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- Unreported Judgment
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Hammond v Nissan Motor Co (Australia) Pty Ltd  QCAT 302
jason lee hammond
nissan motor co (australia) pty ltd
Motor vehicle matters
5 August 2020
On the papers
Nissan Motor Co (Australia) Pty Ltd is required to pay to Jason Lee Hammond the amount of $2,650 within 28 days of the date of these orders.
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 – liability of manufacturer – measure of damages
Competition and Consumer Act 2010 (Cth), Schedule 2 – Australian Consumer Law, s 54, s 271, s 272
Fair Trading Act 1989 (Qld), s 50A, s 50C
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
REASONS FOR DECISION
- On 13 November 2019, Jason Lee Hammond (‘the applicant’) filed an Application – Motor Vehicle Dispute with the Tribunal. The respondent is Nissan Motor Co (Australia) Pty Ltd (‘the respondent’).
- The applicant is the owner of a 2017 Nissan Navara (‘the motor vehicle’).
- The applicant purchased the motor vehicle from Alto Blacktown Pty Ltd on 27 May 2019 for $35,300.
- 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, plus certain damages which are outlined below.
- On 21 February 2020, the filed a Response and/or counter-application – Motor Vehicle Dispute with the Tribunal. The respondent’s position is as follows:
Nissan disputes [t]hat an order can be made against the Respondent. This is because under the Australian Consumer Law (ACL), the remedy of a refund or replacement is available only against the supplier of goods, namely, the used car dealership from which the Applicant purchased the Vehicle. This is pursuant to section 269(3) of the ACL. The consumer’s remedy directly against the manufacturer of goods, is limited to damages (section 271(3) ACL). As such, the used car dealership must be joined to the proceedings if the Applicant seeks the remedy of a refund or replacement.
- I note that the applicant at no stage sought to join the supplier to the proceedings.
- 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.
- The applicant gave the following evidence:
- (a)The applicant purchased the motor vehicle on 27 May 2019.
- (b)During the month of June 2019, the applicant noticed the following items relating to the motor vehicle:
- the cruise control stopped working;
- none of the functions on the steering wheel were working;
- the stitching on the rear seat was split;
- the reverse camera display on the dashboard was not visible.
- (c)The applicant took the motor vehicle to Nissan Hillcrest for a scheduled service on 3 July 2019, and raised the above issues. He was told that the cruise control was not working because coffee had been spilt over the steering wheel, and that he should take the vehicle to Nissan Springwood.
- (d)The applicant took the motor vehicle to Nissan Springwood on 10 July 2019, who fixed all the issues except for the stitching on the rear seat. The rear seat was subsequently fixed. These items were covered under warranty at no charge to the applicant.
- (e)The applicant returned the motor vehicle to Nissan Springwood on 15 August 2019, after noticing a vibration issue. He was subsequently advised that the vibration was due to the turbo not working properly, and that there were vacuum hoses that were not connected properly. The applicant was advised that this was not covered under warranty as the motor vehicle had been tampered with by someone other than Nissan. He was charged $900 for the repairs.
- (f)The applicant returned the vehicle to Nissan Springwood on 25 September 2019, after continuing to experience intermittent problems with the cruise control. The applicant was given a courtesy vehicle. A month later, he was advised that both turbos had blown, and that Nissan would not be covering it under warranty due to the vehicle having been involved in some type of heavy impact. The applicant denied any knowledge of such an impact.
- (g)The applicant was told that he would have to pay to have the vehicle put back together. The motor vehicle remains at Nissan Springwood’s holding yard.
- (h)The applicant made his first complaint to the respondent on 28 September 2019. He requested reimbursement of the cost of the motor vehicle and repairs, or replacement with an equivalent vehicle.
- (i)The applicant has been told that the motor vehicle has a history of multiple repairs, including an engine replacement at 2,000 km.
- The applicant provided a report from Andrew Gamblen of Modplates, who inspected the motor vehicle at Nissan Springwood on 6 March 2020. Mr Gamblen stated:
Based on the history provided, the turbos appear to fail around every 10,000 kms. The root cause of this fault does not appear to have been identified or rectified by Nissan during the warranty period.
Nissan has noted that the current failure was a result of impact damage or ingestion into the turbo. They did not offer any information on the cause or source of this damage.
Nissan has advised that the vehicle will need approximately $2200 in parts plus labour to return the vehicle to service. These parts include an exhaust manifold and gaskets and seals to re install the existing turbos. Refer to list of parts provided in the Appendix.
Nissan has advised that the vehicle has turbo damage but does not list replacing the turbos for repair. It is not clear from the list of parts provided what item has failed or contributed to the failure, and what part of this repair would reduce the chance of this re occurring in the near future.
It is clear from the advised service history that this vehicle has suffered from multiple turbo failures in it service life. The current failure would appear to be a turbo failure along similar lines to the past failures and as such it is not unreasonable to assume it is a continuation of the same issues that have led to failures of the past.
Nissan has not offered any explanation to the owner as to why this failure is considered different to others or what the owner was required to do to ensure the failure did not occur.
- The service history was provided by the respondent pursuant to an order of the Tribunal. No other evidence was provided by the respondent.
- In the absence of any evidence to the contrary, I accept the evidence of the applicant and Mr Gamblen. In particular, I accept Mr Gamblen’s evidence that turbo failure appears to be a recurrent feature of the motor vehicle since manufacture, even though no root cause has been identified.
- 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 guarantee of acceptable quality in s 54 has therefore not been complied with.
- The remedies available to a consumer against the manufacturer of goods are set out in ss 271 and 272 of Australian Consumer Law. Those sections relevantly provide:
271 Action for damages against manufacturers of goods
- (a)the guarantee under section 54 applies to a supply of goods to a consumer; and
- (b)the guarantee is not complied with;
an affected person in relation to the goods may, by action against the manufacturer of the goods, recover damages from the manufacturer.
- (2)Subsection (1) does not apply if the guarantee under section 54 is not complied with only because of:
- (a)an act, default or omission of, or any representation made by, any person other than the manufacturer or an employee or agent of the manufacturer; or
- (b)a cause independent of human control that occurred after the goods left the control of the manufacturer; or
- (c)the fact that the price charged by the supplier was higher than the manufacturer's recommended retail price, or the average retail price, for the goods.
- (6)If an affected person in relation to goods has, in accordance with an express warranty given or made by the manufacturer of the goods, required the manufacturer to remedy a failure to comply with a guarantee referred to in subsection (1), (3) or (5):
- (a)by repairing the goods; or
- (b)by replacing the goods with goods of an identical type;
then, despite that subsection, the affected person is not entitled to commence an action under that subsection to recover damages of a kind referred to in section 272(1)(a) unless the manufacturer has refused or failed to remedy the failure, or has failed to remedy the failure within a reasonable time.
272 Damages that may be recovered by action against manufacturers of goods
- (1)In an action for damages under this Division, an affected person in relation to goods is entitled to recover damages for:
- (a)any reduction in the value of the goods, resulting from the failure to comply with the guarantee to which the action relates, below whichever of the following prices is lower:
- (i)the price paid or payable by the consumer for the goods;
- (ii)the average retail price of the goods at the time of supply; and
- (b)any loss or damage suffered by the affected person because of the failure to comply with the guarantee to which the action relates if it was reasonably foreseeable that the affected person would suffer such loss or damage as a result of such a failure.
- (2)Without limiting subsection (1)(b), the cost of inspecting and returning the goods to the manufacturer is taken to be a reasonably foreseeable loss suffered by the affected person as a result of the failure to comply with the guarantee.
- (3)Subsection (1)(b) does not apply to loss or damage suffered through a reduction in the value of the goods.
- I have previously found that the guarantee of acceptable quality has not been complied with. Accordingly, the applicant may recover damages under s 271(1).
- I note that the respondent has apparently claimed that the motor vehicle has been tampered with, or that it was involved in a heavy impact. However, no evidence was provided by the respondent in relation to either of these claims. Accordingly, I am not satisfied that the exceptions in s 271(2) apply in relation to the turbo issue.
- I also note that the applicant requested (amongst other things) replacement of the motor vehicle with a vehicle of equivalent value on 28 September 2019. The respondent had not done this by 13 November 2019, when the application was filed. Accordingly, as a reasonable time had expired, s 271(6) does not preclude the applicant from commencing proceedings.
- As pointed out by the respondent, the remedies available under s 272 do not include a refund as sought by the applicant. I will deal with the types of damages available in s 272(1)(a) and (b) in turn.
Damages for reduction in value
- The applicant provided a “Valuation Certificate” from the Redbook website, for a 2017 Nissan Navara.
- With respect, this certificate does not provide any evidence as to the reduction in value of the applicant’s motor vehicle due to the failure to comply with the guarantee of acceptable quality.
- In these circumstances, I am unable to quantify any damages that might be available to the applicant under s 272(1)(a).
Damages for reasonably foreseeable loss or damage
- In Vautin v BY Winddown, Inc (formerly Bertram Yachts) (No 4)  FCA 426 at , Derrington J made the following statement in relation to s 259(4) of the Australian Consumer Law, which is identically worded to s 272(1)(b):
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.
- The applicant has provided an invoice for $900 from Nissan Springwood in respect of the repairs undertaken in August 2019 to the turbo hoses. These repairs were reasonably foreseeable. I note that the applicant has advised that Alto Blacktown Pty Ltd paid for half of these repairs, meaning that only $450 is recoverable by the applicant.
- The applicant has provided invoices in relation to the purchase of a towbar for $730 and a bonnet protector for $100. While these may be regarded as reliance losses, the applicant has not provided any evidence as to the current value of the items or as to any attempts to sell the items. The respondent is not required to pay the applicant in full for these items if the applicant is able to sell the items to offset part of his losses. In these circumstances, I am unable to quantify any damages that might be available to the applicant in this regard.
- The applicant has provided invoices for $2,000 for a new set of tyres and $558 for a car service. I am not satisfied that these items were caused by the respondent’s failure to comply with the guarantee of acceptable quality. These appear to be unrelated to the turbo issues, and are routine expenses associated with operating a motor vehicle.
- The applicant has claimed costs associated with the motor vehicle being in a disassembled state at Nissan Springwood. These costs include:
- (a)borrowing a vehicle from his son ($415.60);
- (b)purchasing a Mazda BT50 for use in his work as a cabinet maker ($6,000 plus registration, stamp duty and insurance);
- (c)registration ($405.30 per quarter), stamp duty ($800) and insurance ($72.25 per month) for the motor 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”. Mr Gamblen’s evidence was that the costs of Nissan Springwood returning the motor vehicle to service were approximately $2,200. I consider it appropriate to limit the damages sought in the preceding paragraph to $2,200, as the applicant could have returned the vehicle to service and mitigated his damages to this amount.
- Accordingly, the total amount of damages I have allowed is $2,650.
- The applicant has claimed the filing fee of $345.80 and the costs of Mr Gamblen’s report of $570.
- 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 largely unsuccessful in the proceedings. He persisted in seeking a refund from the manufacturer, despite being informed at an early juncture that this was not a remedy available against the manufacturer. He did not seek to join the supplier as was suggested to him. Further, the award of damages of $2,650 that I have allowed is such that the matter could otherwise have been dealt with by an adjudicator as a claim 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 costs of Mr Gamblen’s report are not a recoverable cost of the proceeding.
- The respondent is to pay to the applicant the sum of $2,650 within 28 days.
- Published Case Name:
Jason Lee Hammond v Nissan Motor Co (Australia) Pty Ltd
- Shortened Case Name:
Hammond v Nissan Motor Co (Australia) Pty Ltd
 QCAT 302
05 Aug 2020