RL Company Holdings PL t/as Swimart North Strathfield v The Owners – Strata Plan No 88564

Background, primary decision, issue in summary, jurisdiction

1. In primary proceedings filed 20 June 2025 the appellant supplier (then the respondent) on 8 July 2025 was ordered to give a full refund of $11,331.81 on the supply and installation of a pool heater including flue kit at the respondent owners corporation (OC)'s strata scheme, by reason of a found major defect. Oral reasons were given. A refund was not sought for supply and installation of a spa heater, which was functioning.
2. The hearing proceeded in the absence of the then-respondent supplier on the initial return date before the Tribunal, in a group list. The OC said that proper notice under the rules had been given of the hearing to the supplier's registered office and that it was entitled to proceed in the supplier's absence. The primary member agreed.
3. After considering the documents from the OC and hearing from its representative, who submitted that the relevant faults were the responsibility of the supplier even if there was also a liability of the manufacturer, the primary member ordered the refund.
4. The OC's documents contained communications between the parties and with the manufacturer of the pool heater, setting out competing contentions on responsibility for the situation and supporting material for those contentions. The OC representative was not sworn or affirmed to give oral evidence.
5. The supplier received the primary decision on 10 July 2025 and filed the notice of appeal, within time, the following day. The supplier said that it was not informed to attend and that consequently the primary member heard only the OC's side of the story. It had forgotten to change with ASIC the registered office when it changed accountants. This was its first time in NCAT proceedings. It had not appreciated that it could apply to set aside the primary decision as an alternative to filing an appeal. It had technician job notes and emails which showed that the problem with the pool was caused by matters outside its scope of work and that it had informed the OC in that respect.
6. In summary, the supplier said that the found major defect was caused by failure of an existing ventilation fan in the pool equipment room, which it was not the supplier's responsibility to maintain, that the heater had been working properly until the fan failed and that the supplier did not put in a condensate trap because there was sufficient ventilation in the pool equipment room when the fan was working, it assumed that the fan was working and would be replaced by whoever was responsible for servicing it when it failed, and there was no custom condensate trap supplied by the manufacturer for this model heater. It had attended to attempt to remediate as a gesture of goodwill - it had a commercial relationship with the strata manager in respect of several strata schemes including the present scheme. The substance of the contentions on scope of work and responsibility were in the documents before the primary member. The OC was responsible for maintaining correct pool chemistry.
7. The supplier had, with the assistance of an AI transcription, prepared a transcript of the primary hearing which the OC representative agreed was substantially correct. The transcript contained the primary member's oral reasons, the form of which is referred to later.
8. A stay of the money order was refused on 25 July 2025 and at the appeal hearing we were informed that the money had been paid.
9. After extensive question and answer interacting with both parties, it emerged that the primary issue was that the primary member did not hear fully about a work order to replace the fan which by then was not operating. The work order was issued by the OC in August or September 2023 which post-dated the supply and installation of the pool equipment by the end of May 2023. At best there was a passing reference to the fan in the OC's oral contentions. There were other issues concerning the water chemistry.
10. The Australian Consumer Law is Sch 2 to the Competition and Consumer Act 2010 (Cth) and is made part of NSW law by s 28 of the Fair Trading Act 1987 (NSW) (FTA) under the title Australian Consumer Law NSW (ACL NSW). There was no issue before either the primary member or us that the Tribunal has jurisdiction under FTA Pt 6A to deal with the matter as a "consumer claim". The appellant supplied goods and/or services to the OC as a consumer in NSW: FTA s 79D "consumer" para (a), "supplier"; ss 79E-79K(1)(a).
11. The claim was clearly made within three years after it "first accrued": s 79L(1). The Tribunal jurisdiction under FTA s 79L(1) is a distinct issue from the relevant ACL NSW limitation period, including because of the test of first accrual in s 79L(1). If the ACL claim is outside the Tribunal jurisdiction as a consumer claim, the ACL claim would need to be pursued in a court. As said below, the claim was within time under the ACL NSW.
12. The amount claimed was under the current Tribunal jurisdictional limit of $100,000 and under the prior limit of $40,000: s 79S. The Tribunal can make a money order under s 79N(a) with s 79Q(1).
13. FTA s 32 applies the ACL NSW to persons carrying on business within NSW, entities incorporated or registered under NSW law and persons ordinarily resident in or otherwise connected with NSW and for such applications extends to conduct and other acts, matters and things occurring or existing outside or partly outside NSW (whether within or outside Australia). The ACL NSW clearly applies to the appellant who provided the relevant goods and/or services to the OC in NSW.

1. Section 80(2) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) states, in respect of Division decisions:

"Any internal appeal may be made:

(a) in the case of an interlocutory decision of the Tribunal at first instance - with the leave of the Appeal Panel, and

(b) in the case of any other kind of decision (including an ancillary decision) of the Tribunal at first instance - as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds."

1. Clause 12 of Schedule 4 to the NCAT Act states:

An Appeal Panel may grant leave under section 80 (2) (b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because:

(a) the decision of the Tribunal under appeal was not fair and equitable, or

(b) the decision of the Tribunal under appeal was against the weight of evidence, or

(c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).

1. A Division decision is a primary decision of the Consumer and Commercial Division. The primary decision here is such a decision.
2. In summary, internal appeals may be made as of right on a question of law, and otherwise with leave (that is, the permission) of the Appeal Panel.
3. The meaning of a "question of law" was discussed in detail by the Appeal Panel in Unique Commercial Group Pty Ltd v Cusumano [2024] NSWCATAP 204 at [25]- [40]. A pure question of law does not depend on the facts found and the question of law must be, self-evidently, a question of law and not depend on the answer. A question of law is distinct from a mixed question of fact and law, for which leave to appeal is required. Examples of questions of law include the matters set out in Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [13] and Cusumano at [32]. However, the categories of question of law are not closed. As was stated at Cusumano at [37]-[39]:

"What constitutes a question of law is vexed and context dependent in the sense that the distinction between matters of fact and of law may turn on the circumstances in which the question arises: Targeted Property Investments Pty Ltd v Look Up Technologies Pty Ltd (No 2) [2023] NSWSC 416 at [33(4)], citing Thomas and Naaz [2023] NSWCA 40 at [52] and Da Costa v The Queen [1968] HCA 51; (1968) 118 CLR 186 at 194; [1968] HCA 51.

For instance, a ground of appeal that raises the question whether there were adequate reasons may constitute an attack on the merits which would not raise a pure question of law. On the other hand, it may be a contention that the decision is unreasonable in the requisite sense or that the Tribunal failed to exercise the jurisdiction, which would likely raise a question of law: see the exposition of this issue in Wollondilly at [28]-[32]. Care must in any event be taken. As has been clarified by amendment to the NCAT Act since Prendergast was decided, the Tribunal is not required to give reasons for all decisions it makes: NCAT Act, s 62(2A; see too: New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231 at [53]- [54], [109]-[114].

Therefore, discernment and care must be taken to ensure the grounds relied upon by the appellant, properly understood, raise questions of law and arise in the proceedings; or whether leave is required."

1. A failure to take into account a "clearly articulated and substantial argument" is a constructive failure to exercise jurisdiction as well as an error of law and so constitutes a question of law: Alexandria Landfill PL v Transport for NSW [2020] NSWCA 165 at [8]- [11]; Prakash v Health Care Complaints Commission [2006] NSWCA 153 at [87]- [89]; Health Care Complaints Commission v Robinson [2022] NSWCA 164 at [91].
2. Taking into account an irrelevant consideration or not taking into account a relevant consideration includes not making a finding on an ingredient or central issue required to make out a claimed entitlement to relief: see CEO of Customs v AMI Toyota Ltd [2000] FCA 1343; (2000) 102 FCR 578 (Full Fed Ct), [2000] FCA 1343 at [45], applying the statement of principle in Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163 at 179.
3. A question of mixed fact and law, such as an alleged error in applying legal principle to the facts, is not a question of law unless the relevant facts are jurisdictional in nature or do not require the appellate tribunal to resolve disputed facts relevant to the matter in dispute, or the question of law does not depend on facts not found: FTB v Children's Guardian [2024] NSWCATAP 174 at [8]; Wilson v Chan & Naylor Parramatta Pty Ltd atf Chan & Naylor Paramatta Trust [2020] NSWCA 62 at [4] and [11]; Orr v Cobar Management PL [2020] NSWCCA 202 at [48], [109]; Commissioner of Police, NSW Police Force v White [2025] NSWCATAP 30 at [21]- [23]; Damico v Secretary, Department of Customer Service [2025] NSWCATAP 109 at [43]. However, as noted by Basten AJ in Donohoe v Albulario [2025] NSWSC 9 at [33], this general requirement for purity does not stand in the way of an Appeal Panel making necessary findings of fact about the composition of the primary tribunal or conduct of the primary hearing when the question of law concerns a denial of procedural fairness.
4. Adequacy of reasons will vary according to the nature of the determination and of the determining body: New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231 esp at [77]. In relation to adequacy of reasons, it is essential to expose the reasons for resolving a point critical to the contest between the parties: Soulemezis v Dudley (Holdings) PL (1987) 10 NSWLR 247 (CA) at 259, 270-272, 280-281; Minister for Immigration and Multicultural and Indigenous Affairs; ex parte Palme (2003) 216 CLR 212 at [40]; Wainohu v NSW (2011) 243 CLR 181 at [58]; NCAT Act s 62(3).
5. The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited by para 12(1) of Sch 4 to the NCAT Act. In such cases, as already set out, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that:

(a) the decision of the Tribunal under appeal was not fair and equitable; or

(b) the decision of the Tribunal under appeal was against the weight of evidence; or

(c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).

1. In Collins v Urban [2014] NSWCATAP 17, the Appeal Panel stated at [76] and [79] that a substantial miscarriage of justice for the purposes of cl 12(1) in Sch 4 to the NCAT Act may have been suffered where:

"[76] ...there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance. ...

[79] In order to show that a party has been deprived of a "significant possibility" or a "chance which was fairly open" of achieving a different and more favourable result because of one of the circumstances referred to in cl 12(1)(a), (b) or (c), it will be generally be necessary for the party to explain what its case would have been and show that it was fairly arguable. If the party fails to do this then, even if there has been a denial of procedural fairness, the Appeal Panel may conclude that it is not satisfied that any substantial miscarriage of justice may have occurred - see the general discussion in Kyriakou v Long [2013] NSWSC 1890 at [32] and following concerning the corresponding provisions of the [statutory predecessor to CATA (s 68 of the Consumer Trader and Tenancy Tribunal Act)] and especially at [46] and [55]."

1. Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Sch 4 to the NCAT Act, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b): Pholi v Wearne [2014] NSWCATAP 78 at [32]. In Collins v Urban, the Appeal Panel stated at [84] that ordinarily it is appropriate to grant leave to appeal only in matters that involve:

"(a) issues of principle;

(b) questions of public importance or matters of administration or policy which might have general application; or

(c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand;

(d) a factual error that was unreasonably arrived at and clearly mistaken; or

(e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed."

1. Turning to the specific grounds in cl 12(1)(a) and (b) of Sch 4 to the NCAT Act, in Collins the Appeal Panel said:

"[77] As to the particular grounds in cl 12(1)(a) and (b), without seeking to be exhaustive in any way, the authorities establish that:

1 If there has been a denial of procedural fairness the decision under appeal can be said to have been "not fair and equitable" - Hutchings v CTTT [2008] NSWSC 717 at [35], Atkinson v Crowley [2011] NSWCA 194 at [12].

2 The decision under appeal can be said to be "against the weight of evidence" (which is an expression also used to describe a ground upon which a jury verdict can be set aside) where the evidence in its totality preponderates so strongly against the conclusion found by the tribunal at first instance that it can be said that the conclusion was not one that a reasonable tribunal member could reach - Calin v The Greater Union Organisation Pty Ltd [1991] HCA 23; (1991) 173 CLR 33 at 41-42, Mainteck Services Pty Limited v Stein Heurtey SA [2013] NSWSC 266 at [153]."

1. The question of what constitutes significant new evidence not reasonably available at the time the proceedings under appeal were being dealt with under the ground in cl 12(1)(c) to the NCAT Act was considered by an Appeal Panel in Owen v Kim [2017] NSWCATAP 26. In that appeal the Appeal Panel stated at [37]-[39]:

"37 In Owners - SP 76269 v Draybi Bros Pty Ltd [2014] NSWCATAP 29 the Appeal Panel stated at [109] in connection with cl 12(1)(c) of Schedule 4 to the Civil and Administrative Tribunal Act:

'In order to fall within this paragraph the appellant must be able to point to evidence which:

(1) is significant; and

(2) has arisen and is new in the sense that it was not reasonably available at the time the proceedings below were being heard.'

38 In Leisure Brothers Pty Ltd v Smith [2017] NSWCATAP 11 the Appeal Panel stated at [40 ]:

'The meaning of this clause was considered by the Appeal Panel in Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111. At [23] - [24] the Appeal Panel said:

'23 Unlike the WIM Act, the expression "reasonably available" is not qualified by the words "to the party". This difference suggests that the test of whether evidence is reasonably available is not to be considered by reference to any subjective explanation from the party seeking leave but, rather, by applying an objective test and considering whether the evidence in question was unavailable because no person could have reasonably obtained the evidence. For example, in Owners SP 76269 v Draybi Bros [2014] NSWCATAP 20 at [114] the Appeal Panel refused leave because, although the appellant may not have been aware of the evidence (being an email), it could have obtained the evidence by summons. In Prestige Auto Centre Pty Ltd v Apurva Mishra [2014] NSWCATAP 81 at [17] the Appeal Panel granted leave because the respondent to the appeal had fraudulently altered evidence. The party seeking leave under cl 12(1)(c) could not reasonably have had available to them the evidence that the report in question had been fraudulently altered at the time the proceedings were being dealt with by the Tribunal. That fact was not known to the appellant at the time of the hearing and could not reasonably be known due to fraud.

24 Each of these cases illustrates that something more than a party's incapacity to procure evidence is necessary to satisfy the requirements of cl 12(1)(c).'

39 As stated at [27] in Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown:

'the issue is whether, objectively, the evidence has arisen since the hearing and was "not reasonably available" at the time of the hearing.'"

1. In Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 an Appeal Panel stated at [10]:

"An appeal does not provide a losing party with the opportunity to run their case again except in the narrow circumstances which we have described. Mr Ryan has not satisfied us that those circumstances apply to his case and we refuse permission for him to appeal."

1. As the Appeal Panel explained in Cominos v Di Rico [2016] NSWCATAP 5 at [13]:

"It may be difficult for self-represented appellants to clearly express their grounds of appeal. In such circumstances and having regard to the guiding principle, it is appropriate for the Appeal Panel to review an appellant's stated grounds of appeal, the material provided, and the decision of the Tribunal at first instance to examine whether it is possible to discern grounds that may either raise a question of law or a basis for leave to appeal. The Appeal Panel has taken such an approach in a number of cases, for instance, Khan v Kang [2014] NSWCATAP 48 and Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69. However, this must be balanced against the obligation to act fairly and impartially (Bauskis v Liew [2013] NSWCA 297 at [68] citing Hamod v State of New South Wales [2011] NSWCA 367 at [309]- [316]). Relevantly, s 38(2) provides that that Tribunal 'may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice'."

1. Nevertheless, the appeal grounds must be reasonably discernible from the material before an Appeal Panel rather than the result of an artificial construct imposed on the material by the Panel: Damico at [45].
2. The notice of appeal narrated a number of factual matters which were said not to make the primary decision fair and equitable. In large part these matters in substance appeared in the documents presented by the OC. The supplier also complained that it had not had the opportunity to present its case. Distilling grounds as best we can, the following emerge:
3. Alleged errors on questions of law, not requiring leave to appeal if made out:

(1) Absence of procedural fairness in not receiving notice and therefore not being able to present the supplier's case.

(2) Inadequate reasons and failure to take into account relevant matters.

(3) Not making findings on the evidence on issues of breach and causation that were central to the grant of relief.

1. Alleged errors on questions of fact, requiring leave to appeal if made out: Even on the evidence alone of the OC, the decision was not fair and equitable and was against the weight of evidence because it did not sufficiently consider effect of and responsibility for the fan and its failure, for pool chemistry and for electrical work.

1. Applicable law: The primary decision appeared to characterise the relevant supply effectively as one of goods, with associated service of installation, by reference to a failure of the installed pool heater within an unreasonably short time and with no other explanation for the failure. It was arguable that a more appropriate characterisation was a supply of services of installation of goods that were an associated supply. Either way, the content of the guarantee is substantially similar in its application to the present facts.
2. The ACL NSW provides, in respect of the supply of goods to a consumer, guarantees that the goods supplied are of acceptable quality (ACL s 54), are reasonably fit for any expressly or implicitly disclosed purpose or supplier-represented purpose (s 55), and correspond with the description by which the goods are supplied (s 56).
3. The orthodox test of acceptable quality in Merck Sharp Dohme (Australia) PL v Peterson [2011] FCAFC 128, 196 FCR 145 and in APS Satellite PL v Ipstar Australia PL [2-17] NSWSC 1898 at [57] can be summarised as follows. The test is an objective one, from the perspective of a reasonable consumer fully acquainted with the state and condition of the goods including any hidden defects and any further relevant information known at time of hearing including after-acquired knowledge. The goods must have all the identified qualities enumerated in s 54(2) being fit for all purposes for which goods of that kind are commonly supplied, acceptable in appearance and finish, free from defects, safe and durable. The reasonable consumer would regard the goods as acceptable - the "acceptable standard" - having regard to the matters in s 54(3), being the nature and price of the goods, statements on labelling or packaging, any representation about the goods by supplier or manufacturer and any other relevant circumstances relating to supply of the goods.
4. Excluded under ACL NSW s 54(4) are matters specifically drawn to the consumer's attention before the consumer agreed to the supply which are the only reason or reasons that the goods are not of acceptable quality; under s 54(5) a transparent written notice displayed with the goods stating the reasons is sufficient to satisfy s 54(4).
5. Under ACL NSW s 54(6) goods do not fail to be of acceptable quality if "the consumer to whom they are supplied causes them to become of unacceptable quality, or fails to take reasonable steps to prevent them from becoming of unreasonable quality, and they are damaged by abnormal use". Under s 54(7) goods do not fail to be of acceptable quality if "the consumer acquiring the goods examines them before the consumer agrees to the supply of the goods, and the examination ought reasonably to have revealed that the goods were not of acceptable quality".
6. The ACL NSW provides, in respect of the supply of services to a consumer, guarantees that the services were supplied with due care and skill (ACL s 60) and were reasonably fit for any expressly or implicitly disclosed purpose or result (s 61).
7. Under ACL NSW s 64, such guarantees cannot be excluded. Under s 64A(2), a term of a contract for the supply of services other than services of a kind ordinarily acquired for personal, domestic or household use or consumption is not void if the term limits a person's liability for failure to comply with a guarantee to the supplying of the services again or the payment of the cost of supplying the services again. Such a limit was not relevant in the present matter.
8. Where these guarantees are not complied with, the consumer has rights pursuant to ACL NSW ss 259-264 in respect of goods and ss 267-270 in respect of services.
9. Under ACL NSW s 259(2), if the failure is not major and can be remedied, the consumer may require remediation within a reasonable time or, if such request is not complied with, otherwise have the failure remedied and recover all reasonable costs of remediation from the supplier, or notify the supplier that the consumer rejects the goods on grounds specified in the notice (subject to the rejection period limit discussed below).
10. If the failure cannot be remedied or is major, the consumer may notify the supplier that the consumer rejects the goods on grounds specified in the notice (subject to the rejection period limit discussed below), or recover by action from the supplier any reduction in the value of the goods below the price paid or payable for the goods: s 259(3).
11. Additionally, under ACL NSW s 259(4) the consumer may recover by action from the supplier damages for any reasonably foreseeable loss or damage suffered by the consumer because of the failure, unless it is established that the failure to comply occurred only because of a cause independent of human control that occurred after the goods left the supplier's control.
12. Goods need not be in their original packaging to exercise rights under ACL NSW s 259.
13. A major failure occurs under ACL NSW s 260 if: the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or the goods depart in one or more significant respects from the supply description, sample or demonstration model; or the goods are substantially unfit for a purpose for which goods of the same kind are commonly supplied and they cannot, easily and within a reasonable time, be remedied to make them fit for such purpose; or the goods are unfit for a particular purpose made known to the supplier or person negotiating or arranging the supply and the goods cannot easily and within a reasonable time be remedied to make them fit for such purpose; or the goods are not of acceptable quality because they are unsafe.
14. In Safi v Heartland Motors PL t/as Heartland Chrysler [2016] NSWCATAP 80 at [85]- [107] the Appeal Panel analysed the case law on what constituted a major failure in respect of a supply of goods, summarising its conclusions at [99]-[102]. Under ACL NSW s 260(a), the test is objective and can be applied by analogy to services. Overall, the test is whether, faced with advance knowledge of the problems and what was needed in terms of time, costs and degree of difficulty to remedy them, a reasonable consumer would have acquired the goods or acquired nothing or something else. Thus, for a major failure constituted by chronic or repetitive defective supply taken as a whole, such a period is likely to be longer than for a single catastrophic defect.
15. If there is a major failure, the consumer's entitlement to a refund is not dependent on proof of loss: Ferraro v DBN Holdings Aust PL t/as Sports Auto Group [2015] FCA 1127.
16. Under ACL NSW s 261 a supplier can remedy a non-major failure by curing defective title or for other failures by repair, identical replacement, or refund.
17. Under ACL NSW s 262 a consumer is not entitled to notify rejection under s 259 if the "rejection period for the goods" has ended, the goods have been lost, destroyed or disposed of by the consumer, the goods were damaged after supply for unrelated reasons, or the goods cannot be detached from other property without damage to them. The "rejection period" for goods is from the time of supply to when it would be reasonable to expect the relevant failure to comply with a guarantee to become apparent having regard to the type, likely use, reasonably-expected life, and reasonably-expected usage before a failure becomes apparent.
18. ACL NSW ss 263 and 265 regulate refunds, return of goods and termination of and refunds under any connected services contract. ACL NSW s 264 gives the same guarantees and remedies for replacement goods.
19. In respect of services, under ACL NSW s 267(2), if the failure is not major and can be remedied, the consumer may require remediation within a reasonable time or, if such request is not complied with, otherwise have the failure remedied and recover all reasonable costs of remediation from the supplier, or terminate the contract.
20. If the failure cannot be remedied or is major, the consumer may terminate the contract or recover by action from the supplier any reduction in the value of the services below the price paid or payable for the services: ACL NSW s 267(3).
21. Additionally, under ACL NSW s 267(4) the consumer may recover by action from the supplier damages for any reasonably foreseeable loss or damage suffered by the consumer because of the failure.
22. A major failure occurs under ACL NSW s 268 if: the services would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or the services are substantially unfit for a purpose for which services of the same kind are commonly supplied and they cannot, easily and within a reasonable time, be remedied to make them fit for such purpose; or the services and any product resulting from the services are unfit for a particular purpose made known to the supplier and the services and product cannot easily and within a reasonable time be remedied to make them fit for such purpose; or the services and any product are not of such a nature, quality, state or condition that they might reasonably be expected to achieve a result desired by the consumer made known to the supplier and the services and product cannot easily and within a reasonable time be remedied to achieve such a result.
23. As already said, the test in Safi on what constituted a major failure in respect of a supply of goods can be applied by analogy to services. Overall, the test is whether, faced with advance knowledge of the problems and what was needed in terms of time, costs and degree of difficulty to remedy them, a reasonable consumer would have acquired the supply of services or acquired nothing or something else. Thus, for a major failure constituted by chronic or repetitive defective supply taken as a whole, such a period is likely to be longer than for a single catastrophic defect.
24. ACL NSW ss 269 and 270 regulate refunds and termination of services contracts and return of goods and refunds under any connected services contract.
25. There is additional specific relief in ACL NSW ss 232-235 and a right of action for damages in s 236 that also apply to contraventions of the consumer guarantees since the guarantees are within ACL Ch 3 to which these rights of relief apply (they also apply to Ch 2).
26. If a defect is established, a respondent has failed to remediate within a reasonable time and an applicant has obtained quotations for remediation by another supplier and seeks that amount as the reasonable cost of remediation, then that reasonable cost would also be the measure of loss in an action under ACL NSW s 267(4). In these circumstances, it also would be the reduction in the value of the services below the price paid or payable for the services in an action for major failure (s 267(3)).
27. OC's documents relied upon by primary member: On the documents that were the evidence provided at final hearing by the OC, the supplier first inspected onsite on 8 December 2022 in respect of quoting to replace the pool heater and a spa heater. It received a work order dated 1 May 2023 to replace the pool heater and spa heater. The supply and install price was $14,855 including GST, to be paid over two instalments of $4,952 and one of $4,951 in line with its quotation. Neither the quotation nor the work order mentioned the existing fan in the pool equipment room. The quoted work was completed on 30 May 2023.
28. The OC raised with the supplier on 29 August 2023 that there was an issue with the pool heater. The supplier inspected that day and discovered that the fan had failed. The supplier quoted on 4 September 2023 $749 including GST to replace the fan and received a work order from the OC on 14 September 2023. However, the work order was not proceeded with for reasons not in evidence.
29. When the pool heater was again reported as leaking on 12 September 2024, the supplier attended and on the same day lodged a warranty claim with the pool heater manufacturer. The manufacturer denied the claim on 6 November 2024 and on a further requested review again in January 2025. It cited that the pool maintenance records showed that the water chemistry balance was outside requirements, there was a non-standard flue installation with no condensate trap and a lack of equipotential bonding in the electrical installation. The supplier during this period made representations in support of the warranty claim.
30. The supplier asked on 19 March 2025 if the fan was working and found, on a visit on 3 April 2025, that it was not working.
31. The OC's solicitors' letter of 14 April 2025 demanded from the supplier replacement of the pool heater or a refund. It referred to investigations that the primary contributing factor in the defective heater was inadequate ventilation owing to a malfunctioning extractor fan within the plant room and the room configuration. Both the fan and the room configuration pre-dated the heater installation but the fan had been discovered to be non-operational on recent investigations. Adequate ventilation was said to be critical for correct operation and longevity of gas pool heaters, by preventing issues related to condensation and overheating in a corrosive environment. When the fan was not operative, hot and moist exhaust gases were not expelled effectively. They cooled and condensed within the heater cabinet and flue onto the heater internals that were designed to be dry - the burner assembly, heat exchange surfaces, electrical connections and internal casing. This produced rusting, shorts and equipment failures.
32. On 29 April 2025 the OC's lawyers said that the water balance was maintained weekly at close to skin Ph levels and that the supplier should have tested ventilation as part of installation.
33. The supplier's written response on 5 May 2025, which was also in the OC's evidence, denied liability. It said that it did not do the electrical work including the equibonding. The pool heater damage came from the compromised environment after the extractor fan failed. It supplied and installed on the basis of the existing site infrastructure functioning, including the fan, which was working when it installed. It was not contracted to do maintenance including on the fan. The pool heater functioned without issues for some time which indicated the fan was working. The issues emerged on a timeline that was shortly after the fan failed.
34. The manufacturer's report to the supplier of 8 January 2025, again refusing to accept the OC's warranty claim, was also in excerpt in the OC's evidence. It said that the water balance was chronically outside required parameters on the OC's maintenance records from 30 January 2024 to 1 October 2024. The manufacturer's manual stated that failure to adhere to listed parameters may result in failure prematurely of the heat exchanger, with a risk of corrosion, and would void the warranty.
35. The report said that, if the pH was too high, there would be scale formation within the heater and a risk of filter block. If the pH was too low, the overly-acidic water would cause corrosion and leaks. The OC's maintenance records as end user showed four weeks of low pH from 1 June to 3 July 2024 with a total of eight low occasions in the spa and 18 in the pool, including for six weeks from 6 February to 12 March 2024. The installed flue kit was not support by the manufacturer. There were upward flue runs and no condensate traps which the manual advised should be installed. The absence of proper equibonding by a ground connection could cause electrolysis to the heat exchanger and was a reason for heavy corrosion.
36. Conclusions: It seems to us that there was insufficient basis to allow the appeal on the ground that the supplier had provided a reasonable explanation for its absence. Companies have a legal obligation, under penalty, properly to record changes of registered office. One of the reasons that it is important to comply with that obligation is to avoid as much as possible situations such as occurred here. Forgetting to change the registered office, if accepted without more as an explanation, would undermine the rationale for the obligation.
37. However, in the present case there are other grounds to consider in respect of the findings based on the OC's documents which were the sole material before the primary member.
38. The first relates to procedural fairness, which raises a question of law. The transcript shows that, although the primary member checked whether the notice of hearing had gone to the registered office, there was no check that the OC's evidence on which it relied had been served. Service of such documents may be established if they formed part of the documents mentioned as attached to the application, but the identity of that attachment was not checked.
39. Further, 8 July 2025 was first return date before the Tribunal of the application. Although the notice of hearing accompanying an application warns the parties that the matter "may be finalised in your absence", the notice was for a conciliation and hearing in a group list. As the primary member said, the "idea of today's listing" was "a preliminary hearing to see if we can resolve the issues in dispute by negotiation, potentially. ... if we are able to reach agreement, put that agreement into legally binding form and we're done. If we can't reach agreement, we talk about next steps. ... given the nature of the matters in this list, that'll likely be ... directions for filing of evidence ... and a hearing on another occasion".
40. Given the absence of knowledge about whether there was service of the evidence on which the primary member made a decision ex parte on first return date, it would have been in accord with the Tribunal's duty of procedural fairness, under s 38(2) and (5)(c), for directions to have been made for filing and service of each party's material and the matter to have been adjourned to a special fixture.
41. In our view, not taking this path or, in the alternative, confirming service of the material on which a final decision was being made before proceeding ex parte constituted an error on a question of law.
42. The second, which is independent of and cumulative to the first, relates to adequacy of reasons, not taking into account relevant considerations and not making findings on the evidence on issues of breach and causation that were central to the grant of relief, which also raise questions of law.
43. In this respect, the transcript shows that the primary member did not provide reasons on or, it appears, give reasoned consideration to, a central issue raised on the OC's documents placed before the Tribunal, which was whether anything done by the supplier caused the defect in the pool heater, as opposed to its being a maintenance issue (for which the OC was responsible) in respect of pool chemical levels or maintenance of a working fan. The contentions of both parties and of the manufacturer in those respects were in the documents before the primary member. There was no reasoned consideration of them or of the implication from them, contended in those communications by the supplier, that the chosen flue kit (criticised by the manufacturer as non-proprietary) and absence of a condensate tray (criticised by the manufacturer as required by the manual) were as they were because the existing space was properly ventilated by the operating fan.
44. Rather, the primary member appeared, the first time they were mentioned by the OC's representative, simply to accept the OC's contentions on pool water: "That's my initial thought as well. Like, you can't have a pool pump and then say the chlorine levels aren't right". Then, contrary to or not grappling with the contention in the manufacturer's detailed analysis report (that the maintenance, while present, was inadequate on water chemistry), the primary member said "So, just for the record, you can see from the schedules that the pool has been maintained consistently throughout the period. There's evidence from the maintenance people that maintenance is all as it should be".
45. The primary member then continued to discount the communication from the manufacturer as not relevant because the supplier was legally responsible to the OC, whereas the central relevance of the manufacturer's evidence was whether the conduct of the supplier caused the issue with the pool heater: "I've considered the evidence that been supplied by the applicant [OC] in this case. Uh, in, in, in summary, there's been a pool heater supplied and installed by the respondent. Uh, within 16 months, it's not working. Um, there's evidence to show that maintenance has occurred as it should. Uh, there has been correspondence with the manufacturer, um, but whether or not they are at fault is really irrelevant given you've contracted with [the supplier] here regardless. [then, after considering that there was no confidence that a repair order against the supplier would be complied with] But I think in the circumstances here, the most, I think there is a major failure with this particular unit, and you would assume it would operate in normal pool conditions, um, which it's failed to do".
46. There was no further substantive reasoning as the primary member, after repeating some of the foregoing, said "So essentially for the reasons I've already provided", the immediate refund order would be made.
47. Just as importantly, the primary member did not consider at all the emphasis in the material in evidence on the effect of the failure of the fan on the pool heater's performance over time. The only evidence from that material was that the issues with the heater began some months after installation and coincided with the fan being reported to be non-operative. There was no evidence that the fan was non-operative at time of installation. There was evidence of the supplier's contention that the installation occurred in the form that it did because of the ventilated environment which included a fan.
48. Finally, there was no consideration of the supplier's contentions in the communications that electrical issues were outside its scope of work.
49. As said earlier, the documents formed the only evidence before the primary member. The OC representative did not give oral evidence and was not sworn or affirmed. Accordingly, the competing factual contentions in the documents were required to be fully considered and weighed, to determine if the OC had proved its right to the relief that it sought.
50. In our view, in the treatment of the evidence and the reasoning process there were errors on questions of law: the reasons were inadequate, did not take into account relevant considerations and the were no or inadequate findings on the evidence on issues of breach and causation that were central to the grant of relief.
51. Accordingly, under s 81 of the NCAT Act, we shall allow the appeal, set aside the primary orders and remit the matter for re-hearing before a differently-constituted Tribunal after a directions hearing has made appropriate orders for further documents to prepare the matter for the final hearing. We consider that the different constitution of the Tribunal would be appropriate given the strong view expressed on the existing evidence, which included a reference to the supplier trying to fob off responsibility and an expressed lack of confidence that a repair order would be complied with, both of which the supplier strongly disputed on the appeal, having complied with the money order that was made. We shall also order the return of the monies paid, to restore the position to what it would usually be before a primary hearing.

(1) The appeal is allowed.

(2) Set aside the orders of the Tribunal made on 8 July 2025.

(3) Order that The Owners - Strata Plan No 88564 immediately repay to RL Holdings Pty Ltd the $11,331.81 the subject of order 1 of 8 July 2025 that has been set aside.

(4) Remit the proceedings in 2025/00235966 to the Tribunal for directions, including for filing and service of further documents, to prepare the proceedings for re-hearing before a differently-constituted Tribunal to that of 8 July 2025.

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.