Anderson v DK Investments Pty Ltd [2016] QCAT 375

CITATION: Anderson v DK Investments Pty Ltd [2016] QCAT 375 PARTIES: Darryl Wayne Anderson (Applicant) v DK Investments Pty Ltd t/a Aqua Boat Lifts Australia (Respondent) APPLICATION NUMBER: MCDO2028-15 MATTER TYPE: Other minor civil dispute matters HEARING DATE: 27 June 2016 HEARD AT: Brisbane DECISION OF: Adjudicator Bertelsen DELIVERED ON: 12 October 2016 DELIVERED AT: Brisbane ORDERS MADE: 1. The Respondent pay to the Applicant the sum of $16,402.48. 2. Upon payment the Respondent be at liberty to collect the boat lift from the Applicant. CATCHWORDS: Australian Consumer Law – installation of boat lift – not fit for purpose – componentry failure – major fault – entitlement to refund APPEARANCES: APPLICANT: Darryl Wayne Anderson RESPONDENT: David Keenan, Director. DK Investments Pty Ltd t/as Aqua Boat Lifts -- 1 of 8 -- 2 REASONS FOR DECISION Application [1] By application filed 15 September 2015 Darryl Anderson seeks a refund of $13,244.38 for breach of Australian Consumer Guarantees and $2,852.50 for rectification works in respect of the purchase and installation of a boat lift at Mr Andersons Nerang river front premises, 82 Amalfi Drive, Isle of Capri. Background and Evidence [2] In about November 2013 Mr Anderson contacted Mr Keenan, director of the Respondent DK Investments Pty Ltd with a view to purchasing an Aqua Boat lift suitable for a pontoon boat ‘that was moored in an area subject to high amounts of wash from passing boats’. According to Mr Anderson, he requested Mr Keenan to attend his premises to observe the severity of wash from marine traffic. He asserted Mr Keenan told him the Aqua Boat lift was suitable for high wash zones; that he had installed other lifts in the Nerang river. [3] Mr Anderson and DK Investments Pty Ltd entered into a contract for the supply and installation of the Aqua Boat lift in December 2013. Mr Anderson asserted it was an implied term of the contract that the boat lift would be: a) Suitable for its application i.e. raising, storing and lowering a pontoon boat in a high wash environment; and b) Of acceptable quality i.e. to be strong enough to withstand the wash from boats passing by. [4] On 26 March 2014 DK Investments Pty Ltd in the person of Mr Keenan attended Mr Andersons premises and installed the boat lift, Mr Anderson paying the invoice purchase and installation price of $13,244.98. He contended that within days the lift had begun to crack and become dangerous and unstable; that he liaised with Mr Keenan about the boat lifts failure to function adequately; that Mr Keenan offered to undertake limited repairs which he accepted and that the repairs failed to make the lift suitable for its application. [5] Mr Anderson stated that he incurred further consequential loss in repairing the boat lift in an attempt to make it fit for the purpose which he said Mr Keenan knew it would be put to and warranted it to be suitable for. [6] The boat lift operated by being fitted to Mr Anderson’s pontoon with two brackets. As the pontoon moved up and down with the water level on its own two concrete pylons so did the boat lift. The intended procedure was for Mr Anderson’s pontoon boat to be driven on to the boat lift. The plastic tanks (bags or tubes) would be electronically inflated lifting the pontoon boat out of and above the water level normally about half a metre. The pontoon boat could be lowered back into the water by deflating the tanks. -- 2 of 8 -- 3 [7] At hearing Mr Anderson said the welding joins in the brackets began cracking, minor cracks within three days and major cracks within three weeks; that he sent photos depicting the same to Mr Keenan. [8] In reply, Mr Keenan stated that the wash in the Nerang river was that heavy that it cracked the original base plates (the brackets). This was so because whilst the pontoon boat may have been out of the water in an elevated position the inflated tanks themselves were still in the water; that the tanks are affected by any wash from passing boats. [9] Mr Keenan said: The wash will hit the boat lift, coming from all different directions. The boat lift, because it is floating on top of the water – now it’s not, as I said, not floating exactly on top of the water, because some of the tank is remaining in the water, but call it floating on top of the water, it then moves up and down to whatever the wash is doing and therefore it slides up and down on the rail. Now, yep, the boat wash that Mr Anderson experiences there, the 10 millimetre base plate that was supplied had cracked after a few weeks, that is correct. [10] He said as soon as he received photos of the crack from Mr Anderson: We immediately endeavoured to make a new set, a new pair to send them directly up… free of charge… they were going to be upgraded, they were going to go from 10 ml plates to 16 ml plates… they were going to have a bigger gusset. [11] Mr Anderson said though he received photos the upgraded brackets were neither ever received nor fitted. [12] Mr Keenan said the upgraded brackets were never sent ‘because Mr Andersons had an outstanding bill of $880 and basically refused to pay it so therefore we never sent his upgraded foot pads that were going to be given to him free of charge’. He said that they were otherwise ‘sitting there, ready to go’ but because of the $880.00 outstanding invoice was never paid for on a requested component the upgraded base plates were never sent. [13] Mr Keenan said the $880.00 invoice was for a third slide system (base plate and slide arm) that Mr Anderson had requested on the day of installation. Mr Anderson said he believed it was the next day ‘because Simon Hughes had made the point that there was no way in the world it was going to stand up in the third arm and David agreed it’d work with the third on it’. Simon Hughes, it transpired, was a person who carried out rectification work on the boat lift for Mr Anderson. Mr Anderson, in reference to the $880.00 invoice stated on 9 May 2014 that he was ‘shocked and surprised about new bill that I have just received, Dave. Issues we are having with the lift is a result of what you delivered not being capable of handling the wash’. [14] Mr Anderson then referred to his email of 5 August 2014 to Mr Keenan wherein he outlined: -- 3 of 8 -- 4 All costs that I’d incurred with repairs to the lifts so far, for etcetera, putting on the stainless steel arms there, installation of the third lift, which I don’t believe I should be responsible for and in that account I sent to David I also had, at item 8 less $800 - $700 for the third arm. Now to say that I wasn’t prepared to pay for the third arm is unfair and not right because I have acknowledged, on the 5 August 2014, under item 8, and David did respond to that email. [15] Whilst Mr Anderson stated initial base plate cracking appeared three days after installation Mr Keenan insisted that Mr Anderson had requested the third slide/arm on the date of installation. [16] The third slide/arm including 10mm base plate was supplied by Mr Keenan at an additional cost of $880.00 to Mr Anderson on 15 April 2014, and installed by Simon Hughes on 16 April 2014. However, it was because Mr Anderson refused to pay the $880.00 invoice, Mr Keenan declined to furnish Mr Anderson with the upgraded base plates. [17] Mr Anderson went on to say ‘with the wash the front tube was hitting the arm that goes up, and it punctured holes in it and lowered it at the front and because it wasn’t holding air’. He contacted Mr Keenan who asked him to contact a plastic welding business, Ace Welding, which attended on site on 17 April 2015 and repaired the punctures. Mr Anderson paid Ace Welding $550.00 and Simon Hughes $110.00 for dismantling assistance. [18] Initial cracking in the 10mm base plates was repaired by MJ Robinson on 4 April 2014 at a cost of $470.00, and then again on 14 May 2015 at a cost of $120.00. Mr Anderson also asserted problems with the guides that kept the vertical arms on track. [19] Mr Anderson produced an engineer’s report from Amir Mahan, Senior Structural Engineer and Payinon Aria, Senior Structural Engineer dated 19 May 2014. They concluded that bracket welds were failing under applied loads from the boat lift. They believed that the welding of a 75mm wide vertical plate to the base plate was not adequate to withstand the environmental loadings generated by wash wave actions at the Nerang river. [20] They went on to say: In conclusion, we believe that the supporting brackets are suitable for vertical loads under operation of the boat lift but, they would fail in their weld lines under lateral environmental loads. It should be noted that our design checks are based on static effects of the environmental loads and no dynamic or fatigue loading effect has been taken into account. In such loading cases the resulting forces are far severe than static loadings. The proposed extension of the weld line of the vertical plate to the base plate is solely for the purpose of achieving weld capacity required to withstand the applied static loads to your boat lift… [21] Mr Keenan stated that it was company policy that if there was any outstanding invoice there would be no ongoing works or rectification. He -- 4 of 8 -- 5 said on 14 May 2014, several weeks after installation, that he emailed Mr Anderson as follows: Hi Darryl, Considering we have no control over the speed limit where you live and until the water authority restrict the speed limit, the best solution is to remove your boat from the lift and we will have the lift removed as we have another buyer wanting to purchase it. [22] Whilst Mr Keenan asserted he was prepared to offer a refund, he said ‘I did not offer in writing a full refund’. Mr Anderson did not deny that Mr Keenan indicated to him that he had another client looking for a boat lift in the area, but said at no time was he offered his money back. Mr Keenan said he could have sold the boat lift to someone else for the same price Mr Anderson paid for it. [23] Mr Keenan asserted that a warranty was sent to Mr Anderson when the boat lift was initially paid for. Mr Anderson could not recall receiving a warranty. That was a Hi Tide Sales Inc of Florida, USA warranty, which stated that the warranty would be deemed void for, amongst other reasons, ‘if the original purchaser or anyone not authorised by Hi Tide Sales Inc attempts to make any repairs to the Launch Pad or to replace any of its component parts, or otherwise alter the Launch Pad’. Mr Anderson stated, ‘at no stage did we do any work on that – on the launch pad itself without any discussions or emails and phone calls and text messages to David which I’ve got in front of me’. [24] Mr Keenan produced 101 pages of text messages and photos confirmatory of an ongoing and steady dialogue between Mr Anderson and himself during the period 30 December 2013 through 14 July 2015. [25] Mr Keenan stated, referring to the installation of the boat lift: I promptly delivered it, installed it. We actually were below cost so we were out of pocket. So we had nowhere to go at any type of major repairs or warranty issues or anything like that. Now, when the original base plates cracked we were prepared to send up the new base plates, the upgraded ones, but we could not carry the $880.00 that was outstanding. So where this has all gone pear shaped is when Darryl didn’t want to pay the $880.00 and basically, the communications have all gone sour from then and then and that’s why on the 14th of the 5th 2014 I’ve sent an email over to him and he was told to remove his boat and that we were picking up the lift because there is no – there was no room for anymore repairs or rectification or however you’d like to put it. Basically there was no money in the deal. [26] Mr Keenan went on to say: Darryl was so concerned about the longevity of the lift. I had no other option but to have him remove his boat and we were coming to pick the lift up. [27] Then in answer to the Tribunal’s query as to whether he intended to refund the money paid, Mr Keenan answered ‘100 per cent’. Mr Keenan also stated ‘I was going to refund your money for the whole amount. That way you could never have a bad word to say about me’. -- 5 of 8 -- 6 [28] Mr Anderson said: that Mr Keenan was happy for a third slide arm to be installed and for Simon Hughes to install it; that spacers were required to be installed to stop the tanks hitting the pontoon; that the only point of contention seemed to be whether hollow or solid spacers be installed; that Midway Metals installed solid spacers that kept the boat lift away from the pontoon. He said the boat lift was now tied up to a neighbour’s tree, because it was sinking; that it was now unusable ‘because the twists and everything that are in it’; that he had since ‘purchased an Air Berth for $14,650, and it’s performing beautifully’. [29] Mr Keenan stated he had never previously installed a boat lift on the Nerang river. He said he never gave a site specific quote. He said he was aware of spacers that placed the boat lift away from the pontoon, but not aware of 45° brackets placed up to the upper portion of the I-Beam to strengthen it. He said it was a case of strengthening the base plates by installing upgraded base plates. He clarified that tank punctures occurred some 12 months down the track in April 2015; that it was prior structural alterations and modifications that caused the tank puncture. [30] Mr Simon Hughes gave evidence. He was a carpenter and wall covering person who did rectification work for Mr Anderson. He observed there was ‘too much movement in the structure and not enough bracing, causing massive amount of movement between the metal framing and the plastic tubing, causing breaks in the plastic’. He said the: welds were cracking between the base plate and the upright which connected the I-beam together… as the lift goes up higher, the guides actually go further away from the base plate which causes a lot of movement in aluminium. So to stop that movement we’ve gone and put these right angle braces which sit higher than the base plate to support the top of the I-beam so there’s no movement. Conclusions [31] The boat lift, as delivered and installed by Mr Keenan showed signs of failure within three days of installation i.e. minor cracking in the base plate welds and major cracking within three weeks. Mr Keenan was well aware that the venue fronted the Nerang river with its attendant marine traffic. The boat lift installation was never a qualified installation in the sense that, for instance, it would be restricted to calm waters not subject to wash from boats in the vicinity. [32] Quite apart from Mr Anderson’s evidence, which the Tribunal accepts, that he made Mr Keenan aware of Nerang river marine traffic conditions, it is a matter of common sense that river and canal waterways in a central area of the Gold Coast would be subject to significant boat usage and have the wash issues always associated with such boat usage. [33] The boat lift, as installed with only two 10mm base plates holding the boat lift to the pontoon was clearly inadequate, because the 10mm base plates began to fail virtually immediately. It was self-evident. -- 6 of 8 -- 7 [34] The fact that Mr Anderson ordered a third slide system (base plate and slide arm) whether on the installation date or a day or two later does not affect, and has no bearing on, the adequacy of the boat lift to function as intended. Whether it was a precautionary measure or otherwise on the part of Mr Anderson to order the third slide is not the point. The ordering of the third slide was a separate and additional component, which it seems in the eventuality, once installed at least initially improved the function of the boat lift. [35] What was never here, and what should have been, delivered promptly were 16mm base plates. One will never know, but perhaps that would have gone further to strengthening the boat lift connection to the pontoon, such as to make it function adequately so as to be considered fit for purpose. The point is that non-payment for an additional component, an extra, not even part of the original delivery and installation was never going to ground a refusal to address the inadequacy of the boat lift as installed. [36] In these circumstances, Mr Anderson had every right to set about trying to upgrade the boat lift so as to make it fully functional, and that involved not only the third slide, but also the alternate manner in which the eventually installed three slide systems were strengthened, the tank punctures repaired, and spacers installed. Certainly, the third slide system was a necessity in the absence of upgraded 16mm base plates. The engineers at least agree to the extent that the supporting brackets were suitable for vertical loads under operation of the boat lift, but they said such brackets would fail in their weld lines under lateral environmental loads i.e. the wash. [37] Mr Keenan’s reticence to honour the warranty, whether or not it was as implied by the Australian Consumer Law, or per force of the USA manufacturer warranty, seemed to revolve more around his contention that the boat lift was installed below cost. He admitted in evidence that he had nowhere to go with any type of major repairs or warranty issues and that there was no money in the deal. That accords with his position that he wanted Mr Anderson to remove his pontoon boat off the boat lift and that he would come and pick the boat lift up. That was because, on his evidence, he could have on sold it. Nowhere however was there any offer of a full refund, although he said when queried that he would have refunded 100% of the purchase cost. His words never translated into action at the time. In the mean time the boat lift has deteriorated to the point where it is unusable and sinking, forcing Mr Anderson to expend some $14,000.00 on a replacement Air Berth. [38] It would be unreasonable for Mr Anderson to be expected to continue to outlay funds to maintain functionality of the boat lift with no end in sight, when no assistance, despite requests, was ever going to be forthcoming from Mr Keenan. [39] Mr Anderson’s actions speak for themselves to the extent that he has expended monies in an attempt to bring the boat lift to a state of reasonable functionality. In those circumstances, he is entitled to those, at least attempted rectification costs in the sum claimed. Some of these rectification -- 7 of 8 -- 8 works were carried out by entities to which Mr Anderson was referred by Mr Keenan. Although the person Simon Hughes may not have been qualified to do the work he did, he came across as a common sense assistant charging reasonably. Mr Anderson’s claim for $2,852.50 for rectification costs takes into account, more than reasonably so in any event, the cost of supply of the third slide system. [40] The Tribunal allows a full refund at $13,244.98, attempted rectification at $2,852.50 and application fee of $305.00 – a total of $16,402.48. -- 8 of 8 --