MacCaul v EFI Direct Pty Ltd t/as the Toy Shop Auto Imports

Introduction

1. On 12 November 2013, the Appellant saw an advertisement on the website Carsales.com for the sale of a 1995 Mitsubishi Lancer Evolution III Replica (the Vehicle). Relevantly, it was described in the advertisement as follows: This has to be one of the best Evo III's around. It has not seen track or rally and is in fantastic condition for its age. 27,000km. Fairly clean. Not rusty, worn out or flogged. My loss is your gain.
2. That day, the Appellant spoke to the sales representative, Timothy Fogarty, who also referred to the Vehicle as being "clean". However, the Appellant was also informed that the Vehicle was to be sold on an "as is, where is" basis, with no warranty and on the basis that it not be registered for or used on public roads in Australia. In short, it was sold as a rally car.
3. The Appellant did not conduct an inspection of the vehicle prior to purchase.
4. On 14 November 2013, the Respondent sent to the Appellant an invoice, which included the following: 1995 Mitsubishi Evolution 3 Works replica Sold with no rego and under the Vehicle Import Approval Reg 18(1)(c) Racing vehicle Sold "as is where is […] $13,000.00 Paid by Bank Transfer Warranty Details NO CREDIT OR REFUNDS ON ANY ITEM RETURNED OVER 14 DAYS UNDER ANY CIRCUMSTANCES. MUST BE ACCOMPANIED BY ORIGINAL INVOICE AND PRIOR RETURN AUTHORITY TO BE ISSUED BY US. **TURBOCHARGES AND COILOVERS CARRY NO WARRANTY WHATSOEVER.
5. The Appellant subsequently transferred $13,000 to the Respondent in full payment for the Vehicle. The Appellant took delivery on 4 December 2013.
6. Soon after taking delivery, the Appellant inspected the Vehicle and formed the view that it had serious accident damage and that previous repairs were poor. He spoke to Timothy Fogarty and emailed some photographs to the Respondent. The Respondent denied any knowledge of the alleged accident damage and offered to pay $500 out of good will.
7. The Appellant had the Vehicle towed to Navarone Panels Pty Ltd, which issued a written quotation for repairs in the sum of $9,315.24 ("the Navarone quotation").
8. On 13 February 2014, the Respondent obtained an estimate for repairs from Pymble Prestige Smash Repairs in the sum of $1,203.40 ("the Pymble Prestige quotation").

The Tribunal's Decision

1. At first instance, the Appellant sought to recover a full refund or, alternatively, the cost of repairs as set out in the Navarone quotation, plus costs incurred.
2. On 30 May 2014, the Tribunal rejected the Appellant's claim that the Vehicle was not fit for its intended purpose, that is, racing or rallying (at [55] of the Decision). The Tribunal, however, upheld the Appellant's claim that the Respondent had misrepresented the condition of the Vehicle to the Appellant (at [56]-[58] of the Decision) in that: 1. The radiator support assembly was corroding through the bottom and the chassis rail was rusty and thus to describe the Vehicle as "not rusty" was a misrepresentation; 2. The Vehicle had damage to both sills and poorly repaired damage to the right hand front skirt with exposed welds and thus it was not true to describe it as "in fantastic condition for its age".
3. The Tribunal determined, where the Appellant had potentially already made alterations to the Vehicle, that a refund was not appropriate but that an award of damages was. The Tribunal preferred the lower estimate of the repair costs provided in the Pymble Prestige quotation to that set out in the Navarone quotation. The Tribunal took this view because it was not satisfied that the Respondent was responsible for all of the work the subject of the Navarone quotation and that there was no quotation in response to the Pymble Prestige quotation as to the cost of the work identified by it as being appropriate. At [61] of the Decision the Tribunal found: "There is much more than the right front skirt, the sills and the radiator support assembly included in [the Navarone quotation]". Accordingly, the Tribunal assessed damages by reference to the Pymble Prestige quotation and ordered that the Respondent pay the Appellant $1,203.40.

The Appeal

1. The Appellant now seeks to appeal the decision and seeks an order that the Respondent pay the Appellant the sum of $9,315.24, based on the Navarone quotation.
2. The Appellant in his Notice of Appeal dated 8 July 2014 relies on the following grounds of appeal: The member failed to: 1. Take into consideration the evidence put forward by the Appellant regarding the cost of the necessary repairs to the motor vehicle to make it fit for the purpose intended, ie rally car, being the estimate prepared by Navarone Panels Pty Limited dated 12 December 2013 in the sum of $9,315.24; 2. The member relied solely, in the question of quantum, on a quotation provided by the Respondent from Pymble Prestige Smash Repairs which organisation had not undertaken a visual inspection of the motor vehicle at any time and relied solely on photograph evidence to provide the estimate; 3. The member failed to give sufficient weight and consideration to the evidence put forward by the Appellant and the Respondent's failure to provide any written evidence prior to the decision being made in favour of the Appellant. 4. The member failed to consider the provisions of s.54, s.55 and s.56 of the Competition and Consumer Act, 2010 (Schedule 2, Division 1, Subdivision A) ("the Consumer Act") and in particular the consumer guarantees contained therein in that: a. A supplier guarantees that the goods are of acceptable quality when sold to the consumer; b. A supplier guarantees that the goods will be reasonably fit for any purpose the consumer or supplier specified; c. A supplier guarantees that their description of goods is accurate; and d. A supplier guarantees that there will be no hidden defects.
3. Of these grounds, Grounds 1-3 do not raise questions of law but rather seek to assert that the Tribunal erred in consideration and assessment of the evidence. In these circumstances, under s 80(2)(b) of the Civil and Administrative Tribunal Act 2013 (the Act), the Appellant requires leave to appeal in respect of Grounds 1-3. The Appellant sought such leave in section 12B of the notice of appeal and submitted that the decision was not fair and equitable on the basis of the matters raised in grounds 1-4 (which have been set out above).
4. Ground 4, however, raises a question of law and accordingly leave to appeal is not required under s 80(2)(b) of the Act in respect of that ground.
5. The Appellant sought orders on the appeal as follows: 1. EFI Direct Pty Ltd t/as the Toy Shop Auto Imports [the Respondent] is to pay Allan MacCaul [the Appellant] the sum of $9,315.24 within thirty (30) days from the date of these orders 2. That EFI Direct Pty Ltd t/as the Toy Shop Auto Imports is to pay the costs of Allan MacCaul pursuant to s.60 of the Civil and Administrative Tribunal Act, 2013 in the sum of $1,650.00 within thirty (30) days from the date of these orders. Or: In the alternative 1. That EFI Direct Pty Ltd t/as the Toy Shop Auto Imports is to pay Allan MacCaul the sum of $13,000.00 by way of full refund within thirty (30) days from the date of these orders. 2. That upon receipt of the sum referred to in clause 1 above, Allan MacCaul will make the motor vehicle available for collection by EFI Direct Pty Ltd t/as the Toy Shop Auto Imports at the cost of EFI Direct Pty Ltd t/as the Toy Shop Auto. 3. That EFI Direct Pty Ltd t/as the Toy Shop Auto Imports is to pay the costs of Allan MacCaul pursuant to s.60 of the Civil and Administrative Tribunal Act, 2013 in the sum of $1,650.00 within thirty (30) days from the date of these orders.
6. The Respondent, in its Reply to Appeal dated 22 September 2014 and lodged on 1 October 2014, responded to the Appellant's grounds of appeal to the following effect: 1. the quotation obtained by the Appellant was excessive and would place the subject vehicle in a condition well beyond that required of a race car; 2. there was no evidence as to whether or not the structural integrity of the vehicle was compromised; 3. the Respondent had no knowledge of the intended purpose of the car; 4. the Appellant had ample opportunity to inspect the car prior to sale; 5. the Appellant bought the car with no warranty being supplied by the Respondent in that it was sold "as is where is"; and 6. on 10 July 2014 the Appellant cashed the cheque supplied by the Respondent in the sum of $1203.40, which, it was submitted, amounted to a deemed acceptance and full and final settlement of the orders of the Tribunal by the Appellant.
7. The parties consented to the matter being determined by the Appeal Panel without an oral hearing. In any event, s 50(1)(a) of the Act expressly provides that, in so far as the present matter involves an application for leave to appeal, it may be dealt with on the papers. To the extent it needs to, the Appeal Panel has determined that in the present case it is appropriate to determine the matter on the papers and not conduct an oral hearing.

Ground 4 - Question of Law

1. It is convenient to deal with Ground 4 first. We understand that the Appellant's reference to ss 54, 55 and 56 of the Competition and Consumer Act 2010 (Cth) is intended to be a reference to ss 54, 55 and 56 of the Australian Consumer Law (NSW) ("ACL"). Under Pt 3 of the Fair Trading Act 1987 (NSW) (and in particular, s 28), Schedule 2 to the Competition and Consumer Act 2010, referred to as the Australian Consumer Law, applies as a law of New South Wales.
2. Section 54 of the ACL provides that where a person supplies, in trade or commerce, goods to a consumer, there is a guarantee that the goods will be of acceptable quality. Acceptable quality requires that the goods be fit for the purposes for which they are commonly supplied, that they are of acceptable appearance and free from defect, and that they be safe and durable. They are judged by reference to what a reasonable consumer, fully acquainted with the state and condition of the goods (including any defects of the goods) would regard as acceptable having regard to the nature of the goods, the price of the goods, any representations made about the goods and any other relevant circumstances relating to the supply of the goods. Furthermore, the goods will be taken as being of an acceptable quality if the reasons why the goods would otherwise not be of an acceptable quality have been specifically drawn to the consumer's attention in writing and those reasons are apparent.
3. Section 55 of the ACL provides a guarantee by the seller that goods will be reasonably fit for any disclosed purpose, and for any purpose in respect of which the supplier represents that they are reasonably fit. A disclosed purpose is any particular purpose (whether or not they are commonly supplied for that purpose) for which the goods are being acquired if the consumer makes that purpose known to the supplier (expressly or by implication). However, s 55 will not apply where the consumer did not rely on, or it would be unreasonable for the consumer to rely on, the skill or judgment of the supplier in determining whether or not the goods would be reasonable fit for the disclosed purpose.
4. Section 56 of the ACL provides a guarantee relating to any goods that are sold by description, that the goods will correspond to that description.
5. The Appellant contends that the Tribunal failed to consider the abovementioned provisions, particularly whether: the Vehicle was of acceptable quality; it was reasonably fit for the purpose specified; and a description of goods was accurate.
6. The Tribunal made reference to the ACL in the cover sheet and at paragraph [3] of the Decision. Although the Tribunal does not refer to the relevant sections of the ACL in terms, it is clear from the Decision that consideration was given to the relevant matters in relation to the application of the relevant sections of the ACL, about which the Appellant now complains.
7. Before the Tribunal, the Appellant put his case that the car sold was not as advertised and that the Respondent had made misrepresentations under the Australian Consumer Law. The Tribunal took into account at paragraphs [13] and [46] the Appellant's submission that the Vehicle was not as was advertised and that it was unsafe for its intended purpose.
8. The Tribunal further took into account the Respondent's submissions at [53]: as to whether or not the vehicle was of an acceptable quality and reasonably fit for its intended purpose; and that whether or not it could be registered for use on a public road was irrelevant as the vehicle was to be used as a race or rally car and was sold as such. The Tribunal also took into account the Respondent's submission that, to the extent that there had been previous repairs to the Vehicle, they were largely cosmetic which did not make the Vehicle not fit for its stated purpose.
9. The Tribunal held as significant at paragraph [54], the fact that the Appellant's own expert, Navarone Panels, did not assert that the Vehicle was not fit for the intended purpose of off-road rallying or racing. In the circumstances the Tribunal held at paragraph [55] that it was not satisfied that the Appellant had proved that the Vehicle was not fit for its intended use.
10. The Tribunal gave full consideration to the issue as to whether or not the vehicle was of acceptable quality and reasonably fit for the purpose specified and held that the Appellant had failed to prove that it was not. In the circumstances, there is no error on the part of the Tribunal for failing to refer in terms to the stated sections of the ACL. The Tribunal clearly had regard to the appropriate matters set out in the above mentioned sections and the Appeal Panel finds that there is no substance to that ground so far as it relates to ss 54 and 55 of the ACL.
11. The Appellant further contends that the Tribunal erred in failing to consider s 56 of the ACL as to whether or not the description of the Vehicle was accurate. This also raises essentially the same issue as to whether there had been any misrepresentation falling within s 18 of the ACL.
12. The Tribunal referred at paragraphs [3], [13] and [46] of the Decision to the Appellant's claim that the Respondent had made misrepresentations under the Australian Consumer Law and that the Vehicle was not as advertised. The Tribunal set out the terms of the advertisement at paragraph [25] of the Decision. The Tribunal dealt with this part of the Appellant's claim commencing at paragraph [56] of the Decision.
13. Taking into account all of the evidence, the Tribunal held at paragraph [57] of the Decision that, so far as the advertisement asserted that the vehicle was "not rusty", this was a misrepresentation as the evidence established that the radiator support assembly was corroding through the bottom and that the chassis rail was rusty and required cleaning. The Tribunal further held that to describe the Vehicle as being in "fantastic condition for its age" was simply not true in light of the fact that the Vehicle had damage to both sills, and poorly repaired damage to the right-hand front skirt, with exposed welds.
14. In those circumstances, and whilst the Tribunal did not refer in terms to s 56 of the ACL and treated the matter more as one of misrepresentation, which might fall within s 18, it did in substance have regard to the guarantee implied by law that the vehicle did not correspond to the description given to the Vehicle. It found in the Appellant's favour in relation to misrepresentation. Consequently, even if the Tribunal did err in not referring to s 56, the Appellant would be in no different position since the Tribunal upheld his misrepresentation claim.

Grounds 1- 3

1. As has been noted above, the Appellant requires leave to appeal in respect of grounds 1- 3.

Leave to Appeal from a Decision of the Consumer and Commercial Division

1. As the decision under appeal was made in the Consumer and Commercial Division of the Tribunal, under cl 12(2) of Schedule 4 of the Act, the Appeal Panel's discretion to grant leave is only enlivened if the Appeal Panel is satisfied that the Appellant may have suffered a substantial miscarriage of justice because: 1. The decision of the Tribunal was not fair and equitable; 2. The decision of the Tribunal was against the weight of the evidence; or 3. Significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
2. What constitutes a substantial miscarriage of justice was discussed, albeit in the context of s 6(1) of the Criminal Appeal Act 1912 (NSW), which is in similar terms, by the High Court in Mraz v The Queen [1955] HCA 59; (1955) 93 CLR 493 at 514. It [the proviso] ought to be read, and it has in fact always been read, in the light of the long tradition of the English criminal law that every accused person is entitled to a trial in which the relevant law is correctly explained to the jury and the rules of procedure and evidence are strictly followed. If there is any failure in any of these respects, and the Appellant may thereby have lost a chance which was fairly open to him of being acquitted, there is, in the eye of the law, a miscarriage of justice.
3. Accordingly, a substantial miscarriage of justice refers to a failure in the way a matter was conducted or decided which deprived the Appellant of a chance, that was fairly open, of achieving an outcome more favourable than that which occurred: Collins v Urban [2014] NSWCATAP 17 at [71].
4. If the Appeal Panel is satisfied that the Appellant may have suffered a substantial miscarriage of justice on one of the grounds referred to in cl 12, the Appeal Panel may grant leave: s 80(2)(b) of the Act. Accordingly, once the discretion is enlivened, the Appeal Panel is to determine whether to grant leave. In deciding whether or not to do so, it must be established that something more than that the primary decision maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact. Ordinarily it is appropriate to grant leave only in matters that involve: 1. Issues of principle; 2. Questions of public importance or matters of administration or policy which might have general application; 3. An injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; 4. A factual error that was unreasonably arrived at and clearly mistaken; or 5. The Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interest of justice for it to be reviewed See Urban at [84].

Should Leave be Granted in respect of Grounds 1- 3?

1. In light of the finding, which was open to the Tribunal, that the Appellant had not established that the Vehicle was not fit for the intended purpose of racing or rally driving, it was not incumbent on the Tribunal to take into consideration the cost that the Appellant contended would make it fit for the purpose intended. In any event, the Tribunal clearly had regard to the Navarone quotation and referred to it specifically at paragraph [62] of the Decision.
2. It was open for the Tribunal to come to the view, as it did, that the Respondent, by reason of the misrepresentation as to the state of the Vehicle and/or the guarantee implied by s 56 of the ACL, should be liable only for the cost of work done to put the vehicle into the state as represented or described. It was further open to the Tribunal to accept, as referred to in paragraph [63] of the Decision, the Pymble Prestige quotation, in circumstances where: the Appellant bore the onus of proof; the Navarone quotation included much more than was justified given the findings the Tribunal made in respect of the s 56 guarantee; neither expert was called to give evidence; and the Appellant did not provide a report in reply contesting the Pymble Prestige quotation.
3. In the view of the Appeal Panel, the Appellant's application for leave to appeal on these grounds should be rejected. For the Appellant to have succeeded in one of his claims before the Tribunal, he was required to prove not only that the vehicle was unsafe for the purpose of racing, and that it could never be made safe. There was no suggestion that the car was being sold in a road worthy state and it was clear that it was to be sold in an "as is" condition. The Appellant purchased the vehicle without undertaking any investigations, which would have revealed the nature of any defects about which he now complains. It is notable that upon the most cursory inspection upon obtaining possession of the vehicle on 4 December 2013, the Appellant came to the view that the vehicle was not to his satisfaction.
4. The Appeal Panel accepts the Respondent's contention that there was no evidence, either in the form of the Navarone quotation or otherwise, that the structural integrity of the Vehicle was compromised beyond repair. The fact that the Navarone quotation was proffered as being an amount needed to render the vehicle not only safe, but fit for rallying, makes it clear that this was not such a car. However, the Respondent was not obliged to provide a vehicle to the Appellant of a particular standard, other than it is of an acceptable quality for a vehicle of this kind, description, age and price and any other circumstances including any representations made in respect of it.
5. Furthermore, the deficiency in the Appellant's evidence was made clear by the Tribunal at [40] of the Decision in that the Navarone quotation addressed itself to matters which could not properly be the subject of any claim. The Decision also makes it clear that the only matters which could properly be thought of as structural were those set out at [39], the total cost of which was approximately $2670.00. However, as referred to above, it was not incumbent on the Respondent to provide a vehicle where the matters set out in [39] had been carried out to the Appellant's satisfaction.
6. In any event the Appellant chose to purchase the car without an inspection. This is particularly significant where he knew that he was buying it with no warranty being supplied by the Respondent and that it was sold "as is where is".
7. In the circumstances and in light of the Tribunal's finding as to liability for misrepresentation, the Appeal Panel is not satisfied that the Appellant may have suffered a substantial miscarriage of justice.
8. Further, the Appeal Panel would not exercise its discretion to grant leave in any event. Even if the Tribunal was arguably wrong in the conclusion arrived at or there is a bona fide challenge to an issue of fact, there are no relevant issues of principle to determine, the appeal grounds do not raise any questions of public importance or matters of administration or policy which might have general application and there is no plain and readily apparent error identified so that it would be unjust to allow the finding to stand.

Respondent's Contention

1. The Respondent asserts that the Appellant has cashed the cheque supplied by the Respondent in the sum of $1203.40 dated 30 May 2014 on 10 July 2014, which it is suggested is "deemed acceptance and full and final settlement of the orders of the Tribunal by the Appellant." In light of the decision that the Appeal Panel has reached, there is no need to come to a final view about it, however, in circumstances where no stay of proceedings was sought by the Respondent, the Appeal Panel would not be inclined to come to that view.

Conclusion

1. Accordingly, on Grounds 1-3, the Appeal Panel refuses the application for leave to appeal and on Ground 4, the Appeal is dismissed.

Costs

1. The Appellant seeks an order for costs in respect of delay by the Respondent in complying with the timetable and providing material late.
2. Pursuant to s 60(1) of the Act, each party to proceedings in the Tribunal is to pay the party's own costs unless, pursuant to s 60(2) of the Act, it is satisfied that there are special circumstances warranting an award of costs. This includes, pursuant to s 60(2)(b) of the Act, where any party has prolonged unreasonably the time taken to complete the proceedings.
3. The matter was conducted on the papers with the consent of both parties, thus saving costs to both parties. The Appeal Panel accepts that there has been some delay on behalf of the Respondent in complying with the timetable as the matter was prepared for hearing. However, the Appeal Panel does not find the delay to be unreasonable or to have added to the costs incurred by the Appellant. It is also noted that the Appellant was otherwise unsuccessful in his application for leave to appeal and in his appeal and the Appeal Panel declines to make any orders as to costs.

Orders

1. Accordingly, the Appeal Panel makes the following orders: 1. On Grounds 1 to 3, leave to appeal refused. 2. On Ground 4, the appeal is dismissed. 3. Appeal dismissed. 4. The order of the Tribunal ordering that the Respondent pay to the Appellant the sum of $1,203.40 is confirmed. 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: 03 June 2015