Wing Da Pty Ltd v CC United Developments Pty Ltd

THE APPEAL

1. There are two methods of appeal to the Appeal Panel. The first is an appeal as of right on an error of law, the second is on other grounds where the leave of the Panel is required: NCAT Act, s 80(2).
2. The five grounds of appeal (out of 27) ultimately pressed by the appellant in its written submissions concerning the alleged errors of law were both lengthy (54 pages, 208 paragraphs), and difficult to follow as they covered a number of matters the relevance of which was obscure.
3. The appellant's written submissions (AWS) allege the following were errors of law (para 55 AWS). These are: 1. complaints regarding the application of the case of Heard McEwen by the Tribunal in relation to Issue 1 (entitlement to retrospective rent review under section 31 of the RLA); 2. that the decision was in error in relation to Issue 2 (entitlement to compensation under section 34 of the RLA for inhibiting access to the shop or unreasonably causing significant disruption to trade) as it was against the weight of evidence and failed to consider section 72AB of the RLA; 3. that the Tribunal erred in law in relation to Issue 3 (entitlement to compensation under section 71 of the RLA for unconscionable conduct under section 62B of the RLA and/or misleading and deceptive conduct under section of the 62D RLA) by misinterpreting or failing to consider other provisions of the RLA; 4. that rejection of certain documentary evidence proffered on the day of the hearing (termed "Admissibility of the Applicant's Tender Bundle") was an error of law; 5. that the part of the decision rejecting the claim for damages (on the ground that it was unnecessary to decide given the earlier findings, and in any case on the basis that the applicant had not met the burden of proving its loss) was in error.

WHAT IS A QUESTION OF LAW?

1. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [13] and following the Appeal Panel discussed the concept of error of law in detail, and that discussion was summarised in Kalice v Borck & Ors [2017] NSWCATAP 46 at [14] as follows: 1. whether there has been a failure to provide proper reasons; 2. whether the wrong issue has been identified or wrong question posed; 3. whether a wrong principle of law was applied; 4. whether there was a failure to provide procedural fairness; 5. whether there was a failure to take into account relevant considerations; 6. whether irrelevant considerations were taken into account; 7. whether there was insufficient evidence to support a factual finding; 8. whether the decision is such that no reasonable decision-maker make it.

THE GRANT OF LEAVE TO APPEAL

1. In the case of an appeal for which leave is required (i.e. other than on a question of law), clause 12 of Schedule 4 of the NCAT Act limits the Appeal Panel's power to grant leave by requiring that the Appeal Panel can only grant leave if the appellant may have suffered a substantial miscarriage of justice because the decision was not fair and equitable, or was against the weight of evidence, or there was significant new evidence not reasonably available at the time of the hearing below.
2. The Appeal Panel has provided further guidance in the case of Collins v Urban [2014] NSWCATAD 17 (Collins v Urban) at [84] where it was stated: "The general principles derived from these cases can be summarised as follows: (1) In order to be granted leave to appeal, the applicant must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [19] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45]; (2) Ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) 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, BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [20] and the authorities cited there, SAB v SEM [2013] NSWSC 253 at [8] and [9] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45]; (3) In relation to an application for leave to appeal relating to a question of practice and procedure, the application is to be approached with the restraint applied by an appellate court when reviewing such decisions, especially if the application is made during the course of a hearing: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [21] and the authorities cited there."

GROUND 1

1. As to Ground 1 in the appeal, concerning the alleged error of law of the Tribunal in following the Appeal Panel decision in Heard McEwen which considered the right to a rent review provided by section 31 of the RLA and the interaction with the time limit for seeking a review provided by clause 5.21 of the lease, the appellant submitted that the case should have been distinguished, and that the decision was not binding on the Tribunal member.
2. The appellant submitted (AWS 85-90) that the following features of this case permit Heard McEwen to be distinguished: that this case involves allegations of unconscionability and misleading and deceptive conduct; that the lessor had failed to provide a new lease to be executed in a timely manner; that the business premises in this case is a retail shop not an office; that there was no planned redevelopment in Heard McEwen; that the rent reduction if permitted would have been much more material in this case; that the Tribunal had not specifically referred to arguments of the applicant in its decision; that the respondent had sold the property; that the Tribunal had not articulated its reasons sufficiently; that the retrospective rent review expert report was creditable; that the Tribunal was bound to follow a decision of the Appeal Panel only in very limited circumstances.
3. In this case clause 5.21 of the lease was in the same terms as the clause construed in Heard McEwen. In Heard McEwen the office was in retail premises. The RLA applied in both situations.
4. The Appeal Panel held in Lam v Steve Jarvin Motors [2016] NSWCATAD 186 at [196] that it is appropriate for members at first instance to follow decisions of the Appeal Panel on questions of law. We do not accept the appellant's argument that the doctrine of precedent should be applied only when the facts are the same or very similar to those in the relevant proceedings.
5. The appellant has not identified in its submissions how the absence of a specific reference in the decision under appeal to arguments in the applicant's submissions before the Tribunal has led to an error by the Tribunal. The Tribunal made specific reference to the applicant's submissions (at paragraphs 30 to 33 of the decision). The example given in para 86 AWS is far from compelling. Reference is made to other paragraphs of the applicant's submissions to the Tribunal. Those submissions are unpersuasive. The evidence in Ms Guo's affidavit was simply that she did not seek a rent review because the respondents had represented that it was proceeding with a redevelopment and that there was a delay in providing a new lease. Under cross examination she did not elaborate on her affidavit evidence, but did confirm that she was receiving legal advice throughout the process of exercising the option, inserting a demolition clause into the lease, and preparation of a new lease. She also said that she was aware of the respondent's redevelopment plans before it even settled the purchase of the property.
6. As to the Tribunal's adequacy of reasons we consider that the Tribunal provided sufficient and persuasive reasons for following the decision in Heard McEwen in paragraphs 41 to 44 of the decision.
7. None of the differing facts in this case are sufficient to distinguish it from Heard McEwen. We do not consider the Tribunal to have applied a wrong principle of law, and accordingly find that that ground 1 reveals no error of law.

GROUND 2

1. The appellant's argument that the decision on the question of compensation for limiting the access of customers to the shop and the alleged disruption to trading was against the weight of evidence does not stand up. Before the Tribunal the applicant sought compensation pursuant to section 34 of the RLA. That section requires a written notification to the respondents and a failure to rectify as soon as reasonably practicable before a right to compensation arises.
2. In the hearing below the applicant's counsel at para 22 of his written submissions specifically conceded that it had not made a request in writing for rectification and that it could not succeed under section 34 of the RLA.
3. In our view in light of the specific concession the appellant's ground of appeal fails. There can be no error of law in these circumstances. Also, there has been no attempt to justify in submissions why an issue abandoned below should be allowed to be revived on appeal. It is not sufficient for the appellant to point to the balance of paragraph 22 of the applicant's submissions before the Tribunal to claim that it had been misled by the respondents' conduct and so had failed to put a rectification request in writing. If anything this would be a matter to be dealt with under the claim for unconscionable conduct or misleading and deceptive conduct.
4. The argument of the appellant based on section 72AB of the RLA is misconceived. Section 72AB deals with the power of the Tribunal to order rectification of a lease or disclosure statement. The requirement for a written notice requiring rectification of obstruction to premises is a statutory provision contained in section 34 of the RLA, and section 72AB is not relevant to or does not have any impact upon the requirements of section 34.

GROUND 3

1. It is unclear to us what paragraphs 98 - 162 AWS (headed "Locality") are addressed to, and how they identify an error of law. They set out a lengthy history ranging, inter alia, over the respondent's failure to produce certain documents, reference to available documents, assertions concerning inferences which should have been drawn from documents, and the tenancy and vacancy records of the shops in the complex owned by the respondents which were the subject of the development application. At paragraph 156 the AWS it is asserted that there are "causal connections between the Applicant's business losses and the direct actions of the Respondent". In the appellant's submission, before the respondents purchased the shops they were running normally, and after the purchase the shopping complex became gradually vacant and declined as a result of the respondents' redevelopment plans (Paragraph 157-160 AWS). It is further said at paragraph 162 that the respondent's actions directly caused the appellant's business losses.
2. No error of law is identified in these paragraphs, and we will simply treat them as setting the scene for the submission concerning the errors of law alleged in ground 3 of the appeal
3. The appellant submits (AWS para 163) that the Tribunal's decision in relation to both the allegation of unconscionable conduct, and misleading and deceptive conduct was against the weight of evidence, involved a misinterpretation of sections 8, 11(1) and 11(4) of the RLA, and failed to take into account the terms of section 62B(3) of the RLA concerning the issue of the respondents alleged unconscionable and/ or misleading or deceptive conduct.
4. A claim that a finding is "against the weight of evidence" is a portmanteau expression which implies that on consideration of all of the evidence the court or tribunal has in some manner mis-weighted the balance. This is likely to be difficult to establish as an error of law. It is a specific ground mentioned in clause 12 Schedule 4 NCAT Act referring to the grant of leave to appeal. To show that a decision is against the weight of evidence requires that the party making such a submission set out in detail those items of the evidence where too much or too little weight has been accorded by the court or tribunal.
5. The AWS contains a large number of references to alleged facts, and documents, and invites the Appeal Panel to draw adverse inferences against the respondents, and from there go on to find that the Tribunal's decision was against the weight of evidence. The appellant, however, does not go into any detail concerning the findings of the Tribunal which are said to be contrary to facts which were properly proven in the hearing. Without particulars of those parts of the evidence said to have been incorrectly considered by the Tribunal, showing in detail what the true position is said to be, it is likely to be a very difficult task for an appellant to establish that there was insufficient evidence to support a factual finding, or that the Tribunal overlooked or misconceived some part of the evidence.
6. In our view the Tribunal referred to the governing legal considerations relating to a claim of alleged unconscionable conduct in paragraph 62. It considered the evidence was insufficient to permit a finding of unconscionable conduct. It took account of the applicant being legally represented during the lease renewal. It expressed concern about Ms Guo's evidence sufficient to require it to be treated with caution (para 81).
7. We cannot see that the Tribunal failed to use or palpably misused its advantage or acted on evidence that was inconsistent with controversial facts or glaringly improbable. Thus we are unable to see that the decision on the issue involved an error of law.
8. The appellant's argument concerning sections 8 and 11 of the RLA relate to a failure by the respondents to provide an updated lessor's disclosure statement to the appellant at the time of exercise of the option or commencement of the option lease. Ms Guo's evidence was that she knew that the respondents would seek to redevelop the shopping complex including the property before the appellant exercised the option to renew the lease. The appellant's submission appears to be that if the respondents had complied with the requirement to provide an updated disclosure statement which disclosed all material matters then the appellant would not have renewed the lease.
9. The Tribunal took this matter into account (at paragraph 71) and found that the applicant had not established "precisely what the respondent would have been required to disclose in a statement [under section 11 of the RLA] to the applicant" which had not been previously disclosed. The appellant having renewed the lease in the knowledge that a redevelopment was proposed, has also not been able to identify for us exactly what more the respondents should have done/or included in a disclosure statement in order to rebut a claim that the lessor acted unconscionably or was misleading and deceptive. Failure to provide an updated disclosure statement can render the lessor liable to a penalty, and entitle the tenant to terminate the lease, but does not of itself permit an award of compensation to the tenant. It is one of the factors to be taken into account by the Tribunal in considering whether the lessor has acted unconscionably (section 62(3)(i) of the RLA).
10. The appellant further submitted that the Tribunal had failed to take into account the matters set out in section 62B(3)(i) and (k) of the RLA in determining whether the respondent had acted unconscionably. Section 62B(3) sets out a list of considerations that the Tribunal may take into account but does not limit the matters which the Tribunal may consider. It is not necessary for the Tribunal to "tick off" each item in the list. They are not mandatory. It can consider them "en bloc". It must take account of all items considered relevant and ignore items which are not relevant.
11. The Tribunal considered the high bar applied to allegations of unconscionable conduct (paragraph 62). It took into account the evidence of Mrs Guo and one of the directors of the first respondent (at paragraph 63). It took account of the fact that the appellant was legally represented through the period of lease renewal and renegotiation and the fact that the validity of the lease had been upheld by the Supreme Court of New South Wales (at paragraph 64).
12. The appellant has not been able to establish before us any relevant factors which the Tribunal failed to take into consideration, nor any irrelevant matters which were considered. In our view there was no error of law in this finding that there was no unconscionable conduct.
13. The appellant also alleges an error of law in ground 3 in the finding of the Tribunal that the respondents had not engaged in misleading and deceptive conduct in breach of section 62D of the RLA. The claim by the appellant relies on the same 3 arguments as for the unconscionable conduct allegation. The Tribunal considered the misleading and deceptive conduct issue in paragraphs 65 to 74. It found that the evidence in Ms Guo's affidavit refers to matters occurring after the exercise of the option to renew the lease. Although the parties disagreed about when the earliest time the respondent's first disclosed to the applicant its plans for redevelopment (Ms Guo in paragraph 5 of her affidavit of 17 April 2019 states that Mr C Elias told her in 2015 about 2 weeks before the purchase of the property was settled that he planned to develop the site of the complex which included the property, though this was denied by Mr Elias; she confirmed this in her oral evidence Transcript page 65 line 31 - page 66 line 22), it was found they were agreed that redevelopment was disclosed after January 2016 and the disclosure resulted in negotiation of the demolition clause with compensation to be inserted as a variation in the renewed lease (see paragraph 72). The appellant was apparently content to proceed with the lease as varied.
14. The appellant had claimed there was misleading and deceptive conduct in relation to representations concerning the timeframe of the proposed development. It failed to particularise the reliance and detriment and it was found by the Tribunal in any case that any timeframe could only be indicative because the timing of the development depended on so many contingencies.
15. In addition the appellant had claimed that there was misleading and deceptive conduct in relation to the negotiation of the demolition clause and the proffering of a new lease. The Tribunal found that in effect that this claim was answered by the decision of the Supreme Court of New South Wales upholding the validity of the lease including the new demolition clause in proceedings to remove the tenant's caveat and by the award of indemnity costs to the applicant.
16. For the same reasons for our finding that there was no error of law in the Tribunal decision regarding the allegation of unconscionable conduct, we find that there was no error of law in the Tribunal's decision concerning the allegations of misleading and deceptive conduct.
17. It appears to us that Ms Guo and the appellant were largely victims of their own actions. She gave evidence that she knew of the proposed redevelopment before she exercised the option. The appellant was represented by a solicitor during the period of renewal of the lease, including negotiation to vary the option lease, and the insertion of a demolition clause. The appellant has been wholly unable to identify any particular actions or representations by the respondents upon which she relied to her detriment. With the knowledge of the proposed redevelopment of the complex (though without all the details) she validly exercised her option to renew the lease and negotiated for a demolition clause with significant compensation to be included in the option lease. She still has that lease including the demolition clause. Her complaint appears to be that the respondents have allowed the shopping complex to decline while waiting for development to commence, when she expected that the redevelopment would take place rapidly.

GROUND 4

1. The appellant has not articulated in its submissions the alleged error of law committed by the Tribunal in using its discretion to exclude certain documents in the Tender Bundle proffered on the day of the hearing. We note that the Tribunal is not bound by the rules of evidence (section 38(2) of the NCAT Act). The gist of the complaint appears to us to be: 1. in relation to the retrospective rent review expert report and copies of the applicant's financial reports, that these documents had previously been provided to the respondents under a summons (although it was conceded they had not been served in accordance with directions); 2. in relation to leases of other shops in the complex that these had been provided by the respondents to the applicant in answer to a summons; 3. in relation to Ms Guo's tax returns, although they had not previously been provided to the respondent they should nevertheless have been admitted "as they help to explain the profit derived from her business" (para 79 AWS); 4. in relation to the copies of email and SMS excluded from the evidence the appellant claims that they were necessary to be admitted because the respondent had not fully met a request to produce documents between the respondent and Mr and Mrs Papadopoulos. They do not appear to be business records on their face and were revealed to the respondent for the first time at the hearing; 5. in relation to the schedule of damages, that the respondent's counsel had conceded that they should "be admitted as evidence" (para 80 AWS). This claim can be quickly dealt with. The respondent's counsel had conceded that they could be used as an aide memoire. The schedule was not admissible as it stood on the day of hearing. The respondent had not been provided with the document in advance. Further, the matters referred to in it needed to be properly established.
2. House v The King (1936) 55 CLR 499 at 504-505; [1936] HCA 40 (House v The King) was cited with approval in Hannaford v Commonwealth Bank of Australia (2014) NSWCA 297 (Hannaford)in which the Court of Appeal at [14] held that an attack on a discretionary decision must fail: "…unless it can be demonstrated that the decision maker: (a) made an error of legal principle, (b) made a material error of fact, (c) took into account some irrelevant matter, (d) failed to take into account, or gave insufficient weight to, some relevant matter, or (e) arrived at a result so unreasonable or unjust as to suggest that one of the foregoing categories of error had occurred, even though the error in question did not explicitly appear on the face of the reasoning.
3. The fact that the Tribunal makes an error does not necessarily mean that the decision should be set aside, unless the error is material in the sense that it "might" or "may" have made a difference to the decision: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321; [1990] HCA 33 at 353 and 384; House v Defence Force Retirement and Death Benefits Authority (2011) 193 FCR 112; [2011] FCAFC 72 at [31].
4. As to the admission of the Tender Bundle documents proffered on the day, the question of admissibility is a matter in the discretion of the Tribunal. The appellant was legally represented in the matter before the Tribunal. Directions had been given concerning the filing and serving of documents by the parties well in advance of the hearing date. The appellant gave no notice of an intention to rely on documents which had not been formally served on the respondent.
5. On a matter of discretion such as ruling on admissibility of evidence an appeal body will be very reluctant to interfere unless one or more of the factors outlined in House v The King and Hannaford can be substantiated.
6. We also take account of the "guiding principle" in section 36 of the NCAT Act (that proceedings are to be conducted so as to facilitate the just, cheap and quick resolution of the real issues in the proceedings), and the terms of section 38(4) which requires: (4) The Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms.
7. The Tribunal did not set out the grounds upon which it exercised its discretion to exclude the retrospective rent review expert report, or the applicant's financial statements. Although they had not been formally served in accordance with the directions, and the respondent's counsel stated he had not been put on notice that the applicant would rely on them, they had been previously provided in answer to a summons.
8. In the light of the Tribunal's finding that the applicant was not entitled under section 34 of the RLA by reason of the provisions of clause 5.21 of the lease to a rent review in the year commencing 1 June 2016, which we have determined did not involve an error of law, the retrospective rent review expert report was wholly irrelevant in any case. The applicant's financial statements seem to be relevant to the quantum of compensation which might be awarded to the applicant if its claims had succeeded. Given that the applicant's claims were dismissed by the Tribunal, the financial statements were irrelevant.
9. As to the third-party leases, these were documents provided by the respondent in answer to a summons from the applicant. They could not have caught the respondent by surprise. The applicant has not, however, elaborated on the relevance and significance of these documents, and we are unable to see any injustice in the Tribunal not taking these into account. If they had been admitted we cannot see that they would have made any difference to the decision.
10. As to the email and SMS, and to Ms Guo's tax details, these were revealed to the respondent and the Tribunal for the first time at the hearing. It is not put that there was a legitimate forensic purpose for surprising the respondents. The relevance of the email and SMS is not obvious. Ms Guo's tax details seem related to the quantum of compensation which might be awarded to the applicant if its claims had succeeded. The applicant's claims were dismissed so Ms Guo's tax details were irrelevant in any case.
11. In our view the Tribunal properly exercised its discretion to reject the tender of documents at the hearing which had not been filed and served in accordance with directions, and of which no notice had been given to the other party. The appellant has not established to our satisfaction any of the matters referred to in House v The King which would justify the Appeal Panel's interference in the exercise of discretion as to admission of evidence. There was no miscarriage of justice. In our view there was no procedural unfairness in the circumstances.
12. The appellant in its AWS did not specifically press its application to adduce new evidence before the Appeal Panel. Although fresh evidence may be given in an appeal with leave (clause 14 (2) in Schedule 3 of NCAT Act) the decision to grant leave is limited by clause 12 (1) (c) of Schedule 4 of the NCAT Act. This latter clause provides that the new evidence must be both "significant" and also "not reasonably available at the time the proceedings under appeal were being dealt with".
13. The appellant has not explained why the documents in the proposed new evidence were not reasonably available at the time of the original proceedings. Further, the appellant has not indicated in evidence or submissions why these documents are "significant". Nor is it explained in the AWS what the relevance of these documents is.
14. The appellant was represented legally in the Tribunal hearing, and presumably all appropriate documents were considered and if judged relevant were sought to be tendered.
15. The appellant has failed to establish grounds which would convince us that we should grant leave to adduce new evidence in the appeal.

GROUND 5

1. As to the final alleged error of law concerning the issue of damages, having found that the applicant's claims were not established it was unnecessary for the Tribunal to consider the damages question. Its remarks should be seen as obiter dicta. The same logic is applicable in the appeal. As we have found there were no errors of law, the issue of damages does not arise for consideration as the pre-requisites have not been met.

CONCLUSION - ERRORS OF LAW

1. In summary we find that the appellant has failed to establish that there was any error on the part of the Tribunal in the decision the subject of this appeal. There was no error in the Tribunal rejecting the Tender Bundle at the hearing. The appellant has failed to establish that fresh evidence should be admitted on the appeal.

THE GRANT OF LEAVE

1. On the question of whether the Appeal Panel should grant leave to the appellant to appeal we refer to the provisions of clause 12 of Schedule 4 of the NCAT Act and the decision of the Appeal Panel in Collins v Urban at [84] mentioned earlier.
2. We do not consider that the appellant may have suffered a substantial miscarriage of justice. We are unconvinced that the Tribunal was arguably wrong in its decision or that there was some challengeable factual conclusion. We do not consider that there was finding unreasonably arrived at and no clear injustice (particularly in the situation where the appellant has the lease and is still the beneficiary of the $450,000 demolition clause) nor do we consider that the Tribunal went about its fact-finding task in some unorthodox manner. As to the rejection of documents tendered on the day of the hearing we consider that the Tribunal exercised its discretion properly. Accordingly the appellant has failed to establish that leave to appeal should be granted.

ORDERS 1. The appeal is dismissed. 2. The appellant to pay the respondents' costs. 3. A hearing is dispensed with.

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: 30 June 2020