Gambhir v VISION OF IT PTY LTD

This judgment involves an appeal of a Local Court decision in relation to a cross-claim.

The plaintiff in the Local Court was GC Leasing Sydney Pty Limited. The plaintiff who was the cross-defendant in the Local Court is Gambhir Manpreet (‘Gambhir’). The defendant is Vision of IT Pty Ltd (‘Vision IT’), who was the cross-claimant in the Local Court. Gambhir is represented by J. G. Simpkins of counsel. Vision IT is represented by G.P. Diggins of counsel. The parties relied on the plaintiff’s court book marked Exhibit A (‘Ex A’).

In the Local Court, in the cross-claim, Gambhir in the Local Court is the defendant. In this appeal, Gambhir is the appellant in this appeal, I shall refer to the parties by name. The hearing in the Local Court was in relation to the cross-claim between Vision IT and the cross-claimant and Gambhir and the cross-defendant.

At the hearing, by consent, the parties agreed that the appropriate relief, should Gambhir be successful in the appeal is that:

At this hearing of the appeal, counsel for Gambhir confined the appeal to ground 6 contained in the second amended summons filed 27 September 2022. It is as follows:

The first issue to be determined is whether Appeal Ground 6 requires leave to appeal in accordance with section 40 of the Local Court Act 2007 (NSW) (‘Local Court Act’).

Gambhir was the cross-defendant in the Local Court. Vision IT was the cross-claimant. The plaintiff in the Local Court was GC Leasing Sydney Pty Ltd (GC Leasing). As noted earlier, the proceedings as between the plaintiff and Vision IT settled. The appeal by the cross-defendant is against Vision IT, who was the defendant/ cross-claimant in the Local Court.

The hearing took place before Magistrate Hosking (‘the Magistrate’) and extended over three days (2 November 2021; 5 May 2022 and 6 May 2022). On 6 May 2022, the Magistrate delivered an ex tempore judgment in favour of Vision IT.

Vision IT brought its cross-claim brought its cross-claim against Gambhir on three bases. The first was as a claim for damages for breach of contract, quantified at $58,477.30 reflecting the settlement sum of $30,000 paid to GC Leasing and the balance being its alleged costs of defending GC Leasing’s claim (‘the contracts claim’). The contracts claim was dismissed. The second was a claim for damages pursuant to ss 18 and 236 of the Australian Consumer Law, quantified on the same basis. This claim was successful. The third was a claim in detinue and conversion. The Magistrate decided that as the cross-claim was successful on the second ground of appeal, it was unnecessary to determine the third ground of appeal.

Sections 39 and 40 of the Local Court Act 2007 (NSW) read:

In Be Financial Pty Ltd v Das [2012] NSWCA 164 (‘Be Financial’), Basten JA and Tobias AJA stated at [32], [33]:

Gambhir’s primary position is that appeal ground 6 gives rise to a question of law, engaging s 39 of the Local Court Act. In the alternative, they give rise to a mixed question of fact and law engaging s 40 of the Local Court Act and leave ought to be granted because it involves an issue of principle and an apparently clear injustice.

The difficulty with Ghambir’s primary position in Appeal Ground 6 is that it specifically states:

Both parties referred to Reitano v Commissioner of Police [2004] NSWCA 99 (‘Reitano’). According to Gambhir, a failure to have regard to, or to make reasoned findings about a statutory criterion is an error of law. In Reitano, Beazley JA (with whom Sheller and Tobias JJA agreed) stated at [31], [33], [35]:

On this basis Gambhir submitted in the Local Court that her Honour did not deal at all with whether the conduct (as found) was in trade or commerce.

It may be readily accepted that it is not incumbent on a judicial officer in giving reasons to comment on every aspect of the evidence, but that is not to the point. What we have here is a complete failure by the Magistrate to consider, and make any findings, in relation to whether the conduct was conduct in trade or commerce.

Reitano is not distinguishable based on the statutory provision there considered. The Magistrate did not make any determination as to whether the conduct was conduct in trade or commerce. The failure to address the issue, and to make the necessary findings of fact to determine whether the conduct was in trade or commerce, was an error of law.

Gambhir’s reliance upon the decision of the Court of Appeal in Reitano in support of the allegation that her Honour’s alleged failure to consider whether the conduct was in trade or commerce is an error of law should be rejected.

Reitano identifies that a failure to expressly consider a matter does not demonstrate that it was not considered. It is open to find that in making a finding a decision maker implicitly considered the matter.

Secondly, Reitano was a case in which the statutory condition in issue (s 11A of the Workers Compensation Act 1987 (NSW)) was multifarious. It encompassed reasonable action taken by an employer in relation to eight discrete matters:

It was far from clear (as contended by the respondent in that case) that the relevant matter considered by the Tribunal under section 11A was “discipline”. Both “transfer” and “performance appraisal” were available alternatives as the relevant matter considered by the Tribunal. As noted by Beazley JA at [21]:

If, as suggested by the respondent in Reitano, the relevant matter considered by the Tribunal was “discipline”, that consideration was erroneous as there was no power under the Police Act 1990 (NSW) for the respondent to stand down the applicant (such power underpinning any characterisation of the Respondent’s actions as relating to “discipline”).

The breadth of the statutory condition under consideration in Reitano stands in marked contrast to the narrow focus of the statutory condition of present relevance – the requirement in the Australian Consumer Law of conduct being “in trade or commerce”. The difficulty identified by Beazley JA in Reitano therefore does not arise in the present proceedings.

It is trite law that each case depends on its facts. In this appeal, the central issue is whether her Honour erred in law and fact in that she failed to expressly state that the conduct was in trade and commerce. In Reitano, the Court of Appeal held that there was an error of law in the Tribunal’s failure to determine whether s 8(3) of the Workers Compensation Act 1987 (NSW) was a proper basis under which the appellant could be stood down. That error was sufficient for the appellant to succeed on the appeal. That error also demonstrated that the Tribunal did not consider the question whether the action taken in standing down the appellant was taken in respect to any of the matters specified in s 11A, being the principal ground alleged on the appeal. If it had turned its mind to that question, it would, of necessity, have had to turn to the other questions which arose once the power to act under s 8(3) was put in issue. It did not. The failure to deal with any of those questions underscored the conclusion that the Tribunal did not make any determination in respect of that part of s 11A. The Court of Appeal held that its failure to do so was held to be an error of law.

Essentially, Vision IT submitted that the question was one of mixed question of law and fact.

In Gambhir’s outline of submissions, a different allegation is made in as much as it is suggested that her Honour “did not deal at all” with the issue of whether the conduct as found was in trade or commerce. This is presumably in an attempt to elevate the alleged error into a question of law.

As stated in Appeal Ground 6, her Honour found by implication that the conduct was in trade or commerce. While it is accepted that her Honour did not expressly deal with whether the conduct was in trade or commerce, this is insufficient to permit the alleged error to properly be characterised as relating to a question of law. This is because establishing that her Honour erred in making such a finding would require a demonstration that the finding was one that was unavailable. Put otherwise, it would require a demonstration that the evidence before her Honour necessarily put the conduct outside the statutory description as being in trade or commerce.

As stated by Jordan CJ in The Australian Gas Light Company v The Valuer-General (1940) 40 SR (NSW) 126 at 138 as referred to in Orr v Cobar Management Pty Ltd [2020] NSWCCA 220 at [53]:

Further, regardless of her Honour’s reasons, there is no error of law where there is evidence which, if believed, would support the finding: Nicolia v Commissioner for Railways (NSW) [1971] 45 ALJR 465.

What is said in Gambhir’s outline of submissions on the issue of whether the conduct was in trade or commerce proceeds upon an erroneous understanding of evidence which was uncontentious before her Honour. This misunderstanding commences with Gambhir’s apparent elevation of her Honour’s use of the words “a related company division” to suggest that the plaintiff was an employee of Vision IT.

Gambhir was at all times an employee of Fastserve Pty Ltd, not Vision IT. This was never in issue in the proceedings.

Her Honour was well aware that Gambhir was not employed by Vision IT as she made express reference (without the use of the word “division”) to this fact elsewhere in her decision.

The analysis of the “in trade or commerce” issue in Gambhir’s outline of submissions, including reference to various authorities, erroneously assumes that Gambhir was employed by Vision IT. Certainly, Gambhir was an employee, but he was not Vision IT’s employee.

Her Honour’s decision recorded (putting to one side the passing and solitary use of the term “division”) that it was uncontentious that Gambhir was an employee of Fastserve and that Gambhir introduced a particular client to Vision IT.

As her Honour further recorded, the issue between the parties was whether this introduction was by way of a referral or an end-to-end sale. Her Honour found that either way, the introduction resulted in remuneration becoming payable (although the measure of that remuneration differed depending on whether there was a mere referral or an end-to-end sale).

Lastly, her Honour records that the scheme introduced by Vision IT providing for remuneration for such introductions (whether as referrals or end-to-end sales) involved employees of Fastserve acting as independent contractors to Vision IT.

It follows that even on Gambhir’s own case at trial, the transaction between the parties bore a trading or commercial character. At the very least and relevantly for present purposes, the evidence before her Honour does not necessarily put the conduct outside the statutory description as being in trade or commerce.

The substance of Gambhir’s criticism appears to be that her Honour did not in express terms give reasons why Gambhir’s conduct was in trade or commerce. This criticism ignores that there was at trial no real dispute between the parties on this issue.

It is not incumbent on a judicial officer in giving reasons to comment on every aspect of the evidence: Stone v Cleanaway Pty Ltd t/as Cleanaway; PTH Pty Ltd v Cleanaway Pty Ltd & Mahoney; Central West Auto Auctions Pty Ltd v Cleanaway Pty Ltd & Mahoney [2023] NSWSC 156 at [98]. The requirement to give reasons is one that obliges the judicial officer to engage with a case presented on behalf of a party so the reason(s) why that case was not successful can be ascertained: Shepherd v Nestoriadis [2015] NSWSC 348 (‘Shepherd’) at [40]. In the circumstances of the present case there can be no difficulty on the part of Gambhir in ascertaining why he was not successful on this issue.

It should also be remembered that her Honour was sitting as a Local Court magistrate delivering an ex tempore judgment. As noted by Beech-Jones J in Shepherd at [19] and [36]:

To similar effect, in Director of Public Prosecutions v Tiller [2023] NSWSC 187 McNaughton J observed at [50]:

Again, in 3 Rivers Estate Pty Ltd v Consult Survey GRA Pty Ltd [2023] NSWSC 1217 Mitchelmore JA recently commented to similar effect at [42]:

The appeal ground pleads that her Honour erred in fact and law. In Reitano the real issue to be determined is which of the matters under section 11A was considered by the Tribunal, with the one contended for by the respondent being unavailable as a matter of law. This is not the situation here.

As to whether the representations were made in trade and commerce depends on the factual findings. The central issue in dispute here is whether Gambhir’s conduct was in trade or commerce. The uncontested evidence (reproduced later in this judgment) was that Gambhir was an employee of Fastserve and an independent contractor for Vision IT. These are based on findings of fact. The evidence establishes that the conduct is not of an inherently intra-corporate nature.

While I accept that Gambhir denied the conduct was not in “trade or commerce” in its defence to the cross-claim, the hearing was not run on this basis. In my view, this appeal does not raise a question of principle or of public importance. Nor does it raise a question of an injustice which is reasonably clear going beyond what is merely arguable.

However, if I am wrong and Appeal Ground 6 does not raise a mixed question of fact and law, I will briefly address it.

In relation to the breach of contract claim, the Magistrate found that Vision IT had not been able to satisfy the court as to the precise terms of the alleged contract between it and Gambhir and had not proven there was a breach. However, the Magistrate found in favour of Vision IT on its misleading and deceptive conduct claim and entered judgment for the sum of $58,477.30.

Sections 18(1) and 236 of the Competition and Consumer Act 2010 (Cth), Schedule 2, read as follows:

The onus is upon Vision IT to establish each element.

In relation to the misleading or deceptive conduct claim, Vision IT alleged:

Counsel for Gambhir referred to Mitsubishi Motors Australia Pty Ltd v Begovic [2022] VSCA 155; (2022) 403 ALR 558 (‘Begovic’), where the Victorian Court of Appeal (per Emerton P, McLeish and Macaulay JJA) observed (at [55]) that “determining whether s 18 has been contravened involves a staged inquiry. The omission, or conflation, of these stages is apt to confuse the analysis” (citations omitted). The Court of Appeal identified the following five stages of that inquiry (at [57]-[61]):

As previously stated in the cross-claim at [12], Vision IT alleged that the representations were made in trade or commerce [CB261]. In his defence to the cross-claim at [11], Gambhir denied the conduct was “in trade or commerce”.

It should be taken into account that the judgment is to be considered bearing in mind the heavy workload borne by the Local Court and the lack of opportunity that is generally afforded to Magistrates to address the infelicities of language to similar errors in the transcript of oral judgments: see Shepherd v Nestoriadis [2015] NSWSC 348 at [19].

The magistrate’s ex tempore reasons dated 6 May 2022 stated:

The Magistrate did not undertake a staged inquiry referred to in Begovic. Rather, her Honour held that the misleading or deceptive conduct claim turned on two issues: first, whether or not Gambhir provided Vision IT with a copy of the leasing agreement between GC Leasing and SS Resources (‘Ex 18’), and if he did whether that conduct was misleading or deceptive; and secondly, whether Gambhir took the Equipment from Utteneja’s office.

As to the first issue, the Magistrate held:

As previously noted, her Honour dismissed the contract claim, holding that Vision IT had not been able to satisfy the court as to the precise terms of the contract and had not proven the breach. However, her Honour made that finding having first observed that “[t]he uncontentious facts include that at all material times Gambhir was an employee of Fastserve, a related company division”. As counsel for Vision IT observed in his opening:

In Haiye Developments Pty Ltd v Commercial Business Center Pty Ltd [2022] NSWSC 937 (‘Haiye’) at [374] Kunc J observed:

The determination of whether conduct is in trade or commerce is sensitive to the particular facts and that determination may involve question of some subtlety: In the Matter of Orix Australia Corporation Limited [2020] NSWSC 1770 at [32].

In Williams v Pisano [2015] NSWCA 177 (‘Pisano’), the Court of Appeal considered the meaning of the phrase “in trade or commerce” as contained in ss 18 and 30 of the Australian Consumer Law. At [36] and [37], Emmett JA (Bathurst CJ and McColl JA agreeing) said the following: (citations omitted):

Vision IT formulated its case on the premise that at all relevant times Gambhir was a contractor having entered into an end-to-end agreement with Vision IT. Vision IT claimed damages for breach of that agreement and in the alternative, a claim for damages under s 236 of the Australian Consumer Law. The alternative claim depended on the Court first finding that Gambhir engaged in conduct in trade or commerce to satisfy s 18 of the Australian Consumer Law. The claim for breach of contract failed when the court found that Gambhir had not entered into the alleged agreement. Having failed to show that the representations were not made by a contracting party, Vision IT then had to show that the conduct of Mr Ghambir, as an employee, was conduct in trade and commerce.

No attempt was made by Vision IT to establish that the conduct complained of (which was conduct of an employee) was conduct in trade and commerce. Vision IT therefore failed to prove that the conduct contravened section 18 of the Australian Consumer Law. The conduct was conduct of an employee – it was not conduct in trade and commerce. Nonetheless, the court below went on to find that Gambhir was liable to pay damages pursuant to s 236 of the Australian Consumer Law.

In the misleading and deceptive conduct claim her Honour found that Mr Gambhir had signed as a witness a leasing agreement document purportedly signed by Sandeep Chawla, a director of SS Resources Pty Ltd. The leasing agreement related to certain telecommunications equipment that was purchased from Vision IT by GC Leasing Sydney Pty Ltd for the purpose of being leased to SS Resources. Mr Chawla was not in Australia at the time the agreement was signed. Gambhir admitted that despite signing as a witness, he did not witness Mr Chawla sign the document.

Her Honour found that Gambhir handed the original signed (that is, by both Mr Gambhir and purportedly by Mr Chawla) leasing agreement to Jason Kondur, an employee of Vision IT. Her Honour found that “…by providing Kondur with that document he [Gambhir] misled and deceived Vision IT as to what, if any, obligations Chawla had agreed to.”

Her Honour also found that Gambhir attended Vision IT’s premises and took possession of two boxes containing the equipment the subject of the lease for the purpose of delivery to Mr Chawla/ SS Resources. Her Honour found that Gambhir did not deliver these boxes to Mr Chawla/ SS Resources and that Vision IT was “misled and deceived as to their destination.”

Her Honour made further findings in relation to reliance and loss which are unchallenged in these proceedings.

Examples include denying that he was a business development manager in circumstances where that title was used on emails, asserting that all he did was refer SS or Mr Ohawla in circumstances where he wrote an email indicating that this arrangement was not a referral when he was seeing greater compensation; asserting that this transaction was a mere referral in circumstances where he was involved and communicating with Kondur during the contract execution process and he witnessed the document which purported to bear Ohawla's signature.

Vision IT seeks to distinguish this case from cases addressing whether the conduct of an employee is conduct in trade or commerce (see Gambhir’s Submissions at [26] et seq) on the basis that Gambhir was not an employee of Vision IT, but an employee of Fastserve. How two closely related entities operate their workforce is not to the point. It is a common commercial reality that many businesses operate with a separate corporate entity that acts as the employer. That is precisely what occurred between Fastserve and Vision IT.

Merely because Vision IT organised its workforce in such a way does not mean that the conduct of Gambhir was necessarily in trade or commerce – quite the contrary – the present case is otherwise on all fours with a situation where Gambhir would be employed directly by Vision IT. The conduct complained of (handing over the executed lease and collecting the boxes) can aptly be described as conduct of an inherently intra-corporate nature.

This Court would reject Vision IT’s submission that there was at trial no real dispute between the parties on whether the conduct was in trade or commerce. The pleadings identify the issues before the Court – paragraph 12 of the cross-claim alleged that the Leasing Agreement Representation was made in trade or commerce. That allegation was denied by Gambhir.

In Gambhir’s first affidavit dated 4 June 2021, he deposed that during 2018 he was employed as a Corrections Officer and also by Fastserve Solutions who were to pay entitlements under their employment agreement. Fastserve is Mr. Sumeet Verma’s company. Vision IT is in the name of his wife, Ms Swati Uttneja as the main shareholder as far as he knows, but Mr Suneet Verma is the person in charge of it. Both businesses are run from the same address in Paramatta.

Customers for Vision IT who wanted to buy telephone equipment he would be paid commission for customers in accordance with what was purchased. Uttneja, the director of Vision IT, gave evidence that before December 2018, Gambhir was a full-time employee of Fastserve Solutions Pty Ltd and then he moved to being an independent contractor to Vision IT (T.33-34, 48-50, 49.1-10). By that she meant that he will be a person who will be responsible for end-to-end sale of products on behalf of Vision IT.

Uttenja was cross-examined in the following exchange:

Vision IT and Fastserve are different entities and they had different contractual relationships with Ghambhir. Gambhir complained that he did not receive a commission from Vision IT.

So far as the parties’ evidence is concerned, the Magistrate found the evidence in the plaintiff’s case, namely that of Mr Verma, Ms Uttneja and Mr Kondur to be clear and concise. She made a finding that they were witnesses of good credit. However, her Honour made adverse findings regarding Gambhir’s credibility as a witness. Her Honour described his evidence as:

From the evidence given by Uttenja above, Gambhir was an employee of Fastserve and an independent contractor to Vision IT. Gambhir’s complaint is that the Magistrate did not expressly state that Gambhir’s conduct was in trade or commerce. In support, he refers to Vision IT’s opening submissions where counsel for the cross-claimant stated that the cross-claimant didn’t have its own sale staff, it relied on – because they were such closely related companies, it and Fastserve, there was common ownership, common directorships two family companies for short, it would use sale staff from that company. Uttenja’s evidence (that was accepted by the Magistrate was that Fastserve and Vision IT had different responsibilities and that Fastserve and Vision IT do different work or the way they operate is different.

I accept there the Magistrate made one passing and solitary use of the words “a related company division” that they are not a related company division, but the evidence demonstrates in addition to the obligations of a magistrate giving reasons, the magistrate’s decision should be read as a whole.

I have read the decision of the Magistrate and the transcript of the 3-day hearing carefully. Although Gambhir denied that the conduct was in trade and commerce, but it was not an issue in contest during the trial and there was evidence to support that factual finding: see Secretary, Department of Education v Dawking [2024] NSWSC 4 at [65]-[74]. The trial was run on the basis that it was implied that the conduct was in trade or commerce.

For these reasons Gambhir’s appeal has failed. The decision of Magistrate Hosking dated 6 May 2022 is affirmed. The second amended summons dated 27 September 2022 is dismissed.

Costs normally follow the event. The appellant is to pay the respondent’s costs.