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McBrian v Pouhila QCATA 5
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
McBrian v Pouhila  QCATA 5
ORIGINATING APPLICATION NO/S:
22 January 2019
On the papers
APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – RIGHT OF APPEAL – where application for leave to appeal minor civil dispute – where appellant supplied defective vehicle – where order awarded respondent consumers $25,000 refund of purchase price plus allowable costs – whether order permitted under ACL provisions – whether order for costs breached Tribunal’s monetary limit for minor civil disputes – whether defects constituted major breach of guarantee under ACL – where evidence of immediate problems with vehicle confirmed by mechanics and advised to supplier but supplier failed to repair – whether rejection period had passed – where rejection for minor breach of guarantee available in any case to the consumers
Competition And Consumer Act 2010 (Cth) - Schedule 2
s 259(3)(a), s 263(4)
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 102, s 106, Schedule 3
Queensland Civil and Administrative Tribunal Rules 2009 (Qld), r 84
Oshlack v Richmond River Council (1998) 193 CLR 72
Pickering v McArthur  QCA 294
Prestige Auto Traders Pty Ltd v Bonnefin  NSWSC 149
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld).
REASONS FOR DECISION
- Mr and Mrs Pouhila purchased a Volkswagen van from the appellant, a dealer in used motor vehicles, on 12 June 2017 for $25,990. With costs of registration stamp duty and an extended warranty the cost was $28,758.
- Mr and Mrs Pouhila had problems with the van from the first day. They took it to a number of mechanics at the direction of the respondent but warning lights kept appearing and it broke down completely on 10 April 2018.
- Mr and Mrs Pouhila applied to the Tribunal seeking a refund of $25,000 and the filing fee of $326.80. The matter was heard before an Adjudicator on 26 July 2018 with the Adjudicator ordering Mr McBrian, the dealer, to pay back to Mr and Mrs Pouhila $25,000 plus the $326.80 filing fee. The Adjudicator also ordered that upon that payment being made Mr and Mrs Pouhila were to pay out the chattel mortgage in respect of the vehicle and transfer ownership back to Mr McBrian.
- Mr McBrian wants to appeal the decision.
- Given this is an appeal from a decision made in the Tribunal’s Minor Civil Dispute jurisdiction, leave to appeal must first be obtained before any appeal proceeds.
- Leave to appeal will usually only be granted where an appeal is necessary to correct a substantial injustice to the appellant and where there is a reasonable argument that there is an error to be corrected.
- Though not represented at hearing by solicitors, Mr McBrian made submissions drafted by legal representatives.
- Mr and Mrs Pouhila proposed to adduce fresh evidence in the appeal. That was opposed by Mr McBrian. Directions were given for a formal application to be made however no application was filed though certain documents were. In so far as necessary, to finalise the matter, I determine that leave to adduce fresh evidence should be refused.
- Mr McBrian has a number of complaints about the decision below. There is no challenge to the proposition that there was a defect with the vehicle and consequently a breach of guarantee under the Competition and Consumer Act 2010 (Cth), Schedule 2 (‘ACL’). Rather the issue is that any breach was minor and Mr and Mrs Pouhila were only entitled to have the vehicle repaired, not recover their purchase price. Then, if deemed major, the rejection period for any claim to a refund had in any case expired when the vehicle finally broke down.
- Mr McBrian claims the Tribunal had no jurisdiction to make the orders it did, and alternatively, if it did have jurisdiction then the appropriate orders should have been that Mr McBrian should remedy his breach of the ACL guarantee and repair the vehicle within 14 days, or Mr and Mrs Pouhila have the vehicle repaired and Mr McBrian pay the costs of those repairs.
- Mr McBrian argues the Tribunal has a jurisdictional limit in minor civil disputes of $25,000. Accordingly the order requiring him to pay back $25,000 plus filing fee of $326.80 is an order for more than the prescribed amount and therefore invalid.
- Mr and Mrs Pouhila abandoned any claim in excess of the Tribunal’s monetary limit of $25,000. There was nothing wrong with that. Litigants in the Magistrates and District Courts are similarly entitled to abandon excess to purposely fall within the jurisdiction of a lower court. The Tribunal process is far cheaper than proceedings in the Magistrates Court where parties are often legally represented and sometimes significant cost orders are made.
- The definition of minor civil dispute in Schedule 3 to the Queensland Civil and Administrative Tribunal Act 2009 (Qld) includes:
- a claim to recover a debt or liquidated demand of money, with or without interest, of up to the prescribed amount; or
- a claim arising out of a contract between a consumer and trader, or a contract between 2 or more traders, that is—
- for payment of money of a value not more than the prescribed amount;
- In Schedule 3, ‘prescribed amount’ means $25,000.
- By s 102 of the QCAT Act:
- The Tribunal may make an order requiring a party to a proceeding to pay all or a stated part of the costs of another party to the proceeding if the Tribunal considers the interests of justice require it to make the order.
- However, the only costs the Tribunal may award under subsection (1) against a party to a proceeding for a minor civil dispute are the costs stated in the rules as costs that may be awarded for minor civil disputes under this section.
- By s 106 of the QCAT Act:
If the Tribunal may award costs under this Act or an enabling Act, the costs may be awarded at any stage of a proceeding or after the proceeding has ended.
- By rule 84 of the Queensland Civil and Administrative Tribunal Rules 2009 (Qld):
- For section 102 of the Act, the Tribunal may award costs against a party to a proceeding for a minor debt claim only to order the party to pay an amount for 1 or more of the following—
- the prescribed fee for filing the application for the claim;
- a fee charged by a service provider for electronically filing a document;
- a service fee and travelling allowance at the rate of the prescribed bailiff fees;
- a business name or company search fee.
- The definition of minor civil dispute therefore encompasses a consumer dispute which is a claim arising out of a contract between a consumer and trader for the payment of money of not more than the prescribed amount. There is no mention of costs being included in the calculation of any claim for money not more than the prescribed amount.
- Cost orders are incidental to the substantive proceedings in courts and Tribunals. They are intended to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings.
- Section 106 clearly provides that a cost award may be made after the substantive proceeding has ended, the substantive proceeding in the case of a minor civil dispute consumer claim being a claim for money up to the prescribed amount.
- Cost orders in minor civil dispute matters are discretionary, although, in the Tribunal that discretion is strictly limited to awards as provided for in s 102 and r 84.
- I see no error in the learned Adjudicator’s award of costs in addition to an award to the limit of the prescribed amount of $25,000.
The Order Made
- Mr McBrian next submits the Tribunal was only entitled to order rejection of the vehicle or award compensation, not order the payment of an amount less than the sale price of the vehicle and more than the repair cost.
- Leaving aside the reference to the repair cost, upon which Mr McBrian led no evidence, Mr McBrian was ordered to pay Mr and Mrs Pouhila $25,000 for claim and the filing fee. The applicants claimed in their initiating application a ‘refund’ of $25,000.
- By s 259(3)(a) of the ACL if a failure to comply with a guarantee under the ACL cannot be remedied or is a major failure, the consumer may, subject to s 262, notify the supplier that the consumer rejects the goods.
- By s 263(4), if the goods are rejected the supplier must, in accordance with an election made by the consumer, refund any money paid by the consumer for the goods.
- As set out more fully below, Mr and Mrs Pouhila rejected the vehicle almost immediately after purchase.
- The order made by the learned Adjudicator was essentially ordering a refund of the money paid for the vehicle, subject to the monetary constraint on the Tribunal’s jurisdiction to make orders not exceeding $25,000. The word refund did not have to be used in the order to make the order one within power and pursuant to the provisions of the ACL. There was no error here.
- The next complaint is that there was no major failure to comply with a guarantee under the ACL. Accordingly, says Mr McBrian, Mr and Mrs Pouhila were not entitled to reject the vehicle.
- Mr McBrian says that when it was sold the vehicle had previously been used for commercial purposes and had already travelled 167,586 km and was 5 years old. From the date of sale to the date of hearing the applicants had driven the vehicle for another 10 months and travelled more than 24,000 km. Then it is asserted that Mr McBrian had ‘complied with the guarantee’ on each occasion by repairing the vehicle each time Mr McBrian was made aware of any minor failure.
- Mr and Mrs Pouhila handed up reports from mechanics who inspected, and apparently according to Mr McBrian, repaired, the vehicle when it was brought into the workshop by Mr and Mrs Pouhila.
- Mr and Mrs Pouhila said that warning lights came on in the vehicle when they drove away from the car yard the day they bought it. They contacted Mr McBrian who told them to take it to Pitlane Automotive Centre.
- They did that the following day, 13 June 2017. Mr Horsley from Pitlane subsequently made a statement which was handed up at the hearing by Mr and Mrs Pouhila. In it he says the vehicle presented to his workshop with an engine check light on and he diagnosed faults with respect to the gearbox, ABS and other problems. In total there were approximately 11 fault codes showing. He advised Mr and Mrs Pouhila at the time that ‘the van had troubles’ and it was most likely the reason why it was traded in by the previous owners.
- Mr and Mrs Pouhila immediately informed Mr McBrian what Mr Horsley had said and Mr McBrian then told them to take the vehicle to Meadowbrook Mechanical, another workshop. They did that the next day, on 14 June 2017.
- Ms Crickmay from Meadowbrook Mechanical also provided Mr and Mrs Pouhila with a statement which was handed up to the learned Adjudicator. In that statement she says on 14 June 2017, and then again on 24 August 2017 and then again on 19 September 2017, Mr and Mrs Pouhila brought the van into their workshop. The engine warning light or lights were on.
- They scanned for problems and found various engine codes diagnosed including ABS faults and fuel injector code faults. In the statement she says this was discussed with Mr McBrian. Mr McBrian’s response was to instruct them to simply clear the codes and return the car to Mr and Mrs Pouhila. They were instructed not to do any other work on the vehicle.
- Directing Mr and Mrs Pouhila to take the vehicle to repairers then telling the repairers to clear warning codes and not to do anything else appears to be the ‘repair work’ Mr McBrian claims he did.
- There was no evidence that Mr McBrian repaired the vehicle at any time, and certainly not each time he was made aware of any ‘minor failure’ as claimed in his submissions. Indeed the evidence suggests to the contrary, namely that he studiously avoided doing anything to repair the vehicle.
- There was also no evidence that repairs to the vehicle could be completed ‘easily, and within a reasonable time, at minimal cost’ as submitted by Mr McBrian. The only estimate of a repair cost was provided by Mr and Mrs Pouhila concerning the ABS system and their additional evidence at hearing was that they were told at the time of obtaining the estimate that the repairer thought that the ABS fault was not the only one. There was also the evidence from Pitlane that there were many faults, not just ABS. According to Mr and Mrs Pouhila, Darren from Meadowbrook Mechanical told them the repairs would cost a lot of money.
- At the hearing Mr McBrian handed up a document from a mechanic which said if there was a fault with the ABS a warning light would come on. The document said nothing more and shed little light on any issue in dispute.
- It was put to Mr McBrian that the warning codes coming on in the vehicle translated to multiple problems with the car in terms of operation, function, utility and fitness for purpose. His reply was, as with the statement from the mechanic he handed up, uninformative and of little assistance. His response was perhaps best described as confusing and at best that he considered the problem might be a trivial one, perhaps an oxygen sensor. There was no evidence to support that assertion however.
- There was evidence before the learned Adjudicator upon which he could rely to conclude that the defects were serious and substantial and constituted a major breach of guarantee under the ACL.
- Mr McBrian also argued that there was no actionable major failure to comply with a guarantee under the ACL in any case because the rejection period had expired for this 5 year old vehicle which had done 167,586 kilometres at the time of sale because it travelled an additional 24,000 kilometres before it broke down.
- By s 262(1)(2) of the ACL the rejection period referred to is the period from the time of supply of the goods to the consumer within which time it would have been reasonable to expect the relevant failure to comply with a guarantee to become apparent.
- But Mr and Mrs Pouhila complained about the problem with the warning lights the day after first purchase, and from the evidence given by them at hearing, consistently thereafter. They wanted to return the vehicle then but Mr McBrian refused either an exchange or a refund of money. All their complaints fell on deaf ears.
- Mr McBrian was well aware of the complaints about the vehicle but simply refused to accept any responsibility to repair the vehicle. Meadowbrook Mechanical discussed the ABS and fuel injector code faults with Mr McBrian and his response was to tell them to clear away the faults and not do any work on the vehicle.
- The learned Adjudicator found the vehicle was defective from the date of sale, that the defects were major failures of the vehicle, and given the evidence from the mechanical workshops, which the learned Adjudicator said he relied on, that conclusion was available to him and both reasonable and compelling in the circumstances.
- Similarly the learned Adjudicator’s finding that, as people without mechanical expertise, in the face of the refusal by Mr McBrian to effect repairs to the vehicle, it was reasonable for them to persist with the vehicle hoping the problems would ameliorate over time. Mr McBrian would tell the workshops to simply turn off the warning lights. The warning lights would come back on but after the vehicle went to the workshops it was driven away with the appearance of being repaired.
- The learned Adjudicator’s finding that the rejection period had not passed when the vehicle finally broke down was available to him on the evidence.
- Mr McBrian referred to the New South Wales Supreme Court appeal decision of Prestige Auto Traders Pty Ltd v Bonnefin where the Magistrate whose decision was appealed from found that, in circumstances where the consumer had repeatedly complained to the trader about defects with the vehicle purchased, the rejection period had not expired given the complaints made. That conclusion was not challenged on the appeal and no criticism of that proposition is to be found in the appeal decision. Far from supporting an argument by Mr McBrian that the rejection period had expired, the decision suggests a contrary conclusion might be drawn where early and constant complaint is made about a defective vehicle but the dealer refuses to act on the complaint.
- I find no error here on the part of the learned Adjudicator in his finding that the rejection period had not expired as at date of final break down.
Minor Failure Only
- Even if it could be argued that there were only minor failures to comply with a guarantee, it would appear Mr and Mrs Pouhila would have been entitled to recover their money in any case.
- In his written submissions Mr McBrian submits that any defect with the vehicle was obvious and repairable and that he was always willing to repair minor defects.
- By s 259(2)(b)(ii), if a failure to comply with a guarantee can be remedied and is not a major failure, the consumer may require the supplier to remedy the failure within a reasonable time or, if the supplier refuses to do that, the consumer may notify the supplier that the consumer rejects the goods.
- Mr and Mrs Pouhila informed Mr McBrian about the defects from outset, as too did his own mechanical workshops. Despite that and despite requests by Mr and Mrs Pouhila to fix the problems he did nothing about it. Mr and Mrs Pouhila were therefore, in such circumstances, entitled to reject the vehicle and seek recovery of the purchase price even if the defects constituted only a minor failure of guarantee.
- There is no error to be corrected in the decision made below, there are no grounds to grant leave to appeal and the application is therefore dismissed.
 QCAT Act, s 142(3)(a)(i).
 Pickering v McArthur  QCA 294, .
 Oshlack v Richmond River Council (1998) 193 CLR 72.
 Appellant’s submissions filed 19 October 2018, page 2 item 5(b)
 K & G Automotive Services Pty Ltd quotation 11 April 2018 for $4,375.
 Pitlane Automotive Centre report referred to ‘gearbox, ABS and a few others’.
  NSWSC 149.
 Ibid .
- Published Case Name:
David McBrian v Eloise Pouhila & Keni Pouhila
- Shortened Case Name:
McBrian v Pouhila
 QCATA 5
22 Jan 2019