Case Note James Spittles v Michael´s Appliance
Services Pty Limited & Ors  NSWCA 76 14 April
Bell JA, Handley AJA and Barr J
The Court of Appeal considered the liability of a
manufacturer for the supply of defective goods under s 75AD
of the Trade Practices Act.
It was common ground that the respondent,
Michael's Appliance Services Pty Limited was a
manufacturer but the trial judge held that it had not
supplied the goods. It was found that the respondent had
worked on the goods as a licensee in the premises of another
but had never had possession of the goods and had not
delivered them to anyone.
We note that s 75AD of the Trade Practices Act
was enacted for the protection of consumers. Section 75AD
(a) a corporation, in trade, supplies goods
manufactured by it; and
(b) they have defect; and
(c) because of the defect, an individual suffers
(d) the corporation is liable to compensate the
individual for the amount of the individual's loss
suffered as a result of the injury; and
(e) the individual may recover that amount by action
against the corporation... "
Section 75AA provides that "manufactured"
Furthermore s 4(1) of the Act defines "supply"
(a) in relation to goods supply (including resupply)
by way of sale, exchange, lease, hire or hire purchase;...
The plaintiff was cleaning the stainless steel panels on
the front of his new Maytag refrigerator when a finger of his
right hand was cut on a razor like burr on the bottom of one
of the panels.
The two-door refrigerator was manufactured in the United
Stated and imported by the first cross-defendant, Maytag
Australia Pty Limited. It was delivered to a warehouse,
operated by an organisation described as M3 Logistics, which
was not otherwise identified.
The refrigerators were black and, to improve their
marketability in Australia the doors were covered in
stainless steel cladding.
The stainless steel panels were sold by the second
cross-defendant to Maytag Australia and delivered to the
The respondent was engaged by Maytag Australia to fix the
panels to the refrigerators which were then delivered by
Maytag to retailers. The plaintiff purchased the refrigerator
from Harvey Norman in 2003.
The respondent fitted the panels to the refrigerator in
the warehouse. In doing so it did not acquire title to the
refrigerators or the stainless panels. Its contract was for
work and labour as evidenced by purchase orders and
District Court Decision
The trial judge, Balla DCJ was congratulated for her
clear and concise findings of fact which are relevantly set
out above. They were not challenged. Her Honour found for the
defendant on the basis that it did not "supply" the
refrigerator and thus s 75AD of the TPA did not apply.
Court of Appeal Decision
It was found that the respondent never had possession of
the Maytag refrigerator. The refrigerator at all times
remained on premises belonging to a third party, on which
employees of the respondent entered and remained as mere
licensees. The respondent was not entitled to remove
refrigerators or the panels from those premises and did not
have dominion over them. The respondent never became a bailee
of the refrigerator and it never had a lien on the
refrigerator for its charges. Possession of the refrigerator
was not given to the respondent.
The position of the respondent was similar to that of a
sub-contractor called in to do work on goods in a factory of
the general manufacturer.
The respondent was a manufacturer in that it
"assembled" the refrigerator in its final form by
fixing the stainless steel panels to it. " However s
75AD does not necessarily apply to every manufacturer. It
only applies to a manufacturer who supplied the goods
The respondent's contract with Maytag Australia
was a bilateral business transaction in trade and commerce,
it was not a sale, exchange, lease, hire or hire purchase or
any analogist transaction which would fit within the
definition of "supply".
There was a supply of services by the respondent to
Maytag Australia but there was no supply of goods. The
refrigerator was never in the respondent's possession
and when it finished the work it did not deliver or redeliver
the refrigerator to Maytag Australia.
Consequently the Court of Appeal affirmed the decision of
her Honour Balla DCJ.
Section 75AD will not apply to persons, such as the
respondent, who work on goods under contract without ever
acquiring title to, or possession of the goods.
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The failure of a party to call a witness does not necessarily give rise to an adverse inference being drawn in accordance with Jones v Dunkel (1959) 101 CLR 298. An unfavourable inference is drawn only if evidence otherwise provides a basis on which that unfavourable inference can be drawn.
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