Hagger v Apollo Window Blinds Pty Ltd Trading as Apollo Blinds Act
[2015] ACAT 49
•6 August 2015
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
HAGGER & ANOR v APOLLO WINDOW BLINDS PTY LTD TRADING AS APOLLO BLINDS ACT
(Civil Dispute) [2015] ACAT 49
XD 14/1570
Catchwords: CIVIL DISPUTE – defect blinds – statutory consumer warranties – fit for purpose and of merchantable quality
Legislation cited: Limitations Act 1985 (ACT) s 11
Sale of Goods Act 1954 (ACT) s 19
Trade Practices Act 1974 (Cth) ss 66(2), 68A, 68, 70, 71, 72, 74B, 74D, 74K, 74J
Tribunal: Mr A. Anforth – Senior Member
Date of Orders: 6 August 2015
Date of Reasons for Decision: 6 August 2015
ACT CIVIL & ADMINISTRATIVE TRIBUNAL XD 14/1570
BETWEEN:
JACKI HAGGER and GLENN McDONALD
Applicants
AND:
APOLLO WINDOW BLINDS PTY TRADING AS
APOLLO BLINDS ACT
Respondent
TRIBUNAL: Mr A. Anforth – Senior Member
DATE: 6 August 2015
ORDER
The Tribunal orders that:
The Respondent is to refund to the Applicant the purchase price of the blinds together with the cost of the company search and lodgement fee in the total sum of $6336 within 28 days of the date of this order.
The property in the blinds reverts to the Respondents upon payment of the above sum, to be collected by the Respondent at its cost.
The Respondent is to pay the costs of the expert’s report.
………………………………..
Mr A. Anforth
Senior Member
REASONS FOR DECISION
The Applicants purchased jarrah timber blinds for their house from the Respondents which were installed on 30 November 2007. Within 6 weeks some of the slats in the blinds bowed, faded or peeled and were replaced by the Respondent. The problem continued with further replacements until August 2010 at which time the Applicants sought to rescind the purchase and obtain a repayment of their purchase price.
The Respondent refused the request for a refund and in its reply of 7 September 2010 sought to rely on its contractual warranty of 2 years for defects of the present kind and the exclusion for warping of timber slats.
Further negotiations ensued including through the agency of Fair Trading ACT between July 2010 and June 2014. No solution was mediated by Fair Trading and on 25 November 2014 the Applicants lodged the present application with the Tribunal for a refund of $6336 being the cost of the blinds of $6192, $9 for a company search and a $135 lodgement fee.
On 22 December 2014 the Respondent filed its Response to the claim. Apart from reliance on the terms of the contractual guarantee, the Respondent asserted that they were not the proper Respondent. It was said that Nestem Pty Ltd (ABN 62 117 411 579) were the agents of the Respondents who were trading as Apollo Blinds in the ACT and dealt with the Applicants. Nestem is no longer trading. A company search showed that Nestem Pty Ltd was deregistered on 2 December 2014.
The contractual guarantee was set out on the reverse side of the Quote form. The Quote itself bears no signature of the Applicants.
The guarantee relevantly provided:
2. Two (2) years guarantee on all other Window Furnishings from the date of installation except for fading on all windows Furnishing Materials, which is 12 months from the date of installation.
…The Terms and Conditions relevantly provided:
7. The customer acknowledges that all …timber products are subject to movement which exhibits itself in the form of bowing, twisting and general movement as environmental changes take place…..
The matter was the subject of directions on 10 February 2015 for the filing of evidence.
On 2 March 2015 the Applicants filed and served their evidence and submissions which included a Chronology and a copy of all correspondence between the parties and with Fair Trading.
On 16 March 2015 the Respondent filed and served its evidence and submissions.
On 7 April 2015 the matter was listed for hearing. The Applicants appeared in person and Mr Cardy and Mr Schofield appeared for the Respondent. The Respondent advised that Nestem Pty Ltd had been their agent in the ACT as opposed to any franchise agreement. The Tribunal explained that the Respondent stood potentially liable both as the principal to the agency and as the manufacturer. The matter was to proceed on that basis.
The Respondent conceded that it were the manufacturer of the product sold to the Applicants.
At the hearing the Applicants explained that that jarrah timber was selected to match their jarrah timber floors. They described how the Respondent had replaced some blinds with non-matching (non- jarrah) blinds.
The Applicants denied that the terms of the statutory guarantee and exclusion for warping had ever been brought to their attention. There was no evidence from the Respondent to the contrary.
The Respondent relied upon the exclusion for warping of timber blinds and said that the same point had been made on their web site at the time. The Applicants accessed the website during the hearing and pointed out that it said that the timber slats were ‘warp free’. The Respondent said that this depended on the location of the blinds, a point that was not made clear on the website.
The Respondent said that jarrah blinds were no longer available.
There was discussion concerning possible settlement but after a short adjournment the Respondent advised that no offers would be made.
There was discussion about any discount for the degree of use the Applicants had the benefit of over the years. The Applicants strongly resisted this suggestion on the basis that the use they had at all times was poor and a source of anxiety for them. The prolonged period of use from 2007 to the present was because the Respondent refused to honour its obligations. Therefore to allow the Respondent a discount would be to reward it for its own wrong doing.
The Applicants produced a series of photographs of the blinds which showed some of the slats to be warped. The appearance was not attractive.
The Respondent indicated its wish to adduce expert evidence to the effect that warping and peeling of this kind was normal with this product. It was agreed to obtain a report from the Blinds Manufacturing Association of Australia (BMA) and that the unsuccessful party would bear the costs thereof.
Orders were made for the obtaining and filing of the expert report dealing with the quality of the blinds, the nature of the defects, the cause of the defects, whether it was to be expected in that price range and the normal life expectancy of such blinds. The parties were invited to make any submission on that report when it was to hand or to obtain their own report if that was their wish. In the latter event, the parties were to inform the Tribunal of that intention.
The parties were given the choice of returning to the Tribunal for a final oral hearing or for the matter to be dealt with on the papers, once the expert report(s) was to hand and the parties had made their comments thereon. The parties agreed on the latter course of action.
On 21 April 2015 the Respondent advised the Tribunal that the Blinds Manufacturing Association was taking time to find a relevant expert and that a cost of $350 would be charged. The Respondent sought an extension to 5 May 2015 to file the expert report. The Tribunal granted this extension.
Apparently the expert report was sent to the Tribunal on 19 May 2015 but went undetected by the Registry. The report was in the text of a short email from Mr Watson, director of BMA rather than in a stand alone report. The report read:
As discussed this morning I have inspected some Timber Venetian Blinds for Glenn McDonald at 42 Barr Smith Ave Bonython ACT.
My findings are as follows.
The quality of the blinds are poor.
There are a number of blinds where the Lacquer is peeling off of the slats, this appears to be due to sun damage.
There are also a number of slats that have bowed slightly.
There are two blinds with missing slats in the bottom of the blinds and bottom rail buttons are missing as well, these blinds do not appear to have been completed by the supplier.
there is an inconsistency in the style of blind in the house as there is 5 blinds in a Jarrah finish and 5 blinds in a Cedar finish.The report from BMA did not address the life expectancy of the blinds as requested.
A copy of the report was provided to both parties in May 2015. Neither party has provided any comment to the Tribunal or requested the right to obtain their own further report. Neither party has asked that the matter be relisted for further oral hearing. The Applicants have made enquiries about the delay since May 2015 on the present decision which indicates no intention of providing further evidence or submissions.
Statutory framework
At the time of the purchase in 2007 and at the time of purported rescission of the contract by the Applicants in 2010 the Trade Practices Act 1974 (Cth) (TPA), the Fair Trading Act 1992 (ACT) (FTA) and the Sale of Goods Act 1954 (ACT)(SGA) were in force. The Australian Consumer Law had not come into force.
There are a number of provisions of the TPA and corresponding provisions of the FTA and SGA that may have application in the present case.
Division 2 of Part V of the TPA deals with conditions and warranties in consumer transactions. Sections 68 and 68A preclude any attempt to contract out or around the statutory warranties of the Division.
Section 70 deals with the situation where goods are purchased and supplied by reference to a description of the goods given by the supplier. In this case there is an implied guarantee that the goods conform to the description.
Section 72 deals with the situation where the goods are purchased and supplied by reference to a sample provided by the supplier. In this case there is an implied guarantee that the goods confirm to the sample.
Although there may be scope of the application of sections 70 and 72 in the present case in so far as the purchase was made by reference to the samples and descriptions, the more obviously relevant provision is section 71 which implies a guarantee that the goods are of merchantable quality and fit for their disclosed and intended purpose. The guarantee applies whether the supplier deals directly with the consumer or through an agent (section 71(3)). Section 19 of the SGA contains the same statutory guarantees.
Section 66(2) of the TPA provides further definition of what it means to be of ‘merchantable quality’, namely that the goods are fit for the purpose for which they are commonly purchased having regard to the description of the goods, the price and other relevant considerations.
The statutory guarantees in Division 2 of the TPA and section 19 of the SGA have no fixed time limits other than that which applies in any civil action in the ACT by reason of section 11 of the Limitations Act 1985, namely 6 years from the time the Applicants become aware of their cause of action.
Sections 68 and 68A of the TPA prohibit the contracting out of these statutory guarantees and so the two year contractual warranty provided by the Respondent is of no force or effect as a bar to the Applicants claim under Division 2 of the TPA.
Division 2A of the TPA deals with the liability of manufacturers of goods that are sold by an agent or intermediatory supplier and imposes liability on the manufacturer for defective goods. Goods in this sense are defective if they are not fit for their usual purpose (section 74B) or are not of merchantable quality (section 74D). The application of Division 2A overlaps with Division 2 in the present case.
Section 74K precludes contracting out of the statutory guarantees of Division 2A.
Section 74J contains a time limit on the commencement of actions under Division 2A. It is limited to 3 years from the time the consumer becomes aware that the goods were not of merchantable quality or not fit for purpose.
Consideration of the issues
The photographs and the expert report leave the Tribunal in no doubt that the goods were defective in the sense of not being fit for their known purposes and were not of merchantable quality.
The Tribunal is also not convinced that the terms of the Respondent’s contractual warranty or exclusions were ever brought to the attention of the Applicants and therefore could not form a term of their contract.
There is an issue about when the Applicant first became aware of the defects. Up to August 2010 the Respondent had taken some steps to rectify the problems. It was not until this time that the Applicant abandoned hope that the problem would be remedied by the Respondent. For present purpose the Tribunal adopts this date as the date on which the Applicant was aware that a cause of action had accrued.
The Applicants did not commence their action in the Tribunal until more than 3 years after the cause of action had accrued. It may be therefore be the case that the rights under Division 2A of the TPA are not open to the Applicants. It is not necessary to explore whether there is any provision to extend this time limit or not, because the same time limitations do not affect the cause of action under Division 2 of the TPA and section 19 of the SGA.
The Tribunal finds as a fact that the blinds were defective (not fit for purpose or of merchantable quality) despite the efforts of the Respondent to make good the defect. The blinds were not priced at the lower end of the market and the Respondent has had more than a reasonable chance to effect repair or exchange and has not done so.
There is an issue concerning any discount that the Respondent should have for the use of the defective blinds. The Tribunal was initially minded to allow some discount, but is persuaded by the Applicants that such use as they have had has been forced on them by the Respondent’s failure of duty and the use has been anxiety producing for them.
The Respondent is to refund the purchase price together with the cost of the company search and lodgement fee in the sum of $6336 within 28 days of the date of this order.
………………………………..
Ms L. Crebbin, General President
for and on behalf of
Mr A. Anforth – Senior Member
HEARING DETAILS
FILE NUMBER: | XD 14/1570 |
PARTIES, APPLICANTS: | Jacki Hagger and Glenn McDonald |
PARTIES, RESPONDENT: | Apollo Window Blinds Pty Ltd T/as Apollo Blinds ACT |
SOLICITORS FOR APPLICANT | |
SOLICITORS FOR RESPONDENT | |
TRIBUNAL MEMBERS: | Mr A. Anforth – Senior Member |
DATES OF HEARING: | 7 April 2015 |
0
0
0