Beckley v Consumer, Trader and Tenancy Tribunal

Consumer Credit (New South Wales) Act 1995 LEGISLATION CITED : Consumer Credit (Queensland) Act 1994 Consumer, Trader and Tenancy Tribunal Act 2001

Absolon v NSW TAFE [1999] NSWCA 311 Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 Bahadori v Permanent Mortgages Pty Ltd [2008] NSWCA 150 Benjamin v Ashikian [2007] NSWSC 735 Craig v South Australia (1995) 184 CLR 163 Custom Credit Corporation Ltd (in liquidation) v Commercial Tribunal of New South Wales [1999] NSWSC 1021 CASES CITED : First Mortgage Managed Investments Ltd v Oberlechner [2006] NSWSC 1397 Jonsson v Arkway Pty Ltd [2003] NSWSC 815 Linkenholt Pty Ltd v Quirk [2000] VSC 166 Park Avenue Nominees v Boon [2001] NSWSC 700 Permanent Custodians Ltd v Upston [2007] NSWSC 223 Rafiqi v Wacal Investments Pty Ltd (1998) ASC 155-024 Shakespeare Haney Securities Ltd v Crawford [2009] QCA 8 Woodcrest Homes Pty Ltd v Fair Trading Tribunal [2002] NSWSC 552

Lisa Michelle Beckley (Plaintiff) PARTIES : Consumer, Trader and Tenancy Tribunal (First Defendant) Equity-One Mortgage Fund Limited (Second Defendant)

COUNSEL : P Batley (Plaintiff) T Lynch (Second Defendant)

Legal Aid NSW (Plaintiff) SOLICITORS : Crown Solicitors Office (First Defendant) Mills Oakley Lawyers (Second Defendant)

• 1 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

08/30005 LISA MICHELLE BECKLEY v CONSUMER TRADER AND TENANCY TRIBUNAL AND ANOR

The loan to the Plaintiff 1 On 17 March 2006 the Plaintiff accepted an offer from the Second Defendant, Equity-One Mortgage Fund Ltd ("Equity-One"), for a loan of $65,000 for two years. The purpose of the loan stated in the letter of offer was said to be "purchase shares and renovations". Immediately under that purpose the following appeared: "IMPORTANT! This has been derived from your application. If this purpose is incorrect, please write the purpose here:"

And then there was a line where the alternative purpose could be written. However, it was left blank. 2 Attached to the letter of offer and signed by the Plaintiff on the same day was a document headed "Declaration of purposes for which credit is provided". The document said: "I/we declare that the credit to be provided to me/us by the credit provider is to be applied wholly or predominantly for business or investment purposes (or for both purposes). IMPORTANT

You should NOT sign this declaration unless this loan is wholly or predominantly for business or investment purposes.

By signing this declaration you may lose your protection under Consumer Credit Code.

3 In March 2007, the Plaintiff filed an application with the Consumer, Trader and Tenancy Tribunal ("the Tribunal"). In that application she sought to reopen the contract, to extend its period and to renegotiate the terms and to stay enforcement proceedings. In her reasons for requesting the Orders (required by the Form) she said: "For reasons of hardship I am unable to meet the loan requirements now they have risen from $545 to $803 so therefore am unable to pay penalties that have now incurred. I am trying to find permanent work so as I can try and catch up arrears and refinance." 4 On 25 June 2007, the Tribunal made the following Order: "1. The application is dismissed because: No jurisdiction. Not a contract to which Consumer Credit Code applies." 5 On 11 January 2008 the Plaintiff brought the present proceedings in which she seeks orders in the nature of certiorari and mandamus in reliance on s 65 Consumer, Trader and Tenancy Tribunal Act 2001, and declarations that the Consumer Credit (NSW) Code applies to the credit contract and mortgage because the contract was for the personal, household or domestic purpose of the Plaintiff. The First Defendant is the Tribunal which has filed a submitting appearance. The Second Defendant is Equity-One which has appeared to defend the proceedings. 6 I have stated the facts in this bare form because they constitute the undisputed facts at the hearing of the proceedings before me. Those facts are taken from documents which, it is agreed, were before the Tribunal and upon which, it is said, the Tribunal made the Order set out above. Equity-One submitted (and I shall return to deal in substance with this argument later in this judgment) that I was not entitled to look at any other material when dealing with the application pursuant to s 65 because no other material was before the Tribunal. However, Mr Lynch who appeared for Equity-One accepted that it should be admitted provisionally so that the argument to be made about it could be understood. 7 The affidavit of the Plaintiff (which largely consists of this other material that was not before the Tribunal) discloses the background to the loan to be this. Since the Plaintiff's partner, who was the father of her two daughters, died from cancer in 1998 she has been on a Sole Parents Pension and a Parenting Payments Single. In about 2001 or 2002 the garage that was joined onto her house was destroyed by fire and parts of the house were also damaged. 8 Subsequently, Wyong Council directed demolition of the burnt out garage and repairs to the house. Because the Plaintiff was not able to carry out this work, presumably for financial reasons, the Council commenced proceedings against her in the Land and Environment Court, and that Court made orders that she demolish the garage and provide an engineer's report on the safety of the roof structure adjacent to the garage. 9 On 13 December 2005, the Council commenced contempt proceedings against the Plaintiff in the Land and Environment Court for non-compliance with the Court's orders. 10 The Plaintiff had obtained a quote from a builder for about $45,000 to do the work. She realised that she would have to mortgage her house to get a loan of that size and she already had a personal loan from Elcom Credit Union and had apparently given a mortgage to that organisation previously. Accordingly, the Plaintiff started to seek funds of $65,000 to pay for the building work and to pay out her loan with Elcom. 11 She was unsuccessful with banks and brokers and then she was given the name of Carol McLeod of Carob Consulting. Ms McLeod described herself as an accredited mortgage consultant and is said to be a finance broker. 12 Carol McLeod was initially unsuccessful in locating funds for the Plaintiff but one day in late February or early March 2006 Ms McLeod telephoned the Plaintiff and said: "A lender called Equity-One is prepared to lend you $65,000 but there is a problem. They don't do personal loans, they only give a loan on the condition that its described as a business loan."

There was a suggestion that the Plaintiff form a company to borrow the money but the Plaintiff said she did not want to do that. 13 Shortly afterwards Ms McLeod telephoned the Plaintiff again and told the Plaintiff that Dean from Equity-One suggested that the Plaintiff should say she was using the money to buy shares. (I should say that this particular aspect of the evidence was not tendered by the Plaintiff as to the truth of that statement by Dean from Equity-One but only that Ms McLeod told the Plaintiff that was what Dean said.) The Plaintiff said that she was 43 years old and that she had never purchased a share and she would not know how to go about it. Ms McLeod then said: "It doesn't matter. It's just to get the loan. You must never tell anyone that it was suggested to you to do this and if you do say that we suggested this, it will be denied." 14 Subsequently, Ms McLeod faxed various documents to the Plaintiff including the letter of 17 March 2006 to which I have made reference above. The Plaintiff signed the various documents and subsequently signed documents in front of a solicitor at Toukley, one of which was a statutory declaration tendered by Equity-One in which the Plaintiff declared that the credit being provided by the lender was to be applied wholly or predominantly for business or investment purposes. 15 The loan transaction settled a short time later with the Plaintiff receiving $43,398.68. The balance, or part of it, appears to have been used to pay out the previous loan that the Plaintiff had with Elcom Credit Union. 16 $40,000 of the loan was used to pay a company called Aldi Constructions to do work which the Plaintiff had been required to do on her home by the Council and, subsequently, by the orders of the Land and Environment Court. 17 In December 2006, the Plaintiff fell behind with her loan repayments and in February 2007 she received a default notice. 18 One of the documents that the Plaintiff had signed shortly after Ms McLeod identified Equity-One as a possible lender was a document which provided background details about the Plaintiff and the purpose of the loan. This document was annexure "J" to the Plaintiff's affidavit. It was not clear whether it was a document that ultimately came before the Tribunal or not. Mr Batley who appeared for the Plaintiff informed me that annexures A to I, L and M were not before the Tribunal. Mr Lynch was of the view that the only documents that were before the Tribunal were annexures K, M and O, although Mr Lynch did not know if the last two pages of annexure K, being a "Declaration of your ability to service this loan" signed by the Plaintiff were before the Tribunal. It does appear, however, that annexure J certainly came to the attention of Equity-One prior to the making of the loan. 19 The document relevantly said this: "Applicants net income position is $28,276 per annum. She is on a single parent pension with Centrelink and receives $100 per week from the boarder who has resided at her address for 7 years. Loan is to payout the existing personal loan with Elcom Credit Union $12,732, restore the burnt garage to its original state therefore restoring the value to the current market value. Majority of the funds will be for the purchase of shares for investment purposes. VG's valuation 1/7/2005 was $170k for land value. Request interest only loan for a four year period at which time the oldest child will no longer receive family tax benefits from Centrelink. Ms Beckley will either sell the property to downtrade or will have joined the workforce. This loan is unregulated as the majority of the funds are for investment purposes, 29.55% LVR. Capacity to pay has been demonstrated with an excellent payment history with the current personal loan. Recommend approval." (emphasis added)

Immediately underneath that was a declaration signed by the Plaintiff that the information in it and the attached statements were true and correct in every particular. 20 Section 65 of the Consumer, Trader and Tenancy Tribunal Act 2001 provides:

"65 Review by prerogative writ etc generally excluded (1) Except as provided by this section, a court has no jurisdiction to grant relief or a remedy by way of: (a) judgment or order in the nature of prohibition, mandamus, certiorari or other relief, or (b) declaratory judgment or order, or (c) an injunction, in respect of any matter that has been heard and determined (or is to be heard or determined) by the Tribunal in accordance with this Act or in respect of any ruling, order or other proceeding relating to such a matter. (2) A court is not prevented from granting relief or a remedy of a kind referred to in subsection (1) in relation to a matter in respect of which the jurisdiction of the Tribunal to determine the matter was disputed if the ground on which the relief or remedy is sought is that: (a) the Tribunal gave an erroneous ruling as to its jurisdiction, or (b) the Tribunal erred in refusing or failing to give a ruling as to its jurisdiction when its jurisdiction was disputed. (3) A court is not prevented from granting relief or a remedy of a kind referred to in subsection (1) in relation to a matter in respect of which the Tribunal has made an order if the ground on which the relief or remedy is sought is that: (a) the Tribunal had no jurisdiction to make the order, or (b) in relation to the hearing or determination of the matter, a party had been denied procedural fairness." 21 It should be noted that under s 67 of the CTTT Act there is a right of appeal to the Supreme Court from any decision on a question with respect to a matter of law by the Tribunal. Sub-section 8 provides: "(8) A reference in this section to a matter of law includes a reference to a matter relating to the jurisdiction of the Tribunal." 22 The Plaintiff's position, in short, was that s 65(2)(a) applied because the Tribunal gave an erroneous ruling as to its jurisdiction in saying that it had jurisdiction because it was not a contract to which the Consumer Credit Code applied. This was because the basis for the Tribunal's refusal of jurisdiction was the declaration concerning the predominant use of the loan funds, but in this case the declaration was ineffective under s 11(3) of the Consumer Credit Code. 23 Equity-One's position, in short, was that there was no erroneous ruling as to jurisdiction because the Tribunal assumed jurisdiction and then decided that the contract was not one to which the Code applied and therefore it dismissed the application by the Plaintiff.

The jurisdiction of the Tribunal 24 Section 21 of the CTTT Act provides that Tribunal has such jurisdiction to decide matters and such power to make orders as is conferred on it by the CTTT Act or any other Act. The jurisdiction it is given with respect to the Consumer Credit Code derives from s 8 of the Consumer Credit (New South Wales) Act 1995. 25 Section 5 of the Consumer Credit (New South Wales) Act provides that the Consumer Credit Code set out in the appendix to the Consumer Credit (Queensland) Act 1994 in force for the time being applies as a law of New South Wales. The Consumer Credit Code has apparently been adopted by Acts in all of the States and Territories so that it forms a national scheme. That obviously has the advantage that decisions in other jurisdictions can be used to construe and apply provisions in the Code. 26 Section 66 of the Code gives to the debtor under a credit contract a right to apply to the credit provider in certain specified circumstances to change the debtor's obligations under the credit contract in the ways specified in that section. Section 68 then goes on to provide: "(1) If the credit provider does not change the credit contract in accordance with the application, the debtor may apply to the Court to change the terms of the credit contract.

(2) The Court may, after allowing the applicant, the credit provider and any guarantor a reasonable opportunity to be heard, by order change the credit contract in the manner set out in s 66, and make such other orders as it thinks fit, or refuse to change the credit contract.

…" 27 The reference to "the Court" is, by virtue of s 5 of the New South Wales Act, a reference to the Tribunal. 28 But the "credit contract" referred to is only a contract under which credit is provided "being the provision of credit to which [the] Code applies" (s 5 of the Code). 29 Section 6 then sets out the type of contract to which the Code applies. It relevantly provides: "(1) This Code applies to the provision of credit (and to the credit contract and related matters) if when the credit contract is entered into or (in the case of pre-contractual obligations) is proposed to be entered into - (a) the debtor is a natural person ordinarily resident in this jurisdiction …; and (b) the credit is provided or intended to be provided wholly or predominantly for personal, domestic or household purposes;

… (4) For the purposes of this section, investment by the debtor is not a personal, domestic or household purpose;

(5) For the purposes of this section, the predominant purpose for which credit is provided is - (a) the purpose for which more than half of the credit is intended to be used; or (b) if the credit is intended to be used to obtain goods or services for use for different purposes, the purpose for which the goods or services are intended to be most used." 30 Section 11 of the Code contains presumptions relating to the application of the Code. The section provides: (1) In any proceedings (whether brought under this Code or not) in which a party claims that a credit contract, mortgage or guarantee is one to which this Code applies, it is presumed to be such unless the contrary is established. (2) Credit is presumed conclusively for the purposes of this Code not to be provided wholly or predominantly for personal, domestic or household purposes if the debtor declares, before entering into the credit contract, that the credit is to be applied wholly or predominantly for business or investment purposes (or for both purposes).

(3) However, such a declaration is ineffective for the purposes of this section if the credit provider (or any other relevant person who obtained the declaration from the debtor) knew, or had reason to believe, at the time the declaration was made that the credit was in fact to be applied wholly or predominantly for personal, domestic or household purposes. For the purposes of this subsection, a relevant person is a person associated with the credit provider or a finance broker (or a person acting for a finance broker) through whom the credit was obtained.

(4) A declaration under this section is to be substantially in the form (if any) required by the regulations and is ineffective for the purposes of this section if it is not. 31 The Plaintiff relies on s 11(3) by virtue of the knowledge that Ms McLeod had that the credit was in fact to be applied wholly or predominantly for personal, domestic or household purposes, that is, mainly for the building work on the house. In that regard, Ms McLeod was a finance broker referred to in the second sentence of subs (3). 32 The Plaintiff submits that, if there is no presumption under s 11(2) because under s 11(3) the Declaration signed by the Plaintiff is ineffective, one must examine the true meaning and operation of s 6(1)(b). There has been a divergence of opinion about how the s 6(1)(b) matter is to be determined. In Rafiqi v Wacal Investments Pty Ltd (1998) ASC 155-024 (Brabazon DCJ) and Park Avenue Nominees v Boon [2001] NSWSC 700 (Harrison AsJ) it was held that the purpose of the loan is what a reasonable person in the shoes of the credit provider understood that the loan was intended to be used for at the time the loan was made. 33 On the other hand, in Jonsson v Arkway Pty Ltd [2003] NSWSC 815 Shaw J (at [28] to [30]) followed Gillard J in Linkenholt Pty Ltd v Quirk [2000] VSC 166 and said that the matter had to be resolved by looking at the substance of the transaction in the context of its performance. Jonsson v Arkway was followed by Smart AJ in Benjamin v Ashikian [2007] NSWSC 735, and it is submitted in those circumstances that the approach of Shaw J represents the law in New South Wales. 34 If that is so, the Plaintiff submits, the substance of the transaction was predominantly for personal, domestic or household purposes because $40,000 of the loan was used to repair the Plaintiff's house. 35 Equity-One's submission is based on the distinction it makes between the Tribunal determining whether or not it had jurisdiction and determining whether or not the Code applied to the particular contract that the Plaintiff entered into. The latter determination was said to be one that was within the jurisdiction of the Tribunal and one that reflected findings of fact, with the result that the Tribunal's determination was not susceptible to certiorari nor rights under s 65(2)(a). 36 Support for this analysis was said to be derived from what the High Court said in Craig v South Australia (1995) 184 CLR 163 particularly at 175 to 177: "Where available, certiorari is a process by which a superior court, in the exercise of original jurisdiction, supervises the acts of an inferior court or other tribunal. It is not an appellate procedure enabling either a general review of the order or decision of the inferior court or tribunal or a substitution of the order or decision which the superior court thinks should have been made. Where the writ runs, it merely enables the quashing of the impugned order or decision upon one or more of a number of distinct established grounds, most importantly, jurisdictional error, failure to observe some applicable requirement of procedural fairness, fraud and "error of law on the face of the record". Where the writ is sought on the ground of jurisdictional error, breach of procedural fairness or fraud, the superior court entertaining an application for certiorari can, subject to applicable procedural and evidentiary rules, take account of any relevant material placed before it. In contrast, where relief is sought on the ground of error of law on the face of the record, the superior court is restricted to the "record" of the inferior court or tribunal and the writ will enable the quashing of the impugned order or decision only on the ground that it is affected by some error of law which is disclosed by that record.

In considering what constitutes "jurisdictional error", it is necessary to distinguish between, on the one hand, the inferior courts which are amenable to certiorari and, on the other, those other tribunals exercising governmental powers which are also amenable to the writ.

… An inferior court falls into jurisdictional error if it mistakenly asserts or denies the existence of jurisdiction or if it misapprehends or disregards the nature or limits of its functions or powers in a case where it correctly recognises that jurisdiction does exist. Such jurisdictional error can infect either a positive act or a refusal or failure to act. Since certiorari goes only to quash a decision or order, an inferior court will fall into jurisdictional error for the purposes of the writ where it makes an order or decision (including an order or decision to the effect that it lacks, or refuses to exercise, jurisdiction) which is based upon a mistaken assumption or denial of jurisdiction or a misconception or disregard of the nature or limits of jurisdiction.

Again, an inferior court will exceed its authority and fall into jurisdictional error if it misconstrues that statute or other instrument and thereby misconceives the nature of the function which it is performing or the extent of its powers in the circumstances of the particular case. In the last-mentioned category of case, the line between jurisdictional error and mere error in the exercise of jurisdiction may be particularly difficult to discern." 37 In addition, Equity-One relied on the statement of the High Court in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 341: "The expression "judicial review", when applied to the traditional review functions of the superior courts in our system of justice, exercisable by means of the prerogative writs and the grant of declaratory relief and injunction, ordinarily does not extend to findings of fact as such." 38 Equity-One submits also that the Tribunal is to be regarded as a court (as discussed in Craig) rather than what are described as "other tribunals exercising governmental powers" and relies in that regard on such decisions as Absolon v NSW TAFE [1999] NSWCA 311 at [146], Woodcrest Homes Pty Ltd v Fair Trading Tribunal [2002] NSWSC 552 and Custom Credit Corporation Ltd (in liquidation) v Commercial Tribunal of New South Wales [1999] NSWSC 1021.

The nature of any error of the Tribunal 39 In Bahadori v Permanent Mortgages Pty Ltd [2008] NSWCA 150 the appellants borrowed two amounts of money from two lenders which loans were secured by mortgages over property owned by the appellants. Some two years later the appellants filed applications in the Tribunal seeking relief under ss 70, 72 and 102 Consumer Credit Code - these are the sections that enable the Tribunal to reopen unjust transactions and review unconscionable interest and other charges. 40 The lenders raised as a preliminary issue before the Tribunal that it did not have jurisdiction to hear the applications on the ground that the Code did not apply to the credit contracts because, before entering into the transactions, the appellants had declared for the purposes of s 11(2) of the Code that the credit to be provided was to be applied wholly or predominantly for business purposes. A senior member of the Tribunal upheld the submission and ruled that the Tribunal did not have jurisdiction to hear and determine the subject applications. 41 From that decision the appellants brought proceedings in the Supreme Court under s 67 of the CTTT Act, claiming relief on the basis of an error of law by the Tribunal, apparently invoking at least in part s 67(8) - see at [17] - [20]. That application was dismissed by Harrison AsJ and an appeal was brought to the Court of Appeal. After judgment had been reserved by the Court of Appeal, the appellants were given the opportunity to seek the Court of Appeal's leave to file a new summons claiming relief under s 65 of the CTTT Act. Ultimately, the appellants were successful on the basis of the s 65 summons and unsuccessful in relation to the appeal brought on the basis of the s 67 summons. 42 In those circumstances, the principles established by the Court of Appeal in relation to those proceedings are directly applicable, in my opinion, to the decision in the present case. 43 Tobias JA, with whom Giles JA and Campbell JA agreed, first identified an important distinction in procedure between applications under s 65 and applications under s 67. He said at [33]: "As I have already observed, it is clear that an appeal under s 67(1) is confined to matters of law with the consequence that it is not open to the Supreme Court on any such appeal to make any findings of fact not agreed or expressly or inferentially made by the Tribunal or to substitute findings of fact for those made by the Tribunal. This is so even though such findings may be relevant to and determinative of the issue that is before the Tribunal and in respect of which error of law is alleged. On the other hand, invoking of that Court's jurisdiction under s 65 would enable it to make such findings of fact as were necessary in order to establish that the Tribunal's ruling that it had no jurisdiction to determine the applications was erroneous." 44 This, of course, is entirely consistent with what the High Court said in Craig (at 176): "Where the writ is sought on the ground of jurisdictional error, breach of procedural fairness or fraud, the superior court entertaining an application for certiorari can, subject to applicable procedural and evidentiary rules, take account of any relevant material placed before it. In contrast, where relief is sought on the ground of error of law on the face of the record, the superior court is restricted to the "record" of the inferior court or tribunal and the writ will enable the quashing of the impugned order or decision only on the ground that it is affected by some error of law which is disclosed by that record. " 45 For that reason, the affidavit of the Plaintiff sought to be read in the present proceedings is admissible for the purpose of establishing whether the Tribunal's ruling that it had no jurisdiction was erroneous. 46 It is to be noted further that the Court of Appeal in Bahadori did not proceed on the basis that the Tribunal in that case had made the ruling it did as an incident of the exercise of its jurisdiction as was argued by Equity-One in the present case. Indeed, what Tobias JA said at [127] was to the contrary: "The issue before the Tribunal was whether the Code applied to the subject transactions. A jurisdictional issue arose as a result of the appellants signing the Consumer Credit Code Declarations on 15 November 2002, it being contended by Permanent and Conway that they were signed before any credit contract was entered into within the meaning of s 11(2). Accordingly, the Tribunal first addressed the question of whether such a contract had been entered into prior to that date, it being contended by the appellants that their acceptance of Kremnizers' 13 November letters of offer constituted such a contract." (emphasis added) 47 Further, what the Court of Appeal then went on to do for the remainder of its judgment was to discuss the matters of the presumptions in s 11 and the issue contained in s 6(1)(b) relating to the intention of the provision of credit, in the same way as is necessary to be done in the present case. 48 Equity-One submitted that the point of distinction it makes between the Tribunal giving an erroneous ruling as to its jurisdiction (which it submitted the Tribunal did not do) and the Tribunal coming to a view that because there was not a credit contract within the meaning of s 6 of the Code with the result that it did not have jurisdiction to proceed further (which it asserted the Tribunal did) was not addressed by the Court of Appeal in Bahadori. Rather, Mr Lynch said, Equity-One based itself on what the High Court said in Craig although that was dependent on its being accepted that the Tribunal was a Court (in contra-distinction to an administrative or other tribunal) for deciding the issue about certiorari. However, it seems to me that the statement at [127] that a jurisdictional issue arose as a result of the appellant signing the Declarations in Bahadori necessarily involves the view that a decision about whether the Code applied to the particular contract was a jurisdictional issue with the result that s 65(2)(a) could be invoked. 49 This appears entirely consistent with the last two portions set out (in para 36) above of the High Court's decision in Craig where the judgment refers to jurisdictional error as being where an inferior court makes an order or decision to the effect that it lacks jurisdiction which is based on the mistaken assumption or misconception of the nature or limits of the jurisdiction, or where it misconstrues the statute that gives it jurisdiction. Equity-One's submission that the Tribunal in the present case is to be regarded as a court in Craig terms can be accepted. But, contrary to Equity-One's submission, that does not result in the decision it made being one within its jurisdiction. The facts in Craig, and the position of the District Court in that case, do not make the present situation relevantly analogous. 50 In a similar way to the principle articulated in Craig, Shaw J in Jonsson v Arkway said [at 13]: "The tribunal may commit an error of law by exceeding that jurisdiction, or by failing to exercise it. A tribunal can make a determination as to its own jurisdiction however any such determination is subject to review by a superior court." 51 Moreover, it would be anomalous if it was open to a party to invoke s 65(3)(a) where the Tribunal made a decision when it fact had no jurisdiction, but a party was not able to invoke s 65(2)(a) where the Tribunal had ruled that it had no jurisdiction. Indeed, it is difficult to see that there is any real difference in the Tribunal declining to exercise jurisdiction and the Tribunal ruling that it had no jurisdiction. In either case, the Tribunal would be obliged to examine some material which may or may not be more than the Application lodged with the Tribunal. A distinction of that type would leave an affected party at the whim of the particular member of the Tribunal in the way the matter was characterised. 52 It seems clear that the only jurisdiction that is given to the Tribunal by s 8 of the Act is jurisdiction expressed to be exercisable by "The Court" wherever it appears in the Code. In that regard, the sections that empower "The Court" to do things in the Code only concern a "credit contract" in any given matter and, because of the definition of "credit contract" in ss 5 and 6 of the Code, it is always necessary for the Tribunal to determine if it can effect any of the powers provided in the Code, which powers are said in s 8 to be the jurisdiction of the Tribunal. That is no doubt why the Court of Appeal in Bahadori said at [127] that as a result of the appellant signing the Declarations (which impact upon s 6 of the Code by virtue of s 11) a jurisdictional issue arose. 53 In my opinion, if the Tribunal's ruling that the application was dismissed because the Tribunal had no jurisdiction was erroneous then that ruling was a jurisdictional error, or, to put it in s 65(2) terms, it was an erroneous ruling as to its jurisdiction.

Did the Tribunal err? 54 Because any error being dealt with is a jurisdictional error the evidence contained in the Plaintiff's affidavit is relevant, as I have determined, to ascertain if the Tribunal made an error. 55 If the credit contract entered into by the Plaintiff is one to which the Code applies, the Tribunal will have made an erroneous ruling as to its jurisdiction in having held to the contrary. If it can be shown that the credit provided to the Plaintiff was provided wholly or predominantly for personal, domestic or household purposes in accordance with s 6(1)(b), the Tribunal will have made an erroneous ruling as to its jurisdiction. In that regard, it is necessary, first, to examine the presumptions set out in s 11. 56 In the first instance, there is a conclusive presumption that credit is not provided for those purposes if the debtor declared before entering into the contract that the credit was to be applied wholly or predominantly for business or investment purposes. The Plaintiff did this by virtue of the Declaration set out in para 2 above. It is agreed that there is no issue about timing in the making of the Declaration - it is accepted that it was made before the entry into the credit contract. 57 However, the evidence discloses that Ms McLeod, who was a finance broker, knew at the time the Declaration was made that the money was to be used predominantly for the repair of the Plaintiff's house and otherwise for the paying out of a personal loan to a prior creditor. So much appears from paragraphs 10, 11, 16 and 17 of the Plaintiff's affidavit together with annexure "E", such evidence not being challenged by Equity-One apart from its submission that it should not be received at all on this type of application (see para 6 above). Since Ms McLeod was a finance broker through whom the credit was obtained, this means that the Declaration is ineffective for the purposes of s 11. The result is that there is no presumption that the credit is to be applied wholly or predominantly for business or investment purposes but, rather, there is a presumption that the credit contract is one to which the Code applies unless the contrary is established under subs (1). 58 This then directs attention to s 6(1)(b) which in turn gives rise to the conflicting decisions on what is meant by the credit being "provided or intended to be provided" for personal, domestic or household purposes. I have summarised the alternative views in paras 32 and 33 above. 59 The divergent views were discussed by Tobias JA in Bahadori at [132] to [138], [148] to [154] and at [182] to [186]. However, Tobias JA does not come to a concluded view about which approach is to be preferred and that appears to be because whichever approach was adopted in that case, the result would have been the same - see at [186]. 60 On one view, Tobias JA appears to prefer the approach that one regards the loan from the perspective of the credit provider because, he says: [185] Conway submitted that the use of the expression " provided or intended to be provided " required the issue to be determined from the perspective of the credit provider. This was because a lender " provides " credit whereas a borrower " obtains " it. Accordingly, it was contended that the only objective circumstances which are relevant are those known to the credit provider.

[186] There is some force in this submission and for present purposes I am prepared to accept it." 61 However, two things suggest that this was neither a concluded view, nor any statement that the approach in Rafiqi and Park Avenue Nominees was to be preferred. The first is the sentence which follows the passage I have quoted where his Honour says: "However, in my view it makes no difference to the outcome."

That sentence commences a discussion where it can be seen that his Honour's adoption of that view in that case was almost in the form of an assumption with the purpose of showing that the outcome would be the same even if the most favourable approach to the credit provider was taken. 62 The second reason for suggesting that the objective view in Rafiqi has not been preferred by the Court of Appeal as the appropriate test is because the discussion about the divergent views in the passages to which I have referred ultimately expresses no opinion about which view is to be preferred and, in particular, express no disapproval of the Jonsson v Arkway approach. Particularly in the light of the statement at [186] that his Honour was prepared to accept the objective view in that case, his Honour's silence about a resolution of the issue of divergent views must be regarded as leaving the matter open. 63 In Jonsson v Arkway Shaw J said: "[28] Regrettably, there has been some divergence of judicial interpretation in relation to this provision. It seems to me that insufficient attention has been given to the need to broadly and liberally interpret beneficial legislation of this kind. …

[29] In contrast to the distinction drawn by the learned District Court Judge in Queensland, Brabazon DCJ, in Rafiqi , I would prefer the approach taken by Gillard J in Linkenholt . Gillard J said (at [98]): 'It is appropriate to consider what the money was used for in order to determine the purpose of the provision of the credit. In considering the question it is important to look at the substance of the transaction in the context of its performance…'." 64 In Benjamin v Ashikian [2007] NSWSC 735 Smart AJ agreed with Gillard J in Linkenholt that the Court must consider the substance and the reality of the transaction (at [74]) having earlier referred to Shaw J's statement in Jonsson that insufficient attention had been given to the need "to broadly and liberally interpret beneficial legislation of this kind" (at [67]). 65 In First Mortgage Managed Investments Ltd v Oberlechner [2006] NSWSC 1397 Rothman J, having referred to Jonsson v Arkway Pty Ltd on the issue of what constituted "personal, domestic or household" purposes went on to say (at [29]): "[29] One must then ask: for what purpose did the defendant [the borrower] seek to refinance, and succeed in refinancing, the loans on the mortgaged premises or this property in particular? When the question is posed in that way, it almost answers itself. It was not for the purpose "wholly or predominantly" to discharge the bankruptcy, but for the purpose of ensuring that the discharge of the bankruptcy did not result in a loss to the defendant of the investment properties.

[30] For the above reason, I determine that the credit deriving from the mortgage in this case was not provided or intended to be provided wholly or predominantly for personal, domestic or household purposes and that the Code does not apply to the credit contract secured by the mortgage giving rise to the debt here in issue." 66 That seems to me to be the adoption of the Jonsson v Arkway and Linkenholt test, namely, to look at the purpose for which the loan was in fact used. 67 In Permanent Custodians Ltd v Upston [2007] NSWSC 223 Cooper AJ set out what Shaw J had adopted from Gillard J in Linkenholt and accepted that as the appropriate test saying (at [31]): "It indicates that one has to look at the performance of the transaction; that is, what was actually done with the funds raised rather than the circumstances preliminary to the entering into of the transaction." 68 In Shakespeare Haney Securities Ltd v Crawford [2009] QCA 85 Muir JA (with whom Mullins and Douglas JJ agreed) discussed the difficulties of construing s 6. Whilst he said that an objective assessment would be a preferable one to one that looked at the actual intention of either the borrower or the lender, he drew attention to various parts of ss 6 and 11 which variously suggested the intention of the lender or the borrower was to be identified. Whilst it is fair to say that a number of these provisions tended to favour the intention of the borrower, his Honour did not find it necessary for the purposes of that particular appeal to resolve the issue. 69 In my opinion, the weight of authority strongly favours the approach taken by Gillard J in Linkenholt and Shaw J in Jonsson v Arkway. The result must be, therefore, that one must see what the present loan was in fact used for by the Plaintiff. Of that there is no doubt. It was predominantly used to pay for repairs and renovations to her property and that must be regarded as a personal, domestic or household purpose. 70 The Plaintiff also took the position that whichever view of s 6(1)(b) was the correct view, the Plaintiff would succeed in showing that the credit was provided for personal, domestic or household purposes. The Plaintiff submitted correctly that the onus is on the lender to show that the loan was provided wholly or predominantly for purposes other than personal, domestic or household purposes: Bahadori at [5] and [191]. 71 In this regard, the Plaintiff pointed to what was contained in annexure "J" to the Plaintiff's affidavit (set out above at para 19). The Plaintiff said that Equity-One must have known from what was contained in that document that the loan was not predominantly to be used for investment purposes despite what the document says. 72 The Plaintiff points to the fact that her income was said to be $28,276 per year from a Centrelink pension and she was receiving $100 per week from a boarder. The Plaintiff says that the likelihood that someone on a Centrelink pension of $28,276 a year would be borrowing $65,000 predominantly to buy shares was remote. 73 The Plaintiff points to the fact that the loan was an interest only loan for four years at which time it was said she would either sell the property to down trade or would have joined the workforce. That was said to be entirely inconsistent with the intention of using the money to purchase shares because it would be very unlikely that the Plaintiff would sell her main asset (her home) in order to repay a loan that was obtained predominantly to buy shares. A reasonable person in those circumstances would be much more likely to sell the shares for which they had used the credit obtained. 74 The Plaintiff points further to the fact that the document said that part of the funds were to be used to "restore the burnt garage" not " restore a burnt garage" thereby suggesting some prior knowledge on the part of Equity-One as to the real object of borrowing the money. 75 The Plaintiff says that the Rafiqi test was the point of view of a reasonable person standing in the credit provider's shoes and says for the above reasons that no reasonable person in that position could, on reading annexure "J" have believed that the majority of the funds were to be used for investment purposes, particularly the buying of shares. 76 Whilst I think there is some force in these submissions, and they may be able to be taken further after a full hearing in the Tribunal, I prefer to base my decision that the Tribunal has made an erroneous ruling as to its jurisdiction on the basis that the test in Jonsson v Arkway and the cases to which I have referred is to be preferred on the proper construction of s 6(1)(b). In those circumstances, the examination of what the money was used for produces the result that the credit was provided wholly or predominantly for personal, domestic or household purposes. 77 For those reasons, the credit contract was one to which the Code applied with the result that the Tribunal had jurisdiction to determine the application brought by the Plaintiff. In concluding that the credit contract was not one to which the Consumer Credit Code applied and that the Tribunal had no jurisdiction, the Tribunal made an erroneous ruling as to its jurisdiction within the meaning of s 65(2) of the Act. 78 In those circumstances, I make the following Declarations and Orders:

(a) Declare that the Consumer, Trader and Tenancy Tribunal has jurisdiction to hear the application by the Plaintiff against Equity-One Mortgage Fund Limited dated 29 March 2007;

(b) Order that the decision of the Tribunal dated 25 June 2007 whereby it determined that it did not have jurisdiction to hear the said application be quashed;

(c) Order that the Tribunal hear the said application;

(d) Order that the Second Defendant pay the Plaintiff's costs of the proceedings.

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