ACH Computing Pty Ltd v Austral Pty Ltd trading as Brisbane City Land Rover [2020] QCAT 176

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

Medtel Pty Ltd v Courtney [2003] FCAFC 151; (2003) 130 FCR 182

Morphy v Beaufort Townsville Pty Ltd [2018] VCAT 1520

[1] On 10 September 2019, ACH Computing Pty Ltd ('the applicant') filed an Application - Motor Vehicle Dispute with the Tribunal. An amended application was subsequently filed on 27 September 2019. The named respondent is Austral Pty Ltd trading as Brisbane City Land Rover ('the respondent').

[2] The applicant is the owner of a 2019 Range Rover Evoque ('the motor vehicle').

[3] The applicant purchased the motor vehicle from the respondent on 11 June 2019 for $65,190 (including $995 for a five year cosmetic repair plan).

[4] 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.

[5] 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.

[6] Pursuant to s 3(1)(b) of the Australian Consumer Law, a person is taken to have acquired goods as a consumer if 'the goods were of a kind ordinarily acquired for personal, domestic or household use or consumption'. This includes the applicant's motor vehicle.

[7] 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'.

[8] 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] FCAFC 151; (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.

[9] 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

(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.

[10] The Macquarie Dictionary defines the word 'defect' to mean 'a fault' or 'imperfection'.

[11] 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'.

[12] 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.

[13] 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).

[14] Antony Herbetko, the managing director of the applicant gave the following evidence:

• (a) On 11 June 2019, the applicant collected the motor vehicle from the respondent.

• (b) On 17 June 2019, the applicant took the motor vehicle to the respondent's service centre. The respondent confirmed that the AM radio was not working, and advised that the vehicle would need to be returned for a more detailed look.

• (c) On 1 July 2019, the applicant took the motor vehicle to the respondent's service centre to have the problem with the AM radio fixed. The motor vehicle was returned on 2 July 2019, without the problem being fixed. The applicant was told a new aerial would need to be fitted, and sprayed to match the colour of the vehicle. He was told the part would have to be ordered from the United Kingdom.

• (d) On 21 August 2019, the applicant again took the motor vehicle to the respondent's service centre to have the problem with the AM radio fixed. The motor vehicle was not returned until 13 September 2019. The respondent discovered a crushed co-axial cable behind the driver's seat, requiring another part to be ordered from the United Kingdom. While the motor vehicle was with the respondent, the respondent discovered a problem with a shaft in the engine known as the 'Evoque problem'. The applicant was told that another part would need to be ordered from the United Kingdom.

• (e) On 14 October 2019, the applicant took the motor vehicle to the respondent's service centre to have the Evoque problem fixed. The motor vehicle was returned on 16 October 2019.

• (f) On 17 October 2019, technicians from the respondent attended the applicant's premises to reset the motor vehicle's cruise control to kilometres per hour, as it was set in miles per hour.

[15] Mr Herbetko also gave evidence that he requested a refund on 28 August 2019, 5 September 2019, 6 September 2019, 13 September 2019 and 16 September 2019. As noted above, the proceedings before the Tribunal were commenced on 10 September 2019.

[16] Richard Moyes, the dealer principal of the respondent, advised at the hearing that the dates set out above were 'fairly consistent' with what he had on file. I accept the applicant's evidence.

[17] Given that the problems with the AM radio and the Evoque problem occurred so soon after the applicant collected the vehicle, it is open to me to infer that those defects were present at the date of supply. I do so infer.

[18] I do not accept that the cruise control problem was present at the date of supply. This appears to have only arisen after the motor vehicle's computer was reset when the motor vehicle was returned to have the Evoque problem fixed.

[19] 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 in the respondent's possession for 29 days out of the first few months of the applicant's ownership of the motor vehicle;
• (b) the purchase price of $65,190; and
• (c) the motor vehicle being brand new,

would not regard the motor vehicle as free from defects and durable.

[20] 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:

(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.

[21] 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.

[22] 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 defects relating to the AM radio and the Evoque problem, 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.

[23] 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.

[24] In Nesbit v Porter [2000] NZCA 288; [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.

[25] Based on the evidence before me, I find that the extent of the failures with the motor vehicle occurred shortly after the purchase of the motor vehicle. The applicant did not delay in making his requests for a refund repeatedly known to the respondent. Indeed, the application to the Tribunal seeking a refund was lodged less than three months after the supply of the motor vehicle. In these circumstances, I am satisfied that the applicant rejected the motor vehicle within the rejection period.

[26] 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 caravan, the applicant will be entitled to a refund pursuant to s 263(4).

[27] 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 $65,190 within 28 days of the date of these orders.