Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Vecchio v GM Holden Limited [2018] NSWCATCD 70 Hearing dates: 29 October 2018 Date of orders: 13 November 2018 Decision date: 13 November 2018 Jurisdiction: Consumer and Commercial Division Before: B Shipp, Senior Member Decision: The application is dismissed. Catchwords: Consumer Claim – Motor vehicle – Claim against manufacturer – 3 year time limitation - Jurisdiction – when does the cause of action arise Legislation Cited: Australian Consumer Law Fair Trading Act 1987 (NSW) Cases Cited: Do Carmo v Ford Excavations Pty Ltd (1984) CLR 234 Sacks v Hammoud [2016] NSWCATAP 225 Category: Principal judgment Parties: Marisa Vecchio (Applicant) GM Holden Limited (Respondent) Representation: Applicant (self-represented) David Crook (Respondent) File Number(s): MV 18/29072 Publication restriction: Nil REASONS FOR DECISION Background and Proceedings 1. The Applicant purchased a new automatic 2012 Holden Barina from the dealer Paul Wakeling Motor Group ("Paul Wakeling") in July 2012 for $21,900. She claims to have had constant problems with the vehicle since the date of purchase, which have not been effectively remedied despite being returned to the original dealer and another authorised Holden dealer since that time. The Respondent is the manufacturer of the vehicle. 2. By application in June 2018, the Applicant seeks orders to return the vehicle and obtain a full refund of the purchase price. 3. I heard the matter on 29 October 2018. The Applicant appeared in person. Evidence was also given on her behalf by Ms Matilda Lymberis and Mr Robert Crawshaw. Mr David Crook appeared on behalf of the Respondent. All parties and witnesses gave their evidence on oath. 4. The Tribunal's Consumer and Commercial division has jurisdiction in relation to matters arising under various legislation including Part 6A of the Fair Trading Act. 5. The Australian Consumer Law (ACL) was incorporated into the law of New South Wales by section 28(1) of the Fair Trading Act 1987 (NSW) ('FTA'). The ACL (NSW) consists of Schedule 2 of the Competition and Consumer Act 2010 (Cwth), and the regulations under section 139G of that Act (FTA section 27). The relevant provisions of the ACL commenced on 1 January 2011, and were therefore in force at the time the Applicant purchased the vehicle. 6. The ACL applies to create rights at law in consumers that fall within the terms of the ACL including the consumer guarantee provisions in sections 54-57 of Part 3-2 ACL. Whilst the ACL creates a cause of action at law and a range of remedies for parties, it does not of itself confer any jurisdiction on this Tribunal to hear those actions and provide those remedies. 7. The Tribunal is required to identify whether a cause of action is potentially available to the Applicant at law, and then determine whether the Tribunal has jurisdiction to consider this as a consumer claim under the FTA. Overview of Applicant's claim and potential cause of action 1. The Applicant's claim is not against the direct supplier of the vehicle (the motor vehicle dealer in this case) but against the manufacturer. Section 271 of the ACL provides that a cause of action is available to an "affected person" directly against a manufacturer for non-compliance with a relevant guarantee under the ACL. The Applicant is "an affected person" as defined in the ACL. The Applicant did not specify this as the basis of her claim. As she was unrepresented, I was required to identify any and all potential causes of action available to her. Having considered her evidence, as summarised below, I am satisfied that the only potential cause of action available to the Applicant in these proceedings is that found in S 271 of the ACL. This is because the Applicant's principal claim is that the vehicle is a "lemon". This is common parlance for what the ACL refers to a vehicle being "not of acceptable quality". Suppliers (and on occasions, manufacturers) are bound by the consumer guarantees set out in Sections 51 to 63 of the ACL. S 54 deals with the guarantee that the goods supplied by "of acceptable quality". Actions against the manufacturer of goods for breach of any of these guarantees are brought under S 271 of the ACL. My attention was not drawn to any other potential cause of action available to the Applicant against the Respondent manufacturer. Is this cause of action available to the Applicant? Time Limits for bringing action 1. S 271 of the ACL relevantly provides as follows: Action for damages against manufacturers of goods (1) If: (a) the guarantee under section 54 applies to a supply of goods to a consumer; and (b) the guarantee 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. (2) Subsection (1) does not apply if the guarantee under section 54 is not complied with only because of: (a) an act, default or omission of, or any representation made by, any person other than the manufacturer or an employee or agent of the manufacturer; or (b) a cause independent of human control that occurred after the goods left the control of the manufacturer; or (c) the fact that the price charged by the supplier was higher than the manufacturer's recommended retail price, or the average retail price, for the goods. 1. There is a statutory time limit for bringing actions under S 271. S 273 of the ACL provides that: An affected person may commence an action for damages under this Division at any time within 3 years after the day on which the affected person first became aware, or ought reasonably to have become aware, that the guarantee to which the action relates has not been complied with. (emphasis added) 1. The Applicant made her application in June 2018. To be within the time limits for a cause of action under S 271, she must have first become aware (or ought reasonably to have become aware) no later than June 2015 that the Respondent had breached its guarantee to provide her with a vehicle f acceptable quality. 2. At the start of the hearing, I raised the issue with both parties of the timing of the application. It was not clear that the parties' attention had been drawn to this issue previously. I raised this issue in the context of the Tribunal's jurisdiction under S 79L of FTA to hear the application. This is a different but closely related issue. Section 79L of the FTA provides: 79L Limitation periods (1) The Tribunal does not have jurisdiction to hear and determine a consumer claim if any of the following apply: (a) the cause of action giving rise to the claim first accrued more than 3 years before the date on which the claim is lodged, (b) the goods or services to which the claim relates were supplied (or, if made in installments, were last supplied) to the claimant more than 10 years before the date on which the claim is lodged. (2) Nothing in this section affects any period of limitation under the Limitation Act 1969. 1. The similarity of this issue to the issue to be determined under S 273 of the FTA can be observed in the discussion of the concept of when a cause of action first accrues in the decision of the Appeal Panel of this Tribunal in Sacks v Hammoud [2016] NSWCATAP 225. In that matter, the Appeal Panel of this Tribunal considered the construction to be given to an equivalent provision to section 79L which was contained in section 7 of the then Consumer Claims Act 1998 with specific attention being given to the meaning of the terms "cause of action" and "first accrues." Having reviewed the relevant authorities, the Appeal Panel concluded that the term "cause of action" refers to the elements necessary to give rise to the right of action [at 32]. It cited the comments of Wilson J in Do Carmo v Ford Excavations Pty Ltd (1984) CLR 234 [at 245]: [T]he concept of a 'cause of action' would seem to be clear. It is simply the fact or combination of facts that gives rise to a right to sue. In an action for negligence, it consists of the wrongful act or omission and the consequent damage … Knowledge of the legal implications of the known facts is not an additional fact which forms part of a cause of action. 1. At 34, the Appeal Panel applies these principles, and finds, for the purpose of s 7(4)(a) of the Consumer Claims Act, that a cause of action "first accrues" when facts which constitute the elements of the relevant cause of action crystallise or combine so that all the elements necessary to entitle a person to make a consumer claim are present. 1. I am satisfied that the parties have been provided with a proper opportunity to address this issue. The Applicant's evidence 1. The Applicant has a number of concerns about the condition of the vehicle which can be summarised as follows: 1. The vehicle is unsafe. On an intermittent but regular basis since purchase, the vehicle has lost power without warning while travelling at any speed. It does not respond to the use of the accelerator. This defect has never been permanently fixed, despite being returned to the dealer on many occasions, and work having been performed under warranty 2. There have been other faults since the vehicle was new. This includes faults with the paintwork, wipers and jets, auto transmission, excessive fuel consumption, vehicle starting on its own, non-operating windows and radio, deteriorating rear vision mirror, 2 failed gearboxes and broken engine mount. 3. The vehicle suffered damage to the front and passenger side panels while in the possession of Alan May Holden between 12 and 28 April 2017. 1. The Applicant regards the first of the above issues as by far the most serious. It is the reason she now seeks to return the vehicle and obtain a full refund. She no longer trusts the vehicle's safety and is concerned it is endangering her and others on the road. 2. In her written and oral evidence, the Applicant provided the following material evidence: 1. The vehicle has major ongoing faults. Within the first week of owning the vehicle, she called the salesman to state that the vehicle was not running properly. She told the salesman that the vehicle would not move on take-off, was losing power and that the vehicle would not move when she used the accelerator, that the vehicle jerked forward on take-off, and that oil was dripping on her foot. The salesman told her to bring in the vehicle. 2. The above was the first of many calls and visits she was required to make to the dealer and manufacturer over the next 6 years. The reports covered loss of power, failed gearbox, jerking, noise on acceleration, rough idling, excessive fuel consumption, wipers and jets not working, bumpers out of alignment, missing plugs for boot and bonnet, non-operating driver's window, radio, Bluetooth and fume smells from air conditioner. Not all of the complaints were recorded – only those which were within the service period. 3. She also complained about loss of power on 26 September 2012, and on numerous occasions in the next few months. There was a further service in June 2013 and around this time, the Applicant continued to make reports to Paul Wakeling about the loss of power and other issues such as noise during acceleration. 4. In March 2014, the Applicant again complained about loss of power and other issues. Between then and the next service in February 2015, she reported to Paul Wakeling numerous times that the vehicle was still losing power. She made similar complaints on numerous occasions after the February 2015 service 5. The staff at Paul Wakeling drove the vehicle numerous times, to test for the major loss of power fault. They informed her that they could either not detect the fault, or it had been fixed. However, the same problem continued to reoccur, even after the replacement in 2017 of 2 gearboxes. 6. In June 2015, the engine started up on its own while in her locked garage. This was checked at a scheduled service in July 2015. After this, the Applicant again reported to Paul Wakeling numerous times that the vehicle was still losing power, and a range of other less serious concerns. 7. This pattern continued through the rest of 2015, and 2016 and 2017. 8. As a result of the loss of power, the vehicle has been involved in several on-road incidents, including one collision on 29 January 2018. There were also incidents on 17 April 2017, 18 March 2018 and 26 June 2018 associated with the same loss of power issues. 9. The incident in April 2017 was particularly concerning, because the vehicle first stopped on a dangerous stretch of road where it was very difficult for other vehicles to avoid a collision. After some brief repairs the vehicle again lost power the same afternoon, again stopping at a very dangerous location. After being able to move the vehicle to a safer location, the vehicle then lost power again, and came to a stop again in a very dangerous location, and at night. The vehicle was towed to Alan May Holden. While in the custody of this repairer, the vehicle sustained damage to 2 panels. This damage has still not been repaired. 10. The gearbox has been replaced by Alan May on 2 occasions – once in April 2017 and again in July 2017. 11. In May 2018, Alan May Holden collected the vehicle for testing. A week later they advised that the vehicle had been extensively test driven and there was a faulty engine mount. However, they could not detect the loss of power fault. The following day, Holden acknowledged the vehicle had lost power and there was a fault. They replaced a faulty sensor and told the Applicant it had been fixed. 12. In June 2018, despite the assurances from Alan May, the vehicle lost power in the same way again. This was witnesses by a passenger Matilda Lymberis who gave evidence on the Applicant's behalf. 13. The vehicle is now out of warranty. 14. The regularity of the faults referred to above makes the vehicle unsafe to drive. 15. The Applicant has not had the vehicle inspected by another mechanic. She claims the Member who dealt with the matter initially informed her this would not be necessary. She noted that the faults are indicated in the Respondent's service history 1. I asked the Applicant to describe what happens during the "loss of power". She stated she will be driving the vehicle normally, sometimes at higher speeds, and the vehicle will suddenly lose acceleration, and come to a complete stop, despite the application of the accelerator. There is no pattern to when or where this will occur and does not appear to be related to the road or other conditions. 2. The Applicant confirmed she had driven the vehicle for approximately 80,000 kilometres. This was mainly city driving, until she moved to a rural area in late 2016. She indicated she had driven the vehicle very little since it was last returned to her, because she believes it is unsafe. This is why she now wants to return the vehicle. Since June 2018, the vehicle has been parked in the garage. 3. Specifically, in relation to the time taken to lodge the application, the Applicant stated she continued to be assured by the Respondent and the dealerships that the vehicle would be fixed. The dealer also indicated there was nothing she could do if they could not reproduce the fault. She was unaware of her right to lodge an application. She contacted the Motor Trader' Association who advised her to bring the matter to the attention of the Office of Fair Trading. The Office of Fair Trading suggested she make application to the Tribunal. She only delayed because the Respondent and the dealerships continued to assure her that the problem had been fixed. Evidence of Applicant's witnesses 1. Ms Matilda Lymberis identified her Affidavit of 26 June 2018 and swore that the contents were true and correct. The Affidavit contains the following material evidence: 1. She and her husband have seen the frustration the Applicant experiences when dealing with Holden to get her vehicle repaired, since she moved to Batemans Bay in late 2016. 2. The Applicant has spoken to her and her husband about the ongoing problems with the vehicle, including 2 failed gearboxes, the vehicle losing power and stopping without warning 3. The vehicle is unreliable and extremely dangerous. She was in the vehicle in March 2018 when it suddenly lost power while travelling at 100kph for no apparent reason. 4. She is aware that Holden has attempted to fix the vehicle on a number of occasions, and that Holden indicated the problems have been fixed. 5. She has been required to collect the Applicant on a number of occasions because the Applicant is not confident to drive the vehicle due to safety concerns. 6. On the day she swore the Affidavit, Ms Lymberis was a passenger in the Applicant's vehicle. It suddenly started losing power again. The Applicant was accelerating, and the vehicle was revving but not moving. The vehicle started moving again only after a number of attempts to start it. 1. Mr Robert Crawshaw identified his Affidavit of 28 June 2018 and swore that the contents were true and correct. The Affidavit contains the following material evidence: 1. He has known the Applicant for 40 years. She has told him of the problems with her vehicle including 2 failed gearboxes, the vehicle losing power and stopping without warning 2. He assisted the Applicant after she called him about 5pm stating her car had stopped in a dangerous location on 12 April 2017. She told him the vehicle without warning, and when she accelerated, the car would rev but not move. The car started again after a number of attempts, but then stopped in another dangerous spot on a bend in the highway. The Applicant called Holdenwise who arranged for the car to be towed. 3. He saw damage to the car a few days after the Applicant got it back from the first gearbox replacement. Respondent's Evidence 1. Mr Crook indicated that the Applicant had refused to allow their own engineer to inspect the vehicle, contrary to Order 2 of 30 July 2018. That order required the Applicant to provide the vehicle to the Respondent on or before 20 August 2018 to be taken to an authorised GM Holden dealer for inspection by an authorised engineer. The Respondent was to provide 48 hours' notice of the vehicle being collected from her premises and was to provide the Applicant with a courtesy vehicle during the inspection. 2. Mr Crook emailed the Applicant on 31 July to make these arrangements. The Applicant replied on the following day confirming that she gave no permission for the Respondent to carry out any work on the vehicle or take it for any other reason unless providing her with a full refund. She indicated she would only accept a full refund or a new replacement vehicle. 3. The Respondent responded on 8 August 2018 indicating that it may be necessary to replace or move a component in order to compile a full diagnosis. The Respondent also noted that: 1. it could not provide a full refund as the vehicle had been modified with the fitting of leather interior, and 2. It could not proceed to diagnose the problem as the vehicle was now out of registration and therefore could not be road-tested. The Respondent required the Applicant to register the vehicle. 1. The Applicant responded on the following day confirming that she does not give permission for Holden to carry out any work on the vehicle and/or to take it for any other purpose other than an inspection, unless Holden was to provide a full refund. She also suggested that the Member who made the orders had indicated to the Respondent that it would need to make arrangements to test it in its unregistered state. 2. The vehicle has remained with the Applicant since the first hearing date, and has not been inspected by the Respondent's engineer. 3. The major loss of power fault referred to by the Applicant has never been able to be reproduced. 4. The first major fault confirmed was with the transmission. This was replaced in April 2017 when the vehicle was 5 years old and had driven 74,000 kilometres. The Applicant's concern at this time was said to be "No drive in all gears and check engine light coming on". A 2nd transmission was replaced in July 2017 after the Applicant complained that the transmission was "surging and over revving". It is not at all clear that these issues are related to the Applicant's loss of power concerns. 5. In May 2018, the Respondent authorised Alan may to replace the sensor and to replace the engine mount. 6. The first major confirmed concern with the vehicle occurred in April 2017 when the vehicle was 5 years and had travelled about 73000 kilometres. This represents fair use of the vehicle Applicant in response 1. She has never modified the vehicle. It was sold with the leather interior, as indicated on her Contract of Sale (which she produced without objection at the hearing). This was not an after-market item. 2. She never refused to allow an inspection by the Respondent's engineer, but confirms she did not give permission for any work to be done. 3. She has not had "fair use" of the vehicle. She might have owned it for 6 years, but it has been off the road for much of that time, either with the Respondent or at her home, because she has not felt safe to drive it. 4. The Respondent's service history summary is inaccurate. It omits 2 scheduled services in September 2012 and in April 2016. Time Limit under S 273 of the ACL 1. In the light of the above evidence, I consider first whether the Applicant has brought her application within the statutory time limit in the ACL. This requires a finding that the Applicant has commenced her action for damages within 3 years after the day on which she first became aware, or ought reasonably to have become aware, that the guarantee (S 54 in this case) has not been complied with. 2. S 54 concerns whether the product – the vehicle in this case – is of acceptable quality at the time of sale. It is a matter to be considered objectively, hence the use of the terminology "reasonable consumer". The Applicant's evidence makes it clear that she first became aware of the loss of power issue within the first week of ownership. It is not reasonable to suggest that this should immediately have brought to her attention that the vehicle was not of acceptable quality. A reasonable consumer in these circumstances would have raised this significant issue with the dealership, as the Applicant did, for further investigation. There may have been a minor issue that could easily be resolved, as a result of which this new vehicle could then operate as anticipated. 3. The Applicant notes that she became frustrated because, at least in the first few years, the Respondent or the dealerships could never find this fault. She continued to assert that the vehicle was faulty through loss of power. She made these reports to the Holden dealership, both at and between the regular services. Her documents include the Respondent's own records of the services on her vehicle. They show complaints by the Respondent about this issue on 26 September 2012 (at 3669 kms), and on 20 March 2014 (at 27967kms). The Applicant claims she made numerous complaints about the same loss of power issue and other mechanical issues between the September 2012 service and the June 2013 service (at 13284 kms), between the June 2013 service and the March 2014 service, and between the March 2014 service and May 2015 service (at 36618 kms), and following this service. 4. The Applicant suggests she delayed making this application, despite the ongoing intermittent but regular recurrence of these issues for the following reasons: 1. The Respondent and the dealerships did not acknowledge the fault, or 2. The Respondent and/or the dealerships stated the faults had been fixed, and/or 3. She was unaware of her right to bring proceedings. 1. The first 2 matters cannot be regarded as a reasonable basis for delay. They were contrary to her own experience, as apparently communicated to her friends Ms Lymberis and Mr Crawshaw. On her evidence, by June 2015, she had complained to the dealers, and possibly directly to the Respondent directly, about the same loss of power issue, on possibly 20 occasions. The fact was, on the basis of this experience, the Applicant (or a reasonable consumer in the Applicant's position) must or should have been aware that this significant issue affecting the car's safety and reliability was real, and had not been adequately fixed, contrary to the claims of the Respondent or the dealerships. The issue relating to the sudden loss of power of the vehicle goes to the safety and reliability of the vehicle, and would clearly have formed a basis for asserting that the supplier and/or the manufacturer had breached the consumer guarantee of acceptable quality in S 54 of the ACL. By June 2015, the vehicle had travelled approximately 37,000km, which was more than sufficient for the Applicant to have established its overall quality. 2. The state of knowledge of the Applicant can also not form a reasonable basis for the delay. Information about her legal rights would presumably have been available with reasonable diligence. Her failure to enquire might lead to the suggestion that the vehicle faults were not as serious as she suggests. 3. The Applicant's evidence indicates that the more serious incidents associated with the loss of power (involving collisions and near collisions) did not occur until 2017 and 2018. It may be that the Respondent's response to these incidents were the last straw for her. It does not alter the fact however that there was sufficient information prior to that … crucially, prior to June 2015 … to put a reasonable consumer on notice that the vehicle was not of acceptable quality. 4. The Applicant also refers to the replacement of 2 transmissions in 2017. She suggests that this establishes that the loss of power issue was real. However, it is not at all clear or obvious that these related to the same loss of power problems that the Applicant had complained of since purchase. The reference in the service record for the first replacement in April 2017 refers to the reason being "no drive in all gears". The reason for the second in July 2017 is referred to as "transmission surging and over revving…". The Applicant's claims about this are not assisted by any independent mechanical assessment or opinion. There is no expert opinion available to establish this link. 5. For these reasons, I cannot be satisfied that the Applicant has commenced her action for damages within 3 years after the day on which she first became aware, or ought reasonably to have become aware, that the guarantee (S 54 in this case) has not been complied with. This means that the cause of action against the Respondent under S 271 of the ACL is not available to the Applicant. 6. In the absence of any other potential cause of action against the Respondent, I must dismiss the claim. I note that the Applicant's claim for damage caused to her vehicle while in the custody of the dealer cannot found a claim against the Respondent named in these proceedings. The Applicant has not named any other respondent to these proceedings. 7. It is therefore unnecessary to consider whether the Tribunal has jurisdiction under S 79L of the FTA to hear this consumer claim. If I am wrong in my application of S 273 of the ACL, I would nevertheless have found, applying the principles outlined by the Appeal Panel in Sacks v Hammoud, that the Applicant's cause of action first accrued more than 3 years prior to lodging her claim, and that the Tribunal therefore lacks jurisdiction to consider this claim. If called on to make this finding, I would rely on the same evidence as set out above in finding that: 1. The facts demonstrating breach of the guarantee to supply a vehicle of acceptable quality had crystallises or combined well before June 2015, and that 2. the alleged damage (the loss of use, and lack of safety of the vehicle) could have become known to the Applicant with reasonable diligence well before the same date [Sacks v Hammoud at 59]. ********** 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: 30 January 2019