Cass v MB Vic Pty Ltd

[2020] QCAT 468

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:  Cass v MB Vic Pty Ltd [2020] QCAT 468

PARTIES:  MICHAEL CASS

(applicant)

V

MB VIC PTY LTD

(respondent) APPLICATION NO/S:    MVL015-20

MATTER TYPE:             Motor vehicle matters DELIVERED ON:  27 November 2020

HEARING DATE:          26 November 2020

HEARD AT:  Brisbane

DECISION OF:               Member Cranwell

ORDERS:  MB Vic Pty Ltd is to replace the distronic sensor and

associated bracket on the motor vehicle the subject of these proceedings within 28 days of the date of this order.

CATCHWORDS:            TRADE  AND  COMMERCE  –  COMPETITION, FAIR

TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – GUARANTEES, CONDITIONS AND WARRANTIES IN  CONSUMER  TRANSACTIONS  – GUARANTEES,

CONDITIONS AND WARRANTIES – whether motor vehicle of acceptable quality – whether failure a major failure

Competition and Consumer Act 2010 (Cth), Schedule 2 – Australian Consumer Law, s 54, s 259, s 260

Fair Trading Act 1989 (Qld), s 50A

Medtel Pty Ltd v Courtney (2003) 130 FCR 182 Morphy v Beaufort Townsville Pty Ltd [2018] VCAT 1520

APPEARANCES & REPRESENTATION:

Applicant:  Self-represented

Respondent:  Self-represented

REASONS FOR DECISION

On 20 January 2020, Mr Cass (the applicant) filed an Application – Motor Vehicle Dispute with the Tribunal. The respondents is MB Vic Pty Ltd (the respondent). The applicant is the owner of a 2017 Mercedes Benz C250D (the motor vehicle). The applicant purchased the motor vehicle from the respondent on 8 June 2019 for

$55,426.50. The motor vehicle is recorded in the contract as having had an odometer reading of 15,130 km.

The applicant seeks relief under the Australian Consumer Law, which is Schedule 2 to the Competition and Consumer Act 2010 (Cth). The relief sought by the applicant is a refund plus damages. Section 50A of the Fair Trading Act 1989 (Qld) vests the Tribunal with jurisdiction in relation to motor vehicles in respect of certain actions under the Australian Consumer Law.

Australian Consumer Law provisions

Section 54(1) of the Australian Consumer Law provides that, where a person supplies goods in trade or commerce, the goods are guaranteed to be of ‘acceptable quality’. The time at which goods are to be of acceptable quality is the time at which the goods are supplied to the consumer: Medtel Pty Ltd v Courtney (2003) 130 FCR 182 at [64] and [70]. However, information available after the time of supply may be taken into account in deciding whether the goods were of acceptable quality at the time of supply. Sections 54(2) and (3) of the Australian Consumer Law define acceptable quality as follows:

(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.

The Macquarie Dictionary defines ‘durable’ as ‘having the quality of lasting or enduring of or relating to goods which will be good for some time, as opposed to those intended to be used or consumed immediately’. In Morphy v Beaufort Townsville Pty Ltd [2018] VCAT 1520 at [72], the Victorian Civil and Administrative Tribunal stated:

[T]he context of the section clearly requires that the question of durability be determined by having regard to how long a ‘reasonable consumer’ would expect the goods to last, taking into account the price paid, the nature of the goods and the representations made about the goods.

Evidence

The applicant gave written evidence that:

(a)The motor vehicle was shipped from Melbourne to Brisbane by Auto Move. The booking invoice is in the applicant’s name.

(b)The applicant received the motor vehicle in Brisbane on 5 July 2019.

(c)The motor vehicle displayed a fault code indicating that the sensors were dirty. The applicant washed the motor vehicle, but the fault code persisted. The respondent told the applicant to take the motor vehicle to a Mercedes Benz dealer for assessment.

(d)The applicant drove to Cairns. On two occasions, the motor vehicle accelerated when the cruise control was engaged. The applicant had to brake hard to avoid the vehicle in front, and his passengers screamed due to the extreme braking.

(e)The motor vehicle was examined by the Mercedes Benz dealer in Cairns. A report dated 26 July 2019 from the dealer noted the “[distronic] sensor has sign of impact damage” and recommended replacement of the sensor and bracket at the cost of $5,400.

(f)The applicant engaged in email correspondence with the respondent. Relevantly, on 21 August 2019, the applicant requested that the respondent take the vehicle back. On 17 September 2019, the respondent stated in an email that the damage to the motor vehicle must have occurred after it left their possession, but they would nevertheless replace the radar unit.

The respondent gave written evidence that the motor vehicle went through extensive checks prior to delivery. It acknowledged that its response was slow, but that it needed to be satisfied that the damage took place prior to delivery. Ultimately, as a gesture of good will, it offered to replace the part even though it was unable to ascertain exactly what happened.

At the hearing, the applicant submitted that the impact damage could only have been caused by an accident which occurred prior to the time of supply. The respondent submitted that the damage to the distronic sensor could have been caused by something like a stone flying up from underneath the motor vehicle, and that this was not an uncommon occurrence. The distronic sensor is necessarily located at the front of the vehicle, and measures the distance between the vehicle and the vehicle in front. In my view, there is insufficient evidence for me to conclude that the motor vehicle was involved in an accident. This was not expressly addressed in the evidence, and arose only in submissions. However, the respondent’s position that the impact damage to the sensor could have been caused by a stone flying up from underneath leads me to conclude that the sensor was not durable. Whether the damage occurred before or after the time of supply is irrelevant to my conclusion as to whether the sensor was durable at the time of supply. Based on the evidence before me, I find that a reasonable consumer fully acquainted with the state of the motor vehicle at the time of purchase, particularly having regard to:

(a)the distronic sensor being damaged, possibly by a stone flying up from underneath, either before or shortly after the time of supply;

(b)the purchase price of $55,426.50; and

(c)      the motor vehicle having an odometer reading of 15,130 km, would not regard the motor vehicle as durable.

Remedies

The remedy available to the consumer against the supplier depends in the first instance on whether the failure is a ‘major failure’. That term is defined in s 260 of the Australian Consumer Law to relevantly mean:

(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.

In considering whether there is a major defect, I have had regard to the submissions of the parties. The applicant submitted that the sudden acceleration of the motor vehicle made it unsafe to drive, and he would not have acquired the vehicle had he been aware of the problem. The respondent submitted that the motor vehicle would not have been able to accelerate to a speed any faster than the maximum speed set by the driver when engaging the cruise control. It also submitted that the issue could be avoided by operating the motor vehicle without the cruise control until the distronic sensor was replaced. On balance, I am not satisfied that there is a major failure for the purposes of the test contained in s 260. I accept that a fault with the distronic sensor could not have caused the motor vehicle to accelerate beyond the maximum speed set by the applicant, and note that it the responsibility of the driver maintain due care and attention even when the cruise control is engaged. In those circumstances, I do not accept that the failure made the motor vehicle unsafe or that a reasonable consumer would not have acquired the vehicle. There is no evidence to suggest that replacing the sensor occasions any particular difficulties, or that replacement cannot take place within a reasonable time. In the case of a failure which is not a major failure, the remedies available to the applicant are set out in s 259(2) of the Australian Consumer Law as follows:

(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.

Pursuant to s 259(2)(a), I will order the respondent to replace the motor vehicle’s distronic sensor and bracket.

Damages

The Tribunal is vested with jurisdiction in respect of actions under s 259(4) of the Australian Consumer Law, which provides:

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.

The applicant claims $675 in damages, being the cost of transporting the motor vehicle from Melbourne to Brisbane. In circumstances where I have found the applicant is not entitled to reject the motor vehicle, and will continue to have the benefit of the motor vehicle upon it being repaired, he is not entitled to these damages.

Orders

The respondent is to replace the distronic sensor and bracket on the motor vehicle within 28 days.