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Rigby v LDV Automotive Pty Ltd QCAT 316
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Rigby v LDV Automotive Pty Ltd & Anor  QCAT 316
ldv automotive pty ltd
VON BIBRA FERRY RD PTY LTD AS TRUSTEE FOR VON BIBRA AUTO VILLAGE TRUST
Motor vehicle matters
15 September 2021
14 September 2021
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, s 274
Competition and Consumer Act 2010 (Cth), Schedule 2
Fair Trading Act 1989 (Qld), s 50A
Treasury Laws Amendment (2020 Measures No. 6) Act 2020 (Cth)
ACH Computing Pty Ltd v Austral Pty Ltd trading as Brisbane City Jaguar Land Rover  QCAT 176
Crawford v Sunco Motors Pty Ltd  QCAT 183
Foley v Westco Cairns Pty Ltd  QCAT 345
Haisman v Drive (Aust) Pty Ltd  QCAT 44
Kablar Financial Services Pty Ltd v LSH Auto (Brisbane) Pty Ltd trading as Mercedes-Benz Brisbane  QCAT 346
Laceur v Townsville Auto Group Pty Ltd & Anor  QCAT 247
Lawless v Austral Pty Ltd trading as Brisbane City Land Rover  QCAT 297
Medtel Pty Ltd v Courtney (2003) 130 FCR 182
Morphy v Beaufort Townsville Pty Ltd  VCAT 1520
Sullivan & Anor v James Frizelle’s Automotive Group Pty Ltd  QCAT 49
REASONS FOR DECISION
- On 16 December 2020, Timothy Rigby (‘the applicant’) filed an Application – Motor Vehicle Dispute with the Tribunal. The respondents are LDV Automotive Pty Ltd (‘the first respondent’) and Von Bibra Ferry Rd Pty Ltd as trustee for the Von Birba Auto Village Trust (‘the second respondent’).
- The applicant is the owner of a 2018 LDV T60 (‘the motor vehicle’).
- The applicant purchased the motor vehicle from the second respondent on 30 November 2018 for $38,415. The contract included ‘Envirokote U/body Rust Prot’ at a cost of $1,445.45.
- 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
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’.
- On 17 March 2021, the Tribunal directed the appointment of an assessor pursuant to Chapter 2, Part 6, Division 7 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld).
- The assessor provided a report dated 21 May 2021. Relevantly, the assessor’s report stated:
Did you identify any defect or defects currently in existence? If so please list each defect separately
Surface rust in numerous areas of the vehicle inside doors, under carriage of vehicle, in engine bay of vehicle, on LDV supplied and fitted aftermarket accessories, on numerous nuts and bolts in vehicle (please refer to photos). Has severe rust and oxidization in and around brake calipers, tailshaft, piping inside engine bay, roll bar in back tray/tub.
In relation to the reverse camera, upon first inspection by the assessor the camera was operational. However the second time (after ecu error codes were cleared) the reverse camera was also showing an elevated view of the vehicle. In relation to the blind spot indicators they were not operational at first inspection ie the amber lights were not glowing on mirror. Upon second inspection (after ecu codes were cleared) and assessor went through the on board computer and physically turned them off and then back on they then started working.
What is the likely cause of the defect:
The likely cause of the defects of the rust complaint most likely be poor quality of materials especially on the roll bar and nudge bar on back of tub/tray, environmental exposure - ie proximity to the ocean or possible exposure to salt water/air directly or indirectly even unknowingly. Poor preparation by insurance repairer prior to new tray/tub being fitted. The electrical defects could be in the software of the ECU or the hardware itself ie sensors, wiring etc
Was the defect likely to have been present at the date of the purchase of the vehicle (eg a latent defect or part lacking durability)
It is very hard to answer this question as the vehicle was purchased brand new with 71kms and according to the paperwork provided the km’s indicate 16220kms on Von Bibra invoices and paperwork. The vehicle was involved in an accident causing rear end damage to the tub/tray. A second hand tub/tray was supplied by the panel shop and fitted by the insurance company. Even if they had waited for an tub to become available from a new car that LDV had fitted an alloy tray to it would still be classed as second hand. However the repairs carried out by the approved repairer do not seem to be of an acceptable nature due to lack of preparation prior to installing. Although the repairers did not replace a part that already had surface rust and a major complaint of the Applicant the repairer could have or should have prepared and painted the part prior to installing the tray/tub. This was a complaint of the Applicant prior to the tray/tub replacement. There are also no notes to state whether the second hand tub/tray required painting prior to installation. Dealer states that the corrosion relates to a third party repairer but the rust was there prior to the accident.
What further investigations and/or repairs would need to be taken to rectify any currently existing defects and how long would these steps likely to take?
Unfortunately, this question cannot, as above, be answered directly as LDV and LDV only have the appropriate software and/or hardware to rectify the electrical faults. The independent repair industry still has not been given access to this type of information to date and the technology used is still very new to the industry. By the sounds of the ongoing problems since 2020 the fact that LDV have not been able to rectify the vehicles faults it could be an on-going never-ending situation.
In relation to the rust defects and complaints if the vehicle had been rust proofed to the extent that the customer had initially sought it may have mitigated the extent of rust due to the environment the vehicle is driven and parked in. there also does not seem to be any evidence of further rust proofing carried out under the new tray/tub.
There appears to be unusual amount surface of rust in all unprotected areas of the vehicle. Customer paid $1445.45 at time of purchase for rust protection. Envirokote Under Body Rust Protection has a national life time warranty (according to their website). It claims to protect the vehicle from window level down. Nothing else on their website stating that a starting point for protection is the underbody then their premium coating would mean the rest of the vehicle.
The chrome nudge bar and roll bar are showing signs of rust bleeding through to the surface of the chrome. Rust proofing does not prevent this from occurring. The parts appear to be of poor quality and could stem from the parts having only a thin layer of chrome applied from factory. Polishing the chrome will only be a band aid fix as the rust is bleeding through the chrome itself. A replacement of the parts, if same brand and quality, will not rectify. Possibly having the existing parts re-chromed will have a longer lasting effect.
- The applicant gave the following evidence:
- (a)The applicant has returned the motor vehicle for warranty repairs over 16 times, with some issues still ongoing. Some of the repairs have been unsatisfactory.
- (b)The applicant made it clear at the time of purchase that he worked at a surf club, and wanted top of the range rust protection. He was never advised that this needed to be carried out every 12 months, or that the protection was only applied to the underside of the motor vehicle.
- (c)Rust was found on the body of the motor vehicle in February 2020, one year and two months after he purchased the motor vehicle.
- (d)The second respondent arranged for an initial estimate of rust repairs to be obtained from Miami Smash Repairs. The quote was for $49,242.33, which I note was more than the cost of the motor vehicle. The quote noted: ‘Although we can replace panels that have corrosion it appears that it is coming from between panels and could be due to insufficient steel protection used when joining/folding/welding therefore any new panels supplied could do the same thing as we cannot separate these, rust is also coming through on some parts in the middle of panels where there are no joints, this suggests contaminated steel prior to painting’.
- (e)The second respondent arranged for a subsequent estimate of rust repairs to be obtained from Beta Body Repairs. The quote was for $12,155.
- (f)The second respondent arranged for a third quote by Economy Crash Repairs. The quote was for roughly $29,000.
- (g)In the meantime, the motor vehicle was involved in a hit and run accident. Insurance repairs were completed by Sommerville Smash Repairs. The repairs involved the replacement of the tray on the motor vehicle. The repairer advised: ‘Regarding the Rear Tray we use a company called Ute Backs who purchase their trays directly from dealers where the Dealer remove these for customers when they upgrade to a better tray body. These Tray Bodies are usually kept at the Dealership and Ute Backs purchase these directly off the dealer. Unfortunately they are classified as USED but they haven’t been fitted to another vehicle.’
- (h)The rust repairs were undertaken by Economy Crash Repairs. The rust repairs took six weeks. Repairs were not carried out on the tray as it was considered to be ‘second hand’.
- (i)The quotes from Miami Smash Repairs and Beta Body Repairs included repairs to the original tray.
- (j)The applicant has also experienced ongoing problems with the blind spot indicator and the reverse camera. These issues have never been satisfactorily repaired.
- The first respondent gave the following evidence:
- (a)The first respondent detailed that a number of concerns raised by the applicant were rectified by the second respondent under the motor vehicle’s new car warranty.
- (b)The first respondent highlighted the passages of the assessor’s report relating to environmental exposure and poor preparation by the insurance repairer. It noted that these were outside of the manufacturer’s control.
- (c)The first respondent also stated that rust protection must be applied every 12 months, and that the applicant did not meet the terms of this.
- (d)The first respondent also stated that the applicant’s work at a surf club only came to light in his statement.
- The second respondent did not file any evidence.
- I accept the applicant’s evidence that he made it clear at the time of purchase that he worked at a surf club. There is no evidence from the second respondent to contradict this. While the first respondent may have been unaware of this prior to the applicant filing his statement, the motor vehicle was purchased by applicant from the second respondent and not from the first respondent.
- I do not accept that the applicant was informed that rust protection must be applied every 12 months. There is no mention of this on the contract of purchase, which included rust protection in the purchase price. Neither the first respondent nor second respondent provided any documentation informing the applicant that this was required to be re-applied every 12 months. As noted above, the second respondent has not filed any evidence at all, and in particular filed no evidence that it informed the applicant that rust protection was required to be re-applied every 12 months.
- I do not accept that the applicant’s work at a surf club places him in a different position to anyone else who lives and works in close proximity to the beach. In the Gold Coast, where the applicant lives, this would include many thousands of residents. There is no evidence from the second respondent that it advised the applicant that the motor vehicle was unsuitable for use in coastal areas. Indeed, the second respondent’s place of business is itself near the coast at Southport.
- I accept the evidence provided by the assessor that the operation of the reversing camera and the blind spot indicator work only intermittently. I accept that these may be ‘on-going never-ending’ issues.
- I also accept the evidence provided by the assessor that the motor vehicle is affected by surface rust in numerous areas. I accept that this is likely due to the poor quality of the materials used. While environment exposure may have exacerbated the problems caused by poor quality material, I have found that the applicant’s position in this regard does not differ from the many thousands of people residing on the Gold Coast.
- I accept that neither the first respondent nor the second respondent supplied the replacement tray which was installed by the insurance repairer. I also accept that the insurance repairer did not carry out appropriate preparation prior to installing. However, as the assessor pointed out, ‘the rust was there prior to the accident’, and I note that repairs to the original tray were included in the quotes from Miami Smash Repairs and Beta Body Repairs.
- I do not accept that anything turns on the replacement tray being ‘second hand’. As set out in the information provided by Sommerville Smash Repairs, the tray had not been fitted to another vehicle. As the assessor also pointed out, a tray from a new car that the first respondent had fitted an alloy tray to would still be classed as second hand.
- 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 ongoing problems with the reversing camera and the blind spot indicator;
- (b)the extensive surface rust due to the use of poor quality material;
- (c)the motor vehicle having been returned for warranty repairs over 16 times;
- (d)the purchase price of $38,415; and
- (e)the motor vehicle being new,
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:
(1) A failure to comply with a guarantee referred to in section 259(1)(b) that applies to a supply of goods is a major failure if:
(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.
- 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 reversing camera, the blind spot detector and extensive surface rust are such that a reasonable consumer fully acquainted with the nature and extent of the failure, would not have acquired the motor vehicle. In particular, a reasonable consumer would not expect to have to return a new vehicle 16 times only for the defects to potentially end up being of an ‘on-going never-ending’ nature.
- I note that this conclusion is consistent with that reached by the Tribunal in many other cases, including Haisman v Drive (Aust) Pty Ltd  QCAT 44, ACH Computing Pty Ltd v Austral Pty Ltd trading as Brisbane City Jaguar Land Rover  QCAT 176, Foley v Westco Cairns Pty Ltd  QCAT 345, Kablar Financial Services Pty Ltd v LSH Auto (Brisbane) Pty Ltd trading as Mercedes-Benz Brisbane  QCAT 346, Sullivan & Anor v James Frizelle’s Automotive Group Pty Ltd  QCAT 49, Crawford v Sunco Motors Pty Ltd  QCAT 183, Laceur v Townsville Auto Group Pty Ltd & Anor  QCAT 247 and Lawless v Austral Pty Ltd trading as Brisbane City Land Rover  QCAT 297.
- Alternatively, s 259(2) of the Australian Consumer Law provides:
- (2)If the failure to comply with the guarantee can be remedied and is not a major failure:
- (a)the consumer may require the supplier to remedy the failure within a reasonable time; or
- (b)if such a requirement is made of the supplier but the supplier refuses or fails to comply with the requirement, or fails to comply with the requirement within a reasonable time—the consumer may:
- (i)otherwise have the failure remedied and, by action against the supplier, recover all reasonable costs incurred by the consumer in having the failure so remedied; or
- (ii)subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection.
- I find that the defects relating to the reversing camera, the blind spot detector and surface rust, which were still continuing after two years, were not remedied within a reasonable time. Even if I am wrong in concluding that the failures constitute a major failure, the applicant would still have a right to reject the motor vehicle under s 259(2)(b)(ii).
- 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 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.
- I have treated the filing of the application with the Tribunal on 16 December 2020, in which the applicant sought a refund, as a rejection of the motor vehicle. The second respondent was joined to the proceedings on 17 February 2021. The applicant’s rejection communicated to the first respondent and the second respondent by service of the application.
- The applicant provided evidence that he waited over two years before rejecting the motor vehicle because he became concerned that the faults were never going to end and that it would be his responsibility to get the issues fixed once the warranty ended.
- In the context of the motor vehicle having a five-year warranty, I am satisfied that the applicant rejected the motor vehicle within the rejection period.
- In Haisman v Drive (Aust) Pty Ltd  QCAT 44 at , 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).
- 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 the application, the applicant made claims for interest on his loan with St George Bank, used to finance the purchase of the motor vehicle. However, the applicant provided only a copy of the loan agreement and not any subsequent accounts which showed the amounts he has actually paid on the loan. In these circumstances, I am unable to quantify any damages suffered by the applicant in relation to the financing of the motor vehicle
- For completeness, I note that the second respondent has not sought any relief against the first respondent pursuant to s 274 of the Australian Consumer Law.
- The orders of the Tribunal are:
- The applicant is required to return the motor vehicle the subject of these proceedings to the second respondent within 14 days of the date of these orders.
- The second respondent is required to pay to the applicant the amount of $38,415 within 28 days of the date of these orders.
- Published Case Name:
Rigby v LDV Automotive Pty Ltd & Anor
- Shortened Case Name:
Rigby v LDV Automotive Pty Ltd
 QCAT 316
15 Sep 2021