Jav Automotive Pty Ltd v Livermoore

NCAT Appeal Panel|2024-10-28

Summary

This is the appellant's appeal from a decision of the Consumer and Commercial Division of the Tribunal (Tribunal) of 28 June 2024 (Decision).
By application filed 9 February 2024, the respondent sought orders that the appellant pay her $20,680.65. The basis of the application was the allegation that the appellant had sold the respondent a motor vehicle which was not of acceptable quality as required by the consumer guarantee set out in s 54 of the Australian Consumer Law (ACL).
After a hearing on 28 June 2024, on 2 July 2024, for the reasons given in the Decision, the Tribunal ordered the appellant to pay the respondent $20,680.65.
For the following reasons, we have decided to grant leave to appeal, allow the appeal, and to remit the matter to the Tribunal.

Appellant's materials before the Appeal Panel

The appellant provided the following materials to the Appeal Panel.

Other documents filed by the respondent

On 8 October 2024, the respondent filed: 1. approximately 20 pages of submissions in response to the appellant's further material on appeal; and 2. her written submissions before the Tribunal.
As we have rejected the appellant's new materials, it is not necessary to summarise the respondent's response to those materials.

Documents before the Tribunal

It became apparent during the appeal hearing that the strongest ground of appeal was that the Decision was against the weight of the evidence. We explained that were we to allow the appeal, the matter could be reconsidered by the Appeal Panel, or remitted back to the Tribunal for a further hearing. One of the issues was that the the totality of the evidence before the Tribunal was not before the Appeal Panel.

Nature of an appeal

Section 80 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) sets out the basis upon which appeals from decisions of the Tribunal may be brought. That section states that an appeal may be made as of right on any question of law or with leave of the Appeal Panel on any other grounds (s 80(2)(b)).

A question of law

In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69, without listing exhaustively possible questions of law, the Appeal Panel considered the requirements for establishing an error of law giving rise to an appeal as of right. These included: 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 had been applied; 4. whether there was a failure to afford procedural fairness; 5. whether the Tribunal failed to take into account relevant (that is, mandatory) considerations; 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 make it.
These matters were recently expanded by the Appeal Panel Unique Commercial Group Pty Ltd v Cusumano [2024] NSWCATAP 204 where the Appeal Panel stated (references omitted): 32 To the above list [referring to the list in Prendergast extracted above] might be added the following (some of which are nuanced aspects of the categories in Prendergast): (1) Whether the Tribunal drew inferences that were not available from the facts as found (an extension of item 7 [of Prendergast]) … (2) Whether the construction of a statute or contract arrived at by the Tribunal at first instance was wrong in some identified way: … (3) Whether the Tribunal's decision was vitiated by bias, or a reasonable apprehension of bias, relates to and intersects with the fair hearing rule, and may encompass or be related to the procedural fairness question: … (4) Whether the Tribunal failed to respond to substantial, clearly articulated arguments based on established facts which may constitute a failure to accord natural justice, that is, procedural unfairness. Alternatively, it may also constitute a constructive failure to exercise jurisdiction: … (5) Whether the facts as found necessarily satisfied the statute or necessarily did not: … … 33 Plainly, the categories are not closed. 34 In addition, because the list in Prendergast has been extensively referred to and cited, it is important to clarify the following: (1) There is an important difference between wrongly applying the correct principles and applying the wrong principles. The former may not raise a pure question of law, but the latter does: … Applying the wrong principles evinces a misconstruction of the statute. (2) As set out in Prendergast, to say that considerations are "relevant" in the appellate context signifies that those considerations are mandatory having regard to the text and context of a relevant provision. Similarly, to suggest that a consideration is "irrelevant" signifies that it is prohibited by the subject‑matter, scope and purpose of the statute. These are factors in the exercise of a discretion: … .
In Prendergast, the Appeal Panel also stated at [12] in circumstances where the appellant was not legally represented, it is apposite for the Tribunal to approach the issue by looking at the grounds of appeal generally, as it is necessary for the Appeal Panel to determine whether a question of law has in fact been raised, subject to any procedural fairness considerations that might arise to the respondent.
We have undertaken that exercise, and are unable to discern any question of law raised in the appellant's materials.
Accordingly, the appellant requires a grant of leave to pursue its appeal.

Leave to appeal

Clause 12 of Sch 4 of the NCAT Act provides that, in an appeal from a decision of the Consumer and Commercial Division of the Tribunal, an Appeal Panel may grant leave to appeal only if satisfied that 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).
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 the Appeal Panel conducted a review of the relevant cases at [65]-[79] and concluded at 84 that: 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.
Even if an appellant establishes that they may have suffered a substantial miscarriage of justice in the sense explained above, the Appeal Panel retains a discretion whether to grant leave under s 80(2) of the Act. An appellant must demonstrate something more than that the Tribunal was arguably wrong: Pholi v Wearne [2014] NSWCATAP 78 at [32].

The Decision

It is appropriate to briefly summarise the Decision.
The first section of the Decision sets out the background to the Decision and a summary of the claim. The Decision states: 1. This is a dispute about a used 2013 model Ford Territory (Vehicle) which the applicant purchased from the respondent on 19-Apr-2023 for $17999 with an initial odometer reading of 159413. 2. The applicant seeks an order pursuant to s 79N of the Fair Trading Act 1987 (NSW) (FTA) for compensation of $20680.65. This amount is comprised of: (a) a refund of the purchase price - $17999; (b) a refund of a dealer fee charged by the respondent - $395; [c] compensation for costs incurred for third party mechanics to investigate and attempt to remedy faults with the Vehicle - $2286.65. 3. The basis for the claim is an allegation that the Vehicle, having experiences a mechanical failures [sic] - failure] referred to in these reasons, is not of acceptable quality as required by the consumer guarantee set out in s 54 of the Australian Consumer Law (ACL).
The Decision then sets out the evidence before it, states why it had jurisdiction to hear and determine a consumer clam, and then sets out the relevant law.
The Decision then sets out the respective positions of the parties which are summarised as follows: Applicant - 14. The applicant's position is set out in detail in her application and the Livermore Affidavit and elaborated on during the hearing. Briefly, the position is that within 3 weeks of purchase the Vehicle began to experience mechanical issues. By May-2023, it was experiencing periodic significant failures and since Aug-2023, it has been unusable and is at Brentech Automotive. The applicant emphasises that: (a) sales people from the respondent described the car before purchase as "in immaculate condition" and "like brand new" (see: Livermore Affidavit at [3]); (b) the car has not been involved in any collision since purchase; and (c) the damage to wiring, the computer, air conditioning and radiator as identified by Mr Sheather or Brentech Automotive in the invoice of 10-Oct-2023 are consistent with a collision. Respondent - 15. As with the applicant, the respondent's position is set out in detail in the documentary evidence. In summary, it is that: (a) On the basis of the PPSR Search and the eSafety Check, the Vehicle was in good working order at the time of sale; (b) The applicant has recourse to an aftermarket 12 month warranty; (c) The applicant has driven approximately 13000km since purchasing the Vehicle, this is inconsistent with a latent fault; (d) The applicant's early mechanical reports and similar did not identify any latent fault; and (e) The costs to remedy the identified fault are only $1408.41, as estimated in the quote from Sinclair Ford dated 07-May-2024.
The Decision then sets out the Tribunal's consideration and findings. Relevantly, it is stated that: 16. The consumer guarantee in s 54 of the ACL applies to the applicant's purchase of the Vehicle from the respondent. Having heard and considered the available evidence, I am satisfied on the balance of probabilities that the Vehicle is not of acceptable quality because it was neither free from defects, nor durable (see: ss 54(2)(a) and 54(2)(e)). It has been essentially undriveable since at least Aug-2023, if not earlier. 17. In reaching this conclusion, I have had regard to the matters set out in s 54(3), but in particular, the price of the Vehicle, the nature of the goods purchased and the representations made by the dealership about the quality of the Vehicle, including as set out at [3] of the Livermore Affidavit. I accept the applicant's sworn and affidavit evidence in preference to the respondent's evidence on this issue because I consider that: - The respondent has not denied making the representations set out at [3] in the Livermore Affidavit; - The applicant's position is more consistent with the independent mechanical evidence, in particular as set out in the Tax Invoice from Brentech Automotive dated 10-Oct-2023 and email from Mr Sheather (of Brentech) dated 22 -Sep-2023; - The respondent's evidence about the condition of the Vehicle at the time of sale is limited, and does not show any of the work which went into checking its condition; - Given the purchase price of the Vehicle, I consider that the applicant was reasonably entitled to have an expectation that the Vehicle would be safely capable of its ordinary use for a period longer than to Aug-2023; - There is simply no evidence to show that the applicant has negligently or deliberately caused or contributed to any damage to the Vehicle; - While the distance travelled after purchase is significant, it's clear that the applicant has raised issues with the Vehicle from a relatively short time after purchase and, having regard to the nature of those issues, I consider that it is more likely than not that the fault was latent at the time of purchase, and worsened through ordinary use after that time. … 19. Section 260 of the ACL sets out the circumstances where a failure to comply with a consumer guarantee is a major failure. Applying the principles in Safi v Heartland Motors Pty Ltd t/as Heartland Chrysler [2016] NSWCATAP 80 summarised at (99] - [102], I am satisfied that the Vehicle would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure. I accept the applicant's submissions that the respondent is liable for latent defects of the kind present in this case. It's not necessary to explore whether the respondent knew or ought to have known of the defects which gave rise to the eventual mechanical failure of the Vehicle. The respondent has not argued that the faults or defects were discoverable by reasonable diligence (see: Sutherland Shire Council v Heyman [1985] HCA 41; (1985) 157 CLR 424 at [56]) but for completeness I am not satisfied that there is any evidence to show the applicant could have identified the defects through reasonable diligence. 20. Having established both a failure to comply with s 54 of the ACL and that the failure is a major failure, the applicant is entitled to: (a) Reject the Vehicle (see: s 262(3)(a) of the ACL); and (b) Bring a claim against the respondent for certain damages (see: s 262(4) of the ACL). 21 I find that the respondent rejected the Vehicle in a conversation with a representative of the respondent on or around 22-Sep-2023, at around the same time as the email raising issues identified by Mr Sheather. Having regard to the nature of the fault (as initially intermittent), the nature of the goods (being something a person purchases infrequently, for use over a long period of time) and the ongoing discussions between the parties, including the respondent's earlier insistence that the Vehicle was perhaps affected by bad fuel, I consider that the Vehicle was rejected within a reasonable period of time. 22. I find that the remaining compensation sought by the applicant, as set out in the Livermore Affidavit at [32], are within the scope of damages recoverable pursuant to s 262(4) of the ACL and is supported by adequate evidence (including for the dealership fee and invoices from trades). 23. Having regard to the principle in s 79U(1) of the FTA, I consider that it is appropriate to make the orders sought by the applicant. The Vehicle has been unusable for an extended period of time and, relative to the cost of the Vehicle, the applicant has only sought to recover relatively modest expenses. (emphasis added)

Consideration

In our view the various grounds of appeal raised in this appeal can be considered in four broad groups.

Ms Taylor

The first group of grounds of appeal centre around Mr Taylor being a legal representative and that she did not disclose this to the Tribunal.
We see nothing in this ground of appeal, and would not grant leave to appeal. Ms Taylor told us during the appeal hearing, and we accept, that she was not a lawyer, being in fact a legal secretary for a firm of solicitors.
That said, we suggest that Ms Taylor in future avoid expressions like "legal representative" to describe her role or function. They are apt to mislead members of the public and cause confusion.

Decision not fair and equitable

The second group of grounds of appeal was that the Decision was not fair and equitable, or unjust.
This ground was stated in various ways, as set out at [6]. There are three broad themes alleged by the appellant: 1. there is no warranty for a 10 year old vehicle; 2. any damage to the vehicle occurred during the respondent's ownership; 3. there was no "hard" evidence that the vehicle had any damage prior to purchase.

Decision against the weight of the evidence

The third group of grounds of appeal can be summarised as that: 1. the Decision was against the weight of the evidence; or that 2. the Tribunal failed to take into account relevant evidence.
Some of these matters overlap with the second group of grounds of appeal, and we propose to deal with these two grounds together.

Fresh evidence

This fourth group of grounds of appeal relates to the new evidence sought to be relied on by the appellant.
As we have rejected the new evidence for the reasons given above, there is no need to consider this group of grounds of appeal.
We turn to consider the second and third grounds of appeal.

The Decision was not fair and equitable and against the weight of the evidence

In reaching its conclusions, the Tribunal had before it the following relevant independent evidence: the invoices of Brentech Automotive (Brentech) respectively dated 28 June 2023, 11 July 2023 and 10 October 2023 relied on by the respondent, and the e-Safety Check Report dated 11 April 2023 and the email of PSC Racing & Automotive dated 29 February 2024 (PSC Email) relied on by the appellant.
These documents state: Brentech 28 June 2023 Fit and balance 2 new tyres. Check wipers, wiper mechanism worn, will need to replace. Carry out diagnostic scan, found fuel rail pressure code. Clear and reset, customer to monitor and advise. Brentech 11 July 2023 Replace wiper assembly and arms. Check for engine light coming on, High fuel rail pressure problem, not there all the time. Have replace fuel filter, carried out fuel system clean and added injector cleaner to tank. Customer to monitor and may need further testing? Brentech 10 October 2023 VEHICLE WAS TOWED IN NOT STARTING, NOT CRANKING, CARRIED OUT DIAGNOSTIC SCAN OF VEHICLE, NO COMMUNICATION WITH ECU CHECKED ALL FUSES AND RELAYS, COULD JUMP STARTER RELAY TO GET VEHICLE TO CRANK. IMMOBOLISER WARNING LIGHT IS FLASHING NOT ALLOWING ENGINE TO START. CARRIED OUT DIAGNOSTIC FLOW CHART TESTS, PUT VEHICLE ON HOIST AND NOTICED DAMAGE FROM IMPACT AT FRONT OF VEHICLE. A/C CONDESSER AND INTERCOOLER HAVE BEEN PUSHED UP AGAINST RADIATOR, INTERCOOLER MOUNT IS BROKEN, REQUIRES NEW INTERCOOLER AND CROSS MEMBERS TO BE REPAIRED. (PANEL BEATER) MAIN ENGINE LOOM RUNS ACROSS THE FRONT OF VEHICLE AND HAS BEEN CRUSHED BY THE IMPACT BETWEEN CROSS MEMBER AND INTERCOOLER/RADIATOR. REMOVED A/C CONDENSOR, RADIATOR AND INTERCOOLER, STRIPPED LOOM, FOUND WIRES CRUSHED. SWAPPED ECU WITH ANOTHER CAR AND IT NOW COMMUNICATES. NEED NEW ECU TO CONTINUE DIAGNOSTICS. NOTE - VEHICLE HAS COME INPREVIOUSLY FOR GOING INTO LIMP HOME MODE RANDOMLY AS WELL AS FLASHING WARNING LIGHTS, AND FUEL ISSUES. MY OPINION IS THAT THE IMPACT AT THE FRONT HAS DAMAGED LOOM AND CAUSED ECU PROBLEMS? WILL NEED NEW ECU AT MINIMUM TO CONTINUE. PSC Email We at PSC Racing provided road worthy certificates for all of On Four Wheels motor vehicles they have sold. We inspected the Ford Territory on the 11/4/23 for a road worthy (AR8611281) and during this inspection we inspected mechanical and body conditions whilst being on the hoist. No issues were found nor any damages to body or under body noticed during the 45 minute inspection. Vehicle passed the road worthy inspection with no issues. On the 27th of February Sam the manager of On Four Wheels forwarded photos that the purchaser had sent him via email stating it was previously damaged prior to purchase. He also sent a copy of an invoice by Brentech Automotive 10/10/23 (12823 invoice) stating there were issues with wiring and was damaged in the front area of the vehicle that had caused it to fail. Also the invoice states that the vehicle has travelled almost 13000 kilometres since purchased in April 23. There is no way the vehicle can travel that mileage if there was an existing problem when purchased. We believe that the purchaser has done damage to the vehicle whilst in their possession and them living in a rural area (we were advised by Sam) would have been a reason for the occurrence. This issue that has been noted on invoice was not evident whilst our inspection was carried out and for the record On Four Wheels does not sell vehicles that have been damaged prior. On Four Wheels should not be accountable for a refund to the customer according to the facts that have been provided by Sam".
We note that the respondent asserted to the Tribunal that the vehicle had not been in a collision since she purchased it, but that the Brentech invoice of 10 October 2023 is consistent with there having been a collision, the inference being that collision took placed before the respondent purchased the vehicle. Indeed, the Tribunal found that there was no evidence to show that the applicant had negligently or deliberately caused or contributed to any damage to the Vehicle.
We have concerns about the Tribunal's finding that "The respondent's evidence about the condition of the Vehicle at the time of sale is limited, and does not show any of the work which went into checking its condition". Our concern is that the Tribunal in our view gave insufficient weight to the PSC Email, and indeed appears to have given no weight to the PSC Email where the author states: We inspected the Ford Territory on the 11/4/23 for a road worthy (AR8611281) and during this inspection we inspected mechanical and body conditions whilst being on the hoist. No issues were found nor any damages to body or under body noticed during the 45 minute inspection. Vehicle passed the road worthy inspection with no issues.
We have the same concerns with the Tribunal's finding that "There is simply no evidence to show that the applicant has negligently or deliberately caused or contributed to any damage to the Vehicle". We consider that the Tribunal's inferential finding that the damage to the engine occurred prior to the respondent's purchase of the Vehicle fails give any weight at all to the PSC Email.
Given those conclusions, we do not think it was open to the Tribunal to conclude that "the fault" (and we note that "the fault" was not specified in clear terms by the Tribunal) was latent at the time of purchase, and worsened through ordinary use after that time.
In those circumstances, we consider that there has been an injustice which is reasonably clear, plain and readily apparent which is central to the Tribunal's decision, so that it would be unjust to allow the finding to stand.
We also consider that the Tribunal's Decision in those circumstances to be neither fair nor equitable.
For these reasons, we consider that leave to be appeal should be granted on this point, and the appeal allowed.

Appropriate orders

We indicated during the hearing that, were the appeal allowed, a number of courses might follow, including the Appeal Panel redetermining the matter for itself or the matter being remitted to a differently constituted Tribunal.
As we consider that the parties should be allowed to cross-examine the other on the matters the subject of these reasons should they elect to do so, it is appropriate that the matter be remitted to the Tribunal. It is our view that the reconstituted should determine the matter on the same evidence that was before the Tribunal in June 2024.

Orders

The Appeal Panel orders: 1. Leave to appeal is granted. 2. The appeal is allowed. 3. The decision of the Tribunal of 28 June 2024 is set aside. 4. The proceedings are remitted to the Consumer and Commercial Division of the Tribunal for hearing and redetermination by a differently constituted Tribunal on the evidence that was before the Tribunal at first instance

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: 13 January 2025

At a glance

Court

Decision date

Source

Judgment (21 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (15)