Banister v Bailair Pty Ltd

[2022] NSWCATCD 45

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Banister v Bailair Pty Ltd [2022] NSWCATCD 45

Hearing dates:

02 March 2022

Date of orders:

07 March 2022

Decision date:

07 March 2022

Jurisdiction:

Consumer and Commercial Division

Before:

Graham Ellis SC, Senior Member

Decision:

The application is dismissed.

Catchwords:

CONSUMER LAW – Consumer guarantees – Supply of goods – Whether of acceptable quality – Claims against supplier and manufacturer

Legislation Cited:

Australian Consumer Law (NSW)

Fair Trading Act 1987 (NSW)

Cases Cited:

Nil

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Lorraine Banister (First Applicant)
Graham Banister (Second Applicant)
Bailair Pty Ltd (First Respondent)
Pioneer International Pty Ltd (Second Respondent)

Representation:

Applicant (Self-represented)
Mr S Bailey (First Respondent)
Mr G Haydock (Second Respondent)

File Number(s):

HB 22/01195

Publication restriction:

Nil

REASONS FOR DECISION

Outline

1. The first respondent obtained an air conditioner from the second respondent and installed it in the home of the applicants. Although the applicants sought a refund on the basis that air conditioner was not if acceptable quality, the Tribunal, after considering the evidence and submissions, was not satisfied that the applicants had discharged the onus of proof which they bear.

History of the proceedings

2. On 11 January 2021 Mr and Mrs Banister (the applicants) lodged an application in relation to the supply of an air conditioner, naming Bailair Pty Ltd (Bailair) as the respondent, seeking an amount of $12,848. Their description of the problem in their application was as follows:

Two weeks after installation a/c unit started faults (H8) and not holding temperature as per setting. Bailair and Pioneer attended numerous times for service however problems persisted for 6 months. We requested Bailair & Pioneer to take the unit back and refund our money after 6 months of problems. That was on 20^th April 2020. Both parties refused! H8 fault is not even mentioned in Pioneer manual!! Our solicitors’ correspondence with Bailair commenced on July 22^nd 2020. No resolution resulted.

3. At the first directions hearing on 4 March 2021, directions were made for Pioneer International Pty Ltd (Pioneer) to be added as a respondent. On 24 March 2021 directions were made for the provision of documents: by 7 April 2021 in the case of the applicant and by 21 April 2021 in the case of the respondents. Following a hearing on 20 May 2021 there was an appeal which was finalised on 23 December 2021. As a result of that appeal, the application was remitted for a fresh hearing by a different member of the Tribunal.

4. On 27 January 2022 directions were made for the provision of the documents upon which the parties relied: by 4 February in the case of the applicants and by 18 February 2022 in the case of the respondents. The sequence of events for the hearing was indicated and it was noted that there may be an application for an ‘in person’ hearing. As it appeared that the hearing would be conducted using audio-visual link (AVL) facilities, a link was provided for the assistance of the parties. The following day (ie on 28 January 2022) a notice was issued to advise the parties that a hearing date on 2 March 2022 had been allocated.

Hearing

5. At the hearing, which was conducted using audio-visual link (AVL) facilities and the telephone due to the pandemic, Mr G Banister spoke on behalf of the applicants, Mr S Bailey represented Bailair, and Mr Haydock represented Pioneer.

6. The following documents upon which the parties relied were admitted as evidence, their contents being summarised later in these reasons: the Applicants’ documents received on 3 February 2022 (Exhibit 1), Bailair’s documents received on 18 February 2022 (Exhibit 2), and Pioneer’s documents received on 16 February 2022 (Exhibit 3).

7. Each party was asked to make an opening statement so that the Tribunal could appreciate the nature of the case being alleged by each party prior to considering the evidence and closing submissions.

8. The applicants’ case was said to be that the air conditioning unit the subject of these proceeding was installed on 1 August 2019 at a cost of $12,848 and that, over the next three months, it cut out, would not reach the desired temperature, and gave an H8 warning message. As a result, it was replaced with an Actron air conditioner.

9. The case of Bailair, being the installer, was that they never saw an H8 error message despite going to the applicants’ home on many occasions. It was also said that the applicants to provide a photo of an H8 error message, and that Bailair got Pioneer to examine the air conditioner. In short, Bailair said that, whenever the applicant’s home was visited, the air conditioner was working satisfactorily.

10. The case of Pioneer, being the supplier, was that it was willing to repair or replace the air conditioner but, every time it visited the applicants’ home, it could not find any problem. Further, that an H8 error has never been seen and that the applicants had no technical report to show there was a fault in the air conditioner. Also, that information taken from the air conditioner was used to prepare a report which showed there was no problem. It was also indicated that some parts were changed in case they were causing a fault.

11. There was no cross-examination of the applicants.

12. Mr Banister asked questions of Mr Bailey who said he has never seen an H8 error. Mr Bailey also clarified that his words in a 3 September 2019 text message (1/3, ie on page 3 in Exhibit 1) were not his opinion but were his passing on what he had been told by Mr Banister. When asked by Mr Haydock, Mr Bailey said he had never seen the air conditioner not working.

13. Mr Banister also asked questions of Mr Haydock as to why the report of Mr Grima was not provided to him and he was unable to explain why. Mr Haydock also said he had never seen an H8 error before and that the client usually takes a photo and sends it to indicate the nature of the problem.

14. An opportunity was then provided for closing submissions from the applicants, the respondents, then the applicants in reply so that each party had an opportunity to speak in support of their/its own case and in response to the case of the other party. Those submissions are summarised below.

Jurisdiction

15. By reference to the provisions of the Fair Trading Act 1987 (the FTA), it is clear that the applicants are consumers (within section 79D) bringing a consumer claim (within section 79E), for a supply of services with included the supply of goods (within section 79F), that the supply was made in New South Wales (within section 79K) and that the applicants are not claiming more than the prescribed limit of $40,000 (section 79S).

16. Section 79L of the FTA limits the time within which a claim can be made and section 79L(1)(a) requires that the cause of action first accrued not more than three years before the commencement of these proceedings. These proceedings have been clearly commenced within that time limit. Section 79I of the FTA entitles the applicants to have their claim determined by the Tribunal. Accordingly, the Tribunal has jurisdiction in these proceedings under the FTA.

Relevant law

17. Section 28 of the FTA makes the Australian Consumer Law (ACL) part of the law of New South Wales. In the ACL, section 54 provides a consumer such as the applicant with a guarantee of acceptable quality. So far as is presently relevant, that section provides as follows:

(1)   If:

(a)   a person supplies, in trade or commerce, goods to a consumer; and

(b)   the supply does not occur by way of 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 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 defect on 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 foods or any packaging or label on the goods; and

(d)   any representation made about the goods by the supplier or manufacturer of the gods; and

(e)   any other relevant circumstances relating to the supply of the goods.

18. It is only if the applicant establishes a breach of a such a guarantee that he is entitled to a remedy, and it is only if that breach amounts to a major failure that he may be entitled to a refund. To be entitled to a refund, the applicant must have rejected the vehicle and that rejection must have been within the rejection period.

19. The failure to comply with the guarantee is a major failure if (section 260 of the ACL):

(a) the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or …”

20. Subsection 259(3) of the ACL deals with the situation where the failure cannot be remedied or is a major failure by providing as follows:

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 …”

21. Subsection 262(1) of the ACL provides that a consumer is not entitled to a refund if the rejection period has ended. Subsection 262(2) reads as follows:

The rejection for good is the period from the time of the supply of the goods to the consumer within which it would be reasonable to expect the failure to comply with the 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 for which it is reasonable for them to be put before such a failure becomes apparent.

22. Further, s 271 of the ACL, set out below, entitles a consumer to seek damages from the manufacturer of goods when there is a breach of the guarantee provided by s 54 of the ACL.

(1)    If:

(a)   the guarantee under section 54 applies to a supply of goods to a consumer; and

(b)   the guarantee is not complied with;

an affected person in relation to the goods may, by action against the manufacturer of the goods, recover damages from the manufacturer.

Applicant’s evidence

23. The following chronology is suggested by the applicants’ documents.

01 Aug 19   Pioneer air conditioner installed at a cost of $12,848.

29 Aug 19   Applicants advised Bailair that air conditioner did not reach desired temperature and cut out, displaying fault code H8

30 Aug 19   Applicants’ text message to Bailair said, the previous night, the temperature stayed at 16^o although the air conditioner was set at 18^o and next morning moved from 17^o to 20^o when set at 24^o

03 Sep 19   Bailar inspected

20 Sep 19    Pioneer inspected

19 Dec 19   Pioneer inspected again

21 Dec 19   Air conditioner did not reach desired temperature: set to 21.5^o/22^o actual temperature 27^o/28^o

03 Jan 20   Photos sent to Bailar suggest a desired temperature of 22^o and an actual temperature of 29.5^o

04 Jan 20   A photo shows a set temperature of 23^o and 25^o actual

24 Jan 20   A photo shows a set temperature of 23^o and 28^o actual

28 Feb 20   Applicants discussed replacement with Bailair

20 Apr 20   Bailair provided three quotes for replacement: one each for an Actron, Daikin and Toshiba air conditioner

27 Apr 20   Applicants accepted $8,680 quote for Actron air conditioner

30 Apr 20   Applicants emailed Pioneer, and Bailair, requesting refund and suggesting H8 error had occurred twice in previous two weeks

08 May 20   Bailair replaces air conditioner, from Pioneer to Actron

11 May 20   Applicants advised Pioneer the air conditioner had been removed, was awaiting collection, and renewed a refund request

12 May 20   Pioneer refused by provide refund

13 May 20   Applicants denied seven-day timer was an issue, and said they would ask Bailar to make a seek a refund from Pioneer

24. The applicants’ documents included the quote and invoice for the Pioneer air conditioner which was described as a “16 kw Pioneer Hydrocarbons Premium Inverter Split Ducted System”, with energy savings of “up to 48-60% on existing system”. Included in the quote were “Replace all electronics on outdoor unit”, a “new wall controller including free WiFi” and “Installation of new isolator for outdoor unit”. Also included was a copy of the Pioneer manual which contains a listing of error codes that does not included H8. A quote for the replacement Actron air conditioner was also provided.

25. There is one point that needs to be noted in relation to the applicants’ evidence, namely that it refers to the previous hearing. That is not a matter that is relevant to this hearing as this is a fresh hearing, based on the evidence and submissions in this hearing, without reference to or reliance on either the evidence, submissions, decision, reasons, or anything else that occurred in the earlier hearing.

Bailair’s evidence

26. Mr Bailey indicated that Bailair’s installation of the Pioneer air conditioner was upgrading an existing ducted system as the old conditioner had failed and that he was not requested to do a heat load or air flow design. He said that, when he first inspected the air conditioner on 3 September 2019, there was no H8 fault displayed, it was working satisfactorily, and that Mr Banister asked why it did not have a seven day a week 24-hour time clock. Further, that he told the applicants that he had spoken with “Ben” at Pioneer who said he did not know of an H8 fault and that he had made a booking for Pioneer to check the air conditioner. Mr Bailey said that Pioneer could not find any fault when the inspected the air conditioner, presumably a reference to 20 September 2019.

27. In his two-page statement, Mr Bailey went on to indicate that, during November and December of 2019, he received numerous phone calls and text messages from Mr Banister “complaining about the unit not performing and the H8 problem as well as him telling me how inconvenient it was not having a time clock”. He said he asked Mr Banister to provide him with a photo of the H8 fault and that he asked Pioneer to go back and take a second look at the air conditioner. According to Mr Bailey, when Pioneer revisited “they changed all the electronics in the unit just to be safe and they tested the electronics that were removed back at their factory but they could not find fault with them”.

28. As to the period from January to April in 2020 Mr Bailey said he received numerous phone calls and text messages from Mr Banister, complaining that the air conditioner was not reaching the target temperature, that an H8 error was occurring, and that it did not have a time clock. However, a photo of the H8 fault was never provided and, every time Mr Bailey went to the applicants’ house, he was unable to find any fault with the air conditioner.

29. Mr Bailey recalled a meeting at Tuggerah when Mr Banister asked him to provide a quote for a replacement air conditioner. That quote, provided on 20 April 2020, was accepted on 27 April 2020. According to Mr Bailey, Mr Banister said he would have his solicitor get a refund from Pioneer so that could be left to him. (It is noted that, in their application, the applicants suggested their solicitor commenced correspondence with Balair on 22 July 2020.) In conclusion, Mr Bailey indicated that he had never seen the Pioneer air conditioner not working.

Pioneer’s evidence

30. It was Pioneer’s claim that, when its service technician was first contacted by Mr Bailey, a service call was booked in case anything had been overlooked by Mr Bailey. Mr Haydock also indicated that an H8 fault code had never been encountered. That first inspection was said to have shown that the air conditioner was working without any fault code appearing on either the indoor or outdoor display on that air conditioner.

31. As to what occurred on the second inspection, on 19 December 2019, it was said that Ben Jones did not find anything wrong but replaced the indoor and outdoor electronics and all the sensors “just to be safe”. Further, that measurements were made to enable the performance of the air conditioner to be calculated. A copy of the resulting report prepared by Mr Grima showed that the air conditioner, rated at 16 kw, was performing at 17.16 kw.

32. In response to the photos provided by the applicants, Mr Haydock said he did not know (1) for how long the air conditioner had been running, (2) how many zones are in the home, (3) what is the size of the home, and (4) what is the heat load. He noted the assessment of a qualified mechanical engineer (Mr Grima) shows the air conditioner to be working correctly and that no photo showing an H8 fault had been provided.

33. By way of summary, Mr Haydock suggested no-one from either Bailair or Pioneer has seen the air conditioner not heating or cooling correctly, there has been a precautionary replacement of parts, and that the applicants may be unhappy with the air conditioner because it does not have a 24/7 clock.

Applicants’ submissions

34. Mr Banister said that problems arose within three to four weeks of installation, not all being H8. He said the air conditioner would not “hold temperature” and that screen shots provided examples of the problems experienced. Although he suggested he did an internet search and found out what an H8 error was, that was neither included in his evidence nor was it put to either Mr Bailey or Mr Haydock. Mr Banister suggested that the lack of a 24/7 timer was not an issue and that if the air conditioner was working then why did Bailair recommend another air conditioner.

35. In submissions in reply, Mr Banister noted that he referred to an H8 error in his 30 April 2020 email (1/25a) and that there was no response to that aspect.

Bailair’s submissions

36. Mr Bailey said that Bailair quoted for renewal in that the existing air conditioner was replace with a new one and that the entire system was not replaced. He said that he had never seen a problem, despite attending more than once and for a duration of a couple of hours. He also said that, when the applicants wanted to replace the subject air conditioner, he provided three quotes and the applicants chose the Actron machine.

Pioneer’s submissions

37. Mr Haydock submitted that the onus was on the applicants to prove that something is wrong but that neither Bailair nor Pioneer could find any fault with the air conditioner. He noted that this was not a case of a complete system being provided, only a renewal, in that the outdoor unit and the indoor electronics were replaced with the result being a system that was quieter and more energy efficient. Further, he repeated that he did not know what an H8 error was and that the report of Mr Grima showed that the air conditioner was provided 17.16 kW which was more than its rating of 16kW. He accepted that photos had been provided by the applicants but noted there was no photo showing an H8 error.

Consideration

38. As the applicants commenced these proceedings, they bear the onus of proof. That requires them to prove their case by reference to the standard of proof in civil cases which is proof on the balance of probabilities (unlike criminal proceedings where the charge must be proved beyond reasonable doubt).

39. No affidavit or witness statement has been provided by any party. Each party included pages which set out their case. They were not headed ‘Witness Statement’, signed, and dated. However, they have been treated as such. Mr Banister, Mr Bailey, and Mr Haydock each gave an affirmation, and an opportunity was provided for the cross-examination of each of them.

38. There are four preliminary matters which need to be addressed.

39. First, while it was suggested that Mr Bailey’s 3 September 2019 text message contained an admission that the air conditioner “isn’t working efficiently”, he explained and, having carefully considered the wording of that message, the Tribunal accepts what he said during the hearing, namely that he was passing on to Pioneer what he had been told by Mr Banister.

40. Secondly, in reaching its decision, the Tribunal has disregarded the suggestion that this complaint was motivated by the applicants’ desire to have an air conditioner with a timer that covered 24 hours a day and seven days a week. However, it is clear the applicants considered that to be a desirable feature and that it was a feature which the Actron replacement unit had.

41. Thirdly, the evidence suggests that the applicants discussed a replacement air conditioner with Bailair’s Mr Bailey on 28 February 2020 and that he provided them with three quotes on 20 April 2020. The Tribunal finds that those quotes were the result of a request from the applicants and not due to any acceptance on the part of Bailair that the Pioneer air conditioner was not of acceptable quality.

42. Fourthly, the evidence suggests that it was not until after the applicants had accepted Bailair quote on 27 April 2020 for the replacement Actron air conditioner (which cost $8,680) that they sought a refund for the cost of the Pioneer air conditioner (which cost $12,848): on 30 April 2020 and 11 May 2020.

43. The evidence may be summarised by saying that the applicants’ evidence suggested the air conditioner was not operating in a satisfactory manner while the respondents’ evidence was that each inspection suggested in was. If that was the only evidence, then the outcome would be that the applicants have failed to “tip the scales” in their favour.

44. However, having considered the evidence and submissions, the Tribunal is not satisfied the applicants have discharged the onus of proof which they bear for the following reasons.

1. The applicants’ photos of actual and target temperatures are not sufficient to establish that the air conditioner is not of acceptable quality without further evidence as to the matters set out in [32] above, most notably for how long the air conditioner had been running at the time when those photos were taken.

2. The applicants did not provide, either to the respondents or the Tribunal, any photo of an H8 fault despite being requested to do so by the respondents. That is of more significance since neither Bailair nor Pioneer accepts that there is an H8 error code. Further, despite Mr Banister suggesting that he did an internet search to find out what an H8 error code was, no evidence of that search was provided.

3. The applicants’ case is not supported by evidence from an independent expert. The only expert evidence available is an internal report, prepared as part of Pioneer’s investigation, prior to the commencement of these proceedings. That report, which is in the form of a business record, provides support for the air conditioner operating at above its rated 16 kw capacity.

4. Multiple inspections of the air conditioner by representatives of Bailair and Pioneer failed to detect any fault in the air conditioner which they found to be operating in a satisfactory fashion. If the air conditioner was repeatedly failing to achieve or maintain the target temperature and/or if it was suggesting an H8 error code, it is difficult to understand why that never became evident to anyone who ever attended the applicants’ home on behalf of either respondent.

47. Accordingly, the application must be dismissed as the applicants have failed to prove that the Pioneer air conditioner was not of acceptable quality. In other words, as the evidence does not provide the Tribunal with a sufficient basis to make a finding there has been a breach of s 54 of the ACL, the applicants are not entitled to either a refund of the $12,848 they paid to Bailair for Pioneer air conditioner or damages against either Bailair or Pioneer.

Orders

48. For the reasons set out above, the order that will be made in these proceedings is as follows:

1. The application is dismissed.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 17 May 2022