VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
Civil Division 
Civil Claims List	
vcat reference No. C7089/2018	
CATCHWORDS	
Misrepresentation about suitability of the produce for the purpose disclosed on the product packaging; section 33 Australian Consumer Law; damages.	

APPLICANT	Acintya	
RESPONDENT	Mirotone Pty Ltd (ACN: 000 041 136)	
WHERE HELD	Melbourne	
BEFORE	Senior Member S. Burdon-Smith	
HEARING TYPE	Hearing	
DATE OF HEARING	23 January 2019, 12 March 2019	
DATE OF ORDER	20 June 2019	
CITATION	Acintya v Mirotone Pty Ltd (Civil Claims) [2019] VCAT 916	

Order
1.	The application is amended as follows:
The name of the applicant is amended to “Acintya”.
The Principal registrar is directed to amend the register accordingly.
2.	Mirotone Pty Ltd must pay Acintya the sum of $12,405.60.
3.	Having regard to s115B(1) of the Victorian Civil and Administrative Tribunal Act 1998 and being satisfied that the applicant substantially succeeded in his claim, the Tribunal orders that Mirotone Pty Ltd must reimburse Acintya the application fee of $475.40 and the hearing fee of $354.10 paid by the applicant.

S. Burdon-Smith
Senior Member			

APPEARANCES:		
For Applicant	Acintya, in person	
For Respondent	Simon Taylor, National Sales Manager, Mirotone Pty Ltd	

Reasons
Background
1	These reasons are provided at the request of the respondent. Oral reasons for the decision were provided on the day of the hearing.
2	This dispute relates to the supply by the respondent of paint product to the applicant.  The applicant is a painter by trade.  He describes himself as a professional painter – that being his primary occupation.  He has not completed any formal training in that area.  The respondent is a manufacturer and supplier of paint including the Qantum range of products subject to this application. 
3	The applicant’s claim is that the paint was not fit for the purpose for which he had disclosed as his purpose, and that the respondent misrepresented the product on the product label as being suited for the purpose to which it was put. He also claims that it is defective.
4	The respondent’s defence is that the product was not applied according to the instructions; used for a purpose which was not a recommended use on the label; is properly labelled to identify the correct use and application of the product and was not defective.
Events giving rise to the Claim
Applicant’s evidence
5	On 6 May 2016 the applicant went to the local ‘Paint Right’ paint retailer - “Dales Discount” (“Dales”).  He had been engaged to provide painting services and required a coating for timber windows and doors which would give a natural finish.  After a discussion with the owner of the business, Rod Entwistle (“Rod”) he purchased a Qantum product, manufactured and sold by the respondent, called Timber Plus. The applicant’s client was not happy with the high level of tint in the product.
6	The applicant returned to Dales and further discussed the project with Rod. The applicant’s evidence is that he said that he wanted an exterior coating for windows and doors that was clear and maintained the true colour of the wood.  Another Qantum product – Microclear was recommended. The applicant’s client was satisfied with the application of Microclear and it was applied to seven windows, one sliding door and one glass door on a separate studio.  The work was competed on 22 July 2016.
7	By October 2016 deterioration of the treated surfaces was evident.  In discussion with Rod at Dales the applicant was alerted to the possibility that the deterioration was due to tannin bleed. Rod suggested that had the surfaces been sap stripped prior to application the problem would not have occurred. This advice was accepted by the applicant. 
8	Around the same time the second stage of the building construction subject to the painting had reached a point where the remaining doors and windows were ready to be painted.
9	The applicant returned to Dales and indicated that he wanted a clear natural durable finish and did not want the same problem he had experienced with the application on the studio (the first application).  Rod recommended a full sap strip process on all surfaces to be coated, followed by the application of a Qantum product called Nano Primer before applying Microclear. The applicant proceeded to apply the product as recommended to the studio windows and doors and the second stage of the project as well.
10	In May or June of 2017 the applicant noted that the application to the windows of both the studio and the house were degrading. There were signs of cracking, discolouration, water penetration and delamination from the timber substrate.
11	The applicant returned to Dales and informed him of his concerns. Rod is said to have said “the stuff just doesn’t stay on” and said that he would talk to the Qantum sales representative.
12	The applicant described 6 months of frustrated attempts to get a visit from the respondent’s representative.  He alleges that it was only the VCAT application that prompted the respondent to send a representative to the site to inspect the complaint about their product.  
13	The inspection was conducted by Tony Italia in the presence of the applicant on 21 September 2017. When shown an example of where the joint of the timber frame had flaked Mr Italia is alleged to have said that “it is not the job of the coating to seal the timber’.
14	He was shown examples of where the product had delaminated to the bare timber, notwithstanding the application of a primer.
15	He indicated to the applicant that the product was not meant to be used in a situation like this – and when questioned is reported to have said - “a totally exposed area”.  The applicant’s evidence is that Mr Italia referred him to the statement on the product label where it said that it should “be used in a partly shaded area”. The applicant responded saying that they were standing in a partly shaded area. When the applicant asked Mr Italia what “partly shaded” meant he is reported to have said “in under a veranda”.  The applicant said that he remarked to Mr Italia that the product label does not say that. 
16	Mr Italia is described by the applicant as being shocked and saying that the product had to come off as it is a skin coat and should never be used in this way (meaning the application by the applicant).
17	The applicant said that he asked Tony Italia about the Nanoloc Primer – which says on its label that it can be used as a stand-alone finish and does not restrict it to “part shade”. 
18	Mr Italia is said by the applicant to have agreed that it can be used that way, but that it should be tinted.
19	The applicant said that he voiced his frustration to Mr Italia and Mr Italia appeared to concur with the applicant’s comment that the products are not true exterior products.
20	Mr Italia said to the applicant that the product has to come off.  The Qantum product he recommended was Qstrip; that it could be slapped on, left for 40 minutes, and then washed off with a high-pressure hose.  The applicant describes being left with the impression that Tony would provide the product. It was supplied, but at a marginal discount.
21	The applicant’s recollection of his conversation with Mr Italia is that he said that the applicant’s experience was not uncommon, that the product is best under a veranda, and that it does not seal timber.
22	The applicant produced photographs which showed the weathering of the window frames and areas where water had clearly entered in the seams of the joinery, other areas were flaking or had completely lost the coating.
23	Due to his workload the applicant sought a quote from a local painter (Debtones Painting Service) to do the stripping and repainting. The estimated cost was $14000. The quotation was qualified to apply only so long as the stripping process required no more than Tony Italia had described.
24	The high estimated cost of remedial work was not able to be absorbed by the applicant or his client.  The applicant decided to do the work himself with some contract labour to assist. He trialled the stripping process and found that it took up to 4 applications of the product and scraping, wire brushing, and sanding to bring the surfaces back to treatable condition.
25	The applicant provided photographs of the windows and doors at various stages of the process, the quotation for Debtones Painting Services, invoices for labour to rectify the damage and invoices for supply of the product by Dales 
26	The applicant’s evidence is that he started sap stripping in January 2017.  There are two invoices for the sap stripping product dated 16 January and 9 February from Dales Discount Paints to Das Institute – the company used by the applicant to purchase the paint. 
27	A statutory declaration by Jean Lucchesi was submitted in support of the applicant’s evidence of sap stripping the timber prior to applying the Qantum primer and finish.
28	The applicant’s evidence is that the products were applied to windows on all sides of a building and that he applied the product according to the instructions. He conceded that he did not apply three coats.
29	The product started to disintegrate within 3 months – peeling, flaking and wearing.  From the photographs provided it appears to be most serious where weather and possibly water have the most immediate and severe impact on surfaces. 
30	The applicant claims that the product supplied by the respondent was totally inappropriate for the use it was put to and it failed. His evidence is that he sought the advice of the owner of the paint shop which sold the product. He made his intended use known to the sales person. He applied it according to the instructions.  He contends that the label on the product says that it is exterior paint suitable for doors and windows.  It was applied to windows and doors. 
31	The applicant provided a statement from Rod which supported the applicant’s history of the events. Rod’s statement also states that he was asked to provide Mr Italia with invoices providing proof of purchase of the products by the applicant. He writes that he prepared the invoices, but that they were never collected. He also states that he had never had any product training by the manufacturer or distributor of Qantum.
32	The applicant’s claim does not include the costs associated with the first application of the Qantum products – assuming responsibility for this personally. His claim for $22369.00 is for the cost of the products for the second stage of the project, the cost to remove the product and apply another product, the VCAT fee and other miscellaneous claims. It does not include the work on the studio or the paint used on the windows and doors after the removal of Microclear.
The respondent’s evidence
33	The respondent’s case is that the applicant did not apply the products correctly; did not follow the label which says it is for use in shaded areas only; and according to Mr Taylor, that if he wanted a product to last, he should have used a different product or added a tint.
34	The statement of Tony Italia and his comments attached to the Points of Claim are 
•	that he did not tell the applicant that the product was mislabelled
•	that the product had been misused
•	that his assessment was that here was a lot of tannin leak which would only occur if the sap stripping had not been done.
35	In response to the allegation by the applicant that he had said that the paint was not intended as a sealer, Mr Italia says that he said that damage to the windows was because they had not been properly sealed and treated before installation and that there should be a silicone seal between the timber windows and other building surfaces.  
36	In relation to the product description on the label, the respondent denies any misrepresentation.  Mr Taylor said that it is generally known and accepted that water-based timber finishes are generally unsuitable for exterior use. They are not a protective coating. They need to be reapplied regularly, even annually. Any person engaged in the painting industry to the extent that the applicant presents himself should know that. They should also know how to apply paint. 
37	Mr Taylor referred to Mr Italia’s statement where it said that Mr Italia told the applicant that he had failed to apply the paint according to basic tenets of painting and Mr Italia’s denial that he said that ‘exterior’ in relation to these products means ‘under a veranda’. 
38	The respondent challenged the applicant’s evidence in respect of his actual purchases. He produced some records of product sold by his company to the Dales.  They are extracts from sales and supply records for part of the relevant time – not entirely consistent with the receipted purchases by the applicant.
39	In response to my question as to what semi-shaded means, the respondent said that it that means any vertical surface. It did not require protection of eaves.  His explanation was that any vertical surface by its nature will be shaded.  That most windows will only receive sun 5-6 hours per day and are therefore semi-shaded.  
40	The respondent informed the Tribunal that timber stains are by their nature potentially unstable and not as durable as coatings.  In his opinion any “professional” painter or trade painter would know that primer which is tinted would extend the life of the coating and that if these products are used you could not expect more than one year up to a maximum of five years. People reapply annually.
41	The respondent when asked about the possible consequences of the failure to apply three coats said it would be considerable but did not elaborate.
42	The respondent contended that a professional painter would not have bought this coating. It is a boutique product. And there are no guarantees as to how long it will last.
The applicable law
43	The Australian Consumer Law (ACL) contains prohibitions for people acting in trade or commerce from engaging in conduct that is misleading, deceptive (Section 18) or unconscionable (Section 20). 
44	The ACL also prohibits a person acting in trade or commerce from making false or misleading representations (Section 29(a)) or engaging in conduct which is liable to mislead the public as to the suitability of goods for their purpose (Section 33) and what damages can be allowed. 

45	The above-mentioned sections fall within Chapter 2 and 3 of the ACL.
46	Sections 182 and 184 of the Australian Consumer Law and Fair Trading Act 2012 empower the Tribunal to hear “consumer and trader disputes”, as defined. 
47	Where the Australian Consumer Law does not apply, a party may be able to rely on the statutory warranties regarding fitness for purpose or merchantable quality in section 19 of the Goods Act 1958 (Vic) which apply in certain circumstances to the sale of goods. 
The issues for determination in this matter are -
a	Was the purchase of Qantum Microclear “in trade or commerce”?
b	Was the respondent’s conduct in breach of section 18, section 20, section 29(a) or section 33 of the ACL?
c	Is so, what was the loss incurred by the applicant?
Findings 
48	The applicant purchased the products with a view to using them for his business. The respondent is in the business of manufacture and sales of timber products. The nature of the operations of the parties independently and in this transaction is one of trade and commerce.
49	I accepted the applicant’s history of the events- that he purchased the Qantum products including Microclear from Dales; the sequence of the application; the nature of the disintegration of the product; his conversations with Rod and with Mr Italia. 
50	The Product label presented to me was accepted by both parties as the label on the product in question. 
On the front of the label is written 
“MICROCLEAR 
Clear Urethane for Exterior Timber’
In Bold print it is written – 
“EXTERIOR”, and in smaller text 
“Doors Windows Feature Walls Outdoor Furniture”
In prominent text on the back side of the label it says 
“Microclear Exterior”
In less prominent text
“DESCRIPTION: MICROCLEAR is a single pack hardwearing water clear, fast drying coating with a smooth flow and self-levelling finish”

	“WHERE TO USE: MICROCLEAR is suitable for Doors and Windows (external and internal) Feature Walls and Outdoor Furniture. For use in semi shaded areas only.”
51	The Microclear label includes instructions for application including – sap stripping, priming plus and three coats of product.
52	I accept the applicant’s evidence that he applied the product by sap stripping and applying primer and two coats of product to windows and doors.
53	Despite the inconsistencies, I accept the evidence of the applicant, supported by his invoices from Dales, that he purchased the named products from Dales and that they are the products applied to the building.
54	I accept the invoices provided by the applicant as evidence of the payments made to contractors for work performed on the building to remove the Qantum product totalling $7840.
55	The applicant did not comply with the recommendations for coverage and applied only two coats of Microclear. I accept the evidence of the respondent that this would reduce the longevity of the product.  
56	I am satisfied by the evidence of the applicant that product delaminated and disintegrated within six months of application.
57	The respondent initially said that the product failed because it was not applied in a semi-shaded area.  According to Mr Taylor windows can be considered semi-shaded because they will rarely be in direct sunlight all day.  The horizontal planes of the window frames could conceivably be in full sun. He said that vertical surfaces would most frequently be in semi- shade.  Consequently, it is hardly open to the respondent to claim that the applicant failed to comply with the application directions by applying the product to windows and doors, which by his own explanation are in semi-shade.
58	Mr Taylor’s suggestion that the applicant should have known that the product would not be suitable for the application because it is common knowledge that timber products like these – water based, and environmentally sensitive – are not very durable. That to provide a protective coating they should include a tint. To be successful they require frequent, even annual application.  He suggested that as the applicant claims to be a professional painter he should have known this and prevented the disintegration by including a tint, and at least applying the product in a tradesman-like way according to the directions on the label.
59	The product purchased by the applicant was purchased from a retail outlet. It was described as being a product suitable for application to doors and windows and it would provide a clear finish. Any person entering the retail outlet should be able to ascertain the appropriate use of a product from the label. To all intents and purposes this is a product presented to the public as being suitable for the use to which it was put.
60	If the explanation of semi-shade by Mr Italia is preferred to that of Mr Taylor – then there would be some windows and doors which were in semi-shade.  The evidence of the applicant is that even those areas peeled, flaked and disintegrated.
61	In this case the product label had a direction on the proper application of the product – preparation, priming and then a three-coat application of Microclear. The applicant elected to apply only two coats – risking suboptimal performance of the product. I have formed the view that the disintegration of the product was due in part to the failure to apply a third coat. 
62	I accept the explanation of Mr Taylor in relation to the nature of the product purchased and used by the applicant. However, Mr Taylor did not satisfy me in any way that it is well known that products like Microclear should not have been applied to external windows and doors with any expectation that it would provide some protection for the timber for a reasonable time. 
63	Microclear is a timber treatment. It is, I believe, a reasonable expectation that an exterior timber treatment – paint or coating – applied to new timber doors and windows will provide some protection from the elements. That is surely the main reason paints and treatments exist and are used.
64	There is nothing on the label of this product which informs the ordinary person who might go into the local paint shop that this product will probably not withstand direct exposure to the elements without significant reduction in the lifespan and possible damage to surfaces or that it should only be applied where direct exposure is avoided and that frequent application will be required to maintain the integrity of the product.
65	I find that the respondent misled the applicant and potentially the public by presenting its product as being a durable timber treatment suitable for application to external surfaces including windows and doors in breach of section 33 of the ACL.
66	In relation to the applicant’s claim that the product is defective – no substantive evidence was presented.  The respondent’s evidence is that large amounts of the product are manufactured and there is no suggestion other than this instance of it being faulty.  The application insofar as it related to the claim of defective product is dismissed for want of prosecution.
Conclusion
67	In summary, I concluded that 
a	Microclear is described on its label as a product for application on exterior surfaces including windows and doors, and it was applied by the applicant on windows and doors;
b	That there is a recommendation on the Microclear label that it be applied to surfaces in part shade. It was applied in the most part to surfaces in part shade;
c	The product being a product for exterior use could be expected to have some exposure to sun and water and provide protection from the adverse effects of that. It did not;
d	The normal use of the product is on doors and windows – which by normal standards and expectations are not repainted annually;
e	The product was available to the public and is not a trade only product so the respondent is not able to rely on the applicant’s special knowledge of painting;
f	There is no information for the purchaser of this product to inform that this product may be suitable for external use where applied to surfaces with minimal exposure to the elements and that it requires regular reapplication; 
g	The applicant did not mitigate his loss because he applied less than the recommended coverage.
h	The claim for damages is accepted subject to a reduction of 40% due to the failure to mitigate.

S. Burdon-Smith
Senior Member