Bobb Borg v FTT & Anor

John Robert Tozer (Second Defendant) JUDGMENT OF : Master Harrison

LOWER COURT FTT JURISDICTION : LOWER COURT CO 2001/396 FILE NUMBER(S) : LOWER COURT Tribunal Member David Baker JUDICIAL OFFICER :

N/A (First defendant) SOLICITORS : Mr Tozer (Second Defendant in person) CATCHWORDS : Appeal decision of FTT - Denial of natural justice LEGISLATION CITED : Fair Trading Tribunal Act 1998 Kioa v West (1985) 159 CLR 550 CASES CITED : Kearns & Anor v Fair Trading Tribunal of NEW & Anor [2001] NSWSC 951 Holloway v Chairperson of the Residential Tribunal (2001) 51 NSWLR 716; [2001] NSWCA 209 (5 July 2001) DECISION : (1) I make a declaration that the plaintiff was denied natural justice in proceedings heard on 21 September 2001; (2) The order of the FTT of 21 September 2001 is set aside; (3) The matter is referred to the FTT to be determined according to law; (4) The second defendant is to pay the plaintiff's costs. The second defendant is entitled to a certificate in respect of those costs under the Suitors Fund Act.

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

13497/2001 - BOBB BORG PARTNERS PTY LIMITED t/as UNITED REALTY LIVERPOOL v DEPARTMENT OF FAIR TRADING & ANOR

JUDGMENT (Appeal decision of Fair Trading Tribunal; Denial of natural justice) 1 MASTER: By summons filed 12 November 2001 the plaintiff seeks firstly a declaration that it was denied natural justice in proceedings heard before the Fair Trading Tribunal on 21 September 2001; secondly, further and/or in the alternative a declaration that it was denied natural justice in relation to proceedings decided by the Fair Trading Tribunal (FTT) on 16 October 2001; thirdly, further and/or in the alternative an order setting aside the decision of the Fair Trading Tribunal on 21 September 2001; fourthly, further and/or in the alternative an order setting aside the decision of the Fair Trading Tribunal dated 16 October 2001; fifthly, further and/or in the alternative an order that the second defendant's proceedings before the Fair Trading Tribunal No CO 2001/396 be dismissed; and sixthly, further and/or in the alternative that the decision of the Fair Trading Tribunal dated 21 September 2001 be set aside. The plaintiff relied on the affidavits of Arthur Mucha sworn 9 November 2001 and Raelean Borg sworn 17 April 2002. The second defendant John Robert Tozer relied on his affidavit sworn 5 March 2002. He appeared unrepresented. The Department of Fair Trading filed a submitting appearance. All deponents were cross examined.

2 The matter was before this Court on 4, 18, 25 and 26 February 2002, 6 and 28 March 2002, 18 April and 9 May 2002. On the last occasion Mr Tozer appeared unrepresented and sought an adjournment to enable the second defendant to obtain further legal representation. It was granted and Mr Tozer was informed that the matter would proceed on the next occasion. 3 The plaintiff appeals the decisions of the FTT dated 27 June 2001 (the hearing) and 21 September 2001 (the rehearing). The grounds of appeal are as follows:

(1) At the hearing of the proceedings the plaintiff was not given the opportunity to address issues which had been raised by the second defendant during the course of the proceedings and/or issues in relation to the application generally.

(2) The member of the Tribunal limited the plaintiff to answering specific questions and did not allow submissions or any examination of evidence that had been presented to the Tribunal.

(3) On 28 September 2001 an application was made for a rehearing and on 12 October 2001 further submissions were forwarded to the FTT.

(4) The application for rehearing was refused without any opportunity being given to the plaintiff to make further submissions. The finding of the Tribunal was contrary to the evidence which was before the it.

(5) The appeal is from the whole of the decision of the Tribunal including its decision not to receive submissions and/or arguments and its refusal to rehearing the proceedings. 4 At the outset it is helpful if some general observations of the function of the Tribunal are made. The Fair Trading Tribunal Act 1998 established a Tribunal to adjudicate consumer and commercial disputes. The objects of the Act are set out in s 3. They are to ensure that the Tribunal is accessible, its proceedings are efficient and effective and its decisions are fair, and to enable proceedings before the Tribunal to be determined in an informal, expeditious and inexpensive manner. 5 According to s 27 of that Act the Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice. The Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms. The Tribunal may dismiss at any stage any proceedings before it for want of prosecution by the applicant or at the request of the applicant. 6 Section 60(3)(b) of the Act gives this court a limited right of review where in relation to the hearing or determination of a matter, a party to the claim had been denied natural justice.

Denial of natural justice 7 In relation to natural justice, Professor S A de Smith, Judicial Review of Administrative Act, 2nd ed., pp 180-181 has stated: "Natural justice generally required that persons liable to be directly affected by proposed administrative acts, decisions or proceedings be given adequate notice of what is proposed, so that they may be in a position: (a) to make representations on their own behalf; or (b) to appear at a hearing or inquiry (if one is to be held); and (c) effectively to prepare their own case and to answer the case (if any) they have to meet." 8 In Kioa v West (1985) 159 CLR 550 the High Court held that the duty to accord natural justice is a duty to act fairly. In the normal course, a party to judicial proceedings (as are those in a tribunal) could expect to be apprised of the nature of the case sought to be made against it, and of the date and time fixed for hearing such as to give it a reasonable opportunity to meet that case and to advance its own. These statements are similar to those expressed by Professor de Smith and referred to earlier. Brennan J (as he then was) at 628 stated: "A person whose interests are likely to be affected by an exercise of power must be given an opportunity to deal with relevant matters adverse to his interest which the repository of the power proposes to take into account in deciding upon its exercise." 9 In relation to procedural fairness, Mason J stated in Kioa that the law had now developed to a point where it may be accepted that there is a common law duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions which affect rights, interests and legitimate expectations, subject only to the clear manifestation of a contrary statutory intention. Procedural fairness is a notion of a flexible obligation to adopt fair procedures which are appropriate and adapted to the circumstances of the particular case (pp 454 and 455). 10 In Kearns & Anor v Fair Trading Tribunal of NSW & Anor [2001] NSWSC 951 Grove J stated at para 25: "There is ample authority that procedural fairness is denied if a decision maker fails to adjourn proceedings where such a failure has the effect of depriving a person of adequate opportunity to prepare or present a case: Sullivan v Department of Transport (1978) 20 ALR 323; Opitz v Repatriation Commission (1991) 29 FCR 50; Humphrey v Wills (1989) VR 439." 11 However, whether there is a denial of procedural fairness depends on the circumstances in each case.

The hearing in the FTT 12 Mr Tozer (the plaintiff in the proceedings in the FTT and the second defendant in these proceedings, who is referred to as the second defendant in this judgment) lodged an application in the Fair Trading Tribunal claiming that Bobb Borg Partners Pty Limited (the plaintiff in these proceedings and the respondent in the proceedings before the FTT referred to as the plaintiff in this judgment) acted negligently, converted and misused his goods and chattels. He sought the sum of $30,000. On 21 September 2001 the Tribunal Member David Baker gave reasons for his decision and found in favour of Mr Tozer and ordered that the respondent pay to the applicant the sum of $20,000 within 21 days.

13 Prior to the hearing, the parties received a notice informing them of the hearing date and that the matter was estimated to take one hour. The hearing commenced just after 10.00am before Member Baker. The plaintiff was represented by Raelean Borg the administration manager of the plaintiff. With her were two witnesses, Mr Peter Groat who cleaned out the premises and Mr Arthur Mucha who was employed by the plaintiff as a Senior Property Manager. Mr Tozer appeared unrepresented. Ms Borg had a great big folder with her. This is common ground. Most of what occurred at the hearing thereafter is disputed. Both parties agree that a gun was mentioned at the hearing but they do not agree about what was said by the Tribunal Member, the plaintiff and second defendant.

The plaintiff's version of the hearing 14 The plaintiff's version of events is contained in the affidavits of Ms Borg and Mr Mucha. It is as follows. 15 After the introductions were made Member Baker said: "Mr Tozer this is your matter you have to prove your case I will let you go first and then I will let Mr Mucha have his say. I do not want any of you to comment whilst the other one is stating their case. All of you will get your opportunity to have your say." 16 Mr Tozer then commenced to give a long history of the matter. During the history the Member would ask Mr Mucha some questions about what Mr Tozer was saying. Mr Mucha would answer those questions, and then the Member would ask Mr Tozer to continue. The Member continued to stop Mr Tozer and occasionally asked Mr Mucha questions. When Mr Tozer was making submissions about certain documents the Member would ask Ms Borg to produce those documents as she had the applicant's file in her possession. Ms Borg became concerned at the amount of time that Mr Tozer was taking to present his case. She recalled at one stage Mr Mucha turned to her and pointed to his watch. Ms Borg noticed the time on Mr Mucha's watch was about 10.40 am. She recalled when Mr Tozer was making submissions about the "stolen goods" that she stood up and handed the Member a copy of the statutory declaration of Mr Groat. Ms Borg said to the Member words to the effect "Here is Peter's statement on that." The Member did not appear to read the document. He just placed it down on his right hand side. 17 Mr Tozer finished giving his version of events at about 10.50 am. The Member turned to Mr Mucha and Ms Borg and said "What have you got to say?" Mr Mucha then started to give a history of the events but the Member just kept asking him questions, which Mr Mucha was answering. After a couple of minutes the Member stopped asking questions and Mr Mucha was still making his submissions. At this time the Member started packing his books and papers and stacking them all up in one pile. 18 The Member looked at his watch and said "That is it we are out of time." Ms Borg was under the impression that as they had exceeded their one hour hearing time that they would be given another date in due course to complete the matter. It had been her experience in attending previous hearings before the FTT that if insufficient time had been allowed previously a notice was sent to the applicant's office advising of the adjourned date for the matter to be completed. 19 Ms Borg stated that she did not have an opportunity to present to the Tribunal the evidence that she had in her possession and she would have refuted some of the allegations made by Mr Tozer. She had the applicant's file with her at the time, which contained leases and other documents relating to the matter. Neither Mr Mucha nor Ms Borg had the opportunity to present their full submissions and evidence to the Tribunal concerning the matter. Mr Groat had come to the Tribunal with them to give evidence about what happened when he was cleaning out the property. 20 Mr Groat was also there to give evidence about the previous tenant removing the goods, which Mr Tozer said were stolen or his goods. This evidence was never presented to the Tribunal because Mr Groat was not given a chance to make his statement. The only evidence that Mr Groat gave was when the Member asked him questions as Arthur Mucha was only starting to make submissions. Mr Tozer rightly conceded that he did not know how the plaintiff intended to present its case to the Tribunal. 21 In cross examination Ms Borg said that she had a good memory but could not recall seeing any photographs being shown by the Member to Mr Tozer (t 14.50). However Mr Mucha remembered that this did occur because he knew what was in those photographs. Ms Borg could not recall whether they were asked to provide the auction receipt and could not locate it. Mr Mucha said that the Member did not ask them for the action receipt for the goods. They also denied that the Tribunal member asked them why Mr Tozer should be required to buy his goods back.

Second defendant's version of the hearing 22 Mr Tozer's version of events is that at the outset the witnesses were administered the oath. He denied that he was told that it was his application and that he had to prove his case (t 10.5). Mr Tozer told the Member that he had been living in the applicant's premises at 32 Badgery's Creek Road, Badgery's Creek with their knowledge, and that prior to him being able to sign a formal lease on the property he was arrested and detained by the police on an unrelated matter. Upon being released a few days later by the police, Mr Tozer returned to the Badgery's Creek premises and found that the applicant had removed and sold some of his possessions. 23 Mr Tozer deposed that the presiding Member questioned the parties in relation to issues on the matter and these questions were answered by himself and other parties, in particular Arthur Mucha. After all the questions were answered the matter was concluded. The questions by the Member were addressed to all parties. Mr Tozer denies that he addressed the Member in submission form for over half an hour or at all. When being cross examined Mr Tozer stated that about 90% of the time was devoted to conversation by the Tribunal Member and Mr Mucha (t 12.50) but that overall 60% of the time was devoted to him and 40% to the plaintiff. He gave evidence that Ms Borg spoke a couple of times at the hearing maybe two times but could have answered 4 or 5 questions. Mr Tozer denied that he spoke from 10.05am to 10.45am (t 10.10). Mr Tozer also remembers that the Member started putting his stuff together. Mr Tozer gave evidence that the Member could have said "out of time" (t 11.45) but later recanted (t 12.20). It is Mr Tozer's view that the Member gave both sides an opportunity to present their case and the correct decision was made. 24 On about 23 September 2001 Ms Borg received a copy of the decision of the Tribunal dated 21 September 2001. 25 In relation to the conduct of a hearing in the FTT, relevantly s 32 provides: "Opportunity for parties to present case The Tribunal must ensure that every party to proceedings before the Tribunal is given a reasonable opportunity: (a) to adduce evidence and otherwise present the party's case (whether at a hearing or otherwise), and (b) to make submissions in relation to the issues in the proceedings." 26 However s 27(5)(d) also provides that the Tribunal in the case of a hearing may require the presentation of the respective cases of the parties before it to be limited to the periods of time that it determines are reasonably necessary for the fair and adequate presentation of the case. 27 I have read the decision of the Tribunal Member dated 21 September 2001. The second defendant agreed that Ms Borg answered two, maybe up to five, questions. Even on Mr Tozer's evidence Ms Borg did not have the opportunity to make her submissions to the Tribunal Member. I accept that there are many factual disputes as to what occurred at the Tribunal hearing and I cannot resolve them. I am satisfied that the plaintiff was not given a reasonable opportunity to present its case nor did it have a reasonable opportunity to make submissions. At the outset the plaintiff was not informed that the presentation of its case was limited to a set time duration. In all the circumstances the plaintiff was not given the time that was necessary for it to fairly and adequately present its case. It is my view that the plaintiff was denied procedural fairness at the hearing. 28 It is not necessary for me to determine whether there was a denial of procedural fairness or natural justice in relation to the rehearing. However, the plaintiff was given an opportunity to make submissions - see Holloway v Chairperson of the Residential Tribunal (2001) 51 NSWLR 716; [2001] NSWCA 209 (5 July 2001). 29 Costs are discretionary. Costs normally follow the event. The second defendant is to pay the plaintiff's costs. The second defendant is entitled to a certificate in respect of those costs under the Suitors Fund Act.

(1) I make a declaration that the plaintiff was denied natural justice in proceedings heard on 27 June 2001.

(2) The order of the FTT of 21 September 2001 is set aside.

(3) The matter is referred to the FTT to be determined according to law.

(4) The second defendant is to pay the plaintiff's costs. The second defendant is entitled to a certificate in respect of those costs under the Suitors Fund Act . **********

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