Extract of "National Guidelines for the Assessment of Statutory Write-Offs"

4. Applying the Statutory Write-off Criteria

Before any of the SWO criteria can be applied, the vehicle must first be considered a written-off vehicle. A written-off vehicle is a vehicle that:

· has been damaged to the extent that it is determined to be a total financial loss i.e. its salvage value plus the cost of repairs would exceed its market value;

· has been dismantled for the disposal of the parts; or

· has been crushed for scrap metal.

Once a vehicle has been determined to be a written-off vehicle the SWO criteria should be applied as follows:

4.1 Impact Damage

4.1.1 Criteria

These criteria have been designed to identify vehicles that have been in such a severe crash that repairs would entail replacing much of the vehicles’ identifiable structure.

The criteria is that three of the following five impact damage indicators must be present if a vehicle is to be classified as a statutory write-off:

· Impact damage to the roof of 300 x 300 mm or more

· Impact damage to the floor pan of 300 x 300 mm or more

· Impact damage to the firewall of 300 x 300 mm or more

· Any impact damage to the suspension

· Impact damage to mechanical components such as engine blocks, transmission cases and axle houses, where these are deformed, cracked or broken.

In a motorcycle, there must be impact damage to the suspension, and two areas of structural frame damage which exclude scratching.

4.1.2 Comment

The roof, floor pan and firewall are three relatively remote areas of the vehicle that are somewhat protected in typical impacts and it is unlikely that all three areas would sustain substantial damage in less than a severe crash event. Similarly, the nature of the necessary damage to the mechanical components generally requires a severe event. The intent of the”impact damage to the suspension” item is also to flag damage that was caused by a severe impact.

4.1.3 Interpretation

The use of the term “impact” in describing damage of more than 300mm x 300mm to the roof, floor pan or firewall is intended to mean damage that was caused directly by impact with some object during the crash event. It is not meant to identify transposed or incidental damage. For example, following a side impact there might be visible roof ripples caused by distortion of the B pillar. However, these may largely “pop out” and disappear when stress is relieved by cutting the pillar during the repair process. In this case, there is a risk that the vehicle might be incorrectly assessed as a statutory write-off if it also sustained floor pan and suspension damage.

Commonsense must also be applied when considering the area of the damage given that in many cases the exact limit will be difficult to define. With borderline cases the test should be, “Was the damage caused by a severe impact?” For example, if a person stands or gently sits on the roof of a car it is quite likely to produce a dent greater than 300mm x 300mm, but this does not mean that that part of the vehicle has suffered a severe crash event. Dents of this nature might be mostly removed with gentle hand pressure and should not be classed as one of the SWO criteria.

Again, the use of the term “impact” when considering damage to the suspension is intended to describe damage caused by a severe crash. Minor suspension damage can easily be caused in “normal” driving by hitting potholes or kerbs. Such damage will require a wheel alignment to correct and it may even require the replacement of some components [it is often cheaper to replace components than try to repair them]. Therefore, when considering suspension damage as one of the SWO criteria, the test should be, “Is the nature and extent of the damage significant and the result of a severe impact?” Minor suspension damage even if it may require the replacement of some components should be ignored.

The SWO criteria also refer to “impact” damage to mechanical components such as engine blocks, transmission cases and axle houses, where these are deformed, cracked or broken. This means that the damage must have been caused by a severe impact and must be readily visible. Damage that has resulted from normal wear and tear or potential but not visible damage to the engine or drive train because of the likely misuse of the vehicle [common in the case of stolen and recovered vehicles] should not be included for the purposes of the SWO criteria.

TRADE PRACTICES ACT 1974 - SECT 51AC

Commonwealth Consolidated Acts

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TRADE PRACTICES ACT 1974 - SECT 51AC

Unconscionable conduct in business transactions

(1) A corporation must not, in trade or commerce, in connection with:

(a) the supply or possible supply of goods or services to a person (other than a listed public company); or

(b) the acquisition or possible acquisition of goods or services from a person (other than a listed public company);

engage in conduct that is, in all the circumstances, unconscionable.

(2) A person must not, in trade or commerce, in connection with:

(a) the supply or possible supply of goods or services to a corporation (other than a listed public company); or

(b) the acquisition or possible acquisition of goods or services from a corporation (other than a listed public company);

engage in conduct that is, in all the circumstances, unconscionable.

(3) Without in any way limiting the matters to which the Court may have regard for the purpose of determining whether a corporation or a person (the supplier ) has contravened subsection (1) or (2) in connection with the supply or possible supply of goods or services to a person or a corporation (the business consumer ), the Court may have regard to:

(a) the relative strengths of the bargaining positions of the supplier and the business consumer; and

(b) whether, as a result of conduct engaged in by the supplier, the business consumer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier; and

(c) whether the business consumer was able to understand any documents relating to the supply or possible supply of the goods or services; and

(d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the business consumer or a person acting on behalf of the business consumer by the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the goods or services; and

(e) the amount for which, and the circumstances under which, the business consumer could have acquired identical or equivalent goods or services from a person other than the supplier; and

(f) the extent to which the supplier's conduct towards the business consumer was consistent with the supplier's conduct in similar transactions between the supplier and other like business consumers; and

(g) the requirements of any applicable industry code; and

(h) the requirements of any other industry code, if the business consumer acted on the reasonable belief that the supplier would comply with that code; and

(i) the extent to which the supplier unreasonably failed to disclose to the business consumer:

(i) any intended conduct of the supplier that might affect the interests of the business consumer; and

(ii) any risks to the business consumer arising from the supplier's intended conduct (being risks that the supplier should have foreseen would not be apparent to the business consumer); and

(j) the extent to which the supplier was willing to negotiate the terms and conditions of any contract for supply of the goods or services with the business consumer; and

(ja) whether the supplier has a contractual right to vary unilaterally a term or condition of a contract between the supplier and the business consumer for the supply of the goods or services; and

(k) the extent to which the supplier and the business consumer acted in good faith.

(4) Without in any way limiting the matters to which the Court may have regard for the purpose of determining whether a corporation or a person (the acquirer ) has contravened subsection (1) or (2) in connection with the acquisition or possible acquisition of goods or services from a person or corporation (the small business supplier ), the Court may have regard to:

(a) the relative strengths of the bargaining positions of the acquirer and the small business supplier; and

(b) whether, as a result of conduct engaged in by the acquirer, the small business supplier was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the acquirer; and

(c) whether the small business supplier was able to understand any documents relating to the acquisition or possible acquisition of the goods or services; and

(d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the small business supplier or a person acting on behalf of the small business supplier by the acquirer or a person acting on behalf of the acquirer in relation to the acquisition or possible acquisition of the goods or services; and

(e) the amount for which, and the circumstances in which, the small business supplier could have supplied identical or equivalent goods or services to a person other than the acquirer; and

(f) the extent to which the acquirer's conduct towards the small business supplier was consistent with the acquirer's conduct in similar transactions between the acquirer and other like small business suppliers; and

(g) the requirements of any applicable industry code; and

(h) the requirements of any other industry code, if the small business supplier acted on the reasonable belief that the acquirer would comply with that code; and

(i) the extent to which the acquirer unreasonably failed to disclose to the small business supplier:

(i) any intended conduct of the acquirer that might affect the interests of the small business supplier; and

(ii) any risks to the small business supplier arising from the acquirer's intended conduct (being risks that the acquirer should have foreseen would not be apparent to the small business supplier); and

(j) the extent to which the acquirer was willing to negotiate the terms and conditions of any contract for the acquisition of the goods and services with the small business supplier; and

(ja) whether the acquirer has a contractual right to vary unilaterally a term or condition of a contract between the acquirer and the small business supplier for the acquisition of the goods or services; and

(k) the extent to which the acquirer and the small business supplier acted in good faith.

(5) A person is not to be taken for the purposes of this section to engage in unconscionable conduct in connection with:

(a) the supply or possible supply of goods or services to another person; or

(b) the acquisition or possible acquisition of goods or services from another person;

by reason only that the first‑mentioned person institutes legal proceedings in relation to that supply, possible supply, acquisition or possible acquisition or refers to arbitration a dispute or claim in relation to that supply, possible supply, acquisition or possible acquisition.

(6) For the purpose of determining whether a corporation has contravened subsection (1) or whether a person has contravened subsection (2):

(a) the Court must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention; and

(b) the Court may have regard to circumstances existing before the commencement of this section but not to conduct engaged in before that commencement.

(7) A reference in this section to the supply or possible supply of goods or services is a reference to the supply or possible supply of goods or services to a person whose acquisition or possible acquisition of the goods or services is or would be for the purpose of trade or commerce.

(8) A reference in this section to the acquisition or possible acquisition of goods or services is a reference to the acquisition or possible acquisition of goods or services by a person whose acquisition or possible acquisition of the goods or services is or would be for the purpose of trade or commerce.

(9) A reference in this section to the supply or possible supply of goods or services does not include a reference to the supply or possible supply of goods or services at a price in excess of $10,000,000, or such higher amount as is prescribed.

(10) A reference in this section to the acquisition or possible acquisition of goods or services does not include a reference to the acquisition or possible acquisition of goods or services at a price in excess of $10,000,000, or such higher amount as is prescribed.

(11) For the purposes of subsections (9) and (10):

(a) subject to paragraphs (b), (c), (d) and (e), the price for:

(i) the supply or possible supply of goods or services to a person; or

(ii) the acquisition or possible acquisition of goods or services by a person;

is taken to be the amount paid or payable by the person for the goods or services; and

(b) paragraph 4B(2)(c) applies as if references in that paragraph to the purchase of goods or services by a person were references to:

(i) the supply of goods or services to a person pursuant to a purchase; or

(ii) the acquisition of goods or services by a person by way of purchase;

as the case requires; and

(c) paragraph 4B(2)(d) applies as if:

(i) the reference in that paragraph to a person acquiring goods or services otherwise than by way of purchase included a reference to a person being supplied with goods or services otherwise than pursuant to a purchase; and

(ii) a reference in that paragraph to acquisition included a reference to supply; and

(d) paragraph 4B(2)(e) applies as if references in that paragraph to the acquisition of goods or services by a person, or to the acquisition of services by a person, included references to the supply of goods or services to a person, or the supply of services, to a person, as the case may be; and

(e) the price for the supply or possible supply, or the acquisition or possible acquisition, of services comprising or including a loan or loan facility is taken to include the capital value of the loan or loan facility.

(12) Section 51A applies for the purposes of this section in the same way as it applies for the purposes of Division 1 of Part V.

(13) Expressions used in this section that are defined for the purpose of Part IVB have the same meaning in this section as they do in Part IVB.

(14) In this section, listed public company has the same meaning as it has in the Income Tax Assessment Act 1997 .

Motor Vehicle Repair Industry Council (MVRIC)

Motor Vehicle Repair Industry Council (MVRIC)

Description

The Motor Vehicle Repair Industry Authority (MVRIC) provides a free alternative dispute resolution process in relation to the standard and/or fair cost of motor vehicle repairs. It aims to resolve disputes between motor vehicle repairers and customers. Customers must discuss and attempt to resolve dispute with repairer before contacting MVRIC. It does not handle warranty or insurance disputes. The role of the MVRIA is to facilitate a fair and efficient motor vehicle repair industry in which repairers are appropriately equipped and trained to achieve effective and safe repairs at a reasonable cost to consumers. The MVRIA is a New South Wales Government Statutory Authority. More information can be obtained from the website of the NSW Office of Fair Trading.

Office address

239 Great North Road
FIVE DOCK NSW 2046

Mailing address

PO Box 213
FIVE DOCK NSW 2046

Telephone number(s)

Direct: 02 9712 2200

Email(s)

Information: mvria@oft.commerce.nsw.gov.au

Fax number

02 9712 1432

Web address

http://www.fairtrading.nsw.gov.au/

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