The State of New South Wales v Citco Industries Pty Ltd

The State of New South Wales appealed to the Court of Appeal of New South Wales against a decision of the Supreme Court concerning a claim against the Compensation Fund established under the *Conveyancers Licensing Act 1995* (NSW). The claim was brought by Citco Industries Pty Ltd, which alleged a failure to account by a licensed conveyancer.

The central legal issues before the Court of Appeal were whether the licensed conveyancer's actions constituted a "failure to account" within the meaning of s 64G(1) of the *Property, Stock and Business Agents Act 1941* (NSW), and whether the money entrusted to the licensee was received "in the course of the licensee's business as licensee". Further, the Court had to determine whether the work undertaken by the licensee qualified as "conveyancing work" under the *Conveyancers Licensing Act 1995*, or if it fell within the exclusion in s 4(3)(g) of that Act, which pertains to work carried out for the purpose of investing money otherwise than as provided by Div 2 of Part 3. The Court also considered the potential tension between s 4(1) and s 4(3)(g) of the *Conveyancers Licensing Act 1995*, and the distinction between "lending" and "investing" money. Finally, the Court examined whether, even if the work was not strictly "conveyancing work", there was still an entrusting of money to the licensee in the course of their business as a licensee.

The Court of Appeal, comprising Hodgson JA, Ipp AJA, and Rolfe AJA, dismissed the appeal. The Court reasoned that the actions of the licensee did amount to a failure to account within the relevant legislative framework. It was held that the money was entrusted to the licensee in the course of their business as a licensee, notwithstanding the specific nature of the work undertaken. The Court found that the exclusion in s 4(3)(g) did not apply in this instance, and that the distinction between lending and investing was not determinative of the issue. The Court concluded that the work undertaken, even if not strictly defined as "conveyancing work" under all provisions, still involved the licensee acting in their capacity as a licensed conveyancer, and the funds were entrusted to them in that capacity.

The appeal was dismissed with costs.