Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Temple v AMR Motors Pty Ltd [2016] NSWCATAP 121 Hearing dates: 11 March 2016 Date of orders: 14 June 2016 Decision date: 14 June 2016 Jurisdiction: Appeal Panel Before: PR Callaghan SC, Principal Member DAC Robertson, Senior Member Decision: (1) Leave to appeal is granted. (2) The appeal is upheld. (3) The order under appeal, that the application be dismissed, is set aside. (4) The matter is remitted to the Consumer and Commercial Division of this Tribunal to be reconsidered in a new hearing by a Member other than the Member who made the order under appeal. Catchwords: APPEAL and APPLICATION FOR LEAVE TO APPEAL – Civil and Administrative Tribunal – unfairness in hearing – failure of decision to deal with material issues – unexplained preference for evidence Legislation Cited: Australian Consumer Law Civil and Administrative Tribunal Act 2013 Fair Trading Act 1987 Motor Dealers and Repairers Act 2013 Cases Cited: Aceti v Burhan Pty Ltd [2015] NSWCATAP 55 Beale v GIO of NSW (1997) 48 NSWLR 430 Collins v Urban [2014] NSWCATAP 17 Ferella v Chief Commissioner of State Revenue [2014] NSWCA 378 Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 Category: Principal judgment Parties: Appellants: Barbara Temple and Thomas Fischer Respondents: AMR Motors Pty Ltd & Mazda Australia Pty Ltd Representation: Applicants: In person, through Thomas Fischer Respondents: In person, through Chooi-Lin Han File Number(s): AP 15/55946 Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 16 September 2015 Before: F.D.L Hollis, General Member File Number(s): MV 15/08075 REASONS FOR DECISION Background 1. 1 Ms Barbara Temple, the first appellant, purchased a new Mazda 3 Diesel motor vehicle ("the vehicle") from the first respondent in December 2010. The second appellant is the partner of the first appellant and has had carriage of the proceedings ("the subject proceedings") in which the appealed decision was made, and this appeal, on behalf of the first appellant and himself. The second respondent is the distributor of the vehicle and has had carriage of the subject proceedings, and this appeal, on behalf of the first respondent and itself. The appellants experienced problems with the vehicle, apparently relating to the diesel particulate filter but also other matters. 2. Particularly after seeking attention from the first respondent on 3 December 2014 and 3 February 2015, they instituted the subject proceedings in the Consumer and Commercial Division of this Tribunal by application lodged on 17 February 2015, claiming rectification of the problems with the vehicle or a refund of the purchase price paid for the vehicle of $28,000.00. Following the hearing of the subject proceedings on 12 June 2015, the Tribunal published a decision dated 16 September 2015, finding that "the applicants' case does not meet the civil standard of proof required to establish claim" and dismissed the application. 3. The appellants instituted this appeal on 7 October 2015, making both an appeal and an application for leave to appeal. The matters relied on by the appellants effectively relate both to the appeal and the application for leave to appeal. They are recounted in the Notice of Appeal at some length and somewhat discursively. Principally, it seems to us, the appellants there rely on the following assertions: 1. Mr Fischer has a hearing disability and wears two hearing aids, he was at a disadvantage on that account during the hearing; 2. The Member failed to deal with some of the principal issues raised at the hearing, namely, high diesel consumption and diesel contamination of the engine oil; 3. The Member addressed the claim as involving a warranty matter and one under the Motor Dealers and Repairers Act 2013 rather than one under the Australian Consumer Law; 4. In the appealed decision the Member expressed preference for the respondents' evidence and gave no, or no sufficient, reasons for that preference; 5. In the appealed decision the Member erred in some of his factual findings particularly to the effect that the vehicle had been driven only short distances and that there was no evidence that there had been no indication of any problem from the diesel particulate filter warning light. Hearing of Subject Proceedings and Appealed Decision 1. At the hearing of the subject proceedings Mr Fischer appeared, alone, for the applicants (himself and the first appellant) and the respondent was represented by three employees, Messrs Raymond Woodhouse, Shane Bradford (the National Technical and Warranty Manager of the second respondent) and Shaun Astley (a Senior Manager in the Customer Support section of the second respondent). 2. Mr Fischer says that he suffers from a hearing disability and at the beginning of the hearing he requested that the doors of the hearing room be closed. His request was declined by the Member, evidently, so Mr Fischer says, "for security reasons". Mr Fischer says also that the persons present were all seated at a table facing forward to the Member and this caused hearing problems for him in communications between him and the respondents' representatives. 3. The appealed decision dealt with the application, the hearing and the issues thus: 2. The application asserts that there has been a problem with the diesel particulate filter (DPF) for some time and seeks a full refund of the purchase price of $28,000.00 or in the alternative rectification of what are asserted to be DPF issues with the vehicle. 3. The application is silent on when precisely the DPF issue was identified. However the application itself indicates that the problem was first noticed by the applicants in the latter part of 2014, again outside the three year period that most warranties cover. The applicants assert that the problem is generic to the vehicle, is a safety issue, and should trigger a motor vehicle recall of the make. 4. The applicants case consisted of submissions, an expert report, the author of which was not available at hearing. 5. The Respondents case consisted of submissions, reports, and three witnesses from the second respondent gave evidence of the findings of the investigations made by the second respondent. He also made a number of oral submissions. 6. The second applicant questioned the three persons present from the second respondent (Mr Raymond Woodhouse, Mr Shaun Astley and Mr Shane Bradford). 7. Mr Bradford was a mechanical engineer who gave evidence about the DPF and the way it works, it is a type of anti pollution device, whereby the unburned diesel particles are trapped in the filter. When the engine reaches a determined operating temperature, the vehicle sends fuel into the filter, which is ignited by the engine heat, and the polluting particles are burnt. 8. Mr Fischer was asked by the Tribunal how the vehicle was operated, he asserted that it was only filled with fuel from a local Shell Service Station and was only driven short distances, to the local shopping centre or other proximate locations. 9. The second respondent carried out extensive tests on the vehicle, and the system operated correctly. The DPF is part of the exhaust system, not the engine, and the testing showed that the engine functioned correctly. 10. The Mazda 3 Handbook produced by the second respondent, clearly cautions against driving the vehicle short distances and whilst the application asserted that the DPF warning light did not operate, however, there was no other evidence of this, from the applicants. The Handbook states that the vehicle needs to be driven at 2000rpm at a speed of 40 kph or more for ten to fifteen minutes to eliminate the particulate filter material. 11. Whilst consideration has been given to the expert report from the applicants (Mr Alessi), his evidence is contradicted by the expert evidence from the second respondent, and as the Tribunal accepts the evidence from the second respondents, both in oral and written form as being more cogent and credible. The applicants gave no evidence of complying with the manufacturers recommendation as to driving the vehicle at more 2000 rpm or more at 40 kpm or more for ten to fifteen minutes or more to clear the DPF. 12. The Tribunal also notes the limitation period set out s69 of the Motor Dealers and Repairers Act, however the respondents have addressed the substantive issues in the applicants claim, presumably to answer the assertions made by the applicants. 13. Given the submissions and documents from the respondents, the state of the evidence from the applicants, and the fact that the affirmed evidence from the respondents is that there has not been a similar complaint made about this type of vehicle, the Tribunal finds that the applicants case does not meet the civil standard of proof required to establish a claim. Appeal Hearing 1. At the appeal hearing, Mr Fischer appeared representing himself and the first appellant and he had with him Mr Renzo Alessi, a mechanical examiner and licensed investigator, whose reports had been produced by the appellants in the subject proceedings. Representatives of the second respondent, on behalf of both respondents, took part in the appeal hearing by telephone. Those representatives were Ms Chooi-Lin Han of the National Customer Support section and Mr Shane Bradford, the National Technical and Warranty Manager (who had appeared at the Consumer and Commercial Division hearing) and Mr Steven Groves, a supervisor in the National Customer Support section. Ms Han acted as the spokesperson for the respondents. Each side had lodged written submissions and other material with the Tribunal. Consideration General 1. Section 80(2) of the Civil and Administrative Tribunal Act 2013 ("the NCAT Act") relevantly provides that an appeal may be made to an Appeal Panel against a decision such as the appealed decision as of right on any question of law, or with leave of the Appeal Panel on any other grounds. 2. As was pointed out in Ferella v Chief Commissioner of State Revenue [2014] NSWCA 378 at [22] it is "necessary for the notice of appeal to identify precisely the particular questions of law." Here, the Notice of Appeal does not clearly distinguish in the formulation of the matters relied on between asserted questions of law and other grounds and presents those matters somewhat discursively. We appreciate, however, the guidance given in Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [12]: In circumstances where the appellants are not legally represented, it is apposite for the Tribunal to approach the issue by looking at the grounds of appeal generally. It is necessary for the Appeal Panel to determine whether a question of law has in fact been raised, subject to any procedural fairness considerations that might arise to the respondent. 1. We also add the helpful, but not exhaustive, list of potential questions of law given in the Prendergast decision at [13]: 1. Whether there has been a failure to provide proper reasons. 2. Whether the Tribunal identified the wrong issue or asked the wrong question. 3. Whether a wrong principle of law had been applied. 4. Whether there was a failure to afford procedural fairness. 5. Whether the Tribunal failed to take into account relevant (i.e. mandatory) considerations. 6. Whether the Tribunal took into account an irrelevant consideration. 7. Whether there was no evidence to support a finding of fact. 8. Whether the decision was so unreasonable that no reasonable decision-maker would make it. 1. Clause 12(1) of Schedule 4 of the NCAT Act provides that an application for leave to appeal from a decision of the Consumer and Commercial Division of this Tribunal may be granted: …only if the Appeal Panel is satisfied 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. In relation to that clause, in Collins v Urban [2014] NSWCATAP 17 at [80] an Appeal Panel of this Tribunal, by way of summary of relevant general principles, after a review of a number of cases, said that: "Accordingly, it should be accepted that a substantial miscarriage of justice may have been suffered because of any of the circumstance referred to in cl 12(1)(a), (b) or (c) where there is a "significant possibility" or "a chance which was fairly open" that a different or more favourable result would have been achieved for the appellant had the circumstance referred to in para (a) or (b) not occurred or if the fresh evidence at para (c) had been before the Tribunal as first instance." And similarly at [84] the Appeal Panel said that: In order to be granted leave to appeal, the applicant 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 … Ordinarily it is appropriate to grant leave to appeal only in matters that involve: issues of principle; questions of public importance or matters or administration or policy which might have general application; 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, so that it would be unjust to allow the finding to stand; a factual error that was unreasonably arrived at and clearly mistaken; or 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. We propose working through the grounds raised by the appellants as we have sought to summarise them in this decision above in paragraph 3. Second Appellant's hearing disability 1. In support of his complaints concerning his hearing the second appellant lodged an audiometerist's report in the following substantive terms: "The audiogram indicates a mild to severe/profound sloping sensorineural hearing loss binaurally. Mr Fischer would be expected to experience difficulty in speech perception in most situations and even though he wears hearing devices his difficulties would be considerably exacerbated in any situation where background noise is present whether from other rooms, corridors etc. In situations where there is any significant distance between the speaker and himself, or if the speaker is not directly facing Mr Fischer, the problem is compounded, making it more difficult for him to understand clearly. Even if public address equipment is provided, the nature of his hearing loss would place him at considerable disadvantage compared to an individual with normal hearing." 1. At the appeal hearing Mr Fischer employed the hearing loop within the room and that involved his using a set of linked-in earpieces instead of his usual hearing aids. 2. We assess these complaints by Mr Fischer as having some substance but not as constituting on their own unfairness to the appellants of an order sufficient to constitute a failure to afford procedural fairness and a possible substantial miscarriage of justice. Their significance, however, should also be considered together with any other substantiated complaints by the appellants. Failure to deal with issues 1. The Application which the appellants lodged on 17 February 2015 to institute the subject proceedings referred to problems with the diesel particulate filter. The appellants say, however, in the Notice of Appeal that: On 24 February 2015, we faxed an additional reason for orders and it states 'During the normal driving of the car, the diesel contaminates the oil in the engine. This affects the performance of the car and can lead to safety issues. We asked for this to be rectified and if this cannot be done, we ask for a refund of the purchase price of $28,000.00'. 1. There was before the hearing in the Consumer and Commercial Division a report dated 7 April 2015 by Mr Alessi in which he described himself as a Mechanical Examiner and Licensed Investigator, attached a curriculum vitae and acknowledged his awareness of, and intended compliance with, the Expert Witness Code of Conduct. The report detailed his inspections of the vehicle commencing on 31 March 2015. It explained at paragraph 4: The purpose of our inspection was specifically to address concerns relating to high fuel consumption, contamination of the engine oil with diesel and the need for a number of Particulate Filter Regenerations. The report included the following paragraphs: 14. The fuel system was tested for leak down of the fuel rail and pump while the Subject Vehicle was permitted to remain stationary over night with the return system isolated. 15. Over a period of approximately 14 hours, the fuel system had bled dry. With the fuel system isolated the only path for fuel deposit was the combustion chamber or directly into the oil system. 16. The loss of fuel pressure is consistent with fuel entering into the combustion chambers and dispersing into the engine oil over night. Alternatively, it is also consistent with fuel pump leakage directly into the engine oil. 17. Needless to say, the fuel system may be experiencing some leakage whilst it is in operation; further adding to the dilution of the engine oil with diesel fuel. An ultimate conclusion was expressed thus in the report: 28. After careful inspection, testing and evaluation of the Subject Vehicle, we advise that the faults named above in regards to excessive oil incrimination; excessive DPF clogging and regeneration requirements and high fuel consumption, will need addressing to eliminate the risk of premature failure of the components and the engine. 1. In the appealed decision, the diesel particulate filter problems were addressed particularly at [2], [3], [7], [9], [10] and [11]. The problems of diesel contamination of the engine oil and high fuel consumption, however, were not addressed at all. In our opinion the latter problems were material issues and should have been dealt with in the appealed decision. 2. The adequacy of reasons in decisions of this Tribunal at first instance was considered in Collins v Urban [2014] NSWCATAP 17 at [43] to [64]. We note in particular what was said at [49]: "One reason why reasons are generally required, notwithstanding a provision such as s62, is that if reasons for decision are neither sought nor prepared and an appeal or application for leave to appeal is lodged, the findings of fact and legal reasoning of the decision maker at first instance would not be available to the appellate body by way of written reasons. In many instances not having findings of fact and legal reasoning explicitly available may render effectively worthless any appeal right because the appellate body does not have a statement of the findings of fact, the relevant law and explanation of how the law was applied to the facts as found, by the decision maker at first instance." And at [53]: "The other basis upon which it has been held that reasons are generally required to be given was recently reiterated by the Court of Appeal in Keith v Gal [2013] NSWCA 339 (per Gleeson JA at [109]) as being that failure to provide sufficient reasons promotes 'a sense of grievance' and denies 'both the fact and the appearance of justice having been done', thus working a miscarriage of justice, citing Mifsud v Campbell (1991) 21 NSWLR 725 at 729: Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 at 442 per Meagher JA…" 1. We also note the guidance at [57] as to some aspects to be considered concerning the adequacy of reasons: * The content and detail of the reasons for decisions to be provided will vary according to the nature of the jurisdiction which the body in question is exercising and the particular matter the subject of the decision; * The administration of justice in this regard requires a pragmatic and functional approach to the obligations imposed upon decision makers at first instance; * Not only is the obligation not universal in nature, but it is variable in its content and whilst transparency in decision-making is an important value, it is not cost free, and may involve separate parameters of quantity and quality; There is perhaps within that paragraph a suggestion of a cautious and not overly critical approach to the review on appeal of the adequacy of reasons in a decision under appeal (Aceti v Burhan Pty Ltd [2015] NSWCATAP 55 at [25]). 1. Section 62 of the NCAT Act provides that the statement of reasons for the purposes of that section must include: 1. The findings on material questions of fact, referring to the evidence or other material on which those findings were based, 2. The Tribunal's understanding of the applicable law, 3. The reasoning processes that lead the Tribunal to the conclusions it made. In Beale v GIO of NSW (1997) 48 NSWLR 430 at 443 Meagher JA spoke of three fundamental elements of a statement of reasons: first, there should be reference to relevant evidence; secondly, there should be set out any material findings of fact and any conclusions or ultimate findings of fact reached; and thirdly, there should be provided reasons for making the relevant findings of fact (and conclusions) and reasons in applying the law to the facts found. 1. Even adopting a cautious and not overly critical approach, we see the failure of the reasons in the appealed decision to deal with the issues of high fuel consumption and diesel contamination of the engine oil, as a significant omission. We also see that significance as being of a sufficient order to suggest an error of law and also a lack of fairness of an extent which may involve a substantial miscarriage of justice. Australian Consumer Law 1. In the appealed decision reference is made at [3] to motor vehicle warranties generally having a three year term and at [12] to limitation periods in the Motor Dealers and Repairers Act 2013, s69. The appellants complain that the Australian Consumer Law ("ACL") is not addressed in the decision. The Australian Consumer Law did not come into operation until 1 January 2011 and as the subject vehicle was purchased in December 2010, it may not have applied to this transaction. Nevertheless, the then current version of the Fair Trading Act 1987 (NSW) contained similar consumer protection provisions to the ACL and warranted consideration by the Tribunal. There is an obligation in the Tribunal, at first instance, to look at the complaints of an unrepresented applicant generally and endeavour to determine whether any legal basis, within the Tribunal's jurisdiction, has been raised (Aceti v Burhan Pty Ltd at [30]). We do add, however, the issue of limitation periods under such legislation was not agitated before us and that would be an issue which would have to be addressed in any new hearing. 2. This is another matter bearing on the fairness of the decision and the possibility of a substantial miscarriage of justice. Expression of preference for respondents' evidence 1. The appellants complain also that in the appealed decision, the Member expressed preference for the evidence of the respondents (at [11] and [13]) but gave no, or no sufficient reasons for the preference. For example, the Tribunal said at [11]: "…the tribunal accepts the evidence from the second respondents, both in oral and written form as being more cogent, and credible". Expressions of that type are "bald conclusionary statements" of the sort discussed in Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 at [63] to [66] and said there to be inadequate as statements of reasons. Again, this is a matter going to procedural fairness and the fairness of the decision and the possibility of a substantial miscarriage of justice. It has particular relevance to, and reinforces the failure of the appealed decision to deal with, the issues of high fuel consumption and diesel contamination of engine oil, particularly as discussed in Mr Alessi's report. We add that if there were a concern during the hearing that Mr Alessi was not present to give oral evidence, the Tribunal perhaps should have drawn Mr Fischer's attention to that concern, bearing in mind in particular s38(5) of the NCAT Act: The Tribunal is to take such measures as are reasonably practicable: 1. To ensure that the parties to the proceedings before it understand the nature of the proceedings, and 2. If requested to do so – to explain to the parties any aspect of the procedure of the Tribunal, or any decision or ruling made by the Tribunal, that relates to the proceedings, and 3. To ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings. Alleged erroneous factual findings 1. The appellants complained that in the appealed decision there are erroneous factual findings, particularly those at [8] and [10] to the effect that the vehicle had been driven only short distances and that there was no evidence that there had been no indication of any problem from the diesel particulate filter warning light. Mr Fischer strongly disputes the first finding and points for example to the record in Mr Allessi's report of 7 April 2015 that the vehicle had then logged 61,952 kilometres, indicating an annual average of 14,000 kilometres. As to the second finding, Mr Fischer points, for example, to references to the non-illumination of the diesel particulate warning light in written communications between himself and Mr Mark Crawshaw of the second respondent's National Customer Support section in early 2015. Such errors would really go to an argument that the appealed decision was against the weight of evidence and without a full record (including transcript) of the hearing of the subject proceedings, it would be inappropriate for us to come to a view on such an argument. Conclusions 1. In the result, and as discussed above, we have come to the view that all of the appellants' arguments on appeal, except the last one, have been made out. Dominant among those arguments, we assess to be those relating to failure to deal with material issues and the unexplained expression of preference for the respondents' evidence. Those two inadequacies in the reasons for the appealed decision constitute an error of law and the appeal should be upheld on that account. Also, cumulatively, all those arguments constitute a situation where, in our opinion, there was the lack of a fair hearing such that there may have been a substantial miscarriage of justice and that we should grant leave to appeal on that basis. We should therefore set aside the appealed decision and remit the matter to the Consumer and Commercial Division of this Tribunal to be reconsidered in a new hearing by a member other than the member who made the order under appeal. 2. The Appeal Panel ORDERS that: 1. Leave to appeal is granted. 2. The appeal is upheld. 3. The order under appeal that the application be dismissed, is set aside. 4. The matter is remitted to the Consumer and Commercial Division of this Tribunal to be reconsidered in a new hearing by a Member other than the Member who made the order under appeal. ********* 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. 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