Omeife v The Trustee for M Rezaeian Family Trust t/as Auto Bargain Center
[2023] QCAT 49
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- Omeife v The Trustee for M Rezaeian Family Trust t/as Auto Bargain Center[2023] QCAT 49
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Omeife v The Trustee for M Rezaeian Family Trust t/as Auto Bargain Center[2023] QCAT 49
Omeife v The Trustee for M Rezaeian Family Trust t/as Auto Bargain Center[2023] QCAT 49
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
CITATION: | Omeife & Anor v The Trustee for M Rezaeian Family Trust t/as Auto Bargain Center [2023] QCAT 49 |
PARTIES: | emeka benneth omeife (first named applicant) BRONWYN LEE MACKAY (second named applicant) V the trustee for m rezaeian family trust trading as auto bargain center (respondent) |
APPLICATION NO/S: | MVL120-22 |
MATTER TYPE: | Motor vehicle matters |
DELIVERED ON: | 9 February 2023 |
HEARING DATE: | 2 February 2023 |
HEARD AT: | Brisbane |
DECISION OF: | Member Cranwell |
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 – whether goods rejected during the rejection period – whether consumer entitled to refund Australian Consumer Law, s 54, s 55, s 259, s 260, s 262, s 263, s 278, s 279 Competition and Consumer Act 2010 (Cth), Schedule 2 Fair Trading Act 1989 (Qld), s 50A, s 50C Haisman v Drive (Aust) Pty Ltd [2020] QCAT 44 Medtel Pty Ltd v Courtney (2003) 130 FCR 182 |
APPEARANCES & REPRESENTATION: | |
First and Second Named Applicants: | E Omeife |
Respondent: | M Rezaeian |
REASONS FOR DECISION
- [1]On 20 June 2022, Emeka Omeife (‘the first named applicant’) filed an Application – Motor Vehicle Dispute with the Tribunal. The respondent is the Trustee for the M Rezaeian Family Trust trading as Auto Bargain Centre (‘the respondent’).
- [2]The first named applicant’s wife, Bronwyn Mackay, is the owner of a 2010 Mazda CX-9 (‘the motor vehicle’). By consent, Ms Mackay was added as the second named respondent at the hearing.
- [3]The second named applicant purchased the motor vehicle from the respondent on 11 August 2021 for $15,920.
- [4]The applicants seek relief under the Australian Consumer Law, which is Schedule 2 to the Competition and Consumer Act 2010 (Cth). As clarified at the hearing, the relief sought by the applicants is a refund plus damages.
- [5]Section 50A of the Fair Trading Act 1989 (Qld) vests the Tribunal with jurisdiction in relation to motor vehicles in respect of certain actions under the Australian Consumer Law.
Consumer guarantees
- [6]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’.
- [7]The time at which goods are to be of acceptable quality is the time at which the goods are supplied to the consumer: Medtel Pty Ltd v Courtney (2003) 130 FCR 182 at [64] and [70]. However, information available after the time of supply may be taken into account in deciding whether the goods were of acceptable quality at the time of supply.
- [8]Sections 54(2) and (3) of the Australian Consumer Law define acceptable quality as follows:
- (2)Goods are of acceptable quality if they are as:
- (a)fit for all the purposes for which goods of that kind are commonly supplied; and
- (b)acceptable in appearance and finish; and
- (c)free from defects; and
- (d)safe; and
- (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
- (c)any statements made about the goods on any packaging or label on the goods; and
- (d)any representation made about the goods by the supplier or manufacturer of the goods; and
- (e)any other relevant circumstances relating to the supply of the goods.
- [9]The Macquarie Dictionary defines the word ‘defect’ to mean ‘a fault’ or ‘imperfection’.
- [10]The Macquarie Dictionary defines ‘durable’ as ‘having the quality of lasting or enduring of or relating to goods which will be good for some time, as opposed to those intended to be used or consumed immediately’.
Evidence
- [11]The applicants filed documents on 20 June 2022, 29 July 2022 and 12 October 2022. The respondent filed no evidence.
- [12]The second named applicant entered into a contract with the respondent for the purchase of the motor vehicle on 11 August 2021. The contract records the motor vehicle as having a build date of 12-2009, meaning it was over 11 years old at the time the contract was entered into. The contract also records the motor vehicle as having an odometer reading of 190,120 km.
- [13]The applicants’ evidence is that they experienced problems with the motor vehicle within a week or two of purchase. The material filed includes copies of text messages sent by the first named applicant to the respondent in September and October 2021. The text messages included the following dated 24 September 2021:
As you are aware, since purchasing the car we have had certain issues noted and you stated it has been rectified. The car has several issues, unconfirmed of course but I can name a few … car shakes when brakes are used, gears don’t always change unless revved out, shaking/rattling sound every time we start the car, dinging sound from right side of car (noticeable when reversing), key sensor faulty, low basey humming sound in engine? (sic) when slowing down.
These are the main issues identified by myself and my wife. We plan to take it to our mechanic to have it fully checked over and give you the report.
- [14]The text messages also included the following dated 11 October 2021:
Also I want to discuss a possible Change to another Car because this current CX-9 has many mechanical issues and it’s quite frustrating to me and my family.
- [15]The applicants filed three mechanical reports. The first one, from Ultra Tune Redbank, is dated 6 October 2021 and stated:
Here as follows is an estimate of your vehicle repairs
- HEADLIGHTS RESTORATION POLISH $139
- RH NUMBER PLATE BULB $18
- REAR WIPER REFILL $10
- ROCKER COVER GASKETS INCLUDING TUBE SEAL FITTED $1062
- REAR LOWER CONTROL ARM UNITS FITTED $1749 – MONITOR – NOT PRIORITY AT THE MOMENT
- REAR UPPER CONTROL ARM UNITS FITTED $1158 – MONITOR – NOT PRIORITY AT THE MOMENT
- WHEEL ALIGNMENT $75
- RH CV SHAFT FITTED $658
- RHF WHEEL BEARING AND HUB FLANGE FITTED $471
- [16]The second report, from Boettcher Motors, is dated 9 May 2022 and stated:
Please see below repairs required on Bronwyn Mackay’s CX9 – [registration omitted]
ODO – 208375 km
- Loud humming for LHF of vehicle. Found LHF wheel bearing failed requires replacement P&L $1062.70
…
- All wheel drive not working. Found transfer gear worn out. Transfer gear requires replacement P&L $7134.26
…
RHF window not working found window regulator failed and requires replacement P&L $869.05
- [17]The third report, also from Ultra Tune Redbank, is dated 11 October 2022 and stated:
After inspecting the vehicle, we have found that the brake master cylinder is leaking brake fluid and the brake booster is leaking air, causing the braking operation to fail.
This issue will continue to worsen the longer it is left unattended. This is a major safety concern.
...
Total price of above work if master cylinder can be reconditioned is $1455.00
Total price of above work if master cylinder needs to be replaced is $2935.00
[emphasis in original]
Consideration
- [18]In considering whether the motor vehicle was of acceptable quality, section 54(3) requires me to have regard to the nature and price of the goods. In this case, the motor vehicle was over 11 years old, and had an odometer reading of 190,120 km. The motor vehicle was not new, and this was reflected in the price of $15,920.
- [19]The requirement that the motor vehicle be of acceptable quality applies to the time of supply, which in this case was 11 August 2021. The applicants complained of mechanical issues shortly after purchase and provided a report from Ultra Tune Redbank dated 6 October 2021. Given that this report was obtained shortly after the time of supply, I accept that the issues raised in this report were present at the time of supply.
- [20]I note that the first report from Ultra Tune Redbank identifies repairs worth a total of $5,340. However, some of the repairs were listed as “monitor – not priority at the moment”. When these repairs are omitted, the value of the repairs is reduced to $2,433. These repairs principally comprise of:
- (a)rocker cover gaskets including tube seal;
- (b)RH CV shaft; and
- (c)RHF wheel bearing and hub flange.
- (a)
- [21]However, by the time the second report from Boettcher Motors was obtained on 9 May 2022, almost nine months had passed since the time of supply. According to the odometer reading of 208,375 km, the motor vehicle had driven over 18,000 km during this period. In these circumstances, there is insufficient evidence for me to be able to conclude that the issues identified in the report were present at the time of supply. In particular, the report does not express a view as to whether the issues were present at the time of supply.
- [22]By the time the third report from Ultra Tune Redbank was obtained on 11 October 2022, 14 months had passed since the time of supply. In these circumstances, there is insufficient evidence for me to be able to conclude that the issues identified in the report were present at the time of supply. In particular, I note that Ultra Tune Redbank did not note these issues in its earlier report dated 6 October 2021, which leads me to conclude that these issues were not apparent at the time of the earlier report.
- [23]The nature of motor vehicles is that the older they are the more they have been driven, the more likely it is that parts will fail and require repair. There is no evidence before me that the repairs identified in the second and third reports fall outside the scope of repairs ordinarily to be expected of a vehicle of that age and odometer reading. The onus of providing such evidence is on the applicants.
- [24]I find that a reasonable consumer fully acquainted with the state of the motor vehicle at the time of supply, particularly having regard to:
- (a)the existence of mechanical issues requiring $2,433 worth of immediate repairs as identified in the first report; and
- (b)the purchase price of $15,920,
- (a)
would not regard the motor vehicle as free from defects and durable.
Remedies
- [25]The remedy available to the consumer against the supplier depends in the first instance on whether the failure is a ‘major failure’. That term is defined in s 260 of the Australian Consumer Law to relevantly mean:
- (1)A failure to comply with a guarantee referred to in section 259(1)(b) that applies to a supply of goods is a major failure if:
- (a)the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or
- (b)the goods depart in one or more significant respects:
- (i)if they were supplied by description—from that description; or
- (ii)if they were supplied by reference to a sample or demonstration model—from that sample or demonstration model; or
- (c)the goods are substantially unfit for a purpose for which goods of the same kind are commonly supplied and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or
- (d)the goods are unfit for a disclosed purpose that was made known to:
- (i)the supplier of the goods; o
- (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
- [26]I am not satisfied that the identified repairs to the rocker cover gaskets including tube seal, RH CV shaft and RHF wheel bearing and hub flange would have occasioned any particular difficulties, or that they could not have taken place within a reasonable time. In those circumstances, I am not satisfied that there is a major failure for the purposes of the test contained in s 260. In particular, I do not accept that a reasonable consumer would not have acquired the vehicle.
- [27]The remedies for a failure to comply with a guarantee that is not a major failure are set out in s 259(2) of the Australian Consumer Law:
- (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.
- [28]In the present case, the respondent stated in oral submissions that it had engaged in repairs of the motor vehicle, but no evidence of this was filed. In particular, the respondent did not provide evidence that it had engaged in repairs to either some or all of the rocker cover gaskets including tube seal, RH CV shaft and RHF wheel bearing and hub flange. Given that these repairs were identified on 6 October 2021, and that approximately 16 months have passed since that time, I am of the view that the respondent has failed to remedy the failure within a ‘reasonable time’. In these circumstances, the second named applicant was entitled to reject the motor vehicle subject to section 262.
- [29]In order to obtain a refund, the consumer is required to reject within the ‘rejection period’. That term is defined in s 262(2) of the Australian Consumer Law to mean:
- (2)The rejection period for goods is the period from the time of the supply of the goods to the consumer within which it would be reasonable to expect the relevant failure to comply with a guarantee referred to in section 259(1)(b) to become apparent having regard to:
- (a)the type of goods; and
- (b)the use to which a consumer is likely to put them; and
- (c)the length of time for which it is reasonable for them to be used; and
- (d)the amount of use to which it is reasonable for them to be put before such a failure becomes apparent.
- [30]I consider that the applicants conveyed their rejection of the motor vehicle by text message on 11 October 2021, when they requested a replacement vehicle. This was confirmed by the filing of the application in the Tribunal on 20 June 2022. In these circumstances, I am satisfied that the rejection took place before the rejection period had ended,
- [31]In Haisman v Drive (Aust) Pty Ltd [2020] QCAT 44 at [24], I found that the Tribunal has jurisdiction to make an order requiring the supplier to pay to the consumer a stated amount of money, namely the amount of the refund payable under s 263(4)(a). In this case, the applicants have notified the respondent that the goods have been rejected in accordance with s 263(1) of the Australian Consumer Law, and the motor vehicle has been returned to the respondent in accordance with s 263(2). The second named applicant will be entitled to a refund of $15,920 pursuant to s 263(4).
Damages
- [32]The Tribunal is vested with jurisdiction in respect of actions under s 259(4) of the Australian Consumer Law, which provides:
The consumer may, by action against the supplier, recover damages for any loss or damage suffered by the consumer because of the failure to comply with the guarantee, if it was reasonably foreseeable that the consumer would suffer such loss or damage as a result of such a failure.
- [33]The applicants have claimed damages of $713.50 being the cost of a long term car rental commencing on 27 May 2022. I note that this followed the second report, from Boettcher Motors, dated 9 May 2022. As I have not accepted that the issues raised in this report were present at the time of supply, I am not satisfied that the applicants are entitled to these damages.
- [34]The applicants have also claimed damages being interest and costs under a finance contract entered into by the first named applicant with Fin One Ltd. Section 259(4) relates to damages ‘suffered by the consumer’. In this case, the consumer is the second named applicant as the purchaser of the motor vehicle. As the finance contract was entered into by the first named applicant, the costs under that contract are not recoverable under section 259(4). This is an unfortunate consequence of the purchase and financial arrangements entered into by the applicants.
- [35]For completeness, I note that there is no evidence before me that the finance contract is a ‘linked credit contract’ for the purposes of section 278 of the Australian Consumer Law. In the event that it was a linked credit contract, section 279(2) requires the consumer to bring the action against the linked credit provider and the supplier jointly. This did not occur in the present case.
Costs
- [36]Section 50C of the Fair Trading Act 1989 (Qld) provides that the Tribunal may make a costs order against the respondent in the amount of the prescribed filing fee paid by the applicants. This power is subject to s 102(1) of the Queensland Civil and Administrative Tribunal Act 2009 (Qld), which provides that the Tribunal may make a costs order if the interests of justice require it.
The applicants have been successful in obtaining a refund in the proceedings. In these circumstances, I consider that it is in the interests of justice to order the respondent to pay the filing fee of $358. While the applicants have also sought recovery of service fees of $73.40, this amount is not recoverable under section 50C.
Orders
- [37]The orders of the Tribunal are:
- The second named applicant is required to return the motor vehicle the subject of these proceedings to the respondent within 28 days of the date of these orders.
- The respondent is required to pay to the second named applicant the amount of $16,278 within 28 days of the date of these orders.
- [38]As noted above, the motor vehicle is the subject of an encumbrance in favour of One Fin Ltd. The encumbrance will need to be discharged upon return of the motor vehicle to the respondent. While I have not made orders to this effect, the parties will likely need to make arrangements whereby the refunded amount is applied towards discharging the encumbrance. Any excess funds can then be paid to the second named applicant, and any shortfall in funds will need to be met by the first named applicant. In the event that the parties are unable to make such arrangements between themselves, I will give them liberty to apply.