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- Unreported Judgment
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Knox v Tait Motors Pty Ltd trading as Tait Auto Group  QCAT 195
kenneth william knox
tait motors pty ltd trading as tait auto group
Motor vehicle matters
4 June 2020
1 June 2020
The Application – Motor Vehicle Dispute filed on 9 September 2019 is dismissed.
TRADE AND COMMERCE – COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – GUARANTEES, CONDITIONS AND WARRANTIES IN CONSUMER TRANSACTIONS – GUARANTEES, CONDITIONS AND WARRANTIES – whether motor vehicle of acceptable quality – whether failure to comply with consumer guarantee a major failure – whether consumer entitled to refund
Australian Consumer Law, s 18, s 54, s 236, s 259, s 260, s 262, s 263
Competition and Consumer Act 2010 (Cth), Schedule 2
Fair Trading Act 1989 (Qld), s 50A
ACH Computing Pty Ltd v Austral Pty Ltd trading as Brisbane City Jaguar Land Rover  QCAT 176
Haisman v Drive (Aust) Pty Ltd  QCAT 44
Medtel Pty Ltd v Courtney (2003) 130 FCR 182
REASONS FOR DECISION
- On 9 September 2019, Kenneth Knox (‘the applicant’) filed an Application – Motor Vehicle Dispute with the Tribunal. The respondent is Tait Motors Pty Ltd trading as Tait Auto Group (‘the respondent’).
- The applicant is the owner of a 2015 Holden Colorado (‘the motor vehicle’).
- The applicant purchased the motor vehicle from the respondent on 24 December 2015 for $39,251.86.
- The applicant seeks relief under the Australian Consumer Law, which is Schedule 2 to the Competition and Consumer Act 2010 (Cth). Section 50A of the Fair Trading Act 1989 (Qld) vests the Tribunal with jurisdiction in relation to motor vehicles in respect of certain actions under the Australian Consumer Law.
- The relief sought by the applicant is a refund.
Australian Consumer Law provisions
Misleading or deceptive conduct
- Section 18(1) of the Australian Consumer Law provides that:
A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
- Section 54(1) of the Australian Consumer Law provides that, where a person supplies goods in trade or commerce, the goods are guaranteed to be of ‘acceptable quality’.
- The time at which goods are to be of acceptable quality is the time at which the goods are supplied to the consumer: Medtel Pty Ltd v Courtney (2003) 130 FCR 182 at  and . However, information available after the time of supply may be taken into account in deciding whether the goods were of acceptable quality at the time of supply.
- Sections 54(2) and (3) of the Australian Consumer Law define acceptable quality as follows:
- (2)Goods are of acceptable quality if they are as:
(a) fit for all the purposes for which goods of that kind are commonly supplied; and
(b) acceptable in appearance and finish; and
(c) free from defects; and
(d) safe; and
as a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods), would regard as acceptable having regard to the matters in subsection (3).
- (3)The matters for the purposes of subsection(2) are:
(a) the nature of the goods; and
(b) the price of the goods (if relevant); and
(c) any statements made about the goods on any packaging or label on the goods; and
(d) any representation made about the goods by the supplier or manufacturer of the goods; and
(e) any other relevant circumstances relating to the supply of the goods.
- It is not in dispute that the applicant took possession of the motor vehicle on 24 December 2015.
- The applicant provided Tribunal with the following documents:
- (a)a service bulletin issued by Holden dated 17 July 2014, relating to possible cylinder bore damage, scoring or out of round as the possible cause of engine oil consumption;
- (b)a letter from Holden to all dealers dated 4 December 2015, relating to a small number of Colorado engines with excessive cylinder bore roughness, allowing excess oil to pass by piston rings and be consumed. The letter states that “[t]o date these cases have been confined to model year 2014 vehicles”;
- (c)a service bulletin dated July 2016, relating to a dipstick design change causing the perception of greater oil consumption than is actually the case; and
- (d)a service bulletin dated September 2017, relating to a high oil consumption rate on Colorados produced between 2014 and 2016.
- The contract for the purchase of the applicant’s motor vehicle indicates that the motor vehicle was manufactured in March 2015, with a compliance plate in April 2015. The date of manufacture was confirmed in oral evidence by Peter Maclean, in the course of cross-examination by the applicant.
- There is no evidence before me that, at the time the applicant purchased the motor vehicle in December 2015, the respondent had been advised by Holden that there were problems with excessive oil consumption with Colorados manufactured in 2015.
- The applicant stated in the application that he first notified the dealer of a suspected problem with oil consumption on 4 April 2017. It is not in dispute that oil consumption tests were conducted on the applicant’s motor vehicle between 34,887 kms and 38,717 kms, and 45,576 and 48,475 kms. The first test returned a result within design intent, and the second test returned a result outside design intent.
- Holden agreed to replace the engine on the applicant’s motor vehicle. The respondent’s evidence was:
Even though the fault is small, replacing the engine is the most convenient repair for the customer and is easily completed within two or three days. The alternative would be to remove the engine to have the cylinder bore re-machined, new pistons fitted and the engine reinstalled which could take one to two weeks to complete.
All replacement engines have revised cylinder bore machining that has been in place since November 2015. Mr Knox’s Colorado is fitted with one of these engines.
- The engine replacement was carried out by Kensell Holden. There is some dispute as to how long the replacement took. The applicant stated in submissions that Kensell Holden had the car 10 days. The applicant did not file a written statement of evidence, and he was not cross-examined by the respondent. The applicant’s evidence consists of a large bundle of documents including a service tax invoice and repair order from Kensell Holden. The repair order includes the following dates:
- (a)“Expected Date/Time In: 29/11/2017 08:00”; and
- (b)“Required Date/Time 22/11/2017 17:00”.
- The applicant’s evidence also included a docket from Tamworth Car Carrying Pty Ltd dated 28 November 2017, which indicated that the car was to be returned to the applicant on 30 November 2017.
- The respondent stated in submissions that Kensell Holden had the car for three business days. As noted above, the respondent had provided evidence that an engine replacement can be completed within two or three days.
- As noted above, the applicant’s and the respondent’s statements as to the length of time the engine replacement took were made during submissions. The documentation from Kensell Holden is ambiguous and it is difficult for me to make any reliable findings. Giving the applicant the every benefit of the doubt, I am prepared to find that the motor vehicle was delivered to Kensell Holden on 22 November 2017, being the earliest date mentioned in the documentation, and returned to the applicant on 30 November 2017. This is a total of nine days (inclusive).
- I accept that the cause of the motor vehicle’s excessive engine oil consumption was excessive cylinder bore roughness, having regard to service bulletins and letters issued by Holden. I accept that this defect was present at the time the applicant took possession of the motor vehicle, and that the vehicle was not of acceptable quality at that time.
- I note that the documentation from Kensell Holden indicates that several other repairs were completed on the motor vehicle during the period the engine was replaced. This included replacing a flywheel and gear box selector, and carrying out repairs on the air conditioner. I have no expert evidence as to the cause of these defects. In these circumstances, I am unable to be satisfied that they resulted from the vehicle not being of acceptable quality at the time the applicant took possession of the motor vehicle.
- The applicant claims that the replacement engine is still consuming excessive amounts of oil. The only evidence filed in support of this claim is a statement of Stewart Lette. Mr Lette stated:
I am a consumer advocate and have spent the last 4 years advocating for better consumer rights. I have worked with the ACCC in relation to Ford Australia and other manufacturers. I have been involved with the Queensland attorney General in the push for changes to the Australian consumer Laws and provded (sic) key evidence into the parliamentary committee. I have assisted many consumers receiving resolutions from Dealerships as well as Manufacturers.
Ken’s Colorado is on the second engine after the original motor was replaced due to excessive oil consumption. Ken endure (sic) several oil consumption tests which turned out to be considered excessive by Holden and they approved a replacement motor. The results of the oil consumption tests were never made available to Ken and Holden’s answer was they are irrelevant.
Holden has asked for the new motor to be tested, considering the circumstances I do not see why Ken has to endure 8 months or longer of further testing without the Guarantee of a resolution of Ken’s choice.
Ken transported the vehicle to Brisbane and it was driven by myself for over a month. In the time I have the vehicle it had used 1 Litre of oil in 2129 Klms which is well outside the recommended usage.
I also noticed the vehicle is blowing blue smoke out of the exhaust which is consistent with burning oil.
- Mr Lette’s statement does not disclose that he has any relevant mechanical qualifications or experience. It also does not disclose the methodology he used in conducting the test. In these circumstances, and in the absence of expert evidence, I am unable to be satisfied that the replacement engine is consuming excessive oil. I accept the respondent’s evidence is that the replacement engine has revised cylinder bore machining.
- For completeness, I note that the applicant has raised a number of other complaints about the vehicle, including with the differential. I have no expert evidence as to the cause of these defects. In these circumstances, I am unable to be satisfied that they resulted from the vehicle not being of acceptable quality at the time the applicant took possession of the motor vehicle.
- The remedy available to the consumer against the supplier depends in the first instance on whether the failure is a ‘major failure’. That term is defined in s 260 of the Australian Consumer Law to relevantly mean:
- (a)the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or
- (b)the goods depart in one or more significant respects:
- (i)if they were supplied by description—from that description; or
- (ii)if they were supplied by reference to a sample or demonstration model—from that sample or demonstration model; or
- (c)the goods are substantially unfit for a purpose for which goods of the same kind are commonly supplied and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or
- (d)the goods are unfit for a disclosed purpose that was made known to:
- (i)the supplier of the goods; or
- (ii)a person by whom any prior negotiations or arrangements in relation to the acquisition of the goods were conducted or made;
and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or
- (e)the goods are not of acceptable quality because they are unsafe.
- The dividing line between what is or is not a major failure is not always a clear one. In Haisman v Drive (Aust) Pty Ltd  QCAT 44, I found that defects which resulted in a motor vehicle being off the road for 30 days shortly after purchase amounted to a major defect. Similarly, in ACH Computing Pty Ltd v Austral Pty Ltd trading as Brisbane City Jaguar Land Rover  QCAT 176, I found that defects which resulted in a motor vehicle being off the road for 29 days shortly after purchase amounted to a major failure.
- By contrast, in the present case, the applicant’s motor vehicle was off the road for at most nine days while it underwent an engine replacement. This occurred almost two years after the applicant took possession of the motor vehicle, and after the vehicle had driven over 48,000 kms. The respondent provided evidence that an engine replacement is the most convenient repair for the consumer, even though the fault itself was small. On balance, I am not satisfied that there is a major failure for the purposes of the test contained in s 260.
- In the case of a failure which is not a major failure, the remedies available to the applicant are set out in s 259(2) of the Australian Consumer Law as follows:
- (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.
- As noted above, two oil consumption tests were performed on the applicant’s motor vehicle. After the second test returned a result outside design intent, the engine was replaced within a reasonable time thereafter. As also noted above, I am not satisfied that the replacement engine is the subject of any defect. In these circumstances, I find that the applicant has exhausted his remedies under s 259(2).
- The Tribunal is vested with jurisdiction in respect of actions under s 259(4) of the Australian Consumer Law, which provides:
The consumer may, by action against the supplier, recover damages for any loss or damage suffered by the consumer because of the failure to comply with the guarantee, if it was reasonably foreseeable that the consumer would suffer such loss or damage as a result of such a failure.
- In the present case, the applicant has claimed damages for:
- (a)interest on his loan of $5,244.06;
- (b)cost of bull bar of $2,640.55;
- (c)cost of towbar of $821.32;
- (d)solicitors’ fees of $3,600, relating to “an alleged assault when an employee and ex-employee of Tait’s Auto group dried to steel (sic) signs from my vehicle and the alleged charges were dropped and left me with an out of pocket solicitors bill”.
- In circumstances where I have found the applicant is not entitled to reject the motor vehicle, he is not entitled to the damages claimed relating to interest on his loan, or the costs of the bull bar and the towbar.
- It is apparent from the material that the applicant has been involved in a public dispute with the respondent over the motor vehicle. The conduct of this dispute is irrelevant to the proceedings before the Tribunal. However, I find that any solicitors’ costs arising from assault allegations associated with that dispute are not “reasonably foreseeable” damages within the scope of s 259(4).
Misleading or deceptive conduct
- Section 236 of the Australian Consumer Law provides:
(a) a person (the claimant) suffers loss or damage because of the conduct of another person; and
(b) the conduct contravened a provision of Chapter 2 or 3;
the claimant may recover the amount of the loss or damage by action against that other person, or against any person involved in the contravention.
- As noted above, at the time the applicant purchased the motor vehicle in December 2015, the respondent had only been advised by Holden that there were problems with excessive oil consumption with Colorados manufactured in 2014. The advice concerning Colorados manufactured in 2015 did not come until September 2017, well after the purchase of the applicant’s motor vehicle and well after any pre-purchase representations were made.
- I am not satisfied that the respondent has engaged in misleading or deceptive conduct for the purposes of s 18(1) of the Australian Consumer Law, and accordingly the applicant is not entitled to damages under s 236.
- The application is dismissed.
- Published Case Name:
Knox v Tait Motors Pty Ltd trading as Tait Auto Group
- Shortened Case Name:
Knox v Tait Motors Pty Ltd trading as Tait Auto Group
 QCAT 195
04 Jun 2020