Emerson v Auto Centre Townsville [2023] QCAT 488

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Kay-Louise Emerson v Auto Centre Townsville [2023] QCAT 488 PARTIES: KAY-LOUISE EMERSON (applicant) v AUTO CENTRE TOWNSVILLE (First respondent) APPLICATION NO/S: MVL107-22 MATTER TYPE: Motor vehicle matter DELIVERED ON: 5 December 2023 HEARING DATE: 3 November 2023 HEARD AT: Brisbane DECISION OF: Member Poteri ORDERS: The Application of Kay-Louise Emerson filed 30 May 2022 is dismissed. CATCHWORDS: ADMINISTRATIVE TRIBUNAL – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – TRADE AND COMMERCE – PURCHASE OF MOTOR VEHICLE – CONSUMER PROTECTION LEGISLATION – GUARANTEES AND WARRANTIES – ABILITY TO RECTIFY DEFECT - Where the Applicant has purchased a new vehicle and is claiming that there are defects with the vehicle – where the Applicant is claiming a refund of the purchase price from the supplier because the supplier has breached the guarantee contained in the Australian Consumer Law (Cth) and supplied goods that are not of acceptable quality – where the Applicant is claiming that the Respondent’s failure to comply with the guarantee is a major failure – where the Respondent is claiming that any breach of the guarantee is not a major failure and that any failure to comply can be remedied. Motor Dealers and Chattel Auctioneers Act 2014 (Qld) Fair Trading Act 2014 (Qld), s 50A Competition and Consumer Act 2010 (Cth), s 54, s 259, s 260, Schedule 2. -- 1 of 9 -- APPEARANCES & REPRESENTATION: Applicant: Self-Represented Respondent: Self-Represented REASONS FOR DECISION [1] This matter was heard by me via remote conferencing on 3 November 2023. The applicant, Kay-Louise Emerson (‘Emerson’) appeared herself. The Respondent, Figg Automotive Pty Ltd trading as Autocentre Townsville (‘Autocentre’), was represented by Warren Figg (‘Figg’), the managing director of Autocentre. [2] This dispute relates to the purchase of a new Musso XLV Ultimate Luxury (‘Musso’) by Emerson from Autocentre for the sum of $49,835.00 on 17 January 2022. A copy of the contract (‘Contract’) is attached to the application. [3] Pursuant to s50A of the Fair Trading Act 1989 (Qld) the Tribunal is vested with jurisdiction in relation to motor vehicle claims made under Schedule 2 of the Competition and Consumer Act 2010 (Cth). Schedule 2 contains the provisions of the Australian Consumer Law (‘ACL’). [4] One of the complicating factors of this matter is that Emerson lives in Winton and Autocentre’s premises are situated in Townsville. This creates a logistical problem when the Musso is required to be serviced or repaired by Autocentre. I note that there are no special conditions in the Contract or assertions from Emerson which deal directly with this issue. Normally it is a matter for the purchaser to return the vehicle to the vendor for repairs to be carried out by the vendor. No evidence regarding this issue was presented at the hearing by Emerson or Autocentre. [5] Emerson complains about 3 problems with the Musso: (a) The steering in the vehicle pulls sharply to the left and this is dangerous when driving the Musso. Emerson says that this has caused uneven wear on the front tyres. (b) Protective plastic fins on the underside of the vehicle have been damaged or torn away. (c) There is a constant banging sound which emanates from the engine bay. This problem has been identified as a problematic pulley in the air conditioning system of the Musso. [6] There is substantial material and evidence on the file relating to complaints made by Emerson regarding the above issues. Suffice to say that Emerson made complaints about the Musso from the time that she purchased the Musso. [7] Evidence was provided at the hearing that the Musso has travelled some 30,000 kilometres since Emerson purchased the Musso. However, Emerson says the Musso is not fit for purpose as Autocentre advised her at the point of purchase that the Musso could handle the conditions in or around Winton. Emerson says that the Musso is not durable and cannot withstand the conditions of some of the roads around Winton. -- 2 of 9 -- [8] Emerson now says that as Autocentre have breached their guarantee under the Australian Consumer Law then she should be entitled to a full refund of the purchase price from Autocentre. [9] Autocentre say that the Musso was sold with a 7-year manufacturer’s warranty. Autocentre say that any problems with the vehicle can and will be rectified under this warranty at no cost to Emerson. [10] Autocentre say that the Musso is fit for purpose and that the defects can be rectified, and Autocentre is prepared to rectify any problems with the Musso. Autocentre assert that the damage to plastic fins may have been caused by the way the Musso was driven on unsealed roads or off road. Autocentre are not prepared to refund the purchase price to Emerson in return for the Musso. [11] In February 2022 arrangements were made for the problems with the Musso to be attended to by Central Motors of Winton. Autocentre paid for this work. [12] It also appears that a wheel alignment was carried out at Bridgestone at Longreach in February 2022. [13] Emerson says that the problems with the Musso persist, and they have not been rectified. [14] I note from the statement of an employee of Autocentre, Pryce Hickey (‘Pryce’), dated 13 February 2023 and filed in the Tribunal on 14 February 2023, that Autocentre have made attempts to have Emerson return the Musso to the Autocentre’s premises in Townsville so Autocentre can inspect the Musso and carry out any necessary repairs to the Musso. Pryce says that he offered to pay for the fuel to travel to Townsville and the accommodation costs of Emerson. This offer was rejected by Emerson’s partner. [15] On 12 October 2022 the Tribunal made an order for the Musso to be independently assessed by an expert. This inspection took place in Cairns and was carried out by Robert Haigh (‘Haigh’) on 30 November 2022. A copy of Haigh’s report was filed in the Tribunal on 19 December 2022. [16] Haigh gave evidence at the hearing. Haigh’s expertise was questioned by Figg. Haigh stated that he had substantial expertise as a motor mechanic as well as working in service centres for large vehicle manufacturers. Figg accepted that Haig had the expertise to give expert evidence in these proceedings. [17] Haigh stated that there were issues with the Musso. [18] Regarding the vehicle veering to the left, Haigh was of the view that a proper wheel alignment carried out by a specialist would resolve this problem. He stated that the front tyres would have to be replaced because of the uneven wear. [19] Regarding the noise emanating from the engine, Haigh believed the problem was related to the belt on the air conditioning unit compressor. Haigh recommends that the unit should be inspected to further understand the problem and for the problem to be resolved, with a possible replacement of the belt. [20] Regarding the undertray fins, Haigh believed that they are not durable, and they should be replaced. Haigh says that the plastic is very brittle and the Musso is low to the ground, but he conceded that this is a design issue. -- 3 of 9 -- [21] Haigh was asked if the defects could be described as “major defects.” Haigh responded that he did not consider them to be major defects and he was of the view that the defects could be rectified. [22] Pryce says in his statement that the Musso was taken for an inspection at Central Motors, Winton. Pryce states that after this inspection he spoke with Mr Lenton of Central Motors who confirmed that the air conditioner issue was resolved and that although the Musso did pull slightly to the left, Mr Lenton considered that this was fairly normal and that a wheel alignment may resolve the problem. [23] At one stage in the proceedings, I suggested to the parties that they may wish to conduct “without prejudice” discussions outside the hearing room in an endeavour to resolve this dispute. After these discussions, the parties informed me that they were not able to reach any resolution. Figg did inform me that he had made an offer to Emerson which he was prepared to repeat in open proceedings. His offer was: (a) Autocentre would rectify, at their cost, all the problems with the Musso at their premises at Townsville. (b) Autocentre would arrange, at their cost, for a wheel alignment/suspension specialist, such as Fulcrum, to undertake a full wheel alignment on the Musso. Further, Autocentre would fit two new front tyres to the Musso in conjunction with the wheel alignment. (c) Autocentre would undertake at their cost a full service of the air conditioner and belt system and rectify any problems to eliminate the noise issue. (d) Autocentre would pay Emerson $300 for fuel to travel to Townsville and the sum of $320 ($160 per night) for accommodation costs whilst Emerson was in Townsville. (e) Autocentre would reimburse Emerson the sum of $1,194 for her costs to date. (f) Figg also stated that there is an aftermarket protective metal plate available for the Musso which would protect the undertray plastic fins. The cost of this plate is $650. Figg stated that he was advised by Pryce that he informed Emerson’s partner of the protective plate at the point of sale. Emerson stated at the hearing that she had no knowledge of this conversation. [24] Emerson rejected this offer and stated that she wanted a full refund. [25] Emerson has not produced any independent evidence from any experts to support her claim. Therefore, in deciding this matter I must rely on Emerson’s own evidence, Autocentre’s evidence and the evidence of Haigh. [26] The law contained in Schedule 1 of the Motor Dealers and Chattel Auctioneers Act 2014 (Qld) relating to warranties has no application in these proceedings because Emerson has not followed the procedures set out in this legislation. [27] The law that is applicable to these proceedings are the provisions of the ACL. The relevant sections of ACL are ss 54, 259 and 260. These provisions are set out: 54 Guarantee as to acceptable quality (1) If: (a) a person supplies, in trade or commerce, goods to a consumer; and -- 4 of 9 -- (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: (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 -- 5 of 9 -- (b) they are damaged by abnormal use. (7) Goods do not fail to be of acceptable quality if: (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 32 (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). (7) The consumer may take action under this section whether or not the goods are in their original packaging. -- 6 of 9 -- 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 failure. [28] There is no doubt that s 54 of the ACL applies to these proceedings. In selling the Musso to Emerson, Autocentre are guaranteeing that the Musso is of acceptable quality. [29] Emerson is claiming that the Musso is not of acceptable quality, and she is seeking a refund of the purchase price from Autocentre under s 259(3) of the ACL. Under s 259(3) of the ACL, Emerson must show that the problems with the Musso are a “major failure” of Autocentre to comply with the guarantee. [30] Are the problems with Musso a “failure to comply with the guarantee that cannot be remedied or is a major failure” under the ACL? See s 259(3) of the ACL. S 260 of the ACL sets out the provisions that apply “when a failure to comply with a guarantee is a major failure.” -- 7 of 9 -- [31] The facts of this matter show that the defects with the Musso may be a failure to comply with a guarantee. I make these comments: (a) The evidence shows that the defects can be remedied. This is confirmed by Haigh, the independent expert. (b) S 260(a). Haigh stated that the steering and noise issues were not serious and could be rectified. Further Haigh stated the plastic fin protection could be replaced. He did state that Musso’s fins were slightly lower than other four-wheel drive vehicles and the plastic protection was not particularly strong but he went on to state that this was a design issue with the Musso, not a defect. Emerson would be aware of this clearance issue when she inspected the Musso before she agreed to purchase the Musso. Figg gave evidence that there is an aftermarket metal protector kit available for $650 which gives further protection to the underside of the vehicle. Also, Figg stated that Autocentre had sold a large number of Mussos to persons in rural areas and Autocentre had not received complaints about the capabilities of the Musso. I find that a reasonable consumer would have acquired the Musso even if the consumer was fully acquainted with the nature and extent of the failure, taken as a whole. (c) S 260(c). The evidence shows that Emerson has travelled some 30,000 kilometres since she purchased the Musso. Emerson complains that she is not able to use the Musso on certain roads around Winton and this inability has caused the damage to the plastic protection. Emerson has not given any detailed evidence of the roads and her use of the Musso which she claims is unfit for purpose. Certainly, the steering and noise issues can be rectified, and these problems would have been present even when the Musso was being used on sealed roads. Further, the issue with the plastic protection can be remedied by installing an aftermarket metal protection plate. I also point out the word “substantially” in this section. Therefore, I find that the Musso was not substantially unfit for the purpose for which goods of the same nature are commonly sold. Notwithstanding this finding I note that the problems with the Musso can beremedied in a reasonable time. (d) S 260(e). This provision relates to the issue of safety. Haigh has given evidence that the issue with the steering can be remedied by a wheel alignment specialist. Further Bruce Lenton of Central Motors Winton provided a report, which is attachment 13, annexed to Pryce’s statement dated 13 February 2023 and filed in the Tribunal on 14 February 2023. In the report Lenton states that he found no faults with the steering or suspension, and he did notice a “slight pull to the left when driving”. This shows me that there are not serious issues with the steering to make it unsafe. I also note that the vehicle has travelled over 30,000 kilometres. I find that the Musso was of acceptable quality because it was not unsafe. (e) Ss 260(b) and (d). These provisions do not apply to the facts and circumstances of this matter. Emerson has given evidence about representations that were made at the point of sale by representatives of Autocentre. However, these representations are very general. I repeat my previous observations that Emerson has not presented any detailed evidence or expert evidence to support her claim. -- 8 of 9 -- [32] Therefore, I find that Autocentre supplied the Musso to Emerson with defects or defects that may have developed later. Further, I find that Autocentre failed to comply with a guarantee of supplying goods of acceptable quality, but this failure is not a major failure of the guarantee as outlined in s 260 of the ACL. Therefore, Emerson’s application must be dismissed. [33] Emerson could have sought relief and orders under s 259 of ACL where a customer can require the supplier to remedy the failure within a reasonable time, and there are remedies under s 259(2)(b) of the ACL if the supplier fails or refuses to remedy the defects. [34] As mentioned previously Emerson does have rights under the manufacturer’s warranty for any defects with the Musso to be rectified by Autocentre. The Musso should be returned to Autocentre to give Autocentre the opportunity to rectify the defects. [35] I was under the impression when I was hearing this matter that Emerson was under some personal and financial pressures. This dispute would not have been easy for Emerson to deal with because of these issues and the distance between Townsville and Winton. [36] As a sign of good faith, Autocentre may be prepared to assist Emerson in travelling to Townsville to have the defects dealt with by Autocentre. -- 9 of 9 --