Cicchini v Barbizon Pty Ltd [2014] QCAT 675

CITATION: Cicchini v Barbizon Pty Ltd [2014] QCAT 675 PARTIES: Concetta Cicchini (Applicant) v Barbizon Pty Ltd ACN 062 850 819 (Respondent) APPLICATION NUMBER: MCD903/13 MATTER TYPE: Other minor civil dispute matters HEARING DATE: 22 September 2014 HEARD AT: Brisbane DECISION OF: Adjudicator Davern DELIVERED ON: 23 December 2014 DELIVERED AT: Brisbane ORDERS MADE: The Application is Dismissed CATCHWORDS: Minor Civil Dispute – Sale of Goods – acceptable quality – motor vehicle – right to reject the goods – reduction of claim to come within jurisdiction Australian Consumer Law ss 54, 259 – 262 Queensland Civil and Administrative Tribunal Rules 2009 rule 83 Russo v Belcar Pty Ltd ACN 967 286 081 & Anor [2011] SASCFC 151 Medtel Pty Ltd v Courtney [2003] FCAFC 151 Effem Foods Ltd v Nicholls [2004] NSWCA 332 Graanhandel T Vink BV v European Grain and Shipping Ltd [1989] 2 Lloyd’s Rep 531 APPEARANCES and REPRESENTATION (if any): APPLICANT: Ms Concetta Cicchini – in person RESPONDENT: Barbizon Pty Ltd (ACN 062 850 819) represented by Mr Ken Berrill , general manager, Audi Centre Brisbane -- 1 of 8 -- 2 REASONS FOR DECISION [1] The Applicant’s claim relates to the purchase of a motor vehicle from the Respondent on or about 24 October 2009 through its ‘Alfa Romeo Gold Coast’ Dealership. The subject vehicle is a 2008 Alfa Romeo 147 5-door hatchback and the purchase price was $41,050 (including on road costs). In her application, which was filed on 8 May 2013, the Applicant originally sought a payment order for the amount of $41,385.80, for a refund of the purchase price with some costs. The claim is based on allegations that the vehicle is not safe and reliable to drive, is not fit for purpose for which it was purchased, and is not of a merchantable quality. [2] From December 2009 on, Ms Cicchini returned her vehicle to Alfa Romeo Brisbane on a number of occasions to have a variety of matters dealt with. The most serious of these was the replacement of the transmission in February 2010. Much of the work was completed under warranty. Some issues appear to relate to contaminated fuel in the vehicle, after it had travelled 25,000km. On each occasion, the Respondent provided Ms Cicchini with a courtesy car. [3] From the evidence, the first clear attempt by Ms Cicchini to terminate the contract and return the vehicle for a full refund, occurred with her engagement with the Office of Fair Trading in April 2012. [4] The last work done to the vehicle by the Respondent was in July 2012. Issues were dealt with under warranty and the vehicle was driving effectively. Also in that month, as a goodwill gesture, the Fiat Chrysler Group offered Ms Cicchini an extension of the original manufacturer’s three year warranty, to 31 October 2013. [5] The Applicant claims that further issues arose but she did not return her vehicle to the Respondent for attention because they were refusing to provide her with a courtesy again, as she had returned the last one damaged. The Applicant obtained an RACQ Vehicle Inspection report dated 29 August 2012, when the vehicle had an odometer reading of 32,422kms. There was no readily identifiable major failure according to the content of that report. [6] The Application was listed for hearing before Adjudicator Gordon on 13 September 2013 where upon it was determined that the Applicant was reducing her claim to the Tribunal’s jurisdictional limit of $25,000. Directions were made for the Applicant to prepare and provide copies of a paginated bundle of her documents and statement, and that the matter was to be re-listed before any Adjudicator for a two and a half hour hearing time. -- 2 of 8 -- 3 [7] At the conclusion of the hearing on 28 October 2013, I issued the following: DIRECTIONS: (a) BARBIZON PTY LTD is to carry out a pre-warranty inspection of the vehicle within seven (7) days, relating to defects and other identified issues contained on page 4 of the RACQ report dated 29.8.2012; (b) MS CICCHINI is to be provided with a courtesy car on the date the inspection is to be carried out; (c) A copy of the pre-warranty inspection report is to be delivered by the Respondent to the Applicant and to the QCAT registry; (d) The application is to be re-listed for continued hearing before Adjudicator Davern upon the written request of either side; (e) If no request for re-listing is received by 31.12.2013, then the application is to be dismissed. The Tribunal’s expectation for the issue of these directions was to provide a framework to assist the parties in achieving their own solution, with the extended warranty due to expire on 30 October 2013. [8] The Respondent inspected the vehicle on 1 November 2013, and offered to do additional work to the vehicle at no cost to the Applicant. Ms Cicchini refused this offer on the basis that the Tribunal’s directions did not include the carrying out of any work. [9] Upon the request of the Applicant, the matter was re-listed for hearing on 12 March 2014. The Tribunal issued the following DIRECTIONS: (a) The identified works being offered by the Respondent are to be carried out by the Respondent within six (6) weeks; (b) If there are still issues of concern to the Applicant, then she is to obtain a current inspection report from RACQ and request in writing a re-listing of the hearing at QCAT; (c) If no re-listing request is received by 6 June 2014, then the application is dismissed. [10] The Applicant obtained another RACQ report dated 20 May 2014, and the application was re-listed for final hearing on 22 September 2014. In a submission document dated 19 September, the Applicant identified further concerns that had arisen since she had compiled her material on 4 June, and that she was now seeking an order for $25,000, to include a refund amount reflecting the current market value of the vehicle, together with her accumulated ‘out of pocket’ expenses. The out of pocket expenses list includes legal and other miscellaneous fees that cannot be awarded in ‘Minor Civil Dispute’ cases like this one (QCAT Rule r 83). The Applicant had previously disclosed that she still owes $25,000 for the financing of the original purchase. -- 3 of 8 -- 4 [11] After the final decision was reserved on 22 September 2014, the Applicant lodged further material with an email transmission to QCAT on 30 October 2014. In this, she has requested consideration of an additional sum of $491.00 with a quote and photographs relating to a “warranty” issue about a bottom bolt on the front passenger door. This appears to be another new issue. The Law [12] The Australian Consumer Law in Schedule 2 of the Competition and Consumer Act 2010 (“ACL”) provides the current legislation relating to the topical issues. [13] In section 54 of the ACL, the term “merchantable quality” has been abandoned in favour of the term “acceptable quality”. Section 54(2) provides that: Goods are acceptable quality if they are as; (a) fit for all the purposes for which goods of that kind are commonly supplied; (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). Subsection (3) effectively requires consideration of the nature and price of the goods, and any other relevant circumstances. The consumer protections have not diminished from the consumer legislation that was in place at the time of purchase of the vehicle in 2009. [14] Sections 259 to 262 cover the relevant aspects of action against suppliers of goods. Section 262 provides that: (1) A consumer is not entitled, under section 259, to notify a supplier of goods that the consumer rejects the goods if: (a) the rejection period for the goods has ended, or … (c) the goods were damaged after being delivered to the consumer for reasons not related to their state or condition at the time of supply, or … In section 262(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 -- 4 of 8 -- 5 the relevant failure to comply with a guarantee referred to in section 259(1)(b) to become apparent having regards 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. [15] An important precedent case is from the Supreme Court of South Australia (Full Court). The case reference is Russo v Belcar Pty Ltd ACN 967 286 081 & Anor [2011] SASCFC 151 (“Russo’s case”). This case involved the fitness for purpose and merchantable quality of a motor vehicle and the purchaser’s right to terminate the contract. This was an appeal from the dismissal of a civil claim following a trial in the District Court. The Appeal was dismissed. The issue “not safe and reliable to drive” [16] The vehicle had relatively little use in the weeks following the purchase date. It was first returned to the Respondent in December 2009 for attention. The major issue related to the transmission problems. This was replaced in February 2010. No other issues come within what could be categorised as a ‘major failure’1. Many of the issues raised by the Applicant appear to relate to her expectation of better performance from the vehicle. There is no sufficient evidence to confirm a greater performance expectation for this make and model of car. Neither is there any sufficient evidence to confirm that the vehicle has not been safe to drive. [17] In her email correspondence to QCAT dated 5 March 2014, Ms Cicchini states that ‘I have been forced during all this time to drive a vehicle which is unsafe’. If Ms Cicchini has had this genuine belief, then for the safety of herself and other road users, she should not have been driving the vehicle. The second RACQ report was dated 20 May 2014 and shows an odometer reading of 52,065kms. The report identifies a number of issues that invite attention. These issues appear to relate more to general wear and tear and usage. One of the RACQ Inspector’s comments is ‘…four different tyre treads noted…’. The evidence suggests that if there is an issue about the vehicle not being safe and reliable to drive, then it is more likely to have been caused by a lack of maintenance and servicing on the part of the Applicant owner, and not related to the condition of the vehicle at time of original delivery. On this view of the evidence, it cannot be determined that the vehicle is, or was, unsafe2. The issue “not fit for purpose for which it was issued” 1 ACL s 260. 2 Ibid s 54(6). -- 5 of 8 -- 6 [18] With the purchase of a new vehicle, Ms Cicchini had a reasonable expectation that it would be a good and reliable mode of transport. If any issue arose then she could reasonably expect a quick resolution under warranty. [19] On 20 August 2013, the Respondent lodged email communications with QCAT that included photographs of Ms Cicchini and her vehicle. The vehicle was emblazoned with signage declaring her candidacy for election to parliament, and describing her dissatisfaction with her vehicle that she describes as a ‘lemon’. The context of this evidence does not distract or diminish from Ms Cicchini’s rights or entitlements as a “consumer” in this case. [20] Defects were discovered in the vehicle. It is understandable that Ms Cicchini has felt frustrated and she has been inconvenienced in spending time and effort to have those defects addressed by the Respondent. However, with the timely warranty work that was carried out to the vehicle, there is no sufficient evidence that the vehicle has not been fit for purpose. The issue “not of a merchantable quality” [21] The time at which the determination of whether or not goods are of acceptable (merchantable) quality, is when the goods are supplied to the consumer3. If a supplier claims that the failure arose after the goods were supplied, then the supplier bears the onus of proving that to be the case4. [22] The notion of merchantable quality can be ascertained by comparing the measure of the fitness for purpose of the goods against what was objectively reasonable to expect.5 Remedies [23] Remedies are outlined in the ACL, in section 259(2) when it is not a major failure, and in 259(3) when it is a major failure. With 259(2), the consumer may seek to reject the goods and obtain a refund if the supplier hasn't remedied the failure within a reasonable time. With 259(3), the consumer may reject the goods if the failure cannot be remedied, or if the failure is a major failure. [24] A consumer is not entitled to reject goods unless the consumer does so within a reasonable period after the failure became apparent. A definition of the rejection period can be found in section 262(2) of the ACL: The rejection period from the date of supply, is the time within which in would be reasonable to expect that the failure would become apparent having regard to: (a) the type of goods; and 3 Medtel Pty Ltd v Courtney [2003] FCAFC 151. 4 Effem Foods Ltd v Nichols [2004] NSWCA 332. 5 Medtel Pty Ltd v Courtney [2003] FCAFC 151. -- 6 of 8 -- 7 (b) the use to which a consumer is likely to put them; (c) the length of time it is reasonable for them to be used; and (d) and the amount of use to which it is reasonable for them to be put before such a failure becomes apparent. [25] A rejection of the goods must be clear and unequivocal and the whole of the buyer’s conduct will be relevant to this issue.6 As stated by Evans J in Graanhandel T Vink BV v European Grain and Shipping Ltd7: [A]n unequivocal rejection does not necessarily depend upon the terms of one communication alone. It is necessary to consider the whole of the relevant communications and also of the buyer’s conduct generally. [26] The Applicant delivered the first clear communication of her intention to reject the goods and seek a refund of payment in March/April 2012. There was no evidence at this time of any outstanding ‘major failure’. All other issues that had been raised by the Applicant appear to have been sufficiently dealt with in warranty and other work done to the vehicle in July 2012, by the Respondent. Summary [27] Instead of pursuing all of the potential issues and claims in a court of competent jurisdiction, the Applicant has opted to reduce her quantum of claim to the $25,000 limit of the ‘Minor Civil Dispute’ jurisdiction within QCAT. This sum is about the amount still owed by the Applicant for the financing of the original purchase of the subject vehicle. [28] The Respondent’s Miscellaneous Application for the dismissal of the claim was not granted, because the Tribunal determined that in fairness to both sides, the substantive issues of the case should receive appropriate scrutiny. [29] Since the purchase of her vehicle, Ms Cicchini has had continuous use and benefit of that vehicle, except for times when work was being done to that vehicle. During those times, courtesy cars were provided for her use. There is nothing in the evidence of the RACQ reports, or the observations of the witness Greg Bloom, or the content of other documentary evidence or submissions that would justify an order for the return of the goods and refund of payment. [30] In dismissing the appeal in Russo’s case, the Court held that: a) By his retention of ownership of the car, his use of it for more than four years and his acceptance of major warranty works, the appellant accepted the car. Even if any of the breaches alleged by the appellant were made out and amounted to breaches of condition, he had lost the right to terminate the contract. 6 Russo’s case at 483. 7 Graanhandel T Vink BV v European Grain and Shipping Ltd [1989] 2 Lloyd’s Rep 531 at 533. -- 7 of 8 -- 8 b) The length of a “reasonable time” depends on all of the facts of a particular case, but is a relatively short period reflecting the need for finality of transactions. A “reasonable time” might expire before it is possible to detect a latent defect in a good. The case I am determining before this Tribunal is “on all fours” with Russo’s case, and I must follow the precedent that has been established in that regard. [31] From all of the relevant circumstances of this case, there is no outstanding liability or obligation on the part of the Respondent towards the Applicant. ORDER 1. The Application is Dismissed. -- 8 of 8 --