Docherty v Griffith & European Design Pty Ltd [2015] QCAT 280

CITATION: Docherty v Griffith & European Design Pty Ltd [2015] QCAT 280 PARTIES: Travis Wayne Docherty (Applicant) v John Griffith (First Respondent) European Design Pty Ltd (Second Respondent) APPLICATION NUMBER: MCDO62-15 MATTER TYPE: Other minor civil dispute matters HEARING DATE: 15 June 2015 HEARD AT: Southport DECISION OF: Adjudicator Mewing DELIVERED ON: 20 July 2015 DELIVERED AT: Southport ORDERS MADE: 1. The application as a far as it relates to the First Respondent is dismissed; 2. The claim by the Applicant for payment by the Second Respondent of storage fees of $50.00 per week is dismissed; 3. The Second Respondent pay to the Applicant $4,293.39, on or before Friday 14 August 2015, being: a. Refund of the deposit of $4,039.00; b. Interest on the deposit at the rate of five per cent per annum for the period 22 June 2014 to 18 November 2014, being $149.39; and c. QCAT filing costs of $105.00; and 4. The Second Respondent collect the table from the Applicant’s home on or before Friday 14 August 2015 at a time to be agreed between the parties. -- 1 of 9 -- 2 CATCHWORDS: Minor civil dispute - parties – whether correct respondent is sales person or company – whether goods of acceptable quality – whether goods delivered within a reasonable time – whether major failure Queensland Civil and Administrative Tribunal Act 2009 (Qld) ss 11 and 100 Australian Consumer Law ss 2, 3, 36, 54, 64, 259, 260 and 263 Thornton v Shoe Lane Parking [1971] 2 QB 163 APPEARANCES AND REPRESENTATIVES: APPLICANT: Travis Wayne Docherty FIRST RESPONDENT: John Griffith (by telephone) SECOND RESPONDENT: represented by John Griffith (with leave of the Tribunal) (by telephone) REASONS FOR DECISION Claim [1] This application arises out of the purchase by the Applicant, Travis Docherty and his wife Megan Docherty, of a dining table and 12 chairs from European Design Furniture Pty Ltd (‘European Design’). Mr Docherty is claiming a refund of a deposit paid by him to European Design towards the total purchase price of the table and chairs (plus associated amounts) on the basis that: a) The dining table was delivered to him in a damaged condition and an adequate replacement was not available within a reasonable time; and b) The chairs were not delivered by the agreed time. [2] Specifically, in his written submissions Mr Docherty states that he is seeking from Mr Griffith and/or European Design: a) A refund of $4,039.00; b) Interest on that money; c) Storage fees for keeping the damaged table at his home at the rate of $50.00 per week; and d) Reimbursement of the QCAT filing fee of $105.00. -- 2 of 9 -- 3 [3] As requested at the hearing, Mr Docherty is also asking the Tribunal to order the removal of the dining table from his premises at the Respondents’ expense. Parties [4] As an initial matter it is important to nominate the correct respondent to this claim. According to the ‘Order Confirmation’ dated 15 June 2014, the agreement entered into to purchase the table and chairs was between Travis and Megan Docherty as purchasers, and European Design Pty Ltd as seller. [5] Mr Docherty named John Griffith as a co-respondent given Mr Docherty’s apparent belief that Mr Griffith is or was a director of European Design, or was otherwise an owner of the business. It is unsurprising that Mr Docherty held this belief given Mr Griffiths’ apparent control over management and operations at European Design’s showroom and the tone and substance of their email correspondence. Indeed, at the hearing Mr Griffith conducted himself as if he were the owner of the business. [6] A copy of a Current and Historical Company Extract from records of the Australian Securities and Investments Commission as at 11 May 2015 (‘Extract’) tendered into evidence by Mr Docherty1 shows that the sole director of European Designs is Shannon Griffith. According to Mr Griffith, Shannon Griffith is his wife. The Extract indicates that Mr Griffith has never been a director of European Design. [7] Despite Mr Griffith’s apparent control over European Design, the evidence filed by Mr Docherty and presented at the hearing leads to the conclusion that Mr Griffith was merely as an agent for European Design. In that capacity he binds European Design but is not a party to any contract in his personal capacity. [8] Accordingly, the application as far as it relates to Mr Griffith is dismissed. [9] Mr Griffith continued to appear before the tribunal with leave as the nominated representative of European Design. Background [10] On 15 June 2014 Mr Docherty and his wife ordered a dining table and 12 dining chairs from the showroom of European Design in Bundall, selected by reference to sample items on display in the showroom. Mr and Mrs Docherty were told by the sales person that the table was in stock and ready for delivery, but that the chairs would have to be ordered with an estimated delivery time of eight weeks. According to Mr Docherty, the sales person added that the company had a policy of 12 weeks’ maximum delivery time. 1 Exhibit 1. -- 3 of 9 -- 4 [11] The ‘Order Confirmation’ dated 15 June 2014 issued by European Design provides the following description and details: French Dining Table with Rustic Parquetry Top on Pedestal Base: $2,650.00 French Upholstered Dining Chair in Taupe Fabric: $209.00 [each, with 12 chairs ordered] DELIVERY – Gold Coast: $135.00 [12] The total price of the order was $5,293.00 (including GST), for which Mr Docherty paid a deposit of $4,039.00. [13] Mr Docherty claims he was not aware of any terms and conditions imposed by European Design when he placed his order. The Order Confirmation has no printed terms and conditions attached, nor does it incorporate by reference any terms or conditions to be found elsewhere. Mr Griffith asserts on behalf of European Design that the terms and conditions of sale are available on showroom counters, and on the European Design website. Mr Docherty said that he did not recall seeing any terms and conditions on the showroom counter, he was not given any document with terms and conditions by the sales person, nor was he shown the website or told that his purchase would be subject to terms and conditions imposed by European Design. [14] On or around 18 June 2014 the table was delivered to Mr Docherty’s home by delivery drivers employed by or contracted to European Design. On unpacking the table the drivers and Mr Docherty noticed that it was damaged. European Design does not dispute that the table was damaged prior to or during delivery. [15] Mr Docherty requested a replacement table in a telephone call to European Design on the same day, delivery of which was promised within the week. Meanwhile, the delivery drivers told Mr Docherty they were unable to take the damaged table back to European Design and it stayed in Mr Docherty’s home where it remains to this day. [16] On or around 26 August 2014 a new table was delivered to Mr Docherty’s home. As the delivery drivers were unpacking the table Mr Docherty noticed it was orange in colour, whereas the one he had ordered from the showroom sample was brown. He also said the parquetry was different. Based on what Mr Docherty said was a “vastly different” colour, he refused to accept delivery of the replacement table and the delivery drivers took it away. [17] Mr Griffith said in the hearing that Mr Docherty had no right to reject the replacement table as European Design’s terms and conditions allow for a colour variance of up to 20%. There was no evidence presented by European Design they had informed Mr Docherty that they refused to allow him to return the table on that basis at the time he rejected it. Indeed, there was no evidence before the Tribunal that Mr Docherty had any knowledge of any colour variance condition. -- 4 of 9 -- 5 [18] On 1 October 2014 Mr Griffith sent an email to Mr Docherty which stated in part: We currently have an order in the system for 12 chairs that were due for delivery at the end of September. Unfortunately we have not met that timeframe. I understand this is not acceptable however we have had some personnel issues in the factory which has slowed production. Our current ETA for dispatch October 10th with a 30 day time from Jakarta. [19] Curiously, Mr Griffith said at the hearing that he’d had the chairs in his warehouse since “the end of July”, and that he’d told Mr Docherty by telephone of this in August and September but that Mr Docherty refused to accept them as he “didn’t want any more expense until the table was ready”. I do not accept this, and the 1 October email is clearly at odds with Mr Griffith’s claim. Indeed, the evidence before the Tribunal indicated that the first mention to Mr Docherty that the chairs were available for delivery was on 18 November 2014—five months after they were ordered. [20] Meanwhile, numerous emails were exchanged between the parties between 18 and 21 November, among which Mr Griffith acknowledged that the replacement table was “incorrect”,2 and stated that a replacement table “had a schedule of 21 December 2014.”3 [21] On 18 November 2014 Mr Docherty made a written demand for a refund of money paid, plus $1,250.00 in storage fees for “the inconvenience of storing … damaged goods”. Mr Griffith said he was happy to offer a refund within 24 hours after Mr Docherty returned the table to the Bundall store, or European Design staff could collect the table on the following Thursday. Mr Docherty rejected this offer. The sticking point, it seems, was with the timing: Mr Docherty wanted a refund of his money in cash before or at the same time the table was collected from his home. Mr Docherty said he did not trust that he’d get his money back if he gave up the table. [22] Mr Griffith also asked if Mr Docherty would travel to European Design’s Fortitude Valley store to inspect another possible replacement table. Mr Docherty did not appear to respond to this offer, but it is my view that on 18 November 2104 Mr Docherty had rejected the goods as he was entitled to do. [23] Mr Docherty testified at the hearing that the table has delaminated or “bubbled” since this application was filed, so he doesn’t want a replacement table which is likely to do the same. Mr Griffith responded that he could not be held liable for any delaminated because Mr Docherty may have misused the table, or exposed it to sunlit or harsh weather. It is unnecessary for me to consider the delamination of the table and its likely cause given the conclusion I come to below. [24] Mr Docherty now applies to the Tribunal for orders to resolve the matter. 2 Email from Mr Griffith to Mr Docherty, 18 November 2014 at 6.37 pm. 3 Ibid, at 8.27 pm. -- 5 of 9 -- 6 Relevant Legislation [25] QCAT has jurisdiction to hear minor civil disputes.4 A claim such as this, which arises out of a contract between a consumer and a trader, is a minor civil dispute.5 [26] The Applicant’s claim concerns a transaction to which the Australian Consumer Law (“ACL”) applies.6 Section 54 of the ACL provides a statutory guarantee that goods supplied to a consumer in trade of commerce are of acceptable quality. Mr Docherty is a ‘consumer’ for the purposes of the ACL7 and European Design is in ‘trade or commerce.’8 [27] Goods are of acceptable quality if they are acceptable in appearance and finish9 and free from defects10 having regard to the nature and price of the goods, among other considerations.11 [28] Section 36(4)(a) of the ACL provides that a person who accepts payment for goods must supply those goods within the period specified, or if no period is specified, within a reasonable time. Defences under s 36(5) include that failure to supply timely was due to the act or omission of another, or because of acts beyond the person’s control, and that the person took reasonable precautions and exercised due diligence to avoid the delay. [29] The remedies available to a consumer affected by a failure to comply with the ACL are set out at s 259, and turn on whether or not a supplier’s failure to meet one or more guarantees in the ACL is a ‘major’ failure. A major failure arises where the goods at issue would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure, among other things.12 [30] If the failure can be remedied and is not a major failure, the consumer is limited to: a) Requiring the supplier to remedy the failure within a reasonable time; or b) If the supplier remedy the failure within a reasonable time, the consumer can; i) have the failure remedied by someone other than the supplier and seek compensation from the supplier; or ii) reject the goods. 4 Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 11. 5 Ibid, schedule 3. 6 Schedule 2 of the Competition and Consumer Act (Cth) 2010. 7 Australian Consumer Law s 3. 8 Ibid s 2. 9 Ibid s 54(2)(b). 10 Ibid s 54(2)(c). 11 Ibid s 54(3). 12 Ibid s 260. -- 6 of 9 -- 7 [31] Where there has been a major failure, the consumer may (so far as is relevant to this claim) notify the supplier that he or she rejects the goods and the grounds on which he or she rejects them.13 The consumer may also apply to recover damages for any loss or damage suffered 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 the failure.14 Findings [32] I find that the table delivered to Mr Docherty on 22 June 2014 was not of acceptable quality as required by s 54 ACL. It was damaged prior to or during delivery to his home in a prominent and visible area and was therefore not acceptable in appearance or finish. Mr Docherty’s testimony about subsequent delamination of the table has no bearing on this finding. [33] I find that it was not unreasonable of Mr Docherty to reject the replacement table delivered on 26 August 2014. There was no evidence before the Tribunal that Mr Docherty was aware or ought to have been aware of any terms and conditions applicable to the purchase of the table and chairs imposed by European Design—in particular, the allowance of a 20% custom colour variance. Indeed, s 64 of the ACL renders void a term of any contract (or incorporated terms and conditions) to the extent that it purports to exclude, restrict or modify the consumer guarantees in the ACL. Even if the conditions of sale tendered by Mr Griffith at the hearing were not void for contravention of s 64, there was no evidence that Mr Docherty had any notice of those conditions prior to his purchase: A party cannot be bound by terms of a contract it knows nothing about.15 [34] I find that European Design’s failure to comply with s 54 was a major failure. Given the value of the table, it is my view that a reasonable customer acquainted with the extent of the damage would not have acquired the table in that damaged state. [35] Even if my finding about the major failure of s 54 is incorrect, I find that the delay of more than five months for delivery of an acceptable replacement table was a failure of the obligation to supply goods within a reasonable time pursuant to s 36(4)(a). [36] I find that the chairs were not delivered within a reasonable time despite European Design accepting payment for them in contravention of s 36(4)(a). [37] In the case of both the table and the chairs, the defences available under s 36(5) were not made out by European Design. [38] In the case of both the table and the chairs, I find that European Design’s failure to comply with s 36(4)(a) was a major failure because, in my view, a reasonable customer acquainted with the extent of a delay of more than 13 Ibid s 259(3)(a). 14 Ibid s 259(4). 15 Thornton v Shoe Lane Parking [1971] 2 QB 163. -- 7 of 9 -- 8 five months would not have acquired the table or the chairs. I accept Mr Docherty’s testimony that he knew at the time of purchase he may have to wait up to 12 weeks for the chairs, but had he been told he’d have to wait more than 21 weeks (even then with no certain delivery date) he would not have continued with the purchase. [39] I find that Mr Docherty rejected the goods on the grounds of unreasonable delay in his emails of 18 November 2015. [40] I find that the loss suffered by Mr Docherty as a result of the European Design’s failure to comply with the ACL has been the deposit paid to European Design of $4,039.00. [41] Mr Docherty has applied for interest on the deposit. Section 259(4) ACL allows a consumer to recover damages for any loss suffered 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. After careful consideration of the evidence I find that an award of interest is warranted in this case as Mr Docherty has been without his money and without the goods he had bargained for—a loss that was or should have been a reasonably foreseeable consequence of European Designs’ delay. However, I find that the award of interest is restricted to the period 22 June 2014 to 18 November 2014 given Mr Docherty rejected (unreasonably, in my view) Mr Griffith’s offer of a refund on the later of those dates. The interest payable on $4,039.00 for that period of 150 days will be at the rate of five per cent per annum. [42] As inconvenient as it may have been, I do not accept that Mr Docherty has suffered any loss or expense for having to store the table in his home for the past year. He had the opportunity to avail himself of Mr Griffith’s offer on 18 November for the European Designs delivery truck to collect it from his home, which he rejected. He cannot therefore claim storage fees. [43] Mr Docherty has claimed his $105.00 QCAT filing fee. While s 100 of the Queensland Civil and Administrative Tribunal Act provides that each party is to bear its own costs, the Tribunal has discretion under s 103(1) where it is in the interests of justice to do so. I find that it the interests of justice warrant such an award in this case. [44] I find that European Design has an obligation to collect the table from Mr Docherty’s home at European Design’s expense.16 Orders [45] The Orders of the Tribunal in this matter are: (1) The entire claim as far as it relates to the First Respondent is dismissed; (2) The claim by the Application for payment by the Second Respondent of storage fees of $50.00 per week is dismissed; 16 Australian Consumer Law s 263(3). -- 8 of 9 -- 9 (3) The Second Respondent pay to the Applicant $4,293.39, on or before Friday 14 August 2015, being: (a) Refund of the deposit of $4,039.00; (b) Interest on the deposit at the rate of five per cent per annum for the period 22 June 2014 to 18 November 2014, being $149.39; and (c) QCAT filing costs of $105.00; and (4) The Second Respondent collect the table from the Applicant’s home on or before Friday 14 August 2015 at a time to be agreed between the parties. -- 9 of 9 --