Bray v BCP Holdings Pty Ltd t/as Bundaberg Toyota [2024] QCAT 223

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION Bray v BCP Holdings Pty Ltd t/as Bundaberg Toyota [2024] QCAT 223 PARTIES: LORRAINE ANN BRAY (applicant) v BCP HOLDINGS PTY LTD T/AS BUNDABERG TOYOTA (respondent) APPLICATION NO/S: MVL104-23 MATTER TYPE: Motor vehicle matter DELIVERED ON: 24 May 2024 HEARING DATE: 9 May 2024 HEARD AT: Brisbane DECISION OF: Member Poteri ORDERS: The Applicant must deliver the Toyota HiLux registration number 919IUU (‘HiLux’) together with any ancillary equipment and keys of the Toyota to the Respondent. If the HiLux is at Biggenden, the Respondent, at its cost, must collect and remove the HiLux from the Applicant’s property by 4pm on 14 June 2024. The Respondent must provide at least 48 hours’ notice to the Applicant of the time and date that the Respondent intends to take delivery of the HiLux from the Applicant. The Respondent must pay the sum of $11,900.54 into the nominated bank account of the Applicant by 4pm on 31 May 2024. The Applicant must advise the Respondent of the Applicant’s contact details (for providing notice) and the Applicant’s nominated bank account details by 4pm 29 May 2024. TRADE AND COMMERCE – COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – GUARANTEES, CONDITIONS AND WARRANTIES IN CONSUMER TRANSACTIONS – GUARANTEES, CONDITIONS AND WARRANTIES – where the applicant purchased a second hand vehicle with an odometer reading -- 1 of 11 -- 2 of approximately 350,000 kilometres – where problems have arisen with the air conditioning unit, gearbox and engine of the vehicle within 4 months of the purchase – where the vendor has made representations about the vehicle – whether the vehicle was of acceptable quality when supplied – whether failure of the consumer guarantee was a major failure Competition and Consumer Act 2010 (Cth), Schedule 2, s 54, s 259, s 260, s 263 Fair Trading Act 1980 (Qld), s 50A Motor Dealers and Auctioneers Act 2014 (Qld), Schedule 1 Australian Competition and Consumer Commission v Jayco Corporation Pty Ltd [2020] FCA 1672 Medtel Pty Ltd v Courtney (2003) 130 FCR 182 Grehan v WestPoint Autos Qld Pty Ltd [2022] QCATA 65, cited APPEARANCES & REPRESENTATION: Applicant: Self-represented Respondent: Represented by Nathan Obst, Sales Manager, and Brett Caton, Service Manager REASONS FOR DECISION [1] This matter was heard before me by remote conferencing on 9 May 2024. The Applicant, Lorraine Ann Bray (‘Bray’) represented herself. The Respondent, BCP Holdings Pty Ltd Trading as Bundaberg Toyota (‘Toyota’), was represented by Nathan Obst (‘Obst’) who advised the Tribunal that he was the Sales Manager of the Respondent, and Nathan Caton (‘Caton’) who advised the Tribunal that he was the Service Manager of the Respondent. They advised the Tribunal that they had the authority of the Respondent to represent the Respondent in these proceedings. [2] Bray says that she visited Toyota and spoke to a salesman, Klint Wagstaff (‘Wagstaff’) of Toyota. She advised Wagstaff that she lives in Biggenden which is approximately 100 kilometres from Bundaberg, and she wanted a budget reliable motor vehicle to last at least 12 months when she expected to be in a better financial position to enable her to purchase another vehicle. Bray advised Wagstaff that she was not concerned about the appearance of the vehicle, but she wanted a reliable air- conditioned vehicle for driving on the highway. Bray advised Wagstaff that she needed a vehicle to travel the 200 kilometres round trip from Biggenden to Bundaberg to receive specialist medical treatment. Bray was directed to the HiLux where she noticed that there was white writing on one of the windows of the HiLux. This writing included the words “air con”, “the ever reliable Toyota won’t let you down” and “full safety inspection”. [3] After some negotiations Bray purchased the HiLux on 4 October 2022 for a total cost of $10,888 after some negotiations. As part of contract conditions Toyota agreed to include a 12-month warranty from a private warranty insurer (‘AWN’). -- 2 of 11 -- 3 [4] The exterior of the HiLux was not fully detailed, but Bray was not concerned about these issues. See photographs of the HiLux presented to the Tribunal by Bray. [5] At the hearing there was some discussion between the parties about the distance driven by Bray since the purchase. Eventually there was consensus that Bray had driven approximately 2,600 kilometres since purchase. [6] At the hearing Obst and Caton did not challenge the evidence of Bray that she advised Wagstaff about the 12 month/reliability or the advertising on the window. Further Wagstaff was not called to give evidence. On this basis I accept that Bray made her requirements known to Wagstaff and the advertising as described by Bray was on the window of the HiLux. [7] Bray says in her application that there have been significant problems with the HiLux since purchase. They are: (a) The air conditioning failed and required repairing. (b) Oil and water leaks. (c) Overheating problems. (d) At times the engine overheats when the air conditioning unit is operating (e) The gear box required replacing. (f) There has been a major failure of the engine which now requires replacing. [8] All the above issues have been admitted by Toyota. Toyota say that the HiLux was attended to: (a) 27 October 2022. Air condition unit and oil leaks. (b) 22 and 23 November 2022. Oil leaks and replacement of gear box with a second- hand gear box. Gear box fitted on 1 December 2022. (c) 7 December 2022. Overheating. The air conditioning compressor was replaced by J&J Motors Biggenden and Bray purchased a new radiator cap. (d) 15 December 2022. Overheating. Toyota advised Bray that the AWN warranty would not cover the cost of the work that may be required to unblock the heater coil of the radiator. Toyota advised Bray to limit driving or not to drive the HiLux. (e) 13 January 2023. J&J Motors. Overheating and some noisy pulleys. Toyota recommended that Bray not drive the HiLux. (f) 27 February 2023. J&J Motors. Engine Noise and overheating. HiLux towed to Toyota. Toyota advised Bray that the engine required replacing. AWN would only pay $2,500 towards the cost. The balance of approximately $6,900 would have to be paid by Bray. [9] It is not clear to me if the HiLux is now situated at Bray’s house at Biggenden. What is clear is that the HiLux’s engine has not been replaced. Pursuant to the Australian Consumer Law, on 17 March 2023 Bray requested Toyota to refund the purchase price (plus other costs) of the HiLux to her and she would return the HiLux to Toyota. On 21 March 2023 Toyota rejected Bray’s request. -- 3 of 11 -- 4 [10] Bray says that since she purchased the HiLux, she has driven the HiLux on the highway and under normal driving conditions. She stated that when she had overheating problems, she always stopped to allow the HiLux to cool down before resuming her journey. The HiLux has caused her great inconvenience and stress. She has had to miss critical heath provider appointments in Bundaberg, the HiLux has been with Toyota or other repairers regularly, and now she cannot drive the vehicle at all and cannot afford the cost to replace the engine. [11] Bray was particularly concerned with her interaction with Toyota on 14 December 2022 regarding the overheating of the HiLux. Toyota advised Bray that the heater core in the dashboard may be blocked and should be replaced. The cost was approximately $3,000 and the AWN warranty would not cover this cost. Toyota advised Bray that she would have to pay the cost. Bray was particularly concerned that Toyota advised her that it would not guarantee that this was cause of the overheating problems. Therefore, Bray did not proceed with this work. [12] Toyota say that it has done everything possible to assist Bray. That is arrange for the air conditioning unit to be repaired and the gearbox to be replaced through the AWN warranty at no cost to Bray. Toyota says that the HiLux was outside the statutory warranty as outlined in Schedule 1 of the Motor Dealers and Chattel Auctioneers Act 2014 (Qld) (‘MDC Act’). That is Bray had travelled more than 1000 kilometres since purchase when Bray first reported a problem on 27 October 2022. [13] Toyota accepts that there has been a major failure of the engine and it must be replaced. Toyota quoted a figure of approximately $9,500 to replace the engine of the HiLux. [14] Toyota’s position is that it has done everything required of it under the law. Toyota says that it has complied with the statutory warranty under the MDC Act and it has assisted Bray to make claims under the AWN warranty. When I raised the issue of the Australian Consumer Law (‘ACL’) the representatives of Toyota did not seem to be fully acquainted with the provisions of the ACL. [15] I raised the fact with Toyota that Bray had purchased the HiLux in October 2022, and there had been significant issues (oil leaks, overheating, gear box and air conditioning unit failure) with the HiLux since purchase and then a major engine failure in February 2023. I suggested to Toyota that this history did not demonstrate that the HiLux was reliable. The representatives of Toyota maintained their position. That is with vehicles of this age and use, problems can arise at any time. AUSTRALIAN CONSUMER LAW [16] The relevant law that applies to this dispute is Schedule 2 of the ACL. For reference I set out: 54 Guarantee as to acceptable quality: (1) If: (a) a person supplies, in trade or commerce, goods to a consumer; and (b) the supply does not occur by way of sale by auction; there is a guarantee that the goods are of acceptable quality. (2) Goods are of acceptable quality if they are as: -- 4 of 11 -- 5 (a) fit for all the purposes for which goods of that kind are commonly supplied; and (b) acceptable in appearance and finish; and (c) free from defects; and (d) safe; and (e) durable; as a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods), would regard as acceptable having regard to the matters in subsection (3). (3) The matters for the purposes of subsection (2) are: (a) the nature of the goods; and (b) the price of the goods (if relevant); and (c) any statements made about the goods on any packaging or label on the goods; and (d) any representation made about the goods by the supplier or manufacturer of the goods; and (e) any other relevant circumstances relating to the supply of the goods. (4) If: (a) goods supplied to a consumer are not of acceptable quality; and (b) the only reason or reasons why they are not of acceptable quality were specifically drawn to the consumer’s attention before the consumer agreed to the supply; the goods are taken to be of acceptable quality. (5) If: (a) goods are displayed for sale or hire; and (b) the goods would not be of acceptable quality if they were supplied to a consumer; the reason or reasons why they are not of acceptable quality are taken, for the purposes of subsection (4), to have been specifically drawn to a consumer’s attention if those reasons were disclosed on a written notice that was displayed with the goods and that was transparent. (6) Goods do not fail to be of acceptable quality if: (a) the consumer to whom they are supplied causes them to become of unacceptable quality, or fails to take reasonable steps to prevent them from becoming of unacceptable quality; and (b) they are damaged by abnormal use. (7) Goods do not fail to be of acceptable quality if: -- 5 of 11 -- 6 (a) the consumer acquiring the goods examines them before the consumer agrees to the supply of the goods; and (b) the examination ought reasonably to have revealed that the goods were not of acceptable quality. 259 Action against suppliers of goods (1) A consumer may take action under this section if: (a) a person (the supplier) supplies, in trade or commerce, goods to the consumer; and (b) a guarantee that applies to the supply under Subdivision A of Division 1 of Part 3 2 (other than sections 58 and 59(1)) is not complied with. (2) If the failure to comply with the guarantee can be remedied and is not a major failure: (a) the consumer may require the supplier to remedy the failure within a reasonable time; or (b) if such a requirement is made of the supplier but the supplier refuses or fails to comply with the requirement, or fails to comply with the requirement within a reasonable time—the consumer may: (i) otherwise have the failure remedied and, by action against the supplier, recover all reasonable costs incurred by the consumer in having the failure so remedied; or (ii) subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection. (3) If the failure to comply with the guarantee cannot be remedied or is a major failure, the consumer may: (a) subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection; or (b) 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. (4) 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. (5) Subsection (4) does not apply if the failure to comply with the guarantee occurred only because of a cause independent of human control that occurred after the goods left the control of the supplier. (6) To avoid doubt, subsection (4) applies in addition to subsections (2) and (3). -- 6 of 11 -- 7 (7) The consumer may take action under this section whether or not the goods are in their original packaging. 260 When a failure to comply with a guarantee is a major failure (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: (a) the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or (b) the goods depart in one or more significant respects: (i) if they were supplied by description—from that description; or (ii) if they were supplied by reference to a sample or demonstration model—from that sample or demonstration model; or (c) the goods are substantially unfit for a purpose for which goods of the same kind are commonly supplied and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or (d) the goods are unfit for a disclosed purpose that was made known to: (i) the supplier of the goods; or (ii) a person by whom any prior negotiations or arrangements in relation to the acquisition of the goods were conducted or made; and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or (e) the goods are not of acceptable quality because they are unsafe. (2) A failure to comply with a guarantee referred to in section 259(1)(b) that applies to a supply of goods is also a major failure if: (a) the failure is one of 2 or more failures to comply with a guarantee referred to in section 259(1)(b) that apply to the supply; and (b) the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of those failures, taken as a whole. Note: The multiple failures do not need to relate to the same guarantee. (3) Subsection (2) applies regardless of whether the consumer has taken action under section 259 in relation to any of the failures. 263 Consequences of rejecting goods (1) This section applies if, under section 259, a consumer notifies a supplier of goods that the consumer rejects the goods. (2) The consumer must return the goods to the supplier unless: -- 7 of 11 -- 8 (a) the goods have already been returned to, or retrieved by, the supplier; or (b) the goods cannot be returned, removed or transported without significant cost to the consumer because of: (i) the nature of the failure to comply with the guarantee to which the rejection relates; or (ii) the size or height, or method of attachment, of the goods. (3) If subsection (2)(b) applies, the supplier must, within a reasonable time, collect the goods at the supplier’s expense. (4) The supplier must, in accordance with an election made by the consumer: (a) refund: (i) any money paid by the consumer for the goods; and (ii) an amount that is equal to the value of any other consideration provided by the consumer for the goods; or (b) replace the rejected goods with goods of the same type, and of similar value, if such goods are reasonably available to the supplier. (5) The supplier cannot satisfy subsection (4)(a) by permitting the consumer to acquire goods from the supplier. (6) If the property in the rejected goods had passed to the consumer before the rejection was notified, the property in those goods revests in the supplier on the notification of the rejection. [17] Pursuant to s 50A of the Fair Trading Act 1989 (Qld), the Tribunal is vested with jurisdiction in relation to motor vehicles in respect to certain actions under the ACL. The parties have not raised any jurisdiction issues regarding the application. [18] Section 54(1) of the ACL provides that where a person supplies goods in trade and commerce the goods are guaranteed to be of an acceptable quality. Section 54(2) and (3) of the ACL outline the definitions of “acceptable quality” and the context in which these definitions apply. [19] An analysis of the ACL and how it applies to vehicle claims is set out by A/Senior Member Howe in the matter of Grehan & Anor v WestPoint Autos Qld Pty Ltd [2022] QCATA 65 (‘Grehan’). In this decision the following points are made: (a) The requisite standard is set out in paragraphs 32 and 49. These paragraphs are outlined as follows: [32] The test set out in s 54 ACL is not whether it can be established that goods had a particular and identifiable defect as at date of supply. That may not be possible to establish, yet the goods may still be defective based on one of the s 54(2) factors not being satisfied, such as whether the goods are free from defects or durable. [49] The goods must be of acceptable quality as at time of supply but from the standpoint explained in Williams v Toyota Motor Corporation Australia Limited: -- 8 of 11 -- 9 The applicable standard of “acceptable quality” is to be determined by reference to what the “reasonable consumer” would regard as acceptable, having regard to the matters in s 54(3). The relevant enquiry is necessarily objective: Medtel Pty Ltd v Courtney [2003] FCAFC 151; (2003) 130 FCR 182 (at 199 [43] per Moore J, 205 [64] and 207 [72] per Branson J, with whom Jacobson J agreed at 209 [81]); Capic (at 265 [105]). … In determining whether the “reasonable consumer” would regard the goods as acceptable at the time of supply, one must assume that the construct is “fully acquainted with the state and condition of the goods (including any hidden defects of the goods)”: s 54(2) of the ACL; see also Medtel (at 205–206 [65]– [70]). [20] Pursuant to s 54 of the ACL, goods may still be defective based on one of the s 54(2) factors not being satisfied, such as whether the goods are free from defects or durable. [21] The question of the standard of acceptable quality was considered in the Federal Court in the matter of Australian Competition and Consumer Commission v Jayco Corporation Pty Ltd [2020] FCA 1672 where Wheelahan J said at paragraph 27: The standard of acceptable quality prescribed by s 54(2) is not absolute, or a standard of perfection. It is tempered by what a reasonable consumer would regard as acceptable having regard to the several matters in s 54(3). These matters render the standard of acceptable quality elastic, and context specific: Contract Energy Ltd v Jones [2009] 2 NZLR 830 at [95] (Miller J). The significance of the components of the guarantee of acceptable quality will therefore vary with the circumstances of each case. [22] If s 54 of the ACL has been breached, then it is necessary to determine if the failure to comply with the guarantee is a major failure. This issue is covered in paragraph 63 of Grehan in which it is set out: [63] By s 260 of the ACL: When a failure to comply with a guarantee is a major failure (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: (a) the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or … (c) the goods are substantially unfit for a purpose for which goods of the same kind are commonly supplied and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or … (e) the goods are not of acceptable quality because they are unsafe. [23] In these proceedings I find: (a) I accept the evidence of Bray. I found her to be open and honest. (b) At the point of sale, the HiLux was a 2005 model with a petrol engine and it had travelled approximately 350,000 kilometres. -- 9 of 11 -- 10 (c) Bray purchased the HiLux in October 2005 and problems with the HiLux began almost immediately after purchase. These issues included oil leaks, overheating of the engine, the air conditioning unit failed and was replaced, the gearbox failed and was replaced, and the engine failed and must be replaced. (d) Even if the engine had not failed in February 2023 Bray had no option other than to use and manage the HiLux for a considerable period whilst the HiLux had overheating issues. Some of Bray’s journeys during this period included highway travel. Bray says that at times she had to switch off the air conditioning unit to prevent the engine of the HiLux from overheating. This must have been extremely stressful for Bray. (e) The problems with the HiLux have caused significant disruption and cost to Bray. The HiLux has been with Toyota and J&J motors on at least 8 occasions. (f) All these issues occurred whilst Bray was using the HiLux for ordinary road use between October 2022 and February 2023. There is no evidence before the Tribunal to show that Bray contributed in any way to the problems with the HiLux. (g) The issues with the HiLux should have been evident to Toyota at the point of sale. After all, Toyota are specialists of this brand of vehicle. For example Bray referred to oil leaks at the point of sale. (h) Even if the issues were not clearly apparent at the point of sale, the authority in the matter of Grehan demonstrates that the guarantee in the ACL applies to problems that arise after the point of sale. When determining what is an acceptable standard of quality the test is: would the “reasonable consumer” purchase the HiLux if the “reasonable consumer” was fully acquainted with the state and condition of the goods (i.e. HiLux)? (i) Written on a window of the HiLux when Bray first inspected the HiLux before purchase was an advertisement with words that included “ever reliable Toyota wont (sic) let you down”. (j) Bray advised Wagstaff that she wanted a budget reliable motor vehicle to last 12 months and she advised Wagstaff why she needed the motor vehicle. Wagstaff recommended the HiLux to Bray. (k) Bray relied on the representations of Wagstaff and the advertisement on the window that the HiLux was reliable and would last 12 months. (l) No evidence was presented by either party about the price paid by Bray for the HiLux. I cannot say one way or another whether the amount paid by Bray for the HiLux was above or below the market value. [24] To determine if the HiLux was of acceptable quality I must consider all the factors outlined in s 54(3) of the ACL. That is the nature of the goods, the price paid, any statements made about the goods, any representation made about the goods and any other relevant factor. [25] Even though the HiLux had travelled 350,000 kilometres and it was an old vehicle, by taking into account what was said to Bray by Wagstaff, the vendor was a Toyota dealer, the possible oil leaks evident at the point of sale and the issues that arose with the HiLux so close to the point of sale, I find that Toyota breached the guarantee -- 10 of 11 -- 11 contained in s54 of the ACL. That is when Toyota sold the HiLux to Bray, the HiLux was not of acceptable quality. [26] Toyota have failed in their guarantee under s 54 of the ACL to supply a vehicle of acceptable quality. Toyota supplied a HiLux to Bray that was not free from defects and/or not durable. [27] A reasonable consumer fully acquainted with the state and condition of the HiLux (i.e. air conditioning failure, gearbox failure, overheating issues, oil leaks and total engine failure within 4 months of purchase) would not have purchased the HiLux. Therefore, I find that the failure of the guarantee by Toyota is a major failure as set out in s 260 of the ACL. [28] Bray has filed the application pursuant to s 259 of the ACL. Toyota have: (a) Refused to assist or pay for the replacement engine for HiLux. The AWN warranty will only cover approximately $2,500 towards the approximate cost of $9,500 of a replacement engine. (b) Toyota have rejected Bray’s request for a refund of the purchase price of the HiLux. [29] Pursuant to s 263 of the ACL I propose to make orders for Toyota to refund the purchase price of the HiLux to Bray. [30] The HiLux cannot be driven because of the engine failure. Bray is a person of limited means and resources. This was evident when Bray gave evidence. If the HiLux is situated at Biggenden, then it would be extremely difficult and costly for Bray to arrange for transport of the HiLux to Bundaberg. Accordingly, pursuant to s 263(2) and (3) of the ACL, if this the case, then I propose to make an order for Toyota to collect the HiLux from Bray at Biggenden. [31] In the application Bray has made a claim for ancillary costs of having the HiLux inspected, repaired or towed. The claim also includes Bray’s costs to make a claim in the Tribunal. Details of the costs and copies of receipts are annexed to the application. The total costs claimed by Bray are $1,012.54. These costs are directly attributable to Toyota’s failure to comply with its guarantee. Pursuant to s 259(4) a consumer (Bray) may claim these costs as damages because of the failure to comply with the guarantee if the consumer suffers loss or damage that flow from the failure and are reasonably foreseeable. I find that the costs of $1,012.54 claimed by Bray are reasonably foreseeable and should be paid by Toyota. -- 11 of 11 --