Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Dawood v Master Wealth Control Pty Ltd t/as DG Institute [2019] NSWCATAP 205 Hearing dates: 30 April 2019 Date of orders: 14 August 2019 Decision date: 14 August 2019 Jurisdiction: Appeal Panel Before: L Pearson, Principal Member J McAteer, Senior Member Decision: (1) The appeal is dismissed. (2) If a party seeks an order for costs of the appeal, that party may file written submissions within 14 days of publication of these reasons seeking an order in relation to the costs of the appeal. (3) If a party files submissions in accordance with order 2, any other party may file submissions in response within a further 14 days. (4) Any submissions filed in accordance with orders 2 and 3 should address whether the question of costs may be determined on the papers and without a hearing pursuant to s50(2) of the Civil and Administrative Tribunal Act 2013. Catchwords: APPEAL – consumer claim – refund of course fees – whether misleading and deceptive conduct Legislation Cited: Civil and Administrative Tribunal Act 2013 Civil and Administrative Tribunal Rules 2014 Fair Trading Act 1987 Australian Consumer Law (NSW) Cases Cited: Collins v Urban [2014] NSWCATAP 17 Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 Texts Cited: None cited Category: Principal judgment Parties: Hany Dawood (Appellant) Master Wealth Control Pty Ltd t/as DG Institute (Respondent) Representation: Counsel: J Mack (Respondent) Solicitors: H Dawood (Self Represented) (Appellant) File Number(s): AP 19/5109 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: Nil Date of Decision: 18 January 2019 Before: S Smith, General Member File Number(s): GEN 18/34304 REASONS FOR DECISION 1. Mr Hany Dawood appeals against a decision in the Consumer and Commercial Division on 18 January 2019 to dismiss his application under the Fair Trading Act 1987 (the FT Act) for an order refunding money paid for a real estate scheme and an order that no further amounts were payable, and to order that he pay the respondent Master Wealth Control Pty Ltd t/as DG Institute (DG) $4,500, being the outstanding balance due under the contract between the parties. 2. The appeal was lodged on 31 January 2019, within the time prescribed by rule 25(4)(c) of the Civil and Administrative Tribunal Rules 2014. The decision under appeal 1. Mr Dawood applied to the Tribunal on 6 August 2018 for an order that he be paid the amount of $26,000, being $6,000 for the cost of purchasing a Real Estate Rescue program, and $20,000 for the time spent studying the program. At the hearing, Mr Dawood did not press the claim for $20,000. The issue was his claim for a refund of $1,500 paid, and his liability to pay the amount of $4,500 remaining for the total cost of the program at $6,000. 2. As explained by the Tribunal in its reasons, Mr Dawood was interested in real estate. He attended a seminar organised by DG to discuss real estate dealing opportunities in the purchase of real estate at less than market value from various classes of vendors, including deceased estates, and financially stressed owners. He was interested in "takeover deals", arrangements under which an investor assists the owner to improve or market a property in exchange for a proportion of the profit on sale. He purchased participation in a training course offered by DG at a cost of $6,000, of which he had paid $1,500 at the hearing. The Tribunal noted that as well as the course of instruction, various aids to success were offered including discounted use of real estate data bases, pro forma legal documents, and call centre type support. 3. The Tribunal identified three aspects to Mr Dawood's claim for a refund: that there were few suitable properties on the market; that privacy legislation prevented full use of the business plan propounded by DG; and that the law relating to powers of attorney prevented the operation of a key aspect of the "takeover" type deals. The Member noted that the case depended on whether there had been misleading and false conduct to induce Mr Dawood to undertake the training program. 4. The Tribunal considered the three aspects of the claim. The Tribunal Member concluded that in the absence of a clear representation of success, Mr Dawood could not succeed on his complaint that the number of relevant properties was restricted. The "takeover" arrangement depended on the homeowner giving the investor a non-revocable power of attorney as protection, and the Member noted that it was central to Mr Dawood's case that no such instrument existed and so the business plan was defective. The Member gave little weight to letters produced by Mr Dawood from various State authorities commenting on powers of attorney, on the basis that none were addressed to him and none dealt specifically with the validity of non revocable powers of attorney; the Tribunal relied on an opinion by senior counsel provided by DG which had reviewed the legal situation in most Australian states and concluded where there was valuable consideration or if the power was given in support of a security an irrevocable power of attorney was valid and enforceable. In relation to the privacy issue, the Member noted Mr Dawood's claim that privacy legislation restricted the use of information in data bases about real property, bankruptcies, official valuations and sales data for marketing, and DG's response that there were circumstances in which it could be used and approved as lawful by the owner of the data base. 5. The Tribunal Member concluded that on the material put by Mr Dawood, he was unable to find that Mr Dawood had been induced to undertake the course by misleading and deceptive comments made by or on behalf of DG; and that the fact that there could be defects in the business model might not entitle a consumer to terminate the contract and demand a full refund. The Member dismissed the application for a full refund, and ordered Mr Dawood to pay the balance of $4,500. Availability of appeal 1. This is an internal appeal pursuant to s 80 of the Civil and Administrative Tribunal Act 2013 (the NCAT Act). The appeal may be brought as of right on a question of law or, with the leave of the Appeal Panel, on other grounds. As this appeal is brought from a decision of the Consumer and Commercial Division of the Tribunal, by virtue of cl 12(1) of Sch 4 to the NCAT Act, leave to appeal may only be granted under s 80(2)(b) if the Appeal Panel is satisfied an appellant may have suffered a substantial miscarriage of justice because: 1. the decision of the Tribunal under appeal was not fair and equitable, or 2. the decision of the Tribunal under appeal was against the weight of evidence, or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). 1. Even if an appellant from a decision of the Consumer and Commercial Division satisfies the requirements of cl 12(1) of Sch 4, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b): Collins v Urban at [80]-[84]. Grounds of appeal 1. The grounds of appeal as stated in the Notice of Appeal lodged on 31 January 2019 are: 1. The Tribunal decision has placed the burden of proof for the performance of DG's product on the consumer's shoulders, and in dismissing the case and ordering the consumer to buy a product recognised as broken, the Tribunal has doomed the consumer to a purchase that cannot be fulfilled because: 1. The product is sold exclusively through DG; 2. The product cannot be relied upon in Queensland; 3. Even though there is a limitation on the product, DG was not ordered to make that disclosure to all consumers; 4. It is not reasonable to expect the consumer to buy another expensive product from DG, when the takeover method is not used in any other DG product; 5. The legal opinion about validity of non revocable powers of attorney was used to validate the product however the product is not named in that document. 1. Mr Dawood stated that the orders he sought on the appeal are that he not have to pay $4,500. He will forgo $1,500 sought from DG as compensation if DG remedies the problem in the power of attorney used in the Real Estate Rescue takeover method, if DG discloses that the purportedly safe power of attorney is not safe for consumers to use in Queensland; and that if those orders are made he will not pursue a claim for disciplinary action against Dominque Grubisa. 2. Mr Dawood did not seek leave to appeal. Reply to appeal 1. DG contends that the Notice of Appeal does not raise any legal basis on which the Tribunal erred on a question of law and the findings of the Tribunal were open to it. The orders sought are beyond the capacity of the Tribunal to make. The appeal 1. The Notice of Appeal does not identify a question of law. The appellant is not legally represented, and the Appeal Panel must determine whether a question of law has in fact been raised, subject to any procedural fairness considerations that might arise to the respondent: Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [12]. 2. At the hearing of the appeal Mr Dawood confirmed that his complaint is that he was misled, and the issue is misleading and deceptive conduct. He also raised his concern that the Tribunal member had not had the file at the hearing. 3. The Appeal Panel identifies as a possible question of law whether the Tribunal erred in its approach to Mr Dawood's claim of misleading and deceptive conduct. The question of whether the Tribunal Member reached his decision in the absence of all the material filed on behalf of Mr Dawood potentially raises a question of law as to the basis on which the findings of fact were made. Such a ground was not identified in the Notice of Appeal, and Mr Dawood would require leave to raise it. 4. Mr Dawood had applied for a stay of the order when lodging his appeal. That application was withdrawn and dismissed, DG undertaking not to take steps to enforce the judgment made in the Local Court on 29 January 2019 until determination of the appeal. Evidence on the appeal 1. In support of his appeal and the application for a stay, Mr Dawood provided documents by email on 4 and 6 February 2019, including a chronology, documents relating to legal proceedings in Queensland, and a 23 page supporting statement. On 21 March 2019 Mr Dawood provided further documents, including submissions in support of the appeal, and transcript extracts from the Tribunal hearing on 18 January 2019. Further documents in reply to the documents proved by DG were provided on 29 April 2019. 2. DG provided its documents on 16 April 2019, including submissions on the appeal, a transcript of the hearing of 18 January 2019, and documents provided by both parties in the Tribunal proceedings. Appellant's submissions 1. The written submissions provided by Mr Dawood (21 March 2019) address both the complaints about the hearing, and the Tribunal's determination of his claim. 2. Mr Dawood had two complaints about the hearing: first, that the Member had not read his file before the hearing so he was aware of the history of the dispute, and secondly, that he did not have the applicant's folder so he was unaware of the chronology. He contends that he was not expecting to have to face an experienced lawyer, and the Tribunal should have adjourned the hearing to get itself better prepared so as not to prejudice his position. 3. Mr Dawood submits that the Tribunal ignored the failure of the DG power of attorney to remain irrevocable in Queensland, and did not ask DG why they did not disclose the fact that the Queensland government had blocked the use of the product in Queensland. He submits that because the Queensland government blocks the use of the DG power of attorney in Queensland it cannot be used as it was sold to him and that behaviour is misleading. In concluding that a consumer may not be entitled to terminate the contract and demand a full refund, the Tribunal did not apply s 18 of the Australian Consumer Law correctly. DG omitted relevant information which would have had an impact on his decision to buy the product, made ambiguous and contradictory statements, and made a promise that could not be kept in saying that the product could be used in Queensland. The Tribunal oversimplified how critical the power of attorney was in the process. The power of attorney is the only protection offered by DG to keep the applicant out of court. DG knew of the failure of the power of attorney in Queensland before he purchased the product but did not disclose that. 4. In reply submissions Mr Dawood states that had DG been honest in disclosing the existing court case he would never have entertained buying in the first place. He is not a lawyer and had the expectation that the Tribunal Member would attend the hearing with his dispute file and fully aware of what was discussed in the previous hearing sessions. He had repeatedly flagged his contention that DG had represented their product was tried and tested and was obliged to prove that the business model actually works in practice: those core dispute points were not observed as his file was lost during the hearing. 5. In oral submissions at the appeal hearing Mr Dawood stated that the error in the application of s 18 of the Australian Consumer Law was that he had been misled by the failure of DG to share information about the court case in Queensland. As a consequence of not having read the documents the Member did not have all his points: it would have made a difference because the Member would have understood his position. Mr Dawood confirmed to the Appeal Panel that he provided documents to the Tribunal and DG's representative during the hearing. Respondent's submissions 1. DG submits that the finding based on acceptance of senior counsel's opinion on the power of attorney issue was open to the Tribunal to make on the material before it, and that the finding that the Tribunal was not satisfied that Mr Dawood relevantly relied on any purported misleading or deceptive conduct was also open. The grounds of appeal in the Notice of Appeal raise no errors on questions of law. 2. In responding to Mr Dawood's submissions, DG submits that if the contention that Mr Dawood was disadvantaged by the Member not having read the file before the hearing is an allegation that he was denied procedural fairness that is without foundation. The parties had sufficient time to present their case and the Mr Dawood confirmed that the Member's understanding of his case was correct. The challenge to the Member's reliance on the opinion rather than the letters is a challenge to a finding of fact and does not raise a question of law. The contention that DG omitted relevant information, made ambiguous and contradictory statements, and made a promise that could not be kept was also a challenge to a finding of fact. In response to the submission based on the power of attorney as the core legal document Mr Dawood should not be permitted to raise a case based on a consumer guarantee. Mr Dawood should not be permitted to rely on proceedings on foot by another complainant. 3. DG submits that the grounds of appeal are predominantly challenges to evaluative fact finding which do not raise questions of law. Mr Dawood has not established that the decision was not fair and equitable or that it was against the weight of evidence, and leave should not be granted. Discussion and findings 1. The transcript of the hearing on 18 January 2019, which Mr Dawood agreed to be accurate, confirms that the Member advised the parties at the beginning of the hearing that he had not had the opportunity to read the file in detail before the hearing (T 4). It appeared that the Member may not have had all the material filed by Mr Dawood at the hearing (T16). However, to the extent that Mr Dawood is contending that either factor may constitute a denial of procedural fairness, such a claim is not made out. The Member advised the parties at the conclusion of the hearing that he would not make a decision then, and would review the material and provide short written reasons (T 36). Additional documents were handed up during the hearing. The documents which Mr Dawood maintained were not before the Member (as provided to the Appeal Panel by DG) related to the dispute between DG and another course attendee in Queensland. The absence of such documents during the hearing did not prevent the discussion of the Queensland litigation during the hearing, first by Mr Dawood (T11, 22), and in more detail by DG's representative (T16-17), who confirmed that the proceedings may call into question the validity of the power of attorney and not just whether it could be revoked in the circumstances (T22). 2. Mr Dawood was given the opportunity to outline the three aspects of his case, namely the lack of a positive outcome for possible properties; the privacy constraints on using RP Data; and the power of attorney issue, which Mr Dawood said was the most important one. Mr Dawood explained the importance of the power of attorney to the method, stating that the tool that was sold was the power of attorney, which it was said would protect him from having to go to court (T12-13); and that his case was based on the provision of misleading information, that the power of attorney was irrevocable (T 13), and the claim that the irrevocable power of attorney would work to put into effect the Real Estate Rescue program was the essence of his claim (T 14). 3. There is no substance to Mr Dawood's contention that he was disadvantaged by facing an experienced lawyer at the hearing, or that there was anything unfair about how the hearing was conducted. Leave had been granted on 30 October 2018 for Ms Grubisa, a director, to represent DG, a company, at the hearing, and on that occasion it was noted that Mr Dawood did not seek leave to be legally represented. Mr Dawood was aware that Ms Grubisa was legally qualified, and stated in the hearing that he had paid for the workshop because he wanted to get legal advice (T23). The Member explained to Mr Dawood that he bore the burden of proof, and the orders the Tribunal could make, and gave the parties an opportunity to try to settle the matter. 4. The Member put Mr Dawood on notice that the letters about powers of attorney on which he relied did not specifically meet the point or make clear what the underlying disputes were (T 24). The Member heard Mr Dawood's explanation as to having identified the importance of the proposed method before he undertook the course (T25-6). The privacy issue was discussed with both parties (T 26-30), as was the number of potential properties (T 31-32). 5. There is no basis for the contention as framed in the appeal that there was any unfairness in how the Tribunal hearing proceeded. 6. As to the Tribunal reasoning on the substantive issues, the Member's statement in his reasons that Mr Dawood's case depended on misleading and deceptive conduct is consistent with Mr Dawood's confirmation during the hearing (T13). Mr Dawood's case was that he was induced to undertake the course at a cost of $6,000 by misleading or deceptive statements or by the failure to disclose material information. 7. Section 18 of the Australian Consumer Law (NSW) (being Sch 2 to the Competition and Consumer Act 2010 (Cth)), which applies as the Australian Consumer Law (NSW) by operation of s 28 of the FT Act, prohibits a person form engaging, in trade or commerce, in conduct that is misleading or deceptive or is likely to mislead or deceive. On the central issue as to whether the power of attorney was irrevocable, the Member identified that it was central to Mr Dawood's case that no such instrument existed. The Member explained his reasons for preferring the evidence on which DG relied, namely the opinion of senior counsel of 19 July 2018 that an authority under a power of attorney expressed to be both irrevocable and when used to confer a security or other interest on the attorney, is irrevocable, to that on which Mr Dawood relied. There was no error on a question of law in reaching that conclusion. 8. The Member addressed the other two aspects of Mr Dawood's claim, giving reasons for his conclusion that in the absence of a clear representation as to an unlimited or any particular number of opportunities the claim based on the lack of potential vendors could not succeed, and for rejecting the claim that privacy restrictions prevented the use of the data bases. There was no error on a question of law in the Tribunal's conclusion that Mr Dawood had not established that he was induced to undertake the course by misleading or deceptive statements made by or on behalf of DG. 9. No error on a question of law has been demonstrated, and the appeal should be dismissed. 10. Mr Dawood did not seek leave to appeal. The Appeal Panel has considered whether, in challenging the findings and conclusions reached by the Tribunal, Mr Dawood has asserted a ground on which leave might be granted in accordance with cl 12(1) of Sch 4 to the NCAT Act. 11. In Collins v Urban [2014] NSWCATAP 17 the meaning of "substantial miscarriage of justice" was summarised at [71] and [79] as follows: [71] …[I]t can be seen that the concept of a substantial miscarriage of justice refers to a failure in the way a matter was conducted or decided which deprived the appellant of a chance that was fairly open of achieving a better outcome than occurred… [79] In order to show that a party has been deprived of a "significant possibility" or a "chance which was fairly open" of achieving a different and more favourable result … it will be generally be necessary for the party to explain what its case would have been and show that it was fairly arguable. If the party fails to do this, even if there has been a denial of procedural fairness, the Appeal Panel may conclude that it is not satisfied that any substantial miscarriage of justice may have occurred. 1. The Member's reasons are succinct, however the Appeal Panel concludes that they disclose that the Tribunal addressed the key elements of Mr Dawood's claim as put, and addressed the evidence. There is no basis on which it could be concluded that the Tribunal's findings were against the weight of evidence, in the sense that the evidence in its totality was all one way, or that the decision was not fair and equitable. To the extent that leave would be required for an appeal on grounds other than a question of law, it should be refused. Orders 1. The orders of the Appeal Panel are: 1. The appeal is dismissed. 2. If a party seeks an order for costs of the appeal, that party may file written submissions within 14 days of publication of these reasons seeking an order in relation to the costs of the appeal. 3. If a party files submissions in accordance with order 2, any other party may file submissions in response within a further 14 days. 4. Any submissions filed in accordance with orders 2 and 3 should address whether the question of costs may be determined on the papers and without a hearing pursuant to s50(2) of the Civil and Administrative Tribunal Act 2013. ********** 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: 14 August 2019