Cohen v Woolworths Ltd

Case •

[2018] NSWCATCD 11

•

24 April 2018

No judgment structure available for this case.

Civil and Administrative Tribunal


New South Wales

Medium Neutral Citation: Cohen v Woolworths Ltd [2018] NSWCATCD 11
Hearing dates: 12 March 2018
Date of orders: 24 April 2018
Decision date: 24 April 2018
Jurisdiction:Consumer and Commercial Division
Before: P French, General Member
Decision:

1 The Respondent, Woolworths Ltd, 1 Woolworths Way Bella Vista NSW 2153 Australia, is to pay the Applicant, Peter Cohen, 10 Freya Crescent Shalvey NSW 2770 Australia, the sum of $2,316.50 within 14 days of the date of these orders.


2 The claim is otherwise dismissed.

Catchwords:

CONSUMER CLAIM – alleged supply of particle contaminated fuel – where contamination caused motor vehicle engine failure – claim for costs of cleaning fuel lines and engine repairs – claim for travel costs during period motor vehicle inoperative

  COSTS – special circumstances – cost of fuel analysis report
Legislation Cited: Australian Consumer Law (NSW)
Civil and Administrative Tribunal Act 2013
Fair Trading Act 1987
Fuel Standards Management Act 2000
Cases Cited: Alexander James Pty Ltd v Pozetu Pty Ltd (No. 2) [2016] NSWCATAP 75
Briginshaw v Briginshaw (1938) 60 CLR 336
CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21
eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94
Farquar & Farquar (No. 2) [2008] FamCA 682
Hadley v Baxendale [1854] 9 Ex 341
Medtel Pty Limited v Courtney 198 ALR 630
Miller v Minister for Pensions [1947] 2 All ER 372
Profitability Consulting Pty Ltd v Thorpe [2018] NSWCATAP 41
Nguyen & Anor v Perpetual Trustee Company Ltd; Perpetual Trustee Company Ltd v Nguyen & Anor (No.2) [2016] NSWCATAP 168
Category:Principal judgment
Parties: Mr Peter Cohen (applicant)
Woolworths Ltd (respondent)
Representation: Applicant in person
Mr Soham Lakhia, Acting Supply Chain Manager, for Respondent
File Number(s): GEN 17/45137
Publication restriction: Nil

REASONS FOR DECISION

  1. This is an application by Peter Cohen (the applicant) for an Order from the Tribunal pursuant to section 79N of the Fair Trading Act 1987 (FT Act) that will require Woolworths Ltd (the respondent) to pay him the sum of $2,532.78 being compensation for motor vehicle repair and travels costs he incurred because of damage to his motor vehicle which was allegedly caused by particle contaminated fuel supplied to him by the respondent. The applicant also seeks an order pursuant to section 60 of the Civil and Administrative Tribunal Act 2013 (NCAT Act) that would require the respondent to pay his costs of obtaining a fuel analysis report which he contends was necessary for him to prove his claim before the Tribunal, which was $115.01. This application was made to the Tribunal on 23 October 2017 (the application).

  2. For reasons that are set out following, the Tribunal has determined on the evidence before it that the fuel supplied by the respondent to the applicant on 25 July 2017 was not of acceptable quality contrary to the consumer guarantee contained in section 54 of the Australian Consumer Law (ACL), in that it was contaminated with particulate matter. The contaminated fuel caused substantial damage to the engine of the applicant’s motor vehicle causing it to be inoperative without major repairs. The applicant is therefore entitled to take action against the respondent pursuant to section 259 of the ACL to recover compensation for the damage and loss he suffered as a result, which his evidence establishes was $2,166.48. The Tribunal has also determined that special circumstances exist that entitle the applicant to recover the cost of the expert report he was obliged to obtain to prove his claim.

Procedural history

  1. The application was first listed before the Tribunal for conciliation and hearing on 4 December 2017. The applicant attended that listing of the application in person. Mr Soham Lakhia, who is the respondent’s Acting Supply Chain Manager, also attended the hearing on the respondent’s behalf. In accordance with the Tribunal’s usual practice where both parties are present in person, prior to the case being called, the parties were provided with an opportunity to attempt to resolve the dispute cooperatively with the assistance of a Tribunal conciliator. Those efforts were not successful.

  2. When the parties returned to the hearing room following conciliation the Tribunal adjourned the application for a special fixture hearing on a date to be fixed by the Registrar and issued directions to the parties in relation to the filing of the documentary evidence they intended to rely upon at the hearing.

Evidence before the Tribunal

  1. Both parties have complied with the Tribunal’s directions for the filing and exchange of their evidence. In the pre-hearing period it appears that there was some dispute as to whether the applicant had served his evidence on the respondent as directed. However, as at the date of the hearing, no such issue remains. The applicants’ bundle was marked Exhibit A1. The respondent’s bundle was marked Exhibit R1.

  2. Mr Cohen attended the hearing in person gave oral evidence to the Tribunal under a solemn promise to tell the truth. He called as an expert witness Mr Sebastian Najder, who is a licenced motor vehicle repairer and principal of Euro Automotive Servicing and Tuning Pty Ltd. Mr Najder attended the hearing by telephone and gave oral evidence under a solemn promise to tell the truth. Mr Lakhia again attended the hearing on behalf of the respondent. He also gave oral evidence under a solemn promise to tell the truth.

  3. The parties had the opportunity to present their respective cases to the Tribunal, to ask each other and the applicant’s witness questions, and to make final submissions. The evidence of the parties will be referred to where relevant in the reasons that follow.

Material facts

  1. The material facts to emerge from the evidence are as follows:

  2. The applicant is the owner of a 2010 Volkswagen Golf R (motor vehicle). The motor vehicle has an EA113 engine which incorporates a 2 litre (1984 cc) Turbocharged Fuel Stratified Injection system, commonly known as “direct injection” system, as the fuel is atomised and injected directly into the cylinder at a pressure of up to 115 bar. The EA113 TFSI engine requires premium ULP fuel. The motor vehicle has a 55 litre fuel tank;

  3. The respondent operates a Woolworths Caltex retail fuel outlet located at 1 Avenue of the Americas Newington;

  4. It is not in dispute that the applicant is a regular customer of Woolworths Caltex Newington. In his oral evidence the applicant told the Tribunal that he has rarely bought fuel elsewhere as he mainly uses the motor vehicle for work and buys fuel on the way to or back from work. Woolworth Caltex Newington is conveniently located on the applicants’ route to and from work;

  5. On Tuesday 25 July 2017 at 6:08am the applicant purchased 36.97 litres of Vortex 98 fuel from Woolworths Caltex Newington at a cost of $49.50, to top up his fuel tank. The fuel was dispensed from Pump 4. A receipt for that transaction is in evidence. The applicant had previously topped up the motor vehicle’s fuel tank at Pump 4 at Woolworth Caltex Newington on 18 July 2017 when he purchased 21.57 Litres of Vortex 98 fuel at a cost of $29.75. A receipt for that transaction is in evidence;

  6. After purchasing the fuel on 25 July 2017 the applicant drove to his place of work which is less than 1 km from Woolworth’s Caltex Newington. He parked the motor vehicle at his workplace until 5:00pm at which time he left work to drive home in Shalvey. While he was driving along the M4 motorway in heavy traffic the motor vehicle started to idle rough and lose power. However, the applicant was able to complete his journey home;

  7. The motor vehicle was parked at the applicant’s home overnight. In the early morning of Wednesday 26 July 2017 the applicant attempted to use the motor vehicle to travel to work. He had great difficulty starting the motor vehicle. The engine alert light activated on the dashboard and the motor vehicle stalled repeatedly. Eventually, the applicant was able to start the motor vehicle and drive it slowly to his mechanic, Euro Automotive Servicing and Tuning Pty Ltd, which is located at a distance of approximately 5 km from his home. En-route the engine alert light on the motor vehicle’s dashboard remained activated, the engine idled rough and almost stalled repeatedly;

  8. The applicant was obliged to leave the motor vehicle at Euro Automotive Servicing and Tuning Pty Ltd for inspection and travel to work by other means. The motor vehicle was ultimately required to remain at Euro Automotive Servicing and Tuning Pty Ltd from 26 July 2017 to 10 September 2017 whilst extensive investigation and major repairs were carried out;

  9. The licensed motor vehicle repairer who carried out the investigation and repair work on the motor vehicle while it was with Euro Automotive Servicing and Tuning Pty Ltd is Mr Sebastian Najder, who is the director and Chief Mechanic of Euro Automotive Servicing and Tuning Pty Ltd. Euro Automotive Servicing and Tuning Pty Ltd specialises in the maintenance and repair of European designed motor vehicles. The applicant called Mr Najder as an expert witness in the proceedings. Mr Najder has submitted an expert report. He also gave oral evidence to the Tribunal and was cross-examined by Mr Soham on behalf of the respondent;

  10. Mr Najder’s primary evidence is set out in a “Mechanics Report” which was apparently provided to the applicant shortly after the motor vehicle was returned to him. The contents of the Mechanic’s Report are also incorporated into Mr Najder’s Expert Report which is dated 19 December 2017. It states as follows:

1) Reported issues and initial findings: Vehicle suffered from random stalling and was not able to immediately restart. Was down on power and using excess fuel. Upon the car arriving various fault codes of low fuel pressure was found and tests showed the fuel pressure at the rail was slightly under the minimum specification. The vehicle had recently been filled up with fuel and therefore had nearly a full tank of fuel.

2) Initial repairs: The main fuel pump was replaced with a low km unit and found the fuel pressure did not alter at the rail. It was determined that the main issue is the supply of fuel to the main pump. The fuel pump in the tank was checked and found to not be able to give enough pressure to the fuel filter in testing. It was able maintain this pressure after being shut down so the pump was still sealed internally and the diaphragm was intact. Upon removing the fuel pump it was found [that] there was debris in the surge tank that restricted the fuel pumps ability to take in the fuel. A new fuel pump was fitted with filter and after an initial idle the problem returned. Checking the fuel pump again the surge tank in the fuel pump had a lot of debris from the fuel. At this point it was determined that the fuel was contaminated and it was not a hardware issue.

3) Ongoing repairs: It was found to be necessary to remove and clean all parts of the fuel system as there was excess debris found in the fuel tank and fuel filter which was causing the poor running of the vehicle. The intake manifold was removed to inspect and clean the fuel rail. The high pressure fuel pump was removed and cleaned. The Injectors were removed and cleaned and then bench tested on a FSI injector machine and found to flow correctly with the correct spray pattern at given pressure. All the fuel was drained and a large sample of fuel was given to the customer including the original fuel found in the surge tank was put in a glass container. The whole fuel system/manifold was put back together with a new pump and filter and fresh BP98 was filled and the car was started and it ran fine. It was driven for 50kms without any issues.

4) Conclusion: After going through a lot of testing to determine the problem the clear cause of the issues is contaminated fuel, which although there were many safeguards with the fuel surge tank having a filter as well as the regular fuel filter small particles were able to go through and enough of them made it to the fuel rail and into the fuel pressure sensors and fuel injectors causing blockages that could only be repaired by cleaning the whole system. Once the system was cleaned the pressure returned to normal and the car returned to being how it was prior to the fuel being filled in the car.

  1. Mr Najder’s Expert Report appends a number of annotated photographs which depict the particulate matter in the motor vehicle’s fuel tank fuel filter. It also appends photographs that depict the particulate matter floating in the fuel and resting as sediment in a glass container after the contaminated fuel was drained from the engine and fuel tank;

  2. Euro Automotive Servicing and Tuning Pty Ltd is the applicant’s regular mechanic. In his Expert Report Mr Najder states that the motor vehicle has been logbook serviced by his company since July 2011 and that the most recent service was carried out on the 29th June 2017. He states that at the time of the service the motor vehicle was operating without issue or fault. The applicant has submitted into evidence a copy of the motor vehicle’s Log Book Service History which reports that the motor vehicle was serviced at Euro Automotive Servicing and Tuning Pty Ltd on 10 October 2015, 20 August 2016 and 29 June 2017. At the service on 29 June 2017 the report notes that the fuel filter was changed, among other minor work carried out;

  3. On 1 December 2017, the applicant took the fuel sample that had been drained from the motor vehicle by Euro Automotive Servicing and Tuning Pty Ltd to Intertek Testing Services (Australia) Pty Ltd for analysis. Intertek Testing Services (Australia) Pty Ltd specialises in fuel quality assurance and testing. The technician conducted what is referred to as an “Appearance Test” by a visual method and concluded that the “sample received contained approximately 3% free black to light brown coloured particulates”. The applicant has also included in his evidence a photograph of the fuel sample analysed by Intertek Testing Services (Australia) Pty Ltd. It depicts black/brown sediment resting at the bottom of a glass test tube;

  4. On 9 August 2017 the applicant made contact with Woolworths to complain that he had been supplied with contaminated fuel on 25 July 2017. Mr Lakhia dealt directly with that complaint. He directed the applicant to complete a Customer Query Form which he did and submitted on 10 August 2017. The applicant appended to that Form a photograph of the fuel drained from his motor vehicle by Euro Automotive Servicing and Tuning Pty Ltd which depicted the particulate matter in the fuel. The applicant offered to supply a sample of the fuel to Woolworths Ltd for testing. The applicant did not at that stage have a Mechanics Report to support his contention that the fuel supplied on 25 July 2017 was contaminated as the motor vehicle was still undergoing investigation and repair;

  5. By letter to the applicant dated 15 August 2017, Mr Lakhia, on behalf of Woolworths Ltd, denied that it has supplied contaminated fuel to him on 25 July 2017 or that it had any liability for the damage to his motor vehicle. The relevant sections of that letter state as follows:

…

Woolworths prides itself on providing its customers with quality products at competitive prices. In order to ensure product quality, fuel is sourced by Woolworths from Caltex Australia.

Caltex laboratory test all fuel prior to dispatch and Caltex documentation certifies that the fuel supplied from their terminals complies with the relevant fuel standards prescribed under the Fuel Quality Standards Act 2000 which are strictly regulated by the Federal Government.

Vortex 98 Premium Unleaded fuel dispatched from Caltex has been micro-filtered through a 40 micron filter to remove particulate matter and laboratory testing results from Caltex showed that Vortex 98 Premium Unleaded fuel delivered into the Newington site was free from particulates. Further to this, all fuel hoses at Woolworths petrol sites are fitted with two-stage filtration systems. The fuel drawn from the storage tank is filtered through strainers in both the draw pipe as well as the nozzle itself to prevent sedimentation or particulate matter being delivered into a customer’s vehicle.

In addition, Woolworths invests considerable time and money in its own quality assurance program. The program includes weekly underground storage tank water checks by management using industrial water seeking paste and electronic monitoring of fuel storage tanks via an automatic tank gauge which measures the presence of water to an accuracy of 1.0mm 24 hours a day, 7 days per week.

Site records show that weekly water checks performed by site management and electronic monitoring via the automatic tank gauge showed zero water present in the Vortex 98 Premium Unleaded storage tank for in excess of the last 12 months.

On the date of your purchase more than 3,900 litres of Vortex 98 Premium Unleaded fuel was sold from the Newington site and Woolworths have not received any complaints from other motorists that the fuel was contaminated. There have also been no enquiries regarding the quality of Vortex 98 Premium Unleaded fuel sold from the Newington site in the last 12 months.

Woolworths regrets any inconvenience and damage caused to your vehicle, we deny responsibility for any such damage and stand by the quality of the fuel sold to you at the Newington site.

  1. On 18 September 2017 the applicant emailed Mr Soham a copy of the Mechanics Report prepared by Mr Najder of Euro Automotive Servicing and Tuning Pty Ltd. He asked for reconsideration of his complaint based on the information contained in that report which he contended proved that “the issues experienced were clearly caused by contaminated fuel as small particles within the fuel entered the fuel system resulting in blockages in the fuel rail, sensors and injectors.” The applicant again offered Mr Soham the opportunity to test a sample of the fuel that had been drained from the motor vehicle by Euro Automotive Servicing and Tuning Pty Ltd. Mr Soham was unmoved by this report and did not respond to the offer of a sample of the fuel. He replied to the applicant as follows:

Thanks for your email. As mentioned on my letter, we have a system in placed in store to monitor and control any contamination entering into customer’s vehicle. I understand the concerns raised by your mechanic but Woolworth’s has no evidence to suggest that the fuel sold from Newington site had any presence of contamination (errors in the original).

  1. On 4 December 2017 the applicant emailed Mr Soham a copy of the Analysis Report prepared by Intertek Testing Services Australia Pty Ltd. Mr Soham did not respond to that email.

  2. The respondent’s evidence includes the following documents:

  1. copies of three Bills of Lading issued by Caltex Australia at Silverwater Terminal on 16 July 2017, 18 July 2017 and 24 July 2017 in relation to deliveries of Vortex 98 fuel to pump 4 at Woolworths Caltex Newington (among other deliveries) prior to the impugned supply of fuel to the applicant. The respondent has also provided a copy of a Bill of Lading issued by Caltex Australia at Silverwater Terminal on 25 July 2017 in relation to the next fuel delivery after the impugned supply of fuel to the applicant. At the bottom of each Bill of Lading is printed a standard form guarantee which states; “the fuel described in this document complies with the relevant fuel standard prescribed under the Fuel Quality Standards Act 2000”;

  2. copies of three K & S Energy Delivery Dockets dated 16 July 2017, 18 July and 24 July 2017 in relation to deliveries of Vortex 98 fuel to Pump 4 at Woolworths Caltex Newington (among other deliveries) prior to the impugned supply of fuel to the applicant. The respondent has also provided a copy of a K & S Energy Docket dated 25 July 2017 in relation to the next delivery of Vortex 98 fuel to Pump 4 at Woolworths Caltex Newington (among other deliveries) after the impugned supply of fuel to the applicant. At the bottom of each docket there are two signature panels, one each for the driver of the delivery tanker and the receiver of the fuel. Above the driver’s signature panel is the following statement: “[t]he quality of the fuel described has not been altered since being received and the fuel has been supplied to the place of delivery in full as indicated on this docket and in accordance with the Bill of Lading.” Above the receiver’s signature panel is the following statement: “[t]he quality and quantity of fuel as indicated in this document and in accordance with the Bill of Lading has been accepted as received in its entirety and in acceptable condition on the date indicated above”;

  1. A “Site Configuration Report” for Woolworths Caltex Newington. This report sets out the fuel tank grades, manifolds, alarm levels, and calibration values for each tank. It also provides information about the type of dispenser hoses fitted to each pump terminal. The Report states that the Vortex 98 fuel tank has a 15,000 litre capacity and the dispenser hose at pump 4 for the Vortex 98 is hose 2;

  2. a copy of a “Site Report Form” completed by Mr Nughat Khan who is the Manager of Woolworths Caltex Newington on 10 August 2017 after receipt of the applicant’s complaint. This report states that Woolworths Caltex Newington sold 3986 Litres of Vortex 98 fuel on 25 July 2017 and received no other complaints about that fuel;

  3. a copy of a “Tank Inventory Report” for the fuel tanks at Woolworths Caltex Newington taken on 1 December 2017. It states that there was no water in the Vortex 98 tank (tank 3) on that date;

  4. a copy of a “Historical Tank Reconciliation” report for the fuel tanks at Woolworths Caltex Newington. Mr Lakhia submits that among other things this report reveals that there was not water in the tank 3 on 25 July 2017 or at any other time in at least the last twelve months.

Jurisdiction

  1. I am satisfied that I have jurisdiction to deal with this application as a consumer claim under Part 6A of the FT Act. The applicant is a consumer and the respondent is a supplier of goods within the meaning of that Part. The goods in dispute (the Vortex 98 fuel) was supplied in the course of trade and commerce and it was supplied in New South Wales. The applicant has applied to the Tribunal within the limitation period applicable for a consumer claim and the claim is within the monetary limits that apply to such claims.

  2. The applicant has not, in terms, articulated a cause of action in his application. However, his claim discloses potential causes of action in contract, negligence, and for failure to comply with statutory guarantees in relation to the supply of goods contained in Chapter 2, Part 3 of the ACL. The ACL forms part of the law of NSW and may be applied in the determination of a consumer claim under Part 6A of the FT Act.

Applicable law

  1. For convenience I will deal with the applicant’s claim as being founded on the alleged failure of the respondent to comply with the statutory guarantee as to acceptable quality in relation to the supply of goods contained in section 54 of the ACL. In this respect, it appears to me uncontroversial that fuel falls within the broad scope of the definition of “goods” contained in section 3 of the ACL. I am satisfied that if I were to have dealt with the application as a claim in contract or tort, it would have led to no different result in this case.

  2. Section 54 of the ACL provides that if a person supplies goods in trade and commence (and not by auction) there is a guarantee as to acceptable quality: sub-section 54(1). Goods must be of acceptable quality in terms of being fit for the purpose for which they are commonly supplied, they must be acceptable in appearance and finish, they must be free from defects, and they must be safe and durable: subsection 54(2)(a) to (e).

  3. The test for these qualities is an objective one. It is what a “reasonable consumer” fully acquainted with the state and condition of the goods (including any hidden defects) would regard of acceptable quality having regard to the nature of the goods, the price paid for them, any statements made about the goods in advertising materials, any representations made about the goods by the supplier or manufacturer of the goods and any other relevant factors: subsection 54(3).

  4. Goods will not fail to be of acceptable quality if the supplier brought the relevant defect to the attention of the consumer before they were supplied (subsections 54(4) and (5), or if it is conduct by the consumer that causes the goods to become of unacceptable quality (subsection 54(6)), or if the defect could have been discovered by the consumer upon reasonable examination (subsection 54(7)).

  5. Section 259 of the ACL set out the remedies that may be available to a consumer against a supplier if a supplier fails to comply with a consumer guarantee relating to goods. In summary, and relevantly, a consumer may take action against a supplier if the supplier contravenes a guarantee in relation to goods: Subsection 259(1). This includes action against a supplier to recover damages for any consequential loss they have incurred due to the failure to comply, provided that loss was reasonably foreseeable: subsection 259(4). The test for ‘reasonable foreseeability’ is the same as it is in contract. In the circumstances of this case, the applicant must prove that his alleged damage and loss arises naturally from, or is an ordinary consequence of, the failure to comply with the guarantee: cf Hadley v Baxendale [1854] 9 Ex 341.

  6. The applicant bears the onus of proving that the fuel supplied to him was not of acceptable quality to the civil standard of proof, which is the balance of probabilities: Briginshaw v Briginshaw (1938) 60 CLR 336. This standard of proof was described by Lord Denning in Miller v Minister for Pensions [1947] 2 All ER 372 [at 374] as requiring the Tribunal to be satisfied that an alleged fact was “more probable than not”. However, the Tribunal must “feel an actual persuasion of [the alleged fact’s] occurrence or existence before it can be found. It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality ” … [the occurrence or existence of the fact must be established]… to the reasonable satisfaction of the Tribunal”: Briginshaw [at 361-2].

Consideration

  1. Having regard to the applicant’s cause of action, the material facts, the contentions of the parties, and the applicable law, the questions the Tribunal must pose and answer in order to determine the outcome of this application may be stated as follows:

  1. Did the respondent comply with the guarantee as to acceptable quality contained in section 54 of the ACL when it supplied the Vortex 98 fuel to the applicant on 25 July 2017;

  2. If not, did the applicant suffer damage and loss as a result of that supply for which he is entitled to be compensated?

  3. Is the applicant entitled to recover the costs of his expert report from the respondent?’

Did the respondent comply with the guarantee as to acceptable quality?

  1. It may be readily accepted that the supply of particle contaminated fuel that is capable of causing engine failure would constitute a failure to comply with the guarantee as to acceptable quality. The fuel would not be fit for the purpose for which it was supplied, it would not be free from defects, and it would not be safe within the meaning of subsections 54(2)(a), (c) and (d) respectively. A reasonable consumer who knew that fuel has particulate contamination that was likely to cause engine failure would not purchase the fuel.

  2. The applicant’s evidence establishes to my satisfaction that the fuel in his motor vehicle’s fuel tank contained approximately 3% dark particulate contamination immediately following his attendance at Woolworths Caltex Newington at 6:08am on 25 July 2017. It also establishes to my satisfaction that the contaminated fuel caused the engine of the motor vehicle to malfunction and become virtually inoperative within 24 hours.

  3. The challenge for the applicant in this case is to prove that the fuel he purchased from the respondent was in the source of the contamination of the fuel in his fuel tank. He must do so in the context of robust fuel quality standards imposed upon the respondent and its supply chain by the Fuel Quality Standards Act 2000 which have apparently been complied with by the respondent and its supply chain.

  4. The applicant was a credible and compelling witness. I am satisfied that he told the truth. His expert, Mr Najder, was also a credible and compelling witness. No issue as to the truthfulness or credibility of the applicant or the credibility of Mr Najder was raised by the respondent. However, on behalf of the respondent Mr Lakhia did vigorously dispute their interpretation of events and facts as they portrayed them.

  5. The applicant’s evidence establishes to my satisfaction that he usually purchases fuel from the respondent and that he last did so on 18 July 2017, seven days prior to the supply of the impugned fuel. He did not top up his fuel tank between 18 and 25 July 2017. The applicant’s motor vehicle was operating normally up to the time he purchased fuel from the respondent at or about 6.08am on 25 July 2017. The motor vehicle has a regular service history with Euro Automotive Servicing and Tuning Pty Ltd. Mr Najder gave evidence that he had most recently carried out a full service of the motor vehicle on 29 June 2017 just 26 days before the incident. He said that the motor vehicle was operating normally at that time and that no significant issues were detected. A fuel filter was replaced during that service.

  6. The motor vehicle began to experience mechanical malfunction on the day the fuel was purchased from Woolworths Caltex Newington after travelling only a relatively short distance to the applicant’s workplace. Initially the motor vehicle was capable of being driven, but by the next morning it was virtually inoperative. The applicant has given evidence that the motor vehicle was in his custody and control for the whole of the period between him leaving the bowser at Woolworths Caltex Newington at or about 6.08am on 25 July 2017 and him delivering the motor vehicle to Euro Automotive Servicing and Tuning Pty Ltd on the morning of 26 July 2017. The applicant was not physically present with the motor vehicle for the whole of this time, but he gave evidence to the effect, and I am satisfied, that the motor vehicle was not tampered with at any time during this period.

  7. The respondent contends that the fuel it sold to the applicant could not be the source of the contamination for essentially three reasons. First, it contends this is because of the stringent quality assurance measures it and its supply chain are required to comply with by the Fuel Quality Standards Act 2000. It contends that the supply chain certificates for fuel deliveries to Woolworths Caltex Newington prior to the incident establish that the fuel in the Vortex 98 tank (tank 3) met those quality standards. It contends that the fuel it supplies to customers first passes through a 40micron filtration systems at Caltex and at the Woolworths Caltex Newington retail outlet that would prevent particulate matter from entering a customer’s fuel tank.

  8. As noted above, the quality assurance compliance regime imposed on the respondent and its supply chain by the Fuel Quality Standards Act 2000 is robust and it must be given weight in the balance of probabilities. The supply chain certificates associated with the deliveries of fuel to Woolworth’s Caltex Newington purport to certify compliance with that regime. However, there is a degree to which these certificates are ipse dixit; that is, they are a bare assertion of a fact the only evidence of which is the certificate itself.

  9. At least, if they do connote more than a bare assertion, this has not been established on the respondent’s evidence. The respondent has included no expert evidence, and it has not called any expert witness, to explain to the Tribunal how or why these certificates are more than mere bare assertions of fact, if that is the case. The Tribunal itself has no particular expertise that would enable it to discern this independently of the evidence presented by the respondent. It is not therefore not apparent to the Tribunal from the respondent’s evidence how or why the supply chain quality assurance system is utterly failsafe in preventing contaminated fuel from entering its fuel tanks, if that is what is contended.

  10. The applicant contends that the particulate matter present in the fuel was smaller than 40microns, which was why it was able to pass through the Caltex’s and the respondent’s fuel filtration system into his motor vehicle’s fuel tanks. He says that this is also why the motor vehicles own filtration systems did not prevent the particulate matter from passing through the fuel injectors. He has submitted no expert evidence that establishes the size of the particles. However, he says that the diameter of a human hair is approximately 40microns and visual inspection of the particulate matter reveals that the particles are smaller than that. I accept that this is the applicant’s honest opinion, but he has no particular expertise that qualifies that opinion. This affects the weight I am able to give this evidence. The applicant bears the onus of proving his claim; the respondent does not bear the onus of disproving it. Nevertheless, the respondent has submitted no evidence that establishes that the particulate matter in the fuel would have been captured by its fuel filtration system. In this respect, I note that the applicant repeatedly offered the respondent access to a sample of the fuel which it refused.

  11. I am thus led to the conclusion that if the particulate matter was greater than 40microns in size it is likely to have been captured by Caltex’s and the respondent’s fuel filtration system (assuming they were functioning as designed) and prevented from entering the applicant’s fuel tank. However, as the size of the particulate matter has not been proved by either party, it may be less than 40 microns. The Caltex and the respondent’s fuel filtration systems would not have prevented the particulate matter being transferred from its fuel tank and pump into the applicant’s motor vehicle in that circumstance.

  12. Second, the respondent contends that its records of regular testing for water in each of the tanks at Woolworths Caltex Newington establishes that there was no water in the Vortex 98 tank (tank 3) at any relevant time prior to 25 July 2017 or after that date. The applicant does not contend that there was water in the fuel supplied to him. However, Mr Lakhia gave evidence that one potential source of particulate contamination of fuel was mould growing in the fuel tank which can only occur if water is present.

  13. The applicant’s evidence does not establish what the particulate matter in the fuel is, and nor does he express any opinion about its’ composition. He does not specifically contend that it is mould particles. The respondent’s evidence is sufficient to establish that the conditions inside the Vortex 98 tank (tank 3) would not support mould growth due to the absence of water. But this fact by itself is of limited probative value in the absence of proof that the particulate matter is mould residue. In this respect, I note again that the respondent did have the opportunity to test the contaminated fuel and could have determined its composition but that it declined to do so.

  14. Third, the respondent contends that the probability of the applicant being dispensed contaminated fuel in absolute isolation from any other customer who was dispensed fuel from the Vortex 98 tank (tank 3) on or about 25 July 2017 is so low that there is no real chance or likelihood of that this occurred. In this respect, the respondent contends that it received no other complaint from any customer served on or about that date, despite dispensing several thousands of litres of fuel during the period. This is a compelling submission that must be given considerable weight. However, it cannot be decisive of the case. The fact that no complaints were received from other customers cannot exclude the possibility that contaminated fuel was supplied to them, or that they experienced engine malfunction as a result. It only positively proves that they did not complain to the respondent about this.

  15. The applicant contends that his motor vehicle is more susceptible to damage from particulate contaminated fuel because of its direct injection fuel system. He contends that other fuel systems are unlikely to be damaged in the same degree by fine particulate matter, and that an operator may only experience minor mechanical malfunction. He suggests that this may be why the respondent did not receive other complaints about the fuel quality on or about 25 July 2017. In his oral evidence, Mr Najder, gave opinions to the same effect.

  16. In his evidence and submissions to the Tribunal on this point I did not understand Mr Lakhia to take issue with the proposition that the applicant’s direct injection fuel system was more likely to suffer serious damage from particulate contaminated fuel than other fuel systems. However, he contended in response that Vortex 98 is a fuel recommended for use in motor vehicles with direct injection fuel systems and that it was likely that many customers with motor vehicles with direct injection fuel systems had fuel dispensed to them from the Woolworths Caltex Newington Vortex 98 fuel tank (tank 3) on or about 25 July 2017.

  17. Despite the weight that must be given to the evidence concerning the respondent and its supply chain’s robust fuel quality assurance systems, and low probability that only one customer’s motor vehicle would affected by contaminated fuel, I am nevertheless satisfied on to the civil standard of proof that the respondent did supply the applicant with particulate contaminated fuel on 25 July 2017.

  18. I arrive at this conclusion by inference. The circumstantial evidence to this effect is compelling. On the evidence before me, this fact is more probable that not and I feel an actual persuasion as to its occurrence. No other plausible or rational explanation emerges from the evidence. The applicant arrived at the respondent’s bowser on or about 6.08am on 25 July 2017 in a motor vehicle that was well maintained and which was operating normally. The fuel pre-existing in his motor vehicle’s fuel tank had been dispensed from the same bowser the week before. The fuel filter in the motor vehicle had been renewed just 26 days beforehand. Later that day, after the motor vehicle had travelled only a relatively short distance to the applicant’s work place it began to experience mechanical malfunction and was inoperative within 24 hours. The cause of that malfunction was subsequently discovered to be particulate contaminated fuel.

  19. No other reasonable hypothesis for the source of the contamination of the fuel in the applicant’s fuel tank emerges from the evidence. Following the incident, the applicant’s fuel tank, fuel lines and other engine componentry were the subject of investigation by the applicant’s regular mechanic and expert witness, Mr Najder. It is clear from his evidence that Mr Najder commenced his investigation with the expectation that he would discover a cause of the malfunction in the motor vehicle’s engine components. However, after testing each component he did not discover any fault. All components were found to be in good condition and operating normally. A fuel sample taken from the applicant’s fuel tank was tested by Intertek Testing Services Australia Pty Ltd. It was found to contain particulate matter but no water. This excludes water contamination in the motor vehicles fuel tank (and related mould growth) as the source of the contamination. The respondent was repeatedly offered the opportunity to inspect and test the fuel removed from the fuel tank but declined to do so.

  20. The evidence before the Tribunal is ultimately to be weighed according to the proof which it was in the power of one party to produce and the power of the other party to contradict: Medtel Pty Limited v Courtney 198 ALR 630 [at 76]. The onus of proving that the respondent supplied particulate contaminated fuel to him on 25 July 2017 rests with the applicant. However, it appears to me that the respondent acted to its own peril in failing to establish a credible alternative hypothesis for the contamination. For example, had the fuel sample been tested, and had it been determined that the particulate matter was mould residue, the respondent’s evidence that its Vortex 98 tank (tank 3) did not contain water at any material time would be more compelling. It would be necessary to assume an alternative source of water contamination. Similarly, had the particulate matter been determined to be more than 40microns in size, the respondent’s submission that Caltex and its fuel filtration systems (which are calibrated at this level) would have prevented its transfer into the applicant’s motor vehicle would be more compelling. Again, it would be necessary to assume an alternative source of the contamination.

  1. It is not necessary for the applicant to prove precisely how the fuel supplied to him by the respondent came to be contaminated. It is not within his power to do so in the circumstances. His task is limited to establishing that it is more probable than not that the fuel supplied did have particulate contamination and that this caused his motor vehicle serious mechanical malfunction. He has discharged that onus to my comfortable satisfaction. For the foregoing reasons I am satisfied that the respondent failed to comply with the guarantee as to acceptable quality contained in section 54 of the ACL in supplying the contaminated fuel to him.

Did the applicant suffer damage and loss as a result of that supply for which he is entitled to be compensated?

  1. The applicant seeks to be compensated for the following alleged damage and loss arising from the supply of the particle contaminated fuel to him:

  1. Costs of repair of the motor vehicle: $1,850.00;

  2. Refund of the purchase price of the contaminated fuel:    $49.50;

  3. Cost of refilling his motor vehicle’s fuel tank following the repair of the engine (55 litres of fuel at $1.60 per litre): $88.00 and

  4. Alternative transport costs for the period the motor vehicle was inoperative and undergoing investigation and repair calculated at the rate of bus and train fares for 32 days: $545.28

  1. I am satisfied that damage to motor vehicle’s engine is a reasonably foreseeable consequence of the respondent’s failure to comply with the guarantee as to acceptable quality in supplying contaminated fuel to him. The evidence establishes that the particulate matter in the fuel caused serious damage to the engine. The applicant has submitted in his evidence a copy of an invoice rendered on him by Euro Automotive Servicing and Tuning Pty Ltd for the costs of the investigation and repairs it carried out on the motor vehicle following the incident, which is in the amount of $1,850.00. The work itemised in that invoice is clearly directed to the investigation and repair of the damage caused by the contaminated fuel and does not extend beyond it. The respondent did not put the amount claimed for the investigation and repair in issue. I am satisfied that this repair cost is objectively reasonable having regard to the extensive investigation and repairs carried out. I will therefore order the respondent to compensate the applicant in this amount.

  2. The applicant claims compensation for the cost of the contaminated fuel. I am satisfied that the damage the applicant incurred in the supply of this fuel is a reasonably foreseeable loss he can recover from the respondent. Leaving aside the damage to the motor vehicle caused by the fuel, the fuel itself had to be drained from the motor vehicle and discarded. The applicant derived no benefit from it. The money he paid for it was thus thrown away. The applicant also claims compensation for the cost of refilling the motor vehicle’s fuel tank following the motor vehicle’s repair. He was obliged to refill the fuel tank because all the fuel had to be drained from it due to its intermingling with the contaminated fuel. The fuel that was already in the fuel tank when he topped it up with the contaminated fuel was therefore also wasted causing the applicant loss that was a foreseeable consequence of the supply of the contaminated fuel.

  3. However, the applicant cannot recover both the cost of the contaminated fuel and the costs of refilling the fuel tank after the motor vehicle’s repair because this would result in him being compensated twice for the contaminated fuel. The applicant has not submitted into evidence a receipt for the supply of the new fuel following the motor vehicle’s repair. His claim is based on the supply of 55 litres of fuel at $1.60 per litre. That claim is not controversial. I will therefore order the respondent to compensate the applicant for the cost of refilling the fuel tank following the motor vehicle’s repair in this amount.

  4. The applicant claims the cost of his travel to and from work by bus and train for the 32 days that the motor vehicle was inoperative and undergoing investigation and repair. There is no issue that the applicant used his motor vehicle to travel to and from work each day apart from other personal use. No receipts for this travel can be provided because the applicant used an Opal Card. However the amount claimed for this travel is modest and not controversial.

  5. The damage to the motor vehicle caused by the contaminated fuel rendered it operative. The applicant was thus obliged to travel by other means and incurred a cost in doing so. I am satisfied that any additional cost he incurred above that he would normally incur in traveling in his motor vehicle is a foreseeable loss arising from the supply of the contaminated fuel. However, the applicant cannot recover from the respondent all his travel costs for the period. He must deduct the costs he would have incurred in the ordinary course had he had the continued use of the motor vehicle. Doing the best that I can with the evidence before me I will estimate that the applicant’s weekly fuel bill was $50.00 or $7.14 per day. His usual travel costs over a 32 day period would thus be $228.48. Deducting that amount from the amount claimed by the applicant for alternative travel produces a residual figure of $316.80. I am satisfied that it is this sum that is the measure of the applicant’s loss and will order that the respondent compensate him in this amount.

Costs

  1. The applicant also seeks an order from the Tribunal that the respondent pay the costs he incurred in obtaining a Fuel Analysis Report from Intertek Testing Services (Australia) Pty Ltd, which was $150.01. He has submitted into evidence a copy of Intertek Testing Services (Australia) Pty Ltd for that work, which is dated 4 December 2017.

  2. Section 60 of the NCAT Act provides that the usual rule in proceedings before the Tribunal is that each party bears its own costs of the proceeding, unless the Tribunal is satisfied that there are special circumstances that justify the making of an order for costs. Pursuant to subsection 60(5) “costs” includes the costs of, or incidental to the proceeding. Pursuant to subsection 60(4) the Tribunal may either determine by whom and to what extent costs are to be paid, or order that costs be assessed on the basis set out in the legal costs legislation or on any other basis.

  3. The cost of an expert report is a legal cost within the meaning of sub-section 60(5) because it is a type of disbursement that would normally be paid out by a solicitor in the conduct of litigation. Although the applicant is a litigant is person he can potentially recover a cost of this kind: Profitability Consulting Pty Ltd v Thorpe [2018] NSWCATAP 41 [at 20] applying Farquar & Farquar (No. 2) [2008] FamCA 682. However, it falls to the applicant to prove that there are special circumstances that entitle him to do so in the circumstances of this case.

  4. The Tribunal’s discretion to award costs must be exercised judicially having regard to the underlying principle that parties to proceedings are ordinarily to bear their own costs: CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [23] – [31]; eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94 at [48]; Nguyen & Anor v Perpetual Trustee Company Ltd; Perpetual Trustee Company Ltd v Nguyen & Anor (No.2) [2016] NSWCATAP 168 at [15] – [16]. In determining if the “special circumstances” exception is engaged, the Tribunal may have regard to a series of considerations set out in subsection 60(3) which include, relevantly, (d) the nature and complexity of the proceedings and (g) any other matter the Tribunal considers relevant. The term “special circumstances” is not defined in the NCAT Act but the Appeal Panel of this Tribunal has repeatedly interpreted it to mean circumstances that are out of the ordinary but not necessarily extraordinary or exceptional.

  5. The Appeal Panel also said in Alexander James Pty Ltd v Pozetu Pty Ltd (No. 2) [2016] NSWCATAP 75 at [13] to [14]:

13.    It is generally accepted that “special circumstances” mean something out of the ordinary, which invites an examination of the particular circumstances of the proceedings under consideration and a comparison with what may be characterised as “ordinary circumstances.” The difficulty with expressing the matter in any generality may be illustrated by reference to one of the sub paragraphs of sub section [60](3), namely (d); the nature and complexity of the proceedings. Even an outwardly “ordinary” claim which comes before the Tribunal for, for example, defective building works or defective motor vehicle repairs, may become unusually complex by reason of the matters involved. The former may raise complex geotechnical questions as to the suitability of the underlying ground structure in which to site a swimming pool, and the latter may raise complex questions such as the installed computer program measuring emissions from the fuel system. Resolution of the controversy between the parties may involve consideration of complex expert technical opinion at the very highest level. It may also involve determination of any legal liability to be borne by third parties who may not be parties to the proceedings.

14. An assessment whether circumstances are “special” involves the exercise of a value judgement carried out by way of comparison between what is not “special”, and what is special. There are no scientific means by which the former can be ascertained. The evaluative process is necessarily one of impression informed by the particular provisions of section 60, which by sec 60(3)(f) incorporates also a consideration of section 36(3) of the Act.

  1. Having regard to the relevant considerations I am satisfied that the applicant is entitled to recover the costs of producing his expert evidence under the special circumstances exception in this case. I am satisfied that the special circumstances exception to the general rule is established because of the complexity of the proceedings (subsection 60(3)(d) of the NCAT Act). The respondent put the applicant to the proof of his claim. Proof of the claim required complex technical evidence to be adduced by the applicant and considered by the Tribunal. There was little or no prospect of the applicant being able to prove his claim without expert evidence. These circumstances are out of the ordinary.

Conclusion

  1. For the foregoing reasons the respondent must pay the applicant the total amount of $2,316.50 which is constituted by $2116.48 in compensation which I order pursuant to sub-section 79N(a) of the FT Act and $150.01 in costs which I order pursuant to section 60 of the NCAT Act. This payment is to be made within 14 days.

P French

General Member

Civil and Administrative Tribunal of New South Wales

24 April 2018

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

Decision last updated: 01 August 2018

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Briginshaw v Briginshaw [1938] HCA 34
Briginshaw v Briginshaw [1938] HCA 36
Farquar & Farquar (No. 2) [2008] FamCA 682