I generally consider myself a savvy, experienced traveller. I travel to Guatemala regularly and have travelled to Peru, Bolivia, Ecuador, Argentina, Thailand and China without ever experiencing any problems. But my biggest travel mishap by far occurred where I least expected it: Australia.
During my year of studying in Australia, I found myself the middle of a car rental scam of epic proportions and a subsequent legal battle that feels like something straight out of an episode of the hit Australian TV series, Rake. It certainly makes for an entertaining read, but entertainment aside, it highlights a number of very serious problems, many of which I would more typically expect to find in the type of under-developed countries I have become accustomed to traveling to.
I had rented a car from East Coast Car Rentals in Sydney, hoping to go for a day trip. But I hadn’t driven far when the outer CV joint failed. If this had happened on a high speed road it could have caused a serious and potentially fatal crash. Fortunately, I was traveling at a low speed at the time. The outer CV joint, which connects the wheel to the axle, is one of the most robust parts of the undercarriage and failure is almost always due to lack of maintenance.
After waiting for two hours stranded and blocking traffic on a major road as I tried to get help from the rental company, I was told I would have to call a tow truck and pay for it myself. When I returned to the office, the staff insisted that I pay $5,500 for the damage, saying the rental agreement made me liable for any damage to the vehicle, regardless of fault. I was dazed and shaken from the ordeal and not in the mood to argue, assuming the “comprehensive” insurance I had purchased from Auto Europe’s Driveaway Holidays voucher as part of the rental package would cover it.
But Driveaway Holidays directed me to a fine print clause buried in a long list of terms and conditions, which I only found after clicking through two small links online hidden at the bottom of each page, stating they did not cover damage to the roof or undercarriage of the vehicle. Apparently, the insurance was not so “comprehensive” after all.
I contacted the rental company the day after the incident disputing the charge, even before hearing my insurance was worthless, as I felt it was unfair regardless. After a month of being stonewalled, I warned I would be taking legal action if the money was not returned. In response, I was told they had just now inspected the vehicle (one month later) and concluded I was at fault. I was emailed a number of docked photographs and a sloppy, incoherent statement from somebody claiming to have inspected it:
I also discovered a large forum on TripAdvisor full of complaints similar to mine about unsafe rental vehicles and being charged for no-fault damage. It seems I was in good company.
I had to go to the New South Wales Civil Tribunal, the beginning of an epic drama that could put Judge Judy or any other Court drama to shame. Before the case could go to a hearing, I was required to attend a mediation, which the rental company used to try and intimidate me into dropping the case. I was shown several sloppy written statements from people they had hired and belligerently asked to explain how I was not at fault. Each time I explained what had happened the representative grew increasingly red-faced and belligerent and interrupted in an effort to dispute my story.
The hearing itself would have been comical and entertaining if it were not so stressful and frustrating. The whole thing was audio recorded. Below are two short clips of moments worth highlighting.
I watched throughout the hearing as the company’s representative stumbled over himself trying to argue their case. These were their opening “arguments” at about 1 hour and 1 minute into the full audio.
In company’s given timeline, they hired a mechanic to assess the damage and give a repair quote two days after the incident and then waited a month (until I threatened legal action) to have anybody look into the cause of the damage. I pointed out that taking apart the damage to assess it first would have made any accurate subsequent inspection to determine its cause impossible. The other side looses their composure and becomes aggressive and defensive.
The hearing seemed to go well, until I got the ruling later that evening, which seemed to contradict many key aspects of Australian Consumer Law. Despite the rental company’s stumbling over themselves and inability to offer a clear explanation for how the damage occurred, the ruling stated that they could still hold me liable since I had failed to prove that I DID NOT hit anything. I had been presumed guilty until proven innocent. There was no mention of the questions and flaws I raised with their timeline in Clip 2 and which the company failed to address and respond to, or any of the other red flags that occurred throughout and are highlighted in those two audio clips.
Despite there being no credible claims or evidence to show that I was in any way to blame for the damage, I was faulted for failing to prove my description of the vehicle being in bad condition when I picked it up (Section 2), failing to prove my description of how the incident occurred (Section 7) and had apparently failed to prove the company’s alleged inspection process, which began in direct response to my threat of legal action and subsequent lodging of the case, was biased (section 12, despite stating in the first sentence that those who produced the documents the company provided were “not at arms length” with them). Apparently my point about the CV joint usually failing due to lack of maintenance and hardly ever due to a sudden impact, which the rental company failed to address or respond to, was not taken into consideration.
The rental company, on the other hand, was allowed to rely on the out of court statements made by those “not at arms length” parties (these would have been inadmissible as hearsay in a formal court setting) , which it repeatedly emphasized were “unsigned and unsworn” in sections 9-11, despite my sworn testimony. According to the last sentence in section 9, the company did not even have to prove the people who made them actually inspected the vehicle at all. You can see above for yourself the documents referred to in these sections, and indeed they give little evidence of what happened or that any thorough inspection ever actually took place.
The decision was at odds with Australian laws and regulations, which I had researched extensively and been advised of in legal consultations prior to the hearing. Under Australian Contract Law, the burden of proof rests on whichever side is claiming damages from the other. In this case, since the rental company was charging me and claiming I caused damage to the vehicle, the burden was for them to prove it, not for me to prove that I did not.
Additionally, the practice of charging for damage regardless of fault or cause, the grounds on which I was originally charged immediately after the incident and which the rental company effectively admitted was their policy, is also a violation of Australian law. In fact, authorities have taken other rental companies to Federal court and levied fines for such practices. Yet the ruling concluded in section 4 that the contract terms invoked by the rental company for this charge were not unlawful since their wording did not expressly state that they held customers liable for ALL damage to the vehicle regardless of fault or cause, but more precisely only applied to damage to the undercarriage of the vehicle or damage caused by any single vehicle accident (regardless of fault or cause, since the company acknowledged those terms were not defined). Yes, you read that correctly, don’t overthink it, it’s just as absurd as it looks.
As I prepared to appeal, I noticed a new detail while looking through the photographs the company had provided.
The first set of photographs show what the damage looked like right after the incident. These are the only photographs that show the damage in its full and original state. These were the photographs being presented in the first audio clip, where the representative for the rental company stumbled over himself and was unable to explain how they indicated I was at fault. These photographs were excluded from the assessments the company relied on and tried to use to support their claim against me.
Instead, the company relied on this second set of photographs (along with the docked photos accompanying the sloppy statement I received after threatening legal action), taken as part of their inspection a month later after it had already been taken apart by their smash repairer for a damage quote as I pointed out in Clip 2. You can see how the wheel has been straightened and rotated, and how this new non-original position is repeatedly highlighted and shown at different angles.
It explained why the other side had grown so nervous, aggressive and defensive by my comments about the damage being taken apart before the inspection in Clip 2. Not only had it been taken apart, it had apparently been rearranged to look like an at fault accident.
I raised this issue in my written grounds for appeal, and the company never addressed or made any effort to explain it in their written response or during the hearing. Instead they hired a lawyer to write their response, who tried to argue I should not be allowed to raise this issue on an appeal, effectively saying it should not be taken into account. When the evidence from the first hearing was resubmitted for the Appeals hearing, all of the photographs the company provided me were in low resolution, black and white, unlike the good resolution color copies that had been provided the first time. You can see the difference below:
But my hopes of getting this quickly resolved on appeal were again foiled by the tribunal. If the first hearing was a circus, the second one was even worse. Below are six clips I thought were worth highlighting.
A shocking slip up by the rental company, they actually admit they do not know how the damage occurred. This should have effectively destroyed their case, yet the Tribunal Members ignored it completely.
Instead, the Tribunal Members actually try to argue the other side’s case for them throughout the hearing, as is the case in this clip. So, absent the rental company having honored their terms and conditions and sent roadside assistance, the only thing they could have done (after leaving me stranded in the roadway for two hours and making me cover the towing cost) was hire a mechanic and say it was my fault?
Another instance of the Tribunal Members trying to argue the rental company’s case for them. This was their response when I showed them the transcript from Clip 2 of the first hearing. They effectively admit the rental company does not have to demonstrate or verify that anything they presented was truthful or that any fair and accurate inspection ever occurred.
If there is one audio clip out of all of them that you should listen to, make it this one. In this clip, the Tribunal Members appear to deliberately circumvent the authority of a higher court. I brought in an excerpt from a court judgement against another rental company where the exact same contract terms East Coast was relying on that hold consumers liable for damage regardless of fault were ruled unlawful by a Federal Court. In that case, Europcar pled guilty to the charges brought against it by regulators in exchange for a reduced penalty. But the Tribunal Members actually argued that since they had pled guilty and “agreed” their contract terms were illegal, it was not relevant to this case since East Coast Car Rentals did not agree these same contract terms were illegal. I did not realize the question of if one has broken the law depends on whether or not the offender agrees they have broken the law. “Yes your honor, my client did rob that convenience store, but he does not agree he has done anything illegal, therefore he’s innocent!” I really hope these Tribunal Members are not defense attorneys because that is the worst criminal defense argument ever! You can see the actual ruling here. Also the Court declaration that the contract terms in question are unlawful is right at the start of page 1, just above the levying of a $100,000 fine on page 3.
This short clip, which is perhaps just as important and worth listening to as the one above, shows how the presiding Members tried to argue the rental company bore no burden of proof and that I needed to find a way to prove this was a mechanical failure or be held liable no matter what. They seem to be at a loss for words when I correct them and inform them of the law and the legal basis for my case. Too bad there is no video recording to capture their facial expressions during this exchange, as their facial expressions and head nodding made it pretty clear they knew I was right.
I did not even bother bringing up the photographs and the repositioning of the wheel, as I knew it would not be heard fairly. I was sure they would come up with some other absurd defense on behalf of the rental company.
It was no surprise when I got the ruling, which made an even bigger debauchery of the law than the first one had. It was published online, (I’m sure the Tribunal Members assumed nobody would ever read it) and hid behind vague and ambiguous language to make it difficult for anyone not familiar with the case to follow it and make sense of what it said.
But what it says is quite alarming. Most significantly, it states that it is okay for rental companies to hold consumers liable for any damage to the vehicle, or more specifically, any damage due to a single vehicle accident, regardless of fault or cause, as it should be the responsibility of the renter to find a way to prove to the rental company that they are not at fault. This is in section 10. It is completely at odds with Australian laws and regulations.
Section 8 reaffirms what the Tribunal Members said in the clip shown above, effectively negating a Federal Court ruling on the matter. In section 9 they attempt to argue a single vehicle accident would not apply to a mechanical failure, another argument they tried to make during the hearing which, given the rental company’s repeated assertion that they did not define what constituted a single vehicle accident other than there being no other cars involved, is quite laughable and absurd. One of the terms struck down in the Federal Court ruling I cited also imposed a liability for any single vehicle accident.
Also alarming is section 25, which asserts that since I am not a qualified mechanic, my repeated under oath testimony about what actually happened was not relevant or worth taking into consideration, or should be given less weight than unsigned, unsworn out of court statements, which the Members affirm in section 19 were not “put forward by the lessor as expert opinion evidence.” In short, the ruling automatically presumes me to be at fault, regardless of facts or evidence, a point nicely summarized in section 26.
Since this post is getting rather long, I will cut it here. All relevant documents, including full audio recordings to both hearings, can be found below. You can read my follow up thoughts on this page.
Re__NSW_Civil_&_Administrative_Tribunal_-_GEN_17_26210_-_Matthew_Lesso_vs_Rental_Car_Holdings_Pty_Ltd_t_a_East_Coast_Car_Rentals____EMAILDownload
Unfortunately it will not allow me to upload the full audios for the hearings.