Van Dyk v Gathercole

NCAT Appeal Panel|2018-04-10

Background

This is an appeal from a decision of the Consumer and Commercial Division dated 11 December 2017. The appellant (Mr Van Dyk) was the applicant below. His claim was dismissed.
In brief his claim was for a refund from the respondent of the purchase price of 16 storage batteries used in his domestic power system on the ground that they did not perform anywhere close to their claimed capacity, due to faults. He also sought an order that the supplier collect the batteries.
Mr Van Dyk was self-represented. The respondent did not appear at the appeal; it did not file a reply to the appeal or any other documents in relation to the appeal. The respondent also did not file any evidence in the first hearing and appears to have only made submissions by telephone at the first hearing. We are satisfied that the respondent has been notified of the date and time of this appeal hearing; provided with the Notice of Appeal to which was attached a copy of Mr Van Dyk's written submissions and evidence on the hearing of the matter below, plus two items of fresh evidence which Mr Van Dyk sought to be admitted and relied upon at the appeal. These items of new evidence were a bar chart showing domestic electricity use involving the faulty batteries and involving new replacement batteries installed just before the hearing below; and an "expert" report by Mr C Dainerof CASS, largely confirming Mr Van Dyk's test results on the faulty batteries.
The thrust of Mr Van Dyk's appeal was that the decision of the Tribunal below was affected by error in that it failed to properly take into account the evidence and submissions before it; and thus the reasons given for the decision were inadequate. Mr Van Dyk also sought leave to appeal (s 80(2) of the Civil and Administrative Tribunal Act 2013 (NSW) (CAT Act)) on the grounds that the decision below was not fair and equitable and was against the weight of evidence.
At the hearing below Mr Van Dyk filed a 65 page document entitled "Hearing Submission", which comprised an Executive Summary of the submissions and numerous attachments. As mentioned, this document was attached to the notice of appeal.

The Tribunal dismissed Mr Van Dyk's application on the basis that he had not discharged his burden of proof.

The Decision at First Instance

We set out the orders, reasons and findings of fact by the Tribunal below in full: 1. The application 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. REASONS The respondent is a supplier who supplies batteries in the course of its business and the applicant is a natural person who purchased 16 batteries from the respondent in July 2016 for the sum of $4,036.02. In light of the above I am satisfied that the application falls within the consumer protection legislation that bestows jurisdiction on the Tribunal [sic]. The Applicant's Case The applicant's case is that the subject batteries do not perform "anywhere near" the rating suggested in the respondent's publications and invoice material and so are not of an acceptable quality and not fit for purpose. The applicant bases this claim on his own testing which he says was carried out when the batteries were fully charged and he found that they only discharged at 15% of their rated capacity. The applicant is an electrical engineer. He stated that other people have viewed the batteries but he provided no other evidence as to the batteries' capacity. The applicant carried out his testing in May 2017 and he agrees that in the intervening almost 12 months between purchase and testing he was using the batteries. The applicant says that he thought the batteries needed to be "bedded in" and so took no action to examine whether they were fully operational until May, although he did contact the respondent to voice his concerns in February 2017. The applicant seeks a complete refund for the batteries' "major failure" and is not prepared to accept new batteries under the warranty that applies. The respondent's Case The respondent agrees that the applicant did contact him in February 2017 but argues that given the date of purchase, the Tribunal should assume that the batteries were operating satisfactorily for several months. The respondent's position is that it has requested and been denied the opportunity to inspect the batteries, so that it may then test them and follow through the warranty procedure under which it can repair and replace the batteries. The respondent took issue with the appropriateness and reliability of the applicant's documented testing process. Findings of Fact In finding that the applicant, on balance, has failed to discharge the burden he bears to prove his case on the balance of probabilities, I have been particularly persuaded by the following: 1. the applicant's own testing as an electrical engineer, is not persuasive; 2. what is more this testing is not substantiated by any other arm's length evidence; 3. further, the respondent has raised feasible doubts with the testing method, process and conclusions reached in the applicant's testing process; 4. as a result there is no evidence to show, as the applicant alleges, that the failure of which the applicant complains is "major" so as to entitle him to a complete refund, being the only remedy the applicant seeks; 5. the time gap between July 2016 (being the date of purchase) and February 2017 (when the applicant first approached the respondent), during which the applicant was using the batteries, does not assist the applicant's case that he is entitled to return the batteries and receive a full refund of the purchase price.
Mr Van Dyk, an experienced electrical engineer (with specific expertise in batteries) performed and documented his own tests on the batteries. The respondent put on no evidence and only made submissions by telephone at the hearing.

The Reasons at First Instance

The Tribunal did not explain its reasons why it did not accept Mr Van Dyk's evidence and regarded it as "unpersuasive". The Tribunal also referred to the lack of other "arm's length evidence" but does not state why the applicant's evidence should not be accepted as it stood.
The Tribunal also took into account that Mr Van Dyk delayed fully testing the batteries for some months. Mr Van Dyk did explain the delay as resulting from time needed for the system to "bed in"; to test other parts of the system to ensure that they were not the problem; and in dealing unsuccessfully with the respondent to remedy the problem. The Tribunal did not engage adequately with these facts.
The Tribunal was asked by the respondent to infer that due to the complaint being lodged some months after the delivery of the batteries to assume that the batteries had operated satisfactorily until the complaint was first made. It seems to have accepted that invitation, but does not explain why. The Tribunal found that the time gap did not assist the applicant's case, but did not give any obvious consideration to Mr Van Dyk's explanation of this.
The Tribunal further said that the respondent "has raised feasible doubts with the testing method, process and conclusion reached in the applicant's testing process" but fails to identify or test these "feasible doubts" against the applicant's evidence. Further, the doubts were raised by the respondent himself and not by someone at arm's length from the respondent. Whether those doubts should have therefore been accepted was not considered.
The Tribunal held that there was no evidence to show that the performance failure of the batteries was so "major" as to entitle Mr Van Dyk to a complete refund. However the Tribunal does not address the evidence as to why replacement of faulty batteries was not an appropriate remedy (as explained by Mr Van Dyk "mixing old and new batteries leads to significant shortening of the life of the whole battery system"). An applicant is entitled to know the reasons for his claim being dismissed in reasonable detail by reference to the well organised and extensive evidence submitted; and the absence of any competing evidence from the respondent.

Decision

Mr Van Dyk states the following grounds of appeal: the Tribunal's failure to take into consideration the extensive submissions and evidence provided to the Tribunal in the hearing submission document causing the Tribunal's decision at first instance not to be fair and equitable and against the weight of evidence.
The Appeal Panel accepts this as raising a ground of appeal that the Tribunal below made an error of law in failing to consider the applicant's evidence and submissions and indeed proceeded in the absence of evidence from the respondent, and in finding that the appellant had produced no other evidence of the capacity of the faulty batteries; and finding that there was no evidence that the batteries' failure was major and entitled to him to a complete refund.
The Tribunal below said: 1. that Mr Van Dyk took no action to examine whether the batteries were fully operational until May 2017 when there was evidence that he conducted testing much earlier; 2. it should accept the respondent's submission that the Tribunal should assume the batteries were satisfactory because the applicant did not complain until February 2017 by saying that the time gap did not assist Mr Van Dyk's case - when Mr Van Dyk had carefully set out the timeline; 3. that the respondent had been denied an opportunity to inspect the batteries without reference to the evidence of Mr Van Dyk that the respondent had taken the position up until conciliation that the batteries (weighing 480kg in total) should be returned at the applicant's expense from the Blue Mountains, NSW to Queensland for inspection. The applicant's evidence was that he was prepared and would welcome inspection at his own premises (clearly the returning of the batteries was quite unreasonable considering their weight); and 4. that the respondent's submissions regarding doubts on the testing process could be accepted without reference to any evidence to this effect.
The Appeal Panel accepts the reasons given by the Tribunal below were not adequate to justify a decision to dismiss the claim. Under the heading "Findings of Fact" the Tribunal below did not (using the Tribunal's numbering): 1. explain why Mr Van Dyk's testing results were unpersuasive; 2. explain why testing by a third party was required; 3. set out what "feasible doubts" about the testing method process and conclusions were; 4. explain why it was found that there was "no evidence" that the faults were not "major" when there was evidence of the faults; and 5. state why the time gap between the purchase and complaint did not assist the applicant's case when that time gap had been explained by Mr Van Dyk.
In the case of Khan v Kang [2014] NSWCATAP 48 the appellant raised as errors of law that the Tribunal, by failing to give reasons for the dismissal of aspects of the claims for faulty workmanship; or by failure to exercise jurisdiction when it was properly invoked; and in another respect by finding that part of the claim was not supported by evidence. The appellant succeeded in the appeal and the Appeal Panel identified the obligation to give reasons as founded both in s 62 CAT Act (particular s 62(3)) and in the Common Law. The Appeal Panel discussed that obligation at [28] where it said: 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...
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 Panel also found that the Tribunal's decision that the claim was without evidentiary support was wrong and that this involved an error of law at [33]. At [40] the Tribunal said: Section 62(3) CAT Act also provides a useful summary of what oral reasons or a written statement of reasons are to contain, namely: (1) the Tribunal's findings on material questions of fact, referring to the evidence or other material on which those findings were based; (2) the Tribunal's understanding of the applicable law; (3) the reasoning process that led the Tribunal to the conclusion it made.
At [41]: the reasoning processes referred to in s62(3)(c) include the reasoning by which the law was applied to the facts as found to reach all intermediate and ultimate conclusions. It is important to bear in mind, however, that these reasoning processes also encompass the reasoning which led the Tribunal to reach its factual conclusions: why certain evidence was accepted and other evidence rejected; why a factual conclusion was reached; and similar matters.

The Common Law

At [42] of Khan v Kang the Appeal Panel said: Section 62 of the Act is not, however, the sole source of the obligation to give reasons for decisions. There is a Common Law duty to give reasons "apart from any express requirement of any statute" - Pettitt v Dunkley [1971]1 NSW LR 376 at [387]. The duty applies to the Tribunal as well as to courts - Campbelltown City Council v Vegan [2006] NSW CA 284. ... [43] There are two bases identified in the authorities for the imposition of this duty. First, it facilitates a litigant who may be aggrieved, exercising rights he or she may have to appeal and thus ensures that any appeal right is not rendered nugatory or illusive - Pettitt v Dunkley [1971] 1 NSW LR 376 at [387]. [44] Secondly, reasons are required since a failure to provide sufficient reasons promotes "a sense of grievance" and denies "both the fact and the appearance of justice having been done", thus working a miscarriage of justice...
Khan v Kang was cited in Hernady v Raccani [2016] NSWCATAP 67 where it was held that grounds of appeal for error of law cover the Tribunal's failure to give adequate reasons and failure to exercise jurisdiction properly invoked (by failing to make findings of material fact and consider the evidence). The Appeal Panel said that the two claimed errors of law should be seen as distinct [30] and found that the Tribunal had not given adequate reasons for the orders it made.
The Appeal Panel said at [52]: the Appeal Panel considers that a member called upon to determine claims such as the [claims] would generally be required to do the following in order to exercise the jurisdiction of the Tribunal, assuming it has been properly invoked: (1) identify each relevant claim for relief and that statutory provision or Common Law principle supporting the claim; (2) identify each of the relevant elements of the causes of action which must be satisfied in order to justify granting the relief sought; (3) make material findings of fact and law in respect of each of those elements; (4) explain what relief, if any, should be granted and why.
At [53]-[54] it went on: It may be the case that the fact that these steps have been taken can be seen to be implicit in the reasons and orders made and this will be sufficient... [54] It is always preferable, however, unless circumstances do not permit, for the steps outlined above to be explicitly addressed in the reasons for decision or the orders made. As we have made clear above, in doing so the reasons do not always have to be lengthy or detailed, especially if that would be neither necessary nor proportionate. Nonetheless, the orders and reasons must make it clear that the jurisdiction of the Tribunal, where it has been properly invoked, has been exercised.
The Appeal Panel found that there had been a failure to exercise jurisdiction and thus an error of law.
In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69. it has been held that a failure to provide adequate reasons constitutes an error of law which means the appellant may appeal as of right (s 80(2)(a) CAT Act).
We find that in this case the Tribunal's reasons for the dismissal of Mr Van Dyk's claim are inadequately explained in the light of the evidence before it and find that there was an error of law. Accordingly we uphold the appeal and set aside the dismissal of his claim below. It is therefore not necessary to address the application for leave to appeal on other grounds.

Can the Appeal Panel Determine the Application?

In the ordinary course in matters such as this, it is common to remit the matter for rehearing. However there is power (s 80(3) CAT Act) for the Appeal Panel to determine the matter rather than put the parties to the trouble of another hearing in appropriate cases. Given that the respondent has been served twice with the applicant's evidence and submissions on the hearing; and the Notice of Appeal (containing the appellant's submissions on the appeal and the proposed new documentary evidence); and the Appeal Panel's directions dated 1 February 2018 have been served on the respondent which set out the date and time of the Appeal Panel hearing; and those directions contained a Note that in appropriate cases the Appeal Panel could deal with the appeal by way of a new hearing - it is our view that the respondent has been given due notice of the applicant's case and has chosen not to participate.
We would admit the new evidence on this rehearing concerning Mr Van Dyk's domestic electricity consumption over a period which covers the use of the old faulty batteries and the use of new replacement batteries on the basis that it was not reasonably available at the time of the first hearing below because the new replacement batteries were installed only days before the first hearing. We would admit the "expert" evidence from CASS on the basis that Mr Van Dyk's long experience and the absence of "arm's length" other evidence had been discounted at the first hearing, and the new CASS evidence corroborates Mr Van Dyk's testing evidence and is relevant in the case. The respondent has had this new evidence and has chosen not to participate. We therefore consider it not to be unfair to the respondent if we admit it.
We found Mr Van Dyk to be a credible witness who had used his long, relevant experience to carefully test the components of the system to satisfy himself that the problem lay with the faulty batteries before he lodged a complaint. He tried reasonably to negotiate a solution with the respondent but seemed to get largely fobbed off. He did not overstate his case or overreach in his claim for a remedy.
He did claim his costs of lodging the appeal but we find that there were no special circumstances which would allow us to award costs to him: see s 60 CAT Act.
We find that the evidence discloses that the batteries supplied by the respondent were faulty in that they performed only to about 20% of their represented capacity at best. Mr Dainer's evidence was that the capacity differed and ranged from 10% to 20% from the capacity represented by the respondent. We find that this level of underperformance can be fairly described as a major failure of the batteries to meet the capacity which they were represented to have. Mr Van Dyk is accordingly entitled to reject the batteries and be refunded the full purchase price of $4,036.02.

Orders

The Appeal Panel makes the following orders: 1. Appeal upheld; 2. Dismissal by the Tribunal at first instance set aside; 3. Respondent to pay the applicant the sum of $4,036.02 within 14 days of publication of these reasons; 4. Respondent to collect the batteries supplied by it from the applicant's premises as soon as mutually convenient but otherwise within two months of the date of these orders; and 5. Each party to pay their own costs.

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: 17 May 2018

At a glance

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Judgment (9 paragraphs)

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Legislation Cited (1)

Cases Cited (3)