Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Ozzy's Cheapest Cars Pty Ltd t/a Ozzy Car Sales v Soifua [2022] NSWCATAP 86 Hearing dates: 10 March 2022 Date of orders: 28 March 2022 Decision date: 28 March 2022 Jurisdiction: Appeal Panel Before: S Thode, Senior Member D Robertson, Senior Member Decision: (1) Leave to appeal refused. (2) Appeal dismissed. Catchwords: CONSUMER LAW – No issue of principle Legislation Cited: Australian Consumer Law (NSW) Civil and Administrative Tribunal Act 2013 (NSW) Cases Cited: Collins v Urban [2014] NSWCATAP 17 Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 Category: Principal judgment Parties: Ozzy's Cheapest Cars Pty Ltd t/a Ozzy Car Sales (Appellant) Kelekolio Soifua (Respondent) Representation: Appellant – self-represented Respondent – self-represented File Number(s): 2021/00358129 Publication restriction: Nil Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 15 December 2021 Before: J A Camden, General Member File Number(s): MV 21/27161 Reasons for decision Introduction 1. The respondent to this appeal (Mr Soifua) commenced proceedings in the Tribunal seeking remedies under the Australian Consumer Law in respect of a second hand motor vehicle purchased from the appellant (the dealer) on 21 November 2019. 2. Mr Soifua asserted that the vehicle suffered a major defect and that he had rejected the vehicle. 3. The hearing of Mr Soifua's application took place on 19 October 2021. Mr Soifua led evidence from himself, two daughters, his son and a daughter-in-law. Mr Soifua also relied upon invoices, service reports and quotations from a number of mechanics. 4. The dealer did not file any statement or other evidence. However, Ms Hirst, the office manager of the dealer, gave oral evidence at the hearing. As the Tribunal noted in its decision, the dealer had not sought access to inspect the vehicle prior to the hearing. 5. The dealer informed the Appeal Panel that it had sought to obtain the recording of the hearing to prepare a transcript but had been informed that, owing to a technical issue, no recording was available. 6. The Tribunal delivered its decision on 15 December 2021. The Tribunal ordered the dealer to pay Mr Soifua the sum of $20,928.90 and directed Mr Soifua to do all things necessary to effectively transfer the vehicle into the name of the dealer. 7. The Appeal Panel was informed that the dealer had paid the judgment and that Mr Soifua had secured the release of a security interest held by his bank over the vehicle and returned the vehicle to the dealer. The decision 1. The Tribunal summarised Mr Soifua's evidence at [11] –[23]: 11 The applicant's evidence is that after purchase, the vehicle first broke down 8 December 2019. Five phone calls to representatives of the respondent between 9 and 14.12.2019 ensued on behalf of the applicant. An email was sent by the applicant's daughter on 12 December 2019 requesting return of the vehicle and full refund (page 30). 12 On 16.12.2019 a 2 hour inspection was conducted by 'Keep Rolling Mobile Mechanics' (page 31-32) with suggested repairs totalling between $5,000 and $7,000. The following items were identified: (1) Front 'diff' seal leak (2) Engine drive belt minor cracks (3) Drive belt tensioner leaning forward pushing belt to edge – tensioner requires replacement soon (4) Air filter to be replaced soon (5) Cabin filter heavily blocked not replaced or inspected for a very long time (6) Rear shackle bushes cracking indicating rubber worn and requires replacement (7) Spare wheel and after market rims noted (8) No service sticker on window – unknown when next service due (9) Clutch bleeder moist – indicating minor fluid weep (10) Brake and clutch fluid dirty requires flushing (11) Oil weep around gear box and engine join indicating main rear seal is starting to leak (12) Rear shock absorbers starting to leak (13) Front shock absorbers felt worn on bounce test (14) No service book 13 I note this may well be the type of inspection that a prospective buyer might have been best advised to engage before purchasing a seven year old vehicle with 254,271kms on the odometer. It appears no pre-purchase inspection was arranged by the applicant. 14 I consider that items 1 through 6, 10, and 11 would be items related to fair wear and tear based on age and distance travelled by the vehicle before sale. Items 7, 8 and 14 are in my view observations that do not further assist my determination of this application. Item 9 is a sign of impending clutch/gearbox failure that eventually occurred and is discussed later in this determination. Items 12 and 13 are in my view matters of vehicle safety – particularly the front shock absorbers, as this component of the vehicle has significant impact on braking capability in emergency situations and arises less than one month after purchase of the vehicle. 15 The respondent towed the vehicle on 18 December 2019 to the respondent's premises for repairs. No receipt or repair report was provided to the applicant when the vehicle was made available for collection on 23 December 2019. I have no further evidence as to what repairs were effected – for instance whether or not the shock absorbers were replaced. 16 On 17 January 2020 the vehicle was taken by the applicant to Penrith Mechanical Autocare & Tyres for a log book service. A 55 point safety inspection was completed with various vehicle fluids replaced and multiple filters replaced. This service identified Rear main seal leak and possibly noisy dual mass flywheel (page 33). 17 From 27 January 2020 the vehicle gear shift began to 'freeze' and the vehicle was unable to move. The applicant's daughter called the respondent and again asked for return of the vehicle and refund. The vehicle was delivered to the respondent for repair. 18 On 5 February 2020 the vehicle was returned to the applicant and an invoice (page 44) was given to the applicant to pay TJ Maxx Auto $538. TRJ Maxx provided 3 months warranty on that gear shift repair. 19 On 9 December 2020, just over a year after purchase, the vehicle would not start and was towed by the applicant to Sinclair Ford in Kingswood. Sinclair Ford produced an invoice estimating repairs required in the amount of $4,145.90 for failed gearbox/transmission. Further described in the Sinclair Ford invoice dated 12.02.2021 as "… internal transmission failure, removed transmission and inspected. Found clutch slave cylinder leaking and pilot bearing worn/damaged. Removed and replaced clutch assembly, slave cylinder, flywheel, flywheel bolts and clutch lines." The applicant paid for these repairs." 20 On 25 March 2021 the vehicle broke down again. 'Keep Rolling Mobile Mechanics' assessed the vehicle on 31 March 2021 (pages 37-38) and conducted a diagnosis of the issues: "…started up the engine and confirmed the engine oil warning light was on and the engine had a lot of rattle to it… Check oil level and found it was full…. Vehicle's oil pump may of failed and the oil change probably won't fix the issue, customer still wanted the oil change done. Jacked up the vehicle. Carrying out the correct oil change procedure for the ranger's oil change, drained the engine oil first. Filled engine with new oil, then removed the oil filter and replaced the filter. Started the engine within 10 minutes of the engine oil and oil filter being changed. Checked engine running condition and for the oil light. Engine still very loud and rattling, and oil warning light still on. This indicated the oil pickup may be blocked, or the oil- pump may of failed. Customer … did not want to go ahead with any repairs… 21 On 12 April 2021 the vehicle was towed to Sinclair Ford Kingswood. This was just over 16 months after purchase. As at the date of hearing the vehicle was still located at Sinclair Ford. 22 On 14 April 2021 Sinclair Ford provided a quote to remove and replace engine assembly with a second hand engine. The precise nature of the internal failures within the engine are not noted on the quote, but the repair procedure, consumables, and parts with labour are estimated at $12,560 in order for the vehicle to run correctly again (page 45). This document does not show an odometer reading at the time of the issue of the quote. 23 The parties appear to agree that the vehicle has travelled over 20,000km between 21 November 2019 and 12 April 2021 – a little over 16 months of use. 1. The Tribunal noted the dealer's submissions: 26 The Respondent's case was that the vehicle was purchased by the applicant on 21 November 2019, having travelled 254,271kms on the date of sale, and sold for $15,950 plus $295 admin charge. … 32 On 9 December 2020 – just over 12 months after purchase and more than 10 months since the respondent arranged and paid for TJ Maxx Autos repair, the vehicle was taken to Sinclair Ford and clutch fault diagnosed – slave cylinder leaking and pilot bearing worn/damaged. The respondent considers this to be a fair wear and tear event rather than an issue falling within S.54 or S.260 of the Australian Consumer Law. … 35 By 31 March 2021 the respondent says the vehicle had travelled 24,864kms since purchase. The respondent highlights that the vehicle was inspected again by 'Keep Rolling Mobile Mechanics' as the oil light stayed on. The respondent highlighted in that report the possibility of oil pickup blocked or oil pump failure and noted [that the] applicant asked only for oil change and no further repairs. 1. The Tribunal noted: 39 I consider that the respondent has mistakenly interpreted Section 55 ACL in respect of guarantee as to fitness. The respondent says the applicant disclosed no purpose for which the vehicle was intended at the time of purchase. I consider it quite a stretch of analysis of the facts to infer so narrow a reading of the section. I consider that a reasonable person in the position of the applicant would be entitled to infer that a seven year old vehicle purchased for $15,950 (plus administration fee $295.00) would be reliable, provided reasonably maintained, and not subject to major defect within the first 3 years of operation after purchase. 40 The respondent suggested there has been no specificity in the Sinclair Ford quote with a diagnosis of the problem requiring engine replacement. The further suggestion in oral evidence and in relay of conversation in the applicant's family member affidavits that the engine had been damaged by abnormal use is subject to conjecture only and no firm evidence, expert or otherwise, in support of any claim of driver abuse or misuse has been provided in evidence by the respondent. 1. The Tribunal referred to the relevant provisions of the Australian consumer Law (NSW) and held: 46 Section 54 requires that a failure of guarantee of acceptable quality must be at the time the goods are supplied although the extent of the failure must not necessarily be apparent at that stage. To the extent that the applicant contends that the motor vehicle was not free from defects within the meaning of s.54 (2)(c) I am satisfied that the applicant has establish that there was an actual latent defect in the motor vehicle at the time of supply which rendered it of unacceptable quality (see Alliance Motor Auctions Pt Limited v Saman [2018] NSWCATAP 137). Although it is not necessary for the applicant to prove the precise nature of the defect (Munday v Empire Auto Group Pty Ltd [2019] NSWCATAP 52). 47 Part 5.4 of the Australian Consumer Law provides remedies for breach of statutory guarantees and s.259 provides that a consumer may take action against a supplier if one of the guarantees that relate to the supply of goods is not complied with. … 48 I am satisfied that the applicant has made out the existence of major failure. I am satisfied that the applicant is entitled to have the major failure remedied by returning the vehicle to the respondent and for him to recover his reasonable expenses, though not all of his claim. … 56 The applicant has provided evidence supported by independent mechanics within two months of purchase of the vehicle to herald major defects which eventually befell the vehicle. I note my recitals at [10], [14] and [16] above. 57 It is reasonable and appropriate to conclude that the applicant was not able to effectively engage the respondents to engage with the growing array of problems which I am satisfied were a feature of the vehicle at the time of purchase but which gradually revealed themselves over a period of 16 months. 58 Section 259 (3) of the Australian Consumer Law provides that if a failure to comply with a guarantee cannot be remedied or is a major failure the consumer may notify the supplier that the consumer rejects the goods along with the grounds of objection and recover compensation and damages for failure to comply with the guarantee. 59 In the present case I am satisfied that the time for return of the goods had not expired having regard to the opportunity which was given to the respondents on many occasions to rectify the many arising faults. The vehicle was sold to the applicant as a seven year old vehicle, a used vehicle with a high number of kilometres travelled. Notwithstanding this class and kind of vehicle is generally intended to be capable of serviceable life well beyond seven years and potentially use of over 279135 kilometres as a recognised robust vehicle if well maintained. I am satisfied there is evidence that the applicant maintained the vehicle during the time he has owned it. … 61 I am satisfied that there has been a major failure with this vehicle and that the underlying causes were latent in the vehicle at the time of purchase. This is because I am satisfied on the evidence before me: - Within two months of purchase the vehicle required $538 Gear shift repair - Just over a year after purchase the vehicle required $4,145.90 repairs for failed gearbox/transmission - The vehicle's engine has failed at just over 16 months since purchase and requires second hand engine replacement totalling $12,560. 1. The Tribunal awarded Mr Soifua a refund of the purchase price and fees paid at the time of purchase ($16,245) and reimbursement of the cost of repairs to the gear shift ($538) and the transmission and gearbox ($4,145.90). The scope and nature of internal appeals 1. By virtue of s 80(2) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), internal appeals from decisions of the Tribunal may be made as of right on a question of law, and otherwise with leave of the Appeal Panel. 2. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel set out at [13] a non-exclusive list of questions of law: 1. Whether there has been a failure to provide proper reasons; 2. Whether the Tribunal identified the wrong issue or asked the wrong question. 3. Whether a wrong principle of law had been applied; 4. Whether there was a failure to afford procedural fairness; 5. Whether the Tribunal failed to take into account relevant (i.e., mandatory) considerations; 6. Whether the Tribunal took into account an irrelevant consideration; 7. Whether there was no evidence to support a finding of fact; and 8. Whether the decision is so unreasonable that no reasonable decision-maker would make it. 1. The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Schedule 4 of the NCAT Act. In such cases, the Appeal Panel must be satisfied that the dealer may have suffered a substantial miscarriage of justice because: 1. The decision of the Tribunal under appeal was not fair and equitable; or 2. The decision of the Tribunal under appeal was against the weight of evidence; or 3. Significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). 1. In Collins v Urban [2014] NSWCATAP 17, the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Schedule 4 may have been suffered where: … there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance. 1. Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Schedule 4, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b). 2. In Collins v Urban, the Appeal Panel stated at [84(2)] that ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed. 1. Ms Hirst, who appeared for the dealer, acknowledged that the dealer did not rely upon any questions of law but rather sought leave to appeal on the grounds that the decision was not fair and equitable and was against the weight of evidence. Consideration 1. The dealer's submissions asserted: "Much of the verbal evidence given during the hearing was not taken into consideration or addressed in the decision made by [the Tribunal] … Furthermore, evidence given both written and verbal were also contrary to the decisions made by [the Tribunal]." 1. As an Appeal Panel stated in Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10]: "An appeal does not provide a losing party with the opportunity to run their case again". It is not enough, to obtain leave to appeal, for the dealer to establish only that others might have come to a different conclusion on the evidence before the Tribunal. 2. The dealer's written submissions relied upon what the dealer asserted were erroneous statements of the evidence in the Tribunal's decision, in particular: 1. The dealer submitted that item 9 in the report from Keep Rolling Mobile Mechanics was inaccurately reproduced in paragraph [12] of the decision. Item 9 in the report was "Clutch bleeder is moist indicating it may have a minor fluid weep". Item 9 in paragraph [12] was "Clutch bleeder moist – indicating minor fluid weep". The dealer submitted that the finding in paragraph [14] of the decision that item 9 "is a sign of impending clutch/gearbox failure that eventually occurred" did not take into account the fact that the Keep Rolling report used the terms "may" and "minor". 2. The dealer submitted that a statement by the Tribunal in paragraph [38] of the decision that the dealer "did not make specific submissions on 12 February 2021 gearbox/transmission failure requiring repairs totalling $4,145.90 some 14 months after purchase" was not correct, as the dealer had submitted that the repair of the transmission was a "fair wear and tear event". 1. On our reading of the decision, we do not understand these matters to constitute errors in the Tribunal's assessment of the evidence. Putting the position at its highest, from the dealer's perspective, they reflect insubstantial infelicities of language. 2. However, in circumstances where the dealer is not legally represented, it is appropriate that the Appeal Panel consider the substance, and not merely the form, of the dealer's submissions. 3. As we understand the dealer's written submissions, and the oral submissions of Ms Hirst, the dealer asserts that four conclusions reached by the Tribunal were against the weight of evidence: 4. Those conclusions were: 1. The Tribunal's conclusion that the moistness of the clutch bleeder was an indication of impending clutch/gearbox failure. 2. The Tribunal's conclusion that the gearbox/transmission repairs by Sinclair Ford, the subject of the invoice of 12 February 2021, were not fair wear and tear even though the vehicle had travelled more than 20,000 km since its purchase from the dealer. 3. The Tribunal's conclusion that the underlying causes of the engine failure were "latent in the vehicle at the time of purchase". The dealer submitted that none of the items listed in the evidence, invoices or verbal submissions showed impending engine failure. 4. The Tribunal's conclusion that the time for rejection had not expired "having regard to the opportunity which was given to the [dealer] on many occasions to rectify the many arising faults." The dealer submitted that the vehicle had come back to the dealer "twice only", in December 2019 and January 2020 and that "the next time [the dealer] was contacted about any problems with the vehicle were not until the clutch failure in December of 2020" when the dealer refused to repair the clutch on the basis that it "was a maintenance item". 1. Ms Hirst's oral submissions in relation to the first and second conclusions focused on the proposition that clutch repairs were part of the scheduled maintenance of a manual vehicle. Ms Hirst could not point to any evidence which had been before the Tribunal to suggest that the clutch repairs, the subject of the invoice for $4,145.90 dated 12 February 2021, were part of scheduled maintenance of a manual vehicle 2. The dealer's written submissions suggested that the Tribunal had itself made a statement to the effect that "clutch repairs are a part of the scheduled maintenance of any manual vehicle". However, we do not consider that that statement is inconsistent with the proposition that the indication of the possibility of a "minor fluid weep" noted at the 16 December 2019 inspection "heralded" the subsequent substantial damage to the clutch assembly which occurred in December 2020. 3. The failure of the clutch assembly in December 2020 was attested to by Mr Soifua in paragraphs 23 to 24 of his affidavit and by his daughter Sele Falaniko in paragraphs 48 to 52 of her affidavit and is also evidenced by the invoice from Sinclair Ford dated 12 February 2021. 4. We do not accept that the Tribunal's conclusions regarding the clutch repairs were against the weight of evidence or not fair and equitable. 5. In relation to the Tribunal's conclusion regarding the engine failure, the dealer submitted that "the quote from Sinclair Ford dated 14/4/2021 being around 16 months and at least 24,864 kms after purchase did not diagnose the cause of the engine failure." 6. As we have noted above, the Tribunal concluded (at [61]) that the vehicle's engine had failed and required replacement. 7. The evidence that the engine had failed was not limited to the quote from Sinclair Ford. It also included a report from Keep Rolling Auto Mechanics which recorded that the engine was running loud and rattling, even after an oil change, and evidence from Sally Moala, Mr Soifua's other daughter, of conversations she had had with the mechanic from Keep Rolling, who told her that "the engine needed to be stripped apart to get to the root cause of it all", and with Chris, from Sinclair Ford, who had said "there are way too many issues with the vehicle that to replace them individually would cost more than the worth of the car itself, it would be cheaper to purchase a second hand engine to put in the vehicle". Although that evidence was hearsay, the rules of evidence did not apply. The evidence was before the Tribunal and the Tribunal was entitled to accord weight to the evidence. 8. The Tribunal also accepted the evidence tendered on behalf of Mr Soifua that the vehicle had been serviced regularly. 9. In these circumstances, in the absence of evidence from the dealer to suggest any alternative cause of engine failure, it cannot be said that the conclusion of the Tribunal that the engine failed for causes which were latent in the vehicle at the time of purchase was against the weight of evidence or not fair and equitable. 10. In relation to the Tribunal's conclusion that time for return of the goods had not expired having regard to the opportunity given to the dealer to rectify the faults, we note that the evidence of Mr Soifua and witnesses called by Mr Soifua, which was accepted by the Tribunal, was that Mr Soifua and his family had contacted the dealer on numerous occasions leading up to January 2020 and had not received a satisfactory response. We also note that it was the dealer's own case that, when Mr Soifua experienced the problem with the clutch in December 2020, the dealer had declined to accept responsibility on the basis that the necessary repairs were "fair wear and tear". 11. In light of that evidence, we are not persuaded that the Tribunal's conclusion that the time for rejection of the goods had not expired was not fair and equitable or was against the weight of the evidence. 12. Accordingly, leave to appeal must be refused. Orders 1. The orders that we make are as follows: 1. Leave to appeal refused. 2. Appeal dismissed. ********** 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 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 28 March 2022