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Peregian Beach Hardware Pty Ltd v Scott QCATA 174
Peregian Beach Hardware Pty Ltd v Scott  QCATA 174
Peregian Beach Hardware Pty Ltd
On the papers
Senior Member Stilgoe OAM
11 December 2015
APPEAL – LEAVE TO APPEAL – MINOR CIVIL DISPUTE – CONSUMER CLAIM – where purchase of building panels – where panels warped – where purchaser claimed damages arising from attempt to install panels – where tribunal applied Australian Consumer Law – whether purchaser a consumer – whether Australian Consumer Law applied – whether Australian Consumer Law applied correctly – whether grounds for leave to appeal
Australian Consumer Law ss 3(2), 3(5), 54, 55, 56
Fox v Percy (2003) 214 CLR 118
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act).
REASONS FOR DECISION
- In February 2014, Kevin and Katrina Scott were doing a job on the shower block at the Noosa Caravan Park. The park owners did not want grouted walls in the shower block so Mr and Ms Scott looked for an alternative solution. As a result, Peregian Beach Hardware Pty Ltd supplied 33 sheets of Laminex Aquapanel.
- Mr and Ms Scott installed the Aquapanel but they experienced problems. Some of the panels were bowed and, according to Mr and Ms Scott, the panels would not adhere to the surface. They removed the panels and tiled the area instead.
- Mr and Ms Scott didn’t pay Peregian Beach Hardware for the Aquapanel. Peregian Beach Hardware received a credit from Laminex and then filed a claim in the tribunal for $746.91, the balance owing on the account. Mr and Ms Scott filed a counterclaim for damages for the costs involved in removing the Aquapanel and tiling the shower block. Two Justices of the Peace, sitting in the minor disputes jurisdiction of the tribunal, dismissed the claim by Peregian Beach Hardware and ordered that it pay part of the counterclaim.
- Peregian Beach Hardware wants to appeal that decision. Because this is an appeal from a decision of the tribunal in its minor civil disputes jurisdiction, leave is necessary. Leave to appeal will usually be granted where there is a reasonable argument that the decision is attended by error, and an appeal is necessary to correct a substantial injustice to the applicant caused by that error.
- Peregian Beach Hardware says that the tribunal incorrectly found in favour of Mr and Ms Scott despite the fact that the Aquapanel was compromised by incorrect installation. It says the tribunal did not apply the facts to the law but simply repeated sections of the Australian Consumer Law before deciding in favour of Mr and Ms Scott. It says that the tribunal did not properly have regard to evidence that Mr and Ms Scott did not install the Aquapanel correctly.
Australian Consumer Law
- A large part of the tribunal’s decision is taken up with a discussion of the Australian Consumer Law. That is a necessary part of the decision because it was important for the tribunal to decide whether the Australian Consumer Law applied and, if it did, what remedy was available to Mr and Ms Scott.
- As the tribunal correctly identified, the first step in the application of the Australian Consumer Law is to decide whether Mr and Ms Scott were consumers within the scope of section 3(1) of the Australian Consumer Law.
- The tribunal found, correctly, that a person is a consumer if the amount [paid for the goods] is less than $40,000, or the goods are of a kind ordinarily required (sic) for personal domestic or household use.
- The invoice for the Aquapanel was $4,306.66, under the threshold of $40,000, so one would have thought that the tribunal was satisfied that Mr and Ms Scott were consumers. Inexplicably, however, the tribunal found that this definition did not apply to Mr and Ms Scott. I can only assume, because the reasons are not clear, that the tribunal read the definitions in the Australian Consumer Law as cumulative: that the price paid must be under $40,000 and ordinarily acquired for personal domestic or household use. That interpretation ignores the use of the conjunctive ‘or’ in the definition. I am satisfied that Mr and Ms Scott were consumers because the price payable for the Aquapanel was less than $40,000.
- Section 3(2)(b)(ii) of the Australian Consumer Law also provides that a person is not a consumer if the goods are acquired for the purpose of using them up or transforming them in trade or commerce in the course of repairing or treating other goods or fixtures on the land. Equally inexplicably, the tribunal found that this section “saved” Mr and Ms Scott because it did apply.
- If the section did apply then, the opposite conclusion must be drawn; Mr and Ms Scott were not consumers because they bought goods for the purpose of using them up in the course of repairing or treating fixtures on land.
- The tribunal’s decision raises the difficult issue of what is meant by “using them up”. There is no doubt that Mr and Ms Scott used the Aquapanel but it is less clear whether they ‘used [the Aquapanel] up’.
- Some goods, such as glues and paint, are clearly ‘used up’. Some goods, such as windows and doors, probably retain their character even when incorporated into a building and, therefore, are not ‘used up’. Goods such as Aquapanel may or may not be ‘used up’ when incorporated into a building. Because the Australian Consumer Law requires the test to be applied at the time of acquisition, I am inclined to the view that Mr and Ms Scott acquired the Aquapanel for the purpose of using them up in the construction of the Noosa Caravan Park shower block. Therefore, I find that Mr and Ms Scott were not consumers for the purpose of the Australian Consumer Law.
- The tribunal also found that Mr and Ms Scott were consumers under s 3(5) of the Australian Consumer Law. That section provides a mechanism for deciding whether the supply of goods falls within the $40,000 threshold when a party purchases both goods and services. Mr and Ms Scott did not purchase services from Peregian Beach Hardware. The tribunal erred in applying s 3(5).
- Because I have found that Mr and Ms Scott were not consumers, the consumer guarantees under Part 3-2, Division 1 of the Australian Consumer Law do not apply. The tribunal’s reliance on s 54 was, therefore, in error. The tribunal also relied on s 61 of the Australian Consumer Law. That section relates to the supply of services. As I have already identified, Peregian Beach Hardware did not supply services to Mr and Ms Scott. The section cannot apply.
- Even if Mr and Ms Scott are consumers and the Australian Consumer Law does apply, the tribunal was still in error. Section 54(2) sets out the circumstances in which goods will be of an acceptable quality. The tribunal acknowledged sections 54(a), (c) and (e) but did not have regard to the balance of the section:
…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 tribunal did not turn its mind to s 54(3) as it was required to do.
- The tribunal also referred to s 56, which deals with a sale by description. A sale by description is ‘I will sell you 100kg of Arabica coffee beans’. If the buyer receives 100 kg of Robusta coffee beans, then there is a breach of s 55.
- With respect to the tribunal, a sale by description is not ‘…this is what we want and this is what we want it to do’. A sale of that nature would fall under s 55 – a guarantee as to fitness for a disclosed purpose. The tribunal did not analyse the evidence to see whether there was a disclosed purpose. The tribunal did not turn its mind to whether Mr and Ms Scott relied on the skill or judgment of Peregian Beach Hardware, as is required under s 55(3).
- If, as I have determined, Mr and Ms Scott are not consumers, their rights and remedies lie in the Sale of Goods Act 1896 (Qld).
- Leave to appeal should be granted, and the appeal allowed. Because the tribunal applied the wrong law and the wrong test, the proceeding should be returned to the tribunal for rehearing before a different panel.
- Published Case Name:
Peregian Beach Hardware Pty Ltd v Scott
- Shortened Case Name:
Peregian Beach Hardware Pty Ltd v Scott
 QCATA 174
Senior Member Stilgoe OAM
11 Dec 2015