Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Marine Energy Systems Pty Ltd v Crich [2016] NSWCATAP 105 Hearing dates: 22 April 2016 Date of orders: 12 May 2016 Decision date: 12 May 2016 Jurisdiction: Appeal Panel Before: P Durack SC, Senior Member J Kearney, Senior Member Decision: 1. The appeal is upheld in part. 2. The decision of the Tribunal below is set aside. 3. Remit the matter to the Tribunal below, but only in order to re-calculate the quantum of damages in the manner described in the section of the reasons below under the heading Orders on appeal. 4. Leave to appeal is refused. Catchwords: APPEAL – breach of contract in supply of second-hand boat engine – assessment of damages – Tribunal below mistakenly included costs to install in boat – whether decision also not fair and equitable or against the weight of the evidence. Legislation Cited: Civil and Administrative Tribunal Act, 2013 Cases Cited: Collins v Urban [2014] NSWCATAP 17 Category: Principal judgment Parties: Marine Energy Systems Pty Ltd (Appellant) Keith Adams Crich (Respondent) Representation: Ian Clarke, Appellant Haley McEwen, solicitor for Respondent File Number(s): AP 16/07446 Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: Keith Adam Crich v Marine Energy Systems Pty Ltd [2016] NSWCAT Date of Decision: 12 January 2016 Before: M Gilson, General Member File Number(s): GEN 15/32871 REASONS FOR DECISION 1. In this matter the Appellant brings an internal appeal to set aside a decision dated 12 January 2016 of the Consumer and Commercial Division of NCAT (the decision below). 2. The facts, briefly stated, are that the Appellant supplied to the Respondent for reward a second hand marine engine and stern drive. A stern drive is sometimes called a "gearbox" but for simplicity these reasons will refer to the motor and stern drive (or gearbox) combined as "the motor". 3. It is common ground between the parties that the Appellant was not liable for the cost of installation of the motor into the Respondent's boat. It was a supply only contract of an operable motor. 4. The decision below found a breach of contract and ordered the Appellant to pay damages. The damages were assessed as the cost of parts that were found to be missing from the motor and "…associated labour to install this" (page 7 decision below). It was not disputed that the quantum was determined by an acceptance of the quotes in the report of J & M Marine being $3,438.34 for parts plus $2,250.00 for labour. After a 50% discount, the damages were finally assessed in the sum of $2,844.17. 5. The Appellant's grounds of appeal are firstly, an error of law in that the damages below included an element of compensation for labour for installation of the motor into the Respondent's boat. 6. The Respondent in his written submissions and in oral submissions accepted that an error of law had occurred in this respect. 7. The only evidence on the subject of labour costs was in the expert report of J & M Marine where the labour component was calculated upon the basis "install new parts to engine and gearbox and install in boat". The decision maker below used the dollar amount adjoining those words ($2,250.00) as representing the labour component of damages (before applying the discount). 8. The apparent adoption by the decision maker below of the additional words "and install in boat" is the part the parties agree was impermissible and constitutes an error of law. The parties accept it is appropriate to allow a component for installing the missing parts into the motor, since those parts should have been delivered already installed in the motor but the contract between the parties did not allow any labour component for installation in the boat. To fix the error, the damages needed to be reduced by that amount that represented the cost of installation in the boat, or the labour component needed to be re-assessed, restricted to the cost of installing the missing parts in the motor. 9. The Appeal Panel considered whether the error could be overcome by other evidence available to the decision maker below. The Appeal Panel heard submissions from both parties and closely examined the evidence but was unable to find any other evidence sufficient to allow it to substitute its own decision for the decision below on this aspect. 10. Thus, the matter would have to be referred for rehearing, unless the parties could agree on this one component. The Appeal Panel noted that the appeal involves a relatively small sum of money and that this dispute has no doubt consumed considerable time and trouble for the parties. In these circumstances, and during the Appeal hearing, the parties were given an opportunity to try and resolve this aspect between them without a decision being imposed upon them by the Appeal Panel. They were unable to do so. Accordingly, the matter will have to be returned for re-hearing. 11. In order to determine whether any other matters need to be considered at re-hearing, it is necessary to consider the other grounds of appeal argued by the Appellant. 12. The further grounds of appeal require leave to appeal pursuant to s 80 of the Civil and Administrative Tribunal Act, 2013. Further restrictions are found in Schedule 4 Clause 12 of that Act. 13. The Appellant's further arguments were that the decision was not fair and equitable, was against the weight of the evidence and that the decision maker placed undue weight upon the report of J & M Marine. 14. The Appellant argued that the delay in complaint put it at a disadvantage. The Appellant points to delay of some 11 to 12 months between receipt of the motor in December 2013 and the making of a claim in the Tribunal in late November 2014. In oral submissions, the Appellant gave emphasis to the unexplained delay between July 2014, when the motor was re-delivered to the Respondent after work was done to enable the Respondent to install the motor, and July 2015, when the Respondent supplied an expert report from J & M Marine about the missing parts. The latter delay appears to be, potentially, more significant because it seems that the motor was not in the Respondent's hands for a significant period between December 2013 and July 2014. 15. The Appellant submitted that such delay placed the Appellant at a considerable disadvantage, and made it unfair for the Tribunal to attribute responsibility to the Appellant for the missing parts. 16. However, it is important to recognise that it was not the Appellant's submission that there was no evidence upon which the Tribunal below could find that the motor supplied was inoperable because of missing parts. Any such submission would have been untenable in view of the expert's report from J & M Marine and the absence of any cross-examination of that expert at the hearing. 17. The unfairness of which the Appellant complains concerns an increased difficulty it confronted in obtaining material to undermine the credibility of the Respondent's case. However, there is no principle that leads to the rejection of a claim in these circumstances. Furthermore, the Appellant does not point to any aspect of the procedure that was followed in respect of the hearing below, in support of the submission of unfairness. There is no suggestion that the Appellant was denied a reasonable opportunity to challenge the veracity of the Respondent's case by the usual means of adducing evidence and cross-examination, including by utilising the delay in making the claim. 18. The Appellant also submits that the finding of supply with missing parts was against the weight of the evidence. We do not accept that submission in view of what we have already said about the expert evidence of J & M Marine and the absence of challenge to that evidence either in cross-examination or through other expert evidence adduced by the Appellant. We also note that the Appellant does not point to any evidence emerging from any cross-examination of the Respondent, who gave evidence at the hearing below, which would indicate that the Tribunal should have rejected the credibility of the Respondent's case. 19. In the circumstances, in our opinion, the Appellant has not established that "the evidence in its totality preponderates so strongly against the conclusion" arrived at by the Tribunal below about breach of contract that it can be said that the conclusion is not one which a reasonable tribunal member could reach: see Collins v Urban [2014] NSWCATAP 17 at [77(2)]. Nor do we think that the Appellant has suffered an injustice that is reasonably clear or that this conclusion about breach of contract by the Tribunal below involved error "that is plain and readily apparent": see Collins v Urban at [84(2)(c)], concerning the circumstances in which leave to appeal will be granted. 20. With further regard to submissions of the Appellant about unfairness and the weight of evidence, the Appellant argued that the decision below meant the Respondent received compensation to make the goods better than were originally purchased. However, the only evidence was that compensation was awarded to make the motor operable, rather than better. This was part of the unchallenged evidence of J & M Marine. 21. On the question of unfairness, this allegation needs to be seen against the background that the decision maker below gave the Appellant a 50% discount on quantum to allow for the uncertainties and inexactness of the evidence concerning which parts were missing. There was certainly evidentiary material to support the finding on quantum and the 50% discount is not challenged by either party on appeal. 22. Accordingly, the Appeal Panel does not grant leave under section 80(2)(b) and the appeal fails in that regard. It does, however, succeed on the question of law. 23. That being the case, the Appeal Panel returns the matter for re-hearing. However, the re-hearing is restricted to the issue of the quantum of damages for labour to install the missing parts to the motor (and excluding the labour costs of installation of the motor in the boat). All other parts of the decision (including the 50% discount) are not subject to re-hearing. 24. The parties are permitted to adduce fresh evidence in the new hearing, restricted to the issue of quantum of damages for labour to install the missing parts to the motor (and excluding the labour costs of installation of the motor in the boat). 25. Orders on appeal 26. For the above reasons, we make the following orders: 1. The appeal is upheld in part. 2. The decision of the Tribunal below is set aside 3. Remit the matter to the Tribunal below, but only in order to re-calculate the quantum of damages by determining a cost to install in the motor the missing parts as identified in the list attached to the report from J & M Marine dated 3 August 2015 (excluding the cost to install in the boat), reducing that cost by 50%, and then adding that resulting amount to the figure of $1719.17 (the latter figure being the amount already assessed by the Tribunal below in respect of the supply of missing parts). 4. Leave to appeal is refused. ********** 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: 12 May 2016