By primary application lodged 22 August 2019 the respondent to the appeal, who was the applicant (Icon), claimed the return of $12,000 from the appellant (the respondent to the primary application) (Statewide).
The matter was heard on 29 September 2019 in a Group List which was the first return of the proceedings before the Tribunal. The primary member ordered the refund of the $12,000. The Notice of Order said "Detailed oral reasons were provided to the parties at the hearing".
Statewide provided its documents very late for the appeal. Those documents included the transcript which Icon's representative, despite pressure of time from the late receipt, fairly accepted was a substantively accurate transcription of what occurred in the Group List primary hearing.
Although the reasons were not summarised at the end of the hearing, from the exchanges between the Statewide representative (the director who appeared before us) and the primary member it appeared that the primary member ordered the refund because he considered, on the evidence lodged by Icon with its application, there was a clear contract between the parties for Statewide to supply a Kia Rio motor vehicle to Icon, the $12,000 was the purchase price, Icon had paid the purchase price but had not received the vehicle, so there was a total failure of consideration.
[2]
Legal representation
Leave had been refused for legal representation for Statewide on the appeal at the callover on 7 November 2019, other than for the callover itself.
The application was renewed before us and was opposed by Icon's office and account manager who had also appeared for Icon on the primary application. We refused the application because we considered it would be unfair, without notice to Icon that it was to be renewed, to grant it. The Statewide director conducted the appeal with consultation from time to time with his solicitor who sat in the back of the court room during the hearing.
[3]
Grounds of appeal and nature of appeal hearing
The Notice of Appeal lodged, within time, on 24 October 2019, said that it challenged the order for refund.
The grounds for that challenge canvassed alleged errors of law and sought leave to challenge alleged errors of fact. The primary emphasis was on the alleged absence of procedural fairness and inadequate reasons because Statewide's case was not considered.
After hearing full argument from each party on the procedural fairness ground, we briefly retired and then returned to allow the appeal, giving oral reasons.
Without seeking to do other than indicate the scope of those oral reasons, we summarised the requirements of the statutory provisions establishing the requirements for an appeal in s 80(2)(b) of the Civil and Administrative Tribunal Act 2013 (NSW) (CATA) and cl 12 of Sch 4 to CATA. We then gave examples of what constituted an error of law which included an absence of procedural fairness.
We then said that we did not need to consider the other appeal grounds beyond the argument we had heard on procedural fairness. We read on to the record significant portions of the transcript and referred to other portions in summary. We said that in our view, although there were occasions when it was appropriate to hear a matter on the first occasion it was before the Tribunal, this was not one of those. Statewide had sought (over frequent interruption by the primary member) to put forward its case in outline (which we describe below), had asked for the opportunity to bring evidence to support that case, and had been denied that opportunity because the primary member considered it was an open-and-shut contract case. From the way that Statewide had sought to outline its case before the primary member, it was clear that the primary contract analysis was very contestable and should have been permitted fully to be argued, after an opportunity to provide evidence.
CATA s 81 provides that, in determining an internal appeal such as this, the Appeal Panel may make such orders as it considers appropriate in light of its decision on the appeal. The section sets out a list of available orders which is not exhaustive. That list includes: allowing the appeal, setting aside the primary decision and remitting the whole or any part of the case to the primary level of the Tribunal for reconsideration, either with or without further evidence and in accord with the Appeal Panel's directions, or under CATA s 81(1)(d) setting aside the decision under appeal and substituting another decision for it.
Both parties, in response to our invitation, agreed that, if we allowed the appeal, we should proceed to determine the case because both parties had put, into the documents before us, the material that each would put forward on a renewed primary hearing.
[4]
Primary reconsideration of the matter
It was common ground that Icon on 8 May 2019 paid and Statewide received from Icon $12,000.
It was also common ground that both Statewide and Icon had previously had dealings (separately from one another) with an agent, who did not give evidence in the proceedings and whom the parties both said, so far as they were aware, was no longer in the line of business that provoked these proceedings.
Basically, a person in the position of Icon, who wished to purchase a vehicle, approached the agent to source a vehicle, paid the agent and received the vehicle. The agent was supposed to transfer the purchase price to the seller.
In this case there was no contact between Statewide and Icon directly prior to the transfer of the $12,000. There was no evidence to contradict Statewide's denial that the agent told it anything about Icon wanting to buy a Kia, and that it did not have a Kia for sale.
There was also no evidence to contradict Statewide's evidence that it received the $12,000 as one payment among several, totalling over $118,000, over the course of early May 2019 from the agent in payment of a refund that the agent owed to Statewide when the agent did not supply to Statewide a Mercedes-Benz, and that the agent confirmed the payment was for such a refund at about the time it was sent. After it received the final of those payments, and before it received a letter of demand from Icon, Statewide released a security that it had registered over the vehicle on the Australian Personal Property Security Register (PPSR).
There were communications after the letter of demand in which the agent told Icon that Statewide was not the supplier and that he would deliver the Kia which he didn't.
Statewide's director said, under cross-examination, that he did not notice that the $12,000 was a third party payment from Icon as opposed to a payment from the agent's account direct. Rather, he simply checked the amounts represented payment in full. There was no evidence to suggest that this should not be accepted or that this was careless practice. Rather, one could reasonably expect that payments from an agent may include payments from a third party by direction of the agent. Any carelessness in not noticing or checking the source of payment would not of itself be sufficient. The reference to a particular vehicle on the electronic transfer record, even if noticed, would not indicate that the car was thought to be supplied for the payment; it could indicate the reason the agent was entitled to receive the payment and direct it be paid to a third party. There was no allegation of estoppel by conduct or by representation against Statewide.
Whether or not the agent was Icon's agent, there was no evidence that the agent was Statewide's agent.
On that state of the evidence, we are of the view that Icon has not established that there was a contract made between Icon and Statewide for the supply of a Kia in return for Icon's payment of $12,000.
Rather, Icon's claim, which would still be a consumer claim within the meaning of Pt 6A of the Fair Trading Act 1987 (NSW), was properly characterised as being for the return of the $12,000 on the basis of money had and received by reason of a mistake by Icon, that mistake causing Icon to make the payment. The mistake was that there was a contract in place with Statewide to supply and pay for a Kia Rio. It does not matter if such was a mistake of fact or law, or a mixture: David Securities PL v Commonwealth Bank of Australia (1992) 175 CLR 353, [1992] HCA 48.
Statewide clearly released the PPSR security it had registered because of (and in this case directly on the faith of) the receipt of the mistaken payment, in good faith. This is sufficient to attract the defence of change of position to defeat the claim for recovery or refund: State Bank of NSW v Swiss Bank Corp (1995) 39 NSWLR 350; Australian Financial Services and Leasing PL v Hills Industries Ltd (2014) 253 CLR 560, [2014] HCA 14. The facts in some respects also resemble Porter v Latec Finance (Q) PL (1964) 111 CLR 177 and Aiken v Short (1856) 156 ER 1180, where money was paid to discharge a third party's debt to the recipient of the money for an expected return to the payer (a mortgage, or increased security, which in fact turned out to be worth less or nothing). The recipient no longer had rights against the third party. The resemblance is in the effect on the recipient's rights; the difference is that the payment was made with knowledge it was discharging the third party's debt.
At the end of the day this case raised the sad but classic situation in the human dilemma where the law has to determine which of two innocent parties is to suffer loss at the hands of an intermediary. In this case it is Icon, because Statewide has raised a justified change of position which denies Icon the result of recovering a mistaken payment.
Icon's application for refund must be dismissed.
[5]
Costs of appeal and of re-hearing
Rule 38A of the Civil and Administrative Tribunal Rules 2014 (NSW) (the Rules) applies the same costs rules as applied in the Division when there is a departure under the Division rules (such as under Rule 38) from CATA s 60. Rule 38 does not apply because the amount claimed was less than $30,000. So Rule 38A has no work to do and CATA s 60 applies to costs of the appeal, requiring special circumstances for an award of costs.
Neither party argued for special circumstances. Accordingly, there will be no order as to costs of the appeal and of the re-hearing.
[6]
Orders
The orders we accordingly make are as follows:
1. Appeal allowed.
2. On a re-hearing of the primary application, dismiss the application.
3. Make no order as to the costs of the appeal and of the re-hearing.
[7]
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: 11 December 2019