Auto Masters breakdown: 12-year fight leaves a man facing ruin

Auto Masters, which was found by the WA Supreme Court to have acted unconscionably in trying to take his business off him, ended up with it anyway, paying a giveaway price of less than $4000 after Mr Coombes went to the wall financially. His life has been destroyed by the legal battle, and he now works as a labourer to pay his bills.
August 10, 2010

Auto Masters breakdown: 12-year fight leaves a man facing ruin
Chalpat Sonti


Denise and Dave Coombes have lived a nightmare in the past 12 years as they fight for justice. Photo: Chalpat Sonti

Dave Coombes has done no wrong, but he’s lost his house and his business after being forced into court to defend himself. Now he wants compensation, writes Chalpat Sonti.

It is a story that could happen to anyone, but unfortunately for Dave Coombes, it has happened to him.

The Ballajura man, 50, has been involved in a 12-year fight with a major franchise, several lawyers, the federal government and one of its watchdogs, yet he is still standing and prepared to go on, despite losing everything but his family.

Mr Coombes, a former franchisee of motor vehicle repairer Auto Masters, is seeking compensation from the federal government of at least $1.8 million after his successful business was destroyed and his pleas for help were rejected by the watchdog charged with policing dodgy commercial behaviour.


The Midland Auto Masters store that the company tried to take off Mr Coombes.

Auto Masters, which was found by the WA Supreme Court to have acted unconscionably in trying to take his business off him, ended up with it anyway, paying a giveaway price of less than $4000 after Mr Coombes went to the wall financially.

His life has been destroyed by the legal battle, and he now works as a labourer to pay his bills.

"All I've ever done is stand up for myself and what I believed was right," Mr Coombes said.


Dave Coombes’ Morley home was among the victims of his fight for justice.

"Because I'm the little bloke, I get squashed while the government refuses to intervene."

Called an "act of grace" payment, the compensation he is seeking can be paid to people unfairly disadvantaged by the Commonwealth.

Mr Coombes argues that he has been hard done by on two counts.

Firstly, the Australian Competition and Consumer Commission should have stepped in to help him. Then, he applied the law correctly but went broke in the process.

That came after a decision he was forced to make because the ACCC would not back him: either accept Auto Masters' attempt to take his business off him, and be left with nothing, or go through expensive litigation to hold on to his business.

He chose the latter, and won, but has been paying for it ever since.

Automotive relationship breakdown
Mr Coombes got into dispute with Auto Masters in 1998 and was served with a breach of contract notice the following year.

The company claimed he had not processed invoices in order to delay paying it a royalty, and wanted to take his franchise off him.

As the dispute heated up, Mr Coombes went to the ACCC for help. After a two-year investigation by the watchdog, that was refused.

He then approached former financial services minister Joe Hockey, who accused Mr Coombes of exerting pressure "in any manner he can, including furthering his complaints against ACCC staff" to ensure it took actions against Auto Masters.

The "complaints" to which Mr Hockey referred was a claim by Mr Coombes that an ACCC investigator raised the issue of bribes with him, his wife, and his lawyer at a meeting and told them that illicit payments had helped to solve disputes in other industries.

An internal ACCC investigation rejected that complaint, though it conceded the issue of bribes "generally" was discussed.

Dispute heads to the courts
Mr Coombes then defended his business from Auto Masters in the Supreme Court - and not only were the company's claims dismissed, Judge Nicholas Hasluck found in favour of Mr Coombes on his counter-claim.

He was awarded about $93,000 in damages, plus costs, as well as the reinstatement of his franchise.

Auto Masters appealed the judgement and the extent of the damages, but that was thrown out in 2004.

However, a dispute with his lawyers over the fees charged for the court case meant no claim for costs was ever lodged by his legal representatives.

So while Auto Masters paid the damages claim - which went towards the legal bills - Mr Coombes, by then almost broke, had no way of recovering the far greater sum of more than $400,000 in costs.

A Law Society-appointed costs lawyer was engaged to advise on the bill, but this lawyer then pursued Mr Coombes into bankruptcy over his own unpaid fees of $12,000.

Mr Coombes' company was later liquidated and he was forced to sell his Morley property and many other possessions to help pay his bills.

As a final insult, Mr Coombes' business was sold back to Auto Masters for $3750, despite an offer of $15,000 being received for just some of the plant and equipment.

The same business was valued during the court proceedings by Auto Masters at $195,000, and by Mr Coombes at $300,000.

"I think the fact that Auto Masters did what they did, said what they said, and were found guilty of doing, yet got my whole business back for about $4000 flies in the face of everything we fought for," Mr Coombes said.

"They haven't even had to pay my legal costs and they haven't come out of this badly. It flies in the face of justice."

Consumer watchdog 'left wanting'
The ACCC – which declined to answer questions from for this story - repeatedly refused to back his case, because of a legal opinion it has never made available.

Yet it released two earlier opinions in response to questions in the Senate and has used his story as a case study in a guide it published.

It has also provided confusing and contradictory answers to the Senate for questions asked on behalf of Mr Coombes.

The ACCC's investigation has twice been cleared by the Commonwealth Ombudsman, which said it did not see "any inconsistency in a Supreme Court decision in (Mr Coombes's) favour and the ACCC decision not to pursue this matter".

However, the Ombudsman said some aspects of the ACCC's actions "raised concerns", including its responses to the Senate questions.

The fight has also seen politicians from all sides of federal politics approached. Some backed, then backed away from, Mr Coombes.

The former coalition government told Mr Coombes his woes were "as a result of your own private decisions" in deciding to fight Auto Masters in court. The Labor government has also refused to help.

Perth MP and Foreign Affairs and Trade Minister Stephen Smith wrote to Finance Minister Lindsay Tanner supporting an act of grace payment, as did former Labor Senator Ruth Webber.

Former Liberal Senator Chris Ellison and State Liberal MP Rhonda Parker backed him while the Coalition was in power.

But Mr Smith recently washed his hands of the case for the second time, his office telling Mr Coombes "there is nothing more (we) can do to assist you".

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