Tribunal Awards Damages for Vehicle Not Corresponding with Description in Lewington v Manning Valley Motor Holdings Pty Ltd [2023]
In Lewington v Manning Valley Motor Holdings Pty Ltd, the NSW Civil and Administrative Tribunal (NCAT) awarded the applicant, Tania Lewington, $8,130 in damages following a breach of the statutory guarantees under the Australian Consumer Law, set out in Schedule 2 of the Competition and Consumer Act 2010 (Cth).
The Tribunal found that the vehicle supplied to Ms Lewington did not correspond with the description provided by the supplier and that this failure constituted a "major failure" under the Australian Consumer Law.
The applicant was entitled to reject the vehicle and seek compensation for her losses.
Lewington v Manning Valley Motor Holdings Pty Ltd [2023] NSWCATCD 139
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Key Takeaways
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This case reinforces the importance of compliance with statutory consumer guarantees under the Australian Consumer Law, specifically those concerning the supply of goods by description. The Tribunal determined that a discrepancy between the advertised Gross Combined Mass (GCM) of the vehicle and the actual GCM stated on the manufacturer’s compliance plate constituted a major failure. The supplier, a licensed motor dealer, was found to have breached section 56 of the Australian Consumer Law, which guarantees that goods supplied by description correspond with that description.
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The Tribunal found that a consumer is entitled to reject goods that fail to meet such a guarantee and may recover damages under section 259(4) of the Australian Consumer Law. Further, under section 263(4), a supplier is obligated to refund the purchase price where there has been a valid rejection due to a major failure.
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Factual Background
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Ms Lewington purchased a new 2023 Ssangyong Rexton Ultimate 2.2T Diesel Auto 4WD from Manning Valley Motor Holdings Pty Ltd for $61,130. Upon delivery, she observed that the GCM printed on the vehicle's identification plate (5,960kg) was significantly lower than the advertised specification of 6,440kg. This discrepancy was material to her decision in purchasing the vehicle, which she had communicated to the dealership prior to entering the contract.
Ms Lewington immediately rejected the vehicle and left it at the dealership, demanding a refund. The dealer principal referred her to the vehicle manufacturer, Ssangyong Australia, which declined responsibility. When no resolution was achieved through NSW Fair Trading, Ms Lewington filed a claim in the Tribunal. As the dealer refused to refund the purchase price, the applicant sought to mitigate her losses by privately selling the vehicle. As a result, she limited her claim to the difference between the original purchase price and the amount for which she was able to sell the vehicle.
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Findings and Legal Analysis
The Tribunal held that the vehicle was supplied by description, and the incorrect GCM amounted to a breach of the consumer guarantee under section 56 of the Australian Consumer Law. The vehicle did not correspond with its advertised description, and this misrepresentation was substantial enough to constitute a "major failure" under section 260 of the Australian Consumer Law.
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Citing the principles in Vince Taskovski v Otomobile Shoppe Pty Ltd and Smith v Origin Concepts Pty Ltd, the Tribunal found that a significant discrepancy in a key specification altered the essential character of the goods. It further rejected the supplier’s attempt to shift responsibility to the manufacturer, reiterating that liability under the Australian Consumer Law rests with the supplier who contracts with the consumer.
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The Tribunal was satisfied that Ms Lewington had acted within a reasonable rejection period and had not waived her rights by attempting to mitigate her loss through a private sale. It accepted her evidence that she was forced to sell the vehicle at a loss when the dealer refused to refund her.
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Applying section 259(4) of the Australian Consumer Law, the Tribunal awarded damages equal to the difference between the purchase price and resale value, being $8,130, finding the loss reasonably foreseeable in accordance with the principles in Hadley v Baxendale.
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Lessons for Consumers and Suppliers
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This decision underscores that businesses must ensure the accuracy of descriptions used in advertisements and product representations, especially for high-value purchases like vehicles. The Australian Consumer Law provides consumers with rights (consumer guarantees) and remedies, including the ability to reject goods and claim compensation where statutory guarantees are contravened.
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Suppliers cannot avoid liability by directing consumers to the manufacturer. Under the Australian Consumer Law, suppliers and manufacturers cannot contract out of their statutory obligations. Furthermore, any manufacturer warranty that is provided operates in addition to, and does not replace, the consumer guarantees under the Australian Consumer Law. Where goods fail to correspond with their description and the failure is not easily rectified, consumers may reject the goods and be entitled to a refund, replacement, and/or damages.
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How Arida Lawyers Can Help
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If you have purchased goods that failed to meet their description or intended purpose, Arida Lawyers can assist you. Our firm has an in-depth understanding of the intricacies of Competition and Consumer Law, and specifically, the Australian Consumer Law. We can advise you on your rights and the remedies available to you, whether you are a consumer seeking redress or a business navigating compliance.
We invite you to book a free 10-minute telephone consultation to discuss your matter with our team. Reach out today to find out how we can support you.
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This article provides general information relevant to our expert services. It is not legal advice and should not be relied upon as such. If you are seeking legal advice, you should contact us for a free initial consultation.
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