Southern Cross Homes (Broken Hill) Inc v Chapman No. Scgrg-98-681 Judgment No. S491

[1999] SASC 491

SOUTHERN CROSS HOMES (BROKEN HILL) INC v CHAPMAN
[1999] SASC 491

Magistrates Appeal

1. DEBELLE J.     The respondent (plaintiff) had sued to recover the cost of 60 commode chairs he had sold to the appellant (defendant).  The cost of the chairs was $22,200.  Upon the failure of the defendant to pay for the chairs, the plaintiff issued proceedings out of the Adelaide Magistrates’ Court.  The Magistrate allowed the claim.  The defendant appeals against that decision.

2. The plaintiff is the agent for Australian Medical Chair and Trolley Co (“AMC”).  Among other things, AMC manufactures commode chairs including a model called “Grevillea”.  The defendant operates two nursing homes for elderly people in Broken Hill.  The administrator of the nursing homes is Mr Quinn.  His wife is the director of nursing.  She is known as Matron Bains.  The two nursing homes are called St Anne’s and Centenary.  It had been decided to refurbish St Anne’s.  Matron Bains decided that new commode chairs should be obtained to replace the existing ones which had a seat which was heavy to remove.  She had also decided to use commode pots in commode chairs instead of bed pans.

3. A brochure had been published advertising AMC products including the Grevillea commode chair.  Matron Bains had seen the brochure.  She was attracted by the fact that it could be used with commode pots.  On 14 January 1997 she rang the plaintiff enquiring about the Grevillea chair.  In the course of the conversation, Matron Bains asked whether commode pots could be used with the chair.  The plaintiff said that they could.  She asked for a sample chair to be sent to St Anne’s for inspection.  The plaintiff agreed.  There was a dispute as to the conditions on which the sample chair was provided.  Matron Bains gave evidence that the plaintiff had said that, if the chair had any smells when returned, the nursing home would be required to keep it.  The plaintiff denied that he had imposed such a condition.  He said that he would not have done so because he knew that the chair was being examined for its suitability.  The magistrate made no finding on this issue.

4. The chair was sent to the nursing home on 15 January and was inspected by a number of people.  The inspection occurred over a period of about three to four days.  The inspection was only visual.  It did not extend to fitting a pan or pot in the chair and testing it to assess its suitability.  This was surprising, given that it was intended to use commode pots and not bed pans which had previously been used at St Anne’s.  Although St Anne’s used bed pans and not commode pots, commode pots could have been obtained from the Centenary Nursing Home.  According to Matron Bains, she was deterred from conducting a test because of the plaintiff’s condition that the chair should not smell when returned.  The chair was approved.  The defendant decided to buy 60 Grevillea commode chairs.  On 20 January 1997 Mr Quinn rang to say the chairs were suitable and placed an order for them.  The chairs cost $370 each.  The total cost was $22,200.  The chairs were delivered on 8 March 1997.

5. In the meantime, on 13 February 1997, Ms Baldwin, the deputy matron at St Anne’s, telephoned the plaintiff asking if commode pots could be used with the chairs as well as bed pans.  The plaintiff said that both could be used.  He suggested to Ms Baldwin that the defendant purchase the commode pots direct from the manufacturer of those pots, Douglas Bean (Australia) Pty Ltd, because it would be cheaper to do so.  The defendant purchased the pots from Douglas Bean (Australia) Pty Ltd.  The pots were delivered in mid-February.

6. Within about one week of delivery of the commode chairs on 8 March 1997, the staff at the nursing home experienced problems with the use of commode pots in these chairs.  There was a gap at the front of the chair between the seat and the pot which allowed urine to escape into the receptacle which held the pot.  There was, however, no evidence of the extent of the problem.  Matron Bains telephoned the plaintiff complaining of the problem.  The telephone call from Matron Bains to the plaintiff had occurred some time before 18 March.  Neither the plaintiff nor Matron Bains could specify the date of that call.  It was her evidence that the plaintiff acknowledged that the gap was an existing problem and that he would speak to the manufacturer to try to resolve it.  The plaintiff’s evidence was that he had told Matron Bains that the problem had not occurred before but he would speak to the manufacturer to try to resolve it.  The magistrate accepted the plaintiff’s evidence, in my view, correctly.  It is highly unlikely that a supplier would admit that it was aware of an existing problem.  It is inconsistent also with the plaintiff’s unchallenged evidence that these chairs had been supplied to other users and no complaint had been received.

7. On 12 March 1997 the defendant drew a cheque to pay for the chairs and sent it to the plaintiff.  On 18 March 1997 the defendant countermanded payment of the cheque.  The plaintiff presented the cheque for payment on 18 March.  The cheque was dishonoured.

8. The plaintiff told AMC of the problem.  AMC manufactured an adaptor to seek to rectify the problem.  The adaptor was designed to bridge the gap between the chair and pot and prevent leakage or spillage.  It proved to be unsuccessful.  On 15 April 1997 Mr Quinn sent a facsimile message to the plaintiff advising that the adaptors were unsatisfactory.  On 21 April 1997 Mr Quinn telephoned the plaintiff and in a short conversation repeated that the adaptors were unsatisfactory and said that the defendant was going to return the chairs.  Mr Quinn confirmed these assertions by a facsimile message sent to the plaintiff on 24 April.  The plaintiff consulted AMC whose solicitors informed the defendant the chairs could not be returned.  The chairs have not been returned.

9. The plaintiff issued proceedings claiming the cost of the commode chairs. He relied on two causes of action. The first was that he was an unpaid seller. The second was grounded on s 76 of the Cheques and Payment Orders Act, 1986 (Cth) which entitles the holder of a cheque to recover damages where a cheque has been dishonoured.  The defendant had a number of grounds of defence.  It asserted that the chairs were not fit for the purpose nor of merchantable quality in breach of the conditions implied by s 14 of the Sale of Goods Act, 1895; it asserted that there had been misrepresentations in breach of s 7 of the Misrepresentation Act, 1972 and in breach of ss 56 and 63 of the Fair Trading Act, 1987; it also relied on the Manufacturers Warranties Act, 1974.  The magistrate held that the commode chairs were of merchantable quality and fit for the purpose.  He held that there had been no misrepresentation so that the defendant was not entitled to rely on either the Misrepresentation Act or the Fair Trading Act.  He held that the Manufacturers Warranties Act did not apply. He held that the defendant was liable to pay the defendant for the cost of the chairs. He also held that the defendant was liable pursuant to s 76 of the Cheques and Payment Orders Act.  From this decision the defendant appeals to this court.

10. It was central to the defendant’s case, both on the appeal and at first instance, that the chairs were not fit for the required purpose.  The defendant relied on the fact that the brochure advertising these chairs stated “All commode bases will accept the commode pots or bed pans”.  It relied also on the fact that it had made known to the plaintiff the fact that it wished to be able to use commode pots with these chairs.  There was no doubt that the chairs are suitable for use both with commode pots and bed pans.  In that respect, there is no breach of any warranty and the chairs are entirely fit for the purpose.  For like reasons, the chairs are of merchantable quality.

11. Although not expressly stated, it was implicit in the defendant’s case that the required purpose of these commode chairs was that they would not permit any leakage or spillage.  It asserts that the chairs were not fit for that purpose because the gap between the chair and the pot permitted leakage into the fibreglass base of the chair.  There are several difficulties with that submission.

12. Section 14(1) of the Sale of Goods Act requires the buyer to make the particular purpose known to the seller, either expressly or by implication.  A liberal interpretation has been given to s 14(1) both as to making known the particular purpose and as to reliance on the seller: Cammell Laird & Co Ltd v The Manganese Bronze and Brass Co Ltd [1934] AC 402 per Lord Wright at 422. The purpose must be made known with sufficient particularity to enable the seller to identify the characteristics which the goods need to possess to fit them for that purpose: Henry Kendall & Sons v William Lillico & Sons Ltd [1969] 2 AC 31 per Lord Reid at 79. There is no need to specify the purpose where there is only one purpose for which the goods can be used: Priest v Last [1903] 2 KB 148; Grant v Australian Knitting Mills [1936] AC 85 per Lord Wright at 99. The purpose is not necessarily a narrow or closely particularised purpose but it must be stated with sufficient particularity to show the seller the extent and manner in which his skill and judgment are relied on: Henry Kendall & Sons v William Lillico & Sons Ltd per Lord Pearce at 114 - 115 and Lord Wilberforce at 123; Ashington Piggeries Ltd v Christopher Hill Ltd [1972] AC 441 at 476 - 477, 486, 496 - 497, 506 - 507. Reliance must be affirmatively shown (see Lord Wright at 423) but the reliance on the seller’s skill or judgment need not be total or exclusive: see Lord Wright at 427 and Ashington Piggeries Ltd v Christopher Hill Ltd (supra) per Lord Hodson at 468.  In many cases, the reliance on the seller will arise by implication.  As Lord Wright said in Grant v Australian Knitting Mills Ltd (supra) at 99:

    “The reliance will seldom be expressed: it will usually arise by implication from the circumstances: thus to take a case like that in question, of a purchase from a retailer, the reliance will be in general inferred from the fact that a buyer goes to the shop in the confidence that the tradesman has selected his stock with skill and judgment:  ...”

Thus, the question whether the buyer has stated his purpose and has relied on the seller’s skill or judgment will be a question of fact to be answered by examining all of the circumstances leading up to the selling transaction: Ashington Piggeries Ltd v Christopher Hill Ltd (supra) per Lord Wilberforce at 496; Dependable Motors Pty Ltd v Ashford Shire Council (1959) 101 CLR 265 at 277, 283 and 289.

1. In this case, the defendant did not make its purpose known to the plaintiff.  It did not in any respect indicate any purpose to the plaintiff beyond stating that it wanted a commode chair which would accept commode pots and bed pans.  The Grevillea chair entirely satisfied that purpose.  The defendant did not say or do anything which expressly indicated that its purpose was to acquire commode chairs which do not permit leakage or spillage.  Nor could that purpose be inferred or implied from the facts and circumstances of this transaction.  Indeed, the facts and circumstances of the transaction point to a contrary conclusion.

2. First, as already mentioned, so far as the plaintiff knew, all that the defendant required was a commode chair which would accept both commode pots and bed pans.  The chair satisfied that purpose.  Before the chairs were delivered, three officers of the defendant spoke to the plaintiff at different times concerning the Grevillea chair.  They were Matron Bains, Mr Quinn and Ms Baldwin.  None of them specified that they wanted a commode chair which would not allow leakage or spillage.  The only concern that they expressed was that the chair would accommodate both commode pots as well as bed pans.  It is not possible to infer from the circumstances that they were looking for a chair which prevented spillage or leakage because there were difficulties in using commode chairs.  The evidence showed that it was extremely difficult for staff in nursing homes for elderly people to ensure that there would be no leakage or spillage of urine or faeces.  Much depended on how the resident was positioned on the commode chair.  When it ordered these chairs, the defendant was using a commode chair which had no base below the commode pot or bed pan.  If the user of the chair was not properly oriented on it, leakage or spillage could occur and fall to the floor.  The Grevillea chair had the advantage of having a fibreglass base which housed the commode pot or bed pan so that any leakage would be contained within the fibreglass base.  The fibreglass base could be easily removed for cleaning.

3. Secondly, there was no warranty by the plaintiff that the commode chair would prevent leakage or spillage.  Indeed, it could be inferred from the brochure that it would not be entirely avoided.  The brochure listed a number of features of the commode chair.  Immediately above the warranty, “All commode bases will accept commode pot or bed pan” appeared another warranty, “All commode bases are easy to remove for cleaning”.  The base of the commode chair housed the commode pot or bed pan.  It is reasonable to infer from the reference to removal for cleaning that spillage might occasionally occur causing the need for cleaning.

4. Thirdly, the defendant had requested a sample chair for inspection.  The plaintiff knew that the defendant was an experienced operator of nursing homes.  Nothing was said or done which indicated that the defendant was relying on the plaintiff’s skill or judgment.  The fact that the initial inquiry about these chairs and the request for sample chairs had been made by the matron of the nursing home would have indicated to the plaintiff that the defendant was not relying on his skill or judgment but, instead, was making its own assessment of the utility of the chairs.  The inspection of these chairs by the defendant indicated that it was not relying on the plaintiff’s skill or judgment: H. Beecham & Co Pty Ltd v F. Howard & Co Pty Ltd [1921] VLR 428 at 433; Laing v Keer [1930] NZLR 586 at 591. The defendant had the opportunity of testing the chair with both a commode pot and a bed pan. Both were available to it. It did not conduct any test. It is apparent from the evidence that the defendant was attracted by the aesthetics of the chair, and the fact that, unlike its existing commode chairs, it did not have a heavy seat. Had the defendant carried out tests, it is likely that it would have ascertained that the chairs could not entirely prevent spillage or leakage and decide whether it wished to proceed to order the chairs. Inspection does not necessarily displace an inference that the buyer has relied on the skill and judgment of the seller but in this case it does.

5. For all of these reasons the magistrate was correct in concluding that there was no implied condition that the chairs were fit for the particular purpose of preventing spillage or leakage.  For like reasons, the magistrate was correct in concluding that the chairs were of merchantable quality.

6. The magistrate was also correct in concluding that there was no breach of either the Misrepresentation Act or the Fair Trading Act.  Nothing in the brochure, or in anything said by the plaintiff, misrepresented the true position.  The chair had all of the features which were stated in the brochure.  In particular, it had the feature about which both Matron Bains and Ms Baldwin had enquired, namely, that it would accept both commode pots and bed pans.  Neither the brochure nor the plaintiff made any representation concerning the question of leakage or spillage.  The magistrate was also correct in holding that the Manufacturers Warranties Act did not apply since the plaintiff was not the manufacturer of the goods.  Furthermore, there was no breach of any of the statutory warranties prescribed by that Act.  Given the above conclusion, it is unnecessary to examine whether the magistrate was correct in concluding that the defendant was liable to the plaintiff pursuant to the Cheques and Payment Orders Act.

7. For all of these reasons, the appeal is dismissed.