Dunstan v James Frizelle’s Automotive Group Pty Ltd t/as Audi Centre Gold Coast [2021] QCAT 416

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Dunstan v James Frizelle’s Automotive Group Pty Ltd t/as Audi Centre Gold Coast [2021] QCAT 416 PARTIES: PRISCILLA DUNSTAN (applicant) V JAMES FRIZELLE’S AUTOMOTIVE GROUP PTY LTD TRADING AS AUDI CENTRE GOLD COAST (respondent) APPLICATION NO/S: MVL089-21 MATTER TYPE: Motor vehicle matter DELIVERED ON: 30 November 2021 HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Member Cranwell ORDERS: James Frizelle’s Automotive Group Pty Ltd trading as Audi Centre Gold Coast is required to pay Priscilla Dunstan the amount of $38,413.99 within 14 days of the date of this order. 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 was of acceptable quality – whether failure remedied within a reasonable time – whether goods rejected during the rejection period – whether consumer entitled to refund Australian Consumer Law, s 3, s 54, s 259, s 260, s 262, s 263 Competition and Consumer Act 2010 (Cth), Schedule 2 Fair Trading Act 1989 (Qld), s 50A Haisman v Drive (Aust) Pty Ltd [2020] QCAT 44 Medtel Pty Ltd v Courtney (2003) 130 FCR 182 REPRESENTATION: Applicant: Self-represented -- 1 of 6 -- 2 Respondent: Self-represented APPEARANCES: 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 On 10 May 2021, Priscilla Dunstan (‘the applicant’) filed an application – motor vehicle dispute with the Tribunal. The respondent is James Frizelle’s Automotive Group Pty Ltd trading as Audi Centre Gold Coast (‘the respondent’). The applicant is the owner of a 2018 Audi Q3 (‘the motor vehicle’). The applicant entered into a contract with the respondent on 6 June 2019 to purchase the motor vehicle for $37,500. The applicant seeks relief under the Australian Consumer Law, which is schedule 2 to the Competition and Consumer Act 2010 (Cth). Section 50A of the Fair Trading Act 1989 (Qld) vests the Tribunal with jurisdiction in relation to motor vehicles in respect of certain actions under the Australian Consumer Law. The relief sought by the applicant is a refund plus damages. Consumer guarantees Section 54(1) of the Australian Consumer Law provides that, where a person supplies goods in trade or commerce, the goods are guaranteed to be of ‘acceptable quality’. The time at which goods are to be of acceptable quality is the time at which the goods are supplied to the consumer: Medtel Pty Ltd v Courtney (2003) 130 FCR 182 at [64] and [70]. However, information 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. Sections 54(2) and (3) of the Australian Consumer Law define acceptable quality as follows: (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 -- 2 of 6 -- 3 (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. Evidence The applicant gave the following evidence: (a) The applicant specifically wanted a vehicle with a satellite navigation system installed. She undertook some research, and found that the Audi Q3 met all her requirements. (b) On 5 June 2019, she located a 2018 Audi Q3 ex-demonstration model on the caresales.com.au website. The vehicle was listed as having a satellite navigation system. (c) On 6 June 2019, the applicant inspected the motor vehicle at the respondent’s premises. She asked the salesperson about the satellite navigation system, and was told that it just needed a chip to be installed. The salesperson told the applicant that ‘it comes free with your Audi membership’. (d) When the applicant signed the contract, she noticed that the odometer reading was double what had been advertised. She was told that ‘sometimes they just reuse old ads rather than re-do them’. The applicant clarified that the motor vehicle had a satellite navigation system, and was told that everything else is right. (e) On 18 June 2019, the motor vehicle was delivered to the applicant. The satellite navigation system did not operate. (f) On 2 July 2019, the applicant returned the motor vehicle to the respondent to have the satellite navigation system fixed. (g) On 4 July 2019, the applicant picked up the motor vehicle. The screen had been changed. (h) The applicant noticed significant problems with the satellite navigation system. The system was interfering with other systems, such as the rear camera. The applicant exchanged a number of text messages with the respondent between 9 July 2019 and 11 July 2019, and sent a further message on 18 July 2019. (i) On 30 July 2019, after waiting 10 days for a response to her last message, the applicant took the motor vehicle to Audi Indooroopilly. She was told that the reason the satellite navigation system was not working was that it was not an ‘Audi approved navigation system for the car Q3’. (j) The applicant was told by Audi Indooroopilly that her warranty would not cover repair of the satellite navigation system. She was also told that her other issues, including the reversing camera not working, were also not covered because of the unapproved satellite navigation system. (k) The applicant texted and called the respondent again. -- 3 of 6 -- 4 (l) On 14 July 2019, the applicant contacted the manufacturer and left a message. (m) On 15 August 2019, the applicant filed a verbal complaint form with the manufacturer. (n) On 27 August 2019, the manufacturer advised the applicant that ‘the company who fitted the system will rectify while the car is at Springwood’. The message made no sense to the applicant, who emailed the manufacturer back. She received no reply. (o) The applicant engaged a solicitor, who also entered into correspondence with the manufacturer and respondent. (p) On 12 February 2020, the applicant returned the motor vehicle to the respondent to be fixed. The respondent refused to fix the motor vehicle, and kept the vehicle. (q) The applicant contacted the Australian Competition and Consumer Commission (‘ACCC’), and heard back from them on 26 August 2020. (r) The applicant and her solicitor also contacted the respondent and the manufacturer. (s) On 11 October 2020, the applicant requested a refund from the respondent. The respondent did not file any evidence. In these circumstances, I accept the applicant’s evidence in its entirety. I find that a reasonable consumer fully acquainted with the state of the motor vehicle at the time of purchase, particularly having regard to: (a) the presence of faults with the satellite navigation system in circumstances where the motor vehicle was advertised as having a satellite navigation system; and (b) the purchase price of $37,500, would not regard the motor vehicle as free from defects. Accordingly, I find that the respondent failed to comply with the guarantee of acceptable quality. Remedies against supplier The remedy available to the consumer against the supplier depends in the first instance on whether the failure is a ‘major failure’. That term is defined in s 260(1) of the Australian Consumer Law to relevantly mean: (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 -- 4 of 6 -- 5 (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. There is no expert evidence before me to suggest that repair and/or replacement of the satellite navigation system occasions any particular difficulties, or that it cannot take place within a reasonable time. In those circumstances, I am not satisfied that there is a major failure for the purposes of the test contained in s 260. In particular, I do not accept that a reasonable consumer would not have acquired the vehicle. The remedies for a failure to comply with a guarantee that is not a major failure are set out in s 259(2) of the Australian Consumer Law: (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. In the present case, the respondent has had possession of the motor vehicle since 12 February 2020 for the purpose of remedying the failure in this case. On any view, a ‘reasonable time’ has since elapsed without the failure being remedied. In these circumstances, the applicant was entitled to reject the motor vehicle subject to section 262. In order to obtain a refund, the consumer is required to reject within the ‘rejection period’. That term is defined in s 262(2) of the Australian Consumer Law to mean: (2) The rejection period for goods is the period from the time of the supply of the goods to the consumer within which it would be reasonable to expect the relevant failure to comply with a guarantee referred to in section 259(1)(b) to become apparent having regard to: (a) the type of goods; and (b) the use to which a consumer is likely to put them; and (c) the length of time for which it is reasonable for them to be used; and -- 5 of 6 -- 6 (d) the amount of use to which it is reasonable for them to be put before such a failure becomes apparent. The applicant identified the defects with the satellite navigation system immediately after purchase. She repeatedly agitated this issue with both the respondent and the manufacturer. The applicant engaged lawyers to assist her, and also complained to the ACCC. When it became apparent to her that the motor vehicle was not going to be repaired and returned to her, she proceeded to reject the motor vehicle on 11 October 2020. In these circumstances, I am satisfied that the rejection took place before the rejection period had ended, In Haisman v Drive (Aust) Pty Ltd [2020] QCAT 44 at [24], I found that the Tribunal has jurisdiction to make an order requiring the supplier to pay to the consumer a stated amount of money, namely the amount of the refund payable under s 263(4)(a). In this case, the applicant has notified the respondent that the goods have been rejected in accordance with s 263(1) of the Australian Consumer Law, and the motor vehicle has been returned to the respondent in accordance with s 263(2). The applicant will be entitled to a refund of $37,500 pursuant to s 263(4). For completeness, I note that the applicant has claimed that the purchase price of the motor vehicle was $38,295. This is inconsistent with the contract, and the applicant has provided no evidence to support this alternate amount. Damages As noted above, the Tribunal is vested with jurisdiction in respect of actions under s 259(4) of the Australian Consumer Law, which provides: 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. The applicant has claimed $913.99 for insurance costs. The receipt provided by the applicant indicates that this amount was paid on 15 July 2020, being at a time when the motor vehicle was in the respondent’s possession. I consider that it was both foreseeable and prudent that the applicant would take out insurance on the motor vehicle, and note that this amount was paid during a period when the motor vehicle was in the respondent’s possession and unable to be used by the applicant. In these circumstances, I will allow the claim for damages. Order The order of the Tribunal is: 1. The respondent is required to pay to the applicant the amount of $38,413.99 within 14 days of the date of these orders. -- 6 of 6 --