Rowe v Emmanuel College

[2013] FCCA 231

FEDERAL CIRCUIT COURT OF AUSTRALIA

ROWE v EMMANUEL COLLEGE [2013] FCCA 231

Catchwords:
CONSUMER LAW – Claim that school enrolment contract was an unfair contract – claim that requirement to pay for extra copies of school reports to separated parents was an unfair contractual term – claim of misleading and deceptive conduct – claim of unconscionable conduct – enrolment contract formed after 1 January, 2010 – all claims save for claims of misleading and deceptive conduct summarily dismissed.

Legislation:  

Competition and Consumer Act2010, Schedule 2 Parts 2-1, 2-2 & 2-3, s.236

Trade Practices Amendment (Australian Consumer Law) Act (No. 2) 2010, s.8 of Schedule 7

Blomley v Ryan (1956) 99 CLR 362
Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447
Louth v Diprose (1992) 175 CLR 621

Applicant: CHAD EVERETT ROWE

Respondent: EMMANUEL COLLEGE

File Number: BRG 208 of 2013

Judgment of: Judge Jarrett

Hearing date: 15 April 2013

Date of Last Submission: 15 April 2013

Delivered at: Brisbane

Delivered on: 15 April 2013

REPRESENTATION

The Applicant appeared on his own behalf

Counsel for the Respondent: Mr Donovan

Solicitors for the Respondent: Corney & Lind Lawyers

ORDERS

1. Orders 3, 4, 6 and 8 of the orders sought in the applicant’s further amended application be dismissed.

2. The applicant pay the respondent’s costs of the summary dismissal application to be agreed and failing agreement, to be fixed by the Court on the next Court date.

3. The balance of the application be adjourned to 7 May 2013 at 10.00 a.m. for final hearing (with an estimated hearing time of one (1) day) in the Federal Circuit Court of Australia sitting at Brisbane.

4. In the event of any applicable filing, setting down, hearing, mediation or enforcement fee or fees (“the fees”) not having been reduced on the basis of financial hardship, the party responsible for the payment of the fees or any of them, pay or cause to be paid such of the fees as shall be payable by that party in accordance with, and within the time specified in, the Federal Circuit Court Regulations 2000.

5. Each party file and serve on each other party no later than 4.00pm on 23 April 2013:

   (a)One affidavit setting out any further evidence in chief; and

   (b)One affidavit of each witness intended to be relied upon at trial.

6. Each party file and serve on each other party no later than 4.00pm on 30 April 2013, a case outline setting out:

   (a)A precise minute of the final orders sought;

   (b)A relevant chronology;

   (c)A list of affidavits and applications and/or responses (where appropriate) intended to be relied upon at trial and;

   (d)A statement of evidence which they say supports the legal principles on which they rely.

7. No party shall be entitled to rely on any affidavit material not filed and served in accordance with these directions without leave of the Court first had and obtained.

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT BRISBANE

BRG 208 of 2013

CHAD EVERETT ROWE

Applicant

And

EMMANUEL COLLEGE

Respondent

REASONS FOR JUDGMENT

Ex tempore

1. This is an application for the summary dismissal of what has now morphed into a further amended application filed, apparently, on either 11 or 12 April of this year. 

2. In the further amended application, the applicant seeks final relief:

   a)Firstly, pursuant to schedule 2, Part 3 of the Competition and Consumer Act2010, in that he asserts that a certain contract between he and his wife on the one part and the respondent on the other in respect of their child’s enrolment at the respondent’s school is an unfair contract or contains an unfair contractual term;

   b)Next, he seeks an order that the Court strike out or declare void as an unfair contract term, pursuant to schedule 2, Part 2-3 of the Competition and Consumer Act2010, the respondent’s policies on communication with separated families. 

   c)He seeks a declaration that the respondent has engaged and continues to engage in misleading and deceptive conduct, pursuant to schedule 2, Part 2-2 of the Competition and Consumer Act2010;

   d)Next, he seeks a declaration that the respondent has engaged and continues to engage in unconscionable conduct, pursuant to schedule 2, Part 2-1 of the Competition and Consumer Act2010;

   e)He seeks general damages of $750,000, pursuant to s.236 of the Act. 

   f)He seeks that the Court award a civil penalty of $1.1 million for breach by the respondent of the Competition and Consumer Act; and

   g)He asks for an order for costs on an indemnity basis.

3. The respondent opposes all of the relief claimed by the applicant. 

4. The material reveals that the applicant and his wife enrolled their daughter at the respondent’s school by entering into an enrolment agreement with the respondent on or about 7 April, 2009. The enrolment agreement is in evidence. 

5. On or about 1 February, 2010 Mr Rowe’s daughter, Emily, commenced schooling at the school operated by the respondent. 

6. I said a moment ago that the applicant signed the agreement, but it seems to be his case that, in fact, he did not sign the agreement at all and that his signature on the agreement is forged.  As late as November 2012, he wrote to the principal at Emmanuel College saying that:

   It has come to my attention that my ex-wife, Alison Schultz, and another person has forged my signature on the initial enrolment form and enrolment agreement contract with your school.  The signature on the documents is not mine and I did not sign it.

7. In the same communication, he then threatens court action within the “next days” to “annul the contract if you are not prepared to cancel the contract that was invalidly formed”.  Although it is not clear, it seems that the applicant persists with that claim despite now telling me that he does not suggest that he did not sign the contract, because he commenced proceedings in the Queensland Civil and Administrative Tribunal some time ago now in which he seeks to be released from his obligations under the contract.  One of the claims that he makes in those proceedings is that the contract is unlawful and is not a binding and valid agreement as it is not signed by him – see the application which is appended to Mr Leo’s affidavit as exhibit GL7.  

8. Assuming for the moment that the applicant abandons his claim that the document is a forgery and that, in fact, he did sign the agreement, it seems to me that the claim that he makes in respect of the contract to have it set aside or a term of it set aside or struck out, pursuant to schedule 2, Part 2-3 of the Competition and Consumer Act2010 cannot succeed.

9. It cannot succeed because the Act does not apply to it. The claims under Part 2-3 of the Australian Consumer Law only apply to contracts to which that legislation applies. As the respondent points out, pursuant to s.8 of schedule 7 of the Trade Practices Amendment (Australian Consumer Law) Act (No. 2) 2010, Part 2-3 of the Australian Consumer Law only applies to:

   a)contracts entered into after 1 January, 2011;

   b)contracts that are renewed after 1 January 2011; or

   c)contracts which have a term which are pre 1 January, 2011 but which are subsequently varied after 1 January, 2011.

10. On any view, the contract in this case was formed as early as February, 2009 and at the latest in April, 2009.  Doing the best for the applicant, perhaps it was as late as when his daughter commenced school in 2010 and her enrolment was fully executed.  But whatever the case might be, the contract was clearly formed before 1 January, 2011. 

11. The applicant attempted to argue that the respondent had sought to vary the original enrolment agreement by introducing a term that it could only be terminated by both he and his wife together.  He argued that he had accepted such a term, because he had taken no action (until these proceedings) to legally protest the respondent’s claims.  Despite the verbal gymnastics in which the applicant engaged in his submissions, in my view he has not accepted the respondent’s position that if the enrolment agreement is to be terminated, it needs to be terminated by both of the parties, that is, the applicant and his wife, acting together.

12. The fact that the respondent might take a position in terms of the interpretation of the contract with which the applicant does not agree does not mean that the respondent is trying to introduce into the contract a new term.  All it means is that it interprets the contract and the obligations and responsibilities created by it in a particular way – which may or may not be accepted by the applicant.  As I was given to remark in the course of submissions, the authorities are many where parties have taken different views about the obligations and responsibilities cast on one another by a contract and it has fallen to a court to determine that one or other of the parties’ interpretations is correct.  It does not amount to an attempt by the respondent to impose a new term.  It is merely the relevant interpretation of an existing contract that is in issue. 

13. The evidence relied upon by the applicant – and this is a summary dismissal application, so I must accept his evidence at its highest – does not suggest that he ever accepted the respondent’s interpretation of the contract (that it must be terminated by both the applicant and his wife together).  Rather all of the litigation (both here and in QCAT) is centred around the notion that he never accepted the term and the attempt by the respondent to impose its will in the way in which he says it has is something to which he has never agreed.

14. The application insofar as the first order sought in the further amended application must be summarily dismissed because the applicant has no reasonable prospects of prosecuting his claim. 

15. The second order sought by him is that the Court strike out or declare void as an unfair contract, pursuant to schedule 2, Part 2-3 of the Competition and Consumer Act the respondent’s policies on communication with separated families.

16. The applicant complains that once he notified the school that he wished to obtain copies of his daughter’s report cards because he and his wife had separated, he was informed of a policy that required him to pay $250 to secure those copies.  He says that is an unfair term of the enrolment agreement.  But on his case, it is not a part of the agreement.  On his case, it was something to which he never agreed and something which was not even alluded to in the enrolment agreement contract.  In respect of the latter matter, he is correct.  Paragraph (a) of the enrolment agreement contract provides:

    I understand that in enrolling my child at Emmanuel College, I have read and am accepting the school rules, policies and procedures of Emmanuel College to apply to my child and to my family (refer to policies listed on the application for enrolment forms).

17. The application for enrolment forms are in evidence.  They are annexed to Mr Leo’s affidavit.  It is accepted, as is evident from the document annexed to Mr Leo’s affidavit, that what is described in these proceedings as the “separated parents’ policy” is not referred to in the application for enrolment.  So, even if the respondent has sought to impose as a binding obligation on the applicant the matters set out in the separated parents policy, the fact, objectively, seems to be that that policy was never referred to by the enrolment agreement contract, nor referred to in the application for enrolment and so could never have formed part of the agreement.

18. It was never suggested by the applicant that he accepted the imposition of the policy.  What he argues is that he had no choice.  But the fact is, according to the policy at least, he did have a choice.  I accept the respondent’s submission that on any view of it, on any interpretation of the policy, it is an offer by the school to a parent to provide information to the parent for a cost.  The parent is not obliged to take up the offer.

19. There is no agreement about the separated parents’ policy and so nothing to attract the operation of Part 2-3 of the Australian Consumer Law. That claim must fail also. There is no reasonable prospect of it succeeding.

20. The next order sought is a declaration that the respondent has engaged and continues to engage in misleading and deceptive conduct, pursuant to schedule 2, Part 2-1 of the Competition and Consumer Act. That claim arises out of an assertion by the applicant, which does not seem to be controverted by the respondents that there are “no hidden costs” or “no hidden fees” to be paid in addition to the fees and costs set out in the respondent’s schedule of fees published by it. The applicant argues that the introduction of the separated parents’ policy and the requirement for some fees to be paid necessarily means that the original representation that there are “no hidden fees” is misleading and deceptive.

21. I am not satisfied that that application is so devoid of prospect as to summarily dismiss it.  It may be that viewed objectively and against the context in which the statement is made one might conclude that it is a statement which is misleading or deceptive or likely to mislead or deceive.  Questions of intent, of course, are irrelevant.  I am not satisfied, therefore, that I ought to summarily dismiss that claim. 

22. The next claim made by the applicant is that he seeks a declaration that the respondent has engaged and continues to engage in unconscionable conduct, for the purposes of schedule 2, Part 2-2 of the Competition and Consumer Act. The unconscionability arises, he says, because he is forced to pay a fee to access his daughter’s report cards and it is a “basic human right” that parents should be able to access their children’s report card.

23. The position of a school where parents have separated is an invidious one.  This court has jurisdiction in family law matters and it is not uncommon to see schools and principals of school drawn into the vortex of what is the conflict between separated parents.  Those that administer schools, as one would imagine, are always keen to avoid being caught up in that type of conflict and schools, from time to time, attempt to introduce polices which are designed to deal as seamlessly as is possible with each of the separated parents.

24. Often it is the case, at least in proceedings in this court, that parents who are in conflict are unable to properly communicate with each other and often it is the case that children’s schools present for them one of the only safe havens that exist in their otherwise conflicted lives.  Schools, therefore, ought to be accorded a measure of respect and any attempt that a school might make to deal with separated parents and the children of separated parents ought not be overzealously scrutinised, it seems to me.  Those that administer schools are in a difficult position.

25. Having said that schools have responsibilities to children and parents and the question that arises in this application is whether the way in which this school has chosen to go about managing those responsibilities might be said to be unconscionable conduct for the purposes of the Australian Consumer Law.

26. The phrase “unconscionable conduct” has a certain meaning at law.  As the respondents point out one of the seminal cases is Blomley v Ryan (1956) 99 CLR 362. Blomley v Ryan has been applied on a number of occasions:  see Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; Louth v Diprose (1992) 175 CLR 621.

27. The principles in Bromley v Ryan are just as good today as they were when the case was decided in 1956. In Bromley v Ryan, the Court pointed out that to succeed on an unconscionability argument, there needs to be some disadvantage or unevenness in the bargaining position of each of the parties. One needs to be able to say that one party has taken an unconscientious advantage of the other or to be able to recognise that one party is at a special disadvantage vis-à-vis the other.

28. None of that is made out in this case, on the applicant’s evidence. He is a separated parent. No doubt that brings with it certain challenges that he has to deal with, but it can hardly be said that he is at a position of special disadvantage and that the respondent has somehow taken advantage, unconscientious advantage of that position. It is, in my view, no case which can engage the relevant principles of unconscionable conduct as set out in the Act.

29. I am not satisfied that there are reasonable prospects of the applicant succeeding in his claim for unconscionability and that claim, too, will be summarily dismissed. 

30. Because I have permitted the claim for misleading and deceptive conduct to proceed, there is some prospect, that the applicant might be awarded some damages.  But to the extent that he suggests that his damages comprise the costs and expenses associated with all of the other proceedings and in particular the Family Law proceedings that he has undertaken until now, it seems to me that his claim will be found wanting because of a lack of causation.  But that will remain to be seen if and when it is tested against the evidence. 

31. The applicant seeks the imposition of a pecuniary or civil penalty on the respondent, but as he conceded during the course of submissions, he cannot succeed in that claim.  It is only the ACCC that can succeed in such a claim and the ACCC is not a party to these proceedings.  That claim, too, will be struck out.

    RECORDED   :   NOT TRANSCRIBED

32. There should be an order for costs.  Costs should follow the event.  There is nothing demonstrated by the submissions which suggests that costs should not follow the event.  This is a costs jurisdiction. 

33. Although the applicant suggested that he might be representing other parents who have children at the respondent’s school, it is not the case that the applicant represents a class.  Indeed, if he was, the proceedings could not be here. 

34. The costs of this application, the application for summary dismissal, should be borne by the applicant because the summary dismissal application has been successful – not entirely successful but mostly successful – and rather than perform fine distinctions between which parts were successful and which parts were not, it seems to me that the summary dismissal application was one which was always going to succeed having regard to the way in which the application was framed.

35. The other thing to say about the costs of the application for summary dismissal and why the applicant should pay all of them is that the claims made in his further amended application which have been left standing, as it were, were claims that were added on 11 April, well after the claim for summary dismissal was filed. 

36. In those circumstances, the order will be that the applicant pay the respondent’s costs of the summary dismissal application.

37. The respondent says that they should be on an indemnity basis, but given that the rules of this court provide for costs to be paid according to schedule 1 of the Federal Magistrates Court’s Rules 2001, now the Federal Circuit Court’s Rules 2001, there is little difference, if any, between costs on a party-and-party basis and costs on an indemnity basis. 

38. I direct that in the event that the parties are not able to reach agreement about the quantum of those costs by the next court date, I will fix them, at that time.

I certify that the preceding thirty-eight (38) paragraphs are a true copy of the reasons for judgment of Judge Jarrett delivered on 15 April, 2013.

Associate: 

Date:  7 May 2013