Australia

4WD hire company admits customer it was suing did nothing wrong

Related Story: 'Completely unreasonable': How a 4WD hire company sues tourists Related Story: 'Unscrupulous, well-rehearsed' 4WD scam ripping off tourists, Qld Parliament told

A prominent 4WD hire company described in Queensland Parliament as "unscrupulous" and "fraudulent" has settled one of its major cases against a customer, acknowledging the man did not breach his contract and did not cause any damage to the vehicle.

Key points:

  • Customer of Australian 4WD Hire sought evidence of speeding fines from police, was told they didn't exist or couldn't be found
  • Company settles case with Sydney man Glen McGarry but denies any wrongdoing
  • Other customers have reported being charged for damage they didn't cause and hit with speeding fines they don't believe existed

The complete backdown by Gold Coast-based company Australian 4WD Hire comes after the ABC heard from customers who had been charged for speeding fines they believe did not exist.

In one case, the customer was able to prove he did not receive any speeding fines.

Sydney man Glen McGarry was accused by Australian 4WD Hire of using contaminated fuel in his hire vehicle, tampering with its electronics and speeding.

Mr McGarry vehemently denied the allegations, maintaining he looked after the vehicle as if it were his own and did not speed.

Australian 4WD Hire has now settled the case with Mr McGarry — two years after they first demanded more than $15,000 from him.

While the terms are confidential, the ABC can reveal the company has absolved Mr McGarry of any wrongdoing.

"Glen McGarry and his co-hirers did not breach the hire contract, were not negligent and did not cause any damage to the vehicle from Australian 4WD Hire in November 2016," the signed statement said.

It also said Mr McGarry and his co-hirers had never defaulted on a debt owing to the company.

Mr McGarry said he was happy the settlement showed he had never been in the wrong.

"The claim by Australian 4WD Hire against me was a baseless attempt to extort money from me," he said.

"It should never have been brought against me. I am fortunate that I had the time and the money to fight a long and expensive court battle against them."

Glen McGarry sits at a park picnic table

Other disgruntled customers of Australian 4WD Hire have told the ABC they also were hit with speeding fines, which they disputed.

When they asked for evidence, the company could not produce any documents.

The ABC also understands at least one 4WD was not comprehensively insured, despite the company advertising all its vehicles were comprehensively covered.

Customers said the company found technicalities to avoid claiming on insurance and to gouge more money from them.

"It's clearly their business model to effectively have their customers pay for the repairs and maintenance to the vehicle," Mr McGarry said.

Australian 4WD Hire has denied any wrongdoing.

In a statement, the company said it had "never fabricated a fine for any reason", and that it filled out required paperwork and returned it to the issuing police authority to pursue.

On insurance, the company said its vehicles were covered by "a mix of combined coverages" but the vehicle in question was comprehensively insured.

This is despite an insurance certificate produced in court showing the vehicle was only covered for third-party property damage during the relevant time.

No certificate showing comprehensive insurance was produced.

However, none of this would have come to light had Mr McGarry not fought back in the Brisbane Magistrates Court.

After a disaster holiday, an unusual email

When Mr McGarry sought information about his alleged speeding fines, police departments in WA, SA and Victoria told him they did not exist or could not be found.

The Victorian Justice and Regulation Department FOI officer wrote:

"Basically zero speeding fines, zero evidence," Mr McGarry said.

He had hired a LandCruiser in November 2016 to travel from Melbourne to Perth with a group of mates. He paid a $5,000 security bond.

The trip started well, but when he got to WA he struck car trouble twice. The broken-down vehicle had to be towed to a mechanic in Albany.

Mr McGarry said that in a phone call to company fleet manager Vitali Roesch, he was assured the bond would be returned and money refunded for the days they could not use the vehicle.

Vitali Roesch and his wife Marnya Kosukhina sitting on a outside couch with champagne in hand.

Mr Roesch was the company's director until he resigned in October 2015, handing sole directorship to his wife Marnya Kosukhina.

He was declared bankrupt in February 2016 and is yet to be discharged.

About two weeks later, when Mr McGarry was back in Sydney, he received "an unusual email" from the company's Christine Burgess.

"… unfortunately vehicle returned in a shocking condition with multiple very serious damages with multiple breaches of contract," it stated.

The email from Ms Burgess blamed Mr McGarry for the alternator failing: "There was an abundance of debris, dust and sand inside."

It also held him responsible for engine failure, alleging contaminated fuel had been used; accused him of "a multitude of scratches, scuffs and dents"; tampering with the vehicle's electronics; and speeding, including receiving three speeding fines.

"The state of the vehicle is absolutely shocking!" the email said.

"You managed to do more damage to this vehicle during your hire than has been done in its entire time on our fleet, over 100,000 kms."

Australian 4WD Hire vehicle on the back of a tow truck

The damage is "clearly of a malicious and negligent nature", breached the contract and therefore "voids any and all insurance", it said.

Ms Burgess informed him the cost of repairs was just over $15,000. The amount had already been charged to his credit card.

"I quickly checked and sure enough, $15,000 was gone in an instant," Mr McGarry said.

He later had the charges reversed by his bank.

Australian 4WD Hire then sued him for the $15,000.

"I chose to fight. The injustice was there, I hadn't done anything wrong, it was just completely made-up," Mr McGarry said.

"They need to be stopped from finding further customers which they turn into, effectively, a victim of their business model."

Same car, another holiday debacle

Less than a year later, Stuart Edwards and Janetta Welinska, from Tasmania, hired the exact same vehicle Mr McGarry had used.

"It was a disaster, it was a complete disaster," Mr Edwards said of their trip.

The holiday ended in court — with Australian 4WD Hire seeking more than $54,000 from the couple, claiming they damaged the hire vehicle so badly it had to be written off.

Within 24 hours of picking up their vehicle in Broome, WA, Mr Edwards and Ms Welinska had become bogged on the Barred Creek Road, north of the tourist town.

Australian 4WD Hire vehicle bogged near Broome in WA

With no phone reception, they walked for help, returning the next day to find high tidal flows had reached the vehicle.

It was towed back to Broome, where they received a call from a man they believed was Vitali Roesch.

"He was extremely threatening and aggressive," Mr Edwards said.

"He basically told us the vehicle was a complete write-off, and we had to pay the company $49,000 to buy the vehicle from them or they would sue us in court.

"We told him we didn't have that kind of money lying around and we would pay any insurance excess and they refused that."

Stuart Edwards and Janetta Welinska

The claim quickly rose to $54,000.

"I just couldn't believe it. It was completely ridiculous," Mr Edwards said. "Australian 4WD have repeatedly claimed we were negligent. That's why they're suing us.

"That's clearly not true. It was an accident. And the reason we took — or believed we had — insurance is for accidents."

The ABC can reveal the company has also since agreed to settle the case against the couple, paying them a sizable amount.

But Mr Edwards and Ms Welinska were confused as to why the company wouldn't claim on their insurance instead of going to court.

Mr McGarry — who had made contact with the pair — believed he had found the answer.

Document shows no comprehensive insurance for two years

An insurance certificate Australian 4WD Hire filed to Brisbane Magistrates Court for Mr McGarry's case shows the vehicle was insured only for third-party property damage from December 2015 to December 2017 — the period in which both parties hired it.

Both said they never would have hired the vehicle had they known they were not comprehensively insured.

"Not only does it completely contradict what they say — that their vehicles are comprehensively insured for off-road use — but by only having third-party property insurance, the vehicle isn't insured at all," Mr Edwards said.

The company's director, Marnya Kosukhina, insisted the vehicle in question had comprehensive and third-party property insurance.

She said the policies were between the company and insurers, not any other party or customers, but customers were only covered if they adhered to the terms and conditions.

The policy excludes damage caused by negligence in a single-vehicle accident.

A promotion video for Australian 4WD Hire shows vehicles driving through water.

Independent insurance expert Denis Nelthorpe, from community legal centre West Justice, has been giving advice on insurance issues for 25 years.

He was scathing of the Australian 4WD Hire's terms and conditions, saying to exclude negligence was essentially to exclude the vast majority of claims.

"This isn't standard," Mr Nelthorpe said. "The hire vehicle industry has long had a history of offering very limited coverage.

"But I've never before seen a policy or an arrangement that excluded single and motor vehicle collisions based on negligence. That's a bit like selling someone a yacht that can't be put in the water.

"Most people would be absolutely astounded if they understood the true nature of the coverage of that arrangement."

He was also critical of the company's terms and conditions that state driving above the speed limit — as monitored by the vehicles' fitted GPS technology — could cause excessive wear and damage, in which case the customer is liable.

"For a hire company to suggest that it was going to charge a hirer not because there was a loss but because it alleges they were speeding is an absolutely extraordinary proposition," Mr Nelthorpe said.

"I've never heard of that before and that is just unconscionable."

Australian 4WD Hire denies it has done anything wrong

The ABC first reported on concerns about the company in June this year.

Since then, dozens of people have contacted the ABC to report similar experiences — that they were charged for damage they did not cause and hit with speeding fines they do not believe they received.

The Australian Competition and Consumer Commission is investigating.

Ms Kosukhina denies the company has done anything wrong in either Mr McGarry's case, or Mr Edwards and Ms Welinska's case.

"The case of Mr McGarry which is multiple mechanical breakdown caused by his negligence — are not insurance issue!!!" her email response to the ABC stated.

"Mechanical breakdowns are not insurable!!!

"In case of Mr Edwards and Janetta Welinska, is deemed to be reckless and negligent and we cannot make a claim and we are forced to handle the costs and repairs ourselves."

Ms Kosukhina denied the company had ever threatened a customer "however when we are backed against a wall by a customer extorting us, we have no other options but to take legal actions," she said.

She said the company had done 9,600 hires since January 2014, and a large portion were repeat customers.

"Australian 4WD Hire has never and will never withhold any customer's bond without clear substantiated evidence," she said.

Original Article