Flight Centre Travel Group Limited T/A Aunt Betty v Goel

NCAT Appeal Panel|2021-02-22

REASONS FOR DECISION

By notice of appeal dated 7 December 2020, the appellant ("Flight Centre") trading as "Aunt Betty" appeals a decision of the Tribunal made on 9 November 2020. The Tribunal found that the respondent to the appeal was entitled to a refund of $2,336.30 in respect of a payment made by him to Flight Centre for travel.

Tribunal findings

The Tribunal made the following relevant findings: 3. The tribunal finds that the flights purchased were not available to the applicant. The tribunal has relied on the applicant's evidence that the flight was changed several times by the provider, and that none of these dates were suitable for him, as well as the respondent's evidence that she did not believe that the flights went ahead. 4. The tribunal has accepted the respondent's evidence that the relevant money has been paid to and held by Malaysian Airlines, as that the airline is willing to give a credit to the applicant with very limited terms and conditions (that is, flight must be booked by end of 2020 with flights to be taken by mid-2021, and flights to be of equal or higher amount). 5. However, of relevance to this matter, the tickets were purchased from the respondent, and the money was paid by the applicant to the respondent. In addition, the goods or serviced purchased were not provided. As such, the respondent has not complied with the terms of the contract of sale, or alternatively, the respondent has breached the agreement by not supplying the goods or service purchased. 6. The tribunal has considered the respondent's evidence that their Terms and Conditions include a paragraph titled 'Supplier Change and Cancellation Fees' and seek to rely on this. The respondent also stated the Terms and Conditions document was a hyperlink on their website, and that consumers were obliged to click that they agreed with such before being allowed to purchase tickets. 7. In considering this term, the tribunal notes that the events referred to appear to be outside the consumer's control, and note that the change in this matter was that the flight did not go ahead at any stage. That is, it was not changed, it was cancelled by the airline. This is completely outside the control of the consumer. In addition, although the supplier obliges consumers to agree with the terms and condition prior to purchase, it is unrealistic to expect consumers to enter a hyperelink [sic] and then read a detailed 8 page documents, that purports to restrict the consumer's rights, with the expectation that consumers will read and understand the document, and therefore should be bound by it.
The Tribunal found that there had been a breach of contract, or breach of the Australian Consumer Law (ACL), but without identifying the section or sections which were found to have been breached. Such breach was found to have occurred because the respondent consumer had made a purchase of goods or services from the appellant, and the goods or services paid for had not been provided. On this basis the respondent was entitled to a full refund of the monies paid, namely $2,336.30.

Appellant's submissions

The appellant submits that the tribunal erred in law in that the Tribunal misconstrued the contract made between the appellant and the respondent; erred in finding that the appellant breached the provisions of the ACL; provided no or no adequate reasons for such finding. The appellant submits the proper construction of a contract is a question of law, and refers the Appeal Panel to the following authorities: Westport Insurance Corporation v Gordian Runoff Ltd (2011) 244 CLR 239 at 279; Slipper v Berry Buddle Wilkins Lawyers [2015] NSWSC 810 at [11]; Sauvage v Cleardon Pty Ltd [2017] NSWCATAP 47 at [13].
The appellant submits that it was at all times a travel agent who sold airline tickets as an agent for the airline and not in its own right: see ACCC v Flight Centre Travel Group Limited (2016) 261 CLR 203. The appellant submits that the fact that the appellant was not an airline, but merely an agent for the airline, was an obvious fact and is a factor which is critical in determining the factual matrix: see Clark v Electrical Home Aids Pty Ltd [2017] NSWCATAP 63 at [84] and [90].
The appellant further submits that the Terms and Conditions relating to such booking were incorporated in the contract and made it plain that the appellant was acting only as agent. Further, by clicking on the website, the respondent was bound by the terms and conditions: see eBay International AG v Creative Festival Entertainment Pty Ltd (2006) 170 FCR 450 at [24], [27] and [49].
Even without clicking or signing on the website, it must be assumed that the purchaser of services is aware that conditions would apply: see Surfstone Pty Ltd v Morgan Consulting Engineers Pty Ltd [2016] 2 Qd R 194; [2015] QSC 290 at [70].
The appellant submitted the contract between the appellant and respondent was therefore not one for goods and services between the appellant and the respondent. Rather, the terms and conditions made it plain that the appellant did not contract with the respondent to provide return flights to India or guarantee the provision of such flight by the airline. The appellant only contracted to deliver booking services and travel advice.

Respondent's submissions

The respondent, who was not legally represented, supports the orders of the Tribunal. The respondent submits that he paid for the service of providing air tickets to the respondent and that the appellant had a professional and a legal responsibility to ensure the product and allied services were delivered. The respondent stated he was never in breach of any of the terms of the contract.

Legislation

The jurisdiction of the Tribunal in determining a consumer claim is conferred by Part 6A of the Fair Trading Act 1987 (the FT Act)
A "consumer claim" is defined in s 79E of the FT Act. The appellant was claiming payment of a specified sum of money arising from supply of services falling within the definition of "services" in s 79F(1)(a) of the FT Act.
Part 6A of the FT Act does not create a cause of action. Jurisdiction is conferred on the Tribunal by reference to the general type of claim made by the consumer: Lam v Steve Jarvin Motors Pty Ltd [2016] NSWCATAP 186.
A cause of action is predicated upon the existence of causes of action that arise independently from Part 6A. As was stated at para 97 of the Appeal Panel decision in Matumaini v Automobile Industries Pty Ltd [2017] NSWCATAP 93: The cause of action may be founded upon contract, tort, debt, statute or any other sufficient basis in law. All that is required is that the cause of action is available under New South Wales law to the consumer at the relevant time and provides a legitimate legal basis for the consumer to make a claim of a type listed in s 3A (1) (a) to (e) of the CC Act, or the corresponding definition in Pt 6A, against the supplier. If there is such a claim and the other requirements in relation to jurisdiction are met, the Tribunal then has power to make orders of the types listed in s8 (now ss79N, 79O and 79P of the FT Act), having regard to the legal entitlements of the parties under the causes of action upon which the claims are based: Lam v Steve Jarvin Motors Pty Ltd [2016] NSWCATAP 186 at [164].
Further, s 28 of the FT Act allows the consumer to assert a claim under the Australian Consumer Law (being Sch 2 to the Competition and Consumer Act 2010 (Cth)), which applies as the Australian Consumer Law (NSW) (ACL(NSW)).
The Tribunal considered the application both on the basis of breach of contract and breach of the ACL(NSW).

Breach of Contract

The appellant's website (the website) states the step-by-step procedure for making a reservation online. The procedure for doing so, described by the appellant, is as follows:

Step one - open website - www.auntbetty.com.au - and select destination/dates and number of travellers
Step two - all airline options return in price order
Step three - flights with Malaysia Airlines selected from the left-hand banner and results are displayed
Step four - by clicking on the View Details tab as reflected in Step three, the customer is able to obtain more details on flight routing/transits/baggage etc
Step five - once the preferred travel dates have been selected, the customer needs to input the traveller details. A summary of the flights in question are also reflected on the right-hand side.
Step six - the customer is presented with a number of additional products they are able to add to their booking if required
Step seven - the customer must now add in all remaining contact details and provide their payment details. The customer must also agree to the Terms and Conditions and the flight Fare Rules to proceed with the booking. The customer has the ability to click on the links for both the Terms and Conditions and the flight Fare Rules. A box is displayed and inside it are the following words in bold type: "I agree to the terms and conditions and flight fare rules"

The website contains a hyperlink to an entry entitled "Booking Terms and Conditions". Significantly the following relevant information is shown in such terms and conditions: Please read the following terms and conditions carefully. You must not make any booking unless you understand and agree with the following terms and conditions. References to "us", "we" and/or "our" in these booking terms and conditions shall mean Flight Centre Travel Group Limited. Where bookings of travel products are made on your behalf through Aunt Betty references to "us", "we" and/or "our" in these booking terms and conditions shall also mean and include Flight Centre Travel Group Limited trading as Aunt Betty. These terms and conditions apply to bookings you make with us via phone, as well as online bookings you make on our website. We will rely on the authority of the person making the booking to act on behalf of any other traveller on the booking and that person will bind all such travellers to these terms and conditions.
Thereafter information is provided concerning passports and visas, travel to countries which are not relevant, travel advice, health information and prices. Included in the section entitled "Payments by Credit Card" is the following provision: "If for any reason any travel service provider, including airlines, does not provide the services and/or flights, which you have booked and paid for, including but not limited to the grounding or insolvency of the Airline or travel provider, the liability is against that provider, and not against Aunt Betty".
The terms and conditions include the following under the heading "Agency": We act as an agent for, and sell various travel related products as agent on behalf of, numerous transport, accommodation and other service providers, such as airlines, coach, rail and cruise line operators, as well as all of our wholesalers. Any services we provide to you are collateral to that agency relationship. Our obligation to you is to (and you expressly authorise us to) make travel bookings on your behalf and to arrange relevant contracts between you and travel service providers. We exercise care in the selection of reputable service providers, but we are not ourselves a provider of travel services and have no control over, or liability for, the services provided by third parties. All bookings are made on your behalf subject to the terms and conditions, including conditions of carriage and limitations of liability, imposed by these service providers. We can provide you with copies of the relevant service provider terms and conditions on request. Your legal rights in connection with the provision of travel services are against the specific provider and, except to the extent a problem is caused by fault on our part, are not against us. Specifically, if for any reason (excluding fault on our part) any travel service provider is unable to provide the services for which you have contracted, your rights are against that provider and not against us.
Following that is a section entitled "Liability" which includes the following: Under circumstances where our liability cannot be excluded and where liability may be lawfully limited, such liability is limited to the remedies required of us under applicable law (including the Australian Consumer Law). This liability clause is subject to your rights under the Australian Consumer Law and nothing in these terms and conditions is intended to limit any rights you may have under the Competition and Consumer Act 2010 (Cth).
The final paragraph of the terms and conditions states: Acknowledgement: You acknowledge that you are 18 years of age or older and that you understand and agree with the above Booking Terms and Conditions and our Privacy Policy.

Australian Consumer Law

As stated above, by operation of s 28 of the FT Act, Schedule 2 of the Competition and Consumer Act 2010 (Cth) applies in NSW as the ACL (NSW). The term "consumer" is defined in section 3 of the Schedule. Section 3(1) relevantly provides: (1) A person is taken to have acquired particular goods as a consumer if, and only if: (a) the amount paid or payable for the goods, as worked out under subsections (4) to (9), did not exceed: (i) $40,000; or… (b) the goods were of a kind ordinarily acquired for personal, domestic or household use or consumption; or…
The term "services" is defined in section 2 of the Schedule to include: (a) any rights (including rights in relation to, and interests in, real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce; and…"
Part 2-2 of Chapter 2 of the Schedule relates to unconscionable conduct. The relevant sections for present purposes are as follows: Section 20 Unconscionable conduct within the meaning of the unwritten law (1) A person must not, in trade or commerce, engage in conduct that is unconscionable, within the meaning of the unwritten law from time to time. … Section 21 Unconscionable conduct in connection with good or services (1) A person must not, in trade or commerce, in connection with: (a) the supply or possible supply of goods or services to a person; or (b) the acquisition or possible acquisition of goods or service from a person; engage in conduct that is, in all the circumstances, unconscionable".

Consideration

The Appeal Panel finds that the issues raised by the appellant concerning the construction of the contract and the absence of reasons for the finding that the ACL applied constitute questions of law for determination and are properly raised by the appellant in this appeal: see John Prendergast & Vanessa Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [11]-[14].

Status of appellant

The status of the appellant was described by the High Court of Australia in the matter of ACCC v Flight Centre Travel Group Limited. Nettle J stated as follows: 97. Flight Centre operated a travel agency business in Australia and overseas comprised of a large network of shopfronts and call centres, as well as an Internet presence. Its employees included "travel consultants" who dealt directly with potential customers. One of Flight Centre's main areas of business was the sale of international passenger air travel services to customers on behalf of airlines. Flight Centre did not operate any aircraft. … 125. It is also true, as the Full Court found, that whenever Flight Centre sold airline ticket to a customer it did so as agent for the relevant airline. But, as will be seen, on the facts of this case, to say that Flight Centre acted as the agent of the airline means no more than Flight Centre was endowed by the relevant airline with authority to create in favour of the customer the right to be carried by the airline on the flight for which the airline ticket was provided. … 145. … Flight Centre was party to the sales of airline tickets, which it made to customers, albeit as agent on behalf of the airlines, just as the airline were party to the sales which they made directly.
The above decision related to anti-competitive conduct, and was not concerned with the issue now before this Tribunal. The observations of Nettle J are useful in that they confirm the status of Flight Centre as an agent when effecting the sale of airline tickets, and that Flight Centre did not contract as a principal. It should be observed that online sales were not offered by Flight Centre at the time of the decision of the High Court. However, this is not relevant to the current issue. The issue is whether the Terms and Conditions were incorporated into the contract made between the appellant and the respondent.
As is apparent from the above procedural steps to make a travel reservation using the appellant's website, it was not possible to make a reservation unless the respondent clicked the box acknowledging acceptance of the Terms and Conditions.
In the present proceedings, the terms and conditions of the reservation made by the respondent make it plain that the appellant was acting as agent. The terms state clearly: Specifically, if for any reason (excluding fault on our part) any travel service provider is unable to provide the services for which you have contracted, your rights are against that provider and not against us.

Were the terms and conditions incorporated into the contract?

The next issue is whether the respondent was bound by the terms and conditions which appeared on the appellant's website and were incorporated via the hyperlink.
In eBay International AG v Creative Festival Entertainment Pty Ltd, the Federal Court decided that, when making a purchase via the Internet, by clicking on the relevant portions displayed, the purchaser agreed to the terms and conditions, and it was on this basis that the contract was made. Rares J said at [49]: The Ticketmaster online purchase was a contract in writing signed by the parties. By clicking on the relevant buttons and, by the computer bring up all terms needed to purchase a ticket, on behalf of Ticketmaster as agent for Creative, the whole transaction was in writing, signed and agreed by the parties. A reasonable person in the position of the parties would have regarded the transaction completed on Ticketmaster's webpage as the contract.
In making his finding, Rares J relied upon the finding of the High Court of Australia in Toll (FGCT) v Alphapharm Pty Ltd (2004) 219 CLR 165. In that decision, the High Court determined that where a party is aware of the existence of conditions, but chooses not to read them, they are nevertheless bound by the conditions.
The appellant's Booking Terms and Conditions state: These terms and conditions apply to bookings you make with us via phone, as well as online bookings you make on our website.
In Hardwick Game Farm v Suffolk Agricultural and Poultry Producers Association Ltd [1966] 1 WLR 287, at 339 Diplock LJ said: The task of ascertaining what the parties to a contract of any kind have agreed shall be their legal rights and liabilities to one another as a result of the contract is a familiar one in all systems of law. It is accomplished not by determining what each party actually thought those rights and liabilities would be, but by what each party by his words and conduct reasonably led the other party to believe were the acts which he was undertaking a legal obligation to perform.
To similar effect, in Henry Kendall & Sons v William Lillico & Sons Ltd [1969] 2 AC 31, Lord Pearce at 113 said: The court's task is to decide what each party to an alleged contract would reasonably conclude from the utterances, writings or conduct of the other.
The Appeal Panel finds that, by clicking on the box indicating acceptance of the Terms and Conditions, the appellant has signified acceptance of those terms and conditions. In Thornton v Shoe Lane Parking Ltd [1971] 2 QB 163, Lord Denning MR at 170 said of conditions attaching to a parking station ticket: … For he [the customer] may reasonably regard "conditions" in general as merely regulatory, and not as taking away his rights, unless the exempting condition is drawn specifically to his attention…Telescoping the three questions [put by Mellish LJ in Parker v South Eastern Railway Co. 2 CPD 416, 423], they come to this: the customer is bound by the exempting condition if he knows that the ticket is issued subject to it; or, if the company did what was reasonably sufficient to give him notice of it.
The above authorities are conveniently referred to in Surfstone Pty Ltd and Anor v Morgan Consulting Engineers Pty Ltd [2015] QSC 290 at [43]-[46] and [53].
The Appeal Panel finds that the contract which was made by the appellant with the respondent incorporates the terms and conditions, which were incorporated by the respondent signifying consent by clicking the box provided and acknowledging that the terms and conditions applied. It is correct that the hyperlink might have been more prominently displayed, but the fact is that by clicking on the link, the respondent must be taken to have acknowledged that the terms and conditions were to be incorporated into the contract.

Consequences of agency

By virtue of the incorporation of the terms and conditions into the contract, the respondent thereby acknowledged that the appellant was acting as agent for the carrier, Malaysia Airlines, in making the airline reservations.
An agent usually means a person employed for the purpose of placing the principal in contractual or other relations with a third party. The agent is one who by authority, performs an act for another. Where a person enters into contractual relations as agent, the agent signifies that it does not sign as principal and did not intend to incur personal liability: see Universal Steam Navigation Co v McKelvie & Co [1923] AC 492 per Lord Parmoor at 503-504.
Such principle was referred to specifically in relation to travel agents in Air Tahiti Nui Pty Ltd v McKenzie (2009) 77 NSWLR 299; [2009] NSWCA 429, where Allsop P and Handley AJA said at [21], in answer to a submission that a party who arranged flight travel was liable for injuries sustained on a flight operated by the appellant: We reject these submissions. The phrase "as a principal" describes the capacity of the person who "makes an agreement for carriage". An agent who "makes" such an agreement, such as a travel agent, is not a contracting carrier.
Further, at [22], their Honours said: Travel and transport intermediaries may procure a contract of carriage as a broker or agent; or may undertake a contractual obligation for carriage. In the former case they are not a principal, but in the latter they are, even if they cannot perform the contract themselves but have to subcontract with an actual carrier.
It follows that, provided that the respondent had knowledge of the terms and conditions which included a term that the appellant was acting only as agent, or is deemed to have such knowledge, no personal liability is incurred by the agent.

Does the Australian Consumer Law operate?

The respondent maintains that the payment made was in respect of the travel to India. Such submission proceeds on the basis that the appellant was to provide the air carriage services. However, it is important to determine precisely the nature of the services which were to be provided by the appellant to the respondent.
The Tribunal Member found: 8. In its simplest form, this is a breach of contract, or a breach of the Australian Consumer Law (ACL) case where the applicant consumer has made a purchase of goods or services from the respondent, and the goods or services paid for has not been provided. The airline has provided a creditor, within very limited terms, however the consumer is entitled to a refund.
The Tribunal Member did not identify which section of the ACL(NSW) had been breached. Nor did the Tribunal Member identify the services which were to be provided, nor the contractual obligations of the appellant. The appellant relies upon such deficiency as constituting an error, being that the reasons for the alleged breach were not identified.
Sections 60 and 61(1) of the ACL(NSW) relate to what is described as the "Care Guarantees". They relevantly provide: Section 60 Guarantee as to due care and skill If a person supplies, in trade or commerce, services to a consumer, there is a guarantee that the service will be rendered with due care and skill. Section 61 Guarantees as to fitness for a particular purpose etc. (1) If: (a) a person (the supplier) supplies, in trade or commerce, services to a consumer; and (b) the consumer, expressly or by implication, makes known to the supplier any particular purpose for which the services are being acquired by the consumer; there is a guarantee that the services, and any product resulting from the services, will be reasonably fit for that purpose.
The Booking Terms and Conditions refer to the fact that the appellant, in making the reservation, was acting as agent on behalf of the suppliers of transport; that the obligation of the appellant to the respondent is to "make travel bookings on your behalf and to arrange relevant contracts between you and the travel service providers". The section of such Terms concerning "Agency " also states: We exercise care in the selection of reputable service providers, but we are not ourselves a provider of travel services and have no control over, or liability for, the services provided by third parties.
The terms and conditions include the acknowledgement that the person to whom the services are provided understands and agrees with the "Booking Terms and Conditions and the Privacy Policy".
Against this factual background, the expectations of the respondent, as a reasonable person, must be considered. In Scenic Tours Pty Ltd v Moore (2018) 361 ALR 456; [2018] NSWCA 238, the Court of Appeal of NSW said at [174]: The text of s 60 does not imply and certainly does not compel the conclusion that if there is a contract in place between the supplier and the consumer the obligations imposed on the supplier by the Care Guarantee are co-extensive with the supplier's contractual obligations. Unless there is some contextual reason to construe the Care Guarantee in s 60 of the ACL is applying only to "services" that are co-extensive with the suppliers contractual obligations, there is no basis for doing so. The same can be said for the Purpose and Result Guarantees.
And at paragraph [186], relating to the characterisation of the services which were being supplied by the travel agency to the consumer when the trial judge had determined that the agency was supplying two categories of service, namely Cruise Services and Information Services: The inquiry required for the purpose of characterising the services Scenic supplied to Mr Moore, as has been explained, is not confined to construing the limits of Scenic's obligations under the Terms and Conditions or to ascertaining the services that were actually provided to Mr Moore after the tour commenced. The inquiry is (relevantly) as to the benefits and facilities Scenic was to provide to Mr Moore. This inquiry involves an examination of the dealings between Scenic and Mr Moore to determine what benefits and facilities Mr Moore, as a consumer, could reasonably expect Scenic to provide in return for payment of the charges for a reservation on Cruise 8.
The Booking Terms and Conditions contains the following statement: Service guarantees: Our booking and advisory services come with a guarantee that: they will be provided with due care and skill; they will be reasonably fit for the specified purpose; they can reasonably be expected to achieve the desired result; and they will be provided within a reasonable time.
In the present circumstances, the respondent must be deemed to have been aware, by clicking on the box when making the reservation, that the appellant was only acting as agent of the air carrier; that the appellant as agent was making the travel bookings on behalf of the respondent and was required only to exercise due care in the selection of the airline providing that service; that the appellant was providing a booking and advisory service only; and was not contracting to supply the air transport. The reservations could not, and would not have been made unless the respondent provided the acknowledgement of the terms and conditions of booking, which included the agency provisions.
Further, it is not suggested that the appellant had not fulfilled its contractual obligations to the respondent to exercise all due care in effecting such arrangements. It follows that the services provided by the appellant were not flight services but were limited solely to booking and advisory services. The website of the appellant referred to the Booking Terms and Conditions, which clearly establish that the appellant was acting as the intermediary between the respondent and the air carrier who would provide the actual transport. What the appellant agreed to supply was booking services only and its obligation was to exercise all due care and skill in relation to the supply of those limited services.
The Appeal Panel finds that: 1. the Tribunal, in determining that the appellant was liable for breach of contract in failing to supply services and that the respondent had paid for goods or services which had not been provided, has misconstrued the contract. The contract made by the appellant with the respondent was never for the supply of air transport by the appellant; 2. there has been no breach of the ACL(NSW) as found by the Tribunal Member, since the provision of services which the appellant was to supply was limited to making the reservations in a competent manner. The provisions of sections 60 and 61(1) of the ACL(NSW) were not breached by the appellant.
In the circumstances, the Appeal Panel finds that the appellant's Notice of Appeal raises questions of law for determination, and that the Notice of Appeal identifies errors of law as claimed. It follows that the decision under appeal must be set aside and the appeal upheld.
The Tribunal notes that the appellant advised at the hearing that the monies had been paid to the respondent pursuant to the orders of the Tribunal. The appellant also noted that, in the event the appeal was allowed, they would not be seeking return of the monies from the respondent.

Orders

The Tribunal orders that: 1. The appeal be allowed; 2. The orders of the tribunal made on 9 November 2020 be set aside; 3. Application GEN 20/19479 is dismissed.

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

Amendments 26 February 2021 - typographical error 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: 26 February 2021

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Cited By (11)