Belconnen Automotive Pty Ltd Trading as Gerald Slaven Volkswagen v Kennedy (Appeal)

[2018] ACAT 15

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

BELCONNEN AUTOMOTIVE PTY LTD TRADING AS GERALD SLAVEN VOLKSWAGEN v KENNEDY (Appeal) [2018] ACAT 15

AA 37/2017 (XD 220/2017)

Catchwords:              APPEAL – Australian Consumer Law – lack of due care and skill in replacing a timing belt – competing expert evidence – causation, question of fact – role of the Appeal Tribunal – no error in not finding contributory negligence – assessment of damages – no unjust enrichment – appeal dismissed

Legislation cited:      ACT Civil and Administrative Tribunal Act 2008 s 60

Subordinate

Legislation cited:      ACT Civil and Administrative Tribunal Procedure Rules 2009 (No 2), rules 14, 21

CourtProcedure Rules 2006 sch 2

Cases cited:B&T Constructions (ACT) v Construction Occupations Registrar and the Owners-Units Plan 3324 [2013] ACTSC 219

Chappel v Hart [1998] HCA 55

Chakravarty & Commissioner for Act Revenue [2013] ACAT         11

Excel Intelligent Pty Ltd v Thomson [2018] ACAT 4

Giusida Pty Limited v Commissioner for ACT Revenue [2016] ACTSC 275

Kennedy v Belconnen Automotive Pty Ltd [2017] ACAT 73
March v E and MH Stramare Pty Ltd [1991] HCA 12
Reed v Fleming [2001] WADC 109
Reed v Fleming [2001] WASCA 424
Rosenberg v Percival [2001] HCA 18

Tribunal:                   Presidential Member G McCarthy        

Date of Orders:  22 February 2018

Date of Reasons for Decision:         22 February 2018

AUSTRALIAN CAPITAL TERRITORY             )

CIVIL & ADMINISTRATIVE TRIBUNAL           )             AA 37/2017

BETWEEN:

BELCONNEN AUTOMOTIVE PTY LTD
T/AS GERALD SLAVEN VOLKSWAGEN

Appellant

AND:

ERNEST KENNEDY

Respondent

TRIBUNAL:Presidential Member G McCarthy

DATE:22 February 2018

ORDER

The Tribunal orders that:

1.The decision under appeal is amended under rule 21(d) of the ACT Civil and Administrative Tribunal Rules 2009 as follows:

(a)     By substituting “18,400.094” (sic) with “$18, 469. 81”:

(b)     By substituting order 1(b) with the following:

Interest of $159.63 calculated in accordance with the Court Procedures Rules 2006 Schedule 2 on items (iii), (iv), (v), (vi), (vii) and (viii) in sub-order (a) from the date each expense was paid until 22 February 2018.

………………………………..

Presidential Member G McCarthy

REASONS FOR DECISION

1.The appellant, Belconnen Automotive Pty Ltd, carries on business as Gerald Slaven Volkswagen (Gerald Slaven). Its business includes servicing motor cars. It had regularly serviced the respondent’s Volkswagen campervan.

2.On 16 November 2016, the respondent, Mr Kennedy, collected his campervan from Gerald Slaven following completion of a scheduled service which included replacement of the timing belt. The cost of the service was $3,496.98.

3.The next day, 17 November 2016, Mr Kennedy lent his campervan to his son-in-law for him to drive to Port Macquarie. After travelling approximately 100kms, the engine suffered catastrophic damage causing the vehicle to stop.

4.Gerald Slaven denied liability for the damage.

5.Mr Kennedy gave Gerald Slaven an expert report dated 2 December 2016 from Mr Ray Spence, manager of Canberra Automotive Engineering Services, in which Mr Spence explained (for the reasons stated in his report) that the damage was “in keeping with incorrect camshaft timing”. He stated his “conclusion that incorrect installation of the replacement timing belt is the cause”.

6.Gerald Slaven still denied liability.

7.On 1 March 2017 Mr Kennedy brought proceedings against Gerald Slaven in the Tribunal seeking compensation for his loss.

8.On 19 September 2017, the Tribunal found that Gerald Slaven’s mechanic had failed to exercise due care and skill in installing a new timing belt kit; that that failure caused a timing error; and that the timing error in turn caused the catastrophic damage to the engine.[1]

[1] Kennedy v Belconnen Automotive Pty Ltd [2017] ACAT 73

9.On 6 October 2017, after hearing from the parties, the Tribunal ordered Gerald Slaven to pay Mr Kennedy $18,400.94 consisting of items of damage totalling $18,156.18, interest of $90.76, the Tribunal filing fee of $145 and an ASIC company search fee of $9.00.

10.On 17 October 2017, Gerald Slaven appealed from the Tribunal’s orders. On 9 February 2018, I heard the appeal. Mr Quinn, solicitor, appeared for Gerald Slaven. Mr Domitrovic, solicitor, appeared for Mr Kennedy. By reference to its Notice of Appeal, Gerald Slaven alleged three errors which I deal with in turn.

Cause of the engine failure

11.A central issue before the hearing Tribunal was the cause of the damage. The Tribunal received expert evidence from Mr Spence, Mr McPherson and Mr Leimroth on the subject. Their opinions differed.

12.Mr Spence and Mr McPherson both attributed the engine failure to a timing error caused by Gerald Slaven’s mechanic failing to correctly install the new timing belt kit. Mr Spence and Mr McPherson differed however about the precise failure. Mr Spence thought that the timing error occurred because the timing belt kit was incorrectly aligned with the camshaft. [2] Mr McPherson thought it arose because the camshaft pulley slipped on the camshaft because the camshaft nut was inadequately tightened after the new timing belt was fitted.[3]

[2] Kennedy v Belconnen Automotive Pty Ltd [2017] ACAT 73 at [37]

[3] Kennedy v Belconnen Automotive Pty Ltd [2017] ACAT 73 at [37]

13.Mr Leimroth did not give a definitive opinion about what caused the damage, offering that it might have been triggered by a latent defect and that there were a lot of “ifs and buts” about what occurred. While he could not say what caused the damage, he was confident it was not because the timing belt had been incorrectly installed.[4]

[4] Kennedy v Belconnen Automotive Pty Ltd [2017] ACAT 73 at [39] – [44], [50]

14.Regarding the cause of the damage, the Tribunal found:

56.    I am satisfied by the evidence on the balance of probabilities that after the respondent replaced the timing belt the piston stroke in all cylinders was not properly synchronised with the opening and closing of the engines valves – causing the piston at the end of the exhaust stroke to lightly strike the edge of the exhaust valve before it closed instead of stopping just short of the flush surface of the closed valve. That repeated small impact over a distance of approximately 100 kilometres caused metal fatigue in the valve leading to fatal damage in cylinder one and less advanced damage to the other cylinder heads.

57.    Whilst the precise cause of the timing error is unclear I am also satisfied on the balance of probabilities that the respondent in the process of fitting the new timing belt somehow disrupted the camshaft timing.

15.At the appeal hearing, Mr Quinn submitted that the Tribunal erred in finding that the damage was caused by incorrect installation of the timing belt kit because:

(a)    Mr Kennedy failed to lead “conclusive” evidence about the cause of the engine’s failure; and

(b)   the evidence of Mr Spence and Mr McPherson was “mutually inconsistent and divergent”.

16.At the appeal hearing, Mr Quinn properly abandoned the submission that the Tribunal needed ‘conclusive’ evidence in order to be satisfied about the cause of the engine failure. The civil standard of proof is satisfaction on the balance of probabilities.

17.Regarding the second limb, Mr Quinn submitted that where Mr Spence and Mr McPherson had different opinions about what the mechanic had failed to do when installing the new timing belt kit, it was not then open for the hearing Tribunal to conclude on the balance of probabilities that incorrect installation led to the timing error which led to the damage.

18.I reject the submission. Mr Spence and Mr McPherson both attributed the damage to a slight timing error, and both attributed the timing error to incorrect installation of the timing belt kit. Whether the mechanic incorrectly aligned the timing belt kit with the camshaft, or inadequately tightened the camshaft nut, does not affect the opinion of both experts that incorrect installation of the timing belt kit caused the timing error which caused to the damage.

19.I am not persuaded that it was incumbent on the hearing Tribunal to be satisfied on the balance of probabilities about the precise failure of the mechanic. Either way, the immediate or proximate cause was the same: the timing belt kit was not correctly installed. Causation is a question of fact to be determined not by reference to any philosophical formula, but as a matter of common sense.[5]

[5] March v E and MH Stramare Pty Ltd [1991] HCA 12; Chappel v Hart [1998] HCA 55; Rosenberg v Percival [2001] HCA 18

20.I recognise that opinions may differ as to what constitutes ‘common sense’, but Mr Quinn did not refer me to any authority on the question and in particular any authority for the proposition underpinning the ground of appeal that causation cannot be established on the balance of probabilities where there is common evidence regarding an immediate or proximate cause (in this case incorrect installation of the timing belt) but divergent evidence as to the precise error in the installation.

21.I draw support for my rejecting the submission from a decision of the District Court of Western Australia in Reed v Fleming[6] where the Court considered a claim in negligence arising from oil spillage from a truck onto a road that led (in part) to a motor vehicle accident. The spill occurred because the oil filter became detached from the truck, which led to about five litres of oil dropping onto the road. The three expert witnesses differed, however, as to why the oil filter became detached.

[6] Reed v Fleming [2001] WADC 109

22.One said that the filter had been over tightened when screwed on to the adaptor plate, this causing the thin female thread to suffer fatigue failure causing cracks which ultimately led to the thread failing and the filter falling off the truck.

23.Another said that the filter had been over tightened, but agreed that fatigue could have been caused to the screw by the filter being under tightened, meaning less than the manufacturer’s instructions.

24.Another said that the filter had been under tightened, which imposed larger stress ranges than normal on the thread region leading to fatigue followed by tearing and the ultimate falling off of the filter.

25.In response to this conflicting evidence, the Court said:

The extent of the expert opinions provide a strong basis to conclude that the filter was either over tightened or significantly under tightened - whichever it was, I am satisfied that the filter was installed contrary to the manufacturer's clear instructions.[7]

[7] Reed v Fleming [2001] WADC 109 at [15]

26.The District Court found negligence on the part of the defendant, Mr Fleming, by his failure to properly install the filter and contributory negligence on the part of the plaintiff, Mr Reed, by him inappropriately swerving from the right to the left lane. The matter went on appeal to a Full Court of the Supreme Court of Western Australia. One of the grounds of cross-appeal concerned the differing opinions about installation of the oil filter. Olsson AUJ, with whom the other judges agreed, said:

27     At trial three expert witnesses were called to express opinions as to how and why the oil filter became detached. Essentially, there was a difference of opinion as to whether, when the respondent serviced his vehicle, he had over-tightened or significantly under-tightened the filter.

28     The learned trial Judge occupied some time in discussing this conflict in the course of his reasons for judgment. However, as he pointed out, at the end of the day, it did not really matter which of the two possibilities was the real causative factor. He was abundantly satisfied that, whatever was the situation, the filter had been installed by the respondent contrary to the manufacturer's clear instructions

...

47     The respondent's cross-appeal sought to raise a series of issues.

48     First, it challenged the propriety of the factual finding that the oil filter fell off as a consequence of the negligence of the respondent, on the somewhat extraordinary basis that, there being a conflict of experts as to whether the filter had been over-tightened or under-tightened, no good reason had existed to reject the respondent's evidence that he had fitted it correctly. That ground was abandoned on the hearing of this appeal.[8] (emphasis added)

[8] Reed v Fleming [2001] WASCA 424 at [27], [28] and [48]

27.Whilst the WA Court of Appeal did not make a finding about the first issue arising on the cross-appeal, its view about that ground was clear.

28.Referring to the decisions in Reed v Fleming, and in the absence of any authority to the contrary, in my view it was entirely proper for the hearing Tribunal to conclude[9] that the cause of the timing error was incorrect installation of the timing belt and that it did not matter whether the mechanic incorrectly aligned the kit with the camshaft or inadequately tightened the camshaft nut: either way, the timing belt was not correctly installed.

[9] Kennedy v Belconnen Automotive Pty Ltd [2017] ACAT 73 at [56]

29.At hearing, Mr Quinn also submitted that the Tribunal should have rejected the evidence of Mr Spence and Mr McPherson that a timing error, or a problem with the timing belt, caused the damage because if there was ‘a problem’ with the timing belt the vehicle would have gone into limp mode and a warning light would have activated on the dashboard. He relied on the accepted evidence that neither event occurred which, he submitted, eliminated a timing belt fault as the cause of the damage.

30.The submission overlooked the evidence of Mr McPherson, reported in the decision,[10] that the camshaft sensor may not have detected the timing error, and if the error was not detected neither limp mode nor a warning light would have been activated.

[10] Kennedy v Belconnen Automotive Pty Ltd [2017] ACAT 73 at [45]

31.There being evidence before the Tribunal explaining why the vehicle did not go into limp mode, I reject the submission that the hearing Tribunal could (or should) not have accepted the evidence of Mr Spence and Mr McPherson that a timing error caused by incorrect installation of the timing belt caused the damage.

32.Gerald Slaven also submitted that the hearing Tribunal erred in that gave “no weight” to Mr Leimroth’s “expert witness opinion as to what caused the engine to fail.” The alleged error is misconceived because Mr Leimroth did not offer an opinion as to what caused the engine to fail: he simply discounted incorrect installation of the timing belt.

33.The submission that the hearing Tribunal erred by giving “no weight” to Mr Leimroth’s opinion also overlooks the findings of fact that Mr Kennedy had not experienced any engine problems before the timing belt was replaced and had had the vehicle regularly serviced, almost exclusively by Gerald Slaven, who had never raised any issue with the engine with Mr Kennedy.[11]

[11] Kennedy v Belconnen Automotive Pty Ltd [2017] ACAT 73 at [15] – [16]

34.At the appeal hearing Mr Quinn agreed that when Mr Kennedy brought his vehicle in for its service, and to change the timing belt, the engine was “working reasonably well”. Yet it suffered catastrophic damage approximately 100km after the service.

35.In my view, referring to Mr Leimroth’s opinion, it was reasonable for the hearing Tribunal to conclude on the evidence:

I find it unlikely that the engine harboured a hidden defect for approximately two years without symptoms and without being detected during regular service and maintenance before suddenly manifesting with catastrophic results shortly after the timing belt was replaced.[12]

[12] Kennedy v Belconnen Automotive Pty Ltd [2017] ACAT 73 at [55]

36.The first ground of appeal fails.

Contributory negligence

37.Gerald Slaven submitted that the hearing Tribunal erred in not finding contributory negligence on the part of Mr Kennedy, having regard to its findings that he collected his vehicle from Gerald Slaven’s premises on 16 November 2016; immediately noticed an “unusual noise”[13] from the vehicle as soon as he began driving it; that the noise prompted him to stop at a service station to check the engine;[14] that he did not arrange for the vehicle to be seen by a mechanic or take it back to Gerald Slaven’s premises; that he discussed the noise with a friend and then elected to dismiss his concerns about the engine; and that the next day he lent the campervan to his son-in-law for him to drive it to Port Macquarie. He submitted that Mr Kennedy was “mechanically minded” arising from his apprenticeship in fitting and machining between 1968 and 1971. He submitted that a reasonable person with Mr Kennedy’s knowledge would have taken the vehicle to a mechanic, or back to Gerald Slaven, in order for his concerns about the engine noise, or different engine tone, to be addressed.

[13] At the appeal hearing, Mr Quinn accepted that Mr Kennedy noticed a “different engine tone” rather than an “usual noise”.

[14] Per Kennedy v Belconnen Automotive Pty Ltd [2017] ACAT 73 at [18], Mr Kennedy stopped at the service station to check the oil and water. As “everything looked alright under the bonnet” he continued to drive home.

38.By reason of these facts, Mr Quinn submitted that the damage was done by Mr Kennedy’s “own fault, inaction and negligence”.

39.Regarding the claim of contributory negligence, the Tribunal said:

62.    The evidence is insufficient to establish whether the mechanic test-drove the vehicle after replacing the timing belt as he should have, and if he did, whether he heard the noise. But I accept Mr Kennedy’s evidence that when he collected the vehicle it sounded different enough for him to check the oil and mention it to a friend. However he was not concerned enough to return it to the respondent or prevent it from being driven further.

63.    Although he is mechanically minded Mr Kennedy is not a motor mechanic and had no reason to think at the time that the change in engine tone indicated imminent engine failure. He reasonably relied on the fact that the respondent had just serviced his van. He double checked the oil level and was reassured by his friend’s remarks. In all the circumstances I find he was not negligent.

40.It is apparent from its findings that the Tribunal considered the factual matters put forward by Gerald Slaven in support of its submission that Mr Kennedy was negligent, but was not persuaded that his actions and inactions amounted to negligence.

41.On the appeal, Mr Quinn submitted that the Tribunal erred because, on the facts as found, the claim for contributory negligence should have been allowed. At the appeal hearing he described it as “a fairly obvious proposition”.

42.The submission entailed consideration of the role of the Appeal Tribunal. In B&T Constructions (ACT) v Construction Occupations Registrar and the Owners-Units Plan 3324[15] the ACT Supreme Court, per Burns J, noted several earlier authorities for the settled proposition that an appeal by way of a review of an original decision (as this is) entails the appellant demonstrating that the order appealed from is the result of some legal, factual or discretionary error.

[15] B&T Constructions (ACT) v Construction Occupations Registrar and the Owners-Units Plan 3324 [2013] ACTSC 219 at [14] – [18]

43.In Chakravarty & Commissioner for Act Revenue,[16] the Tribunal expressed this principle in more straightforward terms:

38     Acting President Chenoweth also stated in Das v A & A Airconditioning (Civil Disputes):

“The purpose of the appeal process is not to allow an applicant to try and have a matter reheard because they do not like the previous decision; if that were so there would be no point in the original hearing...”

39 Pursuant to subsection 79(3) of the ACAT Act, there must be a question of law or fact identified on appeal that enables the Appeal Tribunal to consider whether the Original Tribunal made an error as to the law or facts raised in those questions.

[16] Chakravarty & Commissioner for Act Revenue [2013] ACAT 11 at [38] – [39], cited with approval in Excel Intelligent Pty Ltd v Thomson [2018] ACAT 4 at [48]

44.In Giusida Pty Limited v Commissioner for ACT Revenue[17] the Supreme Court, per Refshauge ACJ, reviewed previous decisions concerning the need for an appellant to show error in the decision under appeal. After doing so, his Honour said:

35.    I have found no justification or argument in any of these decisions for the gloss that is sought to be put on the legislation by making a requirement that there must be “obvious” or a “manifestly obvious” error. Indeed, the tautology of the latter seems intended to establish some sort of protection from review for error by the tribunal at first instance for which there is no legislative remit whatsoever. Indeed, the very structure of the ACAT would suggest that what is required is a proper review of the decision at first instance before the cost to the parties of having to take the proceedings to this Court is required to be incurred

…

37.    … Indeed, careful thought and a consideration of the purpose and meaning of an internal appeal strengthens my view that a wider and generous power is intended and not one which restricts original decisions from proper scrutiny.

38.    Thus, while error needs to be shown before the ACAT on appeal will set aside the original decision on the application from which the appeal is taken, it is not required that the error be “manifest”, “obvious” or other than an error discernible by a proper assessment of the evidence and the law. I could find nothing in any parliamentary material, such as the relevant Explanatory Statements or the Parliamentary Speeches that suggested any different construction of the provision.

39.    A final comment is necessary. The proceedings before the ACAT on appeal and before me refer at times to the common reference in appellate discourse as to what is “open” to a first instance decision-maker. It seems to me that this is a wide term that needs careful consideration. It also needs to be clear that, if there is an error of fact or law in a finding of the ACAT, then it is not open to it to make such a finding unless the error is not a material one.

40.    The evidence that permits a decision maker to draw a conclusion must have a character of reliability and reasonable substance; it must not be mere evidence, that it is simply what is put before the tribunal.

[17] Giusida Pty Limited v Commissioner for ACT Revenue [2016] ACTSC 275

45.How these statements of principle should be applied will vary from case to case. An alleged error in the interpretation of a statute would need to be approached quite differently to a case involving a claim in common law drawn from findings of fact.

46.In some cases, as Refshauge ACJ noted in Giusida, if an error of fact underpins a finding in the decision under appeal, that finding is not open unless the error is immaterial to the finding. However that is not this case. Gerald Slaven did not suggest any error of fact by the original Tribunal regarding Mr Kennedy’s conduct from when he collected his vehicle to when it broke down. Rather, Gerald Slaven relied on those facts to submit that the original Tribunal should have made a finding of contributory negligence and erred by not doing so.

47.At the appeal hearing, however, Mr Quinn made no attempt to articulate why the original Tribunal erred. He made no reference to the elements of the tort of negligence, or why on the evidence each of them was met. His submission was a global proposition that, by reference to the original Tribunal’s findings of fact, contributory negligence was “fairly obvious”.

48.Referring to Giusida, Gerald Slaven did not need to show that the original Tribunal’s alleged error was “manifest” or “obvious”, but it did need to show error. Given the global manner in which the appeal ground was put, and again referring to Giusida, the threshold for establishing error was not so high that Gerald Slaven needed to show that the original Tribunal’s conclusion was not even open to it, but it did need to show that its conclusion lacked “a character of reliability and reasonable substance”.

49.After considering each aspect of Mr Kennedy’s conduct from when he collected his vehicle to when it broke down, and his general circumstances, I am not persuaded that the original Tribunal’s finding lacked substance or that it should reasonably have concluded that the facts established contributory negligence.

50.Referring to Mr Kennedy’s response to the change in engine tone, Mr Domitrovic referred me to the evidence of Mr McPherson, who gave expert evidence as a professional engineer concerning motor vehicles, their engines and their design. He said:

I’ve got considerably more experience and knowledge than Ernie [Kennedy] but I have to say that if I was in that circumstance and the noise was just a bit different from normal, I’d probably do exactly what he did.[18]

[18] Transcript of proceedings, 12 July 2017, page 58, lines 35-38

51.Referring to Mr Kennedy’s “background in fitting and machining”, this appears to be a reference to his apprenticeship between 1968 and 1971, some 46 years before the events in question. I am not persuaded that that training should reasonably have led Mr Kennedy to think (or recognise) that the change in engine tone warranted taking his vehicle to a mechanic, or back to Gerald Slaven, for investigation. If it would not have prompted that action from a professional engineer with expertise in engines and their design, it is difficult to see why Mr Kennedy should have concluded otherwise.

52.Referring to Mr Kennedy’s conversation with his friend about the change in engine tone, Mr Quinn accepted at the appeal hearing that Mr Kennedy did not (as pleaded in the notice of appeal) “drive the vehicle to a friend’s home where he discussed the alleged noise  … and consciously elected to dismiss his concerns regarding the engine”. Mr Kennedy’s evidence on the issue was as follows:

… the exhaust note was a little different and it sounded more like one of my friend’s cars when he’d had some adjustments done. As a matter of fact, after delivery of the vehicle I - my friend and I get together every Friday night and we were lining up our next encounter and I said, “It sounded more like your vehicle.” His had run gaily for a long time but after some period of time and back for another service it sounded back to its old self.

So I thought nothing significant of it.[19]

[19] Transcript of proceedings, 12 July 2017, page 51, lines 35-44

53.Later in his evidence, Mr Kennedy said:

Incidentally during the conversation where we were planning a social engagement we discussed it. I didn’t deliberately go out of my way to discuss the noise.[20]

[20] Transcript of proceedings, 12 July 2017, page 68, lines 42-44

54.At the appeal hearing, Mr Quinn accepted that the above quoted passages was the only evidence concerning Mr Kennedy’s inquiry with his friend about the change in engine tone.

55.If Mr Kennedy’s friend had suggested caution or a need for investigation of the changed engine tone, and Mr Kennedy had ignored that advice, the circumstance might have been different but the opposite was the case.

56.Referring to Mr Kennedy stopping at a service station, I am not persuaded that having checked the oil and water levels and noting them to be fine he should still have taken his vehicle to a mechanic, or back to Gerald Slaven. Further, having just paid for the timing belt kit to be replaced by a qualified mechanic, I am not persuaded that he should reasonably have thought that the change in engine tone may have been due to an error in its replacement rather a normal incident of a new timing belt, especially where a friend had given him that assurance.

57.Last, I am not persuaded that Mr Kennedy acted inappropriately by allowing his vehicle to be driven after hearing the change in engine tone, whether that be to Port Macquarie or anywhere else. To the contrary, I share the original Tribunal’s view that Mr Kennedy would reasonably think that where his vehicle had just been serviced by a qualified mechanic it could then be reliably driven.

58.Where Gerald Slaven has not persuaded me that the original Tribunal’s finding lacks substance or in some way was not reliable, the second ground of appeal fails.

Replacement Engine

59.On 19 September 2017, the original Tribunal ordered judgment for Mr Kennedy in a sum to be determined, and listed the matter for hearing on 6 October 2017 to assess damages, costs and expenses.

60.By letter dated 26 September 2017, Mr Kennedy provided a table itemising his claim for damages. This included, at item 1:

Supply of New Engine less the fitment cost, Invoice No: 1036 dated 18 February 2017. AH TRADE, Victoria 3061. $15,040.00 less fitment of $1,800.00 = $13,240.00

61.It was implicit from item 1 that Mr Kennedy was prepared to forego a claim for the cost of fitting a replacement engine and ‘capped’ his claim for a replacement engine at $13,240.

62.By letter dated 3 October 2017, Gerald Slaven objected to the claimed cost of a new engine, submitting that Mr Kennedy’s vehicle “was a 2012 Volkswagen Crafter that had in excess of 220,000 km on its odometer.” It submitted that Mr Kennedy is not entitled to a new engine as it would constitute a “windfall.”

63.Gerald Slaven also relied on “Without Prejudice” letters dated 17 and 27 February 2017 from Mr Quinn to Mr Kennedy’s solicitor in which Gerald Slaven offered to settle the matter on the basis that it provide Mr Kennedy with a re-conditioned engine, later clarified as a second hand engine with approximately 120,000 km sourced from a supplier, provided Mr Kennedy pay the costs of fitting the engine.

64.The first letter stated that the cost of the proposed engine was $9,375. The second letter advised that it would come with a six month unlimited kilometre warranty.

65.On 6 October 2017, for item 1, the original Tribunal ordered Gerald Slaven to pay Mr Kennedy $13,240 “for replacement engine”. The original Tribunal did not order Gerald Slaven to pay the cost of installing the replacement engine.

66.At the appeal hearing, with this background, Mr Quinn submitted that an order requiring Gerald Slaven to pay $13,240 for a new engine constituted unjust enrichment because Mr Kennedy’s original engine had in excess of 220,000km on its odometer and Gerald Slaven had offered a second hand engine at a stated cost of $9,375.

67.The primary difficulty with this submission was that Mr Quinn did not lead any evidence about why the original Tribunal ordered Gerald Slaven to pay $13,240. Mr Quinn stated that at the hearing on 6 October 2017, the original Tribunal “said nothing” about why it awarded Mr Kennedy the quoted cost of a new engine.

68.In a situation of this kind, a disgruntled party would ordinarily request reasons for the decision, or even the aspect of the decision it queries, either at the hearing or subsequently.

69.Under section 60 of the ACT Civil and Administrative Tribunal Act 2008, if the tribunal makes an order on an application and, within 14 days after the order is made, a party asks for a statement of reasons for the making of the order, the tribunal must give the party a written statement of reasons or a transcript of an oral statement of reasons that was given for the making of the order.

70.Under rule 14 of the ACT Civil and Administrative Tribunal Procedure Rules 2009 (No 2), a notice of appeal from a decision must ordinarily be filed not later than 28 days after the day the decision is made but the tribunal may allow further time. In my view, that a party is awaiting reasons for a decision would ordinarily be a proper ground to grant further time for lodging an appeal: in many cases a party may not be able to decide whether to appeal, or be able to state the grounds for its appeal, until it knows why the decision was made.

71.In this case, there is no suggestion that Mr Quinn asked for a statement of reasons, either at the hearing or at all. I am left with no indication as to why the original Tribunal ordered Gerald Slaven to pay Mr Kennedy $13,240, and so no basis for finding error of fact or law in its decision to do so.

72.Nor am I persuaded that in some way the facts ‘speak for themselves’ in the sense that it is ‘unjust’ that Gerald Slaven has been ordered to pay for a new engine where Mr Kennedy’s old engine had done 220,000km or where it had offered Mr Kennedy a second hand engine with half that distance.

73.Regarding the offered second hand engine, its condition would depend on more than distance travelled. Much would depend on how the engine had been used (or misused) over time, its age and its service history including, as Mr Domitrovic noted, whether the timing belt kit had been replaced. The proposed second hand engine did not come with a service history and so Mr Kennedy had no information about its condition. As Mr Domitrovic noted, when not knowing whether (or when) the timing belt had been replaced, Mr Kennedy was obliged either to take a chance that it had (with potentially catastrophic results if it had not) or to replace it at significant cost. Mr Kennedy’s unwillingness to accept a second hand engine without knowing anything about its prior use or maintenance was, in my view, reasonable.

74.Gerald Slaven’s offer of a second hand engine also excluded the fitting costs, and did not state what those costs would be. At the original hearing, there was no evidence as to what Gerald Slaven would charge to fit the engine. Mr Kennedy provided a quotation of $3,500 from another ACT Volkswagen dealer under the line item “remove and replace engine”.

75.The general principle, when determining an award of damages, is to put the applicant in the same position that they would have been had the error not occurred - as best as money can do it. In this case, the principle means an award of damages that would put Mr Kennedy in materially the same position he would have been had his existing engine been serviced and the timing belt kit had been correctly installed.

76.To place him in that position entails assessing the total cost of obtaining and installing an engine of materially the same or similar condition to the engine that was destroyed. The original Tribunal had evidence that Mr Kennedy’s previous engine had a good service history, and Mr Quinn agreed that when the vehicle came in for its service the engine was working reasonably well.

77.The original Tribunal had little evidence with which to quantify damages. Regarding the cost of an engine that would be materially similar to Mr Kennedy’s, it had only the stated cost of a second hand engine with an unknown service history ($9,375) and two quotes for a new engine of $13,240 from a supplier in Melbourne and $22,103[21] from a supplier in the ACT. Regarding installation, Gerald Slaven did not provide an installation cost and the original Tribunal had only the quoted costs of $1,800 from the supplier in Melbourne and $3,500 from the supplier in the ACT.

[21] The amount is derived by totalling the quoted price of $15,137.45 for a “base engine”, $2,865.80 for the “turbo” and $4,099.75 for the “injectunit”.

78.Even if the cost of a second hand engine had been considered appropriate, damages would still have been between $11,175 and $12,875 after an allowance for installation costs.

79.Where (in my view) a second hand engine was not a reasonable proposition for the reasons given, and where Mr Kennedy was seeking $13,240, in my view the assessment of damages for item 1 was reasonable.

80.It is not correct to review an assessment of damages by reference to Mr Kennedy choosing to purchase a new engine to replace the engine that was destroyed. The task of the original Tribunal was to quantify his loss. What Mr Kennedy chooses to do with the compensation money is a matter for him.

81.Where there is no evidence as to why the original Tribunal ordered Gerald Slaven to pay Mr Kennedy $13,240, and where the quantum awarded was in my view reasonable referenced to his loss, I am not persuaded that Mr Kennedy has been unjustly enriched.

82.In its notice of appeal, Gerald Slaven also contended that the original Tribunal had made “incorrect orders on irrelevant grounds” by ordering Gerald Slaven to pay various ancillary costs that Mr Kennedy incurred over the many months when his vehicle could not be driven and Gerald Slaven would not fix it. These costs included Mr Kennedy’s cost of transporting his vehicle to Melbourne for fitting the new engine, storage costs and pro rata costs of wasted registration and insurance. Mr Quinn contended that had Mr Kennedy accepted the offer of a second hand engine in February 2017 all those costs would have been avoided.

83.Mr Quinn accepted however that if I was not satisfied (and I am not) that the original Tribunal erred when it ordered Gerald Slaven to pay $13,240 for item 1, Gerald Slaven’s objection to it also paying the ancillary costs falls away.

84.Where each of the grounds of appeal has failed, I will dismiss the appeal.

85.Interest payable under the hearing Tribunal’s order 1(b) made on 6 October 2017 will be adjusted so as to be payable until 22 February 2018 rather than 6 October 2017.

………………………………..

Presidential Member G McCarthy

HEARING DETAILS

FILE NUMBER:	AA 37/2017
PARTIES, APPELLANT:	Belconnen Automotive Pty Ltd T/As Gerald Slaven Volkswagen
PARTIES, RESPONDENT:	Ernest Kennedy
COUNSEL APPEARING, APPELLANT	Mr A Quinn
COUNSEL APPEARING, RESPONDENT	Mr J Domitrovic
SOLICITORS FOR APPELLANT	KQ Lawyers
SOLICITORS FOR RESPONDENT	JD Law
TRIBUNAL MEMBER:	Presidential Member G McCarthy
DATE OF HEARING:	9 February 2018