Printworks Clothing Company v Game Dude Computers Pty Ltd
[2013] QCATA 155
•22 May 2013
| CITATION: | Printworks Clothing Company v Game Dude Computers Pty Ltd [2013] QCATA 155 |
| PARTIES: | Mr Bernard Sherman trading as Printworks Clothing Company (Applicant/Appellant) |
| v | |
| Game Dude Computers Pty Ltd (Respondent) |
| APPLICATION NUMBER: | APL122-12 |
| MATTER TYPE: | Appeals |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Hon John Jerrard, Member |
| DELIVERED ON: | 22 May 2013 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. That leave to appeal is granted. 2. The appeal is allowed. 3. The orders made on 28 March 2012 are amended by deleting the amount of $6,918.00 and inserting instead the amount of $5,500.00. |
| CATCHWORDS: | APPEAL – LEAVE TO APPEAL – MINOR CIVIL DISPUTE – where clothes purchased by respondent from the applicant – meaning of merchantable quality Sale of Goods Act 1896 (Qld) |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).
REASONS FOR DECISION
This matter is an application for leave to appeal or appeal, and for an application to stay, orders made by this tribunal on 28 March 2012. The applicant is Bernard Sherman, trading as “Printworks Clothing Company” (“Mr Sherman”), and the respondent is Game Dude Computers Pty Ltd (“Game Dude”). The challenged orders require that Game Dude return “all of the goods” provided by Mr Sherman (to Game Dude) to Mr Sherman, and that Mr Sherman pay the sum of $6,518.00 to Game Dude. Those orders resulted from an application filed on 6 October 2010 in this Tribunal, by Game Dude, asking for orders for the repayment of $6,477.90 by Mr Sherman to Game Dude, the payment of a further $1,000.00 by Mr Sherman to Game Dude, and the payment of Game Dude’s filing fee ($92.00), totalling in all a claim for $7,569.90.
The claim filed that date (MCD2849-10) described how on 28 September 2009 Game Dude had paid $6,477.52 for 260 shirts with a digital print on the front and rear, obtained from the Print Works Clothing Company. The claim filed as MCD2849-10 contended in the claim form that Mr Sherman had assured “Latoya” (Latoya Bussinius, the General Manager of Game Dude) that the digital print would last a few years; however, within 3 months, the digital print “showed severe signs of fading, some becoming completely unreadable.”
The application in 2849-10 asserted that “Latoya took some of the fading shirts in to see Bernie who was shocked. He said that ‘it must have been a bad batch of inks.’ He took some for testing and repeatedly washed shirt he had of his own from the same batch, with the result being NO fading. Latoya stated that every single shirt is fading regardless of who is washing it. All 20 Staff members reported severe fading on their shirts. Bernie insisted that this is not common and not correct and he would get to the bottom of it. Months passed with the same thing being said until Bernie took some shirts to have the logo reprinted over the top of the existing logo. They have also faded. The produced can not be used. None of the shirts digital print has lasted longer than 5 washes without noticing some fading, with total or near fading after approximately 6 weeks of normal wear and washing. Game Dude was not provided with any specific washing instructions. Game Dude was informed not to iron the print directly. Several attempts have been made to rectify this situation with ‘Bernie’ stating that it is his ink suppliers fault not his. This is not for Game Dude to chase up.”
The claim filed on 6 October 2010 had been signed on the 5th page on 15 September 2010, and annexed a copy of an invoice dated 28 September 2009, for $6,477.90, in respect of the supply of 260 shirts (200 men’s, 60 women’s), with digital logos on the left hand side chest pocket, and across the back. It also annexed various emails that disclosed that on 19 May 2010 Game Dude had returned 4 shirts to Mr Sherman, to demonstrate what was described as “the fault” and “possibly correct the discussed issues of fading on the print, front and back.”
The claim annexed an email from Game Dude on 6 September 2010, which relevantly read:
“At the end of the day we have ordered and paid for a product that is faulty, the shirts you re-printed have also faded… it does not last and is unacceptable. The shirts fade at different degrees for different staff members. Staff members use a variety of washing powders with all of them eventually achieving the same result. Some notice fading within the first 3 washes, some it takes a month, but it still happens. When we ordered the shirts Bernie told me that the print would last years (referring to the print he had on his own shirt), I would expect fading after 6 months but not instantly. We received no care instructions with the product other than what was on the tag of the shirt which refers to the washing of the shirt, not the digital print applied to the shirt. Bernie acknowledged that his fading was ‘odd’ and he does not commonly see it and proceeded to tell me that he thinks it was a bad batch of inks.”
That email was dated before the author (Latoya Bussinius) had completed the complaint to QCAT (dated 15/9/2010). On 28 September 2010 Mr Sherman sent an email to Latoya Bussinius, which said in part:
“… I have spent many days and weeks investigating the problem, I have washed numerous samples of the product and so has the supplier and importer.
The product is named Digitex and is used all over the world, it was originally developed by Adidas and is used by numerous sporting companies on their garments. On doing a Google search worldwide and in consultation with our supplier and importer, it seems you and your staff are the only ones having a major problem so obviously you are doing something wrong. I have no idea how you are washing the garments as I get no feedback from you only threats and abuse, I have verbally told you how to wash them and certain brands not to use but still no feedback from you.
I personally washed 1 one of your shirts 15 times with no evidence of any fading at all, and I give it to you and you say it started coming off immediately. So it’s obvious what that tells you.
We have replaced these logos free of charge and still have garments here to apply more logos but that seems pointless unless you change the way you are washing them. Just so there is no confusion here are the washing instructions.
Wash in cold water.
Do not Iron the print.
Do not use bleach.
Do not tumble dry.
Use the recommended dose of powder or liquid.
Do not use Fabric Softener.
Contains bleach).
Do not use Fab, Duo or Spree.I strongly suggest you do a thorough assessment of how you are washing the garments including how much powder they are using compared to the manufacturers recommendation and then supply us some feedback.”
That resulted in an email reply, dated 30 September 2012, in which Ms Bussinius wrote:
“I find it hard to believe that out of 20 staff every single one of them are washing the shirts incorrectly. As to the newly found information, it is the case of too little too late. We were not provided with these washing instructions when we received the shirts. So even if we were all washing the garments incorrectly (which I find clearly impossible to believe) it is not our fault for doing so as we did not know what could be damaging to the product.
I also find it highly unlikely that out of all the people worldwide the product is supplied to (which you state is a lot based on your research we were the only people worldwide to having such a major problem) that our variety of washing methods are the cause of the problem. If it were us washing the shirts that are damaging the product, with commonly found washing products such as Omo and Spree and Drive, with the amount of people that purchase these products and the quantity of the digital print being worldwide it is obvious to think that if the issue were a simple as detergents used causing the problem that Game Dude would not be alone! Not only that, the detergents you have listed are within the top 5 selling laundry detergents sold in Australian Super Markets.
If our staff are not meant to use these products then what products should we be using? If we are meant to be using a special order product shouldn’t it not be supplied with the shirt? If we are not meant to be using these products shouldn’t we have been told about this a YEAR ago when the shirts were received. If I’d known about these issues back when making the original order there is no way that we would have gone ahead with the order.”
It appears that the complaint to this Tribunal was filed shortly after this email was sent. In this Tribunal the matter was listed for mediation on 2 December 2010, which proved unsuccessful, and for a hearing date on 18 January 2011. On that date it was heard by an Adjudicator in this Tribunal (“the first Adjudicator”). Ms Latoya Bussinius appeared as representing the applicant company, Game Dude Computers, and described herself as the General Manger; and Mr Bernard Anthony Sherman appeared for the respondent, describing himself as the “Proprietor of the business”.
The first Adjudicator required that the parties be sworn (Ms Bussinius was “sworn by affirmation” and Mr Sherman was “sworn by oath”),[1] but despite having required both representatives to give evidence on oath, the Adjudicator conducted the proceedings in a rather inquisitorial fashion; that is, the first Adjudicator asked questions of firstly Ms Bussinius (pages 2-10 of the transcript) and then of Mr Sherman (pages 10 through to 22 of the transcript of 18 January 2011), and thereafter Mr Sherman and Ms Bussinius each spoke to the Adjudicator (pages 22 – 24); and the transcript records that at pages 24 to 34 inclusive, the learned Adjudicator gave an ex tempore set of reasons for the orders ultimately made at page 33. The learned Adjudicator did not invite either party to examine the other, although Mr Sherman had the opportunity to respond to what Ms Bussinius had said to the first Adjudicator, and did, in some detail.
[1] As recorded at page 2 of the transcript of the hearing of 18 January 2011.
The first Adjudicator established from Ms Bussinius that she said a contract was made between Game Dude Computers and Print Works Clothing Company on 2 December 2009, when the company purchased what she had first described as “about 200 shirts,”[2] which shirts she said were to have a digital print on the front and on the rear; on the front on the pocket on the left-hand side and across the back shoulders of the rear of it. The rear was to have the company’s website and the front was to just have the company’s name and the company logo.[3] She described how she was the person who originally contacted Mr Sherman’s premises, speaking over the phone with a “clothes service representative”, who provided her with a link to the manufacturers’ website to choose from a different variety of shirts. She then went down to the Print Works premises in person, and provided the digital image she wanted printed, established the costs, and said “fine, that’s fine, we’ll just get that.” She also described being given a “proof copy” of a shirt and thought it “looked fine”, and said she had gone down to “the office” to see that, and that was when she paid the deposit.
[2] At page 3 of the transcript of 18 January 2011.
[3] Also at page 3 of the transcript of 18 January 2011.
Her reference to a deposit was to the invoice annexed to her application filed in this Tribunal, which was an invoice dated 28 September 2009 for 260 shirts, for a total price of $6,477.90. That invoice recorded that on that day $3,114.38 was paid, leaving a balance owing of $3,363.52.
The transcript reveals that Ms Bussinius became a little confused at that stage, when she was herself looking at a copy of that invoice, because she then told the first Adjudicator that the purchase was of “a little over 700 shirts”[4], and she then invited the first Adjudicator to “ask Bernie to clarify”.
[4] Transcript at page 5 of 18 January 2011.
She produced 3 shirts as exhibits. Exhibit 1 was a shirt as supplied to Game Dude, apparently in good condition and unused, exhibit 2 was “my own personal one, it didn’t suffer as badly as the rest of them because at the time I was only working 1 day per week, so the wear and wash probably wasn’t as frequent as the other staff, but it’s still pretty clear.”[5] Exhibit 3 was described by Ms Bussinius as a shirt which was “an example of fading and just deteriorating” which she said wasn’t the “worst” of the shirts, because the “real severe ones I have returned to Bernie.”[6] Ms Bussinius repeated to the Adjudicator that exhibit 3 was not the worst example of the shirts failures, and in the worst ones the digital print had “faded to white, and could not be read”.[7]
[5] At page 6 of the transcript of 18 January 2011.
[6] At page 6 of the transcript of 18 January 2011.
[7] At page 6 of the transcript of 18 January 2011.
Further questioning by the first Adjudicator established that the shirts had been collected, with the printed logos, on 4 November 2009, and Ms Bussinius told the first Adjudicator that the digital printing on the shirts was starting to fade by the end of December 2009. In answer to the first Adjudicator, she said:
“Yes, some of them were starting to fade (by December 2009) but not every single one of them did and mine wasn’t fading so bad because I was only wearing it once. I originally thought maybe they are washing them incorrectly or something, they’re just destroying their own shirts of something like that, but come about January when every single person’s, even my own, had faded, that’s when I started to do a couple of tests with my husband’s shirt. He also works there and I would wash his a couple of days and once I even noticed a very slight difference after just one wash and that was when I came to the conclusion that no, it can’t be just that every single staff member I have is washing them incorrectly. It can’t be just that. It must be something else as well.”[8]
[8] This is at page 8 of the transcript of 18 January 2011.
Her statements to the first Adjudicator included that was when she made contact with Mr Sherman. She described some continuing contact between herself and Mr Sherman, over the quality of the printing on the shirts and the explanation for their fading. Ms Bussinius told the first Adjudicator that after some weeks Mr Sherman had told her, “Well, we’ve washed one of your shirts 20 times and we can’t see one little bit of fading” and she went on “then he tells me he uses a special type of washing powder that you can only get wholesale that you can’t buy from the supermarkets and that he’s seen a lot of other shirts throughout his career be degraded by bleaches and other things that are in washing powders.” She went on (at page 9):
“There’s no problem with the shirt. I’m sure if you even look at the brand new shirt to the really worn shirts, the black colour of the shirt is still very good. The washing powders or the way my staff are washing their shirts does not seem to be affecting the colour that’s on the shirt in the material. It’s only the print that’s suffering and I asked a number of my staff how they were washing their shirts. I sent out a little survey and they’re all doing it differently. Now the only washing instructions we were provided with were on the label of the shirt which says, “Cold wash, line dry in shade”, very basic cotton instructions.
We didn’t receive anything specific for the ink but it’s pretty straightforward. You don’t iron those types of prints and we haven’t had an issue with that yet. All my staff, some were washing them in cold water. Some were washing them in warm water and they’re all using different types of laundry powders and detergents, yet they’re all coming up with the same result.
It was at this point that Bernie agreed to take some of the shirts back and see if he could reprint the logo over the top of the existing fading one and see if that was any better – from a different batch of ink, not from the same, from a different one, so if it was the ink that should eliminate the problem. Within a couple of weeks we had the same problem again, so I don’t understand why it’s happening.”
She added in response to further questions that:
“I wasn’t honestly expecting it to last 12 months per shirt. It is a print and I would have expected it to fade but I think three months is unacceptable. If they had lasted nearly a year I would go, ‘Yes, that’s fine.’ After a year you’d expect it to look like that, being quite worn, but not over that short amount of time, especially not after Bernie had referred to his own print on his own shirt of lasting years.” (At page 10)
The Adjudicator then asked Mr Sherman what he had to say, and the latter replied:
“I’d just like to correct some of the facts first. For a start it was not 600 shirts but 260. It’s on the invoice. If you look at the invoice it’s on there. That’s the problem. The facts have been distorted all through this.”
Ms Bussinius is recorded as having referred to 700 shirts, not 600, but the correction by Mr Sherman was accurate, as the Adjudicator accepted, after referring to the invoice, which clearly described 260. Mr Sherman then explained that what he did was apply a digitally printed logo supplied by a supplier, and he pressed it on to each shirt. Mr Sherman also referred to a shirt on which he had actually done, (at page 11):
“15 washes and no problem whatsoever. It wasn’t some special detergent. It was just a detergent from Amway which is freely available to anyone. We then gave it a few more washes with I think it was Cold Power and that didn’t seem to make any different to it.
I gave it back to Latoya and Latoya washed it and said it was coming off first wash, so whatever she was doing, I’ve got no idea and I’ve been asking her all through those emails to tell me what they’re doing, exactly how they’re washing it, because we’ve issued them instruction since, which we probably didn’t issue properly in the first place, but after we knew there was a problem we told her what not to do and what to do, cold water etc, it’s all in the emails.”
Mr Sherman then told the first Adjudicator how he had reapplied logos to 6 shirts which had faded logos “and sent them back to her, so they were like new again just like you have got there and we can keep doing that.” The reference to the “new” shirts which the Adjudicator possessed was no doubt to exhibit 1. In later statements made by Ms Bussinius to the first Adjudicator, she contended that the shirts Mr Sherman had fixed and sent back had “faded”[9], but she did not have any of those shirts at the Tribunal.
[9] At page 16 and 17 of the transcript of 18 January 2011.
Returning to the statements made by Mr Sherman, he told the first Adjudicator (on 18 January 2011 at page 11) that:
“I’ve also sent some shirts which I have here down to a University in Melbourne that did an official wash test for colour fastness. The best one scored 4 out of 5 which they said is a very high rate, so I still don’t know how they’re washed. They won’t tell me. I’ve asked them on three occasions in those emails.”
He produced a copy of a report from the RMIT (Royal Melbourne Institute of Technology) which report became exhibit A, and which described that institute having washed 2 shirts on 3 occasions each; one with “Omo” and one with “Spree”. For 1 shirt (washed with Spree), the report recorded that there was no change to the print observed on the chest print after all 3 washes, but there was a “slight change of texture and sheen of print observed” after the third wash on the collar print; and with respect to the print on the back there was a “considerable loss of gloss on print. Print appears worn and abated. Grainy appearance and change to texture increased.” Regarding the second shirt, washed with “Omo”, once again no change to the print was observed on the chest printing after all 3 washes, a “slight change to texture of print observed” on the collar print, and for the back print, the “white gloss coating on surface appears thinner” was recorded.
At that hearing on 18 January 2011, it emerged in exchanges between Mr Sherman and the first Adjudicator (with Ms Bussinius occasionally interjecting) that the shirts sent for testing were both “fixed up” ones, which I understand to mean were shirts on which Mr Sherman had reprinted the requested logo, after having the shirt returned to him by Game Dude Computers.
The first Adjudicator caused exhibit 3 (a shirt with faded printed logos) to be handed to Mr Sherman during the hearing, and the Adjudicator asked “that product has failed hasn’t it” and Mr Sherman replied “yes”.[10] After that exchange, the first Adjudicator referred to the document which became exhibit A, the report from the Royal Melbourne Institute of Technology in Victoria, dated 18 October 2010. After establishing that the tests had been conducted on “fixed up” shirts, the first Adjudicator and Mr Sherman had the following exchange:
[10] At page 13 of the transcript of 18 January 2011.
“ADJUDICATOR:
…they didn’t test the product that the applicant bought. They tested a fixed up product.
MR SHERMAN:
So does that make any difference? I can fix all these up but they keep washing them the way they’re doing, it’s going to happen again and I don’t know how they’re washing them because they won’t tell me and that’s the whole point of the matter, how are they washing them, who knows?”[11]
[11] At page 14 of the transcript of 18 January 2011.
Soon after the following exchange occurred (at page 14):
MR SHERMAN:
I even did a Google search to see if I could find somebody else in the world having this problem; couldn’t find anything.
ADJUDICATOR:
Mr Sherman, that’s not an answer. You’ve provided someone with a shirt and you and I have agreed that Exhibit 3 has failed?
MR SHERMAN:
Yes, but for what reason, that’s the point? Surely if they don’t follow the washing instructions that I give them, then it’s irrelevant why (sic – probably whether) I gave them washing instructions in the first place because I’ve given them washing instructions since. I can restore the shirt with the print back to original. I’ve got one here and so that fixes all the shirts they’ve got and out of these 260 shirts all we’ve had returned is 20, 20 shirts, and she’s claiming all this money, $1,000 for this and $6,000, wants all the money back for the shirts. All we’ve got back is 20 shirts, so I suspect that there are heaps of shirts there that haven’t had this problem. Why haven’t I got them back? We know from our tests that if you wash them in hot water or you use excessive detergent or if you put it in a clothes dryer that it will definitely make it come off.
There then followed exchanges between the first Adjudicator, Mr Sherman, and Ms Bussinius, from which it appeared that Mr Sherman contended that he had advised in writing washing instructions (on 28 September 2010) and verbally, which instructions he gave in “early 09” (which date would be incorrect, since the applicant Game Dude only contracted to buy the shirts in late 2009).
The exchange of information between Mr Sherman and Ms Bussinius, about the time of the contested date of receipt of oral washing instructions, resulted in the first Adjudicator saying to Mr Sherman “Listen it’s not conversational, you’re talking to me.”[12] Then followed the following exchange between the first Adjudicator and Ms Bussinius, which identified a critical issue in the matter. It was:
[12] Page 15, transcript of 18 January 2011.
MS BESSINIUS:
I do have the surveys that my staff filled out stating all the different methods of the variety of washing.
ADJUDICATOR:
But they probably did tumble dry them, didn’t they?
MS BESSINIUS:
Some of them probably did.
ADJUDICATOR:
Well, it’s a work shirt.”[13]
[13] Also at page 15, transcript of 18 January 2011.
Mr Sherman, for his part, said, immediately after the last quoted exchange between the first Adjudicator and Ms Bussinius, that:
“The point is we can fix these and if they follow the instructions they won’t have a problem. I can’t see how they can have a problem. We’ve done it for hundreds of other people and they haven’t had a problem. We’ve got a Soccer Club who have worn the jerseys all season. They hand them out to a different parent every week to take them home and wash them, so they’ve got all sorts of washing going on. Probably some of them are putting them in the dryer even, I don’t know, and they haven’t had a problem. They’ve even re-ordered them.”
The first Adjudicator then put to Mr Sherman, inter alia, “we’ve got a product here that you agree with me has failed.”[14] To which Mr Sherman replied:
“But even if it’s failed it hasn’t failed for me because I’ve washed them myself. Even our supplier has washed the same garment themselves and had no problem until they either put it in hot water or they increased the amount of detergent.”
[14] At page 16 of the transcript of 18 January 2011.
He added, “I think it’s a very simple matter. We can repair these. We can replace the logos. I’ve got one here if you’d like to have a look at that, that’s been replaced and, if they wash the thing correctly, as was said, they won’t have a problem. If they do after that, well it’s another matter.”
The first Adjudicator then established from Ms Bussinius that the company had a staff numbering of about 20, and had bought 260 shirts to have plenty in stock for staff changes in the future, and that the staff were now predominately using old shirts used prior to the purchase of the shirts from Mr Sherman, which old shirts were about 9 years old, stretched out of shape and faded, and that Mr Sherman had replaced the logos on 6 shirts, which “have faded” (at page 16).
That then lead to a debate between the first Adjudicator and Mr Sherman as to the significance of the wording of the report from the RMIT, and information that with respect to 1 shirt, that the print, after the third wash, showed “considerable loss of gloss on print. The print appears worn and abraded. Grainy appearance and change to texture increased.”
As to that, Mr Sherman contended that the RMIT were “using washing powder that we recommended they don’t use”, being Spree, but the first Adjudicator replied, “That’s just available from the shop” and that “They’re entitled to use that. It’s a product that’s got to be useful by people in the marketplace.”
Further discussion then lead to the following statement by the Adjudicator:
“If you shirt fails for whatever reason, other than obvious malicious damage, your shirt should be able to be used in the ordinary course of being a shirt and be washed by someone’s mother, parents, wife, whatever, without having to be treated like kid gloves. This is a work shirt.”
Mr Sherman responded:
“So washing instructions are meaningless then in this society, totally meaningless; that’s what you’re saying?”[15]
[15] This passage occurs at page 19 of the transcript of 18 January 2011.
The first Adjudicator replied:
“Well, I’m saying that a product that you sell into the market must be good for the purpose for which it was intended. You know this is a work sheet that a person who works in a business is going to wear, come home, have washed and put one on again the next day. You must sell thousands of them.”[16]
[16] At page 20 of that transcript.
Mr Sherman soon after added:
“So it’s a contract in a verbal sense when they place the order but washing instructions I give verbally are not a contract, not part of that contract, and surely I’m entitled to give washing instructions so that these things will last and I know they last if you wash them the way I’ve told them to and I did tell them in a verbal manner and I know it’s your opinion that they should be able to use Spree.”[17]
[17] Page 21 of the transcript.
The first Adjudicator then expressed the view that “You’re selling a workman’s shirt”; and that a person who bought a work shirt “wouldn’t walk up and down the aisle thinking hang on a minute, that’s on sale but I think I’ve got a shirt somewhere where you don’t use it (referring to a contention by Mr Sherman that if he told the purchaser that “Spree would probably make that last less longer than it should, would you use it?”) The first Adjudicator and Mr Sherman then had the following exchange:
“ADJUDICATOR:
It would be very different if they were thinking about their own silk shirt, scarf, or cashmere jumper. That would very different. They’d be going, ‘Hang on a minute, I’m going to be very careful here.’ This is a workman’s shirt. It’s meant to be tough as nails and you know it. You sell these things into the market.
MR SHERMAN:
It’s not a work shirt.
ADJUDICATOR:
Didn’t you think this would be a work shirt?
MR SHERMAN:
That’s not a work shirt. Work shirts are like King Gee stuff. That’s a work shirt. These are just fashion shirts. They bought them as a work shirt and that’s their prerogative. They can treat them as a work shirt but they’re not a work shirt. It’s a fashion shirt.
ADJUDICATOR:
It’s got the name of their business on it hasn’t it?”[18]
[18] This passage appears at page 21 of the transcript of 18 January 2011.
Soon after this the Adjudicator and Mr Sherman discussed the contents of the RMIT report Mr Sherman had produced. The Adjudicator referred to the report which describes the use of the detergent Omo, and the statement that after the third wash the “white gloss coating on surface of print appears thinner,” and the shade change was recorded as 4, which the Adjudicator interpreted as meaning that the print had lost “20% of its shade in 3 washes.” The Adjudicator added, “That’s the good one. The bad one (i.e. the RMIT report on the use of the detergent Spree for 3 washes) says that, there is considerable loss of gloss on print. Print appears to be worn and abraded. Grainy appearance and change to texture increased. And it has lost 40%” (The reference to 40% was the Adjudicator’s then interpretation of the shade change (from 5 to 3).
Mr Sherman objected to the way the Adjudicator was reading the document, and said:
“They told me 4 out of 5 is a very good result.”
To which the Adjudicator responded, “It’s not saying that to me.”[19]
[19] Page 23 of the transcript of 18 January 2011.
Mr Sherman’s last contention to the Adjudicator was to this effect:
“Well, it boils down to whether you think I’m allowed to repair them or whether I can advise you and whether you should legally take notice if I tell you how to wash them and what will make the print last. That’s what I’m saying is how to make the print last. Now I know how to make the print last and it’s got a hell of a lot of options there. Really there are three basic ones - don’t use hot water, don’t use excessive detergent and don’t put it in the tumble dryer - and it will be fine, regardless of whether you use Spree or whatever. It will probably last longer if you use OMO. Have you ever seen the difference between the price of Spree and Omo?”[20]
[20] At page 22 of that transcript.
After a short adjournment the first Adjudicator gave an ex tempore judgment in the matter, describing Ms Bussinius as having “given evidence on oath in this matter,” and saying:
“I want to remark at this moment that this matter is exacerbated by the enormous amount of product which has been bought. The applicant has some 20 retail staff but has bought some 10 shirt or more each and, because of that, the figures are of course multiplied. Ms Bussenius said to me that she buys in bulk because she has staff turnover and also because she gets a better price.”
The first Adjudicator referred to exhibits 1, 2 and 3, and of the latter (exhibit 3), and said:
In my opinion Exhibit No 3 is severely degraded. It appears to be fraying at the corners. It is quite clearly faded from the original which is Exhibit 1 and frankly appears to be falling apart. I don’t believe that Mr Sherman disagreed with me that that product was failing. (The first Adjudicator was obviously referring to the print on the logos on the front and back of that shirt.)
The first Adjudicator then referred to what was described as “a variance in the evidence” given by the parties with respect to the washing instructions, and to Mr Sherman’s evidence that he gave oral directions with respect to washing procedures in 2009, and remarked that “it was not until September 2010 that it is clear that he has given instructions in writing with respect to washing.”[21]
[21] At page 26 of that transcript.
The first Adjudicator went on:
“I find that the shirts are still in perfect condition in my opinion. It is the logo or, lack of a better, the sticker which has failed. If this sticker as it is, and it appears it is, requires very special care with respect to its washing then such conditions must be made known to a user of the product in so obvious a fashion; that is by the affixing of a large red warning tag or other item that it is brought to their attention.”
The first Adjudicator had earlier remarked that in the absence of any other directions in respect to washing conditions, one must turn to the small tag which is included at the back of the garment, which does say “warm wash”, and “I’m assuming that means not hot wash and it also says do not tumble dry”. The conclusion the first Adjudicator came to[22] was that “I find in this case these goods which have been supplied are not of merchantable quality… It has failed and Mr Sherman agrees with me about that.” The first Adjudicator also held as follows (at page 27):
“There hasn’t been a total failure of consideration. The applicant herself has said that she thought had the shirts survived a period of 12 months without unreasonable degradation it would have been satisfactory. Well, the applicant has already had three of those months of enjoyment of the shirts that they used. The problem is that they didn’t just buy 20 shirts. They bought 260 of them, so the figures are enormous. In the case of breach of warranty the loss is prima facie the difference between the value of the goods at the time and the value that they would have if they’d answered the warranty.”
[22] At page 26 of the transcript of 18 January 2011.
The first Adjudicator referred to the fact that “the applicant is required to mitigate”, and that “the respondent has offered to reprint” (the faded labels), and after further discussion with the parties the first Adjudicator made orders as follows:
“The respondent has delivered goods not of merchantable quality.
The respondent shall reprint each shirt which fades within 12 months of commencement of use and is redelivered to the respondent by the applicant within 14 days.
The respondent will redeliver the shirts to the applicant at the respondent’s cost.
The respondent will issue washing instructions and the applicant will give same to each employee and record the date in a register.
In the event of a dispute between the parties the applicant may re-list this matter for the assessment of damages.”
The discussions preceding the making of those orders reveal that the first Adjudicator had intended that, if and when the logo printed on any shirt faded within 12 months of the commencement of use of that shirt, Game Dude Computers were entitled to return that shirt to Mr Sherman within 14 days of the ascertainment of the fact of the fading, and to have that shirt reprinted by Mr Sherman, and Mr Sherman was obliged to redeliver the shirts to Game Dude within 14 days at Mr Sherman’s cost, and to issue washing instructions which Game Dude was obliged to give to each employee, and record the date in a register. The objects declared by the first Adjudicator lying behind those orders were that “You get a product that works for 12 months” (addressing Game Dude), and “You make a product that works for 12 months” (addressing Mr Sherman). The first Adjudicator continued, “That’s the essence of the order.”[23]
[23] At page 33 of the transcript of 18 January 2011.
One of the difficulties in deciding matters in this Tribunal, at either first instance or on appeal, is that unrepresented parties can occasionally fail to identify critical points in issue. In this dispute, a critical issue of fact is whether or not Game Dude made known to Mr Sherman, prior to buying the shirts, the use to which Game Dude intended to put the shirts with the imprinted logos, which it bought from Print Works Clothing Company. That use was not explicitly described by Ms Bussinius in her evidence on 18 January 2011, nor in the application filed on 6 October 2010 by Game Dude, but it became clearer, in subsequent hearings of the matter in this Tribunal, that the purpose was to advertise Game Dude to potential customers, by having all staff wearing the same shirts emblazoned with the company’s logo and website, publicly displayed by each staff member. It is implicit in the first Adjudicator’s findings on 18 January 2011 (and comments and findings on subsequent occasions, to be referred to hereunder), that the first Adjudicator accepted that Print Works Clothing Company – and Mr Sherman – knew the purpose for which Game Dude Computers wanted to have new shirts printed with the logo and details of the company. Mr Sherman did not challenge at any time, orally or in writing, the assumption that he knew the purpose for which the shirts were required. He had a perfect opportunity to protest an absence of knowledge of the reason the shirts with the logos were required, when the first Adjudicator asked him in the passage quoted earlier “didn’t you think this would be a work shirt?” Accordingly, I am satisfied that on the evidence the first Adjudicator took a robust view, that was open to the Adjudicator, that the shirts (with their logos), were not of merchantable quality when supplied without adequate washing instructions. The Adjudicator thereafter tried to fashion orders that would mitigate the loss experienced by Game Dude Computers.
Those included the orders requiring Mr Sherman to issue washing instructions, and for Game Dude to give those to each employee, and record the date in a register. Those orders imposed obligations on both parties, and on 10 May 2011, Ms Bussinius applied by letter to this Tribunal to have the matter relisted. That letter contended that 12 boxes of shirts, containing 258 shirts, of various sizes, had been returned by Game Dude to Print Works on 5 April 2011, in accordance with the order made on 18 January 2011, resulting at first in a dispute between Mr Sherman and Game Dude Computers as to the number of shirts which had been returned. That dispute was evidenced in emails passing between the parties on and from 6 April 2011 until 19 April 2011, on which latter date Mr Sherman agreed that 250 shirts had been returned.
On 27 June 2011 the parties appeared before a second Adjudicator, and on this occasion Ms Bussinius again appeared for the company, and Mr Sherman appeared as “Proprietor of Print Works”. On this occasion neither party was sworn by the second Adjudicator. That second Adjudicator expressed the opinion that:
“I’m not satisfied that there has been a breach; as I say, leaving aside timing issues for the moment, that there has been a breach of the order that was made.”[24]
[24] At page 6 of the transcript of the hearing of 27 June 2011.
That second Adjudicator eventually ordered that the application (for a relisting) be adjourned for hearing by the “initial decision maker on a date to be advised,” and that occurred. The matter then came on again before the first Adjudicator on 2 August 2011, and on this occasion Mr Sherman appeared as “the owner” of Print Works Clothing Company, and a Mr Dorian Bussinius, describing himself as the Manager/Owner of Game Dude appeared for the company, the latter explaining that Ms Bussinius, who had appeared earlier, was “in studies at the moment”.
On 2 August 2011, the first Adjudicator did not require either Mr Sherman or Bussinius to be sworn, and conducted the hearing as before, in an inquisitorial style, hearing firstly from Mr Bussinius, then from Mr Sherman, then Mr Bussinius, then Mr Sherman, and thereafter from each of them, perhaps more from Mr Sherman than Mr Bussinius. The information given by the 2 persons appearing established that it took nearly 3 months for the company to return the shirts it had to Mr Sherman, and that Mr Sherman had returned the fixed shirts to Game Dude on 17 May 2011, 7 days after Ms Bussinius signed her letter requesting a relisting, and on the date this Tribunal actually received that request. It also transpired that Mr Sherman had not been given a copy of the letter dated 10 May 2011, requesting relisting, and was somewhat taken by surprise by the complaint made to the first Adjudicator on 2 August 2011, by Mr Bussinius, that the logos on the shirts returned by Print Works to Game Dude on 17 May 2011, had continued to fade at the same rate and in the same manner as the shirts about which the original complaints had been made, except for those which had the logos reprinted, which had not faded.
The information put before the first Adjudicator on 2 August 2011 (not on oath) included agreement that Mr Sherman had reprinted logos on about 30 of the shirts returned to him, and (for all of the unused shirts so returned) had attached to them a sticker with washing instructions, and then delivered them all back (that is, both repaired and unused, the latter with stickers) on 17 May 2011. Mr Sherman’s statements to the first Adjudicator included repeated statements that he had never been told how the shirts were being washed,[25] and he contended that some of the shirts returned (in April 2011), on which the logos were reprinted had actually expanded in size, so “the logo we originally did didn’t fit over it. In my inquiries to how a shirt could expand is apparently ironing which is another thing that will take the print of it if you iron the print. It’s the only thing that can expand it. Washing is likely to shrink it rather than expand it, so the print has actually expanded.” (At page 9)
[25] At page 8 of the transcript of 2 August 2011.
He added that he had to have the supplier supply Print Works with slightly larger prints, that had a thicker surface on the outside, and his staff have may have “just misaligned it when they did it”, referring to the complaint by Mr Bussinius (made orally on 2 August 2011, apparently for the first time to Mr Sherman’s knowledge) that some of the reprinted logos were misaligned. Mr Bussinius had produced a shirt which had been returned by Mr Sherman to Game Dude, without a reprinted logo, and accompanied only by washing instructions, and which had, Mr Bussinius contended, faded by (2 August 2011 the date of the adjourned hearing), after being issued to a staff Member on 25 May 2011. The statements made by Mr Bussinius explained that on that date (25 May 2011) approximately 40 shirts had been handed out to staff (returned shirts) which included both unused shirts with washing instructions, and previously faded, relabelled shirts without washing instructions.
The statements Mr Bussinius made to the first Adjudicator on 2 August 2011 reveal that he had not expected to be the person arguing the company’s case that day, and was only his wife’s unavailability that explained his appearance. In the course of the proceedings, he produced a document which purported to be signed by 15 members of the staff of Game Dude Computers, recording the acknowledgment by each staff member that washing instructions were provided to them with the Game Dude Computers Pty Ltd business shirts. The document was headed, before the individual signatures of the staff members, with a statement “I herewith guarantee to follow all washing instructions provided to us, for the lifetime of the shirts.”
There are 15 names typed on the document, which records the size, date on which the document was signed, and the signature of each staff member, plus that of Mr Bussinius, handwritten on the bottom. All staff members bar one received their shirt on 25 May 2011, with one receiving it on 26 May 2011. This means that the shirts were handed out to the staff, purportedly with washing instructions, about 7 days after Print Works Clothing Company had returned those shirts to Game Dude Computers Pty Ltd on 17 May 2011 (i.e. 7 days after Game Dude Computers signed the application to relist the matter).
Mr Sherman complained during the hearing that the document listing the acknowledgement of the receipt of washing instructions, and the promise to follow those, by each relevant staff member, did not describe what those washing instructions were. That submission was accurate, and although the first Adjudicator did ensure that Mr Sherman was given a copy of that document,[26] the document was not made an exhibit. Nothing really turns on that, because its contents make it clear that it does not include any description of the washing instructions actually given.
[26] This is recorded at page 33 of the transcript of the hearing on 2 August 2011.
Mr Bussinius produced to the Tribunal on 2 August 2011 2 shirts, which his statements revealed had been taken that day from staff members who had worn them that day to the premises of Game Dude Computers Pty Ltd, and his complaints about those were, in respect of one shirt, that it was a shirt which had been returned on 17 May 2011 to the company, and issued to a staff member on 25 May 2011 and that the print on the logos had faded. In respect of the second shirt, he described that as one with a new logo affixed to it, and he complained that that logo had been poorly aligned. The Adjudicator calculated that the shirt with the faded logo had faded after 2 months and 7 days, and established from Mr Bussinius that the latter claimed to have handed out about 40 shirts on 25 May 2011, and that he contended that:
“They’re pretty much all fading. There are slight differences in degrees.”
Mr Bussinius was unable to say how many of the 40 which had been handed out had misaligned logos, but said this was “quite a few” or “most of them,”[27] and also contended[28] that on the shirt or shirts where the print was misaligned, that the print did not actually fade when those shirts were washed and that:
“If you have a look it isn’t fading. Our issue is that that is defective repairs on that shirt which is what we’re arguing as well. The print isn’t fading yet the same washing techniques are being used, so our original argument was that the shirts were provided with defective print in the first place.
That was our original argument right from the start and I tried to prove that today by providing an original shirt that hadn’t been repaired and a repaired shirt which they’ve misaligned but the print quality is actually in good condition, so in my view I don’t think it’s the way the staff are washing them at all. Anything other than the original shirts all need to actually have been repaired in the first place. I’m not confident that actually was done because the alignment is clearly not something that the staff there are capable of doing.”
[27] Transcript of 2/8/2011 at page 9.
[28] At page 10 of the transcript of 2 August 2011.
For his part, Mr Sherman contended to the first Adjudicator that Game Dude were:
“Not washing the shirt properly.”[29]
[29] At page 4 of the transcript of 2 August 2011, and frequently enough thereafter.
Mr Sherman was shown by the first Adjudicator the 2 shirts which Mr Bussinius had produced, and agreed that one of them had substantially faded, and that with respect to the other, that the logo was “misaligned”.[30] On the other hand he said:
“I don’t think there would be too many like that.”
[30] This occurred at page 9 of the transcript of 2 August 2011.
He said this after he explained that:
Some of the shirts that have been washed have actually changed size. They’ve actually expanded, so the logo we originally did didn’t fit over it. In my inquiries to how a shirt could expand is apparently ironing which is another thing that will take the print off if you iron the print. It’s the only thing that can expand it. Washing is likely to shrink it rather than expand it, so the print had actually expanded. We had to go and have – and this is part of the delay also on fixing some of them – we had to have the supplier supply us with slightly larger prints that had a thicker surface on the outside. This one they may have just misaligned it when they did it but I don’t think…”
He was interrupted at that moment by the Adjudicator, and it is clear that he intended to continue with the observation that he did not think there would be “too many” like that.
Mr Bussinius summarised the company’s position as follows (at page 13):
“Our argument is that the original shirts are all fading. I haven’t handed them all out. They’re all going to fade because we’ve got plenty of examples here. The repaired units aren’t coming back on time as per the order.
And they’re coming back in a quality that I don’t consider professional. I certainly didn’t pay for a print to be put over a bad old print and misaligned like that.” (Presumably referring to the shirt handed to the first Adjudicator, with the misaligned print.)
In conversations between the Adjudicator and Mr Bussinius, the Adjudicator confirmed that the order made on 18 January 2011 had contemplated that Game Dude Computers did have to wash all the shirts, and have them fade, before returning them and having them repaired. Mr Bussinius complained:
“With all respect, that’s a bit ridiculous to wash every shirt that’s been put aside for future use just to prove a point that the ones – we’ve got 100 % of what’s handed out already, which is a good quarter of them.”[31]
[31] This appears at page 16 of the transcript of 2 August 2011.
A little later the Adjudicator said to the parties that:
“Mr Sherman has given you a product which is inadequate for its purposes. I have no doubt about that, none. It’s inadequate; it fails; it’s faulty; it doesn’t comply with the description and it’s not of merchantable quality, so much so that last time, Mr Sherman, you agreed to reprint it because it had faded.”[32]
[32] This appears at page 17 of the transcript of 2 August 2011.
Mr Sherman replied simply, “I know” to that statement, but soon returned to the theme that:
“Well, that’s what’s going to solve the problem if we figure out what they’re doing to them but they won’t tell me.”
After further exchanges between Mr Sherman and the Adjudicator, the Adjudicator said:
“The product that you supplied initially to this customer was not fit for merchantable quality. That’s a finding.”[33]
[33] This appears at page 19 of the transcript of 2 August 2011.
Mr Sherman then contended that a practical solution was that he would “repair them”, and the Adjudicator replied “I think you would have to repair 100% of them.”[34]
[34] Also at page 19.
Following that, the Adjudicator was asked by Mr Sherman, “Aren’t I entitled to find out how they are washing the shirts?”, to which the Adjudicator replied, “No”. Mr Sherman was surprised by that statement, saying “Oh my God, you’re kidding me”, and then contended that “I’ve got a university test that backs up my claims and its being ignored.”[35] That lead to an exchange between Mr Sherman and the first Adjudicator, in which the first Adjudicator expressed the opinion, contrary to Mr Sherman’s contentions, that the RMIT report “… simply doesn’t say what you say it says. I think that’s very important.”[36]
[35] At page 20 of the transcript of 2 August 2011.
[36] This appears at page 21 of the transcript of 2 August 2011.
The Adjudicator later, after speaking with Mr Sherman, addressed both parties and said (to Mr Bussinius):
ADJUDICATOR:
You’ve misunderstood. You were meant to wait until the product failed and for a period of twelve months keep sending them back and he’s meant to keep reprinting them. I think that what we now know is that everyone is going to fail. The product is a failure. Mr Sherman has provided you with a non-merchantable product. He’s agreed to that.
MR SHERMAN:
I haven’t agreed to that at all.
ADJUDICATOR:
Because he’s agreed to repair them when they fail. It’s inherent that anyone who says, “If my product fails I will agree to reprint them”, must consider that the failed product is not of merchantable quality, but it’s open to you to deny that, Mr Sherman, if you want to – all part of the problem here.
MR SHERMAN:
I do.
ADJUDICATOR:
All part of the problem here.[37]
[37] This appears in the transcript at pages 22 and 23.
Mr Sherman contended to the first Adjudicator on 2 August 2011 not only that he had not been advised of the complaint (prior to that date) that the shirts returned with the washing instructions were experiencing fading of the logos (as Mr Bussinius contended), but also intimated a wish to have more “University” tests done. Accordingly, the Adjudicator said:[38]
“Mr Sherman is saying he’s had no natural justice. He’s had no opportunity to hear what you’ve said and he should have. He should have, no doubt about it. I’m about to make an order that he pays you $6,800 because the product that he has provided to you is not of merchantable quality, but this matter has gone far beyond its commercial benefit to either of the parties who are in front of me and it should have been settled in the normal business way. It can’t be. It needs a third party such as myself to make a decision and I’m going to make that decision but I don’t want to make it in the face of someone who says that they want an opportunity to obtain University tests. Obtaining University tests, if they are proper and a report that can speak to someone who isn’t an expert, will cost a great deal of money but if you want that opportunity, Mr Sherman, you should have that opportunity.”
[38] At page 22 of the transcript of 2/8/2011.
A little later the Adjudicator and Mr Sherman discussed Mr Sherman’s wish to join as a third party the entity which had supplied the logos to him.
Mr Sherman’s position was put, with some force,[39] in these words,
“I don’t have anything about how they’re washing the shirts; whether they’re ironing them or they’re putting them in the clothes dryer. Surely any product on this planet, the supplier of the product is entitled to issue instructions on how it should be serviced or handled. I like to refer to a car compared to this. I can’t see any difference. If you buy a new Holden, they tell you it’s under warranty and we will fix everything, but you must do this, you must do that. You must service it and if you don’t do that they won’t give you any money back or even fix it for you and, in this case, we don’t know what they’re doing to them. They’re achieving a result that nobody else is achieving, despite the fact that I have personally washed a shirt 15 times that was a reprint. The University has washed them and can’t get the same result.”
[39] At page 26 of the transcript of 2/8/2011.
The first Adjudicator referred to the provisions of s17(c) of the Sale of Goods Act 1896 (Qld), when making the finding that the goods were not of merchantable quality. I respectfully agree that the evidence established that the goods (the 260 shirts with the printed logos) were bought by description, from a seller who delved in goods of that description (although that seller was not the manufacturer), and so the law implied the condition that the shirts were of merchantable quality.
A useful discussion of the implied condition is to be found in The Law of sale of goods in Australia and New Zealand by Professor K.C.T. Sutton, second edition, published by the Law Book company limited in 1974. That edition is a useful reference for the meaning of the term, because it was published in the same year as the enactment of the Trade Practices Act (Commonwealth) 1974, which had the effect of moving complaints about the quality of goods in to the sphere of that Act. At page 167 of that second edition (in chapter X), Professor Sutton refers to a test applied by Lord Wright in Grant v Australian Knitting Mills Ltd ([1936] A.C. 85 at pp 99-100) wherein his Lordship wrote that:
“Whatever else merchantable may mean it does mean that the articles sold, if only meant for one particular use in ordinary course, is fit for that use.”
On the same page that learned author concluded that:
“… goods must meet the description under which they are sold, and if this is so, then, so long as they are fit for any normal use for which such goods as described are put, they are merchantable.”
It is relevant to note that the description by which the goods were sold, which appears in the invoice, was as 200 men’s “JB POPLIN Shirt Short Sleeve BLACK” (in 5 different sizes), and “60 ladies Jeni B POPLIN ¾ Sleeve BLACK”, again in 4 different sizes. Additionally, the description included the following:
“Digital Logo – “Game Dude Computers” logo on front LHS Chest Pocket Size and DIGITAL Logo – “Game Dude Computers” full size back centre shoulders.”
The invoice itself is addressed to Game Dude Computers, by name, and it follows that Print Works Clothing Company (through its agents such as Mr Sherman) knew the clothing company was selling a large number of shirts bearing the logo of the company, and only reasonable to expect that that company intended to advertise its existence through the logos printed on those shirts. The variety of sizes, ranging from small to extra large for men’s shirts, and from size 10 to size 16 for “Ladies” shirts, necessarily implies a variety of wearers, most likely staff. The documents emanating from Print Works Clothing Company (the invoice), and the general circumstances, established that in September 2009 Print Works Clothing Company was selling shirts, by description, to be used for advertising the name and existence of Print Works’ client company. That was the particular use for which the shirts were purchased.
It follows that the provisions of section 17(a) of the Sale of Goods Act 1896 could have been applied in this case by the first Adjudicator. That provision reads:
“(a) When the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required so as to show that the buyer relies on the seller’s skill or judgment, and the goods are of a description which it is in the course of the seller’s business to supply (whether the seller is the manufacturer or not), there is an implied condition that the goods shall be reasonably fit for such purpose;”
The learned Adjudicator applied instead the provisions of section 17(c) of that Act, but on the information supplied to the Adjudicator, it would have been equally appropriate to apply (a). That would have necessitated a consideration of, and an expressed finding on, the issue of whether or not the buyer did expressly or by implication make known to Print Works Clothing Company the particular purpose for which those 260 shirts were required, so as to show that Game Dude Computers relied on Mr Sherman’s skill or judgement. The Adjudicator made no reference to the terms of section 17(a), but I am persuaded by the material in the transcripts, and the documents that were exhibited, that the provisions of that section were equally applicable in this matter.
Professor Sutton wrote (at p168) that “other Judicial definitions akin to those suggested by Lord Wright are that the article sold shall be of the general kind described and reasonably fit for the general purpose for which it has been sold; and that the articles sold shall be reasonably suitable for the ordinary uses it was manufactured to meet, when used in accordance with reasonable intelligible and adequate warnings and instructions known or which should have been known to the purchaser.” He cited case authority for those definitions.
Professor Sutton also quoted from the judgment of Dixon J, (as His Honour then was), in Australian Knitting Mills Ltd v Grant (1933) 50 C.L.R. 387 at 418,[40] wherein His Honour wrote that (the goods):
“… should be in such an actual state that a buyer, fully acquainted with the facts and, therefore, knowing that hidden defects existed and not being limited to their apparent condition would buy them without abatement for the price obtainable for such goods if in reasonably sound order and condition and without special terms.”
[40] When this case was before the High Court.
Professor Sutton wrote (at page 170) that:
“There is another well known test of merchantable quality. In Bristol Tramways etc. Carriage Co. v. Fiat Motors Ltd. [1910] 2KB 831 at 841, Farwell L.J. said that an article was of merchantable quality if it was of such a quality and in such condition that a reasonable man acting reasonably would after a full examination accept it under the circumstances of the case in performance of his offer to buy that article whether he buys it for his own use or to sell again. The thing sold must be reasonably fit for the use for which it purported to be designed.”
Those affidavits respond to the statements made by Mr Bussinius (that he had relied on the contents of that website when making the decision to buy the shirts with those logos), because the affidavits contend that Printworks Clothing Company had no website whatever until 28 November 2009 (and the invoice for the order for 260 shirts, accompanying the original application in this Tribunal was dated 28 September 2009) and the website article forming part of exhibit C, and containing the statement that “our gas curing oven is one of the worlds best to ensure your print doesn’t wash off”, was only placed on the website on 12 March 2012.
The respondent in this appeal, Game Dude Computer Pty Ltd, in its submissions in response, described how Game Dude Computers had supplied evidence of Printworks website to establish that “the shirts provided should have lasted and that they did not last anywhere near the time you would expect while it was included on Printworks website.” That response does not meet the point made by Mr Sherman, that Mr Bussinius could not have adverted (in September 2009) to a website that did not exist on that date, nor to a statement that the print does not wash off, before buying the shirts, because the statement had not been placed on the website until shortly before the date of the third hearing in this matter. However, Mr Sherman’s complaint in his grounds of appeal overlooks the fact that Ms Bussinius had given evidence in the first hearing before the first Adjudicator that she had made the decision to buy the 260 shirts on 25 September 2009, and she did not contend that she was influenced in any way by what she saw on the website. The Adjudicator made orders that day (18 January 2011) based on her evidence, given by affirmation, that she had placed the order to the buy the 260 shirts. He made the findings that orders that day, already described herein. It follows that while Mr Sherman is accurate in his complaint in the written submission in support of this application, about the inaccuracy of the statements made by Mr Bussinius of having looked at the Printworks website before buying the shirts in August/September 2009, this ground appeal does not go anywhere; because the Adjudicator had been satisfied of the existence of a contract which depended upon the actions and state of mind of Ms Bussinius, not Mr Bussinius. If Mr Bussinius had intended to mislead the Tribunal on 28 March 2012 in his statements cited earlier in these reasons, it actually had no effect on the proceedings. The first Adjudicator made no reference in his ex tempore reasons, given on 28 March 2012, to the claims made by Mr Bussinius of having relied on the contents of the website, and said only, at the end of the hearing, that:
I have been referred during the course of this matter to the claims made by the respondent pursuant to its web site and I mark that with item “C” and place same with the file. Such web site speaks of the quality and washability of transfers and does not limit in any way the quality and reliability of such printing.[68]
[68] At page 21 of the transcript of 28 March 2012.
The first Adjudicator’s description of what was on the website is accurate. Mr Sherman makes no complaint about that, and says nothing about whether or not what was on that website in any way affected either the decisions by Mr Bussinius or Ms Bussinius to enter into a contract on 28 September 2009.
Mr Sherman’s written submissions in support of ground 4, “Error made in calculation for amount to be paid” refers to the application made by Game Dude Computers in this Tribunal on 6 October 2010, in respect of 260 black shirts. It complains that the first Adjudicator added to that claim the contents of a second invoice for $1,029.25 (exclusive of GST) “which was not even claimed for in the original application.” That contention is accurate, and the transcripts reveal that the first Adjudicator was told about the second invoice only on 28 March 2012, and that without any invitation to do so from Mr Bussinius, added the 2 invoices together when determining the amount to be repaid by Printworks Clothing Company to Game Dude Computers. Mr Sherman’s written submissions in support of the appeal include a copy of a document dated 11 April 2012, recording the return of a total of 200 black shirts by Game Dude Computers to Printworks Clothing Company. Since the only evidence given in the proceedings about defects in the shirts was about the black shirts described in the invoice dated 29 September 2009, and since the evidence was that the second invoice was for “high visibility of shirts printed for our warehouse staff”, organised by Ms Bussinius,[69] which shirts were described in the invoice as yellow/navy (15) or orange/navy (8) invoice on 30 November 2009, with none being returned to Printworks Clothing Company, as demonstrated by the material in the applicants written submissions, I am satisfied that the first Adjudicator was in error in treating those shirts as part of the claim made by Game Dude Computers Pty Ltd. Accordingly no orders should have been made for the return of those shirts, if such order was made, because there had been no complaint about those shirts in the original application, and none of the evidence suggests that those particular shirts were the subject of any complaint. They may have had defectively printed logos, just as did the black shirts, but no one said so. Accordingly the first Adjudicator erred in adding the (exclusive of GST) cost of those shirts to the sum to be returned to Game Dude Computers and it follows that the ordered sum should be reduced by $1,029.00 to $5,889.00.
[69] Page 5 of the transcript of 18 August 2011.
There is another matter as well. Only 200 shirts were returned to Printworks Clothing Company, leaving 60 unaccounted for. Thirty-six of those were presumably already back with Printworks Clothing Company, having been delivered there on or about 13 April 2012, which means that Game Dude Computers (or someone else) has possession of 24 of those 260 black shirts. This Tribunal has made 3 of those exhibits, and others may remain with either the RMIT or the CSIRO. In my opinion, the sum to be repaid by Printworks Clothing Company to Game Dude Computers, should be rounded down to $5,500.00.
The first Adjudicator’s remarks and findings, quoted in paragraph 121 above, may have supported a finding against the second respondent, the supplier of the defective prints, joined in the proceedings by Mr Sherman. But the first Adjudicator made no orders against that second respondent, and Mr Sherman has not sought leave to appeal that result, or made any argument about the second respondent’s liability vis-à-vis his own, and that second respondent was not joined in, or notified about, this appeal.
I order:
1.That leave to appeal is granted.
2.The appeal is allowed.
3.The orders made on 28 March 2012 are amended by deleting the amount of $6,918.00 and inserting instead the amount of $5,500.00.
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