Clark v Paul Bushnell t/a Gold Coast Prestige Cars [2017] QCATA 111

CITATION: Clark v Paul Bushnell t/a Gold Coast Prestige Cars [2017] QCATA 111 PARTIES: Diane Clark (Appellant) V Paul Bushnell t/a Gold Coast Prestige Cars (Respondent) APPLICATION NUMBER: APL099-17 MATTER TYPE: Appeals HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Member Gordon DELIVERED ON: 11 October 2017 DELIVERED AT: Brisbane ORDERS MADE: Leave to appeal is refused. The appeal therefore fails. CATCHWORDS: APPEAL AND NEW TRIAL – PROCEDURE – QUEENSLAND – WHEN NO APPEAL LIES – leave to appeal – where minor civil dispute heard by Adjudicator – whether any reasonably arguable grounds of appeal SALE OF GOODS – SALE OF GOODS LEGISLATION – ACTIONS FOR BREACH OF CONTRACT – REMEDIES OF BUYER – OTHER REMEDIES – where car delivered with defects and returned to seller for repair – where repair not done properly – where buyer may then have rejected the car but disposed of it to a third party – whether damages limited to cost to repair defect Australian Consumer Law, s 259 s 260, s 262, s 263 -- 1 of 9 -- 2 APPEARANCES: This appeal was heard and determined on the papers pursuant to section 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld). REASONS FOR DECISION Sitting in the tribunal’s minor civil dispute jurisdiction, an Adjudicator heard a claim brought by Diane Clark against Gold Coast Prestige Cars, which is a trading name used by Paul Bushnell. Ms Clark now appeals against the Adjudicator’s decision in that case. The claim arose from Ms Clark’s purchase of a BMW 320i sedan from Mr Bushnell on 29 December 2015. It was then over 10 years old, being a 2005 model, and had an odometer reading of 212,277 kms. She agreed to pay $8,000 for the car. Ms Clark collected the car two days later after her loan application was completed. On 11 January 2016 Ms Clark had the car inspected by a mechanic. The mechanic found that it had a number of problems. There was an oil leak from the engine, wear on the brake disc rotors, perished front suspension bump stops, a blown headlamp bulb and a badly adjusted headlamp on the other side. On one of the wheels there was a wheel stud missing. Mr Bushnell agreed to arrange for the necessary repairs, and Ms Clark left the car with him on 23 January 2016. He took the car to a reputable repairer and Ms Clark collected it on 6 February. After these repairs were done, there was still an oil leak from the engine. On 15 February 2016 Ms Clark took the car to her mechanic again. Her mechanic noted that the leak was from the cover plate at the rear of the head assembly. The mechanic noted that the oil was leaking onto the exhaust pipes and because of this the car was unroadworthy (Ms Clark was told that this was because of the fire hazard). In the circumstances, Ms Clark did not wish to drive the car the 100 kms back to Mr Bushnell, so she took it home. As can be seen from an analysis of the law which applies below, what happened then is important. In her statement attached to the application, Ms Clark said that she contacted Gold Coast Prestige Cars and demanded that the vehicle be taken back by them as it was never fit for the purpose. There is an email from Mr Bushnell in the papers with the handwritten date of 8 February 2016. If the date is correct, it does show that Ms Clark rejected the car at that time, since in the email Mr Bushnell says he was unhappy with this course of action. Ms Clark then agreed with the loan company, who had a chattel mortgage on the car, that it would repossess the car. The car was repossessed on 11 March 2016. -- 2 of 9 -- 3 In her claim, Ms Clark sought from Mr Bushnell return of the whole purchase price of $8,000 which she had paid to him and other losses arising from the loan arrangement she had entered into. Since the claim was brought on Form 1, there was no response from Mr Bushnell (a response is not permitted to a Form 1 claim under the tribunal rules). Instead he gave his defence to the claim at the hearing. He said that the car was in fact in very good condition for its age as Ms Clark’s own mechanic had told her (as she had mentioned in an email). He said that all negotiations at the time of purchase were done through Ms Clark’s male friend (who was going to be using the car). He said he told the male friend about the repairs required, which is why the price was discounted from the displayed price of $9,999 to $8,000. He said that Ms Clark was simply looking for a way to return the car because she did not want it any more. At the hearing the Adjudicator heard evidence and argument from Ms Clark and Mr Bushnell. The hearing did not follow the usual structure – evidence, submissions, and judgment with reasons. Instead, the Adjudicator took a more inquisitorial approach, and discussed with the parties the view that he was taking about the case as it went along. Whilst in this appeal, this makes it more difficult to identify the Adjudicator’s reasoning, it is possible to follow this on a close reading of the transcript. As can be seen from the parties’ submissions on appeal, the parties understood the Adjudicator’s approach, and that is clearly of main importance. The Adjudicator decided that Ms Clark should have dealt with the continued oil leak either by returning the car to Mr Bushnell for further repair or having it fixed herself locally. He decided that she had “lost the asset” by permitting it to be repossessed by the loan company. In those circumstances, he decided that if she was entitled to damages they would only be small. He awarded her $500. In this appeal, Ms Clark says that this decision was wrong. She sets out the facts again in her appeal. She does not explain in what way the Adjudicator made an error in deciding the facts or as a matter of law. Identifying any such error would indeed be difficult to do bearing in mind the way the Adjudicator’s decision was structured. Because of this, in this appeal it would seem to be the correct approach to identify the law which applies to the case and then to fit the known facts to the law, and then to return to the decision made by the Adjudicator. The law which applies to claims of this sort is the Australian Consumer Law, which is in Schedule 2 to the Competition and Consumer Act 2010 (Cth).1 The Australian Consumer Law applies a guarantee in a supply of goods that the goods are of acceptable quality, and that includes that they are fit 1 Applied in Queensland by the Fair Trading Act 1989 (Qld). -- 3 of 9 -- 4 for the purpose for which goods of that kind are commonly supplied.2 It is provided that when deciding whether goods are of acceptable quality, it is necessary to take into account their nature and price, statements and representations made about them, and any other relevant circumstances. In this case, the age of the vehicle and its odometer reading would obviously be relevant. Also defects known at the time of sale would be relevant to the question of acceptable quality. If goods are supplied which are not of acceptable quality then this has the consequences set out in sections 259 to 263 of the Australian Consumer Law. The main provision governing remedy is in section 259: 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 3-2 (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 2 Section 54. -- 4 of 9 -- 5 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. It can be seen from these provisions that there are two main routes which apply in the case of defective goods. If the defect is irremediable or a major failure then section 259(3) applies and the buyer can either reject the goods or accept the goods and claim compensation because they are of lower value than the contract price. If the defect is not a major failure then section 259(2) applies and the buyer can require the seller to remedy the defect but if this is not done the buyer can reject the goods or have the defect repaired herself and claim the cost of this. Either way, under section 259(4) the buyer can claim reasonably foreseeable losses. A major failure is defined in section 260: 260 When a failure to comply with a guarantee is a major failure 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. -- 5 of 9 -- 6 Ms Clark’s claim was for the return of the $8,000 that she had paid to Mr Bushnell for the car. There was no suggestion of a total failure of consideration3 or a right to rescind the contract.4 This means that Ms Clark would only be entitled to return of the purchase money if she had a right to reject the car and did reject it. The legal consequence of rejecting goods is set out in section 263: 263 Consequences of rejecting goods (1) This section applies if, under section 259, a consumer notifies a supplier of goods that the consumer rejects the goods. (2) The consumer must return the goods to the supplier unless: (a) the goods have already been returned to, or retrieved by, the supplier; or (b) the goods cannot be returned, removed or transported without significant cost to the consumer because of: (i) the nature of the failure to comply with the guarantee to which the rejection relates; or (ii) the size or height, or method of attachment, of the goods. (3) If subsection (2)(b) applies, the supplier must, within a reasonable time, collect the goods at the supplier’s expense. (4) The supplier must, in accordance with an election made by the consumer: (a) refund: (i) any money paid by the consumer for the goods; and (ii) an amount that is equal to the value of any other consideration provided by the consumer for the goods; or (b) replace the rejected goods with goods of the same type, and of similar value, if such goods are reasonably available to the supplier. (5) The supplier cannot satisfy subsection (4)(a) by permitting the consumer to acquire goods from the supplier. (6) If the property in the rejected goods had passed to the consumer before the rejection was notified, the property in those goods revests in the supplier on the notification of the rejection. One important consequence of a buyer rejecting goods (if entitled to do so) is that under section 263(6) the property in the goods reverts to the seller. Under the remaining provisions, either the buyer must return the goods to 3 This would be if a buyer had received nothing of value for their outlay. 4 For example if the buyer had relied upon a fraudulent misrepresentation about the goods when deciding to purchase them. -- 6 of 9 -- 7 the seller or if this cannot be done without significant cost to the buyer, the seller must collect the goods. What is not permitted under section 263 is what happened here, where Ms Clark disposed of the car to a third party, by permitting the loan company to repossess it. Since the Adjudicator made an award of $500 it is to be presumed that he found that the car failed to comply with the guarantee as to acceptable quality when it was initially collected. To find the correct route for Ms Clark’s remedy it is necessary to trace through the relevant provisions in the Australian Consumer Law. Which route is taken through those provisions depends on two things: (a) whether the failure to comply with the guarantee was a major failure; and (b) whether at any time Ms Clark had a right to reject the car and whether she did so. If the defects in the car amounted to a major failure then Ms Clark’s remedy was under section 259(3). Ms Clark would be entitled to choose between rejecting the goods or accepting them and claiming the reduced value of the car because of the defects. In this type of case, the reduced value would normally be assessed as the cost to repair. As mentioned above however, she may have rejected the car under this provision. I consider below the consequence if this did happen. If the defects in the car did not amount to a major failure, then section 259(2) would be engaged. Ms Clark could require the seller to repair the defects, which is what happened. But if the seller failed to comply or failed to comply within a reasonable time, then she could reject the car or accept the car and have the repair done herself and claim the cost of this. She did not take the latter course because she disposed of the car before the oil leak defect was repaired. As mentioned above however, she may have rejected the car under this provision. I consider below the consequence if this did happen. Either way, she could also claim damages under section 259(4). However, such damages would be limited to those caused by the defects. Any losses arising from the early termination of the loan agreement were not caused by the defects, but were instead caused by Ms Clark’s decision to terminate the loan agreement. The cost to repair the oil leak was however, a loss caused by the defects. Ms Clark was not claiming from Mr Bushnell any other incidental losses arising from the defects. So far in the analysis, Ms Clark’s remedy was in damages as assessed by the cost to repair the oil leak in the car. But what if she was entitled to reject the car and did so? In that event section 263 would be engaged. She -- 7 of 9 -- 8 would cease to be owner of the car because its ownership would revert to Mr Bushnell. Leaving aside the question of whether or not she was obliged to return the car or he was obliged to collect it, either way she was bailee of the car (that is to say she was looking after it). By permitting the loan company to repossess it she was in breach of her duty to Mr Bushnell as bailee. When rejecting the car, although she may have elected to have her purchase money returned to her, by disposing of the car to a third party the amount she would be entitled to recover from Mr Bushnell would need to be offset by Mr Bushnell’s loss. His loss was the value of the car. The best evidence of the value of the car in a condition which satisfied the guarantee as to acceptable quality was the contract price of $8,000. However, at the time it was repossessed, it had a remaining defect (the oil leak) which reduced its value. When calculating Ms Clark’s remedy therefore, the amount to offset against the purchase price of $8,000 to which she was entitled under this route is $8,000 less the cost to repair the oil leak. The net result is the same as the straightforward damages claim considered above. The only amount Mr Clark could recover would be the cost to repair the oil leak. It follows that Ms Clark’s remedy on all of above routes is the same. It was the cost to repair the oil leak. She was not entitled to the return of the purchase price. The Adjudicator reached this same conclusion in a remarkably efficient way. He was right to approach the case on the basis that he did. The Adjudicator heard evidence about the cost to repair the oil leak. Mr Bushnell said it would cost only $200.5 Ms Clark however, said that her mechanic had told her it would be “thousands of dollars”.6 Mr Bushnell responded that thousands of dollars was a ridiculous statement because the leak was from a little metal plate which had a rubber O-ring inside it.7 Properly prepared for the claim, Ms Clark would have had a quote for the cost of this repair, but she had disposed of the car without doing the repair, and so had not dealt with the problem in that way. It is not suggested in this appeal that the Adjudicator could have, or should have, adjourned the matter to enable Ms Clark to obtain better evidence about this. Neither side requested this at the hearing. Instead, the Adjudicator decided to deal with the matter on the evidence available on the day. He cannot be criticised for this decision, particularly bearing in mind that one of the statutory objects of the tribunal is to deal with matters in a way that is “accessible, fair, just, economical, informal and quick”.8 The Adjudicator was faced therefore with the difference between the parties of $200 and “thousands of dollars”. He settled on $500. This decision 5 Transcript 1-13, line 30, 1-23, line 4. 6 Transcript 1-15, line 35, 1-22, line 4. 7 Transcript 1-22, line 14. 8 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 3(b). -- 8 of 9 -- 9 cannot be impugned given the vagueness of the evidence before him and the need for him to reach a conclusion. Appeals in minor civil disputes can only be brought with the leave of the Appeal Tribunal. Such leave will only be given if there is an arguable case on appeal. Such appeals are only arguable if the decision maker is in error in law, or has made a factual finding which could not be made on the evidence. This is not the case here. Leave to appeal is refused and the appeal therefore fails. -- 9 of 9 --