Kearns & anor v Fair Trading Tribunal of NSW & anor [2001] NSWSC 951 | Case summary

1 HIS HONOUR: The relief sought by the plaintiffs relates to a determination of the Fair Trading Tribunal (constituted by Mr J.F. Hookey, Member) on 28 March 2001. The disputants were the plaintiffs and the second defendant. The Fair Trading Tribunal has filed a submitting appearance in these proceedings. I will refer to Mr Pecar as the defendant. 2 The dispute had its genesis in the desire of the plaintiffs to renovate what was described in an application for an owner/builder permit by Mr Kearns as "existing shearers quarters known as "The Settlers Cottage" (the property). Mr Kearns has deposed that at the time of obtaining a building approval (June 1995) the property was owned by a corporation of which he was a director, Mt Gilead Farms Pty Limited. The application (lodged in October 1997) refers to Mt Gilead Farms Limited ACN 059801446. Mrs Kearns has deposed that she is and has been at all material times the owner of the property. I gather that there was a transfer at some stage. See the affidavit of James Kearns sworn 2 October 2001 par 16. 3 The affidavits filed and read in the proceedings contain a considerable amount of detail as well as claim and counter claim. I will draw on these to sketch some background but must emphasize at the outset that Parliament has expressly curtailed the scope of any remedy available by recourse to a court of record to two matters, the first relating to jurisdiction of the tribunal and the second, to denial of natural justice: see Fair Trading Tribunal Act 1998 s60. 4 The plaintiffs allege that they were denied natural justice. Both Mr and Mrs Kearns were parties before the Tribunal. Mr Kearns is a solicitor whose practice is in Jindabyne. Mr Pecar is a carpenter. He has appeared for himself both at the Tribunal and in this court, although he candidly acknowledged that he had had some informal legal assistance in particular in the preparation of the written submission that he presented at the hearing. 5 I should also mention that the proceedings in this court were commenced out of time but as the basis upon which indulgence is sought is linked with the circumstances surrounding the allegation of denial of natural justice, it will be convenient to deal with the issues relatively compendiously. 6 Mrs Kearns wanted to do some work on the property in accordance with the building approval which was about to expire. It was apparently feared that Council would decline extension after the deadline of June 2000. The desired builder, Mr Wilkinson, could not start before then. Mr Kearns and Mr Pecar were acquainted and it was agreed that he would undertake certain work and that Mr Wilkinson would start when he became available. Although I have no jurisdiction to review the merits of the later dispute I observe that at the tribunal hearing a statutory declaration by Mr Wilkinson deposed that the work performed by the defendant was of "a high quality and quite faithful to the heritage value of the building". (See annexure E to the affidavit of James Kearns sworn 2 October 2001). 7 Also irrelevant to my jurisdiction, but canvassed at some length in the affidavits, is some Local Court litigation between the defendant and a Mr Markwort in respect of which Mr Kearns provided the defendant with some legal services. The defendant's final invoice for $12,960.74 included a credit of $432 "for legal advice". 8 Mrs Kearns as owner of the property deposed that she wished to retain Mr Wilkinson but owing to the delay in his availability "Mr Wilkinson discussed with us Mr Pecar carrying out work to the front part of the property commencing April 2000 so that Mr Wilkinson and his subcontractors could do the work substantially to the rear of the property when Mr Wilkinson became available". The claim to the Tribunal by Mr Pecar was in terms of seeking payment for working as a subcontract carpenter. 9 On 2 November 2000 Mr Kearns became ill at Parramatta where he was engaged as an advocate in a divorce suit which had extended over four days. He returned to Jindabyne on 3 November. He saw a doctor in Cooma on 6 November and was referred to Dr Danta, a Canberra neurologist who saw him on 8 November. A stroke was diagnosed. In the meantime, on 7 November Mrs Kearns "terminated the services of Mr Pecar". 10 On 6 December the defendant delivered invoices for unpaid work. Payment had been made up to the end of August. The defendant on this occasion also asked for an account for legal work. He has deposed that he was told that he would not be paid and therefore on 12 December he lodged his application for a tribunal determination. 11 Both Mr and Mrs Kearns have been at all levels parties to the dispute although Mr Kearns' status is not altogether clear. On neither version of the above named facts was he ever the owner of the property, at most he was a director of the corporation mentioned. Although discussions leading to Mr Pecar's involvement were described from the plaintiff's point of view in plural terms, it was Mrs Kearns who terminated his engagement, presumably with at least tacit assent from Mr Wilkinson. It is arguable that Mr Kearns was simply his wife's agent and/or solicitor. 12 I mention these matters because the whole of the plaintiff's claim for relief is based upon Mr Kearns' asserted incapacity and there is no suggestion that Mrs Kearns was handicapped other than by natural and understandable concern for her husband. 13 In January 2001 Mr Kearns received a notification that the matter was listed before the Tribunal on 23 January 2001. He applied for an adjournment on the basis of his ill health and supplied a certificate from Dr Danta in these terms: "Mr James Kearns, a patient of mine, developed a stroke affecting expression and comprehension of speech, two months ago, and has not fully recovered. Amongst other things he has difficulty formulating complex issues and I think on medical grounds he should be exempted from giving evidence in the above case. I am reviewing him on 3 April 2001 and I would be grateful if he could be exempted from having to give evidence until at least after that date." 14 The adjournment was granted, however on 13 March a notice of relisting was received notifying refixture on 29 March 2001. No reason was given for apparently ignoring the request in the second paragraph of Dr Danta's letter. Another certificate from Dr Danta was obtained and forwarded to the Tribunal. The content of this was: "Mr James Kearns developed a stroke affecting expression and comprehension of speech, four months ago, and has not fully recovered. Amongst other things he has difficulty formulating complex issues and I think on medical grounds he should be exempted from giving evidence in the above case. Mr Kearns was due to be reviewed on 3 April 2001, however, due to my being overseas at that time this appointment has been rescheduled for 24 April 2001. I would be grateful if he could be exempted from giving evidence until after his appointment on 24 April 2001." 15 On 26 March Mr Kearns received a facsimile transmission, (presumably from the tribunal and apparently in response to the further certificate and adjournment application) advising that the matter would proceed as scheduled. 16 There are competing descriptions of the content of exchanges between the presiding member of the Tribunal and the disputants and, in the absence of verbatim transcript or recording, I can scarcely resolve these. 17 However a copy of the notes taken by the tribunal member have been made available together with a typescript and the content was treated by the parties as material available as resource. At the beginning there is a note which appears to read: "Kearns. I am in a position to proceed (illegible) Mrs K. owner …………" 18 The apparent statement by Mr Kearns that he was ready to proceed is in some ways confirmed by his detailed description of submissions made to the tribunal and recounted in pars 16 and 17 of the affidavit earlier identified. However, I cannot tell whether the illegible portion may not be a reference to the refused adjournment. 19 In the course of the tribunal hearing reference was made to decided and reported cases. It was at this juncture that Mr and Mrs Kearns claim that a further application for adjournment was agitated in order to enable him to review cases, particularly some referred to by the presiding member. 20 This application is confirmed by Mr Pecar who deposed "I remember Mr Kearns asking for an adjournment to consider something Member Hookey had said and being refused an adjournment": see par 12 of his affidavit sworn 16 October 2001. 21 At the conclusion of the hearing the Tribunal ordered the plaintiffs to pay the amount claimed. 22 The plaintiffs thereupon made application pursuant to s63 of the relevant Act for a rehearing. One of the grounds advanced was an allegation of denial of procedural fairness which can be regarded as synonymous with denial of natural justice. The application was dealt with by a Dr Smith who, on 8 June 2001 dismissed the application. He published reasons which included: "Mr Kearns complains that in effect he was unable to prosecute his defence because of debilitating illness. It is clear to me from the notes made by the Member hearing the case that he was well aware of the nature and extent of the disability claimed by Mr Kearns. It is equally clear that he formed a view based on personal observation and perhaps other anecdotal evidence that Mr Kearns was sufficiently fit and well to run his case." 23 Dr Smith's observations are not of course of any effect in the current proceedings but one is driven to consider from what source a quasi-judicial officer could appropriately become aware of the nature and extent of the disability claimed (other than from the short notes from Dr Danta). 24 One particular matter was raised concerning an alleged reference to a letter on file from solicitors (who advised the defendant from time to time but did not appear for him) concerning Mr Kearns' "supposed" ability to manage his legal practice after his stroke but he was not shown the letter. It is obvious that the matter must have been raised at the Tribunal as Mr Pecar stated from the Bar table that it was in fact available but so far as I can gauge the situation there was some undisclosed material before the presiding member to which what weight he gave, if any, cannot be deduced. 25 There is ample authority that procedural fairness is denied if a decision maker fails to adjourn proceedings where such a failure has the effect of depriving a person of adequate opportunity to prepare or present a case: Sullivan v Department of Transport 1978 20 ALR 323; Opitz v Repatriation Commission 1991 29 FCR 50; Humphrey v Wills 1989 VR 439. 26 The question is, has that happened here? 27 Mr Kearns had obtained the first adjournment for nearly two months. Although at the outset he may have expressed a readiness to proceed there is material to suggest that his conduct ought have given rise to enquiry. I have read the lengthy detail in the plaintiffs' affidavits referring to Mr Kearns' difficulty with restraining himself from abusive language and what Mrs Kearns described the "stunned mullet" effect. It could hardly be expected that the presiding tribunal member would have knowledge of all the detail of these subjective matters but there is sufficient material to suggest that a Tribunal would be put upon enquiry by what is described to have happened. 28 The thrust of the plaintiffs' case is that they wished to agitate some legal defence to the defendant's claim. The determination of the Tribunal on questions of law (and fact) is final and this court is invited to find that Mr Kearns was so handicapped in presenting that defence that natural justice has been denied. (Regulation precludes an appeal to this court on a question of law where the amount in dispute is less than $25,000). 29 The precise formulation of the matter of law sought to be agitated is not immediately apparent but given the restriction just mentioned it was of critical significance that litigants before the Tribunal be given adequate opportunity to ventilate their submissions. Whilst I have adverted to the focus of Dr Danta's reports it is clear that he was advancing his opinion that his patient was handicapped in dealing with complex issues and what he sought to convey ought to have at least provoked enquiry rather than being set aside and reliance entirely placed, as Dr Smith commented, upon personal observation and "perhaps other anecdotal evidence". I am unable to identify to what the lastmentioned is a reference. 30 Although as my foregoing remarks should indicate I regard the matter as far from having been presented with clarity, I have concluded that, in the overall circumstances, the plaintiffs have established that they were denied the opportunity to adequately present their case and the failure to adjourn, even though the application viva voce to the tribunal was belated, denied them procedural fairness. 31 The allegation of bias is dependent upon a conclusion being drawn from events at the hearing which are the subject of contradiction between the plaintiffs on one hand and Mr Pecar on the other. As I have said I cannot resolve that dispute. 32 I am conscious that, bearing in mind particularly the content of Mr Wilkinson's statutory declaration, Mr Pecar might find delay frustrating but Parliament has decreed that these disputes must be finalized within a very limited framework of adjudication, and it is important in the absence of realistic prospect for review that all parties have an uninhibited and adequate presentation of their cases in the first (or likely only) instance. 33 There is a threshold question as to whether time should be extended. Mr Kearns promptly sought counsel's advice upon being informed of Dr Smith's refusal of the request for rehearing. Shortly thereafter (on 15 July 2001) Mr Kearns was involved in an accident on his property. It became necessary in due course to consult new counsel. The matter proceeded promptly thereafter. The essential question is whether strict application of the rules may occasion injustice: Gallo v Dawson 1990 93 ALR 479. The defendant's submission that Mr Kearns was dilatory in that he conceded that "he did not turn attention to this matter" is not sustained. That remark was made in the context of his recovery (or lack of it) from the accident on 15 July. Accordingly:

Kearns & anor v Fair Trading Tribunal of NSW & anor

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Judgment (8 paragraphs)

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