New Zealand Careers Ltd v Martian Logic Pty Ltd

[2016] NSWCATCD 30

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	New Zealand Careers Ltd v Martian Logic Pty Ltd [2016] NSWCATCD 30
Hearing dates:	23 February 2016
Decision date:	28 April 2016
Jurisdiction:	Consumer and Commercial Division
Before:	DAC Robertson, Senior Member
Decision:	(1) Unless the applicant within 21 days from the date of this decision notifies the Tribunal that it elects to have the proceedings transferred to the Local Court, the proceedings will be dismissed for want of jurisdiction. (2) In the event the applicant notifies the Tribunal within 21 days that it elects to have the proceedings transferred to the Local Court the proceedings will be transferred to the Local Court of NSW pursuant to clause 6 of Schedule 4 to the Civil and Administrative Tribunal Act 2013 (NSW).
Catchwords:	CONSUMER CLAIMS – supply of services – jurisdiction – whether a company incorporated in New Zealand is a consumer within s 79D of the Fair Trading Act
Legislation Cited:	Fair Trading Act 1987 (NSW) Corporations Act 2001 (Cth) Civil and Administrative Tribunal Act 2013 (NSW)
Cases Cited:	Re Featherston Resources Ltd; Tetley v Weston [2014 NSWSC 1139; (2014) 288 FLR 265 Holding Redlich Lawyers v Reef Cove Resort Ltd [2009] QSC 378
Category:	Principal judgment
Parties:	New Zealand Careers Ltd (applicant) Martian Logic Pty Ltd (respondent)
Representation:	Rodesa Fernando, director (Applicant) Anwar Khalil, director (Respondent)
File Number(s):	GEN 15/62134
Publication restriction:	Nil

reasons for decision

1. These proceedings arise out of the supply by the respondent to the applicant of a software product called MyRecruitmentPlus, pursuant to an agreement dated 30 July 2015. The applicant paid the respondent $AUS 2,000.00 for the software but complains that it has never worked and seeks a full refund of the purchase price.

2. The applicant was represented by Ms Rodesa Fernando, a director of the applicant, who appeared by telephone from New Zealand, assisted by Mr Chris Fernando, a solicitor in New Zealand. The respondent was represented by Mr Anwar Khalil, a director of the respondent.

3. The applicant tendered a bundle of documents including a statutory declaration dated 1 December 2015 from Ms Fernando, a company search of the applicant, a tax invoice addressed by the respondent to the applicant dated 30 July 2015, some other documents that it is not necessary to identify in detail, and email exchanges between Ms Fernando on behalf of the applicant and various employees of the Respondent. The applicant’s bundle became Exhibit A.

4. The respondent tendered a bundle of documents which became Exhibit 1.

5. The basic facts are not in dispute.

6. On or about 23 July 2015 Ms Fernando on behalf of the applicant requested a demonstration of the MyRecruitmentPlus software. The demonstration took place on 29 July 2015 and on 30 July 2015 the applicant ordered the software and paid the sum of $AUS 2,000.00 for the software.

7. The respondent then established a user account for the Applicant. However, when the applicant sought to use the software on or about 11 August 2015, she was unable to do so. Ms Fernando emailed Mr Blake, an employee of the respondent, and Mr Mayson, support manager for the respondent, communicated with Ms Fernando and asked her to download a programme known as Team Viewer Quick Support to her computer. There were telephone discussions between Ms Fernando and Mr Mayson during which Mr Mayson sought to rectify the problem, without success. On 17 August 2015 Mr Mayson emailed Ms Fernando suggesting that the fault might have been related to Ms Fernando’s internet service provider and asked Ms Fernando to try another provider.

8. Ms Fernando did so but was still unsuccessful in obtaining access to the software. On 23 August 2015 Ms Fernando emailed Ms Jeannine Winiata, the General Manager of the Respondent, seeking a full refund “as the software is not available for me to use”. Ms Winiata responded on 24 August 2015 stating that the refund would be forwarded to accounts to process and asking whether Ms Fernando had used a different provider to Vodafone. Ms Fernando replied that she had tried a 3G system and logged in from her mother’s house but the software still did not work.

9. Ms Winiata responded the same day stating “the credit will be processed asap”.

10. On 27 August 2015 Mr Mayson emailed Ms Fernando stating that the issue was “conclusively not an issue with our system” and stating:

“Before we will be able to discuss a refund we ask that you perform the following tasks:

(1)   Discuss with your ISP provider.

I suggest you go into one of the Vodafone stores such as the one we called in Riccarton – and while you are over there you can

Use our system from any of the computers they have, and

Try to connect to the internet from their Wifi or something like that if possible.

(2)   Discuss with your computer provider where you purchased it

Try to log on to our system from any of their computers

Ask them to investigate why you can’t use our system from it.”

11. Ms Fernando responded:

“I do not want to go through this procedure again. I am using a different software provider. My business cannot wait. I hope you understand. Can you please advise when I can expect the refund payment.”

12. Ultimately the respondent declined to provide the refund and these proceedings were commenced.

13. The essential issue between the parties is whether the services provided by the respondent were not fit for the purpose for which they were supplied so that the respondent breached the warranty provided pursuant to s 61 of the Australian Consumer Law.

14. However before I can determine the claim I must first confirm that the Tribunal has jurisdiction. For the reasons which follow I find that the Tribunal does not have jurisdiction.

15. Part 6A of the Fair Trading Act 1987 (NSW) (FTA), ss 79B to 79X, confers jurisdiction on the Tribunal with respect to consumer claims. Section 79J provides that the Tribunal has jurisdiction to hear and determine a “consumer claim”.

16. “Consumer claim” is defined in s 79E of the FTA as “a claim by a consumer, for one or more of a number of remedies (including the payment of a specified sum) that arises from a supply of goods or services by a supplier to the consumer”.

17. “Consumer” is defined for the purposes of Part 6A in s 79D of the FTA:

“consumer means any of the following persons or bodies to whom or to which a supplier has supplied, or agreed to supply, goods or services (whether or not under a contract), or with whom or with which a supplier has entered into a contract that is collateral to a contract for the supply of goods or services:

(a)   a natural person,

(b)   a firm (within the meaning of the Partnership Act 1892),

(c)   a small proprietary company (within the meaning of the Corporations Act 2001 of the Commonwealth),

(d)   an owners corporation constituted under the Strata Schemes Management Act 1996,

(e)   a company that owns an interest in land and has a memorandum or articles of association conferring on each owner of shares in the company a right to occupy under a lease or licence a part or parts of a building erected on the land,

(f)   an incorporated association,

(g)   an unincorporated body whose members are associated for a common purpose,

(h)   a company limited by guarantee (other than a company limited both by shares and by guarantee).”

18. The evidence before the Tribunal (being the New Zealand company search tendered by the applicant) establishes that the applicant is a corporation incorporated in New Zealand. If it is a consumer it is only a consumer by virtue of sub-paragraph (c) of the definition of consumer, that is “a small proprietary company (within the meaning of the Corporations Act 2001 of the Commonwealth)”.

19. The dictionary in s 9 of the Corporations Act 2001 of the Commonwealth provides that in that Act “small proprietary company” has the meaning given by s 45A(2). Section 45A(2) of the Corporations Act provides:

“(2)   A proprietary company is a small proprietary company for a financial year if it satisfies at least 2 of the following paragraphs:

(a)   the consolidated revenue for the financial year of the company and the entities it controls (if any) is less than $25 million, or any other amount prescribed by the regulations for the purposes of this paragraph;

(b)   the value of the consolidated gross assets at the end of the financial year of the company and the entities it controls (if any) is less than $12.5 million, or any other amount prescribed by the regulations for the purposes of this paragraph;

(c)   the company and the entities it controls (if any) have fewer than 50, or any other number prescribed by the regulations for the purposes of this paragraph, employees at the end of the financial year.”

20. Section 45A(1) provides:

“(1)   A proprietary company is a company that is registered as, or converts to, a proprietary company under this Act.

Note 1: A proprietary company can be registered under section 118 or 601BD. A company can convert to a proprietary company under Part 2B.7.

Note 2: A proprietary company must:

* be limited by shares or be an unlimited company with a share capital

* have no more than 50 non-employee shareholders

* not do anything that would require disclosure to investors under Chapter 6D (except in limited circumstances).

(see section 113).”

21. The requirements for a company to be a proprietary company, as identified in Note 2 to sub-section 45A(1) which is set out above, are set out in s 113 of the Corporations Act. It is clear from s 45A(1) that a proprietary company, and thus a small proprietary company, must be a “company” within the meaning of the Corporations Act.

22. “Company” is defined in the dictionary in s 9 of the Corporations Act as:

“a company registered under this Act and:

(c)   in Parts 5.7B and 5.8 (except sections 595 and 596), includes a Part 5.7 body; and

(d)   in Part 5B.1, includes an unincorporated registrable body.”

23. I note that section 79H of the FTA provides:

“For the purposes of this Part:

(a)   a person or body claiming to be a consumer is to be presumed to be a consumer until the contrary is proved, and

(b)   in any legal proceedings (including proceedings before the Tribunal), the onus of proving that a person or body claiming to be a consumer is not a consumer is on the party who seeks to establish that fact.”

24. However s 79H does not overcome the difficulty that the applicant faces. The evidence establishes that it is a company registered under the Companies Act of New Zealand and that it is not a company registered under the Corporations Act.

25. The Corporations Act 2001 (Cth) draws a clear distinction between companies registered under the Act and bodies corporate registered outside Australia. The term “corporation” is defined in s 57A to include both a company and:

“(b)   any body corporate (whether incorporated in this jurisdiction or elsewhere); and

(c)   an unincorporated body that under the law of its place of origin, may sue or be sued, or may hold property in the name of its secretary or of an office holder of the body duly appointed for that purpose.”

26. The applicant is clearly a corporation within the meaning of the Corporations Act but it is not a “company” and therefore cannot be a “small proprietary company” within the meaning of the Corporations Act. [1]

    1. See Featherston Resources Ltd; Tetley v Watson [2014 NSWSC 1139; (2014) 288 FLR 265 at 269-273, [14]-[29] where Brereton J held that a registered foreign company was not a “company” within the meaning of that term when used in s236 of the Corporations Act which provides that a member, former member, officer or former officer may bring proceedings on behalf of a “company” if granted leave pursuant to s237. See also Holding Redlich Lawyers v Reef Cove Resort Ltd [2009] QSC 378 at [8] – [10].

27. The applicant is a “foreign company” (as defined in s 9 of the Corporations Act) and is therefore a “registrable body” (as defined in s 9 of the Corporations Act). It may therefore, if it were registered under Division 2 of Part 5B.2 of the Corporations Act or carried on business in Australia, be a “Part 5.7 body” (as defined in s 9 of the Corporations Act). If being a Part 5.7 body were sufficient to make the Applicant a consumer then, in the absence of evidence that the applicant does not carry on business in Australia, the applicant would, by virtue of s 79H of the FTA, be presumed to be a consumer. However s 57A of the Corporations Act provides that a Part 5.7 body is included within the term “company” only for limited purposes, ie Part 5.7B and Part 5.8 of the Corporations Act. Part 5.7B deals with the recovery of property or compensation for the creditors of an insolvent company. Part 5.8 concerns certain offences relating to insolvent companies.

28. That the applicant might, for very limited purposes, fall within the term “company” when used in two discrete parts of the Corporations Act cannot make it a “small proprietary company (within the meaning of the Corporations Act 2001 of the Commonwealth)”.

29. Therefore the Tribunal does not have jurisdiction to determine the Applicant’s claim. The Tribunal has the power pursuant to clause 6 of Schedule 4 to the Civil and Administrative Tribunal Act 2013 (NSW) to transfer the application to the Local Court, however the Applicant may prefer that the application be dismissed.

30. For that reason I order:

1. Unless the Applicant within 21 days from the date of this decision notifies the Tribunal that it elects to have the proceedings transferred to the Local Court, the proceedings will be dismissed for want of jurisdiction.

2. In the event the Applicant notifies the Tribunal within 21 days that it elects to have the proceedings transferred to the Local Court the proceedings will be transferred to the Local Court of NSW pursuant to clause 6 of Schedule 4 to the Civil and Administrative Tribunal Act 2013 (NSW).

DAC Robertson

Senior Member

Civil and Administrative Tribunal of New South Wales

28 April 2016

Endnote

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: 03 June 2016