Baker v Venzin Danielli Pty Ltd [2011] QCAT 286

CITATION: Baker v Venzin Danielli Pty Ltd [2011] QCAT 286 PARTIES: Helen Baker v Venzin Danielli Pty Ltd (trading as „Vendan Events‟) APPLICATION NUMBERS: MCDO3412-10 MATTER TYPE: Other minor civil dispute matters HEARING DATE: 9 May & 7 June 2011 HEARD AT: Brisbane DECISION OF: Andrew McLean Williams, Member DELIVERED ON: 10 June 2011 DELIVERED AT: Brisbane ORDERS MADE: The Respondent pay to the Applicant the sum of $7,648.25 within twenty-eight (28) days. CATCHWORDS: Minor Debt – Applicant seeks refund of course fees for business self-development program mid-way through program after refusing to further participate due to poor quality of program Contractual term requiring full participation: questions arising as to whether early termination amounted to a breach of contract by the applicant Circumstances justifying early termination, notwithstanding contractual term requiring full participation APPEARANCES and REPRESENTATION (if any): APPLICANT: The applicant appeared in person. RESPONDENT: Submissions in writing were received from the Respondent -- 1 of 9 -- 2 REASONS FOR DECISION Preliminary Matters [1] Minor civil disputes numbered 3408/10, 3409/10, and 3411/10 and 3412/10 are all claims in which the applicants sue Venzin Danielli Pty Ltd (ABN 689 538 101 02), trading as “Vendan Events”. [2] Although the claims are brought separately, each of them are essentially identical. The applicants seek the refund of $9,750.00, as was paid by each of them to the respondent, in relation to a businesswomen‟s mentoring/self- improvement program known as the Inspire Series, as offered by the respondent. [3] The matter was listed for hearing at QCAT as a minor civil dispute before me on 9 May 2011, at 2.00pm. On that occasion each of the applicants appeared in person. There was no appearance by the respondent. In relation to the non-appearance by the respondent, before the hearing on 21 April 2011, the QCAT registry received correspondence from Crilly Lawyers who advised: “… We refer to the above matters and confirm we act for the defendant in each of the proceedings. We note that a hearing has been set down for 2pm on 9 May 2011 at Room 6A, Level 10, 259 Queen Street, Brisbane. The notice of hearing indicates that our client is required to attend this hearing. However, due to health issues, as substantiated in the enclosed letter from her doctor, Dr Maria Haase. We respectively summit [sic] that our client is unable to attend and ask the Tribunal to grant our client leave so she is not required to attend the hearing. Our client is confident that the material that she has submitted for the Registrar’s consideration is able to verily show her version of events and is happy for the matter to be heard in her absence.” [4] The matter proceeded to hearing on the basis of the matters advised to QCAT in this letter from Crilly Lawyers. After hearing from the applicants I reserved my decision, in order to more fulsomely read the materials contained on the four separate claim files, and particularly the respondent‟s reply to the claims. As part of my reading of the claim files it became apparent that on 3 May 2011, the principal of the respondent, Ms Liz Venzin had also been given leave to appear by telephone during the hearing scheduled for the afternoon of 9 May 2011. That did not occur. I was subsequently advised that Ms Venzin had, earlier on 9 May 2011, left a message with the registry indicating that she wished to participate in the hearing, by telephone. -- 2 of 9 -- 3 [5] So as afford Ms Venzin a proper opportunity to add anything further (that is, beyond the material already filed by the respondent in defence of the claims), I took the precaution of re-listing the matter for further oral hearing, on 7 June 2011. [6] Notices of the rescheduled hearing were sent to the address held by QCAT for each of the four applicants and the respondent by the QCAT registry, on 2 June 2011. Each of the applicants did appear at the re-listed hearing on 7 June 2011, two in person, one by telephone, and one by means of a proxy given by her to one of the other applicants appearing in person. Once the hearing had been re-convened, and whilst “on the record”, efforts were then made by the Hearing Support Officer to also contact the respondent on the telephone number given by the respondent to QCAT. Those efforts were to no avail, by reason that a recorded message indicated that the telephone number provided by the respondent to QCAT had been de-registered. [7] I am satisfied that sufficient reasonable efforts have been made to afford the respondent with an opportunity to be heard in relation to the matters that fall for determination in each of QCAT Minor Civil Dispute claim files numbered 3408/10, 3409/10, 3411/10 and 3412/10. I am comforted in my conclusion to that end by the fact of the previous correspondence sent by Crilly Lawyers, on 21 April 2011, indicating that the respondent was confident that the material previously submitted by them to QCAT would sufficiently protect the respondent‟s interests. I now proceed to give my reasons in this matter on this basis. Factual Background [8] The applicants in this matter are Power Personal Training Pty Ltd (Claim No. 3408/10), Ms Suzanne Riley (Claim No. 3409/10), Ms Angela Haigh (trading as „Karz‟) (Claim No. 3411/10); and Miss Helen Baker (Claim No. 3412/10). For reasons that will become apparent, it is especially relevant factor in this case to note that each of the applicants are female, small business operators. [9] Each of the applicant‟s are similarly intent to grow their respective business, and are of a like-mind in believing that progress towards that goal can be had by their participating in “women‟s networking” opportunities. As was born out by the evidence, each of the applicants has previously participated in women‟s networking luncheons (or similar events). The evidence also attests that each applicant felt that mentoring and business coaching from other, already successful businesswomen would afford them with tangible business outcomes. [10] At all material times the respondent to each of these claims – Venzin Daniellei Pty Ltd (trading as Vendan Events) – conducted business as a „public events‟ organisation, that also offered mentoring and coaching services to businesswomen. -- 3 of 9 -- 4 [11] The managing director of the respondent company is Ms Liz Venzin. Each of the applicants first became introduced to Ms Venzin and Vendan Events by their having attended at a networking luncheon in February of 2009, at which Sarina Russo had been the guest speaker. This event was part of what has been termed the “Interact Series Brisbane Business Luncheon”. This was one of a series of events organised by Vendan Events to take place during 2009. Ms Venzin acted as master of ceremonies at the Sarina Russo luncheon. By all accounts the Sarina Russo lunch was a polished and well-organised occasion. [12] At the Interact Series luncheon in February 2009 each of the applicants were further introduced by Ms Liz Venzin to what was to be a forthcoming and more specific offering by Vendan Events – that which was styled to become the new “Inspire Series – Women’s Boardroom Workshops”. According to some marketing literature (a monthly newsletter from Vendan Events) that went on to become „Exhibit 1‟ in these proceedings, the “Inspire Series” was represented as: “Vendan Events is proud to announce ‘Inspire’ – women’s executive boardroom workshops, a 12 month professional workshop series for 12 vibrant and motivated Brisbane business women, aimed at facilitating opportunities for women to connect with other women, grow professionally and to be inspired by role models and by each other …” [13] It is uncontentious that each of the applicants was very interested to participate in such a program. The application material in relation to the program indicated that the cost would be $9,750.00 (GST inclusive) for each participant. According to the Vendan Events literature given to the applicants, each participant in the Inspire Series would obtain the following specific benefits: (i) a round-table boardroom lunch series once per month for eleven months with each lunch “facilitated by our executive coach”; (ii) one hour of private business coaching with an external trainer between each luncheon; and (iii) their inclusion in an inspirational book, designed to “chart their journey” towards business improvement, to be published (for general bookshop distribution) at the end of the Inspire Series. [14] As became clear from the evidence given by the applicants during the hearing of this matter, the representations contained in the Vendan Events marketing literature did not however mark out the totality of the representations made to applicants by the respondent. Further representations were also made orally by Ms Venzin. [15] Although the preliminary material indicated that the program would be for twelve (12) participants, this was later revised downwards to a minimum of ten (10) participants. That is, each of them, should they join the program, would be participating with nine (9) other, like-minded businesswomen. The applicants informed me, and I now accept, that the opportunity for each of -- 4 of 9 -- 5 them to mix with nine other vibrant and motivated businesswomen over an ensuing eleven month period was a key inducement for each of them to join the Inspire Series program. In addition, the applicants were variously told by Ms Venzin, and again I accept, that the program would afford them a „point of entry‟ into further business networking opportunities, and would afford them a “launch pad” opportunity for their commencing on the motivational public speaking circuit. A further key representation related to the fact that a book was to be published regarding their “journey” during the course of the Inspire Series. For each of them, this represented a unique marketing opportunity for their small businesses. Each of the applicants advised, and I accept, that the offer of private mentoring and business coaching between each monthly luncheon was also an important factor inducing them to participate in the Inspire Series. [16] Ultimately, each of the four applicants enrolled in the Inspire Series, on the basis of all of the representations, oral and written, that were made to them by the Respondent. [17] When the program got underway the applicants were soon to discover that there were only five (5) genuine participants. When the applicants complained to Ms Venzin about this, Ms Venzin made the numbers up to ten by including in the head count those women from the respondent entity who were in attendance at the luncheons in a supporting role, including the presenter, the facilitator, the mentor, and even the lady who was acting in the background role as the scribe, recording the proceedings. The applicants were unimpressed by this sleight of hand. They had every right to be. [18] The Inspire Series monthly luncheons were conducted in a private dining room at the Marriott Hotel, in Brisbane. Even from the first luncheon – on 12 February 2010 – the applicants found the program to be unprofessional, disorganised, and lacking in any purposeful focus. When time came for „PowerPoint‟ presentations, each of them were expected to huddle around the presenter‟s laptop, which must hardly have inspired any confidence that they were obtaining genuine value for their investment. [19] According to the applicants‟ evidence, which I now accept, each of the applicants felt by the end of the first lunch that the Inspire Series had been grossly over-marketed. The applicants have also submitted, and I further accept, that the opportunities for networking that were promised to them proved largely illusory. The respondent company did offer that they could attend at other networking events being conducted by Vendan Events, but each of these were at an additional expense, beyond the $9,750.00 that they had already invested by them in the Inspire Series. Although some mentoring and coaching was offered to the applicants between each luncheon, this was perfunctory, at best. It soon became clear to each of the four applicants that the Inspire Series was a hastily conceived pilot program, that had never been previously conducted (nor even trialled), before being offered to the paying public. -- 5 of 9 -- 6 [20] Of even more concern to the four applicants was that there was no evidence that the book which was to be published to “trace their journey” through the Inspire Series was being produced. When questions were put by the applicants to Ms Venzin regarding progress on the publication, these were met with evasive and unsatisfactory answers, which engendered no confidence that the book would be produced. [21] Shortly after the first Inspire Series luncheon, the applicants started to raise with Ms Venzin that they were unhappy with how the series was unfolding. They were assured by Ms Venzin that there would be improvements. These assurances were enough for the applicants to persist with the Inspire Series into March, and April, and then again into May. Yet, ultimately their trust in Ms Venzin was to no avail, as no real improvement was ever forthcoming. In June 2010, the applicant‟s collectively confronted Ms Venzin in order to demand change. That meeting was unsuccessful. [22] By late June 2010, the applicants had retained Nathan Lawyers and were contending in legal correspondence that the Inspire Series had wholly failed to deliver that which the applicants had contracted for. In a letter dated 30 June 2010 Nathan Lawyers indicated to the respondent that the applicants would not be attending any further luncheons and that the applicants were now seeking a full refund of the $9,750.00 invested by each of them in the Inspire Series. In effect, that letter marked a formal termination of contract by each of the applicants for an alleged fundamental breach of contract, by the respondent. [23] Nathan Lawyers‟ letter of that date was not met by any formal response from the respondent‟s lawyers until as recently as 15 March 2011. In that response, in part, Mr Steven Jones, solicitor, then acting on behalf of the respondent states: “… the respondent has delivered the program as promised, yet that the program has been frustrated by the applicants’ refusal to participate further.” In part, Mr Jones also states: “Vendan has and will continue to provide, the Inspire facility. If your clients choose not to participate – participation being a key ingredient in delivering value to your clients – that is their affair – but no justification for a refund. Vendan has and remains ready, willing and able to perform the contract. My client is happy to let a court decide, if that is the way your clients insist going.” [24] In net terms, the legal effect (although obviously not expressed in these precise terms), of the aforementioned letter from the respondent‟s solicitor Mr Jones is an allegation that any further performance of the obligations -- 6 of 9 -- 7 inured in Vendan Events by the contract had been made impossible,1 by the very refusal, by the applicants, to participate any further in the Inspire Series. By necessary inference the respondent therefore contends that this conduct must itself amount to a prior fundamental breach of contract, thereafter entitling the respondent to accept the breach, and forfeit the monies paid by each of the applicants. [25] There is some documentary evidence that may afford some basis for the respondent‟s argument towards this conclusion. As part of the applicants‟ enrolment in the Inspire Series, each of them was requested to complete an application form. As well as setting out the program inclusions for the Inspire Series the application form2 includes the following: Attendance Policy/Commitment to program Your ability to commit yourself to attending the entire program is a vital element of the selection criteria. Personal Commitment I understand the goals and the time commitments. If selected, I will participate in all. [26] In the respondent‟s written submissions (as were filed in the QCAT registry on 25 March 2011), the respondent contends that the agreements between the respondent and each of the applicants included the aforementioned requirement that each of them must participate in all events and coaching sessions. The submission to that end by the respondent is expressed as follows: “It is submitted that the applications were very much like a ticket to the cinema. It entitled the applicant to entry to the ‘program’ subject to a key condition of ‘participation’. If the applicant then chose to leave before the ‘movie ended’ there was no refund.” [27] I do not accept the respondent‟s submission. The analogy to circumstances of no refund for cinema patrons who leave a movie early is inapt, in all the circumstances. As I have indicated previously, I accept the evidence of each of the applicants that it was a fundamental representation and a key inducement to each of them to participate in the Inspire Series that they would become one of ten participants in the program, and thereby obtain networking opportunities with at least nine other like-minded businesswomen. I further accept that it was a fundamental representation by the respondent that each of them would be afforded further networking opportunities and would be included in an inspirational publication and would receive business mentoring and coaching between each monthly luncheon. I accept that without these representations that none of the applicants would have participated in the Inspire Series and none of them would have parted with their $9,750.00. I accept that each of the applicants 1 Or “frustrated”, to use the conventional legal term. 2 I have not seen in evidence an application form signed by any of the applicants, or by the respondent. However I accept for present purposes that the unsigned application document was part of the agreement between each applicant and the respondent. -- 7 of 9 -- 8 did not receive any approximation of the benefit offered to them in exchange for their $9,750.00 participation fee. I find that the respondent could not reasonably contend that the applicants participated in a program with nine other businesswomen by including amongst the head count those women who were present at the luncheons in a purely service role. To do so was disingenuous. It was blatant sophism. [28] On the basis of the evidence accepted by me as to poorly organised nature of the luncheons it is particularly hard to imagine how the book editor “Keith” (whom the applicants never even met) could ever have been provided with sufficient raw material by Vendan Events with which to then go on and produce the promised publication. I find that promised “inspire journey” book was an empty, illusory promise. [29] I am satisfied that the failure to provide the various benefits that were represented as flowing from their participation in the Inspire Series program amounted to a fundamental breach. I am further satisfied that this breach was sufficient to justify the applicants‟ refusal to then further participate in the Inspire Series, even notwithstanding an agreement that required their full participation. Here, the applicants were obligated to fully participate in a program that met the complete specification of that for which they had bargained for. The Inspire Series did not meet that specification, and the shortfall between that which had been promised and that which was delivered by Vendan Events vitiates against any contractual need for full participation in the Inspire Series, by the applicants. In short, the applicants were entitled to terminate their role in the program early. [30] Although I have found that each of the applicants were entitled to terminate the agreement and are now entitled to sue for breach of contract, it remains the case that each of them did at least obtain some benefit from their participation in the Inspire Series. They did persist with the Inspire Series for a number of months, giving Ms Venzin the benefit of the doubt. Although it was an essential term that they would get to mingle with at least nine other like-minded businesswomen, they did at least obtain the opportunity to mix with four others; and it is also the case that each of them did initially provide some positive feedback in relation to the early luncheons in the program. Each of them did also obtain some mentoring and business coaching, albeit far less of this than that for which they had originally bargained for. In addition, each of them did obtain the benefit of the food and wine served to them at the Marriott Hotel. [31] Doing the best I can – and here there can be no precision as regards the tangibility of the actual benefit that was received by the applicants by their participation in the Inspire Series – I assess that each of the applicants has obtained 22.5% of the benefit for which they had originally contracted. Accordingly, I find that they are now entitled to seek the repayment of 77.5% of the sum originally paid by them to the respondent for the Inspire Series and their participation in it. Each of the applicants should be entitled to a refund in the sum of $7,556.25, together with their filing fee before QCAT, in the sum of $92.00. -- 8 of 9 -- 9 Orders [32] In accordance with my preceding reasons I now order that the respondent pays to the applicant the sum of $7,648.25 within twenty-eight (28) days of the date of these orders. -- 9 of 9 --