Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Kennett v Financial Ombudsman Service Ltd [2017] NSWCATAP 59 Hearing dates: 28 November 2016 Date of orders: 17 March 2017 Decision date: 17 March 2017 Before: Hennessy LCM, Deputy President T Simon, Senior Member Decision: 1. The appeal is allowed. 2. The Tribunal's decision is set aside. 3. The issue of whether s 79F of the Fair Trading Act 1987 (NSW) requires that, to constitute a consumer claim, the services must be provided "in trade or commerce" is dealt with by the Appeal Panel by way of a new hearing. 4. The following order is made in substitution for the Tribunal's order: The application is dismissed. Catchwords: STATUTORY INTERPRETATION – meaning of s 79F(1) of Fair Trading Act 1987 – whether that provision requires that, to constitute a consumer claim, the services must be provided in trade or commerce Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW), s 29, s 80 Competition and Consumer Act 2010 (Cth), Sch 2 Consumer Claims Act 1998 (NSW), s 3 (repealed) Fair Trading Act 1987 (NSW) s 79, Part 6A Fair Trading Legislation (Repeal and Amendment) Act 2015 (NSW) Interpretation Act 1987 s3, s 33, s 34 Cases Cited: Bourne v Norwich Crematorium Ltd [1967] 1 WLR 691 David v Vodafone Pty Ltd [2006] VCAT 289 K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd [1985] HCA 48; (1985) 157 CLR 309 Lam v Steve Jarvin Motors Pty Ltd [2016] NSWCATAP 186 Leung v Westpac Banking Corporation (Civil Claims) [2016] VCAT 1367 Richardson v Austin (1911) 12 CLR 463 Rodriguez v United States [1987] USSC 36; 480 US 522 (1987) Victims Compensation Fund Corporation v Brown (2002) 54 NSWLR 668 Texts Cited: DC Pearce and RS Geddes, Statutory Interpretation in Australia, (8th ed 2014, Lexis Nexis Butterworths) at 169 Category: Principal judgment Parties: Melanie Kennett (Appellant) Financial Ombudsman Services Ltd (Respondent) Representation: Counsel: A d'Arville (Appellant) Agent: N Crowhurst (Respondent) File Number(s): AP 16/39568 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 1 July 2016 Before: D Harvey, General Member File Number(s): GEN 16/10436 REASON FOR DECISION Overview 1. Ms Kennett complained to the Financial Ombudsman Service Limited (FOS) about a decision of the National Australia Bank (NAB) that she owed the bank money. FOS investigated the complaint but Ms Kennett did not agree with the outcome. She lodged a consumer claim with the Consumer and Commercial Division of the Tribunal. The Tribunal decided that it did not have jurisdiction because the FOS had not provided Ms Kennett with services "in trade or commerce". In reaching that conclusion the Tribunal applied the wrong statutory provision. 2. On appeal, we have applied the correct provision - s 79F of the Fair Trading Act 1987 (NSW) - which is in slightly different terms from the provision the Tribunal applied. We have come to the conclusion that s 79F requires that, to be a consumer claim, the services FOS provided to Ms Kennett have to be "in trade or commerce". In this case, they were not provided "in trade or commerce" and the Tribunal has no jurisdiction. Grounds of appeal 1. The appeal was on a question of law: Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), s 80(2)(b). Ms Kennett submitted, and the FOS agreed, that the Tribunal had identified the wrong provision. The error was that the Tribunal applied the definition of "services" in "section 3 of the Act" instead of the definition in s 79F(1) of the Fair Trading Act. 2. We agree with the parties that the Tribunal identified the wrong provision. The relevant definition of services is in s 79F of the Fair Trading Act. We assume that the Tribunal's reference to "s 3 of the Act" was a mistaken reference to s 3 of the Consumer Claims Act 1998 (NSW) which was repealed on 1 October 2015. We have come to that view because the Tribunal applied a decision of the Victorian Civil and Administrative Tribunal in David v Vodafone Pty Ltd [2006] VCAT 289. The Tribunal noted that, "[T]he definition of 'services' in the Fair Trading Act 1999 (Vic) is in the same terms as the definition in the New South Wales Act". The definition of "services" in s 3 of the Fair Trading Act 1999 (Vic) is identical with the definition of that word in s 3 of the Consumer Claims Act 1998 (NSW). The definition of services in s 79F of the Fair Trading Act is slightly different. 3. As the Tribunal identified the wrong provision, and the applicable provision is in slightly different terms, we have decided to re-determine the issue: NCAT Act, s 80(3)(a). The issue is whether s 79F of the Fair Trading Act requires that, to constitute a consumer claim, the services must be provided "in trade or commerce". In our view it does. 4. The Tribunal found that it did not have jurisdiction because the FOS did not provide her with services 'in trade or commerce'. There was no challenge to that finding on appeal. Having come to that conclusion, there was no need for the Tribunal to consider Ms Kennett's submissions that her claim met the other requirements of a "consumer claim". Failing to address those submissions was not an error of law. 5. After the hearing we invited the parties to provide submissions as to whether the services FOS provided to Ms Kennett met certain other requirements of a "consumer claim". We apologise for putting the parties to the time and expense of responding to these submissions in circumstances where we have ultimately decided that the services were not provided in trade or commerce. It is not appropriate for the Appeal Panel to deal with those submissions because the issues were not determined by the Tribunal below and, given our conclusion, they do not arise on appeal. 6. Consequently, the appeal is upheld but the outcome is the same. The Tribunal does not have jurisdiction. We set out our reasoning below. Legislative scheme and history 1. Part 6A of the Fair Trading Act gives the Tribunal power to determine consumer claims and sets out the orders the Tribunal may make. It has four Divisions entitled "preliminary" (s 79B – s 79H), "application to and jurisdiction of Tribunal" (s 79I – s 79M), "orders of Tribunal" (s 79N – s 79V) and "miscellaneous" (s 79W and s 79 X). The Australian Consumer Law, which is Schedule 2 to the Competition and Consumer Act 2010 (Cth), regulates the relationship between consumers and those providing goods and services. 2. The Tribunal is given jurisdiction to hear and determine consumer claims by s 79J which is in Division 2: 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. Consumer claims come within the Tribunal's "general jurisdiction": NCAT Act, s 29. 2. A "consumer claim" is defined in s 79E, the "preliminary" Division of Part 6A, in the following terms: (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. Based on the definition of "consumer claim", and other definitions in Part 6A, the elements of a consumer claim arising from the supply of services, are that the claim must be: 1. made by a consumer (as defined in s 79D; see also s 79H); 2. arising from a supply (as defined in s 79G(2)); 3. of services (as defined in s 79F); 4. by a supplier (as defined in s 79D) to a consumer (whether or not under a contract) in the course of carrying on or purporting to carry on a business (as defined in s 4); 5. for one of the remedies listed in s 79E(1)(a) to (d). 1. Further limitations on the Tribunal's jurisdiction to hear a consumer claim are set out in s 79K (degree of connection with New South Wales); s 79L (limitation periods) and s 79M (claims relating to solicitor's or barrister's costs). No ground of appeal relates to the interpretation or application of these provisions. 2. Part 6A of the Fair Trading Act commenced on 1 October 2015: Fair Trading Legislation (Repeal and Amendment) Act 2015 (NSW)) No 12, Sch 1 [11]. Prior to that time, the definition of "services" in relation to a consumer claim, was set out in s 3(1) of the now repealed Consumer Claims Act 1998 (NSW): "services" includes any rights (including rights in relation to, and interests in, property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce and, without limiting the generality of the foregoing, includes: (a) the performance of work (including work of a professional nature), whether with or without the supply of goods, (b) the provision of gas or electricity or the provision of any other form of energy, (c) the provision, or the making available for use, of facilities for amusement, entertainment, recreation or instruction, (d) the letting of premises for vacation or recreational purposes, (e) the conferring of rights, benefits or privileges for which remuneration is payable in the form of a royalty, tribute, levy or similar exaction, (f) the provision of insurance cover (but not assurance cover in respect of a person's life), (g) a contract between a banker and a customer of the banker entered into in the course of the carrying on by the banker of the business of banking, (h) the provision of credit, but does not include rights or benefits being the supply of goods or the performance of work under a contract of employment. (Emphasis added.) 1. We will refer to this definition of services as the "repealed definition". 2. A slightly different definition of services was provided for in s 79F: (1) For the purposes of this Part, a reference to services is a reference to any of the following: (a) the performance of work (including work of a professional nature), whether with or without the supply of goods, (b) the provision of gas or electricity or the provision of any other form of energy, (c) the provision, or the making available for use, of facilities for amusement, entertainment, recreation or instruction, (d) the letting of premises for vacation or recreational purposes, (e) the conferring of rights, benefits or privileges for which remuneration is payable in the form of a royalty, tribute, levy or similar exaction, (f) the provision of insurance cover, (g) the rights or benefits provided, granted or conferred under a contract between a banker and a customer of the banker entered into in the course of the carrying on by the banker of the business of banking, (h) the provision of credit, (i) any other rights (including rights in relation to, and interests in, property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce. 1. We will refer to this definition of "services" as the "current definition". Consideration 1. The issue of statutory construction is whether or not the specific examples of services in s 79F(1)(a) – (h) are affected by the general words in s 79F(1)(i). If they are, then "the performance of work", must be provided "in trade or commerce" for it to come within the definition of "services'. 2. When construing a legislative provision, the Tribunal is to have regard to the purposes or objects of the legislation. Section 33 of the Interpretation Act 1987 provides that: 33 Regard to be had to purposes or objects of Acts and statutory rules In the interpretation of a provision of an Act or statutory rule, a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to a construction that would not promote that purpose or object. 1. The long title to the Fair Trading Act is expressed in the following general terms: "An Act to regulate the supply, advertising and description of goods and services and, in certain respects, the disposal of interests in land; to repeal the Consumer Protection Act 1969 and certain other Acts; and for other purposes." The object of Part 6A is "to provide for remedies for, and the straightforward resolution of, disputes concerning the supply of goods and services": Fair Trading Act, s 79B. In Victims Compensation Fund Corporation v Brown (2002) 54 NSWLR 668 at [9] Spigelman CJ referred to the following passage from a decision of the Supreme Court of the United States - Rodriguez v United States [1987] USSC 36; 480 US 522 (1987) at 525-526: "... No legislation pursues its purposes at all costs. Deciding what competing values will or will not be sacrificed to the achievement of a particular objective is the very essence of legislative choice - and it frustrates rather than effectuates legislative intent simplistically to assume that whatever furthers the statute's primary objective must be the law." 1. There is nothing in the long title or the objects of Part 6A which provide any assistance in determining the issue of statutory construction with which we are dealing. 2. The current definition must be read in the context of the whole Act and, in particular, Part 6A: K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd [1985] HCA 48; (1985) 157 CLR 309 at 315. It is a syntactical presumption that the meaning of a word or phrase is to be derived from its context: DC Pearce and RS Geddes, Statutory Interpretation in Australia, (8th ed 2014, Lexis Nexis Butterworths) at 169 – 171. Words such as "the performance of work" in s 79F(1)(a), are not to be read in isolation, but rather in the context of the section as a whole: Bourne v Norwich Crematorium Ltd [1967] 1 WLR 691 at 696. 3. The current definition of services in s 79F(1), begins with particular examples of services, including "the performance of work" and ends with the following general description of services: "any other rights … benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce." 4. The High Court has read the phrase "streets lanes entries or other public passages or places" as if the word "public" also qualified the words "places": Richardson v Austin (1911) 12 CLR 463. If s 79F(1) is read as one sentence, it is apparent that the intended meaning is that the particular examples of services in s 79F(1)(a) – (h) must also be "provided, granted or conferred in trade or commerce". Section 79F(1)(i) is merely a catch-all provisions for "other rights, benefits, privileges or facilities" that are "provided, granted or conferred in trade or commerce". (Emphasis added.) That interpretation is supported by the extrinsic material including material related to the legislative history of the provision: Interpretation Act 1987 (NSW), s 33 and 34. 5. In the Second Reading Speech for the Fair Trading Legislation (Repeal and Amendment) Bill 2015, in the Legislative Council, the Hon John Ajaka, Minister for Ageing, Minister for Disability Services and Minister for Multiculturalism, stated that: This bill repeals the Consumer Claims Act and transfers the essential provisions of that Act to the Fair Trading Act 1987 in order to preserve the existing jurisdictional coverage of the NSW Civil and Administrative Tribunal for consumer claims. (Emphasis added.) 1. The Minister went on to say that the Bill is "uncontroversial" and updates the provisions consistently with "contemporary drafting conventions". If parliament's intention had been to change the law so that a consumer could make a claim for relief in relation to services that were not provided 'in trade or commerce' it would have done so expressly. In our view, s 79F(1) was drafted differently from its predecessor, s 3 of the Consumer Claims Act 1998, to conform with contemporary drafting conventions, and not because parliament intended to change the law. 2. That view is supported by the observations of the Appeal Panel, differently constituted, in Lam v Steve Jarvin Motors Pty Ltd [2016] NSWCATAP 186 (22 August 2016) at [116] – [118] referring to the Consumer Trader and Tenancy Tribunal (CTTT), the Fair Trading Act (FT Act) and the Consumer Claims Act (CC Act): Prior to 1 October 2015, jurisdiction to hear and determine "consumer claims" was conferred on the CTTT, until 31 December 2013, and thereafter, NCAT, by the CC Act. Since 1 October 2015, jurisdiction to hear and determine "consumer claims" has been conferred on NCAT by Pt 6A of the FT Act. 117.Whilst it is important to identify correctly the Act which confers jurisdiction on the Tribunal, there does not appear to be any material difference between the jurisdiction conferred by the CC Act and that conferred by Pt 6A of the FT Act because Pt 6A is in substance a re-enactment of the CC Act. In some instances, the operative provisions of the CC Act have been re-enacted in Pt 6A without any alteration in wording, for example ss 6, 7(2), (3) and (4) and 10 of the CC Act and ss 79I, 79K(1) and (2), 79L(1) and 79R of the FT Act, respectively. Where there is some change in the wording, this is often merely the necessary consequence of repealing a stand-alone Act and incorporating its provisions into an existing Act. In respect of the other changes, the Second Reading Speech for the Fair Trading Legislation (Repeal and Amendment) Bill 2015, by which Pt 6A was introduced, indicates that the changes were not intended to change the jurisdictional coverage of the Tribunal but rather were intended "to update the provisions consistently with contemporary drafting conventions". The Minister said the following in his Second Reading speech (New South Wales Legislative Council, Parliamentary Debates (Hansard), 23 June 2015 at 1571). 1. As we have said, we understand that the parties agree that the services the FOS provided to Ms Kennett were not provided "in trade or commerce": David v Vodafone Pty Ltd [2006] VCAT 289; Leung v Westpac Banking Corporation (Civil Claims) [2016] VCAT 1367. Orders 1. We make the following orders: 1. The appeal is allowed. 2. The Tribunal's decision is set aside. 3. The issue of whether s 79F of the Fair Trading Act 1987 (NSW) requires that, to constitute a consumer claim, the services must be provided "in trade or commerce" is dealt with by the Appeal Panel by way of a new hearing. 4. The following order is made in substitution for the Tribunal's order: The application is dismissed. ******** 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: 17 March 2017