WaxHed Incorporated Pty Ltd v Empire Real Estate Australia Ltd

NCAT Appeal Panel|2018-01-31

Background

The appellant, WaxHed Incorporated Pty Ltd trading as Surf Toyota, sold a second-hand 2010 Audi Q 5 Quattro 4 D Wagon on about 30 September, 2016 to the respondent, Empire Real Estate Australia Ltd for a sale price of $26,250. The sale took place in Tweed Heads, NSW where the appellant's business is located. The respondent's business is located in a Sydney suburb. The respondent borrowed $24,301.80 from Toyota Finance to fund the purchase. When the vehicle was sold it had travelled around 90,000 kilometres.
The respondent's principal, Mr Sahil Sapra said that he noticed shortly after acquiring the vehicle that it seemed to be using a lot of engine oil. He took it to Audi Centre Parramatta which informed him that, after testing, the vehicle was consuming engine oil of 2.49 L per 1000 km, well outside the Audi specification of .50 L per 1000 km for a new vehicle. He made contact with the appellant and arrangements were made for the vehicle to be transported to the Gold Coast for assessment.
A test carried out by Audi Centre Gold Coast showed consumption of .79 L per 1000 km which was also said to be outside the permissible tolerance. The larger consumption noted by Audi Parramatta appears to have resulted from its failure to notice a faulty oil sump plug which was replaced whilst the vehicle was at the Gold Coast.
On 9 February, 2017 the appellant forwarded an email to the respondent stating that it was unable to contact Mr Sapra by telephone to return the vehicle and seeking details of a delivery address. Later that day, Mr Sapra made contact with the appellant stating; "The car is not in driving condition, according to Audi Parramatta, the engine has to be redone, please provide me the proof that you have redone the engine to get the car in normal driving condition. If not so, I am not willing to accept this at any cost because you sold us a faulty car."
The appellant made contact with the previous owner of the vehicle who advised it on 15 March, 2017 that he was initially concerned that the oil needed topping up after travelling about 400 kms. He was told by service personnel at an Audi Service Centre that his vehicle used more oil than other cars. He said; "I got used to the idea of adding a few litres of oil in between services. Never bothered me."

The first hearing

The Application was set down for hearing, seemingly in Tweed Heads on 28 April, 2017. On that occasion the presiding Member of the Tribunal noted that the parties had been in discussion for some time. The Member heard evidence from representatives of both the respondent and the appellant. He noted that the respondent had made contact with Audi Australia which had arranged for the engine of the vehicle to be given a major overhaul at no cost provided that it paid the regular service fee to the local service centre of $1284.65. The cost of the overhaul was $9432.85 and this cost was absorbed by Audi accepting an out of warranty claim. The Member noted that the parties had reached an agreement, seemingly on or around 19 March, 2017 in a telephone conversation after Audi had agreed to carry out repairs to the vehicle. The agreement was for the major overhaul to be undertaken by Audi on the Gold Coast, that the appellant would pay the service fee, and that if the vehicle was ready prior to Easter it would be delivered by the appellant to the respondent, and if not so ready the respondent would pick it up just prior to the hearing.
Information provided by the respondent is to the effect that the repairs were carried out on 12 April, 2017. Mr Sapra was contacted by email by the appellant on 24 April, 2017 and asked to call off the scheduled hearing before this Tribunal on 28 April 2017. He was informed that the repairs could have been carried out earlier if he had pushed Audi Parramatta to have sorted the matter out. The respondent said it was not his business to make contact with Audi Parramatta.
The respondent refused to withdraw the Tribunal proceedings. He informed the appellant that there was a "more severe reason" and that he wanted to wait for the Tribunal hearing "and see what it comes up with." In a further email communication, the respondent complained that the car was no longer registered, that its value would be reduced because its engine had been rebuilt, there had been a mistake by the appellant in detailing the registration number on certain paperwork, and it had continued to make finance payments without the use of the vehicle. In material provided in a Reply document the respondent said that it had concerns that if the vehicle was taken back the same problem might arise again.
Although he had found that there was an agreement between the parties as summarised above, the Member determined that he was unable to enforce that agreement because it was not in writing as required by section 59 of the Civil and Administrative Tribunal Act 2013 ("the Act"). Accordingly, it was necessary for the hearing of the claim to proceed. However, the appellant asserted, and the Member accepted, that it was not ready to proceed with this first hearing, because it was under the impression that the matter had resolved, and it had not prepared any evidence.
The proceedings were adjourned and came on for further hearing (the second hearing) before the Tribunal constituted by a different Member on 30 June and 7 August, 2017. In a decision published on 27 September, 2017 that Member accepted the claim of the respondent and ordered that the appellant pay to it the sum of $27,597.85.
In these appeal proceedings, the appellant challenges the decision of 27 September 2017.

Some additional factual matters

We set out in summary form some additional facts which are not controversial, and with which the parties agreed during the course of the hearing before us;
The respondent purchased a 6 year old motor vehicle in September 2016, which had travelled approximately 90,000 km.
The sole complaint of the respondent was that the vehicle was consuming more oil than it had anticipated. It transpired that the rate of consumption exceeded the manufacturer's specifications for a new vehicle. However, the parties were not in agreement about whether or not the consumption of .79 L per 1000 km was excessive given the age and number of kilometres travelled by the vehicle. We would add that there is no independent evidence about this, although the service manager of the appellant, which is not an Audi service centre, gave evidence before the Member challenging the validity of this complaint.
The vehicle's engine has been rebuilt at no cost to the respondent. The respondent has suffered some inconvenience having been deprived of the use of the vehicle whilst it was being repaired between October 2016 and April 2017. .
The respondent declined to take possession of the vehicle in February 2017 when informed that testing had been carried out on the Gold Coast and that the vehicle was in a satisfactory condition. The respondent continued to decline to take possession of the vehicle in April 2017 when informed that the engine had been rebuilt by Audi.
There is no evidence that the value of the vehicle has been diminished in any way by the fact that it has a rebuilt engine, nor is there any evidence that it is likely that the same problem will re-occur. The respondent could not give any evidence about this as he had refused to take delivery of the vehicle after the repair was affected.
Audi Australia, which is not a party to the proceedings, agreed to rebuild the engine under warranty and provided an itemised invoice stating that approximately $9000 of repairs were undertaken. The appellant expended the sum of $1284.65 of its own monies in order to have the engine rebuild carried out.

The Decision under appeal

In his reasons for decision, the Member referred to the settlement agreement which the appellant asserted had been reached. He said that the finding made by the former Member was "made in the context of an adjournment application which is essentially an interlocutory proceeding and findings in interlocutory proceedings don't generally bind the parties at the final hearing….." The reference to an interlocutory proceeding appears to be irrelevant. The adjournment was granted because the first Member had determined that there was such a settlement agreement, but that it was unenforcible because it was not in writing and did not satisfy the requirements of s 59.
In the decision under appeal the Member noted that the appellant had itself paid the sum of $1284.65 to the Audi service centre where the repairs were carried out, and that the appellant had therefore acted to its detriment based on the agreement which it asserted it had with the respondent. The Member found that there was no agreement, but without stating why, he refused to take into account this detriment suffered by the appellant and refused to consider whether, as a result, the respondent should be estopped from denying the existence of the agreement.
There are no written reasons for the decision given by the former Member concerning his finding that there did exist a settlement agreement as asserted by the appellant. It is clear from the oral recording of the proceedings that the former Member rejected the assertion of Mr Sapra that he did not enter into any such agreement on behalf of the respondent when determining that such an agreement existed. As that agreement is unenforceable for the reasons earlier set out, nothing turns on this.
In his reasons, the Member referred to the oil consumption at the rate of .79 L per 1000 km as being outside of the recommended range. He said at paragraph [7] of his reasons; "It appears the manufacturer took this so seriously that after being informed that the original owner had experienced excessive oil consumption had agreed to an out of warranty repair at a cost of $9432.85."
Significantly, the Member then went on to say "The Tribunal finds that this amounted to a failure to comply with consumer guarantee of acceptable quality. If it was a major failure to comply with that consumer guarantee that the applicant would be entitled to the relief sought."
The Member then went on to quote an extract from a decision of the Appeal Panel of this Tribunal in Safi v Heartland Motors Pty Ltd t/as Heartland Chrysler [2016] NSWCATAP 80 (to which we shall refer in some detail shortly) concerning what matters would be relevant to the question of whether non-compliance with a guarantee of acceptable quality would amount to a "major failure". For present purposes it may be assumed that there is contained within that extract a brief summary of the relevant principles. We shall refer to those principles later in our reasons for decision, but for present purposes we emphasise that the Member was required to determine whether by reason of the condition of the vehicle there had been a "major failure" to comply with the statutory guarantee as to acceptable quality which is contained within section 54 of the Australian Consumer Law.
We now set out the finding of the Member in upholding the claim of the respondent which is to be found in the following paragraph; "9. Applying these principles the Tribunal finds that a reasonable consumer considered on an objective basis would not have acquired the vehicle had they been aware that the vehicle was consuming oil outside the manufacturer's recommended range and apparently had been doing so for some time as it was the previous owner's statement that motivated the manufacturer to authorise an out of warranty repair which the Tribunal notes cost over a third of the purchase price to the applicant."
There is no mention in this reasoning concerning which of the principles were relied upon in making that finding, and the manner in which the several factual matters were applied to the reasoning process and the ultimate finding. There is, for example, no consideration of the nature and extent of the evidentiary matters concerning the extent of the consumption of oil, and why this constituted a "major failure" as opposed to any other type of failure which might nevertheless create a breach of the statutory guarantee. There is no consideration of the nature and extent of any evidence before him about what constituted acceptable and unacceptable oil consumption. There is no reasoning given as to why a reasonable consumer, presumably considered objectively, would not have acquired the vehicle if aware of that level of consumption of oil.

The inadequacy of reasons

It is well-established that members of this Tribunal are required to give adequate and appropriate reasons for any decision. A useful summary of the relevant principles is found in the decision of the Appeal Panel in Safi previously cited. At [68] and following the Tribunal said; The difficulty in assessing whether there has been an error of law by the Tribunal in rejecting Mr and Mrs Safi 's claim is that the Reasons for Decision do not clearly explain the basis on which the Tribunal formed the view that the transmission fault was not a "major failure". Under s 62(3) of the Act, a written statement of reasons must set out the Tribunal's findings on material questions of fact, referring to the evidence on which those findings are based, the Tribunal's understanding of the law and the reasoning process that lead the Tribunal to the conclusions it made. The nature and extent of the obligation to give written reasons under the general law and pursuant to s 62 was also discussed by the Appeal Panel in Collins v Urban [2014] NSWCATAP 17 at [43-64]. Relevantly, the Appeal Panel referred to Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 in which Basten JA observed at [48] as follows: When an appellate court is invited to find that a trial judge provided inadequate reasons, it is important to understand the nature of the function being invoked. It is not the function of an appellate court to set standards as to the optimal, or even desirable, level of detail required to be revealed in reasons for judgment. Rather it is to determine whether the reasons provided have reached a minimum acceptable level to constitute a proper exercise of judicial power. Transparency in decision-making is an important value, but it is not cost free, and may involve separate parameters of quantity and quality. [Emphasis added.] It is not necessary for a decision-maker to make a finding on every fact that may be regarded as objectively material but the decision-maker must set out its findings on those questions of fact which it considered to be material to the decision it made and to the reasons it had for reaching that decision (P v Child Support Registrar [2015] FCA 116 at [77] citing Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; (2001) 206 CLR 323 at [68]). The Tribunal failed to do this. We have therefore identified an error of law by the Tribunal at first instance in failing to provide adequate reasons as to why it rejected Mr and Mrs Safi 's claim on what was a critical issue, being whether the transmission fault was a "major failure" entitling them to reject the Jeep Cherokee Trailhawk. Such an error warrants intervention by the Appeal Panel in this case because the Reasons for Decision, although brief, suggest the Tribunal may have incorrectly applied the test or failed to have regard to relevant evidence. Furthermore, we have formed the view that the material provided by Mr and Mrs Safi , which was not contested by evidence to the contrary by Heartland Chrysler, supported a finding that the transmission failure was a major failure.
We are of the opinion that the paucity of reasoning in these proceedings is such that they do not constitute a proper exercise of the powers and jurisdiction of the Tribunal, and that for this reason alone it is necessary for us to intervene, and for that purpose to uphold the appeal. In these circumstances, it is not necessary that leave to appeal be considered and the appellant is entitled to appeal as of right. The appeal is upheld accordingly.

The further course of the appeal proceedings

However, it will still be necessary to determine the most appropriate manner in which to dispose of these appeal proceedings. There is a wide power available to us under section 81 of the Act which is in the following terms; 81 DETERMINATION OF INTERNAL APPEALS (1) In determining an internal appeal, the Appeal Panel may make such orders as it considers appropriate in light of its decision on the appeal, including (but not limited to) orders that provide for any one or more of the following: (a) the appeal to be allowed or dismissed, (b) the decision under appeal to be confirmed, affirmed or varied, (c) the decision under appeal to be quashed or set aside, (d) the decision under appeal to be quashed or set aside and for another decision to be substituted for it, (e) the whole or any part of the case to be reconsidered by the Tribunal, either with or without further evidence, in accordance with the directions of the Appeal Panel. (2) The Appeal Panel may exercise all the functions that are conferred or imposed by this Act or other legislation on the Tribunal at first instance when confirming, affirming or varying, or making a decision in substitution for, the decision under appeal and may exercise such functions on grounds other than those relied upon at first instance.
One alternative open to us to dispose of the appeal would be to remit it for further hearing before another Member. The parties eschewed any interest in such a procedure. The parties were informed during the course of the hearing that the Appeal Panel would consider the evidence and, if possible on the evidence before it, substitute a decision. Both parties were invited to make submissions on the evidence tendered on appeal.
The proceedings at first instance have already taken place over three days. Whilst the evidentiary material does not contain the precision which one might hope to encounter in proceedings in which the parties were legally represented, we are satisfied that we are in possession of such evidentiary material given before the members who have heard the proceedings and before us during the course of the appeal hearing to enable us to dispose of these proceedings as required by the provisions of the Act, and particularly sections 36 and 38 thereof. 36 GUIDING PRINCIPLE TO BE APPLIED TO PRACTICE AND PROCEDURE (1) The "guiding principle" for this Act and the procedural rules, in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. (2) The Tribunal must seek to give effect to the guiding principle when it: (a) exercises any power given to it by this Act or the procedural rules, or (b) interprets any provision of this Act or the procedural rules. (3) Each of the following persons is under a duty to co-operate with the Tribunal to give effect to the guiding principle and, for that purpose, to participate in the processes of the Tribunal and to comply with directions and orders of the Tribunal: (a) a party to proceedings in the Tribunal, (b) an Australian legal practitioner or other person who is representing a party in proceedings in the Tribunal. (4) In addition, the practice and procedure of the Tribunal should be implemented so as to facilitate the resolution of the issues between the parties in such a way that the cost to the parties and the Tribunal is proportionate to the importance and complexity of the subject-matter of the proceedings. (5) However, nothing in this section requires or permits the Tribunal to exercise any functions that are conferred or imposed on it under enabling legislation in a manner that is inconsistent with the objects or principles for which that legislation provides in relation to the exercise of those functions. 38 PROCEDURE OF TRIBUNAL GENERALLY (1) The Tribunal may determine its own procedure in relation to any matter for which this Act or the procedural rules do not otherwise make provision. (2) The Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice. (3) Despite subsection (2): (a) the Tribunal must observe the rules of evidence in: (i) proceedings in exercise of its enforcement jurisdiction, and (ii) proceedings for the imposition by the Tribunal of a civil penalty in exercise of its general jurisdiction, and (b) section 128 (Privilege in respect of self-incrimination in other proceedings) of the Evidence Act 1995 is taken to apply to evidence given in proceedings in the Tribunal even when the Tribunal is not required to apply the rules of evidence in those proceedings. Note : Section 67 also prevents the compulsory disclosure of certain documents in proceedings in the Tribunal that would, in proceedings before a court, be protected from disclosure by reason of a claim of privilege. (4) The Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms. (5) The Tribunal is to take such measures as are reasonably practicable: (a) to ensure that the parties to the proceedings before it understand the nature of the proceedings, and (b) if requested to do so--to explain to the parties any aspect of the procedure of the Tribunal, or any decision or ruling made by the Tribunal, that relates to the proceedings, and (c) to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings. (6) The Tribunal: (a) is to ensure that all relevant material is disclosed to the Tribunal so as to enable it to determine all of the relevant facts in issue in any proceedings, and (b) may require evidence or argument to be presented orally or in writing, and (c) in the case of a hearing--may require the presentation of the respective cases of the parties before it to be limited to the periods of time that it determines are reasonably necessary for the fair and adequate presentation of the cases.
We emphasise that in disposing of these proceedings we are entitled by reason of the provisions of section 81(2) which we have set out above to deal with the matter as though it were at first instance. We shall now proceed to do so.

The relevant legislative framework

The Appeal Panel in Safi succinctly summarised the relevant legislative provisions which apply to these proceedings. At [15] and following the Appeal Panel said: Section 3 of the ACL (NSW) provides the grounds on which a person is taken to have acquired goods as a "consumer". Relevantly, certain remedies in the ACL (NSW), including those relating to consumer guarantees, are only available to consumers. There was no dispute before the Tribunal at first instance or in the appeal that the Tribunal had jurisdiction to hear this claim under the ACL (NSW). For reasons appearing later, this was in fact a threshold jurisdictional issue that was not addressed before the Tribunal at first instance or raised by the parties in the appeal. Subdivision 2A, Division 1 of Part 3.2 of the ACL (NSW) provides for statutory guarantees in relation to the supply of goods. Relevantly, s 54 provides: 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. Part 5.4 of the ACL (NSW) provides remedies for breach of the statutory guarantees. Section 259(1) of the ACL (NSW) provides that a consumer may take action against a supplier if one of the guarantees that relates to the supply of goods is not complied with. If the failure to comply can be remedied and is not a major failure, the consumer may require the supplier to remedy the failure within a reasonable period (s 259(2)(a)). If the supplier refuses or fails to comply, the consumer may have the failure remedied and recover all reasonable expenses incurred by the consumer in having the failure so remedied or notify the supplier that the goods are rejected (s 259(2)(b)). If the failure to comply with the guarantee cannot be remedied or is a major failure, the consumer may notify the supplier that the consumer rejects the goods or, by action against the supplier, recover compensation for any reduction in the value of the goods below the price paid (s 259(3)). Section 259(4) provides: The consumer may, by action against the supplier, recover damages for any loss or damage suffered by the consumer because of the failure to comply with the guarantee if it was reasonably foreseeable that the consumer would suffer such loss or damage as a result of such a failure. Given the dispute between the parties about whether there was a "major failure" in compliance with the guarantee under s 54, it is convenient to set out s 260, which provides follows: 260 When a failure to comply with a guarantee is a major failure A failure to comply with a guarantee referred to in section 259(1)(b) that applies to a supply of goods is a major failure if: (a) the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or (b) the goods depart in one or more significant respects: (i) if they were supplied by description - from that description; or (ii) if they were supplied by reference to a sample or demonstration model - from that sample or demonstration model; or (c) the goods are substantially unfit for a purpose for which goods of the same kind are commonly supplied and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or (d) the goods are unfit for a disclosed purpose that was made known to: (i) the supplier of the goods; or (ii) a person by whom any prior negotiations or arrangements in relation to the acquisition of the goods were conducted or made; and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or (e) the goods are not of acceptable quality because they are unsafe. If a consumer requires the supplier to remedy a failure to comply with a guarantee, the supplier may repair the goods, replace the goods with goods of an identical type or by provide a refund for the goods (s 261). Section 262(1) provides that a consumer may not reject the goods if the rejection period has ended, the goods are lost, destroyed or disposed of by the consumer, the goods were damaged after delivery for reasons not related to the state or condition of the goods at the time of supply or the goods have been attached to or incorporated into any other personal or real property and cannot be detached without damaging the goods. The "rejection period" is "the period from the time of the supply of the goods to the consumer within which it would be reasonable to expect the relevant failure to comply with a guarantee referred to in section 259(1)(b) to become apparent" having regard to the factors enumerated in s 262(2). Section 263 contains provisions concerning the consequences of a consumer rejecting goods. As already noted, there are two circumstances when a consumer will be entitled to reject goods. The first is where the supplier has refused or failed to remedy the failure in a reasonable period, or at all (see s 259(2)(b)(ii)). The second is where the failure cannot be remedied or is a major failure (see s 259(3)(a)). If goods are rejected the consumer must return the goods to the supplier and the supplier must refund the money to the consumer (s 263(4)(a)) or replace the rejected goods with goods of the same type, if such goods are reasonably available (s 263(4)(b)). Section 263(5) provides: The supplier cannot satisfy subsection (4)(a) by permitting the consumer to acquire goods from the supplier. As noted in the Explanatory Memorandum at [785], this section provides that: If the consumer chooses a refund after rejecting goods, the supplier is specifically precluded from providing replacement goods to satisfy the requirement of a refund.
It will be seen that in most cases a consideration of the rights of a consumer who has acquired goods in breach of the statutory guarantees focuses attention on the right to require that repairs be affected. The exception that applies relates to a major failure as defined in section 260 of the Consumer Law. The only provision dealing with a major failure which is arguably relevant is that which is contained in (a).
Whilst minds might differ whether a reasonable consumer might have acquired the vehicle knowing that, realistically, the oil consumption was .79 L per 1000 km, any exercise of a value judgment in so considering it must take into account whether the purchase price represented good value, whether realistically topping up the engine oil at shorter intervals might be seen to be an inconvenience, whether any such inconvenience might be something that a person could expect to encounter with a vehicle of that age and having travelled those kilometres, and the prospects of having any repairs carried out either at no cost or at a particular cost. As we have noted, the Member found that the provisions of subparagraph (a) applied, but gave no reasons for so finding.
We are not satisfied that, in all the circumstances, and on the balance of probabilities that this vehicle would not have been acquired by a reasonable purchaser fully acquainted with the nature and extent of the oil consumption. Certainly, there is no evidentiary basis for such a conclusion contained in the material before us. Whilst this Tribunal is not bound by the rules of evidence and is entitled to inform itself in any manner which it deems appropriate, it cannot be appropriate to form any opinion concerning the adequacy or inadequacy of the oil consumption of the vehicle which is the subject of these proceedings on the basis of the evidence available to the Member. It is true that there is a document which indicates that the oil consumption level, presumably as at February 2017 was .79 L per 1000 km, which appears to have been issued by Audi Centre, Gold Coast and which contains the words "Consumption is outside the permissible tolerance."
However, there is no indication as to whether the permissible tolerance referred to is that which applies to a new vehicle or would apply to a vehicle of the age and in the condition of the respondent's vehicle. Furthermore, that document was signed by an assistant service manager. There is no indication that that person was qualified to make that assessment by reason of qualifications as an automotive mechanic or engineer. Accordingly, there is no relevant evidence at all concerning the nature and extent of the oil consumption. That is, there was nothing upon which the opinion of a reasonable purchaser could be based. It follows that no determination is possible that there was a major failure in breach of the statutory guarantee.
Furthermore, there are additional compelling reasons why the respondent's claim against the appellant must fail. These are based on the provisions of sections 36 and 38 of the Act which we have previously set out. In essence, this is a case where a rebuilt "as new" engine has been installed in a second hand car in order to fix an oil leak, at no cost to the purchaser other than some unquantified inconvenience, but at some cost and inconvenience to the seller. It is just in all the circumstances, and in accordance with equity, good conscience and the substantial merits of the case that the purchaser be kept to its bargain as found by the previous Member during the course of the first hearing and with which we agree, having regard to the evidentiary material before us.

The disposal of the proceedings

Mr Sapra was adamant during the course of the hearing before us that there were no circumstances in which he would take back the motor vehicle. He was not interested in doing so in February 2017 when he had been advised that the consumption of oil was .79 L per 1000 km, nor was he so interested in April 2017 notwithstanding that he had been advised the engine of the vehicle had been rebuilt by Audi. He declined to take delivery, and he was not interested in ascertaining whether the vehicle functioned adequately and appropriately.
There can be no doubt that as at April 2017 the respondent was not justified in any way in declining to take delivery of the vehicle because of its concerns that the engine would not function properly or that in some way, unjustified in any manner, the value of the vehicle had diminished. The Appeal Panel invited submissions from Mr Sapra about these matters during the course of the appeal hearing but he was unable to submit why he declined to take delivery of the vehicle. In his written reply to the appeal, he explained that the oil consumption is still "outside permissible levels". The appellant relied on a document dated 9 February 2017, which measured a consumption of 2.49 L per 1000 km. It was pointed out to the appellant that this pre-dated the Audi repair in April 2017. The appellant made no further submissions.
The Appeal Panel, in allowing the appeal, may determine the proceedings. The Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice. (s38 ibid).
On 28 November, 2017 a Deputy President constituting the Appeal Panel refused the application of the appellant for a stay. It is common ground between the parties that the moneys payable under the order under appeal, namely $27,597.85 have now been paid by the appellant to the respondent. Prima facie, if the appeal is to succeed this order should be reversed and the respondent ordered to repay those monies.
However, it is clear from the factual matters which we have set out above that the respondent did not have use of the vehicle after it was returned to the appellant in October 2006 and has not had use of the vehicle thereafter because it has refused to take delivery of it. The respondent submits it has suffered a loss of $7000, for interest payments incurred and for hire car fees. No evidence was tendered below or on appeal to substantiate a claim for hire car fees. Indeed Mr Sapra submitted to the Appeal Panel that he bought a new luxury vehicle. There is some force in the submission of the respondent that it was deprived of the use of the vehicle, at least during the period when the vehicle was consuming oil at the rate of .79 L per 1000 km. However, as we have previously stated, there could be no such justification after April 2017 when the engine had been rebuilt and the respondent refused to take possession of the vehicle. To this extent we consider it just and equitable that the respondent has established a loss and that some compensation should be allowed to the respondent for the fact that it had been deprived of the use of the vehicle over these months, until the problem had been ostensibly completely rectified.
Mr Sapra informed us that until he had purchased another vehicle in about April or May 2017 he did not have a car, and used his wife's car. During this period, he hired a car for approximately 20 days. Mr Sapra tendered no evidence of hire car fees either at the first two hearings, or on appeal. During the course of submissions by the parties Mr Hall, on behalf of the appellant accepted that a sum of $3000 would represent appropriate compensation to the respondent for having been deprived of the use of the vehicle, arguably until April 2017.
We have no means available to us to quantify in a detailed manner the amount of any compensation which might properly be allowable to the respondent, and to undertake this course would involve further delay, and cost and inconvenience to the parties. Having regard to all of the evidence we are of the opinion that it is appropriate that some allowance be given by the appellant to the respondent for the deprivation of the use of the vehicle as we have described it, and we would assess that amount in the sum of $3000.
It follows that consequent upon the appeal being allowed there should be an order that the respondent pay to the appellant the net sum of $24,597.85 after making allowance for the sum of $3000 by way of compensation. Upon payment of that amount the appellant should be ordered to return the vehicle to the respondent at the cost of the appellant. We propose to make orders accordingly.

Orders

We make the following orders: 1. The appeal is allowed. 2. The order made by the Tribunal that the appellant pay the respondent the sum of $27,597.85 is quashed. 3. The respondent is to pay the appellant the sum of $24,597.85 within 14 days of this date and is to notify the appellant of an address for delivery of the vehicle within 14 days of this date. 4. Conditional upon and within 14 days of receipt of the sum of $24,597.85, the appellant is, at its cost, to have the vehicle transported to the respondent at the delivery address provided by it.

I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar

Amendments 22 February 2018 - [28] - Section number amended from '82(2)' to '81(2)' 22 February 2018 - Former para [7] now Heading: 'The First Hearing': all subsequent paragraphs automatically renumbered. 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: 22 February 2018

At a glance

Court

Decision date

Source

Judgment (12 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (6)