This is an appeal from a decision of the Consumer and Commercial Division of the Tribunal awarding the respondent $10,000 for damages for the cost of repairing the damaged motor of a Toyota Supra motor vehicle.
The appeal was filed within the relevant time period under Cl 25 of the Civil and Administrative Tribunal Rules 2014 (NSW).
The appellant is a licenced motor mechanic and was the respondent to the proceedings below. The respondent is the owner of the motor vehicle and was the applicant in the proceedings below. In this decision, any reference to "the consumer" is a reference to the respondent to the appeal, and any reference to "the repairer" is a reference to the appellant.
The salient facts are not in dispute. In July 2019 the consumer sought a quote from the repairer for a rebuild of the motor of his Toyota Supra motor vehicle. The vehicle had previously had modifications to its motor to improve performance.
In August 2019, the repairer quoted $7,500 plus GST to perform the rebuild. The consumer accepted the quote and delivered the vehicle to the repairer. The consumer previously informed the repairer that the vehicle also had potential damage to the rear differential and the consumer had purchased a replacement differential. The repairer informed the consumer that this aspect of the repairs would have to be performed by a third-party. There was subsequently an agreement to the third party replacing the differential, but damage to the differential is not pertinent to the dispute.
Between August 2019 and October 2019, the repairer conducted the rebuild of the motor. In late October 2019 the repairer organised for the vehicle to be sent to a third party, Auto Clinic, for the engine to be tuned. Auto Clinic informed the repairer that there were difficulties starting the motor and the when the motor operated there was unexpected noise.
The vehicle was then returned to the repairer, who performed further work including removing and inspecting the cylinder head of the motor. The vehicle was sent by the repairer to the third party to install the new differential. The vehicle was then returned to the repairer and remained at its workshop.
There continued to be issues with the engine being noisy. After discussions between the parties, the repairer disassembled the motor and inspected the piston conrods. A mutual decision was made for the conrod bearings to be replaced, with the consumer supplying the relevant parts. The repairer did not accept that its previous work had damaged the conrod bearings.
The repairer reconstructed the engine. There were delays involving issues with the differential and a fire in the workshop of the repairer that delayed the vehicle being returned to the consumer.
In November 2019 the vehicle was sent by the respondent to another tuner, Motorsport Mechanical, who tuned the motor. Motorsport Mechanical had raised misfire issues regarding the vehicle.
On or about 6 December 2019 the consumer was informed the work was complete and he could collect the vehicle upon payment.
On 6 December 2019 the consumer collected the car from Motorsport Mechanical and paid both the repairer and Motorsport Mechanical for the work performed.
On 7 December 2019 when driving the vehicle, the consumer heard a loud knocking noise from the motor, and immediately stopped driving the vehicle. The consumer estimated he had driven the vehicle 96 klms between collecting the vehicle and hearing the loud knocking noise.
The consumer complained to the repairer, and the repairer immediately denied responsibility.
Without further driving the vehicle, the consumer arranged for the vehicle to be taken to a licensed mechanic, Powertune Australia, who stripped down and rebuilt the motor.
The consumer commenced proceedings in the Tribunal on 3 January 2020 seeking damages for the cost of repairing the motor of the vehicle.
The matter was heard by the Tribunal on 20 April 2020. Both parties had filed and served documentary evidence prior to the hearing. At the hearing, the consumer had sought damages of $14,189.75 for the cost of repairing the motor based upon a report and quotation from licenced mechanic Powertune Australia. The cause of action asserted by the consumer was that the repairer had failed to comply with the statutory warranty in consumer contracts under s 60 of the Australian Consumer Law 2010 ('the ACL') to perform work with due care and skill.
The documentary evidence before the Tribunal included reports from two mechanics (Mr Chea of Powertune Australia for the consumer; and Mr Farhat for the repairer) and photographs of the engine.
The hearing was conducted by telephone, in accordance with COVID-19 restrictions on face to face hearings in the Tribunal at the relevant time.
The Tribunal heard oral relevantly from:
1. Mr Vella.
2. Mr Strogylos.
3. Mr Chea, a mechanic at Powertune Australia.
4. Mr Farhat, a mechanic who is not an employee of Mr Strogylos, but regularly performs sub-contract work for him.
The Tribunal reserved its decision and issued a decision on 21 April 2020 containing written reasons.
In respect of damage to the motor, the competing evidence regarding the type and probable cause of damage was given by Mr Chea and Mr Farhat.
According to the reasons of the Tribunal, Mr Chea gave evidence that there were a number of possible causes of the damage to the motor, but that the most likely cause was that there was bearing damage due to the engine being starved of oil. When Powertune Australia had inspected the motor, they had found the sump had only 2.5 litres of oil, and for a motor with the performance characteristics of the motor, 6-7 litres of oil should have been in the sump.
The Member's reasons state at para [10] that Mr Chea's evidence on the issues of cause and responsibility for the damage was as follows:
"…Powertune stated that they found an oil leak from the engine sump which was related to the engine rebuild work carried by the respondent. They stated that there was excessive silicon applied to the outside of the sump which was not normal practice and showed that it was applied after the engine was assembled. Powertune did state that there were also other possibilities, including the incorrect tuning, but their opinion was that the most likely cause of the engine failure was the oil leak through the sump. Powertune stated that from their repairer (sic) bill approximately $10,000 was attributable to the respondent, if they were held responsible for the engine. The applicant stated that he has no problems with the vehicle after Powertune carried out repairs".
Mr Farhat and Mr Strogylos opined that the cause of the damage to the engine was that Motorsports Mechanical had caused the damage due to incorrect tuning resulting in pre-detonation; or the fuel/air mixture being too lean; causing damage to the conrod bearings and damaging the engine.
The Member accepted the evidence of Mr Chea regarding the cause of the damage to the motor, and that respondent had failed to perform services with due care and skill.
The reasons of the Member efficiently, but comprehensively, explain why the Member was satisfied the actions of the respondent had caused damage to the motor, and why the services had not been performed with due care and skill. The Member noted that neither party had obtained a report from a completely independent expert witness; but that there was no reason not to accept the evidence of Mr Chea as to what Powertune had found when it stripped down the motor and Mr Chea's views as to the cause of the damage.
The Tribunal did not accept the evidence of Mr Farhad (or gave that evidence little weight) because Mr Fahad performed sub-contract work for Mr Strogylos, and that neither he nor Mr Strogylos were independent, in the sense that both had a vested interest in the outcome of the proceedings (unlike Mr Chea, in circumstances where Powertune Australia had been paid for its work and was not a party to the proceedings).
On the issue of causation and the potential that Motorsports Mechanical was the sole cause of the damage to the engine rather than the repairer, the Member found at paras [15]-[16] that the fact that the engine had failed within 2 days and 96 klms after the consumer took possession from the repairer was consistent with the cause of the damage being the oil leak, which had arisen from the actions of the repairer in failing to ensure that adequate oil was in the engine and could not escape through the sump of the engine.
On the issue of quantum, the Member accepted the evidence of Mr Chea that, of the amount Powertune Australia had charged the consumer to rebuild the engine, some of the costs were not attributable to damage caused by the repairer, but $10,000 was attributable to the repairer.
[2]
Scope and nature of internal appeals
Internal appeals may be made as of right on a question of law, and otherwise with leave (that is, the permission) of the Appeal Panel: s 80(2) Civil and Administrative Tribunal Act 2013 (NSW) ('the NCAT Act').
An appeal is not merely an opportunity for an unsuccessful litigant to re-argue their case at first instance. An error of law or error to which leave to appeal is required under Sch 4 Cl 12 of the NCAT Act must be established: Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10].
In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel set out at [13] a non-exclusive list of questions of law:
1. Whether there has been a failure to provide proper reasons;
2. Whether the Tribunal identified the wrong issue or asked the wrong question;
3. Whether a wrong principle of law had been applied;
4. Whether there was a failure to afford procedural fairness;
5. Whether the Tribunal failed to take into account relevant (i.e., mandatory) considerations;
6. Whether the Tribunal took into account an irrelevant consideration;
7. Whether there was no evidence to support a finding of fact; and
8. Whether the decision is so unreasonable that no reasonable decision-maker would make it.
The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Schedule 4 of the NCAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that:
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 Collins v Urban [2014] NSWCATAP 17 (Collins v Urban), the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Schedule 4 may have been suffered where:
… there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance.
Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Schedule 4, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b).
In Collins v Urban, the Appeal Panel stated at [84] that ordinarily it is appropriate to grant leave to appeal only in matters that involve:
(a) issues of principle;
(b) questions of public importance or matters of administration or policy which might have general application; or
(c) 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 which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand;
(d) a factual error that was unreasonably arrived at and clearly mistaken; or
(e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed.
[3]
Grounds of Appeal
Six ground of appeal were identified in the Notice of Appeal. The grounds of appeal do not clearly delineate between alleged errors on a question of law (for example, that there was no evidence to support a particular factual finding; or that the finding was so unreasonable that no reasonable decision maker could make it) and errors for which leave is required under Sch 4 Cl 12 of the NCAT Act (the grounds relating to the findings of the Member being against the weight of evidence).
However, consistent with the appellant's acknowledgement in the Notice of Appeal that he required leave, the written and oral submissions of the appellant focused upon the decision being against the weight of evidence because although there was some (although insufficient) evidence to support a finding that the actions of the respondent were the cause of the damage to the engine, the Member should not have been satisfied on the balance of probabilities on the evidence that the actions of the appellant (rather than Motorsport Mechanical) had caused the engine to fail. In making these allegations and promoting these grounds, the appellant challenged some specific findings made by the Tribunal.
We are satisfied that the Member clearly made factual findings on the issue of causation and identified the failure of the repairer to provide services with due care and skill. We are also satisfied that there was evidence to support each of the findings; and that the findings were not so unreasonable that a reasonable decision maker could not have made them based on the evidence. No errors of law have been established.
On that basis, the grounds relied on and submissions of the appellant, when considered in the context of the reasons of the Tribunal, are that the findings were against the weight of evidence; or that the decision was not fair and equitable. Such grounds are purported errors to which leave to appeal is required under Sch 4 Cl 12 of the NCAT Act.
[4]
Consideration
The appellant submits that there was not sufficient evidence for the Member to find, on the balance of probabilities, that the actions of the appellant caused the damage of the motor, and cites decisions of the Tribunal and the Appeal Panel where consumers had failed to discharge the burden of proof.
However, causation is a finding of fact. In the context of breach of contract or breach of a consumer guarantee under the ACL, the relevant test is whether, as a matter of common sense, the relevant act or omission was a cause of the damage, and not necessarily the sole cause: Alexander v Cambridge Credit Corporation Ltd (1987) 9 NSWLR 310; Chand v Commonwealth Bank of Australia [2015] NSWCA 181 at [153]-[171].
In its submissions, the appellant relies upon an extract of the evidence at the hearing involving an interaction between the Member and Mr Chea commencing at 48.28 of the sound recording, where Mr Chea stated that he couldn't say "with certainty" that the appellant, rather than Motorsport Mechanical, was the cause of the damage to the motor.
We have listened to the sound recording of the hearing. The extract of the recording referred to in the appellant's submissions was taken out of context, and the whole of Mr Chea's evidence must be considered. The evidence of Mr Chea continued beyond what we were referred to by the appellant, as follows:
51.05
Mr Chea - I can say for sure that this engine came with not enough oil and being a high-performance engine, this is in my opinion the most likely cause of this happening. A performance engine with this much oil in it it's, it's(sic) bound for a problem.
51.29
Member - But you don't know why it doesn't have enough oil?
Mr Chea- I could see that it was leaking. There was a leak in this engine and I could see at the back of this engine, when they, when somebody assembles the engine, the glue, a silicon and on one part of this engine where the oil was coming from you could see that it was applied differently and it looks like it had been applied either externally or smeared on for whatever reason a totally different way than the rest on the engine and this is where the oil leak was coming from this area, part of the engine and I could see that someone had tried to take an oil leak there and tried to fix it in the (unintelligible) process of this engine to try to rectify this oil leak. That was my conclusion that this engine would have had not enough oil at the time. When it came to my shop it didn't have enough oil in this engine to keep it running happily.
52.30
Member- As part of normal engine rebuild would this be an area that the respondent would cover and check and make sure of?
Mr Chea - 100%
We raised this part of the sound recording with the parties during the appeal. We read to the parties our understanding of what was said. We offered to play the recording to the parties at the appeal hearing if there was any dispute.
Mr Stomo, Solicitor for the appellant, agreed that the words as set out above were in evidence before the Member, but continued to submit that there was insufficient evidence for the Member to make findings in favour of the consumer on the issues of breach and causation.
We are satisfied that the Member acted appropriately in weighing up the competing evidence on the issues of breach and causation. It is not necessary in every case that a successful party must provide expert evidence by way of an independent expert who has adopted the NCAT Expert Witness Code of Conduct to prove its cause of action: Khan v Kang [2014] NSWCATAP 48 at [47]-[53]. Ultimately, it is a matter of considering all of the relevant lay and expert evidence; making factual findings; and applying the correct legal test to determine whether a party succeeds or fails in its case.
The appellant also claimed that the decision was not fair and equitable because he was denied the opportunity to inspect the motor after it failed the second time and before works were carried out by Powertune Australia. This issue was not raised before the Member as preventing determination of the application, and in accordance with the well-established principles set out by the High Court in Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1 at 9-15 the appellant cannot raise this issue afresh on appeal to argue that the decision was not fair and equitable.
In any event, we find it difficult to comprehend how the decision was not fair and equitable in circumstances where the appellant denied from the outset that it was responsible for the damage to the motor and maintained that position throughout the litigation. The appellant had the opportunity to put forward its own expert evidence; the opportunity for its expert to comment upon the expert evidence of the respondent and photographs of the motor when it had been stripped down by Powertune Australia; and the opportunity to cross examine Mr Chea and put to him that the damage to the motor was not caused by the appellant. The Member, in our view, weighed the evidence and made appropriate factual findings on the available evidence.
We are not satisfied that the appellant has established that the decision was not fair and equitable or against the weight of evidence such that we may go on to consider whether the appellant may have suffered a substantial miscarriage of justice as a result and then whether to grant leave to appeal. No relevant fresh evidence was relied upon by the appellant.
The appellant also raised that the Member erred by accepting the evidence of Mr Chea on the quantum of loss. In circumstances where this was the only evidence regarding the cost of repairs; the repairs had been performed and the cost incurred by the consumer; and there was no competing evidence that the cost was excessive or unreasonable, there was no error in the Member accepting this evidence and awarding the consumer damages of $10,000.
There are two further issues to deal with. At the appeal hearing, the respondent consumer sought leave to rely upon further evidence that was not before the Member. We refused to grant leave. In any event, the appellant has been unsuccessful in the appeal.
Secondly, both parties stated that, whatever the outcome of the appeal, no order for costs would be sought.
[5]
Conclusion
Leave to appeal is refused.
The appeal is dismissed.
[6]
Orders
1. Leave to appeal is refused.
2. The appeal is dismissed.
3. The stay of order 1 of the Tribunal in Matter MV 20/00227 granted by the Appeal Panel on 28 May 2020 is set aside, and the Appeal Panel Registry directed to pay any monies held in trust pursuant to the stay order to the respondent, Joshua Vella, immediately.
[7]
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: 31 July 2020