Constable v Anvic Holdings P/L

[2001] NSWSC 444

CITATION:	Constable v Anvic Holdings P/L & Ors [2001] NSWSC 444
CURRENT JURISDICTION:	Common Law Division Administrative Law List
FILE NUMBER(S):	SC 30008 of 2001
HEARING DATE(S):	23 May 2001
JUDGMENT DATE:	30 May 2001
PARTIES :	Robert Julian Constable (Plaintiff) v Anvic Holdings Pty Limited (formerly called Tilecraft (Aust) Pty Limited) (First Defendant) Prestige Tiles Pty Limited (Second Defendant) Fair Trading Tribunal of New South Wales (Third Defendant)
JUDGMENT OF:	Master Malpass

LOWER COURT JURISDICTION :	Fair Trading Tribunal
LOWER COURT FILE NUMBER(S) :	BU 1999/199
LOWER COURT JUDICIAL OFFICER :	J P Gallagher

COUNSEL :	Mr S A Kerr (Plaintiff) Mr A J Thompson (First Defendant) N/A (Second Defendant) N/A (Third Defendant)
SOLICITORS:	Colin Biggers & Paisley (Plaintiff) Brook Worthington (First Defendant) Stephen Blanks & Associates (Second Defendant) I V Knight - Crown Solicitor - Submitting Appearance (Third Defendant)
CATCHWORDS:	Application for rehearing - stay, extension of time - nature of the relief provided by s 63 - fair and equitable - rules of natural justice and procedural provisions - policy of tribunal in dealing with applications for rehearing and rehearing.
LEGISLATION CITED:	Fair Trading Tribunal Act 1998, s 3; Pt 4 s 25, s 27, s 31, s 32; Pt 6 ss 60, 61, 62, 63 and 64.
CASES CITED:	Holloway v Chairperson of Residential Tribunal of New South Wales BC200005147.
DECISION:	See Paragraphs 48 - 50.

THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
ADMINISTRATIVE LAW LIST

MASTER MALPASS

WEDNESDAY 30 MAY 2001

30008 of 2001 ROBERT JULIAN CONSTABLE v ANVIC HOLDINGS PTY LTD (formerly TILECRAFT (AUST) PTY LTD) & ORS

JUDGMENT


1   The Summons in this matter was filed on 25 January 2001. The plaintiff seeks inter alia the setting aside of orders made by the Fair Trading Tribunal (the Tribunal) on 3 October 2000 and 15 December 2000.

2   The plaintiff had brought proceedings in the Tribunal. The first and second defendants were the other parties in these proceedings. The plaintiff sought the recovery of a monetary sum in relation to the supply of allegedly defective tiles. The first defendant was the supplier of the tiles. It had acquired the tiles from the second defendant (which has been described as the importer and the franchiser of the first defendant).

3   The court has been informed that the plaintiff was seeking relief as against the first defendant and that the first defendant was looking to the second defendant for indemnity.

4   The Tribunal (Member Kelly) made an order against the first defendant (the payment of the sum of $66,659). Also, it ordered the first defendant to pay both the costs of the plaintiff and the second defendant (the claim for indemnity being unsuccessful).

5 The first defendant brought an application for rehearing pursuant to s 63 of the Fair Trading Tribunal Act 1998 (the Act). The second defendant was not named as a party to that application. The rehearing application was brought out of time and accordingly an extension of time was sought. A letter accompanying the form of application set out inter alia the reasons relied on in support of the extension application. The alleged substantial injustice was set forth in an Annexure “A” to the application form. Further, a stay of the order to pay the monetary sum “pending rehearing” was sought.

6   Although this was not what had been sought, a stay of the orders made by the original Tribunal on 13 August 2000 pending the determination of the application for rehearing was granted on 3 October 2000 (apparently by the Tribunal). The plaintiff and the second defendant were not given notice of the application for the stay and were not given an opportunity to present their respective cases or to be heard on the application.

7   The plaintiff became aware of the applications after the stay had been granted. A letter dated 10 October 2000 from his solicitor to the Tribunal (seeking a copy of the application and the opportunity to make submissions) appears to have received no response. The evidence supports the contention of the second defendant that it was unaware of the applications prior to their determination.

8   On 15 December 2000, the delegate for the Chairperson (Senior Member Gallagher) granted both the application for extension of time and the re-hearing and set aside the orders made on 13 August 2000. These orders were made even though the second defendant was not made a party to the application and without giving either the plaintiff and the second defendant an opportunity to present their respective cases or to be heard on the applications.

9   A letter dated 16 October 2000 sets out the policy adopted by the Tribunal in dealing with applications for re-hearing. The policy is apparently based on the view taken that the application is decided “on the face of the application”.

10   The Tribunal has been made a third defendant to these proceedings. It has filed a submitting appearance and has not sought to participate in the hearing.

11   All parties have presented detailed arguments. Numerous questions have been agitated (although certain of them did not have to be fully argued). Largely, this is because of the difficulties thrown up by the language of the relevant statutory provisions. I propose to determine only those matters which are necessary to dispose of what is before the court.

12   If the matter had been free of statutory complication it does not seem to be in dispute that the requirements of procedural fairness would have had application (involving inter alia the other parties being given notice of the applications and at least an opportunity to be heard in relation to each of them). What was done by the Tribunal affected the rights of the other parties.

13 The court has given consideration to provisions similar to s 63 (see inter alia Holloway v Chairperson of Residential Tribunal of New South Wales BC200005147). Competing submissions have been made to the court on the question of whether or not the approach taken in Holloway should be followed in this case.

14   It is convenient at this stage to look at certain of the provisions of the Act. It is an Act which has expressed objects (s 3). It is said that the objects are inter alia to ensure that the Tribunal is accessible, its proceedings are efficient and effective and its decisions are fair; and to enable proceedings before the Tribunal to be determined in an informal, expeditious and inexpensive manner.

15   The Chairperson has various statutory functions prescribed by the Act. He is an executive officer and a member of the Tribunal.

16 Part 4 of the Act deals with “Procedure of Tribunal”. I shall expressly mention some of the provisions contained therein. Section 25 thereof requires the notification of the application to be served on other parties. Section 27 thereof contains provisions dealing generally with the procedure. Sub-section (1) enables the Tribunal, subject to the Act, to determine its own procedure. Subsection (2) contains a proviso “subject to the rules of natural justice”. Subsection (3) provides that it is to act inter alia “according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal form”. Section 31 makes provision for circumstances in which the Tribunal may proceed without holding a hearing. The relevant circumstances are not present in this case. Section 32 is in the following terms:-
“ Opportunity for parties to present case
The Tribunal must ensure that every party to proceedings before the Tribunal is given a reasonable opportunity:
(a) to adduce evidence and otherwise present the party’s case (whether at a hearing or otherwise), and
(b) to make submissions in relation to the issues in the proceedings.”

17   Part 6 of the Act deals with “ Appeals and rehearings ” . It comprises sections 60 - 64. Section 60 generally excludes review by prerogative writ. Section 61 provides a right of appeal to the Supreme Court on a question of law. Section 62 enables referral of questions of law to the Supreme Court. Section 63 provides for rehearings. Section 64 deals with the effect of the lodgment of an appeal or application for rehearing and the staying of the operation of a decision the subject of an appeal or application under Part 6.

18 Provisions of s 63 relevant to the granting of an application for rehearing are as follows:
“ Rehearings
(1) Except where the regulations preclude the making of an application under this section, a party to proceedings before the Tribunal may, in the manner and within a time prescribed by the regulations, apply to the Chairperson for an order directing that the matter be reheard by the Tribunal, on the ground that the applicant may have suffered a substantial injustice because:
(a) the decision of the Tribunal was not fair and equitable, or
(b) the decision of the Tribunal was against the weight of evidence, or
(c) evidence that is now available was not reasonably available at the time of the hearing.
(2) The Chairperson is not to grant the application unless, on the face of the application, it appears to the Chairperson that the applicant may have suffered a substantial injustice.”

19 A principal submission made on behalf of the plaintiff is that s 63 is not an avenue which enables a party to ventilate a question of law. It is said that the legislation has made it clear that questions of law are to be ventilated by way of appeal to this Court under s 61. Not surprisingly, the first defendant took issue with these submissions.

20   The reasons for the decision made on 15 December 2000 are an annexure to an affidavit sworn by the plaintiff. Although the application sought to agitate both questions of fact and law, it was common ground that the delegate found it sufficient to dispose of the application on a matter of law only.

21   The court has been referred to what has been said on the second reading of the Fair Trading Tribunal Bill. The second reading contained inter alia the following:-
“ In addition to appeal rights to the Supreme Court, the Fair Trading Tribunal Bill provides that parties may, in certain classes of cases, seek the leave of the tribunal for an internal rehearing. The rehearing provisions are targeted to the lower level disputes, of a value of $25,000 or less, in which appeal rights to the courts are limited to the grounds of jurisdiction and natural justice. The cost and delay involved in taking an appeal to a superior court operates to dissuade parties from pursuing their rights. These factors are exacerbated where the matter in dispute is of a relatively low value. This new tier of appeal provides an accessible option for parties to pursue their rights. The grounds for seeking a rehearing are that the decision made was not fair and equitable or was against the weight of evidence, or that there is fresh evidence.
In addition, in all instances a party must show that substantial injustice has resulted from the decision. The grounds are not legalistic and enable a party to seek leave to be reheard without the need to seek legal assistance as a matter of course. The rehearing provisions do not amount to open season for disgruntled litigants who may wish to drag out a dispute and clog up the tribunal. The leave procedures ensure only meritorious claims are allowed to be pursued. Where leave to be reheard is granted the matter is dealt with afresh, and may be heard before a panel of members. The normal procedures of the tribunal apply to such rehearings. I have outlined here the major features of the Fair Trading Tribunal which gives a feel for what this important initiative will achieve when enacted. I believe that the Fair Trading Tribunal will provide an improved regime for the resolution of consumer and marketplace disputes. I commend the bills to the House.”

22 Minds may differ as to whether what was said on the second reading affords real assistance in construing s 63. There is confusion and conflict in what has been said. At least in relation to this principal submission, the better view seems to be that it gives support to the contention that what has been described as either a leave application or a tier of appeal is not to be read down by reason of what appears in other provisions contained in Pt 6.

23   What is clear is that an application can only be granted on the ground that the applicant may have suffered a substantial injustice because of any of the matters enumerated in (a), (b) and (c) of subsection (1). It is common ground that what is contemplated by the specific matters enumerated in (b) and (c) does not involve any question of law. However, for present purposes, the court is concerned only with what is contemplated by matter (a).

24   In reaching the decision the delegate was satisfied that any order the Tribunal could have made was limited to $25,000. He was therefore satisfied that the order to pay the sum of $66,659 was not fair and equitable. It was then concluded that the first defendant may have suffered a substantial injustice.

25   The meaning of the expression “fair and equitable” is far from clear. It is not defined in the Act. It has to be read in its context. The words “fair” and “equity” appear independently elsewhere in the Act. Also, the expressions “good conscience” and “the substantial merits of the case” may be found therein. What is to be found in the second reading speech goes to the general nature of the entitlement being conferred rather than to the specific meaning to be given to “fair and equitable”.

26   It might be thought that if the Legislature intended the section to confer a general entitlement to seek leave or an appeal (including on a question or error of law), it would have said so rather than using language which circumscribes the entitlement by what is said in (a), (b) and (c). By using such language, a limited avenue of challenge has been indicated. The reading speech contains material which appears to convey an intention to provide an accessible option for parties to pursue rights of appeal in relation to lower level disputes limited to the specified grounds or certain classes of cases. It suggests that it is a process which ensures that only meritorious applications are pursued.

27   Whatever “fair and equitable” may mean, (a) could be expected to embrace any decision that was not fair and equitable for whatever reason. It is said that the grounds are not legalistic. Accordingly, it could be expected that it was not intended to introduce some novel principle of fairness and equity or application of equitable principles or discretionary power which of itself can be applied to override legal principle for the purpose of the granting of an application for rehearing.

28   Both the second reading speech and the statute give support to the view that it was had in mind that “fair and equitable” entitled a looking at matters of merit falling within the limits of that expression and in doing so putting aside of matters of technicality and legal formality. The difficulty is in identifying those limits. Whatever they be, I am not satisfied that they exclude legal error.

29   However, it is unnecessary for me to further pursue this question. On what has been put in this case, I am not persuaded that I should accept the plaintiff’s submission.

30   The interpretation to be given to the expression “on the face of the application” was also a contentious matter. One view was that it embraced only what was comprised in the formal application itself. Another view was that it embraced also other material. In the event that this was the proper view, there was issue as to what other material was had in contemplation. Fortunately, these considerations can also be left for another day.

31   In this case, the delegate did look to other material (inter alia he had regard to the reasons for the Tribunal’s decision). In reaching his decision, the delegate made final determinations on questions of law. It seems to me that whatever procedures are appropriate for dealing with an application for rehearing, the purported making of such final determinations exceeds the function intended to be conferred by the statute (which was to either grant or refuse an application for rehearing). The jurisdiction is limited to a determination of whether or not the applicant may have suffered a substantial injustice because of any of the specified matters. In my view, it was not intended as a forum for the making of final determinations of matters in issue. It was contemplated that these be left for determination at any rehearing.

32   Further, as has been earlier said, these final determinations affecting the rights of the other parties were made without inter alia the other parties having an opportunity to be heard on the relevant matters.

33   Another principal issue between the parties was whether or not rules of natural justice needed to be observed by the Chairperson or his delegate when dealing with an application for rehearing. The first defendant took the approach that the legislation had made it clear that requirements such as the giving of notice and the opportunity to participate in the process had no role when there was a dealing with an application for rehearing.

34   In my view, the policy adopted by the Tribunal is based on misconception. I consider that, subsection (2) was not intended to oust the requirements of procedural fairness.

35   I do not read sub-section (2) as being intended to prescribe a special code of procedure for the dealing with any application made under the section. Rather, it seems to me, that it should be seen in the nature of a prohibition or threshold requirement. It is intended to operate so as to prevent the granting of an application unless, on the face of the application, it appears to the Chairperson that the applicant may have suffered a substantial injustice. If it does not so appear, he cannot grant the application. The power to grant the application is conferred by subsection (1).

36   During the course of argument, the question of the expectations of the applicant for the rehearing were not explored. The first defendant has not contended that it had a right to make submissions or to a hearing. It may be that as an initial step in the application process the statute allows the Chairperson to consider the application itself for the purposes of subsection (2). If the requirements of that subsection are not satisfied, it may be that he can then refuse the application without further ado. However, these matters were not argued and I take them no further.

37   Whether or not that approach is open under the legislation, it seems to me that once the situation arises where an adverse order affecting the rights of other parties is in contemplation, the other parties are entitled to have inter alia notice of the application and at least an opportunity to be heard on it before any such order is made. If this was not the case, there would be procedural unfairness to the other parties.

38   It seems to me that this view is at least reinforced, if not prescribed, by the relevant statutory provisions. I shall mention certain of them. An object of the Act is to ensure that the decisions of the Tribunal are fair. As has been earlier said, Part 4 prescribes the procedure to be followed in relation to applications to the Tribunal. The provisions contained in Pt 4 have an express proviso preserving the rules of natural justice. The language of s 32 contemplates application “whether at a hearing or otherwise”.

39   For completeness, I should add that the form of application in use is headed “Fair Trading Tribunal Rehearing Application”. Also, I observe that other documentation emanating from the Tribunal treats the dealing with the application as a decision of the Tribunal.

40 It has been said that comfort can be drawn from the reference to “the requirements of natural justice” in s 63 (3). However, it needs to be appreciated that this reference relates not to procedure to be followed in dealing with the application for rehearing but to the constitution of the Tribunal for the rehearing if the application is granted. The circumstances of each particular case and the requirements of natural justice are to be taken into account in determining the appropriate constitution. Matters of public importance or complexity may be of weight. Natural justice requirements may play a role in many cases. For example, if the application is granted because of inter alia matter (a), it may not be appropriate for the member who constituted the original tribunal for the hearing to participate in the rehearing.

41   It seems to me that the second reading speech also supports the view that I have taken. Whilst what has been said does throw up some confusion (the competing concepts of seeking the leave of the Tribunal for an internal rehearing and a new tier of appeal are mentioned), either of these concepts seem to me to contemplate a procedure in which the other parties have an entitlement to participate in the process of determining whether or not the application is meritorious.

42   Further, in this case, the plaintiff does not only rely on the lack of procedural fairness. He relies also on other error of law.

43 Whether or not it can be said that s 63 prescribes a special code of procedure for dealing with applications for rehearing, any such code has no application to the dealing with the matters of the granting of a stay and the granting of an extension of time. The source of power for the granting of this relief is to be found elsewhere in either other provisions of the Act or provisions of the Regulations. In dealing with these applications, the procedure prescribed by Pt 4 has operation. These provisions were not observed in relation to either application.

44   In addition to these matters, the plaintiff points to errors in the exercise of the discretion both to grant the stay and to extend time. It is not necessary to dwell on these matters. It suffices to say that there is substance in certain of them.

45   For completeness, I should also record that the plaintiff raised issue as to the correctness of the determinations made as to questions of law in the application for rehearing. These questions have not been fully argued and I have earlier expressed a view as to the making of them in the context of an application for rehearing.

46   Questions were agitated concerning the nature of the rehearing. There was debate as to whether a full rehearing only could be granted. There was debate as to the effect had by the purported final determination of questions of law made in the application for rehearing. However, it is not necessary for the court to express any view on these questions.

47 Section 63 (4) provides that the rehearing of the matter is be dealt with as a hearing de novo. There has been argument on the question of whether or not s 63 confers power to set aside the earlier orders. The section certainly does not expressly confer any such power. One view advanced, was that the orders should remain on foot subject to a stay pending the rehearing. Again this question has not been fully argued and need not be determined in these proceedings.

48   Accordingly, I am satisfied that the orders made by Senior Member Gallagher on 15 December 2000 should be set aside.

49   There was some debate as to whether or not there was presently a stay order on foot. There is documentation from the Tribunal which suggests that a stay pending the determination of the rehearing remains in force. This suggestion is in conflict with the orders made on the application for rehearing. If any stay does remain on foot, I order that it be set aside.

50   There was further dispute between the parties as to what should be done in the event of the court reaching this conclusion. The court has powers conferred by sections 60 and 61. Save as to dealing with the question of costs, I am not satisfied that any further order should be made in this case. On the question of costs, I order that the first defendant pay the costs of the proceedings.
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Last Modified: 05/30/2001