Nguyen and Sy v The Trustee for the Nero CKD Unit Trust t/as View by Sydney

NCAT Consumer and Commercial|2017-07-11

REASONS FOR DECISION

The dispute involves a wedding reception that occurred in Walsh Bay, Sydney at a venue overlooking Sydney Harbour, on 15 January 2017. The applicants are the bride and groom. The respondent was the organiser of the wedding reception. Due to a water leak that occurred in the building in the period prior to the start of the wedding reception that continued during the wedding reception, the applicants are dissatisfied with services provided by the respondent.
Although Ms Hobbs (the Chief Executive Officer of the respondent) was listed as a separate respondent to the proceedings, an ASIC business name search on the registered business name "View by Sydney" (with whom the applicants contracted with) indicates that the correct legal entity of the respondent is The Trustee for the Nero CKD Unit Trust t/as View by Sydney.
Proceedings were commenced in the Tribunal on 21 April 2017. The applicants seek damages of $20,000.00, comprised of: (i) A full refund of the $13,043.00 they paid to the respondent for the cost of the wedding reception; (ii) $400.00 for "overtime charges" of the wedding photographer; and (iii) $6,557.00 for "emotional damage".
The matter was listed for a Group List and Conciliation hearing at the Tribunal on 9 May 2017. The parties were unable to resolve the dispute, and the matter was set down for hearing with directions that included the filing and serving of documentary evidence.
Prior to the hearing commencing on 11 July 2017, the Tribunal encouraged the parties to have further discussions (not in the presence of the presiding Member). The parties had further discussions, but were unable to resolve the dispute. The matter proceeded to hearing.

DOCUMENTS OF RESPONDENT

The respondent's documents were as follows: 1. A chronology of events prepared by Ms Hobbs, with comments regarding the version of events of the applicants. 2. Photographs of the wedding reception, including photographs of the water ingress and sheets on the floor to absorb water. 3. A written statement of Ms Bishop, event co-ordinator. 4. The quotation for the wedding dated 30 September 2016, with attached terms and conditions. 5. A tax invoice of the respondent (undated) in the sum of $13,043.60. 6. The run sheet for the wedding. The run sheet had comments written on it regarding the extension of time for canapés and drinks, and the time at which linen sheets were removed from the floor. 7. The wedding menu and beverage package. 8. A letter from Mr Piper, building manager, of Manage Ment Pty Ltd (the building manager of the building in which the wedding reception occurred). 9. A "shift report" by Ms Fathi of the respondent dated 16 January 2017 setting out her version of what occurred at the wedding reception on 15 January 2017. 10. An email of the respondent to its insurance broker dated 20 February 2017, and various emails to its insurer. 11. An email to NSW Fair Trading dated 21 April 2017 responding to the applicants' complaint. 12. Emails between the applicants and respondent for the period from 27 October 2016 to 17 January 2017.

EVIDENCE OF THE APPLICANTS

The applicants stated they had contracted with the respondent for the wedding reception on or about 30 September 2016. The applicants stated they had paid a total amount of $13,043,.60 to the respondent for the wedding reception, including hire of the venue.
The wedding occurred at 4.30 pm, on 15 January 2017, and guests were to arrive at the wedding reception from 6.00pm. However, at approximately 4.00 pm, the event manager Ms Faathi contacted the groom and informed him that there had been a water leak into the wedding reception venue from the office of the tenant upstairs due to a burst water pipe. The event manager stated that tables had been moved and sheets put down on the floor, but that water remained dripping from the ceiling. The event manager stated that she was trying to contact the building manager of the building so that the water leak could be stopped.
As the venue could not be changed at short notice and the applicants had guests who had travelled from overseas to attend the wedding, the decision was made to continue with the wedding reception. The bride was not told about what had happened until just prior to 6.00 pm, as the groom did not want to upset her.
The applicants stated that guests were asked to wait outside on the balcony of the venue. Guests entered the venue at approximately 8.00 pm, which was 2 hours after they were supposed to commence entry. There was still some water dripping from the ceiling, and tables had been moved away from the area of the leak. There were also tablecloths on the floor to absorb water, and a bucket to capture dripping water. The events of the reception were pushed back 2 hours. Guests complained because they had been waiting outside for an extended period and could not sit down.
The applicants stated that, despite the reception commencing 2 hours late, the guests were still asked to leave at midnight. According to the applicants, it was only at approximately 10.30 pm that the water leak stopped.
The applicants stated that the wedding photographer and music DJ had to stay beyond the time period that had originally been booked. Further, guests did not have the opportunity to dance for as long as they should have, due to the delay in starting the reception.
The applicants stated that they were very upset by the condition of the venue due to the water leak, which had spoiled their enjoyment of the wedding. Many guests had complained to them about the condition of the venue due to the water leak and the delay in commencing the reception. Due to the delay, some guests had left early without dessert.
It is unnecessary to set out in detail the contents of the witness statements of Ms Roman; Mr Nguyen and Ms Nguyen, which support the applicants version of events, particularly that the reception started 2 hours late. Neither Ms Roman, Mr Nguyen nor Ms Nguyen were present to give evidence and be questioned.
The witness statement of Mr Hak and Mr Dauzat stated that they had travelled from overseas for the wedding. According to them, they had assisted in setting up the venue, and had witnessed water leaking from different parts of the ceiling. They stated that guests had entered the venue at approximately 8.00 pm, and that water was still dripping from the ceiling, but it was "much less" than previously. Mr Hak and Mr Dauzat stated that the reception finished at 12.00 pm.
In cross examination, Mr Dauzat stated that the photographs in the applicants' documents were taken by him, and although the photographs did not have a time stamp on them, he had checked his phone to verify when the photographs were taken.

EVIDENCE OF THE REPSONDENT

Ms Hobbs stated that the amount paid by the applicants to the respondent for the wedding reception was $12,800.00, not $13,043.00.
Ms Hobbs stated that the respondent did not own the venue of the wedding reception. At approximately 3.00 pm on 15 January 2017, Ms Fathi the wedding co-ordinator employed by the respondent, was present at the venue setting up, when water started leaking from the ceiling. Archer Capital occupied the premises upstairs. Ms Fathi contacted the strata building manager so that measures could be taken to stop the leak.
The water leak continued. Ms Fathi informed the bridal party at approximately 4.00 pm. The leak continued. Ms Fathi re-arranged tables and changed the table cloths of the tables that were wet. Tablecloths were also placed on the floor. The configuration of the room was changed to move tables away from the water leak.
Guests were seated at approximately 7.30 pm, and the bride and groom entered the venue at approximately 7.45 pm. The respondent disputed that the schedule of the wedding was 2 hours late, and stated that it was approximately 1 hour late. According to Ms Hobbs and the written statement of Ms Fathi, the applicants were offered an extension of the wedding of 1 hour, but declined.
Ms Hobbs stated that, after the wedding reception, the applicants sent an email on 17 January 2017 thanking the respondent for the efforts of Ms Fathi. The applicants subsequently sought a refund.
Ms Hobbs submitted that the applicants were not entitled to a refund because: (i) despite a small delay and inconvenience, the respondent had fulfilled its obligations under the contract; (ii) it was not the fault of the respondent that the water leak had occurred; and (iii) the terms and conditions of the contract contained a "force majeure" clause stating that neither party shall be liable for failure to perform contractual obligations due to events including "flood".
In respect of the documentary evidence of the respondent, the only document that it is necessary to refer to in detail is the letter of Mr Piper, building manager of Manage Ment Pty Ltd, which is undated. The letter states that he was informed of the water leak at approximately 3.20 pm on 15 January 2017, and travelled from Cronulla to the venue. After arriving, he made investigations to work out where the water was coming from, and ascertained it was coming from the offices of Archer Capital on Level 2 of the building. Mr Piper eventually was able to contact Archer Capital, and after staff members of Archer Capital arrived, he was let into their premises. Mr Piper ascertained that the water leak was coming from under a sink, and turned off the water supply. He stated that the water leak was stopped at approximately 7.30 pm, but he informed the respondent that water was likely to continue to drip for a period of time due to the build-up of water in the floor space above the ceiling.

JURISDICTION OF THE TRIBUNAL

The applicants fall within the definition of "consumer" under Section 79D of the Fair Trading Act 1987 ('the FTA') and the claim is a "consumer claim" within the meaning of Section 79E of the FTA, as it involves the provision of services in NSW, and proceedings have been commenced within the limitation period in Section 79L of the FTA.
By reason of Sections 28 and 32 of the FTA, the Australian Consumer Law 2010 ('the ACL') is a law of NSW that applies to the circumstances of this dispute.
The Tribunal has jurisdiction in this matter, and its jurisdiction includes the application of common law principles including the law of contract, and the provisions of the ACL. By reason of Section 64 of the ACL, parties cannot contract out of the consumer guarantee provisions regarding services. As the applicants fall within the definition of "consumer" in Section 3 of the ACL, the "consumer guarantee" provisions in Part 3.2 Division 1 of the ACL are implied into the contract between the parties.

APPLICATION OF RELEVANT LEGAL PRINCIPLES

Section 60 of the ACL relevantly provides that there is an implied consumer guarantee that services will be provided with "due care and skill".
Section 61 of the ACL states: 61 Guarantees as to fitness for a particular purpose etc. (1) If: (a) a person (the supplier ) supplies, in trade or commerce, services to a consumer; and (b) the consumer, expressly or by implication, makes known to the supplier any particular purpose for which the services are being acquired by the consumer; there is a guarantee that the services, and any product resulting from the services, will be reasonably fit for that purpose. (2) If: (a) a person (the supplier ) supplies, in trade or commerce, services to a consumer; and (b) 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 services were conducted or made; the result that the consumer wishes the services to achieve; there is a guarantee that the services, and any product resulting from the services, will be of such a nature, and quality, state or condition, that they might reasonably be expected to achieve that result. (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. (4) This section does not apply to a supply of services of a professional nature by a qualified architect or engineer.
The operation of Sections 60 and 61 of the ACL has recently been considered by the Supreme Court of NSW in Moore v Scenic Tours Pty Ltd (No 2) [2017] NSWSC 733, which involved a contract to provide a luxury river cruise on some of the major rivers in Europe, where the cruise was truncated due to floods. The plaintiff succeeded in proving the defendant had breached Sections 60 and 61 of the ACL. Relevantly, in respect of the operation of Section 61(1) of the ACL, Garling J stated: "391. It is to be noted that in the legislation the "particular purpose" stands independently of and precedes the "supply of services". It arises and is communicated at the time of the acquisition of, but prior to, the supply of the services. As well, it is relevant to note that the purpose is a unilateral one of the consumer. It is not necessarily a purpose which must be explicitly agreed, nor does the purpose necessarily form part of a contract for the supply of services. Indeed, in many cases it will not. 392. It is also worth noting that the particular purpose does not have to be an objectively reasonable one. The ACL simply provides that if a particular purpose is made known, and the supplier of services goes on to supply those services knowing (either expressly or impliedly) of that purpose, then the purpose guarantee is brought into effect. 395 The use in the ACL of the qualification "reasonably" when considering fitness for purpose, shows that not every small lapse or shortfall in the provision of services will result in a breach of the purpose guarantee. A supply of services will not be in breach of such a guarantee unless the services are not reasonably fit for the identified purpose. The use of the term "reasonably" also introduces an objectively referable measure. It is a qualitative rather than a quantitative one. It requires an overall evaluation of the services provided, and a determination of their fitness for purpose, qualified by the word reasonable. 396 Such a determination is also necessarily fact-dependant - which means that the issue of whether one or other cruise has not achieved the purpose guarantee may provide a different conclusion." In respect of Section 61(2) of the ACL, Garling J stated (at [399]-[400]): 399. "In its application to these proceedings, the result guarantee contained within s 61(2) of the ACL requires the plaintiff to establish that Scenic supplied the Services to him as a consumer and that he had made known to Scenic, either expressly or impliedly, the result which he wished the Services to achieve. 400 If a supply then occurred, s 61(2) of the ACL imposes a guarantee that the Services supplied by Scenic will be of such a nature and quality that they might reasonably be expected to achieve that result."
I am satisfied that the applicants have established that, at the time the contract for the wedding reception was entered into, the applicants implicitly made known to the respondent that they wanted a wedding that ran reasonably according to schedule, and at a venue that did not have a significant water leak causing (i) water to drip from the ceiling; (ii) water on the floor; (iii) floor space restricted by tablecloths on the floor; and (iv) a bucket on the floor to collect dripping water, with such water leak occurring for a number of hours during the wedding reception. Accordingly, Section 61(1) is invoked.
I am satisfied the applicants have established that the effect of the water leak has resulted in the services provided by the respondent not being reasonably fit for purpose. Whether the delay in the schedule was approximately 1 hour (as the respondent asserts) or 2 hours (as the applicant asserts), there was, on any view of it, a significant delay. There is no factual dispute that there was a significant water leak into the venue that affected the floor of the venue and the positioning of tables.
Although the respondent was not responsible for the water leak, and took reasonable measures to try to alleviate the water leak by contacting the building manager expeditiously; moving tables; placing a bucket on the floor; replacing wet tablecloths; and putting tablecloths on the floor to mop up water, assessed objectively, the wedding reception was not fit for purpose due to the water leak into the venue. It is immaterial to the issue of breach of Section 61(1) of the ACL that the respondent did not cause the water leak.
In respect of Section 61(3) of the ACL, it is clear the applicants did rely upon the skill and judgement of the respondent in organising the wedding reception, in circumstances where the respondent's core business activity is to organise and provide wedding receptions.
Having established breach of Section 61(1) of the ACL, it is unnecessary for the Tribunal to make findings regarding breach of Section 61(2) of the ACL. However, I am satisfied that the applicants have established that they implicitly made known to the respondent that the "result" they sought from the services was a wedding reception that ran reasonably to schedule at a venue that did not have a water leak, and the "nature, quality, state or condition" of the services provided by the respondent did not reasonably achieve that result.
In circumstances where the applicants have proved breach of Section 61 of the ACL, they do not have to prove that the respondent failed to provide services with due care and skill under Section 60 of the ACL. No adverse findings are made against the respondent in respect of Section 60 of the ACL in any event, because the respondent acted reasonably to attempt to alleviate the effect of the water leak and minimize its effect on the wedding reception.
The "force majeure" clause in the terms and conditions of the respondent attached to its "wedding proposal" document to the applicants dated 30 September 2016 does not operate to exclude Section 61 of the ACL by reason of Section 64 of the ACL. In any event, I am not satisfied that a water leak is an "act of nature" such as a "flood" that falls within the contractual definition of force majeure in any event.

ASSESSMENT OF DAMAGES

Under Section 267(4) of the ACL, the Tribunal may award damages for failure to comply with a consumer guarantee in respect of the supply of services if it was reasonably foreseeable the consumer would suffer loss or damage as a result of the failure. However, by reason of Section 267 (1)(c)(i) of the ACL, if the breach of a consumer guarantee is a breach other than in respect of the failure to provide services with due care and skill under Section 60 of the ACL, a consumer cannot be awarded damages under that provision if the loss or damage occurred only by reason of acts, defaults, omissions or representations other than of the supplier or services, or their employee or agent,.
As discussed previously, I am not satisfied that there was any breach of Section 60 of the ACL by the respondent, and the water leak was not caused by the acts or omissions of the respondent (including its employees or agents). Accordingly, the Tribunal cannot award damages under Section 267 of the ACL.
However, Section 79N of the FTA states: 79N Orders in favour of claimant (cf CC Act 1998, s 8 (1)) In determining a consumer claim wholly or partly in favour of a claimant, the Tribunal may, subject to this Division, make any one or more of the following orders that it considers appropriate: (a) an order that requires a respondent to pay to the claimant a specified amount of money, (b) an order that requires a respondent to perform specified work in order to rectify a defect in goods or services to which the claim relates, (c) an order that requires a respondent to supply to the claimant specified services other than work, (d) in the case of a claim for relief from payment of money - an order declaring that a specified amount of money is not due or owing by the claimant to a respondent, (e) an order that requires a respondent to deliver to the claimant goods of a specified description, (f) an order that requires a respondent to return to the claimant specified goods which are in the possession or under the control of that respondent, whether the property in the goods has passed or not, (g) an order that requires a respondent to replace goods to which the claim relates, (h) an order that requires a respondent to refund all or part of the purchase price of specified goods that are in the possession (or under the control) of the claimant and the claimant to return all or part of those goods to the respondent (whether the property in the goods has passed or not).
By reason of Section 79N(a) of the FTA, the Tribunal can award damages for breach of a consumer guarantee implied into contract by reason of Section 61 of the ACL, separate and distinct from the remedial provisions of Section 267 of the ACL. The ACL does not operate to limit or restrict the remedies available to a consumer under the FTA, or the common law (Lam v Steve Jarvin Motors Ltd [2016] NSWCATAP 186 at [104]-[108]). Under Section 79U(1) of the FTA, the Tribunal must be satisfied that its orders will be "fair and equitable to all parties to the claim" and may, if they are material to the facts and circumstances of the case, take into account the factors set out in Section 79U(2) of the FTA.
Further, distinct from Section 267 of the ACL, the Tribunal also has power to award damages for breach of the ACL under Section 236(1) of the ACL.
In assessing damages in this matter it is important to distinguish the claim for damages due to "distress, anxiety, and disappointment" and the claim based upon diminution of the quality of the services provided due to the water leak. In respect of non-economic loss damages due to "distress, anxiety and disappointment", such damages fall within the meaning of "non-economic loss damages" and "personal injury damages" under Sections 3 and 11A of the Civil Liability Act 2002 ('the CLA'). In respect of the claim for non-economic loss damages of $6,557.00 due to "distress, anxiety and disappointment", the applicants must establish that they surpass the 15% of a most extreme case threshold under Section 16 of the CLA, and even if the threshold is surpassed, the applicants are subject to the sliding scale of calculation of non-economic loss damages under Section 16 of the CLA (Moore v Scenic Tours Pty Ltd (No 2) [2017] NSWSC 733 at [865]; Insight Vacations Pty Ltd v Young [2010] NSWCA 137; Flight Centre Pty Ltd v Louw [2011] NSWSC 132).
However, as the NSW Supreme Court held in Tralee Technology Holdings Pty Ltd v Yun Chen [2015] NSWSC 1259, damages can be awarded due to a reduction of the quality of services that had been provided and paid for, separate and distinct from the threshold to obtain non-economic loss damages for "distress, anxiety, and disappointment" has been surpassed under Section 16 of the CLA. The key issue is the cause of action and the nature of the breach. The breach, in the context of this matter, is the provision of a wedding reception that was not fit for purpose due to the reduction in the quality of services provided due to the water leak.
The applicants have failed to establish an entitlement to non-economic loss damages because the Tribunal is not satisfied they surpass the threshold under Section 16 of the CLA. However, the applicants have established that the quality of the service that were provided in respect of the wedding reception and for which they had paid for in advance, were reduced by reason of the water leak into the premises. In the circumstances of this matter, damages are awarded for the reduction in the quality of services that the applicants had paid for, rather than non-economic loss damages for "distress, anxiety and disappointment" for which the applicants have failed to establish they surpass the threshold under Section 16 of the CLA.
The Tribunal is satisfied that it is fair and equitable that the applicants be refunded 25% of the amount they paid for the wedding reception to the respondent by reason of the diminution of the quality of the services provided due to the water leak into the venue. Further, the Tribunal is satisfied, based on the invoice of Mint Photography dated 27 January 2017, that the photographer charged (and the applicants paid for) an extra hour of time in the sum of $300.00, and this was an extra cost caused by the respondent's breach of Section 61 of the ACL. The documentary evidence of the applicants does not establish any other additional expenses incurred.
Having viewed the financial records of both parties provided as evidence, the Tribunal is satisfied that the applicants paid the respondent $12,800.00 for the wedding reception. Accordingly, damages are assessed for breach of Section 61 of the ACL as $3,500.00.

CONCLUSION

In respect of breach of the consumer guarantee that services be fit for a particular purpose or result under Section 61 of the ACL, the applicants are awarded damages of $3,500.00.

Civil and Administrative Tribunal of New South Wales

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 January 2018

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Judgment (11 paragraphs)

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