Soma Lasers Australia (Int) Pty Ltd v 97 Compression Pty Ltd trading as Estetiko Skin and Laser

NCAT Appeal Panel|2024-08-15

024] WASCA 19 Texts Cited: None cited Category: Principal judgment Parties: Soma Lasers Australia (Int) Pty Ltd (Appellant) 97 Compression Pty Ltd trading as Estetiko Skin and Laser (Respondent) Representation: A Lennox, Director (Respondent)

Counsel: M Harker (Appellant)

Solicitors: Project Lawyers (Appellant) File Number(s): 2024/00116858 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 08 May 2023 Before: K Ross, Senior Member (8 May 2023) S Hanstein, General Member (27 February 2024) File Number(s): 2022/00402630 (previously GEN 22/47279)

Outline

This is an appeal challenging final orders of the Tribunal dated 27 February 2024, as well as an earlier order made on 8 May 2023 dismissing a summary dismissal application brought by the appellant. The final orders required the appellant to collect an Ultrasonic HIFU 4D device (the Device) and pay the respondent $31,790. The Device is used in the cosmetic industry for skin tightening.
Central to the outcome of the appeal is a question concerning the proper construction of a release contained in a Deed of Settlement (the Deed) entered into by the parties to the appeal in January 2022, along with questions as to whether the required extension of time in which to appeal from the summary dismissal decision should be granted and whether leave to appeal from the summary dismissal decision should be granted.
For the reasons that follow, we have decided to refuse to grant the required extension of time and dismiss the appeal.

Salient facts

The Device was purchased by the respondent from the appellant and delivered to the respondent in April 2020.
By May 2021, when proceedings concerning another item of equipment were brought in the Tribunal by the respondent against the appellant, the respondent had purchased five products from the appellant, one of which was the Device.
Another of these five products purchased by the respondent from the appellant was an item called a Diode SHR which was delivered to the respondent in August 2020.
In October 2020 the respondent rejected the Diode SHR, demanded a refund of the purchase price but this was refused by the appellant.
The respondent first commenced Tribunal proceedings against the appellant in May 2021 (GEN 21/20287). These proceedings were only concerned with an item of equipment called a Medi-Pulse Q Laser Therapy System. In those proceedings a refund of the purchase price of this equipment was sought by the respondent. An allegation was made in these proceedings that the products purchased by the respondent from the appellant, presumably, a reference to the five products mentioned, including, the Device, had occurred as a result of misleading and deceptive conduct, including false representations that the products were manufactured in Korea when, in fact, they were manufactured in China and that they were approved for use in Australia by the TGA.
A second proceeding was commenced by the respondent in the Tribunal on 5 October 2021 (GEN 21/41500). This proceeding was only concerned with an item of equipment called a Medi Franc Needling RF device. It was alleged that this had not been approved by the TGA.
On 6 October 2021 the Tribunal ordered that the appellant pay the respondent the refund it had sought in the proceedings commenced in May 2021. The respondent took enforcement proceedings in respect of this order and recovered part of the judgement sum through a garnishee order. Subsequently, it issued a statutory demand against the appellant to recover the balance of the judgement sum.
On 10 January 2022 the parties entered into the Deed.
The Recitals to the Deed were as follows: A. Soma conducts the business of importing, marketing, distributing and operating laser and other equipment in the beauty, anti aging and cosmeceuticals industry worldwide. B. Compression previously brought proceedings GEN 21/20287 in the NSW Civil and Administrative Tribunal (NCAT) against Soma (NCAT Proceeding 1). C. Soma denied all claims brought against it by Compression in NCAT Proceeding 1. D. Orders were made in the proceedings in NCAT Proceeding 1 on 06 October 2021 requiring Soma to pay $37,290 (Judgement Debt) to Compression and for Compression to return the Laser Machine. E. Compression commenced enforcement proceedings, including obtaining a Garnishee Order to recover the Judgement Debt. F $8,358 was garnished from Soma's ANZ bank account on 26 October 20 21 to satisfy a portion of the Judgement Debt. G. Compression issued a Creditor's statutory Demand dated 30 November 2021 seeking the balance of the Judgement Debt. (Creditor's Statutory Demand) H. Compression has also commenced a proceeding GEN 21/50589 against Soma (NCAT Proceeding 2). NCAT proceeding 2 is still on foot and Soma denies all claims made in that proceeding. I. The parties have agreed to settle NCAT Proceeding 1, NCAT proceeding 2, the Garnishee Order and the Creditor's Statutory Demand and all other Claims between them on the terms and conditions set out in this Deed.
Clause 2.1 of the Deed was in terms: Soma agrees to pay the sum of twenty eight thousand, nine hundred and thirty two dollars ($28,932) inclusive of GST ("Settlement Amount") to Compression in accordance with clauses 2.2 and 2.3 in full and final settlement of all Claims by Compression against Soma arising out of or in any way connected with NCAT Proceeding 1 and NCAT Proceeding 2.
Clause 4.1 set out the relevant release as follows: Upon payment of the Settlement Amount being made in accordance with clause 2, the parties absolutely and irrevocably release and discharge the other and the other's Associated Parties from and against all and any other Claims the parties may have or, but for the execution and enforcement of this deed, may have had against the other and/or the other's Associated Parties: (a) for any matter arising out of in any way connected to NCAT Proceeding 1; (b) for any matter arising out of in any way connected to NCAT Proceeding 2; (c) For any other matter described or referred to in the Recitals to this deed.
On 5 September 2022 the respondent commenced the Tribunal proceedings the subject of this appeal. It sought payment in the amount of $91,575 consisting of the total of the purchase prices paid for the Device and the Diode SHR.
With respect to the Device, it was first stated in the application that in connection with the purchase the respondent had been told the Device was designed and manufactured in South Korea but this was false as the machine was made in China.
It was then alleged that in or around May 2022 it was noticed that the machine was not working as it done so previously, unsuccessful attempts were then made to contact the appellant about these problems and further investigations led to the discovery that the Device was not listed for use in Australia by the TGA.
The application proceeded to outline claims for breaches of Australian Consumer Law, New South Wales (ACL NSW): first, a claim by falsely claiming the devices were manufactured in South Korea; secondly, a claim that the Device was not fit for purpose.
Importantly, the claim that the Device was not fit for purpose was founded upon matters that were revealed subsequent to the Deed. On the other hand, the claim concerning a representation as to the place of manufacture appears to have been an allegation made in the May 2021 proceedings, as mentioned above. As appears below, the final judgement in the proceedings (issued on 27 February 2024) was concerned only with a breach of the consumer guarantee concerning acceptable quality based upon events that occurred after the date of the Deed and the decision made no reference to any claim concerning a false representation about the place of manufacture.
In contrast to the fit for purpose claim in respect of the Device, the application in the proceedings concerning the Diode SHR set out quality issues which had emerged prior to the Deed.
The appellant applied for summary dismissal of the proceedings the subject of this appeal pursuant to s 55 (1) (b) of the Civil and Administrative Tribunal Act 2013 (NCAT Act). The application was heard on 24 February 2023 and the decision was issued 8 May 2023.
The application was successful in respect of the claim concerning the Diode SHR but unsuccessful in respect of the claim concerning the Device. Directions were made for the provision of Points of Claim and Points of Defence and the provision of statements and other documentary material.
No application was made by the appellant for leave to appeal the summary dismissal decision in so far as it concerned the Device. Leave to appeal was required pursuant to s 80 (2) (a) of the NCAT Act because the decision was an interlocutory decision.
The proceeding concerning the Device was heard on 6 December 2023 and the decision upholding the respondent's claim was issued on 27 February 2024.
In its decision the Tribunal outlined the respondent's case including that from about April 2022 the device did not seem to be operating properly and a decision was made to cease using the Device. The Tribunal referred to an expert report from a biomedical engineer dated 5 December 2022 relied upon by the respondent. This expressed the opinion that defects with the Device created an unacceptable risk of electrical shock to the operator and that the device was not working as specified. The Tribunal concluded that as a result of the Device not operating as intended from about mid-2022 it was satisfied that there had been a breach of the acceptable quality guarantee in s 54 of the ACL NSW, there had been a major failure and rejection by the respondent and the respondent was entitled to a refund in accordance with s 263 (4) of the ACL NSW.
On 28 March 2024 the appellant lodged a Notice of Appeal. The appeal was expressed as an appeal from the decision issued on 27 February 2024. It made no reference to the summary dismissal decision or to any challenge to the correctness of that decision.
The grounds of appeal were stated as being: 1 The Report was not conducted by a Professional Anaesthetic Device Engineer Eddie says this in his report and email that follows. Attached 2 The findings were normal wear and tear. 3 They did not allow us to view the device 4 Floor Stock Device is under warranty 12 months 5 Section 259 of the consumer Law is incorrect in this instance as there was a deed of settlement in place at the time of which [the respondent] says they reached out, we had a ban. We never received any email reaching out to us. 6 Was not mentioned that there was a Deed of Settlement in place so parties had a ban in communication. Not fair on Soma Lasers to get an outcome like this.
Contentions were made in the Notice of Appeal in support of an application for leave to appeal that the 27 February 2024 decision was not fair and equitable, was against the weight of evidence and that there was significant new evidence now available that was not reasonably available at the time of the hearing.
An appeal from the 27 February 2024 decision and the 8 May 2023 decision was required to be commenced within 28 days of notification of the decision or of the giving of reasons for decision, whichever was the later: Rule 25 (4) (c) of the Civil and Administrative Tribunal Rules 2014. Accordingly, the appeal from the 27 February 2024 decision was 2 days out of time. At the time when the appeal was lodged an appeal from the 8 May 2023 decision was already more than 9 months out of time. However, as will be seen below, the appeal did not become an appeal from the summary dismissal proceeding until 13 June 2024, which was just over 12 months out of time.

The new grounds of appeal

At a directions hearing in respect of the appeal on 13 June 2024 the appellant, in truth, abandoned all of its grounds of appeal concerning the 27 February 2024 decision. Leave was granted for it to amend its grounds of appeal to the following two grounds only, each of which related to the 8 May 2023 decision only: The grounds of appeal as amended are: The Tribunal erred in: - Its construction of the Deed of Settlement to the effect that it did not release Estetiko's claim that the Ultrasonix HIFU 4D was not of acceptable quality; and - Its conclusion that the Deed was unenforceable in relation to that device.

The summary dismissal decision of 8 May 2023 concerning the Device

In the 8 May 2023 decision the Tribunal concluded that the respondent's pursuit of the claim under the ACL NSW in respect of the Device was not barred by the Deed (at [27]). The Tribunal referred to submissions from the appellant that the release was of "all and any Claims", which could only be a reference to claims that were unrelated to the previous proceedings and that the only potential claims the respondent had were in relation to the other products supplied but not previously subject to proceedings.
The Tribunal rejected these submissions insofar as they concerned the Device and stated: 21 I am satisfied that the reference to "all and any claims" is wide enough to encompass claims which had crystallised at the date of the Deed. The applicant at that time had already rejected the Diode SHR, and according to own evidence, had purchased a replacement machine. I'm satisfied that the effect that the Deed was to release any claims which the applicant had in relation to the Diode SHR.
The Tribunal then turned to the question whether the appellant's argument based upon the release should be rejected because of the effect of s 64 of the ACL NSW, which section renders void a term of a contract to the extent that it has the effect of excluding, restricting or modifying specified provisions of the ACL NSW. The Tribunal referred to the decision in Maersk Crewing Australia Pty Ltd v CFMMEU [2021] FCAFC 231 (Maersk) and to the statement at [99]: It is open to parties to litigation, or presently contemplated litigation, to compromise the litigation in a binding way even when the subject matter of the case and is the enforcement of claim statutory entitlements.
As to this, the Tribunal reasoned: 25 However, I'm not satisfied that the [Device] was the subject of the litigation which was referred to in the Deed. Although the applicant complained in GEN 21/20287 that the purchase of 5 pieces of equipment was as a result of misleading and deceptive conduct by the respondent, the applicant did not seek any orders or redress in relation to anything other than the Medi-Pulse Q Laser Therapy System. I'm not satisfied that the [Device] was the subject of that litigation. At the time of the Deed there was no litigation or "presently contemplated litigation" in relation to that machine. 26 The parties could not contract out of the ACL protections in relation to the [Device]. It follows that the current proceedings may be maintained in relation to it.

Section 64 of the ACL (NSW)

In the ACL (NSW), s 64 provides: 64 Guarantees not to be excluded etc. by contract (1) A term of a contract (including a term that is not set out in the contract but is incorporated in the contract by another term of the contract) is void to the extent that the term purports to exclude, restrict or modify, or has the effect of excluding, restricting or modifying: (a) the application of all or any of the provisions of this Division; or (b) the exercise of a right conferred by such a provision; or (c) any liability of a person for a failure to comply with a guarantee that applies under this Division to a supply of goods or services. (2) A term of a contract is not taken, for the purposes of this section, to exclude, restrict or modify the application of a provision of this Division unless the term does so expressly or is inconsistent with the provision.

Written submissions concerning new grounds of appeal and hearing of appeal on 15 August 2024

Although the appellant was directed on 13 June 2024 to provide its submissions and any other documentary material concerning the new grounds of appeal by 27 June 2024, these were not supplied until 9 August 2024, which was not long before the hearing of the appeal which was fixed for 15 August 2024.
As a result of the late provision of the appellant's submissions concerning the new grounds of appeal, the respondent sought an adjournment of the hearing of the appeal. We heard the adjournment application at the commencement of the hearing on 15 August 2024. The adjournment was not opposed by the appellant. After discussion with the parties, both parties consented to an option outlined by the Appeal Panel, namely for the appeal to be determined on the papers following compliance with directions to be made for the provision of written submissions by the respondent and any reply submissions from the appellant.
Subsequently, written submissions from the respondent were received on 12 September 2024 and the appellant's submissions in reply were received on 26 September 2024.

Appellant's submissions

Oddly, the appellant began its written submissions by stating that it pressed Grounds 5 and 6 of the appeal, although it then proceeded to state that the only issues were those we have referred to above as the new grounds of appeal. Grounds 5 and 6 do not correspond with the new grounds of appeal. Rather, they seemed to have been directed to an issue addressed in the 27 February 2024 decision as to whether there had been a communication of rejection. As we have already mentioned, the appeal became an appeal which challenged the conclusions and outcome of the 8 May 2023 decision only.
As to the bringing of an appeal against the 8 May 2023 decision at this time, the appellant submitted that whilst it had raised the issue whether the proceedings were barred by the Deed at an interlocutory stage and that this had been determined by an interlocutory judgement, this did not prevent it from now appealing the order. In this regard, it relied upon passage from the decision of Handley JA in Tamworth Base Hospital v Durant [2000] NSWCA 209 (Durant) at [62] as follows: It is well established that a litigant need not appeal from an interlocutory order immediately but may await the final judgement, and in an appeal from that can challenge any interlocutory order which affected the result.
As to the construction of the release in the Deed, in its written submissions in chief the appellant merely repeated the argument presented in writing to the Tribunal in the summary dismissal application. However, in its reply submissions it identified the Tribunal's errors as the following: 1. Based upon the decision in Grant v John Grant & Sons Pty Ltd [1954] HCA 23; 91 CLR 112 (Grant), as a general principle of construction, a general release will be limited to those things that were in the contemplation of the parties at the time the release was given. The Tribunal misstated the principle by concluding that the release only applied to those claims that had "crystallised". 2. A claim in relation to the Device was within the contemplation of the parties. The before sale representations were known (that the Device had been manufactured in South Korea and was licensed by the TGA) and the appellant had previously been sued for the same thing. 3. In any event, as emerges from Wright v Lemon [2024] WASCA 19 (Wright) at [564] - [565] and Doggett v Commonwealth Bank of Australia (2015) 47 VR 302 at [63], Grant: …. is not authority the proposition that a release can only ever apply to matters then known to the parties. It is possible to enter into an arrangement which does settle "all conceivable further disputes."
Whilst these submissions concerning error by the Tribunal raise new arguments that were not before the Tribunal, we do not reject them on this basis because appellant does not seek to rely upon any new assertions of fact in support of the conclusions it contends for and the relevant facts are uncontroversial.
The submissions from the appellant in its written submissions in chief, which repeated those put to the Tribunal in support of its summary dismissal application, can be summarised fairly as follows: 1. Relying on what was said in Mount Bruce Mining Pty Limited v Wright Prosecting Pty Limited [2015] HCA 37; 256 CLR 104, at [46]-[51], it was submitted that the words in clause 4.1 should be construed by reference to what a reasonable businessperson would understand them to mean, having regard to the text, context and purpose of the agreement. It was contended that the words of cl 4.1 were broad and all-encompassing, indicating an intention to capture not just the Tribunal proceedings referred to, but others. 2. Support for the view was said to be found in the definition of "Claim" in the Deed: All or any claim, liability, damage, loss, cost or expense of any nature whatsoever, whether present or future, certain (or contingent) ascertained or unascertained or sounding only in damages whether in the contemplation of the parties at the Execution Date or not. 1. Since paragraph (c) of cl 4.1 referred to the recitals, reference was made to paragraph I with its reference to … "all other Claims between them on the terms and conditions set out in this Deed". 2. It was suggested that the words "all other Claims" could only refer to matters unrelated to the previous proceedings otherwise those words would serve no purpose. Chapmans Ltd v Australian Stock Exchange Ltd [1996] FCA 474; 67 FCR 402 at 411 was cited in support of that proposition. The only other potential claims known to the parties when they entered the Deed were said to relate to other products supplied by the appellant, namely the Diode SHR and the Device. 3. The principle established by Grant that the general words of a release are confined by what was in the contemplation of the parties at the time of the Deed, did not warrant reading the Deed to exclude the claims the subject of these proceedings. "The claims were known." Apart from the reference to the claims being known, this proposition from the appellant was not otherwise expanded upon.
As to the s 64 issue, the appellant repeated what it had put to the Tribunal below, including a reference to the passage from the decision in Maersk set out above. However, in its submissions to us it added that the scope for permissible contracting out was not confined to litigation or presently contemplated litigation as set out in the passage from Maersk, parties could agree to settle a dispute at a time when litigation was not yet contemplated.
The appellant referred to Brighton Australia Pty Ltd v Multiplex Constructions Pty Ltd [2018] VSC 246 at [121]. The full wording of that paragraph is as follows: The ACL contemplates that the statutory norm will be enforced through the statutory remedy provided by s 236 of the ACL. As the statement by Lockhart J in Henjo explains, it would be contrary to public policy for a contract to deny 'a statutory remedy for offending conduct under the Act'. Accordingly, the 'principle of public policy operates to preclude reliance on the contract to defeat the statutory remedy'. (emphasis original, citations omitted)
The appellant submitted that there was an equally important public policy being the interest in settling disputes. It set out following passage from Viterra Mall Pty Ltd v Cargill Australia Limited [2003] VSCA 157 (Viterra), at [357]: …. although a person cannot contract out of liability for fraud or deceit, or out of certain statutory rights or entitlements, it generally remains possible for parties to a dispute about fraud, deceit or breach of such statutory rights to compromise the dispute. The distinction between the compromise of a dispute, through a settlement agreement, and the impermissible bargaining away of liability for fraud, or of statutory rights, is well recognised. As this Court observed in MBF Investments, the public policy considerations applicable to an attempt to contract out of a statutory duty in advance are different from those that apply to a release contained in a deed executed to resolve a dispute about the operation of the relevant statutory provision.
It was submitted that whether the Deed was properly characterised as a settlement of the dispute was a question of a construction of the Deed: see Wardman v Macquarie Bank Limited [2023] FCAFC 13 (Wardman) at [205].
The appellant submitted that the question was whether, on a proper construction of the Deed, the release was given in settlement of the dispute irrespective of whether the dispute was the subject of present or contemplated litigation (written submissions in reply at [17]). We understood that the appellant submitted that this was the case.

Respondent's submissions

The respondent made the following material submissions: 1. The decision of 8 May 2003 had not been the subject of an appeal and the application had proceeded to a final hearing. Relying upon passages from the judgement of Handley JA in Durant at [64] and [66], in failing to appeal the interlocutory decision the appellant had wasted Tribunal resources and hindered the Tribunal in resolving the issues justly, quickly and cheaply, in accordance with the principle in s 36 of the CAT Act. 2. Clause 4.1 referred the to the first and second proceedings, and neither that clause nor the recitals made any reference to the Device. It was contended that, at the date of the Deed, no claim had crystallised in relation to the Device and there was no contemplated litigation in relation to that Device at that time. Operating issues were said to have arisen in April 2022 after which it was said the machine was inspected and found to be faulty. The wording of the Deed was specific and reflected an intention to deal with the first two proceedings, the garnishee order and creditor's statutory demand. 3. Relevant passages from Grant were set out, including the following passages from the judgement of the plurality (Dixon CJ, Fullagar, Kitto and Taylor JJ at [129] to [130]: From the authorities which have already been cited it will be seen that equity proceeded upon the principle that a releasee must not use the general words of a release as a means of escaping the fulfilment of obligations falling outside the true purpose of the transaction as ascertained from the nature of the instrument and the surrounding circumstances including the state of knowledge of the respective parties concerning the existence, character and extent of the liability in question and the actual intention of the releasor. And at [131]: The question is whether upon a proper interpretation of the deed the general release clause should be restrained to the matters in dispute within the meaning of these recitals. The question depends primarily on the application of the prima facie canon of construction qualifying the general words of a release by reference to particular matters which recitals show to be the occasion of the instrument. But it is also effected by the general tenor of the deed. It is unnecessary to say more about the canon of construction or to discuss further the contents of the deed. As to the first all that remains is to apply the principles that prima facie the release should be read as confined to the matters forming the subject of the disputes which the deed recites. 1. The following passage from Sarina v Fairfax Media Publications Pty Ltd [2018] FCAFC 190 (Sarina) was also set out (at [20]): Thus, where, as often occurs, a deed recited that the parties have had a particular dispute, but the clause creating the release did not expressly confine its operation to the dispute mentioned in the recitals, the principles of construction at common law read down the wide words of the release to apply only to the dispute in the recitals. Indeed, Dixon CJ, Fullagar, Kitto and Taylor JJ explained (Grant 91 CLR at 123 and 131) that the common law principle was that a written instrument expressed in general terms (be it a deed or statute) had to be construed having regard to the circumstances to which the instrument must have intended to apply. This in substance accords with the modern principles applicable to the construction of contracts and deeds. 1. If the Deed had been intended to apply to release all claims under the ACL (NSW) relating to the machines purchased by the respondent from the appellant, being machines that were not the subject of current or contemplated, The Deed should have been expressly worded to this effect. 2. The exception referred to in Maersk did not apply in this instance as the Device was neither the subject of litigation nor the subject of contemplated litigation at the date of the Deed.
The respondent also submitted that the appellant had not raised any question of law. However, whether a question of law had been raised was not the test to be applied to the appeal from the interlocutory decision, although it might be relevant to the question of leave. In any event, in raising the questions about the construction of the Deed as appears from its submissions, these did raise questions of law: Minister for Immigration and Border Protection v SZVFW [2018] HCA 30; 264 CLR 541 per Edelman J at [127].
The respondent also made submissions about new facts in respect of the negotiation of the Deed: at [33]-[35]. These concerned evidentiary matters that were available at the time of the interlocutory hearing but were not presented to the Tribunal. They were said by the appellant to be controversial and if they had been adduced at that hearing would have led the appellant to adduce its own evidence about these matters. In these circumstances, we are not prepared to accept such new evidence from the respondent.

Extension of time to appeal the summary dismissal decision

In the NCAT Act, s 41 provides the Tribunal with the power to extend time: (1) The Tribunal may, of its own motion or on application by any person, extend the period of time for the doing of anything under any legislation in respect of which the Tribunal has jurisdiction despite anything to the contrary under that legislation. (2) Such an application may be made even though the relevant period of time has expired.
The relevant considerations as to the exercise of that discretion were set out in Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 (Jackson) at [22]: (1) Is there proof that strict compliance with the rules will work an injustice on the applicant? (2) In the context of a pending appeal, the expiration period for the appeal gives a vested right to retain the decision in question with the consequence that the time for appealing should not be extended unless the proposed appeal has prospects of success. (3) It will usually be necessary to consider: (a) the length of the delay, (b) the reason(s) for the delay, (c) the applicant's prospects of success, i.e. whether there is a fairly arguable case, and (d) the extent of any prejudice suffered by the opponents. (4) If the explanation for the delay is less than satisfactory and/or if the opponent has a substantial case of prejudice, it may be necessary for the applicant to show substantial merit, not just that it is fairly arguable.
The delay in bringing the appeal against the 8 May 2023 interlocutory decision was very substantial. We take it that the explanation for the greater part of the delay was that the appellant chose to await the final decision on the merits. However, even after the final decision was known, there was an additional, unexplained delay of about two and a half months before a challenge was brought to the interlocutory decision. That additional delay itself was, clearly, inconsistent with the principles in s 36 of the NCAT Act concerning the quick and cheap resolution of proceedings.
Plainly, the challenge to the summary dismissal decision was pointless in the absence of an appeal against the final decision as well. There was only a short delay in commencing the appeal from the final decision and that delay was insufficient to warrant a refusal of the required extension of time to appeal should we have been of the opinion that the required extension of time in which to appeal from the interlocutory decision should be granted.
However, we must return to the question whether the required extension of time in which to appeal from the interlocutory decision, including an application for leave to appeal, should be granted.
The appellant relied solely upon the statement in Durant about entitlement to challenge an interlocutory order in an appeal from a final judgement referred to above. However, it said nothing in its reply submissions about the desirability of promptly seeking to appeal, including an application for leave to appeal, from an interlocutory decision that if overturned on appeal would avoid the need to proceed with the hearing on the substantive merits or which appeal would, as in this case, prolong the resolution of the proceedings.
As to this latter question, the additional remarks of Handley JA in Durant, referred to in the respondent's submissions seem to us to be of significance, especially, in the context of proceedings in the Tribunal, having regard in particular to the whole of s 36 of the NCAT Act. Those remarks were as follows: 62 The orders were interlocutory, both on principle and on the authority of Birkett v James [1978] AC 297, 317, and an interlocutory appeal lay as of right to a Judge of the Common Law Division. However it is well established that a litigant need not appeal from an interlocutory order immediately but may await the final judgment, and in an appeal from that can challenge any interlocutory order which affected the result. See Crowley v Glissan (1905) 2 CLR 402; Bunning v Cross (1978) 141 CLR 54, 82; National Employers Mutual General Insurance Association d v Manufacturers Mutual Insurance Ltd (1989) 17 NSWLR 223, 231, 237-8. The challenge to the Master's orders in the appeal from the final judgment is formally competent. 63 The trial took place almost three years after the Master's orders and lasted four days. If the challenge to the Master's orders succeeded, that court time, and the very substantial costs incurred in the trial, would have been wasted. 64 Although the appellants' challenge to the Master's orders is formally competent, and there is no res judicata estoppel, it does not follow that an appellate court will uphold grounds of appeal, after trial, which if pressed in an interlocutory appeal would have prevented that trial taking place. 65 In Ramton v Cassin (1995) 38 NSWLR 88 this Court, by majority, refused leave to appeal from a decision of the District Court extending the time for the commencement of proceedings under the Motor Accidents Act. The majority, for reasons given by Cole JA, held that any challenge to an interlocutory order of this kind should be deferred and included, if necessary, in an appeal from the final judgment. Kirby P dissented. 66 The inconvenience of the principle endorsed by the majority is manifest. An erroneous interlocutory order which allows proceedings to be commenced or continued should, if possible, be corrected before trial, not later. Where the proceedings are pending in the District Court or were heard by a Divisional Judge in the Supreme Court, the requirement for leave enables this Court to determine, summarily and without undue delay or expense, whether an interlocutory appeal can be brought. 67 Leave will be refused unless the proposed appeal has substantial prospects of success. Where leave is refused, or an interlocutory appeals fails on the merits, a renewed challenge after final judgment is unlikely to succeed, and may be barred either by an issue estoppel or as an abuse of process. Where leave is granted and the appeal is allowed the parties will be saved the costs of the trial and court time will not be wasted. 68 The Court has not adopted the practice favoured by the majority in Ramton v Cassin. Leave to appeal is almost invariably sought by defendants who wish to challenge interlocutory orders of this kind and is readily granted in proper cases. The position is quite different where reversal of an interlocutory order would not avoid a first trial, or require a second trial. In this class of case the Court has been frugal in the grant of leave for the reasons given by Jordan CJ in In the Will of Gilbert (1946) 46 DR (NSW) 318, 322-3. 69 These defendants did not appeal from the Master's orders to a Judge of the Common Law Division. Such an appeal could have been heard and determined without delaying or disrupting the trial. 70 A defendant aggrieved by an interlocutory order allowing proceedings to be commenced or continued, who has a proper opportunity to challenge that order before trial but allows the action to go to trial, may be held to accept the correctness of the order so as to be estopped from challenging it later in an appeal from the final judgment. Such a defendant may be taken to represent to the plaintiff that he accepts the correctness of the interlocutory order and has decided not to challenge it.
Handley JA went on to address the possibility of an estoppel preventing the raising of an appeal from the interlocutory order and made reference to the prolongation of litigation as a matter that could provide the necessary detriment to a respondent: at [71].
We regard these matters referred to by Handley JA as significant matters operating against the grant of an extension of time in which to appeal the interlocutory decision, all the more so in this case where the appellant came to abandon all grounds of appeal concerning the reasons for decision in the final judgement and then prolonged the final resolution of the proceedings by belatedly seeking to appeal the interlocutory decision. There is real prejudice to the respondent in the course that has been taken, as well as a broader concern about delay in the resolution Tribunal proceedings.
We must also give consideration in this context to the merits of the appeal, including the merits of an application for leave to appeal from the interlocutory decision.
The principles concerning the grant of leave to appeal from an interlocutory decision in the Tribunal are well-established. Leave should not be granted unless a substantial injustice would result and the decision is attended by sufficient doubt to warrant it being reconsidered: Infinity Security Group Pty Limited v Commissioner of Police, NSW Police Force [2023] NSWCATAP 173 at [29]- [30]; Champion Homes Pty Limited v Guirgis [2018] NSWCATAP 54 at [35].
For the reasons now given we do not consider that the interlocutory decision is attended by sufficient doubt to warrant it being reconsidered. As explained, this is not to say that we agree with the Tribunal's reasoning concerning the construction of the release in the Deed. In particular, we do not agree with the Tribunal's view that the release was confined by what claims had crystallised at the time of the Deed-a term which the Tribunal did not explain.
We do, however, consider that the Tribunal's decision that the Deed did not bar pursuit of the claim the subject of the 27 February 2024 decision was correct.
As to the construction of the release in the Deed, although awkwardly drafted, we do not consider that clause 4.1 contained a generally worded release of all and any claims between the parties, whether present or future, ascertained or unascertained and whether or not in contemplation of the parties.
Commencing with the text of clause 4.1 it is sufficiently clear that the claims the subject of the release were intended to be claims in respect of described matters. This is because the language in clause 4.1 did not stop at the words "from and against all and any Claims the parties have or, but the execution and enforcement of this deed, may have had against the other…" but proceeded to limit the released claims as being those "for any matter" as outlined in clause 4.1 (a)-(c). The release did not, for example, state that the release included, but was not limited to, claims for the matters referred to in clause 4.1 (a)-(c).
In taking that approach to the drafting of clause 4.1, it appears to us to make no sense to disregard this limitation by resort to the terms of Recital I, in conjunction with the definition of "claim" (we note not a definition for "Claims"), otherwise the additional delineation of the claims set out in clause 4.1 (a)-(c) would be otiose. For that reason, it is not sensible to construe clause 4.1 (c) as incorporating a reference to the wide definition of "claim" through the reference in Recital I to the parties agreement to settle "all other Claims between them".
Furthermore, to construe the release as a general release of all and any claims between the parties, present or future, whether contemplated or not, is inconsistent with the consideration for the payment expressed in clause 2.1, namely that it is in full and final settlement of claims "arising out of or in any way connected with NCAT Proceeding 1 and NCAT proceeding 2." Giving effect to a limitation of the claims to those "for" the described matters in clause 4.1 (a)-(c), in the manner we have indicated, is consistent with clause 2.1 and allows these clauses to be read in harmony with each other.
Having regard to these matters and the language used, we consider that the matter referred to in clause 4.1 (c) is a reference to any matter (the subject of claims) referred to in any of Recitals B to H. These are the recitals that are capable of providing the matters the subject of claims against the other in accordance with the tenor of clause 4.1 and clause 2.1. Recital A is not such a matter, nor is Recital I, because the matter dealt with in Recital I is the settlement agreement reached by the parties. It seems unlikely the parties intended to release each other from any claims, present or future, about the settlement agreement.
Accordingly, we do not construe the release as one consisting of wide general words.
If we be wrong about this construction, as a consequence of the application of the principles of construction of a wide generally worded release, as set out in Grant, we would not construe clause 4.1 in the manner contended for by the appellant so as to encompass the release of all claims between the parties, present or future, whether contemplated or not, including future claims for breach of the acceptable quality guarantee in respect of the Device arising from circumstances that were unknown to the parties at the time of the Deed.
We have referred above to relevant passages from the decision in Grant. We have also referred to the appellant's reliance upon passages in the Wright decision.
In Wright, Buss JA, after referring to the judgment of Leeming JA (Bell CJ agreeing) in Reid v Commonwealth Bank of Australia [2022] NSWCA 134; (2022) 109 NSWLR 149, stated: So, there are three principles to be discerned from Grant v John Grant. First, as a matter of construction, wide general words in a release of obligations should be restrained by the particular occasion mentioned in any recitals. Secondly, as a matter of construction, wide general words in a release of obligations may be limited by the matters that were in the contemplation of the parties when the release was given. Thirdly, in equity, a releasee may not rely upon wide general words in a release of obligations as a mechanism for avoiding the fulfilment of obligations that fall outside 'the true purpose of the transaction as ascertained from the nature of the instrument and the surrounding circumstances including the state of knowledge of the respective parties concerning the existence, character and extent of the liability in question and the actual intention of the releasor' (Grant v John Grant at 129 ‑ 130). However, it must be emphasised that, notwithstanding the first and second principles, it is possible for a release to extend to claims of which the releasor is unaware. Further, the third principle will not apply if it is plain that the parties intended that wide general words in a release of obligations should include all conceivable further disputes between them in relation to a particular subject matter or generally, whether or not the facts underpinning the further disputes were in existence or known to one or both of the parties when the release was given. See, in addition to the cases that I have already cited, the more recent decisions in Wardman v Macquarie Bank Ltd;[73] RW & ME Smith Pty Ltd v Boral Resources (Vic) Pty Ltd;[74] Protheroe v Protheroe.[75]
In our view, an application of each of the two principles of construction concerning a wide generally worded release leads to the same outcome in this case. As to the first principle, the recitals clearly reveal claims the subject of NCAT Proceedings 1 and 2, the Garnishee Order and the creditor's statutory demand as particular occasions for the Deed (as also does clause 2.1). Arguably, so also does the reference in Rectal I to "all other Claims between them" but future claims based upon circumstances then unknown to the parties upon could not be regarded as a particular occasion for the Deed.
The same applies to the second principle concerning claims within the contemplation of the parties at the time of the Deed.
We do not consider that the relevant language is sufficient to lead to a construction that the parties intended a release of such broad effect as to extend to claims of which the parties were unaware due to events giving rise to the claim not yet having occurred, thereby, extending to the specific claim dealt with in the 27 February 2024 decision, as well as, potentially, to claims in respect of equipment yet to be supplied. Nothing in the release, the recitals or the definition of "claims" spoke in such broad terms.
We did not understand the appellant on the appeal to go so far as to contend that the specific claim for breach of the acceptable quality guarantee in respect of the Device, the subject of the decision on 27 February 2024, was known to the parties or was within the contemplation of the parties. Such a contention would have been unsupported by the facts.
Rather, we understood the contention to be that the potential for unspecified claims about the Device were known to the parties or within their contemplation, as well as specific claims for misleading conduct about the origin of manufacture and about TGA approval. However, even if this be the case, for the reasons we have given, this was not sufficient to conclude that the claim dealt with in the 27 February 2024 decision had been released.
If, contrary to our views on the construction of the release, it was a release of future claims that were unknown to the parties and not in contemplation of the parties because of events that had not yet occurred, then such a release would be void, to the extent it applied to such claims, by reason of s 64 of the ACL.
Plainly, as we have explained, the claim dealt with in the 27 February 2024 decision was not a claim that was contemplated at the time of the Deed. As indicated, the appellant sought to overcome this problem by a submission that s 64 did not apply to the settlement of a dispute, irrespective of whether the dispute was the subject of present or contemplated litigation.
However, plainly, at the time of the Deed there was no dispute as dealt with in the 27 February 2024. As we have already mentioned, the events giving rise to that dispute had not yet occurred at the time of the Deed.

Outcome

In view of what we have said about the delay in commencing the appeal and the correctness of the Tribunal's decision it follows that the application for the required extension of time in which to appeal the 8 May 2023 decision should be refused, with the consequence that the appeal should be dismissed. For the reasons we have given it is not in the interests of justice that the required extension be granted.
It also follows from our reasons that had we granted the required extension of time we would have refused leave to appeal from the 8 May 2023 decision. It also follows that had we granted such leave to appeal we would have dismissed the appeal.

Costs

At first instance, as the amount claimed was more than $30,000 costs were governed by r 38 of the Rules and not by s 60 of the NCAT Act. As a result, it was not necessary to show special circumstances warranting an order for costs and the normal position is that costs follow the event in the absence of disentitling conduct. We note that there was no order for costs at first instance.
The effect of r 38A is that the issue of costs in relation to an appeal is governed by the provisions that were applicable at first instance.
Since neither party has had an opportunity to make submissions in relation to costs, the orders should include directions to cater for any application for costs.
Any such submissions should include an indication as to whether it is agreed that power to dispense with a hearing provided by s 50(2) of the NCAT Act should be exercised so that costs can be determined on the papers, without the need for a further hearing.

Orders

For the reasons set out above, the following orders are made. 1. An extension of time in which to appeal the Tribunal's decision of 8 May 2023 is refused. 2. The appeal is dismissed. 3. If the respondent wishes to make an application for costs, written submissions (not exceeding five pages) and any relevant supporting evidence are to be provided, to the Tribunal and the appellant, within 14 days of the date of these orders. 4. Any submissions (not exceeding five pages) and any relevant supporting evidence in response are to be provided by the appellant, to the Tribunal and the respondent, within the following 14 days. 5. Any submissions (not exceeding two pages) and any relevant evidence are to be provided by the respondent, to the Tribunal and the appellant, within the following seven days.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar 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. Decision last updated: 15 November 2024

Australian Consumer Law Civil and Administrative Tribunal Act 2013(NSW)

(2022) 109 NSWLR 149

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