QUEENSLAND CIVIL AND 
ADMINISTRATIVE TRIBUNAL

CITATION:	Kablar Financial Services Pty Ltd v LSH Auto (Brisbane) Pty Ltd trading as Mercedes-Benz Brisbane [2020] QCAT 346	
PARTIES:	Kablar financial Services Pty Ltd	
	(applicant)	
	v	
	LSH auto (brisbane) pty ltd trading as mercedes-benz brisbane	
	(respondent)	
APPLICATION NO/S:	MVL030-19	
MATTER TYPE:	Motor vehicle matters	
DELIVERED ON:	9 September 2020	
HEARING DATE:	3 September 2020	
HEARD AT:	Brisbane	
DECISION OF:	Member Cranwell	
ORDERS:	1.	Kablar Financial Services Pty Ltd is required to return the motor vehicle the subject of these proceedings to LSH Auto (Brisbane) Pty Ltd trading as Mercedes-Benz Brisbane within 7 days of the date of these orders.
2.	LSH Auto (Brisbane) Pty Ltd trading as Mercedes-Benz Brisbane is required to pay to Kablar Financial Services Pty Ltd the amount of $55,500 within 28 days of the date of these orders.	
CATCHWORDS:	TRADE AND COMMERCE – COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – GUARANTEES, CONDITIONS AND WARRANTIES IN CONSUMER TRANSACTIONS – GUARANTEES, CONDITIONS AND WARRANTIES – whether motor vehicle of acceptable quality – whether failure to comply with consumer guarantee a major failure – whether goods rejected during the rejection period – whether consumer entitled to refund
Australian Consumer Law, s 54, s 259, s 260, s 262, s 263
Competition and Consumer Act 2010 (Cth), Schedule 2
Fair Trading Act 1989 (Qld), s 50A
Campbell v Caravan & RV Central Pty Ltd t/as Avan New South Wales & FCA Australia Pty Ltd [2016] NSWCATCD 90
Cary Boyd v Agrison Pty Ltd [2014] VMC 23
Haisman v Drive (Aust) Pty Ltd  [2020] QCAT 44
Medtel Pty Ltd v Courtney (2003) 130 FCR 182
Morphy v Beaufort Townsville Pty Ltd [2018] VCAT 1520	
APPEARANCES & REPRESENTATION:	

Applicant:	
Self-represented	

Respondent:	
Self-represented	

REASONS FOR DECISION
[1]	On 8 October 2019, Kablar Financial Services Pty Ltd (‘the applicant’) filed an Application – Motor Vehicle Dispute with the Tribunal.  The named respondent is LSH Auto (Brisbane) Pty Ltd trading as Mercedes-Benz Brisbane (‘the respondent’).
[2]	The applicant is the owner of a 2018 Mercedes-Benz X250d (‘the motor vehicle’).  
[3]	The applicant purchased the motor vehicle from the respondent on 24 January 2019 for $55,500. 
[4]	The applicant seeks relief under the Australian Consumer Law, which is Schedule 2 to the Competition and Consumer Act 2010 (Cth).  The relief sought by the applicant is a refund plus damages.
[5]	Section 50A of the Fair Trading Act 1989 (Qld) vests the Tribunal with jurisdiction in relation to motor vehicles in respect of certain actions under the Australian Consumer Law.
[6]	Pursuant to s 3(1)(b) of the Australian Consumer Law, a person is taken to have acquired goods as a consumer if ‘the goods were of a kind ordinarily acquired for personal, domestic or household use or consumption’.  This includes the applicant’s motor vehicle.
Australian Consumer Law provisions
Guarantee of acceptable quality 
[7]	Section 54(1) of the Australian Consumer Law provides that, where a person supplies goods in trade or commerce, the goods are guaranteed to be of ‘acceptable quality’.
[8]	The time at which goods are to be of acceptable quality is the time at which the goods are supplied to the consumer: Medtel Pty Ltd v Courtney (2003) 130 FCR 182 at [64] and [70].  However, information available after the time of supply may be taken into account in deciding whether the goods were of acceptable quality at the time of supply.
[9]	Sections 54(2) and (3) of the Australian Consumer Law define acceptable quality as follows:
(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.
[10]	The Macquarie Dictionary defines the word ‘defect’ to mean ‘a fault’ or ‘imperfection’.  
[11]	The Macquarie Dictionary defines ‘durable’ as ‘having the quality of lasting or enduring of or relating to goods which will be good for some time, as opposed to those intended to be used or consumed immediately’.
[12]	In Morphy v Beaufort Townsville Pty Ltd [2018] VCAT 1520 at [72], the Victorian Civil and Administrative Tribunal stated:
[T]he context of the section clearly requires that the question of durability be determined by having regard to how long a ‘reasonable consumer’ would expect the goods to last, taking into account the price paid, the nature of the goods and the representations made about the goods.
[13]	In Campbell v Caravan & RV Central Pty Ltd t/as Avan New South Wales & FCA Australia Pty Ltd [2016] NSWCATCD 90 at [57], the New South Wales Civil and Administrative Tribunal stated:
A reasonable consumer would also be entitled to expect that such a high cost item would be durable, being capable of safe and effective use over a number of years (or at least many thousands of kilometres).
Guarantee of correspondence with description
[14]	Section 56 of the Australian Consumer Law imposes a guarantee of correspondence with description.  It relevantly provides:
(1) If:
(a) a person supplies, in trade or commerce, goods by description to a consumer; …
there is a guarantee that the goods correspond with the description.
Evidence
Hood lining colour
[15]	Alexksandar Kablar gave evidence on behalf of the applicant.  Mr Kablar stated that he had ordered a vehicle with a black hood lining.  The motor vehicle he was supplied with had a beige hood lining.
[16]	Christopher Walker and Matthew Christie gave evidence on behalf of the respondent.  Their evidence was that Mr Kablar had not ordered a black hood lining.  In support of their position, they referred me to:
(a)	the contract signed by Mr Kablar, which does not refer to a black hood lining; and
(b)	the delivery form signed by Mr Kablar, which refers to a stain on the hood lining but does not refer to the hood lining being incorrect in colour.
[17]	I find that Mr Kablar did not order a black hood lining.  In this regard, I find the delivery form signed by Mr Kablar to be persuasive.  I consider it would be highly unlikely for Mr Kablar to have noted the presence of a stain on the hood lining, but not to have noted that the hood lining was also of an incorrect colour.
[18]	Accordingly, I do not accept that the respondent failed to comply with the guarantee in s 56 of the Australian Consumer Law.  I will give no further consideration to issues relating to the colour of the hood lining. 
Other issues
[19]	Mr Kablar provided a written statement, and a number of supporting documents including service records.  Unfortunately, Mr Kablar’s statement did not contain a clear chronology of events, and many of the service records were presented in a format which was difficult to read. 
[20]	As best as I can discern from Mr Kablar’s statement and the supporting documents, the following events took place:
(a)	On 5 February 2019, Mr Kablar collected the motor vehicle.  The spare key was not working and that there was a stain on the hood lining. 
(b)	On a date recorded in the service records as 1 February 2019, but approximately two weeks after delivery according to Mr Kablar’s statement, the motor vehicle was taken for a service.  Mr Kablar complained that the tow bar wiring was missing a bolt.  The harness was replaced.  He also complained that the fuel usage did not display on the dashboard.  This was reset.  He also complained that the vehicle pulled to the left.  A wheel alignment was carried out.
(c)	On 1 April 2019, Mr Kablar took the motor vehicle for a service.  He complained of an oil leak.  The leak was located at the charge air pipe of the turbo, and this was rectified.
(d)	On 16 April 2019, Mr Kablar took the motor vehicle for a service.  He complained that an engine warning light had come on.  It was found that there was a poor wire connection to the pressure sensor, and this was rectified.
(e)	On 18 June 2019, Mr Kablar took the motor vehicle for a service.  He complained that there was a collapsed spring in the passenger seat.  The seat was swapped for one in another vehicle.
(f)	On 31 July 2019, Mr Kablar took the motor vehicle for a service.  He complained of a warning message on the dashboard.  The battery terminal was reset. 
(g)	On 2 August 2019, Mr Kablar took the motor vehicle to Mercedes-Benz Macgregor.  He complained that the automatic lights were engaging during the day.  A software upgrade was carried out.  He also complained that there was an issue with the rear sensors, and the right front seat was noisy.  The seat was replaced.
(h)	On 12 September 2019, Mr Kablar took the motor vehicle to Mercedes-Benz Macgregor.  He complained that the sunvisor was deformed.  This was replaced.  He complained that the automatic lights were engaging during the day.  The sensor was replaced.  He also complained of a vibration in the driver’s side door.  This was unable to be replicated.
(i)	On 3 October 2019, Mr Kablar took the motor vehicle to Mercedes-Benz Macgregor.  He complained that the front seat cushioning was sagging.  This was replaced.  He also complained of a rattle, but this was observed to be normal operation.
(j)	On 21 January 2020, Mr Kablar took the motor vehicle to Mercedes-Benz Macgregor.  He complained of vibration when the vehicle was travelling over 80 km/h.  A four wheel rotation and balance was carried out.  He also complained of a clunk/banging noise when the vehicle was going from first to second gear.  The complaint was confirmed and the drive train was checked. 
[21]	The respondent did not dispute this evidence, but submitted that some of these issues may have arisen from the involvement of third parties, such as Mercedes-Benz Macgregor.  No evidence was provided in support of this submission, and I do not accept the submission.
[22]	Given these issues occurred soon after the applicant purchased the motor vehicle, it is open to me to infer that the defects repaired were either present at the date of supply, or that the motor vehicle lacked durability as at the date of supply. I do so infer.
[23]	Mr Kablar gave evidence that he sought a refund on 21 June 2019, after unsuccessful attempts to contact the respondent’s dealer principal.  I accept this evidence.
[24]	Based on the evidence before me, I find that a reasonable consumer fully acquainted with the state of the motor vehicle at the time of purchase, particularly having regard to:
(a)	the presence of defects which resulted in the motor vehicle being returned to the respondent on nine occasions in the first year of the applicant’s ownership; 
(b)	the purchase price of $55,500; and
(c)	the motor vehicle being brand new,
would not regard the motor vehicle as free from defects and durable.
Remedies 
[25]	The remedy available to the consumer against the supplier depends in the first instance on whether the failure is a ‘major failure’.  That term is defined in s 260 of the Australian Consumer Law to relevantly mean:
(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 in one 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; or
(ii) 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.
[26]	It has been held that an accumulation of individually minor defects can be aggregated to amount to a major failure giving rise to a right to reject the goods.  In Cary Boyd v Agrison Pty Ltd [2014] VMC 23 at [51], the Court held that:
[D]espite the use of ‘a’, to suggest the singular, ‘a major failure’ might be constituted by a series of specific and individual defects which taken as a whole constitute one major failure.  I also agree with this interpretation of s 260 of the ACL.
[27]	The test of whether there is a major failure for the purposes of s 260 and the test for whether goods are of acceptable quality for the purposes of s 54 both adopt a ‘reasonable consumer’ benchmark.  For the reasons already given, I find the series of defects set out above, taken together, are such that a reasonable consumer fully acquainted with the nature and extent of the failure, would not have acquired the motor vehicle.  I emphasise that my finding is based on the series of defects taken together.  It may well be the case that none of the defects, individually, would in itself have amounted to a major failure.
[28]	In order to obtain a refund, the consumer is required to reject within the ‘rejection period’.  That term is defined in s 262(2) of the Australian Consumer Law to mean:
 (2) The rejection period for goods is the period from the time of the supply of the goods to the consumer within which it would be reasonable to expect the relevant failure to comply with a guarantee referred to in section 259(1)(b) to become apparent having regard to:
(a) the type of goods; and
(b) the use to which a consumer is likely to put them; and
(c) the length of time for which it is reasonable for them to be used; and
(d) the amount of use to which it is reasonable for them to be put before such a failure becomes apparent.
[29]	In Nesbit v Porter [2000] 2 NZLR 465 at [39], the New Zealand Court of Appeal held that the rejection period was one that:
…suffices to enable the consumer to become fully acquainted with the nature of the defect, which, where the cause of breakage or malfunction is not apparent, the consumer can be expected to do by taking the goods to someone, usually or preferably the supplier, for inspection.  In this context, therefore, a defect is not ‘apparent’ until its cause has been identified and the buyer knows what has to be done to fix it, and what that will cost; in other words, until the buyer is in a position to determine whether the defect is substantial.
[30]	The applicant did not delay in seeking a refund, which he did on 21 June 2019.  Indeed, the present proceedings, in which the applicant is seeking a refund, were also commenced promptly on 8 October 2019, as noted above.  In these circumstances, I am satisfied that the applicant rejected the motor vehicle within the rejection period.
[31]	In Haisman v Drive (Aust) Pty Ltd  [2020] QCAT 44 at [24], I found that the Tribunal has jurisdiction to make an order requiring the supplier to pay to the consumer a stated amount of money, namely the amount of the refund payable under s 263(4)(a).  In this case, the applicant has notified the respondent that the goods have been rejected in accordance with s 263(1) of the Australian Consumer Law.  I will give effect to the requirement in s 263(2) that the goods be returned by so ordering.  Upon the return of the motor vehicle, the applicant will be entitled to a refund pursuant to s 263(4).
Damages
[32]	The Tribunal is vested with jurisdiction in respect of actions under s 259(4) of the Australian Consumer Law, which 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.
[33]	In the application, the applicant made claims for $4,792.15 for GST paid and an unspecified amount for early loan termination bank fees.  He abandoned these claims at the hearing, and I will not consider them further. 
[34]	The applicant pressed his claim for damages in the amount of $4,018.18 for a tow bar, sports bar and tub roller cover.  In response to a question from me, Mr Kablar stated that these items were all removable from the motor vehicle.  The applicant has not provided any evidence as to the current value of the items or as to any attempts to sell the items.  The respondent is not required to pay the applicant in full for these items if the applicant is able to sell the items to offset part of his losses.  In the absence of such evidence, the applicant is not entitled to recover damages in relation to these items.
Orders
[35]	The orders of the Tribunal are:
1.	The applicant is required to return the motor vehicle the subject of these proceedings to the respondent within 7 days of the date of these orders.
2.	The respondent is required to pay to the applicant the amount of $55,500 within 28 days of the date of these orders.