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Fitzpatrick v Saltwater Series Trailers & Anor QCAT 106
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Fitzpatrick v Saltwater Series Trailers & Anor  QCAT 106
LEE ARTHUR FITZPATRICK
SALTWATER SERIES TRAILERS
Other minor civil dispute matters
16 April 2019
21 March 2019
TRADE AND COMMERCE – COMPETITION , FAIR TRADING AND CONSUMMER PROTECTION LEGISALTION – CONSUMER PROTECTION – consumer guarantee – whether consumer claimed trader failed to satisfy consumer guarantee about supply and manufacture of a trailer
Competition and Consumer Act 2010 (Cth), Schedule 2 (Australian Consumer Law), s 3, s 7, s 54, s 259, s 260,
Fair Trading Act 1989 (Qld), s 15, s 16, s 20
Service and Execution of Process Act 1992 (Cth), s 16
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 12, s 42, s 64, s 93, Schedule 3
Lam v Steve Jarvin Motors Pty Ltd  NSWCATAP 186
APPEARANCES & REPRESENTATION:
First and Second Respondents:
REASONS FOR DECISION
- The Application for minor civil dispute – consumer dispute was filed on 25 June 2018 and seeks an order that the Respondents pay to the Applicant the sum of $17,414.30 being $3,557.50 for repairs to a trailer, $12,130.00 refund of the purchase price for the trailer, $1,400 for return of good, and $326.80 for the filing fee.
Service of the Application and Notice of Hearing
- The Respondents appear to live or carry on business in Victoria. On 14 August 2018 an order was made granting service of the Application on the Respondents by email. The Applicant submitted a copy of an email sent to the Respondents attaching the Application and an earlier Affidavit of Service, which included the notice under the Service and Execution of Process Act 1992 (Cth), s 16. The Notice of Hearing of the proceedings for 21 March 2019 was sent to the Respondents by email on 18 December 2018.
- At the hearing on 21 March 2019, the Respondents failed to appear. There was no record of an application by the Respondents for representation or to attend the hearing by telephone. Further, there was no record of a phone call, email or facsimile from the Respondents about their appearance at the hearing.
- Pursuant to section 93 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’), the Tribunal decided to hear and decide the matter in the absence of the Respondents.
- On relevant invoices from the First Respondent sent to the Applicant in 2015 and 2017, the name and Australian Business Number (‘ABN’) are stated as: Saltwater Trailers ABN 33890949656. An internet ABN search on 21 March 2019 showed that the correct business name of the First Respondent is: Salt Water Series Trailers, and that A Harris is also an entity of the business.
- Based on the results of the ABN search, the Tribunal decided at the hearing to amend the name of the First Respondent to: Salt Water Series Trailers, and to add the person: A Harris, being one of the two entity names comprising the family partnership trading under the name of the First Respondent. The Tribunal has further considered the issue of adding A Harris, and has to rescind that order by not adding that person as a Respondent so as not to impinge on the requirements of procedural fairness.
- The Tribunal confirms the order to amend the name of the First Respondent
- Section 12 of the QCAT Act states that the tribunal may exercise its jurisdiction for a minor civil dispute where the applicant is a consumer in relation to a ‘claim arising out of contract between a consumer and trader’. Schedule 3 definition of ‘consumer’ includes an individual who buys goods, and a ‘trader’ includes a person who in trade or commerce carries on a business of supplying goods. In this case, the Applicant is a ‘consumer’ and the Respondents are ‘traders’. QCAT has jurisdiction to deal with the matter.
- The evidence presented in the Application and by sworn oral testimony of the Applicant during the hearing, is that he entered into a contract with the Respondents for the manufacture and supply of a custom aluminium boat trailer.
- A general description of the trailer is set out in Invoice number 355 dated 8 January 2015 from the First Respondent. The total cost was $15,488.00. The Applicant paid a deposit of $7,000.00. The balance of $8,488 was paid on 9 February 2015.
- It is not clear on what date the Applicant took possession of the trailer but it appears to have been later in 2015. The Applicant gave evidence that he did not use the trailer for about two years. It was stored at his property pending completion of the building of a boat, for which the trailer had been custom built to carry. In September 2017 and December 2017, the Applicant became aware of structural defects in the trailer. Those defects gave rise to the Application and claims filed on 25 June 2018.
- The Applicant’s claims arise from the alleged failure by the Respondents to comply with consumer guarantees under Australian Consumer Law (‘ACL’), a breach of contract and negligence – all of which could be applied as separate causes of action, and offer different remedies. The Tribunal will first deal with the application of ACL.
Application of Australian Consumer Law
- The States and Territories have entered into intergovernmental agreements and enacted complimentary enabling legislation to apply Schedule 2 of Competition and Consumer Act 2010 (Cth), known as the ACL. In Queensland, the enabling Act is the Fair Trading Act 1989 (Qld). The ACL has application to all state and territory jurisdictions.
- To fall within the ACL, a ‘consumer’ must have acquired goods and services not exceeding $40,000.00; or acquired them for personal, domestic or household use; or if the goods consist of a trailer, then acquired it for use principally in the transport on public roads. The Tribunal finds that the Applicant is a ‘consumer’ for the purpose of the ACL.
- The Respondents manufactured and supplied a custom trailer. The definition of ‘manufacturer’ includes a ‘person who holds himself out to the public as the manufacturer of goods’ or a person who carries on a business which applies its name to the goods supplied. There is insufficient evidence to make a certain finding that the Respondents were ‘manufacturers’.
- Further, having regard to the relevant definitions of ‘goods’ and ‘supply’, the Tribunal also finds that the Respondents are a supplier of goods for the purpose of the ACL.
Relevant Consumer Guarantees
- At the outset, it appears that two ACL consumer guarantees are relevant in this case. Specifically, the guarantees of acceptable quality, and fitness for a disclosed purpose.
- ACL s 54 states that if a person supplies, in trade or commerce, goods to a consumer there is a guarantee that the goods are of acceptable quality. This means that the goods must be fit for all the purposes for which the goods are commonly supplied; have acceptable appearance and finish, be free from defects, and be safe and durable. The matter is determined objectively; that is, from the position of a ‘reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods)’. Relevant factors include the nature and price of the goods, representations made by the supplier, and other circumstances.
- Further, ACL s 55 states that there is also a consumer guarantee that goods will be reasonably fit for any disclosed purpose that the consumer made known, expressly or by implication, to the supplier, and any purpose for which the supplier represents they are reasonably fit.
- Before applying the law, the following relevant facts and circumstances will be considered.
Defective wheel carrier – not fitted with a split pin
- The Applicant says that on 30 September 2017, while returning to Townsville from a trip to the Northern Territory, a spare wheel, which was supplied as part of the original purchase, fell off the trailer.
- The Applicant says the reason it fell off was because the wheel carrier had not been fitted with a split pin to lock the castle nut on to the stub axle. The Respondent supplied replacement parts but at a cost of $555.50 to the Applicant.
Defective left rear wheel – wrong size bolts on calliper brackets
- The Applicant says that on 16 December 2017, the left rear wheel locked-up. It occurred in heavy traffic in Toowoomba, and he had to travel with the locked wheel until it was safe to pull over to the kerb and stop. As a result, the tyre on the wheel was worn down to the steel belt.
- The Applicant says the reason the wheel locked up was that the brake calliper on the wheel dislodged causing the brake pad to dislodge and jam between the calliper and the brake motor. The brake calliper had dislodged because the bolts used on the calliper bracket were the incorrect size i.e. they were 8 mm bolts, instead of 10 mm bolts. This was also the case on the other wheels, which could also have resulted in a lock-up on those wheels at any time. The Applicant provided a number of photos which included photos of the calliper mounting plate showing the 8 mm mounting bolts, brake calliper showing damage to the brake pad, the sheared bolt, damaged brake pad and damaged tyre. The trailer was towed by the RACQ to a repairer.
Defective wheel alignment and collapsed suspension
- While at the repairer, further defects were identified. The wheels were misaligned to such an extent that several of the tyres were worn down to the steel bands. A tandem wheel alignment assessment was carried out on the 22 December 2017. The report supplied shows that there was significant misalignment and that the rubber torsion bar suspension had collapsed on all four wheels, which would require the suspension to be rebuilt or replaced. The collapsed suspension resulted in the tyres rubbing on the underside of the mudguards caused the tyres to wear down to the steal band. The Applicant provided a photo of the damage.
- The Applicant attended to the repairs to the damaged brake, replacement of the calliper mounting bolts on the other wheels and the purchase of new tyres.
- The Applicant did not provide a third party specialist report as to the nature and consequences of the defects. However, the repair invoices are consistent with the evidence given by the Applicant at the hearing and in written submissions. The Tribunal accepts the Applicant’s evidence as to the nature and consequences of the defects.
- The Applicant says that he made known to the Respondent, Mr. Justin Harris, at the time of purchase, and that he intended to use the trailer on sealed roads. The Applicant stated that the ‘vast majority of the trailer’s use has been on sealed road, with it only ever having done 42 km on unsealed roads.’
- The trailer had a load carrying capacity of 3200 kg, as shown in the photo provided by the Applicant. The Applicant says the boat, when fully loaded for fishing, weighed 1900 kg, and the trailer weighed 600 kg. This totals 2500 kg, which is substantially less than the maximum load carrying capacity.
- The Applicant says that as a result of the collapse of the torsion-bar suspension after 12500 km of use and a combined weight of loaded trailer (being 2500 kg) that the trailer was not fit for the purpose of having a load carrying capacity of 3200 kg. As a consequence, the Applicant says that he was unable to use the trailer and he had to purchase a new fit for the purpose trailer to enable him to use his boat.
- The Applicant also gave evidence that he tried to contact the Respondents on several occasions about the defects - but his calls were not returned.
Consumer Guarantee – Acceptable quality
- Having regard to the requirements of ACL s 54, the test is whether a reasonable consumer who is fully aware of the state and condition of goods would have found them acceptable. It is clear from the Applicant’s evidence, a reasonable consumer would expect a new custom built trailer not to have the defects described and that features, such as wheel calliper brackets, wheel carriers, wheel alignment and suspension fit for the designated load are ‘central to the functioning, safe operation and durability of the trailer.’ It is also clear that the defects in the trailer were hidden and would not have been apparent on inspection. Moreover, it is clear that the defects resulted in the trailer being unsafe and not durable.
- The Tribunal finds the test in ACL 54 to be satisfied, and that the Respondents breached the consumer guarantee by supplying a trailer that was not of acceptable quality.
- Most of the defects on the trailer were remedied by the Applicant. It appears that the suspension has not been repaired or replaced. It is necessary to consider whether or not the defects were a ‘major failure’ as defined in ACL s 260. The test is whether the goods would not have been purchased by the reasonable consumer who was fully aware of the nature and extent of the failures, that is, the defects. A ‘major failure’ includes, among other things, circumstances where a reasonable consumer, fully acquainted with the nature and extent of failures would not have acquired the goods; if the goods are unfit for a purpose for which goods of the same kind are commonly supplied and cannot easily, and within a reasonable time, be remedied to make them fit for that purpose; or, if the goods are not of acceptable quality because they are unsafe. Having regard to the defects evidenced by the Applicant, the Tribunal finds that the facts meet the test and the defects resulted in a major failure.
Remedies for Major Failure
Rejection of the goods
- Where the defect in the goods is a major failure, ACL 259(3) allows a consumer to reject the goods. However, a consumer is not entitled to reject the goods unless he does so within a reasonable time after the failures became apparent. In this case, the reasonable time would be after December 2017. A ‘reasonable time’ is not defined in the ACL and what is ‘reasonable’ depends on the circumstances of each case. In any event, although there is evidence that the Applicant attempted to contact the Respondents about the defects and that the Respondents did not return calls, there is no specific evidence that the Applicant rejected the trailer and gave notice (such as email or post) to the Respondents as required by ACL 263.
Compensation for loss or damage
- In the alternative, ACL 259(3) allows the Applicant to recover compensation for reduction in value for the goods. Also, ACL 259(4) allows for damages for loss or expenses if it was a reasonably foreseeable consequence that such loss or damage would occur as a consequence of the failure.
- As a consequence of the breach of the consumer guarantee, the Applicant incurred expenses. Tax invoices or receipts for these expenses were provided, as follows:
- (a)Saltwater Trailers – Invoice No. 694 $ 555.50
- (b)RACQ – Receipt (Towing) $ 175.00
- (c)RV Service Centre – Invoice No. S14357 $2,051.50
- (d)Tyrepower – Invoice 14182 $ 520.00
- (e)Country Gardens Motor Inn – 17 Dec 17 $ 256.00
- The Tribunal finds that the Applicant is entitled to payment of these expenses by the Respondent for the amount of $3,557.50.
- Rebuild or Replacement of Suspension. The Applicant has not provided an estimate of the cost. As a consequence, the Tribunal cannot made an order in respect of any compensation for this loss or damage.
- Reduction in value. The Applicant has not provided an estimate of the reduction in value of the trailer as a consequence of the breach. However, the Applicant gave evidence that he may be able to sell the trailer for about $8,000.00. This amount appears reasonable.
- The Australian Tax Office Ruling TR 2018/4 for the effective life of depreciating assets show that an aluminium trailer of less than 4.5 tonnes has a life of 10 years. The trailer was purchased in Jan/Feb 2015 for $15,488.00. The depreciated value of the trailer at the time of the application in July 2018 (that is, three and a half years), was about $10,500.00. Deducting the estimated value of $8,000.00 for resale (which would include the defective suspension), the reduction in value can be calculated as $2,500.00.
- The Applicant also claims payment of the QCAT filing fee.
- Given the findings of the Tribunal as they apply to the ACL, it is not necessary to consider potential claims and remedies arising from other causes of action.
- The name of the First Respondent is amended to Salt Water Series Trailers.
- The Respondents pay to the Applicant the sum of $6,384.30 being for $3,557.50 for repair and other expenses, $2,500.00 reduction in value and $326.80 for filing fee.
- The Respondents pay the sum of $6,384.30 by 15 May 2019.
At https://abr.business.gov.au/AbnHistory/View?id=33890949656, on 21 March 2019.
QCAT Act, s 64
QCAT Act, s 42.
Lam v Steve Jarvin Motors Pty Ltd  NSWCATAP 186, 103-108.
Schedule 2, s 3.
Schedule 2, s 7.
Schedule 2, s 3.
Lam v Steve Jarvin Motors Pty Ltd  NSWCATAP 186, 140.
- Published Case Name:
Lee Arthur Fitzpatrick v Saltwater Series Trailers & JJ Harris
- Shortened Case Name:
Fitzpatrick v Saltwater Series Trailers & Anor
 QCAT 106
16 Apr 2019