New South Wales Supreme Court CITATION : T & I Engines Pty Ltd v Consumer Claims Tribunal & Anor [1999] NSWSC 370 CURRENT JURISDICTION : Civil FILE NUMBER(S) : 30085/98 HEARING DATE(S) : 20 April 1999 JUDGMENT DATE : 23 April 1999 T & I Engines Pty Ltd (Plt) PARTIES : Consumer Claims Tribunal (1D) D & A Orchard Investments Pty Ltd t/as Easy Tours (2D) JUDGMENT OF : Newman J LOWER COURT JURISDICTION : Consumer Claims Tribunal LOWER COURT FILE NUMBER(S) : LOWER COURT JUDICIAL OFFICER : J B Pender (Plt) COUNSEL : Submitting appearance (1D) J Stoljar (2D) A Harvey Sutton & Co (Plt) SOLICITORS : Crown Solicitor (1D) Orchiston Ranzetta Finney (2D) CATCHWORDS : Inferior courts; Consumer Claims Tribunal; requirements of natural justice; particulars of claim; obligation of Tribunal to supply particulars ACTS CITED : Consumer Claims Tribunal Act 1987 s 12 Trade Practices Act 1974 s 74; s 68A APA Life Insurance v Charles (1981) 2 NSWLR 352 at 359 White v Hall (1983) ASC 55-247 at 56,250 K & H Atkins v Cunningham (1981) 2 NSWLR 288 at 293 CASES CITED : Busby v Human Resources Commission (1998) 20 FLR 463 at 471 Amerasinghe v Minister for Immigration, Local Government and Ethnic Affairs (1991) 33 FCR 30 Videto v Minister for Immigration and Ethnic Affairs (1985) 8 FCR 167 at 178 O'Rourke v Miller (1985) 156 CLR 342 at 353 DECISION : Judgment for the defendants plus costs THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION NEWMAN J FRIDAY, 23 APRIL 1999 30085/98 - T & I ENGINES PTY LTD v CONSUMER CLAIMS TRIBUNAL & ANOR JUDGMENT 1 HIS HONOUR: The plaintiff carries on the business of importing and selling commercial diesel engines and motor vehicles and motor vehicle parts together with the repair and reconditioning of commercial diesel engines and parts. 2 The second defendant carries on the business of a tour operator and utilises buses in the course of its operations. 3 In January 1997 the second defendant wished to have a diesel engine in one of its buses reconditioned. The second defendant's manager, Mr David Orchard saw the plaintiff's General Manager, one Leopold Booy to arrange for that work to be done. Mr Booy agreed that his company would carry out the work and work was subsequently carried out on the subject engine, being completed on 20 February 1997 at a cost of $14,899. 4 In an invoice raised by the plaintiff company on the works' completion the following words appear: "THIS SALE IS MADE ON THE BASIS THAT: 1. All warranties as to merchantability or fitness for a particular purpose implied by law are hereby negated. …. 4. The Company warrants to the Buyer that provided the said goods are returned by the Buyer to the Company at its above address freight prepaid as a complete unit within 30 days of the date of this invoice the Company will, at its option: (a) rectify at the Company's expense any defects in the said goods other than defects caused by owner abuse of the goods or lack of proper maintenance and care of the goods, or repay to the Buyer the purchase price of the said goods, or replace the said goods, without further charge excluding freight to the Buyer, or supply to the Buyer equivalent goods to the said goods without further charge excluding freight. (b) the costs relating to the dismantling, installation and reinstallation occasioned by any rectification work by the Company referred to in Clause 4(a) above shall be the sole responsibility of the Buyer." 5 Following the receipt of the invoice the second defendant paid for the cost of the repairs and the bus in which the subject engine was fitted returned to operational use. 6 On 29 October 1997 while the bus was on tour on the south coast of this State the driver experienced loss of power and noticed blue smoke coming from the bus. Since the completion of the engine reconditioning by the plaintiff the vehicle had travelled approximately 50,000 kilometres. 7 The bus was taken to a company known as Nowra Alignment Centre Pty Limited which is the authorised repairer of engines of this type in that area. Prior to that happening Mr Orchard attempted to contact the plaintiff but was initially unable to do so. 8 Ultimately the second defendant sent a FAX to the plaintiff which gave rise to a reply that the plaintiff would examine the vehicle if it were brought to the plaintiff's premises in Sydney. Having been advised by Nowra Alignment Centre that the bus required a short engine and that the work which had been carried out by the plaintiff was unsatisfactory, the second defendant then authorised Nowra Alignment Centre to proceed with the work it recommended. The actual cost of that work was $21,500. Ultimately the plaintiff declined to pay for the repairs which had been carried out by Nowra Alignment Centre. 9 The second defendant by a claim form dated 12 December 1997 brought the matter before the Consumer Claims Tribunal seeking an order that the plaintiff pay the sum of $21,500. 10 In a letter accompanying the claim form the second defendant, having set out its allegations of fact, stated: "We are seeking compensation from T & I Engines for the amount of $21,500 for unsatisfactory workmanship, as we believe the work in which we had paid $14,000, was not carried out and the warranty was non existent, therefore costing us another $21,500 in repairs as well as several thousand in charters to cover our work while our coach was off the road." 11 The matter came before the Consumer Claims Tribunal and was heard by that Tribunal on a number of days, namely 18 March 1998, 6 May 1998 and 16 June 1998. On the first hearing day the second defendant was represented by a Mrs Annetta Orchard and on the other days by Mr David Orchard. The plaintiff, at all times, was represented by Mr Leopold Booy. 12 On 27 July 1998 the learned referee upheld the second defendant's claim on the basis of breaches of warranty pursuant to s 74 of the Trade Practices Act 1974 and having considered matters going to damages made an order in favour of the second defendant in the sum of $14,000. 13 By way of summons the plaintiff, pursuant to s 12 of the Consumer Claims Tribunal Act 1987, sought a declaration that it had been denied natural justice and an order in the nature of certiorari setting aside the Notice of Order and the Brief Reasons given by the referee in so determining. 14 Pursuant to s 12 of the Consumer Claims Tribunal Act , an order made by a referee in the Tribunal can only be challenged on very limited grounds including a denial of natural justice. 15 In his Brief Reasons, the learned referee, as I have said, found that the plaintiff had breached warranties implied into the contract between the parties by s 74 of the Trade Practices Act . Specifically he found that the plaintiff did not carry out the reconditioning of the motor with due care and skill. 16 Furthermore he found that while s 68A of the Trade Practices Act permits a supplier of goods and services to limit its liability he found that the terms contained in the invoice which I have set out above, did not form part of the contract. 17 His reason for so finding was that the invoice was not presented to the second defendant until the work had been completed. Accordingly, it was his finding that the conditions set out above did not constitute part of the terms of contract between the parties. 18 At the hearing oral evidence was given by a Mr Gill, the proprietor of Nowra Alignment Centre of the condition of the motor when it came to his company. He deposed that it was his opinion that the reconditioning of the motor had not been carried out in a proper tradesman like manner. Mr Gill was not only the proprietor of the final repairer but was also a qualified diesel engine mechanic. He was cross-examined by Mr Booy. 19 Additionally, a statutory declaration was adduced in evidence from the mechanic who had carried out work on the subject engine at Nowra Alignment Centre, a Mr Ian Johnstone in which he set out his observations of the condition of the motor when he first saw it. No request for his attendance for cross examination was made by Mr Booy nor did the referee suggest to him that he had a right to make such a request. 20 Mr Booy gave evidence in which he stated that the bus should have been moved to the plaintiff's premises for assessment pursuant to the warranty contained in the invoice, to which reference has already been made. He complained that the plaintiff had thus not been given an opportunity to examine the engine. 21 As I have already said, the learned referee found that the terms contained in the invoice did not form part of the terms of contract and that accordingly the plaintiff had not contractually limited its liability pursuant to s 68A of the Trade Practices Act 22 He preferred the oral evidence of Mr Gill and the evidence contained in Mr Johnstone's statutory declaration to the evidence of Mr Booy and a Mr Hunt who was the plaintiff's workshop manager. Mr Hunt had given evidence that if the engine had the faults listed by Mr Johnstone his view was the problems complained of namely loss of power and excessive smoke accompanied by excessive fuel consumption and noise from the motor would have been apparent well prior to 29 October 1997. 23 Before this Court the plaintiff submitted that it had been denied natural justice because: 1. The referee had failed to identify and appraise the plaintiff of the issues before the Tribunal. 2. The referee failed to draw the plaintiff's attention to the issues which the plaintiff described as critical, namely whether the terms of the invoice formed part of the contract and whether there be a breach of express warranty or any implied terms and what those implied terms were. 3. The fact that the plaintiff had been unable to inspect the subject engine which the plaintiff put was a denial of inspection. 4. The fact that the referee had not told Mr Booy of his right to cross examine Mr Johnstone. 5. That an invoice from the Nowra Alignment Centre which was tendered in the course of the hearing was not shown to Mr Booy. 24 In relation to its allegation that the referee failed to properly formulate and indeed note the issues, reliance was placed upon what had fallen from this Court in a number of case. First in APA Life Insurance v Charles (1981) 2 NSWLR 352 at 359, Hunt J observed: "… where, as here, the issues in dispute are not properly formulated by the claimant, it is the duty of the referee to formulate those issues, to note them on the record of the tribunal and to resolve them on the available evidence: see s 12 and s 32." 25 Furthermore in White v Hall (1983) ASC 55-247 at 56,250 he said: "It is (the referee's) obligation to ensure that the parties understand how their case is to be presented and to assist them - and that means to assist both the consumer and the trader - to present both those cases without legal assistance." 26 Rogers J in K & H Atkins v Cunningham (1981) 2 NSWLR 288 at 293: "It has been said that natural justice is nothing more than fairness writ large. Common ordinary fairness, in my view, requires that where a party is brought before a tribunal, the boundary of whose jurisdiction and powers are extremely wide, and where the scope for error is so large, having regard to the absence of legal representation and the absence of the constraints of the rules of evidence, fairness and natural justice cries out for strict adherence to such safeguards as the legislature has enshrined in the constituent act." 27 The learned referee noted the issue as being breach of contract. It was submitted that what he should have noted and brought to the attention of the plaintiff the following as being the issues were: 1. Is there a contract or a do and charge agreement? 2. Did the plaintiff's invoice set out terms which became part of the contract? 3. Is the defendant entitled to an order upon the basis of a breach of the express warranty contained in that invoice? 4. What other terms form part of the contract? 5. Is the second defendant entitled to an order upon the basis of a breach of any other terms contained in the contract? 6. Was there a reasonable opportunity on the plaintiff to inspect the engine in Nowra? 7. What difference does any failure by the plaintiff to take advantage of such a reasonable opportunity make to the second defendant's entitlement? 28 The issue as raised in the letter accompanying the claim form is as I have set out above. 29 In Busby v Human Resources Commission (1998) 20 FLR 463 at 471 the full Federal Court in dealing with an allegation of breach of natural justice concerning the termination of the appellant's appointment as an officer of the Australian Telecommunications Commission observed as follows: "What is required for compliance with the rules of natural justice is that if the Commission takes into consideration something which might be held against him it should first give him an opportunity of rebuttal or explanation. A fair opportunity will of course only be afforded him if he is told the substance of the matter to be answered." 30 Statements of similar effect were made by Olney J in Amerasinghe v Minister for Immigration, Local Government and Ethnic Affairs (1991) 33 FCR 30. 31 Indeed, in Amerasinghe Olney J found that there is no general proposition of law where a decision maker proposes to reach a decision based upon a particular fact that the party against whom that finding is to be made must first be given an opportunity to address the issue. Indeed, he went on to observe that much will depend upon whether the issue in question is one which obviously arises from the circumstances of the case and that the party in question should be treated as having knowledge of it. 32 Indeed, in Videto v Minister for Immigration and Ethnic Affairs (1985) 8 FCR 167 Toohey J at 178 observed: "But much will depend upon the nature of the material before the decision-maker, the importance of the decision to be made and its consequences for the person to whom the decision relates." 33 In my view the plaintiff's attention had been clearly drawn to the substance of matters upon which the second defendant was relying, the fact that the matter was not set out chapter and verse as the plaintiff suggests it should have been does not mean that it was denied natural justice. 34 In my view the nature of the implied warranties to a contract contained in s74 of the Trade Practices Act was clearly brought to the plaintiff's attention by the letter accompanying the claim form. 35 It was plain from the nature of the evidence given by Mr Gill and the statutory declaration of Mr Johnstone that their evidence went to the issue which the second defendant was raising. It was an issue which the referee found in favour of the second defendant. 36 Indeed, the plaintiff, through Mr Booy, relied, as I have said, as a matter of defence upon the terms contained in the invoice it raised on the completion of the work. The referee in my view correctly held, as I have said, that the terms set out in the invoice could not form part of the contract because the invoice was raised after the completion of the work. 37 It follows from what Olney J said in Busby that it was not necessary for the referee to disclose to the plaintiff prior to deciding the case the precise basis upon which it is to be decided. 38 In short what happened before the referee was that allegations were made in accordance with the substance of the claim set out by the second defendant in its letter accompanying the claim form - the plaintiff raised as matter of defence to those allegations the warranty set out in its invoice - and in the result the referee decided both issues in favour of the second defendant. 39 In my view the plaintiff has not established that the manner in which the issues were identified and appraised to it by the referee and his notation of the issues amount to a denial of natural justice. 40 Furthermore, the fact that the plaintiff failed to establish that the warranty which it claimed was part of the contract did not occur because Mr Booy did not have his mind directed to a critical issue. 41 The matter was raised and as I have said the referee is not required in making his determination to disclose to the plaintiff the precise basis upon which he had to decide the matter. 42 Again, I am of the view that the plaintiff has failed to establish that it was denied natural justice in this regard. 43 I now turn to the plaintiff's allegations that the referee, by not telling Mr Booy that he had a right to cross examine Mr Johnstone, amounted to a denial of natural justice. 44 As I have said the evidence of Mr Johnstone was challenged through the evidence of Mr Hunt. Not only that in the conduct of the proceedings the evidence of Mr Gill was subject to cross examination. The requirement of natural justice is that of fairness. See O'Rourke v Miller (1985) 156 CLR 342 at 353 per Gibbs CJ. 45 The fact that the plaintiff challenged the evidence of Mr Johnstone through Mr Hunt and cross examined Mr Gill, inter alia, on the matters raised by Mr Johnstone does not establish unfairness. Accordingly, I am of the view that the plaintiff has not established that this aspect of its case has been established. 46 I shall assume for the purposes of these reasons that the invoice emanating from Nowra Alignment Centre was not shown to Mr Booy when it was tendered. In my view nothing of importance in the matter turned upon this fact. The evidence was given by Mr Gill of the work done by his company and there is no suggestion made that the invoice added in any way to that evidence. 47 Indeed, the amount of the cost of the repairs namely $21,500 was not adopted as being the measure of damage by the referee. He found that the second defendant was entitled to an order for $14,000. No unfairness thus ensued to the plaintiff as a consequence of Mr Booy not being shown the invoice and thus this allegation of denial of natural justice also fails. 48 Finally, I turn to the plaintiff's allegation that a denial of natural justice was brought by the referee's failure to provide the plaintiff an opportunity to inspect the engine. 49 There was nothing before the referee which would suggest that the engine was still available. The plaintiff at all times had relied upon the warranty contained in the invoice and thus did not seek to inspect the engine before it was repaired. It is clear that had the plaintiff wished to it could have ascertained prior to the repair being carried out where the engine was and could have availed itself of an opportunity to inspect it. 50 As there was nothing before the learned referee to suggest that the engine was still available for inspection and the fact that the plaintiff could have inspected the engine prior to those repairs had it sought to do so, leads me to the conclusion that again no unfairness arose as a consequence of the ruling of the learned referee on this point. Accordingly this allegation also fails. 51 In the event it follows that the plaintiff has failed to establish that it was denied natural justice and that accordingly there will be a judgment for the second defendant plus costs. It follows that there will be judgment for the defendants plus costs. 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