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Hi Dow Australia Pty Ltd v Shivlosh Australia Pty Ltd QCATA 155
Hi Dow Australia Pty Ltd v Shivlosh Australia Pty Ltd  QCATA 155
Hi Dow Australia Pty Ltd
Shivlosh Australia Pty Ltd
On the papers
Senior Member Stilgoe AM
21 October 2015
APPEAL – LEAVE TO APPEAL – termination of consultant’s services – where the Tribunal awarded payment in lieu of notice in circumstances where there was no contractual entitlement – whether the claim was within the Tribunal’s minor civil dispute jurisdiction – whether the claim was for a debt or liquidated demand for money – whether the claim arose out of a contract between two traders – whether the service provider acts in a discipline not ordinarily regarded as within the field of trade and commerce.
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 8, s 10(1), s 11, s 12, Schedule 3
Alexander v Ajax Insurance Co Ltd  VLR 436
Arnold v Forsythe  NSWCA 18
Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd (1987) 14 FLR 215
Cormack v Queensland Police Service – Weapons Licensing Unit  QCATA 115
Dalgety Futures Pty Ltd v Poretsky  2 NSWLR 646
Ford v Thexton trading as Family Legal and Thexton Lawyers  QCATA 180
Goddard Elliott (a firm) v Fritsch  VSC 87
Holman v Deol  1 NSWLR 640
Spain v Union Steamship Co of New Zealand Ltd  HCA 21; 32 CLR 138
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
- Hi Dow Australia Pty Ltd (Hi Dow) and Shivlosh Australia Pty Ltd (Shivlosh) entered into a consultancy agreement on 4 July 2013. Under that agreement the nominated executive of Shivlosh, Mr Chand, was to provide accountancy services as an independent contractor to Hi Dow. Schedule 2 of the agreement sets out the Services to be performed. These include a list of broad duties and more specific duties categorised under the headings: financial controller, systems, office and human resources. In broad terms, Mr Chand effectively acted as Hi Dow’s Chief Financial Officer.
- Shivlosh was to invoice Hi Dow on a monthly basis for work performed. The original fee was $48 per hour which calculated to a monthly fee of $6,720 a month (plus GST) based on a working day of 9am to 5pm. There was provision for this to increase to $55 per hour, or a monthly fee of $7,700, from 1 August 2013 if agreed.
- Shivlosh’s performance was to be reviewed on or before 1 November 2013. If Hi Dow determined Shivlosh had not adequately performed the Services Hi Dow could terminate by giving 1 weeks written notice (or payment in lieu of notice) of such termination. There was no evidence of a review having been undertaken.
- The parties agreed in early January 2014 that a rate increase was to apply so that Shivlosh was to receive $150 000 per annum. The Tribunal found the parties agreed that the increased rate was to apply from 6 January 2014.
- On 9 May 2014 Hi Dow informed Mr Chand that he would be required one day a week as opposed to five. On 22 May 2014 Mr Chand wrote an email to Hi Dow to the effect that the new arrangements were unacceptable and that he would not be returning.
- Shivlosh brought an application before the Tribunal in its minor civil disputes jurisdiction seeking to be paid for the services provided prior to termination of the agreement.
- On 26 November 2014 the Tribunal ordered Hi Dow pay to Shivlosh $12,343.43. The Tribunal found Shivlosh was entitled to be paid:
- a)an amount representing the difference in the consultancy fee it paid from 6 January 2014 ($1 287.96);
- b)for work done up to and including 9 May 2014 ($3 586.96); and,
- c)because two weeks notice of termination had not been given, for an amount representing two weeks fees in lieu of notice;
- d)$294.60 in costs, being the QCAT filing fee.
- Hi Dow seeks leave to appeal that decision. Because this is an appeal from a decision of the Tribunal exercising its minor civil disputes jurisdiction, leave is necessary. Leave to appeal will usually be granted where there is a reasonable argument that the decision is attended by error, and an appeal is necessary to correct a substantial injustice to the applicant caused by that error.
- Hi Dow submits that the Tribunal erred in failing to find it was entitled to terminate the contract without notice. The Tribunal found it was not and awarded Shivlosh two weeks pay in lieu of the notice it should have been given. In considering this issue, the question arises as to whether the award of payment in lieu of notice is within the “minor civil jurisdiction” of the Tribunal.
- We have considered possible alternative arguments to attract the Tribunal’s jurisdiction. We have taken this approach because the extent of the Tribunal’s jurisdiction has public implications beyond the interests of the parties to this matter and because, in matters of statutory interpretation, the Tribunal may and does think for itself.
- As there is a reasonable argument that the Tribunal exceeded its jurisdiction and that an appeal is necessary to correct what would be a substantial injustice to the applicant caused by the error, leave to appeal is granted.
Discretion to admit additional evidence
- Hi Dow has requested that the Appeal Tribunal accept into evidence the resume of Mr Chand which was given to Hi Dow prior to entering the consultancy agreement with Shivlosh. Hi Dow referred to the resume at the hearing but could not produce a hard copy at the hearing. The Member hearing the matter refused to allow Hi Dow to obtain it via email during the hearing.
- Hi Dow seeks to rely on the resume to show it contained misrepresentations regarding Mr Chand’s qualifications and membership status of relevant professional associations. The resume is relevant, Hi Dow submits, to the issue of competence and honesty on the part of Mr Chand.
- Section 147(2) gives a broad discretion to the Appeals Tribunal to admit additional evidence. In applying the discretion the Tribunal has commonly applied the following common law principles:
- a)could the evidence have been obtained with reasonable diligence for use at the trial;
- b)would the evidence, if allowed, probably have an important influence on the result of the case (although it need not be demonstrated to be decisive);
- c)was the evidence credible.
- These principles were applied to the exercise of the discretion in s 147 by the Supreme Court of Queensland in Underwood v Queensland Department of Communities (State of Queensland).
- In view of these considerations, although the resume could have been obtained with reasonable diligence for the hearing, as the evidence is credible and potentially important to Hi Dow’s appeal, we are prepared to grant leave to rely upon it.
- Hi Dow has also included in its appeal submissions an Affidavit of Heidi Hoy dated 2 February 2015. Ms Hoy is an accountant employed by Craig Baker & Associates Pty Ltd, the accountants engaged by Hi Dow following termination of their agreement with Shivlosh. This Affidavit presumably is designed to address an evidentiary gap identified by the Tribunal at the original hearing. The Affidavit is brief and is not sufficient whether read by itself or with the invoice referred to below, to establish a material breach of duty by Shivlosh. The Affidavit could have been obtained for the trial and Ms Hoy could have given evidence. If she had, Shivlosh would then have had an opportunity to cross-examine her.
- It is unfair at this stage to permit Hi Dow to rely on this Affidavit and it is not admitted.
Minor civil dispute jurisdiction – section 12 QCAT Act
- There is no doubt the Tribunal has jurisdiction in respect of the claim for an amount representing the difference in consultancy fees Shivlosh should have been paid from 6 January 2014 ($1 287.96) and for work done up to and including 9 May 2014 ($3 586.96), those claims being claims for liquidated sums.
- However, and although the matter was not raised before the Tribunal, an issue arises as to whether the Tribunal had jurisdiction to award payment in lieu of notice.
- The extent of the Tribunal’s jurisdiction is prescribed by s 10 of the QCAT Act 2009 (Qld). Apart from jurisdiction conferred by an enabling Act the Tribunal’s original jurisdiction is confined to “jurisdiction to hear and decide a minor civil dispute”.
- Minor civil dispute is defined to mean, relevantly:
- (a)a claim to recover a debt or liquidated demand of money, with or without interest, of up to the prescribed amount; or
- (b)a claim arising out of a contract between …2 or more traders, that is –
- for payment of money of a value not more than the prescribed amount…
Debt or liquidated demand
- The QCAT Act does not define “debt or liquidated demand of money”.
- Generally a claim is liquidated when the monetary sum representing the claim is ascertained, or capable of being ascertained by calculation of a formula, rather than being ascertainable only by an assessment which involves the exercise of a discretion and/or opinion.
Notice and pay in lieu of notice are not the same thing.
- In a situation where a contract provides for notice to be given of termination but not payment in lieu, then a termination without notice constitutes a breach of contract, even with a purported payment in lieu. The person who was not given notice is entitled to sue for damages.
- A claim for damages for breach of contract is an unliquidated claim and therefore falls outside this limb of the Tribunal’s minor civil dispute jurisdiction.
- It remains to consider whether the issue arises as to whether the claim falls within the “trader-trader” limb of the minor civil disputes jurisdiction.
Claim for money arising out of a contract between two traders
- The minor civil disputes jurisdiction of the Tribunal includes a claim arising out of a contract between two traders that is for payment of money of a value not more than the prescribed amount. This jurisdiction therefore extends to unliquidated claims for a sum less than $25 000.
- The QCAT Act defines a trader as follows:
1 A trader— (a) 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; and …
2 However, a person is not a trader in relation to goods or services if in supplying the goods or providing the services— (a) the person acts in the exercise of a discipline that is not ordinarily regarded as within the field of trade or commerce; or (emphasis added).
- Services provided in “trade and commerce” is a broad concept which has been held to include the provision of professional services for reward. This would include the provision of business services of the type provided by Shivlosh. The issue is whether Shivlosh is excluded on the basis it acts in a discipline not ordinarily regarded as within trade and commerce.
- This aspect of the definition of “trader” was considered in Early Property Group Pty Ltd trading as Early Group Valuers v Cavillario:
The definition of trader in the QCAT Act is both inclusive and exclusive. It is inclusive in that it encompasses activities carried out in trade or commerce, but then excludes such activity when the person acts in a discipline not normally associated with trade or commerce. The exemption is directed to the person and their discipline rather than fixing on the nature of the activity.
- In that case it was determined that “if the exemption in the definition of a trader in the QCAT Act is to have any application at all, it must operate to exclude professionals whose disciplines are not ordinarily regarded as within the fields of trade or commerce.”
- The exemption incorporates the long-standing distinction between a “trade” and a “profession”. The distinction was usefully discussed in Holman v Deol in the context of a claim against a solicitor in the Consumer Claims Tribunal.
- In Holman v Deol it was held:
Ordinarily one readily accepts that trade and commerce cover a field different from that occupied by persons carrying on a profession, just as one readily accepts that industry is a field also separate trade and commerce. It is sometimes a problem to decide whether a particular calling is or is not a profession, and Du Parcq LJ referred to this in Carr v Inland Revenue Commissioner:
I think that everybody would agree that, before one can say that a man is carrying on a profession, one must see that he has some special skill or ability, or some special qualifications derived from training or experience. Even then one has to be very careful, because there are many people whose work demands great skill and ability and long experience and many qualifications who would not be said by anyone to be carrying on a profession.
Ultimately one has to answer this question: Would the ordinary man, the ordinary reasonable man – the man, if you like to refer to an old friend, on the Clapham Omnibus – say now, in the time in which we live, of any particular occupation, that it is properly described as a profession?
“… would embrace intellectual activity, or manual activity controlled by the intellectual skill of the operator, whereby services are offered to the public, usually though not inevitably for reward and requiring professional standards of competence, training and ethics, typically reinforced by some form of official accreditation accompanied by evidence and qualification.”
- The definition of “trader” in other consumer claims tribunal legislation has been held to exclude those acting in the disciplines of law, medicine and dentistry and in the context of the QCAT Act to apply to valuers, lawyers, podiatrists, professional town planners and accountants.
- Hi Dow is in the business of importing medical devices. It is therefore a trader, being a person who in trade or commerce carries on a business of supplying goods.
- Shivlosh, on the other hand, carries on a business of supplying general accounting and financial management services. Mr Chand, its nominated executive has a University degree in Economics and certain other professional accreditation. Shivlosh provided business services to Hi Dow which included general company secretarial tasks, financial data entry, reconciliations, financial reporting, management of relevant insurances including work cover, the development of paperflow, storage and filing systems and management of the payroll. Further clause 6.2 (ii) of the Consultancy Agreement requires the Consultant to “maintain, and shall ensure that the Nominated Executive maintains, the highest standards of professional conduct in the discharge of the Services.”
- We are satisfied, on balance, that the nature of the services provided by Shivlosh are analogous to those considered to be of a professional nature and that its business involves the exercise of a discipline not ordinarily associated with trade or commerce. Accordingly, we find that Shivlosh is not a “trader” and that this part of its claim is not within the minor civil disputes jurisdiction of the Tribunal.
Grounds of Appeal
- Hi Dow raises the following grounds of appeal:
- a)Hi Dow was induced to enter into the agreement due to fraudulent misrepresentations made by Mr Chand in his resume.
- b)Hi Dow was entitled to terminate without notice under clause 14.2 (a) on the basis Shivlosh was in breach of clause 4 (a); 6.2 (ii); clause 11, clause 13; and
- c)Hi Dow was entitled to terminate the agreement without notice under clause 14.2(f).
Was the Tribunal in error in failing to find Hi Dow was induced to enter into the agreement due to fraudulent representations made by Mr Chand in his resume
- Hi Dow argues that the Tribunal was in error in failing to find that Mr Chand misrepresented he was a Fellow of the Taxation Institute of Australia.
- Under the heading “Memberships” on the last page of his resume Mr Chand lists “Fellow of the Taxation Institute of Australia”. At the original hearing Mr Chand produced a statutory declaration which provided that the attached documents were true copies of the original documents. Those documents included, relevantly, a Certificate of Membership of the Taxation Institute of Australia dated 28 June 1994.
- Hi Dow submits that their enquiries of the Taxation Institute reveal Mr Chand has not been a member since 1994.
- The Tribunal found there was insufficient evidence to support the allegation of fraudulent misrepresentation made by HiDow against Mr Chand. We agree.
- Hi Dow did not establish to the requisite standard of proof that Mr Chand, by listing the Taxation Institute under the heading Memberships in his resume, was intending to deceive Hi Dow. Further, there is no evidence Hi Dow relied on the representation.
- We add that this representation, were it found to be a misrepresentation, would not constitute a material breach of clause 13 for the reason that membership of the Taxation Institute is not a licence which the consultant was legally required to have in order to perform the services required by the agreement.
- This ground is therefore rejected.
Was the Tribunal in error in failing to find Hi Dow was entitled to terminate without notice under clause 14.2 (a) on the basis Shivlosh was in breach of clause 4 (a); 6.2 (ii); 11 or 13
- If the claim in respect of payment in lieu of notice was held to be within jurisdiction it would be necessary to consider whether the Tribunal had erred in finding notice to terminate was required.
- Hi Dow submits the Tribunal was in error in failing to find it was entitled to terminate without notice under clause 14.2 (a).
- Under clause 14.2 (a), if the consultant was in material breach of any of the terms of the agreement and failed to remedy the breach within 2 days after being requested to do so in writing by Hi Dow, the agreement could be terminated by Hi Dow without notice.
- Clause 4 (a) provides that the consultant shall provide the services…to standards, to the satisfaction of Hi Dow, and in the manner, frequency, quantity and time provided by this agreement and in accordance with applicable legislation.
- Clause 6.2 (ii) provides that the consultant will “maintain and shall ensure that the nominated executive maintains, the highest standards of professional conduct in the discharge of the services.”
- Clause 11 deals with conflict of interest and provides that the appointment of the consultant is not an exclusive engagement. It also provides that to ensure no conflict of interest, the consultant is to disclose to Hi Dow full details of any potential business or personal transaction involving the consultant or nominated executive.
- Clause 13 provides that the consultant is to comply with all applicable legislation including without limitation, obtaining and maintaining all licences which are legally required to be held by the consultant to provide the services.
- In short, the Tribunal found in respect of each clause that there was insufficient evidence to establish material breach. We do not find any error of fact or law with respect to these issues.
- We also find that Hi Dow was, in any event, unable to terminate without notice on the basis of a breach of these terms because no written notice had been given of the breach, depriving Shivlosh of the opportunity provided under clause 14.2 (a) to remedy the breach.
- We accordingly reject this ground of appeal.
Alternatively, was the Tribunal was in error in failing to find Hi Dow was entitled to terminate without notice under clause 14.2 (f)
- Hi Dow submits that the Tribunal was in error in failing to find that Hi Dow was not entitled to terminate without notice under clause 14.2 (f).
- The Tribunal found Hi Dow effectively terminated the agreement on 9 May 2014 when it told Mr Chand he would only be required 1 day a week. This was found to constitute a repudiation of the contract by Hi Dow which was accepted by Mr Chand on behalf of Shivlosh by email on 22 May 2014.
- Clause 14.2 (f) permits termination without notice where:
The consultant or the nominated executive is or becomes continually or significantly absent or neglectful in, or demonstrates incompetence with regard to, the performance of the services under this agreement.
- This clause requires Hi Dow to establish that Shivlosh or Mr Chand were either “continually” neglectful or incompetent with regard to the performance of services under the agreement. In purporting to establish this Hi Dow placed reliance on an invoice provided by Craig Baker & Associates, the accountants brought in by Hi Dow after Mr Chand left.
- The Tribunal found that this invoice did not establish negligence or incompetence on the part of Mr Chand.
- We do find any error on the part of the Tribunal. While the rules of evidence do not apply in the Tribunal, it is relevant that no witness was called to verify its contents. There was no evidence sufficient to establish that the errors complained of fell short of the standards required by the contract. In particular, while the invoice refers to data not being usable and errors having been made, it does not establish that these errors necessarily attracted the application of clause 14.2 (f). There is no opinion evidence, for example, as to whether these errors were of a nature and extent sufficient upon which to base a finding of continual neglect or incompetence on the part of Mr Chand.
- Further, even if the content of the invoice had been sufficient, the document was of little evidentiary weight. It was in the nature of an invoice rather than a report, it was not sworn and was generated by a person who was not called to give evidence. There was therefore no witness for Shivlosh to cross examine on these aspects which were fundamental to the allegations made against it.
- In summary, we are not prepared to find that grounds existed entitling Hi Dow to summarily terminate the contract based on a document in the nature of an invoice, unsupported by a witness, in circumstances where the content fell short of establishing that, if Mr Chand did act or, that it constituted continual neglect or incompetence by him. There was therefore no error on the part of the Tribunal in this regard.
- Shivlosh claimed unpaid wages totalling $3 586.96 and an amount representing an adjustment of fees to reflect an agreed increase which comes to $1 287.96. The Tribunal found the fees were owing. The parties were found to have agreed to an increase in the consultancy rate effective from 6 January 2014. The amount of $1 287.96 represented an adjustment to the fees paid to Mr Chand from that time to take account of the increase. There is no basis to disturb that finding.
- Finally, the Tribunal exercised its discretion to award costs in the respondent’s favour of $294.60, which was the filing fee the respondent paid to commence the proceedings. We see no basis for interfering with the exercise of that discretion. We therefore allow that claim.
- For the reasons above, we grant leave to appeal and allow the appeal in respect of the claim for payment in lieu of notice.
- The decision of 26 November 2014 is set aside. Instead it is ordered that Hi Dow pay Shivlosh $5, 169.52 by 5 November 2015.
- If Hi Dow has paid Shivlosh $12, 343.43 pursuant to the decision of 26 November 2014 then Shivlosh shall pay Hi Dow $ 7, 173.91 by 5 November 2015.
 Consultancy Agreement dated 4 July 2013 between Hi Dow Australia Pty Ltd and Shivlosh Australia Pty Ltd t/as Shiva’s Business Services, Item C and clause 4.
 Ibid, clause 7 (b).
 Ibid, Schedule 3.
 Ibid, Clause 5.
 Transcript 1-38 at 15.
 QCAT Act s 142(1).
 Pickering v McArthur  QCA 294 at .
 Accident Towing and Advisory Committee v Combined Motor Industries Pty Ltd  VR 529 at 547 citing Saif Ali v Sydney Mitchell & Co (A Firm)  AC 198 at 212.
 Appellant’s submission dated 20 April 2015.
 Cormack v Queensland Police Service –Weapons Licensing Unit  QCATA 115
 Clarke v Japan Machines (Aust) Pty Ltd (1984) 1 QdR 404 at 408.
  QCA 158 at .
 Transcript at 1-40 at para 15-20.
 QCAT Act ss 10 and 11.
 QCAT Act s 8; Schedule 3.
 Alexander v Ajax Insurance Co Ltd  VLR 436 at 445.
 Clause 5 permits payment in lieu of 1 weeks written notice of termination to be given in limited circumstances, namely following a review of the consultant’s performance on or before 1 November 2013.
 Clause 14.1 of the Consultancy Agreement.
  QCATA 180.
 Ibid at  referring to Martin v Tasmania Development and Resources (1999) 89 IR 98 at .
 QCAT Act, Schedule 3.
 Goddard Elliott (a firm) v Fritsch  VSC 87; Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd  FCA 84; (1987) 14 FCR 215.
  QCATA 65
 Ibid at .
 Ibid at .
  1 NSWLR 640.
  1 NSWLR 640.
  QCATA 65.
 (1996) 40 NSWLR 165.
 Ibid at 186.
 Holman v Deol  1 NSWLR 640.
 Early Group Valuers Pty Ltd v Cavallaro  QCATA 65 at .
 Morales v Murray Lyons .
 McDonald v Kenmore Podiatry.
 Davy v Ryter.
 Safe and Sound Building Society v SRJ Audit Pty Ltd  QCATA 109 at .
 Consultancy Agreement, Schedule 2.
 See below at .
 Transcript 1-41 at 15.
 Clause 14.2(f).
 Transcript at 1-40 at 25-30.
 Transcript 1-38 at .
- Published Case Name:
Hi Dow Australia Pty Ltd v Shivlosh Australia Pty Ltd
- Shortened Case Name:
Hi Dow Australia Pty Ltd v Shivlosh Australia Pty Ltd
 QCATA 155
Senior Member Stilgoe AM, Member Traves
21 Oct 2015