Hi mate. Im not a lawyer, but am nearly finished law degree. This is not qualified legal advice, and I would advise that she sees a solicitor which should cost only a couple hundred dollars for an hour.
As Jet said, document everything first, and then sit down with them and talk it through.
My take on this is that the seller of the vehicle now needs to show that the 1800 was the value of his loss on the vehicle, or he suffered such loss through the disposal of the vehicle.
The original agreement is not capable of being performed as the thing is sold. The original contract was the repair of the vehicle to a value appraised by the panel beater, not the payment of cash equivalent to the owner. As the panel beater never performed the work, no payment is required.
I can dig through some precedents on similar matters and pm you some info. Without going into all of it here, if it were me in that situation I would be happy to go to court or small claims equivalent. But like anything, a lot will come down to what was discussed and agreed between the parties. Recommend dropping a carton or bottle to the panel beater for his honesty - if it goes to court, you will need him there to vouch for the details