Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Chun v Tyre Empire Pty Ltd [2019] NSWCATAP 192 Hearing dates: 23 July 2019 Date of orders: 30 July 2019 Decision date: 30 July 2019 Jurisdiction: Appeal Panel Before: M Harrowell, Principal Member J McAteer, Senior Member Decision: 1. Leave to appeal is refused and the appeal is dismissed Catchwords: DAMAGES – claim for costs incurred in pursuing alternative rectification method to that finally adopted – liability of wrongdoer for such costs – failure to mitigate. Legislation Cited: Australian Consumer Law (NSW) Cases Cited: Nil Texts Cited: Nil Category: Principal judgment Parties: Jiang Chun (Appellant) Tyre Empire Pty Ltd (Respondent) Representation: J Chun (Appellant in person) M Sharifi (Head Mechanic) and C Keshishian (Sales Manager) (Respondent) File Number(s): AP 19/19339 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal of New South Wales Jurisdiction: Consumer and Commercial Division Citation: Not applicable Date of Decision: 28 March 2019 Before: J Ringrose, General Member File Number(s): MV 18/51589 reasons for decision Introduction 1. This appeal relates to a claim for damage to a motor vehicle owned by the appellant which had been serviced by the respondent motor vehicle repairer. 2. The appellant said that in carrying out the service to his vehicle, the respondent had failed to properly check and/or refill the oil in the vehicle in consequence of which the vehicle seized and the engine required repair or replacement. 3. On 28 March 2019, the Tribunal accepted that "the engine failed because oil was not replaced after the vehicle was serviced" and that the respondent was liable for damages. The Tribunal awarded the appellant the sum of $3530 being the cost of supply and replacement with a second-hand engine, towing charges, the callout costs for a mobile mechanic and a refund of the original service costs. That award included $2000 for the cost of a second-hand engine and $1000 for the installation of that engine. An order was made requiring the respondent to pay the appellant the amount of $3530.00 (Decision). 4. However, the Tribunal declined to award the amount of $1815 being a charge incurred by the appellant in having his failed engine removed, stripped and a quotation prepared for its repair. 5. The Tribunal provided written reasons for its decision (Reasons). 6. The appellant appealed the Decision by Notice of Appeal filed 26 April 2019. The appellant sought leave to appeal. The appeal was filed in time. History of proceedings at first instance and on appeal 1. It is necessary to set out a brief history of the proceedings. 2. The proceedings at first instance have been the subject of multiple hearings. Earlier decisions had been made which were subsequently set aside. 3. Suffice to say, in connection with the Decision, the subject of this appeal, directions had been made for the parties to file and serve evidence in support of their respective positions and the proceedings had been fixed for hearing on 28 March 2019. 4. The respondent had applied for an adjournment of the hearing on 28 March 2019. This application was made prior to the date of the hearing and was refused. The respondent did not appear at the hearing on 28 March and did not file and serve any evidence in response to the appellant's evidence. Consequently, the Decision was made in the absence of the respondent. 5. The respondent has not sought to appeal the Decision. However, as part of the submissions and evidence provided by the respondent in reply to the appeal, the respondent sought to provide new evidence concerning the cause of the failure of the engine. In short, the respondent denied the allegation that the engine failed through lack of oil and said that the engine failure was caused by the timing belt breaking. The respondent contended that the appellant had failed to service his vehicle, including replacing the timing belt at the time recommended by the manufacturer. 6. At the commencement of the hearing of the appeal, it appeared the respondent, through its representatives Mr Sharifi and Mr Keshishian, contended that the evidence referred to in the previous paragraph had been provided to the Tribunal at first instance. The appellant denied this claim and said that the material submitted with the Reply to Appeal was new evidence to which he objected. 7. The Appeal Panel was not provided with a transcript of the proceedings at first instance. However, it decided to obtain evidence from the appellant and the representatives for the respondent, which was given on oath or affirmation, concerning what happened at the original hearing on 28 March 2019 and who was present. This oral evidence made clear that the material on which the respondent wished to rely as evidence in support of its position did not form part of the evidence at the original hearing. That new evidence should not now be allowed in the appeal. It also made clear that the respondent did not appear at the hearing on 28 March 2019. 8. Following the Appeal Panel enquiring whether the respondent wished to obtain an adjournment and/or file its own Notice of Appeal, the respondent indicated that it did not wish to do so and wished to proceed with the hearing of the appeal. The Appeal Panel made clear that if this occurred, the only issue to be determined was whether or not the Tribunal was correct in its assessment of the appellant's damages. 9. It was in these circumstances that the appeal proceeded to be heard. 10. The parties were provided an opportunity to make oral submissions. Grounds of Appeal 1. The appellants raised a number of grounds in his Notice of Appeal. These included: 1. The award of $3530 was "unreasonable and inadequate to cover the cost of repairs that are directly linked to negligence by the respondent". 2. That the appellant had various options to claim a new engine (at a cost of $10,000), a second-hand engine (at a cost of $4400) or to recondition the existing engine (at a cost of $4500-$5000). 3. In relation to the second-hand engine, the appellant said that such a rectification method would result in the supply of an engine which "has unpredictable and unforeseen conditions, with a maximum warranty of 3 months". 4. "Any reasonable person would choose to recondition the engine, for its costs and reliability". 5. The appellant was entitled "to ask for every cent that was owed in restoring the functionality of [his] car". 1. In his Notice of Appeal the appellant also said the "member's feelings towards me got in the way of awarding fairly. The decision was not equitable and I was penalised". While this submission appeared to raise the issue of bias, it was not pursued on appeal. The Appeal Panel was not provided with a transcript of the proceedings at first instance and in the absence of relevant evidence and submissions we do not propose to deal with this statement any further. 2. In support of his appeal, the appellant provided a copy of his statement relied upon in the proceedings at first instance. Attached to the statement were various invoices and photographs of the engine which had been disassembled for inspection following its failure. 3. At the hearing of the appeal, the appellant indicated that he was only seeking an additional amount of $1815 being the amount charged by ARA Engine Reconditioning (ARA) to dismantle, inspect and provide a quotation for the repair of his motor vehicle. Consideration 1. The substance of this appeal is that the Tribunal was in error in rejecting the claim for $1815. 2. Of this claim, the Tribunal said in the Reasons: The [appellant] was initially reluctant to have a second-hand engine installed and he decided to look around for an engine reconditioning shop. ARA Engine Reconditioning asked him to pay a sum of $1815 so that the engine could be stripped down and examined. This was done but no report was ever provided to the Tribunal although it was apparently determined that the camshaft and the cylinder head were both badly damaged. ARA then provided a quote of $6468 to recondition the engine using a new cylinder head which the applicant had been purchased from overseas at a cost of $731.50. There was no guarantee been given that further parts would not be required. The applicant then decided to adopt the recommendation of his first mechanic and purchase a second-hand engine which he was able to obtain for a cost of $2000. He then had this installed at a further cost of $1000 and his vehicle appears to be running well and without problems. 1. The Tribunal allowed the cost of the second-hand engine and its installation. The Tribunal then said: The applicant also sought the sum of $1815 paid to ARA and the monies paid for a new cylinder head being $731.50. These two sums have not been allowed because the applicant has a duty to mitigate his losses and neither of those payments were necessary to have his engine replaced. He should have sought a rough estimate of the total cost of restoration from ARA before any work was done and paid for. A competent mechanic should have been able to give such an estimate with the knowledge that the engine had seized. The first mechanic was able to correctly speculate about the real problem before the motor was pulled down and his recommendations suggested that replacement with a second-hand [motor] would have been a cheaper and quicker solution. 1. Consequently, the Tribunal declined to award the amount of $1815 or the amount of $731.50. 2. It is clear from the material provided on appeal that no report was ever provided from ARA concerning its inspection of the vehicle. As such, the Tribunal was correct to reject any entitlement to be compensated for the amount of $1815 in so far as that cost might have been necessary to provide evidence to support the appellant's claim before the Tribunal. 3. Further, in our view the Tribunal was correct to reject this claim as compensation for loss and damage arising from the conduct of the respondent. Whether the present claim is cast as one being a breach of contract or a claim for damages for negligence or a claim for breach of the Australian Consumer Law (NSW), the proper award for damages is the cost to repair the motor vehicle to its previously working state. 4. It is clear from the findings of the Tribunal that acquiring and installing a second-hand engine remedied the damage caused by the respondent's actions. An award was made for the cost of carrying out this work. This was the work advised to the appellant as necessary following inspection by his chosen mechanic 5. Despite having obtained advice from his chosen mechanic, the appellant determined to pursue a different course because he had a preference to have the damaged motor reconditioned and approached ARA. This course was later abandoned because of the cost. The actions of the appellant, in not pursuing the advice first offered by a qualified mechanic, increased the cost to him. The Tribunal found this constituted a failure to mitigate the appellant's loss and damage. 6. We agree. 7. The appellant was entitled to claim the reasonable cost of repairs following breach by the respondent of its obligations to the appellant in the servicing of his motor vehicle. The amount of $3000, being the cost to supply and install a second hand motor, was appropriate compensation. However, as found by the Tribunal, the additional costs incurred by the appellant were both unreasonable and unnecessary and therefore were properly disallowed. 8. It follows that the appellant's appeal against the Decision should be dismissed. 9. We should briefly deal with one matter raised by the respondent in its oral submissions in reply. The respondent referred to paragraph 8 of the appellant's statement that the timing belt had broken and this was what caused damage to the engine. There was no expert evidence to support this submission. However, the respondent submitted that, having regard to this evidence it should not be liable to pay the appellant any amount. 10. In reply to this submission, the appellant said that if the timing belt had broken the engine would have ceased working in a manner which would not have caused the camshaft and bearings of the engine to be burned. The appellant referred to the photographic material attached to his statement showing the burn marks on various components of the engine which would not have occurred if oil had been present to lubricate the parts. 11. As stated above, the respondent did not seek to file its own Notice of Appeal and appeal the Tribunal's finding that the engine had failed through lack of oil and subsequently seizing. 12. In any event, we accept the submission of the appellant, supported by the evidence to which he referred, that the engine did fail by seizing due to a lack of oil and that any failure of the timing belt occurred in consequence of the engine seizing and was not the cause of the engine failure. This is because the parts of the engine would not have been burnt if properly lubricated and the respondent has offered no reason why the timing belt breaking would otherwise have caused the identified parts to be burnt. 13. Accordingly, we do not accept the respondent's challenge to the amount awarded. Orders 1. The Appeal Panel makes the following orders: 1. Leave to appeal is refused and the appeal is dismissed. ********** I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar 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: 30 July 2019