ACT CIVIL & ADMINISTRATIVE TRIBUNAL

THOMSON v EXCEL INTELLIGENT PTY LTD (Civil Dispute) [2017] ACAT 21

XD 433/2016

Catchwords: CIVIL DISPUTE – Australian Consumer Law – acceptable quality – fitness for purpose– whether a reasonable consumer would regard goods as acceptable – refund as remedy

Legislation cited: Australian Consumer Law ss 54, 259, 260, 262, 263Competition and Consumer Act 2010 (Cth) sch 2 Fair Trading (Australian Consumer Law) Act 1992 s 6, 11

Tribunal: Presidential Member G C McCarthy

Date of Orders: 29 March 2017Date of Reasons for Decision: 29 March 2017

AUSTRALIAN CAPITAL TERRITORYCIVIL & ADMINISTRATIVE TRIBUNAL XD 433/2016

BETWEEN:

JEAN THOMSON Applicant

AND:

EXCEL INTELLIGENT PTY LTD Respondent

TRIBUNAL: Presidential Member G C McCarthy

DATE: 29 March 2017

ORDERThe Tribunal Orders that:

1. Within 28 days from the date of this order, the respondent pay the applicant

$3,037.30, comprised of:

(a) $1,799 by way of refund of the purchase price;

(b) $199 by way of refund of the freight charge for the subject goods;

(c) $140.30 for the applicant’s costs of delivering the subject goods from the

delivery depot to the applicant’s address;

(d) $750 for Mr Arizapa’s costs of assembling and dismantling the structure;

(e) $140 for the filing fee; and

(f) $9 for the search fee.

……………………………..Presidential Member G C McCarthy

REASONS FOR DECISION

Background

1. In August 2015, the applicant, Jean Thomson, located on the website eBay an

advertisement placed by the respondent under a selling name “estoreonline88”

for a steel shed quoted as “Large Steel Garden shed 3.3mW x 6mD Workshop

Storage Garage Color Backyard Sheds”. The advertisement had a box in which

was a picture of the shed marked “New advanced design. Garage Workshop”

with a photograph of a car inside the shed. The box containing the photograph

included the words “Large Heavy Duty”. The online purchase price was $2,499.

2. The title “estoreonline88” is a name used on eBay by the respondent, Excel

Intelligent Pty Ltd, with the website address “Wholesalesdirect.com.au”.

3. Although the advertisement offered purchase via PayPal, the applicant alleges

that on inquiry a person from the respondent informed her that purchase via

PayPal was not possible because of the colour she was choosing and that she

would need to pay by direct purchase using, for example, a MasterCard.

4. Mr Tim Gu, who represented the respondent by telephone at the hearing, said

that PayPal is always available “without exception”.

5. I make no finding as to whether the respondent refused to permit the applicant

from paying using PayPal, but it remains clear from the respondent’s tax invoice

that the applicant proceeded with the purchase using her MasterCard for a

purchase price of $1,799 plus freight of $199, totalling $1,998.

The applicant’s case

6. The applicant gave evidence that on 17 November 2015 the shed components

arrived at the delivery depot. However the applicant’s builder, Mr Arizapa, was

unable to collect the components until 2 December 2015. She states that she

paid a further $146.30 for delivery of the component parts from the depot to a

home address and that Mr Arizapa commenced assembling the components of

the structure that day.

7. Mr Arizapa is the licensed owner of Infinite Roofing and Home Maintenance

Pty Ltd. Mr Arizapa has six years of experience in construction.

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8. The applicant gave evidence that on 4 December 2015 Mr Arizapa telephoned

her to explain that the structure supplied by the respondent was not suitable to

be used as a work shed, certainly not as a garage, and was “flimsy” and “not

heavy duty”.

9. His evidence was uncertain as to the extent to which he had assembled the

structure when coming to the view that it was not suitable to be used as a

garage. However it is at least clear that he had assembled the frame, had

inspected the panels and was confident that all the components necessary to

assemble the structure had been provided.

10. Mr Arizapa gave evidence at the hearing as to why he considered the structure

to be flimsy, and not suitable to be used as a work shed or garage. He referred to

a support bar across the floor at the front of the shed that a car would

immediately squash or flatten upon driving across. He explained that he had

installed many metal sheds and garages in the course of conducting his business,

and had never seen or installed a garage with a bar across the floor at its

entrance.

11. He said that the components of the frame could be “bent easily by an adult”. He

expressed his concern to the applicant that it “could have easily collapsed” in a

storm or strong winds because of its large size and flimsy construction. It was

not, he said, structurally sound.

12. Mr Arizapa also said that the screws supplied by the respondent were 16 mm

long and not of sufficient length to secure the panels to the frame. He said that

in a strong wind the panels would just “slide off”.

13. Mr Arizapa gave evidence that the structure was not a garage, and that it was

“just a big garden shed”.

14. Mr Arizapa also referred to the side door height of 1,600 mm, being a height

less than the height of many people, and said that it was not a suitable height for

a work shed or garage. In cross-examination by Mr Gu, Mr Arizapa rejected the

proposition that it is normal for a person to “duck” in order to enter a work shed

or garage.

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15. Mr Arizapa advised the applicant to dismantle the structure because of the

dangers it presented, particularly to neighbours, if it collapsed in a strong wind.

The applicant accepted that advice and Mr Arizapa dismantled the structure.

16. In advance of and in preparation for the hearing, the respondent provided the

Tribunal and the applicant with a letter dated 16 December 2016 from

Mr Martin Gamble, the managing director of Gamcorp (Melbourne) Pty Ltd,

structural engineers. Mr Gamble stated in his letter that Gamcorp had carried

out a design check of the Excel Intelligent ED, SC, and GD Carport and Shed

products and assessed the main and secondary structural components to be

“satisfactory” based on the product information provided by Excel Intelligent

Pty Ltd. Mr Gamble’s letter specified the dimensions (including thickness) of

the structural components per the product information provided.

17. The respondent also provided a certificate of compliance from Knight

Consulting Engineers Pty Ltd to the effect that the steel structures as depicted in

the drawings forming part of the certificate were, in substance, structurally

sound.

18. After receiving these documents, the applicant sought advice from Mr Ivan

Dikmans, the Branch Manager with Herzog Steel Pty Ltd. Mr Dikmans has

been working at Herzog Steel for over 14 years. The applicant provided

Mr Dikmans with a copy of Mr Gamble’s letter; a copy of Knight Consulting’s

certificate of compliance; and the structural components supplied by the

respondent to the applicant.

19. Mr Dikmans gave evidence that he measured the frame materials for their

dimensions and thickness and compared them with the dimensions and

thickness of the components stated in the structural drawings and certificate of

compliance. He explained that the structural components supplied to the

applicant were not consistent with the structural components described in

Mr Gamble’s letter or the certificate of compliance. For example, Mr Gamble’s

letter lists the materials as 60×40×1.5bmt or 80×40×1.5bmt, but the structural

members supplied to the applicant were 46×46×1.15bmt. Mr Dikmans

explained that “bmt” is a term meaning base metal thickness.

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20. Mr Dikmans gave evidence that he:

would not recommend the sale of the materials provided to [the applicant] to anyone who had intentions of building a garage with them.

21. In cross-examination by Mr Gu, Mr Dikmans said that the shed panels were

“paper thin” and approximately as “thick as a sheet of cardboard”. Mr Dikmans

explained that the structure was not strong enough to be used as a shed or

garage and that if hit by a car while trying to back out, the car would “knock it

flat on the ground”.

22. Mr Dikmans agreed in cross-examination that he was not an engineer and could

not dispute that a structure built in accordance with the specifications in

Mr Gamble’s letter or the certificate of compliance would be satisfactory, but

repeated that the structure shown to him by the applicant was not what was

described in the engineering documents.

23. The applicant gave evidence that on 4 December 2015, the same day

Mr Arizapa informed her that the structure was not fit for purpose, she

telephoned the respondent and tried to explain to a person, “Josephine”, that the

shed was not fit for purpose and that she wanted to return it and obtain a refund.

The applicant stated that Josephine “appeared to be agitated and was shouting –

the words were unintelligible - then hung up.”

24. The applicant gave evidence that on 5 December 2015 Mr Arizapa dismantled

the shed.

25. On 9 December 2015, the applicant wrote a letter of demand to the respondent

referring to the amount she had paid ($1,799 + $199 for delivery) plus the

courier delivery costs $146.30 and requested a refund on the grounds that the

product was not of acceptable quality, was not fit for the specified purpose (i.e.

a garage) and does not match the description provided. She stated that she was

entitled to the refund for those reasons under the “national consumer law”.

26. The applicant stated that she would “like to return the garage to your store for a

full refund of the purchase price plus costs for delivery/return/building.” She

stated that alternatively, she would be prepared to accept the purchase amount

of $1,200 plus delivery/return costs in full and final settlement if the refund was

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paid within seven days. The applicant explained at hearing that the statement of

the purchase amount of $1,200 was an oversight, and should have referred to

$1,800 being the amount she paid for the structure.

27. The respondent refused to refund the purchase price or in any way resolve the

matter with the applicant.

28. At hearing, the applicant sought a full refund and also the cost of returning the

components of the structure, as this would potentially have been covered if she

had been given an opportunity to pay via PayPal, and reimbursement of

Mr Arizapa’s costs ($750) for installing and dismantling the shed.

The respondent’s case

29. The respondent first contended that the applicant’s letter of demand had been

“falsified” because the applicant had changed the stated purchase amount from

$1,200 to $1,800.

30. The respondent then contended that “during the pre-sale stage of the

transaction”, the applicant had not stated her purpose or intended use of the

structure or the location where she intended to erect it. The respondent also

contended that “during a conversation [presumably with the applicant] prior to

the purchase of the garage, the question of steel thickness did arise and was

answered by our representative.”

31. The respondent also called “the credibility of Salvador Arizapa into question”

because, Mr Gu said, he should have seen and felt the materials of the structure

whilst checking the parts and yet he continued to construct the structure up to

what should have been the very last stage. The respondent also expressed its

“serious belief” that the instructions as provided were not read and followed.

For example had he done so, the respondent said, Mr Arizapa would have seen

that the screws used for the roof are to be used with seals, which Mr Arizapa

stated were needed for waterproofing, and that sealing washers were supplied

with the roof screws.

32. The respondent also relied on a contention that “heavy duty” is not a term used

in the classification of steel in Australia.

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33. Regarding Mr Arizapa’s claim that the support posts could be “easily bent by an

adult”, the respondent said that if Mr Arizapa was referring to the use of

leverage of an adult’s body weight, a qualified roofer should know that the

minimum purlin needed to support body weight is 100 mm whilst the listing that

was deemed “suitable” stated clearly 50×50 mm posts. The respondent said that

if “easily bent by an adult” was a reference to bending by hand without

leverage, then “this is impossible”.

34. At hearing, Mr Gu relied on Mr Gamble’s letter and the certificate of

compliance from Knight Consulting to contend that if the components described

in those documents were acceptable and satisfactory, then the components

supplied to the applicant must be “more acceptable” because the respondent’s

materials, as supplied to the applicant, are better than those described in

Mr Gamble’s letter and the certificate of compliance. Mr Gu referred by way of

example to the shed displayed in the certificate of compliance having only one

roofing frame in the middle where the shed provided to the applicant had four

frames. Mr Gu tendered a copy of the installation manual entitled “Excel

Garage Workshop” that displays at “step three” the two end frames and two

central frames.

35. Mr Gu also submitted that the framing structures with dimensions

46×46×1.15bmt were “thicker” than those described in the certificate of

compliance and must therefore be satisfactory.

36. Mr Gu submitted that the Tribunal should conclude that the shed described in

the certificate of compliance could not be blown away by wind because Knight

Consulting had certified that “the steel structures in the drawings … shall be

capable of sustaining the most adverse combinations of loads to which it will be

subjected”. Mr Gu submitted that because the structure provided to the applicant

was stronger and thicker than that described in the certificate of compliance, the

Tribunal should conclude that the structure provided to the applicant could also

not be blown away by wind.

37. Mr Gu also submitted that a personal access door 1600 mm high is “adequate”

and that “we fail to understand” why the applicant or Mr Arizapa says otherwise

or what requirements the door “fails to conform with”.

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38. Mr Gu submitted that the garage is fit for purpose because it “fits a vehicle”.

39. Mr Gu submitted that the respondent should not be liable for a refund because

the shed construction had begun and the respondent can no longer re-sell the

shed as new.

40. Mr Gu submitted that the respondent should not be liable for the cost of

delivering the components of the structure from the delivery depot to the

applicant’s house ($146.30) because the applicant arranged for that to occur at

her own initiative and it was neither organised nor authorised by the respondent.

41. Mr Gu submitted that the respondent’s product is “a good product” and that the

respondent has had “very little complaint” about it. Mr Gu submitted, in

summary, that the “mess up” happened because Mr Arizapa did not follow the

installation instructions, probably did not examine the parts and did not do due

diligence.

Consideration

42. The applicant’s claim was succinctly put. She complains that the respondent

advertised a garage, sold its product to her as a garage and that it was not

suitable for use as a garage. She refers to its flimsy construction and, referring

to the evidence of Mr Arizapa and Mr Dikmans, that it was likely to collapse in

a storm or strong wind or if hit by a car when reversing out of the structure. She

contended that the door frame was not fit for purpose because it was too low to

walk through.

43. The applicant’s claim amounts to a claim that the respondent did not comply

with the statutory guarantee under section 54 of the Australian Consumer Law

(ACT) (the ACL)1 that the structure be of “acceptable quality” as defined in

section 54(2). The ACL applies in this matter because the applicant resides in

the ACT.2

44. Section 54 of the ACL states:1 The Fair Trading (Australian Consumer Law) Act 1992 (ACT), section

6(a) relevantly includes the Australian Consumer Law at schedule 2 to the Competition and Consumer Act 2010 (Cth), and section 7 permits it to be referred to as The Australian Consumer Law (ACT)

2 Fair Trading (Australian Consumer Law) Act 1992 (ACT ) section 11(1)(c)

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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 goods (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.

(5) If:(a) goods are displayed for sale or hire; and(b) the goods would not be of acceptable quality if they were supplied to

a consumer;the reason or reasons why they are not of acceptable quality are taken, for the purposes of subsection (4), to have been specifically drawn to a consumer’s attention if those reasons were disclosed on a written notice that was displayed with the goods and that was transparent.

(6) Goods do not fail to be of acceptable quality if:(a) 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 unacceptable quality; and

(b) they are damaged by abnormal use.

(7) Goods do not fail to be of acceptable quality if:

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(a) the consumer acquiring the goods examines them before the consumer agrees to the supply of the goods; and

(b) the examination ought reasonably to have revealed that the goods were not of acceptable quality.

45. For the purposes of section 54(1) of the ACL, I find (and it was not disputed):

(a) the respondent is a legal person that supplied, in trade or commerce, goods

(namely the structure) to a consumer (namely the applicant);

(b) the supply did not occur by way of sale by auction; and

(c) the respondent’s supply of the structure was subject to a guarantee that the

goods be of acceptable quality as defined in section 54(2) of the ACL.

46. In issue is whether the applicant has established on the balance of probabilities

that the structure was not of acceptable quality, having regard to the matters set

out in section 54(3). The respondent did not suggest that any of the ‘excuse’

provisions in sections 54(4) – (7) is applicable in this case.

47. In determining whether the structure was of acceptable quality, I considered

whether a reasonable consumer would regard each of the five features of quality

as set out in section 54(2)(a) – (e) was met. Section 54(2) required that

assessment be done, not by reference to a particular consumer (in this case the

applicant) but by applying an objective test.

48. In this case, the applicant contend that the respondent was in breach of the

guarantee because the structure was not “fit for all the purposes for which goods

of that kind of commonly supplied”, per section 54(2)(a), having regard to the

statements made to her in the respondent’s advertisement: section 54(3). In

particular, the advertisement described the product as a “large heavy duty

garage workshop” and depicted a car inside the structure. In my view from this

advertisement, a reasonable consumer would have understood that the product

would be fit for all the purposes of a garage.

49. The respondent accepted that its product was (and is) intended for use as a

garage. Its assembly manual confirms its use for that purpose, again depicting

the constructed structure with a car inside it and the opening words:

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As many request from our customer, we now introduce the Premium Steel WORKSHOP/GARAGE.

50. That the applicant had not stated her purpose or intended use of the structure or

the location where she intended to erect it is irrelevant. Nor does the respondent

suggest that the applicant said something about her intended use that led the

respondent to suggest its product was suitable for the represented use. In any

event, her intended use is consistent with the respondent’s represented case. The

respondent accepts that its product was marketed and sold for use as a garage.

51. The question therefore became whether the structure was fit for use as a garage.

Its fitness for that purpose flowed over to the question whether it was “safe” and

“durable”, per section 54(2)(d) and (e) of the ACL.

52. The applicant led evidence from Mr Arizapa and Mr Dikmans, as detailed

above, as to why the structure was not fit for the purposes of a garage. I need

not repeat that evidence here.

53. The respondent did not call any witness to give evidence that the structure was

fit for use a garage. Instead, the respondent relied upon Mr Gamble’s letter and

the certificate of compliance from Knight Consulting regarding a different

structure and asked the Tribunal to infer from those documents that if the

structure described in those documents is “satisfactory” then so must be the

structure sold to the applicant.

54. I am not prepared to draw the inference that Mr Gu seeks. The Tribunal must

proceed on evidence. If the structure sold to the applicant was fit for purpose as

a garage, it should have been relatively straightforward for the respondent to

call a witness with sufficient expertise or experience to say so, and why. The

fact that some engineering documents describe the structural components of a

different structure as “satisfactory” is beside the point. A witness with sufficient

engineering expertise might have been able to say that if the components

described in Mr Gamble’s letter and the certificate of compliance from Knight

Consulting are satisfactory then so should be the components of the structure

sold to the applicant, and why that was so, but no such witness was called.

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55. Indeed the only comparative evidence on the matter was that given by

Mr Dikmans, who said that he could make no comment about the structural

integrity of the components described in Mr Gamble’s letter and the certificate

of compliance from Knight Consulting; that they were different from the

components sold to the applicant; and that the components sold to the applicant

were not suitable for use as a garage.

56. I also reject Mr Gu’s submission that Mr Arizapa was not a credible witness.

Mr Arizapa gave clear and straightforward evidence explaining why the shed

was flimsy and not safe to use as a work shed or garage. I accept his evidence. It

is illogical that Mr Arizapa would advise the applicant that the shed was not

safe or durable to be used as a garage and advise her to dismantle it, if that

advice was not true and where that advice placed the applicant in the

predicament of having purchased a shed that she then could not use for its

intended purpose.

57. I also reject the respondent’s claim that a doorway into a workshop or garage

that is only 1,600 mm high is “adequate”. Basic common sense, and the fact that

doorways are routinely approximately 2,000 mm high is enough to persuade me

that a doorway that is only 1,600 mm high is inadequate. The respondent

complains that the applicant has not referred to or relied upon any

“requirements” that the doorway has failed “to conform with”. In the face of

such an apparently inadequate height, too low for a grown person of ordinary

height to enter without stooping, and where the respondent is the manufacturer

and supplier of the structure, I would have expected the respondent to have

verified by reference to design requirements that such a height is permissible

before manufacturing the structure and so have been readily able to inform the

Tribunal by reference to those design requirements that such an inadequate

height is nevertheless permissible. The respondent did not leave any such

evidence, and I doubt that such a height is permissible.

58. I reject the respondent’s submission that the applicant’s letter of demand was

“falsified” when changed to reflect the correct purchase of $1,800. Far from

anything being falsified, the change was to correct the stated purchase price to

the true amount.

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59. Mr Gu did not attempt to justify or defend the faults as acceptable. Rather, he

denied the existence of faults and contended that the structure was fit for use as

a garage. On the evidence, I reject that submission.

60. I also reject Mr Gu’s submission that the respondent’s product is “a good

product” and that the respondent has had “very little complaint” about it. The

applicant provided evidence of numerous complaints posted on eBay about the

respondent’s product that similarly described “very flimsy metal sheets”, “a

very poor quality shed” and that “they scammed me into buying the product

directly from them so they could avoid the eBay fees.” I make no findings about

the truth or otherwise of these postings, but they contradict Mr Gu’s contention

that the respondent has had very little complaint about its product.

61. I find that the respondent was in breach of its guarantee under section 54 of the

ACL that the structure, sold as a garage, be of acceptable quality.

Remedy

62. The respondent’s breach of its statutory guarantee does not, by itself, entitle the

applicant to a refund. An entitlement to reject goods and obtain a refund arises

only if the remedy cannot be remedied or is a major failure, and the consumer

(in this case the applicant) rejected the goods before the rejection period has

ended.

63. I am satisfied that these preconditions are met in this case.

64. The insufficient strength of the frame and its defective design for use as a

garage could not be remedied: both were inherent failures of the product.

65. Having regard to the evidence of Mr Dikmans, as set out in paragraph 20 above,

I am satisfied that the insufficient strength of the frame and its defective design

as a garage constituted a major failure as defined in section 260(a) of the ACL,

namely:

the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure

66. The rejection period is defined in section 262(2) of the ACL as follows:

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(2)  The rejection period for goods is the period from the time of the supply of the goods to the consumer within which it would be reasonable to expect the relevant failure to comply with a guarantee referred to in section 259(1)(b) to become apparent having regard to:

(a)  the type of goods; and

(b)  the use to which a consumer is likely to put them; and

(c)  the length of time for which it is reasonable for them to be used; and

(d)  the amount of use to which it is reasonable for them to be put before such a failure becomes apparent.

67. Where the applicant rejected the structure on the same day that Mr Arizapa

advised her that the structure was not fit for purpose, two days after its delivery,

and as soon as Mr Arizapa realised that it could not be used as a garage and

before construction was completed, it is plain that the applicant rejected the

goods before the rejection period had ended.

68. I reject the respondent’s submission that the applicant was not entitled to return

the goods or obtain a refund because the applicant, through Mr Arizapa, had

partly assembled the structure to such a point that it could no longer be resold

“as new”. The ACL does not preclude a person from obtaining a refund for that

reason, nor should Mr Arizapa have reasonably understood that the product

would not be suitable for use as a garage before beginning to assemble it.

69. For these reasons, I am satisfied that the applicant is entitled to a refund of the

purchase price of the structure ($1,799) and reimbursement of the freight charge

($199).

70. The applicant also seeks an order that the respondent pay or reimburse her for

her costs of delivering the structure’s components from the delivery depot to the

applicant’s address ($146.50) and for Mr Arizapa’s costs of constructing and/or

dismantling the structure ($750).

71. Mr Gu submits that the respondent should not have to pay the delivery costs

because it neither organised nor authorised delivery of the components to the

applicant’s address. Mr Gu did not make any submission as to why the

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respondent should not pay for Mr Arizapa’s costs, but I will infer that the same

submission is made in relation to those costs.

72. In my view, the respondent is liable to pay for the delivery costs and for

Mr Arizapa’s costs.

73. Section 259 of the ACL provides for remedies against the supplier of goods.

Subsection 259(4) of the ACL entitles the applicant to recover for any loss or

damage suffered by her because of the respondent’s failure to comply with its

statutory guarantee. Subsection 259(4) states:

259 Action against suppliers of goods

(1) A consumer may take action under this section if: (a) a person (the supplier ) supplies, in trade or commerce, goods to the

consumer; and (b) a guarantee that applies to the supply under Subdivision A of

Division1 of Part3-2 (other than sections 58 and 59(1)) is not complied with.

(2) ...

(3) ...

(4) 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.

(5) Subsection (4) does not apply if the failure to comply with the guarantee occurred only because of a cause independent of human control that occurred after the goods left the control of the supplier.

(6) To avoid doubt, subsection (4) applies in addition to subsections (2) and (3).

(7) the consumer may take action under this section whether or not the goods are in their original packaging.

74. In my view, the applicant’s cost of delivering the structural components from

the depot to her address and then Mr Arizapa’s costs of constructing and/or

dismantling the structure constituted a reasonably foreseeable loss caused

because of the respondent’s failure to comply with its statutory guarantee. The

product was not fit for purpose from the beginning, meaning before it was

delivered to the delivery depot. The applicant incurred costs of bringing it to her

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address and assembling it, both reasonably foreseeable, which were purposeless

from the outset because the structure was never going to be fit for use as a

garage.

75. For this reason, subsection 259(5) is not applicable. The failure to comply with

the guarantee did not occur after the goods left the control of the supplier. It

occurred from when the respondent advertised the product as a garage when it

was not fit for use as a garage. The fact that the loss occurred after the goods

left the control of the respondent supplier is irrelevant.

76. Where the applicant is successful in her claim, I also order the respondent to pay

the filing fee for the application and the search fee.

77. The applicant also seeks, in her statement, the cost of returning the goods to the

company as this would potentially have been covered if she had been given the

opportunity to purchase via PayPal.

78. I do not agree that the respondent should pay the applicant any amount for the

cost of returning the structural components to the respondent. Rather,

notwithstanding the applicant having rejected the goods, the respondent is

required to collect the goods at its expense. Subsections 263(1) – (3) provide:

263   Consequences of rejecting goods

(1)  This section applies if, under section 259, a consumer notifies a supplier of goods that the consumer rejects the goods.

(2)  The consumer must return the goods to the supplier unless:  (a)  the goods have already been returned to, or retrieved by, the

supplier; or (b)  the goods cannot be returned, removed or transported without

significant cost to the consumer because of:

(i)  the nature of the failure to comply with the guarantee to which the rejection relates; or

(ii)  the size or height, or method of attachment, of the goods.

(3)  If subsection (2)(b) applies, the supplier must, within a reasonable time, collect the goods at the supplier's expense.

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79. In this case, I am satisfied that the structural components of the shed cannot be

returned or transported without significant cost to the applicant, such that she is

not required to return them to the respondent,3 and it is for the respondent to

collect them, within a reasonable time, at its own expense.4

80. The respondent should liaise with the applicant regarding a mutually convenient

time to collect the goods. It would then be for the respondent to decide where it

wishes to take the structural components of the shed. The respondent is required

to collect the goods “within a reasonable time”, which I consider would be no

more than a month in the absence of any advice to the applicant to the contrary.

Accordingly, in my view the applicant would be entitled to dispose of them as

she sees fit without complaint from the respondent if the respondent has not

collected its goods by 1 May 2017 or reached agreement with the applicant for

an alternate date.

Conclusion

81. For these reasons, I will order the respondent to pay the applicant $3,037.30

comprised of $1,799 by way of refund of the purchase price, $199 for the

freight charge for the subject goods, $140.30 for the delivery charge from the

depot to her home, $750 for Mr Arizapa’s costs, $140 for the filing fee and $9

for the search fee.

82. I will give the respondent 28 days within which to pay the amount ordered. If

the total amount owing ($3,037.30) is not paid within 28 days, the applicant

may take enforcement action in the ACT Magistrates Court for non-payment of

the ordered amount.

………………………………..Presidential Member G C McCarthy

3 section 263(2)(b)4 section 263(3)

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HEARING DETAILS

FILE NUMBER: XD 433/2016

PARTIES, APPLICANT: Jean Thomson

PARTIES, RESPONDENT: Excel Intelligent Pty Ltd

COUNSEL APPEARING, APPLICANT N/A

COUNSEL APPEARING, RESPONDENT N/A

SOLICITORS FOR APPLICANT N/A

SOLICITORS FOR RESPONDENT N/A

TRIBUNAL MEMBERS: Presidential Member G C McCarthy

DATE OF HEARING: 3 March 2017

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