Derek James Walsh v Neil Pollard Car Sales Pty Ltd
[2014] NSWCATCD 53
•22 April 2014
Civil and Administrative Tribunal
New South Wales
Case Title: Derek James Walsh v Neil Pollard Car Sales Pty Ltd Medium Neutral Citation: [2014] NSWCATCD 53 Decision Date: 22 April 2014 Before: G Bassett, General Member Decision: On or before 8 May 2014 the respondent is to pay the applicant the sum of $8,115.00.
Catchwords: Warranty, Form 4, encumbrance, title, misleading, deceptive, acceptable quality Legislation Cited: Consumer Claims Act 1998 (NSW)
s 28 Fair Trading Act 1987(NSW)
Schedule 2 Competition and Consumer Act 2010 (Cth)
s 24 Motor Dealers Act 1974 (NSW)Cases Cited: Flaxman v Sydney 4X4 Pty Ltd (Motor Vehicle) [2013] NSWCTTT 62
Rand v Homebush Automobiles Pty Ltd (Motor Vehicle) [2013] NSWCTTT 79
Principal JudgmentCategory: Principal judgment Parties: Derek James Walsh, Applicant self-represented
Neil Pollard for Neil Pollard Car Sales Pty LtdFile Number(s): MV 13/66781
REASONS FOR DECISION
APPLICATION
The application was lodged on 23 December 2013.
The applicant sought orders for the respondent to pay him $14,450.00. In his reasons for requesting the order the applicant stated:
"The car was sold to me and found to be written off vehicle and not to be replaced or registered. The car cannot be driven by law."
On 5 February 2014 the matter was adjourned for hearing and the usual procedural directions made in relation to documents to be relied on at hearing.
JURISDICTION
The Tribunal has jurisdiction to determine the matter pursuant to the Consumer Claims Act 1998 (NSW). The transaction occurred in the last 3 years and the amount sought is less than the Tribunal's monetary limit of $30,000.00.
The Australian Consumer Law is imported into the law of New South Wales by virtue of s 28 of the Fair Trading Act 1987 (NSW). The Australian Consumer Law provides consumers with guarantees regarding the provision of goods and services set out in Schedule 2 of the Competition and Consumer Act 2010.
EVIDENCE OF THE APPLICANT
The applicant relied on the following documents:
(a)written statement dated 20 January 2014;
(b)Form 4;
(c)receipt of respondent for $14,450.00 dated 23 December 2011;
(d)Notice of Disposal;
(e)usage records of NSW Roads and Maritime Services indicating registered usage types of vehicle;
(f)Vehicle History Report of NSW Roads and Maritime Services.
The REVS vehicle enquiry check carried out by the respondent was dated 22 August 211. It's stated that there are "no encumbrances that match the quoted identifiers". That form specifically stated it was not a REVS certificate and would not provide legal protection from repossession. It advised obtaining a full REVS certificate before purchasing the vehicle. NO such form was put into evidence.
The Personal Property Securities Register ("PSPR") report obtained by the applicant on 27 February 2014 stated the registration of the vehicle expired on 22 June 2014. The vehicle was categorised as "Written Off: Collision, QLD, Apr 2004, Economic Repairable Write-off".
The NSW Roads and Maritime Services Vehicle History Report obtained on 22 December 2013 indicated:
"The vehicle has been recorded as a statutory write-off. This vehicle can only be used for spare parts, and cannot be repaired and re-registered in NSW or anywhere else in Australia."
The applicant said he tried to sell the vehicle in December 2013. It was then he became aware it had been written off in 2004. No one would purchase the vehicle and he said his only option was to sell it for spare parts. He received $2,000.00 for the vehicle.
EVIDENCE OF THE RESPONDENT
The respondent relied on:
(a)written statement undated;
(b)REVS Vehicle Enquiry Results form;
(c)PSPR car history.
Mr Pollard said he purchased the car in good faith after having done a REVS check in 2001. The PSPR reports were a new system introduced from January 2012. He said this system picked up issues not indicated on a REVS check. As a result the Form 4 provided by the respondent was not marked with the vehicle having been a write-off in the past. When the applicant suggested his copy of the Form 4 was not marked as the vehicle not being listed as a write-off the respondent said the applicant's copy of the Form 4 was a carbon copy and the marking had not come through.
THE RELEVANT LAW
Australian Consumer Law guarantees in relation to the quality of goods supplied is as follows:
54 Guarantee as to acceptable quality
(1) If:
(a) a person supplies, in trade or commerce, goods to a consumer; and
(b) the supply does not occur by way of sale by auction;
there is a guarantee that the goods are of acceptable quality.
(2) Goods are of acceptable quality if they are as:
(a) fit for all the purposes for which goods of that kind are commonly supplied; and
(b) acceptable in appearance and finish; and
(c) free from defects; and(d) safe; and
(e) durable;
as a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods), would regard as acceptable having regard to the matters in subsection (3).
(3) The matters for the purposes of subsection (2) are:
(a) the nature of the goods; and
(b) the price of the goods (if relevant); and
(c) any statements made about the goods on any packaging or label on the goods; and
(d) any representation made about the goods by the supplier or manufacturer of the goods; and
(e) any other relevant circumstances relating to the supply of the goods.
(4) If:
(a) goods supplied to a consumer are not of acceptable quality; and
(b) the only reason or reasons why they are not of acceptable quality were specifically drawn to the consumer's attention before the consumer agreed to the supply;
the goods are taken to be of acceptable quality.
(5) If:
(a) goods are displayed for sale or hire; and
(b) the goods would not be of acceptable quality if they were supplied to a consumer;
the reason or reasons why they are not of acceptable quality are taken, for the purposes of subsection (4), to have been specifically drawn to a consumer's attention if those reasons were disclosed on a written notice that was displayed with the goods and that was transparent.
(6) Goods do not fail to be of acceptable quality if:
(a) the consumer to whom they are supplied causes them to become of unacceptable quality, or fails to take reasonable steps to prevent them from becoming of unacceptable quality; and
(b) they are damaged by abnormal use.
(7) Goods do not fail to be of acceptable quality if:
(a) the consumer acquiring the goods examines them before the consumer agrees to the supply of the goods; and
(b) the examination ought reasonably to have revealed that the goods were not of acceptable quality.Section 24 of the Motor Dealers Act 1974 NSW also sets out obligations in respect of dealers' notices to a consumer:
Dealers' notices in respect of sale of second-hand motor vehicles, second-hand motor cycles and damaged new motor vehicles
24 Dealers' notices in respect of sale of second-hand motor vehicles, second-hand motor cycles and damaged new motor vehicles
(1) This section does not apply to or in relation to:
(a) the offering or displaying for sale, or sale, of an exempted motor vehicle,
(b) the offering or displaying for sale, or sale, of a motor vehicle:(i) by bona fide auction,
(ii) to an exempted person, or
(iii) to a trade owner, or
(c) the offering or displaying for sale, or sale, of a substantially demolished or substantially dismantled motor vehicle by a vehicle-wrecker.
(2) Where a dealer offers or displays for sale a second-hand motor vehicle (not being a second-hand motor cycle or demonstrator motor vehicle), the dealer shall attach, or cause to be attached, to the vehicle, in the prescribed manner, a notice, in the prescribed form, containing the prescribed particulars in relation to the vehicle.
(3) A dealer shall not sell a second-hand motor vehicle (not being a second-hand motor cycle or demonstrator motor vehicle) unless, at or before the time of sale, the dealer and the purchaser sign the notice attached to the vehicle pursuant to subsection (2), or a copy of that notice, and the dealer delivers the notice or the copy, as the case may be, to the purchaser for retention by the purchaser.
(4) In any proceedings against a dealer for failing to comply with the requirements of subsection (2), it shall be presumed, in the absence of proof to the contrary, that a second-hand motor vehicle (not being a second-hand motor cycle or demonstrator motor vehicle) found at a place of business in respect of which a dealer's licence is granted is offered or displayed for sale unless:
(a) the vehicle has attached to it, in the prescribed manner, a notice, in the prescribed form, specifying that the vehicle is not for sale, and
(b) the vehicle does not have any other notice attached to it, or any marking on it, that purports to be the price of the vehicle or that suggests that the vehicle is being offered or displayed for sale.
(5) A dealer shall not sell a second-hand motor cycle unless, at or before the time of sale, the dealer and the purchaser sign a notice, in the prescribed form, containing the prescribed particulars in relation to the motor cycle and the dealer delivers the notice to the purchaser for retention by the purchaser.
(6) A dealer shall not sell a demonstrator motor vehicle unless, at or before the time of sale, the dealer and the purchaser sign a notice, in the prescribed form, containing the prescribed particulars in relation to the vehicle and the dealer delivers the notice to the purchaser for retention by the purchaser.
(7) Where any prescribed damage is done to a motor vehicle (not being a second-hand motor vehicle) and a dealer is aware, or on a reasonable inspection of the vehicle would have been aware, of the damage, the dealer shall not sell the vehicle, whether or not the damage has been repaired, unless, at or before the time of sale, the dealer and the purchaser sign a notice, in the prescribed form, containing the prescribed particulars in relation to the damage to the vehicle and the dealer delivers the notice to the purchaser for retention by the purchaser.
(8) A notice shall not be treated for the purposes of subsection (2), (5), (6), or (7) as containing the prescribed particulars if any of the prescribed particulars contained in the notice is false or misleading in a material particular.
(9) Where the sale of a motor vehicle is effected by a person acting as the agent or employee of a dealer, compliance by that agent or employee with the requirements imposed on the dealer by subsection (3), (5), (6) or (7), as the case may require, shall be treated as compliance by the dealer with those requirements.
(10) Where the holder of a dealer's licence offers or displays for sale, or sells, a motor vehicle on behalf of another dealer, this section does not apply to the other dealer.
(11) Where:
(a) a person carrying on (whether in partnership or otherwise) the business of a dealer does not comply with any requirement imposed on the person by subsection (2), (3), (5), (6) or (7), the person is guilty of an offence, or
(b) a person carrying on in partnership (whether under a joint licence or otherwise) the business of a dealer does not comply with any requirement imposed on the person by subsection (2), (3), (5), (6) or (7), each of the person's partners is guilty of an offence.
(12) In proceedings for an offence under subsection (11), it is a defence if the accused person proves that the motor vehicle concerned was offered or displayed for sale, or sold, as the case may be, to an auto-dismantler or motor vehicle parts reconstructor for the purpose of being demolished or dismantled.Section 26 sets out defences in relation to notices:
26 Defences
In proceedings for an offence under section 24 it is a defence if:
(a) in the case of the omission of any prescribed particular from a notice referred to in that section, the accused person proves that the motor vehicle concerned was brought into New South Wales for the purpose of resale and that the prescribed particular omitted was unknown to the person and could not, with reasonable diligence, be ascertained by the person, or
(b) in the case of the inclusion in any such notice of a prescribed particular that is false or misleading in a material particular, the accused person proves that the accused person took all reasonable steps to ascertain the true particulars and that those included were, to the best of the person's knowledge and belief, true.The is also an Australian Consumer Guarantee that a supplier will not engage in false or misleading conduct:
18 Misleading or deceptive conduct
(1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
FACTS
The respondent was not able to provide evidence that he had completed a full REVS check of the vehicle when he purchased it. It is unknown whether such a check would have shown that the vehicle had been designated as a repairable write-off in Queensland. The Form 4 relied on was equivocal as to whether Mr Pollard had struck out the section indicating it was a repairable write-off. I am satisfied on the balance of probabilities that Mr Pollard would not have made the applicant aware of the history of the vehicle prior to the sale, most probably because he was not aware of it himself. He had not relied on interstate searches prior to the sale. The PPSR system highlighted the limitations of the state REVS searches and the fact the vehicle was unregistrable and not to be used for spare parts.
Despite that limitation in title, the applicant had had full use of the vehicle for almost 2 years after he purchased it. He provided no evidence of the value of the vehicle when he sold it on becoming aware of the limitation on title over than the $2,000.00 he received. Mr Pollard provided no evidence of the value of the vehicle as at the time it was sold other than to opine that such vehicles depreciate a further 25% each year after they are purchased.
I am satisfied that the applicant would not have purchased the vehicle if he had been made aware of its history. While I think that Mr Pollard did not know of the history of the vehicle at the time of sale, and did not deliberately mislead the applicant, under the law it matters not whether a party intends to mislead or deceive another. What matters is whether the consumer was misled or not. The applicant was misled.
APPLICATION OF THE LAW
In Rand v Homebush Automobiles Pty Ltd (Motor Vehicle) [2013] NSWCTTT 79 (15 February 2013) a party purchased a vehicle with no statutory warrant where the Form 8 notice stated:
"THE VEHICLE IS NOT LISTED ON REVS AS BEING, OR EVER HAVING BEEN, A WRITTEN OFF OR WRECKED MOTOR VEHICLE ."
In that matter a PPSR check revealed the vehicle had been involved in a collision in South Australia and was an economic repairable write-off.
The applicants claimed that they would not have purchased the vehicle if they had known that it was a write-off due to the impact on the value of the vehicle.
Finding that the consumer had been misled, the member said from [17]:
"17. However, the respondent did not advise the applicants that the vehicle was not from NSW and therefore could have been listed as a repairable write-off on the database of another state agency. While the respondent did not tell the applicants that the vehicle was not listed as a repairable write-off other than on REVS, it failed to disclose to the applicants a relevant piece of information that it knew or should have known; that is, that the vehicle was not from NSW.
18. In some limited circumstances, silence may constitute misleading conduct. In this case, the provenance of the vehicle was within the respondent's knowledge. Moreover, the respondent knew that the lack of a listing of the vehicle on REVS did not mean that the vehicle was not listed elsewhere as a repairable write-off. The respondent, as an experienced motor dealer, had knowledge of what a listing on REVS actually meant in a way that a casual purchaser of a vehicle such as the applicants would not. The Tribunal concludes that the respondent's silence on the issue of the vehicle's origin in South Australia was conduct which was likely to mislead the applicants. The Tribunal accepts that the respondent did not intend to mislead the applicants. However, it is not necessary to establish that there was any such intention. The test is whether the conduct was in fact likely to mislead or deceive, not whether the respondent intended it to do so.
19. The Tribunal finds that the respondent had an obligation in addition to its statutory obligation as a motor dealer. That obligation was not to engage in conduct that was likely to mislead or deceive the applicants. The Tribunal finds that the respondent's failure to notify the applicants that the vehicle was from South Australia and that a REVS check would therefore not disclose an encumbrance in that State was conduct likely to mislead or deceive the applicants. The Tribunal does not find that the respondent had any obligation to undertake a check with the equivalent authority in South Australia. However, it did have an obligation to tell the applicants that the vehicle was not from NSW, so that they could do their own checks prior to purchasing the vehicle."
In Flaxman v Sydney 4X4 Pty Ltd (Motor Vehicle) [2013] NSWCTTT 623 (10 December 2013), the Tribunal found that the Form 4 was altered after the sale was concluded so as to delete the words "IS NOT" from the clause relating to the fact that the vehicle was listed on REVS as being, or having been, a written off vehicle. It also found the failure of the dealer to bring to the applicant's attention that the vehicle was a repaired write off was misleading and deceptive
CONCLUSION
Given that the dealer had no evidence showing he had carried out a full REVS check when he purchased the vehicle it is more probable than not he was unaware of the full history of the vehicle. For a very experienced dealer this lapse caused him to mislead the consumer even if he did not intend to do so. The dealer's Form 4 was equivocal and is not evidence that would constitute a defence under s 26 of the Motor Dealers Act so that the dealer could rely on a claim that he had carried out reasonable diligence in performing searches on the vehicle. The vehicle supplied was not of acceptable quality as it could not be resold for the fair market value of an unencumbered vehicle.
The evidence shows the vehicle could not be registered and was to be used for spare parts. There was no evidence to suggest it was worth an more than the $2,000.00 the applicant received for it. However, the real loss of the applicant is what he would have acquired as a purchase price when he sold it in 2013 if the PPSR had not indicated the encumbrance. Mr Pollard claimed vehicles depreciate at a rate of 25% per year once outside the tax schedule for depreciation. There was no suggestion the vehicle was not in a good condition when sold. I do not accept the 25% claimed per annum but find the vehicle would have depreciated up to 30% in the two years the applicant had possession and use of it. His loss then is the purchase price, less 30% and less $2,000.00 he was paid for the vehicle.
G Bassett
General Member
Civil and Administrative Tribunal of New South Wales22 April 2014
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
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