Carmichael v South East Queensland Paint Horse Club Inc [2018] QCATA 13

CITATION: Carmichael v South East Queensland Paint Horse Club Inc [2018] QCATA 13 PARTIES: MELISSA CARMICHAEL (Applicant/Appellant) v SOUTH EAST QUEENSLAND PAINT HORSE CLUB INC (Respondent) APPLICATION NUMBER: APL395-16 MATTER TYPE: Appeals HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Justice Carmody DELIVERED ON: 30 January 2018 DELIVERED AT: Brisbane ORDERS MADE: THE APPEAL TRIBUNAL ORDERS THAT: 1. Leave to appeal is granted. 2. The appeal is allowed. 3. The tribunal order in Nambour Minor Civil Dispute MCDO19/16 dated 15 August 2016 is set aside and in substitution the respondent is ordered to pay the applicant $450.00 within 14 days. CATCHWORDS: APPEAL – LEAVE TO APPEAL – where the respondent club promotes the breeding of and interest in a breed of horses – where the applicant performed work coordinating horse show nominations for an annual club event – where the applicant’s claim for fees for running the show was dismissed by the tribunal for want of proof – where an ‘informal’ offer was made to set off the applicant’s own horse nominations against her invoice for services – where the club rules prohibit the authorisation of expenditure without management -- 1 of 8 -- 2 committee approval – where the applicant was sent an email and invoice from the club treasurer explicitly releasing her from her liability to pay her own show nominations in consideration for an implied promise not to enforce her own invoices for services – where the treasurer had ostensible authority to bind the club to such an agreement Associations Incorporation Act 1981 (Qld) s 60(2) Queensland Civil and Administrative Tribunal Act 2009 (Qld) 4(a), 11, 12(1), 13(1) Grant v John Grant & Sons Pty Ltd (1954) 91 CLR 112 Heaton v AXA Equity and Law Life Assurance Society Plc [2002] 2 AC 329 McDermott v Black (1940) 63 CLR 161 Wigan v Edwards (1973) 1 ALR 497; 47 ALJR 586 APPEARANCES and REPRESENTATION (if any): This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act). REASONS FOR DECISION [1] The applicant’s minor civil claim of $450 in service fees for running the respondent club’s 40th anniversary annual show in 2015 was dismissed by the tribunal for want of proof. [2] The proposed appeal is based on alleged legal error in (a) wrongly finding that the club treasurer cannot enter into binding agreements on behalf of the association without the management committee’s prior approval and (b) failing to find that there was a “clear acceptance” by the respondent “of … legal responsibility to pay” in an email sent on 19 August 2015. [3] The association concedes that the applicant had a general conversation with Ms Maxine Albury (treasurer) and Ms Nicole (Nikki) Broom (immediate former president) on 25 July 2015 but disagrees that there was any agreement prior to the work being performed by the applicant “to officially reward the applicant for her contribution”. [4] It says that the application for leave to appeal is untenable because it relies on a misinterpretation of “… section 60(2) of the Associations Incorporations Act, and wrongly assumes, contrary to s 60(1) and Rule 28(7), that any -- 2 of 8 -- 3 member of the management committee can act autonomously in making a decision on behalf of a club without the decision being approved or ratified”. [5] From the respondent’s perspective the applicant is trying to charge for her services as show secretary contrary to the club expenditure protocols despite having promised before the event to provide them gratis. It also points out that the nomination fee component of the club invoice was only $150 with the balance being for stabling and merchandise which even on the applicant’s case were not included. The context [6] The respondent is an incorporated sporting club for breeding, promoting interest in and showing a breed of horses. [7] Its business and operations are controlled by a management committee which conducts a show, or Paintorama, annually over six days in July. [8] Every member of the management committee acting for the association is deemed to be its agent for all business and operational purposes within its objects.1 [9] The club rules require all expenditures to be approved or ratified at a committee meeting.2 [10] Rule 28(7) states: All expenditure shall be approved or ratified at a Management Committee meeting. [11] The applicant is a member of the club and took on the job of show secretary in 2013. One of her key functions in that role was to ensure that nomination fees were paid by competitors before the show because non-payment leaves the club without proper insurance cover. [12] Traditionally, show secretary is a voluntary position but a special resolution was passed at a general meeting in early 2014 to pay the applicant $75 per day for her time.3 [13] The minutes of the 26 February 2015 meeting of the committee record that following a discussion about the legal liability issues involved in using paid workers instead of volunteers at shows the applicant: … informed the Club that this year she would not be charging for her time as she also has horses competing at the Show. (emphasis added) [14] The applicant’s understanding was that entry fees for any horses she exhibited would be waived in lieu of any remuneration for the time she spent on show matters. The current president doubts this because the club has 1 Associations Incorporation Act 1981 (Qld) s 60(2). 2 Rule 28(7). 3 Statement of Courtney Wittaker, filed 11 August 2017. -- 3 of 8 -- 4 a standing rule against the show secretary exhibiting “their own horse/s at a show where they are in control … and have contact with the judge/s” but no one is recorded in the minutes as raising the point at the time. Be that as it may, nothing was said about this at the management committee meeting and the application is not dependent on a common intention evidenced in the minutes of the 26 February 2015 committee meeting to waive nomination fees if she ran the 2015 show. [15] About a week before the show the applicant found out (she says for the first time) about the policy against the show secretary showing horses and decided to pay someone else to do it for her. [16] The applicant’s horse won prize money but its nomination fee was not paid beforehand. [17] The club treasurer, Maxine Albury, recalls having a conversation with the applicant and immediate past-president Nikki Broom on 25 July 2015 after the closure of the show. She acknowledges that some mention was made of what a good job the applicant had done in the running of the office for the show and that “maybe the club should look at paying her something” (at least her nominations) but denies that the comment was made as a committee member. [18] Nikki Broom states: … with the understanding that she was short of funds and due to the perception that she had worked hard on behalf of the club Maxine and myself voiced our opinion that the club should pay her show nominations. This was a personal opinion on our part and not a committee decision and could not have been taken as an executive decision. [19] Neither of these recollections was challenged by the applicant at the hearing. [20] The applicant invoiced the club for $450 for running the 2015 show at the 11 August 2015 committee meeting. [21] On 19 August 2015 Ms Albury acknowledged receipt of the applicant’s invoice and billed her $455 for “state show entries, stabling and 3 x anniversary key rings” but stated, in an accompanying email, that as the amounts of the rival invoices “… are similar in value it is deemed that no further action is required”. [22] The applicant’s invoice was considered at a committee meeting on 29 August 2015 and “was voted on in the negative”. [23] At the same meeting the committee appointed an external auditor to reconcile the accounts for the show at a meeting on 29 August 2015 because of “… the lack of proper financial accountability that has been the sole lacking of (the applicant)”. -- 4 of 8 -- 5 [24] The club president wrote to the applicant on 13 September 2015 advising her that the management committee had decided to conduct a special audit to resolve nomination fee anomalies attributed to her inefficiency. [25] The applicant was also informed that: … the email forwarded by Maxine Albury with regards her invoice and nominations does not stand and that the amount of $455 … is payable immediately. [26] The association maintains that Ms Albury was merely trying her best to resolve the audit issues of unpaid show fees when she “took it upon herself, without correct procedure, to expedite the applicants continued requests for payment of her invoice” but “was defective” in her actions as she did not have the authority of the management committee at that time to enter into any arrangements with the applicant as the accounts had not been previously ratified or approved by management committee in accordance with the rules. [27] The letter went on to say said that the issue of her own outstanding invoice for her show services will be addressed by the committee after the financial audit report was considered and taking into account the 26 February 2015 meeting minutes “in which you stated you would not be charging … for this …”. [28] The applicant replied on 5 October 2015 as follows: With reference to the dispute regarding my invoice of $450 to the club for my time given to act as show secretary for the 2015 Paintorama and 2015 Queensland State Shows. I did initially, 6 months previously in February, state that as I was not working I did not require payment for this service. By the time of the show I was working and had to make a week off from my employment. I was then verbally advised to submit an invoice for my time. This I did at the meeting of the 11th August 2015. As my show nominations were of approximately the same amount I was informed by email on the 19th August 2015 from the treasurer of the club (attached) that they would consider the amounts to cancel each other out and I was not required to make any further payments. Please also note that this was not a personal email from Maxine Albury but was signed Treasurer. This email was cc’d to: President – Nicole Broom, Secretary – Linda Hicks, and Club Manager – Shirley Sommer. So all were aware as of the 19th August 2015, at the latest, of this action. I am sure that if this action was not acceptable then those management committee members and the club member would have raised their objection at the time. I now find that in your letter received by me on the 28th September 2015 you now advise that this decision was not agreed to by the management committee. Other support workers were either paid or were involved in a barter transaction. This was not an uncommon or one-off “payment of the consideration” or barter transaction by the club which negated the need for any funds to be transferred between any two entities. I am now advising you that after this initial response letter no further action on my part and no further communication with the South East Queensland Paint Ports Club Inc. or its management committee members will be entered into whilst a dispute action and investigation of club practices is pending. -- 5 of 8 -- 6 [29] The applicant has since paid the $455 owing to the club. The tribunal proceedings [30] The applicant filed the minor debt claim on 29 June 2016. [31] The tribunal has jurisdiction to hear and decide such a claim4 and in resolving it must make orders it considers fair and equitable to the parties but may dismiss the application if it is considered appropriate to do so.5 [32] In her supporting statement dated 15 August 2016 the applicant asserts that she “worked in the show secretary’s office at the show venue from 6 am to 10 pm every day from Monday 20th July 2015 until Sunday 25th July 2015” for the financial benefit of the club and the added prestige of national recognition, was told by the president and the treasurer at the close of the show that she had done a good job and relied on a verbal contract for payment of her services on 25 July 2015 as well as the mutual set off by the treasurer, as agent for the club, as evidenced in the 19 August 2015 invoice. [33] At T 1-8:25 the applicant told the tribunal that: … I put my invoice in so that the two amounts (for her services and entry nominations) would cancel each other out. That was done at the suggestion of another committee member so that there was a paper trail. [34] As to the verbal “agreement” the tribunal found that while informal discussions had taken place clubs are bound by rules for financial reasons “and one of them is that parties cannot enter into agreements on behalf of the association without the matter first being ratified … at a meeting” and since there is no evidence of such a meeting the verbal agreement on 25 July 2015 is “null and void”. 6 [35] The tribunal’s characterisation of the discussion as “informal” implies a finding that there was no binding ‘verbal agreement’ concluded on the 25 July 2015 but even if anything was said that had the effect of accepting liability for payment of the applicant’s invoice the tribunal went on to find that Ms Broom and Ms Albury were acting personally not purporting to act on behalf of the club. Even if they were they had no authority and could not bind the club. [36] In any case, although it was not raised as a defence under ordinary contract principles past consideration is no consideration at all. Voluntary work cannot be unilaterally converted into paid employment after it has been performed irrespective how well it was done, or what financial or other benefits the club might have derived from it. [37] The tribunal did not analyse whether the club through the management committee at the 26 February 2015 meeting agreed or was obliged to forgo 4 QCAT Act ss 4(a), 11, 12(1). 5 QCAT Act s 13(1). 6 T 1-9:15-40. -- 6 of 8 -- 7 the applicant’s nomination fees as a condition for her show secretary services. Nor did it consider the legal effect of the compromise action taken by the treasurer on 19 August 2015 and whether the parties’ invoices legally cancelled each other out as a result. [38] Both of these failures are errors of law but the applicant does not take issue with the dismissal of her claim to the extent that it was based on either a common understanding with the management committee reflected in the minutes of the 26 February 2015 meeting or on a verbal agreement on 25 July 2015 in her conversations with Ms Broom and Ms Albury. What she takes issue with is the tribunal’s finding that any agreement would have been ‘null and void’ because it was not authorised or ratified by the management committee as required by Rule 28(7) because by implication it would also apply to defeat the treasurer’s 19 August 2015 email. The leave requirement [39] The functional purpose of QCAT appeals is to correct demonstrated error in a tribunal decision which if allowed to stand would be substantially unjust to the applicant. [40] Leave to appeal is the mechanism used for ensuring that the finite judicial and administrative resources are not wasted on unmeritorious cases. Thus, it is usually granted only where the proposed grounds of appeal have reasonably good prospects of success. [41] This means that the onus is on the applicant to show that it is open to the appeal tribunal to conclude that the tribunal’s order dismissing her minor civil dispute was not “appropriate”7 because it was made in error. [42] The first question concerns Ms Albury’s authority. The tribunal found, in effect, that without prior approval or later ratification committee members did not have legal authority to bind the club. There is arguably tension between s 60(2) of the Associations Incorporation Act 1981 (Qld) and Rule 28(7). On one interpretation all members of the management committee, including the treasurer, are deemed agents of the club when conducting any business within its objects. On another, expenditures incurred by a committee members involving “expenditures” in transacting club business even as a deemed agent are only provisional pending approval or ratification at a meeting. [43] However, clubs cannot make internal financial management and expenditure rules affecting third parties in commercial dealing or with the effect of displacing statutes or general principles regulating contract liability or the law of agency in favour of their own. Ms Albury had the ostensible authority to make enforceable unconditional business promises on its behalf and the club cannot now disavow them as irregular just because she broke a club rule in doing so. The rule about expenditures being ratified before they are valid is not enforceable outside the club. The fact that the applicant 7 See QCAT Act s 13(1). -- 7 of 8 -- 8 was also a member of the club subject to the rules is immaterial in this context. [44] The second issue concerns the legal consequence of the treasurer’s actions. [45] It seems to me that Ms Albury released the applicant from her liability to pay the club’s $455 invoice by expressly accepting hers for $450 in full and final satisfaction.8 Consideration for the release was provided by the applicant’s implied promise not to enforce her own invoice. [46] All the law requires for compromise to be enforceable is that a claim, though disputed, was a genuine one9 and intention that the release is to settle rival accounts.10 There is no suggestion that the applicant’s tax invoice is not a genuine demand even if the management committee says her work was not up to scratch and it included charges for stabling and promotional items in addition to nomination fees. Given that Ms Albury was party to the 25 July 2015 conversation in which the applicant says she was encouraged to send a bill, the treasurer clearly intended a mutual set off of both accounts. [47] Holding the club to the treasurer’s release of the applicant from her liability for the club’s invoice (and in circumstances where the applicant has upheld her end of the bargain, albeit, in the management committee’s view, unsatisfactorily), is, in my opinion, a fair and equitable resolution of the dispute.11 [48] Accordingly, leave to appeal is granted and the appeal is allowed. [49] The tribunal order in Nambour Minor Civil Dispute MCDO19/16 dated 15 August 2016 is set aside and in substitution the respondent is ordered to pay the applicant $450.00 within 14 days. 8 cf McDermott v Black (1940) 63 CLR 161, 183-5 (Dixon J). 9 Wigan v Edwards (1973) 1 ALR 497; 47 ALJR 586. 10 Heaton v AXA Equity and Law Life Assurance Society Plc [2002] 2 AC 329; Grant v John Grant & Sons Pty Ltd (1954) 91 CLR 112, 123-5. 11 QCAT Act s 13(1). -- 8 of 8 --