Boyer v FRP Pools and Spas Pty Ltd

Jurisdiction

1. The applicants are a consumer as defined in s 4 of the FT Act and the claim arises from the manufacture of goods supplied to a consumer.
2. The applicants contracted with a third party, Ezy Pools, for the installation of a pool which was manufactured by the respondent and installed in NSW. The contract was dated 4 August 2014 for a contract price of $42,435.
3. The applicants' first noticed an issue with their pool in early January 2016. The respondent inspected the applicants' pool on 3 February 2016 and it was noted that there were issues with the gel coating, crazing of the pool and an internal deflection of the pool wall.
4. The application has been brought within time, being within three years from when the cause of action 'first accrued': s 79L(1)(a) and the goods have been supplied within the last ten years: s 79L(1)(b) FT Act.
5. Section 79N of the FT Act provides the Tribunal with jurisdiction to make orders in relation to a consumer claim.
6. The applicants consent to the jurisdictional limit of $40,000 pursuant to s 79S of the FT Act.

Procedural history

1. The applicants lodged their application to the Tribunal on 14 August 2018.
2. The matter was listed for conciliation and hearing on 19 September 2018 and the Tribunal granted leave for the applicants' to be represented by Mr Riordan. The matter was adjourned to a later hearing date.
3. The matter was listed for further conciliation and hearing on 15 November 2018 and the parties were unable to reach agreement in conciliation. The matter was adjourned and directions given to the parties for the filing and serving of evidence in support of their claim and the Tribunal noted that the parties agreed for an on-site inspection to take place on 13 December 2018.
4. The matter was listed for further conciliation and hearing on 15 February 2019. Further directions were made by the Tribunal for the applicants to provide 'Points of Claim', for the respondents to provide 'Points of Defence' and for both parties to provide evidence in the form of witness statements and/or expert reports. The parties were advised that witnesses were to attend the hearing unless advised by the other party that they were not required.
5. The matter was listed for hearing at Deniliquin on 14 May 2019.

Evidence

1. Mr Riordan appeared on behalf of the applicants who were also in attendance at the hearing. Mr Riordan gave evidence under an affirmation.
2. The applicants filed and served documents in support on their claim and these were admitted into evidence and marked 'A1'.
3. The applicants sought to rely on the Writ filed with the Supreme Court of Victoria by the respondent against the manufacturer of the gel coat of the applicants' pool, Allnex Resins Australia Pty Ltd. This document had not been filed and served in accordance with the Directions provided by the Tribunal. The respondent opposed to the late admission of the document claiming that they would be prejudiced and that the Writ was not evidence of the applicants' claim.
4. The Tribunal admitted the Writ into evidence as the respondent had not established that they were prejudiced by the late admission of the document as it was within their knowledge. In addition, the Tribunal would be able to determine the weight to be given to the document which consisted of pleadings only. The document was marked 'A2'.
5. Mr Palmer, General Manager, appeared on behalf of the respondent. Mr Palmer gave evidence under oath.
6. The respondent filed and served evidence in defence of the claim.
7. The applicants opposed the respondent relying on the documents as they stated that they had not received a hard copy of the documents in compliance with the Directions given by the Tribunal. The applicants' evidence was that there documents were received on 10 May 2019 rather than 7 May 2019 as ordered.
8. The respondent's evidence was that they had caused an email to be sent to the applicants' on 7 May 2019 and documents had been posted on that day.
9. The Tribunal admitted these documents into evidence as the applicants had not established that they had been prejudiced by their late arrival. The applicants had the opportunity of thoroughly reviewing the documents prior to the hearing date. The Tribunal also considered the guiding principle in s36(1) of the Civil and Administrative Tribunal Act 2013 of dealing with matters in a 'quick, just, quick and cheap resolution of the real issues in the proceedings'. These documents were admitted into evidence and were marked 'R1'.
10. The parties had the opportunity of presenting their evidence to the Tribunal and an opportunity of asking questions of each other.
11. The Tribunal has considered all of the parties' submissions, including oral and written submissions in determining the issues.

Applicants' evidence

1. The applicants contracted with Pool Ezy for the installation of a new pool at the premises. The contract was dated 4 August 2014.
2. The applicants contacted Mr Leigh Davis from Pool Ezy in relation to issues that they had noticed with the pool in January 2016. The applicants' concerns were that one side of the pool wall had inward deflection, cracks and a spider like appearance on the pool surface and a difference in the finish of the pool above and below the water line with a less sparkle effect.
3. On 3 February 2016, Mr Palmer on behalf of the respondent attended the applicants' property. Mr Palmer reported to Mr Davis that there were no issues with the structural integrity of the pool with the deflection most likely as a result of water penetration.
4. The applicants' evidence was that they had subsequent to Mr Palmer's visit conducted testing which confirmed that the pool was not leaking. The water was pumped out from around the pool and the earth absorbed the remainder of the water which appeared to resolve the issue within a fortnight of Mr Palmer's inspection.
5. The applicants' evidence was that they had no further contact from Mr Palmer from the time of the visit in February 2016 until when the applicants lodged a warranty claim in July 2018 in relation to the gel coating of the pool.
6. Mr Riordan's evidence was that when he visited the applicants' premises in May 2018 he noticed that the pool was not the same as when he had been there previously. He noticed that there was no shine, it was 'flat', there were crazing marks in numerous places including in the shallow and deep ends of the pool and on the steps. Mr Riordan described the 'colour was coming off the pool'. However, the applicants confirmed that this had not affected the usability of the pool. The pool was still holding water.
7. On or around 7 July 2018, Mr Riordan contacted Mr Davis of Pool Ezy to report his concerns in relation to the pool and lodged a manufacturer's warranty claim on behalf of the applicants.
8. Mr Riordan's evidence was that he had a meeting with Mr Palmer on behalf of the respondent in August 2018 and Mr Palmer had confirmed that the issue related to a faulty gel coat and that proceedings were on foot against Nuplex who was the manufacturer of the gel coating that had been applied to the applicants' pool. Mr Riordan claimed that Mr Palmer advised him that they would repair the pool once the litigation had concluded and it was estimated that this could take a period of two years. Mr Riordan's evidence was that this time frame was not acceptable.
9. Mr Riordan subsequently sought to amend the application to claim for the costs associated with a replacement pool on the basis that the gel coating of the pool was not able to be rectified to a satisfactory standard.
10. Mr Riordan sought to rely on the statements from Mr Justin Stapleton and Mr Wetton. Mr Stapleton and Mr Wetton were not present at the hearing despite the Tribunal's orders requesting them to be available unless excused by the respondent.
11. Mr Stapleton's witness statement provides: I have personally seen repaired pools completed by Summertime Pools and their preferred repairer. The finish of these pools are sub-standard and do not reflect that of a new pool finish. The finish of the pools after repair are rough with jagged edges and present extreme orange peel effect.
12. Mr & Mrs Wetton's statement noted that their pool was installed by Pool Ezy in January 2015. Soon after its installation, they noticed that the pool was matte in its appearance. It was identified by Mr Palmer that the pool had gel coat issues and the respondent sought to remedy the gel coat in August 2016. The contractors returned to reapply the gel coat ten weeks later and Mr & Mrs Wetton had concerns with the quality of the rectification works noting that following the removal of masking tape there was a ridge around the pool causing more dirt to stick to the pool floor and that the edges were sharp and needed to be sanded back. Further, there had been acid spilt on the concrete of the pool causing damage.
13. Mr & Mrs Wetton's statement noted that on 14 November 2016, they refused access to the respondent and did not allow them to remedy the rectification works.
14. The applicants sought to rely on a statement from Mr Bruhn, dated 10 May 2017 addressed to lawyers of the respondent on behalf of Mr & Mrs Wetton. Mr Bruhn letter notes that the gel coat was 'patchy' and some spots had more shimmer flakes and that the floor appears to be a lighter shade to the rest of the pool.
15. Mr Riordan's evidence included colour photographs taken of the Wetton's pool which he claimed show the coarseness and roughness of the finish.
16. Mr Riordan was critical of the expert report provided by the respondent prepared by Mr Mark Cunningtun of Timeless Pool Renovations, stating that Mr Cunningtun had not inspected the applicants' pool but had relied on observations of others. Mr Riordan also claimed that Mr Cunningtun was financially invested in performing rectification works on behalf of the respondent and therefore should be afforded little weight.
17. Mr Riordan also sought to rely on the Writ filed by the respondent wherein the respondent seeks compensation based on the affected gel coat pools being replaced in support of his claim that the applicants' pool cannot be rectified but requires replacement.
18. The applicants' have provided a quote for the replacement cost of a pool in the amount of $55,880, however, concede to the jurisdictional limit of the Tribunal in the amount of $40,000.
19. In the alternate, the applicants claim the sum of $20,000 for rectification of the gel coating of the pool. Mr Riordan's submission that this sum of $20,000 is referred to in the respondent's pleadings as the cost of rectification of the gel coating.

Applicants' expert

1. Mr Leigh Davis gave evidence under oath. Mr Davis is the owner of Pool Ezy and installed the applicants' pool in 2014.
2. Mr Davis inspected the pool and attended the applicants' premises on a number of occasions over a period of weeks in early 2016 to address the pool deflection. Mr Davis' evidence was that it was not uncommon for pools to have this deflection issue. His evidence was that the deflection had dissipated following the removal of the water around the pool.
3. Mr Davis inspected the applicants' pool in December 2018 and noted that the pool had lost its shimmer. He was unable to recall if he had detected the gel coat issues in early 2016.
4. Mr Davis' evidence was that following Mr Palmer's visit in early 2016, he had not contacted the respondent again in relation to any issues or concerns with the applicants' pool.
5. Mr Davis had been directly involved with two customers who had their pools repaired by the manufacturer- the Wettons' pool and James' pool. Mr James had accepted the result but that the Wettons were not happy with their result.
6. Mr Davis' evidence was that it was not possible to obtain the same finish as the original pool with any rectification works and he had concerns as to whether the faulty gel coat would rise through the re-applied gel coat.

Respondent's evidence

1. The respondent admits to a deficiency of the gel coat in the applicants' pool which they claim to be a defect in the manufacturing of the product. The respondent seeks to remedy the gel coat issues to the applicants' pool by engaging an independent contractor to remove the defective gel coat and have a new gel coat applied. The respondent claims that the applicants' claim for a new pool is unreasonable when rectification is possible.
2. Mr Palmer confirmed that the respondent has commenced legal proceedings in the Supreme Court of Victoria against Allnex Resins Australia Pty Ltd, the manufacturer of the Star Blue gel coat finish that was applied to the applicants' pool. These proceedings remain on foot.
3. Mr Palmer's evidence was that he inspected the applicants' pool in February 2016 because of concerns in relation to the internal deflection of the pool. He provided a report to Mr Davies following his inspection and noted that: The crazing of the pool gel coat can be reworked; this involves water being removed from the pool with a grinding and recoating of pools surface. Customer has been advised appearance of the network will be slightly noticeable. It is advised appearance of the network will be slightly noticeable. It is advisable to rectify the deflection in the wall issue prior to any rework as some of the crazing could have occurred because of the deflection. Wall deflection is most likely the result of water penetration from an unknown source.
4. Mr Palmer's evidence was at the time of his inspection of the applicants' pool, he was aware that there were some issues with the Star Blue gel coat finish that had been applied, however, he was not aware of the particulars of what the issues were. It was his evidence that at that time, he believed that the crazing marks related to the deflection of the pool wall.
5. Mr Palmer had no further contact with the applicants or Mr Davis until he received the warranty claim in June 2018 in relation to issues with the gel coating of the pool.
6. Mr Palmer inspected the applicants' pool again in December 2018 and found that there was the same deflection in the pool wall. At the time of his visit in 2016 he had recorded a defection of 40-50mm. This was again measured in December 2018 and found to be 40-50mm. The pool surrounds were intact and there were no issues with the structural integrity of the pool. Mr Palmer observed that the pool had lost its shimmer below the water line.
7. Mr Palmer's documents include a copy of the express warranty that they supply with the pool which provides for a warranty of the surface of the pool for a period of 10 years. The terms of the warranty are: The interior surface of the pool will meet the requirements of the Chemical Resistance Test/Cosmetic Layer, Australian Standards AS/NZS 1638-1994 for a period of ten YEARS, commencing at the date of installation. This warranty excludes but not limited to any one or more of the following: Discolouration, staining, fading, surface yellowing, or any surface degradation caused by the incorrect water chemistry and water maintenance in fibreglass swimming pools or contaminants in the pool water, normal variations caused by time, or damage caused by exceeding water temperature parameters (absolute maximum temperature 35 degrees or constantly exceeding 30 but no more than 35 degree Celsius). Incorrect application of pool chemicals to the pool. Failure to install coping and or paving rail at the time of installation. The warranty may not be altered in any manner by any person or company without the express written consent of the manufacturer. Warranty claims must only be made in writing.

Respondent's expert

1. Mr Cunningtun provided a report dated 26 April 2019 based on a desk top assessment of the applicants' pool. Mr Cunningtun concluded that: In the circumstances where there are no structural defects and the shell integrity is not compromised, replacement of the shell is not necessary, recoating of the pool is recommended as a reasonable course of action to adopt.

Relevant law

1. The Australian Consumer Law (NSW) (ACL) provides for statutory guarantees in relation to the supply of goods. Relevantly, s 54 provides: 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. (4) If: (a) goods supplied to a consumer are not of acceptable quality; and (b) the only reason or reasons why they are not of acceptable quality were specifically drawn to the consumer's attention before the consumer agreed to the supply; the goods are taken to be of acceptable quality. (5) If: (a) goods are displayed for sale or hire; and (b) the goods would not be of acceptable quality if they were supplied to a consumer; the reason or reasons why they are not of acceptable quality are taken, for the purposes of subsection (4), to have been specifically drawn to a consumer's attention if those reasons were disclosed on a written notice that was displayed with the goods and that was transparent. (6) Goods do not fail to be of acceptable quality if: (a) the consumer to whom they are supplied causes them to become of unacceptable quality, or fails to take reasonable steps to prevent them from becoming of unacceptable quality; and (b) they are damaged by abnormal use. (7) Goods do not fail to be of acceptable quality if: (a) the consumer acquiring the goods examines them before the consumer agrees to the supply of the goods; and (b) the examination ought reasonably to have revealed that the goods were not of acceptable quality.
2. The remedies against the manufacturer of the goods are found in ss 271-272 of the ACL which provide: 271 Action for damages against manufacturer of goods (1) If: (a) the guarantee under section 54 applies to a supply of goods to a consumer; and (b) the guarantee is not complied with; an affected person in relation to the goods may, by action against the manufacturer of the goods, recover damages from the manufacturer. (2) Subsection (1) does not apply if the guarantee under section 54 is not complied with only because of: (a) an act, default or omission of, or any representation made by, any person other than the manufacturer or an employee or agent of the manufacturer; or (b) a cause independent of human control that occurred after the goods left the control of the manufacturer; or (c) the fact that the price charged by the supplier was higher than the manufacturer's recommended retail price, or the average retail price, for the goods. (3) If: (a) a person supplies, in trade or commerce, goods by description to a consumer; and (b) the description was applied to the goods by or on behalf of the manufacturer of the goods, or with express or implied consent of the manufacturer; and (c) the guarantee under section 56 applies to the supply and it is not complied with; an affected person in relation to the goods may, by action against the manufacturer of the goods, recover damages from the manufacturer. (4) Subsection (3) does not apply if the guarantee under section 56 is not complied with only because of: (a) an act, default or omission of any person other than the manufacturer or an employee or agent of the manufacturer; or (b) a cause independent of human control that occurred after the goods left the control of the manufacturer. (5) If: (a) the guarantee under section 58 or 59(1) applies to a supply of goods to a consumer; and (b) the guarantee is not complied with; an affected person in relation to the goods may, by action against the manufacturer of the goods, recover damages from the manufacturer. (6) If an affected person in relation to goods has, in accordance with an express warranty given or made by the manufacturer of the goods, required the manufacturer to remedy a failure to comply with a guarantee referred to in subsection (1), (3) or (5): (a) by repairing the goods; or (b) by replacing the goods with goods of an identical type; then, despite that subsection, the affected person is not entitled to commence an action under that subsection to recover damages of a kind referred to in section 272(1)(a) unless the manufacturer has refused or failed to remedy the failure, or has failed to remedy the failure within a reasonable time. (7) The affected person in relation to the goods may commence an action under this section whether or not the goods are in their original packaging. 272 Damages that may be recovered by action against manufacturers of goods (1) In an action for damages under this Division, an affected person in relation to goods is entitled to recover damages for: (a) any reduction in the value of the goods, resulting from the failure to comply with the guarantee to which the action relates, below whichever of the following prices is lower: (i) the price paid or payable by the consumer for the goods; (ii) the average retail price of the goods at the time of supply; and (b) any loss or damage suffered by the affected person because of the failure to comply with the guarantee to which the action relates if it was reasonably foreseeable that the affected person would suffer such loss or damage as a result of such a failure. (2) Without limiting subsection (1)(b), the cost of inspecting and returning the goods to the manufacturer is taken to be a reasonably foreseeable loss suffered by the affected person as a result of the failure to comply with the guarantee. (3) Subsection (1)(b) does not apply to loss or damage suffered through a reduction in the value of the goods.

Findings

1. Mr Davis' evidence was that he had contacted Mr Palmer in relation to the concerns about the internal deflection of the pool and the contemporaneous notes from Mr Palmer following the pool inspection on 3 February 2016 confirms that: Upon a visual inspection of the pools internal walls and floor by client (Mr Terry Boyer) and myself the following concerns were raised by the client: 1. Cracks appearing in the gel coat (cosmetic layer ie pool colour). 2. Structural integrity of the pool to hold water. 3. Inward deflection in deep side wall of pool. 4. Coping mortar between tiles and pool separation.
2. Mr Palmer's evidence was that the crazing related to the pool deflection rather than the failure of the gel coating at this time.
3. Neither of the applicants gave evidence as to any purported conversation with Mr Palmer in relation to rectification of issues with the gel coating in February 2016. Should Mr Palmer have provided any undertakings to the applicants, the applicants have provided no evidence as to their reason for not following up with him prior to the lodgement of the warranty claim which was instigated by Mr Riordan in July 2018.
4. The Tribunal prefers the evidence from the respondent that Mr Palmer made no undertakings to the applicants when they attended their property in February 2016 that they would undertake repairs to the gel coating of their pool. This is supported by Mr Davis' evidence that he was unable to recall discussions in relation to the gel coating at this time.
5. However, on the basis of the evidence from Mr Palmer, the Tribunal finds that the issues with the gel coating were evident at this time which included crazing and a loss of shimmer. The Tribunal does not accept the applicants' argument that the respondent had a positive obligation to contact them and undertake repairs. The respondent's claim against the manufacturer of the gel coating remains before the Courts. The respondent at this time is only required to respond to claims by the applicants.
6. The applicants first complained to the respondent in July 2018 in relation to issues their pool was experiencing with the gel coating and made a warranty claim at this time.
7. The applicants claim that the pool is unable to be rectified by the application of a new gel coating and rely on the statements from Mr Stapleton, Mr and Mrs Wetton and Mr Davis in support that an as new appearance is unable to be achieved by rectification of the gel coating.
8. Mr Davis' evidence was that he was unaware that Mr and Mrs Wetton had refused the respondent access to their pool to remedy the repairs that they believed were inadequate. The Tribunal finds that little weight can therefore be afforded to the comments by Mr Davis in relation to the quality of the rectification works to the Wetton pool by the respondent.
9. The applicants relied on photographs of the Wettons' pool in their support that the rectification was unable to achieve an acceptable finish. However, as the Wettons refused access to the respondent to remedy the repairs, the Tribunal does not accept that any weight should be given to the applicants' claim that the gel coating is not able to be remedied.
10. Mr Davis confirmed that the other pool which had undergone rectification works was Mr James who had made no further complaints in relation to the outcome.
11. Despite Mr Stapleton's statement to the Tribunal, Mr Palmer confirmed that the parties entered into Consent Orders with the Tribunal for rectification works to the gel coating which had not been undertaken at the time that the statement was made by him.
12. The respondent's expert Mr Cunningtun's qualifications confirm his experiences in both fibreglass boating and the swimming pool industry. The respondent's evidence was that they have specifically sourced Mr Cunningtun's expertise to assist in the rectification work of swimming pools that have been affected by the Star Blue gel coating issues.
13. The respondent has an express warranty in relation to the interior surface which includes the gel coating. The applicants lodged a warranty claim with the respondent in July 2018. The respondent's evidence, which was not refuted by the applicants, was that they sought to comply with their obligations pursuant to s 271(6) of the ACL by repairing the pool. These offers to repair the gel coating have been repeated by the respondent, however, the applicants did not want to wait and lodged the application with the Tribunal in August 2018.
14. The Tribunal is not persuaded by the applicants' argument that the gel coating isn't able to be satisfactorily repaired by the respondent. The Tribunal prefers the expert evidence of Mr Cunningtun who is experienced in the industry and has remediated other pools with the same issue successfully, including the pool of Mr James. The applicants' evidence in relation to the Wettons' pool was not persuasive as the Wettons had refused access to the respondent to remediate issues that had occurred. The Tribunal notes that this remediation occurred in 2016 and the evidence from Mr Palmer was that the gel coating had not been entirely removed which is the proposed remediation of the applicants' pool.
15. The Tribunal finds that the respondent should be given the opportunity of remediating the applicants' pool in accordance with their express warranty and finds that the applicants are not entitled to recover damages of the kind referred to in s 272(1)(a) as the manufacturer has not refused or failed to remedy the failure, or failed to remedy the failure within a reasonable time: s 272(6)b) of the ACL

Orders

1. The Tribunal makes the following orders: 1. The respondent is to rectify the applicants' pool to a usable condition at no cost to the applicants by performing the following on or before 31 October 2019: 1. Emptying and refilling the pool; 2. Removing the entire gel coating of the pool, application of a barrier coat and application of new gel coating to the pool; 3. Treating the completed pool with the required chemicals on completion of the rectification work and undertaking any remedial work required to landscaping, filing etc as required if damaged during rectification. 1. The applicant is to give reasonable access to the respondent and its contractors for the purpose of carrying out these works orders on written notice, 72 hours prior to the commencement of works. 2. The applicant has leave to bring an application for renewal of these proceedings within twelve months of the specified date for completion of works if the work does not satisfactorily remedy the issue.

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 July 2019