Cannuli v Altitude Property Pty Ltd trading as Altitude Property - [2022] NSWCATCD 101 - NSWCATCD 2022 case summary — Zoe

NSWNSWCATCD

Cannuli v Altitude Property Pty Ltd trading as Altitude Property

[2022] NSWCATCD 101

NCAT Consumer and Commercial|2022-06-29|Before: Mr P

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At a glance

Source facts

Court

NCAT Consumer and Commercial

Decision date

2022-06-29

Before

Mr P

Source

Original judgment source is linked above.

Judgment (13 paragraphs)

[1]

Background

On 18 January 2021 the applicant entered into an agency agreement with the respondent in relation to the sale of her property which provided for commission of "2% + GST (50% Paid on Exchange subject to the deposit being released by the purchaser)".
In March 2021 the applicant signed Heads of Agreement with an intending purchaser, who paid a non-refundable amount of $37,500. On 23 June 2021 the applicant signed a Deed of Put and Call Option (the Deed) with Norwest Garden Development Pty Ltd as trustee for Norwest Garden Development Unit Trust (Norwest) which included a provision for the payment of a security deposit of $1,500,000, being 10% of the purchase price.
Under clause 6.2 of the Deed, that security deposit was to be released to the applicant's lawyer and applied to discharge the applicant's mortgage. Around 29 July 2021 that occurred in that the security deposit was paid, part of which was used to discharge a mortgage over the property.
Under clause 6.3 of the Deed, if either the Call Option or the Put Option were exercised, the security deposit would become the deposit, being 10% of the purchased price, but paragraph (d) of clause 6.3 set out four situations in which the applicant would become obliged to refund the security deposit.
On 20 October 2021 the applicant received an invoice from the respondent which sought $165,000 ($150,000 plus GST) as part payment of commission. As a result, the applicant commenced these proceedings, seeking an order that the respondent was not entitled to the whole or any part of that amount.

[2]

[4]

Relevant law

In the Property, and Stock Agents Act 2002 (PSAA), s 36, so far as is presently relevant, provides: (4) A person who is served with a statement of claim under this section or is provided with an itemised account of a transaction as provided by this section may apply to the Tribunal for the determination of a consumer claim within the meaning of Part 6A of the Fair Trading Act 1987 in relation to- (a) the entitlement of the licensee to the whole or any part of the amount specified in the statement of claim or the itemised account, or (b) whether the whole or any part of the amount is reasonable, or both. (5) For the purpose of the application of Part 6A of the Fair Trading Act 1987 to that person, a reference in that Part to a consumer is taken to include a reference to that person. (6) The Tribunal has jurisdiction to hear and determine any such consumer claim despite- (a) the terms or conditions of any agreement or contract entered into between the licensee and the applicant, and (b) the amount being more or less than the maximum amount (if any) of remuneration to which a licensee is entitled under this Act. (7) This section does not limit Part 6A of the Fair Trading Act 1987. (8) In this section- expenses means expenses or charges incurred in connection with services performed by a licensee in his or her capacity as a licensee. remuneration means remuneration by way of commission, fee, gain or reward for services performed by a licensee in his or her capacity as a licensee.
After setting out requirements for an agency agreement in s 55, s 55A of the PSAA provides as follows: (1) A court or tribunal before which relevant proceedings are taken may order that commission or expenses are wholly or partly recoverable by a licensee who would otherwise not be entitled to the commission or expenses (under section 55) because of- (a) a failure by the licensee to serve a copy of the relevant agency agreement on the person within 48 hours after it was signed by or on behalf of the person, or (b) a failure of the relevant agency agreement to comply with the requirements of the regulations. (2) A court or tribunal is not to make such an order in circumstances of a failure to serve a copy of the agency agreement within the required time unless satisfied that- (a) the failure was occasioned by inadvertence or other cause beyond the control of the licensee, and (b) the commission or expenses that will be recoverable if the order is made are in all the circumstances fair and reasonable, and (c) failure to make the order would be unjust. (3) A court or tribunal is not to make such an order in circumstances of a failure of the agency agreement to comply with the requirements of the regulations unless satisfied that- (a) the failure is a minor failure, and (b) no loss has been suffered as a result of the failure by the person for whom or on whose behalf the services concerned were performed, and (c) failure to make the order would be unjust. (4) Proceedings are relevant proceedings if they are proceedings taken by a licensee for the recovery of commission or expenses from a person or proceedings on a consumer claim relating to commission or expenses (as referred to in section 36) in relation to which a licensee is a respondent.
The orders which can be made by the Tribunal in favour of a respondent are set out in s79O of the Fair Trading Act 1987 (FTA) which is quoted below: In determining a consumer claim wholly or partly in favour of a respondent to the claim, the Tribunal may make any one or more of the following orders that it considers appropriate: an order dismissing the claim or a part of the claim, an order that requires the claimant to pay to the respondent a specified amount of money, (c) an order that requires the claimant to return to the respondent specified goods which are in the possession or under the control of the claimant, whether the property in the goods has passed or not.
By reason of s 28 of the FTA, the Australian Consumer Law (ACL) is part of the law of New South Wales. Within the ACL, s 18(1) reads: A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

[5]

Respondent's submissions

After referring to the decision of the High Court in Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7 (Waltons), in which it was held that promissory estoppel could be a cause of action and was not confined to be an equitable defence, it was indicated that the respondent wished to raise promissory estoppel not only as a defence but also as a claim. Four reasons were advanced in support of the contention that the Tribunal does not have jurisdiction to determine such a claim.
First, that s 6 of the Law Reform (Law and Equity) Act 1972 only confers on "inferior courts" jurisdiction to decide equitable defences. Secondly, that the relevant Second Reading Speech, extracted by the Supreme Court in Steak Plains Olive Farm Pty Ltd v Australian Executor Trustees Limited [2015] NSWSC 289 (Steak Plains SC) at [69], provided support for that construction.
Thirdly, that the report of the Law Reform Commission of New South Wales with the title and reference Law and Equity [1971] NSWLRC 13, also extracted in Steak Plains at [70], noted that if s 6 did not apply to all inferior courts the rights of the parties may depend on the plaintiff's choice of court which would be unfair to a defendant unable to raise a defence because of the forum chosen by the plaintiff. That report was said to expressly state that what became s 6 is concerned only with defences.
Fourthly, it was submitted that, while the Tribunal does have jurisdiction to consider an equitable defence, it cannot consider a claim for equitable relief and what was said in Steak Plains at [75] and [77] and Bushby v Dixon Homes du Point Pty Ltd [2010] NSWSC 234 (Bushby) at [44] was cited in support of that submission.
In response to the direction to address s 79O of the FTA, it was said that the respondent put its case in four ways: 1. a claim of entitlement to the amount claimed based on an express or alternatively an implied termed in the agency agreement, 2. an allegation that the applicant repudiated the agency agreement, 3. a contention that the applicant is estopped from denying the respondent's entitlement to the amount claimed, and 4. a contravention of s 18 of the ACL based on an alleged representation of the applicant constituting misleading and deceptive conduct.
The respondent accepted that the Tribunal had jurisdiction to consider the first, second and fourth claims but suggested the Tribunal does not have jurisdiction in relation to the third with the contended result that the Tribunal did not have jurisdiction to make an order in favour of the respondent for the amount claimed pursuant to s 79O of the FTA. That was said to arise because the claim based on promissory estoppel would only become relevant if the Tribunal found that the respondent is not otherwise entitled to be paid the amount it claimed in its invoice which is the subject of these proceedings.
In short, the respondent contended that transferring these proceedings to the Supreme Court was the only way in which all issues raised may be determined.
Additional matters raised in oral submissions were a reference to Steak Plains Olive Farms Pty Ltd v Australian Executor Trustee Limited [2014] NSWCATAP 85 (Steak Plains AP) at [59], [70] and [71]. It was noted that, in that case, it was held that the Agricultural Tenancies Act 1990 provided sufficient power.
A submission was made that if the applicant's claim that it was not required to pay the respondent's invoice prevailed, that would not mean that the applicant would be required to pay that invoice which was why the respondent required a positive remedy of a kind which the Tribunal did not have jurisdiction to consider. It was contended that, as a result, the proceedings should be transferred so the full ambit of the respondent's claims could be considered.

[8]

Consideration

In applications relating to claims for the payment of commission by real estate agents, it is not uncommon for the proceedings to involve a claim by a vendor challenging the entitlement of the real estate agent to claim commission. That plainly raises the question of what happens if the vendor fails.
There are two statutes which cater for that situation. In the context of a claim by an agent for commission, s 55A(4) in the PSAA provides that "relevant proceedings" includes proceedings commenced by a consumer such as the applicant in these proceedings. As a result, both s 55A(1) and s 36(4) of the PSAA clothe the Tribunal with the power to determine the respondent's entitlement to the whole or part of the commission under consideration. That must enable the Tribunal to decide either in favour of the applicant or in favour of the respondent and not just against the applicant, leaving the respondent to litigate afresh.
That position is reinforced by a provision in the FTA which is of more general application, namely s 79O, which provides the power, in paragraph (b), for the Tribunal to make an order, in proceedings commenced by the applicant, for the payment of money to the respondent. There are sound practical reasons for such a statutory provision: when an applicant claims not to be liable to pay a sum of money to a respondent, a successful respondent should not then be required to commence proceedings against the applicant for the payment of that amount when there has already been a hearing and determination of that issue.
The cross-claim sets out four causes of action, the third being estoppel. There is no suggestion that the respondent is not entitled to raise and pursue in the Tribunal the other three causes of action. Nor is there any dispute that the Tribunal does have the power to consider equitable defences but not equitable claims, a topic recently considered by an Appeal Panel in Pongrass v Small [2021] NSWCATAP 314 at [61] - [81].
However, it must be observed that the section headed "Estoppel" in the Cross Claim, namely [19] - [24], is identically worded to the section with that heading in the Defence, being [10] - [15]: only the paragraph numbers differ. Accordingly, the first reason why the respondent's claim based on estoppel does not add to these proceedings is that if its estoppel defence succeeds then the respondent's estoppel claim will succeed by reason of the abovementioned statutory provisions without any need to rely on that estoppel claim.
A second reason why the respondent's estoppel claim is superfluous is that the allegations made overlap the respondent's claim based on s 18 of the ACL, reflected in the Cross Claim, at [16], relying upon the conduct alleged in [10].
Just as in Steak Plains AP at [29], where it was determined that "the Tribunal has power to grant relief which is sufficient to resolve the dispute between the parties, and to grant relief in the nature of relief against forfeiture", in this case the Tribunal has the power to grant relief which is sufficient to resolve the dispute between these parties and to grant relief in the nature of a successful claim for estoppel.
Simply stated, if the respondent succeeds in estoppel defence then the operation of the statutory provisions referred to above will provide the outcome it seeks without the need to rely on its identically worded estoppel claim and if the factual aspects upon which that claim is based are made out then the respondent would be entitled to relief under s 18 of the ACL. Either way, the respondent will be able to achieve the outcome it seeks without needing to rely on its estoppel claim. Metaphorically speaking, the respondent has two routes which lead to the same destination which places these proceedings in the same situation as in the Steak Plains litigation in that the Tribunal is able to provide relief in the nature of equitable relief.

[9]

Costs

The respondent contended that the costs of its application for transfer should be costs in the cause, which would mean that the costs of this application become part of the proceedings with the result that such costs depend on the outcome of the substantive application. Since the amount claimed or in dispute exceeds $30,000, the costs of these proceedings will be determined by r 38(2)(b) of the Civil and Administrative Tribunal Rules 2014 and not by s 60 of the Civil and Administrative Tribunal Act 2013. Accordingly, the ultimately successful party would be entitled to recover the costs of this transfer application from the ultimately unsuccessful party.
The applicant submitted that, if a transfer order was made, then the costs of the transfer application should be costs in the cause but that if the application was refused the respondent should be ordered to pay the applicant's costs of the transfer application as that application was a discrete event.
In proceedings governed by r 38(2)(b), a successful party is entitled to recover costs unless there are disentitling circumstances. As the respondent has caused the applicant to incur costs of an application which has been unsuccessful, the Tribunal considers its discretion should be exercised in favour of an order for costs being made in favour of the applicant in respect of the application to transfer.
The question then becomes whether the applicant should be entitled to enforce that order now or await the conclusion of the proceedings. That issue was considered in Fiduciary Limited v Morningstar Research Pty Ltd [2002] NSWSC 432 which was followed and applied in Gaynor v Burns [2015] NSWCATAP 150 ag [65] - [68]. The relevant considerations are: (1) whether the matter involved the determination of a separately identified matter, (2) whether there was unreasonable conduct by the party against whom costs have been awarded, and (3) an anticipated length delay before the proceedings will be concluded.
In this case, the transfer application is a separately identified matter, the outcome of the application was clear, and the proceedings are in their infancy in that pleadings have been filed but no evidence and no hearing date has been allocated. As the Tribunal's hearing dates have already been allocated up to and including November 2022, and since it is likely these proceedings will involve a reserved decision, the delay before these proceedings can be concluded is likely to be substantial by reference to the time frame of matters litigated in the Tribunal. For those reasons, the Tribunal considers that the order for costs should enforceable forthwith.
It remains to consider what directions should be made in order to progress this application to a final hearing.

[11]

Orders

For the reasons indicated above, the following orders are made: 1. The respondent's application to transfer the proceedings to the Supreme Court of New South Wales is dismissed. 2. The respondent is to pay the applicant's costs of the application to transfer, on the ordinary basis, as agreed or assessed. 3. For the avoidance of doubt, order 2 may be enforced forthwith. 4. The respondent is to file and serve a cross-application on or before 12 July 2022, including Points of Claim. 5. If the Points of Claim served in response to order 4 differ from what appears in the Cross-Claim received by the Tribunal on 4 March 2022, the applicant is to file and serve Points of Defence on or before 27 July 2022. 6. This application and that cross-application are to be listed and heard together with the evidence in either application being evidence in both applications. 7. On or before 27 July 2022 the applicant is to file and serve the documents upon which the applicant intends to rely at the hearing, in support of the application, with pages numbered and an index. 8. On or before 24 August 2022 the respondent is to file and serve the documents upon which the respondent intends to rely, both in response to the application and in support of the cross-application, with pages numbered and an index. 9. On or before 7 September 2022 the applicant is to file and serve the documents upon which the applicant intends to rely at the hearing, in response to the cross-application, with pages numbered and an index. 10. The registry is to list the matter for hearing, with a time allocation of one day, on or after 14 September 2022. 11. On or before 8 July 2022 the solicitors for the parties are to advise the Tribunal, by email, with a list of unavailable dates during the period from 14 September to 23 December in 2022 and 9 to 31 January in 2023. 12. No later than seven days prior to the hearing, each party is to (a) notify the other party of any witness(es) required to attend the hearing for cross-examination, and (b) file and serve outline submissions. 13. The documents provided in response to orders 4, 5, 7, 8, 9 and 12(b) are to be filed in hard copy form but may be served in electronic form. 14. In the event of any inability of a party to comply with orders 7, 8 or 9, that party is to notify the Tribunal in writing of its request for an extension of time prior to the due date, including details of the extension sought and the reasons why that extension is sought.