Ross v Hyundai Motor Vehicle Company Australia Pty Ltd [2025] QCAT 131

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

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 August 2023, Anthony Ross ('Mr Ross') filed an Application - Motor Vehicle Dispute ('Application').[1]
• [2] The respondent to the Application is Hyundai Motor Vehicle Company Australia Pty Ltd (ACN 008 995 588) ('Hyundai' or the 'Respondent'). The Application arose out of the purchase by Mr Ross of new Hyundai model I20 motor vehicle ('Vehicle') from Sunco Motors pursuant to a vehicle purchase contract dated 28 June 2014.
• [3] Mr Ross' contention is, in summary, that in or about late 2021, a problem with the Vehicle's paintwork became apparent. In the Application, Mr Ross described the problem as commencing with a fleck of paint missing from the Vehicle's bonnet and developing into a larger patch and 'bubbling' and peeling of paint elsewhere on the Vehicle.
• [4] The remedy that the Mr Ross seeks from this Tribunal is that Hyundai cover the costs associated with removing all paint on the exterior of the Vehicle and repainting the entire exterior of the Vehicle (estimated to cost some $15,000) or the replacement of the Vehicle with a 'new like-model' vehicle or the payment of the original contract value of the Vehicle of $13,490.
• [5] Mr Ross states that the legislation that applies to his Application is the Fair Trading Act 1989 ('FTA') s 50A (Australian Consumer Law Queensland). Specifically, Mr Ross bases his Application on Hyundai's asserted failure to meet the consumer guarantee of acceptable quality under the Australian Consumer Law.[2]
• [6] Although Hyundai did not file in the Tribunal a response to the Application it did appear, by a representative, at the hearing of the Application.
• [7] The substance of Hyundai's response to Mr Ross' claim against it, as conveyed at the hearing, is that it provided a three-year paintwork warranty, that this was an adequate time for any paint problems with the Vehicle to be manifest. Here where, on Mr Ross' own evidence, the paint problem became apparent after about seven and a half years, Hyundai submits it was well beyond a time within which an acceptable quality guarantee should operate.

• [8] The documentary evidence consisted of the Application and its accompanying documents,[3] Mr Ross' statement of evidence[4] and a video recording made by Mr Ross on 9 October 2023 of the state of the paintwork on parts of the Vehicle when subject to a stream of water from a garden hose.[5] Mr Ross also gave oral evidence - essentially attesting to the veracity of the Application and his statement of evidence. The Respondent did not submit any evidence.
• [9] The sequence of events that gave rise to this Application, based on the uncontradicted evidence of Mr Ross, can be summarised as follows:

(a) In June 2014, Mr Ross purchased the Vehicle from a Sunshine Coast car dealer, Sunco Motors.

(b) In mid to late 2021, some seven years or more after Mr Ross' purchase of the Vehicle, he noticed that a 'fleck' of paint was missing from the bonnet of the Vehicle. By January 2022, Mr Ross observed that this fleck had propagated to delamination of a 10 cm diameter patch together with bubbling of paint elsewhere on the bonnet.

(c) In November 2022, at the suggestion of Sunco Motors, Mr Ross contacted the Customer Care section of the Respondent.

(d) Following on from this contact Sunco Motors undertook a paint inspection of the Vehicle on behalf of the Respondent. Correspondence between Mr Ross and the Respondent ensued. During the course of which Mr Ross raised with the Respondent his contention that the quality of the paintwork on the Vehicle failed to comply with the ACL guarantee of acceptable quality.

(e) On 23 June 2023, the Respondent advised Mr Ross that it was unable to assist him further with his complaint on the basis that it provided a three-year warranty on the Vehicle's paintwork and that this warranty had expired. The Respondent, through a customer care officer, stated that its position was that 'we do not believe that (the problem with the paintwork) is a manufacturing fault and would not be able to assist any further about repairs.'

• [10] At the hearing of this Application, Mr Ross maintained that the quality of the paintwork on the Vehicle was such that it failed to satisfy the (statutory) guarantee of acceptable quality and that he should be compensated for that failure. Mr Ross sought to bolster this contention by submitting, in his statement of evidence, details of what he asserted was a widespread problem with Hyundai vehicles by referencing a Facebook page on this topic.
• [11] The Respondent's position at the hearing remained that the problem with the paintwork was not a manufacturing fault and, thus by necessary implication, Hyundai has not failed to comply with the statutory guarantee as to acceptable quality.
• [12] The evidence that the Vehicle has paintwork that is flaking and bubbling and that this problem first manifest itself in or about late 2021 was not challenged by the Respondent. The issue for determination by this Tribunal is whether the Applicant has a maintainable claim on the basis that the Respondent failed to comply with the guarantee of acceptable quality and, if so, what remedy is available to him.
• [13] To address this issue, it is appropriate to set out the legislative framework under which the Applicant brings his claim.

• [14] The FTA is Queensland consumer protection legislation. Its principal objective[6] 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.

• [15] One way that this 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.
• [16] The FTA incorporates into Queensland law schedule 2 to a Commonwealth enactment - the Competition and Consumer Act 2010 (Cth).[7] Schedule 2 is the Australian Consumer Law ('ACL'). The FTA provides that the ACL applies as part of the law of Queensland.[8] In so applying it is referred to as the Australian Consumer Law (Queensland) ('ACL(Q)').[9]
• [17] 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 resolution of a dispute if the three requirements, set out in s 50A(1), are satisfied.
• [18] The first of these requirements is that the applicant to this Tribunal must have an application under one of the specified provisions of the ACL(Q) set out in the table to s 50A.
• [19] 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.
• [20] There is no dispute between the parties that requirements two and three have been satisfied.
• [21] As to the first requirement in s 50A, Mr Ross fails, in his Application, to nominate a specific provision of the ACL(Q), set out in the Table to s 50A of the FTA on which he bases his claim. What he did state in the Application[10] is that his claim is based on the failure of Hyundai 'to meet (its) consumer guarantee of acceptable quality.'
• [22] Consideration of the Table to s 50A in the light of the wording of the Application and the Respondent's concession that it is, for the purposes of this claim, the manufacturer of the Vehicle points to Mr Ross' claim being for damages under s 271 of the ACL(Q).
• [23] The ACL(Q) in s 271 relevantly provides as follows:
  1. Action for damages against manufacturers of goods

(1) If:

(a) the guarantee under section 54 applies to a supply of goods to a consumer; and

(b) the guarantee is not complied with;

an affected person in relation to the goods may, by action against the manufacturer of the goods, recover damages from the manufacturer.

(2) Subsection (1) does not apply if the guarantee under section 54 is not complied with only because of:

(a) an act, default or omission of, or any representation made by, any person other than the manufacturer or an employee or agent of the manufacturer; or

(b) a cause independent of human control that occurred after the goods left the control of the manufacturer; or

(c) ... ...

• [24] As stated above, Hyundai accepts that it is the 'manufacturer' of the Vehicle. This is an appropriate concession given the inclusive definition of manufacturer in s 7 of the ACL(Q).
• [25] Therefore, Mr Ross' claim for a breach of the guarantee of acceptable quality, if under under s 271 of the ACL(Q), is listed in the table to s 50A of the FTA and is thus within the Tribunal's jurisdiction.
• [26] Before turning to a consideration of whether the Respondent has failed to comply with the guarantee of acceptable quality, three further matters need to be addressed. They are firstly, whether Mr Ross was, at the time of his acquisition of the Vehicle, a consumer as that term is used in the ACL(Q), secondly, whether the Vehicle was supplied to him in trade or commerce and thirdly, whether Mr Ross commenced this proceeding within the statutory time limit for actions against manufacturers of goods.
• [27] As to the first of these matters, Mr Ross' unchallenged evidence is that he acquired the Vehicle for his use. I therefore find that the Vehicle was supplied to Mr Ross as a consumer.
• [28] As to the second of these matters, it is apparent that the Vehicle was supplied to Mr Ross in trade or commerce. Mr Ross' Application appends a copy of the contract under which he acquired the Vehicle. He is named in his contract with Sunco as the purchaser. The business of the Respondent is to manufacture automobiles. It supplied the Vehicle to Sunco, a dealer in motor vehicles, for sale. I find that the Vehicle was supplied to Mr Ross in trade or commerce.
• [29] As to the time limit, Mr Ross' uncontradicted evidence is that he first became aware of the problem with the paint in mid to late 2021. That is, comfortably within the three year time limit to commence a proceeding based on a failure to comply with the statutory guarantee as to acceptable quality.[11]
• [30] I therefore find that Mr Ross' claim is one that can be considered by this Tribunal.
• [31] The issue then becomes whether Mr Ross has established by evidence that the Respondent has not complied with the guarantee as to acceptable quality contained in the ACL(Q).
• [32] 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.

• [33] 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[12] and set out a useful summary of the relevant points concerning the application of that section.[13]
• [34] 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".

• [35] 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.[14]

(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.[15]

(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.[16]

(d) Section 54(2), which addresses 'defects' including 'hidden defects',[17] 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.

• [36] 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.

• [37] The factors that Mr Ross, in his evidence, points to as failing the guarantee of acceptable quality are that the Vehicle's paintwork was defective and, it would seem, by necessary implication, that the paintwork was not durable.
• [38] As this asserted defect was not apparent at the time of supply nor for over seven years after the supply, if the problem with the paint was a defect, it must have been a hidden defect.
• [39] The principal issue for determination can be phrased in the form of a question. Namely, would, at the time of supply, a reasonable consumer in the position of Mr Ross and fully acquainted with the state and condition of the goods, including any hidden defects, regard the Vehicle as being of acceptable quality?
• [40] Although it is not Mr Ross' subjective view that provides the answer to this question it is appropriate to note Mr Ross answers this question in the negative and highlights the following:

(a) That delamination of the paint after less than eight years shows that the paintwork was defective.

(b) That it was his expectation that the paintwork would not deteriorate in the manner that it has.

(c) That he regularly washed the Vehicle with standard car care products and otherwise maintained it appropriately.

• [41] Having regard to the nature of the matters set out in s 54(3), I regard the following factors are relevant in considering whether Mr Ross has established that the Vehicle failed to comply with the statutory guarantee of acceptable quality:

(a) The nature of the goods. The Vehicle, in common with all motor vehicles, undergoes an entropic deterioration over time.

(b) The provision of a three-year paintwork warranty by Hyundai is a relevant consideration. That warranty is a representation by Hyundai that a failure of the paintwork within that time will be addressed by Hyundai in accordance with the terms of the warranty. The passage of time after the expiration of the paintwork warranty should, I consider, signal to a reasonable consumer the understanding that the passage of time after the expiration of the paint warranty diminishes any continuing responsibility by the manufacturer. Here, the time that had elapsed since the Vehicle was new was over seven years. That is a period of over four years after the expiration of Hyundai's paint warranty.

• [42] I note that there was no evidence from expert witnesses regarding the cause or causes of the delamination of the paint on the Vehicle. Due to the absence of such evidence, I am unable to find, on the evidence before me, that the Vehicle suffered from a hidden defect so as to constitute non-compliance by Hyundai with the guarantee of acceptable quality. As a consequence, Mr Ross' Application fails and is dismissed.

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

[2] Exhibit 1, the Application, at Part F.

[6] FTA s 3.

[7] Ibid, pt 3 div 2-5.

[8] Ibid, s 16.

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

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

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

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