Playpoint Pty Limited v Gerflor Australasia Pty Ltd

Jurisdiction

1. For the following reasons I am satisfied that the Tribunal has jurisdiction to hear and determine this application: 1. The applicant is a "consumer" pursuant to Section 79D of the Fair Trading Act 1987 (NSW) ("FTA") in that the applicant is a small proprietary company (within the meaning of the Corporations Act 2001 of the Commonwealth). This was not in contention (section 79H). 2. The claim involves the supply of services to the applicant for consideration pursuant to Section 79G 3. The claim is for an amount which is within the jurisdictional limit of $100,000: (section 79S(7) and clause 13A Fair Trading Regulation 2019 (NSW)); 4. The supply of services was within New South Wales (section 79K); and 5. The claim is registered within 3 years of the cause of action. (section 79L).
2. Section 28 of the FTA stipulates that the Australian Consumer Law applies to the Tribunal's jurisdiction.

Onus of proof

1. The applicant bears the onus for persuading the Tribunal on the balance of probabilities of the essential facts which are necessary to make out the relief sought.
2. When proof of a fact is required, the Tribunal must feel an actual persuasion of the occurrence or existence of that fact before it can be found.
3. Actual persuasion is achieved where the affirmative of an allegation is made out to the reasonable satisfaction of the Tribunal. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony or indirect inferences: Warner v Hung, in the matter of Bellpac Pty Limited (Receivers and Managers Appointed) (In Liquidation) (No 2) [2011] FCA 1123 at [48], per Emmett J.
4. The above explanation was cited with approval by Hallen J in Pollock v NSW Trustee & Guardian [2022] NSWSC 923 at [74]-[75], who continued thus: 'In Nguyen v Cosmopolitan Homes [2008] NSWCA 246, speaking with the concurrence of McColl and Bell JJA, McDougall J, similarly, had expressed the view, at [44]-[52], that proof on the balance of probabilities required a feeling of actual persuasion; that the event in question was more likely than not to have occurred; with "a probability in excess of 50%". His Honour repeated that view in Ballard v Multiplex [2012] NSWSC 426 at [126].'

Factual background

1. The following statement of the background to the proceedings either reflects factual matters which are not in dispute or documentary material received in evidence. Save to the extent that matters are said to be in dispute, the statement of the background to the proceedings represents my findings of fact.
2. On 5 July 2021 the respondent provided the applicant with a quotation for the supply and installation of Taraflex Evolution flooring for an amount of $94,000.00 plus GST. The quotation said relevantly: 'Allowance has been made for shot blasting of concrete subfloor in preparation for new sport floor installation. All Taraflex sport flooring to be installed on D300 double sided method …' (Exhibit R, Annexure 1)
3. The quotation included terms and conditions, relevantly: 'This price includes 1 year warranty on installation - issued by Choices St Leonards commercial installers … shot blast subfloor preparation, Polyvac light grind to make suitable for installation of sports flooring … Installation of Taraflex Evolution over D300 double side tape method finish … does not include any subfloor preparation other than specified within the quotation or terms and conditions. No allowance has been made for application of moisture barrier to subfloor, the subfloor must not exceed 75% relative humidity…'
4. Mr Malhorta accepted the quotation and its terms and conditions on behalf of the respondent by his signature on 5 July 2021.
5. The respondent provided the Warranty Agreement to the applicant on 6 July 2021. It says relevantly: 'Gerflor warrants that for a period of 10 years from the date of purchase this product shall be free from defects in materials and workmanship and shall be fit for its manufactured purpose. If the product is or becomes faulty during the Warranty Period, Gerflor will repair or replace the product (at its election) … provided you can satisfy Gerflor that … The defect is not due to inappropriate sub-floors or failure of sub-floors. To the extent enforceable at law, this warranty will entirely become null and void if subfloor conditions and method of installation do not conform exactly to Gerflor specifications. … This warranty … does not cover damage caused, in whole or in part, by conditions beyond our control, including, but not limited to … subfloor faults or failures … Dynamic structural building movement.' (Exhibit R, Annexure 1)
6. The respondent contracted Choices Flooring St Leonards ("Choices Flooring") to install the Taraflex on its behalf.
7. In mid-October 2021 Choices Flooring prepared the subfloor by grinding it to remove the epoxy coating.
8. In late October 2021 the installation was completed by Choices Flooring. The facility was handed back to the applicant.
9. Sometime in December 2021 the applicant notified either the respondent and/or Adrian Murphy of Choices Flooring that a hump or humps had appeared on the floor.
10. On 29 January 2022 Mr Malhotra emailed Mr Murphy and Mr Tofful: 'We seem to have a serious issue on the floors - there are several places on the courts where it appears to be uneven and I am getting a lot of complaints from players on this issue. I had raised this with Adrian before Christmas too but the flooring seems to be getting worse...' (Exhibit A, Annexure 6)
11. On 30 January 2022 Mr Murphy replied: 'That is the expansion joint in the structure. Thu (sic) building is moving and is designed to do so. Nothing can be done with this.'
12. Mr Malhotra replied a few minutes later: 'it is not the expansion joint rather it appears to be the cement that was put over the expansion joint that seems to have come loose - if it was the expansion joint movement there would be several cracks at other places and the exposed area that does not have the covering. In fact this came up a few days after the install that I have highlighted to you.'
13. On 18 March 2022 the floor was inspected by Mr Chate and Mr Murphy. The respondent provided details of the inspection to Gerflor technical support in France.
14. On 21 April 2022 Mr Tofful emailed Mr Malhotra: 'The issue you are referring to (rises in sub floor) have always been present and had been discussed during various stages of different quotations. To continue as if you were unaware of these rises is not accurate or fair following the installation. These and other points were discussed at various times during site inspections with Adrian & Michael and further highlighted when you were considering timber sprung floor options. This highlighted the need to rectify levels for such free floating system. And became outside of budget with combination of subfloor costs and timber sprung base. To address these rises would have additional costs of $15-20k for the added floor levelling on top of the grinding working that was signed off and completed. You should recall that you pushed us to keep project costs well under $100k and the quoted and completed work represents what was agreed. Mark has inspected the installation and there are no product performance or manufacturing issues, the issue relates to subfloor level. The quotation clearly states that work would address the removal of the epoxy coating and improve smoothness of the slab surface to allow for installation of the Taraflex.' (Exhibit A, Annexure 8)
15. On 27 April 2022 Mr Malhotra provided a detailed reply to Mr Tofful and Mr Chate. He referred to the inspection of the floor by the respondent when options for the floor were first discussed. He stated that subsequent to the quotation: 'it was recommended by Gerflor that it would be better to glue the Taraflex down to the concrete. At this stage PlayPoint had raised the concern around expansion joint movement, however Gerflor indicated … it was a very low risk. At no stage was there any recommendation or suggestion by Gerflor that there was a need to add floor levelling on top of the grinded floor and that it would cost an additional $15-20K. Also at no stage did Gerflor suggest that not following the floor leveling process would result in bumps on the floor and this was high risk if not done. As such this is the first time I am hearing about this … Gerflor has clearly indicated "This price includes shot blast subfloor preparation, Polyvac light grind to make suitable for installation of sports flooring" - as a customer this means that the floor will be installed satisfactorily. Gerflor are the experts, this is their product and Gerflor installed the flooring. PlayPoint has gone ahead every step of this project as was recommended by Gerflor.' (Exhibit A, Annexure 9)
16. On 6 May 2022 the respondent provided the applicant with a written assessment of its complaint, following the site inspection of 18 March 2022. It says relevantly: 'Upon review of images taken of the subfloor both prior to commencement of works and following the removal of the epoxy coating we find that the subfloor was within levels acceptable for the installation of the Tarafex sports flooring… All Taraflex sport flooring has been installed to manufacturers (sic) specification The Taraflex installation was completed in accordance to our written quotation and as signed by you All subfloor preparation was completed under your inspection and at no time was any concern raised prior to the installation or at the time of handover of any rises in the floor During inspection conducted on 18/3/2022 it was noted that the rises in the concrete subfloor had developed telegraphing through the Taraflex sports flooring From October 2021 until recently NSW has experienced unprecedented rain and high humidity that is causing many subfloors to expand and contract, resulting in issues that we haven't seen to this degree for many, many years Based on the above assessment Gerflor concludes the subfloor rises that have now developed are due to subfloor movement. This is the reasoning for the expansion joints in the concrete to allow for such movement that has occurred As the weather cools and humidity levels drop the subfloor may contract and the rise is flatter into levels as originally presented While Gerflor are sympathetic to the conditions the subfloor movement have now presented, Gerflor are in no way responsible or accountable.' (Exhibit A, Annexure 11) 36 On 31 May 2022 the applicant responded to the email, saying relevantly: '2. You have indicated "All subfloor preparation was completed under your inspection and at no time was any concern raised prior to the installation or at the time of handover of any rises in the floor" Incorrect! a. Prior to the installation we had specifically discussed the joint movements and its possibilities, and it was specifically indicated to us for this would be minimal and sideways, in all likelihood, but was not a Red Flag to be worried about. b. The humps started appearing within weeks after the install and this was raised immediately with Gerflor's installers. c. When you say that the subfloor was completed under your inspection are you implying that we were responsible - should this not be Gerlfor's responsibility as the experts in this project? …' (Exhibit A, Annexure 11)
17. The parties exchanged further correspondence in August and September 2022, reiterating their positions, as well as offers of settlement (Exhibit R, Annexure 6).
18. By February/ March 2023 when experts on behalf of both parties inspected the facility, there were significant deviations across the floor which were outside of the surface tolerances for a resilient floor covering in accordance with the relevant Australian Standard (see Exhibit A, Annexure 17, page 10 and Exhibit R, Annexure 7, pages 4-5).

What were the services?

1. In considering a claim for breach of consumer guarantees regarding the provision of services, the first issue is to identify the actual services to which the guarantees apply.
2. The definition of "services" in both section 60 and 61 of the ACL includes the benefits or facilities the consumer can reasonably expect the supplier will provide in return for the consumer's payment and are not limited to the terms of any contract between the supplier and the consumer: Scenic Tours Pty Ltd v Moore [2018] NSWCA 238 at [175]-[177].
3. I find that the quotation, terms and conditions offered by the respondent and accepted by Mr Malhotra form the contract between the parties. The offer and acceptance were subject to consideration, being the agreed amount of $94,000.00 plus GST. Most of this has been paid by the applicant. The parties clearly had an intention to form legally binding relations.
4. The contract defined the services relevantly as 'the supply and installation of Taraflex Evolution 7.5mm quality'; shotblasting of concrete subfloor; and installation on 'D30 double sided tape'.
5. For the following reasons I find that the 'services' for the purpose of section 60 and 61 also included the provision of advice and information about the suitability of the Taraflex floor at the applicant's particular facility: 1. On the respondent's own evidence, prior to providing the quotation, it did 'advise of potential movement at expansion/ construction joints' (Exhibit R, Executive Summary); 2. The issue of subfloor rises was discussed between the parties at 'various times' during site inspections, as stated in Mr Tofful's email of 21 April 2022; 3. The respondent knew that the applicant was considering flooring alternatives to Taraflex, including timber sprung flooring options, as stated in Mr Tofful's email of 21 April 2022; and 4. In all of these circumstances, advice and information about the suitability of the Taraflex product at the particular facility was a benefit the applicant could reasonably have expected the respondent to supply.

Did the respondent breach the guarantee of due care and skill?

1. Section 60 of the ACL provides: '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.'
2. The test to be applied is objective i.e. what standard and quality could reasonably be expected from a competent person in the particular profession. There will be a failure to comply with the guarantee if the work was carried out in a careless or unskilled manner (Corones' Australian Consumer Law, 5th ed, 2023, page 365)
3. The phrase "due care and skill" is equivalent to the common law duty to take reasonable care: Let's Go Adventures Pty Ltd v Barrett [2017] NSWCA 243 at [6] (Basten and Gleeson JJA). It is a guarantee that the services will be performed in a "careful, skilful, and workmanlike" manner: Panico v Mollier Enterprises Pty Limited t/a JC Diesel Tune [2021] NSWCATCD 56
4. The obligation pursuant to section 60 is also akin to the term implied by the common law in a contract for the supply of services that the supplier will exercise reasonable or due care in skill in the provision of those services: Voli v Inglewood Shire Council (1963) 110 CLR 74 at 85.
5. The scope of the duty of care at common law is objective and based on what is expected of the reasonable person or service provider. The care and skill required of a professional will be objectively assessed by the standards and procedures adopted in the relevant field: Rogers v Whitaker (1992) 175 CLR 479.

Evidence to establish lack of due care and skill

1. In its submissions regarding due care and skill, the applicant relies on a document 'Installation Instructions for Taraflex Sport Products', apparently issued by Gerflor (Exhibit A, Annexure 16).
2. The applicant has not established the relevance of this document. The footer notes that the document was 'Revised September 19, 2016'. I cannot be satisfied that these instructions, being 5 years old at the time of installation, represent the most up to date instructions at that time. Moreover, they refer to technical standards from the United States, not Australia.
3. Even if the 'Installation Instructions for Taraflex Sport Products' were current at the time of installation, the respondent's failure to comply with those instructions does not in itself, and in the absence of other evidence, particularly expert evidence, prove that the lack of compliance amounted to a breach of section 60 of the ACL.
4. The respondent provided a copy of AS 1884:2021 which I am satisfied is the relevant Australian Standard. It represents the standards and procedures adopted in the professional field of installation of resilient floor coverings, including the Taraflex floor over the concrete subfloor (Exhibit R, Annexure 2).
5. AS 1884:2021 is a complex technical document. Neither party's expert made any reference to the Standard. In the absence of expert evidence about the interpretation of AS 1884:2021 and its relevance to this particular installation, it is difficult for the Tribunal to make findings about the applicability of the standard to the facts of this case.
6. Moreover, even if the applicant does prove that the installation does not comply with AS 1884:2021, this does not in itself, and in the absence of other evidence, prove a breach of section 60 of the ACL (or breach of the contract, or of a tortious duty of care).
7. In this respect, I note in passing that the ACL operates differently to the Home Building Act 1989 (NSW) whereby a failure to comply with an Australian Standard will 'automatically' establish a breach of the relevant statutory warranty regarding residential building work (section 18B(1)(c)).
8. Although in a different legislative context, the Appeal Panel has acknowledged the relevance of the Australian Standards and considered what evidence is required to establish that work was not conducted with due care and skill: 'Evidence of work not being carried out in a proper and workmanlike manner would … involve identification of the work in question, a statement of how the expert would expect it to be carried out in in a proper and workmanlike manner and then identification of the factors which establish that the way in which the work has been carried out falls short of it being carried out in a proper and workmanlike manner.' (G MacFayden and Anor v G Tadrosse [2014] NSWCATCD 194 at [46], cited with approval in Deacon v National Strategic Constructions Pty Ltd; National Strategic Constructions Pty Ltd [2017] NSWCATAP 185).
9. In my view, the same principles are applicable in considering whether the evidence establishes a breach of due care and skill pursuant to section 60 of the ACL.
10. The Tribunal notes that AS 1884:2021 states at 4.2 (f): 'Floor coverings shall not be installed over structural expansion joints or construction joints.' (Exhibit R, Annexure 2, page 21)
11. This issue was not raised by either party.
12. It appears that the Taraflex installation may not have complied with this requirement of the Standard, but there is no expert evidence to that effect.
13. Moreover, the applicant has not provided expert evidence that any failure to comply with this particular requirement of AS 1884:2021 establishes that the installation was not carried out with due care and skill and thus a breach of the consumer guarantee under section 60 of the ACL is not established.

Filled expansion joints with a cement material

1. There was dispute at the hearing about whether the respondent filled the expansion joints, as claimed by the applicant.
2. Mr Tofful and Mr Chate explained in oral evidence that expansion joints penetrate the depth of the slab to allow expansion and contraction of the slab due to environmental factors, whereas saw cuts do not penetrate the depth of the slab and are used to control cracking.
3. The applicant did not provide persuasive evidence, including photographs or expert opinion, to prove the respondent filled the expansion joints.
4. Mr Tofful and Mr Chate gave oral evidence that filling was not put into the expansion joints, but into the saw cuts. This is supported by the written evidence of Mr Murphy who actually prepared the concrete slab (Exhibit R, Annexure 10).
5. I find that the respondent did not fill the expansion joints.
6. Even if the respondent did fill the expansion joints, the applicant has not provided expert opinion to establish that this was a lack of due care and skill in breach of section 60.
7. I dismiss this part of the applicant's claim.

Omitted to use level measuring equipment to test whether the levels of the floor were within acceptable levels prior to installation

1. The applicant contends: 'Gerflor did not use any level measuring equipment to test the levels and have this formally documented, with a copy to PlayPoint, prior to commencing the installation, as evidence the floors were within acceptable levels; they merely relied on a visual inspection.' (Exhibit A, page 4)
2. AS 1884:2021 states relevantly: 'The surface of a concrete subfloor shall be thoroughly checked for the following …where … a straightedge 2 000 mm long is placed at rest at any two points over a 2 000 mm distance, no part of the surface shall be more than 4 mm below the straightedge.' (Exhibit R, Annexure 2, page 11).
3. There is no requirement in AS 1884:2021 that the surface measurements must be formally documented.
4. Mr Tofful and Mr Chate gave oral evidence that the subfloor was within the above tolerance at the time of installation, although, they confirmed, there are no documentary records to confirm that.
5. Their evidence is supported by Mr Murphy: 'Subfloor was presented flat and within AS 1884/2021 standards +/- 4mm over 2mt straightedge … Assessment of levels was carried out while grinding and when applying fill to saw cut joints and during installation.' (Exhibit R, Annexure 10)
6. Mr Murphy does not state explicitly whether 'level measuring equipment' was used to assess the levels, although his conclusion that the level of the floor was '+/- 4mm over 2mt straightedge' means that a straightedge was most likely used in the calculations. I am satisfied that a straightedge is a type of 'level measuring equipment.'
7. The applicant did not provide a clear evidentiary basis for its submission that the respondent did not use 'level measuring equipment'.
8. It follows from the above that the applicant has failed to prove that the respondent did not use level measuring equipment to test whether the levels of the floor were within acceptable levels prior to installation and therefore has not proved that the respondent failed to provide the services with due care and skill.
9. Moreover, regardless of whether the respondent used level measuring equipment, the relevant issue is whether the floor was tolerably level at the time the Taraflex was installed. The only evidence before the Tribunal is that it was.

Omitted to conduct pH and moisture testing prior to installation, contrary to the respondent's own guidelines

1. In the case of concrete subfloors such as the applicant's, AS 1884:2021 requires that the dryness of the concrete be determined prior to preparation and floor covering (Exhibit R, Annexure 2, page 11): 'The objective of the test is to determine whether the subfloor moisture content is suitable for the installation of resilient floor coverings.' (Exhibit R, Annexure 2, page 38)
2. Appendix A and Appendix B of AS 1884:2021 set out the required test methods.
3. On the respondent's own evidence, it did not test the subfloor for the presence of moisture (Exhibit A, Annexure 10).
4. AS 1884:2021 also states: 'Before subfloor preparation is performed and a floor covering is laid on a concrete subfloor the concrete surface pH shall be determined as described in Appendix C.' (Exhibit R, Annexure 2, page 11)
5. In oral evidence Mr Chate said that the respondent did not perform pH testing because it was not required.
6. While it appears that the respondent failed to comply with AS 1884:2021 regarding pH and moisture testing, there is no expert evidence to confirm this.
7. Moreover, the applicant has not provided expert evidence that the omission of pH and moisture testing establishes that the installation was not carried out with due care and skill and thus a breach of the consumer guarantee under section 60 of the ACL.
8. I dismiss this part of the applicant's claim.

Omitted to unroll and lay out the Taraflex along the length of the facility for 24 hours, prior to gluing it, contrary to the respondent's own guidelines

1. AS 1884:2021 requires that flooring should be stored and allowed to condition within or near the installation area for at least 24 hours (Exhibit R, Annexure 2, page 20).
2. There is no evidence that this did not occur.
3. The applicant contends that the flooring should have been unrolled and laid out along the length of the facility for at least 24 hours, and that the respondent failed to do so.
4. AS 1884:2021 does not specify that the flooring should be laid out as part of the conditioning process and, for the reasons I have outlined above, I have not put weight on the installation guidelines relied on by the applicant.
5. Therefore I dismiss this part of the applicant's claim.

Directly glued the Taraflex to the concrete slab, rather than using double sided tape

1. It is not disputed that the quotation accepted by the applicant allowed for the installation of the Taraflex using double sided tape.
2. Subsequently, the agreement to the parties was varied when the applicant accepted the respondent's advice to glue the Taraflex directly to the subfloor.
3. AS 1884:2021 does not mandate any particular installation method.
4. The applicant has not provided evidence that gluing directly to the subfloor was a breach of the consumer guarantee under s 60 of the ACL.
5. I dismiss this part of the applicant's claim.

Failure to advise the respondent that floor levelling should be applied in preparing the concrete slab and, if it was not, there was a 'high risk' that 'bumps' would appear on the floor

1. According to Mr Malhotra's email of 27 April 2022, the first time the respondent informed him that 'not following the floor levelling process would result in bumps on the floor and this was high risk if not done' was in the email from Mr Tofful dated 21 April 2022, after installation (Exhibit A, Annexure 9).
2. However, Mr Tofful's email does not say that.
3. Mr Tofful's email refers to 'the need to rectify levels' and 'floor levelling' for the installation of a free floating timber sprung floor which was one option considered, but discounted, by the applicant during pre-contract discussions.
4. Nowhere does Mr Tofful's email state, or even imply that 'not following the floor levelling process would result in bumps on the floor and this was high risk if not done'.
5. On any plain reading of Mr Tofful's email, the floor levelling was unrelated to the risk of 'humps' forming along the expansion joints.
6. Assessed objectively, the respondent has misread and misinterpreted Mr Tofful's email.
7. Further, for the following reasons I am not satisfied that: 1. The application of 'floor levelling' (which was not defined by the applicant) was reasonably required as part of the sub floor preparation; and 2. The respondent's omission to advise the applicant to apply 'floor levelling' was a failure of the guarantee of due care and skill.
8. The applicant has not provided expert opinion which supports either proposition.
9. The applicant did submit a report by Dr John Cunniffe, based on his inspection of the facility on 7 March 2023. I am satisfied that Dr Cunniffe is a suitably qualified and experienced building expert. He has acknowledged the Tribunal's Experts' Code of Conduct.
10. Dr Cunniffe states: 'As a specialty sports flooring provider, I am of the opinion that [the respondent's] sales qualification process would include a proper assessment of the substrate on which they would be preparing for the installation, and that if there were any concerns, they would have been raised with the Applicant. I am of the view that had the Applicant been made aware of the leveling issue he would reasonably have elected to install traditional timber flooring.' (Exhibit A, Annexure 17, page 3)
11. I do not put weight on this opinion because Dr Cunniffe does not explain its factual basis: 1. He does not define what would constitute a 'proper' assessment of the substrate. Nor does he identify his understanding of whether the respondent conducted any assessment of the substrate and, if so, how it fell short of a 'proper' assessment; and 2. He does not explain what he means by reference to 'the leveling issue'. Is it a reference to the respondent's alleged failure to advise the applicant to add some type of unspecified topping on the slab? Is it a reference to the development of the humps?
12. I dismiss this part of the applicant's claim.

Failure to exercise 'Duty of Care' by not informing the applicant that the Taraflex flooring may not be 'fit for purpose' at the applicant's facility

1. The applicant does not clearly identify in what way the Taraflex flooring may not have been 'fit for purpose'.
2. The applicant's contention appears to be that because humps did appear which, according to the applicant, cannot be repaired, Taraflex was not fit for purpose at the facility (Exhibit A, page 3, 5).
3. The applicant relies on Dr Cunniffe's report which states relevantly: 'I am of the opinion that Respondent had a duty of care to advise the Applicant of any obvious deficiencies with their system prior to laying the flooring. It is unreasonable for the applicant to know what the subfloor preparations are required for the Taraflex flooring system. Had the Applicant been informed of the issue, he may have opted for a traditional timber flooring system.' (Exhibit A, Annexure 17, page 3).
4. For the following reasons I do not put weight on Dr Cunniffe's opinion: 1. His report does not identify the 'obvious deficiencies' in the Taraflex flooring system to which he refers; 2. His report does not identify the required subfloor preparations to which he refers; and 3. He does not identify 'the issue' which was, according to his opinion, critical to the applicant's decision about the type of floor to install.
5. For the following reasons, and based largely on the applicant's own evidence, I find that the respondent did warn the applicant there was a risk of sub floor movement: 1. In his email of 27 April 2022, Mr Malhotra said that when the respondent recommended gluing the Taraflex to the concrete: 'At this stage PlayPoint had raised the concern around expansion joint movement, however Gerflor indicated … it was a very low risk.' 1. In his email of 31 May 2022, Mr Malhotra said: 'Prior to the installation we had specifically discussed the joint movements and its possibilities, and it was specifically indicated to us for this would be minimal and sideways, in all likelihood, but was not a Red Flag to be worried about.' 1. This is consistent with the respondent's oral and written evidence that, prior to installation, it did 'advise of potential movement at expansion/ construction joints' (Exhibit R, Executive Summary).
6. The warranty put the applicant on notice that such movement risked damage to the finished product. The warranty specifically excluded damage caused by 'subfloor faults or failures' and 'dynamic structural building movement'.
7. If the applicant contends that this information and advice fell short of a reasonable warning, it bears the onus of proving so to the reasonable satisfaction of the Tribunal. It has not discharged that onus.
8. I do not accept the applicant's submission that the risk of bumps was 'a high risk'. The applicant makes this submission with the benefit of hindsight.
9. The respondent's duty was to provide advice about risks based on reasonable foresight. The applicant has not provided evidence that the foreseeable risk of slab movement was anything different to the respondent's assessment of 'very low' or 'minimal'.
10. If anything, the fact that the concrete slab was between 30 and 40 years of age at the time of the Taraflex installation lends weight to the respondent's risk assessment because slab movement is more likely to occur at an early age (Exhibit R, Annexure 7, page 2).
11. The applicant's claim appears to be based on no more than the fact that a risk of which it was advised, and which it accepted, actually materialised.
12. I am not satisfied that the respondent failed to act with due care and skill by advising the applicant that the risk of sub floor movement was 'minimal' and 'very low' and that the scope of the respondent's duty extended to giving more detailed advice prior to the applicant's decision to acquire the services.
13. The applicant has failed to prove the respondent did not act with due care and skill in respect of the advice and information provided prior to the applicant's decision to acquire the services.

Did the respondent breach the guarantees as to fitness for a particular purpose?

1. It is not disputed that the particular purpose of the installation of the Taraflex was to provide a surface suitable for the playing of badminton.
2. Section 61 of the ACL provides: '(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. In Moore v Scenic Tours Pty Ltd (No 2) [2017] NSWSC 733, Garling J stated in relation to section 61: '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.'
4. The applicant contends that the Taraflex floor is not fit for purpose because it creates a risk of injury to badminton players: 'The current "humps" on the floor have become a "safety issue for players" and exposes Playpoint to Public Liability Claims in the event of an incident.' (Exhibit A, page 5)
5. The applicant relies on Dr Cunniffe's report which states: 'I am of the opinion that deviations in levels may cause players to not anticipate their grip on the floor which may cause led (sic) to injury. I am of the view that this may make the flooring not fit for purpose … given that badminton is a quick reaction sport, I am of the opinion that the surface would need to allow a firm grip on footwear and the need for a flay and predictable surface would seem critical.' (page 10)
6. I am not persuaded by Dr Cunniffe's opinion that assessed objectively, the Taraflex playing surface is not reasonably fit for the purpose of playing badminton.
7. There is no evidence before the Tribunal of any accidents or injuries to badminton players caused by the deviations during the approximately 18 months of operation since installation.
8. There is no evidence before the Tribunal, independent of Mr Malhotra's assertion, of specific complaints or safety concerns raised by badminton players.
9. Moreover, in circumstances where the applicant was advised of the risk that the subfloor might move and damage the product and accepted that risk, I cannot be satisfied that the respondent has breached the guarantee in section 61.
10. The risk may have materialised after many years, or after only a few. It may never have materialised. The fact that it did materialise after a few weeks or months does not render the supply of the Taraflex flooring, and the flooring itself, not fit for purpose.
11. The applicant contends that the services and the resulting floor are not fit for purpose because repairing the humps is 'not an option as there was a high likelihood of this reappearing within 6 months.' (Exhibit A, page 5)
12. There was no clear evidence (beyond the applicant's subjective opinion) that the humps are incapable of repair. The applicant did not provide expert evidence to that effect. The Structerre report provides recommendations to reduce movement in the slab and level the floor once the movement has stabilised (Exhibit E, Annexure 7, page 5).
13. The applicant contends that at the first hearing before the Tribunal on 2 March 2023, the respondent indicated that: 'The expansion joints in sports stadium (sic) are at the wall edges, Playpoint has set up this facility in a commercial warehouse where the expansion joints are across the floor.' (Exhibit A, page 5)
14. The applicant did not provide a transcript of those proceedings to confirm whether that was said, nor was this put to the respondent for its response at the final hearing.
15. There was no expert evidence before the Tribunal to support the applicant's contention that the presence of expansion joints across the floor of the facility rendered the services not fit for purpose (Exhibit A, page 5).
16. Finally, there is no expert evidence that any breach of AS 1884:2021 rendered the services and the resulting product not reasonably fit for purpose.
17. The applicant has failed to prove that the respondent breached the guarantee pursuant to section 61, and similarly has failed to prove breach of an implied contractual or common law warranty that the services be fit for purpose.

Did the respondent engage in misleading or deceptive conduct?

1. Section 18(1) of the ACL states: 'A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.'
2. Although not explicitly pleaded by the applicant, for the sake of completion I have considered whether the respondent's conduct was in any way misleading or deceptive.
3. The test for determining whether conduct is misleading is objective, and a question of fact. The question is not whether an individual has been misled, but whether the conduct was misleading or deceptive in the sense of likely to lead a reasonable person into error having regard to all the circumstances? (Corones' Australian Consumer Law, 5th ed, 2023, page 73)
4. Taking into account the findings of fact I have outlined above, there is no basis for a finding that the respondent breached section 18(1).
5. Far from being misled about the risk that subfloor movement could impact the playing surface after installation, a reasonable person in all the circumstances would have been sufficiently aware of such a risk because it was explicitly disclosed by the respondent.
6. While silence can in some circumstances be misleading or deceptive, the applicant has not proved that the respondent failed to disclose relevant information (Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd [2010] HCA 31; Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31).

What caused the applicant's alleged loss?

1. If I am wrong, and the respondent did breach one or more of the consumer guarantees in the ACL, the applicant's claim fails on the basis of causation.
2. Proving a breach of a consumer guarantee provision of the ACL (or breach of contract or duty of care) is not sufficient: the applicant must also prove that there is a causal link between the breach and any loss suffered: see, e.g. Irving v D'Michelle t/as Westside Customs and Mechanical [2015] NSWCATCD 152; Damanios v Stateroads Pty Ltd [2015] NSWCATCD 108.
3. The applicant submits that its claimed financial loss is caused by the 'humps' which render the surface of the badminton courts not suitable for play.
4. Leaving aside the question of whether the applicant can prove loss, a threshold issue is therefore the cause of the humps.
5. Causation is to be determined by looking at all the facts and circumstances to determine, as a matter of common sense, whether the breach was a cause of the loss, unless there is an intervening act or event that is the sole cause of the damage: Alexander v Cambridge Credit Pty Ltd (1987) 9 NSWLR 310 at 361; Chand v Commonwealth Bank of Australia [2015] NSWCA 181; Wardley Australia Ltd v Western Australia [1992] HCA 55.
6. For the following reasons, I am not persuaded that any of the respondent's alleged - or proved - breaches were a cause of the humps. In particular, there is no evidence that directly gluing the Taraflex to the floor is a cause of the humps; nor that moisture or pH levels in the subfloor are a cause of the humps.
7. Based on an inspection of the facility on 18 March 2022, the respondent submits that the humps are caused by movement to the concrete subfloor associated with 'unprecedented rain and high humidity' after October 2021 (Exhibit R, Annexure 11).
8. The applicant challenges this conclusion: 'this inspection should have been done by an Independent Authority so that an unbiased conclusion could be drawn.' (Exhibit A, page 8)
9. Subsequently the respondent obtained a report by from Structerre, consulting engineers. It is authored by Nahshon Beckett and authorised by Gervase Purich: the 'Structerre Report' (Exhibit R, Annexure 7).
10. Mr Beckett's qualifications are not stated, but he is identified as 'NSW I&I Section Manager'. Mr Purich is a Chartered Professional Engineer (civil and structural).
11. Neither Mr Beckett nor Mr Purich acknowledge the Tribunal's Experts' Code of Conduct. The report appears to have been prepared for the benefit of the respondent, and not in anticipation of legal proceedings (see page 6).
12. Nevertheless, I put weight on the report because it was prepared by a consultancy team with appropriate expertise and standing. It is also based on an inspection of the facility and an adjoining unit to compare any slab movement.
13. Both the respondent's facility and the next-door unit are of the same construction (page 1).
14. The Structerre Report states: 1. The maximum deviation at 600mm either side of the control joints in the applicant's facility was approximately 11mm; 2. The maximum deviation calculated over a 3m length of the control joints in the applicant's facility was approximately 17.5mm; 3. Due to these deviations, the slab does not satisfy the surface tolerances for resilient floor coverings in the relevant Australian Standard (although the slab is performing satisfactorily for its intended use as a conventional industrial pavement slab); 4. Similar levels of movement were detected at the control joints of the adjoining unit; 5. The movement of the slab at the control joints is 'upward curling': 'This occurs most commonly where drying shrinkage takes place at an unrestrained end. Concrete slabs can curl due to moisture or temperature gradients between the top surface and the bottom surface of the slab.' (page 3) 1. A 'potential cause' of the movement at the control joints is 'volumetric variations of the underlying clay foundation' which occurs when clay shrinks due to reduction in moisture, and swells when it becomes moist; 2. The higher than average rainfall and humidity at the time the floor was installed could have increased moisture in the clay foundation; 3. The control joints are designed to allow the slab to be flexible and move with different stresses.
15. The report also recommends, inter alia, that any roof leaks be repaired to limit the moisture infiltrating the clay. In this regard the respondent relies on unidentified social media reviews referring to roof leaks (Exhibit R, Annexure 8).
16. However, I have not put weight on this evidence because I cannot be confident that the reviews refer to the applicant's facility and, even if they do, there is no evidence of the extent of the leaks, nor their impact, if any, on the clay foundation.
17. Dr Cunniffe's report confirms the presence of significant deviations to the floor. However, he provides no opinion about their cause.
18. If anything, Dr Cunniffe's report would appear to discount moisture in the slab as a likely cause of the humps (Exhibit A, Annexure 17, page 9, 8.3).
19. The applicant has not provided other expert evidence about the cause of the humps, including whether a cause is one or more of the alleged breaches by the respondent.
20. As the Appeal Panel has observed in Strogylos t/as Auto Clinic St Andrews v Vella [2020] NSWCATAP 156 at [48]: 'It is not necessary in every case that a successful party must provide expert evidence by way of an independent expert who has adopted the NCAT Expert Witness Code of Conduct to prove its cause of action: Khan v Kang [2014] NSWCATAP 48 at [47]-[53]. Ultimately, it is a matter of considering all of the relevant lay and expert evidence; making factual findings; and applying the correct legal test to determine whether a party succeeds or fails in its case.'
21. The applicant bears the onus of proving the facts essential to its claim. On the evidence before the Tribunal I cannot be satisfied that a cause of the humps, and therefore a cause of the applicant's loss, was any of the respondent's alleged breaches.
22. For the following reasons I find that the most likely cause of the humps is movement to the clay foundation of the facility due to excessive rain and humidity: 1. Structerre's opinion to this effect is uncontested by any expert; 2. Similar deviations exist at the control joints of the adjoining unit; 3. The fact that the humps have worsened over time is consistent with movement of the foundation.
23. Further, I am not satisfied that the humps were present at the time the floor was installed, as the applicant contends. I am not persuaded that the photographs on which the applicant relies (Exhibit A, Annexure 5) depict humps as opposed to a temporary mark along the joints while the Taraflex was drying and 'settling' after installation, as Mr Chate said in oral evidence.
24. The applicant has also failed to establish a causal connection between the respondent's alleged failure to advise him about the 'levelling issue' and his loss.
25. The applicant (and Dr Cunniffe) claims that had it been aware of the 'leveling issue', it would reasonably have elected to install a traditional timber floor instead of the Taraflex.
26. However, there is no evidence, expert or otherwise, that a timber floor laid on top of the concrete (even with the addition of some undefined leveling topping) would have avoided the development of humps when the substrate moved.
27. Similarly, there is no expert evidence that if the floor had been 'levelled' in some way, the substrate movement would somehow have been accommodated and humps would not have developed in the Taraflex.

Conclusion

1. I am not persuaded on the balance of probabilities that the respondent breached the consumer guarantees pursuant to sections 60 and 61 of the ACL, or engaged in misleading or deceptive conduct.
2. The applicant did not identify or establish a contractual breach separate and distinct from the ACL causes of action.
3. The applicant did not identify or establish a cause of action in tort separate and distinct from the ACL causes of action.
4. The clear evidence is that the cause of the humps, and therefore the cause of the applicant's claimed loss, is not any alleged breach by the respondent, but subfloor movement, a risk which was disclosed by the respondent, but which was otherwise beyond the respondent's control.
5. Having failed to prove on the balance of probabilities any cause of action, the application is 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: 29 September 2023