[2025] QCAT 331
General information, not legal advice.
Queensland Civil and Administrative Tribunal
2025-09-02
Original judgment source is linked above.
TRADE AND COMMERCE - COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION - CONSUMER PROTECTION - GUARANTEES, CONDITIONS AND WARRANTIES IN CONSUMER TRANSACTIONS - GUARANTEES, CONDITIONS AND WARRANTIES - Where vehicle advertised as being in mechanically perfect condition prior to purchase - where vehicle engine suffered catastrophic failure and engine required replacement three months after purchase - where respondent refused to allow return of vehicle and to refund purchase price - where worn components in engine would have been present when applicants purchased vehicle - where respondent failed to comply with consumer guarantees under Australian Consumer Law - where failure to comply was a major failure as a reasonable consumer would not have purchased the vehicle if acquainted with the pre-existing defect - where applicants gave notice of their intention to reject the goods within the rejection period - where claims for purchase price, towing fees, loan interest payments and insurance allowed - where costs limited to recovery of prescribed fee
Australian Consumer Law, s 54(2), s 54(3), s 259, s 260, s 262, s 263
Fair Trading Act 1989 (Qld), s 50A, s 50C
APS Satellite Pty Ltd (formerly known as "Sky Mesh Pty Ltd") v Ipstar Australia Pty Ltd [2016] NSWSC 1898
Effem Foods Ltd v Nicholls [2004] NSWCA 332
Ferraro v DBN Holdings Aust Pty Ltd T/As Sports Auto Group [2015] FCA 1127
Hinterland Express Pty Ltd v Inchcape European Automotive Pty Ltd & Anor [2023] QCATA 130
Howarth & Anor v Biscamoss Pty Ltd [2022] QCATA 72
Jarmain v Market Direct Group Pty Ltd t/as MDC Camper Trailers & Offroad Caravans [2022] QCAT 375
Knox v Tait Motors Pty Ltd t/as Tait Auto Group [2021] QCATA 87
Medtel Pty Ltd v Courtney [2003] FCAFC 151; (2003) 130 FCR 182
Sazdanoff-Haynes v MLS Wholesales Pty Ltd [2023] QCAT 37
Vautin v BY Winddown, Inc. (formerly Bertram Yachts) (No 4) [2018] FCA 426
(a) The engine of the Colorado failed 3 months and 13 days after purchase by Mr Sheppard during which time the vehicle had travelled 6,079 kilometres;
(b) No service records for the vehicle were available until 90,000 kilometres;
(c) The 105,000 kilometre service was carried out at 2,312 kilometres over the recommended interval;
(d) The 120,000 kilometre service was not carried out;
(e) The 135,000 kilometre service was carried out at 7,394 kilometres over the recommended interval;
(f) The 150,000 kilometre service had not been carried out;
(g) At the time of engine failure, the Colorado had 7,708 kilometres over the recommended interval;
(h) It is likely that internal engine failure has occurred;
(i) The likely cause of the engine failure is one or more of the big end bearings failing which caused the connecting rod to seize on the crankshaft and or caused the connecting rod to fracture;
(j) The type of failure would be deemed premature and was likely due to insufficient servicing, specifically the lack of regular oil changes;
(k) The engine oil's lubricating and viscosity were likely compromised considering the vehicle had travelled 7,708 kilometres over the recommended service interval, contributing to the engine failure;
(l) Another contributing factor to the engine failure would likely be the history of irregular oil changes which accelerated engine wear;
(m) If the vehicle had undergone regular oil changes in accordance with the manufacturer's recommendations for all prior service intervals, with only the last service overdue by 7,708 kilometres, the engine would not have failed;
(n) The engine would need to be removed and dismantled to determine the exact cause of failure.
(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.
(a) The Colorado's engine failed on 17 August 2023;
(b) At the time the engine failed Mr Sheppard had driven the vehicle 6,079 kilometres since purchase just over three months prior;
(c) Service records for the vehicle, only available after 90,000 kilometres, indicate that:
(i) the 105,000 kilometre service was carried out at 2,312 kilometres over the recommended interval;
(ii) the 120,000 kilometre service was not carried out;
(iii) the 135,000 kilometre service was carried out at 7,394 kilometres over the recommended interval;
(iv) the 150,000 kilometre service had not been carried out;
(d) The likely cause of the engine failure was one or more of the big end bearings failing which caused the connecting rod to seize on the crankshaft and or cause the connecting rod to fracture;
(e) The type of failure would be deemed premature and was likely due to insufficient servicing, specifically the lack of regular oil changes;
(f) The engine oil's lubricating and viscosity were likely compromised considering the vehicle had travelled 7,708 kilometres over the recommended service interval, contributing to the engine failure;
(g) A further contributing factor to the engine failure would likely be the history of irregular oil changes which accelerated engine wear;
(h) If the vehicle had undergone regular oil changes in accordance with the manufacturer's recommendations for all prior service intervals, with only the last service overdue by 7,708 kilometres, the engine would not have failed;
(i) the worn componentry in the engine leading to the ultimate engine failure was present when Mr Sheppard purchased the Colorado;
(j) the fact the Sheppards did not undertake the 150,000 kilometre scheduled service after purchase and before the engine failure did not cause or contribute to the engine failure in circumstances where, had the worn componentry not been present at the time of purchase, the failure to undertake the service of itself would not have resulted in the failure of the engine;
(k) The engine failure may be characterised as catastrophic and the type of engine failure experienced by the Colorado was not normal for that particular type of motor.
(a) The vehicle was a 2013 Holden Colorado LT RG diesel manual 4x4 utility, model year 2014 which had travelled 150,930 kilometres. The Colorado, while an older model vehicle, did not have excessive mileage, particularly for a diesel powered vehicle;
(b) The Sheppards paid $22,450.00 for the Colorado in addition to trading in their motor vehicle for an agreed allowance of $3,000. This was not an insubstantial sum;
(c) Galaxy Autos represented the Colorado to be in mechanically perfect condition.
Was there a 'major failure' by Galaxy Autos to comply with a consumer guarantee?
(a) the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or
(b) the goods depart in one or more significant respects:
(i) if they were supplied by description - from that description; or
(ii) if they were supplied by reference to a sample or demonstration model - from that sample or demonstration model; or
(c) the goods are substantially unfit for a purpose for which goods of the same kind are commonly supplied and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or
(d) the goods are unfit for a disclosed purpose that was made known to:
(i) the supplier of the goods; or
(ii) a person by whom any prior negotiations or arrangements in relation to the acquisition of the goods were conducted or made; and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or
(e) the goods are not of acceptable quality because they are unsafe.
Was notice that the Sheppards rejected the Colorado given within the 'rejection period'?
(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.
(a) Tow truck fees $ 440.00
(b) Loan repayments $12,639.62
(c) Loan interest $ 3,673.80
(d) Balance of loan to be paid out $15,572.62
(e) Value of vehicle traded in $ 3,000.00
(f) Insurance on vehicle $ 1,598.61
(a) Refund of purchase price $25,450.00
(b) Towing charges $ 440.00
(c) Interest paid on loan $ 3,673.80
(d) Insurance paid $ 659.27
(a) Filing fees $ 379.50
(b) Assessor fees $ 600.00
(c) Service postage fees $ 17.75
(a) only if the party is a respondent against whom the tribunal has made a final decision; and
(b) only to order the party to pay to the applicant the amount of any prescribed fee paid by the applicant on filing the application for the proceeding.
(a) Galaxy Autos has not acted in a way that unnecessarily disadvantaged the Sheppards;
(b) The proceeding was not overly complex. Rather, the issues were clearly identified, straightforward and narrow in compass;
(c) Despite being successful I do not consider the relative strengths of the parties' claims to be persuasive one way or the other in relation to the issue of costs;
(d) There is no evidence before the Tribunal about the financial circumstances of each of the parties and so this consideration is not persuasive either way;
(e) I have considered whether the success by the Sheppards in the proceeding will be eroded if they are not awarded costs. I do not consider this factor to be sufficiently compelling to justify an order for costs.
(a) The Sheppards must, at their expense, return the Colorado motor vehicle the subject of these proceedings to Galaxy Autos within 7 days of the date of these orders.
(b) Galaxy Autos must pay to the Sheppards the amount of $30,233.07 within 14 days of the delivery up of Colorado.
[2] Medtel Pty Ltd v Courtney [2003] FCAFC 151; (2003) 130 FCR 182.
[4] Effem Foods Ltd v Nicholls [2004] NSWCA 332.
[5] Knox v Tait Motors Pty Ltd t/as Tait Auto Group [2021] QCATA 87.
[8] APS Satellite Pty Ltd (formerly known as "Sky Mesh Pty Ltd") v Ipstar Australia Pty Ltd [2016] NSWSC 1898.
[9] See Hinterland Express Pty Ltd v Inchcape European Automotive Pty Ltd & Anor [2023] QCATA 130.
[10] Vautin v BY Winddown, Inc. (formerly Bertram Yachts) (No 4) [2018] FCA 426; Ferraro v DBN Holdings Aust Pty Ltd T/As Sports Auto Group [2015] FCA 1127; In Jarmain v Market Direct Group Pty Ltd t/as MDC Camper Trailers & Offroad Caravans [2022] QCAT 375 it was held that QCAT did not have the power to order the repayment of the purchase price. A contrary conclusion was reached in Sazdanoff-Haynes v MLS Wholesales Pty Ltd [2023] QCAT 37. The decision in Sazdanoff-Haynes v MLS Wholesales Pty Ltd is consistent with Vautin and Ferraro. In Howarth & Anor v Biscamoss Pty Ltd [2022] QCATA 72 it was held that QCAT has jurisdiction to make an order requiring the supplier to pay to the consumer a stated amount of money, namely the amount of the refund payable under s 263(4)(a).
Sheppard
Piryani Pty Ltd t/as Galaxy Autos [2025] QCAT 331
(2003) 130 FCR 182