Integrity Car Care ACN 056 621 893 v Godber - [2023] ACAT 23

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

INTEGRITY CAR CARE ACN 056 621 893 v GODBER [2023] ACAT 23

AA 2/2022 (XD 55/2021)

Catchwords: APPEAL – civil dispute – claim for replacement of a defective part (cooling fan relay) under a motor vehicle warranty – claim originally denied by appellant warranty administrator on the grounds defective part not a component of a part (cooling fan) covered under the warranty – consideration of coverage under the Warranty – appeal against original tribunal’s finding the limitation to parts “specifically listed” under the warranty was not transparent, pursuant to the Australian Consumer Law (the ACL) and therefore void – appeal against finding of liability under the ACL –appeal against alleged denial of procedural fairness – consideration of ‘unfair’ and ‘transparent’ as defined in the ACL –original tribunal erred by finding liability under the ACL – original tribunal denied procedural fairness –defective part found to be a component of “specifically listed” part (cooling fan) and therefore covered under the warranty – appeal dismissed

Legislation cited: ACT Civil and Administrative Tribunal Act 2008 ss 16, 17, 22
Australian Consumer Law ss 23, 24, 25

Cases cited:Godber v Integrity Car Care ACN 056 621 893 [2022] ACAT 11

Tribunal:Presidential Member G McCarthy
Date of Orders:  28 April 2023
Date of Reasons for Decision:         28 April 2023
AUSTRALIAN CAPITAL TERRITORY          )
CIVIL & ADMINISTRATIVE TRIBUNAL     )          AA 2/2022
BETWEEN:
INTEGRITY CAR CARE ACN 056 621 893
Appellant

AND:

BRETT GODBER
Respondent

APPEAL TRIBUNAL: Presidential Member G McCarthy
DATE:28 April 2023

ORDER

Appeal dismissed.
The appellant pay the respondent $415.42 before 1 June 2023.

………………………………..
Presidential Member G McCarthy

REASONS FOR DECISION

This appeal concerns the liability of the appellant, Integrity Car Care Pty Ltd, to pay for repairs under a warranty provided with the purchase of a car. I begin with a brief outline of the facts giving rise to the claim.
On 29 June 2020, the respondent, Mr Godber, purchased a Ford Fiesta motor vehicle (the vehicle) from Indypendynt Pty Ltd trading as ACT Motor Traders for $6,500.[1] In the original proceeding, the appellant stated the respondent also “purchased” an Endurance Warranty – Plan A[2] – Comprehensive for 12 months (the Warranty) as part of the purchase of the car.[3] At the appeal hearing, the respondent said he paid $200 for the Warranty.
[1] Attachment A to appellant’s response in the original proceeding dated 28 July 2021
[2] Plan A is applicable to “any vehicle regardless of age and distance travelled”
[3] Appellant’s response in the original proceeding dated 28 July 2021
Soon after purchasing the car, the respondent found the battery was going flat overnight. On or about 13 July 2020, he took the car to CWC Automotive Services (CWC) to rectify the fault.
On or about 14 July 2020, CWC investigated and rectified the fault. It provided the respondent with a tax invoice dated 14 July 2020 in which it described the work done as follows:
Investigate cause for battery going flat over night. Found radiator fan remaining on despite A/C off, ignition off, coolant temperature below startup threshold. Investigated A/C and coolant temperature management systems including control modules, A/C compressor clutch assembly, relays, fuses and wiring. Upon removing A/C compressor clutch and coolant temperature fan control relays, symptoms ceased. Likely one or both relays are intermittently staying closed. Replaced relays, cleared Diagnostic Trouble Codes and tested. All working as designed.[4]
[4] Attachment B, page 1/3 to appellant’s response in the original proceeding dated 28 July 2021
CWC charged $165 for labour, $142.65 for parts being a scan tool charge ($45.45) and two relays ($48.60 each), plus GST, to a total of $338.42.
On 15 July 2020, the respondent made a claim under the Warranty for $338.42 by way of reimbursement of the money he paid CWC for the repairs.
The appellant denied the claim “as a relay is not covered under this particular warranty”.[5] The appellant also denied the labour component of CWC’s tax invoice, contending:
This warranty is a parts specific warranty, meaning only the parts listed [in the Warranty] are covered.[6]
[5] Appellant’s response in the original proceeding dated 28 July 2021
[6] Appellant’s response in the original proceeding dated 28 July 2021
The respondent did not agree with the appellant’s denial of his claim and made an application to the Tribunal for an order that the appellant pay him $440 arising from CWC’s tax invoice plus the Tribunal filing fee of $77 to a total of $517.
The original tribunal heard the respondent’s claim. At the hearing, although the dispute was about whether the respondent’s claim was covered under the Warranty, the original tribunal took the parties to sections 23 and 24 of the Australian Consumer Law (the ACL) which relate to consumer contracts that are standard form contracts and terms of such contracts that are “unfair”, as defined in section 24 of the ACL. Sections 23 and 24 of the ACL state:
23 Unfair terms of consumer contracts and small business contracts
(1)A term of a consumer contract or small business contract is void if:
(a)the term is unfair; and
(b)the contract is a standard form contract.
(2)The contract continues to bind the parties if it is capable of operating without the unfair term.
(3)A consumer contract is a contract for:
(a)a supply of goods or services; or
(b)a sale or grant of an interest in land;
to an individual whose acquisition of the goods, services or interest is wholly or predominantly for personal, domestic or household use or consumption.
…
24 Meaning of unfair
(1)A term of a consumer contract or small business contract is unfair if:
(a)it would cause a significant imbalance in the parties' rights and obligations arising under the contract; and
(b)it is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term; and
(c)it would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.
(2)In determining whether a term of a contract is unfair under subsection (1), a court may take into account such matters as it thinks relevant, but must take into account the following:
(a)the extent to which the term is transparent;
(b)the contract as a whole.
(3)A term is transparent if the term is:
(a)expressed in reasonably plain language; and
(b)legible; and
(c)presented clearly; and
(d)readily available to any party affected by the term.
(4)For the purposes of subsection (1)(b), a term of a contract is presumed not to be reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term, unless that party proves otherwise.
The original tribunal said it was satisfied that sections 23 and 24 of the ACL applied and offered the appellant an opportunity to settle the matter without admission of liability.[7] The appellant declined the opportunity. The original tribunal then offered the parties two weeks to obtain “any advice they wished on the ACL issue and [to] file submissions on that point”.[8]
[7] Godber v Integrity Car Care ACN 056 621 893 [2022] ACAT 11 at [18]
[8] Godber v Integrity Car Care ACN 056 621 893 [2022] ACAT 11 at [18]
The appellant filed written submissions[9] that, in summary, were as follows:
[9] Appellant’s submissions in the original proceeding dated 4 October 2021
(a)The claim amount should be $338.42, per the CWC tax invoice, not $440.
(b)The respondent read the Warranty before signing it.
(c)The Warranty is to provide assistance “with the cost of repair or replacement of certain Components and Parts”. If the type of cover is Comprehensive, as it was in this case, and “the Components and Parts covered [under the Warranty] are listed, we will pay the cost of repair or replacement up to the Claim Limits.” (emphasis in original)
(d)The Warranty covers “the covered components, NOT the covered systems. “Under the heading COOLING SYSTEM, the covered components are Water pump, cooling fan and fan clutch.”(emphasis in original)
(e)Section 14 of the Warranty, headed “Exclusions”, states:
We will not pay any contribution or claim by you for any of the following:
Warranty Type - any Components and Parts not specifically listed for the Warranty Type you have selected on your Schedule. (emphasis in original)
The relay or relays are not covered components.
(f)In response to the original tribunal’s reference to the ACL:
As the [tribunal] member will be well aware [the] ACL is between the Business that sold the product in issue the product, in this case it is the Car Dealership that sold the vehicle and Integrity Car Care are Appointed to administer the Warranty.
·Page 1 of the Warranty schedule: This Warranty agreement is issued by the Dealership in conjunction with the sale of a motor Vehicle and is a contract between the Dealership and the contract holder’s name appears on the Schedule. the selling Dealership has appointed Integrity Car Care Pty Ltd (ABN 58 056 621893) to administer this Warranty agreement.
i.Therefore, it is my understanding that ACL is not applicable in this case against Integrity Car Care.
The respondent (being the applicant in the original proceeding) also provided written submissions. He maintained his contention that the repair was covered under the Warranty He submitted, among other things:
I think most people would read the covered Warranty parts list and assume that the entire cooling fan system was covered under the big word “Comprehensive” listed as “Cooling System: Cooling fan”. What if it was only the cooling fan blades? Blades are also not mentioned by name; if only the blades are repaired I wouldn’t be covered. Most people would expect the cooling fan blades to be covered even though it is not mentioned by name, and the cooling fan relay is just as important, without the relay the cooling fan doesn’t turn on at all.
…
The relay should be covered under iWarranty’s comprehensive plan because it is a component of; required to make whole/mechanically sound a listed item on the specified page of the handbook, namely, “Cooling System: Cooling fan”.
…
Why am I expected to have any of this knowledge about a cooling fan relay? I took my car into the mechanic with a broken cooling fan, he fixed the broken cooling fan and I put in a claim for a broken cooling fan. Then, I got told I’m actually making a claim for a broken cooling fan relay which is not specifically mentioned so we don’t care even if it’s downright required to make the cooling fan function in the first place. Extremely unfair in my opinion.

The decision under appeal

In its reasons for decision, the original tribunal noted the appellant’s submission that the Warranty did not relate to the performance of systems as such, but only to specified parts within a “system”, being in this case the water pump, the cooling fan and the fan clutch. It noted the appellant’s submission that if the cooling system failed for a reason other than a defect in one of those parts, the Warranty did not cover the non-functioning cooling system. It noted the appellant’s submission that the defect was the fan relay switch, not the cooling fan itself, and thus the Warranty did not cover the defect.[10]
[10] Godber v Integrity Car Care ACN 056 621 893 [2022] ACAT 11 at [15]
The original tribunal described the appellant’s submission as:
… a very fine distinction that was almost certain to escape anyone other than an auto electrician and certainly would escape the ordinary person likely to take out the policy.
The original tribunal also rejected the appellant’s submission that the ACL applied only to the business that sold the Warranty, not the appellant which only administered the Warranty. The original tribunal said:
20.    The respondent[11] argued that this fact precluded the application of the ACL to its conduct. The suggestion was that the applicant should have joined the car dealership in the claim as the party with whom the contract existed.
21.    This was the first time this argument was raised by the respondent and the amount in issue did not justify relisting the matter for further hearing on that point.
22.    The Tribunal notes clause 13 of the Warranty which deals with complaints about decisions by the respondent. This clause provides that it is the respondent that will make any relevant decision and will consider any relevant complaints. There is no reference to the dealership.
[11] “The respondent” being the appellant on the appeal
Having quoted sections 23 and 24 of the ACL, the original tribunal found the Warranty to be “a consumer contract for the supply of a service that was intended to be used entirely for domestic purposes.” It then concluded:
29. The limitation in the warranty to specific defective parts as opposed to defective systems, is not transparent and is accordingly void. The remainder of the Warranty is then one for defective systems specified in the warranty and hence the applicant is entitled to succeed.[12]
[12] Godber v Integrity Car Care ACN 056 621 893 [2022] ACAT 11 at [29]
The original tribunal said it was not apparent how the respondent arrived at his claim for $440. It acknowledged the evidence supported a claim for $338.42 and ordered the appellant pay the respondent that amount plus the Tribunal filing fee.

The grounds of appeal

The appellant appealed, in summary, on the following grounds:
(a)The original tribunal denied the appellant procedural fairness by “introducing his own evidence” into the hearing by referring and subsequently relying on the ACL in circumstances where at no stage had the respondent raised any concerns under the ACL or supplied any supporting documents.
(b)When the appellant provided a defence in its final written submission as to why the ACL did not apply, namely it is the administrator of the Warranty not the issuer, the original tribunal dismissed the argument because it was not presented during the original hearing.
(c)The original tribunal “dismissed all facts relating to this case and instead applied his own beliefs”, the “undisputed facts” being –
(i)      the Warranty was complementary;
(ii)     the respondent agreed he had read and understood the Warranty before signing the declaration agreeing to the terms and conditions of the Warranty;
(iii)   the respondent agreed the “fan relay” is not listed as a covered component within the Warranty;
(iv)   the respondent agreed the Warranty mentions “on no less than 4 occasions” that “only the parts listed are covered”; and
(v) the appellant did not sell the vehicle or repair the vehicle so that the appellant is “unsure” how the ACL is applicable to it.
(d)The Warranty does not meet the legal characteristics of a contract of insurance.
(e)Enforcement of the ACL is done jointly by the Australian Competition and Consumer Commission (the ACCC) and State and Territory consumer protection agencies, causing the appellant to query the tribunal’s jurisdiction to enforce the ACL when it is not the ACCC or a consumer protection agency.
(f)Contrary to the finding of the original tribunal, the Warranty “is extremely transparent”.
(g)Neither party alleged the Warranty is a standard form contract, yet the original tribunal “introduced the ACL”.

Consideration – the original tribunal’s reliance on the ACL

The respondent properly acknowledged that the ACL was never part of his case.[13] it was therefore understandable that the appellant came to the litigation expecting the dispute to be decided pursuant to the terms and conditions set out in the Warranty, not the ACL.
[13] Transcript of proceeding, 18 May 2022, page 11, line 41
When exercising a judicial function to determine civil disputes, the Tribunal needs to be mindful not to ‘enter the fray by injecting its own ideas and arguments in too proactive a manner. It must decide disputes by reference to the issues and arguments raised. However, abiding by those obligations is a question of judgement and degree. On balance, I am not satisfied, on the facts in this case, that the original tribunal transgressed its obligations.
The substance of the respondent’s case was that for him, as a lay person with no knowledge of auto electrics, the Warranty applied because the cooling fan was faulty: it ran continuously until the battery went flat. An auto electrician fixed the fault. That the cause of the fault was a fan relay and not something within the body of the fan is, he said, irrelevant. Nothing in the terms of the Warranty, he said, justified exclusion of his claim by reason of the specific cause of the fault.
That argument was, for all practical purposes, a claim that the term ‘cooling fan’ made no material distinction between its component parts, whether they be a fan relay, the fan body, the motor or, to use the respondent’s example, the blades on the fan. In other words, there was no transparency or clarity regarding what components of a cooling fan were included or excluded under the Warranty, and so no reason to exclude the relay.[14]
[14] I am commenting on the claim at this point, not the merits of the claim. I deal below with the appellant’s ground of appeal that the Warranty is “extremely transparent”
The respondent did not refer to or rely on the ACL, but the substance of his claim was that it should not be excluded because of the specific cause of the fault that would not be known by an ordinary lay person and required the diagnosis of an auto electrician.
On these facts, I am not persuaded that the original tribunal erred by drawing on the respondent’s argument and suggesting to the appellant that it gave rise to remedies under sections 23 and 24 of the ACL. Within limits, the Tribunal may assist litigants – especially self-represented litigants – by drawing on the essential factual components of an argument and assembling them in a manner that articulates the substance of it from a legal viewpoint. I acknowledge that the extent to which a tribunal member should assist a party in this way involves questions of fact and degree. Another tribunal member might reasonably not have introduced possible liability under the ACL in this case where it had not been raised by either party.
On appeal, my task is not to inject my view about how the case could otherwise have been conducted. It is to determine whether the original tribunal erred by introducing reference to the ACL in the way it did. Having regard to the factual connection, in the original tribunal’s view, between the dispute and the ACL, I am not persuaded the original tribunal erred by referring to rights and remedies under the ACL especially where it gave the parties time to provide written submissions on the point. Ground (a) fails.

Consideration – the limitation term was not transparent and therefore void

The main issue was whether the original tribunal erred by finding the limitation in the Warranty to “water pump, cooling fan and fan clutch” (the limitation term) to be not transparent and therefore void with the result that the Warranty applied to the whole of the cooling system.
The original tribunal’s reason for finding in favour of the respondent is stated in paragraph 29 of its decision quoted above. The reason appears to draw on the original tribunal’s opinion, per paragraph 15 and 16 of its decision quoted above, that the appellant was drawing “a very fine distinction” when distinguishing the fan relay switch from the cooling fan itself.
Having found the limitation to specifically stated components and/or parts to be not transparent, it treated the whole limitation as void and construed the Warranty as applying to the whole cooling system.

In my view, the original tribunal misunderstood and misconstrued the relevant provisions of the ACL. As a consequence, its reasoning for finding the limitation term was void is flawed.
First, for a term not to be “transparent”, as defined in section 24(3), is not enough. Section 23 turns on whether the term is “unfair”, as defined in section 24(1). Pursuant to section 24(2), whether a term is transparent and, if so, “the extent to which the term is transparent” is no more than a factor to be taken into account when deciding whether the term is unfair.
Second, for a term of a consumer contract to be unfair, it must have each of the features stated in sections 24(1)(a), (b) and (c). The original tribunal does not address any of them. Further, in my view, the second feature at least is not made out. For the term to be unfair, section 24(1)(b) requires a finding that the limitation term, in this case, “is not reasonably necessary in order to protect the legitimate interests of” the appellant.
In my view, the limitation term is clearly necessary. Without the limitation term, the Warranty would apply to the whole cooling system which would include (for example) water hoses, thermostats and coolant. It would also create confusing overlap with coverage of the radiator under the Warranty which forms part of the cooling system. Such a result would expand the coverage under the Warranty well beyond what is contemplated when the document is read as a whole and, correspondingly, provide coverage well beyond what is contemplated by the premium or price paid by a purchaser of the Warranty.
Third, the original tribunal referred to section 25(1)(a) of the ACL which gives “examples of the kinds of terms of a consumer contract or small business contract that may be unfair”. The example in section 25(1)(a) is –
a term that permits, or has the effect of permitting, one party (but not another party) to avoid or limit performance of the contract.
Why this example was applicable was not stated, save perhaps and inferentially because, in the original tribunal’s view, the limitation term was not transparent. I disagree. In my view, section 25(1)(a) is not directed at a lack of transparency. It is directed at a term permits a party to avoid or limit performance of the contract - not a term that is ambiguous or lacking in transparency about what is to be performed under the contract.
Fourth, and with reference to ground (f) on the appeal, I accept the appellant’s submission that the limitation term is transparent, having regard to the definition of what “is transparent” in section 24(3) of the ACL quoted above.
Section 4 of the Warranty details the coverage where “Comprehensive Cover” has been provided, as in this case. It states –
4. COMPREHENSIVE COVER
– What the Warranty covers and Claim Limits
If the Type of Cover selected on your Schedule is Comprehensive the Components and Parts covered are listed on the opposite page (page 7) and we will pay the cost of repair or replacement up to the Claims Limits listed below. (emphasis in original)
“Components and Parts” is a defined term in the Warranty meaning “those Components and Parts listed in either the Drive Train Cover or Comprehensive Cover, according to the Warranty Cover Type selected in the Schedule.”
Page 7 of the Warranty contains two columns of information. The first column lists different parts or systems within a vehicle. The second column lists specific components and parts within a corresponding part or system.
Section 14 of the Warranty, headed “Exclusions” lists items and circumstances in which “we”, defined as Integrity Car Care Pty Ltd, “will not pay any contribution or claim”. Among the exclusions, as the appellant pointed out, is –
Warranty Type - Any Components and Parts not specifically listed for the Warranty Type you have selected on your Schedule (emphasis added).
When the Warranty (and sections 4 and 14 in particular) are read as a whole, it is quite clear that only the components and/or parts listed in the right-hand column on page 7 of the Warranty are covered under the Warranty. The descriptors in the left-hand column are simply to identify the system or overall part of the vehicle, for example “engine”, to which those “specifically listed” components or parts belong and to identify the claim limit for any claim of a component or part within that system.
The term “Cooling System”, written in the left-hand column, and “Water pump, cooling fan and fan clutch”, written in the right-hand column, are expressed in reasonably plain language, are legible, presented clearly, and readily available to the parties (in this case, the appellant and the respondent) affected by the term. The respondent never suggested otherwise. It follows, pursuant to section 24(3) of the ACL, that the limitation term “is transparent”.
A factual dispute as to what is covered by the words in the right-hand column does not mean that the whole of the term limiting coverage to those words is unfair and therefore void. In my view, the original tribunal fell into error by finding otherwise. I allow Ground (f).
The appellant put forward many other grounds for why the ACL did not apply. These included a submission that the ACL does not apply because the appellant did not supply the Warranty: it only administered the Warranty on behalf of the dealer (Ground (b)); the Warranty was not a contract of insurance and therefore not a “consumer contract” for the purpose of section 23(3)(a) of the ACL (Ground (d)); the Tribunal lacks jurisdiction to hear claims under the ACL (Ground (e)); and the Warranty was not a standard form of contract, as defined in the ACL, because the respondent never alleged it to be so (Ground (g)).
Ground (e) fails because the Tribunal is expressly granted power under sections 16(1)(i), 17 and 22 of the ACT Civil and Administrative Tribunal Act 2008 to hear and determine an application for an order under the ACL for an amount not greater than $25,000. In fairness, I note the appellant more queried than challenged the Tribunal’s jurisdiction and that Mr Sherry, appropriately, did not press this claim at hearing after I referred to the statutory provisions.
There is considerable force in the remaining grounds of appeal concerning the ACL, but it is neither necessary nor appropriate to consider them.
First, none of the grounds need to be considered because I am satisfied the original tribunal erred by finding the limitation term was void and no other reason was put forward for why the ACL applied or was breached. It follows that any question concerning the ACL or the appellant’s obligations or liabilities under it can be put aside. Second, the respondent never suggested the ACL applied or had been breached. Third, it was common ground that the respondent’s claim be determined according to the terms of the Warranty.[15]
[15] Transcript of proceeding, 18 May 2022, page 21, lines 20-23
I allow Ground (b) to the extent the appellant contends it was procedurally unfair for the original tribunal to dismiss the appellant’s argument on the grounds that the appellant did not articulate the argument at the original hearing. Self-evidently, the appellant did not present the argument at the original hearing because, at the time, no claim under the ACL was made. Where the original tribunal raised liability under the ACL, it was incumbent on it to give the appellant an opportunity to respond as it saw fit. It was, with respect, illogical to deny that opportunity on the grounds it was not raised at hearing when the issue had not arisen at the hearing. If giving that opportunity meant the matter needed to be relisted for further hearing (which I doubt) then so be it.

Consideration – ground (c): the undisputed facts

Regarding the first alleged ‘undisputed fact’, there was no evidence as to whether the respondent specifically purchased the Warranty or whether it was given, complementary, as part of the purchase price of the vehicle.
At the appeal hearing, Mr Sherry appeared on behalf of the appellant. He said that, according to the appellant’s records, the Warranty was “part of the vehicle price which would indicate to us that it was complementary”,[16] but acknowledged he could not comment on whether “the dealer gave it to [the respondent] at no charge or whether he added it to the vehicle price”.[17]
[16] Transcript of proceeding, 18 May 2022, page 8, lines 25-26
[17] Transcript of proceeding, 18 May 2022, page 8, lines 40-41
At the appeal hearing, the respondent contended he paid an additional $200 for the Warranty to increase the total paid from $6,300 to $6,500. He offered to obtain evidence to that effect in response to the appellant’s challenge.
In my view, this issue can be put aside. The appellant only raised it in the context of submitting the appellant was not liable under the ACL. Where I am satisfied the original tribunal erred by finding that liability, it follows that the question of whether the Warranty was complementary falls away.
For the purposes of what is covered under the Warranty, the appellant remained “more than happy” to argue whether the limitation term excluded the respondent’s claim having regard to the “facts of the case”.[18] Mr Sherry also accepted, appropriately, that “whether [the Warranty was] complementary or whether [the respondent] paid for it, the terms and conditions of the Warranty are the same.”[19]
[18] Transcript of proceeding, 18 May 2022, page 11, lines 9-10
[19] Transcript of proceeding, 18 May 2022, page 38, lines 36-38
Regarding the second, third and fourth undisputed facts, I accept them to be so but do not agree those facts defeat the respondent’s claim. In particular, that ‘fan relay’ is not “specifically listed”, as the respondent (I will assume) agreed, is not a complete answer: neither is the cooling fan motor or the cooling fan blades, which the appellant accepted are part of the cooling fan.
The real issue in this case was whether the cooling fan relay should be characterised as part of the cooling fan. If so, it is a “covered” component or part. If not, it falls within section 14, Exclusions, with reference to the definition of “Warranty Type” quoted above.
Unfortunately, there was little evidence on the question. The appellant agreed the only evidence before the original tribunal, or that I had on appeal, about whether the relays form part of the cooling fan was the descriptor of the work done in the invoice from CWC as quoted above.[20]
[20] Transcript of proceeding, 18 May 2022, page 26, lines 30-35
Mr Sherry made factual submissions as to why the relays are not part of the cooling fan. There was, strictly speaking, no evidence to support his submissions but I nevertheless took them into account in the interests of a pragmatic resolution of this matter and where his submissions were, in my view, balanced, sensible and honest.
First, Mr Sherry made several appropriate concessions. He acknowledged that the cooling fan relies on a relay to operate as it should by turning on and off as required.[21] He also agreed that the question arising under the Warranty was whether the relay was “integral to the cooling fan”, as opposed to the whole cooling system.[22] He agreed that ‘cooling fan’ would include “the electric motor that runs the cooling fan”,[23] the cooling fan blades and, to use his words, “anything to do with the actual cooling fan itself”.[24]
[21] Transcript of proceeding, 18 May 2022, page 21, lines 46-47
[22] Transcript of proceeding, 18 May 2022, page 22, line 42 – page 23, line 2
[23] Transcript of proceeding, 18 May 2022, page 25, lines 7-8
[24] Transcript of proceeding, 18 May 2022, page 25, line 15
Mr Sherry relied on the fact that the cooling fan requires only one relay to operate, yet CWC replaced two. The submission appeared to be that one of the relays did not operate the cooling fan. He relied on the fact, he said, that CWC –
didn’t actually diagnose what the actual problem was. They just started replacing components until it fixed it.[25]
[25] Transcript of proceeding, 18 May 2022, page 25, lines 29-30
With respect, that is not strictly correct. True, the description of work on the invoice evidences that CWC looked at different causes of the fault but there is no evidence that any components but the relays were replaced.
In an effort to determine the ambit of the words ‘cooling fan’, I asked Mr Sherry whether there were any documents or decisions he was aware of that might assist in addition to his assertion that the relay is not part of the cooling fan. Mr Sherry said there were no documents and that he relied on his 30 years’ experience as a motor mechanic.[26]
[26] Transcript of proceeding, 18 May 2022, page 35, lines 11-18
Mr Sherry, to his credit, and contrary to the submissions in the original proceeding acknowledged that if a part was “covered” under the Warranty, the labour component of the cost to replace or repair the part was covered under the Warranty up to the claim limit.[27] Under the Warranty, the claim limit for covered parts or components referenced to the cooling system was $350. The claim was for $338.42.
[27] Transcript of proceeding, 18 May 2022, page 32, lines 9-31
The respondent began with the fact that the cooling fan was faulty because it remained on until the battery went flat. He submitted that the cooling fan “itself was malfunctioning” for this reason. CWC fixed the malfunctioning cooling fan by replacing the relays. He said that for the appellant to contend that the repair to the cooling fan was not covered because it involved replacement of a separate part was to take a narrow definition “of what is a cooling fan or not and what should be covered under [the Warranty].”[28] The respondent questioned why something called a ‘cooling fan relay’ should be excluded as a component of the cooling fan any more than the cooling fan blades should be excluded.
[28] Transcript of proceeding, 18 May 2022, page 27, lines 36-39
I acknowledge that the appellant’s and the respondent’s views on this issue reasonably differed. I reject the proposition that the appellant unreasonably rejected the respondent’s claim.
However, doing the best I can and with the little evidence available, I was persuaded that a cooling fan relay should be treated as part of a cooling fan in the same way that the blades, motor, housing or, for that matter, the assembly that enables the fan to be attached to a vehicle, all form part of the fan. When resolving ambiguity or uncertainty, words in a document must be construed in a reasonable manner. Determinative, in my view, is that the relay is integral to the cooling fan and for the specific, direct and essential purpose of causing the fan to turn on or off as required. Without a functioning relay, the cooling fan necessarily malfunctions as occurred in this case. All electrical items that I can envisage have, as an essential component, a switch to enable them to be turned on and off as required whether manually or automatically.
The fact that the relay is not, I assume, physically attached to the body of the fan does not change the fact that it is integral to the fan’s operation and is solely for that purpose. The fact that CWC, when presented with a problem that the fan would not turn off, removed the relays following which the “symptoms ceased” made clear the relay was the cause of the fault in the fan. Replacement of the relay caused the fan to operate properly in the same way that replacement of a faulty motor with a functioning motor would cause the fan to operate properly.
I do not agree with the appellant’s likening of the relay to the battery, the wiring, the vehicle ignition switch or the thermostat, to give some of Mr Sherry’s examples.[29] True, the cooling fan might not or will not function properly if these other components are not working or are faulty but they are not integral or specific to the cooling fan. A flat battery, for example, will prevent all components of the vehicle that depend on electricity from functioning. A thermostat has little to do with a cooling fan and all to do with modulating the temperature of the water that is cooling the engine by circulating through the engine and radiator.
[29] Transcript of proceeding, 18 May 2022, page 24, lines 31-34
I accept the appellant’s submission that the fan required only one relay, yet CWC replaced two and that one of the relays (I am prepared to assume) had no connection with the operation of the fan, but that does not equate to disallowance of the respondent’s claim under the Warranty. Whilst there was no evidence on the question, I anticipate that where the cost of a relay was only $48.60 plus GST the most cost-effective manner for rectifying the fault was to replace both relays rather than incur additional labour costs necessary to identify which of the relays was at fault which likely would have exceeded the cost of the second relay.

Conclusion

For the reasons given, I am satisfied the original tribunal erred by finding the limitation term in the Warranty to be unfair term and therefore void pursuant to section 23 of the ACL. In my view, the term is not unfair and is, in every sense, transparent.
However, where I am satisfied that the cooling fan relay is part of the cooling fan, it is within a listed component or part under the Warranty and therefore covered under the Warranty. Accordingly, although my reason for finding liability is entirely different to that of the original tribunal, the appeal is dismissed. The appellant remains liable to pay the respondent $415.42. I will allow the appellant until 1 June 2023 to pay that sum.
The appeal filing fee raises a different issue. The appeal is successful in all material respects, except the result. More importantly, the original tribunal’s failure to provide procedural fairness and its error regarding application of the ACL did not arise from anything the respondent did or said. The ACL never formed part of the respondent’s case.[30] All the errors were at the initiative of the original tribunal.
[30] Transcript of proceeding, 18 May 2022, page 11, line 42
In the exceptional circumstances of this case, notwithstanding the result, I will therefore recommend to the Tribunal registrar that the Tribunal repay the appeal filing fee ($1,186) to the appellant.

………………………………..

Presidential Member G McCarthy

Date(s) of hearing:	18 May 2022
Representative for the Appellant:	Mr Matthew Sherry
Respondent:	In person