Hamilton & Anor v Consumer Claims Tribunal & Anor

P - Mr M J Cohen COUNSEL : 1D - Submitting Appearance 2D - Mr C C Dwyer P - Business Law Office SOLICITORS : 1D - I V Knight, Crown Solicitor 2D - Mills Cameron Gallagher CATCHWORDS : Jurisdiction; Natural Justice ACTS CITED : Consumer Claims Tribunals Act 1987 ss3,12,12A,32,34A Craig v State of South Australia 184 CLR 163 Batshon v Elias (unreported, 3 June 1999) CASES CITED : SRA of NSW v CCT (1988) 14 NSWLR 473 Pavey & Matthews P/L v Paul 162 CLR 221 Mifsud v Campbell (1991) 21 NSWLR 725 Archcom P/L v CCT (unreported, Simpson J, 29 September 1995) DECISION : Application Dismissed

IN THE SUPREME COURT OF NEW SOUTH WALES ADMINISTRATIVE LAW DIVISION

30107/98 - Robert HAMILTON & ANOR v THE CONSUMER CLAIMS TRIBUNAL OF NEW SOUTH WALES & ANOR

JUDGMENT 1 HIS HONOUR: In these proceedings, relief in the nature of that which can be granted by way of prerogative writ is sought in relation to a decision of the Consumer Claims Tribunal given under the Consumer Claims Tribunals Act 1987 (the Act). 2 The Consumer Claims Tribunal is an inferior court, not an administrative tribunal. The distinction in Australia is an important one. In Craig v The State of South Australia (1995) 184 CLR 163, Brennan, Deane, Toohey, Gaudron and McHugh JJ emphasised the distinction at pp 175-6, describing the scope of a writ of certiorari as follows: "Where the writ runs, it merely enables the quashing of the impugned order or decision upon one or more of a number of distinct established grounds, most importantly, jurisdictional error, failure to observe some applicable requirement of procedural fairness, fraud and 'error of law on the face of the record'." 3 At p 177, the Court described the limited aspects of a decision of a Court which would amount to jurisdictional error. For example, the Court said: "Since certiorari goes only to quash a decision or order, an inferior court will fall into jurisdictional error for the purposes of the writ where it makes an order or decision (including an order or decision to the effect that it lacks, or refuses to exercise, jurisdiction) which is based upon a mistaken assumption or denial of jurisdiction or a misconception or disregard of the nature or limits of jurisdiction." 4 The approach in relation to a court was contrasted with that in relation to an administrative tribunal. At p 179 the Court said: "If such an administrative tribunal falls into an error of law which causes it to identify a wrong issue, to ask itself a wrong question, to ignore relevant material, to rely on irrelevant material or, at least in some circumstances, to make an erroneous finding or to reach a mistaken conclusion, and the tribunal's exercise or purported exercise of power is thereby affected, it exceeds its authority or powers. Such an error of law is jurisdictional error which will invalidate any order or decision of the tribunal which reflects it." 5 The distinction has been discarded in the United Kingdom; however, the principles enunciated in Craig v The State of South Australia find partial expression in s 12 of the Act which provides, inter alia: (1) Except as provided by subsection (2), a court of record has no jurisdiction to grant relief or a remedy by way of: (a) a judgment or order in the nature of prohibition, mandamus, certiorari or other prerogative writ,

(c) an injunction, in respect of a consumer claim heard and determined or to be heard or determined by a tribunal in accordance with this Act or in respect of any ruling, order or other proceeding relating to such a claim.

(2) A court is not precluded from granting relief or a remedy of a kind referred to in subsection (1) if, in respect of a consumer claim: (a) …

(b) a tribunal has made an order under section 30 and the ground on which the relief or remedy is sought is that: (i) the tribunal had no jurisdiction to make the order, or

(ii) in relation to the hearing or determination of the claim, a party to the claim had been denied natural justice. 6 Section 12 limits the jurisdiction of this Court to grant relief even more severely than does the Common Law. It is not a ground of relief that there is an error of law on the face of the record. The only two grounds are jurisdiction and breach of natural justice. 7 The decision of the Tribunal was that the plaintiffs, Mr and Mrs Hamilton, pay a sum of $14,060, a balance found to be due to Warrington Homes Pty Ltd, a builder which had constructed a home for Mr and Mrs Hamilton. 8 The first ground of attack is that the Tribunal had no jurisdiction to hear and determine the complaint before it. Section 32 of the Act provides, inter alia: (1) A tribunal has no jurisdiction to make in respect of a particular consumer claim an order or orders in favour of the claimant or, where there are 2 or more claimants, in favour of those claimants if the total of: (a) the amount or amounts (if any) of money to be paid,

(b) the value or values (if any) of the work to be performed, or the services to be supplied,

(c) the amount or amounts (if any) of money to be declared not to be due or owing, and

(d) the value or values of goods (if any) to be delivered or replaced,

under or by virtue of the order or orders would exceed the prescribed amount.

The prescribed amount was $25,000. 9 The claim lodged by the builder specified two sets of items, one of additional items being an unpaid total of $20,558, and the other of unpaid construction variations having a total of $22,328. The two sums totalled $42,886. Handwritten on the last page of the claim were the words, "We are limiting this claim to $25,000 if heard by the Consumer Claims Tribunal" . 10 Counsel for Mr and Mrs Hamilton, Mr M Cohen, referred to the words "the total of" in s 32 and submitted that the total was $42,886 and that the Consumer Claims Tribunal had no express or implied power to allow a claimant to abandon that part of the claim which exceeded the prescribed amount. 11 In my opinion, the Consumer Claims Tribunal had jurisdiction as the sum claimed was within the jurisdictional limit, notwithstanding that the elements making up the claim may have exceeded that sum. 12 In a recent case, Batshon v Elias & Ors (unreported, 3 June 1999), I dealt with an analogous issue. I there referred to the definition of a "consumer claim" under s 3 of the Act and of a "building claim" under s 12A of the Act, both of which included the words "the payment of a specified sum of money". I went on to say: "Wide and general words are used in the definition of 'consumer claim' and of 'building claim'. It is therefore not surprising that the words 'a specific sum of money' which appear in those definitions have been given a wide reading. In W D & H O Wills Australia Ltd v Consumer Claims Tribunal (NSW) & Anor (unreported, Court of Appeal, 23 July 1998), the term was held to encompass a claim for a specified, that is, nominated sum, notwithstanding that the amount was claimed by way of unliquidated damages. Similarly in Hales v Consumer Claims Tribunal & Anor (1990) ASC 55-985 and in Sandford v Marjen Building Contractors Pty Ltd (1992) ASC 56-148 the term was held to encompass a net sum due after taking into account items on both sides of the ledger. It matters not that the quantum of the various issues to be considered exceeds the jurisdictional limit of the Tribunal, $25,000, provided that the sum that is sought in the claim is within the jurisdictional limit. This was made clear by Allen J in Hales when his Honour said at 58,855: 'It is apparent, therefore, that the jurisdiction is related to the nature of the relief sought by the consumer rather than the cause of action upon which that claim was founded.' In Sandford Grove J said at page 57,451: 'The jurisdiction of the Tribunal is, as the provisions I have set out show, limited by the order it can make not by the value of the ingredients of the dispute from which proceedings originated.' It follows that a claim must specify a sum which is within the jurisdictional limit of the Tribunal; but it matters not that the value of the elements making up the claim may exceed the jurisdictional limit of $25,000, if that sum is within the jurisdictional limit. As Stein JA, with whom Mason P and Meagher JA agreed, in Wills said at page 8: 'It [the claim] has to be for the payment of a specified sum of money. The requirement is satisfied if a sum of money is specified in the claim and is within the jurisdictional limit of the Tribunal.' In Archcom Limited v Consumer Claims Tribunal & Ors , (unreported, Administrative Law Division, 29/9/95) Simpson J made the same point when her Honour said at page 16: 'Whether jurisdiction exists must be determined by reference to the 'claim' made by the claimant ... 'Claim' is to be equated with what is asserted by the claimant; that is what the claimant, rightly or wrongly asserts. Jurisdiction depends upon the correct analysis of the assertion made by the claimant in the claim form.' Provided that a claim asserts on its face a building claim as defined, and provided that the sum specified in the claim is within the jurisdictional limit, the Tribunal will have jurisdiction." 13 In that case, it was held that the Consumer Claims Tribunal had jurisdiction where a claim, as it was in this case, was made up of credits and debits but the sum of which payment was sought was $25,000 or less. In the present case, the sum specified as the sum of which payment was sought was within the prescribed limit. That ground of attack therefore fails. 14 The other ground taken is that the Tribunal failed to accord natural justice to Mr and Mrs Hamilton. The affidavit of Mr Hamilton annexed five progress claims which showed no sum against the item "Variations" . A letter dated 18 May 1998 from the builder to Mr and Mrs Hamilton, which was also attached to the affidavit, annexed a list of variations which totalled $22,328, which was one part of the total items claimed in the proceedings before the Tribunal. 15 Mr Hamilton said in his affidavit that he had informed the Tribunal that the claim for extras and the variations had been neither authorised nor agreed. In that respect, Mr Hamilton referred to a paragraph of the contract which required that variations be signed by the contractor and the owner. By way of example of Mr Hamilton's affidavit, I set out para 4: "During the hearing before the Defendant Tribunal, I made submissions to the Referee that, in respect of the alleged variations claimed by Warrington , Warrington had failed to comply with its obligations under clause 11 the Building Contract and also Section 10 Home Building Act, in that it had never inform us of the variations prior to commencing the work, had never submitted to us any quotation, estimate or account for the work prior to commencing the work and had never obtained any consent, written or oral, to carry out those works. By failing to provide this notice, my wife and I were denied the opportunity of deciding whether to have the variations carried out, or to otherwise negotiate or quantify the costing for the work. I also submitted to the Referee that much of the work claimed to be variations by Warrington, was in fact work which was included in the base contract price for the dwelling." 16 The matters referred to in Mr Hamilton's affidavit were only a part of the material before the Tribunal. No attempt has been made by either party to set out the material on which the Tribunal's finding, that there were fourteen extras, seven deductions and two credits, as specified and valued by the Tribunal, was based. Mr Hamilton's affidavit raised no specific matter of procedure about which complaint was made. It was not suggested that, in the course of the hearing, Mr and Mrs Hamilton were taken by surprise or were not given an opportunity to say all that they wished to say. 17 The case as put by Mr Cohen for the plaintiffs was that the reasons of the Tribunal were deficient in that they failed to discuss the issues, including the significance of clause 11 of the Building Contract, and that it was impossible to determine from the reasons for decision what was the basis upon which the Tribunal came to its findings. 18 Mr Cohen referred to State Rail Authority of New South Wales v Consumer Claims Tribunal & Ors (1988) 14 NSWLR 473 in which it was held that the Consumer Claims Tribunal was a court exercising judicial power in disputes arising under contracts for the supply of goods and services. Mr Cohen relied upon the words of Hope JA at p 479 where his Honour said: "As appears from these provisions and from the decision in Cachia v Isaacs (1985) 3 NSWLR 366, the tribunal must resolve issues which are in dispute, and must keep a record of those issues as well as a record of its decision upon them. Despite the power given to the tribunal to decide to make orders which are fair and equitable, including orders other than for the payment of money (although in due course the claimant may be forced back to such an order), the tribunal cannot fix the amounts of the payments or determine the nature of the other acts to be performed otherwise than on the basis of the evidence before it and the contractual rights and obligations of the parties; the tribunal does not exercise 'palm-tree justice'. It is a court exercising judicial power, with the duties upon it and the consequences to the parties that such a power and the exercise of it involves. It is a jurisdiction which can, within its prescribed limits, be regarded as a jurisdiction of a court to resolve issues arising under contracts for the supply of goods or services." 19 Despite the submissions of Mr Dwyer, counsel for the builder, to the contrary, I agree with Mr Cohen that one cannot tell from the reasons for decision what was the basis upon which liability was found. I assume that the Tribunal found that the extras and variations were authorised and that the builder was entitled to succeed on a quantum merit: see Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221. Nevertheless, the reasons simply disclose the Tribunal's ultimate findings, not the reasons for them. The reasons do not satisfy the tests discussed in many cases, clearly for example in Mifsud v Campbell (1991) 21 NSWLR 725. 20 Notwithstanding the direction given by s 34A of the Act, that the reasons for decision should be "as brief as is reasonably practicable in the particular case" , I think it is important in the interests of justice that the parties should be able to understand from the reasons for the decision what were the basic findings of fact on which the decision was based and on what principles of law liability was found. 21 Mr Cohen submitted that, in the circumstances, the Tribunal had not provided justice in the sense described by Hope JA in the passage I have set out above. He submitted that the Tribunal had failed to provide natural justice to Mr and Mrs Hamilton. 22 In my opinion, s 12 of the Act does not extend to a case such as the present. A failure to give adequate reasons has been held in many cases to be an error of law, and in circumstances where there is jurisdiction to set aside a decision on such a ground, decisions have been set aside for lack of reasons. But the issue in the present case is not whether there was any error of law, for that is not a ground specified in s 12(2)(b) of the Act. The question is whether there was a failure to accord natural justice to Mr and Mrs Hamilton. 23 In my opinion, the words "natural justice" relate to procedural fairness. The reasons for decision on the other hand go to the substance of the case. A failure to give reasons is held to be an error of law because it is tied up with the question as to whether an error of law exists in the decision. Courts consider that adequate reasons should be given so that the parties may understand the decision and so that an appellate court or a court of judicial review may determine whether or not the decision erred in law. 24 Procedural fairness, however, is concerned with a different matter; it is concerned with giving the parties a fair go in the hearing, enabling them to understand what are the issues to which they should direct their attention, and giving them a fair opportunity to put their case. 25 The view which I have just expressed was also expressed by Simpson J in Archcom Pty Ltd v Consumer Claims Tribunal & Ors (unreported, 29 September 1995) , where her Honour discussed a similar issue. Her Honour said: " There is some authority for the proposition that the obligation to give reasons is an incident of the obligation to accord natural justice: Xuereb v Viola (1989) 18 NSWR 453 at 469, per Cole J.

But the rules of natural justice are more traditionally seen as two in number - the 'audi alteram partem' (requiring that an opportunity to be heard be given), and the 'bias rule' requiring the decision maker to be disinterested or unbiased in the matter to be decided. More recently, a 'no evidence rule' has made its appearance: see Allars: Introduction to Australian Administrative Law , Butterworths, 1990 at p 236.

That failure to give reasons, or adequate reasons, where there is an obligation to do so, can constitute an error of law is no new proposition: Pettit v Dunkley [1971] 1 NSWLR 376; Housing Commission of NSW v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378 at 385, see the cases there cited; Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247. Whether that failure is an error of law constituting a denial of natural justice is far less certain. In Soulemezis , McHugh J noted that there were at least three purposes for the giving of reasons for a judicial decision. The first was to enable the parties to see the extent to which their arguments had been understood and accepted as well as the basis of the judge's decision; the second was in the interest of furthering judicial accountability; and the third concerned the formulation of rules for application in future cases. None of these is concerned with the principles of natural justice as traditionally seen, and as were, I think, envisaged by the legislature in enacting s 12(1)(b). In Public Service Board of NSW v Osmond (1986) 159 CLR 656, a case concerned with the obligation of administrative decision makers to give reasons, Gibbs CJ on two occasions drew a distinction between the requirement of the rules of natural justice that a person affected by a decision be given an opportunity to be heard and the communication of reasons for a decision once reached (p 663, p 666).

I do not think the authorities are such as to warrant a conclusion that the rules of natural justice include an obligation to give reasons. Where there is an obligation to give reasons for a decision, that obligation is explained by reference to rules other than the traditional rules of natural justice." 26 In view of her Honour's exposition, I would follow the view which she there expressed; but I should add it accords with my own opinion. 27 I can see no basis in the present case upon which it should be held that Mr and Mrs Hamilton were denied natural justice in relation to the hearing or determination of the claim. 28 For those reasons, the application to the Court must be dismissed with costs.

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