Solid Az Concrete Pty Ltd v Autonation Pty Ltd trading as Central Coast Chrysler Jeep (No. 2)

[2024] NSWCATCD 6

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Solid Az Concrete Pty Ltd v Autonation Pty Ltd trading as Central Coast Chrysler Jeep (No. 2) [2024] NSWCATCD 6

Hearing dates:

11 July 2024

Date of orders:

12 July 2024

Decision date:

12 July 2024

Jurisdiction:

Consumer and Commercial Division

Before:

Graham Ellis SC, Senior Member

Decision:

1   The application is dismissed.

Catchwords:

CONSUMER CLAIM – Supply of goods – guarantee of acceptable quality – claim against supplier – claim against manufacturer – rejection period determined

ESTOPPEL – Res judicata – issue estoppel – Anshun estoppel

Legislation Cited:

Australian Consumer Law

Fair Trading Act 1987 (NSW)

Cases Cited:

Blair v Curran [1939] HCA 23; 62 CLR 464

Hancock v East Coast Timber Products Pty Limited [2011] NSWCA 11

Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305

Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45

South Western Sydney Area Health Service v Edmonds [2007] NSWCA 16

Volkswagen Group Australia Pty Ltd v Saad [2022] NSWCATAP 133

Texts Cited:

None cited

Category:

Principal judgment

Parties:

Applicant – Solid Az Concrete Pty Ltd
First Respondent – Autonation Pty Ltd trading as Central Coast Chrysler Jeep
Second Respondent – Stellantis (Australia and New Zealand) Pty Ltd

Representation:

Applicant – B Lane
First Respondent – A Harris
Second Respondent – O Do

File Number(s):

2024/00085285 (formerly MV 23/35446)

Publication restriction:

Nil

REASON FOR DECISION

Outline

1. This application relates to the purchase of a motor vehicle that was imported by Stellantis (Australia and New Zealand) Pty Ltd (Stellantis) then supplied to Autonation Pty Ltd trading as Central Coast Chrysler Jeep (Autonation) who sold it to Solid AZ Concrete Pty Ltd (Solid).

2. A prior application involving the same three parties (2023/00382716, previously MV 23/35446), involving the same motor vehicle, was heard on 24 November 2023 with orders made and reasons published on 7 February 2024.

3. There were differences in the evidence in these proceedings, namely that Solid (1) sent a letter dated 15 February 2024 to Autonation, and (2) provided documents in support of its claim for damages, both matters clearly prompted by what was said in those reasons.

4. The Tribunal determined that the claim against each of the respondents should be dismissed as they were the same claims made and decided in the earlier proceedings.

Jurisdiction

5. In the earlier proceedings, the question of whether the Tribunal has jurisdiction was considered. For the reasons indicated in respect of that application, the Tribunal is satisfied it has jurisdiction to hear and determine this application.

History of the proceedings

6. After the application was lodged on 5 March 2024, a preliminary hearing held on 10 April 2024 made orders for the documents upon which the parties intended to rely at the hearing to be provided. A notice dated 19 April 2024 advised the parties that the application would be heard today.

The hearing

7. Solid was represented by a director, Mr Lane. Autonation’s representative was its customer resolution officer, Mr Harris. Ms Do, being the consumer advocate of Stellantis, spoke in support of its case.

8. The parties were advised there would be three stages to the hearing: first, identifying the documents which were to be admitted as evidence; secondly, any cross-examination; and thirdly, closing submissions as to what it was contended should be the outcome of the case and why.

Evidence

9. Documents submitted for Solid, received by the Tribunal on 22 April 2024 were admitted as Exhibit A, with replacement pages as subsequently submitted. Documents received from Autonation on 7 May 2024 were admitted as Exhibit R. No documents were submitted for Stellantis.

Cross-examination

10. As the evidence did not contain any signed witness statement, statutory declaration, or affidavit, there was no cross-examination. Hence, it only remained to provide an opportunity for the parties to make submissions.

Submissions

11. The usual sequence of applicant, then respondent, then applicant in reply was followed so that each party was able to speak in support of their case and to respond to the case of the other party. Those submissions are summarised below.

12. It is to be noted that, prior to the commencement of submissions, the Tribunal advised the parties that there was a principle which prevented the same matter being raised in subsequent proceedings so that they were on notice of that aspect and had an opportunity to include it in their submissions.

13. On behalf of Solid, Mr Lane said he relied on the documents submitted in support of the claim that the vehicle supplied was not of acceptable quality. He said Solid had been left with numerous issues and costs, that it became necessary to get another vehicle, and that the relief sought was a full refund plus compensation for the cost of the accessories.

14. The case put for Autonation by Mr Harris was that the accessories added to the vehicle caused problems and that Autonation had not been able to inspect the vehicle because it was interstate.

15. For Stellantis, Ms Do supported what was said by Mr Harris and contended that Solid was not entitled to recover the cost of the accessories.

Relevant law

16. Section 28 of the Fair Trading Act 1987 (NSW) makes the Australian Consumer Law (ACL) part of the law of New South Wales.

17. In the ACL, Chapter 3 is headed “Specific Protections” and Part 3.2 of that Chapter deals with consumer transactions. Division 1 of that Part sets out consumer guarantees, and Subdivision A within that Division, which deals with guarantees relating to the supply of goods, contains sections 51 to 59. (Subdivision B, dealing with guarantees relating to the supply of services, contains sections 60 to 63.)

18. Chapter 5 of the ACL is headed “Enforcement and remedies”. Part 5.4 of that Chapter deals with remedies relating to guarantees. Division 1 of that Part deals with actions against suppliers. Subdivision A of that Division, which deals with actions against suppliers of goods, contains sections 259 to 266. (Subdivision B, dealing with actions against suppliers of services, contains sections 267 to 270).

19. Division 2 of Part 5.4 within Chapter 5 deals with actions for damages against manufacturers of goods. It contains sections 271 to 273.

20. The last three paragraphs show that the ACL provides separate guarantees in relation to the supply of goods and services and that the remedies against suppliers and manufacturers for a breach of those guarantees are not the same.

21. Listed below are the sections and titles in the ACL which are relevant to this application, with the full wording of those sections being set out in Appendix A:

54   Guarantee as to acceptable quality

259   Action against suppliers of goods

260   When a failure to comply with a guarantee is a major failure

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

262   When consumers are entitled to reject goods

263   Consequences of rejecting goods

271   Actions for damages against manufacturers of goods

272   Damages that may be recovered against manufacturers of goods

273   Time limit for actions against manufacturers of goods

22. From what has been set out above, the following points relevant to this application need to be noted:

1. A notice of rejection only relates to enforcement and remedies.

2. A notice of rejection only relates to a claim against a supplier.

3. The only remedy against a manufacturer is a claim for damages.

23. While the last of those three points follows from the wording of the ACL, the decision in Volkswagen Group Australia Pty Ltd v Saad [2022] NSWCATAP 133 at [104] serves to confirm that view.

24. The regime set out in sections 259 to 263, which relate to remedies against a supplier (not manufacturer) in relation to a breach of a guarantee relating to the provision of goods (not services) is not easy to understand, especially for self-represented litigants. Set out below is an attempt to summarise, as succinctly as possible, how those sections operate:

1. If the defect can be remedied but is not a major failure: s 259(2) applies.

2. Otherwise, s 259(3) applies.

3. Damages may be recoverable in addition: see s 259(4) and s 259(5).

4. As to whether there is a major failure: see s 260.

5. As to how the supplier may remedy a breach: see s 261.

6. As to when a consumer cannot reject the goods: see s 262.

7. As to the consequences of rejection: see s 263.

25. For a consumer who has established a breach of a consumer guarantee and is seeking a refund from the supplier, it will usually be necessary to determine:

1. Whether there is a major failure.

2. Whether the breach cannot be remedied.

3. If either of those two tests are satisfied, whether there is an entitlement to reject.

4. If so, whether the consumer has rejected the goods.

26. For a consumer who has established a breach of a consumer guarantee and is seeking damages from either a supplier or a manufacturer, it will usually be necessary to determine:

1. Whether the breach caused loss.

2. If so, what is the amount of the loss that has been caused.

27. An expert witness is permitted to give opinion evidence. However, there are matters which the Tribunal must consider when deciding what weight to give to that evidence. The first is whether the expert has qualifications and/or experience in the relevant field. Secondly, whether the expert has read and agreed to be bound by the Tribunal’s Procedural Direction 3 which reminds that it is the duty of an expert to assist the Tribunal and not be an advocate for the party for whom he provided a report.

28. Thirdly, the decisions such as Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305 (Makita) make it clear that, for such evidence to be accepted, the following considerations apply: (1) the expert’s opinion must clearly indicate the facts upon which it is based, (2) those facts must be proved so there is a factual basis for the opinion, (3) the reasons or the process of reasoning for the opinion must be disclosed, and (4) any opinion must fall within the qualifications and experience of the expert.

29. While Makita was considering admissibility in proceedings in a court, it is well-established that the same considerations go to the weight to be given to expert evidence in proceedings in a forum where the rules of evidence to not apply, such as the Tribunal: South Western Sydney Area Health Service v Edmonds [2007] NSWCA 16; Hancock v East Coast Timber Products Pty Limited [2011] NSWCA 11.

30. As there has been a prior application involving the same vehicle and the same parties, it is necessary to note that courts and tribunals take the view that the same issue cannot be raised more than once otherwise litigation would never be finalised. That principle could be summarised by saying ‘you cannot have two bites of a cherry’. There are three ways in which that barrier can operate.

31. First, The Latin phrase res judicata is a term used to indicate that a claim has already been decided by another court or tribunal and between the same parties. It arises from a prior decision made by a court or tribunal and is based on the claim, called the cause of action, that was decided.

32. Secondly, the term issue estoppel goes beyond the outcome and is used to indicate that a party is prevented from revisiting an issue that has been decided in earlier proceedings. The position was summarised by Dixon J (as he then was) in Blair v Curran [1939] HCA 23; 62 CLR 464 at 531-532 (Blair):

A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. … The distinction between res judicata and issue estoppel is that in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order.

33. The third concept is called Anshun estoppel, because it is based on the decision of the High Court in Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45. It provides a barrier to raising in subsequent proceedings a matter that could and should have been raised in earlier proceedings.

34. Thus, by way of summary, a decision in prior proceedings in a court or tribunal not only operates to finalise the issues between the parties raised in those prior proceedings but also acts as a barrier to revisiting those issues in subsequent proceedings, other than by way of an appeal.

35. It remains to consider the application of res judicata, issue estoppel, and Anshun estoppel to the circumstances of these proceedings.

Consideration

36. Having considered the evidence and the reasons in the earlier proceedings, the Tribunal makes the following findings of fact:

1. Stellantis provided a motor vehicle to Autonation which sold that motor vehicle to Solid on 1 September 2020.

2. In earlier proceedings between the same parties, Solid alleged that the motor vehicle it purchased was not of acceptable quality, in a breach of section 54 of the Australian Consumer Law.

3. Those proceedings were heard on 24 November 2023.

4. In those proceedings, based on the evidence provided, the Tribunal found:

1. That the vehicle was not of acceptable quality.

2. That Solid had not caused the vehicle to become of unacceptable quality.

3. That there had been a major failure to comply with a consumer guarantee.

4. That failure to comply had not been remedied.

5. Solid had not given the appropriate notice to Autonation.

6. As a result, Solid was not entitled to a refund.

7. Solid had not proved any damages.

8. Stellantis had already paid Solid $7,000 in respect of the matters raised in those proceedings.

5. As a result of those findings, on 7 February 2024 the earlier proceedings were dismissed.

6. By letter dated 19 February 2024 Solid sent a letter to Autonation which sought (a) a refund of $76,704, (b) damages of $28,297, and (c) collection of the vehicle from Solid’s address in Queensland.

7. Solid modified the motor vehicle after it was sold by adding accessories at a total cost of $33,622.45.

37. The claim made in these proceedings is based on s 54 of the ACL, as was the case in the earlier proceedings. The matters listed in the chronology provided in support of Solid’s case (A1, ie from page 1 in Exhibit A) cover events between 16 September 2020 and 17 October 2023. They are the same matters that were the subject of findings set out in the reasons published on 7 February 2024, at [17], in findings (2)-(26).

38. What was said to be an “Independent Report” (A10) is of limited assistance to Solid’s case for the following reasons. First, did no more than recite the chronology of events set out by Mr Lane (A1). Second, it was prepared without a workshop inspection, being based only a visual inspection at a dealership. Thirdly, it expresses a view based on “our experience with jeeps” but there is no indication of the nature and extent of that experience. Fourthly, the report is not signed, and its author is not indicated. Fifthly, there is no indication of either the qualifications or experience of the author. Sixthly, there is nothing to indicate the author has read and agreed to be bound by the Tribunal’s code of conduct for expert witnesses. Seventhly, this report does not meet the criteria suggested in Makita, summarised above.

39. As a result, even if the Tribunal was entitled to consider the case of Solid for a second time, this report lacks probative value, other than to suggest an odometer reading of 57,298 kms as at 13 September 2023, about three years after the vehicle was collected from Autonation by Solid.

40. Unlike the earlier proceedings, there was a letter of rejection in these proceedings. However, if the claim of Solid could be assessed for a second time, the question arises of whether the rejection period had expired prior to the date of that letter, being 15 February 2024. It is noted that letter was sent around three years and five months after Solid first took possession of the vehicle.

41. Having considered the matters listed in s 262(2) of the ACL, the Tribunal assesses two years to be the period from the time of supply within which it would be reasonable for the failures constituting a breach of s 54 of the ACL to become apparent. That finding is based on the motor vehicle being driven at least four times each week with usage of 10,000 kms per annum. As a result, s 261(1)(a) applies and Solid is not entitled to reject the subject motor vehicle.

42. As with the earlier proceedings, there was a claim for damages for the cost of accessories. In the earlier proceedings, $28,297.92 was claimed but no supporting evidence was provided. In these proceedings, $33,622.45 was claimed (A43) and supporting documents were provided (A44-88C).

43. The position in relation to this application may be summarised as follows:

1. The basis of the claim is the same, namely that there was a breach of s 54 of the ACL in that the motor vehicle was not of acceptable quality.

2. The evidence relied on in support of a breach of s 54 is the same.

3. The claim for a refund is the same.

4. Although a letter of rejection was sent, there was no entitlement to rejection as the rejection period had expired.

5. The claim for damages is the same, based on the cost of accessories.

6. A different amount is claimed but, unlike the earlier proceedings, there is supporting evidence for the amount claimed.

Claim against the supplier

44. The principle known as res judicata means that the cause of action (ie the basis of the claim) cannot be raised in these proceedings because, having been determined in the earlier proceedings, it cannot now be raised again. That is the necessary consequence of the same claim being based on the same section of the ACL and the same evidence, being matters occurring between purchase and 17 October 2023. For there to be a fresh cause of action, there would need to be matters occurring after that date.

45. While there is a difference in that there is a letter of rejection that was part of the evidence in these proceedings, as a consideration of the provisions of the ACL reveals, rejection is part of the process of enforcement and remedies and does not operate to provide a fresh cause of action. Even if that letter could be said to create a new cause of action, it does not operate to provide an entitlement to a refund because it was not sent within the rejection period.

46. Although there is a difference in the evidence in support of the claim for damages, there is no entitlement to revisit that issue as it was considered and determined in the earlier proceedings because the principle known as issue estoppel applies. Even if it could be said that issue estoppel does not apply, Solid could and should have included evidence in support of its claims for damages in the earlier proceedings with the result that the principle known as Anshun estoppel applies.

47. In these circumstances, the claim of Solid against Autonation must be dismissed.

Claim against the manufacturer

48. The difference of there being a rejection letter in these proceedings is of no moment as a letter of rejection only relates to a claim against a supplier and the claim of Solid has against Stellantis is a claim against a manufacturer which is confined to a claim for damages.

49. In relation to the claim of Solid against Stellantis, for the reasons set out above in relation to the claim of Solid against Autonation:

1. Res judicata applies because the cause of action, both as to a breach of s 54 of the ACL and the supporting evidence, is the same.

2. Issue estoppel applies because the issues of breach, causation, and damages were determined in the earlier proceedings.

1. Anshun estoppel applies because Solid, which bore the onus of proof, could and should have provided evidence in support of its claim for damages in the earlier proceedings.

50. In these circumstances, the claim of Solid against Stellantis must also be dismissed.

Observations

51. There can be little doubt that Solid will consider the outcome of these proceedings unfair as it established a breach of s 54 of the ACL but did not achieve any remedy in either the earlier proceedings or these proceedings. However, the Tribunal is required to determine applications such as this in accordance with the relevant legal principles and the evidence placed before the Tribunal by the parties.

52. The outcome of both the earlier proceedings and these proceedings is the result of the detailed statutory regime of the ACL which governed these proceedings, which is such as to warrant a consumer such as Solid either contacting NSW Fair Trading or considering any of its published materials. Alternatively, seeking legal advice, especially when an amount in the vicinity of $100,000 is claimed.

53. It is not the role of the Tribunal to provide advice to the parties. By way of analogy, if these proceedings were a football match, the role of the Tribunal is that of referee, not a coach.

54. While the Tribunal commonly explores whether settlement can achieve an agreed outcome rather than an imposed outcome, it is difficult to pursue the question of settlement at the final hearing of a second application, which would risk creating a situation which prevents the allocated member from conducting the hearing. There was ample opportunity for settlement to be explored by the parties prior to the hearing of this second application.

55. At the risk of stating the obvious, it remains open to the parties to have discussions with a view to avoiding further proceedings which might be commenced based on matters arising after these proceedings, albeit that the rejection period has, by now, clearly expired. It is also relevant to note that Solid has already received $7,000 from Stellantis in relation to the motor vehicle which is the subject of these proceedings.

Orders

56. For the reasons set out above, the following order is made.

1. The application is dismissed.

**********

Appendix A

1. Guarantee as to acceptable quality

   1. If:

   1. a person supplies, in trade or commerce, goods to a consumer; and

   2. the supply does not occur by way of sale by auction;

   there is a guarantee that the goods are of acceptable quality.

   2. Goods are of acceptable quality if they are as:

   1. fit for all the purposes for which goods of that kind are commonly supplied; and

   2. acceptable in appearance and finish; and

   3. free from defects; and

   4. safe; and

   5. durable;

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

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

   1. the nature of the goods; and

   2. the price of the goods (if relevant); and

   3. any statements made about the goods on any packaging or label on the goods; and

   4. any representation made about the goods by the supplier or manufacturer of the goods; and

   5. any other relevant circumstances relating to the supply of the goods.

   4. If:

   1. goods supplied to a consumer are not of acceptable quality; and

   2. the only reason or reasons why they are not of acceptable quality were specifically drawn to the consumer’s attention before the consumer agreed to the supply;

   the goods are taken to be of acceptable quality.

   5. If:

   1. goods are displayed for sale or hire; and

   2. the goods would not be of acceptable quality if they were supplied to a consumer;

   the reason or reasons why they are not of acceptable quality are taken, for the purposes of subsection (4), to have been specifically drawn to a consumer’s attention if those reasons were disclosed on a written notice that was displayed with the goods and that was transparent.

   6. Goods do not fail to be of acceptable quality if:

   1. the consumer to whom they are supplied causes them to become of unacceptable quality, or fails to take reasonable steps to prevent them from becoming of unacceptable quality; and

   2. they are damaged by abnormal use.

   7. Goods do not fail to be of acceptable quality if:

   1. the consumer acquiring the goods examines them before the consumer agrees to the supply of the goods; and

   2. the examination ought reasonably to have revealed that the goods were not of acceptable quality.

2. Action against suppliers of goods

   1. A consumer may take action under this section if:

   1. a person (the supplier) supplies, in trade or commerce, goods to the consumer; and

   2. a guarantee that applies to the supply under Subdivision A of Division 1 of Part 3‑2 (other than sections 58 and 59(1)) is not complied with.

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

   1. the consumer may require the supplier to remedy the failure within a reasonable time; or

   2. if such a requirement is made of the supplier but the supplier refuses or fails to comply with the requirement, or fails to comply with the requirement within a reasonable time—the consumer may:

   1. otherwise have the failure remedied and, by action against the supplier, recover all reasonable costs incurred by the consumer in having the failure so remedied; or

   2. subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection.

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

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

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

   4. The consumer may, by action against the supplier, recover damages for any loss or damage suffered by the consumer because of the failure to comply with the guarantee if it was reasonably foreseeable that the consumer would suffer such loss or damage as a result of such a failure.

   5. Subsection (4) does not apply if the failure to comply with the guarantee occurred only because of a cause independent of human control that occurred after the goods left the control of the supplier.

   6. To avoid doubt, subsection (4) applies in addition to subsections (2) and (3).

   7. The consumer may take action under this section whether or not the goods are in their original packaging.

3. When a failure to comply with a guarantee is a major failure

   1. A failure to comply with a guarantee referred to in section 259(1)(b) that applies to a supply of goods is a major failure if:

   1. the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or

   2. the goods depart in one or more significant respects:

   1. if they were supplied by description—from that description; or

   2. if they were supplied by reference to a sample or demonstration model—from that sample or demonstration model; or

   3. the goods are substantially unfit for a purpose for which goods of the same kind are commonly supplied and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or

   4. the goods are unfit for a disclosed purpose that was made known to:

   1. the supplier of the goods; or

   2. a person by whom any prior negotiations or arrangements in relation to the acquisition of the goods were conducted or made;

   and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or

   5. the goods are not of acceptable quality because they are unsafe.

   2. A failure to comply with a guarantee referred to in section 259(1)(b) that applies to a supply of goods is also a major failure if:

   1. the failure is one of 2 or more failures to comply with a guarantee referred to in section 259(1)(b) that apply to the supply; and

   2. the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of those failures, taken as a whole.

   Note: The multiple failures do not need to relate to the same guarantee.

   3. Subsection (2) applies regardless of whether the consumer has taken action under section 259 in relation to any of the failures.

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

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

1. if the failure relates to title—by curing any defect in title; or

2. if the failure does not relate to title—by repairing the goods; or

3. by replacing the goods with goods of an identical type; or

4. by refunding:

1. any money paid by the consumer for the goods; and

2. an amount that is equal to the value of any other consideration provided by the consumer for the goods.

262  When consumers are not entitled to reject goods

1. A consumer is not entitled, under section 259, to notify a supplier of goods that the consumer rejects the goods if:

1. the rejection period for the goods has ended; or

2. the goods have been lost, destroyed or disposed of by the consumer; or

3. the goods were damaged after being delivered to the consumer for reasons not related to their state or condition at the time of supply; or

4. the goods have been attached to, or incorporated in, any real or personal property and they cannot be detached or isolated without damaging them.

2. The rejection period for goods is the period from the time of the supply of the goods to the consumer within which it would be reasonable to expect the relevant failure to comply with a guarantee referred to in section 259(1)(b) to become apparent having regard to:

1. the type of goods; and

2. the use to which a consumer is likely to put them; and

3. the length of time for which it is reasonable for them to be used; and

4. the amount of use to which it is reasonable for them to be put before such a failure becomes apparent.

263  Consequences of rejecting goods

1. This section applies if, under section 259, a consumer notifies a supplier of goods that the consumer rejects the goods.

2. The consumer must return the goods to the supplier unless:

1. the goods have already been returned to, or retrieved by, the supplier; or

2. the goods cannot be returned, removed or transported without significant cost to the consumer because of:

1. the nature of the failure to comply with the guarantee to which the rejection relates; or

2. the size or height, or method of attachment, of the goods.

3. If subsection (2)(b) applies, the supplier must, within a reasonable time, collect the goods at the supplier’s expense.

4. The supplier must, in accordance with an election made by the consumer:

1. refund:

1. any money paid by the consumer for the goods; and

2. an amount that is equal to the value of any other consideration provided by the consumer for the goods; or

2. replace the rejected goods with goods of the same type, and of similar value, if such goods are reasonably available to the supplier.

5. The supplier cannot satisfy subsection (4)(a) by permitting the consumer to acquire goods from the supplier.

6. If the property in the rejected goods had passed to the consumer before the rejection was notified, the property in those goods revests in the supplier on the notification of the rejection.

271  Action for damages against manufacturers of goods

1. If:

1. the guarantee under section 54 applies to a supply of goods to a consumer; and

2. the guarantee is not complied with;

an affected person in relation to the goods may, by action against the manufacturer of the goods, recover damages from the manufacturer.

2. Subsection (1) does not apply if the guarantee under section 54 is not complied with only because of:

1. an act, default or omission of, or any representation made by, any person other than the manufacturer or an employee or agent of the manufacturer; or

2. a cause independent of human control that occurred after the goods left the control of the manufacturer; or

3. the fact that the price charged by the supplier was higher than the manufacturer’s recommended retail price, or the average retail price, for the goods.

3. If:

1. a person supplies, in trade or commerce, goods by description to a consumer; and

2. the description was applied to the goods by or on behalf of the manufacturer of the goods, or with express or implied consent of the manufacturer; and

3. the guarantee under section 56 applies to the supply and it is not complied with;

an affected person in relation to the goods may, by action against the manufacturer of the goods, recover damages from the manufacturer.

4. Subsection (3) does not apply if the guarantee under section 56 is not complied with only because of:

1. an act, default or omission of any person other than the manufacturer or an employee or agent of the manufacturer; or

2. a cause independent of human control that occurred after the goods left the control of the manufacturer.

5. If:

1. the guarantee under section 58 or 59(1) applies to a supply of goods to a consumer; and

2. the guarantee is not complied with;

an affected person in relation to the goods may, by action against the manufacturer of the goods, recover damages from the manufacturer.

6. If an affected person in relation to goods has, in accordance with an express warranty given or made by the manufacturer of the goods, required the manufacturer to remedy a failure to comply with a guarantee referred to in subsection (1), (3) or (5):

1. by repairing the goods; or

2. by replacing the goods with goods of an identical type;

then, despite that subsection, the affected person is not entitled to commence an action under that subsection to recover damages of a kind referred to in section 272(1)(a) unless the manufacturer has refused or failed to remedy the failure, or has failed to remedy the failure within a reasonable time.

7. The affected person in relation to the goods may commence an action under this section whether or not the goods are in their original packaging.

1. Damages that may be recovered by action against manufacturers of goods

   1. In an action for damages under this Division, an affected person in relation to goods is entitled to recover damages for:

   1. any reduction in the value of the goods, resulting from the failure to comply with the guarantee to which the action relates, below whichever of the following prices is lower:

   1. the price paid or payable by the consumer for the goods;

   2. the average retail price of the goods at the time of supply; and

   2. any loss or damage suffered by the affected person because of the failure to comply with the guarantee to which the action relates if it was reasonably foreseeable that the affected person would suffer such loss or damage as a result of such a failure.

   2. Without limiting subsection (1)(b), the cost of inspecting and returning the goods to the manufacturer is taken to be a reasonably foreseeable loss suffered by the affected person as a result of the failure to comply with the guarantee.

   3. Subsection (1)(b) does not apply to loss or damage suffered through a reduction in the value of the goods.

2. Time limit for actions against manufacturers of goods

An affected person may commence an action for damages under this Division at any time within 3 years after the day on which the affected person first became aware, or ought reasonably to have become aware, that the guarantee to which the action relates has not been complied with.

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

Registrar

Decision last updated: 02 August 2024