The applicant asserts on the basis of the evidence that he has produced that the facts of the matter are as follows.
The applicant is a Chinese national who lives in New South Wales. He is a university student, studying a master degree in Engineering Styles Robotics at the University of New South Wales, having come to Australia in January 2022. His first language is Mandarin, not English. Ms Li is a classmate of his.
The first respondent, Car Skinning Pty Ltd ("Car Skinning"), was registered as a company in NSW in 2015. It operates from a registered office at Bayview Street, Bexley and premises in Waterloo, both in NSW. Car Skinning hires cars out to customers from time to time. The second respondent, Performance Auto Trader Pty Limited ("Performance Auto Trader"), was registered as a company in NSW in 2019.
The two respondent companies are closely owned. They have common shareholders, Yun Gu (as to 35% of each company), and Ruhua Wu (55% in Car Skinning and 65% in Performance Auto Trader). Mr Wu is the sole director of both companies. Mr Liang is the sales manager for both companies. He is also a 10% shareholder of Car Skinning. The respondents also employ, or one of them employs, another person who was referred to in the applicant's evidence as "Zach".
On or around 15 October 2022, the applicant and Ms Li planned to go for a road trip to Kiama a few days later, on 17 October, for 2 days. Neither of them had a car, so they planned to rent car for 2 days for the trip. Ms Li corroborates that, adding that the applicants told her that he decided to look for a rental car company that offered rental cars with full cover rental car insurance as this was the first time for the applicant to drive a right-hand drive motor vehicle and he did not want to cause any dispute if he damaged the rental car.
On 15 October, the applicant saw an advertisement from the respondents on social media advertising that they had a car hire service. He added "Zach", who was the manager of Car Skinning to his WeChat contact list, and enquired with Zach through WeChat about the car hire service. The applicant went to Car Skinning's premises in Waterloo NSW the same day, to have a further discussion about renting a BMW M4. When the applicant was at Car Skinning's office, Zach told the applicant the price for renting a BMW M4 was $350 per day. The applicant asked Zach if any insurance was available. Zach told him that the respondents would purchase insurance for the applicant if he rented the car.
After he came home from Car Skinning's offices, the applicant had a further WeChat conversation with Zac and asked him how to deal with the insurance. The applicant asked Zach, "Brother. That insurance. How exactly does it work?" Zac replied with, "I'll help you with that when you come." The applicant produces a copy of that text message exchange in his evidence.
The applicant subsequently decided that he wanted to rent the car from Car Skinning. Ms Li swears that the applicant said to her at about this time words the effect that :
"I found a car rental company through social media, and I went to the car rental company to inspect the car. It was a BMW M4. Now I understand the process of car rentals. The staff from the car rental company told me that they can buy a car rental insurance for us on the day of picking up the car."
Two days later, on 17 October, the applicant and Ms Li went to Car Skinning's office to rent the car. They met with Mr Liang. During this meeting, the applicant asked Mr Liang about the scope of the car insurance. Mr Liang that everything was covered by the insurance. Mr Liang took personal information from the applicant, including his name and credit card details for the purpose purchasing car insurance. He used a computer at the premises to purchase insurance online. He gave the applicant the insurance policy number and asked him to keep record. Ms Li says that Mr Liang told the applicant:
"I have full coverage on my car in your name, and this insurance covers everything. The premium is automatically charged to your credit card. When you return the car, call the insurance company to cancel this insurance. Tell the insurance company you will sell the car and the insurance will be cancelled and you will not be charged for the premium."
Mr Liang produced a basic form of contract, telling the applicant that he had to sign the contract to rent the car. The contract signed by the applicant stated in part (the bold and underlining was in the original):
AGREEMENT BY A LICENSED DRIVER WHO IS LEASING VEHICLE
I acknowledge that by asking for, and participating in the leasing, I am responsible for…
1) all damage to the leasing vehicle if I am "at fault" or cannot identify nor have details of the person "at fault"
2) damage that is caused by the vehicle in my control
3) theft or loss of the vehicle
4) all fines, regardless of when issued by the relevant authority during the leasing period according to the times and date below
Start Time & Date 17/10/2022 18:07
Finish Time & Date [left blank]
Furthermore, I state that in such an event, I will pay for the costs of repairs to the vehicle &/or property collided with, subject to the lesser of 2 agreed quotes including…
a) actual cost of repair
b) any towing fees
c) any excesses
d) any fines
e) cost of replacement vehicle of similar condition if required
In the case of a catastrophic incident where the cost to repair, is greater than the asking price of the vehicle, I am willing to pay the purchase price within 14 days.
Cost of lease: … $350.00/CALENDER DAY [sic]
Registration Number … Car Make & Model BMW M4
Odometer out:… Special Condition: 2 days in 250 Km.
$2.00 per kilo if exceeds 250 Km
…
Name [The applicant] …
Signature [signed] Date 17/10/2022
Dealer Representative …
Signature [signed] Date 17/10/2022
The applicant paid Car Skinning a deposit of $1,500 by electronic funds transfer (even though no such deposit had been mentioned in the contract described above) and drove the car away.
The insurance policy obtained by the respondent for the applicant was not the insurance policy that is normally obtained specifically for a hire car. Instead, Mr Liang had used the website, www.allianz.com.au, to generate a comprehensive car insurance policy for the car as though the applicant was the owner of the car. According to the policy detail schedule later obtained by the applicant for that insurance policy, the insurance policy concerned provided for:
1. the applicant (who was 18 years old) was named as the policy holder and as the main driver of the car;
2. the cover type was "comprehensive";
3. a coverage period of 12 months, from 17 October 2022 until midnight on 16 October 2023;
4. a basic excess of $2,000 plus a further excess of $1,000 for a driver aged under 25 years;
5. an agreed value of $60,000;
6. the agreed usage of the car, which was described as:
"The car is primarily used for private use only.
The car travels approximately 0 km - 7,500 km per year"
1. a note that the car was parked overnight in a carport at Waterloo NSW;
2. a note that there were no modifications to engine, body or paint on the car; and
3. a total annual premium of $6,401.83, payable by a first month's premium of $533.44, followed by (11) ongoing monthly premium payments of $533.49.
The policy wording produced by the applicant for the policy states separately that:
"Usage exclusions
There is no cover if:
• your car is used to carry passengers for hire, fare or reward - for example, for taxi or rideshare services
…
and this causes, gives rise to or is in any way connected with the loss, damage or liability."
The policy document also recited that the applicant had a duty to take reasonable care not to make a misrepresentation to Allianz, and that the applicant must answer Allianz' questions honestly, accurately and to the best of his knowledge. It also noted that if the applicant did not meet this duty Allianz may reject or not fully pay the cost they claim and/or cancel the policy.
Allianz charged the applicant's credit card $533.44, for 1 month's premium under the insurance policy the next day, 18 October. Also on 18 October, the applicant and Ms Li drove the car to Kiama on the NSW South Coast. While manoeuvring the vehicle in the underground car park of a hotel there, the applicant caused the car to collide with a concrete pillar on the right-hand side and an adjacent vehicle on the left side, damaging both the car and the other vehicle. Panels on the right-hand (drivers) side of the car, including the door and the fixed panel immediately to the rear of the door were pushed in and crumpled in the collision. There were also scratches on the other vehicle.
Starting at about 4:53 PM, the applicant had a WeChat text message conversation with someone representing Car Skinning, in which he sent a photograph showing the damage to the car and asked if he could claim the damage on the insurance. The representative wrote "Luckily you bought insurance" before asking for the policy number, more photographs and video of the damage, details of the location and of any witnesses, stating also "The original policy is in your mailbox. Send me that. We'll talk about the rest after you get back tomorrow. I'll look at how to make the claim." The representative subsequently added:
Have to make a insurance claim [sic]. You will need to pay the excess fee and some handling and operating fees. We'll talk after you get back."
The applicant returned the car to the respondents the next day. While he was there Mr Liang initially withheld returning his passport and requested that he pay compensation for the damage to the car. Mr Liang told the applicant that to take his passport back he had to choose 1 of 3 options - either:
1. purchase the car from the respondents;
2. make an insurance claim immediately and pay the respondent's $350 per day for compensation until the car was fixed; or
3. wait one month before making an insurance claim, paying the respondents $4900 compensation for loss of income over that month due to the damage to the car (which was equal to 14 days' lost income per month).
He further asserts that the respondents' representatives told him that the second option was difficult, saying:
"… if I lodge an insurance claim immediately, the insurance company will suspect you of fraud and the claim will take up to about 2 months to settle, so you have to pay $350 per day in advance for a total of 30 days of so-called "lost wages".
Fearing that his passport would not be returned to him, the applicant chose the third option. At his direction, Ms Li paid Car Skinning $8,482 by electronic funds transfer that evening, which the respondents calculated to cover:
1. $250 to fix a wheel on the car and $1000 to fix a front lip body kit, which the respondent said would not be covered by the insurance;
2. $3000 for the insurance excess fee under the policy;
3. $5600 for 16 days' rental at $350 per day; (being the 2 days' rental just used ($700) and $4900 compensation for the 14 further days' lost income, just described); and
4. $132 for exceeding the agreed 250 km distance limit by 66 km,
(a total of $9,982), less the $1500 deposit already paid by the applicant. Car Skinning issued a receipt to the applicant for $9,982, setting out those component amounts and gave the applicant's passport back to the applicant.
On 3 November, the applicant asked the respondents by WeChat shall I come on Saturday to deal with the insurance stuff?" Mr Liang responded that evening, writing "Maybe the week after next week. It has only been less than a month", adding "I'll go to the company tomorrow and see when to make the arrangement for you". The next evening, 4 November, Mr Liang added "I'll update with you next week". He produces translated copies of WeChat messages to that effect.
A week later, on 11 November, the applicant asked Car Skinning whether there was any news and whether he needed to come to the respondents. They had a message exchange to the following effect:
Car Skinning: "No need. The car is still in the shop. We will renew the insurance for another month. It's safer this way."
"You don't need to pay. We will cover the one-month cost for you."
The applicant: "OKOK.
"You will contact me after you make the insurance claim, right?"
Car Skinning: "Yes."
The applicant: "Then roughly when will the claim they made?
"I wish to plan my time accordingly as my final will be in this month."
Car Skinning: "I'll let you know when I make the claim at the beginning of next month."
The applicant: "Then what should I do about the direct debit for the insurance?"
"I can cancel it after you make the claim, right?"
"Are you going to transfer the one-month insurance (cost) to me?"
Car Skinning: (by audio message converted to text) "yes. I'll transfer it to you. I'll transfer it to you then. Don't worry."
He again produces translated copies of WeChat messages to that effect.
On 25 November 2022, the applicant contacted Car Skinning, again by WeChat, asking whether Car Skinning was making the insurance claim that day. Car Skinning provided him with contact details for a person named "Frank" at an address in Five Dock. The applicant went to that address the next day, which was a car repair place called Empire Body and Mechanical Repairs ("Empire"). He met Frank while he was there, who lodged an insurance claim in the applicant's name. Frank also had a phone call with someone (who the applicant believes was Zach) in which Frank said that he had listed the applicant is the owner of the car and would need help to fake some documents for the purpose of claiming insurance. Frank then told the applicant that he must tell Allianz that he (the applicant) was the owner of the car.
On 30 November 2022, the applicant received a notice of investigation from Allianz. He subsequently had a conversation with Frank by WeChat in words to the effect of:
The applicant: Bro, I received an e-mail today [from Allianz]
Frank: Hum, they are going to investigate you
If he calls you, you just make an appointment with him
The applicant: Ok
Frank: Tell him what happened
But don't tell them we have talked
The Applicant: Huh, I see
The applicant says that Allianz made a request on 1 December that he provide documents proving his ownership of the car. At about this time the applicant also received a penalty notice from the police, fining him $481 for negligent driving in the hotel car park in Kiama at about 11 PM on 18 October.
The applicant produces a WeChat conversation with a representative of the respondents dated 2 December, in words to the effect of:
The applicant: Excuse me
The insurance company wants to make an investigation with me next Monday
Could you please find these documents for me
Frank said I should tell them the car is mine
Could you issue an invoice or something like that for me
…
Could you please send me the copies of car purchase contract and invoice first
I want to make some preparations
He then says that he received a vehicle sales agreement between then and 5December, which he says he was told to sign. He signed the agreement on his iPad, using his finger. The vehicle sales agreement (which the applicant has produced in his evidence, and says is a fake document that was produced to show Allianz) was pre-dated as executed on 17 October 2022, and detailed terms for a sale of the car from Performance Auto Trader to the applicant for a price of $55,000 (described as received from the applicant for the purchase of the car with no remaining balance payable) with a delivery date of 17 October 2022. The copy of that purported vehicle sale agreement in the applicant's evidence is counter-signed by Mr Liang as manager for Performance Auto Trader, as the seller of the car.
The applicant has also produced a copy of a tax invoice from Performance Auto Trader to himself, also dated 17 October 2022, listing the car and a sale price of $55,000 which was said to be paid in full. He says that he also received that tax invoice on 1 or 5 December 2022, and that it is also a fake document prepared by others and given to him for him to show Allianz.
He also says that at about this time representatives asked him to go to Service NSW to transfer the title of the car to the applicant's name and then transfer the title back to them once the insurance process was complete. He says that he did not get the title transferred as he did not want to pay further fees.
At about 1:30 PM on 5 December 2022 the applicant participated in a video interview with an investigator who was acting for Allianz. An interpreter was also present. The interview took about 90 minutes to complete, after which a transcription was prepared for the investigator. The applicant produces a copy of the transcript, in which the investigator questioned him about the accident on 18 October, the establishment of the insurance policy and the purchase of the car. The applicant says that he told the investigator that he purchased the car and took out the insurance policy on 17 October, because that is what the respondents representatives told him to say.
The applicant says he felt he did the wrong thing by providing incorrect information to Allianz' investigator. He obtained advice from Redfern Legal Centre over the following days, after which he booked a second interview with Allianz' investigator. That interview was held on 24 December 2022 - also by videoconference. An interpreter was again present for the interview. The interview took about an hour, following which the investigator provided the applicant with a transcript of the interview. The applicant produces a copy of that transcript, in which he says that he wished to correct the information he provided to the investigator on 5 December after speaking to the legal centre. The answers he gave the investigator on that occasion essentially correspond with the evidence that he has given in these proceedings, as summarised above. During the interview, the investigator suggested that the applicant ring Allianz and cancel the policy because the car was not his vehicle.
The applicant took the investigator's advice and cancelled the policy after the interview. On 27 December he received a refund of $407.76 out of the 3 months' insurance premium that he paid. The remaining balance of premiums paid by him that were not refunded was $1192.71.
On or about 5 January 2023, representatives of the respondents contacted Ms Li and told her that they will ask the applicant to pay the costs of repairing the car because of what he told Allianz' investigator, which caused the insurance claim to fail and that they would not refund any of the money that the applicant had paid to the respondents.
Subsequently, the applicant received from the respondents a copy of Empire's quote dated 7 January 2023, estimating the total cost of repairing the car to be $16,264.92. He has produced a copy of that quote in his evidence. That document does not identify the name or address of the owner of the car.
The applicant asserts that the amount claimed by the respondents is not reasonable and this suggests that he has obtained quotes from other car repairers at around $8000-$9000 only. He further asserts in his evidence that he would not have hired the car if the respondents had told him that the insurance arranged through Allianz did not cover the car, including because it was a rental car.
[2]
THE RESPONDENTS' DEFENCE
Mr Liang set out the respondent's defence to the applicant's claims in his oral submissions. As mentioned above, I have considered those submissions as unsworn evidence for the respondents on the issues to be decided. The applicant had the opportunity to respond to those arguments, which I will come to next.
Mr Liang said that the applicant originally dealt with Zach when he first made contact with the respondents by the WeChat app (although Zach did not give any evidence to the Tribunal about those dealings). The applicant then began dealing with Mr Liang when he came to the Car Skinning premises on 17 October and signed the rental agreement. Mr Liang says he told the applicant that there was a $350 per day rental charge and a $1,500 deposit at that point. He said that the respondents' services did not extend to placing insurance for clients who rented the respondents' cars.
Mr Liang said that he simply helped the applicant look for car insurance on the computer at the premises as a favour to the applicant, because the applicant was new to Australia, and had poor English. He said he did not know what insurance the applicant wanted and just helped him out by typing the search and the applicant's details into the computer for him.
Mr Liang asserted that the description of the collision given by the applicant to the respondents was that he had hit a column in the car park of the hotel because he turned the steering wheel too early. Mr Liang said that was later approached by police on or about 24 November, who asked him about the car being involved in a "hit-and-run" in Wollongong. He did not know about any hit-and-run until then.
Mr Liang said that he asked the applicant to talk to Frank at Empire, to give Frank the whole story and to ask Frank what to do as the next step. He said he has no idea of what was said in the conversations that took place between the applicant and Frank, or any conversation between Frank and Zach, and did not know about any fake contract. He said that the applicant had come back from seeing Frank at Empire and asked him for a contract and an invoice to purchase the car from the respondents, and that he had issued the contract and the invoice to the applicant on 5 December at the applicant's request. Mr Liang said that the purchase contract was backdated to 17 October because that was the date of the hit-and-run, and that this was done at the applicant's request.
Mr Liang then said that Allianz has not paid for the car to be repaired because the applicant cancelled the insurance policy, not because it was the wrong policy. He said that the respondents have requested the applicant to pay Empires costs of repairing the car, but he has not done so.
Mr Liang asserted the car was typically let out for 14 days in every month at $350 per day, so it typically earned $4,900 per month in income. As the car was fixed in January, he calculated that the respondents had lost rental income from the car over a 5 month period, which amounted to a total loss of $24,500 at those rates. He asserted that the Tribunal should order the applicant to pay that amount, together with the cost of repairing the car.
[3]
THE APPLICANT'S RESPONSE
The applicant asserted in reply that Mr Liang did not ask what insurance he wanted when he got the insurance for him on 17 October. Mr Liang asked only for the applicant's name, date of birth and credit card number, and then told him the policy number and that the policy documents would be posted by the insurer to the applicant. He asserted that Mr Liang should have told him that he could not get rental car insurance to cover the car, but what he did was to buy the wrong insurance - a comprehensive insurance policy - without telling the applicant what he had done.
[4]
JURISDICTION OF THE TRIBUNAL
The applicant claimed in his application that the respondents engaged in conduct that was misleading, deceptive and unconscionable, in breach of ss 18 and 21 of the ACL. The ACL is set out in Schedule 2 of the Competition and Consumer Act 2010 (Cth) (the "CC Act"). While the ACL is a law of the Commonwealth, Part 3 of the FT Act provides that the text of the ACL, as in force from time to time, also applies as a law of New South Wales.
Part 6A of the FT Act aims to provide for the straightforward resolution of disputes concerning the supply of goods and services to consumers by vesting the Tribunal with jurisdiction to hear and determine consumer claims up to the present value of $100,000. "Consumer" is defined widely for the purpose of the Part. It includes any natural person to whom a supplier has supplied, or agreed to supply, goods or services in the course of carrying on a business.
Part 6A also gives the Tribunal jurisdiction to make a wider variety of orders than contained in the ACL, including orders for compensation (up to a limited amount: s 79S) and order relieving a party from an obligation to pay money to another person: s 79N. The Tribunal may also make an order that requires the claimant pay to the respondent a specified amount of money: s 79O, if the Tribunal considers that to be appropriate.
I am satisfied on the evidence before the Tribunal that the Tribunal has jurisdiction to hear and determine the applicant's claim. For this purpose, I am satisfied on the evidence that:
1. the respondents are entities who supply cars in the course of carrying on businesses - either by hire (in the case of Car Skinning) or by sale (in the case of Performance Auto Trader): s 79D;
2. the applicant is a natural person and a "consumer" for the purposes of Part 6A (s 79D, including because it has not been asserted otherwise: s 79H);
3. Car Skinning supplied the car to the applicant by way of hire and Performance Auto Trader later agreed to supply the car to the applicant by way of sale: s 79G;
4. the applicant's claims against the respondents are "consumer claims" for the purposes of Part 6A: s 79E;
5. Car Skinning supplied the car to the applicant in New South Wales; further, the agreements between the applicant and the respondents were made in New South Wales and contemplated that the relevant supplies would be made in New South Wales: s 79K;
6. the causes of action relied on by the applicant first accrued within the 3 years before the application was lodged with the Tribunal: s 79L;
7. s 79M does not apply; and
8. the Tribunal has the power under ss 79N-79S to make the orders sought by the applicant.
[5]
CONSIDERATION
In order for me to determine the applicant's claim it is not necessary that I delve into the issues thrown up about the purchase and sale of the car and the information given to the Allianz investigator. The dispute can be resolved more simply than that.
For the reasons that I now come to, I am satisfied that Car Skinning did engage in misleading and deceptive conduct in breach of s 18 of the ACL when it rented the car to the applicant, entitling the applicant to the relief that he seeks. Further, because I am satisfied that the applicant must win on his claim for misleading and deceptive conduct under s 18 of the ACL, it is ultimately not necessary for me to decide the applicant's alternate claim for unconscionable conduct under s 21 of the ACL.
The following consideration is therefore limited to the applicant's claim for misleading and deceptive conduct under s 18 of the ACL.
[6]
Misleading and deceptive conduct - the applicable law
Section 18 of the ACL prohibits misleading and deceptive conduct in trade or commerce. That section provides:
18 Misleading or deceptive conduct
(1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
(2) Nothing in Part 3-1 (which is about unfair practices) limits by implication subsection (1)."
Section 2(2) of the CC Act defines "conduct" widely for the purposes of ACL s 18 (my underlining):
(a) a reference to engaging in conduct shall be read as a reference to doing or refusing to do any act, including the making of, or the giving effect to a provision of, a contract or arrangement, the arriving at, or the giving effect to a provision of, an understanding or the engaging in of a concerted practice;
(b) a reference to conduct, when that expression is used as a noun otherwise than as mentioned in paragraph (a), shall be read as a reference to the doing of or the refusing to do any act, including the making of, or the giving effect to a provision of, a contract or arrangement, the arriving at, or the giving effect to a provision of, an understanding or the engaging in of a concerted practice;
(c) a reference to refusing to do an act includes a reference to:
(i) refraining (otherwise than inadvertently) from doing that act; or
(ii) making it known that that act will not be done; and
(d) a reference to a person offering to do an act, or to do an act on a particular condition, includes a reference to the person making it known that the person will accept applications, offers or proposals for the person to do that act or to do that act on that condition, as the case may be.
Section 4 makes special rules about representations that are made with respect to future matters. That section provides:
4 Misleading representations with respect to future matters
(1) If:
(a) a person makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act); and
(b) the person does not have reasonable grounds for making the representation;
the representation is taken, for the purposes of this Schedule, to be misleading.
(2) For the purposes of applying subsection (1) in relation to a proceeding concerning a representation made with respect to a future matter by:
(a) a party to the proceeding; or
(b) any other person;
the party or other person is taken not to have had reasonable grounds for making the representation, unless evidence is adduced to the contrary.
(3) To avoid doubt, subsection (2) does not:
(a) have the effect that, merely because such evidence to the contrary is adduced, the person who made the representation is taken to have had reasonable grounds for making the representation; or
(b) have the effect of placing on any person an onus of proving that the person who made the representation had reasonable grounds for making the representation.
(4) Subsection (1) does not limit by implication the meaning of a reference in this Schedule to:
(a) a misleading representation; or
(b) a representation that is misleading in a material particular; or
(c) conduct that is misleading or is likely or liable to mislead;
and, in particular, does not imply that a representation that a person makes with respect to any future matter is not misleading merely because the person has reasonable grounds for making the representation.
For the purposes of determining that a party has engaged in misleading and deceptive conduct, it is necessary to first identify the alleged conduct and then to consider whether that conduct, considered as a whole and in context, is misleading or deceptive or likely to mislead or deceive. There are two elements: (1) the conduct must occur in the course of 'trade or commerce' and (2) the conduct must be 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) 149 CLR 191 at 198.
To be misleading or deceptive:
1. conduct must lead or be likely to lead into error;
2. there must be sufficient nexus between the conduct and an error or misconception on the part of another person;
3. causing confusing or questioning is insufficient
4. it is wrong to analyse particular words or acts in isolation, when they may well convey a different meaning when viewed in context:
Telstra Corporation Limited v Singtel Optus Pty Ltd [2020] FCA 1372.
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: Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at [26]-[29].
Silence can amount to "contravening conduct": Demagogue Pty Ltd v Ramensky [1992] FCA 851; (1992) 39 FCR 31. In Costa Vraca Pty Ltd v Berrigan Weed & Pest Control Pty Ltd (1998) 155 ALR 714 at 722-3, Finklestein J said:
"It is clear that a failure to provide information can be conduct which is misleading or deceptive. For the purposes of [s 18(1)] 'engaging in conduct' is defined in [s 2(2)(a)] as a reference to doing or refusing to do any act and by [s 2(2)(c)] a reference to refusing to do an act includes a reference to refraining (otherwise than inadvertently) from doing that act. … to determine whether [one] has contravened [s18(1)]… two questions arise for consideration. The first is whether the failure by [one] to inform [the other of the relevant matter] was misleading and deceptive conduct. The second question is whether the conduct was deliberate."
The facts and circumstances leading to the making of the contract are relevant to determining whether the conduct complained about was misleading or deceptive. In Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at 319, French CJ said:
"Characterisation [of the conduct] may proceed by reference to the circumstances and context of the questioned conduct. The state of knowledge of the person to whom the conduct is directed may be relevant, at least in so far as it relates to the content and circumstances of the conduct."
The question whether conduct is misleading or deceptive is a question of fact to be objectively determined by examining the course of conduct as a whole. It is also to be determined by an examination of the surrounding facts and circumstances as a whole: see e.g. Australian Competition and Consumer Commission v TPG Internet Pty Ltd 250 CLR 240; [2013] HCA 54, Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191.
Where a contract is entered into as a result of misleading or deceptive conduct, the principal remedy is that of damages. Section 236 of the ACL provides that where a person suffers loss or damage because of the conduct of another person which contravenes s 18(1), the claimant may recover the amount of the loss or damage by action against that other person. However, it is to be remembered that damages that may be awarded are in respect of a breach of statutory obligation and a statutory entitlement to damage caused by the contravening conduct.
[7]
Findings of fact
I am satisfied on the balance of probabilities that the facts of the matter relevant to the claim for misleading and deceptive conduct claim were as follows.
The applicant initially went to Car Skinning's premises at Waterloo on 15 October 2022 after making contact with an agent of Car Skinning (Zach) by WeChat. When he arrived at the premises, he spoke with Zach about renting the car and about purchasing insurance to cover the rental. The applicant expressly asked Zach if insurance was available for the rental. Zach told the applicant that Car Skinning could purchase the insurance for him if he rented the car. Later that day, the applicant asked Zach (or another agent of Car Skinning) by WeChat how the insurance works and was told, "I'll help you with that when you come".
The applicant returned to Car Skinning 2 days later to rent the car, where he met Mr Liang. As part of the process of signing the contract to rent the car, the applicant asked Zach and/or Mr Liang about the scope of the insurance for the rented car. Mr Liang used Car Skinning's computer to purchase a standard comprehensive insurance policy from Allianz in the applicant's name, using personal information he obtained from the applicant. Mr Liang said to the applicant, in Ms Li's presence, words to the effect of:
"I have full coverage on my car in your name, and this insurance covers everything. The premium is automatically charged to your credit card. When you return the car, call the insurance company to cancel this insurance. Tell the insurance company you will sell the car and the insurance will be cancelled and you will not be charged for the premium."
Mr Liang gave the applicant the policy number and told the applicant that the insurance policy documents would be posted directly to the applicant's home.
The applicant completed the process renting the car, paying Car Skinning a bond of $1,500 and providing his passport to Car Skinning, to be held as security for the return of the car. The agreement between the applicant and Car Skinning provided that the applicant would rent the car for 2 days at $350 per day, and that he would pay an excess mileage charge of $2 per kilometre for the additional distance travelled during the hire period beyond the initial 250 kilometres. The applicant drove the car away at about that point.
Mr Liang did not tell the applicant that he had purchased a comprehensive insurance policy for the applicant instead of rental car insurance. He also did not tell the applicant that the policy he purchased only covered the car for private use, and that it excluded from coverage cars that were used to carry passengers for hire, fare or reward, such as hire cars. Consequently, he did not tell the applicant that the insurance policy he had purchased for the applicant would not cover the car in the event that the car was damaged while it was hired by the applicant, or at least that there was a risk that it might not cover the car if it was damaged while the applicant had hired it.
As a result of taking out the comprehensive insurance policy, the applicant became liable to pay monthly instalment of insurance premium of just under $533.50 (rounded) per month.
On 18 October, the applicant drove the car to Kiama as he has alleged. Ms Li travelled with him. The car was damaged that night while the applicant was driving it in the car park of the hotel that the applicant was staying at. The side of the car was pressed against a column in the car park, pushing in and crumpling the driver's-side door and the panel immediately behind it. The car also came into contact with another car that was parked in the hotel carpark, damaging that car too. While it is possible that a wheel and a body kit on the car were damaged in that collision, no such damage has been proved in these proceedings.
I am satisfied on the evidence that there was no separate "hit-and-run" collision involving the car in Wollongong that day. I am satisfied that Mr Liang probably spoke with police officers in late November about a "hit-and-run" collision, but the collision they spoke about was the incident in the hotel car park described above, where the other car was damaged.
After the collision, the applicant had the WeChat conversations with either Zach or Mr Liang that he has described above, before returning the car to Car Skinning in the evening on 19 October. Mr Liang refused to return the applicant's passport to him unless he selected one of the 3 options described above. The applicant chose the third option and Ms Li paid Car Skinning $8,482 by electronic funds transfer that evening at his direction, receiving a receipt for the amounts described above, totalling $9,982. That amount included $1,182 for the hire fee and excess mileage charges and $8,800 for amounts claimed by Car Skinning as arising from the damage to the car.
A claim was ultimately made on the Allianz policy in late November 2022, about 5 weeks after the collision occurred. Allianz instructed an investigator to investigate the claim. He informed the applicant in late December that the Allianz policy did not respond to the claim because the car had been hired at the time the collision occurred. At his suggestion, the applicant cancelled the policy.
The applicant had paid 3 instalments of premium, totalling $1,600.42 before cancelling the policy in late December 2022. When he cancelled the policy, he received a refund of $407.76 for unused premium, reducing the net premium that he paid for the policy to $1,192.66.
Lastly, in early January the respondents provided to the applicant Empire's quote dated 7 January 2023, estimating the total cost of repairing the car to be $16,264.92. The respondents have not proved that the car has been repaired, or (if it was) that the repair costs matched the amounts set out in that quote.
[8]
Applying the law to the facts as found
I am satisfied on the evidence that by:
1. its representatives communicating with the applicant between 15 and 17 October 2022 in the way that the applicant has alleged (and I have found);
2. its representative, Mr Liang, using the computer on 17 October 2022 to purchase an Allianz comprehensive insurance policy in the applicant's name in the way that the applicant has alleged (and I have found); and
3. not telling the applicant of the matters that I have found were not told to him,
Car Skinning engaged in "conduct" within the meaning of s 2(2) of the CC Act to which s 18 of the ACL applies. Car Skinning engaged in that conduct in trade and commerce, as it occurred in the context of Car Skinning renting the car to the applicant in exchange for money.
The conduct that Car Skinning engaged in was misleading and deceptive or likely to mislead and deceive, within the meaning of s 18 of the ACL and the principles that I have set out above. Through the acts and omissions of its staff, Car Skinning represented to the applicant that:
1. the car was insured by the Allianz policy when he rented it as a hire car, against any damage that it might suffer while it was hired to the applicant, and
2. the car would be covered by the Allianz policy if it was damaged in the future, while it was rented to the applicant,
when that was not the case and it would not be the case.
Those representations were representations as to future matters, as described in s 4 of the ACL, in that they represented before the applicant rented the car that the car would be covered by the Allianz policy for damage that might occur in the future, while it was rented by the applicant. Car Skinning has not demonstrated that it had reasonable grounds for making those representations about those future matters. Consequently, the representations are automatically taken by s 4 of the ACL to be misleading.
In my assessment, it does not matter whether Mr Leong acted to get the insurance policy for the applicant as a favour to the applicant because the applicant's grasp of written or spoken English, or his familiarity with searching for insurance on the computer was poor, nor do I accept as relevant the assertion that Car Skinning normally did not provide insurance with its car rentals. That is different to what was represented to the applicant in the WeChat messages and at the Car Skinning premises when the car was rented. Distilled to its simplest level, Car Skinning undertook to obtain a sufficient insurance policy to cover the car while it was rented to the applicant and the policy obtained by Car Skinning (through Mr Leong) for the applicant did not do that.
The applicant was misled by Car Skinning's misleading conduct on those days, into believing that the two matters stated in subparagraphs (1) and (2), just described, were true and would be true in the future, when they were not true, and would not be true given the terms and conditions of the policy. The applicant therefore rented the car from Car Skinning in the mistaken belief that those matters were true and would be true. I am satisfied that the applicant would not have purchased the Allianz policy and that he would not have rented the car from Car Skinning if it had informed him of the true position about the insurance coverage for damage occurring to the car while it was rented to him. In this regard I am particularly persuaded that the applicant was concerned about his skill in driving the car as a right-hand-drive vehicle in Australia, compared to the left-hand-drive vehicles that are commonly used in his home country.
On this basis, I am satisfied that the applicant is entitled to compensation for the losses that he subsequently suffered as a result of damaging the car on 18 October, including the premiums that he paid to Allianz and his liability to Car Skinning and/or Performance Auto Trader for repairing the car after it was returned to them. He would not have incurred those losses if he had not hired the car from Car Skinning. Those losses therefore include:
1. the bond of $1,500 he paid to Car Skinning on 17 October; and
2. the additional $8,482 that he paid to Car Skinning when he returned the car to Car Skinning (which included a $3,000 excess that was ultimately not paid to Allianz or its repairer under the insurance policy); and
3. the net premium that he paid Allianz on the ineffective insurance policy ($1,192.66).
which total $11,174.66. From this must be deducted the $832 in fees the applicant paid for hiring the car from Car Skinning, which he received the benefit of through using the car for the 2 days and would have paid another car owner if he had hired a car from elsewhere. The net amount is $10,342.66. In my view it is reasonable for that amount to be paid within 14 days of the date of these orders.
The applicant would also be entitled to receive compensation for the further cost of repairing the car, which are claimed to be $16,264.92, if he had paid that amount to either respondent. However, as the applicant has not paid that amount to either respondent, the appropriate order to make is that the applicant is not obliged to pay that amount to either respondent.
[9]
CONCLUSION AND ORDERS
As the applicant has been wholly successful on its claim for misleading and deceptive conduct under s 18 of the ACL, I make the following orders:
1. The first-named respondent, Car Skinning Pty Limited, must pay the applicant, Yuheng Ni, the sum of $10,342.66 on or before 23 June 2023.
2. The Tribunal declares that the amount of $16,264.92 claimed by the respondents is not due or owing by the claimant to either or both respondents.
3. The balance of the proceeding is dismissed.
I am satisfied pursuant to s 79U of the FT Act that these orders are fair and equitable to all parties to the claim.
[10]
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
[11]
Amendments
14 August 2023 - Formatting amendments.
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: 14 August 2023
Parties
Applicant/Plaintiff:
Ni
Respondent/Defendant:
Car Skinning Pty Ltd and Performance Auto Trader Pty Ltd
Legislation Cited (3)
Australian Consumer Law Competition and Consumer Act 2010(Cth)
The proceedings came back before the Tribunal for hearing on 15 May 2023, for a 3-hour hearing. The applicant appeared in person at the hearing. He was assisted by a Mandarin-speaking interpreter arranged by the Tribunal. The respondents were represented at the hearing by Mr Liang, their sales manager.
At the start of the hearing, the applicant confirmed that he sought an order for the payment of $10,342.71, being:
1. the deposit of $1,500 he paid to the respondents on 17 October 2022;
2. the additional $8,482 he paid to the respondents on 19 October 2022; and
3. $1,192.71 that he paid to Allianz in insurance premiums in reliance on the respondents' alleged representations,
Less $832 in hire fees and excess travel fees paid to the respondents. He also sought an order that he did not have to pay the respondents $16,264.97 claimed by them for the cost of repairing the car.
It was noted at the start of the hearing that the respondents had not lodged any evidence in accordance with the directions made by the Tribunal on 15 February. Mr Liang said that the respondents wanted to rely on documents that they have not yet provided to the applicant or to the Tribunal. He said that the respondents had requested their solicitor to ask for documents from Allianz and from the applicant, but the requested documents had been received from them.
Mr Liang produced in support of this a letter from the respondents' solicitors to the applicant, dated 3 February 2023 (some 12 days before the conciliation hearing) asking for copies of various documents, including: the Allianz comprehensive insurance policy; a transcript of the applicant's interview with Allianz' investigator on 5 December 2023; contact details for the witnesses to the collision involving the car; and any competing repair quotes relied on by the applicant. The applicant opposed that submission, arguing that the documents that the respondents had requested were included in the affidavits in Exhibit A1 (set out below) which had been given to the respondents by the start of March, some 10 weeks before this hearing. That submission was substantiated. It was therefore clear that the respondents' solicitor's request had been fully complied with a long time ago.
Mr Liang did not describe the additional documents that the respondents wanted to rely on at the hearing, or state when the respondents would be in a position to provide those documents to the applicant and the Tribunal. He provided no other explanation for the respondents' delay in providing those documents to the applicant and to the Tribunal (beyond the letter sent by the respondents' solicitor), and did not provide any explanation why the respondents had not taken any step to seek an extension of time to comply with the Tribunal's orders before the hearing.
As set out in Ghazal v Masterton Homes Pty Ltd [2018] NSWCATAP 227, [54], the principles relevant to the exercise of discretion include:
1. matters should almost always proceed on the date fixed for hearing;
2. an application for adjournment should be an exception and not the ordinary course;
3. where the party seeking the adjournment has not complied with an order of the Tribunal, adequate explanation is called for and its absence weighs heavily against granting the adjournment, and
4. the effect of any adjournment on the opposing party must be considered.
Consistent with those principles, and for the reasons that I gave verbally at the time, I declined the respondents' request to adjourn the hearing. Consequently the hearing proceeded that day. The proceedings took the allotted 3 hours to hear.
During the hearing, both parties were given the opportunity to present their evidence to the Tribunal (including oral evidence from both parties, if they wished), to ask questions of each other, and to explain their arguments why they should be successful on the claim.