VIC Seller Changed Car Engine - Getting Deposit Back?

[user201118]

So I made a deposit of $1000 for a car and on the very next day got to know that the seller has put a new engine which he was hiding intentionally. So in other words, when I gave him the deposit, it had the original engine number (on VicRoads) and next day it's been changed (on VicRoads) which is a breach of contract. Have evidence of how it got changed on VicRoads. It's a 10th anniversary mx5 and he was hiding it as if he were to disclose it, it would devalue the car.

I asked for my deposit back but the seller is refusing, saying I simply changed my mind and would not give the deposit back. I have talked to police and they said it's a civil matter and can't do anything for that (is it so? isn't this fraud as well?). Is there anything else that I could do? Is vcat my only option?

 

[Scruff]

Was the original engine in the car on the day that you paid the deposit? Did you physically check the engine number?

 

[user201118]

I'm not sure if the car had the original engine on the day I paid the deposit and I haven't physically checked the engine number. But said car is stock when I asked the seller. And also didn't accept that he changed the records on VicRoads. Do I stand a leg here? I guess it comes under misleading or deceptive behaviour in the common law?

 

[Scruff]

Okay, so there is conclusive evidence of when the engine number was changed with VicRoads, but there is no evidence of when it was physically changed or of the sellers' motives. So the first thing is to stick to facts and disregard any assumptions.

The facts are that the records were changed after the deposit was accepted and it was not disclosed at that time that the car was not "original". Claiming that the car is "stock" is a different thing. "Stock" simply means that the vehicle has not been modified in regard to "specifications". "Original" means that the vehicle still has all it's original major parts, in which case it would have a higher resale value. This is where you have a case.

Firstly, contact VicRoads and inform them that the seller claims that they did not change the records. (Let VicRoads worry about that side of things.)

In regard to the deposit, lodge an application immediately with VCAT. Your arguments are (assuming the car was advertised for sale in some way):

1. The seller acted deceptively* by not updating records with VicRoads prior to advertising the vehicle.
2. That the seller either knew or should have known, that the above actions would result in prospective buyers being misled upon verifying the vehicle details with VicRoads.
3. That the seller either knew or should have known that, given the vehicle is an "anniversary model" and therefore of particular interest to collectors and/or enthusiasts, that
   1. a change of engine devalues the vehicle, and
   2. in the circumstances, any reasonable person would conclude that there is an obligation on the seller to disclose that the vehicle is not "original" .
4. That the seller accepted a deposit in relation to a contract of sale under false pretences; specifically, that the vehicle did not contain the same engine as recorded with VicRoads at the time in question.

* If the seller is a business, then substitute the words "acted deceptively" with "engaged in misleading or deceptive conduct in breach of Section 18 of the Australian Consumer Law".

Note also, that although the ACL does not normally apply to private sales, a private seller is considered a business (and therefore the ACL does apply) if the sale occurs online and the seller:

• lists an Australian Business Number (ABN) or company name on their web page or profile, or;
• has a high volume of items for sale, or;
• has been trading for a number of years.

If any of these apply, then treat the seller as a business and make the substitution as stated above.

I recommend that you do a little research in case the matter proceeds to a hearing, in which case:

1. You will need to show evidence of when the deposit was paid and when the records were changed with VicRoads. (It appears you already have this.)
   
2. It would help to show some examples (advertisements) of vehicles advertised as "original" compared to the same models that are not advertised in such a way. If you can't find anything for the same make and model, then look for other makes or models that would be of interest to collectors/enthusiasts (special or limited editions, anniversary models, etc). Try to find models of a similar age to the vehicle in question. The purpose of this is to show that "original" vehicles have a higher resale value.
3. Everything else is pretty much self explanatory and can be argued verbally.

The orders to seek are:

1. For the contract of sale to be voided on the grounds that the seller knowingly did not enter into the contract in good faith.
2. For the deposit to be returned in full.
3. For the seller to reimburse any costs (if applicable).

Note that "costs" does not include the cost of filing the application, but does include costs related to obtaining legal advice, assistance to complete the application, vehicle inspections, obtaining records or information, etc. You will need to provide evidence of any costs claimed (receipts, invoices, etc).

Given the timing of when the records were changed with VicRoads, you shouldn't have any problem obtaining the orders.

Also, given the circumstances, there's a good a chance that the seller will concede and return the deposit as soon as they are notified of the hearing. If that happens, then as soon as you have your money back (and not before), make sure that you notify VCAT and withdraw your application.

 

[user201118]

Thanks so much Scruff and apologies for my late response.

On carsales.com he doesn't have other cars listed for selling but he is a wrecker and sells parts (mx-5 specific) on a regular basis on Gumtree: Gumtree Australia. Does this mean I could treat him as a business?

I have also attached some of the evidence that I have herewith so you can get a better idea of the whole scenario.

10ae-2562-new-engine
10ae-2562-original-engine

Checked my messages with him and found that he has even said the car has the original engine: Screenshot-20190117-201021

 

[Scruff]

This is all starting to look very different from what your first two posts imply.

1. We now find out that this guy is operating a "wrecking" business. That changes everything. Without providing a link to the original advertisement, it's impossible to tell if he has done anything wrong with the exception of the events surrounding the changing of records with VicRoads.

2. The vehicle's registration was cancelled on 29 Sep 2018 - 1 1/2 months before these events took place. You never indicated that either. It is unreasonable to expect that anyone here is going to think that a $1000 deposit relates to an unregistered vehicle being sold by a wrecker unless you inform them of those facts. My entire previous response was given on the understanding that this was a registered vehicle - but now most of that response is irrelevant.

3. You stated: "But said car is stock when I asked the seller." The screenshots show that you knew that the car had been previously "heavily modified" when you raised this question. You then asked the seller to explain why it is now in "stock condition (give or take)". That has nothing to do with the seller unless he advertised it as being modified, or as having never been modified. You question is totally irrelevant otherwise.

4. Was the car advertised as "wrecking" or "for parts", or as being "registered", or with an incorrect engine number, or as modified, or as never been modified, or as being all original? No indication of any of this. Again, post a link to the actual advert and let's see exactly how this car was described.

5. Screenshot Screenshot-20190117-201021 - Did he send the photo of the engine number on the block? What was the response to the question about being stock? You've shown us several of your questions, but only one of his responses.

6. The only legal issue I can now see here is the records being changed and that you say "And also didn't accept that he changed the records on VicRoads." Where is the screenshot of that? You've gone out of your way to show the other stuff, but not the most important things of all - the original advert and his denial of changing the records.

I'm sorry if this sounds harsh, but what has happened here now looks very different from what you led us to think.

The only issues that exists now as far as I can see are:
1. Did the advertisement contain false or misleading information and if so, did the seller know this?
2. Did the seller knowingly provide any false or misleading information during any correspondence (including verbally)?
3. Most importantly, did the seller change the records with VicRoads and then deny doing so?

As for everything else, such as an original vehicle having a higher resale value, that's all out the window. Resale value is not a legal issue here at all because of the circumstances. One can only now conclude that the vehicle needs work just to get it registered, unless there is a valid RWC that says otherwise - and you haven't indicated if that's the case either.

 

[user201118]

I'm sorry if I haven't been informative enough. I'll try to answer your questions here.

This is all starting to look very different from what your first two posts imply.

1. We now find out that this guy is operating a "wrecking" business. That changes everything. Without providing a link to the original advertisement, it's impossible to tell if he has done anything wrong with the exception of the events surrounding the changing of records with VicRoads.

Here is the carsalese advert: https://www.carsales.com.au/cars/details/Mazda-MX-5-1999/SSE-AD-5885579/?Cr=1

3. You stated: "But said car is stock when I asked the seller." The screenshots show that you knew that the car had been previously "heavily modified" when you raised this question. You then asked the seller to explain why it is now in "stock condition (give or take)". That has nothing to do with the seller unless he advertised it as being modified, or as having never been modified. You question is totally irrelevant otherwise.

Actually what happened was quite interesting. Here is the break down of events that took place.

- 1/11/2018: went to see the car
- 11/11/2018: went to see the car with a mechanic and paid the $1000 deposit.
- 12/11/2018 (morning): I also had asked about this car on an online forum and someone who knows the car said that car had been heavily modified in the past and might be having the non-original engine (I only got to know about this after paying the deposit or else I wouldn't have paid the deposit on 11/11 afternoon). That's when I asked the seller above question. I have attached screenshots of the full conversation.

5. Screenshot Screenshot-20190117-201021 - Did he send the photo of the engine number on the block? What was the response to the question about being stock? You've shown us several of your questions, but only one of his responses.

6. The only legal issue I can now see here is the records being changed and that you say "And also didn't accept that he changed the records on VicRoads." Where is the screenshot of that? You've gone out of your way to show the other stuff, but not the most important things of all - the original advert and his denial of changing the records.

Most importantly, did the seller change the records with VicRoads and then deny doing so?

He sent me the engine number on a text message. His reply to that question was "yes that I know of was of a old man". Sorry wasn't thinking that information are crucial, but I here are more screenshots of the conversation: photos. When I asked him over the phone how the engine numbers on the VicRoads system got changed, he was saying he doesn't know that maybe their systems playing up or something like that when it's very clear that he changed the records.

The only issues that exists now as far as I can see are:
1. Did the advertisement contain false or misleading information and if so, did the seller know this?
2. Did the seller knowingly provide any false or misleading information during any correspondence (including verbally)?

He has advertised it as "one of the cleanest", this and the price suggests that the car is original..? And also he clearly knew it's not the original engine, so the "Low 93 thousand km" as he's mentioned in the advert, doesn't make sense with an unknown engine.

Doesn't this comes under misleading and deceptive behavior. Please let me know.

 

[Scruff]

Okay, now we're getting somewhere. This is just my opinion, but I'll try to explain everything I'm thinking...

In the advert, the seller plays up the fact that the car is an anniversary model. At 20 years old, it has reletavely low kms at 93,000 and at that age, the price is quite high at $10,400. So when I look at that advert (and I know nothing about MX-5's), I get the impression that this car is in extremely good condition and probably all original. The price suggests to me that being an anniversary model, it has some extra value because of it's "status", however I don't believe it is worth anywhere near that price unless it is original. I could go anywhere right now and buy a car in as good a condition, half the age and several thousands under that price.

If you accept the seller's statements as being truthful, then he has no idea of when the engine was changed, who changed it, or just as importantly, why it was changed. So as far as the seller knows, the current engine could have done 300,000kms - and at 15,000kms per year, that's conservative. Therefore given the wording of the advert and particularly the odometer reading and price, the advert is misleading due to the omission of a material fact known to the seller.

The reason I say that, is that most people associate odometer readings with the "mechanical condition" of a vehicle over the "condition of the body". Since the engine has been changed, it is not known if the actual mechanical condition is now in any way consistent with what the odometer reading implies. The fact that the seller became aware of the engine change at least as early as 12 Nov '18 and that nearly 3 months later, the advert hasn't been updated with any disclosure, in my opinion, the advert is now intentionally misleading.

Given these particular circumstances, I believe that any reasonable person would expect that a major mechanical change to the vehicle should be disclosed, and by not doing that, the seller is in breach of the ACL because the advert is misleading by omission of a material fact known to the seller.

The problem is that I don't see anything that shows that the seller knew about the engine change prior to you bringing it up on 12 Nov '18 - and that was after the deposit was paid. So the way I see it, you either have to get a full history on the engine and hope it shows that the engine came from another vehicle owned or previously owned by the seller (possible, but from what I see about the comment on the forum, it implies that the previous owner changed the engine, not the seller), or concentrate on when the records were changed with VicRoads and whether or not the seller denied making that change.

As I see it, he doesn't "directly" deny it, but does do so "indirectly" - and more than once.

From the conversation on 12/11/2018 (some punctuation added for clarity):

1. 08:29AM - You: "Does the car have the original engine?"
2. 08:32AM - Seller: "Yes that I know of..."
3. 08:40AM - Seller: "I'll send it later as I'm out now."
4. 08:40AM to 12:07PM - (Assumption that seller provides engine number or picture.)
5. 12:07PM - You: "Do you know why this engine number is different from what is registered on VicRoads?"
6. 12:08PM - Seller: "I checked VicRoads, it's the same?" (Assumed to be refering to the engine number in the following screenshot being the same as the number on the engine block.) <== Denial #1.
7. 12:08PM - Seller posts screenshot from VicRoads showing the engine number as "BP395283" as at (time not shown).
8. 12:13PM - You post screenshot from VicRoads showing the engine number as "BP379793" as at 08:59AM.
9. 12:13PM - You: "That's what I get."
10. 12:14PM - Seller: "I just checked and that's what I got." (Assumed to be refering to screenshot posted at 12:08PM.) <== Denial #2.
11. 12:23PM - (Partial post by you mentioning PPSR. Did you get a report from them? If so, what does it show and what occurred in the conversation here?)
12. 12:24PM - You: "This is strange."
13. 12:25PM - Seller: "20 year old car mate, anything could be changed before I got it." <== Denial #3.
14. 12:26PM - Seller: "Could be changed under warranty and Mazda wouldn't even be able to tell you the warranty engine's number." <== Denial #4.

An additional screenshot from you shows VicRoads showing the engine number as "BP395283" as at 12:32PM.

The entire conversation began with a direct question to the seller about the origin of the engine. The times of individual statements, along with the times shown on the the screenshots, show that the engine number was changed with VicRoads between 08:39AM and 12:08PM.

The seller had every opportunity to explain this, but instead

1. at #6 above, dismissed any claim the records were changed by claiming that the records match the actual engine number (even though they didn't less than 3.5 hours earlier);
2. at #10, dismisses any knowledge of the change by not even acknowledging your screenshot at #8 (which is conclusive evidence of the change);
   
3. at #13 and #14, deflects the question altogether by changing the subject to the physical change of engine instead of the change of records.

Unless the vehicle is owned by someone else, it is not reasonable to accept that the seller has no knowledge of the records being changed. Then there's the timing of all of this, in that the records were changed within 3.5 hours of the seller being asked if the car had it's original engine. Put all of this together and in a civil jurisdiction, there is sufficient evidence to show that the seller is being deceptive.

I therefore believe that the seller has breached s18(1) of the ACL and for the specifics, I would be looking at s29(1)(a) in relation to the history of the vehicle; and s29(1)(b) in relation to the condition, in that it is known that the odometer reading does not match the mechanics of the car, specifically, at least the engine.

Max penalties for breaching s18 of the ACL are $500,000 for individuals, or $10,000,000 for businesses (and all indications are that he is running a business for the purpose of the ACL).

I think you have every right to pull out of the sale and demand that the deposit be repaid. I would start with the following arguments:

1. the wording of the advertisement "implies" that the vehicle is original, especially but not limited to the low kms (93,000) and above average price ($10,400) for a 20 year old vehicle;
2. the engine was proven as not being original after the deposit was paid and accepted;
3. the records with VicRoads were changed after the vehicle was advertised; after the seller was asked about the engine; and after the deposit was paid and accepted;
4. the seller's statements during the converstaion on 12 Nov 2018 show that he indirectly denies changing the records with VicRoads;
5. it is not reasonable to accept that anyone other than the seller changed the records with VicRoads or that the seller has no knowledge of the records being changed;
6. the seller's experience in selling vehicles, whether roadworthy or for wrecking, shows that he either was or should have been, well aware that VicRoads' records are regularly accessed by potential buyers for the purpose of verifying vehicle details, including engine numbers;
7. due to the seller's experience, he had an obligation or at the very least, a duty of care to ensure that VicRoads' records were up to date and accutate before the vehicle was advertised and failed to do so;
   
8. the seller has acted deceptively by denying that he changed the records with VicRoads when directly asked about this on 12 Nov 2018.

Even though you had a mechanic inspect the vehicle and he didn't check the engine number either, that does not mitigate the seller's obligations with respect to the VicRoads records and ensuring that those records are correct. I don't know for sure, but this may actually be a legal requirement.

A few personal observations:

1. "Interesting vanity plates" usually equals "trouble". I would never touch a car that has had vanity plates on it - especially something like "BOOZT". They usually say a lot about the previous owner and/or driver and how the car has been treated. That alone could explain the engine change.

2. I don't think I've ever seen a car sold with vanity plates attached - probably because of the ridiculous unwanted costs to the buyer. But back in November, the screenshots all show a cancelled registration, yet the vanity plates were still assigned to that car. Given that at that time the car had obviously already been advertised, it makes me think that either the seller knows the previous owner very well, because the plates hadn't been transfered or stored, or that the seller had owned the car himself for quite some time and the plates were his own. Just a suspicion, but either way, I think the seller knows exactly what the full story is regarding the original engine.