WYATT V THE REAL ESTATE AGENTS AUTHORITY CA701/2012, [2013] NZCA 389

WYATT V THE REAL ESTATE AGENTS AUTHORITY CA701/2012, [2013] NZCA 389 [22 August 2013]IN THE COURT OF APPEAL OF NEW ZEALANDCA701/2012[2013] NZCA 389BETWEEN GREGORY JOHN WYATTAppellantAND THE REAL ESTATE AGENTSAUTHORITYFirst RespondentAND BARFOOT & THOMPSON LIMITEDSecond RespondentHearing: 20 August 2013Court: O'Regan P, Randerson and Wild JJCounsel: Appellant in personM J Hodge for First RespondentR B J Hern for Second RespondentJudgment: 22 August 2013 at 3 pmJUDGMENT OF THE COURTA The appeal is dismissed for want of jurisdiction.B The appellant is to pay the second respondent's costs for a standard appealon a band A basis.____________________________________________________________________REASONS OF THE COURT(Given by Wild J)[1] Mr Wyatt's right to appeal to this Court is under s 120 of the Real Estate Agents Act 2008 (the Act). This provides:120 Appeal to Court of Appeal on question of law(1) If dissatisfied with a decision of the High Court on the ground that it is erroneous in law, a party to an appeal under this Part may appeal to the Court of Appeal on a question of law only.(2) The appeal must be heard and determined in accordance with the rules of court.(3) The decision of the Court of Appeal on any appeal under this section is final.[2] Neither in his notice of appeal nor in his written submissions did Mr Wyatt identify the question(s) of law on which he appeals. Accordingly, at the start of the hearing on 20 August, we asked Mr Wyatt to do that.[3] What became clear from the Court's ensuing discussion with Mr Wyatt wasthat he had not grasped the strict limits placed on this Court's jurisdiction by s 120.Counsel for both respondents were right to rely on the Supreme Court's decision inBryson v Three Foot Six Limited for its circumscription of this Court's jurisdiction under s 120.1 Bryson turned on s 214 of the Employment Relations Act 2000 whichalso restricted this Court's jurisdiction to a "question of law".2[4] Relevant to this appeal the Supreme Court said this:[25] An appeal cannot, however, be said to be on a question of law where the fact-finding court has merely applied law which it has correctly understood to the facts of an individual case. It is for the court to weigh the relevant facts in the light of the applicable law. Provided that the court has not overlooked any relevant matter or taken account of some matter which is irrelevant to the proper application of the law, the conclusion is a matter for the fact-finding court, unless it is clearly insupportable.[5] In the light of Bryson, Mr Wyatt submitted that the judgment of the High Court under appeal is erroneous in law in three respects:(a) in incorrectly stating that the evidence of Mr Morley, an expert witness called by Barfoot & Thompson (B&T), was uncontradicted;1 Bryson v Three Foot Six Limited [2005] NZSC 34, [2005] 3 NZLR 721.2 Section 214 is different in that appeal to this Court is by leave which this Court may grant if ofthe opinion that the question of law involved "is one that, by reason of its general or publicimportance or for any other reason, ought to be submitted to the Court of Appeal for decision"(s 214(3)).(b) in incorrectly holding that Mr Wyatt had taken responsibility for the form of the Agreement for Sale and Purchase used; and(c) in holding that B&T used the seventh edition of the form of Agreement For Sale and Purchase Of Real Estate in a transitional period between the seventh edition and the introduction of the eighth edition, the Judge overlooked evidence that B&T already had access to and was using the eighth edition.[6] Some background is necessary before we turn to these three suggested questions of law.[7] B&T acted as agent for Mr Wyatt when he sold a small farm property under an Agreement for Sale and Purchase dated 13 April 2007. B&T used the seventh edition of the well known REINZ/ADLS3 approved form of agreement for that sale.At Mr Wyatt's direction the purchase price was stated to be "inclusive of GST".Mr Wyatt gave that direction because he thought the sale would not attract GST. He was wrong and subsequently settled a claim by the Commissioner of Inland Revenue by paying $110,000 GST.[8] Subsequently Mr Wyatt made a formal complaint to the first respondent, the Real Estate Agents Authority (the Authority). The nub of the complaint was that B&T negligently failed to use the eighth edition. Mr Wyatt asserted: "Theconsequence of [B&T's] failure is a potential liability to the Inland RevenueDepartment for Goods and Services Tax".[9] Having considered Mr Wyatt's complaint, the Complaints Assessment Committee of the Authority held, in a decision delivered on 20 December 2010, that there was not sufficient evidence to uphold a complaint of unsatisfactory conduct under s 72 of the Act and determined to take no further action on the complaint. An appeal by Mr Wyatt to the Real Estate Agents Disciplinary Tribunal (the Tribunal)3 Real Estate Institute of New Zealand Inc/Auckland District Law Society.was dismissed in a comprehensive reserved decision given by the Tribunal on 23 February 2012, following a hearing at Auckland on 25 November 2011.4[10] In [8] above we noted Mr Wyatt's assertion in his complaint that use of theseventh edition had resulted in his liability for GST. It is therefore worth recording what the Tribunal said about that, particularly as the Chairperson of the Tribunal was Judge P F Barber, who was, at the time, also Chair of the Taxation Review Authority:[82] Here, the practical vendor was Mr Wyatt who is, and dominantly held himself out to be, an experienced lawyer who was controlling the detail of the sales process. In particular, he directed that the sale price was inclusive of GST. He now says that he did not understand the nuances of GST and this does seem to be so. There is little doubt that the sale was not that of a going concern so that it could not be zero-rated. Neither GST clause in the 7th or 8th edition could achieve that in this case. Perhaps, if the GST clause in the 8th edition had been shown to Mr Wyatt, he would have realised he did not understand GST law and taken advice. That might have led to him asking the purchaser to pay the nominated price plus GST. The purchaser might have demurred. Also, Mr Wyatt knew that a GST input had been obtained by his vendor.[83] Mr Wyatt gave an explanation why the difference in wording about the supply of a going concern in 7th and 8th edition of the agreement would have led him to add GST to his asking price. In terms of his admitted knowledge of GST at the time of signing the agreement for sale and purchase, that explanation has little merit. Simply put, he seems to have thought that the sale supplied a taxable activity as a going concern – so that there would be zero-rating for GST purposes under s.11(1)(m) of the Goods and Services Tax Act 1985, when there was no such going concern. Also, he had taken exclusive control of the GST issue.[11] Notwithstanding the Tribunal's thorough decision, Mr Wyatt exercised hisright to appeal to the High Court, pursuant to s 116 of the Act.[12] Woodhouse J decided the appeal in a judgment delivered on 3 October 2012.5The Judge was satisfied that there was no material error by the Tribunal in concluding that use of the seventh edition did not constitute unsatisfactory conduct by B&T and dismissed the appeal.[13] Thus, Mr Wyatt has already had the benefit of two appellate considerations of his complaint. This is his third appeal and fourth hearing in respect of his complaint.4 Wyatt v The Real Estate Agents Authority [2012] NZREADT 3.5 Wyatt v The Real Estate Agents Authority [2012] NZHC 2250.That underlines why s 120 limits this Court's jurisdiction and why those limits mustbe strictly adhered to.[14] We turn now to deal with the three suggested errors of law in the HighCourt's judgment that Mr Wyatt contended gave rise to questions of law in terms ofs 120.Error of law in stating that Mr Morley's evidence was uncontradicted[15] Mr Morley was one of the witnesses who gave expert evidence before the Tribunal. His expertise was in relation to practice within the real estate industry. The gist of his evidence was that there was a "crossover period" of "several months"between the seventh and eighth editions during which real estate firms such as B&T were training and educating their staff on changes in the new edition. Of Mr Morley's evidence, Woodhouse J said this:[55] At the general level there is the clear and essentially uncontradicted expert evidence of Mr Morley to the essential effect that there was need for atransitional period before the seventh edition stopped being used. [16] Mr Wyatt submitted the Judge had erred because the REINZ's own monthly magazine "RE" contradicted Mr Morley's evidence. He took us first to the February2007 edition of RE where, under the heading "Compliance", the Chief Executive Ms Le Cren stated:6The 8th Edition Agreement for Sale & Purchase will be launched on 19 February. A series of regional road shows will be undertaken throughout the country to present the key changes in the Agreement. A full seminar on the 8th Edition will be held at a later date and a seminar DVD will be available for sale to members.[17] Mr Wyatt immediately accepted this passage did not contradict Mr Morley'sevidence, and steered us instead to the December 2007 edition of RE. An articleentitled "The New Property Act 2007" in that issue stated:7 many of the forms which we use on a day to day basis require changes tomake sure that they are compliant with the new Act. Because of this, an extensive review of all the forms used by REINZ members (and all other6 Christine Le Cren "2007" (February 2007) RE 7.7 Niamh McMahon "The New Property Act 2007" (December 2007) RE 26 at 26–27.forms) has been undertaken by the Auckland District Law Society (ADLS). As you know, the documents and precedents committee of the ADLS is responsible for recommending and implementing changes to the standards forms. These changes are undertaken in consultation with REINZ. The amended updated forms will hopefully be available shortly after Christmas so when the new Act takes effect on 1 January, both agents and lawyers will be operating from the correct forms.[18] We accept that article is not consistent with Mr Morley's evidence. But, aswe pointed out to Mr Wyatt, it relates to a fundamental change in the law effective 1 January 2008, which was well after Mr Wyatt's agreement of 13 April 2007. Unlikethe change from the seventh to the eighth edition in the early part of 2007 Mr Morley was referring to, the coming into force of the Property Law Act 2007 did require real estate agents to use "amended updated forms [of agreement]" on and from 1 January2008.[19] The Judge's statement at [55] of his judgment does not give rise to a questionof law. Even if it did, it is not erroneous.Incorrectly stating that Mr Wyatt had taken responsibility for the form of the agreement[20] Contrary to Mr Wyatt's submission, what Woodhouse J stated was this:8 The circumstance of this case of particular relevance is that Mr Wyatt made quite clear that he was assuming full responsibility for the terms of the agreement. Looking at it from a different perspective, there was nothingthat could have indicated to Mr Reid that Mr Reid specifically, or Barfoot & Thompson in general, were being asked to assume any responsibility as to the suitability of any of the terms of the agreement.(Our emphasis.)[21] Earlier in his judgment, Woodhouse J set out the evidence of Mr Reid, one of the two B&T agents who had acted for Mr Wyatt, including:94.2 I provided the necessary details, such as the names of parties, theprice and Mr Wyatt's special conditions, to the administration staff at B&T's Albany branch. The administration staff then incorporatedthe information and terms into a standard form of the agreement for sale and purchase (ASP) of real estate issued by the Auckland District Law Society (ADLS) and the Real Estate Institute of NZ8 At [59].9 At [17].(REINZ). At no time, did Mr Wyatt give instructions on what form to use. As far as I am aware the administration staff would have used the edition that was commonly used at the time.(Our emphasis.)[22] The Judge did not err in the way suggested by Mr Wyatt. In any event, such error could not give rise to a question of law in terms of s 120.Error in overlooking the evidence of Mr Wyatt's witnesses Ms Mathews andMs Subritzky[23] The background to this point is that B&T, responding to Mr Wyatt'scomplaint, originally claimed that it had first received the eighth edition in electronic format from the ADLS on 23 April 2007. Subsequently, about a year later and in response to information obtained by Mr Wyatt, B&T accepted that in fact it had obtained the eighth edition in electronic form from the REINZ before 16 March 2007. The relevance is that the earlier date was well after Mr Wyatt's agreement of13 April 2007, the latter date before it.[24] In [28] of his judgment Woodhouse J set out evidence given for B&T by Mr House that the firm had a final version of the guide to the eighth edition ready for distribution to its many branches "in mid to late April 2007". After referring toparticulars provided by B&T of the use of the seventh and eighth editions by itsAlbany Branch (which had handled Mr Wyatt's sale) the Judge said this:[30] Mr Wyatt also obtained evidence from two other sources in respect of the use of the eighth edition compared with the seventh edition in the period from 19 February to 30 April 2007. A solicitor employed by an Auckland law firm advised that the firm had acted in eight transactions where the eighth edition had been used. These were in March and April 2007.10 The other evidence came from the manager of the branch of another real estate agency. Her evidence was that in February and March 2007 both the seventh and eighth editions were used. The first use of the eighth edition was on 21 February 2007. The last use of the seventh edition, at least from the list provided, was on 23 March 2007. In other words, in the period covered, all agreements after 23 March 2007 were made using the eighth edition.10 This evidence was also obtained to challenge a particular date on a letter discovered by Barfoot & Thompson. There is no longer a live issue in respect of that date and it is unnecessary torecord the further detail in the solicitor's evidence in this regard.[25] The solicitor referred to in that paragraph is Ms Mathews of Brookfields. On instructions from Mr Wyatt her firm checked its archived files to ascertain whether it had acted on any real estate transactions involving B&T as agent in which the eighth edition had been used during March and April 2007. It found eight. None involved the Albany Branch of B&T. The evidence of the manager of the branch of another real estate agent referred to in [30] is that of Ms Subritzky, manager of the Manukau Branch of First National Real Estate. She deposed to a similar inquiry, also at the request of Mr Wyatt. Her evidence established:her office had first used the eighth edition on 21 February 2007;thereafter it had interchangeably used both the seventh and eighth edition through to 23 March 2007;from 26 March 2007 it had used only the eighth edition; andall the eighth edition forms of agreement it had used were in the format it had received electronically.[26] Paragraph [30] of the judgment fairly, adequately and accurately summarises that evidence, although it omits – in relation to Ms Mathews – to record that she was looking for eighth edition forms of agreement in which B&T had acted as agent. In any event, this is not a question of law in terms of s 120.Costs[27] Mr Wyatt also submitted there were questions of law relating to Woodhouse J's decisions on costs. The only one of any monetary significance concerned the $5,774 (GST inclusive) Mr Wyatt had paid to Brookfields for the work described in [25] above.[28] Mr Wyatt had submitted to the Judge that the $5,774 should be reimbursed tohim as "wasted costs". The Judge did not agree:[66] Because of my conclusion on the primary issue relating to use of the seventh edition I am satisfied that there are no reasonable grounds for anorder in Mr Wyatt's favour that [B&T] meet expenses he incurred inobtaining evidence to put before the Tribunal.[29] We view that decision as a proper exercise of the discretion rr 14.1(1) and 14.12 of the High Court Rules gave the Judge. As the Judge said, Mr Wyatt incurred those costs in preparing evidence for his unsuccessful appeal to the Tribunal. That apart, the costs matter is not a question of law in terms of s 120.Result[30] This appeal does not give rise to any questions of law in terms of s 120.[31] It is accordingly dismissed for lack of jurisdiction.[32] The first respondent does not seek costs. The appellant is to pay the secondrespondent's costs for a standard appeal on a band A basis with usual disbursements.Solicitors:Meredith Connell, Auckland for First RespondentMcElroys, Auckland for Second Respondent