Gynaecare Services Pty Ltd v Health Staff Solutions Pty Ltd

[2019] NSWCATCD 96

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Gynaecare Services Pty Ltd v Health Staff Solutions Pty Ltd [2019] NSWCATCD 96

Hearing dates:

29 May 2019

Date of orders:

15 July 2019

Decision date:

15 July 2019

Jurisdiction:

Consumer and Commercial Division

Before:

P French, General Member

Decision:

(1) Health Staff Solutions Pty Ltd must pay Gynaecare Services Pty Ltd the sum of $13,750.00 within 14 days of the date of these orders

Catchwords:

CONSUMER LAW — Australian Consumer Law (NSW) — Consumer guarantees in relation to the supply of services —Failure to comply with the guarantee as to reasonable time for supply —Guarantees not to be excluded by contract

Legislation Cited:

Australian Consumer Law (NSW)

Fair Trading Act 1987 (NSW)

Cases Cited:

Briginshaw v Briginshaw (1938) 60 CLR 336

Miller v Minister for Pensions [1947] 2 All ER 372

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Gynaecare Services Pty Ltd (Applicant)
Health Staff Solutions Pty Ltd (Respondent)

Representation:

E Boulton (Applicant)
E Wayne (Respondent)

File Number(s):

GEN 19/09264

Publication restriction:

Nil

REASONS FOR DECISION

Introduction

1. This is an application by Gynaecare Services Pty Ltd (the consumer) for an order pursuant to section 79N(a) of the Fair Trading Act 1987 (FT Act) that would require Health Staff Solutions Pty Ltd (the trader) to pay it $13,750.00, being the refund of a placement fee it paid to the trader on or about 3 August 2017 in relation the recruitment of a General Practitioner under a contract for the provision of staff recruitment services dated on or about 19 July 2016. The consumer contends that it is entitled to this refund because the trader failed to perform the contract in so far as it concerned this position, and a subsequent variation to the contract, which converted the recruitment objective to a Nurse Manager, within the time frame agreed or within any reasonable time thereafter, contrary to the guarantee as to the supply of services within a reasonable time contained in section 62 of the Australian Consumer Law (ACL). This application was made to the Tribunal on 24 February 2019 (the application).

2. For the reasons set out following, the Tribunal is comfortably satisfied on the evidence before it that the trader did not supply its services to the consumer with respect to the recruitment of the General Practitioner and Nurse Manager positions within any reasonable time, contrary to the guarantee contained in section 62 of the ACL. The consumer was therefore entitled under section 267 of the ACL to terminate the contract for the supply of this service, and pursuant to section 269 of the ACL, is entitled to an order that will recover from the trader the money it paid for this service. The trader has sought to rely upon a term of its contract for the supply of its services which excludes the provision of a refund but confers a 100% credit in respect of the supply of future services. That term is voided by operation of section 64 of the ACL, which prevents the trader from contracting out of the consumer guarantees and remedies provided by the ACL.

Procedural history

3. The application was first listed before the Tribunal in a Group List for Conciliation and Hearing on 13 March 2019. Dr Emma Boulton, who is the Director of the consumer, attended that hearing on its behalf. Mr Edward Wayne, who is the Managing Director of the trader, attended that hearing on behalf of the trader. In accordance with the Tribunal’s usual practice where both parties are present in person at the first listing of an application, prior to the case being called, the parties were offered the opportunity to attempt to resolve the dispute cooperatively with the assistance of a Tribunal conciliator. Those efforts were not successful. When the parties returned to the hearing room following conciliation, the Tribunal adjourned the application to a Special Fixture Hearing and issued directions to the parties for the filing and exchange of the documentary evidence that they intended to rely upon at the final hearing.

Evidence

4. Both parties have complied with the Tribunal’s directions for the filing and exchange of their documentary evidence. The consumer’s bundle was marked Exhibit A1. The trader’s bundle was marked Exhibit R1. Dr Boulton attended the hearing on behalf of the consumer. She gave oral evidence under a solemn promise to tell the truth. Mr Wayne attended the hearing on behalf of the trader. He also gave oral evidence under a solemn promise to tell the truth. The parties had the opportunity to present their respective cases, to ask each other questions, and to make final submissions to the Tribunal.

Material facts and contentions of the parties

5. The consumer conducts a medical practice specialising in sexual and reproductive health and family planning services for women and men. It trades under the trading name “Clinic 66”. In 2016, the consumer was in a start-up/expansion phase of its business at its Chatswood location and had just installed a purpose built operating theatre.

6. The trader is a specialist health staff recruitment agency.

7. The dispute arises from a contract, styled as the trader’s “Terms of Business”, made between the parties on or about 19 July 2016. The terms of that contract that are relevant to the outcome of this application are set out below:

TERMS & CONDITIONS OF BUSINESS

DEFINITIONS AND INTERPRETATION

“Candidate” means a person who is introduced to, or whose particulars are presented to a Client by Health Staff Solutions in order for the Client to assess the suitability of the person for the purposes of employment in any capacity (whether on a temporary, permanent, or contract basis).

“Charges” means the fees and charges set out in the Schedules to these Terms and Conditions of Business.

…

“Referral Fee Schedule” means Schedule 1

“Service” means the recruitment services provided by Health Staff Solutions in accordance with these Terms and Conditions of Business

…

DEEMED ACCEPTANCE

Please read these Terms and Conditions carefully. You will be deemed to have accepted these Terms and Conditions if you interview a Candidate introduced by Health Staff Solutions, or employ that person in any capacity (whether on a temporary, permanent or contract basis).

CANDIDATE INTRODUCTION

A Candidate is deemed to be introduced to you by Health Staff Solutions when we submit the Candidate’s name or details to you directly in writing.

…

TERMS OF PAYMENT

Our fees are due and payable fourteen (14) days net from the date the candidate commences employment with you.

REFERENCES

As the prospective employer, you are responsible for the final selection of any Candidate you employ as a result of an introduction by Health Staff Solutions. We will conduct references and other checks on your behalf in respect to any Candidate. You bear the responsibility of satisfying yourself as to the suitability of any Candidate and for the confirmation of their professional and academic qualifications prior to offering the Candidate employment. You also bear the responsibility of arranging any medical examination or other investigations of the Candidate and for obtaining any work or other permits.

…

PLACEMENT GUARANTEE

A guarantee period of thirteen (13) weeks will apply for all permanent placements

In the event that an eligible candidate resigns or is lawfully dismissed within the guarantee period for any reason other than redundancy or restructure, the guarantee will apply.

The guarantee is in the form of a replacement or credit note equal to 100% of the placement fee.

SCHEDULE 1 – REFERRAL FEE STRUCTURE

The fee payable to Health Staff Solutions by the client for the introduction of a Candidate will be calculated as a flat fee irrespective of the salary package offered to the successful candidate and are exclusive of GST

…

Permanent Placement Fee for Registered Nurses

…

Nurse Managers                  $10,000

Permanent Placement Fee for Medical Practitioners

General Practitioners – VR (3 days or less)         $12,500

General Practitioners – VR               $18,500

8. Pursuant to this contract the consumer engaged the trader’s services to recruit several key staff members in 2016 and 2017. These positions were a General Manager, Clinic Supervisor/Practice Manager, and Medical Receptionist. Although there are controversies as to the suitability of candidates referred and appointed to two of these positions, the present dispute does not concern the services provided by the trader in relation to these staff positions.

9. In or about April 2017 the consumer engaged the trader under the terms of the contract to assist it to recruit a General Practitioner. On 7 May 2017 and 5 June 2017 the trader referred two potential candidates for this position to the consumer for interview. Although it is not entirely clear in the evidence, it appears that neither candidate proceeded to interview or ultimately sought appointment to the position.

10. In late July or early August 2017 the trader referred a third potential candidate for the position to the consumer for interview, who I will refer to as Dr XY. The consumer appointed Dr XY to a part-time position of General Practitioner and she commenced employment working half a day a week on 7 August 2017. On or about the date of Dr XY’s employment the consumer paid the trader the applicable placement fee, which as noted above, was $13,750.00 (inclusive of GST).

11. Dr XY’s placement was not successful. It appears that she resigned the position in early October 2017 and within the 13 week placement guarantee period specified in the trader’s Terms of Business. That obliged the trader to continue to recruit a General Practitioner for the consumer’s practice. However, it appears that no further referrals of potential candidates for this position were ever made to the consumer.

12. In early January 2018 the consumer notified the trader that it no longer sought its assistance to recruit a General Practitioner. In her oral evidence, Dr Boulton stated that this was because it had become clear that the trader was unable to fulfil this recruitment objective and the needs of the consumer’s clinic had changed over time. The consumer requested, and the trader agreed, to convert the still active placement guarantee associated with this position to the recruitment of a Nurse Manager role. This variation to the contract was made orally but is confirmed in an email from the consumer’s General Manager to Mr Wayne dated 11 January 2018. There is no dispute about this variation.

13. It appears that the trader was unable to identify and refer any suitable candidates for the position of Nurse Manager to the consumer.

14. On 4 July 2018 Dr Boulton met with Mr Wayne to discuss the status of the recruitment for this position. She requested to terminate the recruitment contract for a Nurse Manager and a refund of the placement fee that had been paid in relation to Dr XY. Mr Wayne refused to provide the refund and it appears that it was ultimately agreed that the trader would continue with its recruitment effort in relation to the Nurse Manager.

15. The trader did not refer any potential candidate for the position of Nurse Manager to the consumer after that meeting up to 31 December 2018. On that date Dr Boulton wrote to Mr Wayne to formally terminate the contract for the recruitment of this position and to request a refund of the placement fee the consumer had paid the trader in relation to the placement of Dr XY. An extract of that letter is set out following:

Dear Ed

I am writing to formally request refund of monies held by Health Staff Solutions on behalf of Gynaecare Services Pty Ltd. I understand that it is not your policy to “refund” fees but on this occasion, I feel an exception is warranted, as no possible candidates have been put forward by HSS for the position of Nurse Manager.

…

16. The trader did not respond to Dr Boulton’s letter. As a consequence, on 21 January 2019, the consumer made a complaint about the trader’s refusal to provide the refund to NSW Fair Trading. NSW Fair Trading intervened to attempt to resolve the dispute, but this intervention was not successful. In an email to Dr Boulton dated 13 February 2019 finalising the complaint, the Fair Trading Officer advises

Dear Dr Boulton

I refer to your correspondence dated 21 January 2019 regarding Health Staff Solutions Pty Ltd.

Your concerns were brought to the attention of Mr Edward Wayne, Managing Director, Health Staff Solutions. Mr Wayne advised Health Staff Solutions Pty Ltd have declined your request for a full refund, however are honouring a 100 percent credit as outlined in the agreed terms of business provided to you.

Mr Wayne further advised approximately three Theatre Managers have been put forward for interview since the General Manager resigned, however he said they have declined the position due to your business’s use of twilight sedation. Mr Wayne stated the difficulty in him finding a suitable candidate is due to your preferred sedation method and he said many professionals disagree with its use.

Mr Wayne stated your credit with his business is still valid and does not have an expiry date and should you wish to make use of the credit you can contact him directly.

17. It is not apparent in the evidence on what basis Mr Wayne advised the Fair Trading Officer that ‘approximately three’ Theatre Managers were referred to the consumer. Dr Boulton denied that any candidates for this role were ever referred by the trader. The trader’s Terms of Business state under the heading ‘Candidate Introduction’ that a candidate is deemed to be introduced when the trader submits the candidate’s name or details to the consumer ‘directly in writing’ (emphasis in the original). The trader has not submitted any evidence of the referral to the consumer in writing of any candidate for the position of General Practitioner or Nurse Manager between October 2017 and 31 December 2018.

18. In his oral evidence Mr Wayne went to some pains to explain that the consumer was not entitled to any refund because the consumer and the trader had an extensive business relationship which involved the trader providing business development advice and support to the consumer far in excess of that for which it was paid. In its submissions the trader describes the relationship as

far from that of an ordinary client/recruiter relationship

19. which involved the trader going

above and beyond (during office hours as well as weekends) to do what is in Clinic 66’s best interests, including suggested improvements, changes to structure and reporting mechanisms, purchase of plant & equipment, identification of new sites and a push for licensing/accreditation.

20. In his oral evidence Mr Wayne also went to some pains to explain that the trader could not reasonably be expected to source and refer suitable candidates to the consumer for placement because at the material time it was unlicensed and used a controversial patient sedation technique. These contentions also appear in the trader’s submissions:

Health Staff Solutions has been given a role to fill that is quite frankly unfillable due to the issues mentioned in the chronology (namely unlicensed facility and the use of twilight sedation). Health Staff Solutions has a duty to disclose any known issues with the practice to prospective candidates so that they can make an educated decision where they wish to proceed.

Health Staff Solutions has evidence of recruitment efforts to date to fill this role (despite these issues) including 8 candidates who we have approached directly through our network (10 candidates in total have been screened). These candidates refused to proceed with their application after being given this information.

21. The trader’s reference to the consumer’s practice as not being “accredited” appears to be a reference to the requirement for the practice to be licenced under the provisions of the Private Health Facilities Act 2007. In this respect the trader relies upon a letter issued to the consumer by NSW Health Regulation and Compliance Unit dated 23 August 2017 which states as follows (relevantly):

It has come to the notice of NSW Ministry of Health that Clinic 66 may be operating a private health facility, as defined in the Private Health Facilities Act 2007 at [address].

Under the Act, private health facilities must be licensed. …

All facilities at which surgical procedures are performed must be licensed under the Private Health Facilities Regulation 2010 (Regulation). …

It is an offence to conduct a private health facility unless it is licensed (section 33 of the Act) …

To determine whether the facility should be licensed, you should review the procedures undertaken at the premises and determine whether they come within the definitions above. In reviewing whether or not the surgical procedures fit the above class you may wish to consult colleagues in relevant professional colleges.

If any of the surgical procedures performed come within the definition of surgical class, you must cease to provide those treatments and any other prescribed treatment at the unlicensed premises immediately. …

Please provide by close of business Wednesday 6 September 2017 written advise on the level of anaesthesia administered to a patient undergoing a surgical procedure at Clinic 66. In your reply, please provide written confirmation that you have ceased to provide surgical class and any other prescribed services and treatments in accordance with the Regulation

…

22. In her oral evidence, Dr Boulton denied that the consumer’s medical practice had ever operated contrary to the Private Health Facilities Act or Regulation, or that it used a controversial sedation technique, but accepted that it took some time for the practice to become fully accredited. She stated that this occurred in May 2018, and that in the seven months following, the trader still failed to refer any suitable candidates for the Nurse Manager position. In reply, Mr Wayne stated that the trader did not know that the consumer’s practice had become accredited in May 2018.

23. In his oral evidence and submissions Mr Wayne also contended that there would be serious unfairness to the trader if the consumer were to obtain the order that it is seeking because its commission to staff was paid on the placement of Dr XY and it would now be impossible to claw back money paid against the placement fee.

Jurisdiction

24. There is no issue that the Tribunal has jurisdiction to deal with this application as a consumer claim under the provisions of Part 6A of the FT Act.

Applicable Law

25. The Australian Consumer Law (NSW) (ACL) is part of the law of NSW and may be applied in the determination of a consumer claim made under Part 6A of the FT Act: section 28 of the FT Act. Chapter 3 of the ACL contains a number of specific protections for consumers in consumer transactions, including in Part 3.2 a number of guarantees in relation to the supply of services.

26. One of these guarantees is the guarantee as to reasonable time for the supply of services, which is contained in section 62 of the ACL. If a supplier of services supplies in trade and commerce services to a consumer and the time within which the services are to be supplied is not fixed by the contract for the supply of the services, or is not to be determined in a manner agreed by the consumer and supplier, there is a guarantee that the services will be supplied within a reasonable time.

27. Section 267 of the ACL sets out the remedies that may be available to a consumer if a supplier of services does not comply with a consumer guarantee. Subject to certain exceptions, a consumer may take action against the supplier under this section to obtain one of the available remedies: section 267(1). If the failure to comply with the guarantee can be remedied and is not a major failure the consumer may require the supplier to remedy the failure within a reasonable time: section 267(2)(a). If such a requirement is made of the supplier but the supplier refuses or fails to comply with the requirement, the consumer may (relevantly) terminate the contract for the supply of the services: section 267(2)(b)(ii). If the failure to comply with the guarantee cannot be remedied or is a major failure the consumer may (relevantly) terminate the contract for the supply of services: section 267(3)(a). The exception that is potential engaged in this case is found in 267(1)(c)(ii). A consumer will not be entitled to a remedy under section 267 if the failure to comply with the consumer guarantee arises from an act, default or omission, or a representation made by a person other than the supplier.

25. Section 268 of the ACL sets out the circumstances in which a failure to comply with a guarantee in relation to the supply of services will be a major failure. It will be a major failure if (relevantly) the services would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure: section 268(a).

26. Section 269 of the ACL applies if a consumer terminates a contract for the supply of services in reliance upon the provisions of section 267: section 269(1). The termination takes effect (relevantly) at the time the termination is made known to the supplier of the services (whether by words or by conduct indicating the consumer’s intention to terminate the contract): section 269(2)(a). The consumer is entitled to recover, by action against the supplier of the services (relevantly) a refund of any money paid by the consumer for the services to the extent that the consumer has not already consumed the services at the time the termination takes effect: section 269(3).

27. Section 64 of the ACL prevents a trader from relying upon a term of a contract for the supply of services which excludes a consumer guarantee or remedy. The term is void to the extent that it purports to exclude, restrict or modify, or has the effect of excluding, restricting or modifying the application of a consumer guarantee, the exercise of rights conferred by a consumer guarantee, or the liability of a person for the failure to comply with the guarantee: section 64(1).

28. The consumer bears the onus of proving its case on the civil standard of proof, which is the balance of probabilities: Briginshaw v Briginshaw (1938) 60 CLR 336. This standard of proof was described by Lord Denning in Miller v Minister for Pensions [1947] 2 All ER 372 [at 374] as requiring the Tribunal to be satisfied that an alleged fact was “more probable than not”. However, the Tribunal must “feel an actual persuasion of [the alleged fact’s] occurrence or existence before it can be found. It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality ” … [the occurrence or existence of the fact must be established]… to the reasonable satisfaction of the Tribunal”: Briginshaw [at 361-2].

Consideration

32. Having regard to the consumer’s cause of action, the material facts and contentions of the parties, and the applicable law, the questions the Tribunal must ask and answer in order to determine the outcome of this application may be stated as follows:

1. Did the trader fail to comply with the guarantee as to reasonable time for supply in supplying its services to the consumer in relation to the recruitment of the General Practitioner/Nurse Manager?

2. If so, was this a major failure?

3. If so, did the consumer terminate the contract for the provision of this service in accordance with the requirements of the ACL?

4. If so, is the consumer entitled to be refunded the placement fee it paid in relation to Dr XY?

Did the trader fail to comply with the guarantee as to reasonable time in the supply of its recruitment services in relation to the General Practitioner/ Nurse Manager positions?

33. The contract for the recruitment of the General Practitioner/Nurse Manager did not specify a time within which this service was to be performed and it did not include any agreed manner by which this time was to be determined. Section 62 of the ACL therefore clearly applies in the circumstances of this case.

34. When the consumer engaged the trader to supply recruitment services in relation to a General Practitioner it had a present need for this staff. When the contract was varied to substitute the position of Nurse Manager as the recruitment target the consumer had a present need for that staff.

35. In accordance with its terms of business, and the placement guarantee specifically, performance of the contracted service was to be completed on the selected staff member’s completion of 13 weeks of service. Although Dr XY was referred by the trader to the consumer in or about July or August 2017 and was appointed to the part-time position of General Practitioner on 7 August 2017, she did not complete 13 weeks of service. The contract was therefore not performed by her referral to and appointment by the consumer.

36. As a consequence, the trader failed to perform the service for which it was contracted between April 2017 when it was engaged to recruit this position and late July or early August 2017 when it successfully referred Dr XY to the consumer, and then between early October 2017 after Dr XY resigned up to early January 2018 when the recruitment objective changed to Nurse Manager. That is a substantial period of time in the aggregate, being a period of approximately six months (excepting the period when Dr XY was employed).

37. After the recruitment objective was changed to the position of Nurse Manager in early January 2018 the contract was not performed up to 31 December 2018 when it was terminated by the consumer for non-performance. This is also a very substantial period, being a period of almost 12 months.

38. Given that the consumer had a present need for both staff positions at the time it engaged the trader to recruit for them, I am satisfied that the failure of the trader to complete the contract within the 20 month period from April 2017 to 31 December 2018 resulted in its contravention of the guarantee as to reasonable time for supply contained in 62 of the ACL.

39. The trader has contended that it did refer candidates to the consumer for the position of Nurse Manager. In its response to the consumer’s complaint to NSW Fair Trading it claims that it referred ‘approximately three’ (whatever that may mean). However, I am not satisfied that this was the case. Such a referral was required to be in writing under the trader’s own Terms of Business. Consequently if such referrals had been made there would be written evidence of them. The trader has failed to produce any such evidence. Dr Boulton denies ever receiving the referral of a candidate for this position.

40. The trader has contended that its inability to identify suitable candidates for the position of General Practitioner, and later, Nurse Manager arose because of the consumer’s conduct in not being ‘accredited’ and in using a controversial sedation technique. In its submissions it refers to the positions as being ‘quite frankly unfillable’ for these reasons. In effect it seeks to rely upon the exception provided in section 267(1)(c)(ii) of the ACL.

41. If the trader considered these positions ‘unfillable’ it is not apparent why it accepted this commission; that is, the trader should not have contracted with the consumer to provide a service it knew it could not provide.

42. However, I am not satisfied on the evidence before me that the trader ever did consider the positions unfillable for the reasons it now asserts. The trader has submitted into evidence an extensive chronology of its relationship and communications with the consumer. It has also submitted into evidence what appears to be the totality of its written communications with the consumer over the course of their relationship. The chronology does not refer to any communication between the trader and the consumer expressing concerns about candidate reactions to the consumer’s accreditation status or sedation techniques before 4 July 2018 when Mr Wayne met with Dr Boulton to discuss her concerns about the non-performance of the contract. On the trader’s own evidence that was the first time these issues were raised and discussed. There is no reference whatsoever to these issues as impacting on the trader’s recruitment efforts in any of the written communications that passed between the trader and the consumer in relation to the recruitment of these staff (there is written evidence of communications regarding accreditation, but not in terms of any impact on staff recruitment).

43. I also note that in her oral evidence Dr Boulton denied that these issues were ever raised with her by the trader at any time before she terminated the contract for the provision of this service on 31 December 2018, including at her meeting with Mr Wayne on 4 July 2018. On balance I prefer Dr Boulton’s evidence on this point to that of Mr Wayne for two reasons. First, if the issue of the consumer’s accreditation had been raised and discussed on 4 July 2018 as Mr Wayne contends, I am satisfied that Dr Boulton would have told Mr Wayne the clinic had been accredited in May 2018. I am satisfied that Dr Boulton would have had every reason to volunteer that information and no reason to conceal it had the issue been raised with her. However, it is clear that Mr Wayne did not know of the clinic’s accreditation at any time prior to the hearing. Second, if the trader genuinely considered the position ‘unfillable’ for the reasons it now asserts I am satisfied that Mr Wayne would have accepted Dr Boulton’s attempt to terminate the contract for the provision of this service on 4 July 2018 rather than persist in an effort in futility.

Was this a major failure?

44. I am comfortably satisfied that the trader’s failure to comply with the guarantee as to supply within a reasonable time was a major failure on the basis that a reasonable consumer with a present need for staff would not have acquired the trader’s services if it knew that it would not be able to achieve a suitable staff placement over a 20 month period, and that it would not receive any referrals of suitable (or any) candidates for appointment over a 14 month period from October 2017 to 31 December 2018. I am satisfied that a reasonable consumer would be entitled to expect that a trader who had accepted this commission would provide referrals in a far more frequent and timely manner.

Did the consumer terminate the contract for the provision of this service in accordance with the requirements of the ACL?

45. In the circumstances of this case the consumer was entitled to terminate the contract for the supply of the recruitment services under both sections 267(2)(a) and 267(2)(b)(ii) of the ACL. That is because, after first attempting to terminate the contract at her meeting with Mr Wayne on 4 July 2018, Dr Boulton acquiesced and provided the trader with further time to complete the contract being another six months. The trader failed to remedy its failure to comply with the guarantee as to reasonable time for supply within this further period. In any event, I have found that the failure to comply was a major failure. The consumer was entitled to terminate the contract on that basis.

Is the consumer entitled to be refunded the placement fee it paid in relation to Dr XY?

46. The performance criterion for the contract specified in the trader’s Terms of Business was a candidate’s successful completion of 13 weeks employment. That performance criterion was never satisfied in the circumstances of this case. It is not in issue that Dr XY resigned her employment before the 13 week threshold was reached. Although the trader may have carried out work in relation to the contract, having regard to the performance criterion, the consumer received no benefit in consideration of the contract price it paid. It thus did not ‘consume’ any of the contracted for service before the contract was terminated for the purpose of section 269 of the ACL.

47. The trader has contended that the refund of Dr XY’s placement fee would be unfair because of all of the unpaid for work and support it has provided to the consumer. There is a dispute between the parties as to the extent and nature of the trader’s business relationship with the consumer. In her oral evidence, Dr Boulton described Mr Wayne’s account of this as exaggerated. But in any event, this dispute concerns a specific contracted for service. Other business dealings between the trader and the consumer have no bearing upon the outcome of this dispute.

48. The trader has also contended that a refund would be unfair because it has paid out from the placement fee a staff commission which it now cannot recover. This submission also cannot be accepted. The internal financial arrangements of a supplier have no bearing on a consumer’s entitlement to a refund of a contract price under section 269 of the ACL. The only factor limiting that remedy is the extent to which the consumer has consumed the services provided by supplier. For the reasons I have stated above there was no such consumption for the purposes of section 269 in the circumstances of this case.

49. The trader also seeks to resist the payment of a refund on the basis of the ‘placement guarantee’ clause that is incorporated into its Terms of Business. This clause purports to exclude the refund of a placement fee but provides instead a 100% credit for the provision of future services by the trader. That clause attempts to deprive the consumer of the remedy for a contravention of a consumer guarantee provided by sections 267 and 269 (being the right to terminate the contract and recover the contract price subject to any consumption of the service). It is therefore rendered void and of no effect by operation of section 64 of the ACL.

Conclusion

50. For these reasons the consumer is entitled to an order that will require the trader to repay to it the $13,750.00 placement fee it paid in relation to the placement of Dr XY.

**********

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: 29 March 2022