Blessings Enterprises Pty Ltd Trading as Crystal Rivers Collection ACN 134 290 369 v Roxald Pty Ltd Trading as Nunie ACN 121 621 001
[2020] ACAT 63
•24 August 2020
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
BLESSINGS ENTERPRISES PTY LTD TRADING AS CRYSTAL RIVERS COLLECTION ACN 134 290 369 v ROXALD PTY LTD TRADING AS NUNIE ACN 121 621 001 (Civil Dispute) [2020] ACAT 63
XD 384/2019
Catchwords: CIVIL DISPUTE – breach of contract – elements of a contract – whether contract for sale of goods repudiated – acceptance of contract – where acceptance in writing and by subsequent conduct – absence of buyer intimating rejection of goods to the seller – where variation of goods were insubstantial – passing of title to goods – equitable remedy of quantum meruit rejected within an existing contract – debt to be repaid to seller by buyer
Legislation cited: Sale of Goods Act 1954 ss 6, 16, 18, 39, 52
Tribunal: Senior Member D Mulligan
Date of Orders: 24 August 2020
Date of Reasons for Decision: 24 August 2020
AUSTRALIAN CAPITAL TERRITORY
CIVIL & ADMINISTRATIVE TRIBUNAL XD 384/2019
BETWEEN:
BLESSINGS ENTERPRISES PTY LTD
TRADING AS CRYSTAL RIVERS COLLECTION
ACN 134 290 369
Applicant
AND:
ROXALD PTY LTD
TRADING AS NUNIE ACN 121 621 001
Respondent
TRIBUNAL: Senior Member D Mulligan
DATE:24 August 202063
ORDER
The Tribunal orders that:
1.The respondent pay the applicant $24,572.76 within 28 days comprised of:
(a)$22,048.48 debt amount;
(b)Interest in the sum of $1,340.28;
(c)Reimbursement of the $1,118 ACAT filing fee paid by the applicant; and
(d)Reimbursement of the $66 ASIC search fee paid by the applicant.
………………………………..
Senior Member D Mulligan
REASONS FOR DECISION
1.The applicant in this matter, Blessings Enterprises Pty Ltd, trading as Crystal Rivers Collection (Blessings), is a company that manufactures female clothing in South Korea and supplies those goods and accessories to shop owners in Australia and New Zealand.
2.Mrs Maggie Sunu is a director of Blessings and she had the most significant contact with the respondent.
3.The respondent is Roxald Pty Ltd, trading as Nunie (Nunie). Nunie is owned by Ms Roxanne Ebina.[1]
[1] Statement of Roxanne Ebina - paragraph 2
4.The respondent owns and operates a woman’s clothing store in the ACT which from time to time purchased goods from the applicant.
5.The business relationship between the applicant and the respondent began on 12 March 2017, when the respondent placed a small order ($2,666.40) for clothing from the applicant.
6.On 18 September 2017, the respondent placed a larger order ($20,321.40) with the applicant. This order included an item known as the Nunie jacket (NJ), an item created for the respondent at the request of Ms Ebina. Ms Ebina supplied Mrs Sunu with a jacket made by another company and she asked Mrs Sunu to copy it.
7.A total of 36 Nunie jackets were supplied as part of this order.
8.A further order was placed on 22 February 2018. This order was valued at $20,321.40.
9.The invoice number associated with this order was 807.
10.Mrs Sunu was not happy about the length of time it took for the respondent to pay the account in relation to the order of 22 February 2018. She did not receive the final payment for that order until 10 February 2019.
The April order
11.The order relevant to these proceedings was made on 9 April 2018 (the April order),[2] when Mrs Sunu went to the respondent’s shop to take the respondent’s order for the next season.
[2] Exhibit A1 Document 6
12.The order was valued at $22,432.30. It comprised 248 pieces and contained 100 pieces of the Nunie jacket and some other styles from previous seasons including the PJG, PDP, PTG, PLD and PNC ranges. According to Mrs Sunu the “P” in the descriptor of those ranges stands for “proven”, in other words styles repeated every season because of their proven sales record.
13.The April order was contained in a four-page order form.[3] Mrs Sunu’s company was expressed to be “Crystal Rivers Collection” and the ABN was stated as being 61 006 188 649.
[3] Exhibit A1 Document 6
14.These were the same details as stated on the previous order forms relating to the March 2017, September 2017 and the February 2018 orders.
15.The April order form listed a description of each item being ordered, the size of each item and the number of each item being ordered. It also provided a unit price for each item being ordered. The total amount for each item (number x unit price) was left blank.
16.At the foot of each page of the April order form the conditions of sale were set out in the following terms:
1. The Company agrees to supply and deliver to the purchaser the garments described in the order;
2. The Company shall deliver the garments by no later than Aug. Sep. Oct;
3. The purchaser agrees to pay to the company on delivery the balance due for the garments as ordered.
17.At the end of the April order form the applicant wrote the value of the order which was $22,432.30.
18.Ms Ebina signed the order form.
19.According to Mrs Sunu a further order was also made and delivered on 9 April 2018. According to her, she offered Ms Ebina some specials on items she had with her. The value of the items was $1,240 which was reduced to $891 after Mrs Sunu bought some items from the respondent.
20.According to Mrs Sunu, the balance of $891 was paid in full by Ms Ebina by the following day, 11 April 2018. This order is not significant to this proceeding and I only mention it for the sake of completeness.
21.After receiving the April order from the respondent, the applicant began the process of manufacturing the ordered items in preparation for the delivery to the respondent in August – October 2018.
22.The April order was ready for delivery in September 2018.
23.When preparing the April order, the applicant created invoice 891 (the April invoice),[4] which set out the details of what was being supplied.
[4] Exhibit A1 Document 13
24.The April invoice bore the same company details and ABN number as the April order form, that is “Crystal Rivers Collection” and the ABN being 61 006 188 649.
25.These were the same details as stated on the previous invoices the applicant had issued to the respondent relating to the March 2017, September 2017 order and the February 2018 orders.
26.The April invoice mirrored the April order form, in terms of what was being ordered, but supplied slightly more information, in that each line item had been totalled (number of each item x unit price), whereas in the April order form that numbers had been left blank in each line item.
27.The April invoice had two conditions on its face. The first was that “No return recognised unless made within seven days of receipt of goods.” The second condition was in relation to the time allowed for payment. It provided “Terms: payment in 7 days 21/2 discount otherwise 30 days nett.”
28.These conditions were included in the invoices relating to the March 2017, September 2017 and the February 2018 orders.
29.The goods ordered under the April order were delivered to the respondent’s shop on 10 September 2018 (the April goods).
30.On 10 September 2018, Mrs Sunu also spoke to the respondent at her shop to take her order for the winter season.
31.After obtaining the order Mrs Sunu presented Ms Ebina with a document without telling her what it was and asked her to sign it.
32.Ms Ebina began to sign the document, but stopped when she realised that she was being asked to sign a personal guarantee.
33.Mrs Sunu wanted Ms Ebina to sign a personal guarantee, because, according to her, the respondent had an outstanding balance owing to the applicant in the sum of $34,087.10.
34.Ms Ebina was angry with what she saw as a duplicitous act. She cancelled the order she had just made and ultimately asked the applicant to leave the store. In due course Mrs Sunu left the premises.
35.The respondent did not make payment within seven days and the applicant placed the matter in the hands of a collection’s agency, Canberra Collections, to try and gain payment for the April order.
36.At about 9:21pm on 21 October 2018, Ms Ebina sent an email[5] to an employee of the collections agency. The email read:
My number is xxxx xxx xxx,[6] the stock can be picked up. I have not signed any agreement to pay for the stock in such a short time frame. We have only put 10% out to be sold so far and the rest is in storage. We were short delivered over $1000 worth of stock and Maggie has not responded.
The matter is not that simple. Please call to discuss.
RegardsRoxanne
[5] Exhibit A1 Document 18
[6] Anonymised for privacy reasons
37.The thrust of Ms Ebina’s email appears to be three-fold. Firstly, she was unhappy about the short time frame in which she has been asked to pay for the stock. Secondly, she had only put ten percent of the stock in her shop for sale. Thirdly, more than $1,000 worth of stock was not delivered.
38.Nowhere, in the email of 21 October 2018, did Ms Ebina make any other complaint about the stock. In particular, she expressed no concern in relation to the sizing of any of the items delivered.
39.Ms Ebina sent a further email to the collection’s agency at about 9:24pm on 1 November 2018, in which she said, in part:
Please accept my apologies for not responding to your Sunday night email sooner. It required a detailed response and I have been tied up with daily business activities.
I will pay the outstanding amount to Crystal Rivers.
I will need to clarify the amount they are claiming I owe.
I have asked Maggie in writing repeatedly for a statement and the credit note for missing stock in the summer order and the only response I have had from her is “Soon”.
on receipt of the goods for this season there was a substantial amount of stock missing from the order. Matthew was emailed regarding this and has failed to provide me with a credit note for the amount missing, although she acknowledged it was missing after several requests for a credit note. I have asked for this in writing several times.
I have not been able to put any of the stock of the style that she has not provided a credit note for on the floor as I may have to return it to her. The stock is a substantial part of the order and it is unreasonable of her to expect payment without shorting this matter out.
40.In this email Ms Ebina does not dispute owing the amount due for the April order and does not seek to repudiate the contract.
41.Again, nowhere in her email of 1 November 2018, did Ms Ebina make any other complaint about the stock contained in the April order, other than a quantity of it was missing (11 items). There was no mention made in relation to the sizing of any of the items delivered.
42.Sometime after the incident in the shop on 10 September 2018 when Mrs Sunu was ejected from the shop, Ms Ebina and her staff began to investigate the applicant’s company structure and ABN number.
43.Ms Ebina, or a member of her staff, noted that a statement sent by the applicant and dated 3 July 2018,[7] had born different details. The company on that statement was said to be “Crystal Rivers Int Trading Pty Ltd” and the ABN was 73 134 290 350.
[7] Exhibit R1 page 8
44.The April order form and the April invoice both recorded the company as being “Crystal Rivers Collection” and the ABN being 61 006 188 649.
45.The April order form and invoice were in the same form as the documents relating to the orders of 12 March 2017, 18 September 2018 and 22 February 2017 and each of those documents detailed the company name as being “Crystal Rivers Collection” and the ABN as being 61 006 188 649.
46.On 6 November 2018, almost two months after the delivery of the April order, one of Ms Ebina’s employees searched the Australian Business Register[8] and found “Crystal Rivers Int Trading Pty Ltd.” The ABN associated with the business name was 73 134 290 350. These details were at one time correct. However, the ABN in question had been cancelled on 30 June 2011.
[8] Exhibit R1 page 46
47.Mrs Sunu’s son, Yunsu Sunu, gave evidence[9] that when creating the statement, he had mistakenly used the company’s old letterhead. Consequently, outdated and incorrect company and ABN details were used when creating the statement.
[9] Exhibit A1 Document 27
48.I accept his explanation.
49.On the same day 6 November 2018, the employee also conducted an ASIC database search in relation to “Crystal Rivers Collection.”[10] The resulting business name summary contained the information that the name was a registered business name in New South Wales, and it was associated with the registration number BN 98475429.[11]
[10] Exhibit R1 page 44
[11] Exhibit R1 page 44
50.The employee also looked up through the Australian Business Register, the details associated with the ABN 61 006 188 649 and found the entity to be “the Trustee for His Kingdom Trust.”[12] The registered trading name associated with the ABN was Blessing Enterprises Pty Ltd.
[12] Exhibit R1 page 45
51.Following her and her staff’s investigations, Ms Ebina took the view that “the applicant was operating illegally, providing fraudulent documents with false entity and false ABNs on all documentation provided to” her.[13]
[13] Paragraph 9 - statement of Ms Ebina dated 13 November 2019
52.By email of 12 December 2018,[14] Ms Ebina wrote to Mrs Sunu and in part said:
You have failed to respond to my solicitors request for documentation to verify your company’s identity for GST registration so that we could resolve this matter…
… In addition to this as you have not provided a legitimate invoice with an entity that we can identify as being registered for the GST I am unable to accept the goods as cannot pass on the GST charge to our clients without this information and have been unable to price them for the market stop.
[14] Exhibit A1 Document 17
53.In that same email Ms Ebina, for the first time, raised the issue that a significant number of the items that comprised the April order were not of the sized ordered by Ms Ebina. In part, the email read:
The stock delivered to us on the 10/9/18 for invoice 891 was withdrawn from sale. Upon inspection of the order and the invoice we realised that 81 of 248 ordered items were either missing or sent in the incorrect size…
I request that you arrange a courier to pick up the goods delivered to us on the 10/9/18 invoice 891 at the following address:
54.This email was sent just over three months after the respondent took delivery of the garments and after Ms Ebina conducted the audit of the April goods on 10 and/or 11 September 2018.
55.By the time of this allegation the respondent had inserted her own labels, with pricing and style information, into each of the items received.[15]
[15] Exhibit A1 Document 22
56.On 29 January 2019, the applicant’s solicitors WMG Legal,[16] wrote to Ms Ebina. They again demanded payment in relation to invoice 891, the April invoice. The solicitor also attached a copy of a revised April invoice.[17]
[16] Exhibit A1 Document 16
[17] Exhibit R1 Page 64
57.The difference between the original April invoice and that tendered on 29 January 2019 was the letterhead.
58.The letterhead for the revised April invoice supplied on 29 January 2019, was different from that originally provided to the respondent in April in September 2018. The new letterhead was in the following terms:
Crystal Rivers Collection
ABN 61 006 188 649
Blessing Enterprises Pty Ltd ITFHis Kingdom Trust TA Crystal Rivers Collection
59.Ms Ebina accepts that this description is correct. In paragraph 25 of her written final submissions she said, “In January 2019 she (Mrs Sunu) engaged a solicitor, who provided a statement and correct identities.”
60.Notwithstanding, the provision of the updated invoice the respondent declined to pay the April invoice.
61.After a payment was received by the applicant on 10 February 2019 (for the February 2018 order), the amount outstanding in relation to the April order was reduced to $22,048.40.[18]
[18] Exhibit A1 Document 23 - Letter from Apostles Legal to Ms Ebina dated 10 September 2019
62.Ms Ebina declined to make any further payment towards the April invoice.
63.As a result, proceedings were initiated by the applicant at ACAT on 29 March 2019.
64.The applicant’s claim was for $23,910.30.
65.The applicant seeks $22,048.48 (the outstanding total owed by the respondent), plus the payment of the ACAT filing fee in the sum of $1,118 and search fees of $66. The applicant also seeks interest, which for the period between 30 September 2018 and 27 March 2019 was $697.70.
66.The respondent denies liability for the sums sought by the applicant.
The law
The contract
67.In order to create a contract four elements needs to exist. There needs to be:
(a)an offer;
(b)acceptance of that offer;
(c)consideration; and
(d)an intention to create legal relations.
68.In my view all four of those prerequisites existed in relation to the April order.
69.The offer was made by Mrs Sunu, on behalf of Crystal Rivers Collection, to supply 248 items of clothing and other items.
70.Ms Ebina, on behalf of the respondent, signed the April order form and accepted the offer.
71.In consideration Ms Ebina agreed, on behalf of the respondent, to pay $22,432.30 to the applicant for the 248 items which made up the order.
72.It seems clear that both Ms Ebina and Mrs Sunu intended to enter into a contract and create legal relations between the two entities.
73.In paragraph one of her written final submissions Ms Ebina set out how she saw the arrangement between herself, Mrs Sunu and Crystal Rivers Collection. She said:
On 9/4/18 Ms Sunu and I entered a business agreement which I propose was legally binding, whereby Ms Sunu’s business “Crystal Rivers Collection” would supply specific garments, made to order in specific styles, colours and sizes as per order placed on 9/4/2018, to be delivered no later than August /September/October 2018, to my business, Nunie, which would pay the stated price in consideration for those goods.
74.As a consequence of the above matters I am satisfied that the April order was a valid contract between Crystal Rivers Collection and the respondent.
75.That contract was an agreement to sell the 248 items detailed in the April order, as opposed to a sale of those items.
76.The April order was an agreement for sale as the items for sale would be delivered at a later stage when the transfer of the property in the goods would take place.
77.An agreement to sell becomes a sale when the time elapses at which, or the conditions are fulfilled subject to which, the property in the goods is to be transferred.[19]
[19] Section 6(6) of the Sale of Goods Act 1954
78.In my view the agreement to sell became a sale when Ms Ebina received the contents of the April order on 10 September 2018 and by email of 11 September 2018, accepted all but 11 items, which had not been shipped as part of the order.
79.Ms Ebina, in her written final submissions, articulated a number of legal hurdles that she argues either overcome the application brought by the applicant in relation to the April order, or significantly reduce the amount of money owed by the respondent to the applicant. These arguments were under:
(a)section 16 of the Sale of Goods Act 1954;
(b)section 18 of the Sale of Goods Act 1954;
(c)a belief that as title in the April goods was reserved by the applicant until full payment was received, the applicant could not sue for the value of the goods and was obliged to accept the return of the goods in settlement of its claim against the respondent;
(d)the doctrine of quantum meruit.
Section 16 of the Sale of Goods Act 1954
80.The April order form and the April invoice are different in one key way. Through a clerical error, the columns containing the sizing information (8-10, 10 – 12 12 – 14 etc) are offset from the size descriptor (xs, s, m etc).
81.A person reading the April order form (below) could be confused by this mismatch.
82.For example, a reader looking at the column relating to size 10 – 12 could be confused into thinking that this related to a “medium” size.
83.Closer examination and a realisation that the columns had been offset would reveal the error and suggest the real size was “small”.
Figure 1 – Extract from the April order form
84.The invoice for the April order (below) did not have that defect.
85.A person looking at the column on the April invoice (below) relating to size 10 – 12, would readily understand that what was being referred to was a “small” size.
Figure 2 – Extract from the April invoice
86.Ms Ebina alleges she was caught out by the error on the April order form and consequently for each line item she received one item of the wrong size; an item that was one size larger than she wanted.
87.Mrs Sunu says that there was no confusion and that when she wrote up the order, she went by the size descriptor (s, m, l etc) and not by the size range (8 – 10, 10 -12 etc).
88.She says that when speaking to Ms Ebina she showed her a size card[20] (a card which correctly correlated the size descriptor with the size range), and that Ms Ebina used that card to determine what size of each garment she wanted to order.
[20] Exhibit A1 Document 11
89.Mrs Sunu, in effect, says that she then filled in the April order form based on what Ms Ebina actually ordered. She says she put the order in the column relating to the size descriptor as opposed to the size range and then asked Ms Ebina to sign it.
90.Mrs Sunu says that, read correctly, the April order form and the April invoice carry the same order information.
91.This argument has particular force if one accepts, as I do, that Mrs Sunu used the size card when taking Ms Ebina’s order.
92.Ms Ebina relies on section 16 of the Sale of Goods Act 1954, to give her relief from the error. Section 16 provides:
(1) If a contract of sale is subject to a condition to be fulfilled by the seller, the buyer may waive the condition or elect to treat a breach of the condition as a breach of warranty and not as a ground for treating the contract as repudiated.
(2) Whether a stipulation in a contract of sale is a condition the breach of which may give rise to a right to treat the contract as repudiated or a warranty the breach of which may give rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated depends in each case on the construction of the contract.
93.Ms Ebina alleges she was misled by the mis-aligned columns on the April order form and consequently the April order does not reflect what she in fact ordered.
94.Ms Ebina says that because she received an order with 81 items either missing or of the wrong size, she is entitled to repudiate the contract and to reject the goods.
Were there any errors in the items delivered on 10 September 2018?
95.On 10 September 2018, following Mrs Sunu’s departure from the shop, the two women began an exchange of emails.[21]
[21] Exhibit A1 Document 26
96.The first email was sent by Ms Ebina to Mrs Sunu at about 2:02pm on 10 September 2018. It stated:
Dear Maggie
Regarding the order placed at my shop today for next season, I would like to confirm that it has been cancelled. You refused to give me back the order in store even though I asked for it several times.
Regards
Roxanne Ebina
Nunie Canberra
97.Mrs Sunu replied at about 4:01pm, in the following terms:
You need to trust someone who’s been in business for 32 years with integrity.
I do not push anybody and always we do the business on neutral terms.
wish you all the best.
Please try to pay all the balances ASAP, it will be very much appreciated.
Thanks kindly
98.Ms Ebina sent the final email in this exchange at about 2:30pm on the following day, 11 September 2018. The email was in the following terms:
Thank you for cancelling the order.
Please note we are missing from the summer order invoice 891
10 pieces of NJ (I’m guessing it is two styles x 4 Pieces and NJ 228 – 4 in the M and L) $1199
PJG 236 – 8 in the L2 (1 piece) $75.90
In total 11 pieces total is $1274.90
I will deduct from the invoice.
So invoice total is $21157.40
Regards
Roxanne
99.The last email was written shortly after Ms Ebina cancelled the order made that day and ordered Mrs Sunu from her shop.
100.In paragraph 5 of her written final submissions Ms Ebina confirmed that she had personally checked the items delivered on 10 September 2018. Her submission read:
Upon receipt, I personally checked the goods and notified Ms Sunu that eleven garments were missing and requested a credit note.
101.It should be noted that contrary to the assertion in the above quote, Ms Ebina did not request a credit note. She amended the invoice herself to reflect the items that had not been delivered. In so doing she clarified the correct amount owing under the invoice after the value associated with the missing 11 items was deducted, namely $21,157.40.
102.When Ms Ebina did her reconciliation between what she ordered and what had arrived she would have had the April order form and the April invoice available to her.
103.Before writing the email of 11 September 2018, Ms Ebina necessarily went through each of the items delivered as part of the April order and considered the item code, style, size, quantity, unit price and amount of each line item.
104.Having considered all that information she was able to deduce which articles were missing and the size of the articles that were missing.
105.By necessary implication she must have satisfied herself that the rest of the delivered garments were of the correct type and size that had been ordered.
106.In my opinion this email of 11 September 2018, shows the respondent carefully considered the April goods and elected to accept the items supplied after carefully considering each item that had been delivered and after considering whether it was of the correct size.
107.For that reason, I am satisfied the respondent received what she ordered, except for the missing 11 items.
108.Ms Ebina made the adjustment in price ($1,274.90) for the missing 11 items and also adjusted the invoice amount to $21,157.40.
109.For that reason, I dismiss the respondent’s claims under section 16 of the Sale of Goods Act 1954.
Acceptance
110.It is also important to consider when a person in Ms Ebina’s position is considered to have accepted goods delivered to her. Section 39 of the Sale of Goods Act 1954 provides:
Acceptance
Subject to section 38, the buyer is deemed to have accepted the goods when:
(a) the buyer intimates to the seller that the buyer has accepted them; or
(b) the goods have been delivered to the buyer and the buyer does an act in relation to them that is inconsistent with the ownership of the seller; or
(c) after the lapse of a reasonable time, the buyer retains the goods without intimating to the seller that the buyer has rejected them.
111.In my view Ms Ebina unequivocally accepted the goods on 11 September 2018, when she sent the email to Mrs Sunu in which she noted the 11 missing items and adjusted the price for the order. This would amount to acceptance under section 39(a) of the Sale of Goods Act 1954.
112.Ms Ebina in her email of 21 October 2018,[22] confirmed that she had “only put 10% out to be sold so far and the rest is in storage”. In my view by putting the items up for sale in her shop, Ms Ebina was doing something that was inconsistent with the ownership of those items by the applicant. In my view, the act of putting goods on the shop floor for sale would amount to acceptance under section 39 (b) of the Sale of Goods Act 1954.
[22] Exhibit A1 Document 18
113.Ms Ebina did not purport to cancel the order until 12 December 2018, on the basis that 81 of the 248 items ordered were either missing or were of the wrong size. On that day she sent an email to Mrs Sunu[23] informing her of that intention to cancel the contract.
[23] Exhibit A1 Document 17
114.Just over three months had elapsed between the delivery of the goods on 10 September and Ms Ebina’s advice on 12 December 2018, that she wanted to cancel the order.
115.In my view the lapse of three months without Ms Ebina intimating to the applicant that she was rejecting the order would amount to acceptance under section 39(c) of the Sale of Goods Act 1954.
Section 18 of the Sale of Goods Act 1954
116.Ms Ebina also relies on section 18 of the Sale of Goods Act 1954 as justification for rejecting the goods. Section 18 relates to the sale of goods by description and it provides:
(1) If there is a contract for the sale of goods by description, there is an implied condition that the goods shall correspond with the description.
(2) If the sale is by sample as well as by description, it is not sufficient that the bulk of the goods corresponds with the sample if the goods do not also correspond with the description.
117.In her final submissions Ms Ebina alleges that “Specifically, there was an error on the order form which resulted in me purchasing garments in specific sizes and Mrs Sunu sending them in different sizes”. And that “in this case none of the garments sent to me matched the condition of the agreement, every single garment had the wrong size sewn on them”.
118.Ms Ebina is in error when she makes those statements. In the most favourable light, there were 11 items missing from the order and 70 items bearing a misdescribed size descriptor.
119.A large proportion of the 70 items with the misdescribed size descriptor were of the NJ range. Under cross examination by Mrs Sunu, Ms Ebina agreed with the proposition that the size descriptor was not significant in relation to the NJ range as those items could be purchased by women of different sizes but worn in a different way depending on the purchaser’s build.
120.In any event I am satisfied that on 10/11 September 2018, Ms Ebina satisfied herself that the order was correct, except for the fact that 11 items were missing, and that she made the appropriate price adjustment.
121.For that reason, I dismiss the respondent’s claims under section 18 of the Sale of Goods Act 1954.
Property has not passed
122.The April invoice contained a condition relating to the reservation of title. The condition was expressed in the following terms “Title of the goods does not pass to the buyer until the invoice is paid in full.”
123.In paragraphs 57 and 58 of her final written submissions, Ms Ebina alleged that the property in the April order had not been passed to her as she had not paid for the goods and as a consequence the act of Mrs Sunu collecting the goods would end the dispute between the parties. Ms Ebina’s submissions were:
57. Ms Sunu has a provision on her invoice in place to protect her against non-payment of goods. Acting on this provision will solve the issue, “Title of the goods does not pass to the buyer until the invoice is paid in full.” Refer to bottom of her invoice 891.
58. At this point I would like Ms Sunu to pick the goods up at her own expense asap to resolve the matter.
124.Section 52 (2) of the Sale of Goods Act 1954 applies to the point raised by Ms Ebina. It allows a person in Mrs Sunu’s position to maintain an action for the price of the items notwithstanding the fact that the applicant reserved title in the goods until they had been paid for by the respondent. Section 52 (2) provides:
If, under a contract of sale, the price is payable on a day certain irrespective of delivery and the buyer wrongfully neglects or refuses to pay the price, the seller may maintain an action for the price although the property in the goods has not passed and the goods have not been appropriated to the contract.
125.In this case, the price was payable within seven days of the delivery of the goods, on 10 September 2018. The respondent’s failure to pay the applicant within that period allows the applicant to rely on section 52(2) and sue the respondent for the agreed price, notwithstanding the fact that property (title) in the goods remains with the applicant.
126.The applicant is entitled to both reserve title and sue for the price of the goods pursuant to section 52(2) of the of the Sale of Goods Act 1954.
127.As a consequence, I dismiss the respondent’s claim in relation to this issue.
Quantum meruit
128.The respondent submits that it would be appropriate to determine the application under the doctrine of quantum meruit[24]. Ms Ebina’s submission, contained in her written final submissions is to the following effect in relation to how much she believes her company owes the applicant for the goods:
Alternatively, payment for the goods based on a quantum meruit valuation which I calculate as follows:
(a) Face value under the original contract. $21,157.40;
(b) Less estimated reduced market value due to superseded season $1,8057.40;
(c) Less estimated cost of rectification of defects. $2,350;
(d) Total proposed present value of the goods. $750.
[24] Latin for “what one has earned”
129.Quantum meruit is an equitable remedy not a contractual concept.
130.Quantum meruit has no application to the present case. Quantum meruit exists where there is no enforceable contract and in circumstances where a party is unjustly enriched by a benefit from another party.
131.The present case can and should be determined on the basis that the parties entered into a contract on 9 April 2018.
132.Even if quantum meruit applied to the present case I would award the applicant the face value for the goods, $21,157.40, as the value would be that at the time of which the goods were delivered, not at a time about 22 months after delivery.
133.I dismiss the respondent’s claim that a quantum meruit valuation of the goods is the appropriate valuation that should be adopted.
Summary
134.I am satisfied that a contract came into existence on 9 April 2018 between the applicant and the respondent. Under the contract the applicant agreed to supply the respondent with 248 items at a price of $22,432.30.
135.All but 11 items of that order were delivered to the respondent on 10 September 2018.
136.The respondent checked the order and on 11 September 2018. She then wrote to Mrs Sunu and advised her that 11 pieces with a value of $1,274.90 had not been included with the order. She deducted that amount from the invoice and adjusted the invoice amount to be $21,157.40.
137.Following a payment in February 2019, the total amount owing under the contract by the respondent to the applicant is $22,048.48.
138.The respondent is also entitled to:
(a)the ACAT filing fee of $1,118;
(b)the search fee of $66; and,
(c)interest in the sum of $1,340.28 (interest is calculated from 18 September 2018 (the eight day after delivery of the goods) until 31 October 2019, the first day of the hearing at ACAT. Mrs Sunu’s unavailability for a long period after that day meant that the hearing could not be completed until 4 March 2020).
139.The result is that the respondent owes the applicant the sum of $24,572.76.
………………………………..
Senior Member D Mulligan
HEARING DETAILS
FILE NUMBER:
XD 384/2019
PARTIES, APPLICANT:
Blessing Enterprises Pty Ltd T/as Crystal Rivers Collection ACN 134 290 369
PARTIES, RESPONDENT:
Roxald Pty Ltd t/as Nunie ACN 121 621 001
COUNSEL APPEARING, APPLICANT
N/A
COUNSEL APPEARING, RESPONDENT
N/A
SOLICITORS FOR APPLICANT
N/A
SOLICITORS FOR RESPONDENT
N/A
TRIBUNAL MEMBERS:
Senior Member D Mulligan
DATES OF HEARING:
4 March 2020
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