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  4. Moore v Sensei Pty Ltd ATF the Hackett Trust t/a Salvage Auto Sales - [2024] QCAT 147

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Moore v Sensei Pty Ltd ATF the Hackett Trust t/a Salvage Auto Sales[2024] QCAT 147

Moore v Sensei Pty Ltd ATF the Hackett Trust t/a Salvage Auto Sales[2024] QCAT 147

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Moore v Sensei Pty Ltd ATF the Hackett Trust t/a Salvage Auto Sales [2024] QCAT 147

PARTIES:

Dylan Pettet Moore

(applicant)

v

Sensei Pty Ltd atf the hackett trust t/as salvage auto sales

(respondent)

APPLICATION NO/S:

MVL051-23

MATTER TYPE:

Motor vehicle matter

DELIVERED ON:

8 April 2024

HEARING DATE:

22 March 2024

HEARD AT:

Brisbane

DECISION OF:

Member Poteri

ORDERS:

The Respondent must pay the sum of $5,034 into the nominated bank account of the Applicant by 4pm 22 April 2024. The Applicant must advise the Respondent of his nominated bank details prior to 22 April 2024.

CATCHWORDS:

COMPETITION AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – GUARANTEES, CONDITIONS AND WARRANTIES IN CONSUMER TRANSACTIONS – GUARANTEES, CONDITIONS AND WARRANTIES – Where the applicant purchased a second-hand vehicle from the respondent – where the applicant alleges that the vehicle is not fit for purpose because it is not durable pursuant to the Australian Consumer Law – where the applicant alleges that the vehicle has a major defect and has claimed a refund from the respondent – where the respondent alleges that the defect with the vehicle can be rectified.

Motor Dealers and Chattel Auctioneers Act 2014 (Qld), Schedule 1

Competition and Consumer Act 2010 (Cth), Schedule 2 - Australian Consumer Law, s 54, s 259, s 260, s 263

Fair Trading Act 1989 (Qld), s 50A

Grehan & Anor v WestPoint Autos Qld Pty Ltd [2022] QCATA 65

APPEARANCES & REPRESENTATION:

Applicant:

Self-represented

Respondent:

Self-represented

REASONS FOR DECISION

  1. [1]
    This matter came before me on 22 March 2024. The Applicant, Dylan Pettet Moore (‘Moore’) represented himself. The Respondent, Sensei Pty Ltd (‘Salvage Sales’) was represented by Dean Hackett (‘Hackett’), who stated that he was the principal and a director of Salvage Sales.
  2. [2]
    Moore filed an application in the Tribunal on 31 March 2023 seeking a refund of the purchase monies of $17,000 paid for a 2018 Holden Equinox registration 331ZXM (‘Holden’) purchased from Salvage Sales on 8 December 2022. Moore is also claiming some incidental costs.
  3. [3]
    The background facts of this claim are not in dispute. Moore paid $17,000 for the Holden which had travelled 90,408 kilometres. Salvage Sales says in a statement filed in the Tribunal on 29 June 2023 that the engine in the Holden had been replaced with an engine that had only travelled 36,150 kilometres just before the sale to Moore. Invoices for the purchase of the engine (dated 18 October 2022) and the labour costs required to install the engine (dated 10 October 2022) are annexed to the statement of Salvage Sales filed on 29 June 2023. No evidence was adduced, and no objection was raised at the hearing as to why the installation date is prior to the purchase date.
  4. [4]
    Moore purchased the Holden in December 2022. He then travelled some 4400 kilometres when on 8 February 2023 he noticed a misfire and took the Holden to Ultra Tune, Caboolture where some servicing work was undertaken by UltraTune, Caboolture. The cost of this work was $600.80.
  5. [5]
    The Holden did not cause any problems until 12 February 2023 when Moore drove a short distance from his house and a warning light appeared. He travelled back to his house and checked the oil levels and noticed that there was no oil in the engine. Moore then carried out a service of the engine and the engine was topped up with the recommended oil. After the service there was no warning light and the Holden appeared to then drive normally.
  6. [6]
    Moore then travelled a distance of approximately 1,000 kilometres and he was travelling on the highway near Maitland when the warning light appeared and he travelled a few kilometres to the nearest exit where he found the vehicle again had no oil in the engine. Moore then arranged for the Holden to be towed to UltraTune at Maitland. UltraTune again undertook some minor repairs and topped the engine with oil. On 15 February 2021 Moore collected the Holden from UltrTune, Maitland and took extra oil with him in case he needed to top up the engine with oil.
  7. [7]
    It was at this point that Moore informed Salvage Sales of the problem with the engine.
  8. [8]
    Moore then attempted to drive north from Maitland and after approximately 100 kilometres the vehicle started misfiring again, so he had the Holden towed back to UltraTune, Maitland.
  9. [9]
    The Holden was inspected by UltraTune, Maitland, who provided an account and a short report on the engine dated 15 February 2023. The report states that there is smoke blowing from the exhaust and concludes that the possible problem is an internal fault with the engine.
  10. [10]
    Salvage Sales arranged for a Paul Smith (‘Smith’), motor mechanic, to inspect the Holden on 30 May 2023. He has provided a report and affidavit which was filed in the Tribunal on 29 June 2023. Smith concludes that there is an internal problem with the engine and to make a final diagnosis would require the engine to be disassembled. Smith makes a comment that the problem may have been caused by the engine oil change undertaken by Moore. Smith makes this comment after inspecting a technical service bulletin, but he did not fully inspect the engine or undertake any testing of the oil. I cannot accept this conclusion as it is not based on any independent testing.
  11. [11]
    On the facts before me it is apparent that there is an internal problem with the engine where oil is leaking from the engine. There is no evidence before me as to the reason for the internal problems with the engine. Further, Moore has stated that he travelled some 4,000 kilometres before problems started with the engine. Also, the evidence before me shows that the Holden was being driven in an ordinary everyday manner.

LEGISLATION AND LAW

  1. [12]
    The relevant provisions of the Australian Consumer Law (‘ACL’) are contained in sections 54, 259, 260 and 263 of Schedule 2 of the Competition and Consumer Act 2010 (Cth). These provisions are outlined in full:

54 Guarantee as to acceptable quality

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

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

  1. (2)
    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
  2. (b)
    acceptable in appearance and finish; and
  3. (c)
    free from defects; and
  4. (d)
    safe; and
  5. (e)
    durable;

as a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods), would regard as acceptable having regard to the matters in subsection (3).

  1. (3)
    The matters for the purposes of subsection (2) are:
  1. (a)
    the nature of the goods; and
  2. (b)
    the price of the goods (if relevant); and
  3. (c)
    any statements made about the goods on any packaging or label on the goods; and
  4. (d)
    any representation made about the goods by the supplier or manufacturer of the goods; and
  5. (e)
    any other relevant circumstances relating to the supply of the goods.
  1. (4)
    If:
  1. (a)
    goods supplied to a consumer are not of acceptable quality; and
  2. (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.

  1. (5)
    If:
  1. (a)
    goods are displayed for sale or hire; and
  2. (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.

  1. (6)
    Goods do not fail to be of acceptable quality if:
  1. (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
  2. (b)
    they are damaged by abnormal use.
  1. (7)
    Goods do not fail to be of acceptable quality if:
  1. (a)
    the consumer acquiring the goods examines them before the consumer agrees to the supply of the goods; and
  2. (b)
    the examination ought reasonably to have revealed that the goods were not of acceptable quality.

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
  2. (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
  2. (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
  2. (ii)
    subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection.
  1. (3)
    If the failure to comply with the guarantee cannot be remedied or is a major failure, the consumer may:
  1. (a)
    subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection; or
  2. (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.
  1. (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.
  2. (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.
  3. (6)
    To avoid doubt, subsection (4) applies in addition to subsections (2) and (3).
  4. (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. (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. (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 depart in one or more significant respects:
  1. (i)
    if they were supplied by description—from that description; or
  2. (ii)
    if they were supplied by reference to a sample or demonstration model—from that sample or demonstration model; or
  1. (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
  2. (d)
    the goods are unfit for a disclosed purpose that was made known to:
  1. (i)
    the supplier of the goods; or
  2. (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

  1. (e)
    the goods are not of acceptable quality because they are unsafe.
  1. (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. (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
  2. (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.

  1. (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. (1)
    This section applies if, under section 259, a consumer notifies a supplier of goods that the consumer rejects the goods.
  2. (2)
    The consumer must return the goods to the supplier unless:
  1. (a)
    the goods have already been returned to, or retrieved by, the supplier; or
  2. (b)
    the goods cannot be returned, removed or transported without significant cost to the consumer because of:
  1. (i)
    the nature of the failure to comply with the guarantee to which the rejection relates; or
  2. (ii)
    the size or height, or method of attachment, of the goods.
  1. (3)
    If subsection (2)(b) applies, the supplier must, within a reasonable time, collect the goods at the supplier’s expense.
  2. (4)
    The supplier must, in accordance with an election made by the consumer:
  1. (a)
    refund:
  1. (i)
    any money paid by the consumer for the goods; and
  2. (ii)
    an amount that is equal to the value of any other consideration provided by the consumer for the goods; or
  1. (b)
    replace the rejected goods with goods of the same type, and of similar value, if such goods are reasonably available to the supplier.
  1. (5)
    The supplier cannot satisfy subsection (4)(a) by permitting the consumer to acquire goods from the supplier.
  2. (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.
  1. [13]
    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.
  2. [14]
    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 outline the definitions of “acceptable quality” and the context in which these definitions apply.
  3. [15]
    An analysis of the ACL and how it applies to motor 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:
  1. (a)
    The requisite standard is set out in paragraphs 32 and 49. These paragraphs are outlined as follows:
  1. [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.
  2. [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]

  1. [16]
    The test set out in s 54 of the 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.
  2. [17]
    Whilst there has been no internal inspection of the engine, I accept that there has been an internal failure of the engine caused by an unknown reason. I find that the Holden was not of acceptable quality because it is not durable. An ordinary consumer would not expect the engine to cause any issues after travelling the relative short distance of only approximately 6,000 kilometres. I again note that Salvage Sales say that the engine was replaced with an engine that had only travelled approximately 36,000 kilometres shortly before the sale. See s 54(2) of the ACL.
  3. [18]
    Moore has not alleged that Salvage Sales made any representations that induced him into making the purchase.
  4. [19]
    Moore says that he arranged for the Holden to be transported to Glen Innes in New South Wales. The Holden has not been repaired.
  5. [20]
    The statutory warranties under Schedule 1 of the Motor Dealers and Chattel Auctioneers Act 2014 (Qld) do not apply as Moore has not followed the prescribed steps set out in Schedule 1.

FINDINGS

  1. [21]
    Salvage Sales have breached the guarantee as to acceptable quality in the sale of the Holden to Moore. I take into account that this was a second-hand vehicle where the engine had travelled approximately 36,000 kilometres.
  2. [22]
    The evidence shows that Moore was alerted to the problems with the engine on 8 and 12 February 2023. That is a few months after purchase. On 12 February 2023 the Holden had no oil in the engine. Moore then serviced the Holden and drove a further 1,000 kilometres where the Holden encountered problems near Maitland in New South Wales. Moore should have alerted Salvage Sales when the problems first arose in February 2023, especially on 12 February 2023 when there was no oil in the engine. The fact that such a large amount of oil was escaping from the engine should have alerted the ordinary consumer that there were some problem with the engine that should be immediately rectified. I am surprised that no mechanic who inspected the Holden has reported the presence of oil on the outside of the engine or on the ground underneath where the Holden was parked.
  3. [23]
    At this early stage in February 2023 Moore should have alerted Salvage Sales of the problem with the engine and requested and/or required Salvage Sales to deal with the problem. This would have given Salvage Sales the opportunity to inspect the engine and, if necessary, rectify the problem with the engine. No such request or demand was made. 
  4. [24]
    It appears from the statement of Hackett filed in the Tribunal on 29 June 2023 that he was prepared to assist Moore to source a replacement engine and he says that the Holden should have been returned to UltraTune at Caboolture on or about 12 February 2023 when there was no oil in the engine instead attempting to service the Holden himself.
  5. [25]
    At that stage the Holden was in Caboolture which is not a great distance from Salvage Sales who have offices on the Gold Coast. Certainly not as far away as Maitland in New South Wales.
  6. [26]
    Moore and Hackett undertook “without prejudice” discussions in a break in the proceedings but no compromise was achieved. Hackett advised the Tribunal that he was prepared to offer $4,500 for compensation to have the engine replaced. Moore advised the Tribunal that did not want to accept this offer and he wanted a full refund (and other costs) of the purchase price of the Holden.
  7. [27]
    Hackett says that the engine can be replaced with another engine very easily and maintains that the Holden should have been returned to Salvage Autos and that these repairs would have been undertaken at Salvage Auto’s cost. He objects to the claims for the towing and other costs incurred in New South Wales. 
  8. [28]
    On the evidence before me I find that Moore has not established that the breach of s 54 of the ACL by Salvage Sales is a “major failure” as outlined in s 260 of the ACL. No evidence has been adduced as to the exact cause of the engine failure and Moore may have contributed to further damage to the engine after he was alerted to the problems with the engine on 8 and 12 February 2023.
  9. [29]
    Moore advised the Tribunal that the only relief that is acceptable to him is to reject the Holden and for Salvage Sales to refund him the purchase cost plus other incidental costs. Moore has not requested or required Salvage Sales to remedy the defect in the engine as outlined in s 259(2) of the ACL.
  10. [30]
    Section 259(4) states that a consumer may recover damages for any loss or damage suffered by the consumer because of the failure to comply with the guarantee. The loss or damage must be foreseeable.
  11. [31]
    I do not allow the claim of $1,548 made by Moore for the cost of the towing near Maitland. I make this finding because Moore had the opportunity to have the Holden inspected and possibly repaired by Salvage Sales when the Holden was near Brisbane and closer to the premises of Salvage Sales. Moore did not take that opportunity.
  12. [32]
    I find that the following loss or damage was foreseeable by Salvage Sales;
  1. (i)
    Cost of replacement engine using Salvage Sales 2022 figure plus a notional inflation increase of 5% - $2,100; plus
  2. (ii)
    Cost of labour to remove old engine and replace the new engine using the Salvage Sales 2022 figures plus a notional inflation figure of 5% - $1,780; plus
  3. (iii)
    Cost of application fee to the Tribunal - $367; plus
  4. (iv)
    Cost of report from UltraTune Metford - $186.10; plus
  5. (v)
    Cost of work done at UltraTune Caboolture - $600.80.

Total Cost is $5,034 (rounding up the figures)

  1. [33]
    Therefore, I find that compensation should be paid by Salvage Sales to Moore in the sum of $5,034.
  2. [34]
    I note that Moore gave evidence that he has very limited resources and the Holden remains unrepaired at Glen Innes. I presume that obtaining and replacing the right engine from Glen Innes would be extremely difficult. Hackett advised the Tribunal that he would be prepared to assist Moore to overcome the problems with the Holden. He committed to paying Moore the sum of $4,500 even if I did not make any orders for compensation against Salvage Sales. I trust that Hackett will reach out to Moore to assist him to have the Holden returned to the Gold Coast where it may be easier, quicker and cheaper for Salvage Sales to facilitate the replacement of the engine.

Footnotes

[1] [165].

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

Close

Editorial Notes

  • Published Case Name:

    Moore v Sensei Pty Ltd ATF the Hackett Trust t/a Salvage Auto Sales

  • Shortened Case Name:

    Moore v Sensei Pty Ltd ATF the Hackett Trust t/a Salvage Auto Sales

  • MNC:

    [2024] QCAT 147

  • Court:

    QCAT

  • Judge(s):

    Member Poteri

  • Date:

    08 Apr 2024

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
Australian Competition and Consumer Commission v Mazda Australia Pty Ltd [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 [2003] FCAFC 151
1 citation
Jump To
Cite 1 - [2003] FCAFC 151

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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