Como Leather Pty Ltd v Harris

NCAT Appeal Panel|2017-03-03

reasons for decision

The appellant, Como Leather Pty Ltd (Como Leather), appeals from a decision in the Consumer and Commercial Division of the Tribunal dated 2 November 2016 which determined an application made by Ms Maryanne Harris for orders for the return to Como Leather of a leather lounge and refund of the purchase price, and compensation for damage caused to shutters and flooring during delivery and installation of the lounge.
The Tribunal Member ordered Como Leather to pay Ms Harris the sum of $11,576.60, being $8,550.00 refund of the purchase price, $1,920.00 compensation for damage to shutters, and $1,106.60 compensation for damage to flooring; and ordered Como Leather to collect the lounge from Ms Harris.
On 30 November 2016 Como Leather appealed against the decision, seeking that the orders be set aside and seeking instead orders that it be directed to repair the lounge, that Ms Harris provide access to perform the repairs, and that the claim for damages be dismissed. The appeal was brought within the prescribed time under rule 25(4) of the Civil and Administrative Tribunal Rules 2014.

Background

The background to the application to the Tribunal and the parties' competing positions were summarised by the Tribunal Member in the following terms: Applicant's evidence 2 The applicant gave sworn evidence that she purchased a lounge from the respondent in January 2016. It was delivered in April 2016, but was missing a joining plate which is required to enable proper operation of the recliner portion of the lounge. The delivery men advised that they would follow up on the matter and have the plates installed as soon as possible. This did not happen. The applicant gave evidence of the numerous attempts which she had made to have the work completed. Eventually, on 9 May 2016, Rafael [Raphael Jordemir, an employee of Como Leather who will be further referred to below] attended her home and attempted to rectify the issue, but without success. 3 The applicant says that during delivery of the lounge, damage was occasioned to shutters and a doorway, and during the attempts to fit the missing plates, damage was occasioned to the floorboards under the lounge. 4 Further attempts to have the matter rectified were not successful and the applicant lodged a complaint with Department of Fair Trading. Their intervention also failed to rectify the matter. She commenced these proceedings. During conciliation an agreement was reached for a work order to be made. The Tribunal by consent ordered that the respondent complete the installation of the recliners and lounge on or before 31 August 2016. The work was not carried out. She said that the respondent had many ways of contacting her, but failed to do so. The respondent contacted the applicant after the date had passed. She advised the respondent that the matter would have to await the Tribunal hearing. 5 The applicant has obtained quotations to repair the damaged shutters, architrave and flooring and seeks compensation for the damage caused. She also seeks to return the lounge and obtain a refund of the purchase price. She submits that the respondent has had multiple opportunities to repair the lounge, over a period of more than 6 months. She does not have what she paid for and has no confidence in the respondent or its ability to deliver on its promises. Respondent's evidence 6 The respondent's representative Kylie gave sworn evidence on behalf of the respondent and relied upon a bundle of documents and submissions. The respondent accepts that the lounge was missing connecting plated when it was delivered but continues to assert that the issue can be easily remedied. The respondent says that it sent Raphael to attend to the repair because the applicant was insisting that the repair be carried out on that day and the respondent's technician from Sydney was unavailable. When the work order was agreed to the respondent gave the repair to a third party. The respondent concedes that in retrospect it should have managed that process to ensure that the order was complied with. However, the respondent continues to assert that the lounge can easily be repaired and seeks a further opportunity to do so. 7 In respect of the alleged damage caused, the respondent denies causing the damage as alleged. However the respondent does not provide any evidence from the delivery persons, or from Raphael who undertook the repair during which it is alleged that damage was caused to the floor boards. The respondent says that a leather lounge could not have caused damage to the architrave or shutters without itself being damaged.

Notice of Appeal

Como Leather stated its grounds of appeal in the Notice of Appeal in the following terms: 1. The Tribunal made an error of law in determining that Ms Harris was entitled to reject the goods; 2. The decision was not fair and equitable; 3. The finding that Ms Harris had given Como Leather a reasonable time to remedy the failure and that it had failed to do so was against the weight of evidence; and 4. The finding that Como Leather caused the damage was against the weight of evidence and also significant new evidence is available.
At the hearing the fourth ground was not pressed.
In written submissions, Como Leather identified as errors involving questions of law: 1. Adequacy of reasons: the Tribunal Member's determination made no mention of the evidence of Leather King (which consisted of a letter from "Alex" of Leather King - which had been contracted by Como Leather to repair the lounge - to Como Leather, which listed three dates upon which Alex claimed to have attempted to contact Ms Harris without success and stated that on each occasion there had been no answer and no voice mail had been available), or the "Satisfaction and Completion Notification" completed by Ms Harris (that is an acknowledgment addressed to the company providing Ms Harris with finance for the goods that the goods had been supplied to Ms Harris' satisfaction), and it appeared that that evidence was not considered by the Member; 2. Denial of procedural fairness: Como Leather was denied procedural fairness due to its inability to access Ms Harris' property to inspect the alleged damage, and the Tribunal's refusal to allow Raphael Jordemir to give evidence at the hearing; 3. No evidence to support findings of fact and unreasonableness: there was no evidence to support the finding that Ms Harris was entitled to reject the goods, and no evidence to support the finding that Como Leather had failed to contact Ms Harris regarding repair of the lounge.
The submissions identified the following grounds on which leave to appeal was sought: 1. The decision was not fair and equitable because Como Leather was not given the chance to rectify or repair the lounge or to adduce evidence from Raphael Jordemir who was late to the hearing, and not all Como Leather's evidence was taken into account; 2. The finding that Ms Harris was entitled to reject the goods was against the weight of evidence given the evidence that Alex from Leather King had attempted to contact Ms Harris to carry out repairs and that Ms Harris refused to allow Como Leather to carry out repairs after 31 August 2016; and the Satisfaction and Completion Notification should have been given more weight; and 3. Significant new evidence in the form of an affidavit of Raphael Jordemir is now available that was not reasonably available at the time of the hearing.

Statutory basis for an internal appeal

By virtue of section 80 of the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act) Como Leather may appeal against the decision of the Tribunal Member as of right on a question of law or, with the leave of the Appeal Panel on other grounds.
As this appeal is brought from a decision of the Consumer and Commercial Division of the Tribunal, by virtue of clause 12(1) of Schedule 4 to the NCAT Act, leave to appeal may only be granted under s80(2)(b): If the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
In Collins v Urban [2014] NSWCATAP 17 the meaning of "substantial miscarriage of justice" was summarized at [71] and [79] as follows: [71]. . . [I]t can be seen that the concept of a substantial miscarriage of justice refers to a failure in the way a matter was conducted or decided which deprived the appellant of a chance that was fairly open of achieving a better outcome than occurred. . . . [79] In order to show that a party has been deprived of a "significant possibility" or a "chance which was fairly open" of achieving a different and more favourable result . . . it will be generally be necessary for the party to explain what its case would have been and show that it was fairly arguable. If the party fails to do this, even if there has been a denial of procedural fairness, the Appeal Panel may conclude that it is not satisfied that any substantial miscarriage of justice may have occurred.

The hearing of the appeal

Leave was granted to both parties to be legally represented. At the hearing Como Leather was represented by D Robertson, barrister. Ms Harris appeared in person. The parties had provided to each other and to the Appeal Panel the evidence provided to the Tribunal Member and additional evidence, including photographs. Como Leather provided a transcript of the hearing before the Tribunal Member, which Ms Harris agreed was an accurate transcript.
In oral submissions Como Leather accepted that the recliner was missing the plates and clips. However Como Leather submitted that the only opportunity it had had to fix the issue was on 9 May 2016 and that the Tribunal Member made no findings as to the attempts made by Como Leather to fix the lounge or contacts which a representative of Como Leather had had with Ms Harris on 5 or 6 September 2016. Como Leather submits that the Member's findings on s 259(2) of the ACL NSW are the critical issue. Como Leather submits that in resolving that issue the Member made no reference to the attempts made by Leather King to contact Ms Harris after the Tribunal conciliation. Como Leather submits that the Member made errors of law: in the Member's construction of s 259(2); in the lack of reasons for her finding that Como Leather had been given a reasonable time to fix the problem; and in the making of that finding when the only opportunity which Como Leather had been accorded to carry out the repair had been on 9 May 2016. In Como Leather's submission, either the evidence of Leather King's attempts to contact Ms Harris was ignored, or it was not accepted, in which case, Como Leather submits, reasons should have been given.
In her Reply to Appeal Ms Harris states that Como Leather had failed to produce evidence that the damage caused to her property was not caused by either the delivery men or Raphael; that the goods received are not fully operational and have not been since delivery, that Como Leather has been given ample time to fix the problems; that Como Leather "have failed to cultivate a trusting relationship with" her; and that "any future dealings [with Como Leather] would call to question their integrity based on previous performance". Ms Harris opposed leave to appeal being granted, stating that the matter was discussed at length at the Tribunal hearing; she signed the Satisfaction and Completion notification before she realised the plates were missing; there was no correspondence seeking to obtain access to gather evidence in relation to the value of damage to her property; and the affidavit of Raphael Jordemir was not new evidence as it could have been obtained before the conciliation and the hearing.
Ms Harris replied to Como Leather's written submissions, identifying relevant passages in the transcript of the hearing on which she relied.

The Tribunal's findings and reasons

The Tribunal Member found that Ms Harris is a consumer, to whom Como Leather supplied services, and that the claim is a consumer claim as defined in s 79E of the Fair Trading Act 1987 (NSW) (the FT Act). The Member found (at paragraph [10]) that the lounge did not comply with the consumer guarantee provided in s 54 of the Australian Consumer Law, which applies in NSW as the Australian Consumer Law (NSW) ( the ACL (NSW)) by operation of s 28 of the FT Act, as it was not of acceptable quality in that it was not fit for all the purposes for which goods of that kind are commonly supplied, it was not acceptable in appearance and finish, and it was not free from defects, safe or durable. At paragraph [12] the Member found, based on the evidence of Como Leather, that the defect in the goods can be remedied, and that the Tribunal was not satisfied that the lack of the plates represented a major failure of the consumer guarantee. The Member found, nevertheless, applying s 259(2)(b) of the ACL (NSW), that Ms Harris had given Como Leather a reasonable time to remedy the failure, and that Como Leather had failed to do so. The Member concluded that Ms Harris was entitled to a refund of the purchase price and (at paragraph [13]) that Como Leather should collect the goods.
In relation to Ms Harris' claim for reimbursement for the cost of repairing the architrave, shutters and flooring, at paragraph [14] the Tribunal accepted Ms Harris' evidence as to how the damage occurred in preference to that of Como Leather, and ordered Como Leather to compensate Ms Harris for the repairs.

Consideration

Como Leather maintained its appeal against the Tribunal's determination that it refund the purchase price and take back the leather lounge purchased by Ms Harris, and did not press its appeal against the orders that it compensate Ms Harris for damage caused to her property during delivery and installation of the lounge. It did not dispute that the lounge was missing the recliner plates on delivery and that those parts have still not been provided and installed.
As refined during the course of the Appeal Panel hearing, Como Leather did not dispute the Tribunal Member's analysis of the basis for the Tribunal's jurisdiction, the application of the consumer guarantee as to acceptable quality in s 54 of the ACL (NSW), or her conclusion that s 259 of the ACL (NSW) was the appropriate basis for determining what remedy was available for non-compliance with the consumer guarantee. The Appeal Panel agrees that there was no error in the approach to those issues taken by the Tribunal Member, and that the orders made by the Tribunal Member were within the power conferred by s 79N of the FT Act: Lam v Steve Jarvin Motors Pty Ltd [2016] NSWCATAP 186.
Como Leather takes issue with the Tribunal Member's application of and reasoning concerning s 259(2)(b) of the ACL (NSW).
Section 259 of the ACL (NSW) provides: 259 Action against suppliers of goods (1) A consumer may take action under this section if: (a) a person (the supplier ) supplies, in trade or commerce, goods to the consumer; and (b) a guarantee that applies to the supply under Subdivision A of Division 1 of Part 3-2 (other than sections 58 and 59(1)) is not complied with. (2) If the failure to comply with the guarantee can be remedied and is not a major failure: (a) the consumer may require the supplier to remedy the failure within a reasonable time; or (b) if such a requirement is made of the supplier but the supplier refuses or fails to comply with the requirement, or fails to comply with the requirement within a reasonable time--the consumer may: (i) otherwise have the failure remedied and, by action against the supplier, recover all reasonable costs incurred by the consumer in having the failure so remedied; or (ii) subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection. (3) If the failure to comply with the guarantee cannot be remedied or is a major failure, the consumer may: (a) subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection; or (b) by action against the supplier, recover compensation for any reduction in the value of the goods below the price paid or payable by the consumer for the goods. (4) The consumer may, by action against the supplier, recover damages for any loss or damage suffered by the consumer because of the failure to comply with the guarantee if it was reasonably foreseeable that the consumer would suffer such loss or damage as a result of such a failure. (5) Subsection (4) does not apply if the failure to comply with the guarantee occurred only because of a cause independent of human control that occurred after the goods left the control of the supplier. (6) To avoid doubt, subsection (4) applies in addition to subsections (2) and (3). (7) The consumer may take action under this section whether or not the goods are in their original packaging.
The focus of Como Leather's challenge to the Tribunal Member's findings and reasoning was on paragraphs 10 and 12 of her reasons: 10 The Tribunal finds that the lounge is not of acceptable quality in that it is not fit for all the purposes for which goods of that kind are commonly supplied, it is not acceptable in appearance and finish, it is not free from defects, safe or durable. Accordingly the lounge does not comply with the relevant consumer guarantee. … 12 The Tribunal accepts the evidence of the respondent that the defect in the goods can be remedied. The Tribunal is not satisfied that the lack of the plates represents a major failure of the guarantee. However, the applicant has given the respondent a reasonable time to remedy the failure, and the respondent has failed to do so (s 259(2)(b)). In these circumstances the applicant is entitled to reject the goods. The Tribunal is satisfied that none of the exceptions in s 262 apply. The applicant is entitled to a refund of the purchase price.
Como Leather accepts that there was a defect in one of the recliners, that the defect could have been remedied, and that the defect was not a major failure. In the course of oral submissions, counsel for Como Leather submitted that the defect existed in only one part of the lounge (out of five) and that therefore the non-compliance with the consumer guarantee in s54 of the ACL (NSW) arose only in respect of that part of the lounge. Counsel conceded that that proposition was not raised below and we do not consider that it is a point that should be permitted to be raised for the first time on appeal. Como Leather submits that, while in paragraph 12 there is a finding that it has had a reasonable time to remedy the failure, there is no reference to the attempts by Leather King to contact Ms Harris after the conciliated agreement or the attempts by Como Leather to make arrangements to repair the goods after 31 August 2016.
Como Leather submits that the error of law in the Tribunal's reasoning lies in the Member's construction of the words "refuses or fails to comply" in s 259(2)(b), alternatively in the absence (or inadequacy) of reasons for the finding that there had been reasonable time for Como Leather to remedy the failure, or alternatively in the absence of evidence to support the finding, given that the only opportunity given to Como Leather to repair the lounge was on 9 May 2016 and there was no reference in the Member's reasons to the three attempts to contact Ms Harris made by Leather King.
An error in the construction of the relevant legislative provision, or a failure to provide proper reasons for a finding, or the making of a finding for which there is no evidence, would all constitute errors on questions of law: John Prendergast & Vanessa Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [13].
The Appeal Panel is not satisfied that Como Leather has established an error of law, for the following reasons.
Como Leather challenged the Tribunal Member's conclusion that it had refused or failed to comply with the requirement to remedy the failure "within a reasonable time". However, its representative accepted that what is a "reasonable time" would be determined on the basis of all the circumstances, and that the evidence established that Ms Harris was a teacher and therefore had limited availability to wait at home for repairs to be conducted. Como Leather did not point to any relevant authority concerning the meaning of "within a reasonable time" in s259(2)(b) of the ACL (NSW). The Appeal Panel agrees that what is a "reasonable time" is a question of fact, to be determined having regard to all the circumstances. We find no error in the Member's interpretation of s 259(2)(b) of the ACL (NSW).
In considering Como Leather's challenge based on the adequacy of reasons, the Appeal Panel notes the following summary of the principles relevant to the duty to give reasons in Collins v Urban: 57 A number of propositions can be derived from the authorities concerning the nature and extent of the duty to give of reasons as follows: (1) notwithstanding that there have been many cases (some of which are collected in De Iacovo v Lacanale (1957) VR 553, at pp 558-559) in which it has been held that it is the duty of a judge, magistrate or other relevant decision maker to state reasons, that does not mean that a decision maker must give his or her reasons in every case. There is no "inflexible rule of universal application" that reasons should be given for judicial decisions. Whilst it is no doubt right to describe the requirement to give reasons as "an incident of the judicial process", it is subject to the qualification that it is a normal but not a universal incident - Public Service Board of New South Wales v Osmond (1986) 159 CLR 656 at 667 per Gibbs CJ; (2) the content and detail of the reasons for decisions to be provided will vary according to the nature of the jurisdiction which the body in question is exercising and the particular matter the subject of the decision - Wainohu v New South Wales (2011) 243 CLR 181 at [56] per French CJ and Kiefel J; (3) the administration of justice in this regard requires a pragmatic and functional approach to the obligations imposed upon decision makers at first instance - Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 at [46] per Basten JA; (4) not only is the obligation not universal in nature, but it is variable in its content and whilst transparency in decision-making is an important value, it is not cost free, and may involve separate parameters of quantity and quality - Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 at [48] per Basten JA.
By the time of the Tribunal hearing on 12 October 2016, the parties had agreed in conciliation to consent orders made on 5 August 2016 that Como Leather "complete installation of recliners and lounge suite" on or before 31 August 2016. It was common ground that that had not occurred. The Tribunal Member had before her the letter from "Alex" of Leather King dated 9 August 2016 which stated that he had attempted to contact Ms Harris on 10, 22 and 28 August 2016. The transcript confirms that Ms Harris disputed that it was possible for those attempts to have occurred given the date of the letter and the fact that no messages were left on her voice mail. The transcript also records that the earlier unsuccessful attempt by Como Leather's representative Raphael Jordemir to fix the problem on 9 May 2016 was discussed; and that Como Leather's representative acknowledged in oral evidence that Leather King managed all their services, and that the appointment of Leather King after the conciliation to complete the repair was "where it went pear shaped" for them.
The Tribunal Member noted at paragraph 6 of her reasons the concession made at the hearing that Como Leather should have managed the process [of entrusting the repair to Leather King] to ensure that the order, being the order made by consent on 5 August 2016, was complied with. While the explanation of the Tribunal Member's reasoning process at paragraph 12 could have been more detailed, taking a pragmatic and functional approach to the obligation imposed on the Tribunal Member, the Appeal Panel is satisfied that, when regard is had to the Member's reasons as a whole, the reasons were adequate to explain her conclusion that Como Leather had had a reasonable time to remedy the defect in the lounge.
Having regard to the transcript, the Appeal Panel is satisfied that the documentary and oral evidence provided an evidentiary basis on which the Member's findings could be based. There was no dispute that the repairs had not been completed by 31 August 2016 when the consent orders required that they be completed or by the date of the hearing on 12 October 2016. Como Leather's representative acknowledged in her oral evidence that the process could have been handled better. Como Leather has not established that the Tribunal Member made a finding for which there was no evidence.
The Appeal Panel being satisfied that there has been no error of law demonstrated, the issue arises whether leave to appeal on other grounds should be granted. As refined during oral submissions on the appeal, Como Leather's submissions were that the decision to order that it refund the purchase price of $8,550 was not fair and equitable, and that there would be a substantial miscarriage of justice were the Tribunal Member's rejection of the letter from Leather King to stand as there was no evidence to contradict that letter. The first submission is essentially an expression of disagreement as to the outcome. As to the second submission, the Appeal Panel does not agree that there was no evidence to contradict the contents of the Leather King letter concerning its attempts to contact Ms Harris. The transcript discloses that the Tribunal had before it the sworn evidence of Ms Harris stating that she does have voice mail available on her telephone and denying having received any voice mail messages on the dates asserted. It was open to the Member to prefer that evidence to the assertion in the Leather King letter, which was not signed, did not identify the author beyond his or her first name "Alex" and designation as "Leather King Technician", and was not supported by oral evidence from the author.
Como Leather has not established that there was a failure in the way the matter was conducted or decided which deprived Como Leather of a chance that was fairly open of achieving a better outcome than occurred either because the decision was not fair and equitable or because the decision was against the weight of the evidence. Como Leather abandoned at the appeal hearing its submission that there was significant new evidence, and did not rely on the affidavit of Raphael Jordemir affirmed on 9 November 2016. The Appeal Panel notes, based on the transcript, that Como Leather had had the opportunity to put forward whatever evidence it sought to rely upon in contesting Ms Harris' claims, and that the evidence of Mr Jordemir could not in any event have been regarded as evidence that was not available at the time of the hearing. Leave to appeal should be refused. The Appeal Panel also notes for the sake of completeness that the "Satisfaction and Completion Notification" signed by Ms Harris could have been relevant only to a submission that the lounge was not defective, yet Como Leather did not at any time dispute that the lounge required repair.
The application for leave to appeal is dismissed and the appeal must also be dismissed. In considering what orders should be made on the appeal pursuant to s 81 of the NCAT Act, the Appeal Panel notes that the Tribunal Member discussed at the hearing the arrangement Ms Harris had with a finance company for purchase of the lounge, and her position that if she were successful in recovering the purchase price of $8,550 including delivery, she would pay the balance owing to the finance company. Neither party on the appeal sought to challenge the basis on which that aspect of the matter was dealt with at first instance, and the Appeal Panel has no evidence as to the actual amount owing at the time of the decision below (or at the date of this decision). In those circumstances, the Appeal Panel does not consider that there is any basis on which to disturb the Tribunal Member's inclusion in her orders of the amount of $8,550.00 in respect of the refund of the purchase price of the lounge.
The orders of the Appeal Panel are:
Leave to appeal refused
Appeal dismissed. 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: 28 April 2017

Australian Consumer Law Civil and Administrative Tribunal Act 2013(NSW)

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Judgment (7 paragraphs)

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