Dee Why Auto Clinic and anor. v Roads and Maritime Services

By an amended summons dated 18 August 2016 the plaintiffs seek to appeal against a decision of Magistrate Bradd delivered in the Local Court on 7 July 2016, in which his Honour dismissed an appeal brought by the plaintiffs against the decision of the defendant to cancel the second plaintiff’s authority to operate an Authorised Inspection Station (the business of such Inspection Station having been carried on by the second plaintiff under the name of the first plaintiff). That decision followed a hearing which proceeded before his Honour on 7 March 2016 and 22 April 2016.

The orders sought in the summons are pleaded in the following terms:

The summons then pleads 13 separate grounds of appeal. Leaving aside a complaint of a failure on the part of the Magistrate to correctly apply the relevant standard of proof, common to the majority of those grounds is a complaint that the Magistrate failed to give adequate reasons for his decision.

The manner in which the summons has been pleaded has a number of fundamental shortcomings.

Firstly, paragraph (1) of the summons seeks leave to appeal, in circumstances where the plaintiffs’ principal submission is that the Magistrate’s reasons were inadequate, and that such inadequacy amounts to an error of law. If the plaintiffs succeed in establishing an error of law on that basis, leave to appeal is not required in light of s. 39 of the Local Court Act 2007 (NSW) (“the LCA”) which confers an appeal as of right in the following terms:

Secondly, paragraph (3) of the summons pleads that the relevant determination was one “to cancel the authority of the First Plaintiff as a proprietor of an authorised inspection station and the authority of the Second Plaintiff as an authorised examiner”. They were not the terms of the defendant’s determination at all. The determination is set out in a letter of 5 June 2016 addressed to the second plaintiff. Its terms were “that (the second plaintiff’s) Authority to operate an Authorised Inspection Station be cancelled as of the 10 July 2015”.

Thirdly, paragraph (3) of the summons seeks an order setting aside the determination of the defendant’s delegate. Properly understood, what the plaintiffs seek, as was confirmed by counsel at the commencement of the hearing, is an order that the Magistrate’s decision be set aside.

Fourthly, the terms of the order sought in paragraph (4) of the summons invite a determination of the matter on the merits. As previously outlined, s. 39 of the LCA confers a right of appeal on a party on a question of law. The powers of the Court in determining such an appeal are set out in s. 41 of the LCA which is in the following terms:

The provisions of s. 41 of the LCA cannot be read as conferring a power on this Court to review the merits of the case, or to otherwise expand the scope of the appeal which is conferred by s. 39, so as to allow a series of new findings of fact to be made over and above those made by the Magistrate: B & L Linings Pty Limited v Chief Commissioner of State Revenue (2008) 74 NSWLR 481; [2008] NSWCA 187. However that is precisely what paragraph (4) of the summons invites the Court to do.

Counsel for the plaintiffs expressly conceded that the summons was not properly pleaded. The hearing proceeded on the basis that that the plaintiffs’ principal complaints were that the Magistrate:

Both parties accepted that if one or other of those grounds was made out, the appropriate order would be that the proceedings be remitted to the Magistrate to be further dealt with according to law.

Also before the Court is a notice of motion filed by the plaintiffs on 23 February 2017 seeking leave to adduce further evidence “pursuant to s. 57A(8) of the Supreme Court Act 1970 (NSW)”. Leaving aside the fact that s. 57A(8) of that Act does not exist, I was informed at the commencement of the hearing that this notice of motion was no longer pressed. An order dismissing it will be incorporated in the final orders that I make.

The parties prepared a joint Court Book containing all of the relevant evidentiary material which was marked Exh. A.

The defendant administers what is known as the Authorised Inspection Scheme (“AIS”) pursuant to which people who are suitably qualified, and who are of suitable character, are authorised to (inter alia) inspect and test motor vehicles for registration, and to operate premises which provide those (and related) services. The second plaintiff carries on the business of an Authorised Inspection Station under the name of the first plaintiff. The second plaintiff was appointed as an examiner under the AIS on 7 June 1994.

The safety standards and business requirements of the AIS are prescribed by the AIS Business Rules (“the Rules”). Those rules are administered by the defendant.

On 24 February 2015 the defendant issued the second plaintiff with a Notice to Show Cause why his authorisation should not be cancelled. The second plaintiff responded to that Notice, following which the matter was referred to a Committee of Review (“the Committee”) pursuant to cl. 63 of the Road Transport (Vehicle Registration) Regulation 2007.

The Committee issued a report on 14 May 2015. The Committee found that a number of provisions of the Rules had been breached, and recommended the cancellation of the second plaintiff’s authorisation. A note contained in the report recorded the following:

The Committee’s decision was approved by the defendant’s delegate on 28 May 2015. By letter of 3 June 2015 the General Manager (Accreditation) of the defendant wrote to the second plaintiff stating (inter alia):

The letter went on to particularise those Rules which the Committee found had been breached. Those particulars mirrored the contents of the Committee’s report which included the following table:

On 18 June 2015 an appeal was lodged in the Local Court against the defendant’s decision. Under the heading “Orders Sought” in the following was stated:

The hearing before the Magistrate extended over 2 days and concluded on 27 April 2016. A number of witnesses gave evidence in the course of that hearing, including the second plaintiff. At the conclusion of the evidence and submissions the Magistrate reserved his decision. In a judgment handed down on 7 July 2016, he dismissed the appeal.

In light of the principal complaint of the plaintiffs, it is appropriate to go directly to the Magistrate’s reasons.

Having set out the relevant background, the Magistrate identified the issue before him in the following terms (at [9]):

The Magistrate then proceeded (commencing at [10]) to make reference to the meaning of the term “fit and proper person”. In doing so, he set out passages of the judgment of the Full Court of the Federal Court of Australia in Bond v Australian Broadcasting Tribunal (1989) 89 ALR 185, before making reference (at [11]) to the conclusions reached by the Committee. It should be noted that the decision to which his Honour referred was subsequently reversed by the High Court: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321; [1990] HCA 33.

Commencing at [13] the Magistrate set out the various Rules which were said to have been breached by the plaintiffs. Somewhat curiously, he appears to have done so by reference to the original Notice to Show Cause, as opposed to doing so by reference to the report of the Committee (the Committee’s report having been the basis of the defendant’s decision which was the subject of the appeal before him). In any event, the Magistrate (commencing at [19]) proceeded to make reference to some (but not all) of the evidence, before making reference (commencing at [39]) to some (but again not all) of the competing submissions of the parties. In the latter respect, the Magistrate’s judgment made no reference at all to one of the principal submissions of counsel for the plaintiffs, a matter which I have discussed further at [58] and following below.

The Magistrate then made a series of factual findings regarding breaches of the Rules (commencing at [47]):

On the basis of the breaches of the Rules which he had found were established, the Magistrate then found that the second defendant was not a fit and proper person to be a proprietor of an Authorised Inspection Station (commencing at [49]):

Counsel for the plaintiffs submitted that the Magistrate had failed to comprehend, and apply, the so-called “Briginshaw standard”. Counsel was not able to point to anything said by the Magistrate in his judgment which supported that proposition. Rather, counsel submitted that it was a conclusion which was to be inferred from a reading of the judgment as a whole.

The more substantive complaint made by counsel for the plaintiffs concerned what was said to be the inadequacy of the Magistrate’s reasons. Counsel submitted that in paragraph [47] of his judgment, the Magistrate had made various factual findings regarding breaches of the Rules, but had failed to expose the reasoning process which had led him to reach such findings. Counsel submitted that this failure occurred in circumstances where there was:

It was submitted that in those circumstances the Magistrate’s obligation to give reasons included an obligation to explain why it was that he had apparently preferred some parts of the evidence over other parts.

Counsel for the plaintiffs further submitted that a determination of whether some of the alleged breaches had occurred necessarily involved an assessment of the second plaintiff’s credit. He also pointed out that in respect of other alleged breaches there was expert evidence adduced before the Magistrate which his Honour (in light of his conclusions) had apparently rejected. Counsel submitted that all of these matters heightened the Magistrate’s obligation to provide proper reasons and that as a consequence of his failure to do so, the plaintiffs found themselves in a position where they simply did not know why the Magistrate had found against them.

Counsel for the plaintiffs further submitted, in effect, that the Magistrate’s failure to provide adequate reasons for his factual findings in respect of breaches of the Rules was compounded by the fact that he had used those findings as the basis upon which to then conclude (at [49], [50], [52] and [53] of his judgment) that the second plaintiff was not a fit and proper person to hold the relevant authorisation. It was submitted that the Magistrate had not explained why he had concluded that the various breaches of the Rules that he had found were established were of a kind which rendered the second plaintiff unfit.

In advancing these submissions, counsel for the plaintiffs pointed specifically to the fact that the Magistrate had reserved his decision for more than three months following the conclusion of the evidence, during which period it was to be inferred that he had the benefit of access to a transcript of the evidence. Counsel submitted that in these circumstances, the various observations of this Court (as well as those of the Court of Appeal and Court of Criminal Appeal) which recognise the necessity to make allowance for the circumstances in which ex-tempore judgments are often delivered were of no application.

Counsel for the defendant submitted that the Magistrate had clearly approached his determination of the matter in a way which was consistent with the provisions of s. 140(2) of the Evidence Act 1995 (NSW), and the decision in Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 esp. at 361-362. Counsel submitted that the Magistrate was obviously aware of the standard of proof which was to be applied, and that there was nothing contained within his judgment which suggested that such standard was either not applied, or applied other than correctly.

Counsel for the defendant submitted that it was clear on a reading of the Magistrate’s judgment that his Honour had decided the issue by reference to the evidence before him, and had properly identified the basis of the conclusions that he had reached. It was submitted that it was clearly open to his Honour to conclude that he was not persuaded by the evidence relied upon by the plaintiffs, and that his reasons made clear why this was so. It was submitted that the essential bases of his reasons were properly identified, and that even if a conclusion were reached that aspects of those reasons were “less fulsome” than what might have been desirable, they “did not reflect a lack of appreciation of the judicial task at hand”.

Counsel for the defendant then made a number of specific submissions regarding the Magistrate’s reasons.

Firstly, he submitted that it was necessary to have regard to the principle that the standard of reasons which is required can vary markedly according to the circumstances of the case, and the context in which such reasons are given.

Secondly, it was submitted that in reviewing the Magistrate’s reasons it was necessary to bear in mind that the Local Court operates under a heavy workload which imposes practical limits on the length, and level of detail, of reasons which are delivered. In this regard, counsel submitted that it was not incumbent upon the Magistrate, in determining the matter, to deal with each and every piece of evidence which was before him, and explain at length why he accepted or rejected it.

Thirdly, it was submitted that there was an inescapable inference to be drawn from his Honour’s reasons that he did not accept the evidence of the second plaintiff in material respects. It was submitted that for the purpose of giving reasons, it was sufficient if such a conclusion could be inferred from the evidence.

Finally, it was submitted that in determining whether the reasons were adequate the fundamental question was whether or not the Magistrate had identified the essential basis for his resolution of the issue(s) between the parties. It was submitted that this test had been met.

In terms of the plaintiff’s first complaint, Dixon J made the following relevant observations in Briginshaw (commencing at 361):

These principles are reflected in s. 140 of the Evidence Act 1995 (NSW) which is in the following terms:

None of the matters of which Dixon J spoke in Briginshaw imposes a test in civil litigation other than proof on the balance of probabilities. What is required is that when loading the scales to conduct the balancing exercise, appropriate weight is given to the matters to which Dixon J referred. The so-called “Briginshaw standard” is not a third standard of proof: Gianoutsos v Glykis [2006] NSWCCA 137 at [48] – [49] per McClellan CJ at CL.

As to the plaintiffs’ second complaint, a failure to give sufficient reasons will be reviewable for legal error: Inghams Enterprises Pty Limited v Lakovska [2014] NSWCA 194 at [2] per Basten JA, citing Campbelltown City Council v Vegan (2006) 67 NSWLR 372; [2006] NSWCA 284 at [130] and Wingfoot Australia Partners Pty Limited v Kocak (2013) 252 CLR 480; [2013] HCA 43 at [28]. However it is necessary to bear firmly in mind that a complaint that reasons are inadequate, even if made out, is not a basis for re-agitating the decision given at first instance: Berrigan Doube Lawyers Pty Limited v Millar Eagger Pty Limited [2016] NSWSC 235 at [64] per Beech-Jones J.

In Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430 Meagher JA observed (at 443) that reasons need not necessarily be lengthy or elaborate, and that the content of the obligation to give reasons may not be the same in every case. His Honour recognised that no mechanical formula can be applied for the purposes of determining the extent of the obligation to provide reasons. However, he identified what he regarded as three fundamental elements of a statement of reasons (at 443):

His Honour went on to observe (at 444):

In Pollard v RRR Corporation [2009] NSWCA 110 McColl JA (commencing at [56]) undertook, by reference to a number of authorities, a review of the principles governing the obligation to give reasons. The following propositions may be extracted from her Honour’s judgment:

These principles were applied by Gleeson JA in Keith v Gal [2013] NSWCA 339 at [113].

An appellate Court should make due allowance for the often pressured circumstances in which ex-tempore judgments are delivered in busy lists, be it in the Local Court or in the District Court: see for example Maviglia v Maviglia [1990] NSWCA 188 at [1] per Mason P; Rose v R [2013] NSWCCA 71 at [41] per Bellew J and the authorities cited therein. However contrary to the submission of counsel for the defendant, those authorities have no application in the present case, given that the Magistrate reserved his decision for more than three months. The Magistrate obviously had a considerable period of time in which to consider the matter with, I infer, the benefit of a transcript of the evidence and submissions.

I am not satisfied that the complaint made by the plaintiffs regarding the Magistrate’s asserted failure to properly apply the Briginshaw test is made out. The Magistrate’s reasons are replete with references to that test. He was clearly aware of it and it is to be inferred that he applied it. There is nothing in his reasons to suggest that he did not do so.

However bearing in mind the principles which are set out at [43]-[46] above, the complaint made by the plaintiffs regarding the inadequacy of the Magistrate’s reasons is made out on a number of bases.

The Magistrate’s judgment reflected his having taken what might be described as two steps in reaching his ultimate conclusion that the second plaintiff was not a fit and proper person to hold the relevant authorisation. The first step involved his finding (at [47]) that a number of the Rules had been breached. True it is that some of those breaches which were found to have been committed were conceded by the plaintiffs. So much is clear from what was put by counsel for the plaintiffs in his final address to the Magistrate. Equally however, some of the alleged breaches were in dispute. The basis on which, and the reasoning process by which, the Magistrate found that those disputed breaches were established is simply not apparent from the judgment.

A case in point (although not the only example) is the Magistrate’s finding that there had been a breach of Rule 1.5.2 which required that all equipment (specifically in this case, a headlight test machine) be maintained in good working order. It is apparent that when interviewed by an officer of the defendant in the course of the Committee’s investigations, the second plaintiff maintained that the headlight testing machine remained in good working order and (as he put it) was “doing its purpose accurately as per the RMS Rules”. In his affidavit filed in the proceedings before the Magistrate (at paragraph 11(d)) the second plaintiff identified that the machine was missing a screw, but asserted that this had no effect upon its capacity to function properly. The clear effect of the second plaintiff’s evidence was to take issue with the assertion that the machine was other than in good working order.

It is noteworthy in this regard that to the extent that the Magistrate summarised the second plaintiff’s evidence he did so within three short paragraphs of his reasons ([36]-[38]), none of which made reference to any of the second plaintiff’s evidence in respect of this particular issue. Why his Honour thought it necessary to refer to those aspects of the evidence he set out in [36]-[38], but not others, is unclear. It is apparent that he rejected the evidence given by the plaintiff in relation to the issue of the headlight testing machine, and found that it was not in good working order. The basis on which he did so is not explained in his reasons.

Having found that various provisions of the Rules were breached, the Magistrate then proceeded to the second step and concluded, on the basis of those breaches, that the second plaintiff was not a fit and proper person to hold the relevant authorisation. Once again the Magistrate failed to explain why this was so. In other words, the Magistrate failed to provide reasons for his determination of what he had identified as the issue between the parties.

I am left to speculate, in the absence of any reasons, that the Magistrate found that the mere fact of the established breaches of the Rules was sufficient, without more, to support the conclusion that the second plaintiff was not a fit and proper person. The fact that I am left to engage in such speculation is, of itself, reflective of a failure to give adequate reasons: Pollard at [56].

In circumstances where his Honour had identified, as the issue in the proceedings, whether the second plaintiff was a fit and proper person to hold the relevant authority, he had an obligation to explain why it was that the breaches that he had found were established led to that result. There may be breaches of the law which do not jeopardise a person’s fitness to hold a licence or authority. There is a consequent need to explain why, in a case such as the present, such breaches as are found to be made out render the person in question unfit in the relevant sense. The Magistrate’s reasons are bereft of any such explanation. In these respects the observations of Toohey and Gaudron JJ in Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 at 388 are apposite:

Further, and in light of the submissions made to the Magistrate by counsel for the plaintiffs at the conclusion of the evidence, the Magistrate’s failure to explain why the breaches of the Rules led him to conclude that the second plaintiff was not a fit and proper person to hold an authorisation had added significance. One of the primary submissions made by counsel (at T1 L 30 and following on 27 April 2016) was to the effect that even if breaches of the Rules were made out (counsel effectively conceding that there were some such breaches) they were not of such a nature, nor of such gravity, as would support a conclusion that the second plaintiff was not a fit and proper person to hold the relevant authority. In the course of developing that submission, counsel for the plaintiffs took the Magistrate to a number of authorities which dealt with that general issue.

In these circumstances, the absence of any reason(s) explaining why the breaches which were found to have been established meant that the plaintiff was not a fit and proper person to hold an authority reflected a failure on the part of the Magistrate to properly engage with the issue which he had identified, and to properly engage with the submissions which had been put to him by counsel. There was an associated failure on the part of the Magistrate to conduct the weighing exercise of which Toohey and Gaudron JJ spoke in Bond.

Importantly, these various failures occurred in circumstances where the submissions of counsel went directly to the very issue that the Magistrate had identified, the resolution of which was obviously critical to the resolution of the contest between the parties. It was therefore essential that the Magistrate provide reasons explaining how it was that he determined that issue: Mifsud v Campbell (1991) 21 NSWLR 725 at 728 per Samuels JA (Clarke JA and Hope AJA agreeing; Soulemezis v Dudley Holdings Pty Limited (1987) 10 NSWLR 247 at 259 (per Kirby P) and at 270 (per Mahoney JA). No such reasons were provided.

I accept that the content of the obligation to give reasons may vary from case to case. However in the present case, a number of fundamental shortcomings in the Magistrate’s reasons can be identified. They lead to the inevitable conclusion that his reasons are inadequate. An error of law has been established on that basis. It follows that the appeal should be allowed and the matter remitted to the Magistrate to be further dealt with according to law.

In the circumstances I make the following orders: