Evans v Egerton Cars Pty Ltd [2023] QCAT 507

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: PARTIES: Evans v Egerton Cars Pty Ltd [2023] QCAT 507 ROSS ADRIAN JOHN EVANS (applicant) v EGERTON CARS PTY LTD (respondent) APPLICATION NO/S: MVL001-23 MATTER TYPE: Motor vehicle matter DELIVERED ON: 22 December 2023 HEARING DATE: 23 November 2023 HEARD AT: Brisbane DECISION OF: Member Deane ORDERS: Egerton Cars Pty Ltd is to pay Ross Adrian John Evans $28,000 by 4:00pm on 22 January 2024. Ross Adrian John Evans is to return the Audi Q7 wagon to Egerton Cars Pty Ltd not later than 14 days of receiving the payment in accordance with order 1. CATCHWORDS: TRADE AND COMMERCE – COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – GUARANTEES, CONDITIONS AND WARRANTIES IN CONSUMER TRANSACTIONS – GUARANTEES CONDITIONS AND WARRANTIES – where buyer purchased used vehicle from motor dealer – whether defects covered by statutory warranty – whether defects repaired or whether motor dealer breached the statutory warranty Motor Dealers and Chattel Auctioneers Act 2014 (Qld), Schedule 1 s 1, s 2, s 3B, s 4, s 7, s 8, s 9, s 11, s 12, s 13, s 14, s 15, s 18 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 102 Motor Dealers and Chattel Auctioneers Regulation 2014 (Qld), s 47 Boers v Blue Star Auto Sales Pty Ltd & Anor [2021] QCAT 17 -- 1 of 8 -- 2 APPEARANCES & REPRESENTATION: Applicant: Self- represented Respondent: L Chen, sales manager REASONS FOR DECISION [1] On 22 July 2022 Mr Evans purchased an Audi Q7 wagon (the Car) from Egerton Cars Pty Ltd. He says the Car was defective and that despite returning the Car to Egerton Cars they failed to repair it. He notes that although the contract to purchase the Car sets out a road worthy certificate reference number Egerton Cars did not provide him with a copy. [2] In this proceeding Mr Evans seeks an order for $28,000, being a refund for the Car. [3] Mr Evans indicated in his application1 that he relied upon section 14 of schedule 1 to the Motor Dealers and Chattel Auctioneers Act 2014 (Qld) (the Act). [4] Neither party was legally represented in the proceedings. Egerton Cars had some legal assistance as its ‘statement of evidence’, which was in fact a one-page submission, was signed by a solicitor on its behalf.2 [5] During the hearing neither party addressed me on how they contended the law applied to the facts. [6] Schedule 1 to the Act is titled statutory warranty provisions. There is no dispute that the Car is a Class B warranted vehicle because it had been built in 2010, so had a built date of more than 10 years before the purchase.3 The statutory warranty scheme operates subject to some exceptions, which do not arise in this case, as set out below. [7] The warrantor is the licensee who owns the vehicle immediately before the buyer takes possession under the contract for purchase.4 There is no dispute that Egerton Cars is the warrantor. [8] The warrantor warrants that the vehicle is free from defects at the time of taking possession and for the warranty period and that defects reported during the warranty period will be repaired by the warrantor free of charge.5 [9] If the buyer believes the vehicle has a defect covered by the warranty the buyer must give a written defect notice to the warrantor and deliver the vehicle to the warrantor for repair.6 The warrantor must advise the buyer in writing whether the warrantor accepts or refuses to accept that the defect is covered by the statutory warranty. If the warrantor fails to do so within five business days, the warrantor is taken to accept that the defect is covered by the statutory warranty.7 1 Filed 22 December 2022 (the Application). 2 Exhibit 3. 3 The Act, Schedule 1 s 3B. 4 Ibid, s 1 (definition of warrantor). 5 Ibid, s 7(1). 6 Ibid, s 9 (1). 7 Ibid, s 11. -- 2 of 8 -- 3 [10] If the warrantor accepts that the defect is covered by the warranty the warrantor must repair it within 14 days.8 [11] A warranted vehicle has a “defect” if a part of the vehicle does not perform its intended function or if a part of the vehicle has deteriorated to the extent where it cannot reasonably be relied on to perform its intended function.9 [12] Certain types of defects are excluded from the statutory warranty.10 These are: (a) a defect in the vehicle’s paintwork or upholstery that should have been apparent on any reasonable inspection of the vehicle before the time of taking possession; (b) a defect after the time of taking possession arising from or incidental to any accidental damage to the vehicle; or arising from the buyer’s misuse or negligence; or in an accessory to the vehicle not fitted to the vehicle when sold to the buyer; (c) a defect in the vehicle’s fitted airbag; (d) a defect in the vehicle’s installed audio entertainment device; (e) a defect in any of the following— (i) a tyre or tyre tube; (ii) a battery; (iii) a light other than a warning light or a turn indicator light used as a hazard light; (iv) a radiator hose; (v) a radio aerial or other aerial; (vi) spark plugs; (vii) distributor points; (viii) wiper rubbers; (ix) oil or an oil filter; (x) a fuel filter or air filter; (xi) a hose for a heater unit; and (f) for a class B warranted vehicle, a defect in the vehicle’s air-conditioning system. [13] The statutory warranty period starts at the time of the buyer taking possession and ends when the first of the following happens or is reached (a) the vehicle travels 1,000 kilometres or (b) 5:00 pm one month after the date of taking position.11 However the warranty period is extended for each day or part of the day that the vehicle is being repaired by the warrantor under the statutory warranty.12 8 Ibid, s 12. 9 Ibid, s 2. 10 Ibid, s 8; Motor Dealers and Chattel Auctioneers Regulation 2014 (Qld), s 47. 11 The Act, Schedule 1, s 4(2). 12 Ibid, s 4 (3). -- 3 of 8 -- 4 [14] The buyer may apply to the tribunal for an order if the warrantor has accepted that the defect is covered by the statutory warranty but has failed to repair the defect or failed to repair it such that the defective part can be reasonably relied on to perform its intended function.13 [15] The orders that the tribunal may make under Schedule 1 section 15 of the Act include an order requiring a party to the proceeding to pay a stated amount to a stated person14 and an order requiring a party to the proceeding to return the warranted vehicle if it is in the party's possession or control to a stated person.15 The tribunal may also make an order combining two or more of the orders mentioned in section 15 provided that the orders do not exceed a value of $100,000. [16] Egerton Cars filed three documents in this proceeding, which consisted of a one-page submission and two documents from an RACQ examiner.16 There is no statement of evidence filed by Egerton Cars disputing Mr Evans’ evidence. [17] Mr Evans attached to the Application17 and to a statement of evidence18 several documents including contemporaneous emails, photographs of the warning lights displayed including those which indicated emission control system issues and gearbox malfunction and the Audi Centre Gold Coast inspection report dated 12 September 2022 (Audi Report). [18] Mr Evans’ evidence is, and in the absence of specific contradictory evidence I accept, that: (a) on 23 July, the day after he purchased the Car, issues arose. Engine-transmission warning lights displayed, and the Car lost power steering. He took a photograph of the emission control system and gearbox warning lights;19 (b) on 26 July 2022 Egerton Cars collected the Car for repair (The warranty period extends by 1 day, on my calculation, from 22 August to 23 August); (c) on 27 July 2022 he collected the Car and the engine warning light came on later that day (The warranty period extends by 2 days from 22 August to 24 August); (d) he returned the Car on 28 July 2022 for repair and while driving to Egerton Cars the Car again lost power and could not be driven at more than 50 km/hour (The warranty period extends by 3 days from 22 August to 25 August); (e) on 11 August 2022 he collected the Car and the engine warning lights came on before he got home (The warranty period extends by 17 days from 22 August to 8 September); (f) he returned the Car again on 12 August 2022 and while driving to Egerton Cars the Car again lost power (The warranty period extends by 18 days from 22 August to 9 September); 13 Ibid, s 13, s 14. 14 Ibid, s 15(d). 15 Ibid, s 15(g). 16 Exhibit 3. 17 Exhibit 1. 18 Exhibit 2. 19 Ibid, attachment A5. -- 4 of 8 -- 5 (g) on 15 August 2022 by email, he called on Egerton Cars to perform timely repairs or to keep the Car and give him a refund. Egerton Cars replied that they were continuing to repair the Car; (h) on 8 September 2022 the Car was returned to him (The warranty period extends by 44 days from 22 August to 5 October); (i) on 12 September 2022 he took the Car to Audi Centre Gold Coast for an inspection. They provided a written report of the inspection dated 12 September 2022 (Audi Report)20 which identifies significant issues with the Car, which require repair. The report quotes $15,084.36 to repair the items. He paid $235 for the inspection and the report. The report identifies issues with: (i) the cooling system – that the wrong radiator coolant had been used; (ii) engine components – noting that it should not have passed a road worthy inspection, noting ‘the upper sump leaking injectors on both sides of engine’ and “found injectors to be leaking causing vehicle to lose power”; (iii) transmission and drive line – gear selector cover needs replacement. (j) engine fumes were leaking into the passenger cabin. He discovered a hole in the gear selector cover under the Car, which was allowing fumes to pass into the cabin, which raised safety concerns; (k) on 15 September 2022 he delivered the Car to Egerton Cars and provided written notice of the defects.21 He told Egerton Cars that they should keep the Car and requested a full refund. He took a photograph of the emission control system and gearbox warning lights;22 (l) on 26 September 2022 he took a photograph of the emission control system and gearbox warning lights;23 (m) Subsequently Egerton Cars told him that it had repaired the Car and put the Car out on the street. He reluctantly collected it out of a concern that he would be responsible for infringements if the Car was left on the street. He says he found a roadworthy certificate dated 29 September 2022 in the Car; (n) he has not had the Car inspected since he was forced to collect it, but the Car continued to have the same issues from the time he purchased it, including after he reluctantly collected the Car until it stopped working altogether in May 2023. On 10 October 2022 he took a photograph of the emission control system gearbox warning light.24 On 13 December 2022 he took a photograph of the emission control system warning light.25 On 12 May 2023 he took a photograph of the emission control system warning light.26 20 Exhibit 1, attachment F1-F6. 21 Exhibit 1, attachment I1, F1-F6. 22 Exhibit 2, attachment A6. 23 Ibid, attachment A7. 24 Ibid, attachment A8. 25 Ibid, attachment A9. 26 Ibid, attachment A12. -- 5 of 8 -- 6 [19] He therefore submits that the defects identified in the Audi Report had not been repaired in breach of the statutory warranty. [20] I am satisfied that Mr Evans gave adequate written notice of the defects to Egerton Cars within the warranty period. [21] By 15 September 2022, on my calculation, the warranty period had been extended to 5 October 2022. There is no evidence before me that the Car had travelled more than 1,000 kilometres by this time. Egerton Cars conceded that the warranty period had not expired prior to Mr Evans returning the Car on 15 September 2022 along with the Audi Report. [22] Egerton Cars point to the contractual cooling off period. It contends that Mr Evans could have cancelled the contract when the initial issue arose on 23 July 2022. The contract provided for a cooling off period starting at 8.43am on Friday 22 July 2022 and ending at 5 pm on Saturday 23 July 2022. The contract provided a limited right to cancel the contract during the cooling off period provided that the buyer’s possession of the vehicle during the cooling off period was only to have the vehicle independently inspected or to test drive the vehicle.27 There is no evidence that Mr Evans took possession of the Car for this limited purpose. Even if cooling off rights were available to Mr Evans, I am not satisfied that failure to seek to exercise rights to cancel the contract when the initial issues occurred impacts Mr Evans’ rights to enforce the statutory warranty. [23] At the hearing Egerton Cars’ representative was unable to clarify or explain the written submission filed 16 May 2023.28 As I understand it Egerton Cars concede that some of the issues with the Car about which Mr Evans complained were defects within the meaning of the statutory warranty provisions. It says that any defects in the Car were repaired by it on the occasions when Mr Evans returned the Car to it so there is no breach of statutory warranty. It contended that some of the issues were not defects but did not specify which issue(s) were claimed not to be defects. At the hearing Egerton Cars’ representative was unable to identify which issue(s) were claimed to not be defects. [24] There is no evidence before me that Egerton Cars gave notice that it refused to accept that the issues complained of by Mr Evans including the issues set out in the Audi Report were defects, which were covered by the statutory warranty. I find that Egerton Cars is taken to have accepted that the defects identified by Mr Evans in his correspondence with Egerton Cars and, in particular, as outlined in the Audi Report are covered by the statutory warranty.29 [25] There is evidence before me that a previous owner of the Car had been informed in 2017 that the Car had engine issues i.e. a leaking rear main seal, which required removal and replacement of the rear main seal and three injector seals.30 I find that this issue is consistent with the engine issue identified in the Audi Report. I accept Mr Evans’ evidence that he did not find this document until after he purchased the Car. 27 Exhibit 1, attachment A5. 28 Exhibit 3.’statement of evidence’. 29 The Act, Schedule 1, s 11(3). 30 Exhibit 1, attachment C1 and C2. -- 6 of 8 -- 7 [26] I am satisfied that the issues identified by Mr Evans in his correspondence with Egerton Cars and, in particular, as outlined in the Audi Report constituted defects for the purposes of the statutory warranty as they are not issues excluded from the statutory warranty. [27] Initially they did not render the Car undrivable, but they did prevent it from performing as intended because it is not a normal expectation of the functioning of a car that hazard lights come on and the Car loses power. [28] Egerton Cars has not produced the initial road worthy certificate in these proceedings nor explained why it did not put such a document into evidence if it existed at the time of sale. I infer from the failure to produce this evidence and based on the evidence referred to at [25] that the Car was not free of defects at the time Mr Evans purchased it. [29] Egerton Cars did not file any statement of evidence setting out the repair work said to be undertaken by it. It says that from the RACQ examiner’s documents dated 29 September 2022 it should be inferred that Egerton Cars had repaired any defects. [30] Neither the Audi Report mechanic nor the RACQ examiner were available to confirm their written evidence nor to be questioned. There is no evidence before me that Egerton Cars provided the RACQ examiner with the Audi Report setting out the issues with the Car nor is there any evidence that the RACQ examiner was informed of the issues identified in the Audi Report. [31] As stated earlier in these reasons, I accept Mr Evans’ evidence that the issues with the Car have remained consistent since he purchased the Car, including after he reluctantly collected the Car until it stopped working altogether in May 2023. [32] Egerton Cars say they repaired the defects, but Mr Evans’ evidence is, and I accept, that any repairs carried out were not adequate because the same issues persisted. I find that it failed to repair the defects or failed to repair the Car such that the defective parts can be reasonably relied on to perform their intended function. I find that Egerton Cars failed to adequately repair the defects within 14 days, which gave Mr Evans the right to apply to the tribunal for orders against Egerton Cars. What orders should be made? [33] Mr Evans claims a refund because of Egerton Cars’ failure to repair the defects under the statutory warranty, which has resulted in the Car being undrivable and therefore of no value to him. [34] The Tribunal has previously observed that section 15 of Schedule 1 of the Act: does not describe the bounds of what amounts can properly be ordered under it. However, of course, it is relevant to have regard to the purpose of the statutory warranty scheme, as any sums ordered would have to bear a proper relationship to that purpose. The evident purpose of the scheme is to ensure the repair of particular defects.… Orders for payment, then, should relate to, or at least be closely connected with, the repair of a defect covered under the scheme or the warrantor’s failure to repair such a defect. 31 [35] The undisputed evidence is that Mr Evans paid $28,000 for the Car. 31 Boers v Blue Star Auto Sales Pty Ltd & Anor [2021] QCAT 17, [38]. -- 7 of 8 -- 8 [36] I am satisfied that a refund is appropriate in circumstances where the independent estimated costs of repair were more than 53% of the purchase price, Egerton Cars had at least four opportunities to repair the defects and it failed to do so. [37] Mr Evans is to return the Car to Egerton Cars upon receiving the refund or within 14 days of receipt of the refund. Costs [38] I make no order as to costs. The Tribunal may make a costs order under section 102 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) but only for payment of any prescribed filing fee paid.32 The Tribunal’s file shows that the filing fee was waived. 32 The Act, Schedule 1, s 18. -- 8 of 8 --