Simmons v Peter Warren Automotive Pty Ltd trading as Macarthur Ford Campbelltown and Ford Motor Company of Australia Pty Ltd trading as Ford Australia

[2023] NSWCATCD 74

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Simmons v Peter Warren Automotive Pty Ltd trading as Macarthur Ford Campbelltown and Ford Motor Company of Australia Pty Ltd trading as Ford Australia [2023] NSWCATCD 74

Hearing dates:

20 March 2023 and 27 June 2023

Date of orders:

31 July 2023

Decision date:

31 July 2023

Jurisdiction:

Consumer and Commercial Division

Before:

G A Kinsey, General Member

Decision:

The application is dismissed

Catchwords:

CONSUMER LAW-Consumer guarantees under Australian Consumer Law-whether motor vehicle of acceptable quality-test of acceptable quality-whether breach of consumer guarantee established-misleading and deceptive conduct

Legislation Cited:

Australian Consumer Law 2010(NSW)

Civil and Administrative Tribunal Act 2013 (NSW)

Fair Trading Act 1987 (NSW)

Cases Cited:

Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304

Costa Vraca Pty Ltd v Berrigan Weed & Pest Control Pty Ltd (1998)155 ALR 714

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

Hancock v East Coast Timber Products Pty Ltd [2011] NSWCA 11

LSH Auto (Sydney) Pty Ltd v Sherman (No 2) [2021] NSWCATAP 272

Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305.

Matumaini v Automobile Industries [2017] NSWCATAP93

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

Sproule v DP James Carpet Laying Pty Ltd [2018] NSWCATAP 177

Texts Cited:

None cited

Category:

Principal judgment

Parties:

Applicant: Peter Simmons
First Respondent: Peter Warren Automotive Pty Ltd trading as Macarthur Ford Campbelltown
Second Respondent: Ford Motor Company of Australia Pty Ltd trading as Ford Australia

Representation:

Applicant: in person
First Respondent: Lee Elias (Dealer Principal) and Fraser Perrin (In House Counsel)
Second Respondent: Justin Newbound (Customer Liaison Manager)

File Number(s):

MV 22/49315

Publication restriction:

Unrestricted

REASONS FOR DECISION

Parties

1. The Applicant (hereinafter referred to as “Simmons”) purchased a Ford Everest 2021.75 SUV Trend 3.2 L 6 SP Auto motor vehicle from Macarthur Ford Campbelltown (First Respondent) on or about 5 April 2022. Simmons appeared in person at the hearing.

2. The First Respondent carries on business as a licensed motor dealer and trades as Macarthur Ford Campbelltown. For the sake of convenience, the First Respondent shall hereinafter be referred to as “Macarthur Ford”. At the hearing Macarthur Ford was represented by its dealer principal Lee Elias and in house counsel Fraser Perrin.

3. The Respondent is the manufacturer of the vehicle. For the sake of convenience, the Respondent shall hereinafter be referred to as “Ford Australia”. At the hearing Ford Australia was represented by its Customer Liason Manager Justin Newbound.

Application

4. In an application filed in the Tribunal on 6 November 2022, Simmons requested an order that Macarthur Ford and Ford Australia provide him with a replacement Ford Everest Platinum V6 motor vehicle or alternatively, pay him the sum of $80,000.00.

5. In his application Simmons alleged the vehicle was not of acceptable quality in breach of section 54 of Australian Consumer Law (“the ACL”), was not fit for purpose, failed to match the description provided by the dealer and the services provided were not done with due care and skill in breach of the consumer guarantee in section 60 of the ACL.

6. He alleged Macarthur Ford had engaged in misleading and deceptive conduct in breach of section 18 of the ACL.

Procedural Directions

7. The Tribunal made directions on 29 November 2022 and 20 March 2023 for the parties to file and serve documents on which they intended to rely at the hearing. Bundles of documents were received from Simmons, Macarthur Ford and Ford Australia. The documents were tendered as evidence in the proceedings.

Background

8. Simmons was a client of Macarthur Ford for many years and purchased several vehicles from the dealership.

9. In or about 2013 Simmons approached Macarthur Ford about issues with his 2013 Ford Ranger. After some negotiation, Macarthur Ford agreed to swap the 2013 Ford Ranger for a new 2015 model Ford Everest provided Simmons contributed $3000.00 towards the cost. The new vehicle was delivered on or about 31 December 2015.

10. In or about July 2019, Simmons expressed dissatisfaction with his replacement 2015 vehicle. He alleged the vehicle had major defects. He requested a replacement vehicle. On or about 31 July 2019 Macarthur Ford and Ford Australia agreed to swap the Ford Ranger with a new Ford Everest 2019.75 model as a goodwill gesture and at no cost to Simmons.

11. When the vehicle was delivered, Simmons complained it had scratches to the paintwork, some accessories were missing, and other accessories had been incorrectly fitted. Macarthur Ford fitted free weather shields which Simmons asked to be removed. Simmons believed the damage caused by the removal of the weather shields could not properly be repaired. He requested a replacement vehicle.

12. Macarthur Ford agreed to provide a replacement new Ford Everest 2019.75 vehicle on or about 26 August 2019 as a goodwill gesture and at no cost to Simmons.

13. In January 2020 Simmons complained Macarthur Ford fitted numberplates to the vehicle without his consent. He demanded Macarthur Ford remove the number plates. He submitted the damage could not be repaired without replacement of the bumper bar and respraying the front of the vehicle. He requested Macarthur Ford replace the vehicle.

14. Macarthur Ford agreed to Simmons’ request. The vehicle was replaced with a new Ford Everest 2020.25 model on or about 31 January 2020. Simmons contributed $1300.00 towards the price of the new vehicle.

15. The vehicle was damaged whilst being serviced by Macarthur Ford. The damaged sections were resprayed but Simmons was not satisfied with the outcome. He claimed the respraying caused further damage and was not to a professional standard. Simmons demanded a replacement vehicle.

16. After negotiation, Macarthur Ford agreed to replace the damaged vehicle with a new Ford Everest 2021.75 model provided Simmons contributed $3000.00 towards the cost of the replacement vehicle. Simmons paid his contribution and the vehicle was delivered on or about 5 April 2022.

17. Prior to taking delivery, Simmons carried out a thorough inspection of the vehicle. The only defect noted glue residue on the passenger side front door. The residue was removed immediately by a detailer and Simmons took possession of the vehicle.

18. On 10 April 2022 Simmons sent an email to Macarthur Ford which stated in part:

I wanted to say thank you again, for all your effort in presenting the Everest so well. Thankyou for polishing the mark out of the front passenger door that we found on pickup and also having you detailer take care of it.

There is what appears to be a hair within the window tint of the driver’s window, are you happy for the workshop to have a look at this at the 3,000km service?

19. On 16 April 2022 Simmons first complained the new vehicle has defective paintwork, the model provided as a replacement is not the agreed model, and it has manufacturing defects. He has requested Macarthur Ford and Ford Australia to replace the vehicle. They have denied Simmons request for a replacement vehicle but offered to rectify any defects under the manufacturer’s warranty.

CONSIDERATION

The Claim

20. Simmons sought orders for Macarthur Ford and Ford Australia to provide him with a replacement vehicle or alternatively, pay him the cost of a new vehicle.

21. Simmons asserts at page 24 of his written submissions:

“The enjoyment, quality of manufacturing components and capabilities of this vehicle are significantly different and we were not notified and advised of this by the dealership prior to purchase. Should we have been informed of all the changes we would not have purchased this vehicle.

We believe this vehicle is:

Not of acceptable quality, safety, durability or free from defects.

Is NOT fit for purpose disclosed before sale (engine bay is not water and dust resistant due to removed sealers).

DOES NOT Match the description provided in discussions with the sales manager Joe Paglia

Does not match the description of the vehicle advertised by Ford “a capable vehicle built to stand up to the toughest extremes….durable under impact… the Everest has it all”

22. The alleged defects in the vehicle Ford Everest delivered to Simmons on or about 5 April 2022 can be summarised as follows:

1. Liquid/glue on door panel and scratches on door;

2. Driver’s window required replacement and re-tinting;

3. Paint peeling off internal rear passenger door pillars;

4. Accelerator is “clicky, notchy and noisy during use”;

5. Steering shaking at freeway speeds;

6. Vibrations from the drivetrain and engine felt in the vehicle;

7. Touch screen often freezes and is unusable;

8. Rusting is present over the chassis of the vehicle;

9. Gearbox is excessively holding gears;

10. Engine is running rough and loud with flat spots;

11. Airconditioning/climate control does not get very cold;

12. Excessive road noise experienced in comparison to previous models;

13. Driver’s door makes loud bumping sound on uneven sealed roads; Rear door doesn’t always operate.

14. Excessive dust and water entering engine bay due to removal of seals.

15. Dust identified within sealed airbox;

16. Front passenger seat leather requires replacing due to defects in leather

23. Simmons claimed that by virtue of the defects identified in the preceding paragraph, the vehicle was not of acceptable quality nor fit for purpose.

24. In his amended claim dated 17 April 2023, Simmons sought an order for replacement of his vehicle with an equivalent Ford Everest or financial compensation of $35,000.00.

25. At the hearing on 27 June 2023, the amount of financial compensation increased to $65,495.87.

26. Ford Australia disputed Simmons claims and submitted his application should be dismissed in its entirety. It asserted the vehicle was of acceptable quality and in the alternative, it was not possible to provide a replacement vehicle to Simmons because a vehicle of the same type and value was no longer available. Ford Australia was not prepared to offer financial compensation.

27. Macarthur Ford submitted the application should be dismissed. It contended Simmons had not proved his claim. It argued there was no expert evidence to identify any minor or major defect in the vehicle.

28. I find that the claim is a "consumer claim" as defined in section 79E of the Fair Trading Act 1987 (“the FTA”).

29. I find that Simmons is a consumer, Macarthur Ford and Ford Australia are suppliers and the application is a claim by a consumer that arises from a supply of goods and services by a supplier to a consumer under a contract made in New South Wales.

30. I find that the application was made within the 3 years period from the date on which the cause of action arose (Section 79L(1)(a) of the FTA). The Tribunal has jurisdiction to make the orders sought by Simmons. I find the Tribunal has jurisdiction to hear and determine the application.

31. Simmons submitted the vehicle was not fit for purpose and was not of acceptable quality in breach of the consumer guarantees in the ACL NSW. He also alleged he was misled about the characteristics of the replacement vehicle by Joe Paglia, the sales manager for Macarthur Ford. He submitted this misrepresentation was a breach of section 18 of the ACL.

Was the Vehicle of Acceptable Quality?

32. Section 54 of the ACL NSW is in the following terms:

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; and

(e) any other relevant circumstances relating to the supply of the goods.

(4) If:

(a) goods supplied to a consumer are not of acceptable quality; and

(b) the only reason or reasons why they are not of acceptable quality were specifically drawn to the consumer's attention before the consumer agreed to the supply;

the goods are taken to be of acceptable quality.

(5) If:

(a) goods are displayed for sale or hire; and

(b) the goods would not be of acceptable quality if they were supplied to a consumer;

the reason or reasons why they are not of acceptable quality are taken, for the purposes of subsection (4), to have been specifically drawn to a consumer's attention if those reasons were disclosed on a written notice that was displayed with the goods and that was transparent.

(6) Goods do not fail to be of acceptable quality if:

(a) the consumer to whom they are supplied causes them to become of unacceptable quality, or fails to take reasonable steps to prevent them from becoming of unacceptable quality; and

(b) they are damaged by abnormal use.

(7) Goods do not fail to be of acceptable quality if:

(a) the consumer acquiring the goods examines them before the consumer agrees to the supply of the goods; and

(b) the examination ought reasonably to have revealed that the goods were not of acceptable quality

33. Has there been a failure by Macarthur Ford and Ford Australia to comply with the consumer guarantee of acceptable quality set out in section 54 of the ACL? In Matumaini v Automobile Industries [2017] NSWCATAP93 the Appeal Panel stated at [73]:

"The question which the Tribunal had to consider and answer was whether, at the time of the sale, the vehicle was of acceptable quality as that phrase is defined in s 54 (2) of the ACL NSW. In other words, it was not necessary for the Appellant to prove that at the time of the sale, there was a particular identified defect which caused the vehicle not to be of an acceptable standard."

34. The question which the Tribunal must consider and answer is whether at the time of sale, the vehicle was of acceptable quality as that phrase is defined in section 54(2) of the ACL. It is not necessary for Simmons to prove that at the time of sale, there was a particular identified defect which caused the vehicle not to be of acceptable quality.

35. Simmons bears the onus of proof. He must provide evidence which satisfies the Tribunal on the balance of probabilities it is sufficient to make the orders sought in the application.

36. In Safi v Heartland Motors Pty Ltd t/as Heartland Chrysler [2016] NSWCATAP 80 the Appeal Panel summarised the relevant statutory provisions relevant to these proceedings at {15}-[20]:

15   Section 3 of the ACL (NSW) provides the grounds on which a person is taken to have acquired goods as a "consumer". Relevantly, certain remedies in the ACL (NSW), including those relating to consumer guarantees, are only available to consumers. There was no dispute before the Tribunal at first instance or in the appeal that the Tribunal had jurisdiction to hear this claim under the ACL (NSW). For reasons appearing later, this was in fact a threshold jurisdictional issue that was not addressed before the Tribunal at first instance or raised by the parties in the appeal.

16 Subdivision 2A, Division 1 of Part 3.2 of the ACL (NSW) provides for statutory guarantees in relation to the supply of goods. Relevantly, s 54 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; and

(e) any other relevant circumstances relating to the supply of the goods.

17   Part 5.4 of the ACL (NSW) provides remedies for breach of the statutory guarantees.

18   Section 259(1) of the ACL (NSW) provides that a consumer may take action against a supplier if one of the guarantees that relates to the supply of goods is not complied with. If the failure to comply can be remedied and is not a major failure, the consumer may require the supplier to remedy the failure within a reasonable period (s 259(2)(a)). If the supplier refuses or fails to comply, the consumer may have the failure remedied and recover all reasonable expenses incurred by the consumer in having the failure so remedied or notify the supplier that the goods are rejected (s 259(2)(b)).

19   If the failure to comply with the guarantee cannot be remedied or is a major failure, the consumer may notify the supplier that the consumer rejects the goods or, by action against the supplier, recover compensation for any reduction in the value of the goods below the price paid (s 259(3)).

20   Section 259(4) 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.

37. In LSH Auto (Sydney) Pty Ltd v Sherman (No 2) [2021] NSWCATAP 272 the Appeal Panel set out the legal principles applicable in a case involving a claim under section 54 of the ACL at [35]-[36]:

35 The relevant principles to apply in a case such as the present were summarised by Derrington J in Vautin v By Winddown (No 4) [2018] FCA 426; (2018) 362 ALR 702 as follows:

"[142] Mr Vautin asserts that the existence of the construction defects in the sandwich core panels of Revive means that the vessel is not of an "acceptable quality" within the meaning of the guarantee imposed by s 54 of the ACL. In determining whether the guarantee in that section is contravened the following matters are relevant:

(a) The test as to whether goods are of an "acceptable quality" is an objective one; being taken from the perspective of a "reasonable consumer" (APS Satellite Pty Ltd (formerly known as Sky Mesh Pty Ltd) v Ipstar Australia Pty Ltd [2016] NSWSC 1898 (APS Satellite Pty Ltd) at [57]; Merck Sharp & Dohme (Australia) Pty Ltd v Peterson (2011) 196 FCR 145; 284 ALR 1; [2011] FCAFC 128).

(b) The question for the "reasonable consumer" is whether the goods in question have the identified qualities enumerated in 54(2) to an "acceptable standard". This requirement is derived from the words "as a reasonable consumer ... would regard as acceptable".

(c) The "acceptable standard" is used as the yardstick against which the qualities of the goods are to be measured. It is ascertained by a consideration of the matters referred to in s 54(3); the nature of the goods, their price, any statement made about the goods on packaging or labels, any representations made about the goods by the supplier or manufacturer, and any other circumstance relating to their supply.

(d) It is necessary the goods have all of the qualities identified in s 54(2) to the ascertained acceptable standard. Those qualities are that the goods are fit for all the purposes for which goods of that kind are commonly supplied, acceptable in appearance and finish, free from defects, safe and durable.

(e) In the assessment of whether the goods meet that relevant standard, the reasonable consumer is taken to be fully acquainted with the state and condition of the goods (including any hidden defects of the goods).

(f) If the goods supplied do not have all of the identified qualities to the acceptable standard, they will not be of an "acceptable quality".

[143] In compendious terms, the issue is whether, objectively, the goods supplied (when taking into account their actual quality including any latent defects) are, to an acceptable standard, fit for all the purposes for which goods of that kind are commonly supplied, acceptable in appearance and finish, free from defects, safe and durable when measured by a standard which reflects the nature of the goods, their price, statements about the good as per their packaging, representations made about the goods and any other relevant circumstance. In Prestige Auto Traders Australia Ltd v Bonnefin [2017] NSWSC 149 at [132] N Adams J identified the manner in which s 54 should be applied in the following way:

"The relevant test in s 54(2) of the ACL (NSW) of whether or not goods are of "acceptable quality" is an objective one based on whether a reasonable consumer who was aware of the "defects" in the goods at the time of the supply would have considered them to be of acceptable quality. There was no issue taken that the determination of what is objectively reasonable for a consumer to expect is to be made taking into account the relevant information known as at the time of the trial, including "after-acquired knowledge": Medtel Pty Ltd v Courtney (2003) 130 FCR 182; 198 ALR 630; [2003] FCAFC 151 at [66] and [70].'"

36 In Australian Competition and Consumer Commission v Jayco Corporation Pty Ltd [2020] FCA 1672 Wheelahan J said:

"[25] ... The standards under s 54(2) include that goods will be fit for all purposes for which goods of that kind are commonly supplied. This general standard of fitness for purpose is not dependent upon the consumer communicating any intended purpose to the supplier or relying upon the supplier's skill or judgment. And, in relation to the general standard, it does not suffice that the goods will be fit for only some of those purposes.

[26] The standard of acceptable quality in s 54(2) has as its reference point a construct, namely the objective standard of a reasonable consumer fully acquainted with the state and condition of the goods, including any hidden defects of the goods. The reasonable consumer sits with an array of other hypothetical persons who have been recruited by the law and by reference to whom objective standards are evaluated: see, Healthcare at Home Ltd v The Common Services Agency [2014] UKSC 49; 4 All ER 210 at [1]- [4] (Lord Reed JSC). Such a person has been described as an anthropomorphic conception of justice that is and must be the court itself: see Davis Contractors Ltd v Fareham Urban District Council [1956] UKHL 3; [1956] AC 696 at 728 (Lord Radcliffe).

[27] The hypothetical question whether the reasonable consumer would have regarded the quality of the goods as acceptable is to be determined at the time of supply. However, the reference in s 54(2) to hidden defects has the consequence that for the purposes of determining that question, the reasonable consumer may be acquainted with information known at the time of trial: cf, Medtel Pty Ltd v Courtney [2003] FCAFC 151; 130 FCR 182 at [70] (Branson J, Jacobson J agreeing). The standard of acceptable quality prescribed by s 54(2) is not absolute, or a standard of perfection. It is tempered by what a reasonable consumer would regard as acceptable having regard to the several matters in s 54(3). These matters render the standard of acceptable quality elastic, and context specific: Contact Energy Ltd v Jones [2009] NZHC 2631; [2009] 2 NZLR 830 at [95] (Miller J). The significance of the components of the guarantee of acceptable quality will therefore vary with the circumstances of each case."

38. In Crooks v Hyundai Motor Company Australia Pty Ltd [2023] NSWCATCD 29 Senior Member Sarginson provided a useful summary of the applicable law at [61] to [65]:

61. The relevant legal principles concerning the consumer guarantee provisions of the ACL have been discussed by the Appeal Panel in a number of cases, including Safi v Heartland Motors Pty Ltd t/as Heartland Chrysler [2016] NSWCATAP 80 (‘Safi’); and LSH Auto (Sydney) Pty Ltd v Sherman [2020] NSWCATAP 246 (‘Sherman’). Such authorities primarily deal with ss 54 and 259-263 of the ACL.

62. Legal principles applicable to the operation of ss 54 and 55 of the ACL and the remedial provisions under ss 259-263 are concisely summarised in Hutchinson v Central Coast Automotive Pty Ltd [2022] NSWCATCD 123 at [17]- [28]; and [30]-[58].

63. Such authorities set out the following principles:

(1) Whether goods are of acceptable quality (and whether they have a “major failure”) involves an objective, not a subjective test. Subjective dissatisfaction with the goods is not sufficient to prove a breach of the consumer guarantee provisions.

(2) A reasonable consumer, full acquainted with potential faults, would understand that no purchase of goods is completely risk free, understanding that teething problems and other problems may be addressed under warranty.

(3) The absence of an independent expert report goes to the weight of evidence, and the absence of such a report does not mean, of itself, that a consumer cannot establish that goods are not of acceptable quality (or have a “major failure”).

(4) In respect of the purpose of the goods have been purchased for, “roadworthiness” means fit for use on the roads and is synonymous with “safe.”

(5) A serious of faults or defects over a period of time may be sufficient to prove objectively that the goods are not of acceptable quality and have a “major failure.”

(6) To obtain the remedy of a refund s 263 (4) of the ACL in respect of a breach of the consumer guarantee provisions (including ss 54 and 55 of the ACL) where the failure to comply with the guarantee is a “major failure” under s 260 of the ACL, the goods must have been rejected within a “reasonable time” of the consumer notifying the supplier that the goods have been rejected and the grounds of rejecting the goods (ss 259 (3) (a), 262 and 263 of the ACL.

64. Further, the only remedies available against the manufacturer under the ACL (i.e. the first respondent) are for damages under ss 271 (3) and 272 (1) of the ACL. Those damages involve either (or both) (a) loss of value of the goods; (b) reasonably foreseeable loss to the consumer as a result of the failure. Applicable principles are set out in Volkswagen Group Australia Pty Ltd v Saad [2022] NSWCATAP 133 (‘Saad’).

65. In respect of the jurisdiction of the Tribunal to hear and determine proceedings, s 79L of the FTA contains a limitation period of 3 years from the date the cause of action first accrued, being the date that facts which constitute the elements of the cause of action crystallise or combine so that all the elements necessary to entitle a person to make a consumer claim are present. Relevant principles are set out in Saad at [122]-[129].

39. The test to be applied in determining whether goods are of acceptable quality is objective, not a subjective test. Simmons dissatisfaction with the Ford Everest vehicle is not sufficient to prove a breach of the consumer guarantee provisions in the ACL.

40. The objective test is taken from the perspective of a “reasonable consumer”. The question for the "reasonable consumer" is whether the goods in question have the identified qualities enumerated in 54(2) to an "acceptable standard". The standard of acceptable quality is not absolute or a standard of perfection. It is elastic and depends on the circumstances of each case.

41. As noted in Crooks at [63],

“(2) A reasonable consumer, full acquainted with potential faults, would understand that no purchase of goods is completely risk free, understanding that teething problems and other problems may be addressed under warranty.”

42. In these proceedings, the relevant test in section 54(2) of the ACL of whether the vehicle was of "acceptable quality" is an objective one based on what a reasonable consumer who was aware of the "defects" in the vehicle at the time of the supply would have considered them to be of acceptable quality.

43. The authorities quoted above make it clear that the question whether the reasonable consumer would have regarded the quality of the vehicle as acceptable is to be determined at the time of supply.

44. Section 55 of the ACL is a consumer guarantee that goods are “reasonably fit for any disclosed purpose and for any purpose for which the supplier represents they are reasonably fit”. The consumer guarantee in section 55 of the ACL does not materially add to the consumer guarantee in section 54 of the ACL.

45. If Simmons fails to establish the vehicle is not of “acceptable quality” within section 54 of the ACL, he will also fail to establish it was not “fit for purpose” under section 55 of the ACL.

46. Applying the above principles to the facts of this case, the Tribunal finds, when looked at objectively, at the time of sale, the vehicle purchased by Simmons was of acceptable quality as that phrase is defined in section 54(2) of the ACL and taking into account the relevant matters in sections 54(2) and 54(3) of the ACL.

47. Simmons took delivery of the Ford Everest 2012.75 (“the vehicle”) on 5 April 2022. He conducted a thorough inspection of the vehicle prior to delivery. The only matter of concern was some glue residue on the passenger side front door which was removed by a detailer. There was no evidence of any other defect.

48. In the list of defects summarised in paragraph 21 above, Simmons referred to the vehicle as covered with scratches and Macarthur Ford having made 2 unsuccessful attempts at repairs. Simmons claimed the door required respraying.

49. These claims are inconsistent with his statement made in an email sent on 10 April 2022 to Macarthur Ford in which he thanked the dealer “for polishing the mark out of the front passenger door that we found on pick up and also having your detailer take care of it.” The claims made by Simmons are rejected having regards to the contents of the email.

50. I am satisfied the only defect in the vehicle at the time of sale was the presence of the glue residue which was removed prior to delivery. There is no evidence of any hidden defects at the time of sale.

51. I find that a reasonable consumer fully acquainted with the state and condition of the vehicle (including any hidden defects) would regard it as acceptable having regard to the matters in section 54(3) of the ACL including the nature of the goods, the price paid, any statements about the goods and any representations about the goods made by the supplier or manufacturer.

52. The expert evidence relied on by Simmons was the visual and mechanical assessment of the vehicle prepared by Justin Summerhayes of Tyre Pro Picton dated 5 April 2023 (“the Tyre Pro Report”). Mr Summerhayes is the holder of a Motor Vehicle Tradesperson’s Certificate.

53. The inspection was done on 5 April 2023 when the odometer reading shows the vehicle had travelled 20372 kilometres since the date of delivery. Mr Summerhayes states he drove the vehicle and recorded his observations about its performance in the report. The Tribunal notes the inspection was done about 12 months after delivery to Simmons and it had travelled a reasonable distance in that period.

54. The Tyre Pro Report has limited probative value. It does not comply with the usual requirements for an expert report. Mr Summerhayes did not state his experience or expertise to express the opinions in the report. He did not set out what tests he performed on the vehicle and his observations in each and every case of a perceived fault. In some cases, he made an observation but did not identify a fault with the vehicle. The report did not comply with the accepted principles set out in Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305 and Hancock v East Coast Timber Products Pty Ltd [2011] NSWCA 11 regarding the requirements for expert reports.

55. In Sproule v DP James Carpet Laying Pty Ltd [2018] NSWCATAP 177, the Appeal Panel stated at [39] to [41]:

39 In Hancock v East Coast Timber Products Pty Ltd [2011] NSWCA 11;[2011] 80 NSWLR 43 the Court of Appeal considered the question of the admissibility of evidence in a non-evidence-based jurisdiction (the Workers Compensation Commission). The Commission was so described because s 354(2) of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) provided:

The Commission is not bound by the rules of evidence but may inform itself on any matter in such manner as the Commission thinks appropriate and as the proper consideration of the matter before the Commission permits.

40 At [82]–[83] in Hancock, Beazley JA, with whom Giles and Tobias JJA agreed, said:

“[82] Although not bound by the rules of evidence, there can be no doubt that the Commission is required to be satisfied that expert evidence provides a satisfactory basis upon which the Commission can make its findings. For that reason, an expert's report will need to conform, in a sufficiently satisfactory way, with the usual requirements for expert evidence. As the authorities make plain, even in evidence-based jurisdictions, that does not require strict compliance with each and every feature referred to by Heydon JA in Makita to be set out in each and every report. In many cases, certain aspects to which his Honour referred will not be in dispute. A report ought not be rejected for that reason alone.
[83] In the case of a non-evidence-based jurisdiction such as here, the question of the acceptability of expert evidence will not be one of admissibility but of weight. ..”

41 In Allen v TriCare (Hastings) Ltd [2016] NSWCATAP 216 at [191] the Appeal Panel (constituting Wright J, Seiden SC and Titterton), held that the reasoning and approach set out in Hancock at [82] – [83] should be applied to proceedings in the Tribunal.

56. Applying the above principles to the present case the Tribunal admitted the Tyre Pro Report subject to the weight to be given to it and its probative value.

57. The Tribunal highlights some of the deficiencies in the Tyre Pro report. For example, Mr Summerhayes referred to the vehicle touch screen glitching. What test did he perform and what did he observe? His statement is unsupported by evidence of any defect or the reasons for the malfunction. Is it a case of what Simmons told him or did he actually observe the problem with the touch screen? I am unable to reach any conclusion on this point.

58. Mr Summerhayes referred to excessive road noise apparent from inside the vehicle. What does that statement mean? Is there a standard? What was the decibel rating? How did he form that opinion and on what was it based? What may be excessive road noise to one person may be acceptable to another.

59. I accept Mr Summerhayes findings in respect of the faults with the rear door, drivers front window and air conditioning. These faults appear to have developed after delivery of the vehicle and were not evident at the time of sale. As Ford Australia asserted, these matters can be rectified under the manufacturer’s warranty.

60. The service invoices issued by Macarthur Ford dated 12 May 2022 and 10 June 2022 list several minor items which required attention. It seems the items were addressed under the vehicle warranty and there was no charge to Simmons.

61. Paragraph 8 of the Ford Australia submissions provides a response to Simmons claims about the alleged defects in the vehicle. The Tribunal has considered the response and accepts that in relation to many of the items there is no evidence to support the claim or there was no manufacturing defect.

62. Simmons bears the onus of proof. The only report relied upon by him is the Tyre Pro Report which has limited probative value and to which I give minimal weight. Simmons has not provided sufficient expert evidence or other evidence to support his claims the vehicle was not of acceptable quality under section 54 of the ACL nor fit for purpose under section 55 of the ACL.

63. There is no doubt Simmons is subjectively dissatisfied with the replacement vehicle. However, his dissatisfaction and complaints to Macarthur Ford and Ford Australia do not mean the vehicle is not of acceptable quality nor fit for purpose. The evidence supports the conclusion that at the time of sale the vehicle was of acceptable quality and fit for purpose.

64. As Simmons has not established the breach of the consumer guarantees in sections 54 and 55 of the ACL, he is not entitled to the remedies set out in sections 259-263 of the ACL, or any alternative remedy under section 79 N of the FTA.

65. Simmons has not established the non-compliance by Macarthur Ford and Ford Australia with the consumer guarantees in sections 54 and 55 of the ACL. I dismiss this part of the claim.

Claim for Misrepresentation

66. Simmons submitted he was misled by the sales team at Macarthur Ford “that the 2021.75 (2022 Build) Everest would be of the same level of quality and specifications of our 2020 model or better, aside from a few identified items listed below.”

67. He claimed that on inspection and during use, the 2021.75 model was of “significantly lesser quality and specifications than our 2020 model Everest, which was not advised prior to purchase.” He asserted that “Should we have been informed of all the changes we would not have purchased this vehicle.”

68. The issue in this case is whether Macarthur Ford and Ford Australia have, in trade or commerce, engaged in conduct that is misleading or deceptive or is likely to mislead or deceive. Has there been a breach of section 18 of the ACL?

69. Section 18 (1) of the ACL provides:

A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

70. A breach of section 18(1) may result in the remedies set out in Chapter 5 of the ACL including damages and compensatory orders.

71. For a breach of section 18(1) to occur, the misleading or deceptive conduct must be by a person engaged in “trade or commerce”. Section 2 of the ACL defines trade and commerce to include any business or professional activity.

72. The conduct (by words, actions, or in certain circumstances, silence) must lead, or likely to lead, persons to whom it is directed into error, and there is no requirement to mislead or deceive (Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 198).

73. However, any misleading or deceptive conduct, or conduct likely to mislead or deceive, must cause the other party to sustain loss or damage in the sense that there was reliance on the conduct (Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at [26]-[29])

74. Silence can amount to “engaging in conduct”. By section 2(2)(c) of the ACL, a reference to refusing to do an act includes “(i) refraining (otherwise than inadvertently) from doing the act; or (ii) making it known that the act will not be done”

75. In Costa Vraca Pty Ltd v Berrigan Weed & Pest Control Pty Ltd (1998)155 ALR 714 at 722-3, Finklestein J said:

It is clear that a failure to provide information can be conduct which is misleading or deceptive. For the purposes of [s 18(1)] ‘engaging in conduct’ is defined in [s 2(2)(a)] as a reference to doing or refusing to do any act and by [s 2(2)(c)] a reference to refusing to do an act includes a reference to refraining (otherwise than inadvertently) from doing that act. However, when the complaint is that [s 18(1)] has been infringed by conduct that involves either refusing or refraining from doing an act before that conduct is actionable it must have been deliberately engaged in…..[T]his [follows] from the use of the words ‘refuse’ and ‘refrain’ in [s 2(2)]. This conclusion is reinforced by the fact that by [s 2(2)(c)] conduct includes the refraining from doing any act provided it is ‘ otherwise than inadvertently’…..Accordingly, to determine whether [one] has contravened [s18(1)]… two questions arise for consideration. The first is whether the failure by [one] to inform [the other of the relevant matter] was misleading and deceptive conduct. The second question is whether the conduct was deliberate.

76. The facts and circumstances leading to the making of the contract are relevant to determining whether the conduct complained about was misleading or deceptive. In Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at 319, French CJ said:

Characterisation [of the conduct] may proceed by reference to the circumstances and context of the questioned conduct. The state of knowledge of the person to whom the conduct is directed may be relevant, at least in so far as it relates to the content and circumstances of the conduct.

77. The question whether conduct is misleading or deceptive is a question of fact to be objectively determined by examining the course of conduct as a whole. It is determined by an examination of the surrounding facts and circumstances as a whole.

78. Where a contract is entered into because of misleading or deceptive conduct, the principal remedy is that of damages. Section 236 of the ACL provides that where a person suffers loss or damage because of the conduct of another person which contravenes section 18(1), the claimant may recover the amount of the loss or damage by action against that other person .

79. The contract dated 5 April 2022 for the purchase of the vehicle was made after negotiations between Simmons and Macarthur Ford. As stated in Campbell it is necessary to examine the surrounding facts and circumstances to determine if the conduct. The Tribunal has considered the email correspondence between the parties and the oral evidence to determine the course of dealing.

80. Simmons argued the vehicle specifications are lower than in the 2020 model Everest and there have been reductions in quality. He lists the differences on pages 16 and 17 of his submission dated December 2022.

81. Simmons relied on various emails from Macarthur Ford between January 2022 and April 2022 which he says, constitutes evidence of misleading conduct.

82. In an email dated 23 January 2022 Simmons acknowledged the 2021.75 Ford Everest had a lower level of accessories. Relevantly, He wrote: “I also explained to Lee at our meeting that I am already making a concession accepting a 2021.75 or a 2022 build Everest as they have significantly less accessories than my current 2020.25 Everest.” He then listed “obsolete accessories” which were in his 2020.25 Everest but not in the 2021.75 vehicle.

83. Macarthur Ford accepted an offer made by Simmons in an email dated 11 February 2022:

“Hi Peter,

As discussed we will accept your option #2 with a $3000 contribution and no free services provided towards a 22 build current model Everest Trend, Joe will in contact with you regarding further details of ETA etc

Regards

Dean Jones

Senior Executive, Macarthur

84. In a further email on the same day, Dean Jones asked Simmons “to confirm that you are aware of the current model spec level and that some options have been deleted due to production constraints”

85. On 28 February 2022, Simmons replied to Dean Jones as follows:

Hi Dean

My apologies. I forgot to email you after speaking with Joe, sorry. Joe advised me on the current model spec’s and I can confirm I am aware of them. Joe was going to try and see if he can get an engine cover for the new Everest.”

86. The state of knowledge of Simmons is relevant in so far as it relates to the content and circumstances of the alleged misleading or deceptive conduct.

87. There is no doubt Simmons conducted his own extensive research into the accessories and specifications in the Everest 2021.75 model. The negotiations had proceeded for about 3 months and Simmons was aware from his investigations fewer accessories were standard in the vehicle compared to the 2020.25 model.

88. From an examination of the surrounding facts and circumstances as a whole and when looked at objectively, I find neither Ford Australia or Macarthur Ford have engaged in conduct that is misleading or deceptive, or likely to mislead or deceive in breach of section 18 of the ACL.

89. I am satisfied Simmons would have purchased the vehicle irrespective of the comments attributed to the representatives of Macarthur Ford. He had made his own investigations and knew what the accessories were fitted to the vehicle before making the contract.

90. Simmons alleged the vehicle supplied to him did not match the description of the vehicle he agreed to purchase. There is no evidence to support that allegation.

Conclusion

91. For the above reasons Simmons has not proved his case on the balance of probabilities. 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: 20 September 2023