Faruk Chauhud v Alto Prestige Pty Ltd

NCAT Consumer and Commercial|2021-10-07

Application

This is an application to the Tribunal by Mr Faruk Chauhud ("the applicant") for refund of part of the monies paid to Alto Prestige Pty Ltd ("the respondent") on the basis that he was provided with a written quote for $4445.00 and has paid the sum of $12,940.84. The applicant is seeking a refund of the sum of $8495.84.
The applicant seeks to rely on the written quotation provided by the respondent on 1 February 2021, which the respondent claims contains an error that incorrectly lists the cost of parts as $1032 rather than the actual cost of $10,320.00. The cost of labour was quoted as $3125 resulting in a total quoted cost of $4445.00.
The respondent says there was no mistake as to the price. The respondent's position is that as although there was an error in the quote, the full cost was discussed on 3 February 2021 and the price was accepted by the applicant on that date. The respondent says that is the concluded contract, and therefore there is no mistake on the part of the applicant as to the cost.

Jurisdiction

This is a consumer claim pursuant to the Fair Trading Act 1987 (NSW) ("FTA") s 4. The application is within the jurisdictional limit of the Tribunal pursuant to s 79K of the FTA. The relief sought is an order that can be made by the Tribunal pursuant to s 79N of the FTA. The Tribunal has jurisdiction to determine the matter.

Appearances

The applicant was represented by his wife, Dianne Jolley who provided submissions on behalf of the applicant. The applicant gave short sworn oral evidence regarding whether the price was discussed on 3 February 2021. The applicant provided bundles of documents dated 22 June 2021 and 15 September 2021 to the Tribunal and the respondent. The bundles of documents consisted of: 1. Statement of Farouk Chauhud dated 27 August dated 2021 2. Statement of Dianne Jolley dated 27 August 2021 3. Emails between the respondent and the applicant 4. Invoices provided by the respondent and receipt for payment 5. Text messages between the applicant and Mr Gerathy
The respondent provided a bundle of documents dated 15 September 2021. The respondent was represented by Mr Ralph Fitzgerald, In house Legal Counsel for the respondent. Mr Gerethy gave sworn oral evidence on behalf of the respondent. The respondent provided submissions dated 15 September 2021 that included:- 1. Statement of Paul Gerethy dated 14 September 2021 2. Parts quote dated 20 January 2021 3. Emails between the Mr Gerethy and the applicant including the email of 4 February 2021

Background and Evidence

On 15 January 2021 the applicant put incorrect fuel into his 6 month old Volkswagen Amorok EEN 82J. He drove the vehicle from Gosford to Sydney and the car broke down. Roadside Assistance took the vehicle to the respondent's business, Alto Volkswagen North Shore.
On 19 January 2021 the applicant was advised by the respondent that the cost to repair the vehicle would be approximately $10,000.
On 21 January 2021 the applicant contacted Volkswagen Head Office to ask for a discount on the quoted cost as the insurer had refused liability and as the car was new he was asking for special consideration. On 28 January 2021 he was advised by Volkswagen Head Office they could not assist.
On 29 January 2021 the applicant requested a quote for the repair from Mr Gerethy, a service advisor employed by the respondent rather than relying on the quote of "around $10,000." On 1 February 2021 Mr Gerethy sent a quote that said the cost would be $1320 for parts and $3125 for labour.
On 3 February 2021 the applicant and the respondent had a telephone discussion in relation to the repair. By email on 3 February 2021 the applicant confirmed that the respondent should proceed with the repair. At the time he requested that they confirm the final quote and also asked if they could reduce the labour cost.
On 4 February 2021 Mr Gerathy wrote to the applicant and said "As I said on the phone we need to do the job first and we will see what we can do about the price."
On 8 February 2021 the applicant received a text message saying the car was ready for collection and the cost would be $12,940.84.
The applicant disputed the cost but ultimately on 5 March 2021 paid the full cost of the repair to mitigate any ongoing losses while he awaited the outcome of the investigation by the Department of Fair Trading.
The application to the Tribunal was lodged on 6 April 2021 after the matter was not resolved through the mediation process at the Department of Fair Trading.

Issues in dispute

The applicant asserts that he entered the contract under the mistaken assumption that the price was in accordance with the written quote provided on 1 February 2021 for parts in the sum of $1320 and labour costs of 3125.00.
The respondent says that there was no mistake as to the price. There was a typographical error in the quote however the contract was entered into on the 3 February 2021 after a discussion about the price between the applicant and Mr Gerathy took place over the phone and when the applicant subsequently gave instructions by email to proceed with the repair. Further, even if there was a mistake there is no evidence as to any loss to the applicant arising from the mistake as the cost of the parts would not alter, being $10,350.
The Tribunal has to determine whether:- 1. Was there a concluded contract in the terms provided in the quote or by way of an oral agreement? 2. If there was a unilateral mistake would it be unconscionable for the applicant to rely on that mistake? 3. If there was a mistake was there any loss to the applicant arising from the mistake?

Applicable Law

In relation to a contract the basic principles apply as to whether there was an offer, acceptance and consideration. The question is whether the contract was agreed and accepted as argued by the respondent or the agreement was reached on the basis of a unilateral mistake arising from the quote of 1 February 2021.
in relation to unilateral mistake I note in Contract Law in Australia (5th Edition) 2007 at page 430 the authors say: " ..most cases of unilateral mistake occur when the parties disagree as to the meaning of the contract. Once it is acknowledged or held that the understanding of one party is 'correct' the case becomes one of unilateral mistake. In these cases, at the time of contracting, one party apprehends the position correctly and one party does not."
In Royal Diamonds Pty Ltd v. Buttle [2016] NSWCATAP 230 the Appeal Panel found in a case where a diamond ring was advertised on the internet that although the ring was advertised at the incorrect price, the seller was required to honour the contract. However in that case there was no evidence that the purchaser was aware of the erroneous pricing. The Appeal Panel also referred to Taylor v. Johnson (1983) 151 CLR 433 at 432-433 where the court found the party who relied on the mistake could not be entitled to rescission of the contract if: "the other party is aware of circumstances that exist which indicate the first party is entering the contract under some serious mistake or misapprehension about either the content or subject matter of that term and deliberately sets out to ensure that the first party does not become aware of the existence of his mistake or misapprehension." This principle was also followed in Fox Entertainment Precinct Pty Ltd v Centennial Park and Moore Trust [2004] NSWSC 214 [20 to [30]. In Royal Diamonds Pty Ltd v Buttle the Appeal Panel said at [28]:- "It is necessary to establish a factual basis for the operation of such a principle, namely that the other party to the agreement knew, or must have known strongly or suspected that there was a mistake."

Findings

There was significant dispute between the parties in relation to the conversation of 3 February that preceded the email of the applicant instructing the respondent to proceed. There is no dispute there was an error in the quote provided on 1 February 2021. There is further no dispute between the parties on the evidence that the original price was verbally quoted to be around $10,000 for the parts. That was the reason for the applicant's original approach to Volkswagen Head office and to the insurer. The dispute is whether in the conversation of 3 February 2021 prior to the applicant confirming the respondent should proceed the price was agreed as parts costing $10,350 and the labour costs as quoted being $3125.
Alternatively, I am asked to find by the applicant that he entered the contract based on the quote provided on 1 February 2021 and the respondent is bound by the quote.
I find the evidence of Mr Gerethy in regard to the conversation on 3 February 2021 to be more plausible than that of the applicant. I accept his evidence as set out in his statement and supported by his oral evidence to the Tribunal, in preference to the evidence of Mr Chauhud. Mr Gerethy said that he contacted Mr Chauhud to find out what he wanted to do with the vehicle as it was still at Alto Prestige's premises. Mr Chauhud did not contact the respondent to confirm the quote of 1 February 2021. I accept that there was a discussion as to the price for the repair in the sum of $13,445.00 and Mr Gerethy asked for an email confirmation to proceed from Mr Chauhud and the email was subsequently sent to confirm the go ahead. I find on the evidence of Mr Gerethy that the applicant, Mr Chauhud was not responding to the email correspondence of 1 February 2021 in giving the go ahead but was responding to the conversation where the price of $13,445.00 was discussed. I do not accept Mr Chauhud's denial that the price was not discussed. It was at that point the contract was entered into by the parties, with an oral agreement as to the contract price. This is further supported by the surrounding evidence that there was no discussion of a substantial price reduction from the original oral quote. I accept that the applicant may not have knowledge of the price of parts in the normal course, however they had already been advised of the likely cost, so I do not accept that they had no knowledge of the approximate cost of the parts.
Further, the applicant in his email dated 4 February 2021 in accepting the quote says "You mentioned on the phone today that you guys may be able to reduce the labour costs. Can you please confirm final quote." That is consistent with the evidence of Mr Gerethy that the applicant was not relying on the quote of 1 February 2021 but relying on the oral discussion that took place to reach the agreement on 3 February 2021. The only evidence Mr Chauhud gave was to deny the discussion about the price on 3 February 2021, but did not deny the conversation took place. I do not accept Mr Chauhud's evidence in that regard.
Prior to 1 February 2021 both parties are in agreement that the cost would be over $10,000. The fact that the applicant never questioned the cost of the parts would indicate there was no mistake arising from the quote of 1 February 2021. I do not accept the applicant's evidence that they had no way of knowing the true cost of the parts, as other than the error in the quote there was no dispute that the cost of parts was always discussed as being around $10,000.
However if I am incorrect and the applicant was under a mistake as to the cost of the parts, I find that given there is no disagreement that the discussions up to the point the written quote was received that the ultimate cost would be $10,000.00 it would appear that there is a set of circumstances here where the offeree "snaps up the offer" as it is apparent that the offeror did not intend to make the offer in those terms. Hartog v Colin & Shields [1939] 3 All ER 566 (cited in Contract Law in Australia) concerned a contract to sell 30,000 Argentinian hare skins. The price was incorrectly said to be a price per pound rather than price per piece. The Court found the buyer could not have reasonably supposed that this expressed the intention of the other party, as all the proceeding discussions were in the correct amount. It is analogous to the set of circumstances in this matter.
I find that even if there was some mistake the applicant chose not to bring it to the respondent's attention as they were clearly aware that all the discussions around cost were $10,000 and above.
I further find that there is no evidence to indicate that the applicant suffered any loss arising from the incorrect quote. There is no evidence provided by the applicant's to indicate the cost would have been significantly less had they proceeded with another repairer. The applicant said that other repairers gave oral quotes around the sum of $5000 to $7000 however they did not see the car and no written evidence was provided to the Tribunal. The respondent says the quotes only reflected the replacement cost of the injectors but not the balance of the parts required due to the extensive damage.
In the circumstances the application is dismissed.

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: 14 February 2022

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Judgment (8 paragraphs)

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