Snowtime Tours Pty Ltd v Lavecky

The Appeal

1. The appellant lodged the appeal on 20 October 2021. The Notice of Appeal was lodged within the 28-day time period specified in cl 25(4)(b) of the Civil and Administrative Tribunal Rules 2014 (the Rules). Decisions of the Tribunal are internally appealable decisions and an appeal can be made from them as of right where there is a question of law and with the leave of the Appeal Panel on specified grounds: see s 80(1) and (2)(b) of Civil and Administrative Tribunal Act 2013 (NCAT Act).
2. The appellant has appealed on the ground that the appeal raises questions of law and also seeks leave to appeal.
3. On 10 February 2022 the appeal came before a differently constituted appeal panel for final hearing. The appeal hearing was adjourned (part-heard), and the appellant was ordered to provide three copies of the full transcript of the primary hearing on 23 September 2021. That transcript was subsequently provided. Although the order made on 10 February 2022 was that the appeal had been adjourned part-heard, there is nothing to indicate that we cannot hear the appeal as a differently constituted appeal panel and nor was this raised as an issue by the parties to the appeal.
4. The appellant is self-represented. In those circumstances and in accordance with established Appeal Panel practice, we will follow the principles set out in in John Prendergast & Vanessa Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [12]: 'In circumstances where the appellants are not legally represented, it is apposite for the Tribunal to approach the issue by looking at the grounds of appeal generally. It is necessary for the Appeal Panel to determine whether a question of law has in fact been raised, subject to any procedural fairness considerations that might arise to the respondent.'
5. The appellant sets out seven errors which the appellant alleges the Tribunal made and raises as questions of law. The appellant also seeks leave to appeal. We will begin by dealing with the grounds raised in relation to whether the contract was frustrated.

Was the contract frustrated?

1. The appellant submits that the Tribunal erred in finding that the contract was frustrated because the contract could be performed by the appellant as Thredbo remained open for business and could still provide accommodation. The appellant submits that there was nothing in the contract, which was affected by any events, and even if it was, it would have been reasonably foreseeable for the respondent.
2. Whether a wrong principle of law had been applied can constitute a question of law: see Chapman v Taylor [2004] NSWCA 456 at [33], per Hodgson JA (Beazley and Tobias JJA agreeing).
3. In the reasons for the decision the Tribunal found: The imposition of government restrictions is accepted as an event that frustrated the contract as the uncertainty they cause was not the fault of either party. While the accommodation may have been available, the applicant was prevented by government rules from attending. The applicant paid money to the respondent for services that were not provided due to the frustrating event (the government restrictions). Section 12 of the FCA applies in the circumstances, the effect of which requires the money paid by the applicant to the respondent to be repaid to the applicant. Although the respondent referred to third party costs associated with the booking, it did not provide any evidence or make any specific submission on matters related to suffering loss or detriment as could be taken into account for the purposes of an adjustment according to s13 of the FCA.
4. Section 12 of the FCA provides: Where a contract is frustrated and a party to the contract has paid money to another person (whether or not a party to the contract) as, or as part of, an agreed return for performance of the contract by another party (whether or not that other party is the person to whom the payment was made and whether or not there has been any such performance) that other party shall pay the same amount of money to the party who made the payment.
5. Section 13 of the FCA provides: (1) Where a contract is frustrated and, by reasonably paying money, doing work or doing or suffering any other act or thing for the purpose of giving performance under the contract (not being performance which has been received) the performing party has suffered a detriment, the performing party shall be paid by the other party to the contract an amount equal to one-half of the amount that would be fair compensation for the detriment suffered. (2) Where a performing party referred to in subsection (1) has, as a consequence of doing or suffering the acts or things that caused that party to suffer the detriment so referred to, acquired or derived any property or improvement to property, the performing party shall pay to the other party so referred to one-half of the value of the property or improvement so acquired or derived.
6. In Codelfa Construction Pty. Ltd. v. State Rail Authority of N.S.W. (1982) 149 CLR 337 the High Court generally accepted the test put forward by Lord Radcliffe in Davis Contractors Ltd v Fareham Urban District Council [1956] UKHL 3 (1956) AC 696, when determining whether a frustration event has occurred. Mason J (with whom Stephen J agreed) relevantly stated at [39] - [40]. 39. In Brisbane City Council v. Group Projects Pty. Ltd. (1979) 145 CLR 143, at pp 159-163 , Stephen J. discussed the authorities. The more recent authorities, National Carriers Ltd. v. Panalpina (Northern) Ltd. (1981) AC 675 and Pioneer Shipping v. B.T.P. Tioxide (1982) AC 724 , do not call for any revision of that discussion. I agree with Stephen J.'s acceptance of the approach adopted by Lord Reid and Lord Radcliffe in Davis Contractors. Lord Reid said that the task of the court is to determine "on the true construction of the terms which are in the contract read in light of the nature of the contract and of the relevant surrounding circumstances", "whether the contract which they did make is . . . wide enough to apply to the new situation: if it is not, then it is at an end" (1956) AC, at pp 720-721. Later he described frustration as "the termination of the contract by operation of law on the emergence of a fundamentally different situation" (1956) AC, at p 723 . (at p357) 40. Lord Radcliffe (1956) AC, at p 729 said: ". . . frustration occurs whenever the law recognizes that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract. . . . It was not this that I promised to do." His Lordship, noting that special importance attaches to an unexpected event, observed "There must be as well such a change in the significance of the obligation that the thing undertaken would, if performed, be a different thing from that contracted for". (at p357)
7. That position is also adopted by Aiken J: see [26]- [27]
8. In summary, frustration will be satisfied 1. if the frustration event causes the contractual obligation owed by either party under the contract to become impossible or radically different from the obligation contemplated at the time that the parties entered the contract. 2. The frustration event was not the fault of either party; and 3. The contract does not deal with what will happen on the occurrence of the alleged frustration event.
9. The appellant submits that the Tribunal erred in not finding that the government lockdowns were foreseeable. However, that is not the relevant test. The test is whether the contract became impossible or radically different because of the intervening event, in this case, being the lockdowns in Sydney which resulted in the respondent not being able to travel to Thredbo. Lord Radcliffe in Davis refers to an event as having to be 'unexpected', but he does not refer to the event as having to be foreseeable. While the COVID-19 pandemic had been in existence for some time when the respondent booked the accommodation in March 2021, there is nothing to suggest that the lockdowns which subsequently occurred in Sydney from June 2021 were expected and indeed it is difficult to see why someone would book the accommodation if they did expect the lockdowns.
10. In a similar fact scenario in Gem Ezy Flights Pty Ltd v Gribble [2021] NSWCATAP 76, the Appeal Panel dealt with a matter in which the appellant carried on business in Sydney as a travel agent. Between November 2019 and late January 2020, the respondent had paid the appellant $5,665 for her daughter, a student at a school in Sydney, to undertake a school trip to overseas in April 2020. The COVID-19 pandemic intervened and brought with it restrictions on overseas travel. The school decided not to go ahead with the trip, which did not proceed. The Tribunal in the primary proceedings had found that the contract was frustrated by reason of the government interventions directed at restricting travel made in response to the COVID-19 pandemic.
11. In that case the Appeal Panel agreed with the Tribunal that the contract was frustrated and at [18] stated: The Appeal Panel agrees with the Tribunal's finding that the Contract was frustrated. There was no evidence before the Appeal Panel as to the terms, nature or effect of the action of the Department of Education which, the Appellant submitted, was the occurrence which resulted in the cancellation of the trip. However, the Appeal Panel is in any event satisfied that the effect of the Biosecurity (Human Biosecurity Emergency) (Human Coronavirus with Pandemic Potential) (Overseas Travel Ban Emergency Requirements) Determination 2020 (Cth) was to frustrate the Contract. Section 5 of this order banned, with effect from midnight on 25 March 2020, the exit from Australian territory of persons as passengers on aircraft or vessels, subject to a limited range of exemptions set out in sections 6 and 7. None of the specific exemptions set out in section 6 can reasonably be read as applying to the Respondent's daughter's participation in a school trip to France and Italy, and that purpose itself does not appear to provide the "compelling reason for needing to leave Australian territory" which is required in order to enliven the Australian Border Force Commissioner's authority to issue a personal exemption to the Respondent's daughter. That is to say, even if she and her schoolmates had presented themselves at the relevant airline check-in desk at Sydney Airport after that date for their flight (assuming such a facility was in fact operating on that day), with their luggage packed and their passports in hand, they would not have been allowed to exit the country without an exemption which was unobtainable. The Contract was thus clearly frustrated.
12. There is no dispute raised that the respondent in these proceedings lived in Sydney at the relevant time that the accommodation was booked for. At the point in the transcript marked starting at 43.15 the Tribunal Member questioned the respondent about how the lockdown restrictions applied to him and at 44.10 the respondent stated: COVID restriction were throughout the time and starting beforehand, because our booking was made for the second weeks of the school holidays … um, and the, ah, NSW Government had put restrictions on all of Sydney as full lockdown, unable to leave your LGA during the whole school holidays. So the two coincided with each other.
13. At the appeal hearing the appellant submitted that people from Sydney had travelled to Thredbo for the accommodation. However, there was nothing put before the Tribunal in the primary proceedings (or before us) which challenged that the restrictions prevented the applicant from leaving Sydney travelling to Thredbo. Indeed, it can be inferred from the transcript overall that the primary proceedings had been run on the underlying premise that a government order was in place at the relevant time which prevented travel by those living in Sydney, due to the COVID-19 pandemic and that premise was not challenged.
14. The fact that a person may have been able to travel by car, in breach of government orders, from Sydney to Thredbo was of no relevance to the issue for determination. Accepting that the respondent, who resided in Sydney, was subject to restrictions that prevented him from travelling from Sydney to Thredbo, we agree with the Tribunal, that the contract was frustrated. The test as set out in Davis above establishes that frustration occurs when 'without default of either party a contractual obligation has become incapable of being performed". That the appellant could still provide the service is not relevant, because it is the unexpected event of the government lockdown which frustrated the contract.
15. Moreover, there was nothing in the contract which dealt with cancellation due to the COVID-19 pandemic or government restrictions or which demonstrated that the parties had contracted out of the FCA. As raised above, the appellant had relied on a term in the contract which was described as the "No-show policy".
16. The "No-show policy" relevantly provided: No-show policy - If the guest doesn't show up they will be charged the total price for the reservation.
17. That clause does not deal with or have any relevance as to the contractual consequence of an unexpected government lockdown or restrictions.
18. Section 6(1)(e) of the FCA relevantly provides that the FCA: (e) does not apply to any other contract in so far as the parties thereto have agreed that this Act does not apply to the contract.
19. In Gem Ezy Flights Pty Ltd the appeal panel also addressed a clause which purported to exclude the FCA and made the following relevant statements at [23] … The Appellant suggested that clause 5 of the Contract had the effect of excluding the application of the FC Act to the Contract, since the provisions of clause 5, in particular to the extent that they provided for a different allocation of risk as between the Appellant and the Respondent in relation to the consequences of governmental acts, amounted to an agreement that the FC Act was not to apply to the Contract. The Appeal Panel rejects this argument. It does so because clause 5 is an exclusion clause, to which the contra proferentem rule must be applied in accordance with normal principles of contractual interpretation. This means that in the absence of a contractual provision which clearly and unambiguously excludes the FC Act from applying to the Contract, such a proposition advanced on behalf of the Appellant cannot be accepted.
20. Similarly, in this case, there is nothing contained in the 'No-show policy" clause which excludes the FCA.
21. There was nothing put before the Tribunal at the primary hearing which relates to a term in the contract that deals with what will happen on the occurrence of the alleged frustration event.

Leave to Appeal

1. The appellant sought to rely on new evidence in the appeal that had not been provided in the primary hearing. That evidence comprised of further terms which the appellant submits are applicable to the contract between the parties. That evidence includes a covering letter from Booking.com which was the booking website that was used by the respondent to book the accommodation. The letter is dated 9 November 2021, some 2 months after the hearing. The letter begins by noting that it is a response to enquiries from the appellant for his legal case. The letter also notes that Booking.com has had a clear Covid policy since 13 April 2020 and that it is not possible to book a property on Booking.com without the COVID policy yellow banner and yellow box being visible.
2. In relation to appeals from the Consumer and Commercial Division leave can only be granted in the limited circumstances set out in Schedule 4, cl 12 of the NCAT Act.Relevantly the clause provides : (1) An Appeal Panel may grant leave under section 80 (2) (b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: …. (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
3. In Owen v Kim [2017] NSWCATAP 26, at [37] - [39] the appeal panel helpfully summarised principles from other appeal panel cases in relation to cl 12(1)(c) of Schedule 4 to the NCAT Act as follows: In Owners - SP 76269 v Draybi Bros Pty Ltd [2014] NSWCATAP 29 the Appeal Panel stated at [109] in connection cl 12(1)(c) of Schedule 4 to the Civil and Administrative Tribunal Act: In order to fall within this paragraph the appellant must be able to point to evidence which: (1) is significant; and (2) has arisen and is new in the sense that it was not reasonably available at the time the proceedings below were being heard. In Leisure Brothers Pty Ltd v Smith [2017] NSWCATAP 11 the Appeal Panel stated at [40 ]: The meaning of this clause was considered by the Appeal Panel in Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111. At [23] - [24] the Appeal Panel said: 23 Unlike the WIM Act, the expression "reasonably available" is not qualified by the words "to the party". This difference suggests that the test of whether evidence is reasonably available is not to be considered by reference to any subjective explanation from the party seeking leave but, rather, by applying an objective test and considering whether the evidence in question was unavailable because no person could have reasonably obtained the evidence. For example, in Owners SP 76269 v Draybi Bros [2014] NSWCATAP 20 at [114] the Appeal Panel refused leave because, although the appellant may not have been aware of the evidence (being an email), it could have obtained the evidence by summons. In Prestige Auto Centre Pty Ltd v Apurva Mishra [2014] NSWCATAP 81 at [17] the Appeal Panel granted leave because the respondent to the appeal had fraudulently altered evidence. The party seeking leave under cl 12(1)(c) could not reasonably have had available to them the evidence that the report in question had been fraudulently altered at the time the proceedings were being dealt with by the Tribunal. That fact was not known to the appellant at the time of the hearing and could not reasonably be known due to fraud. 24 Each of these cases illustrates that something more than a party's incapacity to procure evidence is necessary to satisfy the requirements of cl 12(1)(c).' As stated at [27] in Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown: the issue is whether, objectively, the evidence has arisen since the hearing and was "not reasonably available" at the time of the hearing.
4. The appellant submits that the reason that the evidence was not reasonably available to him at the time of hearing was that he had tried to make multiple enquiries with Booking.com and had faced difficulties contacting them or getting a response. He also submits that the respondent's cause of action in the primary proceedings had been very limited.
5. The respondent's application had always been for the refund of the monies on the basis that he had been prevented from attending the accommodation due to government lockdowns. It would have always been obvious that any conditions relating to the appellant being able to retain monies would have been relevant to the proceedings.
6. Further, the appellant provided no specific details of when enquiries with Booking.com were made and has not provided details or copies of the request that is referred to in the response from Booking.com dated 9 November 2021. There is nothing contained in the transcript which would indicate that the appellant sought an adjournment to follow up any request. Moreover, the conditions and terms which the appellant has now provided, would have been available on the website for the appellant to access. The appellant would have been capable of procuring the evidence prior to the primary hearing and, on the evidence, was reasonably available at the time of the hearing. On that basis we would not grant leave to appeal.
7. Even if we are wrong in that regard, and the evidence was reasonably available to the appellant at the time of the initial hearing, we would not be satisfied on the evidence before us that we should grant leave. The appellant has not suffered a substantial miscarriage of justice. The meaning of "substantial miscarriage of justice" was summarised by the Appeal Panel in Collins v Urban [2014] NSWCATAP 17 at [71] and [79]: [71]. . . [I]t can be seen that the concept of a substantial miscarriage of justice refers to a failure in the way a matter was conducted or decided which deprived the appellant of a chance that was fairly open of achieving a better outcome than occurred. . . . [79] In order to show that a party has been deprived of a "significant possibility" or a "chance which was fairly open" of achieving a different and more favourable result because of one of the circumstances referred to in cl 12(1)(a), (b) or (c), it will be generally be necessary for the party to explain what its case would have been and show that it was fairly arguable. If the party fails to do this, even if there has been a denial of procedural fairness, the Appeal Panel may conclude that it is not satisfied that any substantial miscarriage of justice may have occurred - ."
8. Attached to the 9 November letter from Booking.com are screen shots which demonstrate a yellow banner which appears on the Booking.com website. Booking.com states on the letter that those banners would have been visible on the website at the time when the respondent made the accommodation booking. The banners provide the following information: i. Coronavirus (COVID-19) Support Get the travel advice you need. Read more about possible travel restrictions before you go. Read more (hyperlinked)
9. Clicking on the "Read more" hyperlink brings up a pop-up box which has the following statement: Please check your booking conditions For bookings made on or after 6 April 2020, we advise you to consider the risk of Coronavirus (COVID-19) and associated government measures. If you don't book a flexible rate, you may not be entitled to a refund. Your cancellation request will be handled by the property based on your chosen policy and mandatory consumer law, where applicable. During times of uncertainty, we recommend booking an option with free cancellation. If your plans change, you can cancel free of charge until free cancellation expires.
10. The appellant has also included the Booking.com terms "Full COVID Policy" which includes the same statement regarding booking conditions. The information contained in the banners, pop up box and policy is nothing more than warnings to consumers to check their booking conditions because they may not be entitled to a refund. It is clear from the warning that cancellation requests will be handled by the property based on the consumers chosen policy. Even if that evidence had been provided at the hearing, it would not have made a difference to the outcome because the relevant terms are those that were provided by the appellant's policy.
11. For all those reasons we would not grant leave for the appellant to appeal on the basis of the new evidence.

Onerous Term

1. It is unnecessary for us to consider the remaining alleged errors raised by the appellant. Given we have determined that the Tribunal was correct in finding that the contract was frustrated, we would not grant leave to appeal as there would be no substantial miscarriage of justice to the appellant.
2. However, for completeness, we shall deal briefly with another ground raised by the appellant. The appellant raised as a ground of appeal that the Tribunal denied the appellant procedural fairness by not raising that it would consider that the no show policy was an onerous term
3. A failure to afford procedural fairness may raise a question of law: Italiano v Carbone (2005) NSWCA 177; Clements v Independent Indigenous Advisory Committee [2003] FCAFC 143; (2003) 131 FCR 28 at [8].
4. Section 38 (2) of the NCAT Act provides that the Tribunal is not bound by the rules of evidence. However, the Tribunal remains subject to the rules of natural justice. Paragraph 38(5)(c) provides that the Tribunal must take such measures as are reasonably practicable "to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceeding". Accordingly, if we find a failure to afford procedural fairness leave to appeal would not be required in relation to this error.
5. In the reasons for decision the Tribunal stated the following: In Balmain New Ferry Co Ltd v Robertson (1906) 4 CLR 379 it was found that a party relying on a contractual term must show that it did all that was necessary to bring the term to the attention of the other party. Sufficient notice must be given by a party relying on an onerous term to the other party according to the judgment in Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] QB 433. What that law means in this case is that the respondent must have given sufficient notice of the term and did all things necessary to bring the No-show term to the applicant's attention at the time of the contract was made.
6. As raised above, the appellant had relied on a term in the contract which was described as the "No-show policy". Submissions were made in relation to the clause in the context of the appellant's reliance on the clause for retaining the monies. However, the characterisation of the clause as onerous and that consequently notice needed to be given in relation to an onerous clause, was not raised with the parties and it was not raised as a cause of action by the respondent in the primary proceedings.
7. That parties were not provided with the opportunity to provide evidence or make submissions as to whether the term was onerous or whether it should have or was brought to the attention of the respondent. On that basis, the appellant was denied procedural fairness. However, given that we have found that the Tribunal was correct in its finding on frustration, this ground is inconsequential, and the appeal cannot succeed.

Costs

1. The respondent foreshadowed that it would be seeking its costs if the appeal was successful. Section 60 of the NCAT Act provides that each party to proceedings in the Tribunal are to pay their own costs and that the Tribunal may award costs in relation to proceedings if it is satisfied that there are special circumstances warranting an award of costs. Rule 38(2)(b) of the Rules provides that, despite the provisions in s 60 of the NCAT Act (requiring there to be special circumstances before a costs order can be made), the Tribunal may award costs in the absence of special circumstances where what is claimed or in dispute in proceedings before the Consumer and Commercial Division exceeds $30,000. This amount in dispute in the primary proceedings were below $30,000. Rule 38A provides that on an appeal from that Division, the same cost provisions apply as in the Tribunal below. We have therefore made provision for the exchange of further submissions in the relation to the respondent's cost application. Parties must address the factors set out in s60 (3) of the NCAT Act.

Orders

1. Accordingly, we make the following orders: 1. Leave to appeal is refused. 2. The appeal is dismissed. 3. If the respondent seeks to press the costs of this appeal: 1. The respondent must provide to the appeal panel and the appellant any written submissions and documents, which he intends to rely on in relation to the costs application within 7 days after these orders. 2. The appellant is to provide to the appeal panel and the respondent any written submissions and documents, which the appellant intends to rely on in relation to the costs application within 14 days from the date of these orders. 3. The respondent is provide to the appeal panel and the appellant any further any written submissions and documents, which the appellant intends to rely on in reply within 21 days from the date of these orders. 4. Submissions must include submissions concerning whether an order should be made under s 50(2) of the Civil and Administrative Tribunal Act, 2013 dispensing with a hearing.

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: 06 July 2022