Taylor v Lay

NCAT Consumer and Commercial|2023-04-05

REASONS FOR DECISION

This is a claim by the applicant for the payment of $43,130 for the purchase of an English Bull Dog (British Bulldog) puppy named, "Bobby." I will refer to the "good" for the purposes of the Australian Consumer Law as "Bobby."
The applicant claims a refund, damages and costs concerning her claim for Bobby as she claims that Bobby was not to an acceptable quality when she purchased him on 22 April 2022. Her claim is for compensation apart from a refund is for compensation for ongoing veterinary costs of Bobby. There is also a claim for costs, in the amount of $1,418.12 for legal costs of obtaining general legal advice concerning a letter from the respondent's solicitor.

Procedural history (GEN 22/29987) & GEN 22/53831

The claim was registered with the Tribunal on 4 July 2022 and listed for a contested hearing (before a differently constituted Tribunal) on 31 August 2022. The evidence could not be completed on 31 August 2022 and so the claim was adjourned to 11 November 2022 for further hearing. On 11 November 2022 the applicant did not appear, and the claim was dismissed. The claim was subsequently re-instated and came before the Tribunal on 22 December 2022 for directions where the parties were provided with orders concerning the exchange of updated documents as well as the examination of Bobby by a vet for the respondent. Order 4: So that the respondent can comply with Order 2 above, the applicant is made (sic) the pet available for examination by the respondent's vet provided the respondent gives seven days written notice of the consultation. The costs of the consultation are to be borne by the respondent. The consultation is to be conducted by the vet in accordance with the vet's directions including as to whether either party is in attendance.
The matter was listed for contested hearing on 5 April 2023.

Jurisdiction

The applicant purchased a puppy, "Bobby" on 26 April 2022 for the amount of $6,000.00 and claims that the puppy was not of acceptable quality and not fit for purpose pursuant to Section 54 of the ACL. Also, that the respondent made misleading and deceptive representation that Bobby was heathy,
Part 6A of the Fair Trading Act, 1987 provides for a consumer to bring a consumer claim for the supply of goods by way of sale. Section 79H of the Fair Trading Act, 1987 presumes that a person that brings a claim as a consumer is a consumer unless it is proved to the contrary. There is no suggestion that the applicant is not a consumer. Section 79L of the Fair Trading Act, 1989 provides a statute of limitations that the cause of action for the claim cannot accrue more than 3 years before the claim is lodged with the Tribunal. There is no issue as to the claim being made within time. Section 79S of the Fair Trading Act, 1987 provides that the prescribed amount is $40,000. The applicant registered The Fair Trading Regulations 2019; R 13A increased the monetary amount to $100,000 from 13 July 2022. The claim comes within the monetary limit of the Tribunal. However, the claim was brought before the commencement of the amendment. It is uncontroversial that Bobbi is a good within the meaning of Section 79D of the Fair Trading Act, 1987; "goods" means any tangible thing that is or may be the subject of trade or commerce, but does not include money or an interest in land. The respondent claims in her statement provides that she breeds British Bulldogs and that she does this as a hobby to produce a desirable pet for herself. She claims that the transaction between the applicant and herself were not in trade or commerce. She trades under the name "TessaBull Dogs NSW ANKC.' While the issue of whether the purchase was not vigorously argued, the provisions in Sections 18 and 54 of the ACL provide that the contract must be in "trade and commerce." The term 'trade or commerce' is defined in s 4 of the FT Act to 'include any business or professional activity '.
The word 'business' is also defined in s 4 to include a business not carried on for profit, and a trade or profession.
In Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; (190) 169 CLR 594, at [6] the High Court (per Mason CJ, Dean, Dawson and Gaudron JJ) held that the terms 'trade' and 'commerce' were not terms of art, but were terms of common knowledge of the widest import and did not have a different meaning as contained in s 52 of the now repealed Trade Practices Act 1979 (Cth) (now s 18 of the Australian Consumer Law). The Court went on to say: 6. … [The] real problem involved in the construction of s.52 of the Act does not, however, spring from the use of the words "trade or commerce". It arises from the requirement that the conduct to which the section refers be "in" trade or commerce. … 7. The phrase "in trade or commerce" in s.52 has a restrictive operation. It qualifies the prohibition against engaging in conduct of the specified kind. As a matter of language, a prohibition against engaging in conduct "in trade or commerce" can be construed as encompassing conduct in the course of the myriad of activities which are not, of their nature, of a trading or commercial character but which are undertaken in the course of, or as incidental to, the carrying on of an overall trading or commercial business. If the words "in trade or commerce" in s.52 are construed in that sense, the provisions of the section would extend, for example, to a case where the misleading or deceptive conduct was a failure by a driver to give the correct hand signal when driving a truck in the course of a corporation's haulage business. It would also extend to a case, such as the present, where the alleged misleading or deceptive conduct consisted of the giving of inaccurate information by one employee to another in the course of carrying on the building activities of a commercial builder. Alternatively, the reference to conduct "in trade or commerce" in s.52 can be construed as referring only to conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character. So construed, to borrow and adapt words used by Dixon J. in a different context in Bank of N.S.W. v. The Commonwealth [1948] HCA 7; (1948) 76 CLR 1, at p 381, the words "in trade or commerce" refer to "the central conception" of trade or commerce and not to the "immense field of activities" in which corporations may engage in the course of, or for the purposes of, carrying on some overall trading or commercial business.
As a matter of mere language, the arguments favouring and militating against these alternative constructions of s.52 are fairly evenly balanced. The scope of the prohibition imposed by s.52 is, however, governed not only by "the terms in which it is created" but by "the context in which it is found" (see Yorke v. Lucas [1985] HCA 65; (1985) 158 CLR 661, at p 668; and, generally, Bank of N.S.W. v. The Commonwealth, at p 285). In that regard, it is of particular significance that the words "trade" and "commerce" have "about them a chameleon-like hue, readily adapting themselves to their surroundings" (O'Brien v. Smolonogov (1983) 53 ALR 107, at p 113, quoting Federal Commissioner of Taxation v. Whitfords Beach Pty. Ltd. [1982] HCA 8; (1982) 150 CLR 355, at pp 378-379). Section 52(2) precludes limiting the scope of s.52(1) by implication drawn from the contents of other provisions of Pt V. Nonetheless, when the section is read in the context provided by other features of the Act, which is "An Act relating to certain Trade Practices", the narrower (i.e. the second) of the alternative constructions of the requirement "in trade or commerce" is the preferable one. Indeed, in the context of Pt V of the Act with its heading "Consumer Protection", it is plain that s.52 was not intended to extend to all conduct, regardless of its nature, in which a corporation might engage in the course of, or for the purposes of, its overall trading or commercial business. Put differently, the section was not intended to impose, by a side-wind, an overlay of Commonwealth law upon every field of legislative control into which a corporation might stray for the purposes of, or in connection with, carrying on its trading or commercial activities. What the section is concerned with is the conduct of a corporation towards persons, be they consumers or not, with whom it (or those whose interests it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character. …
In Williams v Pisano [2015] NSWCA 177, the Court of Appeal adopted the same approach when considered the meaning of the phrase 'in trade or commerce' as contained in ss 18 and 30 of the Australian Consumer Law. At [36] and [37], Emmett JA (Bathurst CJ and McColl JA agreeing) said the following: (citations omitted): The terms "trade" and "commerce" are ordinary terms that describe the mutual communications, negotiations, verbal and written, bargains and performance that constitute commercial arrangements. The terms are not terms of art, but are expressions of fact and terms of common knowledge. While the particular instances that may fall within them will depend upon the varying phrases of development of trade, commerce and commercial communication, the terms are clearly of the widest import. They are not restricted to dealings or communications that can properly be described as being at arm's length, in the sense that they are within open markets or between strangers or have a dominant objective of profit making. The phrase "in trade or commerce" operates to qualify the prohibitions in s 18 and s 30 against engaging in conduct of the specified kind. Those provisions were not intended to extend to all conduct, regardless of its nature, in which a person might engage in the course of, or for the purpose of, the overall trading or commercial business of that person. Section 18 and s 30 are concerned with the conduct of a person towards other persons, be they consumers or not, with whom the first person has or may have dealings in the course of trading or commercial activities of the first person that, of their nature, bear a trading or commercial character. Such conduct would include promotional activities in relation to, or for the purposes of, the supply of goods or services to actual or potential consumers, be they identified persons or merely an unidentifiable section of the public. However, the reference to "conduct in trade or commerce" must be construed as referring only to conduct that is itself an aspect or element of activities or transactions that, of their nature, bear a trading or commercial character. The words refer to the central conception of trade or commerce, and not to the immense field of activities in which persons may engage in the course of, or for the purposes of, carrying on some overall trading or commercial business.
The respondent was engaged in the breeding of British Bulldogs and traded under the name, TessaBulls and the respondent received a Breeders Prefix certification from the Royal NSW Canine Council Ltd. In a letter from the Respondent's solicitor dated 30 June 2022 in response to a claim by the applicant of non-compliance with the ACL (NSW), no issue was raised that the contract was not in "trade or commerce". I am satisfied that the parties contracted in "trade or commerce" pursuant to the ACL (NSW).
I find that the purchase of Bobby was in "trade or commerce" and that the Tribunal has jurisdiction to hear the claim.
The documents of the applicant are marked Exhibit A1 and the respondent's documents are marked Exhibit R1.

Evidence of the applicant

The applicant purchased the puppy, "Bobby" on 26 April 2022 from the respondent who is a breeder of English / British bulldogs. Bobby was 12 weeks old when he was purchased.
After the purchase, it was discovered that Bobby suffered Brachycephatic Obstructive Airway Syndrome (BOAS), severe hypoplastic Trachea being a 5.5 mm diameter in the trachea and a thoracic inlet ratio of 10% this caused difficulty in Bobby being able to breath and had been in an oxygen chamber. Bobby became ill two days after purchasing him. He displayed blood in his stools two days after the purchase and then illness 28 days after the purchase. He is diagnosed with a congenital condition and has been hospitalised many times and continues with the condition. He has dysplasia in the front left elbow, and hip dysplasia in both hips. After 28 days of purchase, he was rushed to hospital and placed in an oxygen chamber. He is also required to take daily anti-inflammatory medication, arthritis injections and joint supplements.
The applicant claims that the respondent did not comply with the guarantee of acceptable quality and that she has been through a traumatic time with Bobby as to future medical costs. She claims that the respondent was misleading and deceptive that she told the applicant that Bobby and the litter was healthy when Bobby had underlying congenital problems. The claim for damages is for future veterinary expenses with the expenses at about 9 January 2023 being $10,543.02.

Report of Dr Natalie Watson

The report of Dr Natalie Watson is that Bobby was presented on 24 May 2022 for further assessment of breathing abnormalities.
Diagnostics "CT (chest) performed conscious due to concerns regarding anaesthetic recovery: significant hiatal hernia along with severely h(y)poplastic trachea. No changes suggestive of aspiration pneumonia at time of CT. Diagnosis: Severely hypoplastic trachea, hiatal hernia, +/- aspirational pneumonia Unfortunately, there is no specific treatment for a hypoplastic trachea. Whilst this may improve to some degree as Bobby grows, euthanasia is sadly recommended in many dogs with this condition due to recurrent issues with breathing. A positive response has been seen in a small number of cases following surgically addressing the upper airways, Ideally, BOAS surgery is performed when dogs are more grown (eg. 8-12 months of age)."
In a further admission on 7 June 2022, Dr Watson states that Bobby was admitted after a choking incident and became oxygen dependent. The diagnosis was a collapse (cyanosis due to lack of oxygen) secondary to BOAS with a hypoplastic trachea.

Evidence of the respondent

The respondent is a breeder of English / British bulldogs. Bobby is a British breed of Mastiff type which is classified as brachycephalic (short headed) breed. There are several common health problems associated with this type of breed such a "Bobby's."
At the time of purchase, the respondent had 3 puppies available and the male puppy that the applicant had been interested in had been sold. The respondent claims that the applicant viewed the other puppies and was hesitant about purchasing one of the puppies due to the health issues that can occur.
This was due to past experiences the applicant had with her current other bulldog. The applicant delayed the purchased asked questions about the number of litters that the respondent had produced and whether they were healthy. The respondent told the applicant that all her pups from previous and current litters were well. The applicant then purchased Bobby on 26 April 2022. The respondent claims that the applicant contacted after the purchase as to Bobby having "runny poos" and the respondent told her that this could be the result of stress/anxiety to a new environment and change of diet.
On 27 May 2022 the respondent received a text message from the applicant concerning breathing issues and that Bobby was admitted to hospital with pneumonia, The respondent claims that this is a viral or bacterial infection and not a congenital issue. The respondent claims that the trachea to thoracic ratio will further improve as Bobby matures.
On 13 June 2022 the applicant and the respondent communicated by telephone and text message during the early stages of Bobby's admission in hospital. The respondent claims that she made an offer of 50% of the veterinary bill and this was refused by the applicant as she had pet insurance that was covering the costs.
On 13 June 2022 the applicant had a telephone conversation concerning the veterinary costs of Bobby and the respondent offered a refund of $6,000.00 for the return of Bobby. The applicant refused the offer and the respondent offered to pay 50% of the current veterinary bills, which were $8,730,50. The applicant agreed to this and she would discuss this with her partner. The following morning the applicant agreed to 50% of the current veterinary bill and 50% of upcoming veterinary bills which the respondent claims were never discussed or agreed to by her.
The respondent then felt she needed to obtain legal advice concerning the applicant's claim.
In the letter dated 30 June 2022 by Brander Smith McKnight Lawyers for the respondent to the applicant. In letter, the respondent denies any assertion that she was aware of underlying health conditions, denies that an agreement was reached for the respondent to pay half of the Veterinary Costs, and that the health conditions manifested several months after the birth and are otherwise extremely common in the English Bulldog breed. The refund offer was a gesture of goodwill and not an admission of defect /and or failure.

Letter of Dr Jasmine Annan

In a letter dated 12 September, 2022, Dr Jasmine Annan, states "On 21st April 2022, a litter of 8 British Bulldogs were examined for first puppy vaccination and microchipping. On physical exam, no abnormalities were detected. Hypoplastic trachea and hiatal hernias can not be detected on a routine physical exam and require advanced diagnostic imaging to be diagnosed."

Letter of Dr Natalie Atkins

In a letter dated 12 September 2022 from Dr Natalie Atkins, states that on 12 September 2022 the applicant brought "Bobby" in to be examined but she refused to have the dog examined in the consultation room without her presence. She then left the clinic premises, and no physical exam was able to be performed. In her oral evidence, the applicant claimed that the vet would not allow the applicant to accompany Bobby for the examination and that she would not participate in the examination if she could not accompany Bobby. The orders by the Tribunal on 22 December 2022 clearly state that the consultation is to be conducted by the vet in accordance with the vet's directions including as to whether either party is in attendance. The applicant did not comply with this order.
In the respondent's documents which includes a factsheet from the RSPCA, it provides a description of the condition of Brachycephalic Obstructive Airway Syndrome (BOAS). The facts sheet states the following relevantly: "BOAS is a breed related disorder that means affected animas cannot breathe normally and this significantly compromises their welfare. Animals affected by brachycephaly (having a flat face include dog breeds such as the French Bulldog, Pug, Boston Terrier, Boxer, British Bulldog (my emphasis) and Shih-tzu…."

Relevant legislation

The relevant legislation is as follows: 18 Misleading or deceptive conduct (1) A person must not, in trade or commerce engage in conduct that is misleading or deceptive or is likely to mislead or deceive. 54. Guarantee as to acceptable quality (1) If: (a) a person supplies, in trade or commerce, goods to a consumer; and (b) the supply does not occur by way of sale by auction; there is a guarantee that the goods are of acceptable quality. (2) Goods are of acceptable quality if they are as: (a) fit for all the purposes for which goods of that kind are commonly supplied; and (b) acceptable in appearance and finish; and (c) free from defects; and (d) safe; and (e) durable; as a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods), would regard as acceptable having regard to the matters in subsection (3). (3) The matters for the purposes of subsection (2) are: (a) the nature of the goods; and (b) the price of the (if relevant); and (c) any statements made about the goods on any packaging or label on the goods; and (d) any representation made about the goods by the supplier or manufacturer of the goods; and (e) any other relevant circumstances relating to the supply of the goods. (4) If: (a) goods supplied to a consumer are not of acceptable quality; and (b) the only reason or reasons why they are not of acceptable quality were specifically drawn to the consumer's attention before the consumer agreed to the supply; the goods are taken to be of acceptable quality.

Consideration

Bobby was purchased on 26 April 2022 and that he suffers from Brachycephalic Obstructive Airway Syndrome (BOAS), a chronic health problem which can improve as he matures, or it may require further surgical procedures concerning his airways. Both the applicant and the respondent gave oral evidence in the claim, to the effect, that Bobby may require ongoing veterinary treatment. I accept that both witnesses gave their evidence honestly and to the best of their recollection and that recalling the events were distressing for the applicant.

Misleading and deceptive conduct

The applicant claims that the respondent provided misleading and deceptive representations as to the health of Bobby. The respondent denies that she had knowledge Bobby was suffering any defect and that her conduct was misleading and deceptive. She relies on a veterinary report of Dr Annan dated 12 September 2022 that "… on physical exam, no abnormalities were detected." In SG Corones, The Australian Consumer Law [119] the author refers to a contractual promise about an existing matter of fact will contravene s 18 [ACL] where the facts are not promises and this misleads someone who the promisor knew may rely on that promise. A promise may also contain an implied representation of existing fact, namely that the promisor has a present intention to make good the promise, or that the promisor has the means to do so. Stack v Coast Securities 9 Pty Ltd (1983) 46 ALR 451.
The provision of the misleading or deceptive conduct is where the contracting party relies on a promise at the time of entering the contract.
The Appeal Panel considered the test for false and misleading conduct in Forbes v Wan [2020] NSWCATAP 129, in applying Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25 at [24]-[33], the High Court said, "that in considering whether the facts of a case disclosed misleading or deceptive conduct, a two-step analysis is required. The first step involves asking whether facts establish the conduct pleaded. The second step involves asking whether, as a question of fact, the conduct is false, misleading or deceptive or likely to mislead or deceive. It is necessary to have regard to the context in which the representation was made and to the relevant surrounding facts and circumstances. Regarding the alleged misleading or deceptive conduct, the conduct complained of was promises of future conduct."
In Yorke v Lucas (1985) 158 CLR 661; [1985] HCA 65 at [17] the High Court said (when considering the previous but relevantly the same provisions of the Trade Practices Act 1974 (Cth)) that "involved" requires a party to a contravention to be an intentional participant, the necessary intent being based upon knowledge of the essential elements of the contravention.
In CH Real Estate Pty Ltd v Jainran Pty Ltd [2010] NSWCA 37 at [309] Young JA said: "in Yorke v Lucas, the High Court held that what was required to show liability under the section was that the person in question had knowledge of the essential elements of the contravention."
In my view, the applicant is required to establish that the respondent had knowledge that Bobby was suffering BOAS at the time of purchase and that the representation by the respondent that Bobby was healthy was misleading and deceptive. The respondent has provided the letter from Dr Annan that no abnormalities were detected on 21 April 2022 when she examined the puppies including "Bobby." The letter dated 18 January 2023 from Dr Balnave supports the respondent that she had no concerns with the breeding of puppies by the respondent.
The claim by the applicant is that the respondent should have conducted DNA tests before the puppy is sold to detect congenital conditions. This is not a requirement of the law. Similarly, if the applicant required this as a condition of purchase, the applicant could have requested DNA certificates of a breeder before purchase, and if this was not provided then not proceed with the purchase. I accept the denial by the respondent that she did not have knowledge of Bobby having BOAS at the time of the purchase of him by the applicant. On balance this claim is not proven, and the claim is dismissed.

Guarantee of Acceptable Quality

The applicant also claims that Bobby is not of acceptable quality pursuant to Section 54 of the ACL. Section 54 provides a guarantee that a good that is of acceptable quality at the time of purchase. Section 54 (2) of the ACL provides that: (2) goods are of acceptable if they are as: (a) fit for all the purposes for which of goods that kind are commonly supplied; and (b) acceptable in appearance and finish; and (c) free from defects; and (d) safe; and (e) durable; as a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods), would regard as acceptable having regard to the matters in subsection (3).
The applicant is required to prove that when she purchased Bobby he had a defect that a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods) would not regard as acceptable.
After hearing the oral evidence of the applicant and the respondent, I have found that the respondent did not know at the time of purchase that Bobby had BOAS. However, this does not alleviate the guarantee provided under Section 54 of the ACL.
The test as to whether goods are of an "acceptable quality" is an objective one; being taken from the perspective of a "reasonable consumer" (APS Satellite Pty Ltd (formerly known as Sky Mesh Pty Ltd) v Ipstar Australia Pty Ltd [2016] NSWSC 1898 (APS Satellite Pty Ltd) at [57]; Merck Sharp & Dohme (Australia) Pty Ltd v Peterson (2011) 196 FCR 145; 284 ALR 1; [2011] FCAFC 128). 1. The question for the "reasonable consumer" is whether the goods in question have the identified qualities enumerated in 54(2) to an "acceptable standard". This requirement is derived from the words "as a reasonable consumer … would regard as acceptable". 2. The "acceptable standard" is used as the yardstick against which the qualities of the goods are to be measured. It is ascertained by a consideration of the matters referred to in s 54(3); the nature of the goods, their price, any statement made about the goods on packaging or labels, any representations made about the goods by the supplier or manufacturer, and any other circumstance relating to their supply. 3. It is necessary the goods have all of the qualities identified in s 54(2) to the ascertained acceptable standard. Those qualities are that the goods are fit for all the purposes for which goods of that kind are commonly supplied, acceptable in appearance and finish, free from defects, safe and durable. 4. In the assessment of whether the goods meet that relevant standard, the reasonable consumer is taken to be fully acquainted with the state and condition of the goods (including any hidden defects of the goods). 5. If the goods supplied do not have all of the identified qualities to the acceptable standard, they will not be of an "acceptable quality".
[143] In compendious terms, the issue is whether, objectively, the goods supplied (when taking into account their actual quality including any latent defects) are, to an acceptable standard, fit for all the purposes for which goods of that kind are commonly supplied, acceptable in appearance and finish, free from defects, safe and durable when measured by a standard which reflects the nature of the goods, their price, statements about the good as per their packaging, representations made about the goods and any other relevant circumstance. In Prestige Auto Traders Australia Ltd v Bonnefin [2017] NSWSC 149 at [132] N Adams J identified the manner in which s 54 should be applied in the following way:
"The relevant test in s 54(2) of the ACL (NSW) of whether or not goods are of "acceptable quality" is an objective one based on whether a reasonable consumer who was aware of the "defects" in the goods at the time of the supply would have considered them to be of acceptable quality. There was no issue taken that the determination of what is objectively reasonable for a consumer to expect is to be made taking into account the relevant information known as at the time of the trial, including "after-acquired knowledge": Medtel Pty Ltd v Courtney (2003) 130 FCR 182; 198 ALR 630; [2003] FCAFC 151 at [66] and [70].'"
In Australian Competition and Consumer Commission v Jayco Corporation Pty Ltd [2020] FCA 1672 Wheelahan J said: "[25] … The standards under s 54(2) include that goods will be fit for all purposes for which goods of that kind are commonly supplied. This general standard of fitness for purpose is not dependent upon the consumer communicating any intended purpose to the supplier, or relying upon the supplier's skill or judgment. And, in relation to the general standard, it does not suffice that the goods will be fit for only some of those purposes. [26] The standard of acceptable quality in s 54(2) has as its reference point a construct, namely the objective standard of a reasonable consumer fully acquainted with the state and condition of the goods, including any hidden defects of the goods. The reasonable consumer sits with an array of other hypothetical persons who have been recruited by the law and by reference to whom objective standards are evaluated: see, Healthcare at Home Ltd v The Common Services Agency [2014] UKSC 49; 4 All ER 210 at [1]-[4] (Lord Reed JSC). Such a person has been described as an anthropomorphic conception of justice that is and must be the court itself: see Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696 at 728 (Lord Radcliffe). [27] The hypothetical question whether the reasonable consumer would have regarded the quality of the goods as acceptable is to be determined at the time of supply. However, the reference in s 54(2) to hidden defects has the consequence that for the purposes of determining that question, the reasonable consumer may be acquainted with information known at the time of trial: cf, Medtel Pty Ltd v Courtney [2003] FCAFC 151; 130 FCR 182 at [70] (Branson J, Jacobson J agreeing). The standard of acceptable quality prescribed by s 54(2) is not absolute, or a standard of perfection. It is tempered by what a reasonable consumer would regard as acceptable having regard to the several matters in s 54(3). These matters render the standard of acceptable quality elastic, and context specific: Contact Energy Ltd v Jones [2009] 2 NZLR 830 at [95] (Miller J). The significance of the components of the guarantee of acceptable quality will therefore vary with the circumstances of each case."
The respondent agreed with the applicant to pay half of the first veterinary costs of $8,730.50 and then a return and refund of Bobby. The respondent claims that this was a "good will gesture." However, Section 54 of ACL provides that the respondent is to comply with the guarantee. In my view, the breathing difficulties of Bobby and the severe BOAS are defects in Bobby that had the applicant been aware of or a reasonable consumer aware of, the applicant or a reasonable consumer would not have purchased Bobby. I find on balance that this claim is proven. Although this was not raised as an issue during the hearing, I also find that the condition of severe BOAS that affects Bobby's health, is a major failure pursuant to Section 260 of the ACL.

Assessment of damages

In my view, this would amount to the return of Bobby to the respondent, refund and perhaps the associated costs of his early veterinary costs. However, the applicant did not reject Bobby and claim a refund pursuant to Section 259 and 260 of the ACL. The applicant elects to keep Bobby and claim damages pursuant to Section 259 (4) of the ACL for his treatment and ongoing treatment and claims that this is "reasonably foreseeable." The application seeks damages for Bobby of $40,000.
Section 259 (4) of the ACL provides: The consumer may, by action against the supplier, recover damages for any loss or damage suffered by the consumer because of the failure to comply with the guarantee if it was reasonably foreseeable that the consumer would suffer such loss or damage as a result of such a failure.
One of the issues is whether these costs are "reasonably foreseeable."
Section 259 of the Australian Consumer Law (NSW)("ACL NSW") provides that if there is a failure with the guarantee and the failure cannot be remedied or is a major failure the consumer may reject the goods and elect a refund or a reduction in the value of the goods: Section 259 (3) of the Australian Consumer Law (NSW). The consumer may also recover damages for any loss suffered by the consumer from a failure to comply with the guarantee if it was reasonably foreseeable that the consumer would suffer such loss or damage as a result of such a failure: Section 259 (4) of the ACL (NSW).
In Leeda Projects v Zeng (2020) 61 VR 384; [2020] VSCA 192 Kaye JA at [12] set out the following in relation to contractual damages (citations omitted): The fundamental principles, for the determination of damages for breach of contract, are well established. Essentially, damages are awarded in order to compensate the injured party for the loss and damage arising from the breach of contract. Thus, damages consist of the sum of money which will put the injured party in the same position as if the breach of contract had not occurred. In order to determine the appropriate measure of damages in a particular case, it is necessary first to identify the kind of loss for which the injured party claims compensation. The loss, which is compensable in an action for breach of contract, is that which may fairly and reasonably be considered as arising naturally, that is, according to the usual course of things, from the breach of contract itself, or such as may be reasonably supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it.
As was stated by Lord Reid in C Czarnikow Limited v Koufos [1969] 1 AC 350 at 385: The crucial question is whether, on the information available to the defendant when the contract was made, he should, or the reasonable man in his position realised that such loss was sufficiently likely to result from the breach of contract to make it proper to hold that the loss flowed naturally from the breach or that loss of that kind should have been within his contemplation.
The principle enunciated by Lord Reid and referred to by Kaye J in Leeda Projects is generally known as the principle in Hadley v Baxendale. Hadley v Baxendale requires an assessment of what could be reasonably supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it.
This requires there to be a causal link between damages that are being sought and the cause of action. That is, was it in the reasonable contemplation at the time of entering the contract that the damages being sought for Bobby of his current and ongoing veterinary expenses were in the reasonable contemplation of the parties at the time of the purchase of Bobby. The respondent gave oral evidence that the veterinary damages were not in her contemplation at the time of entering the contract.
There is also a legal duty on the applicant to mitigate her loss. By not accepting the return and refund has the applicant mitigated her loss? In my view, had the applicant elected to reject Bobby, return and obtained a refund she would have mitigated her loss. The applicant did not mitigate her loss. In my view, the additional veterinary costs after the initial admission, are too remote and therefore not in the reasonable contemplation of the parties at the time of entering the contract or reasonably foreseeable. Therefore, I reject the claim for further veterinary costs after the initial admission of Bobby.
I am required to assess what damages are fair and equitable given the election by the applicant not to reject the goods. In Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64; [1994] HCA 54 at 83 (Amann), Mason CJ and Dawson J said:
'The settled rule, both here and in England, is that mere difficulty in estimating damages does not relieve a court from the responsibility of estimating them as best it can. Indeed, in Jones v Schiffmann Menzies J. went so far as to say that the 'assessment of damages … does sometimes, of necessity involve what is guesswork rather than estimation'. Where precise evidence is not available the court must do the best it can. And uncertainty as to the profits to be derived from a business by reasons of contingencies is not a reason for a court refusing to assess damages. (Footnotes omitted)'"
The parties initially were agreeable to the respondent paying half of the veterinary costs of $8,730.50 to the applicant, however this was subsequently rejected by the applicant. The applicant did not mitigate her loss by rejecting the good and seeking a refund. In my view, the further veterinary costs after the initial admission are too remote to be in the reasonable contemplation of the parties at the time of entering the contract.
Therefore, I find it is fair and equitable in accordance with the principles of Commonwealth v Amann Aviation Pty Ltd for the applicant to pay half of the initial veterinary costs of $8,730.50. The amount being is $4,365.25.

Costs

The applicant applies for her costs of $1,418.12 and her claim to the Tribunal exceeded the $30,000.00. Rule 38 of the Civil and Administrative Tribunal Rules, 2014 provides the following: 38 Costs in Consumer and Commercial Division of the Tribunal (1) This rule applies to proceedings for the exercise of functions of the Tribunal that are allocated to the Consumer and Commercial Division of the Tribunal. (2) Despite section 60 of the Act, the Tribunal may award costs in proceedings to which this rule applies even in the absence of special circumstances warranting such an award if - (a) the amount claimed or in dispute in the proceedings is more than $10,000 but not more than $30,000 and the Tribunal has made an order under clause 10(2) of Schedule 4 to the Act in relation to the proceedings, or (b) the amount claimed or in dispute in the proceedings is more than $30,000.
The Tribunal has a discretion in the awarding of costs. Under s 60 of the Civil & Administrative Tribunal Act 2013 (NSW) (the NCAT Act) each party to the proceedings in the Tribunal is to pay the party's own costs. However, under s 60(2) the Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs. The Civil & Administrative Tribunal Rules 2014 (NSW) (the Rules) provide in rule 38 that despite s 60 the Tribunal may award costs in proceedings to which this rule applies even in the absence of special circumstances warranting such an award if the amount claimed or in dispute is more than $30,000.
The Tribunal may award costs even in the absence of special circumstances if the amount claimed or in dispute exceeded $30,000. Nevertheless, there is no rule in the Tribunal that costs follow the event.
The applicant sent a letter of demand to the respondent on 29 June 2023 concerning the dispute. The applicant claims that as a consequence she needed to obtain legal advice from Foulsham and Geddes Lawyers and was billed the amount of $1,418.12 for general advice concerning the letter. Where the amount of the claim sought exceeds $30,000.00 the applicant does not have to establish special circumstances. The applicant obtained legal advice after the legal letter was sent to her by the respondent on 29 June 2022. In the circumstances, the applicant incurred legal expenses to obtain legal advice concerning the letter. In my view, costs should follow the event and it is on balance fair and equitable to award costs. The respondent is to pay the applicant the fixed amount of $1,418.12 in costs.

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

Amendments 11 August 2023 - Formatting amendments. 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 August 2023

Trade Practices Act 1979(Cth)

Trade Practices Act 1974(Cth)

Administrative Tribunal Act 2013(NSW)

Administrative Tribunal Rules 2014(NSW)

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