Ritson v Ryan[2018] QCATA 148

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

1. [1]
   This is an appeal from an Adjudicator who heard and determined an application by Brendan Ritson in the tribunal’s minor civil dispute list.
2. [2]
   Both parties attended a hearing on 13 September 2017 in Brisbane before the Adjudicator.  The order made on that day was for further evidence and submissions from the parties.  On 31 January 2018 the Adjudicator dismissed the application, giving reasons in writing.  Those reasons were sent to the parties but not published.
3. [3]
   Mr Ritson relies on the following grounds of appeal:-^[1]

4. [4]
   Mr Ritson did not put the bias issue first in his grounds of appeal but it has been emphasised by the High Court that an appeal court must deal with a bias issue first.  This is because the issue strikes at the validity and acceptability of the trial and its outcome.  If the ground of appeal on the ground of apprehended or actual bias is found to be valid, the appeal is bound to succeed and a retrial ordered.  This is so even if the appeal court finds that the judge was correct in the substantive findings.  This is because the apprehended or actual bias cannot be ignored - it would mean that a defect in the administration of justice has been found to have occurred which, in the absence of any successful appeal on the point, will have remained unremedied: Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) CLR 577.^[3]

Was the Adjudicator disqualified from determining the matter on the grounds of apprehended bias?

5. [5]
   After the hearing on 13 September 2017, Mr Ritson obtained an audio recording of the hearing.  On 9 October 2017 he filed an application for the Adjudicator to ‘disqualify himself from further hearing this matter on the ground of a reasonable apprehension of bias’.  This application was referred to the Adjudicator who decided not to recuse himself, although he did not issue a formal decision to that effect.
6. [6]
   In this appeal Mr Ritson says that the Adjudicator should have sought submissions on the application to disqualify himself, and should have made a formal decision on it, so that reasons could have been requested.  He also says that in the circumstances, the Adjudicator should have acceded to the application to disqualify himself. 
7. [7]
   For the purposes of this appeal, firstly I need to consider whether the Adjudicator was disqualified because of reasonably apprehended or perceived bias by reason of conduct.  If so, I then need to consider whether the appeal should be allowed on that basis.
8. [8]
   The test is in Ebner v The Official Trustee in Bankruptcy (2000) 205 CLR 337, where Gleeson CJ, McHugh, Gummow and Hayne JJ said:-

6. Where, in the absence of any suggestion of actual bias, a question arises as to the independence or impartiality of a judge (or other judicial officer or juror), as here, the governing principle is that, subject to qualifications relating to waiver … or necessity … , a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide. That principle gives effect to the requirement that justice should both be done and be seen to be done, a requirement which reflects the fundamental importance of the principle that the tribunal be independent and impartial. It is convenient to refer to it as the apprehension of bias principle.

9. [9]
   Mr Ritson complains that the Adjudicator indicated at the hearing that he thought Mr Ritson was not genuinely pursuing the application in order to recover money owed, but was on a ‘crusade’ which was an attempt to use the tribunal as an ‘instrument of torture’ and that was ‘a misuse of this tribunal’ and a ‘misuse of me’. 
10. [10]
    I have had the advantage of the full transcript of the hearing.^[4]  From this I can see that it is correct that the Adjudicator used those words on four separate occasions during the hearing.  The Adjudicator therefore expressed the following views in strong terms:-^[5] 

    1. (a)
       that Mr Ritson was not genuinely seeking compensation and was not using the tribunal for legitimate dispute resolution; and
    2. (b)
       that this was not acceptable to the Adjudicator.
11. [11]
    As said in Ebner, the question in this appeal is whether a fair-minded lay observer might reasonably apprehend that the decision maker might not bring an impartial mind to the resolution of the question the decision maker is required to decide.  This is a two part test as explained in these further passages from Ebner:-

8. The apprehension of bias principle admits of the possibility of human frailty. Its application is as diverse as human frailty. Its application requires two steps. First, it requires the identification of what it is said might lead a judge (or juror) to decide a case other than on its legal and factual merits. The second step is no less important. There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits. The bare assertion that a judge (or juror) has an "interest" in litigation, or an interest in a party to it, will be of no assistance until the nature of the interest, and the asserted connection with the possibility of departure from impartial decision making, is articulated. Only then can the reasonableness of the asserted apprehension of bias be assessed.

12. [12]
    Since the test is by reference to a ‘fair-minded lay observer’, it is clear that the test is objective, so Mr Ritson’s own belief about possible bias is irrelevant.^[6] 
13. [13]
    The fair-minded lay observer would be aware that the tribunal often needs to take an inquisitorial role.  The High Court recognised in Re: Refugee Tribunal Ex parte H (2001) 179 ALR 425 that in inquisitorial proceedings, the decision maker will necessarily have to test the evidence presented – often vigorously and plainly, to confront the person with matters that bear adversely on credit or which bring their account into question.
14. [14]
    And Kirby J in the High Court said in Johnson v Johnson (2000) 201 CLR 488 that the observer is also presumed to know:-^[7]

…commonplace things, such as the fact that adjudicators sometimes say, or do, things that they might later wish they had not, without necessarily disqualifying themselves from continuing to exercise their powers. The bystander must also now be taken to have, at least in a very general way, some knowledge of the fact that an adjudicator may properly adopt reasonable efforts to confine proceedings within appropriate limits and to ensure that time is not wasted. The fictitious bystander will also be aware of the strong professional pressures on adjudicators (reinforced by the facilities of appeal and review) to uphold traditions of integrity and impartiality. Acting reasonably, the fictitious bystander would not reach a hasty conclusion based on the appearance evoked by an isolated episode of temper or remarks to the parties or their representatives, which was taken out of context.  Finally, a reasonable member of the public is neither complacent nor unduly sensitive or suspicious.

15. [15]
    When the tribunal hears a minor civil dispute the parties are usually not legally represented.  For that reason, and to reach a fair conclusion as efficiently as possible, the decision maker will usually take a highly inquisitorial role.  This will inevitably involve more intervention than would be found in the mainstream courts, and it may involve testing the evidence of the parties and their witnesses in a way similar to cross examination.  As the authorities cited above show, the fair-minded lay observer would be aware of this and understand it.   The way Mr Ryan put it was that he would expect the decision maker to ‘use candid language on a regular basis to try to get to the bottom of the matter’.
16. [16]
    As part of the process, in minor civil disputes decision makers are often looking out for the possibility of settlement.  One of the statutory aims of the tribunal is to encourage the early and economical resolution of disputes before the tribunal.^[8]  Here the Adjudicator’s comments, to which objection is made, were made during an attempt to see if there was room for settlement.
17. [17]
    Even with those allowances however, in my opinion it would reasonably appear to a fair-minded lay observer to be a distinct possibility from the Adjudicator’s comments that he would resolve any doubts in the case against Mr Ritson because the Adjudicator did not approve of Mr Ritson’s motive for coming to the tribunal.  In other words, objectively it would appear that the Adjudicator might not apply an impartial mind to the final decision in the application. 
18. [18]
    In saying this, one of the things I am taking into account is that the Adjudicator expressed his views about motive both at the beginning of the hearing and at the end of the hearing.  Having expressed them at the beginning of the hearing he then seemed to take a balanced and genuine interest in both sides’ cases in an attempt to gather sufficient information to make a fair decision on the matter.  This approach might have been sufficient to set the mind of the fair-minded lay observer to rest about apprehended bias.  At the end of the hearing however, he repeated the comments which are now objected to, affirming any suspicions that the fair-minded lay observer might have held about possible bias.
19. [19]
    There may be a perfectly innocent explanation for the Adjudicator’s remarks, and it is unnecessary to consider whether there was actual bias.  Mr Ritson does not contend that there was actual bias.  As explained in these further passages from Ebner:-

7. The apprehension of bias principle may be thought to find its justification in the importance of the basic principle, that the tribunal be independent and impartial. So important is the principle that even the appearance of departure from it is prohibited lest the integrity of the judicial system be undermined. There are, however, some other aspects of the apprehension of bias principle which should be recognised. Deciding whether a judicial officer (or juror) might not bring an impartial mind to the resolution of a question that has not been determined requires no prediction about how the judge or juror will in fact approach the matter. The question is one of possibility (real and not remote), not probability. Similarly, if the matter has already been decided, the test is one which requires no conclusion about what factors actually influenced the outcome. No attempt need be made to inquire into the actual thought processes of the judge or juror.

Conclusion on the appeal

20. [20]
    I conclude that the Ebner test of reasonably apprehended bias is satisfied in this case.  The question then arises whether the appeal should succeed on that basis.  It is possible for the party affected by reasonably apprehended bias to waive a right to any remedy arising from it.  As was said by Brennan, Deane and Gaudron JJ in Vakauta v Kelly (1989) 167 CLR 568:-

7. If the above comments made by the learned trial judge in the course of the trial had stood alone, we would have been of the view that the appellant, having taken no clearly stated objection to them at the time and having stood by until the contents of his Honour's judgment were known, could not now found upon them in order to have that judgment set aside on the grounds of a reasonable apprehension of bias. The statements which the learned trial judge had made about his preconceived views of Dr Lawson were, however, effectively revived by what his Honour said in his reserved judgment. The appellant's failure to object to the comments made in the course of the trial cannot, in our view, properly be seen as a waiver of any right to complain if comments made about Dr Lawson in the judgment itself would, in the context of those earlier comments, have the effect of conveying an appearance of impermissible bias in the actual decision to a reasonable and intelligent lay observer.

21. [21]
    The way it was put by Toohey J was:-

16. There is no reason why, in authority or in principle, a litigant who is fully aware of the circumstances from which ostensible bias might be inferred, should not be capable of waiving the right later to object to the judge continuing to hear and dispose of the case. That is not to say that the litigant in such a position must expressly call upon the judge to withdraw from the case. It may be enough that counsel make clear that objection is taken to what the judge has said, by reason of the way in which the remarks will be viewed. It will then be for the judge to determine what course to adopt, in particular whether to stand down from the case. For counsel to invite the judge to withdraw from the case may be quite premature, particularly if the judge acknowledges the apparent bias in what has been said and thereafter takes steps to dispel that apprehension …
17. In the result, when a party is in a position to object but takes no steps to do so, that party cannot be heard to complain later that the judge was biased. 

22. [22]
    Toohey J was clear that since in that case reasonably apprehended bias appeared from what was said in the reserved judgment itself the question of waiver could not arise.^[9]  Dawson J was also of the view that there is no doubt that a party could waive a right to rely on reasonably apprehended bias, expressing the view that ‘It cannot be the position that a party can wait to see whether the outcome of a case is favourable to him before raising an objection, the availability of which he was previously aware, on the ground of bias’.^[10]
23. [23]
    Here, Mr Ritson was not represented at the hearing, and judging from the transcript the hearing did not proceed in a leisurely fashion, lasting only 75 minutes.  It would be quite unfair to regard him as having waived any right to object to the Adjudicator’s comments because he did not do so at the hearing.  His application for the Adjudicator to disqualify himself was made speedily after he obtained an audio recording of the proceedings.  From the recording he was able to set out in his application the comments that he was objecting to.  His application was made almost 3 months before the Adjudicator made his final decision.  In the circumstances it cannot be said that he waived his rights to object to the Adjudicator’s comments.
24. [24]
    For this appeal to succeed, there is no need to demonstrate any actual disadvantage or unfairness to Mr Ritson arising from bias.^[11]  I must therefore grant leave to appeal and allow the appeal on the above basis.  This means that I have determined the appeal on a question of law only.  As such, the appeal is determined under section 146 of the QCAT Act.  Where an appeal is allowed under that section the decision made by the tribunal is to be set aside and then the Appeal Tribunal may substitute its own decision or remit the matter to the tribunal for reconsideration.  The ability of the Appeal Tribunal to substitute its own decision in these circumstances is limited.  It is normally only possible when further evidence is not required to resolve outstanding issues so that determining the question of law is capable of resolving the matter as a whole.^[12] 
25. [25]
    Here I have formed the view that there are issues which should be resolved and which will require further evidence from the parties before a final decision can be made.  This is regrettable since this is the second successful appeal in this matter, resulting in delays in its resolution by the tribunal.^[13] 
26. [26]
    Since I have no choice but to remit the matter to the tribunal for reconsideration, it is unnecessary for me to deal with any of the other grounds of appeal.

The issues and directions for resolution

27. [27]
    I propose to identify the issues for two reasons.  Firstly, section 29 of the QCAT Act requires the tribunal to take all reasonable steps to ensure that each party understands the nature of the assertions made in the proceeding and the legal implications of the assertions – and as can be seen below the legal analysis is complicated.  Secondly, it is necessary to identify the issues so that directions can be made in an attempt to get the evidence required to address those issues before the tribunal so that it can make a final determination of this application. 
28. [28]
    In doing so it is necessary to recite some factual background – this is preliminary only and should not be regarded as binding upon the tribunal which finally decides this matter.  Equally, neither the parties nor the tribunal are bound by the issues which I have identified.
29. [29]
    The facts as they appear on a preliminary basis are as follows.
30. [30]
    Mr Ryan provided courses to prepare students for pilot aptitude tests.  The courses were normally four days, but they were often split into two courses of two days each.    At the material times, it seems that he provided the courses as a sole trader.^[14]  In 2013 and 2014, four people, that is BC, CA, GS and LG paid course fees to Mr Ryan.  For one reason or another, they requested the return of those fees or compensation.  In 2015 and 2016 BC, CA, GS and LG assigned their rights under their contracts with Mr Ryan to Mr Ritson.  One of the assignments went further than this as can be seen below.
31. [31]
    There were different circumstances for each assignor.
32. [32]
    BC paid Mr Ryan $1,995 which was the full fee for his course.  The dates for the first two days of the course were agreed but other dates were left open.  Mr Ryan says that he then received information about BC which suggested that BC’s motive for attending the course was industrial espionage.  Mr Ryan therefore refused to allow BC to attend the course.  BC did not attend the course.  Mr Ryan refused to refund the fees. 
33. [33]
    CA paid Mr Ryan $3,495 which was the full fee for his course.  The dates for the first two days of the course were agreed but other dates were left open.  It was then agreed that the course would be postponed, with a date or dates to be agreed.  CA then decided that he did not need the course that year at all, and he asked for a complete refund.  CA says that Mr Ryan agreed to this, but Mr Ryan says there was no such agreement.  CA did not attend a course and no fees were repaid to him.
34. [34]
    GS paid Mr Ryan the full course fee of $3,495 for his son to attend the course on specified days.  Then prior to the start of the course GS cancelled it and asked for a refund.  It was later agreed in emails between GS and Mr Ryan that the fees would be refunded in full.  Mr Ryan gave a partial refund of $1,000 leaving $2,495 unrefunded.
35. [35]
    LG attended the course having made a part payment of $1,000 in fees to Mr Ryan.  He says he was unhappy with the course and he asked that the remainder of the course fees of $2,495 not be taken from his credit card.  But the payment went through.  LG considered that the course was not as described to him and he asked for a refund of $2,000 from the total price of $3,495.  Mr Ryan denies that LG has any reason to complain and says that he fulfilled all his obligations to LG.
36. [36]
    Resolution of the application by the tribunal is made more complicated by the fact that the tribunal is not a forum for general ‘small claims’.  Instead, its jurisdiction in such cases is limited to two types of claims: claims for a debt or a liquidated demand of money and trader-trader or trader-consumer claims.  Therefore it is necessary in a case such as this to make appropriate findings of fact whilst carefully analysing the legal basis for the claim to ascertain whether the tribunal has jurisdiction to hear the claim at all.
37. [37]
    In respect of each of these assignors Mr Ritson says that the money paid to Mr Ryan for the course fees should be repaid under the principle of restitution because of Mr Ryan’s unjust enrichment.  Whether this remedy is available however, depends on a number of considerations.
38. [38]
    ‘No contract’ possibility.  Two of the assignors, BC and CA, only agreed dates for the first two days of the course.  It is possible that the contract was limited only to those two days, and there was no binding contract in respect of the remaining two days.  This depends on how important agreement as to the course dates was for the contract.^[15]  It might also turn on whether the contract should be regarded as entire or severable.
39. [39]
    This may be important because it is unlikely that restitution on the grounds of undue enrichment is an available remedy where the rights of the parties remain governed by contractual terms.
40. [40]
    Discharge of contract possibility.  In CA’s case at least, it is arguable that any contract for the first two days of the course was discharged by agreement.  If so, it is possible that restitution on the grounds of undue enrichment is an available remedy.
41. [41]
    Claim in respect of BC.   It is possible that Mr Ryan might have been in breach of contract by refusing to allow BC to attend the course.  However, it may be that Mr Ryan had a right to rescind the contract on the grounds of a misrepresentation by BC which induced him to enter the contract.
42. [42]
    Terms and conditions.  Whether or not there was a contract between any of the assignors and Mr Ryan for dates to be agreed may turn on whether there were any terms and conditions governing their dealings.
43. [43]
    It is also important to see whether there was express agreement as to whether a refund was available should one side or the other cancel a course. 
44. [44]
    In this respect Mr Ryan says that the terms and conditions covering the dealings between the assignors and himself were available on his website.  He says that they therefore governed those dealings ‘by implication’.  He relies in particular on a term which he says entitled him to refuse a refund if the customer cancelled. 
45. [45]
    The question whether or not these terms and conditions apply is an important issue in this case.  It has not previously been examined and further evidence will be required about this so that the tribunal can determine whether the terms and conditions were incorporated into any contracts made by Mr Ryan with the assignors. 
46. [46]
    In addition to this, the terms relied on must be seen in context of the contract as a whole.  In his Response to the claim Mr Ryan only provided a one page extract of the contract he relied on.  However, what appears to be the complete contract, printed on 23 November 2016, does appear in the minor civil dispute file although it is not clear which party provided this.  The whole contract alleged to apply should be provided and I have given directions for Mr Ryan to produce this.
47. [47]
    If the terms and conditions were incorporated into any contracts made by the assignors and Mr Ryan, the tribunal will need to decide whether they deal with what happens when a course is cancelled.  In this respect, the full contract on the file contemplates the payment of a deposit of $795 followed by the balance of the course fee before the course commences.  It seems clear that the deposit is non-refundable.^[16]  It is less obvious what happens to the balance of the course fee upon cancellation if it has been paid.
48. [48]
    Where the course fees were paid in full prior to the course, the tribunal may consider it right to imply a term in the contract (in order to give it business efficacy) to deal with what happens upon cancellation.  This is of course, unless it is found that an express contractual term dealt with this eventuality.
49. [49]
    Agreements to refund fees.  In the case of GS it is not in dispute that Mr Ryan agreed to refund the course fees.  In the case of CA such an agreement is alleged but is in dispute.  In both cases there is an issue whether any such agreement was supported by consideration moving from the parties, and from CA and GS in particular, to make it contractually binding.
50. [50]
    Whether the claims may be trader-consumer claims.  Although Mr Ritson has brought his application in the tribunal on the basis that the assigned claims were each claims for a debt or a liquidated demand of money, it is possible that the claims relating to BC, CA, and GS are not in that category.  In this respect it is notable that the Adjudicator when hearing the matter chose to deal with it as a trader-consumer claim and not a debt claim.^[17] 
51. [51]
    It is possible the claim is not one for a debt or liquidated demand if the claim is properly resolved by the implication of a contractual term which requires an assessment of Mr Ryan’s financial loss caused by the cancellation, and a refund of the remainder of the fee to the payer.  If it is right to imply a term to that effect, it may convert what would be a claim for a liquidated demand of money into an unliquidated one, and therefore outside the tribunal’s jurisdiction over debts and liquidated demands of money.
52. [52]
    The tribunal would still have jurisdiction over such a claim however, if BC, CA, and GS were ‘consumers’ and Mr Ryan a ‘trader’ within the definitions applying to those terms in the QCAT Act.  It seems likely that BC, CA, and GS were consumers but whether Mr Ryan is a trader is more difficult.  That is because the definition of ‘trader’ excludes a person acting ‘in the exercise of a discipline that is not ordinarily regarded as within the field of trade or commerce’.  It has been held that this excludes those acting as professionals and certain other occupations.^[18]  One of the tests is whether the services offered required ‘professional standards of competence, training and ethics, typically reinforced by some form of official accreditation accompanied by evidence of qualification’.^[19]  There is some uncertainty whether Mr Ryan was a trader as defined. 
53. [53]
    Appropriation of payment.  What happened was that on 22 September 2016 Mr Ryan paid to Mr Ritson a sum of money.  Mr Ritson has appropriated this payment to satisfy the claims in respect of BC and LG and in partial satisfaction of the claim in respect of CA.  Currently therefore the claims in respect of BC and LG are interest only claims and the claim in respect of CA is reduced.
54. [54]
    Mr Ryan says that he intended his 22 September 2016 payment to pay two judgment debts in Mr Ritson’s favour which were the subject of a notice of bankruptcy served on him by Mr Ritson.  These were judgments which arose from rights assigned to Mr Ritson by two other people who had claims against Mr Ryan.  Mr Ryan says that the payment ought not to be appropriated in the way that Mr Ritson has done and should be appropriated to the judgment debts. 
55. [55]
    At the appeal hearing, Mr Ritson said that if Mr Ryan is right about this, it means that his claims against Mr Ryan before the tribunal are lower than they should be – in which case he would wish to claim the full amounts without any reductions by reason of the 22 September 2016 payment.   Currently however, this is not how his claim is put in his application. 
56. [56]
    If Mr Ritson wishes to make this an alternative claim, he will need to apply to the tribunal to amend his claim to add it.  To avoid surprises as the new hearing approaches, I have given Mr Ritson a deadline in my directions for this application to be made.  I emphasise that any such application to amend will need to be considered by the tribunal in the usual way (I am not now giving leave to amend).
57. [57]
    Possible estoppel issues.  The assigned claims with respect to BC and CA have been the subject of proceedings in the Victorian Civil and Administrative Tribunal.  Mr Ryan has suggested that the outcome of those proceedings might act as an estoppel with respect to the claim before this tribunal.
58. [58]
    Assignment issues.  Since Mr Ritson only has assigned rights it will be necessary for the tribunal to consider whether any successful claim in respect of any of the assignors has in fact been assigned to Mr Ritson.
59. [59]
    For BC, CA and LC the assignment was in these terms:-

The Assignor assigns to the Assignee absolutely all of the Assignor’s rights of restitution and rights, title and interest under the Contract.

60. [60]
    The ‘Contract’ was defined in each of these assignments as:-

… an agreement entered into on or about date relating to the provision of services, namely an aptitude test preparation course.

61. [61]
    For GS, rights were also assigned under a second alleged contract, in this case Mr Ryan’s agreement, said to be binding, to refund the course fees to GS as a whole.^[20]
62. [62]
    If the tribunal finds that there is a restitutionary remedy arising it will need to consider whether that remedy is ‘under the contract’ as stated in the assignments.

Conclusions

63. [63]
    As required for appeals in this jurisdiction, I give leave to appeal, allow the appeal and set aside the Adjudicator’s decision for the reasons given above (he was disqualified from hearing the matter because of reasonably apprehended bias).  I am remitting this matter back to the tribunal for determination.  The matter should not be heard by either of the adjudicators who have made the decisions successfully appealed against.  I have made some directions to try to achieve a fair resolution of the matter.