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[2014] NSWCATCD 138
NCAT Consumer and Commercial
2014-05-19
Original judgment source is linked above.
BACKGROUND 1This decision is concerned only with the question of whether or not the Tribunal has jurisdiction to deal with the applicant's claims set out in the Amended Application dated 7 November 2013. 2The Amended Application seeks the following orders: (a)A declaration that the conduct of the Respondent and terms of the guarantee form and the transaction entered into by the Applicant breach the provisions of The Australian Consumer Law (ACL), specifically s 18(1) (misleading conduct), s 21-22 (unconscionable conduct) and s 23-25 (unfair terms) (b)A declaration that the Applicant has no further liability to the Respondent for the payment of any amount. (c)An order that the Respondent repay to the Applicant all sums paid by the Applicant to date, totalling $9,651.90, and interest on that amount from the date of payment. 3The following facts appear to be uncontested: (a)The applicant took his brother-in-law to Liverpool Hospital on 9 June 2012, as the brother-in-law was experiencing chest pains. (b)The brother-in-law was a visitor from overseas and was ineligible for Medicare benefits. (c)The brother-in-law was admitted to the hospital, which is operated by the respondent. (d)On the day of his admission to the hospital, the brother-in-law signed a declaration agreeing to pay accommodation costs and any fees raised in relation to associated clinical services. (e)The same document contained a form of guarantee and indemnity which was signed by the applicant. 4The applicant contends that he was misled by the respondent into believing that the respondent would only provide treatment to his brother-in-law if he signed the form as guarantor. The applicant asserts that he would not have signed the guarantee form if he had been informed that the treatment would have been provided even if the applicant did not sign the form. 5The applicant seeks to invoke the jurisdiction of the Tribunal to provide a remedy for the misleading representations alleged to have been made by the respondent to the applicant which the applicant contends induced him to sign the guarantee form, in breach of s 18(1) of The Australian Consumer Law (ACL). 6The applicant also contends that the respondent's conduct was unconscionable, in breach of s 21 of the ACL, entitling him to a remedy. 7Furthermore, the applicant asserts that the guarantee attracts the protection of the unfair contract provisions of the ACL found in s 23. 8The threshold issue to be determined by the Tribunal to enliven its jurisdiction is whether or not the applicant's claim or claims is or are a "consumer claim" within the definition contained in s 3A of the Consumer Claims Act 1998 (CC Act). RELEVANT LEGISLATION 9Jurisdiction is conferred on the Tribunal to hear and determine any consumer claim by s 7 of the CC Act which provides: 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. (2) Supply or agreement made, or supply intended to be made, in New South Wales The Tribunal has jurisdiction to hear and determine a consumer claim only if: (a) the goods or services to which the claim relates were supplied in New South Wales, or (b) a contract or other agreement to which the claim relates contemplated that the goods or services would be supplied in New South Wales (whether or not they were so supplied), or (c) a contract or other agreement to which the claim relates was made in New South Wales (whether or not the goods or services were supplied in New South Wales). (3) The Tribunal has such jurisdiction whether or not: (a) a contract or other agreement to which the claim relates confers jurisdiction on any other court or tribunal (whether in New South Wales or elsewhere), or (b) the rules of private international law require a law other than the law of New South Wales to be applied to the hearing or determination of the claim. (4) Limitation periods The Tribunal does not have jurisdiction to hear and determine a consumer claim if any of the following apply: (a) the cause of action giving rise to the claim first accrued more than 3 years before the date on which the claim is lodged, (b) the goods or services to which the claim relates were supplied (or, if made in instalments, were last supplied) to the claimant more than 10 years before the date on which the claim is lodged. (4A) Nothing in this section affects any period of limitation under the Limitation Act 1969. (5) Claim relating to solicitor's or barrister's costs A matter arising in relation to the fairness or reasonableness of the costs charged by a barrister or solicitor for an item of business transacted by the barrister or solicitor is not within the jurisdiction of the Tribunal if the costs can be the subject of a costs assessment under Part 3.2 of the Legal Profession Act 2004. 10The meaning of "consumer claim" is set out in s 3A of the CC Act: 3A Meaning of "consumer claim" (1) For the purposes of this Act, a consumer claim is: (a) a claim by a consumer for the payment of a specified sum of money, or (b) a claim by a consumer for the supply of specified services, or (c) a claim by a consumer for relief from payment of a specified sum of money, or (d) a claim by a consumer for the delivery, return or replacement of specified goods or goods of a specified description, or (e) a claim by a consumer for a combination of two or more of the remedies referred to in paragraphs (a)-(d), that arises from a supply of goods or services by a supplier to the consumer, whether under a contract or not, or that arises under a contract that is collateral to a contract for the supply of goods or services. (2) For the avoidance of doubt, a reference in this Act to a consumer claim includes a reference to a claim by a consumer against a supplier (for example, a manufacturer or wholesaler) who is not the direct supplier of goods or services to the consumer if the claim arises from or in connection with the supply of those goods or services by the direct supplier to the consumer. 11 "Consumer" is defined in s 3 of the CC Act as follows: (a) a natural person, or (b) a firm, or (c) a small proprietary company, or (d) an owners corporation constituted under the Strata Schemes Management Act 1996, or (e) a company that owns an interest in land and has a memorandum or articles of association conferring on each owner of shares in the company a right to occupy under a lease or licence a part or parts of a building erected on the land, or (f) an incorporated association, or (g) an unincorporated body whose members are associated for a common purpose, or (h) a company limited by guarantee (not being a company limited both by shares and by guarantee),to whom or to which a supplier has supplied or agreed to supply goods or services, whether under a contract or not, or with whom or which a supplier has entered into a contract that is collateral to a contract for the supply of goods or services. (a) a natural person, or (b) a firm, or (c) a small proprietary company, or (d) an owners corporation constituted under the Strata Schemes Management Act 1996, or (e) a company that owns an interest in land and has a memorandum or articles of association conferring on each owner of shares in the company a right to occupy under a lease or licence a part or parts of a building erected on the land, or (f) an incorporated association, or (g) an unincorporated body whose members are associated for a common purpose, or (h) a company limited by guarantee (not being a company limited both by shares and by guarantee), to whom or to which a supplier has supplied or agreed to supply goods or services, whether under a contract or not, or with whom or which a supplier has entered into a contract that is collateral to a contract for the supply of goods or services. 12Section 28 of the Fair Trading Act 1987 applies the ACL as a law in New South Wales: 28 Application of Australian Consumer Law (1) The Australian Consumer Law text, as in force from time to time: (a) applies as a law of this jurisdiction, and (b) as so applying may be referred to as the Australian Consumer Law (NSW), and (c) as so applying is a part of this Act. (2) This section has effect subject to sections 29, 30 and 31. CONSIDERATION 13The respondent, through its hospital, is unquestionably an institution which, in the course of its business, supplies services. 14To attract the jurisdiction of the Tribunal, it must be established by the applicant that he has a consumer claim, as specified in sub-section 1 of s 7 of the CC Act. 15The definition of consumer claim in s 3A includes claims by a consumer for the payment of a specified sum of money or for relief from payment of a specified sum of money (or a combination of the remedies) that arise from the supply of services by the 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 services. 16The definition of consumer in s 3 of the CC Act includes: ●a natural person ●with whom ●a supplier ●has entered into a contract ●that is collateral ●to a contract for the supply of services.
The Collateral Contract 17It is clear that there was a direct contract between the respondent and the applicant's brother-in-law. This fact is not disputed and is evidenced by the Overseas Residents Patient Declaration dated 9 June 2013 and signed by the applicant's brother-in-law. 18On the same form signed by the applicant's brother-in-law, a Guarantor's Declaration appears in the following form: "In consideration of Sydney South West Area Health Service (hereinafter called SSWAHS) having hereby agreed to supply medical services to Md Atawar Rahman (hereinafter called the Patient), I MD Monwar Hossain (hereinafter called the Guarantor) do hereby guarantee to pay to SSWAHS all moneys due to SSWAHS for medical services provided by SSWAHS to the patient. In the event the patient shall commit any default in payment for any medical services provided by SSWAHS or in any of his/her other obligations to SSWAHS, I will guarantee and indemnify SSWAHS and hold it harmless against all costs, expenditures and other moneys thereby incurred." 19The Guarantor's Declaration is signed by the applicant. 20The following extract is taken from the 3rd edition of Principles of Australian Contract Law by J. Gooley, P. Raden and I. Vickovich (LexisNexis Butterworths Australia 2014) "Collateral contract with a third party. 10.85 A collateral contract may also arise in cases where a promise by a third person induces the formation of a contract between two parties. The situation envisaged here can be described as a tripartite collateral contract. Imagine the following scenario: A makes a promise to B who, in reliance on that promise, enters into a contract with C. The entry by B into the contract with C constitutes the main contract and is also the consideration for the collateral contract constituted between A and B, on the basis of A's promise to B. However, there is one qualification for a collateral contract to arise in this scenario, and that is the contract between B and C must provide a benefit to A. 10.86 Thus, in Andrews v Hopkinson [1957] 1 QB 229; [1956] 3 All ER 422, Hopkinson, a car dealer, made certain assurances to Andrews, the purchaser, in relation to the roadworthiness of a motor vehicle that Andrews subsequently purchased from Berkeley Finance. Andrews was seriously injured because of the dangerous condition of the vehicle. Hopkinson's assurance constituted a contract with Andrews that was collateral to the main contract between Andrews and Berkeley Finance. The benefit to Hopkinson was the sale of the car to Andrews." 21The learned authors draw attention to the fact that for a collateral contract to arise in respect of a third party there must be a benefit, in this case, to the applicant. 22The benefit to the applicant in the instant case was that the respondent would treat the applicant's brother-in-law under the main contract. If such a benefit did not exist the guarantee would fail for a lack of consideration. 23The principles surrounding the formation of a third party collateral contract have been recently considered by the Supreme Court of New South Wales in Manning Motel Pty Limited v DH MB Pty Limited [2013] NSWSC 1582. Judgment was delivered on 1 November 2013. In that case, Lindsay J said: 64 I find as a fact that: (a) as an inducement to the plaintiff to execute the lease and with the intention that the plaintiff would rely upon its promise, the second defendant (by the third defendant) promised the plaintiff that, if the plaintiff executed the lease, the second defendant (as the operator of The Briars) would take $4,000 per month in room sales from the plaintiff, as the operator of the Manning, throughout the duration of the lease; and (b) the plaintiff executed the lease in reliance upon that promise, and would not have executed the lease but for the promise. 65 These findings are sufficient to ground a finding of a contract, between the plaintiff and the second defendant, collateral to the lease between the plaintiff and the first defendant. 24The Tribunal finds that the guarantee provided by the applicant to the respondent induced the formation of the contract between the hospital and the brother-in-law. It was a collateral contract to the main contract between the respondent and the brother-in-law. 25The applicant relies on the decision in Burton v Chad One Pty Limited [2013] NSWDC 301 (also decided on 1 November 2013) to advance the argument that the interpretation of the legislation defining "consumer" and "consumer claim" should be liberal. 26At 33 Her Honour Judge Olsson SC said: 33 Legislation that has a remedial or beneficial purpose is to be given a liberal construction, rather than a literal or technical construction: Norrie v NSW Registrar of Births, Deaths and Marriages [2013] NSWCA 145 at [73]. 27In Norrie, Beazley ACJ stated: 73 The requirement that a statutory provision must be construed having regard to its context and legislative purpose, is reinforced by the canon of construction that remedial and beneficial legislation is to be given a liberal construction, rather than a "literal or technical" one that is "unreasonable or unnatural": IW v City of Perth at 12. See also AB v Western Australia at [24], where the Court stated: "It is generally accepted that there is a rule of construction that beneficial and remedial legislation is to be given a 'fair, large and liberal' interpretation." (citations omitted) 28The CC Act is clearly legislation enacted for the protection of persons engaging in transactions with suppliers. The legislation extends its application to collateral contracts. The Tribunal is bound to give the legislation a liberal construction. 29The respondent has submitted that if the Tribunal finds that the applicant is a consumer, the Tribunal only has jurisdiction to determine the unfair contracts claim because s 30(2) of the Fair Trading Act requires claims under the ACL, apart from those claims referred to in Part 2-3 of the ACL, to be brought in a Court and the Tribunal is specifically excluded from the definition of Court. 30The arguments put forward by the respondent are submissions that are properly made at a substantive hearing of the issues between the parties, following the presentation of each party's evidence at a formal hearing. 31The Tribunal finds that, as a threshold issue, the applicant is a consumer entitled to bring a consumer claim to the Tribunal for determination. 32The Tribunal cannot and does not make any findings about the merits of the substantive claims to be made by the applicant at a formal hearing.
ORDERS 33The Tribunal finds that (a)The applicant is a consumer for the purposes of the proceedings currently before the Tribunal. (b)The applicant's claim is a consumer claim within the meaning of s 3A of the Consumer Claims Act. (c)The Tribunal has jurisdiction to hear and determine the consumer claim. 34These proceedings are adjourned to a date to be fixed by the Registrar for a Directions Hearing for the purpose of making directions for the filing and serving of each party's evidence for a hearing of the substantive issues. C R Xuereb General Member Civil and Administrative Tribunal of New South Wales 23 July 2014 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: 11 September 2014
MD Monwar Hossain
South Western Sydney Local Health District