Bonanno v Blacktown Furniture Pty Limited t/as Harvey Norman Blacktown

Preliminary issue

1. The applicant provided a report that he claimed was from an expert, Graham Edwards dated 6 April 2021 and received on 12 May 2021. This document was objected to by the respondent, as it was provided in non-compliance with the directions that the applicant's documents were to be provided to the respondent by 27 March 2021, and the respondent disputed the qualifications of Mr Edwards to provide an expert opinion. Leave was not granted for the admission of the document for the oral reasons given by the Tribunal at the hearing on 7 July 2021.

Jurisdiction

1. This is a claim brought by the applicant as a "consumer" pursuant to Section 79D of the Fair Trading Act 1987 (NSW). The applicant is presumed to be a consumer pursuant to Section 79H of the Fair Trading Act, 1987. The claim involves the supply of goods to the applicant, a dining table, pursuant to Section 79G of the Fair Trading Act, 1987. The purchase was for the amount of $1,650.00 which is within the jurisdictional limit of $40,000.00, the supply of goods was within New South Wales and the claim is registered within 3 years of the cause of action. (ss 79K and 79L of the Fair Trading Act, 1987). I am satisfied that the Tribunal has jurisdiction to hear the claim.
2. The documents of the applicant are marked Exhibit A1 and the documents of the respondent are marked Exhibit R1.

Evidence of the applicant

1. The claim by the applicant is that on 14 April 2018 he purchased a Caesar 7 piece Dining Table from the respondent along with some other items which are not subject of this claim. The total purchase was $6,119.00. The dining table is a 200 centimetre rectangular shape, within weeks of the product warranty expiring a large crack appeared across the full width of the top of the dining table. Within months of the first crack appearing, another large crack appeared across the full width of the table top. The applicant had verbal discussions with the respondent concerning the table, concerning the replacement of the table top, however, a resolution could not be reached. A letter of demand was forwarded to the respondent by the applicant. The claim was registered on 26 January 2021 with the Tribunal and the applicant sought the replacement of the table top.
2. The photographs of the cracks on the table are found at Exhibit A1 [11-13]

Evidence of the Respondent

1. The respondent describes the purchase of a 7 piece dining table with 6 chairs. The table was ceramic with metal legs and the chairs are polyurethane. The price of the dining setting was $2,199.00 and was sold to the applicant for the price of $1,650.00. The goods were not reduced for any apparent defect, but to offer a discount to the applicant for the purchase of the other items not subject of this claim, the total purchase was $6,119.00. The table was delivered new in a box and free delivery was provided. The respondent told the Tribunal that the dining table came with a manufacturer's warranty of 12 months with the warranty ending on 25 April 2019.
2. The respondent was notified of the cracks in the table by the applicant on or around 19 August 2020 and provided a photograph of the cracks in the dining table. The dining table was at this time was 16 months outside the manufacturer warranty. The photographs were sent to the manufacturer for examination and assessment of the cracks in the dining table.
3. On 16 December 2020 the manufacturer conducted an inspection of the table at the applicant's residence where the manufacturer believed the applicant had failed to handle the product with proper care and has caused the damage. The respondent claims that the applicant did not provide a satisfactory explanation as to the cause of the cracks in the table and that it was defective or faulty workmanship.
4. The evidence of the respondent is that a natural product like timber may over time show a hairline crack, however, this did not apply to a ceramic top. On or about 6 January 2020 the manufacturer offered to replace the table top at the price of $350 plus GST.

Consideration

1. The primary issues in the claim is that the claim by the applicant is outside the manufacturer's warranty and that the damage to the product was not a manufacturing defect, but that the applicant was negligent in the care of the dining table and caused the cracks in the top of the table.
2. The Tribunal heard oral testimony from the applicant and Mr Patel. The applicant gave evidence that the dining table was not misused. He is a qualified engineer in construction and had 40 years of experience in the construction industry. He told the Tribunal that the fault with the dining table was delamination and that the dining table had poor bonding or laminate glue and an air bubble in it eventually led to the cracks in the table. He claims that the dining table was poorly manufactured.
3. The applicant was extensively cross-examined by Mr Patel as to the cause of the damage to the table being that the applicant lifted the table incorrectly and this caused the cracks. The applicant told the Tribunal that there was a brace in the table and so it couldn't crack. He denied moving the table and would clean around it due to its weight. The first time he saw the crack was when it was having its weekly dust off and clean.
4. The respondent relies on the terms and conditions in Exhibit R1 [3], there is a 12 month warranty from the time of purchase, "Furniture solutions accepts no responsibility for defects caused by incorrect assembly, mishandling, acts of god, general wear and tear,….exposure to extreme heat/cold, … misuse of products & defects caused by failure in duty of care for the product in accordance with the care instructions… " Duty of care… there is always a need from a consumer to help ensure long life of the product. Instruction manuals are designed with the nature of materials used in construction of the product… Regular maintenance and cleaning."
5. The maintenance and cleaning conditions are set out in the terms and conditions on the Product Manual. The applicant told the Tribunal that he did not receive the Product Manual, only instructions on how to assemble the dining table. He told the Tribunal that he maintained and cleaned the dining table and did not place hot items on the table.
6. I listened to the oral testimony of the applicant during his testimony and he was forthright with his answers to extensive cross examination, he did not contradict his evidence, and gave an honest account of how in his opinion that the cracks in the dining table were a manufacturing defect. He denied that he lifted the table causing the cracking in the table. I find that the applicant was a witness of credibility and I accept his evidence that he did not lift the table or cause damage to the table, and that he did not receive the Product Manual. The applicant had believed that the product had a 2 years warranty, had he received the Product manual he would have been aware that the product had 12 months warranty.
7. The reliance on manufacturer warranty and its expiry does not prevent the applicant from bringing a claim that the good was not of acceptable quality pursuant to Section 54 of the Australian Consumer Law (NSW) ("ACL"). Ace Action Motors Pty Ltd v Hoblos [2015] NSWCATAP 19. The goods must be reasonably fit for purpose.
8. Section of 54 of the ACL (NSW) provides the following: 54. Guarantee as to acceptable quality (1) If: (a) a person supplies, in trade or commerce, goods to a consumer; and (b) 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: (a) fit for all the purposes for which goods of that kind are commonly supplied; and (b) acceptable in appearance and finish; and (c) free from defects; and (d) safe; and (e) 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: (a) the nature of the goods; and (b) the price of the goods (if relevant); and (c) any statements made about the goods on any packaging or label on the goods; and (d) any representation made about the goods by the supplier or manufacturer of the goods; and (e) any other relevant circumstances relating to the supply of the goods.
9. The respondent relies on the manufacturer's opinion that the cracks in the dining table were caused by the applicant. The emails that the respondent relies upon are the emails from Matthew Capell, Customer Service, Furniture Solutions (Aust) Pty Ltd ("the manufacturer") on 19 August 2020 where the email states. "Its 1 year. This damage wouldn't be covered as its been caused by something the customer has done" and on 6 January 2021, "The inspection was booked and completed on 16/12 and we found no manufacturing fault. He was advised of this and I offered him a replacement top at cost as well."
10. There is no report from the manufacturer's technician or any other expert that the respondent could have engaged that provides the premises for the opinion that there was no manufacturing fault. For example, observations and reasons given by the technician that it was not a manufacturing defect. If the damage was caused by the applicant what evidence was there that the applicant caused the damage. The lack of a technical or expert report from the respondent and simply an email from Customer Service does not have grounds that support a finding that the damage was not a defect in the manufacture of the good.
11. The test as to whether goods are of an "acceptable quality" is an objective one; being taken from the perspective of a "reasonable consumer" (APS Satellite Pty Ltd (formerly known as Sky Mesh Pty Ltd) v Ipstar Australia Pty Ltd [2016] NSWSC 1898 (APS Satellite Pty Ltd) at [57]; Merck Sharp & Dohme (Australia) Pty Ltd v Peterson (2011) 196 FCR 145; 284 ALR 1; [2011] FCAFC 128). (b) The question for the "reasonable consumer" is whether the goods in question have the identified qualities enumerated in 54(2) to an "acceptable standard". This requirement is derived from the words "as a reasonable consumer … would regard as acceptable". (c) The "acceptable standard" is used as the yardstick against which the qualities of the goods are to be measured. It is ascertained by a consideration of the matters referred to in s 54(3); the nature of the goods, their price, any statement made about the goods on packaging or labels, any representations made about the goods by the supplier or manufacturer, and any other circumstance relating to their supply. (d) It is necessary the goods have all of the qualities identified in s 54(2) to the ascertained acceptable standard. Those qualities are that the goods are fit for all the purposes for which goods of that kind are commonly supplied, acceptable in appearance and finish, free from defects, safe and durable. (e) In the assessment of whether the goods meet that relevant standard, the reasonable consumer is taken to be fully acquainted with the state and condition of the goods (including any hidden defects of the goods). (f) If the goods supplied do not have all of the identified qualities to the acceptable standard, they will not be of an "acceptable quality". [143] In compendious terms, the issue is whether, objectively, the goods supplied (when taking into account their actual quality including any latent defects) are, to an acceptable standard, fit for all the purposes for which goods of that kind are commonly supplied, acceptable in appearance and finish, free from defects, safe and durable when measured by a standard which reflects the nature of the goods, their price, statements about the good as per their packaging, representations made about the goods and any other relevant circumstance. In Prestige Auto Traders Australia Ltd v Bonnefin [2017] NSWSC 149 at [132] N Adams J identified the manner in which s 54 should be applied in the following way: "The relevant test in s 54(2) of the ACL (NSW) of whether or not goods are of "acceptable quality" is an objective one based on whether a reasonable consumer who was aware of the "defects" in the goods at the time of the supply would have considered them to be of acceptable quality. There was no issue taken that the determination of what is objectively reasonable for a consumer to expect is to be made taking into account the relevant information known as at the time of the trial, including "after-acquired knowledge": Medtel Pty Ltd v Courtney (2003) 130 FCR 182; 198 ALR 630; [2003] FCAFC 151 at [66] and [70].'"
12. In Australian Competition and Consumer Commission v Jayco Corporation Pty Ltd [2020] FCA 1672 Wheelahan J said: "[25] … The standards under s 54(2) include that goods will be fit for all purposes for which goods of that kind are commonly supplied. This general standard of fitness for purpose is not dependent upon the consumer communicating any intended purpose to the supplier, or relying upon the supplier's skill or judgment. And, in relation to the general standard, it does not suffice that the goods will be fit for only some of those purposes. [26] The standard of acceptable quality in s 54(2) has as its reference point a construct, namely the objective standard of a reasonable consumer fully acquainted with the state and condition of the goods, including any hidden defects of the goods. The reasonable consumer sits with an array of other hypothetical persons who have been recruited by the law and by reference to whom objective standards are evaluated: see, Healthcare at Home Ltd v The Common Services Agency [2014] UKSC 49; 4 All ER 210 at [1]-[4] (Lord Reed JSC). Such a person has been described as an anthropomorphic conception of justice that is and must be the court itself: see Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696 at 728 (Lord Radcliffe). [27] The hypothetical question whether the reasonable consumer would have regarded the quality of the goods as acceptable is to be determined at the time of supply. However, the reference in s 54(2) to hidden defects has the consequence that for the purposes of determining that question, the reasonable consumer may be acquainted with information known at the time of trial: cf, Medtel Pty Ltd v Courtney [2003] FCAFC 151; 130 FCR 182 at [70] (Branson J, Jacobson J agreeing). The standard of acceptable quality prescribed by s 54(2) is not absolute, or a standard of perfection. It is tempered by what a reasonable consumer would regard as acceptable having regard to the several matters in s 54(3). These matters render the standard of acceptable quality elastic, and context specific: Contact Energy Ltd v Jones [2009] 2 NZLR 830 at [95] (Miller J). The significance of the components of the guarantee of acceptable quality will therefore vary with the circumstances of each case."
13. The respondent claims that the applicant has not provided admissible expert evidence that the dining table was not of acceptable quality. I have examined the photographs with the cracks in the dining table, the nature of the goods; and the price of the goods, being $1,650, the age of the dining table being 2 years and 4 months. I have also considered the evidence of the applicant that he is a witness of credibility and that claims he did not cause the damage to the dining table, did not lift it or place hot items on it.
14. I find that the evidence capable of satisfying the Tribunal that the dining table top was defective. A reasonable consumer would not have purchased the product if they were aware at the time of purchase of the defect, and that crack in the table top would appear within a period of 2 years and 4 months, having paid $1,650.00 for the dining table I am satisfied that the respondent has not complied with the guarantee that the product is of an acceptable quality pursuant to Section 54 of the ACL (NSW). I am satisfied that the cracks in the table top make the goods not fit for purpose, the respondent has not remedied the failure within a reasonable time and the costs sought of $285.00 are reasonable. Section 259 (2) of the ACL.
15. The applicant seeks the amount of $285.00, for the replacement of the table top, this appears to be a lesser amount than is sought in the respondent's documents to replace the table top. The amount of $285.00 is fair and equitable.
16. The Tribunal orders that the respondent is to pay the applicant the amount of $285.00 on or before 1 November 2021.

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 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 30 November 2021