Kuhnell v Mazda Australia Pty Ltd

Background

1. On 17 March 2021, the Applicant purchased a new Mazda 6 motor vehicle from the Mazda dealership at Lismore NSW. The purchase price was $38,497.00.
2. On 13 December 2021, the Applicant was driving his Mazda 6 motor vehicle along Hastings Valley Drive at Port Macquarie, when the bonnet safety system deployed.
3. The Applicant took his vehicle to the Mazda dealership at Port Macquarie for diagnosis.
4. On 12 January 2022, Jason Halliday, a Mazda Australia Field Technical Specialist, inspected the Applicant's vehicle and formed the opinion that the active bonnet system had been deployed due to impact.
5. At all relevant times, the Applicant's motor vehicle was insured with Insurance Australia Limited trading as Coles Insurance Group, ("Coles Insurance").
6. The Applicant made a claim on his Coles Insurance policy, relating to the incident on 13 December 2021.
7. Coles Insurance denied the Applicant's claim on his policy.
8. On 24 March 2021, the Applicant made an application to the Tribunal seeking orders against Mazda Australia and/or Coles Insurance.

Submissions as to lack of jurisdiction by Coles Insurance

1. Coles Insurance submits that the Tribunal does not have jurisdiction to hear and determine the Applicant's claim against it.
2. Coles Insurance submits that a claim relating to a contract of insurance cannot be brought under the Australian Consumer Law (NSW), as insurance is excluded in relation to the supply of services, as defined in Subdivision B - guarantees relating to the supply of services (s63(b)).
3. Secondly, Coles Insurance submits that the insurance contract is governed by the Insurance Contracts Act 1984 (Cth).
4. The Insurance Contracts Act 1984 (Cth) is a Commonwealth piece of legislation and original jurisdiction is conferred on the High Court and the Federal Court, pursuant to section 39(B)(1A)(c) of the Judiciary Act 1902 (Cth).
5. The conferral of jurisdiction to hear matters arising from the Insurance Contracts Act 1984 (Cth) is upon the "Courts of the States", in accordance with section 39(2) of the Judiciary Act 1903 (Cth) and section 77(ii) of the Constitution.
6. Coles Insurance submits that it is well established that State Tribunals do not have federal jurisdiction.
7. In support of this submission Coles Insurance referred the Tribunal to the following decisions: Qantas Airways Limited v Lustig [2015] FCA 253 at [80] - [82] LNC Industries Ltd v BMW (Australia) Ltd [1983] HCA 31 R v Commonwealth Court of Conciliation and Arbitration; exparte Barret [1945] 70 CLR 141 Mooregate Tobacco Co Ltd v Phillip Morris Ltd [1980] HCA 32 Fencott v Muller [1983] HCA 12 Felton v Mulligan [1971] HCA 39
8. The principle that the Tribunal does not have federal jurisdiction has been specifically applied in China Shipping (Australia) Agency Co Pty Ltd v D V Kelly Pty Ltd [2010] NSWSC 1556 and Attorney General for New South Wales v Gatsby [2018] NSWCA 254.
9. In the Gatsby case, the Court found that the NSW Civil and Administrative Tribunal was not a Court of a State within the meaning of section 39(2) of the Judiciary Act 1903 (Cth) and section 77(ii) of the Constitution.

Decision on jurisdiction:

1. In accordance with the Civil and Administrative Tribunal Act 2013 (NSW) and the Fair Trading Act 1987 (NSW), ("the FTA"), the NSW Civil and Administrative Tribunal, ("the Tribunal"), has jurisdiction to hear and determine an application by a consumer for determination of a consumer claim.
2. Section 79I of the FTA provides that any consumer may apply to the Tribunal for determination of a consumer claim.
3. Section 79E of the FTA defines "consumer claim" as follows: 79E Meaning of "consumer claim" (1) For the purposes of this Part, a consumer claim means a claim by a consumer, for one or more of the following remedies, that arises from a supply of goods or services by a supplier to the consumer (whether or not under a contract) or that arises under a contract that is collateral to a contract for the supply of goods or services: (a) the payment of a specified sum of money, (b) the supply of specified services, (c) relief from payment of a specified sum of money, (d) the delivery, return or replacement of specified goods or goods of a specified description. (2) For the avoidance of doubt, a reference in this Part 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."
4. The Tribunal finds that the Applicant is a consumer.
5. Section 4 of the FTA defines "supplier" as a person who, in the course of a business, supplies goods or services.
6. Mazda Australia did not raise an issue in relation to the jurisdiction of the Tribunal to hear and determine the application.
7. The Tribunal finds that Mazda Australia supplied goods to the Applicant, in the course of Mazda Australia's business.
8. The goods were supplied in NSW.
9. The application against Mazda Australia was made within time and is within the monetary jurisdictional limit of the Tribunal.
10. The Tribunal has jurisdiction to hear and determine the application against Mazda Australia.
11. The Tribunal will now consider whether it has jurisdiction to hear and determine the application against Coles Insurance.
12. Section 79F of the FTA defines "services" as follows: 79F Meaning of "services" (1) For the purposes of this Part, a reference to services is a reference to any of the following: (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, (g) the rights or benefits provided, granted or conferred under 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, (i) any other 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. (2) However, a reference in this Part to services does not include a reference to any of the following: (a) the supply of goods or the performance of work under a contract of employment, (b) rights or benefits provided, granted or conferred under a service contract (within the meaning of the Retirement Villages Act 1999), (c) the provision of assurance cover in respect of a person's life.
13. The Tribunal finds that Coles Insurance entered into a contract with the Applicant to provide him with insurance cover for his motor vehicle.
14. The contract was made in New South Wales.
15. A reference to services in the FTA specifically includes the provision of insurance cover.
16. The Tribunal finds that Coles Insurance entered into a contract with the Applicant to provide services to him in the course of Coles Insurance' business.
17. The application against Coles Insurance was made within time and the amount of the claim is within the monetary jurisdictional limit of the Tribunal.
18. The Tribunal has considered the submission by Coles Insurance that a claim relating to a contract of insurance cannot be brought under the Australian Consumer Law (NSW), as insurance is excluded in relation to the supply of services, as defined in Subdivision B - guarantees relating to the supply of services (s63(b)).
19. The Tribunal finds that a claim relating to a contract of insurance cannot be brought under Subdivision B of Division 1 of Part 3-2 of the Australian Consumer Law (NSW), (guarantees as to supply of services).
20. The Applicant seeks an order against Coles Insurance because Coles Insurance rejected the Applicant's claim on his motor vehicle insurance policy.
21. The application is an action for breach of contract.
22. The Tribunal finds that the application against Coles Insurance is not a claim under Subdivision B of Division 1 of Part 3-2 of the Australian Consumer Law (NSW).
23. More specifically, the Tribunal finds that the application is not a claim under Section 60, Section 61, or Section 62 of the Australian Consumer Law (NSW).
24. The Tribunal accepts the submission of Coles Insurance that the NSW Civil and Administrative Tribunal is not a Court of a State, within the meaning of section 39(2) of the Judiciary Act 1903 (Cth) and section 77(ii) of the Constitution.
25. The Tribunal accepts the submission of Coles Insurance that the Insurance Contracts Act 1984 (Cth) is a Commonwealth Act.
26. The Tribunal accepts the submission of Coles Insurance that Courts of the States have jurisdiction to hear applications made under the Insurance Contracts Act 1984(Cth).
27. The Tribunal accepts the submission of Coles Insurance that the NSW Civil and Administrative Tribunal does not have jurisdiction to hear and determine applications under the Insurance Contracts Act 1984 (Cth).
28. The Insurance Contracts Act 1984 (Cth) is: "An Act to reform and modernise the law relating to certain contracts of insurance, so that a fair balance is struck between the interests of insurers, insureds and other members of the public and so that the provisions included in such contracts, and the practices of insurers in relation to such contracts, operate fairly, and for related purposes." (Long Title).
29. Section 7 of the Insurance Contracts Act 1984 (Cth) provides that: "It is the intention of the Parliament that this Act is not, except in so far as this Act, either expressly or by necessary intendment, otherwise provides, to affect the operation of any other law of the Commonwealth, the operation of law of a State or Territory or the operation of any principle or rule of the common law (including the law merchant) or of equity."
30. The Insurance Contracts Act 1984 (Cth) is legislation that contains specific sections such as the duty of utmost good faith; the insured's duty to take reasonable care not to make a misrepresentation; the insured's duty of disclosure; fraudulent claims; cancellation of insurance policies; subrogation; the provision of information; and enforcement.
31. The Tribunal finds that there is no express or implied provision of the Insurance Contracts Act 1984 (Cth) that affects the operation of the law of contract, or restricts the Tribunal from hearing a consumer claim in relation to an alleged breach of contract.
32. The Tribunal finds that this application is not an application under the Insurance Contracts Act 1984 (Cth).
33. The Tribunal finds that it has jurisdiction to hear and determine the application against Coles Insurance.

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: 29 August 2022