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- Unreported Judgment
Tommic Pty Ltd v Brandt QCATA 7
Tommic Pty Ltd v Brandt  QCATA 7
Tommic Pty Ltd t/as DDJ Australia
Bernard Michael Brandt t/as Bernie’s Disco
13 January 2015
Acting Deputy President Stilgoe OAM
16 January 2015
APPEAL – LEAVE TO APPEAL – MINOR CIVIL DISPUTE – where contracts for supply of jukebox – where jukebox on loan not fit for purpose – where tribunal ordered refund of payments – whether grounds for leave to appeal – whether the respondent is a consumer for the purpose of the Australian Consumer Law – whether applicant entitled to damages for breach of contract
Australian Consumer Law ss 2, 3(1)(a), 3(2), 54, 55, 259, 260
Chambers v Jobling (1986) 7 NSWLR 1 Dearman v Dearman (1908) 7 CLR 549
Fox v Percy (2003) 214 CLR 118
Pickering v McArthur  QCA 294
Thornton v Shoe Lane Parking  2 QB 163
APPEARANCES and REPRESENTATION (if any):
G P Ebert, solicitor of Finemore Walters & Storey
B Brandt in person
REASONS FOR DECISION
- Tommic Pty Ltd builds jukeboxes. Mr Brandt, as his trading name suggests, runs a disco. It is a mobile disco, which Mr Brandt operates from a Mercedes Benz Sprinter.
- On 18 March 2013, Mr Brandt bought an ‘Angel’ jukebox from Tommic at a cost of $3,950. The Angel was too big for Mr Brandt’s Sprinter, so he returned it to Tommic. Tommic agreed to credit $3,950 against a new Angel, built to Mr Brandt’s specifications.
- On 27 March 2013, Mr Brandt also agreed to buy a ‘Fury’ jukebox for $5,604.50. He paid a deposit of $1,050. The balance would be paid by 12 monthly instalments of $379.55. Mr Brandt did not pay any instalments for the Fury.
- Tommic delivered the Fury. Mr Brandt claimed that it did not work properly because the touch screen froze and needed re-setting. He wanted to return the Fury and get a refund of the $5,000 he paid. Tommic refused that offer so Mr Brandt filed a claim for $5,000. Tommic filed a counter application for the balance owing on the Fury. A Magistrate, sitting as a member in the minor civil disputes jurisdiction of the tribunal, ordered Mr Brandt return the Fury and Tommic refund $5,000 to Mr Brandt.
- Tommic wants to appeal that decision. It says the learned Magistrate failed to apply the provisions of the Australian Consumer Law in making his decision. It says that the Fury did not have a major fault. It says that it was never given the opportunity to exercise its express warranty repair rights.
- 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.
- The Australian Consumer Law only applies if a person has acquired goods as a consumer. A person is taken to have acquired goods as a consumer if the amount paid did not exceed $40,000. However, a person is not a consumer if the goods were acquired for re-supply. “Supply” includes hire, Mr Brandt intended to hire the Fury out for parties which, in my view, takes this transaction outside the ambit of the Australian Consumer Law. I asked Mr Ebert, for Tommic, to address me on whether Mr Brandt was a consumer. Mr Ebert submitted that Mr Brandt was a consumer. The parties wanted to proceed on this basis and there were no submissions before me on any other basis. I will, therefore, determine this application as if the Australian Consumer Law applies. However, it should be noted that if, as I have flagged with parties, the Australian Consumer Law does not apply, the result would, for reasons which follow, be the same.
- It is clear from the learned Magistrate’s decision that he did not turn his attention to the question of whether the fault was a “major failure”. It is also clear that he did not consider any argument about the application of Tommic’s standard terms and conditions. Leave to appeal should be granted and the appeal allowed.
… that there was a potential for problem with touch screens … that it does, in fact, affect the reliability for the purpose for which the jukebox was bought …
- Tommic takes issue with that finding. It says that one incident of the screen freezing does not make the Fury unreliable and that the mere possibility of a problem is not enough to justify that finding.
- There was evidence of more than one incident. In an email to Mrs Bahnsen on 14 June 2013, Mr Brandt relays how he turned the Fury on and, again, it froze. He tells Mrs Bahnsen that he reconfigured the Fury ‘again and again and again’. There is an email from Josh Keene dated 9 December 2013, in which he records that, on 5 December 2013, he attempted to operate the Fury and it did not work. Mr Gee, Mr Brandt’s financial adviser, gave evidence that he saw the Fury having the same problem. The evidence can support the learned Magistrate’s finding that there was a fault with the Fury.
- Mr Brandt told the learned Magistrate that there was no point in hiring out a jukebox that required reconfiguring because he would not necessarily be available to do that and he did not think hirers should be expected to reconfigure it. Given that evidence, the learned Magistrate was entitled to find that the Fury was not fit for the disclosed purpose.
- Section 259 of the Australian Consumer Law states that, if a failure to comply with a guarantee is a major failure, the consumer may notify the supplier that the goods are rejected. Mr Brandt did notify Tommic that he rejected the goods. The question is whether the failure was a major failure.
- “Major failure” is defined in s 260. Tommic relies on the definition in s 260(c): ‘that the goods are substantially unfit for the purpose and cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose’. It says, and fresh evidence now suggests, that the fault was easily remedied.
- Unfortunately for Tommic, Mr Brandt has relied, as he is entitled, on a different definition. Section 260(a) provides that it is a major failure if a reasonable consumer, fully acquainted with the nature and extent of the failure, would not have acquired the goods. The definitions in s 260 are in the alternative, not cumulative.
- The learned Magistrate in the finding referred to at  above, implicitly accepted Mr Brandt’s argument. It might have been open to Tommic to suggest that Mr Brandt was not a “reasonable” consumer. Certainly, it was suggested that Mr Brandt was being unreasonable because he refused to return the Fury to Tommic for repair but that was not the relevant time to assess reasonableness. The evidence can support the learned Magistrate’s decision and I can find no reason to come to a different view.
- Section 64 of the Australian Consumer Law provides that a term of a contract that purports to exclude, restrict or modify liability for failure to comply with a guarantee is void. However, s 64A allows a contract to limit liability if the contract is for supply of goods that are not of a kind ordinarily acquired for personal, domestic or household use.
- The parties agree that the Fury was not the kind of good ordinarily acquired for personal, domestic or household use. Tommic therefore argues that its liability to Mr Brandt is varied by its standard terms and conditions.
- A party cannot be bound by terms of a contract it knows nothing about. The parties agreed that Mr Brandt did not receive a copy of the standard terms and conditions before he agreed to buy the Fury. Tommic argued that Mr Brandt never asked for them, so, by implication, it is his fault that he had no knowledge of them. That is not the correct test.
- Mr Ebert argued that the standard terms were incorporated into the contract by a note in the tax invoice. In the description of the goods supplied, this note appears:
12 months rtb parts warranty
- I do not accept that this is sufficient notice that the contract was subject to, and included, over four pages of closely typed terms and conditions. There was no evidence that Tommic drew Mr Brandt’s attention to the terms. The terms were not printed on the reverse of the tax invoice. The notation on the tax invoice was meaningless to an ordinary consumer.
- At the hearing, Mrs Bahnsen argued that the incorporation of the standard terms and conditions was ‘just like buying from Harvey Norman. Everyone knows that there are conditions on the sale’. The difference between Tommic and Harvey Norman is that Harvey Norman does give you a copy of the terms and conditions, on the reverse of the tax invoice. Once a consumer buys from that retailer, there is a presumption that, in future, the buyer has notice of the terms. The Fury was Mr Brandt’s third purchase from Tommic but he had no knowledge of the terms, because Tommic never gave them to him. The evidence does not support a finding that the terms were incorporated by a course of conduct.
- Even if I accepted that the contract was subject to terms and conditions, Tommic faces another problem. The clause on which Tommic wants to rely is in these terms:
Warranty – Sales
Tommic Pty Ltd has the right to assess the age and condition of the alleged faulty goods and to fully test said goods in our workshop before an exchange, credit, repair or refund. …Tommic Pty Ltd total liability in respect of this Warranty against defects is limited at our option to offer to the repair goods; or replace the goods.
- That clause appears in the set of standard terms filed in the appeal. It does not appear in the set of standard terms that were before the learned Magistrate. There is, in fact, no clause in that set which would assist Tommic. Because I cannot be certain which set of standard terms applied to the contract with Mr Brandt, I cannot accept Tommic’s argument that the Australian Consumer Law guarantees were modified by agreement.
- In addition to a right to reject the Fury, Mr Brandt was entitled to compensation for loss or damage suffered because of a failure to comply with the guarantee. The measure of that loss must be the deposit he paid. I agree with the learned Magistrate’s decision to refund $1,050 to Mr Brandt.
- Mr Brandt also cancelled the contract for the new Angel. The learned Magistrate ordered Tommic refund Mr Brandt the purchase price for that transaction. He did not articulate the basis for that refund.
- Mr Brandt could not rely on the Australian Consumer Law to cancel the new Angel contract because there was no demonstrated failure of that jukebox. I agree with Tommic’s submission that Mr Brandt was not entitled to cancel that contract because of a possibility of failure. The proposed use of the Angel was quite different from the Fury; Mr Brandt was going to use it in his party bus. Therefore, his objection that he could not reconfigure the screen if it froze was not a valid objection. Mr Brandt cancelled the contract without a valid reason. Tommic is not entitled to the full purchase price, because it has not delivered the Angel to Mr Brandt. It is entitled to damages for breach of contract.
- At the hearing, I asked Mr Ebert whether the learned Magistrate had evidence of Tommic’s loss. Mr Ebert assured me that there was such evidence on file. I have read every page of the file and carefully considered the transcript. While I accept that Tommic will have a loss of profit on the Angel, that loss is not quantified. While I accept that Tommic has spent time building the Angel, that time is not quantified. Had the Angel been re-sold, damages for loss of profit may have been available. The only losses that I can find is $60 for the purchase of a decal and $400 for the purchase of a special 12” monitor. To that limited extent, the decision of 20 February 2014 should be set aside. Instead, I order Tommic pay Mr Brandt $3,950 less $460, a total of $3,490. Adding the $1,050 for the Fury, Tommic must pay Mr Brandt $4,540 plus a filing fee of $98.
 See Tommic’s invoice 14938 dated 18 March 2013: transcript page 1-9, lines 41 – 47.
 QCAT Act s 142(3)(a)(i).
 Pickering v McArthur  QCA 294 at .
 Australian Consumer Law s 3(1)(a).
 Australian Consumer Law s 3(2)(a).
 Australian Consumer Law s 2.
 Transcript page 1-7, lines 35 – 36.
 Unlike the Australian Consumer Law, the Sale of Goods Act 1896 (Qld) does not require a contract for sale of goods to be between a trader and consumer, but simply that there be a contract of sale between a buyer and seller: see s 4.
 Australian Consumer Law s 54.
 Australian Consumer Law s 55.
 Transcript page 1-61, lines 22 – 26.
 Transcript page 1-30, lines 42 – 46.
 Transcript page 1-12, line 45 to page 1-13 line 5.
 Thornton v Shoe Lane Parking  2 QB 163.
 Australian Consumer Law s 259(4).
- Published Case Name:
Tommic Pty Ltd v Brandt
- Shortened Case Name:
Tommic Pty Ltd v Brandt
 QCATA 7
A/Deputy President Stilgoe OAM
16 Jan 2015