Jenkinson v Chaw

NCAT Appeal Panel|2015-04-10|Before: Wright J, Simpson J

ipal judgment Parties: Karen Leigh Jenkinson (First Appellant) Coverall Services Pty Ltd (Second Appellant) Chi Chaw (Respondent) Representation: Counsel: M Klooster (Appellants) Respondent in person P Bruckner (amicus curiae)

Solicitors: Sydney City Lawyers (Appellants) File Number(s): AP 14/61457 Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 20 November 2014 Before: RF Buckley, Senior Member File Number(s): GEN 13/64141

Jurisdiction

With respect to the jurisdiction of the Tribunal the following questions arise: 1. In order to be a "consumer claim" in respect of which the Tribunal has jurisdiction under s 7(1) of the Consumer Claims Act 1998 (NSW) (the CCA), must the claim be one that is made against a supplier? 2. If the answer to question (1) is yes, the Tribunal does not have jurisdiction. If the answer to question (1) is no, does the claim in this case nevertheless fall within the meaning of a "consumer claim" as defined in s 7(1) of the CCA? 3. Even if the answer to question (2) is yes, has the jurisdiction of the Tribunal to deal with a misleading and deceptive conduct claim been restricted by the Fair Trading Act 1987 (NSW), (the FTA), in particular, s 74(3) of that Act, in a way which would deny the Tribunal jurisdiction to deal with the Respondent's current claim against the Appellant?
In our opinion, the answers to each of those questions are as follows: 1. no. 2. yes. 3. no.
The Tribunal below concluded that it had jurisdiction to deal with the claim: at [10]. Jurisdiction was not disputed. The Tribunal below referred to various provisions of the FTA and to s 5(2) of the Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) (repealed), but did not elaborate on the reasons for its conclusion. These references do not appear to be complete or entirely apposite. First, no reference was made to s 7(1) of the CCA, which falls for consideration in this context. Secondly, the relevance of the references to ss 11A and 70(2)(b) of the FTA was not revealed. Thirdly, although reference was made to s 74(3) of the FTA, the Tribunal did not deal with the fact that the claim in these proceedings was not connected with another existing proceeding before the Tribunal.

Question (1) - must a "consumer claim" be a claim made against a supplier?

The scope of the Tribunal's jurisdiction under s 7(1) of the CCA depends upon the meaning of "consumer claim" as defined in s 3A of the CCA. The pertinent sections of that Act relevantly provide: 7 Jurisdiction in respect of consumer claims (1) General The Tribunal has jurisdiction to hear and determine any consumer claim brought before it under this Part, whether or not the matter to which the claim relates arose before or after the commencement of this Part, except as otherwise provided by this section." 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." s 3 Definitions (1) … consumer means: (a) a natural person, or … 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 …, benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce … supplier means a person who, in the course of carrying on, a business, supplies goods or services. supply: … (b) in relation to services, includes provide, grant or render services for valuable consideration under a contract … trade or commerce includes any business or professional activity.
The Respondent's claim in these proceedings was that Coverall NSW, the franchisor, had induced the Respondent to enter into the franchise agreement by misleading representations, that the Appellant was knowingly concerned in, or a party to, the making of those misrepresentations and that the resultant loss was the moneys paid to the franchisor to obtain the franchise.
The Respondent was a "consumer" because he was a natural person to whom a "supplier" (Coverall NSW) supplied "services", namely "rights" or "benefits" which were "granted or conferred" in trade or commerce: s 3 of the CCA. The effect of the franchise agreement was that such rights or benefits were granted or conferred. Coverall NSW was clearly supplying those services in the course of a business and was, therefore, a "supplier".
However, the Appellant contends that the Tribunal had no jurisdiction in respect of the claim against her because she was neither a supplier of the services, nor was she a party to any collateral contract with the Respondent. It is correct that the Appellant had no such relationship with the Respondent.
In so contending, the Appellant is supported by the recent decision of the Appeal Panel in Robinson Murray v Bargshoon [2015] NSWCATAP 19 in which the Appeal Panel said (at [62]): Consumer claims are defined by a type of transaction between defined classes of people, respectively called "consumers" and "suppliers" and the first respondent is not a supplier under the CC Act.
It was concluded in that case that the Tribunal did not have jurisdiction to hear and determine the claim against the person who was not a "supplier": at [33]-[34]. Consequently, orders made against the director of the corporate seller of a car alleged to be not of merchantable quality were set aside on appeal, and the claim against the director was dismissed.
The amicus curiae submits that the interpretation of "consumer claim" in Robinson Murray was clearly wrong for a number of reasons, including: 1. The notable absence in s 3A of the CCA of any express requirement that the claim be one against a supplier; and 2. Limiting consumer claims to those against suppliers would not be consistent with the width of the objective in s 2A(a) of the CCA: "to provide remedies to consumers concerning the supply of goods and services".
We agree with the submissions of the amicus curiae on this point.
The legislation establishing predecessor tribunals of the Consumer and Commercial Division of the Tribunal has contained provisions similar in substance to ss 3, 3A and 7 of the CCA and the Courts have consistently held that they are not to be construed narrowly or so as to limit the jurisdiction of such tribunals to claims by one party to a consumer supply contract against another party to that contract.
Yeldham J considered the operation of the Consumer Claims Tribunals Act 1974 (NSW) in Fairey Australasia Pty Ltd v Joyce (1981) 2 NSWLR 314. At the relevant time, "consumer claim" was defined in s 4(1) of that Act as: (a) a claim by a person for - (i) the payment of money … being, in the case of paragraph (a), a claim … arising out of a contract for the supply of goods or the provision of services or for the supply of goods and the provision of services between that person as a consumer and a person who, in relation to those goods or services, or those goods and services, is engaged in a business activity as referred to in subsection 3A
The critical question in that case, according to Yeldham J at 320, was "whether the only jurisdiction of a [consumer claims] tribunal is to make relevant orders … against a person who has contracted with the 'consumer' for the supply of goods or the provision of services or both, the second contracting party being engaged in a 'business activity' as defined in s 4(3A)". At 320 and 322 respectively, his Honour held: In my opinion the Act should not be construed in the narrow fashion contended for on behalf of the plaintiff. Although it is concerned only with the rights of consumers of goods and services, no reason in principle exists for confining claims which may be determined by a tribunal to those which are made by one party to a contract against the other contracting party. The words "arising out of a contract" are of considerable width. They have been considered on countless occasions in connection with other statutes, but it is not instructive to refer to any such authorities. Plainly, if the legislature had intended that the only claims in respect of which a tribunal might have jurisdiction were those where one contracting party sues another, it could, and no doubt would have said so in express words. It is, of course, plain that the person against whom an order is made must be one who has a legal liability to the consumer. and As I have earlier said I consider that the expression "airing out of a contract for the supply of goods of the provision of services" is sufficiently wide to bring within the definition of "consumer claim", a claim by a person for money or performing of work … being an obligation arising out of a contract of the relevant kind, to which the respondent to the claim against whom an order is sought is not a party. Provided a contract between consumer and the person engaged in a business activity for the supply of goods or services does exist it is necessary only, to constitute a "consumer claim", that such claim by one "arising out of" the contract.
In our view, the same reasoning applies to a "consumer claim" as defined in the CCA. There is no difference in substance between a claim "arising out of" and a claim "that arises from". The definition in the CCA is, in fact, wider than the definition under the Act considered by Yeldham J, in that a consumer claim under the CCA includes: 1. a claim that arises from "a supply of goods or services by a supplier to the consumer, whether under a contract or not"; and 2. a claim that "arises under a contract that is collateral to a contract for the supply of goods or services".
If the legislature had intended that a consumer claim under the CCA should be limited to one made against the supplier and not ones against persons other than the supplier who were involved in the supply of goods or services by the supplier, it could and would have expressly said so.
In W D & H O Wills (Australia) Limited v The Consumer Claims Tribunal of New South Wales [1998] NSWCA 293, Stein JA (with whom Mason P and Meagher JA agreed) referred to the reasoning of Yeldham J in Fairey and adopted it in relation to the then applicable definition of "consumer claim" in the Consumer Claims Tribunal Act 1987 (NSW), s 3(1), which was in relevantly the same terms as the current definition in s 3A of the CCA.
Stein JA said at page 4, after referring to the first passage from Yeldham J's judgment quoted above: The Act was amended in 1987 to expressly remove the requirement that the claim 'arise out of contract'. In my opinion, the changes to the legislation make it even clearer that the intention of Parliament was that a consumer claim may be brought, not only against the immediate supplier of goods or services, but also against other parties involved in the supply of goods.
Rather than being limited to a claim against a supplier, a "consumer claim" is defined in the CCA by reference to the nature of the relief sought by the consumer and a causative relationship between the claim and the supply. A consumer claim is not defined by reference to the identity of the party sued. The causative relationship is expressed in words of broad import, namely that the claim "arises from" a relevant supply. We note a like approach to the definition of a "building claim" in s 48A of the Home Building Act 1989 (NSW).
For these reasons, in our opinion, the Appeal Panel in Robinson Murray erred in its conclusion that a claim must be one made against a supplier in order for the Tribunal to have jurisdiction to hear and determine it under s 7(1) of the CCA. Certainly, a supply of goods or services to a consumer is a necessary fact for jurisdiction to exist but a "consumer claim" is not confined to claims between consumers and suppliers.
The decision in Robinson Murray v Bargshoon [2015] NSWCATAP 19 is a recent decision and consequently has not been consistently followed or applied for any appreciable length of time. The Appeal Panel, in that case, did not have the benefit, as we have had, of submissions on this issue from Counsel. The decision is in our view contrary to authority and clearly wrong. In these circumstances, we think it appropriate expressly to state that the decision in Robinson Murray v Bargshoon is overruled and should not be followed.

Question (2) - does the claim otherwise fall within the meaning of a "consumer claim"?

Whether the required relationship between the claim and the supply exists for the purpose of jurisdiction must be determined by a correct analysis of the assertion made by the claimant: Archom Ltd v Consumer Claims Tribunal (Supreme Court (NSW), Simpson J, 29 September 1995, unrep, at page 16).
In the present case, whilst open to criticism as being unspecific (as to which, see further below concerning an absence of reasons for the Tribunal's decision), the Respondent's assertion was that the Appellant was involved in the supply itself by being knowingly concerned in, or a party to, misleading conduct by the supplier which induced the supply. In our opinion, that is a sufficient connection to the supply from which to conclude that the claim "arises from" the supply of services involved in the present case.
In other cases, the supply may be no more than the occasion which gives rise to the loss and the required causal connection with the claim may be absent: Grygiel v Baine [2005] NSWCA 218 per Basten JA at [62].
Given the breadth of the words "arises from" and the range of circumstances in which they will come to be applied, it is not possible to enunciate the precise limits of the causal connection required by those words.
Although not the subject of any submission, we note that, whilst the ACL (NSW) post-dated the CCA (see further below), a claim for loss resulting from misleading and deceptive conduct, including one made against a person involved in that conduct, was not a new right established by the ACL (NSW). Such a right was first established as part of the law of New South Wales with the passing of the FTA in 1987. Even if a new right was created, unless it was made clear that a particular court was to be exclusively engaged with that new right, it would not matter because the jurisdiction in s 7(1) of the CCA is ambulatory - it is not fixed by reference to rights existing at the time of that legislation.
We also note that the Appellant does not contend that the Respondent's claim for loss is not a claim for a "specified sum of money" within the meaning of s 3A(1)(a) of the CCA. The Appellant was correct not to so contend. It is now well established that such expression does not exclude claims for unliquidated damages: W D & H O Wills (Australia) Limited v The Consumer Claims Tribunal of New South Wales [1998] NSWCA 293 per Stein JA at pages 5 to 7; and Batshon v Elias [1999] NSWSC 546 per Davies AJ at [5]. A claim for a "specified sum of money" includes a claim for loss or damage formulated as a specified sum. That was the case here, namely a claim for $20,000.

Question (3) - did the FTA contract the Tribunal's jurisdiction in respect of consumer claims?

The argument for contraction

In her written submissions concerning jurisdiction, the Appellant contends that even if the claim against her is a consumer claim, the Tribunal does not have jurisdiction because s 74(3) of the FTA requires that the claim arise in connection with other proceedings before the Tribunal and this has not occurred in the present case.
The argument is not developed in the Appellant's submissions. Presumably, the contention is that s 74(3) the FTA has restricted the Tribunal's jurisdiction to deal with consumer claims for loss grounded on misleading and deceptive conduct to a situation where such a claim is associated with another claim properly brought in the Tribunal.
Bennion on Statutory Interpretation, 6th edition in section 80 states (at page 267): [W]here a later enactment does not expressly amend (whether textually or indirectly) an earlier enactment which it has power to override, but the provisions of the latter enactment are inconsistent with those of the earlier, the later by implication amends the earlier so far as it is necessary to remove the inconsistency between them.
To like effect, Griffith CJ in Goodwin v Phillips (1908) 7 CLR 1 said [at page 7.3]: So far as possible the Acts are to be read together and as forming one document, and so far as there is anything in a later Act inconsistent with the provisions of the earlier Acts the later Act must be read as a proviso or exception to the former, if possible, but if the provisions are quite inconsistent the later must necessarily operate as a repeal of the earlier. [our emphasis]
In this regard, because s 74(3) was part of the amendments to the FTA made by the Fair Trading Amendment (Australian Consumer Law) Act 2010 (NSW), which commenced in 2010, it is a later provision than s 7(1) of the CCA.
A question of inconsistency can arise because of the presence in one Act of special provisions dealing with a matter and the presence in another Act of general words concerning the same matter. In such a situation the following approach applies: Where there is a general provision which, if applied in its entirety, would neutralise a special provision dealing with the same subject matter, the special provision must be read as a proviso to the general provision, and the general provision, in so far as it is inconsistent with the special provision, must be deemed not to apply.
Per O'Connor J in Goodwin v Phillips at page 14.4: see also the judgment of Dixon J in The King v Wallis (1949) 78 CLR 529 at 550.2.

The applicable legislation

Both pieces of legislation in respect of which this issue arises share a concern for consumer protection in connection with the supply of goods and services. However, for the most part, they each deal with a different subject matter. The CCA is concerned with the provision of remedies and the simplification of dispute resolution through the use of the Tribunal and its predecessors (see the Long Title and s 2A). The CCA is not otherwise concerned with the regulation of the market by the imposition of new standards of conduct or the creation of new rights and public powers of intervention. On the other hand, the latter is very much the objective of the FTA. Nowhere in the current fair trading legislation, or its predecessors, is the impact of any of its provisions on the Tribunal's jurisdiction under the CCA expressly addressed. Nowhere, on its face, does the FTA purport to redefine any conferral of jurisdiction to the Tribunal under the CCA. This is so despite the obvious connection between many of its provisions and the role of the Tribunal in respect of consumer claims.
The fair trading legislation does, however, implicitly acknowledge the role of the Tribunal in respect of legal proceedings brought by consumers of goods and services: see s 12(1), s 15(1) and the inclusion of "tribunal" in the definition of "court" in s 11A. It does so without any clear indication anywhere that the legislature now wishes to restrict that role, at least, so far as claims in respect of misleading and deceptive conduct are concerned.
From the time of the introduction of the FTA in 1987, some of the conduct prohibited has extended well beyond the sphere of consumer claims. The prohibition of misleading and deceptive conduct by a person in trade or commerce is the most obvious example. Other examples include misleading conduct in relation to employment (old s 46), and misleading conduct in relation to any services (old s 50).
We have already set out the terms of s 7(1) of the CCA (in paragraph 13). The key legislative provisions of the NSW fair trading legislation concerning the current issue are now referred to.
The text of Schedule 2 to the Competition and Consumer Act 2010 (Cth) became a law of the State of New South Wales and may be referred to as the Australian Consumer Law (NSW) by virtue of s 28 of the FTA, which section was inserted into the FTA by the Fair Trading Amendment (Australian Consumer Law) Act 2010 (NSW). These amendments commenced to operate on 1 January 2011.
Accompanying the introduction of the ACL (NSW) as a law of the State of New South Wales were amendments to the FTA in Division 4 of Part 6 of the legislation concerning "Remedies applying to ACL matters and local matters". Included in these amendments was s 74(3) which provides: 74 Actions for damages and compensation orders … (3) The Tribunal may decide the matter of whether a person has suffered loss or damage because of the conduct of another person that constitutes a local contravention or a contravention of Chapter 2 or 3 of the ACL if that matter arises in connection with another matter the subject of proceedings in the Tribunal. In deciding the matter of loss or damage, the Tribunal may award such sum, and make such ancillary orders, as it thinks fit.
Following the establishment of the Civil and Administrative Tribunal in 2014, the "Tribunal" came to be defined as that institution.
Section 236(1) of the ACL (NSW) provides: DIVISION 3 - DAMAGES 236 Actions for damages (1) [Recovery of loss or damage] 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.
Section 18(1) in Chapter 2 of the ACL (NSW) provides: 18 Misleading or deceptive conduct (1) [Misleading and deceptive conduct prohibited] A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
Neither s 18 nor s 236 of the ACL (NSW) specify or otherwise indicate that a court, as distinct from a tribunal, is to determine claims of misleading and deceptive conduct. That is to be contrasted with other areas: see, for example, s 21(3) of the ACL (NSW) concerning claims for unconscionable conduct not within the unwritten law and the definition of "court" so as to exclude the Tribunal in s 30(2) of the FTA. On the other hand, in relation to matters concerning unfair contract terms "court" is defined to include the "Tribunal": s 30(4) of the FTA.
The immediate predecessor to s 236 of the ACL (NSW), not introduced until July 2009, had specified that recovery of loss was to be "in a court of competent jurisdiction". There was no definition of "court" for the purposes of that section in the legislation. This predecessor was contained in s 68(1) of the FTA set out below. Section 68 also then included s 68(3), the predecessor of s 74(3), which had been introduced before the change to s 68(1) that incorporated a reference to a "court of competent jurisdiction": 68 Actions for damages (TPA s 82) (1) A person who suffers loss or damage by conduct of another person that is in contravention of a provision of Part 3, 4, 5 (section 43 excepted), 5A, 5B, 5C, 5D, 5E, 5F or 5G may recover the amount of the loss or damage from the other person or from any person involved in the contravention, in a court of competent jurisdiction." … (3) If the matter of such loss or damage arises in connection with a matter the subject of proceedings in the Tribunal, the Tribunal may proceed to decide it, and in so doing may award such sum, and make such ancillary orders, as it thinks fit.
Had the fair trading provisions remained in that form, the argument for a restricted jurisdiction for the Tribunal in respect of s 236(1) matters appears to have been a stronger one than under the current legislation.
As we have already said, the original predecessor of s 74(3) of the FTA (the old s 68(3)) was introduced into the fair trading legislation in 1999 by Schedule 4.5 [5] to the Fair Trading Tribunal Act 1998. This occurred as part of a package of reforms, including the passage of the CCA and separate legislation establishing the Fair Trading Tribunal. This was not a context which would support a legislative intention to narrow the ambit of Tribunal power: see second reading speech for the Fair Trading Tribunal Bill, New South Wales, Parliamentary Debates, Legislative Assembly, 20 October 1998, (Paul Whelan).
Explanatory notes in respect of s 74 of the FTA are of no assistance. There is no explanatory note in respect of the original s 68(3). The explanatory note concerning the introduction of s 74 says nothing about the question of the Tribunal's jurisdiction. It states: Proposed section 74 contains provisions interpreting or limiting the provisions in the ACL relating to actions for damages and compensation orders. (section 68(1A) and (2A), FTA).
The focus of that note is upon other aspects of s 74 concerning recovery of damages for death and personal injury and the Limitation Act 1969 (NSW).

Conclusion

We do not agree that s 74(3) of the FTA has contracted the Tribunal's jurisdiction in respect of "consumer claims". In our opinion, s 74(3) has expanded, rather than contracted, the Tribunal's jurisdiction. Our reasons are as follows.
Under the principle of harmonious construction: … statutory texts enacted by the same legislature are to be construed as far as possible to operate in harmony and not in conflict.
Per Gageler J in Commissioner of Police v Eaton [2013] HCA 2; 252 CLR 1 at [98].
In this connection, there is a strong presumption that the legislature does not intend to contradict itself but, in fact, intends both Acts to operate within their given sphere: Butler v Attorney-General (Vic) (1961) 106 CLR 268 per Fuller J at 276: see also Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom [2006] HCA 50; 228 CLR 566 per Gummow and Hayne JJ at [48], and Saraswati v The Queen (1991) 172 CLR 1 per Gaudron J at 17. A later Act is not to be interpreted as impliedly withdrawing or limiting a conferral of jurisdiction unless the "implications appear clearly and unmistakably": Shergold v Tanner [2002] HCA 19; 209 CLR 126 at [34]; Pearce & Geddes, Statutory Interpretation in Australia, (8th ed 2014, NexisLexis Butterworths) at [7.11] on page 329.
So far as claims for misleading and deceptive conduct are concerned, there is no clear statement of the legislature in the FTA which would have the effect of altering or redefining the jurisdiction of the Tribunal under the CCA. Nor is there a clear and unmistakeable implication to that effect.
In our view, s 74(3) sensibly operates without derogation of the Tribunal's consumer claims jurisdiction in s 7(1) of the CCA and, in part, as an expansion of Tribunal power. It does so in order to avoid the mischief of multiplicity of proceedings. That objective is best served by the operation of s 74(3) regardless of whether it may or may not be clear from time to time that the Tribunal does or does not have jurisdiction from other sources to deal with the matter.
The section operates as an expansion of Tribunal power, for example, to confer jurisdiction on the Tribunal to deal with a cross-claim for misleading and deceptive conduct by a supplier against a consumer or a third party. There would also appear to be an expansion of Tribunal power by the section in respect of claims for unconscionable conduct not within the unwritten law, given that such claims appear to have been otherwise intended as the province of the courts: in addition to s 21(3) of the ACL (NSW), see old s 43(2) of the FTA.
Further, in our view, no inconsistency arises because of the principle, to which we have referred above, that the general must give way to the specific.
In the first place, the subject matter of s 74(3) is not the same as s 7(1) of the CCA. It extends beyond the sphere of s 7(1) of the CCA and its concern is not to define the jurisdiction of the Tribunal but with the mischief of multiplicity of proceedings.
Secondly, there is no apparent exhaustiveness with which s 74(3) deals with the question of the Tribunal's jurisdiction to deal with claims encompassed by s 236 of the ACL (NSW) which might give rise to a conclusion that only the later provision was intended to apply: see per Gleeson CJ in Nystrom at [2].
Yet further, in our view, the absence of a clear legislative statement of an intention to contract the Tribunal's jurisdiction assumes greater significance in the present situation in view of: 1. the context in which the predecessor of s 74(3) was first introduced as part of a legislative package including the passing of the CCA and the establishment of the Fair Trading Tribunal (see paragraph 49 above), and 2. the absence of any apparent reason to contract the Tribunal's jurisdiction in respect of misleading and deceptive conduct claims beyond the Tribunal's monetary limit.
In saying that expansion of Tribunal power was intended by s 74(3), we express no view on the meaning and scope of the concluding words in the section that the Tribunal "may award such sum, and make such ancillary orders, as it thinks fit". The meaning of that aspect of the section does not arise on the facts of this case.
Finally, in respect of the jurisdiction issue we note that: 1. we are only concerned with the Tribunal's jurisdiction in respect of misleading and deceptive conduct claims for loss or damage. Different considerations may arise in relation to other conduct prohibited by the FTA and to other remedies sought in relation to misleading and deceptive conduct; 2. the determination of a claim under s 236(1) of the ACL (NSW) involves an exercise of state judicial power. We are not concerned with the constitutional issues preventing the conferral of federal judicial power on Tribunals: see, for example, Trust Company of Australia Ltd v Skiwing Pty Ltd [2006] NSWCA 185; 66 NSWLR 77.

Involvement in misleading and deceptive conduct - error of Law

The key conclusion of the Tribunal concerning liability of the Appellant below was (at [39]): On the basis of the above, I am of the view that the slight evidence produced by the applicant, unexplained by the first respondent, a party who had the power to produce it, is sufficient to satisfy the civil onus that the applicant has established that the first respondent [the Appellant] had knowledge of the essential elements of the contravention, and was therefore involved in the conceded contravention, as a person who was indirectly knowingly concerned in the contravention.
The "slight evidence" to which the Tribunal referred consisted of documentary evidence that the Appellant was involved in the management and operation of Coverall, NSW, including involvement in marketing, said to be applicable at the time of the contravention: at [31], [32] and [33].
From such evidence the Tribunal member below inferred that the Appellant: 1. must have been made aware "of the marketing steps taken by [Coverall NSW] to reduce its franchise agreement charges by over 20% so as to induce potential [franchisees], such as the [Respondent], into entering into agreements" at [37], and 2. must have had close contact with the Executive Officer of Coverall NSW, a Mr McDonald, who had signed the franchise agreement with the Respondent: at [37] and [20].
To say the least, we find it difficult to see how this material, even in combination with the failure of the Appellant to give evidence, could warrant a conclusion of knowledge of the essential ingredients of the relevant contravention.
Nevertheless, the error we do find is an absence of necessary findings of material facts in order to arrive at such conclusion, namely as to: 1. the Appellant's knowledge of the making of relevant representations; 2. the falsity of such representations; 3. the Appellant's knowledge of their falsity; 4. some participation by the Appellant in the making of such representations, including by, for example, acquiescence.
Such error appears to have stemmed from a lack of adequate identification of the contravention(s) and a consequent lack of identification of the essential ingredients of the contravention(s).
Such error amounted to a failure to provide adequate reasons: Collins v Urban [2014] NSWCATAP 17 at [54]-[56]. This is an error of law.
It seems from the reasons of the Tribunal below that "the contravention" consisted of misleading and deceptive conduct by Coverall NSW as found in the 2012 proceedings between the Respondent and Coverall NSW: at [22].
However, the reasons given in the 2012 proceedings were not sufficient, for present purposes, to identify the misleading and deceptive conduct, save in one respect only, namely: … oral representations were made to him [the Respondent], prior to his signing the franchise agreement, that within two months of commencing, the Applicant would be provided with a sufficient client base to earn $5,000 per month (at (f) on the second page of those reasons).
It appears from the reasons in the 2012 proceedings that other representations were made in a brochure supplied to the Respondent before he entered into the franchise agreement. Overall, the CTTT concluded that: … I am satisfied that the Respondent engaged in misleading conduct in relation to the degree of training the Respondent was to provide, the way the Respondent would pay for cleaning services so as to ensure a regular "cahsflow" and as to the volume of business that could be expected under the franchise agreement (at (g) on the second page of the reasons).
What specific representations were made in the brochure, or elsewhere, about training, paying for the cleaning services and about volume of business (apart from the above oral representation), and how they were made, were not identified in those reasons.
The Tribunal member below referred to a written representation about volume of business in one of the documents of Coverall NSW: at [22]. It is not clear whether this was the brochure to which the CTTT had referred in the 2012 proceedings. The Tribunal below did not refer to any oral representation about the volume of business or to any representations about training and payment for cleaning services.
To the extent that an oral representation about the volume of business constituted, or was part of, the misleading and deceptive conduct alleged against the Appellant, the foundation for any finding of relevant knowledge of the Appellant concerning such a representation required specific attention, since it was likely to be discrete from the circumstances concerning involvement with the making of written representations.
Further, because one of the representations was a forecast as to the volume of expected business, there would only be falsity if either the maker of the representation did not believe that the represented volume of business would be achieved or did not have reasonable grounds for making the forecast: see, for example, Global Sportsman Pty Ltd v Mirror Newspapers Limited (1984) 2 FCR 82 at 88. Findings about such matters were not made.
Given the nature of the evidence referred to by the Tribunal below and the ultimate conclusion drawn from it, it may well be that the explanation for the absence of findings by the Tribunal below was that it took the view that it was sufficient that the Appellant should have been aware of the relevant essential ingredients of the contravention(s): see also at [35], although the conclusion at [39] is not so expressed.
If the Tribunal did proceed upon such an understanding of the law, then it was in error in doing so, albeit an error, apparently, contributed to by the Appellant's own submission: at [35].
Our conclusion above concerning an absence of reasons is sufficient to uphold the appeal. The Appellant has also complained about a lack of procedural fairness contending that she was not made aware of all the material the Tribunal would rely upon in concluding that the Appellant was involved in the contravention.
It is unnecessary for us to express an opinion on this point. To do so would require a reasonably detailed examination of the material adduced before the Tribunal below and the course taken by it to provide the Appellant with sufficient notice.
It is clear that the Tribunal was hampered by the Respondent's understandable inability to articulate clearly and comprehensively his case and the material he relied upon: see at [5] and [34]. In these circumstances, it appears that the Tribunal took the initiative to examine the file in the earlier proceedings for any relevant material: see at [14]. This was an acceptable course for the Tribunal to take in the circumstances, provided it gave sufficient notice to the parties of any material it would or may be relying upon to determine the matter.
These proceedings will now need to be reconsidered by the Tribunal below. From these reasons, the parties should be better acquainted with the requirements for there to be liability by the Appellant, as well as the need for the Respondent to establish exactly what he asserts was the contravention(s) of s 18 of the ACL (NSW) by Coverall NSW and how the Appellant was aware of the circumstances and participated in Coverall NSW's contravention(s).

Orders

For the above reasons, the Appeal Panel makes the following orders: 1. The time for lodgement of the appeal be extended to 23 December 2014. 2. The appeal be allowed. 3. The order made by the Tribunal below on 20 November 2014 be set aside. 4. The whole of the case be remitted to the Tribunal below for reconsideration by that Tribunal constituted differently from the Tribunal at first instance. 5. Directions be made by the Tribunal below for the service of further evidence that the parties may wish to rely upon.

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: 02 July 2015

Civil Administrative Tribunal Act 2013(NSW)

Consumer Claims Act 1998(NSW)

Consumer Claims Tribunals Act 1974(NSW)

Consumer Claims Tribunal Act 1987(NSW)

Consumer, Trader and Tenancy Tribunal Act 2001(NSW)

Fair Trading Amendment (Australian Consumer Law) Act 2010(NSW)

Fair Trading Tribunal Act 1998(NSW)

Trade Practices Act 1974(Cth)

At a glance

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Judgment (13 paragraphs)

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Legislation Cited (12)

Cases Cited (16)

Cited By (17)