Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Wilson v Chan & Naylor Parramatta Pty Ltd as trustee for Chan & Naylor Parramatta Trust [2016] NSWCATAP 236 Hearing dates: 19 July 2016 Date of orders: 03 November 2016 Decision date: 03 November 2016 Jurisdiction: Appeal Panel Before: P Durack SC, Senior Member Dr J Lucy, Senior Member Decision: (1) Appeal allowed. (2) Orders made by the Tribunal of 5 April 2016 be set aside. (3) The proceedings be remitted to the Consumer and Commercial Division for determination according to law. Catchwords: CASE MANAGEMENT – Rejection of material filed the day before a hearing – Inflexibility of approach – Failure to exercise discretion according to law ADJOURNMENT – Applicant had filed material late on which he wished to rely - Applicant sought to join another party – Respondent said it could not adequately respond to late material - Claim was complex - Parties not legally represented – Failure to consider adjournment constituted error of law JOINDER – Whether Tribunal applied correct statutory test for joining a party when determining appellant's joinder application – Tribunal determined not to join a person on case management grounds – Tribunal failed to apply statutory test correctly Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Cases Cited: Commissioner of Police New South Wales Police Force v Fine (2014) 87 NSWLR 1; [2014] NSWCA 327 Italiano v Carbone and Ors [2005] NSWCA 177 Re Refugee Review Tribunal; ex parte Aala (2000) 204 CLR 82 Sullivan v Department of Transport (1978) 20 ALR 323 Tiwari v Champion Homes Sales Pty Ltd [2016] NSWCATAP 73 ZCA v NSW Trustee and Guardian [2016] NSWCATAP 192 Category: Principal judgment Parties: Stephen Wilson (Appellant) Chan & Naylor Parramatta Pty Ltd as trustee for Chan & Naylor Parramatta Trust (Respondent) Representation: Counsel: D Elliott (Respondent) Solicitors: Stephen Wilson (Appellant) File Number(s): AP 16/19916 Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 5 April 2016 Before: P Boyce, Senior Member File Number(s): GEN 15/59854 REASONS FOR DECISION 1. The main issues on appeal are whether the Tribunal below erred in law in arriving at its decision to refuse to admit for its consideration material filed by the appellant the day before the hearing and whether it erred in law in determining that the appellant's application to join Mr Nelson as a respondent to the proceedings should be refused. 2. We have found that the Tribunal erred in both respects. Background 1. On 2 November 2015, Mr Wilson filed an application in the Tribunal seeking an order that the respondent ("Chan & Naylor") pay him $40,000. The application stated that Mr Wilson and Chan & Naylor had an agreement that Chan & Naylor would provide Mr Wilson with taxation and accounting services and advice. Mr Wilson alleged that Chan & Naylor provided him with verbal financial advice, even though it was not licensed to provide financial advice, and failed to provide advice appropriate for his circumstances or to warn him about relevant risks. Mr Wilson also alleged in his application to the Tribunal that Chan & Naylor owed him a duty of care and that it had breached that duty. 2. On 12 November 2015, the Tribunal directed Mr Wilson to file and serve the documents on which he intended to rely by 3 December 2015 and directed Chan & Naylor to file and serve its documents by 24 December 2015. Neither party was legally represented. 3. Mr Wilson filed and served documents on 1 and 15 December 2015. On 8 January 2016, Mr Wilson filed a document in which he applied for leave to amend his application and made submissions. That document was produced at the hearing of the appeal. It states that Mr Wilson seeks leave to amend his application to add Clive Nelson as a respondent. Mr Nelson is a partner in Chan & Naylor. 4. Chan & Naylor filed its documents on Friday 15 January 2016, having been given an extension of time to that date for the filing of documents. 5. On Monday 18 January 2016, Mr Wilson filed further material including a statutory declaration made by Gerard Mendonca, a former employee of Chan & Naylor, and documentary material and submissions in reply to Chan & Naylor's submissions of 15 January 2016. The documentary material included a letter, apparently from Chan & Naylor or a related company, to Mr Wilson concerning his 2006 income tax return signed by Clive Nelson, an invoice dated 17 November 2006 from Chan & Naylor to Mr Wilson for the preparation of accounts and tax return and the audit of a super fund, a "Peace of Mind" guarantee apparently given by Chan & Naylor and a letter of engagement dated 23 November 2006 and signed by Gerard Mendonca, client manager of Chan & Naylor. 6. The hearing took place on 19 January 2016. Mr Wilson appeared in person and Mr Nelson, who was a director of Chan & Naylor, appeared for Chan & Naylor. 7. At the hearing, Mr Wilson sought leave to join Mr Nelson as an additional respondent and to rely upon the documents he filed on 18 January 2016. Mr Nelson objected to this. 8. The Tribunal refused the application to join Mr Nelson, commenting: "The applicant's late application to join Mr Nelson does not permit Mr Nelson to properly answer the allegations made against him. The direction made on 12 November 2015 gave the parties the opportunity to file and serve their respective documents on which they intend to rely. Importantly, the applicant bears the onus of proving his case and the respondent needs to be made aware of the case against it. To grant leave to the applicant to join Mr Nelson would be to deny Mr Nelson procedural fairness." 1. The Tribunal also refused the applicant leave to rely upon the documents he had filed on 18 January 2016, on the bases that they were filed well beyond the time allowed in the directions and that the late filing denied the respondent an opportunity to consider the material and provide a considered response. 2. At the hearing, the Tribunal heard oral evidence from Mr Wilson, Mr Mendonca and Ms Skye Wilson, for Mr Wilson, and from Mr Nelson, for Chan & Naylor. It also considered statutory declarations and affidavits made by those people and by Mr Ken Raiss (for Chan & Naylor). 3. In its decision, the Tribunal found that Chan & Naylor's retainer was limited to providing annual accounting services and tax return lodgement and any liability for giving wrong advice "rested with other than the respondent" (decision at [83]-[84]). Accordingly, it dismissed Mr Wilson's application. Grounds of Appeal 1. Mr Wilson relied upon a number of grounds of appeal. These included that the Tribunal erred in: 1. Making a decision in the absence of an indispensable party or parties to the application (Ground 1); 2. Denying him procedural fairness (Ground 2); 3. Denying him leave to amend his application (Ground 3); 4. Not granting an adjournment of the hearing (Ground 4); 5. Denying his application to set aside the decision (Ground 5); 6. Denying him the opportunity to adduce his reply evidence and reply submissions at the hearing (Ground 6); 7. Finding that Chan & Naylor did not conduct its audits in accordance with its agreement with him (Ground 7); 8. Finding that his loss was not caused by negligence of a breach of consumer guarantees by Chan & Naylor (Ground 8). Right of Appeal 1. An appeal to the Appeal Panel from a final decision of the Tribunal at first instance may be made "as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds" (Civil and Administrative Tribunal Act 2013 (NSW) ("NCAT Act"), s 80(2)(b)). In relation to appeals from the Consumer and Commercial Division, leave may only be granted to appeal on grounds which do not raise an error of law in the limited circumstances set out in cl 12 of Sch 4 to the NCAT Act, which provides: "(1) An Appeal Panel may grant leave under section 80 (2) (b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with)." 1. Mr Wilson contended that his grounds of appeal raised questions of law. To the extent that they did not, he set out reasons, in his Notice of Appeal, for his view that the decision under appeal was not "fair and equitable" within cl 12(1)(a) of Sch 4 to the NCAT Act. Consideration 1. The main issues on appeal were the Tribunal's decision not to allow Mr Wilson to rely upon the material he filed on 18 January 2016, its decision not to join Mr Nelson as a party to the proceedings and its failure to join or consider joining Mr Hank Brisbane, a person Mr Wilson contended was either an employee of or independent contractor of Chan & Naylor. Rejection of Mr Wilson's late material 1. Clearly, the Tribunal had a discretion to admit or reject the material provided by Mr Wilson to the Tribunal on 18 January 2016. As a matter of law, exercise of the discretion needed to take account of relevant considerations, including the question of fairness to Mr Wilson in having his case determined with regard to all available and relevant evidentiary material and submissions. 2. However, the Tribunal took an inflexible stance that only took account of Chan & Naylor's interests and, implicitly, the desirability that the hearing proceed on the day fixed for hearing, and without any consideration of the nature of the material Mr Wilson was seeking to rely upon. This was a too rigid approach and the Tribunal erred in law in dealing with the matter in this way. One illustration of the inadequacy of that approach was that the Tribunal did not have regard to reply submissions that were included within the material Mr Wilson wished to rely upon. 3. In the circumstances, in view of Chan & Naylor's position that it could not adequately respond to the additional material on the day of the hearing, in our opinion, in the exercise of its discretion, the Tribunal should have had regard to the question whether an adjournment of the hearing was warranted. Fairness to Mr Wilson favoured an adjournment so as to enable the additional material to be considered in the determination of the claim, as did the following matters: 1. Mr Wilson's claim involved some complexity and had only been commenced in November 2015. 2. The Tribunal made directions for the filing and service of documentary material ten days after the application was filed and the parties were not before the Tribunal again until the hearing just over two months later. 3. Chan & Naylor had only served its material on the Friday before the hearing the following Tuesday and it was reasonable to expect that this might provoke some reply material from Mr Wilson. 4. there was a significant amount of additional material that Mr Wilson was seeking to rely upon consisting of some 80 pages and it would be difficult and, potentially problematic, for the Tribunal to rule upon the relevance of the material in advance of hearing the matter as a whole. Some of this material consisted of documents prepared by Chan & Naylor or by persons associated with Chan & Naylor and appeared to bear upon relevant issues concerning the nature of Chan & Naylor's engagement, the responsibilities it assumed and the roles of others connected with the matters about which Mr Wilson complained. 5. an adjournment would facilitate the joinder of Mr Nelson, which was a step Mr Wilson wished to take (see further below). 6. Neither Mr Wilson nor Chan & Naylor were legally represented. 1. Mr Elliott submitted for Chan & Naylor that the Tribunal's failure to grant an adjournment of the hearing was not in error, as no adjournment was requested. As to this, we first make the point that the error we have identified is an error in failing to consider an adjournment as part of giving consideration to the interests of Mr Wilson in having the additional material considered by the Tribunal. Secondly, the Tribunal's obligation to "take such measures as are reasonably practicable … to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings" (NCAT Act, s 38(5)(c)) means that the Tribunal is bound to offer a self-represented party an adjournment, if is appropriate to do so: Italiano v Carbone and Ors [2005] NSWCA 177, Basten JA at [105]; Sullivan v Department of Transport (1978) 20 ALR 323, Deane J at 342-343 (Federal Court); ZCA v NSW Trustee and Guardian [2016] NSWCATAP 192 at [39]; Tiwari v Champion Homes Sales Pty Ltd [2016] NSWCATAP 73 at [4]. For this reason, and those already referred to, in our opinion, the Tribunal should have raised the issue of an adjournment with the parties even though no adjournment had been requested. Joinder of Mr Nelson 1. The Tribunal has a broad discretion, under s 44(1) of the NCAT Act, to determine whether or not to join a person as a party. It may do so if it "considers that the person should be joined as a party" (NCAT Act, s 44(1)). A person who is a "proper or necessary party" ought to be joined: Commissioner of Police New South Wales Police Force v Fine (2014) 87 NSWLR 1; [2014] NSWCA 327, the Court at 11 [38]. 2. Mr Wilson's application to amend his application and to join Mr Nelson, although made on 8 January 2016, was not considered by the Tribunal until the hearing on 19 January 2016. 3. The application to join Mr Nelson was rejected almost entirely for case management reasons. The Tribunal gave no consideration to whether Mr Nelson was a proper or necessary party. Rather, the Tribunal referred to its case management directions made in November 2015 and found that joining Mr Nelson would deny him procedural fairness because it would not give him an adequate time to reply to the allegations against him. It did not give any consideration to joining Mr Nelson and adjourning the proceedings. Nor did it consider whether it was necessary to make amendments to the applicant's application in the interests of justice (see NCAT Act, s 53(1)) or, more broadly, whether to allow the applicant's amendment application. 4. In our view, the Tribunal failed to have regard to the statutory test in s 44(1) of the NCAT Act, being whether Mr Nelson should be joined as a party, having regard to whether he was a proper or necessary party (see NCAT Act, s 44(2)). It also failed to consider the nature of the amendments sought by Mr Wilson in his application to amend his application to the Tribunal, and to determine that application. 5. In the circumstances of this case, where a self-represented litigant was alleging negligence in the provision of professional advice in a series of transactions by a number of persons, in our opinion, the Tribunal was required to consider whether Mr Nelson should be joined and, if so, whether to offer Mr Nelson an adjournment of the hearing. 6. The failure to do so constituted an error of law. Joinder of Mr Brisbane 1. Mr Wilson says that his submissions filed on 18 January 2016 contained an application to join Mr Hank Brisbane as a party to the proceedings. Mr Wilson alleged that Mr Brisbane was an employee or independent contractor of Chan & Naylor who signed the independent auditor's reports for 2006 to 2012. If such an application was in fact made, it is arguable that the Tribunal denied Mr Wilson procedural fairness by failing to consider the joinder application. However, it is first necessary to consider whether the submissions filed on 18 January 2016 did, in fact, include an application to join Mr Brisbane as a party. 2. Mr Wilson's submissions of 18 January 2016 contained a heading "Reply to Respondent's Statement of Issues and Leave to Add Clive and Ken". "Clive" is Clive Nelson and "Ken" is Ken Raiss. 3. Mr Wilson submitted at the appeal hearing that the reference to "Ken" in his submissions of 18 January 2016 was a typing error and the reference should be to "Hank." He said he had served papers on Hank Brisbane before the hearing, but that he had not informed the Tribunal of this. Further, he did not ask the Tribunal to join Mr Brisbane on the day of the hearing. 4. Mr Wilson said that he did not wish to join Mr Raiss to the proceedings. 5. The first numbered point under the above heading in the submissions stated: "The Respondent that acquired the accountancy practice of Chan & Naylor Pty Ltd with Stephen Wilson as a client and Ken Raiss as its advisor provided advice to Stephen Wilson." 1. Under point 5, Mr Wilson makes allegations concerning the accuracy of the advice provided to him by Mr Raiss. Under point 11, Mr Wilson alleges that the respondent and Clive Nelson provided negligent taxation, accounting and auditing services. 2. Points 12 and 13 of the submissions are as follows: 12. The Independent Auditor failed to do what the forensic accountant said the Auditor reasonably ought to have done. 13. The Respondent, Clive Nelson, Hank Brisbane and Paul Vanderlight failed to identify any irregularity when processing around 21 November 2012 the Grey Gum Super Fund financials, tax return and audit for tax year ended 30 June 2012… 1. Point 17 alleges that "Clive Nelson and Ken Raiss are personally liable" and that the respondent is vicariously liable for the acts of its employees and auditors. 2. Mr Wilson relied upon points 12 and 13 above in support of his contention that the reference to "Ken" was an error and the application was in fact an application to join Hank Brisbane as a party. He said that there was an inference that Hank Brisbane was responsible for his loss. 3. We are not satisfied that, on a fair reading, the submissions of 18 January 2016 constituted an application to join Hank Brisbane as a party. The heading clearly indicates that the parties sought to be joined are Clive Nelson and Ken Raiss. That the application related to Ken Raiss, and not Hank Brisbane, is supported by the first point under the heading which claims that Mr Raiss gave advice to Mr Wilson and the fifth point which makes allegations concerning the accuracy of that advice. Whilst point 13 alleges a failure to identify an irregularity on the part of Mr Brisbane and others, it does not go so far as to suggest that Mr Brisbane (or the other persons to whom the failure is attributed) should be joined to the proceedings. The final point under the heading alleges, consistently with the heading, that Mr Nelson and Mr Raiss have personal liability. 4. In our view, Mr Wilson's submissions of 18 January 2016 did not make any application to join Mr Brisbane as a party to the proceedings and Mr Wilson does not allege that any other application to join Mr Brisbane was made, nor that he applied for an adjournment. Accordingly, the Tribunal made no error in failing to consider joining Mr Brisbane or failing to adjourn the hearing so that that application could be made. Other grounds of appeal 1. In light of our findings that the Tribunal erred in law in the manner referred to above, it is not necessary to consider the other grounds of appeal. Conclusion and orders 1. We make the following orders pursuant to s 81(1) of the NCAT Act: 1. Appeal allowed. 2. Orders made by the Tribunal of 5 April 2016 be set aside. 3. The proceedings be remitted to the Consumer and Commercial Division for determination according to law. ********** 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: 03 November 2016