Bulasa Pty Ltd v Baytown Properties Pty Ltd [2003] VSC 248

Supreme Court of Victoria|2003-07-02|Before: GILLARD J.

APPEAL FROM VCAT - Nature of appeal - Civil claim brought pursuant to Small Claims Act - Question of law in respect of finding of fact - Evidence to support finding - No point of law - Appeal dismissed.

This is an appeal brought pursuant to s.148 of the ("the ") from a decision made by a member of the Victorian Civil and Administrative Tribunal ("the Tribunal") on 3 October 2002 in a claim brought pursuant to the 1973. The Tribunal dismissed the claim. The unsuccessful applicant made application to this court for leave to appeal the decision. Order 4 of Chapter 2 of the Rules of Court deals with the procedure. The application was made to a Master who granted leave. The jurisdiction of this court on the appeal is confined to a question of law. See s.148(1).

In order to understand the proceeding in the Tribunal, it is necessary to briefly summarise the background facts. On 15 January 1999, the owner of premises situated at 152-154 Tennyson Street, Elwood, comprising two lock-up shops, entered into a lease for a period of three years with Burton Daley Pty Ltd, a company controlled by Mr and Mrs Vallani.

Bulasa Pty Ltd ("Bulasa") became the registered proprietor of the shops in 2001 and thereafter became the landlord. The lease contained a term of renewal for a further period of three years. The lease term was renewed in January 2002, for a term of three years, subject to a rent review. Clause 3(g) of the lease provided for the review. The parties could not agree on the rental and pursuant to that clause, a request was made to the President of the Real Estate Institute of Victoria ("REIV) for the appointment of a valuer. Clause 3(g)(ii) provided -

"3(g)(ii) If the lessor and lessee fail to agree on the new current market rent of the premises 14 days prior to the Review Date (which was 15 January 2002), then this must be determined by a qualified valuer (acting as an expert and not an arbitrator) who must be a practising Estate Agent appointed at the request of either party by the President or other senior office bearer for the time being of the Institute. The determination shall be binding on the parties who shall be equally responsible for the fee of the valuer. It is agreed by the parties that the rental determined shall not in any case (unless the Retail Tenancies Legislation applies to this Lease) be less than the rental payable immediately prior to the Review Date." (Emphasis added).

On 15 April 2002, Mr Peter A. Hawkins, President of the REIV, appointed Mr Rob Bassett-Smith of Baytown Real Estate to determine the rental.

On 8 May 2002, Bulasa received a copy of the written rental determination. It was headed "BASSETT SMITH CLISDELL, Property Valuers trading as BAYTOWN REAL ESTATE". The Rental Determination recorded on the last page the following -

"BASSETT SMITH CLISDELL Trading as BAYTOWN REAL ESTATE (signature of P.A.R. Bassett-Smith) P.A.R. Bassett-Smith AAPI, Dip FM REIV Sworn Valuer No. 012 Certified Practising Valuer No. 167 Victoria"

The old rent was $15,175.11 per annum, excluding GST and the new rent was $18,200 excluding GST. Bulasa paid its half share of the cost of the valuation.

Mr Marty Kraemer, a director of Bulasa, was dissatisfied with the rent determination. He had sought a new rent of $33,800 per annum. He made enquiries which revealed that the proprietor of the firm Bassett-Smith Clisdell was Baytown Properties Pty Ltd. He contended that neither held a real estate agent's licence. He formed the view, erroneously in my opinion, that the valuation had been made by Bassett-Smith Clisdell. He raised his concern with the REIV and on 2 October 2002 he received another rental determination in exactly the same terms as the earlier one but with Bassett-Smith's name on the front and last pages.

Although the first rental determination received was on the letterhead of "BASSETT SMITH CLISDELL" and signed on behalf of that firm by Mr Bassett-Smith, a consideration of its contents could leave no-one in doubt that the person who carried out the valuation was in fact Mr Rob Bassett-Smith. This appears on the first page of the document. It contained the following -

"The appointment has been taken on personally and has been carried out by myself alone and has not been delegated or passed to any other valuer to perform the task."

The rental determination was signed by Mr Rob Bassett-Smith.

Earlier it was noted that he had been appointed by the President of the REIV, and it is clear from the body of the document that he carried out the valuation. Indeed, at the hearing, Mr Kraemer after assertions to the contrary finally accepted that Mr Bassett-Smith did carry out the valuation and that he was a qualified valuer.

On the fifth day of July 2002 Mr Kraemer made application to the Civil Claims list of the Tribunal. The parties against whom the claim was made were Rob Bassett-Smith, trading as Bassett Smith Clisdell, and Baytown Properties Pty Ltd. In addition, Mr Kraemer, on behalf of Bulasa Pty Ltd, stated in the application form that the Real Estate Institute of Victoria was also a party who had an interest in the claim.

The application form is the initiating process and sets out the nature of the claim. The value of the claim, made under the Small Claims Act 1973, was for the re-payment of $1,725.90 and $55. The form then requested the Tribunal to make an order for the payment of the money, apparently for misleading or deceptive conduct, false representation and unconscionable conduct. The services provided were identified as the valuation carried out by "BASSETT SMITH CLISDELL" and according to the outline in the form of the history of the dispute, the valuation which was carried out was "not in accordance with REIV appointment and not licensed agent (sic)". The amount claimed was the sums paid by Bulasa as its share of the cost of appointment of the valuer and the rental determination.

The Small Claims Act 1973 empowers the Tribunal to hear and determine "a small claim".

"Small claim" is defined by s.2 and means a claim for money not exceeding $10,000, inter alia, in respect of the performance of work that arises "out of a contract for the provision of services". It is necessary for an applicant to have a cause of action against the respondent. The initiating document being the "Application to Civil Claims List" is not very illuminating with respect to the cause of action. No doubt most claims are self-evident and do not require much thought to determine the cause of action. This claim was not one of the usual claims. A claim under the Small Claims Act is to be heard inexpensively, expeditiously, informally and without lawyers. However, in my opinion, it is incumbent on the Tribunal and parties at the outset of the hearing, to identify the cause of action relied upon. The application form should provide sufficient information to identify the claim but it may not. The member of the Tribunal who heard the matter, Mr P. Coldbeck, asked Mr Kraemer what the dispute was about, but at no point was the cause of action actually identified. After accepting that the valuation was made by Mr Bassett-Smith and the fee was paid for it, Mr Kraemer stated at the hearing -

"I haven't taken it to the tenant because there's two issues; there's the appointment and there's the contents of the valuation. Here I am disputing the appropriateness of the appointment."

The reference to not taking it to the tenant was in response to the question of whether the rental, pursuant to the valuation, was being paid. What Mr Kraemer meant when he said that he had not taken it to the tenant is unclear but it is clear that the lessee would be aware of the determination. The lessee made representations to the valuer concerning the valuation, and was given a copy of the determination.

Mr Coldbeck asked Mr Kraemer what was his ground of dispute concerning the appropriateness of the appointment, and he stated that the lease defined the appointment and that "he has got to be a qualified valuer, he has to be an expert and he has to be a practising real estate agent."

The evidence and discussions at the hearing revealed that Bulasa ultimately accepted that Mr Bassett-Smith was a qualified valuer and that he did carry out the valuation, but it was contended that he was not a practising real estate agent. That was the issue at the hearing.

I have carefully considered the transcript of the proceeding and the reasons given by the learned Member but nowhere does Mr Kraemer on behalf of Bulasa identify his cause of action. It seems to me from the application form that he was relying upon a cause of action that Mr Bassett-Smith was in breach of ss.9, 11 and 12 of the Fair Trading Act 1999. The cause of action appears to be that Mr Bassett-Smith, by undertaking the rental determination, entered into an agreement with Bulasa and the lessee to provide services, and represented that he was a person within the meaning of the lease agreement, namely, a qualified valuer who also practised as an estate agent, and the allegation was that the representation was false and misleading. Given that was the most likely cause of action, I raised with Mr J. Wilson of Counsel for the appellant, Bulasa, what damage was suffered by it as a result of this alleged misrepresentation? The claim made by Bulasa was for the return of the amount paid by Bulasa as its contribution to the cost of the rental determination. Under the lease, each party was required to pay half of the cost of the rental determination. As the rental determination had not been set aside or declared void and of no effect, I raised with Mr Wilson the question whether Bulasa had suffered any damage, assuming it could prove its case. Until the determination was set aside, it bound the parties to the lease. Each agreed to pay a half share of the cost of the rental determination and in my opinion Bulasa did not suffer any damage, even if it could prove that there had been a breach of any of the statutory sections. It is trite law that a breach of any of these statutory provisions does not give a cause of action unless damage is actually suffered. See Wardley Australia Ltd v Western Australia.[1] A victim of a breach must prove loss or damage in reliance on the conduct in order to recover damages. See Baxter v British Airways Plc[2] and Gates v City Mutual Life.[3]

In accordance with the usual practise in the Civil List, the parties were required to take the oath or affirmation at the beginning of the proceeding and hence the submissions and what they said was evidence in the proceeding. On two occasions the learned Member asked questions of Mr Kraemer as to why the parties were there and what was the case really about, and there is some evidence to support the inference that Mr Kraemer's real purpose in bringing the proceeding was to attack the rental determination. This he could not do at the Tribunal, not only because the lessee was not a party to the proceeding, but also because there were grave doubts that such a proceeding would be a small claim.

The application came on before Member Coldbeck on 3 October 2002, and evidence was given by Mr Kraemer and Mr Bassett-Smith. Mr Kraemer was given the opportunity to cross-examine Mr Bassett-Smith.

Member Coldbeck delivered his judgment. He concluded that the application should be dismissed because he found that Mr Bassett-Smith was a "practising Estate Agent". Bulasa brought the claim. It had the burden of proving the falsity of the representation that Mr Bassett-Smith was a practising real estate agent.

"(1) A party to a proceeding may appeal, on a question of law, from an order of the tribunal in the proceeding -

(b) to the Trial Division of the Supreme Court in any other case -

if ... the Trial Division, ... gives leave to appeal."

It is noted that the appeal is only on a question of law. Master Evans gave leave to appeal. The Notice of Appeal set out five questions of law and the first four raised the questions whether Rob Bassett-Smith or Baytown Properties Pty Ltd was a qualified valuer, a practising estate agent or both a valuer and a practising estate agent within the meaning of the lease.

The learned Member carefully considered the evidence and was of the opinion that there was evidence to support the conclusion that Mr Bassett-Smith was a practising estate agent. He concluded by saying -

"I am therefore satisfied that the person who has been appointed by the Real Estate Institute of Victoria and its president to conduct this review of rental is a person who fits the requirements of clause 3(g) of the lease. I was satisfied that the valuation was in fact performed by Mr Bassett-Smith personally and that he was a practising estate agent and a qualified valuer."

It followed that Bulasa failed to establish its cause of action.

5. Whether Member Coldbeck in his orders made on 3 October 2002 in proceeding C2431 of 2002 in VCAT erred by holding that the rental determination made on 8 May 2002 (being either Exhibit MK5 or MK13 to the affidavit of Marty Kraemer affirmed 29 October 2002) satisfied the provision of clause 3(g)(ii) of the lease being Exhibit MK2 to the said affidavit."

Member Coldbeck did not hold that the rental determination satisfied the provision of clause 3(g)(ii) of the lease. It was not an issue before him. In my view, ground 5 raises a false issue, is irrelevant and fails.

It is necessary to say something about the nature of the appeal to this court. Mr Kraemer, on behalf of Bulasa, filed a number of affidavits and introduced additional facts to those before the Tribunal. In my opinion, that is impermissible. This court is concerned with what occurred at the Tribunal. The question whether there was an error of law is to be decided on the evidence that was before the Tribunal.

An appeal from the Tribunal to this court is confined to a question of law. Neither the Act nor the Rules of this court state the nature of the appeal. The hearing at the Tribunal was recorded and accordingly a record is available on the appeal of what happened at the tribunal hearing and also, the reasons for the decision.

An appeal is a creature of statute and its nature, character and features are to be determined by reference to the Act which creates the statutory right. An appeal can be one of a number of types, namely, an appeal stricto sensu, that is, whether the decision below was correct on the evidence before the decision maker; a re-hearing on the evidence below or a re-hearing on evidence supplemented by additional evidence on the appeal. Another form of appeal is an appeal by way of re-hearing de novo. See Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd[4] and Fox v Percy.[5]

But where the statutory right of appeal restricts it to a question of law, the court is concerned with the legality of what the tribunal has done and decided. In those circumstances the appeal is not an appeal but is equivalent to a judicial review.

The High Court in Roy Morgan Research v The Commissioner of Revenue,[6] discussed the nature of an appeal pursuant to s.148 of the Act and held that the court was exercising original jurisdiction in a proceeding which was in the nature of judicial review.

"Section 148 of the VCAT Act is concerned with the invocation of judicial power to examine for legal error what has been done in an administrative tribunal. Although s.148 uses the word `appeal', it is clear that the Supreme Court is asked to exercise original, not appellate, jurisdiction and to do so in proceedings which are in the nature of judicial review. That is not to say that there are no other avenues for a judicial review. The VCAT Act makes no express provision excluding the general supervisory jurisdiction of the Supreme Court. It may, therefore, be doubted that s.148 should be understood as doing more than providing, in some cases, an important discretionary reason for not permitting resort to that general supervisory jurisdiction on the basis that s.148 provides a suitable alternative remedy. Nevertheless it is important to recognise that the essential character of s.148 is that it provides for the institution of proceedings in the Supreme Court, by leave, in which the legal correctness of what the tribunal has done can be challenged." (Emphases added).

A judicial review is not an appeal. It is a procedure which is concerned with the legal correctness of what the decision making body has done and decided. It is not concerned with the merits of the decision. An appeal usually does re-consider the merits. Judicial review does not. The court is bound to consider the question of legality of the proceeding, and if the body has acted within its jurisdiction and according to law, the court cannot interfere with the decision. It can be seen that Bulasa's appeal is strictly confined to the legal correctness of what the Tribunal did.

The issue at the Tribunal was whether the valuation was made by a qualified valuer (acting as an expert and not as an arbitrator), who was a practising estate agent.

Clearly the Tribunal had jurisdiction to hear and determine the small claim. It did exercise its jurisdiction, heard and considered the evidence and made a finding that Mr Rob Bassett-Smith was a practising real estate agent. Grounds of appeal numbered one to four raise the issue whether the finding was correct. By way of example, ground 3 asked the following question -

"3. Whether for the purpose of clause 3(g)(ii) of the lease ... as at 8 May 2002 Rob Bassett-Smith was -

The other grounds of appeal raise similar issues. The grounds do not disclose a question of law. They seek to challenge the merits of the decision. This is only available in very limited circumstances on a review.

Mr J. Wilson of Counsel, who appeared on behalf of Bulasa, in his submissions attacked the finding made.

The construction of a contract is a question of law. However, there was no dispute as to the express provision of the contract. Indeed, there could be no debate about it. The person who was to determine the rental was to be a qualified valuer who was a practising estate agent. These were questions of fact. Whether Mr Bassett-Smith was a practising estate agent was a conclusion to be drawn from the facts.

The issue on the appeal must, of necessity, be confined. An appeal on the ground that the decision was contrary to the evidence and the weight of the evidence is not an appeal on a point of law as a general rule.

However, where the issue is whether the decision was based on no evidence or is so contrary to the evidence before the court that it was perverse, a question of law arises. See Transport Accident Commission v Hoffman [1989] VicRp 18; [1989] VR 197 at 200 and 207. The merit of the decision is not the subject of judicial review, but the making of a finding not supported by evidence amounts to an abuse of power and would cause injustice. Although some of the old cases support the conclusion that the common law review jurisdiction does not extend to a decision made without evidence, the better view is that an order made without evidence is an order made without jurisdiction. See Folkstone Corporation v Brockman.[7] Hence, the modern view is that review is open where the issue is whether there was any evidence to support the decision, and it extends not only to the situation where there is no evidence but to where the evidence, carefully analysed, could not reasonably support the finding made. See Lee v Showman's Guild of Great Britain.[8] The test is whether any tribunal could reasonably have reached that conclusion on the evidence. See R v Roberts.[9] Applying the same tests that one applies to a jury's finding of fact, was the decision perverse?

The decision making process was a matter for the Tribunal. It was charged with the function of finding the facts. There is no appeal from any finding of fact. There is only an appeal on a question of whether there was any evidence to support the finding made that Mr Bassett-Smith was practising as a real estate agent. Was the finding perverse? As evidence was given of Mr Bassett-Smith's work which the Member accepted, Bulasa assumes a very heavy burden to persuade this court that the Member's finding is unsupportable.

Mr Bassett-Smith gave evidence of the nature of his practice. The evidence clearly established that he was a licensed real estate agent in this State, that he was a qualified valuer and that he carried out the valuation. Mr Kraemer, in the course of his evidence-submissions, made complaint that the original valuation purported to come from a firm, and that it would appear that the fee for the valuation may have been payable to that firm. But Mr Kraemer could not have been under any illusion. A reading of the first valuation would have clearly established, as found by the Tribunal, that Mr Bassett-Smith did perform the valuation himself.

Indeed, at the hearing as I have said, Mr Kraemer conceded that the only real issue was whether or not at the relevant time he was a practising estate agent within the meaning of the lease.

Mr Wilson, on behalf of Bulasa, referred to a number of cases which were concerned with the word "practising". These cases were all concerned with the word in differing contexts and mainly in a statutory context.

In my opinion, what the phrase "practising estate agent" meant in the lease was a question of construction to determine the common intention of the parties to the lease. The primary source of the meaning is the normal and natural meaning of the words. The cases referred to by Mr Wilson to some extent support that approach, and in their normal and natural meaning, "a practising estate agent" means somebody who regularly performs tasks which an estate agent does. "Practising" involves a degree of repetition of the tasks normally performed by an estate agent.

Section 4 of the Estate Agents Act defines "estate agent" and the definition gives some indication of the types of tasks one would normally expect an estate agent to perform. But it does not follow that because a person does not perform all of the usual tasks that an estate agent does, that that person is not practising as an estate agent. There are a number of tasks that an estate agent may perform and the fact that a person specialises in one particular area of estate agency does not mean that the person is not a practising estate agent.

The learned Member carefully considered the evidence and came to the conclusion that at the relevant time Mr Bassett-Smith was a practising estate agent.

Mr Wilson concentrated his argument on things that Mr Bassett-Smith had failed to do. Mr Wilson listed a number of statutory obligations required by the Estate Agents Act and submitted that Mr Bassett-Smith had breached some of those statutory obligations. For example, that Mr Bassett-Smith had no office, although there was evidence that he used an office and facilities of an estate agent, that he was indiscriminate in the use of a letterhead and that there was no evidence of him painting his name and description at his place of business, which he was required to do. It was also said that he breached the provisions of the Business Names Act and the Income Tax Assessment Act in the conduct of his business. Whether or not Mr Bassett-Smith breached any statutory provision in the conduct of his business does not of itself lead to the conclusion that he was not a practising estate agent. The question is whether there was credible evidence before the Member which supported his finding that Mr Bassett-Smith was a practising estate agent. Was the decision perverse?

"Now, there is no issue about Mr Bassett-Smith being a qualified valuer. He conducted an inspection and initially provided a report regarding his rental determination, following his initial instruction, and that report is dated 8 May 2002. That report was presented on the letterhead of Bassett-Smith Clisdell, property valuers, and the report also said, `Bassett Smith Clisdell Property Valuers a division of Baytown Properties Pty Ltd ABN' - and so on - `trading as Baytown Real Estate'. Well, as I have pointed out, Baytown Real Estate was a business name controlled by Mr Bassett-Smith and not by Baytown Properties Pty Ltd. It seems that the fact that this was the letterhead that was used was the basis for this application."

The learned Member then went on to note that the report made it clear that the valuation was carried out by Mr Bassett-Smith and concluded -

"It is quite clear that the report is, on its face, a report of Mr Bassett-Smith."

The learned Member then went on to note that a later document came along after complaint was made about the letterhead. He then stated -

"Although Mr Kraemer has sought to make the matter appear to be quite complicated, essentially the issues that are involved are not complicated and the fact that whatever letterhead might have been used, the fact that whoever might have sent an invoice for payment did not alter the position, namely that Mr Bassett-Smith provided and conducted the valuation."

The learned Member then referred to the definition of "estate agent" in s.4 of the Act.

"Now it is quite clear that a person would be regarded as carrying on business as a real estate agent if it undertook any of those functions, and to qualify as a practising estate agent, the person does not have to perform all or most, or substantially all or substantially most, of those functions as defined. Mr Bassett-Smith has given evidence which I accept, that certainly he does not conduct a real estate agent's practice in the sense that that might be understood; that is, an office on High Street in suburbia, with a window full of `for sale' signs showing lovely photographs of lovely properties, all of which are to be available to the public, all at fair and reasonable prices. He does not conduct auctions. But that does not mean that he is not a practising estate agent. He has provided detailed lists of property valuations in respect of which he has provided advice, both in relation to valuations of the property, rental and the like, over the last two years, and he has also provided details of determinations and valuations that he has performed for the Institute. Those determinations and valuations are, I believe, relevant, but I do not take them into account. But I take into every (sic) account that he has provided in the last two years advice in relation to the sale and purchasing of some 140 commercial properties and that he was during that period also acting as buyer's agent."

The learned Member therefore concluded that Mr Bassett-Smith was a practising estate agent.

I have considered the evidence given by Mr Bassett-Smith. The findings made by the learned Member are amply supported by that evidence. In my opinion there is no doubt at all. The finding of the learned Member was supported by the evidence and was the only finding that he could make in the circumstances. Bulasa had the burden of proving that Mr Bassett-Smith was not "a practising estate agent" within the meaning of the term in the lease, and it failed. On the contrary, the learned Member concluded that Mr Bassett-Smith was a practising estate agent. There is no point of law established in this appeal. The finding is supported by the evidence. The appeal must fail.

A respondent to any appeal is entitled to support the decision upon any ground which would have been open to him when the decision was made. See Preston Ice and Cool Stores Pty Ltd v Hawkins.[10] At the end of his reasons, the learned Member stated that he entertained serious doubts whether it was a fair trading dispute within the definition contained in the Fair Trading Act 1999. However, in my opinion, for reasons already stated, Bulasa's claim was based on a cause of action for alleged breach of one or more provisions of the Fair Trading Act. It was a small claim, because it was a dispute arising out of a contract for the provision of services. But in my opinion, the Tribunal would have dismissed the application, assuming Bulasa had proven a breach of any of the statutory provisions, because Bulasa has not suffered any damage. The contract by Mr Bassett-Smith was to provide a valuation. No steps have been taken to set the valuation aside or to have it declared void and of no effect. The services were performed and Mr Bassett-Smith was entitled to be paid. The parties to the lease agreed to each pay half of his fee. Bulasa sought the refund of the half it had paid. But in my opinion, on the evidence, it has not suffered any damage. The valuation is still subsisting. It follows that had Bulasa proven Mr Bassett-Smith was not a practising estate agent, nevertheless it did not suffer any damage and accordingly its claim would have been dismissed.

In my opinion, the appellant has failed in its appeal. None of the grounds have been made out. Indeed, there was no point of law. This proceeding has been an attempt to attack the merits of the decision. Subject to any submissions by counsel I propose to make the following orders -

(i) That the appeal brought against the decision made by the Victorian Civil and Administrative Tribunal on 3 October 2002 in a claim brought by the appellant against the respondents, is dismissed.

(ii) That the appellant pay the respondents' costs of its appeal including reserved costs.

[5] [2003] HCA 22 at para 20.

At a glance

Court

Decision date

Before

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Judgment (81 paragraphs)

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Cases Cited (5)