Hill v Bamawm Extension Pony Club Inc (Civil Claims) [2009] VCAT 37 (19 January 2009)

Jurisdiction - "services" - "in trade or commerce " - horse riding club provided services to three children - no jurisdiction - Fair Trading Act 1999 s3_,_ s107_, s159 - Victorian Civil and Administrative Tribunal Act 1998 s71._

Hill v Bamawm Extension Pony Club Inc (Civil Claims) [2009] VCAT 37

1. I confirm the principal registrar's rejection of the application in this proceeding, under section 71(5) of the Victorian Civil and Administrative Tribunal Act 1998.

1. This proceeding is about a dispute between the McKay family and the Bamawm Extension Pony Club Inc (the Club).
2. On 12 August 2008, VCAT received an application under the Fair Trading Act 1999 (the FTA). It was in the name of Mr Hill as "guardian" for three children of the McKay family[1].
3. The children were members of the Club. The Club provided services to them, being training and basic horse handling skills, rider training, training in dressage and use of club facilities. The Club terminated the children's membership, because of a dispute. Mr Hill sought their reinstatement as members.
4. On 1 September 2008, the principal registrar of VCAT rejected the application under section 71(1) of the Victorian Civil and Administrative Tribunal Act 1998 (the VCAT Act). In his opinion, the dispute did not arise from the supply of goods and services in trade or commerce.
5. On 22 September 2008, Mr Hill sought a review of that rejection under section 71(2) of the VCAT Act. In line with its usual practice, VCAT only notified the applicant of the appeal hearing.
6. On 30 October 2008, I heard the application for review. Mr Hill, the McKay children and their mother attended. Mr Hill said that he had a law degree, but was not a practicing lawyer.
7. I discussed with Mr Hill that a central issue in deciding the matter was whether the Club provided services in trade or commerce. Mr Hill did not have all the relevant material at the hearing. With his agreement, I ordered him to make a written submission with relevant material. My orders noted the Club was not required to make a submission. If Mr Hill was able to persuade me that the serves were provided in trade or commerce, I would give the Club an opportunity to put its view. The merits of the dispute between the McKay family and the Club were not in issue at the hearing.
8. On 19 November 2008, a representative of the Club wrote to VCAT saying the Herald Sun had published an article about the dispute, based on what was said at the hearing. On 19 December 2008, VCAT replied saying the club had not been invited to the hearing as it was a jurisdiction hearing. VCAT invited the Club to make a written submission. At the time, I was not aware of the letter or the reply. I have not read the article.

1. The facts which I set out below are taken from:
   1. material filed by Mr Hill (membership forms, code of conduct, Handbook of By-Laws of the Pony Club Association of Victoria Inc and an Incorporated Associations Extract concerning the Club published by Consumer Affairs Victoria); and
   2. the website of the Pony Club Association of Victoria (www.ponyclub.vic.org).
2. The Club is incorporated under the Associations Incorporation Act 1987 (the AIA Act). It operates under the umbrella of the Pony Club Association of Victoria (the PCAV), which is also incorporated under the AIA Act.
3. The objects of the PCAV are:

• To coordinate Clubs affiliated with the Association and to act in affiliation with the Australian Pony Club Council (APCC), the Equestrian Federation of Australia (EFA), and the Youth Council of Victoria.

• To encourage young people to ride and to learn to enjoy all approved kinds of sport connected with horses and riding.

• To provide instruction in horsemanship and to instil in members the proper care of their animals, and through this medium to promote the highest ideals of sportsmanship, citizenship, and loyalty, and to cultivate strength of character and self discipline in the members of the Clubs.

• To establish Zones for close contact and liaison between the Clubs.

1. Assuming the Club uses the model rules provided by the PACV, its aims and objectives are:
   • To encourage young people to ride and to learn to enjoy all approved types of sport connected with horse riding.
   • To provide instruction in horsemanship and riding and to instil in the members the proper care of their animals.
   • To promote the highest ideals of sportsmanship, citizenship and loyalty, thereby cultivating strength of character and self-discipline
2. Section 51(1) of the AIA Act provides that an incorporated association shall not trade. Section 51(4)(a) provides that the prohibition against trading does not apply to an incorporated association the predominant purpose of which is charitable, the rules requiring any distribution of its assets, in the event of its winding-up or dissolution for a charitable purpose and the rules contain a provision authorizing trading.
3. Assuming the Club uses the model rules provided by the PA Assuming the Club uses the model rules provided by the PACV, the model rules do not contain a provision authorizing trading.

1. Part 9 of the FTA empowers VCAT to hear and determine a "consumer and trader dispute", which in section 107 is defined (so far as is relevant to the present case) as a dispute or claim arising between a purchaser of goods or services and a supplier of goods or services in relation to a supply of goods or services.
2. Section 3 of the FTA defines "services" to include benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce.
3. In David v Vodafone Pty Ltd [2006] VCAT 289, Senior Member Vassie[2] discussed the way in which courts have construed the phrase "in trade or commerce" in the definition of "services" in section 3. He said,
   1. The High Court in Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; (1990) 169 CLR 594 had to consider whether conduct complained of as having been misleading or deceptive in contravention of section 52 of the Trade Practices Act 1974 (Commonwealth) - the counterpart of section 9 of the Fair Trading Act - had occurred "in trade or commerce ". Four justices of the Court stated (at p.604) that the section was concerned with conduct "in the course of....activities or transactions which, of their nature, bear a trading or commercial character". Only conduct of that kind was conduct which took place "in trade or commerce ".
   2. The definition of "services" in section 3 of the Fair Trading Act, which has importance for the operation of Part 9, does not focus upon conduct "in trade or commerce". It focuses instead on the provision, granting or conferring, "in trade or commerce ", of rights, benefits, privileges or facilities. In Sigma Constructions (Vic) Pty Ltd v Maryvell Investments Pty Ltd , the Court of Appeal in Victoria considered whether the granting of a licence in respect of real property constituted "services" as defined in the Fair Trading Act so that a dispute about the licence agreement was a "consumer and trader dispute" which the Tribunal had jurisdiction under part 9 to determine. Batt JA, with whose judgment the other members of the Court agreed, said that the above statement by the High Court "may be taken as a safe guide" and went on to say (at para [22]):

The provision, etc, of rights, etc, must be "in the course of ...activities or transactions which, of their nature, bear a trading or commercial character..."".

1. In Habashy v Relpar Australia Pty Ltd trading as Wheelchairs Victoria (Civil Claims) [2006] VCAT 1912, Senior Member Vassie quoted the above passage and continued,
   1. In my opinion the Court of Appeal's approach assumes (although it does not expressly confirm) the correctness of the proposition ... that in reality the definition of "services" is an exhaustive definition and the words of limitation, "in trade or commerce ", limit the entire scope of the definition, so that unless something is done "in trade or commerce " it does not amount to "services".
2. I agree with his view.
3. VCAT also has jurisdiction under section 159 of the FTA to hear applications for damages for breach of a provision of the Act. All the breach provisions concern conduct occurring in trade or commerce.

Were the services provided in trade or commerce?

1. The Club clearly provided services to the McKay children being training and basic horse handling skills, rider training and training in dressage and use of club facilities. The issue is did it provide them in trade or commerce?
2. In his written submission, Mr Hill referred to the decision of the Federal Court of Australia in News Limited v The Australian Football League Ltd [1996] FCA 870; 1996 64 FCR 410. The Court found the Australian Football League engaged in trade or commerce. Therefore, I should find the Club also engaged in trade or commerce. Mr Hill submitted there were similarities between the league and the Club. They both charge entry fees to events, seek and receive sponsorship, rent grounds and charge membership fees. He noted the League operates with a view to profit while the Club does not.
3. In my opinion, there is no evidence before me to indicate the Club provided services to the children in trade or commerce. To the contrary, what evidence there is indicates the club provided services for altruistic purposes in accord with its aims and objectives.
4. In my opinion, the finding of the Federal Court that Australian Football League engaged in trade or commerce is not relevant to the Club's activities. The Club is a world away from the League's arrangements which led the Court to conclude,

Plainly, the League and ARL and the clubs were concerned to strengthen the national competition, so as to enhance its revenue earning potential. This reinforces the essential trading and commercial character of the national competition. It also reinforces the point that the actions of the League and ARL and the clubs in organising and participating in the national competition from year to year were commercial in character. [3]

1. Therefore, I decided VCAT does not have jurisdiction to hear the application, as the services were not provided in trade or commerce. I confirmed the principal registrar's rejection of the application under section 71(5) of the VCAT Act.

[1] If this proceeding had continued, the issue of who is the appropriate applicant would have to be addressed. Given the application is rejected, I have not done so.