TLK Transport Pty Ltd v Thornthwaite Pty Ltd t/as Yass Valley Mobile Mechanic
[2014] NSWCATCD 147
•30 July 2014
NSW Civil and Administrative Tribunal
New South Wales
Medium Neutral Citation: TLK Transport Pty Ltd v Thornthwaite Pty Ltd t/as Yass Valley Mobile Mechanic [2014] NSWCATCD 147 Hearing dates: 9 May 2014 Decision date: 30 July 2014 Before: A Anforth, General Member Decision: The respondent is to pay the applicant the sum of $6710.39 by 31 August 2014.
The respondent is to make the following parts available for the applicant to collect within business hours by 31 July 2014: all damaged parts which were removed from the engine, and any remaining parts supplied by the applicant to the respondent (including the cam bearings which did not fit).
The respondent must remove the security interest he registered over the applicant's truck from the Personal Property Securities Register. The respondent is to provide the applicant with written proof of this by 31 July 2013
Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) s7, sch 1 and 4;
Competition and Consumer Act 2010 (Cth) schedule 2;
Competition and Consumer Regulations 2010 (Cth) regulation 90;
Consumer Claims Act 1998 (NSW) sections 3, 3A and 7
Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) section 5
Fair Trading Act 1987 (NSW) sections 28 and 32
Motor Vehicles and Repairers Act 2013 (NSW) sections 4, 6, 111, 112, 113 and 167
Personal Property Securities Act 2009 (Cth) sections 8 and 157
Personal Property Securities (Commonwealth Powers) Amendment Act 2009 (NSW) section 3
Privacy Act 1988 section 13
Registration of Interest in Goods Act 1986 (NSW) section 3Cases Cited: Black Inx Pty Ltd v ACT Professional Building Services Pty Ltd t/as ACTPRO [2003] NSWCTTT 195 (24 February 2003)
NCO Finance Australia Pty Ltd v Australian Pacific Airports (Melbourne) Pty Ltd [2013] FCCA 2274Texts Cited: Explanatory Memorandum, Trade Practices Amendment (Australian Consumer Law) Act (No.2) 2010 (Cth)
Industry Guide to the Australian Consumer Law: Motor Vehicle Sales and Repairs (2013)
NRMA, MotorServe Policy (July 2013)
Repco Ltd, Repco Authorised Service Nationwide Warranty (2014)Category: Principal judgment Parties: TLK Transport Pty Ltd (applicant)
Thornthwaite Pty Ltd t/as Yass Valley Mobile Mechanic (respondent)File Number(s): MV 13/65113
reasons for decision
SUMMARY
The applicant operates a transportation business, and relies upon the Nissan truck to perform this business.
The respondent is a motor vehicle repairer operating within the Yass region.
The applicant's truck broke down twice in 2013; each time it was repaired by the respondent.
The first breakdown, on 27 July 2013, was due to engine damage caused by the turbo failing which resulted in the fins travelling through the engine.
The second breakdown occurred on 11 October 2013. The cause was a plate coming off the lifter valve, travelling around the cam and bending one of the push rods. The failure of the cam follower also damaged the camshaft.
The applicant alleges that the second breakdown was the result of defective work carried out by the respondent when repairing the truck after the first breakdown.
The applicant also claims that on-going oil leaks and engine problems are attributable to the poor quality of the respondent's work.
Further, the applicant asserts that the respondent took an unreasonable amount of time to complete both repair jobs (approximately two months for each).
On 5 December 2014, the applicant filed an application seeking payment of $2,904.00 from the respondent. This sum represented reimbursement for part of a paid invoice, and the costs of truck hire and towing. This claim was amended to $10,005.75 in the submissions of 13 March 2014.
CHRONOLOGY
On 25 July 2013, the applicant's truck broke down. The respondent was the only local mechanic able to undertake repairs immediately; the truck was taken to the respondent's workshop on or by 27 July 2014.
Between 27 and 31 July, the applicant contacted the respondent to facilitate repairs being finished quickly. The applicant claims to have asked if payment for parts was needed immediately, and offered to make such a payment.
On 30 July 2013, the respondent contacted the applicant to discuss the fault. The applicant agreed to the proposed repairs, but also informed the respondent that the applicant had limited funds to conduct major repairs and that they only wanted to get the truck working as they were looking to trade it in in the near future.
On 5 August 2013, the respondent invoiced the applicant $3,731.20 (including GST) for an engine kit (Invoice 10971). The applicant paid in instalments of $3,000.00 on 7 August 2013 and $731.20 on 16 August 2013.
In an email dated 21 August 2013, the respondent gave an itemised estimate of costs which totalled $10,127.00. $6,977.00 of this sum was for parts, while $3,150.00 was for an estimated 35 hours of labour. The figures included GST.
In the same email, the respondent informed the applicant that 'I spoke to the supplier earlier today and at this stage we are looking at 14 days'.
Also on 21 August 2013, the respondent claims to have spoken with the applicant, and have been told 'that he was going broke and needed his truck'.
From 22 - 28 August 2013, the respondent attempted to find parts in Australia, as this would be quicker than shipping them from Japan, but to no avail.
During this time, the applicant was given the option of installing a second hand engine, but declined.
On 28 August 2013, the respondent received the turbo by freight. This arrived earlier than the other ordered parts as it was supplied from within Australia.
On 28 August 2013, the applicant received and paid Invoice 10975, totalling $2,791.80, for the turbo parts.
On 3 September 2013, the respondent received the piston kits.
On 12 September 2013, upon further inspection of the truck, the respondent discovered that one of the engine liners had seized. This required further components to be removed in order for the engine to be repaired. The respondent stated that this was not done for practical reasons until all the parts had arrived.
On 13 - 14 September 2013, the applicant was informed of the necessary delay, and that the truck would be ready to be picked up on 16 or 17 September 2013.
On 16 - 17 September 2013, the respondent discovered the engine was over-fuelling; the applicant was informed. To address this, the respondent checked the timing marks, removed and adjusted the fuel pump, and replaced the delivery valves. The engine was then reassembled.
On 23 September 2013, the truck was ready to be picked up; it was collected on 24 September 2013.
On 23 September 2013, the respondent issued Invoice 10981 to the applicant. The total amount of $7,639 included 63 hours of labour to rebuild the bottom end of the engine, repair the fuel system, and install sundry parts.
The applicant paid Invoice 10981 in two instalments: $5,000.00 on 23 September 2013, and $2,639.89 on 24 September 2013. The payment was split due to the applicant's banking arrangements.
The applicant requested an itemised version of Invoice 10981 on 24 September 2014 and, when none was produced, repeated the request on 30 September 2014. The applicant claims to have been contacted by the respondent via email on 1 October 2013, and informed that it would email the applicant the itemized invoice in the next few days.
On 2 October 2013, a strong smell of fuel alerted the applicant to a fuel leak in the truck. The respondent was contacted and fixed the problem by tightening two clamps. The parties have not provided records of any charge or payment for this. Upon inquiry, the applicant was informed that the service warranty was 'in accordance with legal requirements'.
On 3 October 2013, the applicant emailed the respondent again requesting a detailed version of Invoice 10981, and asking for a more detailed explanation of service warranty than that given the day before.
On 11 October 2013, the applicant's truck broke down again. The applicant engaged the respondent to repair it on the assumption that the work would be covered by warranty of the first repairs.
On 15 October 2014, the respondent arranged towing and repairs with the applicant.
On 16 or 17 October 2013, the respondent informed the applicant that the repairs would not be carried out under warranty as the problem was not related to the previous work done.
On 17 October 2013, the applicant emailed the respondent requesting details of exactly what parts were needed, so that it could source parts itself.
On 21 October 2013, the parties agreed that the applicant would supply the parts. Pursuant to this agreement the respondent sent two emails to the applicant.
The first email contained details of the parts needed for the repairs, an estimate of costs ($4,257.93, including $1,350.00 for 12-15 hours of labour, but not including freight of parts), asking the applicant to advise whether they wished to continue with the repairs as parts had to be sourced from Japan (which would take at least 10-14 days), and a request for the applicant's ABN number (to allay the respondent's concerns about the applicant's ability to pay).
The applicant purchased parts for $1,938.95 from Southern Truck Centre Wollongong Pty Ltd. This consisted of two transactions: $1,825.00 paid on 23 October 2013 (Invoice 2522773) and $113.95 paid on 12 November 2013 (Invoice 2523279). The parts purchased were lifter valves, camshaft, push rods, and several gaskets (Invoice 2522773), and a cam bush set (Invoice 2523279).
The applicant did not purchase the engine oil or oil filter kit also listed in the respondent's email.
The second email provided additional information about some of the parts required, to ensure that the camshaft had new bearings. The respondent states that a 'read receipt' was received indicating that the applicant had received and read this email; the applicant contends that the email was blank.
The applicant states that further emails were exchanged on 21 and 22 October 2013 relating to the gaskets to be ordered.
On 23 October 2013, the applicant received a more detailed version of Invoice 10981 in response to repeated requests for an explanation of costs, particularly in relation to repairs of the fuel system. The applicant states that this invoice was only received after they contacted the Department of Fair Trading, who in turn contacted the respondent.
On 6 November 2013, the applicant's parts were supplied to the respondent. There were no cam bearings - a part which was not listed as being required in the first email of 21 October 2013 but which the respondent claims to have been the subject of the second email. The applicant was informed and agreed to supply them.
On 12 November 2013, the applicant received Invoice 11008 for $1,083.50, including GST. This figure covered the costs of transporting the truck to the workshop ($400.00, including 2.5 hours of labour), and removing the bent push rods, radiator and front cover, engine cam and lifters ($585.00, including 6.5 hours of labour).
On 21 November 2013, the applicant paid Invoice 11008 in full.
On Friday, 22 November 2013, the applicant picked up the cam bearing from Wollongong and contacted the respondent, who said to drop it off on Monday, 25 November 2013, as the business would not be open over the weekend.
At 8am on 25 November 2013, the applicant dropped off the cam bearing at the respondent's workshop. The respondent was not personally on site, but was contacted by phone and informed by the applicant.
On 26 November 2013, the respondent ordered another cam bearing from a supplier in WA, as the bearing supplied by the applicant did not fit. The applicant was informed on 2 December 2013, in response to an email sent by the applicant on 29 November 2013 asking when the truck would be ready.
On 4 December 2013, the repairs were completed.
For these repairs, the applicant received Invoice 11015 for $2,520.49, dated 4 December 2013. This figure covered the costs of removing the damaged cam bearing and fitting the bearings supplied by the customer, removing those and installing replacement bearings which fitted properly, refitting the front cover timing gear, refitting the engine, and associated repairs.
The applicant's request for a 14-day account was denied.
The applicant has not paid invoice 11015.
After business hours on 4 December 2013, the applicant arrived at the respondent's workshop accompanied by police. After some arguments, the police and applicant removed the truck from the yard, without payment. The applicant disregarded advice not to take the truck as it had not been test-driven.
On 6 December 2013, the respondent registered a security interest over the truck on the Personal Property Securities Register. The registration number is 201312060084186. The collateral is described as a motor vehicle which is commercial property, over which the proceeds are a repairer's lien. The applicant was not informed of this, only learning about it from the respondent's submissions.
The applicant hired a replacement vehicle to carry out their business while the respondent was carrying out the repairs. The total cost of $2,112.55, which the applicant seeks to recover from the respondent, comprised: The respondent contests the applicant's claims, and has entered a counterclaim for payment of $2,520.49 which is outstanding for the second repairs, or for the truck to be placed in its possession until the invoice is paid.
(1) 22/08/13 - 27/08/13: $869.55;
(2) 02/09/13 - 03/09/13: $117.70;
(3) 08/09/13 - 11/09/13: $479.05;
(4) 13/10/13 - 14/10/13: $156.20;
(5) 20/10/13 - 22/10/13: $333.85;
(6) 23/11/13 - 24/11/13: $156.20.
Since the second repairs were completed, the applicant claims to have had to perform continual maintenance on the truck.
The applicant purchased new gaskets from Southern Truck Centre Wollongong Pty Ltd on 10 December 2013 ($230.92, Estimate 2524083) and 11 December 2013 ($16.30, Estimate 2003706).
Between 6 December 2014 and 17 February 2014 the applicant spent $193.09 on parts to address oil leaks and other engine issues in the truck. This sum comprises $180.20 from Supercheap Auto and $12.89 from Speciality Fasteners, consisting of:
(1) Supercheap Auto: $12.00 (06/12/13), $66.04 (10/12/13), $36.89 (15/12/13), $27.59 (11/02/14), $15.29 (13/02/14), $22.39 (17/02/14);
(2) Speciality Fasteners: $6.09 (22/01/14), $6.80 (12/02/14).
On 21 January 2014 the applicant was quoted $1,892.55 by DS Sutton Automotive and Engineering to rectify an oil leak and leaking gaskets.
On 6 February 2014 the applicant received a defect notice from the NSW Department of Transport in relation to the persistent oil leak. The truck was cleared on 17 February 2014. The applicant paid the fee of $17.40.
On 11 February 2014, Southern Truck Centre Pty Ltd gave the applicant an estimate of $3,190.00 to repair oil leaks, remove and replace certain parts, and to clean the engine.
On 11 March 2014, DS Sutton Automotive and Engineering invoiced the applicant the sum of $1,364.90 to repair the oil leak and leaking gaskets.
The applicant seeks to recover the costs of the additional gaskets, additional parts, defect fee, and repairs by Sutton Automotive and Engineering from the respondent.
APPLICATION
On 5 December 2013, the applicant lodged an application to the Consumer, Trader and Tenancy Tribunal. The order sought was for the respondent to pay $2,904.00 to the applicant. This sum represented reimbursement for the $1,386.00 invoice to repair the fuel system, $1,243.00 for truck hire, and $275.00 for tow truck hire. The main points of the application were:
(1) The length of time and amount of labour taken to do repairs was unreasonable;
(2) The 14 hours of labour to repair the fuel system was unnecessary, and there was no problem with the engine timing prior to the respondent undertaking the original repairs;
(3) Suspicion that the second break-down was attributable entirely or in part to repair work done by the respondent;
(4) The fee of $440.00 for towing was excessive and above market rates;
(5) The air-conditioner only malfunctioned after the repair works were done and had to be re-gassed.
On 24 January 2014, the matter came before the Tribunal. Mr Chris O'Brien appeared for the applicant; Mr Mark Thornthwaite appeared for the respondent. The Tribunal made the following orders:
1. "The hearing was adjourned to a date to be fixed by the Registrar.
2. The respondent's name Yass Valley Mobile Mechanic is amended to Thornthwaite Pty Ltd t/a Yass Valley Mobile Mechanic.
3. The applicant is to file and serve by 24 February 2014:
a. Details of the scope of work for which the respondent was retained;
b. Details of the work done by the respondent;
c. Details of the defects in the respondent's work;
d. How the defects caused loss to the applicant;
e. Invoices relied upon;
f. Details of the financial losses the applicant claims to have suffered;
g. Any expert report relied upon addressing the alleged defective work.
4. The respondent is to file and serve by 24 March 2014:
a. A response to the above;
b. Details of any counter claim made;
c. Any expert report relied upon.
5. The applicant shall make the vehicle and their records available for inspection by the respondent's expert and the respondent shall make their records available for inspection by the applicant's expert."
On 11 February 2014, the applicant requested an extension of time to comply with the Tribunal's orders of 24 January 2014, as it was having difficulties finding an expert mechanic to write a report for the Tribunal.
On 18 February 2014, and with the respondent's consent, the Tribunal amended the timetable established on 24 January 2014. Order 3 was extended to 7 March 2014. Order 4 was correspondingly extended to 7 April 2014.
The Tribunal received the applicant's submissions on 13 March 2013. These reiterated the original claims, and:
(1) Included an emailed report from Mr Rob Wallace, diesel mechanic, of ACT Earthmoving Pty Ltd, dated 7 March 2014. The report concludes:
'In summary, there was little or no consultation with the customer, and it is difficult to guess what happened without parts or at the very least photographic evidence, it would seem that the rebuild of the engine had not been a full and proper job to give trouble free continued service.'
(2) Asked for Invoice 11015 (for $2,520.49, dated 4 December 2014) to be voided, so the applicant does not have to pay it.
(3) Increased the amount sought from the respondent,
comprised of individual amounts that are substantiated by invoices and receipts. The figure sought represents the sum of:
(i) $1,386.00 for 14 hours of labour in Invoice 10981 (dated 23 September 2013, paid by 24 September 2013);
(ii) $1,938.95 for parts sourced from Southern Trucks Wollongong in November 2013;
(iii) $1,083.50 for Invoice 11008 (dated 12 November 2012, paid 21 November 2012);
(iv) $2112.55 for truck hire of a replacement truck on certain days in August - November while the truck was being repaired;
(v) $247.22 for gaskets from Southern Trucks Wollongong;
(vi) $193.09 for additional parts;
(vii) $17.40 for the fee to remove the defect notice;
(viii) $1,892.55 for repairs undertaken by Sutton Automotive Ltd.
The Tribunal notes several inaccuracies in the applicant's calculations. Firstly, while the sum sought is stated to be $10,005.70, the actual total of the individual figures is $8,871.26. The addition of Invoice 11015 for $2,520.49, which is included by an annotated suggestion, brings the total to $11,391.75, which still does not match the stated sum sought. No explanation is given for this. Secondly, the applicant has not adjusted the figure claimed for the repairs and service carried out by Sutton Automotive - the actual price was $1,364.90, $527.65 below the quote of $1892.55 on which the applicant's calculations were based. This was acknowledged in the applicant's second submissions, accompanied by a request that the claim be amended to reflect the true invoice. Allowing for these inaccuracies, the Tribunal calculates the applicant's claim to be for $8,343.61.
On 9 May 2014 the Tribunal heard the matter. Mr Chris O'Brien appeared for the applicant; Mr Mark Thornthwaite appeared for the respondent.
The respondent had not complied with the procedural orders of 24 January 2014.
Both parties orally addressed their respective cases. Both parties informed the Tribunal that they did not have the financial resources to retain either one joint independent expert or their own experts. The Tribunal informed the parties of the reliance the Tribunal usually places on the assistance of experts and the difficulties that the absence of experts raises for the Tribunal's capacity to deliver an informed decision. Notwithstanding this, the parties expressed their preference for the Tribunal to determine the matter without that assistance.
The following orders were made:
1. "By determination of Member, the hearing was adjourned to a date to be fixed by the Registrar.
By consent:
2. The respondent is to file and serve documents and submissions in accordance with the orders made on 24 January 2014 by 30 May 2014.
3. The applicant is to file and serve any reply by 14 June 2014.
4. The parties agree that the matter will then be decided on the papers. The parties agree to the Tribunal Member seeking such independent assistance from suitable qualified people as he needs in the absence of any independent experts having been filed. The parties agree to waive their right to cross examination of any suitable qualified person who renders such assistance.
Note:
5. The parties are both unable to afford expert witnesses or evidence from other suitably qualified people. They both wish the matter determined expeditiously and have agreed to the above process with its inherent limitations.
6. The respondent's delay in complying with the procedural orders arises from extreme personal circumstances that were explained to the Tribunal and applicant."
On 28 May 2014, the respondent filed submissions disputing the applicant's claims and the expertise of Mr Rob Wallace, and entered a counterclaim for the unpaid invoice of $2520.49, plus interest at overdraft rate. Alternatively, if this amount if not paid, the respondent seeks the truck to be returned into its possession as per the repairer's lien until the amount is paid in full.
On 13 June 2014, the applicant filed a reply to the respondent's submissions. This contained information establishing the credentials of Mr Wallace, responses to the respondent's comments, and further information about the claims.
JURISDICTION
This matter was initiated in the NSW Consumer, Trader and Tenancy Tribunal (CTTT). However, the CTTT was replaced by the Consumer and Commercial division of the NSW Civil and Administrative Tribunal ('the Tribunal' or 'NCAT') before the matter was heard.
The Tribunal is a statutory body, established on 1 January 2014 by the Civil and Administrative Tribunal Act 2013 (NSW) section 7(2)(a) ('NCAT Act').
The Tribunal has to power to hear and decide this case under the transitional provisions in Schedule 1 of the NCAT Act. Clause 7(2) provides that part-heard proceedings which commenced prior to the establishment of NCAT are to be determined by NCAT. In doing so, NCAT has and may exercise all the functions that the existing tribunal (the CTTT) had prior to its abolition (NCAT Act schedule 1 clause 7(3)).
The Tribunal's Consumer and Commercial division relevantly has jurisdiction in relation to matters arising under legislation including the Australian Consumer Law (NSW), the Consumer Claims Act 1998 (NSW), and the Motor Dealers and Repairers Act 2013 (NSW) (NCAT Act schedule 4 section 3).
Consumer Claims Act 1998 (NSW)
Section 7(1) of the Consumer Claims Act 1998 (NSW) confers jurisdiction upon the Tribunal to hear and determine consumer claims under the Act, subject to section 7(2):
The Tribunal has jurisdiction to hear and determine a consumer claim only if:
(a) the goods or services to which the claim relates were supplied in New South Wales; or
(b) a contract or other agreement to which the claim relates contemplated that the goods or services be supplied in New South Wales; or
(c) a contract or other agreement to which the claim relates was made in New South Wales.
In this case, the services were supplied in NSW. Section 7(2) is therefore not an impediment to the Tribunal's jurisdiction.
Section 3 of the CCA defines a 'consumer' to include a small proprietary company to whom a supplier has supplied or agreed to supply goods or services, whether under a contract or not. The applicant meets this definition.
Section 3 also provides that 'supply' includes to provide, grant or render services for valuable consideration under a contract. A reference to the supply of services includes a reference to the supply of services together with goods (section 3(2)). Therefore, the services supplied by the respondent included the actual repairs as well as the purchase of parts necessary to complete the repairs.
This matter also meets the definition of a 'consumer claim' in section 3A(1)(e) as the applicant is seeking payment of a specified sum and relief from payment of a specified sum of money.
Therefore, this matter is within the Tribunal's jurisdiction under the CCA. Any determination of liability by the Tribunal must be grounded in a cause of action known to law, after which the Tribunal has flexibility to mould its orders according to the fairness and equity of the occasion.
Motor Dealers and Repairers Act 2013 (NSW)
The NCAT Act also gives the Tribunal jurisdiction under Motor Dealers and Repairers Act 2013. The Act came into force on 27 November 2013, a week before this application was lodged, so is applicable here.
Under section 4 of the Act, 'motor vehicle' means any type of vehicle built to be propelled by a motor, not including vehicles used on railways, tramways, or aircraft. Trucks such as the applicant's are therefore covered by the Act.
Section 6(1) provides that "motor vehicle repairer" means a person who carries on the business of carrying out repair work on motor vehicles. 'Repair' is defined in section 4 to include examine, detect faults in, adjust, carry out maintenance on, overhaul, replace, alter and paint.
Section 111(2) of the Act provides that the Act applies to disputes between motor vehicle repairers and owners of motor vehicles, including:
(a) the manner in which any repair work has been done,
(b) the fair cost owed by the owner to the repairer for the carrying out of any repair work.
Motor vehicle disputes arising under the Act may be dealt with by the Tribunal pursuant to an application by one of the parties involved (section 111 )
Australian Consumer Law
Statutory consumer protection provisions are found in the Australian Consumer Law ('ACL'), which 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 (Cth), and the regulations under section 139G of that Act (FTA section 27).
Section 32 of the FTA provides that the ACL (NSW) applies to and in relation to persons carrying on business within this jurisdiction, or to bodies incorporated or registered in NSW. Both parties satisfy this requirement.
Under section 3(3) of the ACL, a person is taken to have acquired services as a consumer if the amount paid for the services did not exceed $40,000.00.
'Services' includes the provision, granting or conferral of rights, benefits, privileges or facilities under a contract for or in relation to the performance of work, with or without the supply of goods (section 2).
The present matter is a claim arising from the provision of services within NSW by the respondent to the applicant in the form of motor vehicle repairs valued at $17,766.88. The matter thus falls within the ambit of the ACL.
ISSUES
The following issues have been raised by the parties' submissions:
Issues under the ACL:
(1) Service Providers' Guarantee of Due Care and Skill
(2) Service Providers' Guarantee of Fitness for a Particular Purpose
(3) Service Providers' Guarantee of Supply within a Reasonable Time
Other Issues:
(1) Service Warranty
(2) Excessive Costs
(3) Counterclaim
ISSUES UNDER THE AUSTRALIAN CONSUMER LAW
The ACL establishes statutory protections for consumers. Volume 3 part 3.2 deals with implied guarantees relating to the supply of goods and services to consumers.
Under the ACL, suppliers of services guarantee that the services they provide will be rendered with due care and skill (section 60), and will be reasonably fit for the purpose indicated by the consumer (section 61).
Section 62 ensures that that if services are provided within a timeframe that is unfixed or not agreed on, there is a guarantee that the services will be supplied within a reasonable time. 'Reasonable time' is not defined.
These guarantees cannot be excluded by contract (section 64).
If the supplier has failed to meet any of these guarantees, the consumer is entitled to take action under ACL part 5.4 section 267. Permissible actions include requiring the service supplier to rectify the problem, terminating the contract for services, and initiating legal action to recover losses, as the applicant has done.
If the failure does not amount to a 'major failure', the supplier can choose between repairing the problem free of charge and within a reasonable time or offering the applicant a refund. If the supplier refuses or takes too long, the consumer is then entitled to a refund and choice of alternate repairer (section 267(2)).
If the failure is deemed to be major, the consumer can either terminate the services and obtain a refund, or continue the services contract and seek compensation for the difference in value between what was paid and what was provided (section 267(3)).
A 'major failure' is one where the consumer would not have acquired the services has they known the nature and extent of the problem, or the services provided are substantially unfit for their normal or specified purpose and cannot be remedied easily or within a reasonable time, or where the supply of the services has created an unsafe situation (section 268).
In either case, section 267(4) also entitles consumers to compensation for any consequential or associated loss or damage resulting from a supplier's failure to meet the consumer guarantees if the loss or damage was reasonably foreseeable and not caused by something outside the supplier's control.
If the applicant's claim is made out, the Tribunal also has the power under CCA section 8 to order rectification, refund of monies paid or monetary damages. Such an outcome would also be consistent with the common law.
Guarantee of Due Care and Skill
Section 60 provides:
If a person supplies, in trade or commerce, services to a consumer, there is a guarantee that the services will be rendered with due care and skill.
The guarantee of due care and skill requires that the provider of the services must have 'an acceptable level of skill in the particular area of activity involved'.
The respondent is a licenced repairer, therefore is deemed to have and be capable of exercising the requisite skills. If the original or second repairs were inadequate or defective, the respondent will have breached the guarantee that services will be rendered with due care and skill.
In making this determination, the Tribunal will consider whether the original repairs caused the second break down, and whether the second repairs caused or failed to prevent the on-going engine problems and oil leakage.
First Breakdown
The applicant alleges that the respondent's work was defective, rendering further repairs necessary within 3 weeks of the original repairs being completed, and that the respondent's disorganisation caused unnecessary delays.
The issue of the delays, while relevant to the degree of care and skill exercised by the respondent, is discussed below in relation to the guarantee that services will be provided within a reasonable time. The focus of this section is on the quality of the repairs.
The first breakdown was caused by the failure of the turbo, which sent fins travelling through proximate parts of the engine. Within three weeks of the repairs being completed, the truck broke down again. The cause was the failure of the camshaft follower, which damaged the camshaft and push rod, and caused the engine to misfire.
The camshaft and followers were not removed, serviced or replaced during the first repairs.
The question is whether a qualified repairer with the respondent's knowledge and skill would have inspected (and if necessary repaired or replaced) the camshaft and bearings either as a matter of routine, or in the course of undertaking the particular repairs for which it was retained.
The scope of work for which the respondent was engaged is influential in determining whether the repairs were carried out with due care and skill.
The respondent claims that the applicant instructed it 'only to do the repair needed to get the truck working.' Specifically, the respondent claims that on 30 July 2013 the applicant said that 'they had limited funds to conduct major repairs and they only wanted to get the truck working, as they were looking to trade it in in the near future.'
The respondent considers that it was engaged to repair only the parts of the engine that had failed or had already been identified as being damaged, namely the turbo and those parts of the engine through which the fins travelled.
In contrast to the narrow scope suggested by the respondent, the applicant asserts that the respondent was retained to assess the problem and undertake repairs. Further, in its second submissions, the applicant stated that 'we were relying on his expertise to ascertain problems, fix problems and advise of problems. We are not mechanics...'
The Tribunal finds the applicant's submissions on this point persuasive: its mechanical ignorance precluded it issuing explicit instructions regarding the exact parts to be replaced or checked. This is a common situation faced by mechanics and repairers, and is no excuse for not performing work in a thorough and timely manner. Moreover, the respondent should have addressed any uncertainty by clarifying the scope of work to be undertaken, and its requirement that payment be made in full before parts are ordered.
It was possible to undertake limited repairs and get the truck working without removing or servicing the camshaft, followers and head; the respondent did so. The Tribunal notes that this work was carried out in good faith; additional problems encountered during the repair work (the seized sleeve and timing problem) were identified and addressed as they may have contributed to the breakdown, and were necessary to get the truck in working order. The Tribunal also notes that the respondent contacted the applicant about these additional issues, and obtained consent to repair them; this is good practice.
However, given the proximity of the camshaft, follower and bearings to the turbo and the other damaged parts, it would have been prudent to check that they were undamaged or in need of servicing or adjustment.
This proposition is strengthened by the respondent's own observation that the camshaft and bearings were old and worn, having undergone about 450,000 km of use. The condition of these parts arguably made them more vulnerable to being damaged by the failure of the turbo. This is borne out by the fact that these parts failed in turn within 3 weeks of the truck being operated again. Moreover, the respondent stated in submissions that 'the second failure was due to a damaged cam follower.' This implies that the part was not only worn, it was also damaged. Given its proximity to the turbo and other damaged parts, it is likely that it was damaged by the failure of the turbo.
In Mr Wallace's opinion, with which the Tribunal concurs, the location and condition of the camshaft, follower and bearings meant that they should have at least been inspected, if not serviced or replaced. The respondent did not do so. In its own words 'we did not touch the cam or cam followers... [they] were never removed and the head was not serviced.'
Even if its submissions regarding the limited scope of work are accepted, the respondent's work was inadequate. While not undertaking work that was unnecessary to fix the immediate problem, the respondent should still have ascertained the exact extent of the problem. Moreover, if the camshaft was damaged, as the respondent stated, then its replacement falls within the scope of the respondent's allegedly limited instructions.
For the above reasons the respondent's failure to inspect and (if necessary) replace the camshaft, follower and bearings in the first repairs constitutes acting without due care and skill.
Second Breakdown
In relation to the second breakdown, the essence of the applicant's submission is that the repairs carried out by the respondent caused or failed to prevent on-going engine issues, in particular, a recurrent oil leak and power steering problems.
The applicant also draws attention to the fact that several clamps had to be tightened to address an oil leak a week after the first repairs were complete. The Tribunal notes that newly installed or rebuilt engines and parts may require such service. However, this leak could equally constitute a recurrent problem. It may also indicate that the respondent habitually - at least in terms of the applicant's vehicle - failed to properly fit clamps and gaskets.
The respondent denies that the work was defective, and claims that the oil leaks are due to the decrepit condition of the engine and the applicant's attempts to address it themselves. In support of these claims, the respondent drew attention to the questionable service history of the truck.
Neither party has provided precise details as to the scope of work it was agreed that the respondent would perform in the second repairs. Each parties' submissions relate to the applicant's assumption that the work would be carried out under warranty; this issue is addressed separately below.
In the absence of specific evidence, the Tribunal deems the respondent to have been engaged on the same terms as for the first repair, namely to identify, advise of and address current engine problems in order to get the truck working again.
The evidence before the Tribunal indicates that the second repairs carried out by the respondent were either inadequate or, more likely, defective.
The fact that an oil leak had previously occurred immediately after the respondent's first work should have prompted the respondent to take special care to ensure it did not happen again, and - if the engine condition was of concern - to have informed the applicant of the fact and alerted it to the possibility of future problems.
The fact that the applicant again had to take action to address an oil leak the day after the truck was picked up, on 5 December 2013, is significant as it suggests that the oil leak was either a latent problem which should have been identified and repaired, or was caused by faulty repair work.
Invoice 11015 shows that in addition to replacing the camshaft and bearings, the respondent also worked on the engine oil, oil filters and 'refit front cover timing gear, sump, rocker cover, refit and set rocker gear and set tappets.' The nature of the repairs conducted heightens the likelihood that the oil leak was caused by the work done.
This conclusion is supported by the description of the repairs conducted by Sutton Automotive to rectify the oil leak, which was to 'remove radiator and water pump, remove front timing cover and found gasket incorrectly fitted, replace leaking gaskets...'
This clearly indicates that the oil leak was caused by one or more gaskets fitted by the respondent being incorrectly fitted.
The Tribunal therefore concludes that the respondent's second repair work was defective, and that it failed to provide the services with due care and skill.
The respondent questioned whether it could be held responsible as the applicant removed the truck from its premises before the truck was given a final test drive to ensure it was in working condition.
However, the respondent informed the applicant that the repairs were complete prior to the truck being collected and Invoice 11015 being issued; this should have included the test drive. Further, the respondent had until 5pm that afternoon to conduct the test drive and failed to do so. This also constitutes a failure to provide services with care for which it can be held responsible under the ACL.
Guarantee of Fitness for a Particular Purpose
Section 61(1) guarantees that the services, and any product resulting from the services, will be reasonably fit for a particular purpose if:
(a) a person (the supplier) supplies, in trade or commerce, services to a consumer; and
(b) the consumer, expressly or by implication, makes known to the supplier any particular purpose for which the services are being acquired by the consumer.
The applicant relies upon the truck to conduct its transportation business. It was therefore imperative that the truck be repaired and returned promptly and in working order.
The applicant informed the respondent of this in numerous communications.
The respondent knew this: both parties' submissions indicate that the applicant told the respondent that it needed to get the truck working again as soon as possible as its business was struggling without the truck.
Given that both repairs were inadequate or defective and related problems arose immediately after each repair, the respondent cannot be said to have repaired the truck so that it was fit to be driven and conduct a transportation business on either occasion. The respondent's actions were therefore not consistent with the guarantee in section 61.
Guarantee of Reasonable Time for Supply
Section 62 guarantees that services supplied to a consumer will be supplied within a reasonable time if the time within which the services are to be supplied:
(i) is not fixed by the contract for the supply of the services; or
(ii) is not to be determined in a manner agreed to by the consumer and supplier.
What is 'reasonable' depends on the nature of the services and any other factors influencing time taken, such as whether the fault is intermittent, or delivery time for spare parts.
Although the respondent estimated that the first repairs would take a fortnight, there was no fixed timeframe. The cost estimate for the second repairs did not indicate a timeframe, although the respondent noted that most parts would be sourced from Japan so a delay of at least 10-14 days was to be expected.
The main issue in relation to the repairs is that each took approximately two months to complete. Two further issues arise in the context of the original repairs. The first issue is whether the 14 day delay while parts were sourced from Japan is reasonable. The second is whether the amount of labour, particularly that taken to repair the fuel system, was excessive or even necessary. These issues will be dealt with in turn.
First Repairs
The truck was at the respondent's workshop from 27 July 2013 to 23 September 2013, a period of approximately two months.
The key facts are as follows: the truck arrived at the respondent's workshop by 27 July 2013; the applicant was invoiced for parts on 5 August 2013 and paid in full on 16 August 2013. After receiving payment in full, the respondent claims to have contacted the supplier on the next business day, 20 August 2013, and to have been informed that not all parts were available and there would be 14 days delay while some parts were sourced from Japan. All parts arrived by 3 September 2013, however the parties' submissions indicate that the respondent did not start work on the truck until 12 September 2013. Once the repair work was actually started, the respondent discovered further problems, which resulted in a further extension of costs and time. The repairs were completed seven business days later, on 23 September 2013.
The applicant states that the respondent originally said that the repairs would take two weeks. It is unclear whether this estimate was for the total time likely to be taken, or for the time needed once parts had arrived. In either case, the time taken far exceeds that estimated.
The applicant claims the delays were primarily caused by the respondent only ordering parts after receiving payment of invoices for those parts from the applicant. This resulted in three weeks of delays.
The respondent contends that the applicant's failure to promptly pay for the parts caused the delays as opportunities to source parts locally were missed, meaning further delays ensued while the parts were shipped from overseas.
There is disagreement between the parties as to the arrangements for ordering and payment for parts.
The respondent claims that both parties agreed that the applicant would pay for parts as they were needed. This is consistent with the applicant asking the respondent if he needed payment for parts on 30 July 2013, and the respondent's confirmation of this and issue of Invoice 10971 for the engine kit on 5 August 2013.
There is also some inconsistency between this assertion and the facts. While the respondent waited for full payment before ordering the engine kit (Invoice 10971, paid by 16 August 2013), the turbo and other parts were all sourced prior to the relevant invoices being issued or paid (Invoices 10975 and 10981). The Tribunal notes that the respondent may have had some parts already in stock. However, given that the applicant knew that a turbo was required, had indicated willingness to pay for parts, and the fact that the truck had been in the workshop for a month already, this is interpreted as the respondent acting to reduce further delays.
This alleged agreement does not seem to have translated into the applicant understanding that parts would not be ordered until full payment had been made. The applicant claims that its offers of early payment were made to facilitate a quick process and as a gesture of good faith, and that 'at no time were we informed that work wouldn't be started until this invoice was paid in full.'
The respondent's practice of (usually) waiting until payment had been made before ordering parts is commercially prudent. It ensures that the business does not suffer financially if a customer fails to pay the final invoice. It also protects the customer, as they are informed of exactly what parts are being used, and therefore have a degree of control over what repairs are being conducted and their cost. This is common commercial practice among motor vehicle repairers.
Nonetheless, this situation should have been clearly explained to the applicant. The respondent had the opportunity to do so on 5 August 2013, when the estimate of time and cost was provided, and in all of the preceding and follow-up contact between the parties which the applicant has described. These includes phone calls and emails in which the applicant asked about payment, informed the respondent of a maximum limit on internet transactions (thus explaining why payments of multiple thousands were made over two days), and voiced concern about the delays.
Setting this omission aside for the moment, the facts indicate that the respondent took six working days to ascertain the problem, itemise the parts needed and issue the invoice, and, having been paid, one day to order the necessary parts from Japan. This is reasonable given that the respondent owns a small business and the applicant was not the only customer.
The respondent states that work did not commence until after all parts had arrived for practical reasons, as it would mean having components disassembled with no means of completion. This also seems reasonable.
However, the fact remains that having received all of the parts by 3 September 2013, the respondent took 15 business days to have the truck ready to be picked up on 23 September 2013. The respondent explained this length of time as having discovered additional engine problems upon further investigation of the truck on 12 September 2013 - two days prior to the date initially set for the truck to be picked up.
This indicates that the respondent delayed to commence work on the truck for a week after receiving the parts, and then took a further seven business days to address the problems. Given the amount of time which had already been lost, and the applicant's pressing need to recover the vehicle - a fact known to the respondent - it seems unreasonable for the respondent to have delayed to commence work for this amount of time. This is particularly so as the respondent knew the date on which the parts would arrive by, and so could have scheduled the truck repairs to occur accordingly.
Therefore, even if the Tribunal accepts the respondent's assertion that the parties agreed that parts would not be ordered until paid for in full, the respondent still did not undertake the repairs within a reasonable time.
First Repairs: Individual Issues
The 14 days estimated by the respondent as the delivery time for goods sourced from Japan is standard, according to both parties' understanding and that of Mr Wallace.
The applicant paid Invoice 10971, for the engine kit including pistons and rings, in full by 16 August 2013 (a Friday). The respondent contacted the supplier on 20 August 2013; the parts were ordered them from Japan on 21 August 2013, and arrived on 3 September 2013. This is nine business days, or 13 days in total.
This constitutes 10 business days from the date of payment, and 13 days in total (comprising nine business days) from the day the parts were ordered. This is reasonable.
The respondent not working on the truck during this time has been addressed above and found to be reasonable.
The last issue in relation to the original repairs is whether the time taken to repair the fuel system was excessive. The respondent billed the applicant for 14 hours labour to repair the fuel system. In itemised Invoice 10981, the length of time taken was explained as being due to the discovery that the fuel delivery time was incorrect. This necessitated removing the radiator front cover and checking the pump timing.
The Tribunal also notes that the hours of labour were almost double that estimated by the respondent - 63 hours rather than 35 hours.
Mr Wallace estimates that an in-chassis engine rebuild would take 35 - 40 hours, while an out-of-chassis rebuild would take 60 - 65 hours of labour.
The respondent billed the applicant for 38 hours to rebuild the engine, and a further 23 hours of labour was attributable to encountering and repairing unexpected engine problems, namely the fuel system and seized sleeves.
Whether the work is interpreted as an in-chassis rebuild with additional work, or an out-of-chassis rebuild comprising all work (Mr Wallace's interpretation), the respondent has completed the work within the times estimated by Mr Wallace.
The additional work was necessary to attempt to have the truck working properly. In the absence of expert evidence as to the likely hours of work needed to address the timing issue and repair the fuel system, the Tribunal finds the amount of labour for which the applicant was invoiced to be reasonable.
Second Repairs
The applicant also claims that the second repairs took an unreasonable amount of time due to the respondent's disorganisation.
The applicant's truck was at the respondent's workshop from 15 October 2013 to 4 December 2013, a period of five weeks.
The respondent ascertained the problem and identified what parts needed repair or replacement by 21 October 2013. The applicant undertook to supply most of the necessary parts in the interests of economy.
It took 17 business days, until 6 November 2013, for the applicant to supply the respondent with the parts required. Due to miscommunication between the parties the parts provided were inadequate; a further delay of 13 business days ensued while the applicant sourced cam bearings. These were supplied to the respondent on 25 November 2013; on 26 November 2013 the respondent ordered new cam bearings as those provided by the applicant did not fit.
The respondent carried out what work was possible without the cam bearings while he waited for these to be supplied; this is reasonable. The applicant has paid for this work (Invoice 11008).
Having received the cam bearings, the respondent took one day to install them and discover they did not fit, and to order replacements. It took 6 business days for the respondent to receive the replacements from WA and install them. This is reasonable given the postage time and, presumably, the respondent's obligations to other customers.
The Tribunal finds that in relation to the second repairs, the delays were attributable to the sourcing of parts by the applicant, and that the respondent acted as promptly as possible. There is no breach of section 62.
Summary
The respondent failed to meet the guarantees in sections 60, 61 and 62 in relation to the original repairs, and those in sections 60 and 61 when undertaking the second repairs. This entitles the applicant to seek a refund, and compensation for related, foreseeable losses. The remedies sought and granted are discussed in the 'Service Warranty' and 'Findings' sections below.
OTHER ISSUES
Service Warranty
Both the applicant and Mr Wallace assert that the second repairs should have been carried out under warranty, at no cost to the applicant.
Mr Wallace is of the opinion that 'every repair after the initial rebuild should be considered a redo and consequently should not have been charged to the customer.'
The respondent has not given any details about the services warranty he provides to the applicant or the Tribunal other than to assert that it is in accordance with legal requirements. The Tribunal takes this to mean that at minimum it is compliant with the ACL.
The ACL requires warranties against defects in goods or services to include the following text:
"Our goods come with guarantees that cannot be excluded under the Australian Consumer Law. You are entitled to a replacement or refund for a major failure and for compensation for any other reasonably foreseeable loss or damage. You are also entitled to have the goods repaired or replaced if the goods fail to be of acceptable quality and the failure does not amount to a major failure. "
The provisions of section 267 are also relevant.
This means that, for a major failure by a supplier to abide by the ACL guarantees, the consumer is entitled to a replacement or refund. If the failure does not amount to a major failure, the supplier can choose between repairing the problem free of charge and within a reasonable time, or offering the consumer a refund. If the supplier refuses or takes too long, the consumer is then entitled to a refund and choice of alternate repairer. The consumer is also entitled to compensation for any other reasonably foreseeable loss or damage resulting from the failure.
In relation to the first repairs, the Tribunal has found that the respondent failed to satisfy the ACL guarantees to provide services with due care and skill, which were fit for a particular purpose, within a reasonable time.
The second repairs should therefore have been conducted free of charge, effectively under warranty.
The respondent refused to conduct the second repairs free of charge, and disclaims responsibility for costs relating to problems arising from the defective nature of the second repairs.
In light of this, and the quality of work on both occasions, the applicant has stated that it has lost confidence in the respondent as a repairer, has chosen another repairer and seeks a refund for all monies paid for the second repairs.
In the Tribunal's view this position is reasonable.
The second break down was a reasonably foreseeable consequence of the inadequacy of the first repairs. The applicant also suffered financial losses during and after the second repairs that are attributable to the defective nature of the respondent's work.
The applicant's claim to recover from the respondent the value of hiring replacement vehicles, purchasing parts to address the oil leak, the repairs conducted by Sutton Automotive and the fee to remove the defect notice are therefore upheld.
In relation to the cost of repairs by Sutton Automotive, the Tribunal notes that the work carried out included a service for which the respondent argues it should not be charged. As the cost of the service is inseparable from the charges for the repairs carried out to fix the respondent's work, and the necessity of conducting a service in light of that defective work, the respondent is to pay the entire amount charged by Sutton Automotive.
The exact details of these figures are set out in the 'Findings' section.
Excessive Costs
The applicant also claims that the respondent overcharged them for the repairs. The following issues were raised:
(a) The disparity in cost between the estimated cost and the final cost of the first repair;
(b) The cost of repairing the engine kit in the first repairs;
(c) The disparity in cost between the estimated cost and the final cost of the second repair, including whether the applicant was charged for parts they supplied; and
(d) Whether the applicant should be repaid the cost of towing the truck to the workshop for the second repairs.
The respondent estimated the first repairs would cost $3,150.00. This sum includes GST and an estimated 35 hours of labour. The final cost of the first repairs was $14,162.89, including 63 hours of labour charged at $90.00 per hour (Invoices 10971, 10975, and 10981).
The disparity between estimate and final cost for the first repairs is attributable to the discovery and repair of additional problems. There is minimal difference between the estimated and actual cost of individual parts; the increase in price relates primarily to additional 23 hours of labour required to fix the seized liner and timing problem. This was discussed above and found to be justified. The final cost also included the cost of re-gassing the air conditioning, which was foreseen but not included in the estimate. In each case the applicant was informed of the repairs necessary and consented to their being carried out.
There is some question as to whether the price of the engine kit was excessive. Invoice 10971, paid in full by the applicant on 16 August 2013, shows the engine kit used by the respondent to have a unit price of $3,392.00. Mr Wallace asserts that his enquiries revealed a UD engine rebuild kit to be available for $2,269.79 from a dealer. This is a significant difference in price.
However, no quote or other evidence has been provided to substantiate Mr Wallace's claim. There is also a possibility that the availability and value of such items may vary, and that eight months passed between the respondent sourcing the kit and Mr Wallace conducting his enquiries.
In light of this, the overall price for the first repairs - while unfortunately exceeding the estimate - is justifiable.
Whether or not the second repairs were overpriced is a redundant issue given that the Tribunal has already determined that the applicant is to be refunded all monies paid for them. However, in the interests of closure the Tribunal notes the following four points which suggest that the costs were reasonable.
The total sum charged by the respondent is less than what was estimated, mostly due to the applicant sourcing the parts for $488.90 less than the estimated cost.
Comparison of the receipts and invoices provided to the Tribunal indicate that the respondent did not charge the applicant for parts it supplied. The respondent charged the applicant for labour, and those parts which the respondent supplied (including cam bearings to replace the incorrectly fitting ones supplied by the applicant).
The increase in labour costs from what was estimated was satisfactorily explained by the respondent as being due to encountering unexpected problems which required extra labour to solve. Without the time for towing and the additional labour to release the trapped cam and replace the incorrectly sized bearings, the hours of labour would have matched those estimated. There is no independent informed evidence that suggests the labour was unnecessary or deliberately slow.
Towing is not necessarily covered under suppliers' warranty. However, given that the second break-down was a reasonably foreseeably consequence of the respondent not carrying out the first repairs with due care and skill, the towing charge is a related loss which the applicant is entitled to recover. The cost of towing the truck is to be refunded in full as part of the repayment of Invoice 11008.
Counterclaim
The respondent entered a counterclaim for the outstanding $2,520.49, or possession of the vehicle until paid in full, pursuant to the repairer's lien.
However, the respondent failed to meet ACL consumer guarantees in relation to both repair jobs it carried out on the applicant's truck. Therefore, the applicant's claim for relief from payment of Invoice 11015 is upheld for the reasons stated above, and the counterclaim is dismissed.
For the respondent's future reference, the Tribunal notes that the repairer's lien no longer arises from section 3B(2) of the Registration of Interest in Goods Act 1986 (NSW), as this Act was repealed as part of a national scheme regulating interests over personal property established by the Personal Property Securities Act 2009 (Cth) (PPSA).
Despite this, the repairer's right to retain possession of the repaired goods until paid essentially continues, subject to some conditions, because the PPSA does not apply to interests arising from the operation of the general law (section 8(1)(c)). Although its foundation in general law means a repairer's lien is not usually a registrable interest under the PPSA, in some circumstances a repairer may have a registrable interest in the vehicle, secured through possession or registration of the interest.
The Tribunal notes that the respondent registered an interest in the applicant's vehicle on 6 December 2013, without the applicant's consent or knowledge.
Section 157(1) of the PPSA obliges the respondent to inform the owner of the property over which the interest is claimed (i.e. the applicant) as soon as practicable after the interest is registered. Notification is only unnecessary where the property is commercial property, and the person has waived their right to be notified, in writing. The truck is described as commercial property, but the applicant was not informed of the registration and did not waive its right to be notified.
Contravention of section 157(1) constitutes an act or practice involving interference with the privacy of the individual for the purposes of section 13 of the Privacy Act 1988. Serious or repeated failures to do so will attract statutory penalties.
Given the respondent's ignorance of the current law concerning the repairer's lien, and the fact that the interest has not been enforced, the respondent's failure to notify the applicant that it registered a security interest over the vehicle is not a serious breach on this occasion.
FINDINGS
In relation to the first repairs, the Tribunal finds that the respondent failed to satisfy the consumer guarantees to provide services with due care and skill, which are fit for a particular purpose, and within a reasonable time.
In relation to the second repairs, the respondent also failed to provide services which are fit for a particular purpose, with due care and skill.
The respondent's failings, and refusal to undertake repairs free of charge, entitle the applicant to seek a refund and compensation for related, foreseeable costs.
It does not follow from these findings that the applicant is entitled to a free repair of its vehicle. The original damage to the applicant's vehicle was not caused by the respondent and so any final outcome in which the applicant's vehicle is repaired is a final cost for the applicant. The applicant is only entitled to recover from the respondent those costs that the applicant incurred in remedying the defective repairs carried out by the respondent after allowing for the applicant's duty to pay the respondent's reasonable accounts.
The applicant has not sought to recover any monies paid for the first repairs other than $1,386.00 from Invoice 10985. This payment was for 14 hours of labour needed to address a timing issue and to repair the fuel system. The problems were encountered in the course of conducting the agreed upon repairs, and were necessary to get the truck in working condition. The evidence before the Tribunal does not indicate that the time taken was excessive, or that the respondent performed this particular work without due care and skill. This aspect of the applicant's claim is therefore denied.
The applicant's claims to recover all monies paid for the second repairs, and for relief from paying Invoice 11015 are granted. The respondent is to repay the applicant $3,022.45. This sum consists of $1,083.50 paid for Invoice 11008 and $1,938.95 paid for parts supplied by the applicant for the repairs. The applicant is not entitled to recover the value of Invoice 11015, $2,520.49, as this invoice was not paid.
The applicant is also entitled to financial compensation from the respondent for losses associated with the respondent's failure to meet the guarantees. The Tribunal calculates the sum owed to be $3,687.94. This figure consists of:
(1) The cost of hiring replacement vehicles during the repairs: $2,112.55;
(2) The cost of purchasing parts to address the oil leak: $193.09;
(3) The cost of the repairs conducted by Sutton Automotive: $1,364.90;
(4) The fee to remove the defect notice: $17.40.
The total sum owed by the respondent to the applicant as reimbursement for the second repairs and compensation for associated costs associated with its failure to meet the ACL guarantees is $6,710.39.
The respondent is to make the following parts available for the applicant to collect by 31 July 2014: all damaged parts which were removed from the engine, and any remaining parts supplied by the applicant (including the cam bearings which did not fit).
The respondent must also remove the security interest he registered over the applicant's truck from the Personal Property Securities Register. The respondent is to provide the applicant with written proof of this by 31 July 2013.
A Anforth
General Member
Civil and Administrative Tribunal of New South Wales
30 July 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: 11 September 2014
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