Taherzadeh-Desovski v Kresta Blinds Ltd

NCAT Consumer and Commercial|2022-01-31|Before: Ms P

REASONS FOR DECISION

This is an application for an order that the respondent, Kresta Blinds Ltd (Kresta), refund to the applicant, Ms P Taherzadeh-Desovski, the price paid by the applicant for curtains purchased from Kresta.

Evidence of the applicant

Ms Taherzadeh-Desovski relied on oral evidence given during the hearing on 31 January 2022 and documents that she had filed and served in the proceedings. These documents comprised numerous email communications between the parties, documents recording the transaction such as order forms and payment requests, photos of the curtains and explanatory documents explaining the events.

Issues

The only real issue between the parties is whether Ms Taherzadeh-Desovski is entitled to a refund or whether Kresta should be permitted to replace the curtains that Ms Taherzadeh-Desovski purchased from Kresta.

Findings

There is very little dispute as to the facts in this matter.
The Tribunal makes the following findings.
On 23 March 2021 Ms Taherzadeh-Desovski placed an order with Kresta for two curtains. One curtain was for her bedroom and one curtain was for a home office. The total price was $3,470.00. There was also a small surcharge for credit card payments.
On 25 March 2021 confirmed that it had received payment of $1,752.35 and that the balance outstanding was $1,735.00. On that date Kresta also sent an email to Ms Taherzadeh-Desovski informing her that because she had selected a fabric that was temporarily out of stock there would be a delay and the estimated arrival time was 1 May 2020.
On about 13 April 2021 Kresta issued a tax invoice for payment of the balance outstanding of $1,735.00.
After Ms Taherzadeh-Desovski made the payment of $1,752.35 on 25 March 2021 very little appears to have happened until 9 June 2021. On that date, having still not received the curtains, Ms Taherzadeh-Desovski wrote to Kresta seeking a refund of the money she had paid.
On 11 June 2021 Ms Taherzadeh-Desovski spoke with Kresta and was informed that the curtains could be installed the following week. As a consequence, Ms Taherzadeh-Desovski agreed to continue with the purchase and on 16 June 2021 Ms Taherzadeh-Desovski paid the balance outstanding, namely $1,735.00.
On 24 June 2021 a Kresta installer attended Ms Taherzadeh-Desovski's home to install the curtains. Some problems then became apparent. First, the curtain for the bedroom was meant to be around 4 meters in width but it was only about 1.5 meters. Second, the curtain for the office had a small hole. Although the hole was very small, it had the potential to tear further or expand over time. There were some other issues such as inadequate length for the bedroom curtain and some installation issues because the bedroom window is almost a semi-circle shape.
Kresta agreed that it needed to replace the curtain with the hole in it. Kresta also agreed that the bedroom curtain, which was very much smaller than required and ordered, needed to be replaced. Kresta also agreed that the curtains which it had installed could remain at Ms Taherzadeh-Desovski's home until the replacement curtains arrived and were installed.
On 29 June 2021 Kresta sent Ms Taherzadeh-Desovski an email advising her that her order had progressed to manufacturing and that Kresta would communicate further as the status of the order changed.
On 31 August 2021 Kresta informed Ms Taherzadeh-Desovski by email that it was not at that time undertaking installations. The email stated "right now we [ie Kresta] are not working and the whole team is stood down because of the restriction and once the lockdown is over the booking team will contact you".
There was no further communication between 31 August 2021 and 29 October 2021.
On 29 October 2021 Ms Taherzadeh-Desovski contacted Kresta and expressed frustration with the delays and other matters and again requested a refund.
On 3 November 2021 Mr Danny Ma, an employee of Kresta, informed Ms Taherzadeh-Desovski that the replacement curtains had arrived and that Kresta was willing to install the curtains upon being provided with access to do so. That remains Kresta's position.
The order form and other transaction documents did not prescribe a time for the delivery and/or installation of the curtains. In other words, there was no express agreement as to the time by which Kresta was required to deliver and/or install the curtains.

Tribunal's Jurisdiction

Jurisdiction is granted to the Tribunal by section 79J of the Fair Trading Act 1997 (NSW) (FT Act) to hear and determine a consumer claim, which includes consumer claims for a money order of an amount that is less than the prescribed amount. The prescribed amount is $40,000.00.
Pursuant to sections 28 of the FT Act, the text of the Australian Consumer Law (Commonwealth) applies as a law of New South Wales. The Australian Consumer Law (ACL) is a reference to schedule 2 to the Competition and Consumer Act 2010 (Commonwealth). Consequently, the Tribunal has jurisdiction to determine claims that rely on the consumer guarantees in the ACL.
The Tribunal also has jurisdiction to determine claims relying on rights conferred on parties under the Sale of Goods Act 1923 (NSW) (SoG Act) where, as here, the amount claimed is less than the prescribed amount.

Sale of Goods Act

Section 32(2) of the Sale of Goods Act 1923 (NSW) (SoG Act) provides as follows: Where under the contract of sale the seller is bound to send the goods to the buyer, but no time for sending them is fixed, the seller is bound to send them within a reasonable time.
Similarly, where parties to a contract for the delivery of goods do not expressly agree a time by which delivery is to occur the common law implies that delivery is to occur within a reasonable time.
The issue before the Tribunal is whether, in all the circumstances, Kresta has breached an obligation to deliver and install the curtains within a reasonable time. There are two time periods which may apply to the determination of this issue. The first time period is from 23 March 2021 when the order was placed to 29 October 2021 when Ms Taherzadeh-Desovski (again) requested a refund. The second time period is a shorter period, namely, from 24 June 2021 when Ms Taherzadeh-Desovski and Kresta agreed to the provision of replacement curtains and 29 October 2021.
In my opinion, the time period that is applicable for determination of this dispute is the period from 24 June 2021 to 29 October 2021 because on 24 June 2021 Ms Taherzadeh-Desovski agreed to a course involving the replacement of the curtains that had been installed. That course is inconsistent with her previous request for a refund and superseded that request.
The period 24 June 2021 to 29 October 2021 is just over four months. Some of that time was no doubt needed for the ordering and manufacture of the replacement curtains. Nevertheless, the Tribunal finds that four months exceeds a reasonable period of time to deliver and install the two curtains. Four months is too long for a consumer to be required to wait for delivery and installation of two curtains. If such a period of time was required it was open to Kresta and Ms Taherzadeh-Desovski to expressly agree to the period that would be required.
Kresta's email to Ms Taherzadeh-Desovski on 31 August 2021 indicated that Kresta was not undertaking fittings at that time, presumably due to COVID-19 restrictions. However, the public health orders in New South Wales from June 2021 through to November 2021 varied significantly. Kresta did not contend that the application of the public health orders to its business did not permit it to install the curtains throughout the relevant period 24 June 2021 to 29 October 2021. Moreover, Kresta did not make clear to the Tribunal precisely how any public health orders impacted on delivery and installation of the curtains in the period after the agreement to provide replacement curtains on 24 June 2021 through to 29 October 2021. Consequently, Kresta did not satisfy the Tribunal that the public health orders were the reason that the curtains could not be delivered and installed during the period 24 June 2021 to 29 October 2021.
In those circumstances, the Tribunal finds Kresta breached its obligation to deliver the goods within a reasonable time and consequently Ms Taherzadeh-Desovski was entitled to a refund when she requested one on 29 October 2021 and that Kresta should have processed the refund request.
The same result follows if the correct time period is 23 March 2021 to 29 October 2021.

ACL - Consumer Guarantees

Ms Taherzadeh-Desovski also relied on section 62 of the ACL. In light of the Tribunals conclusions above, it is not strictly necessary to determine this element of Ms Taherzadeh-Desolvski's application. However, because it was invoked the Tribunal will deal with it.
The ACL draws a distinction between a supply of goods and a supply of services. The significance of the distinction is that some of the consumer guarantees in the ACL apply to a supply of services and other guarantees apply to a supply of goods. In particular, the consumer guarantee in section 62 of the ACL applies to the supply of services and requires that a service to a consumer must be supplied within a reasonable time. However, the ACL does not contain a similar provision in relation to the supply of goods. Consequently, it is necessary to determine whether the transaction for the supply and installation of the curtains was a supply of goods or a supply of services.
The definition of services in the ACL is as follows: "services includes: 1. any rights (including rights in relation to, and interests in, real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce; and 2. without limiting paragraph (a), the rights, benefits, privileges or facilities that are, or are to be, provided, granted or conferred under: 1. a contract for or in relation to the performance of work (including work of a professional nature), whether with or without the supply of goods; or 2. a contract for or in relation to the provision of, or the use or enjoyment of facilities for, amusement, entertainment, recreation or instruction; or 3. a contract for or in relation to the conferring of rights, benefits or privileges for which remuneration is payable in the form of a royalty, tribute, levy or similar exaction; or 4. a contract of insurance; or 5. a contract between a banker and a customer of the banker entered into in the course of the carrying on by the banker of the business of banking; or 6. any contract for or in relation to the lending of money; but does not include rights or benefits being the supply of goods or the performance of work under a contract of service.
The exclusionary words at the end of the definition of "services" makes clear that the supply of goods is not within the meaning of services. However, in contrast, section 11(c) provides that the "supply or acquisition of goods includes a reference to the supply or acquisition of goods together with other property or services or both."
The relationship between the definitions of goods and services was considered by Edelman J (as his Honour then was) in Australian Competition and Consumer Commission v Valve Corporation (No 3) [2016] FCA 196. At [131] - [132] his Honour held: [131] Although it is possible for a contract for the provision of services also to include the "supply of goods", the effect of the exclusionary words at the end of the definition of services requires that the transaction first be characterised to determine whether it involves a "supply of goods". This is why s 11(c) provides that a reference to a supply of goods includes goods supplied with services but s 11(d) does not extend a reference to the supply of services to include a supply of goods. This is also why the Full Court of the Federal Court said, of the definitions, that an agreement could be one for services "unless the subscribers are to be characterised as the purchasers of 'goods'": ASX Operations at FCR 467; ALR 519; IPR 329.

[132] If, properly characterised, the whole of the transaction involves the supply of goods then the exclusionary words in the definition of 'services' will mean that none of the supply will involve a service. This point was made by Wilson J in Castlemaine Tooheys Ltd v Williams & Hodgson Transport Pty Ltd [1986] HCA 72, (1986) 162 CLR 395 at 402; [1980] HCA 72; 68 ALR 376 at 381 (Castlemaine): 'The Act clearly contemplates that services may accompany the supply of goods in such a way as to constitute a single transaction properly described as a supply of goods. It follows that an act or series of acts, once characterized for the purposes of the Act as a supply of goods, cannot also be a supply of services: see Taperell, Vermeesch & Harland, Trade Practices and Consumer Protection, 3rd ed (1983), p 163. Thus a contract for the supply and fitting of a windscreen to a motor vehicle has been held to fall within a market in which persons supply goods rather than services: Cool & Sons Pty Ltd v O'Brien Glass Industries Ltd [[1981] FCA 99; 35 ALR 445, at p 460] (upheld on appeal [[1983] FCA 191; (1983) 48 ALR 625, at pp 635, 646)]. It may not always be easy to make the characterization, the task being to identify, from all the circumstances of the case, the precise legal obligation undertaken by the supplier of the goods.'"

A detailed, thorough discussion of these principles is set out in Wilson v Winnicott [2021] NSWCATAP 211 at [70] - [99].
The transaction between Ms Taherzadeh-Desovski and Kresta for the supply and installation of the curtains involved both goods (the curtains) and services (measuring and installation).
Taking an objective view of the purpose of the transaction, the Tribunal finds that the overall purpose of the transaction was for Ms Taherzadeh-Desovski to acquire, and Kresta to supply, curtains. The supply of services such as measuring and installation of the curtains was incidental to the acquisition of the curtains. The supply of the curtains to Ms Taherzadeh-Desovski was analogous to the supply and fitting of a windscreen to a motor vehicle in Cool & Sons Pty Ltd v O'Brien Glass Industries Ltd [1981] FCA 99; 35 ALR 445 which was held to be a supply of goods.
It follows that section 62 of the ACL has no application to the transaction between Ms Taherzadeh-Desovski and Kresta.
The balance of the consumer guarantees in the ACL which Ms Taherzadeh-Desovski relied on did relate to the supply of goods. However, those guarantees cannot be relied on in relation to the replacement curtains as there is no evidence to suggest that the replacement curtains were defective or inappropriate in any way.

Orders

The Tribunal orders: 1. The respondent pay the applicant $3,470.00 within 28 days; 2. The applicant is to permit the respondent to remove the curtains the subject of these proceedings from her home; 3. The respondent is to remove the curtains the subject of the proceedings from the applicant's home at no cost to the applicant within 28 days of these orders at a time mutually convenient to the parties.

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: 11 March 2022

Fair Trading Act 1997(NSW)

Sale of Good Act 1923(NSW)

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