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[2020] NSWCATAP 103
respondent. 1. Order that the time for the appellant to lodge the appeal be extended until 21/2/2020. 2. Appeal dismissed.
The Appeal Panel held that the appellant's claim to reject a car and obtain a refund accrued when the gearbox fault occurred and when he told the dealer he rejected the car in Dec 2015. Under s 79L of the Fair Trading Act the Tribunal cannot hear consumer claims where the cause of action first accrued more than three years before lodgment. Because the relevant facts occurred in 2015, the rejection claim was time‑barred. The Panel also held that complaints about servicing after supply (use of non‑approved oil) could not, without showing a hidden defect at supply, make the car 'not of acceptable quality' at supply; any remedial claim based on servicing would be for compensation and none was made. The Appeal was dismissed, but time to lodge the appeal was extended to 21/2/2020.
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Mr Cairns purchased a new Subaru WRX STI 6 from AHG Newcastle (Crossroads Subaru) in early November 2015 for $50,500 and took delivery on 3 November 2015. Within days he reported a suspicious gearbox noise and returned the vehicle for attention. By 14 December 2015 the vehicle had the gearbox removed and the clutch plate, clutch cover and flywheel replaced; the gearbox oil was drained and replaced in the course of that repair. Mr Cairns told AHG he would not have bought the vehicle had he known of the fault and notified AHG that he rejected the vehicle. AHG proceeded with repair and advised repair was the only available course.
From July 2016 through to May 2019 Mr Cairns continued to complain about difficulty selecting some gears, particularly in cooler conditions. He had the car regularly serviced by AHG; AHG conceded it did not use Subaru's recommended GL‑5 75W‑90 oil in those relevant services. Expert evidence adduced by Mr Cairns in 2019 established that after the transmission oil was drained and replaced with the manufacturer's approved oil, the vehicle operated in a sound and satisfactory manner.
Mr Cairns lodged a consumer claim in NCAT on 20 July 2019 seeking replacement or return of the vehicle and a refund, asserting rejection under s 259(3)(a) ACL because of a major failure of the guarantee of acceptable quality in s 54 ACL. On 27 November 2019 the Tribunal Member dismissed the application. The Tribunal Member treated the applicant's case as made up of two causes of action: (1) the original gearbox defect requiring repair in December 2015, and (2) the use of non‑approved oils in repairs and subsequent servicing. The Member held the first cause of action time‑barred under s 79L FTA and (on the Member's analysis) treated the second as a services guarantee breach under s 61 ACL but concluded no compensatory remedy was available or proved, and dismissed the claim.
Mr Cairns filed an internal appeal; the Appeal Panel extended the time for lodging the appeal (medical evidence explained delay) and then dismissed the appeal on 2 June 2020 for the reasons below.
Two legal pivots drive the decision.
First, the jurisdictional bar in s 79L of the Fair Trading Act 1987 (NSW) prevents the Tribunal from hearing a consumer claim where the cause of action first accrued more than three years before the claim is lodged. The Panel focussed on identifying the 'cause of action giving rise to the claim' as the particular set of facts which support the right to an order by the Tribunal. That required enumerating the facts a consumer must prove to reject goods under the Australian Consumer Law: consumer status; supply by the supplier; failure of the s 54 guarantee of acceptable quality; that the failure was a major failure or could not be remedied; and notification of rejection within the relevant period (see the decision's summary of ss 259, 260, 263 and s 54 elements).
Applying that framework, the Panel held the only fact capable of establishing the vehicle was not of acceptable quality at time of supply was the gearbox noise/defect present at and shortly after delivery and addressed by the December 2015 repair. The later use of non‑approved oil in servicing did not change the vehicle's quality at the time of supply unless it revealed a hidden defect that existed at supply. Because the operative facts supporting rejection, the defect and the December 2015 notification, all occurred more than three years before the July 2019 Tribunal application, the cause of action accrued in late 2015 and the Tribunal lacked jurisdiction under s 79L.
Second, the Tribunal's separate finding that AHG used non‑approved oil when servicing was treated as a complaint about the supply of services under s 61 ACL. The Panel accepted the Tribunal Member's finding that such conduct could amount to a major failure in services, but observed that the remedies for a services major failure under s 267 are compensatory (damages) rather than providing the consumer with a refund of the purchase price. No evidence of compensable loss was made out; the expert evidence suggested the transmission was operating satisfactorily. The Panel also expressed some doubt (obiter) whether s 61 guarantees applied at all on these facts because s 61 requires that the consumer make known a particular purpose or result to the supplier.
Accordingly, the Panel concluded the Tribunal Member was correct to dismiss the application: the rejection/refund claim was time‑barred and the services claim did not afford the remedy sought.
Before: The judgment applies existing statutory framework, s 54 ACL for acceptable quality; ss 259–263 ACL for rejection/refund; s 61 ACL for services guarantees; s 79L FTA for Tribunal jurisdiction time limits, and draws on earlier authority for timing of acceptable quality assessments (Full Federal Court decisions on analogous former Trade Practices Act provisions such as Medtel and Merck (cited)). It references NCAT internal appeal principles from prior Appeal Panel decisions (Prendergast and Cominos) to frame leave and questions of law.
After: The Panel clarifies and applies the principle that for s 79L FTA the 'cause of action giving rise to the claim' requires identifying the concrete facts that support a Tribunal order and, in the context of s 54 ACL, that acceptable quality is to be judged at the time of supply (with allowance for latent defects). That application means post‑supply servicing deficiencies (here, the use of non‑approved oil) will not typically restart or defer accrual of a rejection right under s 259 unless they reveal a hidden defect that existed at supply. The decision therefore reinforces a clear accrual point for consumer rejection claims: when the facts entitling rejection are present and notified, not when consequential or remedial events occur later.
"In the context of section 79L of the FTA, 'cause of action giving rise to the claim' refers to the set of facts which support a right to an order by the Tribunal."
"It is apparent from the terms of section 54 ... that the time at which the determination of whether or not goods are of acceptable quality is to be made is when the goods are supplied to the consumer..."
"The use of non‑approved oils in repairing and servicing the vehicle in the period after the motor vehicle had been supplied could not mean that the motor vehicle was not of acceptable quality, as it did not affect the quality of the vehicle at the time at which it was supplied to Mr Cairns..."
"Even assuming all the necessary facts in Mr Cairns' favour ... all of the facts supporting Mr Cairns' claim ... occurred more than three years before he lodged his claim ... the Tribunal was therefore prevented from hearing and determining that claim under section 79L of the FTA."
"We doubt that the guarantees under section 61 of the ACL applied in the present circumstances."
This decision is an Appeal Panel decision of NCAT. The Panel expressly relied on Full Federal Court authority (Medtel, Merck) to support the timing principle for acceptable quality, and on previous Appeal Panel decisions (Prendergast, Cominos) to frame internal appeal questions and leave considerations. The Panel's application is consistent with those authorities: it applies the timing rule to bar a late rejection claim, and treats post‑supply service complaints as functioning in the services guarantees/remedies space. As of this decision, it clarifies NCAT practice: careful identification of the facts needed to prove a rejection claim is essential to determining accrual and jurisdiction under s 79L. Practitioners citing this decision should expect courts and tribunals to focus on the accrual date tied to the factual matrix supporting the remedy sought.
This analysis is explanatory legal information only. It aims to explain what the Cairns v AHG Newcastle Pty Ltd [2020] NSWCATAP 103 decision says and how the Appeal Panel reasoned. It is not legal advice. I can make mistakes. Before you act on this, rely on it, or use any draft or strategy derived from it, get a qualified Australian lawyer to check it.
Introduction
Background
Tribunal proceedings and decision
Scope and nature of internal appeals
Extension of time
Grounds of appeal
Submissions
The cause of action giving rise to the claim
Guarantee of acceptable quality under section 54 of the ACL
The time limitation under s79L of the FTA
Using non-approved oils in repairing and servicing the motor vehicle after delivery
Conclusion
Orders 1. Order that the time for the appellant to lodge the appeal be extended until 21/2/2020. 2. Appeal dismissed
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 02 June 2020
Cairns
AHG Newcastle Pty Ltd
(2003) 130 FCR 182
(2011) 196 FCR 145
1. Order that the time for the appellant to lodge the appeal be extended until 21/2/2020. 2. Appeal dismissed.