Blue Bella Pty Ltd trading as Quantum Change Seminars v Lanyon [2014] NSWDC 315

District Court New South Wales

Medium Neutral Citation: Blue Bella Pty Ltd trading as Quantum Change Seminars v Lanyon [2014] NSWDC 315 Hearing dates: 4 April 2014 Date of orders: 04 April 2014 Decision date: 04 April 2014 Jurisdiction: Civil Before: P Taylor SC DCJ Decision: (1) The appeal is dismissed. (2) No order as to costs. (3) Affirm the decision of the Tribunal. Catchwords: CONTRACT – Training Program – guarantee of satisfaction or 100% money-back refund – condition on refund – refund awarded by Tribunal consequent upon credit findings – construction of contractual terms – implied term – not necessary for business efficacy – inconsistent with express terms – Tribunal decision affirmed Legislation Cited: Consumer, Trader and Tenancy Tribunal Act 2001, s 67 Uniform Civil Procedure Rules 2005, r 7.1 Cases Cited: BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 Category: Principal judgment Parties: Blue Bella Pty Ltd trading as Quantum Change Seminars (plaintiff) Debbie Lanyon (defendant) Representation: Counsel:

Solicitors: File Number(s): 2013/356758 Publication restriction: None Decision under appeal Court or tribunal: Consumer, Trader and Tenancy Tribunal File Number(s): GEN 13/19924; GEN 13/59268

Judgment 1. The defendant, Debbie Lanyon, paid the sum of $15,192 to the plaintiff company ("Quantum") in about March 2012. This sum comprised $7,697 for QUIT training, $4,500 for an Egypt tour and $2,995 for Neuro Linguistic Programming ("NLP") Master Practitioner Training. The QUIT training and the Egypt tour were undertaken by Ms Lanyon but the NLP Master Training was not. Ms Lanyon sought a refund before the time of that NLP Master Training, but that was not provided and ultimately, Ms Lanyon pursued that claim in the Consumer, Trader and Tenancy Tribunal ("Tribunal"). 2. Ms Lanyon was successful save that the Tribunal deducted $895 for materials supplied. Thus, Ms Lanyon obtained an order in her favour for the sum of $2,100 to be paid by Quantum. This order has been stayed pending determination of this appeal. 3. Roberta Faddoul is a director of Quantum and appears for it under rule 7.1 of the Uniform Civil Procedure Rules 2005. Quantum appeals from the decision in favour of Ms Lanyon. Ms Lanyon appears in person. Thus neither party is legally represented. 4. The appeal from the decision of the Tribunal is an amended summons seeking leave to appeal. At the hearing, Ms Faddoul said she sought to appeal a decision of the Tribunal under s 67(1) of the Act, which does not require leave. No objection to that course was taken and I took the amended summons to constitute an appeal under s 67. 5. Quantum seeks to set aside the Tribunal's decision that Ms Lanyon be paid the sum of $2,100. It also sought, in the alternative, an order that Ms Lanyon pay $1,895, this being the difference between the alleged full price of the Egypt trip and the allegedly discounted price of the Egypt trip, less the $2,100 refund amount. 6. The difficulty with Quantum's alternative claim is twofold: first, no claim was advanced before the Tribunal for payment of that sum and secondly, on Quantum's own case, if Ms Lanyon had fulfilled what Quantum says is her contractual obligation to attend the NLP Master Training course, that sum would not have been payable. Any payment to Quantum could not properly be characterised as damages for breach of contract. 7. I turn to the primary matter in this appeal, which is whether Quantum should have been ordered by the Tribunal to pay $2,100. Ms Faddoul identified a number of errors that she submitted justified Quantum's appeal, namely, that certain express and implied terms were not taken into account, that the Tribunal did not properly construe the contract and that the Tribunal erred in not accepting evidence that a proper explanation of the contract was given. These grounds are set out in grounds 1, 2 and 5 of the appeal document. Grounds 3 and 4 are mere submissions in support of the other grounds. 8. The question of whether the $2,100 was refundable depends upon the contract between Quantum and Ms Lanyon. The Tribunal accepted Ms Lanyon's submissions that she was entitled to a money back guarantee. There were documents in evidence before the Tribunal and this Court which indicate that the plaintiff did provide a guarantee to Ms Lanyon described at various times as a "Famous 'No Hassle' Money Back Guarantee", a "SATISFACTION 100% GUARANTEED" and a "FULL, 100% money-back refund". 9. There was some evidence as to what was necessary to obtain the benefit of this money back guarantee. The plaintiff argued that it required, among other things, attendance on the first day of the course and notification before the end of the first day of the course that a refund was sought. There does not seem to be any real dispute with the second of these elements. I accept that representations about the money back guarantee identified that any claim for a refund needed to be made before the completion of the first day of the course, but that was done by Ms Lanyon. 10. As to the first element, attendance on the first day, there was some evidence of the guarantee being available if you turn up on the first day. However, the terms of the guarantee to which I have been taken do not seem to make this an essential component of the guarantee. It does not state, for example, "on the first day" but rather "[b]efore the completion of the first day". 11. In any event, Ms Lanyon gave evidence before the Tribunal and before me of the circumstance that she was unwelcome to attend the NLP Master Training course, perhaps for reasons related to the parties' relations after the Egypt trip. This was a matter considered by the Tribunal. In any event, the absence of Ms Lanyon on the first day was not crucial: Quantum maintained that even if Ms Lanyon had attended on the first day of the course, Quantum would not have refunded the money. 12. Quantum submitted that the money back guarantee was inapplicable to Ms Lanyon, for the reason that Ms Lanyon received a discount on the price of the Egypt trip even though she had not completed two courses with Quantum. 13. Quantum made representations to Ms Lanyon that if two courses were completed, then the discounted Egypt price was available. The evidence was in these terms: "If you do that combination [two courses] you will be a Quantum Leap student and we will give you the first week of Egypt for free…Well, how does that sound? I don't know anyone else that gives free trips to Egypt, so...60 students last year had that first week completely free and the second week I'll give you the details for that and that's at cost, that's just the cost price that we pay to our organisers... So it's Quit Cigarettes with one of our other advanced programs, you're eligible for Quantum Leap and you get the first week of Egypt for free. For free... And that is our gift to you. Do you think that's a pretty great gift or what?" 1. It is apparent that the parties' agreement was different from the usual case in respect of the trip to Egypt. Normally, after two courses are undertaken the trip to Egypt would be given at a discount. In this case, although Ms Lanyon paid for the whole amount of the two courses and the Egypt trip, she did not need to complete the second course before the Egypt trip was taken at the discounted price. That raises the principal question in this dispute. What becomes of the money back guarantee that would ordinarily be applicable to the second course, the NLP Master Training course? 2. Quantum says that once the Egypt trip was taken, the money back guarantee was no longer available because the Egypt trip was only available if two courses were completed. But this overlooks the circumstance that Quantum agreed to the discounted cost of the Egypt trip without the second course being completed. There is no evidence that links the availability of the money back guarantee on a course to whether or not the party has had the benefit of a trip to Egypt at a discounted price. Quantum's submission is that it must have been implied into the agreement that if the Egypt trip is taken first, there is no money back guarantee on the second course. 3. Quantum says that the justification for an implied term is strengthened by the circumstance submitted that if the money were refunded, Ms Lanyon would not have completed the second course, would not have been entitled to the discounted Egypt fare and would have paid an additional amount of money exceeding the cost of the refund by $1,895. There are a number of assumptions in that submission. In any event, the Tribunal dealt with the matter in the following way: "The Tribunal did not accept the respondent's submission that because the applicant wanted to cancel one course, the respondent was now entitled to re-charge the Egypt trip at a higher rate or use the money from the refund to re-allocate it on only doing one course and the Egypt trip, meaning that the applicant owed the respondent money. This was never explained in the terms and the conditions of the Special Quantum Leap Programme that was sold to the applicant and the respondent cannot now impose terms and conditions that were never part of the contract." 1. As to whether Ms Lanyon could still cancel the second course, still claim a money back guarantee in respect to the second course and not attend, the Tribunal stated: "The Tribunal accepted the applicant's evidence that she was verbally told at the seminar held by the respondent in Brisbane that under the 100% satisfaction guarantee that if she cancelled one course, even 1 day before the course, then she would get a full refund for that course. The Tribunal accepted that the applicant relied upon this information and representation in deciding to sign up for the Special Quantum Leap Programme which included two courses booked through Sydney and a trip to Egypt with the respondent." 1. The Tribunal rejected that submission, that Ms Lanyon had actually to attend the first day of the course, in these terms: "Firstly the Tribunal accepted the applicant's evidence that she was verbally told that she could cancel at any time before the course and she would get a full refund. And secondly, she signed up for the Special Quantum Leap Programme which included two courses booked through Sydney and a trip to Egypt with the respondent. The applicant had already completed the first course and the trip to Egypt. In other words the applicant had actually attend [sic] part of her programme, was dissatisfied and was now entitled to rely on the 100% satisfaction guarantee to get a full refund for that final course which she did not want to attend. The Tribunal was persuaded by the applicant's evidence that the applicant was entitled to rely upon the 100% satisfaction guarantee, was dissatisfied with the product and was entitled to ask for a refund." 1. These aspects of the decision of the Tribunal reveal that the decision of the Tribunal is based upon an acceptance of Ms Lanyon's evidence. Quantum has asserted before me a number of times through Ms Faddoul that those findings were wrong. But whether one party's evidence should be accepted over another is generally not a question with respect to a matter of law and thus, not amenable to appeal under s 67. 2. Quantum submits that there was no evidence for the conclusion of the Tribunal and thus, its position should have been accepted. That submission ignores Ms Lanyon's evidence. 3. However, there is force in the submission that the 100 per cent refund guarantee was usually given in a context different from that which occurred in the present case, namely, in a context where the defendant had not received the benefit of a discounted trip to Egypt before the second course had been attended. 4. Thus, for Quantum to succeed on this ground, it would have to establish that in circumstances where the Egypt trip occurred before the second course, there would be an implied term that the money back guarantee on the second course would no longer be available. Implied terms must satisfy a number of tests in order to be accepted. The High Court decisions of BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 and Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 identify five well-known elements: reasonableness, obviousness, capacity of clear expression, no inconsistency with the express terms of the contract and necessity (for business efficacy). 5. I accept that there is potential for an argument that such a term might be obvious, reasonable and capable of clear expression in terms that once a discounted trip is taken to Egypt, there is no money back guarantee until two courses have been completed. But, the proposed implied term seems to me to be inconsistent with the express terms and not necessary for the business efficacy of the arrangement. 6. The inconsistency with express terms is that there is an existing term, accepted by the parties, of a money back guarantee on courses cancelled before the end of the first day. A representation of a 100 per cent money back guarantee might be misleading if the guarantee is unavailable for some undisclosed reason. The Tribunal appears to have accepted that the representation of the 100 per cent satisfaction guarantee was material in Ms Lanyon entering into the arrangement and paying the money for the courses and the trip to Egypt. 7. As for business efficacy, there was a trip available to Egypt for $6,997. It may be that Ms Lanyon, in paying the sums of $10,692 plus $895 for materials and $4,500 for the Egypt trip, received such a windfall that one would conclude that business efficacy demanded the implication of a term submitted by the plaintiff. But that is far from obvious to me, and I cannot accept it. 8. In my view, the result in this matter turned upon the credit findings made by the Tribunal. But even if I were wrong on that, the case that was presented could only succeed if an implied term was found. The circumstances of this case do not justify the Court finding an implied term. 9. The finding of the Tribunal was open on the evidence before the Tribunal member. The finding seems to be a necessary consequence of the Tribunal accepting Ms Lanyon's evidence, a conclusion which under s 67, I cannot disturb. 10. The orders of the Court are that: 1. The appeal is dismissed. 2. No order as to costs. 3. Affirm the decision of the Tribunal.