Carroll v Pollock Wholesale Pty Ltd
[2014] ACAT 14
•13 March 2014
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
CARROLL v POLLOCK WHOLESALE PTY LTD
(Civil Dispute) [2014] ACAT 14
XD 13/1063
Catchwords: CIVIL DISPUTE – sale of defective vehicle; used vehicle – guarantees under the Australian Consumer Law: fitness for purpose and acceptable quality; – whether respondent car sale firm’s conduct misleading or deceptive: description of model number of vehicle; at the time of sale; statement about service period – whether applicant has the right to reject vehicle - quantum of loss or damages
Legislation:Australian Consumer Law, ss 18, 29, 54, 236, 259, 260, 261, 262 and 263
Tribunal: Ms W. Corby – Senior Member
Date of Orders: 13 March 2014
Date of Reasons for Decision: 13 March 2014
ACT CIVIL AND ADMINISTRATIVE TRIBUNAL XD 13/1063
BETWEEN:
MARY-ANNE CARROLL
Applicant
AND:
POLLOCK WHOLESALE PTY LTD
Respondent
TRIBUNAL: Ms W. Corby – Senior Member
DATE:13 March 2014
ORDER
The Tribunal Orders that:
The respondent is to pay the applicant the sum of $4,630.75 calculated as follows:
(a)Service fee 22 April 2013 – Rolfe Motors – $516.30;
(b)Replacement brake pads and discs – 23 April 2013 – Rolfe Motors - $1,184.80;
(c)Replacement of ‘throttle body’ 17 May 2013 – Rolfe Motors - $1099.65;
(d)Replacement of ‘strut tops’ and ‘timing belt’ 27 May 2013 – Braddon Service Centre - $1,310.00;
(e)Towing –
i. 7 May 2013 – Lonsdale Auto - $88.00; and
ii. 17 May 2013 – Lonsdale Auto - $88.00; and
(f)Inspection fees –
i. 6 May 2013 - Braddon Service Centre - $159.00; and
ii. 7 May 2013 - Lonsdale Auto - $185.00.
The respondent is to pay to the applicant the amount of the application fee for the ACAT application paid by the applicant.
The respondent is to pay the amounts ordered within 21 days of the date of these orders.
………………………………..
Ms W. Corby
Senior Member
REASONS FOR DECISION
On 14 March 2013 the applicant bought a used motor vehicle from the respondent. The vehicle is a 2001 Volvo model S60 2.4 20V SE that on the date of purchase had an odometer reading of 120,108 km (the ‘vehicle’). The applicant paid $8,250.00 for the vehicle. The applicant says that as a result of serious defects in the vehicle at the time of purchase it required repairs and at times was not driveable. The applicant also asserts that she was misled in relation to the model number of the vehicle.
The applicant says that as a result of the defects in the vehicle the respondent has supplied goods to her in breach of guarantees imposed by operation of the Australian Consumer Law (ACT) (the ‘ACL’). The applicant seeks damages for the expenses she incurred in repairing the vehicle and for the costs associated with registration and insurance of the vehicle when it was not driveable. In addition, the applicant seeks to reject the vehicle and return it to the respondent and be reimbursed the purchase price that she paid.
The respondent denies that it is liable to the applicant as claimed. The respondent says that if it is found to be liable to the applicant at all, then the extent of that liability is limited to the amount of that part of the cost of a ‘service’ of the vehicle, that the applicant arranged and which was carried out by Rolfe Motors on 22 or 23 April 2013, which does not relate to replacement of brake pads or discs.
The hearing
The matter was heard on 25 November 2013 and 17 February 2014 by the ACT Civil and Administrative Tribunal (the ‘Tribunal’).
On 25 November 2013, the applicant, John Carroll (her husband) and Liam Carroll (their son) attended at the hearing. On 17 February 2014, the applicant, Mr Carroll and the applicant’s witness, Mr Tiyce, attended.
The applicant advised that she had purchased the car primarily for use by her sons Liam Carroll and Thomas Carroll. Liam Carroll and Thomas Carroll had been consulted about and had apparently made a contribution towards the purchase price of the vehicle. The applicant, Liam and Thomas all drove the vehicle on occasions subsequent to its purchase on 14 March 2013.
On 25 November 2013 and 17 February 2014, Mr Pollock attended the hearing to represent and give evidence on behalf of the respondent. Mr Rolfe, from the Motor Traders’ Association of NSW, attended primarily to support and make submissions on behalf of the respondent. In order to avoid confusion, the Tribunal notes that Mr Rolfe is not associated with Rolfe Motors, which is the business that undertook certain work on the vehicle.
Mr Tiyce, from Rolfe Motors, was subpoenaed by the applicant to produce documents and give evidence at the hearing on 25 November 2013. Mr John Carroll, the applicant’s husband, made several calls during the hearing in an effort to contact Mr Tiyce. During those calls Mr Carroll was told by someone that Mr Tiyce was on his way. However, although the hearing went until quite late, Mr Tiyce did not arrive. The Tribunal reserved its decision.
On 27 November 2013, Mr Tiyce wrote to the Tribunal and the applicant to explain that as a result of a family matter he had not felt able to attend the hearing on 25 November 2013. The applicant sought to have the matter relisted so that Mr Tiyce’s evidence could be taken. The respondent objected to the matter being relisted as the respondent’s ‘witness’ – Mr Rolfe - would be required to take a further day off work to travel from Sydney if that occurred. As at 27 November 2013, the Tribunal had not made orders in relation to the hearing on 25 November 2013.
The Tribunal concluded that Mr Tiyce had provided a reasonable explanation for his absence on 25 November 2013. The Tribunal considers that the applicant, who had used the subpoena process and had made efforts to contact Mr Tiyce on the day of the hearing, should not be precluded from having
Mr Tiyce’s evidence heard. In the Tribunal’s opinion there were several matters relating to the issues in dispute that could be better clarified and addressed if
Mr Tiyce gave evidence and the respondent had the opportunity to test that evidence.The Tribunal was willing to seek to address the respondent’s concerns by allowing Mr Rolfe to ‘attend’ the resumed hearing by telephone so that he could hear and test, by questioning, Mr Tiyce’s evidence. The matter was relisted for further hearing on 17 February 2014.
Legislation
This transaction between the parties falls within the operation of the relevant provisions of the Australian Consumer Law (ACT). These provisions are set out in Schedule 1 attached to these reasons for decision.
Background
The following paragraphs set out the Tribunal’s understanding of events, based on the evidence provided at the hearing and the documentation filed by the parties.
On or about 12 March 2013, the applicant saw the vehicle at the respondent’s business.
The sales person, Mr Somers – a long term employee of the respondent who has since left the business and did not attend the hearing – spoke to the applicant. He suggested that the applicant could view the details about the car that were displayed on a motor vehicle website - carsales.com. The applicant was not aware at that stage of the model number of the vehicle. Liam Carroll said that there was no printed information displayed with the vehicle at the respondent’s car yard to identify the specific model number. The applicant and or her family viewed the details about the car on the website at some time after she first saw the vehicle and before the purchase on 14 March 2013.
The vehicle model which is an ‘SE’ was wrongly described as a ‘T5’ on the car sales website. Liam Carroll advised the Tribunal that he and Thomas Carroll (his brother) had, based on that information, then viewed the ‘indicative price range’ of vehicles which is a feature of the website. Liam Carroll said that in the ‘indicative price range’ area of the website, a 2001 Volvo ‘T5’ (which is a ‘turbo charged’ model) had a price range of $7,200 to $9,000. By comparison, the ‘SE’ model, which is the actual model of the vehicle, had a price range of $4,800 to $6,500.
The asking price of the vehicle, which they assumed from the information in the website listing was a ‘T5’, of $8,250 was within the ‘indicative price’ range. The price of the vehicle was more expensive than the top of the ‘indicative price’ range for the ‘SE’ model.
The applicant purchased the vehicle on 14 March 2013. Notwithstanding that the paperwork consistently and correctly referred to the model of the vehicle as an ‘SE’, the applicant proceeded to finalise the purchase. It does not appear that the applicant raised this matter with the respondent.
The vehicle was then driven, apparently without incident, until on or about
5 April 2013 (about 3 weeks after purchase). A light illuminated on the dash of the car indicating that a ‘service’ of the vehicle was required.At the time of purchase the vehicle had done 120,108 km. Apparently, the service log book in the vehicle reveals that the service which would normally have been carried out at 120,000 had in fact been carried out at about
112,000 km. No further service had been done. At the time the vehicle was purchased Mr Somers advised the applicant that the next service would not be due until the car had done a further 15,000 km. As Mr Somers was not at the hearing, it is not clear on what information he based this assertion.Mr Pollock and Mr Rolfe at the hearing advised that there are two matters to be considered. Firstly the ‘service light’ in the car will not necessarily be a true indication of when a service is actually required as both the time between services and the number of kilometers travelled may influence when the next service is due. Secondly, because the 120,000 km service had been done, albeit 8,000 km before ‘required’, it was understandable that Mr Somers had mistakenly informed the applicant as to when the next service might be expected.
The applicant said that, because of the information provided by Mr Somers, she was surprised to see the ‘service light’ so soon after purchase. The Tribunal notes that the odometer reading recorded on the Rolfe Motors invoice dated
23 April 2013 was 121,236 km.Given that the car was to be regularly driven by the applicant’s sons, she was keen to ensure that it was well maintained and as safe as possible. Therefore, she decided, although not happy about it, to arrange for the service to be carried out.
Mr Pollock said that if the applicant had contacted the respondent business at that time, given the statement by Mr Somers, he would almost certainly have agreed to arrange for the service to be carried out at the respondent’s expense. He noted that he would have arranged for this to be done at ‘trade’ rates. However the applicant did not contact the respondent at that time.
The applicant arranged for the service to be carried out by Rolfe Motors on
22 April 2013. Apparently, a feature of the car, which Mr Pollock conceded was a ‘selling point’ and the applicant noted made it attractive to her, was that it had had only one Canberra based owner. That owner had consistently had the vehicle serviced and maintained by Rolfe Motors. Rolfe Motors has/had a Volvo dealership where the vehicle was, apparently, initially purchased in about 2001. The documentation with the vehicle confirmed this ownership and service history.When the applicant delivered the car to Rolfe Motors she was asked ‘is this a major or minor service?’ The applicant advised the Tribunal that, given its recent purchase and the fact that she had not expected to have it serviced so soon, she told them it was a ‘minor’ service.
As the applicant was on her way to collect the vehicle on 22 April 2013, she received a call from someone at Rolfe Motors who rang to say that they had carried out the service, but in doing so they found that the front and rear brake discs and pads should also be replaced at a cost of about $1,300. The applicant said that she was shocked that such expensive and extensive work was needed. The applicant rang her husband. They agreed that because of safety concerns they would have the work done. The applicant then collected the car on 23 April 2013. The service invoice recommended that, in addition to the work that had been done, the ‘strut tops’ be replaced. However, there was no suggestion that this was ‘urgent’.
Liam Carroll drove the car on the morning of 24 April 2013 without incident. Thomas Carroll drove the car that evening. As he was driving slowly through the Australian National University grounds, the car began to shudder. Neither the brake nor accelerator pedal responded when depressed. Fortunately, he was able to bring the vehicle to a halt. He turned it off and waited. He did not have a phone with him and so was not able to ring anyone to help. He was able to restart the car and then drove slowly to his friends’ house nearby. On the way, he experienced problems with the accelerator although the brakes were again working. His friends were not home, so when he restarted the car and both brakes and accelerator were working, he drove to his family home in nearby Reid, ACT. He drove very slowly and carefully testing the brakes regularly. He parked the car at his home.
As 25 April 2013 was a public holiday, on Friday, 26 April 2013 the applicant rang Rolfe Motors. She said she was unwilling to drive the car because of safety concerns. Rolf Motors arranged to have the vehicle towed. Rolf Motors worked on the vehicle on Friday, 26 and or Monday, 29 April 2013. The applicant collected the vehicle on 30 April 2013. The Rolfe Motors’ ‘report’ was that they had tested the brakes but found no problem. The ‘report’ did however note that the brakes had been ‘hot’ and they had ‘replaced the brake fluid’. They did not charge for the towing, the inspection nor for the brake fluid replacement. In this ‘report’, Rolfe Motors also recommended that the ‘throttle body’ should be replaced. The odometer reading was recorded as 121,291 km, being 55 km more than on 23 April 2013.
The applicant said that at this point, on 30 April 2013, she rang the respondent business and spoke to Mr Somers. She says that until then she had assumed that they had had ‘bad luck’ and she was willing to meet the costs they had incurred to that date. However at that point not only had she been required to organize a service and replacement of front and rear brake pads, discs and brake fluid, but she had now been advised that in addition to the ‘strut tops’, the ‘throttle body’ also required replacement. She had had the car less than 2 months and it had done a total of 1,183 km since purchase.
The applicant gave evidence that in the telephone conversation on
30 April 2013 she explained her situation to Mr Somers who said that it was ‘bad luck’, but the vehicle was not covered by any statutory warranty and that the applicant had declined, although he had offered to her at the time of purchase, the opportunity to pay for an extended warranty. He asked the applicant what she wanted to happen. She told him she wanted the respondent to:(a)reimburse her the amount she had paid for service and repairs; and
(b)either:
i. take the car back and reimburse her the purchase price; or
ii. pay for work to be done to ‘make the car roadworthy’.
Mr Somers said words to the effect of “that’s not going to happen”.
The applicant said that she did not then feel safe driving the car or allowing her sons to do so. Due to work commitments, she was first able to book the car in for a ‘second opinion’ at Braddon Service Centre on 6 May 2013. Although at the hearing Mr Pollock suggested this demonstrated the applicant had ‘lost faith in’ Rolfe Motors, the Tribunal accepts that seeking a second opinion was a prudent decision by the applicant in the circumstances.
The applicant says she carefully drove the car to Braddon Service Centre on
6 May 2013. The applicant described to them the ‘history’ of what had occurred to that date including that she had been advised that ‘strut tops’ and ‘throttle body’ had been identified as needing replacement. The applicant did not provide to Braddon Service Centre copies of paperwork relating to the work that had been done to that date. The odometer reading was recorded as 121,320, being 29 km more than on 29 April 2013.Braddon Service Centre inspected the vehicle on 6 May 2013.
(a)They suggested, in relation to the ‘throttle body’,
i. the possibility of ‘top end cleaner’ at a cost of $39 to avoid need for throttle body replacement; and
ii. that the ‘throttle body’ would need to be inspected by an auto- electrician as any work undertaken on the throttle body would necessitate reprogramming of the electronics and Braddon Service Centre was not able to do this.
(b)They also said
i. that the ‘strut tops’ were worn; and
ii. that the ‘timing belt’ was due for replacement. This was not something that had previously been identified. At the hearing on 17 February 2014 Mr Tiyce gave evidence that replacement of the timing belt had been recommended when Rolfe Motors had last serviced the vehicle on 23 November 2011. He did not explain why this had not been done or identified by Rolfe Motors when they worked on the vehicle in April 2013.
The applicant managed to drive the car home from Braddon Service Centre. On 7 May 2013, she tried to drive the vehicle from her home to Lonsdale Auto, an auto electrician business. The vehicle stalled at the end of her street. Although it could be restarted and the brakes and accelerator worked, it then shuddered, numerous lights on the dash illuminated and the steering wheel locked. The applicant parked the car and put on the handbrake. She called Lonsdale Auto who arranged for the vehicle to be towed to their business premises at a cost of $80 and then undertook an inspection at a cost of $168.18.
The advice from Lonsdale Auto was that the ‘throttle body’ needed replacement but this would need to be done by Rolfe Motors, the authorised Volvo repairers in the ACT, as only a Volvo authorised repairer could reprogramme the vehicle’s electronics after replacement of the ‘throttle body’. Rolfe Motors would only undertake the reprogramming if they had also done the replacement work. The vehicle could not be driven and Lonsdale Auto agreed to garage the car at their premises until the applicant arranged for it to be transported elsewhere.
It was at this stage that on 10 May 2013 the applicant’s husband, on her behalf, sent an email ‘letter of demand’ to the respondent. In that email, the applicant:-
(a)sought reimbursement for the expenses already incurred plus compensation for the costs of inspection and towing totalling $1,616.80; and either
i.
the cost of the replacement of the ‘throttle body’, ‘strut tops’ and
‘timing belt’ estimated at $2,753; or
ii. to reject the vehicle and be refunded the purchase price of $8,250; and
(b)required a response by 13 May 2013 failing which the applicant would arrange for the repairs and seek compensation.
At the hearing, Mr Pollock advised that the he did not become aware of the
10 May 2013 email until sometime after 13 May 2013. He concedes that
Mr Somers may have received the email before 13 May 2013, but he did not bring it to Mr Pollock’s attention. Mr Pollock said that because the applicant’s ‘deadline’ of 13 May 2013 had already passed by the time he became aware of the email he did not respond or contact the applicant about the email.
Mr Pollock said he next ‘heard’ about the matter when the ACAT application was served. The applicant gave evidence, which was not disputed, that Mr Somers did not contact her.
On 17 May 2013, the vehicle was towed from Lonsdale Auto to Rolfe Motors. The applicant paid the towing fee invoice of $88 to Lonsdale Auto.
On 17 May 2013, Rolfe Motors replaced the ‘throttle body’ and reprogrammed the electronics. The applicant paid the invoice for $1,099.65. Mr Rolfe, on behalf of the respondent at the hearing, pointed out that this invoice included a $200 fee that appears to be for towing notwithstanding that the invoice of $88 had been paid to Lonsdale Auto. Mr Tiyce clarified this when he gave evidence on 17 February 2014. Mr Tiyce advised, and the Tribunal accepts, that the $200 was a labour cost and no amount for towing was charged by Rolfe Motors on this invoice.
The invoice again referred to the need to replace ‘strut tops’, however, recommended that the next service should be in 6 months. No mention was made of the timing belt. The odometer reading was recorded as 121,331 km, 11 km more than on 6 May 2013.
On 20 May 2013, the applicant collected the vehicle from Rolfe Motors. It appears there were no further problems experienced. On 27 May 2013, it was driven to Braddon Service Centre. The ‘strut tops’ and ‘timing belt’ were replaced as recommended in the inspection report dated 6 May 2013 at a cost of $1,300, which the applicant paid.
A few days after collecting the vehicle the applicant observed that a warning light came on. The applicant rang Braddon Service Centre who said she would need Rolfe Motors to determine the problem. On 4 June 2013, Rolfe Motors scanned the codes and determined that a ‘brake light switch sensor’ needed replacing, which they did at a cost of $412.40. The odometer reading was recorded as 121,452 km, being 21 km more than on 17 May 2013.
Respondent’s position
Mr Pollock’s primary assertion is that the respondent was not given an opportunity to address the applicant’s concerns. He says that now, after considerable work has been done on the vehicle, some of which he says may have been unnecessary and/or not properly performed, it is not possible to assess the condition of the vehicle at the time of sale.
In addition, even if some of the work undertaken was necessary and whether or not properly carried out, the need for that work does not relate to the ACL guarantees given the age of the car. Such work, he says, is the sort of work that will need to be carried out on an older vehicle with more than 120,000 km on the odometer.
In short, the respondent says that –
(a)the need for the work on the brakes, throttle body, strut tops and timing belt, if required, is not covered by the guarantees of ‘fitness for purpose’ or ‘acceptable quality’; or
(b)the applicant’s failure to contact the respondent and provide it with the opportunity to undertake repair work, if any, related to the ACL guarantees, means that the applicant is now precluded from seeking to recover the cost of the work and investigation undertaken; or
(c)the problems that arose following the work carried out on the car by Rolfe Motors on 22 and or 23 April 2013 are possibly or probably related to that work and cannot now be said to be related to the condition of the car at the time of sale on 14 March 2013.
Mr Pollock submits that the vehicle was ‘fit for purpose’ and of an ‘acceptable quality’ at the time of sale. It was a vehicle which, given its age at the time of sale had –
(a)relatively low ‘mileage’;
(b)been owned by one Canberra resident and predominantly driven in Canberra;
(c)a current roadworthy certificate which had been issued by an authorised inspector; and
(d)been regularly serviced and well maintained since its original purchase.
Mr Pollock said that had he been given the opportunity he would have –
(a)used his ‘industry contacts’ to have the service and any work required carried out at ‘trade’ price; and
(b)sought another opinion as to the need to replace brake pads and discs.
Mr Pollock and Mr Rolfe submitted that the assessment by Rolfe Motors in its invoice and report of 29 April 2013 after the problems experienced by Thomas Carroll on 24 April 2013, namely, that there was ‘no problem with the brakes’, is not consistent with the report which goes on to say that the brake discs were ‘blue’ and ‘hot’.
Mr Rolfe told the Tribunal that he is a trained car mechanic with many years of experience. He said that in his opinion not all of the ‘symptoms’ reportedly experienced by Thomas Carroll on 24 April 2013 were consistent with brake problems. However, the brake function problems that Thomas Carroll did experience, namely, that the brakes were not operating correctly, could have occurred because at the time the discs and pads were replaced by Rolfe Motors, the brake fluid was not. Mr Rolfe said that in undertaking the process of replacing discs and pads, they have to be ‘pinned back’ and it can occur that particles in the brake fluid can enter the space and then compromise the ‘purchase’ between disc and pad and affect brake function.
Mr Rolfe said that the replacement of the brake fluid on 26 or 29 April 2013 by Rolfe Motors should have dealt with this problem. The fact that Rolfe Motors did not charge for the work they undertook, including towing, on 26 and 29 April 2013, suggests that Rolfe Motors would agree with Mr Rolfe’s assessment.
Further, Mr Rolfe said that replacement of ‘strut tops’ is the sort of work you would do to bring a vehicle back to ‘new’ condition. The fact that the rubbers are split or worn is not surprising in an older vehicle, and certainly does not require ‘urgent’ repair. Performance may be affected but the vehicle is safe and functions.
The replacement of the ‘throttle body’ may have been necessary and would explain the ‘shuddering’ of the vehicle which both the applicant, on
7 May 2013, and her son Thomas Carroll, on 24 April 2013, had experienced. However, says Mr Rolfe, this is the sort of thing you expect to ‘go wrong’ in an older vehicle. It is a mechanical problem and will not normally be included nor necessarily identified in a service.
Mr Rolfe queried the recommendation by Braddon Service Centre that the ‘timing belt’ needed replacing. This was not identified until 6 May 2013, suggesting it was either not necessary or, he suggests, brings into question the work done by Rolfe Motors to that date, which had not identified it as an issue.
The Respondent’s response on 30 April 2013 and after 10 May 2013
Although the respondent had
(a) been contacted on 30 April 2013 by the applicant; and
(b) received the emailed letter of demand dated 10 May 2013;
the respondent took no steps to follow up with the applicant.
According to the applicant, Mr Somers effectively told her on 30 April 2013 that the respondent could not assist. Mr Pollock says that he is aware of the obligations imposed by the ACL. An undated signed statement by Mr Somers, which was relied on by the respondent, merely confirms that he was the sales person, that the applicant declined an ‘extended warranty’, that the vehicle had a roadworthy certificate at the time of purchase, and that he and the applicant spoke on 30 April 2013. None of these statements is contentious. The Tribunal accepts the applicant’s recollection of the conversation that she had with
Mr Somers on 30 April 2013.
Adam Tiyce’s (Rolfe Motor’s Service Manager) evidence
At the hearing on 17 February 2014, Mr Tiyce gave evidence, produced documents and was questioned by Mr Pollock and Mr Rolfe on behalf of the respondent. Mr Tiyce has been the Service Manager at Rolfe Motors for about six months. Between 2010 and his appointment as Service Manager, he was the Workshop Manager at Rolfe Motors. Before that he had worked as a mechanic for over 10 years in other businesses.
Mr Tiyce confirmed that from the records held at Rolfe Motors the vehicle had been purchased new from the Rolfe Motors Volvo dealership in or about 2001, and had been serviced by Rolfe Motors since that time. This information was not contentious.
He said that when the vehicle was brought to Rolfe Motors on 22 April 2013, it had no ‘service sticker’ to indicate when the next service was due. He also said that the service history showed that the vehicle had last been serviced by Rolfe Motors on 23 November 2011, when it had an odometer reading recorded of 112,000 km. This information was not contentious.
Mr Tiyce said that normally a service is due every 15,000 km or 12 months, whichever is sooner. Given that the ‘service’ light in the vehicle was illuminated and more than 12 months had passed since the last service by Rolfe Motors, it was assumed that a service was due.
In relation to the brakes, he said that at the 112,000 km service the records showed that the brake pad thickness was ‘60%’. Given that ‘new’ pads are 13mm, this means they must have been about 7.8mm at that time. When inspected on 22 April 2013 they were 2mm thick on all 4 tyres. The Volvo specifications say they should not be less than 1.5mm. Mr Tiyce said that given there would only be a further 2,000 - 3,000 km ‘life’ in the worn pads, this would need to have been addressed before the next service which was then due in 15,000 km (at 136,000km) or in 12 months, whichever was sooner.
Mr Rolfe and Mr Pollock questioned Mr Tiyce about, in particular, the replacement of brake discs. They suggested that this might not have been required. They noted that no details about the condition of the discs were recorded in the Repair Order dated 22 and 23 April 2013 (Exhibit A1). In short, they suggested that the replacement of discs was either not indicated or that the ‘quality’ of the discs used to replace the existing discs was of a higher standard and cost than would be necessary for a domestic use vehicle.
Mr Tiyce said that the decision to replace the discs is based on an assessment by the technician inspecting the vehicle. He said it is a standard practice when replacing brake pads to assess the condition of the brake discs. He said the recommendation was that the discs be replaced. He denied the suggestion on behalf of the respondent that this amounted to over servicing.
In response to the respondent’s assertion that the cost of the work was too high, Mr Tiyce said that Volvo genuine parts were used, and that the applicant had been charged for 3 hours of labour at $154 per hour to replace front (x2) and rear (x2) brake discs and pads. He said that this was not excessive.
In relation to the ‘throttle body’, Mr Tiyce confirmed that this is not a ‘service’ item. Problems relate to an ‘internal failure’ of electronics and the only way to respond is by replacing the part. He said that because it is a sealed unit, it cannot be inspected and thus problems that arise cannot be predicted.
The respondent asserted that Rolfe Motor’s conclusion that the problems experienced by Thomas Carroll on 24 April 2013 were caused by the ‘throttle body’ and were unrelated to the replacement of brake discs and pads by Rolfe Motors on 23 April 2013 was not consistent with ‘hot’ and ‘blue’ discs.
Mr Tiyce gave evidence that the malfunction of the ‘throttle body’ can impact on brake pedal function to some extent and this may cause the brakes to get hot.
Rolfe Motors, Braddon Service Centre and Lonsdale Auto all identified problems with the ‘throttle body’. The Tribunal is satisfied that these problems emerged or were identified at latest on or about 29 April 2013 when Rolfe Motors inspected the vehicle. At that stage, the vehicle had done 1,183 km since purchase.
The Tribunal must decide the following issues:
(a)Was there misleading or deceptive conduct on the part of the respondent?
(b)If so, what remedy does the applicant have?
(c)Which if any of the consumer guarantees under the ACL apply to the transaction on 14 March 2013?
(d)If applicable, was there a breach by the respondent?
(e)If applicable and breached, what remedy does the applicant have?
(f)Is there anything in the applicant’s actions that might preclude or restrict the applicant from recovering any applicable remedy/remedies?
(g)What is the quantum of any loss or damage recoverable by applicant?
Tribunal’s findings
(a) Description of vehicle as model ‘T5’ rather than ‘SE’ in car sales website
The Tribunal is satisfied that the description of the vehicle as a model ‘T5’ rather than an ‘SE’ on the ‘carsales’ website was likely to ‘mislead’ a person such as the applicant. From the evidence provided on behalf of the applicant a consumer might be prepared to pay more for the ‘T5’ than the ‘SE’. The Tribunal accepts that it is likely that the information appearing on the website was provided by the respondent, in any event, the respondent’s sales person directed the applicant to that website to review details of the vehicle. It is irrelevant for the purpose of the ACL whether there was any intention to ‘deceive or mislead’.
The applicant first saw and inspected the vehicle at the respondent business before reviewing the details on the website. There was no evidence that the applicant at any time alerted the respondent to the significance for her of the model. The paperwork relating to the vehicle provided by the respondent at the time of purchase accurately identified the model of the vehicle as an ‘SE’.
The applicant gave evidence that she had taken out comprehensive insurance for the vehicle subsequent to purchase. Thus the applicant, in reviewing paperwork relating to the vehicle at the time of purchase, at the time of transfer of registration or at the time of insuring the vehicle, could have identified that the vehicle was a model ‘SE’.
There was no evidence that the applicant complained to the respondent that she had been misled, but rather she proceeded with the purchase and, until the ‘service indicator light’ illuminated shortly before 22 April 2013, the applicant appeared to have agreed to accept the vehicle. None of the problems experienced or complained of by the applicant subsequent to that date, nor the loss or damage allegedly sustained by the applicant, relate to the model number of the vehicle.
The Tribunal does not accept that the ‘indicative’ price range for vehicles which appears in the car sales website binds or compels a seller to set the price for a second hand vehicle to be consistent with that ‘indicative price’ range. Indeed, subject to the individual characteristics of a particular vehicle it may be worth more or less than other vehicles of the same vintage or make.
The applicant may have paid more than another person would have paid for this vehicle or more than she would have paid for a similar vehicle, however, the Tribunal is not satisfied given the circumstances of this matter that, even if she was misled by the information appearing on the website, that the applicant sustained any loss or damage as a result of that incorrect description of the vehicle model in the car sales website.
(b) Statement by respondent’s representative that service of vehicle not due for 15,000km (the ‘service statement’)
The Tribunal accepts that the ‘service statement’ was made to the applicant by Mr Somers prior to purchase. The Tribunal accepts that this statement, which was incorrect, would have misled a reasonable consumer. The applicant gave evidence that it was one of the factors that influenced her decision to purchase the vehicle.
At the hearing, the respondent gave evidence that, at latest, the next service would have been due in 7,000 km. Mr Tiyce gave evidence which the Tribunal accepts that a service is usually undertaken every 15,000 km or 12 months. The last service on the vehicle had been carried out on 23 November 2011. The Tribunal considers that a service was probably already overdue at the time of purchase. In any event the representation by Mr Somers as to when the next service would be required was not correct.
The Tribunal considers that it was reasonable for the applicant to have responded to the ‘service’ light which came on some time before 22 April 2013, by arranging for a service of the vehicle to be undertaken.
Although the applicant could have contacted the respondent she decided not to. Although she was surprised and unhappy that this had occurred so soon after purchase, and well before 15,000 km had been driven, she decided not to complain. For the reasons set out below, the Tribunal does not accept that the applicant’s failure to contact the respondent at this stage impacts on the applicant’s claim.
The Tribunal finds that it was reasonable for the applicant to have taken the vehicle to Rolfe Motors for the service. It was agreed by the parties that the consistency of the service and maintenance history of the vehicle had been a positive selling point. Apparently, the vehicle had been serviced by Rolfe Motors since its original purchase by its one owner. The applicant gave evidence that in taking the vehicle to Rolfe Motors she was, in effect, seeking to continue to maintain the vehicle and she assumed Rolfe Motors would be familiar with the vehicle’s history.
In the Tribunal’s view the ‘service statement’ misled the applicant into believing that no service would be required for 15,000 km (or in 12 months), whereas in fact a service was either overdue or would shortly be required at the time of purchase.
In the Tribunal’s view the ‘service statement’ is also relevant to the consideration of whether or not the vehicle met the consumer guarantee of ‘acceptable quality’ which is discussed below.
(c) Guarantee that goods are of ‘acceptable quality’ section 54, ACL
Taking into account the relevant provisions in section 54(3) of the ACL –
(a) as regards ‘the nature of the goods’ (section 54(3)(a) of the ACL) - the Tribunal accepts that the vehicle is a 12 year old second hand vehicle which, on 14 March 2013, had done 120,108 km, and that a reasonable consumer would accept that –
i. it is not in ‘as new’ condition;
ii. parts which had not been replaced or repaired since the manufacture of the vehicle would be ‘worn’ to a greater or lesser extent; and
iii. some of the parts of the vehicle, which were susceptible to long term use may, at some time subsequent to purchase, require repair or replacement;
(b) as regards ‘the price of the goods’ (section 54(3)(b) of the ACL) –
the applicant gave evidence that, based on information provided on the car sales website, the price paid for the vehicle was approximately $2,000 greater than might have been considered the top ‘market price’ for similar vehicles of this model and vintage;
(c) as regards ‘any representation of the goods made about the goods by the supplier’ (section 54(3)(d) of the ACL) –
i. as set out above the Tribunal accepts that the ‘service statement’ would impact on what a reasonable consumer would regard as ‘acceptable’;
ii. not only would the ‘service statement’ have influenced a reasonable consumer’s understanding as to when a service might need to be carried out, but also as to what repair, replacement or maintenance work would need to be carried out on the vehicle for a ‘reasonable period’ subsequent to purchase; and
iii. the applicant gave evidence that the ‘service statement’ and the maintenance record and ownership history impacted on her decision to purchase the vehicle; and
(d) as regards ‘any other relevant circumstances relating to the supply of the goods’ -
i. the service light came on at some time prior to 22 April 2013, being less than six weeks after purchase;
ii. by the time the vehicle was inspected by Rolfe Motors on 22 April 2013, it had an odometer reading of 121,236 km. In other words the vehicle had travelled 1,128 km since purchase; and
iii. by 4 June 2013 the vehicle had done 1,344 km since purchase.
In undertaking the service at the applicant’s request on or about 22 April 2013 Rolfe Motors identified the need for replacement of ‘strut tops’ and ‘front and rear brake pads discs’.
The Tribunal accepts that it is possible that at least some of the problems experienced by Thomas Carroll (the applicant’s son) when driving the vehicle on 24 April 2013, subsequent to the brake pads and discs replacement by Rolfe Motors on 22 or 23 April 2013, may have been related to the brake pads and discs work carried out by Rolfe Motors. However, the Tribunal notes that Rolfe Motors arranged to tow the vehicle, replace the brake fluid and inspect the vehicle on or about 26 or 29 April 2013. No charge was made for this work and, beyond claiming an amount for periods when the vehicle was ‘off the road’, the applicant makes no claim in relation to this work.
In the Rolfe Motor’s report of 29 April 2013 it recommended replacement of the ‘throttle body’. The evidence from Mr Tiyce, which the respondent does not dispute and the Tribunal accepts, is that this is not a ‘service’ item and it would not be identified during an inspection of the vehicle. ‘Throttle body’ issues are determined when problems emerge because of a malfunction. The need for this work was identified just over six weeks after purchase of vehicle.
On 30 April 2013, the applicant alerted the respondent to the fact that the brakes had been repaired. The applicant proposed options including that the respondent undertake the work relating the ‘strut tops’ and ‘throttle body’ so as to make the vehicle ‘roadworthy’. The respondent declined this opportunity.
The applicant arranged for an inspection, by way of a ‘2nd opinion’, by Braddon Service Centre or about 6 May 2013. They confirmed the need to replace ‘strut tops’ and ‘throttle body’ and further identified that the ‘timing belt’ required replacement.
The Tribunal finds that–
(a)as at 22 April 2013, the applicant had owned the vehicle for less than six weeks and it had travelled 1,128 km since purchase;
(b)the vehicle required a service on or before 22 April 2013, well in advance of what might have been expected given the ‘service statement’ made at the time of sale;
(c)as part of that service Rolf Motors identified the need for replacement of brake pads and discs ;
(d)the vehicle required replacement of ‘strut tops’ as at 22 April 2013;
(e)
the vehicle required replacement of the ‘throttle body’ on or before
26 April 2013; and
(f)On or before 6 May 2013, the vehicle required replacement of the ‘timing belt’.
The Tribunal considers that the applicant was proactive from the time that the service light first appeared in April 2013 in taking steps to ensure the vehicle was maintained and repaired. The Tribunal does not consider that the applicant contributed to the goods being of unacceptable quality pursuant to
subsection 54(6) of the ACL.
The Tribunal accepts that the applicant did inspect, in so far as she examined and test drove, the vehicle before purchase. It may be that if an inspection of the vehicle had been undertaken by a suitably skilled person the ‘problems’ which emerged including the brakes, strut tops, timing belt and, perhaps, throttle body, may have been identified. However, there is no suggestion that these problems were apparent from the inspection or test drive conducted by the applicant. It appears that the vehicle drove well until after the service on 22 or
23 April 2013.
In the circumstances of this matter where the ‘maintenance history’ and ‘service statement’ were promoted as positive selling features, and a roadworthy certificate was provided, the Tribunal concludes that it was reasonable that the applicant did not arrange for a further inspection of the vehicle at the time of purchase. The Tribunal concludes that the qualification of subsection 54(7) of the ACL does operate.
Given the above the Tribunal concludes that at the time of sale –
(a)the vehicle was not free from defects and the ‘strut tops’, brake pads and discs and the ‘timing belt’ all needed replacement (re section 54(2)(c) of the ACL);
(b)the vehicle was not durable– given the timing of the need to replace the ‘throttle body’ and the distance the car had travelled since purchase to that date (re section 54(2(e)), the need to replace the ‘throttle body’ at this stage suggests it may also be a latent defect;
(c)from time to time in the period 24 April 2013 until 27 May 2013 the vehicle could not be driven at all or with confidence as to its safety, thus for at least those periods the vehicle was not:
i. ‘fit for purpose’ (re section 54(2)(a)); or
ii. ‘safe’ (re section 54(2)(d)).
(d) Misleading or deceptive conduct – section 18, ACL
The Tribunal is not satisfied that the applicant sustained any loss or damage as a result of the incorrect identification of the model of the vehicle as a ‘T5’ rather than ‘SE’ model in the car sales website.
The Tribunal finds that the applicant was misled by the ‘service statement’ into believing that the vehicle would not require a service for another 15,000 km. The Tribunal accepts that a foreseeable consequence of the misleading statement is that if a service, and the need for repairs identified during that service, was required before 15,000 km, the consumer will be put to the expense of the service and those repairs.
It is the Tribunal’s view that the applicant is entitled to recover pursuant to s236 of the ACL the cost of having the service undertaken and the cost of the work performed that was identified during that service, namely, the brake discs and pads and the ‘strut tops’. In relation to the ‘timing belt’, the Tribunal concludes that as this had been recommended by Rolfe Classic when it carried out a service on
23 November 2011 and was identified by Braddon Service Centre 6 May 2013, it too should be included.
In relation to the consumer guarantee of ‘acceptable quality’, the ACL provides a consumer with the opportunity -
(a)pursuant to section 259(2) of the ACL, to ‘require’ the supplier to remedy a ‘non-major’ failure to comply with a guarantee. If the supplier does not remedy the failure within a reasonable time or refuses to do so, then the consumer may either recover the reasonable cost of having the failure remedied or may reject the goods; or
(b)pursuant to section 259(3) of the ACL, if the failure is a ‘major’ failure or cannot be remedied, to either reject the goods or seek compensation for the reduction in the value of the goods below the price.
It is common ground that, subsequent to the sale on 14 March 21013, the applicant first contacted the respondent on 30 April 2013. At the hearing it was submitted that because the respondent was not given an opportunity to address the applicant’s concerns at the time the ‘service light’ came on and before the work was undertaken by Rolfe Motors on 22 and 23 April 2013 and then on 26 or 29 April 2013, the respondent was denied an opportunity afforded to it under the ACL to ‘remedy’ the alleged breach of section 54 of the ACL by one of the options set out in s 261 ACL and the applicant may not now recover the costs she incurred.
On behalf of the respondent it was submitted that the respondent could have had any necessary work done at ‘trade prices’ and, in any event, the respondent asserts that not all of the work done was necessary or that it did not relate to the consumer guarantee.
Further, it was submitted that any opportunity to reject the vehicle was lost by the applicant when, pursuant to section 262(1)(b), the vehicle was ‘damaged’ subsequent to purchase ‘for reasons not related to its condition at the time of purchase’, namely, when work was undertaken on the brakes by Rolfe Motors on 22 or 23 April 2013.
It is the respondent’s submission that, beyond carrying out a basic ‘service’ which the respondent accepts was reasonable, the other work carried out on the car was either carried out in a way that gave rise to further problems or was not work the need for which would reasonably have been encompassed by the guarantee of ‘acceptable quality’ in a vehicle of this vintage and odometer reading.
The applicant submits that the wording of section 259 of the ACL says that a consumer ‘may’, but is not obliged to, exercise the options provided within s259 of the ACL.
The applicant asserts that in the current matter the ‘failure’ was ‘major’. The applicant seeks to reject the vehicle and be reimbursed the purchase price as well as recover damages being the amount they paid for repairs and for the costs incurred for keeping the vehicle registered and insured during periods when it was not capable of being driven.
Section 260 of the ACL sets out 5 situations in which, if any one of the 5 is satisfied, the ‘failure’ is ‘major’.
The applicant says that the failure is ‘major’ because, pursuant to s260, the circumstances of this matter satisfy at least 3 of the 5 alternative scenarios –
(a)if the applicant had known that the car would need to be serviced within 6 weeks and of the need for repair and maintenance revealed by that service the applicant would not have purchased the vehicle (section 260(a) of the ACL); and
(b)the fact that the vehicle was not drivable for at least some of the time between 24 April and 27 May 2013 made it ‘substantially unfit’ for its purpose and it was not able to be made fit for that purpose either easily or within a reasonable time (section 260(c) of the ACL); and
(c)at least some of the problems experienced with the vehicle, and which were caused by the breach of warranty, made it unsafe (section 260(e) of the ACL).
From the evidence, the Tribunal is satisfied that the problems with the vehicle were capable of being easily repaired (by an appropriately skilled person/business) and within a relatively short time. In some instances there was delay between the identification of the need for repairs and the work on the car, however, in each case the time taken for the repair was only one or two business days.
The Tribunal is satisfied that if the applicant had been aware of the need for repair or replacement of the parts the applicant would not have bought the car. The Tribunal concludes that the applicant relied on the ‘service statement’ and the fact that the car was said to have a history of being well and regularly maintained.
The applicant submits that even if the circumstances that gave rise to the problems that Thomas Carroll experienced when driving the vehicle on
24 April 2013 are in some way related to the work done by Rolfe Motors on
22 or 23 April 2013, there is no suggestion that this work caused the problems experienced by the applicant on 7 May 2013. The Tribunal is satisfied that, at latest, on 29 April 2013 the ‘throttle body’ required replacement and caused problems which further developed so that the vehicle could no longer be driven on 7 May 2013.
The Tribunal considers that the situation experienced by both Thomas Carroll and the applicant whereby the vehicle stalled and was undriveable could certainly be characterised as ‘unsafe’.
The Tribunal concludes that the ‘failure’ in this case was ‘major’ within the meaning of section 260 of the ACL.
Rejection by the applicant – section 54(3), ACL
Problems with the vehicle became apparent initially when the ‘service’ light came on some time before 22 April 2013. The applicant was advised to replace disc pads and discs on 22 April 2013. She authorized this work to be carried out. When the applicant collected the vehicle initially on 23 April 2013 and then again on 29 April 2013 from Rolfe Motors, she saw the additional work recommended in the ‘service’ report on the Rolfe Motors invoice.
The applicant first ‘rejected’ the vehicle when the applicant rang and had a conversation with the Mr Somers on 30 April 2013. This conversation occurred less than 7 weeks after purchase of the vehicle. Taking into account the matters set out in section 262(2) of the ACL, the Tribunal considers that the rejection by the applicant on this date was within the ‘rejection’ period given the circumstances and in particular the ‘service statement’.
The respondent’s representative (i.e Mr Somers) told the applicant that the respondent would not ‘remedy’ the problem. It is noted that the applicant was not obliged to provide the respondent with this option if it was a major failure. The applicant then took further steps to address the problems herself.
Although Mr Pollock said that had he known of the conversation on
30 April 2013 he would have given a different response than Mr Somers, Mr Pollock says he was not told of the conversation by Mr Somers and does not deny the conversation took place. The Tribunal accepts the applicant’s evidence as to what Mr Somers said to her.
The respondent was provided with further details about the situation in the applicant’s letter of demand dated 10 May 2013. The applicant again purported to ‘reject’ the vehicle and sought reimbursement for the costs incurred to that date. The respondent chose not to take any action. The fact that this letter of demand, sent under cover of an email to and received by Mr Somers, was shown to Mr Pollock after the ‘time for response’ nominated by the applicant, is irrelevant.
Even if the failure was not ‘major’, the fact that Mr Somers declined (on the respondent’s behalf) the opportunity to ‘remedy’ the problems or indeed take any action on 30 April 2013, would have provided the applicant with the opportunity to exercise the option to either arrange repairs to remedy the failure or reject the vehicle pursuant to section 259(2)(b) of the ACL.
The Tribunal is satisfied that the applicant’s rejection of the vehicle on
30 April 2013 or at latest on 10 May 2013 would have been valid and within the ‘rejection period’ taking into account the matters set out in section 262 of the ACL. However the applicant did not, as required by s263 ACL, return the vehicle to the respondent. The applicant took further steps to have the vehicle repaired and continued to drive the vehicle.
The Tribunal concludes that the applicant can be presumed, by her actions subsequent to 10 May 2013, to have decided to forgo the opportunity to reject the vehicle. The Tribunal considers that section 262 and section 263 of the ACL would now operate, given the time that has passed and the applicant’s actions subsequent to 10 May 2013, to preclude the applicant from now exercising the option to reject the vehicle. The Tribunal is not persuaded that it should now make an order that the applicant can reject the vehicle and be reimbursed the purchase price.
Compensation and damages
The Tribunal is satisfied that in attempting to address the problems with the vehicle, the applicant has incurred the following expenses for which invoices and receipts have been provided. The expenses which are directly related to the service of the vehicle and addressing the identified need for repairs:
(a)22 and 23 April 2013 - Rolfe Motors – service $516.30 and brake discs and pads $1,184.80;
(b)6 May 2013 - Braddon Service Centre inspection/2nd opinion - $159.00;
(c)7 May 2013 - Lonsdale Auto – towing fee $80 and inspection fee $185.00;
(d)17 May 2013 - Lonsdale Auto - $88.00 towing fee;
(e)17 May 2013 - Rolfe Motors – throttle body $1,099.65; and
(f)27 May 2013 - Braddon Service Centre – strut tops and timing belt $1,310.00
The respondent submitted at the hearing that the cost of work undertaken by Rolfe Motors was not ‘reasonable’. The respondent pointed out that the quote for the further ‘recommended’ repairs that Rolfe Motors provided in its invoice of 23 April 2013 was considerably higher than the cost ultimately charged by Braddon Service Centre for some of that work. In other words, the respondent is asserting that Rolfe Motors is expensive as compared with other repairers and the Tribunal should take this in to account when assessing the applicant’s loss, if any.
Given that:
(a)the respondent’s representative at the time of sale did not suggest that Rolfe Motors was in some way inappropriate to provide service for the vehicle;
(b)the applicant sought a ‘2nd opinion’ on the condition of the vehicle before arranging further work on the vehicle after 29 April 2013;
(c)the applicant did attempt to have the work on the ‘throttle body’ carried out by Lonsdale Auto, but was advised the work had to be done by Rolfe Motors; and
(d)the applicant did arrange for the ‘strut tops’ and ‘timing belt’ repairs to be carried out by Braddon Service Centre on 27 May 2013, even though this required a further trip to repairers since, presumably, these problems could have been addressed when the ‘throttle body’ work was done by Rolfe Motors on 17 May 2013.
The Tribunal concludes that the applicant took steps to mitigate her loss. The Tribunal is not persuaded that the claim for the cost of repairs should be reduced.
In the week of 27 May 2013 after collecting the vehicle following the work done by Braddon Service Centre a warning light came on in the vehicle. The applicant took the car to Rolfe Motors who identified the problem as the need to replace the ‘brake light switch pedal sensor’ (the ‘sensor’). This was replaced at a cost of $412.40.
It is the Tribunal’s view that this cost does not relate to the failure to meet the guarantee of ‘acceptable quality’ or to the incorrect ‘service statement’ discussed above. The Tribunal is not persuaded, by reference to the factors in section 54(3)(a to d) of the ACL and given the matters discussed in
paragraph 83(a) above, that the need to replace the ‘sensor’ can be characterised as a breach the consumer guarantee of ‘acceptable quality’.
Notwithstanding:
(a)the history of the applicant’s ownership of the vehicle until 27 May 2013 when the problem with the ‘sensor’ was indicated;
(b)the applicant had owned the vehicle for less than 11 weeks during some of which time it could not been driven because it was either not driveable or was undergoing mechanical work; and
(c)the odometer reading on 4 June 2013 was 121,452 km and the vehicle had travelled 1,344 km since purchase and 216 km since 23 April 2013;
the Tribunal is satisfied that the need to replace the ‘sensor’ is a problem that emerged subsequent to the purchase of the vehicle.
Although not relevant given the conclusion in paragraph 125 above, if the Tribunal had concluded that the need to replace the ‘sensor’ was covered by the consumer guarantee of ‘acceptable quality’, then given the respondent’s failure to respond to the opportunity to ‘remedy’ which had been provided by the applicant on 30 April 2013 and 10 May 2013 concerning other repairs, the Tribunal concludes that it would have been reasonable for the applicant to assume that the respondent would decline an opportunity to remedy on this occasion and it would have been reasonable for the applicant to arrange for the repair of the sensor pursuant to section 259(2)(b)(i) of the ACL.
The Tribunal is not satisfied that the respondent is liable to reimburse the applicant for the cost of the replacement of the ‘sensor’, being $412.
The Tribunal concludes that in relation to the sale of the vehicle on 14 March 2013, as a result of either a misleading representation or breach of the consumer guarantee of ‘acceptable quality’ the applicant has incurred costs which are recoverable:
(a)the cost of the ‘service’ carried out on 22 April 2013 and associated repairs including the replacement of brake pads and discs, pursuant to section 236 of the ACL in relation to breach of section 18 of the ACL; and/or
(b)the cost of repair of ‘strut tops’, ‘throttle body’ and ‘timing belt’, pursuant to section 259(2)(b)(i) of the ACL and the towing and inspection costs incurred subsequent to 30 April 2013, pursuant to s259(4) ACL; and/or
(c)the cost of replacement of the brake pads and discs, ‘throttle body’, ‘strut tops’ and ‘timing belt’ amount to the reduced value of the vehicle pursuant to section 259(3)(b) and the inspection and towing costs are recoverable pursuant to section 259(4).
The respondent misled the applicant, in contravention of section 18(1) and section 29(1)(a) ACL:
(a)as to the model of the vehicle, the Tribunal is not persuaded that the applicant sustained any loss or damage as a result of this. The Tribunal makes no order in relation to that aspect of the applicant’s claim.
(b)by making an incorrect statement, the ‘service statement’, as to when the next service of the vehicle was due. As a result the applicant incurred expenses. The Tribunal is satisfied that the following amounts were reasonable and foreseeable costs incurred by the applicant relating to the incorrect ‘service statement’ and these are recoverable by the applicant pursuant to section 236 of the ACL:
i. service of the vehicle on 22 April 2013;
ii. replacement of brake discs and pads on 23 April 2013;
iii. replacement of ‘strut tops’; and
iv. replacement of ‘timing belt’.
The vehicle was not of ‘acceptable quality’ in breach of the consumer guarantee (see section 54(2) of the ACL, in particular, section 54(2)(a), (c), (d) and (e)). Given the circumstances and timing of events as set out in the previous paragraphs, the Tribunal has concluded that the need for maintenance and replacement of parts, including the ‘throttle body’, amounted to a ‘major’ failure pursuant to section 260 of the ACL.
The Tribunal has concluded, for the reasons set out above, that it is not prepared to order that the applicant is entitled to reject the vehicle and be reimbursed by the respondent for the purchase price.
The Tribunal is not persuaded that any order should be made in relation to the expenses incurred by the applicant in having paid for registration and comprehensive insurance during periods when the vehicle was off the road and undriveable. The Tribunal accepts that there were periods between
22 April 2013 and 27 May 2013 when the vehicle could not be driven, however the times when the vehicle was off the road actually undergoing repairs or maintenance represented relatively short periods. The Tribunal is not satisfied that an order should be made in relation to these periods as claimed by the applicant.
………………………………..
Ms W. Corby – Senior member
SCHEDULE 1
CONSUMER AUSTRALIAN LAW
18Misleading or deceptive conduct
(1)A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
(2)Nothing in Part 3‑1 (which is about unfair practices) limits by implication subsection (1).
Note:For rules relating to representations as to the country of origin of goods, see Part 5‑3.
29False or misleading representations about goods or services
(1)A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:
(a)make a false or misleading representation that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use; or
(b)make a false or misleading representation that services are of a particular standard, quality, value or grade; or
(c)make a false or misleading representation that goods are new; or
(d)make a false or misleading representation that a particular person has agreed to acquire goods or services; or
(e)make a false or misleading representation that purports to be a testimonial by any person relating to goods or services; or
(f)make a false or misleading representation concerning:
(i)a testimonial by any person; or
(ii)a representation that purports to be such a testimonial;
relating to goods or services; or
(g)make a false or misleading representation that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits; or
(h)make a false or misleading representation that the person making the representation has a sponsorship, approval or affiliation; or
(i)make a false or misleading representation with respect to the price of goods or services; or
(j)make a false or misleading representation concerning the availability of facilities for the repair of goods or of spare parts for goods; or
(k)make a false or misleading representation concerning the place of origin of goods; or
(l)make a false or misleading representation concerning the need for any goods or services; or
(m)make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy (including a guarantee under Division 1 of Part 3‑2); or
(n)make a false or misleading representation concerning a requirement to pay for a contractual right that:
(i)is wholly or partly equivalent to any condition, warranty, guarantee, right or remedy (including a guarantee under Division 1 of Part 3‑2); and
(ii)a person has under a law of the Commonwealth, a State or a Territory (other than an unwritten law).
Note 1:A pecuniary penalty may be imposed for a contravention of this subsection.
Note 2:For rules relating to representations as to the country of origin of goods, see Part 5‑3.
(2)For the purposes of applying subsection (1) in relation to a proceeding concerning a representation of a kind referred to in subsection (1)(e) or (f), the representation is taken to be misleading unless evidence is adduced to the contrary.
(3)To avoid doubt, subsection (2) does not:
(a)have the effect that, merely because such evidence to the contrary is adduced, the representation is not misleading; or
(b)have the effect of placing on any person an onus of proving that the representation is not misleading.
54Guarantee 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.
236Actions for damages
(1)If:
(a)a person (the claimant) suffers loss or damage because of the conduct of another person; and
(b)the conduct contravened a provision of Chapter 2 or 3;
the claimant may recover the amount of the loss or damage by action against that other person, or against any person involved in the contravention.
(2)An action under subsection (1) may be commenced at any time within 6 years after the day on which the cause of action that relates to the conduct accrued.
259Action against suppliers of goods
(1)A consumer may take action under this section if:
(a)a person (the supplier) supplies, in trade or commerce, goods to the consumer; and
(b)a guarantee that applies to the supply under Subdivision A of Division 1 of Part 3‑2 (other than sections 58 and 59(1)) is not complied with.
(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.
(3)If the failure to comply with the guarantee cannot be remedied or is a major failure, the consumer may:
(a)subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection; or
(b)by action against the supplier, recover compensation for any reduction in the value of the goods below the price paid or payable by the consumer for the goods.
(4)The consumer may, by action against the supplier, 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 a failure.
(5)Subsection (4) does not apply if the failure to comply with the guarantee occurred only because of a cause independent of human control that occurred after the goods left the control of the supplier.
(6)To avoid doubt, subsection (4) applies in addition to subsections (2) and (3).
(7)The consumer may take action under this section whether or not the goods are in their original packaging.
260When a failure to comply with a guarantee is a major failure
A failure to comply with a guarantee referred to in section 259(1)(b) that applies to a supply of goods is a major failure if:
(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.
261How suppliers may remedy a failure to comply with a guarantee
If, under section 259(2)(a), a consumer requires a supplier of goods to remedy a failure to comply with a guarantee referred to in section 259(1)(b), the supplier may comply with the requirement:
(a)if the failure relates to title—by curing any defect in title; or
(b)if the failure does not relate to title—by repairing the goods; or
(c)by replacing the goods with goods of an identical type; or
(d)by refunding:
(i)any money paid by the consumer for the goods; and
(ii)an amount that is equal to the value of any other consideration provided by the consumer for the goods.
262When consumers are not entitled to reject goods
(1)A consumer is not entitled, under section 259, to notify a supplier of goods that the consumer rejects the goods if:
(a)the rejection period for the goods has ended; or
(b)the goods have been lost, destroyed or disposed of by the consumer; or
(c)the goods were damaged after being delivered to the consumer for reasons not related to their state or condition at the time of supply; or
(d)the goods have been attached to, or incorporated in, any real or personal property and they cannot be detached or isolated without damaging them.
(2)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.
263Consequences of rejecting goods
(1)This section applies if, under section 259, a consumer notifies a supplier of goods that the consumer rejects the goods.
(2)The consumer must return the goods to the supplier unless:
(a)the goods have already been returned to, or retrieved by, the supplier; or
(b)the goods cannot be returned, removed or transported without significant cost to the consumer because of:
(i)the nature of the failure to comply with the guarantee to which the rejection relates; or
(ii)the size or height, or method of attachment, of the goods.
(3)If subsection (2)(b) applies, the supplier must, within a reasonable time, collect the goods at the supplier’s expense.
(4)The supplier must, in accordance with an election made by the consumer:
(a)refund:
(i)any money paid by the consumer for the goods; and
(ii)an amount that is equal to the value of any other consideration provided by the consumer for the goods; or
(b)replace the rejected goods with goods of the same type, and of similar value, if such goods are reasonably available to the supplier.
(5)The supplier cannot satisfy subsection (4)(a) by permitting the consumer to acquire goods from the supplier.
(6)If the property in the rejected goods had passed to the consumer before the rejection was notified, the property in those goods revests in the supplier on the notification of the rejection.
PUBLICATION DETAILS
FILE NUMBER: | XD 13/1063 |
PARTIES, APPLICANT: | Mary-Anne Carroll |
PARTIES, RESPONDENT: | Pollock Wholesale Pty Ltd |
TRIBUNAL MEMBERS: | Ms W. Corby – Senior Member |
DATES OF HEARING: | 17 February 2014 |
PLACE OF HEARING: | ACAT Canberra |
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