Civil and Administrative Tribunal New South Wales Medium Neutral Citation: McGinn v Fitness First Australia Pty Ltd [2024] NSWCATAP 209 Hearing dates: 11 October 2024 Date of orders: 21 October 2024 Decision date: 21 October 2024 Jurisdiction: Appeal Panel Before: Balla ADCJ Principal Member Andelman L Senior Member Decision: (1) Leave to appeal is refused. (2) The Appeal is otherwise dismissed. Catchwords: APPEAL – consumer law – words and phrases – meaning of the expression "In the event I am wrong" – damages - no error Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Australian Consumer Law (NSW) Category: Principal judgment Parties: Sophia McGinn (Appellant) Fitness First Australia Pty Ltd (Respondent) Representation: Appellant (Self-represented) Respondent (Self-represented) File Number(s): 2024/00265015 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 28 June 2024 Before: M Terceiro, General Member File Number(s): 2024/00103084 REASONS FOR DECISION 1. On 18 March 2024 Ms McGinn filed a Consumer Claim Application in the Tribunal against Fitness First Australia Pty Ltd ("Fitness First") for damages claiming breaches of contract and consumer guarantee obligations. 2. Fitness First denied that it had breached the contract or its consumer guarantee obligations. 3. The Tribunal dismissed Ms McGinn's claim on 28 June 2024. 4. Ms McGinn has appealed from that decision. The Decision 1. Ms McGinn signed a contract and joined one of Fitness First's gyms on 30 June 2023. It was an ongoing contract which could be terminated by either party on 30 days' notice. 2. On 17 July 2023, Ms McGinn was late for a Pilates class and was asked to leave. 3. After discussions between the parties and Fitness First providing her with free classes, Fitness First put Ms McGinn's membership on freeze as she was not using the services. On 17 March 2024, Ms McGinn terminated her contract with Fitness First. 4. Ms McGinn then filed an Application in this Tribunal. She asserted that Fitness First had breached the contract and failed to comply with its consumer guarantee obligations under the Australian Consumer Law (NSW) ("ACL") contained in Sch 2 of the Competition and Consumer Act 2010 (Cth). Ms McGinn claimed damages of $16,600 calculated by reference to the difference between the cost of her Fitness First membership and a comparable Virgin Active Membership over 20 years. 5. Both claims failed. The Tribunal found: 1. The contract provided that "entry after the class has started may be refused by the instructor". The conditions of entry to the Club gave further contractual rights to Fitness First to prevent a person from attending a class if they believed that the person was proposing to engage in risky behaviour by commencing a class without warming up due to being late. Ms McGinn had not shown that there had been a breach of contract by Fitness First. The Member added: 29.Accordingly, I believe that the Applicant was on notice of the ability of the Respondent to exclude her from classes for being late. 30. In the event I am wrong about this issue, I do not believe that the fact that the Applicant may not have known about the lateness term means that the Respondent breached its contract with her. 31. Indeed, I note that the Respondent has an obligation under s 60 of the ACL to provide services with due care and skill. This means that the Respondent had a statutory duty to ensure that members are not placed at the risk of physical injury by allowing members to undertake risky activities in the gym, including by joining classes late after warming up had been completed. 1. Section 61 of the ACL provides a consumer with rights if that consumer, expressly or by implication, makes known to the supplier any particular purpose for which the services are being acquired. Ms McGinn had not informed Fitness First that she was acquiring the services because she wanted to be able to attend classes late after the classes had commenced nor could this be implied. The claim under s 61 failed. 2. After saying, "[38] In the event I am wrong about my conclusions concerning the consumer guarantee provision, I do not believe that the applicant has any ability to claim compensation" the Member considered s 267(4) of the ACL and found that it did not provide a separate ground of recovery. It only came into effect once a breach of a consumer guarantee had been established. 1. Even if a breach of a consumer guarantee had been established "it is not clear that she would have been able to recover compensation". Ms McGinn had not entered into a new gym membership at a higher price nor provided a quote from another gym as to the higher membership prices she would have to pay. He concluded by finding at [41] "In other words, the Applicant has not incurred any loss or damage but rather has speculated about a future potential loss or damage". Legal Principles 1. Under s 80 of the Civil and Administrative Tribunal Act 2013 (NSW) ("NCAT Act"), a party to a decision in the Tribunal has a right to appeal on any question of law and, otherwise, any error for which leave to appeal should be granted, limited by cl 12 of Sch 4 of the NCAT Act. 2. The onus is on Ms McGinn to demonstrate an error on a question of law or an error of a type for which leave to appeal should be granted. Consideration 1. The Notice of Appeal sets out a single Ground of Appeal: "The claims were brought under s61 and s267(4) of ACL alternatively breach of contract. The Appellant provided estimated foreseeable damages as per the requirement of s 267(4), however the Tribunal erred in deciding s 267(4) requires damages "incurred" which in fact ACL clearly states "foreseeable damages" and refused to correct when the Appellant requested per s 63 of the NCAT Act, that is an error of law". 1. One of the submissions made by Ms McGinn turns on the words used by the Member at [30] and [38] which we have set out in full in para 9 of these Reasons. It was submitted that when the Member said "In the event I am wrong" the Member was expressing a doubt about a finding. We informed Ms McGinn that, if it was necessary to do so we would treat this as a separate Ground of Appeal. 2. There are circumstances in which the interpretation of legislation is a question of law. If this is the case then Ms McGinn does not need leave to appeal. In view of our findings, set out below, we do not consider the appeal raises a question of law. We do not consider that leave to appeal should be granted as we do not consider that the appellant has suffered a substantial miscarriage of justice; s 80(2)(b) of the NCAT Act and cl 12(1) of Sch 4 to the NCAT Act 3. In the Notice of Appeal there is no challenge to the Member's finding in relation to Ms McGinn's claim in contract. However Ms McGinn's submission in relation to the meaning of the expression "In the event I am wrong" is directed to [30] of the decision. Ms McGinn says it means that the Member acknowledged that he may be wrong in his finding that Fitness First had not breached the contract. 4. We do not accept this submission. The Member held at [29] that Ms McGinn was on notice of the relevant provision of the contract. In our view the proper construction of para [30] is that the Member held that, even if he had accepted Ms McGinn's evidence as to not having known about the term, he would still have found that Fitness First had not breached the contract. 5. In relation to the challenge to the Member's finding under the ACL, we are satisfied that: 1. The primary finding was that the claim under s 61 of the ACL failed because the Member was not satisfied that Ms McGinn made it known to Fitness First, expressly or by implication, that a particular purpose for which she was acquiring the service was because she wanted to be able to attend classes late after the classes had commenced. That finding has not been expressly challenged by Ms McGinn in the Notice of Appeal, but she submitted that when, at [38], the Member said "In the event I am wrong" he had acknowledged that he may be wrong about his conclusions concerning the breach of s 61 of the ACL. We do not accept that anything turns on the use of those words. They simply are an introduction to the Member explaining what he would have found in relation to the claim under s 267(4) of the ACL if he had found that a consumer guarantee had been breached. 1. The Member held at para [40] that there was no separate claim open to Ms McGinn under s 267(4). It only came into effect after Ms McGinn had proven a breach of a consumer guarantee by Fitness First. That finding has not been challenged by Ms McGinn. 1. The Member then said that even if Ms McGinn had shown a breach of a consumer guarantee no damages would have been awarded. Ms McGinn described this as the only finding in which "the Tribunal below didn't doubt itself". We do not accept this description, for the reasons we have already given. In circumstances where we have upheld the findings of the Member in relation to Ms McGinn firstly not having shown a breach of s 61, and, secondly, s 267 not providing a separate cause of action, we do not consider it necessary to determine whether the Member incorrectly articulated the test for recoverable damages under s 267(4) in para [41] of his decision. Order 1. The Appeal Panel makes the following orders: 1. Leave to appeal is refused. 2. The Appeal is otherwise 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: 21 October 2024