Administrative Decisions Tribunal New South Wales

• Medium Neutral Citation: Faulkner v ACE Insurance Limited [2011] NSWADT 36
• Hearing dates: 26 November 2010, 18 January 2011
• Decision date: 23 February 2011
• Jurisdiction: Equal Opportunity Division
• Before: R Wright SC, Judicial Member; Dr B Weule, Non-Judicial Member; Dr J Schneeweiss, Non-Judicial Member

Decision

The Tribunal

1)Finds that the complaint in so far as it relates to ACE Insurance Ltd's refusal to supply insurance services under the American Express Repayment Protection Policy to Mr Faulkner in August-September 2009 is substantiated.

2)Dismisses those parts of the complaint that relate to the Ina-suitcase Policy and the American Express Credit Protection Policy.

3)Directs:

(a) The respondent to file and serve within 7 days of the date of these orders an affidavit from a senior executive of the respondent giving a full explanation of why the updated policy wording for the American Express Repayment Plan Policy cannot be uploaded onto the internet prior to some time in March 2011.

(b) If the applicant wishes to apply for any further orders, in the light of the affidavit to be filed by the respondent or otherwise, such application is to be made by filing and serving a notice of application together with written submissions within 7 days of the filing of the affidavit referred to in the preceding direction.

(c) The respondent to file any written submissions in reply within 7 days of the filing of the notice of application referred to in the preceding direction.

(d) Any application made by the applicant under direction (b) will be dealt with on the papers.

• Catchwords: Race Discrimination - Goods and Services - Direct Discrimination - Indirect Discrimination
• Legislation Cited: Anti Discrimination Act 1977 (NSW); Migration Act 1958 (Cth); Social Security Act 1991 (Cth); Anti Discrimination Amendment (Miscellaneous Provisions) Act 2004; Equal Opportunity Act 1995 (Vic); Racial Discrimination Act 1975 (Cth)
• Cases Cited: MacDonald v Puplick [1998] NSWSC 428; Wollongong City Council v Bonella [2002] NSWADTAP 26; Sydney University Post Graduate Representative Association v Minister for Transport Services [2006] NSWADT 83; Cobaw Community Health Services v Christian Youth Camps Ltd [2010] VCAT 1613; JQ v Double Bay Out of School Hours Inc (2) [2010] NSWADT 257; Grogan v First Rate Leisure Pty Ltd [2007] NSWADT 294; Macabenta v Minister for Immigration and Multicultural Affairs (1998) 90 FCR 202; Contreras-Ortiz v Commissioner, Department of Corrective Services [2008] NSWADT 308; Purvis v State of New South Wales (2003) 217 CLR 92; Amery v State of New South Ales (Director General NSW Department of Education and Training) [2004] NSWCA 404; New South Wales v Amery (2006) 230 CLR 174; Australian Iron & Steel Pty Ltd v Banovic (1989) 168 CLR 165; Commonwealth Bank of Australia v Human Rights and Equal Opportunity Commission (1997) 80 FCR 78; Australian Medical Council v Wilson (1996) 68 FCR 46; Waters v Public Transport Corporation (1991) 173 CLR 349; Secretary, Department of Foreign Affairs and Trade v Styles (1989) 23 FCR 251; Gardiner v WorkCover Authority of New South Wales [2004] NSWADTAP 1
• Category: Principal judgment
• Parties: David Richard Faulkner (Applicant); Ace Insurance Ltd (Respondent)
• Representation: C Ronalds SC (Respondent); D Faulkner (Applicant- in person); Radford Lawyers Pty Ltd (Respondent)
• File Number(s): 101064

REASONS FOR DECISION

1 In this matter the Applicant, Mr Faulkner, alleges that the Respondent, ACE Insurance Limited (ACE), discriminated against him on the ground of race in relation to the provision of insurance services under three separate policies issued by ACE on three separate occasions, in contravention of s 19(a) and/or (b) of the Anti Discrimination Act 1977 (NSW) (the ADA) having regard to s 7(1)(a) and/or (c) of that Act.

2 The first allegation is that ACE discriminated against Mr Faulkner in about August 2009 by refusing to make available to him a policy known as the American Express Repayment Protection Policy (the AERP Policy) which was associated with the issue of a David Jones branded American Express card.

3 The second allegation is that ACE discriminated against him in May-June 2010 and August 2010 by refusing to make available to him a travel insurance policy known as the Ina-Suitcase Policy (the IS Policy).

4 The third allegation is that ACE discriminated against Mr Faulkner in June-July 2010 by refusing to make available to him a policy known as the American Express Credit Protector Policy (the AECP Policy) which was associated with the issue by American Express of an American Express card but not a David Jones branded card.

5 In each case, Mr Faulkner alleges that cover under the policy was only available to "Australian Residents" defined as meaning Australian citizens, holders of permanent visas or "protected" Special Category Visa (SCV) holders. This was said to involve discrimination on the ground of race because:

(a) a person who was the holder of an SCV under s 32 of the Migration Act 1958 (Cth) but who was not a "protected" SCV holder (as defined in s 7(2A) to (2G) of the Social Security Act 1991 (Cth)) was not eligible for cover under the policy; and,

(b) in 2009 and 2010 (and at present), only a New Zealand citizen could hold an SCV and be a non-protected SCV holder.

6 Mr Faulkner was a New Zealand citizen and a non-protected SCV holder at all relevant times.

7 The matter first came on for hearing on 26 November 2010. On that occasion the Tribunal dealt with a number of preliminary issues and stood the substantive hearing over to 18 January 2011. At the hearing in January the Tribunal considered Mr Faulkner's claims in relation to all three of the policies. In order to understand how the allegations in relation to the three policies come to be considered by the Tribunal it is necessary to review the original complaint and how the complaint was amended by the Tribunal at the hearing on 26 November 2010.

Amendment of the Complaint and Preliminary Matters

8 On 23 September 2009, Mr Faulkner lodged a complaint with the President of the Anti Discrimination Board of New South Wales concerning alleged discrimination on the ground of race in relation to the AERP Policy. On 10 June 2010, the delegate of the President referred Mr Faulkner's complaint to the Equal Opportunities Division of the Tribunal under s 93C of the ADA. In the President's Summary of Complaint, it was noted that the period of complaint was 23 September 2008 to 23 September 2009. Further, neither the IS Policy nor the AECP Policy was the subject of that complaint.

9 The refusal to supply insurance services under the AERP Policy was alleged to have taken place during the period of complaint. From Mr Faulkner's affidavit evidence, it appears that on 20 August 2009, Mr Faulkner was in the process of completing the online application for a David Jones American Express card together with the AERP Policy when he discovered that he was not eligible for cover because, although he was a SCV holder, he was not a 'protected' SCV holder. In September 2009 and prior to 23 September of that year, Mr Faulkner received emails from ACE confirming that their intention was to restrict access to cover under the AERP Policy on the terms of the then current policy wording. Thus, any refusal of services under the AERP Policy occurred between 23 September 2008 and 23 September 2009.

10 However, in his Points of Claim filed on 17 August 2010 and in his affidavit of 17 August 2010, Mr Faulkner also raised alleged refusals to provide services under the IS Policy and the AECP Policy. As noted above, these latter two policies had not been referred to in the complaint lodged with the President of the Anti Discrimination Board and, prior to 26 November 2010, there was no indication of when the alleged refusals to supply the services under those policies had occurred.

11 Ms Ronalds of Senior Counsel who appeared for the Respondent properly raised these matters with the Tribunal by way of a preliminary application on 26 November 2010.

12 On enquiry of Mr Faulkner, who represented himself, it became clear that the alleged refusal to provide services in respect of the IS Policy and the AECP Policy occurred after the date of the complaint to the President.

13 As a result, the additional matters sought to be raised by Mr Faulkner could not be dealt with because, as a general rule, a complaint cannot include acts which occurred after the complaint was lodged - see MacDonald v Puplick [1998] NSWSC 428 (Simpson J) and the Appeal Panel's decision in Wollongong City Council v Bonella [2002] NSWADTAP 26 at [75]. This principle continues to operate notwithstanding the amendments to the ADA effected by the Anti Discrimination Amendment (Miscellaneous Provisions) Act 2004 - Sydney University Post Graduate Representative Association v Minister for Transport Services [2006] NSWADT 83 (SUPRA) at [24]. Those amendments, however, included sections which conferred powers to amend a complaint. In particular under s 91C of the ADA the President is now empowered to amend a complaint after it has been made and under s 103 the Tribunal may amend a complaint at any stage of proceedings and may amend it to include additional complaints and anything else not investigated by the President. If these powers of amendment are exercised, acts and matters arising after the initial complaint was lodged can be included in the complaint - SUPRA at [24]. Accordingly, if the Tribunal amended Mr Faulkner's initial complaint so as to include the alleged refusals to supply services under the IS and AECP Policies they could be dealt with by the Tribunal without the need for Mr Faulkner to lodge new complaints with the President of the Anti-Discrimination Board.

14 In order formally to clarify the issue, the Tribunal required Mr Faulkner to give particulars of the dates on which he alleged the services under the IS and AERP Policies were refused. Mr Faulkner indicated orally, which was accepted as adequate particularisation by ACE, that the IS Policy had been refused in May-June 2010 and August 2010 and that the AECP Policy had been refused in June-July 2010.

15 In response to ACE's preliminary application to have these issues relating to the IS and AERP Policies struck out of the points of claim, Mr Faulkner applied to amend the complaint to include the refusals to supply the IS Policy and the AECP Policy at the times orally particularised by him.

16 The Tribunal considered it appropriate in the circumstances to amend the complaint under s 103 of the ADA in the manner indicated so that all of the claims sought to be raised could be dealt with in one matter at one hearing in an efficient manner. The alleged perpetrator and aggrieved person were the same in each case and the alleged discrimination on the ground of race arose out of the inclusion of the same definition of "Australian Resident" in its original or redrafted form in each policy. In all the circumstances, the Tribunal was of the opinion that the three claims of discrimination arose out of the same or substantially the same circumstances or subject matter and it was appropriate to deal with them all in one proceeding. The Tribunal also took into account that any prejudice to the Respondent which might be thought to arise out of the amendment could be overcome by an appropriate adjournment and directions for the filing of further evidence and related matters.

17 Accordingly, the Tribunal on 26 November 2010 ordered that the complaint be amended to include the allegations concerning refusal to supply services under the IS Policy and the AERP Policy, made certain directions for the filing of evidence and related matters and stood the matter over for hearing on 18 January 2011.

18 It should also be noted here that Mr Faulkner also agreed not to press any issue relating to an alleged failure to amend the definition of "Australian Resident" in the AERP Policy as allegedly agreed, which had been raised in the points of claim.

19 The substantive hearing of the matter took place on 18 January 2011.

The Evidence

20 The President's Report was tendered and admitted into evidence. In addition, Mr Faulkner relied upon 4 affidavits sworn by him and the bundles of documents annexed to those affidavits. The Tribunal approached those affidavits on the basis that where they contained opinions, argument or submission, the Tribunal would treat those parts as submission rather than as evidence. A copy of each of the AERP Policy (prepared on 8 July 2008), the IS Policy (prepared 14 August 2008) and the AECP Policy (prepared 5 March 2010) was also put into evidence. It was not in dispute that these were the policies that were applicable at the times of the alleged failures to supply services. Finally, Mr Faulkner tendered examples of credit card protection policies for cards issued by the Commonwealth Bank, Westpac and the ANZ Bank. Mr Faulkner was cross examined.

21 Generally, Mr Faulkner appeared to us to be a reliable witness. He acknowledged his mistake in relation to the date he obtained a Commonwealth Bank American Express Card and gave a reasonable explanation as to how it occurred. He also made appropriate concessions even though they did not assist his case. We accept Mr Faulkner's evidence, subject only to the matters raised below in relation to the question of whether he was actually seeking to obtain cover from ACE under the IS Policy and the AECP Policy in the relevant periods in 2010.

22 The Respondent's evidence included two affidavits from Mr Andrew Nisbet, who since April 2010 has been the Accident & Health Underwriting Manager Australia and New Zealand of ACE. In addition, a copy of the AERP Policy (prepared 17 January 2011), the IS Policy (prepared 22 December 2010) and the AECP Policy (prepared 18 January 2011) were tendered without objection. It was common ground that these versions of the policies became effective on the date they were said to have been prepared and were the forms of the policies current as at the conclusion of the hearing of this matter. Mr Nisbet gave some limited additional oral evidence in chief with the leave of the Tribunal and was cross examined. Mr Nisbet appeared to us to be a careful and reliable witness who also made appropriate concessions even if they did not assist his employer's case. We would generally accept his evidence.

23 Although similar issues arise in respect of each policy, it is more convenient to set out the relevant statutory provisions and then consider in detail the evidence and submissions in relation to each of the alleged refusals to supply services under each of the three policies separately.

The Relevant Provisions of the ADA

24 Mr Faulkner alleges that ACE discriminated against him on the ground of race in respect of the AECP, IS and AERP Policies. Discrimination in relation to the supply of services is rendered unlawful by s 19 of the ADA which provides:

It is unlawful for a person who provides (whether or not for payment) goods or services to discriminate against another person on the ground of race:

(a) By refusing to provide the person with those goods or services, or

(c) In the terms on which the other person is provided with those goods or services.

25 In s.4(1) of the ADA 'services' is defined as including:

(a) Services relating to ... insurance ...

26 Section 7 of the ADA sets out what constitutes discrimination on the ground of race and provides in part:

(1) A person (the perpetrator) discriminates against another person (the aggrieved person) on the ground of race if, on the ground of the aggrieved person's race ..., the perpetrator:

(a) Treats the aggrieved person less favourably than in the same circumstances, or in circumstances, or in circumstances which are not materially different, the perpetrator treats or would treat a person of a different race ... or

...

(c) Requires the aggrieved person to comply with a requirement or condition with which a substantially higher proportion of persons not of that race ... comply or are able to comply, being a requirement which is not reasonable having regard to the circumstances of the case and with which the aggrieved person does not or is not able to comply.

(2) For the purposes of ss.1(a) and 1(b), something is done on the ground of a person's race if it is done on the ground of the person's race, a characteristic that appertains generally to persons of that race or a characteristic that is generally inputted to persons of that race.

27 The definition of 'race' in s.4(1) of the ADA includes 'colour, nationality, descent and ethnic, ethno-religious or national origin'.

The Relevant Provisions of the Migration Act and the Social Security Act

28 In order to understand the situation in which Mr Faulkner finds himself as a New Zealand citizen and a non-protected SCV holder in Australia, it is also necessary to have regard to the relevant provisions of the Migration Act and the Social Security Act.

29 The Migration Act provides in s.30 for two general kinds of visa, a permanent visa and a temporary visa, as follows:

(1) A visa to remain in Australia (whether also a visa to travel to and enter Australia) may be a visa, to be known as a permanent visa, to remain indefinitely.

(2) A visa to remain in Australia (whether also a visa to travel to and enter Australia) may be a visa, to be known as a temporary visa, to remain:

(a) During a specified period; or

(b) Until a specified event happens; or

(c) While the holder has a specified status.

30 Special category visas are described in s.32 of the Migration Act:

(1) There is a class of temporary visas to be known as special category visas.

(2) A criteria for a special category visa is that the Minister is satisfied the Applicant is:

(a) A non citizen;

(i) Who is a New Zealand citizen and holds, and has presented to an officer or an authorised system, a New Zealand passport that is force; and

(ii) Is neither a behaviour concern non-citizen nor a health concern non-citizen; or

(b) A person declared by the regulations, to be a person for whom a visa of another class would be inappropriate; or

(c) A person in a class of persons declared by the regulations, to be persons for whom a visa of another class would be inappropriate.

(3) A person may comply with sub-paragraph (2)(a)(i) by presenting a New Zealand passport to an authorised system only if:

(a) The New Zealand passport is of a kind determined under s.175A to be an eligible passport for the purposes of Division 5 of Part 2; and

(b) Before the person is granted a special category visa, neither the system nor an officer requires the person to present the passport to an officer.

31 The Tribunal's attention was also drawn to the Part of Schedule 2 to the Migration Regulations 1994 which deals with SCVs, namely the Part Headed "Sub Class 444 Special Category". The relevant items in that part include item 444.2 headed 'Primary Criteria' which provides:

Note: The only criteria are those set out in paragraph 32(2)(a) of the Act and in Regulation 5.15A. Under paragraph 32(2)(a) of the Act, the requirements are: that the applicant is a New Zealand citizen; that the applicant holds, and has presented to an officer or an authorised system, a New Zealand passport that is in force; and that the applicant is neither a behaviour concern non-citizen nor a health concern non-citizen.

The terms behaviour concern non-citizen and health concern non-citizen are defined in ss.5(1) of the Act. Prescribed diseases in respect of a health concern non-citizen are set out in Regulation 5.1(6). The definition of behaviour concern non-citizen includes a person who has been who has been excluded from other countries in certain circumstances. Those circumstances are set out in Regulation 5.1(5).

Paragraph 32(2)(c) of the Act allows other classes of persons to be declared by the regulations as classes of persons for whom a visa of another class would be inappropriate, and the declaration of a class of persons is to be found in Regulation 5.5(1)(a).

Under Regulation 5.1(5)(A), the requirements are that the applicant is a New Zealand citizen who holds, and presented to an officer, a New Zealand passport that is in force; that the applicant is not a health concern non-citizen; and that the applicant is a behaviour concern non-citizen only because he or she has been excluded from another country in circumstances that, in the Minister's opinion, do not warrant the exclusion of the applicant from Australia.

32 Further, item 444.5 headed 'When Visa is in Effect' provides as follows:

444.511 Temporary visa permitting the holder to remain in Australia while the holder is a New Zealand citizen.

33 It appears that the concept of a 'protected' SCV holder derives from the Social Security Act and not the Migration Act. Section 7 of that Act provides in part:

Australian Resident Definitions

(1) In this Act, unless the contrary intention appears:

Australian Resident has the meaning given by ss(2).

...

Protected SCV holder has the meaning given by ss(2A), (2B), (2C) and (2D).

...

(2) An Australian Resident is a person who:

(a) Resides in Australia; and

(d) Is one of the following:

(i) An Australian citizen;

(ii) The holder of a permanent visa;

(iii) A special category visa holder who is a protected SCV holder.

(2A) A person is a Protected SCV Holder if:

(a) The person was in Australia on 26 February 2001 and was a special category visa holder on that day; or

(e) The person had been in Australia for a period of, or for periods totalling 12 months during the period of two years immediately before 26 February 2001, and returned to Australia after that day.

(2B) A person is a Protected SCV Holder if the person:

(a) Was residing in Australia on 26 February 2001; and

(f) Was temporarily absent from Australia on 26 February 2001; and

(g) Was a special category visa holder immediately before the beginning of the temporary absence; and

(h) Was receiving a social security payment on 26 February 2001; and

(i) Returned to Australia before the later of the following:

(i) The end of the period of 26 weeks beginning on 26 February 2001;

(ii) If the Secretary extended the person's portability period for the payment under s.1218C - the end of the extended period.

(2C) A person who commenced, or recommenced, residing in Australia during the period with three months beginning on 26 February 2001 is a Protected Special Category Holder at a particular time, if:

(a) The time is during a period of three years beginning on 26 February 2001; or

(j) If the time is after the end of that period, and either:

(i) A determination number ss(2E) is in force in respect of the person; or

(ii) The person claimed a payment under the Social Security law during that period, and the claim was granted on the basis that the person was a protected SCV holder.

(2D) A person who, on 26 February 2001:

(a) Was residing in Australia; and

(k) Was temporarily absent from Australia;

(l) Was not receiving a Social Security payment;

Is a Protected Special Category Visa Holder at a particular time if:

(m) The time is during the period of twelve months beginning on 26 February 2001; or

(n) The time is after the end of that period, and either:

(i) At that time, a determination under ss(2E) is in force in respect of the person; or

(ii) The person claimed a payment under the Social Security law during that period, and the claim was granted on the basis that the person was a protected SCV holder.

(2E) A person who is residing in Australia and is in Australia may apply to the Secretary for a determination under this sub-section stating that:

(a) The person was residing in Australia on 26 February 2001, but was temporarily absent from Australia on that day; or

(o) The person commenced, or recommenced, residing in Australia during the period of three months beginning on 26 February 2001.

(2F) If a person makes an application under ss(2E), the Secretary must make the determination if:

(a) The Secretary is satisfied that paragraph (2E)(a) or (2E)(b) supplies to the person; and

(p) The application was made within whichever of the following periods is applicable:

(i) If paragraph (2E)(a) applies to the person - the period of twelve months beginning on 26 February 2001;

(ii) If paragraph (2E)(b) applies to the person - the period of three years commencing on 26 February 2001.

(q) The Secretary must give a copy of the determination to the person.

(2G) The Secretary must make a determination under this sub-section in respect of a person if the person is a protected SCV holder because of ss(2B). If the Secretary is required to make such a determination:

(a) The determination must state that the person was residing in Australia on 26 February 2001, but was temporarily absent from Australia on that day; and

(r) The determination must be made within the period of six months of the person's return to Australia; and

(s) A copy of the determination must be given to the person.

...

34 It was not in dispute between the parties that Mr Faulkner was at all relevant times an SCV holder but not a 'protected' SCV holder.

The AERP Policy - August-September 2009

35 At some time prior to 20 August 2009, Mr Faulkner and his wife decided to purchase a number of Luxaflex blinds for their apartment. The total cost of those blinds exceeded $10,000.00. As Mr Faulkner understood it, the Luxaflex blinds could be obtained from David Jones and a substantial interest free period would be available if they purchased these blinds using a David Jones branded American Express card. Mr Faulkner also believed that other similar credit cards did not offer the same lengthy interest free period.

36 On 20 August 2009, Mr Faulkner was in the process of completing the online application for a David Jones American Express card when he was required to choose between two options expressed in the following terms:

Yes, I want American Express Repayment Protection at a cost of $0.89 per $100.00 of my monthly outstanding balance. I have read the FSG and Policy Wording and PDS and agree to receive these documents in this format. I understand the policy is optional, that I can cancel the policy at any time and that cover is subject to approval of my card application.

No, I do not wish to apply for American Express Repayment Protection.

37 Mr Faulkner read the relevant Policy Wording and Product Disclosure Statement for the AERP Policy and noted that the benefits included a Death Benefit, a Serious Accident Benefit, an Income Replacement Benefit, an Involuntary Unemployment Benefit and a Life Events Benefit. He says that he wished to apply for this insurance, particularly given that he was no longer eligible for Government unemployment benefits, as a result of not being a protected SCV holder, and the insurance cover included an involuntary unemployment benefit.

38 As he read the relevant policy wording and product disclosure statement, however, Mr Faulkner discovered in Section 13 - General Conditions, under the heading 'Australian Law', a statement that:

You must be an Australian Resident to be covered by this Policy.

39 In Section 19 - Glossary, the phrase 'Australian Resident' was defined as meaning:

A person who resides in Australia and has permission to remain permanently in Australia either because they are:

(a) An Australian citizen; or

(b) The holder of a permanent visa; or

(c) A protected special category visa holder.

40 On reading this, Mr Faulkner formed the view that he was not included within the definition of 'Australian Resident' as he was neither an Australian citizen, the holder of a permanent visa nor a protected SCV holder, if those words meant the same as the similar phrase in the Social Security Act. Mr Faulkner felt that this refusal of eligibility for cover under the AERP Policy discriminated against him on grounds of his nationality. As a consequence, he wrote by email to ACE on 21 August 2009 asking them to amend the policy wording of the AERP Policy in order to include all resident New Zealand citizens under the policy term 'Australian Residents'. In that email, he referred to the possibility that the wording might represent unlawful race discrimination under the ADA. He suggested that the word 'protected' be removed from item (c) of the definition of Australian Resident in the policy wording.

41 On 15 September 2009, a customer relations representative of ACE replied by email to Mr Faulkner and put the position that any refusal to supply insurance services to a New Zealand citizen who was not a protected SCV holder would arise because they did not have the required visa, not by reason of their nationality as New Zealanders. Accordingly, ACE rejected the view that the wording of the policy in this regard could give rise to unlawful discrimination under the ADA.

42 In the course of further email correspondence between Mr Faulkner and ACE, ACE confirmed their underwriter's intention to restrict access to cover on the terms of the then current policy wording (see the email from Nadia Ponsonby of ACE Insurance Limited dated 16 September 2009 to Mr Faulkner). Further, some indication as to the reasoning behind the restriction of cover to Australian residents, as defined, was given by Ms Ponsonby in her email of 18 September 2009 to Mr Faulkner in the following terms:

Underwriters have considered and assessed various risk factors in determining the basis on which ACE is prepared to underwrite this policy, as is the process for all policy ACE underwrites. The policy wording sets out the basis of which we are prepared to offer this product. We do not propose to disclose details of the underwriting rationale or decisions. Of note, however, the Involuntary Unemployment benefit under the policy requires claimants to register with Centrelink, and it is our understanding that, in order for New Zealanders to do so, they must be Protected SCV holders.

Having given thorough consideration to the issue that you have raised, we remained comfortable with our conclusion, as previously advised to you.

43 Mr Faulkner took this correspondence and especially the email of 16 September 2009 as confirmation that ACE was determined to refuse to provide him with insurance cover under the AERP Policy unless he could meet the definition of "Australian Resident" and consequently lodged a complaint of discrimination on the basis of race in the provision of goods and services with the President of the Anti-Discrimination Board.

The AERP Policy - Racial Discrimination?

44 Mr Faulkner alleges that these actions on the part of ACE amount to unlawful discrimination on the ground of race in relation to the provision of services under both s 19(a) and s 19(b) of the ADA. In so doing, he alleges that ACE has engaged in both direct discrimination under s 7(1)(a) of the ADA and indirect discrimination under s 7(1)(c).

45 In order to establish unlawful discrimination under s.19 of the ADA, in the present circumstances, it must be established that:

(a) ACE was a person who provided services, within the meaning of the Act;

(b) ACE refused to provide Mr Faulkner with those services (subs 19(a)) or provided the services on certain terms (subs 19(b)); and

(c) In so doing, ACE discriminated against Mr Faulkner on the ground of race (within s 7 of the ADA).

46 Direct discrimination under s 7(1)(a) requires consideration of three major issues:

(a) Race - What particular aspect of "race" does Mr Faulkner rely upon?

(b) Differential treatment - Was Mr Faulkner treated less favourably than in the same or not materially different circumstances ACE would treat a person of a different race?

(c) Causation - Was any differential treatment on the ground of race?

47 Indirect discrimination under s 7(1)(c) involves the following considerations in the present case:

(a) Did ACE impose a requirement or condition?

(b) Was Mr Faulkner unable to comply with the requirement or condition?

(c) Did a substantially higher proportion of persons not of Mr Faulkner's race comply or were they able to comply with the requirement or condition?

(d) Was the requirement (or condition) not reasonable having regard to the circumstances of the case?

Did ACE Provide "Services"?

48 It was not in dispute that ACE was, at all relevant times, a company which provided insurance services under insurance policies such as the AERP Policy, the IS Policy and the AECP Policy. In the light of inclusion of "services relating to ... insurance" in paragraph (a) of the definition of services in s.4(1) of the ADA, the Tribunal is satisfied that ACE was "a person who provides (whether or not for payment) ... services" within s.19 of the ADA.

Did ACE Refuse to Provide those Services?

49 The next issue which arises in the context of s 19(a) is whether ACE refused to provide Mr Faulkner with those services.

50 Mr Faulkner submitted that the wording of the AERP Policy, which restricted its availability to Australian residents as defined in that policy, and the confirmation of that position by ACE's emails sent to Mr Faulkner in September 2009 establish that ACE was refusing to provide or make available its insurance services relating to the AERP Policy to him. As an SCV holder who was not a protected SCV holder, he did not meet the eligibility requirement laid down in the policy. This, he contended, amounted to a refusal to supply insurance services by ACE which fell within s 19(a) of the ADA.

51 ACE submitted that in order to fall within s 19(a) there must be an act done by ACE and that must be an act of refusal to provide the relevant services of insurance. It was submitted that, in Mr Faulkner's case, there was only an assumption by him that he would be refused those services if he applied. In fact, no application for insurance under the AERP Policy was ever made by Mr Faulkner and no such application was ever received, reviewed and accepted or rejected by ACE or its relevant agent.

52 Further, it was submitted that not only was Mr Faulkner, as a non protected SCV holder not eligible to take out the AERP Policy and be covered by it, he was also not eligible to receive any benefits under the AERP Policy as he did not hold a David Jones American Express card. Further, not being the holder of a David Jones American Express card, he had no capacity to make a claim under the policy as the policy only covered balances owing consequent upon use of a David Jones American Express card. Moreover, as Mr Faulkner did not hold the relevant card, there was no ability to calculate the monthly premium payable (as the amount was a percentage of the balance owing on the David Jones American Express card account) and there was no process available for him to pay the premium (as it could only be paid by being charged to the David Jones American Express card account). Thus, it was argued that not being the holder of a David Jones American Express card, Mr Faulkner was not able to obtain cover under the AERP Policy and that if the Tribunal were to find that there had been a constructive refusal of supply, it would first have to deem that Mr Faulkner held a David Jones American Express card, which he did not.

53 The Tribunal does not accept ACE's submissions that there has been no refusal, actual or constructive, of supply of insurance services to Mr Faulkner. By communicating its position that it would only cover Australian residents falling within the definition in the AERP Policy to Mr Faulkner via the internet, and subsequently confirming that position in the email correspondence with Mr Faulkner, ACE was actually refusing to provide or make available to Mr Faulkner, a non-protected SCV holder, the insurance services under the AERP Policy. If this is correct, it is irrelevant that Mr Faulkner did not complete and submit the online application form in order for the application to be refused by ACE in accordance with the terms of the AERP Policy.

54 Such an approach is consistent with the recent decision of the Victorian Civil and Administrative Tribunal in Cobaw Community Health Services v Christian Youth Camps Ltd [2010] VCAT 1613 where it was held at [148] to [150] in relation to s 42(1)(a) of the Equal Opportunity Act 1995 (Vic) (which is relevantly equivalent to s 19(a)):

148 The effect of the respondents' submission is that there can be no refusal to provide services, or refusal or failure to accept an application for accommodation until an applicant has made a formal application, in the terms required by the internal processes of a provider of services or accommodation, or in terms more fitted to the law of contract. This is a narrow, legalistic and technical interpretation of the words 'refusing to provide... services' in s 42(1)(a), and 'refusing or failing to accept the other person's application for accommodation' in s 49(1)(a). Such an interpretation would permit a service or accommodation provider to act in a way which, in practical terms, deters or prevents a person from making application in the form required by the respondents, and so avoid the operation of the EO Act.

149 There is nothing in the EO Act itself which provides support for such a narrow interpretation. What is required is, for the purposes of s 42(1), where an applicant wishes to be provided with services offered by the respondents, that the respondents convey to them that their application has been, or will be, refused. ... How an applicant will communicate their wish to be provided with services, or to apply for accommodation will be a question of fact in each case. Similarly, the way a respondent communicates a refusal to provide services, or a refusal or failure to accept an application for accommodation, will be a question of fact in a particular case. That will vary from case to case.

150 Where a service provider has indicated it will not provide services, it is not necessary for the applicant to attempt to comply with the respondents' own procedures for formalising an application before it can complain of a refusal to provide services. ...

55 If we are wrong on this point and the decision to offer the AERP Policy on terms which restricted the eligibility for cover to Australian residents, and confirmation of that decision, do not amount to an actual refusal to supply, we find that there has been a constructive refusal to supply.

56 In a number of cases the Tribunal has considered the "deemed or constructive refusal" of supply of services, including entry to premises. In JQ v Double Bay Out of School Hours Inc (2) [2010] NSWADT 257, the Tribunal considered, among other things, whether there had been a refusal to provide services where the applicant in that case, Mr JQ, had not in fact applied for the services in question because he had been advised that any such application would be refused. At [98], the Tribunal held that:

In the Tribunal's view, the applicant's claim cannot be restricted to a case of services actually provided, and the facts surrounding the claim can amount to an actual or (more likely) deemed or constructive refusal by the respondent. Ms Lawson, in interpreting for Mr JQ the policies of the Centre, made it clear that any application for alternate-week bookings would be refused.

57 Grogan v First Rate Leisure Pty Ltd [2007] NSWADT 294 also involved a finding of a constructive refusal to provide services by way of entry to premises. In that case, the complainants alleged that the first respondent unlawfully discriminated against each applicant in the provision of goods and services on the ground of their Aboriginal race. Two groups of Aboriginal people had sought admission to a venue operated as a nightclub. At [22], the Tribunal held:

In the case of David Dargin, the first three respondents submitted that he was not directly refused entry into the premises and as he voluntarily chose not to persist with his intention of entering the premises as he friend, Mr Wheldon had previously been refused admission, Mr Dargin had not suffered discrimination under that sub-section of the Act or at all. The Tribunal does not accept this submission. Although Mr Dargin was not directly spoken to by a security guard or directed not to enter the premises, Mr Dargin withdrew from the queue of persons waiting to enter the premises when he saw his friend Mr Wheldon refused admission. Mr Dargin went with Mr Wheldon and they stood apart from the people in the queue and they spoke to the security guard, Mr Brett McLean, who had refused Mr Wheldon's admission. Mr McLean apologised to Mr Wheldon for having to refuse his admission and told him he was acting on instructions from the management of the hotel and said that there was nothing he could do about it and that his instructions were to refuse admission to all Aboriginal people. In those circumstances it was a natural reaction for another Aboriginal person, namely Mr Dargin, to understand that his admission to the premises would also be rejected if he persisted by standing in the queue and seeking admission. This constitutes, in effect, a constructive refusal of admission in the absence of a direct refusal to Mr Dargin.

58 Further, at [27] of the reasons for decision in Grogan, it was held:

The refusal of admission to one of the members of the group who wished together to enjoy a night out at the SJ nightclub in circumstances where that refusal related to the Aboriginality of Mr Wheldon was a constructive refusal of entry to each of the members of that group ...

59 We believe a similar analysis is applicable in the present case. ACE's decision to limit cover to Australian Residents as defined in the policy wording and its confirmation by email that it would not change that wording so that Mr Faulkner was eligible for cover under the AERP Policy amounts to a constructive refusal to supply services, if not an actual refusal. In other words, it was not necessary for Mr Faulkner to submit an application and have it rejected before there could be a refusal falling within s 19(a) of the ADA.

60 The Respondent also submitted that there was no refusal because Mr Faulkner's application was never made and was, in any event, doomed to fail as he did not hold and never held a David Jones American Express card. In the Tribunal's view, this involves a misunderstanding of what occurred and how the AERP Policy could be applied for. Mr Faulkner's evidence was that he wished to apply for a David Jones American Express card together with the insurance cover provided by the AERP Policy. From the online application form, it was clear that a person who was applying for a David Jones American Express card had, at the same time, the option of applying for insurance on the terms of the AERP Policy. It was not a pre-condition of applying for cover under the AERP Policy that the applicant already hold a David Jones American Express card. The options contained in the online application form cited above, in the case where the applicant for a David Jones American Express card decided to seek cover under the AERP Policy as well, contained an acknowledgement by the applicant that "I understand the policy is optional, that I can cancel the policy at any time and that cover is subject to approval of my card application" (underlining added). It was not necessary that an applicant for cover under the AERP Policy already hold a David Jones American Express card. Accordingly, the Tribunal rejects the Respondent's submission that in order to find that there had been a constructive refusal to supply insurance services under the AERP Policy the Tribunal would have to deem that Mr Faulkner already held a David Jones American Express card or that his application for such a card would have been successful. As we understand it, Mr Faulkner was seeking a bundle of services which included both the David Jones American Express card and cover under the AERP Policy. Because of ACE's limitation on the availability of cover to Australian Residents, as defined, Mr Faulkner could not obtain that bundle, including the services relating to insurance.

61 Accordingly, we find that ACE refused to provide services, namely insurance services under the AERP Policy, to Mr Faulkner in the period August to mid September 2009.

Did ACE Provide those Services on certain Terms?

62 Mr Faulkner never applied for cover under the AERP Policy and, consequently, ACE never provided or made available any services to him in relation to this policy. As a result, it cannot be said that ACE provided those services to Mr Faulkner on any terms or in any manner at all. Accordingly, the Tribunal finds that s 19(b) of the ADA is not applicable in the present circumstances.

Did ACE Directly Discriminate Against Mr Faulkner?

63 Having found that ACE refused to supply to Mr Faulkner services relating to insurance under the AERP Policy, the Tribunal now turns to consider whether ACE directly discriminated against Mr Faulkner on the ground of race in so doing.

64 The first issue which is required to be considered in this context is what is included in the statutory term "race". "Race" in the ADA includes "colour, nationality, descent and ethnic, ethno-religious or national origin" and Mr Faulkner contends that he was directly discriminated against on the ground of his nationality, being a New Zealand citizen.

65 It has been held by the Full Court of the Federal Court in Macabenta v Minister for Immigration and Multicultural Affairs (1998) 90 FCR 202 at 211 that, in the context of the Racial Discrimination Act 1975 (Cth), nationality should be construed as equivalent to citizenship but was different from "national origin". This approach of treating the terms "citizenship" and "nationality" as synonymous has been adopted by the Tribunal in relation to the ADA in a number of decisions including: SUPRA [2006] NSWADT 83 at [62] and [63] and Contreras-Ortiz v Commissioner, Department of Corrective Services [2008] NSWADT 308 at [66]. Accordingly, if there is differential treatment of Mr Faulkner on the ground of his New Zealand citizenship this will amount to direct discrimination on the grounds of race under s 7(1)(a) of the ADA.

66 The second issue is differential treatment, sometimes referred to as the comparator issue. Was Mr Faulkner treated less favourably than in the same or not materially different circumstances ACE would have treated a person of a different race or, more particularly in the present case, of different citizenship?

67 In this regard the Respondent first submitted that there was "no act of direct discrimination". The argument was that the wording of s 7(1)(a) required Mr Faulkner to be "treated" in some way by ACE. Since Mr Faulkner made no application to ACE and could not have made an application for cover under the AERP Policy because he did not hold a David Jones American Express card, ACE had not considered the application or done anything else with regard to Mr Faulkner. In short, it was submitted that ACE had not "treated" him in any way at all.

68 Effectively, this is the same argument as the Respondent relied upon to support the contention that there was no "refusal" within s 19(a) of the ADA, which has been dealt with above. For substantially the same reasons, the Tribunal rejects the Respondent's submission that there was no act which could amount to direct discrimination. We are satisfied that by stating that cover under the AERP Policy was restricted to categories of persons which excluded Mr Faulkner and by making clear that it would not alter the policy wording to allow Mr Faulkner to be covered by the AERP Policy, there were acts which might amount to direct discrimination, if the other requirements were satisfied. Refusal to provide services (such as insurance cover), whether actual or constructive, amounts to treatment for the purposes of s 7(1)(a), especially where the unlawfulness of the conduct falls to be considered under s 19(a) of the ADA.

69 Mr Faulkner, a New Zealand citizen, was refused cover under the AERP Policy. From the terms of the policy wording and from the correspondence which passed between Mr Faulkner and ACE in September 2009, it is clear that persons not of New Zealand citizenship, such as Australian citizens, would not have been treated in this way by ACE. It has not been suggested that there are any circumstances applicable to Mr Faulkner or his situation, for example, his credit record, employment history or similar matters, that would have rendered him ineligible for a David Jones American Express Card and cover under the AERP Policy. The Tribunal concludes that Australian citizens, in the same circumstances, or circumstances not materially different, would not have been refused cover under the AERP Policy by ACE.

70 This finding is sufficient to establish that Mr Faulkner was treated less favourably than a person of a different citizenship or nationality. The circumstance that other non-Australian citizens, for example those with permanent visa status or protected SCV holders, would not have been treated as Mr Faulkner was treated does not prevent a finding that he was not the subject of less favourable treatment than a person of another nationality, and hence, race - see the discussion in Contreras-Ortiz v Commissioner, Department of Corrective Services [2008] NSWADT 308 at [70] to [74].

71 Nor does the Tribunal accept that the "same circumstances" in this case requires the comparator not to be an Australian citizen who is entitled to remain in Australia permanently but to be a non-Australian citizen who holds only a temporary visa. Just because Mr Faulkner is only an SCV holder, which is only a temporary not a permanent visa (see ss 30 and 32 of the Migration Act), it does not follow that the comparator cannot be someone entitled to reside permanently in Australia. Section 7(a) establishes that the relevant comparator is to be "a person of a different race" which, in the present context, refers to a person of a different nationality. An Australian citizen is a person of a different nationality from a New Zealand citizen and is a permissible comparator in this case - applying, in the context of racial discrimination, the comments of Gummow, Hayne and Heydon JJ in Purvis v State of New South Wales (2003) 217 CLR 92 at [213] in relation to disability discrimination. The comparison that is to be made under s 7(1)(a) is of the treatment given to Mr Faulkner and the treatment of a person of a different nationality, such as an Australian citizen, "in the same circumstances, or in circumstances that are not materially different" - once again applying the reasoning in Purvis v State of New South Wales (2003) 217 CLR 92 at [214]. This is the comparison that the Tribunal has made.

72 For these reasons, the Tribunal finds that the differential treatment limb of s 7(1)(a) has been satisfied.

73 The final issue arising for the purposes of s 7(1)(a) is causation - whether the differential treatment of Mr Faulkner was "on the ground of race [or more particularly in this case, nationality or citizenship]". Or, to put another way, was there a causal connection between the differential treatment and Mr Faulkner's race, in the sense of nationality or citizenship?

74 It has been held in a number of cases that the phrase "on the ground of" in anti-discrimination legislation does not require an examination of intention or motive - Purvis v State of New South Wales (2003) 217 CLR 92 at [235] and footnote 164. Nonetheless, in Purvis, Gummow, Hayne and Heydon JJ held at [236]:

For present purposes, it is enough to say that we doubt that distinctions between motive, purpose or effect will greatly assist the resolution of any problem about whether treatment occurred or was proposed "because of" disability. Rather, the central question will always be - why was the aggrieved person treated as he or she was? If the aggrieved person was treated less favourably was it "because of", "by reason of", that person's disability? Motive, purpose, effect may all bear on that question. But it would be a mistake to treat those words as substitutes for the statutory expression "because of".

75 In addressing the question of why Mr Faulkner was treated as he was, regard should be had to the evidence of the Respondent on why it limited eligibility for cover to Australian Residents as defined in the AERP Policy. In Ms Ponsonby's email to Mr Faulkner of 18 September 2009, ACE notes that "the Involuntary Unemployment benefit under the policy requires claimants to register with Centrelink, and it is our understanding that, in order for New Zealanders to do so, they must be Protected SCV Holders".

76 This reason for inclusion of the restriction was further elaborated upon by Mr Nisbet in his affidavit evidence. Mr Nisbet was not the manager of ACE responsible for inclusion of the definition of Australian Resident in the AERP Policy and ACE did not call the person who was responsible. No explanation of this failure was given. Nonetheless, Mr Nisbet says that from his experience and knowledge of ACE's policies, practices and procedures, the definition of "Australian Resident" was primarily included in the AERP Policy because of the Involuntary Unemployment Benefit available under the policy. In order to make a claim for that benefit a policy holder was required to obtain written evidence from an Australian Government Agency such as Centrelink to prove that the holder was involuntarily unemployed in Australia and was seeking reemployment in Australia. The definition in the AERP Policy was, according to Mr Nisbet, taken from the Social Security Act definition cited above.

77 From this it appears that, whether or not ACE was misguided in its reason for doing so, the real reason why Mr Faulkner was treated differently was not his nationality or citizenship, and thus his race, but because his status under the Social Security Act as a non-Protected SCV holder was thought to render him and others in the same position ineligible to be registered with Centrelink. Most if not all New Zealand citizens resident in Australia were likely to have been entitled to reside here because they held an SCV. Some New Zealand citizens resident in Australia were eligible for cover under the AERP Policy, some were not. It depended upon whether they had "protected" status under the Social Security Act.

78 The Respondent submitted that the differential treatment was on the ground of visa status not citizenship or nationality. This may be accepted as partially correct in that it was not on the ground of citizenship or nationality that Mr Faulkner was treated differently. He was not, however, treated differently because he was an SCV holder, that is, because of his visa status. It was in reality his lack of "protected" Social Security Act status which led to the differential treatment. If this is accepted, Mr Faulkner would fail in his claim of direct discrimination.

79 To overcome this difficulty, Mr Faulkner sought to rely upon s 7(2) of the ADA which provides:

For the purposes of subsection (1) (a) and (b), something is done on the ground of a person's race if it is done on the ground of the person's race, a characteristic that appertains generally to persons of that race or a characteristic that is generally imputed to persons of that race.

80 He submitted that the ability to become an SCV holder was a characteristic that appertains generally to New Zealanders. Then it was argued, given that SCV holder status is a characteristic that generally appertains to non-Australian citizens who are New Zealand citizens, it therefore followed that, by adopting a general eligibility policy condition for insurance services which included all Australian nationals, but which excluded resident SCV holders who did not meet the conditions of "protected SCV holder" status, the Respondent treated Mr Faulkner less favourably than it would an Australian citizen because of a characteristic that generally appertains to non-citizens who are of New Zealand nationality.

81 This reasoning is problematic. While it might be accepted for the sake of argument that the ability to become an SCV holder is a characteristic that appertains generally to New Zealanders, given the nature and characteristics required for the issue of an SCV under the Migration Act, Mr Faulkner was not treated differently because he was an SCV holder. He was treated differently because he was not a "protected" SCV holder. All SCV holders who also had "protected" status under the Social Security Act were eligible for cover under the AERP Policy. To be able to rely upon s 7(2) in the present context, Mr Faulkner would have to make good the proposition that non-protected SCV holder status was a characteristic which applied generally to New Zealand citizens. While it is true by definition that all non-protected SCV holder are New Zealand citizens, it does not follow nor has it been established in this case that New Zealand citizens are all or even generally non-protected SCV holders. Accordingly, s 7(2) of the ADA does not provide any assistance to Mr Faulkner in the present case.

82 In summary, therefore, the Tribunal concludes that although Mr Faulkner was the subject of differential treatment this was not "on the ground of race [in the sense of nationality or citizenship]". Thus, he has failed to make out a case of direct discrimination under s 7(1)(a) of the ADA in respect of the AERP Policy.

Did ACE Indirectly Discriminate Against Mr Faulkner?

83 In order to succeed in his claim based on indirect discrimination under s 7(1)(c) Mr Faulkner is required to establish that:

(a)ACE imposed a requirement or condition;

(b)Mr Faulkner was unable to comply with the requirement or condition;

(c)A substantially higher proportion of persons not of Mr Faulkner's race (in the sense of nationality) comply or are able to comply with the requirement or condition;

(d)The requirement (or condition) was not reasonable having regard to the circumstances of the case.

84 It can be noted in passing that the words in the chapeau to s 7 "on the grounds of the aggrieved person's race or the race of a relative or associate of the aggrieved person" apply to s 7(1)(a) and (b) but not s 7(1)(c) for the reasons given by the Court of Appeal in Amery v State of New South Wales (Director-General NSW Department of Education and Training) [2004] NSWCA 404.

Requirement or Condition Imposed?

85 The High Court in New South Wales v Amery (2006) 230 CLR 174 at [63] held that the phrase, "requirement or condition" was to be given a broad rather than a technical meaning, given the nature of the mischief, indirect discrimination, with which the relevant section (corresponding to s 7(1)(c) in this case) was concerned.

86 Mr Faulkner identified the relevant requirement or condition imposed upon him by ACE as being, in effect, that he was required to meet the general eligibility condition for cover, namely that he be an Australian Resident as defined in the AERP Policy.

87 The Respondent's primary submission in this regard was that this condition was not the only condition imposed on Mr Faulkner. Holding a David Jones American Express Card was said to be "the essential pre-requisite to obtaining and maintaining the Policy". Mr Faulkner never held such a card. On this basis it was argued that he was not eligible to apply for and obtain an AERP Policy at all and thus the proceedings as they rely on indirect discrimination should be dismissed. Once again, we think this somewhat misstates the position. Mr Faulkner, as we have explained earlier, was seeking a bundle of services including both the David Jones American Express Card and the AERP Policy. He did not want the card without the policy. As the online application form made clear, having a pre-existing David Jones American Express card was not a necessary pre-requisite for applying for cover under the AERP Policy. Both could be applied for together, at one time. Cover under the policy, however, was subject to approval of the application for the card. Accordingly, we reject any submission that the requirement identified by Mr Faulkner was not a relevant "requirement or condition" for the purposes of s 7(1)(c) because Mr Faulkner was not even eligible to apply for cover under the AERP Policy in the first place, not being a pre-existing David Jones American Express Card holder.

88 We find that ACE by limiting cover under the AERP Policy to those falling with the definition of "Australian Resident" in the Policy, imposed a requirement or condition on Mr Faulkner in order for him to be able to obtain the cover he sought.

Could Mr Faulkner Comply with the Requirement or Condition?

89 Mr Faulkner fell into none of the categories of Australian Resident set out in the definition of that term in the AERP Policy. Accordingly, it was a condition with which Mr Faulkner did not and was not able to comply.

90 Thus, the first and second requirements in relation to indirect discrimination are established in respect of the AERP Policy.

Comparative Greater Ability to Comply?

91 The next requirement to be considered is whether a substantially higher proportion of persons not of Mr Faulkner's race (in the sense of nationality) comply or are able to comply with the requirement or condition.

92 Dawson J held in Australian Iron & Steel Pty Ltd v Banovic (1989) 168 CLR 165 at 187 concerning the provisions of s 24(3) of the ADA, which at that time relevantly corresponded with s 7(1)(c):

But a proportion must be a proportion of something, so that it is necessary to determine the appropriate grouping or pool within which to calculate the proportions which are to be compared. The English cases have discussed in detail the problems associated with the determination of an appropriate base group. Two main contrasting approaches can be identified. One seeks to narrow the base group to the particular group of persons to whom the requirement is directed, while the other seeks to establish a broader base beyond the immediate context. The need to select an appropriate base group, which may be limited to the immediate context, was recognized in Kidd v. D.R.G. (U.K.) Ltd. (1985) I.C.R. 405, at p 409, where Waite J., in delivering the decision of the Employment Appeal Tribunal, held that:

"... for the purposes of the statutory comparison, like must be compared with like in a context appropriate to the case under review. The consequence is that the particular section of the members of the public upon whose lives the impact of the relevant requirement or condition has to be measured is liable to vary from case to case - ranging from the population as a whole at one end of the scale to employees of a single work-place at the other: and there is liable also to be ample scope for debate in many instances as to which section of the public within that range is the right one to choose for a particular case."

As that passage indicates, the contextual approach will provide different answers depending upon the circumstances of each case. For example, where a requirement is contained in a published offer of employment, the relevant base group may be made up of those who might be expected to be eligible to take up the employment based upon geographical, educational and other restraints. Similarly, where a requirement is imposed upon existing employees, the relevant group may be the class of employees affected.

93 Further, in Commonwealth Bank of Australia v Human Rights and Equal Opportunity Commission (1997) 80 FCR 78 at 120 Sackville J identified a number of applicable principles for determining the base group or pool in a case of indirect discrimination. First, the base groups appropriate to particular cases will vary according to the context. Secondly, the selection of the base group should be calculated to reveal the significance, if any, of the relevant ground of discrimination (for example sex or race) to compliance and, thirdly, the decision to select a particular base group involves a mixed question of fact and law.

94 In the present case, it appears to us that in determining the base group of persons affected we should take into account that the requirement is effectively stated or contained in an offer that is made to persons in Australia interested in applying for a David Jones American Express card. This context indicates that the base group we should consider is persons in Australia who were likely to be interested in taking up the offer repayment protection insurance in relation to a David Jones American Express card.

95 The comparison we are then required to make is whether a substantially higher proportion of that base class who are not of Mr Faulkner's nationality, that is, non-New Zealand citizens, complied or were able to comply with the requirement compared to the proportion of New Zealand citizens in the base class who complied or were able to comply. This is not exactly as Mr Faulkner has formulated his case in his written submissions.

96 After citing a passage from Heerey J in Australian Medical Council v Wilson (1996) 68 FCR 46 at 63-4 (which we accept and take to be consistent with our approach set out above), Mr Faulkner submitted at paragraph 119 of his final written submissions that:

"the base pool affected by the requirement to be an 'Australian Resident' (as defined by the AERP Policy) encompasses all residents with permission to remain permanently in Australia. The subgroup within this base pool to which I belong is that consisting of resident non-citizens who are New Zealand citizens."

97 It appears to us that Mr Faulkner in formulating his submission in this way has not made his submission as clear as possible and it could be construed in a way which can be seen as confused or conflating a number of steps and issues in the process. Although it is not clear, we are prepared to accept that submission in so far as it is an attempt to state that the first step is to identify, having regard to the context in which the condition was imposed, the base class or pool of persons affected by the condition and the second is to determine and compare:

the proportion of the group within the base class of the same nationality as Mr Faulkner, and

the proportion of the group within the base class not of that nationality,

who did or were able to comply with the condition.

98 Given the difficulty with the expression of Mr Faulkner's submissions in this regard we can understand the problems noted by the Respondent in its written submission in reply in relation to these matters. Nonetheless, we think that ACE and its experienced senior counsel were sufficiently informed of the case Mr Faulkner was trying to express and were no doubt aware of what s 7 of the ADA required in a case such as the present to enable them to present their defence and appropriately guard their interests in these proceedings.

99 Accepting as common knowledge that the population of Australia in 2009 was about 21.8 million and noting that in the same year, according to the Department of Immigration and Citizenship's statistics there were 371,197 New Zealand citizens resident in Australia, the Tribunal concludes that approximately 1.7% of the Australian population was New Zealand citizens and approximately 98.3% were non-New Zealand citizens. Further, there is no material or reason that would cause us to believe that the composition of the Australian population generally is not reflected also in the composition of the base class we have identified above. Thus, we find that the base class of persons in Australia who would have been likely to have been interested in taking up the offer of repayment protection insurance in relation to a David Jones American Express card in 2009 was made up of approximately 1.7% of New Zealand citizens and approximately 98.3% of non-New Zealand citizens.

100 In order to make the comparison required by s 7(1)(c), Mr Faulkner relied upon information on the Department of Immigration and Citizenship website stating that "Some 95% of the population are Australian citizens." Although it purports to state the position in 2010 or 2011, we accept that it is likely to give a reliable general indication of what the situation was in 2009. On this basis, we find that the vast majority (approximately 96.3%) of the non-New Zealand citizens in the base class were Australian citizens. Of the remainder it is likely that a considerable proportion of those were residents of Australia holding permanent visas. By definition, these Australian citizens and holders of permanent visas complied with the Australian Resident requirement or condition found in the AERP Policy. Thus, the vast majority (over approximately 96%) of the non-New Zealander portion of the base class complied or were able to comply with the requirement.

101 This proportion is to be compared with the proportion of New Zealand citizens in the base class who also complied or were able to comply with the Australian Resident condition. New Zealand citizens would comply or be able to comply with the requirement if they were permanent visa holders, protected SCV holders or if they held dual Australian and New Zealand citizenship. Non-protected SCV holders, who were not dual citizens, would not comply or be able to comply.

102 The Population Flow statistical data in relation to New Zealanders in Australia published by the Department of Immigration and Citizenship were before the Tribunal. The Tribunal infers that this information does not include dual New Zealand and Australian citizens who are covered by data relating to Australian citizens in Australia. Nonetheless, the Population Flow statistics include data as to the number of New Zealand citizens resident in Australia, visiting Australia and migrating permanently to Australia for the years 2003 to 2009, the number of New Zealand citizens who were permanent or long term residents of Australia travelling to and from Australia in the period 2001 to 2009 and the number of permanent visas granted to New Zealand citizens each year from 2001 to 2009.

103 From this data it appears that very few, less than 1% of New Zealand citizens resident in Australia, were granted permanent visas each year between 2001 and 2009 and the total number of New Zealanders who in 2009 held a permanent visa granted after 2001 was less than 2% of all New Zealanders resident in Australia.

104 From the terms of s 7 of the Migration Act, it can be concluded that New Zealanders who were not Australian residents prior to 26 February 2001 or who entered Australia after 26 May 2001, the end of the three month transition period commencing 26 February 2001 under s 7(2C) of the Migration Act, would not be protected SCV holders. In addition, there will be some who, like Mr Faulkner, were Australian residents prior to 26 February 2001, were out of Australia on 26 February 2001 returned before 26 May 2001 but who did not apply for a certificate under s 7(2E) within the 3 years prescribed by s 7(2F). These will also be non-protected SCV holders.

105 In 2009, there were 371,197 New Zealand citizens resident in Australia. Between June 2001 and July 2009 (we infer that the descriptions "2001-02" and "2008-09" refer to financial years) there had been a net increase in the number New Zealand citizens who were permanent or long term residents in Australia of 176,319. Of those, it is highly likely that most if not all were non-protected SCV holders, given the small number of permanent visas, only 6,944, issued during that time and the terms of s 7(2) - (2F) of the Migration Act.

106 While it is impossible to reach any conclusion with mathematical precision from the data available, we find it is established on the balance of probabilities that the proportion of New Zealand citizens in the base class who complied or were able to comply with the condition was substantially less than 96%. If it were necessary to be more specific as to the proportion of New Zealand citizens in the base class who complied or were able to comply, and we do not believe that it is, we find that that proportion is probably in the order of between 53% and 70%. We would reach the figure of 53% as follows. There were 371,197 New Zealander permanent residents in Australia in 2009. If all of the 176,319 net permanent immigrants from New Zealand in the period 2001 to 2009 were non-protected SCV holders and all the other residents from New Zealand were protected SCV holders or permanent visa holders, the protected SCV holders and permanent visa holders, who by definition complied with the requirement, would amount to approximately 53% of the total New Zealand permanent residents: (371,197 - 176,319)/371,197 x 100).

107 The figure of 70% is derived from Mr Faulkner's submissions. Mr Faulkner calculated, attempting to make all reasonable assumptions against his position, that at least 29.77% of New Zealand citizens in Australia would be non-protected SCV holders. Accepting that the assumptions made by Mr Faulkner were likely to yield a figure that represented the highest reasonable estimate of the percentage of New Zealanders in the base class who could comply, we find that approximately 70% is the highest likely proportion of New Zealand citizens resident in Australia who complied or were able to comply with the requirement in 2009.

108 Having regard to our findings that the vast majority (over approximately 96%) of the non-New Zealander portion of the base class complied or were able to comply with the requirement but substantially less than this proportion of New Zealanders in the base class complied or were able to comply, the Tribunal concludes that the requirement or condition was indeed one with which a substantially higher proportion of persons not of Mr Faulkner's nationality complied or were able to comply.

109 Accordingly, we find that the third element of indirect discrimination has been established and it only remains for the Tribunal to consider whether or not the requirement or condition was a requirement which was not reasonable having regard to the circumstances of the case.

Was the Requirement Not Reasonable in the Circumstances

110 In the context of indirect discrimination, it has been held by the High Court that "reasonableness" is a question of fact "but it can only be determined by weighing all the relevant factors" - Waters v Public Transport Corporation (1991) 173 CLR 349 at 395 (per Dawson and Toohey JJ). In that same case, the High Court (at 395-6) endorsed the views of Bowen CJ and Gummow J in Secretary, Department of Foreign Affairs and Trade v Styles (1989) 23 FCR 251 at 263:

"the test of reasonableness is less demanding than one of necessity, but more demanding than a test of convenience. ... The criterion is an objective one, which requires the Court to weigh the nature and extent of the discriminatory effect, on the one hand, against the reasons advanced in favour of the requirement or condition on the other. All the circumstances of the case must be taken into account."

111 Brennan J in Waters stated the position in the following terms (173 CLR at 378):

['Reasonableness'] must be determined by reference to the activity ... in which the putative discriminator is engaged. Provided the purpose of the activity ... is not to discriminate on impermissible grounds, the reasonableness of a requirement or condition depends on whether it is reasonable to impose the requirement or condition in order to perform the activity .... There are two aspects to this criterion of reasonableness: first, whether the imposition of the condition is appropriate and adapted to the performance of the activity ... ; secondly, whether the activity could be performed .... without imposing a requirement or condition that is discriminatory ... or that is as discriminatory as the requirement or condition imposed. These are questions of fact and degree. Effectiveness, efficiency and convenience in performing the activity ... and the cost of not imposing the discriminatory requirement or condition or of substituting another requirement or condition are relevant factors in considering what is reasonable.

112 Accordingly, in determining the reasonableness of a condition the Tribunal must have regard to: the nature and extent of the discriminatory effect of the requirement, and consider this in the light of: the reasons for the requirement, including any commercial considerations; whether the requirement is appropriate and adapted to its purpose and has a logical and understandable basis; whether there is a less discriminatory option, which accommodates of the needs of the aggrieved person and the possibility of alternative action which would achieve the object of the condition and be less discriminatory; and, any other relevant circumstances. This statement is an adaptation of the principles endorsed by the Appeal Panel in Gardiner v WorkCover Authority of New South Wales [2004] NSWADTAP 1 at [27] in the light of the comments of the Panel especially at [36] to [41].

113 The effect of the imposition of the requirement was that Mr Faulkner, and those New Zealand citizens who were also non-protected SCV holders, were not able to obtain a David Jones American Express card together with the benefit of the protection offered by the AERP Policy. They were denied this benefit which was made available to others. Whilst the cover under the AERP Policy was essentially limited to the amount owing on the policy holder's David Jones American Express card account, as the online application form stated, the policy could be said to provide "peace of mind and additional financial security for [the holder] when [the holder] need[s] it most." The other considerations must be weighed or addressed in the light of this.

114 As noted above, a rationale for the requirement in the AERP Policy appears to be disclosed in Ms Ponsonby's email to Mr Faulkner of 18 September 2009 where it is stated that:

Of note, however, the Involuntary Employment benefit under the policy requires claimants to register with Centrelink, and it is our understanding that, in order for New Zealanders to do so, they must be Protected SCV Holders.

115 The reasonableness of the requirement was further developed in the affidavit evidence of Mr Nisbet and in written submissions. In effect, the argument was that because of the risk of fraudulent claims, it was appropriate for ACE to require documentation from a reliable and well recognised body in Australia, such as Centrelink, in order to substantiate a claim. The implicit assumption was that non-protected SCV holders could not obtain such documentary substantiation from Centrelink. Such an argument was said to be of primary importance in relation to involuntary unemployment claims under the AERP Policy.

116 ACE also contended that the risk of identity theft or fraud created a need to protect ACE's position by limiting the persons covered by the AERP Policy to those who fell within the definition of "Australian Resident". Mr Nisbet in his affidavit evidence also identified other factors that ACE would have assessed in determining the basis upon which it was prepared to underwrite the AERP Policy. In addition to the need to protect itself against the risk of fraudulent claims, attention was drawn to standard practices in pricing policies, adherence to Australian law and regulations governing ACE's general insurance licence and "the eligibility criteria to mitigate anti-selection". The first two factors do not, however, support the inclusion of the requirement. The Tribunal accepts that pricing will reflect, among other things, the risks involved in providing the cover. It was not, however, established that changing the requirement in this case would have any effect on pricing. Similarly, it was not established that the requirement in question was mandated by, or a reasonable response to, any specific Australian law and regulations governing ACE's general insurance licence. The last of these factors was not elaborated upon in evidence or submissions. Accordingly, the Tribunal does not accept that these three factors had any substantial bearing upon whether the requirement in the AERP Policy was or was not reasonable in the circumstances of the case.

117 As to the risk issue, it appears from Mr Faulkner's evidence, and it was not disputed by ACE at the hearing, that ACE's previous understanding that only protected SCV holders could register with Centrelink was not correct. While a New Zealander was required to be a protected SCV holder in order to be eligible for unemployment benefits in Australia, non-Protected SCV holders could register with Centrelink and thereby obtain certification of their unemployed status even though they would not be eligible for unemployment benefits. In cross-examination, Mr Nisbet agreed that, although he was not fully aware of the details, it was now his understanding that it was possible to register with Centrelink even if one was not entitled to unemployment benefits. He also accepted that such registration would be sufficient for ACE's purposes and it would not be relevant for ACE whether or not the policy holder was receiving or had received unemployment benefits. If ACE's concern was to have certification from Centrelink of unemployed status, this could be obtained by both protected and non-protected SCV holders. Moreover, in cross examination, Mr Nisbet also accepted that as far as identity theft was concerned, a non-protected SCV holder involved no greater risk for ACE than a protected SCV holder or other Australian resident. Indeed, it was because of these matters that Mr Nisbet decided to remove the definition of "Australian Resident" from the latest version of the AERP Policy.

118 In the light of this evidence, it appears to the Tribunal that a major reason why the requirement was initially imposed was based on a misunderstanding of who could be registered with Centrelink. Given the fact that non-protected SCV holders can be registered with Centrelink and there is no greater risk of identity fraud with non-protected SCV holders compared to other Australian residents, it cannot be concluded that the requirement is appropriate and adapted to its purpose or that it has a logical basis. There is a less discriminatory option, which accommodates of the needs of Mr Faulkner and other non-protected SCV holders and which would be satisfactory from ACE's perspective. The Tribunal is able to draw this last conclusion as ACE has from mid-January removed the definition of "Australian Resident" which excluded non-protected SCV holders from cover under the AERP Policy. Mr Nisbet's evidence was to the effect that this had been done with the underwriting intention of making cover under the AERP Policy available to non-protected as well as protected SCV holders.

119 Neither party has submitted that there are any other relevant circumstances which ought to be considered by the Tribunal in relation to the question of whether the imposition of the requirement as it was formulated in 2009 was not reasonable. Having considered the circumstances relating to ACE's refusal to supply insurance services under the AERP Policy to Mr Faulkner, its reasons for so doing and the evidence relating to the imposition of the requirement that in order to obtain cover under the AERP Policy an applicant had to fall within the definition of "Australian Resident" in the policy, the Tribunal does not consider that any of those matters would provide a basis for finding that the requirement was reasonable in the circumstances of the case.

120 Accordingly, the Tribunal concludes that the requirement was not reasonable having regard to the circumstances of the case for the purposes of s 7(1)(c) of the ADA.

AERP Policy - Indirect Discrimination Established

121 For the reasons and in view of the findings set out above, the Tribunal concludes that by refusing to supply insurance services under the AERP Policy to Mr Faulkner in August and September 2009, ACE engaged in discrimination on the ground of race, in the sense of nationality or citizenship, which was unlawful under s 19(a) of the ADA by operation of s 7(1)(c) of that Act.

122 Consequently, under s 108(1)(b) of the ADA the Tribunal finds the complaint substantiated in relation to the AERP Policy.

IS Policy - May-June and August 2010

123 When he initially complained to ACE concerning the AERP Policy in August and September 2009, Mr Faulkner was not aware that ACE was also offering other policies with cover limited to "Australian Residents" which was defined in the same or substantially the same terms as were found in the AERP Policy in 2009. In February 2010, a fellow New Zealand citizen, Mr James Cameron, informed Mr Faulkner that he had come across a number of other policies which also excluded non-protected SCV holders from cover. One such policy identified by Mr Cameron was the IS Policy.

124 In April and May 2010, Mr Faulkner arranged travel for his wife and himself to New Zealand. In late May, early June and August 2010, Mr Faulkner says that he "started to apply for international travel insurance with ACE". He did so by searching, using the Google internet search engine, for terms such as "ace travel insurance" and "ina-suitcase travel insurance". Mr Faulkner did not search generally for "travel insurance" and agreed in cross examination that he went looking for travel insurance cover under the IS Policy. He also agreed that he went looking for that policy because it contained the restriction to protected SCV holders. During the relevant period, Section 12 of the IS Policy contained a provision in the following terms: "You must be an Australian Resident to be covered by this Policy". The Glossary in Section 17 defined "Australian Resident" as meaning:

A person who resides in Australia and has permission to remain permanently in Australia either because they are:

(a) an Australian citizen; or

(b) the holder of a permanent visa; or

(c) a protected special category visa holder.

This is the same definition as is found in the AERP Policy dealt with above.

125 Mr Faulkner never submitted an application for cover under the IS Policy. One reason for this was that as part of the online application process Mr Faulkner was required to tick a box to confirm that he acknowledged, among other things, that he had read the Product Disclosure Statement and Policy Wording and agreed to accept the insurance subject to the terms etc of that policy and that "we [referring to those to be covered under the policy] are all Australian residents".

126 Mr Faulkner, having conceded that he looked for the IS Policy because it was restricted to Australian Residents (as defined), it was put to him that he was never serious about obtaining travel insurance under the IS Policy or from ACE and that he was only seeking another basis of complaint. He denied these suggestions and said that he was in the market for travel insurance and would have considered any offer. His evidence was to the effect that if the IS Policy was on offer and if it was better than the other policies available he would have taken it out. This was notwithstanding that he had a negative view about ACE in May 2010, when he was in the middle of his complaint against ACE relating to the AERP Policy.

127 There was no evidence, however, to indicate whether cover under the IS Policy was cheaper or otherwise more attractive than any other travel insurance available to Mr Faulkner. Mr Faulkner did not lead any evidence as to whether he ever took out any travel insurance in respect of his trip with his wife to New Zealand and, if so, which insurer provided the insurance and on what terms. Indeed, there was no direct evidence from Mr Faulkner that he decided the IS Policy was best for him or that he actually wanted to obtain cover under the IS Policy but could not because of the restriction of cover to Australian Residents.

128 In these circumstances, we are not satisfied that Mr Faulkner ever actually wanted to obtain travel insurance cover from ACE under the IS Policy.

The IS Policy - Racial Discrimination?

129 Mr Faulkner alleges that in these circumstances ACE unlawfully discriminated against him on the ground of race in relation to the provision of services under the IS Policy within both s 19(a) and s 19(b) of the ADA. In so doing, he alleges that ACE has engaged in both direct discrimination under s 7(1)(a) of the ADA and indirect discrimination under s 7(1)(c).

130 In order to establish unlawful discrimination under s 19 of the ADA, in the present circumstances, it must be established that:

(a)ACE was a person who provided services, within the meaning of the Act;

(b)ACE refused to provide Mr Faulkner with those services (subs 19(a)) or provided the services on certain terms (subs 19(b)); and

(c)In so doing, ACE discriminated against Mr Faulkner on the ground of race (within s 7 of the ADA).

131 For the reasons given above in relation to the AERP Policy, we find that ACE was a person who provided services within the meaning of s 19.

132 A problem arises, however, when considering whether ACE refused to provide Mr Faulkner with the relevant insurance services. If there is no request for services to be provided, it is difficult to find that there has been a refusal to supply if the person said to have been refused supply does not actually wish to receive the services. In the decision in Cobaw Community Health Services v Christian Youth Camps Ltd [2010] VCAT 1613 which has already been referred to in these reasons, the Victorian Civil and Administrative Tribunal at [148] commented that it was inappropriate to take a narrow, legalistic and technical approach to the concept of refusing to provide services in sections such as s 19(a) of the ADA but then went on to hold at [149]:

149 There is nothing in the EO Act itself which provides support for such a narrow interpretation. What is required is, for the purposes of s 42(1), where an applicant wishes to be provided with services offered by the respondents, that the respondents convey to them that their application has been, or will be, refused. ... How an applicant will communicate their wish to be provided with services, or to apply for accommodation will be a question of fact in each case. Similarly, the way a respondent communicates a refusal to provide services, or a refusal or failure to accept an application for accommodation, will be a question of fact in a particular case. That will vary from case to case. (Underlining added)

133 In the decision in Grogan v First Rate Leisure Pty Ltd [2007] NSWADT 294, a similar point is made at [27]:

The refusal of admission to one of the members of the group who wished together to enjoy a night out at the SJ nightclub in circumstances where that refusal related to the Aboriginality of Mr Wheldon was a constructive refusal of entry to each of the members of that group ...

134 These comments indicate that in order for there to be a refusal, actual or constructive, to provide services, there must at least be a wish, desire or request on the part of the aggrieved person to be provided with those services and it may also be required that, by some means, this wish etc must be communicated to the service provider. In relation to the AERP Policy, Mr Faulkner gave evidence that he did actually wish to obtain cover under that policy and that he went so far as to contact ACE and ask them to change the policy wording to enable him to obtain the cover. In those circumstances, there was a real basis upon which to conclude that Mr Faulkner wished to be provided with those services and ACE refused. In relation to the IS Policy, however, it appears that Mr Faulkner only searched for the IS Policy because he had been told that it contained a restriction on eligibility to Australian Residents, excluding non-protected SCV holders. In the circumstances of this case including that he did not submit an application and did not contact ACE with a view to obtaining cover under the IS Policy and, moreover, in the absence of evidence from Mr Faulkner that he actually wished to obtain cover under the IS Policy, the Tribunal is not persuaded that ACE refused to supply insurances services under the IS Policy to Mr Faulkner.

135 As a result, no unlawful discrimination based upon s 19(a) of the ADA by ACE in respect of Mr Faulkner and the IS Policy has been established.

136 As Mr Faulkner never applied for nor was ever provided with insurance services under the IS Policy on any terms, the Tribunal also concludes that ACE did not discriminate against Mr Faulkner on the terms on which he was provided with those services within s 19(b) of the ADA.

137 Accordingly, the Tribunal would dismiss that part of the complaint relating to the IS Policy under s 108(1)(a) of the ADA.

IS Policy - Further Consideration

138 However, in case it should be determined that we are wrong in our decision that ACE did not refuse to supply insurance services under the IS Policy to Mr Faulkner, the Tribunal will consider whether such a refusal, if it were found to have taken place, would have constituted unlawful discrimination under s 19(a) and s 7(1)(c) of the ADA.

139 If we were wrong on the refusal issue, we would apply substantially the same reasoning as appears above in relation to the AERP Policy, to conclude that ACE did indirectly discriminate against Mr Faulkner on the ground of race, in the sense of nationality, by refusing to supply insurance services under the IS Policy in the circumstances. If this is the case, we would accordingly find that ACE engaged in unlawful discrimination under s 19(a).

140 The only additional comment we would wish to make is in relation to the suggestion in Mr Nisbet's evidence that the imposition of the requirement or condition of being an Australian Resident (as defined) in the IS Policy was appropriate and reasonable because there was a risk with non-protected SCV holders of repatriation by a sick or injured policy holder to a country other than Australia. In cross examination, Mr Nisbet conceded that in relation to the IS Policy there was no real reason for a distinction to be drawn between protected and non-protected SCV holders in this regard. Indeed, it was because there was no real risk difference in those two categories of SCV holders that Mr Nisbet recently agreed to removal of the definition of "Australian Resident" from the latest version of the IS Policy. As a result, the Tribunal concludes that the risk of repatriation to another country in relation to non-protected SCV holders is not a basis upon which to find that the imposition of the requirement or condition in question was reasonable.

The AECP Policy - June-July 2010

141 During the investigation of his initial complaint to the President of the Anti-Discrimination Board, Mr Faulkner became aware that ACE offered a similar policy to the AERP Policy known as the "American Express Credit Protector" product, the AECP Policy. His understanding was that the AERP Policy applied to amounts owing on a David Jones American Express card account whereas the AECP Policy covered "all Australian-issued American Express cards". In about early June 2010, Mr Faulkner received a copy of ACE's Response to his Complaint in its letter of 20 May 2010 to the President of the Anti-Discrimination Board. This letter noted that ACE was in the process of redrafting its definition of "Australian Resident", "in order to clarify the position". The revised wording was set out in the letter. After receiving this letter, Mr Faulkner searched on the internet for the revised form of the definition and discovered that the AECP Policy prepared on 5 March 2010 contained the redrafted definition of "Australian Resident" in the following terms:

A person who resides in Australia and has permission to remain permanently in Australia either because they are:

(a) an Australian citizen; or

(b) the holder of a permanent visa; or

(c) a New Zealand citizen or such other person who, if unemployed, would be eligible to register for Australian government unemployment benefits, such as a protected SCV holder (as that term is defined in section 7 of the Social Security Act (Cth)).

142 Previous to 5 March 2010, the wording of the definition of "Australian Resident" in the AECP Policy had been the same as in the AERP Policy.

143 Mr Faulkner says that he understood this redrafted definition also excluded him from cover under the AECP Policy. Notwithstanding this understanding, Mr Faulkner says that he searched for, and found, an online application form for cover under the AECP Policy.

144 In Step 2 in the online application form it was stated that the cover was "Subject to the terms, conditions and exclusions contained in the American Express Credit Protector Product Disclosure Statement". As a result of his understanding of the limitation on cover to Australian Residents as defined in the AECP Policy, he believed it was futile to lodge the application form and he did not do so.

145 Contrary to Mr Faulkner's understanding of the meaning of the redrafted definition, ACE maintained that the redrafting, while only a clarification of the previous position, would mean that, as New Zealand citizen, Mr Faulkner would now fall within the definition of "Australian Resident". The issue between them was whether the clause commencing "who, if unemployed ..." qualified both the words "citizen" and "person" or only "person". Mr Faulkner was of the former view, ACE the latter.

146 It should also be noted here that at the hearing it was not in dispute that there are three types of American Express branded cards available in Australia:

Global Network Services (or GNS) cards;

Affinity cards; and

direct American Express cards.

147 GNS cards are issued by business partners of American Express, such as banks, and the issuer has the contractual relationship with the card holder and owns the receivables in respect of the relevant account. In respect of GNS cards, American Express has no relationship with the card holder. Affinity card holders are customers of American Express who have been acquired as customers by American Express through an "affinity group", for example David Jones. Affinity cards are issued and owned by American Express and American Express owns the receivables in respect of the card holders' relevant accounts. Holders of direct American Express cards are customers of American Express which owns the receivables in respect of those holders' accounts.

148 ACE, as a result of its business relationship with American Express, offered a number of insurance products such as the AERP and AECP Policies to holders of affinity and direct American Express cards but not to holders of GNS American Express cards.

149 It was also not in dispute that as at June-July 2010, Mr Faulkner did not hold an affinity or direct American Express card but only held one or two GNS American Express cards.

AECP Policy - Racial Discrimination?

150 In these circumstances, Mr Faulkner claimed that ACE had discriminated against him on the ground of race, in the sense of nationality, in relation to the provision of services under the AECP Policy within both s 19(a) and s 19(b) of the ADA. In so doing, he alleges that ACE has engaged in both direct discrimination under s 7(1)(a) of the ADA and indirect discrimination under s 7(1)(c).

151 Once again, we note that in order to establish unlawful discrimination under s 19 of the ADA in relation to the AECP Policy, it must be established that:

(a)ACE was a person who provided services, within the meaning of the Act;

(b)ACE refused to provide Mr Faulkner with those services (subs 19(a)) or provided the services on certain terms (subs 19(b)); and

(c)In so doing, ACE discriminated against Mr Faulkner on the ground of race (within s 7 of the ADA).

152 For the reasons given above in relation to the AERP Policy, we find that ACE was a person who provided services within the meaning of s 19.

153 As with the IS Policy, a problem arises as to whether ACE refused to provide Mr Faulkner with insurance services under the AECP Policy. From Mr Faulkner's account of searching for and discovering the AECP Policy it does not appear that he actually wished to obtain cover under that policy. Rather, at least initially, he was seeking to find whether the new definition of "Australian Resident" had been included in the AERP Policy or any other policies. Mr Faulkner did not give evidence that he would actually have taken out the ACEP Policy if he had been offered such cover. Further, Mr Faulkner did not proceed with an application. Consequently, ACE had no opportunity to accept or reject the application. There was no other communication to ACE by Mr Faulkner of his wish to obtain cover under the AECP Policy. For the reasons given above in relation to the IS Policy, we find that in these circumstances ACE did not refuse to supply services under the AECP Policy to Mr Faulkner.

154 In addition to those matters which are largely the same as those considered in relation to the IS Policy, additional circumstances must be taken into account in the case of the AECP Policy. First, Mr Faulkner did not, at the time he claims ACE refused to supply him with insurance services under the AECP Policy, hold an American Express card in relation to which the AECP Policy could operate. In June-July 2010 Mr Faulkner only held one or two GNS American Express cards in relation to which the AECP Policy did not operate. Thus, he was not eligible for cover under the AECP Policy at that time on that basis. Further, Mr Faulkner's evidence was inconsistent with the proposition that he was seeking both an American Express card and cover under the AECP Policy at the same time, as occurred in relation to the AERP Policy.

155 Secondly, if Mr Faulkner had communicated a wish to obtain cover under the AECP Policy and if Mr Faulkner had held a direct American Express card as at June-July 2010, ACE would not have refused to supply insurance services under the AECP Policy. This was because of ACE's understanding of the meaning of the redrafted definition. As a New Zealand citizen, Mr Faulkner would have been eligible. Mr Nisbet said in his affidavit evidence:

"30 The Applicant [Mr Faulkner] claims in his amended complaint to have considered applying for the [AECP] policy in June or July 2010. ... The Respondent's [ACE's] underwriting intention behind the use of that definition [the redrafted definition] was to include within the categories of persons eligible for the [AECP] policy, New Zealand Citizens who reside in Australia and hold an Australian AMEX credit card accounts [sic].

31 If the Applicant had held an AMEX credit card account and had actually applied for the [AECP] policy in June/July 2010, I understand that his application would have been accepted by AMEX."

156 Although it is unclear why Mr Nisbet refers to "AMEX" rather than ACE in the last line, the Tribunal accepts that Mr Faulkner would not have been refused cover if he had applied and held the relevant type of card.

157 For all of these reasons, the Tribunal finds that ACE did not refuse to supply insurance services under the AECP Policy to Mr Faulkner in June-July 2010.

158 As a result, no unlawful discrimination based upon s 19(a) of the ADA by ACE in respect of Mr Faulkner and the AECP Policy has been established.

159 As Mr Faulkner never applied for nor was ever provided with insurance services in relation to the AECP Policy on any terms, the Tribunal also concludes that ACE did not discriminate against Mr Faulkner on the terms on which he was provided with those services within s 19(b) of the ADA.

160 Accordingly, the Tribunal would dismiss that part of the complaint relating to the AECP Policy under s 108(1)(a) of the ADA.

Relief

161 The Tribunal having found that Mr Faulkner's complaint against ACE in respect of the AERP Policy has been substantiated, we now turn to the question of relief.

162 In this context, it should be noted that between 22 December 2010 and 18 January 2011, ACE has removed the definition of "Australian Resident" from each of the AERP, IS and AECP Policies. As a result, the definition which provided the basis for the Tribunal's finding that ACE discriminated against Mr Faulkner on the ground of race has been eliminated from each policy the subject of the complaint. Some evidence was given by Mr Nisbet as to the processes involved in effecting such a change but there was very little if any evidence given of the time it did or should take to implement those changes.

163 To summarise Mr Faulkner's position as set out in his document headed "Orders sought concerning the claims of direct/indirect race discrimination in the provision of American Express Repayment Protection (AERP) insurance services" (the Orders Sought) dated 15 December 2010, he is seeking in effect:

(a)An injunction to restrain ACE from limiting cover under the policy to New Zealanders resident in Australia who hold a permanent visa or are protected SCV holders;

(b)An order requiring publication of notices in the Daily Telegraph and the Sydney Morning Herald including an acknowledgement by ACE of its breach of the ADA and the remedial steps taken;

(c)A personal apology to Mr Faulkner;

(d)Any other appropriate orders.

164 As to the proposed injunctive relief which could be granted under s 108(2)(b), it is significant that ACE has already remedied the problem with the definition of "Australian Resident" in the AERP Policy, as well as others. In the light of this and of the Tribunal's decision in this matter, it does not appear to us likely that ACE will continue to engage in, or repeat, conduct such as was found to give rise to unlawful racial discrimination in this matter. Moreover, it does not appear to us that ACE's conduct was malicious or motivated by ill will towards Mr Faulkner personally. At worst it appears to have been largely the result of a misunderstanding of what was required in order to be able to obtain certification from Centrelink of the fact that a claimant was unemployed and seeking reemployment. Although ACE seems to have taken a long time to address the problem effectively, we have no basis for concluding that there was in fact any inexcusable delay on ACE's part in so doing. Having regard to these matters and the other circumstances of the case, we do not propose to grant any order in the nature of injunctive relief under s 108(2)(b).

165 As to the proposed order for the publication of notices in various newspapers, it does not appear to us that such an order is permitted by any of the provisions of s 108(2) of the ADA. The content of the proposed notice, set out in the Orders Sought, does not fit within the description of "an apology or retraction (or both)" in s 108(2)(d). Publication of the proposed notice would also not constitute "conduct to redress any loss or damage suffered by the complainant" in s 108(2)(c). None of the other provisions of s 108(2) are relevant. Consequently, we decline to make the order in the terms sought for the publication of notices. Mr Faulkner has not specifically asked for an order for the publication of an apology.

166 Mr Faulkner did, however, seek an order that ACE provide a personal apology to him in writing but it was subject to a condition, namely: "should the respondent wish to offer such an apology". In response, ACE submitted "the respondent does not consider that in all the circumstances, it is appropriate to offer an apology to the applicant as he never actually applied and so was never actually refused any insurance services." Mr Faulkner responded in his further submissions: "The respondent has indicated that it does not wish to offer me an apology. As I do not wish to receive an ingenuous apology I leave this decision up to the respondent." In the circumstances, we conclude that this is a matter for the parties and the Tribunal will not make any order in that regard.

167 For these reasons and having regard to all the circumstances of the case, the Tribunal is of the view that, apart from dismissing the complaint in relation to the IS Policy and the AECP Policy and finding that the complaint in relation to the AERP Policy has been substantiated, it should decline to take any further action in the matter.

Later Communication from ACE

168 Since preparing the reasons set out above, the Tribunal has received a letter dated 14 February 2011 from Radford Lawyers who act for ACE. From that letter we understand that it has also been sent to Mr Faulkner.

169 In that letter it is indicated that, contrary to what was submitted in paragraphs 121 to 123 of ACE's written submissions, the uploading of the updated forms of the relevant policies will not take place until some unspecified time in March 2011. As noted above, we are concerned as to the length of time it is taking to effect the changes which we have found are necessary and appropriate. The Tribunal is also anxious to ensure that Mr Faulkner has the opportunity to seek additional or alternative relief as a consequence of the material now before us.

170 Accordingly, as a result of the later communication from ACE's solicitors, the Tribunal considers it appropriate to make directions as follows:

The respondent to file and serve within 7 days of the date of these orders an affidavit from a senior executive of the respondent giving a full explanation of why the updated policy wording for the American Express Repayment Plan Policy cannot be uploaded onto the internet prior to some time in March 2011.

If the Applicant wishes to apply for any further orders, in the light of the affidavit to be filed by the Respondent or otherwise, such application is to be made by filing and serving a notice of application within 7 days of the filing of the affidavit referred to in the preceding direction.

Orders

171 Thus, the Tribunal:

1)Finds that the complaint in so far as it relates to ACE Insurance Ltd's refusal to supply insurance services under the American Express Repayment Protection Policy to Mr Faulkner in August-September 2009 is substantiated.

2)Dismisses those parts of the complaint that relate to the Ina-suitcase Policy and the American Express Credit Protection Policy.

3)Directs:

(a) The respondent to file and serve within 7 days of the date of these orders an affidavit from a senior executive of the respondent giving a full explanation of why the updated policy wording for the American Express Repayment Plan Policy cannot be uploaded onto the internet prior to some time in March 2011.

(b) If the applicant wishes to apply for any further orders, in the light of the affidavit to be filed by the respondent or otherwise, such application is to be made by filing and serving a notice of application together with written submissions within 7 days of the filing of the affidavit referred to in the preceding direction.

(c) The respondent to file any written submissions in reply within 7 days of the filing of the notice of application referred to in the preceding direction.

(d) Any application made by the applicant under direction (b) will be dealt with on the papers.

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Amendments

29 March 2011 - The word "Migration" wherever appearing in paragraphs 104 and 105 of the Tribunal's reasons for decision be deleted and the words "Social Security" be inserted in its place
Amended paragraphs: Paragraph 104 and 105

Decision last updated: 28 February 2011