Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Motor Magic Auto Parts Pty Ltd v Burns [2016] NSWCATAP 82 Hearing dates: 8 December 2015 Date of orders: 12 April 2016 Decision date: 12 April 2016 Jurisdiction: Appeal Panel Before: S Westgarth, Deputy President K Rosser, Senior Member Decision: (1) The application for leave to appeal is refused; and (2) The appeal is dismissed Catchwords: APPEAL – Leave grounds – evidence not reasonably available – clause 12 Schedule 4 Legislation Cited: Australian Consumer Law Civil and Administrative Tribunal Act 2013 Cases Cited: Collins v Urban [2014] NSWCATAP 17 Texts Cited: Nil Category: Principal judgment Parties: Motor Magic Auto Parts Pty Ltd (Appellant) Phillip Burns (Respondent) Representation: S Parker (Appellant) Peter Burns (Respondent) File Number(s): AP 15/49500 Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Citation: Not applicable Date of Decision: 27 July 2015 and 24 September 2015 Before: A Morris, General Member File Number(s): GEN 15/16985 reasons for decision Background 1. This is an appeal from a decision made in the Consumer and Commercial Division of the Tribunal. Initially the decision was in short form and published on 27 July 2015. That decision contained an order that the appellant pay to the respondent (who was the applicant at first instance) the sum of $2000.00 as "Refund of cost of defective ford diesel injectors". Subsequently, on 24 September 2015, more detailed reasons were published. The notice of appeal was filed with the Tribunal on 27 August 2015 but the submissions made by the appellant and the respondent are responsive to the detailed reasons published on 24 September 2015 (which we will refer to in these reasons as the "Decision"). 2. In the decision of 27 July 2015 the reasons for decision contained the following: Accordingly, the injectors are to be returned to the providers (which I note has occurred in the Hearing, and financial recompense made. 1. In the Decision, in addition to the order requiring the appellant to pay to the respondent the sum of $2000.00, an order is made that the respondent is to return "the injectors to the respondents [i.e. the appellant] (it is noted that this was done in the hearing room)". 2. It is helpful in understanding the grounds of appeal to firstly set out the relevant background which is recorded in the Decision. This background is set out in the following paragraphs. 3. On 22 July 2014 the respondent to the appeal purchased four fuel injectors for his Mazda BT 50 vehicle from the appellant. The price of the injectors was $2000.00. The Decision records that the injectors were fitted to the respondent's Mazda by a business known as Eden Mazda on 24 July 2014. However, at the appeal hearing the respondent's son (who appeared for and spoke for the respondent) stated that he had himself fitted the injectors. The Appeal Panel does not think anything turns on whether the injectors were fitted by the son or by Eden Mazda. 4. The Decision records that in September 2014 the respondent found that the injectors were blowing excessive smoke and that he had Eden Mazda inspect the injectors. The Decision records that the opinion of Eden Mazda was that the number three injector was faulty and that the fuel system was free of contaminants. The Decision also states that: It was concluded that the injector failed prematurely. 1. During the appeal hearing the Appeal Panel was shown the report of Eden Mazda referred to in the above paragraph. It is brief and states the following: Number three injector not functioning. Blowing excessive black smoke and excessive black flow at top of injector number 3 and inspected fuel quality, in excellent condition (fuel filter perfectly clean, no contaminants). 1. The Decision records that the appellant's representative gave evidence that the injectors were sourced from a company called "AZNEW Fuel Injectors Pty Ltd". 2. The Decision records that in November 2014 the respondent took the injectors to the appellant because they had failed and had requested a replacement. The appellant sent the injectors to AZNEW for testing. AZNEW returned the injectors on 20 January 2015 with a report which the Decision records stated that the "injectors failed the tests, indicating that they had "high back – leakage, causing delivery variation"". The Decision records that the AZNEW letter suggests that the "Most likely cause would be from contamination". 3. The Decision rejected a number of the contentions of the appellant and found that the injectors did not fit the requirements of s 54 of the Australian Consumer Law (ACL) which requires goods to be of an acceptable quality. The Decision records that there was no evidence to the effect that the respondent failed to take reasonable steps to prevent the injectors from becoming of unacceptable quality or otherwise causing damage by abnormal use. In particular, the Decision records that there was nothing in s 54(6) which would have the effect of enabling a conclusion to be drawn under that subsection. That subsection provides that goods do not fail to be of acceptable quality if the consumer has, in effect, been the cause of the failure of the goods. Finally, the Decision recorded that the injectors were being used "as intended in a standard engine and failing, whether due to contaminants that would reasonably be expected to be in that engine or for any other reason, were not fit for the purpose for which they were supplied, and that the seller is accordingly obliged to refund the buyer, as he cannot repair or otherwise render these injectors suitable for their intended purpose". The grounds of appeal 1. The appellant's grounds of appeal do not identify an error of law but rely on the grounds requiring leave set out in cl 12 of Sch 4 of the Civil and Administrative Tribunal Act 2013 NSW (the Act). The grounds are: 1. Since receiving the injectors back from the plaintiff as directed by the Tribunal after its decision was handed down, the injectors have been assessed by an authorised Bosch agent using Bosch approved techniques to determine the cause of failure. Such testing was offered to both the plaintiff and the Tribunal prior to its decision without success, this 100% accurate conclusive test has confirmed that the injectors failed due to contamination not due to section 54 of the ACL as stated – or any other reason. Injector contamination is no concern of Motor Magic Auto Parts P/L and as such, we should not be held responsible for such damage. 1. In the notice of appeal under the heading "Decision not Fair and equitable", the appellant refers to a statement attached to the notice of appeal. That statement asserts that the respondent had installed a secondary filter on the vehicle when the new injectors were installed and that the respondent's evidence from Eden Mazda only addressed the other filter and not the secondary filter. The appellant says that the respondent's report from Eden Mazda stated that the fuel filter was perfectly clean but omitted to make reference to the secondary filter. 2. Under the heading in the notice of appeal "Decision of the Tribunal against the Weight of Evidence", the appellant referred to his written submissions filed prior to the first instance hearing but did not provide the Appeal Panel with a copy of those submissions. This was so notwithstanding that directions were made by the Appeal Panel for the appellant and the respondent to file and serve their arguments and material to be relied upon prior to the hearing of the appeal. 3. In the notice of the appeal under the heading "Evidence is now available that was not reasonably available at the time of hearing", the appellant submitted that evidence constituting "conclusive proof" provided by an authorised Bosch agent that the product in question was contaminated by an external contaminant is now available. That evidence was attached to the notice of appeal and was a report from West End Diesel dated 25 August 2015 which relevantly stated: 1. Injectors were tested and found to be faulty. 2. Injectors did not meet specification of new injector because excessive back leakage at the time of testing. Additionally the report stated that all injectors were "failing at the same time – most likely cause would be from contamination". The report then said that upon "stripping down the injectors and further inspection, traces of water contamination and impurities were visible under microscope". Finally, the report stated: "Customer is advised to clean the fuel tank, check the rail, fuel pump and change the fuel filter. Failure to do so may cause abnormal injector and pump failure". 1. The appellant has filed submissions in support of the appeal and the following paragraphs provide a summary of those submissions. 2. The appellant drew attention to the fact that there was a discrepancy in the respondent's evidence as to whether the injectors were fitted by the respondent's son or by Eden Mazda. The appellant sought to argue that the respondent's contradictory evidence in this respect meant that the respondent's case could not be relied upon. 3. The appellant's submissions also draw attention to the fact that the report of Eden Mazda stated that the "fuel filter" was perfectly clean and that that language indicated that Eden Mazda checked only one fuel filter in circumstances where the respondent also had in place a second fuel filter. 4. The appellant submits that the statement obtained from West End Diesel dated 25 August 2015 demonstrates that the most likely cause of the fault was the presence of an "external contaminant". The appellant submits that until the appellant had received the injectors back from the respondent after the orders had been made at first instance it was not possible for the appellant to have the conclusive testing conducted. The appellant had obtained a quotation from AZNEW as to the cost of such testing. Such testing had not been carried out from November 2014 due to the "cost factor" and because the appellant had "little chance of recouping such costs from the respondent". The appellant described such testing as an "accurate testing procedure" but the evidence from the appellant was that such testing was destructive i.e. the injectors would have no ongoing utility or value. The appellant submits that the West End Diesel Report was evidence not reasonably available at the time the proceedings were being heard. 5. As stated above, a further ground of appeal was that the Decision was made against the weight of evidence. The point made by the appellant was that the Decision to the effect that there was no conduct by the respondent of the kind envisaged by s 54(6) of the ACL (essentially being conduct which would attribute the fault to the conduct of the consumer) was against the weight of evidence in as much as there was evidence that the respondent had fitted a secondary fuel filter to the vehicle. Such evidence demonstrated the awareness of the respondent to take reasonable steps to prevent water contamination from fouling the injectors. The appellant submitted that the weight of evidence was to the effect that such "preventative steps did not take place at all". The appellant points to the dispute as to who actually fitted the injectors and also to the language in the Eden Mazda report stating that the fuel "filter" was perfectly clean whereas it would have used the word "filters" had the secondary filter system in fact been installed. 6. A further ground of appeal was that the appellant was treated unfairly at the hearing. The appellant complains of the Member engaging in unfair and irrelevant questioning and that the Member showed "discrimination" in the analysis of the evidence. In particular the appellant submits that the Member's rejection of evidence concerning the shortcomings of common rail diesel engines, despite evidence of such short comings having been provided demonstrated that the Decision was against the weight of evidence. 7. A further ground of appeal was that the Decision failed to give appropriate weight to the report supplied by the appellant as against the reports supplied by the respondent. In particular, the appellant states that the Eden Mazda report did not identify a cause of the "excessive backflow". Nor did a report also supplied by the respondent from Denco Diesel and Turbo identify the cause of "excessive returned fuel". This is to be compared with the report tendered by the appellant from West End Diesel dated 29 May 2015, which gave a cause namely stating that the "most likely cause would be from contamination". In short, all three reports identified symptoms but only the West End report identified the most likely cause of the symptoms. 8. Finally, the appellant made a submission that he should be entitled to recovery of his costs relating to the initial hearing and the appeal. Reply to appeal 1. The respondent submits that he has returned the injectors to the appellant at the conclusion of the first instance hearing, that the appellant has elected to subject the injectors to destructive testing and that it would be inappropriate therefore for the Tribunal to order the return of the injectors to the respondent. 2. The respondent objects to the appellant now relying upon new reports and states that AZNEW is not independent. 3. The respondent submits that the appellant had an opportunity at least from 7 November 2014 to 20 January 2015 to undertaken the destructive tests which were later performed but made a decision not to do so. 4. The respondent states that between January 2015 and handover of the injectors in July 2015 the injectors have been subjected to humidity, moisture and dust and accordingly the tests recently undertaken at the behest of the appellant should not be regarded as conclusive. 5. The respondent is critical of the report provided by West End upon the basis that the report and the photographs which the appellant also provided do not contain any reference to the serial numbers of the injectors or other information confirming that the injectors tested were the injectors which were the subject of this dispute. 6. Finally, the respondent also seeks his costs. Decision 1. The first issue which the Appeal Panel addresses is the question of whether the fresh evidence upon which the appellant wishes to rely should be permitted. This is necessary because the grounds of appeal from a decision made in the Consumer and Commercial Division are regulated by the Civil and Administrative Tribunal Act 2013 (NSW) (the Act) and in particular by s 80 and cl 12 of Sch 4 of that Act. Section 80 provides that there may be an appeal on a question of law as of right or with leave on other grounds. Clause 12 of Sch 4 states that despite s 80(2)(b) of the Act an internal appeal against a Division decision may be made only if the Appeal Panel is satisfied that the appellant may have suffered a substantial miscarriage of justice because: (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being new evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). 1. Accordingly, as the appellant wishes to put forward new evidence (namely the report from West End Diesel dated 25 August 2015) it is necessary to consider whether the evidence submitted by the appellant meets the requirements of cl 12. In other words is the proposed evidence that was "not reasonably available at the time the proceedings under appeal were being dealt with". 2. In our view the new evidence is not evidence that was not reasonably available at the time the proceedings were being dealt with. The new evidence was not available because the appellant made a decision not to have West End Diesel undertake the test which it ultimately did undertake. That decision was made because the appellant was concerned about the cost of obtaining such a report. The purpose of restricting new evidence to new evidence which was not reasonably available is to encourage parties to put forward all of their evidence for consideration at the hearing so that the Tribunal is able to reach a final decision. This principle which is sometimes called the "finality principle" is designed to bring finality to the dispute and to avoid a situation where a losing party seeks, after being unsuccessful at the hearing, to introduce fresh evidence. Whilst it is understandable that the appellant made the decision not to have the further testing undertaken by West End Diesel because of its cost and because of its destructive nature, the consequence is that the appellant took the risk that the evidence which was before the Member at first instance would be sufficient. The Member found that the evidence was not sufficient. It would be contrary to the finality principle to now allow the fresh evidence to be considered. In any event, the Appeal Panel is obliged to follow the provisions of cl 12 which limit consideration of new evidence to new evidence which was not reasonably available at the first hearing. The West End report is not such evidence. 3. The appellant submits that there was a discrepancy in the respondent's evidence as to whether the injectors were installed by Eden Mazda or by the respondent's son. In our view, the fact that the Member found that the injectors were installed by Eden Mazda but that the respondent's son stated that he had installed the injectors, does not mean that the decision was in error in ultimately finding that the injectors were not fit for purpose. Essentially the respondent was successful because the Tribunal was satisfied that the evidence of Eden Mazda was to be relied upon in concluding that injector 3 had failed prematurely. 4. The Tribunal has published decisions explaining the circumstances applicable to upholding an appeal on the basis of the provisions of cl 12 of Sch 4 of the Act, namely where the appellant submits there has been a substantial miscarriage of justice. The decision of Collins v Urban [2014] NSWCATAP 17 sets out the relevant principles to be considered. 5. Collins v Urban states that the concept of a substantial miscarriage of justice refers to a failure in the way a matter was conducted or decided which deprived the appellant of a chance that was fairly open of achieving a better outcome than occurred. 6. The Appeal Panel in that case stated that it should be accepted that a substantial miscarriage of justice may have been suffered because of any of the circumstances referred to in cl 12(1)(a), (b) or (c) where there was a significant possibility or a chance that was fairly open that a different and more favourable result would have been achieved for the appellant had the relevant circumstances in paragraph (a) or (b) not occurred or the fresh evidence under paragraph (c) had been before the Tribunal at first instance. 7. However, if the Appeal Panel is satisfied that the appellant may have suffered a substantial miscarriage of justice on one of the grounds identified then the Appeal Panel is not obliged to grant leave but may grant leave under s 80(2)(b) of the Act. In other words, the Appeal Panel must consider whether it should exercise its discretion to grant leave. The principles which govern the granting of leave to appeal have also been identified in the case of Collins v Urban. These may be summarised as follows: 1. In order to be granted leave to appeal, the appellant must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact or an issue in dispute; 2. Ordinarily it is appropriate to grant leave to appeal only in matters that involve issues of principle, questions of public importance or 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. A factual error that was unreasonably arrived at and clearly mistaken may be a relevant matter. 1. Having regard to the above principles we are of the opinion that there has not been a substantial miscarriage of justice in this case and even if there has been, we do not think it appropriate to exercise our discretion to grant leave to appeal. 2. Having regard to the evidence before the Member at first instance it is our view that it was reasonably open to the Member to come to the conclusion that he came to and to make the orders that were made. We do not think that, having regard to the evidence before the Member, there was a significant possibility or a chance fairly open for the appellant to have achieved a more favourable outcome. In addition, even if we were inclined to decide that there has been a substantial miscarriage of justice we would not grant leave because there is in this case, no issue of principle or a question of public importance but more importantly in so far as these parties are concerned there is no injustice which is reasonably clear in the sense of going beyond merely what is arguable or any error that is plain and readily apparent. The Member had a body of evidence before him and it was reasonable for the Member, having regard to that evidence, to come to the conclusion which he came to. 3. We refer to the submission that the appellant was treated unfairly and that the Member showed discrimination. We were not taken to any evidence in support of that submission. The submission specifically referred to the Member's comments concerning the shortcomings of common rail diesel engines. Whether those comments were justified on the evidence, is in our view, not relevant to the essential finding that the injectors were not fit for purpose. Accordingly, this submission does not, in our view, assist the appellant. 4. Accordingly, it is our view that the appeal must be dismissed. 5. The respondent has sought his costs of the appeal. At the time the appeal was filed, the Appeal Panel could not award costs of an appeal where the amount claimed was less than $10,000 unless special circumstances were found (see s 60 of the Act). No special circumstances have been identified to the Appeal Panel and nor are we able to identify any. Accordingly, the application for costs is refused. 6. The orders of the Appeal Panel will be that the application for leave will be refused and the appeal will be dismissed. Orders 1. The Appeal Panel makes the following orders: 1. The application for leave to appeal is refused; and 2. The appeal is 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: 12 April 2016