Landis v Westpoint Autos[2023] QCAT 540

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

1. [1]
   The following reasons were delivered orally on 8 June 2023 at the Brisbane Registry of the Queensland Civil and Administrative Tribunal (‘QCAT’).
2. [2]
   On the 2^nd of December 2022, I heard the application and reserved my decision.  I am now in a position to deliver my decision with reasons in relation to that application, MVL093 of 2022.
3. [3]
   On the 16^th of April 2021, Sarah Landis, “Ms Landis”, filed an application for minor civil dispute, consumer dispute, with the tribunal.  The respondent is Westpoint Autos, (the ‘dealer’).  Ms Landis agreed to purchase a motor vehicle, (the ‘vehicle’), described in the contract order form signed by the parties on the 27^th of January 2021 as being a Haval model H2 2WD Auto Lux, 1.5 litre petrol, 20 YM, with onyx paint, and having a VIN LGWEE4A45LH927492 and engine number 2025009377.  Ms Landis says that the vehicle was ordered with black interior trim, and this is not disputed by the dealer, although the trim colour is not noted on the contract/order form.  The purchase price of the vehicle was $25,484.
4. [4]
   Ms Landis says in her application that the vehicle she agreed to purchase was not the vehicle the dealer attempted to have her take delivery of, on 26 February 2022, and that she rejected that vehicle before taking delivery.  Ms Landis says that the dealer effected settlement of the purchase contract with Ms Landis’s financier the day before delivery of the vehicle was to take place, without the knowledge or consent of Ms Landis.  Ms Landis says that the vehicle fails to meet the Australian Consumer Law guarantee relating to the supply of goods by description and the guarantee relating to the supply of goods by sample or demonstration model, and that the failure is a major failure.  Ms Landis is seeking relief under the Australian Consumer Law (‘ACL’), which is schedule 2 to the Competition and Consumer Act 2010 (Cth) (‘CCA’),^[1] for the dealer’s failure to meet the guarantees.
5. [5]
   Ms Landis is seeking a refund of the deposit of $1000 paid by her, plus the balance of the purchase price of the vehicle paid by her financier, $24,485, plus finance costs $1573.85 interest, finance set-up fee $175, finance maintenance fee $60, insurance costs 697.93, a total of $26,991.78.  Ms Landis is also seeking to recover her filing fee in this application, $276.75.
6. [6]
   Firstly, I will consider if the tribunal has jurisdiction to hear and determine the application and order a refund against a supplier of a motor vehicle under the ACL where the purchase price of the vehicle is $25,485.  The tribunal is required to find its power to hear and determine disputes in either the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’),^[2] or an enabling act:  QCAT Act, section 9(1).^[3]  An enabling act confers original jurisdiction if it confers the power to make an application or referral to the tribunal in relation to a matter under the enabling act:  QCAT Act, section 9(3).  The ACL has been adopted by the Fair Trading Act 1989 (Qld) (‘FTA’), section 16,^[4] and when applied is referred to as the Australian Consumer Law (Queensland) (the ‘ACL (Queensland)’).
7. [7]
   Section 15 of the FTA provides that the text of the ACL (Queensland) consists of schedule 2 to the CCA.^[5]  The FTA is an enabling act.  Section 50A of the FTA confers jurisdiction on the tribunal in relation to motor vehicles in respect of certain actions under the ACL listed in the table to the section where the amount or value of relief is not more than $100,000.^[6]  “Motor vehicle” has the meaning provided in section 12 of the Motor Dealers and Chattel Auctioneers Act 2014, section 12(1)(b).^[7]  I accept that the application relates to a motor vehicle and seeks relief an amount – of an amount of not more than $100,000.
8. [8]
   The tribunal in Haisman v Drive (Australia) Pty Ltd,^[8] and the appeal – appeal tribunal in Howarth & Anor v Biscamoss Pty Ltd,^[9] have accepted that the tribunal has power under section 50A of the FTA to order a refund.  The learned members decided that a refund is an order requiring a party to pay a stated amount to a stated person, adopting reasoning of the appeal panel of the New South Wales Civil and Administrative Tribunal, NCATA, in Lam v Steve Jarvin Motors Pty Ltd.^[10]

Guarantees

9. [9]
   The ACL (Queensland), subdivision A of division 1 of part 3-2 provides:^[11]

56 Guarantee relating to the supply of goods by description

1. If:

1. a person supplies, in trade or commerce, goods by description to a consumer; and
2. the supply does not occur by way of sale by auction;

there is a guarantee that the goods correspond with the description.

2. A supply of goods is not prevented from being a supply by description only because, having been exposed for sale or hire, they are selected by the consumer.
3. If goods are supplied by description as well as by reference to a sample or demonstration model, the guarantees in this section and in section 57 both apply.

57 Guarantees relating to the supply of goods by sample or demonstration model

1. If:

1. a person supplies, in trade or commerce, goods to a consumer by reference to a sample or demonstration model; and
2. the supply does not occur by way of sale by auction;

there is a guarantee that:

3. the goods correspond with the sample or demonstration model in quality, state or condition; and
4. if the goods are supplied by reference to a sample—the consumer will have a reasonable opportunity to compare the goods with the sample; and
5. the goods are free from any defect that:

1. would not be apparent on reasonable examination of the sample or demonstration model; and
2. would cause the goods not to be of acceptable quality.

2. If goods are supplied by reference to a sample or demonstration model as well as by description, the guarantees in section 56 and in this section both apply.

10. [10]
    The ACL (Queensland), subdivision A of division 1 of part 5-4 provides:^[12]

259 Action against suppliers of goods

1. A consumer may take action under this section if:

1. a person (the supplier) supplies, in trade or commerce, goods to the consumer; and
2. 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:

1. the consumer may require the supplier to remedy the failure within a reasonable time; or
2. 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. 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
2. 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:

1. subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection; or
2. 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.

Findings

11. [11]
    The vehicle described in the contract/order form signed by the parties on 27 January 2021, with a VIN LGWEE4A45LH927492 and engine number 2025009377, was not the vehicle that the dealer attempted to deliver to Ms Landis on 26 February 2021 and that she rejected.  The vehicle that the dealer attempted to have Ms Landis take delivery of on 26 February had a different VIN and engine number.  The vehicle did not correspond with the description of the vehicle in the contract/order form and consequently failed to meet the guarantee that the goods correspond with the description as provided in section 56 of the ACL (Queensland).^[13]
12. [12]
    The vehicle that the dealer attempted to deliver to Ms Landis had an interior trim colour of red and black.  Ms Landis had ordered a vehicle with a trim colour of plain black, the same as the trim colour as the demonstration vehicle she had been shown.  This is not disputed by the dealer.  The vehicle interior trim colour did not correspond with the interior trim colour of the demonstration model, which Ms Landis required and which she had specifically made known to the dealer’s salesman.  The vehicle consequently failed to meet the guarantee that the goods correspond with the sample or demonstration model in state, as provided in section 57 of the ACL (Queensland).^[14]

Remedies

13. [13]
    Section 260 of the ACL (Queensland) provides:^[15]

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:

1. the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or
2. the goods depart in one or more significant respects:

1. if they were supplied by description—from that description; or
2. if they were supplied by reference to a sample or demonstration model—from that sample or demonstration model; or

3. 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
4. the goods are unfit for a disclosed purpose that was made known to:

1. the supplier of the goods; or
2. 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

5. 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:

1. 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
2. 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.

14. [14]
    I am satisfied that Ms Landis rejected the vehicle at the point of delivery because the interior trim colour was black with red trim, when she had ordered the vehicle with plain black interior trim.  I am satisfied that the dealer’s failure to supply the vehicle with the interior trim colour as ordered was a major failure of the guarantee that the goods correspond with the description and/or of the guarantee that the goods correspond with the sample or demonstration model in quality, state, or condition.
15. [15]
    I am satisfied that a reasonable consumer would have rejected the goods because the interior trim colour of their brand-new motor vehicle was not what they had ordered.  A new motor vehicle is a significant purchase.  It is likely to be owned by a consumer for a number of years.  A reasonable consumer would understandably be unhappy that the vehicle did not have the interior trim colour they ordered and might not unreasonably reject the vehicle.  I am satisfied that the vehicle would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure, as the goods depart in one or more significant respects from their description contained in the order contract or from the demonstration model which Ms Landis based her order on.
16. [16]
    I further find that the supply of the vehicle is a major failure because:

    1. the failure is one of two or more failures to comply with a guarantee referred to in section 259(1)(b) that apply to the supply;^[16] and
    2. the failure of the guarantee in section 56 and the guarantee in 57,^[17] and that the vehicle would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of those failures, taken as a whole.
17. [17]
    If it can be said that, at any stage prior to rejection of the vehicle by Ms Landis, that ownership had been transferred to her, it is clear that ownership of the vehicle would have reverted to the dealer upon Ms Landis’s rejection of the vehicle; however, I am of the view that ownership did not at any time vest in Ms Landis.
18. [18]
    The dealer has submitted that it has made reasonable attempts to ensure Ms Landis received the vehicle she ordered.  I disagree.  My view is not dissimilar to that of Ms Landis.  I believe that the dealer attempted to have Ms Landis take a vehicle she clearly did not order.  When faced with the resolve of Ms Landis not to be bullied, the dealer scrambled around to find a vehicle that met the description of the vehicle that Ms Landis ordered, insofar as the colour of the trim was concerned.  The dealer did find such a vehicle very quickly, but by that time the dealer had managed to alienate Ms Landis altogether and was unable to negotiate her into the replacement vehicle.
19. [19]
    It might be argued that at that point Ms Landis did not act reasonably in connection with the dealer’s attempts to negotiate a fresh deal; however, she was under no obligation to do so.  Her obligation was to act reasonably in the issue of rejecting the original vehicle, which I find that she did.  There was nothing more for her to do.  At that point, she was entitled to a refund of the purchase price, which had been paid out by her financiers unbeknownst to her and entitled to be compensated for any consequential loss arising out of the dealer’s failure to meet the ACL guarantees. From that point, the dealer appears to have made poor commercial decisions.  The dealer’s actions in delivering the substitute vehicle to Ms Landis’s place of work in the face of her clear rejection of the vehicle and delivering the keys to a third party are reprehensible.  Ms Landis has no responsibility for the vehicle from the moment she rejected it.
20. [20]
    Ms Landis is entitled to substantive relief as ordered below.  In relation to her claim for compensation for insurance costs, I disallow that part of the claim, because I can see no reason why any insurance policy could not have been immediately terminated and the premium refunded to Ms Landis.  As Ms Landis has been mostly successful in her claim, I award her the application filing fee.

Orders

1. I order that the respondent pay to the applicant the sum of $26,570.60, made up as follows: 
   1. refund of purchase price, $24,485;
   2. interest on finance costs, $1573.85;
   3. finance set-up costs, $175;
   4. finance maintenance fee, $60; and
   5. QCAT filing fee, $276.75,

on or before 28 August 2023.