Wise v Green Initiatives Pty Ltd

Jurisdiction

1. The applicants' claim is a consumer claim within the meaning of section 3A of the Consumer Claims Act 1998, and the Tribunal has jurisdiction to determine it pursuant to sections 28 and 29 of the Civil and Administrative Tribunal Act 2013, and clause 29 of schedule 5 to the Fair Trading Amendment Act 2015. The Fair Trading Act states that the Australian Consumer Law ("ACL") is a law of New South Wales.

The hearing on 18 September 2015

1. Both parties relied on documents they had lodged and exchanged following directions made for them to do so. Both applicants gave oral evidence at the hearing. Mr Ivan Anderson and Mr Stuart Stratton gave oral evidence for the respondent. No expert evidence was provided by either party.
2. The evidence of the applicants can be summarised as;

• They wished to purchase a solar system for use on their rural property for both household and farming related activity.
• The nature of their electricity use varied, particularly in terms of what farm related activity they engaged in from time to time.
• In early April 2013, Mr Rohit Singla, a salesman employed by the respondent, visited the applicants at their home and made representations about the financial benefits of buying a solar power system. Those representations were that they "would receive 16 cents per kilowatt hour for power that went back to the grid"; the system "would cut their power bills to almost nil"; and that the system "would pay for itself within 4 years", ("the representations").
• Mr Singh made handwritten calculations about power usage and savings, on 5 sheets of blank paper which he left with them.
• On the basis of the representations, they entered into a contract ("the contract") with the respondent on 8 April 2013 to buy a 5 kwh system with 22 panels. The Tribunal notes that the contract contains no warranties as to any financial benefits the applicants would derive from the system.
• On 28 May 2014, at the suggestion of Mr Singla, they upgraded to a 5.5 kwh system at no extra cost.
• There was a significant delay in the system becoming operational due to a mistake made by the respondent in assuming the property had single phase power, when it actually had two phase power. The system became operational on 1 July 2014.
• Because they consume the majority of their power at night, the system is too big in that it has too many panels, and the respondent should have sold them less panels.
• They have never received more than 8 cents per kwh for power returned to the grid.
• It will take longer than four years for the system to pay for itself.
• Their power bills have only reduced slightly since the system became operational.
• The system is not working properly and does not produce the power it should.
• If they had known by how little their power bills would reduce, how long it would take for the system to pay for itself, and that they would receive only 8 cents per kwh for power exported to the grid, they would not have bought the system.
• They made no enquiries of their own about any of the representations, nor did they make any enquiries about the economics of buying the power system, nor attempt to make their own calculations about the savings the system should provide.

1. The evidence of the respondent can be summarised as;

• The system was working properly when commissioned after the two phase system was installed.
• If there is a malfunction in the system, that is shown on the system's equipment.
• The system should produce between 20 kwh per day and 30 kwh per day, depending on variables such as the time of year and location of the panels.
• The system has a life-span of 25 years.
• There is nothing to indicate the system is not working properly, or not producing an average of about 25 kwh per day.
• The only accurate way to determine how much power is being produced is to take readings from the inverters. The inverters are located between the panels and the consumer's switchboard, and change the power from AC to DC. The power from the switchboard is used by the consumer, and any excess is exported to the grid, for which the consumer is paid whatever price has been agreed with the power supplier.
• The price of electricity was 23 cents per kwh when the contract was entered into, and is now 32 cents per kwh.
• The most cost effective way to use power from the system is for consumers to use as much as possible (and avoid paying 31 cents per kwh to the supplier) rather than export it to the grid (for 8 cents per kwh).
• Although the applicants' usage of power from the system may not be favourable, they are still saving about $2,000.00 per year, and the system should pay for itself in a bit over 7 years, which is a return on investment of about 14% per year. That estimate was made by examining the power bills provided by the applicants, including the amount returned to the grid, and applying an average of 25 kwh per day, at 32 cents per kwh.
• The rebate, or price, that consumers can obtain for power exported to the grid, is determined by negotiation between consumers and the various power providers. There never was a NSW government subsidy of 8 cents per kwh for power exported to the grid. In Queensland there was a government rebate of 16 cents per hour in April 2013, and this ceased on 1 July 2014.
• Mr Singla was employed by the respondent, and worked mainly in Queensland.
• There are electricity providers who will purchase solar power for as much as 20 cents per kwh, but only for a limited period before reverting to a lower amount.

Findings

1. Mr and Mrs Wise presented as truthful witnesses and the Tribunal accepts their evidence about all matters, except their opinion that the system is too big and not working properly, and that the representations caused them to buy the system. More particularly, the Tribunal accepts Mr Singla made the representations. The respondent did not give any evidence from Mr Singla, or anyone else, to contradict the applicants' evidence about the representations. Furthermore, the Tribunal finds that Mr Singla made those representations in the course of trade or commerce, as an employee of the respondent.
2. The Tribunal also finds Mr Anderson and Mr Stratton to be truthful witnesses, and accepts their evidence.

Application of legal principles to facts

1. A person who suffers loss or damage because of another person's misleading conduct, or breach of a consumer guarantee, is entitled to recover the amount of the loss or damage under section 236 of the ACL. Under section 237 of the ACL the person can seek compensation orders, including, under section 243 (d), an order that the respondent refund money to the person who has suffered the loss or damage. Similar orders are available under the Consumer Claims Act.
2. To be entitled to a remedy, the applicants must establish that the representations were misleading or likely to mislead, or that the system breaches one of the consumer guarantees.
3. Dealing first with the issue of the representations, the test to be applied as to whether they were misleading or likely to mislead, is an objective one which the Tribunal must determine for itself [1] .
4. The statements "your power bills will be cut to almost nil", "you will get 16 cents per kwh for power exported to the grid", and "the system will pay for itself in four years", are in the Tribunal's view, opinions or exaggerations, which would be found to be incorrect upon a basic enquiry.
5. The Tribunal finds the applicants' decision to buy the system, was not caused by the representations, but the applicants' failure to make any enquiries of their own. All that the applicants had to do to estimate what the actual savings would be, and thereby discover those representations were incorrect, was to look at their power usage, estimate what portion was likely to be used during daylight, and apply the cost of power per kwh at the time. Similarly, it would have been easy for the applicants to find out what they could expect to be paid for power exported to the grid. As was said about the then equivalent to section 18 of the ACL, in Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [2] ; "The heavy burden which the section creates cannot have been intended to be imposed for the benefit of consumers who fail to take reasonable care for their own interests."
6. The Tribunal finds that a reasonable person, in the situation of the applicants, would not have been misled into buying the system, because he or she would have made simple enquiries about the representations and found them to be wrong. The Tribunal is not satisfied the representations were misleading in terms of section 18 of the Australian Consumer Law.
7. The second issue that must be dealt with, are the allegations the system was too big for the applicants' needs, or does not work properly because it does not provide the power it should. If established, those claims could put the respondent in breach of one or more of the consumer guarantees in Chapter 3 of the Australian Consumer Law ("the ACL").
8. The only evidence to support the claim about the system being too big was the bare assertion of the applicants, and hearsay evidence from an electrician of unknown qualifications in relation to solar power, that the system had too many panels.
9. No expert evidence was provided.
10. The evidence of Mr Anderson, which the Tribunal accepts, was that the size of the system was appropriate for the applicants' needs, and there was nothing to indicate the system was not working as it should. To determine whether the system is producing the power it should, Mr Anderson said readings need to be taken from the inverters. No such evidence was provided by the applicants.
11. Accordingly, the Tribunal is not satisfied on the balance of probabilities that the system provided by the respondent breaches any of the consumer guarantees.
12. For these reasons, and having regard to the matters in section 13 of the Consumer Claims Act, the application is dismissed. W Priestley General Member Civil and Administrative Tribunal of NSW 29 October 2015

Endnotes

1. Domain Names Australia Pty Ltd v au Domain Administration Ltd [2004] FCAFC 247 at [17] - [18], cited in "Consumer Protection Law in Australia" A Bruce 2nd edition
2. (1982) 149 CLR 191 at 199 cited in ibid 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: 07 January 2016