Liability Of Thermomix In Australia Pty Ltd For Negligence And Violation Of ACL Provisions

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Background of Thermomix in Australia Pty Ltd

Thermomix in Australia Pty Ltd is a company which is situated in Australia. The main task of Thermomix in Australia Pty Ltd is that it imports the Electrical appliances of high end from a German company, Vorwerk & Co. KG. The appliances are produced by the German company in France. In Australia, Thermomix in Australia Pty Ltd sells the appliances with the help of consultants by establishing a contractual relationship with them. These consultants sell the appliances to the customers and the retailers.

It is later discovered that there are several wrongs that are committed by Thermomix in Australia Pty Ltd in negligence, Wrongs Act 1958 and the Australian Consumer Law. Considering the acts of Thermomix in Australia Pty Ltd, ACC brings proceedings in the Federal Court. A brief analysis is done through https://www.choice.com.au/home-andliving/kitchen/all-in-one-kitchen-machines/articles/accc-takes-thermomix-to-federal-court160617 and the few queries are tried to be resolved.

The main issue that requires analysis is the possible liability that might arise against the manufacturer or the distributor of the appliances under the law of negligence. No analysis is done on the question of amount of damages.

The law of negligence is a tort law and is a very important common law that imposes a responsibly upon the manufacture that he must carry his acts and omissions in such manner so that no loss is caused to any consumer because of such acts and omissions. In the leading case of Donoghue v Stevenson, The house of Lords has unanimously submitted that every manufacturer is under an obligation that reasonable precautions must be taken by him so that no injury is caused to any consumer by his actions or inactions.  This duty of care that is imposed on the manufacture in the Donoghue v Stevenson is also imposed on the retailers under the leading case of Grant v Australian Knitting Mills. It was held that no difference is made and reasonable care must be cater by both the manufacturer and the retailers irrespective of the fact whether the consumer can examine the goods prior its usage or not. The duty of care must be catered reasonably and is analyzed in the leading case of Coregas Pty Limited v Penford Australia Pty Limited.

In Donoghue case, there are three basic principles that are laid down according to which if any supplier; distributor or manufacturer does not comply with the same then they can be held liable under the law of negligence. The elements includes:

Analysis of Negligence Liability Under the Law of Negligence

Duty of care –  Every supplier; distributor or manufacturer must carry their tasks in such manner so that no injury is caused to the plaintiff. By to prove duty of care there must be proximity amid the defendant and the plaintiff and the plaintiff must be reasonable foreseeable.

Proximity exists when the defendant and the plaintiff are near and close to each other and the acts of the defendant will affect the plaintiff directly and is held in Caparo Industries Plc v Dickman.

The plaintiff must also be reasonable foreseeable by the defendant. If defendant cannot predict the presence of the plaintiff there is no duty of care and is held in the leading case of Tame v New South Wales.

This, duty of care is now applied in the case of Thermomix in Australia Pty Ltd. Thermomix in Australia Pty Ltd is distributing TM31 @ $2000. So, being the distributor, Thermomix in Australia Pty Ltd must make sure that no injury should be caused to the consumer of TM31 because of the usage of the same by applying the law in Grant v Australian Knitting Mills. The consumers of TM31 and Thermomix in Australia Pty Ltd are in proximate relationship as the appliance sold by Thermomix in Australia Pty Ltd will impact the consumers directly and the consumers are reasonably foreseeable by Thermomix in Australia Pty Ltd. Thus, Thermomix in Australia Pty Ltd is bound under the duty of care.

Breach of duty of care – The defendant must in every scenario comply with the duty of care imposed by taking adequate level of care that is expected in the given scenario. If the level of care that is expected is not met then there is breach of duty of care and is rightly established in Bolton v Stone. The expected level of care is judged by looking at what a reasonable prudent man does in the like situation.

This, breach of duty of care is now applied in the case of Thermomix in Australia Pty Ltd. it is found that the TM31 is defective in nature as the use of the product results in scald and burns to the consumers. Also, Thermomix in Australia Pty Ltd must report the matter within 48 hours as 14 reports are file against the defect. But, no action is taken by Thermomix in Australia Pty Ltd. thus; the reasonable level of care that is expected from Thermomix in Australia Pty Ltd is breached.

Role of Applicable Caps Under the Civil Liability Act 2002

Damages – When the duty of care is not met by the defendant then it is very essential that some kind of damage must be caused to the plaintiff. The damage so caused should be anticipated by the defendant and must not be too remote to predict. Also, the damage so caused should be because of the breach of duty on the part of the defendant and not by any other reasons and is held in South Australia Asset Management Co v York Montague.

In Thermomix in Australia Pty Ltd, since TM31 is defective, its use has resulted in causing scalds and burns to the consumers. The injury is caused because of the use of the product and thus there is causation. Also, the injury is not remote and can be reasonably predictable by Thermomix in Australia Pty Ltd. thus, the damages so caused is as per under the law of negligence.

Thus, Thermomix in Australia Pty Ltd has not complied with its duty of care which has resulted in loss to consumers and thus Thermomix in Australia Pty Ltd is negligent.

In Victoria, The Wrongs Act 1958 is the legislation that has laid down few provisions relating to negligence. Part X, Division 2, Section 48 of the Act submits that a person must comply his duty of care and the duty of care is breached when the risk is significant and foreseeable and still no appropriate precautions are taken. Also, section 50 submitted that every defendant has the duty to give warning of the risk to the plaintiff. 

Thus, Thermomix in Australia Pty Ltd is in violation of section 48 and section 50 of the Act and thus the duty of care is not comply with.

It is now important to understand the role of the applicable caps that are imposed under the Civil Liability Act 2002 relating to the personal injuries and how the caps help in limiting the extent of possible tort of negligence liability that might be owed to the injured users. Section 12 of the Civil Liability Act 2002 establishes that limitation is imposed on the damages before the same is granted to the aggrieved party. However, the damages that are awarded to the aggrieved party is only given for those damages that are related to future economic losses and any past economic losses. Damages are also awarded for deprivation of the financial support expectations.  The court is willing to impose a limitation on the damages which is equivalent to “disregard the amount (if any) by which the claimant’s gross weekly earnings would (but for the injury or death) have exceeded an amount that is 3 times the amount of average weekly earnings at the date of the award”. So, it is submitted that a cap is imposed by the application of section 12 and thus damages can be availed by the aggrieved party only for future economic losses and any past economic losses or deprivation of the financial support expectations.  So, there is remedy that is provided to the aggrieved but by putting cap such remedy is not adequate and only benefit the defendants who are affluent.

Rights Granted Under Australian Consumer Law to Injured Consumers

The Australian Consumer Law (ACL) is a law that is enacted in Australia to protect the interest of the consumers by imposing certain obligations on the manufacturers, retails and suppliers of the product. There are rights that are grated to the injured under Part 3-5 of ACL. Every injured consumer has the right to sue the defaulter for the injuries that are sustained and thus ask for compensation. If any death is incurred then the legal representatives can claim compensation for the same. If any loss is sustained by the use of defective goods then the same can be reimbursed by the defaulter. If any loss is caused to the property then the same can also be recovered.

It  is submitted that injuries are incurred to the consumer of TM31 and thus such injured consumers can sue Thermomix in Australia Pty Ltd under Part 3-5 of ACL and claim their rights.

But, it is first important to understand the grounds under which the rights under Part 3-5 of ACL can be claimed. The grounds are made part of Part 3-2 of ACL. The ground includes:

1. As per section 55 of the Australian Consumer law, the goods that are distributed by the supplier or produced by the manufacture must be of such a quality that is acceptable. Acceptance quality signifies that the goods are safe, are usable for the purpose that is normally acquired, does not contains any kind of defect and are durable in nature and is rightly held in McWilliams Wines Ltd v Liaweena (NSW) Pty Ltd .
2. As per section 55 if the consumer before the purchase of the goods specifies the reason for which the goods are acquired, then, the goods that are actually acquired must be fit for the purpose specified and is held in Griffiths v Peter Conway Ltd. The description and the goods actually supplied must correspond and is held in Metal Roofing & Cladding Pty Ltd v Amcor Trading Pty Ltd.

• Facility for repairs must be provided in defective goods.

Also, the ACL provisions cannot be excluded/limited/modified.

It is now submitted that the TM 31 is the product that is supplied by Thermomix in Australia Pty Ltd. the product has the defect as kits use results in scalds and burns. Thus, the goods are not safe and durable. Also, the goods are not fit for the purpose so acquired and thus there is breach of section 54 and 55 of ACL.

Also, Thermomix in Australia Pty Ltd makes an agreement according to which they will not make any kind of replacement of refunds and which is a violation of ACL provisions. But, this limitation is not permissible and the company cannot limit the provisions of ACL.  The non disclosure agreement that is signed has no relevance and is thus not binding.

Now, when there is any violation of the consumer guarantees that are made part of ACL, then liabilities  can be imposed upon the manufacturer or distributors, but, there are few defenses that might be used by the manufacturer or distributor in order to protect his interests, for instance, that though the goods supplied is defective but the defect that is part of the goods was not existing hen the same is supplied by the manufacturer or the distributor; that there was a need to fulfill some statutory standards and the defect that was found was because of the compliance of such statutory standards; that the defect was not able to be identified as there was no technology at that time.

Now, Thermomix in Australia Pty Ltd has made several violations under ACL and thus ACCC is right in suing Thermomix in Australia Pty Ltd and thus claiming pecuniary penalties, declarations, corrective publication orders, injunctions and orders and costs.

Corones, S. (2012). The Australian Consumer Law. Lawbook Company.

Latimer, P. Australian Business Law 2012. 2011. CCH Australia Limited.

Norman, K. Who then in law is my neighbour?. 2004. Reverting to First Principles in the High Court of Australia. The Tort Law Review 12(2):pp. 85-97.<https://eprints.qut.edu.au/5213/1/5213_1.pdf>;

Vines, P.  "The Needle in the Haystack: Principle in the Duty of Care in Negligence" [2000] UNSWLawJl 25

Bolton v Stone (1951).

Coregas Pty Limited v Penford Australia Pty Limited [2012] NSWCA 35.

Caparo Industries Plc v Dickman [1990] 2 AC 605

Donoghue v Stevenson (1932);

Grant v Australian Knitting Mills (1936);

Griffiths v Peter Conway Ltd [1939].

Metal Roofing & Cladding Pty Ltd v Amcor Trading Pty Ltd (1999).

McWilliams Wines Ltd v Liaweena (NSW) Pty Ltd [1988].

South Australia Asset Management Co v York Montague (1996).

Tame v New South Wales (2002).

Wrongs Act 1958;

Australian Consumer Law.