By an application filed on 29 May 2017 the applicant claimed a sum of $18,421.84 in relation to a purchase from the respondent of a Holden Colorado utility. He claimed that after the vehicle was purchased on 30 December 2016 he noted a number of issues with the vehicle but in particular he described the brakes as requiring a major repair. He alleged that the work would cost over $3,250.00 and that no promises could be made that the adjoining electrical components would not then cause more issues.
Mr Cornish alleged that all of the numerous repairs should have been carried out prior to the sale of the vehicle and that he had been advised not to drive it as it posed a fire risk due to the burn out of electrical parts.
On 26 July 2017 orders were made requiring the applicant to provide all documents upon which he wished to rely by 9 August 2017 and for the respondent to provide documents by 23 August 2017. These times were subsequently extended to 1 September 2017 and 15 September 2017 respectively. The matter was ultimately listed for hearing on 1 November 2017 and the applicant elected to attend in person rather than by phone.
[2]
Applicant's Evidence and Submissions
On 30 December 2016 Mr Cornish attended Western Wholesale Commercials with a view to purchasing a vehicle. He took a vehicle for a test drive and upon returning allegedly commented upon the brakes as he thought they may have had an air lock in them. He was advised that they probably did have an air lock because the vehicle had been standing for some time.
It was noted that the blinker had an electrical fault as it would not switch off automatically. Several leaks were also noted. The dealer agreed to fix these items prior to delivery.
On 7 January 2017 the applicant purchased the Holden Colorado 4WD RCDX Utility, registered number BG 12 VV. The purchase price was $12,950.00 and the contract notes that the vehicle was a 2010 model which had travelled some 262,338 kilometres. Arrangements were made for the vehicle to be delivered to Coffs Harbour after Christmas and when the repair work had been undertaken.
Mr Cornish claimed he was also persuaded to purchase a 12 month warranty for a sum of $495.00 as an alternative to obtaining an NRMA pre-purchase inspection.
The blinkers were repaired and the vehicle was ultimately delivered to Coffs Harbour on 14 January 2017. He claimed that it had numerous problems upon delivery, including the fact that it had travelled an extra 1,200 kilometres from the time it was purchased. He noted faulty air conditioning noises and he further noted that, after the vehicle had been driven some 40 kilometres to his home in Lowalla, it had starting blowing a lot of smoke.
On 18 January 2017, after the vehicle had travelled a total of 263,643 kilometres the Applicant delivered to South Coffs Motors where the engine was found to be running rough and stalling. Upon investigation the diesel appeared to be contaminated by water and the front crankshaft seal and rear main seal were found to be leaking. The air conditioning was found to require re-gassing.
These issues were addressed by South Coffs Motors on 20 January 2017 at a total cost of $959.20 including GST.
On 8 February 2017 the vehicle was taken to Westlawn Mechanical Repairs in Grafton for a registration brake check. Although the brake testing machine showed that the vehicle was stopping correctly, the mechanic noted that the braking system had a fault with the vacuum booster. By that stage the vehicle had travelled some 264,218 kilometres.
On 13 February 2017 the vehicle was returned to Westlawn Mechanical Repairs where a list of problems was prepared including:-
1. brake booster faulty
2. fluid leak at the front of the crank seal area
3. oil leak at the rear of the engine
4. the rear shackle bush was worn
5. number plate light cover was missing
6. front shock absorbers were weak in operation
7. oil leak at the intercooler piping to the throttle body
On 3 March 2017, repairs to a number of these items were undertaken at South Coffs Motors at a cost of $997.70. At that stage the vehicle had travelled a total of 264,506 kilometres. It is agreed that the respondent dealer had reimbursed the applicant a sum of $500.00 towards past repair costs.
The registration on the vehicle was renewed for 6 months on 22 February 2017.
On 23 March 2017 the vehicle was taken to Geoff King Motors in Coffs Harbour for a further inspection and report. It was found that rear brakes were grabbing and it was impossible to raise the hand brake for more than one click. Problems with the radio and the air conditioner also required further attention. In a further report from Geoff King Motors dated 3 April 2017 it was noted that the brakes were still grabbing on slow driving and that the wiring was damaged under the passenger seat at the floor. Some of the wiring was noted to have been burnt and the ABS warning light had been blacked out with texta colour, apparently to avoid indication of braking problems. The applicant claimed that the damage to the ABS system rendered the vehicle dangerous to drive and impossible to re-register. It was on the basis of these issues that Mr Cornish sought a finding that the vehicle was suffering from a major defect and an order that the monies paid out for the purchase and rectification of the vehicle should be refunded.
[3]
Respondent's Submissions
Mr Javian appeared on behalf of the respondent and sought to rely on material filed on 27 September 2017. He claimed that the purchase price was $12,950.00 and that an extra $495.00 was paid for a 12 month warranty. He attached a copy of the motor dealer's Form 5 notice which indicated that the vehicle had no dealer guarantee under the Motor Dealers and Repairers Act 2013 but notwithstanding this, the respondent provided a refund of $500.00 representing a contribution towards a quote sent by the applicant on 18 January 2017.
It was submitted that the respondent would not be liable for fuel in water or water in the fuel and that the applicant must have filled his vehicle with contaminated diesel. It was pointed out further that the customer purchased a roadworthy certificate on 8 February 2017 and that brake test attached to that certificate indicated a pass although it is clear that the notification with that certificate indicated that the brake test was a failure as a result of a fault with the vacuum booster.
Mr Javian claimed that brake problem was not diagnosed until 23 March 2017 after the vehicle had travelled some 2,000 kms since purchase. This observation overlooks the evidence given by the applicant that he noted a problem with the brakes when he test drove the vehicle prior to purchase. It was further submitted that the electrical problem could have occurred when wiring was overloaded as a result of some towing being undertaken although there is no evidence that the applicant undertook any towing in that time.
Reference was made to a diagnosis from Coffs Harbour Auto Electrical stating that towing can be a cause, and in addressing the problem further Mr Javian stated that he had obtained a quote for the supply of a new wiring harness from Heartland Holden at a cost of $875.00 and a second hand wiring harness from Formula One Auto repairs at a cost of $300.00. He claimed that the respondent was quite happy to assist but that Mr Cornish had refused the supply of second hand parts after he had owned the vehicle for approximately two months.
The material provided by the respondent included a quote to refit part of the burnt wiring harness at a total cost of $450, being $90.00 per hour for a total five hours. This quote did not include the cost of supply for the harness. The respondent's material also included an email from Coffs Harbour Auto Electrical addressed to the respondent in the following terms:-
Attention: Wayne re Margot ABS burnt out
"Unfortunately we are unable to quote on this repair although we are happy to perform rectifications required. The actual cause of the problem may have been simply poor connections at the connecting plug or caused by excessively heavy electrical loads associated with the harness.
Close inspection may reveal if the complete harness needs to be replaced and further problems that may have caused the damage or arisen as result of the burnt wiring short would not be revealed until the wiring harness is repaired.
Please feel free to call if you wish to discuss this further."
During the course of submissions and discussions Mr Javian ultimately indicated that the respondent would be prepared to carry out repairs on the vehicle in Coffs Harbour and to provide a new wiring harness if that was required.
[4]
Decision
In the present case there is no dealer guarantee under the Motor Dealers and Repairers Act 2013, the dealer is accordingly, under the Act, not required to repair or make good any defect which may exist or occur in the vehicle.
The applicant's claim appears to be based on Australian Consumer Law and in particular on guarantees contained in s. 54. Subdivision 2A Div 1 of Pt 3.2 of the Australian Consumer Law provides for statutory guarantees in relation to the supply of goods in s. 54 provides as follows:-
54 guarantee as to acceptable quality
(1) if,
(a) a person supplies in trade or commerce, goods to a consumer.
(b) the supply does not occur by way of sale by auction, there is a guarantee that the goods are of acceptable quality.
(2) goods are of acceptable quality if they are:
(a) fit for the purpose for which goods or that kind are commonly supplied.
(b) acceptable in appearance and finish.
(c) free from defects
(d) safe
(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 subs 3.
(3) The matters for the purposes of subs (2) are:-
(a) the nature of the goods.
(b) the price of the goods if relevant.
(c) any statements made about the goods on any packaging or labelling on the goods.
(d) any representation made about the goods by the supplier or manufacturer of the goods.
(e) any other relevant circumstances relating to the supply of the goods.
Section 259(1) of the Australian Consumer Law provides that a consumer may take action against a supplier if one of the guarantees that relates to the supply of goods is not complied with. If the failure to comply can be remedied and is not a major failure, the consumer may require the supplier to remedy the failure within a reasonable period. If the supplier refuses or fails to comply the consumer may have the failure remedied and may recover all expenses incurred by the consumer in having the failure so remedied.
If the failure to comply with the guarantee cannot be remedied or is a major failure the consumer may notify the supplier that the consumer rejects the goods or, by action against the supplier recover compensation for any reduction in the value of the goods below the price paid.
In determining whether a failure to comply with a guarantee is a major failure, it is necessary to have regard to the provisions of s. 260 which provides:-
"a failure to comply with a guarantee referred to in s. 259(1)(b) that applies to the 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) …
(c) the goods are substantially unfit for the purpose for which goods of the same kind are commonly supplied and cannot easily and within a reasonable time be remedied by making them fit for such a purpose.
(d) …
(e) the goods are not of acceptable quality because they are unsafe.
In considering the present claim made by the applicant it is necessary to determine whether on the evidence, there has been a breach of warranty in relation to the goods and whether such breach could be regarded as major failure within the meaning of s. 260 of the Australian Consumer Law.
Consumer guarantees under the Australian Consumer Law are only available to consumers under s. 3 of the Australian Consumer Law which relevantly provides:-
3. Meaning of consumer
Acquiring goods as a consumer;
(1) a person is taken to have acquired particular goods as a consumer if, and only if;
(a)the amount paid or payable for the goods as worked out under subs (4) to (9) did not exceed;
(i) $40,000 or
(ii) if a greater amount is prescribed for the purposes of this paragraph - that greater amount.
(b) the goods were of a kind ordinarily acquired for personal, domestic or household use or consumption or,
(c) the goods consist of a vehicle or trailer acquired for use principally in the transport of goods on public roads.
The evidence suggests that the applicant satisfies the definition of a consumer within the meaning of s. 3 of the Australian Consumer Law as the words ordinarily or commonly mean "regularly not principally or exclusively or predominantly". (see Bunnings Group Limited (formerly Bunnings Pty Ltd) v Laminex Group Limited [2006] FCA 682 per Yeung J).
In Safi v Heartland Motors Pty Ltd t/as Heartland Chrysler [2016] NSW CATAP 80 the Appeal Panel held that a consumer guarantee of "acceptable quality" requires that among other things the goods be fit for all purposes for which the goods are commonly used and safe which is to be adjudged by the reasonable consumer fully acquainted. In considering the issue of major failure further, the Appeal Panel observed that a major failure may be constituted by one defect or a series of specific or individual defects, which taken as a whole constituted major failure but defects which result in goods failing to comply with guarantees of acceptable quality will not invariably be a major failure and it will depend on the nature and extent of the failure as well as the cost of repair in proportion to the purchase price and the question of whether defects can be remedied easily and in a timely manner are relevant considerations.
In Cary Boyd v Agrison Pty Ltd [2014] VMC 23 the Magistrates Court of Victoria was to consider whether a tractor was of acceptable quality and it was observed that the price of the Agrison tractor was a relevant consideration.
In applying these principals to the present case, it is necessary to take into account the fact that the vehicle had travelled some 262,000 kilometres at the time of purchase in a period of slightly less than 7 years. The applicant had an opportunity to inspect the vehicle and to test drive it. He also had the option of seeking a mechanical inspection before purchase particularly where he may have had some concerns about the brakes on the vehicle.
Mr Cornish has conceded that although there are a number of items of concern, the issue relating to the brakes is paramount and is a matter of safety.
Apart from the issue with the brakes it is apparent that other repairs were undertaken by the applicant at a total cost of less than $2,000.00 and that a sum of $500.00 has already been contributed by the dealer to these costs. Those items could reasonably be regarded as expected defects arising from the age of the vehicle and the distance it had travelled prior to the purchase by the applicant. Some aspects of the braking problem could also be categorised in that way but the failure of the ABS system can properly be regarded as the principal matter of concern.
Although the applicant has clearly raised the issue of repairs to the ABS system, there is no evidence before the Tribunal which addresses the question of the cost of such repairs. On one view it may be a relatively minor matter and on another view it may be a matter of some significance.
The question of whether the defect can be readily rectified has always been a matter for consideration in relation to s. 260 of the Act. In the present instance the cost of rectification is unknown through a lack of evidence however the respondent, through Mr Javian, has agreed to cause the repairs to the ABS and the wiring harness to be undertaken at no cost to the applicant. He has also agreed that the repairs can be undertaken in the Coffs Harbour area and finally he has conceded or agreed that he will accept a direction that the wiring harness be replaced with a new harness as opposed to a second hand harness.
Given these concessions I am not satisfied that the defect by itself could be regarded as a major defect within the meaning of s. 260 of the Australian Consumer Law. Other problems have now already been rectified and the respondent has provided a contribution towards those costs. The evidence suggests that the cost of rectification of these other matters was less than $2,000.00 and the deterioration with age could give rise to an expectation in the mind of a reasonable purchaser that some of these matters may require attention in a vehicle in that price range.
For these reasons the applicant has failed to demonstrate that the defect constitutes a major defect within the meaning of s. 260 of the Australian Consumer Law, however he has established an entitlement to an order that the ABS braking system be rectified at the cost of the respondent and the respondent has conceded that this should be done with a new wiring harness and that it should be carried out in the Coffs Harbour area. It is appropriate to refuse the applicant's request for a full refund of the purchase price and of all expenses, many of which would not be recoverable in any event, but it is appropriate to make the order proposed in relation to the repairs to the wiring harness and the rectification of problems with the ABS braking system.
[5]
Civil and Administrative Tribunal of New South Wales
[6]
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: 23 January 2018
Parties
Applicant/Plaintiff:
Darren Cornish
Respondent/Defendant:
CSJ Motor Group Pty Ltd t/as Western Wholesale Commercials