Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Hanif v Car Mart Direct Pty Ltd [2023] NSWCATCD 187 Hearing dates: 29 August 2023 Date of orders: 29 November 2023 Decision date: 29 November 2023 Jurisdiction: Consumer and Commercial Division Before: J Searson, General Member Decision: (1) Car Mart Direct Pty Ltd must immediately accept Sabah Hanif's return to it of the 2012 Mazda CX5 NSW Registration number DD70UW. (2) Car Mart Direct Pty Ltd are to be responsible for any towing costs in relation to the return of the vehicle to them. (3) Car Mart Direct Pty Ltd must pay Sabah Hanif the sum of $26,729.10 on or before 31 December 2023. (4) Upon Car Mart Direct Pty Ltd's performance of Orders 1, 2 and 3 above Sabah Hanif must do all things necessary to transfer unencumbered title in the 2012 Mazda CX5 NSW Registration number DD70UW to Car Mart Direct Pty Ltd within 7 days. Catchwords: CONSUMER LAW — consumer guarantees – major failure – rejection of goods – rejection period – misleading and deceptive conduct — defective goods – costs. Legislation Cited: Australian Consumer Law NSW Civil and Administrative Tribunal Act 2013 Civil and Administrative Tribunal Rules 2014 Fair Trading Act 1987 Motor Dealers and Repairs Act 2013 Cases Cited: Alliance Motor Auctions Pty Ltd v Saman [2018] NSWCATAP 137 Australian Knitting Mills Ltd v Grant (1933) 50 CLR 387 Avci v Inchurch Automotive Pty Ltd t/a Parramatta Motor Group [2019] NSWCATCD 39 Barbour v Autosports Five Dock Pty Ltd [2020] NSWCATAP 141 Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 Burton v Chad One Pty Ltd [2013] NSWDC 301 Cary Boyd v Agrison Pty Ltd [2014] VMC 23 Cehave NV v Bremer Handelsgesellschaft mbH Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 Hardwick Game Farm v Suffolk Agricultural Producers Association [1969] 2 AC 31 in Contact Energy Ltd v Jones [2009] 2 NZLR 830 Matumaini v Automobile Industries Pty Ltd [2017] NSWCATAP 93 Medtel Pty Ltd v Courtney [2003] FCAFC 51 Miller & Associates Insurance Broking v BMW Australia Finance (2010) 241 CLR 357. Munday v Empire Auto Group Pty Ltd [2019] NSWCATAP 52 Oshlack v Richmond River Council (1998) 193 CLR 72 Perpetual Trustee Company Limited & Anor v Ishak [2012] NSWSC 697 Petropoulos v CPD Holdings Pty Ltd [2019] NSWCATAP 54 Rekrut and Scott v Champion Homes Sales Pty Ltd; Champion Homes Sales Pty Ltd v Rekrut and Scott [2018] NSWCATAP 97 Rigby v LDV Automotive Pty Ltd & Anor [2021] QCAT 316 Sacks v Hammoud [2016] NSWCATAP 225 Safi v Heartland Motors Pty Ltd t/as Heartland Chrysler [2016] NSWCATAP 80 Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1 Witton v Taupo Motor Company Limited 29 November 2010 Texts Cited: None cited Category: Principal judgment Parties: Sabah Hanif (Applicant) Car Mart Direct Pty Ltd (Respondent) Representation: Applicant (Self Represented) Mr Brown (Respondent) File Number(s): 2023/00393713 (previously MV 23/24051) Publication restriction: Nil REASONS FOR DECISION BACKGROUND 1. In this matter the applicant is seeking orders for a refund in relation to the purchase of a motor vehicle which the applicant claims to be not of acceptable quality and or unfit for purpose. The applicant is also seeking an amount for consequential loss and costs. 2. The respondent opposed the application and the orders as sought by the applicant. EVIDENCE 1. The applicant filed documentary evidence in support of her claim. These documents were entered into evidence and marked as "exhibit 1". The applicant relied upon a number of invoices and service dockets. The applicant also relied upon a report of David Marston of Experts Direct dated 29 March 2023 ("Marston report"). 2. The respondent filed documentary evidence in support of their case. These documents were entered into evidence and marked as "exhibit 2". These documents included various invoices and service dockets. The respondent also relied upon expert reports of Paul Vanderlann of Paul Vanderlaan Mechanical dated 13 July 2023 ("Vanderlann report"), Matthew Hosking of Matthew Hosking Mechanical dated 11 July 2023 ("Hosking report") and Pearce Gustavson of Hyped Up Mechanical dated 11 July 2023 ("Gustavson report"). 3. Both the applicant and the respondent attended the hearing on 29 August 2023 by way of virtual hearing. The applicant gave affirmed oral evidence in addition to her documentary evidence. Mr Brown gave affirmed oral evidence in addition to the documentary evidence of the respondent. 4. The parties were given the opportunity to cross examine each other. 5. The Tribunal heard the evidence and reserved its decision. The parties were invited to provide the Tribunal with written submissions. Both parties provided written submissions after the conclusion of the hearing. 6. The Tribunal has read and considered all of the documentary and oral evidence and submissions of the parties. JURISDICTION 1. The Tribunal has jurisdiction to hear and determine this matter under Part 6A of the Fair Trading Act 1987 (NSW)("FT Act") FT Act (sections 79I and 79J) as an order is sought that requires the respondent to pay a specified sum of money subsection 79E(1)(a). 2. The applicant is a consumer pursuant to the definition in section 79D. The respondent is a supplier of goods on the basis that it supplied the goods (being the vehicle) the subject of the dispute in the course of carrying on a business: sections 79D and 79G. 3. The vehicle was supplied in NSW: section 79K(1)(a). The application has been made to the Tribunal within the three-year time limit required by section 79L. The claim falls within the monetary limit on the Tribunal's jurisdiction: subsection 79S. THE FACTS 1. The Tribunal makes the following findings of fact: 1. The respondent is a motor dealer within the meaning of section 5 of the Motor Dealers and Repairs Act 2013. 2. On or about 14 March 2022 the applicant and the respondent engaged in a number of correspondence in relation to a 2012 Mazda CX5 with a grey interior and exterior and an odometer reading of approximately 126, 983 kilometres. This vehicle was advertised by the respondent on Facebook. 3. On or about 15 March 2022 the applicant requested from the respondent the vehicle identification number be provided to her for the purposes of her finance of the vehicle. 4. On or about 17 March 2022 the respondent advised the applicant that the vehicle would be transported to the respondents NSW dealership and would be made available for purchase and pickup. 5. On 28 March 2022 the respondent advised the applicant that the vehicle was available for purchase and pickup at their NSW dealership. The applicant attended the respondent's dealership on this date. 6. The applicant entered into a contract of sale with the respondent for a Mazda CX5 on or about 28 March 2022. The purchase price of the vehicle was $19,990 inclusive of GST. The NSW registration number of the vehicle was DD70UW ("the vehicle") The applicant took delivery of the vehicle on the same date. 7. Shortly after the applicant took delivery of the vehicle she noticed a number of defects and material differences namely: 1. The vehicle lost power an abruptly turned off upon application of the brakes. 2. The vehicle was materially different to that contained in the advertisement on Facebook because it had an odometer reading of approximately 184,611 kilometres and it had a black interior. 1. The applicant immediately returned the vehicle to the respondent and requested that the vehicle contained in the advertisement be provided to her. 2. The respondent advised the applicant that the cause of the vehicle abruptly turning off was the result of keys needing to be re-connected to the vehicle. Further, that the vehicle contained in the advertisement could not be provided to the applicant as she had already signed the contract of sale for the vehicle she now had. 3. On or about 29 March the applicant delivered the vehicle back to the respondent for further examination. The respondent advised the applicant that the vehicle was safe to drive back to her residence approximately 2 1/2 hours away. 4. The vehicle continued to turn off during the drive home. The applicant again contacted the respondent and requested the faulty vehicle be exchanged with the vehicle she originally enquired about. The respondent advised that the vehicle she requested to purchase was sold to somebody else prior to 28 March 2022. Further, that she was unable to get a refund as she had already signed a contract of sale. 5. Subsequently the applicant had the vehicle inspected by two mechanics and was advised that the fuel pump was defective and required replacement. The vehicle was then delivered back to the respondent for repairs. The applicant was then advised that the vehicle was ready for collection and had been fixed. 6. During July and August 2022, the vehicle began overheating and required repairs and an engine service. 7. In about November 2022 the overheating defect persisted and the vehicle could not be driven over 90 kilometres an hour. The vehicle was inspected by Zoom Mechanical who identified that the head gasket had blown as a result of the initial fuel pump defect and that the engine required replacement to rectify the defect and ensure that the vehicle was roadworthy. 8. On or about 23 January 2023 the applicants lawyer wrote to the respondent issuing a letter of rejection of the vehicle and requesting a full refund be provided by the respondent to the applicant on or before 14 February 2023. 9. The respondent advised that they would not be providing a refund for the vehicle. 10. The applicant filed this application before the tribunal on the 24 May 2023. THE LAW 1. The Australian Consumer Law NSW ("ACL") is part of the law of NSW and may be used in deciding a consumer claim under Part 6A of the FT Act by virtue of section 28 of the FT Act. It contains, in Chapter 3, a number of guarantees by suppliers of goods and services that are implied into consumer transactions. These include in relation to the supply of goods, a guarantee as to acceptable quality and fitness for purpose. 2. The Tribunal's jurisdiction under the ACL is not entirely equivalent to its jurisdiction under Part 6A of the FT Act. However, there is no real difference in the jurisdiction for the purposes of these proceedings. 3. The applicant appears to allege that there has been a "major failure" in relation to the consumer guarantees under the ACL as per section 260. It appears that the applicant is relying on section 54 in relation to the guarantee as to "acceptable quality". 4. In section 54 of the ACL it states that if a person supplies goods in trade and commerce (and not by auction) there is a guarantee as to acceptable quality: sub-section 54(1). Goods are of acceptable quality if they are fit for all the purposes for which goods of that kind are commonly supplied, they are acceptable in appearance and finish, and are free from defects, safe and durable: subsection 54(2)(a) to (e). 5. The test in relation to "acceptable quality" is an objective test. It is what a "reasonable consumer" fully acquainted with the state and condition of the goods (including any hidden defects of the goods) would see as acceptable having regard to the nature of the goods, the price paid for them, any statements made about the goods in advertising materials, any representations made about the goods by the supplier or manufacturer of the goods, and any other relevant circumstances relating to the supply of the goods: subsection 54(3). 6. Subsections 54(4) to (7) of the ACL set out the exceptions where a supplier will not be liable for the supply of goods that are not of acceptable quality. None of these exceptions are relevant in the current matter. 7. As noted in the matter of Avci v Inchurch Automotive Pty Ltd t/a Parramatta Motor Group [2019] NSWCATCD 39 at 44: "The temporal focus of section 54 is the time the goods are supplied, informed by what is known of their subsequent condition and by what it was reasonable to expect from the type of goods in issue: see generally, Medtel Pty Ltd v Courtney [2003] FCAFC 51 per Moore J at [40], Branson J at [70], and Jacobson J agreeing with Branson J at [81]. In this respect, it falls to the applicant to prove on the balance of probabilities that the motor vehicle was not of acceptable quality at the time of supply having regard to what it was reasonable to expect in terms of its future function at that time". 1. Section 55 of the ACL sets out the guarantees as to fitness for purpose and relevantly provides as follows: Guarantee as to fitness for any disclosed purpose etc. (1) If: (a) a person (the supplier) supplies, in trade or commerce, goods to a consumer; and (b) the supply does not occur by way of sale by auction; there is a guarantee that the goods are reasonably fit for any disclosed purpose, and for any purpose for which the supplier represents that they are reasonably fit. (2) A disclosed purpose is a particular purpose (whether or not that purpose is a purpose for which the goods are commonly supplied) for which the goods are being acquired by the consumer and that: (a) the consumer makes known, expressly or by implication, to: (i) the supplier; or (ii) a person by whom any prior negotiations or arrangements in relation to the acquisition of the goods were conducted or made; or (b) the consumer makes known to the manufacturer of the goods either directly or through the supplier or the person referred to in paragraph (a)(ii). 1. In section 259 of the ACL the remedies that are available to a consumer where a supplier of goods has failed to comply with the guarantee as to acceptable quality and fitness for purpose are set out. 2. If the failure to comply is a "major failure", the consumer may, subject to section 262 of the ACL, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection: subsection 259(3)(a). The consumer may also, by action against the supplier, recover damages for any loss or damage suffered by the consumer because of the failure to comply with the guarantee if it was reasonably foreseeable that the consumer would suffer such loss or damage as a result of such failure: subsection 54(4). 3. Section 260 of the ACL sets out the circumstances where a failure to comply with the guarantee as to acceptable quality will be a "major failure" Relevantly, there will be a major failure if the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure (subsection 260(a)) or the goods are substantially unfit for a purpose for which goods of the same kind are commonly supplied and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose (subsection 260(d)) or the goods are not of acceptable quality because they are unsafe (subsection 260(e)). 4. In Safi v Heartland Motors Pty Ltd t/as Heartland Chrysler [2016] NSWCATAP 80 ("Safi") the Appeal Panel of NCAT set out a helpful summary of the approach and principles to be applied in the construction of section 260: 85 Section 260 of the ACL (NSW) sets out five measures against which non-compliance is to be assessed for the purposes of determining whether there is a "major failure". As observed by the Magistrates' Court of Victoria in Cary Boyd v Agrison Pty Ltd [2014] VMC 23 at [50], for there to be a major failure it was not necessary for the claimant to establish each of the matters set out in s 260, establishing one is sufficient. This is clear from the drafting of the section. 86 The first measure, under s 260(a), is whether "the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure". 87 Subsection 260(a) applies to a generic "reasonable consumer" who acquires goods. It has the broadest and most general application. In contrast, s 260(d), where goods are unfit for a disclosed purpose, only applies when there have been specific negotiations about purpose between a consumer and a supplier. Similarly, s 260(b) only applies where goods have been acquired by description, sample or as a demonstration model. 88 Subsections 260(c) and 260(e), namely where goods are "substantially unfit" or where they are "unsafe", direct specific attention to the nature and extent of the failure. Whereas s 260(a) directs attention to the mind of the reasonable consumer, although the nature and extent of the failure is relevant in a contextual sense. There is an overlap between ss 260(a), 260(c), and 260(e). For instance, if it is established that goods are unfit for the purpose for which goods of the same kind are commonly supplied and that they cannot be remedied easily or in a reasonable time, it follows that a reasonable consumer, fully acquainted with this fact, would not have acquired the goods. The same can be said of goods that are found to be unsafe. However, the reverse is not true. Subsections (c) and (e) require proof of specific factual matters in relation to the nature of the failure in the goods, subsection (a) does not. 89 Subsections (a), (c) and (e) of s 260 are closely linked to the consumer guarantee of "acceptable quality" under s 54. Relevantly, s 54 requires that, among other things, goods be "fit for all purposes which goods of that kind are commonly used" and "safe" which is to be adjudged by the "reasonable consumer fully acquainted with the state and condition of the goods". As such, the inquiry as to whether goods comply with the guarantee of acceptable quality and any findings about this matter will be relevant to the inquiry about whether such failure is a major failure for the purposes of s 260. 1. The Appeal Panel in the same matter at [101] and [102] set out the following principles to be used in determining whether there is a major failure to comply with the guarantee as to acceptable quality: 101 1. A major failure may be constituted by one defect or a series of specific or individual defects which, when taken as a whole, constitute a major failure; 2. The test of whether goods "would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure" is an objective one. 3. A "reasonable consumer" would expect teething problems, even in a new vehicle. 4. The question to ask is whether the reasonable consumer, given the option of acquiring particular good or alternatively purchasing either nothing or a different model, would not have acquired the good. 5. Defects which result in goods failing to comply with the guarantee of acceptable quality will not invariably be a major failure and it will depend on the nature and extent of the failure; and 6. The cost of repair, in proportion to the purchase price, and the question of whether the defects can be remedied easily and in a timely manner are relevant considerations. 102 In our view, the purchase price for the goods and the nature of the defect are also relevant considerations for a "reasonable consumer". 1. Section 261 of the ACL sets out how suppliers may remedy a failure to comply with a consumer guarantee. If, under section 259(2)(a), a consumer requires a supplier of goods to remedy a failure to comply with a guarantee referred to in section 259(1)(b), the supplier may comply with the requirement, by repairing the goods, or by replacing the goods with goods of an identical type, or by refunding any money paid by the consumer for the goods and an amount that is equal to the value of any other consideration provided by the consumer for the goods. 2. However, section 262 of the ACL limits the circumstances in which a consumer is entitled to reject goods. A consumer is not entitled to notify a supplier of goods that the consumer rejects goods if, relevantly, the goods were damaged after being delivered to the consumer for reasons not related to their state or condition at the time of supply: section 262(1)(c). CONSIDERATION 1. In order to determine this matter, and having regard to the application, the facts and the law, the Tribunal must answer the following: 1. Did the respondent fail to comply with the guarantee as to acceptable quality in the supply of the vehicle to the applicant? 2. If so, was this a major failure? 3. If so, was the applicant entitled to reject the vehicle? 4. Did the respondent engage in misleading and deceptive conduct? 5. What remedy is the applicant entitled to? 6. What orders are necessary to do justice between the parties? GUARANTEE AS TO ACCEPTABLE QUALITY 1. The first consideration is whether there has been a breach of the guarantee as to acceptable quality in the supply of goods as per s 54 of the ACL. The applicant contends that the respondent has breached their obligations in this regard due to the multiple issues with the vehicle over a relatively short period of time. The applicant noted that these issues emerged immediately upon delivery of the vehicle and persisted for a number of months. The vehicle remains stationary at the applicant's home and is not in a roadworthy condition. 2. As noted in the matter of Rigby v LDV Automotive Pty Ltd & Anor [2021] QCAT 316 at 7: The time at which goods are to be of acceptable quality is the time at which the goods are supplied to the consumer: Medtel Pty Ltd v Courtney (2003) 130 FCR 182 at [64] and [70]. However, information available after the time of supply may be taken into account in deciding whether the goods were of acceptable quality at the time of supply. 1. In the matter of Burton v Chad One Pty Ltd [2013] NSWDC 301 at [38] to [42] a summary of the approach and the principles to be applied in the construction of section 54 were set out as follows: 38 The decision of the Auckland Motor Vehicle Disputes Tribunal in Witton v Taupo Motor Company Limited 29 November 2010 contains a helpful analysis of the equivalent New Zealand provision of s.54: "The guarantee of acceptable quality contained in s.54 is in three parts. A set of quality elements contained in s.54(2)(a) to (e), a reasonable consumer test which applies a consumer's objective evaluation of those quality elements, and a set of factors in s.54(3)(a) to (e) which are to be taken into account by the reasonable [consumer]." 39 The New Zealand High Court in Contact Energy Ltd v Jones [2009] 2 NZLR 830 at [86] and following, said: "The quality standard is set by reference to the expectations of a reasonable consumer "fully acquainted with the state and condition of the goods, including any hidden defects." The phrase derives from s 16(b) of the Sale of Goods Act 1908, which established an exception to the warranty of merchantable quality of goods bought by description from sellers dealing in goods of that description. The warranty does not apply where the buyer had examined the goods, as regards defects which such examination ought to have revealed." 40 The court referred to Australian Knitting Mills Ltd v Grant (1933) 50 CLR 387 and continued at [88]: "...s 7(1)(a) of the Consumer Guarantees Act [the equivalent of s.54 of the ACL] requires that quality be assessed by reference not only to defects and price but also fitness for purpose. Fitness for purpose is assessed by reference to all purposes for which the goods are commonly supplied, so it does not suffice if the goods are suitable for any one or more of their common purposes (compare Hardwick Game Farm v Suffolk Agricultural Producers Association [1969] 2 AC 31). But it is not an absolute requirement, in that the Act does not positively require that the goods be fit for all common purposes." 41 At [94] the court said: "The hypothetical reasonable consumer is taken to be fully acquainted with the "state and condition" of the goods, including any hidden defects. Less obviously, he or she must also be taken to know the nature of the goods, all relevant circumstances of supply and any representations made about the goods by the manufacturer or supplier, so far as relevant. That is so because it is the hypothetical consumer who determines by reference to those considerations whether the goods are acceptable. The test is objective, but it is applied to the particular goods and circumstances. Acceptable quality is a composite and context-specific attribute. I adopt the observations of Ormrod LJ, speaking of merchantable quality, in Cehave NV v Bremer Handelsgesellschaft mbH at page 80: 'It is a composite quality comprising elements of description, purpose, condition and price. The relative significance of each of these elements will vary from case to case according to the nature of the goods in question and the characteristics of the market which exists for them. This may explain why the formulations of the test of merchantable quality vary so much from case to case.'" 42 Applying that to the present situation, it is apparent that such authority as there is on the NZ equivalent provision of s.54(3) makes it clear that all of the matters in that sub-section are to be considered when determining whether or not the goods were of acceptable quality. The use of the conjunctive "and" within the section supports this interpretation. 1. Equally applicable to the present matter is the following passage from Member French's decision in Avci v Inchurch Automotive Pty Ltd t/a Parramatta Motor Group [2019] NSWCATCD 39 at 44: "The temporal focus of section 54 is the time the goods are supplied, informed by what is known of their subsequent condition and by what it was reasonable to expect from the type of goods in issue: see generally, Medtel Pty Ltd v Courtney [2003] FCAFC 51 per Moore J at [40], Branson J at [70], and Jacobson J agreeing with Branson J at [81]. In this respect, it falls to the applicant to prove on the balance of probabilities that the motor vehicle was not of acceptable quality at the time of supply having regard to what it was reasonable to expect in terms of its future function at that time. To the extent that the applicant contends that this was because the motor vehicle was not free from defects (subsection 54(2)(c)) she must establish that there was an actual or latent defect in the motor vehicle at the time of supply which rendered it of unacceptable quality: Alliance Motor Auctions Pty Ltd v Saman [2018] NSWCATAP 137 at [14] to [23]. However, it is not necessary for the applicant to prove the precise nature of the defect: Matumaini v Automobile Industries Pty Ltd [2017] NSWCATAP 93 at [73]; Alliance Motor Auctions Pty Ltd v Saman [2018] NSWCATAP 137 at [23]; Munday v Empire Auto Group Pty Ltd [2019] NSWCATAP 52 at [9]". 1. In the present matter the Tribunal is satisfied of a breach of sections 54(2)(a), 54(2)(c) and 54(2)(d) of the ACL. The evidence of the applicant was that the vehicle currently remains stationary and is unable to be driven. Further, the applicant experienced defects in relation to the vehicle just after she took delivery of it, within approximately 10 minutes of delivery. The vehicle in its current state is unsafe to its driver and other road users. 2. The Marston report relied upon by the applicant notes in its conclusion at page 13-14 as follows: 81. Based on the evidence presented to me, the Mazda was sold in an un roadworthy condition and not fit for purpose. 8.2 The Mazda is currently not roadworthy and would be dangerous to the Mazda's driver and passengers along with other road users. …………… 8.8 Finally, sufficient evidence has been presented to me to show that the Mazda was not of acceptable quality or fit for purpose at the time of sale by the respondent. 1. The Tribunal prefers the expert evidence of the applicant. The applicant has provided the Marston report that complies with NCAT procedural direction 3 with respect to expert evidence. The respondent did rely on a number of reports about the condition of the vehicle. However, these reports did not comply with NCAT procedural direction 3 and were in the nature of a statement or letter. Further, it did not appear that the Vanderlann, Hosking or Gustavson reports were based on any visual or other inspection of the vehicle and appeared to be in the nature of answers to hypothetical questions posed to them by the respondent. In contrast, the Marston report is based upon an inspection of the vehicle performed by the report's author and is far more comprehensive than the reports relied upon by the respondent. 2. Having made a finding that the vehicle has failed to comply with the guarantee as to acceptable quality at the time of supply the Tribunal then needs to consider whether the failure to comply was a "major failure". MAJOR FAILURE? 1. Having regard to the evidence before it the Tribunal is satisfied that the failure to comply with the guarantee as to acceptable quality is a major failure. 2. Having regard to the principles in Safi it appears that there have been a number of defects in the vehicle since the day it was delivered to the applicant. The vehicle has been stationary at the applicant's home and is currently un-roadworthy. Any reasonable consumer if given the option of buying this vehicle, or alternatively purchasing either nothing or a different model, would not have acquired the vehicle. This is due to the nature and extent of the issues experienced by the applicant. As noted above in Safi one defect or a series of specific or individual defects which, when taken as a whole may constitute a major failure. 3. As noted in the matter of Matumaini v Automobile Industries Pty Ltd [2017] NSWCATAP 93 at [73]: "The question which the Tribunal had to consider and answer was whether, at the time of the sale, the vehicle was of acceptable quality as that phrase is defined in s 54 (2) of the ACL NSW. In other words it was not necessary for the Appellant to prove that at the time of the sale, there was a particular identified defect which caused the vehicle not to be of an acceptable standard". 1. The Marston report notes at page 9 as follows: 7.25 As discussed above, I am of the opinion that the defects identified are major failures under the ACL. 1. Additionally, the respondent has been given a number of opportunities to make good the defects with the vehicle over the space of the past 20 months with the vehicle having had repairs over that time as well as being taken to other mechanics. Despite this, issues have remained unresolved and now further problems are being experienced with the vehicle. It therefore appears that the problems cannot be easily and quickly remedied. REJECTION OF THE VEHICLE 1. The applicant rejected the vehicle on or about 23 January 2023 and sought a refund by way of a letter from her solicitor Arida Lawyers. 2. In the matter of Barbour v Autosports Five Dock Pty Ltd [2020] NSWCATAP 141 the appeal panel set out at 83 the test for determining whether the rejection period has ended: From these cases it can be seen the following matters are relevant considerations in determining the rejection period for a major failure and when it has ended: 1. The rejection period commences at the time of supply; 2. The rejection period ends when it would be reasonable for the defect to become reasonably apparent; 3. The period of time must be reasonable having regard to the defect or defects. The test is objective but the actual experience of the consumer is relevant; 4. In determining the time in which a failure to comply becomes reasonably apparent regard must be had to the factors in s 262(2)(a)-(d) of the ACL; 5. Matters affecting the length of the period and when a major failure may become reasonably apparent include: a) Whether the good are old or new. In the case of new goods it will usually be longer period; b) Whether the goods are regularly inspected, whether an inspection process is customary and, if so, whether such inspections would be expected to reveal the failure; c) Whether a reasonable consumer fully acquainted with the state and condition of the goods, would know the cause of the defect, what needed to be done to fix it and the cost of doing so; d) Whether the supplier or repairer had identified a fault and carried out a repair which the consumer understood would rectify the fault; e) Whether any subsequent testing or period of use was necessary and/or elapsed following any repair to see if it was successful; f) Whether a failure, or a series of failures in combination with each other, might render the goods unfit or otherwise lead a reasonable consumer to conclude they would not have acquired the goods; g) Whether a reasonable time has elapsed following the consumer becoming fully acquainted with the failure to make a decision about whether to reject the goods. 1. Applying the above principles in the current matter, the rejection prior had not ended because the applicant had rejected the vehicle over 9 months after taking delivery of it. At that point in time the vehicle had and still remains relatively unused by the applicant. The applicant is entitled to expect several years of trouble-free operation of the vehicle, given that it was purchased for a price of $19,990 including GST. Further, the applicant had been making attempts to try and resolve the issues with the respondent to no avail. 2. The fact that the respondent did not accept the return of the vehicle does not disentitle the applicant to the remedy that she is now seeking. MISLEADING AND DECEPTIVE CONDUCT 1. The applicant alleged that the conduct of the respondent was misleading and/ or deceptive. She alleged that a number of pre and post-sale representations were made to her which were misleading and deceptive. Further, the applicant alleges that she was not sold the vehicle that she had initially enquired about purchasing. In this regard the relevant section of the ACL is section 18 which says: 18 Misleading or deceptive conduct (1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. 1. The legal principles in relation to Section 18 of the ACL are set out by Brereton J in the matter of Perpetual Trustee Company Limited & Anor v Ishak [2012] NSWSC 697 at paragraphs [75]-[76]. Relevantly, that case said that the test is an objective one (i.e. what a reasonable consumer in the position of the applicant would have, in all the circumstances of the matter, been misled or deceived, not whether the applicant subjectively believed that the conduct of the respondent was misleading or deceptive). There does not have to be any intention on the part of the respondent to mislead or deceive. Confusion or misunderstanding by a consumer does not mean, of itself, that the conduct in question is misleading or deceptive, and a consumer failing to make reasonable inquiries is relevant in assessing whether conduct is misleading or deceptive in contravention of Section 18 of the ACL (see Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1; Miller & Associates Insurance Broking v BMW Australia Finance (2010) 241 CLR 357). 2. In the matter of Perpetual Trustee Company Limited & Anor v Peter Ishak [2012] NSWSC 697 Brereton J stated at [75 – 76] in connection with section 42 of the Fair Trading Act since repealed, (which is in identical terms to section 18 of the ACL) the following: Section 42 (like its TPA and ASICA analogues) is not confined to misrepresentations: it is contravened if the acts, omissions, statements and/or silence of the defendant, taken as a whole and considered in light of all relevant circumstances, are misleading or deceptive or are likely to mislead or deceive [Campbell v Backoffice Investments Pty Ltd [2009] HCA 25 ("Campbell"), [102]; (2009) 238 CLR 304; Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60 ("Butcher"), [104]; (2004) 218 CLR 592]. Conduct is misleading if it induces, or is capable of inducing, error [Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191, 198; Rhone-Poulenc Agrochomie SA v UIM Chemical Services Pty Ltd [1986] FCA 218; (1986) 12 FCR 477; Campbell, [25]; Butcher, [111]], and likely to mislead or deceive where there is a real (or not remote) chance or possibility that the conduct will have that effect [Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd [1984] FCA 180, [14]; (1984) 2 FCR 82]. 1. Applying this logic in the current matter the Tribunal finds that the conduct of the respondent is misleading and or likely to mislead. This is because the conduct of the respondent induced error on the part of the applicant. Specifically, the conduct of the respondent led the applicant to believe that she was purchasing the vehicle that she had initially enquired about when in fact she purchased a different vehicle. APPROPRIATE REMEDY 1. In relation to a return and refund of the vehicle, as noted in Avci at [78] "The terms of section 259(3)(a) and 263 of the ACL are very clear. If there has been a major failure to comply with the guarantee of acceptable quality, the consumer may, at the consumer's election, reject the goods. If a consumer elects to reject the goods, they must be returned to the supplier (subject to exceptions which do not apply in this case), the supplier must accept the return of the goods, and (in the circumstances of this case) the supplier must refund to the consumer the purchase price they paid for the goods. The right of a supplier to repair goods, as an alternative to accepting their return and refunding the purchase price only arises under sections 259(2) and 261 of the ACL where the failure to comply with the guarantee as to acceptable quality is not a major failure". 1. In the present matter the applicant has established on the evidence that the respondent has failed to comply with the guarantee as to acceptable quality when the vehicle was supplied. Further, that this failure was a major failure. She has also established on the evidence that she notified the respondent that she rejected the vehicle, and that she did this within the rejection period. 2. The Tribunal considers that by virtue of s 263 of the ACL therefore that the applicant is entitled to return the vehicle to the respondent and the respondent must accept its return. The respondent must also refund to the applicant the amount that was paid for the vehicle of $19,990 including GST. 3. The applicant also sought an amount of damages for losses incurred by her as a result of the conduct of the respondent. The Tribunal has made a finding that the conduct of the respondent contravened the provisions of s 18 of the ACL. Having made this finding the Tribunal may award damages under s 236 of the ACL. 4. Section 236 provides an action for damages to a person who suffers loss or damage because of the conduct of another person where that conduct contravenes a provision of Chapter 2 of the ACL. Section 18 of the ACL NSW is contained in Chapter 2 of the ACL. 5. As noted in the matter of Sacks v Hammoud [2016] NSWCATAP 225 ("Sacks") at 67, to establish a cause of action under s 236 in respect of an alleged contravention of s 18, the applicant must relevantly prove: 1. The respondent made the alleged offending statements; 2. The offending statements were made in the course of trade or commerce: s 18(1); 3. Those statements were false or misleading or were likely to mislead or deceive: s 18(2); 4. The applicant suffered loss or damage "because of" that conduct: s 236(1)(a). 1. The Tribunal is satisfied based on the evidence before it that all of the above elements have been proven on the balance of probabilities. 2. In order to assess damages in this regard the Tribunal needs to consider what loss and damage was actually suffered and whether the loss and damage claimed arose "because" of the contravening conduct of the respondent (see Sacks at 63). 3. In the present matter the applicant is claiming the following amounts: 1. Repayments and interest payments $6629.81. 2. Repairs, assessments and expert report $6313. 3. Accommodation $120.31 4. CTP insurance $359.63 5. Vehicle transfer fees $634 6. Hire car and Uber fees $305.79 1. In relation to the above amounts the Tribunal is satisfied that the amounts claimed for repairs, assessment and expert report, hire care and uber fees and accommodation arose because of the conduct of the respondent. In relation to the claim for repayments and interest re-payments, CTP insurance and vehicle transfer fees that Tribunal is not satisfied that these arose because of the conduct of the respondent. COSTS 1. The applicant also sought an order for payment of her costs of and incidental to these proceedings. 2. Section 60 of the Civil and Administrative Tribunal Act 2013 ("NCAT Act") deals with costs, and provides as follows: 60 Costs (1) Each party to proceedings in the Tribunal is to pay the party's own costs. (2) The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs. (3) In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following— (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings, (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, (c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law, (d) the nature and complexity of the proceedings, (e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, (f) whether a party has refused or failed to comply with the duty imposed by section 36(3), (g) any other matter that the Tribunal considers relevant. 1. Further, the Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules) Part 9 (cll 37-40) deal with the determination of proceedings. Rule 38 deals with costs in the Consumer and Commercial Division of the Tribunal, and relevantly provides: 38 Costs in Consumer and Commercial Division of the Tribunal (1) This rule applies to proceedings for the exercise of functions of the Tribunal that are allocated to the Consumer and Commercial Division of the Tribunal. (2) Despite section 60 of the Act, the Tribunal may award costs in proceedings to which this rule applies even in the absence of special circumstances warranting such an award if— (a) the amount claimed or in dispute in the proceedings is more than $10,000 but not more than $30,000 and the Tribunal has made an order under clause 10(2) of Schedule 4 to the Act in relation to the proceedings, or (b) the amount claimed or in dispute in the proceedings is more than $30,000 1. The general principles concerning the awarding of costs under rule 38 of the NCAT Rules were considered by the NCAT Appeal Panel in the matters of Rekrut and Scott v Champion Homes Sales Pty Ltd; Champion Homes Sales Pty Ltd v Rekrut and Scott [2018] NSWCATAP 97 at [21]-[23]: 21 Generally, the exercise of an unfettered power to award costs involves costs "following the event" unless there are factors which militate against the successful party being awarded all of the party's costs – Oshlack v Richmond River Council (1998) 193 CLR 72 at [67] and [69]; [1998] HCA 11. 22 Generally the "event" refers to the event of the claim or the appeal, as the case may be, and may be understood as referring to the practical result of a particular claim or appeal – Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 at [15]. 23 Unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed – Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 (Bostik) at [38]. 1. In cases such as the present matter where the amount in dispute is more than $30,000, the Tribunal may award costs even in the absence of special circumstances warranting an award of costs. Generally, costs will be awarded to the successful party. 2. In the matter of Petropoulos v CPD Holdings Pty Ltd [2019] NSWCATAP 54 the principles for awarding costs in matters where the amount in dispute was more than $30,00 were set out at 9 namely: 1. the Tribunal may make such order as it thinks appropriate as long as it acts in accordance with the subject matter, scope and purpose of the power; 2. generally costs will be awarded to the party who has been successful, without attempting to differentiate between those particular issues on which it was successful and those on which it failed; 3. a separable issue can relate to any disputed question of fact or law on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter; 4. if the appellant loses on a separable issue argued on the appeal which has increased the time taken in hearing the appeal, then a special order for costs may be appropriate which deprives the appellant of the costs of that issue; 5. where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion and mathematical precision is illusory; and 6. there may be factors which militate against the awarding of costs to the successful party. 1. In the present matter the applicant is seeking the costs of her lawyer's fees. She did not seek leave to be represented by a lawyer in the proceedings and represented herself at the hearing. In those circumstances it would be unfair to award costs in the form of the applicant's lawyer's fees. Therefore, this portion of the claim is dismissed. 2. The Tribunal is satisfied that these orders are fair and equitable to all parties to the claim pursuant to s 79U(1) of the FTA. CONCLUSION 1. For the reasons outlined above the Tribunal makes the following orders: 1. Car Mart Direct Pty Ltd must immediately accept Sabah Hanif's return to it of the 2012 Mazda CX5 NSW Registration number DD70UW. 2. Car Mart Direct Pty Ltd are to be responsible for any towing costs in relation to the return of the vehicle to them. 3. Car Mart Direct Pty Ltd must pay Sabah Hanif the sum of $26,729.10 on or before 31 December 2023. 4. Upon Car Mart Direct Pty Ltd's performance of Orders 1, 2 and 3 above Sabah Hanif must do all things necessary to transfer unencumbered title in the 2012 Mazda CX5 NSW Registration number DD70UW to Car Mart Direct Pty Ltd within 7 days. ********** 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: 13 August 2024