Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Toovey v Goway Travel Pty Ltd [2019] NSWCATCD 11 Hearing dates: 26 March 2019 Date of orders: 04 April 2019 Decision date: 04 April 2019 Jurisdiction: Consumer and Commercial Division Before: S Thode, Senior Member Decision: 1. In GEN 18/50523 the application is dismissed. 2. In GEN 18/50512 the application is dismissed. Catchwords: CONSUMER CLAIM – agency – ostensible authority Legislation Cited: Civil and Administrative Tribunal Act 2014 Cases Cited: Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Co Pty Ltd (1975) 133 CLR 72 and Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146; Freeman and Lockyer v Buckhurst Park Properties (Mangal) Ltd (1964) 2 QB 480; Hoare v McCarthy (1916) 22 CLR 296, at 305-306; Northside Developments Pty Ltd v Registrar-General [1990] HCA 32; (1990) 170 CLR 146 Reckitt v Barnett, Pembroke and Slater Ltd [1929] AC 176; Category: Principal judgment Parties: Proceedings GEN 18/50512: Bruce Toovey, Michael Toovey, Russell Toovey and Chris Ostrowski (Applicants) Goway Travel Pty Ltd (Respondent) Proceedings GEN 18/50523: Bruce Toovey (Applicant) Goway Travel Pty Ltd (Respondent) Representation: Bruce Toovey (self-represented) Counsel: Ms Scott (Respondent) File Number(s): GEN 18/50512; GEN 18/50523 Publication restriction: Nil REASONS FOR DECISION Background 1. The applicants purchased separate travel and accommodation packages from the respondent, a travel agent, in 2014 and 2015 respectively. The packages, the applicants allege, provided airfares and accommodation valid for 5 years from the date of sale. The applicants received travel and accommodation services between 2015 and 2018. In about 2018, after some applicants, particularly the Tooveys, had taken many trips over several years, he was advised by the company that the employee who had sold the packages had never been authorised to do so, and that the sales had occurred "outside the scope of her employment". Provision of further goods and services by the respondent ceased. The applicant seeks a refund for the component of travel and accommodation he claims have not been provided. GEN 18/50523 Toovey v Goway Travel 1. GEN 18/50523 in which he claims the travel package included the following terms and conditions: In December 2015 we were offered a five-year Platinum travel package by Lisa Comito, operations manager for Goway Travel and on behalf of Goway Travel for a payment of $17,000. On February 9, 2016 I paid Goway Travel Pty Ltd a total of $17,255 being $17,000 for the package and credit card processing fee of $255. From September 1, 2016 to April 2017 we were provided with some travel, both domestic and international. This travel seized and was not available until early January 2018. In total we were provided with travel for approximately one year of a five-year contract. We are claiming $13,600 being the cost of the remaining package GEN 18/50512 Toovey & Ors v Goway Travel 1. Mr Toovey filed separate proceedings in his name and on behalf of Michael Toovey and Russell Toovey, his sons. These proceedings are GEN 18/50512 2. In those proceedings Mr Toovey claims the following: On December 1, 2014 I purchased seven travel packages from Lisa Comito, operations manager for Goway Travel Pty Ltd. Upon receipt of a tax invoice from Goway (tax invoice 435871) I paid the full amount via my credit card. Total for the seven packages was $33,300. The packages were purchased for myself and on behalf of family and friends. Breakup of the packages: See attached invoice from Goway. Of the seven packages purchased four in total were delivered leaving a balance of three packages left with a total value of $16,600 which Goway are refusing to honour. On July 5, 2018 Goway issued an email stating that "we have recently discovered some highly irregular procedures in the processing of "family and friends" King files and as a result, we must completely freeze all transaction effective immediately. Further emails were received including one from the fund and president of Goway Mr Bruce Hodge. 1. In the section REASONS FOR THE ORDERS Mr Toovey writes the following: On December 1, 2014 I paid for 7 travel packages (tax invoice 435871) for the total of $33,000. These packages were purchased on behalf of myself, my sons Russell Toovey, Michael Toovey and a family friend, Chris Ostrovski. Since the purchase of these packages Goway have provided travel for: Michael Toovey (2 x business class ticket value $4000 leaving a balance of $5600); Chris Ostrovski (1 x business class ticket including accommodation for a total of $5500 leaving a balance of $5600); Russell Toovey (1 x package total value $5500) no travel taken. Balance due is full amount $5500; Bruce Toovey two times packages total value $7100. For value used no balance due; A total for the three packages not used $16,700 as claimed; 1. On the morning of the hearing a legal representative for Mr Ostrowski appeared, withdrawing Mr Ostrowski's claim for $5600. 2. Mr Toovey confirmed that due to the withdrawal of Mr Ostrowski's claim he limits his claim in respect of GEN 18/50512 to $11,000. Jurisdiction 1. I am satisfied the Tribunal has jurisdiction to hear and determine the issues between the parties as the action by the owners is a consumer claim within the meaning of s79 of the Fair Trading Act 1987. The Tribunal does not have jurisdiction to hear and determine a consumer claim if the cause of action giving rise to the claim first accrued more than 3 years before the date on which the claim is lodged (see s79L). 2. In respect of time, it is not in dispute that the cause of action arose in or about 2018 when the respondent first informed the applicant that Goway would provide no further travel because Ms Comito acted at all times outside her authority. I am satisfied that the claim has been brought within time. 3. The relevant enquiry for the Tribunal is whether the action brought by the applicant is a consumer claim. 4. Based on the definition of "consumer claim", and other definitions in Part 6A of the Fair Trading Act, the elements of a consumer claim arising from the supply of services are that the claim must be: 1. made by a consumer (as defined in s 79D; see also s 79H); 2. arising from a supply (as defined in s 79G(2)); 3. of services (as defined in s 79F); 4. by a supplier (as defined in s 79D) to a consumer (whether or not under a contract) in the course of carrying on or purporting to carry on a business (as defined in s 4); 5. for one of the remedies listed in s 79E(1)(a) to (d). Issues to be determined 1. I am satisfied that the applicants are consumers for the purpose of the Act. 2. I am satisfied that the application has arisen from a supply of services in the course of carrying on or purporting to carry on a travel business. Whether or not the services were provided under a contract is, in my view an irrelevant consideration for the issues I have to determine. 3. The real issue in the case is whether Ms Comito had actual or ostensible authority to act as agent on behalf of the respondent to sell various packages at vastly discounted prices. 4. In the event that the respondent principal is bound by the actions of its agent, has the applicant suffered loss and damage? Application GEN 18/50523 1. There is a longstanding transactional history between the applicant Mr Toovey and the respondent. The evidence demonstrates that the applicant purchased many travel packages from the respondent, some following an offer by a third party, Mr David Halifax who has no connection to the respondent company. The applicant did communicate with Ms Comino, the operations manager of the respondent. It is not in dispute that Ms Comino, as the operations manager of the respondent, had authority to arrange and make bookings and had discretion to approach hotels and airline providers to procure travel goods and services, and she did procure services for many years. The question which arises is whether Ms Comino was authorised to sell travel packages to persons of her, and Mr Halifax' choosing at vastly reduced prices over many years. 2. There is no dispute that the applicant paid many tens of thousands of dollars to the respondent company in exchange for travel. Mr Toovey embarked on dozens of journeys between 2011 and 2018. Until he was advised in 2018 that all travel services had been "frozen", he alleges there was nothing to alert him to the fact that the services were not authorised by Goway Travel. Mr Toovey deposed he had previously experienced the "best possible service from Ms Comino" (see his email, dated 12 February 2019, page 23 of the Goway Travel exhibit). 3. I have had regard to the statement issued to Police by Mr Toovey. He stated in 2011 he bought a package for $2800 for a trip to Hawaii which was taken with no issues in 2013. He alleges he received documents under Goway letter head but no such documents were produced. In 2013 Mr Toovey again bought another trip to Europe from Mr Halifax for $9900, which was taken. Again he alleges that paperwork received was under the letterhead of Goway Travel, but no documents bearing the Goway letterhead, or forwarded on Goway emails have been produced to the Tribunal. In 2014 Mr Toovey paid another $5000 package, to David Halifax travel was procured or provided by Goway Travel. He again alleges that this travel was documented and confirmed through Goway Travel, again, no documents to support this contention have been produced. In October 2014 Mr Toovey and his associates travelled to France, Germany Spain and Italy. In October 2015 several applicants travelled to Ireland and England. In December 2015 the Tooveys travelled to Canada and the United States. 4. Goway tendered the affidavit of Mr Forno, a contractor of Goway who was brought in to investigate the Family and Friends packages sold by Ms Comino. Mr Forno deposes that Goway paid substantial sums of money to providers of goods and services to accommodate the Toovey's travel packages, at a cost far greater than the moneys it received. Mr Forno provided a lengthy affidavit, essentially providing evidence of large financial losses incurred by the company as a result of Ms Comino's actions. 5. In respect of the travel package, subject of these proceedings, In 2015 Mr Toovey was contacted by Mr Halifax who offered a $17,000 five-year package. The money was paid to the respondent. The applicant relied on a Westpac electronic statement which demonstrates that on 9 February 2016 he transferred $17,255 into Goway Travel Pty Ltd accounts in Sydney. It is not in dispute that the respondent received the money. 6. As is set out in his application form, from September 1, 2016 to April 2017 Mr Toovey was provided with some travel, both domestic and international. He concludes that this was one years' worth of travel, and he seeks the refund of the approximate value of 4 year's travel, or four fifths of the five year contract. Application GEN 18/50523 1. In respect of GEN 18/50523 I am equally satisfied that the application has arisen from a supply of services in the course of carrying on or purporting to carry on a travel business and that the claim is a consumer claim. 2. I am satisfied that on or about November 2014 Mr Halifax brought certain travel services to Mr Toovey's attention. The travel services are set out in page 9 of the court book and the applicant claims he was offered, by Mr Halifax, 5 years' travel including business class airfares to Europe, including London, or the USA, 28 days accommodation in Europe, and 28 days accommodation in the USA. The services were offered to Mr Toovey and were services that were ultimately provided to Mr Toovey by the respondent. 3. I am satisfied that the applicant paid for the services by direct bank transfer into Goway Travel's accounts on 28 November 2014. 4. I am satisfied the respondent provided goods and services. The invoice displays the ABN and licence Number of Goway Travel, it uses the Reference and Agent Code used by Goway and provides a detailed list of services and prices of travel for 5 years. The invoice is extremely detailed and the document states on its face "This invoice covers the cost of supplying the goods and services listed above and our services in arranging these supplies on your behalf." I accept that Mr Toovey thought the invoice was genuine, although I do not. 5. The agent acting on behalf of the respondent was Ms Lisa Comito. Ms Comito personally arranged travel for Mr Toovey and it is not in dispute that travel goods and services were provided to Mr Toovey and persons nominated by him from time to time. 6. Ms Comito was at all relevant times the Operations Manager who arranged bookings for an on behalf of the respondent and booked the services for the applicants in 2016, in performance of the contract (see court book pp 18, p 142, page 277 of the court book). Ms Comito arranged flights, rental cars between 2011 and 2018, hotel accommodation, and if necessary, re-booked and re-arranged them at Mr Toovey's behest. 7. There is no challenge to the fact that the applicants paid money to the respondent and that the respondent provided goods and services, over many years, in consideration of the many payments received. 8. The question then becomes whether Ms Comito, had the actual or ostensible authority to bind the company to the "travel packages". For the reasons that follow, I am not satisfied that the applicants have established actual or ostensible authority. Ostensible authority 1. The real issue in the proceedings is whether Ms Comito had authority, either actual or ostensible, to order travel goods and services so as to bind the respondent for many years into the future. 2. So far as the relevant agreement or agreements are concerned the applicants assert that the employee Ms Comito had actual authority to enter the arrangements or alternatively, she had ostensible authority to do so. 3. The onus to establish authority, actual or ostensible, lies with the applicants. 4. The legal principles referable to ostensible authority were not provided to the Tribunal but I have taken into account the following well known authorities. 5. The principle of ostensible authority was stated as follows in Freeman and Lockyer v Buckhurst Park Properties (Mangal) Ltd (1964) 2 QB 480, at 503 per Diplock LJ: 'An 'apparent' or 'ostensible' authority … is a legal relationship between the principal and the contractor created by a representation, made by the principal to the contractor, intended to be and in fact acted upon by the contractor, that the agent has authority to enter on behalf of the principal into a contract of a kind within the scope of the 'apparent' authority, so as to render the principal liable to perform any obligations imposed upon him by such contract. To the relationship so created the agent is a stranger. He need not be (although he generally is) aware of the existence of the representation but he must not purport to make the agreement as principal himself. The representation, when acted upon by the contractor by entering into a contract with the agent, operates as an estoppel, preventing the principal from asserting that he is not bound by the contract. It is irrelevant whether the agent had actual authority to enter into the contract.' 1. This statement has been followed and applied by the High Court of Australia in Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Co Pty Ltd (1975) 133 CLR 72 and Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146. 2. Fundamentally, the relevant 'representation of authority' must emanate from the principal. 3. The applicants must prove not only that they in fact relied upon the principal's representation, but also that their reliance was reasonable: see Hoare v McCarthy (1916) 22 CLR 296, at 305-306; Reckitt v Barnett, Pembroke and Slater Ltd [1929] AC 176, at 182. This requirement was discussed in Egyptian International Foreign Trade Co v Soplex Wholesale Supplies Ltd (The 'Raffaella') [1985] 2 Lloyd's Rep 36 at 41: It is important to bear in mind that the doctrine of holding out is a form of estoppel. As such, the starting point is that the principal must be shown to have made a representation, which the third party could and did reasonably rely on, that the agent had the necessary authority. The relevant enquiry, therefore, in all cases is whether the acts of the principal constitute a representation that the agent had a particular authority and were reasonably so understood by the third party.' 1. Importantly, reliance on a representation cannot be reasonable where the circumstances put the applicants on inquiry as to whether the purported agent, in this case Ms Comito, had the requisite authority. The principle was expressed as follows in Tipperary Developments Pty Ltd v The State of Western Australia [2009] WASCA 126; (2009) 38 WAR 488, at [110]: 'A principal can only be made liable on the ground of ostensible authority where the third party reasonably relied upon the representation as to authority: Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480, 498. There is no reasonable reliance when the nature of a transaction or other circumstances put the third party on inquiry as to whether the purported agent has the requisite authority: Northside Developments Pty Ltd v Registrar-General [1990] HCA 32; (1990) 170 CLR 146.' 1. In Northside Developments Pty Ltd v Registrar-General [1990] HCA 32; (1990) 170 CLR 146, Brennan J said, at 180: 'A party dealing with a company cannot assume that its officers or agents have a particular authority if the circumstances are such as to put that party on inquiry as to whether the authority exists and no inquiry is made or the company fails to satisfy the inquiry.' 1. Similarly, in Rolled Steel Ltd v British Steel Corpn (1986) Ch 246 it was said, at 284: '… even if persons contracting with a company do not have actual knowledge that an irregularity has occurred, they will be precluded from relying on the rule if the circumstances were such as to put them on inquiry which they failed duly to make.' 1. The applicants must prove actual reliance on a relevant representation of authority. The respondent submitted that the applicant had not established that the applicants' reliance was reasonable in all of the circumstances because the travel services provided at the prices that were paid, were simply "too good to be true". 2. It is of particular importance that Mr Halifax was used as a middle man. Mr Halifax is not an employee or an agent of the respondent and the respondent did not know of his existence until 2018 when the travel deals came to light. He clearly had no authority to facilitate, arrange, procure or advertise the sales by the respondent to his friends and associates, the Tooveys. 3. There is simply no evidence to suggest that any principal of the company authorised Ms Comito sell travel goods and services to persons at favourable prices, to friends, family or anyone, for that matter. Nor is there evidence that the company authorised discount travel packages to family and friends of staff under any circumstance. 4. I am satisfied that the operations manager had no authority to bind the respondent. 5. In my view, the evidence as a whole supports a finding that emails allegedly sent by Ms Comito as "staff emails" were not Goway Travel email addresses and were insufficient to establish her authority. I accept that Hotmail and Gmail addresses were not used by the company and that the respondent had not control over or access to the email generated allegedly on behalf of Goway Travel. Further, Mr Toovey did not require that Ms Comito (or Mr Halifax for this matter) produce evidence of authority (in the form of company receipts) until 2018 when he insisted, for the first time, to be provided with an invoice. The company denies that the invoice was genuine, there is no evidence that the invoice was sent from a Goway Travel email address, and I accept the evidence of the respondent that the invoice was not created or authorised by the company and appears to be a copy of a letterhead. 6. There is simply no evidence at all that any person at Goway Travel made any representation or by its conduct did anything to convey an impression or assurance to Mr Toovey concerning Ms Comito's authority. Mr Toovey attempted to rely upon the terms of staff emails generated on Hotmail and Gmail platforms, and on the fact that he made payments. In my opinion none of those matters are proof of the fact that Ms Comito had actual or ostensible authority to provide packages for prices which caused a loss to the respondent. Nothing flows from Ms Comito's position as Operations Manager at Goway Travel sufficient to constitute a representation that she had for example authority to enter into travel packages at prices that were unsustainable. 7. A contracting party who brings an action against a principal on a contract made by an agent must prove both the existence of an enforceable contract and (emphasis added) (actual or ostensible) of the agent to make it (see Law of Agency 3rd Edition, GE Dal Pont Lexis Nexis Butterworth, Aust 2014, p428. "In other words, it is not enough that a man should be an agent of another to enable him to make any contract on his behalf; he must make it as his agent". The enquiry relevant for the purpose of this application is whether the goods were supplied as part of the ordinary business of the respondent. I am so satisfied. However as there is no indication that Ms Comito acted as the agent of the respondent when she provided goods and services at vastly reduced prices and the action of the applicants against the respondent for a refund of unused services must fail. Loss and Damage 1. In light of my finding that the agent had no authority to bind the company to travel package deals for years to come, it is not necessary for me to make an assessment to loss and damage. I do so merely to bring finality to these proceedings. Even if I have erred and Ms Comito had authority to bind the respondent I am not satisfied that Mr Toovey has suffered loss or damage. 2. First, I am not satisfied that persons other than Mr Toovey have established that they are party to any contract with Goway Travel. Mr Toovey in his personal capacity has received approximately $127,000 worth of travel services. There is no evidence before me that Mr Toovey received money from his sons, or his wife, or that anyone other than Mr Toovey in his personal capacity purchased services from Goway Travel. I am satisfied that Mr Toovey, arranged travel for his wife and children. I am therefore satisfied that Mr Toovey is the proper applicant and Mr Toovey is the only person with standing to bring these proceedings. 3. I am of the view that in light of the fact that Mr Toovey has received tens of thousands of dollars in goods and services, I am not of the view that it is reasonable to compensate him for losses of four fifth of the contract he alleges he entered with Goway Travel. He concedes that travel was received and he has tendered no evidence as to the value of travel services which he claims he has lost. The applicant also has not sought specific performance of outstanding services. In essence, I am of the view that it is not fair and equitable to award Mr Toovey any damages considering the value of goods and services he has received to date. 4. The Tribunal does not accept that it is appropriate, nor fair and equitable, to award the cost of four years of travel as set out in tax invoice 43587 because Mr Toovey and his associates have already greatly benefited from the unauthorised dealings. 5. The respondent company, by purchasing dozens, maybe hundreds of products and services from hotels and airlines has sustained considerable losses, based on the uncontested evidence of Mr Forno. 6. I have had regard to s79U of the Fair Trading Act. 79U MATTERS TO BE CONSIDERED BY TRIBUNAL WHEN MAKING ORDERS (1) When making any orders under this Division, the Tribunal must be satisfied that the orders will be fair and equitable to all the parties to the claim. 1. Under the circumstances, I am not of the view that it is justifiable Mr Toovey be granted relief as sought to be compensated for four years' travel. The applicant has not persuaded me that it is fair and equitable to compensate him, nor is there any evidence of actual losses incurred. ********** 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: 10 April 2019