Churchill v Arnold T/As Hills in Hollywood Canberra (Civil Dispute) - [2015] ACAT 2

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

CHURCHILL & ANOR v ARNOLD T/AS HILLS IN HOLLYWOOD CANBERRA (Civil Dispute) [2015] ACAT 2

XD 14/745

Catchwords: CIVIL DISPUTES – contract for supply of goods – termination of contract - whether time limitations were fundamental to the contract - refund on wedding dress – whether payment for rushed delivery makes time of the essence

Legislation: Sale of Goods Act 1954 (ACT) s 15.

Competition and Consumer Act 2010 (Cth) Schedule 2 (Australian Consumer Law), Parts 2.1, 2.2, 2.3, 3.1.

ACT Civil and Administrative Tribunal Act 2008 (ACT) s 48.

Cases:Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623.

Tribunal: Mr A. Anforth, Senior Member

Date of Hearing: 9 January 2015

Date of Reasons for Decision: 9 January 2015

AUSTRALIAN CAPITAL TERRITORY )

CIVIL & ADMINISTRATIVE TRIBUNAL ) XD 14/745

BETWEEN:

OLIVIA CHURCHILL

MATTHEW HALL

Applicants

AND:

EILEEN ARNOLD t/as

HILLS IN HOLLYWOOD CANBERRA

Respondent

Tribunal: Mr A. Anforth, Senior Member

Date: 9 January 2015

ORDER

The Respondent is to pay the Applicants $150.00 within 28 days of these orders.
The Application is dismissed with no order as to costs.

......................................................
Mr A. Anforth, Senior Member

REASONS FOR DECISION

Facts

On 12 December 2013, the Applicant, Olivia Churchill and her mother attended the Respondent’s bridal store ‘Hills in Hollywood’. The Applicant was served by the Respondent’s employee Catherine Staples. The Applicant entered into a contract for the purchase of an Aariana wedding gown from the Respondent for $2,250.00. The Applicant paid in cash and an additional $150 described as a ‘10 week rush fee’.
The invoice accompanying the contract noted that the wedding date was 22 March 2014, and the estimated delivery date for the dress was ‘10 weeks – APPROX 20-27^th February’.
Clause 8 of the contract reads:
‘No exchange or refund once a gown & or accessories is fully paid as ownership automatically transfers to the buyer, even if the gown is still with Hills of Hollywood.’
Clause 11 of the contract deals with delays in supply. The Clause reads:
‘Failure to supply resulting from delays impacting on the Purchaser’s wedding date. Due to unforeseen circumstances outside Hills in Hollywood’s control, we will guarantee to:
(a). Find an alternative, most similar in value and design and or most suitable gown at no extra expense to the bride or the purchaser.
(b). Goods ordered are supplied subject to availability and we have the right to review all orders if we feel delivery is going to be jeopardised beyond our control.
(c). Alternatively, and only in this instance, we will offer a full refund at the Purchaser’s request.
(d). We accept no liability, damage claims, demands or consequential cost claims arising out of such delays which are outside our control, including but not limited to Force Majeure, (acts of god, terrorism, strikes), Customs and Freight clearance issues, Global warming catastrophes’, Global Financial Crisis’, and any other restrictions imposed via external factors including sudden trade sanctions, Trade Union activities, strikes and other forms of interference to deliveries from interstate and or overseas.
On 13 February 2014 Ms Churchill phoned the Respondent to enquire if the dress had arrived. She was told allegedly that the dress would arrive on 20 February 2014 and the Respondent would phone her when the dress was ready for collection.
On 21 February 2014 Ms Churchill phoned the Respondent to enquire about the whereabouts of the dress. She was told that the paperwork was missing and that the dress was not in the store, but the Respondent would contact Ms Churchill when the dress arrived.
On 26 February 2014 Ms Churchill phoned the Respondent to enquire about the dress and left a voice message asking to be called back as soon as possible.
On the same day the second Applicant, Mr Hall, called the Respondent and spoke to Ms Staples. Mr Hall was told by Ms Staples that she could not locate the dress and that she was expecting a call from the supplier which should happen around 10am on 27 February 2014. Mr Hall asked for the phone number of the supplier but was told by Ms Staples that the Respondent was not allowed to give out the number of the supplier, and that the supplier does not accept calls from members of the public.
On 26 February 2014 Ms Churchill emailed Ms White from International Gowns which was the Respondent’s suppliers. The email discussed the purchasing of the wedding gown, and Ms Churchill’s difficulties with finding out when the gown would be delivered. Ms Churchill asked for the matter to be treated as urgent, and asked to be called back by a senior manager or director of the company so she could be told where the dress was and when it would be delivered.
On 28 February 2014 Ms Churchill purchased a different wedding dress from a different shop. This information was not conveyed to the Respondent.
On 2 March 2014 Mr Hall sent an email to the Respondent. The email detailed numerous calls to the Respondent and the supplier International Gowns where the Applicants were attempting to find out where the gown was and when it would arrive in the store. The email concludes by requesting a refund of $2400 for the Aariana gown as it had not arrived within the specified date.
On 5 March 2014 the Respondent sent an email to Mr Hall advising that the gown ordered on 12 December 2013 had arrived in store. The Respondent said that it was not obligated to provide a refund as per the contract, but would refund the $150 rush fee and provide the alterations free of charge because of the delay of the gown arriving. Mr Hall replied to that email stating that the Applicants required a full refund.
The Applicants’ wedding was postponed for personal reasons unrelated to the wedding dress issue. Ms Churchill wore the second wedding dress at the delayed wedding.
On 23 May 2014 the Applicants filed the present application with the Tribunal seeking a full refund of the purchase price paid.
On 24 June 2014 the Respondent filed its Response to the claim.
On 23 July 2014 mediation occurred and was unsuccessful. Procedural orders were made for the parties to file and serve the evidence upon which they relied and submissions on the relevant law.
On 6 August 2014 Ms Clarke from International Gowns emailed the Applicant Mr Hall. The email recounts that International Gowns received the order for Ms Churchill’s gown on 12 December 2013 and that she emailed the supplier in the USA to order the gown on 13 December 2013. The email admits that conversations were difficult to remember given the time lapse and customer volume, but then recalls two other emails sent to the USA supplier on 10 February 2014 and 26 February 2014 respectively. Ms Clarke then recalled that the supplier emailed back on 26 February 2014 and said that the gown had been sent that day and attached a tracking receipt. The email concluded by discussing International Gowns’ policy about delivery dates, and how they recommended to retail stores to advise their customers that the delivery date would be one month after the delivery date advised to them by International Gowns.
On 8 August 2014 Ms White of International Gowns emailed the Applicant Mr Hall. Ms White’s email could not recall the conversations that took place with Hills in Hollywood around the time of ordering the gown on 12 December 2013. The rest of the email discusses the ordering policy in relation to estimated delivery dates of the gowns, and that there can often be a four week delay with orders. The email then said that International Gowns does not recommend placing orders if the wedding/wear date is less than two months away.
On 15 August 2014 the Applicants filed what is described as an Amended Civil Dispute. Notwithstanding the title to the documents it appears to be the Applicants’ response to the procedural directions. It contained a chronology of events and a statement from Ms Churchill.
On 28 August 2014 the Respondent filed its response to the procedural directions setting out a chronology, a statement from Ms Arnold and Ms Staples together with the Respondent’s arguments.
The dress ordered from the Respondent remains in the Respondent’s possession and no refund has occurred of any of the purchase money

The Hearing

The matter was listed for hearing 10 October 2014. The Applicants appeared in person and Mr Prail, solicitor, appeared for the Respondent.
Neither party called witnesses, and both were given an opportunity to elaborate on the written submissions and documentary evidence filed before the hearing. Both parties were given the opportunity to ask any questions they wished of the other party.
There was no real dispute about the facts set out above. The contest between the parties concerned the Applicants’ right to a refund on the basis of those facts.

Relevant law

The law governing the resolution of this dispute is the common law of contract as modified by the Sale of Goods Act 1954 (ACT).
The Tribunal also considered any potential application of the Australian Consumer Law (ACL) which makes it unlawful to engage in misleading or deceptive conduct, unconscionable conduct, to use unfair contracts or to make false or misleading representations about goods or services (Parts 2.1, 2.2, 2.3 and 3.1 ACL). It also contains a set of ‘consumer guarantees’ (Part 3.2).
Section 29(k) ACL provides that a person or business must not make false or misleading representations about the origin of goods, and at the hearing the Applicants made a submission that they would not have purchased the dress if they had known that it was manufactured in China. However, there was no evidence tendered in the submissions or at the hearing that the Applicants made any substantive enquiries about the manufacturing origin of the dress at the time of purchase.
On the facts set out above there is nothing that points to the application of any of these provisions of the ACL.

The Contract

The relevant terms of the contract are set out above.
Ms Churchill read and signed the contract. There is no suggestion by her that she lacked the intellectual capacity to do so. There is no suggestion that there were promises made to her by the Respondent outside the terms of the written contract. She is bound by the terms of the contract.
Clause 8 provides a ‘no refund policy’ which applies except in the circumstances of clause 11. There is nothing in any part of the common law or any statutory provisions in the ACT that makes a contractual ‘no refund policy’ unlawful. The only circumstances in which such a contractual clause would be unlawful is where it is inconsistent with a provision of the ACL, the Sale of Goods Act 1954 (ACT), or some part of the common law of contract or equity relating to mistake or duress, as to which there is neither suggestion nor evidence.
Clause 11 applies where each of the following occur:
(a)There is a failure to supply;
(b)due to unforeseen circumstances outside the Respondent’s control
(c)that impacted on the purchaser’s wedding date.
In these circumstances clause 11 provides for an alternative dress to be provided and a refund only if no alternative dress can be provided.
There is an issue concerning whether the Respondent ‘failed to supply’ the dress. The dress was available on 5 March 2014. The contract provided an ‘estimated’ arrival date of 27 February 2014. 5 March 2014 is only the fourth working day after 28 February 2014.
The Respondent will only have failed to supply the dress if an objective construction of the contract allows the inference that the parties intended delivery time to be of the essence in the contract. In these circumstances a failure to supply the dress on or before 27 February 2014, becomes a fundamental breach of the contract at common law (section 15 Sale of Goods Act 1954 (ACT); Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623) which allows the innocent party to notify its termination of the contract. In the present case the earliest such notification was the email of Mr Hall of 2 March 2014.
The supply clause in the contract is explicitly framed in terms of an ‘estimated’ date. This date was an earlier date than would normally apply to delivery because Ms Churchill elected to pay the $150 fee for a rushed delivery. It is important to note that the payment of this early delivery fee was the basis for the earlier ‘estimated’ date of delivery. It was not the case that the payment of this fee was intended to convert the earlier ‘estimated’ date of delivery into a guaranteed date of delivery.
Without resorting to a study of the case law, the Tribunal is of the view that the use of the ‘estimated’ terminology is inconsistent with time being of the essence of the contract.
Clause 11 also requires that any delay in supply of the dress has impacted on the date of the wedding. On the facts, this was not the case. The arrival of the dress on 5 March 2014 represented no threat to the date of the wedding. Ipso facto, non-arrival of the dress by 28 February betokened even less of a threat to the wedding date. The wedding was postponed for other personal reasons.
For the above reasons the Tribunal is satisfied that clause 11 does not apply on the facts of the case. However even if clause 11 did apply, Ms Churchill was required to afford the Respondent the choice of providing an alternative dress. She did not do so. In fact, Ms Churchill had resolved to terminate the present contract when she purchased a new dress on 28 February 2014, only one day after the end of the estimated delivery period. Even if the new dress had been purchased after 28 February but before 5 March, clause 11 still applied.
It is the case that at some point in time a delay in supply morphs into a failure to supply. In the present case, Ms Churchill determined to repudiate the contract on 28 February, at which date there was no delay at all by the Respondent referable to the contractual estimated date of delivery. But even if Ms Churchill had not made this choice for another couple of working days, the time frame would still not have betokened a failure to supply on the Respondent’s part.
Clause 11 anticipates the above delays and provides for an alternative dress or a refund, but only where the delay is impacting adversely on the wedding date. In the present case there was no evidence of this potential adverse effect.
It appears to the Tribunal that Ms Churchill was becoming anxious about the dress and by 28 February her anxiety levels were such that she did not want take a risk that the ordered dress may not turn up in time. It was for this reason that she decided to purchase a different dress on that day. Whilst this is understandable, it does not follow that personal anxiety forms a basis for repudiating the contract. The appropriate course of action was for Ms Churchill to attempt to invoke clause 11 by attending the dress shop to express her anxiety, her concern about the potential need to delay the wedding and that she now wanted an alternative fitted dress.
The ordered dress is available for the Applicants to collect and is their property.
During the hearing the Respondent offered to refund the $150 early delivery fee. An order will be made to give effect to this offer.
The application is dismissed.
In accordance with section 48 of the ACT Civil and Administrative Tribunal Act 2008 (ACT) the Tribunal orders that each party must bear their own costs in this proceeding.

………………………………..

Mr A. Anforth

Senior Member

HEARING DETAILS

FILE NUMBER:	XD 14/745
PARTIES, APPLICANT:	Olivia Churchill & Matthew Hall
PARTIES, RESPONDENT:	Eileen Arnold trading as Hills in Hollywood Canberra
SOLICITORS FOR RESPONDENT	Mr Prail, Prail Lawyers
TRIBUNAL MEMBERS:	Mr A. Anforth – Senior Member
DATES OF HEARING:	14 October 2014