Howarth v Biscamoss Pty Ltd
[2020] QCAT 446
•13 November 2020
QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL
CITATION:
Howarth & Anor v Biscamoss Pty Ltd [2020] QCAT 446
PARTIES: DAVID ANTHONY JOSEPH HOWARTH
SUZANNE EVELYNNE HOWARTH
(applicants)
v
BISCAMOSS PTY LTD (respondent)
APPLICATION NO/S:
MVL092-20
MATTER TYPE:
Motor vehicle matters
DELIVERED ON:
HEARING DATE:
13 November 2020
HEARD AT:
Brisbane
DECISION OF:
Member Cranwell
ORDERS: 1. David Anthony Joseph Howarth and Suzanne Evelynne Howarth are to advise Biscamoss Pty Ltd in writing within 28 days of the date of these orders whether they consent to the engine in the motor vehicle the subject of these proceedings being replaced.
2. In the event that David Anthony Joseph Howarth and Suzanne Evelynne Howarth advise that they consent to the replacement of the engine, Biscamoss Pty Ltd is to effect this repair within a further 28 days.
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 to comply with consumer guarantee a major failure – whether consumer entitled to refund or repair
Competition and Consumer Act 2010 (Cth), Schedule 2 – Australian Consumer Law s 18, s 54, s 236, s 259, s 260, s 262, s 263
Fair Trading Act 1989 (Qld), s 50A
Medtel Pty Ltd v Courtney (2003) 130 FCR 182
Musca v Astle Corp Pty Ltd (1988) 80 ALR 251
APPEARANCES & REPRESENTATION:
Applicant:
Self-represented
Respondent:
Self-represented
REASONS FOR DECISION
David Howarth filed an Application – Motor Vehicle Dispute with the Tribunal on 31 March 2020. Mr Howarth subsequently filed an Amended Application on 15 June 2020. Suzanne Howarth was added as an applicant on 30 October 2020, and Mr Howarth was granted leave to represent her. I will refer to Mr and Mrs Howarth as ‘the applicants’, and Mr Howarth as ‘the primary applicant’.
The named respondent was Bartons Motors Pty Ltd. Bartons Motors Pty Ltd was removed as a respondent and Biscamoss Pty Ltd was added as a respondent on 30 October 2020. I will refer to Biscamoss Pty Ltd as ‘the respondent’.
The applicants are the owners of a 2014 Holden Colorado, which I will refer to as ‘the motor vehicle’.
The applicants purchased the motor vehicle from the respondent on 16 January 2014 for $54,047.40.
The applicants seek relief under the Australian Consumer Law, which is Schedule 2 to the Competition and Consumer Act 2010 (Cth). 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.
The relief sought by the applicants is a refund plus damages.
Australian Consumer Law provisions
Misleading or deceptive conduct
Section 18(1) of the Australian Consumer Law provides that:
A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
Consumer guarantees
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.
Evidence
The applicants have provided voluminous material to the Tribunal. In their Amended Application, the applicants allege the motor vehicle has seven separate defects. For convenience, I will deal with each defect separately.
Excessive oil consumption
The primary applicant claims that he was advised prior to the purchase of the motor vehicle that ‘the Colorado RG vehicle is a brand new 2014 model and does not use oil, or very minimal if at all’. While I have some doubts about the self-serving nature of the primary applicant’s evidence in this regard, no evidence was provided by the respondent to contradict it. In these circumstances, I accept the applicants’ evidence that the representation was made.
The primary applicant gave written evidence that:
(a)On 16 September 2017, when the engine oil dipstick was checked, no oil was present on the dipstick. The engine was refilled with 2.35 litres of oil.
(b)On 18 August 2018, when the engine oil dipstick was checked, again no oil was present on the dipstick. The engine was refilled with 1.6 litres of oil. The applicants were advised to change the oil from 5W-30 to 5W-40.
(c)On 27 August 2018, the oil was changed to 5W-40.
(d)On 28 February 2019, Bartons Motors Pty Ltd advised that the motor vehicle had used 600 ml of oil in a distance of 4,697 km.
(e)On 11 April 2019, Bartons Motors Pty Ltd advised that the motor vehicle had used 4.08 litres of oil per 10,000 km travelled.
The respondent conceded that usage of 4.08 litres of oil per 10,000 km was above the acceptable limit of oil usage for the motor vehicle.
The applicants provided an affidavit from John Moore of Redland Bay Garage dated 20 July 2020. Mr Moore relevantly deposed:
(a)On 10 June 2019, Mr Moore discovered oil residue present in the intake hoses of the motor vehicle.
(b)On 6 January 2020, Mr Moore recorded oil usage of 2.286 litres per 10,000 km.
(c)Mr Moore regards an oil loss of 2.5 litres per 10,000 km, or 3.75 litres per 15,000 km, as a ‘major oil volume loss’, equating to 66% oil usage over a 15,000 km service period.
The primary applicant provided evidence of complaints from other Colorado owners relating to oil consumption. These complaints do not relate to the motor vehicle the subject of these proceedings, and are of limited assistance.
The primary applicant has also provided a copy of ‘Service Dealer Letter 84/15 – RG Colorado Engine’ dated 4 December 2015. The letter relevantly stated:
Investigation results
Investigations carried out have identified two potential contributors that may lead to a low oil level indication on the dipstick. Either of the conditions, or a combination of both, may lead to the belief that an engine is using excessive amounts of oil.
1. Perceived Oil Consumption
The current engine dipstick design does not provide best practice oil volume between the FULL and ADD indications. This design may result in the indicated oil level moving quickly towards the ADD mark, and in some instances not registering on the dipstick, even though the rate of oil consumption is typical of a diesel engine. This creates the perception of an oil consumption issue.
2. Actual Oil Consumption
Due to manufacturing variations, a small number of engines may have excessive cylinder bore roughness. This roughness allows excess oil to pass the piston rings and be consumed. To date these cases have been confined to model 2014 vehicles.
Typical Oil Consumption
It is important to understand that all modern common rail diesel engines, regardless of manufacturer, do consume some oil. Typical usage may vary depending on engine design specifics, as well as vehicle usage such as vehicle load, speed and distance travelled.
For the Colorado 2.8 Litre Diesel engine any consumption of up to 2 litres of oil per 10,000 km’s [sic] travelled is typical consumption for this engine and no cause for concern.
On 10 May 2019, Holden offered to replace the engine in the motor vehicle.
On 25 May 2019, Holden advised:
We would not expect the new engine to use any more than 2.5 litres of oil per 10,000 kms driven. The engine is one of GM Holden’s modern low friction engines which is designed to minimise fuel consumption and maximise power delivery whilst minimising environment impact with exhaust gas emissions, therefore it is desirable for the engine to use some engine oil as this also promotes best engine life. However, should Mr Howarth suspect the oil consumption is increasing in the new engine we would advise him to present his Vehicle to a Holden dealer to have an oil consumption test completed and reviewed by Holden.
Daniel Braggins-Davies gave written evidence on behalf of the respondent. Mr Davies provided an extract from information provided by Holden in document TL2617-1512:
Changes to the cylinder bore machining process were introduced at the engine manufacturing plant in 2015. These changes ensure that the bore roughness is maintained within the correct specification, which will result in engine oil consumption rates consistent with MY13 Colorado vehicles, which did not exhibit this concern.
At the hearing, I asked Mr Davies about Mr Moore’s evidence that a replacement engine would lose up to 66% of the between service cycles. Mr Davies stated that oil loss does not matter, as long as there is enough oil to satisfy the pick up. When I asked him whether 33% was enough to satisfy the pick up, he stated that it was.
The primary applicant asked Mr Davies why the engine has a capacity for 5.7 litres of oil, if it can operate without damage on only two litres of oil. Mr Davis stated that the 5.7 litre capacity allows for the loss of oil between service cycles. If the engine only had a capacity for two litres of oil, it would run out of oil between service cycles. It is a characteristic of the design of diesel engines that they will consume oil.
I accept that the motor vehicle consumes excessive oil, and that the cause of this was excessive cylinder bore roughness, having regard to service bulletins and letters issued by Holden. I accept that this defect was present at the time of supply.
Suspension failure
The applicants claim that the suspension on the motor vehicle failed. They provided a tax invoice from Pedders Suspension dated 29 August 2018 for replacement of the suspension.
The applicants also provided an email from Pedders Supension dated 4 March 2019. The email relevantly stated:
I can state here that I did inspect your vehicle and that I did find in my professional opinion that the suspension on your RG Colorado … was in a state that was no longer able to safely carry the maximum specified GVM load and that to make the vehicle capable of safely carrying and towing the loads you described, I recommended and installed a full GVM suspension upgrade.
I make these comments based on extensive experience with these vehicles and the fact that the standard suspension on your Colorado has worn and sagged noticeably, especially in the left hand rear. I have found this to be a common problem usually caused by time and distance, and overloading or uneven loading. The GVM upgrades are a common necessity on vehicles the age of yours, but it should not be interpreted that the original suspension in new condition is not fit for purpose.
I realise that this is not necessarily the backing you might desire but I can only comment on the facts we have.
Based on the applicants’ own evidence, I am not satisfied that the motor vehicle’s suspension was not of acceptable quality at the time of supply.
Defective paintwork
The applicants claim the paintwork on the motor vehicle was defective and it turned out that it had been poorly repaired from damage prior to sale.
The applicants provided a note from a paint repair quote dated 24 September 2018 which stated:
Note – Driver’s door has had a poor paint repair and paint is transparent. I have worked in dealerships as a paint repair specialist and have been required to do similar repairs at the pre delivery stage without new owner aware.
The respondent provided evidence that it has no record of a previous paint repair carried out to the motor vehicle.
While the note on the paint repair quote speculates that the paint may have been poorly repaired prior to delivery, there is no direct evidence before me that a paint repair actually took place prior to delivery. In these circumstances, I am not satisfied that the motor vehicle’s paintwork was not of acceptable quality at the time of supply.
Improperly labelled fuse board
The applicants claim the fuse board was improperly labelled.
The applicants provided no expert evidence to support their claim. The respondent provided evidence that:
On our records, it shows the error codes set in the system in relation to the fuse box have been set by an aftermarket fuse box to enable the running of an aftermarket fridge. Once the fridge terminal was removed and cleared, we saw no further issue in this matter. The issue may have reoccurred if Mr Howarth has opted to have the fridge fuse box refitted.
Based on the evidence before me, I am not satisfied that the motor vehicle’s fuse box was not of acceptable quality at the time of supply.
Electrical problems causing the motor vehicle to go into limp mode
The applicants claim that the vehicle has had a number of electrical problems, including going into limp mode.
The respondent provided evidence that:
The engine going into limp mode was a rectifiable concern, a software update carried out to the fuel pressure regulator valve on 17/09/18 at 37,454 kms has fixed the concern and to my knowledge this issue has not reoccurred since.
Based on the evidence before me, I am satisfied that the software for the fuel pressure regulator valve was defective at the time of supply.
Defective right hand front drive shaft seal
The applicants claim that the right hand front drive shaft seal was defective.
The respondent provided evidence that:
The oil leak from the RH axle seal and front driveshaft seals had eventuated from a manufacturing defect in the parts and has been replaced under warranty. No further leaks from these components have eventuated to my knowledge.
Based on the evidence before me, I am satisfied that the right hand front drive shaft seal was defective at the time of supply.
Fuel economy not in accordance with specifications.
The applicants claim that the motor vehicle averages 11 litres per 100 km, rather than the 8.1 litres per 100 km claimed by the manufacturer.
The applicants provided no expert evidence on the issue of fuel consumption. Other evidence provided incidentally indicates that the motor vehicle has had a number of aftermarket modifications, and has been used by the applicants to tow loads.
Based on the evidence before me, I am not satisfied that the motor vehicle’s fuel consumption was not of acceptable quality at the time of supply.
Summary
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 motor vehicle’s excessive oil consumption due to excessive cylinder bore roughness;
(b)the manufacturing defect relating to the right hand front drive shaft seal;
(c)the defect in the software relating to the fuel pressure regulator valve;
(d)the purchase price of $54,047.40; and
(e)the motor vehicle being brand new,
would not regard the motor vehicle as free from defects and 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 failure, I note that I have accepted that there were three defects in existence at the time of supply. These defects have manifested themselves over a five year period. Dealing with each defect in turn:
(a)The defect in the software relating to the fuel pressure regulator valve was remedied by a software upgrade. I consider this to be a minor repair.
(b)The manufacturing defect relating to the right hand front drive shaft seal has also been remedied. I consider this to also be a minor repair.
(c)The respondent proposes to remedy the motor vehicle’s excessive oil consumption by replacing the engine. The primary applicant, while disputing the effectiveness of this remedy, nevertheless described an engine replacement as a ‘quick and economic fix’ in his statement dated 19 July 2020.
I note that the offer to replace the engine was promptly made on 10 May 2019, less than a month after the oil consumption test on 11 April 2019 returned a result above the acceptable limit of oil usage. The only reason why the engine replacement has not taken place is because the applicants have refused this remedy.
The applicants maintain that an engine replacement would not fix the problem. However, the balance of evidence does not support their position. While I note that Mr Moore expresses concern in relation to an oil loss of 2.5 litres per 10,000 km, the evidence from Mr Davies on behalf of the respondent is that the engine can accommodate this oil loss without damage. The respondent also provided information from Holden that the changes in manufacturing processes will result in engine consumption rates consistent with 2013 Colorado vehicles which did not exhibit concerns relating to excessive oil consumption. I prefer the respondent’s evidence. It seems to me that Holden identified a manufacturing problem relating to some Colorado engines produced in 2014, and rectified the problem. The possibility that a replacement engine may consume excessive oil is at this point merely hypothetical in any event.
The motor vehicle has suffered three defects over a five year period, two of which were readily remedied. The outstanding defect, relating to excessive oil consumption, can be remedied by what the primary applicant has described as a ‘quick and economic fix’. I place considerable weight on this characterisation by the primary applicant of an engine replacement. On balance, I am not satisfied that there is a major failure for the purposes of the test contained in s 260.
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 engine in the event that the applicants choose to make the motor vehicle available for this purpose.
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 applicants claimed $3,790 in damages for the cost of replacing the motor vehicle’s suspension. Given that I have found the suspension was of acceptable quality at the time of supply, the applicants are not entitled to this amount.
The applicants claimed $1,200 for replacement tyres, and $2,074.43 for servicing. I am not satisfied that these items were caused by the respondent’s failure to comply with the guarantee of acceptable quality. These are routine expenses associated with operating a motor vehicle.
The applicants also claimed:
(a)$4,989.55 for a steel canopy;
(b)$3,000 for drawers;
(c)$502.50 for wiring expenses; and
(d)$360.50 for a towing braking system.
In circumstances where I have found the applicants are not entitled to reject the motor vehicle, and will continue to have the benefit of the motor vehicle upon it being repaired, they are not entitled to claim these expenses.
The applicants claimed exemplary damages. In the initial Application, this amount was $1,615,853.92. In the Amended Application, they reduced this amount such that they were seeking a total award of $100,000. Exemplary damages are not available under the Australian Consumer Law: Musca v Astle Corp Pty Ltd (1988) 80 ALR 251.
The applicants also claimed damages for other matters, variously described as stress, distress, inconvenience, impact on health, loss of enjoyment, and lost time and productivity. In the initial Application, this amount totalled $334,500. In the Amended Application, they reduced this amount such that they were seeking a total award of $100,000.
I note that the primary applicant had a heart attack on 23 September 2018 which he attributes to the stress relating to his motor vehicle dispute, but provided no medical evidence to support this attribution.
In my view, the respondent has acted reasonably in this matter. When oil consumption tests returned a result above the acceptable limit of oil usage, an offer was promptly made to replace the engine. The applicants disagreed with this remedy, which they were entitled to do, and after making a complaint to the Office of Fair Trading ultimately commenced proceedings in the Tribunal.
It is evident from the volume of material provided by the primary applicant that this matter has exercised his mind to a significant degree. However, it seems to me that there is nothing in the respondent’s conduct that would justify an award of damages of the nature claimed by the applicants.
Misleading or deceptive conduct
Section 236 of the Australian Consumer Law provides:
(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.
As noted above, at the time the applicant purchased the motor vehicle on 16 January 2014, the respondent had not been advised by Holden that there were problems with excessive oil consumption with Colorados manufactured in 2014. That advice was not provided until 4 December 2015, well after the purchase of the applicant’s motor vehicle and well after any pre-purchase representations were made.
The primary applicant has claimed that information regarding excessive oil consumption in the United States version of the Colorado was available online as early as 1 November 2013. However, there is no evidence before me that the respondent was aware of this information at the time of supply, or that the information necessarily related to the Australian version of the vehicle.
In these circumstances, I am not satisfied that the respondent has engaged in misleading or deceptive conduct for the purposes of s 18(1) of the Australian Consumer Law, and accordingly the applicant is not entitled to damages under s 236.
Costs
Section 50C of the Fair Trading Act 1989 (Qld) provides that the Tribunal may make a costs order against the respondent in the amount of the prescribed filing fee paid by the applicant. This power is subject to s 102(1) of the Queensland Civil and Administrative Tribunal Act 2009 (Qld), which provides that the Tribunal may make a costs order if the interests of justice require it.
The applicants have been awarded a remedy against the respondent in the proceedings. However, the remedy awarded is one previously offered by the respondent to the applicants. In these circumstances, I do not consider that it is in the interests of justice to order the respondent to pay the filing fee of $345.80.
Orders
The applicants are to advise the respondent in writing within 28 days whether they consent to the motor vehicle’s engine being replaced. If the applicants advise that they do consent, the respondent is to perform the engine replacement within a further 28 days.
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