Lee v Imad [2017] NSWCATAP 128 | Case summary

NCAT Appeal Panel|2017-04-28

Introduction 1. These directions are issued pursuant to section 26 of the Civil and Administrative Tribunal Act 2013 (NCAT Act) and set out the procedure which is to apply when the same Member assists in conciliation of a dispute in Consumer and Commercial Division proceedings and then if the matter fails to resolve, determines the matter at hearing. 2. The Tribunal is obliged pursuant to section 37 of the NCAT Act to promote the use of resolution processes such as conciliation to resolve or narrow the issues between them in the proceedings. The Tribunal's duty is also to resolve the real issues in proceedings justly, quickly, cheaply and with as little formality as possible. To meet both of these requirements the Tribunal may use the same Member to both conciliate and hear a matter, particularly in regional areas.

Hearing 1. If a matter is not resolved by conciliation the Member will advise the parties that the conciliation process has been concluded. 2. The Member will ask the parties whether they are ready to proceed to have their matter heard. 3. If the Member has taken part in the conciliation of the matter, the Member will ask the parties if they object to the Member proceeding to determine the matter. The Member will, in considering the objections raised, determine whether he/she will conduct the hearing or adjourn the matter to a later date before another Member. 4. If the matter is ready to proceed to hearing, the Member will outline to the parties that: 1. proceedings are no longer private and confidential and, where recording equipment is available, will be recorded; 2. any statements that were made or any concessions given in conciliation cannot be raised at the hearing unless both parties agree; 3. information about any settlement offers made in conciliation by either party cannot be raised during the hearing; 4. the inability to informally resolve the dispute by conciliation will not affect the outcome of the hearing. 1. When the hearing begins the Member will enquire of the parties whether there is agreement about any facts and issues so that only those issues still in dispute need to be determined at hearing.

Adjournments 1. Where the parties are not ready to proceed to hearing or the Member decided he/she will not conduct the hearing, the Member will make appropriate procedural direction to ready the matter for hearing on the next occasion.

It can be seen that the language of the Procedural Direction is mandatory. That is, the Member is to apply the procedures set out therein. That is consistent with the language of s 26 of the CAT Act which proscribes that Members (and parties) must comply with applicable procedural directions.

Did the Member comply with the Procedural Direction?

In our opinion, based upon the material before us, and in particular the transcript and the evidence of the appellant, it is clear that the Member did not comply with the Procedural Direction. He did not explain to the appellant the conciliation process at all, let alone in accordance with the Tribunal's procedures. Such procedures can be found, inter alia, in the NCAT Conciliation Fact Sheet which is appended to these reasons.
There is no evidence that the Member undertook any explanation of the different processes of him sitting as the Tribunal to hear and determine the dispute based upon the evidence of the parties and submissions they made as opposed to him acting as conciliator to assist the parties in reaching an agreement to resolve the issues in dispute between them. The simple fact that the parties were sent to separate private rooms, after the Tribunal Member had heard most, if not all, of the evidence in respect to the issues in dispute, is not enough to comply with the Procedural Direction. The Member was obliged to explain to the parties the differences in the two processes (hearing as opposed to conciliation) and the Member's differing role in those two processes. This was not done.
The situation in this case was perhaps made worse in that the conciliation took place after the Tribunal had heard most, if not all, of the evidence relevant to the issues in dispute. Whilst there is no fixed rule as to when conciliation should occur, ordinarily it could be expected that it would occur before the Tribunal had commenced to hear the evidence. This is particularly so when the Tribunal Member is to also act as the conciliator. That is reflected in the language of [1] of the Procedural Direction which in terms sets out "the procedure which is to apply when the same Member assists in conciliation of a dispute in Consumer and Commercial Division proceedings and then if the matter fails to resolve, determines the matter at hearing" (emphasis added). The language in [9] - [11] of the Procedural Direction also clearly indicates that normally the conciliation would occur prior to the Member hearing the matter should the conciliation fail to enable the parties to reach an agreement to settle the matter.
It no separate conciliator is available, it is preferable that any conciliation by the Member who is to hear the matter take place before that Member embarks on hearing the dispute. The Appeal Panel appreciates that there may be cases where a Member part-heard in the matter would then act as conciliator of the dispute. If that was to occur, the Member should, in the hearing room and whilst the proceedings are being recorded, take extra care to see if the parties were prepared to conciliate the matter. The Member should then clearly explain that the hearing process was to (at least temporarily) finish and the conciliation process was to begin. The parties should be asked to expressly consent to that Member also acting as conciliator. In such cases, it is particularly important, for obvious reasons, that the Member does not express any opinions at all about the strength or weaknesses of a party's case. Any discussion in the conciliation as to the issues of the case should be limited to what legal questions or issues may arise for determination.
Where there are no conciliators available to act as conciliators and the Member who is to hear the matter undertakes the conciliator role, there are obvious reasons why it is important for those Members to properly explain the difference in the two processes to the parties. It is trite to say that when parties appear at the Tribunal it is often their first experience with a Tribunal or a dispute resolution system. They are more often than not unrepresented. Indeed, subject to certain exceptions or leave of the Tribunal, parties are not entitled to be represented by another person (see s 45(1) of the CAT Act). Without a prior explanation as to the process, ordinarily a party to proceedings in the Tribunal would not necessarily, and should not be expected to, appreciate the differences between a person sitting in one room as the Tribunal hearing and determining the matter and that same person sitting with them alone in a separate room conciliating the matter in an attempt to enable the parties to reach consensual agreement to resolve their dispute.
In this case, the Member failed to follow the procedure to explain the conciliation process before that process was undertaken or during the process itself. His comment in the hearing room that they would then move into separate rooms and he would "see if he could do something with" the matter does not comply with the requirement to explain the conciliation process.
Further, the conciliation took place after the Member had heard most, if not all, of the evidence relevant to the issues in dispute. He then proceeded to express strong views about the appellant's prospects of success. On the evidence of the appellant, the Member went beyond canvassing the legal questions and issues as allowed by the Procedural Direction. That was also a breach of the Procedural Direction.

Effect of breach of Procedural Direction

Having determined that the Member failed to follow the Procedural Direction it is necessary to address the consequences of that breach. The appellant submits that the breach means that the Tribunal had no power to make the orders it did. He also submits that the consent order should be set aside as being made under the undue influence of the Member having made his views as to the prospects of success known during the conciliation process.
We do not think it is necessary to decide this appeal on the questions of power or whether the consent orders are liable to be set aside for undue influence. In our opinion, the failure of the Tribunal to comply with the Procedural Direction, being a failure to comply with s 26(4) of the CAT Act is an irregularity within the meaning of s 53(3) of the CAT Act. That section provides: 53 Amendments and irregularities (3) If a provision of this Act or the procedural rules is not complied with in relation to the commencement or conduct of proceedings, the failure to comply is to be treated as an irregularity and does not nullify the proceedings or any decision in the proceedings unless the Tribunal decides otherwise. (4) The Tribunal may, however, in dealing with any such irregularity, wholly or partly set aside the proceedings or a decision in the proceedings.
Section 81(2) of the CAT Act provides that the Appeal Panel may exercise all the functions that are conferred or imposed by the Act on the Tribunal at first instance when varying, or making a decision in substitution for, the decision under appeal. In the circumstances, therefore, the Appeal Panel is able, if it determines, to set aside the proceedings or a decision in the proceedings if there has been an irregularity within the meaning of s 53(3).
In this case, we are of the opinion that it is appropriate to set aside the proceedings and the consent order made by the Tribunal based upon the agreement reached at the conciliation. That is because from the evidence of the appellant, it can be accepted that, had he had the conciliation process explained to him in accordance with the Procedural Direction, and had the Member otherwise complied with that Procedural Direction, there is a very significant prospect that he would not have entered into the agreement giving rise to the consent order. His evidence is clear that he thought the Member was still sitting as the Tribunal and determining the matter. He felt that the Member had expressed clear views as to his prospects of success. He felt that following the conciliation process he had no choice but to get something out of the matter and he thus entered into the consent agreement.
In our opinion, in light of the clear breaches of the Procedural Direction and the appellant's evidence, it would be a miscarriage of justice to hold the appellant to the consent order.
For the above reasons, the orders we make are: 1. The appeal is allowed. 2. The order of the Tribunal made on 6 February 2017 is set aside. 3. The sum of $5,320 held by the Tribunal pursuant to the stay orders made by the Appeal Panel on 2 March 2017 is to be released to the appellant, or at his direction. 4. The matter is remitted to the Tribunal, differently constituted, to be heard according to law.

I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Principal Registrar

NCAT Conciliation Fact Sheet NCAT Fact Sheet Consumer and Commercial Division Conciliation This fact sheet explains the conciliation process used by NCAT to resolve Consumer and Commercial Division disputes. What is conciliation? Conciliation is an alternative dispute resolution process where the people in dispute talk about their issues in an informal, private meeting with the aim of reaching an agreement. In NCAT's Consumer and Commercial Division, the conciliation process is closely linked to the hearing process, rather than as a separate step of dispute resolution. Parties are asked to attempt conciliation before the hearing can take place. Conciliation allows you to have control over the outcome of your dispute and is more likely to result in an agreement you both find acceptable. What happens in conciliation? During the conciliation you would: • Tell the other person what your issues are • Show each other your evidence • Try to understand and respect each other's different points of view • Negotiate differences, discuss possible solutions and try to reach an agreement. NCAT provides information at all Consumer and Commercial Division hearing venues to assist you during your conciliation discussions. If you reach an agreement during conciliation, the terms of the agreement will be made into an NCAT order. Write down your agreement on the form provided and take it back to the Tribunal Member in the hearing room. The agreement is then made into a legally binding NCAT order. If conciliation is unsuccessful, the hearing will go ahead. Negotiations discussed during conciliation cannot be repeated in the hearing room unless both parties agree. Conciliators NCAT provides Conciliators at major hearing venues to assist parties during their conciliation discussions. In some regional areas the Tribunal Member will act as both Conciliator and Member with the consent of the parties. The Conciliator's role in assisting parties come to an agreement is to: • Facilitate open and honest discussions between the people in dispute • Help to identify the issues in dispute • Assist both parties to come up with options and possible solutions • Help write down any agreement reached. Conciliators do not provide legal advice or make decisions. They will however check that the parties understand the agreement and that it is made with their consent. A Conciliator is not an advisor and will not make decisions for you Conciliation ten top tips The below ten top tips can help you prepare for and get the most out of the conciliation process.

Think about what you want Think carefully about your issues and the outcome you want to achieve. Write a summary of these issues.
Work out how you will negotiate Be open-minded and flexible. Think about the other person's issues and how they will respond to your NCAT Consumer and Commercial Division Fact Sheet | Conciliation (October 2015) Page 1 views. Negotiation may involve some compromise to reach a solution you both find acceptable.
Tell your side of the story Briefly explain your side of the story and show your evidence to the other person. Explain how you would like to resolve the dispute. Focus on solutions. Try not to argue about who is right or wrong, or why.
Listen to the other person Listen carefully to the other person and look at their evidence. You might want to take notes. Allow them to talk and don't interrupt. Try to consider their point of view even if you don't agree.
Focus on the issues, not the emotions Stay focussed on the issues, not on your emotions or the behaviour of the other person.
Start negotiating Start coming up with possible solutions. Make offers and counter-offers. A successful conciliation happens when both parties agree on a solution.
Only agree to what you think is acceptable Be sure you only agree to an outcome you find acceptable. Keep in mind there has to be some give and take by both parties when coming to an agreement.
Ask for help if you're having problems If you're having problems, ask the Conciliator, Tribunal Member or a Registry officer for help. If you feel threatened by the other person, let the Conciliator or security officer know immediately.
If you reach an agreement Write down your agreement on the form provided. If a Conciliator is available they can help you write it down. Before your agreement is made into a legally binding order, you will be asked if you understand the agreement, and confirm you made it voluntarily.
If you don't reach an agreement If you can't reach agreement, the hearing will go ahead on the same day or at a later date. Think about whether your issues are important enough to come back on another day which may increase the time, cost and inconvenience to you. Common questions Do I have to attempt conciliation? Yes. Although conciliation is a voluntary process, NCAT is required by law to encourage parties to reach agreement through a resolution process, such as conciliation, before the hearing can take place. Who is involved in the conciliation? Generally only the people involved in the dispute attend the conciliation. An agent, advocate or interpreter may also be present. At larger hearing venues a Tribunal Conciliator may be available to help with conciliation discussions. Can my support person come with me? Yes, however you will need to seek permission from the other person. If they do not give permission, your support person cannot be present during the conciliation session. Why can't the Conciliator stay during the entire conciliation process? Where a Conciliator is available, their role is to assist a number of conciliating parties at the same time. It is not possible for them to spend all their time in one conciliation session. What happens if I'm not happy with the conciliated agreement? If you are not happy with the conciliated agreement, let the Tribunal Member know before it is made into a legally binding order. Tell them that you have reconsidered the settlement agreement and want to proceed to hearing. Can a consent order be changed afterwards? No. Once a conciliated agreement is confirmed by a Tribunal Member it becomes a legally binding order. Contact NCAT 1300 006 228 | For more information and assistance visit the NCAT website or contact NCAT on 1300 006 228. NCAT Consumer and Commercial Division Fact Sheet | Conciliation (October 2015)

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

Amendments 14 June 2017 - Amendment to initial of Applicant's representative 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: 14 June 2017

A question of law arises

In our opinion, the matters raised by the Notice of Appeal, namely whether the Tribunal acted beyond its power by reason of the alleged failure to comply with the Procedural Direction as directed by the CAT Act, raises a question of law. Further, the question of whether the Tribunal complied generally with the CAT Act raises a question of law. As such, leave to appeal is not required: see s80(2)(b) of the CAT Act. This is notwithstanding the appellant categorising his appeal as one where the decision of the Tribunal was not fair and equitable which, if correct, would require leave to appeal. It is accepted that in such circumstances, the Appeal Panel should consider the question of law raised: see John Prendergast & Vanessa Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69

Evidence and other material on the Appeal

The appellant sought to rely on two statutory declarations sworn by the appellant and his wife in support of his appeal. He also sought to rely on the transcript of the hearing below, to which we have referred above. Obviously, the affidavits were not before the Tribunal as they deal with matters which occurred at the hearing.
Ordinarily appeals on questions of law do not lend themselves to the receipt of new evidence, however, the Appeal Panel can, and in our opinion should in this case, hear fresh evidence as the question before it is whether the Tribunal had power to make the consent orders the subject of the appeal and the answer to the question must depend on evidence which was logically not before the Tribunal: see the discussion, including as to the nature of appeals in Yuen v Thom [2016] NSWCATAP 243 and McDonald v McDonald [2016] NSWCATAP 252.
Accordingly, we received the statutory declarations of the appellant (Ex 1) and his wife (Ex 2) both declared on 20 March 2017.
We have also had regard to the written submissions of each of the parties and the transcript of the hearing.

Lee v Imad

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