Hamoud v State of New South Wales

NCAT Consumer and Commercial|2015-05-14

REASONS FOR DECISION

The matter was listed for hearing at the Tribunal in Liverpool on 14 May 2015. The applicant appeared and gave sworn evidence. The applicant's wife, Ms Laura Stokes, appeared and gave sworn evidence. The applicant's daughter, Ms Tomika Cameron, appeared and gave sworn evidence.
Mr Chahine, director of the respondent, appeared and gave sworn evidence. Mr Caporelli, operations manager of the respondent, appeared and gave sworn evidence.
The application was filed with the Tribunal on 3 February 2015.

OVERVIEW OF DISPUTE

The dispute involves work performed by the respondent on the applicant's vehicle. The applicant is the owner of a 2005 BMW 120I ('the vehicle') which his daughter drives on a regular basis. The vehicle was purchased by the applicant at auction for $14,500.00 in 2012. The respondent operates a business selling wheels and tyres. The applicant's daughter purchased a set of wheels and tyres from the respondent on 15 July 2014 for the sum of $1,950.00. The wheels and tyres were too large for the vehicle, and the vehicle was returned to the respondent. The respondent performed work on the wheel arches of the vehicle to allow the wheels and tyres to fit. The applicant's daughter paid a further $150.00 for such work. The applicant alleges the cost of repairing the damage to the vehicle is greater than the value of the vehicle.

THE CLAIM

The applicant claimed damages of $19,000.00, with the amount constituted by the "insured value" of the vehicle ($16,000.00); the cost of the wheels, tyres, and work to the guards of the vehicle ($2,100.00); towing of the vehicle ($100.00) and the cost of various expert reports and filing fees. The application did not seek an order for repair of the vehicle. The applicant was adamant at the hearing that no order was sought that the respondent repair the vehicle, and the only order sought was for damages.

THE HEARING

Prior to the matter proceeding to hearing, the Tribunal encouraged the parties to resolve the dispute, in accordance with Section 37 of the Civil and Administrative Tribunal Act 2013. The parties were unable to resolve the dispute, and the matter proceeded to hearing.
Soon after the commencement of the hearing, the applicant sought an adjournment so that the applicant could obtain further expert evidence, or to supplement the expert evidence that had been filed and served in the proceedings. No satisfactory explanation was provided as to why the applicant had not obtained, and filed and served, its evidence in accordance with the directions of the Tribunal on 17 March 2015. The reason given was that the applicant only realised during the hearing that the applicant may need further evidence after the Member raised potential evidential difficulties the applicant had in his case. The respondent opposed the hearing being adjourned.
When the matter was listed before the Tribunal on 17 March 2015, the Tribunal made orders that the applicant file and serve documentary evidence (including expert reports) on or before 24 March 2015, after having enquired with the applicant how long the applicant sought to obtain, file, and serve, its documentary evidence. The orders also directed that if a party required an extension of time to file and serve documentary evidence, a written application could be made to extend the timetable, provided the application was made in writing to the Registrar no later than the day prior to the date for filing and serving documentary evidence. The orders also set out that if documents were not filed and served in accordance with Tribunal directions, the Tribunal may not allow any further documentary evidence unless leave is granted, and the parties were "encouraged to obtain advice".
The decision whether or not to grant an adjournment is discretionary, and the Tribunal must consider the interests of both parties in the context of the just, quick, cheap and efficient resolution of proceedings under Section 36 of the Civil and Administrative Tribunal Act 2013 (Hamoud v State of New South Wales [2011] NSWCA 375 at [131]-[145]). The Tribunal refused to grant the adjournment application in circumstances where the applicant had ample opportunity to obtain advice and relevant evidence, including expert evidence. Further, to grant an adjournment solely to allow a party to fortify its evidence when it realised there were deficiencies in the evidence is not in the interests of justice, because it would lead to a potentially endless cycle of adjournment applications, and delay in the finalisation of litigation. Such further delay would cause more expense to the respondent and consume more resources of the Tribunal, which is inappropriate in the context of proceedings where the amount in dispute is less than $20,000.00.
At the commencement of the proceedings, the applicant also sought leave to amend the claim to add claims for the 'inconvenience' of Ms Cameron not having the vehicle; and loss to her business. The Tribunal rejected the application to amend, as such further claims were not properly quantified; no evidence had been served to support such claims; no previous application had been made to amend the application; the respondent did not consent to the proposed amendments; and to allow the amendments would have been futile, as Ms Cameron was not a party to the proceedings.

APPLICANT'S EVIDENCE

The applicant relied on the following documentary evidence: 1. A certificate of insurance from Shannon's Insurance in respect of the vehicle, stating that the vehicle had comprehensive insurance and the "agreed value" was $16,000.00. This document had not been filed and served in accordance with Tribunal directions, but the respondent did not object to the document being admitted as evidence; 2. A tax invoice from the respondent to "Tamika" (sic) dated 15 July 2014 for 4 wheels and tyres in the sum of $1,950.00; 3. A tax invoice from the respondent to "Tamika" (sic) dated 21 July 2014 for "guard work" in the sum of $150.00; 4. Copies of emails and text messages between the parties dated 21 July 2014; 22 July 2014; 23 July 2014; 25 July 2014; and 12 August 2014; 5. Photographs of the wheels and tyres of the vehicle; 6. Statutory declaration of Tomica Cameron dated 11 March 2015; 7. Report of Alan Morcombe of Wreck A Mended Smash Repairs dated 29 August 2014. The report is unsigned and comprises of less than 2 pages; 8. Emails from Lindsay Cluff, Parts Interpreter of Trivett comprising of two pages with 2 diagrams, one entitled "Single Components for Body-Side Frame" and the other "Floor Parts Rear Exterior"; 9. Photographs of the vehicle, including photographs of the inner mud guards of the vehicle, which the applicant stated had been taken by Wreck A Mended; 10. Report entitled "General Condition Report" of IVIC (Int Vehicle Integrity Centre) comprising of 2 pages. The report is not signed, but it states the "technician's name" as "Gary Lajkoski". Attached to that report is a further 1 page document entitled "General Condition Report" by "Independent Collision Assessments & Recovery Solutions" which is unsigned, but has the name "Daniel Ojeda, ICARS Australia" at the bottom of the document. Attached to this document are further photographs of the vehicle; 11. An invoice from IVIC dated 13 February 2015; 12. An invoice from J and J Towing dated 17 February 2015 in the sum of $99.00 for towing the vehicle between IVIC at Moorebank, and the applicant's residence;
The applicant's oral evidence (given by Ms Stokes; Ms Cameron, and the applicant) can be summarised as follows: 1. The applicant's vehicle was purchased at auction in 2012 for $14,500.00, having done just under 100,000 klms. At all relevant times, the vehicle was comprehensively insured for an "agreed value" of $16,000.00; 2. The vehicle was registered and insured in the applicant's name, but the vehicle was regularly driven by his daughter; 3. When the vehicle was purchased at auction, it had standard BMW alloy wheels on it. However, at some earlier stage, the vehicle had wider wheels on it, and the lips of the wheelarch guards of the vehicle had been "rolled" (i.e. turned inward for greater clearance between the wheel and the guard); 4. On 15 July 2014 Ms Cameron took the vehicle to the respondent and looked at wheels and tyres. She spoke to "Alex" at the respondent. On the advice of Alex, she chose 4 alloy wheels and tyres. Ms Cameron went home while the respondent made enquiries as to whether the wheels she had chosen were in stock. Later that day, she received a phone call from Alex that the wheels were now in in stock. Ms Cameron returned to the respondent and the wheels and tyres were fitted. Ms Cameron was not informed that the wheels may be too large for the vehicle. Ms Cameron paid the respondent $1,950.00 for the wheels and tyres; 5. When driving the vehicle back to her parent's house from the respondent, Ms Cameron noticed "scraping and clunking" noises, and the vehicle was difficult to steer; 6. When Ms Cameron arrived home, she spoke to her father. The BMW wheels and tyres which were in the rear of the car were removed, and the car was taken for a test drive. The vehicle remained difficult to steer, and the noises continued; 7. The applicant took the vehicle to a panel beater, Wreck-A-Mended on 18 July 2014 (Mr Morcombe). The applicant was informed the guards of the vehicle had been 'rolled' previously, and there was nothing the panel beater could do. The panel beater stated the wheels were too big for the car; 8. The applicant telephoned the respondent, and informed the respondent of the problem with the vehicle. He was told to bring the vehicle back to the respondent, who would "fix the problem"; 9. The applicant and Ms Stokes left for a holiday to Vietnam. On 21 July 2014, Ms Cameron took the vehicle back to the respondent. When at the respondent, she spoke to "Alex" and "Hussein". Ms Cameron was unhappy with the way she was treated, stating she was kept waiting for a long period, and spoken to in a rude manner. The respondent modified the inner guards of the vehicle, by cutting sections out of the guards so that the wheels would fit. A wheel alignment was also performed. Ms Cameron stated that she was not told what the respondent was doing to the vehicle. She was charged $150.00 for the work, and paid that amount; 10. When the vehicle was driven home by Ms Cameron, the problems remained. She took the vehicle to Gemstar Automotive, and the mechanic told her the wheels were too big for the car; 11. Ms Cameron drove the vehicle home, and the vehicle has not been driven since. In respect of the vehicle being taken for expert examination, it was sent on a trailer; 12. After the work performed by the respondent to the vehicle on 21 July 2014, the applicant and Ms Stokes had various discussions with the respondent in respect of the dispute, but the dispute has not been able to be resolved; 13. Ms Cameron asserted that she had been inconvenienced by not being able to drive the vehicle, and she was forced to use her parent's vehicles.

Report of Mr Alan Morcombe, Wreck-A-Mended Smash Repairs dated 29 August 2014

Mr Morcombe states that he inspected the vehicle on 18 July 2014, and the report sets out what he saw. He states he told Ms Cameron "the wheels were just too big for the car". Mr Morcombe states that the vehicle was returned "3 weeks later" and again inspected. Mr Morcombe states as follows: "Both wheels were removed and the inner wheel arches were inspected with images attached. Both inner front inner wheel arches had been cut away where the wheels had been obstructed, restricting the turning circle, needing liners to be fitted. The rear wheel arches have had severe damage caused by cutting off the inner guard lip, which is where the outer quarter panel is welded to the inner wheel arch, leaving both panels now separated and weakening the structural integrity of the vehicle. To rectify this problem correctly using manufacturer's specifications would be a major job, to remove and replace both rear quarter panels and inner wheel arches, being very expensive. I have advised the owner that this vehicle is no longer safe to drive because if it is involved in a rear end accident, it would not absorb the impact as it was designed to and would significantly endanger passengers and children seated in the rear of the vehicle".
Importantly, although Mr Morcombe states that it would be a "major job" to rectify the vehicle, his report does not set out precisely what needs to be done to rectify the vehicle, nor the cost of such rectification work. In addition to photographs of the vehicle, Mr Morcombe's report also contains emails from Mr Lindsay Cuff, "Parts Interpreter" at Trivett (which is a BMW dealership). Mr Cuff's emails contain 2 diagrams and a description of relevant part numbers. Hand written on the diagrams are the words "These parts are required to replace the inner wheel arch that has been cut away which is part of the structural frame of the vehicle". Again, the emails from Mr Cuff do not set out the cost of the parts identified.

Report of Executive Automotive Pty Ltd, Mr Elvio Modolo, dated 28 August 2014

Mr Modolo states that he is an "authorised RTA (sic) inspector" and his business is "an authorised inspection station". Mr Modolo states that when the applicant's vehicle was inspected, the speedometer reading was 119,523 klms. Mr Modolo states the vehicle is "unroadworthy" and "will not pass rego" due to the wheels being too large and too wide. He also states that the rims of the wheels have been "machined excessively" and are in a damaged state. Further, Mr Modolo states the "inner guards have been cut away and outer guard which has been previously rolled has been crimped and shaved (machined)".
Mr Modolo states that the wheels and tyres have been "stored and bagged at our facility awaiting Tribunal outcome at owner's request" (although the date of the report is approximately 5 months before Tribunal proceedings were commenced).
Mr Modolo's report does not set out the work required to rectify the vehicle so that it is roadworthy and can pass registration, nor the cost of such rectification work.

Report of Int Vehicle Integrity Centre (IVIC) dated 30 January 2015

The report of IVIC is constituted in two parts. The first part is a 2 page report by Mr Gary Lajkoski who is stated as being a "technician". The report states that the speedometer reading of the vehicle was 123,880 klms (i.e. approximately 4,000 klms more than the reading in the report of Mr Modlolo dated 28 August 2014). The report states that the inspection was conducted "by an internationally accredited IVIC technician". The report does not state what Mr Lajkoski's qualifications are, or what "international accreditation" he has.
The report identifies 7 "faults found" with the vehicle. The report concludes as follows: "It is our expert opinion there is evidence to conclusively determine that the cutting of the left hand and right hand rear wheel arch which extends into the inner wheel arch frame has compromised the safe integrity of this vehicle. If this vehicle was to be involved in a rear accident, it would not perform as the manufacturer has intended. The subsequent cutting of the left hand and right hand inner and outer wheel arch does not comply with (a) Recommended manufacturers specifications; (b) Has compromised the safe integrity of this vehicle; (c) Has diminished the value of this vehicle. This vehicle would be uneconomical to repair and should be considered to be a write off".
Importantly, the report does not set out the cost of rectification of the vehicle. There is no evidence as to the cost of parts, nor the cost of labour, nor the hours of labour required to rectify the vehicle. There is nothing in the report to establish the value of the vehicle, nor to support the assertion that the cost of repairing the vehicle is greater than its value.
The IVIC report contains a further 1 page document by Daniel Ojeda of "ICARS Australia-Independent Collision Assessments & Recovery Solutions. Again, there is no information in the report to ascertain what Mr Ojeda's qualifications are, or how long the "onsite visual inspection" was conducted for. Mr Ojeda lists 8 vehicle faults. He concludes: "It is my expert opinion that the company that carried out the above work did not refer to any form of vehicle Manufacturer specification Repair/Replacement procedures which now compromises the safety and future resale value of the vehicle. Due to the cutting away of the rear Quarter Panel & outer wheel arch pinch weld/Lips this vehicle would require those items replaced by a licenced Factory BMW repairer however, the cost in doing so would be uneconomical and the vehicle would be deemed a Total Loss/Write Off".
Again, the report of Mr Ojeda does not set out the cost of rectifying the vehicle, nor what the market value of the vehicle is. There is an absence of information to support Mr Ojeda's opinion that the vehicle "would be deemed a Total Loss/Write Off".

RESPONDENT'S DOCUMENTARY EVIDENCE

The respondent had no documentary evidence that had been filed and served in accordance with Tribunal directions.

RESPONDENT'S EVIDENCE

Mr Chahine asserted that he had spoken to the employees of the respondent who had dealt with Ms Cameron. No direct evidence was called by the respondent from such witnesses. Mr Chahine stated that he did not believe, based upon what he had been told, that Ms Cameron had been pressured to purchase the wheels and tyres, nor treated badly. He claimed that at all relevant times Ms Cameron wanted the wheels in question, even if it meant the vehicle needed to be modified so that the wheels would fit.
Mr Chahine stated that the respondent had offered to arrange for a suitably qualified mechanic to rectify the vehicle, and remained prepared to do so.

JURISDICTION

The applicant is a "consumer" within the meaning of Section 3 of the Consumer Claims Act 1998 ('the CCA') and the matter is a "consumer claim" within Section 3A of the CCA. The application has been filed with the Tribunal within the limitation period contained in Section 7 of the CCA.
Although the contract in respect of the sale of the wheels and tyres was between Ms Cameron and the respondent, the applicant is the owner of the vehicle and the Tribunal is satisfied that Ms Cameron was acting as the agent of the applicant (Petersen v Maloney (1951) 84 CLR 91 at 94). Accordingly, the Tribunal is satisfied that it has jurisdiction.

RELEVANT LEGAL PRINCIPLES

By reason of Section 28 of the Fair Trading Act 1987, the provisions of the Australian Consumer Law 2010 apply in NSW. Sections 60 and 61 of the Australian Consumer Law 2010 ('the ACL') state: "60 Guarantee as to due care and skill If a person supplies, in trade or commerce, services to a consumer, there is a guarantee that the services will be rendered with due care and skill. 61 Guarantees as to fitness for a particular purpose etc. (1) If: (a) a person (the supplier ) supplies, in trade or commerce, services to a consumer; and (b) the consumer, expressly or by implication, makes known to the supplier any particular purpose for which the services are being acquired by the consumer; there is a guarantee that the services, and any product resulting from the services, will be reasonably fit for that purpose. (2) If: (a) a person (the supplier ) supplies, in trade or commerce, services to a consumer; and (b) the consumer makes known, expressly or by implication, to: (i) the supplier; or (ii) a person by whom any prior negotiations or arrangements in relation to the acquisition of the services were conducted or made; the result that the consumer wishes the services to achieve; there is a guarantee that the services, and any product resulting from the services, will be of such a nature, and quality, state or condition, that they might reasonably be expected to achieve that result. (3) This section does not apply if the circumstances show that the consumer did not rely on, or that it was unreasonable for the consumer to rely on, the skill or judgment of the supplier. (4) This section does not apply to a supply of services of a professional nature by a qualified architect or engineer.
Further, under Section 54 of the ACL, there is an implied consumer guarantee that goods are of "acceptable quality", and under Section 55 of the ACL, goods must be fit for any disclosed purpose.
Sections 60 and 61 of the ACL are terms implied by statute into any relevant contract giving rise to damages for breach of contract, and are not independent statutory causes of action (Arturi v Zupps Motors Pty Ltd (1980) 49 FLR 283; Zuvela & Anor v Geiger [2007] WASCA 138 at [11] and [39]-[43], dealing with the consumer guarantee provisions of the Trade Practices Act 1974, which are reflected in the ACL).
If a contract is breached, damages are to be assessed to put the party in the position it would have been had the contract been performed, not in a better position. If breach of contract results in the need for rectification work, the usual measure of damages will be cost of rectification unless it is unreasonable for a party to recover damages assessed on such a basis (Bellgrove v Eldridge (1954) CLR 613; Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272). If it is unreasonable for damages to be assessed on this basis, damages may be assessed on loss of value. The innocent party must take reasonable measures to avoid loss as a result of the breach (Burns v MAN Automotive Pty Ltd (1986) 161 CLR 653), but it is the party in breach who must prove the innocent party failed to take reasonable measures to mitigate its loss.
If a party proves breach but there is difficulty in assessing damages, a Court or Tribunal is not relieved of the task of assessing damages merely because the task is a difficult one, or because the circumstances do not allow the damages being assessed with certainty (Howe v Teefy (1927) 27 SR (NSW) 301 at 306). However, this principle is distinguished if the reason for the difficulty in assessing damages arises from the inadequacy or absence of evidence of the applicant in proving loss. In such cases, the applicant is only entitled to a nominal amount for damages (JWL (Vic) Pty Ltd v Tsiloglou [1994] 1 VR 237 at 241; Airloom Holdings Pty Ltd v Thales Australia Ltd [2011] NSWSC 1531 at [68]; Lifehealthcare Distribution Ltd v Nicholas [2011] NSWSC 661 at [165]-[166]). The Tribunal cannot simply "pluck a figure out of the air" due to the inadequacy of the applicant's evidence on loss (Troulis v Vamvoukakis [1998] NSWCA 237). "Nominal damages" means a very small amount of money, usually ranging between $1.00 and $100.00, depending on the type of dispute.

APPLICATION OF LEGAL PRINCIPLES TO FACTS

The Tribunal is satisfied the applicant has proved that the respondent breached Sections 54 and 55 ACL in respect of the sale of wheels that were clearly too large for the applicant's vehicle. The Tribunal is satisfied the applicant has proved that the respondent breached Sections 60 and 61 of the ACL in respect of the work it performed modifying the applicant's vehicle in an attempt to make the wheels fit properly within the guards of the vehicle. There is no evidence that the respondent's employees were properly qualified to make modifications to the vehicle, nor that Ms Cameron gave informed consent to the modifications. The applicant provided evidence that the modifications to the vehicle have affected the applicant's ability to register the vehicle and its roadworthiness. Despite the fact that the guards of the vehicle had been modified prior to the vehicle having been purchased by the applicant, it is clear that the respondent made further modifications to the vehicle in an attempt to get the wheels to fit.
Even if the respondent's submission is accepted that Ms Cameron wanted the vehicle modified so that the wheels remained on the vehicle because she liked the wheels, the simple fact is that the respondent should have informed her that the wheels were too big for the vehicle, and refused to sell her those wheels. To make modification to the vehicle which potentially affected the roadworthiness of the vehicle, and without any approval of Roads and Maritime Services or engineer's certification of the work performed, is a clear breach of the relevant provisions of the ACL set out above.
The Tribunal is satisfied the applicant has proved that the respondent's breach of the ACL should be compensated by refund of the monies paid to the respondent for the cost of the wheels and tyres; and the amount paid in respect of the modification of the vehicle. However, it is not appropriate that the applicant be refunded the cost of the wheels and tyres without a corollary order that the applicant return the wheels and tyres to the respondent, as the applicant would be doubly compensated if the applicant retained the wheels and tyres.
However, although the applicant has sufficient evidence to prove breach of the relevant consumer guarantee provisions of the ACL, the applicant's claim that the respondent pay damages on the basis that the vehicle is a 'write off' (i.e. the respondent should pay damages on the basis that the cost of repairing the vehicle is in excess of the value of the vehicle) is untenable for the following reasons: 1. No evidence was provided of the market value of a 2005 model 120i BMW having travelled the kilometres the applicant's vehicle had travelled, such as an expert valuation report; an extract from Glass's Guide; or an extract from Redbook.com.au (both Glass's Guide and Redbook.com.au providing values for used vehicles). The fact that the applicant had comprehensively insured the vehicle for $16,000.00 does not mean that the market value of the vehicle is $16,000.00; 2. Whatever the value of the vehicle, the expert evidence provided by the applicant does not contain any details of the cost of rectifying the vehicle. None of the expert reports provided say how much parts would cost to rectify the vehicle, nor how much labour would be required; nor the cost of labour. Rather, the reports of the applicant simply assert that it would be "uneconomic" to repair the vehicle, without setting out the basis for such a conclusion. The reports of IVIC and Wreck-A-Mended do not set out the qualifications and expertise of the persons providing the expert opinion, and are so deficient as to content that, even if they constitute expert evidence, little if any weight should be given to such opinions (Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588) while taking into account that strict rules of evidence do not apply in this type of dispute in the Tribunal.
As there is no adequate evidence of the cost of rectification of the vehicle, nor any adequate evidence of any loss of value of the vehicle; and the absence of such evidence is the responsibility of the applicant, the Tribunal can only award nominal damages for the physical damage to the vehicle by reason of the modifications to the inner guards by the respondent. The Tribunal awards nominal damages of $100.00.
In respect of the other amounts claimed by the applicant (towing expenses; the cost of expert reports; and filing fees in the Tribunal) the Tribunal rejects such claims. The cost of expert reports and filing fees in the circumstances of this matter are legal costs and the Tribunal is not satisfied there are special circumstances under Section 60 of the Civil and Administrative Tribunal Act 2013 to justify any costs order. The only receipt provided in respect of towing expenses arise from the towing of the vehicle to IVIC, and this expense arises solely due to the preparation of the report (rather than repairs to the vehicle).

CONCLUSION

For the above reasons, the Tribunal makes the following orders: 1. Respondent to pay the applicant $2,200.00 on or before 14 days from the date of this decision; 2. Applicant to return the wheels and tyres to the respondent on or before 14 days from the date of this decision. G J Sarginson General Member Civil and Administrative Tribunal of New South Wales 30 June 2015 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: 28 August 2015

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