The complaint is upheld. The member is directed to pay to the complainant forthwith:
(a) $10,363; and
(b) interest at the rate of 5% per annum on $9,863 from 1 September 1999 to the date of payment; and
(c) interest in the rate of 5% per annum on $500 from 20 September 2000 to the date of payment.
If the complainant sells the apartment before 31 December 2002 and satisfies he Panel that:
(a) the sale was on the open market and at arm's length; and
(b) she has made a loss after taking into account interest payments and income from and expenditure on or in connection with the apartment.
the panel will give a further direction to the member to compensate her for that loss. Otherwise, it will not direct the member to pay her any more compensation than is provided for in this decision.
15 I turn then to the substantive errors said to have been made by FICS which are susceptible to judicial review. In my view, there are procedural errors which vitiate the decision of FICS in the present case. First, there was no adequate notice that the FICS panel was concerned to consider the question of disclosure of commission. Ms Wong's submission did not deal with it. FICS wrote to Masu seeking a written response to Ms Wong's submission and said:
Generally, the panel makes its determination based on the above written submissions. However, the Chairman of the panel may decide that parties to the complaint should be interviewed by the panel. If this is the case in this complaint or if the panel needs more information from you, I will contact you.
16 Thus there was a legitimate expectation, in my view, on the part of Masu that the panel would only deal with the matters specified in Ms Wong's complaint and that an opportunity should have been given to Masu to deal with matters not in the complainant's submissions: see Attorney-General (Hong Kong) v Ng Yuen Shiu [1983] 2 AC 629. It is a reasonable submission for the plaintiff to make that Masu was then thereafter faced with a determination on the basis of a case that it did not know it was required to meet. Whether the decision was void or voidable is an interesting academic question but does not need to be decided here.
17 Secondly, there was an express obligation on the panel to provide reasons for the decision (see rule 33 of the FICS rules), although the common law would not have required the exposure of reasons save in the event of some right of appeal: Public Service Board (NSW) v Osmond (1985) 159 CLR 656; compare Pettitt v Dunkley [1971] 1 NSWLR 376. Certainly, once there is an explicit requirement to provide reasons then they must be proper, adequate and intelligible: Westminster City Council v Great Portland Estates plc [1985] AC 661 at 673; Bromley v South Australia (1990) 55 SASR 309 at 311. However, as the plaintiff submits, there was a deficiency in the reasons given by FICS in that there was a lack of an explanation as to why a failure to provide the written disclosure gave a right to compensation; there was an absence of any explanation as to why the measure of loss in such a claim was the difference between the price paid and the final disposal price; and there are some difficulties in understanding whatever reasoning process was exposed in the determination.
18 Whilst I think the submission of the plaintiff in characterising some of the reasons as "incoherent" and the allegation of "grave prejudice" are hyperbolic, nonetheless I think there is substance in the plaintiff's submission when it says that it does not know "what legal wrong it has committed." Thus, it can be fairly concluded that the reasons provided are inadequate to meet the express provisions of the rule. Accordingly, the first decision should be set aside.
19 In relation to the second decision of 3 October 2002, the panel was apparently refusing to receive any submission apart from a submission that the requirement of a written disclosure had been complied with and declined to entertain submissions as to which particular rule was applicable by reason of the proposal to purchase the property in question, having been oral in its nature. Thus, the panel did not deal or did not sufficiently deal with the argument as to the applicability of rule 107, and no reasons were given for that failure.
20 In my view, the same deficiencies are apparent if the two decisions should be properly be regarded as compendious, because of the failure to take into account relevant considerations and the taking into account of an irrelevant consideration. Thus, for example, there is a failure to refer to the fact (as asserted) that an oral disclosure had been given and a failure to refer to a relevant legal principle to the effect that, at least prima facie, the measure of loss is the difference between the value paid for an asset and its value at the time of allotment or disposition: Potts v Miller (1940) 64 CLR 282. It would be excessive and pedantic to require an administrative tribunal of this kind to refer expressly to a particular case in the High Court decided in 1940, but nonetheless it is reasonable to require that the general concept should be adverted to as at least relevant to the adjudication of the matter.
21 It is unnecessary to decide, because of the findings I have already made, but I do not think there is great strength in the plaintiff's argument that the decisions of FICS were so unreasonable as to not have been available or open to the tribunal, in the character of being in a Wednesbury unreasonable: Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223; [1947] 2 All ER 680, compare Nardell Colliery Pty Ltd v New South Wales Coal Compensation Review Tribunal [2003] NSWSC 462 at [119]-[120] per Sperling J. Nor do I think there is much substance in the criticism that the tribunal was prohibited by rule 12 from proceeding to deal with the matter at all unless and until it had determined the monetary value of the claim so as to ensure that the claim was within the relevant limitation.
22 In these circumstances, I think the plaintiff has a sufficient number of valid criticisms of the tribunal's decision and its reasoning process to warrant a declaration that both decisions are of no force or effect. In Jonsson v Arkway Pty Ltd (2003) 58 NSWLR 451 at [16], I attempted to encapsulate the Australian law as to the dichotomy between jurisdictional error and error of law within jurisdiction. I adhere to these views.
23 I note the submission of the first defendant that to the extent that there are infelicities or errors that have been made by FICS they are of a relatively modest nature and do not go to the heart of the determination of the controversy. However, I take a contrary view. I think that the matters that I have upheld in the submissions of the plaintiff constitute matters of substance and not merely of form, and that thus a declaration to the effect that the two decisions should be set aside is appropriate.
24 Then a question arises, and one that has been hotly debated, as to what the form of the remedy ought to be. The plaintiff rightly concedes that in the ordinary course of events, if it were successful it would be appropriate to remit the matter to FICS for a determination in according to law. However, it is said that the active role played in this court by FICS in defending its decisions generates a reasonable apprehension of bias. It is furthermore said that: "any costs order creates a pecuniary conflict." And so it is submitted that in the circumstances, the appropriate order is to quash the decisions without any order for redetermination.
25 On the other hand the first defendant says, assuming contrary to its primary submissions, that there has been a breach of the rules of procedural fairness or a failure to give adequate reasons, a discretionary decision should be given which would be other than an order quashing a decision in proceedings simpliciter. Putting aside the constitutional question which I have decided, the first defendant says that a finding of reviewable error should lead to remittance to a panel for determination in accordance with the reasons of the court. Insofar as the plaintiff is successful on the basis of inadequacy of reasons, it seems to me a formidable point that the matter should simply be remitted so that procedural fairness could be accorded and that further and more detailed reasons could be provided.
26 I do not apprehend that any actual bias is alleged against FICS or the panel which determined this matter. Rather, what is said is that there could be a reasonable apprehension of bias.
27 In my view, that latter argument can be accommodated by an order directing that the matter be remitted to a differently constituted panel which can then apply an independent collective mind to the complaints that Ms Wong has made. It would be an unusual course to finally determine the matter when defects of an administrative law character have been identified, particularly those going to a deficiency in the reasoning process.
28 Accordingly, I propose that an order should be framed in terms which would remit the matter to a differently constituted panel in accordance with the law set out in this judgment.
29 Subject to any further argument, having regard to the non-active role played by the second defendant and the nature of the first defendant, I propose that no order for costs be made in relation to these proceedings, including the argument as to the constitutionality of FICS.
30 The plaintiff must provide short minutes of order within seven days. In the absence of disagreement as to the form of such orders, they can be entered without the need for any further proceedings in court.
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