Exit Distraction Free Reading Mode
- Unreported Judgment
Smart Choice Cars Pty Ltd v Wotton QCATA 63
Smart Choice Cars Pty Ltd t/as Warham Williams Motors v Wotton  QCATA 63
Smart Choice Cars Pty Ltd t/as Warham Williams Motors
On the papers
Senior Member Stilgoe OAM
11 May 2015
APPEAL – LEAVE TO APPEAL – MINOR CIVIL DISPUTE – where sale of old four wheel drive car – where defects noticed immediately – where car driven to Darwin – where buyer claimed major failure – where buyer claimed refund of purchase price – whether major failure – whether rejection period ended – whether grounds for leave to appeal
Australian Consumer Law ss 259, 262, 265
Dearman v Dearman (1908) 7 CLR 549
Fox v Percy (2003) 214 CLR 118
Pickering v McArthur  QCA 294
Clarke v Japan Machines (Australia) Pty Ltd  1 Qd R 404
Chambers v Jobling (1986) 7 NSWLR 1
Burton v Chad One Pty Limited  NSWDC 301
Bialous v Budget Vehicles Pty Ltd (Motor Vehicles)  NSWCTTT 130
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act).
REASONS FOR DECISION
- On 15 June 2013, Anthony Wotton bought a 1993 Toyota Landcruiser from Smart Choice Cars Pty Ltd t/as Warham Williams Motors. The car had 474,173 km “on the clock”. Ms Rose, Mr Wotton’s agent drove the car before purchase. She also signed a Form 37a, which is the pre-purchase notice of the statutory cooling off period. Because of the age of the car, the cooling off period was 24 hours.
- The car was unregistered at the time, so Smart Choice Cars had to do some work on the car to obtain a safety certificate. Mr Wotton picked up the car on 28 June 2013. By 2 July 2013, he was driving the car back to Darwin, where he lives.
- Mr Wotton immediately noticed that the two front wheels were vibrating badly, the car was not steering properly, and that he could not get the car over 100km/h. He found that the car was surging, not pulling properly, using oil, and running hot.
- Mr Wotton had the car checked out in Darwin by All Rural Mechanical. All Rural identified a number of problems. Mr Wotton sent Smart Choice Cars a copy of All Rural’s report on 29 July 2013. Receiving no satisfaction from Smart Choice Cars, on 19 August 2013, Mr Wotton wrote to Smart Choice Cars calling for full reimbursement of his costs of buying the car. Smart Choice Cars refused to reimburse Mr Wotton, so Mr Wotton filed a claim in the minor civil disputes jurisdiction of the tribunal. The tribunal ordered Mr Wotton make the car available for collection and, upon collection, Smart Choice Cars pay Mr Wotton $18,796.94.
- Smart Choice Cars wants to appeal that decision. Because this is an appeal from a decision of the tribunal in its minor civil disputes jurisdiction, leave is necessary. Leave to appeal will usually be granted where there is a reasonable argument that the decision is attended by error, and an appeal is necessary to correct a substantial injustice to the applicant caused by that error.
- Smart Choice Cars says the tribunal erred in its assessment of the evidence. It says the tribunal erred in finding that Mr Wotton acted promptly in rejecting the car. It says that the tribunal failed to consider whether Mr Wotton mitigated his loss. It says the tribunal erred in finding it breached s 54 of the Australian Consumer Law. It says it cannot comply with the tribunal’s orders because the car is owned by Mr Wotton’s financier, and Mr Wotton has taken no steps to cancel the finance contract.
- Section 54(1) of the Australian Consumer Law implies a guarantee that goods supplied in trade or commerce to a consumer will be of acceptable quality. Smart Choice Cars submits that the tribunal erred in finding that the car was not of acceptable quality when it had been in Mr Wotton’s possession for more than a month and he had driven it more than 4,400 km.
- Whether goods are of acceptable quality is decided with reference to five factors, four of which are relevant here: the nature of the goods; the price; any representations made at the time of sale; and any other relevant factor. The age and distance travelled by the car before purchase are both relevant factors.
- The tribunal did consider those factors. The learned Adjudicator concluded that, even though the car was 20 years old, Mr Wotton paid a “significant sum” for it and was entitled to expect that the car would be serviceable for more than 5,000 km. The evidence can support that conclusion.
- The tribunal also found that the guarantee had been breached and the breach was a major failure. The tribunal found no reasonable person, being fully acquainted with the true state of the car at the time of purchase, would have bought the car.
- Smart Choice Cars takes issue with that finding. It says the tribunal relied on reports prepared over one month after the date of sale and after the car had been driven for nearly 5,000 km (“the Darwin report”).
- The learned Adjudicator took the parties through the repairs proposed in the Darwin report. The Darwin report stated that the engine mountings were broken. Smart Choice Cars rebuilt the motor before Mr Wotton took possession. The learned Adjudicator commented that a car would not get a safety certificate in Queensland if the engine mounts were broken. He also commented that this is something that a driver would notice and the parties agreed. That evidence seems to suggest that the engine mounts were not broken when the car left Smart Choice Cars.
- The learned Adjudicator noted that a handbrake adjustment, after 4500 km travel, was just wear and tear. He noted that a leaking inlet manifold gasket may, or may not, be a roadworthy matter. He noted that if some matters were adequate when the car left Queensland but were not adequate when the car arrived in Darwin, the car could have been “on the cusp”. Mr Wotton conceded that possibility but he told the learned Adjudicator that if the parts were worn, they should have been changed.
- I do not agree with the learned Adjudicator’s finding that the Darwin report suggests that the car was not in roadworthy condition when it left Queensland. I do not agree that the Darwin report could be relied upon as evidence of the condition of the car at the time of sale. Therefore, it could not be relied upon to make a finding that a reasonable consumer, fully acquainted with the nature and extent of the failure, would not have acquired the goods. The Darwin report does, however, support a finding that the car was in a condition consistent with its age and mileage and, by the time it arrived in Darwin, it was showing further signs of its age.
- Even if there is a major failure in goods, a consumer is not automatically entitled to return the goods and claim a refund if the rejection period has ended. The rejection period is the time in which it would be reasonable to expect the relevant failure to comply with the guarantee having regard to the type of goods, the use to which they are put, the length of time for which it is reasonable to use them and the amount of use.
- The learned Adjudicator found that that the rejection period had not ended. I disagree with that finding. As I have already noted, Mr Wotton immediately noticed that the two front wheels were vibrating badly, the car was not steering properly, and that he could not get the car over 100km/h. He found that the car was surging, not pulling properly, using oil, and running hot. And yet he kept driving. In my view, the rejection period ended when Mr Wotton did notice the car was defective.
- When Mr Wotton arrived in Darwin, he added firefighting equipment to the car and continued to use it. That action is inconsistent with a rejection of the car.
- When a consumer notifies a supplier that goods are rejected, the consumer may also terminate a contract for supply of services that are connected with the rejected goods. Mr Wotton financed the car but he has made no effort to cancel the contract of supply. Despite his letter of demand, Mr Wotton’s actions are not consistent with a rejection.
- Leave to appeal should be granted, the appeal allowed, and the decision of 4 November 2014 set aside.
- Mr Wotton may have a claim for damages for breach of the guarantee but, on the current material, I am not in a position to consider it. I have already observed the learned Adjudicator’s remarks that not all of the matters contained in the Darwin report are necessarily defects that existed at the time of sale. The question of mitigation is also relevant to a claim for damages. I will adjourn the further hearing of this dispute. Mr Wotton may file and serve any additional material in support of a claim for damages by 4:00pm on 1 June 2015. Smart Choice Cars may file and serve any material in response by 4:00pm on 22 June 2015. The dispute will be listed for rehearing on a date to be advised.
 Letter Wotton to Smart Choice Cars 19 August 2013.
 QCAT Act s 142(3)(a)(i).
 Pickering v McArthur  QCA 294 at .
 Dearman v Dearman (1908) 7 CLR 549 at 561; Fox v Percy (2003) 214 CLR 118 at 125-126.
 Chambers v Jobling (1986) 7 NSWLR 1 at 10.
 Australian Consumer Law s 54(3).
 Burton v Chad One Pty Limited  NSWDC 301 at ; Bialous v Budget Vehicles Pty Ltd (Motor Vehicles)  NSWCTTT 130 at .
 Transcript page 1-21, lines 45 – 46.
 Transcript page 1-22, lines 8 – 10.
 Transcript page 1-22, lines 12 – 17.
 Transcript page 1-23, lines 36 – 38.
 Transcript page 1-24, line 25.
 Transcript page 1-26, lines 39 – 45.
 Transcript page 1-27, lines 1 – 2.
 Transcript page 1-27, lines 38 – 40.
 Transcript page 1-27, lines 42 – 44.
 Australian Consumer Law s 262(1)(a).
 Australian Consumer Law s 262(2).
 Transcript page 1-30, lines 38 – 45.
 Australian Consumer Law s 265(1).
- Published Case Name:
Smart Choice Cars Pty Ltd t/as Warham Williams Motors v Anthony Wotton
- Shortened Case Name:
Smart Choice Cars Pty Ltd v Wotton
 QCATA 63
Senior Member Stilgoe
11 May 2015