Blazevic v Australian Paint Company Pty Ltd [2025] NSWCATCD 162;

1. Prior to 21 March 2023, the applicant sent an email to one or both of the respondents. Between 21 March 2023 and 6 June 2023, the applicant and Vijesh Maharaj exchanged email correspondence in relation to "Touchwood" paint purchased by the applicant.
2. Mr Maharaj was described as "Director Sales/Operations" of Omega in those emails.
3. On 10 May 2023, Mr Maharaj sent the following email to the applicant (underlining emphasis added):

Hi Ivan,

Without Prejudice

Omega Industries has evaluated your claim and is able to report that there are many variables that could have caused the coating to have failed.

1. Faulty Product

2. Weather on day of application.

3. Moisture content of Timber

4. Thickness of coating applied.

5. Exposure of coating to weather before full cure.

6. Unsealed top of fence leading to increased moisture in timber

Omega Industries PL has manufactured over 5,000 litres of Touchwood Paint in the last 6 months that has been sold around Australia. Every batch manufactured has been manufactured to a specification.

To date we have not received any other complaint on this product.

Since I have previously provided you my assurance to assist, I am prepared to help you out as a gesture of goodwill from Omega Industries and a valuable customer of our distributor Bargain Warehouse. Please note Omega Industries accepts no liability in this matter.

I will provide you with $4,000 to cover your labour and free material to remediate the affected area.

I must insist that being an external area, the work must be carried out in good weather and ensure points 2-6 (above) are addressed.

This offer is on the basis that you sign a release form.

I will wait to hear from you.

1. On 6 June 2023, the applicant responded to Mr Maharaj in the following terms:

Dear sir,

As per our discussion we will accept your offer of financial assistance and the supply of paint products. I will go to the distributor at Punchbowl and you will confirm with them.

Regards Ivan

1. There is no dispute that subsequent to this exchange of emails, the applicant received a not insubstantial amount of product (apparently paint and other materials) for which he was not required to pay. Both the applicant and Mr Shetty agreed at the hearing that the applicant had collected from a distributor product with a value of approximately $4,300. A letter from APC to the applicant dated 26 March 2025 puts the value at "$4,397 for various products collected from the distributor under the Australian Paint Company's account".
2. On 7 July 2023, the applicant sent a text message to Mr Maharaj stating "Hi Vijesh, if you can transfer the $4,000 to pay the painters to [ACCOUNT DETAILS] thanks Ivan". Mr Maharaj responded "I'm paying the store". The applicant responded "Please look at your email to me. You said paint and $4k towards painting". Mr Maharaj responded "Last discussion was we supply materials to the value. I'm away overseas at the moment and connection is not the best".
3. There is little evidence as to what took place over subsequent months. In about early 2024, the applicant sent a letter styled "Letter of Demand" referencing the above communications and demanding the sum of $29,600. As earlier stated, this application was lodged on 4 March 2024.

1. The issue of which party is the appropriate respondent to the claim has been argued by the parties throughout the life of this application.
2. At least some of the confusion has been the result of the respondents' conduct. On its face, the 10 May 2023 email states that Omega "manufactured" Touchwood Paint the subject of the applicant's complaints. Likewise, an application by Omega dated 28 March 2024 to set aside orders previously made by the Tribunal referred to "one of our products".
3. As opposed to this, it is clear on the face of the Touchwood Paints product that it is in fact manufactured by APC.
4. It is clear from the evidence adduced by the respondents that APC and Omega Industries are related entities. Taking the evidence as a whole, the Tribunal is comfortably satisfied that:

(1) APC was the manufacturer of the Touchwood Paint and, to the extent that the applicant had or has any cause of action against any party to this application in respect of that product it was or is APC; and

(2) To the extent that Omega engaged in communications, negotiations and agreements with the applicant from early 2023, it did so in a capacity as agent for APC. The conduct by those acting for and representing the respondents is consistent with that conclusion and with the common practice of those involved in businesses acting without particular regard to specific corporate entities.

1. For that reason, Omega should be removed as a respondent to the application.

Is there an agreement between the applicant and APC regarding the dispute over the Touchwood Paint?

1. The question of whether parties have reached a binding agreement is to be determined objectively and is a question of fact.
2. The email correspondence set out above as between Mr Maharaj on behalf of APC on the one hand and the applicant on the other hand evidences a coinciding offer on the part of APC and an acceptance by the applicant. The agreement is certain in that it does not lack completeness or finality or clarity. The agreement is supported by consideration in that, in return for the sum proffered by APC, APC is receiving the resolution of the applicant's claims regarding the Touchwood Paint. That is plain from the reference by Mr Maharaj to "a release form" and the subsequent acceptance by the applicant. The release by the applicant of his claims against APC in relation to Touchwood Paint is at the least an implied term of the agreement, arising "from the nature of the contract itself as expressed in the words of the contract" or from considerations of business efficacy: see Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153 at 164. Having regard to the terms of the emails exchanged, a reasonable person in the position of each party would think that the other intends to create legal relations.
3. Mr Maharaj's reference to a "release form" as the "basis" of the offer does raise one complication. What is there referred does not, on an objective analysis of the communications, contemplate entry into a formal contract so issues relating to Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353 do not arise.
4. The requirement for a "release form" ought to be construed as a condition precedent to the performance by APC of the contract. Courts will only construe a condition as a condition precedent to the existence of a contract where the contract, read as a whole, compels such a conclusion: see Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537 at 552.
5. Given that, as Mr Shetty acknowledged at the hearing, APC caused a supplier to provide a not insubstantial amount of product to the applicant after this agreement was achieved, despite not receiving the "release form", the conclusion that there was a waiver of that condition is difficult to escape. As Mason CJ noted in Commonwealth v Verwayen (1990) 170 CLR 394 at 406, "Waiver is unintentional act done with knowledge whereby a person abandons a right by acting in a manner inconsistent with that right". In the present case, the act of making those requisite payments was clear, unequivocal and obviously communicated to the applicant: see Bowen v Alsanto Nominees Pty Ltd [2011] WASCA 39 at [16] and [98].
6. For the above reasons, the Tribunal is satisfied that the parties resolved the dispute regarding the Touchwood Paint by the agreement evidenced by the relevant emails (Settlement Agreement). There remains a dispute as to the content of the Settlement Agreement and whether an order ought be made in relation to any alleged breach of that agreement. Before addressing that matter it is necessary to briefly address whether the Tribunal in fact has jurisdiction to hear and determine that particular dispute.

1. The Tribunal has statutory jurisdiction only. It has the jurisdiction and functions that are conferred or imposed on it by the Civil and Administrative Tribunal Act 2013 (NSW) and other legislation, as well as regulations and statutory rules.
2. Part 6A of the Fair Trading Act 1987 (NSW) (FTA) gives the Tribunal jurisdiction in respect of "consumer claims". The meaning of "consumer claim" is set out in s 79E of the FTA:

(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.

1. There is no issue that there was a supply of goods to the applicant as consumer (noting the presumption arising under s 79H of the FTA), being the supply of the Touchwood Paint to the applicant by Bargain Warehouse. The evidence also establishes that APC was the manufacturer of the Touchwood Paint for the purposes of s 79E(2) above and thereby a supplier, although not the direct supplier. The applicant claims the payment of a specified sum of money, being a remedy set out in s 79E(1).
2. The Tribunal is comfortably satisfied that the dispute as to whether there has been a breach of the Settlement Agreement is either a claim that "arises from a supply of goods" or falls within the second limb of the definition of consumer claim in s 79E(1) of the FTA, namely a claim "that arises under a contract that is collateral to a contract for the supply of goods or services" (noting the matters set out by Barker J in Metz Holding Pty Ltd v Simmac Pty Ltd (No 2) [2011] FCA 981 at [635]).
3. The Tribunal has jurisdiction to hear and determine the dispute regarding the Settlement Agreement.

1. The critical term of the Settlement Agreement is the paragraph of Mr Maharaj's email which is in the following terms:

I will provide you with $4,000 to cover your labour and free material to remediate the affected area.

1. The Tribunal did not understand either party to contend that APC had not performed its obligation to provide "free material to remediate the affected area". It is clear on the evidence that material in a sum exceeding $4,000 has been provided to the applicant by or on behalf of APC.
2. The real contention between the parties was whether APC had performed the whole of what it was required to do under the Settlement Agreement. APC contended that it had. The applicant contended that APC had bargained to provide that material and $4,000 to cover labour costs.
3. The terms of the Settlement Agreement must be given the meaning that a reasonable businessperson would understand the words to mean. That requires a consideration of the language used by the parties, the surrounding circumstances objectively known to them and the commercial purpose or object to be secured by the contract: see Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 at [35].
4. The Tribunal considers that the language used by Mr Maharaj strongly supports the interpretation for which the applicant contends. The use of the conjunctive "and" tends towards an interpretation that the covering of labour and the free material are cumulative. The email speaks of providing the sum of $4,000 and free material. An ordinary and businesslike reading of the paragraph supports the interpretation that APC were to provide:

(1) $4,000 to cover labour; and

(2) free material to remediate the affected area.

1. Had the paragraph not included the word "free", there may have been a basis for the interpretation for which APC contended, but the language as in fact used provides no such support.

1. APC has thus provided the free material to remediate the affected area but not the sum of $4,000 to cover labour. APC has breached the Settlement Agreement and the applicant is entitled to damages for that breach. Damages for breach of contract are designed to compensate the applicant for the loss he has suffered by reason of the breach. The contractual measure of damages aims to restore the injured party to the position in which he would have been had the contract been fully performed. In respect of the Settlement Agreement, the applicant would have received an additional $4,000. The Tribunal ought award the applicant the sum of $4,000.
2. The applicant's request for relief as articulated in the documents upon which the applicant relied at hearing went substantially further that that and were in the following terms:

• $29,600 for remediation costs, as previously awarded...
• $8,000 for the breached compensation agreement, including the $4,000 labour payment [APC] failed to provide ... a breach distinct from my $29,600 remediation claim, which already credits the $4,000 in materials ... In Brown v Retravision [2016] NSWCATCD, NCAT awarded $5,000 for a breached compensation agreement in addition to $3,500 in repair costs, recognizing the separate harm. Similarly, in Smith v Dulux Australia [2018] NSWCATCD, NCAT awarded $2,000 for a breached settlement alongside $10,000 for repairs ...
• Costs of $10,000 for Omega's bad-faith conduct ... In Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120, NCAT awarded $12,500 in costs for bad-faith conduct involving misleading information. Similarly, in Keen v Keen [2018] NSWCATAP 140, $8,000 was awarded for misleading submissions and failure to disclose documents ...

1. With respect, that submission misunderstands the effect of the Settlement Agreement. By the Settlement Agreement, the applicant agreed to accept free material and $4,000 from APC. The price for that was the release of his claim against APC in relation to the Touchwood Paint. As set out at [19] above, it is at the least an implied term of the Settlement Agreement that the applicant agreed to release APC in respect of that claim.
2. For those reasons, the further claims to relief articulated by the applicant do not arise. This issue was raised with the applicant during the hearing. However, the Tribunal assured the applicant that it would locate and consider the authorities referenced at [36] above. The Tribunal has sought to locate those authorities but has been unsuccessful. The authorities for which a complete medium neutral citation was not provided do not appear to exist. Of the authorities for which a complete medium neutral citation was provided, the citation [2018] NSWCATAP 140 relates to a wholly different decision than that stated in [36] above (being Tang t/as Better Aquariums v Karatasoulis [2018] NSWCATAP 140) and there is no reference to an award of $8,000 for misleading submissions or a failure to disclose documents. Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 is indeed a report of a decision of the Appeal Panel. In that decision, the Appeal Panel declined to make an order for costs and there is no reference to the Tribunal awarding $12,500 in costs for bad-faith conduct involving misleading information.
3. Having regard to the above, it appears likely that the above references may be a product of hallucination by a large language model. This was the issue recently identified by the Chief Justice in May v Costaras [2025] NSWCA 178 at [15]- [17]. As Richards JA noted even more recently in Stewart v Good Shepherd Australia New Zealand [2025] VSCA 206 at [63], whether or not artificial intelligence was responsible for the phantom authorities and citations, the relevant party "is responsible for the accuracy of the documents she filed with the Court and should have taken greater care to ensure that they were not misleading and did not involve the Court and the other parties in wasted time and effort". In any event, for the reasons set out at [37] above, the applicant is not entitled to any relief save for an order that APC pay the sum of $4,000.
4. To the extent that the applicant seeks his costs, section 60 of the Civil and Administrative Tribunal Act provides that each party to proceedings in the Tribunal is to pay the party's own costs, but that the Tribunal's discretion to award costs may arise when there are "special circumstances". "Special circumstances" are circumstances that are out of the ordinary but they do not have to be extraordinary or exceptional circumstances: CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [32].
5. There are no circumstances or conduct disclosed by the present proceedings to take the matter out of the ordinary. The Tribunal will not award costs.

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.