Kiehne v Graham Betts Motors Pty Ltd

[2017] NSWCATCD 60

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Kiehne v Graham Betts Motors Pty Ltd [2017] NSWCATCD 60

Hearing dates:

24 May 2017

Decision date:

17 July 2017

Jurisdiction:

Consumer and Commercial Division

Before:

P Harris, General Member

Decision:

1   The respondent is to repay the applicant the full purchase price, the sum of $9,440.00, within 14 days of the date of these orders.

2   The respondent is to collect the motor vehicle from the applicant’s property at a time convenient to both parties, arranged at no less than 48 hours advance notice. The respondent is to bear the cost of any expenses incurred in collecting the vehicle.

3   Both parties are required to negotiate the time at which the respondent will collect the vehicle, and the applicant is to provide access to the respondent to collect the vehicle at the arranged time.

4   At the time of collection the vehicle is to be in the condition in which it was purchased less fair wear and tear and mileage accumulated since the date of purchase. The vehicle is to be fully refuelled at the time of delivery at the applicant’s cost.

5   Each party to pay their own costs.

Catchwords:

Motor vehicles-Consumer Claim-Verbal representation as to characteristics –allegation of false description of vehicle as “turbo”-misleading and deceptive conduct-false and misleading representation-causation and reliance-supply or goods by description-right to rescind contract-costs.

Legislation Cited:

Competition and Consumer Act 2010 (Cth)
Australian Consumer Law (NSW)
Fair Trading Act 1987(NSW)
Civil and Administrative Tribunal Act 2013 (NSW);

Cases Cited:

Mishra v Prestige Auto Centre Pty Ltd & Khan Motorcar Co Pty Ltd [2015] NSWCATCD 106 at 35;
Patterson v Russell (Civil Claims) VCAT 30;
Paul Madsen v Agrison Pty Ltd [2014] NSWCATCD 79;
Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216;
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191;
Heartland Motors Pty Ltd v Piatow [2016] NSWCATAP 78 at 29;
Annand & Thompson Pty Ltd v Trade Practices Commission (1979) 40 FLR 165 at 176;
Kirkpatrick v Gresser (unreported, NSWSC, 13 May 1987
Calderbank v Calderbank (1975) 3 ALL ER 333.

Category:

Principal judgment

Parties:

Peter Kiehre (applicant)
Graham Betts Motors Pty Ltd CAN 001 605 303 t/as Graham Betts Holden (respondent)

Representation:

Mr Morgan Quaife for applicant
Mr Betts, director for the respondent

File Number(s):

MV 17/10975

Publication restriction:

Nil

Reasons for decision

Introduction

1. This matter was heard at Armidale on 24 May 2017. The parties had each previously been granted leave to be legally represented. The applicant appeared represented by Mr Quaife, Solicitor. The respondent was represented by Ms Betts, Director of the respondent company.

2. Directions had also previously been made that each of the parties lodge and provide to the other party any evidence on which a party intended to rely at the hearing.

3. Each of the parties lodged and provided a bundle of documents.

4. The decision was reserved.

Factual background

5. This dispute concerned the purchase of a Nissan Navara utility motor vehicle Registration number AHO 2JX (the vehicle) on 23 January 2017 by the applicant from the respondent, a licensed motor dealer, for the sum of $9,490.00. The central issue for determination was whether the respondent by its officer had made a representation by telephone to the applicant purchaser that the vehicle was a turbo diesel, as distinct from a non-turbo diesel, and if so what remedies were available to the applicant.   

Application

6. The application was lodged on 27 February 2017 and sought an order for the payment to the applicant of the sum of $9,490.00 being a refund of the purchase price. The stated grounds for the orders were: “Told by a phone call [talking] to the dealership contact person was Tara she said over the phone it was a turbo diesel. Went back to speak with Tara about the vehicle she claims that she didn’t say that…”

7. The applicant’s claim was denied by the respondent.

Jurisdiction

8. The Tribunal is a statutory body, established on 1 January 2014 by the Civil and Administrative Tribunal Act 2013 (NSW) section 7(2)(a) (‘NCAT Act’). The general jurisdiction of the Tribunal is drawn, other than from the NCAT Act and procedural rules, from enabling legislation which confers jurisdiction in relation to specific types of matters.

9. Under Schedule 4 Part 3 of the NCAT Act, at the date of the hearing the Tribunal’s Consumer and Commercial Division had jurisdiction in relation to matters arising under the Australian Consumer Law (ACL).

10. The ACL is Schedule 2 of the Competition and Consumer Act 2010 (Cth) and is incorporated into New South Wales law by section 28(1) of the Fair Trading Act 1987(NSW)

11. The jurisdiction of the Tribunal was not disputed by either party.

Onus and Standard of Proof

12. Section 38(2) of the Civil and Administrative Tribunal Act 2013 provides that:

“The Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice”.

13. Nevertheless, the Applicant in this matter bears the responsibility for persuading the Tribunal of the essential facts necessary to make out the relief sought. As was held in Kirkpatrick v Gresser (unreported, NSWSC, 13 May 1987, Foster J):

…Making due allowances for informalities of procedure I consider that the Tribunal must reach its decision upon the basis that the moving party bears the general onus of proof.

Legislation

14. No legislation was referred to in the application or in the respondent’s case. In submissions the applicant relied on the Australian Consumer Law (NSW), specifically sections 18, 29 and 56 as to remedies and the Civil and Administrative Tribunal Act 2013 (NSW) as to costs.

15. Section 18 provides:

18.  Misleading or deceptive conduct

(1)  A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

(2) Nothing in Part 3-1 (which is about unfair practices) limits by implication subsection (1).

16. Section 29 relevantly provides:

29.   False or misleading representations about goods or services

(1)  A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:

1. make a false or misleading representation that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use.

17. Section 56 provides:

56   Guarantee relating to the supply of goods by description

(1)  If:

(a)  a person supplies, in trade or commerce, goods by description to a consumer; and

(b)  the supply does not occur by way of sale by auction;

there is a guarantee that the goods correspond with the description.

(2)  A supply of goods is not prevented from being a supply by description only because, having been exposed for sale or hire, they are selected by the consumer.

(3)  If goods are supplied by description as well as by reference to a sample or demonstration model, the guarantees in this section and in section 57 both apply.

The Issues to be Determined

18. The applicant submitted, and the Tribunal agrees, that the issues to be determined were:

1. whether on the balance of probabilities, it is likely that a representation was made by the respondent describing the vehicle as a “3.2 litre turbo diesel”;

2. if the representation was made, whether the dealer, in trade or commerce, engaged in misleading or deceptive conduct, or conduct likely to mislead or deceive, in respect of the supply of the vehicle, within the meanings of sections 18 and 29 of the ACL;

3. if the representation was made, whether in making his decision to purchase the vehicle, the applicant relied on the representation;

4. whether a person in a similar position as the applicant, should have known or ought to have known that the vehicle was not a turbo;

5. whether the applicant is entitled to rescind the contract, return the vehicle, and be refunded the full contract price.

19. The applicant separately submitted that the applicant suffers from significant physical and intellectual disabilities including a learning disability and a hearing and speech impediment.

Agreed facts

20. It was agreed fact between the parties that:

1. the parties by the applicant by his carer and Ms Betts of the respondent had a pre-purchase telephone conversation on 23 January 2017. The content is disputed;

2. the respondent sent photos of the vehicle to the applicant by text on 23 January 2017;

3. the applicant and his carer attended the respondent’s premises on 23 January 2017;

4. the applicant and another employee of the respondent took the vehicle for a test drive at the time of that visit;

5. the parties sign a contract for: Sale Used Motor Vehicle on 23 January 2017;

6. none of the contractual documents signed by the applicant described the vehicle as a turbo;   

7. no further representations were alleged after the first telephone representation to the effect that the vehicle was a turbo;   

8. the motor vehicle is not a turbo but is a diesel;

9. the applicant took delivery on 23 January and sought to return the vehicle at a later date. The return was refused by the respondent;

10. the respondent was at all material times a licensed motor dealer under the Motor Dealers and Repairers Act 2013, is a corporation in the business of supplying goods (motor vehicles), and was engaged within the meaning of the ACL in trade or commerce for the supply of goods to the applicant by the sale of the subject motor vehicle; and

11. the applicant is a consumer within the meaning of the ACL.

The Applicant’s case

21. The applicant relied on the following documents:

1. affidavit of Peter Shane Kiehne sworn 29 April 2017;

2. affidavit of Elizabeth Carr sworn 29 April 2017; and

3. affidavit of Benjamin Kiehne sworn 29 April 2017;

22. The basis of the applicant’s case was that in the first telephone conversation with the respondent’s representative Ms Betts, he alleged she had described the vehicle as a turbo. In reliance on this representation, the applicant says that he had been misled and such reliance formed the basis of his decision to purchase the vehicle. He had purchased the vehicle believing it was a turbo. All matters in this case fall to be determined upon whether this misrepresentation is found to have occurred.

23. The applicant’s 3 affidavits were properly prepared and sworn. In essence the applicant says that he and his carer observed the vehicle in the respondent’s yard on 22 January 2017, and his carer telephoned Ms Betts the next day, with the phone on speaker and the applicant and his adult son present. During this phone call the applicant alleges Ms Betts described the vehicle as “turbo diesel”.

24. The same day the applicant with his carer drive to Armidale and to the respondent’s yard, the applicants goes for a test drive as a passenger, contractual documents are signed, purchase price is paid, and the respondent takes delivery of the vehicle.

25. The applicant’s evidence is variously corroborated by Ms Carr and his son in their affidavits.

26. On 24 January the applicant’s son says that he inspected the vehicle and discovered it not to be a turbo.

The Respondent’s case

27. The respondent relied on the following documents:

1. Contract of Sale Used Motor vehicle executed 23 January 2017;

2. Form 12, Cooling Off Period Notice;

3. Motor Dealer’s Notice dated 23 January 2017;

4. E-safety check report dated 23 January 2017;

5. Registration certificate of the motor vehicle;

6. Ten (10) photos of the vehicle sent by text - respondent to applicant 23 January 2017

7. Statement of Tara Betts-sales manager. Undated, unsigned, unsworn;

8. Statement of Sam Sharpe-salesperson. Undated, unsigned, unsworn;

9. Statement of Clarissa Jones- administration. Undated, unsigned, unsworn; and

10. Statement of Josh Givney-Service manager. Undated, unsigned, unsworn.    

28. The respondent denied that any statement was made during the initial telephone call, or at any other time which described the vehicle as a turbo. Further that it was evident from the photos sent to the applicant and the contractual and related documents that the vehicle was not a turbo, and that the respondent had made no statement or taken any action which could have misled the applicant. Whilst not articulated, I accept that this also extends to a denial of any breach of the ACL

29. Of the 4 statements relied on by the respondent, none were in sworn form, or signed, or dated. No verbal evidence was called from any of the respondent’s witnesses. Although the statements were admitted without objection save for one paragraph in the statement of Ms Jones, I give no weight to these statements which were tendered as a major part of the respondent’s evidence for the reason that they were not at the least signed and dated.

30. Particularly, the statement evidence of Ms Betts refuting the applicant’s allegation of the misrepresentation of the turbo, was poorly prepared in that it was unsworn, undated, and unsigned. As a potential counter to the applicant’s claim, it is therefore of no effect.

Consideration

31. As a preliminary matter for determination, the applicant submits that that applicant suffers from physical and intellectual disabilities, and that from the outset of negotiations the respondent had been made aware of the applicant’s disabilities and took advantage of these.

32. There is no evidence in the applicant’s material to support this assertion. There is no evidence at all of the respondent being alerted to any condition of the applicant in the applicant’s material. While I accept that Ms Carr is the carer for the applicant, there is no medical evidence tendered to distinguish between the extent of any physical as compared to intellectual impairment, and the applicant’s own evidence reflects that he can drive a car on a highway and was confident enough to test drive the vehicle as a passenger without the presence of his carer.

33. Further, his carer Ms Carr either did the negotiations on behalf of the applicant or was present during such negotiations and contract signing, except for the test drive. The applicant negotiated the price down himself. There is therefore no evidence of the extent of any disability except the applicant’s own affidavits, or that the respondent was informed of any disability, or took advantage of it.

34. Section 18 claim. By section 18 a person must not, in trade or commerce, engage in conduct that is misleading or deceptive, or likely to mislead or deceive. As was held in Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44 and followed in Mishra v Prestige Auto Centre Pty Ltd & Khan Motorcar Co Pty Ltd [2015] NSWCATCD 106 (Mishra), the conduct must lead, or be likely to lead, persons to whom it is directed into error, and there is no requirement for an intention to mislead or deceive. This imposes a statutory obligation of strict liability. An intention is not relevant (Mishra at para 29).

35. Regardless of intent, the action of Ms Betts even if innocent has misled or deceived and has caused the applicant to purchase the vehicle, thereby sustaining a loss. Although there is no mention of “turbo” in the contractual documents, I accept the applicant’s evidence as to the hasty manner in which the documents were signed as compared to the unsworn, unsigned, undated statement of the respondent’s employee Ms Jones who represented the respondent in the signing process.

36. Section 29 also imposes strict liability specifically in relation to the supply of goods or services. Again “the dealer’s intention is of no moment to the question of whether there was misleading or deceptive conduct” (Mishra at para 50).

37. Section 56. This section provides for a statutory guarantee that the goods correspond with the description. Goods include vehicles. The evidence of the applicant is that his carer described to Ms Betts:

“Peter is looking for a …turbo diesel ute. We saw one out the back, was it a turbo diesel. Answer: yes there is. It’s a Nissan Navara. Yes it’s a 3.2 litre turbo diesel”. This statement constituted a guarantee as to description within the meaning of section 56.

38. I accept that the description induced the applicant to attend the dealer and this description formed the basis of further discussions and the purchase.

Findings

39. There is no evidence that the respondent knew of any disabilities of the respondent or took advantage of them. To the extent that this assertion forms any part of the applicant’s claim, it is dismissed.   

40. The respondent by its officer Ms Betts, misrepresented the vehicle as a “turbo”. This was not correct and constituted misleading or deceptive conduct in breach of sect 18 ACL and was false and misleading in breach of sect 29 ACL.

41. The applicant relied on the misleading and deceptive conduct which induced him into error, whereby he suffered damage. The Tribunal does not find that a person in a similar position as the applicant, should have known or ought to have known that the vehicle was not a turbo;

42. In breach of sect 56 ACL, the vehicle did not correspond with the description given by Ms Betts. The respondent cannot rectify the breach and the goods depart in one or more significant respects from the description

43. The incorrect description induced the applicant to enter into the contract of purchase whereby he suffered damage.

Remedies

44. Section 236 ACL provides for damages for breach of, inter alia, sections 18 and 29.

236   Actions for damages

(1)  If:

(a)  a person (the claimant ) suffers loss or damage because of the conduct of another person; and

(b)  the conduct contravened a provision of Chapter 2 or 3;

the claimant may recover the amount of the loss or damage by action against that other person, or against any person involved in the contravention.

45. “The measure of damages for misleading and deceptive conduct is analogous to the tortious measure of damages; that is, to put the party seeking relief in the position he or she would have been in had the tort not been committed”. (Mishra at para 31)

46. As the respondent described that it did not do work to vehicles to add turbos, the correct measure of damages for a finding under clauses 18 and 29 ACL is a refund of the purchase price in return for the vehicle.

47. As to the breach of the guarantee in clause 56, if the failure to comply with the guarantee cannot be remedied or is a major failure, the consumer may: Sect 259 (3): 

(a) subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection.

48. A major failure is defined in sect 260 ACL as:

260   When a failure to comply with a guarantee is a major failure:

A failure to comply with a guarantee referred to in section 259(1)(b) that applies to a supply of goods is a major failure if:

(b)  the goods depart in one or more significant respects:             

1. if they were supplied by description--from that description.

49. In either case, the applicant is entitled to seek a refund of the purchase price.

Orders

50. The respondent is to repay the applicant the full purchase price, the sum of $9,440.00, within 14 days of the date of these orders.

51. The respondent is to collect the motor vehicle from the applicant’s property at a time convenient to both parties, arranged at no less than 48 hours advance notice. The respondent is to bear the cost of any expenses incurred in collecting the vehicle.

52. Both parties are required to negotiate the time at which the respondent will collect the vehicle, and the applicant is to provide access to the respondent to collect the vehicle at the arranged time.

53. At the time of collection the vehicle is to be in the condition in which it was purchased less fair wear and tear and mileage accumulated since the date of purchase. The vehicle is to be fully refuelled at the time of delivery at the applicant’s cost.

Costs

54. The applicant seeks a costs order and relies on the affidavit of Mr Quaife, Solicitor. The material includes a Calderbank offer dated 4 April 2017.

55. Section 60(1) of the Civil and Administrative Tribunal Act 2013 (NSW) provides that each party to proceedings is to pay the party’s own costs. Sub-section 60(2) then provides that the Tribunal may award costs but only if it is satisfied that there are special circumstances warranting an award of costs. Sub-section 60(3) then sets out matters to which the Tribunal may have regard, including any other relevant matter.

56. The Tribunal has considered the matters set out at sub-paragraph 60(3) and the case generally. This is a matter which is determined by whether or not one representation was made. The respondent self-represented.

57. The Tribunal does not find that there are special circumstances warranting an award of costs.

58. Each party to pay their own costs.

P Harris

General Member

Civil and Administrative Tribunal of NSW

17 July 2017

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 06 September 2017