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DEFECTIVE GOODS & SERVICES

DO I HAVE A CLAIM?

You may have a claim for damages arising from a defective product if you suffered personal injury or if you suffered other losses. Depending on the circumstances your claim may be limited to a refund of the purchase price of the goods or services, replacement of the goods, provision of services which remedy the defective services provided or claims for damages in respect of personal injury and claims for other losses which result from the defective goods or services.

You may be able to claim for defective goods or services if it is not:

  • fit for the purpose for which the goods would normally be used or for any specific purpose which you outlined to the supplier;
  • not of merchantable quality.

Goods are reasonably fit for their purpose if you expressly told the seller the purpose for which the goods were required, you relied on the seller's skill or judgment or the goods are of a description which is in the course of the seller's business to supply. These terms are implied into contracts whereby you purchase goods under the Sale of Goods Act, the Trade Practices Act and the Fair Trading Act.

In some circumstances a supplier or manufacturer may be liable for a claim for damages from defective goods if they have a duty set out by legislation or regulation known as a statutory duty to ensure that the goods are not defective. In relation to some areas, such as food regulations, the duty is strict, but in other areas the statutory duty may only extend to the manufacturer or supplier exercising reasonable care and skill.

Manufacturers are required to ensure safe and effective design, adequate instructions, adequate warnings and appropriate recommendations. This extends to the design, preparation, packaging and manufacture of goods. Manufacturers are also under a duty to recall goods if they are known to be unsafe. Similarly, suppliers and distributors are under a duty to warn of any dangers with goods of which they are or should be aware. However, there is no positive obligation on suppliers or distributors to inspect all goods and some goods are incapable of what is known as intermediate examination or inspection.

A higher duty of care exists in respect of goods which are generally considered to be dangerous, such as poisons and certain chemicals. However you may not be able to claim if you knew that the goods were defective and chose to use the defective goods in full knowledge of the nature of the defect.

This is not the same as knowing that goods may have some defect but not knowing the exact nature of the defect. Similarly, you will not be able to claim if you misuse or abuse the goods or otherwise use it in a way which the manufacturer would never have reasonably intended that the goods would be used. 

IF I HAVE A CLAIM WHAT DO I DO?

Ascertain who the supplier was and, if possible, the manufacturer.

Look at any documents that were supplied with the goods or services to see whether there is any warranty applying in respect of the goods or services.

If the goods are faulty do not throw them away. Retain them so that they may be subject to evaluation if necessary at a later stage.

The next step is based on the nature of your claim. If the goods or services is defective and the value of the goods or services is less than $6,000.00, your approach may be different if the value of the goods is greater than $6,000.00 or you have suffered loss arising from the defective goods or services, such as business interruption, loss or production loss and the like.

Give some thought to the circumstances under which you purchased the goods or services. What did you say to the person who sold you the goods or services as to the reasons why you wanted the goods or services and what representations did they make to you about the goods or services? Note these down in writing and as best as possible attempt to remember the conversation or conversations you had up to the time you purchased the goods.

Look for and keep any documents relating to the goods including promotional literature, invoices, contracts, receipts, instruction manuals, guarantees, warranties and the like. If you want the defective goods replaced or the defective services provided in a proper manner, your first step is to approach the supplier of the goods or services stating that the goods or services is defective, the manner in which you believe the goods or services is defective and the remedies you want. If the product is goods you should set out your concerns in writing to both the supplier and the manufacturer if the manufacturer is known.

However, even if the manufacturer is unknown you should persist with the supplier and there is provision in the Trade Practices Act to identify the manufacturer of the goods and the supplier of the goods. Please note that the Trade Practices Act only applies when the manufacturer is a corporation and otherwise it may be necessary to use the Fair Trading Act. If you have any concerns in this regard you may be able to resolve them through advice from the Ministry of Fair Trading or through a lawyer.

In Western Australia, for claims between a consumer and trader as opposed to business to business claims, a Small Claims Tribunal is in existence for the value of goods or services up to $6,000.00.

If you do not receive a satisfactory response from the supplier or manufacturer and you wish to pursue the matter you may do so by either contacting a lawyer, by raising the matter with the Ministry of Fair Trading or making a complaint direct to the Small Claims Tribunal. In each case it is appropriate to draw your complaint to the attention of the supplier and manufacturer in the first place. However, in respect of claims for significant sums of money or economic loss other than merely replacement of the defective goods or services, or even replacement of the defective goods or services where there are substantial sums involved, it may be advisable to seek legal advice before presenting a letter of demand to the supplier or manufacturer. Legal advice should be sought because the lawyer may be able to better formulate a letter which sets out the basis for your claims and the extent of any damages you have suffered.

The Small Claims Tribunal is a tribunal which does not allow for legal representation and which is based upon a less complicated method of resolution of disputes than exists through the courts. 

DEFECTS FOR WHICH YOU MAY NOT HAVE A CLAIM

In some instances neither the supplier nor the manufacturer will be liable for defects in the supply of goods if the defect was caused by matters considered to be beyond the control of the supplier or manufacturer. Examples of this would include unusual or abnormal wear and tear, not using the goods properly, failing to undertake any or proper maintenance of the goods and use of incorrect chemicals, fuels, oils and the like.

WHAT HAPPENS IF I SUE?

As you are probably aware, court proceedings can be expensive and take a long time to conclude. Therefore we generally discuss matters of costs and court procedure with clients who are involved in litigation so that they are more fully aware of what is involved in a court action. Our comments are general and do not necessarily specifically relate to your case.

A lot of work will be done in considering the issues of evidence and law involved in the case, in taking statements from witnesses, in arranging for the presentation of documentary and expert evidence in support of your case, in attending to matters of court procedure and in court appearances.

It is impossible to predict how much a court action will cost because it is only on examining the issues of fact, law, evidence and court procedure in detail that any complexities and the time involved can be fully appreciated.

The costs of an action in the District Court may range from about $5,000.00 to $40,000.00 or more upwards, although generally a court action which proceeds to trial can be conducted for less than $10,000.00 especially if the case is settled before trial or the trial lasts for one day only.

There is a scale of fees prescribed for the work done in conducting a court action, but those fees are only incidentally related to the time spent on the case. If you win the case and an order is made that you recover the costs from the other party, costs will be recoverable on the basis of the scale fee.

It could be that the scale fee will be the equivalent of our charges based on the time involved, but by the same token it is possible for our charges to be considerably in excess of the amount recoverable in accordance with the scale. This is because work may be done at your request which is not necessarily directly related to the action and which the court considers the other party should not have to bear.

As with the expense involved in litigation, it is impossible to predict how long a court action will take because the time involved depends on whether there are any difficulties in resolving the issues of fact, law, evidence and court procedure, the time spent by you in considering our advice on these matters and the time spent by the other party and their solicitor in attending to these issues. The very earliest that a court action in the District Court can be brought on for trial is about 12 months from the commencement of proceedings, but generally a case is determined over about a 2 year period. On occasions the period of time involved can be substantially longer.

Court proceedings in the District Court are commenced by the issue of a Writ. The Writ is then served on the defendant. If the defendant intends to defend the proceedings, a document known as a Memorandum of Appearance is filed by the defendant at the Court. The plaintiff then files a statement of claim setting out particulars of the grounds on which the claim is based.

A copy is served on the defendant's solicitors. The defendant then files a defence and serves a copy of it on the solicitors for the plaintiff. The defence sets out the grounds on which the claim is defended. These documents are described as the "pleadings" and pleadings must be filed within a time prescribed by the court.

Both parties are entitled to request further and better particulars of the other party's pleadings. These are questions relating to the statements in the pleadings. They are designed to enable parties to by fully informed of all facts material to the other's claim.

After the pleadings close discovery is given. Discovery is the procedure by which each of the parties must disclose any documents which are relevant to the court proceedings. Certain documents are privileged, such as communications between solicitor and client.

Discovery is a most important step and it is very important that any document that may appear to be relevant in any way whatsoever be made available to us at the earliest possible date. When discovery is given, it is given on affidavit and it is an act of perjury to fail to reveal relevant documents.

The next step is delivery of interrogatories. These are questions in writing for answer on oath in an attempt to secure admissions of fact from the other party.

In the course of a court action there are often proceedings known as "interlocutory" or interim proceedings. These proceedings may relate to such things as enforcing of time limits for the deliver of pleadings, giving discovery or for giving answers to interrogatories.

Often interlocutory proceedings are taken to secure directions as to how the trial should proceed. These proceedings are taken in "chambers" where the solicitors for the parties appear before the court and make submissions as to the relief sought. There is generally no need for the parties themselves to appear.

On the completion of all preliminary matters the action can be entered for trial by the solicitor acting for either party. On entering the action for trial the court allocates a date for a pre-trial conference. This is generally about 3 months later, but depends on court delays. The pre-trial conference is an attempt to negotiate a settlement of the case and is presided over by a Registrar or a Deputy Registrar of the Court and held at the Court.

You are required to be present at the Court together with the solicitor representing you. The solicitor representing the defendant is also present, together with a representative from the defendant's insurer, if the defendant is insured.

If the action does not settle at pre-trial conference then the Court may fix a date for trial.

The date fixed is generally some months ahead because of the backlog of cases waiting for a trial date.

On completion of the trial a judgment is awarded. The successful party is usually awarded costs as against the other party. The recovery of costs is generally conducted by preparing a document known as a bill of costs which is submitted to the court for "taxation". This is the procedure whereby the court in the presence of the solicitors for the parties assesses the charges made and determines the amount of costs to be paid by the unsuccessful party.

If we recommend that you commence a court action we will do so on the basis of an asssessment as to the information available to us at the time to ascertain what you might be able to negotiate at pre-trial conference or be awarded at trial a reasonable figure in settlement of your claim to date. Our views can of course change on further investigating the questions of fact, law and evidence involved. 

FURTHER INFORMATION

This Information Outline is provided courtesy of Dwyer Durack Barristers & Solicitors who are experienced in this area of law. They are located at Dwyer Durack House, 40 St. Georges Terrace, Perth, WA 6000 or call them on (08) 9325-9277 if you would like more information on this legal topic, or you wish to obtain formal advice regarding your situation.

Established in 1914, Dwyer Durack is one of Western Australia's most respected and progressive law firms. It is the leading legal firm in Western Australia for the provision of a comprehensive service in the private client areas of personal injuries, family law, employment law, criminal law, consumer law and wills and estates. The firm comprises 13 Partners and a total compliment of 120 personnel. Dwyer Durack is a member of the Australia-wide PeopleLaw group.

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