Williams v Australian Motor Homes Pty Ltd and Knott Investments Pty Ltd trading as Avida Recreational Vehicles

[2017] NSWCATCD 51

Civil and Administrative Tribunal

New South Wales

• Amendment notes

Medium Neutral Citation:

Williams v Australian Motor Homes Pty Ltd & Knott Investments Pty Ltd trading as Avida Recreational Vehicles [2017] NSWCATCD 51

Hearing dates:

14 June 2017 

Decision date:

04 July 2017

Jurisdiction:

Consumer and Commercial Division

Before:

D. Moss, General Member

Decision:

On 14 June 2017 the following orders were made:

1.   Knott Investments Pty Ltd trading as Avida Recreational Vehicles is to cause the undertaking of the following work in a proper and workmanlike manner on or before 31-Jul-2017:

a.   Engage a professional mould removal and remediation company to inspect, test, remove and treat all mould affected areas in the Applicant’s Avida motor home, including undertaking moisture testing and eliminating mould spores.
Inspect the main 240 volt television, to ensure that it works and repair or replace if necessary.

b.   The Applicant is granted leave to renew these proceedings of Order 1 is not complied with.

Catchwords:

CONSUMER LAW – application for refund of purchase price - alleged failure to comply with consumer guarantee under Australian Consumer Law (NSW) – acceptable quality – whether major failure – whether failure has been remedied.

Legislation Cited:

Fair Trading Act 1997 (NSW);
Australian Consumer Law (NSW);
Civil and Administrative Tribunal Act 2013 (NSW);
Civil and Administrative Tribunal Rules 2014 (NSW)

Category:

Principal judgment

Parties:

Roy Williams, (“the consumer”), (the Applicant)
Australian Motor Homes Pty Ltd, (“the supplier”), (the First Respondent)
Knott Investments Pty Ltd trading as Avida Recreational Vehicles, (“the manufacturer”). (the Second Respondent)

Representation:

The Applicant appeared in person.
The First Respondent was represented by Mr Warden.
The Second Respondent was represented by Mr Pearce

File Number(s):

MV 16/46044

Publication restriction:

Unrestricted

REASONS FOR DECISION

Application

1. On 21 October 2016, the Applicant filed an application seeking an order that the First Respondent pay him a refund of $199,990.00.

2. The matter was listed on 22 December 2016. The Second Respondent was joined as a party to the application.

3. The matter was listed on 6 March 2017 and procedural directions were made for the filing and exchange of evidentiary documents.

4. The matter was heard on 14 June 2017.

Jurisdiction

5. In accordance with the Civil and Administrative Tribunal Act 2013 and the Fair Trading Act 1987, the NSW Civil and Administrative Tribunal, (“the Tribunal”), has jurisdiction to hear and determine an application by a consumer for determination of a consumer claim. A “consumer claim” means a claim by a consumer for a remedy, including the payment of a specified sum of money, that arises from a supply of goods or services, by a supplier in the course of a business, to the consumer.

6. The Applicant, (“Mr Williams”), entered into an agreement with the First Respondent, (“Australian Motor Homes”), on 24 February 2016, for the supply of an Avida Motorhome, for a price of $199,990.00, with a trade-in allowance of $118,990.00. The motorhome was supplied to Mr Williams on 4 March 2016, in the course of Australian Motor Homes’ business. The Second Respondent, (“Avida”) is the manufacturer of the motorhome.

7. Mr Williams alleges that the motorhome is not of acceptable quality. He seeks an order that Australian Motor Homes and Avida pay him a specified sum of money, namely $199,990.00, being a refund of the purchase price.

8. The contract to which the claim relates was made in New South Wales and the goods were supplied at Bennetts Green, NSW.

9. The amount of the claim is within the monetary jurisdictional limit of the Tribunal in relation to the supply of a new motor vehicle.

10. The application was made within three years of the supply of the motorhome, as required by the Fair Trading Act 1987.

11. The Tribunal has jurisdiction to hear and determine the application.

Evidence for the Applicant

12. Mr Williams took an oath to tell the truth and presented his case.

13. The following documents were received as evidence:

1. Folder of documents filed on 12 April 2017.

2. Folder of documents filed on 2 May 2017.

3. Folder of documents filed on 30 May 2017.

4. Photograph taken on 12 June 2017.

5. Photograph taken on 13 June 2017.

6. Copy of service record dated 22 May 2017.

14. Mr Williams gave further oral evidence in support of his application.

15. Mrs Catherine Williams, the Applicant’s wife, gave sworn evidence to the Tribunal.

16. Mr Williams sought a full refund of the purchase price paid, because he believes that the problems associated with the motorhome are a major failure under the consumer law. Mr Williams submitted that water damage, black mould and electrical faults surely make the vehicle “a true lemon”.

Evidence for the First Respondent

17. Mr Warden gave sworn evidence on behalf of Australian Motor Homes.

18. Mr Warden submitted that all problems with the motorhome have been fixed.

Evidence on behalf of the Second Respondent

19. Mr Pearce and Mr Binns gave sworn evidence on behalf of Avida.

20. The following documents were received into evidence:

1. Folder of documents received on 22 May 2017.

2. Photograph showing trim under slide-out.

3. Response to Mr Williams’ evidence.

21. It was submitted on behalf of Avida that all defects with the motorhome have been repaired.

22. After viewing the photograph of the mould taken by Mr Williams on 12 June 2017, Avida offered to have the vehicle treated for mould.

THE DECISION

Background

23. On 24 February 2016, the consumer, Mr Williams, agreed to purchase goods, namely an Avida motorhome, from the supplier, Australian Motor Homes.

24. The motorhome was a “Menindee” model, built in 2014. Prior to sale, it was displayed at a number of caravan shows. The Menindee range was discontinued in July 2016.

25. The price of the motorhome was $199,990.00. Mr Williams traded in another motorhome and Australian Motor Homes gave him a trade-in allowance of $118,000.00. Mr Williams paid Australian Motor Homes the balance of $81,990.00.

26. Mr Williams took delivery of the motorhome on 4 March 2016.

27. Soon after delivery, Mr and Mrs Williams discovered two gaps in the slide-out, where water could enter the motorhome. The motorhome was returned to Australian Motor Homes and silicone sealant was applied in an attempt to rectify the problem.

28. Mr and Mrs Williams drove the motorhome to Queensland, for a holiday, on 4 July 2016.

29. On 6 July 2016, the slide-out made a cracking noise when it was put out. When Mr and Mrs Williams tried to return the slide-out, the motors would not work together in sync. Mr and Mrs Williams finally managed to get the slide-out back to the closed position.

30. On 11 July 2016, Mr and Mrs Williams contacted the Avida dealer in Townsville, to make an appointment to have the slide-out repaired. The dealer said that they were “too busy” and could not do anything until 28 July 2016.

31. When the motorhome was inspected by the Avida dealer in Townsville, Mr and Mrs Williams were advised that the slide-out motors were “out of sync” and would have to be replaced. They were further advised that, as there was no replacement stock in Australia, the motors would have to be imported from the United States. It would take at least a couple of months. Mr Williams requested the Avida dealer in Townsville to take a look at the diesel heater, because it was not warm enough. He was advised that the dealer was not allowed to touch the unit – it would have to go to an authorised Dometic dealer, and there were no qualified Dometic dealers in Queensland.

32. Mr Williams did not contact the manufacturer, Avida, at this time. The slide-out motors were, in fact, available in Australia and would have been supplied from the production line if necessary. The diesel heater is a Webasto brand, not a Dometic.

33. A serviceperson from the Avida dealer in Townsville told Mr Williams that the electrical wiring for the slide-out had been changed from the original position, indicating that there may have been prior problems with the operation of th4e slide-out. The serviceperson showed Mr and Mrs Williams how the slide-out could still be used, by pressing a switch on and off. The serviceperson advised that there was a risk that the motors could burn out, if this method was used too frequently.

34. Mr and Mrs Williams only used the slide-out once more during their Queensland holiday, whilst they were staying at Airlie Beach. Whilst they were there, Mr and Mrs Williams found the presence of black mould in the slide-out. Soon after this, mushrooms started to grow in the mould. Mr and Mrs Williams noticed that a piece of timber in this area appeared to be rotten. The manufacturer, Avida, was not contacted by Mr Williams about this problem at this time.

35. During the Queensland trip, Mr and Mrs Williams’ pet dog developed a cough and Mrs Williams suffered from flu-like symptoms. Mr and Mrs Williams believe that this occurred due to the presence of mould in the motorhome.

36. After Townsville, the drivers’ window worked one day and not the next. On two occasions, the motorhome would not change out of first gear. The gear-changing problem was fixed by turning the ignition off for ten minutes, allowing the computer to reset. The satellite navigation system worked one day and not the next. The radio froze intermittently. On one occasion, one of the stabiliser legs would not retract. After being unable to move the motorhome for two days, Mr Williams found a reset switch in the electrics. The microwave/convection oven did not work properly. It took about 15 minutes to reheat food. Mr and Mrs Williams tried to grill toast, but gave up after 20 minutes. The wine cooler did not cool the wine adequately. The decal on the bonnet needed replacing. A vertical crack appeared in the windscreen. The shower head fell to the floor whilst travelling and broke off. Mr and Mrs Williams replaced it themselves. Two of the outside storage bins would not lock. It was impossible to inflate the rear inside tyres and a tyre dealer advised Mr Williams that valve extensions would have to be manufactured. The front suspension had a rattle and a thumping noise.

37. Mr and Mrs Williams returned from their Queensland trip in late August 2016. Mr Williams contacted Australian Motor Homes and Avida and asked for a refund on the basis that the motorhome was a lemon. Avida offered to repair the motorhome under warranty, although some of the items raised by Mr Williams needed to be repaired by the vehicle manufacturer, Mercedes Benz.

38. Mr Williams took the motorhome to Avida at Emu Plains on 5 September 2016.

39. The satellite navigation system and the radio were manufactured by Go Technologies. Avida liaised with Go Technologies and Port Macquarie RV to have these items repaired.

40. The stabiliser leg could have been retracted manually, as detailed in the owner’s manual.

41. The microwave was replaced by Avida.

42. The wine cooler was inspected and found to be working within design specifications - between 5 and 20 degrees. It is a cooler, not a refrigerator.

43. Although the decal was two years old, it was replaced by Avida, as a gesture of goodwill.

44. Port Macquarie RV attended to the issue of the two storage bins not locking, at the request of Avida.

45. The tyre extension valves for the inside rear tyres were installed by Avida.

46. Avida repaired the water ingress issue by removing the slide-out room, to gain full access to the floor, the wall and the bulkhead. Avida removed and replaced the bulkhead. Avida removed and replaced water-damaged internal pieces and then refitted the slide-out room. The water ingress into the slide-out was repaired with due care and skill and in a proper and effective manner.

47. The timber trim that holds the rubber seal in place was not water damaged, in Avida’s or Australian Motor Homes’ opinion. It was painted and subsequently decoratively covered to match the slide-out surround.

48. There is a minor gap in the vertical trim between the joins in the slide-out, that is within manufacturing tolerances. Avida submitted that the gap can be sealed by Port Macquarie RV, or Australian Motor Homes, if Mr Williams chooses, at no cost to him.

49. When the motorhome was collected from Avida by Mr Williams, he found that the washing machine, the outdoor power points and the 240 Volt hot-plate on the stove did not work. This was found to be a 240 Volt lead issue. The lead was replaced by Australian Motor Homes and the problems were rectified.

50. On 11 January 2017, the motorhome was taken to the Mercedes Benz dealer in Port Macquarie for repairs. The motor in the driver’s window was replaced. The gear-changing issue was resolved. The noise in the suspension was addressed. The windscreen was replaced on a goodwill basis. Mercedes also replaced the battery. Mr Williams was informed that the battery installed in his motor home was the wrong type and may have been a cause of some of the electrical problems.

51. On 4 February 2017, Mr Williams was advised that the motorhome was repaired and could be picked up from Australian Motor Homes.

52. On 22 February 2017, Mr and Mr Williams took the motorhome to the Central Coast for a few days. The bedroom slide-out would not extend. Mr and Mrs Williams slept on the couch the first night. Australian Motor Homes sent a technician to the Central Coast and the slide-out was repaired the next day. The problem had been caused by a loose relay.

53. On 6 April 2017, Mr Williams took the motorhome to Camden Haven Auto Electrical to have the batteries and solar power system checked. Camden Haven Auto Electrical replaced the fuse holder because it had overheated and recommended that the solar batteries be replaced. The batteries were measured at 400 amps. They should measure approximately 750 amps. Avida offered to reimburse Mr Williams the $48.50 that he paid Camden Haven Auto Electrical for their labour. Avida have further offered to reimburse Mr Williams for the cost of the batteries and the fuse holder, if an invoice is supplied.

54. On 24 April 2017, Mr and Mrs Williams noticed mould in the bedroom slide-out. They took photographs and sent them to Avida. Avida suggested that Mr Williams take the motorhome back to Port Macquarie RV to have the matter addressed.

55. The motorhome was serviced by Port Macquarie RV on 22 May 2017.

56. On 12 June 2017, Mr and Mrs Williams noticed mould in the slide-out where the bulkhead had been replaced by Avida.

57. Mr Williams believes that he is entitled to a refund because of the defects in the motorhome.

Australian Consumer Law (NSW)

58. Section 54 of the Australian Consumer Law (NSW), “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 qualityif 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.

59. The Tribunal finds that the motorhome was supplied to Mr Williams in trade and commerce.

60. The Tribunal finds that Mr Williams is a consumer within the meaning of the ACL (NSW), as the goods were of a kind ordinarily acquired for personal, domestic, or household use or consumption.

61. The supply did not occur by way of sale by auction.

62. In accordance with Section 54 of the ACL (NSW), there is a guarantee that the motorhome is of acceptable quality.

Was the motorhome of acceptable quality?

63. The Tribunal finds that the motorhome supplied to Mr Williams was not free from defects, including water ingress into the slide-out.

64. The Tribunal finds that no examination that Mr Williams may have made of the motorhome on the delivery date would have revealed the defects.

65. There were no reasons as to why the motorhome may not have been of acceptable quality specifically drawn to Mr Williams’ attention before he agreed buy it.

66. There were no reasons as to why the motorhome may not have been of acceptable quality disclosed on a written notice that was displayed with the goods.

67. There is no evidence that Mr Williams caused the motorhome to become of unacceptable quality, or failed to take reasonable steps to prevent it from becoming of unacceptable quality.

68. There is no evidence that the motorhome was damaged by abnormal use.

69. The question of whether or not goods are of acceptable quality is to be determined as of the date when the goods were supplied to the consumer. However, the determination of what a reasonable consumer fully acquainted with the state and condition of the goods, (including any hidden defects of the goods,) would regard as acceptable must include a consideration of all of the relevant information available at the time of the hearing, including information about the goods that was not known at the time the goods were supplied.

70. The Tribunal has regard to the nature of the goods, the price of the goods and all other relevant circumstances, including the kind of defects, and the periods of use of the goods before the defects presented.

71. The motorhome is a luxury motorhome, purchased for a cost of $199,990.00. Many defects became apparent within the first five months after supply. The balance of the defects presented within 15 months from the date of supply. The Tribunal considers that the defect that caused water ingress into the slide-out, requiring replacement of the bulkhead, was a serious defect. Although the other defects were not as significant, the totality and cumulative effect of all of the defects is substantial and of concern.

72. Taking into account all of the circumstances of the case, the Tribunal finds that the motorhome supplied by Australian Motor Homes to Mr Williams was not of acceptable quality, because it was not free from defects, on the date it was supplied, as a reasonable consumer, fully acquainted with the state and condition of the motorhome, (including any hidden defects), would regard as acceptable. Therefore, the motorhome did not satisfy the requirements of the consumer guarantee as to acceptable quality set out in 54(2)(c) of the ACL (NSW).

Was the failure to comply with the guarantee as to acceptable quality a major failure?

73. Mr Williams submitted that, since the motorhome was supplied to him in March 2016, he has had virtually no use of it as intended. He believes that this more than qualifies as a major failure under the consumer guarantee. Mr Williams stated that he would not have bought the motorhome if he was aware of the problems at the time. He further submitted that a reasonable consumer would not have bought the motorhome if they had known about the full extent of the problems.

74. Section 259 of the ACL (NSW) relevantly provides:

(3)   If the failure to comply with the guarantee cannot be remedied or is a major failure, the consumer may:

(a) subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for rejection; or

(b) by action against the supplier, recover compensation for any reduction in the value of the goods below the price paid or payable by the consumer for the goods.

(4)   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.

75. Section 260 of the ACL (NSW) sets out the alternative tests for determining whether a failure to comply with a consumer guarantee is major:

A failure to comply with a guarantee referred to in section 259(1)(b) that applies to a supply of goods is a major failure if:

(a)   the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or

(b)   the goods depart on one or two or more significant respects:

(i)   if they were supplied by description – from that description; or

(ii)   if they were supplied by reference to a sample or demonstration model – from that sample or demonstration model; or

(c)   the goods are substantially unfit for a purpose for which goods of the same kind are commonly supplied and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or

(d)   the goods are unfit for a disclosed purpose that was made known to:

(i)   the supplier of the goods;

(ii)   or a person by whom any prior negotiations or arrangements in relation to the acquisition of the goods were conducted or made, and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or

(e)   the goods are not of acceptable quality because they are unsafe.

76. he test of whether a failure to comply with the guarantee of acceptable quality is a major failure is an objective one.

77. Shortly after delivery of the motorhome, Mr Williams noticed that water could enter the motorhome in the area of the slide-out. Silicone sealant was applied but failed to fix the problem.

78. During the Queensland trip, (between 4 July and late August 2017), the water ingress into the slide-out became apparent again, due to the presence of mould. The bulkhead of the slide-out was subsequently replaced by Avida. This repair resolved the problem.

79. The price of the motorhome was $199,990.00. It was expensive and would be expected to be of top quality.

80. Over a period of 15 months, a number of other defects became apparent, namely: the driver’s window; the gears; the satellite navigation system; the radio; the stabiliser leg; the microwave; the inside rear tyres requiring an extension valve; a noise in the suspension; a faulty 24 Volt lead; and a fuse holder for the solar power system that overheated.

81. The Tribunal has carefully considered all of the evidence and the submissions in this case.

82.  The Tribunal is not satisfied that the motorhome departed in one or more significant respects from its description.

83. The Tribunal is satisfied that there was no relevant sample or demonstration model. The motorhome that Mr Williams purchased was, in effect a demonstration model.

84. The Tribunal is not satisfied that the motorhome was substantially unfit for a purpose for which motorhomes are commonly supplied, or that it could not, within a reasonable time, be remedied to make it fit for such a purpose.

85.  The Tribunal is not satisfied that the motorhome was unfit for a disclosed purpose that was made known to Australian Motor Homes, or to a person by whom any prior negotiations or arrangements in relation to the acquisition of the motorhome were conducted or made.

86. The Tribunal is not satisfied that the motorhome was not of acceptable quality because it was unsafe.

87. Mr Williams submitted that a reasonable consumer, fully acquainted with the nature and extent of the defects, would not have acquired the motorhome and that, therefore, the failure to comply with the consumer guarantee as to acceptable quality was a major failure.

88. In “Australian Consumer Law Commentary and Materials”, (Fourth Edition), Corones and Clarke state at page 476:

“In relation to s260(a), the matters that a reasonable consumer would take into account include:

• how soon the fault developed after supply: the shorter the time the more serious the fault;

• the price of the goods: the more expensive the goods, the less acceptable is any fault;

• any representations made about the goods by the supplier or manufacturer, either orally or in the advertising or packaging;

• any other faults with the goods: a number of small faults may not be serious, but their cumulative effect may be major.”

89. The Tribunal finds that the motorhome is a luxury motorhome. It is attractive and aesthetically pleasing, one might even say that it is beautiful. It is functional. It is fit for purpose. There are no defects with the engine. Although there were a significant number of defects in the motorhome, (including water ingress into the slide-out requiring the replacement of the bulkhead), most of the defects have been repaired, with due care and skill, at no cost to Mr Williams. The Tribunal is satisfied that the remaining, non-major issues will be rectified, at no cost to Mr Williams. The motorhome has a three year manufacturer’s warranty and a five year structural warranty. Avida is prepared to fully honour these warranties.

90. Although the Tribunal is satisfied that Mr Williams would not have acquired the motorhome if he had been fully acquainted with the nature and extent of the failure to comply with the consumer guarantee as to acceptable quality at the time of delivery of the motorhome, the Tribunal is not satisfied that the motorhome would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failures.

91. The Tribunal is not satisfied that the failure to comply with the consumer guarantee of acceptable quality was a major failure.

Has Mr Williams established an entitlement to a refund from Australian Motor Homes?

92. If the failure to comply with the consumer guarantee of acceptable quality was, in fact, a major failure, Mr Williams was entitled to notify Australian Motor Homes that he rejected the motorhome and the grounds for his rejection. Mr Williams was then required to return the goods to Australian Motor Homes, in accordance with Section 263(2) of the ACL (NSW).

93. Mr and Mrs Williams returned from their Queensland holiday in late August 2016. Mr Williams contacted both Australian Motor Homes and Avida and advised them that the vehicle was a “true lemon”. Mr Williams told Australian Motor Homes and Avida that he wanted a refund of his money. Mr Warden from Australian Motor Homes and Karl Blumkaitis from Avida advised Mr Williams that he would not be getting his money back.

94. Avida offered to have the motorhome repaired, at no cost to Mr Williams.

95. On 5 September 2016, Mr Williams took the motorhome to Avida at Emu Plains on 5 September 2016.

96. Mr Williams did not return the motorhome to Australian Motor Homes when he asked for a refund, as required by the ACL (NSW). He subsequently delivered the motorhome to Avida for repairs.

97. Although Mr Williams requested a refund from Australian Motor Homes and Avida, on the grounds that the motorhome was a true lemon, his words and actions did not amount to a notification to the supplier that he rejected the goods.

98. Mr Williams asked for a refund. A refund was denied. He subsequently took his motorhome to Avida for repairs. The Tribunal finds that Mr Williams did not reject the goods in accordance with the ACL (NSW).

99. Even if the failure to comply with the consumer guarantee as to acceptable quality was a major failure, Mr Williams did not follow the correct procedure set out in the ACL (NSW), entitling him to choose the remedy of a refund of the money that he paid to Australian Motor Homes.

100. Mr Williams delivered the motorhome to Avida and allowed them to repair the motorhome. He allowed Avida the opportunity to remedy the failure to comply with guarantee as to acceptable quality.

101. The grounds required to make an order that Australian Motor Homes refund Mr Williams the purchase price of the motorhome have not been established.

Has the failure to comply with the consumer guarantee as to acceptable quality been remedied?

102. Australian Motor Homes and Avida submitted that all defects with the motorhome have been repaired and that any failure to comply with the consumer guarantee as to acceptable quality has been remedied.

103. Mr Williams raised the current issues with the motorhome at the hearing. He described the mould in the slide-out as “the big thing”. He said it was “back again”. Mrs Williams is allergic to mould and if a refund is not forthcoming, they will have to sell the motorhome, at a significant loss of $50,000.00 or more. Secondly, Mr Williams stated that the silicone used to repair a crack was not a proper repair – it was a “bodgie job”. Thirdly, there is rotten timber in the slide-out. Fourthly, the main television is still not working.

104. The Tribunal finds that the mould in the slide-out has returned. It is a consequence of the water ingress that occurred before the bulkhead for the slide-out was replaced.

105. Mr Williams provided photographs of the silicone used to fill the crack. There is no evidence that the silicone has failed, or that there is water ingress into the motorhome at this location. There is no evidence that the application of the silicone was not done with due care and skill, or in accordance with industry standards. The Tribunal is not satisfied that this item is a defect.

106. Mr Williams provided photographs of the allegedly rotten piece of timber in the slide-out. Mr Warden of Australian Motor Homes gave evidence that the piece of timber is not rotten. Avida supplied a written statement that the piece of timber is a trim that assists to hold the rubber seal in place. It is not water damaged. It was painted to be more aesthetically pleasing to the customer. It has since been decoratively covered to match the slide-out surround. There is no independent evidence concerning the piece of timber. Taking into account the evidence given on behalf of Australian Motor Homes and Avida, the evidence of Mr Williams and the photographs are insufficient to make a finding that the piece of timber is rotten or otherwise requires replacement.

107. Mr Williams gave evidence that the main television, which he described as a 12 volt television, is still not working. Mr Warden gave evidence that the television is a 240 volt television. He said that the television works, but Mr Williams does not understand how to properly use it with the inverter. Avida is willing to have the TV repaired under warranty if it is not working. The Tribunal finds that the TV should be tested and repaired or replaced, if required.

108. In delivering the motorhome to Avida for repairs, Mr Williams required Avida to remedy the failure to comply with the consumer guarantee as to acceptable quality within a reasonable time, in accordance with Section 259(2) of the ACL (NSW). In accordance with Section 261 of the ACL (NSW), where a consumer requires a supplier of goods to remedy a failure to comply with a relevant guarantee, if the failure to comply does not relate to title, the supplier of the goods may remedy the failure by repairing the goods.

109. The Tribunal is satisfied that the defects in the motorhome have been repaired. The Tribunal finds that the failure to comply with the consumer guarantee of acceptable quality has been remedied.

Has Mr Williams established an entitlement to an award of damages from Avida?

110. Section 271 of the ACL (NSW) gives a consumer four separate causes of action against a manufacturer. Section 271(1) of the ACL (NSW) provides that, if the guarantee of acceptable quality is not complied with, an affected person in relation to the goods may, by action against the manufacturer of the goods, recover damages.

111. Section 271(5) of the ACL (NSW) provides that, if the guarantee as to an express warranty is not complied with, an affected person in relation to the goods may, by action against the manufacturer of the goods, recover damages from the manufacturer.

112. Section 272(1)(a) of the ACL (NSW) provides that the amount of damages recoverable against a manufacturer of goods is the amount of the reduction in the value of the goods caused by the failure to meet the consumer guarantee. This was an action by Mr Williams for a refund. No evidence was presented as to diminution in value as a consequence of the breach of the consumer guarantee as to acceptable quality. As the defects in the motorhome have been repaired, with due care and skill, at no cost to Mr Williams, the Tribunal is not satisfied on the balance of probabilities that the grounds required to make an award of damages against Avida for reduction in of the motorhome’s value have been established.

Consequential loss and damage

113. Section 259(4) of the ACL (NSW) provides that 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 of acceptable quality, if it was reasonably foreseeable that the consumer would suffer loss or damage as a result of such a failure.

114. Section 272(1)(b) of the ACL (NSW) provides that a manufacturer can be ordered to pay damages to a consumer for any losses that were reasonably foreseeable as a result of the failure to comply with the consumer guarantee of acceptable quality.

115. Although no damages for consequential loss were sought in the application, (only a refund of the purchase price), the Tribunal finds that the presence of mould in the motorhome has been caused by ingress of water through the slide-out, due to a manufacturing defect. The cost of removal and remediation of the mould is a reasonably foreseeable loss arising from the failure to comply with the guarantee of acceptable quality.

116. The Tribunal finds that it is appropriate in all the circumstances to make an order that Avida be required to engage a professional mould removal and remediation company to remove and treat the mould in the motorhome, at its cost.

117. Although the Tribunal is not satisfied on the evidence that the main television is not working at this time, the Tribunal finds that the motorhome was supplied with an express warranty and that it is appropriate, in all the circumstances, that the television be tested, at Avida’s cost. If the television is not working, it should be repaired or replaced, at Avida’s cost.

Conclusion

118. Although the motorhome was not of acceptable quality because it had a number of defects, Mr Williams has not established the grounds required for making an order that Australian Motor Homes and/or Avida refund the monies paid for the motorhome, including the value of the trade-in.

119. The Tribunal proposes to make orders against Avida for the removal and remediation of mould and the testing and repair/replacement of the television if required.

D Moss

General Member

Civil and Administrative Tribunal of New South Wales

4 July 2017

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

Amendments

06 September 2017 - to correct case title

Decision last updated: 06 September 2017