Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Hanlon v Olibob Pty Ltd t/a Cheeky Bikes [2023] NSWCATCD 125 Hearing dates: 26 July 2023 Date of orders: 14 September 2023 Decision date: 14 September 2023 Jurisdiction: Consumer and Commercial Division Before: S Hanstein, General Member Decision: The application is dismissed. Catchwords: CONSUMER LAW — Consumer guarantees — Supply of goods and services — Guarantee as to acceptable quality — Electric mountain bike — Whether bike of acceptable quality Legislation Cited: Australian Consumer Law (NSW) Cases Cited: Nil Texts Cited: Nil Category: Principal judgment Parties: Peter Hanlon (Applicant) Olibob Pty Ltd T/A Cheeky Bikes (Respondent) Representation: Applicant in person Mr Miller (Respondent) File Number(s): GEN23/19775 Publication restriction: Nil REASONS FOR DECISION 1. This case concerns an electric mountain bike purchased by the applicant from the respondent on 15 March 2021 at a price of $7,899. 2. The applicant claims that the vehicle is not of acceptable quality within the meaning of the Australian Consumer Law (NSW) "ACL (NSW)" and seeks a refund. 3. Both parties participated in the hearing, and I have had regard to the parties' evidence and submissions in reaching my decision. Relevant law 1. Section 54 of the ACL (NSW) provides, relevantly: 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. ... (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. Applicant's case 1. The applicant's evidence and submissions included the following. 2. Since purchase, the bike has had the motor replaced three times and has also had other issues requiring repair. As a result, it is not fit for purpose, free from defects, durable or safe. 3. The applicant was never informed that the bike was not recommended for riding in mud and water. He never would have purchased it if he had been informed of that. If the bike cannot withstand riding in mud and water, then it is not fit for purpose, as it is an Enduro mountain bike. 4. He understands that consumables have to be replaced from time to time. He maintained and cleaned the bike including the external parts of the motor. It is not his job to clean inside the motor. 5. As Shimano is a large supplier of motors, no business is going to criticise their product. A lot of other consumers have had issues with the motors. Respondent's case 1. The respondent denies the claim by the applicant. The respondent's evidence and submissions included the following. 2. The motor has been replaced three times since purchase. The first motor appeared to have been damaged as a result of water and dirt ingress, which appeared to be caused by riding in extreme conditions and not properly cleaning and maintaining the bike, and perhaps having the bike impact hard surfaces. That motor was replaced in August 2021 as a goodwill gesture. 3. The second motor was replaced in September 2021 under warranty following a sensor failure. 4. Following issues by the applicant with the third motor, in November 2021, the motor was cleaned and had foreign debris removed. No fault was detected. 5. In April 2023, the third motor was replaced under good will with a second hand working motor, after internal sensors were damaged, apparently by water ingress. 6. The bike is fit for purpose and free from manufacturing defects. The issues with the bike (apart from the second motor) are due to misuse, lack of maintenance and care, and an unauthorised and damaging modification by installing a bolt through the motor. 7. The respondent recommends for all bikes not riding in mud or water, because maintaining the bike becomes more expensive. 8. The bike can be ridden in mud and water, but if one does so, then a lot more care is needed to maintain it, and the components will wear out much quicker. This includes the motor. There are seals which make the motor waterproof. These wear out if mud and water is allowed to sit on the seals, and there can be water ingress. More maintenance is required to prevent this, including pre-greasing and also removing components for cleaning. 9. The respondent has had the bike independently inspected and provided reports to the effect that the bike is functional and fit for purpose. Signs of wear were apparent which was to be expected of a bike that had done 1,886 km over 111 hours. One report noted evidence of "poor rider technique placing high load and torque on the motor and drive train". 10. The respondent has assisted the applicant as much as possible by processing warranty claims and talking with the manufacturer to approve most of them under good will. The motor was replaced once under warranty, and twice as a matter of goodwill. 11. The respondent sells many bikes with these motors with no issue. Consideration 1. I am satisfied this is a consumer claim and the Tribunal has jurisdiction to hear and determine it. 2. The onus is on the applicant to establish his claim. 3. On the evidence before me, I am not satisfied that he has established that the bike is not of acceptable quality under section 54 of the ACL (NSW), for the following reasons. 1. In essence, the applicant claims that the bike is not of acceptable quality because it has needed the motor replaced three times since purchase. The second time the motor was replaced, it was done so under warranty, and it appears that motor may have been faulty. The repair was carried out in a relatively timely manner at no cost to the applicant. In my view, it is not unusual for items such as motors to sometimes fail. I am not satisfied that having to replace the motor on this one occasion resulted in the bike not being of acceptable quality. 2. The other two faulty motors appear to have been required replacement as a result of water and/or dirt ingress. The applicant asserts that this should not have happened – that the bike should be fit for riding in mud and water. 3. If it were the case that the bike was not capable of being ridden in mud and water, then it might be not fit for purpose. However I am not satisfied on the evidence before me that it could not be ridden in mud and water. I am satisfied that the consequence of it being ridden in mud and water was that more maintenance was required and components may wear out quicker than otherwise would be the case. 4. On the evidence before me, I am not satisfied that the cause of these motor failures is due to anything other than the applicant's failure to clean and maintain the bike to the required standard for the use to which he was putting the bike. 5. The applicant asserts that many consumers have had a similar issue. Conversely, the respondent asserts it has made many sales without issue. I am not satisfied that the applicant's assertion assists his case. I am concerned with determining whether the particular bike supplied to him was of acceptable quality. 6. For completeness, I am not satisfied there were any other significant issues with the bike that would result in it not being of acceptable quality. Order 1. It follows that the application is dismissed. ********** 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 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 09 October 2023