Foley v Westco Cairns Pty Ltd
[2020] QCAT 345
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- Unreported Judgment
- Foley v Westco Cairns Pty Ltd[2020] QCAT 345
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Foley v Westco Cairns Pty Ltd[2020] QCAT 345
Foley v Westco Cairns Pty Ltd[2020] QCAT 345
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
CITATION: | Foley v Westco Cairns Pty Ltd [2020] QCAT 345 |
PARTIES: | timothy gerald foley (applicant) v westco cairns pty ltd (respondent) |
APPLICATION NO/S: | MVL021-19 |
MATTER TYPE: | Motor vehicle matters |
DELIVERED ON: | 9 September 2020 |
HEARING DATE: | 1 September 2020 |
HEARD AT: | Brisbane |
DECISION OF: | Member Cranwell |
ORDERS: |
|
CATCHWORDS: | 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 Competition and Consumer Act 2010 (Cth), Schedule 2 – Australian Consumer Law s 54, s 259, s 260, s 262, s 263 Fair Trading Act 1989 (Qld), s 50A Campbell v Caravan & RV Central Pty Ltd t/as Avan New South Wales & FCA Australia Pty Ltd [2016] NSWCATCD 90 Cary Boyd v Agrison Pty Ltd [2014] VMC 23 Haisman v Drive (Aust) Pty Ltd [2020] QCAT 44 Medtel Pty Ltd v Courtney (2003) 130 FCR 182 Morphy v Beaufort Townsville Pty Ltd [2018] VCAT 1520 |
APPEARANCES & REPRESENTATION: |
|
Applicant: | Self-represented |
Respondent: | Self-represented |
REASONS FOR DECISION
- [1]On 24 September 2019, Mr Foley (‘the applicant’) filed an Application – Motor Vehicle Dispute with the Tribunal. The named respondent is Westco Cairns Pty Ltd (‘the respondent’).
- [2]The applicant is the owner of a 2016 Volkswagen Passat (‘the motor vehicle’).
- [3]The applicant purchased the motor vehicle from the respondent on 27 March 2017 for $29,990.
- [4]The applicant seeks relief under the Australian Consumer Law, which is Schedule 2 to the Competition and Consumer Act 2010 (Cth). The relief sought by the applicant is a refund.
- [5]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.
- [6]Pursuant to s 3(1)(b) of the Australian Consumer Law, a person is taken to have acquired goods as a consumer if ‘the goods were of a kind ordinarily acquired for personal, domestic or household use or consumption’. This includes the applicant’s motor vehicle.
Guarantee of acceptable quality
- [7]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’.
- [8]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 [64] and [70]. 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.
- [9]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
(e) durable;
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.
- [10]The Macquarie Dictionary defines the word ‘defect’ to mean ‘a fault’ or ‘imperfection’.
- [11]The Macquarie Dictionary defines ‘durable’ as ‘having the quality of lasting or enduring of or relating to goods which will be good for some time, as opposed to those intended to be used or consumed immediately’.
- [12]In Morphy v Beaufort Townsville Pty Ltd [2018] VCAT 1520 at [72], the Victorian Civil and Administrative Tribunal stated:
[T]he context of the section clearly requires that the question of durability be determined by having regard to how long a ‘reasonable consumer’ would expect the goods to last, taking into account the price paid, the nature of the goods and the representations made about the goods.
- [13]In Campbell v Caravan & RV Central Pty Ltd t/as Avan New South Wales & FCA Australia Pty Ltd [2016] NSWCATCD 90 at [57], the New South Wales Civil and Administrative Tribunal stated:
A reasonable consumer would also be entitled to expect that such a high cost item would be durable, being capable of safe and effective use over a number of years (or at least many thousands of kilometres).
Evidence
- [14]The applicant gave the following evidence:
- (a)On 27 March 2017, the applicant purchased the motor vehicle. The vehicle had an odometer reading of 18 km.
- (b)On 25 July 2017, the applicant returned the motor vehicle to the respondent after the “low coolant” warning light came on. The respondent advised that an airlock was a possible cause. The coolant was topped up.
- (c)On 14 September 2017, the applicant returned the motor vehicle to the respondent. The coolant was topped up.
- (d)On 19 September 2017, the applicant returned the motor vehicle to the respondent for a road test. No coolant loss was noted.
- (e)On 24 October 2017, the applicant returned the motor vehicle to the respondent. The coolant housing and water pump were replaced.
- (f)On 14 November 2017, the applicant returned the motor vehicle to the respondent. The coolant regulator housing was replaced. The vehicle was returned to the applicant on the following day.
- (g)On 12 December 2017, the applicant returned the motor vehicle to the respondent. No problem was detected, but the applicant advised that an airlock was a possible cause.
- (h)On 27 December 2017, the applicant returned the motor vehicle to the respondent. The right-hand front bearing was replaced.
- (i)On 24 January 2018, the applicant returned the motor vehicle to the respondent. The coolant reservoir was replaced due to a faulty sensor. The clutch was also replaced. An oil leak was found to be due to a perished seal. The vehicle was returned to the applicant after seven weeks.
- (j)On 11 October 2018, the applicant returned the motor vehicle to the respondent with a complaint that the vehicle was intermittently not starting. The vehicle was returned to the respondent for further investigations between 12 and 16 October 2018.
- (k)On 20 November 2018, the applicant returned the vehicle to the respondent. The megatronic unit was replaced. The vehicle was returned to the applicant after 11 days.
- (l)On 28 August 2019, 2 September 2019 and 6 September 2019, the applicant returned the motor vehicle to the respondent after error messages were displayed. No faults were found.
- (a)
- [15]I accept this evidence, noting:
- (a)the applicant was not challenged on this evidence in cross-examination;
- (b)the applicant’s evidence is supported by service invoices issued by the respondent;
- (c)the respondent’s response to a complaint made to the Office of Fair Trading confirmed that the motor vehicle has been returned on a number of occasions.
- (a)
- [16]The applicant stated in his application that the vehicle was been returned to the respondent on 16 occasions, and was with the respondent for 58 days in its first year and 16 days in its second year.
- [17]At the hearing, I asked Mr Billy Ehrke, who appeared for the respondent, whether he agreed with those figures. Mr Ehrke stated that he had not performed the calculations.
- [18]On the evidence available to me, I have been able to identify 14 occasions in which the motor vehicle was returned to the respondent. On my calculations, the vehicle was with the respondent for 57 days in its first year, and 16 days in its second year. I find accordingly.
- [19]The applicant gave evidence that he sought a refund from the respondent in March 2018. Mr Ehrke confirmed this was the case. I find accordingly.
- [20]The respondent’s evidence was that no fault had been found with the coolant system. Details were given of attempts made by the respondent to conduct further investigations of the motor vehicle after the proceedings were commenced. In this regard, QCAT Practice Direction No. 2 of 2019: Motor Vehicle List provides at paragraph 13 that the applicant may be required to give access to the motor vehicle by an expert engaged by the respondent. I note that no application was made by the respondent for directions requiring that the applicant provide access to the motor vehicle for the purposes of such investigations.
- [21]For completeness, I note that the applicant provided a tax invoice from Pacific Radiator Services dated 4 January 2019 which stated:
THE COOLING SYSTEM HAS BEEN TEST COLD. ENGINE WAS STARTED AND RUN TO OPERATING TEMPERATURE UNDER PRESSURE AND WE COULD NOT FIND ANY EXTERNAL LEAKS. IF COOLING SYSTEM IS LOOSING (sic) COOLANT OVER A PERIOD OF TIME WE BELIEVE THELEAK TO BE INTERNAL IN THE ENGINE.
- [22]The applicant did not make anyone from Pacific Radiators available for cross-examination. In these circumstances, I place no weight on the material from Pacific Radiators.
- [23]I find that the motor vehicle had a fault with the cooling system of unknown origin. I base my finding that the vehicle had a fault on the fact that the coolant housing was replaced on two occasions, the coolant reservoir was replaced due to a faulty sensor, the water pump was replaced and the coolant level topped up on a number of occasions. Had there been no fault, it seems to me that there would have been no need to replace the coolant housing, the water pump or the reservoir. The absence of evidence of an underlying cause of the fault does not equate to the absence of a fault.
- [24]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:
- (a)the presence of defects which resulted in the motor vehicle being returned to the respondent on 14 occasions, and remaining in the respondent’s possession for 57 days in the first year of the applicant’s ownership of the vehicle and 16 days in the second year;
- (b)the purchase price of $29,990; and
- (c)the motor vehicle being brand new,
- (a)
would not regard the motor vehicle as free from defects and durable.
Remedies
- [25]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.
- [26]It has been held that an accumulation of individually minor defects can be aggregated to amount to a major failure giving rise to a right to reject the goods. In Cary Boyd v Agrison Pty Ltd [2014] VMC 23 at [51], the Court held that:
[D]espite the use of ‘a’, to suggest the singular, ‘a major failure’ might be constituted by a series of specific and individual defects which taken as a whole constitute one major failure. I also agree with this interpretation of s 260 of the ACL.
- [27]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 coolant system, the bearing, the clutch, the perished oil seal and the megatronic unit, taken together, are such that a reasonable consumer fully acquainted with the nature and extent of the failure, would not have acquired the motor vehicle.
- [28]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.
- [29]In Nesbit v Porter [2000] 2 NZLR 465 at [39], 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.
- [30]Based on the evidence before me, I find that the extent of the failures with the motor vehicle did not become fully apparent until after the motor vehicle was returned to and remained in the respondent’s possession for a seven week period between 24 January 2018 and 13 March 2018. The applicant did not then delay seeking a refund in March 2018.
- [31]In these circumstances, I am satisfied that the applicant rejected the motor vehicle within the rejection period.
- [32]In Haisman v Drive (Aust) Pty Ltd [2020] QCAT 44 at [24], 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).
Costs
- [33]The applicant has claimed the filing fee of $345.80 and the costs of the Pacific Radiators report, ASIC search and printing expenses.
- [34]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.
- [35]The applicant has been successful in the proceedings. In these circumstances, I consider that it is in the interests of justice to order the respondent to pay the filing fee of $345.80. The other costs sought by the applicant are not recoverable.
Orders
- [36]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 $29,990 within 28 days of the date of these orders.
- The respondent is required to pay the applicant’s costs of $345.80 within 28 days of these orders.