Bartho v Onsite Trade Services Pty Ltd

[2022] NSWCATCD 112

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Bartho v Onsite Trade Services Pty Ltd [2022] NSWCATCD 112

Hearing dates:

9 March 2022 and 4 May 2022

Date of orders:

12 July 2022

Decision date:

12 July 2022

Jurisdiction:

Consumer and Commercial Division

Before:

P French, Senior Member

Decision:

(1) Onsite Trade Services Pty Ltd must pay Catherine Batho $16,125.00 immediately.

Catchwords:

CONSUMER LAW – Misleading and deceptive conduct – “likely” to mislead or deceive

Legislation Cited:

Australian Consumer Law (NSW)

Civil and Administrative Tribunal Act 2013 (NSW)

Contracts Review Act 1980 (NSW)

Fair Trading Act 1987 (NSW)

Cases Cited:

Competition and Consumer Commission v Dukemaster Pty Ltd [2009] FCA 682

Jones v Dunkel (1959) HCA 8

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Catherine Bartho (Applicant)
Onsite Trade Services Pty Ltd (Respondent)

Representation:

R Wilcher (Applicant)
T Nguyen (Respondent)

File Number(s):

GEN 21/49317

Publication restriction:

Nil

REASONS FOR DECISION

Introduction

1. This is an application by Catherine Bartho (the consumer) for an order that would require Onsite Trade Services Pty Ltd (the trader) to pay her $16,125.00 which she claims to have been overcharged by the trader for plumbing work it carried out at her residential property. The consumer has stated her case for relief pursuant to the terms of the Contracts Review Act 1980 (NSW), but in the circumstances of this case, only a “Court” can grant relief under that Act. The Tribunal is not a Court for the purposes of that Act: s 4. I have therefore dealt with the application as a consumer claim within the meaning of Part 6A of the Fair Trading Act 1987 (NSW) (FT Act). This application was made to the Tribunal on 2 December 2021 (the application).

2. For the reasons set out following I am satisfied that the contract for the provision of the plumbing services must be set aside on the basis that the consumer was induced into it by the trader’s misleading and deceptive conduct, contrary to s 18 of the Australian Consumer Law (NSW) (ACL(NSW)). In this respect the trader falsely represented to the consumer that the second stage of plumbing work was essential and had to be done on an emergency basis to clear a blockage in her sewer. Neither was true. The loss the consumer suffered as a result of the trader’s misleading and deceptive conduct was the amount she paid the trader for the work that was manifestly in excess of the commercial value of the work performed. I have ordered the trader to repay the consumer that amount.

Procedural history

3. The application was first listed before the Tribunal, differently constituted, in a Virtual Meeting Room in Group List for Conciliation and Hearing on 11 January 2022 in accordance with NCAT’s COVID-19 Revised Hearing Procedure. The consumer sought and was granted leave to be represented in the proceedings by her son-in-law, Mr Robert Wilcher. The trader was represented at that hearing by its Director, Ms Thu Sang Nguyen. In accordance with the Tribunal’s usual practice where both parties are present at the first listing of an application, the Tribunal attempted to assist the parties to conciliate the dispute. Those efforts were not successful. Consequently, the matter was adjourned to a Special Fixture Hearing and directions were given to the parties for the filing and exchange of the documentary evidence that they intended to rely on at that hearing.

Evidence and hearing

4. Both parties have complied with the Tribunal’s directions for the filing and exchange of their documentary evidence. In response to the Registrar’s initial directions, and the orders made by the Tribunal on 11 January 2022, the consumer has filed three bundles of documents, on 22 December 2021, 3 February 2022 and 9 March 2022. These were marked Exhibits A1 to A3 respectively. The trader filed one bundle of documents on 4 March 2022. It was marked Exhibits R1.

5. The application was heard over two Special Fixture Listings on 9 March 2022 and 4 May 2022. Mr Wilcher attended those hearings on behalf of the consumer. Ms Nguyen attended on behalf of the trader. The parties had the opportunity to present their respective cases, to ask each other questions, and to make final submissions.

6. I note that the consumer, and the consumer’s expert, Mr Collins were potentially available for cross-examination by Ms Nguyen. However, Ms Nguyen indicated that she did not wish to ask any questions of them.

Material facts

7. The consumer is the registered proprietor of a residential property in Beecroft, where she lives. It is a two-storey home. The consumer occupies the second level. The first level of the home has three bedrooms, a bathroom, living area and small kitchen. At the material time for this dispute the first level was being occupied by a guest with an infant child.

8. At the material time for the dispute the consumer was 83 years of age. She has mobility restrictions and uses walking aids, including a walking frame. These mobility restrictions make it impossible for her to walk down the stairs to the first level. To gain access to that level the consumer must walk around the outside of the house to enter from the rear.

9. The trader is Australian Proprietary Company which, at the material time for the dispute, conducted a business as a plumber, using a trading name “Plumbcorp Services”. By the time of hearing, its licence to do so had been cancelled by NSW Fair Trading and it had ceased trading. However, the company remained registered.

10. On 1 June 2021 (the consumer says 31 May 2021 in her Statutory Declaration dated 30 January 2022, but I am satisfied she is mistaken) the consumer noticed a foul odour emanating from the first floor, which was confirmed by her guest as overflow from the toilet. The consumer inspected the level one bathroom and found sewerage spillage. She concluded there must be a blocked sewer pipe. She performed an internet search for a plumber using words “urgent plumbing” and “Beecroft”. This produced an advertisement with contact details for Plumbcorp Services.

11. The consumer rang the telephone number stated in the advertisement and arranged with the customer service representative for a plumber to attend the property the following day to inspect the problem and provide a quotation for its rectification. She provided the customer service representative with an email address. After the call, the trader’s customer service representative emailed the consumer confirming that a plumber would attend on 2 June 2022 confirming that there was a “small call out fee of $35+GST … which will be waived once the quote has been accepted”. The email also provided a weblink to the trader’s Terms and Conditions and to NSW Fair Trading’s Consumer Building Guide. In her Statutory Declaration dated 30 January 2022 the consumer says the following in relation to this email:

1. At the time I did not read the terms and conditions, as the need was so urgent. But even if I had had time I would not have been able to fully digest them. Essentially I was at the mercy of the plumber, but I had to trust their professional integrity to assist in my time of need. At any rate, I thought the call out fee of $35.00 was not unreasonable, as it was a modest amount to carry out the inspection, and besides, it said the $35 fee would be waived if the fee was accepted.

   12. On 2 June 2022 at approximately 9:00am a plumbers attended the property to inspect and quote the work. After inspecting the site, and discussing the problem with the consumer, the plumber caused the trader’s office to generate and send to the consumer by email a quotation for the work he contended was required. This email contained a live web-link to the quotation which also facilitated the acceptance of the quotation by electronic signature. The consumer accepted the quotation at about 9:20am by signing it (the first quotation)

   13. The first quotation itemised the following work and price:

Code	Description	Price
…	Jet Blast & CCTV Combo Use of specialist high pressure drain cleaner in association with a CCTV camera plus locator to attempt to clean, flush and unblock the drain Access through readily accessible opening Additional costs will apply if there is no readily accessible opening Please note: IF BLOCKAGE DOES NOT CLEAR FURTHER COST WILL APPLY	1.0@ $998.66	$998.66
…	Removal of Toilet Pan – Search and Investigation on Concealed Areas Lift toilet pan from its foundation. Carry out search and investigation on concealed areas under/behind toilet pan or within waste pipe. Further advice and quotation to be issued. Note: All care taken in removal of pan but no responsibility if pan, floor or drain pipe is damaged.	1.0@ $282.83	$282.83
Subtotal	$1281.49
G.S.T.	$128.15
TOTAL	$1409.64

14. In the course of this work the toilet bowl was broken.

15. Upon completion of the work itemised in the first quotation, the plumber advised the consumer that further work was required to clear the blockage. It is convenient to set out what the trader says about this in its “Chronology of events”, although I note there is no witness evidence from the plumber to this effect:

1. The plumber completed the works and advised the Applicant that the toilet cracked upon removal and after jet blasting, there was an obstruction in the sewer service which the CCTV drain camera showed were roots. He advised that he tried to cut the roots with a special jet blaster head but was only able to puncture a hole enough for the water to start draining. The plumber asked the Applicant to inspect the location of the roots within the sewer service, however she did not want to go into the garden. Instead, the plumber took a photo of where the blockage was occurring with the roots and showed the Applicant and advised that in order to rectify the issue the section of sewer required replacement and the toilet needed to be replaced.

   16. At approximately 10:45am (that is, 1 hour and 45minutes after the plumber arrived on site and after the applicant had already incurred the cost of the first quotation), the plumber caused the trader’s office to raise another quotation for the further work he contended was required. The consumer accepted this quotation at 10:48am (the second quotation). After the consumer accepted the quotation, the trader despatched a second plumber to the property to assist with the work.

   17. The trader contends, without objection from the consumer, that in the context of a discussion about the scope and cost of the second stage of work its plumber offered to supply and install a new toilet bowl on a complimentary basis, and that the consumer accepted this offer. It contends that the supply and installation of the new toilet bowl had a commercial value of $1,850.00.

   18. The second quotation itemised the following work and price:

Description of works	Price
EMERGENCY SEWER SPOT DIG UP TO 2M WORK TO BE CARRIED OUT After further investigation we have found the sewer service to be severely damaged in order to rectify the issue the following must be completed EMERGENCY SEWER SPOT DIG UP TO 2M Obtain service location diagram Dig and excavate ground area Expose existing section of sewer up to 2m Cut and removal of section of damaged sewer Cut and removal of sewer junctions (IF REQUIRED) Re-jet blast sewer line Re-camera sewer line and investigate further Supply and install new section of sewer in PVC up to 2M Supply and install new sewer junctions (IF REQUIRED) Supply and install new I-O Supply and install new BTS inspection point Raise to floor level Blue metal and encase new section of sewer service Concrete and encase new connections to existing sewer service Back fill work area Removal of trade waste Restoration of worked area PLEASE NOTE IF FURTHER WORK REQUIRED OTHER THAN WORKED AREA, FURTHER COST WILL APPLY	1	$16,841.00
Subtotal	$16,841.00
G.S.T.	$1,684.20
TOTAL	$18,525.10

19. Contracts and invoices for the work quoted in the first and second quotations were sent to the consumer by email shortly after her acceptance of the quotations. The consumer paid the invoices in several progress payments. There is no issue that the invoices were paid in full by the completion of the work.

20. In her Statutory Declaration dated 30 January 2022, the consumer states the following in relation to these quotations, contracts and invoices:

1. I was really confused by all this paperwork on my email, and struggled to understand it, especially because they seemed to have raised invoices for work that had not been carried out.

2. Also, I was very surprised by the amount of $18,525.10. I had been given the impression work to unblock the drain would solve the issue and yet here there was a quote for over $18,000 of extra work.

3. But I felt pressured into accepting the quote and allowing the work to be done. The quote said it was emergency work, so I was very concerned that the sewer might leak again and did not want the stench of filth to pose a threat to myself or to the young mother and child. I was feeling quite worn down by it all, and had to trust the workmen. I had no chance to challenge the quotes, or to seek legal or other technical advice as the smell and appearance of the leakage was horrible, and the two men seemed eager and able to fix it.

   21. The work itemised in the second quotation was carried out on 2, 3 and 4 June 2021. Two plumbers attended the site on 3 June 2021 and 3 plumbers attended on 4 June 2021.

   22. The trader contends that in the course of the second stage of work its’ plumbers conducted a jet blast and CCTV drain camera inspection to confirm if there was damage downstream and found further tree root intrusion. On 4 June 2021 the trader emailed the consumer a further quotation for $18,525.10. That quotation itemised work in identical terms to that set out in the second quotation and stated: “upon further investigation of the sewer it is evident that a further 6 metres of pipe work is severely damaged and will need to be rectified.”

   23. After receiving it, the consumer discussed the third quotation with the plumbers working on site and asked them if they really thought this work was necessary and when they would start on it if she accepted the quotation. The consumer contends that she was told that the work was necessary to clear the blockage and that it would continue work over the weekend (the next day being Saturday). After thinking it over, the consumer decided not to accept the third quotation. The plumbers completed the work itemised in the second quotation and left the property on the afternoon of 4 June 2021.

   24. After the trader had left the property, the consumer developed misgivings about the scope and cost of the work. In this respect, she states the following in her Statutory Declaration dated 30 January 2022:

4. When the work had finished I spoke to my daughter and son-in-law who live in Beecroft about the whole situation. They were shocked to learn of the amount that I had been charged.

5. They obtained a quotation from another licensed plumber who said I should have been charged no more than $2,400 for the work that cost $18,525.10 and no more than $5,100 for the second job they quoted at $18,525.10.

6. In the circumstances I feel I have been treated most unfairly, and , due to my age and complete inexperience in these sorts of matters, have been considerably taken advantage of.

7. There was certainly no equality in the bargaining power between the Respondent and myself; I was at a complete disadvantage.

8. Nor was there any chance to negotiate the terms of engagement or the cost. I needed to get the job done straight away. I was distraught by the stench and the mess and felt very concerned for [the guest] and her baby. I had no time or capability of negotiating the engagement of the respondent at all, it was most upsetting.

9. I was totally exposed in my dealings with the plumbers and had to rely entirely upon their advice and stated expertise as I have no experience in plumbing matters (or other trades) and at my age and with my limited mobility, I had no real prospect of overseeing the work or assessing whether it needed to be done or was fairly priced. There was no way I could have sought any other quotes, or taken any sort of independent or legal advice on the matter.

10. Also, I was most concerned that the quote and invoice for the work was described as urgent. The quote said the pipes were severely damaged, and needed to be dug up as an emergency. This really weighted on my mind and led me to accept the quote. I didn’t want a repeat of the mess and smell.

11. When I got the second quote for $18,525 and saw the words emergency and severely damaged I was again temped to engage them, which is why I inquired about when they could start. But by that time, especially when they said they could come the next day, I felt they were pushing me to sign up again. But by that point I finally had the time to step back and question what had gone on, and smelled a rat, so I didn’t take up the offer. Afterall, the whole purpose of the engagement was to fix a back up problem that seemed to have been remedied and not to keep spending good money on problems that seemed to pop up each time they did some work.

    25. The consumer relies upon the evidence of an expert, Mr Benjamin Collins, which is set out in a Statutory Declaration dated 1 February 2022. Mr Collins states that he holds Plumber, Gasfitter, and Backflow Prevention licenses. He states that he conducts a plumbing business as a sole trader trading as BAC Plumbing. He states that he has 35 years’ experience in household plumbing, which includes unblocking sewer drains and repairing sewer lines between 100 and 120 times a year. Mr Collins states that he had read and considers himself bound by the NCAT Expert Witness Code of Conduct.

    26. Mr Collins gives the following evidence:

12. On or about 16 June 2021 date, I was contacted by a Mr Andre Kreicers, who explained to me that he is the son in law of the Applicant. Mr Kreicers asked if I could review he pricing of work undertaken [at the property] by a plumbing business called Plumbcorp Services (Plumbcorp) on 2-4 June 2021.

13. Mr Kreicers advised me that:

* around 31 May 2021 the Applicant’s domestic sewage system had backed up in the downstairs bathroom area, resulting in build up of malodorous effluent.

* the Applicant had engaged Plumpcorp that week to fix the problem and had worked at her property on 2-4 June 2021.

1. Mr Kreicers gave me a copy of the invoices and quotes provided to the Applicant by Plumbcorp being: [the first two invoices and third quotation are set out]

2. Mr Kreicers asked me to review the invoices and quotes to advise on whether or not the work scope was reasonable and represented a fair cost for the work undertaken or proposed.

3. To formulate an opinion on these matters I attended the property on 2 August 2021

Invoice for $1409.64

…

1. Jet blasting is a commonly used process by which water is sprayed at high velocity and force into a pipeline to break down any blockage in the pipe and push the elements of the blockage through the pipes. I have used jet blasting on many occasions.

2. I do not know the nature of the blockage in question. However, usual blockages in domestic sewer system are caused by tree roots. In my opinion it would be highly unusual if the blockage in this house resulted from any other cause. The property has been inhabited by an elderly lady in the upstairs and occasional lodgers downstairs.

3. The use of a jet spray normally unblocks the pipeline , and would most likely have unblocked the drain. There is nothing I have seen which suggested that the jet spray failed to unblock the drain. None of the quotes [quotes 2 and 3] refer to unblocking the drain, but relate to maintenance and repair work.

4. It is not always necessary to use a CCTV to examine a pipe while it is being sprayed. It is easy to confirm if the blockage has been removed by pouring water down the drain and seeing if the flow has returned to its proper rate. Nonetheless a CCTV does provide a good visual analysis of whether or not the blockage has been removed.

1. In my opinion, jet blasting with use of a CCTV would normally cost about $125.00 for the machine and $110.00 per hour for labour. This sort of job normally takes about 1-2 hours.

2. Removal of Toilet Pan – Search and Investigation on Concealed Areas –

…

1. I do not consider his item of work was necessary. If the jet blasting cured the blockage, as I suspect it did, then there was no need to carry out this extra scope. However in the exercise of caution it would have been wise to check the toilet pan, but I question if it needed to be removed.

2. In my opinion a fair market cost for carrying out this scope of work would have been $220.00 inclusive of GST/

3. But as I say, I am of the opinion that it did not need to be carried out.

4. As a result, I am of the view that a fair cost for the work needed to unblock the drain would have been in the order of $400-$500 inclusive of GST

Invoice for $18,525.10

1. [the scope of work set out in the invoice is detailed]

2. I note firstly that on its terms this is not an invoice for unblocking the drain. It involves work in the nature of repairs. It was work done to repair the drain on the basis that Plumpcorp’s investigation “found the sewer service to be severely damaged”.

3. In this regard, the step of “Rejetblast sewer line” would not have been to unblock the drain, which has been done [as a component of the work subject to first invoice] but to further clean out any materials prior to replacing the 2m segment of pipe. On the terms of the invoice Plumpcorp were charging for work they had proposed upon completion of unblocking the drain.

4. I will comment first whether or not it was necessary to do this work at all and then on the cost as charged by Plumpcorp

Whether the work was necessary

1. I cannot say if the 2m section of pipe needed to be replaced, as I did not see it. However, based on the condition of the 6m pipe with Plumpcorp assessed as being “severely damaged” I sincerely doubt if the 2m section of pipe needed to be replaced at all.

2. Based on my other observations on site I do not consider that there was any cause for alarm or that the work proposed needed to be done on an emergency basis. On that basis I do not consider that the work needed to be done at all.

3. However, if the 2m pipe in question really was in need of repair, the fair approach would have been to advise the Applicant that the blockage had been removed and the pipe would function for a while longer, but that it would need to be replaced within an estimated time frame. I would offer to provide her with a quote for doing so and give her time to reflect upon the quote and obtain alternative estimates is she wanted to.

4. This would have been a fair approach because it was obvious to me that the Applicant, as an elderly lady with mobility issues and no experience in plumping and other trades, was not in a position to engage the services of a plumber for this type of work on an urgent basis. It would have been a complete imbalance of contract.

5. In my view it was wholly unreasonable to fix up the problem at hand and then urge her to enter into a much larger engagement involving a considerable sum of money with comments about an uncalled for emergency.

Cost

1. I consider the fair cost of this work to be $2,400.

2. The charged amount of $18,525.10 is extremely excessive.

3. I calculate my figure of $2,400 as follows:

Labour Tradesman   $1400.00

Apprentice      $600.00

Materials      $400.00

Total         $2,400.00

1. As a result I consider the amount of $18,525.10 to be s grossly excessive charge for the work done.

Quote for $18,525.10 [the third quote]

1. The scope of work in the quote for $18,525.10 provided to the Applicant was very similar to [the second quote/invoice] [the description of work is set out]

….

Whether the work was necessary

1. In my opinion, based on the inspections I carried out, I am of the view that his work does not need to be carried out. It most certainly does not need to be carried out on an emergency basis.

2. My inspection by CCTV revealed that the pipes are in fair to good condition and do not need to be replaced. They will function quite efficiently for another 12-18 months. It is entirely incorrect for Plumpcorp to say they need to be replaced now, as a matter of emergency.

3. At some future stage, when the time eventually comes to repair the pipes the fair approach to doing so would be as described above. That is, provide the Applicant with a quote for doing the (sic) and give her time to reflect upon the quote and obtain alternative estimates if she wanted.

4. As noted above this would have been a fair approach due to the age of the Applicant, her situation as an elderly lady with mobility issues and no experience in plumping or other trades. To do otherwise is to take advantage of a great inequality in bargaining power.

Cost

1. Assuming the hypothetical that the work did need to be done, or that the Applicant wanted it to be done, I consider the fair cost of this work to be $5,100.00

2. The quoted amount of $18,525.10 is extremely excessive.

3. I calculate my figure of $5,100.00 as follows:

Labour Tradesman   $2,000.00

Apprentice      $1,030.00

Materials      $620.00

Rubbish removal   $365.00

Fair trade inspection   $400.00

Site reinstatement   $36000

Service call      $90.00

Labour         $110.00

Water jetter      $125.00

Total         $5,1000.00

1. As a result I consider the amount of $18, 525.10 to be a grossly excessive charge for the work quoted.

Contentions of the parties

27. As I have already indicated, the consumer conducted her case on the basis that relief is available to her under the Contracts Review Act 1980 in relation to an unjust contract (being the contract that incorporated the second quotation). The Tribunal does not have jurisdiction to grant relief under that Act.

28. Section 38(4) of the Civil and Administrative Tribunal Act 2013 requires the Tribunal to act in accordance with the substantial merits of the case without regard to technicalities or legal forms, subject of course, to the rules of natural justice: s 38(2).

29. In this case, the Tribunal’s consumer claims jurisdiction under Part 6A of the FT Act was also squarely raised as an alternative basis for the application in the original submissions filed by the consumer. Her submissions have also squarely raised from the outset an allegation that she was induced to accept the second quotation by the trader’s misleading and deceptive representations that this work was urgent and necessary to clear the sewer blockage. The trader has had the opportunity to respond to that allegation and has done so by the documents and submissions it has filed and served. I am thus satisfied that there is no unfairness to the trader associated with dealing with the application as a consumer claim which relies for its cause of action on s 18 of the Australian Consumer Law (NSW) (ACL(NSW)).

30. The consumer’s case is, essentially, that she was deceived by the trader’s plumber and the trader’s second quotation into believing that the work itemised in the second quotation was urgently required to clear the blockage in the sewer. The damage and loss the consumer contends she suffered due to the trader’s misleading and deceptive conduct is the amount she paid for second stage of work which exceeded its’ fair market value as assessed by her expert. That is, the amount that exceeded $2,400.00.

31. The trader denies that it engaged in misleading and deceptive conduct. It contends that the consumer was free to accept or decline the second quotation and was placed under no pressure to accept it. It contends that the consumer cannot now resile from a contract that she made freely, knowing the contract price. It submits that “a bad deal is not a valid reason to set a contract aside”. It contends that the work itemised in the second quotation was necessary to prevent the sewer from blocking again. It accepts that the cost of its services may be higher than other plumbers but contends that it is free to charge what it considers appropriate because pricing in the plumbing industry is not regulated and customers have the option of accepting its’ prices or not. It submits that the fact that the consumer could have had the work done by a competitor at a cheaper price is not a valid reason to set aside a contract.

Jurisdiction

32. There can be no issue that the Tribunal has jurisdiction to deal with this application as a consumer claim under Part 6A of the FT Act. By operation of s 28 of that Act, the ACL(NSW) is made part of the law of NSW and may be applied in the determination of a consumer claim. Chapter 2 of the ACL(NSW) contains several general protections for consumers in trade and commerce, including a prohibition on misleading and deceptive conduct. Section 74(3) of the FT Act provides that the Tribunal may decide the matter of whether a person has suffered loss or damage because of the conduct of another person that constitutes a contravention of Chapter 2 of the ACL(NSW) if that matter arises in connection with another matter subject to proceedings in the Tribunal. In deciding the matter of loss or damage, the Tribunal may award such sum as it thinks fit.

Applicable law

33. Section 18 provides that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

34. In Australian Competition and Consumer Commission v Dukemaster Pty Ltd[2009] FCA 682 at [10] Gordon J summarised the principles to be applied in determining if conduct is misleading and deceptive for the purposes of section 52 of the former Trade Practices Act 1974. Those principles have equal application to section 18 of the ACL and are stated following (references omitted):

1. A contravention of s 52(1) of the TPA is established by “conduct” which is misleading or deceptive or likely to mislead or deceive. The “conduct”, in the circumstances, must lead, or be capable of leading, a person into error and the error or misconception must result from “conduct” of the corporation and not from other circumstances for which the corporation is not responsible. “Conduct” is likely to mislead or deceive if there is a “real or not remote chance or possibility regardless of whether it is less or more than fifty per cent”.

2.   Section 52(1) is concerned with the effect or likely effect of “conduct” upon the minds of that person or those persons in relation to whom the question of whether the “conduct” is or is likely to be misleading or deceptive falls to be tested. The test is objective and the Court must determine the question for itself. Section 52 is not designed for the benefit of persons who fail, in the circumstances of the case, to take reasonable care of their own interests. Moreover, it would be wrong to select particular words or acts which although misleading in isolation do not have that character when viewed in context.

1. “Conduct” can, of course, include making a statement which is misleading or deceptive or likely to mislead or deceive.

2. By making a statement of past or present fact, a corporation’s state of mind is irrelevant unless the statement involved the state of the corporation’s mind. uContravention of s 52(1) does not depend upon the corporation’s intention or its belief concerning the accuracy of the statement of fact but upon whether the statement conveys a meaning which is false. A false meaning will be conveyed if what is stated concerning the past or present fact is inaccurate but also if, although literally true, the statement conveys a meaning which is false.

3. Precisely the same principles control the operation of s 52(1) to statements involving the state of mind of the maker when the statement was made (e.g. promises, predictions and opinions). A statement which involves the state of mind of the maker ordinarily conveys the meaning (expressly or impliedly) that the maker of the statement had a particular state of mind when the statement was made and, commonly, that there was a basis for that state of mind.

4. A statement of opinion will not be misleading or deceptive or likely to mislead or deceive merely because it turns out to be incorrect, misinforms or is likely to do so. An incorrect opinion does not of itself establish that the opinion was not held by the person who expressed it or that it lacked any or any adequate foundation. An expression of an opinion which is identifiable as an expression of opinion conveys no more than that the opinion is held and perhaps that there is a basis for the opinion. If that is so, an expression of opinion however erroneous misrepresents nothing.

5. However, an opinion may convey that there is a basis for it, that it is honestly held and when it is expressed as the opinion of an expert, that it is honestly held upon rational grounds involving an application of the relevant expertise. If the evidence shows that the opinion was not held or that it lacked any or any adequate foundation, particularly if the opinion was expressed as an expert, a statement of opinion may contravene s 52 of the TPA.

Consideration

35. To determine the outcome of this application the Tribunal must pose and answer the following questions:

1. Did the trader represent to the consumer that the work itemised in the second quotation was -

1. “Urgent” or that it needed to be done on an “emergency” basis?

2. Necessary to clear the blockage in the downstairs bathroom sewer line?

2. If the answer to (a)(i) and/or (ii) is “yes”, were these representations based upon an expert opinion that was honestly held on rational grounds?

3. If the answer to (b) is “no”, were such representation(s) capable of leading the consumer into error?

4. If there was a contravention of s 18 by the trader, did the consumer suffer damage and loss as a reasonably foreseeable result?

5. What remedy, if any, is the consumer entitled to in the circumstances of the case?

36. I am comfortably satisfied on the evidence that the trader’s plumber represented to the consumer at or about 9:45am on 2 June 2021 that the work itemised in the second quotation was required on an urgent basis to unblock the sewer. That is the consumer’s evidence. While the trader disputes that these representations were misleading or deceptive, I don’t understand the trader to deny that these representations were made. If there is any doubt that these representations were made, the words contained in the quotation itself dispel it. It is twice stated that the work is “an emergency sewer spot dig up” and also that the “sewer service” is “severely damaged” and that “in order to rectify the issue” the work set out in the quotation “must be completed”. All these words are imperative.

37. Having regard to the Dukemaster test, these representations were statements of opinion by a licensed tradesperson, and in this sense, those of an expert that the consumer had engaged to advise her in relation to her blocked sewer. Having regard to Mr Collins expert evidence I cannot be satisfied that this opinion was honestly held on rational grounds. The work set out in the quotation relates to the repair of an allegedly “damaged drain”. It does not relate to the unblocking of a drain, which was work that had already been completed under the first quotation/contract. While Mr Collins is unable to say with certainty whether this section of the drain was in fact damaged because it had been replaced at the time of his inspection, his evidence casts serious doubt as to whether that was the case. But either way there was no rational basis upon which this work could be considered “emergency” work.

38. In this respect I note the following paragraphs of the trader’s submissions on these points:

1. The Applicant claims that the completed and quoted works were not required. This evidence should be rejected for the following reasons.

a. First, the objective evidence should be given the most weight. Documents are reliable, they speak for themselves. CCTV drain camera footage of the roots within different sections of the sewer service. The photo of the jet blast of the toilet shows dirt overflowing in the floor waste of the shower, which would not have entered the sewer unless there was a breach in the pipe which would allow dirt to enter. Satellite and street view images of the property on Google Maps shows well established trees and shrubs surrounding on the property. The plumbers also took photos of where the roots were located showing the close proximity of trees.

…

d. Fourth, after conducting the jet blast and CCTV drain camera inspection of the sewer service it was the plumber’s professional opinion and recommendation to replace the section that was damaged. The Applicant was provided with a permanent solution and not a temporary fix, where in the first instance, the Applicant proceeded with the replacement of a section of the damaged pipe and in the second instance, the Applicant did not proceed with the replacement of a section of the damaged pipe.

39. The photographs referred to in these submissions are found at pages 14, 15, 22-27, 47-50 and 87-92 of Exhibit R1. The photographs on pages 25 and 26 depict the sewer pipe after jet blasting. It is clear. The photograph on page 50 is stated to show tree roots which have perforated a section of the pipe. But the pipe is not blocked. The photographs on pages 22 to 24 do not conclusively depict “dirt” as distinct from faecal matter and decomposing tissue. The remaining photographs depict work in progress, but no photograph conclusively depicts any area of damage to the sewer (for example, a section of the pipe that was perforated or collapsed before the works commenced). Nor is there any evidence of soil saturation in any area of the work, which might be expected if there was a perforation of the pipe large enough to allow dirt to enter.

40. This photographic evidence therefore does not assist the trader to establish that the work performed under the second contract was work that was necessary “in an emergency” to unblock the sewer line. It is a direct implication of the trader’s own evidence that the blockage had been cleared by the first stage of work, and that the work performed under the second contract and offered under the third quotation was a “permanent solution” to prevent the possibility of future blockages.

41. I note that the trader has made a deliberate choice in the proceedings not to call as a witness any of the plumbers who performed the work (see paragraph 30(b)) of its submissions. I draw and inference from this that the evidence of the plumbers would not have assisted its case: Jones v Dunkel (1959) HCA 8.

42. In submissions and oral argument Ms Nguyen sought to impugn Mr Collins expertise and conclusions on various bases. However, despite being provided with the opportunity to do so, Ms Nguyen did not seek to cross-examine Mr Collins. While it may be allowed that Ms Nguyen is the operator of a plumbing business and therefore has some degree of industry knowledge, she accepted under cross-examination that she is not a licensed plumber. In the absence of any witness evidence from the trader’s plumbers, or any other appropriately qualified independent expert, Ms Nguyen’s attacks on the central propositions in Mr Collin’s evidence that the work performed under the second contract was not necessary at all, or if it was beneficial, was not urgent and not necessary to clear the blockage must be accepted.

43. The trader’s representations as to urgency and necessity to clear the blockage in the sewer line gave rise to a real possibility that the consumer would be led into the error that she was obliged to make an immediate decision to approve the second quotation to ensure that the sewer blockage was cleared. Indeed, she fell into that error. I am therefore satisfied that the trader’s representations constituted misleading and deceptive conduct contrary to s 18 of the ACL(NSW). The second contract must be set aside on this basis.

44. I accept the consumer’s contention that the damage she suffered due to the trader’s misleading and deceptive conduct is the expense she incurred under the second contract that exceeded the commercial value of the work having regard to Mr Collins’ expert evidence about this.

39. In this respect, it is reasonable to assume that if the work performed under the second contract had been appropriately characterised as not urgent but potentially beneficial in providing a “permanent solution”, the consumer would have taken time to consider the quoted cost, discuss it with family members, and obtain alternative quotations for the work.

40. I regard this as a complete answer to the trader’s claims that it is entitled to charge what it likes for its work. The trader’s misleading and deceptive conduct deprived the consumer of the opportunity of ascertaining the fair commercial cost of the work and making a choice either not to proceed with the work, or between the trader and its competitors as the supplier of the services.

41. I note that the consumer accepts that she did receive benefit from the work performed by the trader under the second contract. She properly allows that the trader is entitled to retain fair value for that work as that is ascertained from Ms Collins evidence. I am satisfied for the purposes of s 79U of the FT Act that this will result in the order of the Tribunal being fair and equitable between the parties.

Orders

48. For the foregoing reasons I make the following order:

1. Onsite Trade Services Pty Ltd must pay Catherine Batho $16,125.00 immediately.

2. ****

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: 30 August 2022