Twining v Mazda Australia Pty Limited

THIS HEARING

1. In accordance with the Tribunal's response to the current COVID 19 pandemic emergency, the hearing was conducted by telephone. The hearing was conducted over 90 minutes, most of which was occupied by the examination of the parties' witnesses. The applicant appeared on his own behalf. The respondent was represented by its employed Customer Relations Specialist, Mr Ironside.
2. The applicant opened his argument at the hearing by restating that the claim was brought against the respondent as the manufacturer of the Vehicle, and that no claim is made against the original seller of the Vehicle. He confirmed that he sought $12,500 as a reimbursement of the cost of installing a replacement engine into the Vehicle, on the basis that there was a "common fault" defect in that year model of BT-50. He asserted that this problem (which concerned the coolant leak described above, causing the engine to seize up) was a manufacturing defect with the Vehicle.
3. Mr Ironside denied that there was any common fault with that model of BT-50. He also argued that the applicant had produced insufficient evidence to substantiate his claim - including that the applicant had failed to produce any evidence of the purchase of the Vehicle, the service history of the Vehicle or any pre-purchase inspection that had been conducted of the Vehicle. Accordingly, he argued that the claim should be dismissed.
4. The applicant has the burden of proving the elements of his claim to the civil standard, being the balance of probabilities. The respondent has the burden of proving the affirmative elements of its defence to the same standard. In this regard, when proof of a fact is required, the Tribunal must feel an actual persuasion of the occurrence or existence of that fact before it can be found. Actual persuasion is achieved where the affirmative of an allegation is made out to the reasonable satisfaction of the Tribunal. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony or indirect inferences: Warner v Hung, in the matter of Bellpac Pty Limited (Receivers and Managers Appointed) (In Liquidation) (No 2) [2011] FCA 1123 at [48], per Emmett J.
5. At the end of the hearing, I made orders for the parties to lodge and give to each other written submissions setting out their respective positions - with the applicant to provide his submissions by 31 January 2022 and the respondent its submissions by 21 February 2022. On 23 February 2022, I invited the parties to provide further written submissions that addressed the following jurisdictional issues (which I will discuss further below): 1. Is the applicant's claim against the respondent in this case a "consumer claim" within the meaning of s 79E(1) or 79E(2) of the Fair Trading Act 1987 (NSW) (the FT Act)? 2. If so, what about the circumstances of the case makes it a consumer claim? If not, what about those circumstances prevents it from being a consumer claim? Are there any authorities that support your submission?

THE RELEVANT LAW

1. The Motor Dealer and Repairers Act 2013 (NSW) (the MDR Act) regulates the licensing and conduct of motor dealers and motor vehicle repairers in New South Wales. That Act does not apply in this case because (firstly) the respondent is not a "motor dealer", even though it may have sold the vehicle to a motor dealer (see s 5(2) of the MDR Act); and (secondly) the applicant did not purchase the Vehicle from a motor dealer.
2. However that is not the end of the matter. The Australian Consumer Law (ACL) is a law of the Commonwealth, as set out in Schedule 2 of the Competition and Consumer Act 1974 (Cth). By s 28 of the FT Act, the Australian Consumer Law text, as in force from time to time, applies as a law of New South Wales.
3. Part 3-2 of the ACL, as so applied, contains a series of guarantees relating to the supply of goods to consumers, including the guarantee in s 54(2) of the ACL that the goods are of "acceptable quality" within the meaning of that section. Section 54 provides as follows: 54 Guarantee as to acceptable quality (1) If: (a) a person supplies, in trade or commerce, goods to a consumer; and (b) the supply does not occur by way of sale by auction; there is a guarantee that the goods are of acceptable quality. (2) Goods are of acceptable quality if they are as: (a) fit for all the purposes for which goods of that kind are commonly supplied; and (b) acceptable in appearance and finish; and (c) free from defects; and (d) safe; and (e) durable; as a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods), would regard as acceptable having regard to the matters in subsection (3). (3) The matters for the purposes of subsection (2) are: (a) the nature of the goods; and (b) the price of the goods (if relevant); and (c) any statements made about the goods on any packaging or label on the goods; and (d) any representation made about the goods by the supplier or manufacturer of the goods; and (e) any other relevant circumstances relating to the supply of the goods. (4) If: (a) goods supplied to a consumer are not of acceptable quality; and (b) the only reason or reasons why they are not of acceptable quality were specifically drawn to the consumer's attention before the consumer agreed to the supply; the goods are taken to be of acceptable quality. (5) If: (a) goods are displayed for sale or hire; and (b) the goods would not be of acceptable quality if they were supplied to a consumer; the reason or reasons why they are not of acceptable quality are taken, for the purposes of subsection (4), to have been specifically drawn to a consumer's attention if those reasons were disclosed on a written notice that was displayed with the goods and that was transparent. (6) Goods do not fail to be of acceptable quality if: (a) the consumer to whom they are supplied causes them to become of unacceptable quality, or fails to take reasonable steps to prevent them from becoming of unacceptable quality; and (b) they are damaged by abnormal use. (7) Goods do not fail to be of acceptable quality if: (a) the consumer acquiring the goods examines them before the consumer agrees to the supply of the goods; and (b) the examination ought reasonably to have revealed that the goods were not of acceptable quality.
4. In relation to the sale of goods, "consumer" is defined as follows in s 3 of the ACL: 3 Meaning of consumer Acquiring goods as a consumer (1) A person is taken to have acquired particular goods as a consumer if, and only if: (a) the amount paid or payable for the goods, as worked out under subsections (4) to (9), did not exceed: (i) $40,000; or (ii) if a greater amount is prescribed for the purposes of this paragraph--that greater amount; or (b) the goods were of a kind ordinarily acquired for personal, domestic or household use or consumption; or (c) the goods consisted of a vehicle or trailer acquired for use principally in the transport of goods on public roads. (2) However, subsection (1) does not apply if the person acquired the goods, or held himself or herself out as acquiring the goods: (a) for the following purpose: (i) for goods other than gift cards--for the purpose of re-supply; (ii) for gift cards--for the purpose of re-supply in trade or commerce; or (b) for the purpose of using them up or transforming them, in trade or commerce: (i) in the course of a process of production or manufacture; or (ii) in the course of repairing or treating other goods or fixtures on land. (3) … (4) For the purposes of subsection (1) or (3), the amount paid or payable for goods or services purchased by a person is taken to be the price paid or payable by the person for the goods or services, unless subsection (5) applies. It does not appears as though subsections (5)-(9) apply in this case.
5. Sections 271-273 of the ACL permit an "affected person" to bring an action against the "manufacturer" of the goods (which is defined in s 7 of the ACL to include the importer of the goods), to recover damages if the guarantee under s 54 applied to a supply of goods to a consumer and the guarantee is not complied with (with certain exceptions, as set out in s 271(2), none of which apply in this case). Those sections relevantly provide (my underlining): 271 Action for damages against manufacturers of goods (1) If: (a) the guarantee under section 54 applies to a supply of goods to a consumer; and (b) the guarantee is not complied with; an affected person in relation to the goods may, by action against the manufacturer of the goods, recover damages from the manufacturer. (2) Subsection (1) does not apply if the guarantee under section 54 is not complied with only because of: (a) an act, default or omission of, or any representation made by, any person other than the manufacturer or an employee or agent of the manufacturer; or (b) a cause independent of human control that occurred after the goods left the control of the manufacturer; or (c) the fact that the price charged by the supplier was higher than the manufacturer's recommended retail price, or the average retail price, for the goods. … 272 Damages that may be recovered by action against manufacturers of goods (1) In an action for damages under this Division, an affected person in relation to goods is entitled to recover damages for: (a) any reduction in the value of the goods, resulting from the failure to comply with the guarantee to which the action relates, below whichever of the following prices is lower: (i) the price paid or payable by the consumer for the goods; (ii) the average retail price of the goods at the time of supply; and (b) any loss or damage suffered by the affected person because of the failure to comply with the guarantee to which the action relates if it was reasonably foreseeable that the affected person would suffer such loss or damage as a result of such a failure. (2) Without limiting subsection (1)(b), the cost of inspecting and returning the goods to the manufacturer is taken to be a reasonably foreseeable loss suffered by the affected person as a result of the failure to comply with the guarantee. (3) Subsection (1)(b) does not apply to loss or damage suffered through a reduction in the value of the goods. 273 Time limit for actions against manufacturers of goods An affected person may commence an action for damages under this Division at any time within 3 years after the day on which the affected person first became aware, or ought reasonably to have become aware, that the guarantee to which the action relates has not been complied with.
6. "Affected person" is defined in s 2 of the ACL to mean: (a) a consumer who acquires the goods; or (b) a person who acquires the goods from the consumer (other than for the purpose of re-supply); or (c) a person who derives title to the goods through or under the consumer.
7. The second arm - a person who acquires the goods from the consumer - has application in this case, as the applicant asserts that he acquired the Vehicle from a previous owner, who he asserts was the relevant consumer.

THE EVIDENCE AND THE PARTIES' SUBMISSIONS

1. The parties relied on the following evidence and submissions at the hearing before the Tribunal.

(a) The applicant's evidence

1. The applicant relied on 2 bundles of documents that were lodged with the Tribunal on 18 October and 3 December 2021, which I marked as exhibits A1 and A2 respectively. Those documents included: 1. an invoice from Penrith Auto Parts Plus, dated 21 January 2021, for the supply of a 2013 model Ford Ranger engine; 2. an invoice from Zoom Automotive Mechanical Repairs, dated 19 February 2021, for fitting the replacement engine and changing other parts; 3. an Authorised Inspection Station e-AUVIS check report for the Vehicle, dated 23 April 2021; 4. an invoice from Natra Pty Limited, addressed to Penrith Auto Parts Plus, for a replacement EGR cooler, dated 1 April 2021; 5. an invoice from LCS Automotive Services Pty Ltd, also addressed to Penrith Auto Parts Plus, for work undertaken on a BT-50 vehicle, dated 6 April 2021; 6. an extract from a service history book, covering the period from 24 November 2014 to 17 July 2020, stamped on multiple occasions by Thornleigh Motor Repairs; and 7. an email from Ultra Tune Castle Hill to the applicant, dated 19 November 2021. The respondent did not object to any of those documents being used in evidence in the proceedings.
2. The applicant gave sworn oral testimony and was questioned by Mr Ironside on his claim. In his answers to Mr Ironside's questions, the applicant agreed that he was not trained as a motor mechanic. He said that he had engaged a mechanical expert to assist him, and had spoken to him several times, but he did not receive any reports from that expert for use in the proceedings. He also admitted that he did not know of the history of the Vehicle before he bought it, except for what was stated in the service log book: he did not know (for example) if the correct oils or coolant had been used in the Vehicle before he purchased it, and he did not have copies of the invoices for servicing the Vehicle before he purchased it. He arranged for Youi (an insurer) to inspect the Vehicle before he bought it in November-December 2020. He also said that he was verbally advised by Ultra Tune and Zoom when the engine in the Vehicle had seized up that a replacement engine was needed. He agreed also that he had not himself paid some of the amounts claimed in the proceedings, which had been invoiced to either his father or to Penrith Auto Parts Plus.
3. When he lodged his written submissions on jurisdiction after I reserved my decision (discussed below), the applicant also lodged some extracted pages of a loan contract between the applicant and Macquarie Leasing, dated 17 December 2020.The respondent does not object to those pages being used in evidence in the proceedings. Accordingly I have accepted those pages as evidence and marked them as Exhibit A3.

(b) The respondent's evidence

1. The respondent relied on the bundle of documents lodged with the Tribunal on 24 December 2021, which I marked as exhibit R1. The respondent's documents included copies of the documents lodged by the applicant, together with: 1. a chronology of events; and 2. an expert technical report from an automotive mechanical engineer, Geoffrey Senz (Mr Senz), concerning the condition of the Vehicle, dated 22 December 2021. The applicant did not object to any of those documents being used in evidence in the proceedings.
2. Mr Senz gave sworn oral testimony before the Tribunal, in which he was questioned by the applicant. In his answers to Mr Twining's questions, Mr Senz described that the loss of coolant from the EGR cooler would be analogous to a leaking kitchen tap, in that the longer you leave it go the more likely damage will be done.

(c) The parties' submissions

1. The applicant relied on the submissions he lodged on 31 January 2022 (1 page), concerning the substantive issues in the applicant's claim; and 3 March 2022 (also 1 page), concerning the jurisdictional issues raised by the Tribunal. As noted above, the submissions dated 3 March 2022 also contained an extract from a loan contract between the applicant and Macquarie Leasing.
2. In summary, the applicant's submissions are that: 1. the Vehicle has failed to meet reasonable expectations - on inspection by a licensed mechanic it was concluded that the engine had seized due to a lack of coolant, which arose because of a common fault in the EGR cooler on this model Mazda BT-50; 2. the applicant acted promptly, as soon as he noticed the temperature gauge malfunctioned and the engine stopped working; and 3. this is a consumer claim within s 79E(1) of the FT Act - as there is no reason that the seizing of the engine would have changed between when the first owner owned the Vehicle and when the applicant bought it.
3. The respondent relies on the submissions it lodged on 21 February and 2 March 2022, concerning both the jurisdictional and substantive issues in the case. Its submissions were (in summary): 1. The applicant's claim is not a consumer claim under s 79E(1) of the FT Act because the supplier of the Vehicle to the applicant was a private individual and thus not a supplier within the definition of that term in the FT Act. Further, no consumer claim arises under section 79E(2) of the Act because the respondent did not directly supply the Vehicle to the Applicant and the party who did supply the Vehicle does not meet the definition of supplier (my italics). 2. The applicant has failed to make out the elements of the applicant's claim (including his assertion that the engine damage sustained to the Vehicle is due a common fault resulting in coolant leaking into the EGR cooler, which in turn caused the coolant to leak into the engine). In particular, the applicant has failed to prove that the repairs which were conducted on his Vehicle were due to any manufacturing concerns. 3. The Applicant's oral evidence as well as the documentation submitted indicate, in all probability, that he purchased the Vehicle with existing concerns. There is no evidence before the Tribunal which shows those concerns are due to any manufacturing defect. 4. The expert evidence of the respondent's automotive consultant, Mr Senz concludes that there is no manufacturing concern; rather, it appears the Applicant has driven the Vehicle with a leaking and/or low coolant, which caused his engine to seize.

THE PROVED FACTS

1. Based on the evidence before the Tribunal (most of which was uncontested), I am satisfied on the balance of probabilities that the facts of the matter are as follows:
2. The Vehicle is a Mazda BT-50 utility vehicle that was built in about November 2013. The applicant asserted, but did not prove, that the design of the Vehicle shared similar elements with Ford's Ranger utility vehicle, and that some parts for one, such as an engine, could be used on the other. The assertion was partly supported by Mr Senz, who stated from his experience Mazda BT-50 vehicles are powered by engines manufactured by Ford, and that reconditioners of those engines and sellers of second-hand engines will sell or market engines for either vehicle as being applicable to either application.
3. The applicant asserted that the respondent imported the Vehicle and that it was then sold through an unspecified dealer to an unspecified original buyer. No evidence was produced to prove those matters. Accordingly, I make no findings about those matters.
4. Starting on 24 November 2014 and continuing until July 2020, the Vehicle was serviced 12 times by Thornleigh Motor Repairs in Thornleigh NSW. The service record book, which was stamped by that business, shows that the odometer on the Vehicle read 20,000 kilometres on 24 November 2014 and 127,592 when it was serviced on 17 July 2020.
5. Aside from the entries in the service log book, which show only that the Vehicle was serviced by a non-dealership mechanic on regular occasions and not what was done at each service, there is no contemporaneous evidence to establish how the Vehicle was used or maintained between its original purchase and its purchase by the applicant.
6. The applicant became aware of the Vehicle in about early-mid November 2020. The Vehicle was being offered for sale by a private seller, Elsmore Constructions (NSW) Pty Limited (Elsmore). The applicant agreed to purchase the Vehicle on about 15 November 2020, after he had inspected it, but he had to wait for loan finance to be approved before he could complete his purchase.
7. On 17 December 2020 the applicant entered into a loan contract with Macquarie Leasing, under which he borrowed funds totalling $25,356 against a disclosed purchase price of $26,000 (of which the applicant had already paid a deposit of $1,000). The Applicant completed his purchase and took delivery of the Vehicle on about 24 December 2020. Macquarie Leasing took a security interest over the Vehicle at that time.
8. I am satisfied on the evidence that the applicant purchased the Vehicle in New South Wales.
9. On 15 January 2021 the Applicant took the Vehicle to Ultra Tune Castle Hill with an overheating concern. Ultra Tune reported in an email on 19 November that the motor was seized and that there was no coolant in the reservoir, with no obvious external coolant leak. Ultra-Tune advised the applicant that the engine would need to be pulled down to inspect whether it needed to be rebuilt or replaced (that is, in order to further diagnose if replacement of the engine was necessary). However, instead of authorising Ultra Tune to undertake that work, the applicant had the Vehicle towed elsewhere.
10. On 21 January 2021, the Applicant's father (Dean Twining) purchased a second-hand Ford Ranger engine from Penrith Auto Parts Plus, for the total price of $7,500. While the invoice for the sale indicated that the engine was a "2013 Ranger engine", Mr Senz asserts that a label on the engine shows that it was manufactured on 21 August 2018. I accept Mr Senz' evidence on that matter.
11. On or about 19 February 2021, Zoom Automotive Mechanical Repairs fitted a second-hand engine to the Vehicle, changing it with parts supplied by its disclosed customer - Dean Twining (the applicant's father). The additional work undertaken included replacing the clutch kit, a machine fly wheel and 2 engine mounts. Zoom Automotive invoiced Dean Twining $3,935 for that work. The odometer reading of the Vehicle at this time was 134,413 km. The evidence does not show how that additional work was related to the leakage from the EGR cooler that the applicant complains of.
12. Two months later, on about 1 April 2021, Natra Pty Limited sold to Penrith Auto Parts Plus a Ford Ranger EGR Cooler, for which they charged Penrith Auto Parts Plus $330.48.
13. According to its invoice dated 6 April 2021, LCS Automotive Services Pty Ltd checked the Vehicle for coolant loss (said to be 3 or 4 litres over a couple of weeks) and diagnosed that coolant was being lost because of a crack in the expansion tank of the EGR cooler. I surmise that this inspection took place before the replacement cooler was bought on 1 April, as just described. The only evidence that suggests that the Vehicle was losing coolant at that rate at that time is the statement in LCS Automotive's tax invoice. There is no other evidence of the applicant adding coolant to the Vehicle over the intervening months, or of any other investigation of the EGR cooler being undertaken prior to this, including when the engine was replaced, 2 months earlier.
14. According to LCS Automotive's invoice, LCS Automotive replaced the expansion tank with a part supplied by Parts Plus. LCS issued its invoice for that work, addressed to Penrith Auto Parts Plus, totalling $687.50. At the time the work was undertaken the odometer on the Vehicle read 135,654 kilometres - that is, 1,241 kilometres more than when the engine was replaced in mid-February.
15. The evidence does not establish that the invoices issued by Natra Pty Limited or LCS Automotive to Penrith Auto Parts Plus were ultimately paid for, or reimbursed by, the applicant.
16. On 23 April 2021, Ultra Tune at Rouse Hill NSW conducted an Authorised Inspection Station e-AUVIS inspection of the Vehicle, noting the new engine number on the engine in the Vehicle. An undated handwritten entry in the service log suggests that the new engine was installed when the Vehicle had travelled 134,400 kilometres, and that the milage completed by the replacement engine at that point was 74,000 kilometres.
17. On 9 June 2021, the applicant submitted a request to the respondent using the "contact us" form on the respondent's website. The request stated: "was just reaching out in the hopes of getting a result of the seized engine from the EGR cooler in a 2013 BT-50 which I believe to be a common fault in this vehicle. I have 3 different mechanics look at the vehicle in the time between this happening. As the engine has been fixed, I have been told I need to provide information on this is all the mechanics are not Mazda certified from my knowledge." The applicant provided copies of the invoices for the work and the service logbook for the Vehicle to the respondent on 10 September.
18. As noted above, the applicant then brought these proceedings on 30 September 2021, over 5.5 months after that work was undertaken.
19. On 16 December 2021, the applicant presented the Vehicle to the Mazda dealership at Blacktown NSW where it was inspected by Mr Senz, an automotive consultant with Geoff Senz & Associates. At the time of the inspection the odometer on the Vehicle read 145,925 km - which was 10,271 km more than the reading in early April, when the EGR cooler was replaced.
20. It should be noted here that Mr Senz was only able to inspect the Vehicle 8 months after the engine and EGR cooler had been replaced by the applicant, and he was not able to inspect the engine and the EGR cooler that had been removed from the Vehicle at that time. Accordingly, he was not able to inspect the origin, nature or extent of the particular defects that the applicant complains that he experienced with the original engine and EGR cooler between purchasing the Vehicle in December 2020 and April 2021.
21. Mr Senz has had extensive practical experience with vehicle systems, components, their behaviour and failure analysis, since commencing an automotive mechanical engineering apprenticeship in December 1967. He also has qualifications in automotive mechanical engineering and in accident investigation and reconstruction. I accept that Mr Senz has the appropriate training, study and experience to enable him to give opinion evidence on the issues covered by his report dated 22 December 2021.
22. In undertaking his inspection of the Vehicle, Mr Senz obtained an analysis of the oil in the new engine, which he said showed no residue of any coolant that might have entered the new engine from the original EGR cooler, in the 2 months between the time the engine was replaced (February 2021) and when the EGR cooler was replaced (April 2021). The result is notable, because it would be reasonable to expect at least some traces of coolant in the oil in the new engine if the original EGR cooler had been leaking coolant in those 2 months as the applicant alleges. The absence of coolant in the engine oil therefore does not support the applicant's claim.
23. In his report, Mr Senz concluded that (in summary):

• EGR coolers do not cause engines to fail or wear abnormally;
• the Vehicle (which displayed evidence of recent paint and panel repairs) had a broken fuel tank guard and was in need of numerous repairs, including a broken mirror housing, a battery charger accessory that was not secured, damage to the drivers' seat, and a leaking crankshaft rear main oil seal in the new engine;
• the Vehicle was not roadworthy and not fit for purpose because of the matters that needed repair; and
• there was no evidence of any manufacturing concerns with the Vehicle, as inspected. Mr Senz further summarised his conclusion as follows: "Based on the writer's expertise in the area of vehicle inspection, mechanical failure analysis, vehicle repair and interpretation all visible evidence from photographs it is the writer's considered opinion that it is far more than reasonable to conclude on more than the balance of probabilities that failure of the EGR Cooler most probably propagated from history of poor operator maintenance and most definitely not from an alleged "Inherent or Common Fault"." (The italics are in the original)

1. Noting that the applicant has the burden of proof as described above, and in the absence of any evidence produced by the applicant to the contrary, I accept the conclusions set out by Mr Senz in his report, including his conclusions on the condition of the Vehicle as it was inspected in December 2021. I also accept his conclusion that, on at least the balance of probabilities, the failure of the EGR Cooler and the engine most probably arose from poor maintenance over time, instead of any defect in the EGR Cooler unit itself.

JURISDICTION

1. A threshold issue in these proceedings is whether the Tribunal has jurisdiction to hear and determine the application. In particular, this comes down to whether the applicant's claim is a "consumer claim" within the meaning of s 79E of the FT Act.
2. The Tribunal has statutory jurisdiction only. It only has the jurisdiction and functions that are conferred or imposed on it by the Civil and Administrative Tribunal Act 2013 (NSW) (the CAT Act) and other legislation, as well as regulations and statutory rules: see s 28 of the CAT Act. As explained by the Appeal Panel in Lam v Steve Jarvie Motors [2016] NSWCATAP 186, at [171], Plath v Snowy Monaro Regional Council [2019] NSWCATAP 165, at [4] and Kennett v Financial Ombudsman Service Ltd [2017] NSWCATAP 59, at [9] to [14], the Tribunal's jurisdiction to hear and determine a consumer claim that is based on a contravention of the ACL, is subject to the jurisdictional pre-requisites in Part 6A of the FT Act being satisfied.
3. Part 6A of the FT Act aims to provide for the straightforward resolution of disputes concerning the supply of goods and services to consumers. In Division 2 of that Part: 1. a "consumer" may apply to the Tribunal for determination of a "consumer claim" (as defined): s 79I; and 2. the Tribunal to hear and determine a consumer claim that is the subject of such an application: s79J, except as otherwise provided in ss 79K-79M.
4. As regards consumer claims concerning the supply of goods, for the Tribunal to have jurisdiction to determine the claim: 1. section 79K requires that either: 1. the supply of goods was made in New South Wales, or that 2. the contract/agreement to which the claim relates was made in New South Wales; or that 3. the contract/agreement to which the claim relates at least contemplated that the goods would be supplied in New South Wales; and 1. section 79L requires that either: 1. the cause of action giving rise to the claim first accrued no more than 3 years before the date on which the claim was lodged; and 2. the goods to which the claim relates were supplied (or, if made in instalments, were last supplied) to the claimant no more than 10 years before the date on which the claim was lodged. [Section 79M relates to claims concerning solicitors or barristers' costs, and is not relevant in the circumstances of this case.]
5. Section 79N gives the Tribunal jurisdiction to determine a consumer claim in favour of the claimant by making a money order against the respondent. By s 79S, the amount that the Tribunal may award is limited to (relevantly) $40,000.
6. By its further submissions lodged on 2 March 2022, the respondent asserts that the applicant's claim is not a consumer claim within the Tribunal's jurisdiction:- " because the Respondent did not directly supply the Vehicle to the Applicant and the party who did supply the Vehicle does not meet the definition of supplier [in s 79D of the FT Act]."
7. "Consumer" is defined in s 79D of the FT Act to include a natural person (my underlining) - "… to whom … a supplier has supplied, or agreed to supply, goods or services (whether or not under a contract), or with whom … a supplier has entered into a contract that is collateral to a contract for the supply of goods or services" By s 79H, a person claiming to be a consumer is presumed to be a consumer until the contrary is proved. In proceedings before the Tribunal, the onus of proving that a person or body claiming to be a consumer is not a consumer is on the party who seeks to establish that fact.
8. "Consumer claim" is defined in s 79E(1), to mean a claim by a consumer for one or more of the defined remedies (which relevantly includes the payment of a specified sum of money) (my underlining) - "… that arises from a supply of goods or services by a supplier to the consumer (whether or not under a contract) or that arises under a contract that is collateral to a contract for the supply of goods or services"
9. The Appeal Panels in Kennett v Financial Ombudsman Service Ltd [2017] NSWCATAP 59, and in Skiba v Serendipity (WA) Pty Ltd t/as Advanced Personal Management [2019] NSWCATAP 224 at [38], described that a consumer claim under s 79E has 5 elements. Both cases concerned the supply of services, but the elements cited there apply equally to consumer claims concerning goods. Those elements are: 1. the claim must be made by a 'consumer' as defined in s 79D (although s 79H provides that a person claiming to be a consumer is to be presumed to be a consumer until the contrary is proved); 2. the claim must arise from a 'supply' as defined in s 79G; 3. the supply was of 'goods' (as defined in s 79D) or 'services' (as defined in s 79F); 4. the supply must be made by a 'supplier' as defined in s 79D, to a 'consumer' (whether or not under a contract) in the course of carrying on or purporting to carry on a 'business', as defined in s 4; and 5. the claim must seek one of the remedies listed in s 79E(1)(a) to (d) - which includes a claim for the payment of money.
10. If there was any doubt about the matter, s 79E(2) expressly extends the concept of consumer claim to include (my underlining): "… a claim by a consumer against a supplier (for example, a manufacturer or wholesaler) who is not the direct supplier of goods or services to the consumer if the claim arises from or in connection with the supply of those goods or services by the direct supplier to the consumer." By that clarification, a consumer claim can also be brought in the Tribunal against a manufacturer, wholesaler or importer, provided there is a sufficient connection between that claim and the supply of the goods concerned by the "direct supplier" to the relevant consumer.
11. The meaning of "supply of goods" for the purposes of Part 6A, is provided in s 79G(1): (1) For the purposes of this Part, a reference to the supply of goods includes a reference to any of the following-- (a) supplying goods by way of sale, exchange, lease, hire or hire-purchase, (b) resupplying goods, (c) agreeing to supply goods, (d) supplying goods together with services. A resupply of goods to a consumer by an intervening supplier is therefore a relevant supply for the purposes of s 79E(2). In my view, that includes resupplying goods that have been used in the interim. But is the entity that the applicant bought the car off a "direct supplier" for that purpose?
12. "Supplier" is defined in s 79D to mean a person who supplies goods or services "in the course of carrying on a business". "Business", in turn, is defined in s 4 of the FT Act to include a trade or profession, or a business not carried on for profit.
13. The importance of the supply being made to the consumer by a supplier who carries on a business was noted by the Tribunal in Green Square Garage Pty Ltd v ATM Corporation Pty Ltd t/as What You Wreckin [2021] NSWCATCD 92 at [29], where Member Kinsey held: 'If the claim arises out of a private transaction between individuals where the supply is not made in the course of the supplier carrying on or purporting to carry on a business, the claim is not a consumer claim.'
14. The question of jurisdiction in this case is ultimately whether that principle extends to prevent the Tribunal from hearing claims that might be made under a statute against a manufacturer or importer of those goods where the "direct supplier" of the goods was a private person who was not conducting a business (and who therefore may not be joined as a respondent to the claim in respect of that direct supply).
15. In my view, it does not. It is significant that the phrase "direct supplier" is not defined in s 79E(2). In the absence of a definition of that term, I think the ordinary English usage of that phrase must prevail. Consequently, I think the correct interpretation of "direct supplier to a consumer" in s 79E(2) does not require the direct supplier concerned to be carrying on, or purporting to carry on, a business for the consumer to have a right to bring a consumer claim against the manufacturer or importer in the Tribunal.
16. That view is consistent with the aim of Part 6A as stated in s 79B - namely, the straightforward resolution of disputes concerning the supply of goods to consumers by entitling consumers to bring claims in the Tribunal. It is also consistent with the legislative intent in ss 2 and 271 of the ACL, as applied in NSW by the FT Act, which entitle subsequent purchasers of goods from consumers (not just from businesses) to bring claims against the manufacturer or importer of those goods about whether statutory guarantees have been complied with. This view is also consistent with the principle that consumer protection provisions such as this should be construed to give the fullest relief which the fair meaning of the legislation will allow: Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494 at [99]. In my assessment, it would be a poor result if a purchaser from a dealer can bring an action against a manufacturer or importer in the Tribunal under s 271 but another "affected person" who has the same right under the ACL cannot because of "direct supplier" being construed narrowly to require that supply to be made by a business.
17. It follows from the above that I am satisfied that the applicant's claim is a "consumer claim" within the meaning of s 79E. In particular, I am satisfied that: 1. the applicant is a consumer within the meaning of ss 79D and 79H; 2. the Vehicle falls within the definition of "goods" in s 79D; 3. the respondent carries on business as an importer/wholesaler of motor vehicles, and was the original importer/wholesaler of the Vehicle; 4. there was a supply of the Vehicle by a private person to the applicant, as a direct supplier, within the meaning of s 79E(2); 5. the applicant's claim arises in connection with the supply of the Vehicle to him by that person - in that he would not have the claim against the respondent if he had not purchased the vehicle from that direct supplier, within the meaning of s 79E(2); 6. the applicant's claim seeks one of the remedies set out in s 79E.
18. I am also satisfied on the evidence that: 1. on the balance of probabilities, the applicant took delivery of the Vehicle in New South Wales under a contract that was entered into in New South Wales: s 79K; 2. the claim that the applicant brings did not arise in his hands until he purchased the Vehicle, which is within the 3-year limitation period in s 79L; and 3. the Tribunal has jurisdiction under ss 79N and 79S to make the money order sought by the applicant.
19. Accordingly, I am satisfied that the Tribunal has the necessary jurisdiction to hear and determine the applicant's claim.

CONSIDERATION - APPLYING THE LAW TO THE FACTS AS FOUND

1. For the applicant to have a claim against the manufacturer or importer of the Vehicle under s 271(1) of the ACL in respect of the guarantee of acceptable quality, either: 1. the applicant's purchase from his vendor must be made as a consumer within the meaning of s 3 - so the applicant is a "a consumer who acquires the goods" within the first arm of the definition of "affected person" in s 2, or 2. that vendor's (original) purchase must be made as a consumer, within the meaning of s 3 - so the applicant is a "a person who acquires the goods from the consumer" within the second arm of the definition of "affected person" in s 2.
2. However, as noted at the start of these reasons, the applicant proceeds on the assumption that: 1. the applicant's purchase of the Vehicle from his vendor, Elsmore, was not a consumer purchase within the meaning of s 3 - so that the guarantee of acceptable quality did not apply directly to that purchase; but instead 2. Elsmore bought the Vehicle as a "consumer" from a relevant supplier within that meaning - so that the guarantee of acceptable quality in s 54 of the ACL applied to that purchase.
3. Neither assumption is necessarily correct: 1. Firstly, if the applicant had purchased the Vehicle from a trading business that was selling it as an unwanted a business asset, he might still have purchased the Vehicle as a consumer in trade or commerce from that seller in a way that would have resulted in the guarantee of acceptable quality applying to that sale. 2. Secondly, the original purchase by Elmore might not have been a consumer purchase under s 3, because the price paid for the Vehicle on that original purchase might have exceeded $40,000 and the Vehicle might have been excluded by subsection 3(1)(a) or (b) - for example because, as a utility vehicle the Vehicle may not have been a kind of vehicle that is "ordinarily acquired for personal, domestic or household use or consumption", or it was acquired by that original purchaser for use principally in the transport of goods on public roads. 3. Thirdly, because Elsmore might not have been the relevant consumer who purchased the Vehicle from a relevant supplier (ie, a dealership): it too might have bought the Vehicle as a used car.
4. There is insufficient evidence before the Tribunal to establish the correct position in respect of either sale. The result of this is that in failing to prove that Elsmore was a consumer when it bought the Vehicle, the applicant has failed to prove an essential element that grounds his right to bring a claim for damages against the importer or manufacturer as an "affected person" under s 271.
5. The applicant's claim must therefore fail on that basis, however that is not the only ground on which it must fail. The claim must also fail because, even if the applicant is an "affected person" within the meaning of s 271, the applicant has failed to prove on the balance of probabilities that the Vehicle was of less than acceptable quality when the relevant purchase was made.
6. Whether goods - which expressly includes motor vehicles - are of acceptable quality within the meaning of s 54 of the ACL is a question of fact. The fact in issue depends on the Tribunal's determination of what a "reasonable consumer fully acquainted with the state and condition of the goods" would regard as acceptable about the factors listed in subsection 54(2) having regard to the matters in subsection 54(3) - including whether the goods are "fit for all the purposes for which goods of that kind are commonly supplied" and free from defects. For the applicant to be successful on the claim, the Tribunal must find that such a consumer would, as a matter of fact, regard the listed aspects of the goods (namely, their fitness for all the purposes for which goods of that kind are commonly supplied; their appearance and finish; their degree of freedom from defects; their safety and their durability) were less than acceptable having regard to those particular matters. As stated above, the applicant has the ultimate burden of proving that fact on the balance of probabilities. If the applicant cannot prove that fact, then the claim that the guarantee was breached must be dismissed.
7. The relevant principles to apply in a case such as the present were summarised by Derrington J in Vautin v By Winddown (No 4) [2018] FCA 426; (2018) 362 ALR 702 as follows: "[142] Mr Vautin asserts that the existence of the construction defects in the sandwich core panels of Revive means that the vessel is not of an "acceptable quality" within the meaning of the guarantee imposed by s 54 of the ACL. In determining whether the guarantee in that section is contravened the following matters are relevant: (a) The test as to whether goods are of an "acceptable quality" is an objective one; being taken from the perspective of a "reasonable consumer" (APS Satellite Pty Ltd (formerly known as Sky Mesh Pty Ltd) v Ipstar Australia Pty Ltd [2016] NSWSC 1898 … at [57]; Merck Sharp & Dohme (Australia) Pty Ltd v Peterson (2011) 196 FCR 145; 284 ALR 1; [2011] FCAFC 128). (b) The question for the "reasonable consumer" is whether the goods in question have the identified qualities enumerated in 54(2) to an "acceptable standard". This requirement is derived from the words "as a reasonable consumer … would regard as acceptable". (c) The "acceptable standard" is used as the yardstick against which the qualities of the goods are to be measured. It is ascertained by a consideration of the matters referred to in s 54(3); the nature of the goods, their price, any statement made about the goods on packaging or labels, any representations made about the goods by the supplier or manufacturer, and any other circumstance relating to their supply. (d) It is necessary the goods have all of the qualities identified in s 54(2) to the ascertained acceptable standard. Those qualities are that the goods are fit for all the purposes for which goods of that kind are commonly supplied, acceptable in appearance and finish, free from defects, safe and durable. (e) In the assessment of whether the goods meet that relevant standard, the reasonable consumer is taken to be fully acquainted with the state and condition of the goods (including any hidden defects of the goods). (f) If the goods supplied do not have all of the identified qualities to the acceptable standard, they will not be of an "acceptable quality". [143] In compendious terms, the issue is whether, objectively, the goods supplied (when taking into account their actual quality including any latent defects) are, to an acceptable standard, fit for all the purposes for which goods of that kind are commonly supplied, acceptable in appearance and finish, free from defects, safe and durable when measured by a standard which reflects the nature of the goods, their price, statements about the good as per their packaging, representations made about the goods and any other relevant circumstance. In Prestige Auto Traders Australia Ltd v Bonnefin [2017] NSWSC 149 at [132] N Adams J identified the manner in which s 54 should be applied in the following way: "The relevant test in s 54(2) of the ACL (NSW) of whether or not goods are of "acceptable quality" is an objective one based on whether a reasonable consumer who was aware of the "defects" in the goods at the time of the supply would have considered them to be of acceptable quality. There was no issue taken that the determination of what is objectively reasonable for a consumer to expect is to be made taking into account the relevant information known as at the time of the trial, including "after-acquired knowledge": Medtel Pty Ltd v Courtney (2003) 130 FCR 182; 198 ALR 630; [2003] FCAFC 151 at [66] and [70].'"
8. Whether the goods are to be regarded as fit for all the purposes for which goods of the kind are commonly supplied is a question of some complexity. As Branson J stated in Medtel Pty Ltd v Courtney (2003) 198 ALR 630 (Medtel), the test requires the making of a comparison. It calls for the fitness for purpose of the goods in question to be measured against what it was objectively reasonable to expect, in terms of fitness for purpose, in all the relevant circumstances. The definition requires consideration of fitness for all purposes for which such goods are commonly supplied.
9. In Australian Competition and Consumer Commission v Jayco Corporation Pty Ltd [2020] FCA 1672 Wheelahan J said: "[25] … The standards under s 54(2) include that goods will be fit for all purposes for which goods of that kind are commonly supplied. This general standard of fitness for purpose is not dependent upon the consumer communicating any intended purpose to the supplier, or relying upon the supplier's skill or judgment. And, in relation to the general standard, it does not suffice that the goods will be fit for only some of those purposes. [26] The standard of acceptable quality in s 54(2) has as its reference point a construct, namely the objective standard of a reasonable consumer fully acquainted with the state and condition of the goods, including any hidden defects of the goods. The reasonable consumer sits with an array of other hypothetical persons who have been recruited by the law and by reference to whom objective standards are evaluated: see, Healthcare at Home Ltd v The Common Services Agency [2014] UKSC 49; 4 All ER 210 at [1]-[4] (Lord Reed JSC). Such a person has been described as an anthropomorphic conception of justice that is and must be the court itself: see Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696 at 728 (Lord Radcliffe). [27] The hypothetical question whether the reasonable consumer would have regarded the quality of the goods as acceptable is to be determined at the time of supply. However, the reference in s 54(2) to hidden defects has the consequence that for the purposes of determining that question, the reasonable consumer may be acquainted with information known at the time of trial: cf, Medtel Pty Ltd v Courtney [2003] FCAFC 151; 130 FCR 182 at [70] (Branson J, Jacobson J agreeing). The standard of acceptable quality prescribed by s 54(2) is not absolute, or a standard of perfection. It is tempered by what a reasonable consumer would regard as acceptable having regard to the several matters in s 54(3). These matters render the standard of acceptable quality elastic, and context specific: Contact Energy Ltd v Jones [2009] 2 NZLR 830 at [95] (Miller J). The significance of the components of the guarantee of acceptable quality will therefore vary with the circumstances of each case."
10. The above passages were recently cited with approval by the Appeal Panel of this Tribunal, in LSH Auto (Sydney) Pty Ltd v Sherman (No 2) [2021] NSWCATAP 272, [35]-[36], a decision that was handed down on 13 September 2021.
11. The time at which the determination of whether or not the goods are of acceptable quality is made is when the goods are supplied to a consumer: Medtel; Merck Sharp and Dohme (Australia) Pty Ltd v Peterson [2011] FCAFC 128. However, that does not mean that information about the goods not known at the time the goods were supplied is irrelevant. The determination of what it was objectively reasonable for the consumer to expect is to be made taking into account all relevant information available at the time of trial: Medtel. This will include the subsequent performance of the goods, the conditions in which the goods were used (such as the weather), the reasonableness of the consumer's treatment of the goods and the way the goods have performed in those circumstances.
12. In this case, the applicant essentially alleges that the Vehicle had a design or manufacturing defect in the EGR cooler which rendered the Vehicle of less than acceptable quality on 2 grounds - firstly, because of the presence of the alleged defect itself and secondly, because the Vehicle was not fit for the purpose of being driven as a motor vehicle because of the damage the alleged defect was causing caused to the engine.
13. However the applicant has not provided sufficient evidence to the Tribunal to enable me to conclude to the required standard (the balance of probabilities) that either: 1. the engine and EGR cooler in the Vehicle at the time of purchase were the original engine and EGR cooler from its manufacture; or 2. if they were, the EGR cooler in the Vehicle (or in vehicles of this make, model and year of manufacture, more generally) was defective because of a design or manufacturing fault in that unit. The first of those points is assumed but not proved. The highest evidence that he provides on the second point is a combination of his own (unqualified) assertions that the EGR cooler had a "common fault" defect when it was manufactured or sold, together with hearsay evidence of statements made by other people to him that the EGR cooler had a "common fault" defect when it was manufactured or sold. That evidence is insufficient to persuade me to the standard described in Warner v Hung, cited above, that there was any such "common defect" in the EGR cooler of the Vehicle.
14. Additionally, the applicant has not provided sufficient evidence to the Tribunal to enable me to conclude to that same standard that the overheating concerns that he complains of experiencing between December 2020 and subsequent replacement of the EGR cooler were due to the EGR cooler. The evidence is again insufficient to persuade me that the original EGR cooler that was in the Vehicle when the applicant bought it caused that overheating compared to, say, poor maintenance, or the engine or the simply wearing out or being damaged through use.
15. Looking at the factors set out in s 54(3) of the ACL as far as they related to the original sale of the Vehicle to the original purchaser: 1. the Vehicle was a utility motor vehicle; 2. the price of the Vehicle at the time of the original purchase is unknown; 3. the applicant has not identified any statements that were made about the Vehicle on any packaging or label at or before that original sale, or any representations that might have been made about the Vehicle by the supplier or manufacturer of it (including the respondent as the importer and deemed manufacturer for these purposes) at or before the time it was sold to the original purchaser; and 4. the applicant has not identified any other circumstances relating to the supply of the Vehicle to the original purchaser that are might be relevant to determining if the Vehicle was of acceptable quality, or not.
16. A reasonable consumer will expect that the parts of a motor vehicle engine wear with use. At the time that the applicant purchased the Vehicle, it was over 7 years old and had travelled more than 127,500 kilometres. In my view, a reasonable consumer would expect that various parts on a vehicle of that age and mileage may require replacement. That expectation would be stronger if the vehicle had not been fully and properly maintained in the intervening period and the consumer was aware of that.
17. Without stronger evidence to demonstrate the source of the problem with the EGR cooler, it is not possible for the Tribunal to determine that the problem with the EGR cooler complained of by the applicant was a defect originating with its design and/or the manufacture of the Vehicle, or that it has developed over time through usage by the previous owner(s). That evidence is not available because the engine and the EGR cooler were removed from the vehicle, and presumably disposed of, before the applicant made his complaint to the respondent. Consequently, neither party has been able to produce any evidence to establish its condition when the engine seized up, and whether that change in condition was due to a design or manufacturing issue, or its subsequent use.
18. Having regard to those matters, the applicant has failed to demonstrate that the Vehicle failed to meet one of the 5 tests set out in s 54(2) to the degree that a reasonable consumer fully acquainted with the state and condition of the Vehicle (including any hidden defects of the Vehicle, such as a hidden defect in the EGR cooler), would regard as acceptable.
19. To the contrary, there is evidence that the coolant system might not have been handled correctly by one of the owners of the Vehicle or one of the tradesmen who inspected it. For example, the LCS Automotive invoice indicates that they "'Back flushed cooling system several times due to wrong coolant being in system" (my italics).
20. I accept the respondent's submission that incorrect coolant in a Vehicle of this age is not a design or manufacturing concern - and that it would more likely be related to either a repair, maintenance and/or servicing issue after the Vehicle was originally purchased.
21. The applicant's claim must therefore also fail for these reasons.
22. Lastly, I accept the respondent's submission that it has not been demonstrated by the Applicant that an engine replacement was actually required because of the defect in the EGR cooler that is complained of. The evidence before the Tribunal does not demonstrate on the balance of probabilities that the engine in the Vehicle seized up because of any leak of coolant from the EGR cooler into the engine. The Ultra Tune email, for example, identified only that further inspection was required in order to determine if that was the case. The invoices from Penrith Auto Parts Plus and Zoom Automotive Mechanical Repairs do not indicate that any further investigation was completed, and there is no evidence that it was determined that an engine replacement was required - either generally or because of any leak in the EGR cooler.
23. Consequently, even if I was satisfied that there was a relevant defect in the EGR cooler (which I am not) I am not satisfied that the amounts claimed for purchasing and installing a new engine were incurred as a consequence of that defect. The applicant has failed to exclude or minimise (for example) the probability that the seizing of the engine was caused by poor use or maintenance of the Vehicle over the 7 years between when it was manufactured and when it was sold to the applicant.
24. To put that another way, the applicant has failed to demonstrate that those costs incurred in purchasing and installing the replacement engine (leaving aside the replacement of the EGR cooler itself) were suffered by him "because" of the alleged defect in the EGR cooler, within the meaning of s 272(1)(b), cited above.

CONCLUSION AND ORDERS

1. For these reasons, the Tribunal makes the following order: 1. The applicant's claim against the respondent is dismissed because, having considered the material placed before it, the Tribunal is not satisfied (at the civil standard of proof) that the grounds required to make the orders sought have been established.
2. I am satisfied pursuant to s 79U of the FT Act, including having regard to the matters set out in subsection 79U(2), that this order is fair and equitable to the parties.

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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 2022