Cramb v Magnetic Motors Pty Ltd t/as Mercedes-Benz Townsville - [2025] QCAT 435

QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL

CITATION:

Cramb v Magnetic Motors Pty Ltd t/as Mercedes-Benz Townsville [2025] QCAT 435

PARTIES:

JAMES CRAMB

(applicant)

v

MAGNETIC MOTORS PTY LTD T/AS MERCEDES-BENZ TOWNSVILLE

(respondent)

APPLICATION NO/S:

MVL010-23

MATTER TYPE:

Motor vehicle matter

DELIVERED ON:

24 October 2025

HEARING DATE:

21 November 2024

HEARD AT:

Brisbane

DECISION OF:

Member Carrigan

ORDERS:

The Tribunal orders that the Application – Motor Vehicle Dispute filed in the Tribunal on 12 January 2023 by James Cramb is dismissed.

CATCHWORDS:

COMPETITION AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – JURISDICTION – claim that mechanical services provided in breach of consumer guarantee – claim based on consumer guarantee to provide mechanical services with due care and skill – jurisdiction of the Tribunal to hear and decide a motor vehicle dispute

Competition and Consumer Act 2010 (Cth), Schedule 2, s 2, s 8, s 60, s 61, s 62, s 63

Fair Trading Act 1989 (Qld), s 50A
Human Rights Act 2019 (Qld), s 8(b), s 13, s 48

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 9

APPEARANCES & REPRESENTATION:

Applicant:

Self-represented

Respondent:

Self-represented

REASONS FOR DECISION

The issue in these proceedings is whether Magnetic Motors Pty Ltd trading as Mercedes-Benz Townsville (‘the Respondent’) by flushing and reinstalling an intercooler has caused the engine of James Cramb’s (‘the Applicant’) Mercedes-Benz X Class 250 Dual Cab utility (‘vehicle’) was in breach of the Australian Consumer Law guarantees.

Background Facts

The vehicle was sold for $48,000.00 by the Respondent’s Dealership on 8 June 2018 to a person who later sold the vehicle to the Applicant. The vehicle was manufactured on 20 December 2017 and was supplied with a manufacturer warranty.
On 22 May 2019 the vehicle had an odometer reading of 9055 kms. At that date the Respondent carried out a 20,000 km service as well as “cleaning off cracked mud and re-shaped under trays and reworked the brackets” on the vehicle.
On 7 June 2019 the Respondent undertook a further service of the vehicle for steering suspension, bodywork, update software on radio and replaced manuals. The vehicle’s odometer reading was 9606 km.
On 21 June 2019 the then owner of the vehicle reported the vehicle was losing oil “quickly”. The Respondents service report of that date says that the “oil level, to high” and that “visible test OK”. The vehicle’s odometer reading was 10,521 km.
On 25 June 2019 the then owner of the vehicle arranged a further vehicle service with the Respondent who was advised that the “orange engine light on – and vehicle is in limp mode”. The Respondent service report states that this was “due to block in a filter – full of sand”. The vehicle’s odometer reading was 10,775 km.
In July 2019 the vehicle was driven to Ayr, North Queensland, where the “low oil lamp” light became illuminated and the vehicle engine failed. The vehicle was towed back to the Respondent’s workshop in Townsville.
On 30 August 2019, under a manufacturer’s warranty, the Respondent replaced the existing engine and turbo of the vehicle with a new engine and turbo. However, the intercooler was not replaced but was flushed and reinstalled. The Respondent’s service record of those repairs also reports that “removed the turbo and found seized” and then stated:
Remove small oil pan and check for swarf and metal filings. Found the oil pan with metal filings. Informed to replace engine, and replace turbo, replace DFP filter and flush out intercooler.
Other mechanical services to the vehicle were undertaken according to the Respondent’s service record. The vehicle’s odometer reading was 10,955 km.
On 26 June 2020 the then owner of the vehicle arranged for a further service of the vehicle with the Respondent reporting that the vehicle is using excess oil. The Respondent carried out the service with a new oil and filter change and an oil consumption test. The vehicle’s odometer reading was 19,132 kms.
By 14 July 2020 the vehicle was reported as using excessive oil and the then owner arranged for a further service. The Respondent’s service records indicate that the cause of the problem was unknown and that the vehicle requires an oil consumption test. The vehicles odometer reading was 20,171 kms.
On 27 August 2020 the then owner of the vehicle arranged for the Respondent to replace the battery. The vehicle’s odometer reading was 22,600 kms.
On 26 September 2021 the then owner arranged for a further service of the vehicle by the Respondent. This vehicle service was because the “engine light” being illuminated, no cruise control operating and other mechanical issues. The vehicle’s odometer reading was 23,461 kms.
On 20 October 2020 the former owner of the vehicle arranged for warranty repair work to the interior driver-side door handle by the Respondent. The vehicle’s odometer reading was 23,903 kms.
On 21 April 2021 the former owner arranged for a replacement windscreen to the vehicle by the Respondent. The odometer reading was 27,349 kms.
On 29 May 2021 the vehicle was purchased by the Applicant. There are no details of the contract of purchase of the vehicle. However, the Respondent said that it was by “private treaty” and was not a sale through its Dealership. The Applicant arranged with Townsville Mobile Mechanic to carry out a “Pre-purchase Inspection” of the vehicle which, on the evidence in these proceedings, did not disclose any mechanical malfunction with the vehicle.
The vehicle warranty expired shortly afterwards on 7 June 2021.
On 8 June 2021 the Respondent carried out a further service on the vehicle for repair of “high level brake light” which had become inoperable. The former owner of the vehicle was invoiced $649.25 for those repairs. The vehicle’s odometer reading was 27,423 kms.
On 23 June 2021 the vehicle was driven from Townsville to Brisbane and then for a further three weeks with highway driving.
On 18 July 2021 the vehicle was driven from Brisbane to Charters Towers.
On 19 July 2021 a warning light was illuminated on the vehicle’s dashboard for a “service due”. On 23 July 2021 the Applicant was provided a tax invoice from DTS Service Centre of Charters Towers for labour, parts and consumables for a 30,000 km service to the vehicle. That tax invoice sets out details of the service including inspection of the vehicle and the only mechanical issue identified was the code for “BLOODF12 Airbag” which was discussed with the Applicant. No other mechanical malfunction was noted in the tax invoice and it appears that the vehicle was operating normally at the conclusion of the service. The vehicle’s odometer reading was 33,889 kms.
By the beginning of August2021 the vehicle was having “issues starting” in the mornings. The Applicant arranged for a further service of the vehicle on 3 August 2021 at DTS Service Centre of Charles Towers who inspected the vehicle and carried out mechanical service with replacement of a fuel filter and reported that:
Vehicle is functioning as it should.
The vehicle’s odometer reading was 35,177 kms.
On 10 August 2021 the engine completely failed for a second time. The vehicle engine would not start. The vehicle was then towed from Chartist Towers to the Respondent’s premises in Townsville. After a delay of approximately four weeks, when the Applicant said he received “no updates”, the Respondent gave the Applicant a loan vehicle for six weeks. During this period Mercedes-Benz Australia confirmed that a “Good Will Claim” had been denied for the repair of the vehicle.
On 25 October 2021 the Respondent sent an invoice to the Applicant for $4,475.40 for mechanical services to investigate engine faults of the vehicle which included:
(a)removal and replacement of the starter motor;
(b)replace fuel filter as precaution has non-genuine fuel filter installed by a previous repairer;
(c)engine still not starting, carried out compression test and engine leakage test. All pressures very low;
(d)engine removed and checked head, found intake manifold butterfly had melted;
(e)engaged Ian Payne Engineering to measure cylinder bores and report.
The Respondents service records stated that the vehicle’s odometer reading was 35,553 kms.
A quote from the Respondent dated 25 October 2021 was to the remove the engine and replace complete engine, intake manifold, intercooler (excluding turbos) including parts and labour at a cost of $19,926.20. The Respondent gave the Applicant further options for removal and dismantle motor and diagnostics ($3,920.40) and repair and replace starter motor and fuel filter that had burnt out ($5,292.60).
The Applicant says that apart from the cost of repairs, he has lost income, had to hire a vehicle ($8,811.00) and incur legal costs ($2,575.00).
The evidence in these proceedings includes a decision of the Tribunal on 10 November 2022 to dismiss an Application – Motor Vehicle Dispute filed by the Applicant on 14 September 2022 and brought against the Respondent. Those proceedings were dismissed due to:
non-compliance with the Tribunal directions of five October and 22 October 2022
Normally where proceedings are dismissed there is an issue estoppel against bringing subsequent proceedings involving the same dispute. However, those proceedings were dismissed for non-compliance with directions and there was not a final decision on the merits of the claim which would constitute an issue estoppel. Consequently, the Applicant can bring these current proceedings against the same Respondent presumably involving the same subject matter and dispute.
On 12 January 2023 the Applicant filed in the Tribunal an Application – Motor Vehicle Dispute seeking damages from the Respondent on the basis of the alleged negligence of the Respondent and also relying upon the Australian Consumer Law Queensland (‘ACL’) and section 50A of the Fair Trading Act 1989 (Qld).
During the course of these proceedings the Applicant filed on 10 June 2024 a Request for decision by default-liquidated damages and altered the claim being brought against the Respondent. The altered claim was in these terms:
(a)a complete repair of the vehicle to restore it to a fully driveable condition;
(b)a cash settlement of $25,000 to arrange repairs through a third party source;
(c)expenses of 33,904.70 to include:
(i)      legal costs $2,821.50;
(ii)      Mercedes Benz Quote $27,000.00 (estimate);
(iii)     Independent Expert Report (Coastwide Engineering Solutions) $4,083.20

The Tribunal’s Jurisdiction

The Tribunal has jurisdiction to hear and determine matters it is empowered to deal with under the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’) or an enabling Act.[1]
[1]Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 9.
The Tribunal has jurisdiction by reason of section 50A of the Fair Trading Act 1989 (Qld) (‘Fair Trading Act’). The Fair Trading Act is the “enabling Act” for these proceedings.
The Tribunal will proceed to consider the Applicant’s claim under this provision relating to the ACL. Whether the Applicant can bring these proceedings and, whether the Applicant is entitled to a remedy under the ACL will be determined below.
The Tribunal does not have jurisdiction in respect of the common law cause of action of negligence and these proceedings will not be heard or determined in accordance with that claim.

Experts’ Reports

The report dated 13 November 2021 from Col Potts Engineering said that while there was a service history from Mercedes-Benz Townsville there was no service history of the vehicle provided by the Applicant, no report on engine oil from damaged engine, nor an analysis of the diesel fuel from the vehicle and the engine oil used; batch number – manufacturer not listed. The report also stated:
It is not possible to flush the intercooler out all contamination and price prohibitive repair.
This type of V6 diesel engine fitted with a new axillary pollution systems, low quality of diesel fuel causes considerable amount of deposits inside intake systems the crankcase ventilation systems vents back to the intake of the exhaust driven turbo charger going through the turbo blades, this oil sludge starts to accumulate on walls of turbo blades and swirl valves damaging the exhaust driven turbo. It is noted that the Turbo specialist recommended changing the oil at 6,000 kms and remove intake plumbing and spray with carburettor type cleaner in these air intake senses to prevent contamination.
The report concluded by stating that the engine failure was caused by two problems, namely:
contaminants been blown into the engine, retained in intercooler (not replaced) allowing contaminants to enter engine and destroy it;
sludge being built up in the air intake system causing engine to go into limp mode (damage to turbo blade)
The Respondent in a letter to the Office of Fair Trading[2] points out that the vehicle engine “4 cylinders” and was not a “type of V6 engine” as reported in the Col Potts report. The Respondent also submits that the low quality of diesel fuel is causing considerable amount of deposits has no application to the Respondent and is not responsible for the quality of diesel fuel used by the Applicant or the previous owner. The Respondent concludes its submissions with respect to this report by Col Potts:[3]
Mercedes Benz Townsville does not accept either of the conclusions reached by Mr Potts for the cause of the engine failure. We are concerned he has written a report on limited facts, and has not seen or inspected the engine himself
[2]The letter is Attachment 1 to the Respondent’s Submissions filed 5 July 2024.
[3]Respondent’s Submissions filed 5 July 2024 at Attachment 1.
On 7 May 2022 a Report was obtained from Red Devil Radiators and Air Conditioning in Brisbane in which they advised that they flush and pressure test vehicle intercoolers which is usually performed after a turbo or engine failure. They further stated:
The option to replace the intercooler is always best practice if the failure has the potential of introducing debris into the system as we do not know and cannot guarantee removal of any foreign metal from the internal mesh of the intercooler.
In an undated report from Ian Payne’s Automotive Engineering, he said that piston number three (3) has physical movement in cylinder suggesting piston skirt and rings are worn and then stated:
From the colour and general appearance of all pistons I am of the opinion that the wear has been caused by dust through the air/induction.
A very detailed and extensive report dated 20 June 2023 has been obtained from Coastwise Engineering Solutions of Caloundra. The report says that:
Mr Cramb bought the vehicle privately and had a pre-purchase inspection carried out on 6 June 2021 at 27,426 km by Townsville Mobile Mechanic.
The report contains a significant number of photographs of the vehicle and observations on various components of the engine and concluded that:
the engine is severely worn and requires replacing including turbos, air induction system, inlet manifold and intercooler due to damage and contamination;
dust and sand were identified causing wear and is consistent with damage due to abrasion from contamination entering the air intake systems. Dust and sand in the engine oil and engine oil filters have been identified and corroborate with the observed wear;
is probable the damage to the replacement engine was initiated soon after it was installed by the previous owner and has got progressively worse and with the normal use of the vehicle by Mr Cramb. It is probable that the failure of the first engine was also related to the distortion of the plastic air cleaner assembly;
In the Respondent’s submissions they argued the statement by the Coastwise report that the “unsealed intercooler was inspected” and no issue was identified and they then state:[4]
Mercedes Benz Townsville believes this statement alone proves that the intercooler was not the cause of the failure, and that the repair procedure is carried out were legitimate repairs.
[4]Respondent’s Submissions filed 5 July 2024 at page 2 in respect of the comments in the Coastwise Report at page 22 point 16.
The Respondent’s submissions further stated that that:
This repair was carried out whilst the vehicle was the property of the original owner and was carried out in full accordance with Mercedes Benz repair procedures. The claim is based upon the fact that Mercedes Benz Townsville flushed the intercooler during the repair. This is normal procedure and has been confirmed as the correct repair process by Mercedes Benz Australia. They are the foremost expert on this product.

Repair Invoices

On 12 November 2021 the Applicant obtained an Assessor’s Report for the repair of the vehicle from Auto & General Services in Brisbane. The labour and parts quote was $24,573.81.
The Applicant has provided an invoice from Fleet Crew dated 27 September 2021 for the hire of a 4WD Dual Cab with Canopy at a total cost of $8,110.00.
The Applicant also provided Tax Invoices dated 15 December 2001 from his Solicitor for a total of $2,821.50 relating to attendances, phone calls in correspondence with Mercedes-Benz which offered discounts fee of $1,375.00. Later in the proceedings, the Applicant filed a further tax invoice from his solicitors also dated 15 December 2021 recording that the total fees of $2,821.50 had been paid in full and that there was a “NIL” balance remaining. The evidence does not explain whatever happened to the discount of $1,315.00 offered in the first invoice referred to above.

The Applicant’s Claim under the Provisions of ACL

The Applicant’s claim for damages under the ACL is for breach of the guarantees relating to the supply of services. The guarantees relevant to these proceedings are as follows:
(a)the guarantee as to due care and skill;[5]
(b)the guarantee as to fitness for a particular purpose etc.[6]
[5]ACL s 60.
[6]Ibid s 61.
These guarantees are only available according to the ACL:
If a person supplies, in trade or commerce, services to a consumer…
There would not be any doubt that the supply of services from the Respondent in respect of the vehicle would have been “in trade or commerce”.
The question is whether the Applicant was a “consumer”. If the Applicant is a “consumer”, then he will have the benefits of the ACL and the guarantees referred to above. Alternatively, if he is not a “consumer” within the meaning of the ACL, then he is not a person who can benefit from that legislation and his claim for damages must be dismissed.

Is the Applicant a “Consumer” within the meaning of the ACL

The first issue whether the Applicant is a “consumer” for the purposes of the ACL depends on s 3(3) of the ACL. That section provides that:
A person is taken to have acquired particular services as a consumer if, and only if:
(a)the amount paid or payable for the services, as worked out under subsections (4) to (9), did not exceed:
(i) $40,000.00; or
(ii) if a greater amount is prescribed for the purposes of subsection (1)(a) – that greater amount; or
(b)the services were of a kind ordinarily acquired for personal, domestic or household use or consumption.
The significant words in the above provision refer to a person who “acquired particular services as a consumer” and also the exclusionary words which limit the provision to situations described as “if, and only if,” the matters in (a) and (b) above are satisfied.
The term “acquire” is defined in the ACL to include:[7]
In relation to services – accept.
[7]Ibid s 2.
The issue is then whether the Applicant “acquired the services” in relation to the replacement of the vehicle’s motor, turbos and flushing of the intercooler under warranty on 30 August 2019. Clearly on the evidence he did not acquire or accept tosee services. The Applicant did not purchase or otherwise have an interest in the vehicle until 29 May 2021, at the earliest. His purchase of the vehicle occurred a couple of months short of two years after the service was provided by the Respondent to the former owner of the vehicle. The person who “acquired the service” was the former owner of the vehicle and not the Applicant. The Tribunal makes a finding that at all material times the Applicant was not a “consumer” for the purposes of the consumer guarantees for the supply of services under the ACL. The consumer guarantees do not apply to the Applicant and neither does the ACL. For these reasons the Applicant’s Application – Motor Vehicle Dispute against the Respondent must fail. Accordingly, the Tribunal will dismiss the Application – Motor Vehicle Dispute filed by the Applicant on 12 January 2023.

While it is unnecessary to consider the Applicant’s Application any further, the Tribunal in any event has come to the conclusion that it is not satisfied on the whole of the evidence that the flushing of the intercooler under warranty on 30 August 2019 is the cause of the vehicle’s engine failing a second time on about 10 August 2021.The report from Coles Potts Engineering at face value does contain the statement that contaminants in the intercooler entered the engine and destroyed it. However, this report is very limited as It was lacking information about the vehicle service history (apart from that provided by the Respondent), and no report was made in the engine oil in the vehicle at the time of the second engine failure, there was no analysis of diesel fuel used or of the type of engine oil There are other concerns as the vehicle was identified as having a V6 engine whereas it has a four-cylinder engine. There was no discussion whether there was low quality diesel used. The contents of the coal Port Engineering report do not disclose whether the vehicle was seen and inspected for the purposes of the report. Rather, the inference drawn by the Tribunal is that it was not seen nor was it inspected for the purposes of that report. There is evidence from the Respondent that the flushing and re-installation of the intercooler is in the circumstances an acceptable practice. In considering all of these matters, the Tribunal was not satisfied by the Cold Pots Report that there is an irrelevant a breach of the consumer guarantees by the Respondent
The report from Red Devil Radiators refers to the practice of flashing and testing intercoolers but states that the best practice is to replace the intercooler. This report does not assist the Applicants case there was a breach of the relevant guarantees. The report from Ian Payne Automotive Engineering examines piston wear and the likely cause being from dust. The extensive report from Coastwide Engineering Solutions of Caloundra also refers to dust and sand as a causing wear and tear which had entered the air intake system as a result of distortion to the plastic hair cleaner assembly. These reports do not satisfy the Tribunal there has been the relevant breach of any guarantees assuming (but is not the case) the Applicant had the benefit of the guarantees in the ACL.
Even if the Applicant was to satisfy the Tribunal that he was a “consumer” (which he is definitely not according to the reasons set out in the previous paragraph) then the Tribunal would have still dismissed the Application on the basis that he had not satisfied the onus of proving that the flushing of the intercooler by the Respondent was the cause of the second engine failure.
For these reasons, the Tribunal will dismiss the Applicant’s claim in the Application – Motor Vehicle Dispute filed in the Tribunal on 12 January 2023.

Human Rights Act

Neither party made submissions whether the Human Rights Act 2019 (Qld) (‘HR Act’) applies to these proceedings.
The Tribunal must consider the human rights of the Applicant under the HR Act in reaching its decision in these proceedings.
The Tribunal is an entity which acts in an administrative capacity and is bound to comply with the HR Act in exercising its jurisdiction in relation to the Application filed by the Applicant.
In considering the provisions of the ACL and the Fair Trading Act, the Tribunal must, to the extent possible that is consistent with the purposes of the HR Act, interpret that legislation in a way that is compatible with the human rights of the parties.
The human rights of the Applicant include:
(a)recognition and equality before the law;
(b)property rights;
(c)fair hearing.
These human rights have to be considered by the Tribunal in the light of its exercise of its jurisdiction in these proceedings.
The Tribunal has made findings about the Applicant’s Application. These findings can possibly be a limitation on the human rights of the Applicant under the HR Act. This limits hisr entitlements by imposing, in effect, a liability and/or limits the parties’ equal treatment with other applicants making Application to the Tribunal.
However, any such limitation on the parties’ human rights arises from the provisions of the ACL, Fair Trading Act and the QCAT Act. While the Tribunal is required to make a decision that is compatible with human rights and is to give proper consideration to human rights relevant to the decision, the Tribunal can make such a decision if the Tribunal could not reasonably have acted differently or made a different decision because of a statutory provision.
The ACL and the Fair Trading Act create a legislative scheme in relation to the supply of services within Australia in accordance with the consumer guarantees. It has the purpose of protecting the community by providing rules about the provision of services with due care and skill. The ACL and the Fair Trading Act are to facilitate consumer protection relating to the supply of services in Australia.
This decision under the ACL and the Fair Trading Act is made in accordance with statutory provisions and is not an arbitrary decision. It is a decision based upon the legislative scheme and is reasonable and justified in accordance with s 13 of the HR Act in the light of the purposes of the consumer legislation. The decision in these proceedings is made in a way that is consistent with the purpose of the legislation and has been interpreted in a way that is compatible with human rights as required by s 48 of the HR Act. In these circumstances any limitation on the human rights of the Applicant is reasonable and is justified in terms of section 8(b) of the HR Act.

Orders

The Tribunal orders that the Application-Motor Vehicle Dispute filed in the Tribunal on 12 January 2023 by James Cramb is dismissed.