leaking issues through the sunroof and in August 2024, the appellant (then the applicant) commenced proceedings seeking a refund for the car and compensation for other losses incurred.
3. The appellant alleged the vehicle was not of acceptable quality due to a persistent leak in the sunroof, in breach of s 54 of the Australian Consumer Law (ACL). The appellant further claimed that the breach was a major failure within the meaning of s 260 of the ACL, thereby entitling him to a refund. The first respondent opposed the claim, contending that the problems with the BMW could be repaired.
4. The Tribunal dismissed the appellant's claim. The appellant appealed to the Appeal Panel from that decision on the grounds that there was a substantial miscarriage of justice because the decision was not fair and equitable, it was against the weight of evidence and significant new evidence has arisen that was not reasonably available at the time of the hearing. The appellant needs leave to appeal on these grounds. The appellant further claimed that the decision was unfair because there had been a denial of procedural fairness and the Tribunal had failed to consider all claims made and evidence provided by the appellant.
5. After reviewing the written reasons and considering the material and oral submissions from the parties at the hearing, the Appeal Panel identified obvious errors which raise questions of law. These errors became apparent during the hearing of the appeal.
6. The appellant did not specifically challenge the adequacy of the written reasons in its Notice of Appeal, but the claims made about procedural fairness and the failure of the Tribunal to record the basis for its findings or to sufficiently particularise the parties' contentions and its reasoning process led us to the conclusion that the reasons were inadequate.
7. In summary, the written reasons were materially inadequate to the extent that the Appeal Panel was not satisfied the Tribunal had properly engaged with the evidence and arguments or that it had properly considered and determined significant relevant claims made by the appellant in the proceedings. As such, we find that the Tribunal at first instance erred by failing to exercise its jurisdiction to consider and determine material relevant claims.
8. We have set aside the decision, and the proceedings are remitted to the Consumer and Commercial Division for reconsideration according to law.
9. At the appeal proceedings, the appellant was represented by its director, Mr D Gleeson, the first respondent was represented by Mr B Worthington, director and the second respondent was represented by Mr T Hall, Company Secretary of the second respondent.

The proceedings at first instance and the decision of the Tribunal

1. The appellant purchased the BMW vehicle in April 2022 from the first respondent. The first respondent is a motor dealer. The appellant and the first respondent had previous dealings through the earlier purchase of another BMW vehicle which was subsequently sold.
2. The appellant reported water leaks in the BMW by about July 2023. The first respondent worked on the vehicle to resolve those issues and the appellant, unsatisfied with the result, commenced proceedings in the Tribunal under the ACL in August 2024.
3. There were attempts to resolve the dispute by conciliation. These attempts were unsuccessful.
4. The appellant alleged that the respondents had failed to comply with consumer guarantees in s 54 of the ACL, which provides that goods supplied to a consumer must be of "acceptable quality", which for the purposes of the ACL, means fit for all the purposes for which the goods of that kind are commonly supplied, acceptable in appearance and finish, free from defects and safe and durable. If goods are not of acceptable quality, the ACL provides certain statutory remedies to consumers. A consumer may be able to obtain a refund where the failure to comply with the guarantee is a "major failure" under s 260 of the ACL. The issues in dispute between the parties in the proceedings at first instance were, first, whether the respondents, or either of them, had breached s 54 and secondly, if so, whether this was a "major failure" entitling the appellant to a refund.
5. The reasons for decision are nine pages in length, comprising 46 numbered paragraphs. The decision sets out the details of the parties, the application and the procedural directions, the background, the grounds for jurisdiction and a summary of the relevant law that applies to the claim. The applicable legislation, legal authorities and the relevant legal principles governing consumer guarantees under the ACL and the remedies for breach of those guarantees are well explained at [26] to [35]. This comprised more than half the decision. There is no complaint about this aspect of the decision as the legislation and authorities cited and the legal principles summarised are correct.

(1) The appellant purchased the BMW from the first respondent for $64,888.14 (excluding the trade-in) and took delivery of the vehicle on 6 April 2022 [6]

(2) In or about June 2023, the appellant observed leaking form the sunroof in heavy rain and contacted the first respondent to schedule a repair [7].

(3) The appellant observed further leaking from the sunroof on or about 15 February 2024 but the first respondent was unable to replicate the leak under test conditions [9].

(4) Further leaks were observed until June 2024 at which time faults were found with the windscreen and sunroof, which were subsequently repaired [10].

(5) The appellant made contact with the second respondent in August 2024 which advised that as the first respondent had not been able to replicate the leak under test conditions, the matter was closed. The appellant commenced proceedings [11]-[13].

(6) The BMW was left outside during September 2024 when the director of the appellant was overseas and on his rerun water and mould was found in the vehicle [14].

1. The Tribunal directed that the vehicle be made available to the second respondent for inspection and stated, at [15]:

Whilst the reported results of that inspection were not made available to the Tribunal, during the hearing Mr Worthington, appearing for Worthington, conceded that that inspection had confirmed that the sunroof was still leaking and that in response, further repairs were then carried out.

1. There was no dispute that after the repairs were carried out, the appellant refused to collect the vehicle, which remained the case on the date of the hearing [16].
2. Following findings about jurisdiction, the Tribunal summarised the evidence as follows:

23 The applicant's evidence covered the facts already recounted above, as well as including information from published articles relating to common complaints with the same model vehicle as the applicant's. Whilst the rules of evidence do not apply in the Tribunal, I have given the evidence of complaints made by others little weight as I consider them to be hearsay. Even if I were to afford that evidence greater weight, I do not see the relevance of that evidence as it is not evidence of fault in the applicant's vehicle, and if it is evidence of anything at all, it is evidence of fault with other people's vehicles.

24 At the hearing, Worthington gave oral evidence that upon delivery of the vehicle to the workshop in December 2024, independent testing indicated that the sunroof of the vehicle leaked, and that subsequent repairs were then completed.

25 The applicant then refused to collect the vehicle following completion of those repairs.

1. After outlining the relevant law and authorities, the Tribunal set out its findings and conclusions in relation to the claim as follows:

36 It is certainly fair to say that the applicant's vehicle has had a teething problem. From the evidence led by both parties it is evident that the particular teething problem is that the vehicle's sunroof leaks.

37 The applicant has not provided evidence establishing that the repairs now done to the vehicle have been inadequate, or to support the applicant's subjective assertions that the problems will continue to occur. Based upon the evidence of Worthington, I consider it entirely possible that Worthington's most recent attempt to rectify the defect by the repairs and adjustments made following the independent identification of particular issues with the sunroof of the vehicle might have been successful.

38 It necessarily follows that it is impossible for me to find, on the balance of probabilities, that the teething problems within the vehicle complained of have not been now addressed by the respondents.

39 At the hearing, the applicant also submitted that the vehicle was unsafe due to the presence of mould within the vehicle and relied upon the independent report of Mouldsafe dated 8 October 2025 in support of that submission.

40 Even if that evidence is capable of establishing, on the balance of probabilities, that the vehicle is unsafe, it does not establish that the mould growth has been caused by the breaches complained of. It is for the applicant to prove that the respondent's breach was the real and effective cause of the mould. If an intervening event, such as the applicant's negligence is the primary cause, the claim will fail.

41 What the evidence before the Tribunal does show, is that following the applicant's application to the Tribunal, the applicant travelled overseas and elected to leave the vehicle outdoors where it would be exposed to any prevailing rainfall for some four weeks.

42 Given that the basis of the applicant's application was that the leak from the sunroof was not able to be repaired, it is difficult to understand the applicant's choice to leave the vehicle exposed to prevailing whether in that way,

43 The claimant did not take any reasonable steps to reduce or avoid the very real possibility that water would enter the vehicle whilst left locked and unattended for four weeks. If steps were taken by the applicant to protect the vehicle from weather, for example by garaging it or wrapping it under a waterproof car cover, is most unlikely that mould could have taken hold inside the vehicle in the way that it has.

1. The application was dismissed and there was no order made in relation to costs, notably none of the parties were legally represented.

1. The following materials were provided by the appellant to the Appeal Panel.

1. The Notice of Appeal, with attached particulars, was filed on 12 March 2025, within the required time under the Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules), being within 28 days of the day on which the appellant was given written reasons for or notified of the Tribunal's decision, whichever is the later in time. (r 25(4)(c) of the NCAT Rules).
2. The appellant requests leave to the appeal on the basis that the appellant may have suffered a substantial miscarriage of justice because:

(1) The decision was not fair and equitable; and

(2) The decision was against the weight of evidence; and

(3) Significant new evidence had arisen that was not reasonably available at the time of the Tribunal hearing.

1. The Grounds of Appeal, which were attached to the Notice, are summarised below.

1. The appellant filed documents on 29 April 2025 and 4 June 2025. Those documents included:

(1) Documents provided to the Tribunal at first instance.

(2) A copy of the Mould Safe Report.

(3) Submissions, including submissions in reply to the respondents' submissions.

(4) Evidence which was not before the Tribunal at first instance, being documents and a USB containing video footage.

1. The first respondent filed the following documents:

(1) Submissions in reply to the appeal, including a copy of an email dated 20 March 2025 with submissions and the documents referred to in the submissions.

(2) Reply to Appeal dated 2 April 2025, together with submissions (which was a duplicate of (1)).

(3) Submissions in response to the appeal.

(4) Documents said to have been provided to the Tribunal.

(5) Photographs that were not before the Tribunal at first instance.

1. The submissions included a chronology and assertions of fact about contentious matters. For instance, the submissions Included statements about the work undertaken by the first respondent in response to the appellant's complaints, evidence relating to the escalation of the matter to the second respondent and references to the results of an independent report obtained by the second respondent, which was not provided to the appellant and was not before the Tribunal at first instance.
2. The first respondent did not seek leave to rely on the new evidence and, as such, we did not have regard to the photographs filed.

1. The second respondent filed a Reply to Appeal on 4 April 2025 and submissions in response to the appeal on 16 May 2025. No further documents were filed by the second respondent.

1. It was apparent during the hearing of the appeal that the appellant and first respondent were proceeding under the misapprehension that the purpose and scope of the appeal was for the parties to relitigate the issues in dispute. Both provided evidence that was not before the Tribunal at first instance and included in their submissions assertions of fact about matters relevant to the original dispute.
2. The appellant seeks leave to rely on new evidence which is said to be in reply to submissions made by the first respondent. The appellant contends that the new evidence is relevant to challenge the credibility of oral evidence of the witnesses of the first respondent at the Tribunal hearing. The appellant further contends that the first respondent's written evidence before the Tribunal did not include any statement or report by the first respondent's witness and therefore the appellant could not reasonably have known that evidence in relation to the witnesses' statements would be required.
3. As the Appeal Panel stated in Chapman v McLaughin [2016] NSWCATAP 212 at [37]:

... The point of limiting fresh evidence to that which was not reasonably available at the first hearing is to ensure finality of proceedings. This means that it is in the interests of justice for parties to put forward all their evidence as best they can at the hearing, as otherwise, if they were free to add fresh evidence after a case was decided, the proceedings would run the risk of not being finalised until after many hearings. This principle is of particular importance in the Tribunal because of the provisions of s 36 of the Act. That section requires the Tribunal to proceed to decide cases justly, quickly and cheaply.

1. The test of whether evidence was reasonably available at the time is an objective test, that is, whether the evidence was unavailable because no person could have reasonably obtained it (Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111 at [23]; Bele-Verdy v The North Coast Community Housing Company Ltd [2025] NSWCATAP 13 at [52]- [54]).
2. The scope and purpose of an internal appeal is not to relitigate the issues that were before the Tribunal at first instance. We therefore refused leave to the appellant to rely on this new evidence.

1. The basis upon which appeals from decisions of the Tribunal may be brought are identified in s 80 of the NCAT Act, which 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' (s 80(2)(b) of the NCAT Act).

1. The meaning of a "question of law" was discussed in detail by the Appeal Panel in Unique Commercial Group Pty Ltd v Cusumano [2024] NSWCATAP 204 (Cusumano) at [25]-[40]. A pure question of law does not depend on the facts found and the question of law must be, self-evidently, a question of law and not depend on the answer. A question of law is distinct from a mixed question of fact and law, for which leave to appeal is required. Examples of questions of law include the matters set out in Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [13] and _Cusumano a_t [32]. However, the categories of question of law are not closed.
2. Where the ground of appeal does not raise a question of law, the appellant may seek leave to appeal.

1. Where there is an appeal from a decision of the Consumer and Commercial Division, the circumstances in which Appeal Panel may grant leave to appeal are limited to those set out in cl 12(1) of Sch 4 to the NCAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that:

(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).

1. The Appeal Panel considered the meaning of a substantial "miscarriage of justice" for the purposes of cl 12 of Sch 4 to the NCAT Act in Collins v Urban [2014] NSWCATAP 17 at [76], stating that a substantial miscarriage of justice may have been suffered 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 owners corporation 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.

1. The principles to be applied by an Appeal Panel in determining whether leave to appeal should be granted are well settled. In Collins v Urban the Appeal Panel concluded at [84] that:

(1) In order to be granted leave to appeal, the applicant 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: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [19] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45];

(2) Ordinarily it is appropriate to grant leave to appeal, only in matters that involve:

(a) Issues of principle; or

(b) questions of public importance or matters of administration or policy which might have general application; or

(c) 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; or

(d) a factual error that was unreasonably arrived at and clearly mistaken; or

(e) 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.

1. An appeal is not an opportunity for the losing party to rerun the party's case (Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10]).
2. Accordingly, in an appeal from a decision of the Consumer and Commercial Division, the appellant must satisfy the requirements of cl 12(1) of Sch 4 and, if so satisfied, the Appeal Panel must also then consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b).

1. The appellant's grounds of appeal are set out in its Notice of Appeal and can be summarised as follows:

(1) The decision was unfair because the appellant was not afforded the opportunity to present a 65 page document detailing the correspondence, emails, defect history, failed repairs and independent report and warranty issues over 22 months. The hearing was scheduled for three hours but was concluded within one hour, severely limiting the appellant in presenting its case.

(2) The Tribunal relied on the first respondent's oral evidence of an independent inspection report that was not provided to the Tribunal or to the appellant, preventing the appellant from challenging its findings. This was a failure to provide procedural fairness which materially impacted the outcome of the decision.

(3) The Tribunal accepted that the sunroof of the BMW was leaking, which is in breach of s 54 of the ACL because goods supplied must be free from defects and durable. However, the Tribunal failed to consider the full history of failed repairs as evidence that there was a major failure within the meaning of s 260 of the ACL. The Tribunal focused only on the final repair attempt in December 2024 rather than the cumulative history of defects and failed repairs. The Tribunal overlooked the inconvenience, loss of use and financial burden on the appellant as part of the claim.

1. The appellant seeks orders that the original decision of the Tribunal be set aside due to procedural unfairness and errors in legal reasoning and that there be a full rehearing of the matter to allow proper consideration of all of the evidence, including any documents that were not provided to him that are relevant to the dispute. This includes an independent inspection report obtained by the second respondent and referred to in the reasons (at [15]).

1. The first respondent agrees with the decision of the Tribunal and opposes any application for leave to appeal.
2. The first respondent contends that the BMW has been repaired and has been available to be collected by the appellant since December 2024. The first respondent submits that the appellant raised similar issues with a previous vehicle purchased in 2021, which were resolved and sold to another purchaser with no issues. The leak was not reported to the first respondent until July 2023. When the leak was tested, it was confirmed that there was water ingress to the rear section of the sunroof. This was subsequently repaired after an independent inspection commissioned by the second respondent.
3. The first respondent submits that the appeal should be dismissed.

1. The second respondent supports the orders made by the Tribunal on 12 February 2025.
2. It is contended that the appellant needs leave to appeal because the notice of appeal does not raise a question of law and, insofar as the appellant needs leave, the grounds do not meet the threshold for such consideration. It is submitted that the decision made by the Tribunal at first instance was fair and equitable and the appellant was afforded all reasonable opportunity to put it case. The decision was not made against the weight of evidence as the Tribunal considered all materials provided by the parties and determined that the appellant had provided no evidence that the vehicle was defective. Furthermore, the grounds do not raise general issues of public policy or public interest that needs to be considered by the Appeal Panel.
3. It is submitted that the Tribunal provided comprehensive reasons to support its decision, complying with s 62 of the NCAT Act. The reasons accurately reflected the relevant legal principles and demonstrate that the Tribunal considered those principles having regard to the evidence. The Tribunal found that the evidence submitted by the appellant did not establish that the vehicle in question had failed to comply with the consumer guarantee of acceptable quality or that the appellant was entitled to a refund under s 260 of the ACL. The reasons expressly refer to the materials tendered as evidence in the proceedings at paragraph [14] and the reasons demonstrate that the Tribunal had regard to the evidence and considered the evidence as part of its determination, for example at paragraph [23].
4. The Tribunal did not rely on the inspection report that was commissioned by it as the report was not provided. Rather the Tribunal relied on the oral evidence from Mr Worthington as to the condition of the vehicle. The Tribunal referred to this evidence in its reasons at paragraph [15].
5. The second respondent accepts that the results of the inspection report were not made available to the appellant or to the Tribunal but submits that the appellant was not entitled to the report. The report was not tended nor was it relied on by the Tribunal in its reasons in any event. It is further submitted that the appellant was not prejudiced by this and the appellant had ample opportunity to file its own expert evidence in support of the case. The appellant filed a report from Mould Safe about the presence of mould but did not provide any report relating to the mechanical state of the vehicle itself. There has been no denial of procedural fairness and this ground must fail.

1. In Unique, the Appeal Panel observed that what constitutes a question of law "is vexed and context dependent in the sense that the distinction between matters of fact and of law may turn on the circumstances in which the question arises" (Unique at [37]). It was also noted that, when dealing with self-represented parties, the Appeal Panel may consider for itself whether a question of law is raised. As such, if the material and submissions raise a question of law in substance, a more generous approach is warranted as an aspect of ensuring procedural fairness, even though the ground has not been raised expressly or with precision: Unique at [27]-[28]. This was also the approach taken by the Appeal Panel in Cominos v Di Rico [2016] NSWCATAP 5, where the Appeal Panel stated at [13] that it was,

..appropriate for the Appeal Panel to review an appellant's stated grounds of appeal, the material provided, and the decision of the Tribunal at first instance to examine whether it is possible to discern grounds that may either raise a question of law or a basis for leave to appeal.

1. In this case, the appellant raises two issues in its Grounds of Appeal, which on their face, raise questions of law, namely, the denial of procedural fairness and the failure to consider all evidence and claims made by the appellant. The appellant does not need leave to appeal on these grounds.
2. In considering the Grounds of Appeal, we have closely examined the reasons of the Tribunal to ascertain whether the appellant's complaints are established. As already noted, the written reasons are unhelpfully brief on critical aspects. In our view, the reasons do not meet the requirements of s 62 of the NCAT Act. The question is whether these deficits are material and whether the reasons, such as they are, disclose more fundamental errors on questions of law.

1. When the Tribunal makes a decision and produces a written statement of reasons, those reasons must comply with s 62(3) of the NCAT Act, which states:

(3) A written statement of reasons for the purposes of this section must set out the following--

(a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based,

(b) the Tribunal's understanding of the applicable law,

(c) the reasoning processes that lead the Tribunal to the conclusions it made.

1. The Appeal Panel discussed the importance of written reasons in Khan v Kang [2014] NSWCATAP 48 at [40]- [44], where it stated that the Tribunal was obliged to give adequate written reasons. Section 62(3) provided a "useful summary of what oral reasons or a written statement of reasons are to contain": at [40]. And further at [41],

41. The reasoning processes referred to in s 62(3)(c) include the reasoning by which the law was applied to the facts as found to reach all intermediate and ultimate conclusions. It is important to bear in mind, however, that these reasoning processes also encompass the reasoning which led the Tribunal to reach its factual conclusions: why certain evidence was accepted and other evidence rejected; why a factual conclusion was reached; and similar matters.

1. However, the Appeal Panel also observed at [42] that s 62 was not the sole source of the obligation and there is a common law duty to give reasons. Relevantly,

[43] There are two bases identified in the authorities for the imposition of this duty. First, it facilitates a litigant who may be aggrieved, exercising rights he or she may have to appeal and thus ensures that any appeal right is not rendered nugatory or illusive - Pettitt v Dunkley [1971] 1 NSW LR 376 at [387].

[44] Secondly, reasons are required since a failure to provide sufficient reasons promotes "a sense of grievance" and denies "both the fact and the appearance of justice having been done", thus working a miscarriage of justice...

[citations omitted]

1. This has been further explained by the NSW Court of Appeal stated in NSW Land and Housing Corporation v Orr [2019] NSWCA 231 at [66]:

In the context of appellate review of the adequacy of reasons, the function of an appellate court is to determine not the optimal level of detail required in reasons for a decision but rather the minimum acceptable standard: Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 at [48] (Resource Pacific). The standard is not one of perfection: Bisley Investment Corporation v Australian Broadcasting Tribunal [1982] FCA 58; (1982) 40 ALR 233 at 255 (Bisley).

1. There is an overlap, at a practical level, between the failure to give adequate reasons and consideration of whether a court or Tribunal has failed to take into account material relevant claims as either a constructive failure to exercise jurisdiction or a denial of procedural fairness.
2. The Appeal Panel has discussed the principles of constructive failure to exercise jurisdiction and the related failure to give adequate reasons in Orell v Clas Concrete & Constructions Pty Ltd [2024] NSWCATAP 220 at [49] - [53], citing Alexandria Landfill Pty Ltd v Transport for NSW (2020) 103 NSWLR 479; [2020] NSWCA 165, where Basten JA explained the notion of a "constructive" failure to exercise jurisdiction in the context of reasons that have not been adequately expressed as follows:

6 The premise underlying a 'constructive' failure to exercise jurisdiction is that there has been an apparent exercise of the jurisdiction of the court, but one that has failed in a way which can only be teased out by reference to the underlying issues and the materials presented to the court. It may then be demonstrated that a material issue presented for determination has not been resolved. By contrast, a failure to give adequate reasons implies that the relevant issues have been identified, addressed and resolved, but the reasons for reaching the conclusion have not been adequately expressed.

7 Despite the conceptual difference between the two complaints, they are related in a practical way. Because there is no means of interrogating a judge as to his or her intellectual processes, evidence that issues were not addressed can usually only be demonstrated by reference to the reasons. Thus, on the assumption that the judge addressed in the reasons all material matters, the absence of reference to a particular matter may allow the inference that it was not addressed and determined.

1. The link between the elements of a claim, which must be determined in the exercise (or purported exercise) of jurisdiction, and the written reasons, which explain how and why a decision was made, has been also discussed by the Appeal Panel in Hernady v Raccani [2016] NSWCATAP 67 at [52]- [56] as follows:

52. The Appeal Panel considers that a Member called upon to determine claims such as the Compensation Claims, the Rectification Claim and the Cleaning Claim would generally be required to do the following in order to exercise the jurisdiction of the Tribunal, assuming that it has been properly invoked:

(1) Identify each relevant claim for relief and the statutory provision or common law principle supporting the claim;

(2) Identify each of the relevant elements of the causes of action which must be satisfied in order to justify granting the relief sought;

(3) Make material findings of fact and law in respect of each of those elements;

(4) Explain what relief, if any, should be granted and why.

53. It may be the case that the fact that these steps have been taken can be seen to be implicit in the reasons and orders made and this will be sufficient. The reasons for decision and orders of the Tribunal below concerning the amount of the reduction in rent in respect of the Rent Reduction Claim in the present case are an example of where the findings, reasoning and wording of the orders, reflecting the wording of s 44 of the RT Act, are sufficient to establish that the jurisdiction of the Tribunal has been exercised in that regard.

54. It is always preferable, however, unless circumstances do not permit, for the steps outlined above to be explicitly addressed in the reasons for decision or the orders made. As we have made clear above, in doing so the reasons do not always have to be lengthy or detailed, especially if that would be neither necessary nor proportionate. Nonetheless, the orders and reasons must make it clear that the jurisdiction of the Tribunal, where it has been properly invoked, has been exercised.

55. In the present case, the Compensation Claims, the Rectification Claim and the Cleaning Claim were not identified by the Tribunal as claims for relief in the proceedings, the statutory bases for the claims were not referred to even though they had been explicitly identified in the Hernadys' Amended Claims, no findings of fact or law were made in respect of the claims and no orders, whether upholding or dismissing the claims, were made.

56. In these circumstances, the Appeal Panel can only conclude that the Tribunal below failed to address and determine the issues necessary to deal with each of the Compensation Claims, the Rectification Claim and the Cleaning Claim, to the extent that each of those claims was properly before the Tribunal at first instance. To this extent, the Tribunal failed to exercise the jurisdiction of the Tribunal under the RT Act which had been properly invoked by the Hernadys.

1. In our view, the problems identified by the Appeal Panel in Hernadys are not dissimilar to the issues raised in this appeal.

1. The claim which is the subject of the dispute is a consumer claim alleging breach pursuant to s 54 of the ACL. Section 54 of the ACL relevantly states:

54 Guarantee as to acceptable quality

(1) If:

(a) a person supplies, in trade or commerce, goods to a consumer; and

(b) the supply does not occur by way of sale by auction;

there is a guarantee that the goods are of acceptable quality.

(2) Goods are of acceptable quality if they are as:

(a) fit for all the purposes for which goods of that kind are commonly supplied; and

(b) acceptable in appearance and finish; and

(c) free from defects; and

(d) safe; and

(e) durable;

as a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods), would regard as acceptable having regard to the matters in subsection (3).

(3) The matters for the purposes of subsection (2) are:

(a) the nature of the goods; and

(b) the price of the goods (if relevant); and

(c) any statements made about the goods on any packaging or label on the goods; and

(d) any representation made about the goods by the supplier or manufacturer of the goods; and

(e) any other relevant circumstances relating to the supply of the goods.

1. The Appeal Panel has addressed the application of s 54 of the ACL in Frediani v Hall t/as Happy Camper Conversions [2024] NSWCATAP 134 (Frediani) at [18], where the Appeal Panel stated:

[18] The matters in s 54(3) are "mandatory considerations" to establish whether or not goods are not of acceptable quality under s 54(2)(a)-(e) such that a reasonable consumer, fully acquainted with the state and condition of the goods, would regard the goods as being of acceptable quality, determined at the date of the supply of the goods (Ford Motor Company of Australia Pty Ltd v Capic [2023] FCAFC 179 (Capic-Appeal) at [43] and [56]).

1. In this case, the Tribunal identifies at [36] that there has been a defect, or 'teething problem", with the vehicle. That teething problem is identified as the "vehicle's sunroof leaks".
2. The Tribunal then addresses whether there is a defect with the vehicle, relying on Mr Worthington's oral evidence referred to in paragraphs [15] and [24], concluding at [37] that "[b]ased on the evidence of Worthington, I consider it entirely possible that Worthington's most recent attempt to rectify the defect and the adjustments made following the independent identification of particular issues with the sunroof of the vehicle might have been successful".
3. The Tribunal therefore makes the finding that the BMW may no longer be defective because the rectification work "might have been successful". The evidence relied on is the oral evidence of Mr Worthington which refers to the "independent identification of particular issues with the sunroof". This appears to be a reference to Mr Worthington's evidence about the inspection report obtained by the second respondent. The Tribunal relies on this evidence of Mr Worthington to support the finding because at [37] the applicant had "not provided evidence that the repairs now done to the vehicle had been inadequate, or to support the applicant's subjective assertions that the problems will occur". The Tribunal then went on to find at [38]:

It necessarily follows that it is impossible for me to find, on the balance of probabilities, that the teething problems within the vehicle complained of have not been now addressed by the respondents.

(1) The findings at [15] and [24] are to the effect that the sunroof was leaking and further repairs were carried out however, these findings do not demonstrate that the Tribunal has engaged with the question of whether there was a breach of s 54 and, relevantly, whether any or all of the elements of s 54(2), having regard to s 54(3), have been established.

(2) The Tribunal makes further findings about the water leak at [14] and [41]−[43]. The Tribunal accepts there was a water leaking problem that was not resolved by September 2024, and it is inferred that the appellant caused damage by electing to leave the BMW ungaraged while he was overseas. Leaving a motor vehicle ungaraged for four weeks does not seem unreasonable. However, this is not the critical issue. The essential problem is that it is unclear how these findings impact the appellant's claim that the first respondent failed to comply with s 54 of the ACL.

(3) The Tribunal found, and we accept, that the applicant bears the onus to establish its case. The determinative question was whether the BMW was of acceptable quality. The existence of a persistent water leak over an extended period was described by the Tribunal as a "teething problem" at [36] but what the Tribunal does not explain is how it came to this conclusion. Nor does the Tribunal explain the basis for its finding at [37] that it was "entirely possible" that the first respondent's recent attempt to rectify the defect by repairs and adjustments "might have been successful", why this was relevant to the question of whether there was a breach of s 54 and the basis for its findings at [38] that it was "impossible" to find that the "teething problems" had not been addressed.

(4) At best, the evidence before the Tribunal was that repairs had been undertaken to the BMW in line with an independent report, the details of which were not known to the Tribunal or the appellant. It may have been open to the Tribunal to infer the repairs were successful, but it is not correct to say that it was "impossible" to find otherwise. As such, the decision did not reveal the reasoning or weighing process. Ultimately, this issue exposes further issues about the adequacy of the reasons.

1. We have therefore identified what appear to be errors and inconsistencies in the decision. In our view, the reasons are inadequate, and they do not meet the minimum standard required to identify how and why the Tribunal dismissed the appellant's claim. It follows that we do not accept the submissions of the second respondent that the Tribunal's reasons were comprehensive or that they complied with s 62 of the NCAT Act.
2. In summary, we are unable to discern from the decision the reasoning process that led to the Tribunal to conclude those matters set out in [37] and [38] and finally at [45] and [46].
3. The fundamental problem with the decision is that while the Tribunal correctly identifies the question for determination as being, "Whether the Vehicle is of Acceptable Quality" and sets out the relevant legislation and authorities, it does not engage with the elements of ss 54(2) or (3) of the ACL or with the principles outlined by the Tribunal in paragraph [32], referring to Crooks v Hyundai Motor Company Australia Pty Ltd [2023] NSCATCD 29 at [63]. The only reference made by the Tribunal is at [35] - [37] in which the Tribunal describes the issues raised by the appellant as "teething problems".
4. At paragraph [43], the Tribunal states:

43. The claimant did not take any reasonable steps to reduce or avoid the very real possibility that water would enter the vehicle whilst left locked and unattended for four weeks. If steps were taken by the applicant to protect the vehicle from weather, for example by garaging it or wrapping it under a waterproof car cover, is [sic] most unlikely that mould could have taken hold inside the vehicle in the way that it has.

1. It is on this basis of lack of mitigation, that the Tribunal finds the vehicle is not unsafe at [44].
2. Other than at [44], the Tribunal does not actively engage with ss 54(2)(a)−(e) or with ss 54(3) (a)-(d) of the ACL in the reasons. The Tribunal refers to evidence that the sunroof was leaking at [9]-[10] and [14]-[15] and makes findings about this at [24] and [42] yet makes no finding about whether or not the BMW was "free from defects" as required under s 54(2)(c), "fit for all purposes" under s 54(2(a) or "durable" under s 54(e).
3. The Tribunal has not recorded material findings of fact in respect of each of the matters in s 54(3) of the ACL, or the basis for those individual findings. In Frediani at [18], as referred to above, the Appeal Panel noted that each of the elements of s 54(3) are "mandatory considerations" to establish whether or not goods are not of acceptable quality under s 54(2)(a)-(e) such that a reasonable consumer, fully acquainted with the state and condition of the goods, would regard the goods as being of acceptable quality, determined at the date of the supply of the goods (Ford Motor Company of Australia Pty Ltd v Capic [2023] FCAFC 179 (Capic-Appeal) at [43] and [56]).
4. The Tribunal makes findings at [45] and [46] that there is no breach of s 54 but does not explain why, other than that the appellant's "subjective dissatisfaction" with the BMW was not sufficient to establish breach "when considered in the context of all the evidence". The Tribunal did not actively engage with or outline all the relevant evidence and these findings, on their face, are inconsistent with other accepted evidence referred to elsewhere in the Tribunal's decision.
5. The Tribunal purports to resolve the disputed question about whether there was a breach of s 54 of the ACL but, in our view, has not done so. The Tribunal fails to make the material findings in relation to the mandatory considerations of section 54(3) and fails to make the relevant findings in respect of s 54(2). It therefore follows that the Tribunal has not resolved the determinative question, namely, whether there has been a breach of s 54 of the ACL.
6. We accordingly find that the Tribunal has constructively failed to exercise its jurisdiction, and this is an error on a question of law.

1. The Appeal Panel has determined, for the reasons above, that the appeal should be allowed.
2. We make the following orders:

(1) Appeal allowed.

(2) The decision is set aside, and the proceedings are remitted to the Consumer and Commercial Division for reconsideration according to law, with such further or other evidence as the Tribunal grants leave to admit.

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.