FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Jayco Corporation Pty Ltd [2020] FCA 1672

ORDERS

THE COURT ORDERS THAT:

1.    On or before 4.00 pm on 1 December 2020, the parties are to confer and submit to the Court a joint proposal, or if they are unable to agree, separate proposals for the further conduct of this proceeding, including the determination of the questions of remedies, the costs of the proceeding, and any other orders to give effect to these reasons.

2.    A case management hearing is fixed at 10.15 am on Friday, 4 December 2020.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

WHEELAHAN J:

Part 1: Overview

1    The respondent, Jayco Corporation Pty Ltd (Jayco Corp), is a manufacturer of caravans, campervans, camper trailers, and other recreational vehicles. I will refer to all such vehicles as RVs, which was the term adopted by the parties during the course of the trial.

2    Jayco Corp manufactured RVs at its factory in Dandenong, Victoria. Jayco Corp then supplied new, manufactured RVs to Jayco dealers, which then supplied them to consumers. The supply of the RVs to consumers was the subject of statutory guarantees and rights under the Australian Consumer Law (ACL), which is Schedule 2 to the Competition and Consumer Act 2010 (Cth). There are three Jayco dealers which are relevant to the facts in issue in this proceeding: Jayco Sydney, Jayco Newcastle, and Jayco Canberra. Each of those dealers is operated by a company that is independent of Jayco Corp, and is an independent business. However, each of the dealers adopted to some extent the Jayco name and style as part of its get-up.

3    The applicant, the Australian Competition and Consumer Commission (ACCC), alleges that Jayco Corp engaged in unconscionable conduct and misleading or deceptive conduct, and made false or misleading representations to four consumers, Consumer MO, Consumer TB, Consumer JT, and Consumer RH (the Consumers) in connection with dealings by each of them with Jayco Corp in relation to claimed defects in their RVs. The ACCC’s allegations of unconscionable conduct were pleaded and maintained at the hearing by reference to the conduct of Jayco Corp in relation to the four Consumers. While there were some common components of the ACCC’s case in relation to the four Consumers, the ACCC did not allege that Jayco Corp engaged in a system of conduct, or a pattern of behaviour: cf, ACL, s 21(4)(b); Unique International College Pty Ltd v Australian Competition and Consumer Commission [2018] FCAFC 155; 266 FCR 631 at [104]; Australian Competition and Consumer Commission v Ford Motor Company of Australia Ltd [2018] FCA 703; 360 ALR 124 at [26].

4    The conduct of Jayco Corp is alleged to have arisen in connection with claims by the Consumers that the RVs acquired by them contained defects such as to entitle them to a refund of the purchase price, or replacement goods, pursuant to rights under the ACL. The supply of the RVs to each of the Consumers was the subject of a written warranty by Jayco Corp in relation to any defects in the RVs. The terms of the Jayco warranty are important. The terms were contained in a handbook that was supplied with each RV. The parties accepted that the warranty had contractual force and arose by way of a collateral contract between Jayco Corp and each of the Consumers, the consideration for which was the purchase by the consumer of an RV from a Jayco dealer. As I discuss later, the Jayco warranty was also enforceable under statute.

5    The issues in this proceeding concern the interaction between Jayco Corp’s obligations under the Jayco warranty, and the Consumers’ statutory entitlements under the ACL against the suppliers of the RVs. The ACCC alleges that in respect of each of the four Consumers, there were manufacturing defects in the RV that he or she acquired which were of a character that, under the ACL, entitled the Consumers to a refund of the purchase price or a replacement vehicle from the supplier of the RV, which in each case was a Jayco dealer. The relevant Jayco dealers are not parties to this proceeding. The ACCC alleges that Jayco Corp considered the Consumers’ claims about defects in their RVs against its obligations under the Jayco warranty rather than with full reference to the Consumers’ rights under the ACL, and thereby engaged in conduct that was unconscionable. That conduct is alleged to have involved –

(1)    refusing to exercise its discretion under the Jayco warranty to provide a replacement RV;

(2)    pressing the position that the only remedy available to the Consumers was repair; and

(3)    unfairly obstructing the Consumers from obtaining a refund or replacement RV from the Jayco dealer that sold the RV, to which they were entitled under the ACL.

6    The ACCC alleges that by its conduct, Jayco Corp caused harm to the Consumers in that they were deprived of the opportunity to obtain a refund or replacement RV, and that they suffered distress and frustration as a result of their inability to use their RVs and in failing to obtain proper redress.

7    The ACCC also alleges that Jayco Corp made false or misleading representations to the Consumers as to their entitlement to a remedy, and as to Jayco Corp’s own role in relation to the Consumers’ rights or ability to obtain a replacement RV, or a refund of the purchase price.

8    By its originating application, the ACCC seeks a range of remedies, including declarations, the imposition of pecuniary penalties under s 224 of the ACL, injunctions, a disclosure order pursuant to s 246 of the ACL, an order under s 239 of the ACL to redress loss or damage suffered by the Consumers, an order under s 246 of the ACL that Jayco Corp establish and maintain a compliance program, and finally an order under s 137H of the Competition and Consumer Act that sealed copies of the reasons for judgment and final orders in this proceeding be retained on the Court file. The ACCC’s standing to bring the proceeding was not in issue. The ACCC has standing under s 228 of the ACL to institute a proceeding for the recovery, on behalf of the Commonwealth, of a penalty under s 224. It also has standing under s 232(2) to seek an injunction. And the court may make orders under ss 239 and 246 of the ACL on the application of the ACCC.

9    By an interlocutory order in this proceeding made by Murphy J on 26 April 2018, his Honour ordered that the question of liability in this proceeding be heard separately from the question of relief. These reasons concern questions of liability only.

10    In relation to the ACCC’s case that Jayco Corp had engaged in unconscionable conduct in contravention of s 21(1) of the ACL, the ACCC submitted that it was a necessary part of its case that by reason of manufacturing defects in the RVs, each of the Consumers was entitled to reject the goods, and at his or her election to seek a refund of the purchase price, or a replacement RV. It is therefore necessary to consider in turn the circumstances of each of the four Consumers. The primary facts were, to a large degree, not in contest. The fact of, or content of some conversations was in issue, and I will identify any such conflicts, and make findings where appropriate. Although many of the primary facts were not in dispute, the conclusions, or the ultimate issues were fundamentally in dispute. The main issues to be resolved are as follows –

(1)    Did the RVs have manufacturing defects that led to a failure to comply with a statutory guarantee that was to be characterised as a “major failure” for the purposes of the ACL?

(2)    In consequence, were the Consumers entitled to reject the RVs and obtain a refund or a replacement RV?

(3)    Were the representations alleged by the ACCC made, and if so were they misleading or deceptive, or likely to mislead or deceive, or did they otherwise constitute false or misleading representations made in contravention of the ACL?

(4)    Was Jayco Corp’s conduct, in relation to the claims made by the four Consumers, to be characterised as unconscionable for the purposes of s 21(1) of the ACL?

Part 2: Summary of conclusions

11    For the reasons that follow, I have concluded that –

(1)    three of the four RVs in question had manufacturing defects that resulted in a major failure to comply with a statutory guarantee;

(2)    three of the four Consumers were entitled to reject their RV, and to obtain a refund or a replacement RV from the supplier, being the selling dealer;

(3)    one representation made by an employee of Jayco Corp to one of the Consumers was made in contravention of ss 18 and 29(1)(m) of the ACL because it was misleading or deceptive, or likely to mislead or deceive, and was false or misleading; and

(4)    otherwise, Jayco Corp’s conduct in relation to the claims made by the four Consumers was not to be characterised as unconscionable for the purposes of s 21(1) of the ACL.

Part 3: The Australian Consumer Law (ACL)

12    The full statutory context in which the ACCC alleges that Jayco Corp engaged in contravening conduct is significant. It is necessary to have regard to the legislative context, in broad outline, before referring to the relevant provisions in more detail.

Broad outline

13    Prior to 1 January 2011, the Trade Practices Act 1974 (Cth) implied into certain consumer contracts for the sale of goods mandatory terms relating to merchantable quality and fitness for purpose. Those implied terms had their genesis in the Sale of Goods Act 1893 (UK), but in many respects were developed by the Trade Practices Act beyond their 19th century origins. A claim for breach of those terms was a claim in contract: Austral Pacific Group Ltd v Airservices Australia [2000] HCA 39; 203 CLR 136 at [8]-[9] (Gleeson CJ, Gummow and Hayne JJ). In addition, the Trade Practices Act created a direct statutory liability in a manufacturer to compensate a consumer for loss and damage in respect of goods supplied by the manufacturer for the purposes of re-supply, which were supplied to a consumer and which were not fit for purpose, or not of merchantable quality: Trade Practices Act, s 74A to s 74G (now repealed); and see, Merck Sharp & Dohme (Australia) Pty Ltd v Peterson [2011] FCAFC 128; 196 FCR 145 at [169]-[182].

14    The ACL was introduced as Schedule 2 of the renamed Competition and Consumer Act by the Trade Practices Amendment (Australian Consumer Law) Act (No 2) 2010 (Cth), and commenced on 1 January 2011. The ACL re-enacted several provisions of the Trade Practices Act, and introduced new provisions, such as those providing for consumer guarantees. The consumer guarantee provisions of the ACL are couched in terms that are broadly similar to the Consumer Guarantees Act 1993 (NZ): see the explanatory memorandum to the Trade Practices Amendment (Australian Consumer Law) Bill (No 2) 2010 (Cth) at [7.9]. In turn, elements of the New Zealand legislation appear to have been inspired by the Consumer Products Warranties Act 1978 (Sask), and the Sale of Goods Act 1979 (UK), as then in force.

15    Under the ACL, the rights of a consumer against a supplier of goods or services no longer rest solely upon contract. Rather, the consumer guarantees under the ACL and the remedies for breach of those guarantees arise by force of the statute. The ACL provides for remedies against the supplier and the manufacturer of goods where the statutory guarantees are not complied with. Relevant to the present case are the following guarantees –

(1)    a guarantee that the goods will be of acceptable quality [s 54];

(2)    a guarantee that the goods will be fit for purpose [s 55]; and

(3)    a guarantee that the manufacturer of the goods will comply with any express warranty given by the manufacturer [s 59].

16    At a general level, and without being exhaustive, in respect of the consumer guarantees the ACL provides for the following remedies against a supplier of goods, against a manufacturer of goods, and as between a supplier of goods and a manufacturer.

17    In relation to a supplier –

(1)    a supplier of goods is liable to a consumer to remedy any failure of the goods to comply with the statutory guarantees of acceptable quality and fitness for purpose, and for damages for any foreseeable loss as a result of the failure [ss 259(2) and (4), 261]; and

(2)    where a failure is a “major failure”, or a failure cannot be remedied, the consumer is entitled as against the supplier to reject the goods, and is entitled at the consumer’s election to replacement goods, or to a refund of the purchase price [ss 259(3), 263(4)].

18    In relation to a manufacturer –

(1)    a manufacturer is liable in damages to an “affected person” where the goods fail to comply with the statutory guarantee of acceptable quality [s 271(1)];

(2)    a manufacturer has no direct liability under the ACL itself to repair or replace goods that do not comply with the statutory guarantee of acceptable quality; and

(3)    a manufacturer is liable in damages to an “affected person” for a failure to comply with the statutory guarantee that the manufacturer will comply with any express warranty given by it [s 271(5) and (6)].

19    As between a manufacturer of goods and a supplier, a manufacturer is liable to indemnify a supplier if the supplier is liable to pay damages to a consumer for loss or damage and the manufacturer is or would be liable to pay damages to the consumer for the same loss or damage, and also if the supplier incurs costs because of its liability for failure to comply with the statutory guarantee of acceptable quality, or of fitness for certain disclosed purposes, or of correspondence with certain descriptions [s 274(1) and (2)].

20    Separate from the consumer guarantees and the remedies flowing from any failure to comply with those guarantees, the ACL also includes more general prohibitions on engaging in proscribed conduct in trade or commerce. Section 18(1) prohibits a person from engaging in conduct that is misleading or deceptive, or is likely to mislead or deceive. Section 29(1) prohibits a person from making false or misleading representations about goods or services. Relevant to this proceeding, sub-section 29(1)(m) prohibits the making of such representations concerning the existence, exclusion, or effect of any condition, warranty, guarantee, right or remedy, including the statutory consumer guarantees. And section 21(1) prohibits a person from engaging in conduct in connection with goods or services that is, in all the circumstances, unconscionable. I will return to consider these more general prohibitions.

21    In considering the application of those provisions outlined above to the present proceeding, it is helpful to note that, for the purposes of those provisions –

(1)    the RVs acquired by the Consumers were goods of a kind ordinarily acquired for personal, domestic or household use or consumption;

(2)    accordingly, each of the Consumers was a “consumer” within the meaning of that term in s 3 of the ACL;

(3)    in the case of each of the four RVs, a Jayco dealer was the “supplier” of the goods; and

(4)    Jayco Corp was the manufacturer of the goods.

Statutory guarantees

22    The statutory guarantees under Part 3-2, Division 1 of the ACL apply where a person in trade or commerce supplies particular goods to a consumer other than by sale by auction. A supplier of goods has a meaning that corresponds to the defined term supply, which includes in relation to goods, the supply (including re-supply) by way of sale, exchange, lease, hire or hire-purchase: s 2. A person acquires goods as a consumer if, inter alia, the goods are of a kind ordinarily acquired for personal, domestic or household use or consumption: s 3(1)(b). It was not in dispute in this proceeding that each sale of an RV by the Jayco dealers to the four Consumers was a supply of goods to that consumer in trade or commerce.

Acceptable quality

23    Section 54 of the ACL provides for a guarantee that the goods are of acceptable quality. The meaning of “acceptable quality” is given content by s 54(2), (3), and (6) –

(2)    Goods are of acceptable quality if they are as:

(a)    fit for all 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.

24    One must be cautious about comparing the extent to which the standard of acceptable quality under the ACL compares to the standard of merchantable quality under earlier or cognate legislation. The standards are differently expressed, and attention must be given to the text of the ACL having regard to its context and purpose. References to other legislation, and judicial formulations that are explanatory of other legislation, are liable to mask the nature of that task: Shi v Migration Agents Registration Authority [2008] HCA 31; 235 CLR 286 at [92] (Hayne and Heydon JJ); Ogden Industries Pty Ltd v Lucas [1970] AC 113 at 127 (PC); (1968) 118 CLR 32 at 39.

25    Section 54 provides for a common standard of acceptable quality which goods are required to reach. It is necessary that goods have all the qualities referred to in s 54(2) in order to comply with the statutory standard: Vautin v By Winddown Inc (formerly Bertram Yachts) (No 4) [2018] FCA 426; 362 ALR 702 (Vautin) at [142] and [144] (Derrington J). The standards under s 54(2) include that goods will be fit for all purposes for which goods of that kind are commonly supplied. This general standard of fitness for purpose is not dependent upon the consumer communicating any intended purpose to the supplier, or relying upon the supplier’s skill or judgment. And, in relation to the general standard, it does not suffice that the goods will be fit for only some of those purposes.

26    The standard of acceptable quality in s 54(2) has as its reference point a construct, namely the objective standard of a reasonable consumer fully acquainted with the state and condition of the goods, including any hidden defects of the goods. The reasonable consumer sits with an array of other hypothetical persons who have been recruited by the law and by reference to whom objective standards are evaluated: see, Healthcare at Home Ltd v The Common Services Agency [2014] UKSC 49; 4 All ER 210 at [1]-[4] (Lord Reed JSC). Such a person has been described as an anthropomorphic conception of justice that is and must be the court itself: see Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696 at 728 (Lord Radcliffe).

27    The hypothetical question whether the reasonable consumer would have regarded the quality of the goods as acceptable is to be determined at the time of supply. However, the reference in s 54(2) to hidden defects has the consequence that for the purposes of determining that question, the reasonable consumer may be acquainted with information known at the time of trial: cf, Medtel Pty Ltd v Courtney [2003] FCAFC 151; 130 FCR 182 at [70] (Branson J, Jacobson J agreeing). The standard of acceptable quality prescribed by s 54(2) is not absolute, or a standard of perfection. It is tempered by what a reasonable consumer would regard as acceptable having regard to the several matters in s 54(3). These matters render the standard of acceptable quality elastic, and context specific: Contact Energy Ltd v Jones [2009] 2 NZLR 830 at [95] (Miller J). The significance of the components of the guarantee of acceptable quality will therefore vary with the circumstances of each case.

Fitness for purpose

28    Section 55 of the ACL provides for a guarantee that the goods are reasonably fit for any disclosed purpose, or for any purpose for which the supplier represents that they are reasonably fit. The meaning of “disclosed purpose” is the subject of s 55(2) –

(2)    A disclosed purpose is a particular purpose (whether or not that purpose is a purpose for which the goods are commonly supplied) for which the goods are being acquired by the consumer and that:

(a)    the consumer makes known, expressly or by implication, to:

(i)    the supplier;

(ii)    a person by whom any prior negotiations or arrangements in relation to the acquisition of the goods were conducted or made; or

(b)    the consumer makes known to the manufacturer of the goods either directly or through the supplier or the person referred to in paragraph (a)(ii).

29    There is some conceptual overlap between the statutory guarantees in s 54(1) and s 55(1) to the extent that any disclosed purposes or represented purposes that engage s 55(1) may also amount to common purposes for the objective standard of acceptable quality under s 54(2)(a): see, Jewson Ltd v Boyhan [2003] EWCA Civ 1030; [2004] 1 Lloyd’s Rep 505 at [68], [71] (Clarke LJ), and at [77] (Sedley LJ).

Express warranties

30    In relation to express warranties, s 59(1) of the ACL provides for a statutory guarantee that the manufacturer of the goods will comply with any express warranty given or made by the manufacturer in relation to the goods, and s 59(2) provides that the supplier of the goods will comply with any express warranty given or made by the supplier in relation to the goods. The term “manufacturer” is given an extended meaning by s 7 of the ACL, but that is not in issue in this proceeding because Jayco Corp was the manufacturer of the four RVs in the ordinary sense of that term.

31    Section 102 of the ACL authorises the prescription by regulation of requirements relating to the form and content of non-statutory warranties against defects, and mandates compliance with those requirements. A warranty against defects is defined by s 102(3) of the ACL as follows –

(3)    A warranty against defects is a representation communicated to a consumer in connection with the supply of goods or services, at or about the time of supply, to the effect that a person will (unconditionally or on specified conditions):

(a)    repair or replace the goods or part of them; or

(b)    provide again or rectify the services or part of them; or

(c)    wholly or partly recompense the consumer;

if the goods or services or part of them are defective, and includes any document by which such a representation is evidenced.

32    In turn, reg 90 of the Competition and Consumer Regulations 2010 (Cth) prescribes requirements including that particular text must be included in a warranty against defects. During the period relevant to this proceeding, reg 90 was in the following terms –

90    Requirements for warranties against defects

(1)    For subsection 102(1) of the Australian Consumer Law, the following requirements are prescribed:

(a)    a warranty against defects must be in a document that is transparent;

(b)    a warranty against defects must concisely state:

(i)    what the person who gives the warranty must do so that the warranty may be honoured; and

(ii)    what the consumer must do to entitle the consumer to claim the warranty;

(c)    a warranty against defects must include the text mentioned in subregulation (2);

…

(h)    a warranty against defects must state that the benefits to the consumer given by the warranty are in addition to other rights and remedies of the consumer under a law in relation to the goods or services to which the warranty relates.

(2)    For paragraph (1)(c), the text is ‘Our goods come with guarantees that cannot be excluded under the Australian Consumer Law. You are entitled to a replacement or refund for a major failure and compensation for any other reasonably foreseeable loss or damage. You are also entitled to have the goods repaired or replaced if the goods fail to be of acceptable quality and the failure does not amount to a major failure’.

…

33    Sections 64 and 64A of the ACL have the effect that the consumer guarantees cannot be excluded, restricted, or modified by contract, and in the case of goods of a kind ordinarily acquired for personal, domestic, or household use, liability cannot be limited.

A consumer’s remedies against a supplier

34    The remedies available to a consumer for failure to comply with the statutory guarantees are provided for by Part 5-4 of the ACL. Under Division 1 of that Part, a consumer has remedies against the supplier of the goods.

35    A supplier is liable to a consumer to remedy a failure to comply with a guarantee of acceptable quality or fitness for purpose within a reasonable time, or for compensation where the supplier refuses or fails to comply with the requirement to remedy the failure. If the failure to comply with the guarantee cannot be remedied, or is a major failure, the consumer may reject the goods. If the consumer rejects the goods, the supplier must, in accordance with an election made by the consumer, refund any money paid by the consumer for the goods, or replace the rejected goods with goods of the same type and of similar value, if such goods are reasonably available to the supplier. Section 259 of the ACL provides –

259    Action against suppliers of goods

(1)    A consumer may take action under this section if:

(a)    a person (the supplier) supplies, in trade or commerce, goods to the consumer; and

(b)    a guarantee that applies to the supply under Subdivision A of Division 1 of Part 3-2 (other than sections 58 and 59(1)) is not complied with.

(2)    If the failure to comply with the guarantee can be remedied and is not a major failure:

(a)    the consumer may require the supplier to remedy the failure within a reasonable time; or

(b)    if such a requirement is made of the supplier but the supplier refuses or fails to comply with the requirement within a reasonable time – the consumer may:

(i)    otherwise have the failure remedied and, by action against the supplier, recover all reasonable costs incurred by the consumer in having the failure so remedied; or

(ii)    subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection.

(3)    If the failure to comply with the guarantee cannot be remedied or is a major failure, the consumer may:

(a)    subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection; or

(b)    by the action against the supplier, recover compensation for any reduction in the value of the goods below the price paid or payable by the consumer for the goods.

(4)    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.

(5)    Subsection (4) does not apply if the failure to comply with the guarantee occurred only because of a cause independent of human control that occurred after the goods left the control of the supplier.

(6)    To avoid doubt, subsection (4) applies in addition to subsections (2) and (3).

(7)    The consumer may take action under this section whether or not the goods are in their original packaging.

36    The conditions in s 259(3) that engage the entitlement of a consumer to reject the goods are a failure to comply with a guarantee that cannot be remedied, or a major failure to comply with a guarantee. In relation to what constitutes a major failure to comply with a guarantee, s 260 of the ACL provides –

260    When a failure to comply with a guarantee is a major failure

A failure to comply with a guarantee referred to in section 259(1)(b) that applies to a supply of goods is a major failure if:

(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 of 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.

37    Section 260(a), which is set out above, also recruits the hypothetical reasonable consumer as a reference point for the objective standard that is established by the provision. The statutory construct of the reasonable consumer in this context no doubt draws upon principles that were developed around the condition of merchantable quality implied by sale of goods legislation. In George Wills & Co Ltd v Davids Pty Ltd [1957] HCA 6; 98 CLR 77, the Court approved a statement in the 8th edition (1950) of Benjamin on Sale that goods are said to be of merchantable quality “if they are of such a quality and in such a condition that a reasonable man, acting reasonably, would, after a full examination, accept them under the circumstances of the case in performance of his offer to buy them, whether he buys them for his own use or to sell again”. The focus of the ACL, as reflected in its language, is upon the expectations and rights of consumers rather than of merchants engaged in commercial trade: compare the reference to “commercially saleable” as a synonym for “merchantable quality” in Hardwick Game Farm v Suffolk Agricultural Poultry Producers Association [1969] 2 AC 31 at 75 (Lord Reid), and see the observations of Cooper J in Rasell v Cavalier Marketing (Australia) Pty Ltd [1991] 2 Qd R 323 at 348, citing Rogers v Parish (Scarborough) Ltd [1987] QB 933.

38    The text of s 260(a) of the ACL directs attention to the question whether the goods would not have been acquired by the reasonable consumer, fully acquainted with the nature and extent of the failure, and not to the different question whether an individual consumer acted reasonably in rejecting the goods. In my view, for the purposes of evaluating whether a failure is a major failure for the purposes of s 260(a), a reasonable consumer who purchases an RV is to be taken to have some degree of tolerance for certain types of failure. This is owing to at least three features.

39    First, the legislation assumes that not every failure to comply with a guarantee will be a major failure. Section 259(2) of the ACL expressly contemplates that some failures to comply with statutory guarantees can be remedied within a reasonable time. Further, s 260(a) requires that consideration be given to the nature and extent of the failure in determining whether the reasonable consumer would not have acquired the goods, thereby indicating that the mere existence of any failure is not sufficient. Section 260(c) contemplates that goods that are substantially unfit for a common purpose might easily, and within a reasonable time, be remedied so as to make them fit for purpose, in which case there is no major failure on account of unfitness for a common purpose. Likewise, s 260(d), which relates to unfitness for a disclosed purpose, also contemplates that the goods might be remedied easily, and within a reasonable time, so as to make them fit for purpose.

40    Second, the nature of the goods is relevant. RVs, like many substantial consumer items such as motor vehicles, yachts, and even bicycles, are manufactured from a range of component parts, many of which may be capable of easy replacement or repair in the event of some fault. Some of the accessories, such as air conditioning units, televisions, or microwave ovens, may be manufactured by specialist suppliers of electrical appliances, and installed in the RV by the manufacturer or the supplier of the RV. Many of the component parts are designed for mechanical movement. RVs are intended to be towed. The process of towing will subject the RVs to stresses and flex. RVs will necessarily be exposed to weather. They are designed to be lived in, and otherwise to be used. Lids will be raised, and lowered. Doors will be opened, and shut. Drawers will be pulled out, and pushed in. RVs will be used by families with children, who sometimes lack fine motor skills when handling equipment. Surfaces may become scratched or chipped though normal use. An appliance installed in an RV, if found to be faulty, might be able to be easily repaired or replaced by a specialist supplier. Fuses may blow. Sometimes, just as in a household, the cause of an isolated occurrence of a blown fuse may not be apparent. Screws might have to be tightened. Doors might have to be straightened. These things are inherent in the nature of the goods. The reasonable consumer will tolerate some faults or breakages, and some need for adjustments of this type that are exposed by a period of initial use. The reasonable consumer will purchase an RV accepting that there is a reasonable prospect that some components of the RV may have to be adjusted, repaired, or replaced within a manufacturer’s warranty period. Putatively, if a reasonable consumer was fully acquainted with the nature and extent of a failure to comply with a statutory guarantee at the time of purchase, the reasonable consumer might nonetheless proceed with the purchase on the basis that the supplier, or the manufacturer, will remedy the failure within a reasonable time. On the other hand, it does not follow that merely because a failure to comply with a statutory guarantee is capable of being remedied, that a reasonable consumer fully acquainted with the nature and extent of the failure would acquire the goods. Whether that is so will depend upon the circumstances of each case.

41    Third, the reasonable consumer will accept that the process of production of certain complex goods, such as RVs, can never be perfect. As I have mentioned, the Jayco RVs were subject to a manufacturer’s warranty which had as an assumption that the RVs might suffer from some teething problems or defects from time to time for which the manufacturer would assume responsibility for repair. The Jayco handbook that was supplied with the RVs gave this advice to purchasers in its introduction –

We recommend that you check your RV carefully as soon after you take delivery as you can ensuring that all items are working as they should and reporting any problems to your dealer for early rectification.

42    The introduction went on to state –

Your first Service (1000kms or 3 months) after an initial running-in period is an ideal time for any minor adjustments to components to be made and for your Jayco dealer to answer any questions you may have.

43    It is not to be suggested that the existence of a manufacturer’s warranty should operate to diminish the expectations of the reasonable consumer when it comes to questions of acceptable quality: Rogers v Parish (Scarborough) Ltd [1987] QB 933 at 945 (Mustill LJ). In particular, generally, a manufacturer’s warranty should have no bearing on the question whether the goods comply with the statutory guarantee of acceptable quality. Rather, for the purposes of s 260(a) of the ACL, and evaluating whether a reasonable consumer would have acquired the goods, the existence and terms of the manufacturer’s warranty are consistent with the reasonable consumer accepting that some complex goods might suffer some minor defects, expecting that they will be repaired under warranty, or in the exercise of remedies available under the ACL. As I have said, whether that is so in a particular case will depend upon the nature of the defect, and other circumstances. In those cases that are not clear-cut, the resolution of the issue will turn upon questions of fact, degree, and value judgment.

44    Section 261 of the ACL provides for the ways in which a supplier may remedy a failure to comply with a consumer guarantee –

261    How suppliers may remedy a failure to comply with a guarantee

If, under section 259(2)(a), a consumer requires a supplier of goods to remedy a failure to comply with a guarantee referred to in section 259(1)(b), the supplier may comply with the requirement:

(a)    if the failure relates to title – by curing any defect in title; or

(b)    if the failure does not relate to title – by repairing the goods; or

(c)    by replacing the goods with goods of an identical type; or

(d)    by refunding:

(i)    any money paid by the consumer for the goods; and

(ii)    an amount that is equal to the value of any other consideration provided by the consumer for the goods.

45    Section 262 of the ACL qualifies the entitlement of a consumer to reject goods, including by providing for a rejection period –

262    When consumers are not entitled to reject goods

(1)    A consumer is not entitled, under section 259, to notify a supplier of goods that the consumer rejects the goods if:

(a)    the rejection period for the goods has ended; or

(b)    the goods have been lost, destroyed or disposed of by the consumer; or

(c)    the goods were damaged after being delivered to the consumer for reasons not related to their state or condition at the time of supply; or

(d)    the goods have been attached to, or incorporated in, any real or personal property and they cannot be detached or isolated without damaging them.

(2)    The rejection period for goods is the period from which 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.

46    As set out above in s 262(2), the rejection period 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 become apparent. This is a reference to the failure to comply with the statutory guarantee becoming apparent, rather than any underlying defect becoming apparent, which may occur at an earlier point in time. In Nesbit v Porter [2000] NZCA 288; 2 NZLR 465 at [40], the New Zealand Court of Appeal explained in relation to the corresponding New Zealand provision –

In some instances the defect will be of a kind where it may be obvious that something is wrong with the goods but the supplier or someone else to whom the consumer turns for help may be in doubt about the exact nature of the problem and thus about how serious it is. For example, the operation of a motor vehicle may be affected by the failure of a small and comparatively obscure part, say, a waver spring in an automatic transmission; until the transmission is dismantled a mechanic cannot be sure what the defect is. Or the cause of malfunction, particularly one which occurs intermittently, may be hard to detect even upon inspection. It may be necessary to carry out a series of tests or even to wait and see what, if anything, develops. Or the repairer may think the fault has been identified and that the correct repair or adjustment has been made but this view may prove to be wrong and the problem may manifest itself again. … In all such cases, a reasonable period will not elapse before the consumer has had the opportunity to become properly informed about the nature of the defect and has also had a little time then to consider an appropriate decision, whether or not to reject the goods. It almost goes without saying that the period will be correspondingly longer where the supplier has taken steps which effectively conceal a defect or has withheld relevant information.

47    The Court in Nesbit v Porter at [41] went on to refer to the practical utility to a consumer of the right of rejection as informing what is a reasonable period within which to exercise a right to reject goods –

In considering what is a reasonable period in a particular case it is necessary also to bear in mind the practical utility to a consumer of the right of rejection given by s 18 of the [Consumer Guarantees Act 1993 (NZ)]. Ms Nield submitted persuasively that, although a right to damages survives the loss of the right to reject, in pursuing it the consumer may face substantial litigation costs where the claim is for a sum exceeding the jurisdiction of the Disputes Tribunal (now $7500, or $12,000 by agreement of both parties). Replacement (under s 19(1)(b)) or repair by or at the cost of the supplier or rejection of the goods, where that is available in terms of s 18, are more “user-friendly” solutions to a consumer’s problem with goods, although of course it may still prove to be necessary to litigate in order to recover all or part of the price.

48    I pause to observe that the practical and useful remedy of the right of rejection of the goods given by the ACL will in most cases be exercisable only against the supplier, and not against a manufacturer if the manufacturer did not supply the goods to the consumer.

49    In relation to the time within which it would be reasonable to expect the failure to become apparent, I respectfully agree with Derrington J in Vautin at [265], where his Honour stated that –

… the section requires a sufficiently high level of certainty in relation to the knowledge of the relevant failure including its nature and extent and what it will cost to remediate it. If the level of knowledge required is as identified above, it follows that if there exists doubt about the consequences of a defect in an item and, therefore, the cost of repairing it, the failure of the statutory guarantee has not become apparent.

50    Section 263 of the ACL provides for the consequences of the rejection of goods by a consumer, which include the capacity for the consumer to elect whether the supplier should replace the goods, or refund the purchase price –

263    Consequences of rejecting goods

(1)    This section applies if, under section 259, a consumer notifies a supplier of goods that the consumer rejects the goods.

(2)    The consumer must return the goods to the supplier unless:

(a)    the goods have already been returned to, or retrieved by, the supplier; or

(b)    the goods cannot be returned, removed or transported without significant cost to the consumer because of:

(i)    the nature of the failure to comply with the guarantee to which the rejection relates; or

(ii)    the size or height, or method of attachment, of the goods.

(3)    If subsection (2)(b) applies, the supplier must, within reasonable time, collect the goods at the supplier’s expense.

(4)    The supplier must, in accordance with an election made by the consumer:

(a)    refund:

(i)    any money paid by the consumer for the goods; and

(ii)    an amount that is equal to the value of any other consideration provided by the consumer for the goods; or

(b)    replace the rejected goods with goods of the same type, and of similar value, if such goods are reasonably available to the supplier.

(5)    The supplier cannot satisfy subsection (4)(a) by permitting the consumer to acquire goods from the supplier.

(6)    If the property in the rejected goods had passed to the consumer before the rejection was notified, the property in those goods revests in the supplier on the notification of the rejection.

51    Upon an election by a consumer to receive a refund of the money paid for the goods, the supplier must provide a refund in accordance with the terms of s 263(4)(a) of the ACL: Vautin at [286]. The imperative terms of the statutory obligation under s 263(4)(a) do not authorise any abatement or adjustment of the amount paid on account of depreciation, or any use of the goods by the consumer: cf, Consumer Rights Act 2015 (UK), s 24(8), which, subject to qualifications, authorises a reduction of a refund to a consumer who rejects goods to take account of the use of the goods by the consumer.

52    Upon rejecting the goods, in addition to the right to elect to receive replacement goods, or a refund of the monies paid, a consumer is also entitled by action against the supplier to recover damages for any reasonably foreseeable loss or damage suffered by the consumer: s 259(4).

A consumer’s remedies against a manufacturer

53    Division 2 of Part 5-4 of the ACL provides for a consumer to take action for damages against a manufacturer of goods in relation to a failure to comply with certain statutory guarantees. Under s 271 of the ACL, an affected person has a direct cause of action against the manufacturer, relevantly in respect of a failure to comply with the statutory guarantee under s 54 as to acceptable quality, and under s 59 in relation to a failure to comply with a manufacturer’s warranty. The term affected person is defined by s 2 as meaning –

(a)    a consumer who acquires the goods; or

(b)    a person who acquires the goods from the consumer (other than for the purpose of re-supply); or

(c)    a person who derives title to the goods through or under the consumer.

54    In relation to a manufacturer’s liability for non-compliance with the statutory guarantee under s 54 of the ACL, s 271(1) and (2) provide –

271    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.

…

55    In relation to the statutory guarantee under s 59 of compliance with a manufacturer’s express warranty, s 271(5) and (6) provide that a consumer may recover damages from the manufacturer if there is non-compliance with the guarantee –

(5)    If:

(a)    the guarantee under section 58 or 59(1) 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.

(6)    If an affected person in relation to goods has, in accordance with an express warranty given or made by the manufacturer of the goods, required the manufacturer to remedy a failure to comply with a guarantee referred to in subsection (1), (3) or (5):

(a)    by repairing the goods; or

(b)    by replacing the goods with goods of an identical type;

then, despite that subsection, the affected person is not entitled to commence an action under that subsection to recover damages of a kind referred to in section 272(1)(a) unless the manufacturer has refused or failed to remedy the failure, or has failed to remedy the failure within a reasonable time.

A supplier’s remedies against a manufacturer

56    As part of the scheme, the ACL also provides that a manufacturer of goods is liable to indemnify a supplier of goods for damages payable to a consumer, or for costs incurred as a result of a failure to comply with statutory guarantees, relevantly including the guarantees relating to acceptable quality and fitness for a purpose that the consumer made known to the manufacturer. Section 274 of the ACL provides (inter alia) –

274    Indemnification of suppliers by manufacturers

(1)    A manufacturer of goods is liable to indemnify a person (the supplier) who supplies the goods to a consumer if:

(a)    the supplier is liable to pay damages under section 259(4) to the consumer for loss or damage suffered by the consumer; and

(b)    the manufacturer is or would be liable under section 271 to pay damages to the consumer for the same loss or damage.

(2)    Without limiting subsection (1), a manufacturer of goods is liable to indemnify a person (the supplier) who supplies the goods to a consumer if:

(a)    the supplier incurs costs because the supplier is liable under this Part for a failure to comply with a guarantee that applies to the supply under Subdivision A of Division 1 of Part 3-2; and

(b)    the failure is:

(i)    a failure to comply with the guarantee under section 54; or

(ii)    a failure to comply with the guarantee under section 55 in relation to a disclosed purpose that the consumer made known to the manufacturer either directly or through the supplier or the person referred to in section 55(2)(a)(ii); or

(iii)    a failure to comply with the guarantee under section 56 in relation to a description that was applied to the goods by or on behalf of the manufacturer of the goods, or with the express or implied consent of the manufacturer.

(3)    The supplier may, with respect to the manufacturer’s liability to indemnify the supplier, commence an action against the manufacturer in a court of competent jurisdiction for such legal or equitable relief as the supplier could have obtained if that liability had arisen under a contract of indemnity made between them.

…

Liability may not be excluded by contract

57    The general position under s 276 of the ACL is that the liability of a supplier or a manufacturer in respect of non-compliance with the statutory guarantees, may not be excluded, restricted, or modified by contract. However, s 276A provides that in relation to goods that are not of a kind ordinarily acquired for personal, domestic or household use or consumption, the manufacturer may limit its liability to a supplier, but not if the supplier establishes that it is not fair and reasonable for the manufacturer to do so. That exception has no bearing on the issues in this proceeding, because the RVs were goods of a kind ordinarily acquired for personal, domestic or household use or consumption.

Unconscionable conduct

58    Overlying all the specific provisions in the ACL which regulate transactions for the supply of goods and services to consumers are the provisions relating to general protections in Chapter 2 of the ACL. Section 21 prescribes a general norm of conduct in connection with the supply or possible supply of goods or services. Sections 21 and 22 of the ACL in their form relevant to this proceeding were inserted by the Competition and Consumer Legislation Amendment Act 2011 (Cth), and commenced on 1 January 2012. During the period relevant to this proceeding, s 21 of the ACL proscribed conduct that is unconscionable in the following terms –

21    Unconscionable conduct in connection with goods or services

(1)    A person must not, in trade or commerce, in connection with:

(a)    the supply or possible supply of goods or services to a person (other than a listed public company); or

(b)    the acquisition or possible acquisition of goods or services from a person (other than a listed public company);

engage in conduct that is, in all the circumstances, unconscionable.

(2)    This section does not apply to conduct that is engaged in only because the person engaging in the conduct:

(i)    institutes legal proceedings in relation to the supply or possible supply, or in relation to the acquisition or possible acquisition; or

(ii)    refers to arbitration a dispute or claim in relation to the supply or possible supply, or in relation to the acquisition or possible acquisition.

(3)    For the purpose of determining whether a person has contravened subsection (1):

(a)    the court must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention; and

(b)    the court may have regard to conduct engaged in, or circumstances existing, before the commencement of this section.

(4)    It is the intention of the Parliament that:

(a)    this section is not limited by the unwritten law relating to unconscionable conduct; and

(b)    this section is capable of applying to a system of conduct or pattern of behaviour, whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour; and

(c)    in considering whether conduct to which a contract relates is unconscionable, a court’s consideration of the contract may include consideration of:

(i)    the terms of the contract; and

(ii)    the manner in which and the extent to which the contract is carried out;

and is not limited to consideration of the circumstances relating to formation of the contract.

59    Section 22 identified several matters to which a court must have regard, if relevant, for the purposes of determining whether a person has contravened s 21 in connection with the supply or possible supply of goods or services, and provided (inter alia) –

22    Matters the court may have regard to for the purposes of section 21

(1)    Without limiting the matters to which the court may have regard for the purpose of determining whether a person (the supplier) has contravened section 21 in connection with the supply or possible supply of goods or services to a person (the customer), the court may have regard to:

(a)    the relative strengths of the bargaining positions of the supplier and the customer; and

(b)    whether, as a result of conduct engaged in by the supplier, the customer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier; and

(c)    whether the customer was able to understand any documents relating to the supply or possible supply of the goods or services; and

(d)    whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the customer or a person acting on behalf of the customer by the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the goods or services; and

(e)    the amount for which, and the circumstances under which, the customer could have acquired identical or equivalent goods or services from a person other than the supplier; and

(f)    the extent to which the supplier’s conduct towards the customer was consistent with the supplier’s conduct in similar transactions between the supplier and other like customers; and

(g)    the requirements of any applicable industry code; and

(h)    the requirements of any other industry code, if the customer acted on the reasonable belief that the supplier would comply with that code; and

(i)    the extent to which the supplier unreasonably failed to disclose to the customer:

(i)    any intended conduct of the supplier that might affect the interests of the customer; and

(ii)    any risks to the customer arising from the supplier’s intended conduct (being risks that the supplier should have foreseen would not be apparent to the customer); and

(j)    if there is a contract between the supplier and the customer for the supply of the goods or services:

(i)    the extent to which the supplier was willing to negotiate the terms and conditions of the contract with the customer; and

(ii)    the terms and conditions of the contract; and

(iii)    the conduct of the supplier and the customer in complying with the terms and conditions of the contract; and

(iv)    any conduct that the supplier or the customer engaged in, in connection with their commercial relationship, after they entered into the contract; and

(k)    without limiting paragraph (j), whether the supplier has a contractual right to vary unilaterally a term or condition of a contract between the supplier and the customer for the supply of the goods or services; and

(l)    the extent to which the supplier and the customer acted in good faith.

…

60    The term “supplier” in s 22 of the ACL has a bespoke meaning for the purposes that section, which is not synonymous with the term “supplier” when used in Parts 3-2 and 5-4 of the ACL.

61    It will be necessary to return to these provisions when addressing the ACCC’s claims that Jayco Corp engaged in conduct that was, in all the circumstances, unconscionable.

Misleading or deceptive conduct

62    Also within the general protections provisions in Chapter 2 of the ACL, s 18(1) contains a prohibition on misleading or deceptive conduct in trade or commerce, and provides –

18    Misleading or deceptive conduct

(1)    A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

…

63    It will also be necessary to return to s 18(1) of the ACL when addressing the conduct of Jayco Corp that the ACCC alleges was misleading or deceptive, or likely to mislead or deceive.

False or misleading statements in connection with the supply of goods

64    In addition to the general protections provisions in Chapter 2 of the ACL, Chapter 3 includes specific protections. In particular, Division 1 of Chapter 3 includes protections in relation to false or misleading representations. That regime operates concurrently with the general prohibition on misleading or deceptive conduct in s 18(1) of the ACL: see, s 18(2).

65    Relevant to this proceeding, s 29(1)(m) of the ACL provides –

29    False or misleading representations about goods or services

(1)    A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:

…

(m)    make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy (including a guarantee under Division 1 of Part 3-2); or

…

66    I shall return to s 29(1)(m) when addressing the representations of Jayco Corp that the ACCC alleges were false or misleading.

Part 4: The Jayco warranty and owner’s handbook

67    As I have observed, Jayco Corp manufactured RVs at its factory in Dandenong, Victoria, and then supplied new, manufactured RVs to Jayco dealers, which then supplied them to consumers. Jayco Corp’s manufacturing operations at its Dandenong factory were significant. The factory employed skilled technicians who worked in a large and sophisticated workshop, using technically specified equipment. During the mid-2010s, which was around the relevant period for the purpose of this proceeding, Jayco Corp manufactured approximately 8,000 to 10,000 RVs per year. Those RVs were of various types, including campers, vans, and motorhomes. The RVs were all hand-assembled by a team of Jayco Corp employees on the production line. Many of the RVs were custom built to meet a wide range of customer specifications including sleeping configuration, floor plan layouts, décor choices, and a large number of additional features such as solar panels, external showers, cameras, and drive assist products. It would typically take Jayco Corp approximately six weeks to build a new RV.

68    Given that Jayco Corp’s RVs were hand-assembled and made up of a varied range of component parts, it was not unusual for minor faults to be identified in an RV shortly after production. These minor faults were typically identified by the Jayco dealer shortly after receipt of the RV, or by the purchasing consumer shortly after taking delivery of it. After leaving the Dandenong factory production line, RVs were put on a truck and delivered to the buying dealer’s dealership. That trip would shake the RV, which may highlight any items that required adjustment by the dealer when conducting a cosmetic and mechanical check of the RV. Further, once the customer took delivery of the RV, it was recommended that the customer take it on a relatively short “shake down” trip of about 1,000 km. The shake down trip is well known in the RV industry as the RV’s maiden voyage. The purpose of a shake down trip is for the consumer to work out how to use the RV and to identify any shortcomings that were not apparent during production. Jayco Corp recommended that consumers keep a list of any items of concern to be raised at their RV’s first service, which would take place after the shake down trip. The first service of an RV after an initial running in period was referred to in the owner’s handbook, to which I shall return at [77] below, and the recommendation for a shake down trip was made in the context that the supply of the RV was accompanied by the Jayco warranty, to which I have referred.

69    As has been mentioned, the terms of the Jayco warranty were set out in the owner’s handbook for the Jayco RVs. The material terms of the Jayco warranty commenced as follows –

WARRANTY

Our goods come with guarantees that cannot be excluded under the Australian Consumer Law. You are entitled to a replacement or refund for a major failure and for compensation for any other reasonably foreseeable loss or damage. You are also entitled to have the goods repaired or replaced if the goods fail to be of acceptable quality and the failure does not amount to major failure.

70    It is to be noted that this first paragraph of the warranty followed the text prescribed by reg 90(2) of the Competition and Consumer Regulations, which is set out at [32] above. The warranty continued –

Jayco Corporation Pty Ltd (ABN 005 266 91) (“Jayco”) provides the following warranty in relation to its recreational vehicles and other units (“RV”). The benefits of this warranty are in addition to any rights and remedies imposed by Australian State and Federal legislation that cannot be excluded. Nothing in this warranty is to be interpreted as excluding, restricting or modifying any State or Federal legislation applicable to the supply of goods and services which cannot be excluded, restricted or modified.

71    The second paragraph of the warranty as set out above, substantially complied with reg 90(1)(h) of the Competition and Consumer Regulations, which is referred to at [32] above.

72    The warranty continued by providing for a warranty that all parts of Jayco Corp’s manufacture were free from defects in material and workmanship for a period of 12 months, and in the case of an original manual roof lifting winch, a lifetime warranty was given in favour of the original purchaser –

Jayco warrants to the original purchaser of every RV that all parts of our manufacture are free from defects in material and workmanship for a period of 12 MONTHS from date of purchase under normal use and specified service, except for the items listed under “What is not covered” and subject to compliance with the section entitled “What must you do”.

The original manual roof lifting winch installed in a Jayco camper trailer carries a lifetime warranty for the original purchaser only (this is not transferrable to a subsequent owner).

73    The warranty provided that in the event that any part of the RV was proven to be defective in material or workmanship in the 12 month warranty period, Jayco might, at its sole discretion, replace or repair the RV, or the defective part –

Under this warranty, if any part of your RV is proven to be defective in material or workmanship during the 12 month warranty period Jayco will, at its sole discretion, either:

•    Replace or repair the RV or the defective part of the RV, or

•    Cause the RV or defective part of the RV to be replaced or repaired by a Jayco dealer or authorised repairer

Warranty repair or parts replacement will be performed free of charge by an authorised Jayco dealer or repairer at its place of business within a reasonable time after delivery of the RV to the dealer or repairer during normal business hours.

Where an on-site repair is requested and such service is available, a service call fee is applicable at the expense of the owner.

Under this warranty no re-imbursements will be made for work done through unauthorised establishments without prior written consent from Jayco.

…

(Bold in original)

74    The warranty contained some limitations and exclusions, which it is unnecessary to set out.

75    In relation to making a claim in respect of any defect in the RV, the terms of the warranty directed the consumer to contact a Jayco dealer or service agent, or Jayco’s service centre in order to locate an authorised agent –

WHAT YOU MUST DO

As a new owner of a Jayco RV, you are responsible for regular and proper maintenance (Refer to Care and Maintenance section and Periodical Maintenance Schedules). This will help prevent conditions arising from neglect that are not covered by your Jayco Warranty.

At the time of delivery from your Jayco Dealer, the dealer’s representative will log your information into our warranty system and issue a warranty customer delivery form.

Within 21 days Jayco will then issue you with a Customer Care Card.

This card is your guarantee of Service throughout the warranty period if required. If this card is not presented at the time of repair, your authorised Jayco dealer or repairer will be unable to do the work under your warranty contract.

If a problem arises, contact your nearest Jayco Dealer or Authorised Service Agent to make an appointment. If you are unable to locate a dealer or agent contact Jayco’s Service Centre on the Toll Free Number on your Customer Care Card for the location of the nearest authorised agent.

You must make the RV available to the dealer or agent for Inspection and testing. If such inspection and testing finds no defect in the RV, you must pay the dealer or agent’s usual costs of service work and testing.

You will bear the costs of transporting the RV to and from the dealer or agent. You must deliver the RV to the dealer or agent during business hours or at the agreed time.

If you are in an area not covered by an authorised agent, work can only be carried out in an unauthorised workshop after prior written approval from Jayco’s Service Centre.

76    Beyond the terms of the warranty, the Jayco owner’s handbook also contained other guidance for Jayco owners. The owner’s handbook commenced with the following paragraph –

Thank you for purchasing a Jayco product. Using the finest materials available, this product has been carefully designed, engineered and manufactured for your safe enjoyment. Jayco’s creed is quality and to that end we stand behind all of our products with our warranty program.

77    On page 2, the following paragraph appeared –

Used within recommended guidelines and procedures your Jayco will provide you with years and many happy kilometres of trouble-free travel. Your first Service (1000kms or 3 months) after an initial running-in period is an ideal time for any minor adjustments to components to be made and your Jayco dealer to answer any questions you may have.

78    Page 3 of the owner’s handbook provided –

CUSTOMER RELATIONS

Jayco is committed to maintaining good customer relations. Your complete confidence and satisfaction in our product and services assures our continued success as a manufacturer. Our commitment to technical excellence is one aspect of our strategy for fostering an ongoing, mutually rewarding relationship with all Jayco customers through our extensive dealer network.

Your authorised dealer will cordially assist you by providing service, maintenance, selection of options and instructions concerning the operation of your Jayco.

Most problems arise from misunderstandings concerning warranty and service, and are usually solved by dealers, where required the dealer will obtain advice from Jayco. If you are not satisfied with the assistance you receive from any Jayco dealer you can contact our customer service department:

79    Pages 29 to 32 of the owner’s handbook listed a number of Jayco dealers throughout Australia and New Zealand, including Jayco Sydney, Jayco Canberra, and Jayco Newcastle Service Centre.

80    The owner’s handbook contained a section titled “Care and Maintenance”. That section contained an extensive number of sections concerning different parts and characteristics of the RV. Relevant to the present case is a section concerning canvas which was in the following terms –

CANVAS

It is advisable when taking delivery of a new canvas annex, or a Camper Trailer or an Expanda equipped with canvas coverings that this canvas should be soaked with water twice and both times be allowed to dry before using the camper trailer or annexe on an extended trip. The reason for soaking the canvas twice is to allow the stitching to expand into the holes caused by the needle stitching of the canvas, and it will therefore tend to make your annexe or canvas cover of your camper trailer more waterproof.

Part 5: The parties’ concise statements

81    The parties’ statements of their cases were the subject of concise statements. The practice of using a clear and helpful concise statement in narrative form rather than formal pleadings has been encouraged by the Court in cases involving allegations of unconscionable conduct: Australian Securities and Investments Commission v Australia and New Zealand Banking Group Ltd [2019] FCA 1284; 139 ACSR 52 (Allsop CJ).

The concise statement of the ACCC

82    The ACCC alleged that each of the four Consumers purchased a new RV from a Jayco dealer which had serious manufacturing defects which were apparent at the time of purchase, or soon thereafter. The manufacturing defects that are alleged were detailed in schedules to the concise statement. In respect of each of the four Consumers, the ACCC alleged that a request was made for a refund or replacement, which was denied. I shall refer to the claimed defects in more detail when considering the evidence relating to each Consumer. For present purposes, the essential details of the supplies of the RVs are as follows –

(1)    Consumer MO –

(a)    Model:            Jayco Swan Outback camper trailer;

(b)    Date of delivery:    August 2013;

(c)    Price:            $27,990;

(d)    Supplier:        Jayco Sydney;

(2)    Consumer TB –

(a)    Model:            Jayco Expanda pop top;

(b)    Date of delivery:    23 May 2013;

(c)    Price:            $38,916;

(d)    Supplier:        Jayco Sydney;

(3)    Consumer JT –

(a)    Model:            Jayco Expanda Outback pop top;

(b)    Date of delivery:    31 August 2015;

(c)    Price:            $39,000;

(d)    Supplier:        Jayco Sydney;

(4)    Consumer RH –

(a)    Model:            Jayco Journey Outback pop top;

(b)    Date of delivery:    4 December 2014;

(c)    Price:            $47,000;

(d)    Supplier:        Jayco Newcastle.

83    The ACCC alleged that the manufacturing defects in each of the four RVs were sufficiently serious as to entitle the Consumers to a refund or replacement RV, which each of them requested on several occasions. The unconscionable conduct of Jayco Corp is alleged to have arisen in connection with its consideration of the Consumers’ claims.

84    The ACCC also alleged a total of seven representations by Jayco Corp to the Consumers in the course of their dealings with respect to the claimed defects in the RVs that were alleged to amount to contraventions of ss 18 and 29(1)(m) of the ACL. It will be necessary to return to the representations that were alleged by the ACCC during the course of considering those claims.

The concise statement of Jayco Corp

85    By its concise statement, Jayco Corp claimed that it did not sell RVs to consumers, but rather that the RVs were sold to the Consumers by Jayco dealers, who were not agents of Jayco Corp. Jayco Corp admitted that the Jayco warranty gave rise to a contractual relationship between it and the Consumers, and that it supplied services to the Consumers under the warranties.

86    Jayco Corp alleged that RVs were complex products, comprised of many moving parts, and were subject to stresses from transit, use, and exposure to weather, and that it was reasonable to expect that issues would arise in relation to the RVs. Jayco admitted that the RVs purchased by the Consumers had defects, but denied that any failure to comply with a consumer guarantee amounted to a major failure, and alleged that each RV was reasonably repairable. Jayco Corp addressed the circumstances and content of the claims of each of the four Consumers in support of its denial that there was any major failure for the purposes of the ACL.

87    In relation to the terms of the Jayco warranty, Jayco Corp relied on several provisions, including those that referred to the guarantees under the ACL, and the entitlement of a consumer to a replacement or refund for a major failure. Jayco Corp denied that an ordinary consumer would be unlikely to understand the distinction between the consumer guarantees under the ACL, and the Jayco warranty. Jayco Corp denied that it exercised effective control over the relevant Jayco dealers’ compliance with their statutory guarantees, and it denied that it obstructed or interfered with the Jayco dealers meeting their obligations under the ACL. Jayco Corp also denied that it had any liability to the Consumers under the ACL to provide refunds, or replacement RVs.

88    As to the statements that Jayco Corp employees made to the Consumers that were relied on by the ACCC as misrepresentations, Jayco Corp alleged that any such statements were consistent with Jayco Corp’s obligations under the Jayco warranty and the ACL.

Disputes as to the scope of the ACCC’s pleaded case

89    During the course of the opening of the ACCC’s case, a dispute was foreshadowed by Jayco Corp in relation to the scope of the ACCC’s case. At that point, I indicated to the parties that unless they informed me otherwise, I would assume that the case was being run by reference to the parties’ concise statements so that the allegations of unconscionability made by the ACCC involved allegations of unconscionable conduct towards the four Consumers, rather than more generally, such as involving a system or a pattern. I also indicated that I regarded the ACCC’s concise statement as a document calculated to give Jayco Corp fair notice of the case against it, so that if there were significant allegations to be made by the ACCC that were more than mere context, they would have to be expressly pleaded. I indicated that I regarded the principal elements of the ACCC’s case as those set out in paragraph [30] of its concise statement, to which I refer at [685] below. The parties did not take issue with these observations, and the hearing of the proceeding continued to final addresses.

90    In final addresses, a number of disputes crystallised between the parties as to whether the ACCC’s case as presented in its closing submissions included elements that had not been pleaded. I heard some oral argument on the topic, and the parties were given leave to file written submissions about these matters. Jayco Corp presented written submissions that raised a plethora of issues, including some quite minor issues, that it claimed fell outside the scope of the ACCC’s concise statement. It is unnecessary to resolve all of the disputes about the scope of the ACCC’s pleaded case that were raised by Jayco Corp. However, at this point it is only necessary to mention one.

91    In its written opening submissions, the ACCC submitted that Jayco Corp’s conduct in refusing the Consumers’ requests for refunds or replacement RVs arose in the context of the statutory right of a consumer to reject goods in the event of a “major failure”, citing s 259(3) of the ACL. The ACCC also submitted that Jayco Corp had prevented consumers from exercising rights under the ACL, including where defects were not, or could not be remedied within a reasonable time. The ACCC referred to what it alleged were unsuccessful attempts at repair in the case of each of the four Consumers, and referred to s 259(2) of the ACL, relating to the refusal or failure within a reasonable time to comply with a requirement to remedy a failure to comply with a statutory guarantee. In his oral opening of the case, senior counsel for the ACCC took the Court specifically to s 259(2) of the ACL, and read it to the Court. It is necessary to emphasise here that, as I have recorded at [89] above, senior counsel for Jayco Corp foreshadowed an objection during the course of the opening of counsel for the ACCC, following which I stated that I assumed that the case would be conducted by reference to the parties’ concise statements.

92    In its written closing submissions, the ACCC relied on s 259(2) of the ACL as a ground on which the Consumers were entitled to reject the RVs, submitting that that the Consumers had required the relevant supplier to remedy a failure to comply with a statutory guarantee, but that the supplier had refused or failed within a reasonable time to do so.

93    In response, in final address, senior counsel for Jayco Corp submitted that the ACCC’s case had been confined to reliance on the existence of major failures, as defined by s 260 of the ACL, and foreshadowed other submissions about the scope of the ACCC’s pleaded case, which led me to make the direction for further written submissions. Jayco Corp submitted that “prior to the making of its closing submissions, s 259(2) of the ACL had not formed any part of the ACCC’s case”. Jayco Corp relied on paragraph [29] of the ACCC’s concise statement, which alleged facts that were apt to engage the definition of “major failure” in s 260 of the ACL, and not the facts that would be necessary to engage s 259(2), in support of its submission that the ACCC’s case had been so confined. Paragraph [29] was in the following terms –

29.    As a supplier of the RV, a Jayco dealer is bound by the ACL consumer guarantees relating to the supply of goods. The RVs supplied to the Consumers failed to comply with the ACL in a manner that constituted a major failure because:

29.1    no reasonable consumer would purchase an RV with a roof that did not work, or leaked, or both;

29.2    for MO and JT, their RVs departed in significant respects from the demonstration models they had viewed;

29.3    the RVs were unfit for the purpose of outdoor use because the roof did not work, or leaked, or both and were not repaired within a reasonable time.

94    I pause to observe that the allegation in paragraph [29.1] corresponds to the condition in s 260(a), paragraph [29.2] corresponds to s 260(b), and paragraph [29.3] corresponds to s 260(c). Paragraph [29] laid the foundation and context for the identification in paragraph [30] of the circumstances in which the conduct of Jayco Corp was alleged to be unconscionable.

95    The ACCC submitted that its pleaded case had embraced reliance on s 259(2) of the ACL. Senior counsel for the ACCC fairly accepted that paragraph [29] of the ACCC’s concise statement alleged a major failure, and created a tension that tended to support Jayco Corp’s submission. However, the ACCC pointed to other features of the concise statement as raising reliance on s 259(2). In evaluating the parties’ submissions, in addition to paragraph [29], I have given consideration to the following features of the ACCC’s concise statement –

(1)    paragraphs [6] and [8], where the ACCC alleged that the Jayco dealers made lengthy, repeated and unsuccessful attempts to repair the RVs;

(2)    paragraph [12], where the ACCC alleged that Consumer MO’s RV was not repaired within a reasonable time;

(3)    paragraph [17], where the ACCC alleged that the defects in Consumer TB’s RV were not repaired within a reasonable time;

(4)    paragraph [21], where the ACCC alleged that the leaking in Consumer JT’s RV was not repaired within a reasonable time;

(5)    paragraph [25], where the ACCC alleged that the roof to Consumer RH’s RV was not repaired within a reasonable time;

(6)    paragraph [30.5], where the ACCC alleged that Jayco Corp knew that despite many repair attempts, the defects had not been fixed;

(7)    paragraph [30.6], where the ACCC alleged that –

the Consumers were entitled to the remedy of a refund or replacement in accordance with the consumer guarantee provisions of the ACL because the defects could not be repaired or was a major failure;

(8)    the tables in the four schedules to the concise statement, where the details of unsuccessful attempts at repair are alleged.

96    The context in which the failure to repair within a reasonable time was alleged by the ACCC is important. In relation to each of the four RVs, the ACCC alleged in paragraphs [12], [17], [21], and [25] of its concise statement that it was substantially unfit for purpose, and was not repaired within a reasonable time. These two conditions are reflected in s 260(c) of the ACL, and if engaged, give rise to a “major failure”. Therefore, the substance of the ACCC’s case up to and including paragraph [29] of its concise statement is concerned with a “major failure”, as defined by s 260.

97    That leaves for consideration paragraph [30] itself. Paragraph [30.5] is neutral on the question whether the ACCC’s case extended beyond reliance on s 260 as grounds to reject the goods. As to paragraph [30.6], I do not regard it as sufficient to give Jayco Corp fair notice that s 259(2) was relied on. No reference is made to s 259(2). If there were formal pleadings, r 16.02(1)(e) of the Federal Court Rules 2011 (Cth) would require that the pleading state the provisions of any statute relied on. Although a concise statement may be a better form in which parties might state their cases in some types of litigation, its purpose remains to give the opposing party fair notice of the case to be met. The structure of the ACCC’s concise statement, the allegations of failure to repair in the context of substantial unfitness for purpose, the clear endeavour to engage s 260 in paragraph [29], and the absence of any reference to s 259(2), lead me to conclude that, reading the concise statement as a whole, reliance on s 259(2) of the ACL did not fairly form part of the ACCC’s pleaded case.

Part 6: The witnesses

98    The parties called witnesses to give evidence, each of whom adopted a comprehensive affidavit that had been prepared on the witness’s behalf and to which was attached a number of documents. Each witness was cross-examined.

99    The ACCC called each of the four Consumers. In relation to two of the consumer witnesses, Consumer JT and Consumer TB, I consider that on the whole, each of them did his best to give accurate evidence to the Court in accordance with his recollection. I thought that each of the four Consumer witnesses, and particularly Consumer MO, was influenced in his or her presentation to some degree by a sense of grievance in relation to the defects in their RV.

100    In the case of Consumer MO, I formed the view that the presentation of his evidence had by reason of the passage of time been assisted by reconstruction, and that in the absence of corroborative documents, it was not in every detail reliable. I also consider that at times Consumer MO was prone to exaggeration. An example was that when he was cross-examined, he stated that when his RV went in for repair at Jayco Sydney “half the stuff wasn’t done”. While there were items that had to receive further attention, Jayco Sydney’s warranty claim documents do not support Consumer MO’s characterisation in the terms that he used. Having said that, for the reasons that I will explain, I do not doubt that Consumer MO was justified in identifying several features of his RV that were not presented or repaired to an acceptable standard.

101    I also formed the view that the evidence of Consumer RH was not wholly reliable. Although it was not put on behalf of Jayco Corp that Consumer RH was not a witness of truth in relation to her recollection, there were some aspects of her evidence which were shown to be inconsistent with the evidence of other witnesses whose evidence I accept. Some of her evidence was also inconsistent with some of the objective evidence, including that contained in business documents. I will return to these features of Consumer RH’s evidence in more detail in due course.

102    Jayco Corp called two current employees, one former employee and two retired employees. Those witnesses, from least to most senior during the relevant period, were Mr Peter Manning, Mr Philip Rigby, Mr Malcolm Austin, Mr Paul Morgan, and Mr Peter Murphy. Their respective roles and responsibilities were as follows.

103    Mr Manning had been employed by Jayco Corp for more than a decade. He commenced in 2008 as a service advisor, then became a service manager, and later between 2011 and 2017 worked as a customer service manager, before moving into the spare parts team. In his role as a customer service manager, Mr Manning was responsible for managing warranty requests and dealer service enquiries of various sorts arising in New South Wales and Queensland. He had authority to approve warranty repairs up to $1,000, and he did not have authority to approve refunds or replacements. He reported to Mr Morgan, the national service manager, and he escalated matters as necessary to Mr Austin, Mr Rigby, or Mr Morgan.

104    Mr Rigby had also been employed by Jayco Corp for more than a decade. Prior to that, he had more than 20 years’ experience in the RV industry in England. Mr Rigby commenced at Jayco Corp in 2009 as a production manager, and in 2012, he was appointed to the role of service manager. Mr Rigby continued in that role, except for a 12 month period following Mr Austin’s retirement in mid-2015 until mid-2016, when he acted as interim customer relations manager. In his role as service manager, Mr Rigby handled warranty repair claims. As with Mr Manning, Mr Rigby had authority to approve warranty repairs up to $1,000, and he did not have authority to approve refunds or replacements, which he escalated as necessary.

105    Mr Austin was employed by Jayco Corp for more than 20 years. He commenced in 1994 as a research and development manager, then held a quality manager role, and finally from 2000 until his retirement in July 2015, he was the customer relations manager. In that role, Mr Austin was responsible for assisting dealers and consumers with any enquiries that they made to Jayco Corp, which spanned warranty queries, refund or replacement requests, and concerns that consumers may have been experiencing with dealers or repair agents. Mr Austin had authority to approve warranty repairs up to approximately $1,200 or $1,500, and he did not have authority to approve refunds or replacements. Mr Austin reported to Mr Morgan, and it was to him that he escalated matters as necessary, including by investigating and making recommendations in relation to warranty repairs above his financial limit, and requests for refunds or replacements.

106    Mr Morgan was employed as the national services manager of Jayco Corp from 2006 until 2016, when he took up work elsewhere. In that role, Mr Morgan was responsible for “after sales”, which incorporated customer relations, warranty claims, overseeing the Dandenong factory workshop, distribution, spare parts and technical dealer training. Mr Manning, Mr Austin and Mr Rigby reported to him, and he reported to Mr Murphy. Mr Morgan had authority to approve warranty repairs up to $3,000, and he did not have authority to approve refunds or replacements. Beyond those limits, Mr Morgan required approval from Mr Murphy or another senior Jayco Corp employee.

107    Mr Murphy was employed by Jayco Corp for more than 40 years, from 1976 until his retirement in 2017. During the relevant period from 1 January 2013 to 30 June 2016, Mr Murphy held the role of research and development manager and reported to the CEO. As part of that role, Mr Murphy was responsible for assessing higher value warranty repairs and requests for refunds or replacements. Mr Murphy considered such requests along with recommendations made to him by Mr Morgan, and Mr Murphy had authority to approve refunds or replacements.

108    I formed the impression that each of the Jayco Corp employee witnesses did his best to give reliable evidence to the Court in accordance with his recollection, and his perception of the issues in respect of which he was cross-examined. Mr Morgan, in particular, was the subject of some persistent but appropriate cross-examination about the respective relationships between Jayco Corp, the dealers, and consumers. I consider that Mr Morgan was a credible, reliable witness whose evidence stood up well against these challenges.

109    Jayco Corp also called Mr Damien Charleson and Mr Warwick Butcher of Jayco Newcastle. Mr Charleson was, at the relevant times, the dealer principal of Jayco Newcastle. Mr Butcher was, at the relevant times, the customer relations manager of Jayco Newcastle.

110    Jayco Corp also called Mr Tyrone Bilbija and Mr Jason Holman. Mr Bilbija was, at the relevant times, the dealer principal of Jayco Sydney. Mr Holman was, at the relevant times, the service manager of Jayco Sydney. In that role, Mr Holman oversaw the workshop, service administration and procurement of parts for Jayco Sydney. Mr Holman did not have authority to determine any refund or replacement requests, which he referred to the dealer principal of Jayco Sydney, Mr Bilbija. Prior to taking up the service manager role at Jayco Sydney, Mr Holman had been employed by Jayco Corp for 14 years, starting as an installation technician and finishing as a production manager, while principally working on the pop top line of RVs. At the time of giving evidence, Mr Holman was no longer employed by Jayco Sydney, and had moved to Queensland.

111    Finally, Jayco Corp called Mr Barry Wells, a caravan repairman who had been based in Bundaberg. Mr Wells had attended upon Consumer RH in early May 2015 at a caravan park in Agnes Water, Queensland. I found Mr Wells to be an impressive witness.

112    As a final comment before turning to the background of the four Consumers’ RVs, I record that all counsel presented their cases skilfully, and consistently with an appreciation that the best advocacy is selective and economical: see, Whisprun Pty Ltd v Dixon [2003] HCA 48; 200 ALR 447 at [18] (Gleeson CJ, McHugh and Gummow JJ).

Part 7: The four Consumers’ RVs

(1)    Consumer MO

Purchase and delivery of the RV

113    In about April 2013, Consumer MO purchased a 2013 Jayco Swan Outback camper trailer from the dealer, Jayco Sydney. The agreement to purchase was effected at the Sydney Caravan Supershow at the Rosehill racecourse. Consumer MO attended the show with his wife. At the show, Consumer MO and his wife spoke to a salesperson from Jayco Sydney, received a brochure for the 2013 Jayco Camper Trailer Series, and inspected a demonstration model of the 2013 Jayco Swan Outback camper trailer. Consumer MO and his wife then left the show for several hours, during which time he read the brochure. Consumer MO gave evidence that the general impression that he formed from the glossy brochure was that the camper trailer would be of good quality and would perform well, that Jayco made a good quality product, and that Jayco prided itself on quality and being an Australian-owned caravan company. The brochure was in evidence, and I accept Consumer MO’s account of the impression he formed. Consumer MO and his wife then returned to the caravan show, and agreed to purchase the RV. Consumer MO agreed to a purchase price of $27,990, and paid a $1,000 deposit. He arranged a loan with a finance company to cover the balance of the purchase price, which he paid upon delivery of the RV in about August 2013.

114    Consumer MO and his wife had never owned a caravan or camper trailer before, although they had previously rented camper trailers to use on family holidays. A camper trailer, when in its towing position, has a much lower profile than a conventional caravan. Camper trailers contain a wind-up canvas upper section and extendable sleeping accommodation on each side. They are easier to tow than caravans, and are cheaper than caravans, including pop top caravans. The 2013 Jayco Swan Outback camper trailer was one of the largest models in the 2013 Jayco Camper Trailer Series, and it was in the 2013 Jayco Outback range. The brochure listed the features of the Outback range, and stated that the Outback range “had the added strength and clearance you’ll need for rugged conditions, but there are limits!” The below picture, which has been extracted from the brochure, shows a Jayco Swan camper trailer in the towing position.

115    In about August 2013, Consumer MO attended Jayco Sydney to pick up his RV. At that time, he was provided with a copy of the Jayco owner’s handbook and a demonstration of how to operate and maintain the RV.

Initial concerns with the RV

116    Consumer MO stated in his affidavit that after taking his RV home from Jayco Sydney, he inspected it and identified a number of issues. Consumer MO stated that it looked like the RV had “just been slapped together”. He stated that he identified that the bumper bar and back of the camper trailer were not square with the chassis, that the roof did not shut squarely because it was misaligned, and that the door was vibrating against the roof because there was not enough clearance. Consumer MO stated that these issues made him concerned about the overall quality of the build of the RV.

117    Consumer MO did not raise these initial concerns with Jayco Sydney or Jayco Corp. During cross-examination, senior counsel for Jayco Corp challenged Consumer MO on his evidence about his initial concerns with the RV. In particular, senior counsel for Jayco Corp took Consumer MO to an online survey that was completed on 10 October 2013, which recorded that it was completed by Consumer MO and in which the overall presentation of the van, as well as the dealer and salesperson criteria, were rated as “excellent”. Consumer MO responded that he did not recall completing the survey, and suggested that his wife may have completed it. Consumer MO stated unequivocally that he “was not happy with the vehicle from the word go.” Ultimately, I do not consider that it is necessary to resolve whether Consumer MO’s concerns with his RV arose immediately after he took the RV home, or why his RV was positively reviewed in the online survey.

First trips around September 2013 and concerns raised with Jayco Sydney

118    In around September 2013, Consumer MO took his first trips with his RV to The Entrance on the New South Wales central coast, and to Newnes in the New South Wales central tablelands region. Consumer MO gave evidence that during those trips he noticed more issues with the RV, some of which were minor, but which all added up and increased his concern about the overall quality of the build of the RV.

119    Consumer MO stated that sometime after either the first or second trip, he raised his concerns with Mr Goran Gregorovic, who was at that time the service manager at Jayco Sydney. Consumer MO stated that they had a conversation to the following effect –

I said:    I’m not happy with the camper trailer that I have received, I have issues with it.

Goran said:    If you take the van home we can order new parts from Jayco Melbourne [presumably being a reference to the Jayco Corp factory in Dandenong]. We will send them photos and talk to them about how to resolve the issues.

I said:    Why can’t you get another chassis that I can look over first. This was not the standard that I paid for.

Goran said:    No, this is your vehicle, we will get it fixed, this stuff is only cosmetic.

120    Consumer MO stated that he did not agree that the issues with his RV were only cosmetic, and that he asked Mr Gregorovic why he could not send his RV back to Jayco Corp and see why it was poorly built, to which Mr Gregorovic just said “no”. The ACCC did not adduce from Consumer MO evidence as to whether his conversation with Mr Gregorovic referred to above was by telephone, or in person, or whether he showed Mr Gregorovic the features of his RV about which he complained. Consumer MO was not challenged in cross-examination about this evidence. However, I found the evidence about this conversation and its context, which was wholly contained in Consumer MO’s affidavit, to be lacking in precision and detail in circumstances where Consumer MO stated in cross-examination that it took a long period of time to prepare his affidavit, and that the ACCC had provided much of the timeline through documents that it had obtained. I am not satisfied that any conversation to this effect occurred at the time suggested by the structure of Consumer MO’s affidavit, namely after the first trips but before the first roof collapse in December 2013. That said, the documentary evidence to which I shall refer below demonstrates that Consumer MO and his wife communicated with Mr Gregorovic by email in January 2014 in relation to the state of their RV, and that he took his RV to Jayco Sydney for assessment in March 2014.

Christmas 2013 school holidays – trip to Glen Allen and the first roof collapse

121    During the Christmas 2013 school holidays, Consumer MO took his RV to a friend’s property in Glen Allen, which is near Brown Mountain in New South Wales, for a holiday with five other families. On the first day of the trip, when Consumer MO was winding up the roof of the RV, one of the steel telescopic struts that held the roof up popped out, causing the roof to collapse in one corner. Consumer MO stated that with the assistance of five other adult males at the property, and over about four hours of “brainstorming” and labour, he managed to put the strut back into place so that he could raise the roof of the RV.

January 2014 – concerns raised with Jayco Sydney

122    On 8 January 2014, Consumer MO and his wife sent an email to Mr Gregorovic of Jayco Sydney that referred to attached pictures and a letter in relation to their RV. Mr Gregorovic responded on 10 January 2014, stating that he could not access the majority of the pictures and that the fault descriptions were vague. On 11 January 2014, Consumer MO sent another email to Mr Gregorovic, in which he relevantly stated –

Please find attached the document with photos and fault descriptions. I hope this is a little better.

Just wanted to note that the van has been on 3 trips since we got it. They have been fantastic trips and we are very much looking forward to doing a bigger trip with the family. I do find it such a shame that it seems we have been taken with some bad workmanship.

123    That email attached a five page document which contained 25 photographs of the RV with captions describing the issues of concern in the photographs. The document did not include any reference to the roof collapse that had occurred during Consumer MO’s recent Christmas holiday to Glen Allen. The issues were described as cracked bed head support pole brackets, a tap that impeded the bed slide, a loose tap fitting in the bench, a drawer not mounted squarely, the bottom of a cupboard not finished properly, a chipped door, faults in a fly screen, a window that was sewn on crookedly, holes in a mattress, misaligned light fittings, screws protruding underneath the RV, inconsistency in the finish of the wheel arches, a misaligned bumper bar, and cracks in the right upper shock absorber mount welded to the chassis of the RV. There is no evidence before the Court of any response to this email from Jayco Sydney to Consumer MO.

February 2014 – concerns raised with Jayco Corp

124    In February 2014, Consumer MO raised his concerns about his RV with Jayco Corp, which in turn conveyed those concerns back to Jayco Sydney to be addressed as repairs under the Jayco warranty. On 2 February 2014, Consumer MO and his wife sent an email to an “info” account of Jayco Corp, in which they relevantly stated –

My husband and I recently bought a Jayco Swan camper van. We have been campers for 25 years and finally bought our family our dream!

We took possession of the trailer in September 2013. We have been on 4 trips since this date. We take very good care of all our possessions and the camper would be no exception!

Unfortunately we have been disappointed with our new trailer (not everything about it, just some aspects that need to be addressed.)

Please find some photos attached with explanation which we have also sent to Jayco Sydney.

125    That email attached the same five page document with 25 photographs of the RV with captions describing the issues of concern in the photographs, referred to at [123] above.

126    On 3 February 2014, Ms Andrea McCann, from the warranty division of Jayco Corp, responded to Consumer MO and his wife’s email by requesting the chassis number of their RV. On 5 February 2014, Consumer MO and his wife replied to Ms McCann with the RV’s chassis number. Later that day, Ms McCann sent a further response, which was copied to Mr Gregorovic of Jayco Sydney, in which she relevantly stated –

Please book [your] van into Jayco Sydney for your concerns to be looked at and addressed. If Sydney is not convenient for you please advise me and I will supply details if possible of [a] closer repairer for you.

I have forwarded your email onto the relevant customer service manager who unfortunately is currently off with medical concerns. He will respond to them asap on his return.

127    Later still on 5 February 2014, Mr Gregorovic sent an email to Mr Gary Cadd, who was the quality control manager at Jayco Corp, copied to Mr Manning of Jayco corp, which relevantly stated –

Here are the issues [Consumer MO] has with his camper, the only ones of concern are the tent repairs, the tap fitted to the bench is too close and gets hit by the bed slider and the cracking on the shock mounts. The rest are pretty straight forward.

Tent to send back for repairs, new bench required, new lower door to get and repair to gal [sic]….

Please advise…!

128    Mr Cadd responded to Mr Gregorovic, again copying Mr Manning, by relevantly stating –

I’m OK with the tent and the bench but how will you get around the pump issue so it doesn’t happen again? Maybe fit one of the flat ones?

129    On 10 February 2014, an email was sent from Mr Manning’s email address to Consumer MO and his wife, which relevantly stated –

I am confident the Dealer in Sydney, or another of our repairers if more convenient, can resolve any outstanding warranty concerns.

March 2014 – Jayco Sydney assessment of the RV

130    On about 14 March 2014, Consumer MO took his RV to Jayco Sydney for assessment. Jayco Sydney communicated with Jayco Corp as to the repairs to be conducted on Consumer MO’s RV.

131    On 18 March 2014, Mr Gregorovic sent an email to Mr Manning, in which he relevantly stated –

We had [Consumer MO] run his van past on Friday and it’s a real mess…! (looks like an apprentice job)

I think it’s something that the factory needs to see and re-build properly.

Please call to discuss….

132    Later that day, Mr Manning responded to Mr Gregorovic –

I am not sure if you mean the van has to come back here [to the Jayco Corp factory in Dandenong]. You would need to put a good case together for that to happen.

Please send photos and a brief idea of what the problems are.

133    Later still, Mr Gregorovic sent an email to Mr Manning, in which he relevantly stated –

Here are the pics and descriptions of the issues [Consumer MO] is having with the van.

Both myself and Glen [Bishop] here have had a look at the issues and there is definitely something wrong with the way the van was built, it’s all askew as you can see from the pics...! We have compared his van to some of the ones we have on display and its [sic] nowhere near as well put together as they are…!

Looks like the walls will need to be removed and re-positioned, wheel arch areas on both sides have holes where water and dust can get to the ply flooring and over time start to rot.

Not even sure if it’s something Paul Tall [a repairer of RVs] would have a go at…!

He actually lives closer to RVGO [an authorised repair agent under the Jayco warranty] than he does to us, they might take it on…?

Your call…..

134    That email attached a copy of the five page document with the photographs that Consumer MO had sent to Jayco Corp on 2 February 2014, referred to at [123] above, with additional handwritten comments in relation to the identified issues, which I infer were made by Mr Gregorovic.

135    Finally on 18 March 2014, Mr Manning responded to Mr Gregorovic by requesting, “Please have quoted 1st”.

136    On 20 March 2014, Mr Gregorovic sent another email to Mr Manning –

Just a heads-up…!

He’s not happy about that and will contact Jayco directly and to be honest I agree with him, I haven’t seen one this bad since I started at Jayco here [Jayco Sydney] …!!!

137    Later that day, Mr Manning responded to Mr Gregorovic –

Someone will need to quote and assess before senior management here will consider any big decision of money back or new van. This is Jayco policy.

Jayco won’t just listen to words and make a decision.

This is all I will tell him if he calls. Please call owner to organise.

I think you being his selling dealer should quote and assess and submit the report for the owner and express their requests. I can then present the case.

138    There was no statement in terms in Mr Gregorovic’s emails to Mr Manning that Consumer MO had sought a refund or a replacement RV, but it was put to Mr Manning in cross-examination that before he sent the above email of 20 March 2014, he had understood that Consumer MO wanted not just repairs but wanted his money back, to which Mr Manning responded, “Reading Goran’s and my email, yes”.

139    On 21 March 2014, Mr Gregorovic sent an email to Mr Manning, copied to Mr Holman of Jayco Sydney, with Jayco Sydney’s quotation for the repairs to be conducted on Consumer MO’s RV. The quotation was for between 32 hours ($2,460) and 48 hours ($3,960) of labour, plus parts, with 14 line items of repair work identified –

Here is the quote for us to repair [Consumer MO’s] van:

1.    Screws protruding all over the place under the van, to cut off and tidy up with black silicon – 2hrs.

2.    Wheel arches to tidy up, remove spats and secure loose metal, fill holes with black silicon and re-fit spats – 1hr.

3.    To fix broken hockey stick brackets – 0.25hr.

4.    Benchtop to replace, old top to remove, new top to fit and tap hole to cut, all electrical and water lines to re-attach – 2.5hrs.

5.    Drawer under lounge to square up – 0.5hr.

6.    Lower door to replace and roof blocks to fit – 1hr.

7.    Tent section to remove, send back to factory for repairs and re-fit – 4hrs.

8.    Mattress cover to replace – 0.25hr.

9.    Light fitting miss-aligned [sic], need to align – 0.5hr.

10.    Corner cap to replace – 0.75hr.

11.    Near side front riser arm to replace – 1hr.

12.    Upper shock absorber to replace, has cracked, need to grind off, weld new bracket on and treat area with Zink rich epoxy (Jotun) – 2hrs.

13.    Coax connection near fridge broken – 0.25hr.

14.    Body of van out of alignment, needs to have the boot, off-side wall and rear wall removed, all associated furniture disconnected from floor and walls – 9hrs.

IF holes visible on floor vinyl or off-side wall, then will need to dismantle entire van to re-lay vinyl – 8hrs.

To re-assemble van, walls, 12v and 240v leads, plumbing, gas lines and furniture – 16hrs.

PARTS REQUIRED

Top Capping on front and rear of body

Upper shock mount

Corner mould

Lower entry door

Bench top (already ordered)

Mattress cover

Misc. (screws, silicon, bumper mould, etc…

PARTS THAT MAY BE NEEDED

Complete rear camper wall

Complete off-side camper wall

Floor vinyl 4m

TOTAL HRS – 32hrs ($2460) min, 48hrs ($3960) max (depending on work req’d) + PARTS…

Please advise…!!

140    Included in the quotation at the item numbered 14 was a statement that the body of the van was out of alignment, with 33 hours of work attributed to that item.

141    On 24 March 2014, Mr Manning responded to Mr Gregorovic by requesting that he “please liaise with RV Go to do a quote on this van”. RVGO was an independent RV repairer, which was authorised to conduct repairs under the Jayco warranty. That email was copied to “Accounts@RVGO”, which I infer is an RVGO email address.

Jayco Corp evidence about Mr Gregorovic

142    Neither party called Mr Gregorovic, who had resigned from Jayco Sydney in July 2014. Jayco Corp adduced evidence that portrayed Mr Gregorovic as unreliable, and in particular that his assessment of Consumer MO’s RV was unreliable. Mr Bilbija, the dealer principal of Jayco Sydney, stated that he thought that Mr Gregorovic’s assessment of the issues with Consumer MO’s RV was unreliable, and that he had transferred Mr Gregorovic from his role as a Jayco Sydney service manager to a reception role in the service department because he considered that Mr Gregorovic’s judgment had deteriorated. Mr Holman also gave evidence about his doubts about Mr Gregorovic’s competence and performance in assessing RVs, preferring his own technical assessment skills and experience. Mr Manning stated that from his dealings with him, he considered that Mr Gregorovic was not the most experienced service manager, and that he would frequently make incorrect assessments of RVs. He stated that at one stage, because he had lost faith in Mr Gregorovic’s ability to assess RVs, he requested that he refer matters to repair agents, as Mr Gregorovic was prone to overreaction in his dealings with customers. Mr Manning was not challenged about this evidence. There was some objective support for the reservations that were expressed about Mr Gregorovic’s assessment skills in the form of the differences between his quotation for repairs on Consumer MO’s RV and another quotation prepared by the independent repairer, RVGO, and the warranty claim ultimately prepared by Mr Holman for the works that were undertaken. I refer to these below.