Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Nedanovski v Italian Automobiles Group Pty Ltd [2021] NSWCATAP 365 Hearing dates: 4 November 2021 Date of orders: 17 November 2021 Decision date: 17 November 2021 Jurisdiction: Appeal Panel Before: The Hon F Marks, Principal Member K Ransome, Senior Member Decision: (1) To the extent that leave to appeal is necessary, leave to appeal is granted. (2) The appeal is upheld in part. (3) The order made by the Tribunal on 30 July 2021 is set aside, and in lieu the respondent is to pay the appellant the amount of $6079.70 within 7 days. Catchwords: APPEAL – claim for compensation based upon expert report – expert report poorly expressed – held that Member misunderstood the report – appeal upheld –amount of compensation increased COSTS – claim for recovery of cost of expert report as costs refused – the necessity to obtain an expert report does not constitute special circumstances Legislation Cited: Civil and Administrative Tribunal Act 2013 s 60 Category: Principal judgment Parties: Gjorgji Nedanovski (appellant) Italian Automobiles Group Pty Ltd Representation: Appellant self-represented J Procopio, service manager (respondent) File Number(s): 2021/00245377 Publication restriction: Nil Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 30 July, 2021 Before: J Searson, General Member File Number(s): MV 20/50786 Reasons for decision Background 1. The appellant, Gjorgji Nedanovski, brought a motor vehicle consumer claim application in this Tribunal in which he sought the payment of compensation of $7355.70 from the respondent, LDV Parramatta trading as Italian Automobiles Group Pty Ltd, for faulty workmanship carried out on a motor vehicle owned by him. 2. The proceedings came on for hearing before a Member of this Tribunal on 13 May 2021 who delivered reasons for decision on 30 July 2021 in which she upheld the appellant's claim but limited the amount of compensation to $286. The appellant has sought leave to appeal and to appeal from this decision. The Member also declined to award costs to the appellant to compensate him for the cost of an expert report used in the proceedings. The appellant has also appealed against this adverse costs order. 3. Both the appellant and a representative of the respondent gave oral evidence before the Member. In her reasons for decision the Member referred to a report of J & P Automotive repairs tendered by the appellant which she declined to rely on because it did not comply with the Expert Code of Conduct, nor did it set out the qualifications of the author. However, the Member did accept the expert opinion relied upon by the appellant of Car Solutions Motor Vehicle Consultants. The member noted that no expert report or report of any kind had been provided by the respondent. The factual background 1. Directions had been issued to the parties by a Deputy President of this Tribunal to facilitate the preparation of the proceedings for the hearing of the appeal. Both parties were required to provide a sound recording or transcript of the hearing at first instance if what occurred at that hearing was being relied upon for the purpose of the appeal. The appellant informed us that he had endeavoured to contact the Registry on many occasions to secure a recording of the hearing below and was eventually informed that it was being produced in Newcastle but for "technical reasons" a recording could not be made available to him. The respondent admitted that it had not attempted to obtain a recording or provide a transcript. Accordingly, our understanding of the factual background is limited to what is contained in the reasons for decision of the Member which are under appeal, and which we will accept unless some appeal point has been raised with respect to them, together with documentary evidence filed by the parties in the proceedings below. 2. The underlying factual circumstances are set out in the reasons for decision of the Member. The appellant owned a 2015 LDV vehicle. The manufacturer's warranty expired on or about 16 May 2019. The appellant encountered difficulty with the fuel injector system of the vehicle and took it to a repairer who was unable to fix it. He then took it to an auto electrician who suggested that the vehicle be taken to an LDV dealership for further diagnosis. It was in these circumstances that the appellant approached the respondent. 3. In her reasons the Member noted the allegations of the appellant that the respondent had disassembled the engine when there was no reason to do so because he had approached the respondent to resolve an electrical issue. The appellant complained that when the engine was reinstalled the respondent had used parts which had not originally belonged to the vehicle including the timing belt, timing belt cover, timing belt pulley and timing belt tensioner. The appellant complained that as a result of the work that was carried out by the respondent it was necessary for him to replace the entire engine. 4. The appellant asserted that he had never authorised the respondent to disassemble the engine, contrary to evidence given on behalf of the respondent. The Member accepted the evidence of the appellant, and there is no appeal from this conclusion. 5. The Member also accepted evidence given on behalf of the appellant that the state of the timing belt on the vehicle prior to it being taken to the respondent for repair was "like new with writings still on that suggests that is matching with the kilometres on the van." 6. The acceptance of this evidence by the Member was corroborated by a report of J & P Automotive Repairs dated 7 October 2020 as to what had occurred on 9 August 2020 when the appellant had brought the LDV vehicle to its workshop. They replaced the fuel pump, and in doing so they were required to loosen the timing belt. They noticed that the timing belt "looked pretty new with the writings still on the top of the belt, which is normal for a van which has travelled only 35,000 km." They also observed that the "tensioner, crankshaft pulley" (were) all pretty much as new…" However, they saw that "there was no electricity to the injectors" and referred the appellant to an auto electrician. 7. A statutory declaration provided by Blaggiche Bonchanovski, auto electrician, sworn 2 December 2020 referred to his inspection of the vehicle the following day, namely 10 August 2020. He was unable to diagnose the problem because he did not possess a diagnostic tool for that vehicle and suggested that the appellant take it to an LDV service repairer. Mr Bonchanovski also said that the timing belt looked like new. 8. The Member accepted evidence that an examination of the engine in the vehicle after it had been returned by the respondent demonstrated that the timing belt, tensioner, crankshaft pulley, rocker arms and timing belt cover were all damaged, and their appearance was inconsistent with the presentation of these parts prior to the vehicle being taken to the respondent for repair. Again, there is no appeal against any of these findings. 9. On this basis the Member concluded that the work carried out by the respondent was "done without due care and skill" and that it was necessary for her to determine "the appropriate remedy." 10. The Member then considered the expert report of Erich Kannen of Car Solutions Motor Vehicle Consultants. In that report the expert set out his observations of the vehicle when he first inspected it. In particular he noted that "the top of the engine appeared very clean, consistent with a well-maintained 36,915-kilometre engine". He then noted that the valve actuators were all broken, the timing belt was frayed "and looked as if it belonged to an engine with much more use than the 36,915 km indicated on the odometer", the timing belt cover showed on the inside abnormal abrasion, the timing belt pulley "looked worn, inconsistent with the vehicle's odometer reading", and the timing belt tensioner "looked old and rusty on the outside." 11. Having noted these matters the expert stated that the engine had suffered catastrophic damage, that timing belts usually last a minimum of 5 years or 140,000 km, timing belts that fail cause catastrophic engine damage similar to the damage sustained by the vehicle, and that the parts returned with the vehicle were inconsistent with a 35,000 km engine/vehicle. 12. The expert then asked himself under the heading "what is not known" whether the parts which he viewed actually belonged to the vehicle (none of them was labelled with the vehicle's identifiers), what caused the catastrophic engine failure, what caused the rocker arms to break and why the engine was partly disassembled when it was presented with an electrical defect. 13. Significantly, the Member seized upon the notation made by the expert that "what is not known" included the cause of the catastrophic engine failure and the cause of the rocker arms to break as demonstrating that the appellant had not made out his case that the lack of due care and skill of the respondent had caused such damage to the appellant's vehicle that the engine had to be replaced. However, in so concluding the Member misunderstood the expert report. Immediately after listing the matters under the rhetorical question "what is not known", the expert proceeded to assume that a defective timing belt had caused the poor fuel delivery and that a slipping or faulty timing belt had caused the rocker arms to break. 14. The expert then noted that there were two defects, the first being the cause of the "engine's fuel starvation", and the second being the cause of the "catastrophic engine damage." He concluded that a slipping timing belt had caused the fuel starvation. He then concluded that the catastrophic engine damage was caused by the engine being operated with a faulty timing belt. He thought that …in order to diagnose the cause of the fuel starvation, the engine may have been started and run with a damaged or slipping timing belt. A failed timing belt causes the valves to open and close at the wrong time. If a valve stays open too long, the valve can be damaged on the upward stroke by the piston. If the piston contacts the valve the valve will be forced up against its "rocker arm" which breaks due to the force of the piston pushing it against the camshaft. The end result is catastrophic and irreparable engine damage. 1. Therefore, the only evidence as to the state of the timing belt and other equipment at the time the catastrophic damage occurred is that they were installed by the respondent who must have replaced the original equipment with old and defective equipment, as was accepted by the Member. 2. As a consequence, the Member should have found that the catastrophic damage to the engine was caused by the manner in which the respondent attempted to carry out its work on the appellant's vehicle. On this basis, the Member having misread and misunderstood the expert report which she had accepted, the conclusion of the Member was erroneous. It follows that the findings of the Member were against the evidence and the weight of the evidence, and the appeal must succeed in terms of the amount of compensation properly payable to the appellant. In so concluding we note that the expert report is poorly expressed and is not easily comprehended on a first reading. We acknowledge that we have had a greater opportunity of considering the contents of the report than was enjoyed by the Member, as well as an opportunity of discussing it between ourselves. Indeed, before us the respondent acknowledged that the cause of the catastrophic engine failure was the faulty timing belt. The respondent sought to argue that it was not responsible for the faulty timing belt. However, there is appeal from the respondent and no challenge to the Member's finding that the faulty timing belt was the responsibility of the respondent. 3. It then becomes necessary to reassess the amount of compensation which should properly be paid by the respondent to the appellant. Prima facie, there is evidence to sustain a finding that the engine was required to be replaced and that the invoice of J P Automotive Repairs of 3 December 2020 in the sum of $6079.70 should be accepted. We note that the appellant was refunded $286 paid by him to the respondent pursuant to the order made by the Member. 4. The only other claim made by the appellant was for a refund of the sum of $660 paid to Car Solutions Motor Vehicle Consultants for the provision of its report. The Member declined to make an order awarding these costs in favour of the appellant. We agree with the Member that this claim falls within the rubric of "costs" governed by the provisions of section 60 of the Civil and Administrative Tribunal Act 2013 which is in the following terms 60 Costs (1) Each party to proceedings in the Tribunal is to pay the party's own costs. (2) The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs. (3) In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following— (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings, (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, (c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law, (d) the nature and complexity of the proceedings, (e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, (f) whether a party has refused or failed to comply with the duty imposed by section 36(3), (g) any other matter that the Tribunal considers relevant. (4) If costs are to be awarded by the Tribunal, the Tribunal may— (a) determine by whom and to what extent costs are to be paid, and (b) order costs to be assessed on the basis set out in the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014) or on any other basis. (5) In this section— costs includes— (a) the costs of, or incidental to, proceedings in the Tribunal, and (b) the costs of, or incidental to, the proceedings giving rise to the application or appeal, as well as the costs of or incidental to the application or appeal. 1. We do not regard the circumstances of these proceedings as constituting "special circumstances." The obtaining of an expert report in proceedings of this kind is an ordinary and usual requirement in order to support a claim for compensation for faulty repairs. It follows that that there is nothing "special" about the necessity to obtain such a report which would support its cost being included in a costs order. The appeal with respect to this matter must fail. Orders 1. We make the following orders 1. To the extent that leave to appeal is necessary, leave to appeal is granted. 2. The appeal is upheld in part 3. The order made by the Tribunal on 30 July 2021 is set aside, and in lieu the respondent is to pay the appellant the amount of $6079.70 within 7 days. .********** 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 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 17 November 2021