This is an appeal from a decision of the Consumer and Commercial Division of the Tribunal in two matters. The central issue in the proceedings was the entitlement of the parties to an amount of $4,039.74, which represented the balance of a holding deposit, paid to secure a unit in an "off-the-plan" development, which had been refunded by the solicitors for the developer when the proposed purchase was cancelled.
The factual background to the dispute as set out in the decision under appeal was as follows:
5. It was agreed between the parties that at the time of supply of the services in lodging the deposit, Ms Kim and Ms Chung had been good friends for many years, perhaps 36 years. Ms Kim was in training to become a real estate agent but not yet licensed. She was working with a real estate agency trading as "Home 789". They had been involved in financial transactions together in the past.
6. On this occasion, [Ms Chung's] evidence was that [Ms Kim] telephoned her about a good offer to secure a unit in an off the plan development being offered "at a family price".
7. On 19 November 2014 [Ms Chung] and [Ms Kim] attended Home 789 and both lodged an Expression of Interest (EO) along with another mutual friend, Ms Hur.
8. [Ms Chung] claims that, [on] 19 November 2014, in the company of Ms Hur, she gave Ms Kim $5,000, being the deposit required to secure the unit, with a further deposit of $61,800 due six months later.
9. [Ms Kim] claims that [Ms Chung] deposited $1,000 into her nominated account on 21 November 2014 and that she personally advanced the balance of the $5,000, ie $4,000.
10. [Ms Chung] did not proceed with the purchase and it is common ground that [Ms Kim] told her that she was in danger of being sued for the balance of the deposit as she had signed a contract to purchase the property. Both were very stressed about this, with Ms Kim giving evidence that she felt extremely pressured by Home 789 and the developer to encourage Ms Kim [sic, we infer that the Member intended to refer to Ms Chung] to complete the purchase and Ms Kim [sic] being frantic due to problems with cash flow.
11. It was common ground that during most of 2015 Ms Kim was of the view that Ms Chung would be fortunate to avoid being sued for the balance of the deposit and would not be able to retrieve her $5,000.
12. [Ms Chung] gave evidence (that was not rebutted) that in November 2015 [Ms Kim] telephoned her and wanted to cancel the contract for [Ms Chung] and saying that she could cancel it. She did not say that there was any possibility of retrieving the $5,000. Ms Chung sent Ms Kim a copy of her driver's licence and signature and authorised her to "cancel/rescind the lot 188, unit B609, Arncliffe project and act on my behalf in relation to the property".
13. In April 2018, [Ms Chung] began a real estate certificate course and discussed this matter with her instructor, who indicated that there was something strange in the fact that she was unable to retrieve her deposit.
14. From there, [Ms Chung] made a number of enquiries of Home 789, her solicitor and the developer and learned that [Ms Kim] had been able to secure a refund of $4,039.74 (being release of the $5,000 deposit, less $1,100 for vendors costs as per deed of release but plus interest) that had been paid into the bank account of [Ms Kim], apparently upon the direction of [Ms Chung].
By application COM 18/50178 filed on 22 November 2018 Ms Chung sought payment from Ms Kim of the amount of the returned deposit, that is $4,039.74, together with other orders which the Tribunal held were clearly outside the jurisdiction of the Tribunal and are not the subject of this appeal.
By her application, proceedings COM 18/54165, Ms Kim counter-claimed seeking:
"Dismissal of Ms Kyung Hee Chung's claim as I was not working as an agent at the time the arrangement was entered into (19/11/14). I helped her in a personal capacity. I was registered as an agent on 12.2.15. Alternatively, I am seeking $9,900 personal costs plus $2,200 legal fees and $330 NAATI translation fee".
The claim for "personal costs" was held by the Tribunal to be outside the jurisdiction of the Tribunal and is not the subject of this appeal.
By the decision under appeal the Tribunal ordered Ms Kim to pay Ms Chung the sum of $4,039.74 and dismissed Ms Kim's application. Although Ms Kim's Notice of Appeal identifies that the appeal is brought in respect of the decision in respect of both applications, the only order challenged in the Notice of Appeal is the order that Ms Kim pay Ms Chung the sum of $4,039.74.
[2]
The Tribunal's decision
The Tribunal decided it had jurisdiction to determine the claim on the basis that it was a consumer claim as defined in s 79E of the Fair Trading Act 1987 (NSW) because the claim involved the supply of services by the respondent "namely placing the deposit, rescinding the contract and retrieving the deposit".
Ms Kim's case, as presented to the Tribunal and argued before the Appeal Panel, is that she was entitled to retain the $4,000 because Ms Chung had never provided that money in the first place. Ms Kim's case was that at the time Ms Chung sought to secure a unit in the development, Ms Chung had only been able to pay $1,000 and that Ms Kim had herself provided the balance of the $5,000 holding deposit, that is $4,000. In support of her case Ms Kim relied upon a text message dated 21 November 2014 from Ms Chung to Ms Kim (translated from the Korean language by an accredited translator) in which Ms Chung said (as translated):
"I've first deposited $1,000 in cash. I will let you of what to do with the reminder of $4,000".
Ms Chung disputed that version of events and asserted that she had provided $5,000 in cash to Ms Kim for the payment of the holding deposit.
The Tribunal identified the "key question for determination" as:
"Whether the Tribunal is satisfied, on the balance of probabilities, which is the civil standard of proof, that [Ms Chung] provided [Ms Kim] with $5,000 in cash, as claimed, to deposit on purchase [sic] of the unit by [Ms Chung] or whether the Tribunal accepts the explanation of [Ms Kim] that [Ms Chung] only paid $1,000, with the balance advanced by [Ms Kim]."
The Tribunal set out its reasoning in respect of this question in paragraphs 22 to 28 of her reasons as follows:
22. The evidence of [Ms Chung] as to her having provided [Ms Kim] with $5,000 for the purpose of the deposit, whilst in the company of Ms Hur, is consistent with her claim that [Ms Kim] showed her a copy of the receipt for the $5,000 by coming downstairs from the real estate agency and permitting her to take a photo shot of it. A photo of the receipt was in evidence.
23. The claim of [Ms Kim] that the text of 21 November regarding deposit of $1,000 by [Ms Chung] is rebutted by [Ms Chung], who says that this $1,000 was for a down payment for her friend Ms Hur to pay a deposit, not for her own deposit. That is consistent with her merely saying that she would let [Ms Kim] know what to do with the remainder of the $4,000 rather than undertaking to pay it herself.
24. There is no other evidence that [Ms Kim] advanced the sum of $4,000 to [Ms Chung].
25. The response of [Ms Chung] to finding out that there had been a refund is consistent with her having paid the $5,000 to [Ms Kim]. Even when confronted, [Ms Kim] failed to admit that there had been a refund, which suggests that there was an attempt to hide the fact of the refund from [Ms Chung]. If $4,000 were rightfully retained by [Ms Kim], it could reasonably have been expected that [Ms Kim] would raise that when asked about the refund.
26. Considering the lengthy friendship between the two parties up until that time, it could have been expected that once [Ms Kim] became aware that a refund could be obtained, probably in November 2015, that she would advise [Ms Chung] of that. If it were correct that the refund was largely or entirely to her, it could still have reasonably been expected that [Ms Kim] would advise [Ms Chung] that a refund would be paid, for transparency and honest dealing. At no stage did she do so and, when asked very directly "Where is my money?" by [Ms Chung], evaded giving a full and complete response.
27. It could also reasonably have been expected that when a Deed of Release was presented to [Ms Kim], that she would, if only to protect herself, have notified [Ms Chung] of that and sent her a copy, given that it was a formal legal document that not only rescinded the contract but gave certain releases and indemnities. She did not do so but instead appended the signature of [Ms Chung] to the document and claimed the refund.
'
28. Executing the Deed of Release and retaining the refund went beyond the authority that [Ms Kim] had been given by [Ms Chung] to attempt to rescind the contract on her behalf.
The Tribunal concluded that it preferred the evidence of Ms Chung and held that Ms Kim had not lent Ms Chung $4,000 and that the Tribunal was empowered under s 79N(a) of the Fair Trading Act to order the repayment to Ms Chung of the moneys received by Ms Kim.
[3]
The Scope and Nature of Internal Appeals
By virtue of s 80(2) of the Civil and Administrative Tribunal Act, 2013 (NSW) (NCAT Act) internal appeals from decisions of the Tribunal may be made as of right on a question of law, and otherwise with leave of the Appeal Panel.
The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Schedule 4 of the NCAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice 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).
In Collins v Urban [2014] NSWCATAP 17, the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Schedule 4 may have been suffered where:
… there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance.
Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Schedule 4, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b).
In Collins v Urban, the Appeal Panel stated at [84] that ordinarily it is appropriate to grant leave to appeal only in matters that involve:
(a) issues of principle;
(b) questions of public importance or matters of administration or policy which might have general application; or
(c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand;
(d) a factual error that was unreasonably arrived at and clearly mistaken; or
(e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed.
[4]
The Notice of Appeal
The grounds of appeal identified by Ms Kim in the Notice of Appeal were as follows:
1. The order is being appealed on the basis that the decision was against the weight of the evidence and significant new evidence is available that was not reasonably available at the time of the hearing.
2. Procedural unfairness arose from a lack of reasonable opportunity to present my case under conditions that disadvantaged me against the applicant.
Ms Kim provided lengthy submissions in the relevant part of the Notice of Appeal setting out reasons why she asserted the decision was not fair and equitable, that the decision was against the weight of evidence, and that there was significant new evidence now available that was not reasonably available at the time of the hearing.
Notwithstanding that Ms Kim marking "no" on the Notice of Appeal in answer to the question of whether leave was sought, it is clear from the Notice of Appeal that Ms Kim did in fact challenge the factual findings. Consequently, we will proceed on this basis.
Ms Kim's second ground of appeal, that there was procedural unfairness, raises a question of law and Ms Kim does not require leave of the Tribunal to raise that ground: Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [13(4)].
We have also considered whether Ms Kim's Notice of Appeal raises other questions of law, which may not be clearly spelled out. As an Appeal Panel held in Cominos v Di Rico [2016] NSWCATAP 5 at [12]-[13]:
12 The Appeal Panel must give effect to the guiding principle when exercising functions under the CAT Act, which is to "facilitate the just, quick and cheap resolution of the real issues in the proceedings" (s 36(1)). This is reinforced by s 38(4) which provides that the Tribunal is required to act with "as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms."
13 It may be difficult for self-represented appellants to clearly express their grounds of appeal. In such circumstances and having regard to the guiding principle, it is appropriate for the Appeal Panel to review an appellant's stated grounds of appeal, the material provided, and the decision of the Tribunal at first instance to examine whether it is possible to discern grounds that may either raise a question of law or a basis for leave to appeal. The Appeal Panel has taken such an approach in a number of cases, for instance, Khan v Kang [2014] NSWCATAP 48 and Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69. However, this must be balanced against the obligation to act fairly and impartially (Bauskis v Liew [2013] NSWCA 297 at [68] citing Hamod v State of New South Wales [2011] NSWCA 367 at [309]-[316]). Relevantly, s 38(2) provides that that Tribunal "may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice."
[5]
Denial of Procedural Fairness
It is convenient to deal with this ground first.
In her Notice of Appeal and in oral submissions to the Appeal Panel, Ms Kim stated that she had been denied a reasonable opportunity to present her case because she was not given an opportunity to respond to what she described as untrue statements by Ms Chung and because "the Senior Member spent a significantly longer amount of time listening to the applicant and I was not given an equal amount of time to respond to the matter and explain my side in full."
On 23 May 2019 directions were made requiring Ms Kim to lodge with the Tribunal and provide to Ms Chung by 14 June 2019:
(a) All the evidence provided to the Tribunal below on which it is intended to rely;
(b) The appellant's written submissions in support of the appeal; and
(c) The sound recording of the hearing at first instance, if what happened at the hearing is being relied on and a typed copy of the relevant parts.
Ms Kim did not provide a transcript of the entire hearing below. She provided only a transcript of limited parts of the hearing which did not include the evidence and submissions presented by Ms Kim.
In the absence of the full transcript and the appellant identifying precisely the manner in which she was denied an opportunity to be heard, we are not satisfied this ground has been established.
The mere fact that Ms Chung spoke for longer than Ms Kim does not, of itself, establish any error by the Tribunal. In this regard it is often the case that the nature of the issues arising means that one party or the other may spend longer in presenting their case. Otherwise, there is no basis to conclude the appellant was not afforded an opportunity to respond to the evidence of Ms Chung.
It follows that this ground of appeal must be dismissed.
[6]
Leave to appeal
In support of her appeal on this basis, the appellant relied on evidence originally before the Tribunal and new evidence. This new material, in part, consisted of text messages.
Although Ms Kim submitted that the Appeal Panel should receive the additional material on the basis that it had not been reasonably available at the time of the initial hearing, we do not accept this submission.
Ms Kim had put before the Tribunal at the initial hearing translations of a number of text messages between herself and Ms Chung. Much of the additional material upon which Ms Kim sought to rely before the Appeal Panel was translations of further text messages also exchanged between Ms Kim and Ms Chung. Ms Kim informed the Appeal Panel that she had not obtained translations of those text messages before the initial hearing because she did not want to incur the expense of translation and did not realise that she would want to rely upon them.
It could not be said that that material was not reasonably available to Ms Kim at the time of the initial hearing: Al-Daouk v Mr Pine t/as Furnco Bankstown [2015] NSWCATAP 111. Accordingly, Ms Kim has failed to establish a basis for the grant of leave to appeal by reference to the further evidence.
[7]
A further ground of challenge
We have set out at para 11 above the Tribunal's reasons for preferring the evidence of Ms Chung over that of Ms Kim. Included in those reasons, at [24], was the finding that apart from the text message referring to a deposit of $1,000 (referred to at [23]) "there was no other evidence that the Respondent advanced the sum of $4,000 to the Applicant".
By reason of the way in which both parties presented their appeal papers, it was not entirely clear to the Appeal Panel what documents had been placed in evidence before the Tribunal. However, the documents attached to Ms Kim's original application to the Tribunal were clearly before the Tribunal at the initial hearing.
Among the documents attached to Ms Kim's original application were two pages of a bank statement for an ANZ Business Advantage account in the name of "Hyun Ja & Jin Sam Lim t/as Ecodal & Associates", which we understand was a joint account in respect of which Ms Kim was one of the account holders.
The bank statement recorded withdrawals on 20 November 2014 of amounts of $15,000 and $1,000 (by cheque) and a deposit on 21 November 2014 of $1,000. Handwritten annotations on the bank statement record, in relation to the $15,000 cheque: "Kim paid to Home 789 for 3". There follows a mark which is unclear but might be an H or a hash (ie #). Under those words there appears "$5000 x 3 people" and the names "Kim, Chung, Hur".
In relation to the deposit of $1,000 the document bears the words "Chung cash, ARN" and "Chung paid cash".
The significance of these annotations does not appear to have been dealt with by the Tribunal in its reasons and it is unclear what, if any, oral evidence was given about these matters by the parties at the hearing. However, in our view, the document constitutes some evidence which might support Ms Kim's case that she advanced the sum of $4,000 in respect of Ms Chung's holding deposit.
The documents included in Ms Kim's appeal bundle included a version of that bank statement which did not include the words "$5,000 x 3 people" and "Chung paid cash" but did include the other annotations.
Ms Kim's appeal bundle also included a copy of a cheque stub relating to the cheque for $15,000 recorded in the bank statement, which bore the annotation "K Chung B609 $1,000 cash paid $4,000 lended by Ecodal & Co".
In response to an enquiry from the Appeal Panel, Ms Chung agreed that this document had been before the Tribunal Member. However, it is not entirely clear to us that that concession was accurate. Nevertheless, even if only the bank statement had been before the Tribunal, it could not be said that there was "no other evidence" (that is apart from the text message of 21 November 2014 which referred to a deposit of $1,000) to support the claim that Ms Kim advanced $4,000 to Ms Chung.
In our view, if the Tribunal took the bank statement into account, the Tribunal failed to explain adequately why this evidence did not support Ms Kim's version of events. If the Tribunal did not take the bank statement into account, it failed to analyse all the evidence before it. In either event the Tribunal failed to provide adequate reasons for accepting Ms Chung's evidence over Ms Kim's. It follows that the appeal should be allowed.
[8]
Disposition of the Appeal
In the absence of a full transcript of the hearing at first instance the Appeal Panel is not in a position to determine the proceedings itself. Accordingly, the decision of 23 April 2019 must be set aside and the proceedings must be remitted to the Consumer and Commercial Division for hearing consistently with these reasons. Further evidence should be permitted. This is because it is unclear if the parties had a chance to ask questions about the payments recorded in the bank statements and the circumstances surrounding the payments.
We note that in reaching this conclusion we make no comment concerning whether the annotations on the bank statement and the cheque stub were reliable or accurate, or even authentic. Those matters may be the subject of contest at the further hearing of these matters.
[9]
A Further Issue on remittal
As we have determined to remit the proceedings for rehearing, it is appropriate that note a further issue which Ms Kim did not raise in her grounds of appeal. That is the question whether the Tribunal had jurisdiction to determine Ms Chung's application. As appears from the matters which we have set out at [4] above, that question was squarely raised by Ms Kim's application (COM 18/54165). As noted above, the Tribunal determined it had jurisdiction pursuant to s 79E(b) of the Fair Trading Act as it involved the supply of services by Ms Kim.
In our view there is a question surrounding the conclusion that the Tribunal had jurisdiction as it is not clear that Ms Kim was herself conducting a business in 2014 when the payments were made or in 2016 when the deposit was refunded.
Under the Fair Trading Act, the Tribunal has jurisdiction to determine a "consumer claim". That term is defined in s 79E of the Fair Trading Act as: "a claim by a consumer [for one or more specified remedies], that arises from a supply of goods or services by a supplier to the consumer" (emphasis added).
"Supplier" is defined in s 79D of the Fair Trading Act as "a person who, in the course of carrying on (or purporting to carry on) a business, supplies goods or services".
The question whether Ms Kim was carrying on (or purporting to carry on) a business was not explored in submissions before the Appeal Panel and it is not clear from the material contained in the appeal papers to what extent it was addressed in the evidence before the Tribunal. However, in circumstances where it appears that Ms Kim was in November 2014, as the Tribunal held, "in training to become a real estate agent but not yet licensed" and "working with a real estate agency trading as 'Home 789'", there must be a question whether Ms Kim was in fact carrying on any business when she lodged the holding deposit and secured a contract for the purchase of an off-the-plan unit in Ms Chung's name.
If the relevant services were provided by Ms Kim in her capacity as an employee, then she, as opposed to her employer, could not be said to have been a supplier for any relevant purpose. Further, the evidence before us does not clearly indicate when she received the refund of the deposit, whether Ms Kim remained an employee in 2016, and, if so, whether Ms Kim's employer was privy to Ms Kim's receipt of the reimbursement of the $4,000 balance of the deposit. Questions must arise as to whether Ms Kim's employer was the appropriate or necessary respondent to Ms Chung's claim, and whether the Tribunal had jurisdiction to determine what may ultimately be a claim to moneys had and received by Ms Kim in a personal capacity. On the rehearing of these proceedings those questions should be dealt with by the Tribunal.
[10]
Orders
The orders of the Appeal Panel will be:
1. The appeal is allowed and the orders made 23 April 2019 are set aside.
2. The proceedings are remitted to the Consumer and Commercial Division of the Tribunal for rehearing consistent with these reasons.
[11]
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 19 September 2019