Fry v Whitehead

[2012] QCATA 169

CITATION: Fry and Ors v Whitehead and Ors [2012] QCATA 169

PARTIES:	Charles Edwin Fry Michelle Julie Maher Strategic Mining Pty Ltd (Applicants/Appellants)
v
Paul Eric Whitehead Karen Anne Whitehead Qualify Now Pty Ltd (Respondents)

APPLICATION NUMBER: APL344-11

MATTER TYPE: Appeals

HEARING DATE: On the papers

HEARD AT: Brisbane

DECISION OF: Mr John Jerrard QC, Member

DELIVERED ON: 30 August 2012

DELIVERED AT: Brisbane

ORDERS MADE:

1.    The applications for leave to appeal and appeal are allowed.

2.    The orders made on 15 April 2011 are amended to read: Strategic Mining Pty Limited pay to Karen Whitehead and Paul Whitehead the sum of $9,684.52, within two (2) months of the date of this order.

CATCHWORDS:

APPEAL – LEAVE TO APPEAL – MINOR CIVIL DISPUTE – Whether error of fact in judgement amount – Whether error of law in giving judgement against human instead of incorporated appellant – Whether sufficient evidence to show human appellants representing incorporated appellant – leave to appeal granted – appeal allowed – judgment order amended

Queensland Civil and Administrative Tribunal Act2009, s 32

APPEARANCES and REPRESENTATION (if any):

This matter was heard and determined on the papers pursuant to s 32 of Queensland Civil and Administrative Tribunal Act2009 (QCAT Act).

REASONS FOR DECISION

1. This matter is an appeal, and an application for leave to appeal, purportedly in respect of a decision given in two matters, 2871/2010 and 3533/2010.  A file note, dated 21 September 2011, records that the appellants are appealing only in case 2871/10, not in 3533/10.  Accordingly these reasons deal only with appeal number 2781/10.  The application for leave to appeal, and to appeal, was lodged on 16 September 2011, from a decision given on 26 June 2011, but received by the applicants on 19 August 2011.  The application for leave to appeal asserts an error of fact in the judgment, in that a wrong amount was found to be owing by the appellants to the respondents, and an error of law, in that the judgment was given against the human appellants, who contend it ought to have been given only against the incorporated appellant.  The point of law identified in the appeal is whether the Adjudicator (“the first Adjudicator”) who gave the decision on 26 July 2011, correctly identified the parties to an agreement made in late 2007-early 2008.  The appellants Charles Fry and Michelle Maher had met in December 2007 with the respondents Karen Whitehead and Paul Whitehead, at Main Beach in Queensland.  The Adjudicator found, and it is not disputed, that the purpose of the meeting was the establishment of a registered training organisation in New South Wales, specifically in the coal mining and coal operation areas, and subsequently in January 2008 a further meeting took place at Southport, Queensland, between Charles Fry, Karen Whitehead and Paul Whitehead.  A fee of $30,000 for the establishment of a registered training organisation was agreed between the parties (whoever they were).  The Registered Training Organisation (RTO) was to be registered with the Vocational Education and Training Accreditation Board (VETAB), in New South Wales.  It was also agreed that the RTO be named Strategic Corporate Training Pty Ltd, and when an online application was submitted to VETAB in March 2008, Paul Whitehead was the CEO of that entity and Charles Fry was a director. 

1. As I understand, the statements made by the respondent Karen Whitehead to the first Adjudicator, at a hearing in application 2781/10, on 28 October 2010, a company Qualify Now Pty Ltd was the sole shareholder in a company Australian College of Training and Employment Pty Ltd, which latter company conducted the business of the Australian College of Training and Employment, a registered training organisation.  The Whiteheads sold that business in 2007, and Paul Whitehead continued to be employed by that company.  The new owners conducting the Australian College of Training and Employment did not “want” (presumably the shares in) Qualify Now Pty Ltd, and so after the sale of the RTO trading as Australian College of Trading and Employment (ACTE), Qualify Now Pty Ltd was simply a shelf company, the shares in which were owned by the Whiteheads.

1. Karen Whitehead further informed the first Adjudicator on 28 October 2010 that “Charlie” was delivering mining courses “to us” when “we” owned “it” as an RTO, and “that when we sold it he fell out with ACTE and that’s when he asked us could we help him get his own RTO … new owners, he didn’t want to work with them.  Paul was still employed by ACTE and we agreed with the new owners of ACTE that we would do this for Charlie and help them and they didn’t care if they lost him as a partner because he was a problem for them so it was a mutual thing.”

1. Those statements suggested to me that Mrs Whitehead did not distinguish between the human first appellant, Charles Fry, and the incorporated entities through which Charles Fry delivered mining courses.  Documents submitted with the application for leave to appeal to this Tribunal, filed on 23 September 2011 by Charles Fry and Michelle Maher, strongly support Mr Fry’s contention that the incorporated entity through which he delivered those training courses, as a partner with the ACTE, was his company Strategic Mining Pty Limited.  Those documents include a copy of an unsigned agreement dated 4 February 2007 between ACTE Pty Ltd, trading as the Australian College of Training and Employment, and Strategic Mining Pty Limited.  The essence of the agreement was that the ACTE would register clients nominated by Strategic Mining Pty Limited as ACTE candidates, and would maintain separate paper files on each candidate, in accordance with Australian Quality Training Framework requirements, and would verify assessments completed by Strategic Mining Pty Limited, to satisfy itself that the quality of work delivered by Strategic Mining Pty Limited met Australian College of Training and Employment’s standards.  The documents filed in this application also included, as annexures A and B within annexure 5, copies of the minutes of meetings of staff held by “Strategic Mining”, dated 26 March 2008 and 15 May 2008.  Both minutes appear genuine documents, in that the attendance of 5 persons are recorded for the first meeting and 6 for the second, with the minutes recording statements by each speaker in sequence, and both sets of minutes recording that Mr Fry had told the meeting that the “RTO is on target for 1/7/08 but this is subject to VETAB audit, which may delay start up by around 1 month” (minutes of 26 March 2008) and “re timeframe for proceeding with Wise Net’s RPO management system to accommodate training and the use of the program etc – RPO effective date still looks like 1/7/08”.

1. Mr Fry and Ms Maher had complained in an affidavit from Michelle Maher, sworn or affirmed on 14 January 2011, and filed with this Tribunal on 20 January 2011 as “additional evidence” in support of their application numbered 3533 of 2010 (brought by themselves and Strategic Mining Pty Ltd as applicants), that Strategic Mining had been forced, by delay in the registration of the RTO, to incur substantial losses by way of the necessary expenses paid by “Strategic Mining” for training certification being “partnership fees paid to ACTE Pty Ltd for training conducted by Strategic Mining for period 1/7/2008 to 1/9/2009”, and referred to annexure 1 to that additional evidence.  That annexure 1 was a document which listed by name and date invoices totalling $6,415.00, purportedly paid by Strategic Mining Pty Limited to ACTE Pty Ltd.  That document was therefore before the first Adjudicator.  The applicants Fry and Maher have included the same document as annexure 11 to the application for leave to appeal or appeal filed on 16 September 2011, and also included as part of that annexure copies of the actual invoices sent by the Australian College of Training and Employment to Strategic Mining Pty Ltd from and including 2/09/2008 to and including 25/02/2009, and copies of 2 remittance advices, respectively dated 20/02/2009 and 24/03/2009 recording the payments of the amounts in respective invoices, paid by Strategic Mining Pty Limited to ACTE.

1. The information placed before the first Adjudicator included a copy of an email dated 25 February 2008 (annexure 3 to the application numbered 3533/2010), filed by Charles Edwin Fry, Michelle Julie Maher and Strategic Mining, in which Mr Fry sent an email to Mr Whitehead, which in part read, “hope all is going well and that we are on track for RTO status by 1 July, it is very important for us now to be up and running by July, will try calling again tomorrow.”  That the email was sent on the letterhead of Strategic Mining, identifying Mr Fry as the managing director.

1. Annexure 7 to that same application was an email, likewise sent on the letterhead of Strategic Mining, and likewise identifying Mr Fry as the managing director, addressed to Mr Whitehead and asking about “any other news from VETAB on when site audit may take place?”, referring to the RTO application.

1. Annexure 15 to that application 3533/10 is a copy of an email sent by Mr Whitehead and copied to Mr Fry, it being originally sent by Mr Whitehead to a Sue Honeywell of the VETAB.  That the second paragraph of that email, addressed to Sue Honeywell, includes the following statement by Mr Whitehead:

“Charlie Fry Director and CEO of Strategic Corporate Training and one of ACTEs partnering organisations contacted Karen and myself to establish a RTO for him in NSW.  Charlie Fry has a company that provides training and the supply of specialised senior personnel to mining companies across Australia.  His company is long established with an excellent reputation.  I have made this fact clear in my application to VETAB.  Establishing his own RTO therefore, was a natural and obvious progression to his overall business plan”.

1. That letter to Ms Honeywell demonstrates that Mr Whitehead, like Mrs Whitehead, did not distinguish in his own mind between Mr Fry as a person and Mr Fry as the director of Strategic Mining Pty Limited. 

1. The Whiteheads filed a chronology on 7 January 2011 in case 2781/2010, in response to a chronology filed by Mr Fry and Michelle Maher, and Strategic Mining Pty Limited, in claim 3533/2010.  The heading of the chronology (attachment 1) filed by the Whiteheads reads: “Charles Fry and Michelle Fry (Maher) personally contracted us to set up the RTO Strategic Corporate Training (SCT).  The RTO was registered 09/09/09 and is therefore the contract/agreement with CF/MM and/or Strategic Corporate Training Pty Ltd and/or Strategic Mining Pty Ltd by KW and PW was completed and at an end.  Full payment was then due and payable for services rendered.”

1. The heading implies that the Whiteheads were uncertain at that date as to the identity of the party or parties with whom they had contracted for the delivery of a registered training organisation, and they were casting the net as widely as possible.

1. The Adjudicator’s reasons record that in March 2008 an online application was submitted to VETAB.  An undated email in the chronology submitted to support application 3533/2010 records Mr Whitehead asking if Mr Fry wanted the website for the RTO to be “ and the email to be “[email protected]”.  As the reasons of the Adjudicator record, by email dated 25 August 2008, Mr Fry (emailing on Strategic Mining’s letterhead, as Managing Director) asked Mr Whitehead to move the process along (with VETAB) as “we are missing out on substantial business opportunities.”

1. The Adjudicator’s reasons record that on 8 October 2008 Karen Whitehead forwarded to Charles Fry an invoice from KPI Insync Pty Ltd directed to Strategic Mining Pty Ltd for the sum of $16,500.00.  That invoice was 50% of the agreed consultancy fees in respect of the registration of the RTO.  The invoice stated that the application had been completed and lodged with VETAB.  On that same date, 8 October 2008, Mr Fry responded on the email of the Strategic Services Group, describing himself as Managing Director, saying there is no problem with the invoice, but that he noticed that there was no ABN number and asked for the invoice to be issued with an ABN number because, “otherwise our accounts department (Kim) will get stuck in to me”.  A second invoice, dated 9 October 2008, was then forwarded from Qualify Now Pty Ltd, showing that company’s ABN number as 73 100 250 440, and for the same amount as the first, namely a total of $16,500, being the agreed 50% of consultancy fees of $15,000 and GST at $1,500.  At the foot of the invoice it asked that the payment be made to a nominated bank account of P&K Whitehead.  The learned Adjudicator’s reasons include (in paragraph 11 thereof) that “the Whitehead’s asserted that the invoice was only issued first in the name of KPA Insync Pty Ltd and then Qualify Now to Strategic Mining Pty Ltd at the request of Charles Fry who required an invoice from a GST compliant entity to his own GST compliant entity for GST compliant purposes.  Messrs Whitehead did not have an ABN.”

1. It is common ground that second invoice was paid by Strategic Mining Pty Ltd to the personal bank account of the Whiteheads, probably on 13 October 2008, and that the Whiteheads (Mrs Whitehead) had sent the invoice to Strategic Pty Limited because “all the funds, the directions of funds, the costs, etc, were coming out of his own company that was operating called Strategic Mining.”  (Statements made by Mrs Whitehead to the first Adjudicator on 28 October 2010 on the resumed hearing of application 2781 of 2010).  The only parties appearing on that date were the Whiteheads, and there was no party appearing for any respondent.  That matter had initially come on as a minor civil dispute on 2 September 2010, before the first Adjudicator, and been adjourned, because the then respondent Strategic Corporate Training Pty Ltd, had stated an intent to file an amended response, which was done by a document dated 20 August 2010, and probably received by QCAT on 23 August 2010, and at the Coolangatta registry in early September 2010.  In that amended response, the pleading appears that the respondents Charles Fry and Michelle Maher had never had contractual or commercial dealings with the applicants, and that the company Strategic Corporate Training Pty Ltd had never contracted with the applicants.  Instead, it was contended that the company Strategic Mining Pty Ltd had contracted with Qualify Now Pty Ltd, as evidenced by invoice number 11 dated 9 October 2008 for $16,500 and invoice number 14 dated 19 September 2009 for $16,500, with copies of both attached.

1. At the hearing before a second Adjudicator, on 16 September 2010, that Adjudicator closely questioned the Whiteheads as to their reason for bringing the action against Strategic Corporate Training Pty Ltd rather than Strategic Mining Pty Limited, the entity to which the invoices had been addressed, and which had paid the paid portions.  Mr Fry, appearing on that date, did not dispute that Strategic Mining Pty Limited had contracted for the registration of a RTO, but disputed the amount said to be owing, or that it was owing by Strategic Corporate Training Pty Ltd.  The Adjudicator suggested in the clearest terms that Strategic Mining Pty Limited should be added as a respondent, and that an amended application be filed for that reason.

1. When the matter came on again on 28 October 2010 before the first Adjudicator, however, the parties were still the same, although there was no appearance for any respondent.  The material filed by the present appellants (Mr Fry and Ms Maher) explains that they understood after the hearing on 16 September 2010 that an amended application would be filed, naming Strategic Mining Pty Limited as a respondent.  That not having happened, the present appellants declined to appear on the resumed hearing, either in person or as representatives of Strategic Corporate Training Pty Ltd, because they understood the latter entity was to be dropped from the proceedings, and to be replaced by Strategic Mining Pty Limited as a respondent.  As at that stage the Whiteheads were not contending for personal liability in Mr Fry or Ms Maher. 

1. However, events rather overtook that at the second hearing before the first Adjudicator, on 28 October 2010, when, after hearing submissions and answers to questions asked by the Adjudicator of the Whiteheads, the learned Adjudicator suggested that it might be Mr Fry and Ms Maher who were personally liable, and ordered that Strategic Mining Pty Ltd be joined as a second respondent, and Charles Fry and Michelle Maher be joined as third respondents.

1. On 8 December 2010 Strategic Mining Pty Limited filed a response attaching a chronology, with 46 separate annexures.  That response contended that any monies were owed by Strategic Mining Pty Limited to Qualify Now Pty Limited, and that neither Paul nor Karen Whitehead were owed anything, and nor was anything owed by Strategic Corporate Training Pty Limited.  It also complained of a necessary and excessive delay in the registration of the RTO, and a loss of income, reputation and other damages suffered by Strategic Mining Pty Limited.  On that same date Strategic Mining Pty Limited filed an application for a minor civil dispute against Qualify Now Pty Limited as respondent, bearing file number 3533 of 2010.  On 17 December 2010 those two file numbers were consolidated for the purposes of a hearing.  On 7 January 2011 Qualify Now Pty Ltd, as respondent, filed its response, and additional evidence was filed by Strategic Mining Pty Limited on 20 January 2011.  A final hearing of the applications took place on 15 April 2011, possibly on the papers.

1. The first Adjudicator published a decision on 26 July 2011, giving detailed reasons for concluding that the contracting parties were the four individuals, and that an amount of $8,500.00 (together with interest thereon) was payable by Charles Fry and Michelle Maher to the Whiteheads.  The Adjudicator had concluded (in paragraph [28]) that “there was no evidence produced to the Tribunal that Charles Fry and Michelle Maher were representing Strategic Mining Pty Limited or dealing with any personal entity other than Karen Whitehead and Paul Whitehead personally.  The contract sum of $30,000 was never disputed nor were the payments of $16,500, $1,000 and $4,000 leaving a balance then payable of $8,500.”

1. I respectfully agree with the Adjudicator that there was no evidence that Charles Fry and Michelle Maher were dealing with any persons or entity other than Karen Whitehead and Paul Whitehead personally, but disagree with the finding that there was no evidence that Charles Fry and Michelle Maher were representing Strategic Mining Pty Limited.

1. The emails emanating from Mr Fry consistently purported to come from Strategic Mining Pty Ltd, or from the Strategic Services Group.  Mr Fry said to the second Adjudicator on 16 September 2010, on that hearing, that the name “Strategic Services Group” was simply the business name owned by Strategic Mining.  No document was put before the Adjudicator to contradict that assertion, and Strategic Mining Pty Limited paid the entirety of the first invoice submitted to it, and portion of the second.  The minor civil dispute claim was brought for the amount owing unpaid on the second invoice.  In the circumstances, the internal meetings conducted by Strategic Mining Limited, the emails to Mr Whitehead, the dealings between Strategic Mining Pty Limited and the ACTE, and Mr Whitehead’s own submissions made to the VETAB in New South Wales, combine to persuade me that the contracting party with the Whiteheads, for the establishment of the registered training organisation, was Strategic Mining Pty Limited, as the appellants contend.  Accordingly, the Adjudicator was in error in finding the contrary.

1. The Adjudicator made one error of fact as well.  The material filed by the appellants in this appeal (in annexure 1 at paragraph 34) satisfies me that, as contended by the appellants, a total of $23,000 has now been paid by Strategic Mining Pty Limited to Qualify Now Pty Ltd, on the invoices submitted by Qualify Now Pty Ltd to Strategic Mining Pty Limited.  The Adjudicator had incorrectly assessed the total paid in respect of invoice number 14 as $5,000, whereas annexure 8 of the response filed by the Whiteheads for application number 3533/2010, filed on 7 January 2011, in a bank statement of the Whiteheads, records the payment of $16,500 on (apparently) 13 October 2008 (in respect of invoice number 11) and payments of $1,000 on 14 December 2009, $1,500 on 23 March 2010 and $4,000 on 4 March 2010.  All these payments are recorded in the transaction history as being made by way of a direct credit from “Strategic Corpor”.  Annexure 38 to the chronology submitted by Strategic Mining Pty Limited in its claim numbered 3533/2010 was a remittance advice describing the payment on 23 March 2010 of $1,500 to Qualify Now, but ironic oddly enough, leaving a balance still owing of $11,500.  Assuming that remittance advice is valid, and reflects the payment recorded for the same date in the bank statement of the Whiteheads (annexure 8 to the chronology the Whiteheads filed on 7 January 2011), it is odd that a balance of $11,500 is described by Strategic Mining Pty Limited as still being owing.  While the appellants may well be correct in their claim that the learned Adjudicator has overlooked that payment of $1,500 on that date in the Adjudicator’s reasons, the fact remains that the Adjudicator, in paragraph [34] of the reasons, wrote that:

“It was never clear from the evidence whether the agreed contract sum of $30,000 was inclusive or exclusive of GST.  The Whitehead’s original application asserted part payment of $15,000, $1,000 and $4,000 their Suncorp bank account records indicate payments of $16,500, $1,000 and $4,000, a total of $21,500.  On the basis that the contract was always $30,000 in total the sum of $8,500 in fact remains owing.”  

1. I note that if the contract sum was in fact $33,000 (ie with GST of $3,000 in total) then even with the addition of the $1,500 overlooked by the Adjudicator, the sum of $10,000 still remained owing.  It would only be reduced to $7,000 if the contract was for $30,000 exclusive of GST.  Strategic Mining Pty Ltd, through Mr Fry, has consistently contended that GST was payable by it.  In those circumstances this is a matter of swings and roundabouts, and the apparent error by the Adjudicator in overlooking $1,500 is more than balanced by the Adjudicator’s assessing the sum owing, agreed upon, as limited to $30,000.

1. For these reasons I am satisfied the Adjudicator was entitled to make an order that the amount owing (which included interest for 470 days at 10% per annum) was a total of $9,684.52, but the Adjudicator was not entitled to order that that be paid by Charles Fry and Michelle Maher.  Accordingly I will allow the appeal and order instead that the orders made on 15 April 2011 be amended to read:

“Strategic Mining Pty Limited pay to Karen Whitehead and Paul Whitehead the sum of $9,684.52, within two (2) months of the date of this order.”