Jeffrey Blume v Rocco Pirrotta

[2014] NSWCATCD 243

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	Jeffrey Blume v Rocco Pirrotta [2014] NSWCATCD 243
Hearing dates:	17 November 2014
Decision date:	19 December 2014
Jurisdiction:	Consumer and Commercial Division
Before:	M Eftimiou, General Member
Decision:	The orders made by the Tribunal on 13 June 2013 in matter MV13/27052 are set aside. The application is dismissed
Catchwords:	Fair Trading Act 1987: Due Care and Skill
Legislation Cited:	Fair Trading Act 1987 Bankruptcy Act 1966
Category:	Principal judgment
Parties:	Jeffrey Blume (applicant) Rocco Pirrotta (respondent)
Representation:	Both parties in person
File Number(s):	MV 13/48826
Publication restriction:	Unrestricted

reasons for decision

1. By application filed on 21 May 2013, the applicant sought an order that the respondent pay him $16,500.00; and that the respondent replace parts to his motor vehicle to the value of $3,400.00.

2. On 13 June 2013 the Tribunal heard the matter in the absence of the respondent. The Tribunal made an order in the matter MV 13/27052 that the respondent pay to the applicant $19 500.00.

3. On the 27 June 2013, the respondent sought a rehearing of the matter. On 31 July 2013, the operation of the order for payment of money made on 13 June 2013 was stayed. On 13 September 2013, the Chairperson's delegate directed that the matter number MV 13/27052 be reheard as the Chairperson's delegate was satisfied that the respondent may have suffered a substantial injustice.

4. The matter next came before the Tribunal on 10 October 2013. By consent of the parties the matter was adjourned as the parties sought an opportunity to negotiate a settlement without the assistance of the Tribunal.

5. On 7 November 2013 the matter was again adjourned by consent of the parties, to enable (a) a joint inspection of the vehicle to take place;(b) the parties to determine the severity of the damage- mechanically and body wise and (c) the parties to determine the options to repair, extent and costs both mechanically and body wise.

6. On 6 February 2014, the matter was again before the Tribunal. There was no appearance by the respondent. The respondent had sought an adjournment on the basis that he was the Carer of his wife who has a medical condition. The applicant advised the Tribunal on 6 February 2014 that the matter had not settled. The Tribunal determined that the matter should be adjourned for a formal hearing and procedural directions were made for the exchange of evidence.

7. On 3 March 2014 the respondent advised the Tribunal that he had become a Bankrupt on 21 February 2014.

8. On 21 March 2014 the Tribunal wrote to the applicant advising him that the Registrar had received information from the respondent that he had become a Bankrupt. The applicant was advised that subject to the Bankruptcy Act 1996 he may not be able to proceed with the claim in the NSW Civil and Administrative Tribunal without the leave of the Trustee in Bankruptcy. The applicant was encouraged to seek independent legal advice.

9. On 31 March 2014 the matter again came before the Tribunal and the applicant was again advised that as a result of the respondent entering bankruptcy the Tribunal may not have jurisdiction to hear and determine the matter. The matter was adjourned and the parties were given an opportunity to make written submissions on the question of the Tribunal's jurisdiction to hear and determine the matter.

10. The matter came before the Tribunal on the question of Jurisdiction on 19 May 2014. After submissions from the applicant it was determined by the Tribunal that the matter could not proceed without the leave of the Court. Section 58(3) of the Bankruptcy Act, provides that a creditor cannot take fresh steps in legal proceedings already commenced against a person who becomes bankrupt without leave of the Court. The Tribunal is not a Court and cannot grant leave of its own volition. The Tribunal found that the applicant needed to consider whether or not he seeks to obtain leave of the Court to continue with these proceedings. The Tribunal did not dismiss the proceedings, because to do so would have created a limitation problem should the applicant seek to file fresh proceedings with the Tribunal. The Tribunal further stated that if the applicant sought to obtain leave of the Court, and if that were to be granted then these proceedings may continue.

11. On 17 July 2014 the matter was adjourned at the request of the applicant as he had filed an application on 16 July 2014 with the Federal Court seeking leave to proceed in the Tribunal with the matter.

12. On 14 August 2014 the Tribunal made the following procedural directions:

1. The proceedings are removed to Sydney registry.

2. It appears the application cannot be maintained as the Respondent is bankrupt and the claim is a provable debt. In this event the application should be dismissed: see Reasons of Member Sarginson of 19 May 2014.

3. The matter is listed for hearing on 8 September 2014 at the Sydney Registry to consider whether the application should be dismissed.

4. The parties are to file with the Registry and serve upon each other any further submission on the issue of dismissal on or before 1 September 2014.

13. On 26 August 2014 the Federal Circuit Court of Australia made the following orders:

1. Under section 58(3)(b) of the Bankruptcy Act 1966(Cth), to the extent that the claim by the applicant in New South Wales Civil and Administrative Tribunal (NCAT) proceedings MV13/48826 in in respect of a provable debt, leave is granted to both the applicant and the respondent to take such steps in the NCAT proceedings will enable that proceedings to be finalised.

2. The leave granted by Order 1 of these orders is subject to the condition that no steps be taken by the applicant to enforce any decision of NCAT in the proceedings without leave of this Court.

14. On the basis of the Orders made by the Federal Circuit Court of Australia on 4 September 2014 the Tribunal determined that the matter should proceed to hearing.

15. On 3 November 2014 the Tribunal advised the Official Trustee in Bankruptcy that the matter was set down for a formal hearing on 17 November 2014.

16. On 10 November 2014 the Tribunal advised the parties that it proposed to join the Trustee, Australian Financial Security Authority to the claim, as it appeared that the claim in the present circumstances would be a provable debt in the Bankruptcy of the respondent.

17. On 12 November 2014 the Tribunal received correspondence from the Australian Financial Security Authority advising that they opposed any proposed order to join them to the proceedings. It was submitted that the proceedings are a matter between the applicant and the respondent and the Official Trustee takes no part in same.

18. After consideration of this correspondence, the Tribunal determined that the Official Trustee would not be joined as a party to the proceedings.

19. Both parties appeared before the Tribunal on 17 November 2014. Both parties advised the Tribunal that they were ready to proceed to hearing and that they had complied with procedural directions of the Tribunal.

20. A summons had been issued at the request of the applicant on 21 March 2014. The summons was addressed to the Proper Officer NSW Department of Fair Trading. The documents requested under summons had been provided however it became apparent that no orders as to access to the documents had been made by the Tribunal.

21. The matter was adjourned for a short period and the Tribunal gave access to the documents produced under summons first to the respondent. Access was then given to the applicant. Both parties advised the Tribunal that they were ready to proceed to hearing and there was no material in the summons documents that caused them any difficulty in proceedings.

22. The crux of the applicant's case can be summarized as follows:

• The applicant took his 1970 VG Valiant Motor vehicle to the respondent in November 2007 for repairs.

• The applicant paid the respondent over a period of time the sum of $16,100.00 in relation to the work.

• The applicant collected the vehicle from the respondent's premises in December 2011.

• The applicant claimed that the repairs were not carried out with due care and skill, the work is incomplete and the respondent has damaged the body of the vehicle.

• The applicant seeks a refund of the $16,100.00 he has paid to the respondent, together with $3,400.00 for the cost to replace parts that the respondent has removed and were missing from the vehicle, together with the cost of repair to the body of the vehicle.

• The applicant now seeks an order for $30,000.00.

23. The respondent's case can be summarized as follows:

• The parties were friends prior to this dispute.

• The respondent agreed to do some work together with the applicant on the vehicle. This agreement was reached sometime in 2007.

• A sum of $ 13,300.00 was paid to him for the work. There was no agreed amount as to the total cost of the work.

• The vehicle was returned to the applicant in December 2011.

• The respondent denies that any parts were missing when the vehicle was returned to the applicant.

• The respondent concedes that the work is not complete.

• The respondent denies damaging the body of the vehicle.

24. The issue for the Tribunal to determine is whether the respondent has breached the Fair Trading Act 1987 as it existed at the time of the Contract between the parties. This is mirrored in section 74 of the Trade Practices Act 1974. The contract was entered into between the parties prior to 1 January 2011 and the Australian Consumer Law only applies to contracts entered into after this time. In every contract for the supply in the course of a business of services to the consumer there is an implied warranty that the services will be rendered with due care and skill and that any material supplied in connection with those services will be reasonably fit for the purpose for which they were supplied.

25. In support of the claim the applicant seeks to rely on amongst other documents, the following:

1. A number of photographs;

2. Three receipts for the payment of $13 300.00.

3. A letter from Russel Dyball , the applicant's step father;

4. Confirmation of registration of the vehicle.

5. An unsigned report from Andrew Shipard, licensed mechanic and photos attached to his report;

6. An invoice from the respondent dated 1 June 2007;

7. An invoice from Respondent dated 10 July 2009;

8. Quotes to replace the missing parts; and

9. Quote to repair body work on the vehicle.

26. The respondent provided a number of photographs of the vehicle being collected from his workshop in December 2011.

27. The Tribunal is satisfied that it has jurisdiction to hear and determine the matter pursuant to the Consumer Claims Act. The application was filed with the Tribunal in May 2013. The Tribunal is satisfied that section 7 of the Consumer Claims Act is satisfied.

28. The Tribunal makes the following findings.

CONTRACT

29. The vehicle was taken by the applicant to the respondent in 2007. It appears from the evidence that the parties agreed to strip the engine to investigate a number of mechanical issues and to make some high performance modifications of the engine.

30. There is discrepancy between the parties as to the terms of the contract and the amount of money paid.

31. The applicant alleges that he paid to the respondent $1,200.00 In August 2008 to enable the respondent to purchase pistons. Three further amounts totalling $13,300.00 were made in May 2009. The applicant then claims he paid a further $651.60 in July 2009. The applicant states that the respondent came to his home in March 2010 and the applicant gave him $2,500.00 to help towards the payment of his mortgage.

32. The respondent conceded that an amount of $13,300.00 had been paid. The respondent had little or no recollection of other monies having been paid by the applicant.

33. On the basis of the evidence provided by the applicant, being three receipts, the Tribunal finds that an amount of $13,300 .00 had been paid by the applicant to the respondent. The applicant has the onus of establishing the claim. The applicant has not been able to satisfy the Tribunal that any further monies were paid for the purpose of the contract.

34. The Tribunal is not able to make a finding on the evidence that the parties had an agreement for $13,300.00 for the work. There was no quotation provided. The parties have a very different recollection of what actually happened in 2007 and what was agreed upon. The nature of the agreement between two friends, with the applicant often attending the respondent's workshop and assisting the respondent with the work on his vehicle, together with the applicant also purchasing some of the parts for the vehicle, leads the Tribunal to find that there was no agreement that the work would be done for $13,300.00. Rather the Tribunal finds that the parties agreed that the engine would be modified and the applicant would pay the cost of the work with no set price agreed upon. The vehicle was collected from the respondent in December 2011.

HAVE THE SERVICES BEEN RENDERED WITH DUE CARE AND SKILL

Engine

35. The applicant seeks to rely on a number of photographs together with an unsigned letter from Andrew Shipard.

36. Mr Shipard is a licensed motor mechanic. He visually inspected the vehicle in June 2014. Mr Shipard states that he has determined the following issues:

The roller rockers have been incorrectly positioned &/or they are the wrong roller rockers for this engine as they are touching and should have some clearance in between them.

There is also a rod touching the head when the engine is turned manually, this should also have some clearance.

The gearbox not only is not assembled in full and has parts missing, it also is touching the body of the car and should have some clearance.

There are several rust repairs that need to be carried out.

It is my opinion that the engine should be dismantled and then reassembled to manufacturers specification to rectify the problems I have just mention in this repair and then road tested and a warranty will be supplied.

37. The respondent does not dispute that the work is incomplete. The respondent advised the applicant that the engine was incomplete when it was collected from him in December 2011. The respondent denies that any parts are missing from the engine.

38. The Tribunal has conflicting evidence regarding the missing parts. The applicant claims that parts in excess of $4,000.00 are missing from the vehicle. The respondent claims that when the vehicle was returned to the applicant there were no missing parts to the vehicle. The vehicle was collected in December 2011 by the applicants step father. An issue in regards to the exhaust was raised at the time the vehicle was collected. The applicant did not see the vehicle until October 2012 as he was incarcerated from 2010 until 2012. The photographs that were taken by the applicant showing the missing parts to the vehicle were taken in October 2012.

39. The Tribunal cannot be satisfied on the evidence before it that the respondent is responsible for any missing parts. The length of time from when the vehicle was collected from the respondent in December 2011 and when it was inspected by the applicant in October 2012 leaves open the possibility of a number of scenarios of missing parts.

40. The vehicle when collected from the respondent was kept on the applicant's partners parents property in a carport for some time.

41. Further the report from Mr Shipard is dated June 2014, some two and a half years after the vehicle was collected from the respondent.

42. The Tribunal is not satisfied on the evidence before it that the respondent is responsible for any missing parts to the vehicle.

43. The Tribunal is not satisfied that the respondent is responsible for the incomplete work. The respondent concedes that the work is incomplete. The respondent maintains and the Tribunal accepts that there was no contract for all of the work to be completed for $13,300.00. There was no agreement as to the final cost of the work.

44. The respondent has not been able to provide any evidence of the actual work and the value of the work done on the applicant's vehicle. The respondent has provided a quotation dated 1 June 2007. This quotation was provided after these proceedings were commenced by the applicant and after the applicant for an invoice detailing particulars of the work made numerous requests done.

45. It is not disputed that when the vehicle was taken to the respondent the vehicle was registered, was complete and being regularly driven. When the vehicle was collected it was not drivable, the engine was in such a state of disassembly that it could not be started. Despite the vehicle being registered until May 2012 it could not be driven. The applicant has given evidence that until he dismantles the engine he is not able to determine what is wrong with the vehicle.

46. A quotation to carry out the work as set out in Mr Shipard's letter and to get the engine working again and the vehicle roadworthy has been provided from HEMI Performance dated 12 June 2013. The quotations stated that the cost of a fully reconditioned 3 speed Automatic Borg Warner transmission with Reconditioned Converter is $2,121.94. There is an attachment from Hume Mufflers. However this attachment has no ABN or ACN number attached and the Tribunal has placed little weight on it.

47. The Tribunal is not satisfied that the respondent has failed to exercise due care and skill when working on the engine of the vehicle. The vehicle was first given to the respondent in 2007. It was left with him until December 2011. The vehicle was not inspected by the applicant personally until October 2012 and the claim was not filed with the Tribunal until 21 May 2013. The length of time that the vehicle was left with the respondent as well as the ongoing and undefined nature of the contract between the parties leads the Tribunal to a finding that it is not satisfied that the respondent has failed to exercise due care and skill in carrying out the work.

Body of Vehicle

48. The applicant in addition to the refund of the money he has paid to the applicant and the alleged missing parts of the vehicle, seeks a sum of money for panel beating the vehicle.

49. Numerous photographs have been provided by the applicant to show the condition of the vehicle prior to it being taken to the respondent. The respondent has shown various photographs that depict the condition of the vehicle when it left his work shop. There is a discrepancy in the evidence between the parties as to the condition of the body of the vehicle both when it was dropped off in 2007 and when it was collected in 2011.

50. What cannot be disputed whoever is that the vehicle was left with the respondent for 4 years. The respondent has given evidence that he kept the vehicle inside his workshop until sometime early 2011 when he moved it outside. The applicant claims when it was collected from the respondent it was placed under cover in a carport. The respondent claims that he saw the vehicle exposed to the elements after it was collected from him. The applicant has a duty to mitigate his loss. The vehicle was left with the respondent from January 2007 until December 2011. The applicant has given evidence that he was incarcerated in the Northern Territory in April 2010. In 2011 the applicant's partner, his step father and a friend contacted the respondent regarding the progress of the vehicle. The vehicle was eventually collected from the respondent by the applicant's step father in December 2011. It is unreasonable for the applicant to expect that the vehicle would be in the same condition in December 2011 when it was collects, as in January 2007 when he dropped it off to the respondent. The Tribunal accepts that the vehicle may have been in good condition as is evident from the photographs provided by the applicant which he claims that he took in 2006. However, the Tribunal would expect that the body work of an old vehicle after more than 5 years would deteriorate. Further, the applicant was aware in August 2011 that the vehicle was no longer housed undercover by the respondent. The applicant took no steps until late December 2011 to have the vehicle removed. The Tribunal finds that the applicant failed to mitigate any of his loss.

CONCLUSION

51. The applicant has the onus of establishing the claim.

52. The applicant has failed on the evidence to satisfy the Tribunal that he had a contract with the respondent to repair and make modifications to the engine of the vehicle at a cost of $13,300.00. There is no quotation to support this claim. The parties have a very different recollection of the facts pertaining to the making of the contract. As stated earlier the Tribunal finds that the parties agreed that the respondent would work on the applicant's vehicle, the applicant would assist the respondent in carrying out the work, some parts would be supplied by the applicant, some parts would be ordered by the respondent, and the applicant would pay to the respondent money for his cost and parts. The arrangement was clearly an ongoing arrangement as is evident by the fact that the vehicle remained with the respondent from 2007 until 2011. Notwithstanding that the applicant was incarcerated from 2010 until 2012, the applicant only made some attempts through his partner and other family members to enquire as to the progress of the vehicle in 2011.

53. The Tribunal is not satisfied on the evidence before it that when the vehicle was collected from the respondent any parts of the vehicle were missing. The length of time from when the vehicle left the care of the respondent and when it was inspected by the applicant leaves open the possibility that the parts may have been removed by another person.

54. The Tribunal accepts that the work is incomplete. The respondent does not deny this fact. However as the Tribunal is not satisfied that there was an agreement that the work be completed for $13,300.00, the Tribunal is not satisfied that this is a breach of the agreement.

55. The Tribunal is not satisfied on the evidence before it that the respondent has damaged the body of the vehicle. The photographs provided by the applicant do not support a finding that the vehicle has deteriorated to the extent outlined in the submissions in the short period of time that the vehicle was kept outside by the respondent. It is not reasonable for the applicant to expect that the vehicle will remain under cover for a period of 4 years. Further the applicant has a duty to mitigate his loss by removing the vehicle from the respondent's premises if he had any concerns regarding the care of the body.

56. The stay order made on matter number MV 13/27052 on 31 July 2013 is lifted.

57. The orders made on matter number MV13/27052 on 13 June 2013 are set aside

58. The application is dismissed.

M Eftimiou

General Member

Civil and Administrative Tribunal of New South Wales

19 December 2014

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: 12 February 2015