Local Court of New South Wales CITATION: La Macchia v Aslan [2006] NSWLC 50 JURISDICTION: Civil PARTIES: David La Macchia Askin Aslan FILE NUMBER: 6206/05 PLACE OF HEARING: Downing Centre Local Court DATE OF DECISION: 12/18/2006 MAGISTRATE: Magistrate H Dillon CATCHWORDS: Contracts - Motor vehicle repairs - Whether defendant breached implied term that works would be carried out with due care and skill - Whether defendant supplied materials that were not fit for the purpose. LEGISLATION CITED: CASES CITED: REPRESENTATION: Mr G. Gemmell (counsel) instructed by Vincent Pelosi Solicitors Mr E. Englebrecht (counsel) ORDERS: Verdict for plaintiff in the sum of $12,409. Interest to be calculated by the Registrar on that sum from 4 June 2004. Costs reserved with parties to have liberty to apply on seven days notice. JUDGMENT 1. In 2003, the plaintiff, Mr David La Macchia, entered a contract with the defendant Mr Aslan, who trades under the name Leading Edge Motorsport, for certain work to be done on his Mazda RX-3 sports car. Mr La Macchia brings this claim because he alleges that the work done on his car was performed poorly by Mr Aslan and because he also asserts that Mr Aslan installed a defective engine and parts in the car thereby breaching his contract with Mr La Macchia. Mr Aslan denies the assertions. Mr La Macchia claims damages in the sum of $21,420. 2. While evidence was taken over four days from a number of witnesses including experts, the issues for determination are reasonably simple. First, when was the agreement reached? Second, what were its terms? Third, did Mr Aslan breach the agreement by failing to carry out the agreed works with due care and skill and by supplying defective parts or failing to install new parts? Fourth, did Mr Aslan supply parts that were not fit for the purpose for which they were supplied? Fifth, for what purpose or purposes did Mr La Macchia have the work done? Finally, did Mr La Macchia suffer a loss as a result of a breach or breaches of contract and, if so, what is the quantum of that loss? 3. Much of the evidence is in conflict, even, unusually, the chronology of events. Issues of credibility are therefore of great significance in the ultimate determination of the issues. The plaintiff, of course, bears the onus of proof on the balance of probabilities. In considering the various issues I have taken into account all the evidence adduced. In the interests of reasonable economy, however, I propose to advert only to the evidence which I regard as having particular significance in determining the issues. When was the agreement formed? 4. Unfortunately, there is not even agreement as to when the contract between the parties was formed. While this question is not critical in determining the essential issues, it goes to questions of the credibility and reliability of the evidence given by each of the parties, especially in relation to the terms of the agreement. 5. According to Mr La Macchia, in October 2002 he obtained a quotation from a firm called 'Rotary Motion' to rebuild and install the engine of his car with a 'turbo set-up' and an intercooler with associated piping. The motor was a Mazda 12A rotary turbo engine. The quotation offered by Rotary Motion was in the sum of $11,096.30. He said that at the time he could not afford the work so he stored the engine at his place of work, his father's workshop in Leichhardt. 6. Mr La Macchia said that in May 2003 Mr Aslan visited his father's workshop and they had conversation about the engine. According to Mr La Macchia, he told Mr Aslan that he had been given a quotation of $11,000 by Rotary Motion but could not afford the work and sought a quotation from Mr Aslan. 7. He said that in June 2003 Mr Aslan told him that he could not rebuild the engine but that he could install another recently rebuilt engine from a Holden Gemini and do all the other work requested by Mr La Macchia – the installation of an intercooler and a larger turbo – for $12,000 within six weeks. Mr La Macchia said that Mr Aslan had demanded a deposit of $10,000 so that he could buy parts and commence the work. 8. Mr La Macchia tendered a copy of the Rotary Motion quotation dated 23 October 2002 and an invoice or statement from Leading Edge dated 13 June 2003 showing that Leading Edge had taken a deposit for the engine job with a notation "Balance to be reported as job proceeds". He also tendered a copy of an invoice from Iron Cove Towing dated 5 May 2003 which records that a Mazda without registration was towed from Leichhardt to Leading Edge at Crystal St, Petersham on that day for a sum of $55 inclusive of GST. 9. His father, Mr Dominic La Macchia, gave evidence that in May 2003 he had been told by the plaintiff that Mr Aslan had examined the engine and offered another one and that the quotation for the work was $12,000. 10. Mr Aslan's evidence was that Mr La Macchia had visited his workshop first in mid-2003 in company with a man he knew as Claude for whom he had done some work. (This was Mr Claudio Nicoletti.) He said that Mr La Macchia had told him that the car was in pieces at Rotary Motion with whom he was not happy. According to Mr Aslan, after a discussion with Mr La Macchia concerning the car, he had told Mr La Macchia that he could not offer an estimate on the job until he had seen the car. He said that Mr La Macchia had then requested that he accept a deposit of $10,000 for the job "so I don't spend it". 11. He said that the car did not arrive at his workshop until it was towed there on 28 August 2003 and that this was the first time he had seen it. While he sought to subpoena the relevant records from the towing company, none were produced. This is merely negative evidence. No witness was called from Iron Cove Towing to prove that the vehicle was not towed on 5 May 2003 as asserted by Mr La Macchia. At the best the evidence shows that the towing company did not produce any record. Absent an explanation this cannot be proof that the invoice produced by Mr La Macchia was fabricated. (It should be said that it was not expressly put to Mr La Macchia that he had done so but the implication seemed to lie behind the subpoena.) It may be that Iron Cove Towing has destroyed or lost its 2003 records. No inference favourable to the defendant or unfavourable to the plaintiff can be drawn from this essentially nebulous evidence. Certainly it does not contradict the evidence presented by Mr La Macchia. 12. Two witnesses support Mr Aslan's account that the car was towed to the workshop in late August, Mr Essam Beydoun, who was then a partner of Mr Aslan, and Mr Khoder Choucair, who had started his apprenticeship at Leading Edge a couple of weeks beforehand. 13. Each of the witnesses who gave evidence were recounting matters that took place about three years before they gave evidence. That in itself raises the possibility that memories may have faded and been reconstructed over time. None of the corroborating witnesses is independent of the party by whom he was called. Messrs Beydoun and Choucair worked with Mr Aslan for some time during the period that this dispute took place before it came to court and there have obviously been plentiful opportunities for all of them to discuss the case, the facts and the issues. 14. Mr Choucair stated that he had started his apprenticeship shortly before the car arrived at Leading Edge. It consequently seems likely that the arrival of the car on which he then worked would be more memorable for him than it might be for veterans in the trade such as Messrs Aslan and Beydoun. On the other hand, given Mr La Macchia's keenness to have his car built, as well as his invoice from Iron Cove Towing, he might well have an accurate recollection of the chronology. 15. Further, it seems unlikely that Mr Aslan would have taken the job on before he had seen the car, yet there is no doubt that a deposit was taken in June with a further payment in September 2003. Those facts support Mr La Macchia's account of when the contract was formed. In my view, it is improbable that Mr La Macchia would have handed over $10,000 to Mr Aslan who had not offered him a quotation and then waited a further two months before taking the car to Mr Aslan's workshop. Moreover, the invoice or statement of June 2003 is in relatively precise terms, including an engine number, suggesting that Mr Aslan had had an opportunity to assess the vehicle, at least in a preliminary fashion, by that time. The invoice from Iron Cove Towing seems conclusive on its face that the car was towed to Leading Edge in May 2003. 16. Although there is room for argument about this, it seems more probable than not that Mr Aslan saw the car in May or June 2003 and the contract was formed in June 2003 not in September as asserted by Mr Aslan. I do not infer from this that Mr Aslan or his witnesses have been deliberately untruthful in their evidence: it seems more likely that they have, because of the passage of time, reconstructed it in this respect. What were the terms of the agreement? 17. I have outlined above Mr La Macchia's account of the agreed terms of the contract but the evidence relating to the terms agreed by the parties must be more fully examined. 18. Mr La Macchia said that when they first spoke in May 2003 about the work to be done he had told Mr Aslan that he wanted the engine rebuilt, an intercooler added and a larger turbocharger installed and he referred to the quotation he had received from Rotary Motion, asking whether Mr Aslan could do the job for less. He said that Mr Aslan had told him he could "work to your budget" but would look at the engine at his workshop and give Mr La Macchia a quotation. He said that on 11 June Mr Aslan telephoned and told him that he could not rebuild the engine but could supply another rebuilt engine and that the job would cost about $12,000 all told. Mr La Macchia said that the discussions had continued at Mr Aslan's workshop and that an agreement had been reached in those terms. 19. He said that Mr Aslan told him that he could supply the rebuilt engine without a supercharger for $6000 and that the job requested by Mr La Macchia would cost $12,000 and be completed within six weeks. He then asked for the deposit already discussed. Mr La Macchia's evidence on the topic of the engine is somewhat confusing. In his statement of 16 February 2006, which was tendered in evidence Exhibit 1 at [12]-[14]., he said that he had accepted those terms. Later in his statement, however, he apparently contradicted himself by saying that the agreement had been that "the engine wasn't to be second-hand but rebuilt/reconditioned with new parts." Exhibit 1 at [48]-[50]. It is not clear precisely what Mr La Macchia intended to convey in this evidence but it is probably of little ultimate significance for reasons to which I will come. 20. In relation to the supply of the engine, Mr Aslan's evidence was different from Mr La Macchia's but broadly consistent with his first version. He said that he had told Mr La Macchia that the engine in Mr La Macchia's car was in very bad condition and that Mr La Macchia had then requested the supply of a second-hand engine. It is clear that a second-hand engine was supplied to replace Mr La Macchia's original. 21. Mr La Macchia said that when he had received the receipt for the deposit he had queried the notation reading "balance to be reported as job proceeds" and had told Mr Aslan that he thought they had agreed on a price. Mr La Macchia said that Mr Aslan's reply had been, "There may be minor items I haven't fully considered. So there may be a slight adjustment to the price." 22. Mr La Macchia gave evidence that some time after he had accepted the quotation of $12,000 from Mr Aslan, he had been told by Mr Aslan that the job would cost more than the originally estimated amount. According to Mr La Macchia, he had requested his car back from Mr Aslan but Mr Aslan had refused unless he paid another $15,000. He said that he had left the car there on the advice of his father who had told him he could seek to recover the money paid later. Mr Dominic La Macchia corroborated this account. 23. Mr Aslan's evidence was that the first time he had spoken to Mr La Macchia about prices was in general terms and that he had told Mr La Macchia that it cost about $20,000 "for performance turbo upgrades" and $5000-8000 to rebuild an engine. He said that he had also told Mr La Macchia that he could not commence work on the car at that time because he had bookings into the next year and that he would make no commitments without a deposit. 24. Mr Aslan said that a few days after this initial conversation he had spoken to Mr La Macchia who told him that he wanted to leave a "large deposit" and that he had said to Mr La Macchia, "David, I told you before that it would cost you around $20,000 for the turbo set up, minimum $5000 to rebuild an engine, plus extra for any additional parts missing or damaged from the engine bay." According to Mr Aslan, Mr La Macchia replied, "I understand, I'll see you soon." Mr Aslan also said that during this conversation he had told Mr La Macchia that he could not give a quotation until he had seen the car and parts. 25. His account is that after he had seen the car he had a further conversation with Mr La Macchia in which the plaintiff had told him that he wanted to race the car at Eastern Creek racetrack and that the car was to be used for racing only. He said that Mr La Macchia had then given him a number of specific instructions concerning the work to be undertaken. 26. He said that Mr La Macchia had requested " a 12A [engine]set up with a high flow series 4 turbo… a custom exhaust manifold that is T.I.G welded and ceramic coated." He had requested that the back of the turbo be ceramic coated. Mr Aslan said that Mr La Macchia said that he wanted "a custom front mount intercooler that is mounted in between the rails so that 1 don't have to modify my front end or cut my grille" and "an exhaust dump pipe like Claude's made in stainless steel and T.I.G welded and polished." He had also specified that he wanted the two intercooler pipes to be made in stainless Steel and T.I.G welded and also polished and that the pipes run through the inner skirts with a small pipe running in and a large pipe running out. 27. In addition, Mr Aslan said, Mr La Macchia had asked for a plenum chamber to fit the pipes and inlet manifold, two extra injectors on the plenum the same as the two injectors he already had, a clutch kit and tightened flywheel. He had also requested an extra fuel pump mounted to his surge tank with a Y piece. Finally, he had asked Mr Aslan to paint the engine the same colour as the engine bay. Mr Aslan said that Mr La Macchia had particularly requested that a brass clutch kit not be fitted because it was unsuitable for a standard gearbox and differential. 28. Mr Aslan said his initial estimate was in the order of $30,000 but that at the conclusion of that discussion he had told offered to do the work for $25,000 including a second-hand engine and or $24,000 without the ceramic coating. He said that he had told Mr La Macchia that the job would take 9-12 months to complete. Mr Aslan said that Mr La Macchia had sought to negotiate a price on the basis that he had a quotation from Rotary Motion to do the work for $25,000. 29. According to Mr Aslan, Mr La Macchia had insisted on the ceramic coating being done and had agreed to the time period estimated. Mr Aslan said that Mr Beydoun had also demanded a deposit of at least 50 per cent and that Mr La Macchia had agreed to bring in another $7000 on the following Friday which he subsequently did. 30. Mr Beydoun's evidence corroborates that of Mr Aslan. He gave an account in similar terms to that of Mr Aslan's. In particular, he emphasised that Mr La Macchia was very specific and detailed in his instructions. He also gave evidence that the vehicle, when it was brought to Leading Edge's workshop, was a shell with most of the parts detached or disassembled. He also gave evidence that there was a considerable number of missing parts. Some of the parts were in two crates in the car. He said that many of the parts could not be re-used. 31. Mr Choucair also gave evidence that when the car was brought to the workshop it was missing parts, panels and its engine and had a couple of boxes of parts in the car. 32. He said that he had later overheard a conversation between Messrs Aslan and La Macchia in which he heard Mr Aslan say that the job would cost at least $30,000. He said that he had later asked Mr Aslan how much he was spending on the car and that Mr La Macchia had told him he had negotiated a price of "around $25,000". He also said that Mr La Macchia had told him that he intended to race the car at Eastern Creek and that the job would take about a year with another year for him to paint it up and do up the interior and wheels. 33. Mr La Macchia denied having had a quotation from Rotary Motion to do the work for $25,000. No independent evidence of such a quotation was adduced by either side. 34. Mr La Macchia asserted in cross-examination that he had not told Mr Aslan or anyone from Leading Edge that the purpose of the work was to race the car. He insisted that he wanted the car to be suitable for registration for road use. To support his assertion he tendered in evidence three documents from the Roads and Traffic Authority showing that he had paid number plate holding fees on 24 September 2002, 12 September 2003 and 20 September 2004. They appear to relate to an RX3 vehicle. He also gave evidence concerning the insuring of the car for road use. 35. Of course, the mere fact that a person pays such a fee does not of itself prove that Mr La Macchia was not going to race his car. An intention to register the car and an intention to race are not mutually exclusive objects. In any event, Mr La Macchia's original intention had been to install a 12A turbocharged motor in his car. As I understand the evidence, such a vehicle, all other things being equal, could have been registered. The problem of registration only arose once a 13B turbocharged engine was installed. That came much later. 36. There is significant evidence, however, apart from that given by the witnesses from Leading Edge, that Mr La Macchia did intend to race the car. One of the most compelling pieces of evidence is the fact that the intercooler was, clearly on his instructions, installed very low. His own photographs show that it was placed precariously low on the front of the vehicle, surely at risk when negotiating bumpy roads, deep gutters and troughs. On the other hand, it is a matter of common knowledge that racing cars tend to be very low slung, road-hugging vehicles with low centres of gravity. This was such a vehicle. 37. In addition, evidence was given by an expert witnesses for the defendant, Mr Rocky Rehayem, that the vehicle configured as its engine and supercharger were by Leading Edge, could not have been registered without further modification. This is because the vehicle now has a 13B rotary engine with a turbocharger. He said that while it was theoretically possible to do so, it was "cost-prohibitive" and that in his long experience of dealing with rotary engine vehicles (in which he specialises) he had never heard of it being done. 38. Mr La Macchia denied that the intercooler had been positioned as it was on his instructions. Nevertheless, unless there had been some misunderstanding between Mr La Macchia and Leading Edge about this, it is hard to see why they would have placed it so unless directed to do so by Mr La Macchia. Furthermore, he had paid occasional visits to the workshop while the car was being built and he made no complaint about the intercooler when he first took delivery of it. 39. Mr Ignazio Tamburello, an expert witness called by the plaintiff, however, gave evidence that it was possible to register vehicles with 13B rotary engines and that he had done so on a number of occasions. He also gave evidence that, with proper certification, cars with 13B engines and turbochargers could be registered. He also gave evidence that it was possible to register such vehicles under Australian Design Rules as "individually constructed vehicles" ("ICVs"). 40. The end result of those considerations appears to be that a vehicle may be able to be registered even if configured for racing. Nevertheless, in my view it is probable that Mr La Macchia intended to race the vehicle and indicated that to Leading Edge. If the car is now unregistrable, however, that is because he has put a 13B engine in it after taking delivery from Leading Edge the second time. 41. It is clear from the evidence, including the undisputed evidence that the work took approximately twelve months to carry out and that the car was, when it arrived at Leading Edge, virtually an empty shell with many parts missing and no workable engine, that a considerable amount of work was needed to get it not only in working order but to meet the cosmetic requirements imposed upon Leading Edge by Mr La Macchia. In all those circumstances, I find it improbable that Mr Aslan offered to have the car ready within six weeks or that he offered to carry out the work for $12,000 as asserted by Mr La Macchia. 42. It seems far more likely, especially if Mr La Macchia had indicated that he wished to race the car, implying therefore that he wanted a high-performance vehicle, that between obtaining the quotation for approximately $11,000 from Rotary Motion in October 2002 and entering the contract with Mr Aslan in 2003, that his ambitions for the car had increased and with them, necessarily, the costs of building the car to the standard he required. 43. Evidence was given by both parties concerning warranties given by Mr Aslan. According to Mr Aslan, he offered only a 30-day warranty on the second-hand engine. He said that when the dispute concerning the engine supplied first arose he had reiterated this to Mr La Macchia who asserted in reply that the warranty agreed had been for six months. Mr Aslan then said that Mr La Macchia had claimed that he had offered the six-month warranty on a specific occasion when Mr La Macchia's father had visited Leading Edge. Mr Aslan told Mr La Macchia that he could not remember doing so. Mr La Macchia said in his evidence that he never would have accepted only a 30-day warranty for a second-hand, let alone an engine that was to be used for racing. 44. In my view, because of the passage of time and the other considerations that I have dealt with above, it is highly likely that the evidence of Messrs David La Macchia, Dominic La Macchia, Aslan, Beydoun and Choucair is reconstructed to a significant degree at least in relation to certain aspects. Findings of fact are therefore difficult to make with great certainty. Nevertheless, some conclusions may drawn on the balance of probabilities as to the facts. 45. First, while negotiations may have started on the basis of an estimate in the order of $12,000, the starting point being the Rotary Motion quotation for about $11,000, the ultimate estimate was significantly higher and was based on Mr La Macchia's highly detailed instructions and an examination of the vehicle and its parts by Messrs Aslan and Beydoun. It may now be Mr Dominic La Macchia's recollection that a quotation was given for $12,000 but I think it likely that he has reconstructed his evidence on this point. In my view, it is more likely than not that, whether at the outset or a short time later when Mr Aslan had thoroughly examined the vehicle, the ultimate estimate given to Mr La Macchia was either for $24,000 or $25,000 with a proviso that extra, but minor, costs may be added to that. Aslan deposit of $10,000 against a final bill of $11,000 or $12,000 seems very high indeed and the fact that it was in that sum lends support to Mr Aslan's case. 46. Second, on Mr La Macchia's account all he had originally specified for the job was the installation of an engine, an intercooler and a turbocharger. If that is correct, it is possible that Mr Aslan gave a rough estimate of $11,000 or $12,000 but later changed it when Mr La Macchia added many other requirements to the job he wanted done. In Mr La Macchia's version, no mention was made of his requests at the time the contract was formed for the various details he specified and which were completed for him. Yet clearly, over the period the car was worked on, that work was done. If he did not specify them at the outset, it is self-evident that he must have done over the period of the job. If his requests for further work to be done came after the original contract was formed, once accepted, they became variations of the original contract. That said, in my view, it is more likely than not that the work was specified at the time the contract was made or shortly afterwards and that from a reasonably early stage in the work Mr La Macchia well understood that it would cost him in the order of $24,000, which he acknowledged and agreed to. 47. I find it difficult to accept Mr La Macchia's account that he had requested Mr Aslan to release his vehicle and that Mr Aslan had refused to do so unless Mr La Macchia paid him a further $15,000. While it is possible that such a conversation took place, at that stage Mr Aslan had not done much of the work ultimately done on the vehicle. He had no particular interest in this car and, on all accounts, including Mr La Macchia's, was busy with other work. I am not prepared to find that Mr La Macchia dishonestly made up this evidence but for the reasons given I do not regard it as reliable. On the other hand, it is more likely that there was a revision by Mr Aslan of his estimate from about $12,000 to about $24,000, that this was the subject of an argument between Messrs La Macchia and Aslan, but that Mr La Macchia accepted the increase (if reluctantly and with disappointment). This seems a more likely scenario than either of those advanced by the parties. 48. Third, it seems highly likely that Mr La Macchia informed Messrs Aslan and Beydoun that he intended to race the motor vehicle. The ultimate configuration of the vehicle strongly suggests that that was one of his prime purposes in having Leading Edge work on the vehicle. Whether Mr La Macchia also informed Mr Aslan that he wanted the car to be registrable is less clear. Given that the car was originally to have a 12A motor it is a reasonable supposition that he did so. However, the change in configuration to a 13B motor suggests that Mr La Macchia later abandoned this intention and that the contract was varied accordingly. 49. Fourth, it is more likely than not that the deposit was paid by Mr La Macchia after he had received the estimate not beforehand. While I do not doubt that Mr Aslan wanted a deposit against the disbursements he would incur for parts and labour, it seems unlikely that Mr Aslan, a busy tradesman, would take a large deposit without having reached, at least in his own mind, a decision as to whether he would take the job and given an estimate to the prospective customer. In any event, this issue is not decisive in relation to the terms of the contract. 50. Fifth, in my view, while $24,000 or $25,000 was the estimate given by Leading Edge, this was not a fixed price contract. This conclusion can be drawn from a number of pieces of evidence. The receipt for the $10,000 deposit states that the balance of the cost of the work would be reported as the work proceeded. The fact that the car was a mere shell and no work had been done to ascertain whether the parts provided by Mr La Macchia could be re-used again also suggests that Mr Aslan would have been hesitant to offer a fixed price. Finally, replacements for missing parts had to be obtained, the engine stripped and so on. It would have been difficult if not impossible to place an exact price on the costs of parts and labour at that early stage in the work. Although Mr Aslan says that he offered to do the work for $24,000 or $25,000 that was, in my view, always subject to small variations as asserted by Mr Aslan. 51. Sixth, it is uncontested that the contract had implied terms that the work done by Leading Edge would be carried out with due care and skill and that the goods supplied would be fit for the purpose(s) for which they were supplied. 52. Seventh, it is also undisputed that Mr La Macchia ultimately paid Leading Edge the sum of $25,200. 53. Eighth, in my view, no specific time for completion of the work was agreed but an estimate of 12 months was given by Mr Aslan. It was therefore a term of the contract that the work be completed within a reasonable time. It appears to me that, even on his own version, Mr La Macchia can be said to have ratified the variation of the contract because he took no action to recover his vehicle. On the contrary, he allowed the defendant to continue working on it. On his account, which I have not accepted, he felt he had Hobson's choice but in fact his options were wider than that. Were there breaches of contract by the defendant? 53. As previously noted, one of the unusual difficulties in determining the facts in this case is that the parties do not even agree on a chronology of events. Mr La Macchia's version is that he collected the vehicle for the first time from Leading Edge on about 4 June 2004. He supports his assertion with a copy of a tax invoice in the sum of $9020. The invoice states that the payment is the final payment on a 12A RX3 conversion, outlines the work done on the vehicle and, in a handwritten addendum, declares that "the vehicle is yet to be dynotuned free of charge." He also provided bank records to support this evidence as well as having his father and Mr Sam Costa corroborate his account that the car had been taken back to his father's workshop in the middle of the year. (Mr La Macchia senior stated June, Mr Costa simply recollected the mid-year period.) 54. On the other hand, Messrs Aslan and Beydoun in their statements claimed that Mr La Macchia had collected the car on 28 August 2004. Mr Beydoun purported to be able to recall this by reference to Mr Aslan's wedding and honeymoon in August 2004. No business records were produced by them although Mr Beydoun was able to recall having written up an itemised invoice at Mr La Macchia's request. Annexed to Mr La Macchia's statement, however, was a copy of a Leading Edge invoice dated 28 August 2004. According to his evidence, this was produced in answer to a request by his solicitors for further and better particulars. How the two Leading Edge invoices marry is rather unclear. 55. It would have made common sense for Mr La Macchia senior to have requested a detailed invoice some time after the vehicle was delivered so that he and his son could check what Leading Edge charged for as against what they had actually installed in the car. Given his attachment to the vehicle and large investment he had made in it, it seems unlikely, in my view, that Mr La Macchia would have made his final payment to Leading Edge in June, as was almost certainly the case, then left the car for over two months before collecting it. In view of the fact that Mr La Macchia produced the Leading Edge invoice dated June, as well as other evidence, this is clearly the more reliable evidence. This is another instance in which there seems to have been reconstruction of evidence. Again, I do not suggest dishonesty but it seems likely that the invoice of 28 August caused Messrs Aslan and Beydoun to think that the date of delivery was in August rather than June 2004. 56. According to Mr La Macchia, when he examined the car at his father's workshop he found a number of defects in it. First, he said that one of the fuel pumps he had purchased for the car had been replaced by a second-hand pump. (He produced an invoice for four fuel pumps he had purchased.) Second, he stated that the "turbo exhaust bolt" was not properly fitted. Third, he said that the "turbo oil line" had not been fitted. Fourth, he said that new or correct spark plugs had not been fitted. Fifth, he said that the brake lines were leaking oil. Sixth, he said that the injectors fitted were second-hand not new. Finally, he said that a new water pump and air filter supplied to Leading Edge for the car had not been fitted. 57. Mr La Macchia stated that he had complained to Mr Aslan who had told him that he would give Mr La Macchia $150 for a new fuel pump and would fix the other defects. Mr La Macchia claims that neither of these promises has been fulfilled. 58. On Mr La Macchia's version the electrical and computer systems in the car had not at this stage been wired up. That work was completed by about mid-July 2004. When the electrical and computer systems were fitted, Mr La Macchia's says that he attempted to start the engine. It turned only slowly. On removing the spark plugs to check the compression, Mr La Macchia found that oil and water emerged from the spark plug holes. He said that Mr Aslan had been present at this test. He said that Mr Aslan was eventually able to start the engine after the radiator had been drained but that the car had been returned to Leading Edge for further work to be done on the engine. 59. Mr Costa, who worked at Mr La Macchia's father's workshop, in his statement tendered in evidence gave an account remarkably similar to that given by Mr David La Macchia in his statement. His statement was made about two weeks after Mr La Macchia's. While Mr Costa corroborated Mr La Macchia's account the similarity between their statements gives rise to a concern that Mr Costa may have reconstructed his evidence on the foundation provided by Mr La Macchia's. That is not to say that Mr Costa has fabricated his evidence but its reliability may be questioned. Mr Dominic La Macchia also gave a statement, made about two weeks after Mr David La Macchia's, which was identical to Mr Costa's in many respects and to Mr David La Macchia's in several ways. Again, this suggests that he reconstructed his evidence to a significant degree basing it on Mr David La Macchia's account, thereby considerably reducing the weight to be attached to that evidence. 60. Mr Aslan's account was that the car was collected by Mr La Macchia on 28 August when Mr Beydoun had provided an invoice. He said that four or five months later Mr La Macchia had telephoned him to complain about the engine. He said that in January 2005 he had visited Mr La Macchia's father's workshop at Leichhardt and examined the car. He said that he had pulled out the spark plugs and found an excessive quantity of fuel in the engine, which gushed out of the spark plug holes while it was being cranked. He said that he had pointed this out to Mr La Macchia. 61. He also said that the wiring had been incorrectly carried out and that, as a result, the injectors were flooding the engine and intake systems with fuel. He said that Mr La Macchia had admitted lack of experience in relation to the Microtech system which was the computer controlling the system and that he, Mr Aslan, had had to correct the wiring for the computer. He stated that once the wiring problem had been rectified the engine had run smoothly. This evidence is denied by Messrs Costa and La Macchia (senior). 62. According to Mr Aslan, Mr La Macchia had rung him the following day to raise another problem, this time to do with the radiator levels dropping. He said that after some discussion with Mr La Macchia, during which Mr La Macchia had said that his father wanted another engine installed, he had agreed to do so to remain on good terms. He said that the car was then towed back to Leading Edge where another engine was installed. 63. Mr Beydoun gave evidence that around New Year in 2005 Mr Aslan had asked him to organise a new engine for Mr La Macchia. He said that Mr Aslan had told him that there was nothing wrong with the engine but that Mr La Macchia and his father were not happy with it. He said that Mr Aslan had told him he did not want argue with them any more. His evidence was that he had located another 12A engine for the car, had it painted and installed and that Mr Aslan had "dynotuned" the engine before returning it to Mr La Macchia in late January 2005. He asserted that Mr La Macchia, on taking delivery of the car, said, "Thanks a lot. I'm very happy with you guys." 64. Mr Beydoun did not give any evidence in his written statement concerning anything he had done to check the engine in the returned vehicle. It was a curious omission and nothing in his oral evidence suggested that it was an oversight. Certainly he gave no evidence that the engine was in good working order, as claimed by Mr Aslan, when it was returned to Leading Edge. 65. Mr La Macchia's evidence was corroborated indirectly to some degree by the business records he tendered. He provided copies of invoices for a four fuel pumps purchased in September 2002, January 2004 and June 2004. He also provided a copy of an invoice for a "crank angle sensor". He said that these were parts supplied to the defendant for installation in his vehicle. He also gave evidence that he had been charged for parts, including a turbo-charger, he had supplied to Leading Edge for installation in the vehicle. 66. In my view, it is more likely than not that the engine, when delivered to Mr La Macchia, was in defective condition. Although, as I have stated several times, reservations about the accuracy of much of the evidence given by both parties, it is plain that, whatever his observations at the Leichhardt workshop, Mr Aslan took the car back to his own and the engine in it was replaced by another. While it is conceivable that he might have taken the car back to check it again, it is highly implausible that he would have directed Mr Beydoun to replace the engine entirely if it were in good working order as he claimed. 67. Mr Aslan's evidence that the only fault lay in the wiring of the computer system, which he rectified on the spot, is equally difficult to accept. Mr La Macchia, his father and Mr Costa are experienced auto-electricians. On Mr Aslan's account, the error in the wiring was simple to find and simple to rectify. While mistakes, of course, can be made, it seems unlikely that Mr La Macchia and Mr Costa would both have made such a simple one. And, of course, Mr Aslan took the car back. That fact speaks powerfully about the state of the engine at the time. 68. On Mr La Macchia's account he expected the defects in the engine to be fixed and the car returned to him in good working order with the engine he had purchased from Mr Aslan still in it. One of the few uncontested facts in this matter is that when he got the car back, it had a different 12A engine in it. His evidence was that the vehicle had been returned to him in early March 2005. 69. Mr La Macchia also gave evidence that on its return there were scratches in the car's engine bay, it had no brake fluid, oil was leaking on the floor, there was a hole in the radiator and new spark plugs had not been installed. This evidence is corroborated by that of his father and Mr Costa. 70. Shortly afterwards, he said, he had had the car towed to the workshop of Mr Rocco Rehayem who traded under the name of Pac Performance. The car was inspected by Mr Ignazio Tamburrello. Mr Tamburello found a number of significant problems with the replacement engine and other parts installed in the car by Leading Edge. 71. He stated that the engine lacked compression and had water coming out of the spark plug holes. This indicated faulty water seals. He said that the car was not fit to be driven and that it would cost between $3500 and $6000 for parts plus $2000 in labour costs to rectify. 72. He stated that the intercooler had been installed in a position that made the car unfit for registration. (This issue is also dealt with above.) 73. He said that the coil packs had been installed poorly and, as a result, could eventually fail. He considered that the cost of rectification would be encompassed in the cost of fixing the intercooler installation. 74. He noted that the injectors supplied were second-hand. He considered that they were unsuitable for racing and that the cost at which they had been supplied was about the cost of new injectors. He thought a reasonable price for new injectors was $300. 75. Mr Tamburello expressed particular concern about the exhaust housing for the turbo-charger. He said that the exhaust housing had severe cracks in it and that it should never have been installed or ceramic-coated. He estimated a replacement would cost approximately $500. 76. His concerns about the turbo-charger extended to that item itself. He said that the turbo-charger was unsuitable for racing and could possibly detonate. (He provided a basis for that opinion but it is unnecessary to outline here the technical details.) He considered that rectification of the design fault and replacement with a suitable turbo-charger would cost in the order of $6500. 77. He was also of the opinion that the radiator supplied was unsuitable for a turbo-charged vehicle of the configuration of Mr La Macchia's car. He said it was particularly unsuitable if the vehicle was to be raced and was, in any event, damaged. (Mr Tamburello also discussed the wisdom of the choice of a 12A engine. That evidence and the opinions he expressed concerning it are irrelevant here and were not taken into account in my considerations.) Mr La Macchia provided an invoice showing that the cost of repairs to the radiator were $462. 78. Mr Tamburello was of the view that the fuel line installed was unsuitable and would cost about $400 to fix. 79. Finally, based on a number of aspects of the car's configuration, he offered the broad opinion that the car would be unsuitable for racing. 80. Expert evidence was also adduced by the defendant. Mr Paul Laing, a mechanical engineer, inspected the dismantled 12A engine and the vehicle with a 13B engine installed. Mr Laing found no signs of significant damage to the 12A engine and no signs of coolant leakage. He considered the other items he inspected to have been constructed or installed in a reasonable fashionable and to be fit for their purposes. He also considered that since the clutch assembly had been used by the subsequent technician that it might be presumed be suitable. In his opinion, the fabricated inlet manifold, intercooler pipes and exhaust pipe were well made and finished. Overall, his view was that the parts made by Leading Edge had been modified and installed with due care and skill. He was unable to inspect the exhaust manifold and therefore could not offer an opinion on the quality of the parts installed or the workmanship in that respect. 81. Mr Rocco Rehayem also gave evidence for the defendant. He contradicted some of Mr Tamburello's evidence concerning the unsuitability of some parts installed by Leading Edge. In particular, he denied that there was a design fault in the exhaust housing of the turbo-charger and said that his workshop continues to install the particular turbo-charger used in Mr La Macchia's car. 82. His view was that the car, as ultimately configured by Mr La Macchia, was designed for racing not for registration. 83. I have reservations about the weight to be given to the evidence of all the expert witnesses called. Only Mr Laing appeared to me to be fully conversant with his duty to present his evidence from an independent perspective. Mr Rehayem appeared to be ignorant of the requirements of the Expert Code of Evidence and was embarrassed when cross-examined about them. Mr Tamburello, on the other hand, had carried out the initial examination of the car when it was brought to Mr Rehayem's workshop with a view to carrying out further work on it. His inspection was not carried out under instructions for the purposes of litigation and the provision of an independent report to the court. While both Messrs Rehayem and Tamburello appeared to me to be making a genuine attempt to be honest in their evidence, for these reasons, as well as the impressions I formed as they gave their evidence, I was not satisfied that each was an entirely impartial witness. 84. Mr Laing, on the other hand, despite his clearly independent stance, was not able to give much useful evidence concerning the performance of the second 12A engine installed in the motor vehicle as he saw it only in its disassembled state. It is not clear from his evidence whether he examined the vehicle in respect of all the faults and defects claimed by Mr La Macchia but his evidence suggested that he had not. This is indicated by his lack of reference to, for example, the injectors and pumps, and the fact that he was unable to inspect the exhaust manifold. The weight his evidence can be given is therefore somewhat limited. 85. What conclusions may then be drawn from the evidence? 86. First, the engine originally supplied by Mr Aslan was defective and either needed considerable work or replacement. It appears that Mr Aslan opted for the latter course. 87. Second, the replacement engine was also defective. I accept the evidence of Mr Tamburello in this regard as Mr Laing was unable to see the engine in operation. While Mr Laing could see nothing wrong with the engine in its disassembled state, Mr Tamburello had the advantage of trying to start it. I prefer his evidence for that reason. In my view, whatever the purpose for which the engines were supplied, they were not fit for it. 88. Third, I think it unlikely that Mr Aslan consulted Mr La Macchia about installing a second engine. For Mr La Macchia this would have been a "lucky dip" whereas he had purchased an engine and had an agreement that the engine would be rectified. Whether this was under a warranty or because Mr Aslan recognised that the engine was not fit for its purpose is immaterial as he agreed to take the car back and fix the problems with the engine. I accept that Mr La Macchia did not wish a replacement engine but to have the engine he had bought operate properly. That engine has now disappeared. 89. Fourth, Mr Tamburello's evidence appears to be the best estimate available for the cost of rectification of the second 12A engine but Mr La Macchia replaced it with a 13B engine. No evidence was presented as to the cost of a 13B engine but it seems reasonable to suppose that, as a more powerful and more recent model, its worth was not less than the $3500 to $6000 estimated by Mr Tamburello in respect of replacement of the 12A engine supplied by Leading Edge. No evidence was presented as to the value Mr La Macchia obtained for the engine supplied by Leading Edge. In any event, Mr La Macchia got the benefit of the engine and some value ought be placed on that benefit. Given that Mr Laing saw no signs of damage or destruction in it but that Mr Tamburello considered it to be in poor condition as evidenced by lack of compression it appears to be an engine that, with repairs, could be re-used. Doing the best I can with the evidence, I would place a value on the engine in its unrepaired state of $1000. The assessment of damages in respect of the vehicle ought therefore be reduced by that amount. 90. Fifth, although I have some reservations about the evidence of Mr La Macchia, his father and Mr Costa, I nevertheless find their evidence more persuasive taken as a whole in respect of the claim concerning the supply of parts by Mr La Macchia because Mr La Macchia was able to provide some documentary corroboration of claims; because their evidence is supported in significant respects by Mr Tamburello's; and because, as previously discussed, in some respects I find the evidence of Messrs Aslan and Beydoun implausible;. Although he was probably not an entirely impartial witness, Mr Tamburello was more independent than Mr La Macchia (senior) or Mr Costa and significant weight can be attached to his evidence. I accept therefore that Mr La Macchia supplied a turbo-charger to Leading Edge and was nevertheless charged $2200 for its supply and that he also supplied a new petrol pump, water pump, accelerator cable, crank angle sensor and air filter for which he was charged by Leading Edge. 91. Leading Edge charged Mr La Macchia $210 for the fuel pump. I will allow that amount. Leading Edge charged Mr La Macchia $132 for a second-hand water pump. As Mr La Macchia's evidence is that he supplied a new water pump I will allow $160 in respect of that aspect of his claim. I will allow $190 for the crank angle sensor, $80 for the accelerator cable and $125 for the air filter, those being the charges made by Leading Edge for those items. In respect of overcharging for parts, therefore, I will allow a total of $2907. 92. Sixth, I am unable to draw any conclusions about the fitness of the turbo-charger for the purpose, due to the conflict between the evidence of Messrs Tamburello and Rehayem, but that appears to have been supplied by Mr La Macchia for installation in the car. Similarly, I am unable to make a finding on the suitability of the clutch kit supplied by Leading Edge because I note that it has not been replaced despite the installation of a 13B engine and because Mr Rehayem gave evidence that the kits are interchangeable between 12A and 13B set-ups. 93. Seventh, on the other hand, the weight of evidence suggests that some of the parts were unsuitable. Mr Tamburello found what he said were significant cracks in the exhaust manifold. Neither Messrs Laing or Rehayem contradicted that evidence which I therefore accept. I also accept the evidence of Mr Tamburello that the radiator was damaged at the time he inspected the car in 2005. There may be an issue as to whether that damage was caused at Leading Edge or Mr La Macchia's workshop during the time he had the vehicle. In Mr Aslan's evidence he made no mention of the radiator being damaged at the time he saw the car at Mr La Macchia's workshop in January 2005 and Mr La Macchia did not complain of the damage at that time. It therefore seems more probable than not that it was damaged at Leading Edge whilst under repair in early 2005. If so, this was most likely the result of a failure to use due care and skill in rectifying the various defects about which Mr La Macchia had complained. A similar observation applies in respect of the faulty fuel lines found by Mr Tamburello. 94. Eighth, the weight of evidence also shows that it is more likely than not that second-hand injectors were installed in the vehicle. While the evidence in conflict as to whether it was a term of the contract that new injectors be installed, if Mr La Macchia was going to race the car as alleged by Mr Aslan and as I have found to be the case, this suggests that he would have been keen to have new injectors if available and that he specified this. Second-hand injectors may not necessarily be unfit for their purpose but Mr Tamburello's evidence that the set installed were unfit for racing because of their age may be correct. While the installation of second-hand injectors was a breach of contract by Leading Edge, in my view, Mr La Macchia received the benefit, such as it was, of the second-hand injectors. They have not been returned to Leading Edge. They may have some value on the second-hand market. Certainly there is a market for them as they were bought by Leading Edge for his car. He has failed to mitigate his loss in that respect. For all these reasons it is difficult to assess his real loss, if any, in respect of the injectors. 95. Assuming that, if he sold them, he did not recover what he had paid for them, his loss would be the difference between the amount he paid Leading Edge abd what he recovered or retained rather than the full amount paid. Doing the best I can, I would assess his loss at 50 per cent of the cost charged by Leading Edge. 96. I would expect that second-hand spark plugs have no market. I consider that it is unlikely that they were fit for their purpose and that Mr La Macchia should therefore be compensated for the full amount charged by Leading Edge. 97. Although there were several significant breaches of contract by Leading Edge he cannot be entitled to recover the entirety of the sum he paid Leading Edge as he claims. Damages are compensatory and he is entitled simply to be put back as nearly as possible in his original position. In my view, he is entitled to the reasonable cost of rectification of the engine, the costs of repairs to the parts that were not well constructed or damaged and the amount he was overcharged in respect of parts, less the value of the engine which was not returned to Mr Aslan. 98. I would therefore allow $7000 in respect of the engine (based on Mr Tamburello's assessment this is calculated as $5000 for parts and $2000 for labour), $462 in respect of the damaged radiator, $ 120 for the second-hand injectors, a nominal sum, say, $20 for the second-hand spark plugs, $2907 for other parts wrongly charged for by Leading Edge, $400 for rectification of the fuel lines and $500 for rectification of the cracking in the exhaust housing. 99. In my view an allowance ought also be made for the labour costs of reinstalling the various parts replaced specified above. While no calculations have been provided and the assessment must be based on an educated guess rather than specific evidence, it seems reasonable to allow, say, $1000 in this regard. 100. In conclusion, therefore, I would assess the plaintiff's losses due to the defendant's breaches of contract as being $12,409. Verdict and Judgment 101. There will be a verdict for the plaintiff in the sum of $12,409. In my view it is appropriate to order that interest is to be calculated by the Registrar on that sum from 4 June 2004. 102. I reserve the question of costs with parties having liberty to apply on seven days notice. Hugh Dillon Magistrate 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. 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