United Autos NSW Pty Ltd v Schofield

Background

1. Ms Schofield purchased a motor vehicle from United on or about 10 July 2019 for $14,000.
2. The purchase price was paid partly in cash supplied by Ms Schofield and partly by way of finance supplied by the second respondent ("Fin One") on behalf of the Ms Schofield.
3. Ms Schofield subsequently complained that the vehicle was defective.
4. She commenced proceedings in the Tribunal against United, and Fin One was joined to the proceedings as it held a security interest in the vehicle.
5. On 15 May 2020, the Tribunal decided in favour of Ms Schofield, ordered United to reimburse Ms Schofield the "purchase cost" of the vehicle (being $14,000). That order was apparently made pursuant to s 79N(a) of the Fair Trading Act 1987 (NSW) ("FTA").
6. The Tribunal also ordered United to take back the vehicle.
7. Fin One made an application that it be paid what it was owed. It is not clear from the Tribunal's reasons, but it appears the application was made for Ms Schofield to pay the amount owing to Fin One. The Tribunal rejected that application on the basis that Fin One was a respondent to the application commenced by Ms Schofield and the Tribunal could not order an applicant to pay monies to a respondent. The Tribunal said that Fin One would have to commence its own proceedings against Ms Schofield for such payment.
8. In refusing to make an order in favour of Fin One the Tribunal appears to have overlooked s 79P(a) of the FTA which says: Without limiting section 79N or 79O, in determining a consumer claim in which there is more than one respondent, the Tribunal may make any one or more of the following orders that it considers appropriate - (a) an order that requires a respondent to pay to another respondent a specified amount of money
9. An order should have been made that United pay Fin One what it was owed under that section, with the balance being ordered to be paid to Ms Schofield. Such an order would have restored all parties to the position they were in before the vehicle was sold to Ms Schofield.
10. In any event, the fact is that on 15 May 2020 the Tribunal made the order it did, namely that United pay Ms Schofield $14,000 as the refund of the purchase price with no order for anybody to pay Fin One what it was owed under its finance facility with Ms Schofield.
11. United appealed from the Tribunal's decision.
12. On 1 June 2020, the Appeal Panel issued a stay of the Tribunal's orders of 15 May 2020 and joined Fin One as a party to the appeal. The Appeal Panel noted that the Tribunal's orders of 15 May 2020 did not restore the parties to the position they were in prior to the sale, noting, for example, that there was no order for Fin One to remove its encumbrance on the vehicle.
13. On 15 June 2020, the Appeal Panel set the appeal down for hearing.
14. On that same occasion the Appeal Panel also varied the terms of the stay granted on 1 June 2020. The Appeal Panel ordered United to pay $7,700 to Fin One on condition that Fin One released its security in the vehicle. As to the balance of $6,300 owing (pursuant to the original order for payment of $14,000) the Appeal Panel lifted the stay.
15. The result of that order was that Ms Schofield was only entitled to payment of $6,300 until such time as the stay ordered by the Appeal Panel on 15 June 2020 was dissolved. It has never been dissolved.
16. Fin One, it is submissions, confirms that it was paid the $7,700 and released its security over the vehicle.
17. United submits that it has paid the $6,300 to Ms Schofield on or about 18 June 2020, a fact which she does not contest, and which is consistent with her subsequently applying for a certificate under s 78 of the NCAT Act for the sum of $7,700 (and not for $14,000).
18. Section 78 says: 78 Recovery of amounts ordered to be paid (1) Recovery of non-penalty amounts For the purposes of the recovery of any amount ordered to be paid by the Tribunal (including costs, but not including a civil or other penalty), the amount is to be certified by a registrar. (2) A certificate given under this section must identify the person liable to pay the certified amount. (3) A certificate of a registrar that - (a) is given under subsection (1), and (b) is filed in the registry of a court having jurisdiction to give judgment for a debt of the same amount as the amount stated in the certificate, operates as such a judgment.
19. On 13 August 2020, the Appeal Panel dismissed United's appeal, but made no order in relation to the stay ordered on 15 June 2020. Therefore, that stay remained operative. Presumably the Appeal Panel did not disturb the status quo arising from that stay because the stay achieved the practical result of both Ms Schofield and Fin One receiving what they were owed.
20. On 18 August 2020, and for reasons unexplained but probably because Ms Schofield thought she was entitled to further compensation for other expenses and inconvenience arising from her purchase of the defective vehicle (although no such compensation was awarded her by the Tribunal), Ms Schofield sought and obtained a certificate under s 78 of the NCAT Act certifying that, pursuant to the order of the Tribunal made on 15 May 2020, United was to pay Ms Schofield the sum of $14,000.
21. On or about 25 August 2020, Ms Schofield filed that certificate in the Local Court of NSW.
22. That certificate then operated as a judgment of the Local Court pursuant to s 78 of the NCAT Act (which, after allowance for what she had already been paid, amounted to $7,700 together with certain filing fees). A garnishee order was issued and the sum of $7,810 was debited from United's bank account.
23. The result of all of that is that despite being ordered to pay $14,000 by the Tribunal on 15 May 2020 (being the refund of the purchase price for the vehicle), United has paid $14,000 to Ms Schofield and $7,700 to Fin One, making a total of $21,700.
24. Therefore, Ms Schofield has been overpaid $7,700.

Decision

1. The registrar should not have issued the certificate under s 78 for the sum of $14,000 because the Tribunal had stayed the payment of $7,700 to Ms Schofield on 15 June 2020 and thus $14,000 was not an "amount ordered to be paid by the Tribunal" in that, although there had been such an order in the past, there was no such order current at the time the certificate was ordered, nor at any time since the stay was ordered on 15 June 2020.
2. The giving of the certificate by the registrar under s 78 was a "decision" for the purposes of the NCAT Act because s 5 of the NCAT Act defines "decision" to include the giving of a certificate. Section 5(b) says: 5. Meaning of "decision" (1) In this Act, decision includes any of the following - (a) … (b) giving, suspending, revoking or refusing to give a certificate, direction, approval, consent or permission,
3. The registrar's decision to issue the certificate is an ancillary decision of the Tribunal as defined in s 4 of the NCAT Act because it was a decision made by the Tribunal that was consequential on the decision of the Tribunal made on 15 May 2020 determining the proceedings.
4. We, as an Appeal Panel, have internal appeal jurisdiction over the decision made by the registrar pursuant to s 32 of the NCAT Act because the internal appeal jurisdiction includes ancillary decisions - see Choi v Commissioner of Police, NSW Police Force [2020] NSWCATAP 211 at [64].
5. The decision of the registrar was made in error and should be set aside. It has resulted in overcompensation to Ms Schofield of the sum of $7,700.
6. We have no jurisdiction to set aside the judgment of the Local Court entered as result of the registrar's certificate being filed in that court.
7. But that judgment is liable to be set aside if the certificate upon which it was based is itself set aside as the three authorities to which we next refer establish.
8. In Croker v Commissioner of Taxation [2005] FCA 127 a costs assessor issued a certificate in relation to an assessment of legal costs. That certificate was filed in the Local Court of NSW and became a judgment of that Court. Hely J held: "[11] The Local Court has issued a certificate said to be under the Local Courts (Civil Claims) Act 1970 (Pt 26 r 7) that the records of the Local Court contain an entry to the effect that the plaintiff recovered judgment against the defendant on 1 September 2004. … [12] … [13] In Croker v Federal Commissioner of Taxation (2003) 52 ADR 226 the Full Court said of a certificate such as the present (at 230): 'The purported "registration" of such a certificate as a judgment by the registrar of the Local Court is a mere clerical entry in the records of that court. It is not an order pronounced or a judgment given by a superior court of record.' [14] When a certificate is filed with the Local Court, the Local Court does not adjudicate upon anything. The records of the Local Court either correctly reflect the operation of s 208J(3) of the LPA in the circumstances of the case or they do not. If they do not, then the issue of a 'certificate of judgment' which incorrectly reflects the operation of s 208J(3) is devoid of any legal effect."
9. In Doyle v Hall Chadwick [2007] NSWCA 159 the Court of Appeal was considering a judgment of the Court which came about upon the filing of a certificate of costs of a costs assessor who had assessed legal costs under then then current legislation governing legal costs. In that case Hodgson JA, with whom Mason P and Campbell JA agreed, held as follows: "[48] The 1987 Act discloses a plain legislative intention that there be an appeal to the Supreme Court in a Division against decisions of costs assessors; and in my opinion it was plainly not the intention of the legislature either that the possibility of such an appeal should be wholly lost if a judgment was obtained under s 208J, because the certificate then merges into the judgment and can no longer be set aside; or that there would have to be also an application for leave to appeal to the Court of Appeal pursuant to s 101 of the Supreme Court Act. [49] Accordingly, in my opinion the clear legislative intention is that an appeal to the Supreme Court should be able to proceed after a judgment has been obtained under s 208J. Further, in my opinion, there is no difficulty in giving effect to this legislative intention. It is well recognised that there are judgments that are not based on any decision of the Court of which they are taken to be judgments, but have some other basis; and such judgments may be set aside or varied if that basis is defeated or varied. [50] One example is judgments entered by consent. They are "mere creatures" of the agreement, and may be set aside, without an appeal, on any ground on which the underlying agreement may be set aside: Logwon Pty Ltd v Warringah Shire Council (1993) 33 NSWLR 13 at 28-30. [51] … [52] A judgment arising from a certificate pursuant to s 208J(3) of the 1987 Act is this kind of judgment; and is liable to be set aside or varied if the certificate on which it is based is set aside or varied: cf Croker v Commissioner of Taxation [2005] FCA 127; (2005) 145 FCR 150 at [14]. A further limitation of the effect of such a judgment is considered in Khoury v Hiar [2006] NSWCA 47."
10. The third decision to which we will now refer held similarly, but also referred to the appropriate remedy to grant in such circumstances.
11. In Frumar v The Owners of Strata Plan 36957 [2010] NSWCA 172 a costs certificate from a costs review panel was filed in the District Court of NSW and became a judgment of that Court pursuant to similar provisions to s 78 of the NCAT Act. Pending an appeal from that costs assessment the parties agreed for the appellant to pay to the respondent a certain amount in instalments, with the respondent agreeing to repay any amount found to be overpaid in the event of a successful appeal. The appeal was successful, the determination of the costs review panel was set aside, the matter was remitted to the panel and an order was made that the panel redetermine the application - Frumar v The Owners of Strata Plan 36957 [2006] NSWCA 278; (2006) 67 NSWLR 321.
12. Subsequently, a permanent stay of the District Court judgement was ordered. The question before the Court of Appeal in [2010] NSWCA 172 was the effect of the permanent stay on the agreement to repay overpaid monies.
13. Handley JA, with whom Macfarlan JA agreed, held at [44]: "The decision of this Court on 17 October 2006 [2006] NSWCA 278, 67 NSWLR 321, which set aside the certificate of the panel, deprived the "judgment" 15 November 2005 of its only legal foundation. The District Court was bound, on a proper application, to set the "judgment" aside. UCPR Pt 36.16(2)(a), (3), and (4) confer the necessary power for this purpose, but in any event the District Court has implied power to correct its records: Doyle v Hall Chadwick [2007] NSWCA 159 at [49]-[52]."
14. Thus, the Local Court is bound, in our respectful opinion, to set aside the judgment entered as a result of the filing of the certificate issued by the registrar on 18 August 2020 should it be asked to do so.
15. We note, in passing, that were we wrong about our power to set aside the certificate on an internal appeal, we would have held that we had implied power to correct the Tribunal's records by analogy of reasoning with the holding at [44] of Frumar.
16. In relation to the resulting overpayment in Frumar Handley JA said at [47]-[48]: "The appellant paid $75,000 to the respondent under the threat of legal process based on the "judgment". The legal basis for those payments was a certificate that has been set aside leaving the respondent without an enforceable debt. If the "judgment" had been set aside by the Court of Appeal the successful appellant would have been entitled to unconditional restitution of moneys paid under it with interest: TCN Channel 9 Pty Ltd v Antoniadis [No 2] (1999) 48 NSWLR 381 CA; Production Spray Painting and Panel Beating Pty Ltd v Newnham [No 2] (1992) 27 NSWLR 659 CA. Orders for restitution were made in those cases although in the first the respondent had other claims against the successful party, and a new trial had been ordered in the second."
17. Although the Local Court judgment has not been set aside as yet, but rather the certificate upon which that judgment was obtained, the authorities to which we have referred establish that the judgment has no legal foundation and Ms Schofield has no enforceable debt in relation to the $7,700 she obtained pursuant to that judgment.
18. Indeed, in Frumar, the appeal was from the certificate and not the judgment that resulted from the filing of that certificate. In that case the Court of Appeal entered judgment for the successful appellant for repayment of the overpaid sum (together with interest).
19. As we have said, Ms Schofield has been overpaid $7,700, and she is liable to repay it together with the filing fees incurred in filing it in the Local Court and which United has had to pay.
20. We have power to make ancillary and interlocutory decisions in exercising our internal appeal jurisdiction - s 32(2)(a) of the NCAT Act. Making a decision about the s 78 certificate is an ancillary decision (or, if not, it is an interlocutory decision) because it is a decision which is consequential on the decision determining the proceedings. Pursuant to s 81 of the NCAT Act an Appeal Panel may, on an appeal [which includes the making of ancillary and interlocutory decisions per s 32(2)(a)] "… make such orders as it considers appropriate in light of its decision on the appeal …".
21. Alternatively, if we are wrong about that power, we would have held that we have implied power to make that money order. As Mason P, with whom Beazley JA (as Her Excellency then was) agreed, observed in Director of Public Prosecutions v Shirvanian (1998) 44 NSWLR 129 at p.134: "There are statements of the highest authority to the effect that every court has either inherent or implied power to prevent its own processes being used to bring about injustice: see Maxwell v The Queen (1996) 184 CLR 501 at 512, 525, 535; CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345 at 391 and cases cited."
22. To not order Ms Schofield to repay monies to which she was not entitled would be to allow an injustice.
23. In this case we consider it appropriate to make an order that Ms Schofield pay United the sum of $7,810.

Costs

1. United also seeks legal costs of $2,156.
2. The general rule in relation to costs in the Tribunal in a case involving a sum such as the present is that, unless special circumstances are established, the parties pay their own costs - s 60(1) of the NCAT Act. "Special circumstances" are circumstances out of the ordinary, but they do not have to be extraordinary or exceptional: CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [23]-[31]. Relevant matters for consideration are set out in s 60(3) of the NCAT Act.
3. In our opinion the circumstances are special and warrant the award of costs. Ms Schofield must have known that the Appeal Panel had stayed the order for the payment of $7,700 to her and should never have applied for the certificate for $14,000. The further special circumstance is the error made by the registrar in issuing the certificate.
4. We are entitled to make a gross sum costs order. The principles are fully set out in Islam v Metricon Homes Pty Ltd [2018] NSWCATAP 116 especially at [47]-[48], including that a broad-brush approach is appropriate and that a discount is typically applied in assessing costs on a gross sum basis.
5. Applying those principles, we order Ms Schofield to pay costs assessed in the sum of $1,000 to United.
6. We note that United is able, should it so choose, to make application for an ex-gratia payment or contribution to its legal costs under s 6C of the Suitors' Fund Act 1951 (NSW) should it so desire. Whether the application is granted is a matter for the Director-General.

Orders

1. We make the following orders: 1. A hearing in person is dispensed with. 2. The certificate of the registrar issued on 18 August 2020 is set aside. 3. Order the first respondent to pay the appellant the sum of $7,810 immediately. 4. The first respondent is to pay the appellant costs in the sum of $1,000 immediately.

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: 10 March 2021