Collyer v Grays (NSW) Pty Ltd [2022] QCATA 80

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Collyer v Grays (NSW) Pty Ltd [2022] QCATA 80 PARTIES: CHARLES WILLIAM COLLYER (applicant/appellant) v GRAYS (NSW) PTY LTD (respondent) APPLICATION NO/S: APL150-21 ORIGINATING APPLICATION NO/S: MVL198-20 MATTER TYPE: Appeals DELIVERED ON: 15 June 2022 HEARD AT: Brisbane DECISION OF: A/Senior Member Traves ORDERS: The appeal is allowed. The respondent must pay the appellant the sum of $9,900 within 21 days of the date of this order. There is no order as to costs. CATCHWORDS: APPEAL – TRADE AND COMMERCE - COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – GUARANTEES, CONDITIONS AND WARRANTIES IN CONSUMER TRANSACTIONS – where the appellant bought a vehicle from the respondent by auction – where online description of motor vehicle that engine ‘turned over’ – where engine seized – whether s 18 of the Australian Consumer Law applies – whether error of law - whether misleading and deceptive conduct Agents Financial Administration Act 2014 (Qld), s 82, s 119 Australian Consumer Law (Qld), s 18, s 236 Competition and Consumer Act 2010 (Cth), Schedule 2 Fair Trading Act 1989 (Qld), s 50, s 50A Motor Dealers and Chattels Auctioneers Act 2014 (Qld), s 13, s 130, s 193, s 194, s 216, Schedule 1: s 14, s 15. Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 142, s 146, s 147 ACCC v Valve Corp (No 3) [2016] FCA 196 Argy v Blunts [1990] FCA 57 -- 1 of 10 -- 2 Khattab v Grays (Vic) Pty Ltd [2017] VCAT 135 Mindemir v Manheim Pty Ltd [2017] VCAT 612 Knox v Tait Motors Pty Ltd t/as Tait Auto Group [2021] QCATA 87 APPEARANCES & REPRESENTATION: This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) REASONS FOR DECISION [1] The applicant, Mr Collyer bought a 2010 Land Rover at auction which he said he would not have purchased had he known the engine did not turn over. The auctioneer was Grays (NSW) Pty Ltd trading as Graysonline (Grays). Mr Collyer commenced proceedings in the Tribunal seeking the amount of $9,900.00. This was the amount quoted by Automotive Skills for a replacement engine. [2] The Tribunal dismissed Mr Collyer’s application.1 Mr Collyer appeals the decision.2 The grounds of appeal [3] Mr Collyer relies upon the following grounds of appeal, which we have summarised as follows: 1. Ground 1 – the Tribunal erred in finding that Grays did not have a “beneficial interest” in the motor vehicle; 2. Ground 2 – the Tribunal erred in finding that the Motor Dealers and Chattels Auctioneers Act 2014 (Qld) (Motor Dealers Act) did not apply, in particular s 216. The tribunal erred in finding the description provided by Grays was not misleading; 3. Ground 3 – the Tribunal erred in finding this was a sale by auction within the meaning of s 13 of the Motor Dealers Act; 4. Ground 4 – the Tribunal erred in not finding that Grays breached either the Motor Dealers Act or the Australian Consumer Law (ACL) in relation to the description of the motor vehicle. The hearing below [4] To better understand the grounds of appeal it is necessary to briefly set out the background to the dispute and the findings made by the tribunal at first instance. [5] Mr Collyer purchased a 2010 Range Rover Sport 3.0 TDV6 Turbo Diesel from Grays on 26 July 2020 for $11,351.63. Mr Collyer said that the vehicle was delivered in the week of 17 August 2020 with a seized engine which needed replacement. [6] Mr Collyer relied on the online description of the vehicle prior to sale, which provided, relevantly: 1 Tribunal Decision dated 6 May 2021. 2 Application for leave to appeal or appeal filed on 3 June 2021. -- 2 of 10 -- 3 Description 2010 Land Rover Range Rover Sport 3.0 TDV6 Turbo Diesel Automatic Wagon … • Indicated Odometer Reading: 0 … General condition for age and kilometres … • Owners Manual: No • Service History: No • Engine Turns Over: Yes. The below condition assessment is the opinion of our booking staff which may differ from your own opinion: … • Interior: Various scratches and marks • Exterior: Various dents and scratches, inspection advise (sic) • Engine & Mechanical: Engine not starting not able to check faults, no odometer reading coming. … Sale is on As is Where is basis. No statutory Warranty/Cooling off periods apply. Vehicle inspection is based on walk-around and start-up only and is the opinion of the Booking-In Officer. Sale description is a guide only as vehicle may have unsighted damage/issues. Full inspection is recommended. [7] The sale was also subject to GraysOnline Terms and Conditions which were available on the Graysonline website. By confirming a bid, the purchaser was deemed to have accepted the conditions. [8] Relevantly, the Terms and Conditions, in clause 3.2, state: a. We do not test Motor Vehicles to check their condition. Any general description we provide of a Motor Vehicle’s condition is based, at most, on an external walk-around of the Motor Vehicle, our visual inspection, and engine start up. We generally do not drive Motor Vehicles; b. Motor vehicles may have damage, mechanical issues and body blemishes which we have not sighted and which we have not listed in any lot description provided. c. We recommend that a potential bidder conduct (either themselves or through a third party) a full inspection of the Motor Vehicle before bidding; … [9] When Mr Collyer took delivery of the motor vehicle the engine was seized and could not be turned over. The motor vehicle was taken to a mechanic who quoted $9,900 for a replacement engine. Mr Collyer commenced proceedings in the Tribunal -- 3 of 10 -- 4 claiming this amount. The hearing took place on 6 May 2021 at which time the Tribunal dismissed Mr Collyer’s application. [10] The Tribunal found: 1. The motor vehicle was sold at auction by Grays, a registered auctioneer; 2. The auction was subject to terms and conditions which included 3.2 (set out above); 3. The reference in clause 3.2(a) to “engine start up” was not a guarantee that the engine could be started; 4. Further, even if there was some misunderstanding as to whether “engine start up” meant the engine could be started up, it did not amount to a guarantee and could not be relied upon as against an auctioneer; 5. The Motor Dealers Act did not apply because the auctioneer was not the beneficial owner of the motor vehicle; 6. The ACL did not apply for the following reasons: (a) the auctioneer, being neither a beneficial owner or registered owner of the motor vehicle, could not be a ‘supplier; and (b) the implied guarantees do not apply to a sale by auction. Appeals – the statutory framework [11] An appeal to the Appeal Tribunal on a question of law is as of right.3 An appeal on a question of fact or mixed law and fact requires the leave of the Appeal Tribunal.4 The appeal is by way of rehearing. The nature of the re-hearing has been discussed in a number of cases.5 [12] The relevant principles to be applied in determining whether to grant leave to appeal are: is there a reasonably arguable case of error in the primary decision?;6 is there a reasonable prospect that the applicant will obtain substantive relief?;7 is leave necessary to correct a substantial injustice to the applicant caused by some error?;8 is there a question of general importance upon which further argument, and a decision of the appellate court or tribunal, would be to the public advantage?9 Consideration [13] I turn to consider each of the grounds of appeal. Ground One 3 Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’), s 142(1). 4 QCAT Act, s 142(3)(b). 5 Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424 ; [2001] FCA 1833 at 434– 435, [20], Sidhu v Holmes [2000] FCA 1653; Zhang v Minister for Immigration & Multicultural & indigenous Affairs [2005] FCAFC 30. 6 QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41. 7 Cachia v Grech [2009] NSWCA 232. 8 Rintoul v State of Queensland & Ors [2018] QCA 20. 9 Glenwood Properties Pty Ltd v Delmoss Pty Ltd [1986] 2 Qd R 388, 389; McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd [1989] 2 Qd R 577, 578, 580. -- 4 of 10 -- 5 [14] Mr Collyer submits that, in effect, because Grays were paid a “buyers premium” (of $743.63) it had a beneficial interest in the motor vehicle. Mr Collyer says that the Motor Dealers Act does not specify at what level the buyer’s premium becomes a beneficial interest. Mr Collyer states that “clearly, if Graysonline charged the buyer a premium of 100% [of the sale price] they would have a beneficial interest in the vehicle”. [15] Grays submit that it does not have a beneficial interest in the vehicle and that the vehicle is owned by the vendor, not them. The buyer’s premium was charged in accordance with s 130 of the Motor Dealers Act and accepting such a premium does not mean it acts for the buyer. [16] Mr Collyer has not demonstrated any error by the Tribunal in finding Grays not to have a beneficial interest in the motor vehicle. The nature of the buyer’s premium is a fee for service charge. Charging such a premium, even when calculated as a percentage of the sale price, does not confer a beneficial interest in the vehicle on the auctioneer. [17] There is no merit in this ground. Ground Two and Four [18] I will consider grounds two and four together. [19] Mr Collyer submits that he did not, in the hearing at first instance, seek to rely on the guarantee provisions of the ACL but rather on the basis he had been given misleading information under s 216(1) of the Motor Dealers Act. Mr Collyer submits that this provision “does not differentiate between licensed auctioneers or vehicle dealers”. [20] Grays accept that s 216 of the Motor Dealers Act does apply to it. However, Grays submit that at the time of ‘booking in’ the engine did turn over but would not start.10 Grays refers to its online listing of the vehicle which provides that the engine does turn over but which also states elsewhere “Engine & Mechanical: Engine not starting”. Further, Grays submits that it is not reasonable for the representations made by Grays pre-sale to be relied upon in isolation. Grays refers to s 216(2) and submits that Mr Collyer understood and accepted that the sale of the motor vehicle was “as is” and that the description was a ‘guide only’. [21] Mr Collyer, by ground four, submits that his submissions relating to s 18 of the ACL were, in effect, ignored. Mr Collyer says that the learned Adjudicator focussed on the consumer guarantees under the ACL and failed to consider whether the online description of the motor vehicle was misleading. [22] Mr Collyer refers to both s 216 of the Motor Dealers Act and s 18 of the ACL in his originating application. He also made the following reference to misleading conduct in the hearing: Adjudicator: So even if I could construe it as a guarantee, which I don’t think I can, I can’t apply that to an auction. Mr Collyer: I understand that fully. My point is that the information they provided in print and in writing after the event demonstrates that they should 10 Responses to Applicant’s Submissions at [2](b). -- 5 of 10 -- 6 not have claimed that the engine turned over and that my purchase of the vehicle was entirely based on that fact. Adjudicator: Well, I don’t know that it can take it simply by – to say simply because the engine – even if I went along with the assertion that the engine was turned over or could be turned over – and I’ve got no evidence that it was turned over, but even if I construe it in that manner and somehow get it within the parameter of being some sort of guarantee as to the function of the motor, in other words, it was able to be function, it was able to be started and turn over, even if I could construe it then as some sort of a guarantee, it doesn’t apply to an auction. Mr Collyer: I understand that the guarantee doesn’t apply to an auction. I’m relying on the fact that the information provided was misleading. …. Adjudicator: Well the ACL simply doesn’t apply. Its an auction. So it doesn’t matter about misleading and deceptive conduct. In terms of the Act, it simply doesn’t apply. The Act doesn’t apply. It’s an auction.11 [23] Section 50A of the Fair Trading Act 1989 (Qld) gives the Tribunal power to make an order in s 50A(2) for an action: (a) under a provision of the ACL(Qld) listed in the table in s 50A; (b) relating to a motor vehicle; and (c) seeking an amount or value of other relief of not more than $100,000. [24] The Table includes an action for damages under s 236(1).12 An action for damages under s236 may arise where a person has suffered loss or damage because of the conduct of another person and that person contravened a provision of Chapter 2 or 3. Section 18 of the ACL is in chapter 2. [25] Accordingly, the Tribunal has jurisdiction to consider whether there has been a contravention of s 18 of the ACL in relation to a motor vehicle, provided the applicant does not seek more than $100,000 in damages. [26] The learned Adjudicator said that the ACL did not apply because the sale was by auction. It appears that the Adjudicator proceeded on the basis of a misapprehension that, bar guarantees relating to title, the ACL had no application to sales by auction. [27] This is an error of law. Section 18 of the ACL can apply to the sale of goods by auction.13 The error meant the Adjudicator did not consider whether Grays, in the context of its online description of the motor vehicle, was guilty of misleading and deceptive conduct. [28] The Appeal Tribunal in Knox v Tait Motors Pty Ltd,14 in considering s 18 of the ACL, observed: 11 T1-7. 12 Fair Trading Act 1989 (Qld), s 50, s 50A. 13 ACL(Qld), s 18; Khattab v Grays (Vic) Pty Ltd [2017] VCAT 135; Mindemir v Manheim Pty Ltd [2017] VCAT 612. 14 [2021] QCATA 87 at [38]. -- 6 of 10 -- 7 The question whether conduct is misleading or deceptive, or likely to mislead or deceive, is an objective question of fact. The relevant test is whether the impugned conduct, viewed as whole, has a sufficient tendency to lead a person exposed to the conduct into error, that is, to form an erroneous assumption or conclusion about some fact or matter. It is not necessary to prove an intention to mislead or deceive, nor is it necessary to prove that the impugned conduct in fact misled or deceived anyone. [29] In this matter, the alleged misleading conduct arose from the fact that Gray’s description of the vehicle on its website stated the engine turned over, when, on Mr Collyer’s evidence, it was seized and could not be “turned over”. [30] The learned Adjudicator needed to address as a fact whether, on the evidence and in the circumstances, the description of the vehicle was misleading. It could only be so if the description reasonably conveyed to Mr Collyer that he was buying a vehicle with an engine that “turned over” when it did not. [31] I find that the relevant statement in the online description of the motor vehicle was positive affirmation that the engine turned over. [32] I accept the evidence of Mr Collyer at first instance that the vehicle was delivered with an engine that did not turn over.15 Mr Collyer said at the hearing at first instance: They’re imagining that it was started, but it was never started. It couldn’t have been started. It was delivered with me absolutely rock solid. I could not move the – turn the engine in any direction with a huge spanner. That’s how it arrived on my doorstop.16 [33] In these circumstances I find the description to be misleading. The correct description was one that indicated the engine did not turn over. I do not accept that the fact the vehicle was sold “as is” detracts from this. Ultimately the question is one of overall assessment of the advertising/description. In my view, the overall assessment of the description is that the engine turned over but that the motor vehicle, otherwise, was sold as is. The same would apply, in my view, to any other positive statements regarding specific attributes or features of the motor vehicle. The “as is” qualification did not, in other words, erase the positive misleading statement.17 [34] Blue Star submit that Mr Collyer had considerable experience in automotive sales and would have known to inspect and assess the vehicle. Mr Collyer says in response that the inspection conditions imposed by Grays would have only allowed him to try to start the car, but not to drive it or to use any electronic test equipment. Mr Collyer says that, as the car would not start, the inspection would have revealed nothing. Mr Collyer submitted that, in these circumstances, the description about the engine and its ability to turn over was critical. [35] In these circumstances I do not accept that this is a case where Mr Collyer was so negligent in protecting his own interests that there should be a finding of fact that the representation was not an inducement to entering the sale contract.18 In other words, that his negligence severed the causation between misrepresentation and damage. As 15 Email from Mr Collyer to Grays on 24 August 2020. 16 T1-10. 17 ACCC v Valve Corp (No 3) [2016] FCA 196. 18 Argy v Blunts [1990] FCA 57. -- 7 of 10 -- 8 indicated above, even if Mr Collyer had undertaken an inspection, it would not have revealed the representation to be false. [36] I also accept that Mr Collyer would not have purchased the motor vehicle had he known the engine did not turn over. Mr Collyer gave evidence in the hearing below as follows: It boils down to the simple fact that if they had said in their description the engine does not turn over, I would not have purchased the vehicle. I was well aware of what a new engine would cost. … If I had known the engine was seized, I would not have purchased the car. And there was no way that I could determine, apart from their description, that the engine was seized.19 [37] In the alternative, Mr Collyer relied on s 216 of the Motor Dealers Act. Section 216 provides: 216 False representations about goods (1) A licensee or motor salesperson must not represent in any way to someone else anything that is false or misleading about the sale or auction of goods. Maximum penalty—540 penalty units. (2) Without limiting subsection (1), a representation is taken, for the subsection, to be false or misleading if it would reasonably tend to lead to a belief in the existence of a state of affairs that does not in fact exist, whether or not the representation indicates that state of affairs does exist. (3) Also, if a person makes a representation about a matter and the person does not have reasonable grounds for making the representation, the representation is taken to be misleading. (4) The onus of establishing that the person had reasonable grounds for making the representation is on the person. (5) It is not a defence in a proceeding for a contravention of subsection (1) for the defendant to prove that an agreement with the person was terminated or that the person did not enter into an agreement because of the representation. (6) This section does not limit another Act or law about false or misleading representations. Note— See, for example, the Australian Consumer Law, section 29. (7) In this section— false or misleading, in relation to a representation, includes the wilful concealment of a material fact in the representation. Note— 19 T1-9. -- 8 of 10 -- 9 A person may make a claim, under the Administration Act, against the fund if the person suffers financial loss because of a contravention of this section. [38] The Tribunal’s jurisdiction under the Motor Dealers Act includes deciding disciplinary matters involving a licensee or motor salesperson,20 reviewing decisions of the chief executive relating to licensing and registration21 and the making of orders under s 15 relating to a warrantor’s failure to repair.22 [39] Contravention of s 216 renders the licensee or motor salesperson liable to pay a penalty. There is no provision in the Motor Dealers Act which entitles an individual to recover damages directly from a person who contravenes s 216. [40] A person who suffers financial loss because of a contravention of s 216 is entitled to make a claim under the Agents Financial Administration Act 2014 (Qld) (AFA Act) against the claim fund if the person suffers financial loss because of the contravention.23 The Tribunal must make a reimbursement order, requiring the person liable for the loss to reimburse the fund if satisfied s 119(2) of the AFA Act applies.24 A contravention of s 216 is also a ground for starting a disciplinary proceeding against a licensee or motor salesperson.25 [41] It is a question of construction as to whether, in addition to the rights against the claim fund, the Motor Dealers Act confers a private cause of action on an individual in tort to recover damages for breach of s 216. In my view, the right is not inferred in the Motor Dealers Act when construed as a whole, in particular in circumstances where: there is no express statement that such a right is conferred; s 216 provides a remedy of a criminal penalty for contravention;26 contravention may form the basis for taking disciplinary action;27 and there is a right to recover financial loss caused as a result of any contravention under the AFA Act.28 Accordingly, I find there was no appealable error in relation to the learned Member’s omission to consider s 216 of the Motor Dealers Act. [42] However, as discussed above, I find that the Member erred in dismissing argument based on s 18 of the ACL on the ground the sale was by auction. There is a right to appeal for an error of law. In re-hearing the matter relating to this ground, I find, for the reasons above, that a breach of s 18 of the ACL is established. Accordingly, on this basis I would allow the appeal. [43] For completeness, I will consider ground three. Ground Three 20 Motor Dealers Act, s 193(a). 21 Motor Dealers Act, s 193(b). 22 Motor Dealers Act, Schedule 1, s 14. 23 Agents Financial Administration Act 2014 (Qld), s 82(1)(d). 24 AFA Act, s 119; The Chief Executive, Office of Fair Trading, Department of Justice and Attorney- General v Abla [2020] QCAT 28. 25 Motor Dealers Act, s 194(1)(b)(i). 26 Sovar v Henry Lane Pty Ltd (1967) 116 CLR 397 at 405-6. 27 Motor Dealers Act, s 194(1)(b)(i). 28 Cutler v Wandsworth Stadium Ltd [1949] AC 398. -- 9 of 10 -- 10 [44] Mr Collyer submitted that the tribunal erred in finding this was a sale by auction within the meaning of s 13 of the Motor Dealers Act. Section 13 provides: 13 MEANING OF SALE BY AUCTION (1) Generally, a "sale by auction" of a used motor vehicle or other goods under this Act means the sale of the vehicle or goods in any way commonly known and understood to be by auction. (2) However, the sale of a used motor vehicle or other goods by auction is not a sale by auction under this Act if— (a) the person selling the vehicle or goods by auction (the "seller") owns the vehicle or goods and is not selling the vehicle or goods for someone else; and (b) the auction is conducted, whether by the seller or another entity, wholly by 1 or more electronic communications. [45] As the disposition of Mr Collyer’s appeal has not, in the end, been based on the Motor Dealers Act, the definition in s 13 is not relevant. That said, it would, in any event, have applied to Grays. Grays did not own the vehicle and was selling for someone else. As Grays did not satisfy the first limb of the definition, the sale transaction was not excluded from being a “sale by auction” by the application of s 13(2). In other words, s 13(2) did not apply. [46] This ground has no merit. Conclusion [47] In view of my finding that s 18 of the ACL applied and was breached, leave to appeal is not required. In terms of appropriate damages, Mr Collyer has sought $9,900 being the cost of a new engine, not including labour costs. Ordinarily, Mr Collyer would have been entitled to be put in the position he would have been in, but for the misleading and deceptive conduct. On Mr Collyer’s evidence he would not have proceeded with the purchase. It was arguable therefore, that Mr Collyer would have been entitled to recover the price he paid for the vehicle. However, Mr Collyer has instead sought damages in the sum of $9,900. I am satisfied, given the price paid for the vehicle but also the fact that he retained a vehicle without an operating engine, that such sum is appropriate by way of damages. [48] Accordingly, I make the following orders: 1. The appeal is allowed. 2. The respondent must pay the appellant the sum of $9,900 within 21 days of the date of this order. 3. There is no order as to costs. -- 10 of 10 --