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

CATCHWORDS : Grant of indemnity certificate pursuant to s6 Suitor's Fund Act 1951 LEGISLATION CITED : Suitors Fund Act 1951 Australian Postal Commission v Dao (No 2) (1986) 6 NSWLR 497 Director-General of Social Services v Chaney (1980) 47 FLR 80 Full Brick Homes Pty Ltd v Consumer Claims Tribunal (NSWSC, unreported, 13 February 1997) CASES CITED : Krslovic Homes v Timothy Sparkes and Ors [2004] NSWSC 374 Mir Brothers Development Pty Limited v Atlantic Constructions Pty Limited (1985) 1 NSWLR 491 R v Hookham [No 2] (1993) 32 NSWLR 345 Re Oscar (2002) NSWSC 887 RURAL & GENERAL INSURANCE LIMITED (Plaintiff)

v PARTIES : FAIR TRADING TRIBUNAL OF NSW (First Defendant)

PATRICIA DAVIE PTY LTD T/AS HARVEY WORLD TRAVEL (Second Defendant) FILE NUMBER(S) : SC 13629 OF 2001 S Gardiner COUNSEL : (Applicant/second defendant)

SOLICITORS : Spanko Soulos & Co (Applicant/second defendant)

• 1 - [2004] NSWSC 396 Ex tempore: revised IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

RURAL & GENERAL INSURANCE LIMITED (Plaintiff)

FAIR TRADING TRIBUNAL OF NSW (First Defendant)

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

JUDGMENT: Grant of indemnity certificate pursuant to s6 Suitor's Fund Act 1951 1 By notice of motion filed on 4 February 2004 Patricia Davie Pty Limited trading as Harvey World Travel seeks an order that it be granted an indemnity certificate pursuant to s6 of the Suitors Fund Act 1951. The application is supported by an affidavit of Michael James Soulos, solicitor, sworn 28 January 2004. 2 In the matter in which the application is made I delivered a judgment on 13 December 2002 ([2002] NSWSC 1197) in proceedings between Rural & General Insurance Limited as the plaintiff and The Fair Trading Tribunal of New South Wales as it was then known, as the first defendant, and this present applicant as the second defendant. 3 The plaintiff in those proceedings was successful and an order was made that the second defendant, the present applicant, pay the costs of the proceedings leading to the judgment to which I have referred. 4 Section 6(1) of the Suitors Fund Act is in the following terms: 6(1) If an appeal against the decision of a court:

(a) to the Supreme Court on a question of law or fact, …

succeeds, the Supreme Court may, on application, grant to the respondent to the appeal or to any one or more of several respondents to the appeal an indemnity certificate in respect of the appeal.

5 The granting of an indemnity certificate entitles the applicant, subject to the mechanisms contained in the legislation, to payment of a sum of money in respect of which a limit has been set by the statute in relation to appeals to this Court.

6 There are essentially six matters for consideration in an application of this kind. 7 First, were the proceedings before me an "appeal". Section 2 of the Act defines an "appeal" as including any motion for a new trial and any proceeding in the nature of an appeal. Whether a proceeding can be characterised as an "appeal" as has been the subject of judicial pronouncement. See, for example, Full Brick Homes Pty Ltd v Consumer Claims Tribunal (NSWSC, unreported, 13 February 1997), a judgment of Rolfe J, who found, (p 8), that an application seeking relief against the relevant consumer protective tribunal, in particular a declaration that an order it had made, was void for want of natural justice, which is very closely akin to the outcome in the present matter, constituted an appeal for the purposes of the Suitors Fund Act. See also Re Oscar (2002) NSWSC 887 at paras [7]-[10] per Hamilton J and Krslovic Homes v Timothy Sparkes and Ors [2004] NSWSC 374 at [35]-[42] per Shaw J. 8 The second consideration is whether it is an appeal against a decision. There can be no question that that which was the subject of consideration in the proceedings leading to my judgment in December 2002 can be so characterized: see Director-General of Social Services v Chaney (1980) 47 FLR 80 at 100 where Deane J found that "decision" is a word of indeterminate meaning, capable of at least three possible interpretations, depending on the context: "(1) the adoption of a conclusion, without more; (2) the adoption of a conclusion and consequent making of interlocutory orders or determinations; and (3) the adoption of a conclusion together with a finally dispositive determination or order". 9 See also R v Hookham [No 2] (1993) 32 NSWLR 345 at 346 per Priestly JA: "The reasoning behind the Act must be to the general effect that the court system, in what has happened prior to the appeal being upheld, has made a mistake and that there will at least be some circumstances in which cost caused by the fault of the system should not be visited on the respondent". 10 In the light of the three matters to which Deane J referred, and the policy considerations and legislative intention to which Priestly JA adverts, the orders with which I was in 2002 concerned constitute a decision.

11 The third consideration is whether the decision was that of a court. Section 2 of the Suitors Fund Act provides that a court includes such tribunals or other bodies as are prescribed.

12 The relevant tribunal is now known as the Consumer Trader and Tenancy Tribunal. Whilst I have no material before me that in this case it was a prescribed tribunal, one would hardly think, given the wide application of the Act that it would be other than a prescribed tribunal. In any event the approach of McHugh J in Australian Postal Commission v Dao (No 2) (1986) 6 NSWLR 497 at 56 is informative where his Honour said: "The correct approach is for the Court to ask itself whether, bearing in mind the general purpose of the Suitors' Fund Act, Parliament must be taken to have intended that the Tribunal should qualify as a court?"

This inevitably leads to the conclusion that the entity from which the appeal was brought was a court. See also Mir Brothers Development Pty Limited v Atlantic Constructions Pty Limited (1985) 1 NSWLR 491 at 494 per Kirby P and Samuels J. 13 The fourth matter for consideration was whether the appeal was on a question of law or fact. In that regard in Mir Brothers at 498 E-F Kirby P and Samuels J said: "Although what is a "decision on a question of law" has been the subject of much jurisprudence … it is essential to interpret the phrase, having regard to the already expressed purposes of the section. These include the protection of litigants who fail on appeal because a court is held to have erred in the application of the law".

14 My finding in para [22] ([2002] NSWSC 1197), in relation to the denial to the plaintiff of natural justice as set out in para [23], constitutes the determination of an issue of law.

15 The fifth consideration is whether or not there is any disqualifying aspect. I raise this particularly in the instant application as the applicant is a corporation. Section 6(7) of the Act expressly enacts as follows: 6(7) An indemnity certificate shall not be granted in favour of: (a) the Crown, (b) a corporation that has a paid-up share capital of two hundred thousand dollars or more, or (c) a corporation that does not have such a paid-up share capital but that, within the meaning of section 50 of the Corporations Act 2001 of the Commonwealth, is related to a body corporate that has such a paid-up share capital, unless the appeal to which the certificate relates was instituted before the commencement of the Legal Assistance and Suitors' Fund (Amendment) Act 1970. 16 In respect of this matter I have no material before me, save for Mr Gardiner's assurance, that the applicant company would fall within either s6(7)(b) or (c). 17 It can easily be inferred that the applicant company operates as a franchisee of Harvey World Travel, and without more, one could conclude that it would not fall within related bodies corporate as defined in section 60 of the Corporations Act 2001 (Cth): 50 Related bodies corporate Where a body corporate is: (a) a holding company of another body corporate; or (b) a subsidiary of another body corporate; or (c) a subsidiary of a holding company of another body corporate; the first-mentioned body and the other body are related to each other. 18 I am prepared to accept Mr Gardiner's statement in relation to his client company not falling within the meaning of s6(7)(b) or (c). 19 The sixth matter is the overriding discretion which was considered by Priestly JA in Hookham, above, at 436 where his Honour said: "Something however, it seems to me, must follow from the very nature of the power which the court is given by the Act. That power includes power to indemnify, within the limits provided by the Act, an unsuccessful respondent to an appeal against the costs that the respondent incurred in resisting the appeal. Absent the power given by the Act, the court would ordinarily order an unsuccessful respondent to pay the costs of the appeal and leave the respondent to bear the respondent's own costs. The Act gives the court the power to change this otherwise ordinary outcome of a successful appeal.

The reasoning behind the Act must be to the general effect that the court system, in what has happened prior to the appeal being upheld, has made a mistake and that there will be at least some circumstances in which cost caused by the fault of the system should not be visited on the respondent".

20 Kirby J in Mir Brothers, above, at 499 B and C, also made observations as for the purpose of the Act being to protect litigants who, for no fault of their own, would otherwise suffer the burden of costs by reason of what are found to have been, errors of law in subordinate courts.

21 I understand that the proceedings in the CTTT have been resolved. I need not know in what way as that in my view does not affect the exercise of discretion or the antecedent five components having been established. 22 The view to which I have come is that in the light of the position in which this applicant found itself as the second defendant in the substantive appeal, it was, to put it shortly, by the outcome of that appeal, deprived of the benefit of orders in its favour in the tribunal and consequently had the order for costs made against it. 23 In those circumstances, bearing in mind the authorities to which I have referred on the subject of discretion, I accordingly order that Patricia Davey Pty Limited trading as Harvey World Travel, the applicant second defendant in these proceedings be granted an indemnity certificate under section 6 of the Suitors Fund Act 1951 in respect of the appeal determined by me on 13 December 2002 and of the proceedings before me today.

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