Schmidt v JRS Trading Pty Ltd

Nature and scope of appeal

1. The decision of the Tribunal at first instance is an internally appealable decision and an appeal can be made from the decision as of right upon a question of law, and otherwise with leave of the Appeal Panel: see, s 80(1) and (2)(b) of the Civil and Administrative Tribunal Act 2013 ('NCAT Act').
2. As the decision the subject of the appeal is a decision of the Tribunal in the Consumer and Commercial Division, the Appeal Panel may only grant leave to appeal where it is satisfied the appellant may have suffered a substantial miscarriage of justice because: (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). (see NCAT Act, Sch 4, cl 12)
3. Even if an appellant from a decision of the Consumer and Commercial Division requiring leave to appeal has satisfied the requirements of cl 12(1) of Sch. 4 of the NCAT Act, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b) of the NCAT Act.
4. The appellant's Notice of Appeal makes it clear that she will seek leave to appeal on the three grounds referred to above, namely: 1. The decision was not fair and equitable; 2. The decision was against the weight of evidence: and 3. significant new evidence has arisen that was not reasonably available at the time the proceedings under appeal were being dealt with.
5. We explained to the appellant that the appeal was not an opportunity for her to run her case again or have a "second chance". (Ryan v BKB Motor Vehicle Repairs Pty Limited [2017] NSWCATAP 39). Likewise, the Tribunal's Guideline 1, Internal Appeals (which can be found on the Tribunal's website) relevantly states: "an appeal is not an opportunity to have a second go at a hearing". Further, it is not sufficient for the appellant to disagree with the outcome and to contend that there should have been a different outcome: the appellant must demonstrate either that an error was made on a question of law or that there is a basis upon which leave to appeal should be granted
6. In the decision of an Appeal Panel in Collins v Urban [2014] NSWCATAP 17, it was stated at [76] - [79] in connection with seeking leave to appeal (we omit references made to authorities): 'Accordingly, it should be accepted that a substantial miscarriage of justice may have been suffered because of any of the circumstances referred to in cl 12(1)(a), (b) or (c) where there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance. As to the particular grounds in cl 12(1)(a) and (b), without seeking to be exhaustive in any way, the authorities establish that: (1) If there has been a denial of procedural fairness the decision under appeal can be said to have been "not fair and equitable" … (2) The decision under appeal can be said to be "against the weight of evidence" (which is an expression also used to describe a ground upon which a jury verdict can be set aside) where the evidence in its totality preponderates so strongly against the conclusion found by the tribunal at first instance that it can be said that the conclusion was not one that a reasonable tribunal member could reach If in either of those circumstances the appellant may have been deprived of a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved then the Appeal Panel may be satisfied that the appellant may have suffered a substantial miscarriage of justice because the decision was not fair and equitable or because the decision was against the weight of the evidence. In order to show that a party has been deprived of a "significant possibility" or a "chance which was fairly open" of achieving a different and more favourable result because of one of the circumstances referred to in cl 12(1)(a), (b) or (c), it will generally be necessary for the party to explain what its case would have been and show that it was fairly arguable. If the party fails to do this, even if there has been a denial of procedural fairness, the Appeal Panel may conclude that it is not satisfied that any substantial miscarriage of justice may have occurred …
7. In addition, it was stated in Collins v Urban at [84] that ordinarily it is appropriate to grant leave to appeal 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 interests of justice for it to be reviewed.
8. We have reviewed the document marked A which is stated to contain the appellant's Grounds of Appeal where she: 1. refers to Procedural irregularities, without identifying them; 2. Comments of findings of fact made by the Tribunal Member in various paragraphs of the decision; 3. Seeks to raise new issues; and 4. Comments on the evidence.

The appellant's case made at first instance

1. The appellant's application stated, among other things that she was entitled to a refund because she had been informed by Fair Trading that the 'faults and damages were not disclosed …. And she would not have made the purchase had she been aware of these issues'
2. The Tribunal member referred to sections 54 and 56 of the Australian Consumer Law ('ACL') stating that where a finding has been made that a supplier has breached a consumer guarantee, a consumer may bring an action against that supplier under section 259 of the ACL. The Tribunal Member described the remedies that were available to a consumer under that section and then stated that an applicant who could prove that the failure of the goods was a major failure may seek a refund of the purchase price. The Tribunal Member acknowledged that the appellant was contending that the vehicle was a 'major failure' and stated that the onus was on her to prove the factors in relation to a major failure as set out in s260 of the ACL. That section states: 'A failure to comply with a guarantee referred to in section 259(1)(b) that applies to a supply of goods is a major failure if: (a) the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or (b) the goods depart in one or more significant respects: (i) if they were supplied by description - from that description; or (ii) if they were supplied by reference to a sample or demonstration model - from that sample or demonstration model; or (c) the goods are substantially unfit for a purpose for which goods of the same kind are commonly supplied and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or (d) the goods are unfit for a disclosed purpose that was made known to: (i) the supplier of the goods; or (ii) a person by whom any prior negotiations or arrangements in relation to the acquisition of the goods were conducted or made; and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or (e) the goods are not of acceptable quality because they are unsafe.'
3. The Tribunal Member in our view correctly identified the issues for determination at [11] of the Reasons where he stated: 'The first issue for determination is whether the goods were of acceptable quality and matched the representation in the online description that the vehicle was in 'great condition". If there had been a breach of a consumer guarantee, the next issue for determination is whether the vehicle was a major failure justifying an order for a full or partial refund of the purchase price. Finally, if the vehicle was not a major failure, ought the respondent repair the goods?'
4. The appellant produced two expert reports at first instance in support of her case. The first report was a Motorserve Vehicle Inspection Report dated 6 May 2022. (referred to as the 'NRMA report') The second report was from Car Solutions Motor vehicle Consultants dated 17 November 2022. The Tribunal Member referred to these reports in his Reasons. The appellant points out that the Tribunal Member made two errors of fact in connection with the Car Solutions Report. First, he said it was undated when that was incorrect. Secondly, he did not refer to the fact that the report was based on an actual inspection of the vehicle and because of the failure to appreciate that fact, it was incorrect to say as the Tribunal Member had at [18]: 'It is more probable than not that the second expert report was based only on an observation of the NRMA report shortly after the defects were alleged.'
5. In his decision the Tribunal Member gave more weight to the NRMA report. The critical findings were at [19] and [20] of the Reasons where the Tribunal Member stated: 'The applicant has chosen not to have those defects listed in the NRMA report repaired. Nor has the vehicle being driven. It was at this time that the applicant was required to Provide the Supplier an opportunity to repair the relatively minor defects. The report did not mention any major issues, It did not find flood damage. no mould, damp or smell. If the supplier has been given no opportunity to repair, then the Tribunal can make no finding is that the goods supplied were not of acceptable quality or that they are a major failure as it cannot find they were not repaired in a reasonable time or are not capable of repair. The Tribunal is satisfied that the vehicle was not in "great condition" and there was a breach of the consumer guarantee for acceptable quality at the time of supply due to the aggregate of minor repairs set out in the NRMA report. However, it was not a major failure. It was the applicant that refused repairs. The respondent ought to be given an opportunity to carry out repairs, those repairs being the ones specified in the NRMA report. The evidence of the respondent also shows that it was always ready willing and able to carry out such repairs through a Sydney mechanic.'
6. The Tribunal member found that the appellant had not chosen to have the defects that were referred to in the NRMA report repaired and she was required to provide the respondent with an opportunity to repair what were described as relatively minor defects.
7. Critically, the Tribunal Member stated: 'If the supplier has been given no opportunity to repair, then the Tribunal can make no finding is that the goods supplied were not of acceptable quality or that they are a major failure as it cannot find they were not repaired in a reasonable time or are not capable of repair.'
8. We are of the view that the Tribunal Member fell into error in interpreting ss259 and 260 of the ACL in the way he did, as extracted above. We find that a finding of whether a failure to comply with a guarantee that applies to a supply referred to in s259(1)(b) of the ACL amounts to a 'major failure' is not subject to the supplier being given an opportunity to repair the goods in question.
9. The Tribunal Member also found that there was a breach of the consumer guarantee for acceptable quality at the time of the supply due to the aggregate of minor repairs set out in the NRMA report, but there was no major failure. There is no appeal against this finding.
10. During the Appeal hearing we referred to page 8/37 of the NRMA report where the following appears: 'Is the vehicle unsafe? (If the vehicle fails and you drive this vehicle, it is at your own risk.) Yes'

1. At page 2/37 the same material was printed. The respondent's representative submitted that the meaning of the above words rose no higher than an acknowledgement that if the vehicle was unsafe, drivers would be at their own risk. He suggested the word "Yes" was responding to the words "If the vehicle fails and you drive this vehicle, is it at your own risk." but those words read "… it is at your own risk." We reject such an interpretation. We find that the above extract from the NRMA report, which is also to be found at 2/37 is a statement by the author of the report that the vehicle is unsafe. The appellant when addressing us drew our attention to document A referred to in her Notice of Appeal and the reference to Paragraph 18, which in turn refers to the Car Solutions report which noted at [23] that the NRMA report had stated that the vehicle was unsafe to drive.
2. It is our view that the Tribunal Member fell into error by not giving any consideration to the material in the appellant's reports that the vehicle was considered to be unsafe. In Smith v Ozzy's Cheapest Cars Pty Ltd [2019] NSWCATAP 278 an appeal panel stated at [33]: 'A failure to deal with evidence may also in the appropriate circumstances be characterised as a failure to have regard to a relevant consideration or a failure to have regard to critical evidence. It is generally not mandatory to consider particular evidence: Rodger v De Gelder (2015) 71 MVR 514; [2015] NSWCA 211 at [86]; Allianz Australia Insurance Ltd v Cervantes (2012) 61 MVR 443; [2012] NSWCA 244 at [15] per Basten JA (McColl and Macfarlan JJA agreeing). However, by s 38(6)(a) of the NCAT Act, the Tribunal "is to ensure that all relevant material is disclosed to the Tribunal so as to enable it to determine all of the relevant facts in issue in any proceedings." This obligation includes an obligation to have regard to material which has been disclosed to the Tribunal and which is relevant to the facts in issue, at least where that material is of some significance. Further, at common law, where a decision-maker ignores evidence which is critical to an issue in a case and contrary to an assertion of fact made by one party and accepted by the decision-maker, this is an error of law: Mifsud v Campbell (1991) 21 NSWLR 725 at 728; Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 at [62]-[63]; Eadie v Harvey [2017] NSWCATAP 201 at [61]-[62].'
3. The errors in the Tribunal Member's reasons which we have identified are in our view errors of law. As a result we allow the appellant's appeal and set aside the Tribunal decision of 25 January 2023. Section 81(1)(d) of the Civil and Administrative Tribunal Act allows us to substitute another decision for the decision set aside.
4. In Ross Hereford v Automobile Direct Wholesale Pty Ltd [2015] NSWCATCD 58 at [40] Senior Member Sarginson succinctly summarised a party's right to obtain a refund in the following circumstances: 'Under Part 5-4 Division 1 of the ACL (relevantly, Sections 259-263 of the ACL) a consumer has a right of refund if failure to comply with a consumer guarantee "cannot be remedied or is a major failure" ("major failure" being defined under Section 260 of the ACL); the consumer has notified the supplier that the goods have been rejected and the grounds for rejection (as defined in Sections 259(3)(a) and 262 of the ACL); and the consumer has returned the goods (as defined in Section 263 of the ACL). A number of decisions of the Tribunal have considered Section 259 of the ACL (e.g. Paul Masden v Agricon Pty Ltd [2014] NSWCATCD 79; Alex Pordage t/as Pattisserie Fe Fi Fo v Chrystal & Co Pty Ltd t/as Caterlink [2014] NSWCATCD 72).'
5. We find that the appellant at first instance established that: 1. there was a failure to comply with a consumer guarantee, namely that the vehicle sold to her was not of acceptable quality and was not as described, namely 'in great condition'; 2. the vehicle was unsafe thereby satisfying s 260(e) of the ACL; 3. she notified the respondent that the vehicle had been rejected and the grounds for rejection when on 31 May 2022 she stated to the respondent that due to a number of matters the vehicle 'has been deemed unsafe for public roads and will not pass blue slip which is required for registration'; and 4. she had demanded on 31 May 2022 return of the money paid for the vehicle.
6. On 1 and 5 June 2022 the appellant re-iterated her rejection of the vehicle.
7. As to s236(2) of the ACL we infer that the vehicle cannot be returned to the respondent without the appellant incurring significant cost, given that the respondent has its place of business in Queensland. In that case the respondent must collect the goods at its expense: section 263(3) of the ACL.

Determination of the Appeal

1. For the reasons provided above, the order we will make are as follows: 1. Appeal Allowed. 2. The decision of the Tribunal in MV 22/48972 dated 25 January 2023 is set aside. 3. In substitution of that Tribunal decision, the respondent is to pay the applicant the sum of $10,925.00 immediately. 4. The appellant must notify the respondent in writing the location where the vehicle the subject of these proceedings is, within three days of the date of publication of these orders, and the respondent must at its own expense collect the vehicle from that location immediately.

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: 02 May 2023