Forbes v Wan

NCAT Appeal Panel|2020-05-21|Before: Blake AM

Introduction

This is an internal appeal from a decision of the Consumer and Commercial Division of the Tribunal made on 26 February 2020.
At that time the Tribunal made the following orders: "1. Jeffrey Feng and Callum Forbes are jointly and severally ordered to pay the amount of $7,049.64 to Chenyang Wan within 28 days of the date of this order; 2. the application is otherwise dismissed."
Callum Forbes (hereafter "Mr Forbes"), the appellant, appeals that decision asserting various matters in the Notice of Appeal which during the hearing were refined, as set out below.
For the reasons that follow we allow the appeal, in part.

Tribunal proceedings and decision

The home unit was purchased by Ms Wan in January 2018. She engaged ACPM as the managing agent and it provided a rental guarantee as well. In summary, Ms Wan claimed that: 1. in the Agreement, ACPM gave a guarantee that the net rental return would be 6% per annum of the purchase price which was never paid; 2. funds for certain utility accounts were deducted from monthly receipts but not paid; 3. the furniture initially purchased for the unit was promised to be of high quality but was in fact of lower quality; 4. it was represented that the tenants would pay for damage to the property but this did not occur and the damage was not repaired; 5. it was represented that the property would be cleaned after each tenant but no cleaning was provided; 6. after termination, when the keys were returned, some were missing involving their replacement cost; 7. there was an excessive monthly fee for internet service.
At the hearing of the matter on 16 October 2019, Ms Wan and Mr Forbes appeared in person. There was no appearance for Mr Feng.
Ms Wan's evidence was documentary. No cross-examination of her occurred (refer to para 81), nor it appears of Mr Forbes.
The Tribunal reasons record that Ms Wan's evidence about the representation made to her were in her affidavit. She communicated with "Dean" via a social app called "WeChat". They communicated in the Chinese language. Her affidavit contained screenshots of WeChat text conversations which she translated herself into English. Mr Forbes complains of the lack of a formal translation and we will return to this shortly.
The reasons did not recount any evidence of dealings directly between Ms Wan and Mr Forbes. The only connection with Mr Feng was that his signature appeared on the Agreement on behalf of ACPM. Ms Wan submitted, in her oral submissions to the Appeal Panel, that she did have direct dealings with Mr Forbes and Mr Feng throughout the transaction. She told the Appeal Panel there was evidence about direct contact she had with them but, if correct, it must have been in verbal answers she gave to the Tribunal's questions. The Appeal Panel was not provided with a transcript or sound recording despite directions made in the appeal on 7 April 2020 (by Principal Member Suthers) ordering the parties to file any evidence on which they wish to rely in the appeal by particular dates. The Appeal Panel decided it could not have regard to the material asserted by Ms Wan as evidence of direct dealings with Mr Forbes.
The Tribunal accepted that evidence and submissions were made on behalf of both Mr Forbes and Mr Feng, although Mr Feng did not appear. The Tribunal accepted that the submissions applied to both Mr Feng and Mr Forbes, although confusingly, they mostly only refer to Mr Feng. They submitted: 1. the Agreement was made with ACPM and Mr Feng signed the contract on behalf of ACPM as corporate licensee under the PSBA Act. The directors do not become personally liable. ACPM is the proper party; 2. the Directors were not involved for the purposes of the ACL. There is no evidence that Mr Feng knew of the alleged misrepresentations and was not "knowingly concerned"; 3. the Tribunal did not have jurisdiction because the relevant services were supplied in Queensland and that it was not the proper forum because if the allegation was of misappropriation of trust funds then a claim should be made to the Queensland property compensation fund.

The Tribunal's Reasons

In its written reasons the Tribunal sets out details of the application and the history of the proceedings including the details of the orders made at directions hearings. The reasons record the evidence and submissions.
Regarding jurisdiction, in its orders made on 16 October 2019, the Tribunal found it had jurisdiction to hear and determine this claim. There is no appeal from this part of the decision and the Appeal Panel will not consider it further. Similarly, the Tribunal accepted that New South Wales legislation (the PSBA Act) applied though the property was located in Queensland and we will not consider this further.
The evidence of Ms Wan was accepted (para 82). However, the Tribunal noted (at para 54) that even if it accepts Ms Wan's evidence to the fullest extent, she is not able to shine much light on the internal workings of AC and its subsidiaries.
The Tribunal evidence included the administrator's reports (at para 63) where it was recorded that Mr Forbes was responsible for the day-to-day management and operations of AC and ACPM. This was denied by M Forbes but the factual findings made at para 65 were that Mr Forbes was responsible for the day-to-day management and operations of AC and ACPM. Ms Wan had submitted that, although Mr Forbes was not relevantly licensed at the relevant times, he in fact handled the management of the properties and therefore performed the functions of a real estate agent, therefore, it was submitted, Mr Forbes was in breach of s 8(1) of the PSBA Act.
The Tribunal found (at para 66) that Mr Feng failed to comply with his duties as licensee under the PSBA Act.
The critical findings for the purposes of this appeal are located at paras 71 to 74 as follows: "71 The PSBA Act is consumer protection legislation imposing strict duties on real estate corporations and licensees with respect to the management of their clients' trust monies. I find the legislative regime in the PSBA Act is an industry code of practice for the purposes of s. 21 and s. 22(1)(g) of the ACL. 72 I find that Mr Forbes and Mr Feng engaged in conduct in the supply of the services pursuant to the Rental Guarantee and Agency Agreement that was in all the circumstances unconscionable, in breach of s. 21(1)(a) of the ACL. The relevant matter in determining that Mr Forbes and Mr Feng contravened s. 21 of the ACL is the conduct in complying with, or rather failing to comply with, the terms and conditions of the contract pursuant to section 22(1)(j)(iii) of the ACL. 73 I find that the failure of both Mr Forbes and Mr Feng to properly manage the applicant's property pursuant to the agreement as described in the Administrators Report in paragraphs 58 to 0 (sic should be "60") above was outside societal norms of acceptable commercial behaviour, resulting in severe mismanagement of the applicant's property. 74 Mr Feng's liability is obvious as he was at all relevant times the licensed real estate agent. In my opinion Mr Forbes is also liable for the reason that as the director with the day today management of both AC and ACPM he was acting, albeit illegally, as the real estate agent as well."
At paras 78 to 106, the Tribunal went on to make determinations regarding quantum. There is no appeal regarding these findings and the Appeal Panel will not consider them further, but notes the final order (at para 107) was that Mr Forbes and Mr Feng were both involved in the contraventions of s.18 and s. 21 of the ACL and as a result Ms Wan has suffered a loss of $7,049.64.

Scope and nature of internal appeals

Internal appeals may be made as of right on a question of law, and otherwise with leave (that is, the permission) of the Appeal Panel: s 80(2)(b) of the Civil and Administrative Tribunal Act 2013 (NSW) (hereafter "NCAT Act").
In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel set out at [13] a non-exclusive list of questions of law: 1. whether there has been a failure to provide proper reasons; 2. whether the Tribunal identified the wrong issue or asked the wrong question; 3. whether a wrong principle of law had been applied; 4. whether there was a failure to afford procedural fairness; 5. whether the Tribunal failed to take into account relevant (i.e., mandatory) considerations; 6. whether the Tribunal took into account an irrelevant consideration; 7. whether there was no evidence to support a finding of fact; and 8. whether the decision is so unreasonable that no reasonable decision-maker would make it.
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 Sch 4 of the NCAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that: 1. the decision of the Tribunal under appeal was not fair and equitable; or 2. the decision of the Tribunal under appeal was against the weight of evidence; or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
In Collins v Urban [2014] NSWCATAP 17 (Collins v Urban), the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Schedule 4 may have been suffered where: "… there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance."
Even if an appellant from a decision of the Consumer and Commercial Division 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) of the NCAT Act.
In Collins v Urban, the Appeal Panel stated at [84] that ordinarily it is appropriate to grant leave to appeal only in matters that involve: "(a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) 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."

Submissions and evidence

In deciding the appeal, we have had regard to the following: 1. the Notice of Appeal; 2. the Reply to Appeal; 3. Mr Forbes' written submissions; 4. orders made by the Tribunal including directions; 5. the Tribunal's decisions at first instance; 6. the original application to the Tribunal.
We did not receive any written submissions from Ms Wan who did not provide any documents in the appeal.
We have also had regard to the oral submissions made by Mr Forbes and Ms Wan.

The Notice of Appeal

The appeal was commenced within time.
Mr Forbes submits the Tribunal's decision was not fair and equitable, was against the weight of evidence and that significant new evidence is now available that was not reasonably available at the time of the hearing. The stated grounds for appeal do not raise an error of law specifically but do argue that error arose in failing to follow the reasoning of Member French in the matter of Chen v Feng to which the Tribunal had referred.
In Cominos v Di Rico [2016] NSWCATAP 5, the Appeal Panel stated at [13]: "13. It may be difficult for self-represented appellants to clearly express their grounds of appeal. In such circumstances and having regard to the guiding principle, it is appropriate for the Appeal Panel to review an appellant's stated grounds of appeal, the material provided, and the decision of the Tribunal at first instance to examine whether it is possible to discern grounds that may either raise a question of law or a basis for leave to appeal. The Appeal Panel has taken such an approach in a number of cases, for instance, Khan v Kang [2014] NSWCATAP 48 and Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69. However, this must be balanced against the obligation to act fairly and impartially (Bauskis v Liew [2013] NSWCA 297 at [68] citing Hamod v State of New South Wales [2011] NSWCA 367 at [309]-[316]). Relevantly, s 38(2) provides that that Tribunal "may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice."
The Appeal Panel is satisfied that Mr Forbes has raised a question of law by submitting that the reasoning the Chen v Feng should be preferred.
After discussion in the hearing the Mr Forbes' grounds can be stated as: 1. error in the test used to determine whether unconscionable conduct occurred; 2. error in the test used to determine the representations were misleading or deceptive; and whether Mr Forbes had sufficient connection or was sufficiently involved to satisfy the test in the ACL; 3. whether there had been a breach of the PSBA Act by Mr Forbes; 4. the decision of the Tribunal was not fair and equitable, against the weight of the evidence; and significant new evidence has arisen that was not reasonably available at the hearing.
The questions whether the Tribunal applied an incorrect test raise errors of law.
Mr Forbes seeks orders in the Notice of Appeal that both he and Mr Feng not be liable for the amount under rental guarantee ($5,527.04). However, at the Appeal Panel hearing Mr Forbes was clear that he was not speaking on behalf of Mr Feng and had not talked to him or obtained his consent to bring the appeal on his behalf. Accordingly, there is no appeal from the orders by Mr Feng and whatever the outcome of the appeal, the orders against Mr Feng will be unaffected.
Further, at the Appeal Panel hearing Mr Forbes was clear that he disputed liability for all the amounts he was ordered to pay, not just under the rental guarantee. After discussion, the Appeal Panel accepted this as consistent with his other submissions.
In respect to the other grounds raised, however, as no question of law is raised and the appellant seeks to rely on his assertion that the decision was not fair or equitable or against the weight of the evidence, leave is required: s 80(2)(b) and cl 12 of Sch 4 of the NCAT Act.
Ms Wan submitted there was no error in the Tribunal's reasons. The representations were misleading and deceptive and Mr Forbes was involved. She said the Tribunal was entitled to rely on the administrator's report because it was a "legal document". It showed that AC and ACPM were not doing the right thing. Regarding misrepresentations, the Tribunal was entitled to rely on the WeChat texts as evidence. Ms Wan said, that just because the outcome in the decision under appeal was different to Chen v Feng, it does not mean it is wrong.

The applicable provisions of the ACL

Before turning to the grounds of appeal we have set out the applicable provisions of the ACL.
The ACL is part of the law of New South Wales and may be applied in the determination of a consumer claim made under Part 6A of the FT Act; see s 28 of the FT Act. Chapter 2 of the ACL contains a number of general protections for consumers in consumer transactions, including s 18, a prohibition against misleading and deceptive conduct and in s 21 a prohibition against unconscionable conduct.
The relevant parts of those sections follow: 18 Misleading or deceptive conduct (1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. (2) Nothing in Part 3-1 (which is about unfair practices) limits by implication subsection (1). 20 Unconscionable conduct within the meaning of the unwritten law (1) A person must not, in trade or commerce, engage in conduct that is unconscionable, within the meaning of the unwritten law from time to time. (2) This section does not apply to conduct that is prohibited by section 21. 21 Unconscionable conduct in connection with goods or services (1) A person must not, in trade or commerce, in connection with: (a) the supply or possible supply of goods or services to a person; or (b) the acquisition or possible acquisition of goods or services from a person; engage in conduct that is, in all the circumstances, unconscionable. (2) ...(4) 22 Matters the court may have regard to for the purposes of section 21 (1) Without limiting the matters to which the court may have regard for the purpose of determining whether a person (the supplier ) has contravened section 21 in connection with the supply or possible supply of goods or services to a person (the customer ), the court may have regard to: (a) the relative strengths of the bargaining positions of the supplier and the customer; and (b) … (f); and (g) the requirements of any applicable industry code; and (h) the requirements of any other industry code, if the customer acted on the reasonable belief that the supplier would comply with that code; and (i) the extent to which the supplier unreasonably failed to disclose to the customer: (i) any intended conduct of the supplier that might affect the interests of the customer; and (ii) any risks to the customer arising from the supplier's intended conduct (being risks that the supplier should have foreseen would not be apparent to the customer); and (j) if there is a contract between the supplier and the customer for the supply of the goods or services: (i) the extent to which the supplier was willing to negotiate the terms and conditions of the contract with the customer; and (ii) the terms and conditions of the contract; and (iii) the conduct of the supplier and the customer in complying with the terms and conditions of the contract; and (iv) any conduct that the supplier or the customer engaged in, in connection with their commercial relationship, after they entered into the contract; and (k) without limiting paragraph (j), whether the supplier has a contractual right to vary unilaterally a term or condition of a contract between the supplier and the customer for the supply of the goods or services; and (l) the extent to which the supplier and the customer acted in good faith.
Chapter 1 of the ACL deals with introductory matters including misleading representations with respect to future matters in s 4.
Section 4 of the ACL provides: 4 Misleading representations with respect to future matters (1) If: (a) a person makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act); and (b) the person does not have reasonable grounds for making the representation; the representation is taken, for the purposes of this Schedule, to be misleading. (2) For the purposes of applying subsection (1) in relation to a proceeding concerning a representation made with respect to a future matter by: (a) a party to the proceeding; or (b) any other person; the party or other person is taken not to have had reasonable grounds for making the representation, unless evidence is adduced to the contrary. (3) To avoid doubt, subsection (2) does not: (a) have the effect that, merely because such evidence to the contrary is adduced, the person who made the representation is taken to have had reasonable grounds for making the representation; or (b) have the effect of placing on any person an onus of proving that the person who made the representation had reasonable grounds for making the representation. (4) Subsection (1) does not limit by implication the meaning of a reference in this Schedule to: (a) a misleading representation; or (b) a representation that is misleading in a material particular; or (c) conduct that is misleading or is likely or liable to mislead; and, in particular, does not imply that a representation that a person makes with respect to any future matter is not misleading merely because the person has reasonable grounds for making the representation.

Ground 1 - incorrect test - unconscionable conduct

The meaning of the term unconscionable conduct was recently considered by the High Court in Australian Securities and Investments Commission v Kobelt (2019) 368 ALR 1; [2019] HCA 18 (Kobelt). That case concerned the use of the term in s 12CB(1) of the Australian Securities and Investment Commission Act 2001 (Cth); however, the proscription of unconscionable conduct in that section is identical to the proscription contained in s 21 of the ACL. At [14] and [15] of the judgement Keifel CJ and Bell J (who participated in the majority) state as follows (footnotes and references omitted): "14 The term "unconscionable" is not defined in the ASIC Act and is to be understood as bearing its ordinary meaning. The proscription in s 12CB(1) is of conduct in connection with the supply of financial services that objectively answers the description of being against conscience. The values that inform the standard of conscience fixed by s 12CB(1) include those identified by Allsop CJ in Paciocco v Australia and New Zealand Banking Group Ltd: certainty in commercial transactions, honesty, the absence of trickery or sharp practice, fairness when dealing with customers, the faithful performance of bargains and promises freely made, and: "the protection of those whose vulnerability as to the protection of their own interests places them in a position that calls for a just legal system to respond for their protection, especially from those who would victimise, predate or take advantage". 15 It is the application of the last-mentioned value with which the appeal is concerned. In Kakavas v Crown Melbourne Ltd and Thorne v Kennedy it was said that a conclusion of unconscionable conduct requires not only that the innocent party be subject to special disadvantage, but that the other party must also unconscientiously take advantage of that special disadvantage. This has variously been described as requiring victimisation, unconscientious conduct or exploitation."
In the same case Gageler J (one the majority) stated at [89]-[93]: "89 Parliament's appropriation of that terminology in s 12CB shorn of the constraints of the unwritten law is indicative of an intention that conduct of the requisite gravity need not be found only in a fact-pattern which fits within the equitable paradigm of a stronger party to a transaction exploiting some special disadvantage which operates to impair the ability of a weaker party to form a judgment as to his or her best interests. The requirement to administer the standard in the totality of the circumstances taking account of the considerations identified in s 12CC is a further indication that the standard has potential application within a range of factual scenarios not all of which would be recognised in equity as giving rise to relief on the basis of unconscionable conduct. For example, whereas undue influence constitutes a distinct (albeit often overlapping) ground for relief in equity, under s 12CC(1)(d) the presence or absence of undue influence is one, and only one, of the considerations to be taken into account in determining whether conduct is or is not unconscionable. 90 Important to the resolution of this appeal, in my opinion, is that what Parliament's appropriation of the terminology of equity in the expression of the normative standard in s 12CB does not do is to authorise a court exercising jurisdiction in a matter arising under that section to dilute the gravity of the equitable conception of unconscionable conduct so as to produce a form of equity-lite. The appropriation of the terminology of equity does not allow a court to adopt a process of reasoning which starts with the equitable conception of unconscionable conduct, involving exploitation of a special disadvantage, and then uses considerations identified in s 12CC to water down the court's assessment of what amounts to a special disadvantage or to allow the court to arrive more easily at an assessment that conduct amounts to exploitation. 91 In Paciocco v Australia & New Zealand Banking Group Ltd, I referred to unconscionable conduct within the meaning of s 12CB as requiring "a 'high level of moral obloquy' on the part of the person said to have acted unconscionably". "Moral obloquy" is arcane terminology. Without unpacking what a high level of moral obloquy means in a contemporary context, using that arcane terminology does nothing to elucidate the normative standard embedded in the section. The terminology also has the potential to be misleading to the extent that it might be taken to suggest a requirement for conscious wrongdoing. My adoption of it has been criticised judicially and academically. The criticism is justified. I regret having mentioned it. 92 What I meant to convey by the reference was that conduct proscribed by the section as unconscionable is conduct that is so far outside societal norms of acceptable commercial behaviour as to warrant condemnation as conduct that is offensive to conscience. To that view of the statutory standard I adhere. 93 The judgment required of a court exercising jurisdiction in a matter arising under s 12CB is a heavy one. For a court to pronounce conduct unconscionable is for the court to denounce that conduct as offensive to a conscience informed by a sense of what is right and proper according to values which can be recognised by the court to prevail within contemporary Australian society. Those values are not entirely confined to, or entirely removed from, the values which historically informed courts administering equity in the development of the unwritten law of unconscionable conduct. They include respect for the dignity and autonomy and equality of individuals."
In the same case, Keane J (one of the majority) stated at [118]: "118 The use of the word "unconscionable" in s 12CB - rather than terms such as "unjust", "unfair" or "unreasonable" which are familiar in consumer protection legislation - reflects a deliberate legislative choice to proscribe a particular type of conduct. In its ordinary meaning, the term "unconscionable" requires an element of exploitation. The term imports the "high level of moral obloquy" associated with the victimisation of the vulnerable. As five members of this Court observed recently in Thorne v Kennedy, a finding of unconscionable conduct requires the unconscientious taking advantage of a special disadvantage, which has "been variously described as requiring 'victimisation', 'unconscientious conduct', or 'exploitation'". And in Kakavas v Crown Melbourne Ltd, this Court unanimously confirmed that "[h]eedlessness of, or indifference to, the best interests of the other party is not sufficient" to establish the "predatory state of mind" that must be shown."
Section 22 of the ACL sets out the matters the Tribunal may have regard to in determining if there has been a contravention of the prohibition of unconscionable conduct. Amongst the many matters set out in s 22 is (1)(g) - the requirements of any applicable industry code and s 22 (1)(j)(iii) the conduct of the supplier and the customer in complying, with the terms and conditions of the contract.
The Tribunal found that the PSBA Act is consumer protection legislation and was an industry code of practice for the purposes of ss 21 and 22 (1)(g) of the ACL (refer to para 71).
The critical finding regarding unconscionable conduct is in para 72 (and perhaps 73) when the Tribunal found that Mr Forbes and Mr Feng engaged unconscionable conduct in complying with, or rather failing to comply with the terms and conditions of the contract (refer to s 22 (1)(j)(iii)).
However, failing to comply with a contract, of itself, does constitute unconscionable conduct without more. The judgments in Kobelt above indicate elements of exploitation, vulnerability or a predatory state of mind. The test applied by the Tribunal indicates only failure to comply with the terms of the contract, which in our view is an incorrect test, and an error of law.
Although it is not stated to be part of the reasons for the finding of unconscionability, the findings in para 73 add to it. We infer that this is so because para 73 follows immediately after 72 and refers to the conduct being "outside societal norms of acceptable commercial behaviour resulting in severe mismanagement" of Ms Wan's property. The Tribunal was probably referring to that part of Gageler J's judgment set out above. If so, that short reference does not sufficiently describe the meaning his Honour sought to convey.
The elements of exploitation, vulnerability or a predatory state of mind were not part of the reasoning of the Tribunal and do not appear from the facts of this matter. Further, the facts did not include any element of a special disadvantage in the relative positions of the parties.
We consider that in this matter, the failure to comply with the terms of the contract, without more, does not constitute unconscionable conduct. The bland conclusion of conduct being "outside societal norms of acceptable commercial behaviour" is unsustainable in the absence of the other significant elements of unconscionability, such as exploitation, vulnerability or a predatory state of mind.
While there may be standards applicable to the industry as a whole and the PSBA Act might be characterised as an industry code of practice (of which we express no opinion), the Tribunal fell into error when applying the legal test of unconscionable conduct to the facts as found.
As there was no unconscionable conduct then it does not have to be decided if Mr Forbes was "involved".

Ground 2 - incorrect test - misleading or deceptive and "involved"

Before turning to issue of whether the test applied was correct, Mr Forbes submitted that the Tribunal was not entitled to rely upon the evidence of WeChat messages supplied by Ms Wan as evidence of the representations made. At paragraph 48 the Tribunal has accepted this evidence produced by Ms Wan which included the WeChat text correspondence.
Mr Forbes said that a certified translation should have been supplied before it could be accepted by the Tribunal, and in this regard relied upon reasoning in Chen v Feng which referred to caution being used when dealing with material in a foreign language which has been translated by one of the parties.
At paras 101 - 102 of Chen v Feng it was said that the WeChat messages would not be accepted without a proper translation.
That reasoning was that the Appeal Panel in Prestige Auto Centre Pty Ltd v Apurva Mishra [2014] NSWCATAP 81 (Prestige Auto) said at [30]-[33] that despite the relative informality of the Tribunal's practice and procedure, a certified translation of a document in a foreign language will usually be required, particularly if the evidentiary purpose of the document is to prove serious misconduct by a person. In Chen v Feng it was said that given the seriousness of the allegation of misleading and deceptive and unconscionable conduct and the gravity of the consequences flying from a finding based upon it, that the Tribunal was not prepared to accept the informal translation: "31 It is important to recognise that the Tribunal is not bound by the rules of evidence (s 38(2) of the CAT Act) and is to act with as little formality as the circumstances of the case permit, and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms (s 38(4)). In interpreting the CAT Act and exercising its powers under that Act, the Tribunal is required to give effect to the guiding principle established in s 36 that, "the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings." 32 The usual method by which the content of foreign language documents are proved is by production of a certified translation or other evidence, which shows the identity of the translator and certifies the accuracy of the translation. In some cases the translation is proved by an affidavit from the translator. This is necessary because, without a translation, the content of the foreign language document is bereft of meaning. The certification requirements are driven by the need to ensure that translations of foreign documents that are used in evidence are accurate representations of the originals. Certified translations are however costly and at times difficult to obtain."
We respectfully agree with those observations but in this appeal the Appeal Panel is satisfied that the Tribunal did not fall into error in admitting the evidence of WeChat text conversations without certified translation. This is because: 1. the Tribunal (at para 81) said it approached the annexures with caution because they included non-certified translations. In other words the Tribunal was aware of the issue and adjusted its analysis accordingly; 2. Mr Forbes and Mr Feng did not bring evidence in the Tribunal to actually dispute the content of the conversations alleged. Ms Wan was not cross-examined (refer to para 81) to suggest there was some inaccuracy or mistake in the informal translations; 3. in the Appeal Panel, Mr Forbes did not seek to rely on further evidence to demonstrate that any of the translations by Ms Wan where actually incorrect or misleading, as was the case in Prestige Auto.
We are satisfied there was evidence which the Tribunal could accept that the representations occurred.
Turning now to the question of the test for misleading or deceptive conduct, Ms Wan's allegation was that the relevant conduct was that employees or agents of a ACPM made representations and promises to her which she relied on when entering into the Agreement. The Tribunal accepted these representations occurred (para 83). These representations related to the premium quality furniture which was not supplied, that the tenants would pay for any damage and that cleaning of the property would be provided (refer to paras 43(3)(b) and 83).
In Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25 at [24]-[33] the High Court said that in considering whether the facts of a case disclosed misleading or deceptive conduct, a two-step analysis is required. The first step involves asking whether facts establish the conduct pleaded. The second step involves asking whether, as a question of fact, the conduct is false, misleading or deceptive or likely to mislead or deceive. It is necessary to have regard to the context in which the representation was made and to the relevant surrounding facts and circumstances.
Regarding the alleged misleading or deceptive conduct, the conduct complained of was promises of future conduct. Section 4 of the ACL provides that unless evidence is adduced to the contrary the person does not have reasonable grounds for making the representation, and the representation is taken to be misleading. While the Tribunal made a finding that the conduct complained of was unconscionable, there is no specific finding in the Tribunal reasons that this conduct was misleading or deceptive.
Assuming for the moment that the finding that the representations made to Ms Wan were misleading or deceptive can be inferred from the reasons, it is not necessary for the Appeal Panel to review that finding because even accepting the misleading or deceptive nature of the representations, there is a serious question about whether the Tribunal applied the correct test of whether Mr Forbes was sufficiently "involved" in the conduct to satisfy the statutory test.
The findings of the Tribunal were: 1. at para 65, that "Mr Forbes was responsible for the day-to-day management and operations of AC and ACPM"; 2. at para 66, that Mr Forbes "failed to provide any evidence as to how he sought to comply with [s 32(1) and s 32(3)(a), (b) and (c)] of the PSBA Act"; 3. at para 74, under the heading "Liability of Mr Forbes and Mr Feng" that Mr Forbes was liable "for the reason that as the director with the day to day management of both AC and ACPM he was acting, albeit illegally, as the real estate agent as well"; 4. at para 84, "As I have found above, both Mr Forbes and Mr Feng must be taken to have been aware of these representations made by Dean, Mr Feng because he was the licensee of the business seeking to sell its services to Ms Wan, and Mr Forbes because he was the CEO of AC and therefore employed such staff as worked with ACPM, including Dean, and as found by the Administrators had day-to-day conduct of ACPM. It is not conceivable that either Mr Feng or Mr Forbes was not aware of what was being said to prospective clients and to Ms Wan in particular."
Section 236 of the ACL is as follows: 236 Actions for damages (1) If: (a) a person (the claimant ) suffers loss or damage because of the conduct of another person; and (b) the conduct contravened a provision of Chapter 2 or 3; the claimant may recover the amount of the loss or damage by action against that other person, or against any person involved in the contravention. (2) An action under subsection (1) may be commenced at any time within 6 years after the day on which the cause of action that relates to the conduct accrued.
Section 2 of the ACL contains definitions which include: "involved": a person is involved, in a contravention of a provision of this Schedule or in conduct that constitutes such a contravention, if the person: (a) has aided, abetted, counselled or procured the contravention; or (b) has induced, whether by threats or promises or otherwise, the contravention; or (c) has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention; or (d) has conspired with others to effect the contravention.
In Yorke v Lucas (1985) 158 CLR 661; [1985] HCA 65 at [17] the High Court said (when considering the previous but relevantly the same provisions of the Trade Practices Act 1974 (Cth)) that "involved" requires a party to a contravention to be an intentional participant, the necessary intent being based upon knowledge of the essential elements of the contravention.
in CH Real Estate Pty Ltd v Jainran Pty Ltd [2010] NSWCA 37 at [309] Young JA said: "309 In Yorke v Lucas, the High Court held that what was required to show liability under the section was that the person in question had knowledge of the essential elements of the contravention."
We observe that in themselves, the promises were not out of the ordinary. There was no direct evidence of the state of mind of "Dean" or ACPM at the time. Inferences are available from the administrator's report but these relate to the conduct and competence of the management, rather than some objective state of mind about whether the promises would be fulfilled.
The evidence was silent as to the involvement of Mr Forbes except his own evidence that he never met Ms Wan and had no direct contact with her - see para 62. He was the director and secretary of AC and responsible for the day-to-day management and operations of AC and ACPM. The misleading statements, at the relevant time, related to matters in the future. There was no evidence, for instance, whether Mr Forbes knew at the relevant time, the company would not, or could not, fulfil its promises.
The Appeal Panel is of the opinion that the evidence fell short of the statutory test of the requisite knowledge of the essential elements of the contravention. It is not sufficient to say that the test is satisfied because "he employed staff" nor is the inference sufficient "it is not conceivable that Mr Forbes was not aware of the representations". Even combining these two elements does not satisfy the test because neither is sufficiently strong. There needs to be at least some probative evidence of his knowledge of events.
Further, the additional (if that is what it is) ground that Mr Forbes was involved in the breaches of the PSBA Act (para 61) or was acting illegally as the real estate agent (para 74) also do not satisfy the test. First and most importantly, the PSBA Act places obligations on the licensee who was Mr Feng. Section 32 places a duty on the licensee (and any licensee employed as person in charge) to properly supervise the business. Mr Forbes was not the licensee and so is not subject to the duties this section imposes.
In any event, there did not appear to be any analysis of how the Tribunal concluded that he was illegally acting as a real estate agent. A minimum would require an analysis of the definitions of the functions of the real estate agent in ss 3 and 3A of the PSBA Act and the manner is which Mr Forbes actions satisfied the statutory description.
The Appeal Panel finds the Tribunal fell into error in applying the test of whether Mr Forbes was involved in the contravention. This is an error of law.

Grounds 3 - breach of PSBA Act

The Appeal Panel relies on the reasoning in the preceding paragraphs and finds the evidence was insufficient to find Mr Forbes' conduct breached the PSBA Act.

Ground 4 - not fair and equitable etc.

This ground requires leave of the appeal panel. In the light of the findings of errors of law, it is not necessary to further consider this ground.

Orders

The orders of the Tribunal will be amended to remove any liability of Mr Forbes.
The Appeal Panel makes the following orders: 1. the appeal is allowed, in part; 2. order 1 of the Tribunal is amended to read " Jeffrey Feng is ordered to pay the amount of $7,049.64 to Chenyang Wan within 28 days of the date of this order;" 3. the appeal is otherwise dismissed.

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: 30 June 2020

Australian Securities and Investment Commission Act 2001(Cth)

Trade Practices Act 1974(Cth)

Property, Stock and Business Agents Act 2002(NSW)

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