Garry Pickering v Michael Munchol Yi and Heeja Yi

Decision appealed

1. The Tribunal at first instance provided written reasons on 9 February 2015 and set out the background to the original application, which is convenient to recount given this explains how the current dispute between Mr Pickering and Mr and Mrs Yi arose.
2. Mr and Mrs Yi entered into a contract to purchase a unit on 15 January 2013. The purchase price was $680,000. Stamp duty was assessed as $26,090.25 and was paid on 25 February 2013. It was proposed that Mr Daniel Yi be added as a purchaser after contracts had been exchanged but the vendors would not agree to the contract being amended. Mr and Mrs Yi allege that Mr Pickering (or someone in his office) had advised them that Mr Daniel Yi could be included in the transfer with only nominal stamp duty being payable. Mr Pickering denies that such advice was sought or given. It is nonetheless common ground that Mr Daniel Yi was included on the transfer. The OSR treated the addition of Mr Daniel Yi on the transfer is a dutiable disposition.
3. Mr Daniel Yi brought a claim against Mr Pickering on 25 March 2014 claiming Mr Pickering (or someone in his office) had given advice to him and to his grandparents that it would only cost $2 to add him as a transferee. The Tribunal dismissed the proceedings on 20 June 2014 on the basis that Mr Daniel Yi was not a "consumer" for the purposes of the Consumer Claims Act 1998 (NSW) (the CCA). Mr Daniel Yi was not the client of Mr Pickering, his grandparents were the clients. They had not commenced the action so there was no jurisdiction to deal with Mr Daniel Yi's claim.
4. Mr Daniel Yi and Mr and Mrs Yi commenced fresh proceedings on 1 October 2014 seeking the same relief. This claim was also dismissed on 17 October 2014, first against Mr Daniel Yi because the claim was in similar terms as the previous claim and, secondly, against Mr and Mrs Yi because they did not appear at the directions and conciliation hearing.
5. Mr and Mrs Yi did not apply to reinstate the proceedings or set aside the dismissal but on 10 November 2014 commenced new proceedings against Mr Pickering claiming compensation of $6,424.50 for alleged negligent legal advice. The Tribunal was satisfied the claim made against Mr Pickering, now being the third application filed in respect of this transaction, was a "consumer claim" because Mr and Mrs Yi were clients of Mr Pickering and the claim was based on advice said to have been given to them by Mr Pickering. The Tribunal was therefore satisfied it had jurisdiction to hear the claim.
6. Mr Pickering submitted the Tribunal has no jurisdiction to hear and determine the claim because Mr and Mrs Yi suffered no loss. Relevantly, the Tribunal at first instance dealt with this submission noting: The question was examined at the hearing on 3 February 2015. Strictly speaking it is not a jurisdictional issue; it is a question of whether the claim has any legal merit at all and whether the claim can be won by the applicants, even if all factual issues were presumed in their favour.
7. The Tribunal rejected Mr Pickering's contention and gave the following reasons: On the evidence and submissions available at this preliminary hearing on jurisdiction, I am not satisfied on balance of probabilities that D Li (sic) is solely liable for this amount and there is no liability of the applicants (as submitted by the respondent). I accept the proposition that in usual cases, the purchaser of the property obtains the benefit of the property and as transferee is liable for the duty (and the transferor is not). However, this situation is more complex than the usual cases, and it is not sufficiently clear on the correspondence from the Office of State Revenue that only D Li (out of the 3 named transferees) is liable for the extra duty. Accordingly the Tribunal is not satisfied that the claim ought to be struck out on a preliminary basis for no legal merit, or as an abuse of process.
8. Mr Pickering also submitted that the claim had no merit because the Tribunal had dismissed Mr and Mrs Yi's claim on 17 October 2014. The Tribunal rejected this contention stating: The respondent claims that this claim 14/54451 is res judicata because of the orders dismissing the claim in 14/48380. For the applicants who are the clients of Mr Pickering, there has been no hearing on the merits of the substantive claim in any set of proceedings to which the applicants had been parties. Accordingly, I do not accept that the claim is res judicata and there is jurisdiction to hear it in matter 14/54451.
9. Mr Pickering also made an application for costs. The Tribunal at first instance rejected the application, noting that under s 60 of the CAT Act, the usual rule for costs is that each party is to pay their own costs but the Tribunal may award costs if there are special circumstances. The Tribunal found that there were no special circumstances and stated as follows: As Mr Pickering is appearing for himself and the factual and legal issues which this claim present are complex and require a hearing on the merits, there are no special circumstances which would justify an award of costs to Mr Pickering. Accordingly, this application for costs is refused.

Grounds of appeal and submissions of the parties

1. Mr Pickering contends that the Tribunal should have dismissed Mr and Mrs Yi's claim. His grounds of appeal are: 1. The Tribunal erred in law in finding that Daniel Suan Yi was not solely liable to pay the duty; 2. In reaching the conclusion in (1), the Tribunal misconstrued and/or misapplied sections 13 and 64C Duties Act 1997 (NSW); 3. In reaching the conclusion in (1), the Tribunal relied on the letter from the OSR dated 6 May 2013 as being decisive of the issue contrary to the principle set out in Federal Commissioner of Taxation v Wade (1951) 84 CLR 105; and 4. The Tribunal failed to consider whether the applicants are prevented from making this claim because of "issue estoppel" or "Anshun estoppel" in circumstances where a previous application was made, dismissed and never reinstated.
2. Mr Pickering also sought leave to appeal on the basis that he may have suffered a substantial miscarriage of justice because the decision was not fair and equitable. He particularised this ground as follows: The decision that Daniel Suan Yi and he is not solely liable for the duty is wrong in law and if it were decided correctly (viz that D Yi is solely liable for the duty) it would be decisive of the proceedings. This arises because D Yi is neither a consumer nor a party to the present proceedings. In addition, this is the third application (and the second to which the current applicants are a party) which has been made in respect of this duty issue. Each time the issue was the same. For both of those reasons it is not fair and equitable to subject the respondent to the further cost and inconvenience of litigation when the basis of the proceedings is fundamentally flawed.
3. Mr Pickering amplified his argument in written and oral submissions, focussing primarily on his contention that the Tribunal was in error in failing to find that Mr Daniel Yi was "clearly liable" for stamp duty and that Mr and Mrs Yi were not liable. His submissions on this issue are considered in more detail later in these reasons. Although Mr Pickering did not identify this issue in his grounds of appeal, he also sought to challenge the decision of the Tribunal to dismiss his application for costs. He contended there were special circumstances for the following reasons: 1. The Legal Services Commission, in response to complaints by Mr and Mrs Yi, had suggested to them that they obtain independent legal advice on available remedies. The Legal Services Commission had also advised Mr and Mrs Yi that they suffered no loss and thus had no claim against Mr Pickering. 2. The first and second proceedings were dismissed and on both occasions Mr Daniel YI had been advised to obtain independent legal advice but both he and Mr and Mrs Yi had failed to do so. 3. If Mr and Mrs Yi had obtained advice, Mr Pickering would not have been put to the expense and loss of time in dealing with the matters before the Tribunal.
4. Mr Edward Yi sought leave to represent Mr and Mrs Yi in the proceedings and filed a reply and submissions on their behalf. The Appeal Panel refused leave for Mr Edward Yi to represent Mr and Mrs Yi for the reasons later outlined but nonetheless had regard to the material provided by Mr Edward Yi.
5. In summary, it was submitted that letters from the OSR to the effect that Mr and Mrs Yi were liable for stamp duty supported the contention they had suffered loss. Mr Pickering's office made a mistake in applying s 18(3) of the Duties Act and if Mr and Mrs Yi had been advised of the correct amount of the additional stamp duty, they would not have added Mr Daniel Yi to the title.

Preliminary issue

1. At the outset of the hearing, Mr Edward Yi sought leave to represent Mr and Mrs Yi. He argued that the respondents (his father and step mother) were elderly, would not understand the issues and needed assistance.
2. Mr Pickering opposed the application on the basis that Mr Edward Yi was a material witness in the case, did not have the capacity to represent the respondents fairly and had been the protagonist in prosecuting the claims against him.
3. Section 45 of the CAT Act provides that a party has the carriage of their own case and is not entitled to be represented by another person without leave. The Tribunal has discretion to grant or refuse leave (s 45(3)).
4. The Appeal Panel decided to refuse leave to Mr Edward Yi to represent Mr and Mrs Yi. First, the issues raised in the appeal were principally legal issues in respect of which Mr Edward Yi had no particular expertise. Secondly, it was clear from the correspondence that there was acrimony between Mr Pickering and Mr Edward Yi to such an extent that there was real risk this would distract the parties in prosecuting the real issues in dispute on the appeal. Thirdly, the Appeal Panel formed the view that Mr and Mrs Yi were sufficiently able to present their case, particularly taking into account the obligations of the Appeal Panel under s 38(5) of the CAT Act.

Jurisdiction and nature of the appeal

1. Division 2 of Part 6 of the Civil and Administrative Appeal Tribunal Act 2013 (NSW) (the CAT Act) deals with internal appeals.
2. Section 80(1) of the CAT Act provides that an appeal against an "internally appealable decision" may be made to the Appeal Panel by a party to the proceedings in which the decision was made. An "internally appealable decision" is a decision over which the Tribunal has "internal appeal jurisdiction" (s 32(4) of the CAT Act). The Tribunal has "internal appeal jurisdiction" over any decision made by the Tribunal in proceedings for a "general decision" (s 32(1)(a)). A "decision" includes an "interlocutory decision" and an "ancillary decision."
3. Under subs 80(2)(b) of the CAT Act an internal appeal may be made as of right in respect of a final or ancillary decision on any question of law but with the leave of the Appeal Panel on any other grounds. Relevantly, cl 12 of Schedule 4 of the CAT Act provides that for the purposes of s 80(2)(b), the Appeal Panel may grant leave to appeal in respect of a decision made by the Consumer and Commercial Division but only if satisfied that the appellant may have suffered a "substantial miscarriage of justice" because the decision was not fair and equitable or was against the weight of evidence or significant new evidence is available that was not available at the hearing.
4. An internal appeal against an interlocutory decision may only be made with the leave of the Appeal Panel (s 80(2(a)).
5. The claim by Mr and Mrs Yi in the original proceedings was made under the CCA. Section 7 provides that the Tribunal may hear and determine a "consumer claim," which is defined in s 3A to include "a claim by a consumer for the supply of specified services...that arises from a supply of goods or services by a supplier to the consumer". A "consumer" includes a natural person to whom a supplier has agreed to supply services (s 3, CCA). There is no dispute Mr and Mrs Yi were consumers, Mr Pickering was a supplier and the claim made by Mr and Mrs Yi in the original proceedings was a consumer claim. In determining a consumer claim, the Tribunal may order a respondent to pay a specified amount of money (s 8, CCA).
6. Mr Pickering contended that as Mr and Mrs Yi suffered no loss the Tribunal has no jurisdiction to hear and determine their claim. It was also submitted the claim is an abuse of process, having already been the subject of two previous applications. The proceedings should have been struck out and the Tribunal was in error in dismissing his application. The decision at first instance was an ancillary decision, not an interlocutory decision, and because the Tribunal had erred in construing the relevant legislation, he was entitled to appeal as of right under s 80(2)(b) of the CAT Act.
7. This is an important threshold issue because it determines the nature of Mr Pickering's appeal rights. If the decision made by the Tribunal on the preliminary issue was an ancillary decision, Mr Pickering may appeal as of right if his grounds of appeal identify a question of law by the Tribunal at first instance. If he is not able to establish his grounds disclose a question of law, any appeal will require the leave of the Appeal Panel. If the determination of the preliminary issue was an interlocutory decision, Mr Pickering needs leave to appeal.
8. The expression "ancillary decision" is defined in s 4(1) of the CAT Act as: a decision made by the Tribunal under legislation (other than an interlocutory decision of the Tribunal) that is preliminary to, or consequential on, a decision determining proceedings, including: (a) a decision concerning whether the Tribunal has jurisdiction to deal with a matter, and (b) a decision concerning the awarding of costs in proceedings.
9. The expression "interlocutory decision" is defined as: a decision made by the Tribunal under legislation concerning any of the following: (a) the granting of a stay or adjournment, (b) the prohibition or restriction of the disclosure, broadcast or publication of matters, (c) the issue of a summons, (d) the extension of time for any matter (including for the lodgment of an application or appeal), (e) an evidential matter, (f) the disqualification of any member, (g) the joinder or misjoinder of a party to proceedings, (h) the summary dismissal of proceedings, (i) any other interlocutory issue before the Tribunal.
10. Mr Pickering submitted that, notwithstanding the comments made by the Tribunal in the reasons, he did not make an application that the claim be summarily dismissed or struck out but requested the Tribunal determine the issue of jurisdiction. He argues that this was the substance of his application and this clearly falls within the definition of an "ancillary decision." Mr and Mrs Yi did not address this issue in their submissions.
11. The question of how a decision should be characterised is not determined by labels attributed by the parties. It should be determined by examining the essential nature of the decision.
12. The Appeal Panel concurs with the characterisation of the application by the Tribunal at first instance. Even though Mr Pickering did not describe his application in this way, the substance of his claim was an application for summary dismissal on the basis that the claim by Mr and Mrs Yi lacked legal merit or was misconceived.
13. The Tribunal may dismiss proceedings under s 55(1)(b) of the CAT Act at any stage of the proceedings if it considers the proceedings are frivolous or vexatious or otherwise misconceived or lacking in substance [emphasis added]. While the Tribunal did not refer to this provision in express terms, it is apparent the Tribunal determined to consider the application as a preliminary summary dismissal or strike out application, as it was entitled to do at any stage of the proceedings. This was an appropriate and orthodox approach which was consistent with s 36 of the CAT Act, which provides that the guiding principle is for the Tribunal to facilitate the just, quick and cheap resolution of the real issues in dispute in proceedings. The application was essentially confined to legal argument which, if resolved in Mr Pickering's favour, would have disposed of the proceedings thereby avoiding the need for a lengthy hearing and the determination of contentious findings of fact. In summary, if it was clear Mr and Mrs Yi suffered no loss because Mr Daniel Yi was solely liable for the additional stamp duty assessed, their claim for compensation would fail. If the Tribunal was satisfied Mr and Mrs Yi were estopped from prosecuting their claim, their claim would also fail. If the Tribunal had been satisfied about either of these matters, it may have summarily dismissed the claim.
14. Applications of this nature are specifically contemplated by the CAT Act as "interlocutory" (refer subs (h) of the s 4(1) definition for interlocutory decisions).
15. As noted in Hammond v Ozzy's Cheapest Cars Pty Ltd t/as Ozzy Car Sales [2015] NSWCATAP 65 at [35], it follows from the definition of "ancillary decision" that if a decision is an interlocutory decision, it cannot be an ancillary decision.
16. Our conclusion that the decision of the Tribunal made on 9 February 2015 was interlocutory rather than ancillary is reinforced by further analysis of the preliminary issue raised.
17. In this case, the Tribunal was asked to determine the question of whether the claim could be sustained in circumstances where it was contended by Mr Pickering that Mr and Mrs Yi had suffered no loss. This question does not go to the issue of whether this was an essential element or jurisdictional fact critical to the finding of a consumer claim under s 7 of the CCA but rather whether the Tribunal would or should make an order under s 8. This is in contrast to a cause of action for negligence, which is dependent on damage being sustained. While this question is ultimately relevant to the merits of the claim and whether an order would be made, it is not a jurisdictional question. Moreover, it is not "preliminary to" a decision determining proceedings because it only arises for consideration if the Tribunal is satisfied Mr Pickering gave incorrect legal advice. It is not "consequential on" because it is necessarily part of the claim for compensation orders.
18. The question of whether there is an estoppel or whether the commencement of the original proceedings was an abuse of process are both relevant to the merits of the claim. Estoppel, whether it is alleged to be issue estoppel, cause of action estoppel (or res judicata) or "Anshun" estoppel, is in the nature of a defence to proceedings commenced by a party. It does not go to the heart of the jurisdiction of the Tribunal or to any threshold issue that could properly be described as "preliminary to" or "consequential on" a decision determining proceedings.
19. Given our finding that the decision was interlocutory, the question therefore arises as to whether leave should be given to appeal under s 80(2)(a) of the CAT Act.
20. As already noted, the Tribunal has discretion to dismiss proceedings if it considers the proceedings are, amongst other things, lacking in substance. As noted in BZE v NSW Public Guardian [2015] NSWCATAP 64 at [15] (and the authorities cited, House v King (1936) 55 CLR 499 and Hannaford v Commonwealth Bank of Australia [2014] NSWCA 297) any attack on a discretionary decision must fail unless it can be demonstrated the decision maker made an error of legal principle, made a material error of fact, took into account an irrelevant matter, failed to take into account, or gave insufficient weight to some relevant matter or arrived at a result so unreasonable or unjust as to suggest other errors occurred.
21. Consistent with the principles relating to leave to appeal as summarised in Collins v Urban [2014] NSWCATAP 17 at [84], the appellant "must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at." As the Appeal Panel observed, ordinarily it is appropriate to grant leave to appeal only in matters that involve issues of principle, questions of public importance, an injustice which is reasonably clear, a factual error that was unreasonably arrived at and clearly mistaken or 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.
22. In summary, Mr Pickering has a significant hurdle to overcome to succeed in the appeal or, indeed, to obtain leave. For instance, the Appeal Panel must be satisfied that the decision of the Tribunal at first instance disclosed legal error that created an injustice which is reasonable clear or produced a result that is so unfair it would be in the interests of justice that the decision be reviewed.
23. Mr Pickering contends this is the case. He submits that there was an obvious error of law in circumstances where he has been subjected to three claims, including a complaint to the Legal Services Commissioner, two of which have failed and a third, being the current claim, which is doomed to fail. He has incurred significant costs in defending the claims and should not be put to the expense and effort of further defending the claim.
24. As noted in the recent case of BDK v Department of Education and Communities [2015] NSWCATAP 129 at [15] the summary dismissal of proceedings can be distinguished from other categories of matters that fall within the definition of 'interlocutory decision'. Summary dismissal of proceedings "gives rise to final orders disposing of an application, and deprives the applicant of any substantive hearing of the substance of their claim". In contrast, where the Tribunal refuses to dismiss a claim summarily a respondent may be put to the expense and inconvenience of defending a claim that has no substance.
25. In our view, the consequences to the parties of the Tribunal being in error are sufficiently serious to warrant review before the parties are put to the expense of pursuing or defending the claim. While this is an issue Mr Pickering could have raised at the substantive hearing then again on appeal if he was dissatisfied with the decision, there is utility in the Appeal Panel determining this issue. If Mr Pickering is successful, the Appeal Panel may substitute a different decision, which would dispose of the proceedings. Alternatively, if Mr Pickering is not successful, his appeal is dismissed and the proceedings are remitted for hearing of the substantive claim, there is benefit to the parties in having had this issue considered and determined. Either outcome will advance the guiding principles set out in s 36 of the CAT Act. The Appeal Panel therefore decided to give leave to Mr Pickering to appeal.
26. The question raised by Mr Pickering for determination on the appeal is whether the Tribunal at first instance should have dismissed or struck out Mr and Mrs Yi's claim because: 1. They were estopped from bring this claim or the claim was otherwise an abuse of process? 2. Their claim was without legal merit as they have suffered no loss?
27. A further question that arises is whether the Tribunal should have awarded costs against Mr and Mrs Yi in respect of the strike out application.

Were Mr and Mrs Yi estopped from bringing the original claim or was the claim otherwise an abuse of process?

1. Mr Pickering contended the decision of the Tribunal at first instance was in error because the Member should have dismissed or struck out the claim on the basis of 'issue estoppel' or 'Anshun estoppel.' However, Mr Pickering's submissions in support of his original application and the Tribunal's reasons focus on 'res judicata', also known as 'cause of action estoppel.' The doctrines of res judicata, issue estoppel, Anshun estoppel and abuse of process are well established preclusionary doctrines, which, according to Sackar J in Telesto Investments Ltd v UBS AG [2012] NSWSC 503 at [172] to [176] are distinct but share a unifying policy basis, namely that "there should be finality in litigation" and "a party should not be vexed twice in the same matter." The principles were summarised by the Full Court in Effrem Foods Pty Limited v Trawl Industries of Australia Pty Limited (Receivers and Managers Appointed - In Liquidation and ors [1993] FCA 342; (1993) 115 ALR 377 and more recently in Telesto Investments.
2. Cause of action estoppel, arising from the doctrine of res judicata, is where a final decision is made by a Court or Tribunal having competent jurisdiction over the cause or matter in litigation which disposes once and for all of the matters decided so they cannot be thereafter raised or re-litigated. First, the decision precludes any party to the litigation from disputing the correctness of the earlier decision in law and fact. Secondly, the right or cause of action is extinguished, merging in the judgment which is pronounced in the earlier proceedings. At a practical level cause of action estoppel (or res judicata) is a defence to a claim made in legal proceedings and, if established, is a complete bar to subsequent proceedings.
3. In contrast, issue estoppel may arise if an issue of fact or law is determined between parties in earlier proceedings and the same parties are subsequently involved in litigation where one of the parties seeks to re-litigate the issue of fact or law, regardless of whether the cause of action is the same. Issue estoppel may be raised as a defence to the claim made in the subsequent proceedings.
4. Anshun estoppel is an extension of the public policy principle to the effect that a party may be estopped from litigating an issue which properly should have been raised in earlier proceedings.
5. The Appeal Panel considered the scope of s 55(1)(b) of the CAT Act In BDK v Department of Education and Communities and concluded at [66] that the intent of the provision was "to give the Tribunal a broad power to deal with abuses of its processes." As noted in BDK at [75], summary dismissal of a claim as an abuse of process is a procedure which is discretionary in nature and the exercise of such discretion should not be upset unless it miscarries in the way described in House v King.
6. As we understand Mr Pickering's submissions, although he refers to issue and Anshun estoppel in his grounds of appeal, his claim is based on res judicata. The appellant contends Mr and Mrs Yi's claim is barred and should be struck out because their claim was dismissed on 17 October 2014. Alternatively, Mr Pickering argues that, given the history of the matter, the current claim made by Mr and Mrs Yi is an abuse of process.
7. For cause of action estoppel to operate there must be a final decision based on the establishment or failure to establish a cause of action. There must be a final judgment or decision "on the merits," not merely on the failure of a party to appear or to comply with a procedural order (refer Telesto Investments at [186] to [188] and the authorities cited).
8. As noted by the Member in the decision at first instance, there was no res judicata arising from the order made on 17 October 2015 because there was no hearing on the merits of the substantive claim. We concur with this finding and the conclusion of the Tribunal at first instance. According to the reasons, and this was not contested, Mr and Mrs Yi's claim was dismissed because there was no written authority provided to the Tribunal about their representation by another party and they did not attend the hearing. It is apparent their claim was dismissed under s 55(1)(c) of the CAT Act for non-appearance. There was no consideration of the merits of their claim, unlike Mr Daniel Yi's claim, which was considered and dismissed on the grounds he was not a consumer within the meaning of the CCA. As such, the Tribunal was not compelled to strike out the claim on this basis and there was no error.
9. Even though the Tribunal did not specifically deal with the issue of abuse of process, it is implicit the Member was not satisfied the claim should be struck out on this basis.
10. While this was the third claim made against Mr Pickering relating to similar issues, the first claim did not involve Mr and Mrs Yi and to the extent the second claim was dismissed, it was struck out on the merits against Mr Daniel Yi, not against Mr and Mrs Yi. It is relevant to note that, even though Mr and Mrs Yi did not apply for reinstatement of the second claim under s 55(2) of the CAT Act, they could have done so because the claim was dismissed under s 55(1)(c). If they had made such an application, it is more likely than not the Tribunal would have allowed reinstatement on the basis there was a "reasonable explanation for their failure to attend." Instead, Mr and Mrs Yi commenced fresh proceedings, raising the same issues. It is therefore difficult to identify prejudice or significant inconvenience to Mr Pickering in Mr and Mrs Yi lodging a fresh claim within weeks of the dismissal of their first claim, rather than applying for reinstatement.
11. The prejudice to Mr Pickering is the costs he has incurred in defending multiple proceedings. However, those costs principally relate to the unsuccessful claims made by Mr Daniel Yi. The appellant could have applied for costs against Mr Daniel Yi on the dismissal of the second proceedings and he may have succeeded in establishing special circumstances under s 60 of the CAT Act given the second claim was similar to the first claim that had already been dismissed. These multiple claims against Mr Pickering have no doubt been time consuming for Mr Pickering to defend but this does not, of itself, establish an abuse of process of process by Mr and Mrs Yi.
12. Accordingly, there was no error by the Tribunal of the nature described in House v King and the decision to decline to dismiss Mr and Mrs Yi's claim as an abuse was reasonably open.
13. Having regard to these matters, we reject Mr Pickering's contention that Mr and Mrs Yi's claim should have been dismissed or struck out by the Tribunal at first instance of the basis of res judicata or as an abuse of process.

Was the claim without legal merit?

1. The principal focus of Mr Pickering's submissions was the contention that the Tribunal at first instance had misapplied sections 13 and 64C of the Duties Act in failing to dismiss Mr and Mrs Yi's claim. Mr Pickering submitted this was an error of law by the Tribunal at first instance and the decision should be set aside and substituted with a decision that Mr and Mrs Yi's claim be dismissed.
2. As already noted, Mr Pickering's application was, in effect, an application for summary dismissal. Such a decision is discretionary in nature. However, we accept that if the Tribunal made an error in applying legal principles, the decision to refuse the application would be vulnerable to be set aside, consistent with the principles in House v King.
3. Ultimately, the issue is whether the legal principles are clear or whether there is a triable dispute about the matter. The formulation of the test to be applied in summary dismissal applications was considered by the Court of in Shaw v State of New South Wales [2012] NSWCA 102. The Court of Appeal summarised the relevant question at [32] as follows: The question is therefore whether the claims in question is so obviously untenable or groundless that there is "a high degree of certainty" that they will fail if allowed to go to trial; and whether this is one of the clearest of cases in which the court may accordingly intervene to prevent the claims being litigated.
4. The issue was considered more recently by the Court of Appeal in Ke Qin Ren v Hong Jiang; Yi Cheng Jiang v Wan Ze Property Development (Aust) Pty Ltd (in liq) [2014] NSWCA 388 at [49] - [51] as follows: 49The test to be applied before entering summary judgment has been variously stated, and little is to be gained by reiterating those formulations; cf General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129. There is no controversy that the power must be exercised with "great care" and "exceptional caution": Spencer v Commonwealth [2010] HCA 28; 241 CLR 118 at [24] and [55] (noting that this was said of the lesser standard made applicable by s 31A of the Federal Court of Australia Act 1976 (Cth)). In Spencer, Hayne, Crennan, Kiefel and Bell JJ referred to the (unamended) test as "requiring formation of a certain and concluded determination that a proceeding would necessarily fail": at [53]. Repeatedly, it has been said that the court must be so certain of the outcome that to permit the proceeding to go forward would amount to an abuse of process: Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 90; Spencer at [54]; O'Brien v Bank of Western Australia Ltd [2013] NSWCA 71; 16 BPR 31,705 at [3] and [67]. 50The primary judge did not expressly invoke any of those formulations. His Honour stated that it was "necessary for the Court to reach a high level of satisfaction that the order should be made, and the power to order summary judgment should be sparingly employed": at [29]. That is undoubtedly necessary, but falls short of what is sufficient, before a litigant is denied of the ordinary right to a contested hearing. 51The matters referred to above mean that had the correct test been applied, the primary judge would not have been "so certain" of the plaintiffs' success that allowing the proceeding to go forward would have been an abuse of process, or that the defendants would "necessarily fail".
5. Having regard to these principles, the Appeal Panel is of the view that the Tribunal at first instance was not in error in refusing to dismiss the claim as having no legal merit. This decision was clearly open to the Tribunal for the following reasons.
6. It is convenient to first set out the background to the claim and the contentions raised by Mr Pickering.
7. The Tribunal rejected Mr Pickering's claim because it was not satisfied on the balance of probabilities that Mr Daniel Yi was solely responsible for the additional duty. In particular, the Tribunal noted that "the situation was more complex than the usual cases" and it was "not sufficiently clear" on the correspondence from the OSR that Mr Daniel Yi was solely liable for the extra duty.
8. Mr Pickering submitted the Tribunal relied on letters from the OSR dated 6 May 2013 and 10 July 2013 but did not review the relevant legislative provisions. According to Mr Pickering, if the Member had done so she would have made a different decision as to who was liable to pay stamp duty and therefore should have concluded the issue on jurisdiction in his favour. He submitted that the correspondence from the OSR was wrong and therefore the finding of the Tribunal based on this correspondence was in error.
9. Mr Pickering further submitted that the provisions of the Duties Act are clear. Liability for additional stamp duty was solely Mr Daniel Yi's responsibility. In summary, Mr Pickering contends: 1. Section 12 of the Duties Act provides that liability for duty arises when a transfer of dutiable property occurs but if a transfer is effected by a written instrument, liability arises when the instrument is first executed (subs (1) and (2)). Liability for duty arises even if the dutiable property is not in existence (subs (3)). 2. Section 9 provides for the imposition of duty on dutiable transactions that are not transfers. Relevantly, s 8(1)(a) and (b) provide for duty on an agreement for the transfer of dutiable property and s 9 provides that duty is payable as if there was a transfer. The transferee is liable for the duty (s 9(2)(b)). 3. Under s 12, liability for duty under the agreement for the sale of land as between the vendor and Mr and Mrs Yi was a separate liability from the transfer involving Mr Daniel Yi. 4. Section 13 provides that duty charged is payable by the transferee unless provided otherwise. 5. Section 64C provides that where there is a transfer made in partial conformity with an agreement and duty has been paid, duty is only payable on the excess portion. According to Mr Pickering, at paragraphs 28 and 29 of his submissions: 28………………Section 64C charges the liability on the part of the dutiable property that goes to a person who is not a purchaser under the agreement for sale. 29. The effect of section 64C is to charge duty on a transferee that has not paid duty under the agreement for sale and that requires another person to pay duty as stated in section 13. 1. It is therefore clear that there is liability for duty on the agreement for the sale of land by Mr and Mrs Yi but there is separate liability in respect of the transfer of part of the dutiable property to another transferee, namely Mr Daniel Yi. This is consistent with s 18(3) which provides that there should be "no double duty" on a dutiable transaction. The OSR wrongly focused on whether the exemption in s 18(3) applied and did not take into account that there that there were in fact two separate transactions.
10. It is true the OSR did not consider the arguments set out above. However, this is not surprising because it is apparent Mr Pickering did not raise these submissions in his correspondence with the OSR after the OSR issued the notice of assessment which is at the heart of this dispute between the parties.
11. The Appeal Panel was not provided with a copy of the original assessment but it was clearly issued some time before 29 April 2013, which is the date Mr Pickering wrote to the OSR requesting a review of the assessment. In his letter, Mr Pickering explained the circumstances leading to Mr Daniel Yi being added as a purchaser to the transfer and requested that duty be waived. He stated as follows: I was of the understanding that the added party was in fact the son. I personally have not met the person who turned out to be a grandson and I was not aware that it was the intention to put the grandson onto the contract. Had I been aware, I would have advised my clients that there would be additional stamp duty payable because grandchildren did not come under the definition of "related persons".
12. Section 18 of the Duties Act allows exemptions from ad valorem duty when a dutiable transaction is affected by more than one instrument. The provision, which is headed "no double duty," provides that duty chargeable is $10 in respect of a transfer which is made in conformity with an agreement or sale of dutiable property if the duty has already been paid on the agreement (s 18(2))) or, if the transfer is not in conformity with an agreement, on satisfaction of all of the conditions set out in subs (3), which includes where the purchaser under the agreement and the transferee are "related persons." This term is defined in the Duties Act and is limited to the relationship of spouse, de facto partner, parent and sibling or the spouses and de facto partners of a parent or sibling.
13. The OSR responded by letter dated 6 May 2013 to the effect that there was no exemption under s 18(3) because Mr Yi was not a related person but, in accordance with s 64C of the Duties Act, duty would only be charged on the excess proportion of the dutiable value of the dutiable property transferred. It is implicit the OSR considered that the addition of Mr Daniel YI on the transfer effected a second transfer in respect of which ad valorem duty would have been payable but for s 64C. The OSR therefore treated this transaction as a transfer made in partial conformity with the agreement for the sale of dutiable property. The OSR refused to waive the duty.
14. Mr Pickering wrote to Mr and Mrs Yi on 14 May 2013 and advised them of the OSR ruling. He also advised that the only course available was to lodge an objection, which it appears he was instructed to do. Mr Pickering lodged an objection by letter dated 16 May 2013. He did not raise the matters set out in paragraph 75 of these reasons.
15. The OSR disallowed the objection and provided reasons in their letter of 10 July 2013. In summary, the Chief Commissioner was satisfied that the purchase of the property involved two dutiable transactions. The first was the agreement for the sale of land between the vendors and Mr and Mrs Yi, which was assessed and stamped with ad valorem duty based on the purchase price. The second was a transfer from the vendor to Mr and Mrs Yi and Mr Daniel Yi. This transaction was not entitled to be assessed at the concessional rate of $10 because it was not in conformity with the agreement for sale of land entered into by Mr and Mrs Yi (s 18(2)), nor was Mr Daniel Yi a related person under s 18(3). The transfer was made in partial conformity and therefore duty only applied to the excess proportion under s 64C. In other words, the Chief Commissioner agreed with the earlier decision of 6 May 2013 and confirmed that the duty was payable.
16. Mr Pickering advised Mr and Mrs Yi of the ruling and thereafter there was correspondence between Mr Pickering and Mr and Mrs Yi, through their son Mr Edward Yi, about who was responsible for the additional stamp duty liability. A complaint was made to the Office of the Legal Services Commissioner but Mr and Mrs Yi were advised by letter dated 27 February 2014 that the complaint "raised no issues of serious misconduct."
17. We agree with the decision of the Tribunal not to dismiss the claim on the basis it had no legal merit but for different reasons from those set out in the decision. The argument before the Tribunal at first instance and Mr Pickering's submissions in this internal appeal proceeded on a misconceived premise.
18. Mr Pickering contention is that, as a matter of fact and law, Mr Daniel Yi was solely responsible for the additional duty and therefore Mr and Mrs Yi suffered no loss. This is clearly not the case.
19. The OSR issued an assessment against Mr and Mrs YI and Mr Daniel Yi for additional duty on the transfer. Under sections 8 and 14 of the Tax Administration Act 1996 (NSW) (the TAA) the Chief Commissioner may make an assessment of tax liability of a taxpayer and issue a notice of assessment. Tax liability includes liability under the Duties Act (s 4). Section 119 of the TAA provides that production of a notice of assessment is "conclusive evidence" of the due making of the assessment and "that the amount and all particulars of the assessment are correct, except in objection or review proceedings when it is prima facie evidence only." Part 10 of the TAA provides for the review of objection decisions made by the Chief Commissioner by this Tribunal (and previously to the Administrative Decisions Tribunal) or the Supreme Court.
20. It is apparent that Mr and Mrs Yi and Mr Daniel Yi did not seek to challenge the objection decision. They have attached to their reply to the notice of appeal correspondence from the OSR dated 19 March 2014 noting the amount payable by Mr and Mrs Yi and Mr Daniel Yi as $7,063.23, comprising $6424.50 for duty on the transfer and $638.73 for interest.
21. There is no evidence that there has been a review of the assessment or that the assessment has been set aside or varied. In the absence of a successful review, the tax liability for duty therefore remains due and payable. Accordingly, Mr and Mrs Yi remain jointly liable with Mr Daniel Yi for the additional duty, including any interest thereon, as assessed. This is evidenced by the notice dated 19 March 2014.
22. The claim by Mr and Mrs Yi against Mr Pickering is for alleged incorrect advice. They assert Mr Pickering should have advised them about the potential duty liability. Mr Pickering denies he provided any advice or that advice was sought from him. This issue will ultimately be the subject of a contested hearing on liability.
23. The issue of whether the OSR assessment was correct may be relevant to the claim for compensation if, for instance, Mr Pickering argues Mr and Mrs Yi should have appealed the objection decision of the Chief Commissioner. However, this issue is not relevant to the question of whether there is any legal merit to their claim and whether there is a triable issue for determination by the Tribunal. It was therefore not necessary for the Tribunal at first instance, nor is it necessary for the Appeal Panel, to determine the question of whether the OSR was wrong in its assessment.
24. Accordingly, there was no error by the Tribunal at first instance in declining to dismiss Mr and Mrs Yi's application on this basis.

Costs

1. Section 60 of the CAT Act provides: (1) Each party to proceedings in the Tribunal is to pay the party's own costs. (2) The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs. (3) In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following: (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings, (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, (c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law, (d) the nature and complexity of the proceedings, (e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, (f) whether a party has refused or failed to comply with the duty imposed by section 36 (3), (g) any other matter that the Tribunal considers relevant.
2. The power to award costs is a discretionary decision. It is clear from the reasons that the Tribunal considered a number of the matters referred to in s 60(3), including the fact the proceedings were complex and required a hearing on the merits. The Tribunal was not satisfied that the claim had no legal merit and rejected Mr Pickering's application that the claim be dismissed. Mr and Mrs Yi therefore succeeded in defending the claim for summary dismissal. There was no evidence to suggest they were at fault in delaying the proceedings or causing disadvantage for Mr Pickering. For the reasons outlined above, we accept Mr and Mrs Yi have raised a triable issue. Ultimately, any prejudice to Mr Pickering was caused by the prosecution of a misconceived claim on multiple occasions by Mr Daniel Yi. This cannot be attributed to Mr and Mrs Yi.
3. Accordingly, the decision made by the Tribunal at first instance to dismiss Mr Pickering's application for costs was reasonably open to the Tribunal and we are not satisfied the decision should be set aside.

Conclusion

1. Having regard to these matters the Appeal Panel: 1. Grants leave to the appellant to appeal from the interlocutory decision of the Tribunal made on 9 February 2015; and 2. Dismisses the appeal. 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: 05 August 2015