Jonsson v Arkway Pty Ltd & Anor

Supreme Court of NSW|2005-02-15|Before: Insurance P, Mr P, Shaw J

Background 2 Senior Tribunal Member GJ Durie conducted the hearing of this matter over 3½ days in the CTTT upon all issues. Ultimately, on 25 November 2002, the Tribunal Member dismissed Ms Jonsson's application in which she claimed that the transactions between the respondent and herself were subject to the provisions of the Consumer Credit Code. That is, the Tribunal found that it did not have jurisdiction to hear the matter. The plaintiff appealed this decision of the Tribunal to this Court. On 16 September 2003 Shaw J upheld the plaintiff's appeal against the CTTT decision: Jonsson v Arkway Pty Ltd and Anor [2003] NSWSC 815. 3 On 25 November 2002 the Senior Tribunal Member made findings concerning the credibility of the principal witness for the defendant. The Tribunal Member made a finding that Mr Haney was a witness of truth and in relevant respects his evidence was corroborated by contemporaneous documents. The Tribunal member also made a finding that Mr Haney was not shaken in cross examination. The Tribunal Member made adverse findings about the credibility of the plaintiff (J 2, 3, 5, 7 and 12). 4 The Senior Tribunal Member said [at para 6 of his reasons]: "I have set out the matters relating to her credibility which concerned me. In his oral submissions, Mr Batley on behalf of his client conceded that she had in fact signed the various documents. This was a major change from the evidence given at the hearing, where Ms Jonsson insisted in cross-examination that whilst the signature on the documents appeared to be hers, she had no recollection of signing. Despite the concession, I consider that I am able to make an overall assessment of her credibility based upon all of her evidence, including the cross-examination related to the execution of the documents. I do not accept Ms Jonsson as a witness of truth. Her evidence concerning the letter written by Mr Mannering were far from convincing, and she was unable to explain how Mr Mannering could have made the file note concerning the Broadbeach property in December 1997… Ms Jonsson is at that end of the spectrum where I concluded that she has set out to mislead the Tribunal. Despite her denials, I find that she at all times knew that the purpose of the original advance of 18 April 1992 and the mortgage it secured was primarily to provide money to pay the debts of Goldexpand."

Shaw J's decision on appeal 5 In reviewing the Tribunal's reasons in relation to the operation of the Consumer Credit Code, Shaw J said [at paras 17-18]: 17 "The Tribunal took the view that the expression in the code, ' personal, domestic and household purposes' was, in effect, compendious and should be subject to the principle of statutory construction of ejusdem generis: see Pearce and Geddes, Statutory Interpretation in Australia (4th Ed) Butterworths (1996) at 100; Mattinson v Multiflow [1977] 1 NSWLR 368 at 375. 18 The Tribunal was concerned with the apparent fact that the original loan and mortgage between the first defendant and the plaintiff on 1 March 1995 was used to refinance prior business debts to the State Bank, and to provide funds to purchase the property at Broadbeach Waters, for the plaintiff's parents, Roy and Noelene Davis." 6 Shaw J then analysed the meaning of the word "personal" and concluded [paras 27-28]: 27 "In my opinion, the adjective ' personal ' in the context of beneficial legislation has separate and independent work to do, that is to say, connotations distinguishable from the other concepts contained in the same section of ' domestic ' or ' household ' purposes. Each of the adjectives in that section should be given their full meaning and, in my opinion, something can be said to be characterised as ' personal ' if it involves a transaction designed to benefit the person by providing for her parents.

28 Regrettably, there has been some divergence of judicial interpretation in relation to this provision. It seems to me that insufficient attention has been given to the need to broadly and liberally interpret beneficial legislation of this kind. The Tribunal has observed the principles articulated in a number of judgments, in particular, Rafiqi v Wacal Investments Pty Ltd [1998] ASC 155-024 (QDC) per Brabazon DCJ; Linkenholt Pty Ltd v Quirk [2000] VSC 166 per Gillard J; and Park Avenue Nominees Pty Ltd v Boon [2001] NSWSC 700 per Harrison M." 7 Shaw J accepted the plaintiff's submissions that where credit is obtained both for personal purposes and an investment purpose, the Code should apply [para 31]. His Honour found that the Tribunal had erred in "declining jurisdiction to hear and determine the controversy on its merits" [para 36]. The learned judge ordered that the decision and orders of the Tribunal of 25 November 2002 be set aside and remitted the matter back to the Tribunal for determination. 8 It is common ground that at the hearing of the appeal, the plaintiff submitted to Shaw J either that he did not have the power to order that the Tribunal be differently constituted or, alternatively, if he did have such power, that he should order the Tribunal be differently constituted.

Matter remitted to the CTTT 9 On 2 April 2004 the matter was listed for directions in the CTTT before Member R Connolly. On 4 June 2004 the matter came before Member Thane, who made directions for the preparation of the matter for hearing. On 5 July 2004 the plaintiff filed and served an affidavit of the evidence upon which she proposed to rely on at the rehearing. On 7 September 2004, when the matter came before the Tribunal for a directions hearing by phone, the matter had been allocated to Senior Member Durie. At that directions hearing the plaintiff requested that Senior Member Durie disqualify himself on the ground of apprehended bias. By 4 June 2004 the plaintiff had already forwarded submissions to the Tribunal on this issue. Likewise, on 3 September 2004 the defendant had furnished submissions to the Tribunal requesting that Senior Member Durie conduct the rehearing. There was a dispute between the parties as to whether Senior Member Durie should conduct the rehearing. 10 Section 67 of the Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) (the Act) sets out how a rehearing is to be conducted. Section 67(7) reads:

"(7) If a rehearing is held, fresh evidence, or evidence in addition to or in substitution for the evidence on which the original decision was made, may be given on the rehearing." 11 On 5 July 2004 the plaintiff filed an affidavit with the Tribunal which she intended to rely upon in addition to or in substitution for evidence she gave at the earlier hearing. Thus, the plaintiff was seeking to rely upon new evidence to be considered by the Tribunal.

Senior Member Durie's reasons for not disqualifying himself 12 On 28 September 2004 in his reasons, the Tribunal Member decided not to disqualify himself. He referred to a passage in Northern NSW FM Pty Limited v Australian Broadcasting Tribunal (1990) 26 FCR 39 at 42, which says: "… it will generally seem fairer to the parties that the matter be heard and decided again by a differently constituted tribunal. This is because the member constituting the Tribunal will have already expressed a view upon facts which will have to be determined in the rehearing." 13 Senior Member Durie declined to recuse himself because [at paras 9-14]: "9. I accept the principle set out in Northern . However, it is to be observed that their Honours commence their comments by the word 'generally'. From that I conclude that there are to be some cases where the general statement of principle that a tribunal member should recuse himself from hearing a remitted matter does not apply. I also refer to the passage 'This is because the member constituting the Tribunal will have already expressed a view upon the facts which will have to be determined in the rehearing.'

In this case, I have not expressed a view on matters to be determined at the rehearing; the view I expressed was on the applicability of the Consumer Credit Code . Shaw J has held that the conclusion I reached on the facts I found was incorrect, and that those facts should have led to the conclusion that the relevant transactions were covered by the Code. At the remitted hearing, the Tribunal will be starting from this premise, and considering the result of the application of the Code to the facts as found. In my opinion, a reasonable bystander, would not conclude that I would not bring a fair and impartial mind to the matters now to be determined. The further hearing - not a new hearing or a rehearing - starts with the premise that they were so covered.

A close analogy is the further hearing on penalty by a magistrate who has already determined guilt; there may well have been findings about credibility in reaching the stage of conviction, but no-one would suggest that the magistrate could no longer hear further evidence and determine the appropriate penalty.

There are some other discretionary matters which lead to the conclusion that I should not disqualify myself. The first is that there would be substantial expense to the parties and to the Tribunal were the matter to start again. Where the matter is not to start again, but rather proceed to the remaining issues, it would not be proper to start afresh.

Next, the Applicant is legally aided. At this stage, I do not know what order for costs, if any, will be made. If at the end of the day there is to be a costs order against Ms Jonsson for all or part of the proceedings, Arkway may be limited in its recovery by reason of the provision of the Legal Aid Commission Act s.47 to a sum less than it has incurred. Costs to both parties should be kept to a minimum.

Finally, the question could have been covered by Shaw J in his orders. The fact that he has not directed that the continuation be before another member suggests that he saw no vice in my continuing with the matters remaining." 14 The defendant submitted that Senior Member Durie applied the correct law. According to the defendant this appeal is one limited to fact and is therefore not "with respect to a matter of law." I might add, the defendant wrote to the Tribunal Member requesting that he continue to hear this matter.

An appeal "with respect to a question of law" 15 Section 67(1) of the Act reads: "(1) If, in respect of any proceedings, the Tribunal decides a question with respect to a matter of law, a party in the proceedings who is dissatisfied with the decision may, subject to this section, appeal to the Supreme Court against the decision." 16 Section 67 of the Act was discussed recently by the Court of Appeal in Kalokerinos & Anor v HIA Insurance Services P/L & Anor [2004] NSWCA 312. Bryson JA (with whom Santow JA agreed) said: "39 Limited rights of appeal are sometimes conferred in legislation which refers to "a point of law" or "a question of law." The words of subs.67(1) are not in one of these familiar forms, and raise for consideration the possibility that when the legislation refers to the Tribunal "[deciding] a question with respect to a matter of law," the subsection might be intended to refer to deciding a question which is in some way wider than or different to simply deciding the matter of law, such as a question of the kind referred to (not at all clearly) as a question of mixed fact and law, in which decision is required on the application of a legal test or a standard to the facts under consideration; the facts as well as the law must be decided, in the process of deciding what result is produced by their interaction.

40 The terms of subs.67(1) and particularly the words "with respect to" in their context seem to me to be capable of bearing a meaning in which the decision which may be appealed against is a decision specific to a matter of law. However they also seem to be capable of or at least to raise for consideration whether they bear another meaning in which the decision is one in which a question of law is involved, but the decision is or may be a decision on some wider matter than the question of law itself. In the first reading the words "a question with respect to" make the relation between the decision and the question of law specific; in the second reading the longer expression including these words is employed to indicate some penumbrum of meaning wider than the question of law itself.

41 The limitation of the subject matter of appeal is recognised in the opening words of subs.(3) - "After deciding the question the subject of such an appeal …"; and subs.(3) goes on to state what the Court may then do - affirm the decision of the Tribunal on the question, make such order as should have been made or to remit its decision on the question to the Tribunal and order a rehearing. In my opinion s.67 makes a careful delimitation of what the Supreme Court may do. The Supreme Court may only deal with a decision on a question with respect to a matter of law which is appealed against, and subs.67(3)(a) does not have the effect of making an appeal against such a decision a gateway into a wider review and correction of the proceedings in the Tribunal. In careful language s.67 authorises the Supreme Court to decide the question the subject of the appeal; it does not seem to me to be consistent with the provisions of s.67 overall and the careful language which it uses in delimiting and conferring power to interpret subs. 67(3)(a) as by implication greatly widening what may be the subject of an appeal. Subsection 67(3) speaks of what the Supreme Court may do after deciding the question the subject of an appeal, and confers no authority to go on to decide any other question.

47 In my opinion both of Carruthers J's observations in Sullivan v. Waltons Credit Ltd and Canham v. Australian Guarantee Corporation Limited are applicable to subs.67(1). A decision on "a question with respect to a matter of law" in s.67(1) must be a decision on something which arose or was in issue or was debated in the proceedings; something which had to be decided in order to dispose of the proceedings, whether or not it was expressly referred to in the decision. The Tribunal may decide on such issue without overtly referring to it. Consistently with Carruthers J's observations, express advertence to the matter of law is not necessarily required, and the decision might be with respect to a matter of law even though the matter of law is not mentioned, if some decision with respect to it was necessarily involved in the decision.

59 In an appeal under s.67, Pt.51 r.11 is not complied with unless the decision on a question with respect to a matter of law under appeal is clearly identified, and unless grounds are shown which can be specifically related to that decision. There is a need to identify what is said relevantly to be the decision under appeal, and the appellants' Notice of Appeal has not done that in a clear way. The Supplementary Notice of Appeal has not done that in a clear way either, although nominally its terms would claim to do so."

17 The width of s 67 was discussed in Chapman v Taylor & Ors; Vero Insurance Ltd v Taylor & Ors [2004] NSWCA 456. Hodgson JA (with whom Beazley and Tobias JJA agreed) stated succinctly [at para 33]: "… in my opinion, to establish an error of law by the Senior Member, it was necessary to show that he applied a wrong principle of law. That could be shown either from what he said, or because the ultimate result, associated with the facts that he expressly or impliedly found, indicates that he must have applied the wrong principle of law."

18 The Tribunal, after hearing all issues, decided the matter on the basis of jurisdiction. Shaw J remitted the matter to the CTTT for rehearing in accordance with s 67(3)(b). Section 67(7) allows "fresh evidence, or evidence in addition to or in substitution for the evidence on which the original decision was made" to be given on rehearing. As the plaintiff intends to rely on further evidence, the judgment may involve an assessment of those new facts in the light of the credibility of the witness, namely the plaintiff. 19 The defendant has submitted as to the cost and time it would take to completely rehear the matter before a newly constituted Tribunal. This was a discretionary reason why the Tribunal Member did not disqualify himself. As discussed in Northern NSW FM [at 43], it is envisaged that the new Tribunal will have access to the transcript and evidence presented at the first Tribunal, save for material covered by s 67(7), material that the parties wish to change or add. It is my view that the Tribunal Member misdirected himself as to the nature of a rehearing. Hence, it is my view that this appeal is one "with respect to a matter of law." 20 I might add, normally, when this court remits a matter to the Tribunal or Local Court, it is for the Tribunal or court to determine which of its Members should conduct the hearing. If the Court of Appeal remits a matter to a division of the Supreme Court for retrial, a different judicial officer conducts the retrial. It is arguable that the powers given under s 67(3) of the Act do not extend to making an order that a different Tribunal Member conduct the rehearing. Further, it is my view that a Magistrate proceeding to hear evidence and submissions on penalty after recording conviction against the accused is not a close analogy to a rehearing conducted in the Tribunal.

Did the Tribunal Member err in not disqualifying himself? 21 The Tribunal Member has already assessed the character of the plaintiff, and therefore, the credibility of her evidence. It is for this reason that the plaintiff seeks that the Tribunal Member not conduct the rehearing. The plaintiff submitted that a reasonable bystander would conclude that there exists an apprehension of bias on the part of the Tribunal Member. 22 Santow J in Wentworth v Wentworth (NSWSC, unreported 6 February 1998; BC9800282) referred to the principle in relation to apprehended bias where his Honour stated: "1. The proper test for judicial or quasi judicial bias in Australia is as stated by the High Court in Webb v The Queen (1994) 181 CLR 41 at 47 (per Mason CJ and McHugh J, affirming the statements of principle in Livesey v New South Wales Bar Association (1983) 151 CLR 288 and Re JRL; Ex parte CJL (1986) 161 CLR 342 at 352): "When it is alleged that a judge has been or might be actuated by bias, this Court has held that the proper test is whether fair-minded people might reasonably apprehend or suspect that the judge has prejudged or might prejudge the case. The Court has applied the same test to a Commissioner of the Australian Industrial Relations Commission and to a member of the Australian Broadcasting Tribunal. The Court has specifically rejected the real likelihood of bias test. The principle behind the reasonable apprehension or suspicion test is that it is of 'fundamental importance that justice should not only be done, but should manifestly and undoubtedly be seen to be done' ".

The fairminded person has been described in different ways: for example, the reasonable person (Vakauta v Kelly (1989) 167 CLR 568); the reasonably minded observer (Goktas v GIO (1993) 31 NSWLR 684); an objective and reasonable person (Raybos Australia Pty Ltd v Tectran Corporation Pty Ltd (1986) 6 NSWLR 272 at 275). Thus Deane J in Webb (supra) at 67 quoting Livesey (supra) at 293: "whether, in all the circumstances, a fair-minded lay observer with knowledge of the material objective facts 'might entertain a reasonable apprehension that [the judge] might not bring an impartial and unprejudiced mind to the resolution of the question' in issue'." 23 The defendant referred to Northern NSW TFM, where Davies and Foster JJ [at 41] cited with approval the passage from Re JRL: Ex parte CJL (1986) 161 CLR 342 at 351-352:

"There may be many situations in which previous decisions of a judicial officer on issues of fact and law may generate an expectation that he is likely to decide issues in a particular case adversely to one of the parties. But this does not mean either that he will approach the issues in that case otherwise than with an impartial and unprejudiced mind in the sense in which that expression is used in the authorities or that his previous decisions provide an acceptable basis for inferring that there is a reasonable apprehension that he will approach the issues in this way. In cases of this kind, disqualification is only made out by showing that there is a reasonable apprehension of bias by reason of prejudgment and this must be 'firmly established': R v Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group (1969) 122 CLR 546 at 553-554; R v C R Watson ( 1976) 136 CLR 248 at 262; Re Lusink; Ex parte Shaw (1980) 55 ALJR 12 at 14. Although it is important that justice must be seen to be done, it is equally important that judicial officers discharge their duty to sit and do not, by acceding too readily to suggestions of appearance of bias, encourage parties to believe that by seeking the disqualification of a judge, they will have their case tried by someone thought to be more likely to decide the case in their favour.

Those are the general principles; but it has also been said that bias may appear 'where a deciding party has, in another capacity, already formed a view of the matter,' per D Foulkes, Administrative Law (6th ed, 1986), p259, or 'committed himself to an opinion on the case in advance of the inquiry,' per H W R Wade, Administrative Law (6th ed, 1988), p 478". 24 Davies and Foster JJ [at 42 and 43] continued: "If a decision has been set aside for error and remitted for rehearing, it will generally seem fairer to the parties that the matter be heard and decided again by a differently constituted tribunal. This is because the member constituting the Tribunal in the original inquiry or hearing will already have expressed a view upon facts which will have to be determined in the rehearing. The aggrieved party may think that a rehearing before the Tribunal as originally constituted could be worthless, for the member's views have been stated. … The trial judge cited a number of authorities on the subject of bias including the remarks of Dixon CJ, Williams, Webb and Fullagar JJ, in R v Australian Stevedoring Industry Board; Ex parte Melbourne Stevedoring Co Pty Ltd (1953) 88 CLR 100 at 116, where their Honours said: 'Bias must be "real." The officer must so have conducted himself that a high probability arises of a bias inconsistent with the fair performance of his duties, with the result that a substantial distrust of the result must exist in the minds of reasonable persons.'

His Honour concluded that as 'the Tribunal's consideration of the matter was extensive, far-reaching and lengthy' and as 'strong views on the applicant's compliance with the requisite criteria' had been expressed, it would better achieve the object of having the matter heard and decided again that the Tribunal should be differently constituted. Such a finding imports no criticism whatever of the member who originally constituted the Tribunal but simply recognises that, when decisions in judicial and administrative proceedings are set aside in toto and the matter remitted to be heard and decided again, justice is in general better seen to be done if the court or the Tribunal is reconstituted for the purposes of the rehearing."

25 The Administrative Decisions (Judicial Review) Act 1975 (NSW) provides that the court reviewing the decision has the power to "make an order referring the matter to which the decision relates to the person who made the decision for further consideration subject to such directions the court thinks fit" (s16(1)(b)). The powers under the Administrative Decisions (Judicial Review) Act 1975 once an order for referral is made, differ from the provisions of s 67(3) of the CTTT Act. 26 This rehearing involves consideration of further evidence by the Tribunal Member who has already made unfavourable findings concerning the plaintiff's credit, and favourable findings of credit of the defendant's witness. In these circumstances, it is my view that a fair-minded person would entertain a reasonable apprehension that the Tribunal Member might not bring an impartial and unprejudiced mind to the rehearing. The ultimate result demonstrates that the Tribunal Member's discretion miscarried. There is an error with respect to a matter of law. The appeal is upheld. The decision of Senior Tribunal Member Durie dated 28 September 2004 is set aside. The matter is referred to the Tribunal to be dealt with according to law. 27 Costs are discretionary. Costs usually follow the event. The first defendant is to pay the plaintiff's costs as agreed or assessed. In Krslovic Homes v Timothy Sparkes & Ors [2004] NSWSC 374 after reviewing the cases on which it is appropriate to award costs, Shaw J discussed the issue of a certificate under the Suitors' Fund Act 1951 (NSW) for proceedings commenced in the Fair Trading Tribunal (the predecessor in title of the CTTT) and decided that there is adequate foundation for regarding the proceedings before this Court in the nature of an appeal for the purposes of a Suitors' Fund Certificate [42] and [49]. It is my view that a certificate of indemnity should be granted to the first defendant, if appropriate.

(2) The decision of Senior Tribunal Member Durie dated 28 September 2004 is set aside.

(3) The matter is referred to the Tribunal to be dealt with according to law.

(4) The first defendant is to pay the plaintiff's costs as agreed or assessed.

(5) A certificate of indemnity should to be granted to the first defendant in accordance with the Suitors' Fund Act , if appropriate. **********

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.

Administrative Decisions (Judicial Review) Act 1975(NSW)

Consumer, Trader and Tenancy Tribunal Act 2001(NSW)

Suitors' Fund Act 1951(NSW)

CITATION : Jonsson v Arkway Pty Ltd & Anor [2005] NSWSC 304

Chapman v Taylor & Ors; Vero Insurance Ltd v Taylor & Ors [2004] NSWCA 456 Jonsson v Arkway Pty Ltd & Anor [2003] NSWSC 815 Kalokerinos & Anor v HIA Insurance P/L & Anor [2004] NSWCA 312 CASES CITED : Krslovic Homes v Timothy Sparkes & Ors [2004] NSWSC 374 Northern NSW FM Pty Limited v Australian Broadcasting Tribunal (1990) 26 FCR 39 Re JRL: Ex parte CJL (1986) 161 CLR 342 Wentworth v Wentworth (NSWSC, unreported 6 February 1998; BC9800282)

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