Cadi Developments Pty Ltd v Ting Li; Ting Li v Cadi Developments Pty Ltd

(1) On 18 October 2023 the Respondent lodged a "Home Building Application" in the Tribunal by which the Respondent sought an order for the refund of $10,050 previously paid by her to the Appellant as a deposit pursuant to the agreement for the provision of services by the Appellant. The Respondent's application alleges that the Appellant refused to continue with the provision of the services under the contract and that the Respondent did not want the Appellant to continue providing the agreed services. Rather, the Respondent wanted return of the deposit.

(2) On 2 November 2023, the Appellant lodged an application with the Tribunal for an order that the Respondent pay to the Appellant a further sum of $10,050. The application stated that the Appellant opposed the Respondent's application seeking a refund of the payment of the first sum of $10,050 (ie. the deposit). The application stated that the Appellant informed the Respondent that the Appellant required the Respondent to communicate with the Appellant by email only. This requirement was introduced because of the alleged conduct of the Respondent that the Appellant described as abusive and disrespectful.

(3) On 9 April 2024 the Tribunal heard both applications and made the order referred to above, requiring the Appellant to pay to the Respondent the sum of $5,000 which the Tribunal described as a "partial refund". The Tribunal also dismissed the Appellant's application referred to above in which the Appellant had sought an order for the payment of a further sum. The record published by the Tribunal indicated that reasons were given by the Tribunal orally. There are no written reasons.

(4) On or about 2 May 2024 the Appellant lodged its Notice of Appeal.

(5) The Notice of Appeal of the Cross Appellant was lodged on 29 July 2024.In that Notice the Cross Appellant stated that she had the leave of Tribunal to lodge the appeal out of time.

(6) The Appeal Panel made an order staying the operation of the order made on 9 April 2024 requiring the Appellant to pay to the Respondent $5,000.

(7) Thereafter, the parties lodged submissions in support of and in opposition to their respective appeals.

1. The Notice of Appeal lodged by the Appellant states that the grounds of appeal are that the Tribunal member stated during the hearing that she could not quantify the amount of work that was conducted by the Appellant. The Appellant stated that the member said that the best she could decide on the information available was that the Appellant was entitled to retain a portion of the deposit paid. We interpret this "ground" to be an assertion that the Tribunal erred in finding that there was no evidence to enable the Appellant's work to be quantified and thus to be entitled to retain the whole of the deposit.
2. The second ground of appeal was that the Tribunal member was "misled" by the Respondent because of an "unannounced witness" who gave evidence in support of the Respondent.
3. In addition, the Notice of Appeal stated that the decision under appeal (which we will now refer to as the Decision) was not fair and equitable. This was the case because the Tribunal did not have sufficient information to quantify the amount of work that the Appellant had conducted and concluded that splitting the deposit "50/50" would be the fairest option for the parties. The Decision was also said to be not fair and equitable because of the Tribunal having been misled by the "unannounced witness" brought by the Respondent. The Appellant stated that that witness was a person who worked for the Respondent and who therefore had a conflict of interest because he received payment from the Respondent. The third reason that the Decision was not fair and equitable was because the Respondent not only brought the witness to the Tribunal without prior notice but also did not serve the Appellant with the documents lodged with the Tribunal in support of the Respondent's application. This point was supported by copies of an email sent by the Appellant to the Tribunal on Sunday 7 April 2024 (two days prior to the hearing) stating that the Respondent had not served documents on the Appellant in accordance with the prior directions. Additionally, there was a copy of an email from the Tribunal to the Appellant in reply. That email stated that the Appellant should contact the Respondent and ask for the evidence and also stated that "outstanding issues relating to non-compliance with Tribunal directions should be raised with the hearing tomorrow 9/4/24".
4. In addition, the Notice of Appeal referred to fresh evidence upon which the Appellant sought to rely in support of the appeal. That evidence consisted of a statement from an architect and a further statement from a quantity surveyor providing an opinion as to the value of the work which the Appellant had conducted for the Respondent.

1. As stated above, the Respondent lodged her cross-appeal on 29 July 2024. The Cross-Appellant's case was that the Tribunal erred in making an order for a partial refund when in fact the correct order should have been for a full refund of $10,050. The Notice of Cross-Appeal contains allegations and assertions about the Appellant which, in our view, do not appear to be supported by evidence and in any event are irrelevant to how we should determine the two appeals. Ignoring those assertions the essence of the cross-appeal may be summarised as follows:

(1) The "legitimacy and legality" of the contract must be established. We interpose here to say that the Cross-Appellant relied upon the contract in her application lodged on 18 October 2023 and it appears inconsistent with that position to state in the Notice of Appeal that there is some doubt as to the legitimacy and legality of the contract.

(2) There was no breach of contract by the Cross-Appellant. Rather, the Appellant breached the contract.

(3) The Tribunal member did not conduct a "reasonable, legal or relevant review of the evidence" provided by the Appellant.

(4) The Cross- Appellant seeks an order for the return of the whole of the deposit and a further sum of $6,700 as "liquidated damages for breach of contract".

(5) The decision was not fair and equitable because the Tribunal relied upon "fabricated evidence" and "false statements" lodged by the Appellant misleading the Tribunal.

(6) The member did not "conduct the trial with fairness and impartiality" and there should be a rehearing.

(7) The decision was not fair and equitable also because the Tribunal failed to find that the Appellant breached their obligations under the contract.

(8) The Tribunal failed to give appropriate weight to evidence provided by the Cross-Appellant to the effect that the Appellant promised to refund the entire amount if the Appellant did not obtain "CDC approval".

1. The Appellant's submissions have been summarised above in connection with our description of the grounds of appeal. During the hearing of the appeal we indicated to the parties that we would not allow the fresh evidence sought to be relied upon by the Appellant as to the value of the work undertaken by the Appellant. That evidence was in the form of an opinion by an architect and a quantity surveyor and there was, in our opinion, no reason why that evidence could not have been made available and tendered at the first instance hearing.
2. The second ground in the Appellant's submissions concerned the Appellant's assertion that the Respondent had not provided any evidence to the Appellant prior to the hearing. Again, this has already been touched upon in our description of the grounds mentioned in the Notice of Appeal. However, at the hearing of the appeal, the Appellant's representative, Mr Li acknowledged that he did not in the course of the hearing inform the member or complain about the non-service of the Respondent's documents. We are of the view that the Appellant should not be permitted to rely on this ground having not raised it before the Tribunal at first instance.

Submissions of the Respondent to appeal/submissions of the Cross-Appellant

1. The Respondent submitted that there was evidence before the Tribunal that the Appellant had made a verbal promise to the Respondent that the Appellant was a registered professional architect and that the Respondent has since learnt that the Appellant has not been registered. During the hearing of the appeal, the Appellant's representative acknowledged that the Appellant was not a registered architect and denied that there was a promise made verbally to the effect alleged by the Respondent.
2. The Respondent took us to documents in a bundle of documents lodged by the Respondent in support of the cross-appeal and in opposition to the appeal. One of the documents included translations of conversations between the Respondent and the Appellant's representative. The Respondent informed us that those translations were before the member at first instance. Several of the documents bore a translation stamp dated 24 November 2023. The page that contained the conversation in which the Appellant's representation is recorded saying that he was a certified architect contains a translation certificate dated 17 May 2024. That was after the date of the hearing (9 April 2024) and therefore could not have been evidence before the Tribunal at first instance. We informed the parties that we do not intend to have regard to that page because it was not put before the Tribunal at first instance.
3. The Respondent submitted that the Appellant's representative had made a verbal promise that if CDC approval is not achieved in respect of the services offered by the Appellant, then the Appellant would return all money paid to the Respondent. We understand that the reference to "CDC approval" constitutes a reference to a certificate confirming development consent by the local authority.
4. The Respondent's submissions included relying upon an extract of an email allegedly sent by the Appellant's representative in which the Appellant states that due to the "offensive language and manner that was used to our head designer Catherine on 3 March 2023", the Appellant "will not be servicing you on WeChat anymore". The email then appears to state that the Appellant requires the Respondent to "direct all your concerns to our email on info@cadidevelopment.com". The Respondent submitted that that email was evidence that the Appellant had breached its obligations by ceasing to continue work as required by the contract. The Respondent submitted that the evidence was that the Appellant had breached its obligations under the contract and that there was no evidence that the Respondent had breached her obligations.

1. As we explained to the parties at the hearing of the appeal, appeals from decisions made in the Consumer and Commercial Division of the Tribunal are regulated by the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act). Essentially the position is that a party may appeal on a question of law, meaning that a party should be able to identify an error of law made by the Tribunal member. Additionally, a party may appeal, with the permission of the Tribunal, on an error which is not about question of law but which satisfies the requirements of cl 12 of sch 4 of the NCAT Act.
2. One of the difficulties in this appeal is that we have been provided with a document which is said to be a transcript of the first instance hearing. The transcript was prepared by the wife of Sunny Li and with the greatest of respect to that person the transcript is in part difficult to understand, in some parts incomprehensible and clearly words are included that cannot be correct. In short, in our view, it is an unreliable document.
3. Neither party asked for a written statement of the member's oral reasons and accordingly we are asked to rely on the poor quality transcript lodged by the Appellant. However, the following findings of fact made by the Tribunal can be gleaned from the transcript:

(1) The contract between the parties was in writing. The Respondent lost faith in the services provided by the Appellant and conveyed messages to the Appellant which the Appellant thought were insulting. The Appellant asked for an apology and did not get one.

(2) The contract was terminated and the fault was "both ways". The contract provided that the Appellant should be entitled to fair remuneration for what they have done to date unless they were entirely at fault.

(3) There was clear evidence of work being done by the Appellant but no evidence as to how to quantify the value of the work done.

(4) There is no evidence to show that the Appellant did not provide work as contractually obliged or deliver on their services.

(5) The Respondent did not supply evidence of additional costs it incurred with another architect.

(6) Both parties had "flawed cases".

1. Towards the end of the hearing, the member announced that she was ordering a refund of $5,000. The member added that both cases are flawed, work was done by the Appellant and the contract was frustrated by the conduct of both parties.
2. Although it might appear that the member gave insufficient reasons for her decision, we are not prepared to make a finding that the reasons are inadequate. There are three reasons for this. Firstly, the transcript is unreliable and we are not confident that we have been able to accurately interpret everything that occurred or was said at the hearing. The second reason is that the presentation of material and evidence by both parties appears from the transcript to have been unnecessarily complicated by allegations not directly relevant to the dispute before the Tribunal.
3. The third reason is that the parties have the onus of proving by reference to the Tribunal's reasons that the Tribunal erred, either raising a question of law or a ground requiring leave (in this case this involves establishing that the reasons resulted in a decision that is not fair and equitable and that as a result there was a substantial miscarriage of justice). Neither party has put forward a reliable record of the Tribunal's reasons. With one exception neither party is able to establish by reference to the reasons that the Tribunal erred. We will revert to the exception later.
4. We interpret the member to have determined the applications upon the basis that the contract came to an end through the conduct of both parties. We note that the member used the phrase "frustrated" to explain that the contract came to an end through the mutual behaviour of both parties.
5. In an attempt to do justice to the parties the member ordered the return of half of the deposit in recognition that the Appellant had done a considerable amount of work. As stated above the member found that there was no evidence to quantify the value of the work undertaken by the Appellant. In these circumstances, it is difficult to understand the precise basis for the decision to require the Appellant to return half of the deposit. It appears that there was an implicit finding that the value of the work completed by the Appellant was worth less than the amount of the deposit. However, given the lack of evidence as to the value of the Appellant's work there does not appear to have been a basis to order the return of part of the deposit. In our view the Appellant did not have the onus of proving that the value of its work was at least equal to the amount of the deposit.
6. The agreement contained provision for the Respondent to pay the Appellant by instalments. The first payment was described as a deposit of $10,050. The next payment was also for $10,050. The contract stated that that payment was to be made on provision of the Design Concept Floor Plan.
7. The contract also contained a provision dealing with termination. The relevant clause provided that either party may terminate the agreement on the expiration of 14 days written notice. Upon termination the client (the Respondent) was required to pay the designer (the Appellant) all amounts payable at that time pursuant to the agreement. The clause goes on to provide that where the agreement is terminated by the client (other than because of the fault of the designer) or is terminated by the designer because of the default of the client, the designer shall be entitled to reimbursement for any loss or expense reasonably incurred. The clause is in our view concerned with one of the parties exercising a right to terminate. Here the Tribunal appears to have found that the agreement was not terminated pursuant to a right but rather came to end through breach by both parties.
8. Against this background, it is necessary to consider the grounds of appeal (which we have summarised earlier).
9. The Appellant's first ground is that the Tribunal erred in considering that it could not quantify the amount of work that was undertaken by the Appellant but nevertheless determined that the Appellant was not entitled to retain the whole of the deposit. We are of the opinion that this ground should be upheld on the basis that there was no reason for the Tribunal to have come to the conclusion that the Appellant was not entitled to retain the whole of the deposit. Having found that both parties were "at fault" and that the agreement between them came to an end on the basis of mutual fault, there was no basis in principle (or having regard to relevant evidence) to order the return of any part of the deposit. This aspect of the Decision is the exception to which we referred earlier.
10. The second ground of the Appellant's appeal is that the Tribunal was misled by the evidence of an "unannounced witness". Given the unreliable transcript of the member's reasons it is not possible to say whether or how the Tribunal was misled. This ground is dismissed.
11. The third ground it is that that decision was not fair and equitable. This is a ground requiring leave by reference to the principles in cl 12 sch 4 of the NCAT Act. Essentially this means that the Appellant must establish that there has been a substantial miscarriage of justice. In our view the Appellant has not established, by reference to the transcript (demonstrating the evidence before the Tribunal and the member's reasons) that there has been a miscarriage of justice. This ground is dismissed.
12. Given the lack of evidence of what occurred at the hearing at first instance there is no basis to consider the Appellant's claim for an order that the Respondent pay a further amount to the Appellant.
13. So far as the Respondent's cross-appeal is concerned, we are of the opinion that that appeal should be dismissed. Our reasons are set out below.
14. The Cross-Appellant submitted that the contract was illegitimate. One reason for making this submission was that the Appellant was not a registered architect. There was no evidence before us to suggest that the contract between the parties was one required by law to have been performed only by a registered architect. The Cross-Appellant also alleged that the Appellant represented to her that he was a registered architect. We have already said that some of the evidence now before us in that respect was not before the Tribunal at first instance and that it is evidence that we think should not be allowed in the appeal. Because of the unreliability of the transcript it is not possible to say that the Tribunal erred in making findings, or not making findings, about this assertion. Even if the representation was made there does not appear to have been evidence as to what loss the Respondent suffered as a result of the breach being inaccurate. For these reasons, this ground of appeal is dismissed.
15. The Cross-Appellant's second ground of appeal was that she claimed that she had not breached the contract. The member found otherwise and the Cross-Appellant has been unable to show, by reference to a reliable transcript of the member's reasons, that the member erred in making such a finding. This ground is dismissed.
16. Grounds 3 and 4 of the Cross-Appellant's appeal submit that the Tribunal failed to properly review the evidence and relied on fabricated evidence. Again, because there is no adequate or reliable record provided to us of the member's reasons, we are not in a position to be able to say that the member in fact relied upon fabricated evidence or did not review the evidence. Again, this ground is dismissed.
17. It follows from the above that the Appellant's appeal should be upheld and an order made to the effect that the whole of the deposit may be retained by the Appellant. The cross-appeal should be dismissed.
18. The orders of the Tribunal are as follows:

(1) The appeal of the Appellant (proceedings 2024/00167683) is upheld.

(2) The orders made in both proceedings (2023/00370768 and 2023/00368831) are set aside.

(3) Subject to these orders the applications in both proceedings (2023/00370768 and 2023/003368831) are dismissed.

(4) The Cross-appeal (proceedings 2024/00280386) is dismissed.

(5) The Appeal Panel declares that the Appellant is entitled to retain the deposit of $10,050.

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.

28 April 2025 - Date of orders and decision amended.