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CITE

Unreported Judgment

PPAJP Pty Ltd v Oldmac Mazda Pty Ltd[2023] QCAT 324Member Poteri
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PPAJP Pty Ltd v Oldmac Mazda Pty Ltd[2023] QCAT 324

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:	PPAJP Pty Ltd v Oldmac Mazda Pty Ltd [2023] QCAT 324
PARTIES:	PPAJP PTY LTD (Applicant) v OLDMAC MAZDA PTY LTD T/AS SPRINGWOOD MAZDA (Respondent)
APPLICATION NO/S:	MVL141-22
MATTER TYPE:	Motor vehicle matter
DELIVERED ON:	18 August 2023
HEARING DATE:	8 June 2023
HEARD AT:	Brisbane
DECISION OF:	Member Poteri
ORDERS:	PPAJP Pty Ltd must deliver the Mazda 3 registration 618CNZ (together with all relevant documentation) to Oldmac Mazda Pty Ltd T/A Springwood Mazda within 7 days of the date of this order. Oldmac Mazda Pty Ltd T/A Springwood Mazda must pay the sum of $37,450 into the nominated bank account of PPAJP Pty Ltd on delivery of Mazda registration 618CNZ to Oldmac Mazda Pty Ltd T/A Springwood Mazda.
CATCHWORDS:	TRADE AND COMMERCE – COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – GUARANTEES, CONDITIONS AND WARRANTIES IN CONSUMER TRANSACTIONS – GUARANTEES, CONDITIONS AND WARRANTIES – where the Applicant contended that water was entering its newly purchased motor vehicle from an unknown source and pooling in the driver’s and back passenger seat’s footwells – where the Respondent caveated its further investigation of the alleged defect – whether the fact of a leak should be accepted – whether the Respondent’s caveat on further investigation was reasonable – whether the motor vehicle was of acceptable quality when supplied – whether failure of the consumer guarantee was major Competition and Consumer Act 2010 (Cth), Schedule 2, s 54, s 259, s 260, s 263 Grehan v WestPoint Autos Qld Pty Ltd [2022] QCATA 65, cited
APPEARANCES & REPRESENTATION:
Applicant:	Self-represented
Respondent:	Self-represented

REASONS FOR DECISION

[1]
This matter came before me on 8 June 2023 and the parties appeared in person. The Applicant company, PPAJP Pty Ltd (PPAJP) was represented by Anthony Parry (Parry) who is the owner director of PPAJP. The Respondent, Oldmac Mazda Pty Ltd (Oldmac), was represented by Mr. C Oldham (Oldham), the managing director, and Mr. Ray Stewart (Stewart), the service manager, of Oldmac. Oldham advised the Tribunal that his expertise of the workings of motor vehicles was limited but Stewart was available to answer any technical questions.
[2]
The proceedings relate to PPAJP purchasing a new Mazda 3 registration 618CNZ (Mazda) for $37,083.00 on 6 August 2021. The purchase contract is attached to the application filed in the Tribunal by PPAJP on 11 July 2022. There is no notation in the odometer section in the purchase contract. Both parties agree that the Mazda was new when the vehicle was delivered to PPAJP in August 2021.
[3]
Parry gave evidence that PPAJP has had the Mazda for some 2 years and the Mazda has travelled approximately 26,000 kilometers. Parry stated that he had used the Mazda for ordinary everyday road use.
[4]
Parry complains that water is entering the Mazda from an unknown source and pools in the driver's and back seat passenger's footwells. There are photographs of the water and its effects attached to PPAJP's application filed in the Tribunal on 11 July 2022. Parry says that the Mazda is normally parked outside his house and the leaks occurred after heavy rain events. He stated that his old vehicle was also parked outside his house for many years and there were no problems with water entering his old vehicle.
[5]
He reported the problem to Oldmac in February 2022 and in May 2022. In February, the water was dried, and the door moulds were exchanged. In May 2022, Oldmac undertook quite extensive testing over a period of days. This testing included placing the Mazda in an automatic car wash and subjecting the Mazda to a continuous stream of high-pressure water to various parts of the Mazda for an extended period over several days. Details of this testing is outlined in the Response of Oldmac filed in the Tribunal on 17 August 2022. Oldmac say that no water entered the Mazda as a result of this testing.
[6]
On 9 June 2022, PPAJP wrote to Mazda seeking a full refund of the purchase price of the Mazda and the return of the Mazda to Oldmac. PPAJP outlines the problems with the Mazda in this letter. Oldmac has rejected this request.
[7]
PPAJP commenced proceedings in the Tribunal pursuant to s 259 of Schedule 2 of the Competition and Consumer Act 2010 (Cth) (ACL) for the refund of the purchase price of $37,083 and reimbursement of the Tribunal filing fee of $367. In the application, PPAJP has attached photographs of the water that has entered the Mazda. PPAJP also states in the application that water was present in the Mazda on 1 July 2022 and on 4 July 2022. Parry also gave evidence that often the carpet under and around the driver’s seat feels dry to touch but is moist underneath the carpet and there is an unpleasant mouldy odour in the vehicle as a result of the moisture being present.
[8]
PPAJP filed a statement of further evidence in the Tribunal on 21 November 2022. In paragraph 2 of this statement, Parry says that the underside of the footwell carpet is damp after every period of consistent rain. He also says that in the winter months moisture regularly condenses on the inside of the windscreen. This moisture must be wiped off.
[9]
Oldmac in their Response filed in the Tribunal on 17 August 2022 submit that they have done everything possible to detect the leak by subjecting the Mazda to rigorous testing and suggesting that the Mazda should be subject to further testing. Oldmac say that an offer was made by Oldmac for Parry to return the Mazda to Oldmac for further testing. Oldmac say that this offer has not been taken up by Parry. See point 9 of the Response. I will comment on this offer later in my decision.
[10]
An independent assessment report was prepared by Mr. Leonard Hutchinson (Hutchinson) dated 3 November 2022 but apparently received by the Tribunal on 2 November 2022. The report states that it is impossible to determine what is the source of the leak as the carpet is damp. Hutchinson suggests that the leak may be emanating from the firewall and a full strip down of the interior, including removal of the dash, is required to determine the source of the leak and to rectify the problem.
[11]
Hutchinson also comments on the possible damage or corrosion that may be caused to the Mazda if the problem is not rectified.
[12]
Oldmac accept that further investigation is required. However, the offer that was made to PPAJP regarding this further investigation is contained in a submission dated 1 December 2022 and filed in the Tribunal on 2 December 2022. In summary, Oldmac says that it will carry out the full strip of the interior of the Mazda and will not charge PPAJP for the cost of the strip down if a defect is detected and the defect will be rectified at no cost to PPAJP. However, Oldmac go on to say that if no defect is detected in this strip down then PPAJP must pay for all labour costs. No evidence was led as to the cost of the strip down, but I presume that the cost is substantial, possibly some thousands of dollars. PPAJP did not agree to this proposal.
[13]
Oldman gave evidence and repeated the offer referred to in the previous paragraph. Oldmac’s position is they have done everything to replicate the circumstances of the Mazda being parked outside Parry’s residence and they have subjected the Mazda to rigorous testing. Oldmac could not detect any leak. Accordingly, it is their view that no defect exists or if a defect does exist, then the defect is not a “major failure”: see page 2 of Oldmac’s Response dated 17 August 2022. Stewart confirmed this view during the hearing.
[14]
At one stage in the proceeding, I suggested to the parties that they could have some without prejudice discussions outside the hearing to possibly resolve the dispute. When the parties returned to the hearing room after these discussions, Oldham made the offer that Oldmac would undertake the full strip down of the Mazda at no cost to PPAJP even if a defect was not detected. Parry advised the Tribunal that he did not want to agree to this examination as he has no trust in Oldmac.

THE LEGISLATION AND LAW

[15]
The relevant provisions of the ACL are contained in Sections 54, 259, 260 and 263 of Schedule 2 of Competition and Consumer Act 2010 (Cth). These provisions are outlined in full:

54
Guarantee as to acceptable quality

(1)
If:

(a)
a person supplies, in trade or commerce, goods to a consumer; and

(b)
the supply does not occur by way of sale by auction;

there is a guarantee that the goods are of acceptable quality.

(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

(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

(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.

(4)
If:

(a)
goods supplied to a consumer are not of acceptable quality; and

(b)
the only reason or reasons why they are not of acceptable quality were specifically drawn to the consumer’s attention before the consumer agreed to the supply;

the goods are taken to be of acceptable quality.

(5)
If:

(a)
goods are displayed for sale or hire; and

(b)
the goods would not be of acceptable quality if they were supplied to a consumer;

the reason or reasons why they are not of acceptable quality are taken, for the purposes of subsection (4), to have been specifically drawn to a consumer’s attention if those reasons were disclosed on a written notice that was displayed with the goods and that was transparent.

(6)
Goods do not fail to be of acceptable quality if:

(a)
the consumer to whom they are supplied causes them to become of unacceptable quality, or fails to take reasonable steps to prevent them from becoming of unacceptable quality; and

(b)
they are damaged by abnormal use.

(7)
Goods do not fail to be of acceptable quality if:

(a)
the consumer acquiring the goods examines them before the consumer agrees to the supply of the goods; and

(b)
the examination ought reasonably to have revealed that the goods were not of acceptable quality.

259
Action against suppliers of goods

(1)
A consumer may take action under this section if:

(a)
a person (the supplier) supplies, in trade or commerce, goods to the consumer; and

(b)
a guarantee that applies to the supply under Subdivision A of Division 1 of Part 3‑2 (other than sections 58 and 59(1)) is not complied with.

(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.

(3)
If the failure to comply with the guarantee cannot be remedied or is a major failure, the consumer may:

(a)
subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection; or

(b)
by action against the supplier, recover compensation for any reduction in the value of the goods below the price paid or payable by the consumer for the goods.

(4)
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.

(5)
Subsection (4) does not apply if the failure to comply with the guarantee occurred only because of a cause independent of human control that occurred after the goods left the control of the supplier.

(6)
To avoid doubt, subsection (4) applies in addition to subsections (2) and (3).

(7)
The consumer may take action under this section whether or not the goods are in their original packaging.

260
When a failure to comply with a guarantee is a major failure

(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.

(2)
A failure to comply with a guarantee referred to in section 259(1)(b) that applies to a supply of goods is also a major failure if:

(a)
the failure is one of 2 or more failures to comply with a guarantee referred to in section 259(1)(b) that apply to the supply; and

(b)
the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of those failures, taken as a whole.

Note:The multiple failures do not need to relate to the same guarantee.

(3)
Subsection (2) applies regardless of whether the consumer has taken action under section 259 in relation to any of the failures.

263
Consequences of rejecting goods

(1)
This section applies if, under section 259, a consumer notifies a supplier of goods that the consumer rejects the goods.

(2)
The consumer must return the goods to the supplier unless:

(a)
the goods have already been returned to, or retrieved by, the supplier; or

(b)
the goods cannot be returned, removed or transported without significant cost to the consumer because of:

(i)
the nature of the failure to comply with the guarantee to which the rejection relates; or

(ii)
the size or height, or method of attachment, of the goods.

(3)
If subsection (2)(b) applies, the supplier must, within a reasonable time, collect the goods at the supplier’s expense.

(4)
The supplier must, in accordance with an election made by the consumer:

(a)
refund:

(i)
any money paid by the consumer for the goods; and

(ii)
an amount that is equal to the value of any other consideration provided by the consumer for the goods; or

(b)
replace the rejected goods with goods of the same type, and of similar value, if such goods are reasonably available to the supplier.

(5)
The supplier cannot satisfy subsection (4)(a) by permitting the consumer to acquire goods from the supplier.

(6)
If the property in the rejected goods had passed to the consumer before the rejection was notified, the property in those goods revests in the supplier on the notification of the rejection.

[16]
Pursuant to s 50A of the Fair Trading Act 1989 (Qld), the Tribunal is vested with jurisdiction in relation to motor vehicles in respect to certain actions under the ACL. The parties have not raised any jurisdiction issues in regard to the application.
[17]
Section 54(1) of the ACL provides that where a person supplies goods in trade and commerce the goods are guaranteed to be of an acceptable quality. Sections 54(2) and (3) of the ACL outlines the definitions of “acceptable quality” and the context in which these definitions apply.
[18]
In these proceedings the Mazda was new when Oldmac sold the Mazda to PPAJP and I presume that the sale included a factory warranty from the manufacturer.
[19]
An analysis of the ACL and how it applies to vehicle claims is set out by A/Senior Member Howe in the matter of Grehan & Anor v WestPoint Autos Qld Pty Ltd [2022] QCATA 65. In this decision the following points are made:

(a)
The requisite standard is set out in paragraphs 32 and 49. These paragraphs are outlined as follows:

[32]
The test set out in s 54 ACL is not whether it can be established that goods had a particular and identifiable defect as at date of supply. That may not be possible to establish, yet the goods may still be defective based on one of the s 54(2) factors not being satisfied, such as whether the goods are free from defects or durable.

[49]
The goods must be of acceptable quality as at time of supply but from the standpoint explained in Williams v Toyota Motor Corporation Australia Limited:

The applicable standard of “acceptable quality” is to be determined by reference to what the “reasonable consumer” would regard as acceptable, having regard to the matters in s 54(3). The relevant enquiry is necessarily objective: Medtel Pty Ltd v Courtney [2003] FCAFC 151; (2003) 130 FCR 182 (at 199 [43] per Moore J, 205 [64] and 207 [72] per Branson J, with whom Jacobson J agreed at 209 [81]); Capic (at 265 [105]).^[1]

…

In determining whether the “reasonable consumer” would regard the goods as acceptable at the time of supply, one must assume that the construct is “fully acquainted with the state and condition of the goods (including any hidden defects of the goods)”: s 54(2) of the ACL; see also Medtel (at 205–206 [65]–[70]).^[2]

[20]
Pursuant to s 54 ACL, goods may still be defective based on one of the s 54(2) factors not being satisfied, such as whether the goods are free from defects or durable.
[21]
If s 54 of the ACL has been breached then it is necessary to determine if the failure to comply with the guarantee is a major failure. This issue is covered in paragraph 63 of Grehan which is set out:

[63]
By s 260 ACL:

When a failure to comply with a guarantee is a major failure

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:

the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or

…

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

…

the goods are not of acceptable quality because they are unsafe.

FINDINGS

[22]
I accept the evidence of Parry that water is intermittently entering the interior of the Mazda from an unknown source. This evidence is supported by the photographs taken by Parry and attached to the application by PPAJP filed in the Tribunal on 11 July 2022. There is evidence before me that water has entered the cabin of the Mazda on at least 4 occasions after rainfall. I found Parry to be honest and straightforward in the giving of his evidence.
[23]
The Mazda must be durable and able to withstand rain and water from entering the cabin of the Mazda. The fact that water is intermittently entering the Mazda demonstrates that the Mazda is not of acceptable quality. I also note that the Mazda was new when purchased by PPAJP and there is no evidence that the Mazda was used in an “abnormal” manner or PPAJP caused the Mazda to become of unacceptable quality as outlined in s 54(6) of the ACL.
[24]
Hutchinson, the independent assessor, also noted that if the carpet is constantly damp then this will cause corrosion/rust.
[25]
The defect may have been remedied when Parry first reported the problem or at least after Hutchinson provided his report and recommended a full strip down of the interior and removal of the dash to undertake a full investigation. However, Oldmac in their Response filed on 17 August 2022 acknowledge that further testing may be required but go on to say that it does not believe that the water entering the cabin is a major fault. Oldmac appear to be of the view that the Mazda had been subjected to rigorous testing and Oldmac could not replicate a situation where water was entering the cabin of the Mazda.
[26]
It was unreasonable for Oldmac to place a caveat on their further investigations given that there was a factory warranty on the Mazda. Oldmac should have proceeded with a full strip down of the interior of the Mazda after Parry raised complaints with Oldmac or at least after Hutchinson recommended the full strip down. I note that Oldmac and the manufacturer of the Mazda have all the resources and technical expertise to deal with these issues. Oldmac belatedly made an unconditional offer during the hearing to strip down the interior of the Mazda at no cost to PPAJP. However, this was rejected by Parry as he stated that he has lost all trust in Oldmac.
[27]
A full strip down of the interior may have demonstrated that there was no defect in the Mazda. Oldmac did not undertake this investigation. Accordingly, the only evidence that is before me regarding the defect is the evidence of Parry, the statements of Parry, the photographs submitted by PPAJP, the evidence of Oldham/Stewart, the submissions of Oldmac and the report of Hutchinson. On this basis I find that Oldmac have breached s 54 of the ACL because Oldmac as a supplier has supplied goods that are not of an acceptable quality because the Mazda is not free from defects and/or is not durable. Oldmac have breached the statutory guarantee contained in s 54(1) of the ACL.
[28]
Was the defect a “major failure” as set out in s 260 of the ACL? Following the precedent set out in Grehan, in my view a reasonable consumer fully acquainted with the nature and extent of the defect (i.e. water entering the cabin intermittently, moist carpets, possible corrosion of the floor, moisture in the cabin and unpleasant mouldy odour) would not have purchased the Mazda. I again stress that the Mazda was new when purchased by PPAJP. A reasonable consumer would certainly not purchase the Mazda as a new vehicle if that consumer was aware of the defect and the effects of the defect. I reject the submission of Oldmac that the defect was not a major failure.
[29]
Oldmac have breached their obligations under the ACL and, pursuant to s 263 of the ACL, a full refund should be paid to PPAJP and PPAJP should return the Mazda to Oldmac.
[30]
PPAJP have filed an application pursuant to s 259 of the ACL in the Tribunal to seek relief. Given my findings Oldmac should also refund the filing fee of $367 to PPAJP.

Footnotes

[1][165].

[2][166] and see Australian Competition and Consumer Commission v Mazda Australia Pty Ltd [2021] FCA 1493 [101].

Editorial Notes

Published Case Name:
PPAJP Pty Ltd v Oldmac Mazda Pty Ltd
Shortened Case Name:
PPAJP Pty Ltd v Oldmac Mazda Pty Ltd
MNC:
[2023] QCAT 324
Court:
QCAT
Judge(s):
Member Poteri
Date:
18 Aug 2023

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Cases Cited List of Cases Cited by this judgment

Case Name	Full Citation	Frequency
Australian Competition and Consumer Commission v Mazda Australia Pty Ltd	View on:JADE[2021] FCA 1493	1 citation Jump To Cite 1 - [2021] FCA 1493
Grehan v WestPoint Autos Qld Pty Ltd	[2022] QCATA 65	2 citations Jump To Cite 1 - [2022] QCATA 65 Cite 2 - [2022] QCATA 65
Medtel Pty Ltd v Courtney	(2003) 130 FCR 182	1 citation Jump To Cite 1 - (2003) 130 FCR 182
Medtel Pty Ltd v Courtney	View on:JADE[2003] FCAFC 151	1 citation Jump To Cite 1 - [2003] FCAFC 151

Cases Citing List of cases on Queensland Judgments citing this Judgment

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PPAJP Pty Ltd v Oldmac Mazda Pty Ltd[2023] QCAT 324