Kakakios v D & S Radosh Pty Ltd

REASONS FOR DECISION

The first appellant appeals from a decision of the Tribunal's Consumer and Commercial Division in which the Tribunal dismissed the first appellant's application for remedies in relation to the supply of a mattress with adjustable massage base (the "mattress and base") and damage to the floor of the first appellant's dwelling caused by the installer when the mattress and base were installed.
The first appellant's case was based upon certain consumer guarantee provisions of the Australian Consumer Law ("ACL") which is a law of NSW and designated as the Australian Consumer Law (NSW) ("ACL NSW") - see s 28 of the Fair Trading Act 1987 (NSW) ("FTA"). That case depended upon, amongst other things, the first appellant being a "consumer" and the mattress and base being "supplied" to her (within the meaning of those terms).
The first appellant succeeded on all relevant issues in the Tribunal other than one. The one issue upon which she failed was that the Tribunal held the mattress and base were not supplied to her, but were supplied to her daughter, Fiona Purkis, who accompanied the first appellant when the mattress and base were purchased.
Fiona Purkis was not a party to the proceedings when they were heard in the Tribunal below.
As we shall later explain, the finding by the Tribunal that the mattress and base were supplied to Fiona Purkis, and not to the first appellant, was inconsistent with the Tribunal's finding that the first appellant was a consumer and had a consumer claim which the Tribunal had jurisdiction to consider. Those inconsistent findings on a critical issue mean that the Tribunal's decision cannot stand, and the appeal should be upheld.
The remaining substantive question in the appeal was the most appropriate course to adopt given that the Tribunal's decision could not stand. That course, it seems to us, is to add Fiona Purkis (with her consent which she gave at the hearing of the appeal) as a party (as the second appellant on the appeal and the second applicant in the proceedings below) and make orders in the appellants' favour against the respondent, there being no appeal by the respondent against the other findings made by the Tribunal against it.

Background

On 19 March 2017 the respondent supplied the mattress and base for the sum of $3,400.
The mattress and base were delivered and installed in the first appellant's dwelling on behalf of the respondent on 12 April 2017. On that day, and during the installation, the installer damaged the floor of the first appellant's dwelling.
Subsequently, the first appellant complained about the mattress and base. There were various attempts by the respondent to respond to the first appellant's complaints, including inspecting the mattress and base and effecting various repairs. These attempts did not assuage the first appellant's dissatisfaction with the mattress and base.
The first appellant commenced proceedings against the respondent.
The Tribunal has jurisdiction to determine a "consumer claim" pursuant to Part 6A of the FTA - Plath v Snowy Monaro Regional Council [2019] NSWCATAP 165 at [4].
Per Plath at [5], s 79I of the FTA provides that a consumer may apply to the Tribunal for a determination of a consumer claim. Section 79E defines a consumer claim as follows: 79E Meaning of "consumer claim" (cf CC Act 1998, s 3A) (1) For the purposes of this Part, a consumer claim means a claim by a consumer, for one or more of the following remedies, that arises from a supply of goods or services by a supplier to the consumer (whether or not under a contract) or that arises under a contract that is collateral to a contract for the supply of goods or services: (a) the payment of a specified sum of money, (b) the supply of specified services, (c) relief from payment of a specified sum of money, (d) the delivery, return or replacement of specified goods or goods of a specified description. (2) For the avoidance of doubt, a reference in this Part to a consumer claim includes a reference to a claim by a consumer against a supplier (for example, a manufacturer or wholesaler) who is not the direct supplier of goods or services to the consumer if the claim arises from or in connection with the supply of those goods or services by the direct supplier to the consumer.
"Consumer" is defined in s 79D as follows: consumer means any of the following persons or bodies to whom or to which a supplier has supplied, or agreed to supply, goods or services (whether or not under a contract), or with whom or with which a supplier has entered into a contract that is collateral to a contract for the supply of goods or services: (a) a natural person, …
"Supply" in relation to goods (it is defined similarly in relation to services) is defined in s 79G thus: (1) For the purposes of this Part, a reference to the supply of goods includes a reference to any of the following: (a) supplying goods by way of sale, exchange, lease, hire or hire-purchase, (b) resupplying goods, (c) agreeing to supply goods, (d) supplying goods together with services.
Thus, the definition of "supply", being inclusive, is wide.
In Australian Competition and Consumer Commission v Flight Centre Ltd (No 2) [2013] FCA 1313; (2013) 307 ALR 209 at [130] Logan J said: "Such is the breadth of the ordinary meaning of the word 'supply', '[t]o provide, or provide with, something. a. trans; to furnish or provide (a person) with something; (in early use) to satisfy the wants of, provide for; (now usually) to furnish with regular supplies of a commodity. Freq. with with' (Oxford English Dictionary, online edition, accessed 14 Nov. 2013), I doubt that the inclusive quality of the s 4 definition [identical to the definition in s 2 of the Australian Consumer Law] adds much, if anything, to the meaning of the word for the purposes of the TPA. It has long been regarded as a word of wide import: Commonwealth of Australia v Sterling Nicholas Duty Free Pty Ltd [1972] HCA 19; (1972) 126 CLR 297 at 309."
Thus, "supply" includes providing or furnishing something to another and does not depend on the existence of a contract between supplier and consumer, nor necessarily the consumer paying the supplier for the goods (or services).
The Tribunal turned its mind to this question of jurisdiction. It said at [13]: "The applicant (first appellant) was in the category of a consumer and the respondent in the category of a supplier, the claim was within the definition of a consumer claim for supply of services (the Tribunal meant goods and services) in NSW under a contract made in NSW and was brought within the 3 year time limit under Part 6A (ss 79D - 79L) of the Fair Trading Act 1987 (NSW) (FTA). The claim is under the limit provided for in FTA s 79S of $40,000. The claim is accordingly within the Tribunal's jurisdiction. FTA s 28 makes the Australian Consumer Law (ACL) part of the law of New South Wales."
Thus, the Tribunal opined that it had jurisdiction. It expressly found that the first appellant was a "consumer" (meaning, a person to whom a supplier supplied [furnished or provided] goods). It expressly found that the first appellant was making a "consumer claim" (namely, a claim by a consumer that arose from a supply of goods to the consumer).
Put another way, and given the definitions of "consumer" and "consumer claim", the findings that the first appellant was a consumer making a consumer claim necessarily implied factual findings that the goods and services were supplied to the first appellant because it is only if that were so that she fell within the definition of a "consumer" making a "consumer claim" over which the Tribunal had jurisdiction.
Contrary to those findings, the Tribunal later said at [20] - [21] of its reasons: "[20] Irrespective of the merits of the dispute, unfortunately this application must be dismissed because it has been brought by the wrong applicant. [21] The claim for relief was solely under the consumer guarantees for supply of goods and services already described, with the services being the installation of the mattress and base. Those provisions can be relied upon by the consumer to whom the goods were supplied. On the evidence described earlier in these reasons, that person was clearly the elder daughter (Fiona Purkis), not the current applicant her mother. There was no application to amend to change the parties."
In our opinion the finding at [21] of the Tribunal's reasons that the first appellant was not the consumer to whom the goods and services were supplied is contrary to the necessarily implicit findings at [13] of the Tribunal's reasons that she was, as we explained earlier in these reasons.
Having opined that it had jurisdiction the Tribunal turned its mind to the particulars of the consumer claim against the eventuality that its conclusions set out at [21] above were wrong.
The first appellant placed reliance on the ACL NSW and, relevantly for this appeal, s 55 in relation to the mattress and base and s 61 in relation to the service of installation.
Under s 3 of the ACL NSW a person is taken to have acquired goods as a consumer if the amount paid for the goods does not exceed $40,000 and the goods are of a kind ordinarily acquired for personal, domestic or household use or consumption. The mattress and base cost less than $40,000 and were of a kind ordinarily acquired for personal or domestic use.
Section 55 of the ACL NSW says: 55 Guarantee as to fitness for any disclosed purpose etc. (1) If: (a) a person (the supplier) 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 reasonably fit for any disclosed purpose, and for any purpose for which the supplier represents that they are reasonably fit. (2) A disclosed purpose is a particular purpose (whether or not that purpose is a purpose for which the goods are commonly supplied) for which the goods are being acquired by the consumer and that: (a) the consumer makes known, expressly or by implication, to: (i) the supplier; or (ii) a person by whom any prior negotiations or arrangements in relation to the acquisition of the goods were conducted or made; or (b) the consumer makes known to the manufacturer of the goods either directly or through the supplier or the person referred to in paragraph (a)(ii). (3) This section does not apply if the circumstances show that the consumer did not rely on, or that it was unreasonable for the consumer to rely on, the skill or judgment of the supplier, the person referred to in subsection (2)(a)(ii) or the manufacturer, as the case may be.
Section 61 of the ACL NSW, which concerns services, is, in substance and in the context of this case, the same. That is, it depends upon services being supplied to a consumer for its operation.
The Tribunal found the respondent had been informed of the particular purpose for which the mattress and base were required, the mattress and base were not reasonably fit for that purpose and that this constituted a major defect. The Tribunal found the installation service was not reasonably fit for that purpose (the installer having damaged the floor by dragging, rather than lifting and carrying, the mattress and base across the floor).
The Tribunal said that "but for the difficulty with the parties" (see [20] of the Tribunal's reasons) it would have made a money order in the amounts sought by the first appellant (being $3,480 for the mattress and base and delivery fee, and $1,980 for damage to the floor), together with an order that the mattress and base were to be made available for collection by the respondent at its cost on reasonable notice at a reasonable time.
There is no appeal by the respondent from those findings.
As we have touched on earlier, when it made its findings at [20] and [21] of its reasons, the Tribunal seems to have had in mind the provisions of ss 55 and 61 of the ACL NSW and concluded that there was no supply of goods or services to the first appellant, notwithstanding it had found there was a supply to her because she fell within the definition of a "consumer" bringing a "consumer claim" as we have earlier explained.
The making of inconsistent findings, on matters of significance, is an error which cannot be allowed to stand.
In these circumstances it would be open to us to resolve the quandary between the two inconsistent findings by making a finding of fact whether the mattress and base were supplied to the appellant, to Fiona Purkis, or perhaps to both, as such a finding would not depend upon the credit of any witness - see Robinson v Government Insurance Office (NSW) (1994) 19 MVR 319 and s 81 of the Civil and Administrative Tribunal Act 2013 (NSW) (the "NCAT Act").
Alternatively, the matter could be remitted to the Tribunal below to determine all issues, or just the issue as to supply.
The respondent submits that the appropriate order is that the appeal be upheld, and that the parties be allowed to return to the Tribunal below, have Fiona Purkis commence an application in her own name, and then contest all issues including the issues resolved against the respondent in these proceedings.
We do not believe that to be the best course for two reasons.
First, an estoppel of the type referred to in Rippon v Chilcotin [2001] NSWCA 142; (2001) 53 NSWLR 198 would probably, or at least arguably, arise against the respondents. Such an estoppel occurs where a decision on an issue litigated between party A and party B binds the parties in a subsequent case between parties A and C. That is, the respondents may not be able to contest any issue other than "supply" in a case brought by Fiona Purkis, and, if that were the case, given the Tribunal's finding that Fiona Purkis was the consumer, there would seem no point in returning the matter to the Tribunal.
Secondly, the respondent did not appeal from the findings against it in these proceedings. Such an appeal was an obvious course to adopt because the respondent would have known that if the appellant succeeded on her appeal then, in the absence of any successful appeal being brought by the respondent at the same time, the orders mentioned by the Tribunal below would be entered against it.
In all of the circumstances it seems to us the most appropriate course to adopt would be to add Fiona Purkis as a party to the appeal and to the proceedings. She was present at the hearing of the appeal and indicated her consent to being so joined.
We are able to exercise all the functions conferred on the Tribunal at first instance by the NCAT Act - s 81(2) of the NCAT Act. One of those functions is the ability to join a party to proceedings if we consider they should be joined - s 44(1) of the NCAT Act. If joined pursuant to s 44, a party becomes a party to the proceedings [r 27 of the Civil and Administrative Tribunal Rules 2014 (NSW)] and to the appeal (r 29).
The Tribunal, and Appeal Panels, are required to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms - s 38(4) of the NCAT Act.
The guiding principle in applying the NCAT Act is to facilitate the just, quick and cheap resolution of the real issues in the proceedings - s 36(1) of the NCAT Act.
In Moloney v Taylor [2016] NSWCA 199 the Court (McColl JA, Simpson JA and Ball J) said at [30]: "Nevertheless, as is apparent from the provisions of s 36 to which we have referred, a body such as the Tribunal (which expression includes the Appeal Panel) is not expected to conduct its proceedings with the formality of a court of law. Rather, it is required to conduct itself with minimum formality and to reach decisions according to the substantive merits of the case, and not by reference to legal form or technicalities. Further, it is to exercise its powers speedily and economically."
In our opinion those various considerations persuade us that we should add Fiona Purkis as second applicant / second appellant.
The first appellant succeeded on all issues below other than to whom the goods and services were supplied. The respondent lost its defence to the case on s 55 and 61 of the ACL NSW. There is no appeal from the findings on those issues excluding to whom the goods were supplied.
Those other issues were where the real issues in dispute lay, where the substantive merits of the case resided, and were decided in the first appellant's favour. It does not seem to us that there was a real issue with the respondent as to whom was the proper party, it was more interested in defending the allegations as to an allegedly defective mattress and base, whether there was a disclosed purpose and whether the goods and services were reasonably fit for purpose. It seems to us that those issues would have been litigated in the same way they were if Fiona Purkis had also been an applicant.
Therefore, in our opinion, in applying the NCAT Act and procedural rules in a manner to facilitate the just, quick and cheap resolution of the real issues in dispute between the parties, and conducting ourselves with minimal formality and according to the substantial merits of the case as we are required to do, it is appropriate to order that Fiona Purkis be added as a party and the orders contemplated by the Tribunal at [29] of its reasons be made.

At a glance

Court

Decision date

Source

Judgment (4 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (9)