Mr Andrew Dowling, Customer Experience Compliance Manager.

1. In this proceeding, the Applicant, Mr Peter Mackie, claims damages from the First Respondent, Volkswagen Group Australia Pty Ltd (Volkswagen) and the Second Respondent, Michael Beamish (Mornington) Pty Ltd, each of whom carried out work on Mr Mackie's 2008 model Volkswagen Touareg V10 R50. At the time of the events that gave rise to this proceeding, Michael Beamish (Mornington) Pty Ltd operated a Volkswagen service franchise under the trading name of Peninsula Volkswagen. In these reasons I refer to Michael Beamish (Mornington) Pty Ltd as Peninsula.
2. Mr Mackie purchased the car in 2012 in South Australia from a private vendor. At the time he purchased the car it was approximately four years old and had driven 48,000 kms. The car was out of warranty at the time Mr Mackie acquired it.
3. Mr Mackie serviced the car himself from 2013 to 2015, and in 2016 he took the car to Peninsula for investigation of oil contamination of the coolant. Peninsula investigated and carried out some works over a period of some two months but did not identify the root cause of the contamination. In March 2017 Mr Mackie was contacted by Volkswagen, who arranged for the car to be reviewed by another Volkswagen franchise, Bayford Camberwell. Bayford Camberwell carried out investigations over a five month period. Bayford Camberwell has not been joined to these proceedings.
4. Mr Mackie's claim is for $73,100.64, which he says is loss or damage he has incurred as a result of failures by Volkswagen and Peninsula to comply with the consumer guarantees relating to services under the Australian Consumer Law (ACL). A table showing the components making up his claim is at paragraph 15.
5. I conducted a hearing over 5 days commencing on 10 December 2018. I heard evidence from Mr Mackie, and from his expert witness, Mr Glenn Newitt. Volkswagen was represented by their Customer Experience Compliance Manager, Mr Andrew Dowling. Volkswagen called an expert witness, Mr Geoff Senz Peninsula also called an expert, Mr Andrew George, as well as Mr Driton Uki, an employee of Peninsula. At the close of the giving of evidence I adjourned the proceeding to enable the parties to make final written submissions. Having received and considered those written submissions I now provide my decision and reasons for decision.

1. Mr Mackie's application to VCAT described his claim as relating to "services". However, in his summary documents, Mr Mackie states "[u]nder Australian Consumer Law, owners are entitled to a replacement or a refund (at the owner's discretion) if the vehicle has a major problem". Mr Mackie then states that he believes that the car had "a major problem". If Mr Mackie's claim were based on the consumer remedies relating to a major failure of goods, it would be misconceived.
2. The consumer remedy of replacement or refund is in section 259 of the ACL. That remedy is available in relation to goods that do not comply with the consumer guarantees applicable to goods. Those guarantees apply only to goods supplied in trade or commerce. The relevant time for determining whether goods meet the consumer guarantees applicable to goods is the time at which the goods are supplied to the consumer.[1] Mr Mackie's evidence was that he acquired the car in 2012 from a private seller. The acquisition was therefore not in trade or commerce. The consumer guarantees as to acceptable quality of goods do not apply to Mr Mackie's acquisition of the car. Further, Mr Mackie also gave evidence that the car ran "beautifully" until 2016.
3. Mr Mackie clarified in the hearing that his claim was only in relation to the services provided by Volkswagen and Peninsula.
4. Mr Mackie's claim therefore relates solely to allegations of failure to comply with the consumer guarantees relating to services that are provided by the ACL. The consumer guarantees relating to services are that services supplied in trade or commerce to a consumer will be:

1. rendered with due care and skill;[2] 2. reasonably expected to achieve any specified result requested by the consumer;[3] and

1. supplied in a reasonable time.[4]
2. Section 267 of the ACL permits a consumer to bring an action against a supplier of services where there has been a supply of services in trade and commerce, and a failure to comply with a guarantee set out in sections 60, 61 and 62 of the ACL.
3. Subsection 267(2) of the ACL sets out the action that a consumer may take if the failure to comply with the guarantee can be remedied and is not a major failure. In that situation the consumer may require the supplier to remedy the failure, or, if the supplier refuses or fails to do so, the consumer may either have the failure remedied and recover all reasonable costs incurred by the consumer in having the failure remedied or terminate the contract for the supply of the services.
4. Subsection 267(3) of the ACL sets out the action the consumer may take if the failure is a major failure. In that circumstance the consumer may either terminate the contract for supply of the services or recover compensation from the supplier for any reduction in the value of the services below the price paid or payable for the services.
5. Subsection 267(4) of the ACL empowers a consumer to take action for any loss or damage suffered by the consumer because of a failure to comply with the guarantee if it was reasonably foreseeable that the consumer would suffer that loss or damage as a result of the failure.
6. In this proceeding, the issues I must determine are:

1. Did Volkswagen and Peninsula supply services in trade and commerce to Mr Mackie? 2. If so, was there a failure by Volkswagen or by Peninsula to carry out those services in accordance with the guarantees set out in sections 60, 61 or 62 of the ACL?

1. If there was a failure to comply with a guarantee, was the failure a major failure within the meaning of subsection 267(3) ACL?

1. If the failure was not a major failure, were the costs claimed by Mr Mackie incurred in having the failure remedied?

1. If the failure was a major failure, was there a measurable reduction in the value of the services provided?
   1. Was any loss or damage claimed by Mr Mackie incurred as a reasonably foreseeable result of the failure to comply with a guarantee?

1. The components of Mr Mackie's claim are as follows:

Nationwide towing from Mr Mackie's home to Sequential Automotive.

Invoices of Sequential Automotive dated 29 August 2017, 30 November 2017 and 20 December 2017.

1. On 15 April 2016 Mr Mackie took his car to Peninsula for assessment because he had found oil contamination in the coolant reservoir. Mr Mackie had owned the car for approximately eight years by this time. The odometer reading at was then 220,000 kms. Mr Mackie had driven some 170,000 kms since he had acquired the car.
2. Peninsula initially quoted $1,000 to undertake the assessment and repair. Peninsula was not at first able to determine the cause of the oil in the coolant but suggested that the problem might be associated with the water pump. Peninsula quoted $5,000 to investigate and repair the water pump. Mr Mackie says Peninsula justified the high quote as being due to the water pump being located behind the engine, necessitating removal of the engine and the associated labour costs of doing this. Mr Mackie believed that the water pump was at the front of the engine, and that it should not be necessary to remove the engine to access it, but he says he reluctantly agreed to Peninsula's quotation and proposed course of action.
3. Testing of the water pump at Peninsula did not disclose the source of the problem and Peninsula suggested to Mr Mackie that the pump be sent to another provider for specialised testing. That testing identified a problem with the water pump, which Peninsula say they repaired.
4. The car was with Peninsula for 65 days. Mr Mackie was provided with a courtesy car only for 4 of those days. Mr Mackie says that he required a car for his work as a building consultant, to enable him to visit building sites. Mr Mackie did not provide evidence of any costs incurred by him while the car was with Peninsula.
5. Mr Mackie was invoiced $8,600 by Peninsula for this work. Mr Mackie objected to the invoice on the basis that the initial quote for investigation had been $1,000, and the quote for the works had been $5,000. Further, Mr Mackie considered the invoice amount to be excessive, given that the water pump was, as Mr Mackie believed, at the front of the engine. Peninsula reduced its invoice to $7,950, and Mr Mackie paid the invoice. Mr Mackie seeks to recover most of this amount. In the hearing Mr Uki gave evidence that the cost to Peninsula had been $9,600 including some $3,500 for the supply of parts. Mr Mackie did not dispute that these parts were installed in the car, but he maintains that he was overcharged for this work because it was not necessary to remove the engine to do the work, and much of the charge relates to the replacement of seals and gaskets consequent on the removal of the engine.
6. Peninsula had not been able to effect a lasting solution to the oil problems in the car and the invoice included a recommendation that Mr Mackie return the car every 1,000 kms for a further flush.
7. On 1 July 2016, 20 July 2016, 29 July 2016 and 18 August 2016 Mr Mackie returned to Peninsula. Three further coolant flushes were carried out, and a pressure test. During this time, the odometer readings recorded on the invoices by Peninsula showed that Mr Mackie drove approximately 4,648 kilometres. The last invoice, dated 18 August 2016, noted "customer to return after trip for inspection."

1. Shortly after this, Mr Mackie drove the car to Adelaide and back, a round trip of some 1,450 kilometres. He says that while in Adelaide the car developed a misfire. Mr Mackie believes Peninsula caused the misfire problem. While in Adelaide, the car required an oil top up of approximately one litre of oil, which Mr Mackie considered most unusual. Mr Mackie says also that a sump hose became disconnected during that trip, which he believes had not been correctly installed by Peninsula.
2. Mr Mackie has claimed $110for one litre of engine oil which he said he had to purchase in Adelaide. The evidence he has submitted in support of this claim is a copy of a bank transaction record documenting a purchase on 19 February 2017 at 12.00am for "Automotive parts and accessories" for $122.04. The invoice does not record that it is for a litre of oil. The date of the invoice is several months after the trip to Adelaide. On this evidence before me, I am not satisfied that the expense was incurred as asserted by Mr Mackie.

1. Mr Mackie took the car back to Peninsula on 29 September 2016. Peninsula carried out the further inspection and recommended new oil filter housing. Mr Mackie decided against this as he considered the cost of $3,000 to be excessive. Mr Mackie says he no longer had confidence in Peninsula and did not return.

1. Mr Mackie says that in January 2017, he purchased one litre of coolant flush, and carried out an engine flush himself. Mr Mackie claims $105.90 for the purchase of the coolant flush. His evidence of the purchase is an invoice dated 13 January 2017 from Liquid Intelligence in NSW which shows he was charged $94.49 for one litre of coolant flush and $22 freight, a total of $116.49 including GST.
2. Mr Mackie's explanation in the hearing for this purchase was that he spoke to the Managing Director of Liquid Intelligence who suggested to him that diesels often have a problem with their heat exchangers and their oil coolers, that the difference in temperature between them causes cracking. Mr Mackie said he was informed that the Liquid Intelligence product would "remove it under the right conditions". Mr Mackie said that he did this because he was not confident that Peninsula had carried out the flushing correctly when he had taken the car back to them. Mr Mackie acknowledged that it was a big job to undertake the engine flush by himself without proper equipment. Although he attempted around 10 flushes, oil contaminant still remained."[5]

1. On 24 January 2017 Mr Mackie purchased a set of injectors on eBay from United Fuel Injection in Western Australia for $3,695. The evidence submitted by Mr Mackie for this purchase is a copy of the eBay transaction record. That record describes the goods purchased as "10 x VW TOUAREG 5.0L V10 TDI Reconditioned Bosch Injector 0414720309. FULL SET". Mr Mackie's claims reimbursement of this cost.
2. I did not find Mr Mackie's evidence in the hearing persuasive as to what prompted him to make this purchase. At first he stated that this had been recommended to him by Masters Automotive Pty Ltd. However, as I set out below, only 2 invoices from that company were submitted in evidence and they were dated 22 February 2017 and 9 March 2017. In response to questions about whether the injectors were fitted and if they were, by whom, Mr Mackie stated that he decided against having Masters do that work because Masters would have done the work "at enormous cost" and Mr Mackie thought "I've already spent a lot of money on the car. I don't want to keep on spending on it if it's not going to be the problem".[6] Mr Mackie said he spoke to "a few of his race mechanic friends and they suggested that they could assist him putting in the injectors."[7] Mr Mackie was unable to say whether, and if so, on what date, the injectors were installed, and by whom. Mr Mackie suggested in the hearing that Masters calibrated the injectors to the engine's management system. The invoices from Masters do not record that work.

1. Mr Mackie took the car to Masters Automotive Pty Ltd (Masters) on 22 February 2017. Masters' invoice records that they cleaned the EGR filter, pipes, assembly and cooler, cleaned the inlet manifolds and "carried out intake and port and valve decarbon and walnut blast.", and that, on the final road test the car was "found to be running well".[8] The charge was $3,330. I note also that the invoice records that the mirrors were "not adjusting from the knob" and that there was some squealing from the front right hand brake. The odometer reading on the Masters invoice is 239,360kms, which indicates that the car had driven some 11,000 kilometres since it had been seen by Peninsula in September 2016.
2. Mr Mackie took the car back to Masters on 9 March 2017. On that occasion Masters undertook investigation into a "misfire". The invoice records that after their investigation they drove the car over 60 kilometres and "could not replicate the misfire", and "could not fault the vehicle running".[9] Masters charged Mr Mackie $2,364.00 for this work. The odometer reading on their invoice was 239,460. The car had been driven 100 kilometres since the work done on 22 February 2017. Mr Mackie claims the cost of the two Masters' invoices.
3. Masters' invoice of 9 March 2017 also included comments that they had "found several solder unions to have poor connection and cracked", "wires to ECU to be crushed and insulated not broken (sic)" and "the injector plug to the slave ECU seems at some point to have been exposed to extreme heat as there is some sign of melting."[10] Mr Mackie asserts that these findings demonstrate that the work of Peninsula had not been carried out with due care and skill.

1. Mr Mackie says that Masters informed him that Peninsula should carry out further repairs under the warranty relating to the works they had done in 2016. Mr Mackie says he had not yet contacted Peninsula, when he received a customer satisfaction survey from Volkswagen about the service provided by Peninsula. Mr Mackie says he completed the survey registering his dissatisfaction that the issues affecting his car were not resolved by Peninsula despite a significant period of time off the road.
2. Volkswagen tendered a copy of a letter sent by Mr Mackie to Peninsula and copied to the CEO of Volkswagen Australia, dated 5 March 2017. That letter states that Mr Mackie completed a customer survey on 7 October 2016. It also conveys Mr Mackie's request for monetary compensation for inadequate services, and his intention to file an application in VCAT.
3. Mr Mackie was contacted by Volkswagen customer relations staff who invited Mr Mackie to have another Volkswagen service franchise, Bayford Camberwell, examine the car. Mr Mackie agreed to this. Volkswagen transported the car to Bayford Camberwell at their cost in March 2017.

1. Volkswagen says that it arranged for Bayford Camberwell to review the car as a gesture of good will. There was at this time no warranty on the car. A number of investigations were carried out and parts replaced, in consultation with Mr Mackie. Volkswagen covered all costs involved.
2. Bayford Camberwell identified that the fuel injectors installed in the car were "reconditioned, non-genuine parts". These were replaced with new "genuine" parts in order to rule out any impact these may have had on the car's performance. As further repairs were done, the car continued to be tested. By the end of June, Volkswagen says that it made the decision not to fund any further investigation or repairs. By that time, Volkswagen had formed the view that the problems with the car had been in existence for some time.[11]
3. On 10 July 2017 Bayford Camberwell met with Mr Mackie to review the work done on the car by them. Volkswagen had prepared a short written report for Mr Mackie, which Volkswagen tendered at the hearing. The report states that on receiving the vehicle two faults were identified. The first was the car running rough and misfiring at idle. The second, which received the initial attention, was that oil was mixing with the coolant.
4. The report prepared by Volkswagen included the following statements:

"We can confirm that both faults were pre-existing to any repairs carried out, and taking into account the high mileage, the oil pressure concern can be due to wear and tear items within the engine lubrication system....

Moving forward, it is our understanding that Bayford Volkswagen Camberwell has provided you with recommendations and quotations for further work to be completed, should you wish to proceed at your expense.

Whilst we can appreciate that you have not had a good experience over the past 12 months, we note that your vehicle's warranty expired 24 March 2012, which was before you purchased the vehicle in December of that same year, and has now driven in excess of 240,000km. In addition, only the first three services up to 45,000km were completed within the Volkswagen Network and as such we are unable to confirm the additional 13 services that should have been completed asper the manufacturer's servicing schedule of 15,000/12 months, whichever comes first.

In light of the above, any further work required on your vehicle will need to be at your expense....."[12]

1. Mr Mackie explained in the hearing that the parts recorded in the report as having been installed appeared to him to be incomplete. Because of this, Mr Mackie formed the view that the work done by Bayford Camberwell was not of a satisfactory standard.
2. Mr Dowling said that Volkswagen prepared recommendations and quotations for further work on the Tiguan. Mr Mackie said in the hearing that he refused to see these at the time.[13] Mr Mackie confirmed, in cross examination, that he was not prepared to proceed at his own expense any further.[14]
3. On 14 July 2017 the car was returned to Mr Mackie. Mr Mackie and Volkswagen agreed in the hearing that the car was not able to be driven at that time.

1. Mr Mackie claims $38.92 charge incurred on an e tag owned by him which he says were for trips on the South Eastern Freeway taken by the car while it was at Bayford Camberwell. Mr Mackie says these trips were not authorised by him, and that Volkswagen is liable to compensate him for that cost.
2. Volkswagen says it is not aware of the car leaving Bayford Camberwell at any time.
3. Mr Mackie has submitted a copy of a statement for his CityLink account which shows trips taken on 8, 9 and 10 May 2017 using eTag ending in 8123. Also shown on Mr Mackie's CityLink statement are 5 eTags and 3 car registrations linked to his account. The registration plate details of the 2008 Touareg are listed separately from the eTag for which the charge of $38.92 is made. Mr Mackie did not submit any evidence to show that he had linked the eTag ending in 8123 to his Touareg. On the evidence before me I am not satisfied that there is sufficient conclusive evidence to find that these charges were incurred as Mr Mackie asserts.

1. On 25 July 2017, Mr Mackie sourced and paid for a second hand engine from E Brooks Car Sales in Warsop, Nottinghamshire, in the United Kingdom for GBP 4,225.00 or AUD $7013.50. The vendor appears to be a private individual.
2. Mr Mackie paid Global Freight Services $2,488.20 to ship the engine to Australia. Global Freight Services Pty Ltd is located in East Malvern Victoria. Their invoice records that the engine arrived in Melbourne on 5 October 2017.
3. Mr Mackie says that Bayford Camberwell and Peninsula damaged the engine of the car through their actions, and that as a result he had no other option but to obtain a replacement engine.

1. On 29 August 2017 Mr Mackie took the car to Sequential Motors. They undertook pressure testing and diagnosed the car having 2 cylinders low compression. The odometer reading was 240423. Sequential Motors issued an invoice for $385 which Mr Mackie paid on 7 September 2018. The invoice does not include any recommendation for replacement of the engine.
2. On 30 November 2017 Sequential carried out work on the car. The invoice states:

"remove engine and transmission from vehicle, separate engine from transmission, swap over injectors from one motor to another, remove and clean inlet manifolds, remove turbos and have them checked, swap over heat exchanger, replace oil soaked water hoses.".

1. This work was plainly the first stage of the engine replacement. The odometer reading was 240,435. Sequential charged Mr Mackie $8,624.71 for this work.
2. On 20 December 2017 Sequential fitted the new engine. The odometer reading was 240467. The charge for this work was $4,985.80. Mr Mackie drove the car to his home, where it remains, and is driven by him from time to time. Mr Mackie explained in the hearing that he considers the car to be "a collector's item" "a very rare car" and for this reason he does not drive it every day.

1. Mr Mackie gave evidence that while the car was at Bayford Camberwell, he required a car in order to continue his work as a building consultant. Initially, Mr Mackie was able to borrow a car, a Jeep, from a friend. Later, he says he thought he should "do the right thing" and purchase the car from his friend. This he did on 8 January 2018 for $29,000. Mr Mackie claims $31,761, the amount he paid for the car, together with expenses associated with the roadworthy certificate, registration and insurance for the car.
2. Peninsula and Volkswagen both say that this expense does not represent loss or damage. They say that Mr Mackie has acquired an asset, which is of real value to him, and that the costs of registration, insurance and road worthy certificate are necessary costs associated with the acquisition of the car. Further, they say that the cost was incurred some months after the car the subject of this proceeding was returned to Mr Mackie, and some months after replacement of the engine.
3. Mr Mackie says that he needed use of the car for many months before he made the purchase, and that this was a foreseeable consequence of the car remaining with Bayford Camberwell for so long.
4. Mr Mackie confirmed in the hearing that he still owns the car the subject of this proceeding, that it is garaged at his home, and that he still drives it from time to time. Mr Mackie also confirmed that he does not intend to dispose of the Touareg in the near future, although he is contemplating selling the Jeep.
5. I accept that Mr Mackie required the use of a car while his car was at Bayford Camberwell. One might anticipate that a person in Mr Mackie's situation might have asked Volkswagen to provide him with a replacement car. No evidence was given by either Mr Mackie or Volkswagen on this point. The fact that Volkswagen had made those arrangements as a favour to Mr Mackie may have had some bearing on this. Alternatively, one might expect Mr Mackie to take taxis or to hire a replacement vehicle. In such circumstances, Mr Mackie would have an obligation to ensure that the loss he claimed was appropriately constrained. The purchase of a car for $29,000 does not reflect an appropriate minimisation of costs. Mr Mackie has not yet disposed of the Jeep, and cannot therefore demonstrate the extent of loss, if any, he would suffer following disposal. Under the circumstances, I find that the cost associated with the purchase of the Jeep does not represent a reasonably foreseeable loss or damage suffered because of a failure to comply with the consumer guarantees relating to the provision of services.

1. Mr Mackie called Mr Glenn Newitt, owner and director of Sequential Automotive Pty Ltd, as expert witness. Mr Newitt is a qualified motor mechanic and auto electrician with 25 years' experience in the automotive industry. In his report he states he has been self employed as a diesel mechanic expert and auto electrician for 18 years. Mr Newitt prepared a report which did not comply with the VCAT Practice Note PNVCAT2 on Expert Evidence in several respects. His report is dated 19 September 2018 and records that he inspected Mr Mackie's car in August 2017. Subsequently, in December 2017, Mr Newitt was engaged by Mr Mackie to carry out repairs entailing the replacement of the car's engine. Mr Newitt does not have the independence of Mr Mackie that is expected of an expert witness in VCAT proceedings.
2. Mr Newitt's report records the briefing provided to him by Mr Mackie, and the results of compression testing undertaken by Mr Newitt using PicoScope equipment. Those tests showed that 2 cylinders were "down on compression". It appears that Mr Newitt's Report relies on the diagnosis he carried out on 29 August 2017. Mr Newitt's report stated "[m]echanical problem can only be assume it was due to the servicing workshop at VW removing the intake components system, as Peter's only complaint before this was oil in the cooling system.".[15] This statement is an expression of an assumption. It is not a reasoned analysis setting out the information relied upon by the expert, applying their expertise. Mr Nevitt expressed the opinion that the water pump said to have been removed by both Peninsula and Bayford Camberwell did not appear to him to have been removed.
3. Mr Newitt's report concludes:

"My diagnosis testing of Peter's VW Touareg... found that a mechanical problem might have been caused during the VW servicing works carried out the removing of intake components during locating oil in the water system (sic). I suspect that the low compression is caused from a mechanical issue either from damaged piston rings, cylinder linings or the valves not seating correctly, causing low compression on two cylinders. The low compression would have caused the engine to over compensate with more fuel causes (sic) the engine's computer's (sic) to turn off the located injectors to prevent further damage to the engine and diesel particulate filter, causing the engine to run rough and in time if still driven would have gone into limp mode.".

1. In cross examination it was put to Mr Newitt that his report did not record his opinion of the root cause of the failure of the car. Mr Newitt agreed that he did not make such finding as it would be too expensive to carry out that investigation. Mr Newitt said that Mr Mackie "had made his mind up to get a new engine."

1. Peninsula called Mr Andrew George of Sigma Tech to give expert evidence. Mr George holds a Bachelor of Mechanical Engineering from Swinburne Institute of Technology, and has extensive experience in the industry. Mr George prepared his report on 26 October 2018 from documents supplied to him by Peninsula. He did not inspect the engine, given that the engine had been replaced in December 2017.
2. The documents reviewed by Mr George included the invoices issued by Peninsula, Masters and Sequential, and the report prepared by Bayford Camberwell.
3. Mr George notes that "the coolant contamination issue was difficult to diagnose, evidenced by the fact that four separate expert service providers were involved by the Applicant, but were not able to identify a clear failure mode to resolve the issue.".[16]
4. He concludes "due to the large number of ancillary engine systems that were replaced over the various service operations, it is likely that [Sequential] correctly identified that a defect in the engine block was the cause of the coolant contamination issue. The resolution of this defect would require a replacement engine, as was performed.".[17]

1. Volkswagen called Mr Geoff Senz, a consultant working in the fields of motor vehicle accident reconstruction and mechanical failure inspection. Mr Senz is a qualified automotive mechanic, who has undertaken extensive work over more than two decades for a range of public authorities in New South Wales into mechanical failure analysis.
2. Like Mr George, Mr Senz prepared his report after considering the available documents. Mr Senz noted that the absence of service records seemed to suggest that Mr Mackie had serviced the car himself from August 2013 until April 2016. Mr Senz noted that the documents submitted to Volkswagen by Mr Mackie did not include air filter element purchases "which could compromise injection and ignition of fuel into the engine due to restriction.".[18] I note that Mr Mackie is not a qualified motor mechanic, and, on his own evidence, was not experienced with Volkswagen cars, as the Tiguan was his first Volkswagen.
3. Mr Senz did not consider the alleged increased consumption of oil on the trip to Adelaide to be unusual, or to be indicative of a fault.[19] Mr Senz rejected the assertion by Mr Mackie that the engine misfire could have been due to electrical wiring faults, noting that cylinder misfiring is unlikely to have an electrical causation.[20] Mr Senz concluded that the engine misfire was more likely than not to be the result of "normal wear and tear".[21] In conclusion, Mr Senz was of the opinion that "the coolant contamination was most probably caused by a cracked block".[22]
4. In the hearing, Mr Senz examined photographs produced by Mr Newitt which were said to be of the cylinder heads. Mr Newitt confirmed that the photographs were taken after the cylinder heads had been cleaned. Mr Senz pointed to scrape marks on the rocker and other indicators of wear and tear. Mr Senz expressed the opinion that these were consistent with low pressure.

1. Mr Mackie seeks a refund of the amount paid to Peninsula, $7,950.00, on two grounds. The first is that Peninsula failed to resolve the oil leak problem. The second is that much later he formed the opinion that the seals on the water pump were incorrectly fitted by Peninsula, and for this reason he says that the water pump was not repaired with due care and skill.
2. Further, Mr Mackie says that although the car was able to be driven over 1,400 kilometres after it left Peninsula, it developed a misfire. Mr Mackie says that Peninsula caused the car to develop a misfire. Mr Mackie took the car to Masters; but they were not able to replicate the misfire or to fault the car's running. Mr Mackie also relies on the statement in the Masters invoice that on dismantling the engine there were faults with the way the car had been reassembled. No witness from Masters was called to give evidence of the faults they had identified. I must do the best I can on the evidence before me.
3. As I have noted above, the ACL permits a consumer who suffers loss because of a failure by a supplier to comply with the consumer guarantees. Mr Mackie asks the Tribunal to find that because Peninsula were not able to determine the cause of the oil leak in his car, and because Masters say there were faults in assembly of the car, Peninsula failed to comply with the guarantees as to due care and skill and fitness for purpose.
4. I note that the car was able to be driven to Adelaide and back after it left Peninsula. I note that the invoices prepared by Masters were for cleaning the EGR and injectors, indicating that the oil leak continued, and that they were not able to resolve it either. I note also that Masters were not able to replicate the misfire Mr Mackie says had developed. I note also that Bayford Camberwell ultimately concluded that the car's problems had been of long standing.
5. The guarantee that services will be carried out with due care and skill requires that the provider of services must have an acceptable level of skill in the particular area of activity involved in the supply of services.[23] Neither the invoice comments by Masters, nor the hypothesis by Mr Newitt amount to evidence that Peninsula did not carry out the services it provided with due care and skill.
6. The guarantee that services will be fit for purpose, is, in the case of service or repair to motor vehicles, necessarily a guarantee that the services will meet the implied purpose of repair, that is, that the services will be reasonably fit for that purpose.
7. It is axiomatic that modern cars are complex machines, with parts that deteriorate with wear. This was not a case in which a car developed a fault which should have been identified earlier through regular servicing by the one mechanic. On the contrary, the evidence before the Tribunal was that, for a period of around 4 years, Mr Mackie's car had not been serviced according to the Volkswagen service schedule by a qualified mechanic[24]. Investigating a problem will necessarily be complex in such circumstances.
8. Significantly, Peninsula had acknowledged that they had not yet found the cause of the oil contaminating the coolant, and had given Mr Mackie a quotation for further investigative work. Mr Mackie decided not to accept that recommendation. It was his prerogative to make that decision, however, Mr Mackie's decision does not operate to cause Peninsula's services not to be reasonably fit for purpose.
9. The evidence before me does not support a finding that Peninsula did not comply with the consumer guarantees as to due care and skill and reasonably fit for purpose.

1. On the evidence before me, I am not satisfied that Mr Mackie is entitled to claim damages from Volkswagen for the work carried out by Bayford Camberwell.
2. As I have noted above, a claim for damages under section 267(4) may be brought by a consumer where there has been a failure to comply with the guarantee in section 60. The guarantee in section 60 is that services supplied to a consumer in trade or commerce will be rendered with due care and skill. I must consider whether services were supplied to a consumer in trade and commerce.
3. I am satisfied that the services performed by Bayford Camberwell were supplied in trade or commerce, because, as a Volkswagen franchisee, such work is necessarily in trade or commerce.
4. I turn now to whether Mr Mackie is the "consumer" of those services.
5. The term "consumer" is a defined term in the ACL. This means that where the term is used in the ACL, the defined meaning is intended. The definition of "consumer", in relation to services is

A person is taken to have acquired particular services as a consumer if, and only if:

1. the amount paid or payable for the services, as worked out under subsections (4) to (9) did not exceed:

1. if a greater amount is prescribed for the purposes of subsection (1)(a) - that greater amount; or

1. the services were of a kind ordinarily acquired for personal, domestic or household use or consumption.

1. Only subsection 3(4) is relevant to the calculation of the price of the services in this proceeding. That subsection reads:

For the purposes of subsection (1) or (3), the amount paid or payable for goods or services purchased by a person is taken to be the price paid or payable by the person for the goods or services, unless subsection (5) applies.[25]

1. No evidence was put before the Tribunal that the amount paid or payable for the work carried out by Bayford Camberwell exceeded $40,000. Volkswagen met the costs of the services. Volkswagen suggested that as Mr Mackie was not the person who purchased the services provided by Volkswagen through Bayford Camberwell, he was not a "consumer" of those services within the meaning of the ACL.
2. The definition of "consumer" in subsection 3(3) does not include a requirement that the consumer have paid for the services. Although subsection 3(4) of the ACL introduces the concept, of the "amount paid or payable for the goods or services purchased by a person (emphasis added)" into the definition of "consumer", that subsection is enlivened only where it is necessary to work out the value of the services. The value of the services is only relevant to the definition of "consumer" where the services are not within paragraph 3(3)(b), that is, not services of a kind ordinarily acquired for personal, domestic or household use or consumption. Clearly, the services were of a kind ordinarily acquired for personal, domestic or household use or consumption.
3. The term "acquire" is also defined in the ACL, and, in relation to services, is defined as "accept". Mr Mackie ultimately "accepted" the services rendered by Bayford Camberwell when he took the car back from them. In my view, the services were supplied to Mr Mackie, as the owner of the car. I am not satisfied that Mr Mackie was a "consumer", for the purposes of the ACL, of services provided by Volkswagen through Bayford Camberwell. However, if I am wrong in that assessment I should consider whether the evidence before the Tribunal shows a failure by to render those services with due care and skill.
4. Mr Mackie relied on the report of Mr Newitt. Mr Newitt is the only witness at the hearing who had physically examined the car. Mr Newitt did not report that his examination of the car showed evidence of a failure by Bayford Camberwell to render services with due care and skill. At the highest, Mr Newitt was only able to say "a mechanical problem might have been caused during the VW servicing works carried out the removing of intake components during locating oil in the water system". This statement is, at best, mere hypothesis. It is not evidence.
5. Mr Mackie has not discharged the obligation on him, as the applicant in this proceeding, to satisfy the Tribunal that there has been a failure to exercise due care and skill by Volkswagen or by Bayford Camberwell.

1. Mr Mackie's claim seems to proceed from an assumption that if either Peninsula or Bayford Camberwell had been able to get to the bottom of the problem with the car, Mr Mackie would have had the car repaired and he would not have needed to replace the engine. The evidence before me does not support such an assumption. Mr Mackie made it clear to Peninsula that he wanted them to find a solution at low cost. He disputed the $7,950.00 cost even though it likely reflected less than the actual labour hours spent on the car. He declined to have further work done at a cost of $3,000.
2. On the evidence before me I conclude that, despite all of the investigation by Peninsula, Masters, Bayford Camberwell and Sequential, no-one was able to arrive at a cost effective resolution of the problem for one reason. That reason is the one put forward by Volkswagen, and endorsed by Mr Senz: there was an underlying flaw in the engine which could only be remedied by replacing the engine. The ultimate course of action which Mr Mackie settled on was the only real solution. Given Mr Mackie's reaction to cost of the Peninsula invoice, it is not surprising that such a solution was not proposed earlier.
3. Both Peninsula and Masters attempted to remedy potential sources of the oil leak by addressing obvious possible causes. Bayford Camberwell followed a more comprehensive process. The outcome of those efforts was that there was a continuing loss of oil pressure in the engine, despite replacement of key parts that might have been contributing to that loss of pressure. In my view, this result tends to indicate that there was a "gap" somewhere else that was preventing full pressurisation. If all movable and replaceable parts had been cleaned, checked and replaced where appropriate, any remaining failure of oil pressure could only come from the engine itself. Peninsula had earlier proposed commencing a process of investigation, but Mr Mackie declined to embark on this, considering it too costly.
4. As there is no evidence supporting a finding that there has been a failure to render services with due care and skill, there is no basis on which a claim for damages under section 267(4) can be made out.
5. Even if I am wrong in concluding that the failure to advise that the engine be replaced amounts to a failure to apply due care and skill, I am not satisfied that Mr Mackie has suffered loss as a result of any such failure.
6. Section 267(3) of the ACL sets out the remedies which may be claimed by a consumer where there is a failure to comply with a supply guarantee. Where the failure is a major failure, the consumer may recover compensation for any reduction in the value of the service below the price paid for the services (section 267(3)(b)). The consumer may also 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 (section 267(4)).
7. Mr Mackie received a considerable benefit in that Bayford Camberwell carried out extensive services of at no cost to him. The costs incurred with Peninsula, Masters, and Sequential were costs of investigation of a problem which, more likely than not, was the result of insufficient maintenance while Mr Mackie was servicing the car himself. Mr Mackie described the services he carried out as "regular oil changes". However, as any car owner will know, a modern car has a considerable number of consumable items which require regular replacement, or which may deteriorate with time. Such items are frequently listed in the service schedules produced by car manufacturers. Mr Mackie was unable to give any evidence of such routine replacements having been carried out.
8. I have found that it is more probable than not that the problem that caused the falling oil pressure was not related to any of the parts which were replaced but was due to the state of the engine. Accordingly, therefore, Mr Mackie would have incurred the costs associated with acquiring and transporting the replacement engine, and for its installation, in any event.
9. For these reasons the application is dismissed.

[1] Medtel Pty Ltd v Courtney [2003] FCAFC 151

[5] Transcript of hearing 10 December 2018, page 22

[8] Masters Automotive Pty Ltd invoice dated 22 January 2017

[9] Masters Automotive Pty Ltd invoice dated 9 March 2017

[11] Transcript of hearing 10 December 2018, page 48

[12] Volkswagen Report dated 10 July 2017, page 1

[13] Transcript of hearing 11 December 2018, page 179

[15] Report of Glenn Newitt dated 19 September 2018, page 5

[16] Report of Mr Andrew George page 11

[18] Report of Mr Geoff Senz dated 16 November 2018 page 7

[24] The Tribunal notes that manufacturers such as Volkswagen routinely recommend a number of additional services at intervals such as 90,000km and 150,000km. See, for example, https://au.volkswagen.com.au/service -pricing guide/data/files/Volkswagen%20Passenger%20Vehicle%20Service%20Schedule.pdf

[25] Subsection 3(5) is concerned with mixed supply of goods and services and is not relevant here.