Netregistry Pty Ltd v Shabandeh

Grounds of Appeal

1. The grounds of appeal as set out in the Notice of Appeal are as follows: Directions to provide further submissions for the scheduled hearing on 12 September 2017 were not provided to Netregistry. This consequently left Netregistry severely disadvantaged as were not given an opportunity to adequately prepare or provide submissions to the Tribunal Member on the outstanding issue of appropriate remedy.
2. In addition, the Notice of Appeal submitted that the Decision was not fair and equitable because: Netregistry were not afforded with an opportunity to prepare or provide adequate evidence or submissions on the appropriate remedy because we did not receive directions from NCAT which was vital in preparing for the hearing. Also, Netregistry did not receive the applicants submissions, nor did we know she had made further directions until the date of the hearing. The missing information to provide submissions and view the applicants submission left Netregistry at an unfair disadvantage.
3. In addition, the Notice of Appeal submitted that the decision was against the weight of evidence and stated: Netregistry were placed at a disadvantage and were unable to submit any evidence relevant to assist the Tribunal Member. We had not been given an opportunity to provide any evidence. The Tribunal Member ultimately made a decision in the absence of Netregistry's evidence.
4. In an appendix to the Notice of Appeal, the appellant made submissions which are summarised as follows: 1. The sum of money which the respondent initially paid to the appellant in March 2011 totalling $9,791.00 was made up of two components. The first component was for the website design and the cost of that was $5,300.00. The second component was for a "search engine optimisation" (SEO) for which the amount invoiced was $4,491.00; 2. The appellant submitted that the respondent "makes no claim for losses with respect to the SEO, or hosting services she received"; 3. The appellant submitted that "during the period between March 2011 and July 2015 [the respondent] consumed the value of the website design, and, SEO for the purpose of operating her business"; and 4. The Appeal Panel should only take into consideration the cost of the website design (which had been deleted) and should not include the amount paid for the SEO service.

Reply to Appeal

1. On 11 October 2017 the respondent filed a Reply to Appeal which may be summarised as follows: 1. The Decision, the subject of the appeal should stand and the appeal is opposed; and 2. In the remitted proceedings, orders were made on 20 June 2017 for the parties to file and serve their evidence. The appellant did not comply with that direction. However, Mr Russell gave evidence on behalf of the appellant at the hearing on 12 September 2017.

Appeals Generally

1. The Civil and Administrative Tribunal Act 2013 (the NCAT Act) makes provision for appeals in s 80. That section provides that an appeal against an internally appealable decision [such as the Decision which is the subject of this appeal] may be made to an Appeal Panel. An appeal may be made as of right on any question of law or with leave of the Appeal Panel on any other grounds. Clause 12 of Sch 4 of the NCAT Act provides that an Appeal Panel may grant leave under s 80(2)(b) of the NCAT Act only if the Appeal Panel is satisfied that the appellant may have suffered an 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).
2. The appellant's Notice of Appeal does not specifically identify any error of law. However, it is clear that the appellant submits it was not afforded procedural fairness. That ground constitutes a question of law: see John Prendergast & Vanessa Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69. As stated above, the Notice of Appeal also submitted that the Decision was not fair and equitable and was against the weight of evidence.

Appellant's Submissions

1. Some aspects of the appellant's submissions seek to reargue issues which were decided previously by the Appeal Panel. We have not summarised or considered those aspects of the appellant's submissions and have only considered those aspects of the appellant's submissions relevant to the issue before the Tribunal on remittal, namely the appropriate order or orders to be made under s 79N of the FT Act.
2. The appellant submitted that any money refunded to the respondent should be proportionate to the loss she has suffered. Such loss should only be considered in relation to the "website building services". The respondent paid $9,791.00 made up of the website design (which including hosting for two years) totalling $5,300.00 and for a SEO service (which stands for Search Engine Optimisation and which we were informed is also known as the Traffic Accelerator Pro) constituting an amount of $4,491.00. No losses were suffered with respect to the SEO or the hosting service. The respondent paid for further hosting services in March 2013 and July 2014. She ceased paying the hosting fee in July 2015.
3. At the hearing of the appeal Mr Russell, the representative of the appellant conceded that the submission summarised above had not been put by the appellant to the Member who made the Decision. Mr Russell submitted that the argument had not been put because the appellant had not received any directions from the Tribunal prior to the hearing on 12 September 2017 requiring the appellant to put forward any evidence or submissions. Mr Russell who had appeared for the appellant at the hearing on 12 September 2017 also conceded that he had not asked for an adjournment of the hearing.
4. Mr Russell submitted that had he had the opportunity on or prior to 12 September 2017 to make submissions, he would have submitted that the SEO was software acquired by the respondent additional to the acquisition of the website design. Mr Russell stated that he did raise this argument before the Member who made the Decision, but had no evidence to support it.
5. During the hearing, legal counsel for the appellant, Ms Viola Yuoseff sought leave to appear for the appellant. Her application was opposed by the respondent. We considered the application and refused leave. Our reason was that the application was being made at an extremely late stage (after the commencement of the appeal hearing) and could potentially create a perception of disadvantage to the respondent. We indicated to Ms Yuoseff and to Mr Russell that Ms Yuoseff was free to sit at the bar table besides Mr Russell and assist him in his submissions. Ms Yuoseff did in fact sit beside Mr Russell and from time to time conferred with him.
6. During the hearing of the appeal Mr Russell conceded that the appeal was only concerned with the amount of $4,491.00 attributed to the SEO service. In other words, the appellant only sought an order that it should not have to pay any amount more than the sum of $5,300.00 to the respondent.
7. The appellant filed a letter dated 15 November 2017 with the Tribunal (received 20 November 2017) which may be summarised as follows: 1. The appellant has over 140 staff members in its Sydney office, separated between different floors and that correspondence from the Tribunal relating to the dispute "genuinely went missing" and subsequently was not received by the appropriate Advocacy or Legal Team; 2. The respondent failed to appear at a Tribunal hearing on 11 August 2016. Her application was dismissed but she was successful in having it reinstated. The appellant should likewise be given the "benefit of the doubt that some correspondence from the Tribunal had not in fact been received"; 3. Mr Russell advised the Member hearing the application on 12 September 2017 that the appellant had not received directions from the Tribunal to provide submissions; 4. The appellant's customers' advocacy team underwent a change in management and structure between June and August 2017. Mr Russell joined the team shortly before the hearing on 12 September 2017 and did not have an opportunity to be briefed on the dispute; and 5. The appellant submitted that it was not afforded an opportunity to prepare submissions on the appropriate remedy and was unable to satisfactorily prepare for the hearing.

Respondent's Submissions

1. The following paragraphs summarise the respondent's submissions.
2. The respondent has examined the Tribunal's file in respect of the remitted proceedings and submitted: 1. The file reveals that the Tribunal sent a notice of directions hearing to the appellant on 1 June 2017 advising the appellant that the proceedings were listed for directions for Tuesday 20 June 2017 at 9:15am; 2. A second notice was issued by the Tribunal on the same date to the same effect, namely advising that the proceedings were listed for directions on 20 June 2017 at 9:15am; 3. The respondent appeared at the directions hearing on 20 June 2017 but the appellant did not. The Tribunal made directions for the exchange of evidence and those directions were the subject of a written communication by the Tribunal to the respondent issued on 20 June 2017; 4. The Tribunal issued a notice dated 5 July 2017 to the parties advising of the hearing on 12 September 2017 at 9:15am; 5. Although the appellant states it was not aware of the directions hearing on 20 June 2017 or the directions made at that hearing, it was aware of the hearing on 12 September 2017 and indeed its representative attended that hearing; and 6. The respondent submitted that she complied with the directions by providing her evidence to the Tribunal on 4 July 2017. The respondent submitted that she had served a copy of the submissions upon the appellant and provided evidence in the form of a receipt issued by Australia Post which she stated confirmed that she had sent her submissions to the respondent.
3. The respondent obtained a disc of the sound recording of the hearing on 12 September 2017 and provided written extracts in her submissions. The following submissions and extracts from the sound recording are relevant to the respondent's case: 1. One extract reveals that the Member drew to the attention of Mr Russell that the Tribunal had received a submission from the respondent but nothing from the appellant. Mr Russell's response was "I don't think we have any"; 2. The sound recording discloses that Mr Russell did not draw to the attention of the Member that the appellant had not received any notices or directions from the Tribunal requiring the appellant to file and serve its evidence. Nor did Mr Russell ask the Tribunal for an adjournment; and 3. The transcript reveals that the Member stated that he would give Mr Russell "a moment to gather your thoughts, if you want to speak to your colleague, that is fine" and that he had made the directions on 20 June 2017 to give the parties "time to think about these things". The Member acknowledged that Mr Russell has "only just come into it" but says "you have had three months to gather your thought; at least the company has had three months to gather its thoughts and provide evidence and submissions to the Tribunal as to what the appropriate remedy is". Mr Russell did not respond;
4. The respondent's submission is that the sound recording reveals that the appellant was given an opportunity to state that the appellant had not received notice of the directions made on 20 June 2017 but that issue was not raised before the Member.
5. The respondent submitted that the Appeal Panel should reject the appellant's submission that she derived some benefit from the SEO. She submitted that the SEO was to be developed after the website went live and was not developed during the course of the development of the website. The respondent submitted that the appellant did not raise with the Tribunal the appellant's argument that the respondent had derived some benefit from the SEO.

Appellant's Submissions In Reply

1. Mr Russell acknowledged that the submissions now made concerning the SEO had not been raised at the hearing on 12 September 2017 and that was because he had no knowledge of the requirement to do so. However, he maintained that the SEO was delivered prior to February 2012 and that the appellant had derived benefit from it.

Costs

1. The respondent submitted that in the event that the appeal is dismissed, she should have her costs paid. She submitted that there are special circumstances, namely that the appeal is "hopeless" and lacks substance.
2. Mr Russell submitted that there should be no order as to costs in the event that the appeal is dismissed.

Decision

1. In our view, the appeal should be dismissed for the reasons which follow.
2. The duty to afford procedural fairness has been the subject of other Appeal Panel decisions and it is of assistance to set out paragraphs 36 to 38 of the Appeal Panel decision in Cao v Lui [2014] NSWCATAP 100 which we do as follows: 36 The duty to accord a person procedural fairness arises because the power involved is one which may "destroy, defeat or prejudice a person's rights, interests or legitimate expectations": Annetts v McCann [1990] HCA 57; (1990) 170 CLR 596 at 598; 97 ALR 177; (1990) 65 ALJR 167; 21 ALD 651. The content of the duty in a particular case depends upon the circumstances of the case and the nature of the power being exercised: Kioa and Ors v West [1985] HCA 81; (1985) 159 CLR 550 at 585 and at 612-615; (1985) 62 ALR 321; (1986) 60 ALJR 113; 9 ALN N28. 37 In Kioa Gibbs CJ stated that "if the rules of natural justice were applicable, the appellants were entitled to a fair opportunity to correct or contradict any relevant material prejudicial to them." Mason J also acknowledged that a fundamental rule of natural justice required that a party "is entitled to know the case sought to be made against him and to be given an opportunity of replying to it", and "if in fact the decision-maker intends to reject the application by reference to some consideration personal to the applicant on the basis of information obtained from another source which has not been dealt with by the applicant in his application there may be a case for saying that procedural fairness requires that he be given an opportunity of responding to the matter". Brennan J similarly observed that "[a] person whose interests are likely to be affected by an exercise of power must be given an opportunity to deal with relevant matters to his interests which the repository of the power proposes to take into account in deciding upon its exercise." 38 Although Kioa was determined in the context of the exercise of ministerial power, a fundamental requirement of procedural fairness is that a party subject to the possibility of an adverse determination to be made on the basis of particular documents or material, should know the case against it, and relevantly in this case, be afforded an opportunity to respond.
3. The appellant acknowledged that it had received the decision of the Appeal Panel published on 23 May 2017. Accordingly, the appellant knew that the application had been remitted for the purpose of identifying the appropriate order or orders to be made in favour of the respondent. The nature of the remitted proceedings was accordingly well-known to the appellant.
4. The appellant's submissions concerning the fact that it was not aware of the requirement to file and serve evidence prior to the hearing were equivocal. On the one hand, it appear that the appellant submitted that the orders issued by the Tribunal on 20 June 2017 were not received and, on the other hand, it appears as if the appellant acknowledges that the Tribunal's communication may have been received but was mislaid within the office of the appellant.
5. If the truth is that the appellant mislaid the Tribunal's direction, then the consequence (namely appearing at the hearing on 12 September 2017 without proper preparation) is the fault of the appellant. If, on the other hand, the appellant did not receive the Tribunal's directions, then the question arises as to whether the appellant has not been afforded procedural fairness.
6. When one takes into account all of the facts, it is our view that the appellant has been afforded procedural fairness.
7. Firstly, the appellant knew of the case which was being mounted against it because that was clear from the Appeal Panel decision. Secondly, the only issue which the appellant claims to have been decided unfairly against it is the requirement that it should reimburse to the respondent that proportion of the order totalling $9,791.00 attributable to the purchase of the SEO. That figure is $4,491.00. However, the appellant did not raise that argument before the Member on 12 September 2017. It is clear from the extracts of the sound recording provided by the respondent that the Member gave to the appellant adequate time to confer with colleagues or to take a short adjournment for the purposes of ringing colleagues. Nevertheless, the argument that the amount attributable to the SEO should not be refunded was not put. No doubt this was in part due to the fact that Mr Russell was new to the matter and may not have fully understood the nature of the transaction between the parties. However, Mr Russell could have asked for an adjournment but did not do so.
8. A question arises as to whether the Tribunal should have initiated the suggestion of an adjournment application. In the circumstances, we do not think that the omission of the Tribunal to do so was unfair. With Mr Russell at the hearing was in house counsel Ms Yuoseff. It is not clear whether the Member knew that Ms Yuoseff was in house counsel, but the fact is that Ms Yuoseff could have asked for an adjournment (or at least suggested to Mr Russell that such an application be made) but none was made.
9. The Tribunal has obligations to deal with matters justly, quickly and cheaply. Section 36 of the NCAT Act sets out the "guiding principle" which in essence provides that the Tribunal is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. The respondent is an entity of some substance and on its face does not lack resources. This is not a case where the Tribunal ought to have given a vulnerable party generous latitude. Rather, the Tribunal was entitled to expect that the appellant would appear prepared to raise all relevant arguments and to the extent that it had not received a notice from the Tribunal to file and serve evidence beforehand would, nevertheless, be able to articulate why it should not have to refund the full amount claimed by the respondent. The substantive information concerning the dispute between the parties was within the knowledge of the appellant and the appellant should have been in the position of being able to argue why a full refund was not appropriate.
10. For the above reasons we are of the opinion that the respondent was afforded procedural fairness.
11. The additional submission of the appellant was that the SEO was a product in respect of which the respondent had derived some benefit and therefore it would be unfair for the respondent not to have to pay something for that benefit. The respondent stated during the course of the appeal that she was still working with the appellant on developing the SEO and that its benefits had not been entirely derived. The true picture as to whether the respondent had received some benefit is a matter which was not dealt with by the Tribunal at first instance because it was not raised. It is inappropriate for it to be raised before the Appeal Panel and because it was not raised before (when it should have been) it is our view that it is too late for the issue to be ventilated before the Appeal Panel. The principle of finality requires a party who has been given a fair opportunity to defend its position to raise all its arguments at the final hearing and not to seek to raise fresh arguments on an appeal if they could reasonably have been raised at the hearing (in this case on 12 September 2017).Without such a principle, disputes could drag on without being resolved as fresh arguments are raised.
12. The appellant's additional grounds for appeal concern cl 12 of Sch 4 of the NCAT Act. The appellant asserts that by reason of the lack of procedural fairness the Decision of the Tribunal was not fair and equitable or was against the weight of evidence.
13. In the Appeal Panel decision in Collins v Urban [2014] NSWCATAP 17 the Appeal Panel said that the concept of a substantial miscarriage of justice refers to a failure in the way a matter was conducted or decided which deprived the appellant of a chance which was fairly open of achieving a more favourable result.
14. Collins v Urban went on today say: 76 Accordingly, it should be accepted that a substantial miscarriage of justice may have been suffered because of any of the circumstances referred to in cl 12(1)(a), (b) or (c) 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.
15. Here, in our view, there was no denial of procedural fairness and therefore the Decision which was based on the evidence before the Tribunal cannot be described as not fair and equitable and nor can it be described as against the weight of the evidence upon which the Decision was based.
16. Even if we were to decide that a substantial miscarriage of justice may have occurred, we still have a discretion as to whether to grant leave: see cl 12 of Sch 4 of the NCAT Act which states that the Appeal Panel "may" grant leave. The principles governing the granting of leave were set out in Collins v Urban from paragraph 80. In summary, an appellant must demonstrate something more than the primary decision was arguably wrong. It is appropriate to grant leave only in matters that involve: 1. Issues or principle; 2. Questions of public importance or matters of administration or policy which might have general application; 3. A matter which involves an injustice which is reasonably clear, or an error which is plain and readily apparent; 4. A factual error that was unreasonably and clearly mistaken; or 5. A case where 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.
17. In our view, none of the matters referred to above have occurred in this case. Accordingly, if we were inclined to find that there has been a substantial miscarriage of justice, we would not exercise our discretion to grant leave.
18. For the above reasons, the appeal must be dismissed.
19. We do not agree with the respondent that she should have an order that her costs be paid by the appellant.
20. The general rule is that each party pays its own costs (see s 60 of the NCAT Act) unless the Tribunal decides that special circumstances warrant an award of costs (s 60(2)) or unless r 38 of the Civil and Administrative Tribunal Rules 2014 applies. That rules does not apply in this case.
21. The respondent argued that the appeal lacked substance.
22. Although we found against the appellant, we do not think that the appeal could be described as lacking substance. The appellant's arguments were rational and required careful consideration. In our view, in the circumstances of this matter, the general position described in s 60(1) should prevail.
23. The appeal will be dismissed.

Orders

1. The Appeal Panel makes the following order: 1. The appeal is dismissed.

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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: 04 January 2018