Lam v Rallis Timber Pty Ltd

[2021] NSWCATCD 138

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Lam v Rallis Timber Pty Ltd [2021] NSWCATCD 138

Hearing dates:

30 September 2021

Date of orders:

11 October 2021

Decision date:

06 October 2021

Jurisdiction:

Consumer and Commercial Division

Before:

G Blake AM SC,Senior Member

Decision:

(1) The respondent is to pay the sum of $580.00 to the applicant immediately;

(2) The proceedings are otherwise dismissed.

Catchwords:

CONSUMER CLAIM – Whether the supplier of goods failed to comply with the guarantee as to acceptable quality – Onus of proof not discharged – Proceedings dismissed

Legislation Cited:

Australian Consumer Law (NSW)

Competition and Consumer Act 2010 (Cth)

Fair Trading Act 1987 (NSW)

Cases Cited:

None cited

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Debbie Lam (Applicant)
Rallis Timber Pty Ltd (Respondent)

Representation:

Applicant (Self-represented)
B Andrianakos (Director) (Respondent)

File Number(s):

GEN 21/24706

Publication restriction:

Nil

REASONS FOR DECISION

Overview

1. In these proceedings the applicant, Debbie Lam, seeks against the respondent, Rallis Timber Pty Ltd, relief under the Fair Trading Act 1989 (NSW) (FT Act) for failure to comply with the Australian Consumer Law (NSW) (ACL (NSW)) arising out of the purchase of timber for the replacement of the kitchen floor of her home.

2. I have decided that the respondent should pay the sum of $580.00 to the applicant, and the proceedings should otherwise be dismissed.

The background

3. On or shortly before 18 January 2021, the applicant and Andreas Sdrolias (Mr Sdrolias) entered into an agreement for Mr Sdrolias to renovate of the kitchen and replace the kitchen floor of her home at Hurstville at a daily rate (the building agreement).

4. On 18 January 2021, Mr Sdrolias obtained a quote from the respondent for the supply of timber and hardware.

5. On 19 January 2021, Mr Sdrolias accepted the quote for $1,628.65, the respondent prepared its tax invoice no 534560 (the 19 January 2021 tax invoice), the applicant paid the respondent by credit card, and the respondent delivered timber and hardware to the applicant’s home including the following quantity of cypress pine: 14 lengths at 1.5 metres, 3 lengths at 3.0 metres, 160 lineal metres of mixed lengths.

6. On 21 January 2021, Mr Sdrolias ordered additional timber from the respondent costing $583.50, the respondent prepared its tax invoice no 534590 (the 21 January 2021 tax invoice), the applicant paid the respondent by credit card, and the respondent delivered timber to the applicant’s home including the following quantity of cypress pine: 50 lineal metres of mixed lengths.

7. On 22 January 2021, Mr Sdrolias completed replace the kitchen floor of the applicant’s home at a cost of $1.000.00.

8. On 25 January 2021, the applicant took inside unused pieces of timber that had been outside since its delivery.

9. From 25 January 2021, the applicant complained to the respondent about the quality of the cypress pine supplied.

10. On 3 February 2021, the respondent collected from the applicant’s home the following quantity of timber which the applicant had not used: 92.4 lineal metres of cypress pine flooring totalling $462.46, 17.4 lineal metres of 100x50 hardwood totalling $163.65, and 5.4 metres of 66f x 18f finger jointed white primed pine dar totalling $17.46.

The history of the proceedings

11. On 7 June 2021, the applicant commenced proceedings GEN 21/24706 against the respondent by filing an application in which she seeks an order for the payment of $3,215.00, being the total the 19 and 21 January 2021 tax invoices, the amount paid under the building agreement, and $2.85;

12. On 23 June 2021, the applicant provided a bundle of documents to the Tribunal (the applicant’s first bundle of documents).

13. On 28 June 2021, the Tribunal made procedural directions including that the applicant provide any additional documents and respondent provide any documents in response by 12 July 2021 and 26 July 2021 respectively.

14. On 14 July 2021, the applicant provided a bundle of documents to the Tribunal (the applicant’s second bundle of documents).

15. On 26 July 2021, the respondent provided a bundle of documents to the Tribunal (the respondent’s bundle of documents).

The hearing

16. On 30 September 2021 at 1.15pm, the hearing took place by telephone. The applicant appeared for herself and Mr B Andrianakos (Mr Andrianakos), who is a director, appeared for the respondent.

17. The applicant relied on the following documents which were admitted into evidence without objection:

1. the applicant’s first bundle of documents (Ex A1);

2. the applicant’s second bundle of documents (Ex A2).

18. The respondent relied on the respondent’s bundle of documents which was admitted into evidence without objection (Ex R1).

19. There was no oral evidence on behalf of the applicant. Mr Andrianakos gave oral evidence on behalf of the respondent.

20. Each of the applicant and the respondent made oral submissions.

21. During the hearing the issues between the parties narrowed. The respondent conceded that it had entered into a contract with the applicant for the supply of timber and hardware as described in 19 and 21 January 2021 tax invoices. The respondent also conceded that if the applicant was unsuccessful in the proceedings it would consent to an order that it pay the sum of $580.00, being the value of the returned timber less a collection charge, to the applicant.

22. At the conclusion of the hearing I reserved my decision.

The issues

23. The following issues arise for decision:

1. whether the Tribunal has jurisdiction to determine the proceedings;

2. whether the cypress pine timber which was supplied by the respondent failed to comply with the guarantee as to acceptable quality under the ACL (NSW);

3. what is the appropriate remedy for any failure by the respondent to comply with the guarantee as to acceptable quality under the ACL (NSW).

24. Before considering these issues it is appropriate to set out the applicable statutory provisions, and the evidence and submissions of the parties.

The applicable statutory provisions

25. Part 3 Division 2 (ss 27-32) of the Fair Trading Act 1987 (NSW) (FT Act) provides for the application of the Australian Consumer Law (relevantly comprising Schedule 2 to the Competition and Consumer Act 2010 (Cth)) as in force from time to time as a law of New South Wales, its reference as the ACL (NSW), and its inclusion as part of the FT Act.

26. Section 54 of the ACL (NSW), which is within Subdivision A of Division 1 of Part 3-2, relevantly provides:

54 Guarantee as to acceptable quality

(1) If:

(a) a person 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 of acceptable quality.

(2) Goods are of acceptable quality if they are as:

(a) fit for all the purposes for which goods of that kind are commonly supplied; and

(b) acceptable in appearance and finish; and

(c) free from defects; and

(d) safe; and

(e) durable;

as a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods), would regard as acceptable having regard to the matters in subsection (3).

(3) The matters for the purposes of subsection (2) are:

(a) the nature of the goods; and

(b) the price of the goods (if relevant); and

27. Section 259 of the ACL (NSW) relevantly provides:

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 Division 1 of Part 3-2 (other than sections 58 and 59(1)) is not complied with.

(2) If the failure to comply with the guarantee can be remedied and is not a major failure:

(a) the consumer may require the supplier to remedy the failure within a reasonable time; or

…

(3) If the failure to comply with the guarantee cannot be remedied or is a major failure, the consumer may:

(a) subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection; or

(b) by action against the supplier, recover compensation for any reduction in the value of the goods below the price paid or payable by the consumer for the goods.

28. Section 261 of the ACL (NSW) relevantly provides:

261 How suppliers may remedy a failure to comply with a guarantee

If, under section 259(2)(a), a consumer requires a supplier of goods to remedy a failure to comply with a guarantee referred to in section 259(1)(b), the supplier may comply with the requirement:

…

(b) if the failure does not relate to title—by repairing the goods; or

(c) by replacing the goods with goods of an identical type; or

(d) by refunding:

(i) any money paid by the consumer for the goods; and

…

29. Part 6A Division 1 (ss 79B-79H) of the FT Act provides for preliminary matters with respect to the jurisdiction of the Tribunal in relation to consumer claims, and relevantly:

1. in s 79D, includes the following definitions of “consumer” and “supplier” for Part 6A:

consumer means any of the following persons or bodies to whom or to which a supplier has supplied … services (whether or not under a contract), … —

(a) a natural person,

…

supplier means a person who, in the course of carrying on (or purporting to carry on) a business, supplies goods or services.

2. in s 79E, includes the following definition of “consumer claim”:

79E Meaning of “consumer claim” (cf CC Act 1998, s 3A)

(1) For the purposes of this Part, a consumer claim means a claim by a consumer, for one or more of the following remedies, that arises from a supply of … services by a supplier to the consumer (whether or not under a contract) … —

(a) the payment of a specified sum of money,

(b) the supply of specified services,

…

(d) the delivery, return or replacement of specified goods or goods of a specified description.

30. Part 6A Division 2 (ss 79I-79M) of the FT Act contains provisions dealing with applications to and the jurisdiction of the Tribunal, and relevantly provides:

1. in s 79I, that any consumer may apply to the Tribunal for determination of a consumer claim;

2. in s 79J, that the Tribunal has jurisdiction, except as otherwise provided by Division 2, to hear and determine a consumer claim the subject of an application under Division 2;

3. in s 79K(1)(a), that the Tribunal has jurisdiction to hear and determine a consumer claim only if the goods or services to which the claim relates were supplied in New South Wales;

4. in s 79L(1)(a), that the Tribunal does not have jurisdiction to hear and determine a consumer claim if the cause of action giving rise to the claim first accrued more than 3 years before the date on which the claim is lodged.

31. Part 6A Division 3 (ss 79N-79V) of the FT Act contains provisions dealing with orders of the Tribunal, and relevantly provides:

1. in s 79N(1), that in determining a consumer claim wholly or partly in favour of a claimant, the Tribunal may, subject to Division 3, make any one or more of the following orders that it considers appropriate:

(a) an order that requires a respondent to pay to the claimant a specified amount of money,

(b) an order that requires a respondent to perform specified work in order to rectify a defect in goods or services to which the claim relates,

…

(g) an order that requires a respondent to replace goods to which the claim relates,

(h) an order that requires a respondent to refund all or part of the purchase price of specified goods that are in the possession (or under the control) of the claimant and the claimant to return all or part of those goods to the respondent (whether the property in the goods has passed or not).

2. in s 79S(1) when read with ss 79S(2)(a) and 79S(7), that the Tribunal has no jurisdiction to make, in respect of a particular consumer claim, an order in favour of the claimant if the amount to be paid under or because of the order would exceed $40,000.

The evidence of the parties

The evidence of the applicant

32. The applicant’s first bundle of documents includes 58 photographs of pieces of cypress timber with handwritten captions.

33. The applicant’s second bundle of documents includes the following documents:

1. 11 photographs of pieces of cypress timber;

2. a witness statement of Ross Harmer dated 6 July 2021 in which he states that the kitchen floor was not levelled and was not correctly positioned (the Harmer statement).

The evidence of the respondent

34. The respondent’s bundle of documents includes the following documents:

1. the following comments in relation to the 58 photographs of pieces of cypress timber with handwritten captions:

“The applicant has provided photos of 20 of the pieces of the 33 pieces of Cypress Flooring returned (note the photos are in black and white only and enlarged)

Photos have comments handwritten on them using words - cut, used, short, cracked, 2^nd hand, holes, knots and damaged

Firstly, the same pieces of Cypress Flooring appear in several photos eg #16 has 8 photos of the same issues (see page 33-40)

… We purchase all our timber from reputable Australian Wholesalers. We do not sell "used or secondhand timber" unless requested for a specific project where we would source recycled timber. …

The timber that the applicant is making the claim for is Cypress Flooring.

Cypress is a highly durable Australian softwood. It is a character rich timber with dark knots common and the colour is yellow-brownish. There is a high degree of colour variability and chosen for its rustic characteristics.”

2. the following comments in relation to the 11 photographs of pieces of cypress timber:

“The photos show

- timber cut by the carpenter

- ·offcuts

- timber with cracks (NO TE:- there is always an allowance of at least 10% for imperfect timber which is selected by builder)

Pages 2 and 3 appear to be on the job carpenters cuts

Pages 4 and 5 carpenters offcuts

Page 6 shows a natural split along the grain of the timber

Page 7 shows colour variation

Page 8 shows an end that we cannot be sure of - could have been damaged in handling

Page 9 split piece could be natural, could be damaged on site, could be due to moisture as timber was left in the garden

Page 10 shows photo of knows that are natural, a characteristic of this floor and acceptable

Page 11 crack as per comments above

Page 12 looks like a colour variation (same piece of timber as on Page 6)”

3. the document entitled “Industry Standard Australian Cypress Flooring Product Specification and Grading Rules” (the Industry Standard) which relevantly provides:

“PREFACE

This document was prepared by the NSW Cypress industry, State Forests of NSW and the NSW Forest Products Association to serve as an alternative grading reference to Australian Standard AS 1810-1995. It has been written as a complete stand-alone guide for the production and grading of Australian Cypress (Callitris glaucophyla) flooring.

This document is the result of a consensus among industry representatives, who are participants in Australian Cypress Strategic Plan for the NSW Industry, to publish it as an agreed Industry Standard.

The objective of this document is to provide both suppliers and purchasers of Australian Cypress flooring with consistent product requirements and grading rules and also to serve as a reference standard for flooring products within the scope of the Australian Cypress Product Certification Scheme.

…

SECTION 4 GRADE DESCRIPTION

4.1 GENERAL

Each piece of Australian Cypress flooring product shall be graded on the face, back, edges and ends as appropriate. The top face of single sided profiles shall be graded as the only exposed surface. For reversible flooring profiles, both faces shall be graded as exposed surfaces unless the back is clearly identified on the product. …

…

4.4 LIMITS FOR CHARACTERISTICS

4.4.1 Non-permitted characteristics

4.4.1.1 On any surface

Each piece shall be free of the following characteristics on any surface:

(a) End splits.

(b) Splits.

(c) Cross shakes and fractures.

4.4.1.2 On exposed surfaces

Each piece shall be free of the following characteristics on any exposed surface:

(a) Decay, primary rot.

4.4.2 Permissible characteristics

4.4.2.1 On exposed surfaces

The following characteristics are permitted on any exposed surface, subject to the limitations herein:

(a) Sound knots and tight knots and occluded branch stubs; individual or aggregate width at any cross section-not exceeding one half of the cover width.

(b) Encased knots; individual or aggregate width at any cross section-

(i) if not dislodged-not exceeding 25 mm; and

(ii) if dislodged-not exceeding 15 mm.

(c) Knot holes, rotten knots and knot breakout-

(i) if through from face to opposite face;

A. width-not exceeding 10 mm; and

B. length-not exceeding 10 mm; and

(ii) if not through from face to opposite face;

A. width-not exceeding one fifth of the cover width; and

B. length-not exceeding one quarter of the cover width.

(d) Borer holes (including jewel beetle and pine ant) and pith holes-

(i) up to and including 3 mm width-not exceeding 20 holes in any one metre of board length; and

(ii) exceeding 3 mm width but not exceeding 8 mm width-not exceeding 5 holes in any one metre of board length; and

(iii) exceeding 8 mm width-not permitted; and

(iv) exceeding 100 mm individual length or 200 mm aggregate length in any one metre of board length-not permitted.

(e) Wind shake or heart shake; not extending from one surface to another surface-

(i) width- not exceeding 0.5 mm; and

(ii) individual length-not exceeding 150 mm.

(f) Surface checks (sap cracks & sun checks); not extending from one surface to another surface-

(i) width-not exceeding 0.5 mm; and

(ii) individual length-not exceeding one half of the length of the piece.

(g) Resin pockets, bark pockets and overgrowth of injury-

(i) if sound and tight-no limitation; and

(ii) if not sound and tight (open)-

A. width- not exceeding 15 mm; and

B. individual length-not exceeding 150 mm; and

C. if through from face to opposite face-not permitted.

(h) Knot checks-

(i) width- not exceeding 5 mm; and

(ii) length-not exceeding one half of the cover width

(i) Want, wane and mechanical damage-

(i) for parquet products-not permitted

(ii) for tongued and grooved flooring products-

A. width-not exceeding 2 mm; and

B. depth-not exceeding one third of the thickness of the piece; and

C. individual or aggregate length-not exceeding 50 mm.”

35. In cross-examination, Mr Andrianakos gave the following evidence:

1. It is normal practice for builders to order 5% to 10% more cypress pine flooring than required so as to be able to “do cut outs”;

2. the applicant did not return any 5 metres lengths of split timber.

The submissions of the parties

The submissions of the applicant

36. The applicant made the following submissions:

1. the cypress pine timber has “quality issues”;

2. she does not feel safe to walk on the kitchen floor;

3. the cypress pine kitchen floor has to be removed and replaced.

The submissions of the respondent

37. The respondent made the following submissions:

1. If the cypress pine kitchen floor is dangerous, then it is not responsible for its installation;

2. cypress pine is the cheapest solid timber flooring and has features such as knots that give it a “rustic” appearance;

3. Mr Sdrolias did not complain about the quality of the cypress pine timber;

4. knots and cracks are a standard feature of cypress pine timber.

Whether the Tribunal has jurisdiction to determine the proceedings

38. I am satisfied that the Tribunal has jurisdiction under s 79J of the FT Act to determine the proceedings because the applicant is making a consumer claim within the meaning of s 79E of the FT Act.

Whether the cypress pine timber which was supplied by the respondent failed to comply with the guarantee as to acceptable quality under the ACL (NSW)

39. The critical question is whether the cypress pine timber supplied by the respondent was of unacceptable quality.

40. I am not satisfied that the applicant has established that the cypress pine timber supplied by the respondent and used by the applicant for the kitchen floor was of unacceptable quality the following reasons:

1. the applicant provided no evidence that any of the timber supplied was second hand;

2. the applicant provided no evidence that any of the timber contained qualities that do not normally exist in cypress pine;

3. the applicant provided no evidence that the timber failed to comply the Industry Standard by reason of having by reason of having non-permitted characteristics and/or in excess of the limitations for permissible characteristics;

4. many of the photographs of the applicant received into evidence depict timber that was returned to the respondent;

5. the applicant provided no evidence that the kitchen floor is unsafe;

6. the Harmer statement does not address the issue of the quality of the timber.

41. It follows that I am not satisfied that the applicant has discharged the onus of proving that the respondent failed to comply with the guarantee as to acceptable quality in s 54 of the ACL (NSW).

What is the appropriate remedy for any failure by the respondent to comply with the guarantee as to acceptable quality under the ACL (NSW)

42. In view of my finding that I am not satisfied that the respondent failed to comply with the guarantee as to acceptable quality in s 54 of the ACL (NSW), this issue does not arise for decision.

Orders

43. I make the following orders:

1. the respondent is to pay the sum of $580.00 to the applicant immediately;

2. the proceedings are otherwise dismissed.

**********

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 15 February 2022