Crawford v Sunco Motors Pty Ltd [2021] QCAT 183

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Crawford v Sunco Motors Pty Ltd [2021] QCAT 183 PARTIES: WILLIAM CRAWFORD (applicant) v SUNCO MOTORS PTY LTD (respondent) APPLICATION NO/S: MVL162-20 MATTER TYPE: Motor vehicle matters DELIVERED ON: HEARING DATE: 14 May 2021 HEARD AT: Brisbane DECISION OF: Member Cranwell ORDERS: William Crawford is required to return the motor vehicle the subject of these proceedings to Sunco Motors Pty Ltd within 7 days of the date of these orders. Sunco Motors Pty Ltd is required to pay to William Crawford the amount of $45,773.78 within 28 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 guarantee a major failure – whether goods rejected during the rejection period – whether consumer entitled to refund Australian Consumer Law, s 2, 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 Campbell v Caravan & RV Central Pty Ltd t/as Avan New South Wales & FCA Australia Pty Ltd [2016] NSWCATCD 90 Cary Boyd v Agrison Pty Ltd [2014] VMC 23 Haisman v Drive (Aust) Pty Ltd [2020] QCAT 44 -- 1 of 11 -- 2 Medtel Pty Ltd v Courtney (2003) 130 FCR 182 Morphy v Beaufort Townsville Pty Ltd [2018] VCAT 1520 APPEARANCES & REPRESENTATION: Applicant: Self-represented Respondent: Self-represented REASONS FOR DECISION On 16 July 2020, Mr Crawford (‘the applicant’) filed an Application – Motor Vehicle Dispute with the Tribunal. The respondent is Sunco Motors Pty Ltd (‘the respondent’). The applicant is the owner of a 2017 Nissan Navara (‘the motor vehicle’). The applicant purchased the motor vehicle from the respondent on 17 August 2018 for $45,773.78. The contract included supply of a TJM canopy, carpet mats, towbar, smoked bonnet protector and roof racks. The applicant seeks relief under the Australian Consumer Law, which is Schedule 2 to the Competition and Consumer Act 2010 (Cth). The relief sought by the applicant is a refund. 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. Guarantee of acceptable quality 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 -- 2 of 11 -- 3 (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. The Macquarie Dictionary defines the word ‘defect’ to mean ‘a fault’ or ‘imperfection’. The Macquarie Dictionary defines ‘durable’ as ‘having the quality of lasting or enduring of or relating to goods which will be good for some time, as opposed to those intended to be used or consumed immediately’. In Morphy v Beaufort Townsville Pty Ltd [2018] VCAT 1520 at [72], the Victorian Civil and Administrative Tribunal stated: [T]he context of the section clearly requires that the question of durability be determined by having regard to how long a ‘reasonable consumer’ would expect the goods to last, taking into account the price paid, the nature of the goods and the representations made about the goods. In Campbell v Caravan & RV Central Pty Ltd t/as Avan New South Wales & FCA Australia Pty Ltd [2016] NSWCATCD 90 at [57], the New South Wales Civil and Administrative Tribunal stated: A reasonable consumer would also be entitled to expect that such a high cost item would be durable, being capable of safe and effective use over a number of years (or at least many thousands of kilometres). Evidence Both parties have filed a document headed ‘Complete Workshop Summary’. That document sets out nine occasions on which the applicant has returned the motor vehicle to the respondent as follows: 2/11/18 - 470km • 1000km service • Ticking noise on take off - no abnormal operation at time of inspection. -- 3 of 11 -- 4 • Canopy issue - was an aftermarket canopy, fitted at TJM at point of sale. • William charge $0 • Warranty charge $0 • First service account $90 5/12/18 - 1934km • Rust marks over vehicle, rust marks were cleaned off. • Ticking noise uphills under load - unable to fault at time of inspection. • Fit canopy - exchange canopy between sales, TJM and owner. • William charge $350 (Canopy difference) • Warranty charge $0 • Internal sales $3232.54 20/5/19 - 7746km • Ticking noise - unable to fault - no abnormal operation at time of inspection. • Clunk out of park (gear) - carried out transmission relearn procedure. • Oil leak from motor - replaced intercooler pipe. • William charge $0 • Warranty charge $310.29 16/8/19 - 10709km • Clunk out of park (gear) - advised we need the vehicle cold. • Ticking noise under load - more diagnosis time required. • 10k type service. • Info screen not booting up - carried out update. • William charge $300 • Warranty charge $43.18 30/9 /19 - 11273km • Clunk out of park (gear) - carried out relearn again - can't claim Warranty. -- 4 of 11 -- 5 • Ticking noise under load - still can't fault, as a precaution recoded injectors. • William charge $0 • Warranty charge $0 27/11/19 - 12659km • Went to owners house early morning to hear ticking noise - carried outinjector adaptive learn. • Ticking noise ongoing- carried out procedure from Nissan - Park Release Relearn • William charge $0 • Warranty charge $682.36 8/5/20 - 17871km • 20K service • Wheel alignment • William charge $523.95 • 2 Goodwill tyres fitted. 10/6/20 - 18902km • Investigate vibration 80-l00km - balanced all wheels. • Investigate ticking noise (Injectors) - rechecked cylinder adaption – no faults found • Oil leak front of motor - replaced front timing cover. • William charge $0 • Warranty charge $864.02 24/6/20 -19640km • Click in gear shifter - replaced shift lock • William charge $0 • Warranty charge $122.84 The applicant provided the following evidence in a written statement: (a) The TJM canopy fitted to the motor vehicle by the respondent was faulty. When the new canopy was fitted, there was swarf left on the roof. (b) On 2 November 2018, at 470 km, the applicant reported a ticking noise coming from the engine. This problem has been continually reported to the respondent and still exists. -- 5 of 11 -- 6 (c) After a few months, there was a clunking noise coming from the gearstick when moving from park into drive. This problem has also been continually reported and still exists. (d) On 16 August 2019, the applicant left the motor vehicle with the respondent for five weeks to rectify the clunking in the gearbox and the ticking issues. When the applicant collected the motor vehicle on 28 September 2019, both problems were still evident. (e) On 30 September 2019, the applicant returned the motor vehicle to the respondent. The respondent’s mechanic, Corey, heard the ticking noise and identified the problem as being probably the injectors. (f) On 27 November 2019, the ticking noise was heard when the respondent’s mechanic, Lloyd, came to his home. Lloyd advised that the four injectors were running incorrectly. (g) On 8 May 2020, the applicant presented the motor vehicle for a 20,000 km service. The front wheels were delivered out of alignment, and new tyres were fitted for free. (h) Within a few days of the 20,000 km service, the applicant noted vibration through the steering wheel of the motor vehicle and there was an oil leak. The applicant returned the motor vehicle on 10 June 2020, when the oil leak was fixed. A diagnosis was also made for a new gear shifter assembly. (i) On 24 June 2020, the motor vehicle was booked in to repair the gear shift assembly. (j) The ticking noise and the clunking sound from the gearbox still persist. The respondent has had the motor vehicle in its possession for a total of over six weeks without rectifying the issues. (k) The applicant attempted to resolve the issues with Nissan Australia before commencing proceedings. The applicant also provided a report from Hamish Rice of Buderim Mechanical dated 27 August 2020. Mr Rice relevantly stated: Oil residue on front left cross member – oil not cleaned from when filter replaced. Clunk noise from Park to reverse – suggest transmission specialist to carry out further diagnosis. Ticking noise from transfer case area – different to clunk from park to reverse. Front tyres worn on outside edges – Suggest wheel alignment Vibration just before 110 km/h – Suggest tyre balance Gear linkages appear to not have been removed -- 6 of 11 -- 7 All diff and transmission fillers appear to have not been removed – Paint marks from pre-delivery still line up – no marks on hex heads – oil levels have not been checked. Ticking noise was not evident during test drive – I would suggest that there is an issue with the plug/wiring at the rear of the fuel rail (pressure sensor). Have had a similar issue resolved on same year Navara by dealer previously. Spoke to Nissan dealer about issue – they have advised they have seen this issue previously and is known to them. This issue may be related to occasional lack of power. Buzzing noise from module – requires further investigation. The respondent provided a statement from Ivan Collins, its service manager. Mr Collins stated: Sunco Motors has been unable to fault the vehicle. As such, no entitlement to refund or replacement has arisen. The fault has not been able to be replicated at the dealership despite our best attempts. From our perspective, the vehicle has always been rectified at no cost to the customer and we believe the vehicle is in very good working order and not faulty. … Sunco have considered the independent reports supplied by William Crawford. The reports have been provided by non-specialist service providers (all makes and models) and are very speculative and non-conclusive. They do not state the vehicle is not fit for purposes. Sunshine Coast Nissan is a Nissan specialised dealer – we focus only on the Nissan brand. We suggest that the vehicle be reinspected with the involvement of Nissan Australia. I note that paragraph 13 of QCAT Practice Direction No 2 of 2019: ‘Motor Vehicle List’ states: [T]he applicant may be required to give access to the motor vehicle (the subject of the application) to an expert engaged by the respondent. No application was made by the respondent for access to the motor vehicle by a specialist Nissan service provider. Having reviewed the evidence, I make the following findings: (a) It is not in dispute that the TJM canopy supplied was faulty and required replacement. I note that supply of the canopy was included in the contract for the purchase of the motor vehicle, and the respondent is therefore the supplier of the canopy for the purposes of the definition in s 2 of the Australian Consumer Law. (b) It is also not in dispute that swarf was left on the roof of the motor vehicle when the canopy was replaced, which led to rust marks which required cleaning. (c) I accept that the motor vehicle has had two oil leaks, which were repaired on 20 May 2019 and 10 June 2020. -- 7 of 11 -- 8 (d) I accept that the motor vehicle was supplied with the wheels out of alignment. This finding is supported by the replacement of two tyres by the respondent without cost to the applicant. (e) I accept that the motor vehicle makes a clunk when the gear is moved out of park. A transmission relearn procedure was carried out on three separate occasions, before the shift lock was replaced. The existence of the clunk was also observed by Mr Rice. (f) I accept that the applicant has complained of a ticking noise on at least seven occasions, beginning on 2 November 2018 when the motor vehicle had completed 470 km. I accept that the ticking was heard by the respondent’s mechanics Corey and Lloyd, as this led to them recoding the injectors and an injector adaptive learn being carried out. Further, the respondent did not call any rebuttal evidence from Corey or Lloyd. While Mr Rice’s report was not definitive, I accept on the balance of probabilities that there is likely a pressure sensor issue. I note that Mr Rice made inquiries with a Nissan dealer in relation to this issue, and has experience of a similar problem being resolved on the same model vehicle. Moreover, no alternative explanation as to the cause of the ticking noise was put to me. I regard Mr Collins’ submission that Mr Rice’s evidence should carry little weight because he is not a specialised Nissan mechanic as self-serving, in that it was open to the respondent to obtain a report from a specialised Nissan mechanic but did not do so. It was reasonable for the applicant to obtain a report from an independent mechanic. (g) I accept that the motor vehicle was in the respondent’s possession for over six weeks in the first two years of the applicant’s ownership. I am prepared to infer that the issues relating to the ticking noise and the gears clunking were present at the time of supply, as they were reported shortly after supply. Based on the evidence before me, 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 defects which resulted in the motor vehicle being returned to the respondent on nine occasions in the first two years of the applicant’s ownership, and which resulted in the motor vehicle being in the respondent’s possession for over six weeks during that period; (b) the purchase price of $45,773.78; and (c) the motor vehicle being brand new, would not regard the motor vehicle as free from defects and durable. Remedies The issue in dispute between the parties is whether the defects set out above amount to a ‘major failure’. That term is defined in s 260 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 -- 8 of 11 -- 9 (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. It has been held that an accumulation of individually minor defects can be aggregated to amount to a major failure giving rise to a right to reject the goods. In Cary Boyd v Agrison Pty Ltd [2014] VMC 23 at [51], the Court held that: [D]espite the use of ‘a’, to suggest the singular, ‘a major failure’ might be constituted by a series of specific and individual defects which taken as a whole constitute one major failure. I also agree with this interpretation of s 260 of the ACL. I find the series of defects set out above, taken together, are such that a reasonable consumer fully acquainted with the nature and extent of the failure, would not have acquired the motor vehicle. I emphasise that my finding is based on the series of defects taken together. These include: (a) a faulty canopy and related rust marks; (b) two oil leaks; (c) front wheels supplied out of alignment; (d) a clunking noise with the gearbox, which has not been resolved; (e) a ticking noise from the engine, most likely related to the pressure sensor, which has not been resolved. As noted above, these issues resulted in the motor vehicle being returned to the respondent on nine occasions in the first two years of the applicant’s ownership, and which resulted in the motor vehicle being in the respondent’s possession for over six weeks during that period. 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: -- 9 of 11 -- 10 (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 (d) the amount of use to which it is reasonable for them to be put before such a failure becomes apparent. In Nesbit v Porter [2000] 2 NZLR 465 at [39], the New Zealand Court of Appeal held that the rejection period was one that: …suffices to enable the consumer to become fully acquainted with the nature of the defect, which, where the cause of breakage or malfunction is not apparent, the consumer can be expected to do by taking the goods to someone, usually or preferably the supplier, for inspection. In this context, therefore, a defect is not ‘apparent’ until its cause has been identified and the buyer knows what has to be done to fix it, and what that will cost; in other words, until the buyer is in a position to determine whether the defect is substantial. There is no evidence that the applicant sought a refund prior to the commencement of proceedings on 16 July 2020. However, the commencement of proceedings took place less than a month after the ninth occasion he returned the motor vehicle to the respondent (on 24 June 2020). The applicant had in the intervening period also attempted to resolve the issue with the manufacturer, Nissan Australia. I accept that, by the ninth occasion the applicant returned the motor vehicle to the respondent, it had become apparent that the issues with the motor vehicle were ongoing. In these circumstances, I am satisfied that the applicant rejected the motor vehicle within the rejection period. 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. I will give effect to the requirement in s 263(2) that the goods be returned by so ordering. Upon the return of the motor vehicle, the applicant will be entitled to a refund pursuant to s 263(4). Damages 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 damages in the amount of $800 for upgrading the rear tray with a rust preventative, non-slip spray. The applicant provided no evidence in -- 10 of 11 -- 11 support of his claim, such as a receipt or invoice. In those circumstances, I am unable to be satisfied that he has suffered loss or damage in this regard. Orders The orders of the Tribunal are: 1. The applicant is required to return the motor vehicle the subject of these proceedings to the respondent within 7 days of the date of these orders. 2. The respondent is required to pay to the applicant the amount of $45,773.78 within 28 days of the date of these orders. -- 11 of 11 --