Melbourne Roma Caravans & RV's v Cunningham

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST

S ECI 2020 01947

MELBOURNE ROMA CARAVANS & RV’S PTY LTD (ACN 116 626 138)	Applicant
v
PETER CUNNINGHAM	Respondent

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JUDGE:	Daly AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	7 June 2021
DATE OF JUDGMENT:	4 February 2022
CASE MAY BE CITED AS:	Melbourne Roma Caravans & RV’s v Cunningham
MEDIUM NEUTRAL CITATION:	[2022] VSC 25	First Revision: 14 February 2022 [119], [121]

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JUDICIAL REVIEW AND APPEALS – Application for leave to appeal from VCAT under s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) – Consumer Law – Purchase and supply of a caravan said to be overweight and prone to “sway”– Whether the Member erred in purportedly selecting inapplicable consumer guarantee - Whether the Member erred in applying the ‘major failure’ analysis pursuant to s 260 of the Australian Consumer Law – Boyd v Agrison Pty Ltd [2014] VMC 23, referred to and applied – Craig v South Australia (1995) 184 CLR 163, applied – Australian Consumer Law ss 54, 55, 56, 259 and 260 – Whether the Member denied the applicant procedural fairness by relying upon s 56 of the Australian Consumer Law for the purpose of determining whether there was a major failure pursuant to s 260 of the Australian Consumer Law – Whether the Member’s finding that a reasonable consumer would regard a risk of sway of the caravan as a major failure was unreasonable, illogical or irrational – Whether the Member’s orders were ultra vires in part – Section 263 of the Australian Consumer Law – Application for leave to appeal and appeal granted in part.

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr A Berger	Thomas Egan & Associates
For the Respondent	Mr A Ounapuu	Equity Legal Australia

HER HONOUR:

Background and introduction

The applicant, Melbourne Roma Caravan & RV’s Pty Ltd (‘Roma’) manufactures and sells caravans to the general public. The respondent, Mr Peter Cunningham, is a keen caravaner, and a disappointed customer of Roma. In 2018, Mr Cunningham purchased a Roma Elegance Slide-Out model caravan from Roma for $83,000. This model is at the premium end of the market. The purchase price included the cost of some modifications and extras negotiated between Mr Cunningham and Roma’s salesperson, Mr Lee Mason.

During two trips to regional Victoria after taking possession of the caravan in September 2018, Mr Cunningham was disappointed with the performance of the caravan, and Roma’s response to his complaints about the caravan. The main issues of concern to Mr Cunningham were the “sway” of the caravan when travelling at high speeds on the open road, and the carrying capacity of the caravan. In particular, the carrying capacity of the caravan was, in Mr Cunningham’s view, insufficient to lawfully and safely carry the goods, equipment, and water required to go “free camping” in national parks, where there is no onsite power and water. Later, Mr Cunningham discovered that the length of the caravan exceeded the limit specified by the relevant regulations. He provided to Roma an expert report prepared by an engineer which concluded that the caravan was not safe or fit for purpose.

Roma accepts that the caravan is too long, but contends that this is an issue which could be easily rectified by relocating the spare wheels, which would also reduce the risk of “sway” by altering the weight distribution within the caravan. Roma also accepts that the weight of the caravan, as modified, exceeds the trailer mass or weight (‘TARE’) recorded on the Vehicle Identification Number plate (‘VIN plate’) by a significant amount, but contends that the residual carrying capacity of the caravan (approximately 160 kg) is sufficient for Mr Cunningham’s purposes. Roma says that “sway” is an inherent risk associated with towing a caravan, particularly a heavy caravan, and that the risk of sway can be mitigated by proper loading of the caravan, and by travelling at speeds below 80 km/h.

In 2019, Mr Cunningham issued a proceeding in the Victorian Civil and Administrative Tribunal (‘VCAT’) seeking a refund of the purchase price of the caravan under s 264(3)(a) of the Australian Consumer Law (‘ACL’), claiming that Roma supplied the caravan to him in breach of s 54 of the ACL.

The reasons provided by the VCAT member (‘Member’) who heard the proceeding in March 2020 (‘reasons’) set out the factual background to the VCAT proceeding, as follows:[1]

The applicant attended the respondent’s showroom at 1870B Hume Highway and dealt with salesperson, Lee Mason. He chose the respondent due to its advertised 90-year experience. He visited the showroom in the vehicle (Mazda BH50) he had bought to tow his chosen caravan Elegance Roma SlideOut (the caravan). He informed Lee Mason of its towing capacity of 3500 kg. Some “extras” were included in the model and others (satellite dish) were negotiated by the applicant. The applicant discussed his travel plans, including around Australia, with Lee Mason. Lee Mason recommended two spare tyres. Because the applicant had an injured shoulder the tyres had to be accessible, to which Lee Mason agreed. A grey water tank is required if visiting a National Park.
The applicant collected the caravan on or about 5 September 2018 from the respondent’s manufacturing premises at 17 Randor Street Campbellfield. He was given the respondent’s weighbridge document dated 5 September 2018 which stated Tare Mass 2700 kg and Payload 800 kg. These weights corresponded to what he understood from his negotiations with Lee Mason to be the weight of the caravan and the amount of luggage and water he could carry in the caravan given his vehicle’s towing capacity of 3500 kg. The applicant was not warned by Lee Mason that negotiated extras would increase weight beyond 2700 kg.[2]

[1]In the reasons, “applicant” refers to Mr Cunningham and “respondent” refers to Roma. In regard to Mr Cunningham’s interactions with Mr Mason regarding his requirements, the Member preferred the evidence of Mr Cunningham. No issue is taken with the Member’s factual findings in that regard, and a ground of appeal based upon the Member’s failure to draw a Jones v Dunkel inference from the failure of Mr Cunningham to call his wife to give evidence of the conversations between him and Mr Mason was not pressed by Roma on appeal.

[2]The question of what Mr Mason told Mr Cunningham about the impact of the modifications and extras upon the weight of the caravan was in dispute at the hearing in VCAT, but not in this application for leave to appeal.

The Member then went on to record Mr Cunningham’s report of what occurred during his trips with the caravan, as follows:

The applicant’s first trip was to Anglesea where the applicant experienced what he described as wobble and sway. On arrival in Anglesea he reported his concerns by telephone to Tony at Roma who put him onto Arthur, the respondent’s supervisor. Arthur’s response was that the applicant’s vehicle was the cause of the problems. On returning home, the applicant had his vehicle mechanically checked and no fault was found.
The applicant looked on the internet to learn about sway. He returned to the respondent and again reported the sway. The sway was denied and not investigated. The respondent assured the applicant that they built hundreds of caravans like the applicant’s and that there was nothing wrong with it. The freshwater tank was relocated on this occasion.
The applicant’s next trip was to Wodonga when again the caravan experienced sway at speeds of 80-85 kph. This was reported immediately by telephone to the respondent. The applicant returned to the respondent’s premises for warranty work and to have the sway investigated. The caravan was not retained by the respondent to investigate the sway. The respondent repeated that the cause of the sway was not due to the caravan.

In his further amended points of claim in the VCAT proceeding, Mr Cunningham pleaded the factual matters referred to in the passages of the reasons extracted above, and made the following claims against Roma:

(a) the caravan supplied by Roma breached s 54 of the ACL, because it was not fit for all of the purposes for which the caravan was supplied, was not free from defects, and was not safe; and

(b) the matters which were said to have breached s 54 of the ACL were “major failures” within the meaning of s 260 of the ACL.

Mr Cunningham went on to plead that he had suffered loss and damage as a result of Roma’s breach of the ACL, that he had undertaken the necessary steps to entitle him to a refund under s 263 of the ACL, and that Roma’s proposed rectification strategy (the relocation of the spare wheels) would constitute a further breach of contract, given that the spare wheels were originally positioned to accommodate Mr Cunningham’s physical limitations.

Mr Cunningham sought the following orders in the VCAT proceeding:

A.A declaration that the Respondent failed to comply with the guarantees referred to in section 54 of the Australian Consumer Law, and that such failure constitutes a major failure as defined in section 260 of the Act.
B.Further and in the alternative, a declaration that the Respondent breached the terms of the contract entered into by the parties.
C.An order requiring the Respondent to refund the amount paid by the Applicant for the caravan and an amount equal to the value of the other consideration supplied by the Applicant for the caravan.
D.Further or alternatively, damages pursuant to section 236 and/or section 259(4) of the Australian Consumer Law and/or section 184 of the Australian Consumer Law and Fair Trading Act 2012 (Vic).

Mr Cunningham’s claim was vigorously defended by Roma, and a two-day hearing was held before the Member in March 2020. During the hearing, the Member heard evidence from Mr Cunningham and two experts retained by him, along with Mr Mason, and an expert retained by Roma. The parties filed reasonably detailed written submissions after the hearing, in lieu of making oral submissions at the hearing.

On 1 April 2020 the Member made the following orders:

1.The respondent is to pay the applicant the following sum on or before 1 May 2020:
a. a refund of $83,000; and
b. interest in the sum of $9,277.80.
2.The respondent collect from the applicant’s residence, within 14 days of the date of payment, the caravan with the VIN 6T9T21V86J0AKX022.
3.That following the collection of the caravan, the applicant do all things necessary to cancel the registration of the caravan and the respondent return the number plates to VicRoads.
4.If the respondent fails to satisfy the monetary order as provided in Order 1, the applicant shall retain the ownership of the caravan and may dispose of it at his discretion while being able to enforce the monetary order.
5.Within 30 days of the date of this order the applicant and respondent file written submissions of no more than 2 pages in length regarding the question of the costs of this proceeding.

In April 2020 Roma filed an application for leave to appeal the Member’s orders pursuant to s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (‘VCAT Act’).

The evidence before VCAT

In addition to the evidence of Mr Cunningham summarised by the Member in the passages of the reasons extracted at paragraphs 5 and 6 above, Mr Cunningham relied upon the evidence of two expert engineers, Mr Terrence McNicol and Mr Edward van den Berg.

The Member summarised Mr McNicol’s evidence as follows:

Terrence McNicol added to his report dated 20 December 2018. He confirmed that he had driven in the applicant’s vehicle towing the caravan on the Hume Highway. The weather and road conditions were good. The caravan performed satisfactorily up to 70 kph but swayed tremendously at 80-90 kph. The sway was not controlled by the sway control. The caravan felt unsafe at 90 kph. The caravan was emptied of possessions and both fresh and grey water and weighed at a public weighbridge where 3560 kg ,was twice recorded. This was 60 kg over the maximum aggregated trailer weight. In other words, the payload was negative 60 kg, not 800 kg.
In addition, Terrence Mc Nicol found a discrepancy of 240 mm in the position of the wheel box.
Terrence Mc Nicol concluded that the caravan was not safe for road use. It did not conform with the VIN plate. A manufacturer’s last job was to weigh the caravan in-house and complete the VIN plate. It was not reasonable to restrict the speed of towing to 85 kph. Given reasonable road conditions, a caravan should be able to be towed at 95-100 kph. Relocating the spare tyres would remedy the chassis discrepancy but would not address the overweight. The Caravan Industry Association regarded the accuracy of the VIN as a safety critical item. No proposals of the respondent would make the caravan lighter.

The Member summarised Mr van den Berg’s evidence as follows:

The applicant commissioned a report from BTT Engineering Consulting. Edward van den Berg appeared as an expert witness. The report dated 30 January 2019 concluded:
After inspecting the caravan on site and receiving supporting documentation from the client it is our belief that the caravan is both overweight and also overlength at the rear, with the manufacturer being responsible for both of these issues. The caravan exceeds legal limits and component ratings at tare mass. As it has been plated with a load carrying capacity of 800 kg it is our belief that the caravan is not fit for purpose as it is impossible to safely and legally achieve what has been promised to the customer via the compliance plate without having to replace a significant portion of the caravan’s structural components.

Edward van den Berg neither weighed the caravan nor towed it. He referred to the Caravan Industry Association of Australia Owner’s Handbook at p.57 which states:
New caravan owners must be advised of the Tare Mass of their vehicle along with the Ball Loading at Tare Mass Condition ...
RVMAP requires a minimum design load-carrying capacity of ... 400 kg for tandem axle units.

Roma relied upon the evidence of its salesperson, Mr Lee Mason. The Member summarised Mr Mason’s evidence, as follows:

Lee Mason appeared for the respondent. He confirmed that he had dealt with the applicant at the respondent’s showroom on 8-10 occasions. He was aware what towing vehicle was to be used. He had 14 years’ experience in selling caravans. He was aware that the applicant had a crook shoulder - he had come into the yard with a sling. He was aware that the applicant planned to free camp in National Parks and therefore needed a grey water tank.
Lee Mason stated that he informed the applicant that the slide-out would add 200 kg to the 2700 kg weight of the caravan. He confirmed that Roma is a member of RVMAP, has the association’s seal of approval and adheres to the Code of Practice. Safety was more important to him than making a sale.
Lee Mason was asked about a document dated 19 July 2019 headed Appendix C and confirmed that the Slide Out Extension, Flat Floor, 1 Extra Spare Wheel and l Grey Water Tank (total weight 600 kg) were included in the contract with the applicant and therefore should not have been described to Linda Hitch as extras.

Roma also relied upon the expert evidence of Linda Hitch, a Certified VicRoads engineer. The Member summarised Ms Hitch’s evidence as follows:

Linda Hitch provided three requests [sic] to the respondent dated 6 August 2019, 23 August 2019 and 29 September 2019. She appeared to provide evidence. She first inspected the caravan at the applicant’s home. Linda Hitch stated that she was one of 50 Certified VicRoads engineers. She referred to Australia Design Rules (for vehicles including caravans) and Vehicle Standards Bulletin (VSB). Caravan regulations are governed by VSB14. She confirmed the overhang dimension (240 mm) but stated that it could be rectified by relocating the rear spare tyres underneath the caravan.
The caravan was driven (at 80 kph) to the public weighbridge at 205 Northbourne Road Campbellfield where the Tare was recorded at 3360 kg. She concluded that the Tare mass shown on the compliance (VIN) plate was incorrect. She stated that the caravan could be emptied, re-weighed and replated.
Linda Hitch explained that this compliance plate was based on the original model of a particular caravan. However, she did not agree that this was best practice or compliance with the Caravan Manufacturers Association (and her own) recommendations. If a driver were pulled over by police and found to be overweight (even after portable load and water were removed) the driver would be fined. On her calculations the weight of luggage and water that could be added to the caravan was limited to 140-160 kg.

The parties’ submissions to VCAT

Given that one of Roma’s grounds of review is based upon its contention that the Member denied Roma procedural fairness by failing to alert the parties of her apparent intention to rely upon s 56 of the ACL, it is necessary to canvass the submissions made by the parties to the Member in more detail than would usually be required in an appeal on a question of law.

Mr Cunningham submitted that he was entitled to a refund of the purchase price of the caravan on the basis of the following matters:

(a) in breach of s 54 of the ACL, Roma supplied a caravan that was not fit for all purposes for which goods of that kinds are commonly supplied, and supplied a caravan not free from defects and/or which was unsafe, in that the caravan was too long, too heavy and swayed at speeds of 85 km/h or greater;

(b) further or alternatively, in breach of s 55 of the ACL, Roma supplied a caravan which could not be used for the disclosed purpose of free camping, in that once loaded with the required water, fuel, food and personal effects, the caravan would be too heavy;

(c) these failures were “major failures” within the meaning of s 260 of the ACL in that the goods would not have been acquired by a reasonable consumer who was fully acquainted with the nature and extent of the failures, the caravan departed from the description by which it was supplied, and/or the caravan was unsafe; and

(d) the Member should reject Roma’s contention that the caravan can still be used, provided the spare wheels are relocated, the caravan is replated, the caravan is towed at or below 80 km/h and any payload should be no greater than 160 kg, as those restrictions fundamentally alter the nature of the caravan and the bargain between him and Roma.

In its submissions to VCAT, Roma submitted, in summary, as follows:

(a) the central question in the VCAT proceeding was whether the caravan, including its optional extras, is of acceptable quality within the meaning of s 54(2) of the ACL, having regard to a reduced payload, and any sway experienced in towing it at speeds above 85 km/h;

(b) whether goods are of acceptable quality is evaluated objectively through the reasonable consumer test having regard to the matters set out in ss 54(2) and (3) of the ACL;

(c) the starting point of the reasonable consumer test is to take a hypothetical reasonable consumer in the position of Mr Cunningham at the time of the supply of the caravan, but having the benefit of the knowledge as at the time of the hearing, being that the true weight of the caravan was 3,340 kg, that there was a resultant maximum payload of 160 kg, and that there is always a possibility of sway when towing a caravan, and consider whether such a consumer would regard this as acceptable;

(d) to evaluate whether the caravan was of an acceptable quality, VCAT must have regard to the factors listed in s 54(3) of the ACL, including:

(i) the nature of the particular model of the caravan being at the luxury (and therefore heavier) end of the range of caravans;

(ii) the conversations between Mr Cunningham and Mr Mason regarding the weight of the base model of the caravan;

(iii) that, at the time, the “slide-out” was an option on the Roma Elegance model, and the caravan had other additional enhancements and extras built into it in accordance with Mr Cunningham’s requests;

(iv) the stated TARE on the VIN plate;

(v) Mr Cunningham was trading in a caravan he had used for 15 years, and was a seasoned caravaner; and

(vi) the weight and towing capacity of Mr Cunningham’s vehicle;

(e) Mr Mason’s evidence was that he told Mr Cunningham that the base weight of the Elegance model was 2,700 kg, and that the addition of the slideout, flat floor, extra spare wheel and grey water tank would add to the weight of the caravan;

(f) the essential purpose for which a caravan is commonly supplied is to be a towable home for a holiday with associated purposes, including, relevantly, storage of items and water while being towed;

(g) loading a caravan with water is unnecessary if the destination is a caravan park. The caravan can therefore be towed with approximately 160 kg of additional goods without exceeding the 3,500 kg threshold (if the water tanks are empty), and therefore the caravan is fit for purpose;

(h) the evidence established that Mr Cunningham told Mr Mason that he intended to take the caravan free camping and, accordingly, that was a disclosed purpose for the purposes of s 55 of the ACL. Roma conceded that the 160 kg payload would restrict Mr Cunningham to filling the water tanks to 160 litres of their 190 litre capacity, but that this does not prevent free camping, as the caravan and the towing vehicle can be loaded with water and belongings in such a way to keep the caravan below the 3,500 kg towing limit of his vehicle;

(i) Mr Cunningham’s allegations that the caravan was unsafe and defective are founded on the argument that, because the caravan sways, it is unsafe and defective. That submission is fallacious, and in any event the question before the Member required consideration of what a reasonable consumer would regard as acceptable;

(j) in particular, a reasonable consumer must accept that any travel on a highway carries with it a probability of danger, that towing anything carries with it a probability of sway, and that the risk of sway necessarily arises because of the increased mass and the nature of coupling a trailer to a vehicle. Mr Cunningham’s evidence of his experience of sway must be considered in the context of him having towed the caravan with a weight of over 3,500 kg;

(k) to suggest that the caravan should only be driven at or below 80 km/h is not a concession that the caravan is unsafe or defective, but simply reflects the reality faced when towing a large and heavy caravan. All caravans sway, the cause of which is multifactorial, and moderating the speed at which a caravan is towed is a reasonable action in mitigation. The causes of sway are well known and understood, and can be mitigated against, and there is no evidence to found a finding that there was an inherent defect particular to the caravan;

(l) to the extent that the length of the caravan and the TARE mass recorded on the VIN plate are non-major failures for the purposes of ss 259 and 260 of the ACL, each are rectifiable so as to preclude Mr Cunningham from obtaining a refund; and

(m) Mr Cunningham unreasonably rejected Roma’s proposal to rectify the caravan by replacing the VIN plate and relocating the spare wheels.

The decision under review

As noted earlier, the major factual dispute between the parties before the Member concerned what was said during the conversations between Mr Cunningham and Mr Mason prior to Mr Cunningham ordering the caravan. The Member generally preferred Mr Cunningham’s version of events as to what he told Mr Mason about his requirements, and her factual findings in that regard were not challenged in this appeal. In particular, the Member found that Mr Mason (on behalf of Roma) failed to warn Mr Cunningham about the impact of the extras and modifications upon the weight of the caravan. Further, the Member found that Mr Cunningham disclosed to Mr Mason the purpose for which the caravan was purchased, namely free camping, camping in national parks, and travelling around Australia, and that Mr Mason recommended two spare wheels and a grey water tank be fitted to the caravan. Again, these findings were not challenged in this application for leave to appeal.

The Member concluded as follows:

On the evidence, I find that the caravan did not comply with the description recorded on the VIN plate (ACL s.56). This was acknowledged by Linda Hitch who recorded a weight of 3340 kg in contrast to the 2700 kg stated on the VIN plate.
The nature and extent of the failure (ACL s.260) I find includes the following:
·that the failure (swaying) arose and was reported on the first occasion the caravan was used (Anglesea trip);
·that the sway was reported to the respondent immediately after it was experienced on each occasion;
·that the respondent, via its employee Lee Mason, was aware of the load capacity of the applicant’s vehicle (3500 kg);
·that the caravan was an expensive, luxury caravan (evidence of Linda Hitch);
·that the applicant was entitled to rely on and did rely on the expertise (14 years’ experience), skill and judgment of the salesperson, Lee Mason;
·that the applicant gave the respondent two early opportunities to investigate the sway but it chose not to do so;
·that the failures cannot be remedied easily and within a reasonable time;
·that the caravan is unsafe and illegal if loaded over 160 kg;
·that the average owner of a tandem axle caravan requires a minimum load-carrying capacity of 400 kg (Caravan Industry Association of Australia Owner’s Handbook at p.57); and
·that the applicant notified the respondent of the rejection of the caravan either by service of the report of Terrence McNicol on or about 30 December 2018 given the report’s conclusion that the caravan was unsafe and could not be used on a public road, by email dated 16 January 2019 or by service to the respondent of this application (with the disputed email attached) on or about 21 January 2019.

On the evidence I find that the failure to provide a caravan of the weight stated on the VIN plate of 2700 kg, indeed to provide a caravan weighed at 3560 kg (19 December 2018) and 3360 kg (by Linda Hitch date unreadable) was in the circumstances a major failure. I am satisfied that no reasonable consumer, fully acquainted with the nature and extent of the failure would regard the caravan to be of acceptable quality. While noting that two experts have recorded weights that differ by 200 kg, the highest payload proposed of 160 kg is entirely inadequate for the use and enjoyment of a reasonable consumer of the experience of caravanning. A reasonable caravaner would not risk the attention of police and a fine for overweight. A reasonable caravaner would require safety as a priority. A reasonable caravaner would travel at a speed appropriate for the conditions of the road and weather but would regard a risk of sway (a frightening and dangerous occurrence - evidence of Terrence McNicol) as a major failure.
For the stated reasons, I find that the applicant was entitled to reject and did reject the caravan and is entitled to compensation equal to the purchase price and interest. Provided that the respondent satisfies the monetary order within 30 days of the date of this order, the applicant is ordered to make the caravan available for collection from his place of residence. The applicant shall thereupon do all things necessary to cancel the registration of the caravan in his name. From an abundance of caution, I must add to the order that the respondent must satisfy the monetary order within 30 days or lose the right to collect the caravan while the applicant retains the ownership of the caravan and the benefit of the monetary order.

Notice of appeal

In its notice of appeal filed on 29 April 2020, Roma seeks the following relief:

(a) the Court set aside the orders made by VCAT on 1 April 2020 and make such orders in their place as the Court sees fit; and

(b) alternatively, the Court set aside the orders made on 1 April 2020 and remit the matter to VCAT for rehearing according to law.

The notice of appeal provides as follows:[3]
[3]The notice of appeal was amended in about July 2020. The first question of law raised in the amended notice of appeal was not pressed by Roma at the hearing of the application for leave to appeal.

…
2.In respect of its finding that the caravan did not comply with the description recorded on the VIN plate, did the Tribunal; misconstrue or otherwise ask itself the wrong question under section 56 of Schedule 2 of the Competition and Consumer Act 2010 (Cth) (ACL.), make a finding without evidence, or otherwise deny procedural fairness to the applicant?
3.In respect of its finding that a failure to provide a caravan of the weight stated on the VIN plate was a major failure. did the Tribunal misconstrue or otherwise ask itself the wrong questions under s 260, make unsupportable findings, or otherwise fail to take into account relevant considerations or take into account irrelevant considerations?
4.Did the Tribunal err by making a finding of a failure without first identifying an applicable consumer guarantee and making a finding of non-compliance of such?
5.In respect of its finding that ‘no reasonable consumer, fully acquainted with the nature and extent of the failure would regard the caravan to be of acceptable quality’, has the Tribunal applied the wrong test or asked itself the wrong question?
6.Is the Tribunal’s finding that a reasonable consumer ‘would regard a risk of sway…as a major failure’ unsupportable or unreasonable?
7.Is order 4 ultra vires?

To summarise then, the second question of law can be described as the procedural fairness issue, the third, fourth and fifth questions of law can be described together as the ACL issue, the sixth question of law the unreasonableness issue, and the seventh question of law the ultra vires issue.

With respect to the procedural fairness issue, Roma relied upon the following grounds of appeal:

a.the Tribunal found that the caravan did not comply with the VIN plate whereas the question under s 56(1) asks whether a good corresponds with the description (made) to a customer;
b.to the extent the supply of the caravan was by description, there is no evidence to support a finding that the VIN plate formed part of that description;

c. in circumstances where:
i.the respondent’s written case makes no mention of s 56 of the ACL;

ii. neither party addressed the Tribunal with respect to s 56;
iii.the Tribunal did not invite submissions with respect to s 56 or otherwise indicate that it would rely on s 56;

the Tribunal, in its reliance on s 56, did not give the applicant a fair hearing.

In relation to the ACL issue, Roma advanced three distinct and well-particularised questions of law said to arise out of the reasons. The third question of law concerns the Member’s apparent finding that there had been a breach of the consumer guarantee in s 56 by reason of Roma’s failure to supply a caravan of the weight stated on the VIN plate, and the absence of any findings to the effect that there had been a breach of any other provision in Part 3-2, Division 1, Subdivision A of the ACL (‘consumer guarantee provisions’). Given that any finding that there has been a major failure pursuant to s 260 of the ACL is predicated upon a finding that there has been a breach of a particular consumer guarantee provision, the reference in paragraph 25 of the reasons to various matters which were irrelevant to any breach of s 56 vitiated the Member’s finding that there had been a major failure by reason of any breach of s 56. Conversely, the Member failed to take into account matters relevant to whether any breach of s 56 of the ACL amounted to a major failure.

Roma’s fourth question of law concerns the Member’s implicit finding that the propensity of the caravan to sway was a failure. Roma contends that the Member made no finding as to what consumer guarantee provision was breached by the caravan’s propensity to sway.

Roma’s fifth question of law concerns the Member’s finding that “no reasonable consumer, fully acquainted with the nature and extent of the failure would regard the caravan to be of acceptable quality”, noting that this finding was made by reference to s 260 of the ACL. Roma observed that s 54(2) of the ACL specifies when goods are of acceptable quality by reference to the matters enumerated in s 54(3). By failing to identify which of s 54(2) factors the caravan lacked so as to be considered not to be of acceptable quality, the Member did not consider or apply the relevant matters specified by s 54(3) of the ACL.

With respect to the unreasonableness issue, Roma relied upon the following grounds:

a.the finding is unsupportable having regard to the evidence and inherent inferences that:
i. all caravans sway;
ii. the cause of sway is multivariable;
iii.these variables are known, understood, and can be mitigated against;
iv.anti-sway devices and dependant sway bars are common in the caravanning industry;
v.it is a necessary incidence of the installation or such an anti‑sway device that there is an inherent risk of sway in towing a caravan;

b.the finding is unreasonable, illogical, and/or irrational having regard to the evidence and inherent inferences;
c.the finding is unreasonable, illogical, and/or irrational having regard to the implication that every consumer of a caravan would regard the risk of sway as unacceptable.

As for the ultra vires issue, Roma relied upon the following grounds:

a.at [25] the Tribunal found that the respondent had notified the applicant of a rejection for the purposes of Part 5-4 Division I of the ACL;
b.263(6) of the ACL provides that upon such notification, property in the rejected goods revests in the supplier.

Roma’s submissions

Roma submitted that the appeal should be allowed, and that there should be a rehearing of Mr Cunningham’s claims in the VCAT proceeding, because the Member failed to deal with Mr Cunningham’s claims and Roma’s defences on their merits.

Roma submitted that given the Member found that there was a breach of the consumer guarantee in s 56 by reason of the inaccuracy of the VIN plate, that finding must be based upon an anterior finding of a jurisdictional fact that the supply of the caravan was by description. Roma submitted that the Member did not make any express finding to this effect, but appeared to have relied upon the TARE as recorded on the VIN plate as the relevant description.

Roma submitted that, if the supply of the caravan was by description, the description would be the order form for the caravan coupled with the plans, which would show that the caravan was customised to meet Mr Cunningham’s requirements. Roma submitted that there was no evidence before VCAT as to whether the caravan differed from the order form and plans. Roma submitted that Mr Cunningham did not give evidence that he observed a VIN plate on the caravan on the showroom floor, and, accordingly, to the extent the caravan was supplied by description, the VIN plate did not form part of that description. It follows that the Member misconstrued the meaning of supply of goods by description, made a finding unsupportable by evidence, or alternatively failed to make a finding concerning a necessary jurisdictional fact.

The procedural fairness issue

Roma submitted that ss 97 and 98(1) of the VCAT Act make clear that VCAT must act fairly and according to the substantial merits of the case in all proceedings, and is bound by the rules of natural justice.

Roma referred to the principles concerning the requirement for procedural fairness recently summarised by Wheelahan J in Williams v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs,[4] as follows (citations omitted):
[4][2020] FCA 814.

a.Procedural fairness is concerned with, and requires, a fair procedure, and not a fair outcome.
b.The statutory framework within which a decision-maker exercises statutory power is of critical importance when considering what procedural fairness requires, and the question whether a procedure was fair is necessarily tied to the particular facts of the case.
c.The obligation to afford procedural fairness includes a general requirement to give a person who is the subject of a decision the opportunity to put information and submissions to the decision-maker in support of an outcome that supports his or her interests, including “to rebut or qualify … adverse material from other sources which is put before the decision maker”.
d.An opportunity should be afforded to comment on any adverse information that is “credible, relevant and significant to the decision to be made”.
e.As those passages from Alphaone and Kioa v West suggest, the requirement to provide an opportunity to comment on adverse information is usually limited to adverse information that is before the decision-maker, such that it can be significant to the decision to be made.
f.The Court in Minister for Immigration and Border Protection v SZSSJ considered that general requirement –
Ordinarily, affording a reasonable opportunity to be heard in the exercise of a statutory power to conduct an inquiry requires that a person whose interest is apt to be affected be put on notice of: the nature and purpose of the inquiry; the issues to be considered in conducting the inquiry; and the nature and content of information that the repository of power undertaking the inquiry might take into account as a reason for coming to a conclusion adverse to the person.[5]

[5]Ibid [76].

Roma observed that Mr Cunningham’s written case before VCAT was that Roma had breached s 54 of the ACL, and s 56 of the ACL was not referred to in Mr Cunningham’s points of claim in the VCAT proceeding, or during the course of the two‑day hearing. The Member sought and received written submissions from the parties, which did not mention s 56 of the ACL. Roma submitted that it is apparent from the reasons that the Member formed the view that s 56 was relevant. Accordingly, the Member was bound by the principles of fairness and natural justice to afford the parties the opportunity to make submissions regarding the relevance and application of s 56 to Mr Cunningham’s claim. Roma submitted that the Member’s failure to inform the parties that she would rely on s 56, compounded by her failure to invite the parties to make submissions regarding the application and operation of s 56 to Mr Cunningham’s claims, denied Roma a fair hearing.

The ACL issue

The ACL issue concerns the Member’s finding that there had been a major failure within the meaning of s 260 of the ACL. Roma referred to the oft-cited statement of the High Court in Craig v South Australia[6] concerning what amounts to jurisdictional error on the part of a decision-maker, as follows:

…if an administrative tribunal falls into an error of law which causes it to identify a wrong issue, to ask itself a wrong question, to ignore relevant material, to rely on irrelevant material or, at least in some circumstances, to make an erroneous finding or to reach a mistaken conclusion, and the tribunal’s exercise or purported exercise of power is thereby affected, it exceeds its authority or powers. Such an error of law is jurisdictional error which will invalidate any order or decision of the tribunal which reflects it.[7]

[6](1995) 184 CLR 163.

[7]Ibid 179.

The nub of Roma’s complaint in relation to the ACL issue is that VCAT misunderstood its statutory task to find a failure to comply with a relevant consumer guarantee provision and to then assess whether or not that failure was a major failure.

Roma submitted that, on a proper construction of the consumer guarantee provisions and the provisions governing the remedies available to consumers for any breach of the consumer guarantee provisions of the ACL (‘remedial provisions’), the Member was required to analyse Mr Cunningham’s claims in accordance with the following pathway:

(a) for there to be a ‘major failure’, there must first be a finding of a failure to comply with a consumer guarantee provision, and

(b) the decision-maker’s evaluative exercise under s 260 must relate to that failure, and

(c) each of the paragraphs in s 260, other than (a) which is general in its scope, clearly correspond to and are referrable to specific consumer guarantee provisions: that is, s 260(b) is referrable to s 56, s 260(c) is referrable to s 54(2)(a), s 260(d) is referrable to s 55, and s 260(e) is referrable to s 54(2)(d)).

Roma submitted that, while the Member found that Roma’s attachment of the incorrect VIN plate to the caravan amounted to a breach of s 56 of the ACL, the Member’s analysis of whether Roma’s breach of s 56 amounted to a major failure within s 260 of the ACL (‘major failure analysis’):

(a) took into account irrelevant considerations for the purposes of s 56;

(b) failed to take into account relevant considerations for the purposes of s 56;

(c) took into account matters unsupported by evidence which were also not relevant considerations for the purposes of s 56; and

(d) took into account a matter under s 260(c) in the course of evaluating the nature and extent of the failure which is relevant only to s 260(a).

Roma submitted that it is apparent from the matters referred to by the Member in the reasons that the Member did not analyse whether there had been noncompliance with s 56, being the only consumer guarantee provision found to have been breached, and accordingly her finding that there was a major failure is tainted by an error of law. The decision of Bromwich J in Walker v Sell[8] makes it clear that the consumer guarantee in s 56 is concerned with the identification of goods, not with any other representation made by a supplier concerning the goods.
[8][2016] FCA 1259.

The fourth question of law concerns the Member’s finding that ‘the failure (swaying) arose and was reported on the first occasion the caravan was used’ was a major failure.

Roma submitted that at no point did the Member make any findings of any noncompliance with any consumer guarantee provision other than s 56. Instead, the Member presupposed that sway is a failure and, in doing so, implicitly made a finding that sway amounted to a major failure without assessing whether the propensity of the caravan to sway amounted to a failure to comply with the relevant consumer guarantee provision, that is, s 54 of the ACL.

Roma submitted that it is evident from the Member’s finding that no reasonable consumer, fully acquainted with the nature and extent of the failure would regard the caravan to be of acceptable quality that the Member had impermissibly conflated the exercise of finding non-compliance with a consumer guarantee provision with the major failure analysis, noting that the nature and focus of any major failure analysis differs according to which consumer guarantee provision has been found to have been breached.

Roma submitted that there were three questions before the Member in the VCAT proceeding:

(a) was the caravan fit for purpose;

(b) was the caravan unsafe or defective; and

(c) was the caravan reasonably fit for free camping?

Roma submitted that none of these questions were answered, and as such, the merits of the parties’ arguments regarding ss 54 and 55 of the ACL have not been considered according to law.

The unreasonableness issue

Roma submitted that the Member’s implicit finding that the caravan’s propensity to sway was a major failure was legally unreasonable, in that there is always an inherent risk of sway in towing a caravan, and there was evidence before the Member that:

(a) all caravans sway to some degree on occasion;

(b) sway is caused by multiple factors, including:

(vii) the relative weights of the towing vehicle and caravan;

(viii) the distance of the tow hitch of the caravan from the tow vehicle’s rear axle;

(ix)the tow ball mass being lighter than ten per cent of the aggregate trailer mass;

(x) external forces, such as wind, cornering, changes in road camber and steering overcompensation; and

(xi)excess speed;

(c) anti-sway devices are common in the caravan industry;

(d) overloading and incorrect loading can contribute to sway; and

(e) sway can be mitigated by driving slowly.

Roma referred to the decision of the Court of Appeal in East Melbourne Group Inc v Minister for Planning,[9] concerning what constitutes legal unreasonableness, as follows:

A decision may be unreasonable in the Wednesbury sense because it is manifestly unreasonable, that is, it simply defies comprehension, or because it is obvious that the decision-maker consciously or unconsciously acted perversely. Wednesbury unreasonableness will also be made out where there was manifest illogicality in arriving at the decision – there being illogical findings, or inferences of fact unsupported by probative material or logical grounds. ‘Irrationality’ thus encompasses disregard of relevant considerations, giving regard to irrelevant considerations and manifest unreasonableness.
Where the requisite opinion has been formed, the courts will interfere where there is an ‘absence of any foundation in fact for the fulfilment of the conditions upon which in point of law the existence of the power depends.’ Where all of the evidence points one way, and the opinion rests upon a contrary view, there will be jurisdictional error because the decision will not be supported on logical grounds by the material adduced.[10]

[9](2008) 23 VR 605.

[10]Ibid 647–648.

Roma submitted that the Member’s finding was unreasonable in that the evidence to the effect that there is always an inherent risk of sway in towing a caravan was given no weight in the Member’s reasons. Given that there is always a risk of sway when towing a caravan, it is illogical that a reasonable consumer would regard this as a major failure, given that a reasonable caravaner would always travel at a speed appropriate to the conditions. Roma submitted that the consequence of the Member’s finding is that no reasonable consumer would acquire a caravan if aware of the risk of sway.

The ultra vires issue

In regard to the seventh question of law, Roma submitted that paragraph 4 of the Member’s orders should not have been made, as the order presupposes that Mr Cunningham continues to own the caravan, despite the effect of a notification being made by Mr Cunningham under s 263(3) of the ACL, being that property in the caravan revests in Roma. Roma submitted that, accordingly, the effect of the order is to authorise Mr Cunningham to commit a conversion of the caravan, and permitting him to do so while being able to enforce the monetary order would have the effect of a penalty, or would permit recovery in excess of Mr Cunningham’s loss.

Mr Cunningham’s submissions

Mr Cunningham made the overarching submission that s 148 of the VCAT Act provides that an appeal against a decision of VCAT is limited to a question of law, and that in order to obtain leave to appeal, an applicant must demonstrate that an appeal has a real prospect of success. This Court is not empowered to embark upon the fact-finding exercise which the legislature has entrusted to VCAT.

Mr Cunningham referred to the decision of Kirby J in Roncevich v Repatriation Commission,[11] as follows:

Courts conducting this form of review have been repeatedly enjoined by this Court to avoid overly pernickety examination of the reasons. The focus of attention is on the substance of the decision and whether it has addressed the “real issue” presented by the contest between the parties.[12]

[11](2005) 222 LR 115.

[12]Ibid [64].

Mr Cunningham did not take issue with any of the legal principles concerning the questions of law raised by Roma or the authorities relied upon by Roma. However, Mr Cunningham submitted that the real issue in the VCAT proceeding was whether any of the consumer guarantee provisions had been breached so as to entitle him to a refund of the purchase price of the caravan. Mr Cunningham submitted that the Member found that the caravan was too heavy, and was unsafe in that it swayed at speeds over 80 km/h, and was unfit for the purpose for which caravans are commonly supplied, and Mr Cunningham’s disclosed purpose of free camping in national parks around Australia. Mr Cunningham submitted that the Member found that each of these failures was a major failure, with the result that Mr Cunningham was entitled to reject the caravan and receive a refund of the purchase price.

Mr Cunningham submitted that despite the Member’s reference to s 56 in the reasons, the parties’ submissions and the relevant passages of the reasons show that the case was argued and decided on ss 54 and 55 of the ACL, and the Member’s findings in paragraphs 25 and 26 of the reasons should be read as being her findings regarding Roma’s failure to comply with those provisions.

Mr Cunningham submitted that Roma has taken an overly technical and pedantic approach to the Member’s findings and reasons. VCAT is not a court, it is not bound by the rules of evidence or any procedure applicable to courts of record except to the extent to which it adopts those rules or procedures, and VCAT may inform itself as it sees fit. Mr Cunningham submitted that VCAT’s role in the resolution of consumer claims with a value less than $100,000 is not a jurisdiction where this Court should impose overly rigid or onerous requirements upon VCAT or litigants in VCAT.

In regard to the procedural fairness issue, Mr Cunningham submitted that Roma’s submission that there was no evidence that the VIN plate formed part of the description of the caravan ought be rejected. He submitted that there was evidence before the Member as to Roma’s practice in affixing VIN plates prior to collection by a purchaser, the requirements of the Recreational Vehicle Manufacturing Accreditation Program and Caravan Industry of Australia (of which Roma is a member) in relation to VIN plates, and the legislation applying to VIN plates, all of which was to the effect that the information on a VIN plate is a critical record of the attributes of a caravan.

Mr Cunningham submitted that it was clear at all times that he was contending that the caravan did not match the description provided by Roma, including the VIN plate. His reliance upon what was stated on the VIN plate was a central part of his case. He noted that the Member accepted his evidence that he relied upon assurances offered by Mr Mason as to the weight of the caravan, namely that the caravan would weigh less than the maximum towing capacity of Mr Cunningham’s vehicle, being 3,500 kg, with sufficient capacity left over for luggage, food and water.

In regard to the ACL issue, Mr Cunningham submitted that the Court should not adopt a rigid and onerous approach to the Member’s findings of fact and law, as that approach would be inconsistent with VCAT’s role in resolving consumer disputes under the ACL. He submitted that, on a reasonable reading of the reasons, it is plain that the Member found that each of the breaches of the consumer guarantees in ss 54(1), 55(1) and 56(1) of the ACL amounted to major failures. He submitted that the Member’s failure to use the words “major failure” in each case, or to engage in a repetitive analysis of each consumer guarantee provision does not demonstrate error on the part of the Member.

Mr Cunningham observed that the authorities warn against an “overly pernickety” examination of a tribunal’s reasons. He submitted that inelegant expression does not amount to an error of law: neither is a failure to refer to specific provisions at every juncture, or a rolled up expression of reasoning. If this Court is able to discern what VCAT’s findings are and their consequences from the reasons, it would be manifestly unfair to send the matter back for a rehearing before VCAT.

In regard to the unreasonableness issue, Mr Cunningham submitted that, when the Member referred to the “risk of sway”, she referred to sway which, although occurring in the context of the ordinary use of the caravan, was not capable of being easily rectified or mitigated by the anti-sway devices fitted to the caravan. He submitted that the Member, based on the evidence, referred to the kind of sway that was unsafe and which could result in an accident, and it was open for the Member to find that the propensity of the caravan to sway amounted to a major failure.

In regard to the ultra vires issue, Mr Cunningham submitted that the order for the return of the caravan must be read in the context of the other orders made by VCAT. All the fourth order does is give Mr Cunningham the entitlement, which he would not otherwise have, to dispose of the caravan, in the event Roma failed to refund the purchase price of the caravan within a reasonable time. Mr Cunningham should not be required to house the caravan indefinitely in circumstances where Roma has effectively abandoned it. In any event, to the extent that the fourth order discloses error, that order can be severed from the balance of the Member’s orders.

Roma’s submissions in reply

Roma submitted that it is trite to say that VCAT must act according to law, and that it is clear that the Member has made numerous errors in her application of the consumer guarantee provisions, and in the major failure analysis. Roma took issue with Mr Cunningham’s summary of the Member’s findings, and submitted that:

(a) the Member did not find that the caravan was too heavy, but found that it did not comply with the description on the VIN plate;

(b) the Member did not find that the caravan was unsafe in that it swayed at speeds over 80 km/h, but found that it was unsafe and illegal if loaded over 160 kg;

(c) there was no finding that the caravan was unfit for the purpose for which caravans are commonly supplied or for Mr Cunningham’s disclosed purpose of free camping; and

(d) the Member did not find that any of these failures was a major failure.

Roma submitted that the Member’s finding that the caravan breached s 56 of the ACL was unsupported by the evidence. Accordingly, the decision cannot stand, as there is no other finding of a failure to comply with a consumer guarantee provision. In that sense the major failure analysis proceeded on a nullity.

Roma submitted that the major failure analysis drew upon and rolled up concepts relating to different consumer guarantee provisions to support a finding of a major failure within the meaning of s 260 of the ACL. Roma submitted that, on a proper construction of the consumer guarantee provisions and their interaction with the remedial provisions, such a rolled up analysis is impermissible.

Roma submitted that it is not clear whether the Member made any finding in respect of ss 54 and 55 of the ACL, and therefore it is not clear what consumer guarantee provisions have been breached by Roma. Roma submitted that this approach is not onerous or pedantic, but rather is the approach required by the ACL. The remedial provisions distinguish between failures and major failures, and that distinction is important, because the remedial provisions provide different avenues of redress based on how the relevant failure is characterised.

As for the unreasonableness ground, Roma submitted that the Member used unambiguous language and should be taken to mean what she said. Roma submitted that if Mr Cunningham is correct that, when the Member said “risk of sway”, she meant “risk of sway of the kind which Mr Cunningham experienced”, then that finding must be viewed in the context of Mr Cunningham’s evidence that he experienced sway when the caravan was loaded in excess of 3,500 kg, that is, above the towing limit of Mr Cunningham’s vehicle.

Roma’s submissions concluded as follows:

This is an appeal on a question of law; not of the merits of the case. The Tribunal’s misapplication of the law meant that the merits of the parties’ arguments on the guarantee as to acceptable quality under s 54 (and to a lesser extent, s 55) were never determined.

The relevant provisions of the ACL

A critical issue in Roma’s application for leave to appeal is whether the Member considered and applied the correct provisions of the ACL when determining Mr Cunningham’s claim. The relevant consumer guarantee provisions and remedial provisions are summarised below.

Section 54 of the ACL provides a guarantee of acceptable quality. In order to be of acceptable quality, goods must be, relevantly, as fit for all purposes for which goods of that kind are commonly supplied, as free from defects, and as safe as a reasonable consumer would regard as acceptable. Matters relevant to the question of whether a reasonable consumer would consider goods as being of acceptable quality include the nature and the price of the goods, any representation made about the goods by the supplier, or any other relevant circumstances relating to the supply of the goods.

Section 55 of the ACL concerns the supply of goods for a disclosed purpose. A disclosed purpose is a particular purpose for which the consumer acquired the goods, where that purpose was made known to the supplier. In those circumstances, there is a guarantee that the goods are reasonably fit for any disclosed purpose, and for any purpose for which the supplier represents they are reasonably fit, save in circumstances where the consumer did not rely upon, or it was not reasonable for the consumer to rely upon the skill or judgment of the supplier.

Section 56 of the ACL concerns the supply of goods by description, and provides that, where goods are supplied by description, there is a guarantee that the goods correspond with the description.

Section 259 permits a consumer to take action where a supplier breaches one or more specified consumer guarantee provisions, including ss 54, 55 and 56 of the ACL. Section 259(2) sets out the procedure to be followed where the failure to comply with the consumer guarantee can be remedied, and is not a major failure. Section 259(3) provides that if the failure to comply with a consumer guarantee cannot be rectified, or is a major failure, the consumer may reject the goods, and seek compensation from the supplier.

Section 260(1) prescribes when a failure to comply with a consumer guarantee provision amounts to a major failure, and provides as follows:

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:
(a)the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or
(b)the goods depart in one or more significant respects:
(i) if they were supplied by description—from that description; or
(ii)if they were supplied by reference to a sample or demonstration model—from that sample or demonstration model; or

(c)the goods are substantially unfit for a purpose for which goods of the same kind are commonly supplied and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or
(d)the goods are unfit for a disclosed purpose that was made known to:
(i)the supplier of the goods; or
(ii)a person by whom any prior negotiations or arrangements in relation to the acquisition of the goods were conducted or made;

and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or
(e)the goods are not of acceptable quality because they are unsafe.
(emphasis added)

Section 263 of the ACL sets out the consequences which flow from a consumer’s rejection of goods in accordance with s 259(3). The consumer must return to the goods to the supplier, unless they cannot be returned without significant cost to the consumer. The supplier must, at the election of the consumer, replace the goods, or refund the purchase price. The property in the goods revests in the supplier once the supplier has been notified of the rejection.

Discussion

The current application is an application under s 148 of the VCAT Act, which provides that a party to a proceeding may apply for leave to appeal an order of VCAT on a question of law. This Court may grant an application for leave to appeal only if it is satisfied that the appeal has a real prospect of success. In the current case, the application for leave to appeal was listed to be heard together with the appeal. Section 148(7) of the VCAT Act provides that the Court may affirm, vary or set aside the order of VCAT, make any order that VCAT could have made in the proceeding, remit the proceeding for rehearing before VCAT, or make any other order the Court thinks appropriate.

In the current case, there was no dispute that the questions of law identified by Roma in the amended notice of appeal were questions of law upon which a decision of VCAT could be open to review under s 148 of the VCAT Act. In particular, it is accepted that the proper construction of a statute is a question of law, as is the question of whether facts as found fall within a statutory provision or a legal description.[13]
[13]See R v ACR Roofing Pty Ltd (2004) 11 VR 187; Commissioner of State Revenue (Vic) v Arrigo [2016] VSCA 339.

While I will briefly consider other grounds of review, the disposition of the application for leave to appeal largely turns upon the ACL issue: that is, whether the Member misconstrued and misapplied the consumer guarantee provisions and the remedial provisions, such that the Member’s conclusion that Mr Cunningham was entitled to a refund was vitiated by legal error. Roma’s primary contention in relation to the ACL issue is that the Member chose the wrong pathway when identifying the applicable consumer guarantee, and then, when undertaking the major failure analysis, did not apply the remedial provisions in accordance with the pathway she chose for herself.

Mr Cunningham concedes that the reasons unhelpfully roll up the matters the Member was required to take into account when determining whether there was a breach of one or more of the consumer guarantee provisions, and when undertaking the major failure analysis. However, he submitted that any inelegancy or unhappy phrasing in the reasons does not detract from the Member’s findings (which were supportable on the evidence) that the caravan was overweight, and was unacceptably prone to swaying under normal driving conditions, and that those defects were major failures. To overturn the Member’s finding upon what he described as technical grounds in circumstances when Mr Cunningham has clearly not received what he bargained for would be adopting an unduly pedantic approach to the reasons provided by VCAT in what is in effect a small claims jurisdiction.

I have some sympathy with Mr Cunningham’s position. It is not this Court’s role in a proceeding of the current kind to review the evidence and reach a conclusion upon the merits of Mr Cunningham’s claim, or to deprive him of the fruits of his success below on what might be seen by a lay person to be pedantic or technical grounds. However, I also accept that the reasons do not simply amount to shorthand expression or inelegant phrasing. Rather, the reasons disclosed the Member’s failure to properly engage with and apply the relevant statutory provisions to the task at hand. While the proper application of the relevant consumer guarantee provisions and the remedial provisions may not necessarily have led to a different result, it may well have. For this reason, Roma’s application for leave to appeal, insofar as it concerns the ACL issue, must succeed, and the proceeding be remitted to VCAT for determination according to law. My reasons follow.

As observed by counsel for Roma in his submissions, the determination of whether a supplier has breached one or more of the consumer guarantee provisions, and if so, what remedy is available to a consumer, requires following the pathway between the relevant consumer guarantee provisions and the remedial provision or provisions, and any major failure analysis must be predicated upon a finding or findings that there has been a breach of an applicable consumer guarantee provision. Further, the major failure analysis must be referable to the breach found. There must be a finding that there was a breach of a consumer guarantee provision in accordance with the criteria specified in the relevant section, followed by an analysis of whether the particular breach amounted to a major failure in accordance with the criteria set out in s 260, with the remedy available to the consumer in turn dependent upon the outcome of the major failure analysis.

The required pathway was accurately and succinctly set out in the following passage in Boyd v Agrison Pty Ltd,[14] a proceeding in the Magistrates’ Court involving a defective tractor:
[14][2014] VMC 23.

42.The ACL is beneficial legislation and includes the provision of remedies to consumers such as Mr Boyd where there is a breach of consumer guarantees. As mentioned, Mr Boyd purported to reject the tractor. Whether his conduct amounted to a valid rejection is a matter of contention but in the event I find that there has been “a major failure” and subject to the satisfaction of certain other requirements Mr Boyd will be entitled to a refund and ancillary costs.
43.In order to succeed in his action in this Court Mr Boyd must prove on the balance of probabilities the following:
(i)That the consumer guarantees relied on are applicable;
(ii)That the tractor has the attributes and or defects;
(iii)That by reason of the attributes and/or defects, or by reason of one or more of them, the tractor fails to comply with one or more of the consumer guarantees;
(iv)That the failure to comply with the guarantees constitutes “a major failure”;
(v)That Mr Boyd notified Agrison of the rejection and has requested a refund;
(vi)That Agrison has failed to accept the rejection and does not intend to refund his money.[15]

[15]Ibid [42]–[43]. See also the analysis in Morphy v Beaufort Townsville Pty Ltd [2018] VCAT 1520 as an illustration of the orthodox approach to claims concerning a breach of the consumer guarantee provisions.

It is against that background that I turn to the relevant section of the reasons in some detail.

The Member’s findings are contained in paragraphs 24 to 26 of the reasons. Paragraph 24 of the reasons provides as follows:

On the evidence, I find that the caravan did not comply with the description recorded on the VIN plate (ACL s.56). This was acknowledged by Linda Hitch who recorded a weight of 3340 kg in contrast to the 2700 kg stated on the VIN plate.

There are a number of difficulties with this passage of the reasons. First, it is apparent from the material in evidence in the current application that neither of the parties referred to and relied upon s 56 of the ACL, the consumer guarantee provision applicable when there is a supply of goods by description. That, of course, brings into play the procedural fairness issue, but, as observed by Roma, there are more fundamental difficulties associated with the Member’s reference to and reliance upon s 56 of the ACL. In particular, the reasons do not disclose the necessary antecedent finding that the supply of the caravan to Roma was a sale by description. That was not Mr Cunningham’s contention at the VCAT hearing, and, in the current application, Mr Cunningham accepted that the Member’s reference to s 56 must have been a mistake.

That concession is appropriate, as any reliance by Mr Cunningham upon s 56 would have been entirely inconsistent with the manner in which he put his case at VCAT. It is factually correct to say that the weight of the caravan was substantially in excess of the weight recorded on the VIN plate, and the inaccuracy of the VIN plate featured prominently in the evidence before VCAT. However, setting aside the question of whether s 56 was applicable at all, given that the VIN plate was fitted after the purchase had been made, the inaccuracy of the weight recorded on the VIN plate is merely a compliance issue, which can be readily rectified by replacing the VIN plate on the caravan with an accurate VIN plate. The discrepancy between the weight of the caravan and the weight recorded on the VIN plate cannot, of itself, constitute a major failure.

The inaccuracy of the VIN plate is a red herring. Mr Cunningham’s real contention is that the caravan is simply too heavy. Given that the towing limit of his vehicle is 3,500 kg, and his water tanks carry 190 kg of water when full, he considers that a carrying capacity of 160 kg is insufficient for him to be able to use the caravan for its intended purpose, including, but not limited to, free camping in national parks. If he was able to load the caravan with the necessary water, equipment, and possessions, the caravan’s weight would mean that it would be illegal and unsafe to tow the caravan with his existing motor vehicle. Further, he contends that the excessive weight of the caravan materially contributes to the propensity of the caravan to sway, which renders the caravan unsafe to travel at speeds over 85 km/h. In other words, Mr Cunningham’s primary contention was that the caravan was defective, unsafe, and not fit for purpose.

Accordingly, the Member’s reference to and reliance upon s 56 is not a trifling matter. If the Member had intended to conclude that Roma had breached s 56, and then purported to undertake the major failure analysis on the basis of a breach of s 56, any finding that the inaccuracy of the VIN plate was a major failure would be irrational and illogical, as it goes without saying that the VIN plate was readily capable of being replaced with an accurate VIN plate. Further, as conceded by Mr Cunningham, Roma’s complaint that the Member failed to afford the parties procedural fairness would be made out. Accordingly, given that there was no evidence that Mr Cunningham saw the VIN plate prior to ordering the caravan, if the Member had in fact relied upon s 56 of the ACL, she would have, in the words of the High Court in Craig v South Australia,[16] identified the wrong issue, or asked herself the wrong question, such that the Member’s orders would have been invalidated by jurisdictional error.
[16](1995) 184 CLR 163.

The question of whether the Member had intended to refer to and apply s 56 when considering Mr Cunningham’s claims is somewhat vexed. After all, the reference to s 56 cannot be a typographical error, because the Member found that the caravan did not comply with the description recorded on the VIN plate, thus expressly invoking the terms of s 56 of the ACL. Further, in paragraph 26 of the reasons, the Member refers to “the failure to provide a caravan of the weight stated on the VIN plate of 2,700kg”, again picking up the language of s 56 of the ACL.

However, in my view, on balance, having regard to paragraphs 25 and 26 of the reasons, and in the context of the written submissions filed by the parties in the VCAT proceeding, the Member’s reference to s 56 of the ACL in paragraph 24 of the reasons was probably an error. It is reasonably apparent from paragraphs 25 and 26 of the reasons that the Member considered the relevant failures to be the weight of the caravan and the propensity of the caravan to sway, and these paragraphs of the reasons also reference the relevant considerations under ss 54 and 55 of the ACL. There is only a fleeting reference to the VIN plate in paragraph 26 of the reasons, which was in turn qualified by a reference to the actual weight of the caravan.

This finding disposes of Roma’s third question of law, in that I am not satisfied that the Member’s ultimate conclusions were vitiated by an error predicated upon a finding that Roma had breached s 56 of the ACL. However, the question remains whether the reasons demonstrate that the Member properly considered and applied the relevant matters under ss 54 and 55, which in turn affects the validity of the major failure analysis, as raised by the fourth and fifth questions of law.

The test as to whether goods have breached the consumer guarantee of acceptable quality in s 54 of the ACL is multi-faceted. In determining whether Roma had breached the consumer guarantee of acceptable quality, Mr Cunningham would be required to establish that the caravan was, relevantly:

(a) not fit for all of the purposes for which goods are commonly supplied; or

(b) free of defects; or

(c) not safe; and

(d) that a reasonable consumer fully acquainted with the state and condition of the caravan (including any hidden defects), would not regard the goods as being of acceptable quality, having regard to, among other things, the nature of the goods, the price of the goods, any statement made about the goods or any packaging or label, any representation made by the supplier, or any other relevant circumstance.

While reference is made in the bullet points in paragraph 25 of the reasons (to which I will turn shortly) to a number of matters relevant to any analysis under ss 54 and 55, the reasons do not disclose any considered analysis of the requirements of those consumer guarantee provisions. While I would not go so far as to say that the result of any such considered analysis must result in an outcome favourable to Roma, I cannot be satisfied, on the materials, that such an analysis would undoubtedly lead to a favourable outcome to Mr Cunningham, such that any error on the part of the Member was immaterial to the outcome of the VCAT proceeding.

As previously noted, what can be discerned from the reasons is that the Member found that the relevant failures were:

(a) the weight of the caravan, insofar as it impacted upon the carrying capacity of the caravan (and possibly the propensity of the caravan to sway, although that is not clear from the reasons); and

(b) the propensity of the caravan to sway.

The weight of the caravan is relevant to the consumer guarantees in ss 54 and 55, while the propensity of the caravan to sway can only be relevant to the consumer guarantee in s 54, as there was no evidence that Mr Cunningham made any express reference to any propensity of the caravan to sway in his discussions with Mr Mason. Further, the propensity of the caravan to sway bears no apparent relationship with the discrepancy between the weight recorded on the VIN plate and the actual weight of the caravan.

It is not necessary or appropriate here to descend into the evidence and the arguments before VCAT regarding the matters complained of by Mr Cunningham, save to say that the issues were all contestable, and the Member clearly had strong views regarding the attributes of the caravan. The question here is whether the Member gave proper consideration to the tests set out in ss 54 and 55 prior to reaching a conclusion that the weight of the caravan and/or the propensity of the caravan to sway were failures, and that these failures were major failures.

Taking first the weight of the caravan, it is not apparent at all from the reasons as to whether the Member found that the weight of the caravan amounted to a defect, or meant that the caravan was not fit for all of the purposes for which caravans are commonly supplied, or that the caravan was unsafe. Given the nature of Mr Cunningham’s complaints concerning the weight of the caravan, the failure of the Member to make an express finding as to how the caravan failed to meet the consumer guarantee in s 54 is a material omission, particularly given that, as noted by Roma in its submissions, s 54 is not a guarantee of perfection.

By way of illustration, it is difficult to see how the weight of the caravan meant that it was inherently defective, noting that the dictionary definition of defect includes “a fault, or imperfection”.[17] Further, there was no suggestion that the caravan did not fulfil the function of being a towable home. Further, it is difficult to see how the caravan could be held to be inherently unsafe. The evidence before and the findings of the Member regarding the weight of the caravan were qualified by the matters referable to Mr Cunningham’s particular circumstances, such as the towing capacity of his vehicle, and his assertion that the carrying capacity of 160 kg was insufficient for his purposes. That is not to say that, properly considered on the evidence before VCAT, the Member could not have found that the caravan was defective, not fit for purpose, or unsafe, by reason of its weight. However, the necessary evaluative process was not evident from the reasons, and the Member’s failure to make an express finding that there had been a breach of the guarantee of acceptable quality in s 54 of the ACL, and on what basis, is a material omission, and one which in turn alters the validity of the major failure analysis.
[17]Macquarie Dictionary (online at 2 February 2022) ‘defect’ (n, def 1).

Further, while I have found that the Member’s reference to the inaccuracy of the VIN plate as being a breach of s 56 of the ACL was probably a mistake (albeit not a simple typographical error), I cannot rule out the possibility that the Member’s initial focus on s 56 may have distracted her from the evaluative exercise required by s 54 of the ACL. The reference by the Member in paragraph 26 of the reasons to Roma’s failure to provide a caravan of the weight specified on the VIN plate supports a conclusion that the Member treated the weight recorded on the VIN plate as akin to a warranty made by Roma, which may have distracted the Member from the task of evaluating whether the weight of the caravan was a defect, or whether it was not fit for purpose, or not safe, such that a reasonable consumer would not consider the caravan to be of acceptable quality, as required by s 54 of the ACL.

Given the factual findings of the Member regarding the conversations between Mr Cunningham and Mr Mason, and her finding that Mr Cunningham was entitled to rely upon the skill and experience of Mr Mason, Mr Cunningham may have been on safer ground had the Member made an express finding that the caravan was not fit for the disclosed purpose of free camping, given the test under s 55 is less stringent than the “reasonable consumer” test under s 54. However, she made no such express finding, and indeed, there is no reference by the Member in paragraphs 25 or 26 of the reasons to the suitability of the caravan for free camping, and any impediments to unrestricted free camping caused by the weight of the caravan.

Turning now to the question of “sway”, the reasons are somewhat opaque as to what the Member meant when referring to “sway”, and indeed, the parties each have their own interpretation as to what the Member meant by the use of the shorthand term “sway”. In these reasons, I have referred to the caravan’s “propensity to sway”, which I consider to be a largely neutral term which best reflects the evidence before VCAT.

The question of whether the propensity of the caravan to sway breached the consumer guarantee of acceptable quality in s 54 is again not a simple question, which highlights the importance of following the evaluative pathway prescribed by the ACL. Is the propensity of the caravan to sway a defect? That question was not answered in the reasons. Does the propensity of the caravan to sway mean that it is not fit for the purpose for which caravans are commonly supplied? Perhaps, but the reasons include no such finding. In paragraph 25 of the reasons, the Member refers to the caravan being unsafe when being loaded with over 160 kg of goods, but makes no express finding in that paragraph that the caravan’s propensity to sway was affected by overloading the caravan, or that the caravan’s propensity to sway renders the caravan unsafe. The only reference to the caravan’s propensity to sway as being unsafe is in the context of the major failure analysis, where the Member refers to the risk of sway being a “frightening and dangerous occurrence”, which meant that any reasonable consumer would consider that the propensity of the caravan to sway was a major failure. Again, the consideration and treatment of the caravan’s propensity to sway discloses no considered analysis in accordance with s 54 of the ACL.

The Member’s failure to properly engage with the requirements of ss 54 and 55 also infects the major failure analysis, largely because the antecedent tasks of identifying the applicable consumer guarantee and any breach of any consumer guarantee do not appear to have been undertaken. But there are further difficulties with the major failure analysis, as discussed below by reference to the individual bullet points under paragraph 25 of the reasons.

Prior to doing so, the following passage from Boyd v Agrison[18] once again accurately and succinctly describes the approach to be taken when undertaking the major failure analysis required by s 260 of the ACL:

Section 260 of the ACL is far reaching. In essence it provides that a “major failure” is one where a reasonable consumer would not have acquired the goods had the consumer been fully aware of the failure, the goods are unsafe, substantially unfit for the purpose or departed significantly from the demonstration model or sample.
The plaintiff’s case is that the aforementioned failures comprising the matters detailed in Mr Boyd’s evidence and the findings made by Mr Saylev constitute a major failure for the purposes of s 260 of the ACL. The plaintiff submitted that on a proper construction of s 260 of the ACL, that the use of the conjunction “or” after each of sub-paragraph (a), (b), (c) and (d) has the effect that to amount to a major failure only one of the sub-paragraphs need qualify and that s 260 does not require a consumer to prove each sub-paragraph in order to satisfy the Court that there has been a major failure. I agree with this construction of the provision.[19]

[18]Ibid.

[19]Ibid [49]–[50].

The chapeau to paragraph 25 of the reasons states:

The nature and extent of the failure (ACL s 260) I find includes the following …

The chapeau immediately follows after paragraph 24 of the reasons, which refers to the incorrect VIN plate being a breach of s 56 of the ACL, such that one might assume that the “failure” the Member is referring to is the failure of the VIN plate to accurately record the weight of the caravan. However, for the reasons outlined earlier in these reasons, the better view is that the Member considered the actual weight of the caravan and the propensity of the caravan to sway were the relevant failures, without of course identifying how these attributes of the caravan were said to amount to breaches of either ss 54 or 55.

I will now turn to and comment upon the individual bullet points in paragraph 25 of the reasons.

1.That the failure (swaying) arose and was reported on the first occasion that the caravan was used
As discussed above, the reference to the caravan’s propensity to sway as being a failure was not supported by any considered analysis of s 54. While it is not necessary to comment in any detail upon Roma’s submissions that “sway” cannot possibly be a defect within the meaning of s 54, the question of whether the propensity of the caravan to sway when towed at the speed limit on freeways and highways is a failure is clearly contestable, requiring careful analysis against the criteria set out in ss 54(2) and (3). No such analysis is evident from the reasons.
2.That the sway was reported to the respondent immediately after it was experienced on each occasion
Save perhaps for providing evidentiary support for Mr Cunningham’s claims, the issue of whether Mr Cunningham reported the issue to Roma is not relevant to the major failure analysis required by s 260 of the ACL, although it may be tangentially relevant to the question of whether the asserted failure was capable of being remedied.
3.That the respondent, via its employee Lee Mason, was aware of the load capacity of the applicant’s vehicle (3,500 kg)
This finding is relevant to the question of whether the caravan was fit for the purpose disclosed to Roma for the purposes of determining whether Roma had breached s 55 of the ACL, and perhaps whether any representations had been made by Roma to Mr Cunningham about the caravan (s 54(3)(d)), but is not particularly relevant to the major failure analysis. However, no express finding was made by the Member that the caravan was not fit for the purpose of free camping.
4.That the caravan was an expensive, luxury caravan (evidence of Linda Hitch)
This issue is relevant to the question of whether the supply of the caravan was a breach of the guarantee of acceptable quality, being one of the factors to be taken into account under s 54(3). However, while on one view this factor operates in favour of Mr Cunningham, given that a consumer spending a significant amount of money might reasonably have higher expectations of the caravan, it also tells against Mr Cunningham’s case, in that a better equipped caravan is likely to be heavier. It is not clear from the reasons how this finding was utilised by the Member to find that a reasonable consumer would not have considered the caravan to be of acceptable quality within the meaning of s 54 of the ACL.
5.That the applicant was entitled to rely upon the expertise (14 years’ experience) skill and judgment of the sales person, Lee Mason
This matter is relevant to the question of whether Roma breached the consumer guarantee as to the caravan’s fitness for the disclosed purpose of free camping (see above), but is otherwise not relevant to the major failure analysis.
6.That [Mr Cunningham] gave [Roma] two early opportunities to investigate the sway but it chose not to do so
This finding may reflect poor customer service on the part of Roma, but Roma’s alleged failure to investigate the propensity of the caravan to sway is not relevant to the question of whether Roma breached any of the applicable consumer guarantees, or the major failure analysis.
7.That the failures cannot be remedied easily and within a reasonable time
This finding is relevant to the remedies available to a consumer under the remedial provisions.
8.That the caravan is unsafe and illegal if loaded over 160 kg
This finding that the caravan is unsafe is, of course, relevant to the question of whether the consumer guarantee of acceptable quality has been breached, and whether such a breach amounts to a major failure. However, the validity of the qualification “if loaded over 160 kg” is hotly contested by Roma. This issue highlights the importance of adhering to the statutory scheme in cases of the current kind. There was no finding that the caravan is inherently unsafe by reason of its weight. Rather, the Member’s finding was to the effect that, in order to comply with the law when towing the caravan with Mr Cunningham’s current motor vehicle, the extra payload available to him is 160 kg, which the Member found to be unacceptable, in that carrying a payload of 160 kg was “unsafe and illegal”.
Accordingly, a finding that the caravan is “unsafe”, thus breaching the guarantee of acceptable quality in a manner which s 260(1)(e) deems to be a major failure is, to say the least, contestable. It is also unclear as to how the caravan was said to have been unsafe by reason of its weight, and whether there was found to be any connection between the weight of the caravan and its propensity to sway. Further, the limited carrying capacity of the caravan may or may not lead to a conclusion that the caravan is not fit for the disclosed purpose of free camping, but no such finding was made by the Member.
9.That the average owner of a tandem axle caravan requires a minimum load-carrying capacity of 400 kg (Caravan Industry Association of Australia Owners Handbook at p 57)
There are no difficulties with the Member relying upon this document to draw this conclusion, given that s 98 of the VCAT Act provides that VCAT may inform itself as it sees fit. However, once again, this finding is relevant to the question of whether there has been a breach of a consumer guarantee provision, and if so, which one, but there is no express finding by the Member that the discrepancy between the payload of the caravan and the minimum loadcarrying capacity referred to above was a defect, or rendered the caravan unsafe or not fit for purpose.
10.That [Mr Cunningham] notified [Roma] of the rejection of the caravan either by service of the report of Terrence McNicol on or about 30 December 2018 given the report’s conclusion that the caravan was unsafe and could not be used on a public road, by email dated 16 January 2019 and by service to [Roma] of the applications (with the disputed email attached) on or about 21 January 2019
This matter was relevant to the question of whether Mr Cunningham had complied with the modification requirements in s 259 of the ACL, which was an issue in dispute at the VCAT hearing, but is not the subject of Roma’s application for leave to appeal in this proceeding.

Finally, in paragraph 26 of the reasons, the Member stated as follows:

On the evidence I find that the failure to provide a caravan of the weight stated on the VIN plate of 2700 kg, indeed to provide a caravan weighed at 3560 kg (19 December 2018) and 3360 kg (by Linda Hitch date unreadable) was in the circumstances a major failure. I am satisfied that no reasonable consumer, fully acquainted with the nature and extent of the failure would regard the caravan to be of acceptable quality. While noting that two experts have recorded weights that differ by 200 kg, the highest payload proposed of 160 kg is entirely inadequate for the use and enjoyment of a reasonable consumer of the experience of caravanning. A reasonable caravaner would not risk the attention of police and a fine for overweight. A reasonable caravaner would require safety as a priority. A reasonable caravaner would travel at a speed appropriate for the conditions of the road and weather but would regard a risk of sway (a frightening and dangerous occurrence - evidence of Terrence McNicol) as a major failure.

Given that a consumer needs only to satisfy one of the limbs of s 260(1) of the ACL in order to establish that a breach of a consumer guarantee provision amounts to a major failure, it was open for the Member to rely upon s 260(1)(a) in undertaking the major failure analysis. In paragraph 26 of the reasons, the Member stated (referring to Roma’s failure to provide a caravan of the weight stated on the VIN plate) that “no reasonable consumer, fully acquainted with the nature and extent of the failure would regard the caravan to be of acceptable quality”, which is the relevant test under s 54, not s 260(1)(a). Section 260(1)(a) provides that a failure to comply with a consumer guarantee provision is a major failure if the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and the extent of the failure. However, the misdescription of the test under s 260(1)(a) in the reasons (insofar as it concerned the weight of the caravan) could probably be disregarded as an immaterial error had there been an antecedent finding of a breach of a consumer guarantee provision. However, the contents of paragraph 26 of the reasons once again illustrate the difficulties caused by the Member’s conflation of the tests for determining whether the supply of the caravan was a breach of any of consumer guarantee provisions with the major failure analysis.

Accordingly, the current case falls squarely within the scope of what was said by the High Court in Craig v South Australia[20] to amount to jurisdictional error, which may be found when a decision-maker identifies a wrong issue, asks itself the wrong question, ignores relevant material, or falls to rely upon relevant material.[21]
[20](1995) 184 CLR 163.
[21]Ibid, 179.

During the course of the current application, Mr Cunningham conceded that the Member’s reference to s 56 of the ACL was mistaken, and that the reasons were expressed in a way that “rolled up” all of the elements required to be considered when determining whether there had been a breach of any of the consumer guarantee provisions and the major failure analysis. However, his primary contention was that it was apparent from the reasons that the Member considered that both the weight of the caravan and the propensity of the caravan to sway breached s 54 of the ACL, and both were major failures within the meaning of s 260, and that this Court should be cautious to interfere with the Member’s findings in that regard.

I do not have any difficulties with Mr Cunningham’s proposition, in principle at least. In effect, Mr Cunningham is contending that any errors on the Member’s part were immaterial to the final outcome, and therefore, the Member’s determination in favour of Mr Cunningham should not be disturbed.

The question of whether any error on the part of the Member was material is a critical enquiry for the purpose of the current application. The authorities concerning the application of s 148 of the VCAT Act in appeals of the current kind stress that, in order to obtain relief under s 148, the applicant must not only establish legal error on the part of VCAT, but that VCAT’s determination has been vitiated by the error.[22]
[22]See Catch The Fire Ministries Inc v Islamic Council of Victoria Inc (2006) 15 VR 207; Snowy Hydro Ltd v Metroll Victoria Pty Ltd (2007) 27 VAR 31; Director of Housing v Andrew [2009] VSC 441; Forster v Legal Services Board (2013) 40 VR 587.

Mr Cunningham’s primary complaints concerning the caravan were the limited carrying capacity of the caravan given its weight, and its propensity to sway when travelling at speeds over 85 km/h. I will leave to one side for present purposes the excess length of the caravan and the question of whether Roma’s rectification proposal was reasonable. Turning first to the excess weight, while it was common ground that the caravan had a load carrying capacity of 160 kg, there was clearly room for debate as to whether the caravan was fit for all purposes for which caravans are currently supplied, given that a camper would not need to fill the water tanks if staying at a caravan park, but would need to do so at some stage before entering a national park. There would also be room for debate as to whether the weight of the caravan was a “defect” within the meaning of s 54, and whether its weight made the caravan inherently unsafe. While I accept that it may have been open to the Member to reach a conclusion that the weight of the caravan breached s 54 of the ACL, I do not consider that such a conclusion would necessarily follow.

As previously noted, Mr Cunningham’s claims with respect to the weight of the caravan may have fared better under s 55 of the ACL, given that it was common ground that Mr Cunningham had made it known to Roma that he wished to go free camping in national parks, as was the requirement for campers in national parks to take in their own potable water, and take out their own waste water. However, the Member made no finding whatsoever that the caravan was not substantially unfit for the disclosed purpose of free camping, as required by s 260(1)(c) of the ACL, despite the reference in paragraph 25 of the reasons to Mr Cunningham being entitled to rely upon the skill and judgment of Mr Mason, which is one of the matters relevant to determining whether there has been a breach of s 55 of the ACL. If the Member had made an express finding to the effect that the caravan was substantially unfit for the disclosed purpose of free camping by reason of its weight, then Mr Cunningham would have been on solid ground when submitting that the other deficiencies in the Member’s reasoning process had no real consequence, but she did not make such a finding.

The position with respect to Mr Cunningham’s complaints concerning the propensity of the caravan to sway also highlights the materiality of any shortcomings in the decision‑making process. While I am not prepared to conclude that the Member’s finding to the effect that the propensity of the caravan to sway was a major failure was unreasonable, in the legal sense, the issue as to whether the propensity of the caravan to sway constituted a breach of s 54 of the ACL (neither ss 55 or 56 could possibly be relevant to the issue of sway) is complex and multi-factorial, given the inherent risk of sway involved in towing a caravan. I accept there is room for considerable debate regarding how much “sway” is safe and acceptable to a reasonable consumer, and regarding the measures appropriate to mitigate the risk of sway. The complexity of the issue once again highlights the need to closely adhere to the statutory framework when evaluating Mr Cunningham’s claims.

Finally, in my discussion of the ACL issue, I have focused on the reasons. However, I should emphasise that this is not a “reasons” case. First, Roma does not advance a ground of review based upon the asserted inadequacy of the reasons, although it would have been open to Roma to do so. Rather, the reasons provide the best evidence of the Member’s reasoning process, which I accept was flawed in that the Member failed to identify the relevant consumer guarantee provisions, failed to evaluate the attributes of the caravan and the matters complained of by Mr Cunningham against the criteria enumerated in ss 54 and 55 of the ACL, and that flaw in the reasoning process infected the major failure analysis so as to cast considerable doubt upon the Member’s conclusion that Mr Cunningham was entitled to a refund. While I accept that this Court should not adopt an overly pedantic approach to the reasons of VCAT, one cannot read into reasons what is not there: in this case, a reasoning process in conformity with the requirements of the relevant statute.

To elaborate further, this is not a case where there has been a minor slip or error in the reasons, such as an isolated reference to the wrong provision, or a minor mistranscription of the relevant statutory test. By way of example, if the Member had commenced her analysis by reference to s 56 of the ACL, but then went on to make express findings concerning the attributes of the caravan, and that those attributes breached the consumer guarantees in ss 54 and/or 55 by reference to the criteria specified in those provisions, any error could probably be dismissed as immaterial, and be excused. Similarly, if the Member had simply mistakenly described the reasonable consumer test in s 260(1)(a) as being the reasonable consumer test in s 54(2) (as she did), but had otherwise correctly identified and analysed the attributes of the caravan in accordance with the terms of the applicable consumer guarantee provisions, then one could probably infer from the language of paragraph 26 of the reasons that the Member was satisfied that the relevant failures were major failures. However, the compounding effect of the errors and misdescriptions reinforces a conclusion that the Member failed to identify and apply the relevant consumer guarantee provisions, thus fatally undermining the validity of the major failure analysis.

Accordingly, in summary, given my finding to the effect that the Member’s reference to s 56 of the ACL was probably a mistake, I would grant leave to appeal with respect to the third question of law, but dismiss the appeal. I would allow the appeal with respect to the fourth and fifth questions of law, on the basis that in finding that the weight of the caravan and the propensity of the caravan to sway were major failures within the meaning of s 260 of the ACL, the Member failed to make the necessary antecedent findings that the relevant attributes of the caravan breached the applicable consumer guarantees in ss 54 and/or 55 of the ACL, and that omission was material to the outcome.

Given my findings regarding the ACL issue, it is not necessary for me to traverse the remaining grounds of appeal in any great detail. However, for completeness, my comments on the remaining grounds of review follow.

Taking first the procedural fairness issue, I accept that if the Member had actually relied upon s 56 of the ACL for the purpose of determining whether the supply of the caravan contravened the consumer guarantee provisions, and whether the inaccuracy of the VIN plate amounted to a major failure, then Roma’s complaint that it was not afforded procedural fairness would be made out. However, as can be seen from the discussion above regarding the ACL issue, it seems that it is more likely than not that the Member was primarily concerned with the weight of the caravan and its propensity to sway, not the inaccuracy of the VIN plate, and her reference to s 56 was probably a mistake. Accordingly, I would grant leave to appeal on this ground of appeal, but dismiss the appeal. Of course, if I am wrong about the question about the question of whether the Member’s reference to s 56 was a mistake, the procedural fairness ground would be made out, given that the applicability of s 56 to Mr Cunningham’s claims was not an issue which was not readily apparent from the terms of s 56, or from the evidence and submissions before VCAT.[23] If the Member had alerted the parties to her intended reliance upon s 56, I have little doubt that both parties would have sought to direct the Member towards the correct path, given the manner in which both parties had put their cases at VCAT.
[23]Commissioner for the Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576, 591.

As for the unreasonableness issue, it is apparent from my reasons concerning the ACL issue that the question of whether either the weight of the caravan or the propensity of the caravan to sway were breaches of the consumer guarantee provisions and/or were major failures were contestable, such that the Member’s failure to properly analyse Mr Cunningham’s claims in keeping with the pathway provided by the consumer guarantee provisions and the remedial provisions was material. By implication, the contestable nature of the issues in the VCAT proceeding, the divergent evidence of the experts in the VCAT proceeding, and the multi‑faceted evaluative exercise required by the relevant consumer guarantee provisions and the remedial provisions tell against a conclusion that the Member’s findings concerning the caravan’s propensity to sway were legally unreasonable, in the absence of any other legal error, particularly given the high bar facing any party seeking to assert that a decision-maker’s factual findings should be impugned upon the grounds of legal unreasonableness.

As far as the ultra-vires issue, it seems that the Member made paragraph 4 of the orders to provide some kind of security to Mr Cunningham for the pecuniary relief afforded by the Member, being the refund of the purchase price of the caravan. I agree that such an order is beyond power given the terms of s 263(6) of the ACL, but also, was probably unnecessary, given that the monetary order made by the Member is capable of being registered as a judgment in this Court,[24] and there was no evidence before the Member to the effect that Roma could not or would not meet a judgment debt.
[24]See s 121 of the VCAT Act.

Accordingly, I will grant leave to appeal with respect to the second to fifth and seventh questions of law, and allow the appeal with respect to the fourth, fifth and seventh questions of law. I would dismiss the appeal with respect to the second and third questions of law, and refuse leave to appeal with respect to the sixth question of law.

The parties’ submissions presume that if I were to allow the appeal on either the procedural fairness issue, the ACL issue, or the unreasonableness issue, then the appropriate remedy would be to remit the matter back to VCAT to be determined according to law. Given the fact-dependent nature of the inquiry to be undertaken into Mr Cunningham’s claims, I agree that this is the appropriate course of action.

My inquiries indicate that the Member is no longer a member of VCAT, and as such, it is not necessary for me to determine whether I should direct that the proceeding be heard and determined by a different VCAT member. Finally, I accept that this is an appropriate occasion for an order to be made in favour of Mr Cunningham under s 4 of the Appeal Costs Act 1998 (Vic).

I direct that the parties confer and submit draft minutes of orders for the disposition of this proceeding, including, if appropriate, any directions which should be made pursuant to s 148(7)(c) of the VCAT Act, and the question of costs, within 14 days of the delivery of these reasons.

[2022] VSC 25

4 February 2022