Stephens v Australasian Beauty Therapy Academy Pty Ltd (Appeal) - [2015] ACAT 80

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

STEPHENS v AUSTRALASIAN BEAUTY THERAPY ACADEMY PTY LTD (Appeal) [2015] ACAT 80

AA 15/12 (XD 14/703)
Catchwords: APPEAL – contract dispute – contract for provision of training in beauty therapy and related fields – costs

Legislation cited: ACT Civil and Administrative Tribunal Act 2008 ss 26, 48, 48(2)(b), 79, 82

Cases cited: House v R (1936) 55 CLR 499

Tribunal: Mr C.G Chenoweth – Acting Presidential Member

Date of Orders: 4 December 2015
Date of Reasons for Decision: 4 December 2015

ACT CIVIL & ADMINISTRATIVE TRIBUNAL AA 15/12 (XD 14/703)

BETWEEN:
CHANTEL THERESE STEPHENS
Appellant

AND:
AUSTRALASIAN BEAUTY
THERAPY ACADEMY LTD
Respondent

TRIBUNAL: Mr C. G. Chenoweth – Acting Presidential Member

DATE:4 December 2015
ORDER

The Tribunal Orders that:
1.The application for appeal is dismissed.
2.The application for costs by the respondent is dismissed.

………………………………..
Mr C.G. Chenoweth
Acting Presidential Member

REASONS FOR DECISION

Introduction

This is an appeal pursuant to section 79(3) of the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act). That subsection provides that after a matter has been heard and determined, a party to the original application may, by application, appeal the decision of the tribunal on the question of fact or law.
The appeal is against a decision of Presidential Member Symons sitting at first instance, in matter number XD 14/703. That was an application by the appellant as the original applicant, claiming damages for breach or repudiation of a contract entered into between the appellant and the respondent. That contract was for the provision of training in beauty therapy and related fields. In these reasons, Presidential Member Symons is referred to as ‘the member’.
After hearing the matter, the member dismissed the application. The appellant has now exercised her right to appeal to the appeal division of the tribunal.
At the original hearing, there was a substantial volume of documentary evidence constituted by a folder constituting a statement of agreed facts and evidence. In addition, the appellant and the director of the respondent, Ms Gan, both gave evidence and were cross-examined. Both parties were represented by legal practitioners in experienced firms, and the transcript does not indicate that there was any objection to the way in which the member conducted the hearing. The member produced a substantial set of written reasons, traversing the documentary and oral evidence and referring to a number of authorities applicable to the issues raised in the hearing.
When the matter first came before me for directions on the appeal, the appellant appeared personally. I pointed out that the provisions of section 79(3) of the ACAT Act required that the appellant should clarify in her appeal document what questions of fact or law were the subject of the appeal.
I also pointed out that an appeal hearing was not just a rehearing of the matter because one party was unhappy with the decision below, but that the appellant was required to identify matters of fact or law which were in a relevant sense errors in the process of reaching a decision, and which would lead an appeal tribunal to the conclusion that there had been error in the conduct of the proceedings below that would justify the decision being overturned, or a failure of those proceedings such as would warrant the whole matter being re-heard.
I also indicated that having regard to the way in which the hearing was conducted by the member, I proposed to exercise my discretion under section 82 of the ACAT Act not to deal with the matter as a new application, but as a review of the existing decision. Leave was given to the appellant to re-file her appeal notice, having regard to these comments.
I also gave leave to the appellant to file the document comprising the standards for registered training organisations, and this was done.
The appellant did not file a formal notice of appeal, but on 7 May 2015 filed an amended statement of facts issues and contentions. That document, while not in formal fashion, set out the matters which the appellant submitted were errors of fact or law, and the reasons for that view based on the evidence and the transcript in the hearing below. This document is referred to as ‘the appeal notice’. When the matter was heard, both parties accepted that the appeal notice adequately set out the matters the subject of the appeal.

The grounds of appeal

The appeal notice is not easy to summarise. Paragraph 9 contended that the decision was not fair or just, that the tribunal failed to afford procedural fairness in making the decision, that the tribunal failed to properly inform itself and/or take into account the complex regulatory background governing the contract and variations to the contract, and that the tribunal made errors of fact and errors of law which were detailed in the appeal notice. There then followed a number of points contending that there were errors of fact in the decision. These are set out in detail later in these reasons. The claimed errors of fact are set out in paragraphs 10 to 69 of the appeal notice.
The errors of law contended for in paragraphs 70 – 76 of the appeal notice alleged both a denial of procedural fairness and a failure to consider relevant information. In addition to the points set out in the appeal notice, it was contended at the hearing before me that the member had been acting in a way that may have constituted apprehended bias.
Paragraphs 77 to 127 of the appeal notice set out additional evidence that the appellant wished the tribunal to consider. In summary, this referred to some personal issues that the appellant had, and the regulatory framework within which occupational courses are provided in Australia. Paragraph 128 of the appeal notice contended that the appellant be issued with a new academic transcript, that the original decision be set aside and that the appellant be awarded the sum of $5,069 plus interest plus costs.

Errors of law

The appellant’s representative submitted that the member’s conduct indicated an apprehension of bias in the hearing, on the basis that she had formed a fixed view and she was not open to be persuaded on the basis of any other evidence that might have been provided. This submission was based on the views that the member expressed in the hearing about the facts surrounding the sending of the letter on 29 June 2011 from the director of the respondent to the appellant. It was put that the member had been not open to persuasion about that letter. Further, the appellants submitted that the letter had not been sent on the date that it was dated, but had been backdated.
No evidence was produced to support this submission of backdating. An allegation of this nature would have had to have been put to the director of the respondent, Ms Gan. This was not done, and it would be a breach of fairness to allow the suggestion to be made now in an appeal without evidence to support it, and without the respondent being given the opportunity to reply.
It is clear from the transcript that the member in coming to her conclusion placed considerable reliance on the letter and the failure of the appellant to respond to it. The member was entitled to do so, and her evaluation of this piece of evidence in a manner that was adverse to the appellant cannot possibly be considered to be bias on the part of the tribunal. As I reminded the representative of the appellant, an allegation of bias against the tribunal member is not one to be made lightly, and carries with it the burden of providing substantial evidence to support it. None was provided in this case.
The argument that there had been a denial of procedural fairness and that this constituted an error of law is set out in paragraphs 70 – 73 of the appeal notice. As noted before, both parties in the original hearing were represented by legal practitioners. Neither of them contended during the hearing that there had been a denial of procedural fairness.
The material put forward by the appellant to support the argument of a denial of procedural fairness refers in paragraph 73 to comments made in the course of the hearing by the member about the evidence given by the appellant for her failure to pay fees so that she could complete the course, and about the member’s analysis of the credibility of the witnesses. Where there was a conflict between the oral evidence of the witnesses, the member indicated that she preferred the evidence of Ms Gan. It was also submitted that the comments made by the member about the actions of the appellant, and encouraging the prospect of further talks between the parties to see if they could resolve the matter indicated that the member had already made up her mind.
Having carefully considered the transcript of the original hearing and the submissions made by the appellant’s representative, I am satisfied that there is no substance in this submission. It is part of a member’s role to indicate to parties in a hearing where matters need amplification, or are causing concern which may lead to a particular conclusion. Further, it is a time-honoured role of the tribunal and entirely consistent with its objectives to remind parties that they can settle the matter separately from the hearing. This is particularly appropriate where some of the evidence may have been heard, and the parties need to re-evaluate their position.
It cannot be a ground of criticism that a preference by the member for the evidence of one party over another constitutes an error of law. It is the role of the member hearing the case to evaluate the oral evidence, including the body language and reactions of the witness. It is for this reason that there is a strong line of authority from the High Court (In House v R (1936) 55 CLR 499 at 505) indicating that an appeal tribunal should not overturn findings of credibility in relation to witnesses, where the appeal tribunal has not had the benefit of observing them in the witness box. To quote the judgement:
It is not enough that the Judges comprising the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that there has been some error in exercising their discretion.
An appeal tribunal may take the step of overturning a finding below that is based on credibility where the evidence of the witnesses cannot support the findings ultimately arrived at, but that is a very different matter to an assessment of credibility between two witnesses whose evidence varies significantly, as was the case here. This is a classic case where the rule in House should be followed.
The third heading of alleged error of law set out in paragraphs 74 – 76 contended that the tribunal should have taken account and informed itself about the regulatory and legislative framework surrounding the provision of the training program by the respondent.
While section 26 of the ACAT Act allows the tribunal to inform itself in any way it considers appropriate, this is not an obligation imposed on the tribunal to make separate investigations to cover deficiencies in cases submitted by parties to a hearing. Indeed, were it to do so and then fail to reconvene to explain what information the tribunal may have found and invite the parties to comment on it, this may itself be an error of law.
As pointed out above, both parties in the hearing below were represented by competent legal practitioners, there was a substantial body of agreed material submitted to the tribunal, there was all proper opportunity given to the parties to make submissions that they wanted, and there is no basis for an argument that the failure by the tribunal to undertake some sort of investigation (which was not requested and the terms of which were not suggested at the original hearing) constitutes an error of law.
For these reasons, the claimed errors of law do not arise and the appeal fails in respect of those grounds.

Errors of Fact

The appellant summarised the errors of fact as follows:
These claimed errors include but are not limited to certain findings with respect to the contract, the Respondent’s policies and procedures, loss or damage to the Applicant, and the credibility of the Applicant.” (paragraph 11 of the notice of appeal.)
The errors were then subdivided into seven separate subheadings, with specific detail in relation to each.
The Nature of the Contract Errors (paragraphs 12 – 17)
The appellant contended that the description of the course into which the appellant enrolled in July 2010 was incorrectly described in the decision as a ‘Diploma in Beauty Therapy’. The correct description was ‘Certificate Four in Beauty Therapy’. The appellant argued that the course code was misdescribed in the decision, as evidenced in the extract from the report of the Registered Training Organisation and the respondent's enrolment confirmation letter.
It is not every minor misdescription of the course, or misdescription of a fact, which if enshrined in a decision warrants the overturning of the decision on the basis of an appealable error of fact. The error must be a real and substantial one going to the heart of the argument between the parties – in this case the contractual arrangements between them and the question of whether the appellant was able or prepared to pay for the courses that she had undertaken. The decision under review is concerned with the issue of whether there was a contractual obligation to pay, and the rights of the respondent to terminate because of the failure of the appellant. A misdescription of a course number or name has no bearing on this issue. Such a misdescription cannot constitute a basis for overturning the decision.
The Potential Adverse Consequences Error (paragraphs 18 – 21)
Prior to commencing her course, the appellant was given a copy of the respondent’s student policies and procedures handbook. This set out a procedure in relation to continuing enrolment, late payments, non-academic complaints and appeals, and inactive students. The appellant had acknowledged at the hearing below that she had read this handbook and understood that she was bound by it.
The appellant is a woman who has had professional training in accountancy and held a responsible position in that area. Bearing in mind the number of times that she had discussed the question of fees with the respondent’s director, and the concern that the respondent had expressed about the failure to pay fees for ongoing study, it is hardly credible that the appellant did not recall the provisions of the handbook, and was not conscious of the fact that if she did not pay the fees she would not be able to continue her course. The whole of the agreement underpinning the contract was the payment of fees in return for the tuition and study courses being made available by the respondent.
It is clear from the transcript that the appellant recognised that if she was unable to continue making the payments, the respondent would be entitled to discontinue its agreement to provide study opportunities. The member concluded that it was not necessary or incumbent on the respondent to repeat this information every time. Having regard to the usual practice between knowledgeable contracting parties, this must be correct. There is no error of fact in this point.
The Respondent’s Intention Error (paragraphs 22 to 29)
The basis of this claimed error of fact arose from the wish of the appellant to have the opportunity to undertake an international examination conducted by a body overseas. In order to undertake that examination, the appellant had to pay substantial fees. If the respondent arranged for examiners to come from overseas to conduct the examination, the respondent would be liable to pay the costs.
The evidence shows that the respondent was unwilling to commit to arranging the examination unless it was satisfied that the appellant had both the intention and the means to pay the fees necessary to sit for the examination. Evidence by both parties was given about discussions held on the question of whether the appellant could raise the money. The member was satisfied on the basis of the material before her that, (bearing in mind the commercial risks to the respondent of engaging the international examiner without being quite satisfied that the appellant would pay the fees), the cancellation of the examination by the respondent was not a circumstance which indicated an intention not to be bound by the agreement. It was the way in which the respondent could minimise loss to the company in the event that the appellant failed to make payment, in spite of her representations. Again, this is an assessment of conflicting evidence that it was open to the member to determine.
The Recoverable Loss or Damage Error (paragraphs 30 to 50)
This alleged error of fact was based on the finding of the member that the appellant had not shown any recoverable loss or damage from the wrongful act of the respondent and had not taken reasonable steps to mitigate or avoid her loss.
The particulars in the paragraphs set out history of the appellant in the previous careers in the public service, the amounts that she had paid, the fact that she had not achieved the certificates of successful completion that she sought and that she had paid a substantial amount of money for these. The appellant also asserted that the upgrading of the courses that the appellant had undertaken was at the urging of the respondent, with the implication that the appellant was not responsible for this. The appellant noted that she had paid a total of $14,860 in tuition fees and student kits, and that she had failed to receive the benefit of the award of the relevant qualification.
The appellant asserted that she had taken reasonable steps to mitigate any loss, by communicating with the respondent about the course, and by contacting a number of organisations for assistance. She also noted that she had sought to resolve the matter by negotiation and by investigating alternative training providers which might help her to complete her qualification.
At the heart of this claimed error of fact is the finding by the member in paragraphs 45 and 65 of the decision that it was the appellant who had discontinued her course, and had failed to take steps open to her to pay the money that she had contracted to pay in order that she could continue her course. This again is a finding of fact on the evidence, and the evidence clearly supported the conclusion that the member had come to. It is not an error of fact – it is a conclusion on the evidence which was open to the member.
It should also be noted that while the appellant set out in paragraph 50 the steps that she had taken to try and resolve the matter, if those steps are unsuccessful, then the matter must be determined on the basis of the evidence as to what happened in the forming, carrying out and terminating of the contract. While the tribunal is always prepared to allow parties time to try and resolve an issue by negotiation, if this cannot happen then the matter must proceed to a hearing on the evidence. This is what happened in this case.
The Course Upgrade Decision Error (paragraphs 51 – 57)
The appellant argued that the relationship between the respondent and the appellant was not one of equal power, and the respondent had the authority to either accept or reject upgrades of courses. While the respondent may have encouraged the appellant to undertake further courses, it was the appellant herself who committed to doing them. Without her agreement, there could have been no upgrading. This is justified by the finding of the member in the decision that it was the responsibility of the appellant in agreeing to upgrade the courses to be able to pay in accordance with agreed arrangements.

There is no substance in this point. The parties were dealing equally as contracting parties. The fact that the appellant was anxious to complete the course, (and no doubt the respondent was equally anxious to obtain the fees and provide a qualification to a satisfied student) is to express no more than a fact that arose from the contract itself. It cannot be regarded as an error of fact in coming to the decision.
The Failure to Draw a Loan Error (paragraphs 58 – 62)
In these paragraphs the appellant contends that the inference drawn by the member in the decision that the respondent’s only reasonable action when the appellant failed to pay the $1,000 fee for the examination was to not confirm the examination constitutes an error of fact. The appellant acknowledges that she agreed to pay the fee, but did not do so. As indicated earlier, it was entirely understandable that the respondent was not prepared to risk a further failure to make payment of money in circumstances where the respondent would be liable to pay an international examiner. The member was satisfied on the evidence that the failure to actually pay the money was evidence of an incapacity or unwillingness to comply with this contractual condition. It is a conclusion drawn from the evidence, not an error. There is no substance in this point.
The Applicant Credibility Error (paragraphs 63 – 69)
These paragraphs contended that the member had made an error of fact in assessing the credibility of the appellant, and drawing conclusions that were adverse to her. The member noted in her decision that where there was a conflict of evidence between that of the appellant and the respondent, she preferred the evidence of the respondent. She also noted that she was not satisfied with the frankness of the evidence given by the appellant, and that she had failed to provide answers to questions which were significant ones in the conduct of the case. This is the classic role of a court or tribunal determining a conflicted issue between witnesses, and the member was entitled on the evidence before her to draw those conclusions as to which of the witnesses she considered more credible.
Paragraph 69 asserted that the appellant was not cross-examined or re-examined in relation to her conduct during a particular meeting. It was always open to her counsel to examine her on this point and to re-examine following cross examination. This is not a failure by the member, if failure it was. It was a matter for the way in which the appellant’s representative chose to present the case.
Having regard to all these matters, I am satisfied that there is no appealable error of fact in the decision given by the member. Accordingly, this appeal must be dismissed all grounds.

Additional Evidence (paragraphs 77 to 127)

The appellant sought to introduce additional evidence about the appellants ‘work’ for the respondent, the appellant’s health concerns, and the respondent’s regulatory obligations under the legislation governing training programs. The appeal notice set out in paragraphs 78 and 79, the issue that the appellant had provided income for the respondent by carrying out services for paying clients. This issue is just not relevant to the issue of a breach of contract and the responsibility for that breach.
The notice also set out particulars relating to medical issues that the appellant had suffered. While this is of concern, it was not raised in the hearing below. Its relevance could only be that the conduct of the respondent was such that the appellant was forced to break the contract, or that in some way the respondent’s conduct constituted a repudiation of an implied term of the agreement. No such argument was put to the original tribunal, let alone evidence to support it. It cannot be introduced on an appeal hearing.
Paragraph 75 to 127 dealt at some length with the regulatory framework that governs the provision of training programs in vocational education. It was asserted that the details of courses provided by the respondent were incorrect, and that certain misrepresentations had been made. Whatever the accuracy of these assertions, the matters were not raised in the hearing below and it is difficult to see what relevance they had to the central issue in the case, which was the failure by the appellant to continue to make payments to enable her to continue her courses. However those courses were described, and whether they were correctly described or not, is a matter that the appellant would or should have known about at the time she was engaging in the course, and she could have made up her own mind as to whether she continued with the courses, however described.
The appellant asserted in paragraphs 108 to 116 that the respondent was not an approved training provider for overseas students. Bearing in mind that the appellant is a local student, it is difficult to see what relevance this has to the central issue in the case.
Paragraphs 117 to 127 set out alleged failures or breaches by the respondent of the legislation governing vocational education and training. Whether or not there was a breach of the act and standards (as to which there was no evidence) again it is simply not relevant to the contractual issues upon which this case was originally instituted and argued.

Costs

The respondent sought an order for costs under section 48(2)(b) of the ACAT Act. That section allows the tribunal to order costs in a proceeding in certain limited situations. The basis of the application was that there was additional material put by the appellant in the appeal beyond what had been argued in the hearing below, and that this had led to significant costs in responding.
Section 48(1) of the ACAT Act provides that the parties to an application (which must include an appeal) must bear their own costs “unless this act otherwise provides or the tribunal otherwise orders.”
Subsection (2) sets out situations in which the tribunal may make an order for costs. Paragraph (a) is not relevant. Paragraph (b) deals with the issue of a party causing unreasonable delay or obstruction during the course of the application. Paragraph (c) deals with a party contravening an order of the tribunal resulting in the other party being put to additional costs. Paragraph (d) is limited specifically to applications under specified legislation, which does not include the matters the subject of the hearing.
I am not satisfied that there should be an order for costs in this matter. None of the grounds in subsection (2) apply, and it is a regrettable consequence of the right of appeal that additional matters may be raised that a respondent has to give consideration to. This does not necessarily give rise to an order for costs.
The appeal of the appellant, and the application for costs by the respondent, are both dismissed.

………………………………..
Mr C. G Chenoweth
Acting Presidential Member

HEARING DETAILS

FILE NUMBER:	AA 15/12
PARTIES, APPLICANT:	Chantal Therese Stephens
PARTIES, RESPONDENT:	Australasian Beauty Therapy Academy Pty Ltd
SOLICITORS FOR APPLICANT	Ms A Ballard, Women’s Legal Centre
SOLICITORS FOR RESPONDENT	Mr I Meagher, Bradley Allen Love
TRIBUNAL MEMBERS:	Mr C Chenoweth – Acting Presidential Member
DATES OF HEARING:	25 May 2015