Whitty v Moller[2022] QCAT 258

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

What is this application about?

1. [1]
   The applicant, Mr Whitty, breeds and sells Labradoodle dogs.
2. [2]
   On 18 January 2021, the respondent, Ms Moller, acquired the dog “Luna”^[1] from Mr Whitty pursuant to the terms of a “Guardian Home Agreement” under which Ms Moller had agreed to home Luna but to make her available to Mr Whitty for future breeding purposes so that he may sell the puppies she produced.
3. [3]
   On 18 March 2022, Mr Whitty filed an Application for minor civil dispute – consumer/trader dispute claiming the payment of $25,000 to him from Ms Moller on the basis that Ms Moller was in breach of the Guardian Home Agreement by refusing to make Luna available to Mr Whitty for breeding.
4. [4]
   Ms Moller resisted the application and was unsuccessful in an earlier application to the tribunal to have the application struck out on the bases that:

   1. (a)
      the application was outside the jurisdiction of the tribunal because the applicant was not a consumer, and
   2. (b)
      the applicant had failed to correctly serve a copy of the stamped application.
5. [5]
   The learned adjudicator appears to have considered^[2] that the plethora of conflicting evidence required adjudication and that Ms Moller was not disadvantaged by the service of the application out of time.
6. [6]
   There are several similar applications before the tribunal filed by Mr Whitty against parties to whom he had supplied Labradoodles under the “guardianship” scheme. Each application alleges a breach of a Guardian Home Agreement and seeks orders for the payment to Mr Whitty of the sum of $25,000 and, in many cases, orders for the delivery of the subject dog to Mr Whitty. 
7. [7]
   On 6 June 2022 Ms Moller filed a further application for miscellaneous matters to strike out the application for want of jurisdiction, relying on tribunal-initiated directions made in other applications that submissions should be put on the question of jurisdiction.
8. [8]
   The parties were directed to make submissions on point, which they did between 23 and 27 June 2022.  I have decided to dismiss the application for want of jurisdiction for the reasons that follow.

Background to the dispute

9. [9]
   Although there is conflicting evidence on many aspects of the dispute, it is not disputed that:

   1. (a)
      Mr Whitty:

      1. is a dog breeder trading as “Journey Australian Labradoodles ABN 60731797878844”;
      2. is or was a verified breeder holding Rightpaw and Worldwide Australian Labradoodles Association accreditation;
      3. is or was a registered breeder with relevant local councils; and
      4. is a Queensland registered breeder under Breeding Identification Number (BIN) 8998748847; and
   2. (b)
      Ms Moller;

      1. paid $1,500 to Mr Whitty on 18 January 2021 and took possession of Luna; and
      2. signed a Guardian Home Agreement on 28 January 2021 (although it is not counter-signed by the applicant) agreeing to make Luna available to Mr Whitty for breeding for up to three litters between 5 December 2020 and 5 December 2025; and
      3. wrote to Mr Whitty on 17 October 2021 telling him of her intention to withhold Luna from breeding until her Mr Whitty allayed her expressed concerns about his alleged breeding practices following media reports of Mr Whitty’s dealings with other persons; and
   3. (c)
      the contract between the parties, if it is accepted that that the Guardian Home Agreement is a binding contract, was terminated by Mr Whitty by letter dated 10 March 2022 after the parties were not able to come to terms regarding Ms Moller’s concerns.  
10. [10]
    In explaining the orders sought in the application, Mr Whitty said the following (my emphasis added):^[3]

The contract has been terminated before the respondent met her terms. In my letter of termination, I stated:

“Journey Tia is now required to be returned to me or made available for collection by midday Friday, 11 March 2022 unless agreement has been agreed by me to pay $3500 to purchase Journey Tia as your forever home dog”.

The respondent has made no attempt to contact me and therefore I seek for orders to be drawn up for the delivery up of Tia to me.

CALCULATION OF DAMAGES:

Damages are calculated as follows:

1 I expected three litters from the Guardian dog Journey Tia

2  The contract was repudiated by the respondent and terminated by me before any of those litters could be born.

3  It is a reasonable expectation that each litter would have produced a minimum of 5 puppies on average.

4 I expected to sell each puppy for $4,500 AT LEAST (breeding puppies sell for more and puppies I keep for breeding purposes generate more income)

5 Therefore, given breach of the contract, I assess my damages under the contract to be 3 litters of 5 puppies of $4,500 average value = $67,500

REQUEST TO AWARD PAYMENT OF DAMAGES:

Despite this figure I have decided to limit my claim to $25,000 to abide with the QCAT jurisdictional limit.

11. [11]
    In his submissions dated 23 June 2022, Mr Whitty says, among other things that:

My name is Michael Whitty.

I trade as Journey Australian Labradoodles.

The respondent is, in my belief, a consumer.

12. [12]
    On 24 June 2022 Mr Whitty submitted further that:

I believe the respondent is a commercial breeder. Measures were put in place to sell a PET to the respondent, these conditions have not been met.

While the intention was to provide the respondent with a PET, where I took on breeding responsibilities and duties, this contract has been terminated and the dog in question is a BREEDING DOG or POTENTIAL BREEDING DOG. She is entire and can be used for commercial breeding.  I did not agree to a pet that would be desexed at later date – I agreed to Guardian. Sales of breeding dogs are made from trader to trader and until I have possession of this dog as is required now the contract is terminated, she is a breeding dog and the respondent is a trader.

If, however, you rule that the respondent is not classified as a “trader”, could the application type please be changed from a consumer/trader v trader dispute to a minor debt dispute?

13. [13]
    Put simply, Ms Moller’s submissions as are follows:

    1. (a)
       that Mr Whitty is not a consumer;
    2. (b)
       that she is not a trader;
    3. (c)
       that the Guardian Home Agreement is a contract of sale and does not give rise to a debt, nor does it specify an agreed sum of money payable to Mr Whitty; and, therefore,
    4. (d)
       the tribunal does not have jurisdiction to hear the dispute.

What is the legislative framework?

Jurisdiction in minor civil disputes

14. [14]
    The tribunal has jurisdiction to deal with matters if so empowered to do so by the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (“QCAT Act”) or by an enabling Act.^[4]
15. [15]
    Section 11 of the QCAT Act confers jurisdiction on the tribunal to hear and decide a minor civil dispute.
16. [16]
    Schedule 3 of the QCAT Act describes a minor civil dispute, amongst other things, as:

    1. (a)
       a claim to recover a debt or liquidated demand of money of up to the prescribed amount;^[5] or
    2. (b)
       a claim arising out of a contract between a consumer and trader, or a contract between 2 or more traders, that is—

       1. for payment of money of a value not more than the prescribed amount; or
       2. for relief from payment of money of a value not more than the prescribed amount; or
       3. for performance of work of a value not more than the prescribed amount to rectify a defect in goods supplied or services provided; or
       4. for return of goods of a value not more than the prescribed amount; or
       5. for a combination of any two or more claims where the total value of the combined claim is not more than the prescribed amount.
17. [17]
    The tribunal may exercise its minor civil dispute jurisdiction if a “relevant person” has applied to the tribunal to deal with the dispute.^[6]
18. [18]
    A “relevant person” is, relevant to these proceedings, defined in section 12(4) to include:

    1. (a)
       for a claim to recover a debt or liquidated demand of money - a person to whom the debt is owed, or money is payable; or
    2. (b)
       for a claim arising out of a contract between a consumer and a trader – the consumer; or
    3. (c)
       for a claim arising out of a contract between two or more traders - any of the traders.

Consumer/trader and trader/trader disputes

19. [19]
    To trigger jurisdiction under this head, the contract between the consumer and trader, or the two traders, must be legally binding.^[7]  
20. [20]
    A “consumer” is, relevantly, defined in Schedule 3 of the QCAT Act as an individual who buys or hires goods other than –

    1. (a)
       for resale or letting on hire; or
    2. (b)
       in a trade or business carried on by the individual.
21. [21]
    A “trader” is, relevantly, a person who in trade or commerce –

    1. (a)
       carries on a business of supplying goods or providing services; or
    2. (b)
       regularly holds themself out as ready to supply goods or to provide services of a similar nature.
22. [22]
    Even though a party may be generally fall within the definition of a “trader” having regard to the business it conducts, it must specifically and as between the litigating parties and for the subject matter of the contract between them be acting in that capacity to trigger the tribunal’s jurisdiction.^[8]

Minor debt disputes

23. [23]
    A debt involves a claim for a sum of money owed under a contract - but not as a substitute for breach of contract damages. 
24. [24]
    For a claim to be for a liquidated demand of money it does not also have to be a “debt”. Generally, a claim is liquidated when the monetary sum representing the claim is ascertained.^[9]
25. [25]
    The distinction between a “debt or liquidated demand” was discussed in C & K Home Investment Pty Ltd ATF v Sye & Anor^[10] as follows:

A claim is `liquidated’ when it seeks an amount that does not require any exercise of judicial fact-finding or discretion to crystallise it, or to arrive at a definite finding of quantum. If any assessment is needed, it must be by a process of simple mathematical calculation, without any input of judicial decision-making.

26. [26]
    In Jampco Pty Ltd v Cameron^[11] Young J said:

The difference between the two is that “liquidated damages” are recoverable in satisfaction of a right of recovery created by the contract itself and accruing by reason of breach, while “unliquidated damages” are compensation as assessed by the court for loss occasioned by breach.^[12]

27. [27]
    Further, unliquidated damages is described in Practice Direction 9 of 2010 as:

Unliquidated damages is where a claim is made for a sum which cannot be determined without consideration, by the Tribunal, of the applicant’s evidence in support of the claim – for example, a claim in which the precise amount which should be awarded cannot be determined from the terms of a prior agreement between the parties, or some other standard; and must be calculated by reference to invoices, quotations or the like.

Striking out

28. [28]
    The objects of the QCAT Act^[13] include to have the tribunal deal with matters in a way that is accessible, fair, just, economical, informal, and quick, and, to that end, section 4 of the Act requires the tribunal, among other things, to:

    1. (a)
       encourage the early and economical resolution of disputes before the tribunal;^[14] and
    2. (b)
       ensure proceedings are conducted in an informal way that minimises costs to the parties and is as quick as is consistent with achieving justice.^[15]
29. [29]
    In minor civil disputes the tribunal must make orders that it considers fair and equitable to the parties to the proceeding to resolve the dispute but may, if the tribunal considers it appropriate, make an order dismissing the application.^[16]
30. [30]
    Section 62(1) permits the tribunal to give a direction at any time in a proceeding and do whatever is necessary for the speedy and fair conduct of the proceeding.
31. [31]
    The tribunal must allow a party to a proceeding a reasonable opportunity to call or give evidence and to make submissions to the tribunal, ^[17] which the parties in this case have been given. 
32. [32]
    The tribunal need also be mindful that their resources serve the public as a whole, not just the parties to the proceedings.^[18]
33. [33]
    The tribunal can act on its own initiative^[19] under section 47 of the QCAT Act to strike out or dismiss a proceeding if the tribunal considers a proceeding is:

    1. (a)
       frivolous, vexatious or misconceived; or
    2. (b)
       lacking in substance; or
    3. (c)
       otherwise an abuse of process.
34. [34]
    The power to strike out ought only to be exercised “sparingly” and “when a claim is groundless or futile”.^[20]
35. [35]
    According to Dey v Victorian Railways Commissioners,^[21] in considering a strike out application, the evidence should be weighed to reach a conclusion about whether the applicant has an arguable case.  A lack of any cause of action must be very clear^[22] and the tribunal ought to be satisfied to a “high degree of certainty about the outcome” to strike the proceeding out.^[23]
36. [36]
    Summary dismissal should not be granted simply because it appears an applicant is unlikely to succeed on an issue of fact, in circumstances where there are factual issues in dispute and capable of dispute.^[24]

Discussion and findings

37. [37]
    For the present discussion, I leave aside the question of the validity of the Guardian Home Agreement as, it will be seen, it is not necessary to address it. 

Is the applicant a consumer?

38. [38]
    Mr Whitty, on his own admission, is not a consumer within the meaning of schedule 3 of the QCAT Act and, therefore, cannot bring a consumer dispute against Ms Moller unless she is a “trader”. 

Is the respondent a trader?

39. [39]
    Ms Moller is, on Mr Whitty’s own admission, a consumer and not a trader because:

    1. (a)
       she acquired Luna from Mr Whitty as a pet;
    2. (b)
       there is no evidence that Ms Moller carries on business as a breeder; and
    3. (c)
       in any event, at the time of supply, neither party intended that Ms Moller would breed Luna in the course of a business carried on by Ms Moller (or at all). 
40. [40]
    Mr Whitty’s submission that Ms Moller’s character became that of a trader upon termination of the contract by Ms Moller refusing to desex Luna and, therefore, benefiting from the potential to breed Luna for commercial purposes is of no relevance because at the time of supply, Luna was a pet and intended by both parties to remain so, save for the arrangement to give Mr Whitty brief access to Luna and her litters to sell in the course of his business. 

Can the application be recast as a minor debt?

41. [41]
    Mr Whitty’s claim is not for a debt or liquidated demand of money and, therefore, the application cannot be recast as a minor debt because:

    1. (a)
       the contract does not liquidate damages for breach and is not sued upon as such; and
    2. (b)
       the claim is, again on Mr Whitty’s own submissions, a damages claim that cannot be decided without an assessment of evidence including veterinary evidence, breeding statistics and the market value of Labradoodle puppies at relevant times.

Decision

42. [42]
    The application cannot procced as a consumer/trader dispute or a trader/trader dispute because Mr Whitty is not a consumer and Ms Moller is not a trader.  It cannot proceed as a minor debt application because the claim is for breach of contract damages in an amount to be assessed.  The tribunal does not have jurisdiction to hear the dispute and allowing the application to proceed would waste the tribunal’s time and limited resources, as well as those of the parties, including the applicant.  It is dismissed pursuant to section 47 of the QCAT Act on that basis.