Ross v CTTT & 2 Ors

Consumer, Trader & Tenancy Tribunal of NSW (First Defendant) PARTIES : Kathy Thane (Second Defendant)

Trevor Leonard Dell (Third Defendant) FILE NUMBER(S) : SC 30083/2002 Mr A Searle (Plaintiff) COUNSEL : Mr R Weaver (Third Defendant) Mr G Francis of Sagacious Legal Pty Limited (Plaintiff)

Mr I V Knight SOLICITORS : Crown Solicitor (First Defendant)

Mr O Neimanis of O Neimanis & Co (Third Defendant)

LOWER COURT CTTT JURISDICTION : LOWER COURT GEN02/20050 FILE NUMBER(S) : LOWER COURT Tribunal Member Ms Kathy Thane JUDICIAL OFFICER :

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

30083/2002 - DAVID ANTHONY ROSS t/as CREDIT ACCOUNTING CONSULTANCY v CONSUMER, TRADER & TENANCY TRIBUNAL OF NEW SOUTH WALES & 2 ORS

JUDGMENT (Appeal CTTT - ex parte hearing, refusal to grant rehearing) 1 MASTER: By amended summons filed 14 February 2003, the plaintiff seeks order in the nature of certiorari, quashing the decisions of the first defendant dated 28 June 2002 and 20 August 2002. The plaintiff no longer pressed paragraph 8 of the summons. The List Judge referred this matter to a master for hearing. 2 The plaintiff is David Anthony Ross t/as Credit Accounting Consultancy. Mr Ross was the defendant in the Consumer, Trader & Tenancy Tribunal proceedings but in this judgment I shall refer to him as the plaintiff. The first defendant is Consumer, Trader & Tenancy Tribunal of New South Wales (CTTT). The second defendant is Kathy Thane. The third defendant is Trevor Leonard Dell. Mr Dell was the applicant in the CTTT proceedings. The plaintiff relied on his affidavit sworn 16 September 2002. The third defendant relied on his affidavit sworn 23 October 2002. The third defendant was not required for cross examination. The first defendant filed a submitting appearance but in final submissions it became apparent that the powers of delegation under the Act were in issue. In accordance with Holloway & Anor v the Residential Tenancy Tribunal & Ors [2001] NSWCA 209 at 42, the court sought submissions from the CTTT and the parties had an opportunity to reply. 3 Section 65(3) Consumer, Trader and Tenancy Tribunal Act 2001 (the Act) provides that relief can be granted by way of a judgment or order in the nature of prohibition, mandamus, certiorari, and a declaratory judgment or an injunction if in relation to the hearing or declaration of the matter, a party had been denied procedural fairness or the Tribunal had no jurisdiction to make an order. 4 At the CTTT the plaintiff did not appear at the hearing and the matter proceeded in his absence. On 28 June 2002, the Tribunal heard and made the following order for the payment of money. "1. The respondent, DAVID ANTHONY ROSS T/AS CREDIT ACCOUNTING CONSULTANCY, 48 Francis Street, GLEBE NSW 2037 is to pay the applicant, TREVOR LEONARD DELL, 47 Kumbara Close, GLENMORE PARK NSW 2745 the sum of $16,300.00 on or before 20/07/02." 5 The plaintiff lodged a rehearing on the basis that he did not receive the notice advising him of the hearing and this application was refused. I shall refer to this in more detail later in this judgment.

Grounds of appeal 6 The plaintiff's grounds of appeal are firstly that the first defendant heard and determined the matter ex parte without proper reason and failed to act in accordance with the duty imposed on it by s 35 of the Act; secondly, that the first defendant failed to have proper regard to the duty imposed on it by s 35 of the Act and acted contrary to s 35 by denying the plaintiff an opportunity to be heard; and thirdly, that the decision of the second defendant of 28 August 2002 is void in that the power conferred upon the Chairperson of the first defendant under s 68 of the Act cannot be delegated. The plaintiff seeks an order in the form of certiorari quashing the decision of the second defendant made on 20 August 2002 on the grounds that the determination denied procedural fairness and also in relation to the decision of 28 August 2002 raises issues as above in relation to s 35 and Regulation 29. 7 Section 25(2) of the Act provides that if a party is notified of a hearing fails to attend at the time and place notified, the proceedings may be held in the absence of the party. 8 Regulation 29 of the Consumer Trader and Tenancy Tribunal Regulations 2002 states: "Ex parte proceedings (1) The Tribunal may proceed to hear a matter in the absence of a party who has failed to attend the hearing: (a) if it is satisfied that notice of the hearing was duly served on the party, or (b) if: (i) being satisfied that service of notice of the hearing has been duly attempted, or (ii) having given directions under clause 46(6), the Tribunal considers that justice requires that the matter be dealt with in the absence of the party concerned. (2) If a matter is adjourned by the Tribunal in the absence of a party, the Registrar is to give notice of the time and place of the adjourned hearing to the absent party. If the party who is so notified fails to attend the hearing, the matter may be dealt with in the absence of the party." 9 Thus, where a party does not attend at the hearing the Tribunal Member was entitled to proceed to hear the matter ex parte if he or she was satisfied that the notice of the hearing was duly served on the party. The registry forwards the notice of the hearing to the parties - see s 25 of the Act. The third defendant received the notice from the Tribunal listing the application for hearing on 28 June 2002. The Tribunal file is not in evidence so it is not known whether a copy of the letter addressed to the plaintiff is on that file, although from the plaintiff's reasons for a rehearing he was aware that the letter notifying him of the hearing date was forwarded to him at a particular address. In these circumstances the Tribunal Member was entitled to proceed and deal with the hearing in the absence of the plaintiff. 10 The plaintiff referred to s 35 of the Act which states: "35. 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." 11 Section 35 operates where the parties are present at the hearing and for the present purposes has little relevance as the plaintiff was not present at the hearing. Regulation 29 is not void for inconsistency it refers to a situation where a party has failed to attend a hearing.

Denial of natural justice and procedural fairness 12 In relation to natural justice, Professor S A de Smith, Judicial Review of Administrative Act, 2nd ed., pp 180-181 has stated: "Natural justice generally required that persons liable to be directly affected by proposed administrative acts, decisions or proceedings be given adequate notice of what is proposed, so that they may be in a position: (a) to make representations on their own behalf; or (b) to appear at a hearing or inquiry (if one is to be held); and (c) effectively to prepare their own case and to answer the case (if any) they have to meet." 13 In Kioa v West (1985) 159 CLR 550 the High Court held that the duty to accord natural justice is a duty to act fairly. In the normal course, a party to judicial proceedings (as are those in a tribunal) could expect to be apprised of the nature of the case sought to be made against it, and of the date and time fixed for hearing such as to give it a reasonable opportunity to meet that case and to advance its own. These statements are similar to those expressed by Professor de Smith and referred to earlier. Brennan J (as he then was) at 628 stated: "A person whose interests are likely to be affected by an exercise of power must be given an opportunity to deal with relevant matters adverse to his interest which the repository of the power proposes to take into account in deciding upon its exercise." 14 In relation to procedural fairness, Mason J stated in Kioa at 584-585 that the law had now developed to a point where it may be accepted that there is a common law duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions which affect rights, interests and legitimate expectations, subject only to the clear manifestation of a contrary statutory intention. Procedural fairness is a notion of a flexible obligation to adopt fair procedures which are appropriate and adapted to the circumstances of the particular case (pp 454 and 455). Hence, whether there is a denial of procedural fairness depends on the circumstances in each case. 15 Unlike the CTTT, this court has had the advantage of Mr Ross' evidence. The plaintiff was cross examined. I closely observed the plaintiff while he was being cross examined and formed the view that he was not a credible witness. His evidence is frankly, unbelievable. 16 The plaintiff outlined the novel way by which his business set about obtaining money from and ostensibly for the benefit of consumers. Mr Ross explained that when a client telephoned in response to an advertisement (presumably that appeared in a newspaper) they were asked to attend the plaintiff's business premises at Broadway. In evidence there are references to the "Glebe" office and the "Broadway" office. Those references are to the same place, which for convenience, I shall refer to as the Broadway office. Initially, the client was interviewed by an employee of the plaintiff's business and a "due diligence" was undertaken. After this had taken place the client was given a schedule of costs. No charges were incurred by the client up to this point. The client was then given an opportunity to decide if he or she wished to proceed to the next step. When asked what exactly was offered to the client, Mr Ross answered that he was unable to say, as every case was different. When asked if "offered to them" meant some prospect of borrowing money Mr Ross answered that "It may be". 17 Sometimes Mr Ross or his representative would instruct the client to go to Grace Bros. Broadway to obtain gift vouchers in order to establish their credit rating. The client may have been required to fill out a credit application with Grace Bros. in order to obtain the gift vouchers on credit. For example, the client would request $500.00 credit. Grace Bros. would do a cursory check and would advance to him or her credit in the form of vouchers, which could be used at the Grace Bros. Broadway store or used to pay Mr Ross' business fee. That Grace Bros. transaction record is then forwarded to the Credit Association Records. According to Mr Ross, the obtaining of gift vouchers then gave the client some form of credit rating and establishes "some borrowing empathy". The client returns to the business conducted by Mr Ross and could pay his fee in vouchers. Depending on the nature of the client's request, the business would then assist him/her either to consolidate debt or borrow more funds. Mr Ross or his representative may then assist the client in making a bankcard or loan application. Because the client had now obtained a credit rating from the Grace Bros. transaction, this credit rating meant the bank would issue a bankcard or advance a small loan (t 13, 14, 15.5). 18 Mr Ross' evidence was that the fee his company received was a fee for service business, but denied he received a fee or any form of payment from the bank or loan provider. He explained that his business took the fee upfront from the consumer with a schedule of costs. When asked if he was aware as to whether it was legal in terms of the Consumer Credit Act, Mr Ross took the stance "It is illegal under the Finances Brokers Act which is why we are not finance brokers in that business" even though he admitted that his business is called "Credit Accounting Consultancy", his letterhead bears the words "management consultant" and in the advertisement there appears in big bold type the word "Accountancy". 19 Mr Ross gave evidence that there were a number of judgments against his business in the CTTT. He admitted that dissatisfied clients who had been the subject of a "third party fraud" had not been repaid by his business. This "third party fraud" is referred to in more detail later in this judgment.

The plaintiff's rehearing application 20 On 13 August 2002, the plaintiff made an application to the CTTT for a rehearing. In his affidavit in support he alleges: "1. I have never seen a copy of the notice of conciliation of hearing. 2. When I became aware of the CTTT notice dated 3 July 2002, I instructed my solicitor to urgently search the records of the CTTT to inform myself of what has transpired. 3. I have been away in country NSW dealing with my farm which is severely affected by the drought, which is why I did not get the 3 July 2002 notice. 4. 48 Francis Street, Glebe is a 'rough' part of town and my mailbox is tampered with regularly. I am currently in the process of moving all my mail to PO Box 1023, Royal Exchange NSW 1225." 21 On 20 August 2002, the application for a rehearing was refused. In his written reasons the Tribunal member stated: "The regulations provide that applicants (sic) for a rehearing be lodged within 14 days after notification of the Tribunal's order. Whilst the applicant may have a sufficient reasons for not attending the original hearing or lodging this application within time, it is not considered in all circumstances appropriate to extend the time frame for bringing the application as the application has little likelihood of success. This is because the applicant has failed to outline how the decision was either not fair and equitable or against the weight of evidence. Nor has he provided and (sic) evidentiary material at all to support his claims or to show how the Tribunal would have been led to a different conclusion on 28 June 2002. The applicant has failed to outline on what basis the application should be reheard within the limited ambit of s 68 of the Act." 22 In another matter, Mr Ross sought a rehearing on similar grounds and this application was granted. 23 At paragraph 3 of his reasons for seeking a rehearing Mr Ross stated that he did not receive the 3 July 2002 notice. In fact Mr Ross does not actually mean the 3 July 2002 notice but rather the earlier notice advising the company of the date for hearing. His business manager, Mr Carney received this notice of 3 July 2002 and told the plaintiff about it by telephone. According to Mr Ross, Mr Carney was a competent manager and if it was a serious matter, Mr Carney's competence would extend to notifying him of it my telephone (t 3.45). Mr Ross gave evidence that he splits his week between his property at Scone and Sydney but when he is in Sydney one, two, three, or four days per week, he may not attend the Broadway office. 24 Mr Ross in his rehearing application stated that he had been away in country New South Wales dealing with property severely affected by drought which is why he did not get the notice. However, from the plaintiff's evidence given to the court a different picture emerged. Mr Ross actually spent one, two, three or four days in Sydney and the rest of the week at his country property near Scone. He did not necessarily go into the Broadway office but telephoned Mr Carney one or twice per week. Later he stated that even though by May 2002 he knew that his business had been defrauded, he did not bother to contact the business (t 9.51). Then he denied giving that answer. 25 Well before June 2002 Mr Ross became aware that there had been a "third party fraud" when Mr Carney rang to tell him there were "several issues" and Credit Accounting Consultancy did not have the funds and steps were required to be taken in relation to reporting back to the police (t 4.18-20). Apparently Mr Ross also took steps to secure the services of a forensic accountant and a firm of private investigators to interview people who had been dealing with a particular person called Jason Wright. Once Mr Ross became aware of the difficulties that the business was having receiving notices from the CTTT, the mail was redirected to a GPO Box. Mr Ross was unable to recall precisely when that occurred because he would have to speak to the manager (t 11.7). However, no action to redirect the mail was taken by 29 July 2002 because Mr Ross deposed in another matter that he did not receive a notice from the CTTT bearing that date. 26 According to Mr Ross, the private investigator located the employee who defrauded his company in December or January but "we've now lost him" (t 11.55). Apparently the sighting of Mr Wright was reported to the police. Mr Ross initially said when asked how Jason Wright was located he replied "You would have to asked the private investigator." When the court then asked "Does he (the private investigator) report to you?" Mr Ross answered "He reported to the manager". Mr Ross was asked the name of the police officer at the station where the whereabouts of Mr Wright was reported to and the answer was I'll have to ask Michael Carney" (the manager). Although Mr Carney told him the name he has now forgotten it (t 12.33). Later, Mr Ross was asked about how long he was aware of Mr Wright's whereabouts, he answered "At the time, we were made aware when we visited him, he had left - departed the premises." Then Mr Ross amended his answer to say that they sent someone from the office to visit him and by the word "we" he meant the company (t 16.7). He also then remembered that the "company" went to visit Mr Wright in the "inner suburbs of Redfern, inner suburbs of Sydney". 27 This court has the advantage of Mr Ross's additional evidence. From his evidence the court had no alternative but to reach the conclusion that Mr Ross cannot be regarded as a credible witness. His explanation regarding the non-receipt of the notice of hearing cannot be accepted. The decision of the Tribunal in relation to the hearing and rehearing are correct.

Power of delegation - s 68 28 However, this leaves the construction issue namely whether the Chairperson is permitted under the Act to delegate the power to determine the rehearing application to a Tribunal Member. The plaintiff submitted that under s 68, it is only the Chairperson who can make a decision upon a rehearing application and this power cannot delegated to a Tribunal member. Thus, according to the plaintiff the rehearing decision was made ultra vires and is void. The CTTT and the defendant submitted that this is not so. 29 The plaintiff referred to the following passage from the High Court decision in R v Wallis; Ex p Employers Association of Wool Selling Brokers (1949) 78 CLR 529 at 550, where Dixon J stated: "But upon some matters the Act does speak with more particularity. If it confers a specific power with respect to a limited subject or specifies a manner of dealing with it or otherwise provides what the duty or authority of the arbitrator shall be, then upon ordinary principles of interpretation the provision in which that is done should be treated as the source of his authority over the matter, notwithstanding that otherwise the same or a wider power over the same matter might have been implied or covered by the general authority given by [another provision]. This accords with the general principles of interpretation embodied in the maxim expressum facit cessare tacitum [that which is expressed renders ineffective that which is implied] and in the proposition that an enactment in affirmative words appointing a course to the followed usually may be understood as importing a negative, namely, that the same matter is not to be done according to some other course." 30 Section 12 of the Act provides: "12. Functions of Chairperson

(1) The Chairperson is responsible for the following:

(a) the effective and efficient operation of the Tribunal generally,

(b) the effective and efficient management of the Tribunal's work. (2) In particular, the Chairperson has the following functions:

(a) to direct and monitor the procedural operations of the Tribunal to ensure that those operations are fair, economical, informal and as speedy as practicable,

(b) to allocate the work of the Tribunal among the members,

(d) to review those directions on a regular basis. (3) The procedural directions given by the Chairperson must:

(b) be consistent with this Act and the regulations. (4) The Chairperson may also give directions in relation to the following:

(a) the practice and procedure to be followed in alternative dispute resolution procedures under this Act,

(c) any matter in respect of which the Chairperson is authorised by this or any other Act or the regulations to give directions,

(d) subject to this or any other Act and the regulations---any matter necessary or convenient to be determined by direction of the Chairperson for carrying out or giving effect to this Act.

(5) Subject to the regulations, the functions of the Chairperson (other than a power of delegation under this section) may be delegated to any member or to the Registrar or another member of the staff of the Tribunal. 31 Section 12(2)(b) gives the Chairperson power to allocate the work among Tribunal members and s 12(5) gives the Chairperson power to delegate his functions to any member subject to regulation. 32 Section 68 provides: "68. Rehearings by Tribunal

(1) A party in any proceedings that have been heard and determined by the Tribunal ("the completed proceedings") may, in the manner and within the time prescribed by the regulations, apply to the Chairperson to have the completed proceedings reheard by the Tribunal.

(2) The grounds on which such an application may be made are that the applicant may have suffered a substantial injustice because:

(a) the decision of the Tribunal in the completed proceedings was not fair and equitable, or

(b) the decision of the Tribunal was against the weight of evidence, or

(c) significant new evidence has arisen (being evidence that was not reasonably available at the time the completed proceedings were being heard).

(7) The Chairperson is not to grant the application unless it appears to the Chairperson that the applicant may have suffered a substantial injustice.

(8) The Chairperson's decision whether to grant or refuse the application: (a) may be made without the need for any hearing or meeting, and

(b) is not to be considered to be part of the Tribunal's proceedings, and

(c) is final and not subject to review of any kind.

(9) If the application is granted, the Chairperson is to determine:

(a) the constitution of the Tribunal in a manner appropriate for the purposes of the rehearing (having regard to the circumstances of the case), and

(b) the matters that are to be reheard. (10) The rehearing is to be dealt with by the Tribunal as a fresh hearing of the matters to be reheard, but it does not give rise to any further rehearing under this section.

(13) A person cannot make an application under this section for a rehearing of completed proceedings if: (a) the amount claimed or disputed under the completed proceedings was more than $25,000 (or such other amount as may be prescribed by the regulations), or

(b) the person is a corporation and the matter relates to a dispute under the Consumer Credit (New South Wales) Act 1995.

(14) The regulations may exclude the making of an application for a rehearing under this section in cases of any prescribed class or description." 33 The plaintiff submitted that the functions of the chairperson are provided for in s12 and that the breadth of the functions enumerated in that section and the fact the power of delegation are all found in one location within the Act results in the presumption that the functions of the Chairperson that may be lawfully delegated are only those functions found in s 12. Further, it was submitted that where the rehearing power is granted to the chairperson under s 68, the Chairperson and the Tribunal are distinguished to the extent that the power to determine whether a rehearing should proceed lies only with the Chairperson. 34 It is true that s 68 refers specifically to the Chairperson. It is only after the Chairperson has made a decision to grant a rehearing that reference is made to the Tribunal. Section 12 of the Act is the only section which refers to the powers of delegation by the Chairperson. There is no general power of delegation elsewhere in the Act which supports the proposition that the power of delegation in s 12(5) is confined to those functions which are specified in s 12. Section 12(5) states that the functions of the Chairperson may be delegated subject "to the regulations". Regulation 41 of the Consumer Trader and Tenancy Tribunal Regulations 2002 refers to those powers that cannot be delegated. It specifies that it is only the functions of the Chairperson pursuant to s12(2)(c) and (d) of the Act and clauses 1(2)(a) and (5) and 2(3)(a) of Sch 3 to the Act cannot be delegated. None of these functions are concerned with the power of the Chairperson to determine rehearing applications. 35 The maxim of expressum facit cessare tacitum is the same concept as that contained in the principle of expressio unius est exclusio alterius: Attorney General of NSW; ex Rel Franklins Stores Pty Ltd v Lizelle Pty Ltd [1977] 2 NSWLR 955 Reynolds JA at 962-963. It has long been held that such maxims as methods of statutory construction must be applied with caution. In Colquhoun v Brooks (1887) 19 QBD 400 at 406, Wills J said: "Perhaps few so-called rules of interpretation have been more frequently misapplied and stretched beyond their due limits. The failure to make the "expressio" complete very often arises from accident...and the application of this and every other technical rule of construction varies so much under differing circumstances, and is open to so many qualifications and exceptions, that it is rarely that such rules help one to arrive at what is meant." 36 In Lizelle at 963, Reynolds JA stated that the maxim must be treated as a principle of construction of common sense and logic. Further, as stated by Mason CJ Dawson Toohey and Gaudron JJ in Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 575 the maxim cannot be applied where it would bring about "a result which the legislature is unlikely to have intended". 37 It would be contrary to common sense, logic and the legislative intention evinced in s 12(2) if the Chairperson could not delegate her function under s 68. On 23 October 2001 the minister's second reading speech in relation to the Consumer, Trader and Tenancy Tribunal Bill in the legislative assembly recorded that in one year alone the forerunners to the CTTT, namely the Residential Tribunal Registry and The Fair Trading Tribunal, received around 50,000 and 13,500 applications respectively. According to the CTTT's submissions, from 1 March 2002 and ending 28 February 2003, the Tribunal heard 3061 applications. The second reading speech did not specifically refer to s 68. It could not have been Parliament's intention that the Chairperson would be obliged to personally deal with each and every rehearing. The maxim expression facit cessare tacitum should not be applied. 38 For these reasons, it is my view that the Chairperson was acting within her power when she allocated the rehearing application to a Tribunal member for determination. As already stated, the court cannot accept the plaintiff's explanation that he did not receive the notice of hearing. The decisions of the Tribunal Member dated 28 June 2002 and 20 August 2002 are affirmed. The summons is dismissed. Costs normally follow the event. The plaintiff is to pay the defendants' costs as agreed or assessed. 39 The court orders:

(1) The decisions of the Tribunal Member dated 28 June 2002 and 20 August 2002 are affirmed.

(3) The plaintiff is to pay the defendants' costs as agreed or assessed. ***********

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