Howarth v Biscamoss Pty Ltd[2022] QCATA 72

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

1. [1]
   The appellants are the owners of a 2014 Holden Colorado, which they purchased on 16 January 2014 as a new vehicle from the respondent, which is a retail motor vehicle dealer They paid the sum of $54,047.40 for the vehicle.
2. [2]
   In their Amended Application, the Appellants alleged that at various times, although  not necessarily at the time of delivery of the vehicle, the vehicle had or developed seven specific defects. The seven defects which the appellants originally complained about were that the vehicle had:

   1. (a)
      excessive oil consumption;
   2. (b)
      suspension failure;
   3. (c)
      defective paintwork;
   4. (d)
      an improperly labelled fuse board;
   5. (e)
      electrical problems causing the motor vehicle to go into limp mode;
   6. (f)
      defective right hand front drive shaft seal; and
   7. (g)
      fuel economy which was low and not in accordance with claimed specifications.
3. [3]
   Only 2 of those 7 are significant in this appeal, namely the excessive oil consumption issue and failure of the suspension to the vehicle.

The relief sought under the Australian Consumer Law and orders that this Tribunal could make

4. [4]
   The applicants sought various forms of relief under the Australian Consumer Law, which is Schedule 2 to the Competition and Consumer Act 2010 (Cth). This Tribunal is vested with jurisdiction in relation to motor vehicle consumer claims arising out of Australian Consumer Law (ACL) by virtue of Section 50A of the Fair Trading Act 1989 (Qld). Section 50A(1) of the Fair Trading Act 1989 (Qld) provides that a person may apply, as provided under the QCAT Act, to this tribunal for an order mentioned in subsection (2) for an action (a) under a provision of the Australian Consumer Law (Queensland) listed in the table to this section; and (b) relating to a motor vehicle; and  (c) seeking an amount or value of other relief of not more than $100,000.
5. [5]
   The primary relief sought below was a refund of what they had paid for the vehicle, as well as damages. It has been suggested that Section 50A does not expressly establish a mechanism by which a consumer can enforce the supplier’s obligation to provide a refund arising under s 263(4)(a). This issue was considered by the New South Wales Civil and Administrative Tribunal in Lam v Steve Jarvin Motors Pty Ltd [2016] NSWCATAP 186. The Appeal Panel, which included the President of the Tribunal, Wright J, stated (at [99]): “A contrary indication in Part 5-4 is that the legislature expressly stated that certain amounts could be recovered “by action” by the consumer in s 259(2)(b)(i), s 259(3)(b) and s 259(4) but did not do so in respect of the obligations to provide a refund or replacement in s 263(4). This might, in other circumstances, be sufficient to establish that the obligations under s 263(4) were not intended to be able to be enforced by action by the consumer. Nonetheless, given the nature, scope and purpose of the ACL NSW, the mischief against which it is directed, the nature of the conduct prescribed and the pre-existing law, the failure expressly to provide that the obligation under s 263(4) could be enforced by action should not be taken to exclude the implication of a right on the part of the consumer to bring proceedings to enforce the supplier’s duty to provide a refund or replacement”.
6. [6]
   The orders that the this Tribunal could make are set out in s 50A(2) and they include (a) an order requiring a party to the proceeding to pay a stated amount to a stated person; (b) an order that a stated amount is not due or owing by the applicant to a stated person, or by any party to the proceeding to the applicant; (c) an order requiring a party to the proceeding, other than the applicant, to perform work to rectify a defect in goods or services to which the claim relates; (d) 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; and (e) an order combining 2 or more orders mentioned in paragraphs (a), (b), (c) and (d).
7. [7]
   The approach in Lam is clearly correct and there is no doubt that that Tribunal 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 under s 263(4)(a).
8. [8]
   The appellants also claimed exemplary damages which in the initial Application was for $1,615,853.92. In the Amended Application, this was reduced to $100,000. Both claims were dismissed. It was held that exemplary damages were not available under the Australian Consumer Law. The Appellants had also claimed damages stress, distress, inconvenience, impacts on their health, loss of enjoyment, and lost time and productivity. In the initial Application, these claims were for an amount of $334,500 but were also reduced to $100,000 in the Amended Application. All of these claims were rejected. and there is no appeal from that rejection in this appeal.
9. [9]
   The trial of the matter was heard on 13 November 2020.The presiding member delivered written reasons in which he accepted that there were three defects in existence at the time of supply. These defects manifested themselves over a five-year period but held that they were not individually, or cumulatively, a major defect within the meaning of that term in the ACL. In the result the member ordered pursuant to s 259(2)(a) of the ACL that the respondent replace the motor vehicle’s engine in the event that the applicants chose to make the motor vehicle available for this purpose. Thus far they have not made it available for that to occur.
10. [10]
    The appellants have appealed that order, seeking instead that they be provided with a refund of what they paid, and for the car to be returned.

The guarantee of "acceptable quality" and “major failures” in the ACL

11. [11]
    A guarantee of "acceptable quality" of a consumer product is provided for by s 54 of the ACL, which provides as follows:

Section 54 - Guarantee as to acceptable quality

(1) If:

(a) a person supplies, in trade or commerce, goods to a consumer; and

(b) the supply does not occur by way of sale by auction;

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

(2) Goods are of acceptable quality if they are as:

(a) fit for all the purposes for which goods of that kind are commonly supplied; and

(b) acceptable in appearance and finish; and

(c) free from defects; and

(d) safe; and

(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).

(3) The matters for the purposes of subsection (2) are:

(a) the nature of the goods; and

(b) the price of the goods (if relevant); and

(c) any statements made about the goods on any packaging or label on the goods; and

(d) any representation made about the goods by the supplier or manufacturer of the goods; and

(e) any other relevant circumstances relating to the supply of the goods.

(4) If:

(a) goods supplied to a consumer are not of acceptable quality; and

(b) the only reason or reasons why they are not of acceptable quality were specifically drawn to the consumer’s attention before the consumer agreed to the supply;

the goods are taken to be of acceptable quality.

(5) If:

(a) goods are displayed for sale or hire; and

(b) the goods would not be of acceptable quality if they were supplied to a consumer;

the reason or reasons why they are not of acceptable quality are taken, for the purposes of subsection (4), to have been specifically drawn to a consumer’s attention if those reasons were disclosed on a written notice that was displayed with the goods and that was transparent.

(6) Goods do not fail to be of acceptable quality if:

(a) the consumer to whom they are supplied causes them to become of unacceptable quality, or fails to take reasonable steps to prevent them from becoming of unacceptable quality; and

(b) they are damaged by abnormal use.

(7) Goods do not fail to be of acceptable quality if:

(a) the consumer acquiring the goods examines them before the consumer agrees to the supply of the goods; and

(b) the examination ought reasonably to have revealed that the goods were not of acceptable quality.

12. [12]
    Hence, Section 54(1) of the Australian Consumer Law has the effect that where a person supplies goods in trade or commerce, the goods are guaranteed to be of ‘acceptable quality’. The time at which goods are to be of acceptable quality is the time at which the goods are supplied to the consumer: per the Full Court of the Federal Court in Medtel Pty Ltd v Courtney (2003) 130 FCR 182 at [64] and [70] per Branson J. I discuss this decision in greater detail later in these reasons.
13. [13]
    More recently in Williams v Toyota Motor Corporation Australia Limited (Initial Trial) [2022] FCA 344 Justice Lee held as follows in relation to the operation of s 54:

[164] Despite the obscure drafting of other sections of the ACL, s 54 is relatively straightforward. The continued use of the conjunction “and” in s 54(2) makes clear that goods must possess all of the qualities listed in s 54(2), to the requisite standard, in order to comply with the guarantee of acceptable quality. Failure to possess any one of those qualities will result in a failure to comply with the guarantee: see Vautin v By Winddown, Inc (formerly Bertram Yachts)(No 4) [2018] FCA 426; (2018) 362 ALR 702 (at 732 [142(d) — (f)] per Derrington J); Australian Competition and Consumer Commission v Jayco Corporation Pty Ltd [2020] FCA 1672 (at [25] per Wheelahan J).

[165] The question of whether the goods are of acceptable quality is to be answered by reference to the quality of the goods at the time of supply: Capic v Ford Motor Company of Australia Pty Ltd [2021] FCA 715; (2021) 154 ACSR 235 (at 377 [606] per Perram J); Jayco (at [27]); Vautin (at 738 [170]–[171], 760 [263]). The applicable standard of “acceptable quality” is to be determined by reference to what the “reasonable consumer” would regard as acceptable, having regard to the matters in s 54(3). The relevant enquiry is necessarily objective: Medtel Pty Ltd v Courtney [2003] FCAFC 151; (2003) 130 FCR 182 (at 199 [43] per Moore J, 205 [64] and 207 [72] per Branson J, with whom Jacobson J agreed at 209 [81]); Capic (at 265 [105]). As Wheelahan J explained in Jayco (at [26]):

The reasonable consumer sits with an array of other hypothetical persons who have been recruited by the law and by reference to whom objective standards are evaluated: see, Healthcare at Home Ltd v The Common Services Agency [2014] UKSC 49; 4 All ER 210 at [1] –[4] (Lord Reed JSC). Such a person has been described as an anthropomorphic conception of justice that is and must be the court itself: see Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696 at 728 (Lord Radcliffe).

[166] In determining whether the “reasonable consumer” would regard the goods as acceptable at the time of supply, one must assume that the construct is “fully acquainted with the state and condition of the goods (including any hidden defects of the goods)”: s 54(2) of the ACL; see also Medtel (at 205–206 [65]–[70]). Thus, in the present case, the “reasonable consumer” is taken be fully acquainted with the nature of the Core Defect, including the ways in which it causes the Relevant Vehicles to malfunction when exposed to the High Speed Driving Pattern, and the class of consequences or symptoms associated with the Core Defect.

[167] Although TMCA accepts that the question of whether the goods are of acceptable quality is to be assessed by reference to the quality of the goods at the time of supply, it submits that the determination of what was objectively reasonable for the consumer to expect is made taking into account all relevant information available at the time of trial. Relying on the reasoning in Medtel (at 200 [45], 203 [57], 206 [70], 209 [81]), TMCA submits that “the individual experience of each vehicle owner, affects the assessment”.

[168] The flaw in this proposition is that the state and condition of the vehicles at the time of supply is not determined by anything occurring after the time of supply. The fact that a defective product has continued to perform following the time of supply through to the time of trial does not defeat a finding that the product was defective at the time it was supplied. In Medtel, as Branson J (at 202 [54], with whom Jacobson J agreed at 209 [81]) explained, “the principal issue to be determined … is whether a product which, at the time of trial, can be demonstrated to have performed, and to be continuing to perform, satisfactorily can nonetheless be found to be “not of merchantable quality” within the meaning of s 74D(1) of the Trade Practices Act 1974 (Cth) ”. Her Honour found (at 199 [41]) that the goods in issue — pacemakers — were not of merchantable quality at the time of supply, despite the fact that the applicant’s pacemaker had not failed by the time of trial: see generally at 197–202 [36]–[52].

14. [14]
    In relation to the supply of goods, such as a vehicle, the remedies available to a consumer where goods are not of an acceptable quality under the ACL include: (a) an action to recover from the supplier all reasonable costs incurred by the consumer in having the failure remedied, in circumstances where the failure is not a major failure and the supplier has not remedied it within a reasonable time (s 259(2)(b)(i)); (b) an action to recover from the supplier compensation for any reduction in the value of the goods below the price paid by the consumer, in circumstances where the failure is a major failure and the consumer has not rejected the goods (s 259(3)(b)); and  (c) an action to recover from the supplier damages for loss or damage suffered by the consumer where such loss or damage was reasonably foreseeable in respect of the failure (s 259(4)).
15. [15]
    In respect of “major failures” , Section 260 of the ACL provides as follows:

When a failure to comply with a guarantee is a major failure

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: 

(a) the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or

(b) the goods depart in one or more significant respects:

(i) if they were supplied by description—from that description; or

(ii) if they were supplied by reference to a sample or demonstration model—from that sample or demonstration model; or

(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

(d) the goods are unfit for a disclosed purpose that was made known to:

(i) the supplier of the goods; or

(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

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

16. [16]
    Rejection is governed by s 262 and 263 of the ACL. They provide as follows:

262 When consumers are not entitled to reject goods

(1) A consumer is not entitled, under section 259, to notify a supplier of goods that the consumer rejects the goods if:

(a) the rejection period for the goods has ended; or

(b) the goods have been lost, destroyed or disposed of by the consumer; or

(c) the goods were damaged after being delivered to the consumer for reasons not related to their state or condition at the time of supply; or

(d) the goods have been attached to, or incorporated in, any real or personal property and they cannot be detached or isolated without damaging them.

(2) The rejection period for goods is the period from the time of the supply of the goods to the consumer within which it would be reasonable to expect the relevant failure to comply with a guarantee referred to in section 259(1)(b) to become apparent having regard to:

(a) the type of goods; and

(b) the use to which a consumer is likely to put them; and

(c) the length of time for which it is reasonable for them to be used; and

(d) the amount of use to which it is reasonable for them to be put before such a failure becomes apparent.

263 Consequences of rejecting goods

(1) This section applies if, under section 259, a consumer notifies a supplier of goods that the consumer rejects the goods.

(2) The consumer must return the goods to the supplier unless:

(a) the goods have already been returned to, or retrieved by, the supplier; or

(b) the goods cannot be returned, removed or transported without significant cost to the consumer because of:

(i) the nature of the failure to comply with the guarantee to which the rejection relates; or

(ii) the size or height, or method of attachment, of the goods.

(3) If subsection (2)(b) applies, the supplier must, within a reasonable time, collect the goods at the supplier’s expense.

(4) The supplier must, in accordance with an election made by the consumer:

(a) refund:

(i) any money paid by the consumer for the goods; and

(ii) an amount that is equal to the value of any other consideration provided by the consumer for the goods; or

(b) replace the rejected goods with goods of the same type, and of similar value, if such goods are reasonably available to the supplier.

(5) The supplier cannot satisfy subsection (4)(a) by permitting the consumer to acquire goods from the supplier.

(6) If the property in the rejected goods had passed to the consumer before the rejection was notified, the property in those goods revests in the supplier on the notification of the rejection.

17. [17]
    Section 54 should be read bearing in mind the terms of s 260 and, in particular, that a "major failure" regarding acceptable quality will be made out "if the goods would not have been acquired by reasonable consumer fully acquainted with the nature and extent of the failure".
18. [18]
    As is evident from what I have said above, section 54 (2) of the ACL defines "acceptable quality" by reference to the "reasonable consumer" test and five specified criteria set out in sub-sections 54 (2) (a)-(e). These criteria are cumulative, as evidenced by the use of the conjunction "and". Thus, if for example, particular goods are fit for purpose, safe, free from defects and durable, but not acceptable in appearance and finish, the goods will still fail to be of acceptable quality. Section 54 (3) of the ACL identifies the matters relevant for the purposes of sub-section (2).
19. [19]
    Th member held that it may be accepted 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 and applied a statement in Cary Boyd v Agrison Pty Ltd [2014] VMC 23 at [51], 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.
20. [20]
    In summary then, the test of whether there is a major failure for the purposes of section 260 and the test for whether goods are of acceptable quality for the purposes of section 54 both adopt a ‘reasonable consumer’ test. If the failure can be remedied and is not a major failure, the consumer is limited to requiring the supplier to remedy the failure within a reasonable time; or if the supplier cannot remedy the failure within a reasonable time, having the failure remedied by someone other than the supplier and seeking compensation from the supplier, or rejecting the goods.

Findings below on the issue of the oil consumption

21. [21]
    On the issue of the oil consumption, which is the first foundation for this appeal, the Member held as follows:

Excessive oil consumption

[12] The primary applicant claims that he was advised prior to the purchase of the motor vehicle that ‘the Colorado RG vehicle is a brand new 2014 model and does not use oil, or very minimal if at all’. While I have some doubts about the self-serving nature of the primary applicant’s evidence in this regard, no evidence was provided by the respondent to contradict it. In these circumstances, I accept the applicants’ evidence that the representation was made.

[13] The primary applicant gave written evidence that:

(a) On 16 September 2017, when the engine oil dipstick was checked, no oil was present on the dipstick. The engine was refilled with 2.35 litres of oil.

(b) On 18 August 2018, when the engine oil dipstick was checked, again no oil was present on the dipstick. The engine was refilled with 1.6 litres of oil. The applicants were advised to change the oil from 5W-30 to 5W-40.

(c) On 27 August 2018, the oil was changed to 5W-40.

(d) On 28 February 2019, Bartons Motors Pty Ltd advised that the motor vehicle had used 600 ml of oil in a distance of 4,697 km.

(e) On 11 April 2019, Bartons Motors Pty Ltd advised that the motor vehicle had used 4.08 litres of oil per 10,000 km travelled.

[14] The respondent conceded that usage of 4.08 litres of oil per 10,000 km was above the acceptable limit of oil usage for the motor vehicle.

[15] The applicants provided an affidavit from John Moore of Redland Bay Garage dated 20 July 2020.

Mr Moore relevantly deposed:

(a) On 10 June 2019, Mr Moore discovered oil residue present in the intake hoses of the motor vehicle.

(b) On 6 January 2020, Mr Moore recorded oil usage of 2.286 litres per 10,000 km.

(c) Mr Moore regards an oil loss of 2.5 litres per 10,000 km, or 3.75 litres per 15,000 km, as a ‘major oil volume loss’, equating to 66% oil usage over a 15,000 km service period.

[16] The primary applicant provided evidence of complaints from other Colorado owners relating to oil consumption. These complaints do not relate to the motor vehicle the subject of these proceedings, and are of limited assistance.

[17] The primary applicant has also provided a copy of ‘Service Dealer Letter 84/15 – RG Colorado Engine’ dated 4 December 2015. The letter relevantly stated:

Investigation results “Investigations carried out have identified two potential contributors that may lead to a low oil level indication on the dipstick. Either of the conditions, or a combination of both, may lead to the belief that an engine is using excessive amounts of oil.

1. Perceived Oil Consumption

The current engine dipstick design does not provide best practice oil volume between the FULL and ADD indications. This design may result in the indicated oil level moving quickly towards the ADD mark, and in some instances not registering on the dipstick, even though the rate of oil consumption is typical of a diesel engine. This creates the perception of an oil consumption issue.

2. Actual Oil Consumption

Due to manufacturing variations, a small number of engines may have excessive cylinder bore roughness. This roughness allows excess oil to pass the piston rings and be consumed. To date these cases have been confined to model 2014 vehicles.

Typical Oil Consumption 

It is important to understand that all modern common rail diesel engines, regardless of manufacturer, do consume some oil. Typical usage may vary depending on engine design specifics, as well as vehicle usage such as vehicle load, speed and distance travelled.

For the Colorado 2.8 Litre Diesel engine any consumption of up to 2 litres of oil per 10,000 km’s [sic] travelled is typical consumption for this engine and no cause for concern.

[18] On 10 May 2019, Holden offered to replace the engine in the motor vehicle.

[19] On 25 May 2019, Holden advised:

We would not expect the new engine to use any more than 2.5 litres of oil per 10,000 kms driven. The engine is one of GM Holden’s modern low friction engines which is designed to minimise fuel consumption and maximise power delivery whilst minimising environment impact with exhaust gas emissions, therefore it is desirable for the engine to use some engine oil as this also promotes best engine life. However, should Mr Howarth suspect the oil consumption is increasing in the new engine we would advise him to present his Vehicle to a Holden dealer to have an oil consumption test completed and reviewed by Holden.

[20] Daniel Braggins-Davies gave written evidence on behalf of the respondent. Mr Davies provided an extract from information provided by Holden in document TL2617-1512: Changes to the cylinder bore machining process were introduced at the engine manufacturing plant in 2015. These changes ensure that the bore roughness is maintained within the correct specification, which will result in engine oil consumption rates consistent with MY13 Colorado vehicles, which did not exhibit this concern.

[21] At the hearing, I asked Mr Davies about Mr Moore’s evidence that a replacement engine would lose up to 66% of the between service cycles. Mr Davies stated that oil loss does not matter, as long as there is enough oil to satisfy the pick up. When I asked him whether 33% was enough to satisfy the pick up, he stated that it was.

[22] The primary applicant asked Mr Davies why the engine has a capacity for 5.7 litres of oil, if it can operate without damage on only two litres of oil. Mr Davis stated that the 5.7 litre capacity allows for the loss of oil between service cycles. If the engine only had a capacity for two litres of oil, it would run out of oil between service cycles. It is a characteristic of the design of diesel engines that they will consume oil.

[23] I accept that the motor vehicle consumes excessive oil, and that the cause of this was excessive cylinder bore roughness, having regard to service bulletins and letters issued by Holden. I accept that this defect was present at the time of supply.

22. [22]
    The member held that at the time the appellants purchased the vehicle, the respondent had not been advised by the head Company Holden that there were problems with excessive oil consumption with Colorados manufactured in 2014. That advice was not provided until 4 December 2015, well after the purchase of the applicants’ motor vehicle and well after any pre-purchase representations were made. 
23. [23]
    On the issue of the suspension failure which is 2nd the foundation for this appeal, the Member held that the applicants had claimed that the suspension on the vehicle had failed and had provided a tax invoice from Pedders Suspension dated 29 August 2018 for replacement of the suspension.
24. [24]
    The Member referred at [25] to the fact that the applicants had provided an email from Pedders Suspension dated 4 March 2019 which relevantly stated:

I can state here that I did inspect your vehicle and that I did find in my professional opinion that the suspension on your RG Colorado … was in a state that was no longer able to safely carry the maximum specified GVM load and that to make the vehicle capable of safely carrying and towing the loads you described, I recommended and installed a full GVM suspension upgrade. I make these comments based on extensive experience with these vehicles and the fact that the standard suspension on your Colorado has worn and sagged noticeably, especially in the left hand rear. I have found this to be a common problem usually caused by time and distance, and overloading or uneven loading. The GVM upgrades are a common necessity on vehicles the age of yours, but it should not be interpreted that the original suspension in new condition is not fit for purpose. I realise that this is not necessarily the backing you might desire but I can only comment on the facts we have.

25. [25]
    The Member held that “based on the applicants’ own evidence, I am not satisfied that the motor vehicle’s suspension was not of acceptable quality at the time of supply”.
26. [26]
    The Member held that a reasonable consumer fully acquainted with the state of the motor vehicle at the time of purchase, particularly having regard to: (a) the motor vehicle’s excessive oil consumption due to excessive cylinder bore roughness;  (b) the manufacturing defect relating to the right hand front drive shaft seal; (c) the defect in the software relating to the fuel pressure regulator valve; (d) the purchase price of $54,047.40; and  (e) the motor vehicle being brand new, would not regard the motor vehicle as free from defects and durable.
27. [27]
    As I have identified already, and as the member correctly identified in the reasons, under the ACL, the right to rescind and reject any good relies on whether or not the failure is considered ‘major’. I have set out above what s 260 of the ACL identifies as a major failure. Critically in this case that required consideration of whether goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure or 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  they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose
28. [28]
    On this issue the member held as follows:

[45] In considering whether there is a major failure, I note that I have accepted that there were three defects in existence at the time of supply. These defects have manifested themselves over a five year period. Dealing with each defect in turn: (a) The defect in the software relating to the fuel pressure regulator valve was remedied by a software upgrade. I consider this to be a minor repair.(b) The manufacturing defect relating to the right hand front drive shaft seal has also been remedied. I consider this to also be a minor repair. (c) The respondent proposes to remedy the motor vehicle’s excessive oil consumption by replacing the engine. The primary applicant, while disputing the effectiveness of this remedy, nevertheless described an engine replacement as a ‘quick and economic fix’ in his statement dated 19 July 2020.

[46] I note that the offer to replace the engine was promptly made on 10 May 2019, less than a month after the oil consumption test on 11 April 2019 returned a result above the acceptable limit of oil usage. The only reason why the engine replacement has not taken place is because the applicants have refused this remedy.

[47] The applicants maintain that an engine replacement would not fix the problem. However, the balance of evidence does not support their position. While I note that Mr Moore expresses concern in relation to an oil loss of 2.5 litres per 10,000 km, the evidence from Mr Davies on behalf of the respondent is that the engine can accommodate this oil loss without damage. The respondent also provided information from Holden that the changes in manufacturing processes will result in engine consumption rates consistent with 2013 Colorado vehicles which did not exhibit concerns relating to excessive oil consumption. I prefer the respondent’s evidence. It seems to me that Holden identified a manufacturing problem relating to some Colorado engines produced in 2014, and rectified the problem. The possibility that a replacement engine may consume excessive oil is at this point merely hypothetical in any event.

[48] The motor vehicle has suffered three defects over a five year period, two of which were readily remedied. The outstanding defect, relating to excessive oil consumption, can be remedied by what the primary applicant has described as a ‘quick and economic fix’. I place considerable weight on this characterisation by the primary applicant of an engine replacement. On balance, I am not satisfied that there is a major failure for the purposes of the test contained in s 260.

29. [29]
    In consequence the member ordered pursuant to s 259(2)(a) that the respondent replace the motor vehicle’s engine in the event that the applicants choose to make the motor vehicle available for this purpose. At the hearing of this appeal the Respondent made clear that it was still ready willing and able to replace the motor vehicle’s engine with a new engine.

The Grounds of Appeal

30. [30]
    The Appellants filed an application for leave to appeal on 15 December 2020. The grounds of appeal themselves ran to seven pages of detail. They were supported ultimately by submissions which were voluminous, and the submissions themselves ran to in excess of 60 pages.
31. [31]
    Neither party made submissions about the nature of this appeal, or what was required to be shown to succeed in it.
32. [32]
    Sadly, neither the grounds of appeal nor the submissions themselves focused themselves upon specific error that the Member is contended to have made in arriving at the conclusions that he reached. Fortunately, by the time the matters came before me in argument, the challenges came down to two relatively narrow propositions. The first is that the finding in relation to the engine oil consumption was erroneous, and in particular in identification that the replacement of the engine was an adequate outcome. Secondly, when one looked at the suspension failure issue which was described as the suspension having collapsed on the left hand side, the contention was that although the suspension was replaced at the owners’ cost, since it failed during the warranty period, it was not an acceptable quality of supply at the time of supply.
33. [33]
    Mr Howarth conceded that the other areas of complaint in the Grounds of Appeal and the written arguments that related to other alleged defects were now not pressed as having been improperly treated as they were in the Member’s Reasons.
34. [34]
    The appellants applied to be entitled to rely on some additional evidence not before the presiding member below. This comprised material that was in the nature of publications by the ACCC about the law as to consumer guarantees under the ACL. I have had regard to that material, however it is to be treated as material relevant to submissions on the law, not evidence per-se. Other evidence sought to be relied upon was a statement from a witness Sean Black. I deal with that evidence later in these reasons. Essentially however I reject the attempt to rely on it as it was reasonably available at the time of the hearing. Indeed a statement from him was before the tribunal member at the hearing, and the Appellants elected not to rely on his evidence at the hearing .
35. [35]
    An attempt was also made to rely on published material in a documentary hearsay form  from the Australian Transport Energy Emission Research which is a private international research company as well as from other research agencies. It is well established that evidence that could have been adduced at a trial, but was not, will only be received in an appeal where there are “special grounds” that support granting leave. Sofronoff P in Mackellar Mining Equipment Pty Ltd v Thornton [2019] QCA 77 at [60] (with whom Morrison JA and Boddice J agreed at [97]-[98]).  The hardship that a party might suffer by not being allowed to adduce the further evidence must be balanced against the “general evil of allowing judgments to be disturbed” which would prolong and extend litigation. Murphy v Stone-Wallwork (Charlton) Ltd [1969] 1 WLR 1023 at 1028 per Lord Pearce.
36. [36]
    There are no special grounds shown here. There will be “special grounds”, and such evidence may be admitted, if the new evidence could not have been obtained with reasonable diligence for use at the original hearing. If given, the new evidence would probably have had an important influence on the result of the case (although it need not be decisive). The new evidence must be  apparently credible. Pickering & Anor v McArthur [2010] QCA 341 at [22] per Chesterman JA; Jonathan v Mangera [2016] QCA 86; (2016) 75 MVR 143 at [12] per Morrison JA.
37. [37]
    Even had I allowed that further evidence to be relied upon, it would not have affected the result. It did not mean that the member would have arrived at a different conclusion had it been before him.
38. [38]
    In the grounds of appeal, in relation to the oil consumption issue, the Appellants pointed to the findings at paragraph 22 of the Reasons set out above concerning the fact that despite the fact that the engine had the capacity to take almost six litres of oil, it could operate on only two litres of oil and it was therefore not of particular significance to whether the vehicle met the warranted standard that it would lose significant oil between service cycles.
39. [39]
    The Appellants argued that this finding placed an “unwarranted emphasis” on the oral evidence and the statements by the Respondent’s witness, Mr Davies, “without any evidence to support his claims”. The contentions go on to point to various things said in the General Motors handbook about the requirements for oil maintenance levels to be maintained, that usage of 60% of the oil between services which it was said would be what would occur even with a new replacement engine, amounted to a major oil usage and that this was unacceptable. The argument pointed to the evidence of a Mr Black who described the use of 66% of oil between service intervals for a new replacement engine as a major oil loss.
40. [40]
    Complaint was also made about conclusions reached at paragraph 17 of the Reasons set out above that any consumption of oil of up to two litres per 10,000km travelled was typical consumption and no cause for concern. The Appellants contend that this conclusion is in conflict with oral evidence given by the Respondent’s own witness, Mr Davies. It was also argued that the owner’s handbook references published by General Motors Holden about the need for oil levels to be regularly checked to prevent damage to the engine was inconsistent with the evidence of Mr Davies. It was also argued that for other reasons, the Appellants’ witnesses were more experienced and their evidence ought to have been preferred to that of Mr Davies.
41. [41]
    Reference is also made by the appellants to the finding at paragraph 20 of the Reasons set out above concerning the circumstances by which changes  were introduced into the manufacturing process of these particular cars in 2015, after this particular vehicle was manufactured, which would mean that a replacement engine presently provided would not have the same bore roughness that was present in earlier models and this would result in engine oil consumption being lower, consistently with other cars made in the 2013 manufacturing year which removed the bore roughness feature which in turn meant that the oil consumption issue would no longer be a concern with later engines, including any now put into this vehicle.
42. [42]
    The Appellants argued that this meant that it was known by General Motors and the Respondent that new motors also had an inherent tendency to use oil excessively and had undertaken measures to combat the same defect.
43. [43]
    In support of this argument, the Appellants referred to what was said to be a letter of 18 March 2019 which was suggested contained a statement from General Motors that the new engine which might replace the present engine would also use up to 66% of oil between services, and that this was therefore unsatisfactory.
44. [44]
    When one goes to the letter that is referenced in this submission, it can be seen that it was a letter which had been sent by General Motors Holden Australia to the Office of Fair Trading. I was told during submissions that this was onforwarded to the Appellants, and in that regard therefore they had a copy by which to make reference. That letter provided that the oil consumption concern raised by the Appellants was brought to the attention of General Motors in August 2020 and at that time Mr Howarth told General Motors that he had advised that this had been first raised in September 2017, and gave then a history of having recorded oil levels on the vehicle when inspected in November 2018 January 2019 and February 2019. The letter asserted that “there are multiple factors that can affect oil consumption however with this particular make and model, an oil consumption concern will only be highlighted if the oil usage is in excess of 2.5 litres over 10,000km”. The letter contended that Mr Howarth had indicated in correspondence that the oil consumption was between 2.2 litres and 2.3 litres per 10,000 km which was within acceptable parameters. The letter contended that provided service intervals and oil levels were maintained, the engine oil would continue to operate as designed at those levels.
45. [45]
    Critically the letter of 18 March 2019 does not contain a statement from General Motors that the new engine which might replace the present engine would also use up to 66% of oil between services, and that this was unsatisfactory
46. [46]
    The Member appears to have preferred that evidence that provided service intervals and oil levels were maintained, the engine oil would continue to operate as designed at those levels, in conjunction with the oral evidence given by Mr Davies on that issue as well.
47. [47]
    The Reasons expressly reference the evidence of Mr John Moore of Redland Bay Garage and his reference to there being oil loss of 2.5 litres per 10,000 km as comprising a major oil volume loss equating to 66% of oil usage.
48. [48]
    The Member expressly raised this evidence with Mr Davies who gave oral evidence before the Tribunal below. This was in the context of a suggestion that even a replacement engine might lose up to 66% of oil in the period between services were carried out on the vehicle. This evidence was directed to the issue of whether even a replacement engine might provide an adequate remedy for the excessive oil consumption that the Member held was a characteristic which was present in this particular vehicle when it was sold.
49. [49]
    That issue was of course a relevant consideration to deciding whether it was a major failure, in circumstances in which the guarantee breach could be remedied by an order that the supplier remedy the failure within a reasonable time.
50. [50]
    I accept as correct the complaint made by the Appellants that the Member misconstrued in paragraph 45(c) of his Reasons the point being made by the Appellants in describing the provision of a replacement engine as a quick and economic fix. What was intended by that statement was that it was in effect a shortcut that would provide a quick and economic outcome for the dealer, but was not an appropriate outcome from the perspective of the vehicle owner. Notwithstanding that misunderstanding, it does not seem to me to ultimately matter whether the engine replacement amounts to a quick or economic fix or does not, because the test is whether the guarantee can be remedied, and remedied within a reasonable time. That error was also repeated in paragraph 48 of the Reasons in which the Member asserted that he placed considerable weight on that characterisation by the Appellant of the engine replacement. I accept that for the Member to have so concluded was erroneous, not only because that was not the obvious meaning of what was stated, but because ultimately what Mr Howarth thought about the nature of the defect, and whether to replace the engine amounted to a quick and economic fix ought carry little weight. Ultimately the decision to be made was to be made upon the basis of the objective evidence about whether, first, the engine could be replaced, and if it was replaced, whether it would result in there being an engine in this vehicle which did not exhibit excessive oil consumption as this particular vehicle had.
51. [51]
    The learned Member concluded on the evidence before him that when General Motors Holden identified the manufacturing problem with the engines produced in 2014, of which the Appellants’ vehicle was one, it then rectified the problem in later models. The Appellants contended that it may be that a replacement engine may also consume excessive oil. Their argument on that point was to merely point to an hypothetical possibility. To state it as an hypothetical might even be an overstatement because there seems to be no expert, or other reliable evidence that that has in fact occurred.
52. [52]
    There was some evidence before the Tribunal below that other owners of Holden vehicles, including Colorado vehicles, had complained at different times about engine oil consumption, however there was no clear or direct and certainly no reliable evidence that any of those persons had been supplied with a replacement engine post 2014 which continued to display the excessive oil consumption problem.
53. [53]
    In the course of cross-examination of Mr Davies before the member below, who also represented the Respondent in this Appeal, there was evidence elicited in responses by Mr Davies to specific questions by the male Appellant which were directly adverse to the arguments that the Appellants advance on this appeal.
54. [54]
    In response to questions from Mr Howarth before the member below, Mr Davies identified that although he had not performed work of an engineer in the development of diesel engines, he had had 13 years of experience as both a mechanic, service advisor, and manager in relation to Holden diesel engines, of which this particular engine is an example. He said that he had dealt with Holden Colorado’s losing engine oil and acknowledged that some of them do lose oil, inferentially in a way which is unsatisfactory. He said that he had been involved in the process of replacing these engines with the revised engines. As a service advisor, he dealt with customers in that process and that he had had not one Colorado returned after an engine replacement exhibiting the same oil loss fault.
55. [55]
    Mr Davies said that he had been involved in some 20 to 25 Colorado engine replacements in the Brisbane Metropolitan area. His organisation was the biggest supplier of Holden Colorado vehicles in Australia so he has had to deal with those vehicles over a long period. He had been involved in a Melbourne based Holden dealership.
56. [56]
    Mr Davies described the revised manufacturing process which commenced in late 2015. He referred to service bulletins that were issued in July 2016 and September 2017 which referred to oil issues associated with Holden Colorados. He explained the practice with General Motors Holden was that production dates and model years by description vary. So if a vehicle was built in September of 2015, it would be labelled the model 2016 vehicle so there could be a model 2016 vehicle actually produced in 2015 which might have been affected by the oil consumption issue.
57. [57]
    Mr Davies said that he had seen factory documentation which purported to validate, or apparently treat as acceptable, the use of 2.5 litres of oil for those engines used for 10,000 km of travel. He was not able to personally validate that information, but it was issued as part of General Motors Holden’s formal documentation. What he could say was that he had been actively involved in replacing the engines and dealing with customers after that fact and that after the replacements “none of them have come close to that” usage.
58. [58]
    In response to questions from the Member, Mr Davies acknowledged that 15,000 km was the service cycle on a Holden Colorado, and so therefore effectively a 2.5 litre per 10,000 km usage converted to 3.75 litres per 15,000 km, or one service cycle. He accepted that this effectively was a 66% loss of the volume of oil in the sump over that service cycle period. He explained that if they are losing that amount of oil it did not affect performance or longevity because the oil pickup is at the bottom of the sump container and if there was oil at the bottom, it would be picked up and it would not matter whether it was 2mm of oil over the oil pickup line or 5 litres over it; the characteristics and the function would be the same.
59. [59]
    In response to questions from the Member, Mr Davies rejected the proposition that if the car had only 33% of the possible volume of oil in the sump that this would cause any damage to the engine, and that there would be enough oil to satisfy the pickup.
60. [60]
    He was then further cross-examined about this by Mr Howarth. He asked a series of lengthy questions which disclosed he believed he had an understanding of the way in which diesel engines operated, and their necessary use of oil. He seemed to have an opinion based on advice he had been given, and internet searches and conversations with dealerships, that 1 litre oil loss was the appropriate level in a service period. He had to be reminded by the member that he should ask a question rather than make statements about what his understanding of the position was.
61. [61]
    Ultimately the witness Mr Davies explained that there was no point in putting 2 litres of oil in at the start of the service interval. You need to have an allowance at the commencement of the service period, so you don’t start with a mere 2 litres but start at 5.7 litres to allow for engine capacities and offroad vehicles. The sump isn’t always level and flush all the time, hence the extra oil. When it was put that it he was suggesting that the diesel engine could use 66% of its oil and continue to be used, the witness explained that this was a misconception, that the 66% figure was the maximum allowed by the Holden specification. He reiterated that engines that had been replaced with revised manufactured engines have not exhibited that characteristic, “not close”. He said he was perplexed as to how they had arrived at this point being made in the case.
62. [62]
    The witness was then excused after Mr Howarth reiterated that he did not consider that the argument had been substantiated and he was prevented from asking the same question again as to whether the witness could provide documents supported by factory engineers that validated his opinion.
63. [63]
    The only other witness to give oral evidence before the Member was Mr Howarth himself. Under cross-examination he made clear on numerous occasions that despite the offer by the dealership to replace the engine in the vehicle, he was not prepared to accede to that outcome because he had not been provided with documentation he had requested about the outcome in doing so, and what he claims was engineering evidence which provided a technical validation that the oil usage in the new engines would be satisfactory.
64. [64]
    Mr Howarth made clear in this evidence (Transcript pages 19 to 22) that he had not been persuaded that it was an acceptable outcome, and it would be fair to say that his submissions to this Appeals Tribunal reflected the same attitude, notwithstanding the evidence which was given by Mr Davies, and accepted by the Member as the foundation for his decision.
65. [65]
    Just as he also argued in this Tribunal, Mr Howarth also reiterated in his evidence below (Transcript, page 22), that the other matter that had “not been remedied” was the issue of the failed suspension. In relation to that, his evidence below was that the service manager for the Respondent company to whom Mr Howarth complained did not give his last name, and later found out was an employee of GM Holden, took the view that it looked like any other vehicle, and inferentially therefore had no suspension issue but that Mr Howarth found someone with 35 years’ experience in suspension matters and had it replaced because he said it was dangerous.
66. [66]
    The nub of Mr Howarth’s case, explained at Transcript page 23, is that General Motors Holden, and the Respondent, refused to provide him with information he had asked for to make “a satisfactory decision on this engine” and based on what his “experts” had been telling him, it was not a solution and that it had been proved time and time again and that there were “many other vehicles with the same problem” and that the Respondent, or General Motors, was concealing that reality from the Tribunal.
67. [67]
    The Member clearly did not accept that there had been such failure to provide information, particularly having regard to the evidence that was before the Tribunal, nor was there in any lack of information which would have permitted Mr Horwath to make a satisfactory decision on the issue, or for that matter for there to be anyone who was capable, including the Tribunal, of making an objective decision about whether the replacement of the engine was an appropriate solution.
68. [68]
    In the end, the Tribunal decided that there should be a replacement engine put into the vehicle, despite the fact that Mr Howarth insisted that it was his decision, and that he was not persuaded that it was a satisfactory outcome.
69. [69]
    One of the submissions made before me was that the Member refused an application by Mr Howarth to lead other evidence, or to have some witness called that would have supported his case. I invited Mr Howarth to identify where that exchange could be found. He could not identity it.
70. [70]
    My review of the transcript suggests that there was no such refusal. In support of his argument, he referenced the statement of Mr Sean Black which is included in the Appeal Book as Item G2. That is a statement dated 12 June 2021 and post dated the hearing. There is however a statement which is also in the Appeal Book as document G1 which was Mr Black’s earlier statement dated 8 November 2020, which was in fact before the Tribunal at the time of the hearing. The transcript shows that despite directions requiring the parties to file well before the hearing date any material they intended to rely upon at the hearing, that the Appellants did not file the 8 November 2020 statement of Mr Black until just before the hearing, and the Respondent contended that it had not been provided with the document prior to the hearing.
71. [71]
    During argument about what should happen with Mr Black’s statement dated 8 November 2020, the Respondent indicated at Transcript page 8 that even without having read that statement, the Respondent did not object to whatever Mr Howarth may wish to bring into evidence, and that if they presented evidence that was favourable to the Howarths then that was a matter for the Tribunal to judge the matter upon. The Member expressed the view that there were concerns when litigants provide evidence a few days before a hearing when there have been timetables and directions made but acknowledged that there was no objection to the receipt of the statement.
72. [72]
    At page 13 of the transcript, the Member indicated that the options included not admitting the statement because it was filed too late. After an adjournment to review the material the Respondent indicated that it was comfortable with whatever decision was made about whether the documents should be admitted into evidence. The Member ruled, after having read the statement, that it was very repetitive of material that was already before the Tribunal, that there was a rule that there by only one expert to be relied on bu each side on a given issue and therefore that the Appellants needed to choose which expert they wished to rely upon, Mr Black or Mr Moore. Mr Howarth then said that he elected to rely on the statement of Mr Moore and not that of Mr Black. The transcript makes clear that Mr Howarth elected which of the expert witnesses he sought to rely upon, and rejected the opportunity to rely upon that of Mr Black.
73. [73]
    In any event, having reviewed what was said in both the statement of Mr Black originally sought to be relied upon, and also the statement which post dates the hearing, it is apparent  that they contain at a very generalised level,  a reference to the function of engine oil within a diesel engine and why, in his view permitting only 2 litres of oil to be in the sump was not an acceptable volume and was detrimental to the continued health of the engine. The essential difficulty is that there was no evidence that only two litres of oil would be put in the sump, and that evidence did not go to any degree to contradict the evidence given by Mr Davies recited above as to the effectiveness of the engine even were the oil originally filled to a much higher level to deplete to 2 litres during a service period. Hence, even had I allowed that further evidence to be relied upon, it would not have affected the result.
74. [74]
    I have set out earlier in these Reasons the Member’s findings in relation to suspension failure, and in particular the findings at paragraph [25] of the Reasons. The extracted part of the expert opinion provided in an email from Pedders Suspension of 4 March 2019 made express reference to the fact that the suspension on the Colorado had worn and sagged noticeably particularly on the left hand rear and that this was a common problem usually caused by time and distance and overloading or uneven loading. The expressly referenced proposition that this did not mean that the original suspension of the vehicle was not fit for purpose.
75. [75]
    Therefore the only evidence before the Tribunal on this issue was consistent with the finding of the Member. The argument before me as to why a contrary conclusion ought be reached was simply to the effect that if it failed during the warranty period, then clearly it was not of an acceptable quality at the time of supply. In my view, that proposition does not follow from the proposition that a failure occurred during a warranty period. It may or may not be that the effect of that failure was to require a replacement under warranty.
76. [76]
    The express finding which the Tribunal made on this issue reflects the expert evidence which was before the Court which was that the sagging was a common problem usually caused by time and distance, overloading or uneven loading. In my view, the Member’s reasoning disclosed no error.
77. [77]
    In the grounds of appeal at paragraph 5.1, the Appellants expressly advanced a case that they were seeking reimbursement for the cost of rectifying the suspension that should have been rectified by the dealership under warranty and that the Member erred in failing to apply “correct weight” to the evidence that at the time of the failure of the suspension the vehicle was not fit for purpose.
78. [78]
    There is no evidence, and there was no evidence before the Tribunal below, that the mere fact that the suspension failed at a later time did not mean that the suspension was not of acceptable quality at the time of supply. The Member expressly made this finding at [52] of the Reasons and rejected the claim for damages for the cost of replacing the suspension in an amount of $3,790 on that basis.
79. [79]
    That is not the basis upon which the matter was argued before me. Rather the contention was that the suspension failure after the event was indicative of its failure to be of an acceptable quality at the time of supply. Clearly the Member was satisfied that the manner in which the vehicle had been used after supply was what had caused the relevant suspension failure, and that the statutory or other warranties concerning it did not apply.

Conclusions

80. [80]
    At the outset of these Reasons, I identified the grounds of appeal included challenges to the Member’s emphasis on the oral evidence before him and the evidence of Mr Davies, said to be given without evidence to support it.
81. [81]
    There is no substance to the Appellants’ contention that the Member gave unwarranted emphasis to the evidence which was given orally rather than to other documentary evidence, or on evidence which ought to have carried greater weight.
82. [82]
    The evidence which Mr Davies gave concerning the appropriateness of an engine replacement was not challenged in cross examination, or to the extent that it was challenged, his evidence was not undermined or discredited. It was not implausible or manifestly unreliable.
83. [83]
    It is well accepted that the duty of finding the facts in a case such as this is conferred upon the Member who heard the application, even though and because it stood in a hierarchical system that provided for appellate review.
84. [84]
    An appeal including by way of rehearing is a procedure that is concerned with the correction of error. These principles are of longstanding and may be found in numerous authorities including High Court authority in Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at [203-3], Warren v Coombes (1979) 142 CLR 531 at 538-539, Bert & Ors v Red 5 Ltd & Anor [2017] QCA 233, Fox v Percy (2003) 214 CLR 118.
85. [85]
    It was for the relevant Member to decide what weight to be given to particular considerations and the evidence which was before the Court. In my view there was no demonstrated error in the way in which the Member treated the evidence which was before him. Indeed, the conclusions that the Member reached on that evidence were entirely consistent with it, and the conclusions which the Member reached were compelling ones, having regard to the objective evidence which was before the Tribunal.
86. [86]
    I therefore dismiss the appeal.