Barrett v A.P.V.C. Ltd Responsible Entity for Accor Vacation Club [2024] QCATA 119

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Barrett v A.P.V.C. Ltd Responsible Entity for Accor Vacation Club [2024] QCATA 119 PARTIES: ELIZABETH CLAIRE BARRETT (applicant/appellant) BARRY DOUGLAS BARRETT (applicant/appellant) v A.P.V.C. LTD RESPONSIBLE ENTITY FOR ACCOR VACATION CLUB ARSN 094 718108 (respondent) APPLICATION NO/S: APL315-21 ORIGINATING APPLICATION NO/S: MCDO 00911-20 MATTER TYPE: Appeals DELIVERED ON: 5 November 2024 HEARING DATE: 11 September 2024 HEARD AT: Brisbane DECISION OF: Member Richard Oliver ORDERS: Leave to appeal is refused. CATCHWORDS: APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – RIGHT OF APPEAL – JURISDICTION – LEAVE TO APPEAL – MANAGED INVESTMENT SCHEME – where applicants purchased a financial product being an interest in the respondent’s managed investment scheme – where the scheme offered participants in the scheme points to be utilised for accommodation at the respondent’s holiday hotels/resorts – where points allocated annually on payment of annual fee – where applicants unable to utilise points since purchase because of personal circumstances – whether misrepresentation about the use of the product – whether product fit for the purpose – whether failure of consideration. JURISDICTION – MINOR CIVIL DISPUTE – CONSUMER CLAIM – MANAGED INVESTMENT SCHEME – where respondent marketed a financial product being and interest in a management investment scheme – where purchase of the product entitled the applicants to membership of the respondent – whether a consumer claim between a consumer and a trader – whether membership -- 1 of 11 -- 2 constituted a service provided by the respondent – whether the respondent a trader within the definition of minor civil dispute in schedule 3 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) Australian Securities and Investments Commission Act 2001 (Cth) Corporations Act 2001 (Cth), s 9 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 142(3)(a)(i), schedule 3 Baltic Shipping Co v Dillon (1993) 176 CLR 344 Barrett v A.P.V.C. Ltd responsible entity for Accor Vacation Club MCDT911/20 Burke v Wyndham Vacation Resorts South Pacific Limited & Ors [2015] QCAT 458 Fox v Percy (2003) 214 CLR 118 Rintoul v State of Queensland & Ors [2018] QCA 20 Ritson v RCL Cruises [2018] QCATA 79 Terera & Anor v Clifford [2017] QCA 181 APPEARANCES & REPRESENTATION: Applicant: Self-represented Respondent: Self-represented by Ms Norburn REASONS FOR DECISION Introduction [1] Mr and Mrs Barrett, who I shall refer to as the applicants for ease of reference, have had an unfortunate experience in purchasing a membership in the Accor Vacation Club, which they did on 31 July 2014. On joining, Club points are allocated to members with additional points allocated each year upon payment of the yearly subscription fee. The main benefit of joining the Club was to take advantage of discounted accommodation using the points allocated, as Club currency, at various holiday destinations, both in Australia and overseas. They had a particular interest in holidaying at a resort on the Sunshine Coast during the Christmas period with family.1 [2] Not having had any success with booking their desired accommodation nearly six years later, in January 2020, they sought to terminate the membership and get a refund of the membership fee. The respondent refused to refund the membership fee but instead would allow them to, effectively, surrender their membership without penalty. The membership required them to pay an annual fee for a number of years whereby further points would be allocated for their use. 1 The learned adjudicator (as she then was) provided written reasons to the parties on 10 August 2021: Barrett v A.P.V.C. Ltd responsible entity for Accor Vacation Club MCDT911/20 but these have not been formally published as yet. -- 2 of 11 -- 3 [3] The applicants then commenced a proceeding in the minor civil disputes jurisdiction of the Tribunal claiming, inter alia, they were misled in buying the membership and there was a failure of consideration. After a hearing of the application, and reserving her decision, the learned adjudicator, as she then was, dismissed the applicants’ claim. [4] This is an appeal from that decision. Further background [5] The applicants found that the booking of accommodation at peak times is very competitive. Advanced bookings can only be made, at the earliest, 12 months before the desired date.2 This means for a particularly popular destination or resort, such as the applicants wanted to book, one had to be online from midnight when bookings opened, to compete for the booking date with other members of the Club. [6] Despite attempts subsequent to the purchase of their membership, the applicants were not successful in being able to utilise their membership for the particular accommodation they preferred. Their personal circumstances also changed with ill health, mobility issues and concerns about terrorism overseas. They were not prepared to use overseas accommodation, where it was available, particularly in New Zealand. Then of course further restrictions were imposed during the Covid 19 pandemic.3 However this only became an issue after their first written complaint. [7] As they had become very disillusioned with the product they had purchased, they raised a complaint in writing with the respondent on 30 January 2020. In the complaint the applicants relevantly contended: the membership should never have been sold to them because of their age and inexperience in travel; all attempts to use the membership have failed; there has been a failure of consideration and the only fair and equitable outcome is termination of the membership with a full refund. In other words the purchase of the membership was based on a misrepresentation giving them a right to unilaterally terminate the agreement. [8] Following the complaint there is a series of correspondence in which the respondent rejected any notion of misrepresentation. There was no provision in the contract for a refund and nor would one be forthcoming. However, the respondent offered to assist the applicants in utilising their membership and points. The only other option was to cancel the membership and lose their original investment. [9] The applicants maintained their position that the contract was void, or voidable, and given there was no prospect of a refund advised the respondent they would take recovery action. The minor civil dispute application [10] On 24 July 2020 the applicants commenced a proceeding in the Tribunal’s minor civil dispute jurisdiction claiming a refund of the cost of the membership in the sum of $25,000.00.4 The applicants have attached a “statement of claim” to the application which effectively records the history of their attendance at the presentation at the Twin Waters Resort on the Sunshine Coast. The presentation provided details of how the Vacation Club scheme worked and how the applicants could benefit from 2 This depended on the category of membership. 3 Reasons [23(h)]. 4 The limit of QCAT’s jurisdiction in minor civil disputes. -- 3 of 11 -- 4 membership. The applicants contend that the presentation was, in effect, over- simplified and did not fully explain some of the difficulties that might be experienced when trying to book accommodation. [11] They further allege they were induced to enter into contract on the basis the process for utilising points was simple and well within the capabilities of the applicants when it was not. Further the product was not fit for the purpose because of the way it has to be accessed and further there has been a total failure of consideration. There was then reference to the correspondence between the parties which provided further particulars of the applicants’ claim. [12] The application came on for hearing before a Tribunal adjudicator. She prepared comprehensive written reasons for dismissing the application. The principal ground for dismissal was that the claim in the application did not fall within the definition of “minor civil dispute” in schedule 3 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’). The claim is based on the contract entered into between the applicants and the respondent. By reference to schedule 3, a minor civil dispute means: A claim arising out of a contract between a consumer and trader, or a contract between 2 or more traders…. [13] For the dispute to be justiciable in the Tribunal it must be between a “consumer” and a “trader”. It is self-evident from the undisputed facts that this transaction did not involve goods therefore subsection (b) of the definition is applicable to a consumer: [14] A ”trader” under the definition in schedule 3: means a person who in trade or commerce— (i) carries on a business of supplying goods or providing services, or (ii) regularly holds himself, herself or itself out as ready to supply goods or to provide services of a similar nature… [15] Having considered these definitions and applied them to the facts the learned adjudicator said at [27]: The applicants did not purchase a service in trade or commerce, but, rather, invested in a financial product or service, namely, an interest in a managed investment scheme regulated under the Australian Securities and Investments Commission Act 2001 (Cth) [‘ASIC Act’]… [16] She then went on to consider the various consumer protection provisions included in the ASIC Act but concluded that jurisdiction is not conferred on the Tribunal to determine any consumer disputes that might arise under that Act in relation to a managed investment scheme. [17] Even though she concluded the Tribunal did not have jurisdiction to decide the dispute, she did go on to consider the other contentions put forward by the applicants or which emerged from the material and submissions. Purchasing the membership [18] In her reasons, the learned adjudicator went into some detail as to the history of the purchase of the membership. She recorded that prior to buying the membership the applicants consulted with an authorised representative of the respondent who -- 4 of 11 -- 5 explained in detail how the membership worked. The applicants, themselves, completed a “Holiday Planner” which provided information about the reasons they were interested in the membership which included: their holiday plans for the “next few years”; where they intended to travel, including overseas destinations; estimated costs savings; what they were looking forward to from the membership. [19] The applicants were given further documentation including: the cooling off statement; the product disclosure statement (‘PDS’); financial services guide; and a statement of advice (‘SOA’). Having regard to the applicants’ aspirations as set out in the Holiday Planner, they decided to purchase the Platinum 5 level membership for a cost of $29,250. [20] Before signing the Membership Agreement, the applicants executed an acknowledgement that they had read and agreed to be bound by the product disclosure statement. There is no suggestion they did not understand the content of the PDS nor that there was any undue influence exerted by the respondent’s representatives in having the applicants sign any of the documents. [21] From their willingness to engage with this whole process, and the way in which the application and the statement of claim were prepared, it is reasonable to infer that the applicants are not unsophisticated in commercial affairs. [22] All of the documents referred to above were filed in the proceeding below, as well as emails of the complaint by the applicants. The respondents also filed similar material. [23] In oral submissions and evidence at the hearing Mr Barrett effectively confirmed what was in the written material and also that soon after purchase there were changes in their circumstances.5 These related to health, mobility and their concerns about terrorism, all of which arose after taking up the membership.6 [24] When the respondent’s representative contacted Mr Barrett on many occasions to assist with using the points, complaints were made about the scheme, in particular in 2018 and 2019.7 It was not until 30 January 2020 that a formal complaint was made in writing. Contractual issues [25] The first was whether the contract was supported by consideration. The applicants have not really utilised the points gained through membership for the reasons set out above. However, the learned adjudicator found that does not mean that there has been no consideration moving from the respondent. The membership provided opportunities, and in fact points were used for a weekend at the Gold Coast and a voucher was used by the applicants for a seven-day holiday in Fiji. The use of the benefits under the scheme was really a matter for the applicants. [26] Once the applicants executed the agreement and paid the membership, and annual subscriptions, they did obtain some limited benefit, the learned adjudicator found. I would observe there is no basis to disturb this finding. [27] Turning then to the breach of contract by the respondent’s misrepresenting how the scheme worked, and failing to make accommodation as promised, the Tribunal found 5 Transcript pages 3 & 4. 6 Ibid page 6 line 20. 7 Ibid page 23. -- 5 of 11 -- 6 that it was difficult to see how there was fault on the part of the respondent. Full disclosure as to how the scheme operated is set out in the PDS and other documents given to the respondents. The evidence established that the membership was not used, not because of any failure on the part of the respondent to comply with the terms of the agreement, or the representations, but because of the applicants’ changed circumstances and their inability to get specific accommodation at a specific time. There was also a reluctance to travel overseas, and despite assistance provided by the respondent to help them use their accumulated points, they did not take up that offer.8 The learned adjudicator said: In short, it appears to be the applicants’ change of circumstances, and change of attitude towards travel, both arising after the SOA was given, that prevented them from using their membership rather than any act or omission on the part of the respondent. In those circumstances, there is no basis for a finding that the respondent failed to exercise due care and skill in making its recommendations to the applicants. [28] For these reasons the application was dismissed both on the basis that the Tribunal did not have jurisdiction to determine the applicants’ claim and also there was no other basis upon which the applicants could succeed against the respondent under the contract. The Appeal [29] Subsequently, on 15 November 2021 the applicants filed an application for leave to appeal or appeal. The grounds of appeal include both questions of law and fact. Firstly, it would seem that the applicants contend that they were denied procedural fairness because the jurisdictional question about whether the transaction fell within the definition of minor civil dispute, as it was not raised at the hearing. They submit that if it was to be an issue they were prepared to argue the point and would have relied on decisions in the Tribunal, and some case law, to support their contention that the respondent falls within the definition of trader under the QCAT Act. I would observe from reading the transcript that the issue was not directly raised at the hearing but in the end it is a question of law which the learned adjudicator was required to consider in coming to her decision. [30] Secondly, there is a complaint that the tribunal had regard to what is referred to as “without prejudice correspondence” which involved negotiations between the applicant and the respondent prior to the commencement of the minor civil dispute proceeding. [31] The applicants accept that because this is an appeal from a decision in the minor civil disputes jurisdiction leave to appeal is necessary under section 142(3)(a)(i) of the QCAT Act, an appeal may be made only if the party has obtained leave of the Appeal Tribunal. Leave to appeal (or permission) will usually only be granted where there is a reasonable argument the decision was attended by error, or that an appeal is necessary to correct the substantial injustice caused by the error.9 Further in Rintoul v State of Queensland & Ors [2018] QCA 20 at [10] the Court of Appeal reiterated the general principles: 8 Reasons at [45]. 9 Terera & Anor v Clifford [2017] QCA 181. -- 6 of 11 -- 7 The principles governing a grant of leave to appeal are well-established. In short, an applicant for leave to appeal must show: (a) the appeal is necessary to correct a substantial injustice; (b) there is a reasonable argument that there is an error to be corrected. There must be reasonable prospects of success to warrant a grant of leave. Therefore, in deciding whether to grant leave to appeal the Court usually makes some preliminary assessment of the prospects of the proposed appeal. Membership of the scheme [32] The purpose of the PDS is to provide details about how the membership of the scheme works. It is lengthy and informative. As to the interest held in the scheme it informs at 1.1 that: By securing tomorrow's holiday destination at today's prices, thousands of families have access to wonderful holiday destinations for a fraction of the cost of owning a holiday home. In addition, members receive a beneficial interest in the ACCOR Vacation Clubs net assets including Club Property. [33] Further in the PDA at paragraph 1.6 it states that: As a member you are conferred a beneficial interest in Club Property in the same proportion as your Premier Points bear to the Total Premiere Points at any given time. The level of Membership you have will dictate how many Premier Points you are entitled to. You are beneficially entitled to a proportion of Club Property but not to any particular Club Apartment. For more detail, see Section 8. [34] There are various categories of membership ranging from Bronze through to Platinum, then Traveller and Corporate, which is the highest. Each category is allocated a specific number of annual points and further points on payment of the annual subscription fee. Bronze, being the lowest, is allocated 2,300 points and Corporate is allocated 20,000 points. [35] It is not disputed that the membership is an investment in a management investment scheme. Under s 9 of the Corporations Act 2001 (Cth), a “managed investment scheme” means: (a) A scheme that has the following features: (i) people contribute money or money's worth as consideration to acquire rights (interests) to benefits produced by the scheme (whether the rights are actual, perspective or contingent and whether they are enforceable or not); (ii) any of the contributions are to be pooled, or used in a common enterprise, to produce financial benefits, or benefits consisting of rights or interests in property, for the people (the members) who hold interests in the scheme (weather as contributors to the scheme or as people who have acquired interests from holders); (iii) The members do not have die to die control over the operation of the scheme (whether or not they have the right to be consulted or give directions) or (b) A time-sharing scheme... -- 7 of 11 -- 8 [36] The reference to “right” in (a)(i) above includes interest, which is defined in s 9 as: (a) interest in relation to land includes: (i) a legal or equitable estate or interest in the land; or (ii) a right, power or privilege over, or in relation to, the land; and (b) interest in a managed investment scheme (including a notified foreign passport fund) means a right to benefits produced by the scheme (whether the right is actual, prospective or contingent and whether it is enforceable or not)… [37] Therefore the membership conferred on the applicants the rights to benefits, interests, produced by the investment scheme, being the access to accommodation provided by the respondent. Nowhere in the definition section or Part 5C of the Corporations Act 2001 (Cth) is there any reference to membership being equated to a service provided by the responsible entity. Do the rights to membership benefits constitute a service [38] However, for completeness it is appropriate to consider whether membership does fall within the definition of a service by reference to schedule 3 of the QCAT Act. The provision of the service in this case must be by a trader.10 The business carried on by the respondent is the marketing of membership in an investment scheme, and not the provision of a service, even though a service is provided once the investment in the scheme, membership, is purchased. [39] Some assistance in deciding whether the applicants are being provided with a service can be gained by reference to the definition11 of “trader” in subsection (a). A trader is a person who supplies goods or provides services, and also a person who holds itself out as ready to supply goods or provide services of a similar nature.12 In this context it is reasonable to conclude that by reference to the words “services of a similar nature”, the legislature must have intended that the services provided are similar to the supply of goods. [40] Applying that analysis, the membership purchased by the applicants is clearly not a “good”, nor is any service provided by the respondent resulting from membership of a similar nature to supplying goods. Also, it is difficult to see how any “goods” could ever be supplied by the provision of the service of supplying the investment product which constitutes membership. [41] It is evident from the PDS that services are supplied as part of the membership once purchased. That is because to use the points allocated the respondent provides a service to assist members in booking accommodation and obtaining other benefits. [42] That is referred to in section 3 of the PDS where it sets out how to utilise accumulated points. For example to book Club Apartments a member contacts “Member Services” on various telephone numbers, within Australia or New Zealand and elsewhere. Section 3 also sets out the various rules applicable to the booking of apartments and 10 There is no dispute the applicants are consumers within the definition. 11 QCAT Act Schedule 3 (‘trader’). 12 My emphasis. -- 8 of 11 -- 9 the Club’s association with other affiliated organisations, such as Interval International Member Services. [43] Once a membership package is purchased, points can only be utilised by the ongoing service provided by the Club to book accommodation. That provision of a service is also demonstrated by the Club’s intervention with the applicants to assist them in using their points. The whole purpose of buying a membership, being a beneficial interest in the Club property, as it is promoted, would be worthless without the accommodation services provided by the respondent. [44] Therefore, on purchasing membership in the investment scheme one also has the benefit of the services provided by membership. [45] The difficulty in trying to include the respondent in the definition of “trader” based on the provision of services, is that it necessarily ignores the fact that the services can only be accessed after first purchasing the membership. It is the investment in the scheme, or purchase of membership, which confers the benefits of membership in the particular category referred to in the PDS. [46] For these reasons I have concluded the learned adjudicator was correct in her conclusion that the applicant’s claim did not fall within the definition of a minor civil dispute under schedule 3 of the QCAT Act. Denial of procedural fairness [47] I have already acknowledged that the issue of jurisdiction was not directly raised in the material or at the hearing. The applicants submit they were ready to meet the challenge if it was an issue by reference to previous decisions of the Tribunal and case law generally. In my view they get little comfort from the cases they relied upon. [48] Ritson v RCL Cruises [2018] QCATA 79 was about a fare-paying passenger on a cruise ship complaining about excessive noise from an adjoining cabin. In that case the learned member found at [81] that the supply of services extended to the provision of adequate vacation accommodation on the cruise ship. This case is clearly distinguishable from the provision of a financial product in an investment scheme. [49] Burke v Wyndham Vacation Resorts South Pacific Limited & Ors [2015] QCAT 458 did involve a similar membership scheme to the scheme under consideration here. In that case investors were issued with “vacation credits”. The dispute in that case related to a representation made by a representative of the respondent that if the applicant purchased a particular membership, Diamond, he would receive a My241 Certificate. This certificate would enable him to obtain a significant discount for a second person booking a cruise. The cost would be reduced to $2,500 plus port costs etc. The respondent denied the representation, principally on the basis that the sales person had no authority to make the representation and other grounds. [50] The contest between the parties was whether the representation was made and if so whether the respondent was bound by it. The Tribunal, constituted by a Magistrate, made a decision based on a credit finding in favour of the applicant supported by email correspondence between the parties that he representation was made and relied upon. The issue of jurisdiction was not canvassed by the parties or considered by the Magistrate in the judgment. The applicants might get some comfort from the fact that the Tribunal went ahead and heard the matter but that is as far as it goes. -- 9 of 11 -- 10 [51] Reliance is also place on Baltic Shipping Co v Dillon (1993) 176 CLR 344, a case on damages for breach of contract. A fare-paying passenger on a cruise ship sought to recover the cost of a cruise on the basis that the ship sank midway through the cruise. The issue in that case was whether there was a failure of consideration because the passenger did not get the benefit of the whole cruise. The passenger was refunded the fare for that part of the cruise which was abandoned, but the High Court held that she had the benefit of the cruise up to the time she abandoned ship, therefore there was not a total failure of consideration. The case is unhelpful on the jurisdictional question to be decided here. [52] I was unable, in my own researches, to find any similar case or cases where an investment product of this type was found to be the provision of a service. [53] Even though the jurisdictional point was not raised or argued below, given the conclusion reached both here and below, I am not satisfied that there has been a denial of procedural fairness. Privileged documents [54] The learned member gave thorough consideration to the doctrine of privilege in her reasons at [19]. She was clearly correct in that the documents did not attract privilege and in any event, they were or little evidentiary benefit. I certainly agree with the latter observation. They did nothing more than record the complaint and the respondent’s answer to that compliant. There was no prejudice to the applicants by having regard to these documents. There is no error of law here. Conclusion [55] First and foremost I have come to the conclusion that in the circumstances of this case the Tribunal did not have jurisdiction to adjudicate on the applicants’ dispute because their cause of action did not fall within the definition of minor civil dispute in schedule 3 of the QCAT Act, for the reasons given above. [56] Secondly, and alternatively, they have not demonstrated that the learned adjudicator’s findings of fact with respect to the questions of failure of consideration, misleading and deceptive conduct or misrepresentation were not open on the evidence before her. In fact, I would go so far as to say that the applicants entered into the contract with the respondent with full knowledge of how the scheme operated as disclosed in the product disclosure statement. Also, they acknowledged in writing they understood the content of the product disclosure statement. They had the opportunity to not proceed in the cooling off period but chose not to. Although not particularly relevant, if they were misled or taken advantage of, it is unlikely they would have waited six years before taking some decisive action about it. [57] Finally, there is no reason to disturb the findings that it was the change in the applicants’ personal circumstances that gave rise to their complaints, rather than anything done by the respondent in marketing the product. [58] There is no error of law in respect of the jurisdictional question. The findings of fact were open on the evidence before the Tribunal below13 and therefore there is no basis to disturb those findings of fact. There is no basis to grant leave to appeal. 13 Fox v Percy (2003) 214 CLR 118 -- 10 of 11 -- 11 [59] Leave to appeal is refused. -- 11 of 11 --