Kozlowski v AMG Windsor Pty Ltd t/as Windsor Toyota

[2017] NSWCATCD 35

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	Kozlowski v AMG Windsor Pty Ltd t/as Windsor Toyota [2017] NSWCATCD 35
Hearing dates:	22 March 2017
Decision date:	10 May 2017
Jurisdiction:	Consumer and Commercial Division
Before:	John Levingston, General Member
Decision:	1 The application is dismissed. 2 No order as to costs.
Catchwords:	CONSUMER CLAIM – used motor vehicle – extended contractual warranty - statutory warranty – consumer guarantee - merchantable quality - no misleading or deceptive conduct – no misleading representation Consumer claim
Legislation Cited:	Australian Consumer Law (NSW) ss 18, 29, 54, 259, 260 Civil and Administrative Tribunal Act 2013 (NSW) ss 36, 60 Fair Trading Act 1987 (NSW) s 79N Motor Dealers and Repairers Act 2013 (NSW) ss 62, 63, 64, 72 and 73, Form 5
Cases Cited:	Accounting Systems 2000 (Developments)) Pty Ltd v CCH Aust Ltd (1993) 42 FCR 470 Aceti v Burhan Pty Ltd [2015] NSWCATAP 55 Amann Aviation v Commonwealth (1990) 22 FCR 526 Burton v Chad One Pty Ltd [2013] NSWDC 301 Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; 169 CLR 594 Contact Energy Ltd v Jones [2009] 2 NZLR 830 Courtney v Medtel Pty Ltd [2003] FCA 36 Evans Deakin Pty Ltd v Sebel Furniture Ltd [2003] FCA 171 Hadley v Baxendale (1854) 156 ER 145 Houghton v Arms [2006] HCA 59; 225 CLR 553 McEvoy v McEvoy [2012] NSWSC 1494 Medtel Pty Ltd v Courtney [2003] FCAFC 151; (2003) 130 FCR 182 Minister for Immigration v Pochi (1980) 4 ALD 139 Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; 206 CLR 323 Minister for Immigration and Multicultural Affairs v Singh [2000] FCA 845; 98 FCR 469 Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; 149 CLR 191 Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 Rasell v Cavalier Marketing (Australia) Pty Ltd [1991] 2 Qd R 323 Re Minister for Immigration and Multicultural Affairs; Ex parte Durairajasingham [2000] HCA 1; 74 ALJR 405 Taco Co of Aust Inc v Taco Bell Pty Ltd (1982) 2 TPR 48; 42 ALR 177 Victoria Laundry v Newman [1949] 2 KB 528
Category:	Principal judgment
Parties:	Applicants: Wlodzimierz Antoni Kozlowski Respondent: AMG Windsor Pty Ltd t/as Windsor Toyota
Representation:	Wlodzimierz Antoni Kozlowski in person Mr Fitzgerald for the respondent
File Number(s):	MV 16/45998
Publication restriction:	Nil

Reasons for DECiSION

Application

1. This is an application filed 18 October 2016 claiming $6,307.44 for economic loss arising from the purchase of a second hand motor vehicle, and claiming an extension of the warranty.

Jurisdiction

2. This Tribunal has jurisdiction under the Civil and Administrative Tribunal Act 2013 (NSW) (CATA) ss 28, 29 and Schedule 4 (Consumer and Commercial Division), Part 3 (Functions of Division), cl 3 (Functions allocated to Division); which by cl 3(1) includes the Australian Consumer Law (NSW) (ACL); Fair Trading Act 1987 (NSW) (FTA); and the Motor Dealers and Repairers Act 2013 (NSW) (MDARA). The Tribunal has power to make Orders under these Acts: see FTA s79N.

Contentions

3. The Applicant contends that the supplier (Windsor Toyota) is liable to him for his economic losses arising from breaches of its obligations under a seller’s extended warranty (the contractual warranty) and statutory warranties and guarantees. There is also a possible misrepresentation claim arising on the material facts set out below. The claims are set out in his schedule of claims (summarised) :

Item	Description	$amount
1	Reimburse 24 months service	970.44
2	Differential and gear oil charged but not supplied 15/12/16	385.00
3	Brake fluid charged but not supplied 15/12/16	85.00
4	Wheel balance	100.00
5	Replace shock absorbers	650.00
6	Replace disc rotors	840.00
7	Refund steering dampener	234.00
8	Replace clutch	2,340.00
9	Replace rubber boot for clutch	45.00
10	Legal representation to defend Penalty Infringement 22/9/16 (unregistered Vehicle)	2,750.00
11	Cost to unregistered vehicle	200.00
12	Tribunal filing fee	48.00
TOTAL	8,647.44

4. The respondent contends for no liability to the applicant and says:

1. There were no defects in the Vehicle at the time of the Agreement and supply;

2. The Vehicle claims are made outside the MDARA statutory warranty period and kms;

3. It was not given an opportunity to investigate and repair the “shudder”, and the wheel balance and alignment was not done by them and did not remedy that issue;

4. Shock absorbers are a serviceable item, and in any case they were not leaking but weeping which was consistent with their age;

5. Brake disk wheel rotors are a consumable item, the work was done elsewhere, and this is not covered by the Extended Plan;

6. The steering dampener work was also carried out by a third party and was not covered by the Extended Plan;

7. The clutch is a serviceable item which did not fail or create any issues, there was no evidence of excessive wear, and the work was carried out by a third party;

8. The applicant was personally responsible for transfer of and re-registration of the Vehicle.

5. The respondent also offered to settle the claims by payment of money which was disclosed in its submissions. However, this was not an open offer, and there are no costs consequences in these proceedings. Such an offer is part of the negotiation process and not relevant to, and not considered in this determination.

Facts

6. The material facts are set out in the following paragraphs. A decision maker must consider and find all the material or relevant facts on which the determination is made: McEvoy v McEvoy [2012] NSWSC 1494; see also Minister for Immigration v Pochi (1980) 4 ALD 139 at 159-160. Relevant or material facts are the facts essential to making the determination and which are the facts on which the decision maker based its decision: Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; 206 CLR 323 at 346 [136]. The test of materiality was discussed in Minister for Immigration and Multicultural Affairs v Singh [2000] FCA 845; 98 FCR 469 at 482 [56]-[57]; approved in Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; 206 CLR 323 at 346 [137]; but does not require “that all pieces of conflicting evidence relating to a material fact be dealt with … A fact is material if the decision in the practical circumstances of the particular case turns upon whether that fact exists.” This process involves identification of the factual elements in the relevant section of the statute which the applicant must prove to obtain a determination, including facts that are not controversial. Where there is a dispute the decision maker determines the disputed facts on the balance of probabilities, and the process involves weighing the evidence, and drawing conclusions or inferences: Ansett Transport Industries (Operations) Pty Ltd v Taylor (1987) 18 FCR 498. The reasons are not required to deal with or dispose of every fact that was not material to the determination: Re Minister for Immigration and Multicultural Affairs; Ex parte Durairajasingham [2000] HCA 1; 74 ALJR 405 at 417-418 per McHugh J. Whenever possible the reasons should also include references to the sources of the relevant evidence, usually in the exhibits or given in oral evidence: Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; 206 CLR 323. This level of detail is not always possible or practical in this Tribunal which has an element of informality with a guiding principle of “just, quick and cheap”: CATA s 36 (Guiding principle to be applied to practice and procedure); as there is more often than not, insufficient time to permit this, and although there is a sound recording of the proceedings there is no transcript to include a reference to the oral evidence of a witness.

7. The applicant is a consumer and wished to purchase a used motor vehicle and was particularly interested in buying a used Toyota Troop Carrier with a side access door which would provide easy access to his survey equipment.

8. The respondent carries on business in trade and commerce and is a licensed motor dealer which supplies used vehicles to consumers.

9. On or about 15 September 2015 the applicant saw the respondent’s advertisement on Gumtree for a used 2011 Toyota Landcruiser Troop Carrier with a side access door, with 33,746 kms (the Vehicle) offering:

1. a contractual warranty of 3 years or 175,000 kms; and stating

2. “You wont spend a cent on this quality 4x4.”

10. On 20 September 2015 the applicant and respondent made an agreement for the supply of the Vehicle for $48,490.00, see the Contract/ Tax Invoice for the Sale of a Pre-Owned Motor Vehicle, and the Receipt in Exhibit A. The Vehicle details are:

1. Vehicle: Toyota LC Military GXL 4.5L Turbo Diesel Manual Troop Carrier;

2. Date of manufacture (or compliance plate): 2/2011;

3. Odometer distance shown: 33,746;

4. Registration expiry: 13/9/16*

1. *(The Form 5 erroneously refers to 13/9/15 which should be a reference to 2016).

11. Relevantly, the Contract (exhibit A p26) has the following notation:

TOTAL PRICE BEFORE REG (Inc GST) $48,990.00

Stamp duty (customer to arrange)

12. There was also a collateral agreement for an extended warranty plan in Contract No. 4683133 which relevantly provides that the term of the Plan is to 20 December 2018 or 175,000 kms, and is provided at a cost of $249.00 (the Extended Plan). Relevantly, the Extended Plan includes a “Limit of Liability”, as follows:

The maximum amount which can be claimed for any one repair is limited to the value of $1,000.00 with a total limit of $3,000.00.

and there was also a “Special note for particular attention” which relevantly provides:

If your vehicle is still under Manufacturer’s Cover, you will enjoy the benefits of the extended Plan if the car is serviced by us, in accordance with the specifications set out in the owner’s manual, at prevailing rates, until that warranty expires. After that, you will enjoy our six-monthly/10,000 km (whichever occurs first) fixed price service plan…Services and Inspections elsewhere will not be approved or recognised…

...

3. Repairs will only be effected by our dealership, unless a breakdown occurs outside a 50km radius from the Dealership. Please refer to the Repair Procedure detailed in your Plan booklet.

13. The Extended Plan was not signed by the applicant but the document shows a charge of $249.00 for its supply.

14. On or about 30 September 2015 the respondent delivered the Vehicle to the applicant, and the parties signed a MDARA Form 5 Motor Dealer’s Notice (under the MDARA ss62, 63, 64, 72 and 73 which relevantly states:

The limitation period for the dealer guarantee for this vehicle is 3 months or 5,000kms driven after sale (whichever comes first). This vehicle is a second-hand motor vehicle(other than a motor cycle) driven for not more than 160,000 km, and not more than 10 years old, before sale. The dealer is required to repair or make good any defect on the vehicle at the time of sale or occurring within the limitation period so as to place the vehicle in a reasonable condition having regard to its age. This does not cover incidental or accidental damage to paintwork/upholstery. This guarantee cannot be waived by either party to the sale agreement.

Consumer acknowledgment………………………

and although the above acknowledgement was not separately signed, the applicant signed the foot of the Form 5:

I acknowledge that the information in this form is applicable to the vehicle I am purchasing.

15. The applicant did not immediately attend to payment of his stamp duty obligation on the transfer of the Vehicle, and there was no evidence that he otherwise informed the Roads and Maritime Services of the transfer of registration to him, or his address for later notices concerning re-registration. These obligations were apparently overlooked by him until the later described incident on 22 September 2016.

16. The Vehicle had been previously used as a country or rural area ambulance.

17. There is no evidence of any defects with the Vehicle in the 3 months after the applicant took delivery.

18. On 15 December 2015 the applicant had the Vehicle serviced by the respondent, see the Service Tax Invoice, exhibit A, which lists the work done including matters raised by the applicant for attention. The applicant did not mention the clutch issue or the shudder issue and these were not investigated by the respondent during the service.

19. On or about 30 December 2016 the MDARA statutory warranty expired.

20. Prior to 30 January 2016 the applicant noticed a “shudder” in the Vehicle steering operation. He did not report the “shudder” to the respondent and thought it might have been an alignment or wheel balance issue. He had the front wheels balanced by S & B The Right Workshop, at a cost of $22. This work did not remedy the “shudder’.

21. On or about 9 March 2016 the applicant requested the respondent replace the centre shock dampener under warranty, which was refused by the respondent as it was not covered by the Extended Plan.

22. About this time, the applicant requested a quote from the respondent to supply and fit the centre shock dampener for the Vehicle and by email of 16 March 2016 the respondent quoted $634.00.

23. On 10 March 2016 the applicant had the centre shock dampener replaced by S & B The Right Workshop, at a lesser cost of $234.00.

24. However, the shudder was not resolved by the aforesaid work, and in early May 2016 the applicant had the Vehicle inspected by Mr Paul Cox at Newbridge Automotive for the cause of a “shudder” in the Vehicle steering during operation. During an inspection of the Vehicle by Mr Cox whilst it was on a vehicle hoist: Exhibit A statement at [9]; he observed that there was fluid on the shock absorbers, which he opined should not be leaking fluid: see the photographs in exhibit A, Cox Statement and attachment A. The photographs: exhibit A; show the shock absorbers in an elongated or extended position whilst the Vehicle was on the hoist, and the respondent contends that this does not show leaking fluid but normal weeping at the top end of the piston which would not be visible when the Vehicle wheels are on the ground. There was a difference of opinion about the seriousness of the leaking versus weeping, and there was no evidence that the shock absorbers were in fact leaking fluid (a serious defect) as opposed to merely weeping (not serious). I find that the shock absorbers were weeping rather than leaking, the weeping being consistent with the operation of the piston and rod at the top end of the shock absorber and a minor amount of oil passing the seal at the top of the shock absorber. However, there was no evidence about whether or not such weeping over a period of time is likely to lessen the effectiveness of the shock absorber (though intuitively it might be assumed to do so), and there was no evidence of whether or not the shock absorbers had failed or where still within the manufacturer’s specifications.

25. Mr Cox opined that the differential oil and gear oil “seemed old and not recently changed” at [23]. I do not accept that opinion as a material fact as during cross examination he conceded that he could not make that assessment by merely looking at the oil.

26. In addition, Mr Cox gave evidence that the wheel disk brake rotors were worn and had crazing cracks which was unusual for the number of kms the Vehicle had travelled: statement at [11]. On 30 June 2016 the applicant had further work done to the Vehicle by Newbridge Automotive including amongst other things, replacement of the rotors on all wheels at a cost of $1,320.00, which with the other work totalled $4,450.00. There is no evidence that this was reported to the respondent, or that the respondent was given an opportunity to inspect and assess the rotors.

27. On 27 July 2016 the applicant had Newbridge Automotive supply and fit a clutch kit for $2,340.00 and an inspection boot cover for $45.00. Mr Cox at [25] said that clutch was worn, and the bearing were noisy and needed to be changed. There is no evidence that this was reported to the respondent, or that the respondent was given an opportunity to inspect and assess the clutch.

28. On 22 September 2016 the applicant was driving the Vehicle at St Ives when he was stopped by NSW Police who informed him that the Vehicle was unregistered, and he received a Penalty Notice for $650.00. He was not permitted to drive the Vehicle whilst unregistered.

29. On 22 September 2016 the applicant arranged for the Vehicle to be towed from St Ives to Newbridge Automotive at a cost of $200.00, as it was unregistered.

30. On 30 September 2016 the applicant arranged for transfer of the Vehicle registration to himself at a cost of $32 for the transfer, $1,470 for stamp duty and $112 for the transfer surcharge, totalling $1,614.00.

31. On or about 27 October 2016 the Applicant received a Tax Invoice for $2,993.00 from his solicitors Lou Baker and Associates for representation in contesting the charges for driving the unregistered Vehicle Penalty in Court and he was charged by, the being dated 27 October 2016. The description of the work done by the solicitor is brief and there is no evidence about the solicitor’s charge rates, or the time spent on the relevant work, which is not itemised.

32. On 8 December 2016 the applicant’s matter concerning the use of the Vehicle whilst unregistered came before the Local Court at Hornsby.

33. There was a separate claim for the cost of registering, insuring and using a replacement vehicle whilst the Vehicle was off the road.

Expert evidence

34. Mr Edward Piper prepared an expert report: see exhibit A bundle; concerning the shock absorbers, the disk rotors and the clutch and rubber boot. There was no challenge to his capacity to give expert evidence.

35. He opined that the shock absorbers should not need replacing at 50,223 kms. But he did not inspect the shock absorbers and his opinion was based on an assumed fact that the shock absorbers were “leaking oil”.

36. He also opined that the disc rotors should not need replacing at 50,223 kms and usually not before about 200,000 kms. This opinion did not consider the possibility of incidents which might arise from ambulance operation in country and rural settings, for example on unformed roads and creek crossings. Nor was there an opinion about the likely causes of the said crazing.

37. Further he opined that the clutch should not need replacing at 53,069 kms. This opinion also did not consider the likely causes of premature clutch wear.

38. I accept all of Mr Cox’s opinions that the wear was earlier than expected in the operational life of these items, though, as I say, there was no discussion about the probable causes of their failure.

39. The applicant’s case assumes that because these items suffered premature wear, the respondent was liable to him. However, whether or not the respondent is liable to the applicant is a separate question notwithstanding that the wear on all items was premature, as the applicant must establish liability under relevant legislation, in this matter either MDARA or ACL and FTA.

40. A further expert report as provided by Mr George Touma concerning construction of the sales contract. Mr Touma’s opinion is helpful, but ultimately, construction of the Agreement is a matter for the Tribunal. The relevant opinions concern the commencement of 12 months registration, and when passing of property occurs, amongst other things.

41. The date of commencement of the registration is not a matter about which the applicant can complain as this is a matter about which he had an obligation to inform himself, and more relevantly, to arrange payment of stamp duty and transfer of the registration himself, see the notation on the Contract that the application was to arrange the payment of stamp duty. The law requires the purchaser to do this within a prescribed time. The applicant did not do so, and the consequence was that he did not have the registration paper and he did not know that date the registration expired. In addition, the usual experience of vehicle owners in NSW is that the renewal papers are sent to the registered owner well before the registration expiry to enable inspections (as required for this Vehicle as it was more than 3 years old) payment of insurance, and re-registration. The applicant did nothing to protect his position and I do not accept that he can then claim against the respondent for the penalties and cost of legal representation arising from his own failure to comply with the relevant registration transfer law.

34. I determine that all the claims arising from the applicant driving an unregistered Vehicle fail.

The Tribunal’s approach

43. The parties were not legally represented. The Tribunal’s obligation is to look at the evidence generally and determine whether or not there is any legal basis raised which comes within jurisdiction: Aceti v Burhan Pty Ltd [2015] NSWCATAP 55 at [30]. This requires the Tribunal to do its best to identify the causes of action and defences. Adopting that approach, the Applicants’ causes of action arising on the material facts are discussed in the following paragraphs. In general terms the Applicants’ rights arise in contract and statute law, with possible claims under ACL ss 18, 29 and 54.

The law

Onus of proof

44. The Applicant carries the onus of proving his case.

45. There are two matters to be proved: Firstly, that the respondent has breached its contractual and statutory obligations; and second, that the Applicant has suffered a loss thereby.

Liability

46. The Applicants’ causes of action arising on the material facts are discussed in the following paragraphs. In general terms the Applicants’ rights arise in contract and statute law, and from the conduct of the respondent.

Contractual obligations – the Extended Plan

47. The respondent had obligations to the applicant under the law of contract set out in the Extended Plan, which were to expire on the earlier of three years or 175,000 kms. This raises the cause of action under FTA s79N. The claim is brought within the contractual time and kilometres travelled.

48. The applicant did not satisfy the condition for a claim under the Extended Plan as he did not have the Vehicle serviced by the respondent, and did not have any of the work carried out by them, but by a third party.

49. I determine that the claims under this head fail.

Statutory basis to claims

50. On the material facts there are a number of causes of action available under the extended contractual warranty, MDARA and also ACL ss 18, 29 and 54.

MDARA

51. Under MDARA the statutory warranty for a used car is the earlier of 5,000km or 3 months. The material facts show that the Vehicle was outside the period and kms for the statutory warranty to provide a remedy.

52. I determine that the applicant’s claim must fail under MDARA.

Australian Consumer Law

53. There are a number of causes of action which appear to arise from the material facts. I will deal firstly with the issues of merchantable quality which arise under ACL s 54, and second with the issue of the respondent’s conduct.

Guarantee as to acceptable quality

54. ACL s 54 (Guarantee as to acceptable quality) provides :

(1)  If:

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

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

there is a guarantee that the goods are of acceptable quality.

(2)  Goods are of acceptable quality if they are as:

(a)  fit for all the purposes for which goods of that kind are commonly supplied; and

(b)  acceptable in appearance and finish; and

(c)  free from defects; and

(d)  safe; and

(e)  durable;

as a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods), would regard as acceptable having regard to the matters in subsection (3).

(3)  The matters for the purposes of subsection (2) are:

(a)  the nature of the goods; and

(b)  the price of the goods (if relevant); and

(c)  any statements made about the goods on any packaging or label on the goods; and

(d)  any representation made about the goods by the supplier or manufacturer of the goods; and

(e)  any other relevant circumstances relating to the supply of the goods.

(4)  If:

(a)  goods supplied to a consumer are not of acceptable quality; and

(b)  the only reason or reasons why they are not of acceptable quality were specifically drawn to the consumer's attention before the consumer agreed to the supply;

the goods are taken to be of acceptable quality.

(5)  If:

(a)  goods are displayed for sale or hire; and

(b)  the goods would not be of acceptable quality if they were supplied to a consumer;

the reason or reasons why they are not of acceptable quality are taken, for the purposes of subsection (4), to have been specifically drawn to a consumer's attention if those reasons were disclosed on a written notice that was displayed with the goods and that was transparent.

(6)  Goods do not fail to be of acceptable quality if:

(a)  the consumer to whom they are supplied causes them to become of unacceptable quality, or fails to take reasonable steps to prevent them from becoming of unacceptable quality; and

(b)  they are damaged by abnormal use.

(7)  Goods do not fail to be of acceptable quality if:

(a)  the consumer acquiring the goods examines them before the consumer agrees to the supply of the goods; and

(b)  the examination ought reasonably to have revealed that the goods were not of acceptable quality.

55. ACL s 54 (4) to (7) do not arise for consideration in this matter.

56. ACL s 54 is to be considered in three parts: firstly, the quality elements in s54(2)(a) to (e); second, a reasonable consumer test applying an objective evaluation of the quality elements; and third, the factors in s54(3)(a) to (e): see Burton v Chad One Pty Ltd [2013] NSWDC 301 at [24] per Olsson DCJ.

57. Whether or not the goods are of “acceptable quality” is subject to the five qualifications in s 54(3(a) to (e): Burton v Chad One Pty Ltd [2013] NSWDC 301 at [30] – [32] per Olsson DCJ.

58. ACL s 54 requires ‘acceptable quality” to be assessed by reference to defects, price and fitness for purpose, the latter determined by reference to all purposes for which the goods are commonly supplied, so that it is not sufficient for the goods to be fit for only one of their many common purposes: Australian Knitting Mills Ltd v Grant [1933] HCA 35; (1933) 50 CLR 387; referred to in Contact Energy Ltd v Jones [2009] 2 NZLR 830 at [88]; see Burton v Chad One Pty Ltd [2013] NSWDC 301 at [39] and [40].

59. Acceptable quality has also been held to be composite and context-specific attribute: Burton v Chad One Pty Ltd [2013] NSWDC 301 at [41] citing Cehave NV v Bremer Handelsgesellschaft mbH (The Hansa Nord) [1976] QB 44 at p80 per Ormond LJ:

It is a composite quality comprising elements of description, purpose, condition and price. The relative significance of each of these elements will vary from case to case according to the nature of the goods in question and the characteristics of the market which exists for them. This may explain why the formulations of the test of merchantable quality vary so much from case to case.

60. ACL s 54(3) lists the matters to be considered in determining whether the goods are of an acceptable quality, meaning they are fit for the purposes for which they are commonly supplied, free from defects, of acceptable appearance and finish, safe and durable as a reasonable consumer fully acquainted with their condition would regard as acceptable: ACL s 54(2). The time for testing acceptable quality is the time when the goods are supplied: Medtel Pty Ltd v Courtney [2003] FCAFC 151; (2003) 130 FCR 182; and additional information now known but not known at the time the goods were supplied may be relevant and considered: see Medtel.

61. The relevant issue in this matter are not the defects in the Vehicle, which were not apparent at the time of delivery, nor did they become apparent within the MDARA warranty period. They became apparent within the Extended Plan period, but the respondent informed the applicant that the centre shock dampener was not within the Extended Plan warranty. As events turned out, neither the wheel balance, nor the replacement of the centre shock dampener remedied the “shudder’ in the steering during Vehicle operation. In any case, the wheel balance and alignment are matters which arise during day to day use of the Vehicle, and cannot be the responsibility of the respondent, and particularly not in the time frame that they arose after delivery of the Vehicle. I am not satisfied that the wheel balance and alignment, or centre shock dampener were defects which result on the Vehicle not being of acceptable quality for the purposes of s 54(2)(c).

62. The disc rotors and the clutch issues are defects because of a shortened operational life. These are to be considered in the context of whether or not the applicant would regard them as acceptable having regard to ACL s 54 (3): see Burton v Chad One Pty Ltd [2013] NSWDC 301 at [41] citing Contact Energy Ltd v Jones [2009] 2 NZLR 830 at [94]:

The hypothetical reasonable consumer is taken to be fully acquainted with the "state and condition" of the goods, including any hidden defects. Less obviously, he or she must also be taken to know the nature of the goods, all relevant circumstances of supply and any representations made about the goods by the manufacturer or supplier, so far as relevant. That is so because it is the hypothetical consumer who determines by reference to those considerations whether the goods are acceptable. The test is objective, but it is applied to the particular goods and circumstances.

and also see Australian Knitting Mills Ltd v Grant [1933] HCA 35; (1933) 50 CLR 387.

63. Relevantly for ACL s54(3): the nature of the Vehicle involved its use as an ambulance in country or rural operations which would put a reasonable consumer on notice that it was more likely than not that the Vehicle may have encountered a greater mechanical challenge in its operations circumstances compared to use in urban operations. A reasonable consumer would not expect this used Vehicle to be entirely free of defects as would be expected of a new vehicle. The applicant knew the Vehicle had been used as a country or rural ambulance. A reasonable consumer would take steps to conduct a pre-purchase inspection of the Vehicle in order to identify any issues such as arose in this matter, and to negotiate repairs or a price reduction in lieu thereof. The applicant did not arrange a pre-purchase inspection, and I find that he was prepared to purchase this Vehicle with any defects, as any defects not of concern to him. The applicant was motivated in his purchase decision by the existence of the side access door, which was the predominant matter influencing his purchase of this Vehicle, which is also a relevant consideration for ACL s 54(3)(e) . I find that he was prepared to accept the possibility of the defects which later emerged, at the price he paid, in order to get this Vehicle with the side door access feature,

64. That leaves ACL s 54(3)(d) which is also relevant to the discussion of ACL ss 18 and 29. The relevant material fact was the respondent’s statement on Gumtree seen by the applicant on 15 September 2015: “You wont spend a cent on this quality 4x4.” This is a reference to the possible future cost of repairs for potential mechanical defects.

Representations

65. ACL s 18 (Misleading or deceptive) relevantly prohibits:

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

66. ACL s 29 prohibits a range of misleading representations including relevantly:

(a) 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; or

(b) make a false or misleading representation that services are of a particular standard, quality, value or grade; or

…

67. The preconditions for application of ss 18 and 29 are satisfied as the respondent’s conduct was in trade or commerce involving a trading or commercial character: Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; 169 CLR 594; Houghton v Arms [2006] HCA 59; 225 CLR 553; and involved conduct: Accounting Systems 2000 (Developments)) Pty Ltd v CCH Aust Ltd (1993) 42 FCR 470.

68. ACL ss 18 and 29 require the conduct to induce or be likely to induce error: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; 149 CLR 191 at 198 per Gibbs J; but this requirement is not satisfied in this matter as the applicant was motivated to make the purchase because of the side access door feature. Whether or not he would not spend a cent is determined as a question of fact arising from the context of the evidence and relevant facts and circumstances. It would be unreasonable for the applicant to rely on the literal meaning of these words, as they had a contextual meaning: namely that the Vehicle was covered by the MDARA statutory warranty, and the contractual warranty in the Extended Plan, though subject to monetary limitations and a servicing precondition, with which the applicant did not comply. In other words, the respondent’s statement was true in context, and was not an inducement.

69. Further, the representation did not lead the applicant into error: Taco Co of Aust Inc v Taco Bell Pty Ltd (1982) 2 TPR 48; 42 ALR 177; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; 149 CLR 191 at 198 per Gibbs CJ. The applicant did not rely on this representation as his decision to purchase was based on the availability of the side door access feature. In addition, s 18 does not benefit the applicant as he failed to take reasonable care of his own interests as he did not commission a pre-purchase inspection to identify any defects. This was because, as I have said earlier, the decision to purchase the Vehicle was based on the availability of the side door access.

70. I am not satisfied that the respondent’s conduct was a breach of ss 18 or 29.

Remedies

71. In case I am wrong in my findings that the respondent is not liable, I will set out why I would find that the applicant would not be entitled to an order for payment of money. The applicant has engaged in conduct which excludes the availability of the several remedies available to a consumer which are often described as a sequence: repair, replace, and refund (the latter only if there is a major failure as defined in ACL s 260 (When a failure to comply with a guarantee is a major failure).

72. The material facts show that the applicant did not give the respondent an opportunity to repair the disc rotors or clutch. The respondent refused the request for replacement of the centre shock dampener, but the requirement for this work was not proved as it appears to have been unnecessary. The applicant did not give the respondent an opportunity to investigate the other matters or to assess whether or not the respondent was prepared to provide repairs or replacement of those parts. Instead, the applicant engaged third parties to supply and replace the parts.

73. In addition, the applicant’s claims for economic loss concerning the penalties and legal representation concerning use of the unregistered vehicle did not arising from the respondent’s conduct and were also not reasonably foreseeable: see ACL s 259; Hadley v Baxendale (1854) 156 ER 145; Victoria Laundry v Newman [1949] 2KB 528; and Amann Aviation v Commonwealth (1990) 22 FCR 526.

Other claims

74. There are no material facts or legal bases to support the claims for:

1. reimbursement of the 24 months service;

2. the allegations that the differential, gear oil and brake fluid were not supplied. The respondent’s tax invoice is a business record and shows that these were supplied and there is no evidence to the contrary;

3. the wheel balance and alignment were not proved to be necessary, and the applicant did not report these matters to the respondent nor give it an opportunity to do the work, even if the work was necessary;

4. replacement of the rubber boot for the clutch fails as the applicant has not proved the respondent was liable for the clutch repairs. The rubber boot is a part which is replaced when the clutch work is done.

75. I have earlier determined that the claims arising from the applicant’s failure to re-register the Vehicle fail.

76. The applicant’s claim for his Tribunal filing fee is dismissed as the usual rule is that parties pay their own costs: CATA s60; and he has failed in his claims.

Conclusion

77. The Order is made in the interests of justice as between the parties to determine their dispute.

J Levingston

General Member

Civil and Administrative Tribunal of NSW

10 May 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: 21 June 2017