Civil and Administrative Tribunal New South Wales Medium Neutral Citation: McGinn v Kroopin [2024] NSWCATAP 33 Hearing dates: 8 February 2024 Date of orders: 07 March 2024 Decision date: 07 March 2024 Jurisdiction: Appeal Panel Before: P Durack SC, Senior Member L Wilson, Senior Member Decision: 1. The appeal from the Tribunal's decision dated 19 October 2023, the subject of written reasons dated 20 October 2023, is dismissed. 2. Leave to appeal from the Tribunal's decision dated 27 October 2023 is refused and the appeal is dismissed. 3. Each party is to pay their own costs of the appeal. Catchwords: CONSUMER LAW — jurisdiction — NSW Civil and Administrative Tribunal Consumer and Commercial Division — claim against director of supplier company who was not involved in the supply of services-supplier company de- registered after supply of the services-business of supplier company carried on by associated company-allegation of "illegal phoenix activity" — Tribunal found it had no jurisdiction to determine claim-following the decision applicant asked the Tribunal to recuse itself a bias in respect of outstanding question of costs this. APPEALS — questions of law concerning jurisdiction of the Tribunal — decision of the Tribunal upheld — second decision about recusal for bias upheld where not attended by sufficient doubt. Legislation Cited: Australian Consumer Law (NSW), ss 60, 236, 267(4) Civil and Administrative Tribunal Act 2013 (NSW), ss 28, 29(1), 62, 63, 80 Corporations Act 2001 (Cth) Crimes Act 1900 (NSW), s 192E Fair Trading Act 1987 (NSW), ss 28(1), 78J, 79E, 79J, 79L Home Building Act 1989 (NSW), s 48K Cases Cited: Champion Homes Pty Limited v Guirgis [2018] NSWCATAP 54 Infinity Security Group Pty Limited v Commissioner of Police, NSW Police Force [2023] NSWCATAP 173 Texts Cited: Nil Category: Principal judgment Parties: Sophia McGinn (Appellant) Nick Kroopin (Respondent) Representation: Appellant (Self-Represented) Respondent (Self-Represented) File Number(s): 2023/00356039 Publication restriction: Nil Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: Not Applicable Date of Decision: 19 October 2023 Before: D Ash, General Member File Number(s): HB 23/29673 REASONS FOR DECISION 1. This is an appeal from an order made by the Consumer and Commercial Division of the Tribunal that the appellant's claim be dismissed. As will be seen below, that decision was based upon fundamental legal problems with her claim. 2. The appeal also included an appeal from a subsequent decision of the Tribunal to refuse to recuse itself on the ground of bias. 3. In 2017 an employee of a company called Meco Australia Pty Ltd (Meco) carried out work on a toilet cistern at the appellant's apartment in Sydney. The apartment had been purchased by the appellant off-the-plan in 2014. 4. According to the appellant's witness statement, dated 1 August 2023, presented to the Tribunal at first instance, this was work done within the relevant warranty period concerning the product in question which had been supplied by Meco. 5. In her proceedings commenced on 28 June 2023, the subject of this appeal, the appellant complained that when the work was carried out the cover plate for the frame of the cistern was broken and never fixed. Those proceedings were commenced against the respondent, who at all material times was a director of Meco, after the appellant was informed by NSW Fair Trading that Meco had been deregistered as an insolvent company. The deregistration had occurred in 2020. 6. In her application commencing those proceedings the appellant sought compensation in the amount of $800 as the cost to replace the whole frame of the cistern. In her application the appellant contended that her application was commenced within the time limit for building defects. Her application was lodged as a home building matter. 7. In the abovementioned witness statement from the appellant, she contended that the respondent was personally liable for these damages (at [28], [36] and [40]). This was on the basis, firstly, that the respondent breached his director's obligations by using on unlicensed plumber to carry out the work and, secondly, that he breached his director's obligations as a consequence of what was described as "illegal phoenix activity" in relation to the transfer of Meco's business to Meco International, which was said to be the "phoenix company". 8. As also appears from this witness statement from the appellant, in advancing her claim, she relied upon the jurisdiction of the Tribunal in respect of building claims conferred by s 48K(1) of the Home Building Act 1989 (NSW) (HBA) and upon an ASIC statement about "illegal phoenix activity" concerning the transfer of assets by an existing company to another company to avoid paying outstanding debts. 9. Plainly, the appellant's claim as expressed in this witness statement confronted a number of fundamental legal problems, including that: * the respondent, himself, had not been a supplier of any services to the appellant (nor had he dealt with the appellant around the time when the services were supplied); * his obligations as a director were not owed to the appellant; * the claim did not appear to be a "building claim" within the meaning of the HBA because it appeared to fall outside the definition of "residential building work" because the reasonable market cost of the labour and materials involved did not exceed the prescribed amount of $5000; and * the claim was lodged in the Tribunal later than the three year period after the supply of services: see s 48K(3) of the HBA. 1. As appears from the Tribunal's reasons, at the hearing before the Tribunal the appellant came to advance her claim as a "consumer claim" for breach of the consumer guarantee in the Australian Consumer Law (NSW) (ACL NSW) concerning due care and skill in the supply of services: see s 60. 2. As will be outlined below, the Tribunal has jurisdiction to determine a "consumer claim" by reason of s 79J of the Fair Trading Act 1987 (NSW) (FTA). The definition of a "consumer claim" is set out in s 79E of that Act. 3. However, as expanded upon below, contrary to the appellant's submissions the Tribunal's jurisdiction in respect of consumer claims is limited by s 79L of the FTA, which provides: 79L Limitation periods (1) The Tribunal does not have jurisdiction to hear and determine a consumer claim if any of the following apply— (a) the cause of action giving rise to the claim first accrued more than 3 years before the date on which the claim is lodged, (b) the goods or services to which the claim relates were supplied (or, if made in instalments, were last supplied) to the claimant more than 10 years before the date on which the claim is lodged. (2) Nothing in this section affects any period of limitation under the Limitation Act 1969. The Tribunal's decisions 1. In its substantive decision dismissing the claim the Tribunal's ultimate conclusions were: 17. It may be sufficient to say that the Tribunal does not have power to hear and determine the application. However the Tribunal is satisfied that the better way to justly, quickly and cheaply identify the real issues in dispute is to add that any claim under either Act [the HBA or FTA] against the corporation had it not been deregistered would have failed by passage of time, the case on its merits would have failed in any event, and that there is no power in the Tribunal to hear and determine the application brought against the respondent. 1. In arriving at those conclusions, the Tribunal had earlier in its reasons concluded that: 1. The Tribunal lacked jurisdiction to hear and determine any claim under the HBA or FTA because the application was lodged more than 3 years after the supply of the services (at [10]); 2. The issue whether the director breached his obligations to the corporation was not a matter in respect of which the Tribunal has power (at [13]); 3. Contrary to the appellant's contention in respect of the alleged "illegal phoenix activity" that the Tribunal was required to determine the question whether an offence of obtaining financial advantage by deception under s192E of the "Crimes Act" had occurred, the Tribunal had no power to do so (at [14]-[16]). 4. There was no evidence that replacement of the cover plate was a reasonable step even if it be the case that there had been a lack of care and skill by Meco's employee (at [8]-[9]). 1. The Tribunal also reserved the question of costs and made directions in respect of the respondent's application for costs. 2. Subsequent to this decision, on 23 October 2023, the appellant applied for an order that the Member disqualify himself from dealing with the question of costs. In a decision dated 27 October 2023 the Member dismissed that application. The appeal 1. Under s 80 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) a party may appeal as of right to the Appeal Panel in an internal appeal on any question of law, otherwise leave to appeal is required. 2. The appellant framed her appeal as raising questions of law only and did not seek leave to appeal. We are prepared to accept that the matters put forward by the appellant as grounds for the appeal did raise questions of law concerning the jurisdiction of the Tribunal in respect of which the appellant has a right of appeal. 3. In her Notice of Appeal lodged on 9 November 2023, the appellant stated that the grounds of appeal were as follows (section 5B): The proceedings is (sic) a claim under Australian Consumer Law (ACL), however, Member Ash: 1. failed to take into account a mandatory relevant consideration: s 236 of ACL, in fact, Member Ash did not take into account any provision in ACL, it is an error of law. 2. took into account an irrelevant consideration: s 79L of Fair Trading Act, it is an error of law. 3. failed to provide any valid reason, a decision without evidential support is an error of law. 4. dismissed the proceedings because of "no jurisdiction", that's a question of law. Accordingly, the appeal is on four questions of law. 1. In her Notice of Appeal the appellant sought orders that both decisions be set aside, along with additional orders. 2. The parties provided written submissions in advance of the hearing of the appeal consisting of written submissions by the appellant dated 18 December 2023 (to which the above witness statement from the appellant was an attachment, along with other attachments), written submissions by the respondent dated 18 January 2024 and written submissions in reply by the appellant dated 29 January 2024. 3. In her written submissions concerning the substantive decision, the appellant addressed each of the above four grounds of appeal in turn. We turn to deal with the grounds of appeal concerning the substantive decision. Consideration Ground 1 1. As to Ground 1, the appellant's submissions included that: 1. Section 236 of the ACL (NSW) provides that the time limit for a claim is 6 years. Her claim had been lodged within the 6 year period, the breach having occurred on 20 October 2017. 2. The Tribunal failed to consider s 236 but, incorrectly, found that the claim failed "by passage of time". 3. The Tribunal failed to consider any provision in the ACL when dealing with her application under that Act. 1. However, the appellant's reliance upon s 236 of the ACL (NSW) was misplaced for, at least, the following reasons. 2. First, s 236 is concerned with conduct by another person which "contravened" a provision of Chapter 2 or 3 of the ACL (NSW). No such contravention by the respondent has ever been identified by the appellant, nor do we see how any such contravention may have occurred given the respondent's lack of involvement in relation to the supply of the relevant services to the appellant. 3. Secondly, the 3 year time limit in respect of the Tribunal's jurisdiction provided for in s 79L(1)(a) was applicable to any question as to the Tribunal's jurisdiction to deal with any claim under s 236. This was not affected by the 6 year period for commencing "an action" provided for in s 236(1) of the ACL (NSW) (see further below). 4. There was no reference to s 236 in the appellant's witness statement to the Tribunal. Rather, as we have already mentioned, the Tribunal treated the ACL (NSW) claim as one for breach of the due care and skill guarantee. The damages remedy in respect of such a claim is that provided for in s 267(4), not s 236. The 3 year time limit in s 79L(1) also applies to any claim under s 267(4). 5. Even if s 236 had been referred to by the appellant, it was and is, plainly, misconceived and we do not consider that the Tribunal was obliged to address it in the reasons. In any event, any failure to do so was immaterial to the outcome. 6. Accordingly, we reject Ground 1 of the appeal. Ground 2 1. In support of Ground 2 of the appeal, the appellant submitted that the ACL (NSW) had replaced the FTA in 2011 and, therefore, the 6 year time limit in s 236 overrode the 3 year time limit in s 79L of the FTA. 2. However, as we have already mentioned, the appellant is incorrect about this. 3. The provision concerning the Tribunal's jurisdiction in s 79L(1) is specific to the question of the Tribunal's jurisdiction to deal with a consumer claim of the nature that the appellant sought to advance under the ACL (NSW). Any such claim which the appellant wished to pursue outside the 3 year time limit needed to be brought in another jurisdiction. 4. The ACL (NSW) did not replace the FTA. The ACL (NSW) became a law of New South Wales in 2011 by virtue of s 28(1) of the FTA and according to the provisions of a new Part 3 of the FTA. These new provisions replaced existing consumer protection provisions in the FTA, but they did not replace the FTA as a whole. These new provisions became a part of an amended FTA, which Act came to include, in 2015, a new Part 6A of the FTA concerning the jurisdiction of the Tribunal in respect of consumer claims, which was not limited to, but included, claims under the ACL (NSW) to the extent they fell within the definition of a consumer claim in s 79E. These new provisions included s 79L containing the 3 year time limit in s 79L(1). 5. Accordingly, we reject Ground 2 of the appeal. Ground 3 1. As to Ground 3, the appellant submitted that all of the statements and conclusions supporting the Tribunal's decision were false and that the decision was without a valid reason and without evidential support. As to this, the appellant's submissions included: 1. The above submission that we have already dealt with concerning the ACL (NSW) replacing the FTA. 2. A submission that the Tribunal was wrong in stating that the issue of whether the director breached his obligations to the corporation was not a matter in respect of which the Tribunal had power because the Tribunal had jurisdiction to determine the claims in respect of consumer protections under the ACL (NSW) and claims to determine conduct covered by the Corporations Act 2001 (Cth) (except s 992A). 3. A submission that the Tribunal was wrong to state that it had no power to make a determination of the "illegal phoenix activities" as agitated by the appellant. 4. A submission that the Tribunal had referred to the wrong document supplied by the appellant in respect of her submissions concerning the "illegal phoenix activities" and that this had been done in order to dismiss and exclude her evidence. 5. Criticisms of the Tribunal's fact-finding about the damage the appellant complained about and the remedy she sought about this. 1. However, the appellant is not correct about the ultimate conclusions reached by the Tribunal about jurisdiction. 2. The starting point is that the Tribunal's jurisdiction in this matter is dependent upon showing that jurisdiction had been conferred upon the Tribunal by enabling legislation: see ss 28 and 29(1) of the NCAT Act. At the hearing of the appeal, the appellant referred to her reliance upon s 29 of this Act. She pointed to the Crimes Act 1900 (NSW) and the Corporations Act 2001 (Cth), in particular, without reference to any specific provision containing a conferral of jurisdiction upon the Tribunal. 3. However, unlike the FTA, the Crimes Act 1900 (NSW) and the Corporations Act 2001 (Cth) do not contain any conferral of jurisdiction upon the Tribunal, let alone a conferral of jurisdiction in respect of the sort of claim that the appellant seeks to pursue. 4. In respect of the claims of the nature raised by the appellant, jurisdiction depended upon showing that she had a legally recognised claim that fell within the meaning of a "consumer claim" in s 79J of the FTA and that such a claim did not fall within the 3 year time limit in s79L(1). 5. Section 79J provides: 79J General statement of jurisdiction The Tribunal has jurisdiction, except as otherwise provided by this Division, to hear and determine a consumer claim the subject of an application under this Division. 1. A "consumer claim" referred to in this section is defined in s 79E as follows: 79E Meaning of "consumer claim" (1) For the purposes of this Part, a consumer claim means a claim by a consumer, for one or more of the following remedies, that arises from a supply of goods or services by a supplier to the consumer (whether or not under a contract) or that arises under a contract that is collateral to a contract for the supply of goods or services— (a) the payment of a specified sum of money, (b) the supply of specified services, (c) relief from payment of a specified sum of money, (d) the delivery, return or replacement of specified goods or goods of a specified description. (2) For the avoidance of doubt, a reference in this Part to a consumer claim includes a reference to a claim by a consumer against a supplier (for example, a manufacturer or wholesaler) who is not the direct supplier of goods or services to the consumer if the claim arises from or in connection with the supply of those goods or services by the direct supplier to the consumer. 1. These provisions are concerned with civil claims. They are not concerned with claims that offences have been committed under the Crimes Act 1900 (NSW). The Crimes Act 1900 (NSW) does not confer jurisdiction on the Tribunal to determine allegations of fraud or dishonesty. 2. We have already addressed the legal problems with the appellant's claim pursuant to s 236 of the ACL. 3. Any claim for breach of a statutory guarantee in the ACL (NSW), such as the guarantee that services will be rendered with due care and skill in s 60, confronted the fundamental problems that the respondent had not been the supplier and that such a claim was outside the 3 year time limit. Although s 60 of the ACL (NSW) was not referred to in her written appeal submissions, it was a matter that the appellant referred to at the hearing of the appeal and, plainly, was a matter the Tribunal had in mind in its reasons for decision (see at [3] and [7]). 4. There is no conferral of jurisdiction on the Tribunal to deal with civil claims provided for in the Corporations Act 2001 (Cth) for breach of director's duties (there is no need for us to embark upon a discussion of the constitutional problems associated with any such conferral). Furthermore, such duties were not owed to the appellant. They were owed to the relevant corporation. Yet further, the appellant's contentions about "illegal phoenix activity" is not a claim that "arises from a supply of… services by a supplier to the consumer…", as provided for in s 79E(1). Rather, it arises from a separate and distinct transaction concerning the transfer of assets to avoid paying a debt(s). 5. These are fundamental obstacles to the pursuit of the appellant's claim in the Tribunal. Accordingly, it is unnecessary for us to address the question as to whether or not there was any merit in the appellant's criticisms of the Tribunal's decision referred to in paragraph 33(4) and (5) because they have no bearing upon these obstacles. 6. For these reasons, we reject Ground 3. Ground 4 1. The appellant's submissions concerning Ground 4 were based upon submissions that we have already addressed above. 2. Accordingly, Ground 4 is rejected. Bias 1. As we understand it, the appellant's contention of bias affects the second decision of the Tribunal only in which it refused to recuse itself from dealing with the question of costs of the proceedings at first instance. It is not advanced as a separate basis for challenging the substantive decision. Presumably, this is because the appellant seeks to establish on appeal that the Tribunal has jurisdiction to deal with her claim and the question of bias is irrelevant to that objective. 2. The second decision of the Tribunal is "an interlocutory decision" within the meaning of s 80(2)(a) of the NCAT Act: see the definition of interlocutory decision in s 4 of that Act, in particular, at (f). Accordingly, the appellant requires leave to appeal in respect of this decision. 3. As to the approach we should take to this question of leave to appeal, we follow the approach set out in previous decisions of the Appeal Panel, including 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]. 4. The appellant has not relied upon any error of principle in respect of the bias decision. 5. The appellant's submissions appear to consist of a repetition of her written application for recusal at first instance, dated 23 October 2023 attached to her application for a stay of the Tribunal's decision, which accompanied her Notice of Appeal, in conjunction with her contentions as to clear error of law and fact by the Tribunal in its substantive decision. 6. In this regard, it would seem that a prominent basis for the appeal concerning bias is that the Tribunal made errors of law and fact in its substantive decision that were so plain that they could only have occurred because the Member was actually biased in arriving at his decision. 7. In this regard, the appellant relied upon the alleged errors of law in conjunction with other factual matters in making the decision in support of a submission that the Member was so committed to a conclusion as to be incapable of alteration, whatever the evidence or arguments may be presented. It was submitted that because of this the Member made that the decision he did without any valid reason and that this was accompanied by, amongst other things, false statements and fabrication. 8. However, the clear errors of law relied upon were those concerning the relevance of s 79L, which the appellant said had been replaced by the ACL NSW, and concerning the power of the Tribunal to deal with issues concerning breach of duty as a director, conduct under the Corporations Act 2001 (Cth) and under the Crimes Act 1900 (NSW). We have rejected the appellant's contentions about these matters. 9. We can discern no proper basis for the appellant's submission that factual conclusions and statements made by the Tribunal about the appellant's claim were fabricated. The Tribunal expressed a view that the damage was a "break" rather than a "cracked plate" and that there was no evidence that the "break" had "impeached the cover plate" so that replacement was reasonable. The appellant is highly critical of these findings but we have seen no material that would entitle us to make the serious adverse findings that these were conclusions that the Tribunal knew to be false or fabricated. 10. The appellant also relied upon an alleged failure by the Tribunal to correct a passage in its written reasons concerning what it said was "(T)he foundation" for the appellant's assertion about "illegal phoenix activity". After the written reasons were issued, the appellant sent an email on 20 October 2023 stating that this passage needed to be corrected because the foundation for her assertion was what she had set out in her witness statement and not as described by the Tribunal. 11. We do not regard this criticism as warranted. The written reasons had been issued and the matter sought to be corrected was some distance from the sort of "obvious error" identified in s 63 of the NCAT Act that empowers the Tribunal to make a correction: see, in particular, the examples set out in s 63(3)(a)-(e). In this regard, we also note that the pertinent matter addressed by the Tribunal in the paragraph of the reasons in issue (paragraph 15) was the jurisdictional foundation for the claim rather than the factual foundation. 12. With respect to this last issue, the appellant is also critical of the alleged failure by the Tribunal to give any reasons for not making the correction which she sought and she complains that associated with this were a change in the Member's Notice of Order about this and his failure to actually attach the appellant's email to this Notice, despite the statement in the Notice that it was attached. 13. The appellant has not referred to any written request for reasons pursuant to s 62(2) of the NCAT Act. We find it impossible to draw any support for a conclusion of bias from the absence of such reasons, all the more so given the procedural issue involved and the apparent absence of any written request for reasons: see s 62(2) of the NCAT Act. The associated criticisms take the matter no further; they are not substantive. 14. We are not prepared to grant leave to appeal from the recusal decision. We cannot discern any error of principle or that the decision is attended by sufficient doubt to warrant a grant of leave. Costs of the appeal 1. The respondent sought an order that the appellant pay his costs of the appeal. He provided a breakdown of those costs, but the only, potentially, recoverable costs were an amount of $34 for the cost of his travel by train for the appeal hearing. 2. Clearly, special circumstances were required to be established before we could make an order for such costs: see s 60 (2) NCAT Act. 3. The respondent provided no written or oral submissions in support of his application for these costs, despite the requirement that he provide written submissions if such costs were sought before the appeal hearing (Note 7 (2) of the orders made on 22 November 2023). In these circumstances, we are not prepared to conclude that such special circumstances been established. 4. Accordingly, we reject the respondent's application for the costs of the appeal. Orders 1. For the above reasons we make the following orders: 1. The appeal from the Tribunal's decision dated 19 October 2023, the subject of written reasons dated 20 October 2023, is dismissed. 2. Leave to appeal from the Tribunal's decision dated 27 October 2023 is refused and the appeal is dismissed. 3. Each party is to pay their own costs of the 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 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: 07 March 2024