Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Hall v Scone Diesel Pty Ltd [2023] NSWCATCD 52 Hearing dates: 9 March 2023 Date of orders: 06 April 2023 Decision date: 06 April 2023 Jurisdiction: Consumer and Commercial Division Before: J Drennan, General Member Decision: (1) Scone Diesel Pty Ltd is to pay the applicant $13328.00 on or before 25 April 2023. (2) The application is otherwise dismissed. Catchwords: CONSUMER LAW — Consumer guarantees — Supply of services — Guarantee as to due care and skill Legislation Cited: Competition And Consumer Act 2010 (ACL) Motor Dealer and Repairers Act 2013 (NSW) Cases Cited: NIL Texts Cited: NIL Category: Principal judgment Parties: Steven Hall (Applicant) Scone Diesel Pty Ltd (Respondent) Representation: Applicant: self-represented. Respondent: Mr Le Poer Trench File Number(s): MV 22/35537 Publication restriction: Unrestricted REASONS FOR DECISION BACKGROUND 1. This is an application by Steven Hall, who alleges that Scone Diesel Pty Ltd provided services to his diesel vehicle without employing due care and skill resulting in the engine failing and having to be repaired. The amount he is seeking is the cost to diagnose and repair the vehicle which involves another new engine and install. The total amount is $14747.00. In his application Mr Hall speaks about other issues with the vehicle. He provides a list of what he is seeking on page 5. It is about the engine and not any paint or other damages. He did not speak about any of the other claims at the hearing. His claim does however include an application for costs. 2. The respondent rejects the claims and asserts that he did the repairs in the manner that the applicant asked him to perform to keep the cost of the install to a minimum. 3. It is agreed that the method undertaken to install the engine is not good practice. JURISDICTION 1. I find that I have jurisdiction to hear this matter. It is brought in the General Division. The services provided by Scone Diesel were performed on or about 19 October 2021. The claim is brought within time, the application being made on 8 August 2022. The claim falls within the monetary jurisdictional limit under the Competition And Consumer Act 2010 - Schedule 2 -The Australian Consumer Law ACL (Australian Consumer Law). THE EVIDENCE 1. Mr Hall provides an initial invoice diagnostic from Upper Hunter Automotive. A report on the engine that had been supplied by GEM Engines to Mr Hall dated 11 January 2023. An experts report dated 8 February 2023 from Fenoru Pty Ltd. 2. Scone Diesel provide a timeline of events, Letter, a response to the claim, a witness statement and invoices. AGREED FACTS 1. The works were performed in October 2021. There is $2700 owing on the works, for which the respondent is not pursuing. 2. The applicant told the respondent to use existing associated parts including the old injectors, turbos and fuel pumps. 3. Scone Diesel did not have the associated parts noted above externally serviced. 4. The engine that Mr Hall provided from GEM Engines has since failed – due to the use of faulty/un-serviced associated parts. 5. Scone Diesel Pty Ltd will not sign the warranty documents (for the engine they installed) because Le Poer Trench said that, as Mr Hall demanded that he use all existing associated parts he cannot in good faith sign that document. 6. The GEM Warranty says 'it is essential that the ancillary components are in first class working condition and maintained. Faulty ancillary components can result in expensive engine failures not covered by warranty.' Th Applicants case (summarised) 1. Mr Hall told the respondent to use existing associated parts including the old injectors, turbo's and fuel pumps. Mr Hall said he expected that these parts would be serviced prior to being re-used. Mr Hall provides the Warranty information that accompanied the engine that was supplied by GEM Engines (see above). 2. Mr Hall provides a report from GEM Engines and an independent experts report about the failure to the engine after the work by Scone Diesel. Respondents Case (summarised) 1. Mr Le Poer Trench for the respondent said that they were instructed to use the existing associated parts and that the applicant did not want to pay for new ones or to have them externally serviced. 2. The engine worked for a period of time after the installation. It came back to the respondent on 31 January 2022 for a service and there were no leaks noted. Scone Diesel did not see the vehicle after that date. CONSIDERATION AND FINDINGS 1. This claim relates to whether the respondent performed the work with due care and skill. I have considered all the evidence of both parties including their submissions at the hearing. There is no dispute that the applicant wanted the associated items re-used. He expected them to be serviced. Scone Diesel said they cleaned them up and re-used them against their own better judgement. In their documents they say that they serviced these parts. An expert has not explained to me as to what the difference is between cleaning and adding new gaskets and 'servicing'. 2. Mr Le Poer Trench representing Scone Diesel said during the hearing that Mr Hall did not want to do any of the external (costly) servicing of the associated parts and I find that this is supported by the evidence of Mr Shannon Johnson in the respondents evidence bundle. Mr Le Poer Trench said that all these parts were cleaned at his shop with all new gaskets installed according to regulations. He does not provide those regulations to me. 3. Mr Le Poer Trench said to me at the hearing "I have not installed it correctly, I won't fill out the warranty card because it's not done properly" and "he should have put new [associated] parts in". 4. I find that Scone Diesel are correct- the vehicle was not returned to them after leaks occurred. 5. Section 268 of the ACL provides the action to be taken when a consumer feels there has been a failure to comply with a guarantee that is a major failure. There is no requirement under Section 268 compelling a consumer to return the vehicle to the supplier of the services. 6. I find that there has been a major failure of the guarantee in sections 60 and 61. The engine has been installed in a manner that the respondent said is not correct. The services would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure. I find that the services are substantially unfit for a purpose for which services of the same kind are commonly supplied and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose. 7. I find that the services, and product resulting from the services, are not of such a nature, or quality, state or condition, that they might reasonably be expected to achieve a result desired by the consumer that was made known to the supplier. In simpler terms, the consumer did not say to Scone Diesel 'I know you are using old parts because I can't afford new ones and its ok it the engine fails because of this'. 8. I find that Mr Hall relied on the expertise of the respondent and had an expectation that the servicing they would do on the accessory parts would result in a service that met the consumer guarantee. I am not convinced that the passage of time between when the work was completed and the engine eventually failed has any bearing on the outcome because there is no expert evidence provided by Scone Diesel supporting this contention. 9. Section 60 of the ACL states the following:- '60 Guarantee as to due care and skill 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. 1. I find that the guarantee in Section 60 is breached. I find that Scone Diesel have performed works knowing that the works were not performed to industry standard. I accept the applicant's evidence about the time that it took to fail (from October 2021 to June 2022 when leaks were found). I note that Scone Diesel say that it is an old car and an old engine, that the engine ran for a significant time - and this is evidence that the engine was fit for purpose. 2. I cannot however ignore the evidence of Scone Diesel who said that the work "was not done properly". 3. Section 61 of the ACL states:- 61 Guarantees as to fitness for a particular purpose etc. (1) 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; there is a guarantee that the services, and any product resulting from the services, will be reasonably fit for that purpose. (2) If: (a) a person (the supplier ) supplies, in trade or commerce, services to a consumer; and (b) the consumer makes known, expressly or by implication, to: (i) the supplier; or (ii) a person by whom any prior negotiations or arrangements in relation to the acquisition of the services were conducted or made; the result that the consumer wishes the services to achieve; there is a guarantee that the services, and any product resulting from the services, will be of such a nature, and quality, state or condition, that they might reasonably be expected to achieve that result. (3) This section does not apply if the circumstances show that the consumer did not rely on, or that it was unreasonable for the consumer to rely on, the skill or judgment of the supplier. 1. It is not disputed that the result that Mr Hall wanted to achieve was a working engine. Section 61, sub-section 3 does not in my view lend itself to the circumstance where the trader, performs requested works, knowing that they are not being done correctly. I take the view that it was reasonable for Mr Hall to rely on the skill and judgement of Scone Diesel. They should have told him that the associated parts must be externally serviced and if not properly serviced that they would not warrant the work. Had they put such a clause in writing to the consumer I believe that that may have enlivened sub section 3 above (I cannot be certain about this though). 2. The cost to replace this engine, installed contrary to the ACL guarantees is the cost of a new GEM engine $5865.00 plus the cost to install $7463.00 which is a total of $13328.00. COSTS 1. Mr Hall seeks his costs to seek legal advice $192.50, and the cost of his two reports, $240 and $984. 2. Section 60 of the Civil & Administrative Tribunal Act 2013 states:- 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. 1. I find that neither party has conducted the proceedings in a way that unnecessarily disadvantaged another party. I find that neither party has been responsible for prolonging unreasonably the time taken to complete the proceedings. The matter has been heard on 9 March 2023. The application was made on 8 August 2022. There were 2 adjournment requests that benefited the applicant who is now seeking costs. I find that there is strength to the claim by Mr Hall and have made orders accordingly. I find that the nature of the proceedings are not complex, this is a simple consumer claim brought within time and in the correct jurisdiction. I find that the proceedings were not frivolous or vexatious or otherwise misconceived or lacking in substance. I find that neither party has refused or failed to comply with the duty imposed by section 36(3). 2. I cannot find any special circumstances warranting an award for costs. Orders 1. Scone Diesel Pty Ltd is to pay the applicant $13328.00 on or before 25 April 2023. 2. The application is otherwise dismissed. ********** 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 July 2023