The short term right to reject goods under the Consumer Rights Act 2015
A case law update on Johnston and Johnston v R&J Leather (Scotland) Limited
Johnston and Johnston v R&J Leather (Scotland) Limited [2019] SAC (Civ) 1 is thought to be the first appeal case under the Consumer Rights Act 2015 (CRA). It started with advice from the Citizens Advice consumer service (the consumer helpline), followed by the Scottish simple procedure and ended up before the Sheriff Appeal Court.
What was the case about?
Mr and Mrs Johnston ordered a new living room suite from an R&J Leather (Scotland) Ltd (R&J) showroom in April 2017 and paid a deposit. The suite was delivered on 30 June 2017 but was not of satisfactory quality in several respects. The following day the Johnstons returned to the showroom to complain. They indicated their wish to reject the suite and were told to telephone head office. They emailed on 2 July, again indicating they were rejecting the suite and requesting a refund. A company representative telephoned on 3 July to say a driver would be sent. They understood this to mean that the driver would take the suite away. In fact three people turned up on 6 July and corrected the recliner seat mechanism, and then promptly disappeared. Mrs Johnston was unaware of this as it happened while she was on the phone to head office, having been told to ring them when she repeated her wish for the suite to be taken away.
After taking advice from the consumer helpline, Mrs Johnston wrote to R&J on 6 July, indicating rejection and requesting a refund. She sent the letter by recorded delivery (RD), however, the company refused to accept it, on seven separate occasions. The Johnstons asked their local MP for help on 17 July, but he received no response either, despite sending two emails and a RD letter. After further advice from the consumer helpline, the Johnston’s sent another RD letter on 22 August offering alternative dispute resolution (ADR) and when R&J refused delivery, they instigated court proceedings in September. A company representative telephoned to say that the managing director would like to speak to Mrs Johnston when he was back, however, no further call was received.
What did the court decide?
The court hearing was not defended and an order for payment was made on 14 December, but with no accompanying instruction to order R&J to remove the suite from the Johnston’s home.
In January 2018, the Johnstons decided to give the suite away as they had not used it and it was taking up valuable space. When they tried to enforce the court order, R&J applied to have it recalled and a two day trial took place in June and July 2018. The Sheriff found in favour of the Johnstons and granted an order for payment. He excused the failure to be able to return the suite.
There was no dispute that the suite was not of satisfactory quality and that the Johnstons had chosen to use the short term right to reject (STRR). R&J appealed on the basis that as the Johnsons no longer had the suite, and could not therefore return it, they should not be able to recover the money awarded. They argued that the obligation in section 20(7) CRA, to make rejected goods available for collection by the seller, is not time limited and applies regardless of what happens in the meantime and of what actions the company may take.
The solicitor representing R&J, based his argument on the specific wording and tense used in section 20(7), which, he stated, indicated an ongoing duty to have the suite available for R&J to collect (para 18) — ‘ “From the time when the right is exercised” and not “At the time”. And the consumer has a duty to “make the goods available for collection”, not to “have made the goods available” ’. The obligation for the trader to make a refund and the consumer to make the goods available for collection are interdependent, he argued.
Mrs Johnson was unrepresented and said she had:
· done everything she was supposed to
· provided repeated opportunities for R&J to remove the suite
· acted in good faith and only given the suite away after the court order
· not felt inclined to deliver it to R&J, because of their earlier attitude
· not got room to provide a storage facility
· needed to replace the suite
· followed all the advice taken from the consumer service helpline
Appeal Sheriff Cubie rejected R&J’s appeal. He said that whatever the wording in section 20(7), he had no difficulty concluding that leaving the duty to make goods available for collection “open-ended, unqualified and indefinite”, was not an attractive one. Further, he said, it was not supported by other case law or general principles of statutory interpretation, as it had the “potential to lead to both unfairness and absurdity” (para 27). He suggested a non-exhaustive list of factors that a court could take into account when considering the nature and extent of the duty to retain rejected goods, including:
· how quickly rejection of goods is indicated
· nature of the goods
· storage practicalities
· consumer communications to the seller — nature, extent and frequency
· response from the sellers, or lack of
· how long goods were kept for
· whether court proceedings had been commenced
He said it might be appropriate in some cases for consumers to indicate that where goods are not collected, following rejection, they will be disposed of. However, he also stated that the actions or inactions of the seller, may on occasions, “entitle the consumer to do as he or she wishes”.
What does this mean for advisers?
It is possible that different facts may lead to a different decision. The sheriff was “satisfied that, in particular circumstances of this case, the Johnstons were entitled to dispose of the suite” (para 32). However, there is no clear indication of when they may not have been entitled to do so. It is likely that each case will turn on its facts and it is important to continue to advise consumers to:
- be reasonable
- be clear about expectations
- record their actions
- let sellers know what is happening
- not use items that are being rejected, as far as is possible
- give appropriate opportunities for collection
- keep copies of communications
- send letters by RD
- get advice at different stages
- use chargeback or section 75 Consumer Credit Act 1974, where appropriate and depending on how they paid
- offer ADR
In this case “R&J have only themselves to blame for their inability to recover the item” (Para 33). Clearly R&J didn’t do themselves any favours from the outset in the way they behaved and there will still be grey areas, making advice difficult in some circumstances.
Court should always be a last resort. Even with a favourable judgment, it doesn’t mean the consumer gets what they want or what they have been awarded, without further hassle, as the Johnstons have discovered. If R&J don’t pay the order, the Johnstons may have to consider whether it is worth spending more money setting in motion one of the various methods of enforcing judgments. When they tried this course of action previously, the company recalled the case which lead to the two day trial. It is not a decision to take lightly.
Short term right to reject (STRR)
Following on from the case above, this is a good opportunity for a reminder of the provisions surrounding the STRR in the CRA.
(1) It’s a 30 day period, during which the consumer can let the trader know he/she is rejecting goods, due to certain breaches, and ending the contract [s20(4)]. The consumer must make it clear to the trader that the goods are being rejected, by saying or doing something [s20(5)&(6)].
(2) The STRR replaces the “acceptance” rules under the Sale of Goods Act 1979, although, they will still apply for private and trade to trade sales, and ones that took place before 1 October 2015.
(3) The 30 days don’t necessarily start when the consumer agrees to buy something. There may be a binding contract at that point, but the 30 day period doesn’t start until the goods are delivered. For the Johnstons, day one was 1 July, the day after the suite was delivered, not the day after they ordered it, back in April 2017. If anything else was agreed under the contract, before the goods can be used, then that has to happen too before the 30 day period starts to tick, for example, installation of a washing machine [s22(3)].
(4) Once the trader agrees the consumer is entitled to a refund, then they should provide it without delay, within 14 days [s20(15)] and without any fees [s20(17)].
(5) The consumer must make goods available for collection by the trader, as discussed in the case summary above. The trader should bear the costs of returning the goods, so a pre-paid label could be sent to the consumer for items suitable for return, using postal or courier services, unless the costs are for a personal return to somewhere the consumer collected them from in the first place [s20(8)]. This means someone buying goods from a high street shop, for example, wouldn’t automatically be able to claim the costs of taking it back there if it turns out to be faulty. It might be a good idea to discuss such costs with the trader before returning the item, if this is likely to be an issue. Some people travel a long way to collect certain goods, for example, cars. This can cause problems if they then turn out to be faulty or misdescribed and and the consumer wants to reject them.
(6) If the consumer asks for or agrees to a repair during the 30 days, then the STRR period is stopped whilst this is carried out [s22(6)]. When it resumes, the consumer will have the remainder of the 30 days or 7 days, whichever is the longer period [s22(7)]. This will allow them to use the STRR if another fault appears or the repair is ineffective.
(7) The STRR is not the only remedy available during the first 30 days. The consumer may prefer to choose common law damages to cover the cost of a repair somewhere else [s19(9)-(11)]; or alternatively opt for the practical solution of a repair or a replacement [s23], followed by a price reduction or a final right to reject [s19(3)] if the former are not viable for one of the listed reasons [s24(5)].
(8) The burden of proof is reversed for six months if a consumer is following the two stage practical remedy route [s19(14)], which means if the goods turn out to be faulty or misdescribed during this period, it can be assumed that they were in that condition when they were supplied, or it will be up to the trader to prove otherwise. For damages or the STRR it will be up to the consumer to prove that the breach existed at the time of purchase.
(9) The Citizens Advice public website has two tools to help consumers with faulty items, Problem with a used car and Return faulty goods. We are working on a few changes to the tools to make the advice clearer and more tactical.
Jan Carton is a Senior Consumer Expert in the Expert Advice Team at Citizens Advice.
