Zinck v NJS Enterprises Pty Ltd t/as High End Performance & Automotive [2021] NSWCATAP 401

Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Zinck v NJS Enterprises Pty Ltd t/as High End Performance & Automotive [2021] NSWCATAP 401 Hearing dates: 30 November 2021 Date of orders: 10 December 2021 Decision date: 10 December 2021 Jurisdiction: Appeal Panel Before: G Blake AM SC, Senior Member J McAteer, Senior Member Decision: (1) The appeal is allowed. (2) The Tribunal's order made on 1 September 2021 dismissing the appellants' application is set aside. (3) The claims in the appellants' application are remitted to the Consumer and Commercial Division for rehearing by a differently constituted Tribunal upon the evidence already adduced to the Tribunal at first instance, the balance of the appellants' 6 July 2021 documents and such further evidence as the Tribunal may allow. Catchwords: APPEALS - Error of law – Whether the Tribunal failed to afford procedural fairness by refusing to admit documents into evidence - Whether the Tribunal constructively failed to exercise jurisdiction by not making a finding on a material question of fact Legislation Cited: Australian Consumer Law (NSW), s 60 Civil and Administrative Tribunal Act 2013 (NSW), ss 38, 80, 81, Sch 4, cl 12 Civil and Administrative Tribunal Rules 2014 (NSW), r 25 Cases Cited: C G Constructions Pty Limited v Hanson Constructions Materials Pty Limited [2017] NSWCATAP 130 Collins v Urban [2014] NSWCATAP 17 Cominos v Di Rico [2016] NSWCATAP 5 National Companies and Securities Commission v News Corporation Ltd (1984) 156 CLR 296; [1984] HCA 29 Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 Stead v State Government Insurance Commission (1986) 161 CLR 141 at 145-146; [1986] HCA 54 Vella v LB Dellit Pty Ltd (t/as Dellit Design and Construct) [2021] NSWCATAP 376 Category: Principal judgment Parties: Danny Zinck and Joyita Zinck (Appellants) NJS Enterprises Pty Ltd t/as High End Performance & Automotive (Respondent) Representation: Appellants (self-represented) N Smith (Director) (Respondent) File Number(s): 2021/00270562 Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: Not applicable Date of Decision: 1 September 2021 Before: P Thew, General Member File Number(s): MV 21/15055

REASONS FOR DECISION

Overview 1. This is an internal appeal from the decision of the Consumer and Commercial Division of the Tribunal made on 1 September 2021 (the Tribunal decision) in which it relevantly made an order dismissing the consumer claim of the appellants Danny Zinck and Joyita Zinck against the respondent NJS Enterprises Pty Ltd t/as High End Performance & Automotive. 2. We have decided to allow the appeal, set aside the order of the Tribunal made on 1 September 2021 dismissing the appellants' application, and remit the claims in the appellants' application to the Consumer and Commercial Division for rehearing by a differently constituted Tribunal.

The factual background 1. The appellants are the owners of a Mitsibishi 1995 Canter truck (the truck). 2. The respondent carries on the business of repairing motor vehicles. 3. From about May 2017 to 28 January 2021 the respondent serviced the truck and carried out repairs to its brakes.

The Tribunal proceedings 1. On 6 April 2021, the appellants as the applicants commenced proceedings MV 21/15055 against the respondent by filing an application in which they: 1. claimed an order that the respondent pay them $8,444; 2. set out the following reasons for seeking this order: "The present application applies to repairs completed by the Respondent on my Mitsibishi 1995 Canter from May 2020 to January 2021. I began experiencing problems with my brakes in early 2019. The respondent conducted some repairs on my vehicle, however, these were all unsatisfactory. This was demonstrated by the fact that the brakes continued to have problems and I was involved in an accident for which I had to pay $2000 to repair the other vehicle. Following this accident, I requested a proper repair of my brakes. In May 2021 (sic), I paid $4115 to repair the front brakes. However, I continued to experience problems soon after these repairs. I continued to experience these problems to which the Respondent advised that a simple brake adjustment was required. As time went on, the problem became increasingly worse until I was no longer able to drive my vehicle. I asked the Respondent to repair whatever problem I was having with my brakes, given they only put in new front brakes only recently. When my vehicle was taken in for these repairs in January 2021, I was advised that after the passage of time, the rear brakes were now faulty and needed replacement. I was charged $1280 for replacing the rear brakes. However, I continued to experience even worse problems almost as soon as I picked up my vehicle. After another request for the Respondent to repair the issue ASAP, I continued to experience problems with my vehicle. Upon taking my vehicle to another mechanic, I paid $1049 for my vehicle to be fixed. The mechanic advised that had the Respondent taken a closer examination, they would have picked up on the issue from the beginning. I have not experienced any issues with my brakes since I took it to the other mechanic. I also attach/provide a statutory declaration detailing the circumstances in greater detail." 1. On 20 April 2021 and 7 May 2021, the appellants filed and served material in support of their application. 2. On 21 April 2021 and 6 May 2021, the respondent filed and served material in opposition to the application. 3. On 13 May 2021, the Tribunal made procedural directions which relevantly included the following notation and order (the 13 May 2021 directions): "3. The Tribunal notes that the applicant has stated that all their evidence has been submitted as required and they are ready to proceed to hearing. 4. On or before 3-Jun-2021 the respondent is to provide to the applicant and the Tribunal a copy of all documents (see definition below) on which the respondent seeks to rely at the hearing." 1. On 4 and 7 June 2021, the respondent filed and served material in opposition to the application. 2. On 6 July 2021, the appellants filed and served material in support of their application (the appellants' 6 July 2021 documents) which comprised the following documents: 1. the letter dated 5 July 2021 consisting of seven pages from the appellants to the Tribunal (the 5 July 2021 letter); 2. the statutory declaration of Joyita Zinck dated 1 July 2021; 3. the invoice of Southwest Automotive dated 20 January 2021; 4. the invoice of the respondent dated 3 May 2017; 5. the invoice of the respondent dated 24 March 2018; 6. the invoice of the respondent dated 23 June 2018; 7. the invoice of the respondent dated 30 June 2018; 8. the invoice of the respondent dated 26 August 2019. 1. On 5 August 2021, the hearing of the proceedings took place at which the appellants represented themselves and Mr Nathan Smith, a Director, represented the respondent. At the hearing the Tribunal: 1. granted leave to the respondent to file a cross application as the appellants "suffered no prima facie prejudice": Tribunal decision, at [4]; 2. admitted into evidence the documents received from the appellants on 20 April 2021 (Ex A1) and 7 May 2021 (Ex A2), and page 7 of the 5 July 2021 letter in relation to the respondent's cross application (Ex A3): Tribunal decision, at [7(1)]; 3. admitted into evidence the documents received from the respondent on 21 April 2021 (Ex R1), 6 May 2021 (Ex R2), 4 June 2021 (Ex R3) and 7 June 2021 (Ex R4): Tribunal decision, at [7(2)]; 4. did not admit into evidence the balance of the appellants' 6 July 2021 documents "because the material was filed outside the time allowed by the Tribunal in the orders dated 13 May 2021": Tribunal decision, at [9]; 5. heard the oral evidence of the parties: Tribunal decision, at [7(3)]. 1. On 17 September 2021, the Registrar in a letter to the appellants advised them that a sound recording of the hearing on 5 August 2021 was unavailable due to a malfunction in the digital sound recording system.

The Tribunal decision 1. In the Tribunal decision, the Tribunal relevantly: 1. summarised the parties' evidence which focussed on work done by the respondent in January 2021 and on 5 May 2021: Tribunal decision, at [16]; 2. found that the appellants adduced no documentary evidence as to how the respondent failed to perform the services with due care and skill: Tribunal decision, at [25]; 3. found that the respondent performed the services in respect of all brakes on the truck thoroughly (on both 18 January 2021 in respect of the rear brakes and on 5 May 2021 largely in respect of the front brakes) and continued to perform tests and retests on the truck until it had ensured that the brakes "road tested OK": Tribunal decision, at [31]; 4. was not satisfied that there was any breach of s 60 of the Australian Consumer Law: Tribunal decision, at [32]; 5. dismissed the application: Tribunal decision, at [33], [39].

The scope and nature of internal appeals 1. Internal appeals may be made as of right on a question of law, and otherwise with leave (that is, the permission) of the Appeal Panel: s 80(2)(b) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act). 2. The Appeal Panel relevantly may make such orders as it considers appropriate in light of its decision on the appeal, including but not limited to any one or more of orders that the appeal is to be allowed, the decision under appeal is to be set aside, and the whole or any part of the case is to be reconsidered by the Tribunal, either with or without further evidence, in accordance with the directions of the Appeal Panel: s 81(1)(a), (c) and (e) of the NCAT Act. 3. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel set out at [13] a non-exclusive list of questions of law which relevantly includes whether the Tribunal identified the wrong issue or asked the wrong question, whether the Tribunal applied a wrong principle of law, and whether the Tribunal failure to afford procedural fairness. 4. An error of law will also occur where there is a constructive failure to exercise jurisdiction by not making a finding on a material question of fact: C G Constructions Pty Limited v Hanson Constructions Materials Pty Limited [2017] NSWCATAP 130 at [33]-[35]. 5. The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Sch 4 of the NCAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that: 1. the decision of the Tribunal under appeal was not fair and equitable; or 2. the decision of the Tribunal under appeal was against the weight of evidence; or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). 1. In Collins v Urban [2014] NSWCATAP 17 (Collins), the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Sch 4 of the NCAT Act may have been suffered where: "… there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance." 1. In Collins, the Appeal Panel at [77], without seeking to be exhaustive in any way, stated the authorities establish that: 1. if there has been a denial of procedural fairness the decision under appeal can be said to have been "not fair and equitable" within cl 12(1)(a) of Sch 4 of the NCAT Act; 2. the decision under appeal can be said to be "against the weight of evidence" within cl 12(1)(b) of Sch 4 of the NCAT Act where the evidence in its totality preponderates so strongly against the conclusion found by the Tribunal at first instance that it can be said that the conclusion was not one that a reasonable Tribunal member could reach. 1. Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Sch 4 of the NCAT Act, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b) of the NCAT Act. 2. In Collins, the Appeal Panel at [84] stated that ordinarily it is appropriate to grant leave to appeal only in matters that involve: "(a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed." 1. Rule 25(4)(c) of the Civil and Administrative Tribunal Rules 2014 (NSW) relevantly provides that in the case of an appeal from the Tribunal decision an internal appeal must be lodged within 28 days from the day on which the appellant was notified of the decision to be appealed or given reasons for the decision. 2. In Cominos v Di Rico [2016] NSWCATAP 5 (Cominos), the Appeal Panel at [13] stated that it may be difficult for self-represented appellants to clearly express their grounds of appeal. In such circumstances and having regard to the guiding principle, it is appropriate for the Appeal Panel to review an appellant's stated grounds of appeal, the material provided, and the decision of the Tribunal at first instance to examine whether it is possible to discern grounds that may either raise a question of law or a basis for leave to appeal.

The Appeal Panel proceedings 1. On 20 September 2021, the appellants commenced proceedings 2021/00270562 against the respondent by filing a notice of appeal, in which they: 1. challenge the Tribunal decision so far as it dismissed the application; 2. list the following grounds of appeal: "The Tribunal made an error of law in failing to provide procedural fairness. The lack of procedural fairness goes to the refusal to consider critical evidence provided on 6 July 2021, a failure to consider the totality of our claims and an implication of bias in the conduct of the hearing. The Tribunal made an error of law in making a decision based on a completely incorrect understanding of the facts. The Tribunal found that the Respondent did not fail to perform its duties with due care and skill due to services also provided on 5 May 2021. However, these services were provided by a totally different Mechanic and not the Respondent. The Tribunal made an error of law in failing to consider a relevant legal principle in the Australian Consumer Law, in particular, a failure to provide a product of an acceptable quality." 1. list the following reasons why the Appeal Panel should grant leave to appeal against the Tribunal decision: "We believe that leave to appeal should be granted on the basis that we have suffered a substantial miscarriage of justice because the decision was not fair and equitable (including a lack of procedural fairness) and the decision was made against the weight of the evidence provided to the Tribunal. In particular: 1. The Tribunal refused to consider evidence provided on 6 July 2021, which contained critical evidence showing that the Respondent failed to perform his services with due care and skill; 2. The Tribunal made an obvious and substantial error that was central to its decision. The Tribunal found that the Respondent did not breach section 60 due to services performed on 18 January 2021 and 5 May 2021. However, the services on 5 May 2021 were not performed by the Respondent. They were performed by a totally different mechanic after we lost all confidence in the Respondent: 3. The Tribunal failed to consider the totality of our claims and evidence, including services performed by the Respondent throughout 2020; 4. The Tribunal failed to consider a relevant legal issue, which was a failure by the Respondent to provide a product of an acceptable quality. In particular, the drum brakes and brake shoes provided by the Respondent on 24 May 2020 needed replacement in less than 12 months, contrary to their claims that any issue with the front brakes on 5 May 2021 is not their responsibility as their service was performed "over 12 months ago". 5. We believe that there may have been some bias due to a number of inflammatory and derogatory statements made by the Respondent against us that were not only untrue but completely irrelevant to the matter. We believe that there is a significant possibility that a different or a more favourable outcome would have been made if the Tribunal had given proper consideration to all of the evidence and claims, and exercised procedural fairness. For these reasons, we believe that it would be unfair to let the Tribunal's decision stand." 1. On 7 October 2021, the respondent filed its reply to appeal in which it supports the original orders made by the Tribunal, opposes leave to appeal being granted, and accepts that the appeal was lodged within time. 2. On 8 October 2021, the Appeal Panel constituted by Deputy President Westgarth made procedural directions which relevantly included the lodgement of a sound recording or transcript of the hearing at first instance.

The hearing of the appeal 1. The appellants and the respondent relied on their written submissions and made oral submissions.

The issues 1. Having regard to the principles in Cominos, we have discerned from the order challenged on appeal and the grounds of appeal in the notice of appeal, the material provided the appellants, and the Tribunal decision the following six grounds of appeal: 1. ground 1: the Tribunal erred in failing to afford the appellants procedural fairness in refusing to admit into evidence the balance of the appellants' 6 July 2021 documents; 2. ground 2: the Tribunal erred in constructively failing to exercise jurisdiction by not making a finding on a material question of fact; 3. ground 3: the Tribunal erred in applying the wrong principle of law in relation to s 60 of the Australian Consumer Law; 4. ground 4: the Tribunal erred in finding that the respondent performed services on the truck on 5 May 2021; 5. ground 5: the Tribunal erred in failing to afford the appellants procedural fairness by reason of bias against them. 1. We have decided to consider grounds 1 and 2 together because they are interrelated. Before considering these issues we have set out the applicable statutory provisions and legal principles. 2. Section 38 of the NCAT Act deals with the procedure of the Tribunal generally, and relevantly provides: 38 Procedure of Tribunal generally … (4) The Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms. (5) The Tribunal is to take such measures as are reasonably practicable— … (c) to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings. (6) The Tribunal— (a) is 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, and …" 1. In National Companies and Securities Commission v News Corporation Ltd (1984) 156 CLR 296 at 311-312; [1984] HCA 29 (News Corporation) Gibbs CJ (Brennan J at 326 agreeing) made the following observations about the requirements of natural justice: "In Russell v Duke of Norfolk, Tucker LJ said: 'The requirements of natural justice must depend on the circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject-matter that is being dealt with, and so forth.' The passage has frequently been approved — for example, by this Court in Reg. v Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group. The authorities show that natural justice does not require the inflexible application of a fixed body of rules; it requires fairness in all the circumstances, which include the nature of the jurisdiction or power exercised and the statutory provisions governing its exercise. Moreover, as Stephen J. said in Salemi v MacKellar [No.2], the rules of natural justice 'may also vary from case to case although each be conducted before one and the same tribunal or person'." (citations omitted) 1. In Stead v State Government Insurance Commission (1986) 161 CLR 141 at 145-146; [1986] HCA 54 (Stead) the High Court made the following observation as to the consequences where there has been a departure from the rules of natural justice: "For this reason not every departure from the rules of natural justice at a trial will entitle the aggrieved party to a new trial. By way of illustration, if all that happened at a trial was that a party was denied the opportunity of making submissions on a question of law, when, in the opinion of the appellate court, the question of law must clearly be answered unfavourably to the aggrieved party, it would be futile to order a new trial. Where, however, the denial of natural justice affects the entitlement of a party to make submissions on an issue of fact, especially when the issue is whether the evidence of a particular witness should be accepted, it is more difficult for a court of appeal to conclude that compliance with the requirements of natural justice could have made no difference. ... However, when the Full Court is invited by a respondent to exercise these powers in order to arrive at a conclusion that a new trial, sought to remedy a denial of natural justice relevant to a finding of fact, could make no difference to the result already reached, it should proceed with caution. It is no easy task for a court of appeal to satisfy itself that what appears on its face to have been a denial of natural justice could have had no bearing on the outcome of the trial of an issue of fact. And this difficulty is magnified when the issue concerns the acceptance or rejection of the testimony of a witness at the trial." 1. In Vella v LB Dellit Pty Ltd (t/as Dellit Design and Construct) [2021] NSWCATAP 376 (Vella) at [48] the Appeal Panel held that a failure to deal with evidence may also in the appropriate circumstances be characterised as a failure to have regard to a relevant consideration or a failure to have regard to critical evidence. However, the obligation in s 38(6)(a) of the NCAT Act includes an obligation to have regard to material which has been disclosed to the Tribunal and which is relevant to the facts in issue, at least where that material is of some significance.

Ground 1: the Tribunal erred in failing to afford the appellants procedural fairness in refusing to admit into evidence the balance of the appellants' 6 July 2021 documents

Ground 2: the Tribunal erred in constructively failing to exercise jurisdiction by not making a finding on a material question of fact 1. Having regard to the principles in News Corporation at 311-312 we are satisfied that what natural justice or procedural fairness required of the Tribunal at the hearing on 5 August 2021 depended on s 38(4) and (5)(c) of the NCAT Act and the circumstances of the Tribunal proceedings. The circumstances included the 13 May 2021 directions, the nature of the evidence sought to be adduced in the balance of the appellants' 6 July 2021 documents, the impact on the hearing if the balance of the appellants' 6 July 2021 documents had been admitted into evidence including any prejudice to the respondent. 2. We are satisfied that in the circumstances where the only reason for refusing to admit the balance of the appellants' 6 July 2021 documents into evidence was "because the material was filed outside the time allowed by the Tribunal in the orders dated 13 May 2021" the Tribunal failed to afford procedural fairness to the appellants and made an error of law. The Tribunal did not comply with s 38(4) and (5)(c) of the NCAT Act by its refusal to admit the balance of the appellants' 6 July 2021 documents into evidence. While it is desirable that parties in proceedings adhere to their position advised to the Tribunal as to the evidence on which they are relying for the hearing, it is not surprising, particularly where they are unrepresented, that parties will desire to adduce further evidence for the hearing. This should be accommodated where it can be done without prejudice to the other party. The Tribunal did not make any finding that the respondent would have been prejudiced by the admission of the balance of the appellants' 6 July 2021 documents into evidence, and did not take into account the fact that it had been provided to the respondent on or shortly after 6 July 2021. 3. We are not satisfied that having regard to the principles in Stead at 145-146 that the balance of the appellants' 6 July 2021 documents could have made no difference to the outcome of the appellants' application. Not only is it not clear what impact these documents would have had, but in the absence of a sound recording we do not know whether there was any relevant oral evidence given by the parties at the hearing. 4. It is clear that the Tribunal did not consider whether the respondent breached s 60 of the Australian Consumer Law in respect of the servicing of the truck from May 2020 to January 2021. There is no explanation in the Tribunal decision for the failure to consider the appellants' evidence relevant to this period. The failure to consider this evidence constituted a breach of s 38(6)(a) of the NCAT as explained in Vella at [48] and an error of law. Further, the failure to make findings of fact in relation to this period constituted an error of law by constructively failing to exercise jurisdiction by not making a finding on a material question of fact. 5. We are satisfied that by reason of these errors of law, it is appropriate pursuant to s 81(1)(a), (c) and (e) of the NCAT Act to allow the appeal, set aside the Tribunal's order made on 1 September 2021 dismissing the appellants' application, and remit the claims in the appellants' application to the Consumer and Commercial Division for rehearing by a differently constituted Tribunal upon the evidence already adduced to the Tribunal at first instance, the balance of the appellants' 6 July 2021 documents and such further evidence as the Tribunal may allow. We have ordered that the rehearing be by a differently constituted Tribunal as a matter of prudence in view of ground 5 which is unnecessary to determine as set out in [41] below.

Ground 3: the Tribunal erred in applying the wrong principle of law in relation to s 60 of the Australian Consumer Law

Ground 4: the Tribunal erred in finding that the respondent performed services on the truck on 5 May 2021

Ground 5: the Tribunal erred in failing to afford the appellants procedural fairness by reason of bias against them 1. In view of our findings on grounds 1 and 2, it is unnecessary to determine whether grounds 3, 4 and 5 are made out.

Orders 1. We make the following orders: 1. the appeal is allowed; 2. the Tribunal's order made on 1 September 2021 dismissing the appellants' application is set aside; 3. the claims in the appellants' application are remitted to the Consumer and Commercial Division for rehearing by a differently constituted Tribunal upon the evidence already adduced to the Tribunal at first instance, the balance of the appellants' 6 July 2021 documents and such further evidence as the Tribunal may allow.

********** 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: 10 December 2021