Escape Media Pty Limited v Lawler

NCAT Appeal Panel|2017-12-14

reasons for decision

In May 2015, Phillip Lawler, the Respondent, purchased a two year subscription to a magazine titled "4WD Touring Australia". That magazine was published by Escape Media Pty Limited t/as 4WD Australia, the Appellant.
Between March 2015 and January 2016, the Appellant conducted a subscription drive for its magazine in the form of a promotion titled "The Ultimate Escape". The promotion offered magazine subscribers entries into a competition or lottery to win a prize said to be valued at $151,291. That prize consisted primarily of a four-wheel drive vehicle, a camper trailer, a boat and a boat motor as well as camping and four-wheel driving accessories. The four-wheel drive vehicle was described as having been upgraded and subject to extensive mechanical work.
For his two-year subscription to the magazine, Mr Lawler claims to have paid between $149 and $199 (nothing presently turns on the uncertainty as to the precise amount paid for the subscription). That subscription payment entitled Mr Lawler to receive 275 entries in the Ultimate Escape promotion.
In early February 2016, Mr Lawler was notified by the Appellant that he had won the Ultimate Escape package. Subsequently, the components of the package were delivered to him, although some items were substituted for those nominated as package components. Having received all components of the package, Mr Lawler formed the opinion that the items received did not achieve the value assigned to them in the promotional material that he had read. Primarily, he claimed that the promotional material had overstated the value of the prize package by at least $30,000.
In an application filed in the Consumer and Commercial Division of the Tribunal on 21 October 2016, Mr Lawler sought an Order that the Appellant pay him the sum of $30,000. His claim was founded upon identification of breaches of the Australian Consumer Law (NSW).
His application was heard by a Member of the Tribunal on 17 July 2017. At the conclusion of the hearing on that day an order was made that the Appellant pay Mr Lawler the sum of $25,000 on or before 17 August 2017. The formal notice of order dated that day included a number of statements. Under the heading "Reasons" the following appears: "$25,000 determined compensation arising from the respondent engaging in a misleading or deceptive conduct regarding a magazine subscription promotion drive. 2. Reasons for Decision Detailed oral reasons for the decision were given at the hearing."

An appeal is commenced

On 4 October 2017, the Appellant filed a Notice of Appeal against the decision of the Member. That appeal was lodged pursuant to s 80(1) of the Tribunal Act, the decision given on 17 July being an internally appealable decision within the meaning of the Act.
By its amended Notice of Appeal filed on 20 October 2017, the Appellant alleges, in summary, that the Member erred in law when determining that Mr Lawler was entitled to receive compensation for claimed breach of the Australian Consumer Law in the absence of a determination that Mr Lawler had sustained any loss by reason of the conduct alleged. That summary reflects the first and second grounds of appeal. The remaining two grounds of appeal identified in the Notice of Appeal were not pressed by the Appellant at the hearing before us. The Appellant is entitled, as of right, to bring its appeal founded upon a claimed error of law: s 80(2) of the Tribunal Act.
By his Reply to the Notice of Appeal, Mr Lawler contends that the appeal is out of time and on that account alone should be dismissed. Otherwise, he does not engage directly with the legal issue raised by the Appellant. He contends that the material published by the Appellant as to the prize value of the Ultimate Escape package was false and misleading, as a result of which he did not receive goods to the value of the promoted prize package.
The position reflected in the parties' respective Notice and Reply necessitates the determination of two issues. First is the question as whether the appeal was filed in time and, if not, whether leave should be granted to extend time in which to bring the appeal. The second issue and that upon which the hearing of the appeal principally focused is whether the Appellant has identified legal error in the determination made by the Member. Neither in the appeal grounds that were pressed nor on the hearing of the appeal did the Appellant seek to challenge any factual finding of the Member that would give rise to the need to consider the grant of leave to appeal under s 80(2) of the Tribunal Act, as qualified by the provisions of cl 12 of Sch 4 to the Act.

Issue 1: timing of the appeal notice

The issue raised by Mr Lawler in this context arises this way. Under r 25(4)(c) of the Civil and Administrative Tribunal Rules 2014, an internal appeal is required to be commenced within 28 days from the day on which "the appellant was notified of the decision to be appealed or given reasons for the decision (whichever is the later)." As the Member gave oral reasons for decision on 17 July, Mr Lawler submits that the 28 day period provided by the rule is to be calculated from that date. If that be correct, a notice of appeal was required to be lodged by 14 August. As we have earlier indicated, the Notice of Appeal was not, in fact, lodged until 4 October.
However, the rule needs to be understood in the context of s 62(2) of the Tribunal Act. That is the section pursuant to which written reasons for a decision may be requested and once requested those reasons must be provided. It seems to us that when the provisions of r 25(4)(c) are read with s 62(2) of the Act, the operation of the rule requires that the time for lodging an appeal runs from the time at which written reasons, if requested pursuant to the subsection, are provided by the Tribunal. That, so it seems to us, gives a workable and common sense interpretation to the combined operation of the two provisions, consistent with language in which each is expressed. The written reasons having been given on 7 September, lodgement of the Notice of Appeal on 4 October was within the time limited by the rule.
However, if we are wrong in our interpretation and the rule operates as Mr Lawler contends it does, consideration must be given to the provisions of s 41 of the Tribunal Act. That section enables the Tribunal to extend time "for the doing of anything under any legislation in respect of which the Tribunal has jurisdiction despite anything to the contrary under that legislation." The time limit for lodging an appeal imposed by r 25(4) is expressed in the opening words of the subrule to be subject to an extension of time under s 41 of the Act.
In the present case, the Appellant made its application under s 62(2) within the time limited by that section, that is, within 28 days from the decision given on 17 July. No criticism can be made of it on that account. Further, Mr Lawler did not claim any prejudice by reason of the difference in time between that for which he contended was the time within which an appeal should be lodged and the filing of the appeal on 4 October. Although he had not received the sum of $25,000 that, according to the order of the Member, was required to be paid by 17 August, it was recognised that the appeal raised his entitlement to receive that sum as the primary issue to be determined. In his own words, Mr Lawler was content "to leave it to the Tribunal" to determine whether an extension of time for lodging the appeal should be granted.
Assuming that leave is required, we consider that such leave should be granted. Objectively judged, there is no prejudice to Mr Lawler and, on the premise upon which the timing issue is being addressed, the "delay" is properly explained and is not inordinate. Further, the legal issue raised in the appeal is an issue of some importance. Accordingly, in the orders that we make, ultimately disposing of this appeal, we will extend the time for lodging the appeal to 4 October 2017.

An error of law is demonstrated

In his Reasons for Decision dated 7 September 2017 (the Reasons), the Member set out the facts that we have earlier recited as to the Respondent's magazine subscription, the entries into the promotion and the receipt of the promotion prize by Mr Lawler. The Member identified the factual differences between the parties, reflected in the competing evidence adduced as to the value of the prize received by Mr Lawler.
The Member then referred to the provisions of s 18 of the Australian Consumer Law. Subsection (1) of that section provides: "(1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead to deceive."
Having referred to the section, the Member then said at [26]: "I believe the question to be addressed in the present matter is where a reasonable person would find that the 'ultimate escape' promotional package was appropriately valued as being in excess of $150,000."
He proceeded to address that question. He did so by referring to the competing evidence as to the value of individual items but with particular focus upon the value of the four-wheel drive vehicle provided as part of the winning package. Important to our consideration of the legal issue raised by the appellant is what the Member said at [34]-[36] of the Reasons which we record in full: "[34] I conclude that a reasonable person would find that the Ultimate Escape promotion package was valued considerably less than $150,000. I therefore hold that the respondent, whilst undertaking the subscription drive, has engaged in misleading or deceptive conduct or conduct that is likely to mislead or deceive. The respondent's actions are clearly in breach of the ACL. [35] Mr Lawler was induced to purchase his two-year magazine subscription partly on the representation made by the respondent in its Ultimate Escape promotions. Mr Lawler was entitled to hold reasonable expectations that if he was the winner of the promotion he would receive goods to the value of $150,000. Mr Lawler did win the promotion but the value of goods he received was well below $150,000. [36] In the circumstances Mr Lawler is entitled to be compensated for the reduction in the value of the goods he received. Given that the determination of the value of the goods supplied to the applicant is not a precise process I determine fair and equitable compensation for the applicant to be $25,000."
We note that at [16] of his Reasons, the Member recorded Mr Lawler's familiarity with the "4WD Touring Australia" magazine, noting that Mr Lawler had previously purchased issues of that magazine, liked its content and also enjoyed the associated television program and DVDs.
The Reasons make clear that the Member correctly identified the claim made by Mr Lawler as a "consumer claim" within the meaning of s 79E of the Fair Trading Act 1987. That being the basis of the claim, the jurisdiction of the Tribunal was engaged: s 79J. Further, he correctly identified Mr Lawler's claim as arising, at least prospectively, under the provisions of the Australian Consumer Law. So much follows from his reference to s 18 of that legislation.
However, it seems to us that what the Member has failed to recognise is that the cause of action he identified is not capable of sustaining an order unless there is a substantiated claim for damages or loss by reason of breach of the Australian Consumer Law. As the Appeal Panel observed in Lam v Steve Jarvin Motors Pty Limited [2016] NSWCATAP 186 at [164], the provision of Pt 6A of the Fair Trading Act, being the provisions upon which the jurisdiction of the Tribunal is founded, do not of themselves identify any cause of action. The cause of action must be found outside the provisions of that Part, generally arising under the law of contract, tort or under statute law. The entitlement to claim compensation for breach of the provisions of the kind arising in the present case are founded in s 236 of the Australian Consumer Law.
Importantly, the latter section sanctions a claim by "a person who suffers loss or damage" by reason of the conduct of another whose conduct breaches the Law. It follows that in order to sustain a claim, a claimant relying upon s 236 must establish that damage or loss has been sustained. In the present case, the cause of action is not complete until loss by reason of breach of s 18(1) of the Australian Consumer Law is established.
No such loss has been demonstrated in the present case nor, with respect, was that question addressed by the Member. Mr Lawler has had a windfall by winning the competition in which his entries were submitted thereby enabling him to participate. Accepting, as the Appellant did for the purpose of the appeal, that the evidence led by Mr Lawler demonstrated the value of his prize to be less than the claimed $150,000 prize value, on his own evidence Mr Lawler has had a windfall in the form of goods valued at approximately $120,000. He has suffered no loss.
The conclusion we have reached as to the need for the loss or damage to be suffered by reason of breach of the Australian Consumer Law is not only consistent with the language of s 236 of that Law, it is supported by the decision of the High Court in Marks v GIO Australia Holdings Limited (1998) 196 CLR 494; [1998] HCA 69. There, the High Court was concerned with a claim for damages or compensation arising from a breach of the Trade Practices Act 1974 (Cth). The claim there being considered was made under the section of the latter Act that is equivalent to s 236 of the Australian Consumer Law and the breach alleged was one of "misleading or deceptive conduct". The majority of the Court determined that damages could not be recovered under the equivalent of s 236 by reason of conduct contravening the equivalent of s 18 where no loss or damage had been suffered. In the judgment of the plurality (McHugh, Hayne and Callinan JJ) their Honours gave useful illustrations and made observations to support their conclusion in the following term: [50] If a person agrees to pay $50,000 for goods which the vendor falsely represents are worth $100,000 but which are, in fact, worth $50,000, what loss has the purchaser who is misled suffered by agreeing to buy (assuming no more is known)? If a person agrees to pay interest at the rate of 10% for a loan which the lender falsely represents would ordinarily command interest at a rate of 15% but which, in fact, would ordinarily command interest at 12%, what loss has the borrower who is misled suffered by agreeing to borrow (again, assuming no more is known)? And so the examples could be multiplied. [51] The reason that neither of these persons suffers a loss is that viewed objectively each obtain rights having a value (a value determined objectively) at least equal to what it paid for those rights. It is only if some alternative (less detrimental or more beneficial course) were available that it can be said that the contract which was made was less valuable to the party that was misled than has been represented - for it is only then that a comparison of value can be made. [52] The fact that each of the misled parties in the examples given may have thought it was to obtain some advantage from the transaction is not to the point. The contravening conduct has left the party that was misled no worse off than it was before the contravention occurred.
That decision has recently been followed by the Supreme Court of New South Wales in Bartlett v Weatherall [2017] NSWSC 31. In applying the decision of the High Court, Adamson J determined at [26] that an "expectation" loss was not recoverable for conduct that contravened the Australian Consumer Law: only actual loss could found a claim for such contravention. So much follows from the observations in Marks at [52]. An application for leave to appeal from the decision of Adamson J was dismissed by the court of Appeal (Weatherill v Bartlett [2017] NSWCA 175).
It is apparent that the observations made and examples given by the High Court in Marks are apposite to the present case. Mr Lawler has not been left "worse off" because of the contravening conduct of the Appellant. Rather, he has benefited from his competition win. By subscribing to the Appellant's publication his entitlement was to have entries included in the Ultimate Escape promotion. An expectation that if, by chance, one of his entries in the competition was a winning entry and, as a result, the goods comprising the prize would have a value of not less than $150,000 is, at best, an expectation for which no recompense is presently available.
It follows that legal error has been demonstrated in the decision made by the Member. The question framed by him for determination, as reflected in [19] above, was the incorrect question to be addressed for the purpose of determining Mr Lawler's claim. As a consequence, the appeal will be upheld.
The facts found by the Member and in respect of which there was no dispute before us, demonstrate that the cause of action upon which Mr Lawler brought his claim in the Tribunal cannot succeed. It is not a claim that is sustainable in law. As a consequence, the original application made by Mr Lawler to the Tribunal must be dismissed (cf s 81(1)(d) of the Tribunal Act).

ORDERS

For these Reasons we make the following orders: 1. If necessary, pursuant to s 41 of the Civil and Administrative Tribunal Act 2013 extend time for lodging the appellant's appeal to 4 October 2017. 2. Appeal upheld. 3. Set aside the order made in the Consumer and Commercial Division of the Tribunal on 17 July 2017. 4. Dismiss the application made by the respondent in proceedings GEN 16/46422. I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal Registrar

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar

Amendments 18 January 2018 - Amend Order Dates DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 20 August 2019

Trade Practices Act 1974(Cth)

At a glance

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Judgment (7 paragraphs)

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Legislation Cited (3)

Cases Cited (5)

Cited By (3)