Massa v Sunco Motors Pty Ltd [2025] QCAT 132

Fair Trading Act 1989 (Qld), s 3, s 16, s 50A

Motor Dealers and Chattel Auctioneers Act 2014 (Qld), Schedule 1, s 3, s 14

Australian Competition and Consumer Commission v Mazda Australia Pty Ltd [2021] FCA 1493

Australian Competition and Consumer Commission v Jayco Corporation Pty Ltd [2020] FCA 1672

The Owners - Strata Plan 87231 v 3A Composites GmbH

(No 7) [2024] FCA 788

Williams v Toyota Motor Corporation Australia Limited;

Toyota Motor Corporation Australia Limited v Williams

[2024] HCA 38

• [1] In November 2022, Patrice Massa ('Mr Massa') filed an Application - Motor Vehicle Dispute ('Application').[1]
• [2] The respondent to the Application is the company Sunco Motors Pty Ltd (ACN 010 722 111) ('Sunco'), a dealer in motor vehicles. The Application arose out of the sale by Sunco of a new Nissan Series 3 Navara ST 4X4 ('Vehicle') to Mr Massa in April 2019.
• [3] The purchase terms were recorded in a Sunco document entitled 'Contract of Sale for New Motor Vehicle'. The contract, dated 27 April 2019, is numbered number 2235 ('Contract').[2] The purchase price for the Vehicle was a total of $42,319. A component of this purchase price was described under the heading of 'Car Care' as 'Envirocote - Upper & Underbody Rust'. The price paid by Mr Massa for this car care item was $795.
• [4] Mr Massa's contention is that, after he had been in possession of the Vehicle for around three and a half years, it developed a rust problem. In the Application, Mr Massa described the problem as 'Underbody rusting away ... very bad sign of corrosion' and, to support this contention, attached several photos of the underside of the Vehicle.[3]
• [5] The remedy that Mr Massa seeks from this Tribunal is that Sunco trade the Vehicle in for a new one or for the payment of $62,790.
• [6] Mr Massa states that the legislation that applies to his Application is the Fair Trading Act 1984 s 50A (Australian Consumer Law Queensland) and the Motor Dealers and Chattel Auctioneers Act 2014 - Sch 1 s 14.
• [7] Sunco has responded to the Application by filing a Response.[4] The Response sets out matters in the Application with which Sunco agrees and matters with which it disagrees. Of relevance is that Sunco agrees that the Vehicle 'has evidence of rust to the undercarriage of the vehicle.'[5]
• [8] However, Sunco contends that the Vehicle's rust is a result of the Applicant failing to follow the care instructions that he was advised were necessary when he purchased upper and underbody rust protection as part of his Vehicle acquisition transaction.

• [9] Before addressing the factual background to Mr Massa's Application, it is appropriate to address the applicable legislation. This Tribunal is a legislative creation and thus derives its jurisdiction and powers from legislative enactments. As mentioned, the Application nominated two Queensland Acts as the applicable legislation for his application.
• [10] As Mr Massa developed his claim in the oral hearing, he conceded that his claim was confined to a claim under s 50A of the Fair Trading Act 1984 (Qld) ('FTA'). This was an appropriate concession given that a claim under Schedule 1, s 14 of the Motor Dealers and Chattel Auctioneers Act 2014 (Qld) ('MDA') relates to the jurisdiction of this Tribunal to consider claims in respect of the statutory warranty for warranted vehicles.[6] It is sufficient to observe that the Vehicle was sold to Mr Massa was a new vehicle and thus his reliance on the MDA as a basis for his claim was misconceived.

• [11] The documentary evidence before the Tribunal consisted of five documents. In addition to the Application and Response, the documentary evidence consisted of an independent assessor's report[7] dated 27 April 2023 and the response to the assessor's report by Sunco.[8] Mr Massa submitted a document entitled 'Further Evidences'. Although this document[9] is dated 9 March 2023, the QCAT Received stamp on the filed documents is dated 25 July 2023.
• [12] What the documentary evidence also shows is that the Vehicle has been examined in respect of this rust issue on three occasions. Those examinations produced divergent results.
• [13] An entity, engaged by Mr Massa ('DT Rustproofing'), did what is described as a 'Rust Consult' on the Vehicle on 9 November 2022.[10] A Fritz Radda of DT Rustproofing states that 'there is no sign of any rustproofing material applied.'
• [14] A few days later Leigh Chaney of Tint a Car Caloundra records, in an email dated 14 November 2022, that he inspected the Vehicle 'and can confirm that there is rust protection present from when it was treated on 30/04/2019.'
• [15] The Tribunal, by directions dated 8 February 2023, required the parties to contribute to the cost of an independent assessment of the Vehicle. This assessment was carried out by Keith Cuffe on 27 April 2023.[11] Mr Cuffe's report, also dated 27 April 2023, stated relevantly as follows:

There are signs of surface rust damage, appearing on the main chassis, from front of vehicle to rear of vehicle. Checked for evidence of application of Envirocote rust proofing. Likely signs of black rust proofing have (sic) been applied, but only a very thin coating with some evidence of surface rust forming on all sharp edges. Some of the arears (sic) of the chassis rails I was unable to scrape any rust proofing off which is likely due to either it has worn away or no rust proofing had been applied. Appears some minor rust is starting to form, under some of the rust proofing. Also, a small 30 mm portion of rustproofing is starting to peel away from the chassis, near the front gear box area. Removed engine covers to check for evidence of beach sand and none was found. Ran an inspection camera through the whole chassis and there were no signs of sand or internal rusting inside of the chassis rails, which suggests it's unlikely this vehicle has been on the beach or submerged in water. It's likely the rust on this vehicle is due to the location of the premises it is parked at, being close to the beach and constant sea spray.

• [16] In summary, Mr Cuffe, examining the Vehicle some 4 years after its acquisition by Mr Massa, was comfortably satisfied that rust proofing had been applied but that he had some reservations about the adequacy of the rust proofing.
• [17] Sunco's Response to the report of Mr Cuffe highlight the finding that that there is evidence that rust proofing had been applied to the Vehicle. In addition, Sunco highlight an opinion expressed by Mr Cuffe that the rust is likely due to the location of the premises where it is parked.
• [18] Sunco's Response[12] also attaches and relies on a copy of a set of 'Care Instructions' issued by an entity identified as MotorOne and is in respect of 'EnviroKote rustproofing treatment'. This document is signed by Mr Massa and is dated 30 April 2019. The care instructions are set out in discrete paragraphs and include some instructions including 'The vehicle MUST be inspected annually' and other matters that relate to the warranty such as lodgement of claims.
• [19] Although each discrete paragraph is marked with a tick and this document bears Mr Massa's signature, in both his written response and in his oral submissions he contends that this document is 'invalid'. The asserted basis[13] for this invalidity is fourfold - that it 'was not indexed to the contract of sale', that he 'never entered into a verbal agreement to buy the (MotorOne) product let alone paid them to supply me with their product', that a copy of the Care Instructions was not provided to him and finally, that the 'warranty claims of Motorone (sic) is nothing more than a Marketing strategies (sic)'.
• [20] The evidence before the Tribunal is considered further below.
• [21] However, before an evaluation of the evidence it is appropriate to set out the legislative framework for his claim and the role of the Tribunal in determining this Application.

• [22] The FTA is Queensland consumer protection legislation. Its principal objective[14] is:

to improve consumer wellbeing through consumer empowerment and protection, fostering effective competition and enabling the confident participation of consumers in markets in which both consumers and suppliers trade fairly.

• [23] One way that the principal objective is sought to be achieved is that the FTA adopts and applies in Queensland certain Commonwealth consumer protection legislation. This legislative integration stems from an intergovernmental agreement that is designed to simplify and unify state and federal consumer protection enactments.
• [24] The FTA incorporates into Queensland law schedule 2 to a Commonwealth enactment - the Competition and Consumer Act 2010 (Cth).[15] Schedule 2 is the Australian Consumer Law ('ACL'). The FTA provides that the ACL applies as part of the law of Queensland.[16] In so applying it is referred to as the Australian Consumer Law (Queensland) ('ACL(Q)').[17]
• [25] This Tribunal is invested, by the FTA, with jurisdiction to hear and determine certain disputes relating to motor vehicles. The FTA permits a person to apply to QCAT for the resolution of a dispute if the three requirements, set out in s 50A(1), are satisfied.
• [26] The first of these requirements is that the applicant to this Tribunal must be an application under one of the specified provisions of the ACL(Q) set out in the table to s 50A.
• [27] The second requirement is that the application must relate to a motor vehicle. The third requirement is that the amount or value of the relief sought must not be more than $100,000.
• [28] There is no dispute between the parties that requirements two and three have been satisfied.
• [29] As to the first requirement in s 50A, the specified provision requirement, Mr Massa fails, in his Application, to nominate a specific provision of the ACL(Q), set out in the Table to s 50A, on which he bases his claim.
• [30] Consideration of the Table to s 50A in the light of the wording of the Application and Mr Massa's oral contentions advanced at the hearing, point to his claim being for damages either under s 236(1) or s 259(4) of the ACL(Q).
• [31] Mr Massa, in the Application, advances two incompatible contentions. Under the heading of 'Outline of what is wrong with the vehicle' in the Application Mr Massa makes the unambiguous statement 'Vehicle was rust proofed to prevent corrosion.' What follows from this contention, and the material attached to the Application, is that Mr Massa is asserting that the rust proofing that was applied to the Vehicle was not of acceptable quality and points to the rust damage that he is asserting the Vehicle has suffered. That is, this aspect of his claim is based on s 259 of the ACL(Q) - the failure to comply with the guarantee as to acceptable quality.
• [32] However, Mr Massa then goes on, in the Application, to assert (adopting the DT Rustproofing assessment) that '(t)here is no sign of any rustproofed material applied.'
• [33] If no rust proofing was applied to the Vehicle, then to fit this aspect of his claim into a specific provision of the ACL(Q), set out in the Table to s 50A it would seem that Mr Massa is contending that Sunco engaged in misleading or deceptive conduct contrary to s 18 of the ACL(Q) - a provision that is contained in Chapter 2 of the ACL(Q).
• [34] Although not articulated by Mr Massa in quite these terms, by relying on the DT Rustproofing report to assert that no rust proofing was applied, he seems to be claiming that Sunco's conduct was misleading or deceptive in that he was charged $795 for a good (the rust proofing) that he did not receive. Further, Mr Massa claims he has suffered damage, being the rust damage to his Vehicle, because of Sunco's conduct. Such a contravention, if established by the evidence, could entitle him to damages under s 236 ACL(Q). Such a claim would be within the Table to s 50A of the FTA.
• [35] If I find that the rust proofing was applied to the Vehicle, even if it was not of acceptable quality, then I consider that Mr Massa would not have a maintainable claim under s 236 of the ACL(Q) as a result of contravention of the s 18 of the ACL(Q) based on non-application of the rust proofing.

• [36] As referred to in [12] - [16] above, there are three reports that address this question. None of the authors of these reports were called to give oral evidence. Two of the reports - those of Leigh Chaney and Keith Cuffe state that there is, in their opinion, evidence of rust proofing having been applied. Against this Fritz Radda states that, in his opinion, no rust proofing was applied.
• [37] After evaluating these reports, I am satisfied that, on the balance of probabilities, rust proofing was applied to the Vehicle in late April 2019. In coming to this view, I place particular weight on the independent report of Keith Cuffe who examined the Vehicle four years after its purchase and found evidence of rust proofing having been applied.
• [38] As a consequence, if Mr Massa has a maintainable claim, it must be based on a breach of the guarantee of acceptable quality contained in s 54 of the ACL(Q). That section is contained in Chapter 3, Part 3-2, Division 1, Subdivision A of the ACL(Q).

• [39] The ACL(Q) in s 259 relevantly provides as follows:
  1. 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 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) ...

• [40] If Mr Massa's claim is against Sunco, as a supplier of goods, for a breach of the guarantee of acceptable quality under s 259 of the ACL(Q) then, as it is listed in the table to s 50A of the FTA, it is within the Tribunal's jurisdiction.
• [41] Before turning to a consideration of whether Sunco has failed to comply with the guarantee of acceptable quality, two further matters need to be addressed. They are firstly, whether Mr Massa was, at the time of his acquisition of the Vehicle, a consumer as that term is used in the ACL(Q) and, secondly, whether the Vehicle was supplied to him in trade or commerce.
• [42] As to the second of these matters, it is apparent that the Vehicle was supplied to Mr Massa in trade or commerce. Mr Massa's application appends a copy of the Contract under which he acquired the Vehicle. He is named in the Contract as the purchaser. The business of Sunco was motor dealership. I find that the Vehicle was supplied to Mr Massa as a consumer in the course of Sunco's business.
• [43] I therefore find that Mr Massa's claim is one that can be considered by this Tribunal.
• [44] The issue then becomes whether Mr Massa has established by evidence that Sunco has not complied with the guarantee as to acceptable quality contained in the ACL(Q).
• [45] The guarantee as to acceptable quality is in the following terms:
  1. Guarantee as to acceptable quality

(1) If:

(a) a person supplies, in trade or commerce, goods to a consumer; and

(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 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.

(4) If:

(a) goods supplied to a consumer are not of acceptable quality; and

(b) the only reason or reasons why they are not of acceptable quality were specifically drawn to the consumer's attention before the consumer agreed to the supply;

the goods are taken to be of acceptable quality.

(5) If:

(a) goods are displayed for sale or hire; and

(b) the goods would not be of acceptable quality if they were supplied to a consumer;

the reason or reasons why they are not of acceptable quality are taken, for the purposes of subsection (4), to have been specifically drawn to a consumer's attention if those reasons were disclosed on a written notice that was displayed with the goods and that was transparent.

(6) Goods do not fail to be of acceptable quality if:

(a) the consumer to whom they are supplied causes them to become of unacceptable quality, or fails to take reasonable steps to prevent them from becoming of unacceptable quality; and

(b) they are damaged by abnormal use.

(7) Goods do not fail to be of acceptable quality if:

(a) the consumer acquiring the goods examines them before the consumer agrees to the supply of the goods; and

(b) the examination ought reasonably to have revealed that the goods were not of acceptable quality.

• [46] As to the proper construction of s 54 of the ACL, Wigney J has recently reviewed a number of decisions dealing with the guarantee as to acceptable quality[18] and set out a useful summary of the relevant points concerning the application of that section.[19]
• [47] The salient points from the decision of Wigney J can be summarised as follows:

(a) The assessment of whether goods are of acceptable quality within the meaning of s 54(2) is to be determined objectively, not subjectively.

(b) The assessment is objective from the perspective of the hypothetical reasonable consumer; the assessment involves some consideration of the circumstances of the supply to the actual consumer in question.

(c) The hypothetical reasonable consumer may stand in the shoes of the actual consumer for the purposes of the statutory assessment; the assessment does not operate by reference to what the actual consumer knew or subjectively believed about the condition of the goods in question.

(d) While s 54(3)(e) of the ACL specifies that the assessment must have regard to "any other relevant circumstances relating to the supply of the goods", it is only circumstances relating to the supply of goods that are "relevant to the question at hand, namely whether a hypothetical reasonable consumer as described in s 54(2) would regard the goods to be of acceptable quality, that are required to be considered".

• [48] Further judicial guidance as to application of the s 54 acceptable quality guarantee that has relevance to this matter can be summarised as follows:

(a) The question of whether goods are of acceptable quality is to be assessed at the time at which the goods are supplied.[20]

(b) Section 54 provides for a common standard of acceptable quality which goods are required to reach. It is necessary that goods have all the qualities referred to in s 54(2) in order to comply with the statutory standard.[21]

(c) The standard of what is acceptable quality is not absolute, or a standard of perfection. It is tempered by what a reasonable consumer would regard as acceptable having regard to the several matters in s 54(3). These matters render the standard of acceptable quality elastic, and context specific. The significance of the components of the guarantee of acceptable quality will therefore vary with the circumstances of each case.[22]

(d) Section 54(2), which addresses 'defects' including 'hidden defects',[23] has been the subject of recent High Court consideration in Williams v Toyota Motor Corporation Australia Limited; Toyota Motor Corporation Australia Limited v Williams [2024] HCA 38 (6 November 2024) ('Williams'). At [33] of the joint reasons the Court said, relevantly for this matter, that s 54(2) of the ACL:

... posits a hypothetical inquiry as to what a reasonable consumer at the time of supply would regard as acceptable if the reasonable consumer was "fully acquainted with the state and condition of the goods", including any "hidden defects". At least in a case involving a hidden defect, an inquiry into whether the guarantee has been complied with requires attributing to a reasonable consumer, at the time of supply, later acquired knowledge of the defect that renders the goods below an acceptable quality. The attributed knowledge of the defect must be knowledge that would render a reasonable consumer "fully acquainted" with the true state and condition of the goods; it follows that this must include full knowledge of or acquaintance with the defect, including later acquired knowledge of the propensity of the defect to occasion adverse consequences and the nature of those consequences, even if understandings of those matters vary over the period of time leading up to the trial.

• [49] That is, the expression 'hidden defect' is, in the view of the High Court, a defect not reasonably discoverable by a buyer by examination at the time of the transaction.

• [50] The gravamen of Mr Massa's acceptable quality claim is not with the mechanical functioning of the Vehicle but with the good that he acquired - the rust proofing. A good that he paid Sunco for as an adjunct to his purchase of the Vehicle. The following matters, phrased in the form of questions, are the issues that may need to be addressed in coming to a determination of this matter:

(a) Was the rust proofing that was applied to the Vehicle of acceptable quality for the purposes of s 54 of the ACL(Q)?

(b) If the rust proofing was not of acceptable quality, was the failure to comply with the guarantee as to acceptable quality a major or a minor failure as those terms are employed in the ACL(Q)?

(c) If there has been a failure to comply with the guarantee of acceptable quality, what remedies are available to Mr Massa having regard to the ACL(Q) and the FTA?

• [51] Would a hypothetical reasonable consumer, in the position of Mr Massa, at the time of his purchase in April 2019, regard the rust proofing he acquired as being of acceptable quality having regard to the matters in s 54(3)?
• [52] The price and nature of the goods are not in dispute. As to statements, representations or any other relevant circumstances I consider that the following matters are of significance:

(a) Mr Massa entered into the Contract on 27 April 2019.

(b) The Vehicle was delivered to Mr Massa on 30 April 2019.

(c) As set out above, I have found that the Vehicle did undergo some (anti)rust treatment prior to it being delivered to Mr Massa. On delivery, Mr Massa was presented with the care instructions - a document that he signed. That document set out certain matters including the need for an annual (rust) inspection. Read as a whole, the care instructions make clear that rust proofing is not a 'set and forget' situation. Some level of diligence is required after a vehicle has been rustproofed.

(d) In this context, another matter relevant to the supply of the rust proofing was the warranty that applied to the EnviroKote rust proofing had certain exclusions including 'any rust caused as a result of failing to reasonably maintain due care to the treated surface.'[24]

(e) The lapse of time between the supply of the good and the discovery of the rust on the undercarriage of the Vehicle

• [53] In this matter, there is no adequate evidence for me to conclude that, at the time of the application of the rust proofing, that it was not of acceptable quality.
• [54] Keith Cuffe's report, compiled some four years after the delivery of the Vehicle to Mr Massa, could suggest that the rust proofing that was applied was not durable and thus not of acceptable quality. For example, there is reference to a 'thin' coating of rust proofing. However, given the elapse of time since the treatment, I am unable to conclude that this amounts to a failure, at the time of supply, to provide a durable good that was free from defects or had a hidden defect.
• [55] I consider that Mr Massa failed to take reasonable steps to prevent the rust proofing from becoming of unacceptable quality.
• [56] As a result, I consider that Mr Massa has failed to establish that Sunco failed to comply with the guarantee as to acceptable quality. As a consequence, the order is that Mr Massa's Application is dismissed.

[1] By a QCAT Form Number 59. The Application as filed is exhibit 1.

[2] A copy of the Contract was attached to the Application.

[3] The photos also accompanied the Application.

[6] The phrase 'warranted vehicle' is defined in Schedule 1, s 3 of the MDA to be a used vehicle.

[13] Exhibit 4, the document entitled 'Further Evidences' (sic).

[14] FTA s 3.

[15] Ibid, Part 3 Divisions 2, 3 and 4 - ss 15-29.

[16] Ibid, s 16.

[18] The Owners - Strata Plan 87231 v 3A Composites GmbH (No 7) [2024] FCA 788.

[20] Australian Competition and Consumer Commission v Mazda Australia Pty Ltd [2021] FCA 1493, [101].

[21] Australian Competition and Consumer Commission v Jayco Corporation Pty Ltd [2020] FCA 1672, [25].

[23] Neither of which are defined terms in the ACL(Q).

[24] The warranty exclusions are attached to the Application.