Paul v Eugarde - [2022] QCAT 331

QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL

CITATION:

Paul v Eugarde [2022] QCAT 331

PARTIES:

mitchell paul

(applicant)

v

jack eugarde

(respondent)

APPLICATION NO/S:

MVL215-21

MATTER TYPE:

Motor vehicle matter

DELIVERED ON:

15 September 2022

HEARING DATE:

11 August 2022

HEARD AT:

Brisbane

DECISION OF:

Member Howe

ORDERS:

Jack Eugarde pay Mitchell Paul the sum of $2,900 within 10 days of receipt of 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 – where a motor vehicle broke down within a short time and distance travelled after purchase – where the vehicle was sold without warranty – where the absence of a state statutory warranty does not affect the existence of the guarantee as to acceptable quality imposed by the ACL – where there was a failure to comply with that guarantee – where the failure was a major failure – where the consumer is entitled to recover compensation

Competition and Consumer Act 2010 (Cth), Schedule 2,
s 54

Williams v Toyota Motor Corporation Australia Limited [2022] FCA 344

APPEARANCES & REPRESENTATION:

Applicant:

Self-represented

Respondent:

Self-represented

REASONS FOR DECISION

Mr Paul purchased a 2010 Ford Fiesta sedan from Mr Eugarde, a motor dealer, on 16 December 2020. The vehicle had travelled 208,267 km at the time of sale. There was no warranty given. Mr Paul was advised that the car was a write-off but repaired. Mr Paul paid $3,500 for the vehicle.
The vehicle had been advertised as a vehicle that had been involved in an accident but repaired. It was described in the advertisement as mechanically and cosmetically A1. It was further described as a great daily runaround car, perfect for somebody learning to drive manually and “super easy to drive, great paint and more!” and with a roadworthy certificate.
Ten days after purchase the car broke down whilst Mr Paul’s wife was driving. It had overheated. She couldn’t start it initially but after half an hour or so it did and she slowly drove home, which was only a short distance away. At that stage the Pauls had driven the car only 447 km since purchase.
Mrs Paul called a mechanic from Lube Mobile who examined the vehicle and identified the problem as a likely blown head gasket.
Mr Paul contacted Mr Euguarde who said he had no responsibility to repair the vehicle or otherwise assist because the vehicle had been sold without warranty.
The mechanic said this in his report of 29 December 2020:
Called to site for light – after car broke down. Scanned Ecu no codes found. Radiator tank was empty field and pressure tested failed with no water leak. Started car to find engine miss for the first 20 sec Tk tested found CO2 in the cooling system suspected blown head gasket on head.
At hearing Mr Eugarde said his dealership relied on a roadworthy certificate supplied to them by a mechanic. They thought, based on the certificate, that the vehicle was in good repair. He said, in any case, it was made clear at sale to Mr Paul that it was sold in “as is” condition.
Mr Eugarde said the roadworthy certificate was evidence that there was no problem with the head gasket as at time of sale, but if there was a problem, he should not be held responsible, rather the mechanic who supplied the roadworthy certificate should bear the responsibility.
Neither the mechanic who issued the roadworthy certificate to Mr Eugarde nor the Lube Mobile mechanic who gave the report to Mrs Paul were called to give evidence.
The Tribunal has jurisdiction to determine disputes concerning motor vehicles under certain provisions of Schedule 2 of the Competition and Consumer Act 2010 (Cth) (‘ACL’).[1]
[1]By application of s 50A of the Fair Trading Act 1989 (Qld).
The ACL creates a number of obligatory guarantees with respect to goods, including motor vehicles, sold by a person in trade or commerce to a consumer. Mr Eugarde is such a seller, and Mr Paul a consumer, as concerns the sale of the subject Ford Fiesta motor vehicle.
One such guarantee incorporated into the sale is pursuant to s 54 of the ACL which provides:
54 Guarantee as to acceptable quality
(1)If:
(a)   a person 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 of acceptable quality.

(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;
(e)   any other relevant circumstances relating to the supply of the goods.
The guarantee of acceptable quality applies regardless that the Ford Fiesta motor vehicle was sold without any State warranty as to condition which would usually apply.
The guarantee also applies regardless that Mr Eugarde relied upon the accuracy of the roadworthy certificate he was provided by a mechanic when he sold the vehicle to Mr Paul.
Mr Eugarde says he did not realise there was any problem with the vehicle when he sold it, indeed he questioned whether there was a problem with the vehicle when he sold it.
I accept that the engine failed when Mrs Paul broke down because of overheating. Mr Paul gave evidence at hearing that the mechanic from Lube Mobile quoted the cost of repair as significant. Mr Paul said after the mechanic left he tried to start the vehicle but it would not start again. In result they sold the vehicle as scrap for $600.
I determine that is more likely than not that the vehicle had a blown head gasket as at date of sale, caused by travel over 208,267 km, rather than the problem arising during the short time and distance it was driven by the Pauls after purchase.
The mechanic from Lube Mobile clearly explained the tests he performed on the vehicle in his report. There was no evident water leak external to the cooling system, but water did leak, indicating that the leak was internal to the motor. There is no evidence suggesting Mr or Mrs Paul might be responsible for any overheating problem.
Regardless that there was a roadworthy certificate as at date of sale, I find as follows:
(a)the vehicle was not free from defects or durable as at date of sale within the meaning and intention of the guarantee as to acceptable quality;
(b)there was a representation made by Mr Eugarde at and before time of sale that the vehicle was in good mechanical condition, which he described as “A1”;
(c)a reasonable consumer, fully acquainted with the condition of the vehicle, including the defect with respect to the blown head gasket, as at time of purchase would not have paid the sum of $3,500 for the vehicle (or any near lesser amount).
The goods must be of acceptable quality as at time of supply but from the perspective explained in Williams v Toyota Motor Corporation Australia Limited:
The applicable standard of “acceptable quality” is to be determined by reference to what the “reasonable consumer” would regard as acceptable, having regard to the matters in s 54(3). The relevant enquiry is necessarily objective: Medtel Pty Ltd v Courtney[2003] FCAFC 151; (2003) 130 FCR 182(at 199 [43] per Moore J, 205 [64] and 207 [72] per Branson J, with whom Jacobson J agreed at 209 [81]); Capic (at 265 [105]).[2]
…
In determining whether the “reasonable consumer” would regard the goods as acceptable at the time of supply, one must assume that the construct is “fully acquainted with the state and condition of the goods (including any hidden defects of the goods)”: s 54(2) of the ACL; see also Medtel (at 205–206 [65]–[70]).[3]
[2][165].
[3][166].
I find the vehicle was not of acceptable quality as at date of sale and the guarantee as to acceptable quality was breached.
The remedies available in consequence of that breach depend on whether or not the failure to comply with the guarantee could not be remedied or was a major failure, or whether it could be remedied and was not a major failure.
I find the failure to comply with the guarantee was a major failure and Mr Paul was entitled to reject the goods, which he attempted to do but which Mr Eugarde did not accept.
Mr Paul has brought the within claim to recover the cost of the motor vehicle. I find he is entitled to that as compensation, but less the amount he has received for the scrap value of the vehicle, which I accept was the value of the vehicle after it had broken down, that is, $600.
Mr Eugarde must pay Mr Paul the sum of $2,900.