Can I sue both the shop and the finance company together for my faulty fridge?

The situation

I am writing to seek some guidance regarding a situation here in Victoria. Back in November 2023, I purchased a high-end smart fridge from a local appliance retailer for $3,500. Because I didn't want to part with all my savings at once, I took out a small credit plan through the retailer's linked finance partner to pay it off over twelve months. Unfortunately, the fridge stopped working entirely by January 2024, and despite multiple calls to the shop, they have been completely unhelpful about providing a replacement or a refund. I have also contacted the finance company, but they claim they aren't responsible because they only provided the credit and didn't sell the actual appliance. I have already tried sending formal letters of complaint to both parties, but both have essentially brushed me off, leaving me stuck with a broken machine and ongoing monthly repayments for something I can't use. I want to take this to court to get my $3,500 back, but I am confused about the proper way to do this. Do I have to name both the appliance shop and the finance company in my claim, or can I just pick one of them to sue?

Detailed Analysis

Because your credit plan was through a 'linked finance partner' of the retailer, you are dealing with a linked credit contract. Under the law, if a consumer suffers loss or damage because a product fails to meet a guarantee—such as your fridge stopping work after only two months—the supplier and the linked credit provider are held responsible together.

Specifically, the law states that "the consumer must bring the action against the linked credit provider and the supplier jointly"^[1]. This means you cannot simply pick one; you must name both the appliance shop and the finance company in your court claim to recover your $3,500^[1].

This joint liability exists because the failure to comply with a guarantee (the promise that a product will work and be of acceptable quality) relates to the goods you bought on credit^[2]. The finance company's claim that they are not responsible because they did not sell the appliance is incorrect in this context. Under section 278, the credit provider and the supplier are "jointly and severally liable to the consumer for the amount of the loss or damage"^[2]. 'Jointly and severally liable' is a legal term meaning you can hold both parties responsible for the full amount of your loss.

It is important to note that if the finance company can prove that you approached them for credit independently and they were not induced by the shop to provide it, they might not be liable. However, since you mentioned the credit plan was through the 'retailer's linked finance partner,' this defense is less likely to apply.

State, provincial, or local laws in Victoria may add further rules regarding small claims procedures, so you should check Victorian consumer protection guidelines.

Statutory Citations

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