New South Wales Supreme Court CITATION : Westfield v Fair Trading Tribunal [2001] NSWSC 267 FILE NUMBER(S) : SC 13269/2000 HEARING DATE(S) : 29/01/01 and 20/02/01 JUDGMENT DATE : 15 March 2001 PARTIES : Westfield Concrete Co Pty Ltd & Ors v Fair Trading Tribunal of New South Wales JUDGMENT OF : James J at 1 COUNSEL : SJ Stanton - Plaintiff T Davie - Defendant SOLICITORS : Horowitz & Bilinsky - Plaintiff IV Knight - Defendant CATCHWORDS : Appeal From Fair Trading Trinual - statutory interpretation LEGISLATION CITED : Home Building Act Fair Trading Tribunal Act DECISION : Appeal dismissed. - 15 - THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION JAMES J Thursday 15 March 2001 13269/00 - WESTFIELD CONCRETE CO PTY LIMITED & Anor v FAIR TRADING TRIBUNAL OF NEW SOUTH WALES & Anor JUDGMENT 1 HIS HONOUR: This is an appeal on a question of law against a decision of the Fair Trading Tribunal of New South Wales ("the Tribunal"). The appeal was brought pursuant to s61 of the Fair Trading Tribunal Act ("the Act"). The parties to the appeal are the plaintiffs Westfield Concrete Co Pty Limited ("Westfield") and Romolo Tomasetti ("Mr Tomasetti"), who were the respondents in the Tribunal, and the defendants the Tribunal and the Director-General of the Department of Fair Trading ("The Director-General"), who was the applicant in the proceedings in the Tribunal. The first defendant, the Tribunal, filed a submitting appearance and the contest on the appeal was between the plaintiffs and the Director-General. 2 Two proceedings were commenced by the Director-General in the Tribunal, one proceeding against Westfield and the other proceeding against Mr Tomasetti, who at all material times has been a director of Westfield. Each proceeding was an application to the Tribunal to hear and determine a show cause action commenced by the issue of a notice to show cause, served pursuant 0to s63 of the Home Building Act 1989. Under s63 of the Home Building Act the Director-General may serve a notice on any individual or corporation against whom or which a complaint under Pt4 of the Home Building Act may be made, requiring the respondent to show cause why he or it should not be dealt with under Pt4. The notice to show cause served on Westfield was dated 24 March 2000. The notice to show cause served on Mr Tomasetti was dated 24 October 2000. Both in the Tribunal and on this appeal the submissions of the parties concentrated on the proceedings to which Westfield is a party. 3 In the particulars of each notice to show cause it was alleged that Westfield as the builder had failed to carry out building work or had failed to carry out building work properly under three contracts to do residential building work, the proprietors being, respectively, Mr and Mrs Krstic, Mr and Mrs Martin and Mr and Mrs Lovelock. 4 Before the proceedings against Westfield in the Tribunal had been commenced, legal proceedings arising out of the respective building contracts between Westfield and each of the three proprietors had been commenced and, in the case of Mr and Mrs Krstic, concluded. 5 On 10 October 1998 Mr and Mrs Krstic commenced proceedings in the Consumer Claims Tribunal, complaining that work required to be done under the building contract between Westfield and them had not been done or had not been done properly. The proceedings brought by Mr and Mrs Krstic in the Consumer Claims Tribunal were settled. A record of the Consumer Claims Tribunal states that at a hearing on 14 May 1999 the following orders were made:- "The parties have agreed to settle their dispute and (to) give effect to that settlement I order Westfield Concrete Co Pty Ltd t/as Boulevarde Homes of 60 The Boulevarde Fairfield West NSW 2165 to pay to Ljubomir Krstic & Zorica Krstic jointly and severally of 13/45 Bartley Street Canley Vale 2166 the sum of $3250.00 on or before 6 June 1999." 6 The court proceedings between Westfield and Mr and Mrs Martin were commenced on 23 July 1998 by Westfield filing a statement of liquidated claim in a local court pursuant to the Local Courts (Civil Claims) Act, claiming an amount under a common money count for work done and materials supplied. On or about 16 December 1998 Mr and Mrs Martin filed a notice of grounds of defence in which they alleged that Westfield had failed to carry out certain work in accordance with the building contract and claimed to be entitled to set off a large sum, which was alleged to be the amount of a quotation from another builder to complete the building work. On 1 October 1999 the proceedings between Westfield and Mr and Mrs Martin were transferred to the District Court. On 28 November 2000 an amended statement of liquidated claim was filed by Westfield. On 12 December 2000 an amended notice of grounds of defence was filed on behalf of Mr and Mrs Martin. A cross-claim has been brought by Mr and Mrs Martin against Westfield and Mr Tomasetti. These proceedings in the District Court between Westfield (and Mr Tomasetti) and Mr and Mrs Martin are still pending in the District Court. 7 The court proceedings between Westfield and Mr and Mrs Lovelock were commenced by the filing by Westfield of a statement of liquidated claim in a local court pursuant to the Local Courts (Civil Claims) Act on 6 January 1998. Westfield claimed an amount of money under a common money count for work done and materials provided. On 4 August 1998 Westfield obtained a default judgment. However, on 10 December 1998, on the application of Mr and Mrs Lovelock, the default judgment was set aside and on or about 3 September 1999 a notice of grounds of defence was filed, traversing the allegations in the statement of claim. The proceedings between Westfield and Mr and Mrs Lovelock are still pending. 8 In each proceedings commenced in the Tribunal by the Director-General the respondent (that is Westfield or Mr Tomasetti) filed an answer to the application to show cause, denying inter alia that Westfield had failed to carry out, or had failed to carry out properly, any building work which it had agreed to perform for any of Mr and Mrs Krstic, Mr and Mrs Martin and Mr and Mrs Lovelock. Westfield and Mr Tomasetti also notified the Tribunal that they wished to submit that, by reason of s22(7) of the Act, the Tribunal had ceased to have jurisdiction to hear or determine issues arising under the applications to show cause. On 8 November 2000 the Tribunal conducted a hearing of this jurisdictional question. In its reasons for decision delivered on 10 November 2000 the Tribunal held that it was not deprived of jurisdiction to hear and determine issues arising under the applications to show cause. 9 In the last two paragraphs of its reasons the Tribunal said:- "34. The Tribunal does not find that it is constrained by the terms of Section 22(7) from hearing and determining the show cause actions against Westfield Concrete Company Pty Limited and Romolo Tomasetti in respect of contracts to do building work and supply building materials under a contract with Noel and Nita Lovelock and Glen and Shelley Martin. 35 In spite of the shortcomings of sub-clause 8 of Section 22, as the Tribunal finds that the issue or issues before it are different to the issue or issues before other courts arising out of the same or similar facts, sub-clause 8 does not act to preclude a show cause action in the matter of show cause relating to work done and materials supplied under the contract with Ljubomir and Zorica Krstic, even though the civil dispute between the First Respondent and the Krstics was the subject of consent order relating to a settlement". 10 The questions of law to be determined on this appeal are whether the Tribunal erred in interpreting s22(7) of the Act as it did and whether the Tribunal should have held that s22(7) on its true interpretation applied so as to deprive the Tribunal of the jurisdiction it would otherwise have had to hear and determine issues in the show cause applications. 11 It is necessary to indicate the statutory context in which s22(7) occurs and to set out the provisions of s22(7). 12 Section 22 is in Pt 3 of the Act, which deals with the jurisdiction of the Tribunal. 13 Section 21, which is the first section in Pt 3, provides that the Tribunal has such jurisdiction to decide matters as is conferred on it by any act or law. A note to s6 of the Act in the authorised reprint of the Act indicates that jurisdiction has been conferred on the Tribunal by a wide range of acts, including such acts as the Consumer Claims Act, the Credit Act, the Fair Trading Act, and the Motor Dealers Act. 14 Section 22 of the Act is headed "Other Jurisdictions excluded in certain cases". In subsection (1) of s22 the expression "court" is defined. It was not disputed on the hearing of this appeal that the Consumer Claims Tribunal, the Local Court and the District Court all fall within the definition of "court" in subs (1) of s22. 15 Subsection (3) in s22, which was referred to in argument both before the Tribunal and on this appeal, provides as follows:- "If, at the time when an application was made to the Tribunal in accordance with this Act, no issue arising under the application was the subject of a dispute in proceedings pending before a court, a court has no jurisdiction to hear or determine such an issue". 16 Subsections (4) to (6) all relate to subs (3). 17 Section 22 (7) provides:- "If, at the time when an application is made to the Tribunal in accordance with this Act, an issue arising under the application was the subject of a dispute in proceedings pending before a court, the Tribunal, on becoming aware of those proceedings, ceases to have jurisdiction to hear or determine the issue". 18 Subsection (8) provides:- "Subsection (7) ceases to apply to the extent to which the proceedings concerned are dismissed or quashed by the court, or by another court, for want of jurisdiction or without deciding the issue on its merits, or withdrawn". 19 At this stage it is convenient to deal with the appeal, in so far as it relates to the building contract between Westfield and Mr and Mrs Krstic. 20 Counsel for the plaintiffs submitted that subs (8) of s22 had not produced the consequence that subs (7) ceased to apply, because the court proceedings between Westfield and Mr and Mrs Krstic had been terminated, otherwise than in any of the ways set out in subs (8). This submission, that subs (7) had not ceased to apply, was based on the assumption that subs (7) had initially applied in the case of Mr and Mrs Krstic. However, at the time when each application was made to the Tribunal the court proceedings between Westfield and Mr and Mrs Krstic had been disposed of, so that there were no longer any proceedings pending before a court. Hence, s22(7) could never have applied to any issue which related to the building contract between Westfield and Mr and Mrs Krstic. The Tribunal was correct in concluding that it was not deprived of jurisdiction to hear and determine issues relating to the building contract between Westfield and Mr and Mrs Krstic, even though the reasoning by which the Tribunal reached that conclusion is unclear. 21 It was common ground, both before the Tribunal and on the hearing of this appeal, that at the time each application to the Tribunal to hear and determine a show cause action was made, there were proceedings pending before a court between Westfield and Mr and Mrs Martin and between Westfield and Mr and Mrs Lovelock. It was also common ground that the Tribunal had become aware of the court proceedings between Westfield and Mr and Mrs Martin and between Westfield and Mr and Mrs Lovelock. It was also common ground, that issues arising under each application to the Tribunal included whether Westfield had carried out building work or had properly carried out building work under the building contract between it and Mr and Mrs Martin and under the building contract between it and Mr and Mrs Lovelock and that issues in the court proceedings between Westfield and Mr and Mrs Martin and between Westfield and Mr and Mrs Lovelock included whether Westfield had carried out work or had properly carried out work under the respective building contracts. 22 Having regard to the common ground between the parties, the question involving the interpretation of s 22(7) of the Act to be determined by the Tribunal was whether "an issue arising under the application (to the Tribunal) was "the subject of a dispute" in the court proceedings. The Tribunal held in effect that it was not the case that "an issue arising under the application… (was) "the subject of a dispute" in the court proceedings. 23 On this appeal it was submitted by counsel for the plaintiffs that I was bound to give a literal interpretation to the words of s 22(7) and that it was clear from an inspection, on the one hand, of the particulars of the notices to show cause and, on the other hand, the pleadings in the court proceedings that the issues arising under the applications to the Tribunal, whether Westfield had carried out building work or had properly carried out building work under the building contracts with Mr and Mrs Martin or with Mr and Mrs Lovelock, were the subject of dispute in the court proceedings pending between Westfield and Mr and Mrs Martin or between Westfield and Mr and Mrs Lovelock. It was submitted that my function was to interpret the words that the legislature had actually used and that I was not entitled to read words into subs (7) which the legislature had not used. It was pointed out by counsel for the plaintiffs that, if s 22(7) applied so as to take away the jurisdiction of the Tribunal, the Director-General was not bereft of remedies, because he could apply under the Home Building Act to the District Court for an order suspending Westfield's licence. 24 The key submission made by counsel for the Director-General was that the words "an issue arising under the application" in s22(7) should be interpreted as meaning "an issue arising under the application between the parties to the application (or their privies)" and that an issue arising under the application between the parties to the application in the Tribunal, that is between the Director-General and Westfield (or Mr Tomasetti) could not be the subject of a dispute in proceedings pending before a court between different parties, that is between Westfield and Mr and Mrs Martin or Westfield and Mr and Mrs Lovelock. 25 I have reached the conclusion that I should hold, generally for the reasons advanced by counsel for the Director-General, that the interpretation argued for by counsel for the Director-General is the correct interpretation, even if that interpretation might seem, at first sight, a less obvious interpretation of the words used in subs (7) than the interpretation contended for by counsel for the plaintiffs. 26 It was submitted by counsel for the Director-General that the word "issue", when used in a legal context, does not mean simply a question or point in dispute but means a question or point in dispute between the parties to a particular legal proceeding. In support of this submission I was referred to the definition of "issue" in the Macquarie Dictionary. One of the meanings assigned in the Macquarie Dictionary to the word "issue" is "a point in question or dispute as between contending parties in an action at law" (emphasis supplied). I was also referred to what Diplock LJ said in Fidelitas Shipping Co Limited v V/O Export Chleb (1966) 1 QB 630 at 641-2. His Lordship said:- "Arbitration, like litigation, is concerned only with the legal rights and duties of the parties thereto. It is concerned with facts only in so far as they give rise to legal consequences. The final resolution of a dispute between parties as to their respective legal rights or duties may involve the determination of a number of different 'issues', that is to say, a number of decisions as to the legal consequences of particular facts, each of which decisions constitutes a necessary step in determining what are the legal rights and duties of the parties resulting from the totality of the facts. To determine an 'issue' in this sense, which is that in which I shall use the word 'issue' throughout this judgment, it is necessary for the person adjudicating upon the issue first to the parties as to this. But while an issue may thus involve a dispute about facts, a mere dispute about facts divorced from their legal consequences is not an 'issue." 27 I accept that, in a legal context, the word "issue" means, or is at least capable of meaning, a point or question in dispute in a particular legal proceeding between the parties to that proceeding, as distinct from a point or question in dispute, without reference to the parties to the dispute. 28 If the word "issue" in subs (7) of s22 is interpreted in this way, then subs (7) has a sensible operation. The effect of subs (7) would be that the Tribunal ceases to have jurisdiction to hear and determine an issue arising under an application to the Tribunal, if the same issue is the subject of a dispute between the same parties in proceedings in a court between the same parties, which were commenced before the application to the Tribunal was made. In the present case the Director-General was a party to the applications to the Tribunal. However, given the wide jurisdiction of the Tribunal, it could well happen that the same private individuals or corporations are the parties to both an application to the Tribunal and proceedings in a court, in which an issue arising under the application is the subject of a dispute in the court proceedings. 29 Interpreting the word "issue" in this way also gives a sensible operation to s 22(3), which applies when an application to the Tribunal ante-dates any court proceedings. 30 That the word "issue" in subs (7) should be interpreted in this way is supported, in my opinion, by the terms of subs (8). Subs (8) provides that subs (7) ceases to apply to the extent to which the proceedings pending before a court are terminated by being dismissed or quashed for want of jurisdiction or without deciding the issue on its merits or are withdrawn, that is are terminated in some way not involving a determination of an issue on its merits. If the proceedings before the court are terminated in any of the ways set out in subs (8), there will not have been in the court proceedings any determination of an issue such as to give rise to an issue estoppel between the parties and the issue will remain unresolved between them and, in those circumstances, it is clearly appropriate that the deprivation of jurisdiction under subs (7) should cease and that the Tribunal should have jurisdiction to hear and determine the issue. If, on the other hand, an issue has been decided on its merits in the court proceedings, so as to give rise to an issue estoppel between the parties, there is no need for the cessation of the Tribunal's jurisdiction to hear and determine the issue to be removed. 31 If the word "issue" in subs (7) was to be interpreted in the way contended for by counsel for the plaintiffs, it is difficult to see why the Tribunal's loss of jurisdiction should cease, if legal proceedings between parties who are the not the same as the parties to the application to the Tribunal are disposed of, without the issue being decided on its merits, but the Tribunal's loss of jurisdiction does not cease, if those legal proceedings are disposed of in such a way that the issue is decided on its merits. 32 Counsel for the Director referred to the judgment of Yeldham J in Isaacs v Cachia (1981) 2 NSWLR 92. In that case Yeldham J had to interpret s 19(1) of the Consumer Claims Tribunal Act 1974 which provided:- "A court has no jurisdiction in respect of any issue in dispute in a consumer claim which has been referred to a consumer claims tribunal and has not been withdrawn or dismissed for want of jurisdiction". 33 At p98 Yeldham J said that the interpretation he had decided to give to s 19(1) "accords with what I regard as the intention of the legislature - ie that there shall not be current competing actions over the same issue, one before a tribunal and one before a court.." 34 Section 19(1) of the Consumer Claims Tribunal Act 1974 is not, of course, in the same terms as subs (7) or any part of s 22 of the Fair Trading Tribunal Act. However, the Consumer Claims Tribunal Act was a forerunner of the Fair Trading Tribunal Act and there are some similarities between s 19(1) of the Consumer Claims Tribunal Act and subss (3) and (8) of s 22 of the Fair Trading Tribunal Act. I accept counsel for the Director-General's submission that what Yeldham J said in Isaacs V Cachia gives some, limited, support to the view that an object of s 22, including s 22(7), should be regarded as the prevention of concurrent competing actions over the same issue between the same parties, one before the Tribunal and one before a court. 35 There is no doubt that, if the interpretation argued for by counsel for the plaintiffs was adopted, that "issue" in s 22(7) simply means a point or question in dispute, without regarding the specification of the parties to that point or question as being an essential ingredient in the concept, then some extraordinary consequences could follow. I am, of course, not to be taken as suggesting that they would necessarily follow in the present case. However, that extraordinary consequence could follow, if the interpretation was adopted, is relevant to deciding whether the interpretation should be adopted. One extraordinary consequence would be that a delinquent builder, apprehending that the Director-General was about to commence a show cause action based on defaults by the builder under building contracts, could, by getting in first and commencing proceedings in a court against the persons with whom he had the building contracts, oust the jurisdiction of the Tribunal to hear and determine whether there had been defaults by the builder under those building contracts. If the proprietors had already commenced court proceedings against the delinquent builder, the Tribunal would be deprived of jurisdiction to hear and determine whether there had been defaults by the builder under the building contracts. Such court proceedings, whether commenced by the builder or the proprietor, might, as has happened in the present case, last for years. While the court proceedings were still on foot, the jurisdiction of the Tribunal to hear and determine whether there had been defaults under the building contracts would be ousted. Even after such court proceedings were terminated, if they were terminated by some means other than those stated in s 22(8), the Tribunal would not regain its jurisdiction to hear and determine issues which had been the subject of dispute in those court proceedings. 36 In my opinion, the interpretation given by the Tribunal to s 22(7) of the Fair Trading Tribunal Act is correct and the Tribunal has jurisdiction to hear and determine the issues in the show cause applications. The proceedings by way of appeal should be dismissed. I order that the proceedings before me be dismissed and that the plaintiffs pay the costs of the defendant Director-General. ********** Last Modified: 04/11/2001 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.