Eribo v Trinity Motors Pty Ltd t/a Trinity Ford Cairns [2024] QCAT 232

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Eribo v Trinity Motors Pty Ltd t/a Trinity Ford Cairns [2024] QCAT 232 PARTIES: MARIE ERIBO (applicant) v TRINITY MOTORS PTY LTD T/A TRINITY FORD CAIRNS (respondent) APPLICATION NO/S: MVL080-22 MATTER TYPE: Motor vehicle matter DELIVERED ON: 31 May 2024 HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Member D Brown ORDERS: Trinity Motors Pty Ltd t/a Trinity Ford Cairns is to pay Maria Eribo $1,374.90 within 28 days. CATCHWORDS: TRADE AND COMMERCE – COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – GUARANTEES, CONDITIONS AND WARRANTIES IN CONSUMER TRANSACTIONS – whether motor vehicle of acceptable quality – measure of damages. Australian Consumer Law (Queensland), s 54, s 56, s 259, s 260 Fair Trading Act 1984 (Qld), s 50A Motor Dealers and Chattel Auctioneers Act 2014 (Qld), Schedule 1 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 9, s 10, s 100, s 102 Campbell v Caravan & RV Central Pty Ltd t/as Avan New South Wales & FCA Australia Pty Ltd [2016] NSWCATCD 90 Medtel Pty Ltd v Courtney (2003) 130 FCR Morphy v Beaufort Townsville Pty Ltd [2018] VCAT 1520 Nuth v Soel Products Australia Pty Ltd trading as Caravan RV CQ [2020] QCAT 369 Simons & Ors v Dowd Lawyers Pty Ltd [2020] QCAT 348 -- 1 of 10 -- 2 Williams v Toyota Motor Corporation Australia Ltd [2022] FCA 344 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] On 28 April 2022 the applicant Marie Eribo filed an application – motor vehicle dispute with the Tribunal, seeking compensation of $10,000 from the respondent, Trinity Ford Cairns. The claim was purported to be made under both the Fair Trading Act 1989 (Qld) (‘Fair Trading Act’), s 50A (and the Australian Consumer Law) and the Motor Dealers and Chattel Auctioneers Act 2014 (Qld) (‘Motor Dealers Act’) [2] On 31 July 2019 the applicant’s husband Mr Colin Eribo purchased a brand-new Ford Ranger Wildtrak 4x4 Ute for $64,507.49. The vehicle came with a 5-year unlimited kilometre warranty. [3] ‘Motor vehicle’ is defined in s 12(1) of the Motor Dealers Act to mean: (a) a vehicle that moves on wheels and is propelled by a motor that forms part of the vehicle, whether or not the vehicle is capable of being operated or used in a normal way; or (b) a caravan. [4] The car falls within this definition. [5] Included with the application was a certified copy of a power of attorney completed by Mr Colin Eribo, appointing his wife Maria Eribo and giving her the power to do on his behalf, anything that he could lawfully do. Accordingly, Mrs Eribo has the power to bring this application. [6] The applicant seeks relief under the Australian Consumer Law, which is schedule 2 to the Competition and Consumer Act 2010 (Cth) (‘ACL’). The relief sought by the applicant is repair of the vehicle and compensation of $10,000 due to the devaluation of the vehicle. [7] Section 50A of the Fair Trading Act vests the Tribunal with jurisdiction in relation to motor vehicles in respect of certain actions under the ACL, where the amount sought is no more than $100,000. [8] Pursuant to s 3(1)(b) of the ACL, a person is taken to have acquired goods as a consumer if “the goods were of a kind ordinarily acquired for personal, domestic or household use or consumption”. This includes the applicant’s motor vehicle. The Jurisdiction of the Tribunal in Motor Vehicle Disputes [9] The Tribunal is empowered to hear and determine disputes in accordance with the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’) and the “enabling Act”.1 The applicant purports to bring these proceedings relying on both s 50A of the Fair Trading Act and Schedule 1, s 14 of the Motor Dealers Act as the enabling Acts. 1 QCAT Act, ss 9(1), 10(1)(a). -- 2 of 10 -- 3 [10] The Motor Dealers Act provides for a statutory warranty for “warranted vehicles” sold by a motor dealer in particular circumstances. These statutory warranties are in Schedule 1 to the Motor Dealers Act and warrant that the vehicle is free from defects at the time of taking possession and for the warranty period; and any defects in the vehicle reported during the warranty period and covered by the warranty will be repaired by the warrantor free of charge.2 [11] The maximum warranty period under the Motor Dealers Act is 3 months from the date of possession. Noting the issues arose in the applicant’s vehicle two years after possession, the applicant has no valid claim under the Motor Dealers Act. [12] Section 50A of the Fair Trading Act provides that the Tribunal has jurisdiction in relation to motor vehicle matters where an application is brought under a relevant provision of the ACL against a supplier or manufacturer for failure to comply with statutory guarantees, provided no more than $100,000 is sought. The Tribunal may make the following orders: (a) require a party to pay a stated amount to another person; (b) that a stated amount is not owing by the applicant or by any party to the proceeding to the applicant; (c) requiring a party to the proceeding, other than the applicant, to perform work to rectify a defect in goods; (d) requiring a party to the proceeding to return goods to a stated person; or (e) combining 2 or more of the above orders. [13] A Table of provisions provides for certain proceedings to be brought under the provisions of the ACL which include an action against a supplier of goods to recover an amount of loss or damage and recoverable reasonable costs incurred by a consumer or to recover damages because of a failure to comply with a guarantee (s 236(1), s 259(2), (3) & (4)). [14] Pursuant to s 259 of the ACL3 if the failure to comply with the guarantee cannot be remedied or is a major failure the consumer may reject the goods and seek a refund.4 If the failure to comply with the guarantee can be remedied and is not a major failure the consumer must require the supplier to remedy the failure within a reasonable time and only if there is a failure to remedy can the consumer seek reasonable costs or seek to reject the goods.5 [15] In this case the applicant is seeking the amount of $10,000, which is well within the $100,000 limit. Accordingly, the Tribunal has jurisdiction to hear the applicant’s motor vehicle dispute and to determine whether the applicant can obtain relief sought in the Application – Motor Vehicle Dispute filed in the Tribunal under the Fair Trading Act. 2 Motor Dealers Act, Schedule 1, s 7(1)(a) and (b). 3 Schedule 2 of the Competition and Consumer Act 2010 (Cth). 4 Ibid, s 259(3). 5 Ibid, s 259(2). -- 3 of 10 -- 4 Guarantee of acceptable quality [16] 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’. [17] Goods are defined as being of “acceptable quality” if they are: (a) fit for all the purposes for which goods of that kind are commonly supplied; (b) acceptable in appearance and finish; (c) free from defects; (d) safe; and (e) durable. [18] The test of acceptable quality requires a test in terms of what the 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 following matters: (a) the nature of the goods; (b) the price of the goods; (c) any statements made about the goods on any packaging or label on the goods; (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.6 [19] The Macquarie Dictionary defines the word ‘defect’ to mean ‘a fault’ or ‘imperfection.’ [20] The Macquarie Dictionary defines ‘durable’ as ‘having the quality of lasting or enduring…of or relating to goods which will be good for some time, as opposed to those intended to be used or consumed immediately.’ [21] The construction and interpretation of s 54 of the ACL was considered in Williams v Toyota Motor Corporation Australia Ltd7 where Justice Lee stated: Despite the obscure drafting of other provisions 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 failure to comply with the guarantee… [22] The Tribunal has found that the time at which goods are to be of acceptable quality is the time at which the goods are supplied to the consumer.8 However, information 6 Ibid, s 54(3). 7 [2022] FCA 344 at [164]. 8 Medtel Pty Ltd v Courtney (2003) 130 FCR 182 at [64] and [70]; Williams v Toyota Motor Corporation Australia Ltd [2022] FCA 344 at [164]. -- 4 of 10 -- 5 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.9 [23] In Morphy v Beaufort Townsville Pty Ltd [2018] VCAT 1520 at [72], the Victorian Civil and Administrative Tribunal stated: [T]he context of the section clearly requires that the question of durability be determined by having regard to how long a ‘reasonable consumer’ would expect the goods to last, taking into account the price paid, the nature of the goods and the representations made about the goods. [24] In Campbell v Caravan & RV Central Pty Ltd t/as Avan New South Wales & FCA Australia Pty Ltd [2016] NSWCATCD 90 at [57], the New South Wales Civil and Administrative Tribunal stated: A reasonable consumer would also be entitled to expect that such a high cost item would be durable, being capable of safe and effective use over a number of years (or at least many thousands of kilometres). Remedies [25] The remedy available to the consumer against the supplier depends in the first instance on whether the failure is a ‘major failure.’10 [26] The applicant is not alleging that the rust on the vehicle is a major failure and is not seeking a refund. In the circumstance it is not necessary for the Tribunal to unpack the definition of major failure as the Tribunal agrees that the rust on the roof in this case does not meet the definition of a major failure. The car is still otherwise able to be used for its intended purpose and the defect can be rectified and repaired. [27] The ACL provides remedies when the failure to comply with the guarantee can be remedies and it is not a major failure.11 To seek to recover under the ACL, the consumer must request the supplier to remedy the failure within a reasonable time and if the supplier refuses or fails to comply with the requirement within a reasonable time the consumer may have the failure remedied and recover all reasonable costs incurred by the consumer in having the failure so remedied; or subject to section 262, notify the supplier that the consumer rejects the goods and of the ground/s for the rejection.12 [28] Damages are also recoverable under s 259(4) of the ACL, which provides for the recovery of 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. The applicant’s evidence. [29] The applicant identified rust spots on the roof of the vehicle in September 2021. At the time, the vehicle was just over 2 years old and remained under its new car warranty which was valid for 5 years. [30] When this was brought to the attention of the respondent and Ford Australia, the applicant asserts that Ford initially made a verbal offer to respray the vehicle and pay 9 Nuth v Soel Products Australia Pty Ltd trading as Caravan RV CQ [2020] QCAT 369 [33]. 10 ACL, s 260. 11 Ibid, s 259(2). 12 Ibid, s 259(2)(b)(i) and (ii). -- 5 of 10 -- 6 compensation to mitigate the devaluation of the vehicle and then resiled from that agreement. There is unfortunately no independent evidence of this offer, such as an email or a letter to substantiate the claim. [31] The applicant asserts that as the rust spots were spreading rapidly and aggressively and the respondent and Ford Australia refused to repair the rust spots on the roof, they requested a replacement vehicle. This was not agreed to by the respondent or Ford Australia who asserted that the rust spots were caused by stone chips on the roof, which is an impact damage and not a manufacturing defect. [32] The applicant disputes the rust marks are caused by stone chips due to the following: (a) Modern cars do not rust due to the technology of manufacturing and quality of materials used. (b) Four-wheel drive vehicles are purported to be of a higher durability and this model is the highest within the range and designed for rugged off-road use and therefore it is reasonable to expect a higher durability and resistance to the environmental elements. (c) The applicant added a paint body protection product and a stone chip bonnet protection to the vehicle when purchased to add to the durability. The vehicle is washed regularly and kept garaged. (d) The areas of defects are unique and clearly different to the other areas of the vehicle that have been affected by actual stone chips. None of the other areas with stone chips have rusted. (e) The areas on the roof that are rusting are areas in which it would be unusual/difficult to get stone chips. (f) No expert evidence has been provided by the respondent or Ford Australia to support their position and only a visual inspection of the roof was conducted. (g) The applicant asserts that they have conducted research and the Ford Ranger model has experienced significant rust problems over many years in USA and Australia. [33] The applicant asserts the valuation of the vehicle has declined significantly and they are seeking a finding that the vehicle is defective, for the rust on the roof to be repaired and resprayed and $10,000 in compensation in recognition of the devaluation of the vehicle. [34] The applicant provided further photographs in September 2023 which were purported to be comparison photographs of the other parts of the vehicle which are not rust affected. These photographs were unable to be opened and viewed by the Tribunal and in September 2023 and May 2024 requests were made to the applicant to re-send these photographs. However no further photographs have been received. [35] In October 2023, the applicant provided an estimate from Scott Streets Panel Works to repair the roof in the amount of $1,247.40, and a breakdown of the quantum of damages and how they estimated the $10,000. Respondent’s evidence [36] There is a dearth of evidence filed by the respondent. -- 6 of 10 -- 7 [37] An affidavit of service was provided to the registry on 5 July 2022 confirming the respondent was served with the application by posting it to the company’s registered office on 11 May 2022. On 17 May 2022 an email was received by the Tribunal from the sales manager of the respondent company confirming the application was received by the respondent on 16 May 2022. [38] Directions were made by the Tribunal on 22 June 2022 that the respondent was to file a response by 29 June 2022. The respondent did not comply with the direction and did not file any material. [39] The matter was listed for hearing on 9 February 2023, which was subsequently adjourned to a future date to be fixed. No response had been filed by the respondent by this hearing date. [40] On 1 September 2023 directions were made by the Tribunal that the respondent was to file submissions in the Tribunal by 12 September 2023 addressing whether it had a reasonable excuse for failing to file a response by 22 June 2022 as directed, and why the Tribunal should not make its final decision in the applicant’s favour pursuant to section 47(2)(b)(i). The respondent failed to comply with the direction and provided no submissions. [41] The matter was listed for hearing on 14 September 2023. No material had been filed by the respondent by this date. The applicant advised they were unavailable due to traveling. Accordingly, the hearing was adjourned, and further directions were made, that the time for the respondent to comply with the direction to provide submissions as to their noncompliance was extended to 28 September 2023. The respondent failed to comply and provided no submissions. [42] On 26 October 2023 the respondent company provided an email to the registry providing a Form 60 Response. No explanation was provided as to why they failed to file the response in 2022 as directed or failed to comply with the two directions to provide a reasonable excuse for their non-compliance. [43] The respondent state that the vehicle presented with rust spots across numerous areas and the affected areas show an external influence has impacted the paint work. The respondent asserts that paint condition is the responsibility of the owner and not covered under the warranty. [44] The respondent asserts that the rust is most likely caused by an external influence setting on the paint and not removed in a reasonable time such as tree sap or bird droppings and the roof is a common area of paint contamination as it is generally an area not well maintained, as it is hard to reach. [45] No reports were provided to support this position and the only evidence provided was pages 242-245 of the Ford Ranger Owner’s manual which provides guidance on vehicle care and cleaning. Findings [46] Consideration was given whether the matter should be determined in the applicant’s favour pursuant to section 47 or section 48 of the QCAT Act, due to the noncompliance of the respondent with directions issued by the Tribunal and the lack of evidence filed in response. -- 7 of 10 -- 8 [47] However, the summary end of proceedings is a very serious matter and an argument for striking out a claim must be very clear to justify the Tribunal’s intervention to prevent a party from submitting its case for determination. It is a very serious matter for the Tribunal to dismiss a claim without allowing a hearing of that claim and a decision on the merits to take place.13 [48] Such considerations have greater importance now under section 31 of the Human Rights Act 2019 (Qld) under which a party to a civil proceeding has the right to have the proceeding decided by a competent, independent and impartial court or Tribunal after a fair and public hearing.14 [49] Noting the respondent has now filed a response, I did not determine the matter in the applicant’s favour pursuant to section 47 or section 48 and have determined the matter on its merits. [50] Little weight has been put on the assertion by the applicant that the Ford Ranger model has experienced significant rust problems over a number of years in the USA and Australia, as none of the research purported to be done was provided to the Tribunal. As such, the veracity of this statement cannot be proven and nor can it be determined, even if true, whether this issue was in relation to this model of Ford Ranger. [51] I do however find that in terms of this vehicle, there is rust on the roof (which appears to be an undisputed fact), that is a defect and not what is expected in terms of the quality and durability of a vehicle of this type and price range to occur on the paint work, in the first 2½ years of ownership of a new vehicle. [52] I was not convinced by the respondent’s position that this was caused by the applicant’s negligence in not appropriately cleaning their car and allowing some external influence such as tree sap or bird droppings to remain on the car for an unreasonable time. I note that this is different to the position provided by the respondent after the initial inspection of the vehicle prior to the commencement of the proceedings, which is that it was impact damage (such as a stone chip). The basis that the position has changed from the rust being caused by impact damage to the rust being caused by an external influence on the paint work is unclear. [53] There was no inspection or reports, or expert reports provided by the respondent to evidence the opinion on the cause of the rust, nor any photographs to identify what had been considered. [54] This is a four-wheel drive vehicle which is meant for some off-road use and which the applicant paid $64,000 for. At that price and noting this is a four-wheel drive vehicle, it is expected that the vehicle would be durable and should be able to sustain the impacts of weather and the outdoors including bugs and trees, and not rust from these items falling on the paint work. [55] The applicant stated they regularly wash the vehicle and keep it garaged and there is nothing to suggest that this evidence is not correct. The respondent has not asserted the applicant was dishonest, they simply made a general comment that the roof can be 13 Jones v Queensland Health [2012] QCAT 167; Irvine and Porter v Mermaids Cafe and Bar Pty Ltd and Ingall [2010] QCAT 393, [21] cited by Judicial Member Hon Peter Lyons QC in Simons & Ors v Dowd Lawyers Pty Ltd [2020] QCAT 348, [62], Ali v State of Queensland [2019] QCAT 68, [63]. 14 A right which could be limited where it is demonstrably justified in a free and democratic society based on human dignity, equality and freedom: section 13(1). -- 8 of 10 -- 9 a common place for paint contamination. This comment was speculative as no evidence was provided to support a finding that bird droppings or tree sap had been on the car or that it was not washed in a reasonable time. The information about the roof being difficult to wash was a generic comment and not specific to this owner and this vehicle. [56] I accept the defect in terms of the rusting, which only appeared after two years, was a latent defect which was in the vehicle at time of purchase, but only became evident at the later date. I accept the applicant raised the defect in a very timely way with the respondent upon becoming aware of the rust issues. I accept the rusting is able to be repaired and is contained to the roof area and as such is not a major defect. [57] I find based on the emails attached to the application that the applicant did attempt to seek that the respondent repair the vehicle. However, they refused to do so, based on the advice of Ford Australia that it was not included in the warranty. [58] While the applicant did ask for a replacement vehicle, which was refused (which is effectively rejecting the goods and seeking a refund) they no longer pursue any refund and seek compensation/damages instead. [59] I accept the cost to repair the vehicle being $1,247.40 in the estimate of Scott Street Panel Works as a reasonable cost to repair the roof and that this was a foreseeable consequence of rust appearing on the roof. [60] In the circumstance of this matter where the respondent has previously refused to repair the roof and factoring in their conduct in these proceedings in terms of delay with providing a response, I do not consider it appropriate to order them to fix the roof and instead order payment of the amount of $1,247.40 by the respondent to the applicant to cover the cost of the repairs. [61] In terms of compensation of $10,000 for devaluation of the vehicle sought by the applicant, the applicant has not provided any evidence from any independent expert as to the loss, if any, in the value of the vehicle due to the rust on the roof. Nor have they provided any evidence of any prior acknowledgment, by the respondent or Ford Australia, that $10,000 is a reasonable reimbursement for the loss in value of this vehicle or any agreement to pay this amount. As such I am unable to quantify any damages that might be available to the applicant in this regard and accordingly, I decline to order compensation for loss of value. Costs [62] The starting point for costs is that each party must bear their own costs.15 However, the Tribunal may make an order requiring a party to pay all or a stated part of the costs of another party to the proceeding if the Tribunal considers the interests of justice require it to make the order.16 [63] It is clear from Ms Eribo’s application that she paid a filing fee of $127.50 in QCAT. [64] The amount of the filing fee is reasonable and was necessarily incurred by the applicant in pursuing their claim. Factors that may be considered in determining 15 QCAT Act, s 100. 16 Ibid, s 102. -- 9 of 10 -- 10 whether it is in the interests of justice to order costs include the relative strengths of the claims made by each party.17 In the circumstances of the claim being successful and the applicant attempting to resolve the matter with the respondent company and Ford Australia prior to commence proceedings, I consider it is in the interests of justice to award the cost of the filing fee in the amount of $127.50 be paid by the respondent to the applicant. [65] The applicant raises a claim of costs for legal advice from two separate experts. However, they have not provided any evidence of any costs paid in relation this advice. There is not information as to the amount paid for any legal advice and no evidence of invoices or client retainer/agreement. The applicant has also never requested or been granted leave to be represented in the Tribunal. In the circumstances the Tribunal in unable to make any order for payment of cost relating to legal advice and the request is refused. [66] The applicant also seeks costs or compensation for her time in personal administration hours, estimated to be 300 hours, in reading, researching and phone calls in relation to this matter. This included engagement with QCAT, the respondent and Ford Australia, and the need to update her husband while he is away working. The applicant provided no independent information to evidence this time or quantify her costs or losses and most of the tasks described are part of the engagement necessary in bringing legal proceedings and not time for which an applicant is entitled to be reimbursed for. Accordingly, the request for costs/compensation for personal administration is refused. Orders [67] I order Trinity Motors Pty Ltd t/a Trinity Ford Cairns to pay Maria Eribo $1,374.90 within 28 days, which consists of: (a) Damages of $1,274.40 plus (b) Costs of $127.50. 17 Ibid, s 102(3)(c). -- 10 of 10 --