Mishra v Prestige Auto Centre Pty Ltd and Khan Motorcar Co Pty Ltd

[2015] NSWCATCD 106

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	Mishra v Prestige Auto Centre Pty Ltd & Khan Motorcar Co Pty Ltd [2015] NSWCATCD 106
Hearing dates:	2 April 2014 and 16 June 2015
Decision date:	03 September 2015
Jurisdiction:	Consumer and Commercial Division
Before:	D G Charles, General Member
Decision:	Subject to the question of costs, the application is dismissed
Catchwords:	Motor vehicle – Consumer claim – allegation of odometer tampering - Misleading and deceptive conduct – causation & reliance - acceptable quality & fitness for purpose – remedies – measure of damages
Legislation Cited:	Motor Dealers and Repairers Act 2013 Fair Trading Act 1987 Consumer Claims Act 1998 Consumer Claims Regulation 2014 Civil and Administrative Tribunal Act 2013 The Australian Consumer Law
Cases Cited:	Moloney v Collins [2011] NSWSC 628 Akkari v Sartor [2015] NSWCATAP 79 Burton v Chad One Pty Limited [2013] NSWDC 301 Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 64 Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 Poulet Frais Pty Ltd v The Silver Fox Company Pty Ltd 92005) 220 ALR 211 Prestige Auto Centre Pty Ltd v Apurva Mishra [2014] NSWCATAP 81
Category:	Principal judgment
Parties:	Apurva Mishra (applicant) Prestige Auto Group Pty Ltd (first respondent) Khan Motorcar Co Pty Ltd (second respondent)
Representation:	Apurva Mishra (in person, for the applicant) Dmitriy Akhmetov (managing director, for and on behalf of the first respondent) No appearance for the second respondent
File Number(s):	MV 14/10365
Publication restriction:	Unrestricted

REASONS FOR DECISION

BACKGROUND FACTS & OVERVIEW OF THE PARTIES’ RESPECTIVE CASES

1. On 10 July 2013, the applicant purchased from the first respondent a 2004 Mitsubishi Lancer Evolution VIII MR motor vehicle (the “vehicle” or the “subject vehicle”). The applicant paid a purchase price to the first respondent of $30,000.00.

2. The first respondent (hereinafter referred to as the “dealer”) was and is, at all material times, a licensed motor dealer under the Motor Dealersand Repairers Act 2013.

3. The vehicle was a second hand vehicle imported from Japan. The second respondent was the company responsible for compliance with import regulations. The applicant does not press a case for any relief against the second respondent.

4. Expressed in the sale contract and warranty documents for the vehicle, was an odometer reading of 33,258 kilometres travelled.

5. A dealer’s warranty applied to the vehicle which was limited to three (3) months or 5,000 kilometres (whichever came first). Such warranty was required under the then applicable motor dealers’ legislation because at the time of its sale to the applicant, the vehicle was less than 10 years old and its odometer reading (as expressed in the sale contract and warranty documents) was less than 100,000 kilometres.

6. The vehicle was a second hand vehicle imported from Japan. It was advertised for sale in Australia by the dealer. The dealer’s advertisement stated that the vehicle was “just imported from Japan”, that the vehicle was fully serviced and “in immaculate condition”, that it had “lots of extras” including 18 inch BBS alloys, new tyres and CD player and an odometer reading of 33,231 kilometres.

7. The applicant approached the dealer by telephone enquiries commencing in or about May 2013. The initial advertised price was $31,500.00 (later advertised for $30,900.00); however, following negotiations with Gianluca Carini (“Mr Carini”), then employed as a Sales Executive for the dealer, the final sale price was $30,000.00. The applicant used loan finance to purchase the vehicle.

8. The applicant submits that he relied upon the representations in the sale contract and warranty documents (as well as the dealer’s advertisements preceding the sale) as regards the kilometres travelled of the vehicle, and that such reliance formed the basis of his decision to purchase the vehicle. The applicant says that he has suffered loss and damage (in an amount of up to $14,946.60) by reason of buying a vehicle with 33,258 kilometres on the odometer, when in fact (on his case) the vehicle had actually travelled 101,600 kilometres (or more) at the time of sale.

9. The applicant’s case is that the true value of the vehicle at the time of sale (having regard to an odometer reading of at least 101,600 kilometres) was $18,500.00, and that in the circumstances he is now entitled (whether under statute or general law) to compensation in an amount of $11,500.00 (being the difference between the purchase price he paid to the dealer and the true value at the time of sale), together with other consequential losses including interest paid to his financier, extra premiums paid to his insurer and the cost of repairs to the vehicle.

10. In respect of repairs to the vehicle, it is the applicant’s case that such repairs were attributable to, or made necessary by, the fact that the vehicle had travelled more than 100,000 kilometres (i.e. not the 33,258 kilometres as represented by the dealer in the sale contract and warranty documents).

11. On the other hand, the dealer’s case is that the applicant’s evidence does not prove to the requisite standard of proof (i.e. the balance of probabilities) an inaccuracy in the vehicle’s odometer reading at the point of sale. Moreover, the dealer submits that even if the Tribunal finds the odometer reading was incorrect, it (the dealer) cannot be responsible for any inaccuracy and indeed could not have been aware of any inaccuracy. In the dealer’s submission there was no misleading and deceptive conduct on its part.

12. The dealer further submits that in any event the applicant had made up his mind to purchase the vehicle for $30,000.00 regardless of whether it had travelled 33,258 (or more) kilometres. In this regard, the dealer puts it that the applicant had done his ‘research’, that he did not want an independent inspection of the vehicle before paying for it and taking delivery of it, and that he knew he was getting a ‘good deal’ at that price for the vehicle.

13. As well, the dealer contests the applicant’s evidence as to the value of the vehicle if kilometres travelled exceeded 100,000. The dealer relies upon its own evidence as to the value of the subject vehicle. It submits that its evidence (including a valuation report which complies with Practice Direction 3 in respect of the Expert Witness Code of Conduct) is more reliable and carries more weight as to the true value of the subject vehicle, in the event the Tribunal decides that the subject vehicle had, in fact, travelled more than 100,000 kilometres on 10 July 2013.

14. As to the allegation that there were repair costs incurred which were attributable to extra kilometres travelled but not disclosed at the time of sale, the dealer points to the fact that it paid for new tyres on the vehicle after the sale, and says that the vehicle was otherwise roadworthy and safe when delivered to the applicant in South Australia. It asserts that the applicant’s claims in respect of repairs to the vehicle are not to be characterised as repairs but rather as modifications for performance enhancement of the vehicle.

JURISDICTION

15. The Tribunal finds that the applicant was a ‘consumer’ within the meaning of s 3 of the Consumer Claims Act 1998 NSW (the “CCA”). The dealer’s principal place of business is in New South Wales and the contract for sale and purchase of the vehicle was formed in New South Wales.

16. The contract was for the supply of goods, in trade and commerce, the goods being a used or second hand motor vehicle. The Tribunal is satisfied that the subject matter of the application is a ‘consumer claim’ within the meaning of s 3A of the CCA.

17. The applicant’s cause of action against the dealer occurred within the relevant three (3) year limitation period prior to the proceedings being filed with the Tribunal. Accordingly, pursuant to sections 3, 3A & 7 of the Consumer Claims Act 1998 NSW (the “CCA”), the Tribunal has jurisdiction. The application was filed on 21 February 2014, and pursuant to the Consumer Claims Regulation 2014 and s14 of the CCA, the applicant’s claim (in an amount of up to $14,946.60) is within the Tribunal’s jurisdictional limit.

PROCEDURAL HISTORY, APPEARANCES, EVIDENCE & SUBMISSIONS

18. This application came before me for formal hearing on 2 April 2015 and 16 June 2015. The application was on remit from the Tribunal’s Appeal Panel. On 11 November 2014, the Appeal Panel had set aside orders of another Tribunal member which were made on 21 July 2014. The Appeal Panel then ordered a new hearing before a differently constituted Tribunal with both parties having the opportunity to adduce fresh or additional evidence: see Prestige Auto Centre Pty Ltd v Apurva Mishra [2014] NSWCATAP 81.

19. The applicant represented himself at the hearing. Apart from his affirmed oral evidence and the oral submissions made during the formal hearing, the applicant relied upon written submissions including submissions received by the Tribunal on 3 and 16 July 2015. In the presentation of his case, the applicant referred to some documents already provided to the Tribunal and the Appeal Panel for the previous hearings. These were copy documents within two manila folders which had been left with the Tribunal file from the hearing in July 2014.

20. Consistent with the Appeal Panel’s order allowing the parties an opportunity to adduce fresh or additional evidence, the applicant also tendered into evidence a bundle of documents which had been provided to the Tribunal on 12 January 2015 (“Retrial Bundle”), and a further bundle of documents which had been provided to the Tribunal on 6 March 2015 (“Retrial Folder 2”), together with another folder of documents received by the Tribunal on 11 June 2015 (“June 2015 Folder”) and three (3) Valuation Certificates of Mr Kristian Appelt of Auto Services Group Pty Ltd trading as AutoValuation dated 1 April 2015 (the “Appelt valuations”).

21. Apart from the Retrial Bundle, Retrial Folder 2, the June 2015 Folder and the Appelt valuation, the applicant tendered affidavits of Benjamin Lippa (sworn 26 February 2015), of Brenton Grigg from Fours N More Automotive Repairs (sworn 25 February 2015) and of Mihir Lade (sworn 24 February 2015), as well as the signed statements of Jonathan Smith of Opimech International Ltd (dated 26 February 2015), of Todd O’Donnell (dated 24 February 2015) and of Keshav Shrestha (dated 8 March 2015). Also at the request of the applicant the Tribunal contacted Mr Jonathan Smith in New Zealand by telephone on both days of the formal hearing so that the Tribunal and the parties could ask Mr Smith questions on his statement dated 26 February 2015. The Tribunal also contacted Mr Appelt by telephone and the parties had an opportunity to ask Mr Appelt questions on his valuations.

22. The dealer appeared by its managing director Mr Dimitriy Akhmetov. As well as affirmed oral evidence and submissions during the formal hearing, Mr Akhmetov relied upon written submissions dated 2 April 2015 and 22 June 2015. The dealer also tendered supporting documents enclosed with correspondence to the Tribunal dated 9 September 2014, 10 October 2014, 13 February 2015, 27 February 2015, 24 March 2015, 26 March 2015 and 27 March 2015.

23. Other than the correspondence with submissions and supporting documents, the dealer tendered statutory declarations of Mr Akhmetov and Mr Carini, online sale price information from valuation appraisal correspondence from Japanese Auto Centre Pty Ltd (Philip Lee), from Elite Motor Sports (Maggie Tran) and from Sinergy Motorsports (Rob Redic), a valuation report with appraisal date 26 February 2015 from Mr Milan Jevremovic of Bedrock Motors Pty Ltd trading as Sydney Car Sales (the “Bedrock Motors Report”), and a letter dated 8 October 2014 from Mr Simon Fell of Comptune Engineering (the “Comptune correspondence”).

24. The second respondent, Khan Motorcar Co Pty Ltd did not appear at the hearing. As previously indicated, the applicant sought no orders against the second respondent.

25. To do justice to the issues posed by the parties’ respective cases I have given consideration to all of the evidence presented and the submissions made by the parties before, during and after the formal hearing. However, the evidence and submissions (whether written or oral) are quite extensive. It is simply not practicable for me to spell out in detail every step of my reasoning processes, or to refer to every piece of evidence. Moreover, my duty to give reasons does not require me to do so: see, for example, Moloney v Collins [2011] NSWSC 628 at [63] – [64]; cited with approval by the Tribunal’s Appeal Panel in Akkari v Sartor [2015] NSWCATAP 79 at [48].

RELEVANT LAW

26. The provisions of the Australian Consumer Law 2010 (ACL) were adopted in New South Wales on 1 June 2011 pursuant to s 28 of the Fair Trading Act 1987 (NSW). The ACL applies in respect of goods and services of a kind ordinarily acquired for personal domestic or household use or consumption in amounts which do not exceed $40,000.00. Goods include used motor vehicles.

27. The ACL applies to proceedings in the Tribunal separate and distinct from the dealer’s warranty: see Burton v Chad One Pty Limited Burton v Chad One Pty Limited [2013] NSWDC 301.

28. The ACL provides a corporation supplying goods and services in trade or commerce must not engage in misleading and deceptive conduct in respect of the sale of any goods and services (see sections 18 and 29 of the ACL). Further, there are consumer guarantees in respect of goods being of acceptable quality and fit for purpose (see sections 54 and 55 of the ACL).

29. Under s 18 of the ACL, a person “must not, in trade or commerce, engage in conduct that is misleading or deceptive, or likely to mislead or deceive”. The conduct (by words, actions, or in certain circumstances, silence) must lead, or be likely to lead, persons to whom it is directed into error, and there is no requirement for an intention to mislead or deceive (Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191 at 198). This imposes a statutory obligation of strict liability. As intention is not relevant, the question is to be determined objectively by the Tribunal.

30. However, any misleading or deceptive conduct, or conduct likely to mislead or deceive, must cause the other party to sustain loss or damage, in the sense that there was reliance on the conduct: see, for example, Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at [26]-[29]; Poulet Frais Pty Ltd v The Silver Fox Company Pty Ltd (2005) 220 ALR 211 at [77]).

31. The measure of damages for misleading or deceptive conduct is analogous to the tortious measure of damages; that is, to put the party seeking relief in the position she or he would have been in had the tort not been committed. The Appeal Panel (at [40] – [41]) found that the preferred measure of damages in the present case, in the event of a finding by the Tribunal of misleading and deceptive conduct, was the difference in value between the amount the applicant paid for the vehicle and its true value at the time of sale, not at some later time. In the latter respect, the previous Member had calculated a difference in value based upon what the applicant had paid for the vehicle relative to its true value at the time of valuation. As a valuation at the time of sale was not before the Tribunal when the presiding Member made her decision on 21 July 2014, this was a reason for the application to be remitted to a differently constituted Tribunal where both parties would be allowed to adduce fresh or additional evidence.

32. By s 54(1) of the ACL, there is a guarantee that goods supplied in trade or commerce are of “acceptable quality”. Subsections 54(2) & 54(3) of the ACL state:

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

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

(b) acceptable in appearance and finish; and

(c) free from defects; and

(d) safe; and

(e) durable;

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

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

(a) the nature of the goods; and

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

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

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

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

33. Pursuant to s 54(7) of the ACL, goods do not fail to be of acceptable quality if the consumer acquiring the goods examines them before purchase, and the examination ought reasonably to have revealed the goods were not of acceptable quality.

34. If the applicant proves breaches of the ACL, the Tribunal must determine an appropriate remedy. The remedies available are set out in s 8 of the CCA. Under s 13(1) of the CCA, the Tribunal “must make such orders as, in its opinion, will be fair and equitable to all the parties to the claim”.

ISSUES FOR THE TRIBUNAL’S DETERMINATION

35. The issues of fact and law for the Tribunal’s determination may be stated as follows:

• Whether the vehicle’s odometer reading of 33,258 kilometres was accurate at the time of the sale (i.e. on 10 July 2013);

• If the odometer reading was inaccurate, whether the dealer, in trade or commerce, engaged in misleading or deceptive conduct, or conduct likely to mislead or deceive, in respect of a supply of goods and services (in this instance, the sale of the vehicle), within the meaning of sections 18 and 29 of the Australian Consumer Law (ACL);

• Whether in making his decision to purchase the vehicle on 10 July 2013, the applicant, in fact, relied upon the representations in the sale contract and warranty documents as to the number of kilometres travelled by the vehicle;

• Whether the applicant suffered loss or damage by reason of contravention by the dealer of sections 18 and 29 of the ACL, and if so, having regard to the parties’ competing valuation evidence, the amount of such loss or damage;

• Further and alternatively, in respect of a case for damages under the general law (i.e. for breach of contract), or for statutory damages under the ACL (i.e. for contravention of the ACL’s consumer guarantees), whether it can be said that the vehicle was at the time of sale unsafe and not roadworthy and therefore not of acceptable quality and unfit for purpose within the meaning of sections 54 and 55 of the ACL, and if so, the amount of the applicant’s general law damages or statutory damages in those circumstances.

DECISION

Was the odometer reading accurate at the time of sale of the vehicle?

36. The applicant put before the Tribunal many documents to prove the inaccuracy of the vehicle’s odometer reading. These included export and car de-registration certificates issued by Japan’s Ministry of Land, Infrastructure, Transport and Tourism (MLIT). MLIT is responsible for the registration of motor vehicles in Japan.

37. The applicant provided evidence in or to this effect and it is evidence which the Tribunal accepts as regards the Japanese vehicle registration system and the procedure for export of de-registered vehicles from Japan:

• All original issued MLIT certificates are protected by hard copy security features such as MLIT logo, photocopy protection and UV watermarks;

• The export certificate and the certificate of vehicle registration and history show details of the exported vehicle, its de-registration, ownership, date of export from Japan and the last two odometer readings as inspected at particular dates by MLIT under its ‘Shaken’ (Jidosha Kensa Torokuseido automobile registration) system;

• The original export certificate is required by the Japanese import agent to complete the export clearance in Japan;

• The original export certificate is sent to the importer (or dealer) outside Japan (in this case, in Australia) for customs clearance and compliance.

38. Mr Jonathan Smith, a director of Optimech International Limited, a New Zealand based company, provided to the Tribunal a signed Statement dated 26 February 2015. Mr Smith was contacted via telephone on both days of the hearing. He gave further oral evidence answering questions put to him by the applicant and the dealer, respectively, and also by the Tribunal. Mr Smith has work experience in Japan and is familiar with the system of importation of used vehicles from Japan including the procedures used and documents issued by the Japanese authorities.

39. MLIT documents (including English translations thereof) for the subject vehicle were put into evidence by the applicant in support of his case to prove the inaccuracy of the odometer reading on the sale contract and warranty documents. The Tribunal notes, however, that a (translated) export certificate without the original certificate attached would not be sufficient to enable export of a used vehicle from Japan. The Japanese authorities cannot permit export of a vehicle without the original certificate.

40. The business of Mr Smith’s company, Optimech, is involved with forensic engineering of imported used motor vehicles. It has developed a system of inspection to determine whether or not there has been odometer tampering of a vehicle. Optimech operates its inspection accreditation program called ‘Speedocheck’ in Japan, New Zealand and Singapore. It has certified odometer readings for over 100,000 imported vehicles. As well as the forensic method of (physical) inspection of an imported vehicle, the Speedocheck program also has regard to relevant ‘vehicle history’ documentation for imported vehicles in order to ascertain whether there has been odometer tampering. Such vehicle history documentation is provided by the authorities within the originating jurisdiction of the imported vehicle. In the case of an imported vehicle originating in Japan, it is the ‘Shaken’ system used by MLIT.

41. The Tribunal is satisfied that Mr Smith has the experience and expertise to comment upon the systems in Japan, and also as regards whether the information provided by the Japanese authorities is of assistance to motor dealers and private buyers in Australia for the purpose of verifying the authenticity of odometer readings.

42. When questioned by the Tribunal during the hearing, Mr Smith confirmed these matters as put in his written statement signed on 26 February 2015:

“9.   When a vehicle is de-registered in Japan an original deregistration document is issued. This is supplied to the Japanese vehicle import agent who forwards this document to the overseas motor vehicle purchaser. This document is a formal requirement in New Zealand for compliance registration of a vehicle. A similar system I believe operates in Australia.

10.   I am aware that Japan Export Vehicle Inspection Center Company Limited (JEVIC) was requested to provide a copy of the Japanese motor de-registration document for the Mitsubishi EVO VIII vehicle. JEVIC have obtained a replacement certificate from MLIT and provided a translation in English. JEVIC also provide odometer verification checking services in Japan but I understand they have not inspected the vehicle or provided any mileage certification for this vehicle. I have not seen an original copy of a JEVIC certificate for this vehicle and have only viewed an electronic copy 00722 obtained by JEVIC from MLIT.

11.   In the absence of a physical inspection to confirm whether a vehicle odometer has been tampered, the MLIT document which has been translated by JEVIC can be used to provide some authenticity of mileage verification. In Japan, a vehicle is subjected to a mandatory inspection at Year 3 after new vehicle registration and then after every two year intervals at Year 5, 7, 9, 11 etc.

12.   In the bottom right corner of the document, the MLIT de-registration document lists the registration history mileage recorded at the previous Shaken inspection in Japan. In the document there will be a date (Japanese format) proceeded by a mileage recorded at the time of last Shaken inspection. The document records the last two recorded shaken inspection entries.

13.   These Shaken entries should be a lower mileage than at the mileage displayed at the time of export. A vehicle that displays a mileage on the odometer that is lower than the Shaken entries on the De-registration document is a red flag indicator that the vehicle mileage has been tampered with.

14.   The JEVIC translated document appears to show that the last two Shaken entries for this vehicle are 101,600 km (9 Feb 2011) and 69,300 km (6 Mar 2009). I understand that the mileage shown on the MLIT document is higher than what is recorded for the vehicle when registered in Australia in 2012.

15.   Based on information supplied it does appear likely that the vehicle was tampered with prior to being sold in Australia.”

43. The dealer submitted that the odometer reading of 33,258 kilometres on the vehicle sold to the applicant on 10 July 2013 was accurate, and that the documents referred to by the applicant in support of his case for inaccuracy are “flawed”, unsafe and, therefore, unreliable. In this respect, in his Statutory Declaration made on 12 February 2015, the dealer’s director, Mr Akhmetov, referred to an extract of an article published in New Zealand by Optimech entitled “The ‘Claytons’ Speedo Check –JEVIC and NTKK” as regards the unreliability of odometer checks and certificates issued by JEVIC.

44. Further, the dealer points to this statement in a letter dated 8 September 2014 from JEVIC:

“We have physically inspected approximately 450,000 used vehicles specifically for odometer fraud, and are one of the most experienced inspectorates in this field.

The Inspections are complete by physical inspection of the vehicle (at times with the physical removal of the cluster and diagnostic checks) and examined through national databases”.

45. There is no evidence that JEVIC conducted a physical inspection of the subject vehicle. Mr Smith also confirmed in his evidence to the Tribunal that a physical inspection is recommended. However, the Tribunal is not persuaded that the absence of a physical inspection and any other doubts about the reliability of JEVIC translations, are sufficient to tip the scales (i.e. on the balance of probabilities) in favour of the dealer’s case that the odometer reading (33,258 kilometres) on the sale contract and the warranty documents was, in fact, accurate.

46. The Tribunal accepts Mr Smith’s evidence that the MLIT document translated by JEVIC can be used to provide some authenticity of mileage verification and that in all the circumstances, but particularly the Shaken entries on the de-registration document (as translated by JEVIC), it appears likely there was odometer tampering in the vehicle prior to it being sold in Australia.

47. Accordingly, the Tribunal is satisfied there is sufficient evidence before it to support a finding on the balance of probabilities that the odometer reading of 33,258 kilometres represented an inaccurate record on the dealer’s sale contract and warranty documents as regards the number of kilometres travelled by the vehicle. The Tribunal accepts the applicant’s case that the best evidence as to the kilometres travelled by the vehicle at the time of sale on 10 July 2013 is 101,600 kilometres.

Whether there was Misleading & Deceptive Conduct within s 18 and s 29 of the ACL

48. The relevant precondition for the application of sections 18 and 29 of the ACL is that a respondent’s conduct was in trade or commerce in the sense that it involves a trading or commercial character. The Tribunal is satisfied that the dealer’s conduct in selling the vehicle with an inaccurate odometer reading was in trade or commerce.

49. The dealer submitted that in all the circumstances it acted honestly and reasonably and that it gave appropriate warnings to the applicant about the authenticity of the vehicle’s odometer reading. In this regard, Mr Carini gave sworn evidence that during his telephone conversations with the applicant prior to completion of the sale on 10 July 2013, he warned Mr Mishra that the odometer reading on the vehicle could not be guaranteed and also emphasised that the applicant should undertake an independent inspection of the (imported) vehicle before he paid for it and took delivery of it.

50. The dealer’s intention, and the manner in which it communicated such intention to the applicant prior to the sale of the vehicle, is relevant to the issue of the applicant’s reliance on the dealer’s conduct. However, as sections 18 and 29 of the ACL impose obligations of strict liability, the dealer’s intention is of no moment to the question of whether there was misleading and deceptive conduct. That is a question which must be determined, objectively, by the Tribunal.

51. The Tribunal finds that the dealer’s conduct (i.e. providing inaccurate information as to the kilometres travelled by the vehicle), determined as a question of fact arising from the context of the evidence and relevant facts and circumstances, was misleading conduct, inducing, or likely to induce, the other party into error.

Reliance

52. In the dealer’s case, there is an expert report of Mr Milan Jevremovic of Bedrock Motors Pty Ltd trading as Sydney Car Sales with an appraisal date of 26 February 2015 (previously referred to as the “Bedrock Motors Report”). Consistent with the requirements of the Tribunal as regards expert opinion evidence (see Practice Direction 3), Mr Jevremovic acknowledges in the Bedrock Motors Report that he has read and agreed to be bound by the Expert Witness Code of Conduct.

53. In the Bedrock Motors Report, Mr Jevremovic provided information as to his experience in importing and selling second hand motor vehicles (including Mitsubishi Lancer vehicles) from Japan in Australia for more than 15 years, and also in providing valuations as to the true value in the Australian market for second hand vehicles imported from Japan. The Tribunal does not accept the applicant’s submission that because Mr Jevremovic’s appraisal of the vehicle was not based on a physical inspection, the opinion evidence in the Bedrock Motors Report must be given very little, if any, weight. It is not persuaded that an assessment based on photographs and documents provided by the dealer cannot form a proper and reliable basis for expressing the opinions which are put in the Bedrock Motors Report. Therefore, the Tribunal is satisfied as to the knowledge and expertise of Mr Jevremovic to provide opinion evidence to the Tribunal as to the nature of and characteristics of the subject vehicle and as to its true value.

54. As put in the Bedrock Motors Report, the subject vehicle is “not a typical road vehicle”. It is a high performance sports car which has appeared on popular motoring television shows such as ‘Top Gear’. It has won many major awards in the motoring world; for example, Consumer Search’s best aggressive sports sedan in Best Sports Sedan in June 2006. It is a vehicle that has a two litre turbo-charged engine with an all-wheel drive system; an aluminium roof panel and other reductions in body weight; capability of achieving 0 – 100 kilometres per hour in 5.8 seconds; and many other features that produce an extremely high power output per litre of any road car. This is uncontroversial. There are many reviews and forum web sites about the vehicle on the internet. Even the applicant conceded to the Tribunal that his decision to purchase the vehicle was an ‘emotional’ decision and that there was no doubt he wanted to purchase this particular vehicle.

55. The Tribunal accepts that the subject vehicle is specifically designed for high performance motoring enthusiasts and therefore would not appeal to ordinary drivers. Such circumstance means that the factors which determine the sale price of the subject vehicle are different to a typical road vehicle. In the Bedrock Motors Report, Mr Jevremovic lists these factors as material in determining the sale price:

• That the 2004 Mitsubishi Lancer Evolution VIII MR model is a highly sought after model among performance enthusiasts;

• That the subject vehicle has received critical acclaim through many awards and reviews (as referred to above);

• That the subject vehicle has the ‘signature’ body colour ‘Gun Metal Grey’, the same colour that appeared on a review on the ‘Top Gear’ television program;

• That the signature colour Gun Metal Grey would add a premium to the sale price;

• That a Mitsubishi Lancer Evolution VIII MR model in good condition and with high mileage will consistently be in higher demand and achieve a significantly higher sale price as compared with the same vehicle with low mileage but in moderate condition.

56. The Tribunal accepts the evidence of Mr Carini as set out in his Statutory Declarations made on 6 September 2014 and 12 February 2015. Such evidence was in or to this effect: Mr Carini informed the applicant that due to a lack of information about the history of the subject vehicle, the odometer reading on the subject vehicle could not be assured by the dealer, and further that Mr Carini recommended to the applicant an independent inspection of the subject vehicle before finalising any purchase of it.

57. Mr Carini was present to give evidence on the first day of the hearing but was not called upon, because the applicant did not complete his evidence. While Mr Carini (who is no longer employed by the dealer) could not be present in person on the second day of the hearing, he was contacted by telephone to provide sworn oral evidence to the Tribunal. His oral evidence reflected the matters stated in the statutory declarations. To the extent that there are differences in the recollections of the applicant and Mr Carini, respectively, as regards material matters discussed during the telephone conversations which preceded the sale of the subject vehicle, as presiding member of the Tribunal with the benefit of hearing both witnesses of fact give their evidence, I prefer the evidence of Mr Carini. In my opinion, Mr Carini’s recollection of the material matters discussed in his telephone conversations with the applicant are consistent with the facts and circumstances established on the evidence at the time of sale. At all material times, the parties knew that the subject vehicle was a second hand vehicle imported from Japan. The applicant had previously purchased (but not from the dealer) another vehicle imported from Japan and he was aware of the procedures for importing second hand vehicles into Australia. The dealer did not have, and could not obtain, a service record or history about the subject vehicle, and the dealer did not know whether the engine, features or other parts on the subject vehicle were modified, replaced or re-built. The evidence of Mr Shreshra (a friend of the applicant who visited the dealer’s Auto Centre on 8 July 2013) does not assist the Tribunal. It is of no moment Mr Carini did not mention to Mr Sheshra that the dealer was unable to guarantee whether the vehicle’s odometer reading was accurate, because I am satisfied telephone conversations in or to that effect had already occurred between Mr Carini and the applicant.

58. The Tribunal finds that in all the circumstances the applicant in making his decision to purchase the subject vehicle on 10 July 2013, did not rely upon the representations in the sale contract and warranty documents as to the number of kilometres travelled by the subject vehicle. I am satisfied that the applicant had made up his mind to purchase the subject vehicle for $30,000.00 regardless of whether it had travelled 33,258 (or more) kilometres, that he did not want an independent inspection of the subject vehicle before paying for it and taking delivery of it, and that he understood he was getting a fair deal at that price for the subject vehicle.

59. Accordingly, the applicant has not established, on the balance of probabilities, that the dealer’s misleading and deceptive conduct caused him to sustain loss or damage, in the sense that there was reliance on the conduct.

The Applicant’s Loss in respect of misleading and deceptive conduct

60. Even if the Tribunal had decided differently the issue of causation (reliance), I am not satisfied that the applicant has established on the balance of probabilities loss or damage by reason of the misleading and deceptive conduct in an amount of $11,500.00 or in any lesser amount.

61. The applicant’s case for loss and damage is based upon the Appelt valuations dated 1 April 2015. Such valuations disclose a market value (as at July 2013) for a 2004 Mitsubishi Evolution VIII MR vehicle that has travelled 101,600 kilometres as $18,500.00. On that basis it is submitted that the applicant’s loss is $11,500.00 being the difference between the $30,000.00 he paid for a vehicle that had (contrary to the odometer reading on the sale contract and warranty documents) travelled 101,600 kilometres, and the true market value ($18,500.00) of such vehicle. As indicated, the applicant also seeks other consequential losses including interest paid to his financier, extra premiums paid to his insurer and the cost of repairs to the vehicle.

62. Mr Kristian Appelt of AutoValuation was contacted by telephone and gave oral evidence to supplement the evidence in the Appelt valuations. Mr Appelt acknowledged that he had not read or agreed to be bound by the Expert Witness Code of Conduct; indeed, he indicated to the Tribunal that he was unaware of the Code of Conduct.

63. On the other hand, the dealer submitted the evidence establishes that the subject vehicle even with an odometer reading of 102,000 kilometres had a retail value of at least $30,000.00 and that in such circumstances; no loss was suffered by the applicant. Principally, the dealer relies upon the Bedrock Motors Report which indicates a retail value of between $32,000.00 and $34,000.00 for a 2004 Mitsubishi Lancer Evolution VIII MR vehicle which had travelled 102,000 kilometres.

64. In addition, the dealer relied upon other evidence as to the retail value of a 2004 Mitsubishi Lancer Evolution VIII MR vehicle which had travelled at least 101,600 kilometres including a letter from Edward Lee’s Japanese Auto Centre Pty Ltd dated 2 August 2014 indicating a retail value of $32,000.00 for 110,000 kilometres, a letter from Elite Motor Sports dated 2 September 2014 indicating a retail value of between $31,000.00 and $35,000.00 for 100,000 to 120,000 kilometres, and a Sinergy Motorsport Valuation Certificate dated 2 October 2014 indicating a retail value of $30,000.00 for 100,000 kilometres. As well, the dealer tendered as evidence in its case, online sales price information from dated 24 August 2014 indicating a retail value of $30,000.00 for 123,000 kilometres.

65. The applicant submits that the dealer’s evidence as to valuation carries no evidentiary weight in the Tribunal’s determination. It is said that the professional expertise of those providing the evidence (including the Bedrock Motors Report) is to be doubted and further that such evidence is not based on a physical inspection of the subject vehicle. In particular, the applicant says the dealer’s valuation evidence is based on (flawed) assumptions that the subject vehicle was roadworthy and also that such evidence does not take into account that the subject vehicle had rust in hidden and less accessible areas.

66. I prefer the dealer’s valuation evidence. As indicated, I am not convinced in the particular circumstances of this case that the absence of a physical inspection of the subject vehicle by Mr Jevremovic (or indeed any of the other persons providing valuation evidence in the dealer’s case) means the Tribunal must disregard such conclusions as to the retail value of the subject vehicle as at July 2013. For reasons more particularly set out below, the applicant has not established, on the balance of probabilities, that the subject vehicle lacked roadworthiness on 10 July 2013. Any issue with the tyres at the time of sale was addressed by the dealer paying $740.00 for brand new tyres and bearings after mediation with NSW Fair Trading.

60. Nor am I persuaded as to the applicant’s contention that Mr Jevremovic is not credentialed to give the evidence in the Bedrock Motors Report. I am satisfied as to Mr Jevremovic’s knowledge and experience in the relevant field of the Tribunal’s enquiry. I note the acknowledgment in his report dated 26 February 2015 that he read and agreed to be bound by the Expert Witness Code of Conduct (a requirement of the Tribunal’s Practice Direction 3).

61. Accordingly, I find that the retail value of the subject vehicle on 10 July 2013 was at least $30,000.00 and that the applicant did not suffer any loss or damage by reason of a misleading and deceptive representation as regards the kilometres travelled of the subject vehicle at the time of sale.

Whether there has been any contravention by the dealer of the consumer guarantees in the ACL and/or breach of contract under the general law

69. Other than the allegation of odometer tampering, the applicant alleges he has suffered loss and damage by reason of breaches of contract or contravention of the consumer guarantees because the subject vehicle was not roadworthy at the time of sale and had rust in hidden areas. The particular issues as to the nature and extent of repairs required to make the subject vehicle fit for purpose and of acceptable quality are put in the affidavit of Brenton Grigg of Fours N More Automotive Repairs sworn 25 February 2015 attaching copies of a letter dated 8 January 2015 and invoices dated 17 July 2013, 3 October 2013 and 7 February 2014.

70. On the other hand, the dealer relies upon the Comptune correspondence. Mr Simon Fell of Comptune Engineering was asked to review photographs of rust on the vehicle on the subject vehicle and found: “while rust is apparent, the degree of rust is not extensive, not significant, and not capable of rendering the subject vehicle unroadworthy, unsafe or unfit to drive. The photographs show that the surface rust is ordinary wear and tear”: see letter dated 8 October 2014. This conclusion is supported by the applicant’s own documents (document 34 in the applicant’s first bundle for the hearing in July 2014) where the applicant states on 24 September 2013: “I bought my car from Sydney, 34,000 KM but its got surface rust on few components … otherwise a good car”.

71. The applicant bears the onus of establishing his case in respect of repairs, on the balance of probabilities. He relies on the evidence of Mr Grigg. No other mechanic gave evidence in the applicant’s case. The Tribunal is not satisfied that Mr Grigg’s statements in his affidavit and in the letter of 8 January 2015 attached to his affidavit establish the subject vehicle was unfit for purpose and of unacceptable quality. There are inconsistencies in Mr Grigg’s evidence which cause me to doubt its reliability to support the applicant’s contentions that the subject vehicle was not roadworthy, not safe and therefore unfit to drive. For example, in the Tax Invoice dated 17 July 2013, Mr Grigg states: “Check brakes all round Fr45% Rr60% + all rotors just above minimum thickness. Will need replacing next pad change.” Yet in the letter dated 8 January 2015, Mr Grigg says under item 3: “3. Brake Disc/rotors are very worn/lipped and will require replacing as on minimum thickness … we removed all 4 brake pads and rotors”.

72. I prefer the evidence of Mr Fell of Comptune. I find that the original brakes were roadworthy at the time of sale, that many of the repairs done by Fours N More Automotive Repairs were outside the dealer’s warranty or related to ordinary wear and tear items, and that some of the works done by Fours N More were performance modifications (not repairs) to the subject vehicle.

73. In the circumstances, and having regard to the fact that the dealer paid the cost of supplying new tyres to the subject vehicle, I am not satisfied on the evidence that the applicant has made out a case for any relief on the basis of supplying a vehicle which was unfit for purpose and not of acceptable quality.

ORDERS

74. The Tribunal accepts the applicant may genuinely believe that the dealer failed him and that he is justified in bringing this claim for damages in the Tribunal. Certainly, having regard to the Tribunal’s earlier finding as to misleading and deceptive conduct by reason of the incorrect odometer reading on the sale contract and warranty documents, it cannot be said, in my opinion, that the applicant has brought a frivolous or vexatious case which is otherwise misconceived or lacking in substance: see s 55 of the Civil and Administrative Tribunal Act 2013 NSW (the “NCAT Act”).

75. Nevertheless, the Tribunal must consider all of the evidence, objectively, in order to make findings of fact and then apply the law. Ultimately the Tribunal concludes that in the absence of findings as to relevant causation (particularly, reliance) on misleading and deceptive conduct, as to relevant breaches of contract or contravention of the ACL’s consumer guarantees of fitness of purpose and acceptable quality, or as to any loss or damage suffered, it is neither fair nor equitable (see s 13 of the CCA) that the dealer be held liable for the damages now claimed by the applicant.

76. The dealer submits that I should refer the applicant for prosecution because of a contravention of s 71 of the NCAT Act. The dealer cites the circumstance that the applicant provided false and misleading information to the Tribunal at the first hearing in July 2014 (i.e. an alteration of the original Sinergy valuation). However, such submission does not arise for my determination on this application. I am not an “authorised official” who may initiate proceedings for an offence under the NCAT Act: see s 75. Further, I observe that any prejudice to the dealer arising from the applicant’s alteration of the original Sinergy valuation during the hearing before another Member of the Tribunal in July 2014, was addressed in the Appeal Panel’s decision to remit the parties’ dispute to a differently constituted Tribunal with both parties having the opportunity to adduce fresh or additional evidence: see Prestige Auto Centre Pty Ltd v Apurva Mishra [2014] NSWCATAP 81.

77. In its submissions dated 22 June 2015, the dealer also requested an order for costs and asked to be heard on that matter. The matter of costs was not argued at the hearing on 2 April 2015 and 16 June 2015, although there are references to costs in the dealer’s earlier written submissions: see, for example, the dealer’s letter 27 February 2015. In considering whether it seeks an order for costs, the dealer should look at all of the Tribunal’s findings of fact and law as set out in these Reasons. If it wishes to press the matter of costs, then the dealer should so inform the Deputy Divisional Registrar within 10 days from the date of publication of these Reasons and if the dealer wishes to make any further written submissions as to why an order for costs should be made, then those written submissions should also be filed within 10 days.

78. If such a claim is pressed then the applicant should file written submissions in reply within 20 days from the publication of these Reasons. At the expiration of that time the Tribunal will consider the submissions, if any, and will decide on the papers what order, if any, should be made.

79. If submissions on costs are to be filed, they should include submissions on s 60 of the NCAT Act and as to the ‘special circumstances’ to be taken into consideration.

80. Subject to the question of costs, the application must be dismissed.

D G Charles

General Member

Civil and Administrative Tribunal of New South Wales

3 September 2015

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

Registrar

Decision last updated: 08 October 2015