Green Square Garage Pty Ltd v ATM Corporation Pty Ltd t/as What You Wreckin

THE APPLICATION

1. In an application filed in the Tribunal on 31 December 2020 Green Square sought an order for the payment of $4200.00. Green Square alleged that a BMW engine purchased from ATM was different to the engine advertised on e-bay as an M62. Green Square claims that the engine sold by ATM was an M60 and does not fit the description of the advertised engine.
2. Green Square claims breach of contract and non-compliance with section 56 of Australian Consumer Law ("the ACL").
3. Green Square submits that it is entitled to claim a full refund of the purchase price of $4200.00

PROCEDURAL DIRECTIONS

1. On 26 February 2021 the Tribunal made procedural directions for both parties to file and serve any evidence upon which they intended to rely.
2. Pursuant to the directions both parties filed and served evidence. The documents were tendered and formed part of the evidence for the respective parties.

GREEN SQUARE'S EVIDENCE

1. Green Square's evidence included the following documents: 1. Application with attached documents; 2. E-bay advertisement for the engine dated on or about 16 June 2020; 3. Text messages between Ben Rubner and Anthony Marinho ("Marinho"); 4. Tax Invoice no 41 dated 5/7/2020 for the purchase of the engine; 5. Email from Green Square Garage to Marinho dated 23 July 2020; 6. Business Name search for "What You Wreckin"; 7. ABN Lookup for ABN 75 168 344 465; 8. Company Extract for ATM Corporation Pty Ltd; 9. Response to ATM'S evidence attaching various documents;
2. The documentary material was supplemented by oral testimony from Ben Rubner and Steve Rubner.

ATM'S EVIDENCE

1. ATM's documentary evidence included the following: 1. Written submission concerning jurisdiction and background information with various documents attached; 2. Tax Invoice no 4303 from Redback Automotive dated 30 June 2016; 3. Advice from ebay customer service dated 8 January 2021; 4. Copy of registration certificate dated 13 August 2014; 5. Written Response to Green Square's submissions and evidence
2. The documentary evidence was supplemented by oral submissions made by Marinho.

FACTUAL FINDINGS

1. From the evidence the Tribunal makes the following findings of fact: 1. On or about 16 June 2020 the following advertisement appeared on e-bay: "OEM BMW V8 M-SPORT 4.4L M62 ENGINE/MOTOR-155,000 Klms-740Il 540i E38 E39 #282633175561 PRICE: AU$4,400.00 1. On or about 16June 2020 Ben Rubner contacted Marinho about the advertised engine. Text messages between them confirm Ben Rubner asked questions about the history of the motor and the price. 2. Marinho sent Ben Rubner a business card for What You Wreckin on or about 18 June 2020. The card included the words "Anthony Marinho Owner", "Automotive Dismantling Specialising in Commodores". The telephone number on the business card was [XXX]. 3. The sale price was agreed at $4200.00 on or about 28 June 2020; 4. Ben Rubner paid a deposit of $420.00 by direct deposit into the bank account nominated by Marinho; 5. On 5 July 2020 Ben Rubner and Steve Rubner attended [XXX] to collect the engine. Ben Rubner paid Marinho $3780.00 in cash 6. Marinho handed Ben Rubner receipt no 41 dated 5/7/20. The receipt described the engine as "BMW M62 4.4L V8 engine/motor. Non Vanos…..". The price was shown as $4200.00. The receipt was made to Green Square Garage and was from Marinho. 7. The engine was secured to a wooden palate which was loaded onto Ben Rubner's Ford utility. Ben Rubner was handed a box containing various accessories. 8. The engine was delivered to the premises of Green Square Garage where it was unpacked. 9. Ben Rubner tried unsuccessfully to fit the engine to a vehicle. After investigation he discovered that the engine was an M60 and not an M62 as advertised on e-bay. 10. Ben Rubner tried unsuccessfully to contact Marinho by telephone. On 23July 2020 he sent Marinho an email about returning the engine and obtaining a refund. 11. Marinho denied any wrongdoing and refused to give him any refund.

JURISDICTION

1. A threshold issue in these proceedings is the jurisdiction of the Tribunal to hear and determine the application. Is the applicant's claim a consumer claim?
2. In its submissions ATM asserts that "at all material times, was not a party to this Transaction as outlined by the Applicant. The motor subject to File No:21/00404 was owned by Anthony Thomas Marinho ("Mr Marinho"). The seller of the motor, Mr Marinho,is an individual and not a motor dealer or repairer (NCAT's jurisdiction)".
3. ATM disputes the Tribunal's jurisdiction to hear the application because it is concerned with a motor only and not a motor vehicle. The motor was owned by Marinho and was removed from his personal vehicle.
4. ATM claims the sale to Green Square was a private sale. ATM had no involvement in the sale. He asserts the Tribunal does not have jurisdiction to hear and determine the application.
5. Green Square submits that the sale was a commercial transaction. It argues it was dealing with the auto dismantling business What You Wreckin. It points to representations made by Marinho and features of the transaction which support a conclusion the sale was a commercial arrangement.
6. Section 79J of the Fair Trading Act 1987 ("the FTA") confers jurisdiction on the Tribunal to hear and determine a consumer claim subject to certain exceptions.
7. Section 79E (1) of the FTA defines a "consumer claim" to mean: (1) For the purposes of this Part, a "consumer claim" means a claim by a consumer, for one or more of the following remedies, that arises from a supply of goods or services by a supplier to the consumer (whether or not under a contract) or that arises under a contract that is collateral to a contract for the supply of goods or services-- (a) the payment of a specified sum of money, (b) the supply of specified services, (c) relief from payment of a specified sum of money, (d) the delivery, return or replacement of specified goods or goods of a specified description.
8. In Skiba v Serendipity (WA) Pty Ltd t/as Advanced Personal Management [2019]NSWCATAP224 the Appeal Panel set out the elements of a consumer claim at [56]: As noted by the Appeal Panel in Kennett (supra) at [13], based on the meaning of 'consumer claim' in s 79E(1), and other definitions relevant to the words and terms in that section, the elements of a consumer claim arising from the supply of services under Part 6A of the FT Act, include the following: (1) the claim must be made by a 'consumer' as defined in s 79D. Section 79H provides that a person claiming to be a consumer is to be presumed to be a consumer until the contrary is proved; (2) the claim must arise from a 'supply' as defined in s 79G(2); (3) the claim is for 'services' as defined in s 79F; (4) by a 'supplier' as defined in s 79D, to a 'consumer' (whether or not under a contract) in the course of carrying on or purporting to carry on a 'business', as defined in s 4; and (5) the claim seeks one of the remedies listed in s 79E(1)(a) to (d).
9. The claim must arise from the supply of goods or services by a supplier to the consumer or a contract that is collateral to a contract for the supply of goods or services.
10. I find that Green Square is a consumer as defined in section 79D of the FTA.
11. "Supply" in relation to goods and services is defined in section 79G of the FTA. Section 79G(1) provides that a reference to the supply of goods includes a reference to any of the following: (a) supplying goods by way of sale, exchange, lease, hire or hire-purchase, (b) resupplying goods, (c) agreeing to supply goods, (d) supplying goods together with services.
12. "Goods" are defined in section 79D to mean "any tangible thing that is or may be the subject of trade or commerce but does not include money or an interest in land".
13. I find there was a supply of goods (the engine/motor) by ATM to Green Square on 5 July 2020.
14. The term "Supplier" is defined in section 79D of the FTA as meaning "a person who, in the course of carrying on (or purporting to carry on) a business, supplies goods or services".
15. The question for determination is whether ATM was the "person who, in the course of carrying on a business "supplied the engine/motor to Green Square. If so, was ATM a supplier as defined in section 79D of the FTA?
16. The supply of the goods or services to the consumer does not have to arise under a contract. The supply must be in the course of carrying on or purporting to carry on a "business" as defined in section 4 of the FTA. The definition of "business" in section 4 is not exhaustive and includes a business not carried on for profit and a trade or profession.
17. If the claim arises out of a private transaction between individuals where the supply is not made in the course of the supplier carrying on or purporting to carry on a business, the claim is not a consumer claim. The situation is different if the sale occurs through a dealer or agent who is carrying on a business even if the dealer is acting for a private seller: Thelfro v Merbron Pty Ltd t/as Burraneer Bay Marina [2018] NSWCATAP 251.
18. The expression "trade or commerce" is defined in section 4 of the FTA to "include any business or professional activity". The goods provided by the supplier must be provided in circumstances of a trading or commercial nature.
19. In Plath v Snowy Monaro Regional Council [2019] NSWCATAP 165 the Appeal Panel stated at [22]: The decision of the Court of Appeal of Victoria in Murphy also dealt with the question of whether the Australian Consumer Law (ACL) (Sch 2 Vol 3 of the Competition and Consumer Act 2010 which is the Trade Practices Act (renamed from 1 January 2011) was applicable to the conduct of a statutory corporation. The Court set out and approved a number of propositions put forward by the trial Judge concerning the question of whether the relevant conduct was conduct engaged in as part of the carrying on of a business ([46]-[50]). These propositions included: "[46] ... (a) For activities to constitute "carrying on a business", the activities must be undertaken in a commercial enterprise or as a going concern. The activities must constitute trade, or commercial transactions or engagements. A business activity is an activity which takes place in a business context and which, of itself, bears a business character. (b) The expression "carry on a business" signifies a course of conduct involving the performance of a succession of acts with system and regularity, not the effecting of a solitary transaction. The less commercial the character and objectives of an organisation, the greater the degree of system and regularity required to establish that it carries on a business. (c) On the other hand, mere repetitiveness is insufficient. It does not necessarily follow that one who engages in transactions of the same kind systematically or regularly is carrying on a business in those transactions (eg regular deposits into a bank account). Absence of a system and regularity might deny that a business is being carried on but their presence does not necessarily establish that it is. (d) There is a distinction between those functions of a government which are purely governmental or regulatory and those functions which entail the carrying on of business. To carry on some part of 'the business of government' is something different from carrying on a business in the relevant sense. (e) The carrying out of a function of government in the interests of the community, such as the performance of a statutory function (including one in respect of which fees may be charged), is not the carrying on of a business. That the purpose of the activities is the provision of governmental services will tend against a conclusion that they amount to the carrying on of a business. (f) There must be present some element of commerce or trade such as a private citizen or trader might undertake. ... [49] Secondly, based on observations of Emmet J in J S McMillan Pty Ltd v Commonwealth, the judge identified what his Honour described as three important limitations inherent in s18 of the ACL: 1) First, the focus must be on the impugned conduct: the impugned conduct must be engaged in in the course of carrying on the business. 2) Secondly, and consequently, it is not sufficient that the impugned conduct be connected in some way with a business to be conducted by the State at some time in the future; and activities preparatory to the establishment of a business do not constitute the commencement of or the carrying on of a business. 3)Thirdly, the activity in the course of which the impugned conduct occurs must properly be characterizable as "carrying on a business"." (citations omitted) The principles relevant to determining whether specified conduct can be characterised as "carrying on a business" for the purposes of consumer law have been discussed in numerous cases since J S McMillan. See for example Corrections Corporation of Australia Pty Ltd v Commonwealth (2000) 104 FCR 448; [2000] FCA 1280 at [12]- [16]; Sirway Asia Pacific Pty Ltd v Commonwealth [2002] FCA 1152 at [56]; Salvation Army (New South Wales) Property Trust v Commonwealth [2015] FCA 674 at [11]- [14]; and most recently in Roo Roofing Pty Ltd v Commonwealth [2019] VSC 331 at [586] ff.
20. Marinho argues that the sale was a private sale and not sold by ATM. He relies on the following matters: 1. The engine/motor was removed from his private vehicle which was registered in his name; 2. ATM was never mentioned in the dealings with Green Square; all correspondence was signed off as Anthony rather than the business name What You Wreckin. 3. The words "being removed from our personal car for a project - we have owned this car for over 4 years and use it daily" appeared in the e-bay advertisement; 4. Marinho had owned the car from which the engine was removed for about 8 years; 5. The tax invoice 41 dated 5/7/20 was not on the letterhead, did not include an ABN and GST.
21. Green Square submitted that it understood it was dealing with a business during the transaction. It relies on the following matters to establish that the sale was made by ATM: 1. The engine was advertised on e-bay by the business What You Wreckin. Green Square has tendered a copy of the message trail which clearly shows the sender as "what_you_wreckin" 2. The language in the communications between the Marinho and Ben Rubner establish that Green Square was dealing with a business; 3. Marinho invited Ben Rubner to search the ABN for What You Wreckin" 4. Green Square paid a 10% deposit as requested by Marinho in the belief it was purchasing the engine from a business; 5. The engine was collected from the business premises of What You Wreckin at 11 Peachtree Road Penrith; 6. Marinho supplied a business card for What You Wreckin.
22. The issue as to who was the supplier of the engine must be considered objectively looking at the factual circumstances of the transaction. The onus is on Green Square to prove on the balance of probabilities that the seller was ATM and not Marinho.
23. The Tribunal has reviewed the evidence and finds that the seller of the engine was ATM. The Tribunal's reasons for this finding are: 1. An ASIC search shows ATM is the registered owner of the business name What You Wreckin; 2. The ebay advertisement for the engine under the heading Seller information includes the name what_you_wreckin. 3. The language used in the message trail between Marinho and Ben Rubner creates the impression the seller of the engine is a business. 4. Some examples of language used by Marinho to create that impression are: "Hi. This is Anthony from What You Wreckin regarding the BMW engine"; "My staff members have been looking after the shop"; "What's your business name? Got a website? What You Wreckin. No website at the moment as it's being redesigned and all new logos. But the ABN is available to look up. Sell over 80 items a week so definitely a trusted seller and business". 5. Marinho provided Ben Rubner with a business card showing Marinho as the owner of What You Wreckin. 6. Marinho advised Ben Rubner the business sold "over 80 items a week so definitely a trusted seller and business" 7. Marinho requested "a deposit to remove the motor as we have been burnt before in taking an item out and then the buyer changing their mind". This creates the impression this is not the first time Marinho has sold an engine. 8. The engine was collected by Ben Rubner and Steve Rubner from the business premises of What You Wreckin in Penrith. Marinho stated he would be at the premises for another engine collection at 2:30.
24. Although Marinho advised Ben Rubner the sale was a "personal sale so no gst on the item" the Tribunal is not persuaded by the evidence that the sale of the engine was a private sale by Marinho. The evidence that the sale of the engine was made by ATM is compelling. The Tribunal rejects Marinho's submission that he was the seller of the engine.
25. The Tribunal finds that ATM was a person who in the course of carrying on business supplied the engine /motor to Green Square.
26. The Tribunal finds that the claim is a consumer claim and it has jurisdiction to hear and determine the application.

GREEN SQUARE'S CAUSES OF ACTION

1. Green Square alleges that the engine sold by ATM was different to that which was advertised on e-bay. Green Square may have a cause of action based on contract or under Australia Consumer Law ("the ACL").
2. The consumer guarantees under the ACL impose obligations independent of the contract. The consumer guarantees are create statutory obligations which give rise to a statutory cause of action under section 259 of the ACL.
3. The e-bay advertisement clearly described the engine as an "OEM BMW V8 M-SPORT 4.4L M62 ENGINE/MOTOR - 155,000 Klms- 740iL E38 E39"
4. The motor sold to Green Square was described on the invoice dated 5/7/20 as "BMW M62 4.4L V8 Engine/ Motor-Non Vanos"
5. Green Square paid a deposit of $420.00 on 1 July 2020 by transfer into the bank account nominated by Marinho.
6. The Tribunal finds that there was a contract made on 1 July 2020 between ATM and Green Square for the purchase of a BMW M62 4.4L V8 Engine for a price of $4200.00.
7. The contract was completed on 5 July 2020 when Green Square paid the balance of the purchase price of $3780 in cash and collected the engine.
8. Did Green Square receive what it bargained for under the contract? Green Square submits that the engine is a different engine to that advertised being an M60 rather than an M62. It contends the engine has been mis-represented as an M62 4.4L.
9. Green Square made several unsuccessful attempts to fit the engine into a vehicle. Upon further inspection Green Square ascertained that the engine sold by ATM was an M60 and not the M62 advertised on e-bay.
10. On 23 July 2020 Green Square requested a refund and to return the engine. Marinho refused to accept the return of the engine and refund the purchase price.
11. Although there are similarities between an M60 and M62 engine, there are also significant differences.
12. Both parties have tendered documentation from different sources as to the history of the motor.
13. The Vin Number for the vehicle from which the engine was removed is [XXX] The search of realoem .com website shows the motor fitted to a BMW vehicle bearing this Vin Number was an M60 and not an M62.
14. Eurospares Pty Ltd have confirmed in an email dated 12 March 2021 that a BMW 740iL 3/1995 is only supplied with an M60 engine.
15. Green Square tendered a photograph showing the serial number of the engine sold is [XXX]. The serial number indicates that the engine is 4.0 litres rather than 4.4 litres as advertised. This confirms that the engine is an M60 and not an M62. The Tribunal accepts the undisputed evidence of Green Square that the first 8 digits are the motor's specific serial number and the digits thereafter indicate motor litre capacity and 8 cylinders.
16. Green Square tendered a screen shot from Burston Automotive website which corroborates other evidence that a BMW vehicle with Vin Number [XXX] was fitted with an M 60 engine.
17. ATM argues that the evidence is inconclusive whether the engine is an M60 or M62. He contends that his vehicle was "one of the only 740IL's to have the M62 model fitted in 1995 as a trial as the M62 motor was introduced into vehicles in 1995, thus being one of the first 7 series BMW's in existence to contain the M62 engine by BMW." This statement is not supported by any documentary material.
18. Green Square bears the onus of proof. The Tribunal finds that the engine sold by ATM to Green Square did not fit the description of a 4.4L M62 engine in the e-bay advertisement. Green Square contracted with ATM to purchase a 4.4.L M62 engine. The engine supplied by ATM pursuant to the contract was not an M62 but a different engine.
19. ATM breached the contract in that Green Square did not receive an M62 engine which it agreed to purchase for $4200.00. ATM has breached the contract causing Green Square to suffer loss and damage.
20. The measure of damages for breach of contract is the amount required to put the innocent party into the position they would have been if the contract had been performed.
21. The innocent party in this case is Green Square. The sum of $4200.00 is the amount required to put Green Square into the position it would have been if the contract had been performed by ATM.
22. Green Square has been successful in proving its claim for breach of contract which disposes of this application.
23. By way of further comment Green Square had a remedy available based on a breach of the consumer guarantee in section 56 of the ACL. Relevantly that section provides that if a person supplies in trade or commerce goods by description to a consumer and the supply does not occur by way of sale by auction, there is a guarantee that the goods correspond with the description.
24. The Tribunal is satisfied that the engine supplied by ATM did not correspond with the description in the contract and accordingly Green Square was entitled to the remedies in section 259 of the ACL. The Tribunal would be satisfied that the failure was a major failure and the result would be that Green Square was entitled to a full refund of the purchase price.

What orders should be made so the orders are fair and equitable between the parties?

1. Under section 79U(1) of the FTA, the Tribunal must make orders which are fair and equitable between the parties. The Tribunal is required to take into account what was fair and equitable having regard to the circumstances of all the parties
2. Section 79U(1) provides: "(1) When making any orders under this Division, the Tribunal must be satisfied that the orders will be fair and equitable to all the parties to the claim".
3. Under section 79N of the FTA the Tribunal may make orders including an order for the payment of an amount of money and return of goods in the possession or control of the claimant.
4. Section 79U(2) sets out a number of factors which the Tribunal must take into account when deciding to make an order.
5. After considering the factors in section 79U(2), the Tribunal is satisfied that the orders are fair and equitable between the parties.

CONCLUSION:

1. The Tribunal makes the following orders:
2. The Respondent ATM Corporation Pty Ltd is to pay the Applicant Green Square Garage Pty Ltd the sum of $4200.00 on or before 8 October 2021;
3. Within 7 days of the receipt of the payment referred to in order 1, the Applicant is to return to the Respondent the BMW M60 engine/ motor together with all parts and accessories provided by the Respondent on 5 July 2020.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 09 November 2021