Civil and Administrative Tribunal New South Wales Medium Neutral Citation: JCB Enterprises Pty Ltd v Mangion [2016] NSWCATAP 180 Hearing dates: 20 July 2016 Date of orders: 10 August 2016 Decision date: 10 August 2016 Jurisdiction: Appeal Panel Before: Hennessy LCM, Deputy President A Boxall, Senior Member Decision: 1. Leave is granted for the appellant to be represented by Stanford Law Firm. 2. Leave is granted for the respondent to be represented by P Batley. 3. Leave is refused for the appeal to be made on grounds other than a question of law. 4. The appeal is dismissed. 5. The Principal Registrar is to pay to the respondent $13,055.35 being the amount paid to the Tribunal by the Appellant pursuant to an order made on 9 June 2016. Catchwords: APPEAL – Australian Consumer Law - reasonable costs incurred by the consumer in having a vehicle repaired – adequacy of reasons - duty to refer to relevant evidence – duty to provide reasons for failing to refer to relevant evidence Legislation Cited: Australian Consumer Law, cll 54, 259 Civil and Administrative Tribunal Act 2013 (NSW), s 62(3), s 80(2)(b) Cases Cited: Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 Collins v Urban [2014] NSWCATAP 17 Khan v Kang [2014] NSWCATAP 48 Mifsud v Campbell (1991) 21 NSWLR 725 Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 Category: Principal judgment Parties: JCB Enterprises Pty Limited t/as Beautcars (Appellant) Gavin Mangion (Respondent) Representation: Counsel: P Batley (Respondent) Solicitors: Stanford Law Firm (Appellant) File Number(s): AP 16/24794 Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 12 May 2016 Before: R Harris, General Member File Number(s): MV 15/62700 REASON FOR DECISION The questions 1. The questions in this appeal are whether the Consumer and Commercial Division of the Tribunal: 1. failed to refer to relevant evidence; or 2. failed to give adequate reasons when it found that a consumer was entitled "to recover all reasonable costs incurred" by him in having a vehicle repaired: Australian Consumer Law (ACL), cl 259(2)(b)(i). 1. The supplier of the vehicle submits that when determining whether the costs were reasonable, the Consumer and Commercial Division should have taken into account other quotes for the repair of the vehicle. The supplier also said that the Tribunal had not given adequate reasons for concluding that the costs incurred by the consumer in repairing the vehicle were reasonable. Finally, the supplier asked the Appeal Panel to take into account a new quote that was not given to the Consumer and Commercial Division. Background to the questions 1. In September 2015 the consumer, Mr Mangion, bought a 2007 Nisan Navara from the supplier, JCB Enterprises Pty Ltd, for $15,500.00. The vehicle overheated the day after it had been purchased and required repairs. There is now no dispute that the supplier did not comply with the guarantee that the vehicle be of acceptable quality: ACL, cl 54. The solicitor for the supplier referred to this as the question of "liability". 2. While there was no dispute about "liability", there was a dispute about what the supplier's solicitor called the question of "quantum". We understand the solicitor to be referring to the test in cl 259(2) of the ACL and, in particular, to cl 259(2)(b)(i) which we have put in bold type: (2) If the failure to comply with the guarantee can be remedied and is not a major failure: (a) the consumer may require the supplier to remedy the failure within a reasonable time; or (b) if such a requirement is made of the supplier but the supplier refuses or fails to comply with the requirement, or fails to comply with the requirement within a reasonable time--the consumer may: (i) otherwise have the failure remedied and, by action against the supplier, recover all reasonable costs incurred by the consumer in having the failure so remedied; or (ii) subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection. 1. Neither party submitted at the hearing before the Consumer and Commercial Division that the failure to comply with the guarantee as to acceptable quality was a "major failure": ACL, cl 259(2). Consequently, the issues for determination included: 1. whether the consumer required the supplier to remedy the failure to comply with the guarantee: ACL cl 259(2)(a); 2. if so, whether the supplier refused or failed to comply with the requirement or failed to comply with the requirement within a reasonable time: cl 259(2)(b). 1. The Consumer and Commercial Division impliedly answered 'yes' to both these questions and there was no challenge to those findings on appeal. The supplier challenged the finding that the consumer was entitled to $13,055.35 being the "reasonable costs incurred" in having the vehicle repaired: cl 259(2)(b)(i). That sum was made up of $6,155.35 for labour and parts and $6,850.00 for a replacement engine. The Consumer and Commercial Division's findings are set out at [13]: The Tribunal is satisfied on the balance of probabilities that the work identified by Mr Furness (the consumer's repairer) was reasonable and necessary and will allow the sum of $6155.35. The Tribunal is satisfied on the balance of probabilities that the amounts charged by Mr Furness are reasonable. The Tribunal is satisfied that the amount paid by the applicant (consumer) for the replacement engine reflect what he reasonably had to pay to acquire the replacement engine. The Tribunal accepted the applicant's (consumer's) evidence in relation to his attempts to source an engine and will allow the amount of $6,850.00. The Tribunal is satisfied that the applicant is entitled to recover the towing costs in the sum of $50.00 (Words in brackets added.) Consideration of the questions Grounds of appeal 1. The supplier is entitled to appeal as of right on any question of law or with leave of the Appeal Panel on any other ground: Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), s 80(2)(b). At the hearing the supplier's solicitor abandoned the grounds of appeal in the Notice of Appeal and the written submissions dated 28 June 2016. Instead, the supplier relied on one ground of appeal on a question of law. That ground was that the Tribunal had provided inadequate reasons for concluding that $13,055.35 was the reasonable cost incurred by the consumer in having the vehicle repaired. That ground has two limbs: 1. the Consumer and Commercial Division failed to refer to all the evidence relevant to this finding; and 2. the Consumer and Commercial Division failed to make its reasoning process clear. 1. The supplier also sought leave to appeal on grounds other than questions of law. We deal with that application at the end of these reasons. Referring to all the evidence - legal principles 1. When providing written reasons the Tribunal must set out "the findings on material questions of fact, referring to the evidence or other material on which those findings were based" NCAT Act, s 62(3)(a). As well as the statutory duty there is a common law duty to give reasons which applies to tribunals as well as courts: Khan v Kang [2014] NSWCATAP 48 at [42]. 2. In Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 at 441 Meagher JA identified three fundamental elements of a statement of reasons. The first was that a judge should "refer to relevant evidence". His Honour held that "where certain evidence is important or critical to the proper determination of the matter and it is not referred to by the trial judge, an appellate court may infer that the trial judge overlooked the evidence or failed to give consideration to it." Meagher JA went on to say that, "Where conflicting evidence of a significant nature is given, the existence of both sets of evidence should be referred to". 3. In Mifsud v Campbell (1991) 21 NSWLR 725 at 728 Samuels JA also used the word "critical" to describe the kind of evidence to which a decision maker should refer. His Honour held that it would be an error of law for a judge to ignore evidence which was "critical to an issue in a case and contrary to an assertion of fact made by one party and accepted by the judge." 4. Finally, reasons need only meet a "minimum acceptable level". In Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 Basten JA held at [48] that: When an appellate court is invited to find that a trial judge provided inadequate reasons, it is important to understand the nature of the function being invoked. It is not the function of an appellate court to set standards as to the optimal, or even desirable, level of detail required to be revealed in reasons for judgment. Rather it is to determine whether the reasons provided have reached a minimum acceptable level to constitute a proper exercise of judicial power. Transparency in decision-making is an important value, but it is not cost free, and may involve separate parameters of quantity and quality. The ignored evidence 1. When making the finding that $13,055.35 was the reasonable cost incurred by the consumer in having the vehicle repaired, the Tribunal did not refer to the following evidence: 1. a quotation from Ringus Pty Limited dated 24 September 2015 for $2,829.75 to replace motor with second-hand motor and for 10 ½ hours labour at $45 an hour; 2. a quotation from All Star Mechanics dated 29 September 2015 for $3,553.00 to supply second-hand motor and for 13 ½ hours labour at $60 per hour; and 3. a quotation referred to by the consumer during the hearing before the Tribunal for $4,160.00 which was no longer available by the time the repairs were conducted but which the supplier submitted represented the cost of the repairs. 1. We will refer to this evidence as the "ignored evidence". Was the ignored evidence important or critical evidence? 1. The ignored evidence was not important or critical evidence nor was it "conflicting evidence of a significant nature". The question under cl 259(2)(b)(i) of the ACL was whether the costs incurred by the consumer in having the vehicle repaired were "reasonable costs". The ignored evidence was evidence as to the costs other repairers, who had not inspected the vehicle, would have charged had they repaired the vehicle. 2. The consumer's repairer, Mr Furness, provided a detailed quotation which included inspecting the vehicle to diagnose the problem, removing and replacing the heat exchanger and checking for leaks, removing the water from the engine and providing parts including a new radiator ($500), a timing chain set ($1,850) and a water pump ($172). The total amount of labour was 25 hours at $90.91 an hour. 3. The consumer told the Tribunal that the motor he bought was the only one available that suited the vehicle. 4. Mr Boutros, representing the supplier, referred to the "ignored evidence" during the hearing saying that he had two quotes. The presiding member asked him what he would say was a fair price for the work that was actually done, not for the work set out in the two quotes. Mr Boutros said that the quote for $3,553.00 was for the same work. That response is clearly incorrect as the work done by the consumer's repairer involved more than merely supplying and fitting a second hand motor. Mr Boutros did not ask the consumer, Mr Mangion, any questions about the reasonableness of the costs he had incurred. He did tell the presiding member later in the hearing that he could have repaired the vehicle at a lower cost and that Mr Mangion "got ripped off", presumably by the repairer, Mr Furness. 5. The ignored evidence was based on the assumption that all that was required was for a replacement engine to be fitted. The Tribunal accepted the consumer's evidence in relation to his attempts to source an engine and allowed $6,850.00. The consumer produced a receipt for that amount. The ability of other repairers at other times to source an engine for less than the consumer, is of some relevance to the question of whether the price the consumer paid was reasonable. But this is not critical evidence or conflicting evidence of a significant nature. The fact that a motor vehicle repairer could, at a particular point in time, find a replacement engine at a lower cost than the consumer could obtain, does not necessarily mean that the cost the consumer paid was unreasonable. 6. There was no reference in the transcript to the differences in the hourly rate between the various quotes. The fact that other repairers obtained quotes involving a lower hourly rate than Mr Furness charged, is not important or critical evidence nor was it "conflicting evidence of a significant nature". The consumer did not engage those repairers and it was never put to the consumer or to Mr Furness that the hourly rate was unreasonable. Making reasoning process clear - legal principles 1. When providing written reasons the Tribunal must set out "the reasoning processes that lead the Tribunal to the conclusions it made". NCAT Act, s 62(3)(c). As with the obligations under s 62(3)(a) to refer to relevant evidence when making findings of fact, the statutory duty in s 62(3)(c) is in addition to common law duties in relation to the standard of decision writing. 2. Section 62(3)(c) corresponds with the third element of a statement of reasons as described by Meagher JA in Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430, at 443: Thirdly, a judge should provide reasons for making the relevant findings of fact (and conclusions) and reasons in applying the law to the facts found. Those reasons or the process of reasoning should be understandable and preferably logical as well. 1. In Khan v Kang [2014] NSWCATAP 48 at [41] the Appeal Panel described what s 62(3)(c) requires: The reasoning processes referred to in s 62(3)(c) include the reasoning by which the law was applied to the facts as found to reach all intermediate and ultimate conclusions. It is important to bear in mind, however, that these reasoning processes also encompass the reasoning which led the Tribunal to reach its factual conclusions: why certain evidence was accepted and other evidence rejected; why a factual conclusion was reached; and similar matters.' Did the Tribunal make it reasoning process clear? 1. The Consumer and Commercial Division did not provide reasons for failing to refer to the ignored evidence. We have found that that evidence was not critical or significant. For those reasons the Tribunal was not obliged to provide reasons for rejecting it. Leave to appeal on grounds other than questions of law 1. Leave to appeal may be given in respect of decisions made in the Consumer and Commercial Division but only if the Appeal Panel is satisfied 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 evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). 1. Even if one or more of these grounds is established, the Appeal Panel still has discretion as to whether it will grant leave: Collins v Urban [2014] NSWCATAP 17 at [81]. 2. The supplier sought to adduce fresh evidence of the cost of repairs from Steve Jarvin Motors Pty Ltd dated 19 July 2016 for $7,982.96 for "engine assy". The supplier did not provide any evidence as to why this quote was not reasonably available at the time of the hearing before the Consumer and Commercial Division. We are not satisfied that it was not available at the time of the hearing. In addition, we are not satisfied that it is "significant evidence" or that the supplier may have suffered a substantial miscarriage of justice. Even if the supplier could have had the vehicle repaired for less money in Sydney, that does not necessarily mean that the price the consumer paid was unreasonable. Other matters 1. The supplier's solicitor raised several other matters including discrepancies in the odometer readings, the lack of any evidence that the consumer had paid the invoiced amounts and advice purportedly given by an employee of NSW Fair Trading that the consumer should not have refused to pay half the cost of transporting the vehicle to Sydney. Because these matters are not relevant to any ground of appeal, we have not addressed them in these reasons. 2. Neither party applied for costs. Orders 1. Leave is granted for the appellant to be represented by Stanford Law Firm. 2. Leave is granted for the respondent to be represented by Mr P Batley. 3. Leave is refused for the appeal to be made on grounds other than a question of law. 4. The appeal is dismissed. 5. The Principal Registrar is to pay to the respondent $13,055.35 being the amount paid to the Tribunal by the Appellant pursuant to an order made on 9 June 2016. ********** 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 Amendments 15 August 2016 - Addition of Order 5 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: 15 August 2016