De Jong v OzCar Pty Ltd [2024] QCAT 44

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: De Jong v OzCar Pty Ltd [2024] QCAT 44 PARTIES: KAREN DE JONG (applicant) v OZCAR PTY LTD (respondent) APPLICATION NO/S: MVL110-22 MATTER TYPE: Motor vehicle matter DELIVERED ON: 30 January 2024 HEARING DATE: 10 November 2023 HEARD AT: Brisbane DECISION OF: Member Bertelsen ORDERS: OzCar Pty Ltd is required to collect the vehicle the subject of these proceedings from Karen De Jong’s residential address nominated in the initiating application within 14 days of the date of these orders. OzCar Pty Ltd is required to pay Karen De Jong the sum of $34,348.00 within 21 days of the date of these orders. CATCHWORDS: TRADE AND COMMERCE – COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – GUARANTEES, CONDITIONS AND WARRANTIES IN CONSUMER TRANSACTIONS – GUARANTEES, CONDITIONS AND WARRANTIES – whether motor vehicle of acceptable quality – whether failure to comply with consumer guarantees a major failure – whether goods rejected during rejection period – whether consumer entitled to refund Australian Consumer Law, s 54, s 55, s 236, s 259, s 262 Competition and Consumer Act 2010 (Cth), Schedule 2 Fair Trading Act 1989 (Qld), s 50A Kalbar Financial Services Pty Ltd v LSH Auto (Brisbane) Pty Ltd trading as Mercedes-Benz Brisbane [2020] QCAT 346 -- 1 of 5 -- 2 APPEARANCES & REPRESENTATION: Applicant: Karen De Jong Respondent: Heather Squire, Customer Relations Manager REASONS FOR DECISION [1] By application filed at Bundaberg on the 25 May 2022 the Applicant Karen De Jong (‘Ms De Jong’) seeks a refund of $36,697.00 being a $33,990.00 purchase price and additional expenses in respect of her purchase of a 2015 Volkswagen Tiguan motor vehicle (‘the vehicle’) on 3 November 2021 from OzCar Pty Ltd (‘OzCar’, ‘the dealer’). The vehicle was assertedly defective, misdescribed, and not fit for purpose. [2] Ms De Jong had possession of the vehicle for about a week prior to purchase on the 3 November 2021, the purpose of which was to drive the vehicle and discern if there were any issues with the vehicle that needed to be attended to prior to purchase. Ms De Jong said she compiled a handwritten list which was handed to the person “Roni” (or some suchlike name), the manager at OzCar at the time of purchase. Roni endorsed the handwritten list with the words “book in roughly Thursday next week with our mechanic”. It was signed, it appears, Roni Tawall (or some suchlike name). The list read: Timing belt – logbook doesn’t show it has been done (the word rebook appears adjacent to the words timing belt in heavy ink). Logbook – oil, plugs and filter not done. Engine oil only good for 5000k and filter 10,000k. Oil is black. Vibration when you first take off. Past experience says it could be pump in transmission. Slight miss. Logbook says plugs weren’t done. Knock in front end when you brake – strut? Grinding when driving on drivers’ side. Leather on back seat close to deteriorating. Hesitation when you first take off. [3] Ms De Jong said the vehicle was presented that following Thursday (that being probably 11 November 2021). She got the vehicle back about a week later, but nothing was fixed. [4] On 29 November 2021 Ms De Jong’s solicitors, Finemore Walters & Story, wrote to OzCar asserting serious mechanical defects rendering the vehicle unsafe to drive and demanding a refund. On 2 December 2021 OzCar wrote to those solicitors stating it was unable to cancel the contract and that the statutory warranty covered repairs, if found, that needed to be carried out. [5] On 7 December 2021 OzCar wrote again to Finemore Walters & Story confirming the vehicle was booked in at Volkswagen Bundaberg (‘VW’) on 9 December 2021 to have three items rectified: (1) Blowing blue smoke on start-up. (2) Vibration when driving (3) Fuel economy 36 litres to 100 klms A health check whilst at VW, at OzCar [sic] cost, was also requested. [6] With reference to the handwritten list of defects Ms Squire, Customer Relations Manager at OzCar, said there were additional items on the list that were maintenance -- 2 of 5 -- 3 items and not warranty items. But Ms De Jong said the manager Roni signed the whole list, compiled the week prior to purchase, and that the purchase contract was signed on the basis that he, Roni, would “fix all the things on the list”. Ms Squire stated that VW examined the vehicle on about 9 December 2021 but could not identify any defects as such. VW performed an extended road test but was unable to confirm any abnormal vibration or shudder. As for smoke evident on starting such would require a cold start to confirm. A basic inspection revealed some minor cracks in rear couplings. [7] Ms De Jong collected the vehicle from VW and returned it to OzCar the day following 9 December 2021 or thereabouts. The vehicle remained with OzCar until collected by Ms De Jong just before Christmas 2021. Ms Squire said she was happy to have the vehicle taken back to VW to have any warrantable issues addressed. [8] Subsequently, Ms De Jong arranged for an RACQ master check which was carried out on the 15 February 2022 by Bundaberg Canelanders Auto Service Centre in its capacity as an RACQ inspection station. In the detailed report dated the same day issues requiring attention before the vehicles continued use were identified: Left rear brake lights lens damaged. Both front driving lights non-compliant – incorrectly fitted and wired. Rear wiper blades do not clean and shudder. Front windscreen chipped and pitted. Wear ridges on both front brake discs. Rear tail shafts – rear coupling worn deteriorated and split – rear joint worn. Engine oil leaks oil filler cap area. [9] In addition, other defects were noted including an audible diesel knock, drive train operation noises, wheel bearing noises, audible knocking noises from suspension, shock absorbers ineffective, engine sump guard bolts missing, front and rear differential oil low and dirty (burnt and discoloured), valve train noises, and oil in the cooling system expansion tank. The report found that the vehicle required major engine repairs. [10] On 18 February 2022 Finemore Walters & Story wrote to OzCar enclosing the RACQ report identifying issues requiring rectification before continued use and noting that VW failed to notice such defects. Rectification of defects and provision of a loan car was requested. Ms Squire said she asked Ms De Jong to bring the vehicle back consequent on the RACQ Canelanders report to see if there were any roadworthy/warrantable items missed. She added Volkswagen vehicles were always taken to VW. But the vehicle was not taken back to OzCar or VW again after the RACQ report of 15 February 2022. Ms De Jong said she would not go back to OzCar because they did not fix anything. She said a lot of time was spent in November and December 2021 going back to OzCar. By way of example, she quoted the issue of a broken vent to be replaced. She had conversations with OzCar head office, and it was arranged for a replacement vent to be posted to her. She said it was agreed it would be installed. However, she still has it. It is still in its box at her home. -- 3 of 5 -- 4 [11] On 25 February 2022 Finemore Walters & Story wrote to OzCar affording OzCar the opportunity to resolve the matter by authorising repairs with Canelanders Auto Service Centre by 3 March 2022. That did not eventuate. [12] In providing a quote for repairs at $13,148.05 dated 9 March 2022 Canelanders Auto Service Centre noted additionally that the valve train issue required further investigation. An engine strip-down was recommended to diagnose involving some sixteen hours labour or a replacement engine (not available as after-market), the suggested cost then of a replacement engine being $16,000.00 to $20,000.00 plus fitting to be ordered ex Sydney or Perth. In finality it was noted that given the above expense the vehicle was uneconomical to repair. In the intervening period to date there has ceased to be an OzCar dealership in Bundaberg. Conclusions [13] The purchase of the vehicle took place on 3 November 2021. The Tribunal finds the purchase was conditional on attending to those items referred to in the handwritten list compiled in the week prior to purchase. In that regard the Tribunal accepts the evidence placed before the Tribunal that the handwritten list was given to the person Roni and that all the items on that list would be attended to as part of the sale of the vehicle. The Tribunal accepts Ms De Jong’s evidence to the effect that nothing on that list was fixed. [14] Subsequently on 29 November 2021 Ms De Jong’s solicitors asserted serious defects rendering the vehicle unsafe to drive and demanding a refund. That constituted rejection of the vehicle by Ms De Jong.1 On about 9 December 2021 the vehicle was returned to OzCar but actually ended up going to VW for defects to be rectified. Those defects as stated by OzCar were blowing blue smoke on start-up, vibration when driving, and fuel economy of 36 litres to 100 kilometres. OzCar also requested VW to conduct a health check at OzCar cost. VW could not apparently conduct a blue smoke test which required a cold start and could not perforce of a road test confirm any abnormal shudder. There were no findings to speak of regarding fuel economy. This basic inspection revealed some minor cracks in rear couplings. [15] The items in the initial handwritten list it seems were never addressed and the three items to be addressed by VW though investigated did not result in anything determinative. There was no evidence of any remedial work carried out by VW. [16] The vehicle was, perhaps unsurprisingly, taken by Ms De Jong to the RACQ inspection station at Canelanders Auto Service Centre. An RACQ master check was conducted. Numerous defects already referred to were identified with the RACQ master check report of 15 February 2022 stating the vehicle required major engine repairs. [17] The Canelanders Auto Service Centre quote for repairs of 9 March 2022 is confirmatory of extensive repairs required to bring the vehicle up to a reasonable safety standard. There seemed to be on the part of OzCar a preoccupation with the statutory warranty under the Motor Dealers and Chattel Auctioneers Act 2014 (Qld). But the initiating application relies on the Australian Consumer Law (‘ACL’) as well. 1 Competition and Consumer Act 2010 (Cth), Sch 2 - Australian Consumer Law, s 262. -- 4 of 5 -- 5 There was a reasonable expectation here that the vehicle would be of acceptable quality and fit for purpose. Accepting the RACQ report this vehicle was neither. [18] A multiplicity of minor faults can be construed as a major fault under the ACL.2 Here the multiplicity of faults, minor and likely major as well, is identified within four months of date of supply. There is certainly major fault associated with this vehicle to such a degree that it is more than likely uneconomical to repair. Additionally, here it can reasonably be stated that the vehicle would not have been purchased by Ms De Jong if she was fully acquainted with the nature and extent of failures associated with the vehicle.3 That is clear from the disappointment and frustration expressed by Ms De Jong in her evidence before the Tribunal. [19] In summary, the Tribunal finds that Ms De Jong is entitled to a refund of the purchase price of the vehicle $33,990.00, together with application fee of $358.00, for a total of $34,348.00, with the vehicle to be placed back in the possession of OzCar. Orders 1. OzCar Pty Ltd is required to collect the vehicle the subject of these proceedings from Karen De Jong’s residential address nominated in the initiating application within 14 days of the date of these orders. 2. OzCar Pty Ltd is required to pay Karen De Jong the sum of $34,348.00 within 21 days of date of these orders. 2 Kalbar Financial Services Pty Ltd v LSH Auto (Brisbane) Pty Ltd trading as Mercedes-Benz Brisbane [2020] QCAT 346. 3 Competition and Consumer Act 2010 (Cth), Sch 2 - Australian Consumer Law, s 260. -- 5 of 5 --