The appellant appeals against a decision made on 26 April 2017 in the Consumer and Commercial Division in connection with his purchase of a second hand motor vehicle from the respondent in September 2016.
The Tribunal made the following orders on 9 March 2017 stating that detailed oral reasons had been provided to the parties at the hearing:
1. ORIGIN CONCEPTS PTY LTD T/AS O C AUTOMOTIVE UNIT 1 252 Hume Highway LANSVALE NSW 2166 Australia is to pay KENNETH SMITH 37 Kalani Road BONNELLS BAY NSW 2264 Australia the sum of $491.79 on or before 23-Mar-2017.
Reasons:
$491.79 Refund of service costs ($419.79) and cost of inspection by NRMA Motorserve ($72.00).
2. The Tribunal orders that the respondent(s): ORIGIN CONCEPTS PTY LTD T/AS O C AUTOMOTIVE UNIT 1 252 Hume Highway LANSVALE NSW 2166 Australia is to cause the undertaking of the following work in a proper and workmanlike manner on or before 07-Apr-2017.
Details of Work order:
(a) Transport the vehicle to Lansvale at no cost to the applicant
(b) Undertake all mechanical repairs detailed in the report of NRMA Motorserve dated 27 September 2016 (but not including body repairs)
(c) Arrange for the vehicle to be re inspected by NRMA Motorserve to establish that all repairs have been carried out and provide a copy of the report to the applicants.
3. The applicant may seek to leave to renew these proceedings in the event these orders are not compiled with by the other party.'
Written reasons were provided on 26 April 2017. To the extent that the appellant requires an extension of time to lodge his appeal we would grant an extension of time under section 41 of the Civil and Administrative Act 2013 since his notice of appeal was filed within 28 days of the date of his receipt of the written reasons dated 26 April 2017.
The appellant appeals against order 2 of the orders made on 9 March 2017. He seeks the following order from the Appeal Panel:
'Cancellation of the sale contract. Return of the purchase price and all costs associated in bringing this matter to NCAT. The respondent to recover the vehicle from its current location at his own cost.'
The appellant's case is that he purchased a Mitsubishi Challenger Ls (4 x 4) vehicle from the respondent on 19 September 2016 for $22,000.00. The vehicle was stated to have Engine No XXXXXXXX9877 with an Odometer of 102,395, but undisclosed to him the vehicle had a different engine, namely Engine No XXXXXXXX0147. We would add that by reason of the vehicle containing a different engine the Odometer reading stated on the tax Invoice and the Form 5 Motor Dealers Notice was highly likely to have been incorrect and misleading. In the proceedings below the appellant sought a refund of the amount paid for the vehicle.
Section 80(2)(b) of the Civil and Administrative Tribunal Act provides for internal appeals by stating:
(2) Any internal appeal may be made:
(a) …
(b) in the case of any other kind of decision (including an ancillary decision) of the Tribunal at first instance - as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds.
Clause 12(1) of Schedule 4 to the Civil and Administrative Tribunal Act sets out the requirements that must be satisfied if the leave of the Appeal Panel is required on grounds other than a question of law. It states :
(1) An Appeal Panel may grant leave under section 80 (2) (b) of this Act for an internal appeal against a Division decision only if the Appeal Panel 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).'
The appellant seeks leave to bring this appeal on the basis that the decision was not fair and equitable and that the decision of the Tribunal was against the weight of evidence. He also seeks to adduce significant new evidence.
In support of his contention that the decision was not fair and equitable the appellant submits that:
The Member gave weight to an altered document used as evidence by the respondent and ignored admissions from the respondent about the date he purchased the vehicle and his knowledge of the engine being replaced before he sold the vehicle.
In support of his contention that the decision of the Tribunal was against the weight of evidence the appellant stated that the evidence that the Tribunal should have given more weight to was:
The admission by the respondent that he knew of the engine replacement before he sold the vehicle to me. The respondent had denied that knowledge for six months. The respondent company records had the number of the original engine recorded in them. This proves the fact that the original engine was in the vehicle when he bought it and the engine was changed whilst a vehicle was in his ownership.'
In his submissions the applicant has provided a transcript of the hearing in which the respondent's representative stated in answer to a question from the Tribunal Member:
'When I went to register the car it required a blue slip inspection and the mechanic has brought to my attention that the engine was changed and so I found that out a little time later and obviously I obtained a receipt to prove it with the engine numbers matching, sir'
M - but what are you saying the engine number was changed to
it was changed to number ending in 0147 from the number ending which was 9877 so the car released with 9877 from Mitsubishi Australia which is confirmed and the new engine, sorry I will rephrase that the engine that it was replaced with ending in 0147'
The new evidence that the appellant seeks to produce is a copy of receipt 1382 from Formula One Auto Spares Pty Ltd issued to National Motor Network regarding 'Supply & Fit Mitsubishi Grandis Engine' dated 14 October 2016. The appellant submits that a copy of this invoice was produced by the respondent two hours before the hearing on 9 March 2017, and that because of its late production he did not have an opportunity to investigate it. He further submits that having obtained the original of receipt 1382 from Formula One Auto Spares Pty Ltd it is plain that the copy of the invoice presented at the hearing which was dated 4 August 2016 had been changed.
The respondent in its Reply to the Appeal agrees that the dates on receipt 1382 had been changed.
The respondent also seeks to adduce new evidence being a Purchase invoice from National Motor Network and a certificate from the Personal Property Securites Register reflecting data in the PPSR as at 1 August 2016.
In addition the respondent stated in its Reply:
In conclusion to Point.1, we confirm that, National Motor Network had Formula One Autospares change the engine but have realised that since it was unregistered neglected to have the details on the PPSR changed. After discussions with Mr Zaheed Khan (Senior Management - NSW Service Centre) he informed me that the inspector Mr Thang Nguyen) had done a thorough inspection to identify the different Engine Number on his Primary NSW inspection (Inspection # FA2946279 Dated 19/9/2016). We confirm that this matter was a clerical error which has been fixed (On our documents and RMS systems (Mr Kenneth Smith Registration Certificate Receipt # 029755 7111)
The respondent did not file submissions in support of its position.
In the decision appealed against the Tribunal Member recorded at [2], among other things, that the appellant
believed that the engine in the vehicle had been changed and that at no stage was he told that the engine had been changed. He claimed that the Form 5 disclosure indicated the vehicle had not had any major modifications yet he believed the replacement of the engine would be a major modification and under the Consumer Law that he would be entitled to a refund.
At [6] the Tribunal Member stated:
Mr Smith stated firstly and most importantly that he simply did not get what he had paid for, as he had paid for a car with an engine number XXXXXXX9877 as stated on the Form 5 and the tax invoice. He described the vehicle as having a problem which would have stopped someone from buying it had they known about it and as being unsafe and significantly different from the sample and description.
At [18] the Tribunal Member referred to the document from Formula One Auto Spares Pty Ltd dated 4 August 2016. He stated that:
That document explained the discrepancy between the engine number shown on the registration documents and the engine number referred to in subsequent inspection reports.
In his decision the Tribunal Member did not specifically deal with the appellant's claims as extracted from the Reasons for Decision referred to in [14] and [15] above, although he stated at [19]:
The applicant agreed that if the paperwork relating to the engine exchange had been completed before the vehicle was put up for sale he would not have had concerns about the reliability of the vehicle with a different engine number.
[2]
Determination of the Appeal
The parties were self- represented in the Appeal.
In John Prendergast & Vanessa Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel stated at [12]:
In circumstances where the appellants are not legally represented, it is apposite for the Tribunal to approach the issue by looking at the grounds of appeal generally. It is necessary for the Appeal Panel to determine whether a question of law has in fact been raised, subject to any procedural fairness considerations that might arise to the respondent.
We agree with that passage and have considered whether a question of law has in fact been raised by the appellant.
In Rathchime Pty Ltd v Willat [2017] NSWCATAP 87 the Appeal Panel stated at [70] and [71]:
If a Tribunal Member does not deal with an issue that was before him or her for determination that will be an error of law.
In Yong v Antworks Pty Ltd [2016] NSWCATAP 14 at [31- 34] the Appeal Panel cited the following authorities in support of the above proposition:
In Yates Property Corporation Pty Ltd (In Liquidation) v Darling Harbour Authority 24 NSWLR 156 at 186 Handley JA stated:
The duty of a judicial officer to hear and determine a claim made in judicial proceedings conducted before that officer is also an incident of the judicial process. Since breaches of the duty to give proper reasons and to observe procedural fairness involved errors of law, there seems every reason to hold that a breach of the duty to hear and determine a claim made in judicial proceedings also gives rise to such an error.
In Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; 206 CLR 323 Gaudron J in context of the Migration Act (Cth) discussed a constructive failure to exercise jurisdiction stating:
It follows from what has been written above that the failure of the Tribunal to make findings with respect to a particular matter may, at the same time, reveal failure to exercise jurisdiction, whether actual or constructive, and, also, failure to conduct a review as required by the Act.
In Fox v Australian Industrial Relations Commission [2007] FCAFC 150 Marshall and Tracey JJ stated at paragraph 38:
In the present case the complaint is not that the full bench ignored the evidence but rather that it did not deal with an important ground raised by Mr Fox. This case is more akin to one where there is a failure by a Tribunal to deal with necessary issues. Such a failure constitutes a jurisdictional error.
In Khan v Kang (supra) the Appeal Panel found that the Tribunal had made an error of law by failing to consider a claim made by Mr Khan. The Appeal Panel observed at [28] as follows:
It is possible to characterise what occurred either as a failure to give reasons for the Tribunal's decision or a failure to exercise the jurisdiction conferred on the Tribunal and invoked by the appellant in relation to this claim in respect of excess timber - see Waterways Authority v Fitzgibbon [2005] HCA 57 at [129] - [130] and Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 at [42]. Whichever way it should be characterised, the Tribunal's failure to consider such a claim at all in its Reasons for Decision amounted to an error of law by the Tribunal below'
The appeal raises the issue of the change of the engine in the vehicle which was sold to the appellant and the evidence that was before the Tribunal at the hearing in relation to that issue.
An examination of the Reasons for Decision provided indicate to us that the appellant's claim for a refund of the amount paid for the vehicle was never dealt with by the Tribunal Member.
As stated above the Tribunal Member at [2] recorded the appellant's claim as being:
that the engine in the vehicle had been changed and that at no stage was he told that the engine had been changed. He claimed that the Form 5 disclosure indicated the vehicle had not had any major modifications yet he believed the replacement of the engine would be a major modification and under the Consumer Law that he would be entitled to a refund.
Consistent with what was said in Rathchime Pty Ltd v Willat and in Yong v Antworks Pty Ltd [2016] NSWCATAP 14 the failure of the Tribunal Member to deal with and determine the appellant's claim for a refund based on his claim that the engine of the vehicle he purchased had been changed without him being told and when the Form 5 Motor Dealers Notice stated that the vehicle had not had any major modifications constituted an error of law.
On that basis we would allow the appellant's appeal. For that reason it is unnecessary for us to determine the appellant's leave application.
Section 81 of the Civil and Administrative Tribunal Act states
81 Determination of internal appeals
(1) In determining an internal appeal, the Appeal Panel may make such orders as it considers appropriate in light of its decision on the appeal, including (but not limited to) orders that provide for any one or more of the following:
(a) the appeal to be allowed or dismissed,
(b) the decision under appeal to be confirmed, affirmed or varied,
(c) the decision under appeal to be quashed or set aside,
(d) the decision under appeal to be quashed or set aside and for another decision to be substituted for it,
(e) the whole or any part of the case to be reconsidered by the Tribunal, either with or without further evidence, in accordance with the directions of the Appeal Panel..
(2) The Appeal Panel may exercise all the functions that are conferred or imposed by this Act or other legislation on the Tribunal at first instance when varying, or making a decision in substitution for, the decision under appeal.'
Having decided to allow the appeal based on the error of law referred to above we have decided to set aside the decision under appeal and to substitute another decision for it on the basis of the documents provided to the Appeal Panel on the appeal and exercising all of the functions that were conferred or imposed by legislation on the Tribunal at first instance.
[3]
Determination of the appellant's claim
The Tribunal has the jurisdiction to deal with the appellant's claim under sections 79I and J of the Fair Trading Act 1987 (the 'Act').
The appellant is a consumer for the purposes of the Act and the presumption in section 79H of the Act applies to him. We find that the respondent is a supplier as defined in section 79D of the Act.
We find that the appellant's application in the Tribunal is a 'consumer claim' as that phrase is defined in section 79E(1)(a) and (d) of the Act.
We have jurisdiction under section 79K of the Act since the vehicle was supplied in New South Wales.
The order that the appellant seeks from the Tribunal falls within section 79N(a) of the Act.
Pursuant to the Act we are required to comply with section 79U(1) which provides:
When making an order or orders under this Division, the Tribunal must be satisfied that the orders will be fair and equitable to all the parties to the claim.
[4]
The Australian Consumer Law
The appellant's cases as we apprehend it arises under the Australian Consumer Law.
The Australian Consumer Law ('ACL') was accepted as law in New South Wales by amendments made to the Fair Trading Act on 1 January 2011 and thereby applies to the facts relating to these proceedings.
Section 56 of the ACL states:
'(1) If:
(a) a person supplies, in trade or commerce, goods by description to a consumer; and
(b) the supply does not occur by way of sale by auction;
there is a guarantee that the goods correspond with the description.
(2) A supply of goods is not prevented from being a supply by description only because, having been exposed for sale or hire, they are selected by the consumer.
(3) If goods are supplied by description as well as by reference to a sample or demonstration model, the guarantees in this section and in section 57 both apply.'
The ACL defines goods to mean, among other things, 'ships, aircraft and other vehicles'. We are satisfied that the sale of the Mitsubishi Challenger Ls (4 x 4) 9 (the 'vehicle') by the respondent to the appellant for the sum of $22,000.00 was in trade and commerce since the respondent was clearly in the business of the sale of second hand vehicles.
We are satisfied that the respondent supplied the vehicle to the appellant with a description that was contained in the Tax Invoice attached to the appellant's submissions dated 19 September 2016. The description contained full particulars of the vehicle, including its engine number, XXXXXXXX9877. In addition the Form 5 Motor Dealers Notice dated 19 September 2016 provided by the respondent contained a description of the vehicle, which included a reference to engine number, XXXXXXXX9877.
There is a dispute between the parties about whether it was the respondent who changed the engine and if not, the extent to which the respondent was aware that the engine in the vehicle had been changed when it sold the vehicle to the appellant.
In our view actual knowledge by the respondent of the fact that the vehicle's engine had been changed is immaterial to the issue of whether there has been a breach of section 56 of the ACL. The respondent has conceded that at the time of sale the vehicle actually contained a different engine, namely Engine No XXXXXXXX0147 which it puts down to a clerical error. In addition the appellant has provided a copy of an email from New South Wales Fair Trading referring to his correspondence dated 27th March regarding the respondent. The email states:
Your concerns were brought to the attention of a representative of OC Automotive. The representative advised the engine was changed prior to the purchase of the vehicle and their records had not been updated. The representative advised the records have now been adjusted and is requesting the vehicle be brought back to rectify the issue.
While the foregoing is hearsay evidence, it confirms the respondent's position that the previous owner National Motor Network had the engine changed but neglected to have the details on the Personal Property Security Register changed to reflect the correct engine number.
Conclusive evidence that there was an engine change in the vehicle can be found in the vehicle's certificate of registration which has a payment date of 20 September 2016. The certificate records the engine number as XXXXXXXX0147.
In Vince Taskovski & Anor v Otomobile Shoppe Pty Ltd [2015] NSWCATCD 24 the facts included a supplier of an Audi Q7 Quattro Wagon motor vehicle replacing the engine of the vehicle with a Volkswagen engine without revealing to the consumer that the Audi engine had been replaced with a Volkswagen engine. At [26] the Tribunal Member stated:
The engine substitution raises ACL s56 (Guarantee relating to the supply of goods by description). The sale of an Audi vehicle is a sale by description, namely that the Vehicle is an Audi. The replacement of the Audi engine with a VW engine detracts from the description of the vehicle as an Audi as it is no longer an Audi but has become in fact a hybrid or perhaps modified vehicle better described as an Audi with a VW engine. On this analysis the Vehicle does not correspond with the description of an Audi Vehicle; and the respondent has breached this statutory guarantee for the purposes of ACL s56.
We agree with the finding referred to above. We find to similar effect in these proceedings that the respondent breached the guarantee contained in section 56 of the ACL by supplying the vehicle to the appellant when it did not correspond with the description provided by reason of having a different engine to that described in the tax invoice dated 19 September 2016 and in the Form 5 Motor Dealers Notice dated 19 September 2016, both documents having been provided by the respondent.
The ACL provides for a refund of the amount paid by a consumer where there has been a 'major failure'. The guarantee found to have been breached falls within section 259(1) of the ACL thereby enlivening section 260 of the ACL to make the failure to comply with the guarantee in section 56 a 'major failure'. On 26 September 2016 the appellant put the respondent on notice that there had been a 'major failure' and that he was seeking a refund of the purchase price of the vehicle on the basis of it being 'irreparably defective' with evidence of the engine being replaced. He also requested the respondent to collect the vehicle on the basis that it was not roadworthy.
Pursuant to section 263(4) of the ACL the respondent was obliged to refund the purchase price to the appellant.
[5]
Orders
Given that we have found that the respondent has breached the guarantee contained in section 56 of the ACL and the appellant is entitled to a refund under section 263(4) of the ACL, we are of the view that we are justified under section 79N(a) to order:
1. The appeal is allowed.
2. The decision of the Tribunal dated 26 April 2016 is set aside and this decision is substituted for it.
3. Origin Concepts Pty Ltd must pay Kenneth Smith the sum of $22,000.00 immediately.
4. Within 14 days from the date of this order Origin Concepts Pty Ltd must collect the Mitsubishi Challenger Ls (4 x 4) vehicle registration CJ61MD from Kenneth Smith at such address as is nominated by Mr Smith.
In addition we are satisfied that these orders will be fair and equitable to all the parties to the claim having regard to the undisclosed engine change.
The appellant has sought the costs of this Appeal. We find that pursuant to section 60 of the Civil and Administrative Tribunal Act there are no special circumstances that apply. In that case section 60 states that each party will be responsible for their own costs.
[6]
I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal.
Principal Registrar
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: 20 July 2017