Reinhold v Ford Motor Company of Australia Limited
[2014] QCAT 671
•1 December 2014
| CITATION: | Reinhold v Ford Motor Company of Australia Limited & Anor [2014] QCAT 671 |
| PARTIES: | Lewis Reinhold (Applicant) |
| v | |
| Ford Motor Company of Australia Limited Sunshine Group Pty Ltd t/as Sunshine Ford (Respondents) |
| APPLICATION NUMBER: | MCDO676-14 |
| MATTER TYPE: | Other minor civil dispute matters |
| HEARING DATE: | 18 August 2014 and thereafter |
| HEARD AT: | Brisbane |
| DECISION OF: | Adjudicator Bertelsen |
| DELIVERED ON: | 1 December 2014 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. The application is dismissed. |
| CATCHWORDS: | New vehicle warranty – period of new vehicle warranty – extended warranty – intermittent fault – fault as applicable to warranty – and if covered by warranty – claim outside of warranty period – inapplicability of warranty Trade Practices Act 1974 (Cth) Alley v Quayside [2011] NSWCTTT 228 |
APPEARANCES:
| APPLICANT: | Lewis Reinhold and Peter Reinhold (son) |
| RESPONDENTS: | Catherine Peeler, Customer Liaison Coordinator, Ford Motor Company of Australia Limited Michael Fenech, Ford Service Engineer Kevin Schofield, Service Manager, Sunshine Ford Peter O’Brien, Sunshine Ford Dealer Principal |
REASONS FOR DECISION
Application
By application filed 25 March 2014 the applicant Mr Reinhold seeks repair of a 2005 Sunliner Sierra Motorhome under an extended warranty; the rectification of a major fault in the vehicle to a satisfactory mechanical standard level of reliability so that the vehicle can be used safely on public roads. Mr Reinhold also seeks $25,000 for unascertained rectification work.
Background and Evidence
In July 2005 Mr Reinhold and his wife purchased a new Sunliner Sierra Motorhome (the vehicle) from Brisbane Motor Camper Centre for $97,000. The vehicle was originally sold on 16 June 2005 as a Ford VJ Transit two door cab chassis by Knox Ford in Victoria. It was manufactured in Turkey in 2004 and imported into Australia. Sunliner fabricated the ‘motorhome’ as part of the Transit vehicles conversion. At the time of purchase Mr and Mrs Reinhold were assured by Brisbane Motor Camper Centre that Ford’s manufacturer’s warranty applied to the new Transit motorhome vehicle. The Ford ‘bumper to bumper’ warranty was for a period of three years to 13 July 2008. Mr and Mrs Reinhold intended to travel various parts of Australia in their motorhome (vehicle).
On 12 April 2006 while travelling on the open road at Forbes in New South Wales the dashboard icons illuminated and the vehicle engine stopped. Dawson Forbes the local Ford agent downloaded diagnostic codes from the on-board computer, assessed the vehicle and found no cause for the failure. Dawson Forbes said the vehicle was safe to drive. The vehicle had travelled 3,955 km.
Mr Reinhold continued to use the vehicle servicing it at intervals generally in accord with the servicing requirement applicable to the vehicle.
In around May 2008 Mr Reinhold became aware through displays and notices at Sunshine Ford Southport that extended vehicle warranties were available; that service invoices contained the words ‘ask about our extended warranties’; that he naturally inferred the extended warranty was a Ford product. Mr Reinhold said he approached Sunshine Ford’s business manager Ms Wright who produced a quote for ‘new vehicle extended warranty’ on Sunshine Ford letterhead in the sum of $1,980 for a three year extended warranty. He said there was only a passing reference to another party ‘Allianz’ in the fine print on the face of the quote. That passing reference was a disclaimer by Allianz stating that the figure of $1,980 was indicative only and did not represent a quote or offer. Mr Reinhold applied for the extended warranty.
On 17 June 2008 Mr Reinhold received a written offer of extended warranty insurance form Allianz Australia at a premium of $1,980. A policy schedule and policy document (product disclosure statement) was enclosed and a policy number recited. The policy insured the vehicle for 36 months or 60,000 km after the manufacturer’s warranty ended – which ever first happened. The period of insurance was recorded as starting 17 June 2008 and ending 13 July 2011. The policy schedule clearly recited Allianz as insurer, Mr Reinhold as insured and Sunshine Group Pty Ltd as intermediary. In the meantime the Ford manufacturer’s warranty expired on 16 June 2008.
Mr Reinhold said the on 6 May 2010 during a trip through New South Wales the same sort of failure occurred as on the first occasion 12 April 2006. The vehicle was driven to Tamworth Ford for diagnosis. Mr Reinhold said he was told it was a ‘freak out’ and unlikely to reoccur. The diagnosis was not documented nor any remedial action taken. This second failure occurred over four years after the first incident. The odometer reading at this point was 36,200 km.
Mr Reinhold stated that he raised ‘the defect’ with Sunshine Ford when the vehicle was being serviced on 15 October 2010; that the cause of the defect was unable to be determined; that he was encouraged to continue to use the vehicle.
Mr Reinhold said a similar failure occurred on 17 June 2011 whilst travelling in New South Wales a short one month or so after the vehicle was serviced by Sunshine Ford on 11 May 2011. The vehicle was driven to Mike Blewitt Ford Coffs Harbour. Fresh diagnostic codes were recorded. Dealership technicians expressed their belief the defect was in the fuel pump. After returning home to the Gold Coast Mr Reinhold reported the defect to Sunshine Ford but said Sunshine Ford could not detect any defect and appeared uninterested.
On 11 July 2011 Mr Reinhold wrote to Ford Motor Company of Australia Limited (Ford Australia) concerning the malfunction of the vehicle. Ford Australia replied on 6 September 2011 requesting that he present the vehicle to an authorised Ford dealer for repair. Mr Reinhold presented the vehicle to Sunshine Ford. According to him Sunshine Ford refused to undertake repairs as recommended by Blewitt Ford of Coffs Harbour. Mr Reinhold drove the vehicle to Coffs Harbour for repairs in accord with its diagnosis on 17 June 2011. Blewitt Ford carried out a fuel pump overhaul replaced the pump control module and removed and replaced the fuel filter at a cost of $4,454.65. Mr Reinhold notified Ford Australia and the insurer Allianz paid Blewitt Ford’s invoice in full. By this stage the odometer reading was 39,459 km.
On 30 May 2013 Sunshine Ford serviced the vehicle in advance of a trip north. On 23 July 2013 shortly after having set out a similar failure according to Mr Reinhold occurred. This he said was only 1,330 km after the pump and filter replacement by Blewitt Ford. The vehicle was returned to Sunshine Ford on 12 August 2013 with Mr Reinhold giving specific instructions for the vehicle to be fixed once and for all. On each of the four occasions when the vehicle lost power it was able to be restarted and driven as usual without difficulty. Mr Reinhold indicated that apart from the four incidents the vehicle was otherwise a very good vehicle.
Mr Reinhold said he agreed on 28 August 2013 with Sunshine Ford for the vehicle to be referred for more extensive tests from 16 September 2013 when Ford’s experts would inspect the vehicle. He said the vehicle remained at Sunshine Ford from 16 September 2013 to early November 2013 for expert diagnosis. Shortly after the release of the vehicle Mr Reinhold said he received a letter from Ford Customer Relationships which he said seemed to rely on the expiry date of the ‘express new vehicle warranty’ as defining in the limits of Ford’s obligations.
Thereafter there were telephone conversations and correspondence passing between Mr Reinhold, his son Peter Reinhold and Ford Australia without resolution of the defect and warranty issues.
Mr Reinhold asserted two causes of action. Firstly that neither Ford Australia nor Sunshine Ford had honoured the warranty. Secondly that neither provided adequate provision for service and repair of the vehicle. He contended that both Ford Australia and Sunshine Ford were advised that ‘there was a serious defect with the vehicle on numerous occasions’. It was submitted that the Trade Practices Act 1974 (Cth) (‘TPA’) as it applied in 2005 provided that the vehicle be of merchantable quality and fit for purpose; that due to the vehicles defect it was neither.
Mr Reinhold contended the vehicle was suffering from a major ongoing defect that made its operation dangerous; that he had always had the vehicle serviced by Ford approved dealerships and technicians; that he was largely ignored particularly by Ford Australia and that the vehicle was a ‘lemon’.
Sunshine Ford serviced the vehicle particularly so since 2008 and agreed it promoted the extended warranty with national insurer Allianz. It was not directly involved with the loss of power incidents on 12 April 2006, 6 May 2010, 17 June 2011 and 23 July 2013. After Mr Reinhold delivered the vehicle to Sunshine Ford in August 2013 a thorough assessment was carried out. Unable to locate any fault the matter was referred to Ford Australia for further assessment.
Mr Schofield of Sunshine Ford said a meeting took place on 21 October 2013 at which Mr Reinhold was advised that:
a) No malfunction had been isolated either by instrument analysis or road testing and
b) A representative of Ford Australia had examined the vehicle and was of the opinion that the fuel may have contributed to the alleged malfunction.
Mr Schofield said that:
a) There was no charge for the assessment;
b) That it was a good will gesture.
Sunshine Ford argued that:
a) It was not obliged to repair the vehicle either under the Ford warranty or the extended warranty;
b) It was up to Mr Reinhold to produce evidence that the vehicle suffered from a mechanical manufacturing or design defect covered by warranty;
c) There was no mechanical malfunctioning or design defect identified prior to the expiry date of the Ford warranty;
d) There was no liability to undertake repairs under the extended warranty because that was an agreement between Allianz and Mr Reinhold.
Mr Schofield said Sunshine Ford had not breached any provisions of the TPA for the reason it was neither the supplier nor the manufacturer of the vehicle.
Ford Australia stated the vehicle was covered by the Ford express new vehicle warranty for three years or 100,000 km whichever first occurred. It was not contentious that this warranty expired on 16 June 2008. Ms Peeler for Ford Australia asserted Ford Australia was not liable under the extended warranty; that Ford Australia was not a party to the extended warranty and had no standing in respect of the extended warranty. She said in any event a thorough assessment of the vehicle which included diagnostic testing and extensive road testing was carried out in September 2013 by Michael Fenech Ford Australia’s field service engineer on a goodwill basis. She asserted that concerns raised in 2010 and after were not related to the incident in 2006. She referred to Mr Fenech’s assessment report of the vehicle in September 2013.
Ms Peeler contended that a claim against Ford Australia could only be entertained if there was evidence of a manufacturing defect in materials or workmanship at the time of the vehicles manufacture and which was undiagnosed and unrepaired in 2006 which she said was not the case based on Mr Fenech’s report. The Ford Australia express warranty provided that
During the Ford vehicle warranty period, at its option, repair, replace or adjust free of charge at the premises of a servicing dealer any part of the vehicle which it finds to be defective in factory materials or workmanship under normal use and operation.
Ms Peeler went on to say:
a) Loss of engine power on four occasions over eight years or more was not of itself evidence of a manufacturing defect;
b) That in any event only one incident of loss of power occurred during the Ford express warranty period;
c) That the following incident was four years later and well outside the Ford express warranty period.
Ms Peeler also argued:
a) That any cause of action for alleged breach of implied warranty was statute barred;
b) That any cause of action occurred no later than 12 April 2006;
c) That pursuant to the Limitation of Actions Act 1974 (Qld), s 10, any action for breach of contract was required to be brought within six years from the date on which the cause of action arose;
d) That any action ought to have been commenced no later than April 2012.
Michael Fenech, Ford’s field service engineer, furnished his report of his assessment of the vehicle in September 2013. In his report and in evidence he stated he road tested the vehicle in a variety of conditions. He was unable to ‘bring on a fuel related concern’ in over 600 km of on road vehicle testing.
In a review of vehicle service and repair records he concluded as follows:
1.Event 12 4 06. The cause of the engine cut out would have been engine hood malfunction.
2.Event 15 10 10. Issue caused by clutch position error due most likely to lack of usage.
3.Event 17 06 11. Vehicle stall – caused by fuel metering control A range. A fuel quality or fuel system related.
4.Event 12 08 13. Vehicle stall – caused by fuel metering control A low. A fuel quality or fuel system related issue.
Mr Fenech concluded the ‘root cause of the vehicle stalling or losing power has differed on each occasion’. He said this effectively accorded with Mr Reinhold’s recollection of each of the four events as follows:
Event 1 – Instrument cluster lit up like a Christmas tree.
Event 2 – Red spanner and transmission light illuminated.
Event 3 – Glow plug light and transmission light illuminated.
Event 4 – No warning lights noted.
Given that no fault could be reproduced despite extensive road testing Mr Fenech considered the possibility of an intermittent fault with the fuel metering system and set out potential causes of such an intermittent fault. These were fuel quality, fuel contamination, fuel system corrosion, algae growth and irregular servicing.
Mr Fenech’s report went on to discuss the modification of the vehicle’s body in its conversion to a motorhome, increase in the gross vehicle mass (GVM) and its possible relationship to fuel system issues.
Given the late filing and service of material prior to 18 August 2014 each of the parties was given and was agreeable to the opportunity to file further material within the ensuing 14 days ie by 1 September 2014.
In further material filed Mr Reinhold took issue with the extent of road testing by Mr Fenech implying that it was less than suggested. He asserted Mr Fenech’s report was based on the notion that the engine was a Common Rail Diesel Injection (CRDI) and not a more basic direct injection system which was the type of engine in fact fitted to the vehicle. Mr Reinhold sought to rebut the potential causes of the intermittent fault as suggested by Mr Fenech.
Mr Reinhold referred to a case of Webby v Auckland Auto Collection Limited[1] to assert that an intermittent fault which stops the engine is a ‘failure of substantial character’. That case involved an intermittent fault occurring on a number of occasions within Ford’s three year warranty period and Ford’s extended one year warranty period a total warranty period of four years.
[1]No MVD106/12 (Auckland) (2012) NZMVDT 82.
Mr Reinhold also referred to Alley v Quayside.[2] The issue in that case was whether a fuel injector was defective as a consequence of water contamination of fuel or was it in fact a manufacturers defect. The reasons for decision in that case at the conclusion thereof state as follows:
The crucial evidence is the sworn evidence of Mr Smith that there was water in the fuel. If so, the damage to the vehicle was caused externally via fuel purchased by the applicant and the repairs are not covered by the warranty. The applicant has to prove on balance that this cause is incorrect. There is no evidence from the applicant, either expert or lay, that:
(a)There was another cause; or
(b)the injector was defective in material or manufacture.
There is no evidence of an inspection of the injector, no evidence by way of report re the injector and no evidence from a mechanic or diesel expert led by the applicant. The application cannot succeed and has to be dismissed.
[2][2011] NSWCTTT 228.
Ms Peeler of Ford Australia in further material asserted the TPA provided that any action must be commenced at any time within three years after the day on which the cause of action accrued ie April 2006; that therefore any claim under the TPA for a breach of implied warranty or merchantable quality ought to have been commenced by April 2009. As this claim was not commenced until March 2014 it is in any event statute barred under the TPA. Ms Peeler asserted ‘facilities for repair of goods and parts for the goods’ were available referring to 300 Ford dealer locations Australia wide.
Conclusions
Mr and Mrs Reinhold purchased a new Sunliner Sierra Motorhome in July 2005. It was a modified Ford VJ Transit two door cab chassis. The vehicle carried with it the Ford express new vehicle warranty for a period three years or 100,000 km from 16 June 2005 to 16 June 2008. Pursuant to the warranty Ford would repair the vehicle if it was defective in factory materials or workmanship under normal use and operation.
On 12 April 2006 while travelling in New South Wales the dashboard icons lit up like a Christmas tree and the vehicle lost power. It was restarted without difficulty and driven to Dawson Forbes the local Forbes Ford dealer. No fault could be found. The vehicle was declared safe to drive. The odometer reading was 3,955 km.
Over four years past without the vehicle suffering any similar loss of power. In May 2010 while travelling in New South Wales the vehicle again lost power. The vehicle was restarted and driven to Tamworth Ford. No fault could be found. The odometer reading at this point was 36,200 km. In the meantime the Ford new vehicle warranty had expired some two years prior.
The vehicle lost power on two subsequent occasions on 17 June 2011 and 23 July 2013. There was no evidence led by Mr Reinhold to correlate the loss of power on each of the four occasions such as to be able to determine that there was a failure to repair the vehicle in April 2006.
Mr Fenech’s report suggested two different causes of loss of power in 2006 and 2010 and suggested the same probable cause of loss of power in 2011 and 2013. All three causes were of a different nature. Then there is the time lapse April 2006 to May 2010 when no loss of power was experienced with the vehicle travelling over 32,000 km in that time. The time lapse accords with Mr Fenech’s report and evidence that the 2006 incident was more likely an unrepeated engine hood malfunction due to a light frontal impact or deep pothole strike. The Tribunal finds Ford Australia complied with its warranty obligations in 2006.
There was no evidence that Ford’s new vehicle warranty ought now some eight years later cover what is said to be an intermittent fault emanating from the one and the same engine malfunction.
A good deal was made of what representations were made that led Mr Reinhold to believe the extended warranty was a Ford product and an extension of Ford’s new vehicle warranty. These included a quote on Sunshine Ford letterhead, the use of the words ‘new vehicle extended warranty’, Ford Solutions stamps promoting ‘Ford Solutions extended new vehicle warranty’ and statement that ‘extended new vehicle warranty is a replica of your original manufacturer’s warranty’.
However the standout factor here is the offer, policy and policy schedule received by Mr Reinhold. The policy is crystal clear. The insurer is Allianz, the insured is Mr Reinhold and the intermediary is Sunshine Ford. An intermediary, dictionary defined, is simply ‘being between persons, parties’. Any reasonable person upon receipt of the policy would observe that Sunshine Ford was not a party to the policy. Ford Australia is not even mentioned.
All that can be drawn or concluded from Sunshine Ford’s promotion of the extended warranty is that such a warranty was available to owners of Ford vehicles who wished to avail themselves of that service. There is nothing in Sunshine Ford’s promotion of the extended warranty that makes Sunshine Ford liable in any way shape or form under that extended warranty. Ford Australia is simply absent from anything to do with the extended warranty. There is no way to conclude that Ford Australia could possibly incur any liability under the extended warranty.
The vehicle lost power on 17 June 2011 in New South Wales. It was driven to Mike Blewitt Ford Coffs Harbour. That dealerships technicians expressed belief the defect was in the fuel pump. Mr Reinhold upon return to the Gold Coast wanted Sunshine Ford to attend to this apparent defect. In the event Blewitt Ford attended to the fuel pump and replaced the fuel filter at a cost of $4,454.65 which was paid in full by Allianz in accordance with its policy terms and conditions. The claim made against Allianz was rightfully within the period of extended insurance namely 17 June 2008 to 13 July 2011. Although it transpired that the fuel pump may not have been the cause of loss of power Mr Reinhold has rightfully availed himself of the benefit of having the policy.
The vehicle suffered loss of power subsequently on 23 July 2013. Despite what the Tribunal accepts on the evidence as a concerted effort by both Sunshine Ford and Ford Australia at no cost to Mr Reinhold to detect the fault none was able to be located. By this stage the vehicle was some eight years old.
Without evidence of a singularly caused intermittent fault it is impossible to refer this incident or that of 2011 to any malfunction that may have preceded them.
As stated in Alley v Quayside the Tribunal ‘is not an investigative body … some of the questions raised by the applicant cannot be answered here’.
Here it is a case of whether the applicant has adduced evidence from which the Tribunal could conclude that there has been a failure to comply with the provisions of the Ford new vehicle warranty by either Sunshine Ford or Ford Australia. There is no evidence of non-compliance with that warranty. As for the extended warranty that was never going to be the subject of any findings by the Tribunal for the reason that the Tribunal has found it was an insurance policy between Mr Reinhold and Allianz. If Mr Reinhold asserts liability on the part of Allianz for the incidents in 2010, 2011 and 2013 then it is for him prosecute his perceived rights as against Allianz.
On the basis of the above findings and conclusions the application must be dismissed.
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