The decision at first instance
10The Tribunal at first instance based its decision on the findings of an independent expert relied upon by the Purchaser. This was a report by Mr Colevski of IVIC based upon an inspection and testing of the vehicle carried out on 7 May 2014.
11Prominent amongst the defects identified in that report was extensive rust in the structure of the vehicle in both the left and right hand chassis rails. Important opinions in the report were:
there is evidence to conclusively determine this vehicle was sold with all rust and damage,
the rust and damage has: c) Compromised the safe integrity of this vehicle. d) Diminished the value of this vehicle,
This vehicle would be uneconomical to repair and should be considered a 'right off',
The owner is advised to refer the vehicle with this report to the Licensed Dealer for a refund, or, seek legal advice to recover diminished value including all subsequently incurred expenses, and
This vehicle MUST NOT be driven until all the defects have been rectified....
12No expert opinion material was adduced by the Sellers at first instance to contradict or undermine these opinions.
13The Tribunal at first instance also said:
The Respondents did not file any evidence in accordance with the previous orders of the Tribunal. They handed some documents to me today, without objection by the Applicant. These included a "car history" which itself included a PPSR certificate (as did the applicant's vehicle history report obtained from the RMS Department). This document does not provide any useful information, and specifically no information to counter the IVIC report.
14At first instance, the Sellers argued that the rust and damage must have occurred after the sale, including suggesting that the vehicle had been stolen and left in a river. The Tribunal found that there was no evidence to support this suggestion.
15The Sellers relied upon the fact that no reference to rust was made in a report prepared by JC Diesel as a result of a service carried out on the vehicle for the Respondent in July 2013, some three weeks after the sale.
16As to this, the Tribunal referred to a note from the JC Diesel mechanic stating that:
.... Reason for not noticing this rust in chassis on first inspection being due to the fact chassis had been painted over and possibly bogged before prior to inspection.
17The Sellers also sought support from in an email the Sellers had received from Mr Colevski subsequent to his expert report. This stated that at the time of his inspection there was no bog or body filler applied to the chassis rails of the vehicle. However, as the Tribunal at first instance pointed out, this email said nothing about the issue of painting over the rust.
18The Tribunal concluded that the submission that there was no rust in the vehicle at the time of sale was categorically contradicted by the IVIC report.
19Whilst the key elements of the Respondent's cause of action were not expressly referred to by the Tribunal at first instance, there was more than sufficient material before the Tribunal from which to conclude that there had been a major failure to comply with a supply guarantee as to quality within the meaning of s 260 of the Australian Consumer Law (NSW) (the ACL). This was so, despite the fact that since the purchase the vehicle had travelled some 25,000 or more kilometres and the Purchaser had used it for some nine months before making his claim in the Tribunal.
20In the case of a major failure, one of two options available to a consumer was to notify rejection of the goods: see s 259(3) of the ACL. In such circumstances, subject to loss of the rejection right, the supplier must either refund any moneys paid and an amount equal to the value of any other consideration provided or replace the rejected goods: s 263(4) of the ACL.
21The appeal proceeded on the basis that this was the cause of action the subject of the consumer claim.
The Grounds of Appeal
22The Sellers put forward four grounds of appeal supported by additional written and oral submissions than those outlined, in the following terms:
- Mr Meadows erred in failing to find that the Respondent's right to reject the vehicle was lost (s262 Australian Consumer Law), and Nesbit v Porter [2000] NZLR 465.
a. The Respondent admitted that he discovered defects/rust after 3 months, but did not apply for a refund for a further 6 months;
- The Decision was unjust/unsound having regard to the evidence presented before the Tribunal
a. The Respondent undertook a body inspection after 3 weeks and no rust was identified;
b. The vehicle had undergone several roadworthy certificates (Pink Slips) whilst in NSW since 2011,
c. The Respondent renewed the registration of the vehicle on 5 August 2013 (which also would have required a roadworthy certificate (Pink Slip);
d. The IVIC Report contained flaws;
e. The Respondent had undertaken servicing on the vehicle on several occasions by several different workshops over a period of time during his ownership in the months after the sale. It would be reasonable to expect that at least one of the 12 defects listed in the IVIC report would have been discovered, yet none were discovered until 8-9 months after the sale;
- The Appellants' did not sell the vehicle to the Respondent
a. The correct seller is Dridel Pty Ltd.
b. Dridel Pty Ltd is the company who sold the vehicle to Mr Burrows and is the ABN listed on the notice of sale and invoice.
c. The Appellants' are the wrong entity being sued;
- Mr Meadows erred in providing a full refund to the Respondent
a. The Respondent received a benefit for 9 months (without any setoff/rent).
b. The vehicle travelled 25,000km by the Respondent.
c. The vehicle was returned with damage that was not present at the time of sale (photos presented in Tribunal).
Ground 1 - The Respondent lost his right to reject the vehicle
23The Sellers contend that the Purchaser lost his statutory right to reject the vehicle under s 259(3)(a) of the ACL because the time had elapsed after purchase within which it was reasonable to expect the relevant failure to become apparent: s 262(1) of the ACL, and the definition of rejection period in s 262(2).
24The Sellers contend that on this point they appeal on a question of law. The question of law is not precisely identified by them. It concerns the New Zealand case of Nesbit v Porter [2000] NZLR 465 which they submit "can be unequivocally applied".
25The Tribunal at first instance was not referred to this case. Indeed, no argument that the right of rejection had been lost was put to the Tribunal.
26The Sellers point out that in Nesbit the Court found that a reasonable time for rejection of the subject vehicle was seven months after purchase, a period that was one month after the next mandatory six-monthly warrant of fitness check. Two passages from that case are also relied upon - one referred to a general rule that the older the goods, the shorter is likely to be a reasonable time for rejection. The other passage said that a relevant factor was whether regular inspections of the goods for defects are customary or required by law.
27We do not discern any question of law that is raised by this ground of appeal. Whilst the New Zealand case was concerned with very similar legislative provisions to those contained in the ACL, no issue of construction of the relevant provisions is raised by the Sellers.
28Clearly, each case will turn on its own facts. At bottom, the issue raised by this ground is a question of fact as to the time in which it could reasonably be expected that the defect would become apparent.
29Plainly, the facts here do not equate to those in the New Zealand case. There are differences in the type, age, use to be made and rusting of the vehicles. Other differences exist as follows:
(1) the mandatory requirement in New Zealand for a six monthly "warrant of fitness" check was of primary significance in the New Zealand decision. No such six monthly mandatory requirement existed for the vehicle in this case;
(2) in the New Zealand decision the Court said (at page 476.15):
It almost goes without saying that the period will be correspondingly longer where the supplier has taken steps which effectively conceal a defect or has withheld relevant information.
30In any event, the argument that the right to reject was lost is a new point which was not raised at first instance.
31The considerations which greatly restrict the circumstances in which an appeal court will entertain points not raised below on appeal are pertinent: Hudson v Arp 1 (NSW) Pty Ltd [2014] NSWCATAP 31, see also: Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 438; Coulton v Holcombe (1986) 162 CLR 1 at 7.
32The considerations favouring finality of litigation are at least as strong, and probably stronger, in the case of the Tribunal given the importance attached to the expeditious and inexpensive disposition of proceedings Civil and Administrative Tribunal Act 2013 (the Act).
33Generally, a new point will not be allowed where the consequence would have to be a new trial because "evidence could have been given which by any possibility could have prevented the point from succeeding": Suttor v Gundowda at 438.3.
34The Sellers submit that all the relevant facts were before the Tribunal at first instance. In particular, they point to the amount of kilometres travelled and the post sale body inspection carried out by JC Diesel. They also say that:
Many other factual matters are implied through evidentiary documents that were submitted such as the Respondent's original application to the Tribunal in February 2013 which was 8 months after the original sale.
35However, one topic that was not addressed in any expert report at first instance was the period in which it would be reasonable to expect the nature and extent of the rusting to become apparent: see definition of rejection period in s 262(2) of the ACL.
36Such evidence could have been given in support of the Purchaser's case and there exists, at the very least, the possibility such evidence would prevent the point from succeeding.
37Accordingly, we reject this ground of appeal, should we be wrong in our conclusion that no question of law is involved.
Ground 2 - The decision was unjust having regard to the evidence presented before the Tribunal
38It is common ground that leave to appeal on this ground was required: s 80(2)(b) of the Act.
39This being an appeal from a decision of the Consumer and Commercial Division, the scope of the appeal right is further restricted by cl 12(1) of Schedule 4 of the Act. By virtue of that provision, the Appeal Panel's discretion to grant leave is only enlivened if the Appeal Panel is satisfied that:
... the appellant may have suffered a substantial miscarriage of justice because:
(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).
40In respect of this ground, the Appellants argued that the decision of the Tribunal was not fair and equitable or was against the weight of the evidence.
41Having regard to evidence presented to the Tribunal, in particular the IVIC report, we have already concluded that there was a more than sufficient basis for the Tribunal's decision: see paragraphs 10 to 20 above.
42One matter that the Sellers do rely upon in respect of this ground of appeal, in their Grounds of Appeal, but not in their supporting written submissions, is the matter of a pink slip associated with the renewal of registration of the vehicle shortly after the sale. We take it that the argument is that the pink slip would be evidence as to the absence of rust at the time of the inspection for the purpose of obtaining the Slip and, hence, the absence of rust at the time of the sale.
43This is not a matter mentioned in the reasons at first instance.
44It is not surprising that it was not referred to. Just what pink slip was obtained, if any, and how is unknown. As to this, the Purchaser gave the uncontradicted account that he was told by the Sellers that they would arrange for a pink slip to be lodged with the RMS after the sale. The Purchaser points out that in these circumstances it is difficult to ascertain when or how the associated inspection was carried out because the vehicle was in the Purchaser's possession.
45For these reasons, leave to appeal on this ground is refused.
46However, apparently, under the cover of this ground of appeal, the Sellers seek to rely on new material in an attempt to establish that significant new damage occurred to the vehicle after the sale.
47The Sellers do not relate this argument specifically to any element of the Purchaser's cause of action or to a defence to that cause of action. What the Sellers now say is that they are prepared to offer to fix the rust in the front chassis rail and radiator support bar and repair the left hand sill panel as an offer of goodwill.
48The new material sought to be relied upon included a mechanical inspection report from Mr Cosmetatos of Auto Inspect Pty Ltd dated 2 August 2014. This report is based on an inspection of the vehicle at the Sellers' premises on 22 July 2014, after it had been collected from the Purchaser. It also included quotes to repair the alleged new damage at a cost of $16,490.96.
49Opinions in the Auto Inspect report included:
Vehicle shows high degree of road usage with clear evidence of impact damage under the vehicle and to structural framework. There is also evidence of water submergence internally. An attempt to repair some of the impact damage is evident as seal panel areas have been cracked open and witness marks on bolts, and side step areas.
Rust activity is likely to have been present at time of sale (but concealed with paint in order to best present the vehicle for sale).
Assuming a pink slip was issued at the time of sale (written evidence to be provided by the dealer), it is our opinion that at the time of sale, the vehicle was likely to have been roadworthy.
50The new material also included two emails from Mr Colevski to the Sellers after the hearing at first instance, on or about 6 August 2014. The first email stated that he was not aware the vehicle had travelled 25,000 kilometres after the sale, and that the damage to support brace and cross-member could have "possibly" been damaged from impact after sale.
51The second email from Mr Colevski was partially obscured by a photo but included:
Almost certain that there was no damage to the [obscured] cross-member.
52It seems unlikely that this obscured reference was to the engine cross-member given that the list of defects in his report included:
Extensive damage to engine cross-member - split.
53The Appellants have not established that this new material was new evidence not reasonably available at the time of the proceedings at first instance, as provided for in cl 12(1)(c) of Schedule 4 of the Act.
54The Appellants submitted, without supporting evidence, that the report from Auto Inspect was not able to be presented at the hearing because the Respondent would not agree to access to the vehicle so that it could be inspected by the Sellers expert. No written requests for access were identified nor was the issue of access raised with the Tribunal before or at the hearing on 9 July 2014.
55At the appeal hearing, Mr Boulos, the solicitor for the Sellers, told the Appeal Panel, on instructions from his clients, that two telephone calls had been made by Mr Drivas to the Purchaser. It is said that the first call had been disconnected. In the second call, it is said that the Purchaser told him to speak to his grandfather. It is said that no communication was made to the grandfather because his contact details were not known.
56The Respondent disputed that he received these calls.
57We have nothing more than assertion about attempts to arrange access and nothing that amounts to a refusal to allow access. In any event, even if these calls were made, having regard to the matters in the last sentence of paragraph 54, they fall short of reasonable attempts by the Sellers to obtain access to the vehicle for the purpose of obtaining their own expert evidence.
58There was no attempt to explain, let alone support with evidence, why the information from Mr Colevski in the two emails from him was not reasonably available at the time of the hearing at first instance, either through enquiries of him before the hearing or in cross-examination of him.
59In any event, we do not regard the new material from Mr Colevski as "significant" new evidence. In the first place, he does not say that the information as to the amount the vehicle had travelled caused him to change his opinion about extensive rusting in the IVIC report. Secondly, his evidence about some of the damage rises no higher than the possibility that it occurred after the sale.
Ground 3 - The wrong party was sued
60It is common ground that leave is required to raise this ground of appeal.
61The Sellers contend that a company of which they are directors (Dridel Pty Ltd) (Dridel) was the owner and seller of the vehicle, not themselves. In support they seek to rely on new evidence on the appeal.
62The reasons at first instance do not refer to this issue. When asked at the hearing of the appeal whether the point had been raised at first instance, the Appeal Panel was told by Mr Boulos, who did not appear at first instance, after taking instructions from the Sellers, that it had been raised orally at the hearing on 9 July 2014 (we were told it was referred to within the first half hour) but that no evidence had been adduced in support of the point. The Purchaser disagreed that the point had been raised at first instance.
63Appeal Member Thode has, since the hearing of the appeal, listened to the recording of the whole of the hearing at first instance. She found that there was no reference to this point. The Appeal Panel then wrote to the parties drawing this to their attention and inviting some further submissions.
64By letter from the Sellers' solicitor dated 28 October 2014, the Appeal Panel were informed that the Sellers withdrew their contention that the point was argued at the hearing at first instance, although it is said that Mr Drivas recalls that the entity, Dridel, was raised at some stage in the proceedings - he says it may have been at the conciliation or a directions hearing. If this was raised at some earlier stage in the proceedings, it seems strange that the point was not raised at the hearing at first instance. In these circumstances, and on the basis of this vague assertion, we are not prepared to find that the point was raised at any stage of the first instance proceedings.
65In the letter of 28 October 2014 from the Sellers' solicitor, the following arguments were made as to why the point, nevertheless, should be the subject of leave to appeal:
The Applicant seeks to have this matter raised on appeal based on the following:
A. It was at the initiative of the Tribunal to vary the entity details, based on a search of "City Cars". There is no evidence that the Tribunal explained to the Applicant the importance and/or consequences of this variation, nor is there any evidence that the Tribunal recommended to the Applicant to seek legal advice of this important variation. This issue becomes all the more important when considering whether the Tribunal went beyond its power's in initiating to vary the entity details on its own accord, without any application made by the Respondent in this regard.
B. The Applicant was unrepresented at the original hearing (including all directions) and is not an experienced litigant. This Appeal Panel should consider this important situation in determining whether to exercise its discretion.
C. The Applicant seeks the same flexibility of procedure's that the original Tribunal afforded the Respondent in initiating to vary the entity details on its own accord.
D. The Respondent continually refer's (sic) to the Applicant as Dridel Pty Ltd in its Reply to Appeal document titled "Background Summary". For example, at page 3 of 12, the Respondent admits that Fair Trading "advised that City Cars (Dridel Pty Ltd) declined" the refund request.
E. It would be in the interests of natural justice that a significant error at first instance is rectified on Appeal, considering the Tribunal's original involvement in the variation.
66The background to the joinder of the Sellers as Respondents at first instance is pertinent.
67The Application Form lodged by the Purchaser on 30 March 2014, by which these proceedings were commenced, named "CITY CARS" as the Respondent. The following day, NSW Fair Trading, at the request of J Higgins on behalf of NCAT, conducted a business and company name search of "CITY CARS". No record of a company by this name was found but a business name extract was obtained from ASIC showing the business holder details as the Sellers in partnership.
68A first hearing of the matter occurred on 24 April 2014. Mr Drivas attended, as did Mr Burrows. Conciliation was unsuccessful and orders were then made for the conduct of the matter to a hearing date to be fixed. Order 2 of those orders amended the name from CITY CARS to the Sellers trading as CITY CARS. This occurred as a result of the business name search obtained by NCAT.
69The explanation was offered from the bar table, and to some extent reiterated in the above letter from the Sellers' solicitor of 28 October 2014, that the Sellers were unrepresented at first instance and did not appreciate the significance of the fact that they, and not Dridel, was the Respondent to the claim. However, it was plain that Mr Burrows was making his claim against the seller of the vehicle. It would have been a relatively simple matter to have pointed out that Dridel was the seller and to have presented documents establishing the true position. We are not prepared to accept the Sellers' assertion as to why the Dridel point was not raised at the hearing. In any event, even if it is correct, for the reasons referred to below, it would not change the outcome of this point on the appeal.
70On appeal, the Appellants sought to rely on new evidence about the true seller. This included a copy of a certificate of registration for the vehicle in the name of Dridel showing a registration payment date of 25 June 2013 (the purchase date was 29 June 2013) with an expiry date of August 2013. Also, placed before the Appeal Panel were copies of a Motor Dealers Act licence for Dridel with a grant date of 8 August 2012 and a certificate of registration for Dridel as a company (giving a registration date of 13 March 2012). There was also a copy of a Notice of Sale, but this identified only "CITY CARS" as the dealer. No copy of an invoice for the sale has even been adduced.
71Clearly, all of these documents, and more complete proof that Dridel was the seller, could readily have been obtained for use at the hearing on 9 July 2013. No evidence was given to suggest otherwise.
72We are not prepared to grant leave to pursue this ground of appeal. We are not satisfied that any of the prescribed conditions in cl12(1), (a), (b) or (c) have been established.
(a) Whether against the weight of the evidence
73Clearly, it cannot be said that the decision below was against the weight of the evidence. At first instance, there was no evidence to suggest Dridel was the seller.
(b) Whether not fair and equitable
74Nor do we think that the decision at first instance was not fair and equitable because of this matter. We can see nothing unfair about the process by which the Sellers came to be the Respondents below. The original Respondent, "City Cars", was not a legal entity. This situation needed to be regularised. The amendment made was sufficiently supported by the business names search. The Sellers had ample opportunity to raise any objection with the course that was being and had been adopted. They had that opportunity at the first hearing of the matter on 24 April 2014, at which Mr Drivas was present, or subsequently, through the service of evidence or other documents to be relied upon, or at the final hearing on 9 July 2014.
75The Sellers, without reasons, question the power of the Tribunal to take the course it did but do not contend that it was beyond power. In the circumstances, it is unnecessary and inappropriate to decide the point. However, we do note that at least the following provisions of the Act, provide support for the course that was taken:
s 53(1) and (2), which empower the Tribunal, after giving notice to the party to whom the amendment relates, to make any amendments to any document filed where the Tribunal considers it to be necessary "in the interests of justice".
s 38(2), under which the Tribunal may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice.
s 36(1), under which the guiding principle for the application of the procedural rules is to facilitate the just, quick and cheap resolution of the real issues.
s 38(4), under which the Tribunal is to act with as little formality as the circumstances of the case permit.
76The Sellers now complain that there is "no evidence" that the Tribunal explained to the Applicant the importance or consequences of this variation, nor "any evidence" that the Tribunal recommended they seek legal advice about the change. Even if no such explanation or recommendation was supplied, and it was for the Sellers to positively establish the facts they relied upon, which they have not done, the Tribunal's specific responsibility to explain any aspect of procedure or ruling is contingent upon a request that it do so: s 38(5)(b). The Sellers do not contend that there was such request.
77Furthermore, there was no suggestion that the Purchaser knew he had not sued the true seller and that he was seeking an unfair advantage in suing the Sellers individually and not the company.
(c) Whether new evidence not reasonably available at time of hearing
78Finally, it is plain that this was not a point founded on new evidence not reasonably available at the time of the hearing at first instance.
Ground 4 - Error in providing full refund
79It is apparent from the reasons for decision at first instance that an argument was advanced by the Sellers against a full refund, apparently, on the basis that the Purchaser had the use of the vehicle for more than a year and in that time had travelled some 25,000 kilometres. The legal basis for the argument was not identified at first instance or on appeal.
80The Tribunal rejected the argument as follows:
I reject that submission which would be appropriate to consider in the case of a vehicle which can still be made roadworthy by some appropriate repairs. In this case, I find the vehicle is unroadworthy, not registrable (on the basis of the IVIC report) and it is appropriate in those circumstances that there be a full refund.
81On appeal, the Sellers placed considerable emphasis on the argument that the vehicle was returned with significant new damage.
82However, reliance on such damage is another new point not raised at first instance based, as it is, upon the report from Auto Inspect referred to above and the quotes for repair work obtained after the vehicle was collected by the Seller from the Purchaser.
83For the same reason given in respect of Ground 2 of the appeal in paragraphs 53 to 57 above, we are not satisfied that the material from Auto Inspect and the quotes are evidence that was not reasonably available at the time of the hearing at first instance.
84Accordingly, the condition for the grant of leave in cl12(1)(c) has not been established.
85Neither of the conditions in cl12(1)(a) and (b) are applicable. It was, at least, open to the Tribunal at first instance to reject the argument for a full refund on the basis that it did. In saying this, we are not to be taken as accepting that the Tribunal had any power to make an order for a partial refund given the terms of s 263(4). However, as the point was not argued, we do not say anything more about it.
Outcome of Appeal
86In the circumstances, leave to appeal on grounds 2, 3 and 4 is refused. Otherwise, the appeal is dismissed.
Orders on Appeal
87The orders of the Appeal Panel are as follows:
(1) An extension of time to 13 April 2014 be granted for the lodging of the Notice of Appeal, if such extension be necessary.
(2) Leave to appeal on grounds 2, 3 and 4 of the Ground of Appeal be refused.
(3) Otherwise, the appeal be dismissed.
I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal.
Principal Registrar