Wyllie v Scapehold (Civil Disputes)
[2024] ACAT 38
•28 May 2024
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
WYLLIE v SCAPEHOLD (Civil Disputes) [2024] ACAT 38
XD 9/2024
Catchwords: CIVIL DISPUTE – sale of second-hand motor vehicle by dealer – claim for repairs to sunroof – consumer guarantee as to acceptable quality under the Australian Consumer Law – was there a defect - abnormal use by consumer or failure to take reasonable care - counterclaim for repairs - implied contract – application and counterclaim dismissed – goodwill payment to be passed onto applicant
Legislation cited: ACT Civil and Administrative Tribunal Act 2008 ss 16(j), 22
Australian Consumer Law ss 54, 259, 260
Sale of Motor Vehicles Act 1977 s 23
Cases cited:Briginshaw v Briginshaw [1938] HCA 34
Byrne & Frew v Australian Airlines Ltd [1995] HCA 24
Medtel Pty Ltd v Courtney [2003] FCAFC 151
Prestige Auto Traders Australia Pty Ltd v Bonnefin [2017] NSWSC 149
WAH v IMEX Goods Network Pty Ltd trading as IMEX Motors [2017] ACAT 54
Williams v Toyota Motor Corporation Australia Limited (Initial Trial) [2022] FCA 344
Tribunal:Member E Morrison
Date of Orders: 28 May 2024
Date of Reasons for Decision: 28 May 2024
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) XD 9/2024
BETWEEN:
DUNCAN WYLLIE
Applicant
AND:
SCAPEHOLD PTY LTD
TRADING AS GERHARDS QUALITY CARS
Respondent
TRIBUNAL:Member E Morrison
DATE:28 May 2024
ORDER
The Tribunal orders that:
The application is dismissed.
The counterclaim is dismissed.
The respondent is to pay to the applicant the sum of $829, being the amount of the goodwill payment received from the third-party warranty provider toward sunroof repairs. Payment is to be made by two weeks from the date of these orders.
………………………………..
Member E Morrison
REASONS FOR DECISION
Introduction
This matter involved an eleven year old second-hand Mercedes Benz A200 CDI hatchback (the vehicle), which the applicant purchased from the respondent on 31 January 2023.
The applicant claimed the vehicle did not meet the guarantee as to acceptable quality in section 54(1) of the Australian Consumer Law (ACL) due to a defect with the sunroof.
The applicant sought damages for the estimated cost of repair to the sunroof. In the alternative, the applicant sought a determination that the sunroof problems (when considered with other problems he identified with the vehicle) were a major failure pursuant to section 260 of the ACL and that he was entitled to reject the vehicle and obtain a full refund.[1]
[1] Pursuant to section 259(3) of the ACL
The respondent disputed these claims, and filed a counterclaim to recover the cost of repairs it performed to the vehicle’s passenger seatbelt sensor and O2 sensor.
The Tribunal’s jurisdiction to hear this civil dispute arises under sections 16(j) and 22 of the ACT Civil and Administrative Tribunal Act 2008.
The hearing
The hearing was conducted on 11 April 2024. The applicant attended in person and was self-represented. The respondent was represented by Mr Fisher and Mr Fooks who also attended in person and without legal representation.
Both parties filed documents. The applicant and the respondent’s representatives gave oral evidence and were subject to cross examination. I have reviewed and taken all of this into account. Neither party provided expert reports nor called a witness to give evidence at the hearing.
There was a significant factual dispute regarding whether the sunroof was defective at the time of sale, and if so, whether the defect caused the sunroof to become stuck in an open position on 9 February 2023. It was also disputed whether intermittent problems with the O2 sensor and the passenger seatbelt sensor ought to be characterised as defects, or fair wear and tear.
I reserved my decision.
The timeline
The applicant first saw the vehicle advertised online in January 2023.
In late January 2023, the applicant inspected the vehicle at the respondent’s dealership in Fyshwick. Mr Fisher gave him a tour of the vehicle. This included opening and closing the sunroof, which appeared to be in good working order. There was no defect notice attached to the car.
Later that day or the next day, the applicant took the car for a test drive on his own. At the hearing, he could not recall whether he opened the sunroof. This was surprising given his insistence that the sunroof was a key feature that attracted him to the vehicle. In any event, the applicant agreed he did not identify problems with the sunroof during the test drive.
On 31 January 2023, the applicant paid for the vehicle. The purchase price was $21,600. This included the sale price ($19,325), an oil and filter service, a one year extended warranty, an ACT Roadworthy Inspection, three months of registration, a transfer fee and stamp duty. The extended warranty was provided by Integrity Car Care (ICC).
The vehicle had travelled 87,774 km at the time of sale.
Between 31 January 2023 and 2 February 2023, the vehicle underwent a general service and an ACT Roadworthy Inspection. Both were coordinated by the respondent and performed by qualified mechanics.
On 2 February 2023, the applicant collected the car from the respondent’s premises.
The applicant alleged that at a later point on 2 February 2023, he developed concerns with the vehicle.
On 3 February 2023, the applicant sent an email to the respondent as follows:
Hi folks, regarding YPY03T would you please give me your thoughts/comments on the below.
· Engine light: the orange engine warning light came on yesterday after just a few kilometres. It has gone off and not come back on today. I am comfortable to monitor but would you prefer to take a look?
· Seat belt warning light/alarm: the front seat belt passenger warning light and alarm is coming on/sounding intermittently. This is solved by inserting the seat belt into the catch…
· Sunroof: I opened the sunroof fully while driving late yesterday. It made an unusual sound/thump and looked unstable. It appears to be loose or unseated at the front end. It also appears to have hit the back of the roof and has left some superficial scratches. The scratches don’t concern me but I feel it is unsafe to use in the current state. I think maybe something has broken or come unattached as you had demonstrated it operating when I was reviewing the car.
On 6 February 2023, the respondent replied via email and offered for the applicant to bring the vehicle into the dealership for inspection. At the hearing, the parties could not agree whether the respondent inspected the vehicle between 6 and 9 February 2023, however, the respondent’s email of 11 August 2023 (referred to below) suggests an inspection did occur. This is when movement or ‘play’ in the sunroof panel was first identified.
On 10 February 2023, the applicant sent another email to the respondent:
Hi folks, I cracked open the sunroof yesterday to clear leaves and check there was no water penetration following the storms on Wednesday. It will not close at all so is unsecure and open to the elements. How did you go with sourcing a fix? Can I bring the car in this morning so you can assist with getting the roof closed in the meantime?
Sadly the seatbelt warning sensor on the passenger seat has also come back on.
The applicant took the vehicle into the dealership for an inspection later that day.
On 22 February 2023, the applicant advised the respondent by email that the passenger seatbelt light and engine light had come back on.
Between 22 March 2023 and 11 August 2023, the parties exchanged emails and text messages about the sunroof, engine light and seatbelt passenger light.
The respondent determined that the engine light was related to the O2 sensor. The respondent replaced the O2 sensor in or around March 2023. The seatbelt issue took longer to diagnose due its intermittency. The respondent replaced the passenger seatbelt sensor mat on 19 June 2023.
In May 2023, the respondent submitted a warranty claim on behalf of the applicant to ICC. Claim 2 was expressed as follows:
Complaint: Sunroof not working correctly
Cause: Found rood regulator guides to have broken on both sides
Correction: Replacement of both regulators required
Quotes for parts: $1327
Labour: 8 hours @145PH/H = $1160Total Cost $2487
ICC initially rejected the claim but later paid $829 to the respondent as a ‘goodwill gesture’. This was explained in an email dated 19 July 2023 from ICC to the applicant as follows:
… a final assessment was completed for the claim lodgement of the A/C Compressor and Sunroof Regulator replacement from Gerhard’s Quality Cars for your 2012 Mercedes Benz A200 CDI with registration YPY03T.
Your claim was approved based on the maximum amount limit for the A/C compressor and a good will gesture towards the Sunroof Regulator repairs, being that the Sunroof Regulator is not a covered component/part under your warranty.
On 11 August 2023, the respondent emailed the applicant. The email stated that:
I have asked you multiple times for you to come in to discuss a resolution to this which you claim you have been too busy.
…
The email advised the O2 sensor and seatbelt sensor were not covered by warranty as they were classified as ‘wear and tear’ items, and attached an invoice for $946. The email also stated, in relation to the sunroof:
You also stated that whilst you were driving the vehicle, you fully opened the sunroof and it made a noise so we took the time to help you out to have a look at it for you. The sunroof window had play in it but was still fully operational, it opened and closed perfectly fine but just made a clunk.
You then stated in another email the after recent storms you “cracked open the sunroof to remove leaves and check for leaks” and after you doing that the sunroof was in a jammed position, we then again took the time to try to help you out by having a look at it and get it operational again for you. The sunroof still works and it is not classified as a Major Failure under Consumer Law.
…
On 21 August 2023, the applicant filed a complaint with ACT Fair Trading. A conciliation conference was scheduled for 20 December 2023 but did not proceed due to non-attendance by the respondent. The respondent referred the Tribunal to a series of emails they exchanged with ACT Fair Trading between 4 and 19 December 2923, in which alternative dates were proposed. On the papers, it appears that the respondent made an effort to engage with the process.
The application for these proceedings was filed on 4 January 2024. The response and counterclaim were filed on 3 February 2024.
The sunroof
At the hearing, the parties agreed the sunroof operates as follows:
(a)The sunroof contains a large glass panel and a shade cloth, which can be operated together or separately. The sunroof panel is held in place by tracks running alongside the panel and a front bracket. A rubber seal on the edge of the panel makes the sunroof watertight.
(b)The sunroof is operated using a switch. The switch can be pushed to tilt the panel up or pulled to slide the panel back. When the switch is pulled, the sunroof lifts approximately one inch and slides backwards over the roof.
(c)There is no mechanism that prevents the sunroof from being operated while driving, including at high speed.
The applicant gave oral evidence as follows:
(a)On 2 February 2023, while driving the vehicle, he pulled the switch to open the sunroof and heard a loud noise. The applicant surmised it was the sunroof hitting the roof at the back of the vehicle. After the loud noise, the sunroof panel looked unstable in the open position and “was probably vibrating”. The applicant stopped the vehicle and inspected the roof of the vehicle. He observed some scratches to the paintwork in the path of the tracks that run alongside the edge of the panel. The sunroof was still operating and so he closed it. No photos or other supporting evidence was provided for the hearing.
(b)Sometime between 3 February and 9 February 2023, the applicant took the vehicle to the dealership for an inspection. He alleged he was advised that the sunroof slides at the front were broken and would need to be replaced. The applicant stated he left the showroom with the impression that the concerns identified in his email of 2 February would be fixed by the respondent. The applicant asserted that his email to the respondent dated 10 February 2023 supported this claim.
(c)On 9 February 2023, the applicant inspected the sunroof for leaves and water leaks after major storms. He used the switch to open the sunroof but only held it for a short period, so it did not fully open. He then “toggled” the switch to close the sunroof, but it did not close. The sunroof opened further and became stuck in an open position. He tried to get the panel back into position, but it was “jammed”. Later that day, he took the vehicle to the respondent with the sunroof still open. No photos, videos or other supporting evidence was provided for the hearing.
(d)The applicant did not provide evidence about the inspection on 10 February, but he agreed the sunroof was tested after the panel was back in place.
The applicant claimed the sunroof had a defect, which first appeared on 2 February and that the further problem of it being stuck open on 9 February was a result of the underlying defect. He further claimed the defect meant the vehicle was not of acceptable quality as defined in section 54(2) of the ACL.
It became apparent during the hearing that the applicant’s case relied heavily on actions taken by the respondent to source new or replacement parts for the vehicle as evidence that the respondent agreed the vehicle was not of acceptable quality. In particular, the applicant relied on the ICC warranty claim lodged by the respondent as to support this claim. This is discussed below.
When I asked the applicant whether the sunroof is working now, he advised he had not tried to open or close it since it was restored into a working position on 10 February 2023. The applicant had not obtained a second opinion or independent assessment from another mechanic. This was surprising given his emphasis that the sunroof was a key feature that attracted him to the vehicle. The applicant confirmed the sunroof does not leak and appears to be secure.
The respondent’s representatives gave oral evidence as follows:
(a)They could not recall inspecting the vehicle between 3 and 9 February. Multiple cars come in and out of the workshop on any given day and the respondent does not have a system for recording cars that are brought in for a quick check.
(b)On 10 February 2023, the applicant brough the vehicle into the dealership with the sunroof panel stuck in an open position. Mr Fisher and Mr Fooks inspected the vehicle together and observed the sunroof to be in a position they had not seen before. They submitted that whereas a normal sunroof lifts approximately one inch before it retracts, in this case, the sunroof had lifted approximately two to three inches. They observed that an elbow piece on the front end of the sunroof (the front bracket), which attaches the panel to the vehicle roof, was in a hyperextended position and needed to be forced back into position. Their opinion was the ACT Roadworthy Inspection would have identified any loose or broken bracket or panel. They submitted that sunroofs are designed to be strong in one direction but not in the other, and their view was that the panel could not have ended up in the position by natural force. Rather, the position of the panel and front bracket indicated the sunroof panel had been lifted manually and/or opened at high speed.
(c)After the inspection, Mr Fooks manipulated the front bracket back into place and closed the sunroof. The sunroof was tested. It opened and closed properly and didn’t make a clunking noise.
(d)The respondent’s email of 11 August 2023 stated that the sunroof had ‘play’ in it. I enquired about this. Mr Fooks submitted that the sunroof in an eleven year old vehicle will behave differently to a new sunroof. The guides, runners and front bracket can wear with age, and this causes ‘play’ or slight movement in the sunroof panel, particularly when driving at high speed. His view was this was normal for the sunroof in a vehicle of that age and does not mean the sunroof is defective or dangerous. Mr Fooks stated that, in his experience, the guides, runners and bracket tend to wear over time rather than break.
The respondent’s position was there was no evidence that the sunroof was defective prior to 9 February 2023. Rather, the problem identified during the inspection on 10 February 2023 was caused by the applicant and there was no failure to comply with the consumer guarantee in section 54 of the ACL. The respondent further submitted that, even if there was a defect with the sunroof, it had been remedied and there was no evidence to suggest there is an ongoing concern.
The extended warranty claim for the sunroof
The vehicle purchase price included an extended aftermarket 12 month warranty from ICC. This was to provide an extended period of protection, as the vehicle was manufactured more than 10 years before the date of sale,[2] and was therefore not covered by a warranty under section 23 of the Sale of Motor Vehicles Act 1977.
[2] At the hearing, the parties agreed the vehicle had been advertised online with a manufacture date of 2013. This was the model code given by the manufacturer (not the respondent) because the vehicle was manufactured after July 2012. The applicant agreed that, at the time of sale, he knew that the vehicle was manufactured in October 2012. The October 2012 manufacture date was also provided in the section 20 notice issued by the respondent.
During the hearing, the applicant agreed the extended warranty was a contractual arrangement between himself and ICC (i.e. not the respondent), that he received a copy of the terms and conditions at or before the time of sale, and that the extended warranty did not expressly include or exclude the sunroof.
As mentioned, ICC paid $829 to the respondent towards the sunroof as a “goodwill gesture”. ICC confirmed this in an email to the applicant on 19 July 2023.
The respondent’s representatives gave oral evidence that the claim was lodged in good faith to assist the applicant and provide good customer service. They alleged it became clear that even with the sunroof repaired and in good working order, it did not meet the applicant’s expectations (due to the ‘play’) and so they started trying to find replacement parts. When they had trouble ordering parts from Germany, they started looking for a replacement sunroof.
Mr Fisher gave oral evidence as to the $849, stating that it continues to be held in the respondent’s trust account to be put towards a new front bracket. However, due to deterioration in the relationship with the applicant, he had asked (via ICC) for the applicant’s bank details so the applicant could organise the replacement parts himself. No bank details were provided.
I accept that the respondent’s actions to source new parts and lodge the warranty claim demonstrated its desire to resolve the sunroof issue. However, I do not agree this is evidence that the respondent breached the consumer guarantee in section 54(1) of the ACL.
The passenger seatbelt sensor and O2 sensor
It is clear from email correspondence filed by both parties that the engine and passenger seatbelt lights came on and off intermittently. This issue did not disable the vehicle or affect its safety or driveability.
The respondent’s representatives gave oral evidence that the engine light was related to the O2 sensor, and submitted that this often happens when a vehicle has been garaged for long periods. They claimed it did not affect the safety or driveability of the car. They stated the sensor can be reset or replaced depending on the circumstances. In this case, the O2 sensor was replaced.
The passenger seatbelt light was more difficult to diagnose and was ultimately found to be due to a problem with the sensor mat. Again, it was an intermittent problem and could be resolved by inserting the seatbelt into the holster. The applicant agreed the seatbelt worked at all times.
Has there been a breach of the consumer guarantee as to acceptable quality
The ACL is set out in Schedule 2 to the Competition and Consumer Act 2010. All goods sold in Australia are subject to the ACL when purchased from a person who supplies, in trade or commerce, goods to a consumer.
Section 54 of the ACL contains the consumer guarantee as to acceptable quality and provides:
(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.
The test for acceptable quality is found in section 54(2) of the ACL, which takes into account the matters in section 54(3). The test has been considered in several cases involving motor vehicles, and was described in WAH v IMEX Goods Network Pty Ltd trading as IMEX Motors as follows:[3]
[W]hether a reasonable consumer fully aware of the motor vehicle’s condition including any hidden defects would find it fit for all purposes that such goods are commonly supplied, acceptable in appearance and finish, free from defects, safe and durable.
[3] [2017] ACAT 54 at [47]
It is an objective test and refers to the quality of the goods at the time of supply.[4]
[4] Williams v Toyota Motor Corporation Australia Limited (Initial Trial) [2022] FCA 344 at [164-166] citing Capic v Ford Motor Company of Australia Pty Ltd [2021] FCA 715
Section 54(6) provides that goods do not fail to meet the acceptable quality test if the consumer causes the goods to be of unacceptable quality, fails to take reasonable steps to prevent them from becoming of unacceptable quality, or the goods are damaged by abnormal use.
The legal standard of proof is the balance of probabilities.[5] In this case, the Tribunal must form a reasonable satisfaction, on the evidence, that it is more likely than not that the vehicle was not of acceptable quality at the time of sale. It is the applicant’s responsibility to provide evidence to support his application.
[5] Briginshaw v Briginshaw [1938] HCA 34
In determining whether the vehicle was of an acceptable quality at the time of sale, I take into account the purchase price paid by the applicant ($19,325), the odometer reading at the time of sale (87,774km), and the age of the vehicle (11 years).
It was not disputed that the vehicle left the dealership on 2 February 2023 in working order, with the sunroof opening and closing, and the passenger seatbelt and engine lights turned off.
I am not satisfied on the balance of probabilities that the sunroof revealed a defect between 3 and 8 February 2023. A reasonable consumer would expect the sunroof in a vehicle of this age and usage to operate differently to the sunroof in a new vehicle, as the tracks and brackets show signs of normal wear and tear. In my view, this includes the ‘play’ or movement in the sunroof panel that was observed by the applicant while driving on 2 February 2023.
There is a distinct lack of evidence provided by the applicant, such as photos of scratching on the roof of the vehicle, to substantiate his claim that the panel was unstable at the front, causing it to drop at the back while opening. There is also no evidence to suggest the sunroof panel was unsafe, insecure or that it could not be used as intended. It opened and closed using the switch as it was designed to do.
I am not satisfied the sunroof panel became stuck on 9 February 2023 due to a defect. The applicant did not provide photos, an independent witness statement or other material to explain how the sunroof ended up in the final position, or whether this was unusual for vehicles of the same make, model, and age. I accept the respondent’s submission that the sunroof could not have ended up in the final position naturally without an intervening event such as manual force when it was ‘cracked’ open or being opened at high speed. I find it more likely than not that the sunroof became stuck was due to it being used in an abnormal manner and/or by the applicant failing to take reasonable steps to prevent the damage.
The parties seemed to agree the vehicle left the dealership on 10 February 2023 with the sunroof opening and closing properly, notwithstanding the applicant was unhappy with the process. Again, the applicant did not provide an independent assessment or other evidence to support his claim that the sunroof is still unable to be utilised as it is designed to do.
In relation to the passenger seatbelt sensor and O2 sensor, I also find these to be items of normal wear and tear that a reasonable consumer would expect to replace in a vehicle of this age and usage. There is no evidence to suggest these sensors caused the vehicle to become immobilised or unsafe to drive.
I find there has been no failure to comply with the consumer guarantee in section 54(1) of the ACL.
Based on these findings, I am not required to consider whether there has been a major failure for the purpose of section 259 of the ACL.
The application is dismissed.
The respondent’s counterclaim
The respondent filed a counterclaim for $946, being the cost of repairs to the passenger seatbelt sensor and the O2 sensor.
As stated, I do not find the sensors were defects to which the remedies in section 259 of the ACL apply.
The respondent’s representatives stated the repairs were not covered by the extended warranty (because they were wear and tear items), and that the respondent performed the repairs in good faith to assist the applicant. They seemed to claim the repairs were performed pursuant to an implied contract between the parties.
For an implied contract to be enforceable, there must be certainty about the agreed terms.[6] The respondent did not provide a quote or otherwise advise the applicant of the anticipated cost or that he would need to pay for the repairs. On the evidence provided, it seems the respondent was happy (at least initially) to bear the cost of the repairs as part of its good customer service. By contrast, the applicant appears to have proceeded on the assumption that the cost of repairs would be borne by the respondent.
[6] Byrne & Frew v Australian Airlines Ltd [1995] HCA 24
I find there is no certainty of contract and the counterclaim is dismissed.
The payment from ICC
Given my findings above, the appropriate outcome is for the respondent to pay to the applicant the $829 received from ICC to enable the applicant to arrange further replacement parts himself.
Orders
The Tribunal orders that:
(a)The application is dismissed.
(b)The counterclaim is dismissed.
(c)The respondent is to pay to the applicant the sum of $829, being the amount of the goodwill payment received from the third-party warranty provider toward sunroof repairs. Payment is to be made by two weeks from the date of these orders.
………………………………..
Member E Morrison
| Date(s) of hearing: | 11 April 2024 |
| Applicant: | In person |
| Respondent: | Mr Fisher, authorised representative |
| Mr Fooks, authorised representative |
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