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  4. Thompson v Apollo Investments Pty Ltd t/as Kratzmann Caravans - [2024] QCAT 254

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Thompson v Apollo Investments Pty Ltd t/as Kratzmann Caravans[2024] QCAT 254

Thompson v Apollo Investments Pty Ltd t/as Kratzmann Caravans[2024] QCAT 254

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Thompson v Apollo Investments Pty Ltd t/as Kratzmann Caravans [2024] QCAT 254

PARTIES:

Tanya RosE thompson

(applicant)

v

Apollo investments pty ltd t/as kratzmann caravans

(respondent)

APPLICATION NO/S:

MVL024-23

MATTER TYPE:

Motor vehicle matter

DELIVERED ON:

18 June 2024

HEARING DATE:

8 March 2024

HEARD AT:

Brisbane

DECISION OF:

Member D Brown – Presiding Member Bertelsen

ORDERS:

  1. Tanya Thompson is required to return the caravan subject of these proceedings to Apollo Investments Pty Ltd t/as Kratzmann Caravans within 14 days of the decision.
  2. Apollo Investments Pty Ltd t/a Kratzmann Caravans is to pay Tanya Thompson $90,189.40 within 14 days of the decision.

CATCHWORDS:

TRADE AND COMMERCE – COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – GUARANTEES, CONDITIONS AND WARRANTIES IN CONSUMER TRANSACTIONS – whether caravan 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 (Queensland), s 3, s 54, s 56, s 259, s 260, s 262, s 263

Fair Trading Act 1984 (Qld), s 50A

Motor Dealers and Chattel Auctioneers Act 2014 (Qld), s 12

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 9, s 10, s 100, s 102

Australian Competition and Consumer Commission v Jayco Corporation Pty Ltd (2020) FCA 1672

Baas v JB Hi Fi Group Pty Ltd [2021] NSWCATAP 10

Cary Boyd v Agrison Pty Ltd [2014] VMC 23

Campbell v Caravan & RV Central Pty Ltd t/as Avan New South Wales & FCA Australia Pty Ltd [2016] NSWCATCD 90

Haisman v Drive (Aust) Pty Ltd [2020] QCAT 44

Holt-Lea v O'Connor & Anor (2022) QCAT 363

Medtel Pty Ltd v Courtney (2003) 130 FCR 182

Morphy v Beaufort Townsville Pty Ltd [2018] VCAT 1520

Nuth v Soel Products Australia Pty Ltd trading as Caravan RV CQ [2020] QCAT 369

Vautin v BY Winddown, Inc (formerly Bertram Yachts) (No 4) [2018] FCA 426

APPEARANCES & REPRESENTATION:

 

Applicant:

Ms Thompson was self-represented

Respondent:

Liam McCarthy – Dealer Principal and Rob Mitchell - Fix Operational Manager.

REASONS FOR DECISION

  1. [1]
    On 10 February 2023 the applicant, Mrs Tanya Thompson, filed an application – motor vehicle dispute with the Tribunal, seeking a refund of her caravan purchased from the respondent, Apollo Investment Pty Ltd t/a Kratzmann Caravans plus additional incidental costs totalling $93,240.87.
  2. [2]
    The applicant entered into a contract with the respondent on 21 August 2022 to purchase a Winsor Genesis caravan. The purchase price was $89,395.00 which included some additional extras above the base model price of $86,000 including an extended warranty, stability control and the inclusion of an oven.
  3. [3]
    The applicant asserts that the caravan was not fit for purpose and had multiple defects in breach of the Australian Consumer Law and seeks to reject and return the caravan and obtain a full refund for the purchase price.

The Jurisdiction of the Tribunal in Motor Vehicle Disputes

  1. [4]
    The Tribunal is empowered to hear and determine disputes in accordance with the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’) and the “enabling Act”.[1]
  2. [5]
    The applicant seeks relief under the Australian Consumer Law, which is schedule 2 to the Competition and Consumer Act 2010 (Cth) (‘ACL’). The relief sought by the applicant is a refund and damages for additional incidental costs.
  3. [6]
    Section 50A of the Fair Trading Act 1989 (Qld) (‘Fair Trading Act’) provides that the Tribunal has jurisdiction in relation to motor vehicle matters where an application is brought under a relevant provision of the ACL against a supplier or manufacturer for failure to comply with statutory guarantees, and no more than $100,000 is sought. The Tribunal may make orders, including orders require a party to pay a stated amount to another person.
  4. [7]
    Motor vehicle’ is defined in s 12(1) of the Motor Dealers and Chattel Auctioneers Act 2014 (Qld) to mean:
    1. a vehicle that moves on wheels and is propelled by a motor that forms part of the vehicle, whether or not the vehicle is capable of being operated or used in a normal way; or
    2. a caravan.
  5. [8]
    The applicant’s caravan falls within this definition.
  6. [9]
    Pursuant to s 3(1)(b) of the ACL, a person is taken to have acquired goods as a consumer if “the goods were of a kind ordinarily acquired for personal, domestic or household use or consumption”. This includes the applicant’s motor vehicle.
  7. [10]
    Although the applicant asserts that with interest and incidental damages her total loss is over $100,000, the applicant is only seeking a maximum of $100,000, from the Tribunal and accordingly there is jurisdiction to hear the motor vehicle dispute.

Guarantee of acceptable quality

  1. [11]
    Section 54(1) of the ACL provides that, where a person supplies goods in trade or commerce, the goods are guaranteed to be of ‘acceptable quality’.
  2. [12]
    Goods are defined as being of “acceptable quality” if they are:
    1. fit for all the purposes for which goods of that kind are commonly supplied;
    2. acceptable in appearance and finish;
    3. free from defects;
    4. safe; and
    5. durable.
  3. [13]
    The test of acceptable quality requires a test in terms of the what the 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 following matters:
    1. the nature of the goods;
    2. the price of the goods;
    3. any statements made about the goods on any packaging or label on the goods;
    4. any representation made about the goods by the supplier or manufacturer of the goods; and
    5. any other relevant circumstances relating to the supply of the goods.[2]
  4. [14]
    The Macquarie Dictionary defines the word ‘defect’ to mean ‘a fault’ or ‘imperfection’.
  5. [15]
    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’.
  6. [16]
    The time at which goods are to be of acceptable quality is the time at which the goods are supplied to the consumer.[3] 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.
  7. [17]
    In Morphy v Beaufort Townsville Pty Ltd,[4] the Victorian Civil and Administrative Tribunal stated:

[T]he context of the section clearly requires that the question of durability be determined by having regard to how long a ‘reasonable consumer’ would expect the goods to last, taking into account the price paid, the nature of the goods and the representations made about the goods.

  1. [18]
    The price of the vehicle is a relevant consideration, as a reasonable consumer would be entitled to expect that a high cost item would be durable and be capable of safe and effective use over a number of years.[5]

Relief under the Fair Trading Act and Australian Consumer Law

  1. [19]
    The remedy available to the consumer against the supplier depends in the first instance on whether the failure is a ‘major failure.’[6] In order for the applicant to seek a refund for the vehicle, as sought in the application, there needs to be a failure to comply with the guarantee and the failure needs to be a major failure and/or unable to be remedied.
  2. [20]
    “Major failure” is defined[7] to include circumstances where the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure or are unfit for purpose or not of acceptable quality as they are unsafe.
  3. [21]
    In this case the applicant asserts there are a number of issues with the caravan. 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 two 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.[8]
  4. [22]
    It has been held that an accumulation of individually minor defects can be aggregated to amount to a major failure giving rise to a right to reject the goods. In Cary Boyd v Agrison Pty Ltd,[9] the Court held that:

[D]espite the use of ‘a’, to suggest the singular, ‘a major failure’ might be constituted by a series of specific and individual defects which taken as a whole constitute one major failure. I also agree with this interpretation of s 260 of the ACL.

  1. [23]
    The ACL provides remedies, including a refund, in the event that there is not a major failure, and the supplier does not remedy the failure with a reasonable time (s 259 (2)(b)(ii)).  If it was found that any defects in this matter were not a major failure, this remedy would not be available to the applicant, due to the applicant not providing the respondent a reasonable opportunity to remedy the failures and repair any defects.

Applicant’s position

  1. [24]
    Mrs Thompson states that she attended the caravan and camping expo on 21 August 2022 and entered into a contract to purchase a brand-new Winsor Genesis 220 MD caravan for $89,395 which included some additional inclusions including an oven and extended warranty. Mrs Thompson also identified some safety concerns to be rectified in her caravan, including the sharp edges of the bed frames and edging to the bunks. Mrs Thompson asserts that the oven was a deal breaker for her, given the caravan was to be used as a family caravan, and she expressed this at the time of purchase.
  2. [25]
    Mrs Thompson obtained possession of the caravan on 30 September 2022. On this date Mrs Thompson identified numerous defects and safety issues which had not been addressed including multiple warped cupboard doors, a hole in the vinyl flooring, a missing clip-on jockey wheel bolt, the front protection metal work falling off, and sharp bunk edging. Mrs Thompson was concerned the caravan was a safety hazard, had missing or non-working parts and as such was not fit for purpose. Therefore, before taking possession of the caravan on 30 September, she requested to terminate the contract and sought a refund under the Consumer Guarantee. However, this was refused by the respondent. The respondent company did however advise that they would lodge a warranty claim for the applicant in relation to the defects. At the time of filing the application four and a half months later in February 2023, Mrs Thompson had not heard further from the respondent company about the warranty claim.
  3. [26]
    Upon leaving the respondent’s site with the caravan, Mrs Thompson states she was stopped by a staff member advising the cabling connecting the caravan to the towing vehicle was dragging on the ground, demonstrating a safety issue with the cabling length.
  4. [27]
    Upon returning home on 30 September 2024 Mrs Thompson identified that the remote from the television was missing, and the ignition button on the stove top was not functioning. She called the respondent company to raise these issues.
  5. [28]
    On 22 October 2022 Mrs Thompson sent a formal letter to the respondent confirming she was rejecting the caravan due to it not being of acceptable quality due to defects, including safety and durability issues; it did not match the description in the contract; it was not fit for the stated purpose and repairs were not provided in a reasonable period. The applicant provided details including photographs of the numerous defects that she identified with the caravan and sought a full refund.
  6. [29]
    The concerns with the caravan identified by the applicant were:
    1. No oven fitted as per the contract.
    2. Missing clip on the jockey wheel bolt.
    3. Front stone protection metal work was extruding and failing off at pickup requiring the dealer to glue it back on, but it is not flush.
    4. Wiring connecting the caravan to the vehicle is hanging between wheels.
    5. Entry step dented, the coating is coming off and the runners retracting.
    6. Second water tank monitoring not working. Upon returning from a trip the water pump did not stop running when turned off.
    7. No television remote control device.
    8. Stove’s electrical spark lighter does not work.
    9. Raised screw underfloor in front of fridge and flooring already damaged.
    10. Hole in vinyl poorly concealed by poly material and is a trip hazard.
    11. Numerous cupboard doors misaligned, warped and marked.
    12. Numerous sharp edges on bunk beds posing a safety hazard of cutting hands and feet. The applicant sustained a cut in her hand from holding the bunk edging.
    13. Toilet roll holder fell off on first trip and will not remain on while travelling.
    14. Poor fitting and finish on exposed screws in ceiling edges.
    15. Broken shower edging.
    16. Insufficient number of keys supplied.
    17. Sloppy workmanship which is not up to the standard expected of a brand-new caravan that costed over $80,000.
    18. Water pooling on top of caravan near the hatch raising concerns of water egress into the caravan, leaks, rusting and damage to the roof.
    19. Water pooling on top of caravan near aerial and air conditioning unit causing concerns of water egress, leaks, rusting and damage to the roof and potential to cause bowing and damage to satellite and air conditioning unit. There are also flappable cables exposed which could be damaged by trees, water or sunlight.
    20. Air conditioner insider the caravan dirty and the caravan roof was not cleaned on handover showing a lack of quality control.
  7. [30]
    The applicant provided a report from Alliance motor assessing and valuation conducted by Mr Mark Hill dated 10 January 2023 (‘the Alliance report’). Mr Hill has experience in panel beating for 40 years and has been an assessor for 15 years, during which time he has assessed panel repairs on all makes and models of vehicles and caravans, and stated he is familiar with the Windsor range of vehicles including the Genesis 220. In the hearing Mr Hill estimated he had assessed approximately 500 caravans but acknowledged although he had assessed other Windsor caravans this was the first Genesis 220 he had assessed.
  8. [31]
    The Alliance report assessed the condition of the caravan and provided an estimate of the cost of repair. The report identified a large number of concerns in line with concerns raised by the applicant and also identified a water leak into the front storage hatch, the main entry door and the air vent on the left hand side and that the windows had not been sealed properly which will likely cause issues at a later stage.  The report states the issues with the caravan are consistent with defects in the manufacture of the caravan and that it was uneconomical to repair and recommended the owner be paid out.
  9. [32]
    The applicant is seeking a refund from the respondent of the caravan plus additional incident costs relating to the cost of the expert report, the filing fee, service fee and insurance and registration, capped at $100,000.

Respondent’s position

  1. [33]
    The respondent acknowledges that there are some defects with the applicant’s caravan. However, it states, these are minor and can be remedied quickly, easily and with minimal cost. The respondent disputes there are any major defect/s and disputes the caravan is not fit for purchase or of “merchantable quality” and states any defects do not affect the use of the caravan.
  2. [34]
    The respondent disputes the contents of the Alliance report, stating the information is inaccurate and the quotes are excessive, and queries whether the inspection was in fact carried out.
  3. [35]
    The respondent disputes the concerns in relation to water on the roof and queried the ground on which the caravan sits and whether it is level, as uneven ground will lead to pooling of water. The respondent also disputes that any water on the roof is causing any issues, as due to the material used in the construction of the Winsor Genesis water can sit on the roof panelling without causing damage or ingress.
  4. [36]
    In relation to the oven, the respondent states that Mrs Thompson was aware, prior to delivery, that there were some supply chain issues with the oven so the caravan would be fitted with a mini grill until the oven arrived. The oven is in stock at the dealership and can be fitted for the applicant at any time.
  5. [37]
    The respondent denies that they have failed to attempt to remedy the minor defects, stating assistance has been offered to the applicant by phone, email and their internet forum. However, the applicant has not provided them with the opportunity to view the concerns except in photos and by allowing their assessor to view the caravan.
  6. [38]
    The respondent asserts that they have attempted to work with the applicant to assess the concerns raised and the matter could have been resolved quickly had the applicant afforded the respondent the opportunity to repair the defects, but she has rejected any assistance. Therefore, any delays in the time it took for the fair trading complaint and the QCAT matter are outside of the control of the respondent, and they should not be liable for any incident costs associated with this period.
  7. [39]
    The respondent filed a counter application seeking $10,000 from the applicant for slander and an order that she removes any slander from the internet and agrees to refrain from posting any defamatory material toward the respondent. The counter application was discontinued by the respondent at hearing.
  8. [40]
    The respondent provided a report from Get Fixed RVs conducted by Wayne & Tracie McLean dated 18 July 2023 (‘the Get Fixed RVs report’). The qualifications of Wayne and Tracie McLean are unknown: they were not included in the report (other than noting they had previous professional involvement with the respondent company), and Wayne and Tracie McLean were not made available for cross examination at the hearing.
  9. [41]
    The Get Fixed RVs report noted multiple defects with the van, many which mirror the report of Alliance Motors and the initial concerns of the applicant. The most significant appear to be the BM Pro water tank controller being faulty and needing replacing, the need to replace the vinyl flooring due to screws showing through and the cupboard doors and drawers throughout the caravan being warped and misshapen, and to ensure colour matching, the report stated all doors and drawer facings will need replacing. The report also identified new issues not previously identified including a privacy curtain missing and needing to be fitted, the kitchen sink not being fitted into the bench and needing to be corrected for waterproofing and the awning arms missing the rafter knobs which need replacing, although as the van has been used the report could not confirm these knobs were missing at collection.
  10. [42]
    The Get Fixed RVs report did not identify any water leaking in the van or excessive water pooling and noted that there were no concerns with the roof and any water issues were likely due to the angle the van was stored on and its location in a shaded and damp area. The report did note that the sealant had pulled slightly away from the window rubbers with shrinkage, but the sealant remains soft, there are no signs of deterioration, and the windows are sealed with no signs of water leaks. The report did, however, identify that the side entry tunnel boot has little sealant and required removing and refitting with appropriate sealant.
  11. [43]
    The report also did not recommend changing the propeller plate (front protection place) as the J mould to the left and the right side of the plate sit different, which is causing the plate to sit unevenly, not the plate itself, so even if replaced, it would still sit unevenly.
  12. [44]
    The ultimate finding of the Get Fixed RVs report was that although extensive hours are required, all of the work can be repaired or replaced.

Was there a breach of a guarantee of acceptable quality?

  1. [45]
    Whether goods are of acceptable quality is not an absolute or a standard of perfection, but rather is a flexible standard depending upon the application of provisions in sections 54(2) and (3).
  2. [46]
    In Australian Competition and Consumer Commission v Jayco Corporation Pty Ltd[10] ‘Jayco’) it was observed in relation to a caravan that:

RVs, like many substantial consumer items such as motor vehicles, yachts, and even bicycles, are manufactured from a range of component parts, many of which may be capable of easy replacement or repair in the event of some fault. Some of the accessories, such as air conditioning units, televisions, or microwave ovens, may be manufactured by specialist suppliers of electrical appliances, and installed in the RV by the manufacturer or the supplier of the RV. Many of the component parts are designed for mechanical movement. RVs are intended to be towed. The process of towing will subject the RVs to stresses and flex. RVs will necessarily be exposed to weather. They are designed to be lived in, and otherwise to be used. Lids will be raised and lowered. Doors will be opened and shut. Drawers will be pulled out, and pushed in. RVs will be used by families with children, who sometimes lack fine motor skills when handling equipment. Surfaces may become scratched or chipped though normal use. An appliance installed in an RV, if found to be faulty, might be able to be easily repaired or replaced by a specialist supplier. Fuses may blow. Sometimes, just as in a household, the cause of an isolated occurrence of a blown fuse may not be apparent. Screws might have to be tightened. Doors might have to be straightened. These things are inherent in the nature of the goods. The reasonable consumer will tolerate some faults or breakages, and some need for adjustments of this type that are exposed by a period of initial use. The reasonable consumer will purchase an RV accepting that there is a reasonable prospect that some components of the RV may have to be adjusted, repaired, or replaced within a manufacturer’s warranty period. Putatively, if a reasonable consumer was fully acquainted with the nature and extent of a failure to comply with a statutory guarantee at the time of purchase, the reasonable consumer might nonetheless proceed with the purchase on the basis that the supplier, or the manufacturer, will remedy the failure within a reasonable time. On the other hand, it does not follow that merely because a failure to comply with a statutory guarantee is capable of being remedied, that a reasonable consumer fully acquainted with the nature and extent of the failure would acquire the goods. Whether that is so will depend upon the circumstances of each case.[11]

  1. [47]
    This decision appears to align with the respondent’s submission about a presentation from James Fahey, General Counsel of the ACCC, to the caravan industry association, that minor defects can and will be present in almost all caravans manufactured due to the units being handmade and subject to movement and stress.
  2. [48]
    While it is accepted, in line with the Jayco decision, that it is reasonable to accept that some parts of a caravan may have to be adjusted, repaired, or replaced within a manufacturer’s warranty period, a consumer should not expect that a brand-new caravan would come with defects that need to be immediately repaired or replaced.
  3. [49]
    Mrs Thompson acknowledged that some of the issues identified, on their own, would not be enough to suggest the caravan was not of acceptable quality and had there been only one or two issues she would not have raised concerns. The applicant asserts that it is the extent of the defects throughout the entire caravan which breaches the warranty of acceptable quality.
  4. [50]
    The Tribunal finds that the failure to have the oven provided in the caravan at the time of possession, while important to Mrs Thompson, is not a breach of the consumer guarantees. The applicant was aware prior to possession, albeit only a few days prior, that the oven was not available due to supply issues. When an oven became available the respondent advised the applicant of its availability and sought a time to replace the grill with the oven. However, by that stage Mrs Thompson was unwilling to accept it due to the other issues identified with the caravan.
  5. [51]
    The respondent acknowledges that there are a number of defects in the caravan and have not disputed that these defects were present at the time of supply, instead relying on the fact the defects are minor and do not affect the use of the caravan in order to assert that the caravan is fit for purchase and of “merchantable quality”.[12]
  6. [52]
    This submission appears to confuse the question of whether there were defects that cause the caravan to not be of acceptable quality and the second question as to whether such defects are major defects or minor defects.
  7. [53]
    In Campbell v Caravan & RV Central Pty Ltd t/as Avan New South Wales & FCA Australia Pty Ltd[13] NCAT said:

A reasonable consumer would also be entitled to expect that such a high cost item would be durable being capable of safe and effective use over a number of years (or at least many thousands of kilometres).

  1. [54]
    In this case, the caravan purchased by the applicant was a brand-new caravan, costing in excess of $89,000. On the respondent’s own admission and evidenced in the Get Fixed RVs report undertaken by the respondent’s expert the vehicle had multiple defects which were identified either at the time of supply or within the first three weeks of possession. Accordingly, the Tribunal finds on the balance of probability that there were a number of defects in the caravan as at the date of supply.
  2. [55]
    The Tribunal finds that a reasonable consumer would not expect a new caravan, in this price range, to have this many faults at the time of supply and a reasonable consumer fully acquainted with the state of the caravan at the time of purchase would not regard it as free from defects and durable, and therefore the Tribunal finds it was not of acceptable quality. 

Was the failure to comply with the guarantee of acceptable quality a major failure?

  1. [56]
    The term ‘major failure’ is defined to mean:[14]
    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. (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
    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. (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
    5. the goods are not of acceptable quality because they are unsafe.
  2. [57]
    A failure to comply with a guarantee that applies to a supply of goods is also a major failure if the failure is one of two or more failures to comply with a guarantee referred to in section 259(1)(b) and 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.[15]
  3. [58]
    The test in s 260(a) of the ACL is whether a reasonable consumer with knowledge of the faults, and what would be needed in terms of time, costs and degree of difficulty to fix them, would have bought the goods or made a different decision.[16]
  4. [59]
    The respondent asserts that all of the defects are minor defects and as such the defects do not reach the standard of major defect and the applicant is not entitled to a refund. The applicant asserts that it is the extent of all of the defects, many of which she acknowledges are minor, that result in these defects reaching the standard of a major defect. The applicant does not dispute that the defects can be repaired but asserts this is not reasonable as nearly every part of the caravan would need to be touched to complete the repairs and as such this would not be a brand new caravan, as purchased, but a repaired caravan which is equivalent to a second hand caravan.
  5. [60]
    It has previously been accepted that a number of minor defects can be considered in aggregate to amount to a major failure.[17] However, not every fault or combination of faults which represents a breach of the guarantee of acceptable quality constitutes a major failure. A finding of a major failure is a judgement of fact and degree based on inferences from the evidence. Relevant considerations include the availability and cost of repairs relative to purchase price and the nature of the faults.[18]
  6. [61]
    While it is standard to have one expert in motor vehicle matters, in this matter both the applicant and the respondent provided separate expert reports. Both expert reports, being the Alliance report provided by the applicant and the Get Fixed RVs report provided by the respondent, found that there were twelve defects in the vehicle which were likely to be present at the time of possession, noting the applicant identified these issues at the time of collection or shortly thereafter. The defects both reports identified were:
    1. The BM Pro electronic water tank is faulty and needs replacing.
    2. Raised screw under flooring has caused damage to the vinyl flooring resulting in the vinyl needing to be replaced.
    3. Multiple cupboard doors and drawers throughout the van are misaligned and warped and need replacing.
    4. A lack of sealant around the storage hatch and the kitchen sink requiring removal and re-fitting with appropriate sealant.
    5. Problems with the shower edging/sealant requiring removal of the strip and replacement of a new strip around the entire glass door.
    6. Missing clip on the jockey wheel bolt.
    7. External front plate is un-even/not flush and coming away from the van.
    8. Wiring connecting the caravan to the vehicle is hanging between wheels.
    9. Gaps and/or dents in the entry step.
    10. Edging on the bunk beds is not correct, resulting in a sharp edging which needs replacing.
    11. Toilet roll holder falling off and needs affixing with adhesive.
    12. No television remote control device.
  7. [62]
    Although the respondent asserts the defects are relatively easy to correct and replace and dispute the cost estimates in the Alliance report, both reports concluded that significant work was necessary to rectify the defects. The Alliance report concludes the caravan is uneconomical to repair and the Get Fixed RVs report conducted by the respondent concludes that although the defects can be repaired or placed it will take extensive hours.
  8. [63]
    Given the number of defects at the time of purchase, a reasonable consumer, acquainted with these defects, in particular the misaligned and warped cupboards, the issues with the vinyl flooring, the defective water tank and the sealant issues, would have very serious reservations about purchasing the caravan.
  9. [64]
    There was much evidence given at the hearing in relation to the issue of whether there was water pooling on the roof of the caravan; whether any water pooling was a result of a defect or as a result of the applicant’s actions of storing the caravan on uneven ground, and whether any pooling would cause water leak and rusting, given the respondent asserts that the construction of the caravan would prevent issues arising even if there was water pooling.
  10. [65]
    Ultimately it was not necessary for the Tribunal to make a determination as to the cause of any water pooling and the future consequences of water on the roofing, as Mr Mitchell, the Fix Operational Manager for the respondent company, who has worked in the caravan industry for nearly 25 years since 1999 in both manufacturing and service of caravans, stated in evidence that if a purchaser knew of all of the minor defects in the caravan that were identified in the expert reports (not including the water pooling), they absolutely would not have purchased the vehicle.
  11. [66]
    Based on the two expert reports and the evidence from Mr Mitchell on behalf of the respondent, the Tribunal finds the series of twelve defects set out above, which both expert reports found were present in the caravan at the time of possession, taken together, are such that a reasonable consumer fully acquainted with the nature and extent of the failure would not have acquired the caravan.
  12. [67]
    Accordingly, the Tribunal finds that the combination of the defects in the caravan at the time of supply are a major failure.

Was the Caravan rejected for failure of the guarantee of acceptable quality?

  1. [68]
    The ACL (Queensland) provides that if the failure to comply with the guarantee is a major failure the consumer may, subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection[19] and may recover damages for any loss or damage suffered because of the failure to comply with the guarantee.[20]
  2. [69]
    The evidence is clear and appears undisputed that there is a rejection of the caravan by the applicant. Mrs Thompson sought to reject the caravan, both prior to taking formal possession on 30 September 2022 when she went to collect the caravan, and in writing less than one month later on 22 October 2022.
  3. [70]
    The respondent has not provided any evidence to dispute that the applicant sought to reject the caravan for failure of guarantee of acceptable quality, only that the applicant was not entitled to reject the vehicle.
  4. [71]
    The language used by Mrs Thompson is clear and unequivocal. She was clear that she was rejecting the vehicle and wanted to return the caravan for a full refund. Mrs Thompson identified the reason was due to the caravan not being of acceptable quality, including safety and durability issues, it did not match the description in the contract, was not fit for the stated purpose and repairs were not provided in a reasonable period.
  5. [72]
    In the circumstances, the Tribunal is satisfied that applicant rejected the vehicle and notified the respondent that she was rejecting the vehicle together with the grounds of the rejection.

Was Mrs Thompson entitled to reject the Caravan? Was the Caravan rejected within the rejection period?

  1. [73]
    Given the above findings in terms of the vehicle not being of acceptable quality and the failure being a major failure the Tribunal finds that the applicant was entitled to reject the caravan and did so within the rejection period.
  2. [74]
    The respondent raises concerns that the applicant did not provide them with the opportunity to view the caravan or remedy the concerns. The evidence provided by the respondent in terms of the communication with the applicant about the caravan is only in relation to seeking the caravan be provided to them to conduct repairs and replace the grill with the oven, as opposed to a need to view the caravan to understand the defects alleged. Given the presence of a major failure, there was no obligation on the part of the applicant to present the caravan for repairs despite the repeated requests by the respondent.
  3. [75]
    The Tribunal finds that the applicant advised the respondent prior to possession they were unhappy with the quality and wanted to reject the caravan. As the caravan was still in the respondent’s yard at the time, they had the opportunity to view the caravan. The applicant then provided a detailed letter with photographs of their concerns and allowed an assessor appointed by the respondent to view the caravan and prepare a report. The respondent acknowledged at the hearing that the applicant was willing to make the caravan available on two occasions as the first assessor scheduled did not attend. In the circumstances the Tribunal does not accept the respondent was not given the opportunity to view the caravan in order to understand what the defects were in the caravan.
  4. [76]
    The Tribunal accepts that the applicant sought a refund on the day they took possession, and again in writing on 22 October 2022 which is less than 4 weeks after taking possession of the caravan on 30 September 2022. In these circumstances, the tribunal is satisfied that the applicant rejected the motor vehicle within the rejection period.

Remedies - Is a refund payable?

  1. [77]
    In Haisman v Drive (Aust) Pty Ltd[21] the Tribunal confirmed it 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.
  2. [78]
    The Tribunal finds that the applicant is entitled to a refund of the purchase price of $89,395.00 pursuant to section 263(4)(a) of the ACL due to the failure to comply with the guarantee of acceptable quality, for the reasons stated earlier in these reasons.
  3. [79]
    The ACL sets out the consequences where the goods have been rejected. It provides that where a consumer rejects the goods the consumer must return the goods unless they have already been returned or retrieved by the supplier[22] and the supplier must refund any money paid by the consumer for the goods or replace the rejected goods with goods of the same type and of similar value of such goods are reasonably available.[23]
  4. [80]
    In this case, the applicant has notified the respondent that the goods have been rejected in accordance with s 263(1) of the Australian Consumer Law. The Tribunal will give effect to the requirement in s 263(2) that the goods be returned by so ordering. Upon the return of the caravan, the applicant will be entitled to a refund pursuant to s 263(4).

Damages

  1. [81]
    The Tribunal is vested with jurisdiction in respect of damages under s 259(4) of the ACL, 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.

  1. [82]
    In Vautin v BY Winddown, Inc (formerly Bertram Yachts) (No 4) [2018] FCA 426 at [293], Derrington J stated:

It would appear that this subsection is concerned with the recovery of ‘reliance losses’ as the inclusion of the limitation of ‘reasonable foreseeability’ pertains to such losses rather than expectation losses.

  1. [83]
    The applicant has sought various damages, including for the cost of the insurance, registration, the expert report and interest that she could otherwise have earned on the funds used to purchase the caravan and pay the other associated costs.
  2. [84]
    The applicant has claimed damages of $9,205.71 for loss of interest on the cost of the caravan and the other expenses claimed including the insurance and registration costs, the cost of the expert report and costs of the proceedings. There is no automatic entitlement to interest in the Tribunal and as this is an expectation loss and not a reliance loss it is not recoverable under the ACL. Accordingly, the applicant is not entitled to interest costs.
  3. [85]
    The applicant has also sought to recover insurance payments in the amount of $1,194.23 and $1,909.11 and a registration renewal cost of $127.64. It is reasonably foreseeable and prudent that an owner would maintain the registration and obtain insurance for their caravan. The applicant has provided evidence of the payment of the $127.64 cost for renewal of the registration up until 29 March 2024. Accordingly, the Tribunal orders the Respondent to pay $127.64 as a reasonably foreseeable cost. In relation to the insurance, the only evidence provided in support of this is certificates of insurance evidencing the amount due. There is no evidence before the Tribunal establishing payment of these amounts has occurred. Accordingly, there is insufficient evidence to order damages for the insurance costs.
  4. [86]
    The applicant also seeks costs of $300 for the expert report conducted by Mr Mark Hill (the Alliance report). In the circumstance where the respondent was disputing the defects were major defects to warrant a refund, the Tribunal accepts that it is reasonably foreseeable and prudent for the applicant to obtain a report to evidence her claim and demonstrate the nature of the defects in the caravan. The contents of the report, together with the Get Fixed RVs report, were of great assistance to the Tribunal. The applicant has provided evidence of payment for this report. Accordingly, the respondent is ordered to pay the $300 cost of the report.

Costs

  1. [87]
    Section 50C of the Fair Trading Act provides that the Tribunal may make a costs order against the respondent in the amount of the prescribed filing fee paid by the applicant. This power is subject to s 102(1) of the QCAT Act which provides that the Tribunal may make a costs order if the interests of justice require it.
  2. [88]
    The applicant has been successful in the proceedings. While the Tribunal has not accepted some of the claims for damages, this has largely been for evidential reasons. The applicant raised issues with the caravan immediately and sought a refund in a prompt way. They attempted to resolve the matter through the Office of Fair Trading before coming to the Tribunal. In these circumstances, the Tribunal consider that it is in the interests of justice to order the respondent to pay the filing fee of $367.00.
  3. [89]
    The applicant also seeks the cost of service via a bailiff in the amount of $142.70.  Unlike the filing fee and the cost of the expert report, where there is evidence of the cost and payment, the evidence to support the service cost is not sufficient. While there is evidence in the affidavit of service that the respondent was served by a licenced field agent, the only information provided to evidence the costs associated with service is a document entitled “QCAT service fee calculator”. There is no formal invoice to evidence the cost and no information from the applicant to evidence any cost was paid. Therefore, the Tribunal declines to order service costs. 

Orders

  1. [90]
    The Tribunal orders:
  1. Tanya Thompson is required to return the caravan subject of these proceedings to Apollo Investments Pty Ltd t/as Kratzmann Caravans within 14 days of the decision.
  1. Apollo Investments Pty Ltd t/a Kratzmann Caravans to pay Tanya Thompson $90,189.40 within 14 days of the decision, which consists of:
  1. Refund in the amount of $89,395.00.
  1. Foreseeable damages of $127.64 for the renewal of the registration and $300 for the expert report.
  1. Costs for the filing fee of $367.00.

Footnotes

[1]  QCAT Act, ss 9, 10.

[2]  ACL, s 54(3).

[3] Medtel Pty Ltd v Courtney (2003) 130 FCR 182, [64] and [70].

[4]  [2018] VCAT 1520,[72].

[5] Campbell v Caravan & RV Central Pty Ltd t/as Avan New South Wales & FCA Australia Pty Ltd [2016] NSWCATCD 90, [57].

[6]  ACL, s 260.

[7]  Ibid, s 260.

[8]  Ibid, s 260(2).

[9]  [2014] VMC 23, [51].

[10]  [2020] FCA 1672.

[11]  Ibid, [40].

[12]  Respondent’s submissions filed 13 December 2023.

[13]  [2016] NSWCATCD 90, [57].

[14]  ACL, s 260.

[15]  Ibid, s 260(2).

[16] Baas v JB Hi Fi Group Pty Ltd [2021] NSWCATAP 10, [28].

[17]Nuth v Soel Products Australia Pty Ltd trading as Caravan RV CQ [2020] QCAT 369, [33].

[18] Baas v JB Hi Fi Group Pty Ltd [2021] NSWCATAP 10 [28]; Peter Bennett Cars v Lyree-Jho Vodanovich [2020] QCATA 88, [24].

[19]  ACL, s 259(3)(a).

[20]  Ibid, s 259(4).

[21]  [2020] QCAT 44, [24].

[22]  Ibid, s 263(2). 

[23]  Ibid, s 263(4).

Close

Editorial Notes

  • Published Case Name:

    Thompson v Apollo Investments Pty Ltd t/as Kratzmann Caravans

  • Shortened Case Name:

    Thompson v Apollo Investments Pty Ltd t/as Kratzmann Caravans

  • MNC:

    [2024] QCAT 254

  • Court:

    QCAT

  • Judge(s):

    Member Bertelsen

  • Date:

    18 Jun 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 Jayco Corporation Pty Ltd [2020] FCA 1672
2 citations
Jump To
Cite 1 - [2020] FCA 1672
Cite 2 - [2020] FCA 1672
Baas v JB Hi Fi Group Pty Ltd [2021] NSWCATAP 10
3 citations
Jump To
Cite 1 - [2021] NSWCATAP 10
Cite 2 - [2021] NSWCATAP 10
Cite 3 - [2021] NSWCATAP 10
Campbell v Caravan & RV Central Pty Ltd t/as Avan New South Wales & FCA Australia Pty Ltd [2016] NSWCATCD 90
3 citations
Jump To
Cite 1 - [2016] NSWCATCD 90
Cite 2 - [2016] NSWCATCD 90
Cite 3 - [2016] NSWCATCD 90
Cary Boyd v Agrison Pty Ltd [2014] VMC 23
2 citations
Jump To
Cite 1 - [2014] VMC 23
Cite 2 - [2014] VMC 23
Haisman v Drive (Aust) Pty Ltd [2020] QCAT 44
2 citations
Jump To
Cite 1 - [2020] QCAT 44
Cite 2 - [2020] QCAT 44
Holt-Lea v O'Connor [2022] QCAT 363
1 citation
Jump To
Cite 1 - [2022] QCAT 363
Medtel Pty Ltd v Courtney (2003) 130 FCR 182
2 citations
Jump To
Cite 1 - (2003) 130 FCR 182
Cite 2 - (2003) 130 FCR 182
Morphy v Beaufort Townsville Pty Ltd [2018] VCAT 1520
2 citations
Jump To
Cite 1 - [2018] VCAT 1520
Cite 2 - [2018] VCAT 1520
Nuth v Soel Products Australia Pty Ltd trading as Caravan RV CQ [2020] QCAT 369
2 citations
Jump To
Cite 1 - [2020] QCAT 369
Cite 2 - [2020] QCAT 369
Peter Bennett Cars v Lyree-Jo Vodanovich [2020] QCATA 88
1 citation
Jump To
Cite 1 - [2020] QCATA 88
Vautin v BY Winddown, Inc (formerly Bertram Yachts) (No 4) [2018] FCA 426
2 citations
Jump To
Cite 1 - [2018] FCA 426
Cite 2 - [2018] FCA 426

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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