Sauer v Nuheara Ltd[2023] QCATA 155

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

1. [1]
   Nuheara Limited is a wearable hearing technology company, trading on the Australian Stock Exchange. In May of 2020, Nuheara made an offer to current shareholders to enter into a Share Purchase Plan (SPP) whereby current shareholders could purchase additional capital in the company.
2. [2]
   Warwick Sauer applied through the SPP and Nuheara issued 588,235 shares for his consideration of $10,000, at a price of $1.70 per share. Mr Sauer says he should have received 625,000 shares at a price of $1.60 per share. This shortfall, he claims, has caused him a loss of $661.77.
3. [3]
   Nuheara explains that the difference is due to Exception 5 of ASX Listing Rule 7.2 prohibiting the shares being issued at less than $1.63. Nuheara says it rounded up the share price to $1.70.
4. [4]
   Mr Sauer filed an application for minor civil dispute. The learned Adjudicator ordered that the matter be dismissed.
5. [5]
   Mr Sauer has appealed that decision, on the following grounds:

   1. denial of natural justice by permitting and accepting without prejudice communications; and
   2. errors of fact and law by concluding that the shares were rightly rounded to $1.70 under Exception 5.

A threshold problem

6. [6]
   Although it was not mentioned in the learned Adjudicator’s decision, nor in any of the filed material, there is a fundamental problem with Mr Sauer’s application: the Tribunal did not have jurisdiction to determine his claim.
7. [7]
   Schedule 3 of the Queensland Civil and Administrative Tribunal Act 2009 defines a minor civil dispute to include claims arising out of a contract between a consumer and trader (or between two traders) for payment of money of a value not more than the prescribed amount.
8. [8]
   Schedule 3 also defines trader as a person in trade or commerce who carries on a business of supplying goods or services.
9. [9]
   A consumer is an individual who buys or hires goods, or for whom services are supplied for fee or reward.^[1]
10. [10]
    An individual shareholder purchasing additional shares in a company is not a consumer. Nor do they bear a trading or commercial character.^[2] Mr Sauer is neither a consumer nor a trader.
11. [11]
    Mr Sauer’s claim is not a minor debt either, as it cannot be readily calculated by some agreed formula.^[3] Rather, it is a claim for breach of contact.
12. [12]
    Therefore his claim falls outside the minor civil dispute jurisdiction of the Tribunal.
13. [13]
    Clause 1.8 of the Constitution of Nuheara states:

1.8  Jurisdiction

The courts having jurisdiction in Western Australia have non-exclusive jurisdiction to settle any dispute arising out of or in connection with this Constitution and each Shareholder irrevocably submits to the jurisdiction of those courts.

14. [14]
    The Tribunal is not a court with jurisdiction in Western Australia, and therefore this claim should have been brought in those courts.
15. [15]
    The Tribunal does not have jurisdiction to hear the application brought by Mr Sauer. It follows that the learned Adjudicator did not have the power to hear the claim or to make any order.

Merits of the Appeal

16. [16]
    Although the decision was made without jurisdiction, I will briefly consider the merits of the appeal.
17. [17]
    An appeal will only 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.^[4]
18. [18]
    At the hearing, a director of Nuheara made reference to a ‘without prejudice’ response by Mr Sauer to a written offer to settle by Nuheara.^[5] Mr Sauer objected to its inclusion in submissions.^[6]
19. [19]
    While the ‘without prejudice offer’ was mentioned in the oral reasons as a preliminary remark, the learned Adjudicator then went on to give her substantive reasons considering the SPP, Nuheara Constitution, Listing Rules and the Corporations Act. Simply mentioning the offer in her reasons, does not mean that the learned Adjudicator relied on that fact. I cannot find any substantive injustice to Mr Sauer.
20. [20]
    As to the alleged errors of fact and law, the learned Adjudicator was entitled to find that Nuheara was justified under the ASX Listing Rules, the Company Constitution and the SPP to issue the shares at $1.70 and I can find no reason to come to a different view.

Orders

1. Leave to appeal is refused.