Milstern Retirement v Nance Carton & Ors

JURISDICTION : Common Law Division - Administrative Law List

DECISION : (1) The appeal is dismissed; (2) The application for relief under s 65(3) is refused; (3) The order of the Tribunal Member H E Moore dated 9 November 2005 is affirmed; (4) The amended summons filed 9 May 2006 is dismissed; (5) The plaintiff is to pay the third defendant's costs as agreed or assessed.

CATCHWORDS : Retirement Village - Kitchen expenses - not reasonable or necessary

Consumer, Trader & Tenancy Tribunal Act 2001 (NSW) - ss 3, 28, 35, 65 & 67 Fair Trading Act 1987 (NSW) - s 86 LEGISLATION CITED : Health Insurance Act 1973 (Cth) - ss 79(1B)(a), 82(b) & 104 Migration Act 1958 (Cth) - s 65 Retirement Villages Act 1999 (NSW) - s 115 Supreme Court Act 1970 (NSW) - s 69

Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 Chapman v Taylor & Ors; Vero Insurance Ltd v Taylor & Ors [2004] NSWCA 456 City of Burnside v Attorney-General (SA) (1994) 63 SASR 65 Collector of Customs, (Tasmania) v Flinders Island Community Association (1985) 7 FCR 205 Holloway v Chairperson of the Residential Tribunal (2001) 51 NSWLR 716 Italiano v Carbone & Ors [2005] NSWCA 177 Kalokerinos & Anor v HIA Insurance Services P/L & Anor [2004] NSWCA 312 Kioa v West (1985) 159 CLR 550 Livesey v New South Wales Bar Association (1983) 151 CLR 288 McGale v Glad (1981) 59 FLR 1 McDonald v Director-General of Social Security (1984) 1 FCR 354 CASES CITED : Mah v Consumer Trader & Tenancy Tribunal & Anor [2005] NSWSC 476 Minister for Health v Thomson (1985) 8 FCR 213 Minister for Immigration & Multicultural Affairs v Eshetu (1999) 197 CLR 611 Minister for Immigration & Multicultural Affairs v Lay Lat [2006] FCAFC 61 Muin v Refugee Review Tribunal (2002) 190 ALR 601 NADH of 2001 v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 328 Regina v MacKellar; Ex-parte Ratu (1977) 137 CLR 461 Re Minister for Immigration & Multicultural Affairs; ex parte Lam (2003) 214 CLR 1 Re Minister for Immigration and Multicultural Affairs; Ex-parte Miah (2001) 206 CLR 57 Re Refugee Review Tribunal; Ex-parte H (2001) 75 ALJR 982 Rowlands v Consumer, Trader & Tenancy Tribunal [2003] NSWSC 730 Ruiz v Canberra Rex Hotel Pty Ltd (1974) 5 ACTR 1 Waij v The Minister for immigration & Multicultural & Indigenous Affairs (2004) 80 ALD 568

Milstern Retirement Services Pty Ltd - Plaintiff PARTIES : Nance Carton - First Defendant Consumer Trader and Tenancy Tribunal - Second Defendant Minister for Fair Trading - Third Defendant

COUNSEL : Mr A J McInerney - Plaintiff Ms R M Henderson - Third Defendant

Cohen & Krass - Plaintiff SOLICITORS : Submitting Appearance - Second Defendant Office of Fair Trading - Third Defendant

LOWER COURT JURISDICTION : Consumer Trader and Tenancy Tribunal of NSW

LOWER COURT JUDICIAL OFFICER : Tribunal Member H E Moore

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ADMINISTRATIVE LAW LIST

30063/2005 - MILSTERN RETIREMENT SERVICES PTY LTD v NANCE CARTON ON BEHALF OF THE RESIDENTS COMMITTEE OF THE LINDFIELD MANOR RETIREMENT VILLAGE & 2 ORS

JUDGMENT (Retirement village - Kitchen expenses: not reasonable or necessary) 1 HER HONOUR: By amended summons filed 9 May 2006 the plaintiff seeks to appeal pursuant to s 67 of the Consumer Trader and Tenancy Tribunal Act 2001 (NSW) (the CTTT Act), from the decisions and orders made by the Consumer Trader and Tenancy Tribunal (the Tribunal), and seeks an order firstly, setting aside the decisions and orders made by the Tribunal on (a) 3 May 2005, (b) 5 July 2005, (c) 6 July 2005, and (d) 9 November 2005; secondly, in the alterative an order in the nature of certiorari pursuant to s 65 of the CTTT Act, or s 69 of the Supreme Court Act 1970 (NSW), quashing the decisions and orders made by the Tribunal on (a) 3 May 2005, (b) 5 July 2005, (c) 6 July 2005, and (d) 9 November 2005; thirdly, in the alternative, an order in the nature of mandamus pursuant to s 65 of the CTTT Act, or s 69 of the Supreme Court Act 1970 (NSW), directing the Tribunal to determine the plaintiff's application to the Tribunal in accordance with law; fourthly, a declaration with respect to the decisions and orders made by the Tribunal on 3 May 2005 and 9 November 2005 that (a) the Tribunal made a jurisdictional error; and/or (b) the Tribunal denied the plaintiff procedural fairness. 2 On 3 May 2005 the Tribunal made a decision. On 5 July 2005 it refused the plaintiff's application for rehearing. On 6 July 2005 the Tribunal published its reasons for the refusal to grant the rehearing. On 9 November 2005 the Tribunal published its reasons for its decision of 3 May 2005. 3 The plaintiff is Milstern Retirement Services Pty Ltd and is the operator of a retirement village known as the Lindfield Manor Retirement Village (Milstern). The first defendant is Nance Carton on behalf of the Residents Committee, who took no active role in these proceedings. The second defendant is the Tribunal, who has filed a submitting appearance. The third defendant is the Minister for Fair Trading. A large number of the 29 residents of the Lindfield Manor were present in Court during the hearing of this appeal.

Sections 65 and 67 of the CTTT Act 4 Milstern relied upon ss 65 and 67 of the CTTT Act. Section 65(3) provides that a court is not prevented from granting relief or a remedy in the form of a judgment or order in the nature of prohibition, mandamus, certiorari or other relief, or a declaratory judgment or order, or an injunction, in relation to a matter in respect of which the CTTT has made an order if the ground on which the relief or remedy is sought is that (a) the CTTT had no jurisdiction to make the order, or (b) in relation to the hearing or determination of the matter, a party had been denied procedural fairness. 5 Section 67 allows for an appeal to be made to this court on a question with respect to a matter of law. A reference to a matter of law includes a reference to a matter relating to the jurisdiction of the Tribunal. The onus lies with the plaintiff to demonstrate that there has been an error with respect to a matter of law. 6 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". 7 See also Kalokerinos & Anor v HIA Insurance Services P/L & Anor [2004] NSWCA 312 at paragraphs [39], [40], [41], [47] and [59]. 8 Section 67(3) of the CTTT Act provides that, after deciding the question, the subject of an appeal, the court may affirm the decision of the Tribunal, or it may make an order in relation to the proceedings in which the question arose as, in its opinion, should have been made by the Tribunal, or may remit its decision on the question to the Tribunal and order a rehearing of the proceedings by the Tribunal.

Grounds of appeal 9 There are four main grounds of appeal which relate to the sum allowed for kitchen wages. They are firstly, the Tribunal identified the wrong issue, asked itself the wrong question, or applied the wrong test with respect to kitchen (wages) expenditure (Ex PB 22) by failing to give effect to s 115(4) of the Retirement Villages Act 1999 (NSW) (RVA) in that the Tribunal held that the plaintiff was liable for kitchen (wages) expenditure of $50,544 without first asking itself the correct question of whether such expenditure "was not reasonable or necessary"; secondly, that there was no evidence to support the Tribunal's finding that $50,544 of kitchen (wages) expenditure incurred by the plaintiff was not reasonable or necessary; thirdly, that the plaintiff was denied procedural fairness with respect to the evidence (the existence of which the plaintiff denies) upon which the Tribunal relied to make the Tribunal's finding that $50,544 of kitchen (wages) expenditure incurred by the plaintiff was not reasonable or necessary; and fourthly, the Tribunal's decisions and orders were vitiated for apprehended bias with respect to the Tribunal's implicit finding that $50,544 of kitchen (wages) expenditure incurred by the plaintiff was not reasonable or necessary. 10 On 14 December 2004 Milstern filed an application in the Tribunal for various orders, including an order that the Tribunal determine the expenditure required for Lindfield Manor for the financial year ended 30 June 2004 (Ex PB 3). At issue in this appeal is the expenditure for "kitchen costs" comprising of food and wages. An amount of $88,882 was claimed for food and this amount was allowed in full. Milstern claimed $150,544 for kitchen wages. The Tribunal Member allowed the sum of $100,000, being $50,544 less than the amount claimed. It is this sum of $50,544 that forms the basis of this appeal.

(1) Whether the wrong test was applied 11 The issue before the Tribunal involved the amount of kitchen wages claimed by Milstern. The applicable law is s 115(4) of the RVA. Milstern, the operator, claimed $150,544 expenditure for kitchen wages. This matter was heard on 19 January 2005, 13 April 1005 and 3 May 2005. I shall return to earlier hearings under the heading "Denial of natural justice". 12 Section 115(4) reads: "In determining an application made by the operator under this section, the Tribunal may review any expenditure made under subsection (3) and may order that the operator is liable for so much of that expenditure as it considers was not reasonable or necessary." 13 That is, the Tribunal Member stated the correct test. 14 At the hearing on 3 May 2005, the Tribunal Member stated: "So I start on that basis, however, I have to say there were a number of items which in the course of considering the evidence given by the parties I've determined is not reasonable and should not be allowed." (Ex EAD1 p 2) 15 At the hearing, the Tribunal Member referred to the determination of what expenditure should be allowed as being that which is "fair and reasonable" and, later, the Tribunal Member referred to expenditure as "being not reasonable and should not be allowed". 16 Although the Tribunal member gave his reasons on 3 May 2005, the written reasons were not published until 9 November 2005. In the written reasons the Tribunal Member stated "Section 115(4) of the Act requires the Tribunal to consider whether expenditure incurred in accordance with the provisions of subsection (3) is reasonable or necessary in the operating of the village." (Ex PB22 p 393). This statement is not entirely correct. 17 In relation to the kitchen wages, the Tribunal Member, after noting that the residents were receiving two hot meals per day and that they had expressed a wish that such service continue to be provided, stated (at Ex PB22 p 396): "The operator employs a full-time cook to prepare meals seven days a week. The manager does assist in preparation of food on weekends. The residents said that in fact the manager prepares meals on weekends. In addition, the operator says that it is necessary to engage a dinning (sic) room assistant and kitchen hand. The Tribunal is not satisfied that it is necessary to service a dining room for a maximum of twenty nine people with the compliment of staff engaged by the operator in the year in question. There is a necessity for a full-time cook given that residents were not prepared to countenance precooked meals in the particular year. The extent of the manager's involvement in cooking meals on weekends is unclear and no deduction is allowed for what might otherwise be a reduction of the cost reasonably incurred. It would appear to the Tribunal that it would be sufficient for the kitchen to be operated by a full-time cook and a dinning (sic) room assistant providing services of waiter and kitchen hand. On the material available the Tribunal finds that an amount of $100,000.00 for this line item is an amount to be allowed as reasonably incurred in the year in question." 18 Milstern submitted that before the Tribunal could order that Milstern, as the operator of the retirement village, was liable to bear $50,544 of the costs of expenditure incurred in regard to kitchen wages, the Tribunal had to reach an affirmative state of satisfaction that such expenditure was "not reasonable or necessary". Milstern referred to Minister for Immigration & Multicultural Affairs v Lay Lat [2006] FCAFC 61 where the Full Court made observations about s 65 of the Migration Act 1958 (Cth). The Full Court stated: "[72] In VSAF, Black CJ, Sundberg and Bennett JJ pointed out at [16]-[17] that s 65 of the Act, and the decision of the High Court in Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 274-275, make it clear that the section requires the decision-maker to refuse to issue a visa in the absence of a positive finding of satisfaction.

[73] Their Honours went on to say that there are many cases which show that findings of fact are not necessarily required to support a state of non-satisfaction. For example, in SJSB v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 225 at [15] a Full Court said that s.65 of the Act requires a refusal if the decision-maker is not affirmatively satisfied that the criteria for the visa in question have been satisfied." 19 Section 65 of the Migration Act reads: "Decision to grant or refuse to grant visa

(1) After considering a valid application for a visa , the Minister: (a) if satisfied that: (i) the health criteria for it (if any) have been satisfied; and (ii) the other criteria for it prescribed by this Act or the regulations have been satisfied; and (iii) the grant of the visa is not prevented by section 40 (circumstances when granted), 500A (refusal or cancellation of temporary safe haven visas), 501 (special power to refuse or cancel) or any other provision of this Act or of any other law of the Commonwealth; and (iv) any amount of visa application charge payable in relation to the application has been paid;

(b) if not so satisfied, is to refuse to grant the visa ." 20 Milstern further submitted that the Tribunal Member, by adopting the approach he did reverse the onus of proof. 21 Section 65 of the Migration Act requires the Minister to grant a visa if she is satisfied that the criteria in s 65(1)(a)(i)-(iv) has been satisfied. If the Minister is not satisfied as to the criteria outlined in s 65 (1)(a)(i)-(iv) she is to refuse to grant the visa. On this topic, the Minister for Fair Trading referred to McDonald v Director General of Social Security (1984) 1 FCR 345 and Minister for Health v Thomson (1985) 8 FCR 213. In McDonald, the Administrative Appeals Tribunal considered that the applicant's pension should be cancelled unless she were found to be permanently incapacitated for work, whereas the requirement of the Act was that the pension should be cancelled if she were found not to be permanently incapacitated for work. Jenkinson J at 366 stated: "…it is unreal to suggest that the Director-General, or his delegate, has an onus of proof, whether evidentiary or not, to be satisfied before varying a pension entitlement. The ultimate question is whether the person is qualified to receive the pension and, if so, at what rate…" 22 In Thomson, the reference given by the Minister to the Medical Services Committee of Inquiry, to inquire into and report on whether certain professional services rendered by the respondent were "reasonably necessary for the adequate medical care" of the patients concerned, was a valid reference under s 82(b) of the Health Insurance Act 1973 (Cth). This was so, notwithstanding that the combined operation of s 79(1B)(a) and s 104 suggested that the Committee's statutory function was to form an opinion as to whether the particular services were "not reasonably necessary for the adequate medical care" of the patients concerned. Beaumont J said: "Generally speaking, concepts of onus of proof used in adversary proceedings are inapplicable in administrative proceedings in the social security area. … However, where, as here, breach of discipline, or something analogous, is alleged, the onus of proving such a breach lies upon the accuser…Even so, it does not follow that the terms of the reference were misleading, because the reference is fairly capable of being construed as an (adequate) to paraphrase the statutory definition of "excessive services" in s 79(1B)(a)." 23 It is debatable whether the concept of onus of proof is applicable here. Milstern's position was that none of the expenses were not reasonable or necessary. The residents disputed this contention insofar as they said that the wage figures seemed high (but not when they were compared with previous years) and they contended that the village was not being efficiently run. Even if the concept of onus of proof did apply, it was not reversed in these proceedings. 24 It is my view that the Tribunal Member addressed the ultimate question which was to ascertain those expenses claimed as kitchen wages that were not reasonable or necessary.

(2) Denial of natural justice or procedural fairness 25 Milstern was represented at the Tribunal by Mr Paul Barnes, accountant and Ms M Phillips, the chief executive officer. The first defendant, as chairperson of the residents' committee, was represented by Mr L Bovaird with Mr C Terpstra. On 19 January 2005 the parties and the Tribunal Member were discussing the line of expenditure document. In relation to kitchen expenses the Tribunal Member had this to say (Ex EAD1 pp 121-122): "The kitchen is a potential difficulty because what you will have to substantiate in these proceedings is that those costs are justified and who's employed, what hours are they employed, what meals do you provide? Because it's not uncommon in retirement villages to provide two cold meals and one hot, maybe the evening meal is a hot meal, usually breakfast and lunch are not but that may not be the case here. If you are providing meals internally you will have to substantiate that that represents a reasonable way of providing meals which I assume are provided under the village contract because there are instances in which this is a service which is effectively and efficiently provided by using outside people to provide the meals. So that depends on an analysis of the contract and what you have to provide under it and we have to go through those because that's a very large item and you're going to have to really put some attention into establishing that those charges are warranted and it could not be done more cheaply by contracting it out, if you're using that." 26 Just after that Mr Barnes stated (Ex EAD1 p 122): "To supply this information we require copy invoices, etcetera. I'd have to ask for an adjournment for that because I'll have to get copies of all the invoices." 27 It is my view that the Tribunal Member informed Mr Barnes that he would have to substantiate the costs of kitchen wages, who was employed, what hours they were employed and what meals were provided. It is also clear that Mr Barnes knew that he could apply for an adjournment because he did so when he decided he was not ready to proceed. The adjournment application was granted. 28 On 24 January 2005 the Tribunal issued a notice of order to the parties (Ex PB 6), which set out the order and the procedural directions that it had made on 19 January 2005. The plaintiff forwarded documents to the Tribunal in "…relation to the direction issued 24 January 2005…" under cover of a letter dated 2 February 2005 (Ex PB 10). The documents included "Details of Expenses 2004 - For Lindfield Manor Retirement Village (Court)". The details set out in that document included the following: "Question 3

… (c) Kitchen (ii) …wages paid to employees vis (sic) National Payroll Systems a payroll Bureau. 19 employees over 12 month period, some work short period total hours 6339.25 + A/l 236.25 + Sick 93 + Leave load 130.5 + o/t & w/end 5758 $150,552.88. …" 29 At about 5.45pm on 12 April 2004 Mr Barnes received an 18 page fax from Leon Bovaird. Mr Barnes was cross examined on this issue in these proceedings before this Court. Mr Barnes did not receive the annexures to the fax. A further copy of the document (which included the annexures) was handed to Mr Barnes at the beginning of the hearing on 13 April 2004. The Tribunal Member offered Mr Barnes a little time to go through the document, as he had not had time to read it thoroughly. The Tribunal Member said that it would not be fair for Mr Barnes to have to deal with something that he had had no previous notice of. 30 The position adopted by the residents in relation to the kitchen staff was that they did not have the expertise to go through and say whether it was a fair and reasonable amount. The wage figures seemed high but they conceded that they did not seem unreasonable when compared with previous years. The residents' contention was that it was not being efficiently run (Ex EAD1 p 62). 31 Just before the luncheon adjournment, the Tribunal Member stated that he needed to know who was in the kitchen, their hours and the people who did the backup (Ex EAD1 p 62). This is largely the information that the Tribunal Member identified which would be required at the previous hearing on 19 January 2005. Mr Barnes was given an opportunity over the luncheon adjournment to elicit this information by phoning the manager at Lindfield Manor. After the luncheon adjournment Mr Barnes provided the details of the staff, their shifts and duties (Ex EAD1 p 65) 32 The content of the Tribunal's obligation to afford procedural fairness at the hearing towards the plaintiff depends on the particular circumstances of the case - see Muin v Refugee Review Tribunal (2002) 190 ALR 601 [123] and [236]; Re Minister for Immigration and Multicultural Affairs; Ex-parte Miah (2001) 206 CLR 57 at [129], [143]; Kioa v West (1985) 159 CLR 550 at 611; Regina v MacKellar; E-parte Ratu (1977) 137 CLR 461 at 465 - 6. 33 In Re Minister for Immigration & Multicultural Affairs; ex parte Lam (2003) 214 CLR 1 the High Court discussed the manner in which procedural fairness cases are approached by the courts (and I would include Tribunals). Gleeson CJ said (at 14, [37]): "…Fairness is not an abstract concept. It is essentially practical. Whether one talks in terms of procedural fairness or natural justice, the concern of the law is to avoid practical injustice." 34 In considering what is procedural fairness for the purposes of the Tribunal it is appropriate to consider the objects of the CTTT Act in s 3: "The objects of this Act are as follows:

(a) to establish a Consumer, Trader and Tenancy Tribunal to determine disputes in relation to matters over which it has jurisdiction,

(b) to ensure that the Tribunal is accessible, its proceedings are efficient and effective and its decisions are fair,

(c) to enable proceedings to be determined in an informal, expeditious and inexpensive manner,

(d) to ensure the quality and consistency of the Tribunal's decision-making." 35 In the Tribunal the Tribunal Member must act in accordance with the provisions of ss 28 and 35 of the Act. They provide: 36 Section 28 reads: "Procedure of Tribunal generally

(1) The Tribunal may, subject to this Act, determine its own procedure.

(2) The Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of procedural fairness.

(3) The Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms.

(4) The Tribunal is to take such measures as are reasonably practicable to ensure that the parties in any proceedings understand: (a) the nature of the assertions made in the proceedings and the legal implications of those assertions, and

(b) the procedure of the Tribunal and any decision or ruling made by the Tribunal that relates to the proceedings. (5) The Tribunal: (a) is to act as expeditiously as is practicable, and

(b) is to ensure, as far as practicable, that all relevant material is disclosed to the Tribunal so as to enable it to determine all of the relevant facts in issue in any proceedings, and

(c) may require evidence or argument to be presented in writing and decide on the matters on which it will hear oral evidence or argument, and

(d) in the case of a hearing - may require the presentation of the respective cases of the parties in proceedings to be limited to the periods of time that it determines are reasonably necessary for the fair and adequate presentation of the cases. …" 37 Section 35 reads: "Opportunity for parties to present case

The Tribunal must ensure that each party in any proceedings is given a reasonable opportunity: (a) to call or give evidence and otherwise present the party's case (whether at a hearing or otherwise), and

(b) to make submissions in relation to the issues in the proceedings." 38 The application of s 28(4) is also in issue. Section 28(4) is referred to under the next heading, namely whether there was evidence to support the Tribunal finding. 39 Section 35 provides that the Tribunal "must ensure" that each party is given "a reasonable opportunity" to present its case. There are provisions which allow the Tribunal a significant degree of flexibility in adapting its procedures to the exigencies of the case in determining the manner in which the proceedings will be conducted. Nevertheless, those provisions should not be construed so as to derogate from other provisions cast in obligatory language which constitute core elements of procedural fairness - see Italiano v Carbone & Ors [2005] NSWCA 177 at [105] and [106]. 40 Mr Barnes deposed ([48] aff, 27 April 2006) that: "Having regard to the procedural history, I do not believe that I was given a proper or adequate opportunity to respond to the issues raised … Apart from two non-contentious directions hearings (on 18 March and 5 April 2005) my appearance before the CTTT on 13 April 2005 was my first appearance at a hearing in any tribunal. I have no legal training. I had no idea of what procedures were applicable, allowable or available to me. I did not know that it was possible to adjourn proceedings to give me time to consider material provided too late for proper consideration. No explanation was given to me on 13 April 2005 that it might be possible to adjourn the proceedings to give me time to consider the new material. No offer of an adjournment was made. On 13 April 2005 in the CTTT I informed the tribunal of my inexperience. … In fact I formed the view that the hearing had to proceed and that I was obliged to do the best that I could in the circumstances. I inferred from Mr Moore's comments … that the hearing had to proceed that day no matter." 41 This passage should be read in the light of Mr Barnes having been told on 19 January 2005 by the Tribunal Member what evidence he needed to produce in relation to kitchen wages at the next hearing. At the hearing on 13 April 2005 Mr Barnes did make some attempt to give details of kitchen staff but he did not do so in a meaningful way. He was then given a further opportunity during the luncheon recess to marshall further evidence. Producing a list figures with little explanation does not suffice. Also at the prior hearing (19 January 2005) Mr Barnes became aware that he needed an adjournment to obtain the information required. He requested an adjournment which was granted. 42 Mr Barnes received a fax the night before the hearing (13 April 2005) from the residents' representative, but it was missing the annexures. The residents' fax did not cover the issue of kitchen wages in any detail. Mr Barnes' assertion was that he did not know that it was possible to adjourn the proceedings is unlikely because he had sought and been granted, an adjournment on a previous occasion, namely 19 January 2005. It is my view that, in these circumstances, Milstern's representative was given a reasonable opportunity to present its case and make submissions in relation to the issues (including kitchen wages). There was no denial of natural justice. Nor was there any procedural unfairness. 43 It is also my view that Milstern was afforded procedural fairness throughout the hearing. It is not the role of a Tribunal member to ensure that each party's case is prepared and presented at its highest.

(3) Whether there was evidence to support the Tribunal's finding 44 Milstern submitted that the only basis which could have permitted the Tribunal member to form a conclusion that the expenditure with respect to kitchen wages was "not reasonable or necessary", is found in the statement made by the Tribunal Member during the course of giving his oral reasons for determination. The Tribunal Member stated (Ex EAD1 p 6): "Kitchen. Now, I have to say at the outset that I would have thought at the outset that the expenses both on food and wages were very high for a village of this size, in my view, drawing on experience of considering budgets in cases of much bigger villages than this one that this does seem a very large amount". 45 During the hearing, the Tribunal and Mr Bovaird questioned Mr Barnes about the wages paid to kitchen staff (Ex EAD1 pp 60-68). The Tribunal Member said (Ex EAD1 p 78):

"I have difficulties with the kitchen and food. I think this is an extraordinarily large amount of money, even to provide the meals for a first class village as required under the residents' contract. I mean I have seen villages with four times the number of residents spend far less in providing meals to those people than is spent for 29. I presume there were 29 in 2004, is that the same number then as now? Certainly they provided it for far less than the cost of wages incurred here, so there is a difficulty Mr Barnes, I have to say, with the food and wages, although I note that the residents demand a high level of service there." 46 After further discussion the Tribunal said (Ex EAD1 p 98):

"So I just wanted to outline those to you so you have some idea of the matters which I feel deserve really close scrutiny in dealing with the 2004 budget." 47 On 3 May 2005 the hearing of the application resumed. The Tribunal Member said (Ex EAD1 p 2):

"Now, in determining whether expenditure is reasonable obviously the Tribunal is going to have considerable regard to the actual expenditure incurred because in many instances that is the best indication of what was the reasonable expense in operating the village for that year.

So I start on that basis, however, I have to say there were a number of items which in the course of considering the evidence given by the parties I've determined is not reasonable and should not be allowed. I'll just run through them …." And at (Ex EAD1 P 6-7):

"Kitchen. Now I have to say at the outset that I would have thought at the outset that the expenses both on food and wages were very high for a village of this size, in my view, drawing on experience of considering budgets in cases of much bigger villages than this one that this does seem a very large amount." …

"… it seems to me that I should in those circumstances, although I have that concern as to the overall amounts, that I should allow the food costs actually incurred of $88,882. When I turn to the wages though I think the evidence is sufficient to raise a question over that amount." …

"The evidence on the kitchen, I have to say, was a bit scant. But doing the best I can and allowing for a full time cook in the dining room, assisted by a kitchen hand serving both meals and cleaning up. It seems to me that $100,000 is not an unreasonable amount to cover those wages based on the experience in this Tribunal in regard to those sorts of arrangements." …

"… even the figure I've reduced may be high but in the absence of any clear evidence I do not think I should go further in reduction than what seems to me to be a reasonable amount for salaries." 48 Milstern submitted that the Tribunal did not afford the applicant the opportunity to deal with adverse information that was credible, relevant and significant to the decision to be made, that is, information upon which the Tribunal relied (which according to Milstern must be inferred) to find that $50,544 of expenditure with respect to the kitchen wages was incurred on account of a waiter and kitchen hand. The plaintiff submitted that s 28 did not empower the Tribunal Member to rely on specialised knowledge and if it was permitted to do so, it should have disclosed its action and the sources of its information. This argument centred around the operation of s 28 of the Act which has been reproduced earlier in this judgment. 49 The plaintiff referred to Collector of Customs, Tasmania v Flinders Island Community Association (1985) 7 FCR 205 where the Full Court said at 210: "There was no evidence before the Tribunal about any of these matters. The Tribunal is, of course, entitled to inform itself on any matter in such manner as it thinks appropriate; it is not bound by the rules of evidence: see s 33 of the Administrative Appeals Tribunal Act 1975 (Cth). However, it has long been recognized as the proper practice that a tribunal of fact which takes advantage of such an entitlement should disclose its action and the sources of its information:

see Ruiz v Canberra Rex Hotel Pty Ltd (1974) 5 ACTR 1 at 7-8, McGalee v Glad (1981) 59 FLR 1 at 12. The Tribunal has not, in the present case, suggested that it did inform itself otherwise than by the evidence and, therefore, we approach the matter upon the basis that it did not." 50 What was at issue in Flinders Island was the Tribunal's understanding of traditional Aboriginal concepts of community ownership and interest. The passages referred to were obiter dicta. It is necessary to examine the cases cited in Flinders Island which were cited as supporting the proposition that the Tribunal Member should, when informing itself, disclose its action and the sources of its information. They are Ruiz v Canberra Rex Hotel Pty Ltd (1974) 5 ACTR 1 and McGale v Glad (1981) 59 FLR 1. 51 In Ruiz Woodward J at 7-8 said: "It is also true that it has long been held that Workmen's Compensation Tribunals acquire "an immense fund of information" on subjects such as these and have both a right and a duty to apply such information to cases coming before them: see, for example, Bryer v Metropolitan Water Sewerage and Drainage Board [1939] WCR (NSW) 267 at 276. However, there is obviously an important distinction to be drawn between a tribunal which handles thousands of such cases every year and a judge or magistrate who deals with them at infrequent intervals. The principle does not alter - there is still a requirement to such general knowledge and common sense - but the use of sources of knowledge going beyond evidence given in the course of the hearing, calls for much greater caution in the case of the less experience tribunal." 52 In Glad, the Full Federal Court (per Sheppard J) stated: "Counsel for the appellant before us submitted that there was no warrant for the assumption made by his Honour that the evidence would have established that there was no work of a light nature available to a person with the respondent's disability. I am inclined to agree with that submission. I do not think that the problem is overcome by reference to para 6 a (b) of the Fourth Schedule to the Ordinance which provides that the court is not bound to act in a formal manner and is not bound by rules of evidence but may inform itself on any matter in such manner as it thinks fit. It would seem to me that if a court intends to rely on this provision it ought to say so and say what its sources of information are. Furthermore, neither the magistrate nor the learned trial judge was a specialist tribunal. It was without some of the advantages which such a tribunal has. That was a matter adverted to by Woodward J in Ruiz v Canberra Rex Hotel Pty Ltd (1974) 5 ACTR 1 at 7-8. I respectfully agree with what his Honour has there said in that regard." 53 Milstern referred to G A Flick Natural Justice - Principles and Practical Application, 2nd ed (1984) at Ch 5 where a distinction is drawn between the impermissible use of expertise as a substitute for evidence, and the permissible use of expertise to evaluate evidence. However, Dr Flick goes on to say that the traditional distinction upon which the requirement of disclosure is dependent upon, is whether the tribunal is using its expertise as a substitute for evidence or using it only for the purpose of evaluating the evidence that has already been presented. 54 The Tribunal Member was faced with making a decision with scant evidence. None was produced by the residents, but they made submissions and raised the issue of whether the kitchen was efficiently run. Neither party served an expert's report. The Tribunal Member was obliged to make a decision. He did so by "doing the best I can." The Tribunal member made a finding that it would be sufficient for the kitchen to be operated by a full time cook and a dining room assistant, who could provide the services of a waiter and kitchen hand, and allowed $100,000 as being the amount that was reasonably incurred in 2004. Ruiz held that the Tribunal can use knowledge going beyond the evidence given in the hearing, but where the Tribunal has less experience greater caution is required. The Tribunal Member has specialised knowledge in the working of retirement villages. The Tribunal Member was not bound to accept Milstern's evidence and submissions. The Tribunal Member stated that he was drawing on his experience of considering budgets in cases of much bigger villages. That is, the Tribunal Member was using his knowledge to evaluate the evidence given by Milstern. 55 It is my view that in these circumstances the Tribunal Member was entitled to rely upon his knowledge. There was no error in the approach adopted in respect of s 28 of the Act. It was open for the Tribunal member to make the decision he did.

(4) Alleged apprehended bias 56 The law is not in doubt. Apprehended bias will exist where a fair minded lay observer, who is properly informed as to the nature of the proceedings, the matter in issue and the conduct of the Tribunal, might reasonably apprehend that the Tribunal might not bring an impartial mind to the resolution of the question to be decided: Re Refugee Review Tribunal; Ex-parte H (2001) 75 ALJR 982 at [27]; Livesey v New South Wales Bar Association (1983) 151 CLR 288 at 293-294. 57 Milstern submitted that the implicit finding of fact made by the Tribunal member that $50,544, out of the total expenditure incurred by Milstern with respect to kitchen wages of $150,544, was not reasonable or necessary, was a finding which was not logical, was capricious and appeared to premised on a whim or fancy that such services should have been provided more cheaply, notwithstanding that there was no evidence to that effect. 58 Milstern referred to NADH of 2001 v The Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 328 and Waij v The Minister for Immigration & Multicultural & Indigenous Affairs (2004) 80 ALD 568. NADH is an example apprehended bias is where the fact finding of the Tribunal is conducted in a manner which is substantially unreasoned; in the nature of mere assertion that lacked rational or reasoned foundation; at times planning and ex facie wrong; and selective material going one way. 59 The Tribunal is required to act judicially - see Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 366; WAIJ v Minister for Immigration Multicultural and Indigenous Affairs (2004) 80 ALD 568 at [20]. This requires that the Tribunal carry out its decision-making function rationally and reasonably and not arbitrarily - see Bond at 366-7. That is to say that the Tribunal cannot determine a matter by "tossing a coin" or by making a "snap decision or by acting on instinct, hunch or a gut feeling": WAIJ at [21]. Further, according to Milstern the Tribunal's power to make a determination is based on findings or inferences of fact that are grounded upon probative material and logical grounds - see Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 at [145]; WAIJ at [22]. 60 I have read the transcripts and the judgment carefully. The hearings were conducted in a fair and helpful manner by the Tribunal Member. I have also outlined the manner in which the proceedings before the Tribunal was conducted earlier in this judgment. It is my view that a fair minded lay person, who was properly informed as to the nature of the proceedings, the matter in issue and the conduct of the Tribunal would not reasonably apprehend that the Tribunal Member did not bring an impartial mind to the resolution of the question to be decided. The Tribunal Member reached a conclusion that some of the expenditure on kitchen wages was not reasonable. The submission that there was an apprehension of bias fails.

(5) The rehearing 61 Section 68 of the CTTT Act deals with rehearings. Section 68(2) sets out the grounds upon which a rehearing application may be made. They are that the applicant may have suffered a substantial injustice because firstly, the decision of the Tribunal in the completed proceedings was not fair and equitable, or secondly, the decision of the Tribunal was against the weight of evidence, or thirdly, significant new evidence has arisen (being evidence that was not reasonably available at the time the completed proceedings were being heard). 62 Importantly, s 68(8)(c) provides that the Chairperson's decision on whether or not to grant a rehearing "is final and not subject to review of any kind." It is my view that a rehearing decision is not subject to review in this Court. 63 In Mah v Consumer Trader & Tenancy Tribunal & Anor [2005] NSWSC 476 Master Malpass (as he then was) at [21] to [23] stated that ss 65 and 67 of the Act have no application in relation to such a decision and that the legislature makes it clear that such a decision is to be final and not subject to review of any kind. I respectfully agree with this view. 64 However, in Rowlands v Consumer, Trader & Tenancy Tribunal [2003] NSWSC 730 Gzell J, the facts were that Ms Rowlands was an applicant in person. On Friday 1 August 2003, an application was due to be made to the CTTT at 2.00 pm concerning her occupancy of certain premises. Because of transportation difficulties, Ms Rowlands notified the Tribunal that she would be late. She says she arrived at 2.35 pm. She was handed a document, being a notice of an order made for termination and possession of the premises, together with an order that she should pay the landlord a daily occupation fee at a specified rate to the date of giving up possession. On Monday 4 August 2003, Ms Rowlands applied under s 68(1) of the Act for a rehearing. On the day of the hearing before Gzell J, Thursday 7 August 2003, she received a notice that on Tuesday 5 August 2003 her application for a rehearing was refused. Gzell J referred to ss 65(1) and (3) and stated that it was open to argument that Ms Rowlands was denied procedural fairness in the refusal by the Tribunal to rehear the matter. 65 On 6 July 2005 the Tribunal issued a notice of order (Ex PB 21) in the following terms: "On 5/7/2005 the application to the Chairperson for a rehearing of matter number RV04/56991 is not granted as the Chairperson is not satisfied that the applicant may have suffered a substantial injustice. The application was considered under section 69 of the Consumer, Trader and Tenancy Tribunal Act 2001 (copy attached).

The orders made were available on the evidence before the Tribunal.

If the rehearing applicant is now suggesting the evidence was incomplete or incorrect, then it may need to seek review by means other than a s 68 application.

APPLICATION FOR A REHEARING NOT GRANTED." 66 Milstern's reasons for seeking a rehearing was that the plaintiff wished to rely on further evidence which could have been produced at the hearing before the Tribunal. These reasons do not fall within s 68(2). The decision of the Chairperson to refuse the application for rehearing was correct.

Costs 67 The plaintiff submitted that as a general rule, a successful can recover costs only if the intervention was necessary to protect an interest not common with the main parties - see City of Burnside v Attorney-General (SA) (1994) 63 SASR 65 at 67 per Debelle J and Dal Pont, The Law of Costs, 2003, Butterworths at 350. 68 Section 86 of the Fair Trading Act 1987 (NSW) provides that where the Minister intervenes in proceedings, the Minister becomes a party to the proceedings, and has all the rights, including rights of appeal, of a party to the proceedings. 69 Costs are discretionary. The first defendant took no active role in these proceedings. The Minister acted as a contradictor - see Holloway v Chairperson of the Residential Tribunal (2001) 51 NSWLR 716 at [42]. The Minister's intervention was of assistance to this Court by making submissions as to the operation of the Act. Some of these submissions were common to the residents' case, others were not. As the first defendant did not appear, Milstern is not burdened by being held responsible for two lots of costs, being the Minister's and the first defendant's. It is only responsible for the Minister's costs. It is my view that the plaintiff should pay the Minister's (third defendant) costs. 70 The appeal is dismissed. The order of the Tribunal Member H E Moore dated 9 November 2005 is affirmed. The amended summons filed 9 May 2006 is dismissed. The plaintiff is to pay the third defendant's costs as agreed or assessed.

(2) The application for relief under s 65(3) is refused.

(3) The order of the Tribunal Member H E Moore dated 9 November 2005 is affirmed.

(4) The amended summons filed 9 May 2006 is dismissed.

(5) The plaintiff is to pay the third defendant's costs as agreed or assessed. **********

14/09/2006 - Amended Leonard Bovaird to Leon Bovaird - Paragraph(s) Para [29]

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.