Hong v Wentworth Management Services

Grounds of Appeal

1. Mr Hong filed a Notice of Appeal on 5 January 2017. His stated Grounds of Appeal are that "[t]he Tribunal rejected the written evidences via emails. Instead the Tribunal accepted two false statutory declarations." Mr Hong says that this was not fair and equitable, and against the weight of the evidence. He says that the Tribunal should have given more weight to the written evidence provided by emails than the two false statutory declarations. He says that the email evidence provided at the hearing "self-prove" that the two statutory declarations are false and incorrect and were "thus perjury".
2. We understood that the statutory declarations referred to by Mr Hong were those executed by Mr Karasalidis and Ms Wong each on 21 November 2016. Mr Karasalidis relevantly states "I did not agree to a set price of $680 per week for the property…I did not agree to only one person at one time." Ms Wong relevantly states that she "never agreed on having" only one person "on the lease", and that she "never agreed" to $680 per week for the property.

Reply to Appeal

1. Wentworth filed its Reply to Appeal on 27 January 2017. In summary, it says it supports the orders made by the Tribunal for the reasons it gave.

Submissions

1. Mr Hong has provided a range of materials to the Appeal Panel. These include the bundles of materials filed as follows: 1. Materials filed on 22 November 2016 (25 pages). These include a chronology of events, submissions, a schedule of fees and expenses associated with "the current tenant" in the sum of $10,392.01 and with "the new tenant" in the sum of $9,165.80; and emails in the period 6 October 2016 to 18 November 2016; 2. Materials filed on 10 January 2017 (75 pages). These include submissions, the Tribunal's reasons for decision with each paragraph annotated by Mr Hong, together with the written evidence before Tribunal. 3. Materials filed on 30 January 2017 (32 pages). These include further submissions which indicate that Mr Hong is also seeking "an order for remedy" against the Licensee in Charge of Wentworth, Mr Shane Lightwood. 4. Materials filed on 24 February 2017 (107 pages).
2. The Appeal Panel notes Wentworth filed documents on 24 March 2017.

Fresh evidence

1. Both parties filed fresh evidence. Much of this concerned material that came into existence after the hearing before the Tribunal member at first instance, for example, correspondence from the Real Estate and Property Division of Fair Trading concerning Mr Hong's complaints to Fair Trading about Wentworth and correspondence between Wentworth and Mr Hong concerning the termination of the Agreement.
2. If the Appeal Panel is to exercise its discretion in favour of the party applying for leave, it must be "affirmatively satisfied" that, having regard to the findings of the Tribunal at first instance, the further evidence, if tendered at the hearing conducted by the Tribunal was "likely to have produced a different result" (Building Professionals Board v Hans [2008] NSWADTAP 13, at [54]; ZCK v NSW Trustee and Guardian [2016] NSWCATAP 200, at [25]). Importantly, it is the decision at first instance that the Appeal Panel must examine and it is not relevant to an examination of that decision whether the circumstances have changed since that time (QP v RP [2014] NSWCATAP 59, at [37]).
3. It is apparent from the dates of much of the new documentary material that those documents came into existence after the date of the hearing before the Tribunal. As this material is not evidence which was relevant to the Tribunal's decision at that time, but is information about how certain matters have transpired since the hearing, we find that the information should not be admitted on appeal. Leave to adduce this evidence is refused.
4. We also understood Mr Hong to submit as fresh evidence the amended Exclusive Management Agency Agreement between Mr Hong and Wentworth. This document had the date of the parties' signatures changed from "28/10/16" to "28/9/16". At the appeal, Mr Hong submitted that Wentworth made this change subsequent to the document being signed, that the respondent admitted the error and as a result the change made to the document amounted to "intentional fraud" on the part of the respondent and is another example of the respondent's "lies".
5. The difficulty with this aspect of Mr Hong's case is that the copy of the Agreement that he annexed to his original application to the Consumer and Commercial Division of the Tribunal in October 2016 was the amended Agreement. This was evidence already before Tribunal below, and before the Appeal Panel, and is not, therefore, fresh evidence.

Nature of Appeal

1. The decision under appeal is an "internally reviewable decision": ss 4 and 32(4) of the Civil and Administrative Tribunal Act 2013 (NSW) (CAT Act). A party may appeal an internally reviewable decision on any question of law or with the leave of the Appeal Panel on any other ground: s 80(2)(b) of the CAT Act.
2. Mr Hong has not identified any question of law in his Notice of Appeal. However, in circumstances where the appellant is not legally represented, it is appropriate for the Appeal Panel to approach the issue by looking at the grounds of appeal generally, and to determine whether a question of law has in fact been raised, subject to any procedural fairness considerations that might arise to the respondent: Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69, at [12].
3. For the reasons that appear below, we are satisfied that there was an error of law in the Decision. That error is a failure to give adequate reasons. In short, the Tribunal erred in failing to refer to certain email evidence that was before it.

The Decision of the Tribunal

1. It is appropriate to set out a summary of the relevant findings of the Tribunal as follows.
2. A meeting was held on or about 28 September 2016 between Mr Hong, Mr George Karasalidis, and Ms Angela Wong. They discussed renting Mr Hong's premises. Relevantly, it was Mr Hong's sworn evidence that the premises should be rented out at $680 per week, and that no more than one tenant reside there at any one time (the oral terms).
3. Mr Karasalidis and Ms Wong, on behalf of Wentworth, and Mr Hong signed the Agreement on 28 September 2016.
4. The Agreement did not contain the oral terms. However, that the agreed rental income could be an amount other than market rent is explicitly provided for in [3] of the Agreement: 3. The agent is authorised to let the premises for a term of twelve (12) Months at a market rent or as otherwise instructed & negotiated by the principal. [Emphasis added]
5. On 5 October 2016, Wentworth entered into a residential tenancy agreement with a tenant, for rent of $650 per week, with no more than three persons ordinarily living in the premises at any one time; the term of the residential tenancy agreement was 12 months.
6. The Tribunal had to determine whether or not the oral terms formed part of the Agreement. Mr Hong alleged that the execution of the residential tenancy agreement on those terms constituted a breach of the oral terms of the Agreement. As previously noted, the Tribunal had before it statutory declarations of Mr Karasalidis and Ms Wong both sworn 21 November 2016. Mr Karasalidis relevantly states "I did not agree to a set price of $680 per week for the property...I did not agree to only one person at one time." Ms Wong relevantly states that she "never agreed on having" only one person "on the lease", and that she "never agreed" to $680 per week for the property.
7. Neither Mr Karasalidis nor Mr Wong attended the hearing, and therefore they were not cross-examined on these statements. Mr Lightwood, who appeared at the appeal hearing, told us that neither had been available to give oral evidence at the hearing.
8. The Tribunal refers to Mr Hong's evidence at [12]. The Tribunal stated: [Mr Hong] has set out his evidence in his submissions of 13 December 2016. I have not set out the submissions in full. Suffice it to say that he alleges that Mr Karasalidis inspected the premises on 28 September 2016 and stated to Mr Hong that the property would be let out for $680 per week. It is stated that on 30 September Angela Wood offered the tenancy to a tenant at $650 per week. It is Mr Hong's evidence that he assumes that George and Angela did not speak, or exchange information and that George did not inform Angela that any weekly rent under $680 was not acceptable to Mr Hong. Contrary to instructions passed onto George, Angela entered into a residential tenancy agreement, signed and dated on 5 October.
9. The Tribunal then stated at [14]: I have had careful regard to the evidence of Mr Lightwood and Mr Hong and I prefer the agent's evidence over that of Mr Hong. Mr Karasalidis provided sworn evidence in a statutory declaration dated 21 November 2016 stating that he did not agree to a set price of $680 and states that "the rent was approved and market rent and I did not agree to only one person at one time". Angela Wong deposes that "I never agreed on having one person in the property only...Never agreed to $680 per week". I prefer the sworn evidence of Mr Karaslaidis and Ms Wong over that of Mr Hong. In doing so I have considered Mr Lightwood's sworn evidence who, as the principal of the agency, states that he would never have agreed to terms proposed by Mr Hong.
10. We note that the Agreement was signed by Mr Karasalidis on behalf of Wentworth, not Mr Lightwood. Mr Lightwood was not present at the discussions between Mr Hong, Mr Karasalidis, and Ms Wong on 28 September 2016.

Email of 25 October 2016

1. There was before the Tribunal an email dated 25 October 2016 from Mr Karasalidis to Mr Hong. This email relevantly states: The only thing that I did say we made a mistake for was that we didn't inform you of a change on the lease from 1 to 3 people as ordinarily staying in the property at the 1 time. Those people will be the tenant, her mother and brother. As they come from China on holidays time to time.
2. This was not referred to explicitly by the Tribunal in the written reasons. The statement of Mr Karasalidis in the email (namely that the agency made a mistake in not telling Mr Hong of a change in the residential tenancy agreement from one person to three), is difficult, on its face, to reconcile with the statement in his statutory declaration that he did not agree to only one person at one time. We asked Mr Lightwood how these statements could be read together, but Mr Lightwood had no explanation, stating that he could not think or speak for Mr Karasalidis. We also invited Mr Lightwood to make submissions on whether the Tribunal member's finding that she accepted Mr Karasalidis' evidence was against the weight of the evidence, and whether or not she took into account this email. Mr Lightwood submitted that as the Tribunal had referred generally to emails before it in the reasons, he assumed that the Tribunal member had taken the email into account.
3. We accept that this email was in evidence before the Tribunal, as it (and other emails) were attached to Mr Hong's application, and "emails" were collectively referred to by the Tribunal at [3] of its reasons. During the appeal hearing, we asked the parties whether they had any objection to the Appeal Panel listening to the sound recording of the hearing. Neither Mr Hong nor Mr Lightwood objected. Having listened to the sound recording, we are satisfied that Mr Hong drew the Tribunal member's attention to the email dated 25 October 2016 during the course of the hearing.

Error of law - inadequate reasons

1. It is well established that a failure to give proper reasons constitutes an error of law: Nancarrow v Donvito [2017] NSWCATAP 97; Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110; Holley v Evatt [2014] NSWCATAP 72. In Moloney v Collins [2011] NSWSC 628, Johnson J said at [63]-[65], (in the context of a civil hearing in the Local Court) that: 63. Failure to give reasons as required by law may itself disclose error of law: Pettitt v Dunkley [1971] 1 NSWLR 376; Soulemezis v Dudley (Holdings) Pty Limited (1987) 10 NSWLR 247 at 278-279. However, the extent and content of the reasons required will depend upon the particular case and the issues under consideration. 64. The duty does not require the trial Judge to spell out in minute detail every step in the reasoning process or refer to every single piece of evidence. It is sufficient if the reasons adequately reveal the basis of the decision, expressing the specific findings that are critical to the determination of the proceedings: Stoker v Adecco Gemvale Constructions Pty Limited [2004] NSWCA 449 at 41. It is essential to expose the reasoning on a point critical to the contest between the parties: Pollard v RRR Corporation Pty Limited [2009] NSWCA 110 at [58]. 65. Appropriate allowance should be made for the pressures under which Magistrates are placed by the volume of cases coming before them: Director of Public Prosecutions v Illawarra Cashmart Pty Limited [2006] NSWSC 343; 67 NSWLR 402 at 407-408 [15]-[18]."
2. In Pollard v RRR, at [66] per McColl J (Ipp JA, Bryson AJA agreeing) stated: 66. Because a primary judge is bound to state his or her reasons for arriving at the decision reached, the reasons actually stated are to be understood as recording the steps that were in fact taken in arriving at that result. Where it is apparent from a judgment that no analysis was made of evidence competing with evidence apparently accepted and no explanation is given in the judgment for rejecting it, it is apparent that the process of fact finding miscarried. This is because, so far as the reasons reveal, no examination was made of why the evidence which was accepted was to be preferred to that of other witnesses: Waterways Authority v Fitzgibbon; Mosman Municipal Council v Fitzgibbon; Middle Harbour Yacht Club v Fitzgibbon [2005] HCA 57; (2005) 79 ALJR 1816 (at [130] - [131]) per Hayne J (with whom McHugh J (at [26]) and Gummow J (at [27]) agreed)); see also Najdovski v Crnojlovic [2008] NSWCA 175 (at [21]) per Basten JA (Allsop P and Windeyer J agreeing).
3. The Tribunal's written reasons did not refer to the email of 25 October 2016. The significance of the email is that, at least at one stage, Mr Karasalidis (presumably on behalf of Wentworth given his references to "we" in the 25 October 2016 email) had agreed that there would only be one tenant residing in the premises (hence the change "on the lease from 1 to 3 people"). This is inconsistent with his statement in his statutory declaration that "I did not agree to only one person at one time." Mr Karasalidis' evidence on this issue was critical given that he was a signatory to the Agreement on behalf of Wentworth on 28 September 2016.
4. The issue of whether the oral terms formed essential terms of the Agreement was "a point critical to the contest between the parties" (Moloney v Collins, at [64]). Further, a process of fact finding will miscarry "where it is apparent from a judgment that no analysis was made of evidence competing with evidence apparently accepted and no explanation is given in the judgment for rejecting it" (Pollard v RRR, at [66]). In our view, this principle is applicable even though in this case the evidence (the 25 October 2016 email) that, on the face of it, potentially competed with the evidence accepted by the Tribunal member (the 21 November 2016 statutory declaration) was signed by the same person, namely Mr Karasalidis.
5. It is not possible to discern from the Tribunal's reasoning how it arrived at the finding that it accepted the evidence in Mr Karasalidis' statutory declaration that he "did not agree to only one person at one time" given Mr Karasalidis' statement in the 25 October email.
6. The Tribunal below failed to expose the reasoning that led to the finding that it did in relation to this critical point. As a result, we conclude that the Tribunal erred in law by failing to provide adequate reasons.
7. We note that the apparent inconsistency in Mr Karasalidis' two stated positions, if tested and considered, may have raised doubts as to the weight to be accorded to his evidence, especially as Mr Karasalidis was not available for cross-examination. This may have been relevant to other points critical to the contest between the parties, namely whether or not representatives of Wentworth agreed to rent the premises for $680 as claimed by Mr Hong. These are not matters, however, that we need to determine given our conclusion as to the adequacy of the reasons.
8. In determining an internal appeal, s 81 of the CAT Act provides that the Appeal Panel may make such orders as it considers appropriate in light of its decision on the appeal, including (but not limited to) orders that provide for any one or more of the following: 1. The appeal be allowed or dismissed; 2. The decision under appeal to be confirmed, affirmed or varied; 3. The decision under appeal to be quashed or set aside; 4. The decision under appeal to be quashed or set aside and for another decision to be substituted for it; 5. The whole or any part of the case to be reconsidered by the Tribunal, either with or without further evidence, in accordance with the directions of the Appeal Panel.
9. For the reasons set out below, it does not follow that, just because an error of law is identified, that the orders made by the Tribunal should be set aside and the matter remitted for rehearing. A not dissimilar scenario was considered recently by the Appeal Panel in McClenahan v Owners Corporation SP69904 [2017] NSWCATAP 112. The primary issue raised in that appeal was whether the Tribunal was correct to reject a valuation and certificate of unit entitlement in relation to a strata development on the basis that the relevant date for the valuation was the date the plan of consolidation was registered and not the date the original strata plan was registered (at [35]).
10. The Appeal Panel found that the Tribunal erred in concluding that the valuation and certificate of unit entitlements were not prepared at the correct date. However, for the reasons set out at [63] of the reasons, the Appeal Panel stated that its conclusion did not mean that the orders made by the Tribunal should be set aside and the matter remitted for rehearing. The Appeal Panel stated that although the Tribunal incorrectly concluded that the valuation was prepared at the wrong date, it also went on to consider whether or not the evidence provided by the valuer otherwise established that the allocation of unit entitlements was unreasonable. The Appeal Panel considered that unless that aspect of the decision was disturbed, it would be futile to remit the matter for further hearing.
11. An analogous position is faced by Mr Hong. As noted above, the core of his case was that Wentworth failed to comply with what he asserts are essential oral terms of the Agreement, one of which was, according to Mr Hong, that Wentworth failed to rent his property at what Mr Hong claims was the agreed amount of $680 per week. The Tribunal considered the alternative position, the position as claimed by Mr Hong and at [17] of its reasons stated: ...even if I accepted that $680 per week was the instruction given by the landlord to the agent, which I have not for the reasons set out above, the agent states that the market rate is within a range from $650 to a possible $680 and that there would have been no guarantee to secure a tenant at $680. The onus was on the landlord to establish, through documentary evidence, that the agent has let the premises under achievable market rent by reference to comparable premises in the area. He has failed to do so and I am not satisfied that a loss has been established.
12. Whilst we would have described the onus on Mr Hong as having to prove that the premises would have been rented at $680 per week, that being an achievable market rent, rather than having to prove that the agent had let the premises under achievable market rent by reference to comparable premises in the area, we essentially agree with the Tribunal's conclusion that Mr Hong failed to establish a loss. Having listened to the sound recording it is clear that Mr Hong was given a reasonable opportunity to present argument and submissions about the loss he asserts he suffered. As the Tribunal noted, however, there was no evidence filed by Mr Hong to support this aspect of his claim.
13. In Pollard, McColl JA stated at [67]: Where an appellate court concludes that the primary judge has failed to give adequate reasons, it has a discretion as to whether a new trial should be ordered. If the only conclusion open on the evidence available at trial was the conclusion reached by the primary judge, then, notwithstanding an inadequate statement of reasons, the matter need not go to a new trial: Beale (at 444) per Meagher JA applying NSW Insurance Ministerial Corporation (formerly Government Insurance Office (NSW)) v Mesiti (Court of Appeal, 1 December 1994, unreported).
14. For the reasons set out above, while we have identified an error of law, we do not consider that it is appropriate to order that the Tribunal reconsider this aspect of the matter. This is because, even if this matter were to be remitted to the Tribunal and reheard, Mr Hong had not established to the requisite civil standard that he had suffered a loss as a result of the breaches of the Agreement that he asserted. Nor did he challenge the Tribunal's findings in this respect in the appeal. In our view, the conclusion reached by the Tribunal member that a loss had not been established was the only conclusion open on the evidence available at the hearing and the matter should not be remitted. Nor is it open to the Appeal Panel to substitute another decision for the same reason, that is, a lack of evidence about comparable rents at the time the premises were rented.

Leave to Appeal

1. Mr Hong also submits in his Notice of Appeal that the Decision was not fair and equitable, and was against the weight of the evidence, as the Tribunal rejected his evidence about the oral terms, accepted instead two false statutory declarations, and failed to give weight to the email of 25 October 2016. These are matters that require a grant of leave.
2. Section 80 of the CAT Act states that an Appeal Panel may grant leave only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: 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).
3. In Collins v Urban [2014] NSWCATAP 17, an Appeal Panel stated in order to be granted leave to appeal, the appellant must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact.
4. We do not need to consider these grounds of appeal in any detail given that even if we were to decide that there was some substance to the grounds, we would not order that the matter be remitted for further consideration, or reconsider the matter ourselves for the reasons set out previously. Whilst Mr Hong is plainly aggrieved by the decision of the Tribunal, he had not filed any evidence which related to the economic loss he claims. Nor has he sought leave to appeal against any aspect of the Tribunal's decision in relation to damages.
5. In addition, ordinarily, it is appropriate to grant leave to appeal only in matters that involve issues of principle; questions of public importance or matters of administration or policy which might have general application; an injustice which is reasonably clear, so that it would be unjust to allow the finding to stand; 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.
6. We are not satisfied that the matters raised by Mr Hong raise any of these considerations. We decline to grant leave to appeal.

Orders The Appeal Panel makes the following orders: 1. The appeal is 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: 20 July 2017