Gambhir v VISION OF IT PTY LTD

Supreme Court of NSW|2023-11-07

Solicitors: Kaur Legal (plaintiff) Iuris Lawyers (defendant) File Number(s): 2022/227993

JUDGMENT

This judgment involves an appeal of a Local Court decision in relation to a cross-claim.
The plaintiff in the Local Court was GC Leasing Sydney Pty Limited. The plaintiff who was the cross-defendant in the Local Court is Gambhir Manpreet ('Gambhir'). The defendant is Vision of IT Pty Ltd ('Vision IT'), who was the cross-claimant in the Local Court. Gambhir is represented by J. G. Simpkins of counsel. Vision IT is represented by G.P. Diggins of counsel. The parties relied on the plaintiff's court book marked Exhibit A ('Ex A').
In the Local Court, in the cross-claim, Gambhir in the Local Court is the defendant. In this appeal, Gambhir is the appellant in this appeal, I shall refer to the parties by name. The hearing in the Local Court was in relation to the cross-claim between Vision IT and the cross-claimant and Gambhir and the cross-defendant.
At the hearing, by consent, the parties agreed that the appropriate relief, should Gambhir be successful in the appeal is that: 1 Leave to appeal from the whole of the decision if necessary 2 Appeal allowed. 3 The decision of her Honour Hosking LCM dated 6 May 2022 be set aside. 4 The proceedings be remitted to the Local Court to be dealt with according to law.

Background

Gambhir was the cross-defendant in the Local Court. Vision IT was the cross-claimant. The plaintiff in the Local Court was GC Leasing Sydney Pty Ltd (GC Leasing). As noted earlier, the proceedings as between the plaintiff and Vision IT settled. The appeal by the cross-defendant is against Vision IT, who was the defendant/ cross-claimant in the Local Court.
The hearing took place before Magistrate Hosking ('the Magistrate') and extended over three days (2 November 2021; 5 May 2022 and 6 May 2022). On 6 May 2022, the Magistrate delivered an ex tempore judgment in favour of Vision IT.
Vision IT brought its cross-claim brought its cross-claim against Gambhir on three bases. The first was as a claim for damages for breach of contract, quantified at $58,477.30 reflecting the settlement sum of $30,000 paid to GC Leasing and the balance being its alleged costs of defending GC Leasing's claim ('the contracts claim'). The contracts claim was dismissed. The second was a claim for damages pursuant to ss 18 and 236 of the Australian Consumer Law, quantified on the same basis. This claim was successful. The third was a claim in detinue and conversion. The Magistrate decided that as the cross-claim was successful on the second ground of appeal, it was unnecessary to determine the third ground of appeal.

The law

Sections 39 and 40 of the Local Court Act 2007 (NSW) read: 39 Appeals as of right (1) A party to proceedings before the Court sitting in its General Division who is dissatisfied with a judgment or order of the Court may appeal to the Supreme Court, but only on a question of law. … 40 Appeals requiring leave (1) A party to proceedings before the Court sitting in its General Division who is dissatisfied with a judgment or order of the Court on a ground that involves a question of mixed law and fact may appeal to the Supreme Court but only by leave of the Supreme Court. …
In Be Financial Pty Ltd v Das [2012] NSWCA 164 ('Be Financial'), Basten JA and Tobias AJA stated at [32], [33]: "[32] The principles governing cases such as these have recently been restated in Zelden v Sewell; Henamast Pty Ltd v Sewell [2011] NSWCA 56. As Campbell JA noted (with the agreement of Young JA) at [22]: "It is of some importance to reiterate the principles that were stated in Carolan v AMF Bowling Pty Limited [1995] NSWCA 69, where Sheller JA said that an applicant for leave must demonstrate something more than that the trial judge was arguably wrong in the conclusion arrived at. Cole JA relied on a principle that where small claims are involved, it is important that there be early finality in determination of litigation, otherwise the costs that will be involved are likely to swamp the money sum involved in the dispute." [33] In Jaycar Pty Ltd v Lombardo [2011] NSWCA 284 Campbell JA, with the agreement of Young and Meagher JJA, expanded on his summary of Carolan, noting that Kirby P had recognised "that ordinarily it was appropriate to grant leave to appeal only concerning matters that involve issues of principle, questions of general public importance or an injustice which is reasonably clear, in the sense of going beyond [what is] merely arguable": at [46]."
Gambhir's primary position is that appeal ground 6 gives rise to a question of law, engaging s 39 of the Local Court Act. In the alternative, they give rise to a mixed question of fact and law engaging s 40 of the Local Court Act and leave ought to be granted because it involves an issue of principle and an apparently clear injustice.
The difficulty with Ghambir's primary position in Appeal Ground 6 is that it specifically states: 6. Further and in the alternative, that Her Honour erred in fact and in law in finding, by implication, that the representations referred to in grounds 1 to 3 (if made) were made in trade and commerce within the meaning of s.18 of the Australian Consumer Law ("the ACL") as pleaded by the defendant in the court below [my emphasis].

Reitano v Commissioner of Police [2004] NSWCA 99

Both parties referred to Reitano v Commissioner of Police [2004] NSWCA 99 ('Reitano'). According to Gambhir, a failure to have regard to, or to make reasoned findings about a statutory criterion is an error of law. In Reitano, Beazley JA (with whom Sheller and Tobias JJA agreed) stated at [31], [33], [35]: "[31] In my opinion there was no determination in this passage of the specific question whether s.8(3) could be used as the basis of a power to "stand down" the appellant. The failure to determine that question was an error of law as it was a failure to determine one or more of the matters integral to the question whether s. 11A operated in this case. As the specific question relating to s.8(3) was not determined, the 2 questions which arose consequentially were not answered, thus compounding the original error of law. … [33] For my part, I do not consider that para. 16.6 bears that meaning. But even if that is the correct interpretation, it reveals an error of law in itself. The question whether the exercise of a power or action taken is authorised by a statutory provision is a question of law. As such, it was for the Tribunal to determine the matter for itself. It could not delegate that part of its decision making process or defer to a lay determination of the issue. The fact that Assistant Commissioner Jarrett believed he had the power to act under s.8(3) does not resolve the question of law whether he was entitled so to do. … [35] It follows that in my opinion there was an error of law in the Tribunal's failure to determine whether s.8(3) was a proper basis under which the appellant could be stood down. That error is sufficient for the appellant to succeed on the appeal. That error also demonstrates, in my opinion, that the Tribunal did not consider the question whether the action taken in standing down the appellant was taken in respect to any of the matters specified in s.11A, being the principal ground alleged on the appeal. If it had turned its mind to that question it would, of necessity, have had to turn to the other questions which arose once the power to act under s .8(3) was put in issue. It did not. The failure to deal with any of those questions underscores my conclusion that the Tribunal did not make any determination in respect of that part of s.11A. Its failure to do so was an error of law.

Gambhir's submissions

On this basis Gambhir submitted in the Local Court that her Honour did not deal at all with whether the conduct (as found) was in trade or commerce.
It may be readily accepted that it is not incumbent on a judicial officer in giving reasons to comment on every aspect of the evidence, but that is not to the point. What we have here is a complete failure by the Magistrate to consider, and make any findings, in relation to whether the conduct was conduct in trade or commerce.
Reitano is not distinguishable based on the statutory provision there considered. The Magistrate did not make any determination as to whether the conduct was conduct in trade or commerce. The failure to address the issue, and to make the necessary findings of fact to determine whether the conduct was in trade or commerce, was an error of law.

Vision IT's submissions

Gambhir's reliance upon the decision of the Court of Appeal in Reitano in support of the allegation that her Honour's alleged failure to consider whether the conduct was in trade or commerce is an error of law should be rejected.
Reitano identifies that a failure to expressly consider a matter does not demonstrate that it was not considered. It is open to find that in making a finding a decision maker implicitly considered the matter.
Secondly, Reitano was a case in which the statutory condition in issue (s 11A of the Workers Compensation Act 1987 (NSW)) was multifarious. It encompassed reasonable action taken by an employer in relation to eight discrete matters: 1. transfer 2. demotion 3. promotion 4. performance appraisal 5. discipline 6. retrenchment of workers 7. dismissal of workers 8. the provision of employment benefits to workers
It was far from clear (as contended by the respondent in that case) that the relevant matter considered by the Tribunal under section 11A was "discipline". Both "transfer" and "performance appraisal" were available alternatives as the relevant matter considered by the Tribunal. As noted by Beazley JA at [21]: "…the absence of any reference to which of the matters in s.11A the action of the Commissioner related, if any, makes it difficult to know whether the Tribunal was satisfied, as it was bound to be, that one of the statutory prerequisites for the application of s.11A had been established."
If, as suggested by the respondent in Reitano, the relevant matter considered by the Tribunal was "discipline", that consideration was erroneous as there was no power under the Police Act 1990 (NSW) for the respondent to stand down the applicant (such power underpinning any characterisation of the Respondent's actions as relating to "discipline").
The breadth of the statutory condition under consideration in Reitano stands in marked contrast to the narrow focus of the statutory condition of present relevance - the requirement in the Australian Consumer Law of conduct being "in trade or commerce". The difficulty identified by Beazley JA in Reitano therefore does not arise in the present proceedings.
It is trite law that each case depends on its facts. In this appeal, the central issue is whether her Honour erred in law and fact in that she failed to expressly state that the conduct was in trade and commerce. In Reitano, the Court of Appeal held that there was an error of law in the Tribunal's failure to determine whether s 8(3) of the Workers Compensation Act 1987 (NSW) was a proper basis under which the appellant could be stood down. That error was sufficient for the appellant to succeed on the appeal. That error also demonstrated that the Tribunal did not consider the question whether the action taken in standing down the appellant was taken in respect to any of the matters specified in s 11A, being the principal ground alleged on the appeal. If it had turned its mind to that question, it would, of necessity, have had to turn to the other questions which arose once the power to act under s 8(3) was put in issue. It did not. The failure to deal with any of those questions underscored the conclusion that the Tribunal did not make any determination in respect of that part of s 11A. The Court of Appeal held that its failure to do so was held to be an error of law.

Vision IT's submissions on leave

Essentially, Vision IT submitted that the question was one of mixed question of law and fact.
In Gambhir's outline of submissions, a different allegation is made in as much as it is suggested that her Honour "did not deal at all" with the issue of whether the conduct as found was in trade or commerce. This is presumably in an attempt to elevate the alleged error into a question of law.
As stated in Appeal Ground 6, her Honour found by implication that the conduct was in trade or commerce. While it is accepted that her Honour did not expressly deal with whether the conduct was in trade or commerce, this is insufficient to permit the alleged error to properly be characterised as relating to a question of law. This is because establishing that her Honour erred in making such a finding would require a demonstration that the finding was one that was unavailable. Put otherwise, it would require a demonstration that the evidence before her Honour necessarily put the conduct outside the statutory description as being in trade or commerce.
As stated by Jordan CJ in The Australian Gas Light Company v The Valuer-General (1940) 40 SR (NSW) 126 at 138 as referred to in Orr v Cobar Management Pty Ltd [2020] NSWCCA 220 at [53]: "Thus, if the facts inferred by the tribunal from the evidence before it are necessarily within the description of a word or phrase in a statute or necessarily outside that description, a contrary decision is wrong in law: Farmer v Cotton's Trustees; Mersey Docks and Harbour Board v West Derby Assessment Committee and Bottomley, etc. If, however, the facts so inferred are capable of being regarded as either within or without the description, according to the relative significance attached to them, a decision either way by a tribunal of fact cannot be disturbed by a superior Court which can determine only questions of law …" (footnotes omitted).
Further, regardless of her Honour's reasons, there is no error of law where there is evidence which, if believed, would support the finding: Nicolia v Commissioner for Railways (NSW) [1971] 45 ALJR 465.
What is said in Gambhir's outline of submissions on the issue of whether the conduct was in trade or commerce proceeds upon an erroneous understanding of evidence which was uncontentious before her Honour. This misunderstanding commences with Gambhir's apparent elevation of her Honour's use of the words "a related company division" to suggest that the plaintiff was an employee of Vision IT.
Gambhir was at all times an employee of Fastserve Pty Ltd, not Vision IT. This was never in issue in the proceedings.
Her Honour was well aware that Gambhir was not employed by Vision IT as she made express reference (without the use of the word "division") to this fact elsewhere in her decision.
The analysis of the "in trade or commerce" issue in Gambhir's outline of submissions, including reference to various authorities, erroneously assumes that Gambhir was employed by Vision IT. Certainly, Gambhir was an employee, but he was not Vision IT's employee.
Her Honour's decision recorded (putting to one side the passing and solitary use of the term "division") that it was uncontentious that Gambhir was an employee of Fastserve and that Gambhir introduced a particular client to Vision IT.
As her Honour further recorded, the issue between the parties was whether this introduction was by way of a referral or an end-to-end sale. Her Honour found that either way, the introduction resulted in remuneration becoming payable (although the measure of that remuneration differed depending on whether there was a mere referral or an end-to-end sale).
Lastly, her Honour records that the scheme introduced by Vision IT providing for remuneration for such introductions (whether as referrals or end-to-end sales) involved employees of Fastserve acting as independent contractors to Vision IT.
It follows that even on Gambhir's own case at trial, the transaction between the parties bore a trading or commercial character. At the very least and relevantly for present purposes, the evidence before her Honour does not necessarily put the conduct outside the statutory description as being in trade or commerce.
The substance of Gambhir's criticism appears to be that her Honour did not in express terms give reasons why Gambhir's conduct was in trade or commerce. This criticism ignores that there was at trial no real dispute between the parties on this issue.
It is not incumbent on a judicial officer in giving reasons to comment on every aspect of the evidence: Stone v Cleanaway Pty Ltd t/as Cleanaway; PTH Pty Ltd v Cleanaway Pty Ltd & Mahoney; Central West Auto Auctions Pty Ltd v Cleanaway Pty Ltd & Mahoney [2023] NSWSC 156 at [98]. The requirement to give reasons is one that obliges the judicial officer to engage with a case presented on behalf of a party so the reason(s) why that case was not successful can be ascertained: Shepherd v Nestoriadis [2015] NSWSC 348 ('Shepherd') at [40]. In the circumstances of the present case there can be no difficulty on the part of Gambhir in ascertaining why he was not successful on this issue.
It should also be remembered that her Honour was sitting as a Local Court magistrate delivering an ex tempore judgment. As noted by Beech-Jones J in Shepherd at [19] and [36]: "[19] Even allowing for the fact that her Honour reserved her decision, her Honour's judgment is to be considered bearing in mind the heavy workload borne by the Local Court and the lack of opportunity that is generally afforded to magistrates to address infelicities of language and similar errors in the transcripts of oral judgments. … [36] ...The relevant principles can be briefly stated, although at the outset it needs to be noted that they accommodate the circumstances applicable to magistrates noted earlier and, the fact that in some cases a determination of whether a judicial officer made a particular finding or accepted or rejected a particular submission may be implicit from either the structure of the judgment or its terms when viewed in light of what was truly in contest between the parties."
To similar effect, in Director of Public Prosecutions v Tiller [2023] NSWSC 187 McNaughton J observed at [50]: "As noted by the first respondent in her submissions, the question of adequacy of reasons must be seen in the context of the environment in which they are given, including whether the reasons are given ex tempore, and/or in a busy Magistrate's Court with a heavy case load: see Acuthan v Coates (1986) 6 NSWLR 472 at 479, 485; Director of Public Prosecutions (NSW) v Illawarra Cashmart Pty Limited (2006) 67 NSWLR 402; [2006] NSWSC 343 at [15]; Neighbourhood Association DP 295386 v Forgeron [2005] NSWCA 150 at [15]; Colosimo v Director of Public Prosecutions (2005) 64 NSWLR 645; [2005] NSWSC 854 at [36]."
Again, in 3 Rivers Estate Pty Ltd v Consult Survey GRA Pty Ltd [2023] NSWSC 1217 Mitchelmore JA recently commented to similar effect at [42]: "...The caution that needs to attend close examination of ex tempore reasons has long been recognised. Recently, in Darlington v Director of Public Prosecutions (NSW) [2023] NSWSC 1139, Dhanji J stated that "[t]he enormous pressure under which magistrates operate when making decisions of importance to the parties and the community must be acknowledged", and that "there is a need to avoid ex tempore reasons from a busy Local Court being 'picked over'": at [58] citing Director of Public Prosecutions (NSW) v Illawarra Cashmart Pty Ltd (2006) 67 NSWLR 402; [2006] NSWSC 343 at [15]-[18]; Acuthan v Coates (1986) 6 NSWLR 472 at 478-479."

Resolution

The appeal ground pleads that her Honour erred in fact and law. In Reitano the real issue to be determined is which of the matters under section 11A was considered by the Tribunal, with the one contended for by the respondent being unavailable as a matter of law. This is not the situation here.
As to whether the representations were made in trade and commerce depends on the factual findings. The central issue in dispute here is whether Gambhir's conduct was in trade or commerce. The uncontested evidence (reproduced later in this judgment) was that Gambhir was an employee of Fastserve and an independent contractor for Vision IT. These are based on findings of fact. The evidence establishes that the conduct is not of an inherently intra-corporate nature.
While I accept that Gambhir denied the conduct was not in "trade or commerce" in its defence to the cross-claim, the hearing was not run on this basis. In my view, this appeal does not raise a question of principle or of public importance. Nor does it raise a question of an injustice which is reasonably clear going beyond what is merely arguable.
However, if I am wrong and Appeal Ground 6 does not raise a mixed question of fact and law, I will briefly address it.
In relation to the breach of contract claim, the Magistrate found that Vision IT had not been able to satisfy the court as to the precise terms of the alleged contract between it and Gambhir and had not proven there was a breach. However, the Magistrate found in favour of Vision IT on its misleading and deceptive conduct claim and entered judgment for the sum of $58,477.30.

The law

Sections 18(1) and 236 of the Competition and Consumer Act 2010 (Cth), Schedule 2, read as follows: 18 Misleading or deceptive conduct (1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. … 236 Actions for damages (1) If: (a) a person (the claimant) suffers loss or damage because of the conduct of another person; and (b) the conduct contravened a provision of Chapter 2 or 3; the claimant may recover the amount of the loss or damage by action against that other person, or against any person involved in the contravention.
The onus is upon Vision IT to establish each element.

Misleading or deceptive conduct

In relation to the misleading or deceptive conduct claim, Vision IT alleged: 1. that Gambhir represented to Vision IT that SS Resources had entered into an agreement with GC Leasing to lease the Equipment ('the Leasing Agreement Representation'); 2. the Leasing Agreement Representation was made in trade or commerce; 3. the Leasing Agreement Representation was misleading or deceptive or likely to mislead or deceive in contravention of section 18 of the Australian Consumer Law provisions of the Competition and Consumer Act 2010 (Cth); 4. in reliance on the Leasing Agreement Representation, on or about 21 December 2018, Vision IT entered into an agreement with GC Leasing for the supply by Vision IT to GC Leasing of the Equipment (the "Supply Agreement"); 5. as a result of the Supply Agreement, Vision IT became liable to GC Leasing in relation to the claims pleaded in paragraphs 1 to 36 of the amended statement of claim filed on 18 December 2019; and 6. Vision IT has suffered loss and damage as a result of its liability to GC Consulting.
Counsel for Gambhir referred to Mitsubishi Motors Australia Pty Ltd v Begovic [2022] VSCA 155; (2022) 403 ALR 558 ('Begovic'), where the Victorian Court of Appeal (per Emerton P, McLeish and Macaulay JJA) observed (at [55]) that "determining whether s 18 has been contravened involves a staged inquiry. The omission, or conflation, of these stages is apt to confuse the analysis" (citations omitted). The Court of Appeal identified the following five stages of that inquiry (at [57]-[61]): "[57] First, it is always necessary to identify precisely the conduct at issue. As Hayne J said in Google Inc v Australian Consumer and Competition Commission: "The first question for consideration is always: 'What did the alleged contravener do (or not do)?' It is only after identifying the conduct that is impugned that one can go on to consider separately whether that conduct is misleading or deceptive or likely to be so." [58] Secondly, it is necessary to establish that the conduct is relevantly in "trade or commerce", being conduct that is an "aspect or element of activities or transactions which, of their nature, bear a trading or commercial character". [59] Thirdly, once the conduct at issue has been identified with precision, it is necessary to determine what that conduct means; in particular, whether it conveys particular representations said to be misleading or deceptive. Whether conduct conveys a representation is to be determined objectively, in all of the circumstances. This involves consideration not only of the literal meaning of any words, phrases and figures used, but also the context in which they are used, including the nature of the parties, the character of their dealings, and their respective states of knowledge. [60] Fourthly, it is necessary to determine whether the conduct is attributable to the persons said to have contravened s 18. [61] Fifthly, it is necessary to determine whether the conduct - and any representation - is misleading or deceptive or likely to mislead or deceive."
As previously stated in the cross-claim at [12], Vision IT alleged that the representations were made in trade or commerce [CB261]. In his defence to the cross-claim at [11], Gambhir denied the conduct was "in trade or commerce".
It should be taken into account that the judgment is to be considered bearing in mind the heavy workload borne by the Local Court and the lack of opportunity that is generally afforded to Magistrates to address the infelicities of language to similar errors in the transcript of oral judgments: see Shepherd v Nestoriadis [2015] NSWSC 348 at [19].
The magistrate's ex tempore reasons dated 6 May 2022 stated: "The third agreement is alleged by Vision and denied by Gambhir. It is alleged by Vision that on or about 11 December 2018 it entered into an agreement with Gambhir to affect an end-to-end sale and delivery of certain equipment defined in para 5(d) of the cross-claim. This contract is alleged to have been partly oral and partly by conduct. The oral terms were contained in conversations between Gambhir and Mr Verma, the national sales consultant of Vision; the conduct involving the cross-defendant receiving the equipment on or about 20 December 2018. The uncontentious facts include that at all material times Gambhir was an employee of Fastserve, a related company division. Gambhir introduced SS or Mr Chawla to Vision. The consequences of this introduction, including whether it was part of a referral process or an end-to-end process is hotly contested. Two boxes of equipment which were the subject of the leasing and finance agreements were delivered to Vision's office. These boxes were not received by SS or Chawla and their current resting place is unknown (CB20.10-27). … There was also the absence of Mr Chawla. No evidence was adduced as to attempts taken to procure his attendance at court. There are many issues his evidence could have clarified; the scope and nature of his dealings with Gambhir, Verma and Kondur; which, if any, documents bear his actual signature. I note that under cross--examination Gambhir conceded that he was found in his employee entitlement case against Fastserve to be a witness of impugned credit. That evidence was not objected to, but I confirm that my comments in relation to the credibility of this witness are independent to that evidence. The evidence in this case was sufficient to impugn Mr Gambhir's credit. I turn now to the first claim, which is breach of contract. It is alleged that it was a term of the agreement that Gambhir would deliver the equipment on 20 December 2018 to SS at 7/3-5 Bruce Street, Blacktown, and then in breach of that agreement the equipment was retrieved by Gambhir but not delivered to SS, causing loss and damage (CB21.10-27)."

Gambhir's submissions

The Magistrate did not undertake a staged inquiry referred to in Begovic. Rather, her Honour held that the misleading or deceptive conduct claim turned on two issues: first, whether or not Gambhir provided Vision IT with a copy of the leasing agreement between GC Leasing and SS Resources ('Ex 18'), and if he did whether that conduct was misleading or deceptive; and secondly, whether Gambhir took the Equipment from Utteneja's office.
As to the first issue, the Magistrate held: 1. Mr Kondur provided Gambhir with a hard copy of the contract (Exhibit 18) and that approximately an hour later he received a copy of contract with Mr Chawla's signature witnessed by Gambhir; 2. her Honour did not need to find whether or not Gambhir forged Mr Chawla's signature; and 3. it was enough that Gambhir handed back the document in respect of which he endorsed as having witnessed Mr Chawla's signature in circumstances where his evidence was that he did not witness Mr Chawla's signature and was uncertain as to how the marking came on the page.
As previously noted, her Honour dismissed the contract claim, holding that Vision IT had not been able to satisfy the court as to the precise terms of the contract and had not proven the breach. However, her Honour made that finding having first observed that "[t]he uncontentious facts include that at all material times Gambhir was an employee of Fastserve, a related company division". As counsel for Vision IT observed in his opening: "The cross-claimant didn't have its own sale staff, it relied on - because they were such closely related companies, it and Fastserve, there was common ownership, common directorships two family companies for short, It would use sale staff from that company."
In Haiye Developments Pty Ltd v Commercial Business Center Pty Ltd [2022] NSWSC 937 ('Haiye') at [374] Kunc J observed: "Whether conduct satisfies the criterion espoused by the High Court in Concrete Constructions will vary on the particular facts of a given dispute. It is unhelpful to attempt to list conduct that "bear[s] a trading or commercial character" or formulate a general rule against which conduct can be determined as "bear[ing] a trading or commercial character". That having been said, conduct of an inherently intra-corporate nature will not be conduct in trade or commerce: see, e.g., Aardwolf Industries LLC v Tayeh [2020] NSWCA 301 at [75] per Macfarlan JA (with whom Bell P and Leeming JA agreed); see also generally New Cap Reinsurance Corporation Ltd v Daya [2008] NSWSC 64; (2008) 216 FLR 126. Whether conduct is of an inherently intra-corporate nature will, nevertheless, depend on the facts of any given dispute."
The determination of whether conduct is in trade or commerce is sensitive to the particular facts and that determination may involve question of some subtlety: In the Matter of Orix Australia Corporation Limited [2020] NSWSC 1770 at [32].
In Williams v Pisano [2015] NSWCA 177 ('Pisano'), the Court of Appeal considered the meaning of the phrase "in trade or commerce" as contained in ss 18 and 30 of the Australian Consumer Law. At [36] and [37], Emmett JA (Bathurst CJ and McColl JA agreeing) said the following: (citations omitted): "[36] The terms 'trade' and 'commerce' are ordinary terms that describe the mutual communications, negotiations, verbal and written, bargains and performance that constitute commercial arrangements. The terms are not terms of art, but are expressions of fact and terms of common knowledge. While the particular instances that may fall within them will depend upon the varying phrases of development of trade, commerce and commercial communication, the terms are clearly of the widest import. They are not restricted to dealings or communications that can properly be described as being at arm's length, in the sense that they are within open markets or between strangers or have a dominant objective of profit making. [37] The phrase 'in trade or commerce' operates to qualify the prohibitions in s 18 and s 30 against engaging in conduct of the specified kind. Those provisions were not intended to extend to all conduct, regardless of its nature, in which a person might engage in the course of, or for the purpose of, the overall trading or commercial business of that person. Section 18 and s 30 are concerned with the conduct of a person towards other persons, be they consumers or not, with whom the first person has or may have dealings in the course of trading or commercial activities of the first person that, of their nature, bear a trading or commercial character. Such conduct would include promotional activities in relation to, or for the purposes of, the supply of goods or services to actual or potential consumers, be they identified persons or merely an unidentifiable section of the public. However, the reference to 'conduct in trade or commerce' must be construed as referring only to conduct that is itself an aspect or element of activities or transactions that, of their nature, bear a trading or commercial character. The words refer to the central conception of trade or commerce, and not to the immense field of activities in which persons may engage in the course of, or for the purposes of, carrying on some overall trading or commercial business."
Vision IT formulated its case on the premise that at all relevant times Gambhir was a contractor having entered into an end-to-end agreement with Vision IT. Vision IT claimed damages for breach of that agreement and in the alternative, a claim for damages under s 236 of the Australian Consumer Law. The alternative claim depended on the Court first finding that Gambhir engaged in conduct in trade or commerce to satisfy s 18 of the Australian Consumer Law. The claim for breach of contract failed when the court found that Gambhir had not entered into the alleged agreement. Having failed to show that the representations were not made by a contracting party, Vision IT then had to show that the conduct of Mr Ghambir, as an employee, was conduct in trade and commerce.
No attempt was made by Vision IT to establish that the conduct complained of (which was conduct of an employee) was conduct in trade and commerce. Vision IT therefore failed to prove that the conduct contravened section 18 of the Australian Consumer Law. The conduct was conduct of an employee - it was not conduct in trade and commerce. Nonetheless, the court below went on to find that Gambhir was liable to pay damages pursuant to s 236 of the Australian Consumer Law.

Vision IT's submissions

In the misleading and deceptive conduct claim her Honour found that Mr Gambhir had signed as a witness a leasing agreement document purportedly signed by Sandeep Chawla, a director of SS Resources Pty Ltd. The leasing agreement related to certain telecommunications equipment that was purchased from Vision IT by GC Leasing Sydney Pty Ltd for the purpose of being leased to SS Resources. Mr Chawla was not in Australia at the time the agreement was signed. Gambhir admitted that despite signing as a witness, he did not witness Mr Chawla sign the document.
Her Honour found that Gambhir handed the original signed (that is, by both Mr Gambhir and purportedly by Mr Chawla) leasing agreement to Jason Kondur, an employee of Vision IT. Her Honour found that "…by providing Kondur with that document he [Gambhir] misled and deceived Vision IT as to what, if any, obligations Chawla had agreed to."
Her Honour also found that Gambhir attended Vision IT's premises and took possession of two boxes containing the equipment the subject of the lease for the purpose of delivery to Mr Chawla/ SS Resources. Her Honour found that Gambhir did not deliver these boxes to Mr Chawla/ SS Resources and that Vision IT was "misled and deceived as to their destination."
Her Honour made further findings in relation to reliance and loss which are unchallenged in these proceedings.
Examples include denying that he was a business development manager in circumstances where that title was used on emails, asserting that all he did was refer SS or Mr Ohawla in circumstances where he wrote an email indicating that this arrangement was not a referral when he was seeing greater compensation; asserting that this transaction was a mere referral in circumstances where he was involved and communicating with Kondur during the contract execution process and he witnessed the document which purported to bear Ohawla's signature.

Ghambir's submissions in reply

Vision IT seeks to distinguish this case from cases addressing whether the conduct of an employee is conduct in trade or commerce (see Gambhir's Submissions at [26] et seq) on the basis that Gambhir was not an employee of Vision IT, but an employee of Fastserve. How two closely related entities operate their workforce is not to the point. It is a common commercial reality that many businesses operate with a separate corporate entity that acts as the employer. That is precisely what occurred between Fastserve and Vision IT.
Merely because Vision IT organised its workforce in such a way does not mean that the conduct of Gambhir was necessarily in trade or commerce - quite the contrary - the present case is otherwise on all fours with a situation where Gambhir would be employed directly by Vision IT. The conduct complained of (handing over the executed lease and collecting the boxes) can aptly be described as conduct of an inherently intra-corporate nature.
This Court would reject Vision IT's submission that there was at trial no real dispute between the parties on whether the conduct was in trade or commerce. The pleadings identify the issues before the Court - paragraph 12 of the cross-claim alleged that the Leasing Agreement Representation was made in trade or commerce. That allegation was denied by Gambhir.

Conclusion

In Gambhir's first affidavit dated 4 June 2021, he deposed that during 2018 he was employed as a Corrections Officer and also by Fastserve Solutions who were to pay entitlements under their employment agreement. Fastserve is Mr. Sumeet Verma's company. Vision IT is in the name of his wife, Ms Swati Uttneja as the main shareholder as far as he knows, but Mr Suneet Verma is the person in charge of it. Both businesses are run from the same address in Paramatta.
Customers for Vision IT who wanted to buy telephone equipment he would be paid commission for customers in accordance with what was purchased. Uttneja, the director of Vision IT, gave evidence that before December 2018, Gambhir was a full-time employee of Fastserve Solutions Pty Ltd and then he moved to being an independent contractor to Vision IT (T.33-34, 48-50, 49.1-10). By that she meant that he will be a person who will be responsible for end-to-end sale of products on behalf of Vision IT.
Uttenja was cross-examined in the following exchange: Q. Yes, that he that are different from his role as an employee? A. So, an independent contractor to Vision of IT will be a person who will be responsible for end-to-end sale of products on behalf of Vision. By end-to-end sale we mean doing all the dealings with the client whether it comes to obtaining identification documents getting the contract completed to ensuring the handset or the hardware or whatever the customer has ordered reaches the client. That's called end-to-end sale, so full delivery of a sale. Q. That's quite different from a full-time salesperson's role, is that right? A. Full-time salesperson in a fast - in Fastserve had different responsibilities, slightly different responsibilities, yes (CB50.40-50). … A. We are talking about actually two different goods here. So, Fastserve does different work and Vision of IT does different work. The way the two companies operate is different. Q. But they run out of the same building, don't they? A. They run out of the same building but that doesn't mean their nature of work is hundred per cent same (CB51.43-50). … A. So, there were again two parts of it. So, if you talk about end-to-end sale which happened in the case of SS RESOURCES, any payment to the contractor, independent contractor doing that end-to-end sale, will go through Vision of IT directly to the contractor, because it's an end-to-end sale. Q. Vision of IT would pay for that service that was provided by the independent contractor separately, is that right? A. Yes. Q. With an invoice with an ABN issued by someone like my client? A. Yes. Q. When he provided this service, he would have issued you with an invoice with an ABN, is that correct? A. No, he did not issue an invoice with - he did not follow the right process, but he asked for the commission at some point (CB52.3-19).
Vision IT and Fastserve are different entities and they had different contractual relationships with Ghambhir. Gambhir complained that he did not receive a commission from Vision IT.
So far as the parties' evidence is concerned, the Magistrate found the evidence in the plaintiff's case, namely that of Mr Verma, Ms Uttneja and Mr Kondur to be clear and concise. She made a finding that they were witnesses of good credit. However, her Honour made adverse findings regarding Gambhir's credibility as a witness. Her Honour described his evidence as: "His evidence was argumentative and unhelpful. Even after I advised him that his attitude was unhelpful to his case, he continued in the same manner. There were many inconsistencies which he refused to concede, in some cases even after he was taken to documents in complete contrast to his evidence, tainting all of his evidence as implausible (CB20.25-45)."
From the evidence given by Uttenja above, Gambhir was an employee of Fastserve and an independent contractor to Vision IT. Gambhir's complaint is that the Magistrate did not expressly state that Gambhir's conduct was in trade or commerce. In support, he refers to Vision IT's opening submissions where counsel for the cross-claimant stated that the cross-claimant didn't have its own sale staff, it relied on - because they were such closely related companies, it and Fastserve, there was common ownership, common directorships two family companies for short, it would use sale staff from that company. Uttenja's evidence (that was accepted by the Magistrate was that Fastserve and Vision IT had different responsibilities and that Fastserve and Vision IT do different work or the way they operate is different.
I accept there the Magistrate made one passing and solitary use of the words "a related company division" that they are not a related company division, but the evidence demonstrates in addition to the obligations of a magistrate giving reasons, the magistrate's decision should be read as a whole.
I have read the decision of the Magistrate and the transcript of the 3-day hearing carefully. Although Gambhir denied that the conduct was in trade and commerce, but it was not an issue in contest during the trial and there was evidence to support that factual finding: see Secretary, Department of Education v Dawking [2024] NSWSC 4 at [65]-[74]. The trial was run on the basis that it was implied that the conduct was in trade or commerce.

The result

For these reasons Gambhir's appeal has failed. The decision of Magistrate Hosking dated 6 May 2022 is affirmed. The second amended summons dated 27 September 2022 is dismissed.

Costs

Costs normally follow the event. The appellant is to pay the respondent's costs.

THE COURT ORDERS THAT: 1. Leave to appeal is refused. 2. The decision of Magistrate Hosking dated 6 May 2022 is affirmed. 3. The second amended summons dated 27 September 2022 is dismissed. 4. The appellant is to pay the respondent's costs.

Amendments 01 March 2024 - Date change. 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: 01 March 2024

At a glance

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Judgment (19 paragraphs)

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Legislation Cited (4)

Cases Cited (29)