Thompson v Dominelli Group Pty Ltd t/as Dominelli Ford

For the reasons that I gave in Williams, the measure of damages concerning the money equivalent of the plaintiff's entitlement to performance reflects the plaintiff's "performance interest" rather than any consequential loss suffered by the plaintiff. Both measures are reflected in s 272(1) of the Australian Consumer Law, in s 272(1)(a) and s 272(1)(b) respectively. The error that arose in this case from the use of the expression "over-compensation" is the treatment of the former as though it were the latter with the consequence that where the two measures did not coincide Ms Capic was denied the damages to which she was entitled for protection of her performance interest.

The Findings of the Tribunal Under s 54 of the ACL (NSW)

1. We will deal with the findings under s 54(6) of the ACL (NSW) separately.
2. There are difficulties in respect of the Member's findings in respect of s 54(2), taking into account the matters set out in s 54(3). Some authorities were referred to, including that the test of what is of acceptable quality is assessed objectively at the date of supply:Medtel Pty Ltd v Corutney [2003] FCAFC 151; (2003) 130 FCR 182.
3. The critical factual findings in respect of the dismissal of the proceedings against Ford for breach of s 54 were as follows:

(1) The faults in the rear vent were not a "manufacturing defect" and were not present when the vehicle was purchased.

(2) The rear vents became "loose or dislodged" by normal use over the several years" after purchase.

(3) The deterioration of the vehicle was "caused by the applicant failing to take reasonable steps" to prevent the vehicle from becoming of unacceptable quality, by refusing to collect the vehicle on or soon after 23 March 2022.

1. We are satisfied that there was no evidence on which the factual findings referred to in (1) and (2) above could have been made. The clear and unchallenged evidence contained in Mr Marston's report was that the failure of the vents over time was due to deficient manufacturing or design by Ford. Mr Marston was not only unchallenged with respect to that aspect of this evidence, but Ford and City Ford did not seek to tender any expert evidence to contradict Mr Marston's opinion. Nor did Ford or City Ford challenge or in any way test Mr Marston's evidence by seeking to question him at the hearing. Mr Marston's report clearly states that the vents were a latent defect in the vehicle present from the date of manufacture. The fact that the vents manifested their failure by allowing water into the vehicle in 2022 is entirely consistent with Mr Marston's evidence that the vents were a 'manufacturing defect'.
2. In respect of the factual finding that the rear vents became "loose or dislodged" by normal use after purchase, we do not regard that as an inference that was available on the evidence. As Beach J stated in Siegwerk Australia Pty Ltd (in liq) v Nuplex Industries (Aust) Pty Ltd (2016) ALR 443; [2016] FCA 158 at [85]- [88]:

"A finding of causation may be made in the absence of direct evidence. All that is necessary is that the more probable inference from the circumstances that sufficiently appear by evidence, left unexplained, is that the injury arose from the breach. "More probable" means no more than that upon a balance of probabilities, such an inference might reasonably be considered to have some greater degree of likelihood. A party who relies on circumstantial evidence to prove causation must show that the circumstances raise the more probable inference in favour of what is alleged (Flounders v Millar [2007] NSWCA 238 at [35] per Ipp JA, Handley AJA agreeing).

It is not sufficient that the circumstances give rise to conflicting inferences of an equal degree of probability or plausibility or that the choice between them can only be made by conjecture (Coastwide Fabrication & Erection Pty Ltd v Honeysett [2009] NSWCA 134 at [60] per McDougall J, Ipp and Young JJA agreeing). I accept though that the process of inference may involve an intuitive element that is not susceptible to detailed support or explanation (at [64] per McDougall J).

There is a distinction between inference and conjecture even if the reasoning process occurs on a continuum in which there is no bright line division (Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262 at 275 [84] to [88] per Spigelman CJ). A conjecture, even though plausible, is no more than a guess, whereas an inference is a deduction from the evidence. If the deduction is reasonable, the inference may rise to legal proof (Jones v Great Western Railway Co (1930) 144 LT 194 at 202). But there must be objective facts from which the inference could be drawn, otherwise what is left is mere speculation or conjecture (Caswell v Powell Duffryn Associated Collieries Ltd [1940] AC 152 at 169 and 170 per Lord Wright).

Generally, the proper inference to be drawn on the balance of probabilities depends upon a practical and reasonable assessment of the evidence as a whole (BGC Residential Pty Ltd v Fairwater Pty Ltd [2012] WASCA 268 at [51] and [54] per Pullin JA)."

1. In this matter, there was no evidence in Mr Marston's report referring to the vents working loose during normal use; nor was that issue raised with Mr Marston at the hearing by either the Member or the representatives of Ford and City Ford. There is nothing in the Member's reasons to explain the evidence relied upon by the Member to support the factual finding that the vents "worked loose."
2. We are satisfied that this factual finding was also made without evidence, and that it was not a finding that was made on the basis of a practical and reasonable assessment of the evidence as a whole.
3. The next difficulty with the findings regarding breach of s 54 of the ACL (NSW) involves a constructive failure to exercise jurisdiction. The Member referred to s 54 (2) and the matters in s 54(3). However, there is nothing in the reasons to indicate that the Member gave any detailed consideration of the applicable legal principles under s 54 of the ACL (NSW).
4. Even if the vents, and the damage caused by the water ingress, had been repaired in March 2022 by City Ford under the manufacturer's warranty, whether the vehicle was of acceptable quality needed to be assessed objectively at the date of supply, taking into account the criteria in s 54(2) and having regard to all of the matters in s 54(3) of the ACL (NSW). The appellant had purchased a new motor vehicle in August 2018 for approximately $53,000 that had repair issue in 2019, and then a water ingress issue in March 2022 requiring repair. The vehicle had significant corrosion damage which Mr Marston attributes partly to the water ingress due to the rear vents.
5. To properly assess breach of s 54 of the ACL (NSW), the enquiry was not simply whether the vehicle had been adequately repaired under warranty in March 2022 (which form a basis for the factual findings made in respect of the claim against City Ford) but whether the vehicle was:

(1) free from defects under s 54(2)(c) of the ACL (NSW); and

(2) durable under s 54(2)(e) as a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects) would regard as acceptable having regard to the relevant matters in s 54(3).

1. In our view, the Member did not engage in an adequate consideration of s 54(2)(c) and (e) of the ACL (NSW) having regard to all of the matters in s 54(3). As such, we have concluded that there was a constructive failure to exercise jurisdiction.
2. Accordingly, in respect of Ground 1, subject to consideration of the findings under s 54(6) of the ACL (NSW), and our further consideration of whether any appealable error made any difference to the decision, we are satisfied that Ground 1 of the appeal succeeds on the basis of an error on a question of law due to:

(1) No evidence to make a factual finding; and

(2) Constructive failure to exercise jurisdiction.

1. The Member made a factual finding that the appellant not collecting the vehicle for a period of three months had caused the vehicle to be of unacceptable quality: s 54(6)(a) of the ACL (NSW).
2. As s 54(6) is an exception to the consumer guarantee, the onus was upon Ford to prove that the cause of the vehicle being of unacceptable quality was attributable to the acts of the appellant, or because the appellant had failed to take reasonable steps to prevent the vehicle becoming of unacceptable quality: Effem Foods Ltd v Nicholls [2004] NSWCA 332 at [11].
3. There is no reference in paragraph [62] of the Tribunal's reasons that Ford bore the onus of proving the exception under s 54(6) of the ACL (NSW).
4. Causation involves findings of fact, and we are satisfied that the finding under s 54(6)(a) of the ACL (NSW) involves a mixed finding of fact and law from which leave to appeal is required.
5. The finding is predicated on two other implicit findings. The first is that City Ford adequately repaired the vehicle on 23 March 2022. This is partially referred to in the factual finding at [72] where the Tribunal accepted City Ford's evidence, not contained in any witness statement or expert report, but based on a submission that the repairs were adequately conducted and the vehicle "fully dried out"; that City Ford had "dried out the vehicle"; and the appellant had failed to prove it had not.
6. The second implicit finding is that all of the damage causing the vehicle not to be of acceptable quality was caused by the appellant and/or his father failing to pick up the vehicle for a period of three months.
7. There is a clear and obvious difficulty with the findings, irrespective of the factual dispute about whether the appellant and his father were told to collect the vehicle, in circumstances where they had, in substance, sought to reject the vehicle until Ford made a decision about the appellant's "refund" or "buy-back" claim.
8. The difficulty is that the Member failed to consider whether the vehicle was not of acceptable quality in the period to the completion of repairs by City Ford. Section 54(6) of the ACL (NSW) does not apply unless the appellant caused the vehicle to be of unacceptable quality; or failed to take reasonable steps to prevent the vehicle from being of unacceptable quality.

(1) The failure of the appellant or anyone on his behalf caused damage because "it is more probable than not that whilst the Focus sat in the City yard for three months with the windows and doors closed, there was residue moisture and humidity in the vehicle which was thereby activated and continued unbated while the vehicle remained unused and closed up" at para [40].

(2) It is "more probable than not" that had the appellant had collected the vehicle, this would not have occurred. The applicant would have noticed residual moisture in the vehicle and taken remedial action to thoroughly dry out the vehicle. In other words, he cannot complain that City Ford did not do this. Their responsibility was to repair the vents and dry out the obvious water damage: paragraph [41].

(3) There was substantial rainfall in Sydney in February 2022 and "a lot of rainfall" between March to May 2022: paragraphs [44]-[45].

1. Those findings are flawed for the following reasons:

(1) As discussed previously, there is no acknowledgement that Ford bore the onus of proof.

(2) There is no consideration of the separate causal conduct of Ford in respect of the defects in the vehicle.

(3) If there was "residual moisture" in the vehicle after repair by City Ford, there is no consideration of the casual connection between the "residual moisture" and the faulty vents that allowed water to enter into the vehicle.

(4) Ford did not adduce any expert or lay witness evidence to support a submission that s 56(4) of the ACL (NSW) applied.

(5) The transcript does not indicate that it was ever clearly put to Mr Marston; nor the appellant's father by the Member, or by the representative of Ford, that the vehicle had "residual moisture" in it and that the "residual moisture" had caused damage to the vehicle such that it became of unacceptable quality by reason of the appellant failing to collect the vehicle.

(6) The findings of the Member on s 56(4) go beyond simply failing to collect the vehicle. They extend to it being "more probable than not" that the appellant would have "noticed residual moisture," and it would have been the appellant who would have "taken remedial action to dry out the vehicle." Not only was this not put to the appellant for comment at the hearing, but there is also no explanation of how Ford and City Ford had established that these were all "reasonable steps" the appellant should have taken when he collected a vehicle with "residual moisture" in it.

1. In respect of there being separate causes of the vehicle being of unacceptable quality, the well-established test of causation arising from the decision of Mason CJ in March v E & H Stramare Pty Ltd [1991] HCA 12; (1991) 171 CLR 506 that causation is not determined simply by considering the "but for" test, but on a "common sense" analysis of the evidence in a particular case. It is sufficient if actions of a defendant (or respondent) caused, or materially contributed to the injury, loss of damage even if there are multiple causes. As Kirby J stated in Roads & Traffic Authority v Royall [2008] HCA 19; (2008) 245 ALR 653 at [85]- [86]:

"Fourthly, where, as is sometimes argued to be the case, several acts or omissions on the part of contesting parties are alleged to be causes-in-fact of a claimant's damage, the resolution of the contest presents a question of fact that is itself to be decided by reference to the foregoing considerations. The search is not necessarily for "the" cause because, in some cases, two or more factors may be found to have contributed in a legally relevant way to the damage that occasions the action. If, by the foregoing criteria, a conclusion is reached that two or more causes have played a part in causing the damage, legal liability will attach so long as a nominated cause is held to have "materially contributed" to that result. The position under Australian law was correctly described in Henville v Walker by McHugh J:

If the defendant's breach has 'materially contributed' to the loss or damage suffered, it will be regarded as a cause of the loss or damage, despite other factors or conditions having played an even more significant role in producing the loss or damage. As long as the breach materially contributed to the damage, a causal connection will ordinarily exist even though the breach without more would not have brought about the damage.

This exposition puts paid to the suggestion in this appeal that the search must be for "the" cause, as if for legal purposes all damage could simplistically be attributed only to one possible cause on the basis that that is what "common sense" dictates. The law recognises the possibility of multiple causes. So long as they can be classified as contributing "materially" to the occurrence of the damage, it is open to the judicial decision-maker to find causation-in-fact on that basis."

1. It is clear that there may be different causal factors with respect to the damage to the vehicle. Even if the appellant's failure to collect the vehicle from City Ford in a timely manner is found to be a cause of the condition of the vehicle; and the manner in which City Ford repaired (or failed to repair adequately) the vehicle under warranty and stored the vehicle whilst in its possession may have contributed to the condition of the vehicle, that is not of itself sufficient to conclude that Ford had not breached the consumer guarantee under s 54 of the ACL (NSW).

Were the Errors of Law and Errors Giving Rise to Leave to Appeal Against Ford Material to the Outcome?

1. It is appropriate to consider whether it is unarguable that the dismissal of the proceedings against Ford would have occurred irrespective of any error on a question of law, or error of a type requiring leave.
2. This raises two issues:

(1) Whether it is inevitable the Tribunal would have found the appellant was not entitled to damages under s 272 of the ACL (NSW) if he had succeeded against Ford because the appellant had failed to mitigate his "loss" by reason of failing to pick up the vehicle on or soon after 22 March 2022; and

(2) Whether there was sufficient evidence of loss of value or consequential loss that the Tribunal may have awarded damages against Ford under s 272.

1. The Tribunal made no findings on either of these issues.

1. The concept of "mitigation of loss" was referred to by Leeming JA in The Owners-Strata Plan No 2661 v Selkirk [2024] NSWSC 760 at [127]- [129]:

The reference to British Westinghouse is to Viscount Haldane's statement that in a claim for breach of contract the plaintiff is under a "duty" to take all reasonable steps to mitigate its loss. That language is not to be understood as representing the law in Australia, even in cases of breach of contract. I am bound by what was said by the Court of Appeal in Karacominakis v Big Country Developments Pty Ltd [2000] NSWCA 313; 10 BPR 18,235 at [187] :

A plaintiff who acts unreasonably in failing to minimise his loss from the defendant's breach of contract will have his damages reduced to the extent to which, had he acted reasonably, his loss would have been less. This is often misleadingly referred to as a duty to mitigate, although the plaintiff is not under a positive duty. The plaintiff does not have to show that he has fulfilled his so-called duty, and the onus is on the defendant to show that he has not and the extent to which he has not ( TCN Channel 9 Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130 ). Since the defendant is a wrongdoer, in determining whether the plaintiff has acted unreasonably a high standard of conduct will not be required, and the plaintiff will not be held to have acted unreasonably simply because the defendant can suggest other and more beneficial conduct if it was reasonable for the plaintiff to do what he did ( Banco de Portugal v Waterlow and Sons Ltd [1932] UKHL 1; [1932] AC 452 ; Pilkington v Wood [1953] Ch 770 ; Sacher Investments Pty Ltd v Forma Stereo Consultants Pty Ltd [1976] 1 NSWLR 5 ).

That is why the Court of Appeal has, repeatedly, made reference to the "so-called" duty to mitigate: see Galafassi v Kelly (2014) 87 NSWLR 119; [2014] NSWCA 190at [157] ; Edwin Davey Pty Ltd v Boulos Holdings Pty Ltd [2022] NSWCA 65; 20 BPR 42,355 at [75] and see Bak v Glenleigh Homes Pty Ltd [2006] NSWCA 10 at [3] .

Ms Selkirk was not suing for breach of contract. She was seeking damages pursuant to s 106(5) for reasonably foreseeable losses as a result of the owners corporation's breach. Even so, the words "as a result of" connote a requirement of causality. It is unhelpful to pose as the issue whether an applicant has breached a "duty" to mitigate, and it may lead to confusion to frame the issue as whether an applicant's own conduct is "the" cause of her loss, or metaphorically that it "lay with" Ms Selkirk herself. When determining a claim under statute, it is normally better to apply the statute rather than some analogous test from a cognate area of law.

1. It was not inevitable that the Tribunal would have found, irrespective of a finding that Ford had breached the consumer guarantee under s 54 of the ACL (NSW), that the appellant's failure to collect the vehicle, and ventilate it, would have been found to be the sole cause of any s 272 loss.
2. In the context of the legal test of s 54 discussed previously; the legal test of causation; and the evidence previously referred to it is a matter of speculation whether Ford could establish failure to mitigate.

1. The Tribunal made no findings that the appellant had failed to prove loss of value of the vehicle under s 272(1)(a) or consequential loss under s 272(1)(b) of the ACL (NSW).
2. The applicable legal principles have now been clarified by the High Court in Williams.
3. As discussed previously, there was evidence of the purchase price of the vehicle and evidence that the vehicle was, or may be, "unrepairable."
4. We accept the evidence on loss of value of the vehicle could have been more extensive in circumstances where Mr Marston had not given any detailed evidence on this issue; and there was no evidence that set out in detail what was the cost of repairing the vehicle.
5. As was pointed out in Williams, "actual" loss under s 272(1)(b) is a different concept from loss of value under s 272(1)(a).
6. There is reference at [25] of the Tribunal's reasons that "Ford believed the Focus was so corroded as to be unrepairable". It is not clear what evidence the Member based that finding upon. However, no argument was made by Ford in the appeal that the costs of repairing the vehicle were any less than the value of a comparative vehicle of the same age and kilometres that had not suffered the corrosion and water ingress damage of this vehicle. Further, Dominelli Ford had declined to provide a quotation for the cost of repair when the vehicle was taken to Dominelli Ford in 2022.
7. We accept that loss of value under s 272(1)(a) and consequential loss under s 272(1)(b) may have been so difficult to quantify on the basis of the evidence provided that the appellant may have failed to succeed in obtaining a monetary award against Ford. The conceptual difference between damages being difficult to assess on the basis of the evidence as compared to so speculative that no rational assessment can be made is discussed (in the context of damages for breach of contract) by Leeming JA (with whom Ward P and Mitchelmore JA agreed) in Carbone v Fowler Homes Pty Ltd; Fowler Homes Pty Ltd v Carbone [2024] NSWCA 192 at [94]- . However, those principles need to be considered in the context of the principles discussed in in respect of assessment of damages under s 272 of the ACL (NSW).

Accordingly, the appropriate course of action is to uphold the appeal against Ford and remit the proceedings to the Tribunal to be determined according to law. Conclusion-Appeal against Ford

1. We are satisfied that there were a number of errors in the manner in which the Tribunal considered s 54(6) and the issue of causation. Accordingly, the appellant succeeds on Ground 1.
2. We grant leave to appeal in respect of Ground 8, because we are satisfied the appellant may have suffered a serious miscarriage of justice because the decision was not fair and equitable. A failure to apply correct legal principles on the issue of causation and the operation of s 54(6) of the ACL (NSW), together with factual findings that do not clearly arise from the evidence, is sufficient for us to conclude that the appellant may have been denied the opportunity of a better outcome had the Tribunal applied correct legal principles and made findings of fact available to it on the evidence before it.

1. We will deal with the grounds of appeal involving the issue of bailment and then move on to the other grounds of appeal.

1. Grounds 5, 6, and 7 deal with the findings in respect of City Ford's duty as a bailee.
2. The appellant submits that the Tribunal erred in applying a legal test that the appellant had to prove City Ford was "grossly negligent" and that the finding that it was "unreasonable and unrealistic" for City Ford to open the windows and doors in the vehicle was in error.
3. City Ford submits that in substance the Member did not apply the wrong legal test in respect of its duty as a bailee, because any difference between "gross negligence" and "negligence in the circumstances of the case": referring to Tottenham Investments Pty Ltd v Carburettor Services Pty Ltd (1994) Aust Torts Reports 81-292, ("Tottenham Investments") was a distinction without difference. It further submits that it was open on the evidence before the Member for the Member to find that City Ford had not breached its duty by reason of failing to ventilate the vehicle from time to time when it was in its storage yard.
4. At [72] of the reasons for decision, the Tribunal stated:

"The Tribunal finds the evidence of City that it had dried out the Focus by 23/2/22 is persuasive and the applicant has not proved that the Focus was not completely dried out by 23/3/22. In addition, the applicant has not proved that City had an obligation during the three months to check on the Focus and make sure the interior was dry."

1. The Tribunal then went on to find that the basis upon which City Ford retained the Focus was a gratuitous bailee and that, "consistent with that duty, [it] had the obligation to safely keep the Focus."
2. We agree that the proper characterisation of City Ford's role is as a gratuitous bailee since it had completed the works it had been contracted to undertake under the warranty the appellant had with Ford.
3. We consider the Tribunal's reference to "an obligation to safely keep the Focus" to be a summary only, since the Tribunal went on to provide the following reasons:

"75 The classic analysis of bailment identifies six classifications which relevantly includes the custody of goods without reward identified in a very old English case: Coggs v Bernard [1790] EngR 371; (1703) 92 ER 107 at 109 per Lord Holt CJ, cited in Palmer on Bailment 2nd Ed p 3. After the repair was completed, City asked the applicant to collect the Focus, but he did not do so until 18/6/22, as a result, the Focus remained in City's custody in storage until collected on 18/6/222. City did not charge for storage of the Focus, and was thereby responsible for the safe keeping of the Focus, without reward, known as a gratuitous bailment.

76 This raises the question of what was the extent of the responsibility City had for caring for the Focus. Palmer at p 505 says:

"According to orthodox theory, the measure of a bailee's responsibility for a chattel is governed (in the absence of any special contract), by the existence and location of any benefit received. Thus it is said ... unpaid custodian is liable only where his negligence is gross."

77 City was unpaid custodian of the Focus. It follows that the applicant must prove either a special contract requiring City to air the Focus during this time, or City's conduct amounted to a gross negligence by failing to wind down the windows and open the doors to allow it to air out for the 3 months during which the applicant refused to collect it. ...

78 ... the applicant has not proved City was involved in a gross negligence. Negligence required identification of a duty owed by City, and evidence of a breach of that duty. There is no such evidence. In any case, it was by any measure, unreasonable and unrealistic for the applicant to expect City to open the windows and or doors of the Focus over those three months."

1. In the above passages, the Tribunal misdirected itself as to the correct test to be applied regarding the duties and obligations of a gratuitous bailee. The learned author in Palmer on Bailment writes that the distinction between the obligations of a bailee for reward and a gratuitous bailee have eroded over time, and it appears the Tribunal concluded that the standard of "gross negligence" was required a finding of a duty outside the relationship of bailor and bailee and that the adjective "gross" implied proof of a higher level of culpability.
2. It should be noted that the Tribunal was not assisted at first instance by any submissions concerning the degree of responsibility arising for City Ford as gratuitous bailee by any party appearing at the hearing. Whereas, at the hearing of the appeal, the appellant and City Ford referred the Appeal Panel to several relevant authorities including Tottenham Investments at 61,550, in which Kirby P, with whom Gleeson CJ agreed, stated the legal principles governing a case where a car had been stolen from a vehicle repair shop, in circumstances of a bailment for reward, at 61,553-61,554 the President stated:

"The legal principles governing this case are not in doubt:

1. A bailee for reward, such as a bailee for work and labour of the kind performed by the respondent, assumes a duty to take such care of the bailed goods as is reasonable in the circumstances. ... It is essential to bailment that, unless forgiven by the law, the bailee should restore the property bailed to its lawful owner. ...

2. In the event of loss of goods during the bailment, the onus is upon the bailee to disprove that the loss is the result of any negligence on its part. This exceptional shifting of the onus of proof to the defendant derives from the essential obligation of the bailee to restore the property to the bailer and from the obligation imposed by the reward which the bailor pays to the bailee for the work and labour done and the safekeeping of the goods. ...

3. The duty of the bailee is not that of an insurer. Thus, the bailee is not obliged to take every conceivable or possible precaution to prevent the loss of the goods. Its duty is simply to act reasonably. It is to take reasonable care such as a person would take in respect of that person's own goods. ... "

1. There are significant factual differences between the bailment in Tottenham Investments and the present case; the bailment was for reward, and the loss occurred by way of the theft of the vehicle, which had been locked in a workshop, though with its key in the ignition. Nonetheless, we consider that the scope of the duty is that stated by the Court, requiring the bailee to "simply act reasonably" and to "take reasonable care such as a person would take in respect of that person's own goods."
2. There remains doubt concerning whether a gratuitous bailee's obligations are significantly different from bailee for reward. The Appellant referred in submissions to Challenge Charter Pty Ltd v Curtain Bros (Qld) Pty Ltd [2004] VSC 1, which concerned a yacht that had been left to rust in a port in Papua New Guinea and where Gillard J, at [217] stated:

"217 ... Some of the old cases drew a distinction between the duty which rested upon a bailee for reward and a duty which rested upon the gratuitous bailee. It was said that ordinary care and skill was required where the bailor and the bailee both benefited from the arrangement, less diligence was required where the bailor derived the whole benefit, and a more substantial degree of care was required where the benefit accrued only to the bailee. However, the modern authorities appear to draw no distinction between the various relationships. The authorities now recognise that there is an obligation on the bailee to take due care of the chattel. This means that a bailee is required to take that degree of care which is reasonable having regard to all the circumstances. It is necessary to consider all the circumstances of the arrangement. The degree of care may vary according to the circumstances. For example, "If you confide a casket of jewels to the custody of a yokel, you cannot expect him to take the same care of it that a banker would." [citations omitted]

1. In Normoyle v Ducin (2005) 19 DCLR (NSW) 98 at [62], a case concerning the destruction by fire of two cars the subject of a gratuitous bailment at a smash repairs workshop, Norrish DCJ referring to Palmer on Bailment observed:

Although the law in this State as to whether an onus is placed upon the bailee in such a situation to take care of the goods is not clear, I have concluded that, in accordance with the view expressed in Palmer on Bailment (2nd ed, Sweet & Maxwell, London, 1991) the "non-existence of reward is immaterial to the traditional justification of making the bailee negative fault which is that he, the person in possession, is most likely to know what has gone wrong" (at p 564). This conclusion by the learned author is arrived at notwithstanding his consideration of the most compelling Australian decision favouring an onus on the bailor in "modern times": the decision of Justice Zelling in W G H Nominees Pty Limited v Tomblin (1985) 39 SASR 117 (W G H Nominees).

1. As to the question of onus, Norrish DCJ went on to note:

Zelling J also noted the dictum of the Privy Council in Port Swettenham Authority v TW Wu & Co (M) Sdn Bhd [1979] AC 580 at 589-590 where the Board expressed the view that "the onus is always on the bailee, whether he be a bailee for reward or gratuitous bailee, to prove that the loss of any goods bailed to him was not caused by any fault of his or any of his agents to whom he entrusted the goods for safekeeping" (at 590).

1. In written submissions, City Ford contended that a "better modern statement of principle ... is whether there is a failure to exercise reasonable care, having regard to all the circumstances of the case." City Ford refers to Tottenham Investments and the decision in Graham v Voigt (1989) 95 FLR 146 in support. City Ford then submitted that the Tribunal's application of a "gross negligence" test was only adjectival, intended to infer that a gratuitous bailee should be judged at a lower standard than that of a bailee for reward.
2. We are satisfied that the proper test to be applied with regard to the duties of a gratuitous bailee is whether the bailee took reasonable care, such as a person would take in respect of their own goods.
3. We do not consider that duty to be particularly onerous, and we do not consider that the test should be materially different from that of a bailee for reward, though we do not need to reach a concluded view on that point. Accordingly, we find that the Tribunal erred in concluding that the applicable test of liability in circumstances of a gratuitous bailment was the existence of a "special contract" or "gross negligence."
4. When the question of reasonable conduct was raised with the parties on appeal, City Ford submitted that it was never sure when the appellant might collect the vehicle and, indeed, it was repeatedly asking that he take the vehicle away. In essence, City Ford submitted, that it never knew how long the vehicle would remain in its possession. However, contrary to that submission, the appellant referred the Appeal Panel to correspondence in evidence from the appellant's father in which he stated categorically that he would not be taking the vehicle from City Ford until his dispute with Ford had resolved. Having regard to that evidence, we are satisfied that City Ford should have operated on the basis that the appellant was not going to collect the vehicle in response to its entreaties and it remained responsible for the vehicle until it was collected.
5. In this case, there was no dispute that City Ford was a professional car dealer and repairer of long standing. There was evidence given at first instance that it moved around 100 cars around its yard every few days, but it specifically left the Focus locked up and untouched for three months.

(1) City Ford provided no evidence at the hearing by way of any witness statements or expert reports. Evidence is to be weighed according to the proof which it was in the power of one side to produce, and in the power of the other side to have contradicted: Ho v Powell [2001] NSWCA 168 at [15]; Azzopardi v The Queen [2000] HCA 25 (at [10]). City Ford did not dispute that it did not open the windows or move the vehicle while it was in storage after its warranty repairs, nor did it appear to dispute the proposition that other vehicles were moved in the storage yard from time to time. We cannot say that it would have been inevitable that the outcome would have been the same if the Member had applied the correct legal test.

(2) There was evidence available at the hearing to draw an inference that the vehicle had sustained further damage whilst in the possession of City Ford.

(3) It was City Ford who was engaged to perform warranty repairs, and it asserted in its invoice of 22 March 2022 that it had sufficiently dried out the vehicle. However, it is arguable that, had the Member applied the correct legal test, the outcome may have been a finding that City Ford had not adequately performed the repairs because there still was significant moisture in the vehicle and/or knowing that the vehicle had been the subject of repairs due to water ingress it should have taken further reasonable measures to ensure the vehicle was ventilated from time to time, rather than simply parking the vehicle in its undercover storage yard.

1. In respect of any damages remedy the appellant would have been able to obtain against City Ford, and the issue of causation, many of the issues have been discussed previously in the context of the appeal grounds against Ford. However, it is possible the appellant would have been able to prove breach of duty as a bailee against City Ford; and that the damage to the vehicle was partly caused by City Ford such that the appellant may have been able to obtain an award of damages against City Ford.
2. We acknowledge that, based on the evidence at the hearing, it would not have been straightforward for the appellant to prove the extent of damage; or how that damage is to be assessed in the context of any s 272 ACL (NSW) remedy available against Ford when assessing damage or loss caused by City Ford (if any).
3. However, we are not satisfied that the claim against City Ford for breach of duty as a bailee would have inevitably failed.
4. We are satisfied that an error on a question of law has been established in respect of Ground 6. The Member applied the wrong legal principle to the facts.
5. There is no error in respect of Ground 5, as the error was not in finding that there was a "gratuitous" bailment. The error was in respect of the legal test as to whether City Ford had breached its duty as a bailee.
6. In respect of Ground 7, we are satisfied that it is a ground that requires leave. Considering the interaction between those factual findings and the incorrect legal test applied to them, we are satisfied that leave to appeal should be granted.

1. Grounds 2, 3 and 4 involve the findings regarding whether City Ford had breached its obligation to provide services with due care and skill under s 60 of the ACL (NSW), although Ground 4 (which refers to the factual finding at [62] regarding the appellant ensuring the vehicle was 'dried out') arguable relates both to the issue involving the consumer guarantee of due care and skill; and the duty as a bailee. By reason of the way Ground 4 is expressed, that ground is dismissed, for reasons that are set out later in these reasons.
2. Under s 60 of the ACL (NSW), there is a consumer guarantee that, if a person supplies services to a consumer, services will be rendered with due care and skill.
3. The standard contained in s 60 of the ACL (NSW) is analogous to the standard of reasonable care in the tort of negligence: Lets Go Adventures Pty Ltd v Barrett [2017] NSWCA 243 at [10]; Karpik v Carnival plc [2023] FCA 1280 at [445].
4. The Tribunal found that the obligation under s 60 of the ACL (NSW) ceased when the repairs were completed, and did not extend to the manner in which the vehicle was stored.
5. We accept the appellant's submission that the correct legal test as to the ambit of "services" is not as narrowly confined as found by the Member, but services (including rights, benefits or privileges) that are provided, or are to be provided, in trade or commerce, and are not limited to the terms of a contract: Scenic Tours Pty Ltd v Moore [2018] NSWCA 238 at [168]- [169]; Scenic Tours Pty Ltd v Moore at and [137].

1. These grounds are all expressed as grounds requiring leave to appeal.
2. Ground 11 is a repetition, albeit using slightly different words, of the grounds involving City Ford's duty as a bailee. We have dealt with that issue previously and do not need to repeat what we have said in the context of leave to appeal.
3. Grounds 8, 9 and 10 are in respect of the findings at [62] and [72]. Aside from the further consideration in regarding paragraph [72] of the Tribunal's reasons we have, in substance, dealt with those matters.
4. The Member found at [72] that he accepted the evidence of City Ford that it had "completely dried out" the vehicle on 22 March 2022. However, the only evidence at the hearing on this issue was the information contained in the service tax invoice of City Ford dated 22 March 2022. That invoice relevantly states the floor carpet was removed and "cleaned and dried as required" electrical connections were "dried...as required" and mouldy boot carpet "replaced."
5. To find on the basis of that document, and without direct evidence from any employee of City Ford who performed repairs on the vehicle or any other lay or expert evidence regarding the usual system of repairs of City Ford, that the vehicle was "completely dried out" is difficult to comprehend, particularly when the Tribunal made other finding that there was "residual moisture" in the vehicle that needed to be ameliorated by ventilation.
6. In the context of our previous appeal grounds findings, we grant leave to appeal on Ground 10.

1. By reason of the issues we have dealt with in the appeal, it is inappropriate for us to deal with the appeal by way of a rehearing and reconsideration under ss 80(3)(a) and 81(1)(e) of the NCAT Act: Yuen v Thom [2016] NSWCATAP 243 at [17].
2. The appropriate course of action is to remit the matter back to the Tribunal for redetermination according to law. In our view, it is appropriate for the remitted hearing to be determined by the Tribunal constituted by a different Member than the Member at first instance.
3. All issues in dispute will need to be determined in the remitted proceedings, other than in respect of the proceedings against Dominelli Ford. As discussed previously, no grounds of appeal were ventilated against Dominelli Ford.
4. There is a real prospect that some or all of the parties will seek leave to rely upon fresh evidence, such as further expert evidence. It is a matter for the Tribunal to determine whether such leave will be granted, and if so, on what terms.
5. We note that in the submissions of City Ford and the decision of the Tribunal, there is reference to the vehicle having been regularly parked at the appellant's residence near a beach, and to it being exposed to saltwater spray. What relevance this has to whether the goods were of acceptable quality under s 54 of the ACL (NSW); or the claims against City Ford, is unnecessary for us to explore. That may also be relevant to whether the vehicle was reasonably durable in the context of s 54 irrespective of the water ingress through the rear vents.
6. In determining this appeal, we note again that the parties were legally represented in the appeal, and the legal issues were identified and argued in a more thorough manner than before the Member at first instance. The Member had to deal with a factually and legally complex dispute argued by multiple parties, all of whom were represented by non-lawyers.
7. In remitting the proceedings, no party should be under a misapprehension that this decision affects their prospects of success when the matter is again heard and determined by the Tribunal. All parties have much at stake, including the potential for a costs order to be made against any unsuccessful party.

"Litigation is not a process for the faint hearted. It is a costly and time consuming process and usually productive of stress, all of which, of their nature, have adverse effects upon those involved in the process. In some, if not most, cases that come before the courts, it is a necessary evil ... "

1. We are satisfied that it is appropriate to deal with the costs of the appeal in this decision and then give the parties, if they seek to do so, the opportunity to make an application to vary our costs decision if they seek some further or other costs order. That is an approach that has been taken in some previous Appeal Panel decisions: see, for example, Wells Group Pty Ltd v Betts [2025] NSWCATAP 70.
2. We are satisfied that the amount claimed or in dispute in the proceedings at first instance; and additionally the amount claimed or in dispute in the appeal, exceeded $30,000. By reason of the operation of rr 38 and 38A of the NCAT Rules, we can make a costs order without needing to be satisfied of "special circumstances" under s 60(2) of the NCAT Act: Allen v TriCare (Hastings) Pty Ltd [2017] NSWCATAP 25.
3. The appellant is the successful party in the appeal. There is no obvious reason to depart from the usual principle that the unsuccessful parties pay the successful party's legal costs.

(1) The appeal is allowed against the second and third respondents.

(2) Order 1 of the Tribunal is set aside other than in respect of the dismissal of proceedings against Dominelli Group Pty Ltd t/as Dominelli Ford

(3) The appellant's proceedings against the second and third respondents are remitted to the Tribunal as differently constituted for determination according to law.

(4) Whether any new or fresh evidence is allowed in the remitted proceedings is to be determined by the Tribunal.

(5) The second and third respondents are to pay the appellant's costs of the appeal proceedings as agreed or assessed.

(6) If any party wishes to make an application to vary order (5) above (the costs application):

(a) the applicant to the costs application is to lodge and serve the costs application, including submissions limited to three pages and any evidence in support, within seven days of this decision;

(b) the respondent to the costs application is to lodge and serve any submissions limited to three pages and any evidence in response within 14 days of this decision;

(c) the applicant to the costs application is to lodge and serve any submissions in reply limited to two pages within 21 days of this decision;

(d) the parties are to indicate in their submissions whether they consent to an order dispensing with an oral hearing of the costs application, and if they do not consent, submissions of no more than one page as to why an oral hearing should be conducted rather than the costs application being determined on the papers. If a hearing is not dispensed with, the parties will be advised of a date for the hearing of the costs application.

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.