Oubani v MCI Technologies P/L & Anor

Submitting Appearance (Second Defendant)

LOWER COURT Consumer Trader and Tenancy Tribunal of NSW JURISDICTION : LOWER COURT GEN 03/38055 FILE NUMBER(S) : LOWER COURT Tribunal Member M Sainsbury JUDICIAL OFFICER :

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

30007/2004 - YOUSSEF OUBANI v MCI TECHNOLOGIES PTY LTD (FORMERLY KNOWN AS MICRO CORPORATION OF AUSTRALIA PTY LTD ACN 010 177 107) & ANOR

JUDGMENT (Appeal decision of CTTT - jurisdiction - Supply of goods and services) 1 MASTER: The plaintiff appeals the decision of the Consumer, Trader and Tenancy Tribunal Member's decision, which held that it has no jurisdiction to hear a case where the contract arose in Queensland. Both the plaintiff and first defendant agreed that if goods and services were supplied in New South Wales, the CTTT has jurisdiction. 2 The plaintiff is Youssef Oubani (Oubani) and was the applicant in the CTTT proceedings. The first defendant is MCI Technologies Pty Ltd (formerly known as Micro Corporation of Australia Pty Ltd) ACN 010 177 107 (MCI) and was the respondent in the CTTT proceedings. The second defendant is the CTTT who has filed a submitting appearance. In Holloway & Anor v the Residential Tenancy Tribunal & Ors (2001) 51 NSWLR 716; [2001] NSWCA 209; the NSWCA referred to the difficulty that the court faces in determining an appeal from a Tribunal where there is no contravener (paras [41] and 42]). On 19 July 2004 with the parties' agreement, my associate wrote to the Crown solicitor seeking his advice as to whether he wished to make submissions in relation to the issue of jurisdiction. He does not wish to do so.

The appeal 3 The plaintiff seeks firstly, an order pursuant to s 67 of the Consumer, Trader and Tenancy Act 2001 (NSW) (the CTTT Act) that the decision and orders of the second defendant, constituted by Tribunal Member M Sainsbury in proceedings 03/38055 dated 19 December 2003 be set aside; and secondly, a declaration that the second defendant has jurisdiction to hear and determine the plaintiff's application under the Consumer Claims Act 1998 (NSW) (the CC Act) (summons filed 19 January 2004). 4 The plaintiff's grounds of appeal are that the CTTT erred: firstly, in finding that it had no jurisdiction to hear and determine the plaintiff's application under the CC Act; secondly, in finding that the supply of goods by the first defendant to the plaintiff on 4 December 2001 was not a supply to which the CC Act applied; thirdly, in failing to hold that in the transactions between the plaintiff and the first defendant the plaintiff was a consumer within the meaning of the CC Act; fourthly, in finding that the contract between the plaintiff and the first defendant was formed in the state of Queensland; fifthly and in the alternative, in holding that, as a consequence of its finding that the contract between the plaintiff and the first respondent was formed in the state of Queensland, the CC Act did not apply to the transaction; sixthly, by failing to have regard to and apply the principle that for the purposes of the CC Act, a party who claims to be a consumer is presumed to be one until the contrary is proved and the onus of proving that a person who claims to be a consumer is not a consumer is on the party who seeks to establish that fact. 5 Section 67 of the CTTT Act allows for an appeal to be made to this court on a question 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 on the plaintiff to demonstrate that there has been an error of law. Section 67(3) of the CTTT Act provides that after deciding the question of the subject of an appeal, the court may, unless it affirms the decision of the Tribunal on the question that should have been made by the Tribunal, remit its decision on the question to the Tribunal and order a rehearing of the proceedings before the Tribunal.

The CTTT proceedings 6 The proceedings before the CTTT arise from a dispute related to a contract between Oubani and MCI entered into in December 2001 when Oubani was aged 17. Under the contract MCI supplied Oubani with a stockbroking trading system including computer software called "Blue Chip Trader" at the price of $5,900.00. MCI marketed the "Blue Chip Trader" software as follows: "The program will analyse the entire Stock Market. It will alert you to a list of shares to invest in that have met the computer's criteria. If you own shares, the program can also alert you to exit your shares in order to show a profit, or reduce the risk of any loss." (See AB 25). MCI was based in Queensland. The computer software was supplied to Oubani at his address in the State of New South Wales (J 2, Facts 6 & 7). 7 In February 2003 Oubani made his first application to the CTTT under the CC Act for an order that the purchase price be refunded. The question before the Tribunal was whether it had jurisdiction to hear the substantive application, that is, whether the dispute should be decided within the jurisdiction of New South Wales or Queensland. In April 2003 Oubani withdrew his application after the CTTT indicated it would be inclined to dismiss the application for want of jurisdiction. In September 2003, Oubani made a second application to the CTTT for an order under the CC Act that MCI refund his $5,900.00. 8 The primary ground of the plaintiff's appeal is that the jurisdiction of the CTTT under the CC Act is not affected by where a contract is formed, but turns on whether there is a supply of goods or services to a consumer in New South Wales. 9 The Tribunal Member held that: "…given that a claim for damages/compensation can only arise if liability is found, and given that the substantive claim in this matter is, according to the Application, one relating to issues at least of the nature of contractual obligations, liability can only arise in the NSW jurisdiction if the usual rules in determining the locus of that jurisdiction should find that the contract or arrangement was formed in NSW. In other words I find that any dispute concerning the supply of goods in NSW must in the absence of express intent in the legislation, be considered in the context of the common law, including the rule that, absent express intent of the parties, disputes on contracts should be decided in the jurisdiction in which the contract was formed. …I find it would be entirely unsafe in this inferior jurisdiction for me to find other than that without an express exclusion in the Act of such a fundamental cornerstone in the consideration of contract-type disputes in Australia as the rule that the contract is formed where the acceptance is received, the law as well established must stand. That is, in the absence of express intent in the Act, I find that a consumer claim will only come under NSW jurisdiction where the contract or other arrangement for the supply is entered into in NSW."

The relevant legislation 10 The relevant legislation is both the CC Act and the CTTT Act. It is necessary to examine the legislation. 11 The CTTT has and may exercise such functions as are conferred or imposed on it by or under the CC Act (s 5(2) CTTT Act). The Tribunal has jurisdiction to hear and determine any consumer claim brought before it except as otherwise provided by this section (s 7 CC Act). For present purposes the exceptions referred to in s 7(2) to (5) do not apply. In addition, s 21 of the CTTT Act provides that the Tribunal has such jurisdiction to decide matters, and such powers to make orders and otherwise exercise any function in connection with any such decisions, as is conferred on it by this or any other Act. 12 The CC Act also contains the presumption that a person who claims to be a consumer is a consumer unless the contrary is proved. The onus of proving that a person is not a consumer within the meaning of the CC Act is on the party who asserts the other party is not a consumer (s 4). 13 Oubani submitted firstly that the relevant contract was formed in the state of New South Wales and thus being a consumer claim, the Tribunal had jurisdiction; and secondly, that whether the contract was formed in New South Wales or in some other jurisdiction, the clear intent of the CC Act is that any consumer claim as defined by the CC Act can and should appropriately be determined within the NSW jurisdiction and thirdly, the Tribunal Member failed to consider or give effect to the presumption as put in s 4. I do not know whether MCI rebutted this presumption but it did make a submission that the contract was formed in Queensland. In relation to the submission that the contract was formed in New South Wales, it was open on the facts for the Tribunal Member to find that the contract was formed in Queensland. 14 More importantly Oubani submitted that a consumer claim depends on the supply of goods or services and that the relevant consideration was whether goods or services were supplied to a consumer in NSW. The respondent agrees that statement is correct and the decision of the Tribunal was wrong.

15 Section 3 of the CC Act defines "consumer", "consumer claim", "goods" and "services", "supplier" and "supply" as follows: " consumer means:

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 claim by a consumer for the payment of a specified sum of money, or

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.

goods means any tangible thing that is or may be the subject of trade or commerce, but does not include money or an interest in land.

services includes any 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 and, without limiting the generality of the foregoing, includes:

(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 (but not assurance cover in respect of a person's life),

(g) 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,

but does not include rights or benefits being the supply of goods or the performance of work under a contract of employment.

supplier means a person who, in the course of carrying on, or purporting to carry on, a business, supplies goods or services.

(a) in relation to goods, includes supply goods by way of a contract for the sale, exchange, lease, hire or hire-purchase of goods or an alleged contract for the sale, exchange, lease, hire or hire-purchase of goods, and

(b) in relation to services, includes provide, grant or render services for valuable consideration under a contract or for valuable consideration claimed to have been agreed to under an alleged contract." 16 The definitions of both 'consumer' and 'consumer claim' are concerned with the "supply" of goods and services "whether under a contract or not". It is my view that the relevant consideration is whether goods or services were supplied to a consumer in New South Wales and not where the contract was made. The computer software was supplied to a consumer, Oubani in New South Wales so the CTTT has jurisdiction to hear this matter. 17 The plaintiff submitted that the Service and Execution of Process Act 1992 (Cth) (SEPA) governs the power of the CTTT to serve its initiating process interstate and that in giving the Tribunals in one State power to serve process on and exercise jurisdiction over residents of another State, the SEPA is concerned with the place of supply rather than the place of contract. Part 4 of the SEPA is especially concerned with the service of process of Tribunals. Section 47 of the SEPA notes that: "proceeding means a proceeding in a tribunal in connection with the performance of an adjudicative function by the tribunal". 18 Section 48 of the SEPA provides: "This division applies with respect to a proceeding that concerns: … (b) a contract, wherever made, for the supply of goods or the provision of services of any kind (including financial services) within that State; or … (f) the validity of an act or transaction under a law of that State."

19 Section 50 of the SEPA provides: "An initiating process issued in a State may be served in another State."

20 In support of his analysis of the SEPA, Oubani refers to Green v Western Star Trucks Australia P/L & North Star Motors (NSW) PIL [2002] NSWCTTT 495. However in Green the CTTT found that the relevant supply occurred in Queensland and therefore the Tribunal did not have jurisdiction. It was Oubani's contention that the effect of the SEPA is that the MCI was validly served with the CTTT's process and became subject to the Tribunal's jurisdiction to determine Oubani's consumer claim. I agree with this submission. 21 In determining that the CTTT did not have jurisdiction to hear Oubani's application Tribunal Member Sainsbury did err. The appeal is upheld. The decision of Tribunal Member M Sainsbury dated 19 December 2003 is set aside. The matter is remitted to the CTTT for determination according to law. 22 Costs are discretionary. Costs usually follow the event. The first defendant is to pay the plaintiff's costs as agreed or assessed.

(1) The decision of Tribunal Member M Sainsbury dated 19 December 2003 is set aside.

(3) The matter is remitted to the CTTT for determination according to law.

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

Last Modified: 08/18/2004 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.