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Jenkins v Aria Motors Pty Ltd[2022] QCAT 153

Jenkins v Aria Motors Pty Ltd[2022] QCAT 153

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Jenkins v Aria Motors Pty Ltd [2022] QCAT 153

PARTIES:

BADEN JENKINS

(applicant)

v

ARIA MOTORS PTY LTD

(respondent)

APPLICATION NO/S:

MVL191-21

MATTER TYPE:

Other minor civil dispute matters

DELIVERED ON:

29 April 2022

HEARING DATE:

21 April 2022

HEARD AT:

Brisbane

DECISION OF:

Adjudicator Lember

ORDERS:

  1. The respondent’s application for an adjournment is refused.
  2. Aria Motors Pty Ltd must collect the motor vehicle the subject of these proceedings from Baden Jenkins within 28 days of the date of these orders.
  3. Aria Motors Pty Ltd must pay Baden Jenkins the sum of $23,586.31 within 28 days of the date of these 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 or minor failure – whether vehicle rejected within rejection period - whether consumer entitled to refund of purchase price and compensation for costs associated with purchase

Competition and Consumer Act 2010 (Cth) s 54(1), s 54(2), s 54(3), s 260, s 267(4), schedule 2

Fair Trading Act 1989 (Qld) s 50A

Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 102, schedule 3

Belomark Pty Ltd v Robinson (No 2) [2020] QCATA 112

Carlill v Carbolic Smoke Ball Company [1893] Q.B. 256

Cary Boyd v Agrison Pty Ltd [2014] VMC 23

Clarke v Cascade Pools (Qld) Pty Ltd [2010] QCAT 323

Creek v Raine & Horne Real Estate Mossman [2011] QCATA 226

Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2012] NSWCA 184

Cox v J & M Phelan trading as Carrara Carmart [2020] QCAT 190

Equuscorp Pty Ltd v Glengallen Investments Pty Ltd [2004] 218 CLR 483

Hielbut, Symons & Co v Buckleton [1913] AC 30

Hochster v De la Tour (1853) 2 E & B 678

Laurie v Carroll (1858) 98 CLR 310

Oscar Chess Ltd v Williams [1957] 1 All ER 325

Van den Esschert v Chappell [1960] WAR 114

APPEARANCES &

REPRESENTATION:

 

Applicant:

Self-represented

Respondent:

Self-represented by director, Hooman Fartash

REASONS FOR DECISION

  1. [1]
    Mr Jenkins, an electrician who lives in North Queensland, purchased the vehicle the subject of this dispute from the respondent’s car dealership in Brisbane. 
  2. [2]
    The advertisement for the vehicle described it, among other things as:

Used 2012 Toyota Hilux Utility

153,000 kilometres

Real Wheel Drive

  1. [3]
    The advertisement goes on to say that “this vehicle has been well looked after”.
  2. [4]
    The vehicle had been detailed and, on its surface, was in a “tidy” condition when advertised for sale and when possession was given to the applicant, according to Mr Fartash, and this was not disputed by Mr Jenkins.
  3. [5]
    Mr Jenkins flew to Brisbane, inspected the vehicle “briefly” – although Mr Fartash, who wasn’t present for the inspection, said he “looked at it crazy”, from which I infer he means that Mr Jenkins inspected it thoroughly – and signed the purchase contract on 22 July 2021, collecting the vehicle on 24 July 2021. 
  4. [6]
    On the ten-hour drive home, Mr Jenkins observed that the horn wasn’t working, and upon removing the fuse panel for closer inspection he saw mud, sand, sticks and water concealed within the body of the vehicle.
  5. [7]
    Therefore, Mr Jenkins took the vehicle for a safety inspection to an Approved Inspection Station examiner, Mr Pell, who, on 26 July 2021 failed the vehicle on the following grounds:
    1. (a)
      Warning Device (Horn) - A warning device is not fitted or operational and the tone is not of a single pitch.
    2. (b)
      Wheels/Rims – Wheels are not of an approved type and construction.
    3. (c)
      Tyres – Tyre load ratings are less than the minimum ratings specified originally by the vehicle/trailer manufacturer.
  6. [8]
    Importantly, the following comments also formed part of the examiner’s report (my emphasis added):

Inspection of vehicle condition shows this vehicle has been submerged to at least the fuel above the fuel tank as the dried dirt is on top of it is approximately 30 millimetres thick. There is more build-up of some same debris inside strengthening webs, gussets and the many brackets that make up the chassis rails.

The dirt inside the car and inside sill panels and doors is in areas 6 millimetres thick along with a water line inside the door. This is where even dust finds it hard to penetrate but very dirty water along with grass and small debris, sticks etc have been forced in under panels and interior trim.

Looking under the carpet of the floor mat the soundproofing is still soaked all the way through to the other side with pools of water still sitting on the floor. Rust has started on quite a few components along with seek frame, brackets and floor components in the interior of the vehicle.

The wiring inside the vehicle has been compromised by the water which in the future will play havoc on the electronics systems of the vehicle.

It appears the vehicle has been detailed to a point of disguising the water intrusion

  1. [9]
    The applicant tendered several photographs which support the examiner’s observations of water, rust, mud, and debris identified in his report.
  2. [10]
    By an application – motor vehicle dispute filed 22 November 2021, Mr Jenkins seeks an order that the respondent pay him $23,635 being a refund of the purchase price of the vehicle (including on-road costs) of $22,990, compensation for his travel to and from Brisbane to collect the vehicle ($500), as well as the costs of the vehicle inspection ($110) and REVS check ($35).  He has paid a filing fee of $358.
  3. [11]
    The respondent is prepared to repair the horn and replace the tyres under warranty, but otherwise asks the tribunal to dismiss the application on the basis that the applicant purchased the vehicle in an “as is” condition after inspecting it, that the vehicle is not defective – and in fact is in a good condition for its age, and that the applicant has simply had a “change of mind” in relation to the purchase.

The laws applying to the dispute

  1. [12]
    Section 50A of the Fair Trading Act 1989 (Qld) vests the tribunal with jurisdiction to hear certain motor vehicle disputes under the Australian Consumer Law, contained in schedule 2 to the Competition and Consumer Act 2010 (Cth) (“Australian Consumer Law”). 
  2. [13]
    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’. 
  3. [14]
    The time at which goods are to be of acceptable quality is the time at which the goods are supplied to the consumer.[1]
  4. [15]
    Under section 54(2), goods are of acceptable quality if they are:
    1. (a)
      fit for all the purposes for which goods of that kind are commonly supplied; and
    2. (b)
      acceptable in appearance and finish; and
    3. (c)
      free from defects; and
    4. (d)
      safe; and
    5. (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 section 54(3).

  1. [16]
    Section 54(3) provides that matters to have regard to in applying section 54(2) are:
    1. (a)
      the nature of the goods; and
    2. (b)
      the price of the goods (if relevant); and
    3. (c)
      any representation made about the goods by the supplier or manufacturer of the goods; and
    4. (d)
      any other relevant circumstances relating to the supply of the goods.
  2. [17]
    According to the Collins Dictionary, the “appearance” of something is the way it looks, “finish” refers to appearance or texture of the surface of something and “defect” means a fault or imperfection.
  3. [18]
    The remedy available to a consumer against a supplier depends in the first instance on whether the failure is a ‘minor failure’ or a ‘major failure’. The term ‘major failure’ is defined in s 260 of the Australian Consumer Law to relevantly mean (emphasis added):

(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 descriptionfrom that description;…

(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

(e) the goods are not of acceptable quality because they are unsafe.

  1. [19]
    Several minor defects can aggregate to amount to a major failure giving rise to a right to reject goods, per Cary Boyd v Agrison Pty Ltd[2] in which the Court held that:

despite 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.

  1. [20]
    The test of whether there is a major failure for the purposes of section 260 and the test for whether goods are of acceptable quality for the purposes of section 54 both adopt a ‘reasonable consumer’ benchmark.
  2. [21]
    If the failure can be remedied and is not a major failure, the consumer is limited to:
    1. (a)
      requiring the supplier to remedy the failure within a reasonable time; or
    2. (b)
      if the supplier cannot remedy the failure within a reasonable time, having the failure remedied by someone other than the supplier and seeking compensation from the supplier, or rejecting the goods.
  3. [22]
    If the failure can be remedied and is not a major failure, the consumer is limited to:
    1. (a)
      requiring the supplier to remedy the failure within a reasonable time; or
    2. (b)
      if the supplier cannot remedy the failure within a reasonable time, having the failure remedied by someone other than the supplier and seeking compensation from the supplier, or rejecting the goods.
  4. [23]
    Where there has been a major failure, the consumer may (so far as is relevant to this claim) notify the supplier that they reject the goods, identifying grounds on which they do so.[3]
  5. [24]
    To obtain a refund, the consumer must reject within the ‘rejection period’, defined to mean:[4]

(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.

  1. [25]
    The guarantee of acceptable quality does not apply if the consumer causes them to become of unacceptable quality or does not take reasonable steps to prevent them from becoming of unacceptable quality.
  2. [26]
    In terms of descriptions and representations, salespersons are given some leeway to use “puff” in the sales process, namely, hype or hyperbole that plainly exaggerates a product’s virtues and are not intended to be taken seriously. Representations or statement that are “mere puff” in the sales process have no contractual effect or legal consequence.[5] However, unlike mere puff, a representation intended to induce a person to enter into a contract will have legal consequences.
  3. [27]
    Distinguishing puff from representations requires the tribunal to apply an objective approach to assess the intention of the parties from the totality of the evidence.[6]
  4. [28]
    In weighing up the effect of an oral representation prior to contract relevant considerations include:
    1. (a)
      whether an intelligent bystander would reasonably infer that the truth about a statement was guaranteed;[7]
    2. (b)
      where the oral statements conflict with the subsequent written contract whether the oral statements would reasonably have been included in the written contract if they were intended to have formed part of the contract;[8] 
    3. (c)
      the timing of the statement in terms of how proximate it was to when the contract was formed;[9] and
    4. (d)
      whether the content of the statement was material to one party’s decision to enter into the contract.[10]
  5. [29]
    Under section 267(4), the consumer may 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 because of the failure.
  6. [30]
    In Belomark Pty Ltd v Robinson (No 2),[11] the tribunal considered whether the cost of repairs claimed as a consequence of a major failure to comply with the guarantee of the exercise of due care and skill was excessive, noting that:
    1. (a)
      the reference in the Australian Consumer Law   to loss or damage should not be given a narrow meaning;[12]
    2. (b)
      the legislation does not limit the costs able to be claimed by a consumer who suffers a major failure of a guarantee to only reasonable costs. That limitation only applies where the failure was a minor failure of a guarantee;[13] and
    3. (c)
      where there is a major failure of a guarantee the issue is whether the loss or damage claimed to flow from the breach was reasonably foreseeable.[14]
  7. [31]
    There is an obligation on the applicant to mitigate its loss.[15]

Discussion and findings

  1. [32]
    Mr Fartash was ill-equipped for the hearing and did not present as a credible witness. Among other things: 
    1. (a)
      He did not have the application in front of him for the hearing and said that said he believed the hearing was for the purpose of directions only, when the notice of hearing clearly stated that the hearing was for the purpose of deciding the application for a motor vehicle dispute.
    2. (b)
      He said that the applicant drove the vehicle to where he lived “interstate”, when the applicant clearly lived in Queensland.  He then argued that a ten-hour drive was “interstate” even if within Queensland, but then later said he’d misspoken.
    3. (c)
      He described the vehicle sold by his dealership as a four-wheel drive when it was only a two-wheel-drive, and then insisted that, regardless, a two-wheel-drive vehicle can “go anywhere” a four-wheel-drive can go and “do anything” a four-wheel-drive vehicle can do, giving the example of a Hyundai Getz that can be taken on the beach. This submission was, respectfully, a baseless nonsense.
    4. (d)
      He dismissed that the applicant’s case as based entirely on the applicant’s own, unqualified opinion, ignoring the applicant’s evidence of having had the vehicle independently inspected and that it failed a roadworthy inspection within days of the sale, although the inspection report formed part of the Application.
    5. (e)
      He said that when using the words “this vehicle has been well looked after” he merely meant that it was “tidy for its age”. He said he “can’t control how someone else has driven it”, admitted that he did not know the history of the vehicle when he said it was “well looked after” and said in any event, all of his advertisements have a disclaimer (which, in fact, does not appear on the advertisement tendered in evidence) and that the expression “this vehicle is well looked after” is just a “generic description” of a vehicle.
    6. (f)
      He filed no material and belatedly demanded the hearing be adjourned to allow him to file his own roadworthy certificate and to have the vehicle independently inspected. 
  2. [33]
    I refused the respondent’s request for an adjournment on the basis that:
    1. (a)
      the respondent had received notice of the hearing that clearly spelt out the purpose of the hearing; and
    2. (b)
      parties must be responsible for preparing their own case[16] and a failure to prepare, decided upon mid-hearing, does not warrant an adjournment, noting that the tribunal has a responsibility to the public at large to responsibly manage its finite resources.[17]
  3. [34]
    On 25 July 2021, a Sunday, Mr Jenkins sent an email to Mr Fartash in which he says as follows:

Hi mate,

We have arrived safely in Cairns with the car.  The car went well with no real dramas.

A couple of things I just want to note.

… I have noticed a large amount of mud through the chassis too which I am not happy about, again, paying $23,000 for a 2WD, I would not expect this, however, I’ll move on and give it a good clean myself.

Also the horn worked for once and then stopped, probably blew a fuse, I’ll have a look at it.

As I said, other than this I’m happy. I’ve attached photos including the fuel receipt to fill the tank as agreed on.

  1. [35]
    The fuel receipt referred to is from a Coles service station at Chapel Hill, for 53.66 litres of fuel purchased at 10.35am on 24 July 2021 at a cost of $93.31. This appears to evidence an agreement between the applicant and the respondent that the vehicle ought to have been sold with fuel in its tank, but when it was not, the respondent agreed to reimburse the applicant for the first tank of fuel purchased.
  2. [36]
    As mentioned, Mr Jenkins took the vehicle for a safety inspection the next day.  Mr Pell’s report is, in my view, an independent assessment of the condition of the vehicle on 26 July 2021, two days after the applicant took possession of the vehicle from the respondent, and I accept it as such. The respondent did not offer any alternate roadworthy certificate or assessment of the condition of the vehicle.
  3. [37]
    The respondent argued that the dirt evidenced in the photographs is consistent with the age of the vehicle, the kilometres driven and its use as an off-road vehicle (again, insisting that two-wheel drive utilities are capable of what four-wheel drives can do and are purchased for off-road driving).  He said it would have been written off if it had ever been submerged, and said that any evidence of submersion is consistent with the applicant having submerged the vehicle on his drive home.
  4. [38]
    Mr Jenkins said he purchased this vehicle as a work ute, did not take it off-road on the drive home and did not submerge it.  He said he owns a four-wheel drive version of the same vehicle, that is older and that he uses for off-road driving.  He says therefore he had no need to take this vehicle off road, and he also compares the condition of his older four-wheel drive with the condition of this vehicle, saying that the dirt inside his other vehicle which has been off-road, is far less than the vehicle he purchased from the respondent.
  5. [39]
    I have no reason to disbelieve the applicant’s evidence. He noticed the horn didn’t work, reported it to the respondent, then took the vehicle for inspection as soon as practically possible after he noticed the debris in the vehicle, which was very close in time to the purchase.  There is nothing to suggest that he had a change of mind in relation to the vehicle after getting it home – in fact, he first said that he was “happy” with it.
  6. [40]
    It wasn’t until Mr Jenkins received independent advice that it had failed a safety inspection, and that it had been submerged and that the electronics were compromised, making the vehicle unreliable, that he asked for a refund, which, at the latest, occurred in emails exchanged with the respondent on 29 July 2021. 
  7. [41]
    I find, on balance, the independent evidence of Mr Pell’s report and the photographs that are consistent with his observations evidence the condition in which the vehicle was sold by the respondent to the applicant on 24 July 2021, namely:
    1. (a)
      The vehicle’s electronics were comprised, with the effect that the horn was not working – this a defect that meant the vehicle failed a safety inspection;
    2. (b)
      Neither the tyres not the wheels met statutory safety standards;
    3. (c)
      The wiring inside the vehicle has been compromised by water;
    4. (d)
      The vehicle has been submerged to at least the fuel tank, evidenced by dried debris on top of the fuel tank and a water line inside the door;
    5. (e)
      The extent of rust, dirt, mud, sticks and pooled water is not consistent with – and far exceeds - fair wear and tear, or the extent of interior dirt and dust that might otherwise be expected from a two-wheel drive vehicle of similar age and mileage with average deterioration of seals over time and through ordinary use; and
    6. (f)
      Rust has started along the seat frame, brackets and floor components.
  8. [42]
    Consequently, the vehicle sold was not of acceptable quality because it was not acceptable in appearance and finish, it was not free from defects and it was unsafe, and I have had regard to the price the applicant paid for the vehicle and the representation that the vehicle was “well looked after”. 
  1. [43]
    Whilst the horn or tyres/wheels defects might have, alone, been minor failures which the respondent is willing to remedy, aggregated with the findings of submersion and the consequential water damage (including rust) to components I find that they comprise a major failure because I am satisfied that:
    1. (a)
      a reasonable consumer would not have purchased the vehicle for the price paid, if fully acquainted with the nature and extent of the failure; and
    2. (b)
      the vehicle does not meet the description of one that has been “well looked after”; and
    3. (c)
      the vehicle is unsafe, according to the independent safety inspection report.
  1. [44]
    I am satisfied that the defects were latent and concealed from the applicant and, therefore, not reasonably obvious from his visual inspection of the vehicle.
  2. [45]
    I am satisfied that there is not evidence to support a finding that the defects were caused or contributed to by the applicant on his drive home with the vehicle after purchase.
  3. [46]
    I have considered, and I dismiss the submission that the statement “this vehicle has been well looked after” is a generic “puff” statement not intended to be taken seriously.  The statement is specific to “this vehicle” and implies reasonable knowledge of its ownership history or a more thorough inspection of the vehicle by the dealer than a cursory glance intended to influence or induce the sale.
  4. [47]
    The applicant rejected the vehicle within the rejection period, which was:
    1. (a)
      Within five days of purchase; and
    2. (b)
      Within three days of its failed safety inspection, which time was spent attempting to negotiate an outcome with the respondent; and
    3. (c)
      After a ten-hour drive, with is a reasonable period of use to put the vehicle to before the failure became apparent.

Refund

  1. [48]
    The respondent breached the guarantee of acceptable qualify, the failure is a major failure entitling to the applicant to a full refund of the price he paid the respondent, including on-road costs, in the sum of $22,990.

Damages

  1. [49]
    The safety inspection fee of $110 and the REVS check of $35 were reasonably incurred by the applicant and are reasonably foreseeable as they are directly related to his purchase of the vehicle, and I award them to the applicant on that basis.  
  2. [50]
    The first tank of fuel at $93.31 was an agreed expense to be reimbursed to the applicant by the respondent, and was a reasonably foreseeable loss arising from the purchase.  I award it to the applicant on that basis.
  3. [51]
    The travel expenses of $300 and $200 were not supported by any evidence and, had they been, I am not convinced they were reasonably foreseeable.  I decline to award them to the applicant. 

Costs

  1. [52]
    As the applicant has been largely successful, it is appropriate that he be recompensed for the filing fee paid in the sum of $358.00 pursuant to section 102 of the QCAT Act.    

Footnotes

[1]Medtel Pty Ltd v Courtney (2003) 130 FCR 182, [64] and [70].

[2][2014] VMC 23 at [51].

[3]Section 259(3)(a) of the Australian Consumer Law.

[4]Section 262(2) of the Australian Consumer Law.

[5]Carlill v Carbolic Smoke Ball Company [1893] Q.B. 256.

[6]Hielbut, Symons & Co v Buckleton [1913] AC 30.

[7]Oscar Chess Ltd v Williams [1957] 1 All ER 325.

[8]Equuscorp Pty Ltd v Glengallen Investments Pty Ltd [2004] 218 CLR 483

[9]Van den Esschert v Chappell [1960] WAR 114.

[10]Ibid.

[11][2020] QCATA 112.

[12]Ibid at [39] per Member Howe.

[13]Ibid, [42].

[14]Ibid, [43].

[15]Cox v J & M Phelan trading as Carrara Carmart [2020] QCAT 190, [34].

[16]Clarke v Cascade Pools (Qld) Pty Ltd [2010] QCAT 323, [3].

[17]Creek v Raine & Horne Real Estate Mossman [2011] QCATA 226, [13]

Close

Editorial Notes

  • Published Case Name:

    Jenkins v Aria Motors Pty Ltd

  • Shortened Case Name:

    Jenkins v Aria Motors Pty Ltd

  • MNC:

    [2022] QCAT 153

  • Court:

    QCAT

  • Judge(s):

    Adjudicator Lember

  • Date:

    29 Apr 2022

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

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