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- Unreported Judgment
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Vale v Motorworld QLD Pty Ltd  QCAT 232
motorworld qld pty ltd
Motor vehicle matters
23 June 2020.
15 June 2020
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 – whether consumer entitled to damages – whether statutory warranty applies
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, s 50C
Motor Dealers and Chattel Auctioneers Act 2014 (Qld), Schedule 1
Haisman v Drive (Aust) Pty Ltd  QCAT 44
Medtel Pty Ltd v Courtney (2003) 130 FCR 182
Nesbit v Porter  2 NZLR 465
Pojzak v Congeo Nominees Pty Ltd  VCAT 2175
REASONS FOR DECISION
- On 21 October 2019, Nicholas Vale (‘the applicant’) filed an Application – Motor Vehicle Dispute with the Tribunal. The respondent is Motorworld QLD Pty Ltd (‘the respondent’).
- The applicant is the owner of a 2011 Holden Commodore (‘the motor vehicle’).
- The applicant purchased the motor vehicle from the respondent on 30 May 2019 for $19,000.
- 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 and damages.
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 30 May 2019, and that the odometer reading on the motor vehicle was 165,319 km.
- The applicant gave the following evidence to the Tribunal:
- (a)The salesperson, George Makin, advised him that the vehicle was covered by the statutory warranty. This was also indicated on the Form 12 provided to the applicant on 30 May 2019.
- (b)The applicant telephoned David Kenny, the manager of the respondent, to express concerns about engine lights being displayed. The applicant was referred to Mild 2 Wild Exhausts.
- (c)The same problem occurred again, and Mr Kenny referred the applicant to Total Car Care.
- (d)The applicant then drove the motor vehicle to Sydney. He experienced problems with the motor vehicle, and sought assistance from Kempsey Macleay Holden, Gerry Wubbels Automatics Pty Ltd and Gearbox Solutions Pty Ltd. He also had to hire a car, and pay for accommodation while the vehicle was being repaired.
- (e)Upon returning to Brisbane, the motor vehicle was also seen by Zupps Mt Gravatt Pty Ltd, amongst others.
- (f)The applicant requested a refund on 9 September 2019. This was followed up by a formal letter from his solicitor on 2 October 2019.
- Ultimately, the motor vehicle was seen by Ron Gooley’s Mechanical Repairs. Mr Gooley provided an expert report dated 20 December 2019, in which he stated:
I found the car to have problems with the modifications on the vehicle in particular the external transmission cooling system. After identifying this problem I found the part unavailable to be repaired and not available to purchase as the vehicle was previously owned and modified by the Police.
Please refer to attached invoices, Job number 445670 dated 25/10/2019 and Job number 445882 dated 2/12/2019 for full details of problems and works performed on the Holden Commodore.
- Mr Gooley was cross-examined about the work of other mechanics, and in particular Gearbox Solutions Pty Ltd. However, he stated that work undertaken did not address the underlying defect identified by him. He stated that the cooler was completely blocked, which caused transmissions to keep burning out. I accept Mr Gooley’s evidence, and find that the defect was present at the time of purchase.
- Based on the evidence before me, I find that a reasonable consumer fully acquainted with the state of the motor vehicle at the time of purchase, particularly having regard to modifications to the external transmission cooling system, would not regard the motor vehicle as free from defects and durable.
- The respondent provided a statement from Ricky Smith of Mild 2 Wild Exhausts dated 16 September 2019. Mr Smith stated:
On the 16th day of June 2019 Mr David Kenny from Motorworld QLD referred a customer Mr Vale to this business to satisfy an after sales complaint … Mr Vales [sic] complaint was the traction control light had illuminated on his dash board. I connected the scan tool to the vehicle and reset the computer fault code. I requested Mr Vale leave the vehicle with me for a day so I could investigate the issue yet Mr Vale stated he was busy and would rebook the vehicle in when he had time to leave it with me … Mr Vale stated he would return the vehicle if the light re appeared and left our workshop.
- The respondent also provided a statement from Ludwig Pleml of Total Car Care dated 12 July 2019. Mr Pleml stated:
On the 19th day of June, 2019 we inspected a 2011 holden Commodore SS sedan registration number 659-XSH in relation to an intermittent engine and stability control warning light. We carried out diagnostic and scanning tests whle [sic] the customer was present. No fault codes were stored or logged in the ECU (on board computer). We requested the owner leave the vehicle with us as more time was required to carry out further tests.
The owner of the vehicle informed us that he will return the vehicle when he has time to leave the vehicle with us or if the warning light reappeared on the dash and left with the vehicle.
- I asked the applicant to comment on the statements that he had refused to leave his vehicle with Mild 2 Wild Exhausts and Total Car Care to enable further investigations to be undertaken. He denied this, and stated he was willing to leave the vehicle for as long as required.
- The respondent drew my attention to an email from the applicant dated 20 June 2019, the day after the vehicle was seen by Mr Pleml. The email begins, “[a]s discussed I am currently stuck in Kempsey NSW …” Given this email, I do not accept the applicant’s evidence that he was willing to leave the vehicle as long as required, as he clearly had travel planned for the following day. I accept the statements of Mr Smith and Mr Pleml.
- The respondent conceded that an error had been made by the salesperson, Mr Makin, in relation to whether the statutory warranty applied to 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 test of whether there is a major failure for the purposes of s 260 and the test for whether goods are of acceptable quality for the purposes of s 54 both adopt a ‘reasonable consumer’ benchmark. For the reasons already given, I find that the defects relating to the external transmission cooling system are such that a reasonable consumer fully acquainted with the nature and extent of the failure, would not have acquired the motor vehicle. Further, as Mr Gooley indicated, the part was unable to be repaired and not available for purchase, and the car was therefore unable to be made fit for purpose easily and within a reasonable time.
- In order to obtain a refund, the consumer is required to reject within the ‘rejection period’. That term is defined in s 262(2) of the Australian Consumer Law to mean:
- (2)The rejection period for goods is the period from the time of the supply of the goods to the consumer within which it would be reasonable to expect the relevant failure to comply with a guarantee referred to in section 259(1)(b) to become apparent having regard to:
- (a)the type of goods; and
- (b)the use to which a consumer is likely to put them; and
- (c)the length of time for which it is reasonable for them to be used; and
- (d)the amount of use to which it is reasonable for them to be put before such a failure becomes apparent.
- In Nesbit v Porter  2 NZLR 465 at , the New Zealand Court of Appeal held that the rejection period was one that:
…suffices to enable the consumer to become fully acquainted with the nature of the defect, which, where the cause of breakage or malfunction is not apparent, the consumer can be expected to do by taking the goods to someone, usually or preferably the supplier, for inspection. In this context, therefore, a defect is not ‘apparent’ until its cause has been identified and the buyer knows what has to be done to fix it, and what that will cost; in other words, until the buyer is in a position to determine whether the defect is substantial.
- Based on the evidence before me, I find that the extent of the failure with the motor vehicle did not become apparent until after Mr Gooley had diagnosed the defect. The applicant had by this stage already requested a refund. In these circumstances, I am satisfied that the applicant rejected the motor vehicle within the rejection period.
- In Haisman v Drive (Aust) Pty Ltd  QCAT 44 at , I found that the Tribunal has jurisdiction to make an order requiring the supplier to pay to the consumer a stated amount of money, namely the amount of the refund payable under s 263(4)(a). In this case, the applicant has notified the respondent that the goods have been rejected in accordance with s 263(1) of the Australian Consumer Law. I will give effect to the requirement in s 263(2) that the goods be returned by so ordering. Upon the return of the motor vehicle, the applicant will be entitled to a refund pursuant to s 263(4).
- 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 totalling $7,958.99 for repairs undertaken to the vehicle.
- In Pojzak v Congeo Nominees Pty Ltd  VCAT 2175 at , the Victorian Civil and Administrative Tribunal stated that “any entitlement to claim damages comes with the obligation to mitigate the damages”.
- I have found that the applicant refused requests to leave the vehicle with Mild 2 Wild Exhausts and Total Car Care to enable further investigations to be undertaken. In these circumstances, I am unable to be satisfied that the costs incurred by the applicant were reasonably foreseeable. Had Mild 2 Wild Exhausts or Total Car Care been given adequate time to diagnose the problem, the costs incurred by the applicant could potentially have been avoided. I do not consider that the applicant is entitled to damages for repairs to the motor vehicle.
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.
- I accept that the salesperson made an error in informing the applicant that the statutory warranty applied to the motor vehicle, and that the respondent therefore engaged in misleading conduct.
- The applicant stated that he would not have purchased the motor vehicle had he been aware that the statutory warranty did not apply. I have already found that the applicant is entitled to a refund. I do not consider that the applicant is entitled to any further damages for the reasons I have set out in my findings in relation to damages under s 259(4) of the Australian Consumer Law.
- The applicant has also sought to rely on the statutory warranty contained in the Motor Dealers and Chattel Auctioneers Act 2014 (Qld) (‘the Act’).
- At the time of sale, the motor vehicle had an odometer reading of 165,319 km. Although the Act was amended with effect from 1 September 2019, the statutory warranty contained in Schedule 1 as it was in force at the time of sale did not apply to vehicles with an odometer reading of more than 160,000 km.
- Accordingly, the applicant does not have a claim under the Act.
- Section 50C of the Fair Trading Act 1989 (Qld) provides that the Tribunal may make a costs order against the respondent in the amount of the prescribed filing fee paid by the applicant. This power is subject to s 102(1) of the Queensland Civil and Administrative Tribunal Act 2009 (Qld), which provides that the Tribunal may make a costs order if the interests of justice require it.
- The applicant has been substantially successful in the proceedings. However, the applicant inflated his claim by including items which I have found not to be recoverable, such that the matter could otherwise have been dealt with by an adjudicator as a matter under $25,000. In these circumstances, I do not consider that it is in the interests of justice to order the respondent to pay the filing fee of $345.80.
- The applicant has no entitlement, under s 50C, to legal costs other than the amount of the prescribed filing fee, and I will give no further consideration to those claims.
- The orders of the Tribunal are:
- The applicant is required to return the motor vehicle the subject of these proceedings to the respondent within 7 days of the date of these orders.
- The respondent is required to pay to the applicant the amount of $19,000 within 28 days of the date of these orders.
- Published Case Name:
Vale v Motorworld QLD Pty Ltd
- Shortened Case Name:
Vale v Motorworld QLD Pty Ltd
 QCAT 232
23 Jun 2020