LSH Auto (Sydney) Pty Ltd v Sherman

REASONS FOR DECISION

1. This appeal is concerned with the question whether, when it supplied a new Mercedes Benz passenger motor vehicle to the respondent, Mr Sherman, the appellant car dealer ("LSH") complied with the consumer guarantee provided in s 54 of the Competition and Consumer Act 2010 (Cth), Sch 2, as applied as a law of NSW ["ACL (NSW)"], namely, that the car was of acceptable quality.
2. Mr Sherman alleged that the vehicle's proximity sensor system and speed advisory system were faulty, which individually or in combination amounted to the vehicle not being of acceptable quality within s 54(2) of the ACL (NSW).
3. In basic terms, the speed advisory system in this vehicle consists of a forward-facing camera which, with the aid of on-board computers and software, attempts to recognise speed advisory signs and notify the driver of any speed advised by such signs by an indication on the head-up display and/or dashboard of the vehicle.
4. The proximity sensor system consists of a number of ultra-sonic sensors situated at various places around the vehicle. The system is designed to detect objects in the vehicle's proximity and with which it may collide.
5. In a decision dated 12 February 2020 the Tribunal found that LSH had not complied with that guarantee and made orders to the effect that LSH was to supply a replacement Mercedes Benz E53 AMG 4Matic Cabriolet vehicle to Mr Sherman.
6. Two replacement Mercedes Benz E53 AMG 4Matic Cabriolet vehicles were subsequently offered to Mr Sherman. He did not accept them because he said they did not have exactly the same colour, trim and options as his original vehicle.
7. An appeal from that decision (referred to in these reasons as the First Appeal) was upheld - LSH Auto (Sydney) Pty Ltd v Sherman [2020] NSWCATAP 246. The Appeal Panel held that the Tribunal erred on a question of law and directed that the appeal be dealt with by way of a new hearing conducted by an Appeal Panel.
8. This is the decision resulting from that new hearing.
9. There was no dispute between the parties that neither the proximity sensor system nor the speed advisory system were foolproof systems, nor would they operate perfectly in all circumstances. Both parties accepted the two systems had inherent limitations to which we will refer later in these reasons, although the parties differed as to the nature and extent of those limitations.
10. The question at the heart of this case is whether the evidence established that the perceived failures of these systems as observed by Mr Sherman's witnesses amounted to the vehicle failing to meet the standard of acceptable quality per s 54(2) of the ACL (NSW).
11. In our opinion Mr Sherman did not establish on the balance of probabilities that the nature and extent of the perceived failures in these two systems was greater than what may be expected as a result of their inherent limitations, and did not arise from any faults or defects in either system, and thus did not establish that the vehicle failed to meet the standard of acceptable quality per s 54(2) of the ACL (NSW). It follows that, in our opinion, Mr Sherman did not establish that LSH had failed to comply with the consumer guarantee as alleged.

Procedural Background

1. The relevant factual background was described by the previous Appeal Panel in the First Appeal as follows, a description which we gratefully adopt: "1. In February 2019, the respondent, Mr Sherman, bought a new luxury vehicle (a Mercedes AMG E53 Cabriolet), from the appellant, who operates a motor vehicle dealership. The cost was approximately $200,000.00. 2. Mr Sherman encountered ongoing difficulties with the operation of the vehicle, including problems with the operation of the parking (proximity) sensors and the speed limit indicator. The vehicle also braked or slowed on occasion without apparent reason. There were faults in the cosmetic appearance of the vehicle, including a paint chip on the bonnet and a dent in the body work, together with other faults which have been resolved or taken on no significance in this appeal. 3. After several attempts to have the faults resolved with the appellant, Mr Sherman commenced proceedings in the Tribunal and, in September 2019, consent orders were made after a conciliation conference wherein the appellant consented to orders that it collect, inspect and repair the vehicle in respect of the identified faults ("the First Decision"). The orders provided for the parties to have leave to renew the proceedings if required. 4. The appellant collected the vehicle from the respondent on about 10 October 2019 to inspect and perform work on the vehicle. It subsequently returned the vehicle to the respondent. The respondent continued to experience problems with the vehicle's advisory speed warnings and parking sensors. 5. In November 2019, the respondent renewed the proceedings in the Consumer and Commercial Division. 6. In the renewed proceedings, the Tribunal made directions for the respondent to produce the vehicle to the appellant so that it could undertake any further testing and the preparation of any reports which it may require. 7. The matter proceeded to hearing on 12 February 2020. 8. At the hearing, the appellant relied only upon diagnostic program (XENTRY) reports and the vehicle's owner's manual. 9. The respondent relied on his own evidence and a report by a Mr Senz, an expert who had prepared a report in respect of the remaining faults with the vehicle. 10. Mr Senz was not required for cross-examination by the appellant. 11. The fact that several of the identified faults remained in the vehicle does not appear to have been disputed. 12. The Tribunal ordered that the respondent return the vehicle, and have it replaced with another vehicle of the same type. ("the Decision")."
2. For reasons which do not need detailed repeating here, the previous Appeal Panel held that the Tribunal erred in making its decision on a question of law and directed that the appeal be dealt with by way of a new hearing.
3. Suffice to say that the previous Appeal Panel described the error of law in the Tribunal's reasons as follows: "58. An order for the return or replacement of the vehicle on the basis that s 260(e) of the ACL is engaged and there has been a major failure on the basis of safety, must be predicated on a finding that the vehicle, is 'unsafe'. ... 59. The question of whether the vehicle was unsafe was, thereby, a statutory condition which needed to be determined before the Tribunal ordered that the vehicle be replaced on the basis that it did so. 60. The Tribunal made no specific finding in its reasons that the vehicle was unsafe. …"
4. The previous Appeal Panel held (at [62]) that in the absence of a finding that the vehicle was unsafe, the Tribunal had failed to: "… turn its mind to the correct question before making its orders, and thereby fell into error on a question of law."
5. In the First Appeal, and on this new hearing, there was no contest that the relevant conditions for the application of the ACL (NSW) were met, in that Mr Sherman was a consumer who acquired the vehicle for personal, domestic, or household use, LSH was a supplier, the claim was for the supply of goods in NSW and Mr Sherman's claim was brought within time. There was also no dispute that we had jurisdiction to hear the claim pursuant to the provisions of the Fair Trading Act 1987 (NSW).
6. Insofar as the ACL (NSW) allows for the rejection of goods by a consumer, there was (and is) no contest that Mr Sherman purported to reject the vehicle with notice of that rejection having been given to LSH during the rejection period, and no contest that Mr Sherman sought replacement of the vehicle.
7. This new hearing was directed by the previous Appeal Panel to be undertaken on the basis of the same evidence which had been given to the Tribunal at first instance and granted leave to the parties to adduce some limited new evidence.
8. The grant of leave for the adducing of new evidence arose because during the First Appeal LSH raised, for the first time, a defence to the effect that Mr Sherman was not entitled to reject the vehicle. This defence was said to arise from s 262(1)(c) of the ACL (NSW) which says that a consumer is not entitled, under s 259, to notify a supplier of goods that the consumer rejects the goods if: … the goods were damaged after being delivered to the consumer for reasons not related to their state or condition at the time of supply.
9. That defence arose out of the following facts. There was no dispute that in March 2019 Mr Sherman parked his car in a designated open-air car space which had a concrete wheel stop preventing vehicles proceeding forward past the wheel stop. Mr Sherman said he parked without incident, but when he returned to his vehicle and reversed out of the car space the front spoiler (or bumper) of his car contacted the concrete wheel stop and was damaged.
10. The previous Appeal Panel disallowed the raising of that issue for the first time on the hearing of the First Appeal, but said it would allow that defence to be raised on this new hearing and would grant leave for evidence to be given in relation to that issue.
11. In that regard, and in directing that the appeal be conducted by way of a new hearing, the previous Appeal Panel said: "78. Of course, that is a new hearing of the renewal application only. In conducting that hearing, we will need to consider the issues which were relevant to the Tribunal when it made the Decision, as outlined above. 79. In respect of any further evidence, there was no apparent challenge in the proceedings below that the damage to the front spoiler of the vehicle was repaired. In submissions, the respondent says it was repaired by an authorised Mercedes Benz vehicle repairer. Notwithstanding that, as the respondent was not challenged on this below, we will allow fresh evidence to be given and tested on this issue and the issue of whether the damage was caused by reasons not related to its state or condition at the time of supply, about which the respondent made a bare assertion below, and the Tribunal made no finding."
12. Some uncertainty arises out of the way the case was conducted before the Tribunal and the previous Appeal Panel, and out of the paragraphs quoted above, because there is authority in the Tribunal that the substantive merits of a claim are not reconsidered in renewal (or renewed) proceedings, the proceedings being limited to whether the Tribunal makes other orders (or refuses to make other orders) in light of the original orders not having been complied with - Akratos v Papadopoulos [2016] NSWCATAP 139 at [36], followed in Blessed Sydney Constructions Pty Ltd v Vasudevan [2018] NSWCATAP 98.
13. That limitation was held to arise from the terms of cl 8(4)(a) of Schedule 4 of the Civil and Administrative Tribunal Act 2013 (NSW) (the "NCAT Act"). Cl 8 says: 8. Renewal of proceedings in respect of certain Division decisions (1) If the Tribunal makes an order in exercise of a Division function in proceedings, the Tribunal may, when the order is made or later, give leave to the person in whose favour the order is made to renew the proceedings if the order is not complied with within the period specified by the Tribunal. (2) If an order has not been complied with within the period specified by the Tribunal, the person in whose favour the order was made may renew the proceedings to which the order relates by lodging a notice with the Tribunal, within 12 months after the end of the period, stating that the order has not been complied with. (3) The provisions of this Act apply to a notice lodged in accordance with subclause (2) as if the notice were a new application made in accordance with this Act. (4) When proceedings have been renewed in accordance with this clause, the Tribunal - (a) may make any other appropriate order under this Act or enabling legislation as it could have made when the matter was originally determined, or (b) may refuse to make such an order.
14. In this case, there was no hearing of the substantive merits of the claim as the original orders made by the Tribunal (in relation to which the renewal application was made) were made by consent at a conciliation hearing before the Tribunal, and were not made by the Tribunal after a contested hearing on the merits.
15. Further, Cl 8 of Sch 4 requires non-compliance with an order and it is not clear to us what (consent) order was not complied with. In addition, it is not clear to us that Mr Sherman was entitled to reject the two proffered replacement vehicles on the basis he did given, on one interpretation, the Tribunal's order did not mean that an identical vehicle had to be proffered.
16. Nevertheless, we do not need to decide those matters. It is clear that the parties desired to have a hearing before us (and before the original Tribunal hearing the renewed proceedings) on the substantive merits of their dispute, and both parties agreed that we should decide those substantive merits. Accordingly, we shall do so noting that s 36 of the NCAT Act provides that the guiding principle for the NCAT Act and the procedural rules, in their application to proceedings in the Tribunal and Appeal Panel, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings, and noting that in Moloney v Taylor [2016] NSWCA 199 the Court of Appeal held that the NCAT should conduct itself with minimum formality and should reach decisions according to the substantive merits of the case and not by reference to legal form or technicalities.
17. Therefore, in relation to this substantive hearing, the evidence we have considered is the evidence which had been led before the Tribunal, and the further evidence which the previous Appeal Panel granted leave to the parties to adduce on this new hearing.

The ACL (NSW)

1. The relevant sections of the ACL (NSW) are ss 54, 259, 260, 262 and 263 of the Commonwealth Act which are part of the law of NSW by reason of s 28 of the Fair Trading Act 1987 (NSW) ("FTA").
2. Section 54 relevantly says: 54 Guarantee as to acceptable quality (1) If: (a) a person supplies, in trade or commerce, goods to a consumer; and (b) … there is a guarantee that the goods are of acceptable quality. (2) Goods are of acceptable quality if they are as: (a) fit for all the purposes for which goods of that kind are commonly supplied; and (b) … (c) free from defects; and (d) safe; and (e) … as a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods), would regard as acceptable having regard to the matters in subsection (3). (3) The matters for the purposes of subsection (2) are: (a) the nature of the goods; and (b) the price of the goods (if relevant); and (c) any statements made about the goods on any packaging or label on the goods; and (d) any representation made about the goods by the supplier or manufacturer of the goods; and (e) any other relevant circumstances relating to the supply of the goods.
3. Section 259 relevantly says: 259 Action against suppliers of goods (1) A consumer may take action under this section if: (a) a person (the supplier) supplies, in trade or commerce, goods to the consumer; and (b) a guarantee that applies to the supply under Subdivision A of Division 1 of Part 3-2 (other than sections 58 and 59(1)) is not complied with. (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) … (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) ...
4. Section 260 relevantly says: 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 … (e) the goods are not of acceptable quality because they are unsafe.
5. Section 262 relevantly says: 262 When consumers are not entitled to reject goods (1) A consumer is not entitled, under section 259, to notify a supplier of goods that the consumer rejects the goods if: (a) … (b) … (c) the goods were damaged after being delivered to the consumer for reasons not related to their state or condition at the time of supply; …
6. Section 263(4) of the ACL (NSW) says that if the consumer rejects the goods, the supplier must, in accordance with an election made by the consumer refund any money paid by the consumer for the goods; and an amount that is equal to the value of any other consideration provided by the consumer for the goods; or replace the rejected goods with goods of the same type, and of similar value, if such goods are reasonably available to the supplier.
7. The relevant principles to apply in a case such as the present were summarised by Derrington J in Vautin v By Winddown (No 4) [2018] FCA 426; (2018) 362 ALR 702 as follows: "[142] Mr Vautin asserts that the existence of the construction defects in the sandwich core panels of Revive means that the vessel is not of an "acceptable quality" within the meaning of the guarantee imposed by s 54 of the ACL. In determining whether the guarantee in that section is contravened the following matters are relevant: (a) The test as to whether goods are of an "acceptable quality" is an objective one; being taken from the perspective of a "reasonable consumer" (APS Satellite Pty Ltd (formerly known as Sky Mesh Pty Ltd) v Ipstar Australia Pty Ltd [2016] NSWSC 1898 (APS Satellite Pty Ltd) at [57]; Merck Sharp & Dohme (Australia) Pty Ltd v Peterson (2011) 196 FCR 145; 284 ALR 1; [2011] FCAFC 128). (b) The question for the "reasonable consumer" is whether the goods in question have the identified qualities enumerated in 54(2) to an "acceptable standard". This requirement is derived from the words "as a reasonable consumer … would regard as acceptable". (c) The "acceptable standard" is used as the yardstick against which the qualities of the goods are to be measured. It is ascertained by a consideration of the matters referred to in s 54(3); the nature of the goods, their price, any statement made about the goods on packaging or labels, any representations made about the goods by the supplier or manufacturer, and any other circumstance relating to their supply. (d) It is necessary the goods have all of the qualities identified in s 54(2) to the ascertained acceptable standard. Those qualities are that the goods are fit for all the purposes for which goods of that kind are commonly supplied, acceptable in appearance and finish, free from defects, safe and durable. (e) In the assessment of whether the goods meet that relevant standard, the reasonable consumer is taken to be fully acquainted with the state and condition of the goods (including any hidden defects of the goods). (f) If the goods supplied do not have all of the identified qualities to the acceptable standard, they will not be of an "acceptable quality". [143] In compendious terms, the issue is whether, objectively, the goods supplied (when taking into account their actual quality including any latent defects) are, to an acceptable standard, fit for all the purposes for which goods of that kind are commonly supplied, acceptable in appearance and finish, free from defects, safe and durable when measured by a standard which reflects the nature of the goods, their price, statements about the good as per their packaging, representations made about the goods and any other relevant circumstance. In Prestige Auto Traders Australia Ltd v Bonnefin [2017] NSWSC 149 at [132] N Adams J identified the manner in which s 54 should be applied in the following way: "The relevant test in s 54(2) of the ACL (NSW) of whether or not goods are of "acceptable quality" is an objective one based on whether a reasonable consumer who was aware of the "defects" in the goods at the time of the supply would have considered them to be of acceptable quality. There was no issue taken that the determination of what is objectively reasonable for a consumer to expect is to be made taking into account the relevant information known as at the time of the trial, including "after-acquired knowledge": Medtel Pty Ltd v Courtney (2003) 130 FCR 182; 198 ALR 630; [2003] FCAFC 151 at [66] and [70].'"
8. In Australian Competition and Consumer Commission v Jayco Corporation Pty Ltd [2020] FCA 1672 Wheelahan J said: "[25] … The standards under s 54(2) include that goods will be fit for all purposes for which goods of that kind are commonly supplied. This general standard of fitness for purpose is not dependent upon the consumer communicating any intended purpose to the supplier, or relying upon the supplier's skill or judgment. And, in relation to the general standard, it does not suffice that the goods will be fit for only some of those purposes. [26] The standard of acceptable quality in s 54(2) has as its reference point a construct, namely the objective standard of a reasonable consumer fully acquainted with the state and condition of the goods, including any hidden defects of the goods. The reasonable consumer sits with an array of other hypothetical persons who have been recruited by the law and by reference to whom objective standards are evaluated: see, Healthcare at Home Ltd v The Common Services Agency [2014] UKSC 49; 4 All ER 210 at [1]-[4] (Lord Reed JSC). Such a person has been described as an anthropomorphic conception of justice that is and must be the court itself: see Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696 at 728 (Lord Radcliffe). [27] The hypothetical question whether the reasonable consumer would have regarded the quality of the goods as acceptable is to be determined at the time of supply. However, the reference in s 54(2) to hidden defects has the consequence that for the purposes of determining that question, the reasonable consumer may be acquainted with information known at the time of trial: cf, Medtel Pty Ltd v Courtney [2003] FCAFC 151; 130 FCR 182 at [70] (Branson J, Jacobson J agreeing). The standard of acceptable quality prescribed by s 54(2) is not absolute, or a standard of perfection. It is tempered by what a reasonable consumer would regard as acceptable having regard to the several matters in s 54(3). These matters render the standard of acceptable quality elastic, and context specific: Contact Energy Ltd v Jones [2009] 2 NZLR 830 at [95] (Miller J). The significance of the components of the guarantee of acceptable quality will therefore vary with the circumstances of each case."

The Fair Trading Act

1. The jurisdiction to determine ACL (NSW) claims is conferred on the Tribunal by Part 6A of the FTA. There is no dispute between the parties that the Tribunal has jurisdiction to hear this claim, and we are satisfied that such jurisdiction exists.
2. Relevantly, and in relation to relief, the FTA provides in s 79N remedies that are in addition to the remedies referred to in the provisions of the ACL (NSW) referred to above.
3. Section 79N says: 79N Orders in favour of claimant (cf CC Act 1998, s 8 (1)) In determining a consumer claim wholly or partly in favour of a claimant, the Tribunal may, subject to this Division, make any one or more of the following orders that it considers appropriate - (a) an order that requires a respondent to pay to the claimant a specified amount of money, (b) an order that requires a respondent to perform specified work in order to rectify a defect in goods or services to which the claim relates, (c) an order that requires a respondent to supply to the claimant specified services other than work, (d) in the case of a claim for relief from payment of money - an order declaring that a specified amount of money is not due or owing by the claimant to a respondent, (e) an order that requires a respondent to deliver to the claimant goods of a specified description, (f) an order that requires a respondent to return to the claimant specified goods which are in the possession or under the control of that respondent, whether the property in the goods has passed or not, (g) an order that requires a respondent to replace goods to which the claim relates, (h) an order that requires a respondent to refund all or part of the purchase price of specified goods that are in the possession (or under the control) of the claimant and the claimant to return all or part of those goods to the respondent (whether the property in the goods has passed or not).

Other Principles

1. Being a civil case, factual disputes in this case are to be resolved on the balance of probabilities.
2. In relation to whether a fact is proved on the balance of probabilities, a finder of fact (such as us) must feel an actual persuasion of the existence of the fact. As to "actual persuasion" McDougall J, with whom McColl and Bell JJA agreed, said in Nguyen v Cosmopolitan Homes [2008] NSWCA 246: "[44] A number of cases, of high authority, insist that for a tribunal of fact to be satisfied, on the balance of probabilities, of the existence of a fact, it must feel an actual persuasion of the existence of that fact. See Dixon J in Briginshaw v Briginshaw (1938) 60 CLR 336. His Honour's statement was approved by the majority (Dixon, Evatt and McTiernan JJ) in Helton v Allen (1940) 63 CLR 691 at 712. [45] Dixon CJ put the matter in different words, although to similar effect, in Jones v Dunkel (1959) 101 CLR 298 at 305 where his Honour said that "[t]he facts proved must form a reasonable basis for a definite conclusion affirmatively drawn of the truth of which the tribunal of fact may reasonably be satisfied". Although his Honour dissented in the outcome of that case, the words that I have quoted were cited with approval by the majority (Stephen, Mason, Aickin and Wilson JJ) in West v Government Insurance Office of NSW (1981) 148 CLR 62 at 66. See also Stephen J in Girlock (Sales) Pty Ltd v Hurrell (1982) 149 CLR 155 at 161-162, and Mason J (with whom Brennan J agreed) in the same case at 168."

The Respondent's Evidence

1. We shall now set out the evidence that was adduced by the parties, interspersed from time with agreed or incontrovertible facts, or findings, where convenient to do so. As the respondent is effectively the plaintiff or applicant, we shall order these reasons on that basis.

Mr Sherman

1. Mr Sherman tendered a transcript of his oral evidence given before the Tribunal, his original undated written statement, two statutory declarations declared on 10 December 2020 and a statutory declaration declared on 25 February 2021. A number of documents were annexed to the statement and statutory declarations. Mr Sherman was cross-examined.
2. Mr Sherman said that in February 2019 he purchased a new luxury vehicle (a Mercedes AMG E53 Cabriolet), from LSH, which operates a motor vehicle dealership. The purchase price of the vehicle was approximately $204,000.00.
3. Mr Sherman had several complaints about the vehicle which commenced shortly after he took delivery of it, but only two areas of complaint were pressed on this new hearing in relation to the ACL (NSW) guarantee, those two being allegations of a faulty proximity sensor system and a faulty speed advisory system.
4. Mr Sherman said that on 12 March 2019 he parked on the street, nose to curb, being very careful. He had parked in that area many times previously. He parked without incident and heard no sensor alarms or warnings from the vehicle.
5. After a time, he returned to the vehicle and reversed out of the parking spot. He said that the front spoiler of his vehicle caught on a cement wheel stop beneath the front of the motor vehicle (and being forward of the front wheels) and pulled the spoiler almost totally off the vehicle. He heard no sensor alarms or warnings from the vehicle at any time when he first parked or whilst reversing.
6. He denied accelerating fast when he reversed and denied reversing at speed. He denied the nose of the car dropped or dipped (towards the ground and wheel stop) when he reversed the vehicle.
7. Mr Sherman said that the damage to the spoiler was occasioned because of defective proximity sensors in the vehicle in the sense that the sensors did not warn of the proximity of the wheel stop to the spoiler.
8. The vehicle was taken to Parramatta Smash Repairs and the spoiler repaired.
9. In his written statement Mr Sherman said that the proximity sensors (which he called movement sensors) seemed to go off randomly. He complained of this several times in emails to LSH. Mr Sherman said that LSH inspected the vehicle, performed a systems upgrade, but Mr Sherman said the problems persisted.
10. Mr Sherman annexed to his statement a number of emails he sent to LSH and other documents.
11. No mention of the proximity sensors is made in his first email annexed to his statement, namely the email dated 28 February 2019.
12. On 28 May 2019 Mr Sherman emailed LSH and said "parking sensors as per previous email …" but that "previous email" was not tendered, and we are unaware of its contents.
13. On 30 May 2019 Mr Sherman emailed LSH and said: "As you can see the drivers (sic) sensor is going off and yet there is nothing there. This concerns me as they didn't work when the front guard was damaged and I am very concerned about trusting them. You have told me I can trust these but I am not convinced!!!"
14. According to the email, there were attached to that email several photographs and other documents, but those photographs and documents were not tendered.
15. On 28 June 2019 Mr Sherman emailed LSH and said that the car had been troublesome from the start with, amongst other things, front spoiler issues, proximity sensor issues and speed zone issues (which relates to the speed advisory system).
16. On 4 July 2019 LSH emailed Mr Sherman and said that a software update had been carried out on the Command unit. It said that the parking (proximity) sensors had been checked and were working fine.
17. On 8 July 2019 LSH emailed Mr Sherman and said, amongst other things, that their service team had investigated Mr Sherman's concerns regarding the cameras and sensors and had been unable to find a fault.
18. On 23 July 2019 Mr Sherman emailed LSH saying that, as they could see by "these photos" (the photos were not tendered), the proximity sensors were still not working correctly. He also said that the advisory speeds produced by the speed advisory system illuminated on the dash were totally incorrect and randomly offered an array of incorrect speed "areas" (sic).
19. On 5 August 2019 Mr Sherman emailed LSH and said that the speed zones indicated by the car were totally inaccurate and random. He said he had just come over the Gladesville Bridge and the vehicle's speed advisory system was saying that the speed limit in that area was 40 kph when in fact it was 70 kph.
20. The vehicle was, as previously arranged between the parties, collected the following day for examination and repairs (if necessary) by LSH.
21. On 19 August 2019 Mr Sherman emailed LSH to say that when driving that morning at 6:45 am on Huntleys Point Road, Huntleys Point, the speed advisory system showed 40 kph when the speed limit for that area was 50 kph.
22. On 22 August 2019, a Thursday, Mr Sherman emailed LSH to say that on the previous Tuesday the speed advisory system had indicated a speed limit of 40, 60, 70, 40 and 60 kph along Victoria Road when the zone speed limit for that area was 60 kph.
23. The email also said that on a drive to the airport (on an unspecified date, on an unspecified road and at an unspecified time) the speed advisory system had indicated a speed limit of 40 kph when the zone speed limit for that area was 70 and 80 kph.
24. On 26 August 2019 LSH emailed Mr Sherman to say that LSH was satisfied that the concerns raised by Mr Sherman had been addressed. Later that day LSH again emailed Mr Sherman to say that the speed advisory system may not always recognise signs dependent upon various ambient and sign conditions.
25. Mr Sherman responded by email that same day raising a number of alleged defects with the vehicle including that the proximity sensors were not going off at all as allegedly observed by LSH's driver who had recently collected the vehicle from Mr Sherman.
26. On 9 September 2019 Mr Sherman commenced proceedings against LSH in the Tribunal.
27. On 19 September 2019 Mr Sherman emailed LSH to say that on that day the speed advisory system did not function properly because the notification of the advised speed vanished completely (presumably meaning it vanished from the head-up display). The email continued to say that this happened frequently. Mr Sherman said that the speed advisory system would advise a 40 kph speed limit on Victoria Road, Drummoyne, when the speed limit was 60 kph. He said the same thing occurred along Lyons Road, Drummoyne. He said that the speed advisory system finally acknowledged the school zone as "Temporary 40", this area often being 40 kph, temporary 40 kph, 60 or 70 kph, but the speed advisory system was inaccurate with regards to school zone times. He said that the front side parking sensor went "berserk" with nothing around "for miles" when he turned onto the parking apron at his home.
28. On 24 September 2019, the Tribunal made orders in the proceedings commenced by Mr Sherman with the consent of the parties. These orders were made at a conciliation hearing undertaken by the Tribunal with the parties, and not as a result of a contested hearing. The orders made were: 1. The applicant will make available for collection on 48 hours' notice in writing, his vehicle being a Mercedes [Registration redacted] for the respondent to investigate and inspect the vehicle. 2. The applicant will notify the respondent in writing or by text / SMS or email when and where it can be collected. 3. The respondent will provide the applicant with an equivalent vehicle for the applicant's personal use, pending the return of his vehicle. 4. The respondent will have a period 21 days to inspect the vehicle from the date of collection and in particular for the following named concerns: a. Random speed display b. Sensors not responding and randomly responding c. Underdash heating not working d. Concern with using auto functions for parking and cruise control. 5. The respondent will carry out such repairs as might be necessary and at its' own expense during the period of 21 days, or such longer period as may be reasonably agreed between them. 6. Either party may seek to renew these proceedings on or before 10 November, 2019, in the event these orders are not complied with (or) the applicant remains of the view that the vehicle requires further repairs.
29. The vehicle was picked up by LSH shortly thereafter and later returned to Mr Sherman about three weeks later.
30. When the car was returned to Mr Sherman, he drove the car in the company of a Mr Shea, apparently an employee of LSH who had delivered the car to Mr Sherman that day, and said that the "car failed miserably as per my email to them".
31. On 31 October 2019 Mr Sherman emailed LSH and said that, as Mr Shea would attest, the car failed miserably. He said that there were numerous errors with the speed advisory system, including it disappearing entirely twice and reading differently in opposite directions through the same school zone during a half hour drive. He said that the proximity sensor on the right-side front door/guard went off in the driveway as usual. He said he even opened the door to show the employee there was nothing near the car: front, rear and either side.
32. Mr Shea did not give evidence in the proceedings. He was (we infer) an employee of LSH. There was no explanation why he did not give evidence and accordingly we infer that his evidence would not have assisted LSH's case.
33. Mr Sherman said in his statement that he had received extracts of the Mercedes Benz manual from LSH as to why, in some circumstances, some functions may not work. The particular functions were not identified, but we infer from the context in which this evidence was given that Mr Sherman was intending to include in that description the proximity sensors and the speed advisory system.
34. Mr Sherman said that he clearly appreciated and understood that in heavy weather (like snow, dust storms etc) or when a road sign had been damaged that there may be the occasional misread or fault, but this was clearly not the case with this vehicle in his opinion.
35. On 6 November 2019 Mr Sherman filed his Renewal of Proceedings Application.
36. On 18 November 2019 Mr Sherman emailed LSH to say that he had heard nothing further from LSH since the car was returned to him. He said that LSH's employee had witnessed the continuing errors in relation to the operation of the speed advisory system and the proximity sensors. He said the errors had continued.
37. On 20 November 2019 Mr Sherman emailed LSH to say that he had more screenshots of the speed advisory system's continued inaccuracies and the proximity sensors going off randomly which, he said, had become typical. Those screenshots were not tendered.
38. On 5 December 2019 Mr Sherman said he was driving from Kirrawee to Huntleys Point on the Princess Highway between 2:45 pm and 4 pm i.e. in school zone hours. He said he drove through five school zones, all with flashing lights, and the advisory speed sign on the dash and head-up display never altered, staying at either 60 or 70 km/h.
39. Mr Sherman said that the proximity sensors would often go off randomly and for no apparent reason, particularly common at the driver's door and driver's front panel. He said this was incredibly unnerving and distracting when parking.
40. Mr Sherman said he had a "Final quick test log" downloaded from the vehicle done by the mechanic who had serviced his last Mercedes-Benz. He said the mechanic advised, and the report (which was tendered) clearly showed, faults in the systems designated N45, N10/6, N22/6, E1n9 and N40/3. The log was a read-out from the vehicle's computer systems using the Mercedes Benz diagnostic program (the Xentry system) and is dated 5 December 2019.
41. No expert witness gave evidence on behalf of Mr Sherman in relation to this log, and Mr Sherman did not call the unidentified mechanic. Mr Sherman said the mechanic requested anonymity because he received a substantial amount of work through Mercedes Benz and bought parts etc from it, and the mechanic was concerned as to what effect any evidence he might give would have on his ongoing relationship with Mercedes Benz. We do not draw any adverse inference against Mr Sherman for not calling the mechanic as a witness.
42. The log is not set out in a narrative form and contains many code numbers and other notations which are not explained. Be that as it may, on the face of the log none of the "faults" identified by Mr Sherman in the log seem to refer to or include either the proximity sensors or the speed advisory system. For example, on its face the log says that N40/3 is the sound system, E1n9 is the left headlamp, N22/6 is the rear control unit (the fault was said to be in relation to the right rear power window), N10/6 was the front signal acquisition and actuation module (the fault was reported to be with the engine hood sensor) and N45 was the all-wheel drive system.
43. The absence of any faults appearing in this log which refer to or include the speed advisory system or the proximity sensors is some evidence against Mr Sherman's case that either system contained a remediable fault.
44. Mr Sherman gave more evidence to the general effect of that stated above in relation to the perceived malfunctioning of the proximity sensors and the speed advisory system. Some of that was contained in the transcript of his oral evidence given to the Tribunal (which we have considered in full). This additional evidence was more evidence of a generalised nature to the effect that at various unidentified dates and times, and often at unidentified locations, he observed a discordance between what the speed advisory system advised and the speed limit as Mr Sherman believed it to be, and generalised observations to the effect that the proximity sensors provided warnings when, on investigation, there was no object nearby.
45. That is not to be critical of Mr Sherman. No one would expect him to note dates, times, and locations when these perceived problems first became apparent, but the absence of such details, and particularly some cogent evidence as to what speed signs were displayed along a particular stretch of road when the speed advisory system was said to malfunction, reduces the weight we can give to his observational evidence in terms of whether the vehicle was of acceptable quality. We shall return to this issue later in these reasons.
46. Mr Sherman said he had never read the vehicle's Owner's Manual, was unaware that the sensitivity of the proximity sensors could be adjusted and had never adjusted them himself. He said that LSH had said it would adjust the sensors after the vehicle had been to LSH several times and no-one told him that the sensors could be adjusted by the owner following the instructions in the Owner's Manual. The sensitivity of the proximity sensors could be adjusted between a standard setting and a more sensitive setting (detecting objects further away) called "Ward Early". No evidence was given which setting was active at any point in time other than in Dr Casey's testing (referred to later in these reasons).
47. Mr Sherman tendered three photographs of the vehicle's display which was indicating the proximity of an object when no object could be seen reasonably proximate to the vehicle.
48. Mr Sherman also tendered some photographs of the street outside his house which was said to corroborate his and Mr Senz's observations of the proximity sensors warning of a proximate object when no such object was present. Mr Senz was Mr Sherman's expert who gave evidence in the proceedings.
49. Mr Sherman gave evidence of driving his vehicle on 7 January 2020 accompanied by Mr Senz. They drove about 33 km for the purpose of trying to demonstrate the vehicle's faults to Mr Senz so that he could provide an expert opinion on those faults.
50. It was put to Mr Sherman that he and Mr Senz observed only one occasion during that drive when the speed advisory system showed an incorrect reading. Mr Sherman at first said he did not believe that that was correct but later said that that may have been correct, and that the only incorrect speed advisory demonstrated by the car was when he and Mr Senz were travelling east toward Mr Sherman's home.
51. Mr Sherman said that the malfunctioning of the speed advisory system made him concerned for his safety. He said that, at least in his lay opinion, a significant safety issue arose from not being able to disarm or turn the sensors off with the result that the driver was often provided with wrong information in the form of incorrect speed advisory information. He said that he therefore had to consciously and constantly ignore the information the speed advisory system provided, which impeded his ability to use the vehicle safely, especially in unfamiliar areas.
52. Mr Sherman said he was unable to confidently lend the vehicle to any other driver as he was concerned the defective speed advisory system would cause that other driver to come to harm or cause harm to others by being misled as to the true speed limit.
53. Mr Sherman said that despite his concerns as to the safety of the vehicle he currently had no option but to use it in a limited fashion as a vehicle for grocery shopping and the like. He said he had no other suitable alternative vehicle and no suitable replacement had been offered by LSH. He said his concerns as to the safety of the vehicle caused him to restrict his use of this vehicle for long trips and general pleasure drives he would otherwise have wished to undertake with a luxury vehicle.
54. Mr Sherman presented as an honest and forthright witness who endeavoured to answer questions directly and without evasion to the best of his recollection. We accept his evidence was honestly given, although the impression we had was that his concerns as to safety, whilst not non-existent, were somewhat exaggerated.
55. We accept his evidence that he perceived malfunctioning of the speed advisory system and proximity sensors insofar as he provided dates or specific occasions when he said these occurred and which are corroborated by reasonably contemporaneous emails or other documents. The weight of the evidence is another matter and something to which we will return.
56. Whilst we accept it was honestly given, we do not give any weight to Mr Sherman's more generalised evidence of perceiving either system malfunctioning, such as his testimonial evidence that the sensors "seemed to go off randomly" without any attendant identification of when or where these incidents occurred.
57. In that regard we have in mind the oft-referred to passage of McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 319, namely that: "Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions of self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience."
58. Although that passage refers to conversations, it is equally apt to recollection of events.

Ms O'Brien

1. Amongst the documents annexed to Mr Sherman's statement was a letter dated 9 January 2020 purporting to be from Mr Sherman's partner, Ms O'Brien to "To Whom It May Concern". It is signed but was not verified by way of affidavit or statutory declaration. Ms O'Brien did not give oral evidence, was not cross-examined and her evidence was not referred to in submissions.
2. In that letter Ms O'Brien said she'd been a passenger in the vehicle on numerous occasions.
3. She said that she had travelled in the car as far north as Port Stephens and south to Kirrawee. She said that almost without exception the advisory speed indicator on the dash had been random, offering an array of differing and inaccurate advisory speeds, often ignoring school zones, showing temporary school zones when out of school hours or disappearing completely from the dash. She said that Mr Sherman had found this incredibly distracting and frustrating, especially when they were driving in areas they were unfamiliar with.
4. She said that the proximity sensors seemed to have a mind of their own, often activating without any reason or "threat" of collision.
5. She said that she was a passenger in the vehicle when the advisory speed indicator disappeared completely for two days and couldn't be activated.
6. We do not place any weight on Ms O'Brien's statement even though she was not cross-examined and her statements unchallenged. Her evidence is even more generalised and less detailed (to the extent details were given) than Mr Sherman's evidence and, in relation to the issues in this case, her evidence is of little value for reasons which we will later explain.

Mr Senz

1. Mr Senz was a motor vehicle expert who gave evidence by way of two reports, dated 10 January and 8 December 2020, and was cross-examined.
2. Mr Senz commenced in Automotive Mechanical Engineering apprenticeship in 1967. His duties included all aspects of repair and maintenance on his then employer's industrial plant and fleet of light and heavy vehicles.
3. In mid-1982 he commenced employment with the NRMA, initially as a vehicle inspector assessing vehicle performance, condition, roadworthiness, repair compliance and fire causation. He later moved to NRMA Technical Research to develop and perform specialised vehicle and component tests. He later managed NRMA Technical Advice which employed around 28 staff entering around 3000 automotive technical related inquiries per week. He personally prepared expert technical reports and attended court on matters pertaining to automotive systems, failure causation, fault diagnosis, repair procedures, vehicle dynamics and motor vehicle accidents.
4. In December 1996 he commenced an independent full-time automotive consultancy business specialising in mechanical failure analysis, motor vehicle accident reconstruction and fire causation. He performed failure analysis related activities for a number of government departments.
5. Mr Senz performed work for a wide variety of insurance companies providing reports in relation to failure causation in relation to engine, transmission, driveline, suspension, and brake system related failures on a wide range of light and heavy vehicles. He has provided reports on the validity of mechanical failures, fraudulent or suspicious incidents, including fire, marine, theft and flooding.
6. Mr Senz obtained an Automotive Mechanical Engineering Certificate from TAFE in 1971 and a Mechanical Engineering Certificate from TAFE in 1986.
7. Mr Senz is a Member of the Institute of Automotive Mechanical Engineers, an Associate Member of the Society of Automotive Engineers Australia and a Member of the Australian and South Pacific Association of Collision Investigators.
8. There is no evidence that Mr Senz had acquired any specialised knowledge based on his training, study or experience in relation to proximity sensor systems or speed advisory systems, either generally or in relation to those particularly used in Mercedes Benz vehicles.
9. Nor is there any evidence that Mr Senz had acquired any specialised knowledge based on his training, study or experience in relation to driver behaviour in specified circumstances.
10. Mr Senz inspected Mr Sherman's vehicle on one occasion, being on 7 January 2020, and accompanied Mr Sherman on a drive of the vehicle of approximately 33 kms that day.
11. Mr Senz was provided with three emails from Mr Sherman (dated 25 December 2019, 7 and 9 January 2020), a list of concerns/event summary, a certificate of registration and a Mercedes-Benz invoice. The last two documents are not relevant to the resolution of the issues in this case. Insofar as the remaining documents may have been relevant, they were not tendered except for some photos attached to the January 2020 emails.
12. Mr Senz said he inspected the vehicle's front windscreen. This was relevant because the speed advisory camera was mounted high up on the front windscreen, in the centre. Mr Senz said that the "sensors" (meaning camera) should not be affected by road grime or other contamination concerns which might hinder its effectiveness.
13. It is unclear whether Mr Senz was saying that the road grime or other contamination he observed on the windscreen on that particular day should not have affected the camera on that day, or whether no road grime or contamination at all should affect the camera on any day.
14. Whichever be the case, no facts or reasoning process was provided by Mr Senz to support this opinion, nor is it apparent to us what training study or experience he had which entitled him to express that opinion as an expert. In courts bound by the rules of evidence this would usually result in the opinions being rejected as inadmissible, but this is not the case in the Tribunal.
15. In relation to that opinion, and Mr Senz's other opinions to which we will come, the Tribunal is not bound by the rules of evidence, and it has been held that non-compliance with the rules of evidence should be treated as a matter of weight rather than admissibility - Allen v TriCare (Hastings) Ltd [2016] NSWCATAP 216 at [189]-[191]. That is, whereas as an expert report may be rejected as inadmissible in the Supreme Court for example, because of a failure by the expert to prove that his or her opinion is based on their training, study, or experience, or where an expert fails to provide the facts and reasoning process which led to their opinion, the report will not be rejected in the Tribunal. Rather, the report will be admitted and the absence of the matters we have identified are taken into account when assessing how much weight is given to the expert's opinion.
16. That these matters are taken into account when assessing weight is made clear in Allen at [191]-[192] where the Appeal Panel said that the Tribunal must be satisfied that the expert evidence provides a satisfactory basis upon which it can make its findings, and that that requirement for a satisfactory basis is found in the Tribunal's procedural direction dealing with expert evidence. That procedural direction includes requirements that experts establish the link between their opinions and their training, study, or experience, and identify the facts and reasoning process supporting their opinions.
17. Fundamentally, Mr Senz did not do either of these things in relation to any of his opinions expressed in his two reports.
18. Turning to his first report, Mr Senz referred to a photograph (E 53 4) which was taken by Mr Sherman on 9 January 2020. The photograph was taken of the instrument cluster in the vehicle, and the first few centimetres of the front windscreen immediately above the instrument cluster. Mr Senz opined that the speed advisory system displayed its information in the instrument cluster of the vehicle and on the windscreen (the head-up display).
19. Mr Senz referred to a second photograph (E 53 5) also taken by Mr Sherman on 9 January 2020. It was taken from a position roughly equivalent to where a driver's eyes may be and through the front windscreen of the vehicle when it was stationary at a set of lights. It showed that the speed advisory system advised the vehicle was in a temporary 40 km/h speed zone. No opinion was expressed by Mr Senz concerning this photograph.
20. Mr Senz referred to a third photograph (E 53 6) which he said was taken whilst on the drive with Mr Sherman on 7 January 2020. The photograph is taken of the instrument cluster and navigation screens, from an oblique angle and seemingly from the front passenger seat of the vehicle. The quality of the copy given to us is poor and its details not apparent. Mr Senz did describe what the photograph demonstrated in his original report but deleted that description from his report when he gave his oral evidence-in-chief.
21. Mr Senz opined that both the speed advisory system and proximity sensor systems on this vehicle were not functioning as intended or reasonably expected. This is a rather extraordinary opinion given he said he had not read the Owner's Manual which gave at least some indication of how the manufacturer intended these systems to operate (and their limitations) and would significantly influence a reasonable consumer's expectations. In any event, we are not satisfied Mr Senz had any training study or experience relevant to those opinions, he did not set out the facts and reasoning process by which he came to those opinions, and so we gave them no weight because we were not satisfied that his evidence provided a satisfactory basis upon which we could make the findings sought by Mr Sherman.
22. Mr Senz opined that he was concerned with what would happen when a driver had no local knowledge of an area and slammed the brakes on to avoid being fined and caused an accident because of the speed advisory system displaying an incorrect speed.
23. There is no cause to doubt that that might be a genuine concern held by Mr Senz. However, his personal concerns are not relevant to the issues in the case. What may have been relevant in this case were industry standards, publications from professional industry associations or widely held peer opinions from suitably qualified experts (with the requisite training, study of experience) which expressed such a concern and through some facts and reasoning process, or by reference to studies or experiments, established some link between incorrect speeds displayed by speed advisory systems and the driver behaviour asserted by Mr Senz.
24. Mr Sherman did not prove that Mr Senz had any qualifications in relation to driver behaviour in the circumstances specified. Mr Senz did not say, and did not prove, that his concerns were well-founded (by reference to studies, experiments, or anything else) and did not say, or prove, that his concerns were held by many relevantly qualified persons in the automotive industry.
25. These omissions are telling, not least because the test for acceptability is an objective test, and Mr Senz's personal concerns are of little weight given the omissions to which we have referred above.
26. Mr Senz said in his report that "as previously mentioned", testing (with Mr Sherman) was not conducted in active school zones, however he observed on "numerous instances" where the vehicle would falsely indicate 40 km/h zoning when no school zones were evident. He said that, on the other hand, he observed that often when he and Mr Sherman entered a designated school zone, the system did not suggest it was a temporary 40 km/h (as in photograph E 53 4) but would simply display nothing until the vehicle exited the designated zone. There was one particular instance mentioned in his report where he said that the speed advisory system showed an incorrect reading when he and Mr Sherman were travelling east toward Mr Sherman's home.
27. The difficulty with this evidence was that the report did not contain any information or details about the "numerous instances" referred to by Mr Senz. The one specific occasion mentioned did not include any details of the speed limit signs which the system is alleged to have misread or failed to read, and whether any of the limitations of the system referred to in the Owner's Manual may have accounted for the failure to read.
28. As it is accepted by Mr Sherman that the system has some inherent limitations, the mere fact that there were incorrect readings, in the absence of any other relevant facts, did not necessarily mean that there were any faults with the vehicle as distinct from incorrect readings stemming from the system's inherent limitations.
29. When Mr Senz and Mr Sherman returned to Mr Sherman's house, Mr Senz observed one of the proximity sensors provide a warning when there were no objects near the vehicle.
30. Mr Senz also attached a photo (E 53 7) which was a still image taken from a video recorded by Mr Sherman (the video was not tendered). Mr Senz says, by inference, that this photo showed the vehicle approaching an object (which may have been Mr Sherman's garage door) and he would expect a warning from the left-hand front sensor. The photo appears to show a warning in relation to the right-rear of the vehicle. His opinion was that: "Proximity sensors would indicate danger when nothing was evident."
31. Mr Senz said that he had experienced instances where proximity sensors were triggered by "the likes of dust", but there was no evidence of dust "or other material" on the one occasion he observed the apparent malperformance of the rear sensor.
32. In cross examination Mr Senz accepted that he had not inspected any other vehicle of the same make and model, or any exemplar vehicle, to determine whether Mr Sherman's vehicle behaved any differently to that of an exemplar vehicle.
33. Interestingly, Mr Senz had not been asked by Mr Sherman to proffer any opinion on the contents of the "Final quick test log" tendered by Mr Sherman.
34. Mr Senz concluded his first report by saying that based on his expertise: "… in the area of failure analysis, vehicle repair and interpretation of visible evidence from photographs it is the writer's considered opinion that it is far more than reasonable to conclude on the balance of probability that inspection of this vehicle revealed that its … Speed Advisory and Proximity Sensing systems are not functioning as intended or reasonably expected given a reasonable consumers perceive perception of vehicle quality expectation."
35. Three things may be said about those opinions. First, in our opinion there was no evidence of any connection between Mr Senz's training, study or experience in failure analysis (whatever that quite means), vehicle repair or interpretation of photographs, with his opinions as to the functioning of the speed advisory system or the proximity sensors. Second, nor, in our opinion, did his first report set out any facts or reasoning process by which he came to those various opinions. Third, there was no evidence of any connection between Mr Senz's training, study or experience and his opinion as to what reasonable consumers perceive, nor any facts or reasoning process exposed in his report explaining how he came to that conclusion.
36. Mr Senz also opined: "Provision of wrong information is distraction which is a known cause of accidents. … Since broadcasting of incorrect information is distracting, then the vehicle can be deemed as being unsafe. … The vehicle displays wrong information which is a recognised safety concern."
37. Whilst it could be accepted that at some generalised level the display of wrong information by a vehicle might be a distraction to a reasonable driver, it is a leap of some orders of magnitude from that position to the opinions expressed by Mr Senz. Again, there is no evidence of any connection between Mr Senz's training, study or experience with these opinions, nor did he set out any facts or reasoning process which supported those opinions.
38. In his second report Mr Senz was asked by Mr Sherman's solicitors to opine whether the vehicle's spoiler would have contacted the concrete wheel stop had the proximity sensors been functioning properly.
39. He answered by referring to modern vehicle's crumple zones and smart anti-collision brake systems. The relevance of those matters to the question asked is not apparent.
40. Mr Senz then said that in his opinion the radar used to calculate how far the vehicle is from an object is reliant on the radar being able to get a recognisable rebound signal from the object. He said that some materials and shapes will obviously reflect better than others. He said that although a concrete barrier should reflect well, there was the problem of the height of the sensors (above the ground) which may prevent suitable detection.
41. Mr Senz then said that the proximity sensor issue that he was looking at was not the concrete wheel stop, but Mr Sherman's garage doors which had allegedly not been detected, and that there had been a tripping of the right-hand rear sensor (when no object was nearby). He then opined that one would expect the vehicle's sensors should detect the presence of a solid object which was close to vehicle panelling.
42. Any opinion about the concrete wheel stop and the vehicle's sensors seems to be qualified by Mr Senz's statements about the problem with height (more compendiously described by Dr Casey), and we are unable to reconcile Mr Senz's opinion with his qualification as to height.
43. There is no doubt that Mr Senz was an honest and forthright witness, but we attach no weight to his opinions. We have already observed the lack of connection between his opinions and his training, study and experience, and the lack of exposure of any facts and reasoning processes by which he arrived at his opinions.
44. Whilst an honest witness attempting to do the best he could, our impression was that he was giving evidence of matters beyond his expertise and giving evidence of opinions that, whilst genuinely held, were not based on any recognised expertise, objective criteria, industry standards or widely held peer opinion. We were not satisfied that his evidence provided a satisfactory basis upon which we could make the findings sought by Mr Sherman.

Mr Collins

1. David Collins, the general manager of Parramatta Smash Repairs gave evidence in relation to the repairs undertaken in relation to the damage to the front spoiler. Although he did not personally undertake the repairs, he did inspect them.
2. A statutory declaration of Mr Collins declared on 25 February 2021 was tendered, Mr Collins gave some additional brief oral evidence before us and he was cross-examined.
3. Mr Collins said that in relation to parts needed for the repair, all damaged parts were replaced with new parts ordered from Mercedes-Benz except for a bracket which had been bent but which was able to be straightened.
4. Some re-painting was required. Mr Collins gave evidence that the paint was a paint authorised by Mercedes Benz and was mixed on site to achieve the correct colour following a Mercedes Benz formula.
5. The result of the repairs, according to Mr Collins was that the vehicle was in an as new condition when those repairs were completed.
6. Mr Collins was another honest witness. He gave his evidence cogently and in a direct and forthright manner. We accept his evidence.

Dr Casey

1. Dr Casey provided a report dated 13 January 2021 and was cross-examined.
2. Dr Casey is a qualified Mechanical Engineer. He holds a PhD, Master of Engineering Science and Bachelor of Engineering (1st class honours) all in the field of mechanical engineering.
3. Dr Casey is a Member of the Institute of Engineers Australia.
4. Dr Casey said he had been Head of the Internal Combustion Engines Laboratory, University of New South Wales, lecturer in the School of Mechanical and Manufacturing Engineering at the same university, Assistant Professor at the Institute of Fluid Science, Tohoku University, Japan, and Tutorial Assistant, Department of Mechanical Engineering, University of Queensland.
5. Dr Casey said he had worked on numerous international journals, conferences, and other professional bodies. He said he had investigated more than 1,500 heavy vehicle accidents, crashes, fires, and failures. He said he had worked extensively in the area of automotive forensic investigation since March 1993 with many cases coupled with extensive testing programs.
6. Dr Casey said he had an extensive knowledge of vehicular systems including systems that form Driver Assistance Packages ("DAP"). [The speed advisory system and proximity sensor system fall within this description.] He said he had dealt with such systems for various manufacturers including BMW, Audi, VW as well as in lower marques of vehicles such as Jeep and Toyota. He said that his involvement included assessment of the systems installed on those vehicles as well as analysis of the way in which the systems were intended to function. He said he had driven dozens of vehicles fitted with these types of systems and his own vehicle is fitted with an extensive range of DAP.
7. Dr Casey said he had a very strong working knowledge of the methodology used by systems that form DAP since these are in common with many analytic experimental methods that he used throughout his time in academia. This included ultrasonic distance methods, Doppler methods, and image processing.
8. Dr Casey said he was very familiar with Mercedes AMG vehicles and the systems fitted to them. Mr Sherman's vehicle was a Mercedes Benz AMG vehicle.
9. Dr Casey was provided with the two reports of Mr Senz amongst other documents and inspected and tested Mr Sherman's vehicle on 7 January 2021.
10. Dr Casey explained how the proximity sensor system worked. He said that Mr Sherman's vehicle is fitted with sensors to alert driver to objects that are in and around the vehicle. He said the sensors were ultrasonic sensors that emit a high frequency soundwave. He said the sensors would emit a sound wave which would bounce off nearby objects. Some of the reflected wave would then return to the sensor and then the system would calculate the distance to the object detected.
11. Dr Casey explained the limitations in such systems. He said they can be affected by variations in temperature and humidity. He said that sound waves can be affected by wind. He said that not all objects reflect sound directly back towards the direction from which it came. For example, he said rounded objects could scatter sound in many directions, and slanted objects with faces slanted away from the incoming direction will reflect the sound wave away from the direction from which it came.
12. Dr Casey said that sound emitted by such sensors can reflect off multiple surfaces which can cause multiple signals to return to a sensor or a signal emitted by one sensor may be incorrectly captured by another sensor which can lead to erroneous interpretation of distances by the system.
13. Dr Casey said that the sensors typically emit sound in a directed beam and only objects within that beam can be detected. He said that such systems engage in a trade-off. The intention is to detect things close to the car but not to detect the road surface. Therefore, the directed beam had to be angled in such a direction to attempt to detect close objects without continually or indeed often detecting the road surface.
14. In cross-examination Dr Casey was pressed on the question of whether the vehicle sensors should have detected the wheel stop. Dr Casey said the only real way to answer that question was to test this particular vehicle with that particular wheel stop, however he thought it unlikely given the height of the wheel stop.
15. Dr Casey also said this vehicle was fitted with a second object detection method that was radar based. It had certain limitations in that it only detected objects that were moving at a different speed to the vehicle which meant that for the system to detect a stationary object the vehicle had to be moving. He said this could limit the effectiveness of the radar system at very slow speeds.
16. Dr Casey said that these inherent operational limitations went a long way to explaining why these types of systems were referred to as "assistance" systems or as "Driver Assistant Packages". In other words, Dr Casey said, the systems can assist drivers, but drivers must still use the normal means of avoiding objects because they could not be relied upon to work perfectly at all times.
17. Dr Casey said that these types of systems undergo developments that improve their implementation. That is, they get better with time as the technology improves and matures.
18. Dr Casey inspected the vehicle on 7 January 2021.
19. Dr Casey investigated the possibility that the ability of this vehicle to change its height may have been responsible for the contact between the vehicle spoiler and the concrete wheel stop. Dr Casey ruled out this possibility, and we need not say more about this because Mr Sherman's evidence was to the effect that the height of the vehicle when he parked was the same height as when he reversed.
20. In contradistinction to Mr Senz, Dr Casey tested the proximity sensors by driving the vehicle around the premises where he was inspecting it and which he said contained many obstacles. He said he could not find any fault or defect with the proximity sensor system. He tested the system at its various sensitivities (it can be adjusted by the driver). He tested the system in relation to low objects (a square-faced gutter), other vehicles and vertical objects. After all of his testing he came to the view that the behaviour of the proximity sensors was as expected, and he did not find any aberrant behaviour.
21. He also tested an exemplar vehicle (the same model) for the same tests and said that to all intents and purposes the results were the same.
22. Dr Casey had the vehicle's diagnostic memory downloaded using Mercedes' diagnostic program (the Xentry system). He said that any faults or issues would be recorded in that download. He said that in terms of the system responsible for the proximity sensors there were no faults or issues. He repeated the download after his road tests and found no faults or issues recorded.
23. For completeness, Dr Casey's report also contained evidence in relation to the speed advisory system. However, as that evidence had not been led before the Tribunal and was outside the previous Appeal Panel's grant of leave for the service of new evidence, that evidence was, on objection, rejected.
24. Dr Casey was well qualified by his training, study and experience to provide the opinions he did. The facts and reasoning process by which he came to his opinions were set out in his report. Dr Casey gave his evidence in an honest and forthright way. He answered questions directly and without evasion. He was not shaken in cross-examination. We accept Dr Casey's opinions.

Mr Lazzaro

1. Mr Lazzaro was LSH's Service Manager. He gave oral evidence to the Tribunal and the transcript of that evidence was before us. Otherwise, he gave no further testimonial evidence.
2. Mr Lazzaro said that LSH had checked the vehicle and all its software was up-to-date or was updated when the vehicle was with LSH, and any update was available.
3. He said that the speed advisory system relied on two factors. It relied on predetermined data in the navigation system, and it relied on the camera. He said they were never perfect in reading signs because for example they had difficulty with LED lighting. He said that there were limitations described in the Owner's Manual, such as, for example, if you took a corner the camera might not read a sign straight away and will miss that speed zone because it couldn't capture the sign quick enough.
4. He said the test conducted by LSH on 30 January (presumably 2020) showed no faults displaying in the systems.
5. We did not observe Mr Lazzaro give his evidence, but his evidence that LSH checked the vehicle and all its software was up-to-date or was updated when the vehicle was with LSH was corroborated by Mr Sherman and contemporaneous emails.
6. His evidence about the working of the speed advisory system was corroborated by Dr Casey, and his evidence about the Xentry data of 30 January 2020 was corroborated by the document itself.
7. We accept Mr Lazzaro's evidence.

Mr Harish

1. Mr Harish was an accountant employed by LSH. He provided a statutory declaration and was cross-examined.
2. His evidence was directed to the proffered replacement vehicles which Mr Sherman rejected, and the difficulties involved in sourcing an identical vehicle.
3. Mr Harish gave his evidence in an honest and forthright manner. We have no reason to doubt his evidence.

Other Evidence

1. LSH tendered two other Xentry logs, both dated 30 January 2020. One was an "Initial quick test log" and the other was a "Final quick test log". Neither log indicated any fault.
2. A Xentry "Documentation for repair order" indicated that the vehicle's "control unit programming was completed successfully".
3. The extracts from the vehicle's Owner's Manual revealed various warnings as to when the proximity sensor system may not work as expected. The Manual said that the system was: "… only an aid. It is not a substitute for your attention to the surroundings. The responsibility for safe manoeuvring and parking remains with you. Make sure that there are no persons, animals or objects in the manoeuvering area while manoeuvering and parking in/exiting parking spaces."
4. The Manual said that the system did not necessarily take into account certain obstacles such as obstacles below or above the detection range. It said that the sensors must be free of dirt, ice and slush, otherwise they may not function correctly.
5. On other pages of the Owner's Manual several different scenarios are described in which the sensors may indicate nearby objects when none are, in fact, present. The Manual suggests action to be taken, and says that the system may have malfunctioned and was deactivated (by the vehicle) due to signal interference.
6. In relation to the speed advisory system, called the Traffic Sign Assist, the Manual said that the system assists the driver by displaying detected speed limits in the instrument cluster. It said the system also uses data stored in the navigation system so that it can update the display in certain situations without detecting traffic signs. It said that the system was only an aid and that the driver was responsible for keeping an appropriate speed.
7. The Manual said that the system may be impaired or may not function in certain situations including: 1. if there was poor visibility (due to insufficient illumination of the road or highly variable shade conditions or even rain, snow, fog or heavy spray); 2. if there is glare from oncoming traffic, direct sunlight or reflections; 3. if traffic signs were hard to detect; 4. if the information in the navigation system's digital map was incorrect or out of date; 5. if the traffic signs were ambiguous; 6. if a driver turned sharply when passing traffic signs were outside the camera's field of vision.

The Parties' Submissions

1. Mr Sherman's factual case was based on the alleged deficiencies in the speed advisory system and the proximity sensors.
2. His legal case was that the existence of those deficiencies meant that the vehicle was not of acceptable quality per s 54(a), (c) and/or (d) of the ACL (NSW). In addition to the evidence we have summarised, he said that the consent of LSH to the orders made by the Tribunal on 24 September 2019 "is grounds to infer" that LSH tacitly accepted that the vehicle was not of acceptable quality.
3. Mr Sherman said he was entitled to reject the vehicle on two bases. First, he said that LSH's failure to comply with the guarantee provided by s 54 amounted to a major failure per s 260(a), (c) or (e) and thus he was entitled to reject the vehicle per s 259(3). Alternatively, he said that if LSH's failure to comply with the guarantee provided by s 54 could be remedied and was not a major failure, he had requested LSH to remedy the failure, LSH had failed to comply with that requirement, and thus he was entitled to reject the vehicle per s 259(2)(b)(ii).
4. LSH said that the alleged deficiencies did not amount to the vehicle not being of acceptable quality. It said that its consent to the orders made by the Tribunal on 24 September 2019 did not operate as a tacit acceptance that the vehicle was not of acceptable quality.
5. LSH said that if the deficiencies meant that the vehicle was not of acceptable quality, they did not amount to a "major failure" and thus Mr Sherman was not entitled to reject the vehicle. If the deficiencies did not amount to a major failure, LSH said that Mr Sherman had not identified any fault in either system (as opposed to the system working as designed, but simply not to an acceptable standard) and so had not proved that the deficiencies could be remedied and thus did not prove an entitlement to relief based on s 259(2) of the ACL (NSW).
6. In further defence to the claimed entitlement of Mr Sherman to reject the vehicle, LSH relied on s 262(1)(c) of the ACL (NSW) and said that as the vehicle had been damaged that section was called into play and operated to deny Mr Sherman any entitlement to relief based on a rejection of the vehicle.
7. In answer to LSH's defence per s 262(1)(c), Mr Sherman says that the section did not apply because the vehicle was repaired to an as good as new condition.

Decision

1. In our opinion Mr Sherman did not prove that this vehicle was not of acceptable quality. Our reasons for that finding are as follows.

The Tribunal's Orders of 24 September 2019

1. On 24 September 2019, at the conclusion of a conciliation hearing, and with the parties' consent, the Tribunal made the orders set out at [70] above, the most important of which (for this point) were orders 4 - 6 which were in the following terms: "4. The respondent will have a period 21 days to inspect the vehicle from the date of collection and in particular for the following named concerns: a. Random speed display b. Sensors not responding and randomly responding c. Underdash heating not working d. Concern with using auto functions for parking and cruise control. 5. The respondent will carry out such repairs as might be necessary and at its' own expense during the period of 21 days, or such longer period as may be reasonably agreed between them. 6. Either party may seek to renew these proceedings on or before 10 November, 2019, in the event these orders are not complied with (or) the applicant remains of the view that the vehicle requires further repairs."
2. Mr Sherman submitted that it is reasonable to infer that the consent orders operated as a tacit acceptance by LSH that the vehicle was not of acceptable quality in respect of the matters complained of. By "tacit acceptance" we assume Mr Sherman means "admission". No submissions were made in support of the contention advanced, Mr Sherman simply pointing out that this was what was said by the previous Appeal Panel at [15] of its reasons.
3. LSH submitted that the orders did not involve any finding of liability, rather the orders were restricted to orders for inspection in relation to the identified "concerns", with LSH to carry out such repairs as "might" be necessary. LSH submitted it denied it had failed to comply with the guarantee provided in s 54 of the ACL (NSW) at all times. LSH also submitted that the orders were inadmissible given the terms of cl 2(2) of Schedule 1 of the Civil and Administrative Tribunal Regulation 2013 (NSW). That clause says: Any statement or admission made before the Tribunal or any person at a meeting or other proceeding held for the purposes of a resolution process to which parties have been referred by the Tribunal under section 37 of the Act is not admissible in the proceedings in which the referral was made, or in any other legal proceedings before a court or other body, unless the person who made the statement or admission consents to its disclosure in the proceedings.
4. Whilst the previous Appeal Panel did make the observation referred to, it was not a finding made by it and does not bind us.
5. In Newcrest Mining Ltd v Thornton (2012) 248 CLR 555; [2012] HCA 60 the High Court considered the effect of a consent order made in settlement of personal injury proceedings in the District Court of Western Australia. French CJ said, in relation to such an order, at [17]: "A consent order of the kind made in this case can properly be described as an order which expresses an agreement in a more formal way than usual. … However, when a consent order in favour of a plaintiff gives effect to an agreement which does not involve any admission of liability in respect of any cause of action asserted by the plaintiff, it cannot be taken as reflecting an admission of liability or as a determination of liability by the court." (Emphasis ours)
6. There was no evidence of any agreement between the parties involving an admission of liability. Nor do the terms of the orders imply one. LSH agreed to carry out such repairs "as might be necessary", presumably meaning as might be thought necessary by LSH given the terms of order 6. Logically, this was agreed to against the event some fault could be found in the vehicle and was no more than one would expect for a vehicle still under warranty.
7. We do not agree that the orders are an admission by LSH of any contravention of a consumer guarantee. They were not "statements" or "admissions" made "before" the Tribunal. They were orders made by the Tribunal, entered into the Tribunal's records and are part of the public record.
8. In our opinion the consent orders did not operate as an admission made by LSH to the effect that the vehicle was not of acceptable quality in respect of the matters complained of.

The Speed Advisory System

1. We accept that there were occasions when the vehicle displayed a speed advisory which was different to the actual speed limit applicable.
2. However, beyond that the evidence is not clear.
3. Although Mr Sherman gave evidence with varying degrees of specificity of occasions when he said the speed advisory was different to the mandated speed limit, there was no evidence of how many occasions the speed advisory was accurate. The relevance of the latter evidence would be to contextualise the former evidence so that one could assess how often the system performed imperfectly (from Mr Sherman's perspective). That is, for example, did it perform imperfectly 50% of the time (misread or fail to read 50% of speed signs) which might be considered as regular and often, or less than 0.1% of the time which might be considered as rare and irregular, or some other percentage?
4. In addition, there was no qualitative evidence as to the misread signs or the signs the system failed to read. By qualitative we mean a description of the particular sign (what it displayed) which was misread or which the system failed to read, and those features mentioned in the Owner's Manual which the manufacturer said may impair the functioning of the system such as whether there was poor visibility, glare from oncoming traffic, direct sunlight or reflections, whether the traffic signs were hard to detect or ambiguous or whether Mr Sherman turned sharply such that the traffic signs were outside the camera's field of vision.
5. To the extent the system relied on the navigation system's digital map, we infer that the digital map was correct and not out of date because Mr Lazzaro said that LSH had checked the vehicle and all its software was up-to-date or was updated when the vehicle was with LSH, and any update was available.
6. Further, some of Mr Sherman's evidence was by way of assertion rather than observation. For example, in his email of 22 August 2019 Mr Sherman emailed LSH to say that on the previous Tuesday the speed advisory system had indicated a speed limit of 40, 60, 70, 40 and 60 kph along Victoria Road when the zone speed limit for that area was 60 kph. Whilst it is one thing to say what speed advisory is being displayed by the vehicle, it is another to assert what the speed limit was without giving evidence of the location of the speed sign allegedly misread (or failed to have been read) by the system. Appreciating we are not bound by the rules of evidence, the lack of such details greatly reduced the weight we could give to such descriptions.
7. For the reasons set out below commencing at [234] we find that there was no remediable fault or defect in either system. That is, there was nothing broken that could be fixed. The problem, if one existed, was in the design of the system.
8. However, we are not persuaded by Mr Sherman's evidence that the perceived failures of the system were beyond what one may expect given the inherent limitations in the system's design. The lack of evidence of the number of times it did not work as designed (in the context of the number of times it did) and the lack of evidence of the physical circumstances in which it did not work as designed (in the context of the system's limitations) do not allow us to make any finding that the system's "failures" (we use that term neutrally) exceeded what one may expect given the inherent limitations in the system's design.

The Proximity Sensors

1. The same observations we have just made apply to Mr Sherman's evidence as to the proximity sensors, except for the one occasion when Mr Senz observed the sensor system sounding an alarm when no visible object was nearby.
2. But otherwise, we do not know how often the proximity sensors worked, and so are unable to ascertain whether they worked imperfectly 50% of the time, less than 0.1% of the time or some other percentage.
3. The Manual refers to signal interference, and sometimes problems with the sensors being covered by dirt. The evidence does not allow us to say that those matters were not responsible for the observed false indications.
4. We are unable to find, on the evidence, that the proximity sensors should have, but failed to, detect the concrete wheel stop which caused damage to the front spoiler when Mr Sherman reversed out of the car parking spot.
5. As Dr Casey said, the proximity sensors send out a beam, and there is a trade-off with the direction in which the beam is sent between detecting objects close to the car whilst not detecting the road surface.
6. The vehicle did not sound an alarm when the vehicle entered the car parking spot, and so it would appear the system worked in the sense that it did not detect an object that did not contact a part of the vehicle (other than, perhaps, the tyres). And given that by the time the car came to a stop the wheel stop was underneath the spoiler, it is clear that the wheel stop was not inside the directed beam of the front proximity sensors at that point in time. Therefore, they could not have detected the wheel stop when Mr Sherman commenced reversing.
7. Why the spoiler caught on the wheel stop when the vehicle reversed and did not do so when it first entered the car parking spot, when the vehicle was at the same height during both manoeuvrers, we are unable to say on the evidence.

Setting the Standard of Acceptable Quality

1. Section 54(2) requires regard to the matters set out in s 54(3) when judging what a reasonable consumer would regard as acceptable quality.
2. In this case the good was a prestige, luxury motor vehicle with some driving performance characteristics of a superior kind.
3. The price of the vehicle was a little under $204,000 including various charges and taxes. Mr Sherman submitted, in substance, that for that price a reasonable consumer would be entitled to expect the systems would work perfectly at all times. We do not agree. Section 54 does not require perfection. As was said in Jayco at [27], the standard of acceptable quality prescribed by s 54(2) is not absolute, or a standard of perfection. The standard of acceptable quality is elastic, and context specific. In our view, a reasonable consumer might expect a higher standard of performance than might be exhibited by lower priced vehicles, but even in expensive vehicles such as this one these systems have their limitations, as made clear to owners in the Owner's Manual.
4. There is no evidence of any statements made about the vehicle on any packaging or label on the vehicle, and most particularly no evidence of any representation made about the speed advisory system and the proximity sensors.
5. There is no evidence of any representation made about the vehicle by the supplier or manufacturer of the vehicle, and most particularly no evidence of any representation made about the speed advisory system and the proximity sensors.
6. There are no other relevant circumstances relating to the supply of the vehicle other than the Owner's Manual. In our view the contents of the Manual are relevant to a reasonable consumer's state of mind as it contained relevant information about the two systems complained of and their inherent limitations. The Owner's Manual also made the point that these systems were aids for drivers, or of assistance to drivers, but ultimate responsibility rested with the driver. In relation to the proximity sensor system the Manual said: "It is not a substitute for your attention to the surroundings. The responsibility for safe manoeuvring and parking remains with you."
7. In relation to the speed advisory system the Manual said that the system: "… is only an aid. The driver is responsible for keeping a safe distance to the vehicle in front, for vehicle speed and for braking in good time."
8. As mentioned earlier, there was no dispute that neither the speed advisory system nor the proximity sensors were foolproof systems, nor would they operate perfectly in all circumstances. Both systems had inherent limitations.

Design or Fault, Free from Defects

1. LSH makes the point that, accepting that the speed advisory system and proximity sensors did not always work perfectly, there was no evidence whether those systems worked imperfectly because of their inherent (or design) limitations, or whether those systems worked imperfectly because there was one or more faults within each system. This is an important distinction not least because s 54(2)(c) requires goods to be "free from defects" to be of acceptable quality.
2. There was no evidence tendered by Mr Sherman on this question. Mr Sherman himself could not give that evidence.
3. We do not accept that Mr Senz was qualified to express any opinions as to the design limitations of these systems or whether these systems were faulty or whether the perceived defective operation of the systems was the result of the former or the latter.
4. Even if he were so qualified, Mr Senz did not address this question in any direct way in his evidence. To the extent he did, we do not accept Mr Senz's opinions. He did not conduct any form of test on the vehicle, or its components. He limited himself to making observations as to the performance of the two systems on one 33 km drive on one day in January 2020. He made no investigations as to the design of the systems, expressed no understanding how they worked, made no reference to the Owner's Manual and the information it contained, made no reference to the Xentry data, made no reference to other objective facts or criteria and did not himself test (as Dr Casey did) the proximity sensors in relation to various objects.
5. We accept Dr Casey's opinions. Dr Casey was highly qualified in the area of mechanical engineering, he was acquainted with such systems in Mercedes Benz vehicles and many other marques, knew how the systems worked, knew the limitations of the technology, tested the vehicle and had downloaded and examined the vehicle's Xentry data (twice).
6. The Xentry data, tendered by both parties, is objective evidence that the two systems complained of were functioning as designed. Dr Casey could find no fault with the proximity sensors on his testing.
7. Contemporaneous correspondence from LSH on 4 and 8 July 2019 that a software update had been carried out on the Command unit, the parking sensors had been checked and were working fine and that LSH's service team had investigated Mr Sherman's concerns regarding the cameras and sensors and had been unable to find a fault are further contemporaneous evidence that the systems themselves did not contain faults.
8. Mr Lazzaro also gave unchallenged evidence that the test conducted by LSH on 30 January (presumably 2020) showed no faults displaying in the systems.
9. Dr Casey's opinions about the speed advisory system were not admitted because they were outside the previous Appeal Panel's grant of leave for new evidence, but there was no evidence from the plaintiff, who bore the onus of proof, that any perceived defects in the speed advisory system were the result of some fault in the system.
10. The Xentry data is evidence against there being any fault, and both Dr Casey and the Owner's Manual referred to the inherent limitations in the two systems.
11. Therefore, in our view, the perceived defective performance of the speed advisory system and proximity sensors arose out of the inherent or design limitations of the systems and not out of any fault or faults within those systems.
12. It follows that, in our opinion, the vehicle was free from defects per s 54(2)(c) of the ACL (NSW).

Safe / Unsafe

1. There was no evidence in this case akin to that of Mr Rodgers in Vautin, on the question of what a reasonable consumer would have considered.
2. In our opinion, tested objectively, the vehicle was as safe as a reasonable consumer, fully acquainted with the state and condition of the vehicle (including any hidden defects of the goods), would regard as acceptable having regard to the matters in s 54(3), and particularly the contents of the Owner's Manual and the warnings as to the inherent limitations in the two systems.
3. We appreciate Mr Sherman's feelings of insecurity, but we do not regard his feelings as being those of the reasonable consumer and reject his submission that his evidence is some evidence of the thinking of a reasonable consumer. To accept that submission would be to introduce a subjective element into an objective test. Rather, a reasonable consumer who purchased this vehicle (and being fully acquainted with the state and condition of the vehicle and the Owner's Manual) is to be taken to have some degree of tolerance for the two systems' imperfect performance from time to time and to adjust accordingly.
4. A reasonable consumer would also accept, in our view, that the process of production and development of complex systems such as these could never be perfect. As Dr Casey said, these types of systems undergo developments that improve their implementation and get better with time as the technology improves and matures.
5. As the authorities establish, the standard of acceptable quality prescribed by s 54(2) is not absolute, or a standard of perfection.
6. Assuredly, this vehicle was an expensive, prestige luxury motor vehicle. But there are many expensive machines that fail, our point being that the reasonable consumer would know that expense does not guarantee perfect performance with complex systems.

Fit For All Purposes

1. In our opinion, and for the reasons given above, the vehicle was fit for all the purposes for which goods of that kind are commonly supplied as a reasonable consumer, fully acquainted with the state and condition of the vehicle would regard as acceptable.

Conclusion

1. It follows from what we have said above that in our opinion the vehicle was of acceptable quality to a reasonable consumer and LSH did not fail to comply with the guarantee provided in s 54 of the ACL (NSW).
2. As that finding is dispositive of the application, we do not need to decide the remaining issues in the case. However, against the event the proceedings are taken further, we shall provide our findings and short reasons on the remaining issues.
3. If the proper conclusion was that LSH had not supplied a vehicle of acceptable quality it does not matter, in our view, whether or not there was a major failure to comply with the guarantee. That is because the ACL (NSW) provides for three scenarios, each of which leads to the same result in this case: a major failure, failures that can't be remedied and failures that can be remedied.
4. If the failure is a major failure Mr Sherman is prima facie entitled to reject the vehicle per s 259(3) of the ACL (NSW). If the failures can't be remedied Mr Sherman is prima facie entitled to reject the vehicle per s 259(3). If the failures can be remedied but LSH failed to do so (and the evidence is that, if there were failures, LSH had the opportunity to but did not remedy them) Mr Sherman is prima facie entitled to reject the vehicle per s 259(2)(b).
5. We would have upheld LSH's s 262 defence that Mr Sherman was not entitled to reject the vehicle because it was damaged after being delivered to Mr Sherman for reasons not related to their state or condition at the time of supply. Assuming the proximity sensors were faulty, there was no evidence that had the sensors been working properly the concrete wheel stop would have been detected and the damage not have occurred, and thus there was no evidence that the damage was related to the condition of the vehicle at the time of supply.
6. The section simply requires the occurrence of damage. We would have found that damage meant non-negligible damage. The fact the vehicle was repaired "as good as new" is not to the point. The section only refers to the occurrence of damage not related to the condition of the vehicle at the time of supply. To qualify that requirement by allowing for repaired damage would be to read words into the section that do not exist. Having said that, the defence only extended to disallowing Mr Sherman to reject the vehicle, and obtain a replacement, a remedy we would not have been inclined to grant in any event as we shall now explain. Section 262 does exclude other remedies.
7. Notwithstanding Mr Sherman elected to reject the goods, we would not have granted him that remedy, that is the remedy provided in s 263, namely return of the vehicle to be replaced by another, identical vehicle. The parties tried to resolve their differences along those lines without success, and Mr Harish gave evidence, which we accept, of the difficulties in obtaining an identical vehicle.
8. We also do not think return of the vehicle and repayment of the purchase price would be a practical remedy given the payment of significant sums from that purchase price by way of GST (approx. $15,000) and luxury car tax (approx. $30,000). We do not know whether those taxes would be recoverable if this transaction were, in effect, unwound.
9. Had we given Mr Sherman a remedy it would have been by way of compensation as is provided for in s 259(3)(b) of the ACL (NSW) for the reduction in the value of the vehicle below the price paid, or pursuant to s 79N(a) of the FTA. We appreciate that s 259(3) is expressed in terms of alternative remedies to be chosen by the consumer, but s 79N provides us with the power to grant other remedies (such as compensation) in relation to consumer claims brought before us, of which this case is one, and we regard compensation to be assessed on the basis set out in s 259(3) as being the most appropriate remedy.
10. No party led evidence on the quantum of such compensation, and it was apparent that neither party considered compensation as an available possible remedy. In the circumstances of this case, had we got this far, we would have been minded to grant leave to the parties to adduce further evidence on quantum, with any experts to confer to attempt to agree on a figure or reduce any areas of dispute and, subject to any submissions to the contrary, would have been minded to decide that issue on the papers.

Orders

1. We make the following orders: 1. The application is dismissed. 2. If any party desires to make an application for costs of the appeal: 1. that party is to inform the other party within 14 days of the date of these reasons; 2. the applicant for costs is to lodge with the Appeal Panel and serve on the respondent to the costs application any written submissions of no more than five pages on or before 14 days from the date of these reasons; 3. the respondent to any costs application is to lodge with the Appeal Panel and serve on the applicant for costs any written submissions of no more than five pages on or before 28 days from the date of these reasons; 4. any reply submissions limited to three pages are to be lodged with the Appeal Panel and served on the other party within 35 days of the date of these reasons; 5. the parties are to indicate in their submissions whether they consent to an order dispensing with an oral hearing of the costs application, and if they do not consent, submissions of no more than one page as to why an oral hearing should be conducted rather than the application being determined on the papers.

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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 September 2021