Consumer Law Issue Is Donna classed as a consumer and have any of the consumer guarantees been breached by Garden Magic under the Australian Consumer Law and what remedies are available to Donna if breached? Rule s3 ACL states that a consumer as being a person who paid for goods or services under $100,000 or required for personal, domestic, or household use, or consist of a vehicle for commercial use. The goods cannot be used for resale or transformation in the manufacturing process. The purpose of the ACL is to protect consumers from unfair practices of traders. One of the measures used in the ACL is the introduction of consumer guarantees between s54, s55, and s58. These consumer guarantees are implied terms that apply in every single consumer contract and cannot be negotiated out of the contract according to s64. Where s64 states that the consumer guarantees cannot be excluded, restricted, or modified by contract. The guarantees include: S54 – The guarantee as to merchantable quality. Acceptable quality is fit for all purposes in which all goods of that kind are commonly supplied. Acceptable in appearance and finish, free from defects, safe, and durable. David Jones v Willis (1934). S55 – The guarantee to be of fitness to purpose. Certain criteria must be satisfied. Grant v Australian Knitting Mills (1936) 1. Has the consumer made known either or impliedly, the particular purpose of which the goods are required? 2. Has the consumer relied on the supplier’s skill and judgement? 3. Are the goods of a description that was supplied during the trade or commerce? S58 guarantee as to repairs and spare parts. 1. Ensures repair and spare parts are reasonably available for a reasonable period after supply 2. Will not apply if at or before time of sale, written notice is given to consumer that repair of goods/spare parts will not be available. If guarantees are not ensured action against the supplier can be taken, s259 and s260 of the ACL provide remedies for the consumer. S259 – Consumers have the right to act against the supplier of the goods. S260- Test for major failure if a good falls short of consumer guarantee or purpose. Application Donna fits the definition of a consumer, as the retaining wall is for personal use and did not exceed the total of $100,000. Donna is a consumer and is entitled to protection under the ACL. Several consumer guarantees have been broken by Garden Magic. S54 fit for merchantable quality, the retaining wall foundation was inadequate for the weight of the stone and the sandstone was of inferior grade causing the retaining wall to break down quickly. Hence not being fit for merchantable quality. S55 is fit for purpose. The retaining wall’s purpose is to retain soil behind the wall. Though the wall was constructed at the wrong angle to effectively retain soil behind the wall. The wall would have collapsed even without the extra rain. Donna has relied upon the professional judgment of Garden Magic to construct the retaining wall at a particular angle to be most effective in retaining the soil and not deteriorating. S58 is the guarantee to repair and spare parts. Donna was not made aware that the portable gas filters were the last of their kind and that there will be no repairs or spare parts available if the gas filters break down. If the consumer is not made aware of this repair must be guaranteed after a reasonable period of supply. The remedies available to Donna are s259, the right to act against the supplier of goods being Garden Magic. S260 is the test of a major failure of goods, which has been shown in the deterioration of the retaining wall. Donna is entitled to repair, replacement, or refund and compensation for any consequential loss caused by the faulty retaining wall. Conclusion Donna is classed as a consumer under the ACL, and Garden Magic has breached several consumer guarantees being s54, s55, and s58 of the ACL. The remedies available to Donna are the right to act against Garden Magic and is entitled to repair, replacement, or refund and compensation for any consequential loss caused by the faulty retaining wall. Tort of Negligence Misstatements Issue Does the action or conduct of Hawkesbury City Council amount to negligent misstatement? Rule Negligent misstatement is defined as a statement of fact, advice or opinion made in business that is relied upon by another, but which is inaccurate or misleading.’ Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] established that the law will imply a duty of care in the making of statements. This is not restricted to professionals but applies to information given in serious circumstances. Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) [1981] 1. The criteria if there is a duty of care A duty of care, and: regard given to all the circumstances and the relationship between parties, advice or information was requested for a serious purpose and/or given in serious circumstances (a business setting). OR 2. Defendant knew or ought to have known that it would be relied on, and it was reasonable for Plaintiff to rely on it Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] - Hedley Byrne sued Heller because negligence had caused the losses. Held not to be liable, however, each member of the court said this was only because of the disclaimer. Also stated that a duty of care can arise concerning careless statements that cause pure economic loss Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) [1981] - It was held that the council owed a duty of care to the plaintiffs and was accordingly liable for the plaintiff’s losses. The High Court held that the duty of care can arise concerning the giving of advice or information. Application Denise requested advice for the serious purpose of buying the heritage-listed building as a future shop, as she needed to know if the Council would allow the use of the heritage building to be used commercially as it previously was for a post office. This will impact her financial situation heavily as she is unable to start her business and once, she sells the building as it can only be used for residential purposes the price will be a lot lower as the building is near a noisy train station hence Denise is losing a substantial amount of money on the property due to the negligent misstatement made by Hawkesbury City Council. Denise sought advice from the Hawkesbury City Council in a serious business setting. Hawkesbury City Council knew that Denise was seeking this information for a serious purpose and that it was reasonable for Denise to rely on it for business purposes. There was no disclaimer made by the Council thus it is established that Hawkesbury City Council owes a duty of care to Denise. This results in a duty of care being breached as the statement have been made recklessly and incorrectly thus Denise has suffered financial loss. The harm suffered by Denise was not foreseeable for her to see as she had a professional statement, she believed to be correct. Conclusion Overall Hawkesbury City Council was liable for negligent misstatement towards Denise and the degradation of her finances. Hence the likelihood of Denise being successful of bringing action against the Hawkesbury City Council for negligent misstatement is very high. Tort of Negligence Issue Is Stuart liable for the damages that have been caused by himself and Andrew onto Katy’s greenhouse and Sarah’s potted plants. Rule Negligence is defined as - omitting to do something that a reasonable person would do; or doing something that a prudent and reasonable person would not do; and - it is the failure to exercise reasonable care and skill Elements of negligence: - Defendant owed a duty of care - Defendant breached a duty of care - Damage has been suffered as a direct result of the breach - Defences established by the defendant - Court will decide compensation the plaintiff will recover The establishing of negligence and duty of care - Donoghue v Stevenson [1932] Negligence can be determined with certain criteria: - The neighbour test - Foreseeability - Proximity test - Vulnerability and control Neighbour test - ‘You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour’ Lord Atkin in Donoghue v Stevenson [1932]. Foreseeability - Would a reasonable person foresee that the defendant’s act could cause damage? Caltex Refineries (Qld) Pty Ltd v Stavar [2009] NSWCA 258 Vulnerability and control - Was the plaintiff in a vulnerable position? - Defendant in a controlling position (Green v Country Rugby Football League of NSW [2008] - Plaintiff reliant on the defendant: Rogers v Whitaker [1992] Proximity - Explain. whether the parties are so proximate in their relationship that one of them is under a duty not to cause foreseeable harm to the other. Vicarious Liability - An employer will be liable for an employee’s negligent act where it occurs within the course of their employment. Deatons Pty Ltd v Flew Application Stuart did owe Katy a Duty of care, though not Sarah. Sarah was not owed a duty of care as there was a foreseeable risk seen by Stuart. Stuart warned Sarah of the risk and it is her fault that she did not move her pot plants. Katy is owed a duty of care. There was a foreseeable risk of items falling when the wind started to pick up. The reasonable person would have taken precautions or not have worked once the wind was reaching a certain level. Stuart is a professional in roofing and is ought to have known the risk whilst working in the wind. The risk is significant as it could have caused harm to individuals, and it did cause harm to property. There was loss suffered as Katy’s greenhouse suffered serious damage shattering the glass. Seen with the but for test determines whether the harm suffered by a Katy was caused by the breach of the Stuarts duty, on the basis that Katy would not have suffered harm 'but for' the Stuarts breach. Which proves that Katy would not have suffered damages to her greenhouse if Stuart stopped operating once the wind began. The harm of items flying off the roof and Andrew losing balance is foreseeable as the wind is pushing against Andrew and the items causing an unstable environment such as a roof being even more unstable. The vicarious liability of Andrew losing balance is placed on Stuart due to this being in a work scenario and Stuart is the employer of Andrew. Stuart does have a mitigating factor making up partial defences such as contributory negligence. Since it was partially out of his control the damage was caused and it was due to the wind Stuart can claim contributory negligence to the damages that have been caused to Katy’s greenhouse. Conclusion Overall, Stuart is liable for the damages caused to Katy’s greenhouse as damages to the property are foreseeable when the wind began and should have been halted. Contract Law QA Issue Was a contract formed between Arthur and MGL based on the time his car repairs needed to be finished by? Rule Contract is defined by “an agreement concerning promises made between two or more parties with the intention of creating certain legal rights and obligations upon the parties to that agreement which shall be enforceable in a court of law.” Exclusion clause is defined as clause in a contract or a term in a notice which appears to exclude or restrict a liability or a legal duty which would otherwise arise. Three elements of a contract: 1. Intention to create legal relations 2. Agreement 3. Consideration Components of a contract: Express Intention - Consider terms that expressly and clearly state the parties’ intentions. Almost invariably expressed in the negative. Masters v Cameron (1954) 91 CLR 353 Implied Intention - The courts must determine objectively whether the parties intended the agreement to be legally enforceable. Commercial relationships automatically have the presumed intention to be legally bound. Edwards v Skyways Ltd [1964] 1 WLR 349 Application The contract between Arthur and MGL was breached which led to Arthur being unable to purchase land. There were no exclusion clauses provided such as sufficient notice as there were no signed documents. The courts will deem there to have been an automatic contract made between Arthur and MGL as it is a commercial setting being an automatic intention to create legal relations. The contract was complete as the three elements of a contract were possessed between both parties being an intention to create legal relations which is presumed commercially, the agreement between both parties to have the repairs finished by 9am the next day and the consideration made between Arthur and MGL. Due to the implied intention in the commercial setting of Arthur and MGL, there will be remedies in Arthur’s favour as he suffered financial damages as MGL breached the contract. Arthur will most likely be payed a large sum of money by MGL as he was unable to purchase the land he wanted. Conclusion MGL cannot validly rely on any exclusion clauses as there were none in place. Hence Arthur can take legal action against MGL successfully for a breach of contract. QB The advice to Arthur would be different if MGL had placed that sign outside of their premises. The sign would act as an exclusion clause being sufficient notice provided towards the consumer being Arthur. This exclusion clause will limit the liability MGL possesses. Though there in an exclusion clause it will not void the contract made between Arthur and MGL to finish his car at a certain time it would only void the losses Arthur will make with purchasing the land. Hence Arthur will receive less compensation for his losses if any. There will still be the implied intention. - Edwards v Skyways Ltd [1964] 1 WLR 349 Due to the implied intention MGL will not be able to break the agreement on not finishing the car on time without repercussions as there is still a contract formed on the finishing of Arthurs car at 9am.
