New South Wales Supreme Court CITATION : Strathfield Real Estate (Management)Pty Ltd v Dushyanthira & Ors [2007] NSWSC 225 HEARING DATE(S) : 14/03/2007 JUDGMENT DATE : 21 March 2007 JUDGMENT OF : Associate Justice Malpass DECISION : The Orders made by the Tribunal (which bear the date 26 May 2006) are set aside. The matter is remitted to the Tribunal for further determination. The defendants are to pay the costs of the proceedings. CATCHWORDS : Commission disputes - short reasons of Tribunal - denial of procedural fairness - statutory requirements - sufficiency of reasons - error as to jurisdiction. LEGISLATION CITED : Consumer Trader & Tenancy Tribunal Act 2001 (NSW) Supreme Court Act 1970 (NSW) CASES CITED : Craig v State of South Australia (1994) 184 CLR 163 Strathfield Real Estate (Management)Pty Ltd Shanthini Dushyanthira PARTIES : Thirugnanaselvam Dushyanthira VSA & Associates Pty Ltd t/as VSA Town & Country Real Estate Consumer Trader & Tenancy Tribunal FILE NUMBER(S) : SC 30084/06 COUNSEL : Mr S.W. Balafoutis (Pl) Mr N. A. Confos (Def's) SOLICITORS : Steve Walker & Associates (Pl) Otto Stichter & Associates (Def's) LOWER COURT JURISDICTION : Consumer Trader and Tenancy Tribunal of NSW LOWER COURT FILE NUMBER(S) : 06/04220 LOWER COURT JUDICIAL OFFICER : A senior Member LOWER COURT DATE OF DECISION : 26/05/2006 - 1 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ASSOCIATE JUSTICE MALPASS 21 MARCH 2007 30084/06 Strathfield Real Estate (Management) Pty Ltd v Shanthini Dushyanthira & Ors JUDGMENT 1 HIS HONOUR: The first and second defendants (the defendants) were the owners of a house at Strathfield (the house). An exclusive private sale agency agreement was made with VSA & Associates Pty Ltd (VSA). The exclusive agency period was to run from 1 October 2005 to 31 January 2006. VSA introduced a prospective purchaser. The offer by that prospective purchaser was not accepted by the defendants. 2 The principal of VSA was Victor Satkunanandan (Victor). He was going overseas in late 2005. The defendants wanted to put the house up for auction in December 2005. The defendants had purchased another property at Strathfield at auction on 12 November 2005. It was hoped to settle both transactions at the same time. The defendants were concerned that Victor would be overseas if the house was put up for auction by VSA in December 2005. 3 The version presented by the defendants was that there was a meeting with Victor on 17 November 2005 and that a conversation took place as propounded in paragraph 16 of a statutory declaration made by the second defendant. 4 It was contended by the defendants that that conversation brought about a termination of the private sale agency agreement on the basis that VSA would be paid its commission if the prospective purchaser brought the property at the auction. 5 In paragraph 18 of the statutory declaration there appears the second defendant's version of a conversation had with Sammy Haddad (Sammy) of the plaintiff on 18 November 2005. The paragraph contains the following:- "Myself: I have an exclusive agency agreement with Victor [the principal of the third defendant] but he is going overseas. He gave me a written offer for one million dollars which I rejected. He says that I am free to auction the property with you on the basis that he will be paid the commission if it is his buyer who purchases the property. Haddad: I think it is worth more than that and you should auction it. You should auction it before Christmas, otherwise you will need to wait until March when the buyers start coming back again. I will contact Victor and work with him. I will share the commission with him. …. . Myself: Victor has an open home scheduled for this Saturday. Haddad: If there are any buyers from that, I will work with Victor and we will share the commission. Myself: I will talk to Victor about that." 6 The defendants further contend that, in reliance upon what was said by Sammy, an exclusive auction agency agreement with the plaintiff was signed by them on 18 November 2005. It gave the plaintiff an entitlement to a fee of 2% plus GST if, inter alia, the house was sold during the exclusive agency period (from 21 November 2005 for 60 days) by the plaintiff. 7 The defendants also contended that following the signing of that agreement a letter (the letter) was sent to Sammy on 18 November 2005. It contained, inter alia, the following:- "Further to our verbal conversation, I confirm that VSA Town and country Real Estate, Strathfield introduced Eva Sarah Song Hsieh to buy the above property. This prospective buyer made a written offer of $1million to purchase this property but this offer was turned down by us. As I mentioned to you if this person purchases this property at the auction the commission should be paid to VSA Town and Country." 8 The house was offered at auction and sold on 10 December 2005. The prospective purchaser was the successful buyer at the auction. The plaintiff claimed commission on the sale. VSA also made a claim for commission. 9 Disputes led to proceedings in the Consumer, Trader and Tenancy Tribunal (the Tribunal). The defendants brought an application to ascertain their liability in respect of commission. A contested hearing took place on 26 May 2006. The Tribunal made orders to the following effect:- 1. That the defendants were to pay VSA commission in the sum of $16, 087.50 2. That the defendants were not required to pay commission to the plaintiff. 10 The Tribunal member gave the following short reasons:- "1. The Tribunal accepts that the applicant entered into an exclusive agency agreement with the first respondent and that the second respondent was aware that such agreement had been entered into at the time the second respondent entered into an auction agency agreement with the applicant. 2. The Tribunal accepts that the exclusive agency agreement between the applicant and the first respondent was terminated prior to the applicant entering into the auction agency agreement with the second respondent subject to the provision that the first respondent would be entitled to the whole of the commission from any purchaser introduced to the property by the first respondent and who subsequently purchased the property. 3. The Tribunal accepts the evidence of the applicant that the auction agency agreement between the applicant and the second respondent was subject to the condition as to purchasers introduced by the first respondent and that it was a matter for the second respondent to address any sharing of commissions or otherwise with the first respondent. 4. The evidence of the applicant in relation to the applicant's dealings with the two respondents regarding commission is unaffected by any clauses or information contained in the contract for sale of land dated 10/12/05." . 11 On 14 June 2006, a request for reasons was made pursuant to s49 of the Consumer Trader & Tenancy Tribunal Act 2001 (NSW) (the Act). It produced the following:- "I refer to request for the written reasons for a decision made by the Consumer, Trader and Tenancy Tribunal on 26 May 2006. The Presiding Member heard the parties' evidence, applied his discretion in giving weight to the evidence and handed down his order on 29 May 2006. The Presiding Member provided reasons for his decision on the same day. I have sought comment from the Presiding Member in relation to your request. He advised me that he favoured the evidence of one party over another and that he has nothing further to add to the order." (see letter dated 20 June 2006(the Tribunal letter)). 12 The plaintiff commenced proceedings in this Court. It seeks to challenge what was done by the Tribunal. Relief is sought pursuant to s65 of the Act and s69 of the Supreme Court Act 1970 (NSW). VSA is the third defendant in these proceedings. 13 Section 65 of the Act enables relief to be given where there has been a denial of procedural fairness. In this case, it was said this was done by failing to give adequate reasons. Section 49 of the Act also sets out what a Statement of Reasons must comprise. 14 Section 69 of the Supreme Court Act enables judicial review of a decision of a Tribunal (inter alia, where there has been jurisdictional error). 15 The first question to consider is whether or not there has been a denial of procedural fairness which justifies the disturbing of what was done by the Tribunal. If the plaintiff is successful on that question, there is no need to address any matter of jurisdictional error. 16 Section 65 enables the granting of relief where, in relation to the hearing or determination of the matter, a party has been denied procedural fairness. There seems to be no dispute between the parties that a failure to give sufficient reasons was a denial of procedural fairness as contemplated by s65. Whilst it was not argued, it would appear to fall within the scope of "determination of the matter". 17 The hearing before the Tribunal was conducted by a senior Tribunal member. The parties were not legally represented. There is a transcript for the hearing. However, the parties had reservations about its overall accuracy. 18 The Tribunal had before it a number of statutory declarations (including from the second defendant, Victor and Sammy). It also had documentation (including the agreements and the letter). 19 It was contended by the defendants that the plaintiff was aware of the private sale agency agreement. The plaintiff had dispute with this contention. It disputed that the terms and period of it were brought to its attention and contended that the defendants had led them to believe that Victor was a close family friend and that the VSA agreement had been concluded. The plaintiff also disputed that it had received the letter. 20 The Court was taken to certain pages in the transcript (pp72-77) which may be taken as shedding some light on the questions that the senior Tribunal member was posing for himself. One matter mentioned therein was whether or not there was disclosure by the defendants of the pre-auction offer and whether or not there had been receipt of the letter by the plaintiff. Another was that the plaintiff was contending that it had been advised that the private sale agreement had been terminated and "were not advised of anything which was anything left over in relation to that". This being said to be the reason why no contact was made between the plaintiff and VSA. 21 I should add that the contract for sale of the house named Devine Real Estate (which is another name used by the plaintiff). Clauses 3 and 4 of the Special Conditions thereof provided as follows:- "3. The vendor warrants that as at the date of the purchasers introduction to the vendor and/or to the property hereby sold there were no exclusive or sole agency agreements in force with the exception of the agent herein named, and that there are no such additional agreements in force at the date of exchange of this contract. 4. The Purchaser warrants that the Purchaser was not introduced to the property hereby sold and/or the Vendor by any agent other than the Vendor's agent herein named. The Purchaser hereby indemnifies the Vendor from and against any breach of this warranty. This clause will not merge on completion." 22 The senior member had before him competing versions of, inter alia, conversations and dispute as to whether or not the letter had been received by the plaintiff. The first task was to resolve that conflict. When that was done, he had to make all relevant findings of fact. He then had to apply the relevant law to those findings. 23 As it appears that he accepted what was said by the second defendant, he had to determine what consensus had been orally reached between the second defendant and Sammy and then determine what impact that consensus had on the written terms of the auction agency agreement. 24 Before proceeding further, I should also mention that there was inconclusive issue between the parties as to whether or not the request for reasons made by the plaintiff was made within time. In my view, it was an inconsequential issue. Ultimately, it may have been accepted that it was made within time. Whether or not it was made in time, the Tribunal gave what reasons it could by way of the Tribunal letter. It is my understanding that the parties do not contend that what was said in that letter, in any significant sense, advanced disclosure of the reasoning process. 25 I now return to the four short reasons given by the senior member. 26 It seems to be common ground that paragraphs 1 and 2 can be read as findings of fact. If that be the case, it is devoid of disclosure of reasoning process for such findings. The real dispute between the parties concerned what can be made out in respect of paragraphs 3 and 4. 27 It seems to me that the best that can be said for paragraph 3 is that there is an expression of acceptance of the evidence of the second defendant on a particular matter (that the auction agency agreement was subject to a condition). It is unhelpful as to the reasoning process that brought about that acceptance. 28 It is difficult to know what to say in respect of paragraph 4. It expresses that the evidence of the second defendant (in relation to the second defendant's dealings with both agents regarding commission) was unaffected by certain material (being any clauses or information contained in the contract for sale of land). Whatever it was intended to mean, it does not disclose the reasoning process behind what was intended to be said. 29 Section 49 of the Act enables the Statement of Reasons for Decision to be brief. However, it must set out and refer to what is prescribed in (a), (b) and (c) of s49(3). In my view, the short reasons fail to satisfy those requirements. 30 There is a body of authority on the question of what constitutes a sufficient disclosure of reasoning process. It is unnecessary to refer to it in this case. It is trite to observe that what will be required will vary from case to case. I do not consider that this is one of those cases where the reasoning process can be deduced by implication. The duty to give reasons is imposed so that certain purposes can be effected (including enabling the losing party to understand why it has lost and to enable the exercise of a right of appeal). In my view, the short reasons have failed to serve those purposes and, lamentably, fall well short of being sufficient. 31 In the circumstances, I am satisfied that there has been a denial of procedural fairness that justifies the disturbing of what have been described as the Orders of the Tribunal. 32 Whilst the reaching of this view makes it unnecessary to deal with other matters agitated between the parties, it may be helpful if a brief observation is made in respect of one matter. 33 The Court has been referred to the decision in Craig v State of South Australia (1994) 184 CLR 163 and what was said therein in respect of jurisdictional error (p179). There was dispute between the parties as to whether or not the provisions of s65(3)(a) contemplated such jurisdictional error. Whilst the matter was not fully argued, my present inclination is to see the statutory provision as being directed to questions of jurisdiction that has been conferred upon the Tribunal. 34 The Orders made by the Tribunal (which bear the date 26 May 2006) are set aside. The matter is remitted to the Tribunal for further determination. The defendants are to pay the costs of the proceedings. ********** 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.