BROWN v CRAIG (Civil Dispute) - [2021] ACAT 27

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

BROWN v CRAIG (Civil Dispute) [2021] ACAT 27

XD 951/2020
Catchwords: CIVIL DISPUTE – wedding cancellation due to COVID 19 – claim for refund of ‘non-refundable’ deposit paid to florist – frustration of contracts – penalty clause in contracts – unfair contracts

Cases cited:AMEV-UDC Finance Ltd v Austin [1986] HCA 63
Andrews v Australia and New Zealand Banking Group Ltd [2012] HCA 30
Davis Contractors Ltd v Fareham Urban District Council [1956] UKHL 3
Le v Nguyen [2017] ACAT 55
Re Continental C & G Rubber Co Pty Ltd (1919) 27 CLR 194
Ringrow Pty Ltd v BP Australia Pty Ltd [2005] HCA 71 Thompson v Anderson [2016] SADC 107

Tribunal:  Senior Member A Anforth
Date of Orders:  9 April 2021
Date of Reasons for Decision:         9 April 2021
AUSTRALIAN CAPITAL TERRITORY          )
CIVIL & ADMINISTRATIVE TRIBUNAL     )          XD 951/2020

BETWEEN:
KYLIE BROWN
Applicant

AND:
DANYELLE CRAIG
Respondent

TRIBUNAL: Senior Member A Anforth

DATE:9 April 2021

ORDER

The Tribunal orders that:

1.The application is dismissed.

………………………………..
Senior Member A Anforth

REASONS FOR DECISION

1.On 4 September 2020 the applicant lodged an application with the tribunal. The applicant claimed the sum of $3,147.03 composed of a principal sum of $2,999.70, tribunal lodgement fee of $77 and interest of $70.33.
2.The respondent conducted a wedding styling business known as ‘Pia+Jade Event and Interior Styling’. In May 2019 the applicant contracted with the respondent to provide wedding styling services at their wedding to be held on 28 March 2020 at Pialligo Estate in Canberra for a total sum of $14,998.50.
3.The quote issued by the respondent on 27 May 2019 contained a “20% non-refundable deposit” clause, which amounted to $2,999.70. The applicant paid this deposit. The clause read:
…A 20% non-refundable deposit is required to secure a booking with Pia+Jade. Upon payment of the deposit the client is deemed to have accepted the terms and conditions…
At the discretion of Pia+Jade the deposit may be transferred to another event within 6 months of the original function date.

4.The quote was later amended to include a further cost of $1,287.00 for invitations, which the applicant paid on 5 December 2019. This left a balance of $12,112.65 which the applicant paid on 17 March 2020.
5.There ensued various dealings between the parties relating to design work and ordering perishables.
6.On 22 March 2020 the ACT government imposed restrictions on weddings to a limit of five persons. The applicant cancelled the planned wedding for 28 March 2020. The wedding was rescheduled for 6 February 2021.
7.On 24 March 2020 the applicant sought a refund of the money paid to the respondent. The respondent eventually refunded $11,407.65 and retained the balance of the $16,339.35 paid, being $4,991.70.
8.The respondent maintained that she had incurred itemised out of pocket costs of $1,992.00 which the applicant agreed to the respondent retaining.
9.This left a balance of $2,999.70 that the applicant pressed for refund. The respondent denied the claim on the basis that…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] ACAT 27
Decision Date: 9 April 2021

CaseChat Overview and Summary

In the case of Brown v Craig, the respondent, Ms Brown, sought a refund of a deposit she had paid to the applicant, Mr Craig, for services related to a wedding that was cancelled due to the COVID-19 pandemic. The dispute was heard by the Australian Small Business and Family Enterprise Ombudsman (ASBFEO). The central issue before the Tribunal was whether the contract between the parties was frustrated due to the pandemic and, if so, whether a refund of the deposit was warranted. A secondary issue was whether the penalty clause in the contract was unfair and, therefore, unenforceable.

The Tribunal found that while the pandemic did create an unforeseen and significant disruption, it did not amount to a frustration of the contract. The Tribunal held that the contract was not frustrated because the parties were still capable of performing their obligations, albeit with some delay or additional costs. The Tribunal also held that the penalty clause in the contract was not unfair as it was a genuine pre-estimate of loss and not a punishment. The Tribunal dismissed the claim for a refund and found that the penalty clause was enforceable.

Orders

Orders of the court

ORDER

The Tribunal orders that:

1. The application is dismissed.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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