Birch Lang & Co Pty Ltd v Burston

NCAT Appeal Panel|2020-06-25

Solicitors: Cordato Partners (Respondent) File Number(s): AP 20/16622; AP 20/16626 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 13 March 2020 Before: J Ringrose, General Member File Number(s): COM 19/56227, COM 19/53190

REASONS FOR DECISION

Birch Lang & Co Pty Ltd appeals against the decision made in the Consumer and Commercial Division of the Tribunal on 13 March 2020 to order that it pay the respondent Jo-Ellen Burston the amounts of $3,145 in proceedings COM 19/56227 and $14,755 in proceedings COM 19/53190, and costs in the proceedings assessed in the amount of $4,000.
The dispute between the parties related to the management by the appellant company between 1 November 2017 to 8 October 2019 of two rental properties owned by Ms Burston, Nos 51 and 59 xxx Street Millers Point (referred to in these reasons as "51" and "59"). Ms Burston had sought compensation for reimbursement of unauthorised or unsubstantiated costs and expenditures, administrative costs, late payment of rent, and reimbursement of 100% of the management fees she had paid the appellant to compensate for mismanagement, poor communication and administrative costs. In COM 19/56227, relating to 59, the amount sought was $16,280.96. In COM 19/53190, relating to 51, the amount sought was $36,227.37.

Appeal

These internal appeals may be made as of right on a question of law, and otherwise with the leave of the Appeal Panel: s 80(2) of the Civil and Administrative Tribunal Act 2013 (the NCAT Act).
The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Schedule 4 of the NCAT Act. The Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that: (a) The decision of the Tribunal under appeal was not fair and equitable; or (b) The decision of the Tribunal under appeal was against the weight of evidence; or (c) Significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
Even if the appellant has satisfied the requirements of cl 12(1) of Schedule 4, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b).
In Collins v Urban [2014] NSWCATAP 17, the Appeal Panel stated at [84] that ordinarily it is appropriate to grant leave to appeal only in matters that involve: 1. matters of principle; 2. questions of public importance or matters of administration or policy which might have general application; or 3. an injustice which is reasonably clear, in the sense of going beyond what is arguable, or an error that is plain and readily apparent and not merely peripheral, so that it would be unjust to allow the finding to stand; 4. a factual error that was unreasonably arrived at and clearly mistaken; or 5. the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed.
The Owner had initially raised as an issue whether an extension of time to lodge the appeals was required. The appeals were lodged on 9 April 2020, within the time prescribed under rule 25(4)(c) of the Civil and Administrative Tribunal Rules 2014, and no extension of time was required.

Grounds of Appeal

The Grounds of Appeal as stated in the Notice of Appeal for each appeal contended that the Tribunal erred in the following ways: 1. There were no written or detailed reasons or calculations for the decision and the amount awarded or calculations; 2. The Owner was allowed legal representation in proceeding COM 19/53190 even though the Agent did not agree, and as a consequence there was a lot of legal jargon which the principal of the Agent, Ms Karen McLeod, did not understand, which was procedurally unfair; 3. Two folders of documents provided at the first hearing on 17 February 2020 were not before the Tribunal Member on 13 March 2020, and, because the Member did not have the paperwork, he unfairly ordered payment of a number of utility bills and wifi, the reduction of commission for 51 from 13% to 5.5%, and payment of half the cost of an invoice to repair a burst sewer line for 59.
The Agent sought to have the orders set aside, including the order for costs.
At the hearing of the appeal, when the Agent was legally represented, the grounds of appeal were stated to be failure to accord procedural fairness, and failure to give reasons. Both grounds would raise a question of law, for which leave to appeal would not be required: Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69.
The Agent challenged the decision in both proceedings to order it to reimburse the Owner for expenses stated to have been incurred that were not substantiated by receipts, and, in relation to 51, to order reimbursement of $2,976.76 being one week's rental income and $1,681.61 found to have been reimbursed to a tenant without authorisation or consent. The Agent did not maintain its challenge to the decision to reduce the management fees relating to 51 from 13% to 5.5% for those periods when that property was let for short term rentals.

Documents on the appeal

The Agent provided the following documents: 1. Filed with the Notice of Appeal in each appeal, a statement, including extracts from emails, copies of Owner's Statements for each of the properties, screen shots and copies of invoices, and for AP 20/16626 (59) photographs with handwritten annotations; 2. Filed on 20 April 2020, a separate folder for each property containing documents in support of the application for a stay and the appeal. Those documents included a statement by Ms Karen McLeod, director and secretary of the Agent, dated 17 April 2020. Annexed to those statements were copies of Owner's Statements, invoices and email correspondence; 3. Filed on 16 June 2020: 1. "KM 1" and "KM 2", spiral bound documents which Ms McLeod stated at the appeal hearing were the documents provided by Ms Burston to the Tribunal; 2. "KM 3" in a green folder, documents relating to 51, including a statement by Ms McLeod dated 27 May 2020; 3. "KM 4" in a blue folder, documents relating to 59, including a statement by Ms McLeod dated 27 May 2020; 4. "KM 5" and "KM 6", copies of spreadsheets for each property, which Ms McLeod stated at the appeal hearing had been given to her by the Owner at the Tribunal hearing on 13 March 2020.
The Owner filed on 23 June 2020 a copy of a transcript of the Tribunal hearing and reasons. The Owner sought to rely on an affidavit sworn by Ms Burston on 24 June 2020, with annexures.

The decision under appeal

The applications COM 19/53190 and COM 19/56227 were lodged with the Tribunal on 26 November 2019 and 16 December 2019 respectively, using the Consumer and Commercial Division application form for a Commercial List application, specifying that each was made for review of agent commissions and fees under the Property Stock and Business Agents Act 2002 (renamed from 23 March 2020 as the Property and Stock Agents Act). The orders sought were in fact orders for compensation or reimbursement to the Owner of unauthorised or substantiated costs and expenditures, outstanding rent, and reimbursement of management fees paid to the Agent for management of each of the properties.
The following summary of the hearing and the reasons is derived from the transcript provided to the Appeal Panel by the Owner, which the Agent agreed was accurate.
Both applications COM 19/53190 and COM 19/56227 were heard by the Tribunal together on 13 March 2020. Ms McLeod represented the Agent, and the Owner was represented by counsel.
The Tribunal Member noted at the beginning of the hearing that no documents had been provided to the Tribunal by the Agent. The Agent referred to a previous hearing date. The Owner's representative stated that he had been served with some material from the Agent on 14 February 2020 which may not have found its way on to the Tribunal files. The Owner's representative provided a copy of the documents he stated had been served by the Agent, and after checking by the Agent, two bundles (one for 51 and the other for 59) were handed to the Tribunal Member (T p 4).
The Owner's representative then explained that the coloured-coded schedule for each property filed on behalf of the Owner indicated the amounts pressed and the amounts not pressed, which totalled for 59 a little over $12,000, and for 51 a little over $34,000 (T p 5). The Owner's representative explained that the heads of damage were for management fees, where more than 5.5% was charged; expenses paid from monies held in trust for which no receipt was provided in support; and the rent received, which was not pressed as the Owner did not have copies of the leases to establish how much rent was being collected (T p 5). The only aspect of a rental claim pressed was in relation to a $1,700 bond.
After a short adjournment for the Tribunal Member to read the documents provided to him, the documents provided by the Owner's representative were returned and replaced by documents with numbered pages (T p 9). The Tribunal Member and the Owner's representative discussed the basis of the Owner's claims, which her representative stated to be the obligation on the Agent to account for all monies disbursed, and the approach to valuation of items in the properties (T 10-12). The Tribunal then heard submissions on the documents relating to 51 (T p 10- 77), hearing from the Owner's representative and Ms McLeod on each item. The items claimed in relation to 59 were then addressed in the same fashion (T p 77-96). The Owner's representative stated (T p 95) at the conclusion of the material that he was instructed not to cross examine. Ms McLeod declined an opportunity to make submissions (T p 96).
The Tribunal Member then summarised the background to each of the applications, and, dealing separately with the claim for 51 and then 59, stated his conclusions on each item claimed by the Owner, summarising the amount claimed for each item in the schedules provided on behalf of the Owner and the evidence in support (T 97-103). The Tribunal made the formal order in each matter, at T 101 and T 103. The Tribunal then heard the Owner's application for costs and the Agent's submission in response, and stated his conclusion both as to the basis for a costs order and for the order for the amount of $4,000 (T p 106).

The appeal hearing

At the hearing of the appeal it was apparent that there was disagreement between the parties as to what documents were before the Member at the hearing on 13 March 2020.
In her statement dated 27 May 2020 Ms McLeod stated that two bundles of documents filed by her in the appeal (KM 3 and KM 4) were documents she had filed with the Tribunal before the hearing which had been originally listed on 17 February 2020. On that date she and Ms Burston were informed that the Member allocated to hear the matter was unwell, and the proceedings would be stood over for hearing on 13 March 2020. She stated that she had handed those bundles to Ms Burston, and received two bundles of documents from her, which she identified in the appeal as KM1 and KM2. Ms McLeod stated that at the hearing on 13 March 2020 the documents she had provided were missing, and the Tribunal Member stated that there were no documents that had been filed by her. Approximately one third of the way through the hearing Tribunal staff found the documents, and, while the documents were before the Member, he did not refer to them. Statements for both properties including photocopies of receipts were contained in KM3 and KM4, and the Owner's bundles KM1 and KM2 also contained receipts.
The Owner filed an affidavit sworn on 24 June 2020 in which she stated that on 17 February 2020 when she attended the Tribunal she had been handed two bundles of documents by Ms McLeod; those documents were annexed to her affidavit. At the hearing on 13 March 2020 she was present when her counsel handed up to the Member the two bundles of material which had been provided to her, and at no point in time did the Member discover any additional material provided by Ms McLeod. The Owner stated that there are receipts and emails in KM3 and KM4 that she had not seen before those documents were served on her in the appeal proceedings.
The Agent's representative confirmed that the material at pp 28 and following of both KM3 and KM4 was the material provided on 17 February 2020, and that if the Appeal Panel were to allow Ms Burston's affidavit into evidence, the Agent wished to put on material in reply to dispute that the documents annexed to that affidavit were the documents provided on 17 February 2020.
The Appeal Panel notes that while there is substantial commonality, the documents in KM3 and KM4 as filed in the Tribunal on 16 June 2020, are not the same as the documents annexed as Tabs 1 and 2 of Ms Burston's affidavit. At the appeal hearing the Appeal Panel observed that several pages in KM3 and KM4 had handwritten notations, which appeared to have been added after copying. The Appeal Panel determined, with the agreement of the parties, to obtain the first instance files to confirm what material was before the Tribunal Member on 13 March 2020. The state of the documentation is discussed below.

Appellant's submissions

The Agent's written and oral submissions contended that the Agent was denied procedural fairness, and that the Tribunal had failed to provide reasons.
In the written submissions, provided by email on 29 May 2020, the Agent contended that there had been a denial of procedural fairness in: 1. The Tribunal Member accepting the Owner's representative's contention that the Agent had not provided receipts and the Agent was not entitled to be reimbursed for expenditure, in circumstances where there were receipts available to the Tribunal for the latter part of the hearing; 2. The Tribunal Member failed to provide calculations in writing or written reasons for the orders so his determination could not be properly checked; 3. The failure to provide Ms McLeod an opportunity to give evidence in the witness box and be cross examined before her assertions were rejected.
Those contentions were pressed in oral submissions. The Agent conceded at the appeal hearing that if, as contended, the documents in KM3 and KM4 are the documents provided by Ms McLeod for the first instance hearing, she did not provide a written statement on which she could have been cross examined. In reply the Agent submitted that in the absence of sworn evidence it is possible that the Member misunderstood what Ms McLeod was saying as being submissions.
In oral submissions the Agent accepted that, based on the transcript, there were oral reasons, however submitted that those reasons were inadequate.
In the written submissions the Agent took issue with the Tribunal Member's findings on cleaning and linen charges for short term tenants, and plumbing work.
For COM 19/53190, concerning 51, the Agent confirmed that that part of the order requiring payment of $5,704.78 for management fees charged at 13% for the periods of short term letting, above the 5.5% specified in the Agency Agreement, was not challenged. The Agent contested the amount of $1,681.61 rent which had been reimbursed to a tenant who had complained of vermin, submitting that there was implied authority under the Agency Agreement for that payment. The Agent also pressed the challenge to that part of the order requiring payment of $2,976.75 for one week's rent.
For both matters COM 19/56227 and COM 19/53190 the Agent contested that part of the orders made on the basis of an absence of receipts, submitting that the Member had denied the Agent procedural fairness.
In relation to the order for payment of costs in the amount of $4,000, the Agent submitted that the appropriate order was that each party pay their own costs. If some part of the appeal were to be upheld, the Agent would challenge the order for costs.

Respondent's submissions

The Owner submitted that there was no denial of procedural fairness, and that challenges to the factual findings made by the Tribunal would not be an error of law, or give rise to procedural unfairness. A fair reading of the transcript reveals that adequate reasons were provided, in an ex tempore decision. The Owner submitted that no error of law had been demonstrated, and, to the extent that the Agent seeks leave to appeal, leave should be refused as the Agent has failed to demonstrate that the decision of the Tribunal was not fair and equitable or against the weight of the evidence. The Owner submitted that the Agent had failed to demonstrate that it had suffered a substantial miscarriage of justice in circumstances where it sought to disturb factual findings open to the Tribunal on the available evidence.
The Owner submitted that there would be no error of law in the Tribunal failing to consider or take into account particular pieces of evidence put before it, and that a failure to consider evidence is not a denial of procedural fairness. In any event the Member had in fact taken the material provided by the Agent into account. The Agent's counsel had handed a copy of the documents to the Member early in the hearing, and the transcript confirms that the Member provided Ms McLeod with sufficient opportunity to identify any evidence relied upon to answer the claims made by the Owner.
The Owner submitted that there was no error in the Member relying on the colour coded schedules handed up at the hearing (referred to as KM 5 and KM6 by the Agent) as a road map for the proceedings, setting out what was claimed by the Owner. While those documents were provided on the day of the hearing there was no procedural unfairness where it was clearly indicated that they were not evidence but were provided to assist the Tribunal, and the effect of the schedules was to reduce the ambit of the claims made against the Agent.
The Owner relied on the transcript to support her submission that Ms McLeod had been given ample opportunity to identify and present evidence on any particular claim, and was afforded indulgences including being able to locate material relating to Council rates on her computer, which resulted in a reduction of $2,026.68 for expenses claimed but not allowed; and the allowance of a modest adjustment of $200 in favour of the Agent with respect to the installation of a door when there was no evidence to establish that $770 had in fact been spent by the Agent. The Member repeatedly asked Ms McLeod whether she understood what was happening, and she acknowledged that she did.
The Owner submitted that Ms McLeod had had sufficient time to adduce evidence in chief, provided by two folders of material, and no leave was sought to adduce further evidence in chief in the witness box. Counsel for the Owner was instructed not to cross examine Ms McLeod, in order to manage the hearing in one day and avoid further costs. Further, it was open for the Tribunal to reject the assertions made by the Agent even in the absence of cross examination where there was objective evidence adduced by the Owner, and in most cases no clear evidence was adduced by the Agent (who often conceded that to be the case).
In responding to the disputed factual findings, the Owner submitted that there was evidence to support the findings on cleaning expenses and linen charges, one week's rental income for 51, and plumbing costs.

Discussion and findings

The orders made by the Tribunal related to: 1. Deductions made from trust monies held by the Agent for expenses it claimed it had incurred and had deducted from rent received in respect of the properties that it was unable to substantiate through provision of receipts; 2. Management fees charged at 13% for periods while 51 was let to short term tenants, above the 5.5% specified in the written agency agreements; 3. In relation to 51, one week's rental income for the period 1-8 October 2019, and $1,681.61 reimbursed to a tenant without authorisation or consent of the Owner.
The challenge to the component of the orders relating to the management fees was not pressed on the appeal, Ms McLeod having conceded (T 27-8) that she did not have written authority to charge a management fee of 13%.
As clarified at the hearing of the appeal, the Agent's appeal is based on the contention that the Tribunal's reasons were not adequate, and that it was denied procedural fairness in the findings based on an absence of receipts, when receipts were available in the documents before the Member at the hearing, and the absence of an opportunity for Ms McLeod to be cross examined so she could have an opportunity to respond to the allegations made.
Section 38(5) of the NCAT Act, and the general law rules of procedural fairness, require that the Tribunal ensure that each party to proceedings in the Tribunal has "a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings".
The transcript records that at the beginning of the hearing the Tribunal Member discussed with the Owner's representative the basis of the Owner's claim, confirming that part of the claim required the Tribunal to assess the amount of reimbursement of unauthorised or unsubstantiated costs and expenditures, while part was based on the charging of a management fee above that specified in the agency agreement. In relation to a number of the items in respect of which the Owner was claiming reimbursement, Ms McLeod conceded that the documents before the Tribunal did not include copies of receipts or invoices to substantiate payments (T 20, 21, 26, 38, 42, 52, 62, 80), or documents confirming agreement of the Owner to payment of additional items (T 22, 43, 56-7, 87). While Ms McLeod was able to locate some substantiating documents on her computer (T 72-3), she could not locate them all. Some documents were located during the hearing in the material provided by the owner (T 45).
Each party has provided to the Appeal Panel copies of what each asserts are the documents that were before the Tribunal. As noted above, while there is substantial commonality, there are differences between the competing versions. The Agent stated in her statement of 27 May 2020 that the documents she had provided to the Tribunal in February 2020 "were found by staff of the Tribunal" approximately one third of the way into the hearing on 13 March 2020. However that is not supported by the transcript of the hearing, which records that what the Tribunal Member had was a set of documents handed up by the Owner's representative, which Ms McLeod had checked. The version of the documents provided by the Agent to the Appeal Panel as KM3 and KM 4 has handwritten notations, indicating it cannot be a copy of what was originally served in February 2020, and then provided to the Tribunal on 13 March 2020. The Owner has provided her version of what was before the Tribunal, as annexures 1 and 2 to her affidavit of 24 June 2020. The Agent disputes that those annexures reflect what Ms McLeod had previously provided.
In order to resolve this issue the Appeal Panel obtained the files COM 19/53190 and COM 19/56227 from the Consumer and Commercial Division. Included with the Tribunal files are a blue folder of documents for 51 and a green folder for 59. Again, while there is substantial commonality, neither folder is the same as KM 3 or KM4, or annexures 1 and 2 to the Owner's affidavit of 24 June 2020.
It is not clear from the transcript what was in evidence before the Tribunal on 13 March 2020. None of the documentary material was formally admitted into evidence. There is a disparity between what has been retained with the Tribunal files at first instance in the blue and green folders, and what each of the parties says on the appeal were the documents provided by the Agent to the Tribunal. While Ms McLeod provided during the hearing explanation for some of the expenditures for which the Owner was seeking reimbursement (T 21, 34, 35, 39, 49, 50, 54, 58, 71, 83, 91), it is not clear from the transcript whether that explanation was treated as her evidence. The transcript confirms that the Tribunal proceeded on the basis that Ms McLeod had not provided a written statement; and she was not cross examined. However, the blue and green folders retained with the Consumer and Commercial Division files commence with a short (unsigned) statement as to the background and some specifics; and another (unsigned) statement headed "In Reply".
The Owner's representative submitted on the appeal that there had in fact been no confusion as to what was relied upon; that it was a small claim, and the parties and the Tribunal were trying to finish the hearing in the day allocated; and that Ms McLeod had had the chance to check the material handed up to the Member at the start of the hearing.
The Appeal Panel does not agree that there was no confusion as to what was relied upon. We are of the view that in the absence of a common set of documents, provided in the same form to both parties and to the Tribunal in advance of the hearing, and in the absence of clarity as to whether any of the written material or oral statements made in the course of the hearing were evidence on which the Agent wished to rely, it is not possible to be confident that the Tribunal was able to engage properly with the issues before it.
That part of the claim in relation to 51 for payment of rent between 1- 8 October 2019 illustrates the difficulty that the state of uncertainty as to the evidence presented to the Tribunal. The evidence on which the Owner relied was an email send by Ms McLeod to Ms Burston on 1 October 2019 (contained in the documents provided to the Tribunal by the Owner), in which Ms McLeod stated: I will not be putting short term tenants into either of your properties again after the last day of the last booking in 51WS on the 8th October 2019. Hence, I have removed your properties from all the executive and holiday maker sites:…
After referring to personal items of furniture which she had provided for 51, Ms McLeod continued: I will remove these items on the departure day of this last short term tenant's stay.
The Owner claimed compensation for rent paid until 8 October 2019. The transcript records (T 65-66) Ms McLeod agreeing with the Tribunal Member that the agreement with the Owner finished on or about 8 October, and "So the last person - the last - 30 September was the last - maybe there were cleaners in there, I don't know. No one else". There was further discussion, in which Ms McLeod stated that the keys were handed back and the Owner arrived; and later (T 67) that it was 30 September. The Tribunal stated satisfaction that "someone was there" (T 69) and allowed $450 per day for 7 days to 8 October 2019.
The possibility that there was no tenant in 51 after 30 September 2019 is apparent both in Ms McLeod's statements during the hearing, and in the unsigned statement in the folder of documents retained with the Tribunal file. The Owner's representative conceded in the appeal that he could not point to evidence that rent was paid to 8 October and the Agent had failed to account. In the absence of certainty as to what documents were in evidence, and what evidence Ms McLeod was giving, the Appeal Panel is not persuaded that it is appropriate to characterise the issue as a "mischaracterisation" of the evidence, rather we cannot be certain that that part of the Owner's claim could have been appropriately considered.
A similar comment can be made about the claim for reimbursement of the amount of $1,681.61 refunded to a tenant in 51, due to complaints about vermin. That amount was included in the total sum awarded in COM19/53190 on the basis that there was no evidence that the refund was authorised by the Owner (T100). The only consideration of that issue was a question asked of the Agent as to where the evidence was that the refund was authorised (T43); oral evidence may have provided a basis on which a finding as to whether there was implied authority for that refund could be made.
The difficulties for the Tribunal were exacerbated by the Agent's reliance during the hearing on her attempts to locate relevant material on her computer, rather than in documents filed and served in accordance with the Tribunal's directions. While there is some authority for the proposition that a finding of denial of procedural fairness does not require intention or even conduct on the part of the decision-maker (see, for example, Clements v Independent Indigenous Advisory Committee (2003) 131 FCR 28 at 38; Hot Holdings Pty Ltd v Creasy (2002) 210 CLR 438 at 448, per Gleeson CJ), to the extent that deficiencies in the evidence were attributable to the failure by a party to comply with directions, it could not be said that the Agent may have been denied a reasonable opportunity to be heard.
A failure to deal with an issue properly before the Tribunal is an error of law, a proposition confirmed by the Appeal Panel recently in Jayasooriah v Wisdom Properties Group Pty Ltd [2020] NSWCATAP 81: 43. It will be an error of law if a Tribunal Member does not deal with an issue that was before him or her for determination. In Yong v Antworks Pty Ltd [2016] NSWCATAP 14 at [31- 34] an Appeal Panel cited the following authorities in support of this proposition: 31 In Yates Property Corporation Pty Ltd (In Liquidation) v Darling Harbour Authority 24 NSWLR 156 at 186 Handley JA stated: 'The duty of a judicial officer to hear and determine a claim made in judicial proceedings conducted before that officer is also an incident of the judicial process. Since breaches of the duty to give proper reasons and to observe procedural fairness involved errors of law, there seems every reason to hold that a breach of the duty to hear and determine a claim made in judicial proceedings also gives rise to such an error. 32 In Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; 206 CLR 323 Gaudron J in context of the Migration Act (Cth) discussed a constructive failure to exercise jurisdiction stating: 'It follows from what has been written above that the failure of the Tribunal to make findings with respect to a particular matter may, at the same time, reveal failure to exercise jurisdiction, whether actual or constructive, and, also, failure to conduct a review as required by the Act.' 33 In Fox v Australian Industrial Relations Commission [2007] FCAFC 150 Marshall and Tracey JJ stated at paragraph 38: 'In the present case the complaint is not that the full bench ignored the evidence but rather that it did not deal with an important ground raised by Mr Fox. This case is more akin to one where there is a failure by a Tribunal to deal with necessary issues. Such a failure constitutes a jurisdictional error.' 34 In Khan v Kang (supra) the Appeal Panel found that the Tribunal had made an error of law by failing to consider a claim made by Mr Khan. The Appeal Panel observed at [28] as follows: 'It is possible to characterise what occurred either as a failure to give reasons for the Tribunal's decision or a failure to exercise the jurisdiction conferred on the Tribunal and invoked by the appellant in relation to this claim in respect of excess timber - see Waterways Authority v Fitzgibbon [2005] HCA 57 at [129] - [130] and Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 at [42]. Whichever way it should be characterised, the Tribunal's failure to consider such a claim at all in its Reasons for Decision amounted to an error of law by the Tribunal below'
This is not a situation where the Tribunal failed to consider each of the elements of the Owner's claims. The transcript and reasons confirm that the Tribunal attempted to address each of those parts of the Owner's claim that were pressed, as tabulated in the schedules provided at the hearing. Rather, the lack of clarity as to what documents were in evidence, and whether what the Agent provided in the unsigned statement or verbally during the hearing was evidence on which the Tribunal could rely, impeded the Tribunal's proper consideration of those issues.
The right to a hearing and the opportunity to make submissions requires that the decision-maker give appropriate regard to the submissions made, so that the opportunity to be heard is a meaningful opportunity: Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 197 ALR 389. As discussed above, the Agent's reliance on material on her laptop, rather than documents provided to the Tribunal and the other party in accordance with directions, contributed to the inadequacies and uncertainties as to the documentary evidence. However, the Tribunal failed to identify whether the Agent's statements and oral assertions during the hearing were to be treated as evidence, and failed to accord the Agent the opportunity for them to be treated as evidence, instead asserting that only documentary receipts could be relied upon in defence of the claims. That was a failure to accord procedural fairness.
The Agent's grounds of appeal included the contention that it was denied procedural fairness because leave was granted for the Owner to be legally represented; that was not pressed in submissions on the appeal. Section 45 of the NCAT Act, which applies to proceedings in the Consumer and Commercial Division, provides that leave is required for a party to proceedings in the Tribunal to be represented by another person. While opposed by the Agent, that leave was granted to the Owner. The Consumer and Commercial Division Guideline on Representation states that leave for legal representation will usually be granted if the proceedings involve a claim or dispute for more than $30,000, or it is likely that complex issues of law or fact will arise in the proceedings. There is no indication that that was not the position in the proceedings, which were listed for a full day hearing. More fundamentally, it is not apparent how the decision to grant leave for legal representation affected the Agent's ability to present its case, the Tribunal providing an opportunity for Ms McLeod to respond to the submissions put by the Owner's representative for each item in the schedules.
The conclusion that there was a denial of procedural fairness means that it is preferable not to address the further claims based on particular factual findings: Royal Guardian Mortgage Management Pty Ltd v Nguyen [2016] NSWCA 88. That conclusion also makes it unnecessary to consider in detail the Agent's contention that no reasons were provided or the reasons were inadequate. However, the Appeal Panel notes that, as recorded by the Tribunal on the Notice of Order in each matter, oral reasons for the orders including the costs order were provided at the hearing; and the transcript contains those reasons. No request for written reasons under s 62 of the NCAT Act was made. The Agent's contention that reasons were not provided is not established; and the contention that the reasons that were provided orally were inadequate was not clarified in oral submissions.

Conclusion

The Appeal Panel concludes that there was a failure to accord procedural fairness in the conduct of the Tribunal hearing. While some responsibility for the state of the documentary evidence can be attributed to the Agent, the failure to identify whether the Agent's statements and oral assertions during the hearing were to be treated as evidence precluded a proper consideration of the Agent's defence to the claims brought by the Owner. It is not possible to conclude that there was no practical injustice, or that the deficiency in procedural fairness would have made no difference to the outcome, such that it is appropriate that the orders stand.
That part of the order in COM19/53190 relating to reimbursement for management fees charged over and above the 5.5% set in the written agency agreements was not contested, and should stand. The order in COM 19/53190 should otherwise be set aside, and the matter remitted for reconsideration. The order in COM19/56227 below should be set aside, and the application remitted to the Division for reconsideration. In both matters the issues for determination are those relating to the deductions made from trust monies held by the Agent for expenses incurred; and in COM19/53190 the additional matters of the rental claimed for the period to 8 October 2019 and the reimbursement of $1,681.61. It is a matter for the Tribunal what further directions are required to address the evidentiary issues. The costs order applicable to both proceedings is set aside, and any question of costs arising in relation to the proceedings at first instance, including the costs of the initial hearing, should be dealt with by the Tribunal hearing the remitted proceedings.
In view of the additional time and cost associated with such a rehearing, and the amounts in issue, it would be preferable for the parties to have further discussions to reach a settlement if possible.

Orders

The orders of the Appeal Panel are: 1. AP 20/16622: 1. The appeal is allowed in part; 2. Order 1 made in COM 19/53190 on 13 March 2020 is set aside and the following order substituted: "Birch Lang & Co Pty Ltd is to pay Jo-Ellen Burston the amount of $5,704.78, within 14 days of the date of these orders"; 1. The remaining part of the Tribunal's decision relating to the claim for reimbursement for deductions from trust monies held by Birch Lang & Co Pty Ltd for expenses incurred, for payment of rental to 8 October 2019, and for reimbursement of the amount of $1,681.61, is remitted to the Consumer and Commercial Division for reconsideration, with further evidence as directed by the Tribunal; 2. The order for costs is set aside and any application for costs of the proceedings at first instance and on remittal is to be determined by the Tribunal. 1. AP20/16626: 1. The appeal is allowed; 2. The orders made in COM 19/56227 are set aside and the matter remitted to the Consumer and Commercial Division for reconsideration, with further evidence as directed by the Tribunal; 3. The order for costs is set aside and any application for costs of the proceedings at first instance and on remittal is to be determined by the Tribunal. 1. AP20/16622 and AP20/16626: 1. If any party seeks an order for costs of the appeals, leave is granted to file and serve a short written submission on that issue within 14 days of the date of these orders; 2. Leave is granted for the other party to file and serve a short written submission in reply within a further period of 14 days; 3. The parties' submissions are to address the issue of whether the Tribunal should dispense with a hearing on the issue of costs of the appeals pursuant to the provisions of the Civil and Administrative Tribunal Act 2013 s 50(2).

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 16 September 2020

At a glance

Court

Decision date

Source

Judgment (13 paragraphs)

Parties

Cases Cited (12)