Sarafian v Smart Markets Global Pty Ltd
[2010] QCAT 550
•5 November 2010
| CITATION: | Sarafian v Smart Markets Global Pty Ltd [2010] QCAT 550 |
| PARTIES: | Mr Richard Sarafian (Applicant) |
| v | |
| Smart Markets Global Pty Ltd (Respondent) |
| APPLICATION NUMBER: | 2570/10 |
| MATTER TYPE: | Other minor civil dispute matters |
| HEARING DATE: | 14 October 2010 |
| HEARD AT: | Brisbane |
| DECISION OF: | Julie Cowdroy, Member |
| DELIVERED ON: | 5 November 2010 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | The application is dismissed. |
| CATCHWORDS : | MINOR CIVIL DISPUTE – CONTRACTUAL DISPUTE – allegations that respondent engaged in misleading conduct and misrepresented the contents of a computer software package – onus on buyer to ensure he had adequate understanding of the product being offered before purchase |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Mr Sarafian represented himself. |
| RESPONDENT: | No appearance |
REASONS FOR DECISION
THE ISSUE IN DISPUTE
Mr Sarafian sought an order that the respondent pay the sum of $9892 representing an amount he paid for the purchase of a software package. He claims that the product does not reflect the description of the product provided by the supplier and that the respondent engaged in misleading conduct. He also claimed the product was unfit for its purpose.
APPLICANT’S CASE
The applicant first became aware of the product from a telemarketer. He had a few conversations over the telephone about the product and he was directed to view the product on a website which described it in general terms. Mr Sarafian was unable to provide the material which he read on the internet because it had been removed. On the web and during the telephone conversations, it was described as a trading system. He had some experience as a share trader and his expectation was that the product would allow him to trade various stocks.
He was offered the product initially at $19,800 with an ongoing monthly data fee of $200 per month. After further telephone discussion, by letter dated 10 June 2008, the respondent offered to sell the product at half price. The product was described as follows: F1 Currency trading System and the F1 Index Pro Trading System.
The applicant accepted the offer and deposited the sum of $9,800 into the bank account of Insider News Pty Ltd on 13 June 2008 for the purchase of software described as F1 Platinum – Foreign Currency Trading System, Software, Training and Education. He received the package, which comprised Currency & Index Trading System software on a CD ROM and a printed 15 page manual titled "Printed Trading Instructions ".
The instructions describe a system where a bet is placed on the fluctuations of a country’s market as a whole rather than purchasing a particular share. The system relies on messages, described as “alerts” that are sent to the user via SMS. The alerts advise the user to bet up or down about the rise or fall in the country’s stock performance. If the user invests money in the direction indicated in the SMS and the currency fluctuates in that manner, then the user wins, makes a profit and then waits for the next alert.
If the currency fluctuates in a direction other than that indicated in the SMS, then it is a losing trade and when acting on the next alert, the user has to double the dollar figure that they previously invested.
Mr Sarafian received the product, installed the software and commenced the on-line training programme. It was then he realised that the product was different to his expectations. There was no scope for him to trade on the alerts he received; he could only use the alerts to gamble on the Bet on Markets website. He did not realise that the system was a betting system. On 23 June 2008 he requested a refund of the product as it did not perform the functions he wanted.
The respondent advised him to persevere and offered to provide him with the alerts for the next three months free of charge. He was told that if he was not happy with the product after that time, his money would be refunded. He was not happy and asked to speak to a supervisor, who promised to return his call and never did.
He sent a number of e-mails to the company without response. On 11 September 2008, he stopped receiving the alerts. On 14 April 2009 he received an email from a company called Advanced Markets International Pty Ltd, advising of telephone contact changes in relation to the system he had purchased. He attempted to contact the company at the new contact details without success. Mr Sarafian described his frustration when contact details were again updated and another company was involved. He had no success in contacting anyone.
CONSIDERATION:
The applicant contends that the respondent engaged in misleading conduct and that it supplied goods that were unfit for purpose. He contended that the respondent was in breach of contract and that he has a remedy in damages to the value of the purchase price of the software system.
There are provisions in the Fair Trading Act 1989 which mirror some of the provisions of the Trade Practices Act 1974 (Commonwealth). These provisions relate to conduct that is misleading or deceptive or is liable to mislead the public as to a product’s nature, characteristics the suitability for purpose. There are also provisions in relation to unconscionable conduct appertaining to undue influence or unfair tactics being used against the customer by the supplier. However, to obtain a remedy by way of compensation proceedings must be commenced for an offence against that Act.
There are provisions in the Sale of Goods Act 1896 Queensland where there are implied conditions as to quality and fitness of goods in certain circumstances. Essentially, to obtain an order for damages from this Tribunal, the applicant must demonstrate that the respondent was in breach of his contractual obligations
In the written material provided to the respondent, the product is described as an international trading system, a currency trading system and F1 Pro Index Trading System. It refers to the ability to trade International Currencies & International Indices. The printed instructions refer to the process as trading, with references to losing trades and winning trades. Elsewhere it refers to the “cost of the bet”.
What is clear from the material about the software package is that the user has no ability to invest in particular trading commodities; it is limited to acting on alerts which directs the recipient to lay a bet that a particular index will move up or down within a certain time period. If the index moves in a direction other than that predicted in the SMS, the recipient’s next bet up or bet down must double up the previous investment. It does not require any expertise or knowledge of the trading process.
The applicant is aggrieved as the procedure in place to recover after a losing trade is not based on a technical or fundamental analysis, which was his understanding prior to purchase. The difficulty for the applicant is that the only written documentation provided by the respondent prior to purchase is couched in the vaguest and most general terms.
Whilst the applicant contends that the product is different to that which was described to him before he purchased, there is almost no evidence about what the respondent said about the product. The conversations between the applicant and the respondent’s agent were sufficient to satisfy the applicant that he was buying a product to suit his needs, but there is no evidence as to what was said specifically which led him to form this view.
The applicant’s concern revolves primarily around the fact that he did not associate trading indices and currencies with gambling. Further, at no time was he informed that the system involved gambling. However, there is no evidence that he asked a specific question about gambling.
The Tribunal finds that it was made clear to the purchaser in the written material sent to him offering the product for half price that the product functions on the basis of alerts indicating when a currency will go up or down. Mr Sarafian was therefore aware in general detail how the system operated. Whilst he did not understand that the only means of acting on the alerts was to use the Bet on Markets website, there is no evidence that specific questions were asked about this aspect.
There is insufficient evidence to enable a finding of reasonable satisfaction that the supplier of the product made particular representations about the product’s use to the extent that the product offered was not the product which was ultimately supplied. To a large extent, the applicant relied on generalised conversations and did not have a specific understanding of the system before purchasing it. It was only after receiving the product that the applicant became aware of its limitations.
There is no evidence that the respondent has represented the product with sufficient particularity for a finding to be made that the product is not fit for purpose. The product is designed for the user to “trade”, “invest”, “wager” or “gamble” on the movement of international indices. The fact that this occurs via a very structured format and allows no discretion to the user does not mean it is not fit for purpose.
Whilst Mr Sarafian claims he was unduly pressured, mislead and deceived in relation to the purchase and the use of the product, there is insufficient evidence of the precise nature of the discussions to enable reasonable satisfaction that this occurred. There was no evidence of undue pressure particularly in view of the fact that Mr Sarafian had previous experience trading on the stock exchange and he had several conversations and inspected the internet site before deciding to buy the product.
Whilst the tribunal accepts that that the applicant’s understanding of the product’s use and characteristics was different than that anticipated, that is insufficient to enable him to establish that the respondent is in breach of contract. Consequently, the application is dismissed.
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