Reported Decision : 53 NSWLR 451 New South Wales Court of Appeal CITATION : THE STATE OF NEW SOUTH WALES v CITCO INDUSTRIES PTY LTD [2001] NSWCA 406 FILE NUMBER(S) : CA 40231/01 HEARING DATE(S) : 2 November 2001 JUDGMENT DATE : 20 November 2001 THE STATE OF NEW SOUTH WALES PARTIES : v CITCO INDUSTRIES PTY LTD JUDGMENT OF : Hodgson JA at 1; Ipp AJA at 7; Rolfe AJA at 22 LOWER COURT JURISDICTION : District Court LOWER COURT DC 4662/99 FILE NUMBER(S) : LOWER COURT Balla DCJ JUDICIAL OFFICER : COUNSEL : Miss N Abadee (Appellant) Mr R Colquhoun (Respondent) SOLICITORS : I V Knight, Crown Solicitor (Appellant) Peter Bruce Richardson, St Leonards (Respondent) CATCHWORDS : CONVEYANCING - Conveyancers Licensing Act 1995 - interpretation - Claim against Compensation Fund pursuant to s 38 Conveyancers Licensing Act 1995 (CL Act) - whether there was a "failure to account" within s 64G(1) Property, Stock and Business Agents Act 1941 by a licensee under the CL Act- whether money entrusted to licensee "in course of licensee's business as licensee" within s 64G(1) - whether work being carried out was "conveyancing work" within s 4 CL Act - whether work being carried out for purpose of "investing money otherwise than as provided by Div 2 of Part 3" within exclusion in s 4(3)(g) CL Act - tension between s 4(1) and s 4(3)(g) - whether distinction between "lending" and "investing" - whether, even if work being carried out not "conveyancing work", there was nevertheless an entrusting of money "to the licensee in the course of the licensee's business as a licensee" Conveyancers Licensing Act 1995 (NSW) LEGISLATION CITED : District Court Act 1973 (NSW) Property, Stock and Business Agents Act (1941) NSW Legal Profession Act 1987 (NSW) CASES CITED: n/a DECISION : Appeal dismissed with costs IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40231/01 DC 4662/99 HODGSON JA IPP AJA ROLFE AJA 20 November 2001 STATE OF NEW SOUTH WALES v CITCO INDUSTRIES PTY LIMITED CONVEYANCING – Conveyancers Licensing Act 1995 – interpretation - Claim against Compensation Fund pursuant to s 38 Conveyancers Licensing Act 1995 (CL Act) – whether there was a "failure to account" within s 64G(1) Property, Stock and Business Agents Act 1941 by a licensee under the CL Act– whether money entrusted to licensee "in course of licensee's business as licensee" within s 64G(1) – whether work being carried out was "conveyancing work" within s 4 CL Act – whether work being carried out for purpose of "investing money otherwise than as provided by Div 2 of Part 3" within exclusion in s 4(3)(g) CL Act – tension between s 4(1) and s 4(3)(g) – whether distinction between "lending" and "investing" - whether, even if work being carried out not "conveyancing work", there was nevertheless an entrusting of money "to the licensee in the course of the licensee's business as a licensee" 1 Facts The respondent brought an action against the appellant pursuant to s 38 of the Conveyancers Licensing Act 1995 (the Act) to recover from the Property Services Compensation Fund the sum of $150,000 which the respondent had paid to a licensee under the Act. The respondent had proposed to lend that sum to a company as an investment; and that company had agreed to provide security for the loan including providing a charge over its business and a mortgage over real property. The licensee was to prepare the loan security documents and was to pay the $150,000 to the company after finalisation and registration of those documents. The licensee did not pay the money over to the company and subsequently failed to account to the appellant for it. Section 38 of the Act, and s 64G of the Property, Stock and Business Agents Act (PSBA Act), conferred on a person a right to recover money from the Compensation Fund, if there was a "failure to account" within s 64G(1) PSBA Act: i.e. "a failure by a licensee to account for money…entrusted to the licensee…in the course of the licensee's business as a licensee". The appellant submitted that the money was not entrusted by the respondent to the licensee in the course of his business as a licensee because the licensee was not carrying out "conveyancing work" for the respondent within s 4 of the Act. Section 4(1) provided relevantly that: For the purposes of this Act, conveyancing work is legal work carried out in connection with any transaction that creates, varies, transfers or extinguishes a legal or equitable interest in any real or personal property, such as (for example) any of the following transactions:… (c) the grant of a mortgage or other charge. The appellant submitted that the work being carried out was not "conveyancing work" because it came within the exclusion in s 4(3)(g), i.e. work being carried out for the purpose of "investing money otherwise than as provided for by Div 2 of Part 3". The appellant relied on the fact that the respondent entered into the transaction as an investment of money otherwise invested in a bank account. The only provision in Div 2 of Part 3 was s 25, which imposed obligations on "a licensee who, in the course of conducting a conveyancing business, receives money on behalf of another person", in relation to the holding, investment, and disbursement of that money. 2 HELD by Hodgson JA, Ipp AJA and Rolfe AJA dismissing the appeal: 3 The licensee was carrying out "conveyancing work": the licensee was not "carrying out work for the purpose of investing money otherwise than as provided for by Div 2 of Part 3". Per Rolfe AJA: (1) There is no relevant distinction, in the context of providing money to be advanced on mortgage security, between "lending" and "investing". (2) There is no tension between ss 4(1) and (2) on the one hand and s 4(3)(g) on the other, because s 4(3)(g) is qualified such that it only excludes work carried out for the purpose of investing money otherwise than as provided for by Div 2 of Part 3, i.e. it only excludes work carried out for the purpose of investing money which is not received by a licensee in the course of conducting a conveyancing business. Per Hodgson JA: (3) The tension between s 4(2) and s 4(3)(g) is to be resolved as follows: (a) If the transaction is in substance the giving or obtaining of security for a loan made on simple or standard terms, then the legal work in connection with that transaction is conveyancing work; and the qualification to s 4(3)(g) makes it clear that any dealing with money in accordance with Div 2 of Part 3 does not affect this. (b) However if the transaction is in substance investment, on terms negotiated for the particular transaction, in some financial, commercial or industrial venture, then the fact there may be mortgages or other securities given in connection with the transaction will not make the legal work in connection with that transaction conveyancing work. The fact that there is dealing with money in connection with the transaction in accordance with Div 2 of Part 3 will not make the work conveyancing work, where this dealing is only incidental to the further investment contemplated by the transaction. Per Rolfe AJA (Hodgson JA agreeing): (1) The $150,000 was paid to the licensee "in the course of conducting a conveyancing business" notwithstanding that the overall purpose of the transaction was as an investment. The investment was clearly one to be secured in circumstances which would lead to the creation of documents brought into existence in carrying out conveyancing work. In doing so he was conducting a conveyancing business. Thus there had to be an investment pursuant to s 25. Therefore the money was not to be invested "otherwise than in accordance with Div 2 of Pt 3". Per Ipp AJA: (2) Work for the purpose of investing money "otherwise than as provided for by Div 2 of Part 3" is work for the purpose of investing money that a licensee receives otherwise than in the course of conducting a conveyancing business or money that is not received by a licensee on behalf of another person. The licensee received the $150,000 both in the course of conducting a conveyancing business and on behalf of another person. Therefore he was not doing work for the purpose of investing money "otherwise than as provided for by Div 2 of Part 3". Even if the work being carried out was not "conveyancing work", there was nevertheless an entrusting of the money "to the licensee in the course of the licensee's business as a licensee" (per Hodgson JA only) Per Hodgson JA: (3) The appellant accepted that the money was entrusted to the licensee in the course of the licensee's conveyancing business; and the Act makes it clear that "the licensee's business as a licensee" is co-extensive with the licensee's conveyancing business as defined, so that the consequences of failure to account would arise unless the entrusting was not in the course of that business but was, say, for a non-business purpose or for the purpose of some other business of the licensee or some transaction distinct from the conveyancing business. IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40231/01 DC 4662/99 HODGSON JA IPP AJA ROLFE AJA 20 November 2001 STATE OF NEW SOUTH WALES v CITCO INDUSTRIES PTY LIMITED Judgment 1 HODGSON JA: I agree with the orders proposed by Rolfe AJA, and substantially with his reasons. 2 In my opinion, the tension between s.4(2) and s.4(3)(g) of the Conveyancing Licensing Act 1995 ("the CL Act") is to be resolved as follows. 3 If the transaction is in substance the giving or obtaining of security for a loan made on simple or standard terms, then the legal work in connection with that transaction is conveyancing work; and the qualification to s.4(3)(g) makes it clear beyond argument that any dealing with money in connection with this transaction in accordance with Division 2 of Part 3 of the CL Act does not affect this. 4 However, if the transaction is in substance investment, on terms negotiated for the particular transaction, in some financial, commercial or industrial venture, then the circumstance that there may be mortgages or other securities given in connection with the transaction will not make the legal work in connection with that transaction conveyancing work within s.4; and in my opinion the circumstance that there is dealing with money in connection with the transaction in accordance with Division 2 of Part 3 of the CL Act will not make the work conveyancing work, where this dealing is only incidental to the further investment contemplated by the transaction. Legal work for reward in connection with such a transaction could therefore be done only by a solicitor or a barrister. 5 I would add that, even if the work in connection with the mortgage in this case had not been conveyancing work, that would not necessarily have been fatal to the respondent's case. The appellant accepted that, even on that assumption, the money was entrusted to the licensee in the course of the licensee's conveyancing business, as defined in the Dictionary to the CL Act. Accordingly, pursuant to s.38 of the CL Act and s.64G of the Property, Stock and Business Agents Act 1941 (the "PSBA Act"), there was a failure to account with the meaning of s.38 of the CL Act, unless the entrusting was not "in the course of the licensee's business as a licensee" within s.64G of the PSBA Act. 6 Ms. Abadee for the appellant submitted that if the work in this case was not conveyancing work, then the entrusting would not have been in the course of the licensee's business as a licensee. However, I think the CL Act makes it clear that the licensee's business as a licensee is co-extensive with the licensee's conveyancing business as defined in that Act, so that the consequences of failure to account would arise unless the entrusting was not in the course of that business but was, say, for a non-business purpose or for the purpose of some other business of the licensee or some transaction distinct from the conveyancing business. 7 IPP AJA: The facts and circumstances relevant to this appeal are set out in the judgment of Rolfe AJA and it is not necessary for me to repeat them save to the extent necessary to explain my reasons for agreeing with the orders proposed by his Honour. 8 The respondent desired to "invest" $150,000 by lending that sum to a company intending to import liquor from New Zealand. The importing company had agreed to repay the money together with interest of $10,000 within two months of the making of the loan. 9 The respondent drew a cheque crossed "Account Payee" for the sum of $150,000 payable to "Twin Towns Conveyancing". The respondent gave the cheque to Mr Wood. Mr Flynn of the respondent explained that "the cheque for $150,000 was for the secured loan and to be paid to the borrower company by Wood and Twin Towns Conveyancing after finalisation and registration of the loan security documents by Wood on my behalf". 10 Mr Wood, apparently, did not carry out the respondent's instructions, hence the respondent's claim against the Property Services Compensation Fund. The respondent's claim was upheld at trial. 11 The appellant accepted that the issue on appeal was whether or not Mr Wood received the $150,000 in the course of carrying out "conveyancing work" as defined by s 4 of the Conveyancers Licensing Act 1995 (NSW). 12 Section 4(1) provides: "4. Conveyancing work (1) For the purposes of this Act, conveyancing work is legal work carried out in connection with any transaction that creates, varies, transfers or extinguishes a legal or equitable interest in any real or personal property, such as (for example) any of the following transactions: (a) a sale or lease of land, (b) the sale of a business (including the sale of goodwill and stock-in-trade), whether or not a sale or lease of land or any other transaction involving land is involved, (c) the grant of a mortgage or other charge." Section 4(2) provides: "(2) Without limiting subsection (1), conveyancing work includes: (a) legal work involved in preparing any document (such as an agreement, conveyance, transfer, lease or mortgage) that is necessary to give effect to any such transaction, and (b) legal work (such as the giving of advice or the preparation, perusal, exchange or registration of documents) that is consequential or ancillary to any such transaction, and (c) any other legal work that is prescribed by the regulations as constituting conveyancing work for the purposes of this Act." Section 4(3)(g) provides: "[ C]onveyancing work does not include the carrying out of any work for the purpose of: … (g) investing money otherwise than as provided for by Division 2 of Pt 3 …" 13 The loan to be made by the respondent was to be secured by a registered charge over the business of the importing company, a second mortgage over a freehold service station in northern New South Wales and a personal guarantee. Mr Wood was to prepare the security documents and in fact provided the respondent with a second mortgage document over the service station site. 14 In the circumstances, Mr Wood was to carry out legal work in connection with a transaction that involved the creation or transfer of a legal or equitable interest in real property. Accordingly, the work to be done by Mr Wood was legal work carried out in connection with a transaction that fell squarely within s 4(1). Indeed, it was work that was covered by the examples given in s 4(1)(c), namely, the preparation of "a mortgage or other charge". 15 It may be that, in different circumstances, the preparation of a mortgage or other security documents may be such an insignificant part of a particular transaction that work carried out in connection with that transaction is not "conveyancing work" as defined by s 4(1). I express no opinion as to that question. But the present circumstances are not of that kind. The transaction in question was relatively simple. The $150,000 was to be lent against the security of the instruments to be prepared by Mr Wood, namely, the mortgage, the charge and the guarantee. These instruments were a significant and integral part of the transaction concerned. 16 The appellant contended that even if the work to be done by Mr Wood fell within s 4(1), it was not conveyancing work as it fell within the exclusion provided by s 4(3)(g), namely, work for the purpose of investing money otherwise than as provided for by Division 2 of Pt 3. Whether Mr Wood's work was indeed so excluded from conveyancing work was a fundamental issue on appeal. 17 The relevant provisions in Division 2 of Part 3 are s 25(1) and s 25(2). They provide: "25 Money received by licensee on behalf of another (1) A licensee who, in the course of conducting a conveyancing business, receives money on behalf of another person: (a) must pay the money, within the time prescribed by the regulations, into a general trust account at a bank, building society or credit union in New South Wales and must hold the money in accordance with the regulations relating to trust money, or (b) if the person on whose behalf the money is received directs that it be paid otherwise than into a general trust account, must pay the money as directed and (if the money is to be held under the direct or indirect control of the licensee for more than the period prescribed by the regulations) must hold the money in accordance with the regulations relating to controlled money. (2) In either case, the licensee must hold the money exclusively for, and must disburse the money in accordance with the directions of, the person on whose behalf it is held." 18 Mr Wood was a "licensee" under the Act. The appellant did not dispute that Mr Wood received the $150,000 in the course of conducting a conveyancing business. On the evidence, that could not be gainsaid. Therefore, as a licensee, Mr Wood received the $150,000 in the course of a conveyancing business. It followed, therefore, that Mr Wood was bound to comply with s 25(1)(a) or s 25(1)(b) as the case may be. 19 It is not entirely clear whether the respondent directed that Mr Wood pay the money otherwise than into a general trust account. It may be that the evidence must be understood as meaning that Mr Wood was obliged to pay the money directly to the company intending to import liquor from New Zealand. Whatever the position may be in this respect the money received by Mr Wood had to be dealt with either in terms of s 25(1)(a) or s 25(1)(b). 20 In my opinion, work for the purpose of investing money "otherwise than as provided for by Division 2 of Part 3" is work for the purpose of investing money that a licensee receives otherwise than in the course of conducting a conveyancing business or money that is not received by a licensee on behalf of another person. Mr Wood received the $150,000 both in the course of conducting a conveyancing business and on behalf of another person, namely, the respondent. Therefore, at the relevant time, he was not doing work for the purpose of investing money "otherwise than as provided for by Division 2 of Part 3". 21 Accordingly, in my opinion, the appeal must fail. I agree with the orders proposed by Rolfe AJA. ROLFE AJA: Introduction 22 The plaintiff/respondent, Citco Industries Pty Limited, for which Mr R Colquhoun of Counsel appeared, sued the defendant/appellant, the State of New South Wales, for which Miss N E Abadee of Counsel appeared, in the District Court, seeking to recover $150,000, interest thereon in accordance with the District Court Act and costs. The appellant admitted that it was sued pursuant to the Crown Proceedings Act 1988 and s 64J(3) of the Property, Stock and Business Agents Act 1941, ("the PSBA Act"), "and, as such, is the appropriate defendant in these proceedings". 23 On 16 March 1998, a director of the respondent, Mr Martin Francis Flynn, caused it to pay $150,000 to Mr Alan Grant Wood, who was, at all material times, a licensee under the Conveyancers Licensing Act 1995, ("the CL Act"), trading as Twin Towns Conveyancing. This occurred after Mr Flynn read an advertisement seeking finance, which stated, inter alia, that all lending would be fully secured and all documents prepared by a solicitor. 24 Mr Flynn dealt, initially, with a mortgage broker, Mr Norman Hayde, whose firm had placed the advertisement and who advised him that a solicitor, Mr Delaney, usually attended to the paperwork. Mr Flynn spoke to Mr Delaney and discussed the documentation that would be required. 25 Mr Wood approached Mr Hayde and told him that he had a client who wished to borrow $150,000 for a short term, and that the loan would be secured by a charge. Mr Flynn said that Mr Hayde told him that the loan was to be secured by a registered charge over the business of a company, a second mortgage over a freehold service station site in northern New South Wales, and a personal guarantee from the borrower. The appellant has admitted that Mr Wood was to prepare the charge and personal guarantee. 26 It was found that Mr Wood provided the respondent with a second mortgage document over the property as one of the securities for the transaction and, on appeal, Miss Abadee stated that the appellant did not challenge this or any other factual findings. 27 In his statement to the police, Mr Flynn said that, on 16 March 1998, he made out a cheque to Twin Towns Conveyancing in the sum of $150,000, which was to be paid to the borrower by Mr Wood and Twin Towns Conveyancing, after finalisation and registration of the loan security documents by Mr Wood on the respondent's behalf. Several payments of interest amounting to $12,000 were made. However, in May 1998, Mr Wood failed to account to the respondent for the principal sum, and, on 11 June 1998, as a result thereof, Mr Flynn, on behalf of the respondent, made a claim against the Property Services Compensation Fund under s 38 of the CL Act, which was ultimately disallowed by letter dated 4 January 1999. Thereafter, these proceedings were instituted and they were heard by her Honour, Judge Balla, in early 2001. On 15 March 2001 her Honour ordered judgment for the respondent in the sum of $176,648.49, which comprised $138,000 principal and $38,648.49 interest, pursuant to s 83 A of the District Court Act. There was no challenge to the amount awarded. The Appeal 28 The appellant asserted that her Honour erred: (a) As to the proper construction of s 4 of the CL Act and, in particular, of sub s 4(3)(g); in not finding that any work carried out by the licensed conveyancer for the respondent was carried out for the purpose of the respondent's investing money otherwise than as provided for by Division 2 of the CL Act, and thus, by reason of sub s 4(3)(g) was not conveyancing work; (b) In not finding that any money entrusted by the respondent to the licensed conveyancer was not entrusted to him "in the course of his business as a licensee", so that there was no "failure to account" pursuant to s 64G(1) of the PSBA Act; and (c) In finding, at page 7 annexure "B", that the exclusion in sub s 4(3)(g) of the Act was limited to unsecured loans. The Legislative Provisions 29 The CL Act was preceded by the Conveyancers Licensing Bill 1992. The CL Act is stated to be one to provide for the licensing and regulation of conveyancers, to repeal the 1992 Act, and for other purposes. 30 It is necessary to set out certain of its provisions. Section 4 provides: 4. Conveyancing work (1) For the purposes of this Act, conveyancing work is legal work carried out in connection with any transaction that creates, varies, transfers or extinguishes a legal or equitable interest in any real or personal property, such as (for example) any of the following transactions: (a) a sale or lease of land; (b) the sale of a business (including the sale of goodwill and stock-in-trade) whether or not a sale or lease of land or any other transaction involving land is involved; (c) the grant of a mortgage or other charge. (2) Without limiting subsection (1), conveyancing work includes: (a) legal work involved in preparing any document (such as an agreement, conveyance, transfer, lease or mortgage) that is necessary to give effect to any such transaction, and (b) legal work (such as the giving of advice or the preparation, perusal, exchange or registration of documents) that is consequential or ancillary to any such transaction, and (c) any other legal work that is prescribed by the regulations as constituting conveyancing work for the purposes of this Act. (3) However, conveyancing work does not include the carrying out of any work for the purpose of: (a) a mortgage on non-residential property where the amount secured by the mortgage exceeds 7 million dollars (with non-residential property being any property that is not residential property for the purposes of Division 8 of Part 4 of the Conveyancing Act 1919), or (b) commencing or maintaining legal proceedings, or (c) establishing a corporation or varying the memorandum or articles of association of a corporation, or (d) creating, varying or extinguishing a trust, or (e) preparing a testamentary instrument, or (f) giving investment or financial advice, or (g) investing money otherwise than as provided for by Division 2 of Part 3, and does not include any work that is prescribed by the regulations as not constituting conveyancing work for the purposes of this Act. (4) In this section: "legal work" means work that, if done for fee or reward by a person who is neither a solicitor nor a barrister, would give rise to an offence under Part 3A of the Legal Profession Act 1987. 31 The Dictionary to the Act provides that "conveyancing business" means: "… any business in the course of which conveyancing work is carried out for fee or reward, whether or not the carrying out of conveyancing work is the sole or dominant purpose of the business". 32 The essential purpose of the CL Act is to allow a licensee to carry on a "conveyancing business" and to perform "conveyancing work" without being guilty of an offence under Part 3A of the Legal Profession Act 1987: s 6(1). Section 6(2) provides: "This section does not permit a licensee to do anything, or to allow anything to be done, that is calculated to imply that the licensee is qualified to act as a solicitor". 33 But for the provisions of the CL Act, and its interrelationship with the Legal Profession Act, a person not entitled to carry out "legal work" would not be entitled to carry out "conveyancing work". 34 Section 38 of the CL Act provides: "Claims can be made against Compensation Fund (1) Part 6 (Compensation Fund) of the PSBA Act applies to and in respect of a failure to account (within the meaning of that Part) arising from any act or omission of a licensee under this Act that occurs on or after the commencement of this Act, as if the licensee were a licensee under the PSBA Act. (2) For that purpose, a licensee under this Act is taken to be a licensee within the meaning of the PSBA Act and a licence under this Act is taken to be a licence within the meaning of the PSBA Act. (3) Section 64E (4) of the PSBA Act is not applicable to a person as a licensee under this Act". 35 Section 64G of the PSBA Act provides: "(1) In this Division, a reference to a failure to account is a reference to a failure by a licensee to account for money or other valuable property entrusted to the licensee or an associate of the licensee in the course of the licensee's business as a licensee". A Consideration Of The Appellant's Submissions 36 The appellant's written submissions, which were those upon which reliance was placed in its oral submissions, identified the only issue on appeal as one of law, namely: "It is whether, on the facts as found by her Honour, there was a failure to account to the Respondent within the meaning of section 64G of the Property, Stock and Business Agents Act 1941 (NSW) ('the PSBA Act') by a conveyancer licensed under the Conveyancing Licensing Act 1995 (NSW) ('the CL Act'). That issue turns upon the proper construction of section 64G of the PSBA Act and section 4 of the CL Act, in particular, sub-section 4(3)(g). The Appellant does not challenge any of her Honour's findings of fact". 37 The essential factual finding, on which the submission rested, was that the respondent entered into the transaction giving rise to the mortgage and the charge to find an investment vehicle for money otherwise invested in a bank account. 38 Sub sections (1) and (2) of s 4 of the CL Act state, respectively, what "conveyancing work" "is" and "includes". Relevantly for present purposes, the first provides, inter alia, that it is legal work carried out in connection with any transaction that creates a legal or equitable interest in any real property, such as "(for example)" the grant of a mortgage or other charge. 39 It was not in issue that the work carried out by Mr Wood was in connection with a transaction giving rise to the grant of a mortgage and equitable charge to the respondent, which was either an "other charge" or, within the meaning of sub s (2)(a), "an agreement". The work, accordingly, constituted "conveyancing work", and it was being carried out for fee or reward. 40 It was found that $150,000 was paid to Mr Wood to be lent, or as the appellant would have it invested, against the security of the mortgage, the charge and a personal guarantee. The loan on investment was for a short term and interest was payable. Save for the receipt of $12,000 interest, the respondent received back no other money. 41 The operation of s 38 of the CL Act, and Part 6 of the PSBA Act, gives a person a right to recover from the Compensation Fund, if there is a failure to account, i.e., relevantly for present purposes, a failure by a licensee to account for money entrusted to him "in the course of the licensee's business as a licensee": s 64G of the PSBA Act. 42 The appellant's submission was that, on a proper construction of ss 4(3)(g) and 64G, the money was not entrusted by the respondent to Mr Wood in the course of his business as a licensee, because he was not performing conveyancing work as defined by s 4 for the respondent. The submission continued: "He was, instead, carrying out work for the purpose of the Respondent investing money otherwise than as provided for by Division 2 of Part 3. By reason of section 4(3)(g) of the CL Act, that is not 'conveyancing work'." 43 The appellant sought to distinguish, in the context of providing money to be advanced on mortgage security, between "lending" and "investing". I do not consider that there is any relevant distinction in the present context. A mortgagee lends money to a mortgagor on security and, usually, at interest. The lending of money, in those circumstances, is an investment from which the mortgagee expects to receive interest and the repayment of the principal at the expiration of the mortgage's term. This view is supported by the Second Reading Speech in relation to the 1992 CL Act in which the Minister said, in referring to the forerunner of s 4(3)(g): "Conveyancers will not be permitted to do work involved in … investment of money other than investment of money under the trust account provisions where it is incidental to a property transaction". If the appellant's submissions are correct, there would be, as Miss Abadee acknowledged, a real tension between those provisions of ss 4(1) and (2) which constitute the provision of security for the repayment of money lent, albeit by way of investment, "conveyancing work", on the one hand, and s 4(3)(g) which, on the appellant's submission, would prevent such activities being "conveyancing work", on the other. I do not consider that, on a proper construction of the CL Act, there is any such tension. 44 Section 4(3)(g) excludes from "conveyancing work", any work for the purpose of investing money, otherwise than as provided for by Division 2 of Part 3. The appellant relied on her Honour's finding that "… the plaintiff " (respondent) "did enter into the transaction for the purpose of finding an investment vehicle for money otherwise invested in a bank account … " as showing that there was an "investing" of money. But, for the appellant to succeed, it must establish that there was an "investing", "otherwise than as provided for by Division 2 of Part 3". 45 I have set out the respondent's uncontradicted evidence that the cheque for $150,000 was for the secured loan and the money was to be paid to the borrower by Mr Wood and Twin Towns Conveyancing after finalisation and registration of the loan security documents by Mr Wood on the respondent's behalf. This made clear that the purpose of paying the money to Mr Wood, which was not in issue, was in respect of the loan transaction to be secured, inter alia, by a mortgage which constituted an investment. 46 The only provisions for investing money in Division 2 of Part 3 are to be found in ss 25(1)(a) and (b). They require that a licensee, who, in the course of conducting a conveyancing business, receives money on behalf of another person (i.e., in the present case, either the mortgagee or the mortgagor), must pay it into a specified general trust account, and hold it in accordance with the regulations relating to trust money: (sub s (a)); or must disburse it in accordance with the directions of the person on whose behalf the money is received: (sub s (b)), i.e., in the present case, either the mortgagee or the mortgagor. 47 Accordingly, the $150,000, when paid over to Mr Wood, had to be invested in accordance with one or other of these sub sections, provided that it was paid to him in the course of conducting a conveyancing business. The reason advanced why this was not so was that the overall purpose was as an investment. However, the investment was clearly one to be secured in circumstances which would lead to the creation of documents brought into existence in carrying out conveyancing work. In doing so he was conducting a conveyancing business. Thus, in my opinion, there had to be an investment pursuant to s 25. The better view, in my opinion, is that the money had to be invested pursuant to sub s (b). In those circumstances, the money was not to be invested otherwise than in accordance with Division 2 of Part 3 and, therefore, the work done by the licensee did not cease to be conveyancing work by reason of s 4(3)(g), merely because the respondent was lending the money, secured in the way to which I have referred, as an investment. The licensee was obliged, on receipt of the money, to invest it in one of the ways provided by s 25. 48 The appellant's argument fastened, as I have said, on the lending being an investment. I am prepared to accept that lending may be an investment, just as an investment may be lending, and that in this case, the respondent was investing money. But it would be an extraordinary result if the CL Act allowed licensees to carry out conveyancing work, as relevantly defined, but did not provide protection to either the mortgagee or mortgagor, where money was handed over to the licensee to complete the transaction, but was then misappropriated. In my opinion, there is no such consequence because s 4(3)(g) ensures, by reference to s 25, that the money, when handed over for the purpose of the "conveyancing work", be not invested otherwise than as provided by that section and, therefore, otherwise than as provided by Division 2 of Part 3. 49 In these circumstances, the tension, which would otherwise exist, between the provisions of ss 4(1) and (2) in relation to the granting of mortgages, and other charge documents, and, therefore, the lending and investment of money, and s 4(3), which would preclude such work being "conveyancing work", is released. 50 Accordingly, in my opinion, s 4(3)(g) does not lead to the conclusion that the work was not "conveyancing work". Rather, in my opinion, it deliberately retains the concept that the work was "conveyancing work" for the reasons that I have suggested. Therefore, in my opinion, there was a "failure to account" within the meaning of s 64G of the PSBA Act. Indeed, it was conceded, as I understood it, that if s 4(3)(g) did not do the work required by the appellant, this result followed. Result 51 I propose that the appeal be dismissed with costs. ****** 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.