Wallace Bishop Pty Ltd v Sood

[2014] QCATA 53

CITATION: Wallace Bishop Pty Ltd v Sood [2014] QCATA 53

PARTIES:	Wallace Bishop Pty Ltd (Appellant)
V
Rohit Sood (Respondent)

APPLICATION NUMBER: APL574 -13

MATTER TYPE: Appeals

HEARING DATE: On the papers

HEARD AT: Brisbane

DECISION OF: Senior Member Stilgoe, OAM

DELIVERED ON: 31 March 2014

DELIVERED AT: Brisbane

ORDERS MADE:

1.    Leave to appeal granted

2.    Appeal allowed

3.    The decision of 22 November 2013 is set aside.

4.    Wallace Bishop Pty Ltd must make Rohit Sood’s Tag Heuer Carrera Day Date Automatic watch available for collection within 14 days of today’s date.

5.    Rohit Sood’s application is otherwise dismissed.

CATCHWORDS:

APPEAL – LEAVE TO APPEAL - MINOR CIVIL DISPUTE – where expensive watch stopped working 18 months after purchase – where watch repaired – where owner rejected repaired watch – whether major failure – whether owner entitled to reject repaired watch - whether grounds for leave to appeal

Australian Consumer Law ss 259, 260, 262

Pickering v McArthur [2005] QCA 294

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 (Qld) (QCAT Act).

REASONS FOR DECISION

1. Just before Christmas in 2011, Mr Sood bought a Tag Heuer watch from Wallace Bishop. He paid $4,000 for a “Carrera Day Date Automatic”.

2. On 19 June 2012, Mr Sood brought the watch back to Wallace Bishop because it had stopped working. Wallace Bishop repaired the watch; Mr Sood refused to accept it. Mr Sood wanted a brand new watch or his money back. Two Justices of the Peace ordered that Wallace Bishop provide Mr Sood with a new watch, of the same make and model, or $4,000 within 21 days of the date of their order.

3. Wallace Bishop wants to appeal that decision. It says that it complied with its warranty obligations, that the checks and adjustments to the watch were minor and that the watch is in good working order.

4. Because this is an appeal from a decision of the tribunal in its minor civil disputes jurisdiction, leave is necessary. The principles the appeals tribunal applies when considering an application for leave to appeal are as summarised by Keane JA (as His Honour then was) in Pickering v McArthur[1]:

   There are numerous authorities, in varying language but with unvarying emphasis, that leave to appeal will usually be granted where there is a reasonable argument that the decision is attended by error, and an appeal is necessary to correct a substantial injustice to the applicant caused by that error.

   [1][2005] QCA 294 at [3].

5. The Australian Consumer Law implies a guarantee that goods sold are fit for the purpose. The learned Justices found that the watch was not fit for the purpose because it stopped working. They also found that, for a watch sold at this price, Mr Sood’s actions were within the rejection period[2]. That is, the learned Justices found that it was reasonable to expect that, after 18 months, a watch of this price and quality should still be fit for the purpose - it should still work.

   [2]Australian Consumer Law s 262(2).

6. None of that is controversial. The learned Justices also correctly identified that, if the breach of guarantee was a major failure[3], Mr Sood could notify Wallace Bishop that he rejected the goods and recover damages[4].

   [3]s 260.

   [4]s 259.

7. There are a number of difficulties with the learned Justices’ decision. Firstly, they did not identify the basis on which the stopped watch was a major failure to comply with a guarantee. The only possible basis for Mr Sood saying that there was a major failure is that he would not have bought the watch if he was fully acquainted with the nature and extent of the failure. The test in the Australian Consumer Law is not what Mr Sood thought, but what a reasonable consumer would have done[5]. The learned Justices did not address that test.

   [5]Section 260(a).

8. That leads to the second problem in the learned Justices’ decision. Mr Sood did not reject the goods until after the watch was repaired. He rejected the watch because he thought Tag would repair the watch, not Wallace Bishop[6]. He was not satisfied with Wallace Bishop’s explanation of the nature of the fault[7], and, to his mind, the fact that it failed once affected its dependability[8] and its value[9]. He did not accept that, because the watch was under warranty, Wallace Bishop could repair it[10]. He did not want to accept a watch that had been opened because he did not believe that the waterproofing would be intact, even though Wallace Bishop conducted a pressure test[11].

   [6]Transcript page 1-4, lines 41-42.

   [7]Transcript page 1-5, lines 10-11.

   [8]Transcript page 1-5, line 15.

   [9]Transcript page 1-5, line 18.

   [10]Transcript page 1-5, lines 30 – 33.

   [11]Transcript page 1-13, lines 43-47.

9. Mr Sood did not take the watch back to Wallace Bishop and say, as the Australian Consumer Law permits: Here’s your watch back. I would not have bought it at all if I had known that it would stop working after 18 months. What he did was take it back to be repaired[12] and then reject the repair. The learned Justices could not, in those circumstances, be satisfied that the failure was not a major failure.

   [12]Transcript page 1-3, lines 38 – 41.

10. Leave to appeal should be granted and the appeal allowed. The decision of 22 November 2013 should be set aside. Mr Sood should collect his watch from Wallace Bishop. His claim is otherwise dismissed.

11. Even though Wallace Bishop has succeeded in its application for leave to appeal, there are lessons it should learn from this decision. In its application for leave to appeal, it pointed out that its correct name was Wallace Bishop Pty Ltd, not Wallace Bishop Jewellers. Mr Sood’s error was entirely understandable. The customer repair receipt issued to Mr Sood is headed “Wallace Bishop Jewellers”. There is no reference to Wallace Bishop Pty Ltd. There is no ACN or ABN as required by the Corporations Law. Mr Sood had no idea of the correct name of the entity with whom he was dealing.

12. Mr Downing, who appeared on behalf of Wallace Bishop at the hearing, offered an “extended warranty”[13] to settle Mr Sood’s claim. That demonstrates a basic misunderstanding of a supplier’s obligations under the Australian Consumer Law. The fact that there is a manufacturer’s guarantee period, or that Wallace Bishop offers a guarantee is simply some evidence of what a court or tribunal may find is the “rejection period”. A supplier is not entitled to rely on those guarantees to avoid liability if a court or tribunal finds that, having regard to the type of goods, the use to which the goods are likely to be put, the length of time it is reasonable for them to be used and the amount of use, the rejection period should be much longer.

    [13]Transcript page 1-25, line 44 to page 1-26, line 16.

13. As the learned Justices observed[14], Mr Sood bought an expensive watch. Mr Sood told the tribunal that it was sold as an “outdoorsy watch”[15]. It is possible, therefore, that the rejection period may be much longer than the stated warranty period and Wallace Bishop needs to adjust its thinking accordingly.

    [14]Transcript page 1-32, lines 13-14.

    [15]Transcript page 1-14, line 38.