Zhang v Jian ER Huang t/as Auchland &Co

[2021] NSWCATCD 88

Civil and Administrative Tribunal

New South Wales

• Amendment notes

Medium Neutral Citation:

Zhang v Jian ER Huang t/as Auchland &Co [2021] NSWCATCD 88

Hearing dates:

11 June 2021

Date of orders:

25 August 2021

Decision date:

24 August 2021

Jurisdiction:

Consumer and Commercial Division

Before:

S Sutherland, General Member

Decision:

1. The respondent Auchland & Co is amended to Jian ER Huang trading as Auchland & Co.

2. The respondent Jian ER Huang is to pay the applicant Xio Ling Zhang the amount of $500.00 on or before 08-Sep-2021.

3. All other claims are dismissed.

Catchwords:

CONSUMER LAW — Conveyancing services — Breach of contract — Error on electronic transfer —rectification — Repudiation — Damages —Remoteness

Legislation Cited:

Fair Trading Act 1987 (NSW)

Cases Cited:

BFT International Pty Ltd v Jeffrey Kin Shing Wong t/as Brighton Lawyers [2020] NSWCATAP 27

Astley & Ors v Austrust Limited (1999) HCA 6

Hadley v Baxendale [1854] EngR 296; (1854) 9 Ex 341

Leeda Projects v Zeng (2020) 61 VR 384; [2020] VSCA

C Czarnikow Limited v Koufos [1969] 1 AC 350

Moore v Scenic Tours Pty Ltd [2020] HCA 17; 77 ALR 209

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Xiao Ling Zhang (Applicant)
Jian ER Huang trading as Auchland & Co (Respondent)

Representation:

Applicant (Self-represented)
Respondent (Self-represented)

File Number(s):

GEN 20/53541

Publication restriction:

Nil

REASONS FOR DECISION

1. This is a claim by the applicant for the payment of $500 for a another conveyancer to correct the shares allotment in a transfer of property, cost, $5,034 for the loss of a negative gearing tax benefit, and $1,000 for emotional frustration for the time taken from May 2019 to December 2019, and distress.

Jurisdiction

2. The respondent states in correspondence dated 3 March 2021 that the claim to the Tribunal has no jurisdiction to hear the claim than other than a “conveyancing cost dispute”. Mr Ma states that according to the Legal Profession Act 2004 (NSW) the Tribunal has no jurisdiction to hear a claim concerning a conveyancer as it is not stipulated in the Act.

3. The applicant brings a consumer claims a claim of a breach of contract pursuant to the Fair Trading Act 1987 (NSW) and that the respondent provided a service to a consumer and the service was not provided with reasonable care and skill pursuant to the contract.

4. Section 79F of the Fair Trading Act 1987 (NSW) provides the following:

79F Meaning of “services” (cf CC Act 1998, s 3 (1), definition of “services”)

(1) For the purposes of this Part, a reference to services is a reference to any of the following—

(a) the performance of work (including work of a professional nature), whether with or without the supply of goods.

Further, in Section 4 of the Fair Trading Act, 1987 provides that services includes any rights (including rights in relation to, and interests in, real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce, and without limiting the generality of the foregoing, includes the rights, benefits, privileges and facilities that are, or are to be, provided, granted or conferred under—

(a) a contract for or in relation to—

(i) the performance of work (including work of a professional nature), whether with or without the supply of goods.

5. In BFT International Pty Ltd v Jeffrey Kin Shing Wong t/as Brighton Lawyers [2020] NSWCATAP 27, this was a consumer claim for the provision of legal services. In my view, this is a claim concerning the supply of services by a conveyancer and the legal principles are the same, that the Tribunal would have jurisdiction where the claim concerns the supply of services.

6. I find that the applicant is a consumer pursuant to Section 79D of the Fair Trading Act1987 and that the respondent, a conveyancer, provided a conveyancing service pursuant to Section 79F (1) (a) of the Fair Trading Act 1987. Therefore, the Tribunal has jurisdiction to hear the claim.

The Contract

7. It is uncontroversial that the parties contracted to provide conveyancing services, the applicant was to pay $880 for the service. The applicant claims that she engaged the respondent on 18 October 2017 to manage the settlement of land for Lot XXX Deposited Plan XXX being XXX Marsden Park NSW 2765. The applicant and her husband were the purchasers and paid the amount of $620,500.00 for the property.

8. On 20 February 2019 the contracts for the sale of and purchase of land were exchanged. The following email exchange took place between the applicant and the respondent: (Exhibit A1 [1])

9. On 27 February 2019 an email was sent from the applicant to the respondent with the following proportion: Chun Qi Chen 65% and Xiao Ling Zhang 35%, then on 14 March 2019 from the applicant to the respondent, Hi Cynthia, Could you please check and advise if I am still able to change the % split without incurring cost? From Chun Qi Chen 65% and Xiao Ling Zhang 35% to Chun Qi Chen 70% and Xia Ling Zhang 30%.

10. Then on 25 March 2019 at 9.32 am a further email from the applicant to the respondent,

Hi Lynn and Cynthia, This is to confirm “Tenants in Common” as below:

Chun Qi Chen 70% and Xiao Ling Zhang 30%

Significantly, on 25 March 2019 at 10.42pm the respondent sent the following email to the applicant:

Dear Lindy, we confirm your shares of “tenants in Common” is below.

Chun Oi Chen 75% and Xiao Ling Zhang 25% (respondent has highlighted in red)

Best Regards

Lynn

11. On 26 Mar 2019 at 9:17:

Hi Lynn and Cynthia, Please used this email 26-March 9:15am) as our last call and ignore my email sent last night. Chun Oi Chen 75% and Xiao Ling Zhang 25% Please reply to acknowledge this receipt. Thank you! Kind regards Linda Zhang.

12. The completion of the sale of land contract took place on 16 April 2019 by electronic transferring of title through PEXA. Around 10 April 2019 an electronic transfer was submitted with 1/3 share Zhnag and 2/3 share Chen.

13. On 12 May 2019 the applicant sent an email to the respondents stating that there had been an error and there had been a 2/3 and 1/3 split instead of 75% and 25%. Exhibit A1[15] The applicant claims that she contacted the respondent and it was stated that the error was not made by the respondent.

14. The consequence of this error was that the applicant’s mortgagee, Westpac Bank was requesting that the tenants in common pursuant to the loan documents were 75% to Chun Ol Chen and 25% to Xiao Ling Zhang and that the loan would not settle in the correct shares.

15. On 9 July 2019 the applicant sent an email to the respondent following up on the error in the share allocation. On 23 July 2019 the applicant sent an email to the respondent:

My home loan is still pending this correction and it has been dragging on for two months. I will need to have you reimburse my interest cost as it’s a small matter as you said.

16. On 23 July 2019 the respondent sent an email to the applicant asking her to approved my loan based on a print the transfer and for her and her husband to sign as:

“Transforror” & “Transferree”,(sic) do not worry about a witness, then bring to our office ASAP, and provide to us the Westpac bank’s Home number, we will contact the bank to change the certificate of title into the correct one.

17. On 25 July 2019 the amended stamped original transfer (Zhang 25%) & (Chen 75%) was posted to your bank for processing approval and your bank confirmed with us that they received the original stamped documents on 31 July 2019. The applicant responded

Please don’t push that to the bank. The bank approved my loan based on my affordability. They need the amended land title to settle the loan. Please make it simple for the client and no need to go around and say things I can’t verify. OSR has clearly said you haven’t lodged anything with then and you will need to provide proof why it’s wrong.

18. On 17 August, 2019 an email was sent to the applicant by the respondent,

If the mistake made by us, when processing the amendment of share percentage (sic) to the title, According to the Duty Act, to change share percentage (sic) after settlement, Revenue NSW will be charge the clients extract duty – however, up till now, DID YOU PAY ANY MORE DUTY ON THE SHARE ADMENDMENT (sic)? When you have not paid any more duty on the amendment, it is proof of Revenue NSW made the mistake and we got evidence in hand as proof.

19. On 22 August 2019 the applicant repudiated the contract and engaged another conveyancer, Shirley Xing and the correct share allotment was completed on 2 December 2019 by another conveyance engaged by the applicant.

20. The applicant seeks the cost only of the conveyance fee to correct the share allotment being $500.00 and the loss of $5,034 for her negative gearing benefit, and $1,000 for emotional frustration.

Evidence of the respondent

21. The respondent’s first submission is that the Tribunal does not have jurisdiction, that matter is determined above. The respondent maintains that the correct shares were prepared on the transfer and that this was processed on 10 April 2019 and that Revenue NSW made the errors when processing the transfer, that the PEXA system only provided fraction to be selected presenting the shares on title and to avoid any penalty for the delayed settlement the respondent selected 1/3 to present 25% and 2/3 to present 75%. The respondent became aware of the error and contacted Revenue NSW to request them to amend the share errors on which was caused by the PEXA system on 16 April 2019. However, the respondent also states that a correct manual transfer was prepared and sent to the vendor The transfer was sent to Domain Legal Pty Lawyers, on 11 April 2019.

22. After the error was advised on 12 May 2019 an amended transfer was prepared and signed by the applicant and her husband on 23 July 2019 re-stamped and sent to Westpac Bank on 25 July 2019 and received by Westpac Bank on 31 July 2010.

23. The respondent disputes the loss of the negative gearing benefit they state the loan was approved on 13 May 2019 and therefore there was no loss by the applicant.

Consideration

24. The issue is whether there was a breach of the contract by the respondent.

25. The respondent told the Tribunal that the incorrect shares on the transfer, two thirds Chen and one third Zhang were caused by Revenue NSW. On 14 May 2019 in Exhibit R1 is an email from the respondent to EDR Revenue NSW, it states:

Dear Client, We refer to the above matter and please fix the errors for the Tenants in Common from 50% each to Xiao Ling Zhang (25%) and Chun Qi Chen (75%) Regards, Gino. The transfer on the evidence was not at any stage 50% shares. On 17 May 2019 is an email from Clint Barnsley, Revenue NSW, “Hi Gino, The correct % of 75/25 has been noted on our system as discussed on Tuesday.”

26. In my view, this does not mean that Revenue NSW had made any error, it noted the error, however, it can be interpreted that the error was caused by the respondent. There is no documentary evidence that explicitly states that Revenue NSW made an error, in fact, in Exhibit A1 [34] the letter states the opposite. Letter dated 31 October 2019 from Karen Lamont, Senior Operations, Revenue NSW provided the following:

that a solicitor/conveyancer acting in the purchase would need to provide a statutory declaration that an error was made in the drafting of the transfer. This should include any communication or copy of instructions given to the solicitor to change the shares on the contract to 75% and 25% prior to stamping – as the change was not stamped with an alteration noted stamp.

27. This suggests that the responsibility for drafting the transfer and the correct shares remains with the purchaser’s solicitor/conveyancer. There is no email or letter from Revenue NSW that they altered the shares to two thirds and one third. At Exhibit A1 [29] the Transfer states the following, “responsible subscriber, Auchland and Co, transfer of two thirds shares and one third shares. The electronic transfer is signed by George Germanos of Domain Legal Pty Limited for the vendor.” A manual transfer was sent to Domain Legal Pty Lawyers, on 11 April 2019, however the respondent does not suggest that the vendor inserted the two thirds and one third shares, they suggest Revenue NSW was responsible for amending the transfer.

28. I do not accept that Revenue NSW inserted two thirds and one third shares, there is not evidence from Revenue NSW that supports that proposition. The insertion of two thirds and one third was the responsibility of the respondent. There was a manual Transfer that was prepared by the respondent, however this is not co-signed by the vendor acknowledging the 75 shares and 25 shares, it appears in Exhibit A1 [29]. The transfer was signed by the vendor on-line through PEXA. The electronic transfer could only have been prepared by the respondent as the responsible subscriber and signed by the vendor. There is no other reasonable hypothesis. The also respondent claims that the PEXA system would not accept 75 shares and 25 shares, and that two thirds and one third shares were accepted. This suggests that the respondent was aware of the electronic transfer and that it had been completed in two thirds and one third share.

29. The transfer on Exhibit A1 [29] provides for the share of whole of land/interest, the respondent has not provided evidence from PEXA that the property could not be divided into 75/100 and 25/100 as they were instructed. It seems in improbable that shares could not be divided into 75/100 and 25/100, there being no documentary evidence that supports that proposition.

30. I had the opportunity of hearing the evidence from both parties and I find it improbable that the error was made by anyone else apart from the respondent.

31. On 12 May 2019 the respondent was emailed by the applicant concerning the error, however, the respondent did not take action concerning the transfer until 23 July 2019, apart from notifying Revenue NSW on 17 May 2020 of the error and it being noted. An amended transfer was not prepared until 23 July 2019, Exhibit A1 [30] and sent to Westpac Bank for consent to lodge the amendment. The respondent states they contacted Westpac Bank on 31 July 2019 to confirm receipt of the document.

32. There was no documentary evidence from Westpac Bank that they had received the amended transfer. The email from Westpac Bank to the applicant dated 20 August 2019 suggests that they had not received the amended transfer. However, the relationship between the parties broke down around 16 August 2019. On balance, I accept that the amended transfer was sent to Westpac Bank by the respondent.

Relevant legal principles

33. The applicant entered a contract with the respondent on 18 October 2017 for the supply of conveyancing services.

34. Contracts for services contain an implied promise to exercise reasonable care and skill in the performance of the relevant services. In Astley & Ors v Austrust Limited (1999) HCA 6 at para [85]. per Gleeson CJ, McHugh, Gummow and Hayne JJ:

In contract, the plaintiff gives consideration, often very substantial consideration, for the defendant's promise to take reasonable care.

35. After considering the evidence, in my view, there was an error made by the respondent in electronically transferring the share allotments through PEXA to two thirds and one third. There were clear instructions which were confirmed by the applicant on 25 March 2019 that the shares were to be allotted in 75 shares to Chen and 25 shares to Zhang. I do not accept that Revenue NSW was responsible for the transfer of the allotted shares. Apart from notifying Revenue NSW on 14 May 2019, no further action concerning the transfer was taken until 23 July 2019 despite the applicant emailing the respondent requesting action during this period. After 23 July 2019 the respondent attempted to rectify the error, however, this was not completed and the applicant repudiated the contract on 22 August, 2019.

36. The apportioning of incorrect shares was not an exercise in reasonable care and skill, and this amounts to a breach of the contract. I find the breach of contract proved.

Damages

Conveyancing costs

37. The damages sought by the applicant is the amount $500 being the cost of engaging a new conveyancer to correct the share allotment, Exhibit A1 [31]. The disbursements in Exhibit A1 [31] are not sought by the applicant. At the time of the repudiation of the contract on 22 August 2019 the transfer had not been completed. The delay by the respondent from 12 May 2019 to 23 July 2019, had contributed to the applicant repudiating the contract. In order for the allotment of shares to be completed the applicant engaged another conveyance at the cost of $500. The respondent did attempt to the mitigate loss of the respondent by preparing an amended transfer, having this stamped and forwarding it to the bank.

38. In Leeda Projects v Zeng (2020) 61 VR 384; [2020] VSCA 192 Kaye JA at [12] set out the following in relation to contractual damages (citations omitted):

The fundamental principles, for the determination of damages for breach of contract, are well established. Essentially, damages are awarded in order to compensate the injured party for the loss and damage arising from the breach of contract. Thus, damages consist of the sum of money which will put the injured party in the same position as if the breach of contract had not occurred. In order to determine the appropriate measure of damages in a particular case, it is necessary first to identify the kind of loss for which the injured party claims compensation. The loss, which is compensable in an action for breach of contract, is that which may fairly and reasonably be considered as arising naturally, that is, according to the usual course of things, from the breach of contract itself, or such as may be reasonably supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it.

39. The amount of $500 to engage a new conveyancer was required as the relationship between the parties had broken down due to the delay of the respondent. To engage another conveyance to correct the share allotment is fair and reasonable and places the applicant in the same position had the breach not occurred.

Negative Gearing Tax Benefit

40. The applicant seeks the loss of negative gearing tax benefit of $5,034 as the loan was not settled until the correct shares were allotted. The applicant provided a calculation based on her income and 8 months taken to resolve the issue and calculated it from the Australian Taxation Office website. The applicant did not provide documentary evidence from an accountant or tax agent as to the calculation.

41. In Hadley v Baxendale [1854] EngR 296; (1854) 9 Ex 341,damages are only recoverable for losses that arise naturally from the breach or may be reasonably supposed to have been in the contemplation of both parties at the time they made the contract as the probable result of the breach. There is no evidence from the applicant that it was in contemplation of the parties at the time of forming the contract that it would reasonably be supposed that there would be a negative gearing tax benefit loss if the contract was not performed.

Lord Reid in C Czarnikow Limited v Koufos [1969] 1 AC 350 at 385:

The crucial question is whether, on the information available to the defendant when the contract was made, he should, or the reasonable man in his position would, have realised that such loss was sufficiently likely to result from the breach of contract to make it proper to hold that the loss flowed naturally from the breach or that loss of that kind should have been within his contemplation.

42. I am not satisfied that the loss of negative gearing benefit was in the reasonable contemplation of the parties at the time the contract was formed and this claim is dismissed.

Emotional Frustration

43. In Moore v Scenic Tours Pty Ltd [2020] HCA 17; 77 ALR 209 the court considered that distress and disappointment are not "non-economic loss" under Section of the Civil Liability Act 2002 and therefore the respondent is not required to meet 15% of the most extreme case before awarding damages for non-economic loss. The applicant seeks the amount of $1,000 for emotional frustration, however, there is no evidence of what the emotional frustration was or any evidence that supports the applicant for any claim of emotional frustration, distress and disappointment. There was a breach of the contract by the respondent, however, the applicant has not proved that the breach amounts to distress and disappointment. This claim is dismissed.

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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

Amendments

27 September 2021 - Amended at [7] to remove title particulars and address.

Decision last updated: 27 September 2021