Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Nikic v Volkswagen Group Australia Pty Ltd [2022] NSWCATAP 302 Hearing dates: 5 September 2022 Date of orders: 19 September 2022 Decision date: 19 September 2022 Jurisdiction: Appeal Panel Before: R C Titterton OAM, Senior Member D Fairlie, Senior Member Decision: 1. In relation to any question of law, the appeal is dismissed. 2. In relation to any other grounds, leave to appeal is refused. 3. The contentions in the respondent's Reply are disallowed. 4. No order as to costs. Catchwords: CONSUMER LAW – Australian Consumer Law – no question of principle Legislation Cited: Australian Consumer Law – ss 3, 271 Civil and Administrative Tribunal Act 2013 (NSW) – ss 60, 80; Clause 12 of Sch 4 Fair Trading Act 1987 (NSW) – ss 3, 79E Cases Cited: Collins v Urban [2014] NSWCATAP 17 Coulton v Holcombe [1986] HCA 33 Drivas v Burrows [2014] NSWCATAP 87 Hill v Venkatesan [2022] NSWCATAP 278 M H Investments Aust Pty Ltd v Hurstville City Council [2015] NSWCATAP 180 Minister for Immigration and Border Protection v SZMTA (2019) 264 CLR 421 Noori v JMG Auto Parts Pty Ltd [2022] NSWCATAP 250 NSW Land and Housing Corporation v Orr [2019] NSWCA 231 Pholi v Wearne [2014] NSWCATAP 78 Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 The Queen v Trade Practices Tribunal; ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 Texts Cited: F G Brennan, Limits on the Use of Judges (1978) 7 F L Rev at 1, 3. Category: Principal judgment Parties: Chris (Smiljan) Nikic (Appellant) Volkswagen Group Australia Pty Ltd (Respondent) Representation: Appellant (Self represented) Solicitors: Addisons (Respondent) File Number(s): 2022/00194665 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 08 June 2022 Before: M Zraika, General Member File Number(s): MV 22/12846 REASONS FOR DECISION Summary 1. The appellant Mr Chris Nikic appeals from a decision of the Consumer and Commercial Division of the Tribunal (Tribunal) of 8 June 2022 in matter MV 22/12846 (Decision). 2. The appellant had brought a claim against the respondent Volkswagen Group Australia (Volkswagen) seeking an order that pay him $3,276.95. That amount related to the repair or replacement of a faulty gearbox. 3. The Tribunal dismissed Mr Nikic's application. 4. For the following reasons, his appeal should also be dismissed. Grounds of Appeal 1. Mr Nikic's Notice of Appeal states one single ground of appeal, that being that the Decision was not fair and equitable. However, an attachment to the Notice of Appeal states that Mr Nikic is appealing on the five following grounds: 1. the Tribunal failed to give equal merit and consideration to all the evidence presented. In support of this ground the appellant refers to "excerpts" 1, 2 and 5 of an attached Table (Ground 1); 2. the Tribunal incorrectly applied the law. In support of this ground the appellant refers to excerpts 3, 4, 5 and 6 of the Table (Ground 2); 3. the Tribunal did not refer to relevant precedent cases. In support of this ground the appellant refers to excerpts 2 and 3 of the Table (Ground 3); 4. the Tribunal made assertions that were incorrect. In support of this ground the appellant refers to excerpt 1 of the Table (Ground 4); 5. the Tribunal "incorrectly uses car and transmission synonymously as the same 'good' in question for the purpose of the ACL dispute when in fact the 'good' purchased is a brand-new car and not the transmission". In support of this ground the appellant refers to excerpt 3 of the Table (Ground 5). 1. The Table is headed "Excerpts from Member's reasons for their decision and Rebuttal". It is set out in full in Attachment 1. By way of example, we set out "Excerpt 1" immediately below. Excerpt No Member's reasons for their decision Rebuttal (Paragraph No) 1 This is incorrect. Volkswagen opposed on the basis that they believed they were not in breach of the ACL. The appointment proves the opposite; that the respondent was approached first and given the opportunity to diagnose and rectify the issue under the legislation. Volkswagen made it clear that no repairs or 'diagnostics' outside the warranty period would be free of charge and/or and by virtue of that, would not be carried out under the ACL and/or as a sign of 'good will'. (Paragraph 9) The Respondent opposed the application, on the basis that it was not provided with an opportunity to inspect and diagnose the failure, that the Applicant has not established the nature of the Transmission failure and costs to repair, nor has the Applicant established that the failure was not a result of fair wear and tear given the kilometres travelled and/or the age of the vehicle at the time the transmission defect became apparent. Furthermore, in the same week after the car's last scheduled service, the gearbox failed, which amounts to Volkswagen verifying that there were no issues just days leading up to this sudden failure of a major non consumable part. However, the tribunal failed to treat material facts with adequate merit and consideration. Reply to Appeal 1. Volkswagen supports the order made by the Tribunal. It submits that: 1. to the extent that the Notice of Appeal alleges that the appeal is made on a point of law: 1. no point of law is identified in the Notice of Appeal; 2. it is not aware of any point of law on which an appeal is available to the appellant; and 3. to the extent that the appellant alleges that the Tribunal did not apply the proper test or did not properly apply the relevant test, the appellant has not identified: 1. the relevant test which it says should have been applied; or 2. the proper application of the relevant test; 1. there has been no substantial miscarriage of justice; 2. the appellant did not rely on precedent at the hearing; 3. there has been no substantial miscarriage of justice; 4. based on the evidence at hearing including the appellant's evidence, the Tribunal made findings of fact which included that a reasonable consumer fully acquainted with the nature of transmission failure would not regard the failure of the transmission as premature; 5. there is no new evidence which was not reasonably available to the appellant at the hearing. 1. In the Reply, in answer to the question "Do you support the original orders made by the Tribunal which the Appellant challenge for reasons other than those given by the Tribunal", and having answered "yes", Volkswagen states: 1. The [appellant] does not have standing to bring the claim. 2. [Volkswagen] did not supply the vehicle to the Applicant or any other consumer. There is no remedy available against the Respondent under s 259 of the Australian Consumer Law. If the Applicant had standing, which is denied, the only remedy available to the Applicant against the Respondent is under s 271 of the Australian Consumer Law if the Applicant can establish that there had been a failure by the supplier of the Vehicle to comply with the guarantee at s 54 of the Australian Consumer Law. Based on the evidence at the Hearing, the Tribunal made a finding of fact that a reasonable consumer fully acquainted with the nature of the transmission failure would not regard the failure of the transmission as premature and therefore there was no failure by the supplier of the Vehicle to comply with the guarantee at s 54 of the Australian Consumer Law. In the circumstance, no claim is made out against the Respondent under s 271 of the Australian Consumer Law. 3. The applicant's evidence at the hearing did not establish that: (a) the failure of the transmission or part thereof was attributable to a manufacturing defect in the vehicle; and (b) the manufacturing defect caused the supplier of the vehicle to fail to comply with s 54 of the Australian Consumer Law. In the premise, no claim is made out against out against the Respondent under s 271 of the Australian Consumer Law. Nature of an appeal 1. Section 80 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) sets out the basis upon which appeals from decisions of the Tribunal may be brought. That section states that an appeal may be made as of right on any question of law or with leave of the Appeal Panel on any other grounds (s 80(2)(b)). A question of law 1. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69, without listing exhaustively possible questions of law, the Appeal Panel considered the requirements for establishing a question of law giving rise to an appeal as of right. These were set out at [13] and were: * whether there has been a failure to provide proper reasons; * whether the Tribunal identified the wrong issue or asked the wrong question; * whether a wrong principle of law had been applied; * whether there was a failure to afford procedural fairness; * whether the Tribunal failed to take into account relevant (that is, mandatory) considerations; * whether the Tribunal took into account an irrelevant consideration; * whether there was no evidence to support a finding of fact; * whether the decision is so unreasonable that no reasonable decision-maker would make it. 1. In Prendergast the Appeal Panel also stated at [12] that, in circumstances where an appellant is not legally represented, it is appropriate for the Tribunal to approach the issue by looking at the grounds of appeal generally, and to determine whether a question of law has in fact been raised (subject to any considerations of procedural fairness to the respondent that might arise). Leave to appeal 1. Clause 12 of Sch 4 of the NCAT Act provides that, in an appeal from a decision of the Consumer and Commercial Division of the Tribunal, an Appeal Panel may grant leave to appeal only if satisfied that the appellant 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. The principles to be applied by an Appeal Panel in determining whether or not leave to appeal should be granted are well settled. In Collins v Urban [2014] NSWCATAP 17 the Appeal Panel conducted a review of the relevant cases at [65]-[79] and concluded 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. Even if an appellant establishes that they may have suffered a substantial miscarriage of justice in the sense explained above, the Appeal Panel retains a discretion whether to grant leave under s 80(2) of the Act. An appellant must demonstrate something more than that the Tribunal was arguably wrong: Pholi v Wearne [2014] NSWCATAP 78 at [32]. Appellant's submissions 1. In his written submissions attached to the Notice of Appeal the appellant states: The key facts of the matter that were presented at the hearing are: One of the major non consumable systems (i.e. gearbox) on our car was diagnosed to have failed by an independent licensed mechanic The car was less than six years old The car has a type of gearbox that appears to be problematic based on Volkswagen's own admission in the hearing, where one of its integral components tend to fail (i.e. the mechatronics unit) resulting in incorrect gear changes which were the symptoms we experienced Volkswagen's admission about this gearbox during the hearing is in line with the independent licensed mechanic's own experience and anecdotal evidence The car had been regularly serviced at a Volkswagen's mechanic with no issues reported and came out of its regular service a few days prior to this sudden failure occurring Volkswagen refused to diagnose and repair free of cost the fault as the three year warranty period had lapsed and maintained this position throughout the dispute process Having an integral part of a major non consumable car system such as gearbox fail in the first six years, on a car that has been serviced and driven in accordance with the manufacturer's specification with no evidence of improper use just days before the sudden failure, is not what the Australian consumer have come to reasonably expect from car manufacturers that chose to sell brand new cars on the Australian market (refer to excerpt 3 Rebuttal from Table 1). As such I am of the view that the member erred when making this decision therefore, I am asking the Appeals Panel to overturn the decisions and find Volkswagen in breach of consumer protection legislation and liable for the costs incurred by us. 1. Those submissions were supplemented by additional submissions filed on 9 August 2022. The appellant also filed portions of the transcript on which he wished to rely, together with a sound recording of the Tribunal hearing. 2. We allowed the appellant to supplement these submissions at the appeal hearing. In summary, he said that: 1. the vehicle had been checked and serviced by a licensed mechanic the day before the transmission failure; 2. this was a major defect; 3. Volkswagen refused to diagnose and repair free of cost the fault as the three year warranty period had lapsed and maintained this position throughout the dispute process 4. Volkswagen had not fulfilled the consumer guarantee set out in s 54 of the ACL; 5. Volkswagen itself had admitted that its vehicles had transmission problems; 6. any reasonable consumer would expect a transmission to last for more than five to seven years; 7. the Tribunal placed too much weight on the vehicle's age and mileage. 1. The appellant also made submissions oral submissions about Volkswagen's application for costs. However, this application was withdrawn during the course of the appeal hearing. Respondent's Submissions 1. Lengthy written submissions were provided by the respondent. In summary: 1. in relation to the appellant's first ground of appeal, namely that the Tribunal failed to give equal merit and consideration to all the evidence presented, Volkswagen submits that this does not raise an error of law and is in substance a submission that the Decision was against the weight of the evidence; 2. in relation to the appellant's second ground of appeal, namely the Tribunal incorrectly applied the law, the appellant did not identify what law had been incorrectly applied; 3. in relation to the appellant's third ground of appeal, namely the Tribunal did not refer to relevant precedent cases, the appellant did not identify what case law should have been referred to; 4. in relation to the appellant's fourth ground of appeal, namely that the Tribunal made incorrect assertions, any error of the characterisation of Volkswagen's defence begs the question as to how the appellant was deprived of a realistic outcome of a different outcome, materiality being a fundamental component of jurisdiction error: Minister for Immigration and Border Protection v SZMTA (2019) 264 CLR 421 at [38] and [48]. 1. Volkswagen did not address the fifth ground of appeal, either in writing or orally. 2. We allowed the respondent's representative to supplement these submissions at the appeal hearing. In brief oral submissions Mr O'Connor noted that 1. the vehicle was second hand; 2. the Tribunal was correct to place weight on the vehicle's age and mileage; 3. the evidence did not support the appellant's claims. 1. We note that the appellant made brief oral submissions in reply. Principally, he rejected the suggestion that there was no evidence to support his claims. Consideration Questions of law 1. The appellant raises (at least) two questions of law. 2. The first is Ground 2, that is that the Tribunal incorrectly applied the law. In support of this ground the appellant refers to excerpts 3, 4, 5 and 6 of his Table. 3. There is nothing in any of these excerpts which suggests any misapplication of legislation or principle of law. 4. The second is Ground 3, that is that the Tribunal did not refer to relevant precedent cases. In support of this ground the appellant refers to excerpts 2 and 3 of the Table. 5. In excerpt 2 the appellant states that his application: centered around testing what constitutes 'an unspecified but reasonable amount of time' as per the ACL for major non consumable car system such as transmissions or engines to be defect free for any brand new car sold on the Australian market. 1. He submits that: As such the tribunal should have looked at precedent cases where the definition of what constitutes 'an unspecified but reasonable amount of time' as per the ACL for major non consumable car systems such as transmissions or engines, to be defect free had been tested however it failed to do so. 1. In excerpt 3 the appellant repeats the same point, namely that the Tribunal needed to look at precedent cases where it had been established what constitutes "an unspecified but reasonable amount of time" for major non consumable car system such as transmissions or engines to be defect free for any brand new car sold on the Australian market. 2. He submits that: As such the tribunal should have looked at precedent cases where the definition of what constitutes 'an unspecified but reasonable amount of time' as per the ACL for major non consumable car systems such as transmissions or engines, to be defect free had been tested however it failed to do so. 1. Kitto J stated in The Queen v Trade Practices Tribunal; ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at p 374 that the process to be followed by any judicial officer (and this principle we interpolate applies equally to a Tribunal member) must generally be an inquiry concerning the law as it is and the facts as they are, followed by an application of the law as determined to the facts as determined. 2. Justice Kitto's formulation of the judicial function was endorsed by former Chief Justice Brennan: [1] The judicial function is essentially syllogistic. The applicable principles - "the law as it is" - provide the major premise; "the facts as they are" provide the minor premise; the judgment follows inexorable by applying "the law as determined to the facts as determined". 1. In our view, the Tribunal satisfactorily approached and accomplished its fundamental tasks, that is to make findings of fact, and to apply the relevant law to those facts in reaching its Decision. The Tribunal's approach to its task was entirely orthodox and see no error in the Tribunal's application of the relevant law or in failing to "look at" relevant precedents. 2. We would dismiss both these grounds of appeal. 3. There is a third possible error of law. The failure to give adequate reasons is also an error of law: Prendergast at [13](1). It appeared to us that some of these matters raised by the appellant fitted more naturally within that question of law. 4. In NSW Land and Housing Corporation v Orr [2019] NSWCA 231, Bell P (as the Chief Justice was then, with whom Ward JA (as the President was then) identified the applicable principles as follows (at [66]-[77]: 66. In the context of appellate review of the adequacy of reasons, the function of an appellate court is to determine not the optimal level of detail required in reasons for a decision but rather the minimum acceptable standard: Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 at [48] (Resource Pacific). The standard is not one of perfection: Bisley Investment Corporation v Australian Broadcasting Tribunal (1982) 40 ALR 233 at 255 (Bisley). … 71. … even in the less formal setting of a tribunal which has significant powers the exercise of which is capable of affecting the lives of citizens in profound ways, there are certain minimum characteristics that a Tribunal's reasons must possess. These are really supplied, in relation to the Tribunal, by s 62(3) of the CAT Act which, as noted at [52] above, requires there to be set out in reasons (when requested by a party): (a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based, (b) the Tribunal's understanding of the applicable law, and (c) the reasoning processes that lead the Tribunal to the conclusions it made. 1. We consider that the Tribunal conformed with the expectation to provide reasons that surpassed the minimum acceptable standard. The structure of the Decision was entirely orthodox, and the member set out the relevant principles to be applied and made relevant findings of fact, albeit briefly. In our view the reasons sufficiently dealt with the matters raised by the appellant. 2. We dismiss the appeal in so far as any question of law is raised. Other errors 1. We turn now to the other two grounds of appeal, namely Grounds 1, 4 and 5. 2. As noted above, Ground 1 was that the Tribunal failed to give equal merit and consideration to all the evidence presented. In support of this ground the appellant refers to "excerpts" 1, 2 and 5 of the Table. 3. In "excerpt 1", the appellant appears to be submitting that the Tribunal failed to give sufficient weight to the fact that in the "same week after the car's last scheduled service the gearbox failed". This submission is not developed in any further way. 4. In "excerpts" 2 and 5 we see nothing relevant to this ground of appeal. 5. Accordingly, we would not grant leave in respect of this ground. 6. Ground 4 was that the Tribunal made assertions that were incorrect. In support of this ground the appellant refers to excerpt 1 of the Table. In excerpt 1 we see nothing relevant to this ground of appeal. 7. Accordingly, we would not grant leave in respect of this ground. 8. Ground 5 was that the Tribunal "incorrectly uses car and transmission synonymously as the same 'good' in question for the purpose of the ACL dispute when in fact the 'good' purchased is a brand-new car and not the transmission". In support of this ground the appellant refers to excerpt 2 of the Table. 9. In the relevant portion of excerpt 2 states: This case was not about technical and/or statistical evidence how long the 'transmission ought to last in this particular vehicle'. The 'good' in this case for the purposes of ACL was not the transmission but a brand-new car. 1. Again, this submission is not developed in any further way. 2. We would not grant leave in respect of this ground. 3. We have set out the above the relevant principles governing the granting of leave to appeal. To the extent that the appeal raises errors other than questions of law, we are not satisfied that any ground involves an issue of principle, a question of public importance, an injustice which is reasonably clear or that the Tribunal has gone about its fact finding process in such an unorthodox manner that it is likely to have produced an unfair result. Conclusion 1. As the Appeal Panel stated in Noori v JMG Auto Parts Pty Ltd [2022] NSWCATAP 250 (and repeated in Hill v Venkatesan [2022] NSWCATAP 278): 74. … an appeal to the Appeal Panel does not provide a losing party in the Tribunal below with the opportunity to run their case again: Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10]. And, as the Appeal Panel stated in Temple, in passages relied on by the respondent: 38. … Any decision to grant leave to appeal must be undertaken in a legally principled manner and not simply because, if we were hearing the matter anew on the evidence led before the Member, we might reach a different conclusion when considering that evidence (although in the present case that would not be so). 39. It is fundamental that an appeal on a question of fact does not provide and is not intended to provide an opportunity for an applicant dissatisfied by the result of a hearing at first instance to re-run the same case before an Appeal Panel. Yet, that is, in effect, what the present Appellants seek to do by identifying what they contend are contestable findings of fact by the Member. 75. To put the matter another way, as indicated in the Tribunal's Guideline 1, Internal Appeals (which can be found on the Tribunal's website): … an appeal is not an opportunity to have a second go at a hearing. 1. This appears to be what the appellant is seeking to do. 2. The appeal in so far as it raises questions of law should be dismissed. Otherwise leave to appeal should be refused. Notice of contention 1. In Volkswagen's written submission there was a section headed "Notice of contention". 2. In summary, while agreeing that the application should have been dismissed by the Tribunal, Volkswagen submits that the Tribunal erred in three ways: 1. in finding that it was "'an indirect supplier' and relied on this to expand the potential remedies available under the ACL against a manufacturer; where the only remedy is for damages is s 271"; 2. in finding that the appellant was a consumer; 3. in not concluding that the appellant was not an "affected person" for the purposes of s 271 of the ACL. 1. In M H Investments Aust Pty Ltd v Hurstville City Council [2015] NSWCATAP 180 the Appeal Panel considered a "Notice of Contention" raised in this fashion and concluded that: 37. Section 81 of the Act identifies the orders that an Appeal Panel may make in respect of internal appeals. Relevantly, s 81(1) provides: … the Appeal Panel may make such orders as it considers appropriate in light of its decision on the appeal, including … … (b) the decision under appeal to be confirmed, affirmed or varied … 38. In exercising its functions, the Appeal Panel may exercise all the functions conferred on the Tribunal at first instance, when varying or making a decision in substitution of the first instance decision: s 81(2) of the Act. 39. The Appeal Panel has decided that, in order to comply with the guiding principle in s 36(1) of the Act and to act without undue regard to technicalities, it is appropriate, on the appeal, to determine whether the appeal should be dismissed for the reason suggested by the respondent. 1. The Tribunal then stated at [41] that is convenient to first deal with the issues raised on appeal by the appellant, and then to the deal with the contentions raised in the respondent's reply. 2. We have already considered the issues raised on appeal by the appellant. 3. As to Volkswagen's contentions, we discussed with Mr O'Connor the appropriateness of dealing with the contentions in circumstances where the issues had not been raised at first instance. He accepted that it was not appropriate to deal with the contentions if they had not been raised at first instance. 4. In essence, Mr O'Connor accepted that the identity of the proper applicant was not directly raised at the Tribunal haring. We understand that it is common ground that Mrs Lidia Nikic was the actual purchaser of the vehicle. If this point been raised below, no doubt the Tribunal would have removed the appellant as the applicant and substituted Mrs Nikic, consistent with the guiding principle of the NCAT Act to facilitate the just, quick and cheap resolution of the real issues in the proceedings: s 36. 5. That means contentions (2) and (3) fall away, as they were not pressed by Mr O'Connor. 6. As to contention (1), Mr O'Connor was not sure whether this had been raised at the Tribunal hearing. We have perused the transcript and see no mention of this matter. 7. Therefore, we also decline to deal with this contention on appeal. 8. As the plurality of the High Court of Australia noted in Coulton v Holcombe [1986] HCA 33 at [9]: ". . . in a recent decision of six Justices of this Court - University of Wollongong v. Metwally (No. 2) [1985] HCA 28; (1985) 59 ALJR 481, at p 483; [1985] HCA 28; 60 ALR 68, at p 71 - the Court said: "It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so". 1. See too Drivas v Burrows [2014] NSWCATAP 87 where the Appeal Panel observed: "32. The considerations favouring finality of litigation are at least as strong, and probably stronger, in the case of the Tribunal given the importance attached to the expeditious and inexpensive disposition of proceedings [under the] Civil and Administrative Tribunal Act (the Act). 33. Generally, a new point will not be allowed where the consequence would have to be a new trial because "evidence could have been given which by any possibility could have prevented the point from succeeding": Suttor v Gundowda [[1950] HCA 35; (1950) 81 CLR 418] at 438.3." (emphasis in original) Costs 1. In its written submissions, Volkswagen sought costs in the event that the appellant was unsuccessful. 2. That application was withdrawn during the course of the hearing. Orders 1. The Appeal Panel orders: 1. In relation to any question of law, the appeal is dismissed. 2. In relation to any other grounds, leave to appeal is refused. 3. The contentions in the respondent's Reply are disallowed. 4. No order as to costs. ATTACHMENT 1 Excerpt No Member's reasons for their decision Rebuttal (Paragraph No) 'The Respondent opposed the application, on the basis that it was not provided with an opportunity to inspect and diagnose the failure, that the 1 Applicant has not established the nature of the Transmission failure and costs This is incorrect. Volkswagen opposed on the basis that they believed they were not in breach of the ACL. The appointment proves the opposite; that the respondent was approached first and given the opportunity to diagnose and rectify the issue under the legislation. Volkswagen made it clear that no repairs or 'diagnostics' outside the warranty period would be free of charge and/or and by virtue of that, would not be carried out under the ACL and/or as a sign of 'good will'. (Paragraph 9) to repair, nor has the Applicant established that the failure was not a result of Furthermore, in the same week after the car's last scheduled service, the gearbox failed, which amounts to Volkswagen verifying that there were no issues just days leading up to this sudden failure of a major non consumable part. However, the tribunal failed to treat material facts with adequate merit and consideration. fair wear and tear given the kilometres travelled and/or the age of the vehicle at the time the transmission defect became apparent.' 2 '…The Applicant had no This case was not about technical and/or statistical evidence how long the 'transmission ought to last in this particular vehicle'. The 'good' in this case for the purposes of ACL was not the transmission but a brand-new car. This case centered around testing what constitutes 'an unspecified but reasonable amount of time' as per the ACL for all non-consumable car integral parts to be defect free by design for any brand-new car sold on the Australian market. Provided that a brand-new car is serviced and driven in accordance with the manufactures' specification there is 'an unspecified but reasonable amount of time' as per the ACL that it will be defect free by design with only its consumable parts having to be replaced. (Paragraph 21) evidence about how long the transmission ought to last in this vehicle, or that As the tribunal did refer to the use of precedent cases to support its decision, it needed to look at relevant precedent cases where the definition of what constitutes 'an unspecified but reasonable amount of time' as per the ACL for cars to be defect free by design including all of their non-consumable integral parts and systems. this failure was a known issue supporting these claims.' Lastly Volkswagen during the hearing did acknowledge that their models with this type of gearbox do present at their dealerships for mechatronics unit replacement in high numbers (refer to transcript 4). This combined with the evidence presented in transcript 3 points to a trend which unequivocally proves that these parts by design are not supposed to last more than six years as it was the case in our case. By virtue of this our vehicle as the 'good' in this case by design was not supposed to be durable as long as other 'goods' that do not have this type of gearbox. The tribunal does not even acknowledge this fact in their written summary even though the member had probed Volkswagen about it as per transcript 4. This is another material fact that was not treated with adequate merit and consideration. A reasonable consumer at the time of new car purchases does not expect to see failures of all non-consumable integral parts and systems at least in the first six years. As per Choice.com.au (see reference list attached) who are the leading independent consumer advocacy group in Australia the life expectancy of some small appliances such as toasters is about six years. The same survey reveals that the nature of the product when purchased brand new dictates its life expectancy and by virtue of that sets the consumer expectations. The Australian consumer at a minimum should reasonably expect the same from their brand-new car as what they will get when buying a moderately priced toaster. This is also in line with what most car warranties offer to the Australian consumer now, which is five to seven years as per nrma.com.au. In this context this demonstrates that most cars by design are supposed to be defect free for at least six years by virtue of their warranties. The Australian consumer by virtue of most cars sold on the Australian market being defect free by design at least for six years, would have come to reasonably except six years minimum of defect free life for this type of 'good'. This failure occurred when the cars was less than six years old. As such the tribunal needed to look at precedent cases where it had been established what constitutes a 'reasonable but unspecified' amount of time as per the ACL for brand new cars sold on the Australian market to be defect free by design. The consumer law mandates that car manufacturers by virtue of the nature of the goods will design and manufacture cars sold on the Australian market, that will be defect free for a 'reasonable but unspecified' amount of time. This implies all their non consumable systems and parts. Furthermore, Volkswagen failed to reveal at the time of purchase what a 'reasonable consumer' under the Act would probably consider a highly relevant circumstance pertaining to durability, which is what was revealed in transcript 3 and 4. '…the Applicant is required to establish on his ACL: evidence to the civil standard of proof, that a reasonable consumer at the time • as a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods), would regard as 3 of purchase of the vehicle fully acquainted with the nature of the transmission acceptable having regard to the matters in subsection (3). (Paragraph 37) failure would regard that failure at 5 years and 8 months and having travelled (3) The matters for the purposes of subsection (2) are: 135,622 as premature and therefore the transmission was not durable thereby (a) the nature of the goods; and amounting to a failure of the consumer guarantee of acceptable quality.' (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 The fact of the matter is it is not for the Australian consumer to study the technical data of car manufactures to understand how long individual subassemblies and parts are expected to last by virtue of the nature of the goods. The good in this case is a brand new car and not the transmission system. It is up to the car manufacturers wanting to sell their brand-new cars on the Australian market to design cars where all of their major non consumable systems as a whole will be defect free for 'a reasonable but unspecified amount of time' provided the car is serviced and driven in accordance with their specification. ACL: '…There is no evidence provided by the • as a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods), would regard as Applicant expert or otherwise of: acceptable having regard to the matters in subsection (3). 4 (1)how long a transmission in this vehicle is intended to last before it would be expected to need replacement, nor (3) The matters for the purposes of subsection (2) are: (Paragraph 43) (a) the nature of the goods; and (2) how long the mechatronics system in the transmission would be (c) any statements made about the goods on any packaging or label on the expected to last before it is expected to need replacement..' 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 '…(3) whether the issue with the transmission was the mechatronics system 5 alone or something more serious with the transmission was evident (Paragraph 43) which made the replacement of the whole transmission necessary and The only relevant fact in this instance is that it was a licensed mechanic who determined the gearbox as a whole had ceased to function properly / became defected. The subsequent repair we opted for is not relevant to the matter. What is relevant but the tribunal fails to consider it, is the independent mechanic's diagnosis which is in line with Volkswagen's own admission during the hearing (refer to transcripts 3 and 4). how long such components would be expected to last before they would ordinarily be expected to be replaced.' 'Here the Applicant's evidence is that he chose not to allow the dealership the opportunity to inspect the vehicle on 3 December 2021.' 6 and Volkswagen had no intention to diagnose and/or rectify the issue free of charge. This argument would hold if Volkswagen the manufacturer had a goodwill policy or similar where they inspect and diagnose failures they deem to be in breach of the ACL free of charge. However, at no point did VW indicate they have a "goodwill policy" or anything along those lines. On the contrary the opposite is true which is that VW made it clear that any repairs and diagnostics beyond the three year period were not going to be covered by VW at the time of making the appointment and later confirmed in writing. This demonstrates that reasoning and subsequent conclusion by the member was based on an incorrect assumption or understanding. (Paragraph 50) '…the Applicant consequently The fact that I was not aware of the consumer protection laws at the time is irrelevant. Volkswagen had been approached first and they made it known that all failures outside of warranty will incur standard diagnostics as well as subsequent repair fees. Volkswagen's position not to repair under the ACL was made known at the time of the appointment and confirmed later in writing on multiple occasions all of which was available to the tribunal. The issue whether they would have carried out this repair under the ACL had the car been brought to them was not the subject of dispute and irrelevant to the matter as Volkswagen had made their position clear in regard to this. (although not deliberately) denied the Respondent the opportunity to inspect and assess the vehicle to make a determination as to whether it would repair it under warranty or the ACL.' ********** Endnote 1. F G Brennan, "Limits on the Use of Judges" (1978) 7 F L Rev 1, 3. 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: 19 September 2022