The appellant, Blue Bella Pty Limited t/as Quantum Change Seminars (QC Seminars), provides seminars to consumers described as Neuro Linguistic Programming (NLP) training. NLP training is said to be "the practice of advanced communication personal development psychotherapy". The seminars are conducted from venues hired by QC Seminars for this purpose.
One of the seminars provided by QC Seminars using NLP training is the seminar known as the "Million-Dollar Speaker" seminar. It was conducted over a four-day period from 18 to 21 November 2014 from premises in Wollongong. The respondent, Ms Lee Jackson, who resides in Canberra, attended the seminar. According to Ms Jackson, she attended the seminar to improve her self-development and business skills.
On the last day of the seminar, the lead presenter, Ms Roberta Faddoul, who is also a director of QC Seminars, made presentations at or just before breaks promoting a 14-day guided tour of Egypt which was being organised by QC Seminars. The Tour was called the "Beyond First-Class Egypt Excursion 2015".
Ms Jackson signed the sales contract for the tour on 21 November 2014 and paid a deposit of $1000. The contract was for two tickets, which included accommodation, food, transport in Egypt, and tours, at a total cost of $14,594. The tour was to commence in November 2015 and the purchase price was to be paid by monthly instalments of $1133. The contract provided for a three-day cooling off period.
Ms Jackson failed to pay the instalment for January 2015 and on 1 February 2015 made a written request for a refund. QC Seminars refused to provide a refund and in July 2015 commenced proceedings against Ms Jackson in the Wollongong Local Court for recovery of the amount owing under the contract which at that stage were said to be $7022. However, prior to the commencement of these proceedings, Ms Jackson commenced proceedings against QC Seminars on 25 June 2015 in the Consumer and Commercial Division of the Tribunal seeking a refund and an order that she be relieved of payment of the balance of the contract price. The Local Court proceedings were transferred to the Consumer and Commercial Division and the proceedings were listed for hearing on 12 October 2015.
On that day, the Tribunal made an order that QC Seminars refund $7797 to Ms Jackson and declared that the balance of $7000 was not due and owing. The Tribunal provided written reasons on 15 October 2015. The basis for the decision was that the sales contract was an unsolicited consumer agreement, QC Seminars had not complied with the relevant legislative provisions in failing to notify Ms Jackson she had a 10-day cooling off period and Ms Jackson thereby had a six-month period to terminate the contract, which she did. The termination was valid and the sales contract was therefore at an end.
QC Seminars appealed the decision on 2 November 2015 to the internal Appeal Panel of the Tribunal on the grounds that the Tribunal had erred in finding the sale contract was an unsolicited consumer agreement. QC Seminars further contended that Ms Jackson had attended the QC Seminars premises and it was permitted to promote further products to those people attending the seminars.
An internal appeal may be made in respect of a decision of the Consumer and Commercial Division as of right on a question of law or with the leave of the Appeal Panel on any other ground: s 80(2)(b) of the Civil and Administrative Tribunal Act 2013 (NSW) (the Act). Clause 12 of Schedule 4 of the Act provides that the Appeal Panel may grant leave only if it is satisfied that the appellant may have suffered a "substantial miscarriage of justice" because the decision was not fair and equitable, against the weight of evidence or because significant new evidence had arisen, which was not reasonably available at the hearing.
The issue for determination was whether the Tribunal erred in finding that the sales contract between QC Seminars and Ms Jackson was an unsolicited consumer agreement. The question of whether an agreement is an unsolicited consumer agreement is a question of mixed fact and law. However, in this case, the material facts are not in dispute. The issue before the Appeal Panel was whether the Tribunal correctly applied the relevant legislative provision to the facts of the case. This is a question of law and QC Seminars may appeal as of right.
The Appeal Panel has dismissed the appeal. Our reasons follow.
[2]
Relevant statutory framework
The claim made by Ms Jackson was pursuant to s 79I of the Fair Trading Act 1987 (NSW) (the FTA) for the determination of a "consumer claim". A "consumer claim" is defined in s 79E(1) to mean, relevantly, a claim by a consumer that arises from the supply of goods or services by a supplier for the payment of a specified sum (subs (a)) or for relief from payment of a specified sum of money (subs (e)).
The claim made by Ms Jackson was under the Australian Consumer Law, the text of which is set out in Schedule 2 of the Competition and Consumer Act 2010 (Cth). The Australian Consumer Law and the regulations made under s 139G of that Act (the Competition and Consumer Regulations 2010 (Cth)), applies in New South Wales as part of the FTA: Part 3 of the FTA and, in particular ss 27 to 32.
Relevantly, s 31 provides:
31 Interpretation of Australian Consumer Law
(1) The Acts Interpretation Act 1901 of the Commonwealth applies as a law of this jurisdiction to the Australian Consumer Law (NSW).
(2) For the purposes of subsection (1), the Commonwealth Act mentioned in that subsection applies as if:
(a) the statutory provisions in the Australian Consumer Law (NSW) were a Commonwealth Act, and
(b) the regulations in the Australian Consumer Law (NSW) or instruments under that Law were regulations or instruments under a Commonwealth Act.
(3) The Interpretation Act 1987 of New South Wales does not apply to:
(a) the Australian Consumer Law (NSW) , or
(b) any instrument under that Law.
Section 32 of the FTA provides that the Australian Consumer Law (NSW) (referred to in these reasons as the "ACL (NSW)") applies to persons carrying on business in New South Wales, bodies corporate incorporated or registered under the law of New South Wales and persons ordinary resident in New South Wales or otherwise connected with New South Wales.
Division 2 of Part 3.2 of the ACL (NSW) sets out the legislative regime for the regulation and operation and effect of unsolicited consumer agreements. At the centre of the regime is the definition of an "unsolicited consumer agreement" which is contained in s 69 of the ACL (NSW). Section 69 provides as follows:
69 Meaning of unsolicited consumer agreement
(1) An agreement is an unsolicited consumer agreement if:
(a) it is for the supply, in trade or commerce, of goods or services to a consumer; and
(b) it is made as a result of negotiations between a dealer and the consumer:
(i) in each other's presence at a place other than the business or trade premises of the supplier of the goods or services; or
(ii) by telephone;
whether or not they are the only negotiations that precede the making of the agreement; and
(c) the consumer did not invite the dealer to come to that place, or to make a telephone call, for the purposes of entering into negotiations relating to the supply of those goods or services (whether or not the consumer made such an invitation in relation to a different supply); and
(d) the total price paid or payable by the consumer under the agreement:
(i) is not ascertainable at the time the agreement is made; or
(ii) if it is ascertainable at that time--is more than $100 or such other amount prescribed by the regulations.
(1A) The consumer is not taken, for the purposes of subsection (1)(c), to have invited the dealer to come to that place, or to make a telephone call, merely because the consumer has:
(a) given his or her name or contact details other than for the predominant purpose of entering into negotiations relating to the supply of the goods or services referred to in subsection (1)(c); or
(b) contacted the dealer in connection with an unsuccessful attempt by the dealer to contact the consumer.
(2) An invitation merely to quote a price for a supply is not taken, for the purposes of subsection (1)(c), to be an invitation to enter into negotiations for a supply.
(3) An agreement is also an unsolicited consumer agreement if it is an agreement of a kind that the regulations provide are unsolicited consumer agreements.
(4) However, despite subsections (1) and (3), an agreement is not an unsolicited consumer agreement if it is an agreement of a kind that the regulations provide are not unsolicited consumer agreements.
There are no regulations under the Competition and Consumer Regulations 2010 that currently prescribe certain kinds of agreements as unsolicited consumer agreements under s 69(3).
However, reg 81(1) excludes certain agreements from being an unsolicited consumer agreement and provides:
(1) For subsection 69(4) of the Australian Consumer Law, the following kinds of agreement are not unsolicited consumer agreements:
(a) a business contract;
(b) a discontinued negotiations agreement;
(c) an agreement made in the course of a party plan event;
(d) a renewable agreement of the same kind;
(e) a subsequent agreement of the same kind.
None of these exclusions are relevant to the present case.
Section 70 provides that in proceedings relating to a contravention or possible contravention of Division 2 an agreement is presumed to be an unsolicited consumer agreement if a party to the proceedings alleges the agreement is unsolicited and no other party to the proceeding proves that the agreement is not unsolicited. In other words, once an allegation is made that a consumer agreement was unsolicited, the onus is on the dealer to prove otherwise.
For there to be an unsolicited consumer agreement under Division 2, all of the matters referred to in s 69(1) must be satisfied or the agreement must be prescribed as such under the Regulations (s 69(3)). To rebut the presumption in s 70, the dealer must therefore establish that at least one of the provisions in s 69(1) is not satisfied or that the agreement is of a kind that falls within reg 81 of the Regulations. The provisions are unusual because the consumer does not need to prove any of the matters in s 69 to establish a contravention under the Division. All the consumer must do to enliven the operation of the presumption is to make the allegation of contravention.
This reversed onus may seem harsh but discloses a strong legislative intention to impose strict consumer protections in respect of consumer contracts which are alleged to be unsolicited. The rationale for the presumption in s 70 is set out in the Explanatory Memorandum for the Trade Practices Amendment (Australian Consumer Law) Bill (No 2) 2010 (Cth) (the Explanatory Memorandum) at [854 −856] as follows:
854. The rebuttable presumption operates if a party to the proceeding alleged that the (proposed) agreement is one to which the unsolicited selling provisions apply, and no other party to the proceedings proves that this is not the case.
855. The effect of the presumption is that, once the issue has been raised by a claimant in proceedings (a consumer or an enforcer), the respondent must show, on the balance of probabilities, that the agreement is not an unsolicited consumer agreement (or would not be one if it were made).
856. Questions about whether an agreement falls within the scope of the unsolicited selling provisions, which are likely to focus on the issue of solicitation, may be the subject of potential dispute between the parties to a proceeding. This will place claimants at a significant disadvantage should they be required to prove that this is the case. The rebuttable presumption has been included to ensure that the potential for a successful action by a claimant under this provision is not impeded.
If a consumer agreement is unsolicited within the meaning of s 69, the provisions set out in ss 73 to 95 of the ACL (NSW) apply. A number of the consumer protection requirements set out in these provisions are civil penalty provisions, which emphasises the seriousness with which the legislature views the regulation of unsolicited consumer agreements.
The policy behind the legislation is referred to in the report of the Law and Bills Digest Section for Parliament dated 22 June 2010 on the introduction of the Trade Practices Amendment (Australian Consumer Law) Bill (No 2) 2010 (at pp 22 - 24). The report noted the on-going problem of in-home selling and the concern expressed by consumer advocacy groups about "high pressure selling techniques" and the "vulnerability of some consumers to the marketing techniques of in-home traders". Interestingly, the definition of an unsolicited consumer agreement in s 69(1), which focuses on negotiations either over the telephone or "at a place other than the business or trade premises of the supplier", extends beyond in-home sales and negotiations. The scope of the regulatory reach of Division 2 and the meaning of the phrase "at a place other than the business or trade premises of the supplier", is at the core of this appeal.
Division 2 contains provisions relating to the negotiation of unsolicited contracts at ss 73 to 76. Section 76 provides that a dealer must not make an unsolicited consumer agreement unless the person is given information about their rights to terminate the agreement before the agreement is made.
Sections 78 to 81 set out the requirements for unsolicited consumer agreements and include the obligation on dealers to give consumers a written document evidencing the agreement and the requirements of any such agreement. Section 79 provides that the agreement must include a notice that informs the consumer about their right to terminate. The notice must be conspicuous and prominent.
Sections 82 to 88 contain provisions dealing with the termination of an unsolicited consumer agreement, including how and when the right to terminate may be exercised, the effect of termination, the obligations on suppliers and consumers on termination, the rights of consumers on termination and certain prohibitions on suppliers during the 10 day cooling off period and after termination. Relevantly, s 82(3)(a) provides that if the agreement was not negotiated by telephone, the consumer may terminate the agreement within 10 days. Section 82(3)(d) provides that if the consumer was not informed of the termination period or the agreement does not satisfy all the requirements set out in ss 78 to 81, the consumer may terminate the agreement within the period of six months after the day the agreement was made. If the contract is terminated in accordance with s 82, the agreement is taken to have been "rescinded by mutual consent" (s 83).
In summary, Division 2 sets out the legislative regime governing the supply of goods and services where the consumer has not sought out the supply. It provides rules for when and how dealer may approach consumers and the information they need to provide. Consumers must be given 10 business days as a cooling off period to terminate the agreement and must be given prior notice of this. If the dealer does not comply with these provisions, the termination period is extended to six months. There are also civil penalty consequences for breach of certain provisions.
[3]
Decision at first instance
The Tribunal found that Ms Jackson was a consumer and that the contract provided for the supply of goods and services in trade and commerce. The Tribunal also found that QC Seminars was a dealer and supplier of goods and services. The Tribunal observed that there was a presumption the agreement was an unsolicited consumer agreement because Ms Jackson asserted as such. The Tribunal noted, and apparently accepted, the evidence of Ms Faddoul that she asked attendees whether they minded if she gave a presentation about a tour to Egypt being promoted by QC Seminars. Ms Faddoul said nobody objected. The Tribunal found that this evidence was "not sufficient to rebut the presumption". There was no discussion or finding recorded in the written Reasons for Decision about whether the Wollongong venue was considered to be a "business or trade premises" of QC Seminars but it is apparent the Tribunal was not so satisfied given the ultimate finding of the Tribunal.
The Tribunal concluded that the sales contract was an unsolicited consumer agreement, QC seminars had not complied with the provisions of s 76 of the ACL (NSW), as it was required to do, and the termination period for the contract was therefore six months by reason of s 82(3)(d) of the ACL (NSW). The contract was made on 21 November 2014 and the six-month termination period expired on 21 May 2015. As Ms Jackson had given written notice on 1 February 2015, the agreement was validly terminated and Ms Jackson was entitled to a refund of the money paid and to be relieved of liability to pay any further amounts under the contract.
[4]
Grounds of appeal and reply to appeal
QC Seminars contends that its contract with Ms Jackson was not an unsolicited consumer agreement because it was negotiated and entered into at QC Seminars' place of business. QC Seminars conducted a seminar business and their place of business or trade premises comprised the various venues hired by QC Seminars to conduct their seminar business. Ms Jackson attended the seminar and thereby entered their place of business. As such, QC Seminars was able to promote QC Seminar products to Ms Jackson without needing to comply with the requirements of Division 2. The Tribunal erred in law in failing to find this. The Tribunal also erred in failing to take into account Ms Jackson's concession that she the contract was not unsolicited.
QC Seminars also sought leave to appeal on the same grounds. The decision was not fair and equitable and was against the weight of evidence. It was further submitted this this was an industry practice and part of the business practice of QC Seminars. This ruling would create an unfavourable precedent.
In her Reply to the Notice of Appeal, Ms Jackson stated that the contract was unsolicited. She did not attend the Wollongong venue for any other purpose than to attend the NLP seminar. There was no error of law by the Tribunal. The appeal should be dismissed.
The appeal by QC Seminars raises a question of law, namely whether the Tribunal at first instance correctly applied s 69 of the ACL (NSW) given the undisputed facts in the case.
[5]
Consideration
Ms Jackson raised a number of claims in her application to the Tribunal (refer submission dated 21 August 2015), including numerous contraventions of the ACL being breach of s 50 (harassment and coercion) non-compliance with the consumer guarantees in Division 1 (although there were no particulars of the guarantees said to have been breached), breach of s 18 and s 19 of the ACL (NSW) and allegations that the terms of the sales contract were unfair under Part 2-3 of the ACL (NSW). However, the primary claim made was that Ms Jackson was entitled to terminate the contract when she did because it was an unsolicited consumer agreement under s 69(1) of the ACL (NSW).
In her evidence to the Tribunal at first instance Ms Jackson said she did not realise there was a three day cooling off period in the contract, she was not mislead by the presentation given by Ms Faddoul during the seminar and she was aware that there would be presentations about other products, including the Egypt tour, during the NLP seminar. She signed the contract because she was excited about the trip and was in an "elevated state" after the NLP seminar. She wanted to surprise her husband and did not realise there was political unrest in Egypt. Ms Jackson said that the main reason she wanted to cancel was because of the unrest and her concern the trip would not be safe.
Given the claims raised by Ms Jackson, the critical issue in the proceedings at first instance was whether the sale contract dated 21 November 2014 was an unsolicited consumer agreement. If it was, the provisions of Division 2 applied and Ms Jackson was entitled to terminate the contract on 1 February 2015. This is because, and there is no dispute about this, the contract did not comply with s 82(3)(d). QC Seminars denied it was so required and therefore insisted on compliance with the terms of its contract with Ms Jackson, which provided a three day cooling off period. If this issue was resolved in Ms Jackson's favour, there was no need for the Tribunal to determine her other claims.
The ACL (NSW) sets out a statutory definition for when an agreement is an unsolicited consumer agreement. If all of the matters set out in s 69(1) are satisfied, an agreement will be an unsolicited consumer agreement, regardless of whether the consumer gives prior consent to the promotion and subsequent negotiation and sale. An agreement may also be "unsolicited" if it is an agreement of a kind that the Regulations provide is an unsolicited consumer agreement. As already noted, the Regulations have not prescribed any such agreements under s 69(3). As already noted, the onus was on QC Seminars to establish the agreement was not unsolicited.
It is common ground that s 69(1)(a) was satisfied in this case, namely that Ms Jackson was a consumer and the contract was a contract for the supply of services by QC Seminars in trade or commerce. It was also common ground that QC Seminars was a "dealer" within the meaning of s 71 or that s 69(1)(d) is satisfied, given the purchase price was in excess of $14,000.
QC Seminars contends that s 69(1)(b) was not satisfied, and s 69(1)(c) is therefore not relevant, because QC Seminars was operating its seminars from a venue in Wollongong. This was its place of business or trade at the relevant time. Ms Jackson was attending the appellant's place of business. Furthermore, it is contended Ms Jackson conceded during the hearing that the contract was not unsolicited.
There is no dispute that the registered and business office of QC Seminars is in Wollongong but not at the venue where the seminar was held. QC Seminars contends that the meaning of "the business or trade premises of the supplier" is wide enough to cover the Wollongong venue and indeed any other venue where QC Seminars are held.
Neither this phrase nor the phrase "at a place other than the business or trade premises of the supplier" is defined in the ACL (NSW). The term "premises" is broadly defined in s 2 to mean:
(a) an area of land or any other place (whether or not it is enclosed or built on); or
(b) a building or other structure; or
(c) a vehicle, vessel or aircraft; or
(d) a part of any such premises.
The principles of statutory construction are well settled. The task of statutory interpretation must begin with a consideration of the text itself. The starting point is to consider the ordinary and grammatical sense of the statutory words to be interpreted having regard to their context and legislative purpose: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27, Hayne, Heydon, Crennan, Kiefel JJ, [47].
The phrase "the business or trade premises of the supplier" is capable of two different meanings. The first is to attribute a broad interpretation to this phrase to include premises from which a supplier operates from time to time in conducting its business, not just the registered or principal place of business of the supplier. This is the meaning argued by QC Seminars. The second meaning is to limit "the business or trade premises of the supplier" to those premises from which the supplier operates through its established principal or registered place of business, being premises "of the supplier" with which the supplier has a close and continuing connection.
Either interpretation is open on the ordinary meaning of the words. If the broader meaning is accepted, the reach of the supplier's business or trade premises will be greater and the scope of the consumer protection provisions for unsolicited consumer agreements will be narrower. In contrast, if these words are given a narrow interpretation, the scope of the legislative regime will be broader and the cross-selling and promotion of products by seminar providers and other mobile suppliers will be captured by the consumer protections in Division 2 of the ACL (NSW).
Section 15AB(1)(b)(i) of the Acts Interpretation Act 1901 (Cth) (the Act Interpretation Act) provides that extrinsic material may be considered in the interpretation of a provision of an Act to determine the meaning of the provision "if the provision is ambiguous or obscure". Extrinsic material that may be considered includes any relevant report of a committee of inquiry or other similar body that was "laid before either House of Parliament before the provision was enacted or made" (s 15AB(2)(b) or "any explanatory note or memorandum relating to the Bill for the Act that was laid before, or furnished to the members of, either House of Parliament by a Minister or other member of Parliament introducing the Bill" (s 15AB(2)(e)).
The Explanatory Memorandum provides the following guidance in relation to s 69(1)(b) at [845] to [848] as follows:
845. The provisions apply to all forms of unsolicited direct selling which take place in a non-retail context, regardless of whether a supplier has a traditional 'bricks and mortar' business or trade premises. The provisions apply to suppliers who do not have an established place of business but whose business models involve, for example, selling from trucks or the back of car boots, or trading in public places.
Third element of the test
846. The third element of the test requires that the consumer did not invite the dealer to approach or telephone them for the purpose of entering into negotiations to supply goods or services. [Schedule 1, item 1: Chapter 3, Part 3-2, Division 2, paragraph 69(1)(c)]
847. Circumstances may arise where a consumer initially solicits a supplier for the purpose and expectation of providing a particular product or service, or quoting for such a good or service (whether free of charge or for a fee), and when the supplier subsequently comes to the consumer's home or otherwise approaches the consumer, the supplier makes an unsolicited offer of a related or unrelated product or service.
848. The provisions regulate the making of such unanticipated offers to supply goods and services to a consumer and the agreements arising from such offers.
1. Examples of solicited sales that are captured by the draft provisions include:
. where a consumer agrees to attend a seminar on the basis that the seminar is advice-based or marketing-based and does not anticipate sales to take place (as opposed to seminars where sales are anticipated or made explicit beforehand); and
. sales that relate to, or follow on from, an assessment or quote.
It is clear from [845] and the first example referred to in [848] that the words "the business or trade premises of the supplier" are intended to mean the established principal place of business or trade premises of the supplier not the premises from which the supplier may trade from time to time. It is also relevant to note that this interpretation would best achieve the purpose or object underlying Division 2, which is implicit from the content of the legislative regime, namely to provide certain consumer protections to consumers who do not invite offers (s 15AA of the Acts Interpretation Act).
Accordingly, the contract between QC Seminars and Ms Jackson dated 21 November 2014 was made as a result of negotiations between QC Seminars and Ms Jackson "in each other's presence at a place other than the business or trade premises" of QC Seminars, being the supplier of services under the agreement. The agreement therefore satisfied s 69(1)(b)(i) of the ACL (NSW) and QC Seminars did not establish otherwise. It follows that s 69(1)(c) was also satisfied because Ms Jackson did not invite QC Seminars to come to the Wollongong venue for the purposes of entering into the agreement dated 21 November 2014. The fact Ms Faddoul forewarned the participants about the proposed promotion of the Egypt tour and nobody objected, does not amount to an invitation within the meaning of s 69(1)(c).
QC Seminars raised concerns about the unfavourable precedent said to be created for seminar providers by the decision of the Tribunal and, in particular, the impact on QC Seminars' business. We have found that it was the intention of the legislature to regulate the promotion of products at seminars conducted outside the established principal place of business or trade premises of the supplier unless that promotion is invited by the consumer. This highlights the public policy in protecting consumers in potentially high pressure environments. This construction is consistent with the objects of the provisions and does not produce a result that is likely to have unforeseen or unintended consequences. Relevantly, the provisions of Division 2 do not make unsolicited consumer agreements illegal but merely impose legislative protections for consumers, such as disclosure of certain information and a 10 business day cooling off period, to ensure consumers are not unduly pressured. QC Seminars can continue the promotion of its products at NPL seminars provided it complies with the provisions set out in Division 2. It is difficult to imagine why this would be unduly onerous.
[6]
Conclusion
The Appeal Panel is not satisfied the Tribunal erred in concluding that the contract which was the subject of the claim was unsolicited. Nor was it in error in concluding that the contract was terminated in accordance with s 82(3)(d) of the ACL (NSW). The orders made by the Tribunal were consistent with these findings and the appeal must therefore fail.
The appeal is dismissed.
[7]
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: 09 March 2016
Parties
Applicant/Plaintiff:
Blue Bella Pty Limited
Respondent/Defendant:
Jackson
Legislation Cited (6)
(the Competition and Consumer Regulations 2010(Cth)