Rosemond v Gateway Lights Pty Ltd t/as Milton Vehicle Brokers [2025] QCAT 150

Queensland Civil and Administrative Tribunal|2025-04-30

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 - where Tribunal found the spontaneous failure of engine components in an older vehicle is not predictable and depends the vicissitudes of treatment and care by previous owners - where the fact that a vehicle experiences engine problems does not give rise to an axiomatic inference that it was not of acceptable quality at the time of supply

Competition and Consumer Act 2010 (Cth), Schedule 2, s 54

Medtel Pty Ltd v Courtney [2003] FCAFC 151

[1] The applicant, Georgia Rosemond, applies to the Tribunal for a refund and compensation, for a purportedly defective 2018 Ford Escape ('vehicle') she purchased from the respondent.

[2] On 25 February 2024, Mrs Rosemond purchased the vehicle from the respondent for $15,500. At the time of purchase, the vehicle's odometer reading was 164,225 kilometres.
[3] About four months later, before the vehicle had travelled 3000 kilometres, a red warning light on the vehicles dash illuminated whilst she was driving it.
[4] Consequently, around the beginning of July 2024, Mrs Rosemond took the vehicle to a Midas Service Centre ('Midas') for examination. Midas examined the vehicle and provided her with a tax invoice ('Midas invoice') containing the following remarks, reproduced below:

(a) the engine coolant was overheating;

(b) a cylinder head was overheating; and

(c) there was an internal coolant leak on the number 2 cylinder head.

[6] It is convenient to the described above issues collectively as the 'engine problems'.
[7] A mechanic at Midas told Mrs Rosemond that further exploration was required to identify the true cause of the engine problems, but "the head gasket (of the engine) requires removal", "it would cost her" and the vehicle "probably needs a new engine".
[8] After the inspection, the vehicle was driven back to Mrs Rosemond's house, which is a distance of about a kilometre. It has not been driven since.
[9] Mrs Rosemond decided not to further investigate the engine problems due to the costs associated with doing so. However, she obtained a quote from Midas to supply and fit a new engine. That quotation amounted to $14,348.
[10] Mrs Rosemond raised the engine problems with Kurt Hilmer and Neil Hilmer, who are the respective managers and owner of the respondent company. They refused to rectify the engine problems, or to refund Mrs Rosemond the purchase price of the vehicle.
[11] Mrs Rosemond contends that the vehicle has additional defects. Tests she conducted on 12 June 2024 indicated that the state of health of the vehicle's battery was 28% and its stage of charge was 33%.
[12] Additionally, Mrs Rosemond relies on an e-mail from Bob Jane T-Mart, which states that Mrs Rosemond presented her car to have her tyres checked. A Bob Jane employee noted that 2 tyres were unroadworthy and recommended that they be replaced. Mrs Rosemond replaced the tyres at a cost of $359.
[13] Mrs Rosemond contends that the vehicle was listed for auction at Grays Online on 23 March 2023. A screenshot of Grays' website purportedly relating to the vehicle states that there were 37 bids for the vehicle, but its reserve was not met. A condition assessment of the vehicle on the screenshot states that its engine light was illuminated.
[14] Mrs Rosemond contends that a Grays employee told her that the vehicle had engine problems and poor panel and paint. The odometer reading on the listing was 164,092. When Mrs Rosemond called Grays, they purportedly quoted $5200 as the price of the vehicle.

[15] A hearing took place in the Tribunal on 20 November 2024. Both Mrs Rosemond and Neil Hilmer gave evidence under affirmation but neither called any witnesses.

[16] Mrs Rosemond contends that the respondent failed to comply with the guarantee as to acceptable quality at s 54 of the Australian Consumer Law, being Schedule 2 to the Competition and Consumer Act 2010 ('ACL'). Moreover, she contends that that the overheating amounts to a 'major failure' and therefore the respondent ought to refund her the price of the vehicle, in addition to the money she spent at Midas and the cost of fitting new tyres.

[17] At the hearing, N Hilmer, on behalf of the respondent:

(a) denied that the respondent purchased the vehicle at auction. Rather, he contended it was purchased from a private seller.

(b) submitted that Mrs Rosemond may have damaged the vehicles motor when she drove it on the freeway after the engine light illuminated.

(c) claimed that he spoke to someone at Midas, who indicated that the problem would have been undetectable at the time he sold the vehicle to Mrs Rosemond.

(d) submitted that components in used vehicles commonly spontaneously fail. It is unfair to hold the respondent responsible for such failures.

[18] To succeed in her claim, Mrs Rosemond must prove that the vehicle was not of acceptable quality within the meaning of Schedule 2, s 54(2) of the ACL, when the respondent supplied it to her.
[19] Goods will be of acceptable quality if they are as fit for the purposes for which goods of that kind are commonly supplied, acceptable in appearance and finish, free from defects, safe and durable as a reasonable consumer fully acquainted with their state and condition would regard as acceptable.[1]
[20] Section 54(3) of the ACL provides that relevant matters for determining whether a reasonable consumer would regard good as acceptable are:

(a) the nature and price 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 of the goods; and

(e) any other relevant circumstances relating to the supply of the goods.

[21] The time at which the determination of whether or not goods are of acceptable quality is when the goods are supplied to the consumer.[2]
[22] Goods do not fail to be of acceptable quality if 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 they are damaged by abnormal use.[3]

[23] In the present matter, I consider that there is insufficient evidence about the cause of the overheating for the Tribunal to find that the vehicle was of unacceptable quality at the time the respondent supplied it to Mrs Rosemond.
[24] Notably, East Coast Mobile Safety Certificates inspected the vehicle prior to its sale and issued a Safety Certificate. The certificate notes that the vehicle passed inspection in respect of its engine, tyres, and electrical components. The vehicle's engine light was not illuminated when it was purchased. I, infer therefore, that at the point of handover, the engine was not overheating. There is no evidence to suggest that a latent defect in the vehicle caused the engine problems at the point of supply.
[25] Further, there is insufficient evidence for the Tribunal to conclude that the vehicles engine needs replacement. Mrs Rosemond declined to undertake the further investigations that would be required to provide certainty about that issue.
[26] The vehicle was nearly six years old, and it had travelled over 164,000 thousand kilometres before the engine problems manifested. It is inevitable that a vehicle of that age, which had traversed so many kilometres, would experience mechanical problems at some point. The spontaneous failure of engine components in an older vehicle is not predictable and is dependent on the vicissitudes of treatment and care by previous owners. The mere fact that the vehicle experienced engine problems does not give rise to an axiomatic inference that the vehicle was not of acceptable quality at the time it was supplied.
[27] Similarly, concerning the vehicles battery and tires, those are consumable items that are apt to wear and fail over time. There is a dearth of evidence to substantiate Mrs Rosemond's contention that the battery and tyres were not of acceptable quality at point of supply. To the contrary, the roadworthy certificate gives rise to an inference that they were satisfactory.
[28] Lastly, I consider it unnecessary to resolve the question of whether the respondent purchased the vehicle at an auction and then sold it to the Mrs Rosemond. Even if that occurred, such conduct does not offend any provision of the ACL.
[29] Mrs Rosemond has failed to persuade the Tribunal that the respondent did not comply with the guarantee to supply a vehicle which was of acceptable quality. Accordingly, pursuant to s 50A(2) of the Fair Trading Act 1989 (Qld), I order that the respondent owes Mrs Rosemond no money.

[1] ACL sch 2, s 54(2).

[2] Medtel Pty Ltd v Courtney [2003] FCAFC 151.

[3] ACL sch 2, s 54(6).

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Judgment (19 paragraphs)

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