Cynthia Jian Er Huang t/as Auchland and Co v Younes

NCAT Appeal Panel|2019-05-08

Background

This is an internal appeal from a decision made in the Consumer and Commercial Division of this Tribunal on 11 February 2019, that Cynthia Jian Er Huang (trading as Auchland and Co) (the Appellant) pay to Bassem Bou Younes (the Respondent), the sum of $1,374.48.
The application related to the provision of conveyancing services (the services) by the Appellant, who is a licensed conveyancer, to the Respondent in about January 2018. In that application the Respondent successfully argued that the Appellant had failed to appropriately adjust the rates attributed to a property he purchased (the land) on settlement, as between him and the vendor.
The land was part of a subdivision of one larger block into two lots. By the date of completion of the contract, the Council had not issued a separate rate assessment for the land. It was waiting for a valuation to issue in order to do so. The only rating information for the land included the other subdivided lot which was contiguous with it, and was for the period 1 July 2017 to 30 June 2018.
A separate rate assessment for the land issued in March 2018, some two months after completion of the contract.
In essence, the decision made by the Tribunal at first instance relied on a finding, at [9] of the reasons, that the Appellant, as a licensed conveyancer: [I]f acting with due care and skill would have ensured, upon settlement: a. that the Vendor, from the sale proceeds, would have paid all outstanding amounts paid to the Council (sic); and b. retained in trust an amount to pay the vendor's share of any Council Rates that would be separately assessed for the land for the period from 18 October 2017 (the plan registration date) to the date of settlement being 31 January 2018, this would have been dealt with at settlement by the Vendor's solicitors and the Respondent, exchanging undertakings as to how the amount retained would be applied.

The grounds of appeal

The Appellant raises two grounds in the appeal, both of which raise an issue of law for which no leave to appeal is required: s 80(2)(b) Civil and Administrative Tribunal Act 2013 (NSW) ("NCAT Act").
The first is that the application brought by the Respondent was a "conveyancing costs application," a pre-printed form available from the Tribunal which refers to the Conveyancer's Licensing Act 2003 (NSW). That application form is the correct way for a claimant to commence an application to the Tribunal to determine disputes about conveyancing costs.
The Appellant says, correctly, that the application on its face did not raise any dispute about the costs she rendered to the Respondent. The Appellant notes that the matter was determined by the Tribunal on the basis of it being a "consumer claim," under the Fair Trading Act 1987 (NSW) ("FT Act") and that the Tribunal applied the provisions of the Australian Consumer Law (NSW) ("the ACL").
Whilst the grounds of appeal were not succinctly stated, the clear implication was that the Appellant alleges that she was denied procedural fairness due to the Tribunal proceeding in this way and we will determine this ground on that basis: John Prendergast & Vanessa Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69.
The second ground relied upon by the Appellant was an allegation that the finding of the Tribunal, at [9(b)], was made in the absence of evidence, in that the "decision did not obtain or refer to an independent expert (Licensed Conveyancer / Solicitor / Lawyer) any advice or recommended about this matter… (sic)".

The first ground - that the Appellant was denied procedural fairness

This ground can be quickly disposed of. There is nothing uncommon in the Tribunal, within its Consumer and Commercial Division, receiving applications from self-represented applicants which are commenced with the wrong form.
Similarly, it is common for the Tribunal to treat an application in one form as an application in another. Doing so is, in our view, quite proper given the Tribunal's mandate to facilitate the just, quick and cheap resolution of the real issues in the proceedings and to act with as little formality as the circumstances of the case permit according to equity, good conscience, and the substantial merits of the case. The Tribunal may also proceed without regard to technicalities or legal forms: ss 36(1) and 38(4) NCAT Act. In doing so, the Tribunal must be fair to the parties, and must ensure that neither party is unreasonably taken by surprise by it proceeding in that way.
It is apparent that what the Tribunal did was to treat the application for a conveyancing costs dispute as an application for a consumer claim, although that process is not specifically referred to in the reasons.
Mr Ma, who represented the Appellant at both the first hearing and before us, submitted that the Member at first instance made no mention of the ACL or that he might base his decision on a failure by the Appellant to provide services to the Respondent with due care and skill. However, that allegation is not accepted by the Respondent.
Had the Tribunal failed to act transparently and fairly in its decision to proceed to treat the application as a consumer claim, then procedural fairness may not have been afforded to the Appellant: Wells v Mottram [2017] NSWCATAP 42. The Appellant needs to satisfy us that it did so, if she is to succeed on this ground.
Well prior to this hearing, the Tribunal made directions "for the Appellant to lodge with the Tribunal the sound recording of the hearing at first instance, if what happened at the hearing is being relied upon and a typed-copy of the relevant part". The Appellant did not do so. Mr Ma acknowledged that he was aware of that requirement.
In those circumstances, where the Appellant needs to satisfy us that this ground is made out to succeed, and where there is no accepted evidence before us of what transpired at the hearing, this ground must be rejected.

The second ground - that the Tribunal made findings as to what the Appellant should have done in exercising due care and skill, without evidence

The parties agreed that the only evidence received by the Tribunal at first instance, other than the documents relevant to the conveyancing process for the land, was the oral evidence of Mr Younes and Mr Ma.
There was no evidence of an expert nature or from an independent solicitor or conveyancer as to how a rates adjustment should have been undertaken by a licensed conveyancer exercising due care and skill, to support the findings made by the Member. Making findings on no evidence is an error of law but the Tribunal was entitled to make findings available on the evidence before it, and to interpret the requirements of the contract, which was in evidence.
Here, for reasons we will deal with below, it is not apparent what the basis for the Member's finding at [9(b)] was or what evidence he relied upon, in the context of this particular conveyance.
We were unable to identify any clause within the contract, or evidence of any other right or agreement, which would have enabled the Appellant to take the course the Member found it should. On that basis, we are satisfied that the finding at [9(b)] was made without any relevant evidence and that there was otherwise no logical connection between the material in evidence and the conclusions drawn: Minister for Immigration and Citizenship v SZMDS [2010] HCA 16; (2010) 240 CLR 611 at [124]-[125].
We were satisfied that an error of law had been established and that the appeal should be allowed.

Resolution of the application

Having allowed the appeal we may, under s 81(1)(d) of the NCAT Act, set aside the decision and substitute our own, if we decide that is warranted.
There was no suggestion from the parties that the Tribunal would benefit from any fresh or further evidence in re-determining the application and none was filed. We were satisfied that we should proceed to determine the matter and substitute the decision set aside with our own.
We firstly decided to treat the application for a conveyancing costs dispute as an application for a consumer claim. Clearly, there could be no proper argument that the Appellant could be caught by surprise in us doing so, given the history of the matter we have referred to above.
We had before us the following relevant evidence: 1. a partial copy of the contract for the sale of the land which included standard condition 14 of that contract, in the 2017 edition; 2. the settlement adjustment sheet prepared by the Appellant for the Respondent on sale; 3. a receipt from the Cumberland Council, showing that the amount of $2,386.16, being the amount levied on the vendor for the un-subdivided lots for the period 2017-2018 was paid on settlement; 4. the rates which were issued for the land after completion, through to 30 June 2018.
The claim is based on the consumer guarantee provisions of the ACL. In a consumer claim, s 60 of the ACL implies into any contract between a supplier and a consumer of services in NSW that the services will be provided with "due care and skill," that is, a guarantee that the services will be performed in a careful, skilful, and workmanlike manner.
On a finding that the services were not rendered with due care and skill, the Tribunal has power, pursuant to s 79N(a) of the FT Act, to order the Appellant to pay the Respondent a specified amount of money. The amount ordered should be that which would put the party in the position it would have been had the services been rendered with due care and skill: Clark v Macourt (2013) 304 ALR 220.
There was no dispute, and we are satisfied, that the dispute between these parties constitutes a consumer claim as defined in s 79E of the FT Act. It relates to the Appellant as a supplier, rendering services for payment to the Respondent as consumer, in NSW: ss 79(D) and 79(G) of the FT Act. The claim was made within time: s 79(L) of the FT Act.
The parties did not address us on whether a licensed conveyancer is a "professional," as that term is used in the Civil Liability Act 2002 (NSW). If they are, Div 6 of Pt 1A of that Act would be engaged. We do not see a need to determine that issue here. On the evidence before us, we are satisfied that the application of that Division of the Act would not affect the outcome in this matter.
Mr Ma acknowledged that a conveyancer acting with reasonable care and skill in providing the services would follow the terms of the contract, and in particular standard condition 14, when calculating adjustments of rates for a client on settlement.
We asked Mr Younes what he says the Appellant should have done in calculating his rates. Whilst his general allegation was that she should have ensured that he was fully protected for all of the rates levied against him up to the date of settlement including a back-dated adjustment of the rates issued for the land in March which were levied at a greater dollar per land area basis after the lots were subdivided, he was unable to point us to any evidence or clause in the contract that showed that this course should have been followed.
We were, therefore, not satisfied that the obligation of the Appellant in calculating the rates adjustment went any further than the proper application of due care and skill in completing the calculation in accordance with standard condition 14 of the contract.
The relevant sections of that condition are set out below, with our findings on their application to this matter:

14.2 - The parties must make any necessary adjustment on completion

This clause provides that the Appellant must make any adjustments with the vendor on the date of completion. It did so.
The finding by the Member that an amount should have been retained in trust for a later adjustment, whilst it may constitute common or even prudent conveyancing practice where agreed, is not authorised by clause 14.2 in the absence of some other agreement or condition of the contract which was not referred to in the reasons or in evidence before us.
We then examined the calculation made by the Appellant of the rates adjustment at settlement, as evidenced by the settlement sheet.
The calculation by the Appellant was made based on the amount paid by the vendor for the outstanding rates on settlement, in the sum of $2,386.11, and allowed 150 days to the vendor out of the 365 days of the rates assessment period. It was properly calculated in the amount of $980.61.
Standard condition 14.5 then has to be given effect. It states:

if any other amount that is adjustable under this contract relates partly to the land and partly to other land, the parties must adjust it on a proportional area basis.

No such further adjustment was made by the Appellant. Mr Ma, himself a licensed conveyancer, told us that it was not the usual practice when undertaking conveyancing settlements to do so. He was unable to explain why that was the case, though, when referred to the text of condition 14.5.
Patently, the parties to the conveyance were bound by the contract they entered into. Under that contract, on a clear reading of clause 14.5, the Respondent was entitled to a further adjustment of the rates in the proportion of the area of the land to the area of the larger parcel of un-subdivided land that the rates notice applied to. That proportion, by area, was 329.4/700.8 sqm.
Applying that further adjustment, we were satisfied that the Respondent, on the calculation made by the Appellant, overpaid the vendor the sum of $519.73 on settlement.
Given the concession made by the Appellant that a conveyancer acting with due care and skill would complete the calculations in accordance with the contract and where we have found that the Appellant did not do so, we find that the failure to act with due care and skill caused the overpayment, and that the rates adjustment calculation was part of the services and within the scope of appellant's duty to the Respondent. We find that a money order should be made, which provides for the amount calculated by us as overpaid on settlement to be paid by the Appellant to the Respondent.
Under the terms of the initial order, though, and by a stay granted by this Tribunal on 20 March 2019, the sum of $1,374.48 (the amount ordered to be paid under the decision at first instance) is currently held by the Registrar.
On that basis, the orders we make are: 1. The appeal is allowed. 2. That the monies held by the Registrar in matter number GEN18/43740 be distributed as follows: 1. As to $519.73 - to the Respondent, Bassem Bou Younes; 2. As to the balance - to the Appellant.

Are there special circumstances warranting an award of costs?

There was no application for costs on the initial application or the appeal made by the Respondent, who acknowledged that there are no special circumstances in relation to his application or the appeal, as required before an order for costs will be made: s 60(2) of the NCAT Act.
Mr Ma sought the Appellant's filing fee paid on the Notice of Appeal. He says that the special circumstances warranting an order for costs were that the Appellant had written to the Respondent on a number of occasions, suggesting that they could write to the vendor asking for a refund of any amounts overpaid. He says those letters attached evidence that this has happened on three other occasions, involving other conveyances. We are not satisfied that that constitutes special circumstances for the following reasons: 1. the vendor is not required by the contract to pay any refund; 2. there is no evidence that the vendor would be willing to do so in relation to this contract; and 3. the Appellant has only been partially successful in relation the appeal.
There will be no order as to costs.

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: 19 June 2019

Conveyancer's Licensing Act 2003(NSW)

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