Fiatorque Five Dock Pty Limited v Daines & Anor [2007] NSWSC 520 | Case summary

JUDGMENT 1 HIS HONOUR: The plaintiff has a workshop at Guildford. Its managing director is Mr Smith. The defendant left an engine at the workshop for repair. Whilst it was at the workshop it was destroyed by fire. 2 The plaintiff had insurance cover. A claim by the defendant for the loss of his engine was rejected. 3 It appears that both parties received legal advice. There was a consensus that the quantum of the defendant's loss was in the sum of $19,697.16. 4 On 17 December 2005, the defendant brought an application in the Consumer, Trader and Tenancy Tribunal (the Tribunal). The cause of action was founded on bailment for reward. It appears that the solicitors for the insurer then had the conduct of the defence. 5 On 21 December 2005, the Tribunal sent a "Notice of Conciliation and Hearing" to the parties. The matter was listed for 25 January 2006. On 13 January 2006, the solicitors for the insurer wrote to the Tribunal seeking leave to appear for the plaintiff. One of the circumstances presented as entitling a grant of leave was that the claim was in bailment and gave rise to complex issues of fact and law. 6 On 25 January 2006, the defendant appeared in person and Ms Hill (a solicitor employed by the solicitors for the insurer) purported to appear on behalf of the plaintiff. Although she then had no locus standi to appear before the Tribunal, she made the application for legal representation. The Tribunal member (Ms J Farey) rejected the application. 7 Mr Smith was not present at the Tribunal on that occasion. Ms Hill informed the Tribunal member that she was responsible for his absence. 8 The ultimate hearing took place on 13 April 2006. The proceedings were heard by another Tribunal member (Ms Thane). The defendant presented his own case. Mr Smith appeared and presented the case on behalf of the plaintiff. 9 The Tribunal member found in favour of the defendant. She gave brief written reasons for her decision. 10 The plaintiff now seeks to have the decision set aside (the solicitors for the insurer are the solicitors on the record). It presently proceeds on a Further Amended Summons. Relief is sought pursuant to both sections 65 and 67 of the Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) (the Act). 11 These proceedings were heard on 22 May 2007. Both parties were represented by Counsel. Both parties have made written submissions, which have been supplemented by oral argument. 12 The areas of challenge are said to fall into three categories. The first concerns the refusal to grant legal representation. The second concerns what is said to be a denial of procedural fairness in the conduct of the hearing. The third is put forward as being legal error. 13 As to the first of the three categories, the relevant provisions are s36 of the Act and clause 14 (in particular (q) and (r) thereof) of the Consumer, Trader and Tenancy Tribunal Regulation 2002 (NSW) (the Regulation). 14 In Ross v Consumer, Trader & Tenancy Tribunal of NSW & Anor [2003] NSWSC 444, I made certain observations concerning the operation of the provisions (see, inter alia, paragraphs 23-26). There is a discretionary power exercisable when threshold requirements have been satisfied. 15 The thrust of the plaintiff's case in relation to this category is that of misdirection (inter alia, failing to address relevant criteria and taking into account irrelevant or extraneous matters). In support of this argument, the Court was taken to various passages of transcript. It is said that Tribunal member Farey refused the application because Ms Hill had not been instructed to make any offers and the Tribunal member was offended by the absence of the plaintiff. The Court was also taken to passages in the transcript (at pp68 and 73) of the hearing before Tribunal member Thane. These passages are relied on as supporting the submissions of error by Tribunal member Farey. 16 Before proceeding further, I should mention that the inquiry of Tribunal member Farey concerning the likelihood of an offer was a matter directly relevant to the conciliation process, which is obligatory for the Tribunal. 17 There are two initial observations to be made concerning this category. In the absence of the plaintiff, it was open to the Tribunal to reject the application (Ms Hill had no locus standi to make it). But leaving that matter aside, the application could only succeed if relevant threshold requirements were made out. In this Court, the plaintiff relied on clause 14(q) of the Regulation. It was not relied on in the Tribunal and there is nothing which supports a submission that the plaintiff would be placed at a disadvantage if not represented at the hearing. In the case of clause 14(r) of the Regulation, an order can only be made if the Tribunal is persuaded to be of the opinion that representation should be permitted as a matter of necessity due to the likelihood that complex issues of law or fact will arise in the proceedings. The task of demonstrating such a threshold requirement was not even attempted in this Court. Argument on the part of the plaintiff seemed to proceed on the assumption that because there was a question of bailment, there was necessarily the presence of complex issues of law or fact. In my view, there is nothing to suggest that the threshold requirement could have been made out before the Tribunal. Indeed, a reading of the transcript and the brief reasons shows that the case was one of relative simplicity. A significant question concerned the installation of sprinklers. During the hearing, it was conceded by Mr Smith that the installation of sprinklers would have prevented the fire. 18 I should add that I am not satisfied that the Tribunal member did misdirect herself. She gave no reasons for the decision. In my view, what is put on behalf of the plaintiff is no more than speculation. The parties did make submissions on the nature of the dispute (in particular, at page 2 (lines 22-29) of the transcript Ms Hill outlined the nature of the defence). Nothing was put to the Tribunal member which suggested that there was a likelihood that complex issues of law or fact would arise in the proceedings. 19 I do not see the transcript passages of the hearing before Tribunal member Thane as taking the matter any further. The passages are as follows [at pp68 and 73]:- "I mean quite frankly, I don't know why leave wasn't granted for both parties to be legally represented in this matter because the applicant appears to be struggling somewhat and I'm in a position where I can't - I can't help him run his case." "It's just the issue of liability, which is somewhat more difficult" 20 Whilst the first passage does make a reference to both parties, it is largely (if not otherwise totally) directed to the position of the defendant. He did not seek legal representation because he was unable to afford it. 21 The second of the two passages (which is somewhat vague and inconclusive in terms) has to be seen in its context. The observation was made after the Tribunal member had established that there was no issue as to quantum. 22 At best, these passages may be seen as some indication of opinion of another Tribunal member, reached without the benefit of full argument and relevant to what was anticipated as being a difficulty that the defendant might have in presenting his case. The Tribunal member may have liked to have been assisted by legal representation. However, as things eventuated there was no need for such assistance. 23 In respect of the second of the three categories, three matters were propounded. It was said that the Tribunal had a duty to offer either an adjournment or some other arrangement to enable the plaintiff to get legal assistance. It was said also that there was breach of s28(4) of the Act. It was said further that the Tribunal member engaged in a line of questioning of the plaintiff, which gave rise to an apprehension of bias. 24 I do not accept the submission that there was any duty as alleged. Further, Mr Smith did not re-visit the question of the need for legal representation and the transcript does not record material that suggests he had a real need for it. 25 The plaintiff contends that there has been a breach of subs(4). The Court has been referred to a passage which appears at pp60-61 of the transcript. It is as follows:- "Ms Thane: Okay, all right, well I obviously can't go down that path then. The Tribunal's role is to hear the evidence and make a determination based on that evidence. Now, whilst you are the applicant and you have brought proceedings, the usual situation is that an applicant has to prove an entitlement to the orders on the balance of probability, but because this involves a bailment the onus of proof is reversed, meaning that you have to prove that you in fact took reasonable care in relation to the fire. You probably all know that as I understand you have all had legal advice in respect of this matter. But essentially, if it's - if it can be shown - if the respondent can show that they took all reasonable - all reasonable care that they could have taken - it doesn't mean that they have to do absolutely everything - but it means that they have to be reasonable. They just have to take reasonable care of the goods that were in their control. Mr Daines: Right. Ms Thane: If they can show that they did that and the fire happened anyway, they're not liable. The mere fact that there was a fire doesn't automatically mean that they are liable. It's not a strict liability." 26 The complaint was that this was directed to the defendant and not to the plaintiff. A reading of the passage leads me to the view that it was informative to both parties, inter alia, as to the role of the Tribunal and the matters in issue. 27 I am not satisfied that there was a breach of subs(4). However, if a different view be taken, it seems to me that in the circumstances of this case such a breach would be of no consequence. I do not consider that any basis for the disturbing of the decision of the Tribunal has been demonstrated. 28 Mr Smith had received legal advice. A statement had been prepared for him, which was supported by expert reports. He relied on it at the hearing. Further, not only had he been informed of the issues by the Tribunal member (inter alia, he was specifically asked to address what was described as the issue about possible sprinkler systems that had been raised by the defendant), it seems to me that there is nothing to suggest that he did not understand what they were. He appears to have manifested no difficulty in presenting his case. He appears to have seen no need to seek an adjournment. In my view, he was given a reasonable opportunity to present his case. 29 As would appear from what has been earlier said, I have read the transcript. In my view, a careful reading of it does not support the allegation of apparent bias. There was questioning by the Tribunal member of Mr Smith. However, in my view, it was directed to assisting Mr Smith to present his case and to resolving the matters in issue between the parties. 30 The third and final category was said to be one of legal error. The submission on this category was encapsulated as follows:- "43. The plaintiff further submits that the Tribunal fell into legal error in finding for the defendant. It is submitted that the legal error is manifest in two alternate ways. First, because there was no evidence that it was unreasonable for the plaintiff not to have automatic sprinklers. Secondly, the Tribunal Member misdirected herself on the ultimate question of whether the plaintiff had acted unreasonably in failing to install automatic sprinklers." 31 As has been so often said, s67 gives rise to a narrow ambit of challenge (it lies where the Tribunal decides a question with respect to a matter of law). The authorities reveal that this is not to be equated with what is regarded as error of law in other contexts. It has been said to be restricted to cases where a pure question of law is involved. In my view, what is argued in this case does not fall within the ambit of s67. 32 I do not accept the submission that there was no evidence to support a finding that it was unreasonable for the plaintiff not to have automatic sprinklers. Be that as it may, the submission misconceives what was done by the Tribunal member. I shall shortly return to this matter. 33 Leaving those matters aside, as has been said in other cases, I do not take the view that the absence of supporting evidence involves the Tribunal in a decision on a question with respect to a matter of law. I consider that this construction of s67 is supported by other provisions in the Act (including ss28(2) and 65). The Tribunal is not bound by the rules of evidence. It can inform itself by other means as it thinks fit (subject to the rules of procedural fairness). 34 The written submissions relied on by the plaintiff contain the following:- "50. The Tribunal member, it is submitted, dealt with the matter on the basis that, there being some suggestion of an alternative to prevent the risk of fire damage, the plaintiff was necessarily negligent. The error in the approach was described by McHugh J in Tame v New South Wales (2002) 211 CLR 317 at [99] as follows: "Once these two questions are answered favourably to the plaintiff, there is a slide - virtually automatic - into a finding of negligence. Sometimes, courts do not even ask the decisive question in a negligence case: did the defendant's failure to eliminate this risk show a want of reasonable care for the safety of the plaintiff? They overlook that it does not follow that the failure to eliminate a risk that was reasonably foreseeable and preventable is not necessarily negligence." 51. The approach of the Tribunal Member failed to accord with this statement of principle: see also Vairy v Wyong Shire Council per Hayne J at [124] - [125]." 35 I do not accept the Tribunal member made the alleged error. The submission misconceives what was done by the Tribunal member. The defendant was propounding a bailment claim. It was the plaintiff that had the onus to show that the loss occurred without default on its part. A reading of both the transcript and the brief reasons makes it clear that the Tribunal member was well aware that the onus was with the plaintiff. What she did was to find that the plaintiff had not discharged that onus.

Fiatorque Five Dock Pty Limited v Daines & Anor

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