This is an appeal from a decision of the Consumer and Commercial Division of the Tribunal dismissing proceedings involving a claim that a Mazda BT-50 motor vehicle purchased new by the appellant on 7 June 2013 was not of acceptable quality in breach of the consumer guarantee provisions under the Australian Consumer Law 2010 (NSW) ('the ACL').
The decision and reasons of the Tribunal are dated 10 July 2020. The appeal was filed on 3 August 2020. Accordingly, the appeal was filed within the time period stipulated in Reg. 25 of the Civil and Administrative Tribunal Rules 2014 (NSW) ('the NCAT Rules').
The vehicle was purchased from the third respondent ('West End Mazda'). It was serviced from time to time by the second respondent ('Rockdale Mazda'). The purchase price of the vehicle was $22,880.
The appellant filed proceedings in the Tribunal on 21 November 2019, more than 6 years after purchasing the vehicle.
The appellant alleged that the vehicle had experienced a series of mechanical faults that required repair over the years since purchase. The vehicle had been taken for repairs to Rockdale Mazda on a number of occasions in the period from purchase until August 2017 for a number of different issues.
Importantly, in March 2018 the vehicle was taken to Rockdale Mazda with the engine emitting black smoke; being excessively noisy; and losing power. At that stage, the vehicle had travelled approximately 81,000 klms.
The vehicle was diagnosed as having a major engine fault. In April 2018 the manufacturer (Mazda Australia) agreed to replace the engine and provide a warranty of 2 years or 20,000 klms on the replacement motor.
The appellant is a licensed mechanic. In the period between April 2018 and November 2019 he performed two services on the vehicle.
On 13 November 2019, whilst travelling on the Mooney Mooney Bridge on the M1 Motorway between Sydney and the Central Coast, the vehicle lost power and emitted a significant amount of black smoke. The appellant believed the hose to the turbocharger had disconnected. At that stage the vehicle had travelled at total of 98,902 klms.
The appellant did not immediately cease to drive the vehicle or arrange for it to be towed to the nearest Mazda dealership. Rather, the appellant arranged for a mechanic located in Rockdale, NSW (All Car Automotive) to attend where the vehicle had been parked on the side of the road near the Mooney Mooney Bridge.
All Car Automotive attended the vehicle and performed temporary repairs. The tax invoice of All Car Automotive dated 13 November 2019 that was in evidence before the Tribunal stated that the appellant was advised that "urgent attention required to turbo".
The appellant continued to drive the vehicle for approximately 400 klms. He had the vehicle inspected by Reflex Automotive Engineering in February 2020, who provided a report dated 27 February 2020 and a supplementary report.
The appellant, from late November 2019, informed Mazda Australia that he sought the vehicle be repurchased from him and the appellant also sought reimbursement for the cost of a vehicle he had rented whilst he could not use his vehicle. In the alternative, the appellant sought Mazda Australia pay for repair costs to the engine.
On 14 January 2020 Mazda Australia wrote to the applicant stating that a Mazda Field Technical Specialist had inspected the vehicle, who "found evidence that a foreign material has come into contact with the compressor wheel of the turbocharger, resulting in damage". Mazda Australia declined to provide a replacement vehicle; or refund the purchase price; or pay for the costs of repairs because "no manufacturing concern was found with your vehicle and the damage has been caused by external influence".
The appellant made clear at the hearing he was not seeking a replacement vehicle (T: 3178-3223). The evidence at the hearing established that it would cost approximately $5,000 to repair the vehicle. Rather, he was seeking "compensation" of up to $40,000 that predominantly involved the cost of hiring a replacement vehicle, because the appellant had told Mazda Australia that he would regard them as liable for such a cost. The appellant stated that he was prepared to "surrender" the vehicle because it had been unregistered for 9 months and "given all the faults I wasn't prepared to contribute anything more in fixing this vehicle up to get it back to scratch so I naturally will be seeking compensation and seeking the rental plus my reports cost" (T: 3178-3182).
The appellant's documentary evidence at the hearing included a document from "Motorsport Corporation Group of Companies" that the appellant had hired a 2019 model Ford Ranger utility for the period from 14 November 2019 to 13 May 2020 (when the contract had been "terminated") for the amount of $35,640.
At the time of the hearing, the appellant still owned the vehicle, but it was unregistered and was, according to the evidence of the appellant, not being driven.
At the hearing before the Tribunal the parties relied upon extensive documentary evidence. Importantly, both the appellant and Mazda Australia had obtained expert reports from automotive engineers. The appellant had obtained a report from Mr Scott and Mazda Australia had obtained a report from Mr Senz.
Mr Scott, in a report dated 13 March 2020, stated that on 13 November 2019 there had been "displacement of the discharge hose from the turbocharger to the air intercooler" which had damaged the fins of the turbocharger. Mr Scott asserted:
…I am of the opinion that the turbocharger repeated failure and the subsequent engine damage inspected is a direct result of an incorrect fitment, either by fault in the design or poor-quality workmanship, of the rubber hose from the turbocharger compressor outlet to the charge air intercooler. Evidence supplied by a turbocharger specialist repairer (Reflex) supports this conclusion.
Mr Scott asserted that the cause of the engine requiring replacement in 2018 was also due to the failure of the turbocharger, and:
The repeated damage to the turbocharger and subsequent damage to the engine indicates the fault with the security of the air inlet hose most probably due to a design fault or material fault in components.
Mr Scott further asserted that due to the series of faults with the vehicle requiring repair, including the replacement of the motor in 2018, it was not of acceptable quality.
Mr Senz, in a report of 8 April 2020, agreed that there had been a "failure" of the turbocharger of the engine on 13 November 2019, but disagreed with Mr Scott's opinion that it was caused by an incorrect fitment or design fault.
Rather, Mr Senz asserted that the turbocharger had been damaged by the "ingestion of a foreign material" when being driven. Mr Senz did not believe that the damage to the turbocharger had been caused by the air inlet hose becoming disconnected leading to 'overspeeding' of the turbocharger. Mr Senz believed the vehicle was capable of repair and did not require a second replacement engine. Mr Senz did not believe the history of mechanical issues with the vehicle were of sufficient magnitude, duration or frequency that the vehicle was not of acceptable quality.
At the hearing before the Tribunal, both Mr Scott and Mr Senz were called to give evidence and were questioned by the parties. The presiding Senior Member also asked questions of the experts to understand the basis of their respective positions.
[2]
DECISION OF THE TRIBUNAL
The Tribunal's written reasons set out that the appellant was claiming "consequential loss and damage which included the expenses of hiring an alternative vehicle over 6 months (up to $35,640 is claimed)" due to the vehicle being defective by reason of a manufacturing design fault with the turbocharger.
The Tribunal found that the proceedings had been commenced within the limitation period under s 79L of the Fair Trading Act 1987 (NSW) ('the FTA') and the Tribunal had jurisdiction to hear and determine the matter as the applicant was a "consumer" and the claim was a "consumer claim" under Part 6A of the FTA.
The reasons of the Tribunal referred in detail to the evidence of Mr Scott and Mr Senz. The Tribunal found that it was not satisfied that the cause of the failure of the turbocharger was due to "overspeeding" after the inlet hose became detached. The Tribunal found that the inlet hose attached to the turbocharger had become disconnected but was not satisfied that the damage to the turbocharger was caused by this disconnection, nor that there was any "design fault" with the hose or any defect in the manner in which the hose had been fitted.
The Tribunal explained why it preferred the expert evidence of Mr Senz over Mr Scott, and accepted Mr Senz's opinion that the damage to the turbocharger was "consistent with the ingress of a foreign material". The Tribunal found that there were no manufacturing faults in regard to the turbocharger and the engine was "otherwise in serviceable condition".
The Tribunal found that the applicant had failed to establish that the respondent had breached any applicable consumer guarantee provision of the ACL.
Additionally, the Tribunal's reasons stated that even if appellant had established liability "as to contravention of the consumer guarantees and the general law" the Tribunal would not have accepted the appellant's case as to quantum, because the Tribunal accepted the respondent's submission that the appellant had not taken reasonable steps to mitigate loss due to not having the turbocharger replaced and the engine repaired, but instead electing to hire a replacement vehicle for over 6 months.
[3]
APPEAL MATERIALS
Both the appellant and Mazda Australia served written submissions in respect of the appeal.
The appellant also filed and served a transcript of the hearing on 10 July 2020.
The appellant and Mazda Australia also provided a copy of the documents that had been relied upon as evidence at the Tribunal hearing.
[4]
GROUNDS OF APPEAL
The appellants grounds of appeal and written submissions, focus upon the decision not being fair and equitable because it was against the weight of evidence. That is not an error of law but raises an error other than an error of law for which leave to appeal is required under Sch 4 Cl. 12 of the Civil and Administrative Tribunal Act 2013 (NSW) ('the NCAT Act').
The grounds of appeal of the appellant also refer to the Tribunal incorrectly applying "the law of causation" (sic).
In his written submissions dated 16 September 2020, the appellant also referred to the Member not considering the "ongoing additional defects and warranty issues since the first day of purchase".
[5]
SCOPE AND NATURE OF APPEALS
Section 80 of the NCAT Act sets out the basis upon which appeals from decisions of the Tribunal may be brought. That section states that an appeal may be made as of right on any question of law or with leave of the Appeal Panel on any other grounds (s 80(2) (b) of the NCAT Act).
[6]
Question of Law
In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 ('Prendergast'), without listing exhaustively possible questions of law, the Appeal Panel considered the requirements for establishing an error of law giving rise to an appeal as of right.
In Prendergast the Appeal Panel also stated at [12] that, in circumstances where an appellant is not legally represented, it is appropriate for the Tribunal to approach the issue by looking at the grounds of appeal generally, and to determine whether a question of law has in fact been raised (subject to any considerations of procedural fairness to the respondent that might arise).
A denial of procedural fairness is an error of law: Prendergast at [13] (4); Italiano v Carbone [2005] NSWCA 177; Clements v Independent Indigenous Advisory Committee [2003] FCAFC 143 at [8]: NCAT Act, ss s 38(2), (5) and (6).
Applying an incorrect legal principle is also an error of law: Prendergast at [13] (3).
[7]
Leave to appeal
Clause 12 of Sch 4 of the NCAT Act provides that, in an appeal from a decision of the Consumer and Commercial Division of the Tribunal, an Appeal Panel may grant leave to appeal only if satisfied that the appellant may have suffered a substantial miscarriage of justice because:
1. the decision of the Tribunal under appeal was not fair and equitable; or
2. the decision of the Tribunal under appeal was against the weight of evidence; or
3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
The principles to be applied by an Appeal Panel in determining whether or not leave to appeal should be granted are well settled. In Collins v Urban [2014] NSWCATAP 17 ('Collins v Urban') the Appeal Panel conducted a review of the relevant cases at [65]-[79] and concluded at 84 that:
Ordinarily it is appropriate to grant leave to appeal only in matters that involve:
(a) Issues of principle;
(b) questions of public importance or matters of administration or policy which might have general application; or
(c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand;
(d) a factual error that was unreasonably arrived at and clearly mistaken; or
(e) the Tribunal having gone about the fact-finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed.
Even if an appellant establishes that it may have suffered a substantial miscarriage of justice in the sense explained above, the Appeal Panel retains a discretion whether to grant leave under s 80(2) of the Act.
The appellant must demonstrate something more than that the Tribunal was arguably wrong: Pholi v Wearne [2014] NSWCATAP 78 at [32]. An appeal hearing is not merely an opportunity for a dissatisfied litigant to "run their case again" (Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10]).
[8]
CONSIDERATION
From the submissions of the appellant, we regard the appeal grounds raised as being:
1. The decision was not fair and equitable because it was against the weight of evidence (a ground requiring leave to appeal);
2. The Tribunal erred by not considering a part of the appellant's claim, being the history of defects and repairs to the vehicle (a purported error of law not requiring leave to appeal); and
3. The Tribunal erred by not applying the correct legal test for causation (a purported error of law not requiring leave to appeal).
[9]
Decision Not Fair And Equitable Because It Was Against the Weight of Evidence
The appellant submits that the decision was not fair and equitable because it was against the weight of evidence. The appellant does not identify any other reason for the decision not being fair and equitable.
The appellant submits that the Tribunal should have accepted the evidence of Mr Scott regarding the cause of the failure of the turbocharger, and that the Tribunal did not give sufficient weight to the other evidence of the appellant, including the reports of Reflex Automotive and All Car Automotive.
For a decision to be against the weight of evidence, the evidence in its totality must preponderate so strongly against the conclusion found by the Tribunal at first instance it can be said the conclusion is not one a reasonable Tribunal Member could reach: Prendergast at [77].
We are not satisfied the evidence in its totality preponderates so strongly against the conclusion found by the Tribunal that it can be said the conclusion is not one a reasonable Tribunal Member could reach.
The Tribunal clearly considered all of the evidence regarding the circumstances in which the turbocharger failed on 13 November 2019. The Tribunal's reasons explained in sufficient detail why the Tribunal accepted the evidence of Mr Senz that the damage to the turbocharger was caused by the entry of a foreign material when driving rather than an inherent manufacturing defect or inadequate previous repairs.
The reasoning process of the Tribunal was logical and coherent. It was open to the Tribunal to accept the expert evidence of Mr Senz over Mr Scott, particularly in circumstances where the Tribunal had the benefit of both experts giving oral evidence at the hearing.
The appellant has failed to establish any substantial miscarriage of justice due to the decision being not fair and equitable; or being against the weight of evidence to satisfy the test set out in Collins v Urban.
[10]
Failure to Consider Part of the Appellant's Claim
We are not satisfied the Tribunal failed to consider part of the appellant's claim. The transcript shows that the appellant and the respondent both made submissions on the history of repairs to the vehicle.
However, it is also clear from the evidence (both documentary and the oral evidence at the hearing) that the focus of the appellant's claim was that the vehicle had a manufacturing fault which was purportedly "common" to Mazda BT-50 vehicles of the inlet hose to the turbocharger becoming detached, and that this was the reason the vehicle was not of acceptable quality in breach of the consumer guarantee provision of s 54 of the ACL.
A series of faults and repairs over a period of time is a matter relevant to whether a motor vehicle is of acceptable quality under the provisions of s 54 of the ACL (Safi v Heartland Motors Pty Ltd t/as Heartland Chrysler [2016] NSWCATAP 80).
However, in this matter it is clear that until the incident on 13 November 2019, all faults had been repaired. The only current issues to which the appellant pointed to in evidence and submissions to the Tribunal other than the turbocharger failure and previous replacement of the motor demonstrating the vehicle was not of acceptable quality were issues with the seats and seatbelts.
In circumstances where the Tribunal found that the turbocharger failure on 13 November 2019 was not caused by any manufacturing defect or inadequate repairs after the motor was replaced in 2018; the age of the vehicle; the kilometres it had travelled; and that it had been free of any defects or repair issues in the period between March 2018 and November 2019, we are not satisfied any error of law is established in the Tribunal's finding that the appellant failed to establish breach of s 54 of the ACL; nor are we satisfied the Tribunal did not consider all of the relevant evidence and submissions of the appellant on that issue.
Further, we are not satisfied the appellant argued before the Tribunal that Mazda Australia was in breach of the contractual warranty provided after replacing the motor in 2018. The appellant was not seeking an order that the vehicle be repaired by Mazda Australia.
Although the appellant did not identify failure to given adequate reasons as a ground of appeal, we have considered this issue in the context of the appellant's submission that the Tribunal did not consider all aspects of his claim. We are satisfied that the written reasons, although economical, comply with the standard for adequacy in NSW Land and Housing Corporation v Orr [2019] NSWCA 231 at [65]-[77].
[11]
Causation
The Tribunal found that the cause of the turbocharger failure on 13 November 2019 was due to ingress of a foreign material whilst driving, rather than a pre-existing manufacturing defect or inadequate previous repairs of the respondents.
That finding was critical as to whether the vehicle was of acceptable quality under s 54 of the ACL (including in the context of whether the replacement motor installed in April 2018 was of acceptable quality) and whether the vehicle was fit for any disclosed purpose or purpose for which the supplier represented the goods were reasonably fit (s 55 of the ACL).
The cause of the damage to the turbocharger on 13 November 2019 was a question of fact to be determined in a practical or common sense way on the basis of the evidence before the Tribunal (Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514 at 525).
As discussed previously, the Tribunal had significant evidence identifying why the turbocharger failed on 13 November 2019. There is nothing to indicate that the Tribunal applied the incorrect legal test to the issue of causation.
[12]
CONCLUSION
The appellant has failed to establish any error of law or error to which leave to appeal should be granted.
[13]
THE ISSUE OF COSTS
In its written submissions, Mazda Australia seeks an order that the appellant pay its costs in a lump sum amount of $4,848.80.
By reason of Reg 38A of the Civil and Administrative Tribunal Rules 2014 (NSW), whether costs of the appeal proceedings are considered on the basis of s 60 (1) and (2) of the NCAT Act or Reg 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) depends on whether there is a realistic prospect the wealth of the appealing party would be changed by more than $30,000 by reason of the outcome of the appeal (Allen v TriCare (Hastings) Pty Ltd [2017] NSWCATAP 25 at [57]; Strata 778 Pty Ltd v Enright (No 2) [2020] NSWCATAP 71 at [16]-[23]).
However, other than an amount of $50 for "taxi costs to deliver documents", the amount sought is in respect of Mazda Australia's costs of the proceedings before the Tribunal, including obtaining the report of Mr Senz and Mr Senz's fee for giving evidence at the hearing on 10 July 2020. Mazda Australia submits that it did not seek costs of the Tribunal proceedings because it "did not expect the appellant to appeal the decision and was prepared to bear the costs at that point".
However, the Appeal Panel only has jurisdiction to deal with the costs of the appeal, in circumstances where there were no costs orders made in the proceedings at first instance. Other than $50, all the costs referred to are costs of the proceedings at first instance.
Considering the miniscule amount of costs identified by Mazda Australia (and there was nothing to indicate the other respondents sought costs in circumstances where Mazda Australia was the dominant respondent) we are not satisfied on the materials before us that any costs orders should be made in favour of the respondents in the appeal proceedings.
Accordingly, there is no order as to costs of the appeal.
[14]
ORDERS
1. Leave to appeal refused.
2. Appeal dismissed.
3. No order as to costs
[15]
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: 28 September 2021