TAG Aviation Pty Ltd v Kirk

The Appeal

1. At the hearing on 16 February 2017, TAG sought to amend its notice of appeal in various ways. Mr Kirk did not oppose the amendment of the grounds of appeal in section 5B of the notice and we allowed TAG to amend those grounds of appeal.
2. The appellant also sought to amend the notice of appeal to seek leave to appeal on grounds other than a question of law. Mr Kirk opposed this amendment. We heard the parties on this issue and reserved our decision, indicating that we would address it in our reasons for decision, to the extent necessary. In light of the decision we have reached, it is unnecessary to determine whether to allow TAG to amend in this way.
3. In its amended notice of appeal, TAG identified its ground of appeal as follows: "1. The Tribunal fell into error by finding that the relevant contract was incomplete as it did not include a time for completion. 2. The Tribunal fell into error by finding that the respondent was entitled to rescind the contract. 3. The Tribunal fell into error by assessing the quantum of compensation to the appellant for recession of the contract without evidence."
4. TAG sought the following orders on the appeal: "1. That the decision of the Tribunal dated 20 October 2016 be set aside; 2. That the application to the Tribunal brought by Philip Kirk be dismissed."
5. Mr Kirk filed a reply to appeal on 25 November 2016 in which he supported the Tribunal's decision by reference to a number of paragraphs in the written reasons for decision.
6. Each of the parties filed written submissions in support of their respective positions. These submissions were accompanied by copies of the evidence provided to the Tribunal at the original hearing and a copy of the sound recording of that hearing, with some short portions transcribed.
7. At the conclusion of the hearing, we formed the view that: 1. the Tribunal below erred in law in relation to its conclusion that the contract was incomplete, as contended under the first ground of appeal; and 2. the decision at first instance should be set aside and the proceedings remitted for rehearing in the Consumer and Commercial Division.
8. In these circumstances, it is unnecessary for us to deal with the grounds 2 and 3 in these reasons.

First Ground of Appeal

1. As to the first ground of appeal, TAG's submissions can be summarised as follows: 1. The absence of an "end date" for a contract does not, of itself, mean that there was no contract and the Tribunal was incorrect to conclude at [20] that "the contract will fail for incompleteness". 2. The fact that the appellant was unable to specify a particular date for delivery due to the process involved in acquiring parts and manufacturing the gyrocopter did not mean the contract was unenforceable. Nor was it void or voidable on this basis.
2. Mr Kirk submitted, in substance, that the grounds of appeal, including ground 1, did not identify any questions of law. However, he did contend that one of the questions that the Tribunal had to determine was whether there was a binding contract. In this regard, Mr Kirk submitted that the Tribunal was correct in its decision that there was no such contract, because the parties had not agreed an essential term of the contract, namely the time for performance. Thus, there was no error by the Tribunal at first instance.
3. During the course of oral submissions, we raised with the parties a number of authorities that they had not referred to in their written submissions but which appeared to us to be relevant to the first ground of appeal.
4. In particular, we drew attention to the principle referred to by Dixon J (as he then was) in Reid v Moreland Timber Co Pty Ltd (1946) 73 CLR 1; [1946] HCA 48 where his Honour said at 13: "An implication of a reasonable time when none is expressly limited is, in general, to be made unless there are indications to the contrary."
5. This principle is one of long standing, see Canning v Temby (1905) 3 CLR 419; [1905] HCA 45 at 424, 431-2. Recent examples where it has been applied include Calvo v Ellimark Pty Ltd [2016] NSWCA 13 at [59] and BGL Operations Pty Ltd v Allied Express Transport Pty Ltd [2011] NSWCA 41 at [31] (in the context of sale of goods).
6. Mr Crispin, of counsel, who appeared for TAG, accepted that this principle was what effectively underlay TAG's contention that the failure to agree on a time for delivery did not mean that there was no contract between the parties or that it was unenforceable or void.
7. If the principle in Reid v Moreland Timber Co Pty Ltd was applicable in the present case where the parties, the price and the subject matter had been agreed (as found at [15] of the written reasons for decision) it would be implied that performance of the contract by manufacture and delivery of the gyrocopter was to take place within a reasonable time. In such a case, what is a reasonable time is a question of fact and depends upon the circumstances of the case and its limit is determined by reference to what is fair to both parties, Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 509; [1982] HCA 29 at 567-8. Whether a contract has been breached because a reasonable time has passed at any particular time is a question of fact and is to be determined having to what occurs in the course of performance, Rudi's Enterprises Pty Ltd v Jay (1987) 10 NSWLR 566 at 576.
8. Mr Batley, of counsel, who appeared for Mr Kirk, accepted that the passage from Reid v Moreland Timber Co Pty Ltd was a correct statement of the general principle but drew attention to the fact that Dixon J had qualified the statement of principle by the words "in general" and "unless there are indications to the contrary". He argued that the principle was not applicable in the particular circumstances of the present case because of the unique nature of the gyrocopter and the uncertainty of any estimate of the time required to manufacture and deliver it.
9. An example where the principle did not apply because it was contrary to an express term of the contract is found in Hillam v Iacullo [2015] NSWCA 196 at [83]. It was not clear, however, that all the circumstances that could lead to the principle not being applicable in the present case were dealt with in the evidence at first instance, where both parties were self-represented.
10. Mr Batley specifically acknowledged that, in so far as the Tribunal below considered the principle, it failed to explain in its reasons why, in the present case, this did not lead to the result that there was a contract between the parties that included the term that the gyrocopter would be manufactured and delivered within a reasonable time.
11. If the Tribunal below failed to consider the principle in Reid v Moreland Timber Co Pty Ltd and to apply it if the circumstances so required, the Tribunal below would have erred in law. We are not in a position to reach a conclusion on whether it did make such an error. This is because there is no satisfactory explanation in the reasons of how the Tribunal reached the implicit conclusion that a term requiring performance within a reasonable time was not to be implied.
12. Whether there has been a failure to give adequate reasons constitutes a question of law for which a party to the proceedings at first instance has a right of appeal under s 80(2)(b) of the NCAT Act.
13. The nature and extent of the reasons required are variable, depending on the circumstances of the particular case, Collins v Urban [2014] NSWCATAP 17 at [57]. However, the reasons should be sufficient to enable an aggrieved party to exercise any rights of appeal: see for example the cases referred to in Collins v Urban [2014] NSWCATAP 17 at [49] ff. Generally, the duty to give reasons, both under s 62(2) of the NCAT and generally at common law, includes the requirement for Members to state their understanding of the applicable law and the reasoning processes that led the Tribunal to its conclusions, see for example s 62(3)(b) and (c).
14. In the circumstances, it appeared to us that the Tribunal below erred in law, at least, by failing to give adequate reasons for its decision. It did not explain what its understanding of the applicable law was or why, in the circumstances of the present case, there was not an implied term that manufacture and delivery of the gyrocopter was to take place within a reasonable time.
15. On this basis, we were of the view that the appeal should be upheld on the basis of ground 1 and the decision below should be set aside. We made orders accordingly on 16 February 2017.

Further Disposition of the Application

1. We also addressed with the parties the question of how the matter should be disposed of if we were to find that the decision should be set aside. In particular, we asked them to make submissions on whether the Appeal Panel should: 1. determine the matter on the basis of the facts as found by the Tribunal below supplemented by any inferences available from those facts and from the evidence that was before the Tribunal at first instance; or 2. remit the matter for further hearing before the Consumer and Commercial Division with such existing or new evidence as the parties wish to lead.
2. Both parties took the view that it would be preferable to remit the matter.
3. As we understood it, it was common ground between the parties that they were both unrepresented at the hearing at first instance and they did not appreciate the significance of the evidence that they could have provided to the Tribunal at the hearing but did not, for whatever reason. In particular, they were not aware of the principle referred to in Reid v Moreland Timber Co Pty Ltd and the other cases referred to above. Nor was the possibility of a term requiring manufacture and delivery of the gyrocopter within a reasonable time being implied into any contract something that they addressed in their evidence before the Tribunal at first instance.
4. In addition, if a contract is found to have been come into existence with such an implied term, it will then be necessary to decide whether and how the contract came to an end. This might involve determining whether: 1. There was a repudiation of the contract by one party so as to entitle the other party to accept the repudiation, terminate the contract and recover damages for breach of contract, see McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 at 476-477; 2. The contract was rescinded or terminated by express agreement based on the communications between the parties and whether that agreement included a term as to the return or retention of the deposit, see generally J W Carter, LexisNexis, Carter on Contract (at 21 February 2017) [32-050] and [32-060]; 3. The contract was terminated by abandonment, which can be seen as a form of implied agreement to terminate, and whether there was any express or implied term as to the return or retention of the deposit, see for example Ryder v Frohlich [2004] NSWCA 472 at [135]-[137], DTR Nominees Pty Limited v Mona Homes Pty Limited (1978) 138 CLR 423; [1978] HCA 12 at 434; Summers v The Commonwealth (1918) 25 CLR 144; [1918] HCA 33 at 153; 4. The contract was terminated in some other way and what are the consequences.
5. We are satisfied that the relevant material required to determine these issues and other issues as to the formation and terms of any contract for the supply of the gyrocopter is not available to the Appeal Panel.
6. The parties are responsible for the presentation of their own cases. However, against this must be weighed the general obligation on the Tribunal under s 38(6) of the NCAT Act to ensure that all relevant material is disclosed to the Tribunal so as to enable it to determine all of the relevant facts in issue in any proceedings.
7. The Appeal Panel has found that there has been an error made by the Tribunal below and the decision must be set aside. The parties were not legally represented at the original hearing and the issues have become clearer on appeal. A determination of these issues requires a consideration of relevant evidence and we do not believe that all of that evidence is presently available to the Appeal Panel. It appears to us that it would fairer to both parties and more conducive to the just resolution of the real issues between them to remit the matter and allow additional evidence to be adduced. Although this will lengthen the time taken to resolve the matter and potentially increase the expense, we believe that the just resolution of the issues must take precedence over their quick and cheap resolution in this case. This is particularly so where the parties support the matter being remitted.

Conclusion on the Appeal

1. For these reasons we concluded that the orders made by the Tribunal should be set aside and the matter remitted for a new hearing. At that hearing, the parties should be permitted to call fresh evidence to address issues that might, for whatever reason, not have been identified at the original hearing.
2. To assist with the timely hearing and disposition of the remitted matter, we made directions for its further preparation and directed that the registry list it for hearing.

Costs

1. Finally on 16 February 2017, after hearing submissions from the parties, the Appeal Panel made an order that each party pay its own costs.
2. Because this appeal was lodged after 1 January 2016 and the amount claimed or in dispute in the appeal was greater than $30,000, r 38A of the Civil and Administrative Tribunal Rules 2014 applies in combination with r 38 to give the Appeal Panel a general discretion to award of costs. In other words, the restrictions on the award of costs contained in s 60(1) and (2) of the NCAT Act do not apply.
3. Mr Kirk submitted that the costs of the appeal should depend on the outcome of the reheard proceedings in some way, either as costs in the cause or one party's costs in the cause. TAG submitted that because of its success on appeal a costs order should be made in its favour. If, however, the Appeal Panel was not minded to award costs of the appeal in TAG's favour, then it would be more appropriate that each party should pay its own costs.
4. In the circumstances, we agreed with TAG's alternative position. Mr Kirk was unsuccessful on the appeal and there were no reasons which satisfied us that he should otherwise have an order for costs potentially in his favour, contingent upon the outcome of the rehearing. While TAG was successful in having the appeal allowed, it was not successful in obtaining the order that it had sought that the proceedings be dismissed. Further, although TAG raised the general question of whether the Tribunal below had erred in concluding that there was no enforceable contract, it did not specifically identify the nature of the actual error upon which the appeal ultimately turned.

Orders

1. For the reasons set out above, the Appeal Panel made the following orders on 16 February 2017: 1. Insofar as leave is required, both parties have leave to be legally represented on this appeal. 2. Leave to amend paragraph 5B of the Notice of Appeal so that it is in the form of the paragraph 5B of the Amended Notice of Appeal filed on 21 December 2016 is granted. 3. The appeal is allowed. 4. Order 1 made on 20 October 2016 in the Tribunal at first instance is set aside. 5. Remit the matter to the Consumer and Commercial Division and for the purposes of the remitted proceedings, the Appeal Panel directs: 1. Mr Kirk is to give to the Tribunal and Tag Aviation Pty Ltd points of claim and any evidence (including expert evidence, if any) to be relied upon on or before 9 March 2017. 2. Tag Aviation Pty Ltd is to give to the Tribunal and Mr Kirk points of defence and any evidence (including expert evidence, if any) to be relied upon on or before 30 March 2017. 3. Mr Kirk is to give to the Tribunal and Tag Aviation Pty Ltd any material in reply on or before 7 April 2017. 4. The matter be listed for hearing on a date not before 14 April 2017. 1. Each party pay its own costs of this appeal. 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

Amendments 28 February 2017 - Date of orders amended to 16 February 2017 from 24 February 2017. 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: 28 February 2017