Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Total Health Brookvale Pty Ltd v Smart Australia Developments Pty Ltd [2015] NSWCATCD 56 Hearing dates: 31 March 2015 Decision date: 28 April 2015 Jurisdiction: Consumer and Commercial Division Before: Margaret Mary McCue, General Member Decision: Smart Australia Developments Pty Ltd t/a APPS Together,Suite 1, 23 Main Street VarsityLakes 4227 Australia is to pay to Total Health Brookvale Pty Ltd 32A Orchard Road Brookvale NSW 2100 Australia the sum of $ 1,980.00 on or before 7 May 2015. Catchwords: Refund of monies; Money Back Guarantee Legislation Cited: Consumer Claims Act 1998: sections 3, 3A, 8 and 13; Part 5, Schedule 4, Civil and Administrative Act 2013. Category: Principal judgment Parties: Total Health Brookvale Pty Ltd (applicant) Smart Australia Developments Pty Ltd trading as APPS Together (respondent) Representation: Applicant: Wendy Windsham Respondent: Rich Lawson – by telephone attendance File Number(s): GEN 15/11133 Publication restriction: Nil REASONS FOR DECISION Application 1. The applicant seeks an order for a refund of certain monies paid to the respondent and relies upon a "money back guarantee" in the terms of the agreement to support the claim 2. The respondent submits that the applicant is not entitled to the refund. More specifically, the respondent submits that it is entitled to rely upon a term of the agreement to avoid the claim. Jurisdiction 1. On the establishment date, 1 January 2014, the Civil and Administrative Legislation (Repeal and Amendment) Act 2013 amended certain statutes which previously conferred jurisdiction on now "abolished" Tribunals. NCAT has jurisdiction to hear and determine relevant matters in place of the "abolished" Tribunals. 2. From 1 January 2014, the Residential Tenancies Act was amended. The definition of "Tribunal" was changed in that Act from the CTTT to NCAT - see cl 4.34 item (2) in Schedule 4 to the Civil and Administrative Legislation (Repeal and Amendment) Act. 3. As a result of the amendments, from 1 January 2014, I am satisfied that NCAT has jurisdiction to hear the application made pursuant to the provisions of the Consumer Claims Act 1998 Appearances 1. The matter was listed before me on 31 March 2015. The applicant appeared in person. The respondent appeared by telephone at the hearing. 2. Telephone hearings are somewhat challenging for the participants, and the Tribunal. However, evidence was heard from both representatives. The Tribunal sets out below reasons for the findings made. The evidence 1. The applicant seeks a refund of certain monies paid for an APP to assist with the company with its business scheduling systems. 2. The applicant entered into an agreement with the respondent for the supply of an APP in or around 1 July 2013. 3. The applicant gave evidence that the APP did not satisfy the brief. The APP was unable to be integrated with a two calendar system for bookings at the applicant's business. 4. The applicant relied upon the provisions of a money back guarantee as set out in the terms and condition of the supply, more specifically, at clauses 5.1; 5.2; 5.3; 5.4 and 5.5 of the terms and conditions. 5. The applicant satisfied the conditions for a refund pursuant to the terms of 5.1; 5.2; 5.3; and 5.4. There was no quarrel between the parties that those conditions were met. 6. However, the respondent resisted the application for the refund of the monies paid, $ 1,960.00 (later amended to read, by consent, $ 1,980.00) given that the applicant had failed to comply with the provisions of clause 5.5 of the agreement. I set out the provisions of clause 5 in full below in order to give context to clause 5.5 of the agreement. Clause 5 – Money back guarantee 5.1 The company agrees to refund to the client an amount specified as the "amount to charge" for the design and build of the application only and not the monthly hosting fee, if the client requests a refund after 12 months and before the end of the 13th month following the date this agreement is signed and the conditions listed in 5.2, 5.3, 5.4 and 5.5 have been met. This guarantee expires after the 13 month from the date of this agreement and after this time the client agrees they have no grounds for any refund whatsoever. If the client requests a refund and the following conditions have been met, this refund will be given within 120 days of the client's request. 5.2 The client has paid the amount in full for the design and build. 5.3 The client is paid to date with their hosting of $ 35.00 per month exclusive of GST. 5.4 The client must submit a written cancellation notice for the Application they are requesting a refund for, which must be submitted no sooner than twelve months from the date of signing this agreement. 5.5 To help clients achieve success with their Applications we provide a service of e-mail updates, hints, tips and recommendations. The client will be subscribed by us but must click the opt in confirmation link and remain subscribed until the date of the refund request. If this e-mail isn't received the client can request access again by contacting us. The email address this will originate from is appstogupdates@awebar.com. 1. The language of the clause 5.5 is somewhat narrative (rather than obligatory) commencing with the words: to help the clients achieve success with their applications, we provide a service of updates, hints, tips and recommendations. ..... 1. The respondent submitted that the client/applicant must click the "opt in" confirmation link and remain subscribed until the date of the refund request. 2. The applicant, notwithstanding that the APP did not suit the company's business needs, nonetheless went to the link in July 2013. The link provided an "opt in/opt out" option. The applicant elected the "opt out"option that was available at the website. 3. The applicant's evidence was that there was no utility in her subscribing to the hints, tips and recommendations given that the APP did not suit her business needs. 4. The respondent submitted evidence pursuant to the Spam Act that participation in a subscription service must be consensual: the site must have an opt in/opt out button. The applicant made the election at the site and opted out of the help/assistance that the respondent provided. 5. The sole basis for the respondent avoiding the provisions of the "Money Back Guarantee" set out in the agreement is that the applicant did not comply with clause 5.5: the applicant did not "opt in" to the service that the respondent provided, i.e., e-mail updates, hints, tips and recommendations. 6. The applicant agrees with that position though notes that there was no utility in her pursuing the offer of assistance, given that the product did not comply with the brief. Matters for consideration 1. Pursuant to the provisions of section 3 (c) of the Act, the definition of a "consumer" includes a small proprietary company. Pursuant to section 3 A (1) of the Act, "a "consumer claim" is (as defined) (a) a claim by a consumer for the payment of a specified sum of money, or (b) a claim by a consumer for the supply of specified services, or (c) a claim by a consumer for relief from payment of a specified sum of money, that arises from a supply of goods or services by a supplier to the consumer, whether under a contract or not, or that arises under a contract that is collateral to a contract for the supply of goods or services. 1. I am satisfied that the applicant is a consumer and that the agreement entered into between the applicant and the respondent is for the supply of goods and services under a contract to which the Act applies. 2. Further, section 8 of the Act provides that the Tribunal: (1) In determining a consumer claim wholly or partly in favour of a claimant, the Tribunal may, subject to this Part, make such one or more of the following orders as it considers appropriate: Section 1 (a) includes an order that requires a respondent to pay to the claimant a specified amount of money, 1. In making any order pursuant to section 8, the Tribunal is to be guided by section 13 of the Act in making orders that will be fair and equitable. I set out the relevant provisions of section 13 below: 2. Matters to be taken into account by Tribunal when making orders under this Part. Section 13 (1) When making an order or orders under this Part, the Tribunalmust make such orders as, in its opinion, will be fair and equitable to all the parties to the claim. Clause 13 (2)(g) addresses specifically matters that the Tribunal should take into account where the subject of the claim is a contract for the supply of goods or services or a contract collateral to such a contract: (i) whether or not before or at the time when the contract was made its provisions were the subject of negotiation, and (ii) whether or not it was reasonably practicable for the claimant to negotiate for the alteration of or to reject any of the provisions of the contract, and (iii) whether or not any provisions of the contract impose conditions which are unreasonably difficult to comply with or not reasonably necessary for the protection of the legitimate interests of any party to the claim, and (iv) if the contract is wholly or partly in writing, the physical form of the contract and the intelligibility of the language in which it is expressed, and (v) the extent (if any) to which the provisions of the contract and their legal effect were accurately explained by any person to the claimant and whether or not the claimant understood the provisions and their effect, and (vi) the commercial or other setting, purpose and effect of the contract. 1. The agreement is drawn in, what I shall call, a standardised format. It seems unlikely that the terms were subject to any negotiation prior to the applicant signing the document; (ss i and ii) ; 2. On my view, clause 5.5 of the agreement, the mandatory opt in for what I shall call "the help" provisions, on the evidence was of no utility to the applicant and had the effect of being unreasonably difficult to comply with given the respondent's evidence about the opt in/opt out facility on the website (ss iii) 3. The language of clause 5.5 is couched more in terms of assistance rather than obligation. If construed in favour of the respondent, its effect would be to allow the respondent to avoid the "Money Back Guarantee" provisions in the agreement notwithstanding that the applicant complied with all other provisions of clause 5 [except for the reference to term 5.5] (iv) . 4. As I have said, the agreement was in a standardised format. The extent to which the importance of clause 5.5 was drawn to the applicant's attention is uncertain on the evidence, though the applicant's evidence is that it did not appreciate that the respondent's interpretation of the provision would act as a total bar to what was being offered as "A Money Back Guarantee" on certain other terms, all of which the applicant had satisfied. (v) . 5. The purpose of the contract was that the respondent had agreed to supply the goods and service whilst offering a money back guarantee to the applicant if certain provisions of the contract were satisfied. However, the respondent sought to rely solely on clause 5.5 which had the effect of defeating an otherwise legitimate claim made by the applicant in reliance on the Money Back Guarantee provisions of the agreement. (vi) . 6. Given the guidelines set out in section 13 of the Act, and as referenced above, it would not be just and equitable if the respondent was entitled to rely solely on the provisions of clause 5.5 of the agreement to defeat the applicant's claim. 7. The applicant had satisfied all other provisions of the clause: 5.1; 5.2; 5 3 and 5.4 entitling it to a refund. 8. I am not persuaded that the respondent is entitled to rely on clause 5.5 to resist its obligations to provide a money back guarantee to the applicant upon satisfying 5.1; 5.2; 5 3 and 5.4 of the terms 9. The applicant achieved no success with the APP. The goods/service the subject of the supply did not meet the applicant's brief for an APP to assist with the business. 10. The Tribunal, in its opinion, must make orders that are fair and equitable to all the parties to the claim. To embrace the respondent's position would depart from what the Tribunal considers a fair and equitable order applying the guidelines set out in Section 13. 11. Accordingly, the applicant is entitled to receive a refund pursuant to a "Money Back Guarantee" that the respondent offered in relation to the supply of those goods and services. 12. The respondent's name Smart Australia Developments t/a APPS Together, is amended to Smart Australia Developments Pty Ltd t/a APPS Together. Margaret Mary McCue General Member Civil and Administrative Tribunal of NSW 28 April 2015 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: 07 July 2015