LAWS 3l37 AUSTRALlAN

CONSUMER LAW
FlNAL RESEARCH PAPER
SUMMER 20l3
Question 2:
Discuss the Consumer Guarantees under the Australian
Consumer Law and give reasons why the regime will
improve consumer redress.
BY: PANDELlS (PETER) TlLlAKOS
z3253l82
TO: DEBORAH HEALEY
WORD COUNT:
The implementation of the Consumer and Competition Act 2010 Cth!CCA!, and
specifically the consumer guarantee provisions within Schedule l of the Act, is regarded,
from a wide array of socio-legal academics, as a "revolutionary enactments monumentally
altering the consumer law landscape
1
". This overwhelming characterisation has chiefly
been directed at the "ground#$rea%ing developments made in the consumer guarantee and
redress provisions"
2
which have served to significantly enhance consumer rights and
remedial options. From a holistic perspective, consumer guarantees provide end users
with a comprehensive set of rights for the goods and services they acquire. Under the prior
legislative scheme, namely the &rade 'ractices Act 1()* Cth! TPA, consumers were
afforded "minimal rights with regards to issues they encountered with the purchase o+ their
goods...,and- e++ectively had to rely on implied conditions in contract law in order to receive
remedial support"
3
. The introduction of the ACL however has in avertedly provided
consumers with definitive consumer guarantees which will have the benefit of providing
statutory protections and remedies for any breaches by suppliers and/or manufacturers. ln
addition to the consolidation of legislative guarantees, the ACL managed to evolve the
consumer law regime by providing a single comprehensive series of laws which differed to
the prior situation where "each state upheld its own uni.ue consumer law
provisos...causing widespread con+usion +or consumers and $usinesses ali%e"
*
. Aside from
analysing these specific evolving aspects of consumer law within Australia, this research
paper will endeavour to discuss the consumer guarantees relating to acceptable quality,
fitness for purpose, matching description, sample/ demonstration model and the
requirement to ensure appropriate repair facilities or spare parts. Furthermore, a great
range of academic opinion will be incorporated to address the reasons why consumer
redress will improve under the current ACL with particular reference to the implementation
of clearer redress options through the minor/major failure distinction and the ability for
consumers to now seek compensation from manufacturers with greater ease.
1
Brown, A. (20l0) Consumer 'rotection Law in Australian/ Lexis Asia Pacific Publications: Canberra, Australia.
2
lbid, pg. l2.
3
lbid, pg. l4.
4
Rees, A. (20l0) Are you 0eing 1erved2 3ew Consumer Guarantees +or 1ervices, Melbourne University Law Review: Melbourne, Australia.
Throughout the entirety of Professor Anne Rees publication Are You Being Served? New
Consumer Guarantees for Services (20l0)
5
, the learned academic characterises the
4dynamic nature5
6
of the new regime through its ability to 4amend prior &'A provisions
relating to implied warranties +or consumer guarantees/ ,which were- grey7mur%y7
un+avoura$le +or consumers/ ,into something- that could de+initively sa+eguard the end
user5
)
. Under the preceding TPA, the provisions relating to consumer guarantees
represented 4a legislative implication5
8
insinuating several specified warranties or
conditions. Providing the individual could be categorised as a 4consumer in relation to
particular goods5
(
/ assurance was inferred with regards to 4title/ .uiet possession/ supply
$y description/ .uality or +itness and supply $y sample5
10
. Any attempts by a corporation to
restrict or modify liability within a contract for breach of one of the implied warranties would
make the agreement void. ln the event where a supplier contravened an inferred term, the
end user would potentially have a claim against the corporation for a breach of contract.
Whilst Rees acknowledges the 4legislations attempts to provide certain sa+eguards and
redress options to consumers5
11
/ the learned author felt obliged to 4comply with the
'roductivity Commissions perspective outlined in the 2008 9eview o+ Australia5s
Consumer 'olicy :ramewor%5
12
. This essentially characterised Australia's need to adopt a
system of statutory consumer guarantees to 4$etter assist; provide legislative grounds +or
redress options5
1<
. Such a recommendation became one of the 4shining changes in the
new regime5 which manifested itself in the newly introduced CCA/ and more specifically in
s5l-9 of Schedule 2, through the implementation of definitive consumer guarantees. Whilst
the classification of a consumer in the ACL mirrors that under the TPA, it became
legislatively grounded that any term in a contract that purported to exclude, restrict or
modify liability for breach of a consumer guarantee became void. ln addition to this, the
consumer guarantees were now ascribed with a statutory guarantee status ensuring
consumers would be legislatively protected if their goods fell within the realm of s5l-9
Schedule 2 ACL. Rees acknowledges this alteration to the regime as specifically inclined
to ensure consumers will have the benefit of statutory remedies for a breach of the
consumer guarantees, instead of relying upon a breach of contract claim. A further benefit
to consumers facilitated by the legislative consolidation of consumer guarantees is the fact
that consumers are now able to recover damages for a breach of any guarantee providing
that it was reasonably foreseeable that the consumer would suffer. This ideological stance
represents a wider right than the position under contract law
l4
which requires the losses to
have reasonably been in the contemplation of the parties.
5
Rees, A. (20l0) Are you 0eing 1erved2 3ew Consumer Guarantees +or 1ervices, Melbourne University Law Review: Melbourne, Australia.
6
lbid, pg. l20.
7
lbid, pg. l20.
8
lbid, pg. l28.
9
A person (including a corporation) will, subject to certain exceptions, be a "consumer" in relation to particular goods and services if: (a) the goods or services are priced at $40,000 or less; or (b) the goods or services
are priced in excess of $40,000 but are of a kind ordinarily acquired for personal, domestic or household use or consumption; and (c) in the case of goods, they are not purchased for either re-supply or use in business
as part of the production or manufacture process.
10
Sloan, S (20ll) Consumer Guarantees = Changes to the &rade 'ractices Act, DibbsBarker Publications: Sydney, Australia.
11
Rees, A. (20l0) Are you 0eing 1erved2 3ew Consumer Guarantees +or 1ervices, Melbourne University Law Review: Melbourne, Australia.
12
lbid, pg. l49.
13
lbid, pg. l49.
14
lbid, 'breach of an lmplied Warranty'.
Taking into consideration the learned opinions of Westmoreland and Hunt in The New
Consumer Guarantee Regime Overview When a Consumer is Entitled to Refund or
Replacement (20ll), it is evident to notice the fact that under the new Australian
Consumer Law regime 4all Australian consumers will have the same rights and protections
throughout Australia;>ust as $usinesses will have the same o$ligations and
responsi$ilities5
1?
. Prior to the commencement of the ACL
l6
, the TPA, and in particular Pt V
Divs 2 and 2A, created a series of conditions and warranties that were implied into
consumer contracts. These provisos were 4endorsed theoretically5 by the inclusion of
statutory rights of action enabling consumers to seek compensation directly from
manufacturers of faulty goods without 4the need to rely on a contractual relationship with
the producer5
1)
. Aside from the federal regulations governing consumer protections and
transactions, it is also evident to notice the 4simultaneous application o+ an additional 20
1tate and &erritory consumer laws which di++ered $etween each >urisdiction5
18
. The
respective amalgam of such 4a multiplicity; ,o+- wide ranging directives5/ led the
Productivity Commission's 2008 9eview o+ Australia5s Consumer 'olicy :ramewor% to
conclude that 4many minor di++erences ,in +act- e@isted $etween the laws o+ Australian
>urisdictions; creating additional costs +or $usinesses and con+usion +or consumers5
1(
.
This ideological standpoint was further advanced by the 2009 Commonwealth Consumer
Affairs Advisory Council (CCAAC) report titled Consumer 9ights: 9e+orming 1tatutory
Amplied Conditions and Barranties which noted 4the current range and lac% o+ uni+ormity o+
Australian laws on implied conditions and warranties leads to con+usion and uncertainty;
+or consumers7 $usinesses5
20
. Professor Corones in his publication Consumer Guarantees
in Australia: Putting an End to the Blame Game(2009) was typically critical of this
consumer rights conundrum and utilised the 4perple@ing predicament in the nations
capital;,were- ? separate laws
21
operated7 all aimed $roadly at the same thing5
22
to
highlight the complexities consumers and businesses faced in determining their rights. The
requisite course of action detailed in the CCAAC outlined the necessity of facilitating 4a
single/ uni+orm national law to ma%e it simpler/ easier and clearer +or consumers to
understand and en+orce their rights5
2<
. These recommendations were transposed to the
contemporary ACL provisions summarised in Schedule 2 CCA which were modelled on
the consumer guarantees regime contained in the New Zealand Consumer Guarantees
Act 1((< (NZ)
24
. Under these provisions, a single law uniformly enforced across Australia
would allow for simpler and clearer provisions mirroring the former TPA act and the earlier
State and Territory Fair Trading Acts. Subsequently, court and tribunals across Australia
will be able to apply the same law to consumer disputes allowing for clearer avenues of
redress and greater consistency in outcomes irrespective of where the dispute occurs or
where the court or tribunal is located. Businesses will also be able to profit from these
developments as they will only have to comply with one law during trade no matter where
in Australia a business is located or where a transaction takes place.
15
Westmoreland, R & Hunt, D. (20ll) &he 3ew Consumer Guarantee 9egime Cverview = Bhen a Consumer is Dntitled to 9e+und or 9eplacement, Penguin Publications: Melbourne, Australia.
16
Ch 3, Pt 3-2 Div l.
17
Brody, G (20l0) Consumer 'rotection Legislation, Fitzroy Legal Services Publications: Melbourne, Australia.
18
Marie, J.P (20ll) &he 3ew Consumer Guarantee Law and the 9easons +or 9eplacing the 9egime o+ 1tatutory Amplied &erms in Consumer &ransactions, 35 Melbourne University Law Review 252.
19
lbid.
20
Commonwealth Consumer Affairs Advisory Council (CCAAC) report Consumer 9ights: 9e+orming 1tatutory Amplied Conditions and Barranties200(!.
21
Fair Trading Act l992 (ACT), Fair Trading (Consumer Affairs) Act l973 (ACT), Door to Door Trading Act l99l (ACT), Lay by Sales Agreements Act l963 (ACT)
22
Corones, S (2009) 'Consumer Guarantees in Australia: Putting an End to the Blame Game', Queensland Eniversity o+ &echnology/ Law and Fustice Fournal/ l37.
23
Explanatory Memorandum to the &rade 'ractice Amendment Australian Consumer Law! Act 3o2! 2010 (Cth).
24
lbid, at para [7.8].
The cornerstone of Professor Jeanie Marie's The New Consumer Guarantee Regime
Overview (20ll)
25
rests upon the academics pursuit to characterise the 4potentially
optimistic e++ects; ,the- newly introduced ACL may have on the socio#legal environ
26
5 with
particular reference to the remodelled consumer guarantee that ensures goods are of
'acceptable' quality when sold to a consumer. lncorporating the landmark NZ judgements
1tephens v Chevron Gotor Court Ltd
2)
and Cooper v Ashley H Fohnson Gotors Ltd
28
,
Marie formulates a holistic understanding that prior to the introduction of the ACL
guarantee provisions, the implied condition relating to merchantable quality
29
of goods
4+ailed to provide consumers with an ade.uate protection scheme5
<0
. This was attributed to
the fact that under both the TPA
<1
and the 1ales o+ Goods Act
<2
the scope of basic level of
quality 4reached into any purpose +or which the goods would normally $e used
<<
; a
restrictive standard that was vastly two dimensional and antithetical to the end users
needs5
<*
. Furthermore, under the merchantable quality assessment, goods were required
to be defective upon delivery
35
so that consumers could obtain redress 4with only a small
possi$ility o+ o$taining remedial compensation i+ the goods $ecame de+ective within a
reasona$le period o+ purchase5
<6
. Under s54(l) ACL, the newly introduced regime altered
this position by providing a 4principles $ased guarantee5
<)
by elevating the merchantable
quality stipulation to one of an acceptable quality based on what a reasonable consumer
would consider suitable having considered all the factors relevant to the sale. ln this
situation, as opposed to a merchantable quality standard based upon fitness for the
individual consumer's particular purpose
38
, the acceptable quality measure ensures fitness
for common purpose which does not require the consumer to inform the seller of the
purpose for which the goods are going to be used. So long as the purpose is common, a
consumer does need to make the purpose known. ln essence the common law test for
acceptable quality depends on whether a reasonable consumer
39
, fully aware of the
goods' condition would find them fit for all the purposes
40
for which goods of that kind are
commonly supplied including acceptable in appearance and finish, free from defects, safe
and durable. ln addition to this, it is evident to notice the extent to which the test takes into
consideration the nature and price paid for the goods, any statements about the goods on
any packaging or labels, any representations made about the goods or any other relevant
circumstances relating to the supply of the goods. Professor Maree concurs with the
innovative amendments principally because the focus on fitness for all purposes means
that the acceptable quality guarantee has much wider coverage and ultimately represents
the 4consumer +riendly cousin o+ the implied condition o+ merchanta$le .uality5
*1
. ln addition
to these constructive features of the acceptable quality guarantee, Maree makes
numerous references to alternate 4$ene+icial aspects o+ the s?* ACL provision which serve
to +urther emphasise the growing need to protect consumers and provide them with
25
Marie, J.P. (20ll) &he 3ew Consumer Guarantee 9egime Cverview = Bhen a Consumer is Dntitled to 9e+und or 9eplacement, Melbourne University Press: Melbourne, Australia.
26
lbid, pg. 60.
27
[l996] DCR l at [l6].
28
[l997] DCR l70.
29
Grant v Australian Initting Gills Limited [l936] AC 562.
30
Marie, J.P. (20ll) &he 3ew Consumer Guarantee 9egime Cverview = Bhen a Consumer is Dntitled to 9e+und or 9eplacement, Melbourne University Press: Melbourne, Australia.
31
l974 (Cth).
32
s 64 1ales o+ Goods Act 1(2< (NSW).
33
Grant v Australian Initting Gills ,1(<6- AC 85 (Privy Council); &hornett H :ehr v 0eers ,1(1(- l KB 486; :ran% v Grosvenor Gotor Auctions 'ty Ltd ,1(60- J9 60).
34
Marie, J.P. (20ll) &he 3ew Consumer Guarantee 9egime Cverview = Bhen a Consumer is Dntitled to 9e+und or 9eplacement, Melbourne University Press: Melbourne, Australia.
35
George Bills and Co Ltd v Davids 'ty Ltd H Kenry Iendall v Billiam Lillico and 1ons 'ty Ltd ,1(6(- 2 AC 3l.
36
lbid, pg. l20.
37
Thomas Gault (ed) Gault on Commercial Law (online looseleaf ed, Brookers) at [CG7.04].
38
'such a quality and in such a state and condition as to be saleable in the market, as being goods of that description, to buyers who are fully aware of their quality, state, and condition, and who are buying them for the
ordinary purposes for which goods so described are bought in that market' Taylor v Combined Buyers [l924] NZLR 627 (SC).
39
D v Australian 9ed Cross 1ociety 1((2!.
40
Graham 0arclay Cysters v 9yan 2000!.
41
Marie, J.P. (20ll) &he 3ew Consumer Guarantee 9egime Cverview = Bhen a Consumer is Dntitled to 9e+und or 9eplacement, Melbourne University Press: Melbourne, Australia, pg l23.
options +or redress i+ re.uired5
*2
.Second-hand goods, for instance, sold in trade or
commerce are covered by the guarantee of acceptable quality, but age, price and
condition must be taken into account. Whilst the provision provides protection for a wide
range of instances categorised as falling within the acceptable quality measure, the author
makes particular references to certain scenarios that consumers will not be safeguarded.
This is principally showcased in the instance where a consumer is alerted to defects in
goods before sale and is therefore unable to claim remedies if those particular defects
cause problems with the goods. ln addition to this, a consumer is also not entitled to
remedial response if they had an opportunity to examine the goods before purchase and
did not find defects that they should have noticed. The guarantee of acceptable quality will
also not apply if the consumer uses the goods abnormally, causes the quality of the goods
to become unacceptable or fails to take reasonable steps to avoid the quality becoming
unacceptable.
42
lbid, pg. l25.
ln The Australian Consumer Protection ls it really a new era of consumer protection?
(20ll), Jacqueline Downes offers a pessimistic outlook with regards to the 4supposed
revolutionary scheme5 but ultimately concurs with the 4wider ranging application o+ the
guarantee as to +itness +or any disclosed purpose summarised in s?? ACL5
*<
. For the
duration of the earlier stages of her academic publication, the learned author exemplifies
the 4e@tensive application o+ the &'A provisions5
**
and their ability to provide both
consumers and businesses with 4an all inclusive guide to the commercial landscape5
*?
. A
particularly noteworthy illustration of such an ideological stance manifests itself with the
learned academics concurrence of imposing s7l in an attempt protect consumers in
receiving goods fitting their intended purposes
46
. Whilst her opinion of 4a great deal o+ the
ACL provisions remains unenthusiastic5
*)
, it is evident to notice Downes' jurisprudential
acquiescence with the newly imposed s55 ACL which innovatively 4turns the implied
condition in the &'A to something more solid...guaranteed under statute +or consumer
sa+eguarding5
*8
. This is accomplished in the respective provision through the seemingly
two-pronged protective basis afforded to consumers in instances stemming from the
purchasing of goods for a specified purpose. ln the first instances, s55(2) provides the
TPA like assurance that goods will be reasonably fit for any disclosed purpose purported
or disclosed by the end user. ln this sense, and in accordance with Carey#KaLell v GetL
0ros H Co Aust! 'ty Ltd
*(
/ consumers will simply be required to inform the supplier at the
point of sale
50
, either expressly or by implication, of the purpose for which they require the
goods so as to be granted consumer redress if the items fail to meet its intended purpose.
A particularly noteworthy example of this is highlighted in the Explanatory memorandum
5l

where a consumer asking for a pair of walking shoes is 4su++icient to give the consumer the
$ene+it o+ a guarantee that shoes su$se.uently supplied are +it +or that purpose5
?2
. ln the
words of Downes, the crucial development facilitated by the ACL with regards to affording
consumers protection for goods purchased with a purpose manifests itself in the second
limb of protection envisaged in s55(l). Under this secondary means of protection, a
supplier, or any 4person $y whom any prior negotiations or arrangements in relation to the
ac.uisition o+ the goods are made5/ will be liable in the instance where they represent to a
consumer that certain goods will be reasonably fit for a specified purpose, but are not. For
consumers, this specified addition to the consumer protection legislation represents a
4monumental shi+t in power; no longer will $usinesses $e discounted lia$ility in the
instance where they tell a customer a good +ul+ils a certain need $ut ultimately +ails in this
regard5
?<
. A 4clever e@ample o+ this is mani+ested in the e@planatory memorandum5
?*
in the
instance where a diver buys a watch which the supplier says will be suitable for diving but
a couple of weeks later, when the individual takes his first dive into water, the new watch is
filled with water. Downes classifies this situation as an appropriate scenario where the
consumer will have the right to be reimbursed from the supplier. Whilst s55's twin
protection clauses provide a significant basis for protecting consumers, it is also evident to
notice some of the less favourable aspects of the provisions that do not necessarily sway
in the favour of the end user. lncorporating a unique dualistic approach with regards to the
43
Downes, J. (20ll) &he Australian Consumer 'rotection = As it really a new era o+ consumer protection2, l9 AJCCL 5, l9.
44
lbid, pg. l49.
45
lbid, pg. l49.
46
Kenry Iendall H 1ons v Billiam Lillico and 1ons Ltd ,1(6(- 2 AC 3l & Ashington 'iggeries v Christopher Kill Ltd ,1()2- AC **1.
47
lbid, pg. l50.
48
lbid, pg. l5l.
49
(2004) ATPR 42-0l4.
50
3es$it v 'orter [2000] NZLR 465.
51
Explanatory Memorandum, &rade 'ractices Amendment Australian Consumer Law! Act 3o 2! 2010 (Cth).
52
lbid, at para [7.40].
53
Downes, J. (20ll) &he Australian Consumer 'rotection = As it really a new era o+ consumer protection2, l9 AJCCL 5, l9.
54
Explanatory Memorandum, &rade 'ractices Amendment Australian Consumer Law! Act 3o 2! 2010 (Cth).
decisions in 9yan v Great La%es Council
??
and Graham 0arclay Cysters v 9yan
?6
/ Downes
classifies the fact that whilst most consumers rely on the skill and judgement of the
supplier in selling goods that will assist the consumer in achieving the purpose they have,
there are instances where the reliance upon such advice is unreasonable. ln addition to
this, there are instances where a consumer does not rely on the supplier's skill or
judgment and can therefore claim no redress such as in Golden :leece 'etroleum Ltd v
Avis 9ent a Car 1ystem
?)
. ln this scenario Golden Fleece required a prime mover from
Avis to move a tanker of petrol. When Golden Fleece attempted to couple the prime mover
to the tanker it was discovered that it was not completely compatible and this misalignment
increased instability. An accident occurred and Golden Fleece attempted to argue that the
primer was not fit for its purpose. The court dismissed these claims
58
as Golden Fleece
had not relied on the skill or judgment of Avis; it had simply stated that it needed a prime
mover and that is what it received.
55
[l999] ATPR 46-l9l.
56
(2000) l77 ALR l; ATPR (Digest) 46-207.
57
(l983) ATPR 40-409.
58
at ATPR 44,770.
Whilst an extensive array of socio-legal academics
59
have commended the developments
of the CCA, and in particular its ability to reinforce/clarify certain consumer guarantees
now residing in Schedule 2, it is also evident to notice the 4$ene+icial outcomes arising
+rom newly introduced provisions such the guarantee as to repairs and spare parts'
60
.
Taking into consideration the learned opinions of Westmoreland and Hunt in their
publication The New Consumer Guarantee Regime Overview (20ll), it is evident to notice
4the &'A5s silence; when it comes to providing consumers with some assurance that
suppliers are a$le to repair or service +aulty goods i+ need $e5
61
. For the respective authors,
too much reliance was invested into 4the wor%ing o+ common law
62
;which itsel+ was
delved in mur%y waters and +ailed to provide consumers with solid ground with regards to
repairing7 servicing their goods5
6<
. The Productivity Commissions 2008 9eview o+
Australia5s Consumer 'olicy :ramewor%
6*
however 4put the wheels in motion +or the
development o+ s?8 ACL5. Under the current s58 provision, manufacturers are under a
legal obligation to take reasonable steps to provide consumers with spare parts and repair
facilities for a reasonable time after purchase. ln accordance with the Explanatory
Memorandum
65
, this key stipulation within s58 necessitating/compelling suppliers to
ensure repair facilities are available after purchase is particularly critical in instances where
consumers have in fact spent a considerable amount of money acquiring the goods. One
must simply look at the analysis of the recently decided Karper v &oyota Automotive
Group ,2011- by Professor J.W Carter to understand the 4logicality o+ holding suppliers or
manu+acturers accounta$le in situations where restorative +acilities are unavaila$le +or
goods such as cars and $oats that would normally cost an average person a +ortune5
66
.
Carter maintains this line of thought and makes a considerable contribution with regards to
the reasonability test applied to situations within the realm of s58. ln accordance with the
respective author, reasonability will depend solely on the nature and type of goods being
supplied by a supplier. For example, it would be reasonable to expect that tyres for a new
care will be available for many years after its purchase. lt may not however be reasonable
to expect that spare parts for an inexpensive children's toy are available at all. Whilst this
reasonability test is perceived by many as 4the appropriate ground +or7 assessment'
67
,
there has been considerably widespread criticism levelled at the legislator's ability to 4put a
price tag on a goods personal value7utility5
68
. According to this school of thought, suppliers
should be required to provide repair facilities and spare parts for all goods they sell for a
statutory defined period of seven years or provide monetary compensation. Furthermore,
individuals such as the likes of Marie have also commented on the inability to find a
4reasona$le ground +or assessment; what might $e reasona$le +or one person may $e
di++erent to another5
6(
. The respective academic places particular emphasis on common
scenarios such as when an individual purchases a vehicle expected to last him a decade
whilst a wealthier person may only use it for six months. Academics have also been critical
of the provision in the sense that a manufacturer or importer does not have to meet the
guarantee on repairs and spare parts if they advise the consumer in writing, at the time of
purchase, that repair facilities and spare parts would not be available. With particular
reference to Gaher v Grant [20ll], it is evident to notice that in some instances consumers
59
Carter, J.W. (20ll) Contract and Consumer Law = A Guide/ Butterworths: Melbourne, Australia & Corones, S (20ll) Australian Consumer Law: Commentary and Gaterials *
th
Ddition, Thomas Reuters: Melbourne,
Australia.
60
lbid, pg. 45.
61
Westmoreland, R & Hunt, D. (20ll) &he 3ew Consumer Guarantee 9egime Cverview = Bhen a Consumer is Dntitled to 9e+und or 9eplacement, Penguin Publications: Melbourne, Australia.
62
Discussed in Graham 0arclay Cysters v 9yan 2000! and 0ethune v Qconn ,2002-.
63
lbid, pg. 8l.
64
lbid, pg. l49.
65
Explanatory Memorandum, &rade 'ractices Amendment Australian Consumer Law! Act 3o 2! 2010 (Cth).
66
Carter, J.W. (20ll) Contract and Consumer Law = A Guide/ Butterworths: Melbourne, Australia
67
lbid, pg. 3l.
68
Rees, A. (20l0) Are you 0eing 1erved2 3ew Consumer Guarantees +or 1ervices, Melbourne University Law Review: Melbourne, Australia
69
Marie, J.P. (20ll) The New Consumer Guarantee Regime Overview When a Consumer is Entitled to Refund or Replacement, Melbourne University Press: Melbourne, Australia
are almost forced into these agreements particularly with goods that 4ta%e up so much o+
our day to day living; completely un+air that in such instances suppliers may $e relieved
o+ their o$ligations5
)0
.
Pearson and Fisher, in their publication Commercial Law: Commentary and Materials
(20l0)
7l
, provide a comprehensive examination of the correspondence with description
provision within Schedule 2 CCA by 4isolating7 scrutinising the various means $y which the
section see%s to protect consumers in instances where a good +ails to match its
description5
)2
. Under the preceding TPA, the basic premise with regards to goods
corresponding with a description under s70 was that a buyer should get goods of that
identity for which he or she bargained. This underlying ideological presupposition was
transposed legislatively in the form of an implied condition within a contract for the supply
of a respective class of goods. Whilst Pearson and Fisher take an affirmative stance with
the 4legislators vi$rant attempts to sa+eguard consumer rights7 particularly in instances
relating to catalogue or television advertisements5
)<
, multiple common law scenarios
74
,
including that of Ashington 'iggeries v Christopher Kill
)?
, highlighted the 4necessity o+
rewording the provision to avoid interpretive con+usion7 providing solid legal assurance +or
consumers5
)6
. ln its current modified guise, the s56 ACL provision conclusively assures
that where consumers purchase goods through a description of those goods, the eventual
goods received must correspond with that description. Despite the 4o$vious similarities
$etween the &'A and ACL protection measures5, the authors of Commercial Law:
Commentary and Materials (20l0)
77
commend the legislations technique of separating the
provision into three specific measures seeking to ensure consumers receive goods that
match their initial description. At the outset, s56(l) provides consumers with the
overarching basis for seeking redress if the goods the individual had agreed to buy do not
match their description with regards to colour, size or kind when a seller deals in goods of
that description. This ideological stance manifests itself throughout the entirety of
Ashington 'iggeries v Christopher Kill
)8
and in particular through Diplock's assertion that
4$y descri$ing the goods that are to $e the su$>ect o+ the contract the $uyer ma%es it
%nown to the seller $y implication that the goods are re.uired +or one o+ the purposes +or
which the goods o+ that description are normally re.uired;$y selecting a seller who
ma%es it his $usiness to supply goods o+ that nature/ the $uyer shows his reliance5
)(
. ln
addition to this situation, it is also relevant to take into consideration s56(2) and the extent
to which the guarantee to match description applies regardless of whether or not the
consumer selected the goods or not. This aspect of the provision is particular crucial in the
sense that suppliers are unable to sell goods that are differentiated to their description
purely on the basis that the consumer had reasonably inspected the goods prior to
finalising the purchase
80
. The newly implemented provision alternatively, in accordance
with s56(3), provides consumers with a 4dualistic redress avenue;in instances where the
supplier provides $oth a description and a sample7demonstration model to an end user as
the $asis o+ a commercial transaction5
81
. Under these circumstances, a supplier would
70
lbid, pg. l4l.
71
Pearson, G., Fisher, S., Pedan, E & Tolhurst, G.J. (20l0) Commercial Law: Commentary and Gaterials, Thomas Reuters: Sydney, Australia.
72
Marie, J.P. (20ll) The New Consumer Guarantee Regime Overview When a Consumer is Entitled to Refund or Replacement, Melbourne University Press: Melbourne, Australia
73
Pearson, G., Fisher, S., Pedan, E & Tolhurst, G.J. (20l0) Commercial Law: Commentary and Gaterials, Thomas Reuters: Sydney, Australia.
74
Australian Initting Gills v Grant 1(<<! 50 CLR 387, Dlder 1mith Golds$rough Gort Ltd v Gc0ride ,1()6- 2 NSWLR 63l and Karlington H Leinster Dnterprises v Christopher Kull :ine Art [l990] 3 WLR l3.
75
[l972] AC 44.
76
Pearson, G., Fisher, S., Pedan, E & Tolhurst, G.J. (20l0) Commercial Law: Commentary and Gaterials, Thomas Reuters: Sydney, Australia. pg. 793-4.
77
Pearson, G., Fisher, S., Pedan, E & Tolhurst, G.J. (20l0) Commercial Law: Commentary and Gaterials, Thomas Reuters: Sydney, Australia.
78
Ashington 'iggeries v Christopher Kill LtdM Christopher Kill Ltd v 3orsmildmel Con>oined appeals! ,1()2- AC **1 Kouse o+ Lords!.
79
lbid, at [505].
80
Competition and Consumer Act 2010 Cth! Schedule l s56(2).
81
Pearson, G., Fisher, S., Pedan, E & Tolhurst, G.J. (20l0) Commercial Law: Commentary and Gaterials, Thomas Reuters: Sydney, Australia.
breach both s56 and 57 by providing a misleading or false description of the goods as well
as a demonstration model or sample that is either inaccurate or unsubstantiated in the final
good. This scenario was at the forefront of the recently decided case Doolan v 0ayer
Australia Ltd
82
where a supplier breached both the description and sample provisions within
the ACL and subsequently has to provide remedial response to the consumer.
lncorporating the scholarly opinions of Farrell and Clarke in Additional Protections For
Consumers (20ll)
83
, and in particular their well renowned critique of 9asell v Cavalier
Gar%eting
8*
/ it is evident to notice the 4signi+icant legislative changes to Australian
consumer law5
8?
facilitated through the implementation of the ACL and in particular the
4consolidation o+ the guarantee to supply goods $y sample and demonstration model5
86
.
Prior to the implementation of Schedule 2 CCA, the TPA afforded consumers an implied
protection in the instance where, during the course of trade or commerce
87
, they
purchased goods which did not correlate
88
with 4the sample they viewed in the showroom
or on the shel+5
8(
. ln accordance with s72 TPA, and with regards to Street's commentary
LG &horne H Co 'ty Ltd v &homas 0orthwic%
(0
, this was facilitated in instances where 4the
$ul% o+ the goods did not correspond with the sample in .uality even a+ter the parties
appeared to have set down the terms in the contract/ whether implied or e@press/ and7or
had the reasona$le opportunity to inspect5
(1
. Under the guidance of the Productivity
Commissions 2008 9eview o+ Australia5s Consumer 'olicy :ramewor%, the newly imposed
s57
92
managed to provide a 4reworded7 more easily understood version o+ its predecessor
in the &'A; ,whilst- trans+orming the implied condition to a legislatively $ac%ed guarantee
that goods match the sample5
(<
. ln addition to these 4comprehensive modi+ications5
(*
/
Farrell and Clarke provide extensive detail with regards to the 4guarantees a$ility to not
only protect instances where goods are purchased on the $asis o+ a sample; ,$ut-
alternatively when a demonstration model is used to entice consumers5
(?
. Under its current
guise therefore, so that an end user may be afforded this legislatively backed guarantee, a
consumer must firstly be supplied, during trade or commerce, a good or goods by
reference to a sample or demonstration model
96
. Once this scenario is vindicated, in
accordance with Farrell and Clarke's critical appraisal of the respective provision, a failure
to correspond with the represented sample may substantiate itself in three specific
instances. With regards to s57(l)(c), the end users goods must correlate with the quality,
state or condition of the goods which were initially represented by the supplier. This
particular instance was deliberated in Ashington 'iggeries v Christopher Kill
()
and in
particular during Diplock's judgement which decided that 4the $ul% shall correspond with
82
Doolan v 0ayer Australia Ltd and Anor ,2012- :CGA 8<<.
83
Farrell, J & Clarke, J. (20ll) Additional 'rotections :or Consumers, LexisNexis Australasia Press: Melbourne, Australia.
84
(l99l) ATPR 4l-l52.
85
lbid, pg. l29.
86
lbid, pg. l40.
87
Graham 0arclay Cysters v 9yan 2000! l02 FCR 307.
88
Ashington 'iggeries v Christopher Kill ,1()2- AC 44l.
89
lbid, pg.l44.
90
[l956] SR (NSW) 8l at [87].
91
lbid, at [89].
92
Schedule 2, Competition and Consume Act 2010 Cth!.
93
Farrell, J & Clarke, J. (20ll) Additional 'rotections :or Consumers, LexisNexis Australasia Press: Melbourne, Australia.
94
lbid, pg. l54.
95
lbid.
96
s 57(l)(a).
97
[l972] AC 4ll at [5l4].
the sample in .uality;,and in particular- the characteristics which would $e apparent upon
physical inspection o+ the samples5
(8
. ln addition to corresponding quality standards
between the good provided to the end user and the one showcased in the sample
discussed in Ashington 'iggeries v Christopher Kill
((
, s57(l)(e) affords the protection that
goods are free from any defects that would not be apparent on reasonable examination of
the sample and would cause the goods not to be of acceptable quality
l00
. This was
particularly the case in LG &horne H Co 'ty Ltd v &homas 0orthwic%
101
where 4it was the
common understanding o+ $oth parties that the plainti++ was $uying as a result o+ its
inspection o+ the samples and would not have $ought unless they had $een satis+actory
and complied with the re.uirements +ree o+ hidden de+ects ma%ing the good
unmerchanta$le in .uality5
102
. Cooper's testimony in Cavalier Gar%eting v 9assell
10<

provides appropriate guidance with regards to the s57(l)(e) provision which affords
consumers with a dual protection not only with regards to goods matching their
represented sample, but also any description that was provided by the supplier (s56 ACL).
ln the afore stated case, there was evidence that the carpet at the time that it was laid was
satisfactory as to its appearance and its correlation with the sample. After some weeks
however the unsatisfactory transformation in the appearance of the carpet became visible
to the end user who was initially told by the supplier would last a lifetime. Aside from the
obvious unmerchantable quality of the good, the carpet failed to match the sample
provided by the supplier and alternatively the description afforded at the place where the
purchase was complete. Farrell and Clarke in Additional Protections For Consumers
(20ll)
l04
conclude that 4the only downside +or consumers with regards to this guarantee is
the +act that it does not cover sales $y auctions5. This however is easily understood as the
goods are not so easily accessible and therefore cannot be reasonably inspected as to
their quality.

98
lbid, at [5l4].
99
[l972] AC 4ll at [5l4].
100
9asell v Cavalier Gar%eting Australia! 'ty Ltd 1((1! ATPR 4l-l52.
101
[l956] SR (NSW) 8l.
102
lbid, at [87].
103
(l99l) ATPR 4l-l52.
104
Farrell, J & Clarke, J. (20ll) Additional 'rotections :or Consumers, LexisNexis Australasia Press: Melbourne, Australia.
Taking into consideration the learned opinions of Westmoreland and Hunt in The New
Consumer Guarantee Regime Overview When a Consumer is Entitled to Refund or
Replacement (20ll)
l05
, it is evident to notice the wide ranging consumer redress options
which are typically dealt with throughout Part 5.4 Division l Schedule l, Competition and
Consumer Act 2010 Cth!. As mentioned previously, prior to the implementation of the
ACL, the notion of consumer guarantees was "essentially a non#e@istent phenomenon...,as
the- &'A provided consumers with limited rights ,through- implied warranties with regards
to the purchase o+ goods7services"
106
. ln this sense, and as highlighted in Ashington
'iggeries v Christopher Kill
10)
, consumers were afforded relief under contract law which in
many instances was "di++icult to ascertain +or everyday individuals in light o+ high litigation
costs7stress"
108
. The introduction of the ACL, in the words of the afore stated authors,
"revolutionised the remedial options +or end users"
10(
as consumers were now able to rely
upon statutory remedies
ll0
against a supplier for any breaches associated with the
consumer guarantees now protected under the act providing the goods were supplied
lll
in
the course of trade or commerce
ll2
. ln this sense, consumers now have the right to
redress dependant on which consumer guarantee was breached and whether the problem
with the good/ service is minor or major. An understanding of Appendix l, Figure l allows
for a better understanding as to who a consumer should seek redress from depending on
the type of consumer guarantee was breached. Under s259 ACL, if failure is perceived not
to be within the category of 'major failure', the usual remedy for a consumer is to require
the supplier to address the problem within a reasonable time, which itself is dependant on
the circumstances of the breach
ll3
. ln the scenario where a consumer requests a remedy
from the supplier in the instance where the failure is deemed minor and can be remedied,
the producer may choose between providing a refund, replacement or repair
ll4
. lf the
supplier does not provide the end user with an appropriate remedial response within a
reasonable time, the consumer may either have the goods repaired and have the supplier
pay for the repair or purchase a replacement unit and seek indemnification from the
supplier afterwards
ll5
. Alternatively, in some circumstances, it would also be appropriate
to provide remedial response in the instance where a consumer suffers losses as a result
of a failure of a supplier to comply with guarantees
ll6
. This type of consequential loss
however must be foreseeable to result from the failure. lf the failure to comply with the
guarantee cannot be remedied a consumer may in turn reject the goods or seek
compensation for the reduction in the value of the goods below the price paid. ln
accordance with s260 ACL, a major failure will occur if the goods are unsafe, significantly
depart from their description, would not have been acquired by a reasonable consumer
who was acquainted with the issue, substantially unfit for their purpose or a disclosed
purpose made known to the consumer prior to purchase and cannot be remedied within a
reasonable time or if the goods cannot be reasonable expected to deliver a result made
known to the consumer prior to purchase. ln such a scenario, a consumer may choose to
reject the goods or seek a replacement or refund from the supplier. lf in the instance a
consumer returns goods to a supplier, the supplier must provide the remedy that the
105
Westmoreland, R & Hunt, D. (20ll) &he 3ew Consumer Guarantee 9egime Cverview = Bhen a Consumer is Dntitled to 9e+und or 9eplacement, Penguin Publications: Melbourne, Australia.
106
lbid, pg l02.
107
(l972) AC 4ll.
108
Brody, G (20l0) Consumer 'rotection Legislation, Fitzroy Legal Services Publications: Melbourne, Australia.
109
Westmoreland, R & Hunt, D. (20ll) &he 3ew Consumer Guarantee 9egime Cverview = Bhen a Consumer is Dntitled to 9e+und or 9eplacement, Penguin Publications: Melbourne, Australia.
110
Competition and Consumer Act 2010 Cth! Schedule l, ltem l: Chapter 5, Part 5-4, Division l, s258.
111
Graham 0arclay Cysters v 9yan 2000! l02 FCR 307.
112
9asell v Cavalier Gar%eting Australia! 'ty Ltd 1((1! ATPR 4l-l52.
113
Competition and Consumer Act 2010 Cth! Schedule l, ltem l: Chapter 5, Part 5-4, Division ls 259(2)(a).
114
Competition and Consumer Act 2010 Cth! Schedule l, ltem l: Chapter 5, Part 5-4, Division ls 26l.
115
Competition and Consumer Act 2010 Cth! Schedule l, ltem l: Chapter 5, Part 5-4, Division l s 259(2)(b)(i).
116
Competition and Consumer Act 2010 Cth! Schedule l, ltem l: Chapter 5, Part 5-4, Division ls 259 (4).
consumer has chosen
ll7
. lf the consumer chooses a refund after rejecting goods, the
supplier is specifically precluded from providing replacement goods to satisfy the
requirement for a refund
ll8
. The property in goods rejected revests in the supplier as soon
as the consumer notifies the supplier of the rejection which ensures that any risk to the
goods from that time onwards is borne by the supplier
ll9
.
ln addition to the consumer redress options available to consumers with regards to
potential breaches of consumer guarantees by suppliers, it is also evident to notice the
extent to which end users may now be able to rely upon statute to facilitate remedial
response from manufacturers with regards to a specific category of breached guarantees.
ln accordance with the explanatory memorandum accompanying the introduction of the
ACL provisions, it is evident to notice the extent to which a consumer may recover
damages directly from the manufacturer of goods with respects to failures to ensure
acceptable quality, correspondence with description (if a description was applied by or on
behalf of the manufacturer), availability of repairs and spare parts, and compliance with
express warranties
l20
. The damages that are recoverable from a manufacturer of goods
include the reduction in value of goods below the lower of the price paid or the average
retail price of the goods at the time of supply. This ensures that manufacturers are not
required to provide excessive compensation to consumers if suppliers charge high prices
for their goods
l2l
. The damages payable by a manufacturer to a consumer also cover
losses that were reasonable foreseeable as a result of the failure
l22
. To avoid doubt, the
cost of returning goods or inspecting them to determine the cause of a failure is to be
considered reasonably foreseeable as a result of failing to comply with a guarantee
l23
. A
manufacturer however is not required to pay damages to a consumer if the consumer has
required the manufacturer to provide a repair or replacement under an express warranty
unless the manufacturer has refused to provide a repair or replacement, or has failed to do
so within a reasonable time
l24
. ln addition to this, a manufacturer is not required to pay
damages to a consumer if an act, default or omission or representation made by some
other person, not being an employee or agent of the manufacturer, resulted in caused
goods to be of less than acceptable quality
l25
. A manufacturer is also not liable to provide
damages if a failure to comply with the guarantee as to acceptable quality results from a
cause independent of human control that occurs after the goods left the control of the
manufacturer
l26
.
117
Competition and Consumer Act 2010 Cth! Schedule l, ltem l: Chapter 5, Part 5-4, Division ls 260.
118
Competition and Consumer Act 2010 Cth! Schedule l, ltem l: Chapter 5, Part 5-4, Division ls 263(5).
119
Competition and Consumer Act 2010 Cth! Schedule l, ltem l: Chapter 5, Part 5-4, Division ls 263.
120
Competition and Consumer Act 2010 Cth! Schedule l, ltem l: Chapter 5, Part 5-4, Division 2, s27l(l), 27l(2), 27l(3) and 27l(5).
121
Competition and Consumer Act 2010 Cth! Schedule l, ltem l: Chapter 5, Part 5-4, Division 2, s272(l)(a).
122
Competition and Consumer Act 2010 Cth! Schedule l, ltem l: Chapter 5, Part 5-4, Division 2, s 272(l)(b).
123
Competition and Consumer Act 2010 Cth! Schedule l, ltem l: Chapter 5, Part 5-4, Division 2, s 272 (3).
124
Competition and Consumer Act 2010 Cth! Schedule l, ltem l: Chapter 5, Part 5-4, Division 2, s27l (6).
125
Competition and Consumer Act 2010 Cth! Schedule l, ltem l: Chapter 5, Part 5-4, Division 2, s 27l(2)(a).
126
Competition and Consumer Act 2010 Cth! Schedule l, ltem l: Chapter 5, Part 5-4, Division 2, s27l(2)(b).
ln conclusion, it is quite evident indeed to notice the overwhelming alterations that have
been facilitated by the decision to repeal the TPA and replace it with the CCA. Of the more
recognisable developments to the commercial landscape has been the implementation of
legislatively protected consumer guarantees serving to enhance consumer redress in
instances where the goods they purchase do not meet an appropriate level of quality or
description. This scenario is completely different from the prior TPA provisions which
implemented implied warranted that could be enforced through contract law. ln addition to
this, the introduction of the ACL has managed to provide a single uniform consumer law
program that is both clear and equal throughout the various states and territories of
Australia. These beneficial aspects of the legislative change, and a host of others, have
been reflected throughout the entirety of the prior discussion of consumer guarantees
relating to acceptable quality, fitness for purpose, matching description,
sample/demonstration model and requirement to provide repair and spare part facilities.
These provisional adjustments have alternatively provided consumers with improved
redress options through the introduction of the major/minor failure distinction as well as the
consumers legislatively protected right to be indemnified by the manufacturer in instances
where the end user is not at fault.
APPENDlX l
:igure 1.1