Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Anytime Macarthur Pty Ltd t/as Anytime Fitness Campbelltown Mall v Campbell [2021] NSWCATAP 24 Hearing dates: 3 September 2020 Date of orders: 05 February 2021 Decision date: 05 February 2021 Jurisdiction: Appeal Panel Before: K Ransome, Senior Member J Currie, Senior Member Decision: (1) Appeal allowed. (2) Orders made in matter GEN 20/09231 on 12 June 2020 are set aside. (3) The application in matter GEN 20/09231 is dismissed. Catchwords: APPEAL – consumer claim – termination of gym membership agreement – whether member erred by not considering contractual term – error of law Legislation Cited: Civil and Administrative Tribunal Act 2013 Cases Cited: Collins v Urban [2014] NSWCATAP 17 Cominos v Di Rico [2016] NSWCATAP 5 Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 Category: Principal judgment Parties: Anytime Macarthur Pty Ltd t/as Anytime Fitness Campbelltown Mall (Appellant) Aaron Campbell (Respondent) Representation: M Parry (Appellant) J Campbell (Respondent) File Number(s): AP 20/28213 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 12 June 2020 Before: K Ruschen, Member File Number(s): GEN 20/09231 REASONS FOR DECISION 1. This is an internal appeal by Anytime Macarthur Pty Ltd t/as Anytime Fitness Campbelltown Mall (Anytime Fitness) from a decision of the Tribunal's Consumer and Commercial Division which provided the applicant in the original proceedings, Aaron Campbell, with a refund of gym membership fees for the period 19 March 2018 to 11 November 2019. Anytime Fitness argues that the Tribunal Member made an error and no refund is payable. Background 1. Aaron Campbell signed a membership agreement with Anytime Fitness on 6 September 2016 for a "minimum term" of 12 months. The agreement was an ongoing agreement which continued after the minimum term with fortnightly payments direct debited from Mr Campbell's bank account. Unfortunately, Mr Campbell became ill and could not continue to attend the gym. 2. Records from Anytime Fitness show that from 18 May 2017 Mr Campbell's membership was "frozen" for three months and no fees were payable during that period. In August 2017 the freeze was extended for a further three months. Mr Campbell never returned to the gym and, after the end of the freeze, fortnightly membership fees were again debited from his bank account. 3. On 11 November 2019 Mr Campbell's mother, Ms Julie Campbell, telephoned Anytime Fitness to ask why fees were still being debited from her son's bank account as she had cancelled the membership in 2017. On 15 November 2019 Ms Campbell signed a "Request for Cancellation" form in relation to Mr Campbell's membership. On the form she indicated that the membership had been cancelled in May 2017 as her son was ill but an Anytime Fitness staff member did not process the cancellation properly. She stated that she and Mr Campbell were unaware that ongoing payments were being debited from Mr Campbell's account. In subsequent documents Ms Campbell stated that she had telephoned to cancel her son's membership of the gym in November 2017. 4. Anytime Fitness refused to make a refund of any fees on the basis that there was no record of any conversation with Ms Campbell in November 2017 and because, in any event, they did not accept verbal cancellations as the company's cancellation policy required cancellation in writing by filling out the cancellation form. 5. On 24 February 2020 an application was lodged with the Tribunal by Ms Campbell on behalf of Mr Campbell. The application claimed an amount of $2,000 on the basis that the membership was cancelled after being frozen for six months, but payments continued to be deducted from Mr Campbell's account for a period of two years following cancellation. 6. The parties appeared before the Tribunal by telephone on 12 June 2020. Ms Campbell represented Mr Campbell. Mr Carlos Elysee represented Anytime Fitness and another staff member, Ms Karina Fiez, gave evidence. At the end of the hearing the Tribunal Member awarded Mr Campbell $1,403.60 being reimbursement of membership fees for the period 19 March 2018 to 11 November 2019. Oral reasons for the decision were given. 7. Unfortunately, the sound recording of the hearing malfunctioned and neither party requested written reasons. The parties are a little at odds about what was said at the hearing. There is therefore some lack of clarity around the basis upon which the decision was made and the evidence that was given at the hearing. The Tribunal hearing 1. As far as we can ascertain from what we were told by the parties on appeal, the Tribunal Member accepted Ms Campbell's oral evidence that she had telephoned Anytime Fitness in about November 2017 to cancel Mr Campbell's membership. Her evidence was that she was told cancellation would occur after three months. She told the Tribunal that she was never required to provide a doctor's certificate in relation to Mr Campbell's illness or to go into the gym to sign a cancellation form. 2. Anytime Fitness said that it had provided the Tribunal with a copy of the membership agreement signed by Mr Campbell. The document contained a summary of key terms, including the cancellation arrangements. The document included the following: Cancelling in the Minimum Term for Medical Reasons: You can cancel your Membership in the Minimum Term if you contract a serious illness or a permanent physical incapacity which is confirmed by a doctor we reasonably agree to and you pay the Administration Fee which is the same as your Membership Fees for 30 days (see clause 10). Cancelling in the Minimum Term for Other Reasons: … Cancelling an Ongoing Agreement After the Minimum Term: You may cancel on 30 days written notice (see clause 10). 1. Ms Campbell had told the Tribunal that she spoke to Club Manager, Ms Karina Fiez, on the telephone in November 2017 to cancel Mr Campbell's membership. She had previously spoken with Ms Fiez to freeze the membership in May 2017 and August 2017. Ms Campbell told us that at the Tribunal hearing when Ms Fiez was questioned by the Member she said that she could not recall the conversations but it was possible that she got called away within the gym and forgot to write up the conversation. At the appeal hearing Ms Fiez disputed the version of her evidence given to the Tribunal provided to us by Ms Campbell. 2. Ms Fiez said she told the Member she had a vague recollection of the calls in May and August 2017 about freezing Mr Campbell's membership. She said she told the Member that the usual process for a cancellation would be that the cancellation form is filled out and a doctor's certificate provided. She denies that she told the Member she may have forgotten to write up a conversation with Ms Campbell in November 2017 as that would go against established procedures. We were advised that Anytime Fitness had provided the Tribunal with a copy of all phone, SMS and email contact records, including attempted contact, with Mr Campbell between 2016 and the end of 2019. Anytime Fitness has no written record of any contact from Ms Campbell in November 2017. 3. The contact records between Anytime Fitness and either Mr Campbell or his mother show that Mr Campbell commenced his membership on 6 September 2016. However, he apparently rarely attended the gym and several calls were made and SMS messages sent between 16 September 2016 and 16 March 2017. Mr Campbell answered calls on 16 March 2017 and 4 April 2017 advising that he would be back at the gym soon. On 18 May 2017 Mrs Campbell called to freeze the membership for three months. Two emails and an SMS message was sent to Mr Campbell in July advising that his credit card was about to expire. On 3 August 2017 Mrs Campbell called to extend the freeze for a further three months and advised that Mr Campbell would be back at the club in November. Between 23 August 2017 and 27 August 2019 various emails and SMS messages were sent to Mr Campbell. A phone call was also made on 1 May 2019 to advise of arrears and a message was left on that occasion. 4. There was no evidence before the Tribunal that emails or messages were sent to the wrong address or telephone number. 5. The records of Anytime Fitness show that on 11 November 2019 Mrs Campbell phoned to ask why money was being taken from her son's account. During the call she stated that she had cancelled her son's membership in 2017. She signed a request for cancellation on 15 November 2019 stating that the contract had been cancelled in May 2017. 6. The evidence put forward at the hearing before the Member by Anytime Fitness was that, in accordance with the terms of the membership agreement, cancellation of a membership must be done in writing and is not done three months in advance. Anytime Fitness told us that, as at November 2017, the contract was still within the minimum term as the periods during which Mr Campbell's membership was frozen served to extend the minimum term. The minimum term therefore expired on 19 March 2018. The Appeal 1. In its appeal Anytime Fitness stated that the decision made by the Tribunal was not fair and equitable and was against the weight of the evidence because: 1. Ms Campbell did not specify the amount she was claiming and the Tribunal Member worked the dates out on her behalf (in her cancellation form Ms Campbell said the membership was cancelled in May 2017 but at the hearing said it was November 2017); 2. Ms Campbell produced no evidence to support her claim that she called Anytime Fitness to cancel Mr Campbell's membership in November 2017; 3. The evidence of Ms Karina Fiez, the employee of Fitness First to whom Ms Campbell claimed she spoke with in November 2017, was that a membership cannot be cancelled over the telephone nor three months in advance and there was no record of any telephone call from Ms Campbell in November 2017; 4. The terms of the contract specify cancellation must be in writing and any required proof such as a medical certificate must be attached; and 5. Anytime Fitness provided evidence of regular contact with Mr Campbell during 2018 and 2019 which would not have occurred if his membership had been cancelled. 1. In the reply to the appeal Ms Campbell reiterated that she had cancelled the membership contract during a phone call with Ms Fiez in November 2017 but was required to pay three months' worth of fees immediately. Applicable legal principles – internal appeals 1. Section 80(2)(b) of the Civil and Administrative Tribunal Act 2013 (NCAT Act) states: Any internal appeal may be made: (a) in the case of an interlocutory decision of the Tribunal at first instance—with the leave of the Appeal Panel, and (b) in the case of any other kind of decision (including an ancillary decision) of the Tribunal at first instance—as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds. 1. Clause 12 of Schedule 4 to the NCAT Act states with respect to decisions made in the Consumer and Commercial Division that: An Appeal Panel may grant leave under section 80 (2) (b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). 1. In the present appeal Anytime Fitness states that it seeks leave to appeal and does not refer to any error of law. However, the way the appeal was argued raised a possible error of law. In the circumstances, it is appropriate for the Tribunal to determine, looking at the grounds of appeal generally, whether a question of law has in fact been raised, subject to any procedural fairness considerations in favour of the respondent: Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [12]; Cominos v Di Rico [2016] NSWCATAP 5 [13]. 2. In Prendergast at [13], the Appeal Panel said that the following are errors of law: 1. whether the Tribunal provided adequate reasons, which explain the Tribunal's findings of fact and how the Tribunal's ultimate conclusion is based on those findings of fact and relevant legal principle; 2. whether the Tribunal identified the wrong issue or asked the wrong question; 3. whether it applied a wrong principle of law; 4. whether there was a failure to afford procedural fairness; 5. whether the Tribunal failed to take into account a relevant (that is, a mandatory) consideration; 6. whether it took into account an irrelevant consideration; 7. whether there was no evidence to support a finding of fact; and 8. whether the decision was legally unreasonable. 1. Anytime Fitness states that the Tribunal erred in not referring to the terms of the membership contract between it and Mr Campbell in arriving at the decision that the contract could be cancelled orally. This would amount to an error of law if made out. In relation to the other grounds of appeal, Anytime Fitness seeks leave to appeal on the grounds that the Tribunal's decision was not fair and equitable and was against the weight of the evidence. 2. Obtaining leave to appeal is a two-stage process. At the first stage Anytime Fitness must persuade us that it may have suffered a substantial miscarriage of justice under clause 2 of Schedule 4, because of one or more of the matters referred to in its grounds of appeal. Should Anytime Fitness persuade us that it may have suffered a substantial miscarriage of justice it must then, at the second stage, persuade us that we should exercise our discretion to grant leave to appeal on one of those grounds. The principles applicable to the granting of leave were set out in Collins v Urban [2014] NSWCATAP 17 at [65] – [84]. 3. For the reasons which appear below we are satisfied that the Tribunal has made an error of law. Consideration 1. Clause 10 of the full terms and conditions of the membership agreement provides that an agreement can be cancelled during the minimum term for medical reasons by notice in writing and the production of a doctor's certificate if required. Clause 10 also provides for cancellation for other reasons. All requests for cancellation must be in writing. Clause 9 of the terms and conditions sets out the process by which a membership may be temporarily suspended or frozen. 2. While there was some dispute between the parties about what occurred at the hearing, it was agreed that the full terms of the membership agreement, that is, the contract between Mr Campbell and Anytime Fitness, were not before the Member. The abbreviated terms of the contract as set out above were before her and she had oral evidence from representatives of Anytime Fitness as to their understanding of cancellation requirements for illness during the minimum term. Those present at the hearing could not inform the Member of the precise nature of the full written terms and it does not appear that Anytime Fitness was given an opportunity to provide them. Nor does it appear that there was any evidence before her, other than Ms Campbell's account of her phone call, that under the contract membership could be cancelled orally or that staff at Anytime Fitness had authority to waive the requirements set out in the agreement. 3. It is worth noting that the summary of the key terms contained in the document Mr Campbell signed when referring to cancelling in the minimum term for medical reasons stipulated that confirmation by a doctor was required and that an administration fee equivalent to membership fees for 30 days must be paid. This was not, however, according to Ms Campbell the requirements placed on her when she cancelled the agreement in 2017. 4. While we understand that there were some time pressures placed upon the hearing, the evidence of Ms Fiez is that the hearing went for 1½ to 2 hours. It would be expected that, given an opportunity, the full terms of the contract could have been provided within that time. 5. The starting point for any consideration as to whether a contract has been terminated by agreement is the relevant terms set out in the contract. We are mindful that in the absence of a recording or written reasons it is difficult to ascertain exactly what occurred at the hearing, particularly when there is some dispute about some issues. However, it is tolerably clear that the Member failed to ascertain what was stipulated by the contract. In our view, the Member applied the wrong principle of law in proceeding to determine the application without at first ascertaining the position under the contract. Without having done so, she was not in a position to determine whether Anytime Fitness had waived reliance on that term. 6. Accordingly, the Tribunal made an error of law and the appeal must be upheld. 7. We do not need to reach any conclusion on whether or not the decision was not fair and equitable or was against the weight of the evidence in light of our finding that the Tribunal made an error of law. What orders should be made? 1. Anytime Fitness provided a copy of the relevant terms and conditions of the membership agreement to the Appeal Panel and to Ms Campbell. Other than that, neither party provided any additional evidence that was not before the Tribunal Member. In her reply to the appeal Ms Campbell referred to a number of matters which she described as fresh evidence, however none of these matters comprise any objective or corroborative evidence of matters pertaining to cancellation of the contract. 2. In these circumstances we are of the view that we can determine the appropriate order that should be made in respect of Mr Campbell's application to the Tribunal. 3. There was no dispute that Mr Campbell signed the membership form on 6 September 2016 for a minimum term of 12 months. There was also no dispute that on two occasions Ms Campbell telephoned Anytime Fitness and that his membership was frozen for three months on each occasion. We note that the terms of the contract did not stipulate that any request to freeze a membership must be in writing. 4. As noted above, under clause 10 of the contract cancellation during the minimum term on the basis of ill health must be done in writing, be accompanied by confirmation from a doctor or other medical professional and that an administration fee (which is equivalent to 30 days membership fee) be paid. Ms Campbell's evidence, however, is that she telephoned Anytime Fitness and spoke to Ms Fiez in November 2017 and that Ms Fiez agreed over the telephone to cancel Mr Campbell's membership on condition that a payment was made for three months fees which would take payment up to the end of the minimum term as extended. Her evidence is that that agreement was not acted upon and that it was not until some two years later that either she or Mr Campbell realised that fees continued to be deducted from his bank account on a monthly basis. 5. The evidence of Ms Fiez is that she has no independent recollection of the telephone call from Ms Campbell in November 2017. She is insistent, however, that she would not have accepted an oral cancellation over the phone as that would be contrary to the company's established processes. She disputes the statement made before us by Ms Campbell that she told the Member that she simply may have forgotten to write the details of the call down. On this point, we accept the evidence of Ms Fiez. 6. Anytime Fitness provided oral evidence at the Tribunal hearing and before us that the usual practice about which all staff are aware is that cancellation of a membership must be done in writing, usually on the form specified for that purpose which indeed was the form filled out by Ms Campbell on 15 November 2019. The evidence is that Anytime Fitness Macarthur is part of a franchise and the form is used to document cancellation. These processes are in conformity with clause 10 of the membership agreement. 7. We are not satisfied, on the balance of probabilities, that Anytime Fitness cancelled Mr Campbell's membership in November 2017 on the basis of a telephone call from Ms Campbell. We are supported in this conclusion by the following matters: * oral cancellation of a membership during the minimum term is not a permissible method of cancellation under the contract; * the consistent evidence provided by Anytime Fitness, including the evidence of Ms Fiez, is that cancellations must be in writing; * there is no evidence contained within the call records provided by Anytime Fitness of telephone contact from Ms Campbell in November 2017; * Ms Campbell has not provided any other evidence to support her claims, including telephone records or statements from other persons she may have spoken to about her actions at the relevant time; * there is no explanation for why, contrary to the terms of the contract, Ms Campbell would be told to pay an amount equivalent to 3 months membership in circumstances where cancellation for ill health only required a payment equivalent to 30 days membership; * telephone calls and SMS messages about his membership, including in relation to arrears, continued to be sent to Mr Campbell during 2018 and 2019 and during that time monthly deductions for his membership continued to be made but at no time did he or Ms Campbell make contact with Anytime Fitness to query this prior to the alleged call in November 2017. 1. We are satisfied that Mr Campbell's membership was cancelled in November 2019 by written notice. 2. For these reasons the application by Mr Campbell for a refund of membership fees in matter GEN 20/09231 is dismissed. Orders 1. We make the following orders: 1. Appeal allowed. 2. Orders made in matter GEN 20/09231 on 12 June 2020 are set aside. 3. The application in matter GEN 20/09231 is dismissed. ********** I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 05 February 2021