LNM v Bailey[2023] QCATA 131

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

1. [1]
   The respondent is a second-hand motor vehicle dealer who operates a business at Southport. In March 2021 he advertised a second hand 2007 Hyundai Sonata Auto sedan with low km for $6,990 for sale. There was a reasonably comprehensive description of the vehicle in the advertisement. It had in fact done about 160,000 klm with (allegedly) one owner. There were also photographs of the car, including the interior, in the advertisement.
2. [2]
   The applicant inspected the vehicle and decided to buy it. She signed a contract for the purchase of the vehicle on 12 March 2021 and collected the vehicle.
3. [3]
   A couple weeks after collecting the vehicle, she took it to Bridgestone at Pimpama to have the vehicle undergo a mechanical inspection. Unsurprisingly, with a vehicle of that age some minor defects were noted. These included; the front sway bar D bushes noisy, rear swaybar D bushes, oil seeping around the sum area; transmission oil dirty, front lower control arm bushes starting to split and the tyres showing some age. The Bridgestone report, which is essentially the cornerstone of the applicant’s case stated the items required attention to “ensure the safe and reliable operation of the car”.  There is an audio recording of the Bridgestone person discussing the issues with the applicant but he did not say the car was not safe to drive. This is self-evident because the noted issues with the vehicle would not, from a common sense point of view, render the vehicle unsafe. Bridgestone offered to attend to these maintenance items at a quoted cost of $1,902.05.
4. [4]
   The applicant took this up with the respondent in a letter to him of 27 March 2021 insisting the maintenance issues be addressed by him and also sought compensation for the misrepresentation as to the history of the vehicle. The following day, the respondent offered to have his mechanic look at the vehicle but at the same time offered a full refund with a return of the vehicle. The applicant rejected this offer and on 31 March gave a further detailed list of defects, apparently added to with the assistance of the applicant’s mother, who professed to have mechanical knowledge. The respondent again offered a full refund or have his repairer address some of the items on the list. The refund was rejected.
5. [5]
   The applicant’s mother delivered the vehicle to the respondent’s premises on 1 April 2021, the day before Good Friday, knowing that nothing would be attended to until the earliest the following Tuesday. The respondent advised the applicant on Good Friday that it could not be looked at until the following week and queried why it was left with him over Easter.
6. [6]
   The respondent did have the vehicle inspected on 5 April 2021 by WF Automotive and a report was provided which did not identify any issues with the vehicle. The report noted “vehicle is in good condition”.
7. [7]
   On Thursday, 8 April 2021, before receiving the report from WF Automotive the applicant, cancelled the registration on the vehicle. She wrote to the respondent to advise that she was “writing to cancel the contract on the used Hyundai Sonata”. She contended that the vehicle was not fit for the purpose she bought it and called for a refund of $6,990. Later that same day the respondent provided a copy of the report from WF Automotive (Wayne Fairclough). He offered to refund $6,097.05 because the vehicle had been driven in the intervening period, it would cost him to get it detailed as well as the loss of registration, which the applicant received. The offer was rejected and the applicant later challenged the WF Automotive report because the business was not an Approved Inspection Station. I should point out here that there is no evidence that Mr Fairclough is not a qualified automobile mechanic and competent to provide a report as to the vehicle’s mechanical condition. Not only that, a safety/roadworthy certificate was provided with the vehicle when sold.
8. [8]
   There was an impasse and ultimately on 27 April 2021 the respondent had the vehicle delivered to the applicant’s home address where it remains.
9. [9]
   On 3 March 2022 the applicant commenced a proceeding in the minor civil disputes jurisdiction of the Tribunal claiming $9,176.35 which included the cost of some repairs and filing fee. Annexed to the application is a copy of all email exchanges, the advertisement for the vehicle and documents in support of the claim and critically the initial Bridgestone report which identified the issues with the vehicle.
10. [10]
    The application came on for hearing before a tribunal member on 27 October 2022. The respondent did not attend the hearing. The learned member took evidence from the applicant and discussed the various documents produced by her at the hearing. The history of the transaction and the aftermath is that which is generally set out above. There really was no dispute of fact as to the sequence of events and therefore reliance was placed on the applicant’s evidence. The decision was reserved.
11. [11]
    On 1 November 2022 the Tribunal made an order dismissing the applicant’s claim. Comprehensive written reasons were provided. The Tribunal recorded the history as described above and identified each of the issues raised by the applicant which were:

    1. Whether the applicant was entitled to any amount under the Fair Trading Act 1984 (reference to the nominated sections of the Australian Consumer Law (ACL);
    2. Was there a failure by the respondent to comply with the consumer guarantee;
    3. Was the loss, if any, a reasonably foreseeable result of the alleged failure;
    4. Was the applicant entitled to reject the vehicle;
    5. Was there any entitlement to payment of any amount under the Motor Dealers and Chattel Auctioneers Act 2014 (“MDCA Act”).
12. [12]
    In respect of the questions under the ACL it was incumbent on the applicant to establish that, given the age of the vehicle, and it had done over 160,000 that it was not fit for the purpose, not free from defects; was not safe. The determination of these questions were dependant on the evidence produced at the hearing. Ultimately, the Tribunal was required to make findings of fact as to these matters.
13. [13]
    The learned member referred to the defects complained of by the applicant contained in the Bridgestone report.^[1] Having considered these matters she found that the vehicle was fit for the purpose. Furthermore, the Bridgestone report made no suggestion that the vehicle was defective or unsafe but it was showing its age. This is consistent with the content of the report and nature of the ‘defects’ referred to therein. She did not consider the report from WF Automotive in detail, mainly relying on the applicant’s evidence produced at the hearing. However, this report only reinforces her conclusion.
14. [14]
    She went onto find that even if the consumer guarantee applied, the losses claimed by the applicant were not foreseeable because having made the complaint, the respondent should have been given a reasonable time to address the problems in the Bridgestone report as required by s 11 of Schedule 1 of the MDCA Act. This did not occur because she terminated the contract. The learned member said at [30]:

It was not reasonably foreseeable that the applicant would cancel the registration and ‘cancel’ the contract without giving the respondent a reasonable chance to either remedy or explain the reasons he disagreed with her assessment of the alleged failure, particularly when the respondent had twice offered a refund before the vehicle was returned for inspection.

15. [15]
    As to the rights under s 259 of the ACL this only relates faults that are not major faults which the member found as a fact that the faults complained of were not major. This is self-evident from the Bridgestone report. Further, sufficient time was not given to the respondent to firstly, consider the Bridgestone report in consultation with a mechanic and secondly, the time available included the four-day Easter holiday. While this was being undertaken on the return to work after Easter the applicant cancelled the contract. The learned member found that she was not entitled to do this because:

    1. The alleged defects were capable of remedy;
    2. She has not proved there was a major failure;
    3. The respondent had not refused to remedy the alleged defects; and
    4. She had not given the respondent a reasonable time to remedy as she was required to do by s 259(2) (of the ACL).
16. [16]
    Again, it was open to the Tribunal to make these findings on the evidence.
17. [17]
    The learned adjudicator then turned to the remedies under section 15 of Schedule 1 of the MDCA Act. In respect of the requirements of that section the applicant generally complied with it by giving the defects notice before the end of the warranty period; delivered the vehicle to the respondent; gave the respondent 5 days to accept or refuse to remedy the alleged defects which were covered by the warranty period. However, before the time expired, bearing in mind the intervention of Easter, the applicant cancelled the contract.
18. [18]
    In the end the Tribunal found that the alleged defects are not covered by the statutory warranty also, that the applicant failed to follow the statutory procedure in order to have the benefit of the warranty.^[2]
19. [19]
    As a consequence of the application being dismissed, the applicant filed an application for leave to appeal or appeal. As explained to her at the hearing of the appeal, as this is an appeal brought under s 142(3)(a)(i) of the Queensland Civil and Administrative Tribunal Act 2009 in respect of a decision in a proceeding for minor civil dispute, an appeal may be made only if the party has obtained leave of the Tribunal. Leave to appeal (or permission) will usually only be granted where there is a reasonable argument the decision under appeal was attended by error, or that an appeal is necessary to correct the substantial injustice caused by the error.^[3] Further in Rintoul v State of Queensland & Ors [2018] QCA 20 at [10] the Court of Appeal reiterated the general principles:

The principles governing a grant of leave to appeal are well-established. In short, an applicant for leave to appeal must show:

1. the appeal is necessary to correct a substantial injustice;

2. there is a reasonable argument that there is an error to be corrected.

There must be reasonable prospects of success to warrant a grant of leave. Therefore, in deciding whether to grant leave to appeal the Court usually makes some preliminary assessment of the prospects of the proposed appeal.

20. [20]
    The appeal is not another opportunity for the parties to re-argue the case that was before the original decision maker. The findings of fact made by the original decision maker will not be disturbed unless the findings were not open on the evidence before the Tribunal.^[4] The difficulty facing the applicant here is that the learned member made specific findings of fact about the condition of the car and whether there were defects, which findings were open on the evidence, in particular the Bridgestone report.
21. [21]
    The applicant has filed extensive submissions in support of her grounds for appeal and has also sought to lead fresh evidence. I will deal with that application first. The fresh evidence relates to expenses incurred subsequent to the receipt of the primary decision. They include, inter alia, costs of the filing fee for the appeal, printing and postage costs, photos of the car on a tilt tray, receipt for the number plate surrender and transcript. All of this evidence does not go to the primary issue. Furthermore, even if allowed it would not have any impact the central issue and that the termination of the contract.^[5] Therefore I do not propose to allow the fresh evidence.
22. [22]
    In response to the appeal, the Mr Bailey filed a two-page statement, by email, addressing some of the issues raised by the applicant. He provided a reason for not attending the primary hearing. He said he was on standby for a call from the Tribunal but it never came. He subsequently found out that the Tribunal had the incorrect telephone number and hence his non-appearance.
23. [23]
    He reiterated the uncontroversial facts as described above. He contends that the salesperson dealing with the applicant gave the applicant a copy of the Form 12 information which was included in the contract. In any event, even if this was not the case, the applicant took all steps necessary to exercise her rights with respect to the alleged defects as found by the learned member.
24. [24]
    Turning to the applicant’s submissions on the appeal. The absence of Mr Bailey at the primary hearing is of no consequence in this appeal. The learned member accepted all of the applicant’s evidence and versions of conversations, mainly contained in emails, in coming to her decision. The effect of this was that there really was no dispute of fact as to what occurred during the purchase of the vehicle and subsequently entering into the contract and complaint about the alleged defects in the Bridgestone report. The absence of the respondent is not a basis to set aside the decision below.
25. [25]
    The failure, if any, to provide the Form 12 was not causative of the applicant’s loss. The purpose of the Form 12 is to inform a buyer of their rights, including a cooling off period. Even accepting she did not receive it, she took all steps necessary to enforce her rights under the contract and the statutory warranty. That is inescapable. She identified what she thought were defects, returned the vehicle for inspection and repair but then, prematurely terminated the contract. The failure to provide a Form 12, if any, did not result in any disadvantage or loss to the applicant.
26. [26]
    Similar considerations can be made about the failure to provide a receipt. This did not give rise to a right to terminate the contract. The termination was in relation to what the applicant considered defects in the vehicle, not the purchasing process.
27. [27]
    The defects notice, as described by the applicant, was written in reliance on the Bridgestone report. Even if it was not accompanied by the Form 12, this did not put the applicant at any disadvantage as a consumer. In particular, the report stated:

• – Front swaybar bushes noisy;
• – Cabin filter blocked;
• – Brake fluid flush;
• – Rear swaybar D bushes
• – Oil seaping (sic) around the sump area;
• – Transmission fluid burnt/dirty;
• – Front lower control arm bushes starting to split;
• – RHR tyre age 2011 (age cracking);
• – LHR tyre aged 2014 made

28. [28]
    As found by the learned member the Bridgestone report did not say that the vehicle was unsafe not fit for the purpose, or the items identified were defects.^[6] It was vague and as was stated by WF Automotive, things like the transmission oil, and brake fluid and cabin filter, were all serviceable items. The car may have required work but that is as far as it went. The absence of the Form 12 was not causative of loss or potential loss, nor did it prevent or impact the applicant’s reliance on the statutory warranty.
29. [29]
    The respondent did agree to inspect some items and got the WF Automotive report which confirmed the condition of the vehicle, however events were overtaken by the applicant’s termination of the contract. That was also found by the Tribunal.
30. [30]
    It is correct to say that the respondent did consider most items ‘serviceable items’ and offered to fix defects but reserved the right to have his mechanic check them. As it turned out there were no defects, and again, before anything could be actioned the contract was terminated. The car registration was cancelled purportedly because the car was not safe but that was just not the case on the evidence the applicant produced.
31. [31]
    Even if there was a dispute about defects, and some delay, there was no logical reason to cancel the car registration as the car was not unsafe to drive, despite the applicant’s assertions she did so on advice. This was a clear intention that as far as the applicant’s was concerned the contract was at an end. However, the termination was not lawful and the applicant had no grounds at that stage to demand a refund despite the fact that one was offered on several occasions. The statutory warranty period had not expired and there was a finding of fact that the goods were fit for purpose.
32. [32]
    The respondent returned the car and there was no direct objection to that by the applicant. He had sought to address the applicant’s complaints,
33. [33]
    The applicant’s further submissions repeat and rely on the fact that the vehicle had defects which needed to be addressed by the respondent. However, the situation was that clearly, the Bridgestone report only identified serviceable items which the learned adjudicator found that those serviceable items did not impact the safety of the vehicle. In other words, there was a finding of fact that the vehicle was fit for the purpose for which it was purchased.
34. [34]
    The applicant refers to the meaning of defect in a number of cases,^[7] in particular that the vehicle does not perform its intended function as a vehicle or it cannot be reasonably relied on. There was simply no evidence put before the Tribunal that the serviceable items interfered with the function of the vehicle, particularly a vehicle of this age. This is confirmed by the further report by WF Automotive although not referred to specifically by the Tribunal below.
35. [35]
    The applicant contends that the respondent failed to comply with her ‘defect notice’ within the time stipulated by the statutory warranty. Under s 11 of Schedule 1 of the MDCA Act the respondent/warrantor must advise in writing whether the warrantor accepts or refuses the defects covered in the warranty period. If the warrantor fails to give the warranty advice within 5 business days “after receiving the defect notice and delivery of the vehicle” the warrantor is taken to have given a warranty notice accepting the defects. The applicant submits that as the respondent did not provide a warranty advice within the 5 business days he is deemed to have accepted the defects.
36. [36]
    There are two difficulties with this submission. The first is that the learned member specifically found the vehicle was delivered on 1 April 2021 and that the items were not defects. Secondly, the respondent had until close of business on 9 April 2021 to respond to the defects notice (assuming time starts on the day of delivery and not the next day). Time ran from 1 April 2021 when the vehicle was delivered, and five business days from 1 April 2021, excluding the Easter break, expired on 9 April 2021. However, the applicant terminated the contract on 8 April 2021 at 2:30pm. She simply did not give the respondent the required 5 days notice to respond to the defects notice. In any event, that evening he provided his own inspection report from WF Automotive supported by photos of the component parts complained about. By the content of that report he refused to accept the car had defects as alleged by the applicant.
37. [37]
    The balance of the applicant’s submissions are repetitive, and reiterate the history of events and are based on the assumption that the subject items in the Bridgestone report were defects going to the safe operation of the vehicle. This report just did not go that far as the learned member found, and as I have repeatedly said above. There was no other independent evidence addressing the safe operation of the vehicle. Once that point is reached there is no basis to interfere with the learned adjudicator’s reasoning for dismissing the claim. She was quite specific in her ultimate finding at [40] - [41]:

I am not satisfied that the applicant has established that parts of the vehicle do not perform their intended function. While sone parts of the vehicle have deteriorated over its 10 year life and were showing their age (as the person from Bridgestone observed) the car was driveable.

I find that the alleged defects are not covered by the statutory warranty. Even if they had been, I find that the applicant failed to follow the statutory procedure in order to have the benefit of the warranty.

38. [38]
    As no error of law or fact has been established leave to appeal must be refused.
39. [39]
    Pursuant to an order of the Tribunal dated 31 January 2023 publication of any evidence, document or order identifying the applicant to this proceeding has been prohibited under s 66(1) of the QCAT Act.