Mr Car Proprietary Ltd v Archer

The Tribunal's decision

1. The vehicle was sold without any dealer's warranty.
2. The statutory dealer's guarantee did not apply to the vehicle because it had been driven more than 160,000 km by the time of sale to the respondents: s 68 (4) and s 69 of the Motor Dealers & Repairers Act (NSW) 2013.
3. In these circumstances, the Tribunal's decision was grounded upon a breach of the consumer guarantee of acceptable quality in s 54 of the Australian Consumer Law (NSW) (the ACL).
4. The Tribunal addressed each element of the cause of action that was in issue, in a context in which there were three reports from mechanics presented by the respondents and no such reports presented by the appellant.
5. The Tribunal's findings as to the primary facts included that: 1. The respondents' purchase was in response to an advertisement which included the statement that the vehicle was "Mechanically A1". 2. The respondents had paid the deposit on 3 February 2019 and the balance of the purchase price on 7 February 2019. The purchase price was $10,999.00 with a delivery charge of $232.00. The vehicle was delivered to them in Nelson Bay on 12 February 2019. 3. No Form 5 Motor Dealer's Notice was provided at the time of purchase but it was provided when the vehicle was delivered. The form noted an RMS Inspection Report number but the report itself was not supplied. 4. After experiencing some defects (the first was a fuel leak identified shortly after taking delivery) requiring repair work and obtaining two vehicle reports from Nelson Bay Mechanical Repairs Pty Ltd dated 8 March and 30 April 2019, the respondents demanded a refund of the purchase price and delivery charge. This occurred on 8 May 2019. The respondents' demand for a refund was refused by the appellant. 5. Next, the respondents took the vehicle to JL Mechanical Services who said they believed further repairs would cost over $3,000.00. This company provided a report on the condition of the vehicle which the respondents supplied to the appellant. The appellant still refused to refund the price. Hence, the claim was made.
6. The Tribunal's conclusions based on these facts and the contents of the reports from the mechanics (much of the contents of which the Tribunal set out in its reasons) were in substance that: 1. A claim existed for breach of the consumer guarantees in the ACL which was separate and distinct from the absence of any claim for breach of a dealer's warranty or guarantee. 2. In determining whether the vehicle was of acceptable quality within the meaning of s 54 (1) of the ACL consideration was to be given to any statements made about the vehicle: see s 54 (3) (c). The vehicle had been said to be "Mechanically A1" but it was not. 3. The vehicle did not comply with the acceptable quality guarantee. This was a "major failure" because the vehicle would not have been purchased by reasonable consumer acquainted with the nature and extent of the failure. 4. Because it was a major failure the respondents were entitled to reject the vehicle and request a refund, which they had done.

Grounds of appeal and submissions

1. As appeared from the Notice of Appeal in conjunction with the oral submissions made by Mr Iftikhar for the appellant (by telephone), the principal ground for seeking leave to appeal was a contention that the Tribunal was wrong in concluding that the vehicle was not of acceptable quality at the time of purchase, as demonstrated by three matters: 1. The RMS Inspection report showed that it was fit for purpose when sold. 2. The report from JL Mechanical Services contradicted the earlier reports from Nelson Bay Mechanical Services, at least, in relation to the main points from the Nelson Bay Mechanical Services reports, namely those concerning the radiator, misfiring and the head gasket. 3. What was meant by "Mechanically A1" had to be considered in light of the age of the vehicle. The appellant asserted that the vehicle was in a "fair condition for its age".
2. Mr Archer in his oral submissions (also by telephone) made reference to the many other issues referred to in the reports from the mechanics over and above those concerning the radiator and head gasket. He also submitted that the RMS report was of limited significance because it was not as comprehensive as the reports from the mechanics.
3. We agree with these points made by Mr Archer.
4. The first mechanics report (from Nelson Bay Mechanical Repairs Pty Ltd) referred to a suspected "wrong radiator fitted" and their second report referred to a coolant leak that was "possibly leaking into the head causing the misfire". It is true that the JL Mechanics report rebuts these suspicions or possibilities. It said that the radiator looked to be sufficient, that there was no indication of a blown heads gasket at the present time, the cooling system held pressure overnight and the engine started at "first kick" and idled smoothly.
5. However, all three reports referred to a substantial amount of present, as against suspected, defects all of which were referred to in the Tribunal's reasons. There was nothing to contradict the presence of these defects at the times when the inspections had occurred. We do not agree that the JL Mechanics report undermined the force of the earlier reports. If anything, it appeared to add to the breadth of the problems with the vehicle.
6. We also note that in Safi v Heartland Motors PL t/as Heartland Chrysler [2016] NSWCATAP 80 (at [101]) the Appeal Panel concluded that a series of individual or specific defects taken as a whole may constitute a major failure.
7. We agree that the RMS inspection report was of limited significance in the face of the reports from the other mechanics. The report itself makes the statement that whilst the vehicle has passed a NSW safety check it is not a comprehensive report on the vehicle's mechanical condition. Furthermore, there was no evidence as to what checks the RMS actually carried out.
8. We accept that the statement "Mechanically A1" should be interpreted in the light of the known age of the vehicle. However, that alone does not overcome the extent of the evidence as to defects. We add that it is clear that the Tribunal was cognisant of the age of the vehicle. Nor do we accept that this approach to the interpretation of this statement leads to a construction that what was conveyed was that the vehicle was in a "fair condition for its age".
9. Accordingly, we reject this principal ground of challenge to the Tribunal's decision.
10. We should mention that the respondents point out that the RMS inspection report reveals that the vehicle, at first, failed the safety check because of a tyre issue. It then passed after this was rectified. They say that if they had known of this defect when they purchased the vehicle a few days before the RMS inspection they would not have gone ahead with the purchase. However, in view of what we have already concluded about this principal ground relied upon by the appellant, there is no need for us to say anything more about this point, all the more so in circumstances where there were no findings by the Tribunal about this subject.
11. The Notice of Appeal also included the following points which we can reject with a short explanation: 1. The customer had acknowledged the statement in the Form 5 Motor Dealer's Notice that the vehicle had no dealer's guarantee and that the dealer was not required to repair or make good any defect which may exist or occur in this vehicle. However, as indicated in the Tribunal's reasons, this did not displace the dealer's liability under the ACL for breach of the consumer guarantee concerning acceptable quality. Such a claim under the ACL only becomes unavailable when a person has enforced any dealer guarantee: see s 77 of the Motor Dealers and Repairers Act (NSW) 2013. 2. It was asserted that the extent to which the respondents had driven the vehicle (about 3,000 kilometres) caused the issues, especially as the first report from Nelson Bay Mechanical Services reveals that it had been driven with no coolant in the system. The short answer to this point is that there was no proof that this was the case.

Orders

1. For the above reasons 1. Leave to appeal refused and appeal dismissed.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 19 November 2019