Chapman v McLaughin

NCAT Appeal Panel|2016-09-08

Background

This is an appeal from a decision made in the Consumer and Commercial Division of the Tribunal published on 13 May 2016. The appeal was lodged on 17 June 2016 and is therefore out of time. We will come back to this issue later in these reasons.
The decision under appeal (the Decision) arose out of the appellant's application filed in October 2015 in which the appellant sought damages from the respondent arising out of the respondent's failure to undertake repair work services on the appellant's motor vehicle.
A summary of the Decision is as follows: 1. The appellant arranged for his 1985 Porsche 911 Carrera motor vehicle (which had travelled approximately 150,000 kilometres) to be delivered to the respondent in October 2014 for the purposes of the respondent undertaking certain work on the vehicle. That work is described as "rust removal, respraying and sand blasting". The agreed price was $5,400.00 and the appellant paid to the respondent an initial sum of $4,800.00; 2. The Tribunal found that there had been a total failure of consideration and that the services performed were performed negligently. There was a finding that the vehicle had not been stored appropriately while in the respondent's care. The work that was performed was not performed with due care and skill and was not fit for purpose. There was a finding that the respondent had contravened the consumer guarantees in the Australian Consumer Law (ACL); 3. The Tribunal found that there had been a "major failure" within the meaning of the ACL sufficient to found a basis for a full refund to the applicant (appellant) of the amount paid; 4. The Tribunal also found that the appellant was entitled to be reimbursed for the costs of an expert's report ($660) and for funds thrown away by reason of the appellant purchasing parts for the vehicle on the respondent's advice ($756), which could not be used; 5. The Tribunal disallowed claims for "out of pocket expenses" (including transportation costs and storage costs for the vehicle) and the applicant's travelling expenses, his legal costs, costs of repair, costs of parts lost or damaged by the respondent and the vehicle's loss of value; 6. The out of pocket expenses were disallowed on the basis that "transportation and storage costs would have been incurred in any event as the vehicle had been shipped down from Darwin where the applicant currently resides". The Tribunal was not satisfied that the expenses claimed were caused by any act or omission on the respondents part; 7. The Tribunal found that there were "pre-existing issues with the vehicle", in particular the underside of the vehicle had surface rust, the steering rack cover plate was highly corroded as were the sway bars and shock absorbers and other steel components; 8. The applicant's claim that the proper basis of calculation to support an alleged loss of value in the vehicle being to compare the difference in the likely repair costs to the vehicle before the respondent took delivery of the vehicle with the repair costs after the vehicle was removed from the respondent's care was not accepted by the Tribunal. The Tribunal recorded that it could not be persuaded that the issues of repair referred to in the quotations relied upon by the applicant are a reliable measure of damage to the vehicle or that any damage to the vehicle reported after it was removed from the respondent's care was in fact caused by the respondent; 9. The Tribunal also concluded that it could not accept that the applicant's loss is "properly calculated by reference to the cost of repairs on the vehicle after September 2015 (when the applicant removed the vehicle from the respondent's custody). The Tribunal said that there were no independent valuations of the vehicle before and after the respondent had care of the vehicle and there was therefore no reliable evidence upon which to make assessments of loss and damage; and 10. The Tribunal concluded the appellant was entitled to compensation totalling $6,216.00.

Notice of Appeal

The form of Notice of Appeal requires an appellant to identify the following matters: 1. The orders challenged on appeal; 2. The grounds of appeal; and 3. The orders the Appeal Panel should make
In addition the form of Notice of Appeal requires an appellant who seeks leave to appeal on the basis that they may have suffered a substantial miscarriage of justice to identify whether they say the decision was not fair and equitable, whether they say that the decision was against the weight of evidence and/or whether they say that significant new evidence is now available that was not reasonably available at the time of the hearing.
In this case the appellant has not completed the Notice of Appeal form in any detail but, instead, has attached to the Notice of Appeal a document which makes a number of detailed submissions. It is necessary in order to explain the basis for the appeal to summarise the appellant's annexure to the Notice of Appeal. This summary is as follows: 1. The appellant says that he has been unable to identify any error of law but submits that the Decision contains numerous mistakes and "missed evidence on a number of fronts"; 2. The Decision recorded the respondent's denial of responsibility for some damages on the basis that the vehicle had a lot of rust when it was delivered. The appellant refers to email correspondence which the appellant says establishes that there was little or no rust and that the respondent was aware of that. We draw attention to the fact that the appellant's reference to this aspect of the Decision is mistaken in that the Decision in this respect only recorded what the respondent submitted. Separately, the Decision made findings concerning the state of the vehicle and these findings were based upon the opinion of the appellant's own expert (Mr Lang of Autohaus); 3. The appellant referred to the report of Mr Lang concerning damage likely to have arisen by reason of the vehicle being parked out in the weather for a considerable period. The appellant states that the Tribunal drew inferences from Mr Lang's report regarding the condition of the vehicle prior to its delivery to the respondent. The appellant submits that the Lang report should be discounted because Mr Lang had not seen the vehicle before making the report. The Tribunal relied upon a passage in Mr Lang's report in which Mr Lang recorded that the heavy corrosion on the underside of the vehicle is in his opinion due to years of exposure to salted roads in the United Kingdom. The corrosion is consistent with many other UK Porsches of this era. The report goes on to say that the corrosion would have been made worse from having the car stored outside for some months but that incremental corrosion is negligible in comparison to what already would have been present. The appellant states that because he was "unaware this would be a contentious point" he did not include in his evidence a condition report with respect to the vehicle obtained at the time it was shipped from the UK to Australia in early 2012. He submits that that report shows that the vehicle has no rust and that therefore Mr Lang's assumption is incorrect. We take it that the appellant wishes to adduce fresh evidence in support of the appeal, namely the report referred to above obtained in 2012. In support of his contention that the vehicle was rust free, the appellant points to the engine (which had been removed from the vehicle and properly stored) and which was rust free evidencing, he submits, that the rust was the result of the vehicle's treatment when in the custody of the respondent; 4. The appellant submits that damage to the wheels, body and hood were admitted by the respondent but were completely omitted from the Decision. The appellant submits that Mr Lang's report provided a quotation to rectify those issues: see pages 67 and 69 of the evidence provided; 5. The appellant also referred to missing items and states that evidence of items sent directly to the respondent, and his confirmation of receipt, had been provided; 6. The appellant submits that the Tribunal made an error in disallowing the appellant's out of pocket expenses. The appellant states he provided significant evidence demonstrating additional costs incurred by the actions of the respondent. The appellant refers to the costs of having the vehicle (which was then in pieces) returned to Darwin following recovery of custody from the respondent in September 2015. The appellant submits that additional costs were incurred in transporting the vehicle in pieces than would have been occasioned had he returned the vehicle to Darwin in one piece; 7. The appellant takes issues with the approach to the calculation of loss undertaken in the Decision. In the Decision the Tribunal referred to the difference in value of the vehicle before and after the alleged breaches as being the appropriate measure of damages. The appellant takes a different view and says that he should be entitled to the "true cost of repairs" which he provided through three different companies; 8. The appellant further states that since the vehicle has been recovered additional damage has been discovered. The appellant seeks damages which may be summarised as follows: 1. Damages for the cost of missing items as per the expert's report; 2. The cost of cleaning the vehicle - $8,465.62; 3. Review of transport costs and storage costs; 4. Transport costs from the respondent's work shop to other places to ascertain the cost of repair - $1,970.00; 5. Transport costs for the vehicle back to Darwin and the initial transportation of the vehicle shipped as a result of misrepresentations by the respondent - $5,460.00; 6. Review of the costs for flights and associated costs to establish causation - $819.01; 7. Review of costs of rust repairs - $50,438.64; 8. Damages for the more recently discovered problems with the vehicle - $5,500.00. This item was not pursued at the appeal hearing and would have been rejected because it concerns claims brought after the proceedings below were concluded.

The respondent has filed a reply. In summary it states: 1. The respondent supports the orders made by the Tribunal; 2. The vehicle had rust in it when the respondent took custody;

Appellant's submissions

The appellant has filed submissions with the Tribunal (received 9 August 2016) and in the following paragraphs we will summarise the effect of those submissions.
The appellant seeks leave to file the appeal out of time. He submits that it took him sometime to obtain legal advice from a New South Wales based solicitor.
The appellant refers to correspondence from the respondent which, he says, evidences the fact that the vehicle was not as extensively rusted as the respondent now asserts. He says the correspondence demonstrates that the respondent had no serious concerns about the vehicle. The appellant draws attention to the fact that some parts of the vehicle are said to be rusted but the respondent did not ask for those parts to be replaced at the time he was requesting the appellant to order replacement parts.
The appellant submits that when he purchased the vehicle it was completely free of any types of rust and that the previous UK owners had not driven the vehicle during winter. He submits that when the vehicle was shipped from the UK it had no rust.
The appellant attaches a vehicle condition shipping report, engineer's inspection certificate, proof of AQIS and the MVR inspection. These reports were all conducted in 2012 and again in late 2013. When the vehicle arrived in Australia it was inspected by AQIS.
The appellant submits that after the vehicle entered Australia it was inspected by an engineer, Mr Thorbjornsen and his report is attached to the appellant's submissions. It was then registered by the Motor Vehicle Registry in Darwin. The appellant submits that part of the inspection process involves inspecting for rust. The vehicle was inspected in August 2012 at a Government facility and in 2013 at a private facility.
The appellant also made submissions concerning damage to the vehicle which was incurred when the vehicle was in the respondent's custody. He referred to the report of Autohaus which he submits demonstrates that the quote was for $8,466.00. The appellant also refers to the additional cost of having the vehicle resprayed - this is also part of the same quotation. The amount claimed is $22,000.00. The appellant submits that he has incurred additional transport costs: see JAC 11 of his submissions.

Appellant's oral submissions

The appellant made oral submissions at the hearing, the effect of which appears below.
The appellant claimed for a number of items identified on pages 67, 68 and 69 of his submissions. Page 69 contains a quotation in the form of an email provided by Autohaus. The items claimed are: (1) Quote for scratches and damage $1,671.62 (2) Damaged wheels ($250 x 4) $1,000.00 (3) Roof/rear window $3,350.00 (4) Complete vehicle detail $330.00 (5) Supply and fit roof tonneau cover $1,564.00 (6) Sill covers and end caps $440.00 (7) Mirror glass $110.00 Total: $8,465.62

The appellant also claimed for repairs occasioned by rust, this was identified in the Autohaus email as costing "approx. $44,000.00". The appellant acknowledged at the hearing the Tribunal is unable to make an order in excess of $40,000 by reason of the provisions of the Fair Trading Act and he limited his claim to that amount.
In support of the repair costs occasioned by rust, the appellant sought leave to adduce fresh evidence. The fresh evidence consisted of: 1. A delivery note provided by Fallowfield Vehicle Deliveries Limited dated 30 April 2012 which did not identify any damage to the vehicle. This delivery note recorded the state of the vehicle when it left the UK; 2. A tax invoice from customs agents; 3. A report from Celerity Engineering dated 20 August 2012. This made no reference to the vehicle being in anything other than its original condition. To that document the appellant had attached an email dated 4 August 2016 from M Thorbjornsen who was the author of the Celerity Engineering certificate. That email states that the vehicle had no signs or external or internal defects that would prevent it from complying with the relevant Australian design rules; 4. The guidelines of the Northern Territory Government concerning checking for rust; 5. An AQIS document concerning the requirements of Australian quarantine and inspection for vehicles being imported; 6. Registration certificates confirming the vehicle had been registered in the Northern Territory.
The appellant also made submissions that certain transport costs which had been denied should be the subject of an order for compensation in his favour. The details of these claims are: (1) The cost of removing the vehicle from the respondent and having it delivered at Zaggs (see page 101 of the submissions) $390.00 (2) The cost of moving the vehicle to Autohaus (page 103 of the Submissions) $790.00 (3) Transport costs to Darwin (from Brisbane) (page 107 of the submissions) $750.00 (4) Transport costs from Brisbane to Darwin (page 109 of submissions) $1980.00 (5) Charges incurred with Bobtow in Darwin to place vehicle in storage $143.00 Total: $3,353.00

In addition the appellant claimed for the cost of travelling to Sydney to inspect, retrieve and make arrangments for alternative custody of the vehicle and its return to Darwin. The appellant submitted that this trip was necessary as the respondent had failed to cooperate in reporting on the state on the vehicle or when work would be complete. The details of this claim appear on pages 93, 96 and 99 of the submissions and are as follows: (1) Flights from Darwin to Sydney $549.00 (2) Car hire and petrol $115.10 (3) Toll $19.47 Total: $683.57

Respondent's submissions

The respondent did not file submissions on time but on Monday 29 August 2016 his submissions were received by the Tribunal. They included a copy of the Autohaus report which the appellant had put before the Tribunal at the first instance hearing. This has also been referred to as the Lang Report. The submissions included a brief submission from the respondent as well as a number of photographs. The photographs consisted of pictures of the vehicle before its delivery to the respondent. The respondent said that the photographs had been supplied by the appellant. There were also photographs of the vehicle taken at the time the vehicle left the respondent. The respondent said the photographs had been part of the evidence supplied to the Tribunal at the first instance hearing.
The respondent submitted that the vehicle had extensive rust when he took custody of it.
The respondent did not otherwise comment upon the claims of the appellant. However, he did acknowledge that he did not revise his quotation for the work to be undertaken to the vehicle after the vehicle had been received and was available for an inspection by him.

Further Evidence

The appellant submitted an email after the hearing on Friday 9 September 2016. The email contained emails from him to Mr Lang and Mr Lang's reply. The appellant suggested to Mr Lang that the vehicle may have been subject to severe water damage due to heavy storms in April 2015. Mr Lang's reply was that if it is correct that the vehicle experienced flood damage then that damage should not be discounted as a contributing factor if it was submerged in flood water. We reject this evidence. It is fresh evidence which was reasonably available at the time of the first instance hearing. As can been seen in the subsequent parts of this decision, such fresh evidence is not to be accepted by an appeal panel except with leave and then only if such evidence was not reasonably available at the time of the first instance hearing. In any event, Mr Lang has not resiled from the opinion expressed in his report, an extract of which we quote subsequently in this decision.

The appellant in reply

At the appeal hearing the appellant made brief submissions in reply. He acknowledged that when he purchased the vehicle in the UK he obtained a written report concerning the state of the vehicle. He informed the Appeal Panel that he no longer had a copy of that report.

Decision

Under s 80(1) of the Civil and Administrative Tribunal Act 2013 (the Act), an appeal against an internally appealable decision may be made to an Appeal Panel by a party to the proceedings in which the decision was made. Section 80 goes on to provide in s 80(2) that an appeal may be made as of right on any question of law, or with leave of the Appeal Panel, on other grounds.
Clause 12 of Sch 4 of the Act provides in summary that an Appeal Panel may grant leave under s 80(2)(b) of the Act only if the Appeal Panel is satisfied that the appellant may have suffered a substantial miscarriage of justice because: 1. The decision of the Tribunal under appeal was not fair and equitable, or 2. The decision of the Tribunal under appeal was against the weight of evidence, or 3. Significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
In this case, no error of law has been identified by the appellant. Accordingly, we are treating the grounds of appeal as grounds for which leave is required and that one or more of the three grounds identified above form the basis of this appeal.
It appears that the appeal was filed a few days out of time. The Civil and Administrative Tribunal Rules 2014 (the Rules) provide that an appeal of this kind must be lodged with the Tribunal within 28 days from the day in which the appellant was notified of the decision (see rl 25). In this case the appellant states that he was notified of the decision on Saturday 14 May 2016. Accordingly, the appeal should have been lodged within 28 days from Monday 16 May 2016, in other words by 13 June 2016. It was filed on 17 June 2016.
The appellant seeks the leave of the Tribunal to extend time for lodgement of the appeal. Section 41 of the Act provides that the Tribunal may extend time. Previous decisions of Appeal Panels have identified the considerations which must be taken into account when deciding whether or not to extend time. These considerations involve the length of the delay, the reason for the delay, the appellant's prospects of success and the extent of any prejudice to the respondent. Here, the length of the delay was very short. The reason for the delay (namely the need to obtain advice from a solicitor) is in our opinion reasonable. The appellant's prospects of success are obviously reasonable in that there are plausible submissions made by the appellant. The respondent has not suffered any prejudice through the delay.
Accordingly, the Appeal Panel will extend time for the lodgement of the appeal to 17 June 2016.
Previous decisions of Appeal Panel have considered the principles which are to be applied when considering whether leave should be granted under cl 12 of Sch 4. The significant decision in this regard is Collins v Urban [2014] NSWCATAP 17. The principles may be summarised as follows: 1. The concept of a substantial miscarriage of justice refers to a failure in the way a matter was concluded or decided which deprived the appellant of a chance that was fairly open of achieving a better outcome than occurred; 2. If there has been a denial of procedural fairness the decision under appeal can be said to have been "not fair and equitable"; 3. A decision under appeal can be said to be "against the weight of evidence" where the evidence in its totality preponderates so strongly against the conclusion found by the Tribunal at first instance that it can be said that the conclusion was not one that a reasonable Tribunal Member could reach; and 4. If an Appeal Panel is satisfied that the applicant for leave may have suffered a substantial miscarriage of justice under one or more of the three grounds, then the Appeal Panel "may" grant leave. However, in order for leave to be granted the appellant must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at. Ordinarily it is appropriate to grant leave only in matters that involve issues of principle or questions of public importance or matters of administrational policy, or an injustice which is reasonably clear in the sense of going beyond merely what is arguable or, an error that is plain and readily apparent and is central to the Tribunal's decision and not merely peripheral. An injustice which is reasonably clear can include a factual error that was unreasonably arrived at and clearly mistaken.
We have had regard to, and have applied these principles in coming to our decision.
It is clear that this appeal only concerns the question of quantum: that is whether the amount already awarded to the appellant is appropriate or whether some other sum should be awarded. The respondent has not appealed the decision and supports the existing decision of the Tribunal.
The largest component of the appellant's claim for compensation concerns the claim for costs to repair the vehicle by reason of extensive rust. The significant piece of evidence relied upon by the Tribunal at first instance was the Lang (or Autohaus) Report, a portion of which the Tribunal quoted in its decision. The relevant quotation is in these terms: The heavy corrosion evident on the underside of the car in my opinion is due to years of exposure to salted roads in the United Kingdom. This corrosion is consistent with many other UK Porsches of this era that I have seen. The corrosion is located in all the classic areas. This corrosion would likely have been made worse from having the car stored in an outside environment for some months but it is negligible in comparison to what already would have been present.
In our view, the author of the report had directed his mind to whether the rust could have occurred as a consequence of years of exposure to salted roads as opposed to whether it occurred during the period of approximately twelve months where the vehicle was in the custody of the respondent. The author formed the opinion that the cause was predominantly the former rather than the latter. In other words in the opinion of Mr Lang the rust was due except to a modest extent to years of exposure to salted roads and the corrosion was consisted with that cause.
To rebut the opinion contained in the Autohaus report, the appellant has sought to adduce fresh evidence which we have described earlier. The appellant acknowledges that that evidence would have been available at the first hearing but it was not included at the hearing because the appellant did not think it was relevant. This was so notwithstanding the fact that the Autohaus report had been commissioned by the appellant and was part of the appellant's own evidence. We are of the opinion that this fresh evidence should not be taken into account and leave to adduce it should be refused. The point of limiting fresh evidence to that which was not reasonably available at the first hearing is to ensure finality of proceedings. This means that it is in the interests of justice for parties to put forward all of their evidence as best they can at the hearing, as otherwise, if they were free to add fresh evidence after a case was decided, the proceedings would run the risk of not being finalised until after many hearings. This principle is of particular importance in the Tribunal because of the provisions of s 36 of the Act. That section requires the Tribunal to proceed to decide cases justly, quickly and cheaply.
However, even if we were inclined to allow the fresh evidence to be tendered and considered, we do not think it would influence our decision. The evidence concerning the rust is not straight forward. The appellant asks the Tribunal to infer from the combined effect of (1) the facts of the vehicle's importation and registration, and (2) government policies as to the importation and registration of used vehicles affected by rust, that the vehicle must have been rust free when it arrived in Australia and when it was registered in the Northern Territory. Against that is the opinion of the expert referred to above. We also note that the appellant obtained a report at the time of purchase but that that report is no longer available. It may be reasonable to infer that that report would not have assisted the appellant's case.
In any event, we do not think that the decision reached by the Tribunal with respect to the rejection of the claim for rust damage could be described as not just and equitable or against the weight of the evidence. The appellant does not meet the requirements described in Collins v Urban in order to obtain leave in respect of the rust damage. The decision reached by Tribunal concerning rust was reasonably open on the evidence.
We have a different view with respect to other aspects of the appellant's claim.
The claims identified earlier totalling $8,466.00 do not appear to have been considered by the Tribunal at first instance. They are claims which are put forwarded on the basis that the vehicle suffered damage during the period it was in custody with the respondent. We are of the opinion that all of these items should have been the subject of consideration by the Tribunal and accordingly the omission to consider those items can be described as not fair and equitable. In our view, that omission satisfies the principles in Collins v Urban because an injustice which is reasonably clear has occurred. The amounts should be allowed. The appellant has provided evidence in support of this claim and that evidence has not been rebutted by the respondent.
There are also claims totalling $3,353.00 to cover the cost of retrieving the vehicle from the custody of the respondent and returning it to Darwin. The decision under appeal refused these amounts on the basis that "transportation and storage costs would have been incurred in any event as the vehicle had been shipped down from Darwin". In our view the appellant was put into the position of having to return the vehicle to Darwin in a state of disrepair and it is reasonable to assume that the vehicle will have to be sent again from Darwin in the future in order to be repaired. Although it was true to say that the appellant would have incurred costs of returning the vehicle to Darwin, that was on the assumption that the vehicle was then repaired. What has transpired is that the appellant has incurred the cost of returning the vehicle to Darwin but it is reasonable to assume that he will incur costs again in sending the vehicle away.
In our view these claims should be allowed. This is so because the decision, in this respect, is not fair and equitable and an injustice which is reasonably clear has occurred.
The appellant also claimed the costs totalling $683.57 referred to earlier. The decision under appeal does not appear to have dealt with these claims. For the same reason as above, we are of the view that the appellant has, in this respect, suffered a substantial miscarriage of justice and ought to be allowed these amounts.
The result in our opinion is that the decision should be set aside. We find that the appellant is entitled to the following: (1) The amounts already decided $6,216.00 previously by the Tribunal, namely: (2) The claims referred to in para 41 $8,466.00 (3) The claims referred to in para 42 $3353.00 (4) The claims referred to in para 44 $687.57 Total: $18,722.57

As a result of the views we have described in this decision it is necessary to make the following orders; 1. Leave is granted to extend the time for filing of the appeal to 17 June 2016. 2. The appeal is upheld. 3. The orders made in MV 15/55268 on 13 May 2016 are set aside. 4. The respondent is ordered to pay to the appellant the sum of $18,722.57 within 14 days of the date this order.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 19 September 2016

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