Federal Court of Australia

Star Kingdom Investments Pty Ltd v Camatic Pty Limited [2024] FCA 329

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth) and r 26.01 of the Federal Court Rules 2011 (Cth), judgment be entered in favour of the defendant in relation to the whole of the proceeding.

2.    The plaintiff pay the defendant’s costs as agreed or assessed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

MEAGHER J

INTRODUCTION

1    By an interlocutory application filed on 19 January 2024, the defendant sought the following orders:

1.    Pursuant to section 31A of the Federal Court of Australia Act 1976 (Cth) (FCA) and/or Rule 26.01(1) of the Federal Court Rules 2011 (Cth) (the Rules), the Respondent/ Defendant have summary judgment against the Applicant/Plaintiff on the whole or part of the proceeding.

2.    Further, or in the alternative, pursuant to Rule 16.21(1) of the Rules, and/or section 37P of the FCA, the following paragraphs of the Applicant/Plaintiff's Statement of Claim be struck out:

(a)    paragraph 1(c);

(b)    paragraph 8;

(c)    paragraph 9; and

(d)    paragraph 17,

or, further or alternatively, that the Statement of Claim be struck out, because those paragraphs and/or the Statement of Claim fail to disclose a reasonable cause of action or are otherwise an abuse of the process of the Court.

3.    Further, or in the alternative, pursuant to Rule 2.02 of the Rules and/or section 48 of the FCA, the proceeding be transferred to the Victorian District Registry of the Federal Court of Australia.

4.    Such further or other order as this Honourable Court deems fit for the future conduct of the proceeding.

5.    The Applicant/Plaintiff pay the Respondent/Defendant's costs of this Application.

2    For the reasons that follow, the interlocutory application for summary judgment against the whole of the proceeding is allowed. As such, there is no reason to consider the application for striking out and transfer of proceedings.

BACKGROUND

3    The matter is commenced by an originating application filed on 7 November 2023 whereby the plaintiff sought the following relief:

1.    An injunction requiring the Defendant to replace the fabric on the seating supplied and installed by the Defendant.

2.    In the alternative, damages for pursuant [sic] to the ACL and/or for breach of the First Contract and Second Contract in an amount sufficient to replace the fabric on the seating supplied and installed by the Defendant.

3.    Interest on damages.

4.    Further or other relief.

5.    Costs.

4    In the accompanying statement of claim, the plaintiff pleaded that it is a company which operates cinemas. The defendant is a company which manufactures commercial venue seating.

5    On 10 August 2017, the parties entered into a contract for the supply and installation of cinema seating at the Elizabeth Street cinema which the plaintiff operates (First Contract). The contract sum for the First Contract was $296,241.00. Subsequently, on 12 September 2019, the parties entered into a contract for the supply and installation of cinema seating at the Red Hill cinema which the plaintiff operates (Second Contract). That contract was for the sum of $515,597.25.

6    In its statement of claim, the plaintiff pleaded that the defendant breached the contract terms and the statutory guarantee imposed by s 54 of the Australian Consumer Law (ACL), being Schedule 2 of the Competition and Consumer Act 2010 (Cth), that the seating would be of acceptable quality and fit for purpose. The contract terms which the plaintiff referred to were ones imposed by s 17 of the Sale of Goods Act 1896 (Qld) (SGA) and s 19 of the Goods Act 1958 (Vic) (GA). As to the relevant breaches, the plaintiff pleaded:

9. In breach of the above term of the First Contract and Second Contract and the guarantee, the fabric on the seating supplied and installed by the Defendant was not of acceptable quality and fit for all purposes because the fabric within 3 years of installation:

(a) crazed;

(b) chipped;

(c) flaked;

(d) detached from its lower surface;

(e) displayed a change of colour in patches; and

(f) became unsightly.

State Legislation

7    The defendant submitted that the guarantees contained in s 17 of the SGA and s 19 of the GA had been contracted out of in both of the relevant contracts. Pursuant to s 56 of the SGA and 61 of the Goods Act, protections under the Acts may be excluded by express agreement.

8    Clause 7 of the First Contract provides:

All warranties whether express or implied and whether statutory or otherwise with regard to the goods supplied by the Company as to quality, fitness for purpose or any other matter are hereby excluded except in so far as any such warranties are incapable of exclusion at law.

Warranty periods excludes upholstery (fabric, leather & vinyl) and is based on a single shift usage only

9    Clause 9.1 of the Second Contract similarly provides:

9.1 All warranties implied by an Act of Parliament are, to the extent that they may be legally excluded, hereby excluded.

10    At the interlocutory hearing, the plaintiff indicated they no longer pressed this argument.

ACL Statutory Guarantee

11    As the contract price of both contracts exceeds the prescribed amount of $100,000.00 pursuant to s 3(1)(a) of the ACL, the defendant submitted that the question turns on whether the goods supplied were ‘of a kind ordinarily acquired for personal, domestic or household use or consumption’; s 3(1)(b) ACL.

12    To that end, the defendant submitted that the plaintiff’s position that it is a consumer has no reasonable prospect of success on the basis that:

(a)    the evidence put forward by the defendant reasonably excludes that the plaintiff is a consumer for the purposes of s 3 of the ACL;

(b)    the evidence put forward by the plaintiff is not of sufficient quality and weight to succeed at trial; and

(c)    the fact that goods may be capable of being adapted for personal or domestic use is not sufficient to render them commercial goods.

the evidence

13    The defendant referred to the affidavit of Mr Fisher, who is the Executive Director of the defendant, wherein it is deposed:

5.    ... Camatic’s cinema seating products are especially designed for the cinema market.

…

22.    I have access to Camatic’s invoice and contract system, and I have reviewed it for the purposes of preparing this affidavit and confirm that Camatic only supply commercial quantities of cinema seating and only to commercial cinema operators. Camatic very rarely supples less than 300 seats for any one project.

14    Mr Fisher’s evidence also disclosed that the plaintiff had purchased approximately 800 cinema seats pursuant to the two contracts and that the supplied seats were designed such that they are able to be connected together and can be configured in rows of 10 or 20 seats with standalone tables tailored to fit the seating.

15    In relation to the interlocutory application, the plaintiff relied on the affidavits of Mr Peter Sourris, the general manager of the plaintiff’s cinema, and Mr Benjamin Harlow, the plaintiff’s solicitor, both dated 29 January 2024.

16    Mr Sourris deposed as follows:

16. On 23 January 2024, I telephoned Michael Hartog, who was the contractor responsible for installing the seating at both the Elizabeth Street cinema and the Red Hill cinema on behalf of the Respondent. Mr Hartog is responsible for installation of the Respondent’s seating. During our telephone conversation, Mr Hartog told me, and which I verily believe, that he was contracted by the Respondent to install approximately ten (10) reclining cinema seats (two rows) in the style of the Respondent’s “Valencia” series in a residential home in Red Hill, Queensland, in the immediate vicinity of the Red Hill cinema.

17. On 23 January 2024, I telephoned Michael Bevanda. Mr Bevanda was employed by the Respondent in various capacities over the course of twenty-three (23) years. During our telephone, Mr Bevanda told me, and which I verily believe, that the Respondent sells their cinema seating for domestic use. Mr Bevander recalled that the Respondent had installed either ten (10) or twelve (12) “Gold Class Odeon” reclining motorised chairs with tables in a Sydney residence occupied by Shaun Bonett.

17     Mr Harlow deposed, inter alia, as to enquiries he had made as to the willingness of four cinema seating businesses to provide seating for a home cinema.

legislative framework

18    Section 31A of the Federal Court of Australia Act 1976 (Cth) provides:

31A Summary judgment

(1)    The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:

(a)    the first party is prosecuting the proceeding or that part of the proceeding; and

(b)    the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceeding or that part of the proceeding.

(2)    The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:

(a)    the first party is defending the proceeding or that part of the proceeding; and

(b)    the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.

(3)    For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:

(a)    hopeless; or

(b)    bound to fail

for it to have no reasonable prospect of success.

(4)    This section does not limit any powers that the Court has apart from this section.

(5)    This section does not apply to criminal proceedings.

19    Pursuant to rule 26.01(1) of the Federal Court Rules 2011 (Cth), a party may make an application seeking summary judgment:

26.01 Summary judgment

(1)    A party may apply to the Court for an order that judgment be given against another party because:

(a)    the applicant has no reasonable prospect of successfully prosecuting the proceeding or part of the proceeding; or

(b)    the proceeding is frivolous or vexatious; or

(c)    no reasonable cause of action is disclosed; or

(d)    the proceeding is an abuse of the process of the Court; or

(e)    the respondent has no reasonable prospect of successfully defending the proceeding or part of the proceeding.

20    The power conferred by section 31A of the Act reflects a broadening of the Court’s power to deal with unmeritorious and unsustainable claims. In Spencer v The Commonwealth of Australia (2010) 241 CLR 118; [2010] HCA 28, the majority (per Hayne, Crennan, Kiefel and Bell JJ.) considered the nature of the reasonable prospect of success test at [52]:

Second, effect must be given to the negative admonition in subs (3) that a defence, a proceeding, or a part of a proceeding may be found to have no reasonable prospect of successful prosecution even if it cannot be said that it is “hopeless” or “bound to fail”. It will be necessary to examine further the notion of “no reasonable prospect”. But before undertaking that task, it is important to begin by recognising that the combined effect of subss (2) and (3) is that the enquiry required in this case is whether there is a “reasonable” prospect of prosecuting the proceeding, not an enquiry directed to whether a certain and concluded determination could be made that the proceeding would necessarily fail.

21    Further, the prospect of success must be “real” as opposed to “fanciful” or “merely arguable”; White Industries Aust Ltd v Commissioner of Taxation (2007) 160 FCR 298; [2007] FCA 511 at [59].

22    Therefore, in determining whether a proceeding ought to be summarily dismissed, the Court is to have regard to matters of substance, rather than pleading points and form: Shumack v Commonwealth of Australia [2009] FCA 775 at [14]. This will necessarily involve a “prediction of the outcome of a trial on the merits but is not an actual adjudication of those merits”; Jefferson Ford Pty Ltd v Ford Motor Co of Australia Ltd (2008) 167 FCR 372; [2008] FCAFC 60 (per Rares J) at [45]. Such applications are not intended to act as a “mini-trial on the documents” but ought to dispose of the cases which “are not fit for trial at all”: Spencer at [21] (per French CJ and Gummow J), citing Three Rivers District Council v Bank of England (No 3) [2003] 2 AC 1 at [95].

23    Where there is a factual dispute, Gilmour J in Nyoni v Chee Koon Hee (No 4) [2013] FCA 948 at [14], citing Jefferson Ford, stated, “the Court must decide whether the opposing party has evidence of sufficient quality and weight to be able to succeed at trial.”

24    In Pathmanathan v Healthscope Operations Pty Ltd [2020] FCA 65 at [8], Steward J helpfully summarised the principles relating to summary judgment:

…

(1)    the legislative purpose of s 31A is to strengthen “the power of the court to deal with unmeritorious matters by broadening the grounds on which federal courts can summarily dispose of unsustainable cases”: Second Reading Speech of the Migration Litigation Reform Bill 2005 (Cth);

(2)    the moving party bears the onus of persuading the court that the opponent has no reasonable prospect of success: Australian Securities and Investments Commission v Cassimatis (2013) 220 FCR 256 at 271 [46] per Reeves J.; Crayford Freight Services Ltd v Coral Seatel Navigation Co (1998) 82 FCR 328 at 333 per Burchett, Ryan and Marshall JJ;

(3)    assessment of whether a proceeding or a part of a proceeding has no reasonable prospect of success will necessarily require: (i) identification of the cause of action pleaded; (ii) identification of the pleaded facts said to give rise to that cause of action; (iii) a review of the evidence (if any) tendered in support of the claim for judgment; (iv) identification of the defence pleaded; (v) identification of any facts pleaded which are said to give rise to the defence; and (vi) a review of the evidence (if any) tendered in defence of the claim: Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd (2008) 167 FCR 372 at 406 –407 [126] per Gordon J.;

(4)    once a moving party has established a prima facie case that the opponent has no reasonable prospect of success, the opposing party must respond by pointing to specific factual or evidentiary disputes that make a trial necessary; general or non-particularised denials will be insufficient to defeat the motion; Jefferson Ford Pty Ltd at 407 [127] per Gordon J. citing Fortron Automotive Treatments Pty Ltd v Jones (No 2) [2006] FCA 1401 at [22] per French J. (as his Honour then was);

(5)    summary disposition of a proceeding is authorised on a variety of bases. It will, for example and without limitation, be appropriate in a case: (i) in which the pleadings disclose no reasonable cause of action and their deficiency is incurable; (ii) in which there is unanswerable or unanswered evidence of a fact fatal to the pleaded case and in any case which might be propounded by permissible amendment; or (iii) that is “frivolous or vexatious or an abuse of process”: Spencer v Commonwealth (2010) 241 CLR 118 at 131 [22] per French CJ and Gummow J.;

(6)    the determination of a summary dismissal application does not require a mini-trial based upon incomplete evidence to decide whether a proceeding is likely to succeed or fail at trial. Instead, it requires a critical examination of the available materials to determine whether there is a real question of law or fact that should be decided at trial: Cassimatis at 271 [46] per Reeves J.; and

(7)    an application for summary dismissal is likely to succeed if the moving party is able to demonstrate that the applicant’s success in the proceeding relies upon a question of fact that can be truly described as “fanciful, trifling, implausible, improbable, tenuous or one that is contradicted by all the available documents or other materials”: Cassimatis at 272 [47] per Reeves J. 

consideration

State Legislation

25    I am satisfied that each of the relevant clauses contained in the First Contract and the Second Contract clearly exclude the statutory warranties in the SGA and GA. The application thus has no reasonable prospect of success on those bases, and in any event is no longer being pressed.

ACL Statutory Guarantee

26    The question of whether summary judgment should be granted in favour of the defendant thus rests on whether section 54 of the ACL could apply to the plaintiff. Section 54 of the ACL applies where a person supplies goods, in trade or commerce, to a consumer. A consumer is relevantly defined in section 3 of the ACL as follows:

3 Meaning of consumer

Acquiring goods as a consumer

(1) A person is taken to have acquired particular goods as a consumer if, and only if:

(a)    the amount paid or payable for the goods, as worked out under subsections (4) to (9), did not exceed:

 (i) $40,000; or

 (ii) if a greater amount is prescribed for the purposes of this paragraph—that greater amount; or

(b)     the goods were of a kind ordinarily acquired for personal, domestic or household use or consumption; or

(c)     the goods consisted of a vehicle or trailer acquired for use principally in the transport of goods on public roads.

27    As submitted by the defendant, the contract price for both contracts exceeds the amount provided for in s 3(1)(a)(ii) of $100,000.00, as prescribed by regulation 77A of the Competition and Consumer Regulations 2010 (Cth). Therefore, the plaintiff may only be a consumer if the goods were of a kind ordinarily acquired for personal, domestic or household use or consumption.

28    In that respect, both parties referred to Bunnings Group Limited (formerly Bunnings Pty Ltd) v Laminex Group Limited [2006] FCA 682. In its submissions, the plaintiff cited various passages in Bunnings (which refer to the predecessor to the ACL, the Trade Practices Act 1974 (Cth)) as follows:

[42] The applicant accepts that the particular goods in issue in this proceeding, namely Sisalation 496, Sisalation 498 and Permastop 496, are not ordinarily acquired for personal, domestic or household use or consumption. The respondent accepts that reflective foil insulation products are used in a variety of buildings, including residential buildings, and may be regarded as goods of a kind ordinarily acquired for personal, domestic or household use or consumption. The case therefore turns on the question of how widely or narrowly the genus or kind of goods should be drawn, having regard to the evidence before the Court.

…

[76] … I consider that a uniform approach should be adopted when construing the definitional phrase found in s 74A(2)(a) and in other provisions of the TPA. Moreover, in my opinion, the statutory phrase should be construed broadly, wherever it appears in the TPA, so as to give the fullest relief which the fair meaning of its language will allow.

The Proper Construction of Section 74A(2)(a)

[77] In general terms, the authorities provide relatively clear guidance as to the way in which the phrase ‘goods of a kind ordinarily acquired for personal, domestic or household use or consumption’ should be construed and applied. Many of the relevant authorities, however, concern the meaning and application of similar but not identical expressions found in sales tax legislation or tariff classification legislation, and care must be exercised in translating what was said in those contexts to the present context.

[80] In my opinion, several propositions of relevance to this case can be extracted from the authorities.

[81] First, the word ‘ordinarily’ means ‘commonly’ or ‘regularly’, not ‘principally’, ‘exclusively’ or ‘predominately’: see Clean Investments at 273 [97] per Lindgren J; Chubb at 560 per Burchett J, and at 57 per Hill J; Hygienic Lily at 399-400 per Gummow J. …

[82] Secondly, it is preferable to pose the statutory question (ie the question whether the goods in issue in the particular case are goods of a kind ordinarily acquired for personal, domestic or household use or consumption) as a single composite question: see Clean Investments at 273 [91]-[93] per Lindgren J; Diethelm at 472 per Hill J; and Chubb at 559[F] per Burchett J. This can be contrasted with a two-stage inquiry as to, first, the genus of goods in question, and secondly, whether that kind of goods is ordinarily acquired for personal, domestic or household use or consumption. As Lindgren J pointed out in Clean Investments, posing the genus question separately as a threshold one runs the risk of prejudging the answer to the statutory question. His Honour said at 273 [92]–[93]:

‘In some cases it may be misleading to address separately the question of identification of the “genus” to which the particular goods in question belong, and the question whether that genus meets the description “ordinarily used for household purposes”. The problem can be indicated by the question “What kind of goods is the Item speaking of?” Answering the genus question separately as a threshold one will assume, without making explicit, an answer to this question.

Goods and purposes can be equally correctly described in different ways, in particular, broadly or narrowly, yet the description selected may dictate the answer to the statutory question. For example, an architect’s stool, an office chair and a kitchen stool or chair may be described as “stools” or “chairs” and their purpose as being “to provide seating”. Yet it would be wrong to conclude that the architect's stool or the office chair is of a kind ordinarily used for household purposes for no other reason than that, like the kitchen chair, it is ordinarily used for the purpose of providing seating.’

French J drew attention to the same risk in Diethelm at 465:

‘It cannot be enough to say that because some goods fall into a genus wide enough to encompass goods ordinarily used for household purposes, they are therefore “goods of a kind ordinarily used for household purposes”. The mere fact that office chairs and domestic chairs both provide “seating”, which in some applications is a household purpose, is not sufficient to establish that office chairs are of a kind ordinarily used for household purposes.’

To my mind, the risk to which their Honours draw attention is a real one. I agree that it is preferable to pose the statutory question as a single composite question. On my reading, that was the course adopted by French J in Diethelm and, I think, by both Hill J and Tamberlin J in Chubb.

[83] Thirdly, depending on the precise statutory question and the circumstances of the particular case, it will be relevant to inquire as to the essential character of the goods in question.

…

[86] In my opinion, in the context of s 74A(2)(a) of the TPA, the essential character test is relevant, but the inquiry does not end there. The statutory question cannot be answered without a broader inquiry into the evidence concerning the design, marketing, pricing and potential uses of the type of goods in question.

[87] Fourthly, the question posed by s 74A(2)(a) is ultimately a question of fact and degree. …

…

[92] In Carpet Call, Thomas J considered that carpet installed in a nightclub was within the scope of the statutory phrase. It was unnecessary for Thomas J to discuss the point at length as he decided the case on other grounds, but his Honour observed at 57,187:

‘In my view “carpet” is a commodity, or goods, ordinarily acquired for domestic consumption, and it does not lose that description by reason of a commercial rating, or some quality which makes it last longer than other carpet normally supplied for use in a domestic setting. In fact the carpet supplied (as to which the warranty is alleged to apply) was of a domestic rating. The point may deserve discussion at greater length, but for the purpose of noting the submissions and expressing a provisional view, it is not necessary to engage in such discussion here.’

…

[107] There is an obvious difference between these sales tax cases and s 74A(2)(a) of the TPA. Section 74A(2)(a) refers to ‘goods of a kind ordinarily acquired for personal, domestic or household use or consumption’ (my emphasis). Even more clearly than the words ‘ordinarily used for’, this language invites attention to design features and purposes, cost quality and pricing considerations, and the range of uses and applications for the goods which have been targeted in advertising and promotional material. I see no reason why the permissible range of evidence should not extend to what French J called ‘the commercial realities of [the] manufacture and sale’ of the relevant goods and, as Tamberlin J suggested, similar goods made by other manufacturers. Nor do I see any reason why the use of this evidence is to be confined to the ‘genus’ question (assuming it is to be addressed separately), rather than being used to assist more broadly in determining the composite statutory question.

[108] I therefore accept that a broad range of evidence may be relevant and potentially useful in answering the statutory question. At the same time, I recognise the importance of bearing constantly in mind that the statutory question is whether the goods are of a kind ordinarily acquired for personal, domestic or household use or consumption. Care must be taken to ensure that the detail of the evidence does not blur this question, or distract the Court from the appropriate inquiry. It would, for example, be a mistake to become so focused on the properties, attributes and intended and advertised uses of the particular goods that the Court fails to address the statutory question. This risk would materialise if the kind of goods were to be identified so narrowly that it amounted to little more than a description of the particular goods.

The Products Fall Within Section 74A(2)(a)

[109] The question to be answered is whether Sisalation 496, Sisalation 498 and Permastop 496 are goods of a kind ordinarily acquired for personal, domestic or household use or consumption within the meaning of s 74A(2)(a) of the TPA.

[110] Both parties submitted that the question which I must answer is, in many respects, a matter of impression and degree. No doubt that is so, but I prefer to see the question as one that calls for an evaluative judgment that is informed by the language and context of s 74A(2)(a), the legal principles I have discussed, and the range of evidence and facts to which I have referred.

[111] I have carefully considered all of the facts and evidence concerning the characteristics, use, marketing, pricing and history of the products and of similar products. I attach particular significance to the following facts:

…

[112] It is correct, as the respondent argues, that white-faced foil laminates have special attributes and applications. They are, and were at all relevant times, significantly more expensive than uncoated reflective foil laminates, and are in fact used almost exclusively in commercial and industrial applications. However, as the applicant’s experts said, there is nothing other than price that would make them unsuitable for use in residential applications. The respondent contends that the special attributes, special applications and greater cost of white-faced and other decorative foil laminates render them so distinctive that they must be regarded as goods of a different kind from reflective foil laminates. I do not accept this contention.

[113] Having regard to the whole of the evidence, I am satisfied that the products are goods of a kind ordinarily acquired for personal, domestic or household use or consumption within the meaning of s 74A(2)(a). In reaching this conclusion, I have taken into account the differences in marketing, price, attributes and ordinary use of the products by end users upon which the respondent relies. I have also taken into account the common features and applications of reflective foil laminates and whitefaced foil laminates. In my opinion, the proper characterisation of the products must give due weight to the three essential properties of the products. They are and were acquired and used in building constructions because they possess those essential properties. To classify the products narrowly on the basis of the particular feature that the foil face is coated with polypropylene would give undue weight to this single facet or characteristic of the particular products, and would misapply the statutory phrase.

29    The plaintiff argued that the defendant’s evidence that it only supplies ‘commercial quantities of cinema seating’ is not relevant to the statutory test as the test is concerned not with commercial quantities, but the goods themselves. In that regard, the plaintiff referred to the evidence of Mr. Sourris as set out in paragraph 16 above. The plaintiff submitted that an arguable case therefore exists for the proposition that the cinema seating would be of a kind described in s 3(1)(b) of the ACL.

30    In response, the defendant submitted:

Mr Souris’ evidence establishes that installers used by Camatic have installed cinema seats manufactured by Camatic in two instances in private homes (paras 16-17). That does not detract from Mr Fisher’s evidence that the seats are especially designed for the cinema market and “very rarely” does Camatic sell less than 300 seats for a single project. Neither example shows that the seats were marketed or sold by the Respondent for the domestic market. Mr Souris’ evidence in fact tends to support the point that the goods in this case are not of a kind ordinarily acquired for personal, domestic or household use.

31    On the evidence before me, I agree with the defendant’s submission.

32    As identified by both parties, Bunnings provides that ‘ordinarily’ is to mean ‘commonly’ or ‘regularly’, rather than ‘exclusively’ or ‘principally’. This test is not satisfied when the evidence might disclose two incidents of the cinema seating being supplied for home theatres. It is clear that the defendant does not commonly or regularly supply cinema seating for home theatres.

33    The defendant referred to Diethelm Manufacturing Pty Ltd v Federal Commissioner of Taxation (1993) 44 FCR 450 wherein office chairs were considered goods of a kind ordinarily used for household purposes. At 472 – 473, Hill J (Whitlam J agreeing) stated:

I have carefully read the evidence before his Honour. The evidence shows no more than this:

(1) Some persons purchase chairs from Diethelm for use in their own homes.

(2) Chairs similar in appearance to those sold by Diethelm are sold by Freedom Furniture, Ikea and Harvey Norman to customers who, it can be inferred, ordinarily purchase them for use in the home.

(3) Chairs manufactured by Diethelm and other manufacturers of office furniture are mainly sold to purchasers for use in offices.

(4) Nine out of ten homes where there is a computer or where there are student children have chairs of a kind similar to some of the models sold by Diethelm. There is no evidence of the number of homes using such chairs or the ratio of chairs used in such situations to chairs used in an office environment.

The evidence does not, it seems to me, permit a conclusion on the balance of probabilities that any of the types of chairs sold by Diethelm is of a kind ordinarily used for household purposes. …

34    However, as stated in Bunnings at [86], the Court should go beyond the essential character test and consider “the evidence concerning the design, marketing, pricing and potential uses of the type of goods in question”. In this case, the defendant has provided evidence as to the design of the cinema seating, namely that it is designed so that the seats may be connected to one another so as to be able to create rows of 10 or 20 seats as appropriate to fit the space in question. To install the seating, the defendant fixes each seat to the substrate of the floor. It appears that much of the design of the seating is tailored to the commercial cinema market.

35    As to the pricing of the seating, the defendant submitted that the unit price of each seat ranges from $565 and $1690. By way of contrast, the evidence of Mr Harlow is that he was quoted $5,500 inclusive of GST for a single “Blanchett” chair by Wavetrain Cinemas, a home cinema company. On this basis, the defendant’s submission, with which I agree, is that there is a distinction between the markets for commercial cinema and domestic “home cinema” seating.

36    In respect of marketing, Mr Fisher deposed that the defendant markets only to large commercial enterprises and does not market to the domestic market. The defendant’s homepage provides that the defendant installs seating solutions for ‘stadiums, arenas, cinemas, theatres, educational institutions and transit areas around the world’. This is consistent with Mr Fisher’s evidence that it is very rare for the defendant to sell less than 300 seats on one project. On that basis, it is quite clear that the defendant markets its cinema seating to commercial enterprises.

37    As to the plaintiff’s case, I do not consider Mr Harlow’s evidence, that some companies are willing to supply seating for a home theatre, to be of assistance. I am not satisfied that this is relevant to whether the goods supplied in this instance are of a kind ordinarily acquired for personal, domestic or household use. Further, as submitted by the defendant, it appears that the examples which have been put forward by the plaintiff either specify that the quoted seats would be ‘home cinema seating’ or the company specialises in home cinemas. With respect to the “Tchaikovsky Zero” seats from Alloyfold Australia, to which Mr Harlow referred, the defendant noted that the marketing material demonstrates that the seating is ordinarily used for commercial purposes. Further, the defendant referred to the 5-year commercial warranty and the reference to ‘maximising return on investment’ in the marketing material. It is thus clear that the examples provided do not establish that the cinema seating supplied by the defendant was ordinarily, commonly or regularly acquired for personal, domestic or household use.

38    In relation to the plaintiff’s argument that Mr Sourris’ evidence results in an ‘arguable’ case that the cinema seating would be of a kind described in s 3(1)(b) of the ACL, a merely arguable case is not sufficient; White Industries at [59]. Goods are not commonly or regularly used for domestic or household purposes simply because they have, in rare instances, been supplied for those purposes. I am not satisfied that a reasonable prospect of success exists in this instance.

39    It ought to be noted that in his oral submissions, counsel for the plaintiff also submitted that s 3(10) of the ACL reverses the onus of proving that a party is a consumer where it has been alleged that they are a consumer. Therefore, the plaintiff submitted, as it has pleaded that it is a consumer, the onus is on the defendant to disprove that presumption. The plaintiff’s case was that as there was a question of fact, it ought not be decided on an application such as this.

40    The defendant submitted that the presumption applies “only to a certain degree” having regard to the statements in Jefferson Ford at [23] (Finkelstein J) and [125] and [126] (Gordon J). In this case, I do not need to decide that given the nature of the evidence. As noted by Rares J in Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd [2006] FCA 1352 at [45], a real issue of fact exists where the evidence is contested and “might reasonably be believed one way or the other so as to enable one side or the other to succeed”. Nothing on the evidence before me could reasonably support the finding that the plaintiff is a consumer and as such, there is no real question of fact to be determined. In George v Fletcher [2010] FCAFC 53, the Full Court (per Ryan and Logan JJ) noted at [75]:

The mere presence of a factual controversy, however trifling, implausible, tenuous or tangentially relevant is not a bar to the exercise of the power conferred by s 31A to grant summary judgment. That would be inconsistent with the way in which the phrase ‘no reasonable prospect of success’ is to be read in light of s 31A(3) (and s 17A(3)).

41     In this case, for the reasons above, I am satisfied that there is no real question of fact or law that is to be determined at trial.

conclusion

42    As I am not satisfied that the plaintiff has a reasonable prospect of success in this proceeding, the interlocutory application for summary judgment against the whole of the proceeding is allowed. Costs ought to follow the event. I will make those orders accordingly.

Associate:

Dated:    5 May 2024