The Applicant's Loss in respect of misleading and deceptive conduct
Even if the Tribunal had decided differently the issue of causation (reliance), I am not satisfied that the applicant has established on the balance of probabilities loss or damage by reason of the misleading and deceptive conduct in an amount of $11,500.00 or in any lesser amount.
The applicant's case for loss and damage is based upon the Appelt valuations dated 1 April 2015. Such valuations disclose a market value (as at July 2013) for a 2004 Mitsubishi Evolution VIII MR vehicle that has travelled 101,600 kilometres as $18,500.00. On that basis it is submitted that the applicant's loss is $11,500.00 being the difference between the $30,000.00 he paid for a vehicle that had (contrary to the odometer reading on the sale contract and warranty documents) travelled 101,600 kilometres, and the true market value ($18,500.00) of such vehicle. As indicated, the applicant also seeks other consequential losses including interest paid to his financier, extra premiums paid to his insurer and the cost of repairs to the vehicle.
Mr Kristian Appelt of AutoValuation was contacted by telephone and gave oral evidence to supplement the evidence in the Appelt valuations. Mr Appelt acknowledged that he had not read or agreed to be bound by the Expert Witness Code of Conduct; indeed, he indicated to the Tribunal that he was unaware of the Code of Conduct.
On the other hand, the dealer submitted the evidence establishes that the subject vehicle even with an odometer reading of 102,000 kilometres had a retail value of at least $30,000.00 and that in such circumstances; no loss was suffered by the applicant. Principally, the dealer relies upon the Bedrock Motors Report which indicates a retail value of between $32,000.00 and $34,000.00 for a 2004 Mitsubishi Lancer Evolution VIII MR vehicle which had travelled 102,000 kilometres.
In addition, the dealer relied upon other evidence as to the retail value of a 2004 Mitsubishi Lancer Evolution VIII MR vehicle which had travelled at least 101,600 kilometres including a letter from Edward Lee's Japanese Auto Centre Pty Ltd dated 2 August 2014 indicating a retail value of $32,000.00 for 110,000 kilometres, a letter from Elite Motor Sports dated 2 September 2014 indicating a retail value of between $31,000.00 and $35,000.00 for 100,000 to 120,000 kilometres, and a Sinergy Motorsport Valuation Certificate dated 2 October 2014 indicating a retail value of $30,000.00 for 100,000 kilometres. As well, the dealer tendered as evidence in its case, online sales price information from www.carsales.com.au dated 24 August 2014 indicating a retail value of $30,000.00 for 123,000 kilometres.
The applicant submits that the dealer's evidence as to valuation carries no evidentiary weight in the Tribunal's determination. It is said that the professional expertise of those providing the evidence (including the Bedrock Motors Report) is to be doubted and further that such evidence is not based on a physical inspection of the subject vehicle. In particular, the applicant says the dealer's valuation evidence is based on (flawed) assumptions that the subject vehicle was roadworthy and also that such evidence does not take into account that the subject vehicle had rust in hidden and less accessible areas.
I prefer the dealer's valuation evidence. As indicated, I am not convinced in the particular circumstances of this case that the absence of a physical inspection of the subject vehicle by Mr Jevremovic (or indeed any of the other persons providing valuation evidence in the dealer's case) means the Tribunal must disregard such conclusions as to the retail value of the subject vehicle as at July 2013. For reasons more particularly set out below, the applicant has not established, on the balance of probabilities, that the subject vehicle lacked roadworthiness on 10 July 2013. Any issue with the tyres at the time of sale was addressed by the dealer paying $740.00 for brand new tyres and bearings after mediation with NSW Fair Trading.
Nor am I persuaded as to the applicant's contention that Mr Jevremovic is not credentialed to give the evidence in the Bedrock Motors Report. I am satisfied as to Mr Jevremovic's knowledge and experience in the relevant field of the Tribunal's enquiry. I note the acknowledgment in his report dated 26 February 2015 that he read and agreed to be bound by the Expert Witness Code of Conduct (a requirement of the Tribunal's Practice Direction 3).
Accordingly, I find that the retail value of the subject vehicle on 10 July 2013 was at least $30,000.00 and that the applicant did not suffer any loss or damage by reason of a misleading and deceptive representation as regards the kilometres travelled of the subject vehicle at the time of sale.
[2]
Whether there has been any contravention by the dealer of the consumer guarantees in the ACL and/or breach of contract under the general law
Other than the allegation of odometer tampering, the applicant alleges he has suffered loss and damage by reason of breaches of contract or contravention of the consumer guarantees because the subject vehicle was not roadworthy at the time of sale and had rust in hidden areas. The particular issues as to the nature and extent of repairs required to make the subject vehicle fit for purpose and of acceptable quality are put in the affidavit of Brenton Grigg of Fours N More Automotive Repairs sworn 25 February 2015 attaching copies of a letter dated 8 January 2015 and invoices dated 17 July 2013, 3 October 2013 and 7 February 2014.
On the other hand, the dealer relies upon the Comptune correspondence. Mr Simon Fell of Comptune Engineering was asked to review photographs of rust on the vehicle on the subject vehicle and found: "while rust is apparent, the degree of rust is not extensive, not significant, and not capable of rendering the subject vehicle unroadworthy, unsafe or unfit to drive. The photographs show that the surface rust is ordinary wear and tear": see letter dated 8 October 2014. This conclusion is supported by the applicant's own documents (document 34 in the applicant's first bundle for the hearing in July 2014) where the applicant states on 24 September 2013: "I bought my car from Sydney, 34,000 KM but its got surface rust on few components … otherwise a good car".
The applicant bears the onus of establishing his case in respect of repairs, on the balance of probabilities. He relies on the evidence of Mr Grigg. No other mechanic gave evidence in the applicant's case. The Tribunal is not satisfied that Mr Grigg's statements in his affidavit and in the letter of 8 January 2015 attached to his affidavit establish the subject vehicle was unfit for purpose and of unacceptable quality. There are inconsistencies in Mr Grigg's evidence which cause me to doubt its reliability to support the applicant's contentions that the subject vehicle was not roadworthy, not safe and therefore unfit to drive. For example, in the Tax Invoice dated 17 July 2013, Mr Grigg states: "Check brakes all round Fr45% Rr60% + all rotors just above minimum thickness. Will need replacing next pad change." Yet in the letter dated 8 January 2015, Mr Grigg says under item 3: "3. Brake Disc/rotors are very worn/lipped and will require replacing as on minimum thickness … we removed all 4 brake pads and rotors".
I prefer the evidence of Mr Fell of Comptune. I find that the original brakes were roadworthy at the time of sale, that many of the repairs done by Fours N More Automotive Repairs were outside the dealer's warranty or related to ordinary wear and tear items, and that some of the works done by Fours N More were performance modifications (not repairs) to the subject vehicle.
In the circumstances, and having regard to the fact that the dealer paid the cost of supplying new tyres to the subject vehicle, I am not satisfied on the evidence that the applicant has made out a case for any relief on the basis of supplying a vehicle which was unfit for purpose and not of acceptable quality.
[3]
ORDERS
The Tribunal accepts the applicant may genuinely believe that the dealer failed him and that he is justified in bringing this claim for damages in the Tribunal. Certainly, having regard to the Tribunal's earlier finding as to misleading and deceptive conduct by reason of the incorrect odometer reading on the sale contract and warranty documents, it cannot be said, in my opinion, that the applicant has brought a frivolous or vexatious case which is otherwise misconceived or lacking in substance: see s 55 of the Civil and Administrative Tribunal Act 2013 NSW (the "NCAT Act").
Nevertheless, the Tribunal must consider all of the evidence, objectively, in order to make findings of fact and then apply the law. Ultimately the Tribunal concludes that in the absence of findings as to relevant causation (particularly, reliance) on misleading and deceptive conduct, as to relevant breaches of contract or contravention of the ACL's consumer guarantees of fitness of purpose and acceptable quality, or as to any loss or damage suffered, it is neither fair nor equitable (see s 13 of the CCA) that the dealer be held liable for the damages now claimed by the applicant.
The dealer submits that I should refer the applicant for prosecution because of a contravention of s 71 of the NCAT Act. The dealer cites the circumstance that the applicant provided false and misleading information to the Tribunal at the first hearing in July 2014 (i.e. an alteration of the original Sinergy valuation). However, such submission does not arise for my determination on this application. I am not an "authorised official" who may initiate proceedings for an offence under the NCAT Act: see s 75. Further, I observe that any prejudice to the dealer arising from the applicant's alteration of the original Sinergy valuation during the hearing before another Member of the Tribunal in July 2014, was addressed in the Appeal Panel's decision to remit the parties' dispute to a differently constituted Tribunal with both parties having the opportunity to adduce fresh or additional evidence: see Prestige Auto Centre Pty Ltd v Apurva Mishra [2014] NSWCATAP 81.
In its submissions dated 22 June 2015, the dealer also requested an order for costs and asked to be heard on that matter. The matter of costs was not argued at the hearing on 2 April 2015 and 16 June 2015, although there are references to costs in the dealer's earlier written submissions: see, for example, the dealer's letter 27 February 2015. In considering whether it seeks an order for costs, the dealer should look at all of the Tribunal's findings of fact and law as set out in these Reasons. If it wishes to press the matter of costs, then the dealer should so inform the Deputy Divisional Registrar within 10 days from the date of publication of these Reasons and if the dealer wishes to make any further written submissions as to why an order for costs should be made, then those written submissions should also be filed within 10 days.
If such a claim is pressed then the applicant should file written submissions in reply within 20 days from the publication of these Reasons. At the expiration of that time the Tribunal will consider the submissions, if any, and will decide on the papers what order, if any, should be made.
If submissions on costs are to be filed, they should include submissions on s 60 of the NCAT Act and as to the 'special circumstances' to be taken into consideration.
Subject to the question of costs, the application must be dismissed.
D G Charles
General Member
Civil and Administrative Tribunal of New South Wales
3 September 2015
[4]
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: 08 October 2015
Parties
Applicant/Plaintiff:
Mishra
Respondent/Defendant:
Prestige Auto Centre Pty Ltd & Khan Motorcar Co Pty Ltd
This application came before me for formal hearing on 2 April 2015 and 16 June 2015. The application was on remit from the Tribunal's Appeal Panel. On 11 November 2014, the Appeal Panel had set aside orders of another Tribunal member which were made on 21 July 2014. The Appeal Panel then ordered a new hearing before a differently constituted Tribunal with both parties having the opportunity to adduce fresh or additional evidence: see Prestige Auto Centre Pty Ltd v Apurva Mishra [2014] NSWCATAP 81.
The applicant represented himself at the hearing. Apart from his affirmed oral evidence and the oral submissions made during the formal hearing, the applicant relied upon written submissions including submissions received by the Tribunal on 3 and 16 July 2015. In the presentation of his case, the applicant referred to some documents already provided to the Tribunal and the Appeal Panel for the previous hearings. These were copy documents within two manila folders which had been left with the Tribunal file from the hearing in July 2014.
Consistent with the Appeal Panel's order allowing the parties an opportunity to adduce fresh or additional evidence, the applicant also tendered into evidence a bundle of documents which had been provided to the Tribunal on 12 January 2015 ("Retrial Bundle"), and a further bundle of documents which had been provided to the Tribunal on 6 March 2015 ("Retrial Folder 2"), together with another folder of documents received by the Tribunal on 11 June 2015 ("June 2015 Folder") and three (3) Valuation Certificates of Mr Kristian Appelt of Auto Services Group Pty Ltd trading as AutoValuation dated 1 April 2015 (the "Appelt valuations").
Apart from the Retrial Bundle, Retrial Folder 2, the June 2015 Folder and the Appelt valuation, the applicant tendered affidavits of Benjamin Lippa (sworn 26 February 2015), of Brenton Grigg from Fours N More Automotive Repairs (sworn 25 February 2015) and of Mihir Lade (sworn 24 February 2015), as well as the signed statements of Jonathan Smith of Opimech International Ltd (dated 26 February 2015), of Todd O'Donnell (dated 24 February 2015) and of Keshav Shrestha (dated 8 March 2015). Also at the request of the applicant the Tribunal contacted Mr Jonathan Smith in New Zealand by telephone on both days of the formal hearing so that the Tribunal and the parties could ask Mr Smith questions on his statement dated 26 February 2015. The Tribunal also contacted Mr Appelt by telephone and the parties had an opportunity to ask Mr Appelt questions on his valuations.
The dealer appeared by its managing director Mr Dimitriy Akhmetov. As well as affirmed oral evidence and submissions during the formal hearing, Mr Akhmetov relied upon written submissions dated 2 April 2015 and 22 June 2015. The dealer also tendered supporting documents enclosed with correspondence to the Tribunal dated 9 September 2014, 10 October 2014, 13 February 2015, 27 February 2015, 24 March 2015, 26 March 2015 and 27 March 2015.
Other than the correspondence with submissions and supporting documents, the dealer tendered statutory declarations of Mr Akhmetov and Mr Carini, online sale price information from www.carsales.com.au, valuation appraisal correspondence from Japanese Auto Centre Pty Ltd (Philip Lee), from Elite Motor Sports (Maggie Tran) and from Sinergy Motorsports (Rob Redic), a valuation report with appraisal date 26 February 2015 from Mr Milan Jevremovic of Bedrock Motors Pty Ltd trading as Sydney Car Sales (the "Bedrock Motors Report"), and a letter dated 8 October 2014 from Mr Simon Fell of Comptune Engineering (the "Comptune correspondence").
The second respondent, Khan Motorcar Co Pty Ltd did not appear at the hearing. As previously indicated, the applicant sought no orders against the second respondent.
To do justice to the issues posed by the parties' respective cases I have given consideration to all of the evidence presented and the submissions made by the parties before, during and after the formal hearing. However, the evidence and submissions (whether written or oral) are quite extensive. It is simply not practicable for me to spell out in detail every step of my reasoning processes, or to refer to every piece of evidence. Moreover, my duty to give reasons does not require me to do so: see, for example, Moloney v Collins [2011] NSWSC 628 at [63] - [64]; cited with approval by the Tribunal's Appeal Panel in Akkari v Sartor [2015] NSWCATAP 79 at [48].
RELEVANT LAW
The provisions of the Australian Consumer Law 2010 (ACL) were adopted in New South Wales on 1 June 2011 pursuant to s 28 of the Fair Trading Act 1987 (NSW). The ACL applies in respect of goods and services of a kind ordinarily acquired for personal domestic or household use or consumption in amounts which do not exceed $40,000.00. Goods include used motor vehicles.
The ACL applies to proceedings in the Tribunal separate and distinct from the dealer's warranty: see Burton v Chad One Pty Limited Burton v Chad One Pty Limited [2013] NSWDC 301.
The ACL provides a corporation supplying goods and services in trade or commerce must not engage in misleading and deceptive conduct in respect of the sale of any goods and services (see sections 18 and 29 of the ACL). Further, there are consumer guarantees in respect of goods being of acceptable quality and fit for purpose (see sections 54 and 55 of the ACL).
Under s 18 of the ACL, a person "must not, in trade or commerce, engage in conduct that is misleading or deceptive, or likely to mislead or deceive". The conduct (by words, actions, or in certain circumstances, silence) must lead, or be likely to lead, persons to whom it is directed into error, and there is no requirement for an intention to mislead or deceive (Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191 at 198). This imposes a statutory obligation of strict liability. As intention is not relevant, the question is to be determined objectively by the Tribunal.
However, any misleading or deceptive conduct, or conduct likely to mislead or deceive, must cause the other party to sustain loss or damage, in the sense that there was reliance on the conduct: see, for example, Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at [26]-[29]; Poulet Frais Pty Ltd v The Silver Fox Company Pty Ltd (2005) 220 ALR 211 at [77]).
The measure of damages for misleading or deceptive conduct is analogous to the tortious measure of damages; that is, to put the party seeking relief in the position she or he would have been in had the tort not been committed. The Appeal Panel (at [40] - [41]) found that the preferred measure of damages in the present case, in the event of a finding by the Tribunal of misleading and deceptive conduct, was the difference in value between the amount the applicant paid for the vehicle and its true value at the time of sale, not at some later time. In the latter respect, the previous Member had calculated a difference in value based upon what the applicant had paid for the vehicle relative to its true value at the time of valuation. As a valuation at the time of sale was not before the Tribunal when the presiding Member made her decision on 21 July 2014, this was a reason for the application to be remitted to a differently constituted Tribunal where both parties would be allowed to adduce fresh or additional evidence.
Mishra v Prestige Auto Centre Pty Ltd & Khan Motorcar Co Pty Ltd [2015] NSWCATCD 106 | Case summary | Zoe
By s 54(1) of the ACL, there is a guarantee that goods supplied in trade or commerce are of "acceptable quality". Subsections 54(2) & 54(3) of the ACL state:
"(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) acceptable in appearance and finish; and
(c) free from defects; and
(d) safe; and
(e) durable;
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."
Pursuant to s 54(7) of the ACL, goods do not fail to be of acceptable quality if the consumer acquiring the goods examines them before purchase, and the examination ought reasonably to have revealed the goods were not of acceptable quality.
If the applicant proves breaches of the ACL, the Tribunal must determine an appropriate remedy. The remedies available are set out in s 8 of the CCA. Under s 13(1) of the CCA, the Tribunal "must make such orders as, in its opinion, will be fair and equitable to all the parties to the claim".