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Floorit (Qld) Pty Ltd v IVECO Trucks Australia Ltd & Anor[2024] QCAT 449

Floorit (Qld) Pty Ltd v IVECO Trucks Australia Ltd & Anor[2024] QCAT 449

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Floorit (Qld) Pty Ltd v IVECO Trucks Australia Ltd & Anor [2024] QCAT 449

PARTIES:

floorit (qld) pty ltd

(applicant)

v

iveco trucks Australia Ltd

(first respondent)

And

BRISBANE IVECO PTY LTD

(second respondent)

APPLICATION NO:

MVL094-23

MATTER TYPE:

Motor vehicle matter

DELIVERED ON:

11 October 2024

HEARING DATE:

20 September 2024

HEARD AT:

Brisbane

DECISION OF:

Member Sammon

ORDERS:

  1. Within 14 days of the date of this decision, the Applicant must return the Iveco vehicle the subject of this application to the Second Respondent.
  2. Within 14 days of return of the Iveco vehicle to the Second Respondent, the Second Respondent must refund to the Applicant the purchase price of the vehicle in the amount of $87,987.86.
  3. Within 28 days of the date of this decision, the Second Respondent must pay to the Applicant the amount of $367 for filing fees.

CATCHWORDS:

TRADE AND COMMERCE – COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – GUARANTEES, CONDITIONS AND WARRANTIES IN CONSUMER TRANSACTIONS – GUARANTEES, CONDITIONS AND WARRANTIES – vehicle claimed to be seriously defective – repeated defects, despite mechanical attention – whether failure to comply with consumer statutory guarantees was a ‘major failure’ within the Australian Consumer Law – whether consumer entitled to a refund of the purchase price of the vehicle

Acts Interpretation Act 1901 (Cth), s 22

Competition and Consumer Act 2010 (Cth) schedule 2, s 3, s 54, s 55, s 56, s 57, s 58, s 59, s 64, s 259, s 260, s 262, s 263, s 271

Fair Trading Act 1989 (Qld) s 15, s 16, s 19, s 50A, s 50C

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

Howarth & Anor v Biscamoss Pty Ltd [2022] QCATA 72.

APPEARANCES &

REPRESENTATION:

Applicant: Self-represented

Respondents: Self-represented

REASONS FOR DECISION

Background

  1. [1]
    The Applicant, Floorit (QLD) Pty Ltd (‘Floorit’) applied to the Tribunal on 27 April 2023 seeking damages in the amount of $100,000 arising from purchase by Floorit of an Iveco van, brand new, from the First Respondent Iveco Trucks Australia Pty Ltd, through its dealership, Brisbane Iveco Pty Limited (‘Brisbane Iveco’). Floorit claims the vehicle to be seriously defective, and not fit for purpose.
  2. [2]
    The application to the Tribunal and accompanying documents which describe the defects alleged for the Iveco van was admitted into evidence as exhibit 2 at the hearing of this matter.
  3. [3]
    Floorit was self-represented at the hearing of this matter, in the sense that Ms Crystal Harris, Accounts Manager of Floorit, appeared for that company. She is not a lawyer.
  4. [4]
    Each of the Respondents were also ‘self-represented’ by employees of each company. Mr Frank Percy is employed by Iveco Trucks Australia Limited (‘Iveco Australia’) as a Customer Experience Specialist, and represented that company. Mr Steve Gerran also employed by Iveco Australia in the Queensland Services Division of that company also represented that company. Mr Luke Dionysius, employed by the Second Respondent, Brisbane Iveco Pty Limited (‘Brisbane Iveco’) as Workshop Foreman, represented that company.
  5. [5]
    In an email to the Tribunal dated 8 June 2023, Mr Percy explained that the two companies are related, in the sense that Brisbane Iveco is the only dealership operated by Iveco Australia, in Australia. The same email states that the Iveco van the subject of this application was sold by, and serviced at, the Iveco Brisbane dealership.[1] Iveco Australia provided a ‘New vehicle warranty’ for the Iveco van, which became exhibit 6 at the hearing.
  6. [6]
    It is uncontested that Floorit purchased the Iveco van concerned on 30 June 2022 for the price of $87,987.86.[2] Ms Harris alleges that Floorit had problems with the vehicle within weeks of taking delivery, and which have continued to the date of hearing.     Ms Harris said at the hearing, and it was uncontested by the Respondents, that Floorit is a flooring contractor which provides flooring solutions for buildings throughout Australia but focusing mainly on Queensland. Floorit purchased the vehicle to transport flooring materials together with tools and equipment. Also at the hearing, Ms Harris said, without objection, that Floorit had told the salesperson at Brisbane Iveco the van was being purchased for use in Floorit’s business. 
  7. [7]
    Floorit made its application to the Tribunal under the Fair Trading Act 1989 (Qld) and invoking the Australian Consumer Law (Queensland). Ms Harris elaborated on reliance on the Australian Consumer Law in an email to Iveco Australia dated               20 September 2022,[3] which I will examine in more detail in these reasons for decision.

Jurisdiction of the Tribunal

  1. [8]
    The Tribunal has jurisdiction to hear and determine this application in its original jurisdiction, as described by s 10 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘the QCAT Act’). The relevant ‘enabling Act’ for the purposes of that provision is the Fair Trading Act, and in particular, s 50A of that Act. Section 50A(1) is as follows:
  1. 50A
    Tribunal’s jurisdiction for particular matters relating to motor vehicles
  1. (1)
    A person may apply, as provided under the QCAT Act, to the tribunal for an order mentioned in subsection (2) for an action—
  1. (a)
    under a provision of the Australian Consumer Law (Queensland) listed in the table to this section; and
  2. (b)
    relating to a motor vehicle; and
  3. (c)
    seeking an amount or value of other relief of not more than $100,000.
  1. [9]
    Paragraph (c) explains why Floorit seeks an order for payment of an amount of $100,000 from the Respondents.
  2. [10]
    Relevantly, s 50A(2)(a) and (d) provide that in a proceeding under s 50A(1), the Tribunal may only make respectively, orders requiring a party to the proceeding to pay a stated amount to a stated person, and an order requiring a party to the proceeding to return goods that relate to the claim and are in the party's possession or control, to a stated person.
  3. [11]
    The table to the section referred to in s 50(1)(a) appears at the end of the provision and relevantly contains the following provisions of the Australian Consumer Law (Queensland) followed by a description of the nature of the proceeding:
    1. s 236(1) - Action to recover amount of loss or damage;
    2. s 259(4) - Action to recover damages because of failure to comply with guarantee.

Relevant provisions of the Australian Consumer Law (‘ACL’)

Application of the ACL

  1. [12]
    Section 16(1) of the Fair Trading Act adopts the ACL as a law of Queensland as follows:
  1. 16
    Application of Australian Consumer Law
  1. (1)
    The Australian Consumer Law text, as in force from time to time—
  1. (a)
    applies as a law of this jurisdiction; and
  2. (b)
    as so applying may be referred to as the Australian Consumer Law (Queensland); and
  3. (c)
    as so applying is a part of this Act.
  1. [13]
    The term ‘Australian Consumer Law text’ is defined, relevantly in s 15(a) of the Fair Trading Act to be schedule 2 to the Competition and Consumer Act 2010 (Cth).
  2. [14]
    On the facts of this case, the potential grounds of claim by Floorit under the ACL invoked against each of the Respondents follow a two-step process in the following way:
    1. application of the ‘Consumer guarantees’ contained in Part 3-2 of the ACL, comprising statutory guarantees[4] relating to the supply of goods; and
    2. application of the ‘Remedies relating to guarantees’ contained in Part 5-4 of the ACL, which confers a cause of action by a ‘consumer’ against a supplier of goods where there has been a breach of the statutory guarantees in Part 3-2.
  3. [15]
    Key terms for the application of the statutory guarantees, are the term ‘consumer’ and  ‘supplier’.
  4. [16]
    The term ‘consumer’ is defined in s 3 of the ACL relevantly as follows:
  1. 3
    Meaning of consumer

Acquiring goods as a consumer

  1. (1)
    A person is taken to have acquired particular goods as a consumer if, and only if:

…

  1. (c)
    the goods consisted of a vehicle or trailer acquired for use principally in the transport of goods on public roads.
  1. [17]
    Given the statement by Ms Harris referred to above, that Floorit intended to use the Iveco vehicle for transporting flooring materials, I find that it was a ‘consumer’ within the meaning of that definition. There is nothing in that definition that confines a  ‘person’ to an individual human, instead of extending to a corporation such as Floorit.[5]
  2. [18]
    There is no overall definition of ‘supplier’ for the ACL, but instead, that term is used and defined in particular provisions, which I will come to as necessary in these reasons.

Relevant statutory guarantees in the ACL

  1. [19]
    The following statutory guarantees contained in Chapter 3, Part 3-2 of the ACL appear to have been invoked by Floorit.
  1. 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. [20]
    In my view, s 54 is applicable to the purchase of the Iveco vehicle by Floorit, which was not purchased at auction. I am satisfied that the Iveco dealership supplied the vehicle to Floorit ‘in trade or commerce’ as part of its regular business in selling Iveco vehicles. It will be necessary for me to consider below, whether the Iveco vehicle was of an ‘acceptable quality’ given the requirements of s 54(2). That will involve the considerations contained in s 54(3).
  2. [21]
    Section 55 of the ACL is as follows:
  1. 55
    Guarantee as to fitness for any disclosed purpose etc.
  1. (1)
    If:
  1. (a)
    a person (the supplier) 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 reasonably fit for any disclosed purpose, and for any purpose for which the supplier represents that they are reasonably fit.

  1. (2)
    A disclosed purpose is a particular purpose (whether or not that purpose is a purpose for which the goods are commonly supplied) for which the goods are being acquired by the consumer and that:
  1. (a)
    the consumer makes known, expressly or by implication, to:
  1. (i)
    the supplier; or
  2. (ii)
    a person by whom any prior negotiations or arrangements in relation to the acquisition of the goods were conducted or made; or
  1. (b)
    the consumer makes known to the manufacturer of the goods either directly or through the supplier or the person referred to in paragraph (a)(ii).
  1. (3)
    This section does not apply if the circumstances show that the consumer did not rely on, or that it was unreasonable for the consumer to rely on, the skill or judgment of the supplier, the person referred to in subsection (2)(a)(ii) or the manufacturer, as the case may be.
  1. [22]
    In my view, s 55 is also at least potentially applicable to the sale of the Iveco vehicle to Floorit, based on the statement made by Ms Harris at the hearing, that Floorit told the sales representative at the dealership about the nature of the needs that Floorit had for the Iveco vehicle. It will also be necessary for me to consider the application of that further in this decision, given the defects that Floorit alleges with the Iveco vehicle.
  2. [23]
    Section 59 of the ACL contains a statutory guarantee that if the manufacturer of goods gives an express warranty in relation to the goods, there is a guarantee that the manufacturer of the goods will comply with that express warranty. I do not consider that statutory guarantee applies in this case, since Floorit does not raise any particular failure by Iveco Australia under the terms of the ‘New vehicle warranty’ that Iveco Australia gave to Floorit. Rather, the claim made under the ACL is for defects in the Iveco van supplied by Brisbane Iveco as the distributor which sold the vehicle to Floorit.

Remedial provisions of the ACL

  1. [24]
    Part 5-4 of the ACL contains the provisions which relate to breach of the statutory guarantees discussed above. The primary provision of at least potential application in this case, concerning supply of goods is s 259 which is as follows:
  1. 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[6] and 59(1)[7]) 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.

…

  1. (6)
    To avoid doubt, subsection (4) applies in addition to subsections (2) and (3).

(Added emphasis)

  1. [25]
    I have emphasised the expression ‘major failure’ because Floorit alleged in its application to the Tribunal[8] that the problems with the Aveco vehicle fell within the description of a ‘major failure’. That term is defined in s 260 of the ACL relevantly to the allegations in this case, as follows:
  1. 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)
    …
  3. (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
  4. (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.

The defects alleged by Floorit for the vehicle

  1. [26]
    Part of the application filed by Floorit in the Tribunal is headed (in ‘Part F’) ‘What is wrong with the vehicle’. There, Floorit lists a lengthy description of defects with the Iveco vehicle, up until shortly before the application was filed on 27 April 2023. Floorit has filed other material alleging further defects since that time and as recently as August 2024. However, the initial list of defects in the application filed in the Tribunal is summarised as follows:

The Vehicle is not fit for purpose, the van has consistantly [sic] had failures of the DPF[9] system amongst other faults within the first 5000km of purchase and constantly ongoing issues which heavily interrupt the running of our business. The reason for the purchase of a new vehicle was to purchase something new which was reliable and could be depended on due to the nature of our work, This van has proven to be consistantly [sic] faulty and unreliable and simply proven itself to be unuseable [sic] on numerous occassions [sic].

30/6/2022 - took delivery of vehicle

17/7/2022 - Vehicle has first fault issue and goes into limp mode - needs to be temporarily fixed in Townsville

28/7/2022 - Fault issue looked at in Iveco Brisbane service

19/8/2022 - Fault issue and van went into limp mode – (Request for vehicle to be replaced)

27/8/2022 - Lane assist failure, radio failure (another request for vehicle refund)

20/9/2022 - Van has another fault and cruise control fails (another request for refund)

3/11/2022 - Van has another fault - park brake fault and cannot be moved or driven (another request for return of vehicle)

6/11/2022 - Van has another fault- park brake fault

2/12/2022 - Check engine light comes on and cruise control fault shows

2/2/2023 - Unknown fault appears and loud beeping noise randomly occurs and cuts out the radio consistently

13/2/2023 - Van goes into limp mode

20/2/2023 - Tyre pressure fault

3/4/2023 - Engine fault and van goes into limp mode.

  1. [27]
    I should immediately note some points about this summary. First, the representatives for the Respondents did not deny any of these faults. Secondly, Ms Harris explained what the reference to ‘limp mode’ meant in the context of the Iveco van. She said that the vehicle will only operate at a limited speed, for example 60 kilometres per hour, until the problem was fixed. The representatives for the Respondents did not deny that either, but added that the vehicle could be limited to 60 kilometres per hour maximum speed, but the maximum speed which the vehicle would permit depends on the fault concerned.
  2. [28]
    Floorit elaborated on those instances of vehicle defects in other parts of its application to the Tribunal.
  3. [29]
    Starting with the incident on 17 July 2022, Attachment A to the application states that the vehicle went into ‘limp mode’, and central locking failed, all whilst the vehicle was en route to Brisbane from Ingham. Two employees in the vehicle had to stop at an Iveco dealer in Townsville and be accommodated an extra night at Floorit’s cost due to time wasted in getting the vehicle temporarily fixed to travel back to Brisbane, meaning a loss in business and wages.
  4. [30]
    In this case, as in other defects which emerged for the vehicle, Floorit took the vehicle back to the Iveco dealership to have the defect repaired. In each case, Floorit appears to have asked the dealership for a report on the defect and the work done to fix it. In some cases, the dealership provided a report to Floorit, but in some other cases, did not, at least initially.
  5. [31]
    As to the second major incident which occurred on 19 August 2022, as described in Attachment A, the vehicle went into limp mode upon returning from Dalby. Ms Harris called the dealership to advise of the fault and to organise having the vehicle fixed again. She also requested any reports on the vehicle to date be sent to her and, for the first time, advised that Floorit wanted the dealership to replace the vehicle. Ms Harris reported that the response by the dealership was only to repair the vehicle, not replace it, and no report had been received for that repair.
  6. [32]
    On the 27th of August 2022, as described in the summary above, the lane assistance function for the vehicle failed and the radio failed. A summary of the inspection and repair report for the vehicle sent by email from Brisbane Iveco as the distributor to Ms Harris dated 30 August 2022[10] mentions a problem about ‘incomplete DPF software from factory for DPF’, and that the latest software was located and updated. For the lane changing problem on 27 August 2022, the same summary mentioned the issue then appearing to be ‘lane changing software’ and that required the vehicle to come in to the Service Department.
  7. [33]
    On 20 September 2022, the van had another failure, in this case, the cruise control failing on a trip to Biloela, and the fault light then went away. Attachment 8 to the application to the Tribunal is an email from Ms Harris dated that day to a representative of the distributor. Concerning the incident on that day, Ms Harris said in the email:

The van has barely been used since its last return to us and now again upon its trip out to Biloela it has come up with another fault, this time being the cruise control again which is how it has started every other time it has gone into limp mode.

  1. [34]
    Again, Ms Harris said that she wanted the distributor to take the vehicle back and return of the purchase price. She noted that:

This is not the first time I have requested this option but now it is getting ridiculous.

  1. [35]
    At the least, this should have alerted Brisbane Iveco as the distributor, to the seriousness of the problems with the vehicle. There was no agreement to the request for return of the vehicle and refund of the purchase price on behalf of the dealership.
  2. [36]
    Also on 20 September 2022, Ms Harris sent a further email[11] to Brisbane Iveco as the distributor, referring to the rights that Floorit had under the ACL, that the vehicle was not of an ‘acceptable quality’ or ‘fit for purpose’. She also referred to a summary of a ‘major failure’ under the ACL. She said that Floorit would not have purchased the vehicle if it had known of all the issues that had emerged.
  3. [37]
    The dealership provided Ms Harris with a copy of the inspection and repair report dated 28 September 2022[12] on the defect with the lane assist button ‘fault light’ failing to turn off and the radio turning itself off and on intermittently. The repair report identified ‘bad contacts’ on what appears to be an electrical pin. The report stated that the bad contacts were removed and repaired.
  4. [38]
    Attachment A continues, describing that on the third of November 2022, there was a park brake failure, the van was stuck, and unable to be put into gear at Floorit’s workplace in Logan village. An email from Ms Harris to the dealership[13] on this day relevantly tells the dealership:

... We want this van taken back it is an absolute lemon and not fit for purpose what so ever [sic] as previously mentioned and ignored!!!!!

  1. [39]
    Only three days later, on 6 November 2022, the vehicle had another park brake failure. The employees turned the van on and off several times, and the park brake began to work again.
  2. [40]
    On the second of December 2022, the ‘check engine’ light came on, as did the ‘cruise control fault’ light. In an email that day, Ms Haris again asked the dealership to have the purchase price refunded for the vehicle.[14] A fault light came on again on the 12th of December 2022.
  3. [41]
    On the second of February 2023, an unknown fault appeared and a ‘loud beeping noise’ randomly happened and cut out the radio consistently.
  4. [42]
    Then on 13 February 2023, the vehicle went into limp mode again. On 20 February the vehicle displayed another fault light, which the Group General Manager from the distributor, Brisbane Iveco advised[15] was a tyre pressure indicator, not a fault code and requesting Floorit to reset the tyre pressure. Notwithstanding that, the fault signal displayed again the next day, after Floorit followed the suggestion of pumping up the tyres of the vehicle.
  5. [43]
    On the 22nd of February 2023, Ms Harris send an email[16] to the distributor noting that a representative of the distributor had advised her that the distributor refused to take the van back for repair due to Floorit seeking legal advice. She reiterated how following attempts to repair the vehicle:

… we continuously get it back only to return it again to have another repair attempt occur… .

  1. [44]
    By the 31st of March 2023, Floorit had made a complaint to the Office of Fair Trading (Queensland) about the defects to the vehicle.[17]
  2. [45]
    Attachment A continues that on the third of April 2023, Floorit contacted the distributor again to advise of another engine fault and the vehicle again going into limp mode. The vehicle was again dropped off to the distributor for repair and collected on 13 April 2023. The relevant vehicle inspection report[18] refers to a ‘software update’ and that a fault was found for ‘DPF’. The software was inspected and found to be an old version but a software update performed and all fault codes deleted.
  3. [46]
    Floorit filed its application in the Tribunal shortly afterwards, on 27 April 2023. However, that was not the end of problems with the vehicle.

Independent inspection of the vehicle

  1. [47]
    After the application was filed in the Tribunal, on 12 July 2023, the Tribunal ordered that the vehicle be independently inspected by an assessor. The vehicle was inspected by Mr Stephen Goddard who provided a report dated 16 October 2023 to the Tribunal and the parties, which became exhibit 1 in the hearing of this matter.
  2. [48]
    Mr Goddard reported that when he started the vehicle for his inspection, he noticed the oil warning light flashing. He turned off the engine to check that the engine oil level was correct. He asked the receptionist at Floorit whether the vehicle had been used that morning, and received the response that it had been, but that the handbrake warning came on, applying the handbrake. That was cleared by disconnecting the battery.
  3. [49]
    At the same inspection, Mr Goddard reported that the central locking did not operate correctly, not opening the driver’s door the first time it was tried, requiring several attempts to unlock the door. He carried out several other checks based on the Floorit statement of faults. He also reported that due to the engine oil light continuously flashing while idling, his advice would be not to operate the vehicle until such time as that fault was rectified.
  4. [50]
    He reported that the DPF light had been diagnosed and cleared many times, but the light does return with the same fault when the vehicle is driven. He also referred to the history of the vehicle showing constant electrical faults ‘oil warning light flashing, unknown cause at the time of inspection.’ He also referred to the handbrake activating itself the morning of the inspection.
  5. [51]
    As to the likely cause of the defect, he identified the two faults of the oil warning light and the handbrake. His view was that there was an ongoing electrical issue, but without further diagnosis, it would be difficult to pinpoint the actual cause of the faults. He formed the opinion that given that the faults concerned with the vehicle arose one month and 4130 kilometres after the purchase, that would suggest that the defects were present in the vehicle at the time of purchase. He also referred to the evidence indicating ongoing software updates completed on the vehicle, but that the defects were ongoing and require constant rectification.
  6. [52]
    As to what further investigations and/or repairs would be needed to rectify any current defects, he thought that further and thorough diagnosis was required by Iveco Australia in conjunction with Brisbane Iveco to analyse the cause of the defects.

Evidence of further defects in 2024

  1. [53]
    Exhibit 3 in the Tribunal was a further email from Ms Harris to Mr Percy and               Mr Dionysius dated 21 August 2024, complaining of further defects to the vehicle which occurred as recently as 19 August 2024. She said in that email that as of 19 August 2024, the vehicle went into limp mode, did not change gears and showed the following faults:
  • Radar Sensor dirty
  • AEBS Error
  • Check Engine light
  • Vehicle goes into limp mode.
  1. [54]
    In the same email, she said that those problems occurred ‘a week or so after Iveco have already had our van again for 3 weeks due to other continuing and consistent major faults’. Ms Harris’ email goes on to state that ‘Iveco service was contacted and notified saying that the vehicle would just have to be dropped off again to be looked at…’.

The hearing

  1. [55]
    Despite the Tribunal directing, on 12 July 2023, Iveco Australia and Brisbane Iveco to file copies of statements of evidence on behalf of the Respondents, neither Respondent did so. All that the Respondents filed was an email dated 10 July 2024, in apparent response to the report by Mr Goddard. That email was tendered on behalf of the Respondents, without objection by Ms Harris, and became exhibit 5.
  2. [56]
    That email said in response to Mr Goddard's report, that Iveco Australia suggested that the very limited information and lack of technical content in his report did not add anything towards resolving the matter. Instead, Iveco Australia proposed that:

... the best use of time and resources in resolving this matter expeditiously is for the vehicle to be presented to IVECO Brisbane (Wacol) for thorough technical assessment and remediation.

  1. [57]
    The email noted that the vehicle was then overdue for a service and there was a software update available as well as a ‘proactive “next service” inspection/replacement available’ for a particular part. The email also said that as a     ‘demonstration of goodwill’, Brisbane Iveco would undertake an oil change free of charge, and that Iveco Australia would pay for a like hire vehicle for up to two days while the further work was occurring. With respect, that was hardly a satisfactory response to the litany of allegations of defects raised by Floorit.
  2. [58]
    Nonetheless, each side of the matter made submissions on the evidence which was before the Tribunal.
  3. [59]
    Ms Harris said that she would never have purchased the Iveco vehicle had she known about the defects and problems that have occurred with the vehicle since purchase. In application of the ACL, the ‘major failure’ she submitted had occurred, was the vehicle continuously going into limp mode.
  4. [60]
    Commenting on the evidence as a whole, she said that the vehicle does not seem to be able to be repaired so that it operates correctly for anything more than a week or so. She referred to how the vehicle had gone into limp mode again, shortly prior to the hearing and had to be delivered to the dealership again for repairs. She submitted that there had been instances where it had not been possible to even move the vehicle.
  5. [61]
    From the perspective of Floorit as a business, she said that the firm ‘just cannot trust the vehicle’. Floorit can only put limited supplies in the vehicle because of the need to have to take the material out again, if the vehicle needed to be sent to the dealership for repairs.
  6. [62]
    Floorit had to purchase a replacement vehicle for the Iveco van, because of its unreliability. When the vehicle is not at the dealership being repaired, it remains idle at Floorit’s business premises. She stated that the ‘owner’ of the dealership refused to take her phone calls once she said that she was proposing to bring an application to the Tribunal.
  7. [63]
    She summed up Floorit’s case, using a famous Australian colloquialism, that the vehicle seemed like a ‘lemon’.
  8. [64]
    In response, the representatives of the Respondents did not deny any of the defects and problems which had occurred with the vehicle since purchase. Mr Gerran described the function of the diesel particulate filter to capture vehicle emissions. The problem was described to be a ‘global’ issue and problem with this type of Iveco vehicle. There had been three updates to the software to fix the problem. The vehicle concerned had the first update installed, then after purchase, another update.
  9. [65]
    Mr Percy, the Customer Experience Specialist who represented Iveco Australia referred to attachment 34(a) to exhibit 2, the application to the Tribunal, which was an email from him to the Office of Fair Trading dated 31 March 2023, which relevantly said:

There was an ongoing DPF Programming matter (Particulate Sensor Defect per warranty table below[19]) that was finalised in February this year.

The other matters were also minor in nature and also remedied under warranty.

I don't believe any of these items constitute a major failure and warrant a buy- back however I do acknowledge the Customer was inconvenienced as a result.

  1. [66]
    Mr Percy said that the assumption made in the email was that the updates done to that time had fixed the problem with the vehicle, but he now acknowledged that was not correct. That acknowledgement is, in any case, borne out by the evidence of on-going defects and problems with the vehicle. On behalf of the Respondents, it was said that there had been some misunderstanding or miscommunication with Iveco in Italy about the software updates.
  2. [67]
    Mr Gerran said that Iveco Australia had realised that there had been a further software update which had not been installed, but which was installed in the vehicle as recently as September 2024. He said that the reason why the most recent update had not been installed was because the Tribunal had ordered that there be no further change to the vehicle pending the mechanical assessment of the vehicle ordered by the Tribunal. There was no such order made by the Tribunal.
  3. [68]
    Exhibit 4 in the Tribunal was an inspection and work report by Brisbane Iveco as the dealership, dated 18 September 2024, just two days prior to the hearing. It records an inspection revealing that a fault code in that the ‘engine light’ appeared when the vehicle went into limp mode, and it was hard to change gears when the light was on. The work done was to carry out a software upgrade. The work recorded included that a particular item of software was not loaded.
  4. [69]
    Exhibit 7 tendered at the hearing by Ms Harris on behalf of Floorit was an inspection and work report done for the vehicle dated 13 August 2024. It also referred to the problem of the ‘engine light on dash’, and ‘other numerous faults as well’. The work done including replacing a faulty ‘Lambda sensor’. Included in the other faults was the passenger side window not working. The inspection identified an ‘internal short in [the] switch’. The work found a connection ‘to be loose’.
  5. [70]
    For other reported defects, the report states that there was ‘no fault found’. These were:
    1. ‘when vehicle is at stand still [sic] or into reverse it starts ideling [sic] like a cam in it’;
    2. ‘traction control cuts in and out randomly’;
    3. ‘radio cut out randomly and also has high pitch noisy randomly’;
    4. ‘rear door says its no [sic] closed even thou [sic] it is closed’.[20]
  6. [71]
    Again, with respect, the fact that although no fault was found, that does not diminish the fact that these problems have occurred in the vehicle in any event.
  7. [72]
    Mr Dionysius stated that he agreed with all the allegations contained in the outline of defects contained in Part F of the application to the Tribunal. He said it was difficult to comment on the more detailed description of the defects in attachment A to the application because the relevant employees of the Respondents were no longer employed by the Respondents.
  8. [73]
    In a brief response, Ms Harris noted that the handbrake on the vehicle had failed more than once. She pointed out that several software updates had being done and the second update just recently before the hearing. She said she was not sure what the other updates were about, but if they were intended to fix the ongoing problems in the vehicle, then they did not do so.

Consideration

Summary of issues with the vehicle

  1. [74]
    In summary, the vehicle had caused Floorit what can only be described as a litany of problems. Many of the problems recurred after an attempt had been made by the Iveco dealership to fix them, it would seem, unsuccessfully. Included in those problems were the vehicle going into limp mode, and the handbrake operating and not being able to be released, together with a variety of warning lights being displayed on the dashboard.
  2. [75]
    Several of these problems recurred very shortly after the problem had been attempted to be fixed by the dealership. For example, after the vehicle was examined on 28 July 2022, after going into limp mode on the 17th of July of that year, the vehicle again went into limp mode on the 19th of August, only a matter of weeks after the examination of the problem by the dealership. The limp mode problem continued through to February 2023 and April 2023.
  3. [76]
    The Respondents did not deny the occurrence of these problems. Collectively, the Respondents seem to contend that an overall problem had been that an important software update had not been installed when it should have been. They suggested this may have been because of some misunderstanding or miscommunication with the manufacturer, Iveco, in Italy. With respect, that may be a partial reason for the defects and problems with the vehicle, but that is not an excuse or legal defence to the claim made by Floorit. The dealership as supplier of the goods which is the vehicle, was under a legal duty, because of the statutory guarantees in the ACL, to sell a vehicle that complied with the statutory guarantees. In my view, the dealership did not do that.
  4. [77]
    The sheer number, duration and persistence of the problems with the vehicle meant that Floorit could not rely on the vehicle, when the nature of its business required reliability. I find as a fact that the need by Floorit for a reliable vehicle to be sold to it for the purposes of its business was communicated to the sales representative of Brisbane Iveco as the dealership, when it was purchased by Floorit. None of that is denied by the Respondents.
  5. [78]
    My conclusions on the defective nature of the vehicle are supported by the independent assessment of Mr Goddard. He identified some specific defects on the very day that he examined the vehicle, including that the oil warning light flashed on the vehicle when he started it. He was also told that the handbrake warning came on applying the handbrake, and only cleared by the, at least inconvenient and impractical,  method of disconnecting, and presumably reconnecting the battery. Even the central locking did not operate correctly.
  6. [79]
    Mr Goddard concluded that the defects on the vehicle were ongoing, notwithstanding software updates. Although he could not arrive at a precise diagnosis, he was able to assess the vehicle as having ongoing electrical problems, which certainly seems to have been the case, judging by subsequent treatment by Brisbane Iveco, and very recently, a belated recognition that there was some problem with the software update(s).

Application of the ACL

  1. [80]
    I will first consider application of the guarantee as to acceptable quality contained in s 54 of the ACL. The effect of that provision is that the supplier of goods guarantees that the goods are of ‘acceptable quality.’ Relevantly on the facts of this case, s 54(2) states that goods are of ‘acceptable quality’ if they are as fit for all the purposes for which goods of that kind are commonly supplied, and free from defects, as a reasonable consumer, fully acquainted with the state and condition of the goods, would regard as acceptable having regard to the matters contained in s 54(3).
  2. [81]
    One matter contained in s 54(3) which I consider is specifically applicable, is the price of the goods. Here, Floorit paid a significant amount for the Iveco van, of $87,987.86. A further matter contained in s 54(3) in paragraph (e) is ‘any other relevant circumstances relating to the supply of the goods’. I consider it is relevant to the ‘acceptable quality’ of the van, that it was purchased brand new, and as a vehicle for a business. In my opinion, that imports the requirement of reliability.
  3. [82]
    Given the litany of defects in the vehicle, I find as a starting position, that Brisbane Iveco, as seller of the vehicle, failed to comply with the statutory guarantee of acceptable quality under s 54 of the ACL.
  4. [83]
    Section 55 of the ACL contains a statutory guarantee by the supplier as to fitness of the goods for a purpose disclosed by the consumer. I have found that Floorit disclosed to the sales representative for Brisbane Iveco, the purpose for which Floorit required the vehicle, namely for a business which involved transport of flooring material and tools. The requirement imposed on the supplier is that the goods are ‘reasonably fit for any disclosed purpose’. I find, as a second starting position, that Brisbane Iveco failed to comply with that statutory guarantee, in that the van sold was manifestly unfit for the purpose of use of the vehicle in a flooring supply business.
  5. [84]
    It is then necessary for me to identify whether those non-compliances, are sufficient to mean that Floorit is successful in its action against Brisbane Iveco under s 259 of the ACL.
  6. [85]
    The first criterion for success under s 259, is whether, under s 259(1), a statutory guarantee in Part 3-2 has not been complied with. The ‘starting point’ findings I have made above, in application of s 54 and s 55, satisfy that requirement.
  7. [86]
    There is then a fork in the path that is laid out by s 259 of the ACL, which is whether the relevant failure to comply with the statutory guarantees is a ‘major failure’ to comply with the statutory guarantees, or not. Floorit contended that the defects in the Iveco van were sufficient to amount to a ‘major failure’ of the statutory guarantees.
  8. [87]
    Whether non-compliance with the statutory guarantees amounts to a ‘major failure’ is described by s 260 of the ACL, the text of which I have set out in paragraph [25] above.
  9. [88]
    In my opinion, the defects with the Iveco van were enough to amount to a ‘major failure’ on each of the following grounds contained in s 260:
    1. s 260(1)(a), on the basis that the van would not have been acquired by a  ‘reasonable consumer fully acquainted with the nature and extent of the failures’. Very simply, the number of the defects and the significantly disabling effect that the defects had on the vehicle meant that it was unreliable and therefore would not have been acquired by a reasonable consumer in those circumstances;
    2. s 260(1)(c), on the basis that the van was ‘substantially unfit’ for a purpose for which a van of that kind is commonly supplied, and the van could not easily, and within a reasonable time, be remedied to make it fit for such a purpose. Again, the length of time during which the vehicle suffered from defects, was submitted for repair, and still demonstrated defects, meant that the vehicle was unfit for the purpose for which a van of that kind would be supplied. The van was a commercial vehicle, supplied for a commercial purpose for a business, such as that operated by Floorit. In my view, Brisbane Iveco had several opportunities, and more than a reasonable time, to remedy the defects. It may be that Brisbane Iveco did not understand the software upgrade(s) required to fix the diesel particulate filter problem, but that was of no comfort to Floorit as the consumer. Also, any misunderstanding of that kind does not excuse Brisbane Iveco from the breach of the statutory guarantees;
    3. s 260(1)(d), on the basis that the van was unfit for the disclosed purpose made known to the sales representative of Brisbane Iveco, and that the defects could not be easily, and within a reasonable time, remedied to make the van fit for the disclosed purpose. My reasoning on this basis is a repetition of the reasoning in (a) and (b) above;
    4. s 260(2), on the basis of failure to comply with two or more of the guarantees referred to in s 259(1)(b) (in this case, s 54 and s 55) that applied to the supply of the van, and the van would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of those failures, taken as a whole. Again, my reasoning is a repetition of the reasoning in (a) and (b) above.
  10. [89]
    A finding that the failure to comply with the statutory guarantees is a major failure triggers rights on the part of the consumer under s 259(3) of the ACL, set out in paragraph [24] of these reasons.
  11. [90]
    The right that Floorit asserted following the emergence of the defects, was to reject the supply of the van under s 259(3). It did this on the several occasions described above in the history of the defects, commencing with the email to Brisbane Iveco dated 29 August 2022.[21] In accordance with the requirement under s 259(3)(a) to provide the grounds for the rejection, Floorit stated those grounds in correspondence to Brisbane Iveco.
  12. [91]
    The evidence is that Brisbane Iveco did not respond to those requests for return of the van, and certainly did not agree to do so. After Floorit made the complaint to Fair Trading, Brisbane Iveco responded to Fair Trading, in the email from Mr Percy, dated 31 March 2023,[22] rejecting the request for return of the van. In that email, Mr Percy stated that he did not believe any of the defects complained about constituted a major failure and warranted a ‘buy-back’.
  13. [92]
    Also in the event of a ‘major failure’, the consumer may commence an action against the supplier to recover damages for any loss or damage suffered because of the failure to comply with the guarantee, under s 259(4). Section 259(6) states that the right available under s 259(4) applies in addition to the right to reject the goods concerned under s 259(3). In Part G of the application to the Tribunal which is exhibit 2, in describing the orders that Floorit wanted the Tribunal to make, it stated that it also wished to seek:

… additional monetary payment for the cost of the application as well as loss of business due to the delays caused by our inability to continue our regular work as well as increased wage costs incurred due to the failures of the van. We wish to claim the remaining amount of the tribunal limit being $12,012.14 as we cannot request more than this due to the nature of this application.[23]

  1. [93]
    I will discuss this aspect further below in these reasons.
  2. [94]
    The ACL contains, contains in s 262, a time limitation in which the consumer may notify the supplier that the consumer rejects the goods. The ‘rejection period’ during which the consumer is entitled to notify the supplier that the goods were rejected is described in s 262(2). In summary, that is the period of time from the supply of the goods to the consumer within which it would be reasonable to expect the relevant failure to comply with the statutory guarantee became apparent, having regard to the type of goods, the use to which the goods are likely to be put, the length of time for which it is reasonable for the goods to be used and in which it is reasonable for a failure to become apparent.
  3. [95]
    Here, Floorit first made the request for return of the van in writing, in its email dated 29 August 2022, less than two months after the original supply, and after the first two incidents of the van going into limp mode. I am satisfied that Floorit made its request for return of the vehicle within the definition of the ‘rejection period’ in s 262.
  4. [96]
    The consequences of rejection of the goods are described in s 263. Under s 263(2), the consumer must return the goods to the supplier, after notifying the supplier that the consumer rejects the goods, unless a number of listed conditions apply, which I am satisfied do not apply in this case. Further, under s 263(4), the supplier must, in accordance with a decision to elect between options made by the consumer, relevant to the application made to the tribunal by Floorit, refund any money paid by the consumer for the goods (that is, the purchase price).
  5. [97]
    In this case, Brisbane Iveco has rejected the notification to reject the van. However, the Tribunal has the jurisdiction to order the supplier to comply with the consumer’s rights contained in s 263.
  6. [98]
    The QCAT Appeal Tribunal decided to that effect in Howarth & Anor v Biscamoss Pty Ltd,[24] that s 50A of the Fair Trading Act confers jurisdiction on the Tribunal to enforce a consumer’s rights to reject goods under s 263 of the ACL.[25] Under s 50A(2), as described in paragraph [8] above, the Tribunal may order a person to pay a stated amount to a stated person[26] (which may extend to a refund of the purchase price of a vehicle) and also order a party to return the goods that relate to the claim[27] (to the supplier). I will make orders to that effect, that:
    1. Floorit must return the van to Brisbane Iveco; and
    2. Brisbane Iveco must refund the purchase price for the vehicle of $87,987.86 to Floorit.

Claim by Floorit for additional compensation

  1. [99]
    As I have described above in paragraph [92], Floorit also sought additional compensation to take its claim to the maximum jurisdictional level of the Tribunal,  of $100,000. That claim was only generally expressed, for loss of business and additional wages costs. At the hearing, Ms Harris raised the prospect of the claim for additional compensation to include the interest costs for financing of purchase of the vehicle concerned.
  2. [100]
    At the end of the hearing, I pointed out the generalised nature of the claim for additional compensation beyond the purchase price, and gave Floorit the opportunity to substantiate that claim, by providing further particulars of the claim, including a calculation and additional documents in support of a claim for further compensation, by issuing directions to the parties. The directions required first that Florit provide the particulars by 24 September 2024, and for the Respondents to respond, by making any objection to the admission of those particulars into evidence, by 27 September 2024. No such further particulars were received from Floorit.
  3. [101]
    In those circumstances, and also given that the remedy under s 263 of the ACL allows payment of a refund of the purchase price, without specifically allowing for an order for interest, I will not make a further order for generalised financial compensation in addition to the order for a refund.

Costs - filing fees

  1. [102]
    In Part G of the application filed with the Tribunal, Floorit sought payment ‘for the cost of the application’. The filing fees paid on the application amounted to $367.
  2. [103]
    Section 50C of the Fair Trading Act allows the Tribunal to make an order for costs under s 102 of the QCAT Act but relevantly, only for the prescribed filing fees.
  3. [104]
    The starting position on orders for costs under s 100 of the QCAT Act, is that each party must bear their own costs. However, s 102(1) allows the Tribunal to make an order for costs if the Tribunal considers the ‘interests of justice’ require it to make the order. The factors which the Tribunal may have regard to in deciding whether to award costs, even in respect of filing fees, are contained in s 102(3).
  4. [105]
    Given that Floorit has been wholly successful against Brisbane Iveco, and that Brisbane Iveco did not contest the occurrence of the defects to the van, and filed no substantive material in response to Floorit’s application, despite being directed to do so, in my view, the interests of justice would be best served by ordering Brisbane Iveco to pay the filing fees to Floorit in the amount of $367, and I so order.

Footnotes

[1]Which I will also refer to as the ‘dealership’ or the ‘distributor’ depending on the context.

[2]A receipt for purchase of the vehicle was attachment 2 to exhibit 2.

[3]Attachment 9(a) of exhibit 1.

[4]Which apply regardless of the content of a particular contract for the purchase of goods, and indeed,   s 64 of the ACL provides that provisions of a contract which purport to exclude the relevant statutory guarantees in Part 3-2, Division 1 (ss 51-68) are void.

[5]Given that the Acts Interpretation Act 1901 (Cth) (‘Cth AIA’) applies to interpretation of the ACL, because of s 19(1) of the Fair Trading Act. Section 22(1)(a) of the Cth AIA defines the expression ‘person’, relevantly to include a body corporate as well as an individual person.

[6]Section 58 contained in Part 3-2 concerns availability of repair and parts for the goods concerned, not relevant on the facts of this case.

[7]The statutory guarantee under s 59(1), as discussed above, concerns an express warranty given or made by the manufacturer (as that term is defined in the ACL) of the goods. That statutory guarantee is excluded from the action available to a consumer under s 259. Instead, there is an action open to a consumer against the manufacturer of the goods concerned, to enforce the guarantee given by the manufacturer, under s 271 of the ACL.

[8]Attachment 9(a).

[9]The parties agreed this was an acronym for the ‘diesel particulate filter’ in the vehicle.

[10]Attached to the application to the Tribunal as attachments 7(a) and 7(b).

[11]Attachment 9(a) to the application.

[12]Attachment 15(c) to the application.

[13]Attachment 12 to the application.

[14]Attachment 20 to the application.

[15]Attachment 26(a) to the application.

[16]Attachment 29 to the application.

[17]Attachment A to the application.

[18]Attachment 35 to the application.

[19]Set out in that email.

[20]Although, the report on this fault states that there may have been a fault with a contact switch, and after adjustment it ‘all appears OK’, but the contact switch was replaced and ‘all OK’.

[21]Attachment 6(a) to the application to the Tribunal which is exhibit 2.

[22]Attachment 34(a) to the application to the Tribunal, exhibit 2.

[23]That is a reference to the jurisdictional limit of the Tribunal being $100,000.

[24][2022] QCATA 72.

[25]Specifically at paragraphs [5]-[7].

[26]Section 50(2)(a).

[27]Section 50(2)(d).

Close

Editorial Notes

  • Published Case Name:

    Floorit (Qld) Pty Ltd v IVECO Trucks Australia Ltd & Anor

  • Shortened Case Name:

    Floorit (Qld) Pty Ltd v IVECO Trucks Australia Ltd & Anor

  • MNC:

    [2024] QCAT 449

  • Court:

    QCAT

  • Judge(s):

    Member Sammon

  • Date:

    11 Oct 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
Howarth v Biscamoss Pty Ltd [2022] QCATA 72
2 citations
Jump To
Cite 1 - [2022] QCATA 72
Cite 2 - [2022] QCATA 72

Cases Citing

No judgments on Queensland Judgments cite this judgment.

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