Fiani v Daikin Australia Pty Limited

1. This is an appeal from a decision of the of the Tribunal in the Consumer and Commercial Division which dismissed the appellant's claim for damages on the ground that the Tribunal had no jurisdiction to determine the claim because the proceedings had been commenced outside the three-year time limit for a consumer claim set out in s 79L of the Fair Trading Act 1987 (NSW).
2. The wording of the order the subject of this appeal was as follows:

The application for compensation in relation to a breach of consumer guarantee claim, is dismissed after hearing, as the application was not lodged with the Tribunal within the requisite three years.

1. The appellant made a claim for damages against the respondent, as the manufacturer of that the outdoor unit of an air conditioning system which was installed and commissioned at the appellant's home in December 2016. The contractor which supplied that air-conditioning system to the appellant was not a party to the proceedings.
2. It was asserted by the appellant that he had also advanced a claim against the respondent as the supplier of services in respect of work done in June 2019, when the compressor and a printed circuit board in the outdoor unit were replaced, under warranty, at no cost to the appellant.
3. After the system failed in January 2024, in April 2024 the appellant replaced the outdoor unit at his cost and, on 27 May 2024, lodged an application which was heard on 5 September 2024.
4. The issues raised in this appeal were that the Tribunal (1) did not provide the appellant an opportunity to make submissions as to whether the claim was out of time, and (2) failed to consider the claim based on the supply of services in 2019.
5. For the reasons set out below, we have decided that the appeal should be allowed and that the proceedings should be remitted to a differently constituted Tribunal for redetermination.

1. Internal appeals may be made either as of right on a question of law, or with leave (that is, the permission) of the Appeal Panel: s 80(2) of the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act). In John Prendergast & Vanessa Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 and in Unique Commercial Group Pty Ltd v Cusumano [2024] NSWCATAP 204 the question of what constitutes a question of law was considered.
2. It is not necessary to set out or summarise what was said in those decisions in this instance since questions of law have clearly been raised, namely (1) whether there was a failure to afford procedural fairness in that the appellant did not have an opportunity to address the question whether the Tribunal lacked jurisdiction because the proceedings were time-barred, and (2) whether there was a failure to consider a claim raised by the appellant.
3. For the reasons set out below, it is not necessary to consider the circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division.

1. After the Appeal Panel had identified the relevant documents, the parties made oral submissions, following in the usual sequence of appellant then respondent, followed by the appellant in reply, so that each party was able to speak in support of their case and to respond to the case of the other party.

1. A Notice of Appeal was received, within time, on 3 October 2024 and the Reply to Appeal was received on 1 November 2024.
2. The documents lodged by the parties in respect of this appeal were those received from the appellant on 15 November 2024 and 6 December 2024, and from the respondent on 29 November 2024.

1. In his submissions, the appellant noted that the respondent provided a five-year warranty on new goods and, for repairs, a 12-month warranty on parts and a 3-month warranty on labour. It was contended that those warranties were inadequate, and that the appellant was not out of time because his claim in relation to the breakdown in January 2024 was within time by reference to s 273 of the Australian Consumer Law (the ACL).
2. Reference was made to the page submitted at first instance which was headed "Summary of orders sought". The body of that document is quoted below:

1. In relation to the faulty goods (as manufacturer of the goods) and service (as supplier of service), we request the highest possible value from the options below or available under the ACL -

a. Reimbursement for cost of replacement of the faulty outdoor unit $16,875 or

b. Refund for $18,000 being original price of the faulty outdoor unit or

c. Compensation of $18,000 being the decrease in value of the faulty outdoor unit or

d. Reimbursement of $9,990 towards out costs of rectifying the faulty outdoor unit. This is based on the value of the repair originally quoted by Daikin, which should have been carried out at no charge under ACL but was refused.

a. $4,166 for inconvenience our young family endured being without adequate heating/cooling for 2 years and 10 months (approximately $4 per day) and

b. $4,000 for time spent on this matter. We conservatively estimate that we have spent 240 hours (@$25 hour = $6000) dealing with the failed compressors

3. That Daikin withdraw its $297 invoice dated 22/2/24 dealing with the 1 hour call out to confirm the compressor and inverter PCB had both failed for the second time.

4. That Daikin reimburse our NCAT tribunal costs of $120

1. The appellant's case was said to be based on a breach of s 54 of the ACL in relation to the provision of goods in 2016 and s 60 in relation to the provision of services in 2019. It is noted that the 2016 installation was by a third party, with the result that what may be termed the 2016 claim was a claim by a consumer against a manufacturer. It was submitted that what may be termed the 2019 claim related to services provided by the respondent because those services were provided by its agent, Benchmark Air Solutions (Benchmark).
2. Reference was made to an invoice of the respondent dated 22 February 2024 which referred to a fault in the compressor and the invertor board, being a printed circuit board.
3. Reliance was placed on a single page document, signed by the managing director of BSF Air Conditioning Pty Ltd (BSF), dated 24 June 2024 and headed "Witness statement and opinion", which included a sentence in its fifth paragraph that said:
4. The failure would be due to either a fault in the outdoor unit, or poor commissioning.
5. While only typed extracts of the transcript of the first instance hearing were provided, the appellant noted that, at what was described as paragraph 183, he said:

I think I'd just highlight again that it's not only a responsibility as a manufacturer of goods, which is clearly detailed under the Australian Consumer Law, but also as a supplier of the service to repair the goods in June 2019 that I brought forward this claim.

1. Our attention was also directed to the following exchange between the presiding member (PM) and the appellant (A) during the first instance hearing:

PM I think we should focus on whether the original system was a lemon and everybody's liabilities and responsibilities at that point

A and I think also the supply of the service which failed 4.5 years later

1. Another reference to the transcript was to where the respondent's representative used the words "yes, they would have been our agent" in relation to what was done by Benchmark in 2019.
2. Submissions were also made in relation to the various ways in which the claim for damages was framed.
3. It was the appellant's case that the limitation period did not commence to run until the problem arose in January 2024, based on s 273 of the ACL, and that the presiding member did not either (1) raise with the appellant during the hearing the question of whether the appellant's claim was out of time, or (2) consider the claim based on the provision of services in 2019, but confined attention to the provision of goods in 2016.

1. For the respondent, it was first submitted that the appellant had only made statements by reference to the facts and had not indicated either any legal principle or basis for granting leave: that he had only provided his views and opinions. Further, that what the appellant claimed was an expert report was only a letter from a service technician which was equivocal. The respondent's case was that the appellant's claims were not made within the applicable time limit and that there would be no different outcome if that issue was now litigated.
2. It was contended that (1) the only available claim for a breach of s 54 was against the respondent as the manufacturer, (2) there were what were said to be minor incidents requiring servicing after the 2016 supply, but nothing substantive until 2019 when a problem arose with the compressor, (3) that, apart from the limitation issues, the appellant had not discharged the onus of proof which he bears in order to be entitled to relief under the ACL, (4) as to the service issue, it was observed that after the services provided in 2019 the air-conditioner worked for 4½ years which was said to suggest that the work was done with due care and skill.
3. Reliance was also placed on the respondent's written submissions that were received on 29 November 2024. Those submissions may be summarised as (1) that the first instance decision did not involve any error in finding that the Tribunal did not have jurisdiction to consider the appellant's claim, (2) that there was no error in failing to consider the claim based on the provision of services in 2019, (3) that there was no basis for granting leave to appeal, and (4) that neither the claim based on the provision of goods in 2016 (the claim based on s 54 of the ACL) nor the claim based on the provision of services in 2019 (the claim based on s 60 of the ACL) had been proved. Brief submissions were also made in relation to the damages claimed by the appellant.

1. Omitting matters which repeated what had already been submitted, the following points were made. First, there was no obligation to comply with the Tribunal's Code of Conduct for expert witness because the claim was for less than $30,000. Secondly, that the appellant would have been able to refute the three-year limitation period decision is he had been provided with an opportunity to do so. Thirdly, that the air-conditioner that was commissioned in December 2016 did not work properly and a lot of time was spent trying to make it work effectively. Fourthly, that the first instance decision did not find there had been a failure to prove either a case based on s 54 or s 60 of the ACL as the decision was that the appellant's claim was outside the applicable time limit.

1. In the FTA, s 28 makes the Australian Consumer Law (the ACL) part of the law of New South Wales.
2. Within the ACL, Chapter 3 is headed "Specific Protections" and Part 3.2 of that Chapter deals with consumer transactions. Division 1 of that Part sets out consumer guarantees, and Subdivision A within that Division, deals with guarantees relating to the supply of goods in ss 51 to 59. Subdivision B, dealing with guarantees relating to the supply of services, contains ss 60 to 63.
3. A guarantee that goods will be of an acceptable quality is provided by s 54:

(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.

(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.

(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.

1. As to services, s 60 provides a guarantee which is in the following terms:

If a person supplies, in trade or commerce, services to a consumer, there is a guarantee that the services will be rendered with due care and skill.

1. Chapter 5 of the ACL is headed "Enforcement and remedies". Part 5.4 of that Chapter deals with remedies relating to guarantees. Division 1 of that Part deals with actions against suppliers. Subdivision A of that Division, which deals with actions against suppliers of goods, contains sections 259 to 266. Subdivision B, dealing with actions against suppliers of services, contains sections 267 to 270.
2. Division 2 of Part 5.4 within Chapter 5 deals with actions for damages against manufacturers of goods. It contains sections 271 to 273: s 271 permits an action to be brought against the manufacturer of the goods provided by the supplier, s 272 which provides an entitlement to claim damages, and s 273 imposes a limitation period.
3. Hence, the ACL provides separate guarantees in relation to the supply of goods and services and the remedies against suppliers and manufacturers for a breach of those guarantees are not the same.
4. For a claim against a manufacturer, the only available remedy is a claim for damages, as indicated in Volkswagen Group Australia Pty Ltd v Saad [2022] NSWCATAP 133 (Saad) at [104].
5. As to limitation periods, s 273 is headed "Time limit for actions against manufacturers of goods". That section provides as follows:

An affected person may commence an action for damages under this Division at any time within 3 years after the day on which the affected person first became aware, or ought reasonably to have become aware, that the guarantee to which the action relates has not been complied with.

1. However, the appellant's claim was subject to the limitation period imposed by s 79L of the FTA which, so far as is relevant to this appeal, is set out below:

(1) The Tribunal does not have jurisdiction to hear and determine a consumer claim if any of the following apply-

(a) the cause of action giving rise to the claim first accrued more than 3 years before the date on which the claim is lodged,

(b) ...

1. The Tribunal, at first instance, was required to consider and respond to substantial submissions which have been squarely raised and seriously advanced: Rice Marketing Board for the State of New South Wales v Forbidden Foods Pty Limited [2020] NSWCATAP 182 (RMB) at [170]-[175]. It was required to address a substantial, clearly articulated argument relying upon established facts: Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26 (Dranichnikov) at [24].
2. The powers of an Appeal Panel are set out in s 81 of the NCAT Act, headed "Determination of internal appeals", which provides as follows:

(1) In determining an internal appeal, the Appeal Panel may make such orders as it considers appropriate in light of its decision on the appeal, including (but not limited to) orders that provide for any one or more of the following:

(a) the appeal to be allowed or dismissed,

(b) the decision under appeal to be confirmed, affirmed or varied,

(c) the decision under appeal to be quashed or set aside,

(d) the decision under appeal to be quashed or set aside and for another decision to be substituted for it,

(e) the whole or any part of the case to be reconsidered by the Tribunal, either with or without further evidence, in accordance with the directions of the Appeal Panel.

(2) The Appeal Panel may exercise all the functions that are conferred or imposed by this Act or other legislation on the Tribunal at first instance when confirming, affirming or varying, or making a decision in substitution for, the decision under appeal and may exercise such functions on grounds other than those relied upon at first instance.

1. There is no doubt that the ACL, which is consumer protection legislation, is a complex piece of legislation. Combining that with the Tribunal being a forum which is intended to cater for self-represented litigants can be challenging.
2. The need to identify what are the issues requiring determination, if not done at the directions hearing or by the provision of Points of Claim, can be done at the outset of the final hearing so it is clear to the parties and the presiding member what are the issues to which the evidence and submissions should be directed.
3. In this instance, the limitation period, which was found to deprive the Tribunal of jurisdiction, and which was given as the reason for the outcome, does not appear to have been raised with either party during the hearing.
4. Mahon v Air New Zealand Limited [1985] AC 808 is a Privy Council decision which makes it clear that a decision should not be made on a matter which the parties have not had an opportunity to address.
5. Further, the applicant did raise a claim based on the provision of services in 2019:

(1) In the listing of the orders sought, the first paragraph commenced with the words: "In relation to the faulty goods (as manufacturer of the goods) and service (as supplier of service) ...". Those words clearly indicated that there were two aspects of the appellant's case.

(2) During the first instance hearing, the appellant said: "I think I'd just highlight again that it's not only a responsibility as a manufacturer of goods, which is clearly detailed under the Australian Consumer Law, but also as a supplier of the service to repair the goods in June 2019 that I brought forward this claim." Those words made it clear that the appellant's second claim was based on the respondent being a supplier of services related to the June 2019 repairs and not just the respondent being the manufacturer of goods which were supplied by a third party in 2016.

(3) When the presiding member suggested that the supply of goods in 2016 should be the focus of the hearing, the appellant replied: "and I think also the supply of the service which failed 4.5 years later".

1. While it would be expected that a legal representative would more clearly have raised the second aspect of the appellant's case, the self-represented appellant did enough to render what was said in RMB and Dranichnikov applicable.
2. The appellant was entitled to (1) make submissions in relation to the issue of the limitation period, and (2) have his claim based on the provision of services in 2019 considered. We are satisfied that those two failures occurred, and that they each constitute an error on a question of law.
3. In the absence of relevant findings in the first instance decision, and the absence of all the evidentiary material presented at first instance, it is not appropriate for us to redetermine the merits of the appellant's claims.
4. Being of the view that the applicant's claims should be remitted for redetermination, it is not appropriate to go into any detail as to either the claims made by the appellant, namely (1) a claim for damages against the respondent as the manufacturer of the goods supplied in 2016, based on s 54 of the ACL, and (2) a claim against the respondent as the supplier of services in 2019, based on s 60 of the ACL, or the evidence of the parties.

1. In the ACL, s 273 limits the time within which a consumer may commence proceedings while s 79L of the FTA imposes a limit on the jurisdiction of the Tribunal.
2. Hence, if a consumer institutes proceedings in a court, s 273 will apply and s 79L will not be applicable. However, if that consumer instead commences proceedings in the Tribunal, s 79L applies and the Tribunal may not have jurisdiction to hear and determine a claim, even if the proceedings were commenced within the time limit imposed by s 273.
3. Since s 79(1)(a) of the FTA deprives the Tribunal of jurisdiction if "the cause of action giving rise to the claim first accrued more than 3 years before the date on which the claim is lodged", it is necessary to consider when the cause of action accrued.
4. The cause of action in relation to the 2016 claim of the appellant was a claim against a manufacturer (as permitted by s 271 of the ACL) which claimed damages (as permitted by s 272 of the ACL), based on a breach of s 54.
5. The cause of action in relation to the 2019 claim of the appellant was a claim against a supplier (as permitted by s 267 of the ACL) which claimed damages (as permitted by s 267(4) of the ACL), based on a breach of s 60.
6. Since the elements of each of those causes of action include both a breach and suffering damage, that cause of action did not accrue until the appellant suffered damage, as indicated by the decisions referred to below.
7. It is noted that the kind of damage under consideration in this case is economic loss, as distinct from physical injury or property damage.
8. In Sacks v Hammond [2016] NSWCATAP 225 (Sacks) at [56] it was said:

A cause of action under s 267(4) of the ACL NSW has two discrete elements: a failure to comply with a guarantee under Subdivs of Div 1 of Pt 3-2 of the ACL NSW (to which s 60 belongs) and suffering loss or damage as a result of such failure. It follows that the cause of action under s 267(4) does not accrue until loss or damage is sustained as a result of the alleged failure to comply: Wardley at 521; Arcadi v Colonial Mutual Life Assurance Society Ltd (1984) ATPR 40-473 at 45455 (Arcadia) and King v Yurisich [2006] FCAFC 136 at [55]- [61].

1. After quoting that paragraph, in Barbour v Autosports Five Dock Pty Ltd [2020] 141 (Barbour) at [67] those principles were said to apply to claims that there had been a breach of s 54 of the ACL:

Whilst the Appeal Panel was considering a breach of a consumer guarantee under s 60 of the ACL, the principles are equally applicable to an allegation of a breach of the statutory guarantees under ss 54 and 55 of the ACL and a claim made under s 259 of the ACL.

1. In Saad at [123] the Appeal Panel confirmed what was said in Sacks and Barbour:

A cause of action "first accrues" when facts which constitute the elements of the relevant cause of action crystallise or combine so that all the elements necessary to entitle a person to make a consumer claim are present: Sacks v Hammond [2016] NSWCATAP 225 at [34]. Put another way, a cause of action accrues when damage is suffered, whether or not the applicant/plaintiff is aware of it: Wilson v Winnicott [2021] NSWCATAP 211 at [10] and [57]: See also Barbour v Autosports Five Dock Pty Ltd [2020] NSWCATAP 141 (Barbour) at [63]-[68].

1. It is not appropriate to express a view on how those legal principles apply to the facts of this case for following reasons. First, since the parties did not, for the hearing of the appeal, provide all the evidence from the first instance hearing. Secondly, expressing a view on the operation of the limitation period in this instance may be seen as providing advice to a party and/or suggesting what should be the outcome of the rehearing.

1. For the sake of completeness, there are other matters are worth mentioning.
2. First, that matters such as whether there has been a major failure, whether the goods were rejected, and whether they were rejected within the rejection period are not relevant to the 2016 claim because those issues only apply to a claim made against a supplier, not a manufacturer.
3. Secondly, it is noted that the appellant contended that the warranties provided by the respondent were inadequate, being five years for the supply of goods and, in the case of repairs, 12 months for parts and 3 months for labour. That is not an issue that required determination either at first instance or in this appeal. Both in relation to the goods supplied in 2016 and the services provided in 2019, the warranties provided by the respondent had expired prior to the commencement of these proceedings and it was only necessary to consider the statutory guarantees upon which the appellant relied: being the guarantee provided by s 54 in respect of the goods supplied in 2016 and the guarantee provided by s 60 in respect of the services provided in 2019.
4. Further, if the only issue with the decision of the Tribunal had been the procedural fairness issue and the fact that the 2019 services claim was not addressed then it would have been appropriate and convenient for the proceedings to be redetermined by the same Tribunal member, guided by what we have said concerning the limitation question and there would have been no need for the proceedings to be remitted to a differently constituted Tribunal.
5. However, the Tribunal expressed a firm view about the merits of the claim, namely that there was no compelling or objective evidence in respect of the question whether there had been non-compliance with the statutory guarantee in s 54 of the ACL. As those views were adverse to the appellant's case, we consider that the proceedings should be redetermined by a differently constituted Tribunal.

1. Having come to the view that there were errors which warrant allowing the appeal, it is not necessary to consider any of the issues relating to grounds which require leave to appeal.

1. The proceedings should be remitted to a differently constituted Tribunal. Such an order is in the interests of justice in this case, including its appearance, in accordance with the approach to be taken to the making of such an order as set out by the Appeal Panel in Chapman v Nicolosi (No 2) [2023] NSWCATAP 73 at [16]- [24]. This is because the Tribunal, as originally constituted, expressed a view, adverse to the appellant, about the merits of the appellant's case concerning non-compliance with s 54.
2. For the reasons set out above, the following orders are made:

(1) The appeal is allowed.

(2) The order made by the Tribunal on 5 September 2024 is set aside.

(3) The Appellant's application is remitted to the Consumer and Commercial Division of the Tribunal to be determined on its merits, by a differently constituted Tribunal, subject to any further directions that the Tribunal may make with respect to reliance upon additional evidence and/or submissions.

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.