To the extent that it has been determined that no valid contract was entered into between the parties it is appropriate to consider whether the applicant is entitled to recover any compensation under either of the claims in the present circumstances.
Section 79U of the Fair Trading Act 1987 details matters which are to be considered by the Tribunal when making orders and the section, so far as it is relevant to the present proceedings, provides 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.
In matter GEN18/50673 the applicant has claimed a full refund of all monies paid, namely a sum of $5,600.00 presumably on the basis that this package was never used. In the related matter, GEN18/50688 he has claimed a sum of $13,600.00 for a failure to deliver a full package for which he had aid a sum of $17,000.00.
Having determined that there is no contract between the applicants on the one side and on the respondent company on the other it is appropriate to have regard to the amount paid in each instance and the nature and extent of benefits included in the Travel Passes which substantially exceeded all reasonable expectation of what could be provided for that price. The respondents have submitted that the applicant should in fact have been aware or alerted to the questionable validity of the proposal and the fact that it could not have been made with the authority of the company as it was an offer to provide a package of services which significantly exceeded any amount paid by the applicant.
In Steve Miller and Anor v Grosvenor Constructions Pty Ltd [2017] NSWCATCD 42 Senior Member Goldstein applied s79U of the Fir Trading Act 1987 and assessed nominal damages of $10.00 to compensate an owner for the cost of installing a replacement door where the owner had already retained a benefit of $1652.00 from the contract. He determined that the resultant outcome would be fair and equitable to all parties.
In Irving v D'Michelle t/as Westside Customs and Mechanical [2015] NSWCATCD 152 Member Sarginson applied the provisions of s79U to substantially reduce the quantum of damages claimed by an applicant for repairs and/or reconditioning of an engine noting that the Tribunal did not accept it was appropriate or fair and equitable to award the costs of a fully reconditioned motor as set out in a quote which was before the Tribunal in that case.
The operation of section 79U was again considered by the Tribunal Appeal Panel in Curtis v Potter & Co Pty Ltd t/as The African Safari Co.[2016] NSWCATAP 196
The Appeal Panel observed that where a Tribunal makes an order in favour of a claimant in a consumer claim for which the Tribunal has jurisdiction under the Fair Trading Act, regard must be had to s79U of the Fair Trading Act. It was noted that the nature and extent of such power was considered by Hope JA in State Rail Authority of New South Wales v Consumer Claims Tribunal [1988] 14 NSWLR 473 in the context at that time of the provisions of s23 (2) of the previously repealed Consumer Claims Tribunal Act 1974 (NSW) which then set out the object of dealing with a claim by making such an order as in the opinion of the Tribunal was fair and equitable to all parties to the proceedings before it. His Honour noted that where there is …..
a claim or obligation to be determined by applying the general law is only where the Tribunal proposes to make an order in favour of the claimant that in some case the form of order in his favour is to be determined according to the opinion of the Tribunal as to what is fair and equitable to all parties. His Honour observed further that the Fair Trading Act was not confined to particular types of orders that might be made but the Fair Trading Act does not replace the requirement for claims to be determined in accordance with the general law.
Applying these principles it is necessary to have full regard to the fact the applicant has presently received a total benefit of some $66,106.05 representing $19,412.50 which could only have been provided under the first Pass which allowed travel between 28 July 2016 and 12 August 2016 and a further sum of $46,747.55 which related to travel undertaken on a Pass or Passes available after 25 November 2016 and up to the date when the respondent indicated that no further travel would be permitted.
On any view of the evidence the applicant has obtained a substantial benefit from the respondent and there is nothing to suggest that any compensation should be awarded in these actions or potentially in any action he make to bring in relation a remaining Pass by reason of the operation of s 79U of the Fair Trading Act 1987.
[2]
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
Parties
Applicant/Plaintiff:
Baum
Respondent/Defendant:
Goway Travel Pty Ltd
Legislation Cited (1)
Consumer Claims Tribunal Act 1974(NSW)
Cases Cited (5)
The Existence of a Contract
In relation to matter GEN18/50673 the claimed relationship between the applicant and the respondent only appears to arise from a trail of emails involving the applicant, Mr Bruce Toovey and Mr David Hallifax.
In relation to matter GEN18/50688 the purchase of the five year Platinum Passes again arose from communications, firstly by Mr Hallifax to Mr Toovey and thereafter by the applicant to Mr Hallifax. There is no indication in the evidence that Ms Lisa Comito took any part in the exchange of emails in November and December 2015 when it is alleged that these agreements were made between the parties. Reference is made, in relation to the first contract, to passing information on to Lisa but she is not otherwise identified by her full name or her relationship to the respondent in the early emails other than the emails between Mr Hallifax and Mr Toovey.
As it would appear that Lisa Comito was in fact employed by the respondent it is necessary to consider whether, on the whole of the evidence, the Tribunal should be satisfied that the applicant has established that she has actual or ostensible authority to contract with the applicant in relation to the Travel Passes.
The applicant bears the onus of establishing both the existence of the agency and the authority of the agent to effect the act giving rise to the entitlement claimed (see Lysaght Bros & Co Ltd v Falk [1905] 2CLR 421 at 427 per Griffith CJ).
The principle of ostensible authority has been set out 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.'
The question of ostensible authority comes into play as a separate issue when the authority of an agent appears to have exceeded his or her actual authority. As explained by Lord Atkin, ostensible authority appears to be excluded when the party asserting it cannot show any appearance of authority, other than the actual authority, was ever displayed to him by the principal (see Egyptian International Foreign Trade Co v Soplex Wholesale Supplies Ltd ("the Raffaella") [1985] 2 Lloyd's Rep 36 at 43).
An agent cannot give an appearance of authority by means of conduct itself which is unauthorised, since in that event, the principal will not have held the agent out to have the apparent authority that the third party seeks to invoke against the principal (see Fry v Smellie [2012] 3KB 282 at 293 per Vaughan Williams LJ.)
The people with whom the applicant was dealing were not agents or employees of the respondent and to the extent that it may be contended that Lisa Comito was an agent of the respondent there is nothing in the material provided to the Tribunal at the time when the agreement was allegedly formed to establish that Ms Comito had the authority to issue Travel Passes to persons who were not staff or friends or family of staff.
The applicant must prove not only that he in fact relied upon the principal's representation, but also that his 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.'
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.'
The applicant 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".
It is a matter of significance that Ms Lisa Comito, when communicating at any time with the applicant, used a hotmail address rather than an email address associated with the respondent company by whom she was, at that time, employed.
If it is alleged that Lisa Comito was responsible for producing the staff travel notifications then it would be reasonable to expect that a party seeking to rely on those notifications would be somewhat concerned or alarmed at the absence of any email address or other material which indicated that the documents prepared had emanated from the respondent. Her failure to provide material in a form which could be clearly identified as emanating from the respondent reduces any inference that she may have had ostensible authority.
In the absence of evidence that the negotiations giving rise to the contract were conducted by persons who had actual or ostensible authority it is clear that no contract was formed. As a basic proposition, Cheshire and Fifoot's Law of Contract makes it abundantly clear that the major and essential elements for the formation of a contract are identified as
1. Agreement (offer and acceptance);
2. Consideration;
3. Intention to create legal relations; and
4. Certainty of terms.
In the present cases there is evidence that the consideration, namely, a sum of $5,600 in the first instance and a sum of $17,000.00 in the second instance was paid to the respondent but there is no evidence that the respondent agreed to provide the products or services claimed in exchange for those sums so that no agreement could possibly arise.
Mr Forno in his evidence claimed that the alleged Travel Packages are not and were never products of Goway and that they are fictitious packages. This assertion is supported by the fact that no documentary evidence of these packages was ever produced or provided by the respondent to the applicant.
The applicant has accepted that as a result of his total outlay on packages with the respondent he has received benefits on terms of travel, accommodation and car hire totalling $66,160.05 over a period between July 2016 and February 2018. Mr Forno in his statement dated 1 February 2019 described the alleged Travel Packages as "too good to be true" and observed that the applicant ought to have been put on due enquiry in relating to the legitimacy of the alleged Travel Packages. Mr Baum in cross-examination by counsel for the respondent described the packages as "very good value" and he stated that he believed that he was dealing with Goway because of the connection between Mr Hallifax, who was a friend of Mr Toovey, with Lisa Comito, who was in some way related to Mr Hallifax.
Mr Baum claimed that he had purchased a further package for $5,600.00 which was not the subject of the present proceedings. He claimed that the further package had not been used and that he was intending to seek a refund of that package because it had never been used. He conceded that there was no evidence in the material provided by him or by the respondent that determined whether any value had been obtained from the further package.