Matthews v Inspirations Furniture Design
[2016] QCAT 525
•3 March 2016
| CITATION: | Matthews v Inspirations Furniture Design & Ors [2016] QCAT 525 |
| PARTIES: | Peter D Matthews (First Applicant) Donna M Matthews (Second Applicant) |
| v | |
| Inspirations Furniture Design | |
| APPLICATION NUMBER: | Q391/15 |
| MATTER TYPE: | Other minor civil dispute matters |
| HEARING DATES: | 20 October 2015 and 16 February 2016 |
| HEARD AT: | Southport |
| DECISION OF: | Adjudicator Mewing |
| DELIVERED ON: | 3 March 2016 |
| DELIVERED AT: | Southport |
| ORDERS MADE: | 1. For breaches of ss 54 and 29(1)(a) of the ACL, the Tribunal orders that— a) The Fourth Respondent pay to the Second Applicant $7,994.60 within 28 days of this Order, being: i) Refund of the purchase price of two Domicil brand ‘Capitol’ 2.5 seat lounges with electric action ($7,600.00); ii) Reimbursement of the fee payable to the Leather Doctor for testing on 11 January 2015 ($100.00); and iii) QCAT filing fee ($294.60); and b) The Fourth Respondent collect the two 2.5 seat sofas from the Second Respondent’s home at a mutually convenient time, but in any case no later than 15 April 2016; and c) On written request by the Second Respondent, the Fourth Respondent reaffix the cover over the recline mechanism of the ‘Capitol 2 seat sofa with electric action left hand’, or if the original cover is broken or cannot be found, that the Fourth Respondent arrange for a replacement cover to be so affixed within 60 days of the date of the request; 2. The Applicants’ claims with respect to ss 29(1)(i), 29(1)(k), 29(1)(m), 33 and 55 are dismissed; and 3. No Orders are made with respect to the Applicants’ claims under ss 102, 136 and 192. | ||
| CATCHWORDS: | MINOR CIVIL DISPUTE – CONSUMER/TRADER DISPUTE – where leather furniture purchased from furniture retailer – where surface of leather peeled soon after purchase – where non-essential parts of furniture came off soon after purchase – where purchaser claimed breaches of consumer guarantees as to quality, safety, fitness for disclosed purpose – whether breaches are major failure – where purchaser claimed misrepresentation, misleading conduct – where purchaser claimed failure to tag, failure to provide warranty, etc – damages Australian Consumer Law ss 29, 33, 54, 55, 102, 136, 192, 236, 259, 260 Griffiths v Peter Conway Ltd [1939] All ER 685 | ||
APPEARANCES AND REPRESENTATIVES:
Hearing, 20 October 2015
| Applicants | In Person |
| Respondents | Paul Sparrow (in person and as representative of the First, Second and Third Respondents) Dianne Sparrow |
| Hearing, 16 February 2016 | |
| Applicants | Peter Matthews (by phone) |
| Mr Terrence Flynn, witness for the Applicants (by phone) | |
| Respondents | Paul Sparrow Dianne Sparrow |
REASONS FOR DECISION
Claim
The Applicants claim $17,276.60 from the Respondents for alleged breaches of ss 29(1)(a), 29(1)(b), 29(1)(k), 29(1)(m), 33, 54, 55, 109, 136, and 192 of the Australian Consumer Law, at Schedule 2 of the Competition and Consumer Act 2010 (“ACL”).
Specifically, the Applicants seek the following Orders:
a) A refund of $14,300.00 for purchase of five items of furniture from the Respondents;
b) Reimbursement of $1,222.00 incurred by the Applicants for inspection and testing of leather;
c) Payment by the Respondent of $1,560.00 to seal, transport and dispose of the furniture; and
d) Reimbursement of the $294.60 QCAT filing fee.
Background
In May 2011 the First Applicant (Dr Matthews) purchased five items of Domicil brand ‘Capitol’ furniture from the First Respondent (Inspirations):
a) two 2.5 seat sofas with electric action recliner;
b) one 2 seat sofa;
c) one 2 seat sofa with electric action recliner; and
d) one chair.
The total price of the furniture was $14,300.00.
The furniture was delivered to the home of Ms Matthews in August 2011.
On the day the sofas were first used, plastic covers apparently designed to shield part of the recline mechanism fell off at least one sofa. Dr Matthews told Mr Sparrow (the Fourth Respondent, and owner of Inspirations) the next business day. Mr Sparrow said there was no remedy. The Matthews did not pursue this further.
In December 2011 the Matthews told Mr Sparrow that black spots had begun to appear on a headrest of one of the 2.5 seat sofas. Mr Sparrow suggested they monitor it and let him know of any change.
In February 2013 Dr Matthews wrote to Mr Sparrow telling him one headrest on a 2.5 seater sofa had what appeared to be a painted finish peeling off. Mr Sparrow ordered a replacement headrest cover the following week, which was delivered to Ms Matthews in May 2013.
In February 2014 Dr Matthews emailed Mr Sparrow reporting that both 2.5 seater sofas seemed to have a paint finish that was spalling and falling off.
Mr Sparrow subsequently engaged Erin Dauth of Bulls Leather Care to attend Ms Matthews’ home to inspect the sofas. Ms Dauth’s report included the following observations:
a) Peeling of the leather pigmentation on the backrests, lumbars, seats, arms and footrests of two 2-seater sofas facing the television,[1] exposing a black crust;
b) The damaged couches were soiled, the leather was tacky to touch, there was a distinct odour of perspiration, and evidence of salts in the surface of the pigment;
c) The affected leather pigment had a distinct smell which is attributable to medication;
d) It is unusual to find a black crust on a brown leather suite;
e) The pigment peels off the surface of the leather;
f) The headrest replaced in May 2013 is peeling.
[1]Ms Dauth refers to “two 2-seater sofas”, but on my reading of her report I think she is referring to the two 2.5 seater sofas.
Dr Matthews obtained his own report from Chris Bolitho of The Leather Doctor dated 11 January 2015. Mr Bolitho inspected one headrest. His report included the following observations:
a) The material of the headrest was a black leather crust recoloured to chocolate brown and top coated with a water-based top coat compound;
b) There was no sign of excess body oils on inside cover of suite;
c) The peeling can be partly attributed to poor quality preparation and sealing of the original leather crust before recolouring, and to body oils and medications; and
d) Some of the blame for peeling must be attributed to body oils and medications.
In March 2014 Dr Matthews requested that Inspirations either re-cover the lounges in genuine leather hide or pick up the furniture and refund the amount paid. Mr Sparrow passed this request on to the manufacturer, HTL. HTL rejected the warranty claim because, in its assessment (presumably based on the report of Ms Dauth), the condition of the leather was the result of inadequate cleaning and maintenance of the lounge. Mr Sparrow offered to provide replacement covers at cost to resolve the matter. Dr Matthews rejected the offer.
Some correspondence continued to flow between the Matthews and Mr Sparrow, and between the Matthews and HTL in the ensuing months without resolution.
The Matthews’ filed their QCAT claim on 7 January 2015.
Facts in Dispute
Dr and Ms Matthews say Mr Sparrow told them Domicil was made in Germany and/or German engineered, it was the best money could buy, it was made of genuine, natural leather, the leather was from Australia, it had been tanned in Australia and independently certified by Furntech.
Mr Sparrow said he never told the Matthews Domicil was made in Germany. He said he would have used the words ‘German designed.’ He refers to Ms Matthews’ affidavit deposed on 10 August 2015 where she said she went to the websites of both Inspirations and Domicil soon after attending his store to reassure herself of her purchase. Mr Sparrow says that the websites use the words ‘German designed’, not German made.
Mr Sparrow said he would never have said the leather was more than 50% Australian because, while Australian leather is among the most commonly used, South American leather is also a major source, and hides are mixed and sold on the world market to tanneries around the world. He said he didn’t tell the Matthews the tannery was Australian, nor does the Domicil website.
Ms Matthews said she asked Mr Sparrow whether the leather was bonded or split. The Matthews said if they’d been told the furniture had a painted surface they’d have walked out of the shop.
Mr Sparrow recalls Ms Mathews saying she didn’t want a bonded, split crust or similar leather which, he said, Inspirations does not sell in any case. At the hearing, Mr Sparrow submitted a sample of the leather he claimed the Matthews would have seen on the day they chose the furniture. It had a suede-like backing on one side, and a smooth, slightly sheened opposite side. It did not appear to be painted.
Mr Sparrow had leather of the same type as that used on the Matthews’ sofa tested by The New Zealand Leather and Shoe Research Association (LASRA). This test confirmed that the leather is of bovine origin and is semi-aniline, top-coated leather.
Referring to a photograph of the leather on one of the Matthews’ sofas, Mr Sparrow acknowledged it had delaminated. He said that with normal use and proper maintenance leather should last for 10-12 years without problem. He said medication can be a cause of delamination. He said it was not reasonable for a couch to be showing such signs of wear after three and a half months. He said this was the only lounge furnished with BZ (semi-aniline) leather that he had known to peel.
Ms Matthews said Mr Sparrow told her the sofas had a 10 year unlimited warranty. Mr Sparrow denies saying that.
The Matthews say Mr Sparrow’s statements and answers to their questions influenced their decision to purchase the lounges.
The Matthews’ voluminous written submissions include press reports and other material from the internet about dimethyl fumarate, diethylene glycol, ethylene glycol, and chromium (VI), and the possible health effects arising from exposure to those chemicals.[2]
[2]Applicants’ Exhibit 60.
The Matthews also submitted two reports they had commissioned from the Chemical Consulting Laboratory at the UNSW Analytical Centre containing test results of samples of leather from their sofas. The first report showed no detectable dimethyl fumarate or diethylene glycol.[3] The second report stated that the total extractable chromium detected was 88 ± 4 micrograms per gram, and the chromium (VI) content detected was 3.2 ± 0.3 micrograms per gram on a dry weight basis.[4] The second report included the following notation:
[3] Report dated 11 February 2015.
[4]Report dated 21 May 2015.
Note:
The acceptable limit for total extractable chromium in leather is 50 micrograms per gram and for chromium (VI) is 3 micrograms per gram of leather.
The author of the reports, Mr Terrence Flynn, gave evidence to the Tribunal for the Matthews. Mr Flynn told the Tribunal he believed that the chromium (VI) would have leached into the foam of the Matthews’ sofas. He said that the reference to “acceptable limit” in the notation to his 11 May report is a reference to a regulation of the European Union, which took effect in the EU from 1 May 2015.[5] He said that he was not aware of any such “acceptable limit” or legal or regulatory restriction regarding chromium (VI) in Australia. In Mr Flynn’s view, despite the absence of any legal limits on chromium (VI), the scientific consensus was that 3 micrograms per gram was the safe limit for chromium (VI) content in leather. To support that view, he referred to a 2007 press release from the Federal Institute for Risk Assessment in Germany.[6] The Tribunal reviewed that press release, but could find no reference to consensus among scientists.[7]
[5]The full title is “Commission Regulation (EU) No 301/2014 of 25 March 2014 amending Annex XVII to Regulation (EC) No 1907/2006 of the European Parliament and of the Council on the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) as regards chromium VI compounds.”
[6]Chromium (VI) in leather and shoes problematic for allergy sufferers!, 2 July 2007, Bundesinstitut für Risikobewertung ( only reference to a limit was in this paragraph: “As no indication is given of the method used to tan the leather product, the consumer cannot tell whether the product contains chromium (VI) or not. BfR, therefore, believes that leather goods that come into contact with skin should not, if possible, contain any chromium (VI). At the very least, the levels should be reduced as far as possible. At the present time, the analytical detection limit is approximately 3 mg per kg leather.”
The Matthews also submitted material from a QCAT claim made by Ms Bella Zozula against Inspirations in 2014, involving a similar situation to the present claim. I decline to consider that material because that matter was settled between the parties before the hearing, and Ms Zozula’s sofa was different from the Matthews’ sofas.
The Applicants’ Claims Under the ACL
QCAT has jurisdiction over a dispute between a consumer and a trader.[8] A person acquires goods as a ‘consumer’ if the amount paid does not exceed $40,000.00, or the goods are of a kind normally acquired for household use.
[8]Sections 11 and 12 QCAT Act.
Competing assertions were made about the proper consumer by both parties at different stages in the history of this claim, and it is relevant for the remedies available under the ACL. The Respondents argued[9] that Dr Matthews’ business ‘Olive Grove Estate’ was the purchaser and was precluded from bringing the current claim as it cannot be a ‘consumer’ under the ACL. They say that both the invoice and a hand-drawn diagram of the proposed layout of the furniture faxed to Inspirations by Dr Matthews on which the words “LOUNGE LAYOUTS FOR OLIVE GROVE” are handwritten indicate that the consumer was Olive Grove Estate. Dr Matthews told the Tribunal that neither he nor Olive Grove Estate is the consumer, and only included his business name on the suggestion of Inspirations. According to Dr Matthews, the furniture was purchased by Ms Matthews for use in her own home.
[9]Letter from Short Punch and Greatorix to Kimberley Hartley of the Office of Fair Trading dated 5 June 2014.
While a person must be a ‘consumer’ in order to claim the rights and remedies against suppliers under the ACL, the definition in s 3 does not require the person who acquired the goods to be the same as the person who paid for the goods.[10] I am satisfied on the evidence that the furniture was delivered to Ms Matthews’ home and it was acquired by her for personal use. Accordingly, she is ‘consumer’ for the purposes of the ACL.
[10]Gift recipients are also entitled to the same rights and remedies as the person to whom goods were originally supplied: s. 266 ACL.
Inspirations Furniture is a business name. According to Mr Sparrow, he operates as a sole trader and not through the Second and Third Respondents. Accordingly, Mr Sparrow (the Fourth Respondent) is a ‘trader’ for the purposes of this matter.
Claim 1: Section 54 - Guarantee as to acceptable quality
If a person supplies goods to a consumer in trade of commerce, s 54 ACL provides a statutory guarantee despite any other warranty provided by the trader that those goods will be of acceptable quality. Goods are of ‘acceptable quality’ if they are:
a) fit for the purpose that are normally used;
b) acceptable in appearance and finish;
c) free from defects;
d) safe; and
e) durable,
as a reasonable customer fully acquainted with the state and condition of goods would regard as acceptable[11] having regard to the nature of the goods, their price, statements made by the supplier on packaging or any label, representations made by the supplier, and anything else that may be relevant.[12]
[11]Section 54(2) ACL.
[12]Section 54(3) ACL.
The Matthews say the sofas are:
a) not fit for purpose, not acceptable in appearance and finish and not durable because they peeled after only a short period of normal use;
b) not safe because the sofas are “toxic” and cause “skin lesions.” They say testing by the University of New South Wales found “excessive levels of chromium in the leather”, which according to the Matthews, is a “particularly toxic and carcinogenic compound.” The Matthews also mention the presence of “toxic dyes and paint finishes” that they say contain diethylene glycol;[13] and
c) not free from defects and not safe because the safety cover plates for all recliners fell off soon after delivery.
[13]Referring to a report tendered by the Applicants from Terrence Flynn of the Chemical Consulting Laboratory, UNSW Analytical Centre for Ms Matthews, dated 21 May 2015.
Of the peeling, Mr Sparrow says that the report of Erin Dauth shows the sofas weren’t cleaned regularly or properly, showed evidence of perspiration residue, and deterioration of the leather may have been a result of medications taken by the Matthews family. Ms Matthews said she cleaned the sofas weekly with the specialist products Mr Sparrow had given to her. Dr and Ms Matthews say the long list of medications that could potentially affect leather given to them by HTL would preclude most Australians from purchasing a leather suite.
Goods do not fail to be of acceptable quality if the consumer causes them to become of unreasonable quality, or fails to take reasonable steps to prevent them becoming of unreasonable quality,[14] or if an examination of the goods before purchase ought reasonably to reveal that the goods weren’t of acceptable quality.[15]
[14]Section 54(6) ACL.
[15]Section 54(7) ACL.
I’m not persuaded that the Matthews’ caused the sofas to peel by lack of cleaning. There was also no evidence that anything other than the prescribed leather cleaner was used. I am also not persuaded that medications taken by one or more of the Matthews caused the peeling because the peeling is confined to the two 2.5 seater sofas, while the other sofas that are regularly used show no sign of peeling.[16] Mr Sparrow conceded that it was not reasonable for a sofa to be showing the kind of wear the Matthews’ sofa displayed after only three and a half months.[17] Erin Dauth’s report said this should not happen, and the Leather Doctor’s report observed poor quality preparation and sealing. Even though the peeling was minimal at the time of Ms Dauth’s visit, it is uncontested that in the ensuing years it became worse.
[16]Transcript, p 68, line 1.
[17]Transcript, p 45, line 15.
I find that the two 2.5 seater sofas purchased by the Matthews were not durable and became unacceptable in appearance and finish within an unreasonable time after purchase. I find that the failure to comply with the guarantee as to acceptable quality is a major failure. I am satisfied that the Matthews would not have purchased the sofas if they’d known the top coat finish of the leather would begin to peel within a few months of use, and to a greater extent within four years of use.[18]
[18]Section 260(a) ACL.
The consequence of this finding is that the Matthews were entitled to reject the affected sofas within a reasonable time,[19] and recover damages for any reasonably foreseeable loss or damage.[20] They first sought a refund on 4 March 2014, which is two years and eight months after delivery. I find the Matthews’ rejected the goods within a reasonable time. I also find that they are entitled to a refund of the full purchase price of the two 2.5 seater sofas.
[19]Section 259(3)(a); s 262(1).
[20]Section 259(4) ACL.
With respect to safety, I find that the testimony of Mr Terrence Flynn does not establish that the level of chromium (VI) detected in samples provided by the Matthews’ was unsafe, nor was evidence presented to the Tribunal that the levels detected in Mr Flynn’s test are contrary to any Australian law. The EU regulation referred to in Mr Flynn’s affidavit and during oral testimony limiting chromium (VI) content in new leather articles sold in the EU from 1 May 2015 to 3 milligrams per kilogram does not apply in Australia. Until Australian legislators or regulators impose a similar restriction it is not the place of this Tribunal to determine a safe chemical content threshold.
While both Dr and Ms Matthews mentioned health problems in written submissions and during the course of oral testimony (and acknowledged that personal injuries claims were not within QCAT’s jurisdiction), there was no evidence presented that linked these health conditions to the presence of chromium (VI) or any other chemical in their sofas. They did not provide any evidence of the presence of dimethyl fumarate, diethylene glycol or any other chemical in the sofas that they say may have led to the onset and worsening of their health conditions.
Accordingly, the alleged breach of s 54(2)(d) is not made out and the claim under that section is dismissed.
I find that it was not reasonable for the covers to fall off the recline mechanism so soon after first use. Mr Sparrow briefly mentioned that they could fall off if misused, but did not pursue that line to an extent sufficient to rebut the Matthews’ account. The Matthews say they simply pressed the recline button as instructed and did not misuse it. I accept this. I also take into account that the Matthews informed Mr Sparrow soon after the covers first fell off, but Mr Sparrow did not seem willing to resolve the issue. While I find that this is a failure to comply with the guarantee as to acceptable quality in terms of durability,[21] I am not persuaded that the goods are unsafe without the covers, as photographs tendered by the Matthews show that the covers shield only part of the recline mechanism.
[21]Section 54(2)(e) ACL.
Accordingly, I find that the recline mechanism cover issue can be remedied and is not a major failure. The Matthews never told Mr Sparrow that they rejected the sofas on this ground. Indeed, they did not pursue rectification of the remaining covers after Mr Sparrow told him not much could be done about the first one reported in August 2011. If they considered it a serious safety issue, it seems reasonable to assume that they would have pressed Mr Sparrow, or sought another remedy. Rather, the actions of the parties show that Mr Sparrow was reluctant to travel to Stanthorpe to fix what he considered a minor problem, and the Matthews took it no further. That said, the Matthews were entitled to enjoy and use their sofa without bits of it popping off.
Accordingly, I Order that, if Ms Matthews makes a request to Mr Sparrow to replace the cover, that the original cover be reaffixed, or if the original cover is broken or cannot be found, that Inspirations arrange for replacement covers to be affixed to the 2 seater sofa with electric recline mechanism within 60 days of the request. (A similar Order with respect to the 2.5 seat sofas is redundant given the separate Orders made about them.)
Claim 2: Section 55 - Guarantee as to fitness for any disclosed purpose
The ACL imposes a statutory guarantee that goods will be reasonably fit for any disclosed purpose, and for any purpose for which the supplier represents that they are reasonably fit.[22] A “disclosed purpose” is a particular purpose for which goods are being acquired by the consumer, and that the consumer makes known, expressly or by implication, to the supplier.[23]
[22]Section 55(1) ACL.
[23]Section 55(2) ACL.
Dr Matthews says he disclosed to Mr Sparrow he had high blood pressure and asthma. Ms Matthews says she told Mr Sparrow prior to buying the furniture that she has chronic fatigue syndrome and allergies, she has a son with asthma and another with a heart condition, she cannot tolerate harsh chemicals or outgassing so the leather must be “environmentally friendly”, and that she looked for “all natural-type products in the home,” including the paint on the walls. She said Mr Sparrow told her the leather was environmentally friendly and “safe for us”.
The Matthews say that Mr Sparrow should have known based on this conversation that they would be taking certain medications. They also say Mr Sparrow concealed that the lounge had toxic coatings and dyes which can be affected by medication.
Mr Sparrow recalled Ms Matthews mentioning asthma in the family, but does not recall Ms Matthews saying she is sensitive to chemicals, nor that she required a completely natural product. He denies deliberately concealing the presence of coatings and dyes on the leather.
As the definition in s 55(2) makes clear, the words “disclosed purpose” in s 55 refer to the purpose for which a consumer tells the supplier he or she is buying the goods. The guarantee applies when a customer has disclosed the purpose for which goods are acquired. The purpose of buying sofas seems self-evident, and there was no evidence from the Matthews that they told Mr Sparrow they’d do anything other than sit on them in a residential setting. The guarantee also applies where the supplier makes representations about fitness for a particular purpose. There is no evidence that Mr Sparrow represented the sofa would be fit for any purpose other than that for which sofas are ordinarily acquired.
The key phrase in s 55 is “disclosed purpose”: to the extent that a purpose was disclosed by the Matthews, it was sitting and lounging by a family who have some health conditions. Inclusion of the words “expressly or by implication” in s 55(2)(a) does not, in my view, require a supplier who is not medically trained to make assumptions about medication a consumer might take, even if he or she is told about particular health conditions.[24]
[24]Griffiths v Peter Conway Ltd [1939] All ER 685.
Accordingly, the claim under s 55 is dismissed.
Claim 3: Section 29(1)(a) – False or misleading representations about standard, quality, etc of goods
Section 29(1)(a) prohibits a supplier from making a false or misleading representation that goods are of a particular standard, quality, value, grade, composition, style or model, or have had a particular history or particular previous use.
The Matthews claim that the Respondents beached s 29(1)(a) by making five false representations.
Representation 1: the sofas were the finest high-end lounges money could buy and superior in quality to a Rubelli lounge
Mr Sparrow did not address the Matthews’ claim that he’d represented that the Domicil was superior to a Rubelli lounge. In the Matthews’ opinion, the Domicil has turned out to be inferior because two sofas have peeling surfaces while their 10 year old Rubelli still looks good. The Matthews say that this comment influenced their decision to consider Domicil lounges from the outset, and their ultimate decision to purchase.
It was reasonable for the Matthews’ to rely on Mr Sparrow’s opinion, as he’d told them he owned the business and had been in the furniture business for many years. That two of the Domicil sofas purchased by the Matthews’ turned out to peel also appeared to be a surprise to Mr Sparrow. He may have been mistaken through no fault of his own but this is no defence to s 29(1)(a).[25]
[25]Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465; Given v CV Holland (Holdings) Pty Ltd (1977) 15 ALR 439.
Accordingly, I find that the Respondents breached s 29(1)(a) by falsely representing that the two 2.5 seat Domicil sofas were of a high standard or quality. This finding applies only to the two 2.5 seat sofas that are peeling, as there was no evidence before the Tribunal that the representation did not turn out to be true for the two 2 seat sofas and single chair.
Representation 2: the sofas had the best recliner on the market
Mr Sparrow stands by his claim that the recline mechanism is of a very high quality. While the Matthews submit that plastic covers came off near the recline mechanism, they did not suggest that it affected the recline mechanism. It does not follow that the loss of these covers has rendered false Mr Sparrow’s statements.
I find the claim that the Respondents misrepresented the quality of the recline mechanism is not made out.
The claim on this ground is dismissed.
Representation 3: the sofas were German engineered
Mr Sparrow denies he said the sofas were German engineered. He said he told the Matthews they were German designed, and did not refer to where they were engineered or manufactured. Ms Matthews said she checked the websites of both Inspirations and Domicil, which both make reference to “German design”.
Mr Sparrow said that people sometimes presume furniture is of a particular origin because of its brand name. He gave the example of Moran Furniture, which people assume is made in Australia because it is an iconic Australian furniture brand, but is actually made in China. I agree that this is a similar situation. There is no evidence of any reference to “German made”, “German engineered” or “German manufactured” in Domicil material provided by both parties, and Mr Sparrow’s testimony against this allegation was compelling.
Dr Matthews submitted that, as Domicil’s German designer Hans Hopfer died in 1998 and the Domicil brand has been owned by Singaporean company HTL since 2005, it was misleading to use the phrase “German design.” There was no evidence led by the Matthews that their sofas did not incorporate “German design”. The death of Hans Hopfer and the purchased of Domicil by HTL does not lead one to the conclusion that German design is not still incorporated in Domicil furniture.
This representation does not neatly fall within any of the categories in s 29(1)(a) unless the Matthews intended to submit it as a misrepresentation as to standard or quality. If this is correct, I find the claim that the Respondents misrepresented the German origin of the sofas is not made out.
The claim on this ground is dismissed.
Representation 4: the sofas were made of genuine Australian leather that is not bonded or split, has no coatings or finishes, is dyed all the way through using environmentally friendly tanning processes; is entirely safe for the family
Mr Sparrow says that his representation that the leather was genuine and not split has been confirmed by testing conducted by LASRA which found it is genuine BZ grade semi-aniline leather, and not bonded or split.
Mr Sparrow said he had no reason to say that there was no top-coat on the leather because the Matthews never asked him this. The Matthews provided no evidence that the tanning process was not environmentally friendly, or that the sofas were unsafe.
The Matthews did not detail which aspect of s 29(1)(a) was contravened by this alleged misrepresentation, and I am unable to make a sensible connection between their claims and that section.
The claim on this ground is dismissed.
Representation 5: the sofas were made of Australian leather that had been independently certified by Furntech when they were not.[26]
[26]On this point, the Matthews’ submissions refer to a breach of s 29(1)(b) with respect to the “grade and certification” of the leather. Section 29(1)(b) applies only to services, so I have assumed they intended their claim on his issue to be under s 29(1)(a).
Mr Sparrow says his reference to the sofas being certified by Furntech was an error, and in any case was made months after the Matthews purchased their sofas. An email dated 7 March 2014 from Mr Sparrow submitted by Dr Matthews supports this assertion.
A misrepresentation made three years after purchase could not have influenced the Matthews to purchase the sofas. No loss or damage would have flowed from the misstatement.
The claim on this ground is dismissed.
Claim 4: s 29(1)(i) – false or misleading representations with respect to price
Section 29(1)(i) ACL prohibits false or misleading representations about the price of goods or services. The Matthews say the Respondents have breached this by representing that the Domicil sofas were the “best high-end lounge money could buy”. They say the total price of $14,300.00 was high compared to other leather furniture they had bought.
I am not persuaded that the alleged representation was a breach of s 29(1)(i). That section applies to situations in which a price quoted turns out to be different from what was advertised or quoted.[27] This is not the case here. The statement the Matthews’ allege breached s 29(1)(i) applies to quality rather than price.
[27]Darwin Bakery Pty Limited v Sully (1981) 36 ALR 371.
The claim under s 29(1)(i) is dismissed.
Claim 5: s 29(1)(k) – false or misleading representation about place of origin
Section 29(1)(k) ACL prohibits false or misleading representations concerning the place of origin of goods. The Matthews say the Respondents have breached this by representing that the Domicil sofas were manufactured in Germany from Australian leather when they were in fact made in China.
Mr Sparrow denies saying anything other than the sofas were German designed. The Matthews submit only their recollection of the conversation to support their allegation, and recall that they viewed both the Domicil and Inspirations websites, which, according to Mr Sparrow, referred only to German design. Nothing in the evidence before me shows that Mr Sparrow used the words “manufactured in Germany”, “engineered in Germany” or “made in Germany” to the Matthews when they purchased their sofas.
Mr Sparrow said that the leather on the Matthews’ sofa would comprise Australian leather, but could also contain leather from South America. There was no evidence tendered by the Matthews to prove their assertion that the leather on their sofas was in fact Chinese. It appears to be an assumption on their part given that their research has shown that the owner of the Domicil brand, HTL, is a Singapore-based company who uses tanneries based in China. The Matthews provided no evidence as to how Mr Sparrow’s purported representations failed to meet the requirements in Part 5-3 ACL as to country of origin.
The Matthews provided no evidence other than their own belief that the furniture was held out to be made in Germany or the leather tanned in Australia. The Office of Fair Trading, after an inspection on 23 June 2015 precipitated by a complaint from Ms Matthews, found that there were no representations about country of origin. Ms Matthews said she took it upon herself to visit to Domicil website after paying the deposit. Printed pages of that site were submitted as evidence. There is no reference to “made in Germany”. There is simply no evidence to support the claim.
The claim under s 29(1)(k) is dismissed.
Claim 6: s 29(1)(m) – false or misleading representation about a warranty
Section 29(1)(m) prohibits false or misleading representations concerning the existence, exclusion or effect of any warranty. The Matthews say that Mr Sparrow told them the Domicil sofas had a 10 year unlimited warranty when in fact only the frame had a 10 year warranty. They said they discovered after purchase that the warranty on the leather was two years.
Mr Sparrow denies saying the Domicil sofas had an unlimited 10 year warranty. He says nothing in the store at the time of purchase would have represented an unlimited 10 year warranty. He says he would not have said Domicil has a 10 year guarantee on leather because no manufacturer offers such a warranty.
The Matthews provide no evidence of their assertion of the 10 year unlimited warranty other than their recollection, and there is nothing to persuade me that their recollection is better than Mr Sparrow’s.
The claim under s 29(1)(m) is dismissed.
Claim 7: s 33 – Misleading conduct as to the nature of goods
Section 33 ACL prohibits a person from engaging in conduct that is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose or the quantity of any goods.
The Matthews claim the Respondents have breached this section because they falsely represented that the leather was “genuine natural Australian leather that was not bonded or split, without coatings or finishes”, and “dyed all the way through the hide using an environmentally friendly tanning process”, and is “entirely safe for the family.”
The LASRA tests show it was genuine, natural, semi-aniline leather that was not bonded or split. There is no evidence Mr Sparrow said it was 100% Australian leather. There is no evidence that the tanning process is not environmentally friendly. There is no evidence that Mr Sparrow said it was “entirely safe for the family,” and even if he did, there is no evidence that the leather was not safe for the family.
I find that there is no evidence to support the conclusion that the Respondents engaged in conduct that was liable to mislead the public generally or the Matthews specifically on any of the bases of s 33.
Claims outside QCAT’s jurisdiction
The Matthews’ submissions relating to alleged breaches of ss 102, 136 and 192 ACL are a matter for the regulator and beyond QCAT’s jurisdiction. I make no findings on those claims.
Summary of Findings
In contravention of the guarantee as to acceptable quality in s 54(1) of the ACL:
a) the two ‘Capitol 2.5 seater sofas with electric action’ purchased by Matthews were not durable, and the leather became unacceptable in appearance and finish within an unreasonable time. The failure to comply with the guarantee was a major failure; and
b) the plastic covers attached to the recline mechanisms were not durable. The failure to comply with the guarantee was not a major failure and can be remedied.
In contravention of s 29(1)(a) of the ACL, Mr Sparrow made a false or misleading misrepresentation that the two 2.5 seat sofas were of high quality and superior to a Rubelli.
There is no basis to the Matthews’ claim under s 54(1) insofar as it relates to the ‘Capitol 2 seater fixed’ and the ‘Capitol fixed chair’.
There is no basis to the Matthews’ claim under s 29(1)(a) of the ACL insofar as it relates to the ‘Capitol 2 seater fixed’, the ‘Capitol fixed chair’, and the ‘Capitol 2 seater with electric action left hand’.
There is no basis to the Matthews’ remaining claims with respect to s 29(1)(a) of the ACL.
There is no basis to the Matthews’ claims with respect to ss 29(1)(i), 29(1)(k), 29(1)(m), 33 and 55 of the ACL; and
QCAT does not have jurisdiction to hear the Matthews’ claims under ss 102, 136 and 192 of the ACL.
Recoverable Damages
A person may claim to recover the amount of loss or damage by action against a supplier if that loss or damage arises because of a contravention of Chapter 2 or 3 of the ACL.[28]
[28]Section 236, ACL.
The Matthews may recover the purchase price of the two 2.5 seat sofas as a loss arising from breaches of ss 29(1)(a) and 54 of the ACL. They may also recover the fee payable to the Leather Doctor for the report dated 11 January 2015, which helped to substantiate the claims made under ss 29(1)(a) and 54, and the application fee to QCAT.[29]
[29]Section 102(2) QCAT Act; Rule 83 QCAT Rules.
The fees related to chemical testing by UNSW relate to claims before this Tribunal that were not successful and are not recoverable. The claim for $1,560.00 to wrap and dispose of the sofas is also not recoverable as it is not a loss incurred by the Matthews.
Orders
For breaches of ss 54 and 29(1)(a) of the ACL, the Tribunal orders that—
a) The Fourth Respondent pay to the Second Applicant $7,994.60 within 28 days of this Order, being:
i)Refund of the purchase price of two Domicil brand ‘Capitol’ 2.5 seat lounges with electric action ($7,600.00);
ii)Reimbursement of the fee payable to the Leather Doctor for testing on 11 January 2015 ($100.00); and
iii)QCAT filing fee ($294.60);
b) The Fourth Respondent collect the two 2.5 seat sofas from the Second Respondent’s home at a mutually convenient time, but in any case no later than 15 April 2016; and
c) On written request by the Second Respondent, the Fourth Respondent reaffix the cover over the recline mechanism of the ‘Capitol 2 seat sofa with electric action left hand’, or if the original cover is broken or cannot be found, that the Fourth Respondent arrange for a replacement cover to be so affixed within 60 days of the date of the request;
The Applicants’ claims with respect to ss 29(1)(i), 29(1)(k), 29(1)(m), 33 and 55 are dismissed; and
No Orders are made with respect to the Applicants’ claims under ss 102, 136 and 192.
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