Complete Building Pty Ltd v SNB Plus 3 Pty Ltd as Trustee for the Martin Family Trust t/a Macleay Trailers and Steel Fabrications

[2019] NSWCATCD 6

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Complete Building Pty Ltd v SNB Plus 3 Pty Ltd as Trustee for the Martin Family Trust t/a Macleay Trailers & Steel Fabrications [2019] NSWCATCD 6

Hearing dates:

7 December 2018

Date of orders:

22 January 2019

Decision date:

22 January 2019

Jurisdiction:

Consumer and Commercial Division

Before:

P French, General Member

Decision:

(1) The applicant’s name Daniel Muscat and Kristy Muscat is amended to Complete Building Pty Ltd.

 

(2) The respondent’s name Sarah Maree Reid Martin & Bradley Scott Martin t/a Macleay Trailers and Steel Fabrications is amended to SNB Plus 3 Pty Ltd as Trustee for the Martin Family Trust t/a Macleay Trailers & Steel Fabrications.

 

(3) SNB Plus 3 Pty Ltd as Trustee for the Martin Family Trust t/a Macleay Trailers & Steel Fabrications must pay Complete Building Pty Ltd the sum of $1,316.55 immediately.

 

(4) The application is otherwise dismissed

 (5) The applicant’s application for costs is dismissed.

Catchwords:

MOTOR VEHICLES – custom-made trailer – failure to comply with the guarantee as to acceptable quality in the supply of goods – failure to comply with the guarantee as to fitness for a disclosed purpose – where the applicant has deprived the respondent of the opportunity to repair the trailer

Legislation Cited:

Australian Consumer Law (NSW): ss 54; 55; 259; 261
Fair Trading Act 1987: ss 28; Part 6A

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 Exch 341
Lam v Steve Jarvin Motors Pty Ltd [2016] NSWCATAP 186
Marcourt v Clark [2012] NSWCA 367
Miller v Minister for Pensions [1947] 2 All ER 372
Nguyen & Anor v Perpetual Trustee Company Ltd; Perpetual Trustee Company Ltd v Nguyen & Anor (No.2) [2016] NSWCATAP 168
Profitability Consulting Pty Ltd v Thorpe [2018] NSWCATAP 41

Texts Cited:

Vehicle Standard (Australian Design Rule 62/02 – Mechanical Connections Between Vehicles) 2007

Category:

Principal judgment

Parties:

Complete Building Pty Ltd (Applicant)
SNB Plus 3 Pty Ltd as Trustee for the Martin Family Trust t/a Macleay Trailers & Steel Fabrications (Respondent)

Representation:

Daniel Muscat and Kirsty Muscat (Applicant)
Sarah Martin and Bradley Martin (Respondent)

File Number(s):

MV 18/35869

Publication restriction:

Nil

REASONS FOR DECISION

Introduction

1. This is an application by Complete Building Pty Ltd (the applicant) for an order from the Tribunal pursuant to subsection 79N (a) of the Fair Trading Act 1987 (FT Act) that would require SNB Plus 3 Pty Ltd as Trustee for the Martin Family Trust t/a Macleay Trailers & Steel Fabrications (the respondent) to pay it $8,734.15 in compensation for costs it has incurred in relation to a custom made trailer it purchased from the respondent under a contract made on or about 18 July 2015. The applicant also seeks orders that would require the respondent to pay it prejudgement interest and costs. The applicant contends it is entitled to these orders because the respondent failed to fulfil the terms of the contract and also to comply with the consumer guarantees in relation to the supply of goods contained in the Australian Consumer Law (ACL) when it supplied the trailer to it. This application was made to the Tribunal on 16 August 2018 (the application).

2. For the reasons set out following, the Tribunal has concluded that the applicant is entitled to an order that will require the respondent to pay it $1,316.55 immediately, being the difference in price between the black wheel rims it contracted for and the white wheel rims actually supplied ($83.60), the cost of an engineer’s report that it was obliged to obtain to establish the cause of the cracks in the trailer’s drawbar ($1,192.95), and a related weighbridge fee ($40.00).

3. The remainder of the applicant’s claims have been dismissed. No manufacturing defect in relation to the electric brakes and wheel bearings dating to October 2015 is established on the very bare evidence the applicant has submitted in relation to this issue. While the applicant’s evidence is sufficient to establish that there was a manufacturing defect in the drawbar which the respondent was obliged to rectify under the provisions of the ACL, the respondent was entitled to the opportunity to carry out this repair at its’ own cost. The evidence establishes that the applicant refused to return the trailer to the respondent for this purpose at the applicant’s cost due to its distance from the respondent and the cost of transport it would incur. It demanded that the respondent bear this cost, which the respondent refused to do. The ACL does not impose an obligation on a respondent to bear the cost of transport for the return of goods for repair. By its conduct, the applicant, in effect, deprived the respondent of the opportunity to which it was entitled to repair the trailer. That being the case, the applicant is not entitled to take action against the respondent to recover its costs of having these repairs carried out elsewhere.

4. The applicant’s application for costs has also been dismissed on the basis that there are no special circumstances that warrant a departure from the usual rule that each party bears its own costs of the proceedings.

Procedural history

5. The application was first listed before the Tribunal for Conciliation and Hearing in a Group List on 26 September 2018. Mr Daniel Muscat and Ms Kristy Muscat attended that hearing in person on behalf of the applicant. Mr Bradley Martin and Ms Sarah Martin attended that hearing by telephone link on behalf of the respondent. In accordance with the usual practice at the first listing of an application, the Tribunal, differently constituted, attempted to assist the parties to resolve the dispute co-operatively by conciliation. Those efforts were not successful.

6. After the conclusion of the conciliation, the Tribunal adjourned the application for a Special Fixture hearing and gave directions to the parties for the filing and exchange of their evidence. The Registrar later set the matter down for a Special Fixture hearing at 9:15am on 21 November 2018 and issued hearing notices to the parties accordingly.

7. It appears that in spite of the directions the Tribunal made on 26 September 2018 a dispute developed between the parties in relation to the evidence to be submitted to the Tribunal and also as to the proper description of the parties. This resulted in the application being listed before the Tribunal, differently constituted, for a Directions Hearing on 18 October 2018 where further directions were made for the filing and exchange of evidence. Amendments were also made to the description of the respondent at that time.

8. On 20 November 2018, the Special Fixture hearing set down for 21 November 2018 was adjourned by the Tribunal, differently constituted, following an application by the respondent’s principals on family and medical grounds. The Registrar subsequently relisted the matter for a Special Fixture Hearing before me on 7 December 2018.

Identification of the parties

9. A review of the communications between the parties and the Registrar, and the evidence and submissions filed by the parties, clearly indicated unresolved issues in relation to the proper identification of the parties. As a consequence, prior to embarking on a hearing of the substantial application, the hearing initially focused on this issue.

10. Having heard from the parties at some length, and after having carefully reviewed the available documentation and conducted additional organisational searches I was satisfied that the applicant should be identified as Complete Building Pty Ltd and the respondent as SNB Plus 3 as Trustee for the Martin Family Trust t/a Macleay Trailers & Steel Fabrications. I made orders amending the identification of the parties accordingly.

Evidence

11. Both parties filed and exchanged documentary evidence in response to the Tribunal’s directions. The file record indicates that there had been an ongoing dispute between the parties about the filing an exchange of evidence in the lead up to the hearing. However, no further objections were pressed at the hearing by either party and I was, additionally, satisfied that the parties’ evidence had been filed and exchanged in sufficient time to ensure that the hearing could be conducted fairly. The applicant’s bundle was marked Exhibit A1. The respondent’s bundle was marked Exhibit R1.

12. Ms Kristy Muscat and Mr Daniel Muscat both attended the hearing in person on behalf of the applicant. Both gave oral evidence under affirmation. Ms Sarah Martin and Ms Bradley Martin attended the hearing by telephone on behalf of the respondent. Both also gave oral evidence under affirmation. The parties had the opportunity to present their cases, to ask each other questions, and to make final submissions to the Tribunal. The evidence of the parties will be referred to where relevant in the reasons that follow.

Application to amend the application

13. In the course of the hearing Ms Muscat, on behalf of the applicant, sought to amend the application to seek and orders for a refund of the purchase price of the trailer and the return the trailer to the respondent on the basis that in supplying the trailer to the applicant the respondent had failed to comply with the guarantee as to acceptable quality, and that this was a major failure. I refused that application.

14. No prior notice of that proposed amendment had been provided to the respondent prior to the hearing. The application had been before the Tribunal twice previously and no such application had been made. The respondent was thus taken by surprise by this application and it would not have been procedurally fair to it to permit the amendment at that late stage. I considered that the applicant had had a reasonable opportunity to formulate its case and that it was bound at the hearing by the case it had determined to run. Moreover, on a simple factual basis, the evidence established that at no time in the dispute up to the hearing had the applicant notified the respondent that it rejected the trailer as would be required to establish an entitlement to such orders even if the amendment had been permitted.

Material facts and contentions of the parties

15. The applicant is a registered Australian Proprietary Company limited by shares which conducts a business in small scale construction and related services. Its’ directors are Kristy and Daniel Muscat. The applicant is located in Kemp’s Creek in Sydney.

16. The respondent is also an Australian Proprietary Company limited by shares which is a trustee for a family trust that conducts a business designing, constructing, and supplying custom made trailers and other steel fabrications. Its’ directors are Sarah and Bradley Martin. The respondent is located in South West Rocks on the Mid-North Coast of NSW.

17. In or about early July 2015, Mr Muscat contacted the respondent to inquire about the supply of a custom made trailer. In their evidence and submissions, Mr and Ms Muscat stated that they wanted the trailer for both business and personal use. The primary business use for which the trailer was sought was to transport a Bobcat tractor used in the applicant’s business. It is not in issue that this fact was communicated directly to Mr Martin in the pre-contract negotiation period.

18. On 16 July 2015 in the respondent provided the applicant with a quotation for the supply of such a trailer at a total cost of $7,500.00. The salient elements of that quotation for the purpose of this dispute are set out following:

To supply and construct a Flat top trailer as per your specification (Manual tilt)

1 x Flat top trailer 2.200m wide x 4.800 long

Colour: TBA

MY PRICE BEING $7,500 INCL GST

A DEPOSIT OF 50% IS REQUIRED UP FRONT AND THE BALANCE ON COMPLETION

…

Specifications

• Flat top Trailer Dual Axle trailer with 3500 kgs GVM capacity

• Tare weight of car trailer 759 kgs

• Deck area of Trailer 4.8m long x 2.1.50mm wide

• …

• Draw bar 100x50x5mm RHS (1.8long)

• …

• New 14” BLACK Sunraiser Rims (Ford Stud Pattern)

• …

• Includes 12 month warranty

• Trailer comes with Vin Number, all RMS inspections so all you have to do is go to the RMS to register

• …

19. On or about 18 July 2015 the applicant accepted this quotation and the parties entered into a contract for the supply of the trailer. Apart from the quotation, the contract was made orally. The applicant paid the respondent a deposit of $3,750.00 on that date. In August and September 2015 there were further communications between the parties in relation to the specifications for the trailer. This led to some variations to the original contract and its price.

20. It is not in issue that it was a term of the contract that the trailer would be capable of transporting the applicant’s Bobcat tractor. On 17 September 2015, apparently at Mr Martin’s request, Mr Muscat sent Mr Martin an email which attached three documents in relation to the specifications for the Bobcat. These documents are in evidence. They provide operating data and dimensions for the Bobcat, but they do not include any information about the weight of the Bobcat. In his cover note to that email Mr Muscat states: “Please see the Bobcat specifications attached – let me know if you require further info….” This email and its enclosures have some significance for the resolution of this dispute. As will emerge following, the trailer that was ultimately supplied to the applicant by the respondent is incapable of safely bearing the weight of the Bobcat tractor.

21. The respondent completed construction of the trailer on or about 24 September 2015 and submitted its final invoice to the applicant for payment on that date. With the design variations agreed between the parties the total contract price had increased to $11,286.00. The applicant paid this final invoice in full on 28 September 2015 and Mr Muscat collected the trailer from the respondent on 30 September 2015.

22. When Mr Muscat collected the trailer Mr Martin advised him that he had been obliged to fit white wheel rims on the trailer because the black rims he had ordered did not arrive in time to be fitted. Mr Muscat contends on behalf of the applicant, and Mr Martin does not appear to dispute on behalf of the respondent, that it was agreed at that time that the respondent would supply the applicant with the black rims when they arrived in stock. It is not in dispute between the parties that this never occurred. It appears that the black rims that the applicant had paid for were more expensive than the white rims supplied by $83.60. The applicant seeks to recover this additional amount from the respondent by way of compensation in these proceedings.

23. The applicant contends that on or about 13 October 2015, when Mr Muscat was using the trailer for the first time, the electric brake unit failed and the trailer wheel bearings seized. It also contends that when it presented the trailer to a Sydney-based repairer, L. A. Truck Works Pty Ltd, to have this problem rectified a serious electric brake wiring defect was discovered which also required rectification. The only objective evidence the applicant has submitted in relation to this element of the dispute is a copy of the invoice L. A. Truck Works Pty Ltd issued to the respondent on 2 December 2015 which itemises the work carried out as follows:

Compete build trailer

Work carried out

R/R trailer wheel hub rear axle right side

Re run wiring/extend brake wiring an p-clamped to trailer body

Labour 4

Materials consumables.

24. It is appropriate to note at this point that L. A. Truck Works Pty Ltd is not a business at arm’s length from this dispute. Ms Muscat’s brother, Mr Lell Cauchi, is a mechanic who works in that business. He has been directly involved in all of the applicant’s dealings with that business concerning the trailer.

25. It appears that Mr Muscat contacted Mr Martin about the electric brake and wheel bearing failure in October 2015 requesting their repair under the respondent’s 12month manufacturer’s warranty. Although it is not entirely clear on the evidence, it appears that it was agreed between them at that time that the trailer would not be returned to the respondent for repair because of the distance between the applicant and respondent. The respondent did however agree to supply the applicant with a new set of wheel bearings and an electric brake hub to be fitted to the trailer, which it later it. It also appears that the respondent agreed to pay for a Sydney based repairer to carry out the repair.

26. As I have already noted, the work was carried out by L. A. Truck Works Pty Ltd in November 2015 at a cost of $462.00 which included the additional rewiring work which was deemed necessary in the course of the work. L. A Truck Works Pty Ltd submitted its invoice to the respondent for this work on 2 December 2015. It is not in dispute between the parties that the respondent failed to pay that invoice, which resulted in the applicant making payment in April 2016. In his evidence, Mr Martin was unable to give any coherent reason for the respondent’s failure to pay this invoice as agreed. The applicant seeks to recover this amount from the respondent as compensation in these proceedings.

27. The applicant alleges that the failure of the electric brake and wheel bearings resulted from a manufacturing defect rather than from any misuse of the trailer. It appears from Mr Martin’s response to the applicant’s complaint to NSW Fair Trading in August 2018 (as to which see following) that the respondent considered the damage to be wear and tear on the trailer and not a manufacturing defect. Mr Martin contends however that the respondent sought to assist the applicant to have the problem rectified at that time as a “good will” gesture. Mr Martin denies that the respondent ever had any knowledge of the alleged electric wiring defect at any time prior to Mr Muscat’s email to him on 18 June 2018 (as to which see following).

28. On or about 22 April 2018 Mr Muscat noticed hairline cracks in the drawbar of the trailer. Mr Muscat contends that upon becoming aware of the cracks, he arranged for the trailer to be inspected by a repairer and that he then consulted an engineer. The applicant contends that the engineer carried out some “calculations/investigations” and concluded on 30 April 2018 that the trailer was not constructed in accordance with Vehicle Standard (Australian Design Rule 62/02 – Mechanical Connections Between Vehicles) 2007. The applicant has not submitted any direct evidence of the observations made by the repairer and engineer at that time.

29. On 1 May 2018 Mr Muscat contacted Mr Martin by telephone to notify him of the engineer’s advice and to request the repair of the trailer. It appears that Mr Martin asked Mr Muscat to send him some photographs of the drawbar which he later did. After reviewing this material, Mr Martin sent the following email to Mr Muscat later that day:

Hi Daniel

Thanks for your call today. I have had a look into this today. I would like to make note that you purchase your trailer back in September 2015 and is such 18 months outside of warranty. All of our trailers come with a 12 month warranty.

Without prejudice we are offering to supply you with 1 length of 150x50x5mm RHS so you can make your required repairs. At the end of the day there is no evidence that this is a Macleay Trailer fault, and not a fault of misuse or overloading. If you would like us to supply you with the RHS we will do so out of good faith, I would just like an address that you would like it supplied to and I will arrange for it to be delivered to you direct.

30. The respondent’s offer to supply the applicant with a RHS structural steel tube did not resolve the dispute. The applicant contends that there were then repeated communications between Mr Muscat and Mr Martin through May and June in which there developed an intractable dispute about which party should be responsible for the cost of transport of the trailer from Kemps Creek to the respondent at South West Rocks for inspection and potential repair. It appears that in an effort to break this deadlock Mr Martin said he would arrange for an engineer to inspect the trailer in Kemps Creek. However this never eventuated. The applicant contends that towards the end of this period Mr Martin failed to respond to attempts at communication.

30. There is very little objective evidence before the Tribunal in relation to the parties’ communications during this period. The exception is an email exchange that dates to 12 June 2018, which is set out following:

(from Mr Muscat to Mr Martin)

Attention Brad

As per our phone discussions and email communications we have advised that there have been issues with the trailer in which we purchased from you in September 2015.

We have given you much opportunity and have attempted to come to reason in order for the non-compliant repairs to be rectified but very little effort has been made by yourself to resolve this matter in a fair way. As we have exhausted all avenues and can no longer prolong as we need this trailer in full working order we have engaged a qualified contractor to complete the works and will now have no choice but to continue with the legal avenue to recoperate (sic) our costs and compensation.

Issues that will now be addressed via the legal avenue are as follows:

We ordered and paid for black rims but we were given white rims as you indicated that the black rims were not delivered in time and promised to send the black rims down with your father when they arrived in which these black rims were never delivered.

There were issues being that a component of the electric brakes failed which caused the brakes to stay on which resulted in excessive heat which then made the wheel bearings collapse. This occurred the first time we used the trailer since we drove down for collection. This issue did occur during the warranty period in which you did not pay for the repairs as agreed upon. We are aware that you did post new bearings and an electric brake hub to us in order to complete the repairs. Due to the distance that you would have had to freight the trailer to your factory in order to make the repairs you had instructed us via mutual agreement for us to engage a qualified contractor to install these parts and make the repairs and you would pay the invoice for the works to be completed in which you never did. We contacted you many times for you to make this payment to only be told every delay story/lie which went on for months on end … resulting in us being out of pocket and having to pay for the repair bill.

Whilst the brake repair issues were being rectified our contractor discovered that there was also electric brake wiring running through leaf spring packs which were installed incorrectly which if left undetected would of resulted in further faults and issues, our contractor rectified this as instructed by yourself in which you were to pay for the repairs and never did.

The white rims that you did supply us with have no load rating stamp therefore the rims supplied could not take the bobcat load which you were advised of that this is what this trailer was built to carry. The rims in which you supplied buckled which has resulted in me having to purchase new load rated rims.

The trailer drawbar has not been constructed in accordance to the ADR 62/02 regulations and therefore is not road worthy. The drawbar of the trailer has failed which has resulted in the rebuild and engineering of a new draw bar.

As a result of a faulty trailer we have been hiring a trailer to continue with works as required which compensation will now be seeked.

The trailer that you custom built does not meet our requested requirements or the Australian Consumer laws and therefore your warranty period being 12 months does not withstand. You were more than aware of what this trailer was being built for as the bobcat specs were emailed to you prior to taking on the built and there were many in depth discussions to follow, so basically if the trailer could not be built to take the weight of the bobcat on a 3.5 tonne ball than you should have advised prior to us accepting the quote and taking our money! Meanwhile we have been driving around with a non-compliant trailer in which we have been risking the lives of ourselves and others and have recently been advised that if in the instance we were involved in an accident that our insurance would not cover us as this trailer is non-compliant.

We would have preferred to sort these matters out without having to go down the legal pathway but as you will not return any of my calls I feel I now have no choice.

(Mr Martin to Mr Muscat)

Hi Daniel

Thank you for your email today.

You contacted me on 1/05/2018 to state to me that you have cracks in your drawbar. I returned an email back to you on the same day. I stated to you that you purchased the trailer in September 2015 and we do offer a 12 month warranty and this trailer is now outside the warranty period.

In reference to the white rims to black rims. Please supply to me your BSB and account number and I will supply you with the difference in the rims that I was unable to source at this time.

I never heard from you regarding any wiring going through leaf spring packs. There was never any photos or correspondence in regards to this.

You state in today’s email that the rims are not stamped load rated. I use these Rims on the majority of trailers 1000s. And this is the first I have heard of it. And these Rims are load rated. Again, you didn’t come back to me with this.

All my trailers are built to the Australian standards 1 Bulletin. My trailers all go through an RMS approved inspection point. Can you please forward me the information for the ADR62/02 regulations you are referring to. I have asked you and your brother in-law for some good quality photos. I have got some photos but your brother in-law as not got back to me.

It is hard to know this far down the track if the load was loaded wrong to place too much stress on the draw bar and what does the bobcat weigh or if it was overloaded.

As good faith we sent you an email on 01/05/2018 offering without prejudice to send you a length of steel to make your required repairs but did not hear back from you until today.

I would require the trailer to come back to me for inspection to make any further comments, however you never came back to me with these issues. It would be like someone coming back to you with leak in their roof 3 years later, you would want to inspect it prior to making any comments. i.e. maybe modifications were made after build??

At the end of the day I am unsure where to go from here.

32. On 18 June 2018 the applicant arranged for the trailer to be inspected by Peter Gillard, who is a consulting engineer and RMS Licensed Vehicle Certifier, working with ADR Compliance Services which is a division of Chamonix (Aust) Pty Ltd. Mr Gillard produced a report based upon that inspection on 20 June 2018. The salient contents of that report are set out following:

Dear Daniel

Thank you for asking me to inspect the above trailer. You asked me to provide advice as to the cause of the cracking in the drawbar in the vicinity of the front of the trailer body.

The trailer is a 09/2015 Macleay Trailers Vehicle Carrier, it has an ATM marked as 3500kg. The axle capacity (GMT) is marked as 3200kgs. The trailer utilises a pair of 50mm square axles and a load sharing leaf string suspension. Assuming parallel wheel bearings have been used these axles are likely to be 1600kg capacity (each). The trailer is of a tilting design where by a hydraulic cylinder tilts the trailer body relative to the A frame. A pivot located ahead of the suspension allows this but the trailer rotates about the rear axle. That is, the front axle lifts off the ground as the body tilts.

Inspection

I inspected the trailer and its original drawbar at LA Trucks in Kemps Creek on Monday 18 June.

I noted cracking in both arms of the drawbar. The drawbar was manufactured from 100x50x4mm RHS that I expect will be 350Mpa yield strength, it may however be only 250Mpa.

Cracking was observed on the lower face and lower inner and outer faces of the drawbar to the rear of the tilt cylinder mounting cross member gusset plate and to the upper face and upper outer and inner faces of the drawbar at the front of the mounting plate for the shot bolt latches.

The cracking in the upper face is at the weld that secured the base plate for the trailer tilt latch. Ideally this would not have been welded across the drawbar. A traverse weld in this high stress location is a stress raiser.

The longitudinal distance between the coupling centre and the trailer body was measured at 1650mm the distance from this point to the end of the drawbar was measured at 1570mm

Compliance

The construction of small trailers (less than 4.5t ATM) in Australia is governed by the Motor Vehicle Standards Act which requires compliance with the Australian Design Rules. Light trailer requirements are summarised in Vehicle Standards Bulletin 1, (VSB1).

VSB1 Clause 16.1 deals with drawbars and associated components (it references ADR 62/01 Clause 14, now superseded by ADR 62/02) as a source of more information).

VSB1, ADR 62/01 and ADR 62/02 all require that drawbars be sufficiently strong to sustain the following loads without permanent deformation or failure. See the following extract from VSB1:

Drawbars must withstand the following forces applied at the centre of the intended coupling without detachment or any distortion or failure, which will affect the safe drawing of the towed trailer:

Longitudinal tension and compression (N) 1.5 x 9.81 x ATM (kg)

Traverse thrust (N) o.5 x 9.81 x ATM (kg)

Vertical tension and compression for rigid drawbar trailer (N) 0.5 x 9.81 x ATM (kg)

“A frame: type drawbars, by their design, generally meet the longitudinal and transverse loading requirements relatively easily. However, the vertical loading requirement is often more problematic

The trailer has an ATM of 3500kg. It must therefore sustain a load of 1750kg applied at the coupling centre vertically up and (separately) vertically down.

A load of this size will generate a bending moment of 28,320Nm 1650mm behind the coupling. This area has been reinforced somewhat by the gusseting of the tilt cylinder cross member and the base plates for the shot bolt type latches.

1450mm behind the coupling there is no reinforcement, this is the end of the shot bolt mounting plate, the bending movement at this point is 24,890Nm. A bending moment of this size, supported by a pair of 100x50x4mm RHS members, will cause a bending stress of approximately 431Mpa.

The yield stress of good quality Australian made RHS is typically 350Mpa. Therefore under the design load requirements set out in VSB1 and ADR62/-- the drawbar is overloaded. It will yield and bend or crack under this load. The transverse weld at the front of the shot bolt mounting plate is a stress raiser that will have reduced the effective yield strength of the RHS at this point significantly.

In my opinion the drawbar is under designed and is not compliant with VSB1 or the relevant ADR (62/02). It is not therefore surprising that the cracking has occurred.

Recommendations

The drawbar is non-compliant. A failure of such a component could have very severe consequences.

…

You have arranged to have the drawbar reconstructed from 150x50x4mm RHS with a minimum yield strength of 350Mpa. There are a number of detail design changes that have also been incorporated, avoiding transverse welds of beams in bending, improving cross member design etc. In combination this has made the trailer compliant with the standards and safe for use.

I will issue a Compliance Certificate for the trailer in due course.

…

33. On 14 July 2018 Mr Gillard, acting for ADR Compliance Services issued a Compliance Certificate under the Vehicle Safety Compliance Certification Scheme in respect of the trailer. In section 3 of that Certificate, which requires the description of vehicle or modifications to the vehicle in accordance with the Heavy Vehicle Codes for Modifications or the Light Vehicle Codes for Modifications, Mr Gillard states as follows:

This trailer was constructed with an A frame style drawbar manufactured from 100x50x4mm RHS. This has proved to be inadequate.

The drawbar has been remanufactured from 150 x 50 x 4mm RHS. This is satisfactory for the loads that are specified in ADR 62/02 and VSB1 for a trailer with an ATM of 3500kg

Affected ADR’s 62/02

34. On 14 July 2018 Chamonix Australia issued the applicant with an invoice for the work Mr Gillard had carried out in relation to the trailer in the amount of $1192.95. The applicant asks the Tribunal to order that the respondent compensate it for this cost. The work carried out is itemised as follows:

4.5 [hrs] Inspection and analysis of Macleay Trailers VCT TA89UI with draw bar cracking. Determine drawbar is noncompliant with VSB1 and ADR 62 and provide short form written advice to this effect. Provide advice on repair strategies and provide specifications for new drawbar. Inspect completed vehicle, coordinate inspection by RMS VINS unit and arrange permission to relocate trailer plate. Issue VSCCS Certificate for modified trailer: rate $225.00 [hr]: Amount $1,012.50.

1 RMS Certificate Submission Fee: rate $34.00: Amount $34.00

1 RMS Insurance Surcharge: rate: $38.00: Amount: $38.00.

35. In order to provide his opinion Mr Gillard required the applicant to obtain a Weighbridge report in relation to the trailer. This was obtained on 9 July 2018 at a cost of $40.00. A receipt for this payment is in evidence. The applicant asks the Tribunal to order that the respondent compensate for the cost of this report. The report states that the Axle weight of the trailer is 1.24tonnes.

36. On behalf of the respondent, Mr Martin denies that the cracks in the trailer’s draw bar result from any manufacturing defect. He contends that they result from the applicant’s misuse of the trailer, specifically its’ over loading, and maldistribution of cargo over the axles. In support of these contentions the respondent has submitted into evidence a document which contains specifications for the applicant’s Bobcat tractor, including its operational weight, which is stated to be 2592.7kgs. Mr Martin contended that this weight, combined with the weight of the trailer which is 1240kgs (as evident from the weighbridge report), exceeds the trailer’s towing capacity of 3500kgs by 330kgs. He contends that this overloading is likely to have caused the draw bar to crack. Mr Martin also relies upon photographs of the Bobcat loaded onto the trailer which he says he received from the applicant in October 2015 shortly after the applicant took delivery of the trailer. These photographs depict the Bobcat loaded on the rear of the trailer which Mr Martin contends results in a maldistribution of weight and in excessive pressure on the trailers front axle and its draw bar.

37. The respondent denies that there is any design fault with the trailer contrary to what Mr Gillard concluded based upon his inspection. In its submissions and in Mr Martin’s oral evidence it was contended that the trailer would not have passed its first RMS inspection and been registered if that was the case. The respondent has also submitted into evidence three test certificates issued by AustubeMills in relation to RHS structural steel tubes produced by that company on 17 December 2017 and 21 August 2018. One of these certificates is in relation to a 100 x 50 x 4.0 Blue RHS 8.0m structural steel tube while the other two are in relation to 150 x 50 x 4.0 Blue RHS 8.0m structural steel tubes. The tensile tests for each of these tubes state that the yield strength (MPa) for these tubes is 350MPa. Mr Martin contends that he used an equivalent product in 2015 to construct the trailer’s drawbar. He relies on these reports to refute Mr Gillard’s suggestion that the yield strength of the RHS tube used to construct the drawbar only had a 250Mpa yield strength.

38. The applicant has submitted into evidence a copy of a Tax Invoice issued by L. A. Truck Works Pty Ltd in relation to repairs carried out to the trailer. The invoice is dated 24 June 2018 and it is in the amount of $3,850.00. The applicant asks the Tribunal to order that the respondent compensate it for the cost of these repairs. The invoice is itemised as follows:

Work carried out to tilt trailer

Remove old drawbar (cracked), build new draw bar as per engineer request, painted, fitted new draw bar and wired up.

Total Labour/material

39. Attached to this invoice is a copy of a supply chain invoice and receipt which sets out lengths of RHS purchased by L. A. Truck Works Pty Ltd on 30 May 2018 from an entity trading as Direct Steel Traders. This includes an 8 metre length of RHS (150 x 50 x 4.0cm) sold at a cost of $193.60 (including GST) which the applicant contends was used to replace the trailer draw bar. The applicant contends that it incurred this cost additionally to the material cost included in L. A. Truck Works Pty Ltd’s invoice for the repairs. It asks the Tribunal to order the respondent to pay it this amount by way of compensation.

40. In the respondent’s submissions and in Mr Martin’s oral evidence L. A. Truck Works Pty Ltd’s invoice was impugned on two related bases. Firstly, on the basis that the cost quoted was excessive. Mr Martin submitted that the commercial labour cost for steel fabrication ranged from approximately $70.00 to $110.00 per hour and that the material costs involved in the work could not have reasonably exceeded $450.00. His estimate of the time it would take to effect the repairs was not more than 6 hours. Mr Martin contended that if it is assumed that the material cost was $450.00 and that the work took 6 hours to complete, it means that the hourly rate for labour charged by L. A Truck Works Pty Ltd was approximately $567.00. Secondly, the invoice was impugned on the basis that it was not independent of the dispute, but was produced by Mr Lell Cauchi, Ms Muscat’s brother. In effect, Mr Martin contended that the invoice was a self-serving concoction by the applicant, perpetrated with the assistance of Mr Lell Cauchi, which was designed to inflict serious financial loss on the respondent. The respondent is also critical of the additional cost of $193.60 for the RHS structural steel tube claimed by the applicant on the basis that L. A. Truck Works Pty Ltd’s invoice states that material costs are included.

41. In an effort to overcome the respondent’s attack on L. A Truck Works Pty Ltd invoice, the applicant has submitted an additional quotation for the repair of the trailer provided Specialised Vehicles Pty Ltd, which is dated 6 June 2018. It itemises the following work at a cost of $3,825.00:

Thank you for the opportunity in providing a quote to make repairs to your tilt trailer registration TA89UI as per the engineers instructions.

Works in brief:

Client to provide 1 x 8 length of RHS 150 x 50 x 4 painted

Removal of non-compliant cracked draw bar

Fabricate a new draw bar as per engineer’s requirements and fit to trailer

Rewire and paint new drawbar to match existing as best as possible

Consult with engineer for inspections

Labour and materials: $3,825.00 inc GST

NOTES TO CONSIDER

Daniel is to arrange freight of the trailer to our workshop at his own expense. We require approx. 2 weeks to complete the works.

42. The respondent has submitted its own cost estimate of the work required by Mr Gillard’s report, which is dated 24 August 2018. That estimate is itemised as follows:

To Upgrade Drawbar from 100 x 50 x 4mm RHS to 150 x 50 x 4mm RHS

To supply and fabricate upgrade to Drawbar as follows

Remove existing Drawbar and pull back wiring from Drawbar

Supply 2 x 3000mm of 150 x 50 x 4mm RHS       $176.00

Supply 1 x 970mm 100 x 50 x 4mm RHS         $25.00

Supply 1 x Hydraulic Ram mount            $7.00

Supply 2 x High Tensile M20 x 65mm with lock nuts    $11.00

Supply 1 x coupling plate               $10.30

Supply 2 x 600mm long safety chains         $15.70

Refit and rewire labour                $540.00

Consumables  $40.00

Paint  $88.00

TOTAL:                  $913 PLUS GST

43. The applicant contends that during the period the trailer could not be used it was obliged to obtain and use an equivalent trailer. It seeks to recover its costs of doing so from the respondent by way of compensation. In support of this element of the claim the applicant has submitted into evidence a hire quotation provided to the applicant by an entity trading as Kennards Hire which quotes the hire cost of a Beavertail trailer at $910.00 for 5 days hire (or $182.00 per day). The applicant contends that it required the use of an alternative trailer 16 days during the period the trailer was inoperative. The applicant asks the Tribunal to order the respondent to pay compensate it in the amount of $2,912.00 for the loss of use of the trailer based on the Kennards Hire daily rate. However, it emerged in Mr and Ms Muscat’s oral evidence that no such cost, or any other cost, in relation to the hire of an alternative trailer was ever in fact incurred by the applicant. The applicant was able to borrow and use a trailer at no cost.

43. It appears that following completion of the repairs to the trailer by L. A truck Works Pty Ltd Ms Muscat sent an email to Mr Martin on or about 25 July 2018 to request compensation for the costs of the repair and other costs claimed to have been incurred as a result of the fault in the trailer. In response Mr Martin requested, and Mr Muscat provided, a copy of the Mr Gillard’s report. There was then the following email exchange between Mr Martin and Mr Muscat:

(Mr Martin to Mr Muscat)

Hi Daniel,

Thank you for your email today. I have spoken at length with Peter Gillard today and we are now on the same page.

So we can both move forward, and resolve this matter for you. I am happy to collect the trailer and replace the draw bar for you with 150x50x5mm RHS.

Can you please provide me some dates that would be suitable to collect the trailer. I will need the trailer for about a week. Under consumer law we are required to arrange transport of item one way so we will contact you when complete and you can come and pick up the trailer.

(Mr Muscat to Mr Martin)

Morning,

The trailer has already been repaired. I am sure Peter Gillard would have already outlined this to you.

We gave you much opportunity to make the repairs but instead received an email that the trailer was out of warranty and you only offered to purchase a piece of steel.

As per previous discussions we were happy to send the trailer to you but you refused to pay the freight but instead offered for your engineer to come and inspect the trailer at our yard … we waited weeks, tried to call but was left with no response and no engineer came to inspect

As stated in the email end on 12.6.18 we could no longer wait for the repairs and it was made very clear to us that you did not want to take any responsibility so we went ahead and organised the works ourselves. At least now we are confident that the trailer has been constructed correctly and that it complies

As previously mentioned we can now progress in resolving this matter

I kindly ask that any future communications is made via email

(Mr Martin to Mr Muscat)

Hi Daniel

What is it you want me to do then?

(Mr Muscat to Mr Martin)

Hi

I would like to be reimbursed for all my expenses associate with all repairs of the trailer including the repairs that occurred during the warranty period which you were supposed to pay but did not pay for.

45. Prior to instituting proceedings in the Tribunal the applicant made a complaint to NSW Trading. The subject matter of that complaint was the same as the subject matter of the application before the Tribunal. In his response to that complaint, Mr Martin states (by email to the investigating officer dated 14 August 2018):

…

Daniel ordered this trailer on the 17/07/2015 and took delivery of the trailer on the 24/09/2015. Daniel contacted us on the 12/06/2018 regarding the cracks in his draw bar. We emailed him back the same day and said that we would need to see the trailer and it was well out of our 12 month warranty terms. Please see a copy of the attached Warranty Policy and the trailer has never been brought back to our factory for inspection even when requested. As the manufacturer we should have the first option to view and make required repairs. We had not authorised for anyone else to repair the trailer.

…

1. Yes Daniel did order black rims for his trailer, however I had trouble getting them in stock. Happy to pay the difference between black and white. This is $16.72 per Rim totalling $83.60 (he was never charged for this). Happy out of good will to pay this if he provides his account details.

2. I supplied Daniel with a new set of wheel bearings, but I wasn’t paying to fix them as this is wear and tear and again trailer did not get returned to us under warranty.

3. All trailers undergo a RMS inspection and was roadworthy at the time of delivery. I have no idea what these figures are for so would require more information [this refers to the applicant’s compensation claims].

Jurisdiction

46. I am satisfied that the Tribunal has jurisdiction to deal with this application as against the first respondent 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 trailer) 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.

Applicable law

47. The Australian Consumer Law (NSW) (ACL) is part of the law of NSW, and may be applied in the determination of a consumer claim under Part 6A of the FT Act: section 28 of the FT Act. It contains in Chapter 3 a number of guarantees that are implied into consumer transactions. These include in relation to the supply of goods a guarantee as to acceptable quality and a guarantee as to fitness for any disclosed purpose.

48. The guarantee of acceptable quality in the supply of goods is found in section 54 of the ACL. 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 are of acceptable quality if they are as fit for all the purposes for which goods of that kind are commonly supplied, they are acceptable in appearance and finish, and are free from defects, safe and durable: subsection 54(2)(a) to (e). 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 of the goods) would regard as acceptable 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 circumstances relating to the supply of the goods: subsection 54(3).

49. However, if goods supplied to a consumer are not of acceptable quality and the only reason or reasons why they are not of acceptable quality were specifically drawn to the consumer’s attention before the consumer agreed to the supply of the goods, the goods are taken to be of acceptable quality: subsection 54(4). Goods do not fail to be of acceptable quality if the consumer to whom they are supplied causes them to become of unacceptable quality or fails to take reasonable steps to prevent them from becoming of unacceptable quality, and they are damaged by abnormal use: subsection 54(6). Additionally, goods do not fail to be of acceptable quality if the consumer acquiring the goods examines them before the consumer agrees to the supply of the goods, and the examination ought reasonably to have revealed that the goods were not of acceptable quality: subsection 54(7).

50. The guarantee as to fitness for any disclosed purpose is found in section 55 of the ACL. If a person supplies goods to a consumer in the course of trade and commerce (and not by auction) there is a guarantee that the goods are reasonably fit for any disclosed purpose, and for any purpose for which the supplier represents that they are reasonably fit: subsection 55(1). A “disclosed purpose” is a particular purpose (whether or not that purpose is a purpose for which the goods are commonly supplied) for which the goods are being acquired by the consumer and that the consumer makes known, expressly or by implication to, relevantly, the supplier: subsection 55(2). Section 55 does not apply if the circumstances show that the consumer did not rely on, or that it was unreasonable for the consumer to rely on, the skill or judgement of the supplier: subsection 55(3).

51. Section 259 of the ACL sets 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. Relevantly to the circumstances of this case, if the failure to comply with the guarantee can be remedied and is not a major failure, the consumer may require the supplier to remedy the failure within a reasonable time: subsection 259(2) (a). If the supplier refuses or fails to do so, the consumer may have the failure remedied elsewhere and by action against the supplier recover all reasonable costs incurred by the consumer in doing so: subsection 259(2)(b). A consumer may also take action against a supplier to recover damages for any loss or damage suffered by the consumer because of the failure to comply with the guarantee if it was reasonably foreseeable that the consumer would suffer such loss or damage as a result of such a failure: subsection 259(4).

52. Section 261 of the ACL sets out how suppliers of goods may remedy a failure to comply with a guarantee. If a consumer requires a supplier of goods to remedy a failure to comply with a guarantee the supplier may, relevantly, repair the goods, or replace the goods with goods of an identical type, or refund the purchase price for the goods.

53. The test for ‘reasonable foreseeability’ of damage and loss under the ACL is essentially the same as it is in contract. In this respect, it must have been in the contemplation of the parties at the time the contract was made, or it must be a natural consequence of the breach: Hadley v Baxendale (1854) 9 Exch 341.

54. The purpose of an award of damages in contract and under the ACL is compensatory. It is designed to put the injured party in the position in which he or she would have been in had the breach or contravention not occurred, so far as money is capable of doing so: Marcourt v Clark [2012] NSWCA 367 [at 98-99].

55. The applicant bears the onus of proving its case on 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].

56. Section 79U of the FT Act requires the Tribunal, when making orders under Part 6A of that Act, to be satisfied that the orders will be fair and equitable to all the parties to the claim: subsection 79U(1). However this provides no warrant for Tribunal to act otherwise than in accordance with law: Lam v Steve Jarvin Motors Pty Ltd [2016] NSWCATAP 186 at [134].

Consideration

57. Having regard to the applicant’s causes of action, the material facts and 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 are as follows:

1. Did the respondent fail to comply with the guarantee as to acceptable quality when it supplied the trailer to the applicant?

2. Did the respondent fail to comply with the guarantee as to fitness for a disclosed purpose when it supplied the trailer to the applicant?

3. If the answer to (a) and/or (b) is yes, what remedy is the applicant entitled to?

4. What other orders, if any, are necessary to do justice between the parties?

Guarantee as to acceptable quality

58. I am comfortably satisfied on the evidence before me that the respondent failed to comply with the guarantee as to acceptable quality in two respects when it supplied the trailer to the applicant.

59. First, it is clear on the evidence that the applicant contracted with the respondent to supply a trailer that would be capable of safely transporting its Bobcat tractor. While that was not the only purpose for which the applicant required the trailer it was nevertheless a core purpose that the applicant made known to the respondent. I am satisfied that Mr Martin represented to Mr Muscat in the circumstances in which the contract was made that the respondent was capable of designing and constructing a trailer with this capability and that Mr Muscat relied upon these representations when he entered into a contract with the respondent on behalf of the applicant for the supply of the trailer.

60. It is clear that the trailer the respondent supplied to the applicant is not capable of safely bearing the weight of the Bobcat during transport. In this respect it is not in issue that the trailer has a Gross Vehicle Mass (GVM) of 3500kgs. Mr Martin’s own evidence is that weight of the Bobcat exceeds the weight bearing capacity of the trailer by 330kgs because the empty trailer weight (TARE weight) is 1240kgs and the weight of the Bobcat tractor is 2,592kgs which produces a GVM of 3,832kgs. Using the trailer to transport the Bobcat thus results in overloading and risks structural failure. In this respect the trailer is not durable or safe in addition to it not being fit for the purpose for which it was supplied. I am satisfied that a reasonable consumer, acquainted with these facts, would not have acquired the trailer.

61. It is true that the quotation the respondent provided the applicant on 16 July 2015 specified the supply of a “dual axle trailer with 3500kgs GVM capacity”, and that the applicant was therefore on notice that this was the most the trailer could weigh when fully loaded. However, the quotation also stated that the TARE weight of the trailer would be 759kgs, and not 1240kgs which was the empty weight of the trailer supplied. If the TARE weight of the trailer had actually been 759kgs the Bobcat load of 2592.7kgs would have resulted in a GVM of 3351.7kgs, which would have been within the trailer’s load bearing range. In any event, it is clear that the applicant relied upon the respondent’s expertise to design and construct a trailer that would be capable of transporting the Bobcat. In these circumstances the applicant bore no onus of going behind the representations made to it by Mr Martin on behalf of the respondent to verify the actual weight bearing capacity of the trailer.

62. It is also true that the “operating data and dimensions” for the Bobcat tractor that Mr Muscat sent to Mr Martin on 17 September 2015 did not contain any weight information about the Bobcat. However, in circumstances where the respondent knew it was contracted by the applicant to construct a trailer capable of carrying the Bobcat, and in which the applicant relied upon the respondent’s expertise in this respect, the respondent bore the onus of establishing the weight of the Bobcat either by making specific inquiries of the applicant to this effect, or by conducting its own research. In this respect, in Mr Muscat’s covering email to the information he provided Mr Martin about the Bobcat’s operating data and dimensions on 17 September 2015, he specifically invites Mr Martin to let him know if he required any further information. I also note in this respect that the respondent has experienced no difficulty in obtaining weight information for the Bobcat for the purpose of its producing its evidence in these proceedings.

63. Against this background, the respondent cannot reasonably be heard to complain that the defects in the trailer result from the applicant overloading the trailer with the weight of the Bobcat. The applicant was entitled to expect that the trailer was capable of carrying this weight.

64. The second respect in which I am satisfied that the trailer was not of acceptable quality is in relation to the design and construction of the drawbar. Mr Gillard’s evidence, which I accept, establishes that the drawbar did not comply with Australian Design Rule 62/02 and that it was not capable of sustaining a load of 1550ks applied at the coupling centre vertically up and vertically down as would be necessary given the Aggregate Trailer Mass (ATM) was 3,500kgs. Mr Gillard gives two reasons for this: a failure to provide any reinforcement 1450mm behind the coupling and at the rear of the tilt cylinder, and a transverse weld at the front of the shot bolt mounting plate. He concludes that the design of the drawbar in these respects creates a bending stress of 431Mpa, and that as the RHS 100 x 50 x 4.0cm steel fabrication tube used to create the drawbar has a yield stress of 350Mpa, this was likely to result in the drawbar cracking, which it did.

65. In these respects I am satisfied that the trailer was not of acceptable quality on the basis that its drawbar was not designed and constructed so as to be capable of pulling a load of 3,500kgs as the respondent represented it to be, and that it was not durable or safe under these load conditions. A reasonable consumer, acquainted with these facts, would not have acquired the trailer.

66. In the respondent’s submissions and in Mr Martin’s oral evidence there was criticism of Mr Gillard for suggesting earlier in his report that the RHS 100 x 50 x 4.0cm steel fabrication tube the respondent used to construct the drawbar may only have had yield stress of 250Mpa. However, this objection is of little consequence as Mr Gillard’s ultimate conclusion is reached based on the assumption that the RHS tube actually used had a yield stress of 350Mpa.

67. In the respondent’s submissions and in Mr Martin’s oral evidence it was also contended that the applicant caused the trailer to be of unacceptable quality by misusing it. In this respect, the respondent relies upon 2 photographs of the Bobcat tractor loaded onto the trailer which Mr Martin says Mr Muscat sent to him in October 2015 shortly after taking delivery of the trailer. Mr Martin contends that these photographs depict a maldistribution of the Bobcat load over the rear axle. He speculates that this created unacceptable pressure on the front axle and drawbar and caused the drawbar to crack.

68. I am not persuaded by this argument. Mr Gillard’s evidence establishes that the cracking of the drawbar is a likely consequence of the design and construction of the drawbar which would have occurred under conditions of expected use of the trailer. Moreover, if the loading of the Bobcat as depicted in the photographs relied upon by the respondent does reflect a maldistribution of the weight of the Bobcat (which is essentially speculation on Mr Martin’s part) it is passing strange that Mr Martin did not draw this fact to Mr Muscat’s attention in October 2015 when he received the photographs from him. I also note in this respect that it does not appear that the respondent issued the applicant with any instructions as to the loading and distribution of weight over the trailer which would entitle it to now be reasonably heard to complain that the applicant failed to use the trailer in accordance with those instructions.

69. The applicant also contends that there were manufacturing defects in the electric brakes, electrical brake wiring, and wheel bearings of the trailer in October 2015 which had to be rectified. It seeks an order that would require the respondent to compensate it for the cost of these repairs.

70. The only objective evidence the applicant has submitted in support of this element of the claim is the invoice for the repair supplied by L. A. Truck Works Pty Ltd dated 2 December 2015. That invoice provides no insight into the cause of the defect or damage to the brakes and wheel bearings. In support of this element of the claim, the applicant seeks to rely upon the agreement it had with the respondent at the time for the respondent to pay for the costs of these repairs, which it claims was reneged upon. I don’t entertain any doubt that such an agreement existed, and that the respondent reneged upon that agreement. However, that agreement is not evidence that the problems with the brakes and wheel bearings were a manufacturing defect. The respondent contends that problems with the brakes and wheel bearings were due to wear and tear and that the offers it made to settle the dispute were goodwill gestures only.

58. It is to a degree inherently unlikely that the problems with the brakes and wheel bearings resulted from wear and tear after (apparently) such limited use of the trailer. Nevertheless, the applicant bears the onus of proving to the civil standard that these were manufacturing defects rather than problems arising from the misuse of the trailer. The bare evidence the applicant has submitted is incapable of doing so. This element of the claim must therefore be dismissed.

Guarantee as to fitness for a disclosed purpose?

72. I am also comfortably satisfied for the reasons I have outlined above that the respondent failed to comply with the guarantee as to fitness for a disclosed purpose when it supplied the trailer to the applicant. The purpose the applicant disclosed to the respondent was that the trailer needed to be capable of carrying its Bobcat tractor. The applicant relied upon the respondent’s expertise to construct a trailer with this capacity. The respondent failed to do so for the reasons set out above.

Remedy

73. Having reached these conclusions, the applicant was entitled to require the respondent to remedy these failures. Although it is clear that the applicant would have had a strongly arguable case that the respondent’s failure to comply with the guarantees was a major failure entitling it to reject the trailer and obtain a refund of its purchase price it never adopted this course. Instead, it sought to require the respondent to repair the trailer. Objectively viewed, this was a perverse course for the applicant to take because, even if it was repaired, the trailer would still be incapable of carrying the weight of the Bobcat tractor, which was a core purpose for which it had been supplied. Nevertheless, that is the course the applicant adopted.

74. Requiring the respondent to repair the trailer was a remedy to which the applicant was entitled. However, the election of that remedy required the applicant to return the trailer to the respondent at the applicant’s expense so that these repairs could be carried out. In this respect, the evidence establishes that the respondent engaged in a degree of prevarication about the return of the trailer for repair in citing its 12 month warranty period and implying on this basis that its manufacturer’s obligations with respect to the trailer were at an end. However, as is clear from Mr Martin’s email of 18 June 2018, the respondent never refused to receive the trailer back to inspect it for defects and any necessary repairs. On the evidence before me I am satisfied that the principal reason this did not occur was not due to the respondent’s prevarication about the warranty but because of the cost of transporting the trailer from Kemps Creek to South West Rocks. The applicant demanded that the respondent bear this cost which it refused to do.

75. The ACL imposes no obligation on a supplier of goods to pay the cost of freight or other transport associated with the return of goods for repair. The applicant’s assertion that the respondent had such an obligation is therefore misconceived.

76. A consumer is entitled to have repairs to goods carried out elsewhere if a supplier fails to effect these repairs within a reasonable time. However, the difficulty for the applicant in this case is that it failed to return the trailer to the respondent for repair. The respondent therefore had no opportunity to repair it and the applicant therefore cannot reasonably be heard to complain that the repair was not carried out within a reasonable period.

77. I note that the stalemate between the parties in relation to who would bear the cost of transporting the trailer from Kemps Creek to South West Rocks did result in the respondent making an alternative offer to arrange an inspection of the trailer at Kemps Creek, which it failed to carry out. However, in context, I am not satisfied that this circumstance alters the legal relations between the parties in relation to the repair. It was simply a failed offer of compromise.

78. For completeness I also note that in reaching this conclusion I place limited weight on the email communications between Mr Muscat and Martin of 25 and 26 July 2018. In that exchange, apparently after having just spoken to Mr Gillard, Mr Martin offers to collect the trailer from Kemps Creek at the respondent’s expense and replace the drawbar. By that stage the trailer had already been repaired by L. A. Truck Works Pty Ltd, and I am satisfied that Mr Martin knew this from Ms Gillard’s report (with which he had been supplied by Mr Muscat) and from his conversation with Mr Gillard. In context, I am satisfied that this offer is therefore more likely than not a self-serving concoction made in anticipation of this litigation.

79. For the foregoing reasons the applicant is not entitled to be compensated for the costs of the repair of the trailer by L. A Truck Works Pty Ltd. This element of the claim must therefore be dismissed.

80. Notwithstanding this conclusion, I am satisfied that the applicant is entitled to be compensated by the respondent for the cost it incurred in obtaining Mr Gillard’s expert report, which is constituted by his professional fee ($1,192.95) and the cost of the weighbridge report ($40.00). The respondent’s prevarication about the warranty, and Mr Martin’s speculation that the cracks to the drawbar were the result of the applicant’s misuse of the trailer (as reflected in his email to Mr Muscat dated 12 June 2018) reasonably required the applicant to prove to the respondent that the problem with the drawbar resulted from a manufacturing defect. I am comfortably satisfied that Mr Martin would not have accepted that the respondent had a manufacturer’s responsibility to rectify that defect in the absence of Mr Gillard’s report. So much is apparent from the change in Mr Martin’s attitude to problem after he had received Mr Gillard’s report and had spoken with him (see Mr Martin’s email to Mr Muscat dated 25 July 2018). In this sense the cost the applicant incurred in obtaining Mr Gillard’s report were a reasonably foreseeable consequence of the respondent’s failure to comply with the consumer guarantees.

81. I am not satisfied the applicant has established the grounds upon which any other order for compensation arising from the respondent’s failure to comply with the consumer guarantees may be made. The claim for the cost of trailer hire cannot reasonably be seen to be a foreseeable consequence of the failure to comply with the guarantees in circumstances where the delay in the repair of the trailer substantially related to the applicant’s own conduct in refusing to pay for the return of the trailer to the respondent for repair. In any event, the applicant borrowed another trailer at no cost to it during the period the trailer was off the road. It did not actually incur any alternative trailer hire cost for which it would be entitled to be compensated. This element of the claim must therefore be dismissed.

82. The applicant seeks an order for the payment of prejudgement interest on any amount awarded to it by way of compensation. The Tribunal has no power to order the payment of pre-judgement interest. This element of the application must be dismissed.

Other orders

83. It is clear on the evidence that the original quotation the respondent provided to the applicant included a specification for black wheel rims and that this came to be incorporated as a term of the contract for the supply of the motor vehicle when it was made. It is not in issue that the wheel rims actually supplied were white and that the respondent promised to replace these with black rims when they became available but never did so. The applicant has sought an order that would require the respondent to pay it the difference between the cost of the black wheel rims they contracted for and the white wheel rims that were actually supplied. The respondent contends, and the applicant accepts, that this was $83.60.

84. In failing to supply the black wheel rims the respondent breached a term of the contract for the supply of the trailer. The applicant is entitled to take action against the respondent in relation to that breach to recover any damage and loss it suffered as a result. In this case this is the difference in price between the black wheel rims promised and the white rims supplied which was $83.60. This cause of action accrued on 30 September 2015 when the applicant took delivery of the trailer (the white wheel rims were apparent at that time). As noted above, this application was made to the Tribunal on 16 August 2018. It has thus been made within the three year limitation period imposed by subsection 79L (1)(a) of the FT Act. I will therefore order the respondent to pay the applicant this amount.

Costs

85. The applicant seeks an order from the Tribunal that the respondent pay its costs of the proceeding, which is application fee paid in the amount of $50.70 as well as postage and stationary costs which it asks the Tribunal to assess.

86. Section 60 of the Civil and Administrative Tribunal Act 2013 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.

87. The application fee, and postage and stationary costs associated with the conduct of a proceeding, are legal costs which are potentially recoverable by the applicant from the respondent: 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 it to do so in the circumstances of this case.

88. 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].

89. 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 are (a) whether a party has conducted proceedings in a way that unnecessarily disadvantaged another party to the proceedings, (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, (c) the relative strength of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law, (d) the nature and complexity of the proceedings, (e) whether the proceedings were frivolous or vexation or otherwise misconceived or lacking in substance, (f) whether a party has refused or failed to comply with the duty imposed by section 36(3) of the NCAT Act, and (g) any other matter that 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: Alexander James Pty Ltd v Pozetu Pty Ltd (No. 2) [2016] NSWCATAP 75 at [13].

90. Having regard to the relevant considerations I am not satisfied that there are special circumstances that warrant a departure from the usual costs rule in this case. The application fee is an ordinary cost of litigation paid by the vast majority of applicants who commence proceedings in the Tribunal. There is nothing out of the ordinary in the applicant incurring this cost. Nor is there anything exceptional about the postage and stationery costs the applicant incurred in the conduct of its case. Nor can it be reasonably be contended that there was anything improper about the respondent defending the application. The applicant has only been partially successful in its application. The respondent in this respect and otherwise had an arguable defence to the application. The applicant’s application for costs is therefore dismissed.

Conclusion

91. For the foregoing reasons, the applicant is entitled to an order that will require the respondent to pay it the total sum of $1,316.55 immediately. The remainder of the claim must be dismissed. The applicant’s application for costs must also be dismissed.

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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: 10 April 2019