Tamaqi Pty Ltd v Stokland Sheds Pty Ltd

[2023] NSWCATCD 36

Civil and Administrative Tribunal

New South Wales

• Amendment notes

Medium Neutral Citation:

Tamaqi Pty Ltd v Stokland Sheds Pty Ltd [2023] NSWCATCD 36

Hearing dates:

11 November 2022 and 6 March 2023

Date of orders:

08 May 2023

Decision date:

08 May 2023

Jurisdiction:

Consumer and Commercial Division

Before:

K Ross, Senior Member

Decision:

(1) Stokland Sheds Pty Ltd is to pay Tamaqi Pty Ltd the sum of $24,700.00 on or before 5 June 2023.

(2) The balance of the application is dismissed.

Catchwords:

CONSUMER CLAIM: Breach of contract and ACL – cost to complete – insufficient evidence of consequential loss

Legislation Cited:

Fair Trading Act 1987

Australian Consumer Law

Treasury Laws Amendment (Acquisition as Consumer - Financial Thresholds) Regulations 2020 (Cth)

Category:

Principal judgment

Parties:

Tamaqi Pty Ltd (Applicant)
Stokland Sheds Pty Ltd (Respondent)

File Number(s):

GEN 22/27705

Publication restriction:

unrestricted

REASONS FOR DECISION

1. On 28 June 2021, the applicant accepted the respondent’s $62,650.00 quote and paid a $32,100 deposit for the supply and installation of a shed, which was to be fitted out as stables for use in the applicant’s business. The respondent told the applicant that it would be completed within 8 to 10 weeks. On 14 March 2022, 75% of the frame was delivered, and the respondent attended for one day to erect it. On 21 June 2022, the applicant commenced these proceedings, seeking an order that the respondent complete the shed. At the first directions hearing, the respondent agreed to complete the shed without further payment, and to do additional work to compensate the applicant for the delay.

2. The respondent did not comply with its undertaking. On 6 September 2022, the applicant amended its claim to seek $100,000 in compensation for the cost to complete the shed, and as compensation for alleged losses flowing from the respondent’s breach of the agreement.

3. On 11 November 2022 the hearing commenced before me. The applicant was given an opportunity to provide further evidence in relation to its alleged loss by 25 November 2022.

4. On 24 February 2023, the applicant provided a bundle of documents. The respondent did not object to the Tribunal having regard to those documents and the hearing proceeded on that basis.

Jurisdiction

5. Jurisdiction is conferred on the Tribunal to hear and determine any consumer claim by s 79J of the Fair Trading Act 1987 (FTA) which provides:

79J GENERAL STATEMENT OF JURISDICTION

The Tribunal has jurisdiction, except as otherwise provided by this Division, to hear and determine a consumer claim the subject of an application under this Division.

6. The meaning of "consumer claim" is set out in s 79E of the FTA:

79E MEANING OF “CONSUMER CLAIM”

(1) For the purposes of this Part, a "consumer claim" means a claim by a consumer, for one or more of the following remedies, that arises from a supply of goods or services by a supplier to the consumer (whether or not under a contract) or that arises under a contract that is collateral to a contract for the supply of goods or services:

(a) the payment of a specified sum of money,

(b) the supply of specified services,

(c) relief from payment of a specified sum of money,

(d) the delivery, return or replacement of specified goods or goods of a specified description.

(2) For the avoidance of doubt, a reference in this Part to a consumer claim includes a reference to a claim by a consumer against a supplier (for example, a manufacturer or wholesaler) who is not the direct supplier of goods or services to the consumer if the claim arises from or in connection with the supply of those goods or services by the direct supplier to the consumer.

7. "Consumer" and “supplier” are defined in s 79D of the FTA as follows:

"consumer" means any of the following persons or bodies to whom or to which a supplier has supplied, or agreed to supply, goods or services (whether or not under a contract), or with whom or with which a supplier has entered into a contract that is collateral to a contract for the supply of goods or services:

(a) a natural person,

(b) a firm (within the meaning of the Partnership Act 1892 ),

(c) a small proprietary company (within the meaning of the Corporations Act 2001 of the Commonwealth),

(d) an owners corporation constituted under the Strata Schemes Management Act 2015 ,

(e) a company that owns an interest in land and has a memorandum or articles of association conferring on each owner of shares in the company a right to occupy under a lease or licence a part or parts of a building erected on the land,

(f) an incorporated association,

(g) an unincorporated body whose members are associated for a common purpose,

(h) a company limited by guarantee (other than a company limited both by shares and by guarantee).

8. "supplier" means a person who, in the course of carrying on (or purporting to carry on) a business, supplies goods or services.

9. I am satisfied that the claim is a consumer claim, arising from the supply by the respondent (a supplier) to the applicant (a consumer). The claim is brought within time. Subject to the matters discussed below, the Tribunal has jurisdiction to hear and determine it.

10. Section 28 of the Fair Trading Act 1987 applies the Australian Consumer Law (“the ACL”) as a law in New South Wales:

28 Application of Australian Consumer Law

(1) The Australian Consumer Law text, as in force from time to time:

(a) applies as a law of this jurisdiction, and

(b) as so applying may be referred to as the Australian Consumer Law (NSW), and

(c) as so applying is a part of this Act.

(2) This section has effect subject to sections 29, 30 and 31.

11. To the extent that the applicant brings the current claim, at least in part, relying upon the ACL, and I must consider whether the ACL applies. The ACL states that:

Acquiring goods as a consumer

(1) A person is taken to have acquired particular goods as a consumer if, and only if:

(a) the amount paid or payable for the goods, as worked out under subsections (4) to (9), did not exceed:

(i) $40,000; or

(ii) if a greater amount is prescribed for the purposes of this paragraph--that greater amount; or

(b) the goods were of a kind ordinarily acquired for personal, domestic or household use or consumption; or

(c) the goods consisted of a vehicle or trailer acquired for use principally in the transport of goods on public roads.

12. The sum of $40,000 was increased to $100,000 by the Treasury Laws Amendment (Acquisition as Consumer - Financial Thresholds) Regulations 2020 (Cth). Schedule 1 of the amending instrument inserted the prescribed amount of $100,000 for the purposes of s 3(1)(a) of the Australian Consumer Law. Clause 2 of the amending instrument lists the 1 July 2021 as the date of commencement. The Regulation now provides:

77A Prescribed amount—acquiring goods or services as a consumer

For the purposes of paragraph 3(1)(a) of the Australian Consumer Law, the amount of $100,000 is prescribed.

13. The applicant accepted the respondent’s quotation on 28 June 2021. The goods (shed to be used as stables in the applicant’s business) are not goods of a kind ordinarily acquired for personal, domestic or household use or consumption. At the time the goods were purchased, the increase in the prescribed amount for consumer goods had not taken effect. It follows that the consumer guarantees in the ACL did not apply to the goods, because the purchase price exceeded $40,000.

14. However, I am satisfied that I can make an order of up to $100,000. The limit on the Tribunal’s jurisdiction was also increased, and I am satisfied that the relevant date for me to consider the Tribunal’s jurisdictional limit is the date of the hearing.

Did the respondent breach the agreement by delaying in the supply and installation of the shed?

15. The respondent gave evidence that after he received the deposit from the applicant, he paid it to his supplier. The supplier appropriated the payment to the respondent’s outstanding account. The respondent was then unable to supply the shed to the applicant.

16. The respondent concedes that the consequent delay resulted in a breach of his agreement with the applicant. Indeed, even when given an opportunity following the directions hearing in July 2022, the respondent was unable to fulfill his obligations under the contract.

17. I am satisfied that the respondent has breached the agreement, The applicant was entitled to terminate the agreement and the respondent is liable to the applicant in damages.

What loss has the applicant suffered?

18. The applicant is entitled to compensation for the additional costs to complete the shed. The applicant’s evidence in this regard is that the completion of the shed will cost between $45,000 and $65,500. $30,550.00 remains owing under the original agreement. Thus the applicant claims to be entitled to compensation of between $14,450.00 and $34,950.00 for the completion costs.

19. The evidence on which the applicant relies has limitations. There is no independent expert evidence of the cost, nor any cogent evidence of what is required to complete the work. Both parties assumed what was required but had difficulty in explaining that during the hearing. However, there is no doubt that there will be costs incurred.

20. Doing the best I can, I will allow an average of the costs claimed, and allow compensation for the additional completion cost in an amount of $24,700.00.

21. The applicant also claims consequential loss as follows:

Contract worth $210,000 less $30,000 expenses = $180,000

OR

Racehorses in work @ in excess of $3500/month X 7 for 24 months = $588.000

22. The applicant provides a letter from its accountant which states:

“the business run by the Trust was significantly impacted and suffered an extreme loss of income earning potential as a result of not having the shed built as agreed. We note that since the owners of the business have put in extra stables (although these are not complete due to lack of funds) during the months of July and August 2022, there has been a dramatic increase in the business’ monthly income”.

23. I am not satisfied that the evidence supplied is adequate to enable me to make any award for consequential loss. The evidence supplied, such as it is, supports a finding that the delay has impacted the business’ income. There is no evidence however about the effect on the business’ profitability. The applicant was afforded the opportunity to provide evidence of this kind when the hearing was adjourned in November 2022, but the evidence supplied is insufficient.

24. I also note that the applicant had an obligation to mitigate its loss. It had not paid the respondent $30,550 of the agreed contract price. Had it terminated the agreement with the respondent in a timely manner, and used those funds to complete the shed, any loss would have been mitigated.

25. I decline to make any order for consequential loss.

Order

1. Stokland Sheds Pty Ltd is to pay Tamaqi Pty Ltd the sum of $24,700.00 on or before 5 June 2023.

2. The balance of the application is dismissed.

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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

Amendments

16 August 2023 - Formatting amendments.

Decision last updated: 16 August 2023