Aloe v LSH Auto (Sydney) Pty Ltd

[2023] NSWCATCD 174

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Aloe v LSH Auto (Sydney) Pty Ltd & Anor [2023] NSWCATCD 174

Hearing dates:

02 August 2023

Date of orders:

20 October 2023

Decision date:

20 October 2023

Jurisdiction:

Consumer and Commercial Division

Before:

B Koch, General Member

Decision:

The application is dismissed.

Catchwords:

CONSUMER LAW-Consumer guarantees-Supply of goods-Guarantee relating to supply by sample or demonstration model

Legislation Cited:

Australian Consumer Law (NSW)

Fair Trading Act 1987 (NSW)

Cases Cited:

Blatch v Archer (1774) 1 Cowp 63

Bui v Australia Investing Pty Ltd [2018] VCAT 95

Nguyen v Cosmopolitan Homes [2008] NSWCA 246

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Maria Aloe (Applicant)
LSH Auto (Sydney) Pty Ltd (First Respondent)
Mercedes-Benz Australia/Pacific Pty Ltd (Second Respondent)

Representation:

Mr and Ms Aloe (Applicant)
Ms Butler (First Respondent)
Mr Appleton (Second Respondent)

File Number(s):

MV 23/17899

Publication restriction:

Nil

REASONS FOR DECISION

1. These proceedings concern a Mercedes-Benz motor vehicle the applicant (Mrs Aloe) purchased from the second respondent (Mercedes-Benz) at a dealership operated by the first respondent (LSH) in March 2022.

2. The crux of the dispute is that when the vehicle was delivered to Mrs Aloe in May 2022, the vehicle was not fitted with electrical adjustable seats with memory function. Relevantly, the demonstration model that Mrs Aloe test drove before entering into a contract to purchase the vehicle from Mercedes-Benz did have electrically adjustable seats with memory function. There is no allegation that, other than the absence of electrically adjustable seats with memory function, the vehicle was not of acceptable quality or otherwise defective.

3. Mrs Aloe framed her case by reference to the guarantee relating to the supply of good by sample or demonstration model in s 57 of the Australian Consumer Law (NSW) (ACL). Indeed, her evidence included a copy of a website published by NSW Fair Trading with the substance of the guarantee in s 57 highlighted. Mrs Aloe seeks an order that the respondents either instal electric seats in the vehicle provided or supply an equivalent vehicle with electric seats.

4. At the hearing on 2 August 2023, Mrs Aloe represented herself together with her husband (Mr Aloe). Each gave evidence and Mrs Aloe relied upon a folder of documents filed and served on 29 May 2023. LSH was represented by Ms Butler who gave evidence and relied upon a statement of a Mr William Lee filed and served on 16 June 2023. Mercedes-Benz was represented by Mr Appleton who gave evidence and relied upon a folder of documents filed on 13 June 2023.

5. No issue was raised as to the jurisdiction of the Tribunal to hear and determine the claim. The Tribunal finds that the claim is a “consumer claim” as defined in s 79E of the Fair Trading Act 1987 (NSW) (FTA). Mrs Aloe was a consumer an the respondents were suppliers and the claim arises from the supply of goods to a consumer under a contract made in New South Wales. The application was made within time (see s 79L(1)(a) of the FTA).

Facts

6. There are some relevant facts that are not in dispute.

7. Mr and Mrs Aloe have purchased a number of new Mercedes-Benz motor vehicles over the course of at least the last 15 years.

8. In about early March 2022, Mrs Aloe and Mr Aloe attended the dealership operated by LSH and expressed interest in purchasing new Mercedes-Benz motor vehicles, being a GLC 300 4MATIC (GLC 300) and a GLA 200 SUV (GLA 200) as replacements for their existing vehicles. Mr William Lee, a sales executive employed by LSH discussed the matter with Mr and Mrs Aloe and a test drive of each vehicle took place that day.

9. Relevantly, there was no dispute by LSH or Mercedes-Benz at the hearing of the assertion by Mr and Mrs Aloe that the demonstrator model of the GLA 200 that was test driven in early March 2022 had electric seats and memory package. Further, there were other differences between the demonstrator model and the GLA 200 as delivered to Mrs Aloe to which Mercedes-Benz drew attention in evidence and submissions including:

1. Head-up display;

2. Surround view system;

3. Sound system premium;

4. Wireless phone charging in front;

5. Night package; and

6. Augmented reality video.

10. Further, Mr and Mrs Aloe agreed at the hearing with Mr Lee’s evidence that on the day of the test drive, there was no discussion of electric or memory seats.

11. On 19 March 2022, Mrs Aloe entered into a contract with Mercedes-Benz (GLA 200 Contract) to purchase a new GLA 200 for a total purchase price of $70,740.45 with an estimated delivery date of 20 May 2022.

12. Mrs Aloe purchased the GLA 200 at the dealership operated by LSH, but the Contract for the purchase of the GLA 200 was between Ms Aloe as customer and Mercedes-Benz as dealer.

13. The GLA 200 Contract identified that the “Equipment” to be supplied as a part of the GLA 200 included “DSC Seat Comfort Package … $548.00”. The GLA 200 Contract also identified that “7U4 Sports seats” and “873 Heated front seats” would be supplied as “Factory Options” at no cost.

14. Also on 19 March 2022, Mr Aloe entered into a contract with Mercedes-Benz (GLC 300 Contract) to purchase a new GLC 300 for a total purchase price of $104,525.92 with an estimated delivery date of 31 March 2022.

15. The GLC 300 Contract identified that “241 Power front left seat with memory function” and “275 Driver’s seat, electrically adjustable with memory function” would be supplied as “Factory Options” at no cost.

16. On 26 March 2022, Mercedes-Benz issued an invoice to Mr Aloe regarding the GLC 300 and on or about that date Mr Aloe took delivery of the GLC 300. For the avoidance of doubt, no issue is taken in these proceedings regarding the purchase of the GLC 300.

17. On 12 May 2022, Mercedes-Benz issued a tax invoice to Mrs Aloe regarding the GLA 200. There is a minor dispute on the evidence as to whether Mrs Aloe took delivery of the GLA 200 on 6 May 2022 (according to Mr Lee’s evidence) or 19 May 2022 (according to the evidence of Mr and Mrs Aloe). The objective evidence of the tax invoice supports the evidence of Mr and Mrs Aloe that delivery took place later than stated by Mr Lee. The Tribunal finds that delivery took place on or after 12 May 2022. There is no dispute that the GLA 200 delivered to Mrs Aloe does not have electric and memory seats.

18. Following some correspondence with LSH and Mercedes-Benz, Mr and Mrs Aloe raised the issue of the electric and memory seats with NSW Fair Trading on 6 August 2022. Following correspondence between the parties and NSW Fair Trading, Mrs Aloe lodged the present application on 18 April 2023.

19. Having established those matters, the Tribunal turns to the more contentious matters directly related to the absence of electric and memory seats in the GLA 200.

Electric and Memory Seats

20. There appear to be three broad factual matters that require resolution, being:

1. What was or was not communicated to between Mr Lee and Mr and Mrs Aloe in relation to the demonstration model provision of electric and memory seats in early March 2022 when Mr and Mrs Aloe test drove a GLA 200?

2. What was communicated to Mr and Mrs Aloe regarding the specifications of the GLA 200 at or about the time Mrs Aloe executed the GLA 200 Contract on 19 March 2022?

3. Of less import in the determination of the claim, whether the issue of electric and memory seats was raised as between Mr and Mrs Aloe and Mr Lee when Mrs Aloe took delivery of the GLA 200 in May 2022?

21. The Tribunal will set out below the competing evidence relevant to those matters prior to making findings as to each matter.

22. Mr Lee provided a statement (although he was not present at the Tribunal or subject to cross-examination). That statement is a useful starting point:

Back to early March year 2022. Peter and his wife Maria came to the dealership interest in buying GLC 300 wagon and GLA 200. We went to test drive both car.

They were very happy both cars performance and comfort. I remembered clearly there wasn't any questions raised for electric & memory seat.

Then few days later Peter returned to the dealership by himself. I pull up GLC 300 and GLA 200 on STS computer screen and went through all specs with Peter.

He was happy then we did a deal for both cars. On 31st of March 2022 Peter came in pick up the GLC 300 and Maria picked up GLA 200 on 6th of May 2022.

I went through all features and control with Maria that time and again no questions was raised for electric & memory seat.

(sic)

23. By an email sent to LSH on 25 July 2022, Mr Aloe gave an account of events on the day of the test drive:

One car was in stock the other you were receiving in three months, so I SPECIFICALLY asked the salesman if I could see and test drive the exact car that I would receive

I did that and it had the Seat Comfort Package Fully Electrical front seats with memory function. The car that was delivered to me did not include the Seat Comfort Package.

My Contract and Invoice show Seat Comfort Package to be included. Not with standing (sic) that I specifically asked to see and test drive the car I was supposed to receive.

24. The substance of Mr Aloe’s account that he “SPECIFICALLY asked the salesman if I could see and test drive the exact car that I would receive” is substantially replicated in a letter Mrs Aloe sent to LSH (copied to Mercedes-Benz) on 30 July 2022.

25. In evidence at hearing, Mr Aloe phrased the request he made to Mr Lee slightly differently: “I want to test drive the car you are ordering”.

26. In its response to Mrs Aloe’s complaint to NSW Fair Trading, Mercedes-Benz stated:

We understand that at the time of entering into the Contract, Mrs Aloe was informed that electric seats were not presently available as part of the DSC Package and this is also evidenced by their omission under the line belonging to the “Seat Comfort Package” “DSC” code of the … Options Brochure. For the avoidance of doubt, the line items available under the DSC Package in the Options Brochure detail the Heated Front Seats and Drivers Lumbar Support were the only two items included in the DSC Seat Comfort Package for the GLA 200 at that time, which was valued at $548 (excluding GST and LCT).

27. In response to that statement, Mrs Aloe sent a letter to Mercedes-Benz on 27 March 2023 in the following terms:

This statement is incorrect and/or misleading principally because:

• The relevant Mercedes sales rep ABSOLUTELY did not advise me or my husband that electric seats were not then available as a part of the DSC Package at that time;

• That sales rep also did not mention that the vehicle I was going to receive was different from that which I inspected and test drove; and

• The sales rep did not refer to or provide me with any DSC brochure or any other document at all indicating that electric seats were not included.

28. In a letter to Mrs Aloe dated 14 April 2023, Mercedes-Benz reiterated its position that Mrs Aloe was “informed that electric seats did not form part of the DSC package” and went on:

…the contract you signed does not include electric seats in the Factory Options line items, and the space for inclusion of special conditions and verbal representations or undertakings do not contain any reference to the Vehicle containing the same features as the demonstration model, or that electric seats would be included. The Vehicle supplied to you is in accordance with the specifications in the contract that you agreed to.

29. The correspondence from Mercedes-Benz referred to above would appear to be consistent with Mr Lee’s statement that he went through all the specifications of each of the GLA 200 and the GLC 300 at or about the time each of the contracts were entered into. Each of Mr and Mrs Aloe gave evidence that Mr Lee did not go through the specifications of each vehicle with them, relied on an assertion that there were at least 84 potential line items for the GLA 200 and 90 for the GLC 300.

30. The “Options Brochure” to which Mercedes-Benz referred in its letter to NSW Fair Trading was put in evidence by Mercedes-Benz, being the “GLA Specification Guide Australia January 2022” (Options Brochure). The Tribunal notes that for an abundance of caution, Mercedes-Benz also put in evidence the version of the Options Brochure dated 19 November 2021. The only difference between those two documents related to AM radio and is immaterial for present purposes.

31. Page 3 of the Options Brochure stated that the interior features of the GLA 200 included “Seat Comfort Package with Manual Adjustment (U59)”. Page 9 of the Options Brochure set out “Option Packages”, including the “Seat Comfort Package” code “DSC”. It is noted that “Heated front seats (873)” and “Driver’s lumbar support (U22)” were “Optional at cost” for the GLA 200. Nowhere in the Options Brochure was it stated that electric or memory seats were available for the GLA 200.

32. It was Mr and Mrs Aloes’ evidence that they were not provided with a copy of the Options Brochure by Mr Lee or otherwise by the respondents. That oral evidence was consistent with an email from Mr Aloe to Mercedes-Benz sent on 4 May 2023. There was no real challenge to that evidence. Evidence was given for Mercedes-Benz (which was not disputed) that the Options Brochure was freely available on the internet at all relevant times. Mr Aloe gave evidence that Mr Lee never told him to go and look at the Options Brochure on the website.

33. It is plain on the documentary and oral evidence adduced by Mercedes-Benz that electric seats were not available as an option for the GLA 200 from at least August 2021.

34. Mrs Aloe put in evidence several other Mercedes-Benz publications about the “Seat Comfort Package”. It was unclear as to what period those documents related (save that some at least appeared to relate to 2021, prior to the relevant time) and there was no evidence that Mrs Aloe or Mr Aloe had any regard to the documents in coming to a decision to purchase the GLA 200.

35. As set out at [22] above, Mr Lee’s evidence is that the question of electric and memory seats was not raised at the time Mrs Aloe took delivery of the GLA 200 in May 2022. In his email to Mercedes-Benz sent on 4 May 2023, Mr Aloe stated:

On delivery when my wife sat in the car the first question she asked William where are the electric seats the look on his face was priceless. His reply was Mercedes overseas have run out of parts, Your wife is the only driver how often will you need to move it.

(sic)

36. There is no dispute that, whatever passed between Mr Lee on the one hand and Mr and Mrs Aloe on the other hand in May 2022, Mrs Aloe did in fact take delivery of the GLA 200 even though the vehicle did not include electric and memory seats. When questioned about this, Mr Aloe referenced the wisdom of “hindsight” and stated that in circumstances where he and Mrs Aloe had already paid for the GLA 200 and traded in their previous vehicle, he was worried that he would have to agitate the issue without the benefit of a vehicle and thought it was preferable to “take it” even though “it was not right” and bring it back in the future.

Findings of Disputed Fact

37. As is apparent from the above recitation of the evidence adduced by each party, there are directly conflicting accounts of what passed between Mr Lee and Mr and Mrs Aloe in the course of purchasing the GLA 200.

38. A difficulty for the Tribunal is that the evidence of the respondents in relation to these issues was limited to the brief and conclusory statement of Mr Lee set out above. Unlike Mr and Mrs Aloe, Mr Lee was not before the Tribunal such that the Tribunal was unable to assess his credit as it was Mr and Mrs Aloe.

39. Regard must be had to the often-repeated observation of Lord Mansfield in Blatch v Archer (1774) 1 Cowp 63 at 65 that “all evidence is to be weighed according to the proof which is in the power of one side to have produced, and in the power of the other to have contradicted”. However, it must be recalled that the onus of establishing her claim rests with Mrs Aloe. The applicant is obliged to establish his claim on the civil standard, that is on the balance of probabilities. The relevant principles in relation to discharging the burden of proof in civil cases were summarised by McDougall J (with whom McColl and Bell JJA agreed) in the Court of Appeal in Nguyen v Cosmopolitan Homes [2008] NSWCA 246 at [55] as follows:

(1) A finding that a fact exists (or existed) requires that the evidence induce, in the mind of the fact-finder, an actual persuasion that the fact does (or at the relevant time did) exist;

(2) where on the whole of the evidence such a feeling of actual persuasion is induced, so that the fact-finder finds that the probabilities of the fact’s

existence are greater than the possibilities of its non-existence, the burden of proof on the balance of probabilities may be satisfied;

(3) where circumstantial evidence is relied upon, it is not in general necessary that all reasonable hypotheses consistent with the non-existence of a fact, or inconsistent with its existence, be excluded before the fact can be found; and

(4) a rational choice between competing hypotheses, informed by a sense of actual persuasion in favour of the choice made, will support a finding, on the balance of probabilities, as to the existence of the fact in issue.

40. Save for the matter identified at [41(3)] below, the matters raised by Mr and Mrs Aloe cannot be said to have come as a surprise to the respondents at the hearing. They were all foreshadowed in correspondence from Mr and Mrs Aloe prior to the proceedings being commenced and, in some cases, going back to July 2022.

41. With those matters in mind, the Tribunal makes the following findings of fact in relation to the disputed matters:

1. When Mr and Mrs Aloe attended the dealership of LSH in early March 2022, Mr Aloe said to Mr Lee words to the effect of “I want to test drive the car you are ordering”.

2. During that attendance, there was no discussion as between Mr Lee and Mr and Mrs Aloe regarding electric and memory seats for the GLA 200.

3. The question of whether Mr or Mrs Aloe were taken through the specifications for what would be included in the GLA 200 (and if so, what they were told) is more difficult. There are relatively few matters set out under the heading “Equipment” at pages 3 and 4 of the GLA 200 Contract. It is not, as Mr and Mrs Aloe submitted, a matter of going through 80 or 90 line items. It strains credulity to assert that Mr Lee did not at least identify to Mr and Mrs Aloe the matters set out there, particularly those matters under the heading “Local Packages” for which Mrs Aloe was paying an extra amount, including the $548 for “DSC Comfort Package”. It further strains credulity that Mr and Mrs Aloe, by their own evidence experienced purchasers of new motor vehicles did not identify what was and was not included in the “Local Packages” for which Mrs Aloe was paying some $4,712 on top of the base price. Further, rather than fortifying her claim (as she submitted in her letter to Mercedes-Benz dated 27 March 2023), the fact that the GLC 300 did have electric seats with memory function undermines her claim. The language of the GLC 300 Contract and the GLA 200 Contract are entirely different. It ought to have been plain to Mr and Mrs Aloe upon review of these relatively short document that the GLC 300 included features that were not included in the GLA 200, namely “241 Power front left seat with memory function” and “275 Driver’s seat, electrically adjustable with memory function”. The Tribunal is not satisfied that Mr and Mrs Aloe were not informed of the specifications of the GLA 200.

4. The Tribunal finds that Mr and Mrs Aloe raised the question of electric seats with Mr Lee upon taking delivery of the GLA 200 (but nevertheless took delivery of the vehicle).

Mrs Aloe’s Claim

42. As set out above, Mrs Aloe framed her claim by reference to the consumer guarantee in s 57 of the ACL.

42. For the avoidance of doubt, the Tribunal has considered whether Mrs Aloe has a claim under s 56 of the ACL which concerns a statutory guarantee that the goods supplied correspond with the description provided. The Tribunal accepts the submission of the respondents that the GLA 200 corresponds with the vehicle described in the GLA 200 Contract. As Mr Appleton put it at the hearing, the vehicle ordered was the vehicle received. There is no arguable breach of that consumer guarantee and no contrary submission was put by or on behalf of Mrs Aloe.

43. Likewise, Mrs Aloe’s correspondence to NSW Fair Trading included a complaint that “the vehicle delivered to me does not have fully electric seats with memory function …as specified in the ‘seat comfort package’ contained in the relevant contract”. Mrs Aloe did not press a case based on breach of contract, which forensic decision the Tribunal considers was correct given the matters set out above. Again, the vehicle ordered was the vehicle received.

44. Section 57 of the ACL is in the following terms:

(1) If:

(a) a person supplies, in trade or commerce, goods to a consumer by reference to a sample or demonstration model; and

(b) the supply does not occur by way of sale by auction;

there is a guarantee that:

(c) the goods correspond with the sample or demonstration model in quality, state or condition; and

(d) if the goods are supplied by reference to a sample—the consumer will have a reasonable opportunity to compare the goods with the sample; and

(e) the goods are free from any defect that:

(i) would not be apparent on reasonable examination of the sample or demonstration model; and

(ii) would cause the goods not to be of acceptable quality.

(2) If goods are supplied by reference to a sample or demonstration model as well as by description, the guarantees in section 56and in this section both apply.

46. The guarantee at s 57(1)(c) is relevant to the present proceedings. Regard must be had to the use of the word “correspond”. That word was considered in Bui v Australia Investing Pty Ltd [2018] VCAT 95 at [210]:

The section does not require the supplier to guarantee that the goods will be “exactly” the same as the sample or demonstration model in quality, state or condition, as the Applicants contend. The requirement is to “correspond”, which in my view is more akin to a standard of reasonable similarity or equivalence to the sample or demonstration model.

Determination

47. The evidence adduced by Mercedes-Benz and general human experience establish that a demonstrator for a new vehicle is unlikely to exactly match the car that a purchaser will purchase. Indeed, Mr and Mrs Aloe sought to deploy for their own purposes the fact that there were a litany of specifications which a purchaser of a GLA 200 or a GLC 300 can choose from.

48. It is plain on the evidence that the demonstrator that Mrs Aloe did test drive in early March 2022 included many specifications that were not included in the GLA 200 of which Mrs Aloe took delivery. The consumer guarantee did not impose an obligation on the respondents to provide Mrs Aloe with a vehicle exactly matching that demonstrator. The argument that such an obligation was imposed involves a misreading of the statutory language requiring that the goods “correspond” and the ignoring of the fact that there was an intermediate step between test driving the demonstrator and entering into the GLA 200 Contract: that is, the selection of the options and specifications for the GLA 200.

49. Given the findings of fact made above, the Tribunal is satisfied that Mr and Mrs Aloe engaged in that process and agreed to order the GLA 200 with the “Equipment” set out in the GLA 200 Contract. There was no breach of the guarantee in s 57 of the ACL.

50. For those reasons, the Tribunal will dismiss the application.

**********

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

Decision last updated: 09 August 2024