APPLICATION OF LEGAL PRINCIPLES TO FACTS
- The central aspect of the dispute is the applicant's assertion that she was sold a lounge suite that was not "100% genuine leather", despite it being advertised as such. Accordingly, the salient provision to consider is Section 18 of the ACL.
- The legal principles pertaining to Section 18 of the ACL are summarised by Brereton J in Perpetual Trustee Company Limited & Anor v Ishak [2012] NSWSC 697 at paras [75]-[76]. Relevantly, the test is objective (i.e. what a reasonable consumer in the position of the applicant would have, in all the circumstances of the matter, been misled or deceived, not whether the applicant subjectively believed that the conduct of the respondent was misleading or deceptive). There does not have to be any intention on the part of the respondent to mislead or deceive. Confusion or misunderstanding by a consumer does not mean, of itself, that the conduct in question is misleading or deceptive, and a consumer failing to make reasonable inquiries is relevant in assessing whether conduct is misleading or deceptive in contravention of Section 18 of the ACL (Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1; Miller & Associates Insurance Broking v BMW Australia Finance (2010) 241 CLR 357).
- The Tribunal is not satisfied the applicant has proved on the balance of probabilities that the respondent breached Section 18 of the ACL in respect of the representation that the lounge suite was "100% genuine leather". The expert report of Mr Sousanis does not assert that split grain leather is not a type of leather. Rather, his report is consistent with a conclusion that spit grain leather is a type of leather, and that in circumstances where the lounge suite was constructed of a combination of full grain leather and spit leather it was not misleading or deceptive to advertise the lounge suite as "100% genuine leather", nor for Mr Calandra to describe the lounge suite in such a way when speaking to the applicant. The lounge suite was never advertised, nor is there any evidence it was represented by Mr Calandra, as being "100% full grain leather".
- Further, the oral evidence of the applicant that Mr Calandra told her that the lounge suite was made of "good quality leather and some parts of lesser quality, but all genuine leather" is inconsistent with her asserted belief that the entire lounge suite was constructed of full grain leather. The comments of Mr Sousanis that "based on what the customer advises me" the applicant was sold a "100% full hide leather" lounge suite and "was never told about the differences in the two different materials" cannot be given any weight, because the key information is the evidence from the applicant and Mr Calandra about what was actually said prior to purchase, in the context of the advertisement that the lounge suite was "100% genuine leather", not what the applicant told Mr Sousanis in retrospect she believed she had been told about the material the lounge suite was constructed of. Further, there is nothing in the report of Mr Sousanis that sets out what instructions he was given by the applicant.
- Notwithstanding that the applicant may have genuinely, although mistakenly, believed that the lounge suite was entirely constructed of full grain leather, the Tribunal is not satisfied that such a belief was induced by any conduct of the respondent in breach of Section 18 of the ACL.
- The Tribunal is not satisfied the applicant has proved to the requisite standard that the respondent breached Sections 54 and/or 57 of the ACL. Although the applicant stated that the lounge suite on display at the respondent's store was made of "softer" material than the lounge suite delivered, there is insufficient evidence to conclude that the goods delivered did not reasonably match the item displayed. Although the arm rest of one of the chairs was the wrong arm rest (the chair having two left arm rests), the respondent had offered to replace that item, which was rejected by the applicant. Even if the incorrect arm rest constituted a breach of Sections 54 and/or 57 of the ACL, the applicant's failure to accept the offer of the respondent to replace the arm rest is a clear failure by the applicant to take reasonable measures to mitigate or avoid her loss, by insisting on returning the goods rather than allowing the respondent to conduct a simple repair (Clark v Macourt (2013) 304 ALR 220; Chand v Commonwealth Bank of Australia [2015] NSWCA 181). For the sake of completeness, the Tribunal has also considered the provisions of Sections 259-262 of the ACL, and is not satisfied the goods were sold with a "major defect" within the meaning of those provisions.
- In respect of the applicant's assertion that there was a "hole" in the lounge suite, the Tribunal is not satisfied the applicant has proved on the balance of probabilities that the respondent breached Sections 54 and/or 57 of the ACL. There was no photographic evidence of such a hole; it is not referred to in the report of Mr Sousanis; and according to Mr Zhou it was not contemporaneously mentioned to him by the applicant when she complained about the lounge suite and sought a refund.
- For the above reasons, the application is dismissed.
G J Sarginson
General Member
Civil and Administrative Tribunal of New South Wales
26 August 2015
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: 08 October 2015