GM Holden Ltd v Scicluna Facade Design Pty Ltd

GM Holden Ltd v Scicluna Facade Design Pty Ltd - [2018] NSWCATAP 292 - NSWCATAP 2018 case summary — Zoe

[3]

The Decision

First, the Member indicated that she was satisfied that she had jurisdiction to hear and determine the matter, stating: On or about 8 November the applicant purchased the vehicle brand-new from the dealer for a purchase price of $30,350. Mr Scicluna took delivery of the vehicle on 13 November 2015. The vehicle was registered in Mr Scicluna's company and the main driver was his wife. The contract was made in New South Wales and the car was delivered in New South Wales which therefore satisfy section 79F of the Fair Trading Act. The Tribunal is also satisfied that the applicant is a consumer within the meaning of section 3 of the Australian Consumer Law because the car is of a kind ordinarily acquired for personal domestic and household use or consumption. I am also satisfied the cause of action was brought within the limitation period which is three years of becoming aware, he became aware within a month of the issue and the self locking and he bought the application in time.
Secondly, the Member then identified the causes of action as follows: As for the causes of action, the applicant claimed the return and refund of the car, also claimed the time lost, I have explained why I am not awarding anything in relation to that. As to the causes of action the applicant has not been well schooled in the causes of action and did not obtain any legal advice . . . you did however in your evidence talk about representations made by the salesman and in the Holden brochure so I have looked at those representations in the context of Australian Consumer Law which talks about misleading, deceptive and false representations. I have also looked at the consumer guarantees in relation to, in the context of the keyless systems, because when asked to summarise your cause of action, you used the terminology, that, you said it is not working as it should be working, so I have looked at it in that context. The respondents on the other hand claim that the system was working in accordance with its design and that any problems the applicant was experiencing was due to outside influences.
Thirdly, the Member then explained the length of time the respondent had experienced issues with the motor vehicle: I am going to go through the agreed facts as I have recorded them from the documentation, they haven't all come up today, but I think they set a little bit of a scene which is important in my decision making in the context of the fact that it has gone on for so long and that its been back and forth for long periods of time to Holden. My finding is that Holden customer care and [CCA] as well, have made very good attempts at trying to fix this problem. You have sought to replicate it, you have sought to identify the cause but I do find that after 2½ years of attempting to do so it has not been possible to do so. I'll get to why in a minute as to why I do find that this doesn't mean that failing, failing to replicate the problem, doesn't in my mind mean that it doesn't exist, and I think also the documentary evidence from yourselves even suggest that you believe it does exist, this problem, its just that its been unable to be replicated easily because of the intermittent nature of the defect.
In making these comments, the Member also indicated that she was "disappointed" that the evidence did not include any evidence of Mrs Scicluna, who was the principal driver of the motor vehicle.
Fourthly, the Member then explained the applicable law. She said: So, the law in relation to this issue is the Consumer Law under the Fair Trading Act the provisions of the Australian Consumer Law apply, importantly particularly here are sections 18 and 29 of the Australian Consumer Law which provide that a corporation supplying goods and services in trade or commerce must not engage in misleading or deceptive conduct in respect to the sale of any goods or services and they must not in trade or commerce engage in conduct that is likely to mislead or deceive and so I will get to that shortly with the evidence. Importantly too, by section 54 of the Australian Consumer Law there is a consumer guarantee that goods supplied in trade or commerce must be of acceptable quality, acceptable quality as I have mentioned before includes things like whether the goods are fit for all the purposes for which goods of that kind are commonly supplied, I have not made a finding about that because it hasn't been necessary to do so, acceptable in appearance and finish, free from defects, is an important one here which I have made a finding on and as I have said I have made a finding that this car is not free from defects and to be of acceptable quality the car must be safe and I've also made a finding that its not safe because of the problem with the keylock and lastly durable it has not been necessary to make a finding about durable. Then, the remedies available to a applicant are set out in section 259 and onwards of Australian Consumer Law. If a major failure is shown to exist that entitles the consumer to reject the goods, importantly also though, if the failure to comply, even if the failure to comply is not major, even if it is not a major failure, but the guarantee cannot be remedied then that also entitles the applicant to reject. So, I have found on both those fronts and will get to that at the end as well.
Fifthly, the Member then addressed the principal claim made by the respondent, namely that the motor vehicle would "self-lock". The Member stated: So, in relation to the key locking I have found that there are a range of self locking incidences which have occurred, the evidence, it has occurred has not just been when the keys was in the bag but also when the keys were next to a bag on the passenger seat, and so I think that's important because the bag cannot be claimed to be always the outside influence even though no one has tested the bag. There has been no evidence that the keys were put in front of the display, ie up near the dashboard and I don't think the problem can always have been said to arisen due to the battery life because the problem has been intermittent but over a long period of time and the battery was first changed in February 2018 so it can't have been going fiat for the 2 years prior. I do however disregard those instances where the keys were left in the bag in [the] boot. It was suggested by Mr Northover that those occurrences were all of the early occurrences and that you relied on a document which we do not have before us. I was not satisfied on that evidence, based on the documentary evidence before us from Mrs Scicluna but in any event I think it was on the evidence once or twice that the keys were left in the boot. I think the majority of cases where the locking, the car self locked was when the car, when the bag was next to, was on the passenger seat, sometimes the keys being in the bag, sometimes being out of bag. I find that there is evidence that Holden customer care believe the fault exist too, and I rely on the fact that they were able to replicate the fault on 7 March 2018 themselves and the fact they told the first respondent to deactivate the auto-lock and they would not have been asking you to do that if they did not think there was a problem. Because of that evidence that I believe the respondents themselves, at least the second respondent believes that fault exists. Then I don't think it would have made any difference whether Mrs Scicluna was here or not in relation to be able to prove whether or not the self locking incident arises, and I will go through the other claims that arose about problems with the car, but the majority of those claims I havent accepted, but I do find that the problem with the self locking is so important and so intractable and has been so difficult to fix that I find that it, in itself is enough to justify the rejection of the car.
Sixthly, various other claims made by the respondent were rejected. These included:

the "issue about the car moving";
the instances where the keys were left in a bag in the boot of the vehicle;
the car not locking "with both keys out of the car";
whether or not the car "doesn't always start";
issues about the reversing camera;
issues about the audio system starting and stopping; and
issues about "about doors locking when not fully closed, doors locking and unlocking while driving and the headlights going off at night".

Seventhly, the Member made it plain that the principal issue was the self locking, finding: I think the majority of cases where the locking, the car self locked was when the car, when the bag was next to, was on the passenger seat, sometimes the keys being in the bag, sometimes being out of bag. I find that there is evidence that Holden customer care believe the fault exist too, and I rely on the fact that they were able to replicate the fault on 7 March 2018 themselves and the fact they told the first respondent to deactivate the auto-lock and they would not have been asking you to do that if they did not think there was a problem. Because of that evidence that I believe the respondents themselves, at least the second respondent believes that fault exists. Then I don't think it would have made any difference whether Mrs Scicluna was here or not in relation to be able to prove whether or not the self locking incident arises, and I will go through the other claims that arose about problems with the car, but the majority of those claims I havent accepted, but I do find that the problem with the self locking is so important and so intractable and has been so difficult to fix that I find that it, in itself is enough to justify the rejection of the car. (emphasis added)
Eighthly, the Member then dealt with the brochure provided with the motor vehicle which explained how Holden's Passive Entry Passive Start keyless entry and ignition system (PEPS) worked. Here the Member was critical of the brochure's failure to provide a reasonable explanation of how the PEPS would work. In a lengthy consideration, the Member stated: I find that the brochure made representations about, this was the brochure that was handed to the applicant while they were considering whether or not to buy the car. It does say in that that the use of the Key system is a feature, I mean Holden goes about promoting itself and I think this is important in the context of the comments that was made by you Mr Northover about is it reasonable, are you required to tell people not to leave the key in the car, ordinarily I would say no, you're not required to do that, but I think Holden is making a feature of this keyless system and obviously it is a fairly newish, I don't have evidence on that but I know, I don't know how long around its been, but a lot of cars don't have it, some cars do, so you are entitled to make a feature of it but in doing so I think it's important that you provide a reasonable explanation of how it will operate, if it has some restrictions around it. Now, the brochure itself and I know it's a brochure so to a point be considered puffery but I think it's important that its provided in the context of trying to sell the car, and it was important here to this client, a customer of yours because they relied on it they found it very important to Mrs Scicluna that she would have the ability not to worry too much about the keys, they'd just be safely put away in her bag and they would be out of view from people. I can't find the words in the brochure now but it was the fact that the sensor key technology is claimed to be ultra convenient and it specifically says that, it assumes that the key can remain in a person's handbag, it doesn't go on to say that handbag must remain on their person at all times. Now being just a brochure I can see some element that it doesn't have to go into too much detail but I think when you combine that with the fact, the statements that the salesman made which I accept were to the effect that there would be no keys required to start the engine or lock the car that she, she meaning Rita can leave the key in her bag where they are not seen and this was in evidence, I accept was important to this customer in buying the car and he noted that only Holden were the ones that went to this length explaining how good this feature was and it was, very much influenced their decision to purchase this car over the other ones that they had been looking at. So those are important and I do find that it wasn't, oh this was the other thing that the brochure said, that once inside, its as simple as pushing a button and in most cases it was, but as I said I turn generally, my decision today turns more on the self locking aspect, so the self locking was not ultra convenient because it had restrictions around it which would not have been antieipated by the customer and I will talk more about those restrictions in the context of the owner's manual shortly. I do find that they were misleading, false puts it too highly, but misleading statements by the salesman and in the brochure. At the end of the day nothing turns entirely on that because my finding really is around the consumer guarantees and I find that the self locking mechanism was not an acceptable quality because it is not free from defects and I'm also finding that it is not safe and by both those reasons it is not of acceptable quality.

[4]

Ground of Appeal

The grounds of appeal are stated in the notice of appeal as follows (we have added the paragraph numbering for convenience): [1] the proviso of the ACL is that a defect must be found with the vehicle for a consumer to have a claim. The Applicants Vehicle Is Operating As Designed with No Manufacturing Defects Found in the Vehicle. [2] We can confirm the applicants vehicle is manufactured with Holden's Passive Entry Passive Start (PEPS) keyless entry and ignition system that operates on a Radio Frequency (RF) and refer you to the section "keys, doors and windows" in the applicants cruise owners handbook. This section explains and states in 2 separate sections; the signal transmission from the electronic came key can be affected by external influences such as higher-power radio waves from other sources. Interruption of the key signal can cause the vehicle to no longer since the key within the applicants vehicle causing the doors to lock. Therefore we strongly recommended to the applicant that the electronic key is not left in the vehicle at any time and believe this remedy will resolve their reported concern. [3] We believe the applicant, by leaving the key in the vehicle was parked in the garage is inducing their reported concern. By simply removing the key from the vehicle, they would not experience the reported concern. [4] We strongly refute the Tribunal's decision that Central Coast Automatic are to pay the applicant $30,350 is under Australiin Consumer Law no Manufacturing defect has been found with the applicants Vehicle. ACL clearly states that only where a manufacturing defect is categorised as "major" and the customer request repair, replacement vehicle or a full refund and where a manufacturing defect is Characterised as minor either Holden or the dealer can choose the remedy. In this case we have neither a minor or major defect is the applicants vehicle is operating as designed.
The appellants submit that the Appeal Panel should overturn the original decision as the vehicle does not have any defects and the problem is caused by the applicant choosing to leave the keys in the vehicle.

[6]

A question of law

As to questions of law, in Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel considered the requirements for establishing an "error of law" giving rise to an appeal as of right. Without expressing exhaustively possible questions of law, the Appeal Panel in Prendergast referred at [13] to the following as constituting errors of law: 1. whether there has been a failure to provide proper reasons; 2. whether the Tribunal identified the wrong issue or asked the wrong question; 3. whether a wrong principle of law has been applied; 4. whether there was a failure to afford procedural fairness; 5. whether the Tribunal failed to take into account a relevant (mandatory) consideration; 6. whether the Tribunal took into account an irrelevant consideration; 7. whether there was no evidence to support a finding of fact; 8. whether the decision was so unreasonable that no reasonable decision-maker would have made it.
We also note that in Prendergast the Appeal Panel stated at [12] that in circumstances where the appellants are not legally represented, it is apposite for the Tribunal to approach the issue by looking at the grounds of appeal generally, and to determine whether a question of law has in fact been raised (subject to any procedural fairness considerations that might arise to the respondent).
As to the "grounds" set out above, ground (1) appears to be a submission that the finding of the Tribunal that there was a defect in the vehicle was made against the weight of the evidence. This is not a question of law, and the ground requires leave.
We do not consider that ground (2) is actually a ground of appeal at all, although the substance may go to the findings being against the weight of the evidence.
Nor do we consider ground (3) to be a proper ground of appeal. It is simply a submission, in fact speculation, about what may have occurred.
Ground (4) is also a factual finding, and as such any attack on that ground on that finding also requires leave.
We discussed these matters with the representative for Holden. The real basis of the appeal as we understood it was that the Decision was in error as being against the weight of the evidence. The appellants claim that the Tribunal erred in failing to give sufficient weight to the following matters:

various statements in the CRUZE Owner's Handbook;
the lack of expert evidence;
the letter of Holden to Mr and Mrs Scicluna of 29 March 2018;
regulation 213 of the Road Rules 2014 (NSW);
the fact that the "autolock" was switched off on 29 June 2018; and
the events of 26 May 2016.

[7]

Leave to appeal

We shall consider each in turn. Before doing so we note that cl 12 of Sch 4 of the NCAT Act says that an Appeal Panel may grant leave only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: 1. the decision of the Tribunal under appeal was not fair and equitable, or 2. the decision of the Tribunal under appeal was against the weight of evidence; or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
We note that in Collins v Urban [2014] NSWCATAP 17 the meaning of "substantial miscarriage of justice" was summarized at [71] and [79] as follows: [71]. . . [I]t can be seen that the concept of a substantial miscarriage of justice refers to a failure in the way a matter was conducted or decided which deprived the appellant of a chance that was fairly open of achieving a better outcome than occurred. . . . [79] 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 . . . it will be 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."
The principles to be applied by an Appeal Panel in determining whether or not leave to appeal should be granted are well settled. In Collins v Urban [2014] NSWCATAP 17 an Appeal Panel of the Tribunal conducted a review of the relevant cases at [65]-[79] and concluded at 84 that: (2) Ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (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; (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.
As was explained in Pholi v Wearne [2014] NSWCATAP 78 at [32]: Even if the appellant establishes that [they] may have suffered a substantial miscarriage of justice in the sense explained above, the Appeal Panel then retains the discretion whether to grant leave under s 80(2) of the Act (see Collins v Urban, supra at [80]-[84]). [The appellant] must demonstrate something more than that the Tribunal was arguably wrong. Leave is ordinarily granted only where the matter involves an issue of principle, questions of public importance, where the injustice is reasonably clear or where the Tribunal has gone about its fact finding process in such an unorthodox manner that it is likely to have produced an unfair result.

[10]

Letter of Holden dated 29 March 2018

The next piece of evidence, to which the appellants submit the Tribunal failed to give sufficient weight, is the letter from Holden to Mr and Mrs Scicluna dated 29 March 2018. The letter was attached to an email of Holden's Customer Care representative "Thomas". The email relevantly states: Please find attached an official letter from Holden confirming the outcome of your vehicle's investigation. As per our recent conversation, we confirmed that after extensive testing conducted by [CCA], there is no manufacturing defect present in your vehicle. You are lying by stating this as we never discussed this in out phone conversation. If you are going to say something say the truth or shut up. It is as simple as that. In the letter attached, we have highlighted a specific section of your Owners Handbook that will clarify your issue with the electronic key. Please do not hesitate to contact Holden Customer Care with any further question [sic] you may have. (underlining and bolding as in original)
The letter states: We write in reference to your 2015 Holden Cruze Sri-V, Vehicle Identification Number 6G1PE6EN1#L146515 (Vehicle). We note your reported concern is your Vehicle locking with the keys left inside when your Vehicle is parked in your garage overnight. As you are aware, you're [sic] Vehicle has been extensively tested by Central Coast Holden in conjunction with Holden's Technical Assistance Centre who have confirmed there is no manufacturing defect present in your Vehicle. As discussed during our recent telephone conversation, we have determined your Vehicle is operating as per design intent and may be experiencing interference from external electronic sources. We refer you to the section 'Keys, doors and windows' of your owner's handbook. As you will see detailed in this section, the signal transmission from the electronic key can be affected by external influences such as higher-power radio waves from other sources. Interruption of the key signal can cause the Vehicle to no longer sense the key within your Vehicle causing the doors to lock. Therefore, we strongly recommend the electronic key is not left in your Vehicle at any time and believe this remedy will sufficiently resolve your reported concern. Please note that your concerns have been recorded at Head Office for future reference and trust you understand our position on this matter
As can be seen, the significance of this letter was:

to assert Holden's view that the motor vehicle was "operating as per design intent" (that is, that there was no manufacturing defect);
to hypothesise that the vehicle "may be" experiencing interference from external electronic sources;
to refer the respondent to the 'Keys, doors and windows' section of the Owner's Handbook;
to strongly recommend that electronic key was not left in the vehicle at any time. Holden stated that it believed that this remedy would sufficiently resolve the respondent's reported concern.

The real significant of this letter in so far as this appeal is concerned is the advice that the electronic key not be left in the vehicle, Holden believing that this would remedy the problem.
As noted above, the Member found that the problem with the self locking was so important and so intractable and has been so difficult to fix that this of itself was enough to justify the rejection of the vehicle. Contrary to Holden's submission, it was open to the Member to find that the automatic self locking of the vehicle was a "defect".
Even if we considered that this resulted in a substantial miscarriage of justice in that the appellants were deprived of a chance that was fairly open of achieving a better outcome than occurred, we are not persuaded that leave should be granted on this ground alone. As we have noted above, leave is ordinarily granted only where the matter involves an issue of principle, questions of public importance, where the injustice is reasonably clear or where the Tribunal has gone about its fact finding process in such an unorthodox manner that it is likely to have produced an unfair result.

Tenthly, the Member then turned to the provisions of the Australian Consumer Law (ACL). It appears clear that the Member is referring to ss 259 and 260 of the ACL. Those sections relevantly provide: 259 Action against suppliers of goods . . . (2) If the failure to comply with the guarantee can be remedied and is not a major failure: (a) the consumer may require the supplier to remedy the failure within a reasonable time; or (b) if such a requirement is made of the supplier but the supplier refuses or fails to comply with the requirement, or fails to comply with the requirement within a reasonable time--the consumer may: (i) otherwise have the failure remedied and, by action against the supplier, recover all reasonable costs incurred by the consumer in having the failure so remedied; or (ii) subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection. (3) If the failure to comply with the guarantee cannot be remedied or is a major failure, the consumer may: (a) subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection; or (b) by action against the supplier, recover compensation for any reduction in the value of the goods below the price paid or payable by the consumer for the goods. (4) The consumer may, by action against the supplier, recover damages for any loss or damage suffered by the consumer because of the failure to comply with the guarantee if it was reasonably foreseeable that the consumer would suffer such loss or damage as a result of such a failure. . . . 260 When a failure to comply with a guarantee is a major failure 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: (a) the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or (b) the goods depart in one or more significant respects: (i) if they were supplied by description--from that description; or (ii) if they were supplied by reference to a sample or demonstration model--from that sample or demonstration model; or (c) the goods are substantially unfit for a purpose for which goods of the same kind are commonly supplied and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or (d) the goods are unfit for a disclosed purpose that was made known to: (i) the supplier of the goods; or (ii) a person by whom any prior negotiations or arrangements in relation to the acquisition of the goods were conducted or made; and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or (e) the goods are not of acceptable quality because they are unsafe.

At a glance

Court

Decision date

Before

Source

Judgment (17 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (6)