De Flumeri v Canberra Discount Chemicals Pty Ltd & Anor - [2016] ACAT 50

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

DE FLUMERI V CANBERRA DISCOUNT CHEMICALS PTY LTD AND ANOR (Appeal) [2016] ACAT 50

AA 44/2015
Catchwords: APPEAL – civil dispute – pre-conditions for an appeal - question of fact or law - consideration of an argument based on established facts - re-hearing - Australian Consumer Law - fitness of a product for undisclosed purpose - assessment of damages - award of costs in the Tribunal

Legislation cited: ACT Civil and Administrative Tribunal Act 2008 ss 48, 79 82
Competition and Consumer Act 2010 (Cth) schedule 2 (The Australian Consumer Law, s 54)
Fair Trading (Australian Consumer Law) Act 1992 (ACT) ss 6, 7

Cases cited:B & T Constructions (ACT) Pty Ltd v Construction Occupations Registrar and Anor [2013 ] ACTSC 219
Chakravarty & Commissioner for ACT Revenue [2013] ACT 11
Dependable Motors Pty Ltd v Ashford Shire Council (159) 101 CLR 265 at 289
Dranichnikov Minister for Immigration and Multicultural Affairs (2003); 77 ALJR 1088
Nufarm Australia Ltd v Dow AgroSciences Australia Ltd (No 2) (2011) 282 ALR 24
Plaintiff M61/2010E v Commonwealth (Offshore Processing Case) (2010) 243 CLR 319

Text/Papers: Consumer Guarantees - A Guide for Businesses and Legal Practitioners, 2010

Tribunal: General President L Crebbin (Presiding Member)

President G C McCarthy

Date of Orders:  24 May 2016
Date of Reasons for Decision:         24 May 2016
AUSTRALIAN CAPITAL TERRITORY           )
CIVIL & ADMINISTRATIVE TRIBUNAL                   )
AA 44/2015

BETWEEN:
PAUL DE FLUMERI
Applicant

AND:
CANBERRA DISCOUNT CHEMICALS PTY LTD
First Respondent

KOLDER PTY LTD
Second Respondent

TRIBUNAL: General President L Crebbin

President G C McCarthy

DATE:24 May 2016
ORDER

The Tribunal Orders that:

The decision of the original tribunal dated 21 October 2015 is set aside.
Within 28 days, the first respondent pay the appellant $1,991 comprised of:
(a)$1,386 for the cost of the replacement shower screen.
(b)$68 for the original application filing fee.
(c)$499 for the appeal application filing fee.
(d)$38 for the ASIC search fee.

………………………………..
President G C McCarthy
for and on behalf of the Tribunal

REASONS FOR DECISION

The appellant, Mr Paul de Flumeri, appeals from an oral decision of the tribunal given on 21 October 2015. In these reasons for decision, the word ‘tribunal’ is used when referring to the tribunal that conducted the original hearing. The word ‘Tribunal’ is used when referring to the appeal tribunal.
The factual background is short and relatively uncontroversial.
In September 2014, the appellant’s partner, Ms Nyssah Ryrie, purchased a liquid cleaning product called ‘Bathroom Master’ from the first respondent that carries on a business known as The Cleaning Warehouse. The first respondent both manufactures and supplies Bathroom Master. Ms Ryrie chose the product with reliance upon the recommendation of a member of the first respondent’s sales staff, Mr Steve Garry, after informing him that she intended to use it to clean her domestic bathroom including the shower.
On 20 September 2014, Ms Ryrie used Bathroom Master to clean her shower screen. The screen was sourced and installed by the second respondent that carries on a business known as ACT Shower Screens and Wardrobes. The shower screen had been installed less than 12 months previously.
The label on the two litre bottle containing the Bathroom Master product stated how the product should be used:
SHOWER RECESS AND TILES
Spray on undiluted, leave for 10 minutes to kill mould and germs
The bottle was also marked with a ‘corrosive’ warning sign, but did not state that the product was unsuitable for use on aluminium, other metals or any other surface.
Although the directions on the bottle stated “spray on undiluted”, Ms Ryrie diluted the product with water before cleaning the shower screen. When Ms Ryrie applied the product in accordance with the instructions on the bottle, it significantly discoloured the anodised aluminium frame around the shower screen. The shower screen remained functional, and had not been replaced at the time of this appeal, although the appellant states he intends to replace it because of the seriousness of the discolouration.
Both respondents accept that the discolouration cannot be repaired. The second respondent explained that it would be cheaper to replace the whole shower screen than replace the framing.
The appellant corresponded with the respondents between 22 September 2014 and 20 May 2015 in an endeavour to persuade the respondents to replace the shower screen but without success.
Consequently, on 15 July 2015 the appellant filed an application with the tribunal seeking orders that the respondents pay him $1,386 to cover the cost of a replacement shower screen, and a further $106 to reimburse him for his filing fee ($68) and an ASIC company search fee ($38).

The decision of the original tribunal

The tribunal heard the original application on 21 August 2015. The application did not specify a cause of action, and all the parties were unrepresented at the hearing. In these circumstances, the tribunal raised possible legal causes of action that it considered the applicant might have, namely a claim in negligence, a claim in contract and “as a consumer claim under the National Consumer Law”.[1]
[1] Transcript of Proceedings 21 August 2015 pages 28, lines 39 - 43
Although raising these three potential causes of action, the tribunal commenced its reasons by stating “I have looked at the matter in the end in the context of negligence”.[2] The tribunal stated “that there has been a combination of elements, it is almost like a perfect storm which in combination has led to this damage happening”.[3]
[2] Transcript of Proceedings 21 August 2015 page 48, lines 40 – 41
[3] Transcript of Proceedings 21 August 2015 page 48 lines 37 – 38
The tribunal concluded that the first respondent was negligent in selling the product without sufficient warning that it could be corrosive on metal substances, and in particular aluminium shower screens.
The tribunal concluded that the second respondent was also negligent by failing to provide purchasers of the shower screens with information, for example in a brochure, that warned them about the kinds of cleaning products that could discolour the aluminium and advising them about the kinds of products that were safe to use.
The tribunal also found contributory negligence on the part of Ms Ryrie for not “asking more questions” about whether Bathroom Master could be safely used on the aluminium frame in circumstances where the label stated that the product was “corrosive”. The tribunal also referred to a drawing of the product on the bottle by which it “is clearly illustrated as burning through a surface”.[4]
[4] Transcript of Proceedings 21 August 2015 page 50 line 13
For these reasons, the tribunal concluded that each of the three parties was just as equally responsible for the damage.
The tribunal then found that the cost of replacing the shower screen was not the correct measure of loss because the shower screen remained functional and there was no guarantee that the appellant would replace it. The tribunal determined that the damages should be assessed only by reference to the discolouration of the aluminium, being a matter of aesthetics, which it assessed at $600. On this basis the tribunal ordered the first and second respondents to pay $200 each to the appellant by reference to their respective negligence, and determined that the appellant should bear $200 of the damages himself by reference to Ms Ryrie’s contributory negligence.

The Appeal

On 16 November 2015 the appellant filed an application for appeal. On 11 December 2015 the appellant applied for the appeal to be heard as a new application, with new evidence to be presented. On 22 January 2016 the Tribunal determined that the appeal would be dealt with as a review of the original decision under section 82(b) of the ACT Civil and Administrative Tribunal Act 2008 (the ACAT Act), but gave the appellant leave to rely on two further items of evidence:
(a)The Bathroom Master Materials Safety Data Sheet; and
(b)Appendix C: Maintenance of Anodised Aluminium, AS1231-2000.
The application for appeal raised the following questions:
(a)whether the tribunal failed to take into account the relevant law by not considering a claim under the Australian Consumer Law (the ACL)[5] that the product was not of acceptable quality, was not fit for purpose and was not correctly described;
(b)whether the tribunal erred by failing to consider a claim that the first respondent misled the appellant by advising that its product was safe to use on aluminium;
(c)whether the tribunal erred in finding contributory negligence on the part of the appellant, or, in the alternative, finding contributory negligence to a degree that was equal to the negligence of the first and second respondents; and
(d)whether the damages awarded were sufficient.
[5] Pursuant to section 6(a) of the Fair Trading (Australian Consumer Law) Act 1992 (ACT), the Australian Consumer Law at schedule 2 to the Competition and Consumer Act 2010 (Cth) forms part of the "Australian Consumer Law text". Section 7 of the Fair Trading (Australian Consumer Law) Act provides that the Australian Consumer Law text applies as a law of the ACT
The appellant seeks damages and costs totalling $2,583.42. This consists of the cost of a replacement shower screen ($1,386), disbursements from the original proceedings ($106 comprised of the filing fee ($68) and a search fee ($38)), the cost of obtaining the transcript of the original proceedings ($592.42) and the appeal application filing fee ($499).
The appellant also seeks an order that the first respondent be required to retain a warning on the label placed on bottles of Bathroom Master that the product should not be used on aluminium shower strips. The first respondent placed these labels on the bottles soon realising the product was not suitable for use on aluminium but later removed them.
On 8 February 2016, the first respondent filed a response opposing the appeal on the grounds that the appellant had not presented new evidence that was sufficient to justify overturning the original decision. The second respondent did not file a response but Mr Rowe on behalf of the second respondent attended the appeal hearing. Mr Rowe did not challenge the original decision and disputed any further liability.
Principles that apply to appeals
The appellant’s right of appeal lies under section 79(3) of the ACAT Act, which states:
Appeals within tribunal
(1) This section applies if—
(a) the tribunal has decided an application (the original application ); and
(b) the original application was not an appeal from a decision by the tribunal.
(2) However, this section does not apply to an application for review of a decision under the Heritage Act 2004 , the Planning and Development Act 2007 or the Tree Protection Act 2005.
(3) A party to the original application may, by application, appeal the decision to the tribunal on a question of fact or law.
Several cases have described the limitations on appeal and the role or function of the Appeal Tribunal. In Chakravarty & Commissioner for ACT Revenue [2013] ACAT 11 at [36] – [39], Presidential Member Symons said:
36.             An appellant does not have standing to an appeal as of right and is required to identify a question of fact or law (section 79(3)). An appellant cannot merely request the re-exercise of a discretion.
37.             In ACT Human Rights Commission v Raytheon Australia Pty Ltd Master Harper stated, in relation to the Administrative Appeals Tribunal:
“A decision of the Tribunal is not intended to be open to appeal generally, as is the case, for example, with a judgment of this Court. It must be accepted that there are sound reasons for public policy for this limitation, notwithstanding some who fail in the Tribunal will have a sense of grievance about it.”
38.             Acting President Chenoweth also stated in Das v A & A Airconditioning (Civil Disputes):
“The purpose of the appeal process is not to allow an applicant to try and have a matter reheard because they do not like the previous decision; if that were so there would be no point in the original hearing...”
39. Pursuant to subsection 79(3) of the ACAT Act, there must be a question of law or fact identified on appeal that enables the Appeal Tribunal to consider whether the Original Tribunal made an error as to the law or facts raised in those questions. (footnotes omitted)
Once the error/s, referenced to the relevant question/s of fact and all laws have been identified for the purposes of appeal pursuant to section 79(3) of the ACAT Act, the Appeal Tribunal must determine under section 82 whether to deal with the appeal as a new application or as a review of all part of the original decision. In this case, the Tribunal determined it should be dealt with by way of review.
In B & T Constructions (ACT) Pty Ltd v Construction Occupations Registrar and Anor [2013] ACTSC 219 at [11] – [18], Burns J set out relevant principles concerning the nature of an appeal to the Appeal Tribunal that is dealt with by way of review. He said:
11. To determine the nature of the appeal it is necessary to refer to some provisions of the ACAT Act:
79. Appeals within Tribunal
(1) This section applies if –
(a) the tribunal has decided an application (the original application); and
(b) the original application was not an appeal from a decision by the tribunal.
...
(3) A party to the original application may, by application, appeal the decision to the tribunal on a question of fact or law.
82. Handling Appeals
An appeal tribunal, may, as the tribunal considers appropriate, deal with an appeal –
(a) as a new application; or
(b) as a review of all or part of the original decision on the application by the tribunal.
12. As Refshauge J pointed out in The Legal Practitioner v The Council of the Law Society of the ACT [2011] ACTSC 207, the effect of s 79 is to give a party to any original application (except those specified in s 79(2), not presently relevant) a full right of appeal within the ACAT. The ACAT is then empowered by s 82 effectively to elect to deal with the appeal as a hearing de novo (s 82(a)) or as a rehearing (s 82(b)). As what is removed into this Court is the appeal in the ACAT, this Court must exercise the jurisdiction that would otherwise have been exercised by the ACAT appeals tribunal, including determining the nature of the appeal pursuant to s 82.
13. In my opinion, this appeal should be dealt with as a review of the original decision of the ACAT confirming the rectification orders with respect to the non-complying items: s 82(b). I base this decision on the fact that all of the relevant evidence was received by the ACAT, and no question of the credibility of the witnesses called in the ACAT arises. The present appeal largely concerns issues of statutory interpretation. I add that the parties to this appeal approached it as a rehearing, rather than a hearing de novo.
14. The nature of such an appeal is well known. In Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 the majority (Gleeson CJ, Gummow and Kirby JJ) said (at [22]–[23]) in relation to such appeals:
The “rehearing” does not involve a completely fresh hearing by the appellate court of all the evidence. That court proceeds on the basis of the record and any fresh evidence that, exceptionally, it admits. No such fresh evidence was admitted in the present appeal.
The foregoing procedure shapes the requirements, and limitations, of such an appeal. On the one hand, the appellate court is obliged to “give the judgment which in its opinion ought to have been given in the first instance”. On the other, it must, of necessity, observe the “natural limitations” that exist in the case of any appellate court proceeding wholly or substantially on the record. These limitations include the disadvantage that the appellate court has when compared with the trial judge in respect of the evaluation of witnesses’ credibility and of the “feeling” of a case which an appellate court, reading the transcript, cannot always fully share. Furthermore, the appellate court does not typically get taken to, or read, all of the evidence taken at the trial. Commonly, the trial judge therefore has advantages that derive from the obligation at trial to receive and consider the entirety of the evidence and the opportunity, normally over a longer interval, to reflect upon that evidence and to draw conclusions from it, viewed as a whole. (Citations omitted)
15. These principles were reiterated in the Court of Appeal in Federow v Federow [2011] ACTCA 10 (Gray P, Penfold J, Nield AJ at [7]–[9]).
16. In Connelly v Allan [2011] ACTSC 170, Refshauge J, in the context of an appeal to this court from a conviction imposed in the Magistrates Court, said (at [12]–[13]) concerning appeals by way of rehearing:
So far the appeal against conviction is concerned, it is a rehearing. That is, the appeal court must determine whether the decision of the Magistrates Court is wrong, by that court falling into error of law, making a finding of fact that is clearly wrong or exercising a discretion on a wrong principle or in a way that is clearly wrong. This court, as the appellate court, will give proper allowance to the advantage of the Learned Magistrate who has seen and heard the witnesses, so that, ordinarily, facts found based on the assessment of witnesses will not lightly be overturned.
The appellate court is obliged to conduct a real review of the trial and the Learned Magistrate’s reasons’ ...
17. In Lukatela v Birch [2008] ACTSC 99, Rares J said (at [18]) with respect to such an appeal:
[I]n Allesch v Maunz (2000) 203 CLR 172 at 180-181 [23] per Gaudron, McHugh, Gummow and Hayne JJ, and 187 [44] per Kirby, the High Court reiterated the critical difference between an appeal by way of rehearing and a hearing de novo. Generally (in the absence of a wider statutory power) in an appeal by way of rehearing, the appellate court can only exercise its powers where, having regard to all the evidence before it, the appellant demonstrates that the order appealed from is the result of some legal, factual or discretionary error. In a hearing de novo, those powers can be exercised regardless of any such error. But, in an appeal by way of rehearing, once error below has been found, the appellate court can substitute its own decision based on the facts and the law as they now stand: Allesch 203 CLR at 180-181 [23], 187 [44].
18. Later, in the same judgment, Rares J went on to say (at [21]–[22]):
And, although the appeal is by way of rehearing, the appellate [sic] does not have a free hand. Only if, after making proper allowance for the advantages of the trial judge, it concludes that an error has been shown, then, the appellate court is authorised and obliged to exercise its appellate duties in accordance with the statute: Fox 214 CLR at 127-128 [27] per Gleeson CJ, Gummow and Kirby JJ.
Ordinarily, if there has been no further evidence admitted and no relevant change in the law, a court entertaining an appeal by way of rehearing can exercise its appellate powers only if satisfied that there was error on part of the court below: Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194 at 203 [14] per Gleeson CJ[2000] HCA 47; , 203 CLR 194 at 203 [14] per Gleeson CJ, Gaudron and Hayne JJ.
By reference to these principles, in this case it is not sufficient for the appellant to persuade the Tribunal that it might have (or would have) decided the matter differently had it been the decision-maker. The appellant must first show error (or a mistake) in the original decision. Only if that occurs may the Tribunal on appeal set aside the original decision. It may then substitute its own decision by reference to the facts and law that applied to the claim before the original tribunal, save for circumstances where leave is granted for further evidence to be received as was given in this case per paragraph 19 above.

In this appeal, the appellant’s primary complaint is that the tribunal made a mistake by not properly considering his claim under the ACL that the Bathroom Master product was not fit for purpose. The ‘substance’ of his claim was that Ms Ryrie requested a product to clean the shower screen; the first respondent recommended its product for that purpose; Ms Ryrie then used it for that purpose; and it discoloured the shower screen frame.
Although the appellant did not state a legal cause of action in his application, in our view the issue of fitness for purpose was squarely raised during the original hearing. At hearing, the presiding member said to the appellant:
Tribunal: Why do you think they should have to pay?
Mr De Flumeri: I think because the product was recommended to us as safe to use on domestic bathrooms which is what my ensuite is and directions were followed on the bottle which still resulted in damage.[6]
[6] Transcript of Proceedings 21 August 2015 page 11, lines 31 – 35
The tribunal later discussed the first respondent’s product with Mr Morton, who appeared for the first respondent, as follows:
Tribunal: No. if I talk to you, then – if - I’ve talked to you about, like, what’s the scope of the duty of care-you’ve explained that to me. The next thing, of course, is, if I look at it in terms of contract – or even as a consumer claim under the National Consumer Law---
Mr Morton: Yes
Tribunal: ---was it – was the product for the purpose for which it was purchased?
Mr Morton: Yes
Tribunal: The Consumer Law says: “The purpose is the disclosed purpose.” Are you saying that, really, you can’t be expected to assume there’s going to be polished anodised aluminium in the particular bathroom, if they say - if the purchaser says, “I’m using it on a bathroom”-that’s the purpose. You can’t be expected to conclude that that is going to have an aluminium surface that’s going to react with your particular product?
Mr Morton: No. I mean, a bathroom surfaces has many surfaces on it. We know that our Bathroom Master can clean those services.[7]
[7] Transcript of Proceedings 21 August 2015 page 28, line 39 - page 29 line 14
The issue of whether the product was fit for purpose arose again in closing submissions. The following exchange occurred between the tribunal and Ms Ryrie and then between the Tribunal and the appellant:
Tribunal: So you don’t think what the word “corrosive” means?
Ms Ryrie: No. Because you just - you put your trust in someone and you say, “Look, I would like a product.” And that’s it.
Tribunal: Yes. Yes, all right. Is there anything else, Mr De Flumeri that you want to say to me before I ask the other gentlemen for anything final they want to say?
Mr De Flumeri: That about it.
Tribunal: Yes.
Mr De Flumeri: Yes. Product not fit for purpose and that’s about it. Now, I have a damaged shower frame that I’m trying to sort out. [8]
[8] Transcript of Proceedings 21 August 2015 page 43, lines 23 - 34
The following exchange then occurred between the tribunal and Mr Morton:
Tribunal: Okay. ACT - sorry, Canberra Discount Chemicals? Is there anything further you want to say - what I will do is stand the matter down and have a bit of a think.
Mr Morton: Okay. Just in the words, “fit for purpose”, the product is fit for purpose. That’s what it’s designed for. It’s what it does. It removes body fat from shower recesses. It removes body fat from tiles. It removes body fat from aluminium frames. That’s what it does. And it cleans out glass really well. It’s a proven track record product. It is fit for purpose. I believe that - believe this is - now, this is a case of, I think, bad luck on the fact that information was not provided. [9]
[9] Transcript of Proceedings 21 August 2015 page 43, line 39 page 44 line 4
Notwithstanding the appellant’s claim that the product was not fit for purpose, and this being a stated basis to recover under the ACL, the tribunal decided the matter only by reference to a claim in negligence.
In our view, where the question of fitness for purpose was squarely raised and argued, the tribunal erred by not considering the appellant’s claim under the ACL. In Dranichnikov v Minister for Immigration and Multicultural Affairs (2003); 77 ALJR 1088 at [24], Gummow and Callinan JJ said:
To fail to respond to a substantial, clearly articulated argument relying upon established facts was at least to fail to accord Mr Dranichnikov natural justice.
This position was confirmed in a unanimous decision of the High Court in Plaintiff M61/2010E v Commonwealth (Offshore Processing Case) (2010) 243 CLR 319 at [90] where, with a reliance on Dranichnikov, the Court said:
Second, failing to address one of the claimed bases for the plaintiff's fear of persecution meant that the Minister was not informed about a matter that bore upon the question that the Minister had asked to be considered: whether Australia owed the plaintiff protection obligations. The failure to deal with the claim was a denial of procedural fairness.
Views have differed as to the legal principles arising from the High Court’s decision in Dranichnikov. In Nufarm Australia Ltd v Dow AgroSciences Australia Ltd (No 2) (2011) 282 ALR 24 at [101] – [103], Robertson J of the Federal Court said:
101.     As to the failure to address the claim founding a question of law within s 44 of the AAT Act, Nufarm relies on Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 197 ALR 389 at [24] and [95] (“Dranichnikov”) and Plaintiff M61/2010E v Commonwealth of Australia [2010] HCA 41; (2010) 272 ALR 14 at [90]. See also Minister for Immigration& Citizenship v SZJSS [2010] HCA 48; (2010) 85 ALJR 306 at [35].
102.     Decisions of this Court are to the same effect but categorise the error as constructive failure to exercise jurisdiction rather than denial of procedural fairness: see Chief Executive Officer of Customs v AMI Toyota Limited [2000] FCA 1343; (2000) 102 FCR 578 at [45]. There, the Full Court said as follows:
Thus, in failing to address a central question raised by the Toyota Australia’s case and by the material before it, the AAT erred in law. It breached its “duty to arrive at the correct or preferable decision in the case before it according to the material before it” (see Bushell v Repatriation Commission [1992] HCA 47; (1992) 175 CLR 408 at 424-425 per Brennan J and Noble v Repatriation Commission (unreported, Full Court, Federal Court, 3 November 1997 at pp 15-16). It also failed to apply itself to, and address, the correct legal question which the law prescribes and thereby constructively failed to exercise its jurisdiction: see Ex parte Hebburn; Re Kearsley Shire Council [1947] NSWStRp 24; (1947) 47 SR (NSW) 416 at 420, Sinclair v Maryborough Mining Warden [1975] HCA 17; (1975) 132 CLR 473 at 483 and Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163 at 179. Thus, the appeal to the primary judge plainly involved a question of law.
103.    Indeed in Industry Research and Development Board v Bridgestone Australia Ltd [2004] FCAFC 56; (2004) 136 FCR 47 per Tamberlin, Sackville and Selway JJ at [26], the Full Court read Dranichnikov as concerned with constructive failure to exercise jurisdiction.
Applying these principles to this case, the relevant ‘established facts’ were as follows:
(a)Ms Ryrie requested a product that was suitable for cleaning her shower, including the screen;
(b)Mr Garry, on behalf of the first respondent, represented to Ms Ryrie that Bathroom Master was a suitable product for that purpose;
(c)Ms Ryrie used the product to clean her shower including the screen; and
(d)the product immediately and irreparably discoloured the screen.
There were also ‘established facts’ that:
(a)Mr Garry tested the Bathroom Master liquid on the appellant’s shower screen frame and it further discoloured the frame; and
(b)Mr Rowe on behalf of the second respondent tested Bathroom Master on several sample strips of different kinds of aluminium used to make shower screens frames that were manufactured by different companies, and the liquid “damaged every single one of them”. [10]
[10] Transcript of Proceedings 21 August 2015 page 33, lines 11 – 32
In these circumstances, it matters not whether the tribunal’s failure to consider the appellant’s claim that the product was not fit for purpose is characterised as a failure to exercise its jurisdiction (namely to consider a claim under the ACL) or as a denial of procedural fairness. Either way, in our view the tribunal should have considered the claim. In this circumstance, to correct that error, this Tribunal should consider that claim and determine it by reference to the evidence before the tribunal and the two additional documents mentioned in paragraph 18 above.
In coming to that view, the Tribunal has considered the question whether the appellant should be held to the determination of his application as a claim in negligence, particularly where we cannot see any legal error in the tribunal’s reasoning regarding negligence. We have concluded that the appellant should not be confined in that way. He did not state his case as a claim in negligence. He made his complaint in lay terms that the product was not fit for purpose. The tribunal then formulated his complaint as a claim in negligence and determined it “in the context of negligence”. In our view, the appellant’s complaint should also have been assessed by reference to ACL, particularly where a claim of “not fit for purpose” was expressly made and denied.
Fitness for purpose
Section 55 of the ACL provides:
55 Guarantee as to fitness for any disclosed purpose etc.
(1) If:
(a) a person (the supplier ) supplies, in trade or commerce, goods to a consumer; and
(b) the supply does not occur by way of sale by auction;
there is a guarantee that the goods are reasonably fit for any disclosed purpose, and for any purpose for which the supplier represents that they are reasonably fit.
(2) A disclosed purpose is a particular purpose (whether or not that purpose is a purpose for which the goods are commonly supplied) for which the goods are being acquired by the consumer and that:
(a) the consumer makes known, expressly or by implication, to:
(i) the supplier; or
(ii) a person by whom any prior negotiations or arrangements in relation to the acquisition of the goods were conducted or made; or
(b) the consumer makes known to the manufacturer of the goods either directly or through the supplier or the person referred to in paragraph (a)(ii).
(3) This section does not apply if the circumstances show that the consumer did not rely on, or that it was unreasonable for the consumer to rely on, the skill or judgment of the supplier, the person referred to in subsection (2)(a)(ii) or the manufacturer, as the case may be.
Applying section 55 to this case, it appears clear that Mr Garry supplied the Bathroom Master product to Ms Nyrie for the “disclosed purpose” of cleaning the appellant’s shower (which can reasonably be presumed to include the screen and its frame) and that Mr Garry represented to Ms Ryrie that the product was fit for that purpose. There is no suggestion that Ms Ryrie did not rely on the first respondent’s representations, and the evidence is to the contrary. In any event, the buyer’s reliance on the first respondent’s representation need not be absolute or exclusive reliance. It is necessary only that the buyer’s reliance was a substantial and effective inducement which led the buyer to purchase (and use) the product: Dependable Motors Pty Ltd v Ashford Shire Council (159) 101 CLR 265 at 289. That was an accepted fact in the proceeding before the tribunal.
In our view, the first respondent breached the statutory guarantee under section 55 that Bathroom Master was fit for the purpose Ms Ryrie disclosed to it, namely cleaning the appellant’s shower screen including its frame: it was not fit for that purpose because it permanently discoloured the frame.
The Tribunal has considered the first respondent’s Materials Safety Data Sheet and AS 1231-2000, annexure C, both of which were admitted without objection as further evidence.
The Data Sheet records “incompatibilities” for Bathroom Master as “assets, zinc, tin, aluminium and their alloys, other materials reactive with strongly alkaline liquids.” It also records the ADG Classification (meaning the Australian Code for the Transport of Dangerous Goods by Road and Rail) for the product as “Class 8: Corrosive Substances.” During the hearing, the first respondent agreed it was familiar with the ADG Code and that under that Code Class 8: Corrosive Substances are classified as “corrosive to metals”.
AS1231-2000, Appendix C, deals with “maintenance of anodised aluminium”. It states that “acid or alkaline cleaners is (sic) is not recommended as they damage the anodic oxidisation coating.”
These factors evidence that the first respondent should reasonably have understood that Bathroom Master was not suitable for cleaning aluminium shower screens. However, it is not necessary to make such a finding. For the purposes of section 55 of the ACL, it is enough that the first respondent represented to Ms Ryrie that the product was fit for that purpose. It is not necessary to establish that Mr Garry knew or should have known otherwise.
Remedy
In most situations the statutory guarantees under the ACL concern a fault or failing of the product itself and oblige the supplier and/or manufacturer to make good the fault. That would require rectification or replacement of the product depending on the facts. In this case, there is no suggestion that Bathroom Master is anything other than a good cleaning product. The problem is its lack of suitability for cleaning some surfaces, in particular aluminium shower screens or at least anodised aluminium shower screens. It is not a matter of rectifying the product that was purchased, but rather the product that was damaged.
In such cases, a remedy does not lie against the manufacturer of the product under the ACL and would not lie against the first respondent in that capacity. However a remedy does lie against the supplier, and lies against the first respondent in that capacity. Section 259 of the ACL provides for remedies against the supplier of goods.
Sections 259(1) and (2) provide for remedies where the product itself has failed to comply with a statutory guarantee. Neither subsection is therefore applicable in this case.
However subsection 259(4) of the ACL concerns damage suffered by the consumer because of the failure, and is applicable in this case. The relevant subsections of section 259 state:
259 Action against suppliers of goods
(1) A consumer may take action under this section if:
(a) a person (the supplier ) supplies, in trade or commerce, goods to the consumer; and
(b) a guarantee that applies to the supply under Subdivision A of Division1 of Part3-2 (other than sections 58 and 59(1)) is not complied with.
(2) ...
(3) ...
(4) The consumer may, by action against the supplier, recover damages for any loss or damage suffered by the consumer because of the failure to comply with the guarantee if it was reasonably foreseeable that the consumer would suffer such loss or damage as a result of such a failure.
(5) Subsection (4) does not apply if the failure to comply with the guarantee occurred only because of a cause independent of human control that occurred after the goods left the control of the supplier.
(6) To avoid doubt, subsection (4) applies in addition to subsections(2) and (3).
(7) ...
The ambit and purpose of subsection 259(4) is made clear by the example given in the Australian Competition and Consumer Commission publication, Consumer Guarantees - A Guide for Businesses and Legal Practitioners, 2010, page 29, which states:
A consumer used a liquid cleaner according to instructions on the pack to remove a stain on his new curtains. The product badly damaged a curtain in the living room. As the curtain was new, the supply would probably have to meet the cost of replacement. Compensation would be less for curtains in poorer condition.
In this case, the representation about use of the Bathroom Master product was given by the first respondent personally, rather than an instruction on the bottle, but in our view that difference is immaterial: the appellant used the product in accordance with a representation that it was suitable for the disclosed purpose and it discoloured the screen.
It was also reasonably foreseeable that the appellant would suffer damage because Ms Ryrie used the product as directed and it was not suitable to be used as directed.
In circumstances where the shower screen was in materially the same condition as when it was installed, and where it is cheaper to replace the whole shower screen rather than only its discoloured frames, in our view the appellant should meet the cost of a replacement shower screen.
We have considered the appellant’s claim in contract that Mr Garry’s misrepresented that the product was fit for purpose. The Tribunal accepts that the representation, whilst misrepresenting the suitability of the product, was an innocent misrepresentation. He did not know about the lack of suitability, even if (perhaps) he should have. It follows that an award of damages is not available at common law. However, a remedy in damages for an innocent misrepresentation is available under Chapter 13 of the Civil Law (Wrongs) Act 2002 (ACT), section 174. Notwithstanding, we have not examined further the first respondent’s liability under section 174 because a complete remedy is available under the ACL.
We have also considered the liability of the second respondent. In the Tribunal’s view, the second respondent is not liable.
There is no suggestion that the shower screen was not fit for purpose. The first respondent contended that the frame was nevertheless not of an “acceptable quality” because of its inability to withstand discolouration when the Bathroom Master product was applied. The first respondent contended that it must have been made of substandard aluminium. We are not persuaded that that is so. The second respondent gave evidence that it used aluminium frames of many kinds when constructing shower screens and that it bought the frames from two different manufacturers. The second respondent gave evidence that it tested Bathroom Master on sample aluminium strips of all its different framing products, and that the product discoloured every single one of them. It is illogical for the first respondent to contend that all aluminium shower frames must be substandard because they cannot withstand the Bathroom Master product.
Also, the second respondent made no representation one way or another about products that may or may not be used for cleaning its shower screens. In our view, responsibilities concerning the suitability of cleaning products lie with the supplier of the cleaning product not the supplier of an item in need of cleaning.
Where the appellant has been successful on appeal, the Tribunal has determined that it should exercise its power under section 48(2) of the ACAT Act to order the first respondent to pay the appellant’s filing fees in the original proceeding and on appeal and its ASIC search fee.
The appellant asks that the first and/or second respondent also be ordered to pay his cost of obtaining the transcript of the proceeding before the tribunal. Whilst we understand that obtaining the transcript was a necessary part of presenting his case, as reflected in our quoting from it in this decision, in our view the Tribunal does not have power to order the first respondent to pay that cost.
The Tribunal’s powers in relation to costs are set out in section 48 of the ACAT Act. Section 48(1) requires the parties to an application (including an appeal) to “bear their own costs”, save for the circumstances described in sections 48(2)(a) - (d). Section 48(2)(a) permits the Tribunal to order another party to pay the applicant the filing fee and “any other fee” incurred by the appellant that the Tribunal considers necessary for the application. We have exercise that power in relation to all the appellant’s fees, but in our view, the cost of obtaining transcript is not a fee. Section 48(2)(b) – (d) describe circumstances where the Tribunal has a wide account to order costs but none of those circumstances are applicable in this case.

Orders

For these reasons, the Tribunal has set aside the decision of the original tribunal dated 21 October 2015 and ordered that within 28 days the first respondent pay the appellant $1,991 comprised of the following amounts:
(a)$1,386 for the cost of the replacement shower screen.
(b)$68 for the original application filing fee.
(c)$499 for the appeal application filing fee.
(d)$38 for the ASIC search fee.
………………………………..
President G C McCarthy
for and on behalf of the Tribunal
HEARING DETAILS

FILE NUMBER:	AA 44/2015
PARTIES, APPLICANT:	Paul de Flumeri
PARTIES, FIRST RESPONDENT: PARTIES, SECOND RESPONDENT	Canberra Discount Chemicals Pty Ltd Kolder Pty Ltd
COUNSEL APPEARING, APPLICANT	N/A
COUNSEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	N/A
SOLICITORS FOR RESPONDENT	N/A
TRIBUNAL MEMBERS:	General President L Crebbin President G C McCarthy
DATES OF HEARING:	11 April 2016