Alex Pordage t/as Pattisserie Fe Fi Fo v Chrystal & Co Pty Ltd t/as Caterlink [2014] NSWCATCD 72

Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Alex Pordage t/as Pattisserie Fe Fi Fo v Chrystal & Co Pty Ltd t/as Caterlink [2014] NSWCATCD 72 Hearing dates: 4 March 2014 Decision date: 08 May 2014 Before: R Harris, General Member Decision: (1) The respondent is to pay the applicant the sum of $15,529.10 on or before the 20 May 2014 (2) The respondent is at its own expense on or before the 20 May 2014 collect the freezer cabinet from the applicants premises Catchwords: Consumer Guarantees, acceptable quality, major failure, right to reject. Legislation Cited: Australian Consumer Law Category: Principal judgment Parties: Alex Pordage t/as Patisserie Fe Fi Fo (applicants) Chrystal & Co Pty Ltd t/as Caterlink (respondent) File Number(s): GEN13/48933

reasons for decision APPLICATION 1This matter was heard at Glen Innes on 4 March 2014. The applicant appeared in person and Mr Belton appeared by phone on behalf of the respondent. Judgment was reserved on that day. 2In the proceedings which were commenced on 16 September 2013 the applicant consumer initially sought compensation in the sum of $30,000.00 from the respondent supplier arising from the supply to the applicant by the respondent of a Skope custom 3 door remote freezer cabinet for the sum of $10,395.00 in August 2012 for use in the applicants catering business. JURISDICTION 3The respondent is based in Western Australia and the applicant took delivery of the cabinet in Queensland and then arranged to transport it to Inverell in New South Wales. The respondent at an earlier hearing had raised the issue of the Tribunals jurisdiction. It was found at that earlier hearing that the contract for the purchase had been formed in New South Wales when the applicant had posted his signed acceptance of the respondents offer from Inverell in New South Wales and that the Tribunal therefore had jurisdiction to hear and determine the claim pursuant to Section 7(2)(c) of the Consumer Claims Act 1998. ISSUES 4At the hearing the applicant claimed a refund of the purchase price, $6,345.60 for loss of products due to the malfunction of the unit, $2,134.10 being the cost of installation of the unit together with damages for loss of profit and the time spent seeking redress for the alleged deficiencies in the product supplied. APPLICANT'S EVIDENCE 5The applicant gave evidence and relied upon documents that had been provided to the Tribunal and the respondent pursuant to orders previously made by the Tribunal for the exchange of documents which were admitted into evidence. The applicant also sought to rely on further documents that had not been provided to the Tribunal or the respondent in accordance with the Tribunals orders. These documents were not admitted into evidence as they had not been served and could not even be shown to the respondent who was appearing by phone and it would have been unfair to take into account documents that the respondent had not even had the opportunity to look at. 6The applicant's evidence was that he ordered the custom built unit to fit 660x 460 bakbar trays, took delivery of the cabinet in August 2012 and that it had to be installed at his business premises together with a compressor and appropriate plumbing so that it would operate. Initially when delivered the doors were incorrectly made and the shelving was not to specification however this was apparently rectified and the unit was installed by a Mr Taylor for the sum of $2,134.10 on 4 November 2012. There was no report or statement provided from Mr Taylor the applicant stating that he no longer had a relationship with Mr Taylor. By February 2103 the unit had developed a number of cooling, freezing and icing issues. The unit would not hold temperature as a freezer. 7The applicant made various complaints and requested a refund which was not forthcoming. It was suggested that the wrong compressor had been fitted. This may have been the result of the fact that the unit which had been supplied had been incorrectly labelled by the manufacturer leading the installer into error although as indicated no evidence was submitted from the installer. A second larger compressor was fitted but the applicant continued to experience problems. These were ultimately fixed on or about 18 July 2013 by a representative of the New Zealand manufacturer Skope. The unit was operating from then but not operating efficiently according to the applicant. 8There was no expert evidence submitted in relation to this claim of continuing inefficiency. A safe food assessment was carried out by Inverell Shire Council on 17 November 2013 and it was found that there was an issue with the unit as the sliding action of the trays was producing metal shavings which were contaminating the food stored in the unit. The applicant was directed not to use the unit until the issue with metal shavings had been rectified and the unit inspected by Councils Environmental Health Officer. The unit has not been used since this direction was made. This problem had not been rectified by the time of the hearing. 9The applicant gave evidence that on at least 3 occasions he had lost product from the unit which had to be thrown out. He estimated the loss in this regard at $6,345.60. He claimed to have lost profits and to have spent many hours trying to resolve the problem for which he was entitled to compensation. RESPONDENT'S EVIDENCE 10The Mr Belton gave evidence on behalf of the respondent and relied upon documents that had been provided to the Tribunal and the applicant pursuant to orders made by the Tribunal for the exchange of documents. He conceded that the unit had initially been supplied with the incorrect shelving brackets. He was unable to say whether the complaint about the production of metal shavings was a fault or not. He claimed that most of the problems had arisen because the wrong compressor was initially fitted by the applicant's installer and that most of those problems were resolved when the larger compressor was fitted although the applicant continued to have problems which were ultimately resolved when the representative of the manufacturer attended and made adjustments in July 2013. He pointed out that any mislabelling was the fault of the manufacturer and that his company had supplied the unit directly from the manufacturer. He pointed out that installation costs were always the customer's responsibility and that the amount claimed for loss of product was very specific and not itemised. 11Towards the end of the hearing Mr Belton suggested that the manufacturer should be present however the Tribunal ruled that it was too late to join the manufacturer as a party at that stage. LEGISLATION 12The Australian Consumer Law applies to this supply by the respondent to the applicant as the cost of the goods supplied was less than $40,000.00. The applicant is entitled to recover compensation for any breach of the consumer guarantees including compensation for any reasonably foreseeable consequential loss. The Australian Consumer Law provides in Sections 54, 55, 259, 260, 261, 262 and 263 as follows: 54 Guarantee as to acceptable quality (1) If: (a) a person supplies, in trade or commerce, goods to a consumer; and (b) the supply does not occur by way of sale by auction; there is a guarantee that the goods are of acceptable quality. (2) Goods are of acceptable quality if they are as: (a) fit for all the purposes for which goods of that kind are commonly supplied; and (b) acceptable in appearance and finish; and (c) free from defects; and (d) safe; and (e) durable; as a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods), would regard as acceptable having regard to the matters in subsection (3). (3) The matters for the purposes of subsection (2) are: (a) the nature of the goods; and (b) the price of the goods (if relevant); and (c) any statements made about the goods on any packaging or label on the goods; and (d) any representation made about the goods by the supplier or manufacturer of the goods; and (e) any other relevant circumstances relating to the supply of the goods. (4) If: (a) goods supplied to a consumer are not of acceptable quality; and (b) the only reason or reasons why they are not of acceptable quality were specifically drawn to the consumer's attention before the consumer agreed to the supply; the goods are taken to be of acceptable quality. (5) If: (a) goods are displayed for sale or hire; and (b) the goods would not be of acceptable quality if they were supplied to a consumer; the reason or reasons why they are not of acceptable quality are taken, for the purposes of subsection (4), to have been specifically drawn to a consumer's attention if those reasons were disclosed on a written notice that was displayed with the goods and that was transparent. (6) Goods do not fail to be of acceptable quality if: (a) the consumer to whom they are supplied causes them to become of unacceptable quality, or fails to take reasonable steps to prevent them from becoming of unacceptable quality; and (b) they are damaged by abnormal use. (7) Goods do not fail to be of acceptable quality if: (a) the consumer acquiring the goods examines them before the consumer agrees to the supply of the goods; and (b) the examination ought reasonably to have revealed that the goods were not of acceptable quality. 55 Guarantee as to fitness for any disclosed purpose etc (1) If: (a) a person (the supplier ) supplies, in trade or commerce, goods to a consumer; and (b) the supply does not occur by way of sale by auction; there is a guarantee that the goods are reasonably fit for any disclosed purpose, and for any purpose for which the supplier represents that they are reasonably fit. (2) A disclosed purpose is a particular purpose (whether or not that purpose is a purpose for which the goods are commonly supplied) for which the goods are being acquired by the consumer and that: (a) the consumer makes known, expressly or by implication, to: (i) the supplier; or (ii) a person by whom any prior negotiations or arrangements in relation to the acquisition of the goods were conducted or made; or (b) the consumer makes known to the manufacturer of the goods either directly or through the supplier or the person referred to in paragraph (a)(ii). (3) This section does not apply if the circumstances show that the consumer did not rely on, or that it was unreasonable for the consumer to rely on, the skill or judgment of the supplier, the person referred to in subsection (2)(a)(ii) or the manufacturer, as the case may be. 259 Action against suppliers of goods (1) A consumer may take action under this section if: (a) a person (the supplier ) supplies, in trade or commerce, goods to the consumer; and (b) a guarantee that applies to the supply under Subdivision A of Division 1 of Part 3-2 (other than sections 58 and 59(1)) is not complied with. (2) If the failure to comply with the guarantee can be remedied and is not a major failure: (a) the consumer may require the supplier to remedy the failure within a reasonable time; or (b) if such a requirement is made of the supplier but the supplier refuses or fails to comply with the requirement, or fails to comply with the requirement within a reasonable time--the consumer may: (i) otherwise have the failure remedied and, by action against the supplier, recover all reasonable costs incurred by the consumer in having the failure so remedied; or (ii) subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection. (3) If the failure to comply with the guarantee cannot be remedied or is a major failure, the consumer may: (a) subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection; or (b) by action against the supplier, recover compensation for any reduction in the value of the goods below the price paid or payable by the consumer for the goods. (4) The consumer may, by action against the supplier, recover damages for any loss or damage suffered by the consumer because of the failure to comply with the guarantee if it was reasonably foreseeable that the consumer would suffer such loss or damage as a result of such a failure. (5) Subsection (4) does not apply if the failure to comply with the guarantee occurred only because of a cause independent of human control that occurred after the goods left the control of the supplier. (6) To avoid doubt, subsection (4) applies in addition to subsections (2) and (3). (7) The consumer may take action under this section whether or not the goods are in their original packaging. 260 When a failure to comply with a guarantee is a major failure A failure to comply with a guarantee referred to in section 259(1)(b) that applies to a supply of goods is a major failure if: (a) the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or (b) the goods depart in one or more significant respects: (i) if they were supplied by description--from that description; or (ii) if they were supplied by reference to a sample or demonstration model--from that sample or demonstration model; or (c) the goods are substantially unfit for a purpose for which goods of the same kind are commonly supplied and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or (d) the goods are unfit for a disclosed purpose that was made known to: (i) the supplier of the goods; or (ii) a person by whom any prior negotiations or arrangements in relation to the acquisition of the goods were conducted or made; and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or (e) the goods are not of acceptable quality because they are unsafe. 261 How suppliers may remedy a failure to comply with a guarantee If, under section 259(2)(a), a consumer requires a supplier of goods to remedy a failure to comply with a guarantee referred to in section 259(1)(b), the supplier may comply with the requirement: (a) if the failure relates to title--by curing any defect in title; or (b) if the failure does not relate to title--by repairing the goods; or (c) by replacing the goods with goods of an identical type; or (d) by refunding: (i) any money paid by the consumer for the goods; and (ii) an amount that is equal to the value of any other consideration provided by the consumer for the goods. 262 When consumers are not entitled to reject goods (1) A consumer is not entitled, under section 259, to notify a supplier of goods that the consumer rejects the goods if: (a) the rejection period for the goods has ended; or (b) the goods have been lost, destroyed or disposed of by the consumer; or (c) the goods were damaged after being delivered to the consumer for reasons not related to their state or condition at the time of supply; or (d) the goods have been attached to, or incorporated in, any real or personal property and they cannot be detached or isolated without damaging them. (2) The rejection period for goods is the period from the time of the supply of the goods to the consumer within which it would be reasonable to expect the relevant failure to comply with a guarantee referred to in section 259(1)(b) to become apparent having regard to: (a) the type of goods; and (b) the use to which a consumer is likely to put them; and (c) the length of time for which it is reasonable for them to be used; and (d) the amount of use to which it is reasonable for them to be put before such a failure becomes apparent. 263 Consequences of rejecting goods (1) This section applies if, under section 259, a consumer notifies a supplier of goods that the consumer rejects the goods. (2) The consumer must return the goods to the supplier unless: (a) the goods have already been returned to, or retrieved by, the supplier; or (b) the goods cannot be returned, removed or transported without significant cost to the consumer because of: (i) the nature of the failure to comply with the guarantee to which the rejection relates; or (ii) the size or height, or method of attachment, of the goods. (3) If subsection (2)(b) applies, the supplier must, within a reasonable time, collect the goods at the supplier's expense. (4) The supplier must, in accordance with an election made by the consumer: (a) refund: (i) any money paid by the consumer for the goods; and (ii) an amount that is equal to the value of any other consideration provided by the consumer for the goods; or (b) replace the rejected goods with goods of the same type, and of similar value, if such goods are reasonably available to the supplier. (5) The supplier cannot satisfy subsection (4)(a) by permitting the consumer to acquire goods from the supplier. (6) If the property in the rejected goods had passed to the consumer before the rejection was notified, the property in those goods revests in the supplier on the notification of the rejection. ISSUES 13The issues in this case were, firstly: were the goods supplied not of acceptable quality in breach of the Consumer Guarantee of acceptable quality? If the consumer guarantee of acceptable quality was not complied with, was it a major failure? was the applicant entitled to reject the goods and obtain a refund and what, if any, compensation was the applicant entitled to? FINDINGS 14Having considered the whole of the evidence both oral and documentary, the Tribunal finds that the goods that were supplied to the applicant by the respondent were not of acceptable quality in a number of respects. Firstly, the incorrect shelving brackets were supplied. 15The Tribunal finds that, although further brackets were supplied, the problems that now exist with the production of metal shavings is more probably than not a defect in the product supplied or a failure to supply a product that was fit for the disclosed purpose of use with the trays specified by the applicant. The product that was supplied was supplied with an incorrect label that resulted in the fitting of an incorrect compressor, although this issue has been remedied. 16The Tribunal finds that the failure to comply with the consumer guarantee of acceptable quality and fitness for disclosed purpose was a major failure because no reasonable consumer would have acquired the goods if they had known of the failures to comply with the consumer guarantees in this case. The Tribunal finds that the applicant is entitled to reject the goods and that the rejection period has not expired. 17The Tribunal finds that, whilst the goods have been attached to the applicant's premises, they can be removed without damage. The Tribunal further finds that the goods cannot be returned to the supplier without significant cost to the applicant and that the respondent must collect the goods at the respondent's expense. The Tribunal is not satisfied that the applicant has lost any profits as a result of the respondent's failure to comply with the consumer guarantee. 18The Tribunal is satisfied that the applicant lost some product as a result of the failure to comply with the consumer guarantee but is not persuaded that the amount claimed is justified given the lack of particularisation and supporting evidence. Notwithstanding the difficulty in assessing damages doing the best it can in the circumstances the Tribunal will allow the sum of $3,000.00. The Tribunal will also allow the amount of the installation costs in the sum of $2,134.10 together with a refund of the purchase price in the sum of $10,395.00. 19The Tribunal therefore makes the following orders (1)The respondent is to pay the applicant the sum of $15,529.10 on or before the 20 May 2014. (2)The respondent is at its own expense collect the freezer cabinet from the applicants premises on or before the 20 May 2014. (signed) R Harris General Member Civil and Administrative Tribunal of New South Wales 8 May 2014 I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar