Addis v McMoore Motor Co - [2022] QCAT 370

QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL

CITATION:

Addis v McMoore Motor Co [2022] QCAT 370

PARTIES:

christopher addis

(applicant)

v

mCMoore motor co

(respondent)

APPLICATION NO/S:

MVL265-21

MATTER TYPE:

Motor vehicle matter

DELIVERED ON:

14 October 2022

HEARING DATE:

4 August 2022

HEARD AT:

Brisbane

DECISION OF:

Member Howe

ORDERS:

Application dismissed

CATCHWORDS:

TRADE AND COMMERCE – COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – GUARANTEES, CONDITIONS AND WARRANTIES IN CONSUMER TRANSACTIONS – GUARANTEES, CONDITIONS AND WARRANTIES – where the applicant purchased a 14 year old BMW sedan – where the applicant claimed numerous mechanical problems were identified in the vehicle – where the evidence in support of the claims about defects was poor – where various mechanical problems were rectified under warranty – where the age of the vehicle and kilometres travelled a consideration – where the claim that turbo chargers were defective as at date of sale was not established on the evidence – where there had not been opportunity given to the respondent to rectify minor defects before third party repair – where a compromise of claims associated with defects was not established on the evidence

Competition and Consumer Act 2010 (Cth), Schedule 2, s 54, s 259(2)

Williams v Toyota Motor Corporation Australia Limited [2022] FCA 344

APPEARANCES & REPRESENTATION:

Applicant:

Self-represented

Respondent:

Self-represented by P Moore

REASONS FOR DECISION

Mr Addis purchased a 2007 BMW sedan on 5 February 2021 from McMoore Motor Co for $16,500. It had travelled 151,575 kilometres (‘kms’).
As at date of hearing it had done 169,080 kilometres, meaning Mr Addis had travelled 17,505 kilometres in eighteen months of ownership.
Mr Addis gave evidence that only a couple of days after buying the vehicle it broke down. A warning light came on. Mr Addis took it to Bruce Lynton BM Service, who found a faulty throttle actuator.[1] It was replaced under vehicle warranty.
[1]Invoice dated 18 February 2021.
The parties were vague about many aspects of the dispute, including what defects were relied on to support Mr Addis’ general complaint that the car was not of acceptable quality. A number of problems were repaired partially or fully under a warranty. This appears to have been an extended warranty offered at sale. There was no evidence given about the terms of the warranty.
Bruce Lynton BM Service made a recommendation at the foot of the invoice for work done on the throttle actuator that the turbochargers be replaced, citing “waste gate rattles”, and also the sump and rocker cover gaskets and “vac lines”, but offering no elaboration. That repairer also noted various warning lights had been triggered on the dash, referred to oil leaks in the transmission sump and ‘electrical sleeve” and that the air conditioning system was not cooling the car.
Some weeks later, says Mr Addis, the battery failed. He purchased a replacement, the same type he says as the existing battery, but that too failed within three weeks. He was told to purchase a genuine BMW battery. He did, and he said that fixed the problem. Mr Addis paid for the batteries himself.
During hearing Mr Addis said that the following defects had been repaired under warranty with contribution from him as follows:
Defect   Warranty payment       Contribution by Mr Addis
Coolant leak  $   600  $   275.80
Turbo chargers  $2,000  $1,279.40
Water pump  $   600  $   477.73
Coils  $   700  $          0
Throttle unit  $1,500  $   475.00
Not all those costs are established by supporting documentary evidence.
There are invoices to support the payments by Mr Addis for replacement of the turbo chargers. There is an invoice from Nerang Euro Parts & Service dated 30 April 2021 for $275.80 for both a water pump and “coolant concentrate”. There is no supporting invoice or receipt for a separate water pump charge which Mr Addis claims cost him $477.73 with the balance of $600 paid under warranty.
There is the invoice from Bruce Lynton BM Service for $477.73 for the throttle actuator.
Mr Addis said he had also paid $319 for a map sensor to be replaced and there is an invoice from Nerang Euro Parts & Service dated 9 November 2021 for that work in that amount.
Mr Addis said he estimated he had spent $6,000 on repairs, but offered no other documentary evidence to support that claim. I am not prepared to accept that broad assertion without evidence to support it.
Concerning the documented repair work, the work done on the throttle actuator was done within 2 weeks of purchase. I conclude it was a defect in the vehicle and more likely than not to have been present at time of sale.
Similarly the coolant leak is established. The respondent refers to a coolant leak found by a mechanic engaged by the respondent to inspect the vehicle, which prevented the mechanic from doing work on the vehicle until the leak was fixed.
Concerning the turbo charger repairs, this was first commented on in the Bruce Lynton BM Service invoice. The comment lacks context. It is not clear whether the turbo chargers were defective and were not working, or that new turbo chargers would simply give better performance than continuing with the existing.
In undated SMS messages tendered by Mr Addis, there is a quote from Bruce Lynton BM Service of $6,066.50 to replace the two turbo chargers. That was not accepted. The turbo chargers were replaced by Nerang Euro Parts & Service on about 1 November 2021 under warranty. The latter workshop does not offer any commentary about the condition of the old turbo chargers. The description of the work done is “replace turbos and downpipes as requested.” As at date of that work the odometer reading showed 158,991 kms, which means the vehicle had travelled 7,416 kms since purchase.

Guarantee as to acceptable quality

Mr Addis wants to return the vehicle and be given a refund of the purchase price. In addition he wants to recover out of pocket expenses of $4,000. It is unclear in his application, but he appears to also want to be paid $25,000 representing the increased value of the vehicle after repairs – presumably after the vehicle is returned to the respondent. Alternatively he wants $15,000 plus “further repairs” as listed (no quoted costs).
Before any remedy is considered, Mr Addis must establish a cause of action. The basis of his claim is said to be the mechanical faults with the vehicle. His claim is to be understood as a claim for breach of guarantee associated with the sale, namely breach of the guarantee as to acceptable quality under the Competition and Consumer Act 2010 (Cth) Schedule 2 (‘ACL’), s 54.
Section 54 guarantee as to acceptable quality provides:
(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;
(e)   any other relevant circumstances relating to the supply of the goods.
In Williams v Toyota Motor Corporation Australia Limited[2] the Federal Court said:
The continued use of the conjunction “and” in s 54(2) makes clear that goods must possess all of the qualities listed in s 54(2), to the requisite standard, in order to comply with the guarantee of acceptable quality. Failure to possess any one of those qualities will result in a failure to comply with the guarantee: see Vautin v By Winddown, Inc (formerly Bertram Yachts)(No 4)[2018] FCA 426; (2018) 362 ALR 702 (at 732 [142(d)–(f)] per Derrington J); Australian Competition and Consumer Commission v Jayco Corporation Pty Ltd[2020] FCA 1672 (at [25] per Wheelahan J).[3]
[2][2022] FCA 344.
[3][164].
The guarantee as to acceptable quality applied with respect to this vehicle. Was the guarantee complied with? Was the vehicle free of defects, safe and durable and fit for purpose as a reasonable consumer fully acquainted with the state and condition of the goods would regard as acceptable?
It was a 14 year old second hand motor vehicle which had travelled 151,575 kms when purchased. Mr Addis paid $16,500 for it. Mr Moore described it as a high performance vehicle, but old. That seems fair comment. There is little else by way of evidence to assist in answering the question.
All vehicles inevitably experience engine and other running wear, not to mention paint and body decline. The parties tender no evidence or expert opinion on the condition to be expected of a turbo charged vehicle which has travelled 151,575 kms and is 14 years old. Those factors cannot be forgotten. They are relevant circumstances and an aspect of the nature of the goods enjoined for consideration by s 54(3) ACL
I note there is no evidence about any representations made by the respondent at time of sale concerning the condition of the vehicle.
The most significant defect claimed was with respect to the turbo chargers. They have been replaced under the extended warranty. The initial report from Bruce Lynton BM Service merely said this about them however: “Further work recommended turbocharger replacement (waste gate rattles)”. That report was dated 18 February 2021. There is no mention of turbo chargers not working in the report. It may be the case that they were working but the car’s performance would improve with new turbo chargers.
Then six months after that on 16 August 2021 there is a vehicle inspection report by German Auto Dynamics which includes the comment “turbo charger waste gates worn, causing major lack of boost pressure.” Again, it is not clear whether the turbo chargers were working but underperforming, and whether that was to be expected given the age of the vehicle and distance travelled.
Another month later there is a report from DL Mechanical & Automotive Services on 16 September 2021 which states: “Diagnosed vehicle to find loss of power and smoke being exhaled from vehicle, removed components to inspect turbos, found worn shaft seals and bearings, recommend 2 x complete replacement turbos, odo 159078”.
Given the finding of smoke associated with the turbo chargers, loss of power and worn shaft seals and bearings, I determine they had failed at that point. But that was 6 months after sale and the vehicle had travelled another 7,503 kms.
Another month and a half after that, on 1 November 2021, the turbo chargers were replaced under warranty.
Without the terms and conditions of warranty it is unclear on what basis the claim was made and paid. Presumably, as at 1 November 2021, the warrantor accepted the turbo chargers had failed.
The comments about replacement of turbo chargers in the various invoices appear to be simply that, comments. As stated, there is no expert automotive evidence to assist in determining whether a vehicle might be able to travel 7,503 kms with defective turbo chargers, or whether a defect should have been apparent as at date of sale (such as the smoking detected by DL Mechanical & Automotive Services on 16 September 2021).
The issue about turbo chargers was raised with Mr Moore of the respondent company shortly after the throttle assembly had been repaired under warranty. In an email from Mr Moore to Mr Addis dated 5 March 2021 Mr Moore informed Mr Addis that the turbo gate rattle mentioned in the Bruce Lynton BM Service invoice had no effect on the mechanical operation or performance of the vehicle. It was typical for a car of the BMW’s age and kilometres and it was a maintenance item. He challenged the claim that the turbo chargers had failed.
That may well be the case. The respondent did not call expert evidence on the point either however.
On the evidence led I am not persuaded that the turbo chargers were damaged or defective or not working as at date of sale. Worn yes, but not defective. I therefore do not conclude that there was a breach of the guarantee as to acceptable quality associated with turbo chargers as at date of sale, which is a requirement for successful claim for relief pursuant to the ACL provisions.

Other defects

There are numerous components and parts of the vehicle identified in invoices from various of the workshops which the workshops suggest should be addressed.
The German Auto Dynamics vehicle inspection report dated 16 August 2021 notes various problems with the car. A diagnostic scan found the ABS Hydraulic Pump unit faulty and a “footwell module” possibly faulty. Besides commenting about the turbo charger waste gates, the report mentions worn rear shock absorbers and bump stops, various oil leaks and mentions the brake discs are undersized. The odometer reading at the time was 157,994 kms.
There is also a vehicle condition report from Auto Masters dated 30 August 2021 which talks about oil leaks and again the problem with undersized brakes and ”soft” rear shock absorbers.
In an invoice from Nerang Euro Parts & Service dated 9 November 2021 that workshop suggests further work required with respect to the exhaust, a leaking sump gasket and transmission, “ABS faults”, and an upgraded intercooler and charge pipe being necessary “to benefit from tune.”
There are no estimates of costs of repair or replacement given; there is no indication whether the faults are serious or not; there is no information as to whether such issues are common to a car of this age having travelled the kilometres it has.
I am unable to conclude that these items of comment constituted defects amounting to a breach of the guarantee as to acceptable quality, taking into account the age of the vehicle and distance it had travelled.
Similarly with respect to the failed map sensor which failure occurred in November 2021.
I conclude otherwise with respect to the throttle actuator. That arose almost immediately after sale. Similarly with respect to the water pump, though that was detected after the problem with the throttle actuator. I determine it is more likely than not that the defects existed in the vehicle as at date of supply and therefore they constituted a breach of the warranty as to acceptable quality.
I further determine however that they were not major defects, and therefore they were minor defects.
By s 259(2) of the ACL:
(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.
The throttle actuator was repaired under warranty. Mr Addis said he paid some of the cost, $475, the warrantor paying the balance, $1500. There is no evidence however that Mr Addis asked the respondent to remedy the problem and the latter refused before having the defect repaired by Bruce Lynton BM Service. That was a precursor requirement for entitlement to recover under s 259(2) ACL. Indeed in the email from Mr Moore to Mr Addis of 5 March 2021 Mr Moore refers to Bruce Lynton BM Service as a mechanic unknown to the respondent and that any further work to be done on the vehicle required initial inspection by the respondent’s mechanic.
Mr Addis is therefore not entitled to recover the balance paid by him in respect of the throttle actuator from the respondent.
Similarly with respect to the coolant leak. That was repaired by Nerang Euro Parts & Service on 30 April 2021. There is no evidence to suggest that the respondent was asked to repair the problem before it was fixed by Nerang Euro Parts & Service.
Indeed prior to that Mr Addis had complained to the Office of Fair Trading on 4 March 2021 and Mr Addis agreed that conciliation occur between him and the respondent. It seems one of the matters of complaint was the coolant leak. Mr Moore for the respondent wrote to Fair Trading on 24 March 2021 offering to pay Mr Addis $500 towards “out of pockets”, which was open for acceptance for 7 days. Mr Moore referred to the coolant leak issue in the email to Fair Trading.
The Office of Fair Trading forwarded the offer to Mr Addis. Mr Addis accepted the offer and Mr Moore paid $500 on that date. That payment is not disputed.
Mr Addis said at hearing that there had been a misunderstanding about the acceptance of the payment. He had thought it was a good will gesture and the respondent would additionally assist with repairs to the vehicle.
Whether the parties agreed a compromise of all issues and claims arising from such is unclear. Mr Moore submitted in evidence his SMS message to Mr Addis in which he states the respondent’s position that the payment was to “bring this interaction and our involvement to an end.” However the SMS is undated and also contains part of what appears to be an earlier message from Mr Addis giving his bank details but also referring to an appointment with a mechanic on 13 April “to make a list of issues. I will forward them to you if it helps.”
I am not prepared to accept the parties agreed to a compromise of all matters between them. I find however that Mr Addis accepted the payment understanding that the issue raised by him about the water coolant problem was covered by the payment. The payment had to be for something.
But in any case, as with the throttle actuator issue, the remedial relief offered a consumer by s 259(2) are not available to Mr Addis for the same reason as disqualifies him from claiming for the throttle actuator, repairs effected without giving the supplier an opportunity to remedy the defect.
Mr Addis fails in his application.