Cooper v Reliance Business Investments Pty Ltd [2020] QCAT 410

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Cooper v Reliance Business Investments Pty Ltd [2020] QCAT 410 PARTIES: JASON COOPER (applicant) v RELIANCE BUSINESS INVESTMENTS PTY LTD (respondent) APPLICATION NO/S: MVL079-20 MATTER TYPE: Motor vehicle matters DELIVERED ON: 29 October 2020 HEARING DATE: 29 October 2020 HEARD AT: Brisbane DECISION OF: Member Cranwell ORDERS: Jason Cooper is required to return the motor vehicle the subject of these proceedings to Reliance Business Investments Pty Ltd within 7 days of the date of these orders. Reliance Business Investments Pty Ltd is required to pay to Jason Cooper the amount of $22,855 within 28 days of the date of these orders. Reliance Business Investments Pty Ltd is required to pay to Jason Cooper costs in the amount of $345.80 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 Competition and Consumer Act 2010 (Cth), Schedule 2 – Australian Consumer Law s 54, s 259, s 260, s 262, s 263 Fair Trading Act 1989 (Qld), s 50A -- 1 of 7 -- 2 Haisman v Drive (Aust) Pty Ltd [2020] QCAT 44 Medtel Pty Ltd v Courtney (2003) 130 FCR 182 Nesbit v Porter [2000] 2 NZLR 465 APPEARANCES & REPRESENTATION: Applicant: Self-represented Respondent: Self-represented REASONS FOR DECISION On 27 March 2020, Mr Cooper (‘the applicant’) filed an Application – Motor Vehicle Dispute with the Tribunal. The respondent is Reliance Business Investments Pty Ltd (‘the respondent’). The applicant is the owner of a 2010 Toyota Hilux (‘the motor vehicle’). The applicant purchased the motor vehicle from the respondent on 9 April 2019 for $22,800. 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 plus interest paid on his loan. 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 7 -- 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. Evidence The applicant gave the following evidence: (a) The applicant took possession of the motor vehicle on 18 April 2019. On the way home, the applicant noted that the motor vehicle’s brakes were hardly working. (b) The applicant returned the motor vehicle to the respondent on 23 April 2019 for repairs. (c) The applicant collected the motor vehicle from the respondent on 9 May 2019. (d) The applicant took the motor vehicle to the BP workshop at Wellington Point on 14 May 2019. The BP workshop identified multiple defects and deemed the motor vehicle unroadworthy. (e) The applicant then contacted a salesperson, Sam, from the respondent. He asked for the original safety certificate for the motor vehicle. Sam stated that the issues were just wear and tear which come with the age of the motor vehicle. Sam offered to get his mechanic to look at the motor vehicle, but the applicant refused. (f) The applicant then engaged a solicitor, and sought a refund. A copy of an invoice from the applicant’s solicitor was dated 26 June 2019. (g) On 16 July 2019, the applicant made a complaint to the Department of Transport and Main Roads. A defect notice was issued in respect of the motor vehicle on 2 October 2019. The following defects were identified: (i) the front passenger side wheel bearing was very loose; (ii) the driver side seat belt was frayed; (iii) a bolt was missing from the front passenger seat; -- 3 of 7 -- 4 (iv) the tyres protrude outside the guard; (v) the vehicle had no horn; (vi) the driver side brake lights did not work; (vii) the vehicle had no headlights; (viii) the vehicle had no parklights; (ix) the auxiliary driving lights operate on high beam only; (x) the spotlight LED was not working; (xi) the rear brake hose was too short and likely to snap; (xii) there was a bent bolt. The respondent provided no evidence. At the hearing, the respondent complained that it had not had an opportunity to inspect the motor vehicle. 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 for access to the motor vehicle was made by the respondent. In these circumstances, I accept the applicant’s evidence. Given the sequence of events outlined above, I am satisfied that the defects listed above were present at the time of supply of the motor vehicle. I place particular weight on the report from the BP workshop which was obtained five days after the applicant collected the motor vehicle following repairs by the respondent. 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 multiple defects which resulted in the motor vehicle being unroadworthy; and (b) the purchase price of $22,800, would not regard the motor vehicle as free from defects and durable. Remedies 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 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: -- 4 of 7 -- 5 (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. The test of whether there is a major failure for the purposes of s 260 and the test for whether goods are of acceptable quality for the purposes of s 54 both adopt a ‘reasonable consumer’ benchmark. For the reasons already given, I find that the multiple defects resulting in the motor vehicle being unroadworthy are such that a reasonable consumer fully acquainted with the nature and extent of the failure, would not have acquired the motor vehicle. 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 (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. -- 5 of 7 -- 6 The applicant instructed lawyers to seek a refund in June 2019. This was shortly after the report from the BP workshop was obtained, and around the time the applicant made a complaint to the Department of Transport and Main Roads. The applicant’s complaint ultimately resulted in no less than 12 defects being identified on 2 October 2019. 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 the costs of having the motor vehicle inspected. The applicant provided an invoice from the BP workshop at Wellington Point for $55. I consider that this expense was reasonable foreseeable, and is recoverable. The applicant also claimed the costs of financing the motor vehicle with Automotive Financial Services, which he stated was arranged by the respondent. The applicant provided a copy of the loan schedule, and stated that he was paying $140 per week. There is a live issue as to whether Automotive Financial Services is a linked credit provider for the purposes of s 278 and s 279 of the Australian Consumer Law, and whether damages for loss or damage are recoverable in circumstances where proceedings were not commenced jointly against the supplier and linked credit provider as required by s 279(2). Ultimately, it is unnecessary for me to resolve this issue as the applicant has not provided evidence as to the total amount that he has paid to Automotive Financial Services and the payout figure on the loan at the time of the hearing. In these circumstances, I am unable to quantify any damages that might be available to the applicant in this regard. Costs The applicant has claimed the filing fee of $345.80, as well as legal costs of $495. Section 50C of the Fair Trading Act 1989 (Qld) provides that the Tribunal may make a costs order against the respondent in the amount of the prescribed filing fee paid by the applicant. This power is subject to s 102(1) of the Queensland Civil and Administrative Tribunal Act 2009 (Qld), which provides that the Tribunal may make a costs order if the interests of justice require it. The applicant has been substantially successful in the proceedings. While I have not accepted his claims for damages, this has been for evidential reasons. The respondent’s failure to comply with the guarantee of acceptable quality in this case is -- 6 of 7 -- 7 particularly egregious. In these circumstances, I consider that it is in the interests of justice to order the respondent to pay the filing fee of $345.80. The applicant’s legal costs of $495 are not recoverable under s 50C. 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 $22,855 within 28 days of the date of these orders. 3. The respondent is required to pay the applicant’s costs of $345.80 within 28 days of these orders. -- 7 of 7 --