Juwayed v Marten - [2022] SASC 6

Supreme Court of South Australia

(Magistrates Appeal: Civil)

JUWAYED & ANOR v MARTEN

[2022] SASC 6

Judgment of the Honourable Auxiliary Justice Bochner

25 January 2022

MAGISTRATES - APPEAL AND REVIEW

SALE OF GOODS - SALE OF GOODS LEGISLATION - ACTIONS FOR BREACH OF CONTRACT - REMEDIES OF BUYER - REMEDY FOR BREACH OF WARRANTY - MEASURE OF DAMAGES

SALE OF GOODS - SALE OF GOODS LEGISLATION - ACTIONS FOR BREACH OF CONTRACT - REMEDIES OF BUYER - REMEDY FOR BREACH OF WARRANTY - REMEDY GENERALLY - DIMINUTION OR EXTINCTION OF PRICE

Swick Nominees Pty Ltd t/as Swick Drilling Australia v Norncott Pty Ltd [No3] [2013] WASC 173; Australian Competition and Consumer Commission v Jayco Corporation Pty Ltd [2020] FCA 1672; HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd [2004] HCA 54; Fox v Percy [2003] HCA 22; Vautin v BY Winddown Inc. (formerly Bertram Yachts) (No 4) [2018] FCA 426, considered.

JUWAYED & ANOR v MARTEN

[2022] SASC 6

Civil

In 2014, Mr Marten purchased a caravan from the first appellant. The caravan was manufactured by the second appellant. I will refer to the appellants as Mr Juwayed and Goldstar respectively.
In 2016, when Mr Marten and his wife were en route from Townsville to Darwin, the A-frame of the caravan broke. Mr Marten arranged for temporary repairs to be carried out; he and his wife then abandoned their holiday and towed the caravan back to their home in Victoria.
On his return home, Mr Marten contacted both his insurer and Mr Juwayed and Goldstar. He demanded from Mr Juwayed and Goldstar either a refund of the purchase price of the caravan ($45,000) or a replacement caravan. A lengthy series of emails and other communications ensued between the parties in respect of repairs to the caravan. Despite the involvement of Consumer and Business Services, the dispute between then was not resolved.
Finally, Mr Marten’s insurer stepped in. It indemnified Mr Marten, took possession of the caravan and sold it at auction. The net proceeds of sale were $21,363.64. The insurer, exercising its right of subrogation, commenced this action against Mr Juwayed and Goldstar, alleging negligence and breaches of the Australian Consumer Law (“the ACL”). It sought the amount of $24,486.36, being the difference between the purchase price paid by Mr Marten, and the net price received at auction, plus the costs of the temporary repairs and the salvage fee charged by the auctioneer.
Prior to trial, Mr Juwayed and Goldstar admitted that the failure of the caravan’s A‑frame amounted to a safety defect as defined by s 9 of the ACL, and was a breach of the guarantees of acceptable quality and reasonable fitness for purpose in ss 54 and 55 of the ACL respectively. They conceded that the defect amounted to a major failure within the meaning of s 259(3) of the ACL.
The questions for determination were framed by the Magistrate in the following way:
[8] The issues for determination are:
1. The amount by which the value of the caravan was reduced due to the major failure and the compensation to which Mr Marten is entitled under s 259(3)(b) and s 272(1) of the ACL.
2. Whether any amount of compensation should be further reduced for any failure by Mr Marten to act reasonably:
(a) in the re-sale process, such that a higher price was not achieved; or
(b) by deciding to sell the caravan rather than allow Mr Juwayed and Goldstar to repair it. The pleading of negligence was not addressed by the Court, because of Mr Juwayed and Goldstar’ admission of liability in respect of the ACL allegations.
At the trial, Mr Marten gave evidence, as did a chartered professional engineer, Rowan Carter, who had provided a report at Mr Marten’s request, in respect of the cause of the failure, and whether the caravan met the relevant Australian Standards. For Mr Juwayed and Goldstar, Mr Juwayed gave evidence, as well as Peter Panagaris, an automotive consultant. Mr Juwayed gave evidence as to the costs of repairs to the caravan. Mr Panagaris gave evidence of the value of the caravan at different times, assuming the caravan was in poor, good or average condition at each time, and on the basis that it had the defect, but had been repaired and was roadworthy.
Mr Marten’s position was that reduction in the value of the caravan below the price paid by him should be determined by deducting the amount received at auction from the purchase price paid. Mr Juwayed and Goldstar, on the other hand contended that it should be calculated by deducting from the purchase price the market value of the same model caravan in average condition in August 2016 (the date that the A-frame broke) or September 2017 (the date of the sale of the caravan). Of those two approaches, the Magistrate said:
However, neither of those approaches is directed toward the task to be undertaken by the Court, which is an assessment of the true value of the caravan at the time it was purchased by Mr Marten; that is, an assessment of what would have been a fair price to have been paid in the circumstances at the time of purchase.
In determining the compensation to be awarded to Mr Marten, the Magistrate took into account the fact that the caravan had retained nearly half of its value when it was sold at auction in September 2017. She accepted Mr Carter’s evidence that, at the time that the caravan was purchased, it had a latent defect that would cause it to become unroadworthy within a relatively short time. She said:
… Given the significance of the nature of the defect I expect the value of the caravan could be reduced as much as half the price paid for it by Mr Marten, which is consistent with the price achieved at auction.
She then took into account the fact that a notional purchaser would have use of the caravan for around two years before the defect became apparent; as a result she added to half the purchase price an amount to represent depreciation over two years. In this regard, she took judicial notice of the reasonable lifespan of a caravan as being around 20 years and applied a depreciation value of 5%. She determined that Mr Marten was entitled to be reimbursed the costs of the temporary repairs, but considered that the salvage fee was too remote.
The Magistrate rejected the contention of Mr Juwayed and Goldstar that Mr Marten was required to mitigate his loss. In doing so, she distinguished the decision of the Supreme Court of Western Australia in Swick Nominees Pty Ltd t/as Swick Drilling Australia v Norncott Pty Ltd [No3], on the basis that that case dealt with the contractual measure of damages for breach of a condition imposed by the Sale of Goods Act (WA). She relied on Australian Competition and Consumer Commission v Jayco Corporation Pty Ltd, (“Jayco”) where the Federal Court warned against drawing an analogy with the assessment of damage in contract, tort or equity when assessing damages for breaches of the ACL.
The Magistrate determined that Mr Marten was entitled to compensation in the sum of $18,662.50. Mr Juwayed and Goldstar appealed and Mr Marten filed a cross‑appeal.

The Appeal

Mr Juwayed and Goldstar say that the Magistrate erred in that, in assessing Mr Marten’s loss, she should have taken into consideration the fact that he had use of the caravan for a period of time. They further say that the Magistrate failed to make any findings in respect of their contention that the caravan could have been repaired for less than $1,200. In the alternative, Mr Juwayed and Goldstar say that the Magistrate erred by assessing the value of the caravan despite neither party leading sufficient evidence on the question, and in taking judicial notice of the reasonable lifespan of a caravan and the appropriate depreciation rate.
Mr Juwayed and Goldstar say that Mr Marten’s claim should have been dismissed for lack of evidence, or the parties should have been recalled to allow them to call further evidence or make further submissions in respect of the question of valuation.

The Cross-Appeal

Mr Marten contends that the Magistrate erred in determining that the issue before the Court was to determine the true value of the caravan at the time of purchase. The correct task was to determine any reduction in the value of the caravan between the price paid or payable by Mr Marten. He contends that the Magistrate further erred in finding that his loss was to be assessed by determining the value that a prospective purchaser, having been fully informed of the safety defect, would place on the caravan.
He says the proper assessment of the loss comprised the price paid by Mr Marten less the sale price received at auction. He further says that the Magistrate erred in finding that the salvage fee was not recoverable.

The Appeal

At the commencement of the hearing, the parties advised that they were in agreement that judicial notice should not have been taken on the reasonable lifespan of a caravan and the appropriate depreciation rate. As a result, the appeal will be allowed on this basis. I will consider, in turn, the other ground of appeal and cross-appeal and the submissions of the parties.

The position of Mr Juwayed and Goldstar

Mr Juwayed and Goldstar submit that the words in s 259(3)(b) of the ACL, that the consumer is entitled to the “reduction in the value of the goods” below the price paid, implies that Mr Marten is entitled to the difference between the price that he paid for the caravan, and its value. This is a matter of expert evidence, and is not determined by the amount received by Mr Marten on its sale. This is particularly the case here, where there was no evidence of the way in which the auction was carried out. They also contend that Mr Marten had a duty to mitigate his loss. They say that, if Mr Marten had chosen to reject the goods, then they would have taken possession of the caravan, which, on Mr Juyawed’s evidence, was worth significantly more than the price obtained at auction. In fact, the Magistrate failed to make any findings as to whether the caravan could have been repaired for the amount estimated by Mr Juyawed, despite this matter being raised on the pleadings. If the Magistrate had accepted this evidence, it was then available for her to rely on the evidence of Mr Panagaris as to the value of the caravan.
Rather than making findings in respect of this evidence, however, the Magistrate employed her own calculations, to reach a valuation as at 2016. Mr Juwayed and Goldstar submit that the calculations used by the Magistrate are flawed, in that there was no evidence to support her finding that the value of the caravan in 2014 was half the price paid by Mr Marten. The price received at auction does not provide any support for this proposition.
Mr Juwayed and Goldstar submit that the best evidence of Mr Marten’s loss is the purchase price of $45,000, less the caravan’s value at the date of the failure, calculated on the basis of the valuations given by Mr Panagaris ($35,000, assuming that the caravan was in average condition), noting that the cost of the repair as estimated by Mr Juwayed ($1200.00) would need to be deducted. Thus, Mr Marten’s loss is $11,200. This calculation assesses Mr Marten’s actual loss, which takes into consideration his use of the caravan for two years.
In the alternative, Mr Juwayed and Goldstar submit that if the calculations used by the Magistrate are correct, then they should have been afforded the opportunity to make further submissions and present further evidence.

The position of Mr Marten

Mr Marten submits that the calculation to determine the reduction in value of the caravan is a simple one: it is the difference between the purchase price, and the price that he received at auction. He submits that both the test used by the Magistrate and that contended for by Mr Juwayed and Goldstar are wrong, on the basis that neither fulfils the remedial purpose of the ACL.
Mr Marten says that s 259(3)(a) and (b) give the consumer two distinct remedies; nonetheless, the intention behind each is the same. Under either remedy, the consumer is to be placed in the position that he would be in if he had chosen to reject the goods and receive a full refund. Neither of the tests postulated does this; each under-compensates Mr Marten. Mr Marten further notes that he did, in fact, attempt to reject the caravan, but this option was not accepted by Mr Juwayed and Goldstar.
Mr Marten contends that the Magistrate erred in drawing an analogy between this matter, and the case of HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd, (“HTW Valuers”) as in that case, the purchase price was inflated. The issues in contention in this matter are completely different and analogy is not apt. He submitted that no fully informed purchaser would buy a caravan with a major defect.
As to the contentions of Mr Juwayed and Goldstar, Mr Marten submits that they rely on findings that it would have been reasonable to allow the repair of the caravan, and that the repairs would not cost more than $1200.00. The only evidence before the Court that the repairs would cost $1200.00 was Mr Juwayed’s; as this is clearly a matter for expert evidence, his evidence cannot be accepted. It must also be contrasted to the evidence of Mr Carter, who said that the design of the caravan was ill-conceived and grossly failed to meet good engineering practices. He further submits that Mr Juwayed and Goldstar had no right to repair the caravan, and he had no obligation to have it repaired.
Mr Marten rejects Mr Juwayed’s and Goldstar’s submission that there was insufficient evidence of the value of the caravan. The sale of the caravan by auction was on the open market and elicited the price that a willing purchaser was prepared to pay. There was no evidence to suggest that the auction process was flawed or substandard in any way. Further, the evidence of Mr Panagaris did not assist in determining value; he was not asked to value a caravan with a major defect, but one that had been repaired.
Finally, Mr Marten submits that the Magistrate erred in failing to find that the salvage fee was recoverable. He argues that, once Mr Juwayed and Goldstar refused to accept the rejection of the caravan, the loss occasioned by the imposition of the salvage fee was reasonably foreseeable, as he was required to sell the caravan.

Consideration

This is an appeal by way of rehearing. In Fox v Percy, the High Court explained the role of an appellate court in a matter such as this. The plurality said:
Within the constraints marked out by the nature of the appellate process, the appellate court is obliged to conduct a real review of the trial and, in cases where the trial was conducted before a judge sitting alone, of that judge's reasons. Appellate courts are not excused from the task of "weighing conflicting evidence and drawing [their] own inferences and conclusions, though [they] should always bear in mind that [they have] neither seen nor heard the witnesses, and should make due allowance in this respect". In Warren v Coombes, the majority of this Court reiterated the rule that:
"[I]n general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge but, once having reached its own conclusion, will not shrink from giving effect to it."
As this Court there said, that approach was "not only sound in law, but beneficial in … operation".

(citations omitted)

This is the task that I must undertake against the backdrop of the grounds of appeal.

Notice of Appeal: Ground 1a – The learned Magistrate erred finding at [12] that the task to be undertaken by the Court was an assessment of the true value of the caravan at the time it was purchased by Mr Marten, when Mr Marten’s loss and damages must take into account the fact that he had the use of the caravan for a period of time

Section 259(3) of the ACL provides:
(3) If the failure to comply with the guarantee cannot be remedied or is a major failure, the consumer may:
(a) subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection; or
(b) by action against the supplier, recover compensation for any reduction in the value of the goods below the price paid or payable by the consumer for the goods.
The effect of s 259(3)(a) was summarised in the decision of Wheelahan J in Jayco, where he said:
If the failure to comply with the guarantee cannot be remedied, or is a major failure, the consumer may reject the goods. If the consumer rejects the goods, the supplier must, in accordance with an election made by the consumer, refund any money paid by the consumer for the goods, or replace the rejected goods with goods of the same type and of similar value, if such goods are reasonably available to the supplier.
In respect of the refund to which a consumer is entitled, he said:
Upon an election by a consumer to receive a refund of the money paid for the goods, the supplier must provide a refund in accordance with the terms of s 263(4)(a) of the ACL: Vautin at [286]. The imperative terms of the statutory obligation under s 263(4)(a) do not authorise any abatement or adjustment of the amount paid on account of depreciation, or any use of the goods by the consumer: cf, Consumer Rights Act 2015 (UK), s 24(8), which, subject to qualifications, authorises a reduction of a refund to a consumer who rejects goods to take account of the use of the goods by the consumer.
It appears that Mr Marten sought to exercise his right to reject the caravan and obtain a refund. On 16 September 2016, he emailed Goldstar in the following terms:
This is a total failure of the chassis mounting system the caravan is not fit to travel on the road (sic). As you are already aware there have been others that have failed also this is a defect of manufacture and again I request that you supply me with a caravan free of manufacturing fault…Again I request that you supply me with a caravan free of defects or give me my money back.
This email was sent within a very short time of major failure becoming apparent. This request was reiterated by him in a further email on 14 October 2016, when he wrote:
As per our previous correspondence I again ask that the caravan be replaced or for the $45,000.00 we paid Goldstar in good faith for the caravan that was guaranteed to be to Australian Standards be returned.
Despite this, Mr Juwayed and Goldstar refused to accept the rejection of the caravan and provide Mr Marten with a refund of the purchase price. Thus, Mr Juwayed and Goldstar prevented Mr Marten from exercising his rights pursuant to s 259(3)(a) of the ACL. This has left Mr Marten with the remedy provided for in s 259(3)(b): compensation for the reduction in the value of the caravan below the price paid by him for it.

The Magistrate described the assessment process in the following way:
…an assessment of the true value of the caravan at the time it was purchased by Mr Marten; that is, an assessment of what would have been a fair price to have been paid in the circumstances at the time of the purchase.
The Magistrate relied on the case of HTW Valuers in formulating the test in this way. In using the words “true value” and “fair price”, she drew from the following passages:
The approach of subtracting value from price is commonly employed where the acquisition of land, chattels, businesses or shares is induced by deceit. It has also been commonly employed under s 82 of the Act. It is sometimes described as the rule in Potts v Miller. Even in the areas in which that approach is often applied, and even apart from cases in which consequential losses have been recovered, the "rule" is not universal or inflexible or rigid. This perception is not novel. It has existed at least since the judgment of Dixon J in Potts v Miller and has been quite plain since that of Gibbs CJ in Gould v Vaggelas. Even Jordan CJ, who called the rule "well settled", acknowledged that it was only a "rule of practice". The flexibility of the rule can be seen by reference to a number of its characteristics.
One key qualification of the rule which prevents it from being inflexible is that the test depends not on the difference between price and "market value", but price and "real value" or "fair value" or "fair or real value" or "intrinsic" value or "true value" or "actual value" or what the asset was "truly worth" or "really worth" or "what would have been a fair price to be paid … in the circumstances … at the time of the purchase". This distinction is sometimes difficult to draw, but it is old and fundamental.
(citations omitted)

In formulating the test in this way, I do not consider that the Magistrate erred. She has done no more than restate the test set out in s 259(3)(b). It is clear from a plain reading of s 259(3)(b), that the compensation to which a consumer is entitled for a major failure is the difference between the price he or she paid for the goods and the value of the goods at the time that they were supplied; whether the word “value” needs to be assigned an adjective such as “true”, “fair”, “real”, or “intrinsic” is questionable. Such words serve, however, to distinguish “value” as referred to in the ACL, from market value or from the price paid.
The Magistrate has clearly identified that, in determining the reduction in value of the caravan below the price paid, it is necessary to assess its “true” value; only once this has occurred, can the reduction below the price paid be ascertained.
I am also of the view that the Magistrate did not make an error, in failing to take into account Mr Marten’s use of the caravan for a period of time. As explained by Wellahan J, s 263(4)(a) makes it clear that any refund is not to be reduced in any way. It provides:
(4)        The supplier must, in accordance with an election made by the consumer:
(a) refund:
(i)       any money paid by the consumer for the goods; and
(ii)    an amount that is equal to the value of any other consideration provided by the consumer for the goods; or
(b)    replace the rejected goods with goods of the same type, and of similar value, if such goods are reasonably available to the supplier.
The supplier must refund any money paid by the consumer. This is unequivocal in its meaning: the full purchase price is to be refunded, and it is not to be reduced to take into account depreciation or use of the goods, or any other factor. The remedy provided for in s 259(3)(b) is an alternative to rejection and refund; it must therefore provide the same remedy, albeit in a different form to that offered by s 259(3)(a). It can be concluded, therefore, that where a consumer is entitled to compensation for a major failure, that compensation must be the equivalent, in value, to a complete refund of the purchase. It must also be inferred that, as the consumer is entitled to a refund of all moneys paid, he or she must also be entitled to the difference between the price paid and the value of the goods at the date of purchase, without that value being affected by depreciation or use.
Ground 1a of the grounds of appeal is not made out.

Notice of Appeal: Ground 1b – The learned Magistrate erred in failing to make any finding in relation to the evidence of Mr Juwayed that the caravan could have been repaired for a cost of less than $1,200 (see [18])

In my view, this ground of appeal is misconceived. The focus of the relevant provision of the ACL is clearly on the consumer and his or her rights. In Vautin v BY Winddown, Inc. (formerly Bertram Yachts) (No 4) (Vautin), Derrington J said:
The new scheme of statutory guarantees in the ACL appears to have abandoned that regime in favour of one which apparently imposes standards of normative behaviour in relation to the quality of goods produced by manufacturers and supplied by suppliers. The damages available for breaches of the guarantees indicate the relief to which a consumer is entitled is that which reverses any worsening of the consumer’s economic position by reason of the failure of the guarantee. Where the failure to comply is a “major failure” the consumer is entitled to, effectively, rescind the agreement and recover the consideration which was paid (see s 259(3)(a)). Alternatively, the consumer is entitled to retain the goods in question and recover an amount that represents the difference between the price paid for the goods and the value of the goods (see s 259 (3)(b)). Presumably this difference is one which is attributed to the failure of the goods to comply with the guarantee although that is not specifically stated in the sections. It might also be presumed that the difference is measured as at the date of supply which is the relevant date to consider when ascertaining whether there was a failure to comply with the guarantee.
Effectively, the remedies provided are designed to put the consumer in the position that he or she would have been in, had the goods not been subject to a major fault. The remedies are directed towards maintaining or restoring the rights of the consumer; the ACL provides the supplier with no right to undertake repairs to the goods, nor does it impose an obligation on the consumer to seek or accept any repairs offered by the supplier.
For the purpose of a remedy under s 259(3) of the ACL, the availability and cost of repairs is irrelevant. The Magistrate was not required to make any finding in respect of Mr Juwayed’s evidence that the caravan could have been repaired for less than $1,200.00.
In any event, Mr Juwayed’s evidence amounted to no more than opinion evidence of a partisan lay person. No groundwork was done to establish any expert credentials that he might have; as a result, his opinion of the cost of repairs cannot be accepted as expert evidence in this regard.
Ground 1b is not made out.

Notice of Appeal: Ground 1c – The learned Magistrate erred in the alternative:

By performing a valuation in paragraphs [22] to [26] in relation to which neither party had led sufficient evidence;
In taking judicial notice at [25] of the reasonable lifespan of a caravan and the rate at which a caravan would depreciate;

instead of either dismissing the Applicant’s Claim for lack of evidence in relation to the essential elements of its cause of action, or in the alternative recalling the parties and inviting them to address the Court and/or reopen their cases on these issues.

The Magistrate relied on Vautin in saying:
22 In the absence of any expert evidence as to how a potential purchaser would approach the purchase of the caravan if they were fully informed of the defect in the drawbar, a ‘broad-brush approach is necessary in the assessment of damages’. It is not appropriate for the court to ‘hazard a guess as to the valuation figure’ of the caravan at the date of sale to Mr Marten, but the estimate of the true value at that time ‘must be an inexact process’. When assessing compensation or value at one date, the court is entitled to take into account events occurring afterwards that are known at the date of assessment, but ‘it must distinguish among possible causes of the decline in value of what has been bought.’ That is, to distinguish between a cause that is inherent in the item from independent or supervening causes of additional loss.
(Citations omitted)
In my view, she correctly stated the approach that she needed to take in assessing the reduction in value of the caravan below the price paid by Mr Marten. I am further of the view that no error was made when she found that the evidence of Mr Panagaris was of little value, because his valuations were based on a caravan that was two years old which had sustained the relevant damage, where that damage had been repaired so as to make the caravan roadworthy. These valuations are clearly inappropriate when viewed against the terms of the ACL. The relevant value is that of the caravan with the inherent defect in situ at the date of supply. Mr Panagaris’ evidence does not address this.
I consider, however, that the Magistrate erred in taking into consideration the price achieved at auction in September 2017 when determining the caravan’s value at the date of supply. At the time that the caravan was sold, it was three years old and unroadworthy. It is impossible to determine how much of its value at the date of sale was attributable to its age, its condition generally, noting that there had been many other complaints by Mr Marten about other defects in respect of the caravan and its fit out, and to the major failure. In my view, this renders it impossible to extrapolate from the price received at auction, a value on the day that it was supplied to Mr Marten.
I am of the view that the Magistrate erred further in taking judicial notice of the reasonable lifespan of the caravan and an appropriate depreciation rate and then applying those factors in a calculation in determining value. As I have previously noted, the parties are in agreement that this amounted to error.
Finally, I am of the view that, while the Magistrate was correct to allow compensation to Mr Marten to cover the cost of the temporary repairs to the caravan, she was in error in finding that the salvage fee was too remote. She described it as a consequence of Mr Marten’s decision to retain the caravan and to sell it.
In fact, Mr Marten did not decide to retain the caravan. He sought to reject it, but this was refused by Mr Juwayed and Goldstar who were adamant that they should be given the opportunity to repair the caravan. As a result, Mr Marten was denied his remedy of choice under s 259(3). In my view, the salvage fee is a direct consequence of Mr Juwayed’s and Goldstar’s refusal to adhere to their obligations under the ACL. Mr Marten should receive compensation for the salvage fee.
Ground 1c is made out.
As a result, the appeal is allowed.
I turn now to the cross appeal.

Notice of Cross Appeal: Ground 1 – The learned Magistrate erred in finding at [12] that the task to be undertaken by the Court was an assessment of the true value of the caravan at the time it was purchased by Mr Marten, when the court should have found that the task to be undertaken was to determine “any reduction in the value of the goods below the price paid or payable by the consumer for the goods” resulting from the major failure to comply with the guarantee (see: s259(3)(b) of Schedule 2 (The Australian Consumer Law) of the Competition and Consumer Act 2010 (Cth) (“ACL”))

In my view, this ground of appeal fails to consider the words of the Magistrate, about which complaint is made, in their proper context. I repeat the reasons I gave, at [38]-[41] in respect of Ground 1a of the Notice of Appeal.
There is no basis to Ground 1 of the Notice of Cross Appeal.

Notice of Cross Appeal: Ground 2 – The learned Magistrate erred in finding at [24-25] that the assessment of loss pursuant to s259(3)(b) of the ACL comprised the value that a theoretical prospective purchaser would place on the caravan fully informed of the safety defect in the drawbar, when the court should have found that the assessment of loss was:

a. The price paid for the caravan; less

b. The price received for the caravan when sold following the identification of the major defect.

I have already set out my conclusions in respect of [24] and [25] of the Magistrate’s reasons at [50]-[51]. While I have concluded that the Magistrate erred in her application of assessment process, however, I do not consider that she erred in her formulation of that process.
The Magistrate was required to determine the value of the caravan at the date of supply. In Vautin, Derrington J, when considering the value of a yacht at the date of supply, said:
[300]      …However, such questions of depreciation are not relevant to its value when it was brand new. That being so a relatively rough calculation can be made as to the value of the vessel as at the date of supply on the assumption that the putative purchaser would have been aware of the existence of the defects in the vessel as well as the cost of remedying them. On the basis that the total cost of putting Revive into the condition of a Category A vessel would be $2,995,505.70 (as is discussed below), prima facie, its value as at the date of supply was no more than the purchase price less that amount or approximately $1,238,295.33.
[301]    However, that calculation assumes that at the date of supply the putative purchaser would have known what the defect was, how it would manifest itself, the nature and extent of the defect, and the cost of remediating the defect. As I have indicated above, those matters do not encompass the full extent of the nature of the defects of which a purchaser, fully acquainted with the vessel, would be aware. The notional purchaser would also be aware that it contained a latent defect which might take some time to manifest itself, that a significant but uncertain amount of time would be required to ascertain what had caused the damage and further significant time, also uncertain in duration, would be required to ascertain the nature and extent of the construction defect and the amount which would be required to repair it. By reason of that, the notional purchaser would also know that the vessel would be out of service for an extended time, would require mooring, maintenance and upkeep expenses to be paid and its value would significantly depreciate during that period. It is not conceivable that a purchaser who was acquainted with these matters would not take them into account in determining the price which they would be willing to pay for the vessel. Of these items the value of the vessel lost by depreciation caused by the effluxion of time whilst the vessel was unusable would amount to $1,270,140 (which is discussed below). On a straight calculation that would reduce the value of the vessel to nil, however, it is not clear that such a calculation can be made and there is no evidence before the Court as to how a potential purchaser would approach the acquisition of Revive were they to have been fully informed of the nature and extent of the defects. That is a matter for expert evidence and none was adduced.
[302]    Overall, and accepting that a broad-brush approach is necessary in the assessment of damages, it is not appropriate for the Court to hazard a guess as to the valuation figure of Revive at the date of sale. That is a matter on which the Court requires expert evidence and none was adduced at trial. The best that can be done on the evidence which was adduced is to conclude that, at the date of the supply, Revive's value was, at the most, the purchase price less the cost of undertaking the necessary repairs to render it fit as a Category A vessel or $1,238,295.33. The amount of the diminution in value of the vessel is equal to the cost of repairs at $2,995,505.70.
In my view, the Magistrate did not err in her formulation. As in Vautin, there was no evidence in this matter as to how a potential purchaser would value the caravan, if that purchaser were fully informed of the nature and extent of the defect. Unlike in Vautin, however, there was no evidence before the Court as to the cost of repairs, as I consider that the evidence of Mr Juwayed should not be taken into consideration in this regard. While Mr Carter provided his expert opinion as to the cause of the failure and whether the caravan complied with the relevant Australian Standards, he did not express an opinion as to the value of the caravan at the time of purchase, or an estimate of the cost of repairs. The values attributed to the caravan by Mr Panagaris are irrelevant, as they are based on a caravan repaired to a roadworthy standard, not a new caravan with a latent defect that has not yet declared itself.
The contention of Mr Marten, that the value of the caravan is the purchase price less the amount received following sale at auction, cannot be accepted. In the same way, the price received on the sale of a roadworthy caravan three years after its purchase would not indicate its value on the date of its first sale; the price received at auction of Mr Marten’s caravan is no indicator of its value on the day that he bought it. The price received at auction would reflect, not only the defect, but the effect of depreciation and ordinary wear and tear on the caravan, as well as any limitations that might have been caused by flaws in the auction process itself. The amount received at auction in no way reflects the value of the caravan at the date of purchase by Mr Marten. It might be arguable that the caravan had no value on that day, because a fully informed purchaser would not buy a caravan with such a defect. That, however, is a matter for expert evidence.
Ground 2 is not made out.

Notice of Cross Appeal: Ground 3 – The learned Magistrate erred in finding at [26] that the salvage fee is too remote to be compensated under either s 259(3) or s272(1)(b) of the ACL.

As I have already found, the salvage fee was incurred as a direct result of Mr Juwayed and Goldstar refusing to make good their obligations under the ACL. As a result, I am of the view that Mr Marten should have been compensated for this amount.
Ground 3 is made out.

Conclusion

The appeal must be allowed. Unfortunately, there is no evidence before the Court to allow the value of the caravan at the date of sale to Mr Marten to be assessed. The matter must be remitted to the Magistrate for further evidence to be adduced on this question by the parties.
I will hear the parties on the question of costs.