Little v Khoury T/As Gas-250 Restorations

[2018] NSWCATCD 47

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	Little v Khoury T/As GAS-250 Restorations [2018] NSWCATCD 47
Hearing dates:	2 July 2018
Date of orders:	10 August 2018
Decision date:	10 August 2018
Jurisdiction:	Consumer and Commercial Division
Before:	B Shipp, Senior Member
Decision:	(1) The application is dismissed for want of jurisdiction.
Catchwords:	Consumer Claim – Jurisdiction – when does the cause of action arise.
Legislation Cited:	Fair Trading Act 1987 NSW Australian Consumer Law Consumer Claims Act 1998.
Cases Cited:	Sacks v Hammoud [2016] NSWCATAP 225 Do Carmo v Ford Excavations Pty Ltd (1984) CLR 234
Category:	Principal judgment
Parties:	Kamilla Little (Applicant) Andrew Khoury T/As Gas-250 Restorations (Respondent)
File Number(s):	MV 17/50067
Publication restriction:	Nil

REasons For Decision

Background and Jurisdiction

1. The Applicant is the owner of a 1967 Triumph Spitfire Mk 111 classic car (“the vehicle”). In 2011 she took the vehicle to the Respondent to complete some restoration works. There is dispute about the work agreed to be done.

2. The Applicant claims she has paid a total of $16,000 for the restoration works (approximately double the amount agreed to) and a further $9,388 on parts and accessories which remain in the Respondent’s possession. The Applicant claims that, despite the elapse of time, the agreed work has not been completed and its value has been significantly reduced. She alleges that the Respondent has breached several consumer guarantees including a failure to complete the work with due diligence and a failure to complete the work with due care and skill. She also alleges unfair contract terms, misleading and deceptive conduct and false and misleading representations.

3. In November 2017, the Applicant applied for orders that the Respondent do work or provide services to the value of $40,000 including bodywork, paintwork, reassembly, rewiring, trimming and safety requirements due to delay.

4. The matter first came before the Tribunal on 19 December 2017 when it was adjourned for hearing with directions that the parties submit and exchange any documents upon which they sought to rely within a certain timeframe.

5. The matter was listed for hearing on 23 April 2018. The matter was further adjourned on that day as the Member formed the view that the Applicant was seeking potentially different orders to those originally sought. The Member noted that the vehicle was still in the possession of the Respondent, and the Applicant had not been given the opportunity to inspect the vehicle and obtain expert evidence about the value of the work undertaken by the Respondent or the estimate cost to complete the work. The Tribunal made directions for the Respondent to deliver the vehicle and all its parts and accessories to Cumminscars within 2 weeks. The Applicant was given leave to amend the claim and was requested to identify whether she was seeking:

1. A refund in respect of the total amount she has paid less the value of the actual works undertaken by the Respondent or his subcontractors

2. A refund in respect of parts and accessories in the Respondent’s possession not delivered to Cumminscars, or

3. The estimated cost to complete all works for which the Applicant had paid.

6. The parties were directed to submit any further documents in support or response to the claim within a further time frame. Further documents were submitted with an extended timeframe requested by both parties and approved by the Tribunal.

7. The amended order sought by the Applicant is for a money order totalling $29,488 and comprising:

1. $10,000 for work not completed

2. $3,369 for [parts and accessories purchased by the Applicant but not delivered by the Respondent]

3. $420 for replacement tyres, as those purchased in 2010 are beyond their warranty period

4. $1,700 for the cost of repairs for damages to the vehicle while it was in the custody of the Respondent

5. $1,900 for incomplete work

6. $12,099 for the cost of assembling parts and accessories to the vehicle.

8. The Tribunal's Consumer and Commercial division has jurisdiction in relation to matters arising under various legislation including Part 6A of the Fair Trading Act (NSW)(FTA) which in turn may raise issues rights under the Australian Consumer Law (ACL).

9. The ACL was incorporated into the law of New South Wales by section 28(1) of the Fair Trading Act 1987 (NSW) ('FTA'). The ACL (NSW) consists of Schedule 2 of the Competition and Consumer Act 2010 (Cwth), and the regulations under section 139G of that Act (FTA section 27).

10. The ACL applies to create rights at law in consumers that fall within the terms of the ACL including the consumer guarantee provisions in sections 54-57 of Part 3-2 ACL. Whilst the ACL creates a cause of action at law and a range of remedies for parties, it does not of itself confer any jurisdiction on this Tribunal to hear those actions and provide those remedies.

11. Section 79J FTA gives the Tribunal jurisdiction to hear claims falling under the FTA. Section 79D of the FTA defines a 'consumer' to include a natural person to whom a supplier has supplied or agreed to supply goods or services, whether under a contract or not. The Applicant meets this description.

12. The claim arises from the supply of services to the consumer (under a contract or not), and constitutes a claim by the consumer for the payment of a specified sum of money (FTA section 79E). The services to which the claim relates were supplied in NSW (FTA section 79K). I consider first whether the claim has been made within the period allowed in Section 79L FTA.

13. The claim is otherwise maintainable under the FTA but as such is subject to the Tribunal's monetary jurisdiction which is limited by section 79S FTA to making orders for the payment of no more than the prescribed amount. The Applicant’s claim is within the monetary limits prescribed.

Proceedings

14. The matter was heard by me on 2 July 2018. The Applicant appeared in person. The Respondent also attended in person. Both gave their evidence on oath. At the completion of the hearing, I reserved my decision.

Issues

15. The Issues in this matter are:

1. Has the application been brought within the relevant time limits?

2. If so, has the Respondent breached any of its obligation under the Australian Consumer Law including to provide services to the Applicant with due care and skill?

3. If so, what is the amount of the Applicant's loss?

Has the application been made within the relevant time limits?

16. Section 79L of the FT Act provides:

79L Limitation periods

(1)   The Tribunal does not have jurisdiction to hear and determine a consumer claim if any of the following apply:

(a)   the cause of action giving rise to the claim first accrued more than 3 years before the date on which the claim is lodged,

(b)   the goods or services to which the claim relates were supplied (or, if made in instalments, were last supplied) to the claimant more than 10 years before the date on which the claim is lodged.

(2)   Nothing in this section affects any period of limitation under the Limitation Act 1969 .

17. In Sacks v Hammoud [2016] NSWCATAP 225 the Appeal Panel of this Tribunal considered the construction to be given to an equivalent provision to section 79L which was contained in section 7 of the then Consumer Claims Act 1998 with specific attention being given to the meaning of the terms “cause of action” and “first accrues.” Having reviewed the relevant authorities, the Appeal Panel concluded that the term “cause of action” refers to the elements necessary to give rise to the right of action [at 32]. It cited the comments of Wilson J in Do Carmo v Ford Excavations Pty Ltd (1984) CLR 234 [at 245]:

[T]he concept of a ‘cause of action’ would seem to be clear. It is simply the fact or combination of facts that gives rise to a right to sue. In an action for negligence, it consists of the wrongful act or omission and the consequent damage … Knowledge of the legal implications of the known facts is not an additional fact which forms part of a cause of action.

18. At 34, the Appeal Panel applies these principles, and finds, for the purpose of s 7(4)(a) of the Consumer Claims Act, that a cause of action “first accrues”

when facts which constitute the elements of the relevant cause of action crystallise or combine so that all the elements necessary to entitle a person to make a consumer claim are present.

19. The Applicant principally alleges that the Respondent failed to undertake the restoration work for which she had paid. She seeks the difference between what she has paid and the assessed value of the work, and the costs to complete works for which she has paid. Separately but related to this, she seeks the costs of:

1. parts and accessories she purchased for the restoration, but which were not returned to her when the vehicle was returned

2. the cost of repairs to damage to the vehicle while it was in the custody of the Respondent.

20. These claims may amount to a breach of several the consumer warranties under the ACL including those set out in Sections 60, 61 and 62 of the ACL. These provisions commenced on 1 January 2011, and therefore apply to the dealings between these parties.

21. As noted in Sacks v Hammoud, the cause of action for a breach of any of these warranties arises under S 267 of the ACL. The Appeal Panel considered when a cause of action under section 267(4) of the ACL, arising from a failure to comply with the guarantee as to due care and skill contained in section 60 of the ACL, “first accrues.” It observed that a cause of action under 267(4) has two discrete elements: a failure to comply with a guarantee (in this case section 60) and suffering damage and loss as a result of that failure. It concluded that a cause of action under 267(4) does not accrue until loss or damage is sustained because of the alleged failure to comply [at 56].

This requires the Tribunal to make a factual finding about when the alleged damage became known or could have become known with reasonable diligence [at 59].

22. The Applicant also suggests that she has suffered loss because of misrepresentations, or misleading conduct by the Respondent, and that there were unfair contract terms. Section 18 provides:

18 Misleading or deceptive conduct

(1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

…

Section 29(1)(b) provides:

29 False or misleading representations about goods or services

(1) A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:

…

(b) make a false or misleading representation that services are of a particular standard, quality, value or grade; or

…

23. Section 236 provides an action for damages to a person who suffers loss or damage because of the conduct of another person where that conduct contravenes a provision of Chapter 2 or 3. Sections 18 and 29 of the ACL NSWare contained in Chapters 2 and 3 respectively.

24. To establish a cause of action under s 236 in respect of an alleged contravention of s 18, the Applicant must relevantly prove:

1. The Respondent made the alleged offending statements;

2. The offending statements were made in the course of trade or commerce: s 18(1);

3. Those statements were false or misleading or were likely to mislead or deceive: s 18(2);

4. The Applicant suffered loss or damage “because of” that conduct: s 236(1)(a).

25. The Appeal Panel in Sacks v Hammoud notes that the determination of when the cause of action under S 236 first accrued requires the Tribunal to make a factual finding about when the alleged damage was first sustained.

26. The Applicant made her application in November 2017. To be within the time limits, her cause of action must therefore have accrued no later than November 2014. The question therefore becomes whether the alleged damage caused by the Respondent’s breach became known to the Applicant, or could have become known with reasonable diligence before November 2014.

27. I raised these issues with the parties at the start of the hearing.

28. In her written and oral evidence, the Applicant provided the following material evidence:

1. The Respondent undertook various mechanical, electrical and general repair services on the vehicle in the period between 2007 and 2011.

2. In April 2011, she took her vehicle to the Respondent to discuss a full restoration. They spent several hours together discussing the restoration requirements, including colours, and the parts and accessories to be included. She states that the Respondent never provided a written quotation, but he did make some remarks on paper which she photographed with her camera. She states that the verbal quote was for $8,000 excluding parts and accessories which she was to purchase under the Respondent’s instructions. The Respondent gave a completion date of February 2012.

3. They agreed that the quote included disassembly, paint, reassembly, electrics, mechanical and trimming. She was aware that the Respondent would be using third parties to complete some of the work, but this was to be all included in the quote. The Respondent never agreed she would be separately charged for sandblasting the interiors or the electrics. He has never provided any invoices from these third parties.

4. In August 2011, the Respondent contacted her to indicate he could complete the work in the December 2011/January 2012 period. She delivered the vehicle to him together with some accessories in September 2011. The Respondent stated he would not need any money to be paid until the work was completed.

5. By February 2012, the work had not been completed. The vehicle had been disassembled, sandblasted and bog-filled. In 2012, the Respondent provided a number of reasons why the work had not been done.

6. In 2013, the Respondent requested payment of the full $8,000 to have the vehicle completed by the end of the year. She paid this amount in October 2013.

7. By May 2014, the vehicle had been sandblasted, bogfilled, sanded and had some additional welding and alignment, but was visually little different to its state when delivered to the Respondent in April 2011.

8. The Respondent requested her to pay an additional $3,000 in cash, claiming that this was due to increased prices. During this year, she also purchased all parts and accessories required for the restoration.

9. The vehicle had been in the Respondent’s possession for this entire period.

10. In 2015, the Respondent requested her to store the vehicle for 14 days until he could take it to an electrician. The car was towed to her home, and remained there for 11 months.

11. During 2015, she had “personal medical issues”. At the end of 2015, she obtained employment in the United Kingdom. [Emails suggest that she was working in the UK in the first half of 2016].

12. In 2016, she “was furiously trying to contact the Respondent but getting no response”. She produces summaries of emails sent to the Respondent. The Respondent requested an additional $5,000 to complete the restoration work by Christmas 2016. She began to think she was “a cash cow”. This is when she began to get concerned.

13. The Respondent collected the vehicle from her address.

14. In 2017, the Respondent provided further reasons why the work had not been completed but confirmed that the work would be completed by Christmas 2017 with no further payment required.

15. She paid the following amounts to the Respondent at the following times:

$8,000	15.10.13
$3,000	24.07.14
$2,200	27.08.16
$ 300	14.09.16
$2,500	07.10.16

16. The Respondent never informed her that his motor vehicle tradesperson’s certificate expired in July 2016.

29. The Respondent generally challenged the factual basis of the Applicant’s claims but did make certain concessions during the hearing including:

1. That the Applicant had paid him $2,200 for work he did not complete, out of the last $5,000 paid by her.

2. There was some rust that was missed (though he denies this was part of his work)

3. There was some minor damage caused during transit.

30. The Respondent states that the Applicant must have been aware of “issues with the vehicle” no later than February 2012, as that was the time she came to collect the vehicle, thinking it would be complete. [The Applicant responded that she accepted the Respondent’s word at that time that he would continue to work on the vehicle. She had not paid him anything at this time.

31. The Respondent also states:

1. That he did the work he quoted for, which was to paint and repair the outer body of the vehicle, bead blasting and door jams. He never quoted for trimming or electrical or mechanical work (particularly the engine bay), and his original quotation (for $10,000, not $8,000) was never intended to include these third-party costs. He is not an electrician. His shop is a panel beating shop. The trim work and wiring would be valued at approximately $2,000 to $3,000 each. The quote also did not include sand-blasting.

2. The other work which it is claimed he failed to do was work for which he either did not quote or was not paid for – e.g. reconditioning the bars and chrome, or stripping the floor pans back to bare metal

3. Except for some minor items (scratches on the inside of doors, and some damage to the front of the vehicle), he was not responsible for the damage the Applicant alleges (including chips in the paint, unnecessary holes in the boot lid where the luggage rack was to go). Any damage occurred in transit to Cummins Cars and involves very minimal repairs.

4. He did not fail to return the parts and accessories as claimed by the Applicant. He has no reason to keep any parts. All parts purchased by the Applicant were left in the original box the Applicant gave him and returned with the tow truck driver to Cummins Cars. He agrees he sent Cummins Cars a bag of rubbers that did not belong to the vehicle. That was his mistake. He never received a wiring harness. This is a large item and would not be misplaced.

5. He never issued an invoice because the work was never finished

6. The main reason for the initial delay in the work was due to a delay in the Applicant making the initial payment. Subsequent delays were partly due to his own ill-health.

32. Analysing the evidence of the Applicant, her initial concerns relate to the failure of the Respondent to undertake the work for which he had quoted within the time-frames he had suggested.

33. The damage sought by the Applicant relates to a range of conduct or omissions by the Respondent. These include:

1. The difference between the value of the work, and the amount she paid for the work

2. The costs of completing the agreed work

3. The costs of repairing the damage caused to the vehicle while in the custody of the Respondent

4. The costs of replacing missing parts and accessories supplied by her.

34. There is no doubt that some of these costs had not crystallised by November 2014. In particular, it appears that most of the damage to the body of the vehicle, if it occurred, only happened when the vehicle was transported to Cummins Cars during these proceedings. Furthermore, the missing parts and accessories only became apparent at the same time. The issue however is when the cause of action “first accrues”.

35. No loss or damage could have accrued before the Applicant made her initial payment of $8,000 in October 2013. However, by the time this payment was made, and certainly by the time the next payment of $3,000 was requested (and made in May 2014), the Applicant must have been aware that:

1. The Respondent had a very different understanding of what she thought he had quoted for

2. The Respondent could not complete the work within the timeframes initially suggested, or even the extended time frames he had requested.

3. There would be cost blowouts.

36. and that she was entitled to bring a consumer claim under the predecessor to Part 6A of the FTA, being S7 Consumer Claims Act (valid until 30 September 2015).

36. By mid-2014, the Respondent had possession of the vehicle for more than 3 years, and the Applicant had paid $11,000. She had viewed the vehicle and taken photos on several occasions. She was well aware that the Respondent had not completed the restoration work she had bargained for, for the agreed price, even though she had allowed a considerable extension of time. A reasonable consumer in the position of the Applicant would be entitled to conclude that the work would not be completed as agreed, and to seek reimbursement for the costs associated with this breach. In this sense, her loss had crystallised at that time, and her cause of action either under general contract law, or for breach of one of the consumer warranties under SS 60 to 62 of the ACL had accrued.

37. In answer to this, the Applicant points out that she mainly became concerned about the actions of the Respondent at or around the time she returned to work in the UK in 2016, as indicated by the large number of emails from that time, which she reproduces in her materials. The reason for any delay in commencing proceedings is not material to my determination. The issue is when the cause of action has accrued. I have decided that the Applicant’s cause of action accrued more than 3 years prior to the lodgement of her application.

38. The Applicant’s claim under S 236 for breach of SS 18 or 29 of the ACL (for misleading or deceptive conduct, or false or misleading representations about goods or services) relate to the Respondent’s failure to:

1. Advise that there would be additional costs

2. Disclose he was not licensed to undertake the agreed restoration work

3. Disclose any reasons why there might be a delay in completing the work.

40. Assuming the Applicant had a separate cause of action under S 236 (which is not at all clear as it appears to be a restatement of the issues relied upon for breach of the consumer guarantees), I am also satisfied that this had accrued well before November 2014.

41. The Applicant has also referred to unfair contract terms. The unfair contract term provisions appear in SS 23 to 28 of the ACL. They apply only to “standard form contracts”. As noted by the Applicant, there was no written contract at all between these parties. The unfair contract terms do not therefore apply, and there is no separate cause of action.

42. For these reasons, I find that the Tribunal lacks jurisdiction to hear and determine this application pursuant of S 79L of the FTA, and the claim must be dismissed.

B Shipp

Senior Member

Civil and Administrative Tribunal of New South Wales

10 August 2018

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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: 11 December 2018