Australia, Nov. 22 -- Supreme Court of Victoria issued text of the following judgement on Nov. 18:

1 On 1 December 2023 the Victorian Civil and Administrative Tribunal ('VCAT') determined that a used-car dealer was liable for breaching the statutory guarantee, imposed by s 54(1) of the Australian Consumer Law,[1] that a car it sold be of 'acceptable quality'. The RACV, engaged on behalf of the purchaser to inspect the car, had not identified any problems prior to purchase. The dealer does not here challenge the Tribunal's findings that the car was not of acceptable quality. The issue that arises in this proceeding is whether the Tribunal erred by asking itself the wrong question when it rejected the dealer's argument that the statutory guarantee was not engaged because the RACV's examination ought reasonably to have revealed that the car was not of acceptable quality at the time of purchase.

B. The background and evidence led

B.1 Purchase of the car and emerging problems

2 In May 2021 Ms Sabrin Al Fares, the respondent in this case, bought a 2015 Range Rover Sport Hybrid from JJ International Holdings Pty Ltd, the applicant, who traded as JJ Prestige Auto Sales in Blackburn, for $78,000. JJ Prestige Auto Sales was not an authorised Range Rover dealer.

3 Prior to purchasing the car, JJ Prestige Auto Sales had arranged for the RACV to perform a 'pre-sale inspection' of the car. Ms Al Fares accepted that, although this inspection had been arranged by JJ Prestige Auto Sales, it was made on her behalf. The RACV report said the car drove well and was 'in good overall condition' and it found no 'major faults'. It stated that there were 'no fault codes logged', and 'no visible evidence of any ... major body defects'. The report in its terms and conditions stated that the inspection did not include removal of parts and the inspection of the body condition was based on 'visual examination' of the exterior, that electrical items were 'checked for operation and performance' and that 'general wiring condition is visually examined for safety and security'. The RACV's report did not refer in terms to any inspection of the hybrid drive system, and said:

The inspection is based on external examination of components only. A Components (sic) are not dismantled to examine internal parts.

4 Problems with the Range Rover became apparent in October 2021, following which the car completely broke down in December 2021 due to a failure of its hybrid drive system. Ms Al Fares had only driven the car about 2,300km because of the lockdowns imposed throughout 2021 during the COVID pandemic.

5 Ms Al Fares spoke to JJ Prestige Auto Sales. JJ Prestige Auto Sales said, correctly, that the car was outside the three-month statutory warranty imposed by s 54 of the Motor Car Traders Act 1986 and did not accept responsibility for fixing the problem.[2] Ms Al Fares had the car towed to Berwick Land Rover. Berwick Land Rover was unsure of the cause of the failure of the hybrid drive system. It replaced a coolant pump, hoping that was the cause. That did not fix the problem. Ms Al Fares later had the car towed to Melbourne City Land Rover in Port Melbourne. In March 2022, Melbourne City Land Rover, after apologising for being 'the bearer of bad news', told her that the hybrid battery required replacement, which would involve a 9 month delay due to worldwide shortages, and the 'DC/DC converter' and the 'main generator' probably also required replacement, and that the cost of replacing those parts would exceed $80,000. Melbourne City Land Rover thought, and it seems likely, that this was due to 'saltwater ingress'.[3]

*Rest of the document and Footnotes can be viewed at: (https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSC/2024/707.html)

Disclaimer: Curated by HT Syndication.