Levy v Mercedes-Benz Australia/Pacific Pty Ltd

[2024] NSWCATCD 9

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Levy v Mercedes-Benz Australia/Pacific Pty Ltd [2024] NSWCATCD 9

Hearing dates:

21 November 2023; final submissions 19 December 2023

Date of orders:

04 January 2024

Decision date:

04 January 2024

Jurisdiction:

Consumer and Commercial Division

Before:

P French, Senior Member

Decision:

(1) The application is dismissed.

(2) Any application for costs must be filed with the Tribunal and served on the other party by 19 January 2024. Any such application must be supported by submissions limited to not more than 4 A4 pages.

(3) Any reply to any application for costs must be filed with the Tribunal and served on the other party by 2 February 2024. Any reply must be limited to not more than 4 A4 pages.

(4) The Tribunal proposes to dispense with a hearing in relation to costs. If either party contends that a hearing on this issue is necessary they are to indicate this in their submissions and set out the reasons why they contend this is necessary.

Catchwords:

CONSUMER CLAIMS – Fair Trading Act 1987(NSW) – Australian Consumer Law (NSW) – consumer guarantees in relation to the supply of goods – remedy against a manufacturer of goods – contract – manufacturer’s warranty

Legislation Cited:

Australian Consumer Law (NSW), 54, 58, 59, 90, 271, 272, 273

Civil and Administrative Tribunal Act 2013 (NSW), s 38, 60

Fair Trading Act 1989 (NSW), ss 79E, 79G, 79N

Cases Cited:

Megerditchian v Kurmond Homes PL [2014] NSWCATAP 120

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Craig Levy (Applicant)

Mercedes-Benz Australia/Pacific Pty Ltd

Representation:

Craig Levy (self-represented)

Christopher Appleton, Product Analysis and Investigation (Respondent)

File Number(s):

2023/00383392

Publication restriction:

Nil

REASONS FOR DECISION

Introduction

1. This is an application Craig Levy (the consumer) for an order that would require Mercedes-Benz Australia/Pacific Pty Ltd (Mercedes-Benz) to “fix or replace” the steering wheel of his Mercedes-Benz GLA 250 Matic which he purchased from a retail motor dealer t/a Mercedez Benz Wollongong on 1 March 2021 at a total cost of $80,661.03 with inclusions. In his application form, the consumer contends that he is entitled to this order because Mercedez Benz had failed to repair the steering wheel “within the 5 year guarantee period, which, according to the Australian Consumer Law, should cover defective components”. This application was made to the Tribunal on 25 July 2023 (the application).

2. For the reasons set out following I have determined that the application must be dismissed because the applicant has not established any ground upon which the order he seeks may be made.

Procedural history

3. The application was first listed before the Tribunal, differently constituted, in a Group List for Conciliation and Hearing on 28 August 2023. The consumer attended that listing of the application in person. Mr Scott Sibley, Corporate Counsel, attended that listing of the application by AVL on behalf of Mercedes-Benz. In accordance with the Tribunal’s usual practice where both parties are present at the first listing of an application the Tribunal attempted to assist the parties to resolve the dispute cooperatively by Conciliation. Those efforts were not successful. Consequently, the application was adjourned to a Special Fixture Hearing and directions were given to the parties for the filing and exchange of the documentary evidence that they intended to rely on for the final hearing.

4. In the directions it made for the conduct of the application to hearing the Tribunal identified the issue for determination as follows:

1. The issue to be determined by the Tribunal is whether the steering wheel of the vehicle, the subject of the Application, is of acceptable quality and if not, should it be replaced.

   I consider direction 2 problematic for the reasons set out following.

   5. I note at this point that during and after conciliation at the first listing of the application Mercedes Benz made an offer of settlement to the consumer. The consumer considered that offer unacceptable and rejected it. He made a counteroffer. These offers are referred to at some length in the consumer’s submissions. He urges the Tribunal to take the asserted unreasonableness and reasonableness of these offers, respectively, into account in determining the outcome of these proceedings. However, I have had no regard to these offers. Offers made in conciliation are made on a confidential and without prejudice basis and are not evidence before the Tribunal. They may be relevant on an issue of costs, but that issue is not before me for determination at this stage.

Evidence and hearing

6. Both parties have complied with the Tribunal’s procedural directions for the filing and exchange of their evidence. The consumer’s bundle, filed on 6 September 2023 was marked Exhibit A1. I note that this bundle includes:

1. an Affidavit of Craig Levy sworn on 6 September 2023, and

2. an “expert report” given by Leon Alexander Levy from an entity trading as ‘Klingshield’ dated 4 September 2023.

7. Mercedes-Benz’ bundle, filed on 25 September 2023, was marked Exhibit R1. I note that this bundle includes an expert report given by Dr R T Casey of RT Casey Pty Ltd dated 20 September 2023.

8. Mr Levy attended the hearing in person and gave oral evidence under oath. He did not call any other witness. Mr Christopher Appleton, Product Analysis and Investigation, Mercedes-Benz, attended the hearing on its behalf and gave oral evidence under oath. Mercedez-Benz called Dr Casey to give evidence and he did so under a solemn promise to tell the truth. The parties had the opportunity to present their respective cases and to ask each other questions.

9. The Special Fixture Hearing was fully utilised by the hearing of evidence. At the conclusion of the evidence there was no time available to hear the parties submissions. In light of that I made directions for the post-hearing filing of submissions. Both parties have complied with those directions, and I have taken their submissions into consideration in the disposition of the application.

Material facts

10. The dispute concerns a Mercedes-Benz GLA 250 4matic (the motor vehicle) which the consumer purchased from Wollongong City Motors Pty Ltd t/a Mercedes-Benz Wollongong under a contract dated 1 March 2021. Mercedes-Benz is the designated manufacturer and Australian distributor of that motor vehicle. The contract price for the supply of the motor vehicle and accessories selected by the consumer was $80,661.03.

11. It is not apparent in the evidence when the consumer actually took possession of the motor vehicle. The contract stipulates an “estimated delivery date” of 30 June 2021, but the documentation related to the manufacturer’s warranty and the pre-delivery checklist in evidence suggests the motor vehicle was supplied on 28 May 2021. The date of supply has some significance in relation to Dr Casey’s evidence. He proceeds on the basis that the motor vehicle was supplied to the consumer 2 years and 5 months prior to him complaining about a steering wheel defect on 23 June 2023. However, that is not correct. That date was approximately 2 years from the date of supply.

12. Prior to its delivery to the consumer, on 28 May 2021, a representative of Mercedes-Benz Wollongong conducted a “pre-delivery inspection” of the motor vehicle completing a checklist report as they did so. Mercedes-Benz relies upon this report as demonstrating that no manufacturing defect was detected in the motor vehicle at that time. The report does not specifically refer to the steering wheel but does include as a check item “other defects” against which there is no entry. The consumer does not contend that there was any apparent (that is, visible) defect in the steering wheel at the date of supply.

13. At the time of purchase the consumer was employed by an employer who was a participant Member of the Mercedes-Benz Corporate Programme. That entitled the consumer to also join that programme and obtain certain benefits, including a discount purchase price. The consumer adverted to his participation in this program on several occasions in his evidence and submissions. However, I have perused the scope and terms and conditions of the program and cannot see that it has any bearing on the issues in dispute in this proceeding.

14. The motor vehicle was supplied to the consumer with a 5 year Mercedes-Benz warranty. A “5 Year Warranty Statement” in respect of that warranty is in Exhibit R1 at pages 5 to 7. The relevant terms of the warranty for the purposes of this application are as follows:

Warranty

…

If any defect arises and is presented to one of the Company’s authorised Mercedes-Benz Retailers within the applicable Warranty Period and upon examination the defect is determined to be caused by defective material or workmanship, the Company will repair or replace (at the Company’s election) the defective material or workmanship free of charge. In most cases, there will be no charge to you for expenses associated with making a claim under this Warranty. If there are circumstances that mean that you may need to pay a charge, the charge will be discussed with you in advance.

…

Your obligations

The warranty is given on the condition that:

• The Vehicle is at all times properly used and operated, and regularly serviced and maintained at the applicable intervals of time or distance specified by the Company, and in accordance with the procedures set out in the maintenance booklet or as otherwise specified by the Company using approved parts and lubricants; and

…

If the above obligations are not complied with, this may partially or entirely void the Vehicle’s Warranty.

Exclusions and Limitations

This Warranty does not cover damage, faults or defects arising out of:

• neglect, misuse, intentional damage, improper operation, improper maintenance, storage, transportation, accident or use of the Vehicle for a purpose for which it was not designed;

…

• natural, external and/or environmental influences including but not limited to climactic conditions, fallout, bird or animal droppings, road salt, plan and animal substances and pollution;

• improper care, improper cleaning methods, cleaning materials and spray waxes not recommended by the Company or use of non-approved fuels, lubricants or additives;

…

This Warranty does not Cover:

• … normal wear and tear …

15. The motor vehicle was also supplied to the consumer with an “Owners Manual” which was available in digital and hard copy form. Mercedes-Benz relies upon the following extract of the “Maintenance and care” section of that manual:

…

Steering wheel made of genuine leather or DINA-MICA

NOTE Damage caused by wrong cleaners

• Do not use solvent-based cleaning agents such as tar remover or wheel cleaner; neither should you use polishes or waxes. Otherwise you may damage the finish.

-   Clean with a damp cloth and 1% soapy water solution and then wipe with a dry cloth.

-   For heavy soiling: Use a cleaner recommended for Mercedes-Benz.

-   Leather care: Use a leather care agent that has been recommended for Mercedes-Benz.

-   Do not allow the leather to become too damp.

-   Do not use a microfibre cloth.

CD Leather is a natural product. It has natural surface properties, such as differences in structure, marks caused by growth and injury or subtle colour differences. These surface properties are characteristics of leather and not material faults. What’s more, leather is subject to a natural ageing process during which the surface properties change.

16. On 28 May 2021 the consumer purchased a 36 month service contract from Mercedes-Benz at a cost of $2,050.00.

17. At all material times for this dispute the consumer lived in Vaucluse. His local authorised Mercedes-Benz service centre was Sandersons Eastern Suburbs Pty Ltd trading as Sandersons Rushcutters Bay (Sandersons).

18. It is not in issue that the motor vehicle has been serviced Sandersons in 2022 and 2023 in accordance with Mercedes-Benz’s recommended service intervals.

19. On or about 7 December 2022 the motor vehicle’s Active Lane Assist became inoperative. Sandersons replaced a defective lens hood to restore its function under the Mercedes-Benz Warranty at no cost to the consumer. On 6 February 2023 the Active Lane Assist failed again. A defect was eventually diagnosed in the motor vehicle’s MFK CU software which was replaced under the Mercedes-Benz Warranty at no cost to the consumer. The motor vehicle was in Sandersons’ workshop and off the road for a two week period while that defect was diagnosed, and parts sourced to affect a repair. Although these defects are not related to the alleged defect in issue in these proceedings, the consumer relies on this background as indicating that the motor vehicle was not supplied to him free of manufacturing defects.

20. In or about June 2023 the consumer noticed a deterioration to the leather on the motor vehicle’s steering wheel. This deterioration was what the consumer considered to be excessive wear and fading to the top of the steering wheel where he places his hands. Dr Casey refers to it in his evidence as delamination of the Teflon coating of the leather cover of the steering wheel and the abrasion of the leather underneath.

21. On 29 June 2023 he sent an email to Sanderson’s Service Manager, Mr Simon Haworth, complaining about the condition of the leather alleging it was defective. Mr Haworth requested the consumer to bring the motor vehicle into Sanderson’s service centre so that the steering wheel could be inspected and photographed as a basis for referral to Mercedes-Benz under its Warranty, which he did.

22. On 20 July 2023, Mr Haworth notified the consumer by email that “Mercedes have come back to us and said it looks like outside influence or wear and tear and is not warrantable”. In other words, Mercedes-Benz indicated that it refused to repair or replace the steering wheel under the Warranty. The consumer is critical of Mercedes-Benz for the time it took to determine the outcome of his Warranty claim.

23. The consumer disputed this outcome in a series of emails to Mr Haworth which resulted in the dispute being escalated or transferred to Mercedes-Benz’s Customer Assistance Centre. It was then handled by Ms Cassandra Matthews, a Customer Relations Specialist.

24. The consumer discussed the dispute with Ms Matthews on or about 25 July 2023. During that discussion Ms Matthews affirmed Mercedes-Benz’s decision not to repair or repair the steering wheel under the Warranty and suggested to the consumer that the deterioration in the leather may be the result of hand lotion, cleaning products, or damage, which incensed him. In subsequent email communications with Ms Matthews, he indicated his intention to publicise what he considered to be Mercedes-Benz’ unsatisfactory customer service via social media and to challenge its decision in NCAT. He was specifically critical of what he considered to be Mercedes-Benz’s failure to provide him with an ‘independent report’ that set out the basis for its findings and decision.

25. Mercedes-Benz publishes a “Mercedes-Benz Steering Wheel Damage Catalogue” to assist its authorised service centres assess customer claims in relation to steering wheel faults. The relevant section of that Catalogue for present purposes is 4.1.3:

4.1.3   Separation of the coating (finish)

Description

This damage profile can occur across the entire surface of the steering wheel and the spokes. The separation of the finish/coating may occur in pinpoint locations or over a wide area. In the early stages, bulging or wrinkling can occur. The surface usually feels tacky. The fault profile occurs more frequently on steering wheels made of split leather.

Cause

This cause of surface damage on leather steering wheels can be initiated by pre-existing damage and this abrasion effect can then be aggravated by particularly aggressive sweat, skin cream, cosmetics or sunscreen products.

Cleaning with solvents – an ingredient of some cleaning agents – can also cause this damage profile.

Customer information

Hand creams and cosmetics can have a negative effect on the surface of the leather. Only the cleaning agents approved by Mercedes-Benz AG may be used.

Recommended Action

The age, mileage and general appearance of the vehicle should be considered when deciding whether the case is to be settled under the warranty and goodwill.

Mercedes-Benz relies upon this document to indicate why it identified skin creams, sunscreen products, sweat and the use of a microfibre cloth as possible causes of the damage to the steering wheel (as to which see following). The consumer relies on the “recommended action” section of this document. He contends that had Mercedes-Benz taken into account the age, mileage and general appearance of the motor vehicle in accordance with this guideline, it could not have reached the conclusion it did.

26. The consumer relies upon an “expert report” provided by Leon Alexander Levy which is provided on the letterhead of an entity trading as Klingshield. In that report the Mr Levy states that he is a “car tinting and sun protection expert” who is “equipped to determine the issue of car interior and car steering wheel damage”. He states that he read NCAT’s experts’ code of conduct and agrees to be bound by it. Mr Leon Levy was not offered as a witness at the hearing. Under cross-examination, the consumer agreed that Mr Leon Levy is his father.

27. Mr Leon Levy’s opinion is contained in the following paragraphs:

(c) the steering wheel which I have inspected … is worn at the top of the steering wheel, the damage to the steering wheel has definitely not been caused by the sun.

(d) If sun damage caused the steering wheel to deteriorate, then other parts of the vehicle such as the dashboards and seats would also be affected, however the dashboards and seats are in excellent condition with no visible damage.

(e) I cannot determine the exact root cause of the steering wheel damage.

(f) Klingshield has been in business for more than 5 decades and we rarely see a car with such low mileage with damage to the steering wheel, we believe the steering wheel is defective and should be replaced by the manufacturer or the manufacturer should prove how the steering wheel has been damaged.

28. Mercedes-Benz relies upon an expert report by Dr R T Casey of RT Casey Pty Ltd. Dr Casey summarises his expertise in section 3 of his report and attaches to the report a detailed Curriculum Vitae. In short summary, Dr Casey holds a PhD, Masters and bachelors degree in engineering in the field of Mechanical Engineering. He has held academic and research positions in that field. He has been a consultant engineer since 1993, which has included a significant component of work in automotive matters.

29. The salient elements of Dr Casey’s report are set out following (illustrations omitted):

1.0   Introduction

…

1.3   I was asked by MBAuP to address the following questions:

1. Whether the damage to the vehicle’s steering wheel is the result of a material or manufacturing defect that the manufacturer is liable for;

2. If the damage to the steering is not the result of a material or manufacturing defect, the cause of the damage.

3. Whether the steering wheel is of acceptable quality and if not, should it be replaced.

4. Your comments in response to Mr Levy’s expert report dated 03 September 2023.

…

5.0   My Opinions

…

Steering Wheel Complaint

…

5.7   I inspected the steering wheel’s cover in detail … including with my field magnifier (12x magnification). I found that from about the 11 o’clock position to the 2:30 position on the driver’s face of the steering wheel, the outer protective coating has delaminated and exposed the leather underneath… That is, the leather surrounding the steering wheel has an outer (Teflon) layer which is intended to protect the leather underneath. This type of protection is becoming the norm within the automotive industry for steering wheels, because steering wheels experience high levels of sweat, creams, hand sanitisers and other substances that can otherwise damage that leather.

5.8   The patch where the outer protective layer is debonding is very uniform in shape and only occurs in the one upper area. I checked the remainder of the steering wheel and everywhere else, the leather and its protective coating is fully intact. Furthermore, around the edge of that patch (which delineates delaminated coating from intact coating), I teased at the protective coating with a pointed probe (much like a toothpick) and I found that the protecting coating in that area was able to be teased away from the leather. However, everywhere else on the steering wheel, I was not able to tease the protective coating away from the leather.

[figure omitted]

5.9   The fact that there is only one patch which is uniform in shape is consistent with a patch that is growing. Systemic bonding issues are irregular in size, shape, location and severity. The fact that there is no other evidence of the protective coating debonding elsewhere on the steering wheel is consistent with something starting off the debonding process in just that one areas which has then grown to its current size. The fact that the protective coating can be teased away from the leather substrate around the edge of that patch means that the now open layers are susceptible to something that can penetrate the outer edge of that patch and weaken the protective coating causing it to delaminate further and for the patch to grow.

5.10   Overall, I conclude that the patch where the protective coating has de-bonded from the leather was a result of something starting off that process and then the process has grown since that time.

5.11   This begs the question of what started off that process. I looked in and around the patch for signs of what may have started the de-bonding of the protective coating but I could not identify a clear cause. Importantly, the substrate under the protective coating is also coming away from the leather … which means that the central region of that patch is leather. The course (sic, coarse), irregular texture of the leather is not amenable to identifying surface damage, unless it is very large scale. In lay terms, the protective coating can be scratched and torn in a small area and this level of damage may not show up on the course (sic, coarse) textured leather. Furthermore, the protective coating can be delaminated by foreign substances such as cleaners, excessive water, harsh soap, solvents, hand-creams, hand sanitiser, sunscreen and more. These may not be evident on the course (sic, coarse) textured leather below. Overall, I conclude that the cause of the protective coating de-bonding in the first place is inconclusive. I have read Mr Ley’s (expert) report … and agree with his point (e) in which he notes that he cannot determine the exact root cause.

[figure omitted]

5.12   Having said that, the fact that the protective coating is coming away around the edge of that patch is consistent with foreign substance weakening that protective coating around that edge by penetrating underneath that coating and weakening its bond. This can be things such as water (sweat), hand creams, hand sanitisers and more. Going further on this point, the patch is biased on the steering wheel to be closer to the rear than the front, and closer to the right-hand side of the cabin than the left. When I inspected the Vehicle, I found a smudge mark on the driver’s window consistent with the imprint of a forearm … This can be consistent with the driver resting their forearm on the window sill and reaching across to steer the vehicle with their right hand. This would place that hand in and around that offset patch position. This would allow the transfer of substances from that hand onto the steering wheel. Moreover, the smudge on the window is consistent with some substance transferring off the forearm onto the glass. That substance may also be on the hand.

[figure omitted]

5.13   As noted earlier, I attempted to tease at the protective coating away from that patch. In about the 8 o’clock position, as I teased at the protective coating, I noted a substantial build-up of some waxy/thick substance on the steering wheel… This became particularly evident when the surface was rubbed. When I looked closer with my field magnifier, I could see that this substance had filled the dimples in the outer protective coating in this area and made them appear white. It also gave the steering wheel a smoothed (worn) appearance. When I rubbed that material off with my thumb, the steering wheel coating appeared as new.

5.14   I read Mr Levy’s report… and agree with him that the patch is not a result of sun. The orientation of that patch is discordant with sunlight entering the cabin (through the windscreen), which would be from the front. To the contrary, the patch is biased to the rear of the steering wheel. The fact that the protective coating is coming away from the steering wheel in a pattern which spreads out from just one spot, means that there is no systemic failure of the bond. A systemic issue with the bond would result in other areas also delaminating, which is not the case. Furthermore, the fact that the first reported complaint in relation to the steering wheel came on 22 June 2023 … which is 2 years and 5 months after purchase also accords with a sound bond. In my opinion, these 3 points run counter to a manufacturing defect as being responsible.

6.0   Conclusions

6.1   Based on my inspection and testing, I conclude that the patch where the protective coating is coming away from the steering wheel is a result of something starting off this process then the process continuing and growing.

6.2   The reason for the process starting in the first place is inconclusive.

…

Contentions of the parties

Consumer

30. The consumer contends that the motor vehicle is a high-end make and model which he is entitled to expect to be durable. He contends that the motor vehicle has been meticulously cared for and serviced in accordance with Mercedes-Benz guidelines. He contends that it has been subject to limited use (approximately 10,000kms when the deterioration in the steering wheel was reported) and is garaged at home and at work such that it has limited exposure to the elements only while in transit. He contends that he has another motor vehicle, being a Toyota RAV, which is 21 years old, which is subject to the same care and maintenance, the steering wheel of which does not show any sign of deterioration. He contends that he has “never cleaned the steering wheel or any leather parts with any materials other than a microfibre cloth and light water spray”. He denies using hand cream “on a routine or daily basis”. He contends he is the only driver of the vehicle. He contends it is unreasonable for Mercedes-Benz to expect a consumer to read and absorb the entirety of the motor vehicle’s Owner’s Manual.

31. In his submissions the consumer contends that at the close of evidence the cause of the deterioration in the condition of the steering wheel remained “unclear”. He submits in this regard that Mercedes-Benz has failed to “conclusively prove” that the deterioration is not a manufacturing defect. He submits that the attribution of this damage to his use of hand cream and sunscreen, to sweat, and to his use of a microfibre cloth to clean, amounts to “grasping at straws”. He is critical of Mercedes-Benz’s engagement of Dr Casey as its expert, and of what he refers to as Mercedes-Benz’s failure to “disclose” to him the terms of its engagement with Dr Casey and their commercial relationship with him. He is critical of the fact that he “had no say” in Dr Casey’s engagement. He contends that Dr Casey admitted in cross-examination that he had no formal qualifications or experience with leather and contends that Dr Casey’s inability to determine conclusively the cause of the deterioration in the leather “must lean in [his] favour”. Additionally, he contends that Dr Casey conceded under cross examination that it was a “possibility” that the cause of the deterioration was a manufacturing defect. He is critical of what he considers Mercedes-Benz’s failure to assess his claim in accordance with its Steering Wheel Damage Catalogue by considering the age, mileage and general appearance of the motor vehicle.

Mercedes-Benz

32. Mercedes-Benz contends that the consumer has failed to discharge his onus of proving that the condition of the steering wheel results from any material or manufacturing defect for which it is liable. It submits that the steering wheel did not have any material or manufacturing defect at the time of its supply, and that the defect contended for by the consumer did not manifest until June 2023 which was more than 2 years after the motor vehicle’s supply. It contends that this is consistent with the steering wheel incurring some form of post supply damage that is unrelated to its manufacture. It contends that this conclusion is reinforced by the localised nature of the defect and the absence of any similar damage to the remainder of the steering wheel. In this respect it is contended that if the damage had resulted from a material or manufacturing defect the whole of the steering wheel would show systemic signs of deterioration.

33. Mercedes-Benz submits that Dr Casey identified a foreign substance residue on the steering wheel at the time of his inspection, that the consumer admitted under cross-examination to using sunscreen on occasion that could have transferred onto the steering wheel, and to cleaning the steering wheel with a microfibre cloth contrary to the guidance provided in the Owners Manual. It contends that each of these factors could have caused or exacerbated the deterioration in the condition of the steering wheel about which the consumer complains.

34. Mercedez-Benz submits that the consumer admitted in cross-examination that his “expert” is in fact his father. It is submitted that Mr Leon Levy has no particular expertise in relation to the issues in dispute, that he is an advocate for the consumer rather than an independent expert, and that in any event he was unable to identify any root cause of the deterioration in the condition of the steering wheel.

Jurisdiction

35. There is no issue that the Tribunal has jurisdiction to deal with this application as a consumer claim in accordance with the provisions of Part 6A of the FT Act. The consumer purports to rely upon the Australian Consumer Law (NSW) (ACL) as providing his cause of action and remedy. The ACL is made part of the law of NSW by operation of s 28 of the FT Act.

Applicable law

36. The consumer is a self-represented litigant. It is not to be expected that he would articulate his case with the precision of a person legally trained to do so. Nevertheless, a self-represented litigant must sufficiently articulate their claim so as to disclose the cause(s) of action on which their claim is based and put the other party on notice as to the case it has to meet.

37. At the beginning of the hearing, I expressed a concern to the consumer that his case on paper did not articulate with clarity the basis upon which he claimed to be entitled to the orders sought. I also expressed concern that to the extent that he relied upon the consumer guarantees in relation to the supply of goods contained in Chapter 2, Part 3.2 of the ACL the remedy he sought, which was repair or replacement of the steering wheel, was not available against the respondent as the manufacturer of the motor vehicle. In this respect I explained that under the ACL, the remedy available against a manufacturer of goods was limited to damages: Part 5.3, Division 2, ss 271 to 273 of the ACL. I further explained that if he sought repair or replacement of the steering wheel he would need to proceed against Mercedes-Benz Wollongong because it was the ‘supplier’ of the motor vehicle to him for the purposes of the ACL.

38. Following this explanation, I invited the consumer to consider his position, indicating that he had the option of seeking leave to amend his application and to join Mercedez-Benz Wollongong as a respondent to the application, both of which would necessitate an adjournment of the hearing. I also indicated to the consumer that it was open to him to withdraw his application as it presently stood which would be without prejudice to a future application against a different respondent if he elected to pursue the matter further. I note that I indicated these possibilities in a context where matters of this kind are ordinarily dealt with at the Group List stage but had not been in this case. In this respect I indicated to the parties my view that the Tribunal had to accept some responsibility for the misconceived way in which the consumer’s case presented because of procedural direction 2 made on 28 August 2023 which stated a cause of action that could not lead to the remedy the consumer sought.

39. After providing this information to the consumer, and hearing from Mr Appleton in relation to these issues, I invited him to consider his position. The consumer indicated that he wished to proceed with his application and that he relied on the terms of the manufacturer’s warranty, and ss 58 and 90 of the ACL as his causes of action.

40. Section 58 of the ACL contains a guarantee in relation to repairs and spare parts in the supply of goods. It provides:

1. Guarantee as to repairs and spare parts

(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 manufacturer of the goods will take reasonable action to ensure that facilities for the repair of the goods, and parts for the goods, are reasonably available for a reasonable period after the goods are supplied.

(2) This section does not apply if the manufacturer took reasonable action to ensure that the consumer would be given written notice, at or before the time when the consumer agrees to the supply of the goods, that:

(a) facilities for the repair of the goods would not be available or would not be available after a specified period; or

(b) parts for the goods would not be available or would not be available after a specified period.

41. The consumer’s reliance upon s 58 of the ACL as providing his cause of action is plainly misconceived. That guarantee is concerned with the post supply availability of spare parts and repair facilities for goods. There is no issue in this case that steering wheel parts and facilities for the repair of the steering wheel are available.

42. Section 90 of the ACL concerns unsolicited consumer agreements. It provides:

1. Waiver of rights

(1) The consumer under an unsolicited consumer agreement is not competent to waive any right conferred by this Division.

(2) The supplier under the unsolicited consumer agreement must not induce, or attempt to induce, the consumer to waive any right conferred by this Division.

Note: A pecuniary penalty may be imposed for a contravention of this sub-section.

43. The consumer’s reliance upon s 90 of the ACL as providing his cause of action is also plainly misconceived. Section 90 does not contain a cause of action, and this case has nothing to do with an unsolicited consumer agreement.

44. The Tribunal is impartial. While it has some responsibility to assist an unrepresented litigant to understand the applicable law and the legal process, it cannot be an advocate for that person and it therefore cannot state their case for them. Ultimately, parties must be responsible for the consequences of their own forensic decisions. To this extent the consumer is bound by his misconceived reliance on ss 58 and 90 of the ACL.

45. The Tribunal has an obligation under s 38(4) of the Civil and Administrative Tribunal Act 2013 to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms.

46. Having regard to that obligation I note that the consumer may have had maintainable causes of action in respect of the consumer guarantees contained in s 54 (guarantee as to acceptable quality in the supply of goods) and s 59 (guarantee as to express warranties) of the ACL. Those guarantees were specifically drawn to the consumer’s attention at the hearing outset, but he did not indicate any reliance upon those provisions when he elected to proceed with the hearing. In any event, even if he had elected to rely upon those provisions, he would still face the unsurmountable difficulty that the remedy he seeks is not available against the manufacturer of the motor vehicle.

47. For the foregoing reasons, the consumer has no maintainable claim against the manufacturer under the ACL.

48. What this leaves is the consumer’s reliance upon the terms of the Mercedes Benz Warranty. Although the consumer did not articulate that claim independently of his purported reliance upon the consumer guarantees, and although the first instance Tribunal did not articulate the claim in that way in direction 2 of the directions made on 28 August 2023, I am satisfied that this cause of action is sufficiently discernible from the consumer’s complaint and that Mercedes-Benz has had a reasonable opportunity to respond to a cause founded upon the Warranty and has done so.

49. A claim in relation to breach of that Warranty is maintainable against Mercedes-Benz as manufacturer of the motor vehicle under Part 6A of the FT Act as a consumer claim in contract. In this respect, a “consumer claim” is defined in s 79E as follows:

79E   Meaning of “Consumer Claim”

(1) For the purposes of this Part, a “consumer claim” means a claim by a consumer, for one or more of the following remedies, that arises from a supply of goods … by a supplier to the consumer (whether or not under a contract) …

…

(b)   the supply of specified services,

...

(2) For the avoidance of doubt, a reference in this Part to a consumer claim includes a reference to a claim by a consumer against a supplier (for example, a manufacturer or wholesaler) who is not the direct supplier of goods or services to the consumer if the claim arises from or in connection with the supply of those goods … by the direct supplier to the consumer.

50. With respect to s 79E(2) there can be no issue in this case that a claim in relation to the Mercedes-Benz Warranty arises from the direct supply of the motor vehicle to the consumer by Wollongong Mercedes-Benz. Pursuant to s 79N(b) in Part 6A the Tribunal therefore has power to grant the remedy sought by the applicant against the manufacturer:

79N   Orders in favour of claimant

In determining a consumer claim wholly or partly in favour of a claimant, the Tribunal may, subject to this Division, make any one or more of the following orders that it considers appropriate –

…

(b)   an order that requires a respondent to perform specified work in order to rectify a defect in goods … to which the claim relates,

…

Consideration

51. To determine the outcome of this application the Tribunal must pose and answer the following questions:

1. what was the scope of the Mercedes-Benz’ performance obligations under the Warranty?

2. has the consumer established a breach by Mercedes-Benz of those performance obligations with respect to the steering wheel?

3. If the answer to (b) is “yes”, is the consumer entitled to an order that will require Mercedes-Benz to repair or replace the steering wheel in accordance with the Warranty?

Scope of Mercedes-Benz’s performance obligations under the Warranty

52. The salient terms of the Mercedes-Benz Warranty are set out in full at paragraph 14 above. In short summary, Mercedes-Benz warrants that it will repair or replace at its election within the warranty period any defective component in the motor vehicle where the cause of the defect is defective material or workmanship. The warranty operates subject to various limitations and exclusions which include improper maintenance, care and cleaning methods, and natural environmental influences.

52. In order to establish that Mercedes-Benz has breached the warranty with respect to the steering wheel it thus falls to the consumer to prove on the balance of probabilities that the deterioration in the condition of the steering wheel results from defective material or workmanship rather than from any other cause.

53. I note that the consumer appears to approach the matter on the basis that it is Mercedes-Benz that bears the onus of proving that the deterioration in the condition of the steering wheel was not caused by a manufacturing defect, and in particular, that it was caused by his method of maintenance, care and cleaning or his use of skin creams. That is a misconception. Mercedes Benz may bear a practical onus of establishing other possible causes of the condition of the steering wheel, but it is the consumer who bears the formal onus of proving a manufacturing defect.

Has the consumer established a breach by Mercedes-Benz of those performance obligations with respect to the steering wheel?

55. It is for this reason that the consumer’s case must ultimately fail. His evidence, taken at its highest, does not establish the cause of the deterioration in the condition of the steering wheel. I do not consider Mr Leon Levy’s evidence that of an expert because he is the father of the consumer and therefore not independent of the dispute. However, treating that evidence as lay evidence and taking it at face value, it only establishes two things. First, that the damage was not caused by exposure of the steering wheel to sunlight, which is a proposition with which Mercedes-Benz agrees on the basis of Dr Casey’s evidence. Second, that the underlying or root cause of the damage can not be identified. That second conclusion is of little assistance to the consumer’s case having regard to the onus of proof that he bears.

56. The consumer attempts to deny all theories of possible causation advanced by Mercedes Benz. He denies ever causing or permitting accidental, negligent, or intentional damage to the steering wheel. He denies ever using hand cream, although he volunteered in cross-examination that he sometimes uses sunscreen cream, but never before or during his use of this motor vehicle. Nevertheless, Dr Casey found evidence of some dried substance on the steering wheel at the time of his inspection. He denied failing to maintain and clean the steering wheel in accordance with Mercedes-Benz’s Owners Manual but volunteered that he did clean with a microfibre cloth, contrary to what the Owners Manual recommends.

57. The consumer’s position is, in essence, that his disproof of every theory of causation advanced by Mercedes-Benz must lead to the conclusion that the only possible cause of the defect in the steering is a manufacturing defect. Assuming for the purposes of argument that all Mercedes-Benz’s possible theories of causation are negatived by the consumer’s case, such a proposition might have some force if the interval between the supply of the motor vehicle and the emergence of the defect was quite short. But in this case that interval is more than two years. That is a very substantial period of time. It is impossible to know with certainty every incident that has affected the steering wheel during this period. The underlying damage may have occurred as a result of an incident about which the consumer is completely unaware. But in any event, Mercedes-Benz’s theories of causation do not have to be proven by it. On the evidence set out above they are not disproven by the consumer, and they remain plausible contributors if not originators of the damage.

58. In summary, I make the following findings of fact in relation to the damage to the steering wheel:

1. on the date of supply (late May or June 2021) there was no visible damage to the steering wheel,

2. there is no evidence of any complaint by the consumer about the condition of the steering wheel before 23 June 2023, which is an at least two year period,

3. the damage to the steering wheel is localised to a section at the top of the steering wheel. That is consistent with that area sustaining some form of post supply injury. It is inconsistent with any systemic failure of the material of the steering wheel. If this material did have a systemic defect, there is a likelihood that the damage would be apparent elsewhere on the steering wheel.

59. The fact that the motor vehicle is two years old, has been subject to limited use, and is otherwise presents in well-cared for condition does not mean that the steering wheel cannot have suffered an unintentional post supply injury. The manufacturing defect present in the Active Lane Assist software is unrelated to the damage to the steering wheel, and that defect is isolated. It is not give rise to a presumption that the motor vehicle has other defective components.

60. The consumer is very critical of Mercedes-Benz’s reliance on Dr Casey as an expert, and of Dr Casey’s evidence. Three points must be made about this.

61. Dr Casey is an expert called by Mercedes-Benz to give evidence in its defence to the claim. While Dr Casey is an independent expert in the sense that he is not an advocate for Mercedes-Benz, he is not a joint expert, and Mercedes-Benz had no obligation to obtain the consumer’s consent before engaging him.

62. It is not apparent what the consumer intends to suggest when he adverts to a “commercial relationship” between Dr Casey and Mercedes-Benz. It is to be expected that a party will be obliged to pay an expert their professional fees. Dr Casey’s evidence cannot be impugned merely on that basis. Beyond that, it is for the consumer to squarely articulate any impropriety he contends for and to offer substantial evidence in proof of such a claim, bearing in mind that such a serious allegation must not be made lightly.

63. Dr Casey’s oral evidence was measured and carefully given. He accepted that the limits to his expertise about leather that was put to him by the consumer, and he also accepted that there was a “possibility” that the root cause of the damage to the steering wheel was a material defect. However, those concessions did not alter his overall opinion that there is an unlikelihood that the damage was caused by a material defect. Dr Casey’s willingness to engage with the propositions put to him by the consumer in an open and non-defensive enhanced his credibility as a witness. His answers did not erode the overall conclusions set out in his expert report.

64. For the reasons set out above, I am not satisfied that the consumer has established that the condition of the steering wheel results from a manufacturing defect which engages the operation of the Mercedes-Benz Warranty. His claim in contract must therefore fail on its merits and the application must be dismissed.

Costs

65. Mr Appelton indicated in the course of the hearing that Mercedes-Benz may apply for its costs of the proceedings in the event that the claim failed. I have therefore made directions for the filing of any costs application. Those directions should not be understood as an indication of the likely outcome of any such application. The costs regime that is applicable in this case is found in s 60 of the NCAT Act. In short summary, each party is to bear its own costs unless there are special circumstances which would justify an award of costs. “Special circumstances” are circumstances out of the ordinary, but do not need to be extraordinary or exceptional: Megerditchian v Kurmond Homes PL [2014] NSWCATAP 120. The relevant considerations include those set out in s 60(3). Any costs application should be framed in accordance with these principles.

Orders

66. For the foregoing reasons, I make the following orders:

1. The application is dismissed.

2. Any application for costs must be filed with the Tribunal and served on the other party by 19 January 2024. Any such application must be supported by submissions limited to not more than 4 A4 pages.

3. Any reply to any application for costs must be filed with the Tribunal and served on the other party by 2 February 2024. Any reply must be limited to not more than 4 A4 pages.

4. The Tribunal proposes to dispense with a hearing in relation to costs. If either party contends that a hearing on this issue is necessary they are to indicate this in their submissions and set out the reasons why they contend this is necessary.

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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: 13 August 2024