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- Unreported Judgment
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Sullivan & Anor v James Frizelle’s Automotive Group Pty Ltd  QCAT 49
james frizelle’s automotive group pty ltd
Motor vehicle matters
9 February 2021
On the papers
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
Haisman v Drive (Aust) Pty Ltd  QCAT 44
Medtel Pty Ltd v Courtney (2003) 130 FCR 182
Morphy v Beaufort Townsville Pty Ltd  VCAT 1520
REASONS FOR DECISION
- On 22 May 2020, Ms Sullivan and Mr Bozkewycz (‘the applicants’) filed an Application – Motor Vehicle Dispute with the Tribunal. The respondent is James Frizelle’s Automotive Group Pty Ltd (‘the respondent’).
- The applicants are the owners of a 2019 Land Rover Discovery (‘the motor vehicle’).
- The applicants purchased the motor vehicle from the respondent on 23 September 2019 for $69,990.
- The applicants seek relief under the Australian Consumer Law, which is Schedule 2 to the Competition and Consumer Act 2010 (Cth). The relief sought by the applicants is a refund plus the filing fee.
- 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:
- 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 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).
- There are no factual issues in dispute between the parties. Relevantly, the parties agree that:
- (a)The applicants took delivery of the motor vehicle on 26 September 2019.
- (b)The motor vehicle’s gearbox failed on the day of delivery. This issue resulted in the motor vehicle being off the road for approximately three weeks. The repairs included replacing the transmission pressure sensor and mechatronics.
- (c)In October 2019, the tailgate button on the motor vehicle failed. A service record dated 13 November 2019 indicated that the issue was rectified.
- (d)In November 2019, the applicants experienced intermittent failure of the electronic brake. The gearshift paddle also became loose. A service record dated 10 February 2020 indicated that the motor vehicle had a faulty starter motor. A replacement gearshift paddle was also ordered.
- (e)In January/February 2020, the sunglasses holder on the motor vehicle jammed. In February 2020, there was a fault with the cooling fan. In March 2020, the windscreen washer tank leaked. The motor vehicle also developed a ‘clunk’ in the suspension. A service record dated 30 March 2020 indicated that the coolant pump was replaced and windscreen washer tank leak was repaired. The gearshift paddles were also replaced on this occasion. In relation to the ‘clunk’ in the suspension, the respondent was unable to replicate this concern.
- (f)On 23 March 2020, the applicants purported to reject the motor vehicle and request a refund from the respondent.
- The applicants calculated that they had approximately 1.5 faults per month, which they equated to “a fault per tank of fuel”.
- 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 four occasions in the first six months of the applicants’ ownership;
- (b)the purchase price of $69,990; and
- (c)the motor vehicle being brand new,
would not regard the motor vehicle as free from defects and durable.
- The issue in dispute between the parties is whether the defects set out above amount to 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:
- 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
- (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:
- 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
- (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.
- I find the series of defects set out above, 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. I emphasise that my finding is based on the series of defects taken together. Not all the defects, and in particular the sunglasses holder jamming, would in themselves have individually amounted to a major failure. However, it remains the case that the motor vehicle experienced defects at the rate of approximately 1.5 defects per month, which required:
- (a)a replacement transmission pressure sensor and mechatronics;
- (b)a replacement starter motor;
- (c)a replacement coolant pump;
- (d)replacement gearshift paddles;
- (e)repairs to the tailgate button; and
- (f)repairs to a leak in the windscreen washer tank.
- These repairs resulted in the motor vehicle being off the road for several weeks within a short period of time after purchase.
- 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:
- 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:
- the type of goods; and
- the use to which a consumer is likely to put them; and
- the length of time for which it is reasonable for them to be used; and
- 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.
- The applicants did not delay in seeking a refund, which they did on 23 March 2020. They did this after it became apparent that the motor vehicle had an ongoing series of problems. In these circumstances, I am satisfied that the applicants 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 applicants have 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. The applicants have claimed that the motor vehicle cannot be safely returned by them to the respondent for the purposes of s 263(2)(b)(i), but offered no expert evidence in support of this particular claim. Upon the return of the motor vehicle, the applicants will be entitled to a refund pursuant to s 263(4).
- 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.
- While the applicants have been successful in the proceedings, it would be remiss of me to overlook the manner in which the respondent conducted itself in the proceedings. The respondent did not dispute the facts in issue, thereby avoiding the need for a lengthy hearing and the delays associated with such a hearing. 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 orders of the Tribunal are:
- The applicants are 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 applicants the amount of $69,990 within 28 days of the date of these orders.
- Published Case Name:
Sullivan & Anor v James Frizelle's Automotive Group Pty Ltd
- Shortened Case Name:
Sullivan v James Frizelle's Automotive Group Pty Ltd
 QCAT 49
09 Feb 2021