McNally v Central Coast Automotive Pty Ltd t/as Gosford Nissan

Case •

[2025] NSWCATCD 111

•

12 August 2025

No judgment structure available for this case.

Civil and Administrative Tribunal


New South Wales

Medium Neutral Citation: McNally v Central Coast Automotive Pty Ltd t/as Gosford Nissan [2025] NSWCATCD 111
Hearing dates: 6 June 2025
Date of orders: 12 August 2025
Decision date: 12 August 2025
Jurisdiction:Consumer and Commercial Division
Before: K Merrick, Senior Member
Decision:

The Application is dismissed.

Catchwords:

CONSUMER LAW - defective motor vehicle, consumer guarantees – acceptable quality - major failure - rejection of goods

Legislation Cited:

Australian Consumer Law 2010 (NSW)

Competition and Consumer Act 2010 (Cth)

Fair Trading Act 1987 (NSW)

Cases Cited:

Crooks v Hyundai Motor Company Australia Pty Ltd [2023] NSWCATCD 29

Edwards v Caravan v RV Central Pty Ltd [2022] NSWCATD 26

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

Category:Principal judgment
Parties: Laura McNally (Applicant)
Central Coast Automotive Pty Ltd t/as Gosford Nissan (First Respondent)
Nissan Motor Co.(Australia) Pty Ltd t/as Nissan Australia (Second Respondent)
Representation: Applicant (Self represented)
A Harris (Customer Resolution Officer) (First Respondent)
S Thuraisingam (Consumer Affairs and Dispute Resolution Advocate) (Second Respondent)
File Number(s): 2024/00450758

REASONS FOR DECISION

Background

  1. In this matter the applicant Lauren McNally (Ms McNally) is seeking orders for a full refund in relation to the purchase of a new 2022 Pathfinder motor vehicle from the first respondent Central Coast Automotive (t/a Gosford Nissan) (Gosford Nissan). The second respondent Nissan Motor Co. (Australia) Pty Ltd t/a Nissan Australia (Nissan Australia) is the manufacturer of the vehicle.

  2. Ms McNally’s claim is that the vehicle suffers from faults that constitute a ‘major failure’ pursuant of ss 259 and 260 of the Australian Consumer Law 2010 (NSW) (ACL). An initial defect delayed delivery by 7 weeks, from October to December 2023. Ms McNally reported further defects within a month of delivery, and over the subsequent 11-month period there have been 7 attempts to repair those defects.

  3. Ms McNally seeks a refund of the purchase price of the vehicle ($70,000) together with related after-market expenses ($2869.61) as well as registration and CTP costs ($508.34). She also claims the costs of the NCAT application and ASIC searches ($342).

  4. Ms McNally relies primarily on the consumer guarantees set out in s54 (guarantee as to acceptable quality) and s 55 (guarantee as to fitness for any disclosed purpose) of the ACL. Her application also refers to the guarantees in s 56 (supply of goods by description), s57 (supply of goods by sample or demonstration model), s58 (repairs and spare parts), and s59 (express warranties), although these guarantees are either irrelevant in the present case or do not take her claim further than the s 54 and s 55 claims, and the parties’ evidence and submissions did not address these further guarantees. In addition, Ms McNally refers to s 151 (false or misleading representations about goods or services). Again, reliance on this section takes her claim no further than the claim in respect of the s 54 and s 55 guarantees, and the parties’ evidence and submissions did not address s 151.

  5. Ms McNally seeks remedies against Gosford Nissan (ACL ss 259 – 261) and Nissan Australia (ACL ss 271 – 273).

  6. The respondents oppose the application and the orders sought by the applicant. The respondents reject the characterisation of the faults that arose with the vehicle as a ‘major failure’ within the meaning of the ACL. The respondents say that each of the defects complained of that were warrantable items have been repaired, and that the remaining complaints concern characteristics that are part of normal operation and do not represent defects.

THE ACL CONSUMER GUARANTEES

  1. Section 54(1) ‘Guarantee as to acceptable quality’ provides that ‘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; (then) there is a guarantee that the goods are of acceptable quality’.

  2. Section 55(1) ‘Guarantee as to fitness for any disclosed purpose etc’ provides that ‘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; (then) 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.’

  3. Under s 259(1) of the ACL a consumer may take action against a supplier if a guarantee that applies to the supply of the goods in question (in this case the s.54 and s 55 guarantees) is not complied with.

  4. The applicable remedy available to the consumer under the ACL will depend on whether the failure to comply with the guarantees can be remedied and is not a major failure, or whether the failure to comply with the guarantees cannot be remedied or is a major failure.

  5. Under s 259(2) if the failure to comply with the guarantee can be remedied and is not a major failure the consumer may require the supplier to remedy the failure within a reasonable time. Section 261 sets out how a supplier may remedy a failure to comply with a guarantee. If the supplier refuses or fails to do so, the consumer may either otherwise have the failure remedied and recover all reasonable costs so incurred from the supplier, or (subject to s 262), notify the supplier that the consumer rejects the goods.

  6. Under s 259(3) if the failure to comply with the guarantee cannot be remedied or is a major failure, the consumer may (subject to s 262), notify the supplier that the consumer rejects the goods; or recover compensation from the supplier for any reduction in the value of the goods below the price paid or payable by the consumer for the goods. Section 260 sets out the test for when a failure to comply with a guarantee is a major failure. The test includes: “the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure” (subs 260(1)(a)).

  7. In addition to these remedies, under s 259(4) a 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.

  8. Sections 271 to 273 concern actions against manufacturers. Section 272 sets out the nature of the damages that an “affected person” is entitled to recover against manufacturers.

Conduct of the hearing

  1. The applicant Ms McNally was self-represented before the Tribunal.

  2. The first respondent Gosford Nissan was represented by Mr Harris, Customer Resolution Officer at Gosford Nissan.

  3. The second respondent Nissan Australia was represented by Ms Thuraisingam, Consumer Affairs and Dispute Resolution Advocate at Nissan.

  4. Ms McNally relied on the following materials:

  1. a bundle of documents comprising 55 pages received by the Tribunal on 4 February 2025 and marked as “exhibit A”. Exhibit A relevantly contained receipts in respect of the sums claimed, the purchase contract dated 11 October 2023, a Motor Vehicle Complaint Inspection Advice and Rectification Order from Fair Trading dated 22 August 2024, service invoices from Gosford Nissan, a letter of rejection from Ms McNally to Gosford Nissan dated 11 October 2024 and emails with Gosford Nissan following that letter.

  2. a USB drive containing 15 videos and 13 photos marked as “exhibit D”;

  3. clearer copies of pages 31 to 35 of exhibit A (being the Motor Vehicle Complaint Inspection Advice and Rectification Order from Fair Trading dated 22 August 2024), marked for identification as “MFI 1”.

  1. Gosford Nissan relied on the following materials:

  1. a bundle of documents comprising 21 pages received by the Tribunal on 11 February 2025 and marked as “exhibit B”. Exhibit B relevantly contained a submission from Mr Harris, emails in relation to an independent inspection of the car, and service invoices from Gosford Nissan.

  2. an inspection report prepared by Steven Koudsi of MTA Vehicle Inspections following an inspection conducted on 16 April 2025. This report was marked as “Exhibit E”.

  1. Nissan Australia relied on a bundle of documents comprising 29 pages received by the Tribunal on 5 March 2025 and marked as “Exhibit C”. That bundle relevantly contained a summary of the matter (in effect a submission), the contract of sale, and Nissan Australia’s internal technical reports in respect of each of the issues raised. The second respondent also adopted and relied on the inspection report obtained by the first respondent from Mr Koudsi.

  2. The parties were each given the opportunity to outline their positions and elaborate on the factual events referred to in the bundles of documents.

  3. Ms McNally and Mr Harris each gave brief oral evidence. Ms McNally was given the opportunity to question Mr Harris. Gosford Nissan and Nissan Australia were given the opportunity to question Ms McNally.

  4. The parties then made oral submissions to conclude the hearing.

  5. The Tribunal has read and considered the evidence and submissions of the parties.

Jurisdiction

  1. The Tribunal derives its jurisdiction to determine ACL consumer guarantee claims by virtue of the operation of s 28 and Pt 6A Div 2 of the Fair Trading Act 1987 (NSW) (FTA).

  2. The effect of s 28 of the FTA is that the provisions of the ACL, which is Schedule 2 to the Competition and Consumer Act, form part of the FTA.

  3. Part 6A Div 2 of the FTA confers jurisdiction on the Tribunal to deal with consumer claims. A ‘consumer claim’ means a claim for one or more of a number of remedies by a consumer that arises from the supply of goods or services by a supplier to the consumer (s 79E). Relevantly to the present claim, those remedies include (a) the payment of a specified sum of money, (b) the supply of specified services and (d) the delivery, return or replacement of specified goods or goods of a specified description.

  4. ‘Consumer’ is defined in s 79D to include a natural person, ‘supply’ is defined in s 79G to include supplying goods by way of sale, and ‘supplier’ means ‘a person who, in the course of carrying on (or purporting to carry on) a business, supplies goods or services’ (also defined in s 79D). Section 79E(2) confirms that a consumer claim includes a claim against a supplier who is not the direct supplier of the goods or services to the consumer (e.g a manufacturer or wholesaler) if the claim arises from or in connection with the supply of those goods or services by the direct supplier to the consumer.

  5. Section 79I of the FTA provides that any consumer may apply to the Tribunal for determination of a consumer claim, and s 79J of the FTA provides that the Tribunal may hear and determine consumer claims the subject of an application under s 79I.

  6. In the present case the Tribunal is satisfied that:

  1. Ms McNally is a ‘consumer’ within the meaning of s 79D of the FTA;

  2. Gosford Nissan is a supplier of goods on the basis that it supplied the goods (being the vehicle) the subject of the dispute in the course of carrying on a business: s 79D;

  3. Nissan Australia is not the direct supplier of the vehicle but is an indirect supplier of the vehicle and is potentially liable to the Applicant by virtue of s 79E(2);

  4. The application is a ‘consumer claim’ as defined in s 79E of the FTA in respect of the ‘supply’ of goods within the meaning of s 79G of the FTA.

  1. Section 79K of the FTA limits the jurisdiction of the Tribunal to claims with a relevant connection to New South Wales (including where the goods were supplied in New South Wales). In this case the vehicle was supplied in NSW.

  2. Section 79L of the FTA limits the time within which a claim can be made and s 79L(1)(a) requires that the cause of action first accrued not more than three years before the commencement of the proceedings. As the events which are the subject of these proceedings (that is the faults complained of) arose in the period after purchase of the vehicle in October 2023, the proceedings have been commenced within the applicable time limit.

  3. Subject to certain exceptions a monetary limit of $100,000 also applies to the Tribunal’s jurisdiction to make orders (s 79S). The monetary limit of $100,000 does not apply in relation to a consumer claim arising from the supply of a new motor vehicle that is used substantially for private purposes (s 79S(6)), as is the case here. In any event the claim is for less than $100,000.

  4. Accordingly, the Tribunal has jurisdiction to hear and determine these proceedings under the FTA, by reference to the relevant provisions of the ACL.

THE FACTS

  1. The Tribunal makes the following findings of fact:

  1. The Applicant Laura McNally purchased the vehicle, a 2022Nissan Pathfinder registration CAN54G from the First Respondent Gosford Nissan in late 2023. The deal date was October 2023 however delivery was delayed to 6 December 2023 due to a defect identified by Ms McNally at the time of original intended delivery.

  2. Ms McNally paid $70,000 for the vehicle. Related after-market expenses totalled $2869.61. She also paid registration and CTP costs of $508.34.

  3. The Second Respondent Nissan Australia is the Australian distributor of Nissan vehicles, and the ‘deemed manufacturer’ of the vehicle for the purposes of the ACL.

  4. Gosford Nissan is an authorised Nissan dealer.

  5. Ms McNally experienced the following issues with the vehicle, which she reported to Gosford Nissan and subsequently to NSW Fair Trading:

  1. Loose boot door case

  2. Loose boot wings

  3. Front passenger door drops when open

  4. Audio system intermittently hold on number six and unable to be changed from other the main console, the steering wheel or the Bluetooth device

  5. front air conditioning intermittently operating

  6. far rear seats not folding flush due to misaligned headrests

  7. gearbox shut up wind switching between park drive and reverse.

  1. On 22 August 2024 Fair Trading conducted an inspection of the vehicle (attended by Ms McNally and Mr Boyd from Gosford Nissan) and issued a rectification order. The rectification order stated that the identified defects were new vehicle warranty defects, to be rectified under the express warranty of the manufacturer / importer of the vehicle.

  2. The rectification order required Gosford Nissan to rectify the items listed under the heading ‘Warranty Repairs’. Those items were as follows:

“• Driveline concerns:

1)   inspect the intermittent clunk when shifting from drive to park and park to reverse

2)   inspect the intermittent operation of the engine over-revving when engine is cold and driving at approximately 50 kilometres per hour on slight downhill incline. This is evident when the driver has no input on the accelerator pedal

3)   inspect the vehicle intermittently rolling forward when the vehicle stationary in reverse. This is common when selection from drive to reverse gears on the selector and the brakes not applied

• Inspect the intermittent ticking noise auditable from the dash area when the air condition is operated 24.5°C

• inspect and rectify the cause of the passenger front door fails to close as demonstrated at the meeting

• inspect the rear tail gate inner trim fitment loosely fitted.”

  1. The rectification order stated that an “inspection report is to be provided on completion of the inspection to verify that the vehicle is operational as per the manufacturer’s intended design. Repair method should be carried out as instructed by the manufacturer or in line with the Australian standards. Repair any consequential damage caused by the above listed items.”

  2. It would appear that subsequent to the inspection by Fair Trading Ms McNally identified two further issues which she notified to Gosford Nissan namely:

  • burning electrical smell and smoke present on passenger side of bonnet

  • air conditioning air flow inoperative when starting vehicle

  1. A service tax invoice from Gosford Nissan addressed to Ms McNally and dated 26 September 2024 confirms that the following tasks were undertaken by Gosford Nissan and conclusions reached:

“Job #1 (inspect the intermittent operation of the engine over-revving when engine is cold and driving at approximately 50 kilometres per hour on slight downhill incline. This is evident when the driver has no input on the accelerator pedal) Carried out road test under described conditions and able to replicate concern. Recorded data from vehicle and found to be engine / transmission brake assist, transmission down shifting gear as required based on vehicle sensors. Normal operation of vehicle”

“Job #2 (Inspect the intermittent ticking noise auditable from the dash area when the air condition is operated 24.5°c) Tested vehicle on numerous occasions under described conditions and was unable to replicate concern. Removed air conditioning filter and found small amount of debris within filter, cleaned and reinstalled as required. With inspection camera inspected operation of air conditioning blower and found nothing obstructing fan at time of inspection. Suspect possible debris caught in air conditioning blower fan at time of noise first being detected”

“Job #3 (inspect the intermittent clunk when shifting from drive to park and park to reverse) Carried out inspections on vehicle with clunk concern. Checked the tension on wheels, cv nuts, front to rear tail shaft bolts, trans fluid level and diff levels. All within specifications. Carried out the same test on a couple of like for like vehicles and they do the same clunk. Believed to be normal operation of the vehicle drive train. Nissan Technical has advised this is deemed normal operation. The park pawl engagement if there is load applied to park pawl will cause a knock when disengaged and is considered normal. Referring to workshop manual ‘Occasionally, the parking gear may be locked with the torque insufficiently released when stopping the vehicle by shifting the selector lever from D or R to P position with the brake pedal depressed. In this case the shock with a thud caused by the abrupt release of torque may occur when shifting the selector lever from P position to other positions. However this symptom is not a malfunction which results in the damage of parts’.”

“Job #4 (inspect the vehicle intermittently rolling forward when the vehicle stationary in reverse. This is common when selection from drive to reverse gears on the selector and the brakes not applied) Checked and confirmed under customer described conditions. Carried out data recording from transmission control module and recorded video of issue occurring to supply to Nissan Technical. Nissan Technical has advised this is normal operation, the reason it happens is due to the load that is built up on the driveline when coming to a stop, there will always be some free play to allow slip and bind of the driveline. No further action required.”

“Job #5 (inspect and rectify the cause of the passenger front door fails to close as demonstrated at the meeting) Carried out adjustment of door latch and Stricker. Door is now closing in comparison with driver’s door under the weight of door”

“Job #6 (inspect the rear tail gate inner trim fitment loosely fitted) “Obtained photos and video of rear tailgate trim area of concern for loose fitment. Supplied to Nissan technical for review, comparing to like for like vehicle. Nissan Technical have advised this is how trim is designed and replacing trim will not rectify concern. No further action required”

“Job #7 (inspect burning electrical smell and smoke present on passenger side of bonnet) Tested vehicle numerous times during duration of visit and was unable to replicate smell of burning from vehicle. Carried out inspection found no evidence of burning, fluid leakage or anything similar that would cause concern. Unable to fault at this time”

“Job #8 (inspect ac air flow inoperative when start vehicle) Supplied Nissan with data recordings from HVAC unit. Nissan advised based on information supplied to replace a/c front blower fan. Removed and replaced a.c front blower fan as required. Tested operation and found all OK”.

  1. It is apparent from the service invoice that Gosford Nissan inspected each of the issues that had been raised, ascertained from Nissan Australia whether the issues required attention or were consistent with normal operation as per the manufacturer’s intended design, made repairs where the issues were confirmed as requiring attention, and otherwise ascertained the reasons for the issues and that they represented normal operation as per the manufacturer’s intended design. These steps were in accordance with the steps set out in the rectification order issued by NSW Fair Trading.

  2. Nissan Australia’s evidence included copies of their internal technical case records for September in respect of the issues listed above as job #3 (20 September 2024), job #4 (17 September 2024) and job #6 (17 September 2024). Those records confirm that Nissan Australia Technical team advised Gosford Nissan that those issues were part of normal operation.

  3. On 9 October 2024 Gosford Nissan followed up with Nissan Australia in respect of the issue of the doors rubbing on the seal. Nissan Australia confirmed that the seals are intended to be in direct contact with the doors and the cause of the damage would be debris caught between the seals and the doors.

  4. Ms McNally was not satisfied with this result. Ms McNally communicated her dissatisfaction to Gosford Nissan.

  5. On 11 October 2024 Ms McNally wrote to Nissan Gosford and Nissan Australia formerly rejecting the car and outlining her concerns and reasons for her decision. She referred specifically to the ACL guarantees and her views that the guarantees had been breached, and that the issues were safety concerns.

  6. Further correspondence ensued between the parties.

  7. On 15 October 2024 Nissan Gosford responded: ‘We regret to inform you that the dealership is unable to initiate a buyback for your vehicle independently. Any decision regarding a vehicle buyback must be authorised and facilitated by the manufacturer directly.’

  8. Ms McNally responded on 16 October 2024 pointing out, quite correctly, that her purchase contract was with Gosford Nissan and as such it is Gosford Nissan that is bound by the ACL guarantees.

  9. Nissan Gosford replied on 22 October: “Our team has conducted multiple assessments and during these tests we have been unable to identify faults that have been outside the manufacturer’s specifications related to the concerns you’ve raised. Additionally, a representative from Fair Trading inspected your vehicle and found no issues at the time of inspection. Furthermore, we consulted the technical assistance line from Nissan who evaluated your concerns and confirmed that they are consistent with normal operation. Please know that Gosford Nissan take the ACL laws seriously however based on our findings your vehicle and your request do not meet the requirements outlined under these laws.”

  10. In her response of 22 October 2024 Ms McNally took issue with Gosford Nissan’s assertion that no issues were detected at the time of Fair Trading inspection. She identified a number of issues that had been observed by Fair Trading at the time of the inspection of the vehicle, and restated her requirement for a full refund of the purchase price and reimbursement of associated expenses.

  11. In relation to Ms McNally’s point regarding the role of Fair Trading and the inspection undertaken by them The Tribunal notes that while Fair Trading suggest that a copy of the Complaint Inspection Advice be included with any subsequent application filed with the Tribunal, Fair Trading will not provide an independent report for a party. Further the Fair Trading Report required Gosford Nissan to inspect the issues of concern, and repair as instructed by the manufacturer. As noted above, Gosford Nissan did that. Gosford Nissan carried out a number of repairs and ascertained that the balance of the issues represented normal operation, or (as in the case of the rubber door seal and intermittent ticking nose in the a/c) were the result of consumer use, in this case foreign matter caught in the system.

  12. However Ms McNally clearly held ongoing concerns in terms of safety, which largely revolved around the roll forward issue, reverse and clunk noise. As noted, Nissan Australia had indicated to Gosford Nissan that these were part of normal operation.

  13. Nissan Gosford responded on 30 October “Thank you for your patience as we have reviewed your concerns. Our Nissan trained technical specialist, along with Nissan Australia, has assessed the issues you raised. They determined that your concerns are part of the normal operation of the vehicle, with some issues addressed as standard warranty repairs. Overall your vehicle is functioning as intended by the manufacturer and no major defects have been identified. Based on this assessment your request for a refund has been denied. However if you believe your concerns are worsening we would be happy to re inspect your vehicle with a Nissan technical specialist. Please feel free to book an appointment so we can reassess your vehicle.”

  14. Nissan Gosford also escalated the issues with Nissan Australia.

  15. On 7 November 2024 a member of the Nissan Technical Team attended at Nissan Gosford to reinspect the vehicle. Gosford Nissan provided a list of the issues that were to be reviewed.

  16. The Nissan Technical team expert provided a report following that inspection. The Report relevantly reads:

“Carried out on site inspection 7/11/24.

Addressed the following concerns raised by the customer.

# Gearbox clunk and jerky when changing up / down keys in D

Road tested thoroughly as per customer’s description of where and how they experience concern. No issue found. Monitored transmission data during Rd test and found no clear items in data showing any concern.

# When changing between D,P and R clunk noise/feeling evident

Tested and found clunk noise when load is put into current gear and changing to another gear reverse gear, allow vehicle to move in reverse, change gear to drive. Found to be normal characteristic of automatic transmission

# Excessive driveline slip when R selected (vehicle rolling forward after reverse selected)

Tested and found vehicle will creep forward if the transmission is changed to reverse whilst the vehicle is still moving or when internal transmission gear is not fully locked in. Found to be normal characteristic of automatic transmission

# Bluetooth infotainment system connectivity issues

Tested and found to be OK. Found no issues with connectivity in both Bluetooth and carplay/android auto

# Intermittent air conditioning Activation (both rear and front cabins). The air conditioning also changes direct and direction independently when temperature is adjusted. Air conditioning temperature dial inadequately responsive.

Tested Customers description of when/how the concern occurs. Unable to fault at time of testing. Unable to induce any faults in the system.

# Driver’s side rear door needs adjusting (not latching previously had issue with front passenger door)

Tested as per customer’s description. Found all doors operating correctly and without issue at time of inspection

# Internal door paint rubbing on front doors

Inspected and found evidence of rubber seal contact with paint. No further action as paint damage due to dirt / particles in between seal and painted surface

# Drivers side rear window labouring

Tested and found all windows operating OK with no issues

# Drivers window labouring

Tested and found all windows operating OK with no issues

# Drive / park sensors activating incorrectly including rear motion detection operating causing braking system to activate when reverse out of driveway.

Tested and found no issues Drivers reverse assist system. Dealer explained that customer had concerns of the system activating breaks even though nothing visually was seen dealer has already explained to the customer that the system may have detected an object of concern that would have activated the system. Determined no issues with operation of the system.

# Wireless charge pad not functioning intermittently

Tested Wireless charge function using an iPhone 13 and Samsung Z flip5. Found both phones charging with no issues. Did not test charging system long enough for phones to automatically turn off wireless charge.”

  1. The Applicant filed this Application with the Tribunal on 27 November 2024. It was received by the Tribunal on 3 December 2024.

  2. After the application was filed, and pursuant to orders for evidence made by the Tribunal, Ms McNally made the vehicle available to Gosford Nissan for inspection by an independent expert Mr Koudsi. Further reference is made to Mr Koudsi’s evidence below.

ISSUES FOR DETERMINATION

  1. In order to determine this matter, the Tribunal must answer the following:

  1. Whether there has been a breach of the ACL consumer guarantees as to acceptable quality and/or fitness for a disclosed purpose?

  2. If so, was there a major failure, or a failure that cannot be remedied?

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

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

ACL CONSUMER GUARANTEES AS TO ACCEPTABLE QUALITY AND/OR FITNESS FOR DISCLOSED PURPOSE

  1. In the circumstances of this matter, the consumer guarantee under s 55 of the ACL does not materially add to the consumer guarantee under s 54 of the ACL. Ms McNally did not disclose a purpose other than the usual purpose for which a vehicle would be purchased, which becomes relevant to a consideration as to whether there has been a breach of s 54. Accordingly, in this decision, the focus is on s54 of the ACL.

  2. The meaning of ‘acceptable quality’ is defined in s 54(2) of the ACL as follows: ‘Goods are of acceptable quality if they are as: (a) fit for all the purposes for which goods of that kind are commonly supplied; (b) acceptable in appearance and finish; (c) free from defects; (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 subs (3)’.

  3. The matters in subs 3 are: (a) the nature of the goods; (b) the price of the goods (if relevant); (c) any statements made about the goods on any packaging or label on the goods; (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.

  4. For goods to satisfy the s 54 guarantee it is necessary that the goods have all of the qualities identified in s 54(2) to the standard that would be acceptable to a reasonable consumer: Edwards v Caravan v RV Central Pty Ltd [2022] NSWCATD 26 at [18].

  5. 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 (s 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 (s 260(d)) or the goods are not of acceptable quality because they are unsafe (s 260(e)).

  6. 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.

  1. 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”.

BREACH OF ACL GUARANTEES

  1. Ms McNally contends that the Respondent(s) have breached their obligations due to multiple faults which she has experienced with the vehicle. She submits that certain of the issues impact the safety of the vehicle, specifically the roll forward issue and the rear motion detection, others are mechanical defects such as the clunk when changing gears, and others, such as the air conditioning and Bluetooth connectivity, impact the comfort of using the vehicle. She complained of the faults to the Respondents and subsequently raised a complaint with Fair Trading. She did not accept the response from Nissan Gosford following the Fair Trading report, in which Nissan Gosford in effect concluded that the issues raised by Ms McNally had either been addressed or were regarded as part of normal operation. She sought to reject the vehicle on the basis of major failure.

  2. Ms McNally relies on evidence of her own experiences with the vehicle, including video which she provided to the Tribunal, and the report from Fair Trading.

  3. The Tribunal accepts that over a period of months Ms McNally made regular complaints about the vehicle and the vehicle was taken to Gosford Nissan on several occasions.

  4. The Tribunal also accepts that repairs were required to the vehicle. For example, Gosford Nissan the 26 September 2024 report of work done confirms that the a/c blower fan was replaced.

  5. However, it is clear that following the inspection by Fair Trading the vehicle has been extensively tested by Gosford Nisssan, with additional testing by a representative from Nissan Australia. The evidence before the Tribunal shows that Gosford Nissan inspected each of the issues complained of, and either repaired them, or determined that they were consistent with normal operation. This evidence is supported by the report of the technical specialist from Nissan Australia who attended at Gosford in November 2024, after Ms McNally had indicated that she remained dissatisfied with the Gosford Nissan response, and inspected each of the issues complained of and determined that they were not manufacturing faults, but rather were consistent with normal operation.

  6. Of course the evidence of Gosford Nissan and Nissan Australia relies on the opinions of experts internal to the Respondents. As such, the Tribunal places less weight on those reports than on the independent expert report of Mr Koudsi.

  7. Mr Koudsi’s report was prepared following an inspection on 16 April 2025. Mr Koudsi’s inspection was not limited to the issues complained of. He conducted an inspection in the workshop as well as a road test. The only issues identified by Mr Koudsi’s report as requiring attention were the tyres showing greater shoulder wear. Mr Koudsi recommended that they will need replacing and the wheel alignment should be checked when fitting new tyres. These are not major defects. They are matters that can be attended to and repaired / replaced.

  8. Mr Koudsi tested each of the complaint items and confirmed no faults identified at the time of inspection. His report confirmed that overall the vehicle drives and performs well through rev and gear ranges, ABS and cruise control tested OK, rough idle could not fault. He identified that the jolt/knock sensation on gear selection was consistent with other models tested, and concluded that this was normal operation.

  9. Ms McNally has provided no expert evidence to indicate that the testing and repairs done to the vehicle have been inadequate; or to support her subjective assertions that the issues that she has observed are not part of normal operation.

  10. The absence of an independent expert does not mean, of itself, that a consumer cannot establish that goods are not of acceptable quality (or have a “major failure”) Crooks v Hyundai Motor Company Australia Pty Ltd [2023] NSWCATCD 29. However Ms McNally bears the onus of proving her case to the relevant standard.

  11. It is clear that Ms McNally is subjectively dissatisfied with the vehicle; has taken the vehicle to Gosford Nissan on a number of occasions; and maintains that her complaints are valid and the issues do not represent normal operation. It is also clear that Ms McNally wrote to the respondents on 11 October 2024 stating that she was, in effect, rejecting the vehicle and seeking a full refund.

  12. However, that subjective dissatisfaction and the number of times the applicant has taken the vehicle to Gosford Nissan complaining of faults is not sufficient, when considered in the context of all of the documentary evidence including the expert report of Mr Koudsi, to satisfy the Tribunal that the vehicle is not of acceptable quality under s 54 of the ACL. Where the reports of each of Gosford Nissan, the Nissan Australia Technical team, and Mr Koudsi confirm that the issues of concern to Ms McNally have either been repaired, are not manufacturing faults, or are part of normal operation, the Tribunal is not satisfied on the evidence that there has been a breach of the ACL consumer guarantees.

  1. Although there have been some faults with the vehicle, they are not of sufficient magnitude and duration that the Tribunal is satisfied that a reasonable consumer, fully acquainted with the state and condition of the vehicle, would regard it as acceptable having regard to the matters in s 54 (3) of the ACL.

  2. The Tribunal finds that applicant has failed to establish on the balance of probabilities the factual matters necessary for the Tribunal to be satisfied that the consumer guarantee under s 54 of the ACL has been breached.

  3. As the applicant has failed to establish breach of s 54 of the ACL, it follows that she is not entitled to the remedies set out in ss 259-263 of the ACL, or ss 271-273 of the ACL; or any alternative remedy under s 79N of the FTA

ORDERS

  1. The Application is dismissed.

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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 October 2025

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Crooks v Hyundai Motor Company Australia Pty Ltd [2023] NSWCATCD 29
Cary Boyd v Agrison Pty Ltd [2014] VMC 23