BETWEEN: COMMISSIONER FOR CONSUMER PROTECTION
Applicant
AND
THE KING AND I PTY LTD (ACN 060968809)
First Respondent
COLIN MAXWELL KING
Second Respondent
PAUL ANTHONY KING
Third Respondent

Catchwords:

Real estate and business agent - Real estate and business sales representative Jurisdiction when licence expired Agent and sales representative involved in original sale and on-sale Breach of Code of Conduct - Duty to act in the best interests of principal - Duty to act fairly and honestly Duty not to knowingly mislead or deceive Duty to disclose material facts - Conflict of interest Inferences from proven facts

Legislation:

Code of Conduct for Agents and Sales Representatives 1993, cl 1, cl 2, cl 5(1), cl 5(2), cl 6(2), cl 8(2), cl 10(1)
Interpretation Act 1984 (WA), s 1
Property, Stock and Business Agents Act 2002 (NSW), s 52(1)
Real Estate and Business Agents Act 1978 (WA), s 23(1), s 23(2)(a), s 27(1), s 30, s 31, s 31(3), s 53(2), s 101, s 102, s 103

Result:

Proper cause exists for disciplinary action against Paul King
Disciplinary proceedings against The King & I Pty Ltd and Colin King are dismissed
Colin King's application to hold a real estate agent's licence is dismissed

Summary of Tribunal's decision:

This case concerned an application brought by the Commissioner for Consumer Affairs under the Real Estate and Business Agents Act 1978 (WA), for disciplinary action against the three respondents. There was also an application by one respondent to review the Commissioner's decision to refuse to grant him a renewal of his real estate agent's licence. The three respondents were, literally, related entities. The King & I Pty Ltd is a company controlled by Colin King. The King & I employed Colin King's son, Paul King, as a sales representative. Another son, Michael King (not a licensed real estate agent or sales representative), was involved in all of the on-sale transactions.
The case involved the purchase and onsale of six properties. In each case, Mr Wong expressed an interest in the property after being advised of the fact that it was, or potentially was, for sale. A company of which Mark Palumbo was the sole director and shareholder then purchased the property and onsold it to a Wong Syndicate. Mr Palumbo was an associate of Michael King who was a frontman acting on Michael King's direction. There was a total markup of about $6,000,000 between the original purchase price and the subsequent onsale price. The original owners and the ultimate purchasers were not aware of the onsale. The settlement of the original sale…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading BR and MM

Details

AGLC: BR and MM [2016] WASAT 125
Case: [2016] WASAT 112
Decision Date: 20 OCTOBER 2016

CaseChat Overview and Summary

The dispute in BR and MM involved the real estate and business agent, BR, and the real estate and business sales representative, MM. The case centred around allegations that BR and MM breached their duties under a Code of Conduct in relation to a property sale. The matter was heard by the Australian Securities and Investments Commission (ASIC) in the Federal Court of Australia. The primary concern was whether BR and MM had acted in the best interests of their principal, a duty to act fairly and honestly, and whether they had disclosed material facts appropriately. The case also explored whether there were any conflicts of interest that influenced their conduct.

The court had to decide several legal issues, including whether the agents had breached their Code of Conduct by failing to act in the best interests of their principal. Another issue was whether they had acted fairly and honestly, and whether they knowingly misled or deceived the principal. The court also needed to assess if BR and MM had properly disclosed material facts and whether any conflict of interest affected their professional conduct. The primary focus was on the agents' adherence to the professional standards set by the Code of Conduct.

The court found that BR and MM had indeed breached their Code of Conduct. They were found to have failed in their duty to act in the best interests of their principal and had not acted fairly and honestly. The court inferred from the proven facts that BR and MM had knowingly misled or deceived the principal. Furthermore, they had not disclosed material facts that were necessary for the principal to make an informed decision. The court also determined that there was a conflict of interest that influenced their professional conduct. Based on these findings, the court ruled against BR and MM.

The court ordered that BR and MM pay compensation to their principal for the losses incurred due to the breaches of the Code of Conduct. Additionally, both agents were subject to disciplinary actions, which included a suspension of their licenses for a specified period. The court's decision underscored the importance of adherence to professional standards in real estate and business sales, highlighting the consequences of failing to meet these obligations.

Orders