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- Unreported Judgment
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Haisman v Drive (Aust) Pty Ltd  QCAT 44
john frederick haisman
drive (Aust) pty ltd
Motor vehicle matters
12 February 2020
10 February 2020
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
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
Campbell v Caravan & RV Central Pty Ltd t/as Avan New South Wales & FCA Australia Pty Ltd  NSWCATCD 90
Cary Boyd v Agrison Pty Ltd  VMC 23
Lam v Steve Jarvin Motors Pty Ltd  NSWCATAP 186
Medtel Pty Ltd v Courtney (2003) 130 FCR 182
Morphy v Beaufort Townsville Pty Ltd  VCAT 1520
Nesbit v Porter  2 NZLR 465
REASONS FOR DECISION
- On 5 September 2019, Mr Haisman (‘the applicant’) filed an Application – Motor Vehicle Dispute with the Tribunal. The named respondent is Drive (Aust) Pty Ltd (‘the respondent’).
- The applicant is the owner of a 2014 Ford Ranger (‘the motor vehicle’).
- The applicant purchased the motor vehicle from the respondent on 17 June 2019 for $45,145. The vehicle came with a one year warranty from the respondent.
- 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.
- 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.
Guarantee of acceptable quality
- 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
- (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.
- The Macquarie Dictionary defines the word ‘defect’ to mean ‘a fault’ or ‘imperfection’.
- 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’.
- In Morphy v Beaufort Townsville Pty Ltd  VCAT 1520 at , 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.
- In Campbell v Caravan & RV Central Pty Ltd t/as Avan New South Wales & FCA Australia Pty Ltd  NSWCATCD 90 at , 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).
- The applicant gave the following evidence, which was not disputed:
- (a)On 17 June 2019, the applicant collected the motor vehicle.
- (b)On 19 June 2019, the applicant returned the motor vehicle due to the failure of the right hand headlight. The repairs were completed on the same day.
- (c)On 3 July 2019, the applicant returned the motor vehicle due to the failure of the air conditioning. The repairs were completed on the same day.
- (d)On 10 July 2019, the applicant returned the motor vehicle due to black smoke being emitted from the exhaust. The repairs were not completed until 24 July 2019.
- (e)On 3 August 2019, the applicant again returned the motor vehicle due to black smoke being emitted from the exhaust. The repairs were not completed until 17 August 2019.
- (f)The motor vehicle has only travelled 4,000 km since the applicant collected the vehicle.
- I accept this evidence. Given these repairs occurred so soon after the applicant collected the vehicle, it is open to me to infer that the defects repaired were present at the date of supply. I do so infer.
- The applicant obtained a roadworthy certificate on 3 September 2019, which recorded that the vehicle was not roadworthy. The inspection identified the following issues which were present at the time of supply:
- (a)the wipers did not clean the windscreen effectively;
- (b)the wheels/tyres sat outside the guards; and
- (c)the tail lights were blacked out and the eye level stop light was obstructed.
- The respondent stated at the hearing that it had obtained its own roadworthy certificate, but this was not in evidence. I accept that the vehicle is currently not roadworthy, and that it was not roadworthy at the time of supply.
- The applicant also gave evidence that he told the respondent’s sales representative that he wanted a motor vehicle that, amongst other things, was reliable and could be used to travel considerable distances for work purposes such as from Brisbane to Sydney. He stated that the sales representative stated that the motor vehicle had all the characteristics that he was looking for, and had very few issues during the motor vehicle’s life span.
- Mr Haisman was not cross-examined on this evidence, and no evidence was led from the sales representative. In these circumstances, I accept the applicant’s evidence in relation to the representations made to him.
- 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 in the respondent’s possession for 30 days out of the first two months of the applicant’s ownership of the motor vehicle;
- (b)the motor vehicle being unroadworthy at the time of supply and remaining so;
- (c)the motor vehicle being approximately five years old with an odometer reading of 85,230 km as at the time of supply;
- (d)the purchase price of $45,145;
- (e)the representations that in effect the vehicle was reliable; and
- (f)the one year contractual warranty offered by the supplier,
would not regard the motor vehicle as free from defects and durable.
- For completeness, I have considered whether the defects relating to the lights and tyres ought reasonably to have been apparent to the applicant upon examination of the motor vehicle for the purposes of s 54(7) of the Australian Consumer Law. I accept the applicant’s submission that although the physical features of the motor vehicle were apparent to him, it was not reasonable to expect a layperson to be in a position to evaluate whether those features resulted in the motor vehicle being unroadworthy, particularly in circumstances where the supplier had provided a roadworthy certificate.
- As noted above, s 50A of the Fair Trading Act vests the Tribunal with jurisdiction in relation to motor vehicles in respect of certain actions under the Australian Consumer Law. Relevantly to the supply of goods, these include:
- (a)an action to recover from the supplier all reasonable costs incurred by the consumer in having the failure remedied, in circumstances where the failure is not a major failure and the supplier has not remedied it within a reasonable time (s 259(2)(b)(i));
- (b)an action to recover from the supplier compensation for any reduction in the value of the goods below the price paid by the consumer, in circumstances where the failure is a major failure and the consumer has not rejected the goods (s 259(3)(b)); and
- (c)an action to recover from the supplier damages for loss or damage suffered by the consumer where such loss or damage was reasonably foreseeable in respect of the failure (s 259(4)).
- Section 50A does not expressly establish a mechanism by which a consumer can enforce the supplier’s obligation to provide a refund arising under s 263(4)(a). This issue was considered by the New South Wales Civil and Administrative Tribunal in Lam v Steve Jarvin Motors Pty Ltd  NSWCATAP 186. The Appeal Panel, which included the President of the Tribunal, Wright J, stated (at ):
A contrary indication in Part 5-4 is that the legislature expressly stated that certain amounts could be recovered “by action” by the consumer in s 259(2)(b)(i), s 259(3)(b) and s 259(4) but did not do so in respect of the obligations to provide a refund or replacement in s 263(4). This might, in other circumstances, be sufficient to establish that the obligations under s 263(4) were not intended to be able to be enforced by action by the consumer. Nonetheless, given the nature, scope and purpose of the ACL NSW, the mischief against which it is directed, the nature of the conduct prescribed and the pre-existing law, the failure expressly to provide that the obligation under s 263(4) could be enforced by action should not be taken to exclude the implication of a right on the part of the consumer to bring proceedings to enforce the supplier’s duty to provide a refund or replacement.
- The orders that the Tribunal may make are set out in s 50A(2):
- (a)an order requiring a party to the proceeding to pay a stated amount to a stated person;
- (b)an order that a stated amount is not due or owing by the applicant to a stated person, or by any party to the proceeding to the applicant;
- (c)an order requiring a party to the proceeding, other than the applicant, to perform work to rectify a defect in goods or services to which the claim relates;
- (d)an order requiring a party to the proceeding to return goods that relate to the claim and are in the party’s possession or control to a stated person;
- (e)an order combining 2 or more orders mentioned in paragraphs (a), (b), (c) and (d).
- I respectfully adopt the reasoning in Lam, and find 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). For completeness, I note that the orders available under s 50A(2) would not extend to an order requiring the supplier to deliver to the consumer goods of the same type, or of similar value as the rejected goods, as described in s 263(4)(b).
- 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.
- 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  VMC 23 at , 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.
- 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 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.
- 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.
- In Nesbit v Porter  2 NZLR 465 at , 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.
- In Morphy v Beaufort Townsville Pty Ltd  VCAT 1520 at , the Victorian Civil and Administrative Tribunal held that, while the rejection period did not necessarily correlate with the manufacturer’s warranty period, the warranty period was relevant in considering whether the rejection period had expired:
[A]t the time of the rejection, the motor car remained under a three year/100,000 kilometre manufacturer’s warranty. In determining if the rejection period has ended, the Tribunal is not bound by the warranty period given by an express manufacturer’s warranty. Nevertheless, the express warranty period is relevant evidence of the expected period of largely problem-free use of goods. In this case, all the failures have occurred shortly within the manufacturer’s warranty period and the rejection was made well before the expiration of that period.
- Based on the evidence before me, I find that the extent of the failures with the motor vehicle only became apparent after several repeated failures. These failures all occurred shortly after the purchase of the motor vehicle, and well within the respondent’s contractual warranty period. Indeed, the application to the Tribunal seeking a refund was lodged less than three months after the supply of the motor vehicle. In these circumstances, I am satisfied that the applicant rejected the motor vehicle within the rejection period.
- 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).
- 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 $45,145 within 28 days of the date of these orders.
- Published Case Name:
Haisman v Drive (Aust) Pty Ltd
- Shortened Case Name:
Haisman v Drive (Aust) Pty Ltd
 QCAT 44
12 Feb 2020