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  4. Hinterland Express Pty Ltd v Inchcape European Automotive Pty Ltd - [2023] QCATA 130

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Hinterland Express Pty Ltd v Inchcape European Automotive Pty Ltd[2023] QCATA 130

Hinterland Express Pty Ltd v Inchcape European Automotive Pty Ltd[2023] QCATA 130

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Hinterland Express Pty Ltd v Inchcape European Automotive Pty Ltd & Anor [2023] QCATA 130

PARTIES:

Hinterland Express Pty Ltd

(applicant/appellant)

v

Inchcape European Automotive Pty Ltd

(first respondent)

LAKES HYUNDAI PTY LTD TRADING AS GRAND PRIX PEUGEOT

(second respondent)

APPLICATION NO/S:

APL074-22

ORIGINATING APPLICATION NO/S:

MVL033-21

MATTER TYPE:

Appeals

DELIVERED ON:

12 October 2023

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Member Cranwell

ORDERS:

Leave to appeal is refused.

CATCHWORDS:

TRADE AND COMMERCE – CONSUMER PROTECTION – GUARANTEES, CONDITIONS AND WARRANTIES IN CONSUMER TRANSACTIONS – where applicant purchased a motor vehicle from the second respondent – where the first respondent the deemed manufacturer – where the applicant claimed there were defects with the motor vehicle including in relation to the sliding door – where at first instance the learned member found the defects did not constitute a major failure – where the learned member found the applicant was not entitled to reject the motor vehicle – whether the learned member erred in dismissing the application

Australian Consumer Law, s 7, s 54, s 55, s 259, s 260, s 262, s 263, s 303

Competition and Consumer Act 2010 (Cth), Schedule 2

Fair Trading Act 1994 (Qld), s 50A

Motor Dealers and Chattel Auctioneers Act 2014 (Qld), Schedule 1, s 3, s 3A, s 4, s 6, s 9, s 12, Schedule 3

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 142, s 147

Treasury Laws Amendment (2020 Measures No. 6) Act 2020 (Cth)

Cary Boyd v Agrison Pty Ltd [2014] VMC 23

Fawkes v ZS Motor Group Pty Ltd [2021] QCAT 150

Medtel Pty Ltd v Courtney (2003) 130 FCR 182

Morphy v Beaufort Townsville Pty Ltd [2018] VCAT 1520

Nesbit v Porter [2000] 2 NZLR 465

Saxer v Hume [2022] QCATA 25

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

APPEARANCES & REPRESENTATION:

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

  1. [1]
    Hinterland Express Pty Ltd (‘the applicant’) purchased a 2019 Peugeot Partner (‘the motor vehicle’) from Lakes Hyundai Pty Ltd trading as Grand Prix Peugeot (‘the second respondent’).  The motor vehicle was imported by Inchcape European Automotive Pty Ltd (‘the first respondent’).
  2. [2]
    After taking delivery of the motor vehicle, the applicant sought to reject the motor vehicle.  The applicant subsequently lodged an application for a motor vehicle dispute in the Tribunal, seeking relief under:
    1. the Fair Trading Act 1994 (Qld); and
    2. the Motor Dealers and Chattel Auctioneers Act 2014 (Qld) (‘MDCA Act’).
  3. [3]
    Section 50A of the Fair Trading Act 1989 (Qld) vests the Tribunal with jurisdiction in relation to motor vehicles in respect of certain actions under the Australian Consumer Law (‘ACL’), which is Schedule 2 to the Competition and Consumer Act 2010 (Cth). 
  4. [4]
    The relief sought by the applicant was:
    1. a refund of the purchase price of $31,240;
    2. reimbursement of the cost of improvements on the motor vehicle of $990; and
    3. damages relating to increased labour costs and use of alternative vehicles of $10,750.81.
  5. [5]
    The Tribunal dismissed the application.  The applicant has appealed the Tribunal’s decision.

Statutory framework

  1. [6]
    In general terms, there are three tests that must be satisfied in order for a consumer to be entitled to a refund on a motor vehicle under the ACL:
    1. there has been a failure to comply with a consumer guarantee;
    2. the failure to comply with the guarantee is a ‘major failure’; and
    3. the consumer has not lost the entitlement to reject the motor vehicle.
  2. [7]
    For convenience, I will set out the relevant statutory provisions in relation to these tests before considering their application in the context of the grounds of appeal in the present case.

Consumer guarantees

  1. [8]
    Relevant to this case, the consumer guarantees contained in the ACL include the guarantee of acceptable quality and the guarantee of fitness for a disclosed purpose.

Acceptable quality

  1. [9]
    Section 54(1) of the ACL provides that, where a person supplies goods in trade or commerce, the goods are guaranteed to be of ‘acceptable quality’.
  2. [10]
    The time at which goods are to be of acceptable quality is the time at which the goods are supplied to the consumer: Medtel Pty Ltd v Courtney (2003) 130 FCR 182 at [64] and [70].  However, information available after the time of supply may be taken into account in deciding whether the goods were of acceptable quality at the time of supply.
  3. [11]
    Sections 54(2) and (3) of the ACL define acceptable quality as follows:
  1. 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
  1. (b)
    acceptable in appearance and finish; and
  1. (c)
    free from defects; and
  1. (d)
    safe; and
  1. (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. The matters for the purposes of subsection (2) are:
  1. (a)
    the nature of the goods; and
  1. (b)
    the price of the goods (if relevant); and
  1. (c)
    any statements made about the goods on any packaging or label on the goods; and
  1. (d)
    any representation made about the goods by the supplier or manufacturer of the goods; and
  1. (e)
    any other relevant circumstances relating to the supply of the goods.

Fitness for a disclosed purpose

  1. [12]
    Section 55(1) of the ACL provides that, where a person supplies goods in trade or commerce, there is a guarantee that the goods will be ‘reasonably fit for any disclosed purpose, and for any purpose for which the supplier represents that they are reasonably fit’.
  2. [13]
    Section 55(2) of the ACL defines ‘disclosed purpose’ as follows:
  1. 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. the consumer makes known, expressly or by implication, to:
  1. the supplier; or
  1. a person by whom any prior negotiations or arrangements in relation to the acquisition of the goods were conducted or made; or
  1. 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. [14]
    Section 55(3) of the ACL provides that the guarantee does not apply if 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).

Major failure

  1. [15]
    The availability of a refund as a remedy depends on whether a failure to comply with a consumer guarantee is a ‘major failure’.  That term is defined in s 260 of the ACL to relevantly mean:
  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
  1. (b)
    the goods depart in one or more significant respects:
  1. (i)
    if they were supplied by description—from that description; or
  1. (ii)
    if they were supplied by reference to a sample or demonstration model—from that sample or demonstration model; or
  1. (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
  1. (d)
    the goods are unfit for a disclosed purpose that was made known to:
  1. (i)
    the supplier of the goods; or
  1. (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. [16]
    It has been held that an accumulation of individually minor defects can be aggregated to amount to a major failure giving rise to a right to reject the goods.  In Cary Boyd v Agrison Pty Ltd [2014] VMC 23 at [51], the Court stated that:

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

  1. [17]
    While not applicable in the present case, I note in passing that this position is now reflected in amendments to section 260 made by Treasury Laws Amendment (2020 Measures No. 6) Act 2020 (Cth).  Pursuant to s 303 of the ACL, these amendments apply in relation to goods supplied under a contract entered into on or after 1 July 2021.

Loss of entitlement to reject

  1. [18]
    Section 262 of the ACL provides that the consumer is not entitled to reject the goods in certain circumstances:
  1. A consumer is not entitled, under section 259, to notify a supplier of goods that the consumer rejects the goods if:
  1. (a)
    the rejection period for the goods has ended; or
  1. (b)
    the goods have been lost, destroyed or disposed of by the consumer; or
  1. (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
  1. (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.
  1. 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:
  1. (a)
    the type of goods; and
  1. (b)
    the use to which a consumer is likely to put them; and
  1. (c)
    the length of time for which it is reasonable for them to be used; and
  1. (d)
    the amount of use to which it is reasonable for them to be put before such a failure becomes apparent.

Proceedings at first instance

  1. [19]
    The applicant provided the Tribunal with statements of evidence from its employees Brad Patten, Timothy Perry and Jason Slater.  Their evidence may be summarised in chronological order as follows:
    1. On 3 November 2020, the applicant contacted the second respondent to discuss the purchase of the motor vehicle.  He indicated that it was going to be used for a rural postal service.
    2. On 6 November 2020, the applicant entered into a contract with the second respondent for the purchase of the motor vehicle.  The purchase price was $31,240.
    3. On 9 November 2020, the applicant took delivery of the motor vehicle.
    4. After taking delivery of the motor vehicle, the applicant removed the cargo barrier and arranged for the installation of two additional windows.
    5. On 30 November 2020, the applicant’s employee noticed that:
      1. the motor vehicle’s side door no longer opened;
      2. dust was entering through the floor; and
      3. there was a knocking sound coming from the front.
    6. Being able to only access the cargo area through the rear doors, and not through the sliding side door, restricted access to parcels located towards the front of the cargo area.
    7. On 1 December 2020, the applicant contacted the second respondent in relation to these issues.  An inspection was arranged on 9 December 2020.
    8. On 9 December 2020, the second respondent inspected the motor vehicle.  The applicant was advised:
      1. the side door had been fixed;
      2. the dust issue would require a two day appointment for the second respondent to lift the floor out of the motor vehicle and reseal it; and
      3. the knocking issue was due to use of the incorrect type of link pins.  New pins needed to be installed, but were not in stock.
    9. On 10 December 2020, the sliding door failed again and seized shut.  The applicant complained to the second respondent.
    10. On 15 and 16 December 2020, the motor vehicle was left with the second respondent.  The applicant was advised:
      1. a temporary solution had been applied to the sliding door.  A new part was needed, which was estimated to arrive in three months;
      2. the dust was due to damage to the rear of the motor vehicle when the applicant ‘dinged’ one of the doors; and
      3. the link pin had been repaired successfully.
    11. On 17 December 2020, the sliding door failed for a third time.  The applicant told the second respondent he was unable to wait three months for a replacement part, and wanted a refund.  He stated that the motor vehicle was not fit for purpose with ‘the most fundamental door’ being out of operation.  The second respondent advised that they could not authorise a refund.  The applicant subsequently wrote to the first respondent seeking a refund.  This request for a refund was also refused.
    12. On 29 December 2020, the first respondent advised the applicant that the parts for repair would be delivered in early January.
    13. On 14 January 2021, the applicant was advised that the part had been ‘received today’ and dispatched for delivery to A Cullen & Son, an authorised Peugeot dealer.
    14. On 18 January 2021, the applicant was advised that A Cullen & Son had received the part.
    15. On 19 January 2021, the sliding door was repaired by A Cullen & Son.  The applicant was advised that the dust ingress issue was beyond the scope of works on that occasion.  The applicant made another appointment on 2 February 2021 to investigate the dust issue.
    16. On 2 February 2021, the applicant took the motor vehicle to A Cullen & Sons, who cleaned the motor vehicle.  They also reinstated the cargo barrier.
    17. On 15 February 2021, the applicant commenced proceedings in the Tribunal against the first respondent.
    18. On 17 March 2021, the second respondent was joined to the proceedings.
  2. [20]
    The applicant also provided an expert statement from Bill Bancroft of Cooroy Automotive Services.  Mr Bancroft opined that:
    1. the damage to the rear door was insignificant, and in no way contributed to dust entering the motor vehicle;
    2. the motor vehicle does not appear to be suitable for a mail delivery service in regional as opposed to city areas;
    3. the fuel flap mechanism is poor designed, which impacts on the sliding door operation.
  3. [21]
    The respondents provided a number of statements.  These included a statement from Dale Russell, who was the salesperson who dealt with the applicant.  Mr Russell stated that:

Bradley Patten called with a phone enquiry on Tuesday 3rd November 2020 which I took.  He quoted a demo Peugeot Partner van we had listed on our website that he wanted quickly for an Australia post contract on the Sunshine Coast.  There was no mention of driving on dirt roads.

  1. [22]
    The respondents’ position was set out in a statement from Daniel Morris as follows:
    1. Significant modifications were made to the motor vehicle by the applicant, including:
      1. cutting the interior and exterior shell of the motor vehicle to install side windows; and
      2. cutting and physical removal of a large portion of the bulkhead.
    2. These modifications may vary the airflow and sealing of the motor vehicle.
    3. The knocking sound was repaired on 15 December 2020. 
    4. The sliding door was repaired on 19 January 2021.  Parts were airfreighted by DHL, but delays in air freight were beyond the respondents’ control in the context of the pandemic.

Findings by the learned member

  1. [23]
    The learned member found that the defects did not constitute a major failure for the purposes of section 260 of the ACL.  He stated:

In determining whether there has been a major failure in terms of section 260 of the ACL, a relevant factor here is whether the vehicle was substantially unfit for a purpose for which vehicles of the same kind are commonly supplied.  This was a light commercial vehicle, consistent continual usage on dirt roads, ie, off-road as opposed to bitumen, which brings forth wear and tear issues more quickly unless the vehicle is specifically designed to weather rougher use.

The first two issues identified by Hinterland, the knocking sound and the sliding door, were attended to within a reasonable time.  The third issue, it is not clear wo what extent it is ongoing, but certainly, after cleaning by Cullens, it appears the vehicle was never returned to that entity or to Grand Prix.

…

It has been held that an accumulation of individually minor defects can be aggregated to amount to a major failure giving rise to a right to reject the vehicle.  Once again, here, of three defects, the first two were attended to within reasonable time.  The third, dust entry, there was no conclusive evidence of continuity consequent on Cullen’s clean and reinstatment of the bar – of the cargo barrier other than some dust accumulation discerned over three months …  There is insufficient evidence to support a finding of major failure based solely on the dust issue.

  1. [24]
    The learned member appears not to have accepted that the purpose for which the motor vehicle was to be used was disclosed to the second respondent.  He stated:

It was asserted that the purpose of the purchase, ie, Hinterlands mail run, was made known at the time of purchase, but that was denied by Grand Prix.

  1. [25]
    The learned member also did not accept that the applicant rejected the motor vehicle within the rejection period for the purposes of section 262(2) of the ACL.  He stated:

Nor can it be said Hinterland rejected the vehicle within the rejection period in accordance with section 262(2) of the ACL.  That is, the time within which it would be reasonable to expect failure to comply with the guarantee to become apparent here, acceptable quality and fit for purpose, the first two issues were addressed within a reasonable timeframe.  The third issue, dust entry, was referred to an independent Peugeot dealer, A Cullen & Son, which leaned the vehicle at Peugeot Australia’s expense.  There has never been any reattendance on this issue at either Grand Prix of Cullens. Rather, Hinterland applied to the tribunal for a refund on 29 March 2021.

  1. [26]
    Finally, the learned member made findings in relation to the modification of the motor vehicle.  He stated:

[T]here is the modification of the vehicle, that is, the dismantling of the cargo barrier, and, more importantly, by installation of two windows in the vehicle in the body constitute the vehicle as not the same vehicle for the purchase of any refund.  Even in the context of asserted rejection in December 2020, Hinterland had no right to then modify the vehicle, even if it considered the modification an improvement.  The ACL’s rights and obligations imposed on suppliers and consumers is premised on dealing with one and the same product, not a product that’s been modified or change (sic) by one party to the detriment of the other party.

  1. [27]
    The learned found that the applicant was not entitled to a refund, and that it was therefore unnecessary to address the claim for damages.

Grounds of appeal

  1. [28]
    The grounds of appeal were set out in the application for leave to appeal or appeal as follows:
  1. (1)
    Application of Law: Statutory Warranty states that the Respondent had 14 days to fix the vehicle. [The learned member] recognised that it took the Respondent over 30 days to fix the vehicle but erroneously suggested this timeframe was ‘reasonable’.  The Law states that the vehicle should have been fixed – and if not – it could be returned.
  1. (2)
    Application of Law: [The learned member] states that since the vehicle was different in state from the original purchase that the vehicle could not be returned.  ACL states that the vehicle does not have to be in brand new state, rather, it must NOT be of ‘unacceptable quality’.  The vehicle is Road Worthy and has windows fitted by professional installers that are covered by their warranty.  The cargo barrier was remonstrated to be removeable via brochures, product offerings, and engineering in the initial application.
  1. (3)
    Application of Fact: Both parties agreed that dust ingress was occurring due to removal of the cargo barrier.
  1. [29]
    Despite the applicant’s characterisation of the first two grounds as ‘Application of Law’, the grounds raise mixed questions of law and fact.  In my view, a more straightforward characterisation of these grounds is as follows:
    1. the learned member erred in finding that the defects did not constitute a major failure for the purposes of section 260 of the ACL; and
    2. the learned member erred in finding that the applicant was not entitled to reject the motor vehicle for the purposes of section 262 of the ACL.
  2. [30]
    The third ground of appeal possibly raises a question of fact.
  3. [31]
    Section 142(3)(b) of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’) provides that an appeal on a question of fact or mixed law and fact may only be made with the leave of the Appeal Tribunal.
  4. [32]
    Section 147 of the QCAT Act in turn provides that if an appeal is against a decision on a question of fact only or a question of mixed law and fact, and leave to appeal is granted, the appeal must be decided by way of rehearing with or without the hearing of additional evidence as decided by the Appeal Tribunal.  In deciding the appeal, the Appeal Tribunal may confirm or amend the decision, set aside the decision and substitute its own decision or set aside the decision and return the matter to the tribunal for reconsideration.
  5. [33]
    The relevant principles to be applied in determining whether to grant leave to appeal are (see Saxer v Hume [2022] QCATA 25 at [2]):
    1. whether there is a reasonably arguable case of error in the primary decision;
    2. whether there is a reasonable prospect that the appellant will obtain substantive relief;
    3. whether leave is needed to correct a substantial injustice caused by some error; and
    4. whether there is a question of general importance upon which further argument, and a decision of the Appeal Tribunal, would be to the public advantage.

Fresh evidence

  1. [34]
    For completeness, I note that the applicant has filed documentary evidence which was not before the Tribunal at first instance.
  2. [35]
    On 23 May 2022, the Appeal Tribunal directed that:

If either party seeks leave to rely upon evidence or a document that was not before the Tribunal below (‘fresh evidence’), they shall file in the Tribunal one (1) copy and serve on the other party one (1) copy of an application for leave to rely upon fresh evidence, together with a copy of the fresh evidence.  The application shall include submissions about:

  1. i.
    why the fresh evidence was not available to the Tribunal below;
  1. ii.
    why the fresh evidence is important; and
  1. iii.
    why the fresh evidence should be accepted.
  1. [36]
    The applicant did not file an application for leave to rely upon fresh evidence, nor did it file submissions addressing the issues raised in the directions.
  2. [37]
    In circumstances where the applicant has been directed by the Tribunal to file an application and submissions, but has not done so, I am unable to consider the fresh evidence filed by the applicant.

Consideration

Ground One: the learned member erred in finding that the defects did not constitute a major failure for the purposes of section 260 of the ACL

  1. [38]
    As noted above, the definition of major failure in section 260 of the ACL is predicated on the existence of a failure or one or more consumer guarantees.
  2. [39]
    The learned member did not expressly address the guarantees in either section 54 or section 55 of the ACL, as set out above.  This is unfortunate.  It is only by formulating the failure of the guarantee that consideration can then be properly given to whether that failure is a major failure.
  3. [40]
    I am prepared to infer from the fact that the learned member considered whether there was a major failure that he must have been satisfied of the existence of a failure of a guarantee.  By accepting the existence of defects at least in relation to the side door and link pins, I can only infer that the learned member was satisfied that there was a failure in the guarantee of acceptable quality for the purposes of section 54.  Such a finding was reasonably open to the learned member.  A reasonable consumer fully acquainted with the state of the motor vehicle at the time of supply, particularly having regard to:
    1. the purchase price of $31,240;
    2. the repeated failure of the side door; and
    3. the installation of the incorrect link pins, would not regard the motor vehicle as free from defects and durable.
  1. [41]
    The learned member’s consideration of the guarantee of fitness for a disclosed purpose for the purposes of section 55, brief as it was, appears to have been limited to the following passage quoted above:

It was asserted that the purpose of the purchase, ie, Hinterlands mail run, was made known at the time of purchase, but that was denied by Grand Prix.

  1. [42]
    This statement is not supported by the evidence.  Mr Russell’s evidence was that Mr Patten expressed interest in the motor vehicle ‘for an Australia post contract on the Sunshine Coast.  There was no mention of driving on dirt roads.’  Accordingly, there is no dispute that the applicant disclosed the intended use of the motor vehicle as being for the operation of a rural postal service.  At best, the only evidentiary conflict was whether the applicant disclosed that the motor vehicle was to be used on dirt roads.
  2. [43]
    It is not clear to me that the learned member went so far as to make a finding on whether the applicant disclosed that the motor vehicle was to be used on dirt roads.  A finding in relation to the use of the motor vehicle on dirt roads may have been relevant to the applicant’s complaint about dust ingress.  However, even without such a finding, it appears to me that the motor vehicle was unfit for the disclosed purpose which was not in dispute, namely use in operating a rural postal service.
  3. [44]
    I take judicial notice of the fact that parcel delivery involves loading the parcels into the motor vehicle, and then unloading of individual items from the motor vehicle at the addresses for delivery.  Loading and unloading must necessarily take place through the doors of the motor vehicle.
  4. [45]
    The Second Explanatory Memorandum to the Trade Practices Amendment (ACL) Bill (No 2) 2010 (Cth) stated that ‘[t]his guarantee will ordinarily require a higher standard of quality than the guarantee of acceptable quality’. The Second Explanatory Memorandum provided the following example:

A lawnmower that is sold to a consumer who does not mention the purpose for which it is to be used might be expected to mow the lawn of an ordinary suburban house once per week for several years without any significant problem to satisfy the guarantee of acceptable quality.  If a consumer indicates to a supplier that he or she wants a lawnmower to mow a 4 hectare block of land each week, the standard that the lawnmower would need to meet to be fit for that disclosed purpose would be higher than that required by the guarantee of acceptable quality for a domestic lawnmower.

  1. [46]
    In my view, the defect with the side door of the motor vehicle, which impeded the loading and unloading of parcels, means that the motor vehicle was not fit for the disclosed purpose of operating a rural postal service.  This issue does not appear to have been considered by the learned member.
  2. [47]
    Turning to the issue of whether there was a major failure for the purposes of section 260 of the ACL, the learned member framed his findings in terms of the language of section 260(1)(c).  That is, whether the motor vehicle was ‘substantially unfit for a purpose for which goods of the same kind are commonly supplied’.  This finding was reasonably open to the learned member, and I note that I made a similar finding in Fawkes v ZS Motor Group Pty Ltd [2021] QCAT 150.
  3. [48]
    However, the paragraphs in section 260(1) are expressed as alternatives.  As the Court observed in Cary Boyd v Agrison Pty Ltd [2014] VMC 23 at [50]: 

[O]n a proper construction of s 260 of the ALC, that the use of the conjunction ‘or’ after each subparagraph (a), (b), (c) and (d) has the effect that to amount to a major failure only one of the sub-paragraphs need qualify and that s 260 does not require a consumer to prove each sub-paragraph in order to satisfy the Court that there has been a major failure.

  1. [49]
    In my view, the learned member erred by not also considering section 260(1)(d). 
  2. [50]
    Section 260(1)(d), as set out above, provides that a major failure occurs if goods are unfit for a disclosed purpose and ‘they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose’.  The disclosed purpose was the operation of a rural postal service, and the reason the motor vehicle was unfit for this purpose was the defect with the side door.  The issue that falls for consideration is whether this defect could be remedied easily and within a reasonable time.
  3. [51]
    The date that the applicant rejected the motor vehicle was 17 December 2020.  As at that date, the applicant was advised that it would take three months for a replacement part to repair the door.  Ultimately, the sliding door was repaired on 19 January 2021, which was one month and two days later.
  4. [52]
    In my view, the time at which a major failure is to be assessed is at the time the goods are rejected.  In deciding to reject the goods, the consumer necessarily does not and cannot have the benefit of knowledge of events which have yet to occur.  Accordingly, the applicant was entitled to act on the advice that it would take three months to repair the sliding door and to reject the motor vehicle.  A three month period is not a reasonable period within which to remedy the sliding door given the disclosed purpose of operating a rural postal service.
  5. [53]
    Even if I am incorrect in this view, I nevertheless consider one month and two day period, being the time actually taken to effect repairs, is also not a reasonable period within which to remedy the sliding door given the disclosed purpose of operating a rural postal service.  This period must also be considered in the context that the sliding door had not worked since 30 November 2020, apart from periods of less than a day following each of the two previous repair attempts.
  6. [54]
    For the reasons set out above, the failure to comply with the guarantee in section 55 of the ACL was a major failure for the purposes of section 260(1)(d).
  7. [55]
    The first ground of appeal is made out.

Ground Two: the learned member erred in finding that the applicant was not entitled to reject the motor vehicle for the purposes of section 262 of the ACL

  1. [56]
    The learned member made a number of findings in relation to 262 of the ACL.

Rejection period

  1. [57]
    For the purposes of section 262(1)(a), the learned member found that the applicant had not rejected the motor vehicle until after the rejection period had ended.  The rejection period is defined in section 262(2), as set out above. 
  2. [58]
    In Nesbit v Porter [2000] 2 NZLR 465 at [39], the New Zealand Court of Appeal held that the rejection period was one that:

suffices to enable the consumer to become fully acquainted with the nature of the defect, which, where the cause of breakage or malfunction is not apparent, the consumer can be expected to do by taking the goods to someone, usually or preferably the supplier, for inspection.  In this context, therefore, a defect is not ‘apparent’ until its cause has been identified and the buyer knows what has to be done to fix it, and that that will cost; in other words, until the buyer is in a position to determine whether the defect is substantial.

  1. [59]
    In Morphy v Beaufort Townsville Pty Ltd [2018] VCAT 1520 at [86], the Victorian Civil and Administrative Tribunal held that, while the rejection period did not necessarily correlate with the manufacturer’s warranty period, the warranty period was relevant in considering whether the rejection period had expired:

[A]t the time of the rejection, the motor car remained under a three year/100,000 kilometre manufacturer’s warranty. In determining if the rejection period has ended, the Tribunal is not bound by the warranty period given by an express manufacturer’s warranty. Nevertheless, the express warranty period is relevant evidence of the expected period of largely problem-free use of goods. In this case, all the failures have occurred shortly within the manufacturer’s warranty period and the rejection was made well before the expiration of that period.

  1. [60]
    In reaching his conclusion that the applicant had not rejected the motor vehicle until after the rejection period had ended, the learned member appears to have conflated the rejection of the motor vehicle with the commencement of proceedings in the Tribunal.  The applicant had rejected the motor vehicle and sought a refund from the second respondent prior to commencing proceedings.
  1. [61]
    The applicant took delivery of the motor vehicle on 9 November 2020.  The problems with the motor vehicle first manifested themselves on 30 November 2020.  The second respondent unsuccessfully attempted to repair the sliding door on two occasions, on 9 December 2020 and again on 15 and 16 December 2020.  The applicant rejected the motor vehicle on 17 December 2020.
  2. [62]
    In my view, the applicant could not have acted any more promptly in rejecting the motor vehicle.  The applicant was not in a position to determine the nature of the defect and the time taken to remedy it until 17 December 2020, when the sliding door failed for a third time.  It follows that there is no basis for finding that the motor vehicle was rejected after the rejection period had ended.
  3. [63]
    There are two further observations I would make in relation to the applicant’s rejection of the motor vehicle.  They arise out of the provisions of section 263 of the ACL, which relevantly provides:
  1. This section applies if, under section 259, a consumer notifies a supplier of goods that the consumer rejects the goods.
  1. The consumer must return the goods to the supplier unless:
  1. the goods have already been returned to, or retrieved by, the supplier; or
  1. the goods cannot be returned, removed or transported without significant cost to the consumer because of:
  1. the nature of the failure to comply with the guarantee to which the rejection relates; or
  1. the size or height, or method of attachment, of the goods.
  1. If subsection (2)(b) applies, the supplier must, within a reasonable time, collect the goods at the supplier’s expense.
  1. The supplier must, in accordance with an election made by the consumer:
  1. refund:
  1. any money paid by the consumer for the goods; and
  1. an amount that is equal to the value of any other consideration provided by the consumer for the goods; or
  1. replace the rejected goods with goods of the same type, and of similar value, if such goods are reasonably available to the supplier.
  1. [64]
    Firstly, the consumer is required to notify the supplier of the rejection of the goods.  In the present case, the applicant was required to notify the second respondent.  The applicant’s evidence, which is uncontested, is that he did this orally on 17 December 2020.  This was sufficient to satisfy the requirements of section 263(1).  It is irrelevant that the applicant also wrote to the first respondent purporting to reject the motor vehicle on the same date, as the first respondent is deemed to be the manufacturer and is not the supplier: see section 7(1)(e) of the ACL.
  2. [65]
    Secondly, the consumer is required to return the goods to the supplier.  The exceptions contained in section 263(2) are not relevant in the present case.  The applicant has at all times expressed a willingness to return the motor vehicle to the second respondent in exchange for a refund.  However, the second respondent has refused to accept the applicant’s rejection of the motor vehicle. 
  3. [66]
    In my view, it would be unreasonable to expect the applicant to return the motor vehicle to the second respondent, in circumstances where the second respondent had communicated to the applicant that it refused to accept the rejection of the motor vehicle.  That would be to leave both the motor vehicle and the purchase price in the hands of the second respondent.
  4. [67]
    Section 263(2) is silent as to when the consumer must return the goods, but it can be inferred from the exception in section 263(2)(a) that the goods may be returned after the consumer has notified the supplier of the rejection of the goods.  In my view, the requirement to return the motor vehicle can be given effect to by the Tribunal so ordering, prior to the payment of any refund. 

Modification of the motor vehicle

  1. [68]
    The learned member found that the applicant could not return the motor vehicle because it had been modified.  In particular, he referred to the installation of two windows in the motor vehicle and the dismantling of the cargo barrier.  I note that the evidence indicates that the cargo barrier had been reinstated by A Cullen & Son, which leaves only the installation of the two windows in issue.
  2. [69]
    While the learned member did not refer to any provisions of the ACL in support of his finding, I will consider his finding in light of section 262(1)(c) and section 262(1)(d).
  3. [70]
    Section 262(1)(c) provides that the consumer is not entitled to reject goods that have been damaged for reasons not related to their state or condition at the time of supply.  The Macquarie Dictionary defines the word ‘damage’ to mean ‘injury or harm that impairs value or usefulness’.  I am unable to regard the professional installation of windows to the motor vehicle as damage within the ordinary meaning of that word.
  4. [71]
    For completion, I note that no issue has been taken with the applicant’s ‘ding’ to the rear door in terms of damage to the motor vehicle.  This was described by Mr Bancroft as ‘insignificant’.
  5. [72]
    Section 262(1)(d) relates to the separation of the goods from other goods ‘without damaging’ the goods supplied.  In Vautin v BY Winddown, Inc (formerly Bertram Yatchs) (No 4) [2018] FCA 426 at [278], Justice Derrington stated that:

[I]t is for a respondent who asserts that the consumer is not entitled to reject the goods to plead and prove the facts in one or more of s 262(1)(a) to (d). It does not appear that it is an essential element of the consumer’s cause of action under the ACL to negate the existence of the matters in s 262(1). Those matters constitute good defences which will avoid the claim which an applicant prima facie has …

  1. [73]
    In that case, his Honour rejected a submission that removal of a marlin tower that the buyer had installed on a yacht would cause damage to the yacht.  The yacht was sold with plates fitted such that a marlin tower might be added to it.
  2. [74]
    While I have no reason to depart from his Honour’s approach in relation to the onus of proof, the evidence in the present case leads to a clear conclusion.  I accept Mr Morris’ evidence that the interior and exterior shell of the motor vehicle were cut to install the two windows.  If the windows were to be removed from the motor vehicle, it is self-evident that they would leave two large holes in the shell of the motor vehicle.  Leaving two such holes, in my view, does fall within the ordinary meaning of the word ‘damage’.  Accordingly, the applicant is precluded from rejecting the vehicle pursuant to section 262(1)(d).
  3. [75]
    I note in passing that a different conclusion would likely be reached in relation to many other types of modification, such as towbars and roof racks, which may be easily removed without damage to the motor vehicle.  Such modifications may be regarded as analogous to the marlin tower in Vautin v BY Winddown, Inc (formerly Bertram Yatchs) (No 4) [2018] FCA 426.
  4. [76]
    Even though the applicant is not entitled to reject the motor vehicle, the applicant was nevertheless entitled to claim damages.  The learned member was incorrect in finding that it was not necessary to consider the applicant’s claim for damages.
  5. [77]
    Section 259 of the ACL relevantly provides:
  1. If the failure to comply with the guarantee cannot be remedied or is a major failure, the consumer may:
  1. subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection; or
  1. 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. 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. [78]
    The applicant has not provided any evidence in relation to the reduction in the value of the motor vehicle for the purposes of section 259(3)(a).  Accordingly, I am unable to award any damages under that provision.
  2. [79]
    As noted above, the applicant has sought recover of $990, being the cost of the installation of the two windows.  Given that I have found that the applicant is not entitled to reject the motor vehicle, it follows that it was also not entitled to recover the cost of modifications to the motor vehicle given that it will continue to have the benefit of the motor vehicle. 
  3. [80]
    The applicant has also sought to recover $10,750.81, being increased labour costs and the use of alternative vehicles.  While the applicant has provided calculations in support of this figure, he has not provided any evidence in support of these calculations.  In particular, he has provided no records of the hours worked and amounts paid to his employees during the period when the sliding door was not working, and any comparison records for periods when the door was working.  Further, he has also not provided any log books, receipts or other evidence of expenses in support of his claims for use of alternative vehicles.  In the absence of such evidence, I am unable to be satisfied that the applicant has proved its loss.
  4. [81]
    The second ground of appeal is not made out.

Ground three: both parties agreed that dust ingress was occurring due to removal of the cargo barrier

  1. [82]
    It is unnecessary for me to consider the third ground of appeal, as it is incapable of capable of altering the outcome in the present case. 
  2. [83]
    However, I note in passing that the respondents’ position is that the applicant’s modifications (including the installation of the two windows) may have varied the airflow and sealing of the motor vehicle.  The statement of Paul Beighton, relied upon by the respondents, identified the removal of the cargo barrier as a possible cause, and suggested reinstallation of the cargo barrier to confirm whether this was the case.  In my view, this evidence falls short of an agreement between the parties as to the cause of the dust ingress.

Claims under the MCDA Act

  1. [84]
    In the proceedings at first instance, the applicant also sought relief under the MCDA Act.  This was not considered by the learned member.  Given that the applicant referred to the statutory warranty in his grounds of appeal, I will briefly consider its claims under the MCDA Act.
  2. [85]
    ‘Warranted vehicle’ is defined in section 3 of Schedule 1 to the MDCA Act to mean:

A warranted vehicle is a used motor vehicle other than—

  1. an unregistered motor vehicle that is—
  1. incapable of being registered in Queensland because of its design; or
  1. a written-off vehicle; or
  1. a motor vehicle sold on consignment, unless the owner of the vehicle is a licensee; or
  1. a commercial vehicle; or
  1. a caravan; or
  1. a motorcycle.
  1. [86]
    ‘Used motor vehicle’ is in turn defined in Schedule 3 to the MCDA Act to mean:
  1. generally, means—
  1. a motor vehicle that has, at any time, been licensed or registered, whether under a law of this State or another State; or
  1. a motor vehicle that, had it not been registered as mentioned in subparagraph (i) for use for demonstration or sales promotion, would have been a new motor vehicle; or
  1. a used imported vehicle; or
  1. for part 3, division 6, see section 98.
  1. [87]
    The applicant’s motor vehicle appears to fall within these definitions.  In this regard, I note that the second respondent gave the applicant a notice about the statutory warranty under section 6 to Schedule 1 of the MDCA Act.
  2. [88]
    At the time of sale, the motor vehicle had an odometer reading of 1,618 kms and a built date of May 2019.  As the motor vehicle has an odometer reading of less than 160,000 km, and a built date of less than 10 years before the day of its sale, had the statutory warranty applied it would have been a class A warranted vehicle in accordance with section 3A of Schedule 1 to the MCDA Act.
  3. [89]
    In accordance with section 4 of Schedule 1 to the MCDA Act, class A warranted vehicle are warranted for a period which ends when the vehicle has travelled 5,000 km, or three months after taking possession, whichever happens first.
  4. [90]
    Under section 9 of Schedule 1 to the MCDA Act, the buyer must notify the dealer in writing of a defect before the end of the warranty period and deliver the vehicle to the warrantor or qualified repairer nominated by the warrantor, depending on whether the vehicle is less or more than 200 km from the warrantor’s place of business.  The buyer is taken to have delivered the vehicle if he or she makes reasonable efforts to deliver the vehicle to the warrantor or a nominee, but they have refused to accept it.
  5. [91]
    As noted above, the applicant took possession of the motor vehicle on 9 November 2020.  I have no evidence as to when the motor vehicle travelled 5,000 km, but three months after the date the applicant took possession is 9 February 2021.  There is no evidence before me that the applicant had provided the second respondent with a written defect notice by that time.  While the applicant wrote to the first respondent during this period, the first respondent was not the warrantor for the purposes of the MDCA Act. 
  6. [92]
    Accordingly, the second respondent was not obligated to repair the defects under section 12 of Schedule 1 to the MDCA Act.

Conclusion

  1. [93]
    For the reasons set out above, the learned member’s decision was attended by a number of errors.  However, these errors would not lead to the decision being reversed or substantially different on appeal.  While the applicant made out the first ground of appeal, it failed to make out the second ground.  In these circumstances, there is no reasonable prospect that the applicant would obtain substantive relief if leave to appeal was granted. 
  2. [94]
    As the grounds of appeal require leave to appeal, the appropriate order is that leave to appeal is refused.
Close

Editorial Notes

  • Published Case Name:

    Hinterland Express Pty Ltd v Inchcape European Automotive Pty Ltd & Anor

  • Shortened Case Name:

    Hinterland Express Pty Ltd v Inchcape European Automotive Pty Ltd

  • MNC:

    [2023] QCATA 130

  • Court:

    QCATA

  • Judge(s):

    Member Cranwell

  • Date:

    12 Oct 2023

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
Cary Boyd v Agrison Pty Ltd [2014] VMC 23
3 citations
Jump To
Cite 1 - [2014] VMC 23
Cite 2 - [2014] VMC 23
Cite 3 - [2014] VMC 23
Fawkes v ZS Motor Group Pty Ltd [2021] QCAT 150
2 citations
Jump To
Cite 1 - [2021] QCAT 150
Cite 2 - [2021] QCAT 150
Medtel Pty Ltd v Courtney (2003) 130 FCR 182
2 citations
Jump To
Cite 1 - (2003) 130 FCR 182
Cite 2 - (2003) 130 FCR 182
Morphy v Beaufort Townsville Pty Ltd [2018] VCAT 1520
2 citations
Jump To
Cite 1 - [2018] VCAT 1520
Cite 2 - [2018] VCAT 1520
Nesbit v Porter [2000] 2 NZLR 465
2 citations
Jump To
Cite 1 - [2000] 2 NZLR 465
Cite 2 - [2000] 2 NZLR 465
Saxer v Hume [2022] QCATA 25
2 citations
Jump To
Cite 1 - [2022] QCATA 25
Cite 2 - [2022] QCATA 25
Vautin v BY Winddown, Inc (formerly Bertram Yachts) (No 4) [2018] FCA 426
3 citations
Jump To
Cite 1 - [2018] FCA 426
Cite 2 - [2018] FCA 426
Cite 3 - [2018] FCA 426

Cases Citing

Case NameFull CitationFrequency
Neller & Anor v Queensland Building and Construction Commission [No 2] [2024] QCATA 461 citation
Neller v Queensland Building and Construction Commission [No 2] [2023] QCATA 1701 citation
Sheppard v Piryani Pty Ltd t/as Galaxy Autos [2025] QCAT 3312 citations
1

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