Jensen v RZK Property Pty Ltd
[2024] QCAT 213
•22 May 2024
QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL
CITATION:
Jensen v RZK Property Pty Ltd [2024] QCAT 213
PARTIES: TIMOTHY JENSEN (applicant)
V
RZK PROPERTY PTY LTD (respondent)
APPLICATION NO/S:
MVL117-22
MATTER TYPE:
Motor vehicle matters
DELIVERED ON:
22 May 2024
HEARING DATE:
17 May 2024
HEARD AT:
Brisbane
DECISION OF:
Member Cranwell
ORDERS:
RZK Property Pty Ltd is required to pay Timothy Jensen the amount of $21,621.33 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 to comply with consumer guarantee a major failure – whether consumer entitled to damages
Australian Consumer Law, s 54, s 259, s 260
Competition and Consumer Act 2010 (Cth), Schedule 2
Fair Trading Act 1989 (Qld), s 50A, s 50C
Medtel Pty Ltd v Courtney (2003) 130 FCR 182
APPEARANCES & REPRESENTATION:
Applicant:
Self-represented
Respondent:
Self-represented
REASONS FOR DECISION
On 15 June 2022, Timothy Jensen (‘the applicant’) filed an Application – Motor Vehicle Dispute with the Tribunal. The respondent is RZK Property Pty Ltd (‘the respondent’).
The applicant is the owner of a 2013 Ford Ranger (‘the motor vehicle’).
The applicant purchased the motor vehicle from the respondent on 4 December 2021 for $17,260. At the time of purchase, the motor vehicle had an odometer reading of 203,538 kms.
The applicant seeks 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.
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 applicant gave the following relevant evidence:
(a)On 20 November 2021, the applicant attended the respondent’s premises and test drove the motor vehicle. He was told by Zoran Kaplun, a director of the respondent, that it was “in immaculate condition”.
(b)The applicant explained that he would be using the motor vehicle for work as a carpenter. Mr Kaplun said:
It comes with a warranty because I am a dealer. The vehicle travels extremely well on the highway and over long distances; it has 6 gears and it should be more fuel efficient than your Toyota Hilux.
(c)On 1 December 2021, the applicant arranged for the motor vehicle to be inspected by the RACQ. The RACQ identified a defect which “in our opinion, should be rectified prior to the vehicles continued use or purchase”. The defect was listed as “Oil level, Condition, Seals”. The reported noted that oil was “Leaking onto exhaust, Advise clean, locate and rectify source”.
(d)On 4 December 2021, the applicant advised Mr Kaplun of the RACQ report. Mr Kaplun responded: “Don’t worry about it, it’s just old oil.”
(e)The applicant proceeded to enter into a contract to purchase the motor vehicle. The applicant was provided with a Form 12: “Cooling-off period and statutory warranty”. The form noted that the motor vehicle did not come with a statutory warranty as it was a commercial vehicle.
(f)The applicant experienced oil leaks and attended at Jax Tyres & Auto on several occasions.
(g)On 21 December 2021, the applicant called Mr Kaplun to inquire whether the motor vehicle could be repaired under warranty. Mr Kaplun replied that “the vehicle can be repaired under warranty at the Sunshine Coast and you can claim the costs afterwards”.
(h)Mr Kaplun subsequently sent the applicant a text message which stated:
Hi Tim, just had a word with one of my mechanics, he said that you could possibly use a thicker oil because it’s an older engine, you should probably go to a 15/30 oil and that would certainly reduce the accumulation.
(i)On 4 January 2022, the applicant took the motor vehicle to East Coast Diesels, who installed a new gasket on the tappet cover.
(j)On 6 January 2022, the applicant noticed that the oil leak was still present.
(k)On 21 and 28 January 2022, the applicant took the motor vehicle to Carite Auto Repairs. The applicant was advised that the oil leak would get worse over time and would be quite expensive to repair.
(l)On 29 April and 6 May 2022, the applicant took the motor vehicle back to Carite Auto Repairs. The applicant was advised against any further attempts to rectify the oil leaks until the engine was either overhauled or replaced.
(m)On 6 May 2022, the applicant had discussion with Mr Kaplun about the state of the engine. Mr Kaplun suggested an EGR (exhaust, gas, recirculation) block, which Carite Auto Repairs subsequently advised was not the problem.
(n)On 7 May 2022, the applicant sent an email to Mr Kaplun in the following terms:
As it is no longer safe to drive the vehicle, I suggest that it is sensible that I return the vehicle to Carite Auto Repairs for repair as they are familiar with it. All costs to be borne by you …
Would you please confirm these arrangements by 2pm this coming Monday the 9/5/22, failing which I will proceed to have the vehicle repaired, without further notice and pursue my rights of recovery. I need the vehicle for work on an urgent basis.
(o)On 9 May 2022 at 1:26 pm, Mr Kaplun responded requesting a current photograph of the odometer reading. The applicant responded at 2:50pm with a photograph showing the odometer reading at 216,245 kms.
(p)On 10 May 2022 at 10:02 am, the applicant sent an email to Mr Kaplun in the following terms:
As I haven’t heard from you, (sic)
And I need the ranger on an urgent basis for work. I’ll proceed to get it repaired, including a replacement engine, and then go forward with claiming the costs from you through QCAT.
(q)On 11 May 2022, the applicant sent a further email to Mr Kaplun, advising that the repairs were due to start on 17 May 2022 and the estimated cost was $12,391.85.
(r)On 11 May 2022, Mr Kaplun sent an email to the applicant in the following terms:
We are in receipt of your last two emails dated 10 May 2022 at 10:01 am and 11 May 9:43 am.
…
Please refer to your Contract of Sale and Motor dealers and chattel auctioneers Form 12 both signed and dated by yourself on the 4th December 2021 at 2:10 pm, the vehicle you have purchased is a Commercial Vehicle and Does not have a Statutory Warranty.
…
Our records show that you have not purchased our highly recommended AWN (Australian Warranty Network) extended warranty.
Furthermore according to the odometer reading record you provided, it is noted that since date of purchase to date (5 Months) your vehicle has travelled approximately 13,000 kms.
…
In conclusion we reserve all our rights Under ‘The QLD Dealer Act’ and your claim has not been accepted.
[emphasis in original]
The applicant’s evidence as to the sequence of events was not in substance disputed by the respondent. In its response, the respondent’s principal claim was that it was not provided with a reasonable opportunity to meet its obligations under the Australian Consumer Law. This claim is not supported by Mr Kaplun’s email of 11 May 2022, in which the respondent plainly refused to undertake any repairs. For completeness, I note that this refusal occurred before repairs by Carite Auto Repairs were scheduled to commence on 17 May 2022.
The applicant provided invoices from Carite Auto Repairs dated 29 April 2022 and 2 June 2022 in the amounts of $2,137.55 and $19,372.78 (respectively). The April invoice included a service cost of $247, which the applicant is not claiming.
The June invoice from Carite Auto Repairs contains the following report:
In my belief the cost of stripping and repairing engine would have cost more than an (sic) complete engine exchange.
The fuel pump was faulty which caused pieces of metal to pass through the fuel lines, which caused the fuel injectors to crack a piston, which led to a pressure drop in one of the cylinders. The low compression was causing excess exhaust gas (blow-by) to get past the piston rings and pressurize the crankcase, which led to oil being forced out of the next weakest link. This cannot be stopped unless the engine and associated parts are replaced because even if all the engine seals/gaskets/links were re-sealed, the engines blow-by would still cause oil leaks to occur from the next weakest link. The cheapest option was to carry out the work that I have done and the defect could only be ascertained after spending several hours pulling the engine apart.
First inspect the vehicle on 21/01/22, upon this inspection there was an oil leak present and I advised the customer to wash down the engine bay and bring it back in 1 week so I could locate the source of the oil leak.
Due to the complexity of the situation in regards to the crankcase consistently having an oil leak due to the defective parts, It was not until now we have properly rectified the defect described.
It is my clear opinion that the defect we have now rectified was present on 04/12/21 because all the problems I saw on the 21/01/22 indicated to me that the vehicle would have been in a poor condition for quite some time and well before 4/12/21, and secondly my opinion is confirmed by the customer advising me that the engine was leaking oil on the 04/12/21. This oil leak is a clear symptom of a faulty engine and associated parts.
No expert evidence was provided by the respondent, and I therefore accept the Carite Auto Repairs report. In particular, I accept that the defect outlined was present as at the date of supply on 4 December 2021.
I have taken into account that the motor vehicle was 8 years old and had travelled 203,538 kms at the time of purchase. I have also taken into account that the purchase price was $17,760. Nevertheless, I do not consider that a reasonable consumer would expect to purchase a vehicle which required an engine replacement as at the time of purchase.
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 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.
The test of whether there is a major failure for the purposes of s 260 and the test for whether goods are of acceptable quality for the purposes of s 54 both adopt a ‘reasonable consumer’ benchmark. For the reasons already given, I find that the engine defect requiring replacement outlined in the Carite Auto Report above is such that a reasonable consumer fully acquainted with the nature and extent of the failure, would not have acquired the motor vehicle. In particular, I note that the cost of repairs exceeded the purchase price of the motor vehicle.
In the case of a major failure, the remedies available to the applicant are set out in
s 259(3) of the Australian Consumer Law as follows:
If the failure to comply with the guarantee cannot be remedied or is a major failure, the consumer may:
(a) subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection; or
(b) by action against the supplier, recover compensation for any reduction in the value of the goods below the price paid or payable by the consumer for the goods.
The applicant has at no stage rejected the motor vehicle.
The applicant has not provided any evidence in relation to the current value of his motor vehicle, such that I am unable to award compensation for reduction in the value of the goods below the price paid by the applicant.
There are therefore no remedies available to the applicant under s 259(3).
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.
I consider that it is open to the applicant to seek to have the motor vehicle fixed, rather than being limited to rejecting the goods under s 259(3).
In the present case, the applicant has claimed damages for repair expenses totalling $21,263.33 by Carite Auto Repairs. As noted above, I have found that the respondent refused to undertake any repairs of the motor vehicle. In those circumstances, I consider it reasonably foreseeable that the applicant would seek to have the vehicle repaired elsewhere. Indeed, the applicant placed the respondent on notice that he intended to do this.
In the absence of any evidence from the respondent relating to the quantum of damages, I am satisfied that the applicant is entitled to the damages as claimed.
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 applicant has been successful in the proceedings. In these circumstances, I consider that it is in the interests of justice to order the respondent to pay the filing fee of $358.
Orders
The respondent is ordered to pay to the applicant the amount of $21,621.33.
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