Gao v Wang

The claim before the Assessor

1. The circumstances giving rise to the claim made against the two defendants (the company and Mr Chang Wang) as follows. The plaintiff wanted to buy an apartment in a residential development in Gordon called Altessa. Chang Wang (the second defendant, hereafter "the defendant" or "Chang Wang") was a director of Blue Ocean, the other defendant. There was an arrangement between the company and the managing agent in charge of the sales, Colliers, which amounted to an introducer's fee agreement. Pursuant to that agreement, if the purchaser of a property in the development was introduced, Colliers would pay a 3% fee under the agreement. In order to satisfy the requirement of being an introducer of the purchaser, the company agreed to provide rebate to clients who they introduce to purchase a property, being a 1% rebate which was to be offset against the 3% introducer's fee that that was to be given to the company. In other words, the conditions of the rebate were that the potential purchaser, such as the plaintiff, must first register an interest with the first defendant and then must use the first defendant staff when viewing and inspecting the premises as well as keeping the offer about the rebate confidential.
2. A rebate agreement, on the letterhead of Blue Ocean, was signed by Chang Wang and the company sales manager, Whan Tian. Its terms were as follows: "Blue Ocean Realestate Pty Ltd agrees to Pay Rebate Fee $9,850.00 + Legal Fee (provide tax invoice) (ETF including GST) (Paid on completion) to Name: Ming Gao for completes [sic] the purchase of: Project: Gordon Altessa B402 Or before the due date for completion; AND Provide Tax Invoice to the Blue Ocean Realestate Pty Ltd. This rebate is payable within three months after the property settled and commission paid." [Underlined portions are handwritten]
3. The document in question was undated. No evidence as to when it was entered into was provided to the Assessor, but the plaintiff tells me, from the bar table, that it was signed on the same day that he made his first payment of $5000, namely 24 April 2017.The importance of that date is that, during the period from 1 March 2017 to the beginning of June 2017, Chang Wang was not a director of the company. That is not to say that he is not an agent; to the contrary, the plaintiff appears to accept this. The plaintiff's argument is that because Chang Wang would not have been a director during this period, he must be signing on the basis of offering personal liability of some kind to the plaintiff. No such argument was put to the Assessor; to the contrary, as extracts from the transcript set out below demonstrate, the plaintiff repeatedly told the Assessor that Chang Wang was a director and was liable to pay personally because of his incompetent and dishonest conduct as a director.
4. The value of the rebate was $9,850, as well as legal fees totalling $2,188.06. The plaintiff told the court that the rebate letter was signed not only by Chang Wang but also by a sales manager, Whan Tian but I was not addressed as to the meaning (if any) of this second signature, in terms of personal and/or corporate liability.
5. There was subsequently a falling out between the parties, which the plaintiff described to the Assessor as follows: "So in April 2018 the Blue Ocean sends me an email capturing the rebate ..(not transcribable).. and it's alleging me confidentiality agreements for which doesn't even exist and it says because - it accusing me register with Colliers prior to contracting with Blue Ocean Real Estate and refusing to pay me any money and I clarified afterwards with the defendants that there's never confidentiality agreements ..(not transcribable).. no registration of express of interest filed with Colliers whatsoever and most importantly, defendants have no evidence to prove what the alleged accused."(T 10, lines 7 - 16)
6. After unsuccessfully complaining to other bodies, the plaintiff commenced proceedings against Chang Wang and the company in the Local Court. He argued that Chang Wang was personally liable to refund the monies pursuant to the rebate letter because "Mr Wang is responsible for oversight [sic] the files of the company and he must comply with his legal obligations as director under the Corporations Act 2001" (T 10). The plaintiff told the Assessor that Chang Wang, "as the company director… must be in a position to guide and monitor the management of [the] company" (T 10 - 11).
7. As the plaintiff represented himself, the Assessor was careful to confirm the evidence the plaintiff relied on as evidencing the asserted agreement between himself and Chang Wang: "ASSESSOR: Mr Gao, sorry, can you hear me, Mr Gao? PLAINTIFF: Yes. ASSESSOR: It's best to stick to the evidence that you've filed. If you've got any other submissions about the evidence please. PLAINTIFF: Yes, so you have all my evidence, that's right. I filed- - ASSESSOR: What I need you to do is just tell me is there anything in these documents that clearly says there's an agreement between you and Mr Wang? Is there a document that shows that? PLAINTIFF: That's evidence number 5, rebate letter. ASSESSOR: You rely on the rebate letter, you say? PLAINTIFF: Yes. ASSESSOR: Do you wish to say anything more at this point? PLAINTIFF: No more." (T 11, lines 22 - 44)
8. As noted above, the hearing proceeded against Chang Wang only. No orders were sought by the plaintiff against the company.
9. The Assessor heard submissions from both parties, and then heard submissions in reply. She gave the parties a short period to go outside for a discussion and then heard further submissions from each of them. She then gave a short ex tempore judgment and heard from the parties concerning costs. As a Calderbank offer had been made, she awarded costs on an indemnity basis.

Procedural fairness

1. There is no hard and fast rule as to the form or substance of the duty to afford procedural fairness. The fairness of the procedure will depend on the nature of the matters in issue, including fairness in permitting the parties a reasonable opportunity to present their cases and reply and in tendering relevant material. Particular care should be taken in relation to courts where there is a high degree of informality. Mason J stated in Kioa v West (1985) 159 CLR 550 (at 585) that 'the expression "procedural fairness" … conveys the notion of a flexible obligation to adopt fair procedures which are appropriate and adapted to the circumstances of the particular case'. In Re Minister for Immigration and Multicultural Affairs; Ex parte Lam (2003) 214 CLR 1 (at [37]), Gleeson CJ emphasised that 'fairness is not an abstract concept' and that the 'concern of the law is to avoid practical injustice'.
2. Procedural fairness involves two requirements, namely the fair hearing rule and the rule against bias. The hearing rule requires a decision maker to afford a person an opportunity to be heard before making a decision affecting their interests. There is no allegation of bias in these proceedings.
3. As to the fair hearing rule, natural justice requires that the audi alteram partem rule be complied with. This is best demonstrated by careful reading of the transcript of the hearing and of the judgment: Britt v Parcell [2021] NSWDC 464 at [72].
4. When considering whether a fair hearing has been afforded to the parties, is important to take into account the manner in which the court is directed to hear the proceedings. In particular, rules designed to give flexibility and informality to the proceedings in court such as the Small Claims Division must be given proper weight.
5. Section 35 of the Local Court Act 2007 (NSW) provides: "35 Procedure generally in Small Claims Division (1) The jurisdiction of the Court sitting in its Small Claims Division may be exercised by a Magistrate or an Assessor. (1A) However, the jurisdiction of the Court in proceedings involving company title home unit disputes under section 34A may only be exercised by a Magistrate. (2) Proceedings in the Small Claims Division are to be conducted with as little formality and technicality as the proper consideration of the matter permits. (3) The rules of evidence do not apply to proceedings being heard or other proceedings in the Small Claims Division. (4) Witnesses may not be cross-examined except in circumstances in which, and to the extent to which, the cross-examination of witnesses is authorised by the rules or a practice note. (5) A Magistrate or an Assessor exercising the jurisdiction of the Court sitting in its Small Claims Division may inform himself or herself on any matter relating to proceedings being heard or other proceedings in the Small Claims Division in such manner as he or she thinks fit. (6) Proceedings in the Small Claims Division (other than any judgment given or order made in respect of the proceedings) are not required to be recorded."
6. The plaintiff asserted there was an absence of procedural fairness for the following reasons: 1. The Assessor expressed a concluded view in her opening remarks to the plaintiff which indicated that she had already made up her mind against him. 2. The Assessor either had not read or did not understand the documentation which had been tendered and did not appreciate that Chang Wang was not in fact a director at all at the time that the rebate was signed. 3. The Assessor permitted Mr Wakim to interrupt all the time and generally hurried the plaintiff along so that he did not have an opportunity to present his case. 4. English is the plaintiff's second language and he has no legal qualifications, and the court should have assisted him all in order to understand what the issues were about.
7. I will deal with each of these in turn.

A preconceived view?

1. The Assessor, after identifying the relevant documentation, made the following remarks: "ASSESSOR: Mr Gao, you're representing yourself and I appreciate as a non- lawyer there may be some confusion for you in relation to this case, but also the process. I'm just going to confirm that I've got an amended statement of claim that was filed in July this year. That was made pursuant to an order of 35 the Court dated 1 July. That lists Blue Ocean Alliance Proprietary Limited as the first defendant and Chang Wang as the second defendant, so they are the present parties. For whatever reason, other people were named as defendants at various times, but that doesn't matter, that's gone away. They're no longer a part of these proceedings. There is a company by the name of Blue Ocean Alliance Proprietary Limited, that is the first defendant and the second defendant is Chang Wang. As far as I can see the first defendant, that's the company, has not filed a defence in these- - PLAINTIFF: Yep. That's consistent of their behaviour because they keep ignoring all my complaint applications. ASSESSOR: That wasn't a question, I'm still speaking, so they are not part of these proceedings, so presently you've got a case against a company who has not participated in the proceedings as it currently stands, because there is no defence filed. You are able to seek a default judgment against the company for the sum that you have claimed, so you can do that through a process of applying through the registry and filling out some documents. The case today, the hearing, will concern the second defendant, Mr Wang, because he's filed a defence and he's appearing via his solicitor today. You will have to prove, Mr Gao, that you had a contract with Mr Wang, or alternatively, that the contract you had with the company, Blue Ocean Alliance, of which Mr Wang was previously a director. You would 10 have to prove that as the director of the company, Blue Ocean Alliance, at the time you entered the contract with Blue Ocean Alliance that Mr Wang guaranteed performance of the company's obligations under the ..(not transcribable).. Put simply, I have looked through your statement and your documents. I have read the defence and the statement of the defendant, Mr Wang and it appears to me that you might be mistaken. You might be able to point out why you're not mistaken, but it seems to me that you are mistaken because the contract you had was not with Mr Wang personally, it was with the company. They are like two different people for legal purposes, they're two different legal entities and in his capacity as a director he did not provide a guarantee or a director's guarantee. There's no evidence of that before me. I've just signed a rebate letter, which is what you say is the contract or agreement to pay a 1% rebate, or to receive a 1% rebate of a settlement of this property that you were seeking to purchase in the Altessa development, so hopefully you can tell that I have read the documents and I do broadly understand the case, but unfortunately for you I think you're fighting a losing battle here today, unless you can convince me that there's a contractual entitlement against Mr Wang personally. Do you understand that? PLAINTIFF: Yes, I understand. You mentioned I can lodge a default judgment order by the registry to seek the rebate from the company now, right? ASSESSOR: Whenever a defendant does not file a defence in response to the statement of claim, if you can prove that you served the statement of claim on the company, so you'll need an affidavit of service proving that you've served it properly in accordance with the court's rules. Then you seek a default judgment for the amount you've claimed." (T 2, line 31 - T 3, line 41)
2. What the Assessor was doing here was identifying the issues in the case which were of concern to her and asking the plaintiff to explain the basis upon which he brought his claim against Chang Wang personally, as opposed to his action against the company. The plaintiff responded: "PLAINTIFF: Okay, I'll do it now, but I got another concern is that this company is just one man company. The Mr Wang, he's director, he's the secretary, he's the agent, he's everything. WAKIM: I object. That's incorrect. We've filed evidence with an ASIC search and no doubt the honourable Court would have perused the affidavit of Mr Chang Wang and would have seen that he is not the director and he is not the shareholder of the first defendant."
3. The plaintiff repeated this explanation of the basis for the action being brought against Chang Wang at T 6: "ASSESSOR: I'll allow the statement in, but I must say that even if I didn't allow it in you still have to prove, Mr Gao, as the plaintiff, that there is a legal liability personally of Mr Wang to you under this agreement. Is there anything in this document that shows that there was a guarantee or some other legally binding contract that you had with Mr Wang personally? Is there anything in the evidence? Because I haven't seen it and it's not ..(not transcribable).. PLAINTIFF: Not personally. Yeah, not personally, no. From my understanding, especially from the research from ASIC, Australian Securities and Investments Commission, is that as the company director, so you must be in a position to guide and monitor the management of the company, so clearly Mr Wang, as a director of Blue Ocean has failed to take those responsibility and legal obligations, so instead Mr Wang has taken every possibility to avoid paying the debts, including changing the company names and transferring a directorship to someone else."
4. He went on to emphasise this later: "As a customer of Blue Ocean I'm pretty fed up what they have done to us, because he never do any customer service and they just playing the avoiding game. The Blue Ocean have, like, it's a blatantly ..(not transcribable).. Australian consumer law by breaching an agreement. Especially Mr Chang Wang, he signed the rebate letter but after that he's nothing to do with anything like that and he's aware of the whole story but he didn't take any action to take care of the customer, but avoiding that, that's what he did, so which I'm extremely disappointed in their inappropriate attitude and responsibility make me sick and I'm so fed up with their lies and deceptions, so look at the whole story is like a scammer to us because they lure us to buy their property. He got the commission from ..(not transcribable)..- - WAKIM: I object. I object. PLAINTIFF: - - and I got nothing. I got nothing. It's a totally- - ASSESSOR: Mr Gao, sorry, can you hear me, Mr Gao? PLAINTIFF: Yes. ASSESSOR: It's best to stick to the evidence that you've filed. If you've got any other submissions about the evidence please. PLAINTIFF: Yes, so you have all my evidence, that's right. I filed- - ASSESSOR: What I need you to do is just tell me is there anything in these documents that clearly says there's an agreement between you and Mr Wang? Is there a document that shows that? PLAINTIFF: That's evidence number 5, rebate letter. ASSESSOR: You rely on the rebate letter, you say? PLAINTIFF: Yes." (T 11, Lines 7 - 40)
5. The plaintiff submits that, by the Assessor asking these questions and permitting Mr Wakim to interrupt, he was distracted from the argument he really wishes to put, which was that Chang Wang was not in fact a director at all at the time that the rebate agreement was entered into.
6. What the Assessor was in fact doing was summarising the basis upon which she understood the plaintiff's case was put, and he was agreeing with her. His whole case was that Chang Wang had not complied with his obligations as a director and was involved in dishonest conduct, and that he was personally liable on this basis, and not that Chang Wang was not a director at all (and thus personally liable on that quite different basis).
7. Having regard to s 35, the degree of informality necessary for claims of this kind clearly permits this kind of approach. It is to be expected that a judicial officer who has read all of the written material and who is effectively hearing submissions would have sufficient familiarity to understand the issues in the case and to raise the problem areas with the parties.

Failure to read or understand the material

1. The Assessor did not make any mistakes of fact or demonstrate lack of knowledge of the documentation. She drew attention to the rebate letter and understood that it was the basis of the plaintiff's claim against Chang Wang. The plaintiff's submission that the rebate letter was overlooked is clearly wrong.
2. The plaintiff submitted that the Assessor should have looked behind his statements in submissions that Chang Wang was a director in order to appreciate that he could not have been a director at the relevant time and thus (in some unexplained way) personally liable. Since no evidence was led before the Assessor on this issue by him, and no submission was made by the plaintiff other than that Chang Wang was a director, this submission must fail. The Assessor was entitled to take the plaintiff's statements as to the evidence at their face value and not to look behind the evidence he was presenting in order to determine if it was in fact objectively true.
3. The plaintiff also submitted that the Assessor's failure to find in his favour was of itself an indication that she did not understand and/or misapplied the law.
4. As there is no appeal of right to the District Court in relation to errors of law, I must be cautious about expressing opinions on matters outside this Court's jurisdiction. However, not only was the plaintiff accorded procedural fairness; he was also accorded substantive fairness. The circumstances in which a person who merely signs a document on behalf of a corporation will be held personally liable in relation to the contract in question are limited to specific exceptions in relation to the lifting of the corporate veil, such as signing on behalf of a bogus corporation (Isabella Shop Fitout & Design Pty Ltd v Tan Republic Pty Ltd [2014] NSWCA 192).
5. None of those exceptions apply here, and I note that the plaintiff acknowledges that he told the Assessor he had no personal agreement with Chang Wang; his argument is based entirely on his belief that a person who signs an agreement on behalf of a corporation but is not a director thereby makes himself automatically personally liable for the whole of the debt.
6. Accordingly, I am satisfied that the plaintiff was accorded fairness in terms of the analysis of the legal issues by the Assessor.

Denial of procedural fairness due to interruptions by Mr Wakim

1. The plaintiff complains that he was unable to present his case properly because he was constantly interrupted by his opponent, in circumstances where this was permitted by the Assessor.
2. Examination of the transcript shows that nothing could be further from the truth. On occasion, Mr Wakim objected to evidence or submissions but, rather than permitting such interruptions, the Assessor told Mr Wakim not to interrupt and asked him to be more helpful to the plaintiff: "WAKIM: I object. That all should be stricken, I object to all of that. PLAINTIFF: That's the truth. That's what he did. ASSESSOR: Before we continue, because I can see, Mr Wakim, I just ask you to be slightly more helpful to the Court and to Mr Gao. WAKIM: I beg your pardon. Thank you, I'm sorry, your Honour. ASSESSOR: I'm trying to explain the process to him. This is an ..(not transcribable).. court and I've already indicated to him that he's got problems, so let's just try and be helpful here instead of- - WAKIM: I'm sorry. I beg your pardon. I excuse myself. ASSESSOR: ..(not transcribable).. I'm happy to move on. Mr Gao, you have filed a number of documents." (T 4, lines 34 - 50)
3. The Assessor was careful to give each of the parties an opportunity to both to be heard and to reply to submissions. She encouraged the parties to take time out from the hearing in order to have private negotiations and gave courteous and careful responses to the plaintiff at all relevant times. For example, she stated at T 12 line 34 "Mr Gao, would you like to say anything more?".
4. There is no material in the transcript capable of demonstrating any improper conduct by Mr Wakim in any event. He was entitled to raise objections and he did so in the proper manner.

Insufficient assistance from the court

1. The fact that a party is unrepresented does not excuse compliance with the general standards of preparation and presentation; nor does it mean that the judicial officer is expected to provide special assistance. In Duraisamy v Sydney Trains [2019] NSWCA 269 at [25], the Court warned: "25. I would add only this, and it is to note that Senior Counsel for the respondent relies upon the High Court's endorsement in Nobarani v Mariconte [2018] HCA 36; (2018) 92 ALJR 806 at [47] of the observation of Samuels JA in Rajski v Scitec Corporation Pty Ltd (Court of Appeal (NSW), 16 June 1986, unrep): "The absence of legal representation on one side ought not to induce a court to deprive the other side of one jot of its lawful entitlement ... An unrepresented party is as much subject to the rules as any other litigant. The court must be patient in explaining them and may be lenient in the standard of compliance which it exacts. But it must see that the rules are obeyed, subject to any proper exceptions. To do otherwise, or to regard a litigant in person as enjoying a privileged status, would be quite unfair to the represented opponent."
2. The Assessor carefully noted that the plaintiff was representing himself and took every opportunity to explain and assist him. She spoke in simple terms and did not use complex legal terminology. She answered all his questions and was careful not to let Mr Wakim dominate the hearing. I am satisfied that she did everything she could to assist the plaintiff.

Conclusions concerning procedural fairness

1. This is a very clear case of procedural fairness and courtesy by a judicial officer being provided at all relevant times.
2. The affidavit of Mr Daniel Wakim, which is over 500 pages, paints a vivid picture of the amount of work involved. It is evident from the accurate and careful questions put by the Assessor to the plaintiff that she had not only carefully read all this material but was endeavouring to assist the plaintiff to understand not only his claim against Chang Wang, but also his entitlement to seek default judgment against the company, which had not filed a defence.
3. In submissions, the plaintiff acknowledged that the Assessor had endeavoured to assist him. He indicated that part of the problem was his back of command of the English language and understanding of legal principles. However, for the reasons set out by Bell P (as the Chief Justice then was) in Duraisaimy, a degree of caution must be exercised here. It is clear from the opening words of the Assessor that she was well aware of the difficulties the plaintiff was labouring under, and that she was endeavouring to assist him to resolve these. However, she was not there to run his case for him.
4. Taking all of the above into account, none of the grounds upon which absence of procedural fairness are asserted to have existed can be made out. The appeal must be dismissed with costs.

Costs

1. A Calderbank offer was made by Chang Wang and the Assessor considered that there were sufficient grounds made out for the making of an indemnity costs order. The plaintiff does not claim that there was any absence of procedural fairness in relation to the costs order. As I have dismissed the appeal, I see no reason to disturb the orders made by the Assessor in this regard.
2. Mr Wakim sought an order for indemnity costs on the summons by reason of the hopelessness of the appeal, pointing to correspondence between the parties in which the hopelessness of the claim at first instance and on appeal had been pointed out. The plaintiff complained that this correspondence was couched in threatening language and in particular objected to the use of the word "doomed" to describe his litigation. He claimed that this caused him shock and nervous distress and amounted to threatening language. He submitted that Chang Wang should pay his costs, which he estimated $25,000.
3. I am satisfied that the appeal was in fact hopeless. There was no procedural unfairness. Analysis of the transcript demonstrates that the Assessor listened to each of the submissions put by the plaintiff, read all the material and weighed the evidence, asked appropriate and fair questions and was careful to ensure that Mr Wakim took a helpful role rather than an adversarial one. I am satisfied that the contents of the Calderbank letter were not threatening and that the offer that was made was carefully (rather than forcefully) described. In those circumstances, the plaintiff should pay Chang Wang's costs of the summons on an indemnity basis pursuant to s 98 of the Civil Procedure Act 2005 (NSW).

Order: 1. Summons dismissed. 2. The plaintiff to pay the defendant's costs of the summons and of these proceedings on an indemnity basis.

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: 22 April 2022