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Sazdanoff-Haynes v MLS Wholesales Pty Ltd[2023] QCAT 37

Sazdanoff-Haynes v MLS Wholesales Pty Ltd[2023] QCAT 37

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Sazdanoff-Haynes v MLS Wholesales Pty Ltd [2023] QCAT 37

PARTIES:

stephen miller sazdanoff-haynes

(applicant)

v

mls wholesales pty ltd

(respondent)

APPLICATION NO/S:

MVL070-21

MATTER TYPE:

Motor vehicle matter

DELIVERED ON:

31 January 2023

HEARING DATE:

21 October 2022

HEARD AT:

Brisbane

DECISION OF:

Member Traves

ORDERS:

  1. MLS Wholesales Pty Ltd must pay the sum of $28 000 to Stephen Miller Sazdanoff-Haynes by 4:00pm on 28 February 2023.

CATCHWORDS:

TRADE AND COMMERCE – COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – GUARANTEES, CONDITIONS AND WARRANTIES IN CONSUMER TRANSACTIONS – JURISDICTION – whether Tribunal has jurisdiction to order a refund by a supplier of goods under the Australian Consumer Law (Qld) where purchase price is $43 000 – whether pre-sale conversation misleading or deceptive or likely to mislead or deceive – whether breach of consumer guarantees – whether breach of sale by description provisions – whether breach of acceptable quality provisions – appropriate remedies

MOTOR DEALERS LEGISLATION – whether breach of statutory warranties – appropriate remedies

Australian Consumer Law (Qld), s 18, s 29, s 54, s 56, s 236, s 259, s 260, s 262, s 263

Competition and Consumer Act 2010 (Cth), Schedule 2

Fair Trading Act 1989 (Qld), s 50, s 50A

Motor Dealers and Chattels Auctioneers Act 2014 (Qld), Schedule 1, s 14, s 15

Australian Competition and Consumer Commission v Jayco Corporation Pty Ltd [2020] FCA 1672

Collyer v Grays (NSW) Pty Ltd [2022] QCATA 80

Dwyer v Volkswagen Group Australia Pty Ltd t/as Volkswagen Australia [2021] NSWSC 715

Harlingdon & Leinster Enterprises Ltd v Christopher Hull Fine Art [1990] 3 WLR 13.

Howarth v Biscamoss [2022] QCATA 72.

Jarmain v Market Direct Group Pty Ltd [2022] QCAT 375

Minister for Environment and Heritage v Greentree (No 2) [2004] FCA 741

Taylor v Combined Buyers Ltd [1924] NZLR 627

3WJ v Director-General Fair Trading [2003] NSWSC 331.

APPEARANCES & REPRESENTATION:

Applicant:

Self-represented

Respondent:

Self-represented

REASONS FOR DECISION

  1. [1]
    Mr Sazdanoff-Haynes (Mr Haynes) bought a second-hand Toyota Troop Carrier from MLS Wholesales Pty Ltd (MLS) over the telephone after seeing an online advertisement for the vehicle on Gumtree. Mr Haynes did not conduct a pre-purchase examination of the vehicle.
  2. [2]
    Mr Haynes resides in New South Wales and bought the vehicle, which was located in Brisbane, after reading the advertisement and having a conversation with Mr Sitnik, a director of MLS, on the telephone. The vehicle was advertised for sale for $45 000 and sold to Mr Haynes for $43 000.
  3. [3]
    Mr Haynes claims he was misled prior to purchase as to the history of the vehicle and its condition. He also claims the vehicle does not correspond with its description and is not of acceptable quality, in breach of relevant statutory guarantees.
  4. [4]
    Mr Haynes’ application for motor vehicle dispute[1] claims, in the alternative:
    1. (a)
      Under s 15(1)(d) of the Motor Dealers and Chattel Auctioneers Act 2014 (Qld), Schedule 1:
      1. the cost of repairs and losses suffered ($41, 283.86) and the difference in value between the amount he paid for the vehicle and its assessed value ($28, 000), or
      2. a refund and his reasonable costs and losses incurred consequent on the vehicle not meeting the statutory warranty ($55, 205.85).
    2. (b)
      Under s 50A(2)(a) of the Fair Trading Act 1984 (Qld):
      1. compensation for the reduction in value of the vehicle below the price paid for it ($28 000) pursuant to s 259(3)(b) of Schedule 2 to the Competition and Consumer Act 2010 (Qld) (‘ACL)’; and
      2. compensation for all reasonably foreseeable losses suffered because of breaches of the ACL guarantees (acceptable quality – s 54, and supply of goods by description – s 56) pursuant to s 259(4) of the ACL; or
      3. alternatively, a refund of the price paid and reasonable costs and losses incurred ($55, 205.85) pursuant to s 263(4) of the ACL; and
      4. further, if refund is ordered, ancillary orders that the respondent collect the vehicle from the applicant at the respondent’s cost.
  5. [5]
    Mr Haynes’ claim changed during the hearing. In oral closing submissions, Mr Haynes said that he no longer wanted a refund but instead wanted to keep the vehicle and be awarded the difference between the price paid and its value as assessed (a total of $28 000) plus an amount of $3 500 for the costs and losses he had incurred prior to its assessment, being a total amount of $31 500.
  6. [6]
    MLS denied it had misled Mr Haynes. MLS said it agreed to sell the vehicle to Mr Haynes at a reduced price on account of the cost he would incur in getting the vehicle registered in New South Wales. The original price had included the cost of obtaining registration in Queensland which Mr Haynes said that he did not want to incur, given he lived in New South Wales.
  7. [7]
    MLS denied the vehicle had the defects complained of at the time of sale and submitted that the price of the equivalent vehicle today would be higher than the price Mr Haynes paid.

Background

  1. [8]
    On 25 June 2020 Mr Haynes read the online advertisement for sale of the vehicle posted by MLS on Gumtree. The parties were unable to produce the advertisement at the hearing. There is a dispute as to the content of the advertisement.
  2. [9]
    MLS said the advertisement of the vehicle would have said ‘military model’ 2011/12 Toyota Landcruiser. Mr Haynes gave evidence that the ad said “military Troopcarrier”.
  3. [10]
    On 26 June 2020 at around 9:00am Mr Haynes telephoned MLS regarding the vehicle and spoke to Mr Sitnik, a director of MLS. The content of that telephone conversation is also in dispute. I deal with this further below.
  4. [11]
    The parties negotiated a reduced price of $43 000 for the vehicle (a reduction of $2 000) on the basis Mr Haynes was a resident of New South Wales and would have to pay transport and registration costs in New South Wales. If Mr Haynes had been resident in Queensland the usual practice would have been for MLS to pay for the car to obtain a roadworthy certificate and registration.
  5. [12]
    At 9:13am, immediately after the telephone conversation, Mr Haynes emailed MLS accepting the offer and stating:

We just spoke on the phone about the Toyota Troopcarrier.

Here is the ad just in case: [link provided]

As we discussed I’m happy to buy it immediately for $43k. I’ve really been looking for a Troopy with the third door!

I’ve attached a copy of my driver’s license, let me know what the next steps are.

Thanks

Stephen Haynes

  1. [13]
    At 9:47am MLS emailed a PPSR Search certificate and a Tax Invoice for $43 000. The PPSR certificate dated 26 June 2020 stated the vehicle’s Queensland registration expired on 1 June 2020.  The invoice described the vehicle as follows:

12/2011 Toyota Landcruiser Troopcarrier 4x4 White Wagon Manual 8-cyls (Diesel).

  1. [14]
    At 12:47pm the $43 000 was electronically transferred to MLS.
  2. [15]
    On 18 July 2020, one day after receiving the vehicle, Mr Haynes obtained a ‘blue slip’ for the vehicle (an equivalent of a roadworthy certificate) and the vehicle was registered in New South Wales. Mr Haynes paid $2 091 for stamp duty, blue slip and registration.
  3. [16]
    On 20 July 2020 Mr Haynes emailed MLS stating that while he was “happy with it overall” he was disappointed the vehicle was not in roadworthy condition as indicated in the advertisement. Mr Haynes referred to the following defects: an electrical fault in the tail/trailer lighting in the main harness; and the battery having a short lifespan, being 2 days.
  4. [17]
    On 21 July 2020 MLS replied:

…

The advertised price was $45 000 with RWC & Registration. The car was sold to you at $43 000 without RWC & Registration and not inspected by yourself.

The battery was replaced prior to it going out to you…You can post back to us if you like and we can get it replaced under warranty?

As for the wiring issue, this is something we do not look into or test sorry.

The car was also serviced prior to you receiving (Oil & Oil Filters).

  1. [18]
    On 16 August 2020 the vehicle’s transfer case caught fire. At that time the vehicle had driven 200km since the time of taking possession.
  2. [19]
    On 17 August 2020 the transfer case was rectified at a cost of $3, 506.95.
  3. [20]
    On 18 August 2020 Mr Haynes emailed MLS stating he was disappointed in being misled about the history and condition of the vehicle and that the vehicle had broken down due to a faulty transfer case.
  4. [21]
    On 30 August 2020 the vehicle’s clutch pedal stopped working. At that time the vehicle had driven approximately 1000km since the time Mr Hayne took possession. The clutch was subsequently repaired by Mr Hayne. The necessary parts cost $130.28.
  5. [22]
    On 18 November 2020 Mr Hayne, by his lawyers, sent correspondence noting the defects, that the vehicle was certainly an ‘ex-mines’ vehicle and demanding from MLS a refund for the vehicle (rejection of the vehicle) and payment of costs reasonably incurred by Mr Haynes as a result of the defects.
  6. [23]
    On 14 January 2021 and 10 February 2021 Newcastle Toyota provided reports on the vehicle. In the 10 February 2021 report Toyota appraised the value of the vehicle at $15 000.
  7. [24]
    On 23 February 2021 Mr Haynes obtained a further report from mechanic Adam Glew of Gloucester Rego & Auto Repairs which quoted $18, 974.51 to repair identified defects.
  8. [25]
    On 26 February 2021 Mr Haynes obtained a quote from Marty’s Smash Repairs Pty Ltd to paint and repair the rust on the vehicle in the sum of $10 103.50.

The ACL claim

  1. [26]
    Mr Haynes has brought claims for misleading and deceptive conduct under s 18 and for breach of the statutory guarantees in ss 54 and 56.

Relevant jurisdiction of the Tribunal under the ACL in motor vehicle disputes

  1. [27]
    Section 50 of the Fair Trading Act 1989 (Qld) provides:

50 PROCEEDINGS REFERRED TO COURT OF COMPETENT JURISDICTION

  1. (1)
    A proceeding for the purposes of a provision of the Australian Consumer Law (Queensland) listed in the table to this section must be heard in the tribunal or in a court having jurisdiction for the proceeding, having regard to—
  1. (a)
    for the tribunal, whether the subject of the proceeding—
  1. (i)
    would be a minor civil dispute within the meaning of the QCAT Act; or
  1. (ii)
    would be a matter to which section 50A applies; or
  1. (b)
    for a court—any civil jurisdictional limit, including any monetary limit, applying to the court.
  1. [28]
    This is not a ‘minor civil dispute’ given the amount claimed is over the prescribed limit of $25 000. For the Tribunal to have jurisdiction, s 50A must apply.
  2. [29]
    Section 50A provides:

50A TRIBUNAL’S JURISDICTION FOR PARTICULAR MATTERS RELATING TO MOTOR VEHICLES

  1. (1)
    A person may apply, as provided under the QCAT Act, to the tribunal for an order mentioned in subsection (2) for an action—
  1. (a)
    under a provision of the Australian Consumer Law (Queensland) listed in the table to this section; and
  1. (b)
    relating to a motor vehicle; and
  1. (c)
    seeking an amount or value of other relief of not more than $100,000.
  1. (2)
    In a proceeding under subsection (1) , the tribunal may make only the following orders—
  1. (a)
    an order requiring a party to the proceeding to pay a stated amount to a stated person;
  1. (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;
  1. (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;
  1. (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;
  1. (e)
    an order combining 2 or more orders mentioned in paragraphs (a), (b), (c) and (d).
  1. (3)
    However, the tribunal can not make an order under subsection (2) that—
  1. (a)
    purports to require payment of an amount, performance of work or return of goods of a value of more than $100,000; or
  1. (b)
    purports to grant relief of a value of more than $100,000 from the payment of an amount; or
  1. (c)
    combines 2 or more orders mentioned in subsection (2) and purports to award or declare entitlements or benefits (or both) of a total value of more than $100,000.
  1. [30]
    The Table of provisions is as follows:

Provision of Australian Consumer Law (Queensland)

Name of provision

Nature of proceeding

section 236(1)

Actions for damages

Action to recover amount of loss or damage

section 259(2), (3) and (4)

Action against suppliers of goods

s 259(2) - Action to recover reasonable costs incurred by consumer

s 259(3) - Action to recover compensation for reduction in value of goods

s 259(4) - Action to recover damages because of failure to comply with guarantee

section 265(3)

Termination of contracts for the supply of services that are connected with rejected goods

Action to recover refund

section 267(2), (3) and (4)

Action against suppliers of services

s 267(2) - Action to recover reasonable costs incurred by consumer

s 267(3) - Action to recover compensation for reduction in value of services

s 267(4) - Action to recover damages because of failure to comply with guarantee

section 269(3)

Termination of contracts for the supply of services

Action to recover refund

section 271(1), (3) and (5)

Action for damages against manufacturers of goods

Action to recover damages from manufacturer

section 274(3)

Indemnification of suppliers by manufacturers

Action against manufacturer for legal or equitable relief

section 279(1)

Action by consumer to recover amount of loss or damage

  1. [31]
    The Table includes an action for damages under s 236(1). An action for damages under s 236 may arise where a person has suffered loss or damage because of the conduct of another person and that person contravened a provision of Chapter 2 or 3. Section 18, which contains a general prohibition against misleading or deceptive conduct in trade or commerce, is in Chapter 2.
  2. [32]
    The Table also includes ss 259(2)(3) and (4) which provide rights of action against a supplier of goods that do not comply with the statutory guarantees in ss 51, 52, 53, 54, 55 and 56.
  3. [33]
    The Tribunal, accordingly, has jurisdiction to determine the claim for misleading and deceptive conduct and for breach of the statutory guarantees in ss 54 and 56.

Was there a failure to comply with s 54 of the ACL

  1. [34]
    Section 54 imposes a guarantee that goods supplied in trade and commerce to a consumer (other than by way of auction) are of acceptable quality.
  2. [35]
    The definition of ‘acceptable quality” is in s 54(2) which provides:

Goods are of acceptable quality if they are as:

  1. (a)
    fit for all the purposes for which goods of that kind are commonly supplied; and
  1. (b)
    acceptable in appearance and finish; and
  1. (c)
    free from defects; and
  1. (d)
    safe; and
  1. (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).

  1. [36]
    The matters to be considered in applying the definition are set out in s 54(3). They are:
  1. (a)
    the nature of the goods; and
  1. (b)
    the price of the goods (if relevant); and
  1. (c)
    any statements made about the goods on any packaging or label on the goods; and
  1. (d)
    any representation made about the goods by the supplier or manufacturer of the goods; and
  1. (e)
    any other relevant circumstances relating to the supply of the goods.
  1. [37]
    Whether the goods are acceptable, therefore, depends upon whether the goods, in relation to the characteristics referred to in (a) to (e) would be regarded as acceptable by a reasonable consumer having regard to, relevantly, the nature of the goods, the price paid, any representations made about the goods by the supplier, and any other relevant circumstances relating to the supply of the goods.
  2. [38]
    The issue is whether the goods were of acceptable quality at the time of supply.[2] The question is an objective one and is assessed from the perspective of a reasonable consumer acquainted with all relevant information known at the time of the trial.[3]
  3. [39]
    The standard of acceptable quality is not absolute. It is a flexible standard depending upon the application of the context specific factors in ss 54(3).
  4. [40]
    As Wheelahan J held in Australian Competition and Consumer Commission v Jayco Corporation Pty Ltd:[4] 

The standard of acceptable quality prescribed by s 54(2) is not absolute, or a standard of perfection. It is tempered by what a reasonable consumer would regard as acceptable having regard to the several matters in s 54(3). These matters render the standard of acceptable quality elastic, and context specific: Contact Energy Ltd v Jones [2009] 2 NZLR 830 at [95] (Miller J). The significance of the components of the guarantee of acceptable quality will therefore vary with the circumstances of each case.[5]

  1. [41]
    On 18 July 2020 the vehicle obtained a ‘blue slip’ and registration in New South Wales.
  2. [42]
    On 21 July 2020 Mr Haynes emailed MLS stating that while he was “happy with it overall” he was disappointed it was not in roadworthy condition. Mr Haynes complained at that time of electrical faults and a faulty battery. MLS responded by offering to replace the battery but would not repair the electrical faults as the vehicle had been sold “as is” with a $2 000 discount.
  3. [43]
    The Tribunal directed the parties obtain an independent assessor’s report. The Motor Vehicle Assessment Report by Mr Kovalev was filed on 4 May 2022. The Tribunal directed that the parties were not to produce further expert evidence without the leave of the Tribunal.[6]
  4. [44]
    The report identified the following defects as likely to have been present at the date of purchase (the amounts in brackets are the costs of repair):
    1. (a)
      Radio and antenna not working [$296];
    2. (b)
      Fuel cooler assembly leaking [$498];
    3. (c)
      Window regulators broken [$473.50];
    4. (d)
      Battery isolation switch seized [$99];
    5. (e)
      Step brackets missing;
    6. (f)
      Spare tyre worn [$320];
    7. (g)
      Rear shock bushes worn [$299];
    8. (h)
      Passenger door lock seized and does not operate [$325];
    9. (i)
      Front swivel hubs leaking grease [$4 572];
    10. (j)
      Defective paint work [included in (k)];
    11. (k)
      Corrosion in various parts of the vehicle [$10 103.50];
    12. (l)
      Steering wheel [$1 228.80].
  5. [45]
    In respect of some defects the Report concluded that further investigation would be required in order to determine whether the defect existed at the time of purchase. These included the transfer case defect which was repaired in August 2020 at a cost of $3 506. In respect of other items the Report concluded they were not defects.
  6. [46]
    The Report concluded that the corrosion throughout the vehicle was surface corrosion and not structural, however that the attempted repair work (paint work) had not been carried out in a satisfactory manner and the vehicle would continue to corrode.
  7. [47]
    On 24 February 2021 Mr Glew of Gloucester Rego & Auto Repairs wrote a quote for repairs to the vehicle. I have added those estimates where applicable to the Report items above.
  8. [48]
    A separate quote to repair the paint work was obtained by Mr Haynes from Marty’s Smash Repairs Pty Ltd for $10 103.50.
  9. [49]
    On 10 February 2021 a valuation report was obtained from Mr Lozanovski of Toyota. At that time the odometer reading was 103 000km. The report gave an appraised value of $15 000. The Condition Report stated:

X Mine car

Re sprayed

Rust coming through

Tyres old and cracked

We would not resell

Wholesale only

  1. [50]
    The question is, given the defects outlined above, whether a reasonable consumer would regard the vehicle as ‘acceptable quality’ at the time of supply given the following:
    1. (a)
      the nature of the goods: a second-hand Troopcarrier with an odometer reading of approximately 98 000km;
    2. (b)
      price: $43 000;
    3. (c)
      representations by the supplier: no major defects; recently serviced.
    4. (d)
      any other relevant circumstances relating to supply: purchased without an inspection after a brief telephone conversation. Purchase price paid within 30 minutes of that conversation. Vehicle obtained a ‘blue slip’ and registration within days of purchase.
  2. [51]
    I find that the vehicle was fit for all the purposes for which a car of this nature is usually purchased. However, I am not satisfied that the vehicle was as acceptable in appearance and finish; free from defects; safe and durable as a reasonable consumer would expect taking into the factors in s 54(3).
  3. [52]
    At an odometer reading of 98 000km the vehicle could have been expected to be in a reasonable and sound condition: it was not an “old” used vehicle. The presence of extensive surface rust including to the under carriage, although not structural, was, in my view, a defect that would mean the vehicle was not as ‘free from defects’ as a reasonable consumer would expect given the factors outlined above. I find that the rust also affected the appearance and finish of the vehicle as well as its durability if left unrepaired.[7] I also note that to properly treat the rust and re-paint the vehicle was estimated to cost approximately $10 000, which represents approximately 25% of the purchase price.[8]
  4. [53]
    The vehicle also had a number of other defects which, although each of a minor nature amounted to a number of defects which collectively a consumer would not expect if the vehicle was of acceptable quality at the time of sale.
  5. [54]
    Accordingly, I find that the vehicle was not of acceptable quality within the meaning of s 54(2).
  6. [55]
    Section 54(6) provides that goods do not fail to be of acceptable quality if the consumer has caused them to be of unacceptable quality or fails to take reasonable steps to prevent them from becoming of acceptable quality; or they are damaged by abnormal use.
  7. [56]
    There was some suggestion by Mr Sitnik in oral submissions that the defects were caused by Mr Haynes after purchase or through abnormal use. MLS had no evidence of this but suggested the rust had occurred or at least worsened due to being parked near the sea.
  8. [57]
    While Mr Haynes lives near the sea, his evidence was that he parks a second vehicle in the same area and it has no rust issues. The evidence of the assessor was that rust existed at the time of purchase[9] and that the paint job was an attempted repair of that issue. I find that the rust or corrosion issue existed at the time of supply. There was no evidence that Mr Haynes had otherwise used the vehicle abnormally.
  9. [58]
    MLS had the legal and evidentiary burden of proof to establish the circumstances that they submit gives rise to the exceptions in s 54(6). MLS has not, in my view, satisfied the onus of establishing that either of the exceptions in s 54(6) apply.

Was there a failure to comply with s 56?

  1. [59]
    Section 56 provides that, where goods have been supplied by description, there is a guarantee that the goods correspond with that description.
  2. [60]
    Mr Haynes’ submitted that the vehicle was sold by description, being the online advertisement, which stated that the vehicle:
    1. (i)
      was a 2011/2012 Toyota Landcruiser “Military Troopcarrier” Diesel;
    2. (ii)
      had an odometer reading of approximately 98, 000km;
    3. (iii)
      was recently serviced;
    4. (iv)
      was in roadworthy and registrable condition;
    5. (v)
      was sold with a Queensland roadworthy certificate; and
    6. (vi)
      was sold with 6 months registration in Queensland.
  3. [61]
    As I noted above, there was controversy regarding the content of a pre-sale telephone conversation between Mr Sitnik of MLS and Mr Haynes.
  4. [62]
    Mr Haynes claimed in his application and in evidence during the hearing that Mr Sitnik had, during a telephone conversation with him immediately prior to purchase, confirmed the description in the ad was correct, that the vehicle was free of major defects, had only minor wear and tear and that it was an ex-military vehicle and was not an ex-mines vehicle.
  5. [63]
    However, during oral closing submissions, Mr Haynes resiled from that position and said that he asked whether the ad was true and correct but that no mention was made of the word “military” in the discussion. Mr Haynes said that after Mr Sitnik confirmed the ad was correct, that he had replied saying he didn’t want a mines vehicle and that Mr Sitnik said nothing in response.
  6. [64]
    Mr Sitnik gave evidence that the conversation lasted only 2 to 3 minutes and that he was asked to confirm whether the ad was correct and whether there were any major defects with the vehicle. Mr Sitnik said he replied that the ad was correct and there were no major defects with the vehicle. Mr Sitnik said that they did not discuss whether the vehicle was in registrable condition. Mr Sitnik said that Mr Haynes did not ask him whether the vehicle was “ex-military”.
  7. [65]
    Mr Sitnik said that the reduction in price was because Mr Haynes agreed to bear the cost of registration himself and, by implication, the cost of any rectification of minor defects necessary to obtain registration.

Was there a sale by description and, if so, what was the description?

  1. [66]
    I find there was a sale by description because the vehicle was not sold “as such” but by a description which the buyer relied upon.[10] It has been held that ‘the description’ (albeit in the context of the Sales of Goods legislation) means a statement of the kind, class or species to which the article belongs. It must be a statement as to the essential or specific nature of the thing sold, not merely a statement as to the quality, the state or another attribute of the article.[11] The cases distinguish between statements going to the identification of the goods sold and those going to the quality of the goods.
  2. [67]
    I find on balance that no representation in writing or over the telephone was made that the vehicle was “ex-military”. I find that the vehicle was described as a “military model” or “military Landcruiser” which was a reference to the model (as confirmed in the invoice) and that a reasonable consumer would not have interpreted it to mean it had been used in the military.
  3. [68]
    Accordingly, I find the description for the purposes of s 56 to be limited to matters of identity, namely: 2011/2012 Troopcarrier, military model.
  4. [69]
    I do not regard the representations made regarding defects, being matters of quality rather than identity, as matters relevant to the vehicle’s description for the purposes of s 56. This also applies to any statements made as to whether the vehicle had been recently serviced.
  5. [70]
    Accordingly, I find that vehicle complied with its description and there was no contravention of s 56.

Was the failure to comply with the s 54 guarantee a major failure

  1. [71]
    The remedy available to Mr Haynes depends upon whether the failure to comply with s 54 is a major failure.
  2. [72]
    Where there is a major failure in respect of the goods or the defect cannot be remedied, s 259(3) applies and the consumer can either reject the goods or accept the goods and claim compensation for any reduction in value below the contract price. Where the failure is not a major failure and can be remedied, s 259(2) applies. Under s 259(2) the consumer may require the supplier to remedy the defect or, if the supplier refuses or fails to comply with the request to remedy, the consumer can have the defect remedied themselves and recover the cost from the supplier or reject the goods.
  3. [73]
    In this case Mr Haynes has said he no longer wishes to return the vehicle. Whether the failure is major remains relevant to whether Mr Haynes has a right to be compensated for the reduction in value of the goods below the price paid for them (s 259(3)(b)) or is limited to a right to recover his reasonable costs of having the failure remedied (s 259(2)(b)(i)) provided he has first made the request to remedy of the supplier.
  4. [74]
    Section 260 sets out the circumstances in which a failure to comply with a guarantee is a major failure. Relevantly, a failure to comply with a guarantee is a major failure if:
    1. (a)
      the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or
    2. (b)
      the goods are not of acceptable quality because they are unsafe.
  5. [75]
    The relevant failure is the finding that the goods were not of acceptable quality due, predominantly, to extensive rust. The evidence, which I accept, was that the rust issue, although not structural at the time of sale, would become a structural issue if not repaired. The cost to repair the rust and repaint the vehicle was quoted to be $10, 103.50. Further, there were a number of other defects[12] which, accepting as I do the evidence of the assessor, existed at the time of sale.
  6. [76]
    In my view, the failure is major. A reasonable consumer, in my view, fully acquainted with the nature and extent of the rust defect and the other defects combined would not have acquired the vehicle.

Remedy under s 259(2).

  1. [77]
    Mr Haynes has said that he wishes to keep the vehicle. Given that and my finding that the failure is major, Mr Haynes remedies are for compensation under s 259(3)(b) and damages under s 259(4).
  2. [78]
    Mr Haynes submitted that he should be compensated $28 000 under s 259(3)(b) for the reduction in value of the vehicle, being the difference between the price paid ($43 000) and the appraised value of $15 000. Mr Sitnik, by reference to a search he did on his telephone during the hearing, said that the value of a second hand troopcarrier of that year and model was between $60 000 to $70 000 for a personal vehicle as opposed to a commercial vehicle.
  3. [79]
    I find that Mr Haynes is entitled to $28 000 by way of compensation. I accept the valuation by Toyota at $15 000 in coming to that figure, albeit having been arrived at some eight months after the sale. The loss of value is corroborated by the repair costs, in approximately the same sum.[13] Mr Sitnik did not provide reliable evidence of the value he asserted. In any event, that figure would not have taken into account knowledge of the defective state of the vehicle.
  4. [80]
    Further, under s 259(4) Mr Haynes submitted he was entitled to recover damages comprising the amount he had paid by way of repairs; transport and registration costs; wage losses and accommodation expenses for the days he was stranded due to the transfer case issue; and for the amount quoted to repair the defective items ($18, 974.51) and to repair the rust and re-paint the vehicle ($10, 103.50).
  5. [81]
    Registration and transport costs are not costs attributable to the failure to comply with the guarantee. The other costs for repairs done or to be done are, in my view, taken into account in the amount awarded as compensation. To award damages for those amounts would be, effectively, enabling double recovery by Mr Haynes.
  6. [82]
    I am not prepared to award Mr Haynes an amount for lost wages ($4 475.68) or accommodation costs ($400) for the time he was ‘stranded’ due to the transfer case issue. There was insufficient evidence that the transfer case issue was caused by the failure to comply with the guarantee or merely wear and tear. The Assessor’s Report was inconclusive. Accordingly, I do not allow damages in respect of wages or accommodation costs incurred in repairing the transfer case.

Misleading conduct

  1. [83]
    Section 18 of the ACL prohibits misleading or deceptive conduct in trade or commerce. Section 29 enumerates specific type of conduct in trade or commerce which, if in connection with the supply or promotion of goods, will give rise to a breach of the ACL.
  2. [84]
    The Tribunal has jurisdiction for an action for damages under s 236(1)[14] in a motor vehicle dispute up to the value of $100 000. An action for damages under s 236 may arise where a person has suffered loss or damage because of the conduct of another person and that person contravened a provision of Chapter 2 or 3. Section 18 of the ACL is in chapter 2.
  3. [85]
    I am not prepared on the evidence before me to find that any positive representation was made about the history of the vehicle. I have found above that the representation made was that the vehicle was a “military Troopcarrier” or “military model”. In my view, this did not connote to a reasonable consumer that the vehicle had been used by the military. Accordingly, I do not find there to have been a breach of s 29(1)(a) of the ACL.
  4. [86]
    I do not find that Mr Sitnik owed a duty to disclose to Mr Haynes the history of the vehicle in circumstances where he was not asked specifically whether the vehicle had been used in the mines or by the military.[15]
  5. [87]
    I do not find a contravention of s 18 of the ACL.

Does s 50A of the FTA confer jurisdiction on the Tribunal to award a refund?

  1. [88]
    Finally, there are some further observations I wish to make concerning s 50A of the FTA and whether it confers jurisdiction on the Tribunal to order a refund in a motor vehicle dispute.[16] Although Mr Haynes abandoned his claim for a refund, there is divergent authority on this significant issue in the Tribunal. I make the following observations noting that they are of course obiter.
  2. [89]
    Section 259 relevantly provides:

259 Action against suppliers of goods

  1. (1)
    A consumer may take action under this section if:
  1. (a)
    a person (the supplier) supplies, in trade or commerce, goods to the consumer; and
  1. (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.
  1. (2)
    If the failure to comply with the guarantee can be remedied and is not a major failure:
  1. (a)
    the consumer may require the supplier to remedy the failure within a reasonable time; or
  1. (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:
  1. (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
  1. (ii)
    subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection.
  1. [90]
    Section 263(1) provides that s 263 applies if, under section 259, a consumer notifies a supplier that the consumer rejects the goods.
  2. [91]
    Section 263(4) provides that the supplier must, in accordance with an election made by the consumer, refund any money paid by the consumer for the goods and an amount that is equal to the value of any other consideration provided by the consumer for the goods.
  3. [92]
    In my view, as a matter of statutory interpretation, s 50A confers jurisdiction on the Tribunal to order a refund. Section 50A provides that a person may apply to the Tribunal for an order listed in sub section (2) “for an action under a provision of the Australian Consumer Law (Queensland) listed in the Table to s 50A.”
  4. [93]
    Neither s 259 nor s 263 refer expressly to a right of action for a refund if the statutory elements justifying the return of the goods and a right to a refund are established. This is in contrast to the position with respect to services connected with rejected goods, when a right of action for refund of money paid is expressly granted.[17] As a matter of statutory interpretation, that has given rise to arguments in relation to contracts for the sale of goods not connected to services that, although the consumer is entitled to a return of the price paid, no action exists to enforce that right. That is, in my view, an unlikely construction, notwithstanding the absence of the words “by action”.
  5. [94]
    This view is consistent with the approach of Besanko J in Ferraro v DBN Holdings Aust Pty Ltd,[18] where his Honour held the applicant was entitled to a refund and damages and that each element of the cause of action had been properly pleaded, namely: supply of goods in trade and commerce; major failure to comply with the guarantee; and rejection of the vehicle in accordance with s 259(3)(a).
  6. [95]
    The absence in the ACL to a specific reference to an “action” did not mean that such an action did not exist. In my view, given the purpose of the provision (s 259) and the mischief intended to be remedied, such an action is implied.
  7. [96]
    Once it is accepted that a right of action exists to compel recovery of the price paid, on the proper construction of the FTA that right of action is “under” a provision of the ACL. The word “under” is capable of different shades of meaning: for an action to be under a provision of the ACL, it need not be expressly created by it – it is sufficient if such a right of action is pursuant to, or arises from, or is implied by, the ACL. In my view, looking at the statutory text, the words “under a provision of the [ACL(Qld)] listed in the Table” extend naturally to a right of action implied pursuant to those provisions.[19] Further, s 50A is remedial. A wide rather than a narrow meaning should be given to “under”. The action for a refund is, in my view, sufficiently connected with s 259 to be “under” s 259 within the meaning of s 50A.
  8. [97]
    The absence of a reference in the third column of the Table in s 50A to a right to a refund does not, in my view, override the reference in s 50A to provisions of the ACL, that is, to the first column. Any tension between the references to provisions in the first column and the description of the actions in the third column should be resolved in favour of the application of the first column and the listed statutory provisions there.[20]
  9. [98]
    In terms of the statutory context and purpose:
    1. (a)
      The Tribunal undoubtedly has jurisdiction to order refunds in respect of services connected with rejected goods: s 265(4);
    2. (b)
      s 263(6) provides that upon rejection of the goods by the consumer, property reverts to the supplier;
    3. (c)
      s 50A(2)(d) gives the Tribunal jurisdiction to order a consumer to return the goods;
    4. (d)
      s 50A(2)(a) gives the Tribunal jurisdiction to order a person to pay to another person a stated amount; and
    5. (e)
      s 50A(2)(e) gives the Tribunal jurisdiction to order a combination of the orders in s 50A(2)(a) to (d).
  10. [99]
    There is no sensible reason why the legislation would not, in the circumstances, intend the Tribunal to have jurisdiction to order a refund; and every reason to infer the legislature intended the Tribunal to have that jurisdiction. The matters above, in my view, support the view that the Tribunal has jurisdiction to make an order requiring a refund to be paid.

Conclusion

  1. [100]
    Given Mr Haynes has been successful in his claim under s 259(3) of the ACL due to the failure to comply with the statutory guarantee as to acceptable quality, I do not propose to consider the claim under the Motor Dealers and Chattel Auctioneers Act 2014 (Qld).
  2. [101]
    Accordingly, I order:

MLS Wholesales Pty Ltd must pay the sum of $28 000 to Stephen Miller Sazdanoff-Haynes by 4:00pm on 28 February 2023.

Footnotes

[1]  Application for motor vehicle dispute filed on 29 March 2021.

[2] Medtel Pty Ltd v Courtney [2003] FCAFC 151.

[3]  Ibid.

[4]  [2020] FCA 1672

[5]  Ibid at [27]; Dwyer v Volkswagen Group Australia Pty Ltd t/as Volkswagen Australia [2021] NSWSC 715 at [22].

[6]  Tribunal Directions dated 15 June 2021.

[7]  Assessor’s Report at [4].

[8]  Quote from Marty’s Smash Repairs Pty Ltd dated 26 February 2021.

[9]  Assessor’s Report at [3.3.2, item 12].

[10] Harlingdon & Leinster Enterprises Ltd v Christopher Hull Fine Art [1990] 3 WLR 13.

[11] Taylor v Combined Buyers Ltd [1924] NZLR 627 at 639-40.

[12]  See [56] above.

[13]  See Pix v Suncoast Marine Pty Ltd [2019] QSC 45 at [7].

[14]  FTA, s 50A.

[15] 3WJ v Director-General Fair Trading [2003] NSWSC 331.

[16]  See Jarmain v Market Direct Group Pty Ltd [2022] QCAT 375 which held that s 50A of the Fair Trading Act did not confer jurisdiction to order a refund but contrast with Howarth v Biscamoss [2022] QCATA 72.

[17]  ACL, s 265(3).

[18]  [2015] FCA 1127.

[19] Minister for Environment and Heritage v Greentree (No 2) [2004] FCA 741 at [126]-[127].

[20] Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28.

Close

Editorial Notes

  • Published Case Name:

    Sazdanoff-Haynes v MLS Wholesales Pty Ltd

  • Shortened Case Name:

    Sazdanoff-Haynes v MLS Wholesales Pty Ltd

  • MNC:

    [2023] QCAT 37

  • Court:

    QCAT

  • Judge(s):

    Member Traves

  • Date:

    31 Jan 2023

Appeal Status

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

Cases Cited

Case NameFull CitationFrequency
3WJ v Director-General Fair Trading [2003] NSWSC 331
2 citations
Jump To
Cite 1 - [2003] NSWSC 331
Cite 2 - [2003] NSWSC 331
Australian Competition and Consumer Commission v Jayco Corporation Pty Ltd [2020] FCA 1672
3 citations
Jump To
Cite 1 - [2020] FCA 1672
Cite 2 - [2020] FCA 1672
Cite 3 - [2020] FCA 1672
Collyer v Grays (NSW) Pty Ltd [2022] QCATA 80
1 citation
Jump To
Cite 1 - [2022] QCATA 80
Contact Energy Ltd v Jones [2009] 2 NZLR 830
1 citation
Jump To
Cite 1 - [2009] 2 NZLR 830
Dwyer v Volkswagen Group Australia Pty Ltd t/as Volkswagen Australia [2021] NSWSC 715
2 citations
Jump To
Cite 1 - [2021] NSWSC 715
Cite 2 - [2021] NSWSC 715
Ferraro v DBN Holdings Aust Pty Ltd trading as Sports Auto Group [2015] FCA 1127
1 citation
Jump To
Cite 1 - [2015] FCA 1127
Harlingdon and Leinster Enterprises Ltd v Christopher Hull Fine Art Ltd [1990] 3 WLR 13
2 citations
Jump To
Cite 1 - [1990] 3 WLR 13
Cite 2 - [1990] 3 WLR 13
Howarth v Biscamoss Pty Ltd [2022] QCATA 72
2 citations
Jump To
Cite 1 - [2022] QCATA 72
Cite 2 - [2022] QCATA 72
Jarmain v Market Direct Group Pty Ltd t/as MDC Camper Trailers & Offroad Caravans [2022] QCAT 375
2 citations
Jump To
Cite 1 - [2022] QCAT 375
Cite 2 - [2022] QCAT 375
Medtel Pty Ltd v Courtney [2003] FCAFC 151
1 citation
Jump To
Cite 1 - [2003] FCAFC 151
Minister for the Environment and Heritage v Greentree No. 2 [2004] FCA 741
2 citations
Jump To
Cite 1 - [2004] FCA 741
Cite 2 - [2004] FCA 741
Pix v Suncoast Marine Pty Ltd (No 2) [2019] QSC 45
1 citation
Jump To
Cite 1 - [2019] QSC 45
Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28
1 citation
Jump To
Cite 1 - [1998] HCA 28
Taylor v Combined Buyers Ltd [1924] N.Z.L.R 627
2 citations
Jump To
Cite 1 - [1924] N.Z.L.R 627
Cite 2 - [1924] N.Z.L.R 627

Cases Citing

Case NameFull CitationFrequency
Barter v Southeast Auto Sales Pty Ltd [2024] QCAT 2771 citation
Beynon v Sands Family Trust t/a Fair Deal Car Sales [2024] QCAT 1024 citations
Brazier v Inverlee Pty Ltd t/as Crown Motors [2024] QCAT 252 citations
Mitchell v Norris Enterprises Pty Ltd [2025] QCAT 3102 citations
MKG Legal Group Pty Ltd v Austral Pty Ltd t/as Brisbane City Land Rover [2025] QCAT 2323 citations
Parry v Westco Cairns Pty Ltd trading as Westco Motors [2024] QCAT 421 citation
Rapata v Critch Automotive Group Pty Ltd [2024] QCAT 432 citations
Schmidt v Kevin Butler Wholesale Pty Ltd [2024] QCAT 5221 citation
Sheppard v Piryani Pty Ltd t/as Galaxy Autos [2025] QCAT 3312 citations
Thompson v Caravan HQ Pty Ltd [2025] QCAT 3222 citations
1

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