Hurst v Prestige Auto Traders

The Hursts' case in the Tribunal below

1. As is well known, the law has traditionally given buyers less protection in relation to sales by auction. For example, the statutory warranties related to fitness for purpose, quality and merchantability are excluded from sales by auction by the Australian Consumer Law (ACL). Ms Hurst confirmed at our hearing that she had not pressed a case before the Tribunal below that her purchase was protected by the statutory warranties or 'consumer guarantees' as they are now known.
2. There is some limited regulation of auction sales of motor vehicles under State law. At the time of this sale they were found in the Motor Dealers Act 1974 (since repealed) (MDA). A trader, including an auctioneer, must attach certain notices to the vehicle in the display period. In addition the Australian Consumer Law provides that a person must not engage in unfair or deceptive conduct in trade or commerce, and there are specific provisions prohibiting misrepresentation and unconscionable conduct.
3. The Hursts referred to these laws in support of their claim.
4. The Hursts did not obtain any mechanical report on the condition of the vehicle prior to auction. While the vehicle's registration had lapsed by about a month at the time of sale, the number plates remain attached. The Hursts registered the vehicle on the day of the delivery.
5. In relation to the condition of the vehicle, the Hursts relied on a statement given in connection with the vehicle's description in the sale listing on the auctioneer's website, which referred to minor damage to a headlight. They concluded that there must not have been any other damage or defects that affected quality of the vehicle.
6. The Tribunal rejected a submission by Prestige that claims based on misrepresentation could not be made in relation to an auction sale. The Tribunal ruled that the ACL contained no parallel exclusion to that applicable to consumer guarantees in respect of misleading conduct. The Tribunal found that s 29(1)(a) of the ACL provided a legal basis for the applicants' claim. Section 29(1)(a) provides: 29 False or misleading representations about goods or services (1) A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services: (a) make a false or misleading representation that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use.
7. The Tribunal summed up the basis for the Hursts' case as follows: At the hearing, Ms Hurst confirmed that the basis of the applicants' legal claim was misrepresentation. Ms Hurst confirmed the misrepresentation claim to be as follows - because the only fault listed in the auction sale was a damaged headlight, the applicants understood this to mean that the vehicle had no other defects. The applicants claim that as it turned out there was damage to a door which was not included on the Description of the sale listing, and also there were lots of mechanical problems with the vehicle that they say were not in accordance with the reputation of this vehicle as being sturdy and reliable. The applicants also claim that because the vehicle was not registered at the time of sale it ought to have had an inspection report attached to the vehicle and it did not.
8. The Tribunal found that the Hursts had misinterpreted the statements made in the sales listing. The Tribunal described the three pieces of information that the Hursts put in issue as the First, Second and Third Notices.
9. The first notice clearly covered vehicles of the present type (unregistered but plates attached), and advised of the dealer's obligation on or after sale to deliver an inspection report stating that the vehicle is roadworthy. (This is part of the form referred to as Form 8 in the MDA.)
10. The second notice commenced by stating: 'Vehicles that are sold without plates do not come with an E-Safety Check (Pink Slip/Blue Slip).' The Tribunal rejected the applicants' submission that they were therefore entitled to disregard the entirety of what followed, because theirs was a sale of a vehicle with plates. The notice continued 'Inspection is highly recommended prior to bidding. Vehicles are sold on an As is, Where is Basis.' The Tribunal ruled that the first sentence did not limit the next statements in the way suggested.
11. If it was wrong in that regard, the Tribunal nevertheless considered that the third notice (Form 9 in the MDA) was a general notice applying to all vehicles listed for sale by auction. The Notice emphasised that the sale was not covered by any warranties and that vehicles were sold on an 'as is' basis.
12. The Tribunal considered that the Hursts had been sufficiently warned that there was no obligation on the dealer to make good any defect which may exist in a vehicle sold at auction. Accordingly the Tribunal found no misrepresentation established, and dismissed the claim.

Consideration of the Hursts' case on appeal

1. In the notice of appeal, in her written submissions of 9 August 2016, and at the appeal hearing, Ms Hurst repeated the case she had made to the Tribunal. At the hearing of the appeal, she expressed the claim as one based on misrepresentation and unconscionability.
2. We were unable to identify from her submissions any possible errors in law in the Tribunal's reasons.

Misrepresentation

1. In our view, in citing s 29 of the ACL, the Tribunal accurately stated the kind of misrepresentation, or deceptive conduct, of which the Hursts complained. Ms Hurst at our hearing also referred to s 18 of the ACL which relevantly provides: 18 Misleading or deceptive conduct (1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. (2) Nothing in Part 3-1 (which is about unfair practices) limits by implication subsection (1).
2. Section 29 is a more specific expression of the types of conduct that may fall within s 18. The Tribunal's failure to refer to s 18 did not affect the logic or adequacy of its reasons.
3. The Hursts had deduced, it would seem, from the fact that one defect had been identified by the seller in the sales notices, that there must be no other serious defects, and the car was therefore of good quality. The Tribunal looked at the totality of the warnings included in the auctioneer's notices, and was satisfied that there the auctioneer did not mislead the Hursts as to the overall suitability of the vehicle. This was a finding of fact well open to the Tribunal to make on the evidence before it. The statement in issue went only to an external visible feature of the vehicle, involving damage of a kind that might bear on roadworthiness. It would have to have been assessed in the inspection report required as a condition of sale.
4. Ms Hurst pressed the opinion that as the car was sold with plates attached, it needed to have had a safety check and be roadworthy when sold. Prestige agreed that in the case of a sale of a vehicle with plates it was required to furnish an inspection report (pink slip). The difficulty with Ms Hurst's submission is that the passing of a roadworthy test (this vehicle had done about 116,000 kms) is not necessarily a predictor or guarantee of how well the vehicle will perform for the future. A roadworthy check is concerned with certain basic attributes of a vehicle that bear primarily on safety.
5. At a number of points at the appeal hearing, Ms Hurst repeated her submission that she had disregarded the Form displayed with the vehicle on the website, the 'Form 9', and the information and warnings it contained, because it only applied to vehicles sold without plates. Form 9 is the form that was required to be displayed pursuant to Section 23B of the MDA. It provided: (1) A person must not, by auction or in relation to a proposed auction, offer or display for sale, or sell, a motor vehicle to which any number-plate is attached unless there is attached to the vehicle, in the prescribed manner, an inspection report, issued in respect of the vehicle not more than 1 month before the date of the auction or proposed auction, to the effect that the vehicle was found to be roadworthy at the time of the issue of the report.
6. Its content was prescribed by the Motor Dealers Regulation 2010, cll 26(1) and 36 (then in force), as follows: Form 9 Auction notice (Clauses 26 (1) and 36) Motor Dealers Act 1974: sections 23B and 28 AUCTION NOTICE If a motor vehicle with registration plates is sold to a private purchaser, whether on the fall of the hammer or by subsequent negotiation with the highest bidder, an inspection report not more than 1 month old which is issued in respect of the vehicle and states that the vehicle is roadworthy will be provided at the time of delivery of the vehicle to the purchaser. A private purchaser means a person other than a financier or the holder of a licence under the Motor Dealers Act 1974 or under some other legislation in force in Australia that corresponds to that Act. There is no warranty under the Motor Dealers Act 1974 in respect of vehicles sold by auction. Accordingly the dealer is not required by the Act to repair or make good any defect which may exist in any vehicle so sold.
7. Ms Hurst misunderstood this notice. It applies to vehicles sold with plates.
8. On their face, therefore the Tribunal's reasons were not affected by any legal error.

Denial of procedural fairness

1. In addition, Ms Hurst objected to the Tribunal's decision on the ground of denial of procedural fairness. At the close of the hearing on 3 June 2016, the Tribunal gave the parties leave to file and serve further submissions. It directed Prestige to file and serve any further submissions by close of business that day, a Friday. Prestige complied. It directed Ms Hurst to file and serve any submissions in reply by close of business on Monday 6 June 2016, the next business day. There was no dispute that Ms Hurst did file the submissions with the Registry on the Monday afternoon (she provided a copy of her email, with the time and date of 4.44pm).
2. In her reasons the Member said: As the respondent was presenting its own case, and its solicitor was not given leave to sit with the respondent during the hearing, I granted the respondent leave to provide any further written submissions by close of business on the day of hearing, and for the applicants to provide any submission in reply by close of business on Monday 6 June 2016. The respondent provided a submission to the Tribunal by 4.29pm on Friday 3 June 2016 by email, which was also copied to the applicants. The applicants have not provided any submissions.
3. Ms Hurst submitted that the Member's failure to consider her submissions was unfair, and her appeal therefore should be allowed.
4. Clearly there was a procedural error in that the submission provided by Ms Hurst was not placed before the Member. We have reviewed Ms Hurst's written submission. It deals with some points to which we have not needed to refer to in these reasons which the Tribunal decided in Ms Hurst's favour: in particular, jurisdiction, Prestige's responsibility for the actions of its agent, Grays Online, and Prestige's issue estoppel argument.
5. The submission also deals with a number of matters that were addressed by the Tribunal in its reasons: the interpretation of the notices, and warnings given by the auctioneer. The main point that is raised in the submission that was not dealt with in the Tribunal's reasons is an argument by Ms Hurst that the owner's responsibility for defects differs as between vehicles that are less than five years old as compared to ones that are more than five years old and had travelled less than 160,000kms.
6. Ms Hurst's contention is that the vehicle her family purchased less than five years old at the date of purchase and special obligations applied to the dealer to present the vehicle in a state of good repair. The relevant provisions as to the liability of the dealer in respect of second hand vehicles applicable at the time are found in ss 27-29 of the MDA. As in force at the date of purchase, they did not draw any distinction between five year old and ten year old second hand vehicles. In our view the Tribunal made no error in failing to refer to this distinction. Further the only record we have of the issues raised at the hearing before the Member, are the reasons for decision, as no transcript or recording was supplied. We are not satisfied from that material that this aspect of the Hursts case formed part of the hearing.
7. Procedural unfairness will render a decision void unless the supervising court or tribunal considers that the unfairness made 'no difference' to the outcome: Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141. Gleeson CJ observed in Re Minister for Immigration and Multicultural Affairs; Ex parte Lam [2003] HCA 6 at [37]: Fairness is not an abstract concept. It is essentially practical. Whether one talks in terms of procedural fairness or natural justice, the concern of the law is to avoid practical injustice.
8. Not all procedural errors that produce an apparent unfairness to a party will result in a decision being set aside. A decision will not be set aside if the event said to have caused a miscarriage could not have made any difference to the result. See generally, Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141 (23 September 1986).
9. In our view, even if the Tribunal member had considered the Hursts' submission, it would have made no difference to the result.

Leave to Appeal on other grounds

1. The Hursts' application for leave to appeal on other grounds essentially covered the matters we have already addressed.
2. For the reasons given, the decision of the Tribunal was not against the weight of the evidence. This is not a case where significant new evidence is relied upon. The appellants consider that the decision was not fair and equitable. For the reasons given, we consider that the decision was in accordance with the relevant law. If there is no error of law, a respondent should ordinarily expect to retain the benefit of the judgment in its favour. For the reasons given, the decision-making process was not affected by any procedural unfairness that made any difference to the outcome. Leave to extend the appeal to other grounds is refused.

Orders 1. Leave to appeal on grounds other than questions of law is refused. 2. Appeal dismissed.

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: 28 October 2016