Cummings v Aluma Trailers Pty Ltd

[2023] NSWCATCD 91

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Cummings v Aluma Trailers Pty Ltd [2023] NSWCATCD 91

Hearing dates:

12 April 2023, 5 June 2023

Date of orders:

24 August 2023

Decision date:

24 August 2023

Jurisdiction:

Consumer and Commercial Division

Before:

J Searson, General Member

Decision:

(1) Aluma Trailers Pty Ltd must immediately accept Craig and Sally Cummings return of the 2021 Aluma Custom 4HAL Gooseneck trailer, 8’ wide, 7’6” internal height, overall length 35ft with Living Quarters with Full Size Slide Out and External Storage.

(2) Aluma Trailers Pty Ltd must pay Craig and Sally Cummings the sum of $209,000 on or before 30 September 2023.

(3) Upon Aluma Trailers Pty Ltd performance of Order 2 above Craig and Sally Cummings must do all things necessary to transfer unencumbered title of the 2021 Aluma Custom 4HAL Gooseneck trailer, 8’ wide, 7’6” internal height, overall length 35ft with Living Quarters with Full Size Slide Out and External Storage to Aluma Trailers Pty Ltd within 7 days.

Catchwords:

CONSUMER LAW — consumer guarantees – major failure – rejection of goods - rejection period–defective goods

Legislation Cited:

Australian Consumer Law NSW

Fair Trading Act 1987

Motor Dealers and Repairers Act 2013

Cases Cited:

Alliance Motor Auctions Pty Ltd v Saman [2018] NSWCATAP 137

Australian Knitting Mills Ltd v Grant (1933) 50 CLR 387

Avci v Inchurch Automotive Pty Ltd t/a Parramatta Motor Group [2019] NSWCATCD 39

Barbour v Autosports Five Dock Pty Ltd [2020] NSWCATAP 141

Burton v Chad One Pty Ltd [2013] NSWDC 301

Cary Boyd v Agrison Pty Ltd [2014] VMC 23

Contact Energy Ltd v Jones [2009] 2 NZLR 830

Hardwick Game Farm v Suffolk Agricultural Producers Association [1969] 2 AC 31

Matumaini v Automobile Industries Pty Ltd [2017] NSWCATAP 93

Medtel Pty Ltd v Courtney [2003] FCAFC 51

Medtel Pty Ltd v Courtney (2003) 130 FCR 182

Munday v Empire Auto Group Pty Ltd [2019] NSWCATAP 52

Rigby v LDV Automotive Pty Ltd & Anor [2021] QCAT 316

Safi v Heartland Motors Pty Ltd t/as Heartland Chrysler [2016] NSWCATAP 80

Texts Cited:

None cited

Category:

Principal judgment

Parties:

Craig Cummings (First Applicant)
Sally Cummings (Second Applicant)

Aluma Trailers Pty Ltd (Respondent)

Representation:

Ms King (Applicant)

Mr Knappick and Ms Richards (Respondent)

File Number(s):

GEN 23/00100

Publication restriction:

Nil

REASONS FOR DECISION

BACKGROUND

1. In this matter the applicants are seeking orders for a return and refund in relation to the purchase of a “gooseneck” style horse trailer which the applicants claim to be not of acceptable quality and or unfit for purpose.

2. The respondent opposed the application and the orders as sought by the applicants.

EVIDENCE

3. The applicants filed documentary evidence in support of their claim. These documents were entered into evidence and marked as “exhibit 1”. The applicants relied on an expert report prepared by Paul Little, Accident Investigation Services Pty Ltd dated 24 February 2023 (“Little report”).

4. The respondent relied upon a bundle documentary evidence which was entered into evidence and marked as “exhibit 2”. The respondent was reliant upon a report of Vaughan Manning, undated (“Manning report”). Darren Pollard, Central Coast Kitchens & Wardrobes dated 9 November 2022 (“Pollard report”)

5. Both the applicants and the respondent attended the hearing on 12 April 2023 and 5 June 2023. Ms King, and Mr and Mrs Cummings gave affirmed evidence on behalf of the applicant. Mr Knappick and Ms Richards gave affirmed evidence on behalf of the respondent.

6. The parties were given the opportunity to cross examine each other.

7. All parties were invited to provide written submissions to the Tribunal after the conclusion of the hearing. All parties have provided written submissions to the Tribunal.

8. The Tribunal has read and considered all of the oral and documentary evidence and the submissions of the parties.

JURISDICTION

9. The Tribunal has jurisdiction to hear and determine this matter under Part 6A of the Fair Trading Act 1987 (NSW)(“FT Act”). FT Act (sections 79I and 79J) as an order is sought that requires the respondent to pay a specified sum of money subsection 79E(1)(a).

10. The applicants are consumers pursuant to section 79D of the FT Act. The respondent is a supplier of goods on the basis that it supplied the goods (being the trailer) the subject of the dispute in the course of carrying on a business: sections 79D and 79G.

11. The trailer was supplied in NSW: section 79K(1)(a). The application has been made to the Tribunal within the three-year time limit required by section 79L.

12. It is for the Tribunal to determine the correct list for the matter to be brought in. This matter was initially brought as a consumer claim but it appears to be in fact a motor vehicle claim.

13. The jurisdictional limit for motor vehicle consumer claims is $100,000 unless the vehicle is new and substantially for private use. Where the vehicle is new and substantially for private use there is unlimited jurisdiction pursuant to s 79S(6) of the FTA. Section 79S (7) of the FTA says that “motor vehicle” is as per the definition given in the Motor Dealers and Repairers Act 2013.

14. Section 4 of the Motor Dealers and Repairers Act 2013 (“MDRA”) provides a definition of a motor vehicle as follows (emphasis added):

motor vehicle means a vehicle of the following kind that is built to be propelled by a motor that forms part of the vehicle, and includes a trailer:

(a)  any description of vehicle on wheels, other than a vehicle used on a railway or tramway or an aircraft,

(b)  any description of tracked vehicle, or any description of vehicle that moves on revolving runners inside endless tracks, that is not used exclusively on a railway or tramway.

15. Trailer is also further defined in s 4 of the MDRA as:

trailer means a vehicle that—

(a)  is built to be towed, or is towed, by a motor vehicle, and

(b)  is not capable of being propelled in the course of normal use on roads without being towed by a motor vehicle,

whether or not its movement is aided by some other power source, but does not include a motor vehicle being towed or a trailer having a tare weight of 250 kilograms or less.

16. It appears therefore that the trailer the subject of the dispute in this matter could be considered to be a new motor vehicle. As a result of this, the claim falls within the monetary limit on the Tribunal’s jurisdiction being the new motor vehicle exception to the prescribed monetary limit on the Tribunal’s order making power: section 79S(6).

17. The Australian Consumer Law NSW (“ACL”) is part of the law of NSW, and may be used in deciding a consumer claim under Part 6A of the FT Act by virtue of section 28 of the FT Act. It contains, in Chapter 3, a number of guarantees by suppliers of goods and services that are implied into consumer transactions. These include in relation to the supply of goods, a guarantee as to acceptable quality and fitness for purpose.

18. The Tribunal’s jurisdiction under the ACL is not entirely equivalent to its jurisdiction under Part 6A of the FT Act. However, there is no real difference in the jurisdiction for the purposes of these proceedings.

19. The applicants appears to allege that there has been a “major failure” in relation to the consumer guarantees under the ACL as per section 260. It appears that the applicants are relying on section 54 in relation to the guarantee as to “acceptable quality”.

20. In section 54 of the ACL it states that if a person supplies goods in trade and commerce (and not by auction) there is a guarantee as to acceptable quality: sub-section 54(1). Goods are of acceptable quality if they are fit for all the purposes for which goods of that kind are commonly supplied, they are acceptable in appearance and finish, and are free from defects, safe and durable: subsection 54(2)(a) to (e).

21. The test in relation to “acceptable quality” is an objective test. It is what a “reasonable consumer” fully acquainted with the state and condition of the goods (including any hidden defects of the goods) would see as acceptable having regard to the nature of the goods, the price paid for them, any statements made about the goods in advertising materials, any representations made about the goods by the supplier or manufacturer of the goods, and any other relevant circumstances relating to the supply of the goods: subsection 54(3).

22. Subsections 54(4) to (7) of the ACL set out the exceptions where a supplier will not be liable for the supply of goods that are not of acceptable quality. None of these exceptions are relevant in the current matter.

23. As noted in the matter of Avci v Inchurch Automotive Pty Ltd t/a Parramatta Motor Group [2019] NSWCATCD 39 at 44:

“The temporal focus of section 54 is the time the goods are supplied, informed by what is known of their subsequent condition and by what it was reasonable to expect from the type of goods in issue: see generally, Medtel Pty Ltd v Courtney [2003] FCAFC 51 per Moore J at [40], Branson J at [70], and Jacobson J agreeing with Branson J at [81]. In this respect, it falls to the applicant to prove on the balance of probabilities that the motor vehicle was not of acceptable quality at the time of supply having regard to what it was reasonable to expect in terms of its future function at that time”.

24. Section 55 of the ACL sets out the guarantees as to fitness for purpose and relevantly provides as follows:

Guarantee as to fitness for any disclosed purpose etc.

(1) If:

(a) a person (the supplier ) 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 reasonably fit for any disclosed purpose, and for any purpose for which the supplier represents that they are reasonably fit.

(2) A disclosed purpose is a particular purpose (whether or not that purpose is a purpose for which the goods are commonly supplied) for which the goods are being acquired by the consumer and that:

(a) the consumer makes known, expressly or by implication, to:

(i) the supplier; or

(ii) a person by whom any prior negotiations or arrangements in relation to the acquisition of the goods were conducted or made; or

(b) the consumer makes known to the manufacturer of the goods either directly or through the supplier or the person referred to in paragraph (a)(ii).

25. In section 259 of the ACL the remedies that are available to a consumer where a supplier of goods has failed to comply with the guarantee as to acceptable quality and fitness for purpose are set out.

26. If the failure to comply is a “major failure”, the consumer may, subject to section 262 of the ACL, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection: subsection 259(3)(a). The consumer may also, 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 failure: subsection 54(4).

27. Section 260 of the ACL sets out the circumstances where a failure to comply with the guarantee as to acceptable quality will be a “major failure” Relevantly, there will be a major failure if the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure (subsection 260(a)) or 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 (subsection 260(d)) or the goods are not of acceptable quality because they are unsafe (subsection 260(e)).

28. In Safi v Heartland Motors Pty Ltd t/as Heartland Chrysler [2016] NSWCATAP 80 (“Safi”) the Appeal Panel of NCAT set out a helpful summary of the approach and principles to be applied in the construction of section 260:

85   Section 260 of the ACL (NSW) sets out five measures against which non-compliance is to be assessed for the purposes of determining whether there is a “major failure”. As observed by the Magistrates’ Court of Victoria in Cary Boyd v Agrison Pty Ltd [2014] VMC 23 at [50], for there to be a major failure it was not necessary for the claimant to establish each of the matters set out in s 260, establishing one is sufficient. This is clear from the drafting of the section.

86   The first measure, under s 260(a), is whether “the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure”.

87   Subsection 260(a) applies to a generic “reasonable consumer” who acquires goods. It has the broadest and most general application. In contrast, s 260(d), where goods are unfit for a disclosed purpose, only applies when there have been specific negotiations about purpose between a consumer and a supplier. Similarly, s 260(b) only applies where goods have been acquired by description, sample or as a demonstration model.

88   Subsections 260(c) and 260(e), namely where goods are “substantially unfit” or where they are “unsafe”, direct specific attention to the nature and extent of the failure. Whereas s 260(a) directs attention to the mind of the reasonable consumer, although the nature and extent of the failure is relevant in a contextual sense. There is an overlap between ss 260(a), 260(c), and 260(e). For instance, if it is established that goods are unfit for the purpose for which goods of the same kind are commonly supplied and that they cannot be remedied easily or in a reasonable time, it follows that a reasonable consumer, fully acquainted with this fact, would not have acquired the goods. The same can be said of goods that are found to be unsafe. However, the reverse is not true. Subsections (c) and (e) require proof of specific factual matters in relation to the nature of the failure in the goods, subsection (a) does not.

89   Subsections (a), (c) and (e) of s 260 are closely linked to the consumer guarantee of “acceptable quality” under s 54. Relevantly, s 54 requires that, among other things, goods be “fit for all purposes which goods of that kind are commonly used” and “safe” which is to be adjudged by the “reasonable consumer fully acquainted with the state and condition of the goods”. As such, the inquiry as to whether goods comply with the guarantee of acceptable quality and any findings about this matter will be relevant to the inquiry about whether such failure is a major failure for the purposes of s 260.

29. The Appeal Panel in the same matter at [101] and [102] set out the following principles to be used in determining whether there is a major failure to comply with the guarantee as to acceptable quality:

101   1.   A major failure may be constituted by one defect or a series of specific or individual defects which, when taken as a whole, constitute a major failure;

2.   The test of whether goods “would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure” is an objective one.

3.   A “reasonable consumer” would expect teething problems, even in a new vehicle.

4.   The question to ask is whether the reasonable consumer, given the option of acquiring particular good or alternatively purchasing either nothing or a different model, would not have acquired the good.

5.   Defects which result in goods failing to comply with the guarantee of acceptable quality will not invariably be a major failure and it will depend on the nature and extent of the failure; and

6.   The cost of repair, in proportion to the purchase price, and the question of whether the defects can be remedied easily and in a timely manner are relevant considerations.

102   In our view, the purchase price for the goods and the nature of the defect are also relevant considerations for a “reasonable consumer”.

30. Section 261 of the ACL sets out how suppliers may remedy a failure to comply with a consumer 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, by repairing the goods, or by replacing the goods with goods of an identical type, or by refunding any money paid by the consumer for the goods and an amount that is equal to the value of any other consideration provided by the consumer for the goods.

31. However, section 262 of the ACL limits the circumstances in which a consumer is entitled to reject goods. A consumer is not entitled to notify a supplier of goods that the consumer rejects goods if, relevantly, the goods were damaged after being delivered to the consumer for reasons not related to their state or condition at the time of supply: section 262(1)(c).

THE FACTS

32. The evidence reveals the following facts:

1. The respondent is a supplier of American “Gooseneck” style horse trailers.

2. The applicants met with the respondents in or about late September 2020 to view several horse trailers.

3. The applicants and the respondents entered into a contract for the respondent to supply the applicants with a custom “gooseneck” horse trailer in or about late February 2021.

4. The “sales order” from the respondent dated 17 February 2021 notes that it is for a “2021 Aluma Custom 4HAL Gooseneck, 8’ wide, 7’6” internal height, overall length 35ft with Living Quarters with Full Size Slide Out and External Storage”.

5. The cost of the trailer was $190,900 plus GST. This price did not include registration, delivery, insurance or any on road costs / taxes.

6. The sales order noted that “Build time from time of deposit is approximately 12 months and may be delayed due to matters and circumstances beyond our control”.

7. The payment terms were “50% deposit to commence works, 40% prior to fit out, and 10% final balance within 7 days of completion of works”.

8. The respondents and applicants agreed on a 30% deposit to commence works as per an email sent by the respondent to the applicant on 17 February 2021.

9. The applicants received an invoice for the amount of $209,000 on or about 23 February 2021 due to be paid on 2 March 2021.

10. The applicants paid the respondent the agreed 30% deposit amount of $63,000 via bank transfer on or about 24 February 2021.

11. On or about 23 June 2021 the applicants paid the respondent an amount of $42,000 being the remaining 20% deposit via bank transfer.

12. On or about 26 August 2021 the respondent provided progress photos of the trailer build to the applicants and requests a further 40% progress payment prior to fit out.

13. On or about 2 September 2021 the applicants pay the respondent an amount of $41,993 via bank transfer.

14. The applicants collected the trailer from the respondent on or about 11 June 2022.

15. The applicants found that the trailer did not have a VIN plate or stamped VIN number on the chassis. There was no 240v compliance certificate supplied. No engineering compliance certificate was supplied. The trailer was therefore unable to be registered.

16. Further, upon inspection the applicants found issues with:

1. The “slide out”

2. Ceilings

3. Main bed area

4. Main living area

5. Bathroom / toilet area

6. Main entry door and external steps

7. Horse area

8. External

9. Underneath float.

17. The parties subsequently fell into dispute.

18. The applicants’ solicitor sent a letter of demand to the respondents dated 13 July 2022 rejecting the trailer and seeking a refund.

19. The applicants made a complaint to NSW Fair Trading about the respondent.

20. Fair Trading issued a warning to the respondent for being an unlicensed motor dealer, in contravention of s 11 of the Motor Dealers and Repairers Act 2013 on 9 January 2023.

21. The applicant filed this application before the Tribunal on 3 January 2023.

CONSIDERATION

33. In order to determine this matter, and having regard to the application, the facts and the law, the Tribunal must answer the following:

1. Did the respondent fail to comply with the guarantee as to acceptable quality in the supply of the trailer to the applicants?

2. If so, was this a major failure?

3. If so, was the applicant entitled to reject the vehicle?

4. What remedy is the applicant entitled to?

5. What orders are necessary to do justice between the parties?

GUARANTEE AS TO ACCEPTABLE QUALITY

34. The first consideration is whether there has been a breach of the guarantee as to acceptable quality in the supply of goods as per s 54 of the ACL. The applicant contends that the respondent(s) have breached their obligations in this regard due to multiple issues with the trailer.

35. As noted in the matter of Rigby v LDV Automotive Pty Ltd & Anor [2021] QCAT 316 at 7:

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.

36. In the matter of In Burton v Chad One Pty Ltd [2013] NSWDC 301 at [38] to [42] a summary of the approach and the principles to be applied in the construction of section 54 were set out as follows:

38   The decision of the Auckland Motor Vehicle Disputes Tribunal in Witton v Taupo Motor Company Limited 29 November 2010 contains a helpful analysis of the equivalent New Zealand provision of s.54:

"The guarantee of acceptable quality contained in s.54 is in three parts. A set of quality elements contained in s.54(2)(a) to (e), a reasonable consumer test which applies a consumer's objective evaluation of those quality elements, and a set of factors in s.54(3)(a) to (e) which are to be taken into account by the reasonable [consumer]."

39   The New Zealand High Court in Contact Energy Ltd v Jones [2009] 2 NZLR 830 at [86] and following, said:

"The quality standard is set by reference to the expectations of a reasonable consumer "fully acquainted with the state and condition of the goods, including any hidden defects." The phrase derives from s 16(b) of the Sale of Goods Act 1908, which established an exception to the warranty of merchantable quality of goods bought by description from sellers dealing in goods of that description. The warranty does not apply where the buyer had examined the goods, as regards defects which such examination ought to have revealed."

40   The court referred to Australian Knitting Mills Ltd v Grant (1933) 50 CLR 387 and continued at [88]:

"...s 7(1)(a) of the Consumer Guarantees Act [the equivalent of s.54 of the ACL] requires that quality be assessed by reference not only to defects and price but also fitness for purpose. Fitness for purpose is assessed by reference to all purposes for which the goods are commonly supplied, so it does not suffice if the goods are suitable for any one or more of their common purposes (compare Hardwick Game Farm v Suffolk Agricultural Producers Association [1969] 2 AC 31). But it is not an absolute requirement, in that the Act does not positively require that the goods be fit for all common purposes."

41   At [94] the court said:

"The hypothetical reasonable consumer is taken to be fully acquainted with the "state and condition" of the goods, including any hidden defects. Less obviously, he or she must also be taken to know the nature of the goods, all relevant circumstances of supply and any representations made about the goods by the manufacturer or supplier, so far as relevant. That is so because it is the hypothetical consumer who determines by reference to those considerations whether the goods are acceptable. The test is objective, but it is applied to the particular goods and circumstances.

Acceptable quality is a composite and context-specific attribute. I adopt the observations of Ormrod LJ, speaking of merchantable quality, in Cehave NV v Bremer Handelsgesellschaft mbH at page 80:

'It is a composite quality comprising elements of description, purpose, condition and price. The relative significance of each of these elements will vary from case to case according to the nature of the goods in question and the characteristics of the market which exists for them. This may explain why the formulations of the test of merchantable quality vary so much from case to case.'"

42   Applying that to the present situation, it is apparent that such authority as there is on the NZ equivalent provision of s.54(3) makes it clear that all of the matters in that sub-section are to be considered when determining whether or not the goods were of acceptable quality. The use of the conjunctive "and" within the section supports this interpretation.

37. Equally applicable to the present matter is the following passage from Member French’s decision in Avci v Inchurch Automotive Pty Ltd t/a Parramatta Motor Group [2019] NSWCATCD 39 at 44:

“The temporal focus of section 54 is the time the goods are supplied, informed by what is known of their subsequent condition and by what it was reasonable to expect from the type of goods in issue: see generally, Medtel Pty Ltd v Courtney [2003] FCAFC 51 per Moore J at [40], Branson J at [70], and Jacobson J agreeing with Branson J at [81]. In this respect, it falls to the applicant to prove on the balance of probabilities that the motor vehicle was not of acceptable quality at the time of supply having regard to what it was reasonable to expect in terms of its future function at that time. To the extent that the applicant contends that this was because the motor vehicle was not free from defects (subsection 54(2)(c)) she must establish that there was an actual or latent defect in the motor vehicle at the time of supply which rendered it of unacceptable quality: Alliance Motor Auctions Pty Ltd v Saman [2018] NSWCATAP 137 at [14] to [23]. However, it is not necessary for the applicant to prove the precise nature of the defect: Matumaini v Automobile Industries Pty Ltd [2017] NSWCATAP 93 at [73]; Alliance Motor Auctions Pty Ltd v Saman [2018] NSWCATAP 137 at [23]; Munday v Empire Auto Group Pty Ltd [2019] NSWCATAP 52 at [9]”.

38. In the present matter the Tribunal is satisfied of a breach of sections 54(2)(a) to 54(2)(e) of the ACL. The evidence of the applicants was that they had purchased the trailer new for $190,900, plus GST. The issues experienced by the applicants with the trailer were evident from the date of supply of the trailer. Namely, that there was no VIN plate or stamped VIN number on the chassis, no 240v compliance certificate and no engineering compliance certificate provided. Upon inspection other issues were identified with the slide out, ceilings, main bed area, main living area, bathroom / toilet area and the main entry and external door steps, horse area, external and underneath the float.

39. The Little report sets out in detail these various defects observed by the report writer these include (but are not limited to) the following:

1. Problems with the TIG welding – including that the welds had developed oxidation.

2. Excess sealant applied to join the roof and outer side cladding and holes drilled into the roof.

3. Electrical wiring harness, LPG and air brake pipes not supported in several areas beneath the undercarriage. Risk of possible electrocution or LPG escaping beneath the trailer.

4. Air brake supply pipes and ABS wiring harness at risk of damage or failure due to the lack of support brackets.

5. The trailer braking system was unserviceable. The trailer was not capable of braking and would rely on the prime mover’s braking ability.

6. Air brake slack adjusters and “S” cam connection shaft were not greased. Air brake slack adjuster fitted at incorrect angle. This could impact the effectiveness of the entire air brake system.

7. The angle of the shock absorbers are fitted to the rear suspension would not dampen any road shock or vibration.

8. Evidence of under engineering with the support mounts that secure the rear suspension assemble to the floor (below industry standard).

9. Rear suspension assemble is dangerous and would result in failure and possible dislodge from the undercarriage of the trailer.

10. Below standard workmanship in the living areas of the trailer in respect to the quality of the carpentry.

11. Evidence of below standard workmanship within the shower and bathroom.

12. Slide out jamming in the opening operation and unserviceable.

13. No identification plate and unregistered.

14. Does not meet the NSW Registration and safety requirements.

40. Any reasonable consumer would expect some teething problems with a new trailer however, they would not expect the number and extent of the problems that have been experienced by the applicants in relation to the trailer. It does not appear that the trailer is fit for purpose, acceptable in appearance and finish, free from defects, safe nor durable based on the evidence.

41. The Tribunal prefers the expert evidence of the applicants. The applicants have provided the Little report that complies with NCAT procedural direction 3 with respect to expert evidence. The respondent did rely on reports about the condition of the trailer and to support their contention that the issues with the trailer were “minor warranty cosmetic issues”. However, these reports did not comply with NCAT procedural direction 3 and were in the nature of a statement or letter.

42. Having made a finding that the vehicle has failed to comply with the guarantee as to acceptable quality at the time of supply the Tribunal then needs to consider whether the failure to comply was a “major failure”.

MAJOR FAILURE?

43. Having regard to the evidence before it the Tribunal is satisfied that the failure to comply with the guarantee as to acceptable quality is a major failure.

44. Having regard to the principles in Safi it appears that there have been a number of defects in the trailer starting from the day it was picked up. Any reasonable consumer if given the option of buying this trailer, or alternatively purchasing either nothing or a different model, would not have acquired the trailer. This is due to the nature and extent of the issues experienced by the applicants. Any reasonable consumer would also not expect the number of issues noted by the applicant when paying $190,900 plus GST for a new custom made trailer. As noted above in Safi one defect or a series of specific or individual defects which, when taken as a whole may constitute a major failure.

45. As noted in the matter of Matumaini v Automobile Industries Pty Ltd [2017] NSWCATAP 93 at [73]:

“The question which the Tribunal had to consider and answer was whether, at the time of the sale, the vehicle was of acceptable quality as that phrase is defined in s 54 (2) of the ACL NSW. In other words it was not necessary for the Appellant to prove that at the time of the sale, there was a particular identified defect which caused the vehicle not to be of an acceptable standard”.

46. In the present matter it appears that there was no compliance plate on the vehicle and the trailer is unregistered and currently remains incapable of being registered. The applicant’s evidence was that the trailer has not been moved since it was parked on arrival at their residence.

47. Additionally, the respondents have been given a number of opportunities to make good the defects with the trailer. Despite this, issues have remained unresolved. It therefore appears that the problems cannot be easily and quickly remedied.

REJECTION OF THE TRAILER

48. The applicants rejected the trailer on or about 13 July 2022 and sought a refund by way of a letter from their solicitor Bowral Legal.

49. In the matter of Barbour v Autosports Five Dock Pty Ltd [2020] NSWCATAP 141 the appeal panel set out at 83 the test for determining whether the rejection period has ended:

“From these cases it can be seen the following matters are relevant considerations in determining the rejection period for a major failure and when it has ended:

1. The rejection period commences at the time of supply;

2. The rejection period ends when it would be reasonable for the defect to become reasonably apparent;

3. The period of time must be reasonable having regard to the defect or defects. The test is objective but the actual experience of the consumer is relevant;

4. In determining the time in which a failure to comply becomes reasonably apparent regard must be had to the factors in s 262(2)(a)-(d) of the ACL;

5. Matters affecting the length of the period and when a major failure may become reasonably apparent include:

a) Whether the good are old or new. In the case of new goods it will usually be longer period;

b) Whether the goods are regularly inspected, whether an inspection process is customary and, if so, whether such inspections would be expected to reveal the failure;

c) Whether a reasonable consumer fully acquainted with the state and condition of the goods, would know the cause of the defect, what needed to be done to fix it and the cost of doing so;

d) Whether the supplier or repairer had identified a fault and carried out a repair which the consumer understood would rectify the fault;

e) Whether any subsequent testing or period of use was necessary and/or elapsed following any repair to see if it was successful;

f) Whether a failure, or a series of failures in combination with each other, might render the goods unfit or otherwise lead a reasonable consumer to conclude they would not have acquired the goods;

g) Whether a reasonable time has elapsed following the consumer becoming fully acquainted with the failure to make a decision about whether to reject the goods”.

50. Applying the above principles in the current matter, the rejection prior had not ended because the applicant had rejected the trailer just over a month after taking delivery of it. At that point in time the trailer had and still remains unused by the applicants. The applicants are entitled to expert several years of trouble-free operation of the trailer, given that it was purchased new for a price of over $190,900 plus GST and had been subjected to very limited use.

APPROPRIATE REMEDY

51. The respondent submitted that the appropriate remedy should be that they repair the trailer. This submission is misconceived. As noted in Avci at [78]

“The terms of section 259(3)(a) and 263 of the ACL are very clear. If there has been a major failure to comply with the guarantee of acceptable quality, the consumer may, at the consumer’s election, reject the goods. If a consumer elects to reject the goods, they must be returned to the supplier (subject to exceptions which do not apply in this case), the supplier must accept the return of the goods, and (in the circumstances of this case) the supplier must refund to the consumer the purchase price they paid for the goods. The right of a supplier to repair goods, as an alternative to accepting their return and refunding the purchase price only arises under sections 259(2) and 261 of the ACL where the failure to comply with the guarantee as to acceptable quality is not a major failure”.

52. In the present matter the applicants have established on the evidence that the respondent has failed to comply with the guarantee as to acceptable quality when the trailer was supplied. Further, that this failure was a major failure. They have also established on the evidence that they notified the respondent that they rejected the trailer, and that they did this within the rejection period.

53. The Tribunal considers that by virtue of s 263 of the ACL therefore that the applicants are entitled to return the trailer to the respondent and the respondent must accept its return. The respondent must also refund to the applicants the amount that was paid for the trailer of $190,900 plus GST being $209,000.

54. The Tribunal is satisfied that these orders are fair and equitable to all parties to the claim pursuant to s 79U(1) of the FTA.

CONCLUSION

55. For the reasons outlined above the Tribunal makes the following orders:

1. Aluma Trailers Pty Ltd must immediately accept Craig and Sally Cummings return of the 2021 Aluma Custom 4HAL Gooseneck trailer, 8’ wide, 7’6” internal height, overall length 35ft with Living Quarters with Full Size Slide Out and External Storage.

2. Aluma Trailers Pty Ltd must pay Craig and Sally Cummings the sum of $209,000 on or before 30 September 2023.

3. Upon Aluma Trailers Pty Ltd performance of Order 2 above Craig and Sally Cummings must do all things necessary to transfer unencumbered title of the 2021 Aluma Custom 4HAL Gooseneck trailer, 8’ wide, 7’6” internal height, overall length 35ft with Living Quarters with Full Size Slide Out and External Storage to Aluma Trailers Pty Ltd within 7 days.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 22 September 2023