ORDERS: By consent, the name of the respondent is corrected to Premium Cars Qld Pty Ltd ACN 660 362 489.

Pursuant to section 50A(2) of the Fair Trading Act 1989

(a) The respondent, Premium Cars Qld Pty Ltd, is required to pay the applicant, Emma Lina Meconi, the amount of $17,502.90 within 28 days of the date of these orders; and

(b) The applicant, Emma Lina Meconi, is to return the 2011 Hyundai i20 automatic hatchback motor vehicle registration number 011 RYX she purchased on 18 July 2024 to the respondent, Premium Cars Qld Pty Ltd, at 1/137 Granite Street, Geebung, Queensland within 28 days of the date of these orders.

The Application is otherwise dismissed. CATCHWORD TRADE AND COMMERCE - COMPETITION, FAIR

TRADING AND CONSUMER PROTECTION

LEGISLATION - CONSUMER PROTECTION - GUARANTEES, CONDITIONS AND WARRANTIES IN CONSUMER TRANSACTIONS - GUARANTEES,

CONDITIONS AND WARRANTIES - whether motor vehicle of acceptable quality - whether failure to comply with consumer guarantee a major failure - whether goods rejected during the rejection period - whether consumer entitled to refund - whether consumer entitled to damages

Competition and Consumer Act 2010 (Cth), Schedule 2, s 3, s 54, s 259, s 260, s 262, s 263

Fair Trading Act 1989 (Qld), s 50A

Queensland Civil and Administrative Tribunal Act 2009 (Qld) (Qld), s 10

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

Morphy v Beaufort Townsville Pty Ltd [2018] VCAT 1520 Vautin v BY Winddown, Inc (formerly Bertram Yachts) (No 4) [2018] FCA 426

Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514

Stefano Fiorani, dealer principal on behalf of the respondent

[1] On 18 July 2024, the applicant and the respondent entered into a contract pursuant to which the applicant purchased a used 2011 Hyundai i20 automatic hatchback motor vehicle registration number 011 RYX (the "motor vehicle") from the respondent for a price of $10,000. The applicant borrowed the full purchase price and took possession of the motor vehicle on or about 26 July 2024. These events are not disputed.

[2] On 28 March 2025, the applicant filed in the tribunal an Application - Motor Vehicle Dispute relying on s 50A Fair Trading Act 1989 (Qld) (the "FTA"). The applicant seeks a refund of the purchase price of the motor vehicle of $10,000, damages of

(a) The applicant made it clear that she was only pursuing her claim pursuant to s 50A FTA because the principal remedy sought was the refund. The box on the Application at Part D relating to relief for non-compliance with the statutory warranty was checked, however this relief was not pursued.

(b) The name of the respondent was, by consent, corrected to "Premium Cars Qld Pty Ltd" to align with the name of the supplier on the tax invoice of 18 July 2024.

[4] The issues for the tribunal to decide are the following:

(a) Tribunal jurisdiction.

(b) Application of the ACL:

(i) the provisions of s 54(2), (3) - guarantee as to acceptable quality.

(c) Is there a failure to comply with the guarantee?

(d) If so, the action against suppliers of goods under s 259?

(i) Is the failure a major failure or not a major failure?

(ii) What is the remedy?

[5] The tribunal's original jurisdiction is the jurisdiction conferred on it under an enabling Act to decide the matter in the first instance.1

[6] The enabling Act is the FTA. Under s 50A(1) of the FTA a person may apply to the tribunal for an action (all three elements to be satisfied):

(a) Under a provision of the Australian Consumer Law2 as listed in the table at the end of s 50A; and

(b) Relating to a motor vehicle; and

(c) Seeking an amount of relief or value of other relief of not more than $100,000.

[7] The applicant applies under a provision of the ACL listed in the table, namely s 259 of the ACL action against supplier of goods. The application relates to the motor vehicle and the amount of relief sought is under the $100,000 limit. I find that the tribunal has jurisdiction to decide the application.

[8] In order for the guarantee to apply, s 54(1) ACL must be satisfied. That section provides if:

(a) a person supplies, in trade or commerce, goods to 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.

[9] I find that the respondent supplied the motor vehicle to the applicant in the course of the respondent's business. The respondent's tax invoice dated 18 July 2024 is sufficient evidence of a sale in the course of business. I also find that the applicant is a "consumer" under s 3 ACL because the goods (the motor vehicle) were of a kind ordinarily acquired for personal, domestic or household use or consumption. The supply did not occur by way of sale by auction. There was no dispute from the respondent that the guarantee applied.

[10] I find that the guarantee of acceptable quality applies to this supply.

The provisions of s 54(2) and (3) - guarantee as to acceptable quality

[11] Sections 54(2) and (3) of the ACL 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

1 Queensland Civil and Administrative Tribunal Act 2009 (Qld) ss 9(1)(2)(a), s 10(1)(b).

2 Competition and Consumer Act 2010 (Cth) sch 2 (the Australian Consumer Law) (the "ACL").

(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.

Is there a failure to comply with the guarantee?

(a) The applicant took possession of the motor vehicle on or about 26 July 2024. The odometer reading was recorded on the tax invoice at 94,190 kms. The applicant also purchased an extended 12-month warranty.

(b) On 15 August 2024, the RACQ towed the motor vehicle to the respondent's workshop for "suspected transmission issues".3 The motor vehicle was returned to the applicant on 21 August 2024.

(c) On 26 August 2024, the applicant took the motor vehicle back to the respondent's workshop, but no inspection was carried out. This was the last time the respondent saw the motor vehicle.

(d) On 20 November 2024, the RACQ towed the motor vehicle to Bridgestone at Strathpine.

(e) On 26 November 2024, a private company towed the motor vehicle to FJ Manning Motor Repairs ("FJ Manning") for diagnosis and for the purpose of having the motor vehicle repaired under an extended 12-month warranty.

(f) By email dated 16 December 2024, the applicant purported to reject the motor vehicle and claim a refund of the purchase price.

(g) By letter dated 12 February 2025, FJ Manning provided an estimate to supply, fit and programme a new ECU (engine control unit) to the motor vehicle.

3 Respondent's Mechanical Repair Report, attachment 3 to the Application.

(h) By letter dated 19 February 2025. The company that provided the extended

warranty declined the applicant's claim.

(i) The applicant subsequently filed the application in the tribunal on 28 March 2025.

(j) The respondent provided its response on 28 August 2025.

[13] The applicant asserts that there is a major failure on the part of the respondent to comply with the guarantee as to acceptable quality by reason of the defects in the motor vehicle such as transmission issues, the failure of the ECU and which defects make the motor vehicle unsafe. As there was a major failure according to the applicant, she has a right to reject the motor vehicle.

[14] The respondent stated the following in the Response:

We dispute Ms Meconi's claims. A full refund including finance costs is unjustified. The issue raised in November occurred three months after the statutory warranty expired and is unrelated to the earlier repair (harness and solenoid). ECU failure is a usage related fault and we cannot be held responsible for a second hand vehicle's failure four (4) months after sale. Either:

1. The vehicle had no issues until 20 November 2024; or
2. The applicant knowingly drove with issues damaging the vehicle without reporting them, which was the applicant's responsibility.

[15] 15 August 2024 - The applicant's evidence is that:

I was stopped at a red light and when the light turned green I started to drive. The [motor vehicle] started jerking severely and jumping. The car was not safe to drive so I pulled over as soon as it was safe to do so. I called RACQ and they came out and checked the car. They said the car had a transmission issue and there was no transmission fluid in the car.

Patrol comments - Member states vehicle about to stall. Carried out testing. Confirm when in drive transmission is slipping which is the cause for no drive. Carried out fluid check and found no fluid in transmission. Told member vehicle will need to be taken to workshop.

[17] The RACQ towed the motor vehicle to the respondent's workshop on 15 August 2024.

[18] The respondent's evidence is that it held the motor vehicle until it was returned to the applicant on 21 August 2024. During that period, according to the respondent's Mechanical Repair Report:

(a) The engine and transmission fluids were checked with no leaks, and the levels were good.

(b) The Transmission Control Module detected a malfunction in the shift control solenoid valve B (pressure control solenoid valve). Parts were ordered and fitted on 16 August 2024 under statutory warranty.

(c) There were no error codes on scanning; and

(d) The motor vehicle was test driven on 17, 19 and 20 August 2024 with no abnormalities and there were no error codes on scanning.

[19] The applicant gave credible evidence of her experience driving the vehicle on 15 August 2024. The independent RACQ report is technical evidence of transmission issues and supports the applicant's evidence. There is also the evidence of the work carried out by the respondent under statutory warranty. I find that the motor vehicle had a defect in terms of the transmission which manifested on 15 August 2024.

[20] The respondent's case is that it fixed the transmission fault with the motor vehicle at this time.

[21] On 22 August 2024, the applicant states that she delivered the motor vehicle to Bridgestone at Strathpine where an inspection (only) was carried out. It was recommended that the transmission be checked again.

[22] On 26 August 2024, the applicant states that she returned the motor vehicle to the respondent's workshop. The respondent states to the effect that the applicant reported oil under the transmission sump and that he inspected it with his mechanic and did not find a leak. The applicant was advised to contact the respondent if oil was found on her garage floor.

[23] The applicant gave evidence that the motor vehicle continued to drive rough and was jerking intermittently after its return on 26 August 2024. I found the applicant to be a credible witness. I therefore accept this evidence and find that the motor vehicle continued to drive rough and was jerking intermittently until its failure on 20 November 2024.

[24] On 20 November 2024, the applicant states that the motor vehicle started "jerking and jumping again every time I started to drive....By this stage my daughter and I were both worried about our safety". The applicant called the RACQ and the motor vehicle was towed to Bridgestone at Strathpine, but no work was carried out. The odometer reading was 97,777 kms. The RACQ report for 20 November 2024 states:

No fault found in member gearbox. Is shifting gears okay but member informs me that recent gearbox work has been done. I advised member to take it back to the workshop for further check.

[25] On 26 November 2024, the applicant states that she arranged for the motor vehicle to be towed to FJ Manning, which company was an authorised repairer for any work carried out under the extended warranty.

[26] On 16 December 2024, the applicant emailed the respondent stating her intention to lodge a complaint with the Office of Fair Trading in relation to the transmission issues with the motor vehicle. In that email, the applicant stated:

As previously stated, the car broke down again with a transmission failure on 20 November 2024. This was the second mechanical failure within several months, the first being on 15 August 2024. Since then, the car has not been smooth to drive. The mechanic is still waiting on an automatic transmission specialist to confirm their findings and ensure nothing else is wrong with the transmission.

The consumer can choose a refund, repairs or replacement. Given I have raised my concerns months ago, and the car has experienced another major mechanical failure, I will be seeking a full refund for the loan payout amount (approximately

$12,940) and potentially related costs (unless resolved today).

[27] I find that the email dated 16 December 2024 is a notice of rejection of the motor vehicle for the purposes of s 259(3)(a) of the ACL. The email states that the applicant will be seeking a refund, which is payable when goods are rejected, and the grounds are also set out being the mechanical failure of the motor vehicle.

[28] On 12 February 2025, for the purposes of the extended warranty claim, FJ Manning provided a work estimate to supply, fit and programme a new ECU totalling $7,640 stating:

After investigation, we have found that the car requires a new ECU as the old ECU has failed internally.

[29] On 19 February 2025, the applicant's claim under the extended warranty was denied. On that same date, the applicant wrote to the respondent again requesting a full refund plus related costs outlining the transmission issues from 15 August 2024, a major mechanical failure on 20 November 2024 and her concerns about not feeling safe to drive. This letter from the applicant was a further rejection of the motor vehicle.

[30] On 3 March 2025, Queensland Automatics provided a diagnostic report and invoice to FJ Manning for which the applicant paid $500 for the two hour diagnosis. The report stated that Queensland Automatics performed a diagnostic scan and found:

Fault codes PO732 2nd gear incorrect ratio & PO 735 Shift solenoid B

The gear ratio codes usually indicate a mechanical failure, so we removed the side cover to inspect internals known for failure

[31] I find that the motor vehicle had a defective ECU (engine control unit) first discovered by FJ Manning in the period late December 2024 to February 2025. There is the independent technical report by FJ Manning stating that a new ECU was needed. There is also the diagnosis report from Queensland Automatics which is not disputed. I place substantial weight on this evidence. Furthermore, at the hearing, the respondent accepted the ECU in the motor vehicle had failed and required replacement. He only contested the repairs costs.

[32] According to the tax invoice from Wilson Auto Assist Pty Ltd the motor vehicle was picked up by them from FJ Manning at Enoggera and delivered to the applicant's home at Brendale on 11 April 2025, where it remains.

[33] The issue to decide is whether the respondent rectified the faulty transmission in August 2024 or whether it continued until the failure on 20 November 2024. The applicant's evidence is that the fault continued by reason of the faulty ECU. She submits that:

The engine control unit is designed to last for the life of the car in all cars, which is almost 300,000 kms. It is major componentry that is not meant to fail so early on in the life of a care.....

Without an ECU, the rest of the functions of the car are compromised. In this case, the failure of the ECU has meant the transmission did not operate as it should, meaning gears were not changing, leading to the car jerking in a dangerous, unsafe and inoperable manner. The reason the transmission wasn't doing its job and had been experiencing intermittent problems after the first repairs was because the ECU was not operating properly. This is the issue that should have been investigated in August 2024 when I first started having problems with the car. The reason the transmission stopped functioning properly was because the ECU had catastrophically failed.

[34] In find that, it is more likely than not, the faulty transmission continued through to 20 November 2024. First, there is the applicant's evidence of the motor vehicle jerking and driving rough and then the failure of the motor vehicle on 20 November 2024, which evidence I have accepted. Second, there is the diagnostic report from Queensland Automatics which mentions the fault transmission codes that were found. Third, the respondent's inspection on 26 August 2024 finding no oil leaks is not sufficient to satisfy me that the respondent's repairs had rectified the defective transmission, particularly in light of the subsequent discovery of the faulty ECU.

[35] Section 54(2) of ACL states that the motor vehicle is of acceptable quality if it is free from defects and safe as a reasonable consumer fully acquainted with the state and condition of the motor vehicle (including any hidden defects) would regard as reasonable having regard to the matters set out in s 54(3) of the ACL.

[36] I have taken into account that the year of the motor vehicle was 2011, that the purchase price was $10,000 and that it had travelled 94,170 kms at the time of supply. Nevertheless, I do not consider that a reasonable consumer would expect to purchase a vehicle with such transmission defects and one that required the ECU to be replaced so soon after purchase.

[37] The time of assessment for compliance is at the time of supply. In this case, the evidence of defects only manifested after supply of the motor vehicle. However, the motor vehicle's condition after supply is relevant to the extent that might enable an inference to be drawn about its condition at the time of supply.4

[38] I infer that the motor vehicle was not free of defects or safe at the time of supply for the following reasons:

(a) The faulty transmission appeared shortly after purchase. Motor vehicles do not normally develop such a fault so quickly unless the defect was present at the time of supply. There was only a very short period of time from handover of the motor vehicle (on 26 July 2024) to the transmission issue and the calling of the RACQ (on 15 August 2024);

(b) The motor vehicle had not travelled very much before the transmission issue manifested. The odometer reading at handover was 94,170 kms and on 15 August it was 94,700 kms;

(c) The fact that there were continued problems with the motor vehicle even after 26 August 2024 with it driving rough and jerking intermittently supports the inference that the faulty transmission was a latent defect present at the time of supply.

4 Medtel Pty Ltd v Courtney [2003] FCAFC 151; (2003) 130 FCR 182, [64]-[70].

(d) When the motor vehicle was delivered to Bridgestone at Strathpine on 20 November 2024, and later to FJ Manning, the odometer reading was 97,777 kms. The motor vehicle has been housed since that time and therefore when the defective ECU also manifested, the applicant had driven the motor vehicle only approximately 3,607 kms. The manifestation of the defective ECU when so few kilometres had been travelled is also a reason to infer that this defect existed at the time of supply;

(e) There is no evidence of abnormal use of the motor vehicle by the applicant or events after supply that may have caused or contributed to either the transmission defect or the defective ECU. It is the case that the respondent did not have the opportunity to inspect the vehicle after 26 August 2024 because the applicant preferred to take it to Bridgestone at Strathpine. Nevertheless, there is no evidence including from Bridgestone at Strathpine or FJ Manning, which businesses carried out inspections on the motor vehicle, of abnormal use or events after supply that may have caused the defects in the motor vehicle.

[39] I find that the respondent has failed to comply with guarantee of acceptable quality.

[40] A consumer may take action against a supplier for non-compliance with a consumer guarantee. The remedies available to the consumer will depend on whether the failure to comply is not a major failure or is a major failure.

Is the failure a major failure or not a major failure?

[41] A "major failure" is defined in s 260(1) of the ACL 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

(e) the goods are not of acceptable quality because they are unsafe.

[42] The test of whether there is a major failure for the purposes of s 260 and the test for whether the goods are of acceptable quality for the purposes of s 54 both adopt the "reasonable person" test.

[43] For the reasons already given, I find that the transmission and the ECU defects are such that a reasonable consumer fully acquainted with the nature and extent of the failure would not have acquired the motor vehicle. I also note that the cost of replacing the ECU quoted by FJ Manning of $7,640 is only $2,360 less than the purchase price of the motor vehicle. I am also satisfied from the evidence that the nature of the defects made motor vehicle unsafe to drive.

[44] I therefore find that the respondent's failure to comply with the guarantee of

(a) A refund of the purchase price of $10,000;

(b) Compensation for associated costs, consequential losses and inconvenience and stress caused, estimated at $10,062.74;

(c) Tribunal costs;

(d) That the respondent:

(i) arranges and pays for the towing of the motor vehicle back to the dealership; and

(ii) organise for the transfer of ownership forms to be completed and signed.

[46] Under s 259(3) of the ACL, the consumer may, subject to s 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection. Under s 263 of the ACL, if the goods are rejected, the consumer is entitled to a refund of the purchase price of the motor vehicle.

[47] To obtain a refund of the purchase price, the applicant must have rejected the motor vehicle within the rejection period. Section 262(2) provides:

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.

[48] I have found that the applicant rejected the motor vehicle on 16 December 2024 and again on 19 February 2025. In my view, this rejection was well within the rejection period as follows:

(a) The rejection occurred within the extended warranty period. This is not conclusive evidence but it is evidence upon which I place weight because it shows the expected period of largely problem free use of the motor vehicle, especially since it was given free of charge;5

(b) The motor vehicle has travelled only about 3,607 kms from the time of handover to when it suffered a failure and was delivered to Bridgestone at Strathpine on 20 November 2024. The rejection based on transmission failure occurred within a reasonably short period of time and low kilometres from when it became apparent.

(c) The applicant was not aware of the defect regarding the ECU until sometime on or after 12 February 2024. In my view, the defective ECU gave the applicant another ground for rejecting the motor vehicle. It was not until this time did the applicant become aware of the nature and extent of the defect in the motor vehicle and what the cost would be to have it repaired. By this time however, the applicant had already rejected the motor vehicle based on the faulty transmission.

5 Morphy v Beaufort Townsville Pty Ltd [2018] VCAT 1520, [86].

[49] Upon rejection of the motor vehicle, s 263(2) of the ACL required the applicant to return the motor vehicle to the supplier. There are exceptions to this but they were not advanced during the hearing.

[50] Section 263(4) of the ACL requires the respondent to refund any money paid by the applicant for the motor vehicle. The unchallenged evidence is that the applicant paid

$10,000 for the motor vehicle and I find that this is the amount of the refund payable by the respondent to the applicant.

[51] Section 259(4) of the ACL allows a consumer to 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 failure. Further, under s 259(6) of the ACL, the remedy of damages is available in addition to the remedy of rejection and refund.

[52] Section 259(4) is concerned with the recovery of "reliance losses" as the inclusion of the limitation of "reasonable foreseeability" pertains to such losses rather than expectation losses.6 Expectation loss puts the consumer in the position he would have been in if the contract had been properly performed, for example, loss of economic opportunity and exacerbation of physical health. Reliance loss on the other hand is where the consumer is reimbursed for wasted expenditure. Qualifications on the recovery of reliance losses are that the losses must be suffered because of the respondent's failure and the expenditure must reasonable and actually incurred.7

[53] As I have found that the respondent failed to comply with the guarantee of acceptable quality, the applicant is entitled to recover damages against the respondent of

$7,502.90 for wasted costs as shown below:

(a) The loan application fee of $540;

(b) Interest on the loan of $3,367;

(c) Mechanic labour paid to Bridgestone at Strathpine of $70;

(d) Transfer and registration costs of $304.30;

(e) Insurance premium of $360.10;

(f) Insurance premium of $371.10;

(g) Registration costs of $304.35;

(h) Diagnostic testing paid to Queensland Automatics of $500;

(i) Towing fees of $176;

(j) Towing fees of $183.09;

(k) Rental cars costs of:

(i) $221.99;

6 Vautin v BY Winddown, Inc (formerly Bertram Yachts) (No 4) [2018] FCA 426, [293].

7 Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514, 525.

(ii) $304.49;

(iii) $253.49;

(iv) $214;

(v) $332.99.

[54] The Applicant has claimed the tribunal costs. This is a cost the tribunal may order to be paid under s 50C of the FTA. However, the Application filed on 28 March 2024 has a nil amount for the filing fee paid which shows that the applicant did not incur tribunal costs.

[55] The orders the tribunal may make are listed in s 50A(2) of FTA. The tribunal does not have the power to order the respondent to arrange and pay for towing the motor vehicle back to the dealership and that the respondent organises for the transfer of ownership forms to be completed and signed.

[56] By consent, the name of the respondent is corrected to Premium Cars Qld Pty Ltd ACN 660 362 489.

[57] Pursuant to section 50A(2) of the Fair Trading Act 1989 (Qld):

(a) the respondent, Premium Cars Qld Pty Ltd, is required to pay the applicant, Emma Lina Meconi, the amount of $17,502.90 within 28 days of the date of these orders; and

(b) the applicant, Emma Lina Meconi, is to return the 2011 Hyundai i20 automatic hatchback motor vehicle registration number 011 RYX she purchased on 18 July 2024 to the respondent, Premium Cars Qld Pty Ltd, at 1/137 Granite Street, Geebung, Queensland within 28 days of the date of these orders.