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Cox v J & M Phelan trading as Carrara Carmart QCAT 190
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Cox v J & M Phelan trading as Carrara Carmart  QCAT 190
J & M phelan trading as carrara carmart
Motor vehicle matters
27 May 2020
22 May 2020
The Application – Motor Vehicle Dispute filed on 20 December 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 goods rejected during the rejection period – whether consumer entitled to refund – whether consumer entitled to claim under the statutory warranty
Australian Consumer Law, s 54, 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, s 3, s 3B, s 4, s 9, s 11, s 13
Medtel Pty Ltd v Courtney (2003) 130 FCR 182
Pojzak v Congeo Nominees Pty Ltd  VCAT 2175
Vautin v BY Winddown, Inc (formerly Bertram Yachts) (No 4)  FCA 426
APPEARANCES & REPRESENTATION:
REASONS FOR DECISION
- On 20 December 2019, Bridgett Cox (‘the applicant’) filed an Application – Motor Vehicle Dispute with the Tribunal. The respondent is J & M Phelan Pty Ltd trading as Carrara Carmart (‘the respondent’).
- The applicant is the owner of a 2009 Mazda CX7 (‘the motor vehicle’).
- The applicant purchased the motor vehicle from the respondent on 28 June 2019 for $8,000 (including $240 for a 12 month warranty).
- The applicant seeks relief under both the Motor Dealers and Chattel Auctioneers Act 2014 (Qld) and 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.
- On 26 February 2020, I directed the applicant to file her statements of evidence by 18 March 2020, and any statements of evidence in reply by 8 April 2020. I also directed:
No party will be allowed to present any evidence at the hearing that is not contained in the statements without justifying the need for additional evidence to the Tribunal.
- The applicant filed no statements of evidence, and did not seek leave to present additional evidence at the hearing. In these circumstances, her evidence has been limited to the material attached to her application, and her oral answers to questions by the respondent.
- As will become apparent below, the applicant’s failure to take timely action in relation to her complaint against the respondent has presented her with a number of obstacles.
- 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:
- Goods are of acceptable quality if they are as:
- fit for all the purposes for which goods of that kind are commonly supplied; and
- acceptable in appearance and finish; and
- free from defects; and
- 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).
- The matters for the purposes of subsection (2) are:
- the nature of the goods; and
- the price of the goods (if relevant); and
- any statements made about the goods on any packaging or label on the goods; and
- any representation made about the goods by the supplier or manufacturer of the goods; and
- any other relevant circumstances relating to the supply of the goods.
- The guarantee of acceptable quality does not apply where the consumer failed to take reasonable steps to prevent the goods become of unacceptable quality or subjected them to abnormal use (s 54(6)).
- The applicant gave the following evidence:
- (a)The applicant took possession of the motor vehicle on 28 June 2019.
- (b)The motor vehicle stopped within 12 hours of her taking possession of the vehicle.
- (c)Under questioning by the respondent, the applicant stated that she drove the vehicle 50 metres to a friend’s house at the direction of the respondent’s salesperson, Brian Meehan.
- (d)The applicant has had no return phone calls from the dealer when leaving voice mails and texts. Under questioning by the respondent, the applicant stated that she primarily sought to contact Mr Meehan.
- (e)By text message to Mr Meehan dated 30 June 2019, the applicant asked “it’s a spit (sic) radiator hose.. am I free to take it to the mechanics (sic) to get it fixed first thing”. She did not receive a response.
- The applicant provided a short report from Shane Biddle dated 20 September 2019. The report states:
On 1st July 2019, Bridgett Cox asked me to look at a vehicle, a Maxda CX7 … built in April 2009 with Registration Number CT92NA.
The vehicle had an extreme coolant leak from a split oil cooler hose. I also suspected the engine had suffered heat damage but was unable to prove this because the engine would not hold coolant. On 5th July 2019 I replaced the damaged oil cooler hose and was able to test for heat damage. Subsequently results of tests prove positive to combustion gas being present in engine coolant.
Attached is a copy of Invoice number 3164, as yet unpaid.
- It does not appear to be in dispute that the presence of combustion gas in the engine coolant is indicative of a leaking head gasket.
- The respondent provided a statutory declaration from Colin Walker. Mr Walker stated that he drove the vehicle 400 kms to deliver it to the applicant. He experienced no problems or abnormalities with the vehicle, and checked the fluid levels. Mr Walker was available for cross-examination, but the applicant did not ask him any questions.
- The respondent also provided a statutory declaration from Vicki Bramich. Ms Bramich stated that the applicant admitted to driving the motor vehicle after the radiator hose had split and while the vehicle was still losing water. Ms Bramich was available for cross-examination, but the applicant did not ask her any questions.
- I accept Mr Walker and Ms Bramich’s evidence. However, I also accept the applicant’s evidence that Mr Meehan told her to drive the motor vehicle a short distance to her friend’s house. Mr Meehan did not give evidence at the hearing, and consequently there is no evidence to contradict the applicant’s account. In these circumstances, I do not accept that the applicant failed to take reasonable steps to prevent the goods becoming of unacceptable quality or subjected them to abnormal use.
- It is not disputed, and I accept, that the motor vehicle suffered from a split oil cooler hose shortly after delivery to the applicant. I also accept that there is combustion gas in the engine coolant. Given that the split hose and combustion gas in the coolant occurred so soon after the applicant took possession, it is open to me to infer that there were hidden defects present in the motor vehicle at the date of supply. I do so infer.
- 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 would not regard the motor vehicle as free from defects and durable.
- 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:
- the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or
- the goods depart in one or more significant respects:
- if they were supplied by description—from that description; or
- if they were supplied by reference to a sample or demonstration model—from that sample or demonstration model; or
- 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
- the goods are unfit for a disclosed purpose that was made known to:
- the supplier of the goods; or
- 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
- 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 split hose and combustion gas in the coolant are such that a reasonable consumer fully acquainted with the nature and extent of the failure, would not have acquired the motor vehicle.
- 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:
- 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:
- the type of goods; and
- the use to which a consumer is likely to put them; and
- the length of time for which it is reasonable for them to be used; and
- the amount of use to which it is reasonable for them to be put before such a failure becomes apparent.
- I find that the failure was apparent to the applicant by at least 5 July 2019, when Mr Biddle replaced the oil cooler hose and tested for combustion gas in the oil coolant.
- The applicant conceded during submissions that there was no evidence that she had rejected the motor vehicle or requested a refund from the respondent. She stated that the respondent did not return her calls. However, it is plainly the case that there were other means the applicant could have taken to convey her requests, such as in writing either electronically or by post.
- The application filed in the Tribunal on 20 December 2019, and subsequently served on the respondent, contains a request for a refund. However, this was more than five months after the failure had become apparent to the applicant. In those circumstances, I am not satisfied that the applicant rejected the motor vehicle within the rejection period.
- The applicant is therefore not entitled to a refund under s 259(3)(a) and s 263(4) of the Australian Consumer Law.
- The applicant has not provided any evidence in relation to the current value of her motor vehicle. I am therefore unable to award compensation under s 259(3)(b) of the Australian Consumer Law for reduction in the value of the goods below the price paid by the applicant.
- 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 Vautin v BY Winddown, Inc (formerly Bertram Yachts) (No 4)  FCA 426 at , Derrington J stated:
It would appear that this subsection is concerned with the recovery of ‘reliance losses’ as the inclusion of the limitation of ‘reasonable foreseeability’ pertains to such losses rather than expectation losses.
- In the present case, the applicant has claimed damages for:
- (a)delivery fee of $500;
- (b)registration and stamp duty of $818;
- (c)NRMA green slip of $555.96;
- (d)mechanic bill of $188;
- (e)loss of income of $20,000.
- The applicant’s claim of $20,000 for loss of income is an expectation loss and not a reliance loss, and is not recoverable. In any event, she provided no evidence to support this claim.
- I am not satisfied that the applicant is entitled to $188 for repairs undertaken by Mr Biddle, as there is no evidence that the applicant has paid this amount to Mr Biddle. Mr Biddle’s letter indicates that the invoice was unpaid at the time of writing.
- 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”. The applicant conceded in submissions that there was no evidence that she had asked the respondent to either repair or arrange repairs to the vehicle. The closest she came to this was asking by text message whether she could take the vehicle to another mechanic, which resulted in only partial repairs being undertaken. There is no evidence of follow up communication after this. I have previously found that she did not request a refund from the respondent prior to commencing proceedings. In these circumstances, I do not consider that the applicant is entitled to damages in respect of the other items.
- The applicant has also sought to rely on the statutory warranty contained in the Motor Dealers and Chattel Auctioneers Act 2014 (Qld) (‘the Act’).
- ‘Warranted vehicle’ is defined in s 3 of the Act to mean:
A warranted vehicle is a used motor vehicle other than—
- an unregistered motor vehicle that is—
- incapable of being registered in Queensland because of its design; or
- a written-off vehicle; or
- a motor vehicle sold on consignment, unless the owner of the vehicle is a licensee; or
- a commercial vehicle; or
- a caravan; or
- a motorcycle.
- While it was sold unregistered, there is nothing to suggest that the applicant’s motor vehicle is excluded from this definition by virtue of paragraph (a).
- At the time of sale, the motor vehicle had an odometer reading of 207,429 and a built date of July 2008. As the motor vehicle has an odometer reading of more than 160,000 km, and a built date of more than 10 years before the day of its sale, it is a class B warranted vehicle in accordance with s 3B of Schedule 1 to the Act.
- In accordance with s 4 of Schedule 1 to the Act, as a class B warranted vehicle, the motor vehicle was warranted for a period which ended when the vehicle had travelled 1,000 km, or one month after taking possession, whichever happens first.
- Under s 9 of Schedule 1 to the Act, the buyer must notify the dealer in writing of a defect before the end of the warranty period and deliver the vehicle to the warrantor or qualified repairer nominated by the warrantor, depending on whether the vehicle is less or more than 200 km from the warrantor’s place of business. The buyer is taken to have delivered the vehicle if he or she makes reasonable efforts to deliver the vehicle to the warrantor or a nominee, but they have refused to accept it.
- The applicant conceded in submissions that she had not provided a written defect notice. For completeness, I have nevertheless considered whether the text message dated 30 June 2019 is capable of being regarded a written defect notice under the Act. However, the text message refers only to the split hose, which the applicant arranged for repair of herself, and does not refer to combustion gas in the oil coolant. In any event, there is no evidence before me that the respondent or a nominee refused to accept the vehicle after the applicant made reasonable efforts to deliver the vehicle. The respondent’s obligation to advise whether the defect is covered by the statutory warranty under s 11 of the Act only arises after the vehicle is so delivered. Accordingly, I am not satisfied that the respondent has failed to repair the defect within the repair period for the purposes of s 13(b)(i) of Schedule 1 to 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 unsuccessful in the proceedings. She also inflated her 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 application is dismissed.
- Published Case Name:
Cox v J & M Phelan trading as Carrara Carmart
- Shortened Case Name:
Cox v J & M Phelan trading as Carrara Carmart
 QCAT 190
27 May 2020