RURAL AND GENERAL INSURANCE LIMITED v FAIR TRADING TRIBUNAL OF NSW & ANOR

RURAL & GENERAL INSURANCE LIMITED (Plaintiff)

PARTIES : FAIR TRADING TRIBUNAL OF NSW (First Defendant)

PATRICIA DAVIE PTY LTD T/AS HARVEY WORLD TRAVEL (Second Defendant)

LOWER COURT Fair Trading Tribunal of NSW JURISDICTION : LOWER COURT CO2000/8287 FILE NUMBER(S) : LOWER COURT Senior Member Ms R Gurr JUDICIAL OFFICER :

R Horsley (Plaintiff) COUNSEL : M Sneddon (Second Defendant) Gillis Delaney Brown (Plaintiff) SOLICITORS : Spanko Soulos & Co (Second Defendant) CATCHWORDS : Fair Trading Tribunal Act 1998 - denial of natural justice LEGISLATION CITED : Fair Trading Tribunal Act 1998 Fair Trading Tribunal Regulation 1999 CASES CITED : Constable v Anvic Holdings Pty Ltd & Ors (unreported) [2001] NSWSC 544 Kioa v West (1985) 159 CLR 550 DECISION : See paragraphs 24-26

• 8 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

13629 OF 2001 RURAL & GENERAL INSURANCE LIMITED (Plaintiff)

FAIR TRADING TRIBUNAL OF NSW (First Defendant)

PATRICIA DAVIE PTY LTD T/AS HARVEY WORLD TRAVEL (Second Defendant)

JUDGMENT ( Fair Trading Tribunal Act 1998 - denial of natural justice) 1 By its Amended Summons the plaintiff seeks relief as follows: 1 An order in the nature of certiorai that the orders made on 4 July 2001 and 18 October 2001 (as set out in the notice of order dated 26 October 2001 by the first defendant in Proceeding No. CO2000/8287 between the second defendant (as applicant) and the plaintiff (as respondent) (the "Proceedings")) be set aside. 2 Further or in the alternative an order that a rehearing of the Proceedings be heard by the first defendant. 3 Further or in the alternative an order that the first defendant rehear the plaintiff's application in the Proceedings for a rehearing of the Proceedings. 4 An order pending the hearing and determination of this summons, staying the operation of the orders of the first defendant in the Proceedings made on 4 July 2001 and 18 October 2001. 2 The proceedings in this Court have been brought pursuant to s60(3) of the Fair Trading Tribunal Act 1998 (see now Consumer, Trader and Tenancy Tribunal Act 2001). That section states: 60(1) Except as provided by this section, a court of record has no jurisdiction to grant relief or a remedy by way of: (a) a judgment or order in the nature of prohibition, mandamus, certiorari or other relief, or (b) a declaratory judgment or order, or (c) an injunction, in respect of a matter heard and determined or is to be heard or determined by the Tribunal in accordance with this Act or in respect of any ruling, order or other proceeding relating to such a matter. (2) A court is not prevented from granting relief or a remedy of a kind referred to in subsection (1) in relation to a matter in respect of which the jurisdiction of the Tribunal to determine the matter was disputed where the ground on which the relief or remedy is sought is that: (a) the Tribunal gave a ruling as to its jurisdiction that was erroneous, or (b) the Tribunal erred in refusing or failing to give a ruling as to its jurisdiction when its jurisdiction was disputed. (3) A court is not prevented from granting relief or a remedy of a kind referred to in subsection (1) in relation to a matter in which the Tribunal has made an order, where the ground on which the relief or remedy is sought is that: (a) the Tribunal had no jurisdiction to make the order, or (b) in relation to the hearing or determination of the matter, a party to the claim had been denied natural justice. 3 It is appropriate to set out the terms of s63 of the legislation in relation to rehearings: 63(1) Except where the regulations preclude the making of an application under this section, a party to proceedings before the Tribunal may, in the manner and within the time prescribed by the regulations, apply to the Chairperson for an order directing that the matter be reheard by the Tribunal, on the ground that the applicant may have suffered a substantial injustice because: (a) the decision of the Tribunal was not fair and equitable, or (b) the decision of the Tribunal was against the weight of the evidence , or (c) evidence that is now available was not reasonably available at the time of the hearing. (2) The Chairperson is not to grant the application unless, on the face of the application, it appears to the chairperson that the applicant may have suffered a substantial injustice. (3) If the application is granted, the Chairperson is to determine the constitution of the Tribunal in a manner appropriate for the purposes of the rehearing, having regard to the circumstances of the case and the requirements of natural justice. (4) The matter is to be dealt with as a hearing de novo by the Tribunal as constituted under subsection (3). … 4 Part 6 of the Fair Trading Tribunal Regulation 1999 provides in clause 19 the following: 19(1) An application for a rehearing under section 63 of the Act must be made in writing addressed to the Registrar and filed with the Tribunal within 14 days after receipt of written notice of the decision concerned, except as provided by subclause (2).

(2) If a written statement of reasons for the Tribunal's decision is duly requested, the time prescribed by subclause (1) is extended to 14 days after receipt of the statement.

(3) If the applicant for a rehearing alleges that a rehearing is justified because he or she did not receive notice of the hearing of the proceedings, the Registrar or other officer accepting lodgment of the application may require that allegation to be verified by oath of the applicant.

(4) Only one rehearing may be granted at the request of any one party to the matter concerned, unless the Chairperson, being satisfied that in the special circumstances of the case this subclause should not apply, by order permits a further rehearing. (emphasis added) 5 In support of the relief claimed an affidavit of Charles Pratten, sworn 29 April 2002, was read and exhibited to it is a substantial folder of relevant material. An affidavit of Aaron Stephenson, sworn 27 April 2002, was read. 6 The dispute between the plaintiff in this Court and the second defendant arises from a claim under an insurance policy. That the second defendant is entitled to be indemnified is not in issue before the Fair Trading Tribunal; what is in issue is the quantum of that claim. 7 The history of the proceedings up to the relevant event under challenge can be summarised as follows (from the plaintiff's written submissions):

(a) On or about 2 October 2000, Rural & General received a notice of hearing from the FTT stating that a hearing was listed for 20 November 2000, in Melbourne.

(b) On or about 2 October 2000 Rural & General received a letter from FTT inquiring whether Rural & General objected to Ms Davie being represented at the hearing.

(c) On 19 October 2000, Rural & General wrote to the FTT objecting to Ms Davie being represented by Mr Arnold at the hearing. Later that day Mr Aaron Stephenson ("Mr Stephenson") of Rural & General received a telephone call from Nerissa of the FTT stating that Rural & General's objection had been upheld.

(d) On or about 31 October 2000, Rural & General received a notice of hearing from the FTT stating that the matter was listed for hearing in Sydney on 21 November 2000.

(e) On 9 November 2000, Rural & General wrote to the FTT requesting an adjournment of the hearing set down for 21 November, on the ground that Mr Pratten was the only person employed by Rural & General with the capacity to deal with the matter and he would be in Melbourne on that day.

(f) Rural & General's adjournment application was granted and it was informed of this in a letter from the FTT dated 10 November 2000.

(g) On 5 January 2001, Rural & General received a notice of order from FTT stating that the FTT application had been heard on 20 December 2000 and that Rural & General had been ordered to pay Ms Davie $15,060.00.

(h) Upon receipt of this notice, Rural & General wrote to FTT on 9 January 2001 requesting a rehearing on the grounds that it had received no notice of the 20 December hearing. Rural & General's rehearing application was upheld on 6 March 2001 and it was informed of this decision and provided with reasons for the decision shortly thereafter.

(i) In a letter dated 1 May 2001, Rural & General wrote to FTT requesting an order that Ms Davie produce certain documents relating to the claim. On 4 May 2001, FTT wrote to the parties listing the matter for hearing on this issue. On the same day the FTT issued a notice of interim order stating that on 11 April 2001 an order was made requiring Ms Davie to file copies of attendance and wage records for the period 22 June - 22 September 1998 with the Registry. There appears to be an anomaly with the dates of this correspondence and the notices however it does not appear to be of any consequence. Ms Davie failed to produce certain documents relating to the claim which were ordered by the Fair Trading Tribunal. There had been repeated requests made by Rural & General for these documents. No evidence was ever produced to substantiate Ms Davie's claim. Consequently there was no evidence to substantiate the orders made by the Fair Trading Tribunal on 4 July 2001.

(j) On 19 May 2001 the FTT issued a notice of hearing stating that the FTT application was listed for hearing on 6 June 2001, in Sydney.

(k) On 6 June 2001 Mr Stephenson sent a facsimile to the FTT enclosing a copy of Rural & General's letter to the FTT, dated 5 June 2001. In that letter (which is signed by Mr Stephenson) Rural & General sought an adjournment of the 6 June hearing on the grounds that Mr Pratten was unavailable due to prior commitments relating to the HIH inquiry. On 13 June 2001, the FTT issued a further notice of hearing stating that the FTT application was set down for hearing on 4 July 2001, at Sydney.

(l) On 6 July 2001, Rural & General received a notice of order from FTT stating that at a hearing held on 4 July 2001 an order was made that Rural & General pay Ms Davie $13,708.83 on or before 25 July 2001.

(m) On the same day Rural & General wrote to the FTT stating that Mr Pratten had failed to attend the hearing on 4 July 2001 as he had been suffering from severe conjunctivitis and forgot about the matter until 5 July 2001. A medical certificate dated 5 July from Dr Francis Donoghue ("Medical Certificate") accompanied Rural & General's letter and a rehearing was sought.

(n) On 20 July 2001, Mr Stephenson forwarded a formal completed Fair Trading Tribunal application to the FTT ("Rehearing Application"). A further copy of the Medical Certificate was enclosed.

(o) On 23 August 2001 the FTT stayed its orders of 4 July 2001, pending the outcome of the rehearing application.

(p) On 26 September 2001 the FTT issued a notice of hearing setting down the rehearing application for 18 October 2001.

(q) The rehearing application was heard by Ms Gurr of the FTT on 18 October 2001 and was unsuccessful. A notice of order was issued by the FTT on 26 October 2001 restating the FTT's order of 4 July 2001. 8 It thus can be seen that the hearing on 18 October 2001 was of a second rehearing application, the first rehearing application having been successful on 2 March 2001 see paragraph (h) above. 9 Further, it can be seen that on first rehearing on 4 July 2001 there was no appearance for Rural & General and an order was made that it pay a certain sum to the second defendant. 10 It is the events of the hearing before Ms Gurr on 18 October and the reasons published by her that give rise to the current proceedings. 11 On 18 October the second rehearing application was heard and Mr Pratten appeared. It is clear he offered an explanation as to why he had not appeared on 4 July, namely, a severe attack of conjunctivitis in respect of which a medical certificate had been provided to the Tribunal. That condition had completely debilitated him. He gave evidence to the effect that within the plaintiff company he had sole carriage of the particular claim and that no-one else within the plaintiff company would have known about the hearing date; he was at home with conjunctivitis and did not think about the matter until he returned to work on 6 July 2001. However, apparently, the file of the FTT contained a note that on 5 July someone from the plaintiff company had called the Tribunal. That caller apparently thought that the matter was to be heard at 10am that morning but had mislaid the hearing notice. When this matter was raised by Ms Gurr by reference to some file note in the Tribunal's records, Mr Pratten sought a short adjournment to obtain information that would permit him to call Mr Stephenson whom he, I gather on reasonable grounds, believed to be the person who called the Tribunal. This would appear to be so from Mr Stephenson's affidavit. That application was refused. 12 In the end, Ms Gurr, in her published reasons, having referred to s63 of the legislation, turned to the evidence of Mr Pratten. She summarised his evidence as to having sole carriage of the matter, that no-one else in the office knew about it, that his file was at home so no-one else in the office could have known about the appointment (that is, for the rehearing) and that he had conjunctivitis so badly that he did not think about the matter until 6 July. Ms Gurr then refers to the Tribunal file disclosing that a notice of hearing was sent to the respondent (which was not denied) and that "a person identifying himself as the respondent in this matter rang the Tribunal on 5 July 2001 at about 12 noon asking about the hearing notice. He said that he thought the matter was to be heard at 10am that morning but had mislaid the hearing notice. No mention was made of conjunctivitis or illness or a reason for not attending". 13 Mr Pratten had denied that he had telephoned the Tribunal office himself, asserting someone else must have done (that was why he sought the adjournment). 14 Ms Gurr noted that the pre-hearing application was the second such application and that Rural & General had twice failed to appear; she also noted that the second defendant had twice had orders made in her favour. 15 Ms Gurr considered that Mr Pratten's evidence that no-one else from Rural & General knew about the matter contradicted what was on the Fair Trading Tribunal's file and thus doubted the truth of his testimony. She could not accept that even if Mr Pratten was ill he would not have contacted his office. She made no finding as to the seriousness of Mr Pratten's illness but did not accept that the illness had led to his non-appearance at the hearing. 16 She expressly found that the evidence of the call (from Rural & General to the Tribunal) seemed to her to suggest that Rural & General, despite having received a notice of hearing, "did not intend to attend the hearing on 4 July 2001". 17 Critically, Ms Gurr then stated that the applicant Rural & General had failed to show that there were "exceptional circumstances" which would lead to the grant of a second rehearing. The application for a rehearing was therefore dismissed by her. 18 It is quite apparent that Ms Gurr relied on the note on the Tribunal file in relation to the telephone call; equally, she did not purport to read it to Mr Pratten, nor show it to him. From the account given by Ms Gurr of the content of the note on the file it does not appear to me to purport to be a full and accurate account of the telephone conversation; indeed, Ms Gurr identifies an error in it. Ms Gurr, however, did not seek to identify the maker of the note or the person who took the call (who, it safely can be presumed, was the same person). She did not seek to obtain from that person a fuller account of the conversation. Further, Ms Gurr relied on the fact that certain matters were not referred to in the file note to infer that they were not mentioned in the telephone conversation; thus her stating that "no mention was made of conjunctivitis…" It does not appear that there was any evidence that no such mention was made. 19 It was clear from Mr Pratten's evidence both before and after Ms Gurr informed him about that telephone call, that Mr Pratten had no direct knowledge of that telephone call and was not even sure that he did at some stage have knowledge of that call at all. He did not know who made the call, although from his knowledge of the business he could form a view as to the identity of the caller. Ms Gurr gave him no warning at all that she intended to refer to the conversation, nor any warning as to its contents nor any warning of any intention to rely on the fact that certain things were not mentioned in the file note. Once it became clear that Ms Gurr was likely to disbelieve Mr Pratten's evidence on the basis, principally if not solely, of the file note of the telephone conversation Mr Pratten sought a 15-minute adjournment so that he could call evidence from the person in his office whom Mr Pratten thought likely to have made the telephone call. 20 Whilst the Tribunal was not bound by the rules of evidence (s27(2)) it was a Tribunal of a kind in which the demands for procedural fairness, the more so by reason of the limitation on appeal, are strict (compare Kioa v West (1985) 159 CLR 550; Constable v Anvic Holdings Pty Ltd & Ors (unreported) [2001] NSWSC 544 per Master Malpass). 21 I do not accept the submission for the second defendant that Mr Pratten did not "press" his application for an adjournment; in the light of the course Ms Gurr indicated she would take he was in no position to do so. Nor do I accept the submission for the second defendant that there is no material difference between the phrases "special circumstances" and "exceptional circumstances". The legislation provides a test, relevantly that of "special circumstances". As a matter of ordinary English the term "exceptional circumstances" imposes a higher test. 22 The view to which I have come is that the plaintiff has satisfactorily established that Ms Gurr embarked upon the exercise of considering the second rehearing application in the context of a wrong application of a legal test, in not fairly providing the witness, Mr Pratten, with an opportunity to deal with that matter (the recorded note and the telephone call) which led, in the end, to what even counsel for the second defendant conceded was a leap in logic, namely, that by reason of the adverse view Ms Gurr formed of the credit of Mr Pratten, a conclusion was open that the plaintiff, as defendant in proceedings in the Fair Trading Tribunal, did not intend to attend. 23 The plaintiff was not permitted to call evidence it was entitled to call and wished to call in circumstances generated by the approach taken by Ms Gurr to the note of the purported telephone conversation. I do not see any substance in the submissions for the second defendant that in some way there was an obligation upon the plaintiff in these proceedings to adduce before this Court the file note. The proceedings before the Tribunal were thus flawed in the denial to the plaintiff of natural justice. The plaintiff is entitled to relief under s63. 24 I order that the orders made on 4 July 2001 and 18 October 2001 (as set out in the notice of order dated 26 October 2001 by the first defendant in proceedings number CO2000/8287 between the second defendant (as applicant) and the plaintiff (as respondent)) be set aside. 25 I order that the first defendant (differently constituted) rehear the plaintiff's application in the proceedings for a rehearing of those proceedings. 26 The second defendant is to pay the plaintiff's costs of these proceedings.

Last Modified: 12/16/2002 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.