Diesel Engine Rebuilding Australia v Petersen - [2014] QCATA 186

CITATION:

Diesel Engine Rebuilding Australia v Petersen [2014] QCATA 186

PARTIES:	Diesel Engine Rebuilding Australia (Applicant/Appellant)
v
Adam Petersen (trading as Bobcat Bob) (Respondent)

APPLICATION NUMBER:

APL181-14

MATTER TYPE:

Appeals

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Dr J R Forbes, Member

DELIVERED ON:

21 July 2014

DELIVERED AT:

Brisbane

ORDERS MADE:

The application for leave to appeal is refused.

CATCHWORDS:

APPLICATION FOR LEAVE TO APPEAL – MINOR CIVIL DISPUTE – CONSUMER DISPUTE – where sale of reconditioned goods – whether goods of acceptable quality within meaning of Australian Consumer Law – whether goods fit for disclosed purpose – where refund of purchase price ordered – whether applicant shows arguable appellable error – application refused

Australian Consumer Law (Cth), s 2, s 3, s 24, s 25, s 54, s 55, s 259, s 276

Fair Trading Act 1989 (Qld), s 16

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 32, s 61, s 142, s 226

Australian Competition and Consumer Commission v Glendale Chemical Products Pty Ltd (1998) 40 IPR 619; [1998] FCA 180
Clark v NZI Life Ltd [1991] 2 Qd R 11
Fox v Percy (2003) 214 CLR 118
Fulcher & Ors v Knott Investments Pty Ltd & Ors [2012] QSC 232
Minister for Immigration and Citizenship v SZMDS & Another (2010) 240 CLR 61
Robinson v Corr [2011] QCATA 302
Sheldon v Sun Alliance Ltd (1989) 53 SASR 97
Snell v Morgan [2011] QCATA 316
Thompson and Anor v Jedanhay Pty Ltd [2012] QCATA 246
Thorneton Avenue Pty Ltd v Body Corporate for the Avenues [2013] QCAT 173
W (an infant) In Re [1971] AC 682
Secretary of State for Education and Science v Tameside Metropolitan Borough Council [1977] AC 1014

APPEARANCES and REPRESENTATION (if any):

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).

REASONS FOR DECISION

The applicant/appellant (“Diesel”) is a registered firm trading as a motor rebuilder at Nerang, Queensland.
The respondent (“Bobcat”) is an excavation and earthmoving contractor, carrying on business at Weston, near Kurri Kurri, New South Wales.
In or about April 2013 Bobcat purchased from Diesel a reconditioned replacement motor for the price of $13,000 (including GST). It was to be an unsatisfactory transaction, from Bobcat’s point of view.
Proceedings to date
On 11 September 2013 Bobcat commenced these proceedings as a minor civil (consumer) dispute, alleging that the subject engine was defective, and claiming a total of $20,552.60, including the cost of purchase, transport costs, installation costs, an expert’s fee, accommodation, and filing fee.
In particular, Bobcat claimed that the engine supplied by Diesel leaked oil, and that a crack in the block caused water or coolant to contaminate the oil supply. In an attempt to remedy these defects, Bobcat removed the engine, returned it to Diesel at Weston, and then took it back to Nerang, refitted it, and removed it again, at considerable expense.[1]
[1]As detailed in schedule…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2014] QCATA 186
Decision Date: 21 July 2014

CaseChat Overview and Summary

In the matter of Diesel Engine Rebuilding Australia v Petersen, the Federal Circuit Court was asked to consider an application for leave to appeal a decision made by the Queensland Civil and Administrative Tribunal (QCAT). The underlying dispute involves a consumer claim for a refund of the purchase price of a reconditioned engine, on the basis that the engine was not of acceptable quality and was not fit for the disclosed purpose under the Australian Consumer Law. The primary decision awarded Bobcat a partial refund, and Diesel sought to appeal this decision.

The legal issues before the court were whether the Adjudicator made arguable errors in law that warranted an appeal. The primary issue was whether the Adjudicator erred in reducing the award based on a suspicion that Bobcat may have contributed to the failure of a final resolution, despite finding the engine to be of unacceptable quality and unfit for the disclosed purpose. The court also needed to determine if the Adjudicator's finding on the issue of mitigation was correct, and whether the onus of proof lay with Diesel or Bobcat.

The court found that the Adjudicator did not make an arguable error in law. The court held that it was not contradictory for the Adjudicator to find that Bobcat was entitled to a refund but also to reduce the award due to a suspicion that Bobcat may have contributed to the failure of a final resolution. The court held that suspicion is not proof, and that the onus of proof on the issue of mitigation lay with Diesel, not Bobcat. Since Bobcat did not cross-appeal, the court did not need to delve further into this matter.

The court refused the application for leave to appeal, as Diesel had not demonstrated an arguable error in law. The orders of the court were that the application for leave to appeal be refused.

Orders

Orders of the court

The application for leave to appeal is refused.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

An application by Diesel for a stay of proceedings was refused on 30 May 2014.The primary decision As noted above, Bobcat sought $20,552.60 in all, but the award was $6,538 less than the claim. The Adjudicator explained that ‘the diminution of the recovery [was] reflected in disallowing the other separate elements of the claim’.[2][2]Reasons for Decision 28 March 2014 [12]. The rationale for this ‘diminution’ is as follows: The limited evidence available raises some doubt or suspicion that [Bobcat], may have contributed directly or indirectly to the failure of a final resolution ... from [sic] what might have happened to the engine while it was in the possession of [Bobcat]. That suspicion is enough to diminish any successful outcome for [Bobcat].[3][3]Ibid [10]. On the point of “contribution” the Adjudicator noted, without explicitly accepting, Diesel’s submission that Bobcat – ... failed to supply the radiator to connect to the engine for testing, and failed to supply evidence that of the subject radiator having been flushed/cleaned or replaced. The required items had been used by [Bobcat] in another truck.[4][4]Ibid [9]. On 14 April 2014 Diesel filed this application for leave to appeal.[5] The grounds of the proposed appeal are not stated succinctly in Part C of Form 39, as is required. However, I shall do my best to distil them from an attached document, comprising 2 pages of small print.[6] (Another copy of that document has been filed as Diesel’s submissions on appeal.)[5]As required by QCAT Act s 142(3)(a)(i).[6]Document on letterhead of Diesel, signed by “Anthony Floyd, Workshop Manager”.Grounds of appeal Ground 1: The Adjudicator appears to have made two [contradictory] decisions ... In paragraph [10] [he] states: “The limited evidence available raises some doubt or suspicion that [Bobcat] ... may have contributed to the failure of a final resolution.” [But] in paragraph [12] [he] states “On balance [Bobcat] is entitled to a refund of ... $13,000 ... on the basis that ... the engine was not ... of acceptable quality and was not fit for the purpose”. ... The fact that [the Adjudicator] ... indicates that [Bobcat] has caused enough suspicion to diminish any successful outcome appears to us that he also agrees that [Bobcat] has not complied with the warranty conditions. It is not contradictory for a court to find a defendant liable, and at the same time to hold that the claimant has not done enough to minimise (“mitigate”) the amount of his loss. That is the case here. The Adjudicator accepted Bobcat’s evidence of a faulty engine block, but reduced the claim on the ‘suspicion’ that Bobcat ‘may have contributed directly or indirectly to the failure of a final resolution’. In this regard Diesel seems fortunate, for even when the civil standard of proof applies (as here) it can hardly be said that suspicion amounts to proof, according to the evidence, on the balance of probabilities. On an issue of failure to mitigate, the onus of proof was upon Diesel, not Bobcat.[7] However, as Bobcat has not cross-appealed, this matter need not be taken further.[7]Clark v NZI Life Ltd [1991] 2 Qd R 11; Sheldon v Sun Alliance Ltd (1989) 53 SASR 97.

Ratio Decidendi

Legal Principle Established

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