Herbert v American Express Australia Ltd & Ors

NCAT Appeal Panel|2015-09-25

Overview

Ms Herbert appeals against the decision of the Tribunal below dismissing her claim in respect of an insurance policy providing her with income protection in the event of ill health or injury.
Ms Herbert suffered a stroke at work on 5 August 2014. At that time she was employed by American Express Australia Limited (Amex), the first respondent. The relevant insurance policy was provided by the third respondent on the appeal (the insurer). The insurance was part of a superannuation arrangement supplied by Amex under the terms of Ms Herbert's employment. Mercer Superannuation (Australia) Limited (Mercer) was the trustee of the fund arranged by Amex, which included the relevant insurance policy. Mercer is the second respondent on the appeal.
In essence, Ms Herbert's claim was that her entitlement to payment should have accrued from immediately after her stroke and not after a waiting period of 90 days. She sought payment for this extra period as well as damages for disappointment and distress. She based her claim in contract and on misleading and deceptive conduct and unconscionable conduct (not within the unwritten law) in contravention of ss 18 and 21 of the Australian Consumer Law.

Factual background

Ms Herbert commenced employment with Amex on 1 March 2012. The terms of her employment were set out in a letter from Amex dated 28 February 2012. She was employed as Customer Care Professional - Credit Services commencing at an annual gross salary of $47,000.
Under the terms of her employment Amex was required to contribute an amount equivalent to 10% of her salary to the superannuation fund of her choice. Those terms referred to the American Express Australia Super Plan (Amex Super Fund) administered by Mercer Super Trust. This was the default superannuation fund supplied with contributions from Amex, in the absence of alternative superannuation chosen by the employee.
The terms of the offer from Amex of 28 February 2012 concerning superannuation were as follows: "Superannuation The Company will contribute an amount equivalent to 10% of your salary to the superannuation fund of your choice. Superannuation will be paid to the nominated superannuation plan on your behalf. Contributions will continue to go to your nominated plan until you advise the Company otherwise. The American Express Australia Superannuation Plan is administered by Mercer Super Trust. You can choose an alternative superannuation fund to which the Company makes your superannuation contributions. If you wish to elect an alternative fund to the American Express Australia Superannuation Fund then you will need to complete the Choice of Fund form (contained in your new hire pack) and return this to our Payroll Department. You may make this choice at any time after starting employment. The Company will direct contributions into your nominated fund (subject to it being a compliant fund) within two months of receipt of your nomination. Please note that you are responsible for informing yourself about the terms of the American Express Australia Superannuation Plan and insurance and other benefits of your choice. You are also responsible for liaising with the Trustee of the Plan and seeking and obtaining any relevant benefits available to you under the Plan. For information about the American Express Australia Superannuation Plan, please review the Members' Kit received with this offer letter, or go to https://square.aexp.com under Australian Compensation and Benefits section."
Ms Herbert accepted the offer from Amex by signing an Amex document entitled "Terms and Conditions of Employment Acceptance" specifying the date of 5 March 2012. That document was in the following terms: "Acceptance I, Denise Herbert, confirm that I accept the offer to join American Express Australia Ltd. commencing as Customer Care Professional - Credit Services on the terms and conditions outlined in this employment agreement dated 28 February 2012. I confirm my anticipated commencement date is 01/03/2012".
It was common ground that, pursuant to the Amex Super Fund, Ms Herbert was provided with total but temporary disablement cover (TTD) for a maximum benefit period of two years on terms that included a waiting period of 90 days. This meant that no benefit was paid to a disabled employee for any period of time during the waiting period: see clause B3.14 and the definition of waiting period in the Policy.
As already mentioned, Ms Herbert suffered a stroke at work on 5 August 2014.
By a completed application form dated 14 October 2014, she lodged a Total and Temporary Disablement Claim with the insurer.
Shortly before making that application, the Workers Compensation Commission, by order dated 3 October 2014, refused an order of interim payment to the appellant on the ground that she had not discharged the onus of establishing employment as a substantial contributing factor to the injury.
By letter from the insurer dated 4 December 2014, Ms Herbert was informed that her claim, for what was described as a Group Salary Continuance Claim, was accepted. She was informed that a first payment had been made representing the period from 3 November 2014 to 30 November 2014. The letter also stated that the maximum benefit period was two years and that her benefit would cease on 2 November 2016. The letter stated that her monthly benefit would be the amount of $3,132.98.
Ms Herbert commenced her claim in the Tribunal on 22 December 2014 seeking an urgent or expedited hearing of her claim, which she described as a claim for breach of contract for income protection and also made reference to an attached submission. In a letter to NCAT provided with her application, she said (amongst other things): I believe that having paid for the "income protection" and having suffered Disappointment and Distress I am entitled to my whole "income protection" forthwith.
The attached submission lodged with her claim, signed by Mr Herbert on behalf of Ms Herbert, included the following: (1) The Plaintiff contends that upon commencement of her employment with American Express Australia Pty Ltd that her employer expressed and implied that she was covered under their "Cover" for all benefits of employment from "Super" to other entitlements. (2) The Plaintiff contends that from on or around 13 August 2014 to on or around 4 December 2014 that her employer and their Insurers under their "income protection" policies have neglected in contract and or good conscience have failed to "honour" reimburse her for loss of income for that period being in total for on or around 13 weeks of "income protection" as she pays a monetary sum dollar figure for that "income protection". The plaintiff contends that in Balmain New Ferry Co v Robinson the High Court expresses and implies that bargains must be kept. (3) The Plaintiff contends that the relevant parties have used "unconscionable conduct" in denying her that "income protection" and are in violation of the … ACL pursuant to sections 18(1) and 21(1)…. …. (9) The Plaintiff contends that she having paid an amount for her "income protection" and not having that benefit immediately from on or around 13th August 2014 up to and including on or around the 4th December 2014 she has suffered "Disappointment and Distress" and is entitled to damages, also for breach "contract" pursuant to High Court cases hereunder [reference was then made to Baltic Shipping v Dillon and to Gates v City Mutual]… (11) The Plaintiff contends that those individual employees who have denied her "income protection" over the relevant period should be made personally liable for her loss of monetary/revenue totalling some on or around thirteen (13) weeks… (14) The Plaintiff respectfully seeks an order from NCAT Ordering the Defendant and its relevant individuals to reimburse her forthwith in dollar/monetary amounts for thirteen (13) weeks of backed entitlements and the whole amount for the two (2) year period under the "income protection" policy in total some on or around seventy four thousand four hundred dollars ($74,400).
The submission referred to various aspects of the law in support of her claim. In addition to s 18(1) and ss 21(1) of the Australian Consumer Law, reference was made to Blomley v Ryan (1956) 99 CLR 362, Oceanic Sun Line Co v Fay (1988) 165 CLR 197; Maxwell v Highway Hauliers Pty Ltd (2014) 252 CLR 590; s 54(1) of the Insurance Act 1984 (Cth), Concrete Constructions Pty Ltd v Nelson (1990) 169 CLR 594; Houghton v Arms (2006) 225 CLR 553 and Stern v McArthur (1988) 165 CLR 489.
Before lodging the claim in the Tribunal, Mr Herbert had complained to the insurer, in email correspondence, about withholding monetary entitlements stating that he regarded this as unjustifiable, unprofessional and unconscionable behaviour.
Following receipt of the claim lodged in NCAT, the insurer wrote to Ms Herbert, by letter dated 31 December 2014, confirming its position, namely, that benefits would commence after the expiry of the waiting period (that is, from 3 November 2014), no benefits would be paid during the waiting period, and that benefits would be paid on a monthly basis, not as a lump sum.
Subsequent to lodging the claim, Ms Herbert reduced the amount of her claim to $32,400: reasons below at [25]. It seems that a substantial portion of this amount comprised compensation sought for disappointment and distress.

Decision of the Tribunal below - jurisdiction issue

In March 2015, the Tribunal below dealt with an application by the respondents to dismiss Ms Herbert's claim for want of jurisdiction: Judgment of 18 March 2015. The respondents also sought summary dismissal of Ms Herbert's claim pursuant to s 55(1)(b) of the Civil and Administrative Tribunal Act 2013 (the Act).
The Tribunal below dismissed the respondents' application. As to jurisdiction, the Tribunal dismissed the argument that Ms Herbert was not a "consumer" within the meaning of the Consumer Claims Act, 1998 (NSW) (the CCA) because she was not a person to whom "services" (as defined) were supplied. In this regard, the respondents argued that the exclusion from "services" of rights or benefits, being the "performance of work under a contract of employment" applied: s 3 of the CCA. Correctly, in our opinion, the Tribunal below decided that this exclusion did not extend to the provision of rights or benefits by an employer to an employee: at [28] and [33].
The Tribunal below was also of the opinion that the "ACL" conferred jurisdiction upon the Tribunal to deal with the claims of engaging in misleading or deceptive conduct or unconscionable conduct, in contravention of ss 18(1) and 21(1) of the "ACL". In part, we disagree with the Tribunal below about this. We say more about this in paragraphs 45 to 47 below. We also mention here that in the area of jurisdiction a distinction needs to be kept in mind between the ACL as a law of the Commonwealth (ACL, Cth) and the ACL as a law of New South Wales (ACL, NSW).
The Tribunal below also dismissed the respondents' application for summary dismissal on the ground that Ms Herbert's claim was manifestly hopeless.
No appeal was brought against the Tribunal's decision of 18 March 2015. However, as outlined below, at the instigation of the Appeal Panel, the question of jurisdiction of the Tribunal arose at the hearing of the appeal in this matter. That led to written submissions from the parties about jurisdiction, subsequent to the oral hearing of the appeal.

Decision of the Tribunal below - merits of the claim

On 1 May 2015, the Tribunal below dismissed Ms Herbert's application. Its reasons included: 1. The benefit that Ms Herbert was entitled to in circumstances of TTD under the insurance policy was subject to a waiting period of 90 days, unless otherwise specified in the TTD employer plan schedule. There was no such specification and, therefore, the waiting period applicable to Ms Herbert was 90 days. In the circumstances, Ms Herbert was not entitled to receive any benefit until the 91st day from the date of onset of her illness, that being 3 November 2014: at [30]-[34]. 2. Ms Herbert's contention that the refusal by any of Amex, Mercer or the insurer to advance her the TTD benefits before 3 November 2014 was unconscionable should be rejected as misconceived. The Tribunal below said that it was impossible on recognised tests as expanded in Louth v Diprose (1992) 175 CLR 621 to conclude that the conduct of any of the respondents in relying on the waiting period was other than orthodox and lawful. It could not be said that at the time Ms Herbert accepted the terms and conditions of her employment she was otherwise than in a position to consider and accept such terms. In this respect, the Tribunal noted that acceptance occurred some five days after the written offer of employment of 28 February 2012: at [35]-[41]. 3. No evidence was advanced by Ms Herbert in support of her claim of misleading and deceptive conduct: at [42]-[44]. In any event, by signing the acceptance of the offer of employment of 5 March 2012, the appellant represented that she had either read and understood the terms and conditions or was willing to take the chance of being bound by whatever might be contained in such terms and conditions. 4. Accordingly, there was no basis upon which Ms Herbert could have orders made in her favour pursuant to cl 236 of the ACL. 5. Ms Herbert should pay the respondents' costs - special circumstances were not required because the claim exceeded $30,000: cl 38(2)(b) of the Civil and Administrative Tribunal Rules 2014.

Grounds of Appeal

Ms Herbert's grounds of appeal were sought to be provided by a statement in support of her appeal, supplied with her Notice of Appeal dated 14 May 2015.
Ms Herbert did not have legal representation in the Tribunal below or on appeal. Ms Herbert's husband appeared for her at the hearing in the Tribunal below and at the hearing of the appeal. We have had regard to her lack of legal representation in seeking to discern the real issues that she sought to raise on appeal. Nevertheless, the terms of the statement in support made it difficult to detect the errors in the reasons for which she contended. It also contained some extravagant and unwarranted criticisms of the Tribunal below and of the respondents' legal representatives.
Her statement in support of her appeal was signed on her behalf by her husband. In the statement the following points, amongst others, were made: 1. The relevant insurance policy, including the waiting period term, was not applicable to the appellant because it provided that the policy was governed by the laws of Victoria: cl 1.4 of the insurance policy at [1]. It was said that the respondents' legal representatives had all submitted instruments knowing them to be false in that they knew the policy was not applicable because of the provision that it was governed by the laws of Victoria: at [5]. 2. It was contended that the unconscionable conduct by the respondents was that they knew that their policies were governed by the laws of Victoria and were not enforceable against the appellant because she was a resident and employee in New South Wales, and that in turn the respondents must pay out the whole of the TTD claim as a lump sum for the whole year: at [14]. 3. It was contended that the paragraphs of the reasons below in which the Tribunal found that the appellant was not entitled to the payment of any benefit in respect of TTD during a 90 day waiting period was misconstrued and plainly wrong because the policy was governed by the laws of Victoria and unenforceable in New South Wales: at [20]. 4. The appellant contended that she paid a monetary sum for her "income protection" known as a TTD believing that the full benefits of the TTD would be activated at once if needed. The appellant believed that upon having her stroke in the course of her employment on 5 August 2014 that payments by the respondents would commence forthwith. She contended that upon paying for a product, being "income protection" and not receiving this immediately, she is entitled to be placed in the same position as if the contract had been performed and is entitled to disappointment and distress: at [7]-[12]. 5. The appellant contended that evidence was adduced on her behalf showing that she had not received all material documentation upon her signing the employment contract, as suggested to the contrary in the reasons for decision of the Tribunal below. She contended that, given that all the material documentation had not been made available to her by the respondents at the time of the offer of employment and her acceptance of that offer, Oceanic Sun Line Co v Fay applied because that case had held that clauses on a ticket could not be relied upon because the contract with the passenger had been made before the ticket was issued: at [21]-[23]. 6. The appellant contended that the Tribunal's conclusions that no evidence had been advanced to make good the allegation of misleading and deceptive conduct and as to the representation by the appellant in signing the acceptance, was misconstrued and plainly wrong: at [22]. 7. In addition to the above, the statement contained various unspecific contentions, including: 1. the Tribunal member below had submitted his order and reasons of 1 May 2015 knowing such to be false and misleading, thereby acting deceitfully and unlawfully in breach of ss 307B and 307C of the NSW Crimes Act 1900 and s 87 of the Commonwealth Crimes Act 1914: at [2]; 2. the Tribunal below had applied the wrong statutory provision to the facts, made a finding of fact where there was no evidence to support the finding, allowed in evidence which was inadmissible, did not give the appellant an adequate opportunity to present her case, and did not give the appellant adequate opportunity to respond to any relevant information which was against her: at [3]; 3. the Tribunal below did not give correct weight to the appellant's evidence and oral and written submissions, but instead made disparaging remarks as to why the appellant used Mr Herbert as her mouth piece: at [4]; 4. the Tribunal below erred in fact and law, and did not exercise all due diligence and care: at [16]; 5. the respondents and the Tribunal below acted in concert to deny/withhold the appellant's lawful entitlement by taking upon themselves to override or overrule the High Court decision in Maxwell v Highway Haulies Pty Ltd; 6. the statements of the Tribunal below in paragraphs 5, 6 and 7 of the Reasons were embarrassing, as the appellant believed that the dictates of justice should always be upheld.
At the hearing of the appeal, Mr Herbert on behalf of Ms Herbert sought to adduce an affidavit of Ms Herbert's dated 22 September 2015. The respondents indicated that they had no objection to that evidence being adduced on the hearing of the appeal. There was no basis for finding that this evidence was not reasonably available at the time of the hearing of the Tribunal below. Hence, the evidence could not be treated as fresh evidence supporting a grant of leave within the terms of cl 12 of Part 6 of Schedule 4 of the Act. However, we permit the evidence to be given under s 80(3) of the Act, as evidence on a new hearing, in view of our opinion that the Tribunal below did err in law. We deal with this aspect further below.
At the hearing of the appeal, Mr Herbert indicated that the appellant's main point on the appeal was that the Tribunal below had erred in law by applying terms of the insurance policy in circumstances where such a policy was inapplicable to the appellant because it was governed by the laws of Victoria. Nevertheless, he indicated that the whole of Ms Herbert's statement represented her grounds of appeal.
At the hearing of the appeal, the Appeal Panel drew to Mr Herbert's attention that the consequence of his argument concerning the governing law provision would be that the appellant had no TTD insurance at all.
Mr Herbert informed the Appeal Panel that the governing law point had been raised in the Tribunal below, despite the absence of any reference to it in the reasons below. No transcript was available on the appeal, and so the answer to the question whether the point had been raised could not be verified. Before the hearing of the appeal, the appellant had been directed to obtain a copy of the transcript (letter from NCAT to the appellant dated 16 June 2015, confirming orders made on 11 June 2015). The appellant did not comply with this direction.
We should also note that the respondents did not agree that the Tribunal below had made the remarks referred to in paragraph 30(c) above about the use of Mr Herbert as the appellant's mouthpiece and because no transcript of the hearing below was supplied by the appellant in accordance with the direction to do so the matter could not be verified;
Although directed to do so, the appellant did not file and serve an outline of written argument before the hearing of the appeal. However, in the appellant's submissions, dated 23 October 2015, in response to the respondents' on jurisdiction, the appellant went beyond the subject of jurisdiction and addressed the subjects of unconscionable conduct, loss and misleading and deceptive conduct. The appellant did so despite the fact that the subject matter of the directions was confined to the issue of jurisdiction.
Also, in the concluding paragraph of these submissions of 23 October 2015, there was set out the orders sought by the appellant. These orders made no reference to damages for disappointment and distress, but rather sought payment in the sum of $8,280.00, for what was said to be the backdated entitlement for a period from 13 August 2014 to 3 November 2014 and, that her TTD claim be paid out forthwith within 7 days.
These additional submissions from the appellant concerning the merits of the appeal made contentions that were similar to those made in the appellant's statement in support of the appeal, but with the following additional matters: 1. In relation to unconscionable conduct, the appellant contended that upon commencement of her employment no material documentation was given to her to make an informed choice and no allocated time was set aside by the employer so that she could read and comprehend the proposed material documentation relating to her proposed entitlements: at [17]. 2. The appellant contended that in or around August 2012, she received some material documentation from Mercer, but not the information pertaining to the proposed coverage for all services and, apparently, not the information containing the waiting period: at [18]. 3. She contended that upon commencement of employment the employer must set aside a place and time for employees to receive all material documentation for at least two independent superannuation funds in order for a choice of the most appropriate fund to be made. 4. As to loss, the appellant contended that paying a sum of money for a "service" and not receiving that service for on or around 90 days she suffered loss from no income and that she was also entitled to damages for disappointment and distress: at [29] and [32]. 5. As to misleading and deceptive conduct, the appellant contended that Amex did not act in good faith by providing her with a reasonable time at work to view and have the material documentation explained to her, and Mercer and the insurer did not provide her with all their material documentation until on or around five months after she commenced employment: at [34]. 6. Also, as to misleading and deceptive conduct, the appellant contended that an extra service was offered in the form of "income protection" and "Total Permanent Disablement" without all the material documentation being provided, but once such document was provided the respondents then relied on the waiting period clause. The appellant contended that most reasonable employees would have the expectation that "income protection" and a claim for TTD would be activated forthwith upon sustaining an injury in the course of their employment.

Alleged bias of the Appeal Panel

Subsequent to the hearing of the appeal, in these written submissions, dated 23 October 2015, in response to the respondents' submissions concerning jurisdiction, Mr Herbert on behalf of the appellant, submitted that each of the members of the Appeal Panel should now recuse themselves, presumably, on the ground of bias.
The submission was in the following terms (correcting some typographical errors): 3. The Appellant believes that the current members of the NSW NCAT have revisited the question of "jurisdiction" at their own instance and believes that they have used "unconscionable conduct" as stated by their Honours Deane and Dawson in Stern v McArthur (1998), "a person should not be permitted to use or insist upon his legal rights to take advantage on another's special vulnerability or misadventure for the unjust enrichment of himself". 4. The Appellant believes that Senior Member P Durack SC was "leading" the Respondent's counsel in particular Partner Mr Tean Kerr of Lander and Rogers Lawyers at the "hearing" on or around 25 September 2015, in which Senior Member P Durack SC advised Partner Mr Tean Kerr of the case "Jenkinson v Chaw 2015" and to "address the points mentioned" referring to what the Tribunal was looking for, in regards to that case which could/may relate to this current case. 5. The Appellant believes that Senior Member P Durack SC, used words to the effect that the Respondents legal representative's "for the Tribunal to hear the case it is dependent on claims arising in connection with another matter which is properly before the Tribunal", again the Appellant believes "leading" the Respondent's Lawyers. 6. The Appellant believes that Senior Member P Durack SC must now recuse himself from this current case. 7. The Appellant believes that Member K Rosser must recuse herself from this current case also as the Appellant believes in a case previously before her in what was then called the NSW CTTT, that Member K Rosser was "biased" against her and her family to the point where her member (K Rosser's) decision was "stayed" by NSW Supreme Court Justice Campbell. 8. The Appellant believes that at the "hearing" Member K Rosser expressed that the Appellant's Affidavit may or may not be admitted as "Evidence", which the Appellant believes would be "manifestly unjust" and contrary to the NSW Evidence Act 1995 sections 55(1) and 56(1), attached hereto and marked as Annexure "B" as a true copy of the mentioned legislation.
No request for any member of the Appeal Panel to recuse him or herself was made at the hearing of the appeal.
The appellant's submission that the members of the Appeal Panel should recuse themselves is not upheld for the reasons set out below.
As to the matters raised concerning Senior Member Durack : 1. We describe in (1) to (7) below the essence of what transpired concerning the "leading" to which the appellant's submission refers. 2. The specific matters referred to in this connection in the appellant's submission about bias concerned the issue of the jurisdiction of the Tribunal to deal with the appellant's case. No aspects of the merits of the appellant's case, or the merits of her appeal, were involved in this consideration. As appears below, the jurisdiction issue has been found in the appellant's favour. 3. At the hearing, Senior Member Durack SC raised with the representatives of both parties a question of the jurisdiction of the Tribunal, explaining that he did so in view of the claim of unconscionability in contravention of s 21 of the ACL, and in view of the employment context to the appellant's case. In that regard, Senior Member Durack SC referred the parties representatives to the recent decision of the Appeal Panel in Jenkinson v Chaw [2015] NSWCATAP 127 - a decision issued on 2 July 2015, in which (amongst other matters) reference had been made to the jurisdiction of the Tribunal to deal with such a claim of unconscionability and to the impact, in that regard, of s 74(3) of the Fair Trading Act 1987 (NSW). In that context, he referred to the feature of s 74(3) which requires that the ACL matter be connected with another matter before the Tribunal over which it has jurisdiction. As to the employment context, he made reference to the decision of the High Court in Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; 169 CLR 594. 4. He explained to the parties that because of the fundamental nature of the question of jurisdiction, the Appeal Panel was raising the issue and requiring it to be addressed, even though the Tribunal below had decided it did have jurisdiction and there had been no appeal from that decision. 5. In so raising the jurisdiction issue, the Appeal Panel indicated it intended to give the parties the opportunity to make submissions about it after the hearing on 25 September 2015 and that the Appeal Panel would otherwise use the hearing time on 25 September 2015 to hear oral argument about the merits of the appeal. Directions were made by the Appeal Panel for written submissions on these issues to be supplied after the hearing. 6. Mr Kerr explained to the Appeal Panel the jurisdiction issues that had been addressed by the Tribunal below. In the course of Mr Kerr's remarks to the Appeal Panel, Senior Member Durack elaborated upon the jurisdiction issues that he had previously outlined to both parties. 7. During the exchanges concerning the jurisdiction issue at the hearing of the Appeal, the Appeal Panel did not express any view, preliminary or otherwise, as to the outcome of appeal, or as to the outcome of the jurisdiction issue. 8. In our opinion, these circumstances do not establish actual bias or a reasonable apprehension in the mind of a fair minded lay observer that Senior Member Durack might not bring an impartial and unprejudiced mind to the resolution of the appeal: see Michael Wilson & Partners v Nicholls [2011] HCA 48; (2011) 244 CLR 427 at [31].
As to the matters raised concerning Senior Member Rosser, the submission that she recuse herself is not upheld because: 1. The appellant does not refer to any aspects of the previous matter dealt with by Senior Member Rosser that give rise to actual bias or an apprehension of bias. In essence, the appellant makes a bare assertion of bias without articulation of a connection between events said to give rise to apprehension and the possibility of departure from impartial decision making: Michael Wilson & Partners at [63] : 2. Further, any issue of bias arising out of the earlier matter referred to has been waived. This is because the circumstances must have been known about at the time of the appeal but no objection was taken at the hearing: Michael Wilson & Partners at [76]. 3. The matter raised concerning the reception of Ms Herbert's new affidavit at the hearing of the appeal was an orthodox and correct approach to the question of whether the Appeal Panel would admit such evidence on the appeal.

Jurisdiction

In our opinion, the Tribunal does have jurisdiction to deal with the appellant's claim.
Briefly, our reasons are: 1. We regard the appellant as bringing a claim against, at least, Amex for breach of contract, misleading and deceptive conduct in contravention of s 18 of the ACL, NSW and unconscionable conduct in contravention of s 21 of the ACL, NSW. It would seem that her claims against Mercer and the insurer are, at least, for unconscionable conduct in contravention of s 21 of the ACL, NSW. 2. In our opinion, the claims for breach of contract and misleading and deceptive conduct against Amex were within the jurisdiction of the Tribunal because of the jurisdiction conferred on the Tribunal under s 7(1) of the, now repealed, CCA. The like jurisdiction is now conferred by Part 6A of the Fair Trading Act 1987 (NSW) (the FTA, NSW). That was, and is, a jurisdiction to hear and determine any "consumer claim". Ms Herbert's claims were consumer claims within the definition of a "consumer claim" in s 3A of the CCA because they arose from a supply of "services", being rights or benefits that are to be provided in trade or commerce, by a supplier to a consumer The relevant definitions of "consumer claim" and "services" are set out below. 3. For the reasons given by the Tribunal below in its judgment on jurisdiction, to which we have referred in paragraph [23], we do not agree with the respondents' submission that the exclusion concerning employment from the meaning of "services" (see definition set out below) is applicable. In this regard, the respondents submit that the TTD was supplied to the appellant "under a contract of employment" and, hence, the exclusion is enlivened. However, that is not the language of the exclusion. Rather, it is, relevantly, in terms of rights or benefits supplied "being … the performance of work under a contract of employment". The supply to the appellant of TTD was not the "performance of work" under a contract of employment. 4. We are satisfied that the TTD rights and benefits to be provided were to be so provided "in trade or commerce" as required by the definition of "services". The respondents accept that this is the case. In our opinion, the prospective provision of the TTD rights and benefits to Ms Herbert by Amex were part of Amex's trade or commerce: This situation can be likened to that in the misleading and deceptive conduct case of Moss v Lowe Hunt & Partners Pty Ltd [2010] FCA 1181, which is to be contrasted with the intra-employment conduct in Concrete Constructions. 5. We accept that the appellant's claim was a claim for the payment of a specified sum of money, and that each of the respondents was "a supplier" within the meaning of the definition of "consumer claim". There was no contention to the contrary. 6. It may well be that the references in s 21 of the ACL, NSW to the role of "the court" in connection with an assessment of unconscionable conduct would operate to deny the Tribunal of jurisdiction to deal with such statutory unconscionable conduct claims, unless s 74(3) of the FTA, NSW applied to confer such jurisdiction,: see Jenkinson v Chaw at [53]. 7. However, the Tribunal will have jurisdiction to deal with a statutory claim of unconscionable conduct under s 21 of the ACL, NSW, on an associated matters basis, where the terms of s 74(3) of the FTA, NSW are satisfied (see Jenkinson v Chaw at [59]-[65]). 8. In our opinion, s 74(3) of the FTA, NSW does confer jurisdiction on the Tribunal to deal with the appellant's claim of unconscionable conduct in contravention of s 21 of the ACL, NSW because such claim is a matter that arises "in connection with another matter the subject of proceedings in the Tribunal". The unconscionable conduct claim arises in connection with, at least, the claims of breach of contract and misleading and deceptive conduct against Amex, which claims are within the jurisdiction of the Tribunal as "consumer claims", for the reasons already given. 9. The decision of the Tribunal below on jurisdiction included the following conclusions: 39. If the foregoing analysis of the proper construction of the Consumer Claims Act, 1998, be wrong, it is clear none the less that the Applicant attracts the jurisdiction conferred upon the Tribunal by the Australian Consumer Law (the "ACL"). 40. The ACL took effect on and from 1 January 2011, and it has provided since that date a further source of jurisdiction to the Tribunal. 41. On the basis that the Applicant invokes its provisions within cll 18(1) and 21(1) by allegations that the Respondent have engaged in misleading or deceptive conduct; or alternatively, that they have acted unconscionably in denying her what she alleges to have be a denial of benefits of 13 weeks, such matters clearly attract the jurisdiction of the Tribunal and properly may be heard upon a final hearing." 1. In our opinion, such conclusions were too broadly expressed and in some respects are not correct, as explained in paragraphs (11) and (12) below. 2. The "ACL" itself, whether as a law of the Commonwealth or as a law of New South Wales, does not confer any jurisdiction upon the Tribunal. As a matter of federal law, jurisdiction to deal with claims under the ACL, as a law of the Commonwealth, is dealt with by s 138 and s 138B of the Competition and Consumer Act 2010. Under those sections, jurisdiction is conferred upon the Federal Court (s 138) and a more confined jurisdiction upon the "several courts of the State and Territories" (s 138B). On present authority, such conferral of jurisdiction on the "courts" of the States and Territories does not include the Tribunal: Trust Company of Australia Ltd v Skiwing Pty Ltd [2006] NSWCA 185; 66 NSWLR 77; see also Jenkinson v Chaw at [71(2)]. 3. So far as claims under the ACL,NSW are concerned, the jurisdiction of the Tribunal to deal with them depends upon whether they were "consumer claims" within the meaning of the CCA Act (now dealt with in Part 6A of the Fair Trading Act 1987 (NSW)), or satisfy the terms of s 74(3) of the FTA, NSW.
As mentioned, and so that the above conclusions about jurisdiction can be better understood, we set out below the relevant provisions of the CCA concerning jurisdiction. 3A Meaning of "consumer claim" (1) For the purposes of this Act, a consumer claim is: (a) a claim by a consumer for the payment of a specified sum of money, or (b) a claim by a consumer for the supply of specified services, or (c) a claim by a consumer for relief from payment of a specified sum of money, or (d) a claim by a consumer for the delivery, return or replacement of specified goods or goods of a specified description, or (e) a claim by a consumer for a combination of two or more of the remedies referred to in paragraphs (a)-(d), that arises from a supply of goods or services by a supplier to the consumer, whether under a contract or not, or that arises under a contract that is collateral to a contract for the supply of goods or services. (2) For the avoidance of doubt, a reference in this Act to a consumer claim includes a reference to a claim by a consumer against a supplier (for example, a manufacturer or wholesaler) who is not the direct supplier of goods or services to the consumer if the claim arises from or in connection with the supply of those goods or services by the direct supplier to the consumer. Section 3: consumer means: (a) a natural person, or (b) a firm, or (c) a small proprietary company, or (d) an owners corporation constituted under the Strata Schemes Management Act 1996, or (e) a company that owns an interest in land and has a memorandum or articles of association conferring on each owner of shares in the company a right to occupy under a lease or licence a part or parts of a building erected on the land, or (f) an incorporated association, or (g) an unincorporated body whose members are associated for a common purpose, or (h) a company limited by guarantee (not being a company limited both by shares and by guarantee), to whom or to which a supplier has supplied or agreed to supply goods or services, whether under a contract or not, or with whom or which a supplier has entered into a contract that is collateral to a contract for the supply of goods or services. services includes any rights (including rights in relation to, and interests in, property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce and, without limiting the generality of the foregoing, includes: (a) the performance of work (including work of a professional nature), whether with or without the supply of goods, (b) the provision of gas or electricity or the provision of any other form of energy, (c) the provision, or the making available for use, of facilities for amusement, entertainment, recreation or instruction, (d) the letting of premises for vacation or recreational purposes, (e) the conferring of rights, benefits or privileges for which remuneration is payable in the form of a royalty, tribute, levy or similar exaction, (f) the provision of insurance cover (but not assurance cover in respect of a person's life), (g) a contract between a banker and a customer of the banker entered into in the course of the carrying on by the banker of the business of banking, (h) the provision of credit, but does not include rights or benefits being the supply of goods or the performance of work under a contract of employment. supplier means a person who, in the course of carrying on, or purporting to carry on, a business, supplies goods or services.

(a) Ms Herbert's affidavit on appeal

The text (without annexures) of the appellant's affidavit, dated 22 September 2015, adduced at the hearing of the appeal was (with corrections): 1. I am the deponent. 2. I make this statement to the best of my recollection, and information available to myself presently. 3. In the month of August 2012 I received an envelope containing my whole employment package with a hard copy of numerous products pertaining to my employment, in which I had NOT read previously, I attach hereto the envelope marked as annexure "A". 4. I believe that upon commencement of my employment I was immediately covered by my employer and or the insurer for any injury I possibly could of received in my course of my employment. 5. I attach hereto a true copy of two (2) I believe precedent High Court of Australia cases marked as annexure "B" which I believe is applicable to my circumstance. The first being the contract was formed upon commencement of my employment and that the ninety (90) days waiting period is null and void (Oceanic Sun Line Special Shipping Company Inc v Fay [1988] HCA 32), and the second case that the insurer may not refuse to pay a claim, (Maxwell v Highway Haulies Pty Ltd [2014] HCA 33. 6. I believe that I paid my employer a sum of monies out of my salary and their insurer/s to cover me immediately for an injury, upon them NOT paying me immediately I believe that I am entitled to "disappointment and distress" pursuant to precedent High Court case Baltic Shipping v Dillon1993 attached hereto and marked as annexure "C" is a true copy from the Austlii web site. 7. I believe that the Respondents "Policies and Procedures" are governed by the rules of the State of Victoria and believe that these "policies and procedures" are null and void in the State of New South Wales. I attach hereto and marked as annexure "D" a copy of the aid page pertaining to the above statement out of their voluminous material documentation.

(b) Governing law point

The appellant's argument that the waiting period term was unenforceable because the terms of the insurance policy were governed by the laws of Victoria is misconceived. Contrary to her argument, the governing law provision does not mean that the policy and its terms only operate for the benefit of employees of Amex who are Victorians or working in Victoria. The appellant became a beneficiary of the insurance policy, including all of its terms and conditions, through her employment with Amex, and the governing law provision does not operate to negate that outcome.

We do not agree with the appellant's argument based on the Oceanic case. The present case is not one where a contract was concluded on certain terms and, then, one party sought to add additional terms by, for example, supplying a ticket containing such additional terms. That is so, even if it be correct that the appellant did not actually receive the terms of the insurance policy.
In our opinion, the effect of the section of her offer of employment of 28 February 2012 concerning "superannuation" (the relevant parts of which we have set out above) was (in default of the appellant's choice of an alternative plan) to incorporate the terms of the American Express Australia Superannuation Plan, including the terms of the insurance policy, into the contractual obligation upon Amex to arrange the supply of such superannuation, including the insurance policy, for the benefit of the appellant.
In her affidavit adduced on appeal, the appellant refers to her belief that upon commencement of her employment she was immediately covered by her employer or the insurer for any injury she received in the course of her employment and she believed she paid her employer and the insurer to cover her immediately for an injury. However, the appellant adduced no evidence of any promise by Amex or the insurer as the source of such belief. The offer of 28 February 2012 and her acceptance provide no basis for such belief and no evidence has been adduced by the appellant of any statements to her (written or oral) on behalf of Amex or the insurer that she was or would be so covered.
(d) The s 54 insurance point
Section 54 of the Insurance Contracts Act 1974 (Cth) does not assist the appellant. In its terms, that section only applies to prevent an insurer from refusing cover where the effect of the insurance would be that the insurer could refuse cover "by reason of some act of the insured or of some other person, being an act that occurred after the contract was entered into…".
A deferral of cover until after the expiry of a waiting period, as in this case, is not a situation to which s 54 applies.

(e) Unconscionable conduct

We do not accept the appellant's arguments on appeal concerning unconscionability.
Firstly, for the reasons referred to above concerning the governing law point, there was nothing unconscionable about the respondents relying upon the terms and conditions of the insurance policy, including the waiting period, in circumstances where the governing law was the law of Victoria.
Leaving aside the governing law point, in our opinion, the appellant has not established the requisite elements of unconscionability, whether within the broader concept in s 21 of the ACL, NSW or within the unwritten law (s 20 of the ACL, NSW).
At first instance, and on appeal, Ms Herbert made reference to s 21 of the ACL, NSW - that is, she based her claim upon the broader concept of unconscionability. In this regard, however, she did not present any evidence in the Tribunal below concerning any of the non-exclusive matters to which the Court may have regard in determining whether there was unconscionable conduct in contravention of s 21. These non-exclusive matters are set out in s 22(1) of the ACL, NSW.
For instance, she did not present any evidence as to: 1. the relative strengths of the bargaining positions of the parties; 2. whether, as a result of conduct engaged in by the supplier, a customer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier; 3. whether she was able to understand any documents relating to the supply of the insurance; 4. whether any undue influence or pressure was exerted on her, or any unfair tactics were used against her in relation to the supply of the insurance; 5. the circumstances under which she could have acquired the equivalent insurance from others; 6. the extent to which the conduct towards her was consistent with the conduct in similar transactions between others.
At its highest, the appellant's case of unconscionability appeared to be grounded upon a failure to physically supply her with the terms and conditions of the insurance policy, either before she agreed to accept her offer of employment or afterwards, but before she had her stroke, a failure to give her time at work to review these terms and explain the terms to her, combined with a belief that she had paid for immediate income protection cover in the event of injury at work.
However, on the limited factual material that the appellant presented in her case, including that which she presented on appeal, we do not accept that she has established any contravention of s 21 of the ACL, NSW.
In this regard, we, firstly, note that in order that conduct be unconscionable in contravention of s21 something more than unfairness or unreasonableness is required: Kakavas v Crown Melbourne Ltd [2013] HCA 25; 250 CLR 392. There needs to be conduct that shows no regard for conscience or that is irreconcilable with what is right or reasonable: Hurley v McDonalds Aust Ltd [1999] FCA 1728.
Secondly, in circumstances where Amex drew to the appellant's attention, in its offer letter of 28 February 2012, which letter she, apparently, had a reasonable opportunity to read and digest, that she could choose an alternative superannuation fund and that she was responsible for "informing yourself about the terms of the American Express Australia Superannuation Plan and insurance and other benefits of your choice", we do not accept that the failures to which the appellant refers amounted to unconscionable conduct. In this regard, we also note that the appellant gave no evidence that she could not understand this aspect of the letter and as to circumstances from which Amex (or the other respondents) ought to have appreciated she did not understand it.
Thirdly, the appellant adduced no evidence of any conduct by Amex, Mercer or the insurer that led or encouraged her to believe she was or had paid for immediate income protection cover.
Finally, the appellant has not established that she suffered any loss or damage as a consequence of any such alleged unconscionable conduct. In this regard, she has not established that if she had known of the waiting period she would have obtained or sought to obtain alternative insurance, without such a waiting period, and that such insurance would have been obtained or that there was a realistic chance it would have been.
We have examined Ms Herbert's argument about unconscionable conduct in this way because it does seem to us that the Tribunal below erred in law in this area. This is because it appears that the Tribunal below applied the more narrow, equitable test of unconscionable conduct in the unwritten law, as revealed by Louth v Diprose, rather than the broader concept of unconscionable conduct, which is the subject of s 21 of the ACL, NSW. Such error falls within the appellant's general assertion in her statement in support of the appeal that the Tribunal below applied the wrong statutory provision.

(f) Misleading and deceptive conduct

We agree with the Tribunal below that the appellant's case based upon misleading and deceptive conduct has not been established because no evidence has been advanced by her to make good that allegation. This is so, even accepting her evidence presented on appeal to the effect that she believed that, upon injury, she would be immediately entitled to the benefit of income protection, without any waiting period. However, as we have pointed out in connection with her unconscionable conduct case, there was no evidence adduced by her of any statement or conduct by any of the respondents capable of leading her to that understanding.
Nor was there any evidence from the appellant as to circumstances that might make any of the respondents conduct misleading and deceptive despite the statement in the terms attached to Amex's letter of 28 October 2012 that the appellant was responsible for informing herself about the terms of the insurance.
Further, for the same reasons that apply to her unconscionable conduct case, there was no evidence from her that could support an entitlement to loss or damages as a result of any misleading conduct.

(g) Other matters relied upon

We are not able to discern any other basis for allowing the appeal.

(h) Costs of appeal

The respondents ask for their costs of the appeal in the event that the appeal is dismissed. They submit that there are special circumstances warranting an order for costs in their favour, as required by s 60(2) of the Act. No specific circumstances are referred to other than to submit that they have been required to respond to issues on appeal that were largely identical to those raised by the appellant at first instance.
At first instance, costs were awarded in the respondents favour. But this was in exercise of the power to award costs, without the requirement of special circumstances, where a claim in the Consumer and Commercial Division of the Tribunal is in excess of the amount of $30,000: rule 38(2) of the Rules. The respondents do not contend that such rule applies on an appeal. We note that in Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 the Appeal Panel found that rule 38(2) does not apply to the power of the Appeal Panel to award costs.
We do not regard the respondents as having established special circumstances warranting an award of costs in their favour, particularly, in view of our opinion that there was error of law by the Tribunal below with respect to the issue of unconscionability.
Accordingly, we reject the respondents' application for costs of the appeal.
Orders on appeal
For the above reasons, we order that the appeal be dismissed.

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 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: 23 February 2016

Insurance Act 1984(Cth)

Insurance Contracts Act 1974(Cth)

At a glance

Court

Decision date

Catchwords

Source

Catchwords

Judgment (15 paragraphs)

Parties

Legislation Cited (5)

Cases Cited (23)

Cited By (9)