Elkhishin and Minister for Infrastructure, Transport, Regional Development and Local Government

[2009] AATA 261

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 261

ADMINISTRATIVE APPEALS TRIBUNAL      )

)         No. 2008/3502

GENERAL  ADMINISTRATIVE  DIVISION		)
Re		MUHAMMAD ELKHISHIN

Applicant

And MINISTER FOR INFRASTRUCTURE, TRANSPORT, REGIONAL DEVELOPMENT AND LOCAL GOVERNMENT

Respondent

DECISION

Tribunal G. D. Friedman, Senior Member

Date21 April 2009

PlaceMelbourne

Decision The Tribunal affirms the decision under review.

(sgd) G.D. Friedman

Senior Member

TRANSPORT – motor vehicle regulations – import of used car – corrosion – whether structural integrity of vehicle reduced by perforation, flaking or pitting of the metal.

Motor Vehicle Standards Act 1989 s 13D

Motor Vehicle Standards (Approval to Place Used Import Plates) Guidelines 2006 (No. 1) clause 4 of Schedule 1

Motor Vehicle Standards (Procedures for Inspecting and Testing Used Imported Vehicles) Determination 2002  subclause 6(3)

REASONS FOR DECISION

21 April 2009   G. D. Friedman, Senior Member

1.      Muhammad Elkhishin purchased a 1996 Mitsubishi RVR motor vehicle in Japan.  On 6 November 2006 a delegate of the respondent approved its importation into Australia.  However, on 18 October 2007 the delegate decided to refuse approval for a used import plate to be placed on the vehicle on the basis that the structural integrity of the vehicle has been reduced by corrosion to the left rear under body stiffening chassis rail (which supports and reinforces the floor) and rear seat mounting (which supports and anchors the seat).  On 7 July 2008 the delegate affirmed the decision.

LEGISLATIVE SCHEME

2. Section 13D(1) of the Motor Vehicle Standards Act 1989 states:

The Minister may, by writing, grant a registered automotive workshop an approval to place a plate on a used imported vehicle if, having regard to a report in relation to the vehicle that is given to the Minister by the workshop, the Minister is satisfied that it is appropriate to grant the approval.

Section 13D(3) of the Act states that the Minister must comply with the guidelines when making a decision to grant a Registered Automotive Workshop (RAW) an approval to place a used import plate on a used imported vehicle. The Motor Vehicle Standards (Approval to Place Used Import Plates) Guidelines 2006 (No. 1) are the relevant guidelines in this matter.  Subclause 4(1) of Schedule 1 to the Guidelines provides that a used imported vehicle must not have had its structural integrity reduced by crash damage or corrosion.

3.        Subclause 4(2) of Schedule 1 to the Guidelines states that a RAW must provide to the Minister, on request, evidence of an inspection performed in accordance with s 6 of the Motor Vehicle Standards (Procedures for Inspecting and Testing Used Imported Vehicles) Determination 2002 to assess the vehicle for structural damage or corrosion.  Subclause 6(3) of the Determination states that:

The vehicle inspection signatory must have regard to the following minimum criteria in determining if crash damage or corrosion is likely to affect the structural integrity of a vehicle:

…

(f)corrosion evidenced by perforation, flaking or pitting of the metal;

ISSUE

4.        There was no dispute between the parties, and the Tribunal finds, that there is corrosion on the vehicle and that the corrosion is to a structural component of the vehicle.  Therefore the only issue before the Tribunal is whether the structural integrity of the vehicle has been reduced by corrosion evidenced by perforation, flaking or pitting of the metal.  Perforation is degradation of the metal to such an extent that there is a hole in the metal; flaking is a growth on a piece of metal and pitting is the residue from the removal of the flaking.  The issue for determination involves consideration of:

·whether there has been perforation, flaking or pitting of the metal; If so,

·whether this has led to a reduction in the structural integrity of the vehicle.

HAS THERE BEEN PERFORATION, FLAKING OR PITTING OF THE METAL?

5.        Mr Elkhishin told the Tribunal that he imported the vehicle as a gift for his parents, and that on purchase the vehicle was in near-new condition.  The odometer reading was about 25,000 kilometres.  He said that he accepted that there was superficial surface corrosion to the vehicle but there was no evidence of perforation, flaking or pitting of the metal.  Mr Elkhishin said that he had carried out research and referred to the Standard Guide for Examination and Evaluation of Pitting Corrosion published by the American Society for Testing and Materials (Designation: G 46-94 (Reapproved 1999)), which states that although a visual examination of the corroded material under examination is usually beneficial, it seldom provides an accurate indication of corrosion beneath the surface.  Mr Elkhishin noted that the Guide describes various methods of using precision tools and instruments to identify and examine pitting of metals, and stated that a visual inspection, or the use of basic automotive tools, are inadequate in determining whether perforation, flaking or pitting are present in used motor vehicles.  Under cross-examination he conceded that he has no qualifications or experience in this field.

6.        In a witness statement dated 6 March 2009 Mr G Fearon, a senior vehicle examiner with the Department of Infrastructure, Transport, Regional Development and Local Government, said that he has had more than 30 years’ experience in the automotive industry as a motor mechanic, workshop foreman, dealership service manager and technical support manager.  He said on average he inspects about 100 vehicles each year as part of the compliance process.  Mr Fearon stated that on 4 April 2007 with Mr D Morton (a technical officer with the Department) he attended the workshop where the vehicle was located and observed that the level of corrosion had resulted in perforation, flaking or pitting of the metal to the rear seat mounting and associated bolts and the left hand chassis rail.

7.        Mr Fearon said his findings were confirmed by examination of photographs taken by Mr S Lilley, a policy officer and motor vehicle standards inspector with the Department, during an inspection of the vehicle on 1 August 2007.  He said that the photographs show that, even after the affected areas of the vehicle were cleaned and scrubbed with a wire brush, the corrosion had resulted in pitting and flaking of the base material.  Under cross-examination Mr Fearon stated that, in general, visual inspection, together with the use of basic tools if required, is sufficient for an experienced examiner to identify perforation, flaking or pitting, and that precision or specialist tools are not necessary.

8.        In an affidavit dated 9 April 2009 Mr Morton stated that he has had 19 years’ experience as a motor mechanic and supervisor of staff involved in diagnosing faults on motor vehicles and assessing the workmanship on new and used vehicles.  He said that on 4 April 2007 he inspected the Mitsubishi RVR and observed a high level of corrosion to the underside of the vehicle.  He said that perforation, flaking and pitting of the metal to the rear seat mounting and the left hand chassis rail were evident.

9.        In an affidavit dated 10 March 2009 Mr Lilley stated that he has had more than 20 years’ experience in the automotive industry as an automotive technician, collision repair estimator and automotive technical consultant.  He said that on 1 August 2007 he inspected the Mitsubishi RVR and that it was clear to him that the vehicle contained corrosion resulting in pitting and flaking of the metal despite repairs that were conducted before his visit.   He said that photographs that he took during the visit confirmed his findings.

10.      In a report dated 15 February 2008 prepared at Mr Elkhishin’s request, Mr A Enkelman, the principal of A. Enkelman & Associates, Consulting Engineers, stated that the vehicle was examined…to establish the structural integrity of the floor pan, chassis and suspension attachment points.  The report found evidence of some surface rust on various spots on the floor pan, and observed that the rust is very minor, as it has not actually penetrated the metal to any extent.  The report did not include any mention of corrosion or of perforation, flaking or pitting of the metal.

11.      In a draft report Certification Test and Vehicle Examination for Serviceability dated 6 February 2009 prepared at Mr Elkhishin’s request, Mr R Pyke and Mr B Wight, of Bisitecniks Pty Ltd, a company involved in vehicle design, certification and accreditation, stated that the vehicle was examined visually, and the subfloor structure and suspension in particular were examined.  The report included photographs of the affected areas and found that superficial rusting was observed at several sites and was spread randomly over the subfloor area.  In the description of Photo 5 the report states: Most extreme case of structural component rusting – attack has not caused major thickness reduction.  However the report did not include any mention of corrosion or of perforation, flaking or pitting of the metal.

12.      In reaching a finding the Tribunal accepts the evidence from Mr Fearon, who has had long experience in the automotive industry, including vehicle inspections.  Similarly Mr Morton and Mr Lilley are experienced vehicle examiners and their evidence was consistent with Mr Fearon’s assessment of the vehicle.  The Tribunal is satisfied that the examination of the vehicle by the three officers was conducted in accordance with the relevant legislative requirements, and used the prescribed criteria.  The photographs were consistent with visual inspection of the metal parts on the vehicle.  The Tribunal also accepts Mr Fearon’s evidence that visual examination of a vehicle, together with the use of basic tools if required, is sufficient for an experienced examiner to identify perforation, flaking or pitting of the metal, and that precision or specialist tools are not necessary.

13.      The wording in both Mr Enkelman’s report and the Bisitecniks report is vague and refers to minor surface rust and superficial rusting.  Neither report mentions whether perforation, flaking or pitting is present or whether these matters and corrosion were to be addressed when Mr Elkhishin requested the reports.  Although the Tribunal accepts that the authors of the reports are qualified in their field, the conclusions in both reports are superficial, and the Tribunal places little reliance on them.

14.      For these reasons the Tribunal finds that perforation, flaking or pitting of the metal are present in the vehicle.

HAVE PERFORATION, FLAKING OR PITTING OF THE METAL LED TO A REDUCTION IN THE STRUCTURAL INTEGRITY OF THE VEHICLE?

15.      Mr Elkhishin maintained that the corrosion did not affect the structural integrity of the vehicle.

16.      In a witness statement dated 12 March 2009 Mr M Terrell, section leader, Registered Automotive Workshop Scheme, Vehicle Safety Standards with the Department, said that the test applied in the case of a used imported vehicle is not whether the vehicle is safe, but whether the vehicle is the same structurally as when it was supplied to the market overseas.  He stated that where any material has been removed or weakened by corrosion (typically evidenced by pitting or flaking of the metal), the affected component cannot be presumed to be the same as when manufactured.

17.      Mr Fearon stated that the perforation, pitting or flaking to the relevant areas of the vehicle means that the structural integrity of the vehicle has been affected and the vehicle is not suitable to be approved for a used import plate.  Mr Morton stated in his affidavit that, after his inspection of the vehicle and an examination of the photographs taken by Mr Lilley, he was satisfied that the level of corrosion was such that the structural integrity of the vehicle had been compromised.

18.      Mr Enkelman concluded in his report that as the surface rust has not penetrated the metal to any extent, the vehicle’s structure has not been compromised.  The authors of the Bisitecniks report concluded that they did not regard the rusting as reducing the strength or serviceability of the vehicle.

19.      The Tribunal accepts the evidence from Mr Terrell, Mr Fearon, Mr Morton and Mr Lilley about the effect of corrosion on the structural integrity of the vehicle.  The reports by Mr Enkelman and Bisitecniks are brief and do not make reference to the legislative guidelines for vehicle compliance standards.  The reports do not describe the testing procedures or equipment used in the examinations.  The photographs provided in the Bisitecniks report are of poor quality.  For these reasons the Tribunal finds that corrosion evidenced by perforation, flaking or pitting of the metal has reduced the structural integrity of the vehicle.

DECISION

20.      The Tribunal affirms the decision under review.

I certify that the twenty [20] preceding paragraphs are a true copy of the reasons for the decision of:

G.D. Friedman, Senior Member

(sgd) Mara Putnis

Associate

Date of hearing:  16 April 2009

Date of decision:  21 April 2009

Advocate for the applicant:  Self-represented

Counsel for the respondent:  Mr M Palfrey
Solicitor for the respondent:  Clayton Utz Lawyers