Marshall v Frank Ugolini and Judy Burai Trading as Bubs N Grubs (Civil Dispute) - [2016] ACAT 82

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

MARSHALL v FRANK UGOLINI AND JUDY BURAI TRADING AS BUBS N GRUBS (Civil Dispute) [2016] ACAT 82

XD 1231/2015
Catchwords: CIVIL DISPUTE – Australian Consumer Law – acceptable quality – free of defects – whether a reasonable consumer would regard goods as acceptable –refund as remedy

Legislation cited: ACT Civil and Administrative Tribunal Act 2008 ss 16, 17, 18, 48
Competition and Consumer Act 2010 (Cth) sch 2 ss 11, 54, 61, 260, 262, 271
Fair Trading (Australian Consumer Law) Act 1992 (ACT) s 6, 11

Subordinate
Legislation: Court Procedure Rules 2006 r 2002, 2004

Tribunal: President G C McCarthy

Date of Orders: 22 July 2016
Date of Reasons for Decision: 22 July 2016

AUSTRALIAN CAPITAL TERRITORY
CIVIL & ADMINISTRATIVE TRIBUNAL XD 1123/2015
BETWEEN:
SIMON MARSHALL
First Applicant
REBECCA MARSHALL
Second Applicant

AND:
FRANK UGOLINI T/AS BUBS N GRUBS
First Respondent
JUDY BURAI T/AS AS BUBS N GRUBS
Second Respondent

TRIBUNAL: President G C McCarthy

DATE: 22 July 2016

ORDER

The Tribunal Orders that:

Within 28 days from the date of this order, the respondents pay the applicants $1,970 comprised of:
(a)$1,853 by way of refund of the purchase price and the freight charge for the subject goods;
(b)$68 for the filing fee; and
(c)$9 for the search fee.
The respondents’ counterclaim is dismissed.
……………………………..
President G C McCarthy

REASONS FOR DECISION

Background

On 23 May 2015, the applicants, Simon and Rebecca Marshall, purchased a Kaylula Sova four drawer chest and cot (the cot) from Frank Ugolini and Judy Burai, the respondents, who carry on a business known as Bubs n Grubs. The purchase price was $1756, plus $97 for a freight charge to deliver the cot from Queensland to the applicants’ home in the ACT.
On 29 June 2015, couriers delivered the cot to the applicants’ home. Upon unpacking the cot’s component parts, the applicants noticed a large cloudy blemish on the acrylic (or perspex) top panel of the cot. Also, the drawers were out of alignment such that there were significant gaps between the drawers. On the same day, by email sent at 9:02pm, Ms Marshall informed the respondents about the blemish and the defective drawers.
On 2 July 2015 at 2:36pm, the respondents via their “help desk” sent an email to the applicants which stated among other things:
Can you please kindly ask your customer to return the Sova chest for assessment. As the drawers are custom made for each chest we are unable to just swap over the drawer as we need to ensure the drawers fit correctly.
With regards to the Kaylula Sova Cot panel this does not appear to be a scratch to the panel but a little clouding which is part of the natural effects of acrylic glass and unfortunately cannot be avoided as it is part of the properties of this process. If [it] is a scratch which is superficial, it can be wiped off with Mothers California Gold Scratch Remover from Super Cheap which will not damage the panel.
After further email debate about the nature and extent of the blemish and defects, the applicants returned the cot in order for the respondents to assess the defects and remedy them.
On 20 July 2015, a courier collected the cot and returned it to the respondents.
On 24 July 2015, the respondent sent an email to the applicants stating:
The manufacturer has returned this chest and cot part resolved.
The cot part was not faulty - just needed to be wiped.
It is being dispatched today.
On 29 July 2015, couriers again delivered the cot to the applicants. The applicants contend that upon opening the returned cot, the blemish was still on the acrylic top panel.
The drawer set had been replaced. Whilst the replacement drawers were not out of alignment, the applicants contend that they were still faulty. They contend that whilst the top two drawers worked properly with a “soft-closing” system that drew each drawer shut and kept it in place, the bottom two drawers ran freely in and out on their runners. They contend that without the “soft-closing” system, the bottom two drawers needed to be physically placed shut but still drifted open on their runners.
On 29 July 2015 at 6:55pm, approximately five hours after the replacement cot had been delivered, the applicants sent an email to the respondents advising them of these defects and requesting a full refund. Mr Marshall also made a video recording of the two faulty drawers to evidence the defect.
On 2 August 2015 at 2:24pm, the respondents sent an email to the applicants stating among other things:
The owner has spoken to the manufacturer and your chest and cot part were personally inspected by the owner of the manufacturer.
The chest was fully replaced with a brand new one and inspected.
There is no problem with the drawers.
It was noted that the drawers that were sent up to us were damaged by using force to remove the lower drawers.
These drawers are not designed to be removed. The only thing we can think of is maybe the drawer[s] have been attempted to be fully removed from the chest and caused damage again?
There is no mechanisms for these drawers which are not soft close - they were tested and the soft close definitely works.
Perhaps you can send a short video from your phone showing the issue.
In regards to the cot part, it again was checked by several people - and there was no issue with marks on it. In fact, the original one was able to be wiped clean. Again, perhaps you can send a photo showing the issue with this part.
On 2 August 2015 at 3:22pm, in response to the request from the respondents, Mr Marshall sent the requested video to the respondents as an attachment to his email to demonstrate the faulty runners and the blemish on the acrylic panel. He stated among other things:
I will attach a video to entertain you but I will not be blamed in any way for damage to either set of drawers! To accuse us of this is really poor form … We have in no way attempted to remove any of the drawers at all. If you see the last photos of your product, it is actually still in the wrap as it was sent. We only peeled away the front of the plastic to inspect.
…
Also the said wiped down perspex is still in the same poor condition.
…..
Your items will be fully packaged tonight (as most is (sic) still in the wrappings) in await of a refund to us. Please indicate the best way for this transaction to happen by COB Tuesday.
On 2 August 2015 at 3:34pm, the respondents sent an email in which they stated among other things:
It is not about pushing blame.
The items were assessed by the manufacturer.
This was the outcome of their assessment by their engineers and owners.
The cot part had no manufacturing fault found.
The chest was replaced despite their assessment as was the cot part.
The replacement was inspected by them also.
We have simply passed on the feedback from the manufacturers experts.
It was not intended to offend.
Please provide the evidence requested and we will respond accordingly once we can see what you are referring to.
On 3 August 2015 at 8:02am, after correspondence that the video had not been received, Ms Marshall sent it to the respondents.
On 7 August 2015 at 1:15am, the respondents sent an email to Mr Marshall stating:
The manufacturer has advised that this is a faulty runner.
They have organised the replacement part to be air freighted from their factory.
As this is an easy fix and a minor fault, they will be sending this to you as soon as it arrives along with instructions to install the part which is apparently very easy to do.
On 7 August 2015 at 8:06am, Mr Marshall sent an email to the respondents stating:
Are you serious? Please ….. We are not in any way going to attempt to repair your faulty product. Firstly this is not in any way what a customer is obligated to do and secondly [it] would open us up to liability for any further damage to the unit. Also note that we still have the issue with the poorly manufactured perspex which IS NOT AN EASY FIX BY WIPING OFF.
On 7 August 2015 at 1:26pm, the respondents sent another email stating:
You sent a video in relation to the chest.
Please send evidence in regards to the cot part.
This is a minor fault and it takes less than a couple of minutes to remove the drawer and swap the rail.
On 7 August 2015 at 4:48pm, Mr Marshall sent an email to the respondents stating:
Thank you for the reply but as stated, we will not be doing repairs to your products. I come to the understanding that your company is unwilling to produce a refund for the goods in which [sic] we are entitled under the Australian Consumer Law Act.
On 13 August 2015 at 6:10pm, the respondents sent an email to the applicants stating:
As an act of good faith, the manufacturer has agreed to have this collected from you.
We have provided them with your pickup address and phone number - they are organising this directly.
On 13 August 2015 at 8:20pm, Mrs Marshall sent an email in reply stating:
I am happy to hear this and [it] will save us all a lot of time. Please have the manufacturer contact us directly to arrange a reasonable time for collection and means of our refund in full.
[My husband] will be home for collection on the arranged time and will discuss the refund details with them before collection is made. Payment was made via credit card and funds can be deposited directly back onto this card.
On 14 August 2015, the respondents sent another email to the applicants stating:
The refund will not be organised until the goods have been returned safely and checked upon receipt.
The courier will be in contact to organise a collection time over the next 2 business days.
Once [the cot] is received and checked, we will contact you to get your payment details again as we do not keep card details on file.
On 25 August 2015, a courier collected the cot in four repacked boxes and returned it to the respondents.
On 28 August 2015 at 9:51am, Mrs Marshall sent an email to the respondents stating:
Please see attached a photo of all 4 boxes/items ready for collection, all 4 boxes/items on the toll ipec truck at pick up on Thursday 25/8/15, a signed note for the Canberra Toll ipec driver and the signed con note from toll ipec. As you have now taken delivery of the complete order that we placed, we would now appreciate our full money ($1853) back within 48 hours.
On 28 August 2015 at 12.44pm, the respondents sent an email to the applicants stating:
When the items arrive at the manufacturer safely and are assessed, we will process a refund subject to the assessment.
On 1 September 2015 at 10:15pm, the respondents sent a lengthy email to the applicants denying any responsibility for the faults, and offering either repair of the drawers if the applicants paid the freight costs or that the matter be taken to court. The email stated:
Hello Rebecca,
I am the owner.
This subject has been escalated to me due to the nature of the conversations and the outcomes of your warranty claim as well as threats and false allegations against us and the manufacturer.
I have personally now inspected today both the original chest of drawers that was replaced in good faith as well as the cot and the second chest of drawers.
I was asked by the manufacturer to inspect it along with their engineer.
I fully support their position that they are taking on this after spending a lot of time personally to understand the history and issues.
Let me explain …
1.       You claimed that Chest had a manufacturing fault relating to the bottom drawers and the cot/bassinet part had a fault relating to marks on the acrylic.
Our team advised that from the image, the cot bassinet part just required to be wiped clean and recommended a product to be used with the acrylic.
You advised the cot part could not be wiped clean and had a fault.
2.       We organised a courier to collect the chest and the cot and return it to us so we could get it to the manufacturer to be assessed and resolved.
3.       You made the allegations that we/the manufacturer stated that this product was manufacturer [sic] in Australia. We spent considerable time and money investigating this to find that it was a completely false allegation.
4.       When the items arrived to us, we organised for them to go to the manufacturer and to be assessed and resolved.
5.       The manufacturer assessed the cot part and wiped it clean with no manufacturing fault found.
6.       The chest was found to be damaged through miss-use [sic] - the drawers had been forcibly incorrectly removed from the chest causing the timber to be broken and then replaced back into the chest causing them to not sit level and cause a gap.
Despite this - to try to keep a customer happy, we both agreed to replace the drawers as an act of good faith despite there being no manufacturing fault and their engineer showing it was caused through miss-use.
We also spent considerable money [to] pay for the freight to send these back to you along with the whole cot which again did not have a manufacturing fault.
7.       We were then advised that the second chest had another fault and sent a video of this. We were also advised that the cot part still had a fault. The manufacturer organised a courier to collect them for assessment and a refund on the basis that what you were stating was factually correct.
8.       As a result of the inspection/assessment of the engineer, it has been found that the second set of drawers again have been damaged through miss-use of being forcibly removed and the timber broken ripping it off the mechanisms. This time the drawers were installed back on the mechanisms incorrectly and due to the damage, the mechanisms are unable to hold the drawers causing it to appear that the self close was not working.
9.       The cot/bassinet part was also assessed. Again, there is no manufacturing fault found.
10.     I was asked to go there and inspect both chests with their engineer as well as the cot/bassinet part.
There is no way that this has been caused by any other way then miss-use ie forcible removing the drawers from the chest.
The costs for the manufacturer of 5 futile pickups due to you not being at the delivery address when agreed by you with the courier and the collection of both the cot, chest and bedding are at $250
Our costs for collections and returns are approx. double.
On top of that- our costs for investigating false claims, staff labour costs dealing with this and responding to your allegations/organising returns etc. and warranty claims have become very significant along with the cost of the replacement drawers at no cost to you - in fact - the costs are nothing less than ridiculous.
Our team has worked hard to keep you happy and yet, these false warranty claims, threats to involve ACCC and others continue.
Due to the considerable costs run up due to this - I fully support the manufacturers position and offer below subject to agreement to certain conditions.
The manufacturer is offering to repair the drawers that have been damaged free of charge.
The manufacturer is seeking payment of $250 for the freight wasted on both the futile pick-ups and collection of the cot and chest and bedding back to them.
We are prepared to forgo [sic] the loss in courier costs we have paid which is approx. double that as well is the cost of the replacement set of drawers which totals the costs well and truly higher than the cost of another set of drawers - nearly twice. As well as our labour costs and more.
The terms and conditions that we are prepared to do this is as follows:
Payment of $250 for the manufacturer’s freight within 72 hours. Collection by your courier paid by you within 4 business days of them advising you that the repair has been completed, from the manufacturers premises at a reasonable time.
Agreement by you to put this to bed and not to cause any further wastage of our or the manufacturers resources or legal action/complaints or damage to their business or ours.
The other option which we are both more than happy to go with, in fact, we believe would be better for us, would be to take this to court. We intend in this situation seeking all of our costs for both the manufacturer’s couriers costs, our couriers costs, the cost of the replacement drawers which were falsely claimed as a manufacturing fault, the labour for assessments, managing and investigating and processing these claims and the false allegations made of us.
We are happy for you to involve the ACCC also if you do not take us up on this offer as we have not broken the law and this is nothing less than an unethical process - we believe based on the evidence at hand (images and our own video both chest of drawers) that it is likely that this has been done in an effort to force a full refund - possibly due to change of mind or some other reason. this however will just be another waste of the ACCC resources and ours as well as yours.
As a small business, I am not going to be taken advantage of any longer and taking a firm stance on this as well as the manufacturer.
You are welcome to agree in writing to our terms and conditions above and pay for the manufacturers courier costs of $250, organise your own courier to collect from them once we have received payment.
Or you are welcome to go to court and we are happy to bring all of our evidence both photo’s of both chests, video and photos of the cot part which proves this is not a manufacturing fault and seek all of our costs as well as the manufacturers costs.
We are not prepared to negotiate any further on this.
Please advise how you wish to proceed ASAP to avoid storage costs on top of this.
Regards, Bubs n Grubs
On 30 October 2015, the applicants commenced this proceeding against the respondents seeking a refund of the purchase price ($1853), the tribunal filing fee ($68) and an ASIC search fee ($9), totalling $1930.
On 8 December 2015, the respondents filed a response and a counterclaim seeking a refund of freight costs for “Babyhood approx” ($250), the value/cost of replaced drawers “damaged through missuse” ($947), freight costs for “Bubs n Grubs approx” ($500) and “staff labour 3 hours” ($180). These amounts totalled $1877, although the respondents counterclaimed for $2377.
The applicants’ claim that the respondents did not comply with the statutory guarantee under section 54 of the Australian Consumer Law (ACT) (the ACL)[1] as quoted below because the cot was not of acceptable quality as defined in section 54(2). The ACL applies in this matter because the applicants reside in the ACT.[2]
[1] The Fair Trading (Australian Consumer Law) Act 1992 (ACT), section 6(a) relevantly includes the Australian Consumer Law at schedule 2 to the Competition and Consumer Act 2010 (Cth), and section 7 permits it to be referred to as The Australian Consumer Law (ACT)
[2] Fair Trading (Australian Consumer Law) Act 1992 (ACT ) section 11(1)(c)
Where the amounts claimed by both the applicants and the respondents are less than $10,000, the Tribunal has jurisdiction to hear the application under sections 16(i), 17 and 18 of the ACT Civil and Administrative Tribunal Act 2008 (the ACAT Act).

The hearing

The applicants both attended the hearing in person. Mr Frank Ugolini (being the first respondent) attended by telephone with the Tribunal’s leave and stated that he was also authorised to speak on behalf of the second respondent, Ms Judy Burai. This was later confirmed in a letter dated 11 March 2016 from Ms Burai.
In support of their claim, the applicants provided copies of the emails referred to and quoted above; photographs of the cot which evidenced the blemish on the perspex (or acrylic) top panel of the cot and the replacement chest of drawers at various stages of unpacking; a witness statement from each of them recording their evidence of what occurred; and copies of invoices and freight receipts to evidence the return (twice) of the cot to the respondents.
By document dated 3 February 2016, the applicants also amended their claim to add claims for ‘out-of-pocket ‘ costs for printer ink ($180) and paper ($10) and their time for preparing documents and appearing at the Tribunal assessed at 25 hours @ $25 per hour ($625).

The Tribunal has quoted at length from the email correspondence that passed between the applicants and the respondents prior to the applicants filing their application, because (despite Tribunal orders that they do so) the respondents did not file or serve any witness statement or any document in their response to the application or in support of their counterclaim.
On 7 March 2016, the day before the hearing, Mr Ugolini sent an email to the Tribunal stating:
Below is a link to a youtube video as evidence.
This will work within the next hour
I am having trouble sending you the images - I will continue now in a separate email.
The Tribunal is not averse to using technology as an effective means for presenting evidence, but it must occur in a manner that is fair to other parties and in accordance with Tribunal orders. In this case, the respondents were ordered to file and serve a range of identified documents in support of their case, and by a stated date, to give sufficient time for the Tribunal and the applicants to consider the evidence and respond to it. The respondents did not do so in time, or at all.
The respondents did not have leave to put proposed evidence on a website and then tell the Tribunal where it might find it. Nor were the applicants or the Tribunal given any indication prior to the hearing of what they might find were they to visit the website. In these circumstances, to have visited the website ‘on the run’ during the hearing and accepted as ‘evidence’ whatever may have been seen there would have been quite unfair to the applicants.
To have accepted the video would also have been unfair because the video was not supported by any witness statement, particularly a statement from the person who filmed it or observed it being filmed. The applicants would have had no opportunity to question anything that it showed, for example whether the cot was either of those previously sent to the applicants; in what way the drawer mechanism was “working perfectly”; and how that could be so where, according to Mr Ugolini, the supporting timber had been damaged by forcibly removing the drawers. It would have been particularly unfair to the applicants where they had given evidence on oath that they had never removed any drawers from either of the chests of drawers that were sent to them.
In the circumstances, the Tribunal heard the matter on the evidence before it. Its conclusions are as follows.

Consideration of the issues

Section 54 of the ACL states:
54Guarantee 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
(c)any statements made about the goods on any packaging or label on the goods; and
(d)any representation made about the goods by the supplier or manufacturer of the goods; and
(e)any other relevant circumstances relating to the supply of the goods.
(4)If:
(a)goods supplied to a consumer are not of acceptable quality; and
(b)the only reason or reasons why they are not of acceptable quality were specifically drawn to the consumer’s attention before the consumer agreed to the supply;
the goods are taken to be of acceptable quality.
(5)If:
(a)goods are displayed for sale or hire; and
(b)the goods would not be of acceptable quality if they were supplied to a consumer;
the reason or reasons why they are not of acceptable quality are taken, for the purposes of subsection (4), to have been specifically drawn to a consumer’s attention if those reasons were disclosed on a written notice that was displayed with the goods and that was transparent.
(6)Goods do not fail to be of acceptable quality if:
(a)the consumer to whom they are supplied causes them to become of unacceptable quality, or fails to take reasonable steps to prevent them from becoming of unacceptable quality; and
(b)they are damaged by abnormal use.
(7)Goods do not fail to be of acceptable quality if:
(a)the consumer acquiring the goods examines them before the consumer agrees to the supply of the goods; and
(b)the examination ought reasonably to have revealed that the goods were not of acceptable quality.
For the purposes of section 54(1) of the ACL, I find (and it was not disputed):
a)each of the respondents is a legal person that supplied, in trade or commerce, goods (namely the cot) to a consumer (namely the applicants);
b)the supply did not occur by way of sale by auction; and
c)the respondents’ supply of the cot was subject to a guarantee that the goods be of acceptable quality as defined in section 54(2) of the ACL.
In issue is whether the applicants have established on the balance of probabilities that the cot was not of acceptable quality, having regard to the matters set out in section 54(3). Neither party suggested that any of the ‘excuse’ provisions in sections 54(4) – (7) is applicable in this case.
In determining whether the cot was of acceptable quality, I considered whether a reasonable consumer would regard each of the five features of quality as set out in section 54(2)(a) – (e) was met. Section 54(2) required that I did so, not by reference to a particular consumer (in this case the applicants) but by applying an objective test.
The applicants contend that the respondents were in breach of the guarantee because the cot was not acceptable in appearance and finish, per section 54(2)(b), and was not free of defects per section 54(2)(c).
The applicants rely on two features: the blemish on the acrylic surface of the top panel; and the faulty runners on the bottom two drawers of the replacement set of drawers. I have considered each in turn.
Acrylic surface
It appears to be accepted that the acrylic panel surface was marked when the goods were first delivered.
After inspecting the surface of the panel after the cot was first returned, the respondents stated this was not a fault, and it “just needed to be wiped”.
In their email of 2 August 2015 sent at 2:24pm, they claim “In fact, the original one was able to be wiped clean”, suggesting that the respondents sent a replacement acrylic panel, yet during the hearing Mr Ugolini stated that they “wiped” the original panel to remove the blemish and sent it back. The email stated that the panel as re-sent “was checked by several people – and there was no issue with marks on it”.
The applicants contend otherwise. They gave evidence on their oath that when the cot was returned the panel was exactly the same, with the same blemish on it.
The photographs received in evidence show a substantial cloudy marking across the otherwise clear acrylic surface.
On the evidence, I am satisfied that the surface panel was significantly and irreparably blemished by the clouding, and that the respondents did not send a replacement panel. They simply returned the damaged one.
The respondents’ correspondence on the issue is inconsistent and illogical.
On 2 July 2015, they suggested that “a little clouding” is “part of the natural effects of acrylic glass” and “unfortunately cannot be avoided”, apparently seeming to suggest that the clouding as evidenced on the photographs was fair and reasonable. I reject the proposition that such clouding was fair and reasonable.
The respondents later claimed that the acrylic panel “just needed to be wiped” in order to remove the blemish, and that they did so. That is illogical and unlikely to be true. It makes no sense that the clouding was or could be removed by “wiping” when the respondents had previously claimed that it “cannot be avoided”.
It is also illogical and unlikely that the applicants would immediately notify the respondents that the blemish was still on the panel if it could be (or was) removed simply by “wiping”.
I accept the applicants’ evidence that the clouding was still on the surface panel when it was returned to them. Save for the emails that gave inconsistent accounts about the blemish, the respondents did not need provide any evidence to contradict the applicants’ claims.
Faulty runners
The applicants gave simple and straightforward evidence on oath that upon partially unpacking the returned cot they found that the bottom two drawers were faulty because the “soft closing system” was not working.
I accept the applicants’ evidence.
Again, the respondents’ emails are inconsistent and illogical.
In their email of 2 August 2015 sent at 2.24pm, the respondents contended that the drawers “were damaged by using force to remove the lower drawers” yet, after receiving the applicants’ video, the respondents claimed on advice from the manufacturer that “this is a faulty runner.”
In their emails sent on 7 August 2015, the respondents contended “this is an easy fix and a minor fault”, and that it “takes less than a couple of minutes to remove the drawer and swap the rail”, yet on 2 August 2015 the respondents blamed the applicants for the damage and stated “these drawers are not designed to be removed.” At hearing, Mr Ugolini provided yet another account by saying that the drawers are designed to be removed, but their removal requires use of a “lever” in the mechanism.
Further, when the applicants returned the cot to the respondents, as requested, expecting a refund arising from the faulty runners, the respondents then denied liability contending that the second set of drawers had again been damaged through misuse by being forcibly removed and then installed “back on the mechanisms incorrectly”. Such an event is wholly improbable and illogical in circumstances where the applicants, upon being invited to replace the faulty runner as an “easy fix”, immediately replied “Are you serious? Please… we are not in any way going to attempt to repair your faulty product.”
It is also illogical and unexplained that the drawer runner mechanism could be “working perfectly” in circumstances where, according to Mr Ugolini, the drawers had been forcibly removed to such a degree that the removal had damaged the timber, which could only mean the timber that was in some way supporting the drawers.
I accept the applicants’ evidence that they never removed either set of drawers and that both sets of drawers were faulty through poor construction, the first through misalignment of the drawers and the second through faulty runners.

Breach

The blemish and the faulty runners are not, by themselves, enough to establish that the cot was not of acceptable quality. The issue must be determined by reference to whether “a reasonable consumer” would regard the goods as acceptable, in relation to each of the five features in subsection 54(2), having regard to the matters set out in subsection (3).
Mr Ugolini did not attempt to justify or defend the faults as acceptable in the circumstances. Rather, he denied either the existence of the faults or responsibility for them. On the evidence, I am satisfied of their existence and the respondents’ responsibility for them.
I have nevertheless had regard for the matters set out in subsection 54(3).
Where the item in question was a new cot, in my view a reasonable consumer (namely the mother of a baby) would expect the cot to be free of blemishes and defects, especially a blemish that so substantially spoilt the appearance of the acrylic surface and a defect that caused the bottom two drawers to malfunction in such a serious way. For the bottom two drawers to be able to slide open freely of their own accord was, among other things, a serious hazard for anyone using the cot and handling a baby.
I have also had regard for the price of the cot. For a purchase price of $1756, which is plainly a very high price for a cot, any reasonable consumer would expect the product to be in perfect condition and in every way.
The applicants stated that they received assurances that the cot was made in Brisbane, and that this assurance gave them confidence about its quality. The respondents contended that a claim that the manufacturer gave this assurance was a “completely false allegation”. I am not persuaded that this assurance was given. I accept on the evidence that the cot was “made in China”. Nevertheless, I do not accept that because the cot was “made in China”, a reasonable consumer cannot expect it to be of acceptable quality.
I find that the respondents were in breach of their guarantee under section 54 of the ACL that the cot be of acceptable quality: it was neither acceptable in appearance and finish, consequent upon the blemish to the acrylic surface, nor free of defects consequent upon the faulty runners.

Remedy

The respondents’ breach of its statutory guarantee does not, by itself, entitle the applicants to a refund. An entitlement to reject goods and seek a refund arises only if the remedy cannot be remedied or is a major failure, and the consumer (in this case the applicants) rejected the goods before the rejection period has ended.
I am satisfied that these preconditions are met in this case.
The clouding on the acrylic could not be remedied.
It appears that the faulty runners could possibly have been remedied by replacing them, but the respondents never offered to do so. Mr Ugolini explained that they did not have any support service in Canberra that could do this repair. This was a curious submission, where he had previously explained to the applicants that it was an “easy fix” that would “take less than a couple of minutes”.
Even if the faulty runners could have been remedied, the applicants are still entitled to a refund because I am satisfied that the faulty runners, causing the lower two drawers to open freely and present a hazard to anyone using the cot, constituted a major failure as defined in section 260 (a) and (b)(ii) of the ACL, namely:
(a) the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or
(b) the goods depart in one or more significant respects:
(i)..
(ii) if they were supplied by reference to a Sample or demonstration model - from that sample or demonstration model.
The rejection period is defined in section 262(2) of the ACL as follows:
(2) The rejection period for goods is the period from the time of the supply of the goods to the consumer within which it would be reasonable to expect the relevant failure to comply with a guarantee referred to in section 259(1)(b) to become apparent having regard to:
(a) the type of goods; and
(b) the use to which a consumer is likely to put them; and
(c) the length of time for which it is reasonable for them to be used; and
(d) the amount of use to which it is reasonable for them to be put before such a failure becomes apparent.
Where the applicants rejected the cot following its return before it had even been unpacked, it is plain that they rejected the goods before the rejection period had ended.
For these reasons, I am satisfied that the applicants are entitled to a refund of the purchase price of the cot and of the freight charge.
I am not persuaded that the applicants are entitled to any other of their claimed costs. Section 48 of the ACAT Act limits the costs that the Tribunal may order another party to pay to the filing fee for the application and any other fee incurred by the applicant that the Tribunal considers necessary for the application. None of the additional costs, as claimed by the applicants, were fees incurred.

Conclusion

For these reasons, I will order the respondents to pay the applicants $1970 comprised of $1853 by way of refund of the purchase price and the freight charge for the subject goods, $68 for the filing fee and $9 for the search fee.
I will give the respondents 28 days within which to pay the amount ordered. If the total amount owing ($1970) is not paid within 28 days, the applicant may take enforcement action in the ACT Magistrates Court for non-payment of the debt. I refer to rules 2000-2002 of the Court Procedures Rules. The applicants’ costs of obtaining an enforcement order would be recoverable as part of the enforcement order under rule 2004 of the Court Procedures Rules
For the above reasons, the counterclaim will also be dismissed.
………………………………..

President G C McCarthy

HEARING DETAILS

FILE NUMBER:	XD 1231/2015
PARTIES, APPLICANT:	Simon Marshall, Rebecca Marshall
PARTIES, RESPONDENT:	Judy Burai T/AS As Bubs N Grubs Frank Ugolini T/AS Bubs N Grubs
COUNSEL APPEARING, APPLICANT	N/A
COUNSEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	N/A
SOLICITORS FOR RESPONDENT	N/A
TRIBUNAL MEMBERS:	President G C McCarthy
DATES OF HEARING:	8 March 2016