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Lieven v Shem-mell Pty Ltd QCAT 209
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Lieven v Shem-mell Pty Ltd trading as Capalaba Car World  QCAT 209
shem-mell pty ltd trading as capalaba car world
Motor vehicle matters
10 June 2020
4 June 2020
Shem-mell Pty Ltd trading as Capalaba Car World is required to pay Joanne Lieven the amount of $9,936.80 within 28 days of the date of this order.
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 damages – whether consumer entitled to claim under the statutory warranty
Australian Consumer Law, s 54, s 259
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 13
Medtel Pty Ltd v Courtney (2003) 130 FCR 182
REASONS FOR DECISION
- On 10 February 2020, Joanne Lieven (‘the applicant’) filed an Application – Motor Vehicle Dispute with the Tribunal. The respondent is Shem-mell Pty Ltd trading as Capalaba Car World (‘the respondent’).
- The applicant is the owner of a 2008 Nissan Navara (‘the motor vehicle’).
- The applicant purchased the motor vehicle from the respondent on 2 September 2019 for $10,340. At the time of purchase, the motor vehicle had an odometer reading of 270,140 kms.
- 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.
- On 25 March 2020, I directed the applicant to file her statements of evidence by 8 April 2020, and any statements of evidence in reply by 21 April 2020. I directed the respondent to file its statements of evidence by 14 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 sought to file additional evidence on 25 May 2020, and the respondent sought to file additional evidence on 3 June 2020. The matter came on for hearing on 4 June 2020.
- Neither party provided an adequate explanation as to why the additional evidence could not have been filed within the timeframes directed, and I declined to admit the additional evidence.
- 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:
- 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).
- (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 applicant gave the following evidence:
- The applicant took possession of the motor vehicle on 2 September 2019.
- The engine warning light on the motor vehicle’s dashboard came on on 23 September 2019.
- The applicant returned the vehicle to the respondent on 23 September 2019. She was told by the respondent’s repair man that the respondent was not going to resolve the engine light issue.
- The applicant approached several mechanics to attempt to repair her car. These included JD Automotive, Eastern Suburbs Mobile Mechanics and Complete Auto Electrics. She paid these mechanics a total of $860.
- Ultimately, the applicant took the vehicle to Bartons Capalaba Nissan. The vehicle was with Bartons for 88 days, from 21 November 2019 to 17 February 2020. The applicant paid $9,076.80, which included a hire car.
- The applicant’s evidence in relation to the above issues was not challenged under cross-examination, and I accept her evidence.
- The applicant provided a statement from Ross John Watson, the workshop controller at Bartons. Mr Watson gave the following evidence:
- The applicant’s motor vehicle was brought to his workshop on 21 November 2019.
- Mr Watson undertook various diagnostic tests and repairs, which did not resolve the issue. These tests included a compression test.
- Ultimately, after contacting Nissan, a leak down test was undertaken on 9 January 2020. Mr Watson detected a leak in the upper engine, possibly past the valves, likely caused by valve seat wearing due to over fueling.
- Mr Watson recommended that the engine be replaced by a second hand engine, and performed the replacement.
- The respondent provided a statement from Dave Muller, mechanic. Mr Muller stated that he performed a pre-purchase inspection on the motor vehicle, and that it was in good condition.
- The respondent also provided a statement from Doug Day of RLC Engine Reconditioning. Mr Day stated that the results of the compression test performed by Barton’s was within tolerance.
- I accept Mr Watson’s evidence that the motor vehicle had an upper engine leak. I also accept his evidence that the leak was likely caused by valve seat wearing due to over fueling. In these circumstances, I am prepared to accept that the leak was in existence at the time of purchase, and would have developed over a longer period than the 80 days the applicant had possession of the vehicle before it was brought to the Bartons workshop.
- The upper engine leak took Mr Watson over a month to identify, after excluding a number of other causes. In those circumstances, I place little weight on Mr Muller’s statement relating to his pre-purchase inspection. I am satisfied that it would be unrealistic to expect Mr Muller to be able to diagnose an upper engine leak during a pre-purchase inspection.
- I also place little weight on Mr Day’s statement. Mr Day commented on the compression test performed by Bartons, which was an interim test conducted prior to the leak down test. It was the leak down test, and not the compression test, which ultimately diagnosed the problem.
- I have taken into account that the motor vehicle was 11 years old and had travelled 270,140 kms at the time of purchase. I have also taken into account that the purchase price was $10,340. Nevertheless, I do not consider that a reasonable consumer would expect to have to be required to replace the engine so soon after 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 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 upper engine leak defect is such that a reasonable consumer fully acquainted with the nature and extent of the failure, would not have acquired the motor vehicle.
- In the case of a major failure, the remedies available to the applicant are set out in
s 259(3) of the Australian Consumer Law as follows:
If the failure to comply with the guarantee cannot be remedied or is a major failure, the consumer may:
- subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection; or
- by action against the supplier, recover compensation for any reduction in the value of the goods below the price paid or payable by the consumer for the goods.
- The applicant has at no stage rejected the motor vehicle.
- The applicant has not provided any evidence in relation to the current value of her motor vehicle, such that I am unable to award compensation for reduction in the value of the goods below the price paid by the applicant.
- There are therefore no remedies available to the applicant under s 259(3).
- 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.
- I consider that it is open to the applicant to seek to have the motor vehicle fixed, rather than being limited to rejecting the goods under s 259(3).
- In the present case, the applicant has claimed damages for repair expenses totalling $9,936.80, including hire car fees. As noted above, I have found that the applicant provided the respondent with an opportunity to repair the vehicle on 23 September 2019, but it declined to do so. In those circumstances, I consider it reasonably foreseeable that the applicant would seek to have the vehicle repaired elsewhere, and she would need to hire a car while the repairs were being undertaken.
- The applicant has claimed damages for repairs yet to be undertaken in the amount of $3,431. As the applicant has yet to pay this amount, I am not satisfied that she is entitled to these damages. The applicant also conceded that some of these repairs were no longer necessary following the engine replacement.
- The applicant has also claimed damages for a number of other miscellaneous items totalling $722.48. Some of these items relate to the costs of the proceedings, which are dealt with below. Other items relate to fuel for her hire car, cab fares and the cost of registration while her car was being repaired. To allow these amounts over and above the applicant’s hire car expenses would amount to double recovery. Accordingly, I decline to allow these amounts.
- 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—
(a) an unregistered motor vehicle that is—
(i) incapable of being registered in Queensland because of its design; or
(ii) a written-off vehicle; or
(b) a motor vehicle sold on consignment, unless the owner of the vehicle is a licensee; or
(c) a commercial vehicle; or
(d) a caravan; or
(e) a motorcycle.
- The applicant’s motor vehicle falls within this definition.
- At the time of sale, the motor vehicle had an odometer reading of 270,140 kms 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.
- While the applicant did attend the respondent’s premises on 23 September 2019 with the motor vehicle, there is no evidence that she had provided the respondent with a written defect notice at that time. 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 substantially successful in the proceedings. However, the applicant initially claimed the amount of $68,653.68 before reducing her claim to $14,090.28, 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 respondent is ordered to pay to the applicant the amount of $9,936.80.
- Published Case Name:
Lieven v Shem-mell Pty Ltd trading as Capalaba Car World
- Shortened Case Name:
Lieven v Shem-mell Pty Ltd
 QCAT 209
10 Jun 2020