ACS Equip Pty Ltd v Richard [2020] NSWCATAP 236

Catchwords: CONSUMER CLAIM-supply of services-appeal-failing to ask the right questions as to the applicable causes of action-error of law-adequacy of reasons . Civil and Administrative Tribunal New South Wales Medium Neutral Citation: ACS Equip Pty Ltd v Richard [2020] NSWCATAP 236 Hearing dates: 5 November 2020 Date of orders: 16 November 2020 Decision date: 16 November 2020 Jurisdiction: Appeal Panel Before: P Durack SC, Senior Member G Curtin SC, Senior Member Decision: (1) The appeal is allowed. (2) Set aside the orders made on 14 July 2020 in proceedings GEN 19/50081 and GEN 20/13274. (3) Remit the proceedings in GEN 19/50081 and GEN 20/13274 to a differently constituted Tribunal for a new hearing and re-determination of the claims based upon the evidence already adduced by the parties in those proceedings and upon such additional evidence as the Tribunal at first instance may allow. (4) Any application in respect of the costs of the appeal is to be made by lodging with the Tribunal and providing to the opposite party, within 10 days, written submissions, including submissions as to whether a party agrees that a hearing in respect of costs should be dispensed, along with any evidence a party may wish to rely upon. (5) Any written submissions and evidence that a party wishes to rely upon in reply to the material supplied under Order 4 are to be lodged with the Tribunal and provided to the opposite party within 7 days of receipt of such material. Catchwords: CONSUMER CLAIM-supply of services-appeal-failing to ask the right questions as to the applicable causes of action-error of law-adequacy of reasons . Legislation Cited: Australian Consumer Law (NSW) Civil and Administrative Tribunal Act (NSW) (2013) Fair Trading Act 1987 (NSW) Cases Cited: Collins v Urban [2014] NSWCATAP 17 Curtis v Potter & Co Pty Ltd t/as The Africa Safari Co [2016] NSWCATAP 196 New South Wales Land and Housing Corporation v Orr [2019] NSW CA 231 Rice Marketing Board for the State of New South Wales v Forbidden Foods Pty Limited; Forbidden Foods Pty Limited v Rice Marketing Board for the State of New South Wales [2020] NSWCATAP 182 Category: Principal judgment Parties: ACS Equip Pty Ltd (Appellant) John Richard (First Respondent) Carol Richard (Second Respondent) Jeffrey Richard (Third Respondent) Representation: Counsel: A Crossland and J Widjaja (Appellant) Solicitors: Foulsham & Geddes (Appellant) Hannaford Cox Connellan and McFarland (Respondents) File Number(s): AP 20/34926 Publication restriction: Nil Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 14 July 2020 Before: K Rickards, General Member File Number(s): GEN 19/50081; GEN 20/13274 REASONS FOR DECISION This appeal concerns a consumer claim in relation to services provided by the appellant to the respondents in respect of a bore on the respondents ’ property in northern New South Wales. Following an assessment report on the bore dated 16 September 2019 , prepared by the appellant, work on the bore was carried out by the appellant for which the respondents were charged $16,228.65 in an invoice dated 11 October 2019. There appears to have been no written agreement for the carrying out of this work. The description of the work covered by the invoice concerned work done on the bore and a post-clean CCTV inspection. It did not appear to cover the inspection and assessment report prior to the work done by the appellant on the bore. The invoice was not paid. Instead, the respondents brought a claim in the Tribunal seeking an order that they did not have to pay the amount charged . In the application the claim was supported by a detailed complaint about poor workmanship by the appellant. The application did not identify the legal basis for this relief. Subsequently, the appellant brought a claim in the Tribunal asking for an order that the respondents pay the amount of the invoice for “ Bore Services provided to the Respondent ” . After a hearing dealing with both claims, on 14 July 2020 , the Tribunal ordered that the appellant ’ s claim be dismissed and in respect of the respondents ’ claim made the following order: 1. A declaration is made that the applicants John Richard, Carol Richard and Jeffrey Richard are not indebted to the respondent ACS Equip Pty Ltd in respect of any work referred to within, or by the Tax Invoice of, the respondent ACS Equip Pty Ltd dated 11 October 2019. By this appeal, the appellant seeks to have th ose orders set aside and the claims remitted to a differently constituted Tribunal for redetermination. By an amended Notice of A ppeal (lodged on 7 September 2020) and written submissions, the appellant puts forward various grounds of appeal, including grounds based upon error of law and error of fact. The appellant has a right of appeal on any question of law (s 80(2)( b ) of the Civil and Administrative Tribunal Act 2014) (the NCAT Act ) . T he appellant requires leave to appeal on any other grounds , in respect of which cl 12 of schedule 4 of the NCAT Act is applicable . Amongst the errors of law for which the appellant contended were errors that the Tribunal applied the wrong test and that the Tribunal did not provide adequate reasons for its decision. In his oral submissions, Mr Crossland, who appeared for the appellant, gave emphasis to the application of the wrong test ground of appeal and contended that the fundamental problem was that the Tribunal failed to decide the claims according to law, in particular, according to contract law . He submitted that instead the Tribunal seemed to have decide d the claims by applying s ome broad notion of justice and equity. The reasons given by the Tribunal can be summarised as follows: After giving an account of various matters, including the appellant ’ s recommendation for the bore to be redeveloped, it ’ s quote for such rectification work under the description “ P2 Bore Redevelopment ” , the appellant ’ s subsequent supply of lesser services than those for which it had quoted ( by agreement with respondents ) , and the charge invoiced, the Tribunal said (at [7]) that there appeared to be no significant dispute that there had been no real improvement in the function of the bore following the appellant ’ s work. The Tribunal then said (at [8]): “ There is no evidence to support the contention made on behalf of ACS that there was no agreement or understanding that the bore function would be expected to improve as a result of completion of the work covered by the second tax invoice issued on 11 October 2019. This contention is also contradicted by the express terms set out within the invoice of ACS that the work undertaken and subject Tax invoice issued were for “bore redevelopment”. We interpo se that the Tribunal did not make any express finding s that there was a contract between the parties (or, perhaps, sequential contracts-one covering the report about the bore and another covering the bore work itself), as to any relevant term ( s ) of the contract (s) , nor any findings as to how it was that any relevant term had become a term of the contract. We also note that t he reference to “ express terms ” in the above passage was a reference to what was contained in the invoice sent after the work was carried out , rather than a reference to terms of a contract. The Tribunal (at [9] and [10]) went on to refer to the expert views of a drilling consultant presented by the respondents and his conclusion that the appellant ’ s first inspection of the bore, undertaken before it carried out any work, should have revealed to it that rehabilitation of the bore was a futile exercise. The Tribunal then said (at [11]) : “Consideration of the evidence establishes that there has been a failure on the part of ACS to provide expert services which were of a reasonable standard to [the respondents’]. Accordingly, [the respondents] should be released from any legal obligation to pay the 11 October 2019 Tax Invoice from ACS which relates to those services and which is the subject of these proceedings.” In written submissions (at [44] ) and oral submissions for the respondents ( from Mr Edwards, their solicitor) it was contended that the cause of action the Tribunal acted upon was breach of a contractual term that there would be a real improvement in the bore in respect of which relief was granted under s 79 N( d ) of the Fair Trading Act 1987 (NSW) (the FTA ) . In oral submissions, Mr Edwards contended that the re was also a cause of action for breach of the statutory guarantees in s 60 and s 61 of the Australian Consumer Law (NSW). However, it is notable that the Tribunal ’ s reasons do not refer to any of these causes of action or to their ingredients. The passages in the reasons concerning the expert views of the drilling consultant suggest that the Tribunal may have had in mind a negligent advice case against the appellant based upon their inspection and report before carrying out the work on the bore. However, the elements of such a case were not referred to and addressed. Amongst the appellant ’ s submissions concerning the application of the wrong test, were submissions that: In paragraph [8] the Tribunal, incorrectly, reversed the onus by requiring the appellant to make good its contention that there was no agreement or understanding that the bore function be expected to improve as a result of the work, instead of requiring the respondents to establish that there was a term of the contract to this effect. The reference to “ understanding ” in this same passage indicates that the Tribunal, incorrectly, considered that liability could follow from breach of an understanding rather than breach of a contractual term. There was no basis in the evidence to support a conclusion that it was a term of the contract that the level of bore functioning would improve. It may be inferred that the Tribunal granted the relief it did pursuant to s 79 N of the FTA . That section, relevantly, provides: 79N Orders in favour of claimant In determining a consumer claim wholly or partly in favour of a claimant, the Tribunal may, subject to this Division, make any one or more of the following orders that it considers appropriate— ….. (d) in the case of a claim for relief from payment of money—an order declaring that a specified amount of money is not due or owing by the claimant to a respondent, ….. With respect to a claim for such relief, the Tribunal must act in accordance with s 79U of the FTA, including a requirement that it be satisfied that the order will be fair and equitable to all parties to the claim: s 79U(1). This power in respect of remedies does not alter the need for the Tribunal to apply the general law in determining the relevant obligations of the parties and whether such obligations have been complied with. As the Appeal Panel said in Curtis v Potter & Co Pty Ltd t/as The Africa Safari Co [2016] NSWCATAP 196 , in relation to s 79U: “68 The nature and extent of such a power was considered by Hope JA in State Rail Authority of New South Wales v Consumer Claims Tribunal (1988) 14 NSWLR 473 in the context of the provisions of s 23(2) of the previously repealed Consumer Claims Tribunal Act 1974 (NSW) (CCT Act). That section was in the following terms: (2) In exercising its powers under subsection (1) (a), (b), (c) or (d) a consumer claims tribunal shall make such an order as is, in its opinion, fair and equitable to all the parties to the proceeding before it. Of that section, Hope JA said at p 477B: ‘ ... I would respectfully agree with the conclusion reached by Yeldham J in Fairey Australasia Pty Ltd v Joyce [1981] 2 NSWLR 314 at 321 that the tribunal is not concerned with “palm tree justice, and with the conclusion of Hunt J in Jet 60 Minute Cleaners Pty Ltd v Brownette [1981] 2 NSWLR 232 at 236 , that save in relation to the selection with the form of order the tribunal must act in accordance with and apply the general law in determining the claim which has been made to it.’ 69 His Honour then said at p 477G: ‘Whether there is … a claim or obligation is to be determined by applying the general law. It is only where the tribunal proposes to make an order in favour of the claimant that in some cases the form of the order in his favour is to be determined according to the opinion of the tribunal as to what is fair and equitable to all parties .’ 70 Unlike s 23(2) of the CCT Act, s 79U(1) of the FT Act is not confined to particular types of orders that might be made. However, as with the CCT Act, the FT Act does not displace the requirement for claims to be determined in accordance with the general law. Rather, as Hope JA found in State Rail , once liability and an entitlement to a remedy is established, s79U provides scope to fashion the form of orders in a manner that ‘ will be fair and equitable to all parties to the claim .’” In oral submissions, by reference to Curtis and to what Hope JA said in State Rail , Mr Crossland submitted that the Tribunal had proceeded contrary to the requirement to apply the general law rather than a form of “ palm tree justice ” . Rather than accept this contention, we do think, nevertheless, that the Tribunal erred in law by failing to ask itself the right questions, namely what is (are) the applicable cause(s) of action, what are the ingredients of such cause(s) of action and how is it that the necessary ingredients have been established by the respondents . For example, if the cause of action was breach of a contractual term that there would be a real improvement in the bore, the basis for the existence of such a term needed to be established by the respondents , including whether it was express or implied. As distinct from the well-recognised implied term that the services would be carried out with due care and skill, such a term concerned the achievement of a particular outcome and the Tribunal needed to examine how the contractual relations gave rise to such an obligation. If the cause of action was one for negligent advice, the considerations to be addressed included the nature and terms of the advice the appellant contracted to provide, and how it was that a proper discharge of the appellant ’ s obligations would have led to advice that “ rehabilitation of the bore was a futile exercise ” (at [10]) of the reasons). Furthermore, the question of remedy pursuant to s 79N(d) and s 79U needed to be addressed. For these reasons, we would allow the appeal. Accordingly, it is unnecessary for us to address the other grounds of appeal, including the contention that the reasons for decision were inadequate. In oral submissions, Mr Edwards gave emphasis to what he said were the adequacy of the reasons, although he said that the respondents maintained their contention in the written submissions about the absence of a duty to provide reasons w here no request for reasons has been made (as was the case here). The written submissions about a duty to provide reasons were brief and did not refer to and challenge the statement by Bell P in New South Wales Land and Housing Corporation v Orr [2019] NSW CA 231 at [55] (re lied upon by the Appeal Panel in Rice Marketing Board for the State of New South Wales v Forbidden Foods Pty Limited; Forbidden Foods Pty Limited v Rice Marketing Board for the State of New South Wales [2020] NSWCATAP 182 at [216] ) that it was not unreasonable to suppose that s 62(3) of the NCAT Act supplied important guidance as to what should be set out in the r easons that t he Tribunal chooses to give without a request for reasons pursuant to s 62(2) being made . Also, the respondents ’ written submissions about reasons proceeded upon the incorrect basis that Ward JA in Orr (at [ 114]) had concluded that there was no implied statutory duty or a common law duty to give reasons, nor did the submissions challenge the correctness of the decision of the Appeal Panel in Collins v Urban [2014] NSWCATAP 17 that there was a duty to give reasons: at [ 47]-[56]. Orders The orders we make are as follows: The appeal is allowed. Set aside the orders made on 14 July 2020 in proceedings GEN 19/50081 and GEN 20/13274. Remit the proceedings in GEN 19/50081 and GEN 20/13274 to a differently constituted Tribunal for a new hearing and re-determination of the claims based upon the evidence already adduced by the parties in those proceedings and upon such additional evidence as the Tribunal at first instance may allow. Any application in respect of the costs of the appeal is to be made by lodging with the Tribunal and providing to the opposite party, within 10 days, written submissions, including submissions as to whether a party agrees that a hearing in respect of costs should be dispensed, along with any evidence a party may wish to rely upon . Any written submissions and evidence that a party wishes to rely upon in reply to the material supplied under Order 4 are to be lodged with the Tribunal and provided to the opposite party within 7 days of receipt of such material. ********** 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: 16 November 2020