QE Family Pty Ltd ACN 138 123 154 v QBE Insurance Limited ACN 000 000 948 & Anor (Appeal)
[2021] ACAT 117
•30 November 2021
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
QE FAMILY PTY LTD ACN 138 123 154 v QBE INSURANCE LIMITED ACN 000 000 948 & ANOR (Appeal) [2021] ACAT 117
AA 3/2021 (XD 842/2020)
Catchwords: APPEAL – civil dispute – allegations of damage caused to vehicle by roadside assistance technician – allegation that damage was caused to electrical components by jumpstarting the vehicle – allegation of malicious damage – wrong entity sued in original proceedings – appellant contended tribunal erred by considering material filed by respondent in original proceedings – consumer and insurance warranties – exclusion clause – grounds of appeal fail – appeal dismissed
Legislation cited: ACT Civil and Administrative Tribunal Act 2008 ss 23, 79, 82
Australian Constitution s 109
Competition and Consumer Act 2010 (Cth)
Insurance Contracts Act 1984 (Cth) s 7
Judiciary Act 1903 (Cth) s 80
Cases cited:ACN 120 452 744 Pty Ltd v Newham Business Brokers Pty Ltd [2021] ACAT 37
Annetts v McCann [1990] HCA 57
B & T Constructions (ACT) Pty Ltd v Construction Occupations Registrar and the Owners – Units Plan 3324 [2013] ACTSC 219
Excel Intelligent Pty Ltd v Thomson [2018] ACAT 4
Giusida Pty Ltd v Commissioner for ACT Revenue [2016] ACTSC 275
Harada v Barnes [2021] ACAT 66
In the Matter of AB [2018] ACAT 18
Oliver v Registrar, Domestic Animals Act 2000 [2021] ACAT 93
Tam v Du [2019] ACAT 94
Tribunal:Acting Presidential Member Prof. P Spender
Senior Member K Katavic
Date of Orders: 30 November 2021
Date of Reasons for Decision: 30 November 2021
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) AA 3/2021
BETWEEN:
QE FAMILY TRUST PTY LTD ACN 138 123 154
Appellant
AND:
QBE INSURANCE LIMITED ACN 000 000 948
First Respondent
AND:
QBE INSURANCE (AUSTRALIA) LIMITED ACN 003 191 035
Second Respondent
TRIBUNAL:Acting Presidential Member Prof. P Spender
Senior Member K Katavic
DATE:30 November 2021
ORDER
The Tribunal orders that:
The appeal is dismissed.
………………………………..
Senior Member K Katavic
For and on behalf of the Tribunal
REASONS FOR DECISION
The reasons below explain why the Tribunal has made the orders set out above. In the reasons below, a reference to ‘ACAT’ or ‘tribunal’ refers to the ACT Civil and Administrative Tribunal generally, whereas ‘Tribunal’ or ‘Appeal Tribunal’ refers to the current panel. When referring to the first instance decision, the Tribunal uses the expression ‘original decision’, ‘original tribunal’, ‘Presidential Member’ ‘or the ‘original’ or ‘first instance’ proceedings/decision. The appellant is referred to as the ‘appellant’ or the ‘applicant’ when referring to the original proceedings or ‘QE’. Dr Quach was the authorised representative of the appellant and acted on its behalf. The respondent in the original proceedings was QBE Insurance Ltd ACN 000 000 948, which is generally referred to in these reasons as ‘the first respondent’ because it was the first respondent in the original proceedings and in the appeal. Intermittently is it also referred to as ‘QBE Ltd’. The other company involved in these proceedings is QBE Insurance (Australia) Ltd ACN 003 191 035. This company shall be referred to as ‘the second respondent’, ‘QBE Australia’ or ‘QBEA’. QBEA was added as second respondent to the appeal by the orders made on 16 February 2021. It was never a party in the original proceedings.
As much as possible, documents referred to in this decision will be referenced in the Appeal Book. However, the Appeal Book (which was predominately prepared by the appellant) is incomplete so it will be necessary from time to time to refer to material that was filed in the first instance proceedings, that is, on the tribunal file.
Summary of decision
The appeal has been dismissed because no error of fact, law or discretion has been demonstrated by the appellant.
What must be established on the appeal?
On 16 February 2021[1] orders were made in the appellate proceedings which state that the appeal was to be conducted by way of review of the original decision pursuant to section 82 of the ACT Civil and Administrative Tribunal Act 2008 (the ACAT Act). Pursuant to section 79(3) of the ACAT Act, a party to the original application may, by application, appeal the decision to the tribunal on a question of fact or law.
[1] Appeal Book pages 170-171
The case law on section 79(3) of the ACAT Act was set out by the tribunal in ACN 120 452 744 Pty Ltd v Newham Business Brokers Pty Ltd[2] and the present Tribunal relies on this statement for the purpose of consistency:
The case law has interpreted section 79(3) of the ACAT Act to mean that the appellant must show an error of fact or law in the decision under appeal and that the error affected the result.[3] In Excel Intelligent Pty Ltd v Thomson,[4] the tribunal distilled some important principles[5] that were discussed by Burns J in B & T Constructions (ACT) Pty Ltd v Construction Occupations Registrar and the Owners – Units Plan 3324.[6] … The principles are stated as follows (with some paraphrasing to apply the principles to the present context):
(a) An appeal tribunal must determine whether the decision appealed against is wrong because … an original tribunal fell into an error of law, made a finding of fact that is clearly wrong or exercised a discretion on a wrong principle or in a way that is clearly wrong.
(b) Ordinarily, if there has been no further evidence admitted or no relevant change in law, an appella[te] tribunal in entertaining an appeal … can exercise its appellate powers only if satisfied that there was an error on the part of the original tribunal below.
(c) The appeal tribunal will give proper allowance to the advantage of the original tribunal who saw and heard the witnesses, so that, ordinarily, facts found based on the assessment of witnesses will not lightly be overturned.
(d) The appeal tribunal is obliged to conduct a real review of the reasons of the original tribunal.
(e) Once error below has been found (after making proper allowance for the advantages of the original tribunal), the appeal tribunal can substitute its own decision based on the facts and the law as they now stand.[7]
[2] [2021] ACAT 37 at [4], cited by Oliver v Registrar, Domestic Animals Act 2000 [2021] ACAT 93 at [17]
[3] Tam v Du [2019] ACAT 94 at [22], citing Giusida Pty Ltd v Commissioner for ACT Revenue [2016] ACTSC 275 at [29]-[39]; Excel Intelligent Pty Ltd v Thomson [2018] ACAT 4 at [46]-[55]; In the Matter of AB [2018] ACAT 18 at [41]
[4] [2018] ACAT 4
[5] [2018] ACAT 4 at [53]
[6] [2013] ACTSC 219 at [13] ff
[7] Excel Intelligent Pty Ltd v Thomson [2018] ACAT 4 at [53]
These principles have guided the Appeal Tribunal when reviewing the first instance decision and reaching its conclusion. The Appeal Tribunal has concluded that the appeal should be dismissed because the appellant did not demonstrate an error of fact or law in the reasoning of the original tribunal or that the original tribunal exercised a discretion on a wrong principle or in a way that is clearly wrong.
Background
The appellant was the registered owner of a 2018 model Mercedes-Benz 250 wagon (the vehicle) which was covered by a comprehensive insurance policy with Mercedes-Benz Financial Services Pty Ltd. The policy of insurance was at all material times underwritten by QBE Insurance (Australia) Limited (QBEA or the second respondent).
On 29 October 2019 Dr Quach, on behalf of the appellant, called Mercedes-Benz Roadside Assistance (MBRA) to attend premises at Red Hill. A mechanic from Allianz Global Assistance (RA) attended the premises on behalf of MBRA as the roadside assistance provider (RAP). The vehicle was jumpstarted and Dr Quach signed a docket given to him by the RA on behalf of the RAP.[8] Dr Quach disputes that he consented to the vehicle being jumpstarted and says that Mercedes-Benz cars cannot be jumpstarted. Dr Quach took the vehicle to Peter Warren Automotive on 8 November 2019 who provided a report.[9] Mr Andrew McKenzie made a report about the vehicle on 21 November 2019 on behalf of Australian Accident Management Commercial (AAMC Report).[10] On 6 March 2020 and 19 March 2020 Dr Quach took the vehicle to Mercedes-Benz Canberra and service invoices were provided by them.[11]
[8] Appeal Book page 65
[9] Appeal Book page 41
[10] Appeal Book page 29
[11] Appeal Book pages 89-90, filed with the application in the original proceedings on 21 July 2020
An application in matter number XD 842/2020 was filed by QE Family Pty Ltd with Dr Quach acting as the authorised representative on 21 July 2020 against QBE Insurance Ltd (the first respondent).
The application in XD 842/2020 was dismissed on 16 December 2020 by the original tribunal, constituted by a Presidential Member. This matter concerns an appeal filed on 12 January 2021 regarding the original decision.
Substantive issues
In the original proceedings Dr Quach asserted that damage was occasioned to the electrical component of the vehicle on 29 October 2019 following the jumpstarting of the vehicle. In the original claim Dr Quach asserted that the resultant damage was malicious damage and that the first respondent should process his claim for malicious damage and restore the vehicle to new condition.
QBE Ltd’s response in the original proceedings is dated 17 November 2020.[12] The response:
(a)denied that the electronic damage was caused to the vehicle by a jumpstart and said that the issues described in the claim are not consistent with resultant damage from jumpstarting the vehicle;
(b)denied that a claim had been lodged for malicious damage;
(c)did not admit that the vehicle suffered from intermittent electronic failures and disruptions;
(d)stated that the claim for electrical/electronic damage was specifically excluded under the insurance policy; and
(e)argued that the tribunal did not have powers to make injunctive orders for specific performance under a contract of general insurance which was the remedy sought by the applicant as such an order is too vague and impossible for the respondent to meet.
[12] Appeal Book page 107
The response included other arguments that were not pursued in the original proceedings and have therefore been omitted.
The first respondent made submissions dated 14 December 2020[13] that raised additional issues such as:
(a)the applicant had commenced and maintained proceedings against the incorrect entity;[14]
(b)the applicant’s claim was deficient for the following reasons:[15]
(i) There was no evidence as to the basis or correctness of the applicant’s claim that a Mercedes-Benz vehicle cannot be jumpstarted.
(ii) There was no evidence that the act of jumpstarting the vehicle caused any electrical damage to the vehicle.
(iii) Any electrical or electronic damage sustained to the vehicle had now been repaired or rectified.
(iv) There is no claim in civil law for the act of malicious damage. Malicious damage is a criminal offence which requires intention.
[13] First respondent’s submissions dated 14 December 2020
[14] First respondent’s submissions dated 14 December 2020 at [10]
[15] First respondent’s submissions dated 14 December 2020 at [54]-[60]
On the basis of the aforementioned factors the first respondent submitted that the applicant’s claim must fail.
Procedural steps
As previously stated, on 21 July 2020, QE commenced proceedings in the tribunal by way of a civil dispute application against QBE Insurance Ltd ACN 000 000 948.
The application was served on the first respondent on 4 September 2020 by the tribunal sending a copy of the civil dispute application by pre-paid post to the first respondent. In accordance with rule 107 of the ACAT Procedures Rules 2020 the first respondent was required to file a response 21 days after the application was served.
The matter first came before the tribunal on 6 November 2020.[16] At this time the first respondent had not lodged a response. The tribunal on that occasion made the following orders:
1. the matter is adjourned for an Assessment Hearing on Wednesday, 25 November 2020 at 2:30 pm.
2. The applicant must give to the Tribunal and the respondent by 16 November 2020 a copy of the insurance policy, or correspondence with the respondent regarding the malicious damage claim and any other material relied upon in support of claim.[17] [emphasis in original]
[16] At the time the application was lodged the tribunal had modified its usual operations in response to the COVID-19 pandemic which resulted in the application being listed in a call over list.
[17] Appeal Book page 105
On 17 November 2020, the first respondent filed and served a response in the original proceedings denying the claim.[18]
[18] Appeal Book page 107
On 18 November 2020 and 19 November 2020, the applicant filed some additional material including copies of correspondence and an invoice for the insurance policy that stated that QBEA was the insurer.[19] However, this document did not contain the terms of the insurance policy which were in the Product Disclosure Statement (PDS).
[19] Appeal Book pages 51-52
On 24 November 2020 the tribunal received some material filed by the first respondent dated 19 November 2020.[20] This further material included the PDS.[21]
[20] First respondent’s submissions and evidence dated 19 November 2020
[21] First respondent’s submissions and evidence dated 19 November 2020 page 47 ff
On 25 November 2020, the matter came before a different tribunal member. The tribunal ordered as follows:
1. The applicant is to file any reply by 9 December 2020.
The Tribunal notes:
The applicant objects to the submission of the respondent’s documents filed 24 November 2020.
2. The matter is adjourned to Wednesday, 16 December 2020 at 10:00 am for determination of jurisdictional issues and the applicant’s objections to the respondent’s documents.[22]
[22] Appeal Book page 138
The appellant did not file anything further in reply.
On 14 December 2020 the first respondent filed further submissions.[23]
The first instance hearing on 16 December 2020
[23] Appeal Book page 139
The hearing proceeded before a Presidential Member on 16 December 2020.
The original tribunal had all the material filed by the parties. Dr Quach made various applications during the hearing, for example, that the material filed by the first respondent should be disregarded. Dr Quach also answered questions posed by the Presidential Member and made various submissions.
Following the hearing the Presidential Member made the following orders:
1. The oral application that the Tribunal disregard the documents filed by the respondent is refused.
2. The oral application to set aside the procedural orders of 25 November 2020 listing the matter for hearing today, is refused.
3. The application filed 21 July 2020 is dismissed.[24]
[24] Appeal Book page 163
The reasoning of the Presidential Member for dismissing the application may be summarised as follows:
(a)The Presidential Member was not satisfied that the correct respondent had been named. She indicated that she was not going to go ahead to hear a matter against the wrong respondent. She noted that the application had not been served on the correct respondent.[25] The Presidential Member noted that the matter had been before the tribunal on multiple occasions and the applicant had been on notice of this issue for some time. The applicant could have sought to amend the application to name the correct respondent but had not done so. The applicant had had the opportunity to sue the right entity but the first respondent was the wrong entity.
(b)The Presidential Member was not satisfied that the application would, in any event, be successful on the basis of the evidence that had been filed. The evidence consisted of a number of assertions from Dr Quach that a Mercedes-Benz cannot be jumpstarted. The Presidential Member stated: “[t]his is not a known fact”.[26]
(c)The Presidential Member stated that the only evidence that had been put forward by the applicant was the report from Peter Warren Automotive.[27] That report did not, on its face, indicate that any resetting of the computer had been done. It indicated only that Peter Warren had prepared a printout of the error codes being shown.[28] She had no third-party evidence that the actions recommended by the RAP had been followed.[29]
(d)The Presidential Member stated that she only had Dr Quach telling her that he had taken the car in on multiple occasions. This was the point of view of a non-mechanic and is not as reliable as the point of view of the person actually doing the work.[30] So, from the original tribunal’s point of view there is a lack of evidence that the damage to the car was caused by the jumpstarting.[31]
(e)With regard to the claim for malicious damage, the Presidential Member found that there was absolutely no evidence that it was a criminal act. No one had been charged with the crime, there had been no investigation and the person who did the work was not even on notice that this assertion was being made.[32] There was a complete paucity of evidence to justify this claim.[33]
(f)Finally, and in the alternative, there is an exclusion clause in the contract of insurance for electrical damage so that was another basis on which the claim would/could not proceed and be granted.[34]
[25] Transcript of proceedings on 16 December 2020 page 14
[26] Transcript of proceedings on 16 December 2020 page 14
[27] Appeal Book page 37
[28] Transcript of proceedings on 16 December 2020 page 14
[29] Transcript of proceedings on 16 December 2020 page 14
[30] Transcript of proceedings on 16 December 2020 page 14
[31] Transcript of proceedings on 16 December 2020 page 14
[32] Transcript of proceedings on 16 December 2020 pages 14-15
[33] Transcript of proceedings on 16 December 2020 page 15
[34] Transcript of proceedings on 16 December 2020 page 5
The Presidential Member stated she would dismiss the application and orders to that effect would be sent out.
The grounds of appeal
Submissions by the appellant and the respondents regarding the alleged errors
The Appeal Tribunal has grouped the alleged errors in the manner they were grouped by the appellant for the purpose of accurately setting out its arguments. However, there may be disagreement about how an alleged error should be characterised. Importantly, in this case the Appeal Tribunal has found no errors so the characterisation is not material. Nevertheless, the Appeal Tribunal will set out the arguments below as originally put by the appellant to be clear that they have all been taken into account by the Appeal Tribunal. There is some overlap in the grounds.
The appellant’s revised list of errors of fact, law or discretion is dated 22 March 2021.[35]
[35] Appeal Book page 5 ff
The first and second respondents responded to these alleged errors in their response and submissions dated 14 April 2021.[36] The Appeal Tribunal could not discern any difference in the response/submissions made by the first and second respondents, so their responses and submissions are dealt with collectively. The Appeal Tribunal will follow the numbering of paragraphs of the documents filed by the appellant on 22 March 2021.
[36] Respondents’ Response, Appeal Book page 175 ff; Respondents’ Submissions, Appeal Book page 183 ff
The alleged errors of fact, law and discretion and the respondents’ position regarding these alleged errors are set out below.
The alleged errors of fact are as follows:
(1) QBE can make a determination that the damage to the car was a warranty issue under the Competition and Consumer Act 2010 (Cth) – Australian Consumer Law (ACL).
The respondents said the damage to the Mercedes-Benz does not arise from the appellant’s grounds of appeal.
(2) Due to the first respondent’s default, on 6 November 2020, a Senior Member ordered that an assessment hearing be conducted in the proceedings. The tribunal conducted a substantive hearing on 16 December 2020 which was an error of fact.
The respondents denied that the orders made by the Senior Member were as result of the first respondent’s default. The orders made the Senior Member on 6 November 2020 were for an assessment hearing but the material specified in those orders was provided by the first respondent on 17 November 2020.
(3) The hearing before the Presidential Member on 16 December 2020 was not scheduled for 2 hours.
The respondents said that Dr Quach was not able to join the proceedings until 10:29 am, almost half an hour after the proceedings were listed to commence. Dr Quach was able to present his case in full to the tribunal.
(4) An argument about Presidential Member Robinson’s recusal.
The respondents denied that the contents indicate error by the tribunal.
(5) QBEA’s [sic] submissions were accepted by ACAT without leave after 6 November 2020.
The respondents said the tribunal was correct in allowing the submissions as it allowed the first respondent to present its case in a concise manner which assisted not only the tribunal by the appellant as well.
(6) The original tribunal should not have considered the material that had been filed late by the first respondent under section 109 of the Australian Constitution.
The respondents denied that the contents of this allegation indicate error by the tribunal.
(7) It is an error of fact that QBEA did not have knowledge of the case brought against it by the insured.
The respondents said the issue of knowledge of the proceedings by the second respondent does not arise from the appellant’s grounds of appeal.
(8) QBEA [sic] defaulted by not making submissions before 6 November 2020.
The respondents said this is not an error of fact by the tribunal. On 6 November 2020, the second respondent was not a party to the proceedings.
(9) It was an error of fact that QBEA [sic] had leave from the tribunal after 6 November 2020 when the Senior Member ordered an assessment hearing. No leave from ACAT was granted.
The respondents denied that the tribunal erred in fact. MBRA sent their agents Allianz Global Roadside Assist to the appellant’s residence on 29 October 2019. Roadside assist referral docket number 1078352 was served with the appellant’s bundle of documents on 17 November 2020. The docket is listed as incident 1900 2911 and is signed by Dr Quach. The box which states “vehicle has been jumpstarted and must be driven as soon as possible to an authorised dealer to have the battery fully bench charged and electrical system reset as necessary” has been ticked.[37]
[37] Appeal Book page 65
(10) It was an error of fact that the wrong entity was in attendance. The right respondent – QBEA – was in attendance on 16 December 2020 before the Presidential Member.
The respondents said the issue of the entity in attendance for the first respondent does not constitute an error of fact. Proceedings were commenced and maintained against the incorrect respondent. There was no error of fact in the Presidential Member’s findings.[38]
[38] Transcript of proceedings on 16 December 2020 pages 12, 14
(11) It was an error of fact that the RAP recommended to [Dr Quach] that he take [the vehicle] to the dealership to reset. “After 29 October 2019 did you ever take it to the dealer and get the electrical system reset as per the recommendation from the roadside service, yes or no”?[39]
[39] Transcript of proceedings on 16 December 2020 page 9
The respondents denied that the original tribunal erred in fact in relation to the recommendation.
(12) The statement by the Presidential Member that “Mercedes can’t be jump started. That is not a known fact” was an error of fact. The appellant argued that he did not consent for his car to be jumpstarted.
The respondents said this statement by the Presidential Member was based on the evidence presented to the tribunal on behalf the appellant.
(13) The statement by the Presidential Member that the only evidence put forward by the applicant was the report from Peter Warren Automotive and that report does not on its face indicate that any resetting of the computer was done. This is an error of fact – the Presidential Member expressed her personal opinion that Peter Warren Automotive is not competent to diagnose fault codes from electrical damage after a jumpstart.
The respondents denied that the Presidential Member erred in fact in commenting that the report does not on its face indicate that any resetting of the computer was done.[40] The Presidential Member added that the report “only indicates that it had prepared a printout of the error codes being shown”.[41] The Presidential Member did not express the view that Peter Warren Automotive is not competent to diagnose fault codes from electrical damage after a jumpstart. The original tribunal’s fact finding – that the report from Peter Warren Automotive only indicated that it had prepared a printout of the error codes being shown – was the correct decision based on the evidence before the tribunal.
[40] Transcript of proceedings on 16 December 2020 page 14
[41] Transcript of proceedings on 16 December 2020 page 14
(14) The Presidential Member made an error by stating that she had no third-party evidence that the actions recommended by the RAP were followed. The appellant argued that this is an error of fact. The RAP did not make any recommendations to take the car to be serviced. They attended the flat battery. There is documentation of the service of the car following the jumpstart.
The respondents denied that the tribunal erred in fact in relation to the lack of third-party evidence that the actions recommended by the service provider was followed.
(15) The comments by the Presidential Member that she “understands the point of view of the non-mechanic about what’s happening when you hand your car over but it is not as reliable as the point of view of the person actually doing the work”. This is an error of fact because Dr Quach explicitly objected to his car being jumpstarted by the RA. The damage caused by the RA jumpstarting the car without his consent was malicious.
The respondents denied that the contents of this allegation indicate an error by the tribunal.
(16) There was a lack of evidence that the damage to the car was caused by the jumpstarting.[42] Dr Quach expressly objected to jumpstarting the car. The RA recklessly jumpstarted the car.
The respondents denied the tribunal erred in fact. The tribunal’s fact-finding in this regard was correct and based on the evidence before the tribunal.
(17) The finding that there was no evidence of a criminal act was challenged. The report from Peter Warren Automotive shows multiple faults which arose from the jumpstart. The appellant asserted that this should be compared with a car which was just 11 months old – there should be no fault codes seen at all.
The respondents denied that the tribunal erred in fact-finding that there is absolutely no evidence that the jumpstarting of the vehicle was a criminal act, that it was malicious damage. Malicious damage is a criminal offence. It is not a civil wrong with remedies available concerning which the tribunal can make orders. The tribunal’s fact-finding in this regard was the correct decision based on the evidence before the tribunal.
(18) The finding by the Presidential Member that there was an exclusion clause in the contract was erroneous. ‘There is no exclusion [unless made] by plain words of necessary intendment’ (citing Annetts v McCann [1990] HCA 57 at [2] (Annetts)).
The respondents denied that the tribunal erred in finding that there was an exclusion for electrical damage in the contract of insurance and therefore the claim could not proceed nor be granted. No evidence of malicious damage was presented by the appellant. The tribunal’s fact-finding in this regard was the correct decision based on the evidence before the tribunal.
[42] Transcript of proceedings on 16 December 2020 page 14
The alleged errors of law are as follows:
(19) The acceptance by the tribunal of QBEA’s [sic] submission after the hearing on 6 November 2020 was a breach of various federal laws such as section 109 of the Australian Constitution and section 80 of the Judiciary Act 1903 (Cth) (Judiciary Act).
The respondents denied the tribunal made an error of law in allowing the first respondent’s submissions into evidence. The submissions of the first respondent were provided in written form so the first respondent’s position relation to the application was able to be articulated to both the tribunal and the appellant. The Presidential Member noted[43] the submissions did no more than expand upon what was in the filed response. In relation to the response filed, the Presidential Member correctly stated as follows: “it was clearly contemplated that the respondent would be able to provide material and the nature of the material filed would then dictate the future course of the matter”.[44]
(20) It was “an error of law that QBEA can make a determination (assessor’s report) that the damage to the car is a warranty claim to affect” the ACL. This flows from section 7 of the Insurance Contracts Act 1984 (Cth)
The respondents said any issues relating to the determination by QBEA in relation to the damage to the vehicle does not arise from the appellant’s grounds of appeal.
[43] Transcript of proceedings on 16 December 2020 page 7
[44] Transcript of proceedings on 16 December 2020 page 6
The alleged errors of discretion are as follows:
(21) The appellant provided extensive submissions in tabular form about the language used by the Presidential Member in the original decision which correlated with the principles of Newspeak which is a fictitious language in the novel 1984 by George Orwell.
The respondents said the appellant’s submissions relating to the dystopian novel 1984 written by George Orwell are not recognised as statutory or case law precedents therefore the respondents’ representative would not comment on this aspect of the appellant’s submissions.
The parties’ submissions
The submissions filed by the appellant on 22 March 2021[45] repeated most of the material in the revised list of alleged errors of fact, law or discretion which is set out above. There was a slight variation however in the following submission which is set out below, with the response by the respondents, made on 13 April 2021:[46]
(a)That QBEA had full knowledge of the civil dispute claim brought against them but decided not to respond and defaulted.[47] This submission was made in relation to both the first respondent and QBEA.
(b)The first respondent admitted that its submissions were filed out of time and not in compliance with the tribunal’s order however stated there was a great deal of documentation and other evidence supplied to assist the tribunal in reaching a decision in the first instance proceedings.[48]
(c)The second respondent admitted that it had full knowledge of the dispute but said that the appellant had commenced and continued proceedings against the wrong entity. The second respondent noted that the Presidential Member stated that “the appellant had been on notice of the issue for some time. He could have sought to amend his application to name the correct respondent, he hasn’t done it”.[49] The second respondent contended that it was not the case that it had decided not to respond and defaulted.[50]
Consideration
[45] Appeal Book page 18 ff
[46] Respondent’s response dated 13 April 2021, Appeal Book page 175 ff
[47] Appeal Book page 19
[48] Respondents’ response dated 13 April 2021 at [24], Appeal Book page 180
[49] Transcript of proceedings on 16 December 2020 page 14
[50] Respondents’ response dated 13 April 2021 at [23], Appeal Book page 179
The Appeal Tribunal has reorganised the grounds of appeal somewhat to effectively organise and deal with the arguments made by the appellant. This may be summarised as follows:
(a)Alleged errors of discretion – the original tribunal should not have considered the material filed by the first respondent filed on or about 17 November 2020 and 24 November 2020 nor considered the written submissions dated 14 December 2020 setting out the first respondent’s position.
(b)Alleged errors of fact – the original tribunal was wrong to conclude the following:
(i) A Mercedes-Benz can be jumpstarted.
(ii) The vehicle was jumpstarted (this is not disputed).
(iii) The applicant had not proved that the jumpstarting caused damage to the vehicle.
(iv) The evidence relied upon by the appellant i.e., the report prepared by Peter Warren Automotive, did not prove the alleged damage nor did it prove that any alleged damage was caused by the jumpstarting.
(v) Dr Quach was advised to take the vehicle to the dealer to get it checked as soon as possible after the jumpstarting.
(vi) there was an exclusion clause in the contract of insurance which exempted the second respondent from any obligation to allow the claim made by appellant on its insurance.
(c)Alleged error of law – the claim for malicious damage was not sustainable because this is a criminal action which was not applicable to this claim.
(d)Other alleged errors – the claim under the insurance policy was a warranty claim under the ACL.
Alleged errors of discretion
The errors of discretion alleged by the appellant consisted of the decision of the Presidential Member to consider the material that was filed by the first respondent on 17 November 2020, 24 November 2020 and 14 December 2020. The tribunal has extensive powers to determine its own procedure.[51] It was well within the power of the Presidential Member to consider the material filed by the first respondent. Such a consideration is however subject to the obligations of procedural fairness to the appellant.
[51] ACAT Act section 23
There is no doubt that the first respondent did not file its material in compliance with the Tribunal orders and QBEA has conceded that it had knowledge of the proceedings. However, the proceedings had been commenced against the wrong entity and the applicant knew that this was the case. The applicant did not take any steps to remedy this defect.
The first respondent should have put on a timely response that specified that proceedings had been commenced against the wrong entity and therefore clarify the position of the first respondent. By failing to do so it exposed itself to default judgment, that is, judgment in default of appearance because it had taken no step in the original proceedings by failing at the threshold to even file a response. This was the path that the original proceedings were travelling along when the Senior Member made the order for a hearing on the assessment of damages on 25 November 2021. The Senior Member on this occasion did not enter judgment against the first respondent nor did she make any final orders. So, behaving as a vigilant litigant, the first respondent should have filed a response within the required timeframe, to deny liability on the basis that the applicant had sued the wrong entity and perhaps seek to strike out the claim. Its failure to do so exposed it to default judgment. Had such a default judgment been entered, it was still open to being set aside upon review by the tribunal. The Appeal Tribunal had no explanation from the representatives of the first respondent as to why it failed to comply with the tribunal’s orders although these explanations may have been provided in the several directions hearings that occurred in the original proceedings.
Therefore, the first respondent failed to respond to the application within the required timeframe however the question is whether the appellant was denied procedural fairness by the hearing proceeding on 16 December 2020.
There is no evidence that the appellant suffered any prejudice as the result of the late filing of the material by the first respondent.
To reiterate the point about the filing of material in the original proceedings:
(a)On 17 November 2020, the first respondent filed and served a response in the original proceedings denying the claim.
(b)On 18 November 2020 and 19 November 2020, the applicant filed some additional material.
(c)On 24 November the tribunal received some material filed by the first respondent dated 19 November 2020.
(d)On 14 December 2020 the first respondent filed further submissions.
The applicant/appellant had the first respondent’s response and further material weeks ahead of the hearing. The submissions filed on 14 December 2020 came late but the appellant has not specified any disadvantage that it suffered as a result of the late filing of the further submissions on 14 December 2020. Significantly, the appellant received the first respondent’s response around 17 November 2020[52] and was on notice from at least that date and probably earlier that the wrong entity had been sued. As a consequence, the appellant had sufficient notice of both the first respondent’s response and its submissions prior to the hearing on 16 December 2020 and had ample opportunity to rectify the error regarding the proper respondent.
[52] Appeal Book page 107 ff
The Presidential Member raised the late filing of the first respondent’s submissions with Dr Quach at the hearing as follows:
What I would like to do today is ask Dr Quach if he has any oral response to the matters set out in the submissions, but they really do no more than expand upon what was in the filed response. So I don’t see that there’s any great surprise factor in there.[53]
[53] Transcript of proceedings on 16 December 2020 page 7
In answering the Presidential Member, Dr Quach referred to the AAMC Report. His answer was not responsive to the question raised by the Presidential Member.[54]
[54] Transcript of proceedings on 16 December 2020 pages 7-8
Importantly, the appellant has not put forward any evidence nor made any submissions in either the original proceedings or in the appeal about prejudice that it suffered as a consequence of the late submission of the material by the first respondent. Although the late submission is regrettable there is no error of discretion in the Presidential Member proceeding with a substantive hearing on 16 December 2020. The Presidential Member was entitled to do so consistent with the powers available to her under section 23 of the ACAT Act. The Appeal Tribunal rejects the appellant’s submission that this constituted a breach of various federal laws such as section 109 of the Australian Constitution and section 80 of the Judiciary Act.
The Appeal Tribunal notes that the hearing at first instance was relatively short. To some extent this was caused by Dr Quach attending the hearing 30 minutes later than the time scheduled. However, Dr Quach still had an opportunity to present his case during the hearing and the original tribunal had the benefit of previous written submissions and evidence that had been provided by both the appellant and the first respondent in the original proceedings. The Presidential Member questioned aspects of the evidence that required consideration and delivered oral reasons at the end of the hearing. The Appeal Tribunal does not consider that the hearing was in any way deficient in terms of procedural fairness. Further, the material that was provided by the first respondent in November and December 2020 assisted the tribunal.
The appellant has not established the alleged errors in the exercise of discretion by the Presidential Member in the first instance proceedings.
Alleged errors of fact
Whether the vehicle was jumpstarted and whether the appellant followed a recommendation to take the vehicle to an authorised dealer as soon as possible to have the battery fully bench checked and the electrical system reset as necessary
The appellant alleged that the Presidential Member made an error of fact by finding that the RA had recommended that the vehicle be taken to a dealership to have the electrical system reset. The Presidential Member made the following statement in the hearing on 16 December 2021:
I have no third-party evidence that the actions recommended by… Mercedes-Benz roadside assistance were followed.[55]
[55] Transcript of proceedings on 16 December 2020 page 14
The appellant seems to have alleged that the RA did not make any recommendation to take the car to the service. This assertion is contradicted by documentary evidence.
The roadside assistance referral document number 1078352 (the RA Docket) was served with the appellant’s bundle of documents on 18 November 2020 therefore formed part of the evidence that was considered by the original tribunal.[56] The docket is listed as incident 19002911 and was signed by Dr Quach. The box (stating that the vehicle has been jumpstarted and must be driven as soon as possible to an authorised dealer to have the battery fully bench checked and electrical system reset as necessary) has been ticked. This document constitutes independent evidence of the recommendation that was made by the RA.
[56] Appeal Book page 65
Dr Quach challenged this finding on the basis of an assertion that Mercedes cannot be jumpstarted and the Presidential Member stated that this is not a known fact. She said:
[O]n the evidence that has been filed, I have a number of assertions from Dr Quach that Mercedes can’t be jump started. That is not a known fact.[57]
[57] Transcript of proceedings on 16 December 2020 page 14
Dr Quach merely asserted this fact and did not present any additional, independent evidence in support of this assertion. It was perfectly appropriate for the Presidential Member to prefer the probative value of the document that was created at the time of the incident rather than relying on the unsupported assertion of Dr Quach. The Presidential Member concluded there was a lack of third-party evidence that the action recommended by the RA was followed by Dr Quach.
Evidence was led by Dr Quach in relation to the condition of the vehicle via the Peter Warren Automotive report. However, this report did not establish that Dr Quach had taken the vehicle in a timely way to have it checked as recommended by the RA or to support the proposition put by Dr Quach that Mercedes-Benz cars cannot be jumpstarted.
The Presidential Member noted that there was no third-party evidence led by Dr Quach in support of the proposition that Mercedes cars cannot be jumpstarted. Dr Quach stated in the appeal proceedings that he didn’t consent to the car being jumpstarted. This does not disprove that the car was in fact jumpstarted, as revealed by the documentary evidence in the form of the RA Docket. The RA Docket contemporaneously proves the opposite finding – that Dr Quach did consent to the car being jumpstarted – but in any case, his consent to the jumpstarting is a side issue. The RA Docket is proof that the vehicle was jumpstarted and there was a recommendation that the vehicle be taken as soon as possible to an authorised dealership to have the battery fully bench checked and the electrical systems reset as necessary. There was no evidence led by the applicant that the vehicle was not jumpstarted other than his general assertions that one cannot jumpstart Mercedes cars and no evidence that he followed the RA’s recommendation as stipulated in the RA Docket that he had signed.
Did the jumpstarting cause damage to the vehicle?
In relation to the question about whether the jumpstarting caused any damage to the car, the Presidential Member found that the only evidence put forward by the appellant was a report from Peter Warren Automotive and she concluded that the report does not on its face indicate that any resetting of the computer was done or that the vehicle was damaged by the RAP’s actions. The Presidential Member added that the report only indicates that Peter Warren had “prepared a printout of the error codes being shown”.[58]
[58] Transcript of proceedings on 16 December 2020 page 14
The error codes are not explained nor is an explanation given as to their cause. In particular, the Appeal Tribunal agrees with the proposition put by the respondents that Presidential Member did not expressly state Peter Warren Automotive is not competent to diagnose fault codes from electrical damage after a jumpstart, however all that the report from Peter Warren Automotive demonstrated was that some error codes were being shown. It did not establish that the jumpstart caused any damage or more particularly that the error codes demonstrated that the car was damaged in some respect. The Presidential Member concluded that there was a lack of evidence that the damage to the vehicle, if any, was caused by the jumpstarting.
The Peter Warren Automotive document may indicate that there was some activity in the car’s electrical system. However, the document does not prove that the jumpstarting of the vehicle, as established by the finding of fact just discussed, caused electrical damage to the vehicle. The evidence before the original tribunal indicated that there was a contention that various repairs needed to be made to the vehicle before the second respondent would proceed with an insurance claim e.g. the AAMC Report that was filed with the applicant’s material in the original proceedings on 18 November 2020.[59] However, the appellant has not made any arguments about this document during the appeal therefore the Appeal Tribunal does not take it into account.
Is a criminal act required for malicious damage claim?
[59] Appeal Book page 29
The Appeal Tribunal agrees with the respondents and the original tribunal that malicious damage is a criminal offence. It is not a civil wrong pursuant to which the tribunal can make orders. The Presidential Member concluded that there was absolutely no evidence that the jumpstarting of the vehicle was a criminal act, and one would have anticipated that the person who did the work would have been put on notice that this assertion was being made.[60] The Appeal Tribunal agrees that there was no evidence before the original tribunal that any criminal acts had occurred and therefore there was no evidence to support the appellant’s claim for malicious damage.
[60] Transcript of proceedings on 16 December 2020 page 15
There is no error demonstrated in the Presidential Member’s findings of fact.
The exclusion clause in the insurance policy
The appellant argued that the finding by the Presidential Member that there was an exclusion clause in the contract was erroneous. The policy was in evidence at first instance and on appeal. It was filed by the first respondent in the material received by the tribunal on 24 November 2020. The policy expressly states at the following in section 1 of the PDS:
Cover for your vehicle
…
What you are not insured against
We do not cover your vehicle for the following:
…
(c) failure or breakdown of a structural, electrical, mechanical or electronic nature
This exclusion clause excluded liability for electrical or electronic failure or breakdown (electrical damage). It is worth considering the remedy that was being sought by the appellant in the original proceedings. The applicant was seeking specific performance of the contract of insurance. There is some question about whether the tribunal had jurisdiction to make such an order, particularly since the appellant sought the alternative remedy of the replacement value of the car which would have exceeded the tribunal’s jurisdiction of $25,000.
There is no error of fact or law demonstrated by this ground of appeal. The Presidential Member reasoned the outcome of this issue in the alternative. It was only necessary to consider the issue if the other elements of the applicant’s claim had been established. However, in the original proceedings the appellant did not establish that the vehicle had suffered from electrical damage and did not establish that the electrical damage (even if proved) was caused by the jumpstarting of the vehicle. Assuming for a moment that electrical damage had been so caused, the Presidential Member found that electrical damage was exempted from the insurer’s obligations under the contract of insurance by the provisions set out above in section 1 of the PDS.
If the applicant was able to get to the point in the original proceedings where he could rely on the insurance policy, the exclusion clause would operate to preclude him from recovering on the claim that had been filed in the tribunal. The appellant points to a strict construction of exclusion clauses via judicial statements in Annetts.[61] It is not clear how the relevant judicial statements in Annetts apply to the current situation but in any case, the appellant did not put any arguments about the construction of the exclusion clause. The exclusion clause is plain, and even if a strict construction is applied, the outcome of the appeal will be the same on the authority of Tam v Du.[62] The Appeal Tribunal will not disturb a first instance decision if the outcome would be the same.
[61] [1990] HCA 57 at [2]
[62] [2019] ACAT 94 at [22]
There is no error of law or fact demonstrated by the approach adopted by the original tribunal in the original proceedings.
Other grounds
Warranty claim under the Competition and Consumer Act 2010 (Cth)
In addition to the matters that were raised at first instance, on appeal the appellant argued that QBEA had made a determination about the damage to the vehicle and it was a warranty claim under the ACL. This matter was not raised at first instance and leave was not sought by the appellant to adduce further evidence to support this additional claim. Therefore, the respondents rightly state that the warranty issue does not arise from the appellant’s grounds of appeal. The tribunal has made orders that the conduct of the appeal is to proceed by way of review of the original decision. It is important that tribunal decisions at first instance are not “second-guessed” by appellants.[63] Given that this issue was not raised at first instance and no application was made by the appellant to proceed by way of rehearing or to adduce further evidence, this ground is disregarded by the Appeal Tribunal.
Other alleged errors – miscellaneous
[63] Harada v Barnes [2021] ACAT 66 at [8]
In addition to the grounds that are discussed above, the appellant made several miscellaneous arguments that included section 109 of the Australian Constitution, the Judiciary Act and the recusal of tribunal members. These arguments were considered by the Appeal Tribunal but found to be irrelevant to the original proceedings.
The appellant made several submissions about the relationship between the first and second respondents that the Appeal Tribunal mentions now for the sake of completeness. The first argument was that QBEA had knowledge of the original proceedings. QBEA has conceded that it was aware of the original proceedings. This fact is peripheral to question of whether the second respondent was a party to the original proceedings. They are separate entities and are not to be confused as the same thing. QBEA clearly was never a party in the original proceedings therefore cannot be bound by any order of the tribunal in those proceedings. The second argument is that overlapping directors between the first and the second respondents is somehow relevant. It is not relevant to the fact that the second respondent was never a party to the original proceedings as previously discussed.
Conclusion
No error of fact, law or discretion has been demonstrated by the appellant. The appeal is therefore dismissed.
………………………………..
Senior Member K Katavic
For and on behalf of the Tribunal
Dates of hearing: | 11 May 2021 |
Appellant: | In person |
Counsel for the Respondents: | Ms N Nelson |
Solicitor for the Respondents: | Mr S Ivcovici, Hoyle Da Silva Lawyers |
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