Danias v Etihad Airways PJSC

[2015] NSWCATCD 128

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	Danias v Etihad Airways PJSC [2015] NSWCATCD 128
Hearing dates:	4 September 2015
Decision date:	09 October 2015
Jurisdiction:	Consumer and Commercial Division
Before:	P French, General Member
Decision:	1 Within seven (7) days of the date of these orders Etihad Airways PJSC is to pay Michael Danias the sum of $9,726.79, being a refund of the cost of an airline ticket purchased on or about 30 August 2015, less applicable taxes and other charges. 2 Etihad Airways PJSC is to deduct from Michael Danias’ Guest Miles, points equivalent to the cost of the airline ticket referred to in order 1.
Catchwords:	Consumer claim – unconscionable conduct
Legislation Cited:	Consumer Claims Act 1998 Fair Trading Act 1987 Australian Consumer Law Civil and Administrative Tribunal Act 2013
Category:	Principal judgment
Parties:	Michael Danias (applicant) Etihad Airways PJSC (respondent)
File Number(s):	GEN 15/49037
Publication restriction:	Nil

REASONS FOR DECISION

1. This is an application by Michael Danias (the Consumer) for an order from the Tribunal pursuant to section 8(1)(a) of the Consumer Claims Act 1998 (CCA) that will require the Respondent to pay him $9,955.79, being the refund of the purchase price of an airline ticket he was obliged to pay for because the Respondent had placed a block on his Etihad Guest account which prevented him booking the flight using his available Etihad Guest Miles. This application was made to the Tribunal on 25 August 2015.

2. The Respondent did not attend the hearing and no explanation was provided for its absence. Notice of the hearing had been served on the Respondent at its Registered Office in Australia, which is a firm of solicitors. That Notice incorporated the following warning: “it is important that you are on time as the Tribunal may decide the matter in your absence. The decision made will be binding on you.”

3. Mr Danias gave evidence that he had discussed his application to the Tribunal and the hearing date with a representative of the Respondent’s customer relations team during his efforts to resolve the matter directly with the Respondent.

4. Section 36 of the Civil and Administrative Tribunal Act 2013, requires the Tribunal to facilitate the just, quick and cheap resolution of the real issues in dispute in a proceeding. It also requires the Tribunal to facilitate the resolution of the issues between the parties in such a way that the cost to the parties and the Tribunal is proportionate to the importance and complexity of the subject-matter of the proceedings.

5. Although the sum of the Consumer’s claim is not insubstantial, the claim itself is not complex. On the material before the Tribunal, it does not require orders for the exchange of evidence or a special fixture for hearing. It ought to be dealt with to finality at its first listing. The Tribunal therefore determined to hear the Application in the absence of the Respondent.

6. Mr Danias submitted into evidence a series of emails between him and Etihad Guest Services dated 25 and 26 August 2015. He also gave sworn evidence to the following effect. He is a participant in the Respondent’s Etihad Guest Programme, which is a loyalty programme. One benefit of that Programme is the ability of a participant to earn complimentary Guest Miles which are credited for flights booked with the Respondent and its partner airlines. As at 25 August 2015, Mr Danias had accumulated 130,000 Guest Miles in his Etihad Guest account. He wanted to use these Guest Miles to book a flight with the Respondent for 5 October 2015 which had a retail price of $9,955.79. His Guest Miles (or a large component of them) were due to expire on 30 September 2015. Mr Danias attempted to book an available flight using his Guest Miles on the Respondent’s website. However, he was unable to do so because his Etihad Guest account was blocked.

7. Mr Danias told the Tribunal that the block had been placed on his account some months before. He said he did not know why. He told the Tribunal that when he inquired about the block, he had been asked by the Respondent’s customer service officers to provide evidence of family relationships in the form of marriage and birth certificates which he did. He was then told that the block would be removed, and he assumed it had been.

8. Mr Danias told the Tribunal that he contacted the Respondent’s customer relations team immediately when he was unable to process his flight booking on 25 August 2015 to complain and to request the block be removed. He says that he received the email correspondence from the Respondent’s customer relations officers acknowledging his complaint, and advising that they were endeavouring to fix the problem.

9. Mr Danias told the Tribunal that when the matter was not resolved, on or about 30 August 2015, he was obliged to book and pay the retail price for the flight in order to secure a booking.

10. Mr Danias told the Tribunal that as at the date of the hearing the block remains on his Ethiad Guest account. No explanation has been provided to him for this.

11. Mr Danias told the Tribunal that had he been able to book the flight using his Guest Miles he would have been liable to pay $229.00 in taxes and other charges.

12. The Tribunal has jurisdiction to deal with the Consumer’s Application pursuant to section 7 of the Consumer Claims Act 1998 (CCA). The consumer is located in NSW and the flight was supplied to him in this jurisdiction. Additionally or alternatively, the contract or agreement for the supply of the flight was made in this jurisdiction. The claim has been brought within the time period allowed. The Application is a “consumer claim” within the meaning of section 3A of the CCA, in that it is a claim for payment of a specified sum of money that arises from the supply of services to the Consumer by the Respondent. The Consumer’s monetary claim is within the jurisdictional limit conferred by section 14 of the CCA.

13. Section 28 of the Fair Trading Act 1987 makes the Australian Consumer Law (ACL) part of the law of NSW. The ACL is to be applied in the exercise of the Tribunal’s jurisdiction under the CCA.

14. The ACL provides consumers with a number of general protections in consumer transactions, including protection from unconscionable conduct (section 21 of the ACL). The term “unconscionable conduct” is not defined. It is a term of broad import. Its ordinary meaning includes conduct that is not right or reasonable, which is seriously unfair, and which is indefensible.

15. The Respondent has placed no evidence before the Tribunal to explain why it acted in the way it did. The only evidence before the Tribunal is the documentary and sworn oral evidence of the Consumer.

16. On the basis of the Consumer’s evidence, the Tribunal is comfortably satisfied that the Respondent engaged in unconscionable conduct in refusing to permit the Consumer to use his Guest Miles points to book the flight.

17. The Consumer had been loyal to the Respondent and its partners by preferring them over other airlines. The Respondent and its partners had derived a substantial financial benefit from this.

18. As a result of his loyalty to the Respondent and its partners, the Consumer had been allocated complimentary Guest Miles. The ability to obtain and use these points was a significant inducement of the Consumer’s loyalty to the Respondent and its partners.

19. The Consumer had enough Guest Miles to book the flight and there was an available flight. The Consumer’s Guest Miles (or a large component of them) were to shortly lapse.

20. The Respondent has provided the Consumer with no explanation for the block on his account. The Consumer had provided the Respondent with the evidence of family relationships it sought from him. The Respondent’s customer service officer had told the Consumer that the block would be lifted but this did occur.

21. It was seriously unreasonable, seriously unfair, and indefensible, for the Respondent to act in the way it did towards the Consumer. In these circumstances the Consumer is entitled to Orders from the Tribunal that will require the Respondent to refund him the purchase price of the ticket he was obliged to purchase when he was unable to use his Guest Miles. The Respondent is to deduct the Guest Miles value of the ticket from the Consumer’s Guest Miles. The Consumer is to pay the Respondent the taxes and other charges he would have been obliged to pay if he had been able to book the ticket using his Guest Miles, which were in the amount of $229.00.

P French

General Member

Civil and Administrative Tribunal of New South Wales

9 October 2015

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

Decision last updated: 16 December 2015