Whitehead v Strategic Corporate Training Pty Ltd; Strategic Mining Pty Ltd v Qualify Now Pty Ltd

[2011] QCAT 730

CITATION: Whitehead and Anor v Strategic Corporate Training Pty Ltd and Ors; Strategic Mining Pty Ltd v Qualify Now Pty Ltd [2011] QCAT 730

PARTIES:	Karen Anne Whitehead Paul Eric Whitehead (Applicant/Appellant)
v
Strategic Corporate Training Pty Ltd (First Respondent) Strategic Mining Pty Ltd (Second Respondent) Charles Fry & Michelle Maher (Third Respondents)

PARTIES:	Strategic Mining Pty Ltd (Applicant/Appellant)
v
Qualify Now Pty Ltd (Respondent)

APPLICATION NUMBER: MCDO2781-10 / MCDO3533-10

MATTER TYPE: Other minor civil dispute matters

HEARING DATE: 15 April 2011

HEARD AT: Brisbane

DECISION OF: John Bertelsen, Adjudicator

DELIVERED ON: 25 July 2011

DELIVERED AT: Brisbane

ORDERS MADE: 1.    Charles Fry and Michelle Maher pay to Karen Whitehead and Paul Whitehead the sum of $9,684.52.

CATCHWORDS: Minor civil dispute – minor debt – amount claimed for balance of registration of training company – whether proper respondent named – consolidated proceedings

REASONS FOR DECISION

Applications

1. Application 2781 of 2010 was originally filed at Southport on 15 April 2010.  The applicants sought the sum of $10,000 being the balance of monies owed for the registration of Strategic Corporate Training Pty Ltd as a registered training organisation in the state of New South Wales.  The applicants asserted that $20,000 had been paid and $10,000 remained outstanding.

1. The then respondents Charles Fry and Michelle Maher in their response filed 26 May 2010 at Southport asserted that any contract entered into for the establishment of the registered training organisation was as between Strategic Mining Pty Ltd, a company within the Strategic Corporate Training Group and Qualify Now Pty Ltd, the applicant’s company.  A mediation was conducted on 20 July 2010 without success.  The application firstly came on for hearing at Coolangatta on 2 September 2010 on which date the application was adjourned to 16 September 2010.  Prior to 16 September 2010 the then respondents Charles Fry and Michelle Maher filed an amended response to the application, that response attaching invoices which they asserted was evidence of a contract as between Strategic Mining Pty Ltd and Qualify Now Pty Ltd.  When the application again came before the Tribunal on 16 September 2010 the Tribunal ordered that the application be adjourned to a date for hearing.  It was further ordered that notices be issued to both parties.  It was further noted by the Tribunal that the “matter be listed for at least half a day”.

1. The application was subsequently set down for hearing at Brisbane on 28 October 2010 and allocated Brisbane minor civil dispute case number 2781/10.  On 28 October 2010 the Tribunal at Brisbane ordered that Strategic Mining Pty Ltd be joined as a respondent to the application along with Strategic Corporate Training Pty Ltd to the effect that the first respondent to the application would thereafter be Strategic Corporate Training Pty Ltd, the second respondent, Strategic Mining Pty Ltd and the third respondents Charles Fry and Michelle Maher.  Further orders were made such that all parties were to be in receipt of material filed to that point.  The application was subsequently set down for hearing on 17 December 2010.  On 8 December 2010 a response attaching a chronology was filed by Strategic Mining Pty Ltd. 

1. That same day an application for minor civil dispute – consumer dispute was filed by Strategic Mining Pty Ltd against Qualify Now Pty Ltd as respondent, Brisbane file number 3533/10.  On 17 December 2010 file numbers 2781/10 and 3533/10 were consolidated for the purpose of hearing.  The Tribunal ordered that the response to application 3533/10 be filed and served on all other parties and that any further evidence and material in response to any further evidence filed by any other party be filed and served within 35 days.

1. On 7 January 2011 Qualify Now Pty Ltd as respondent filed its response.  Additional evidence was filed in affidavit form by Strategic Mining Pty Ltd on 20 January 2011.  A statement by Karen and Paul Whitehead annexing a statement was filed on 25 February 2011. 

1. The consolidated applications were to come before the Tribunal on 8 April 2011 but in the event final hearing of the applications took place on 15 April 2011.

Background and evidence

1. In December 2007 a meeting took place between Charles Fry and Michelle Maher, Karen Whitehead and Paul Whitehead at Main Beach, Queensland.  The purpose of the meeting was the establishment of a registered training organisation in New South Wales and more specifically in the coal mining and coal operations areas.  Subsequently in January 2008 a further meeting took place at Southport, Queensland between Charles Fry, Karen Whitehead and Paul Whitehead.  A fee of $30,000 for establishment of the registered training organisation was agreed as between the parties.  The agreement reached was totally oral.  There was no evidence that at the time Charles Fry and Michelle Maher were representing Strategic Mining Pty Ltd nor that Karen Whitehead and Paul Whitehead were representing Qualify Now Pty Ltd.  All that is certain is that Strategic Corporate Training Pty Ltd was the entity which would in due course be the registered training organisation.

1. According to Messrs Fry & Maher, Messrs Whitehead represented that registration of the RTO would be effected by July 2008.  Messrs Whitehead for their part asserted that it was only ever the case that the application would be lodged by July 2008; that it was never possible to give a definite time frame for registration of a registered training organisation (RTO); that RTO registration in NSW and Victoria in particular took at least 12-15 months; that the timing of registration of any RTO was in the hands of the Vocational Education and Training Accreditation Board (VETAB) (NSW). 

1. In March 2008 an online application was submitted to VETAB.  As of June 2008 Paul Whitehead informs Charles Fry of details required in respect of stage 2 of the registration process.  By email of 25 August 2008 Charles Fry enquires of Paul Whitehead as to progress of the VETAB application stating that he is missing out on substantial business opportunities.

1. By email of 8 October 2008 Karen Whitehead forwards to Charles Fry an invoice from KPI Insync Pty Ltd directed to Strategic Mining Pty Ltd for the sum of $16,500.  That invoice is for 50% of consultancy fees in respect of RTO registration.  The invoice states that the application has been completed and lodged with VETAB.  The same day 8 October 2008, Charles Fry emails Karen Whitehead indicating that the invoice as such was not a problem but stating that he noticed there was no ABN and requesting the reissue of an invoice with an ABN to satisfy “our accounts department”. 

1. The following day, 9 October 2008, Karen Whitehead emails to Charles Fry another invoice this time from Qualify Now Pty Ltd directed to Strategic Mining Pty Ltd for the same sum of $16,500 this invoice in fact quoting an ABN.  Payment of that invoice is made directly to the personal account of Paul and Karen Whitehead at Suncorp Southport, Queensland.  The Whiteheads asserted that the invoice was only issued firstly in the name of KPI Insync Pty Ltd and then Qualify Now to Strategic Mining Pty Ltd at the request of Charles Fry who required an invoice from a GST compliant entity to his own GST compliant entity for GST compliant purposes.  Messrs Whitehead did not have an ABN.

1. Subsequently on 27 November 2008, Charles Fry emails Linda Cheung of NSW Department of Education and Training confirming Paul Whitehead’s resignation as CEO of Strategic Corporate Training Pty Ltd and further confirming Paul Whitehead’s appointment by him as director of Studies for Strategic Corporate Training Pty Ltd.  Charles Fry also confirms that Authority has been given to Paul Whitehead to act on his behalf with respect to the application for registration of the training organisation.  On 16 December 2008 Charles Fry emails Paul Whitehead enquiring as to the standing of the RTO application. 

1. On 25 February 2009 Charles Fry emails Paul Whitehead detailing his thoughts on how the application may be accelerated.  In that email he makes the comment “it is very clear that VETAB is incompetent and is purposely delaying our application.  We have to play by their rules just at the moment, we’ve gone too far now to rock the boat, if we do it may impact negatively on us.  If our application is delayed any further past this point I will demand a meeting with the Minister for Education …”  This view sits alongside the excerpt from the Australian Newspaper dated April 2007 forwarded by Charles Fry to Messrs Whitehead and which criticises the delay and what it concludes is the ongoing incompetence of the VETAB regime in NSW.

1. The compliance order report of 12 February 2009 discloses a number of matters that require attention and or rectification prior to the application proceeding any further.  VETAB confirms that a final resubmission is required to correct the issues raised in the report.  On 14 April 2009 Paul Whitehead presents resubmission documentation to VETAB for review. 

1. By letter dated 13 May 2009 VETAB informs Charles Fry that it intends to refuse Strategic Corporate Training’s application for registration as an RTO.  By email of 13 May 2009, Charles Fry complains to Karen Whitehead regarding the refusal of the application for registration.  Charles Fry states that he is upset and distressed by the outcome and its effect on the viability of his business.  He indicates that it appears that there is only one last chance to salvage the application.

1. On 9 June 2009 a meeting attended by Charles Fry, Paul Whitehead and Karen Whitehead and Margaret Willis, Director of VETAB in Sydney was held to discuss the refusal of the application.  After some further meetings a final resubmission was made to VETAB apparently some time in July 2009 with Karen Whitehead emailing VETAB in early to mid August 2009 requesting an indication of the status of the application.  After a turn around period of some weeks on the part of VETAB registration of the RTO is issued by VETAB for qualifications in units of competency on 9 September 2009. 

1. On 10 September 2009 Karen Whitehead emails Charles Fry enquiring as to whether he is “interested in sharing an office midway Brisbane Gold Coast for the next year”. She floats the idea of doing some courses on a share arrangement. By email of 10 September 2009, Charles Fry replies to Karen Whitehead to the effect that he is definitely interested in doing some courses on the Gold Coast in TAA and OHS either on a share arrangement or partnership arrangement with Karen Whitehead. Charles Fry inquires as to whether Australian College of Training and Employment (ACTE) would be interested in a partnership agreement with him.

1. On 19 September 2009 an invoice from Qualify Now Pty Ltd is delivered to Strategic Mining Pty Ltd for the balance of consultancy fees of $15,000 together with GST of $1,500 a total of $16,500.  Some days later Lauren Hoswell administration controller of Strategic Corporate Training Pty Ltd requests Karen Whitehead to burn all the material that was sent to VETAB on to a disk and post to her for comparison with her versions of documents held.  Karen Whitehead asserted that all the material requested was sent by email to Lauren Hoswell; that additionally a full copy of materials was given to Charles Fry on a USB.  Karen Whitehead asserted that in any event VETAB would have returned all material submitted directly to the applicant Strategic Corporate Training Pty Ltd.

1. By email of 27 November 2009 Karen Whitehead requests Michelle Maher to arrange payment of outstanding invoice.  Karen Whitehead refers to pressure from Prime an entity with which she was associated.  Because Karen and Paul Whitehead were kept on Prime’s payroll during part of the time they were expending their energies on the RTO registration, Prime were not surprisingly asking for the payment back of wages paid to Karen and Paul Whitehead during that time. 

1. By further email from Michelle Maher to Karen Whitehead of 11 December 2009 Michelle Maher confirms a transfer of $1,000 to Messrs Whitehead’s bank account stating that she would be able to assess a further payment prior to Christmas.  Michelle Maher states further that “we are waiting on some payments due to ourselves so when they come through we will be able to pay a further instalment to you.”  She then asked for confirmation of the Whiteheads’ bank account details.  On 14 December 2009 a direct credit of $1,000 is made to Karen and Paul Whitehead’s personal Suncorp bank account.  By email of 23 February 2010 from Charles Fry to Paul Whitehead, Charles Fry confirms the account will be honoured and that significant payment was anticipated to be made within a fortnight.

1. On 4 March 2010 a further $4,000 is remitted to the Whiteheads’ Suncorp account.

1. On 25 March 2010, according to the chronology of events by Strategic Mining Pty Ltd it determines that documentation produced by Qualify Now Pty Ltd in respect of the RTO application is substandard and inconsistent and decides that numerous operational documents and training material have to be redeveloped.  It is not apparent nor is any reason given as to why or how after such a lengthy application process documentation submitted to and effectively approved by VETAB would be in any manner substandard or inconsistent. 

1. On 12 April 2010 Paul Whitehead makes demand for payment of the balance of $10,000 owing for the establishment of the RTO. 

1. The company Qualify Now Pty Ltd was originally incorporated as Talget Pty Ltd.  A name change took place in April 2008.  According to Karen Whitehead the company Qualify Now Pty Ltd could not have contracted with Charles Fry, Michelle Maher or Strategic Mining Pty Ltd for the reason that there was no such company by the name of Qualify Now Pty Ltd in December 2007.  In December 2007 Talget Pty Ltd was a shell company having sold the business Australian College of Training and Employment (ACTE) to Prime Learning.  The buyer wished only to buy the business of Talget Pty Ltd not the company itself.  Therefore Talget was left as a shell company, an inert non trading entity.  It did not have a bank account. 

1. Certain of the evidence placed before the Tribunal by Karen and Paul Whitehead is undisputed.  Firstly, shortly after Strategic Corporate Training Pty Ltd was registered as an RTO in NSW in September 2009 Charles Fry as CEO of Strategic Corporate Training Pty Ltd provided a reference for Karen Whitehead.  At paragraph 4 of that reference he states as follows, “Karen has assisted our organisation in our successful application to become an RTO in NSW (8 qualifications) through her position as our Compliance Officer.”

1. The reference goes on to state that “Karen has the ability to see the overall picture of an organisation compliance and ability to comply.  I have personally witnessed this in our own application to become an RTO within NSW in dealing with VETAB and the issues which arose with our application”.  He goes on to state that “Karen has high moral and ethical standards which to the best of my knowledge have never been compromised.  Highly dependable and reliable to get the job done in the best interest of all parties.”  Secondly the appointment of Paul Whitehead as Director of Studies for Strategic Corporate Training Pty Ltd in November 2008.  Thirdly the payments of $16,500, $1,000 and $4,000 as part payments in the context of apparent dissatisfaction on the part of Charles Fry and or Michelle Maher.  Fourthly the email of 23 February 2010 from Charles Fry to Paul Whitehead referring initially to significant financial losses over the previous 12 months due to the economy and the longer than expected delays in the RTO application with VETAB and then expressing an intention to meet all current liabilities within the next few months.  Amongst other things he then states that “we anticipate that we will be able to make significant payment towards our account over the next fortnight or earlier.”  Fifthly the email from Michelle Maher to Karen Whitehead of 14 April 2010 states, amongst other things, that “we were dismayed at the fact that you then informed us the RTO application work (which was originally agreed upon between ourselves to be personally undertaken by Paul and Karen Whitehead) was to go through ACTE and its associated company”.  Whilst there was an allegation that confidential information had been disclosed to ACTE in the course of the RTO application there was no evidence that the RTO application itself was submitted through ACTE.  However, Michelle Maher’s assertion here is that the RTO application work was to be personally undertaken by Paul and Karen Whitehead and not by any other entity as alleged by Charles Fry and Michelle Maher later.  Sixthly the first real attack on the Whiteheads’ handling of the RTO application process is only made in the email of 14 April 2010, some 7 months after registration of the RTO and in direct contrast to the email of 15 September 2009 from Charles Fry to Paul Whitehead expressing obvious satisfaction with the outcome and talking of a future with the Whiteheads in Queensland.  The email of 14 April 2010 expresses an historical dissatisfaction going back to the very beginning of the RTO registration process.  Whist emails on the part of either or both of Charles Fry and Michelle Maher during the course of the registration process at times expressed concern and frustration with the length of time the application process was taking there were no allegations during the course of the registration process of unprofessionalism or mismanagement.  It is only some 7 months after registration that such allegations begin to be made.  That same email refers at paragraph 3 to Messrs Whitehead’s assurance that RTO status would be obtained by December 2008 not July 2008 as alleged by Charles Fry and Michelle Maher elsewhere.

1. During the course of the hearing Charles Fry and Michelle Maher alleged that Messrs Whitehead had compromised their position by bringing to the knowledge of ACTE that there was an application on foot by Strategic Corporate Training Pty Ltd.  Karen Whitehead asserted that Charles Fry used training and assessment materials, the property of ACTE for the purpose of delivery; that Charles Fry through Strategic Mining Pty Ltd was in partnership for ACTE for this purpose.  Whatever the case, no evidence was produced to the Tribunal that if there was an alleged breach of privacy in the circumstances that it in any event had any detrimental effect on Strategic Corporate Training Pty Ltd or Strategic Mining Pty Ltd. 

Conclusions on evidence

1. There was no evidence produced to the Tribunal that Charles Fry and Michelle Maher were representing Strategic Mining Pty Ltd or were dealing with any persons or entity other than Karen Whitehead and Paul Whitehead personally.  The contract sum of $30,000 was never disputed nor were the payments of $16,500, $1,000 and $4,000 leaving a balance then payable of $8,500.

1. The company, Qualify Now Ptd Ltd, did not exist by that nomination in December 07/January 08.  There was no evidence that Charles Fry or Michelle Maher were ever aware of the company then registered as Talget Pty Ltd.  Email evidence suggesting that the RTO registration was to be handled personally was placed before the Tribunal (email 14 April 2010 in particular) and not disputed. 

1. The company Qualify Now Pty Ltd does not appear anywhere in a chronology of events between the parties until October 2008 as a reissue of an invoice firstly issued by KPI Insync Pty Ltd to Strategic Mining Pty Ltd.  All part payments have been made directly to the Whiteheads’ personal bank account. 

1. There was no evidence of any renegotiation of the initial oral agreement which could lead to the conclusion that the parties at some later date became Strategic Mining Pty Ltd and Qualify Now Pty Ltd.

1. Allegations of unprofessionalism or mismanagement are not made until 14 April 2010 against a chronological background of cooperative satisfaction and a willingness to do business in the future not to mention the high regard in which Karen Whitehead was held in terms of Charles Fry’s reference.  In these circumstances such allegations are disingenuous and smack of a latter day attempt to go over old ground in a retrospectively complaining manner.  That simply does not accord with the virtually complete absence of any such complaints at the time.  The Tribunal is satisfied that all materials submitted to VETAB have been returned to Charles Fry and or Michelle Maher.

1. The affidavit and material filed by Charles Fry and Michelle Maher on behalf of Strategic Mining Pty Ltd talk of losses sustained by Strategic Mining Pty Ltd.  These losses and the sums of money attributed to them are simply numbers on paper and unsupported.  In any event the alleged losses of some $350,000 are not pursued in the context of the claim by Strategic Mining Pty Ltd which is for a refund of $15,000 and relief from payment of $10,000.  Simply because business opportunities arose during the course of the RTO registration process that does not mean that any lost opportunity is consequentially the fault of the applicants.  In view of these conclusions both claims fail.

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

1. Interest on the sum of $8,500 is allowed at 10% for the period 1 January 2010 to 15 April 2011, a period of 470 days at 10% per annum equating to $1,094.52 which together with the Tribunal’s filing fee of $90 is a total of $9,684.52.

Order

1. Charles Fry and Michelle Maher pay to Karen Whitehead and Paul Whitehead the sum of $9,684.52.