Introduction to Legal Problem Solving - Part 4 – Using Statutes Introduction to Legal Problem Solving - Topic 5 Glenn Dennett

Source of legal rights Contract Torts Statute

How to Use Statutes We will use the Australian Consumer Law to illustrate how we use statutes to solve legal problems The Australian Consumer Law is complex so we will give just you some basic concepts

Australian Consumer Law The Australian Consumer Law (ACL) is contained in Schedule 2 of the Competition and Consumer Act 2010 (Cth) http://www.austlii.edu.au/cgi-bin/viewdb/au/legis/cth/consol_act/caca2010265/ We will just be looking at some of the Consumer Guarantees contained in the ACL

How to read a statute Misleading or deceptive conduct E.g. Australian Consumer Law s18 Misleading or deceptive conduct             18  (1)  A person shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.             

Elements of a section: Person In trade or commerce Engage in conduct Misleading or deceptive Each element is defined by legislation (definitions section or an interpretation act) or by courts (case law.)

Overview of ACL Chapter One Chapter Two – General Consumer Protections Introductory provisions, definitions etc Chapter Two – General Consumer Protections Misleading and deceptive conduct (s52); Unconscionable conduct(Part IVA); Unfair contract terms (New – cf Victoria) Chapter Three – Specific protections Consumer guarantees (Part V Div 2/2A); Product Safety (Part VA); Product liability (Part V Div 1A) Chapter Four – Criminal offences For breach of Chapter 3 (Part VC) Chapter Five – Enforcement and Remedies (Part VI)

Consumer Guarantees Chapter 3, Part 3‑2--Consumer Transactions Division 1--Consumer guarantees Subdivision A--Guarantees relating to the supply of goods Subdivision B- Guarantees relating to the supply of services Subdivision C--Guarantees not to be excluded etc. by contract Subdivision D--Miscellaneous

Subdivision A: Goods Guarantee as to: s51 - title s52 -undisturbed possession s53 - undisclosed securities s54 - acceptable quality s55 - fitness for any disclosed purpose s56 - supply of goods by description s57 - supply of goods by sample s58- repairs and spare parts s59 - express warranties

Overview http://www.abc.net.au/tv/thecheckout/clips/# Returning goods

s56 Guarantee relating to the supply of goods by description  56 (1)  If:     (a)  a person supplies, in trade or commerce, goods by description to a consumer; and    (b)  the supply does not occur by way of sale by auction; there is a guarantee that the goods correspond with the description.

S56 Elements Common Elements: By Description Person/corporation Supply Trade or commerce Goods Consumer By Description

Trade or commerce Section 2 - trade or commerce means:                      (a)  trade or commerce within Australia; or                      (b)  trade or commerce between Australia and places outside Australia; and includes any business or professional activity (whether or not carried on for profit). And case law

Goods Section 2 - goods includes:                      (a)  ships, aircraft and other vehicles; and                      (b)  animals, including fish; and                      (c)  minerals, trees and crops, whether on, under or attached to land or not; and                      (d)  gas and electricity; and                      (e)  computer software; and                       (f)  second‑hand goods; and                      (g)  any component part of, or accessory to, goods.

Consumer Section 3 (1)  A person is taken to have acquired particular goods as a consumer if, and only if:                      (a)  the amount paid or payable for the goods, as worked out under subsections (4) to (9), did not exceed:                               (i)  $40,000; or ….                       (b)  the goods were of a kind ordinarily acquired for personal, domestic or household use or consumption; or                      (c)  the goods consisted of a vehicle or trailer acquired for use principally in the transport of goods on public roads.       (2)  However, subsection (1) does not apply if the person acquired the goods, or held himself or herself out as acquiring the goods:                      (a)  for the purpose of re‑supply; or                      (b)  for the purpose of using them up or transforming them, in trade or commerce:                               (i)  in the course of a process of production or manufacture; or                              (ii)  in the course of repairing or treating other goods or fixtures on land.

‘ordinarily acquired for personal, domestic or household use or consumption’ Not just personal use Business use as well e.g. Carpet in a nightclub (Carpet Call v Chan (1987) ATPR (Digest) 46-025) Not just goods of a kind used in households Commercial versions of domestic products as well E.g. Commercial grade, decoratively coated insulation in Bunnings warehouses (Bunnings v Laminex [2006] FCA 682) Mixed use? Common sense approach E.g even though ostrich egg incubator could be used for home hobbies, if used commercially not consumer (Crago v Multiquip (1998) ATPR 41-620 )

Case law UK Sale of Goods Act Sale of Goods Act 1923 (NSW) Trade Practices Act 1974 (Cth) Presumptions in statutory interpretation

Case Law Ashington Piggeries v Christopher Hill [1971] 1AllER847 Grant v Australian Knitting Mills (1936) 54 CLR 49 Sale/Correspondence with description

Ashington Piggeries case: Viscount Dilhorne: “Did the presence of DMNA merely affect the quality of the herring meal or did it make a difference in kind? If the former, then there was no failure to deliver in accordance with the description. If the latter, there was.”

s55 Guarantee as to fitness for any disclosed purpose s55(1) If: (a) a person (the supplier) 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 reasonably fit for any disclosed purpose, and for any purpose for which the supplier represents that they are reasonably fit. (2) A disclosed purpose is a particular purpose (whether or not that purpose is a purpose for which the goods are commonly supplied) for which the goods are being acquired by the consumer and that: (a) the consumer makes known, expressly or by implication, to: (i) the supplier; or (ii) a person by whom any prior negotiations or arrangements in relation to the acquisition of the goods were conducted or made; or (b) the consumer makes known to the manufacturer of the goods either directly or through the supplier or the person referred to in paragraph (a)(ii). (3) This section does not apply if the circumstances show that the consumer did not rely on, or that it was unreasonable for the consumer to rely on, the skill or judgment of the supplier, the person referred to in subsection (2)(a)(ii) or the manufacturer, as the case may be.

S55: Elements Common elements Particular purpose made known by consumer Consumer relied on skill/judgement of supplier Reasonable to rely

Case Law Purpose made known? Reliance on seller’s judgement? Obvious purpose? Underpants – Grant v Australian Knitting Mills Reliance on seller’s judgement? Ashington Piggeries v Christopher Hill

S54: Guarantee as to acceptable quality              s54(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).

S54: Guarantee as to acceptable quality (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.

Case Law Carpet Call Pty Ltd v Chan (1987) ATPR (Digest) 46-025 ‘fit for all the purposes for which goods of that kind are commonly supplied’ Rasell v. Garden City Vinyl and Carpet Centre Pty Ltd (1991) ATPR 41-152 Carpet Call Pty Ltd v Chan (1987) ATPR (Digest) 46-025

Remedies Breach of contract: Breach of term implied into the contract: Remedies on the contract e.g damages Breach of term implied into the contract: Sale of Goods Act Breach of statutory guarantee Australian Consumer Law (ACL) Eg. Remedies provided by – s261 ACL - repair, replace or refund (3R’s) SOURCE OF RIGHTS GOVERNS THE REMEDIES

Flooring: Mavis was particularly interested in flooring as she had difficulties keeping her slate tiles clean. She searched for low maintenance flooring and after extensive shopping decided on single sheet vinyl flooring. She saw just the thing at Discount Lino Barn, close to Kylie’s home. Kylie indicated that she didn’t share her mother’s preference for vinyl flooring as it was cold underfoot and had suggested kitchen carpet. Kylie and Mavis spoke to Mike at Discount Lino Barn who suggested under-floor heating could address Kylie’s temperature issues. Kylie provided details of the under floor heating options while her mother left the conference room to offer slices of her coffee cake to the other staff….

She is also angry about the flooring she has had installed She is also angry about the flooring she has had installed. Despite Kylie’s protests she went with the single sheet vinyl, and did not have under floor heating installed. The vinyl, while easier to clean than the slate, is marking and scuffing badly however. She has only had it down 6 months, and already there are a number of wear marks. Her cupcake classes – which she runs 5 times a week and more often in school holidays – are now so popular that she has at least 20 students per class. Because of her renovations she has room for them all around her lovely new island bench, but the vinyl around the island bench almost looks like a race track.

It is as if her students have worn a path around the bench – and in only 6 months. The vinyl was quite expensive – as she had heavy grade domestic installed – but Mavis is very unhappy. She hasn’t yet paid the bill for the vinyl as she has been arguing with the company. They are, according to Mavis, now getting nasty, and want their $45,000 immediately.

Oven Mavis returned to the conference room. She advised that she had had to make a large coffee cake that morning, even though her preference would have been to make cup-cakes. In fact, one of her legal problems was her cup-cake oven. Cake Cookers is a specialist retailer which sells products designed for those who like to cook cakes. It retails a number of specialist pans and other baking utensils – many imported from America and not readily available in Australia - as well as a special range of cake ovens.

They are located in Broome – and Mavis lives in NSW, but Cake Cookers sells throughout Australia by catalogue. Mavis wanted a special cake oven in her new kitchen. She saw an oven that looked perfect for her in their catalogue – the picture showed 8 slide out patty pan trays instead of oven trays – exactly what she wanted.

She rang the store and spoke to Cathy She rang the store and spoke to Cathy. She told Cathy all about her cupcakes, her favourite recipes, and her interest in the patty pan oven in their catalogue. Cathy told her that the patty pan oven had eight slide out patty pan holders – instead of oven racks – and that each patty pan holder would take one dozen patty pans. Even better, they came with self cleaning silicone inserts. Mavis was delighted about the self cleaning but concerned that each tray would only take one dozen patty pans. Although after discussion with Cathy, she was convinced that the overall capacity of the oven was appropriate, and so she placed an order….

Mavis advised that even if she had known about the cake order she would have had difficulty fulfilling it because of problems with her newly installed cake oven. When the oven arrived she saw that instead of Australian sized delicate patty pan holders, the cake trays were American size muffin holders – and two trays were even jumbo sized Texas muffin size holders. This is not what Mavis wanted at all. Mavis rang Cathy and told her the oven was not what she had wanted at all, and not suitable for the cakes in which she specialised. Cathy said she was sorry that Mavis was disappointed, but there is nothing that they can do about it now. Mavis wants to know if she still has to pay the $8,000 for the special cake oven.

The End