Campbell v Director-General, Department of Finance and Services (GD)

[2012] NSWADTAP 32

Administrative Decisions Tribunal

New South Wales

Medium Neutral Citation:	Campbell v Director-General, Department of Finance and Services (GD) [2012] NSWADTAP 32
Hearing dates:	16 May 2012
Decision date:	27 August 2012
Jurisdiction:	Appeal Panel - Internal
Before:	S Higgins Deputy President P Molony Judicial Member M von Kolpakow, Non Judicial Member
Decision:	The appeal is dismissed.
Catchwords:	APPEAL - question of law - regard to irrelevant material - ambiguity of findings - leave to appeal on the merits
Legislation Cited:	Administrative Decisions Tribunal Act 1997 Bankruptcy Act 1966 Property, Stock and Business Agents Act 2002
Cases Cited:	Campbell v Director-General, Department of Services and Technology and Administration [2011] NSWADT 236 Director General, Department of Finance and Services v Carr (GD) [2011] NSWADTAP 64 Jones v Dunkel(1959) 101 CLR 298 O'Sullivan v Medical Council of New South Wales [2010] NSWADTAP 64
Category:	Principal judgment
Parties:	Jennifer Ivy Campbell (Appellant) Director-General, Department of Services Technology and Administration (Respondent)
Representation:	Counsel A G Rogers (Appellant) R M Henderson (Respondent) Harrington Maguire & O'Brien (Appellant) Department of Finance and Services (Respondent)
File Number(s):	119051
Decision under appeal	Citation: [2011] NSWADT 236 Date of Decision: 2011-10-10 00:00:00 Before: General Division File Number(s): 103007

REASONS FOR DECISION

Introduction and background

1. The appellant (Jennifer Campbell) has appealed, in part, against a decision of the Tribunal which affirmed a decision of the respondent (the Director-General of the Department of Services Technology and Administration) in regard to disciplinary action taken against the appellant under the Property, Stock and Business Agents Act 2002 (the Act). The appellant had been the holder of a real estate licence under the Act since February 2005. She was also the sole director and secretary of a company, Reda Holdings Pty Ltd (Reda) which was the holder of a real estate corporation licence issued under the Act. The appellant's son and husband were also directors of Reda at various times. The appellant became an undischarged bankrupt on 4 March 2009 and Reda was placed into liquidation on 27 November 2009. During 2009, the respondent was investigating the applicant's son and her husband in regard to their licensed activities under the Act. On 3 November 2009, in the course of that investigation the respondent interviewed the appellant. At the time the respondent was not aware that the appellant was an undischarged bankrupt. Under subsection 14(1) of the Act, a person who is an undischarged bankrupt cannot be the holder of a real estate licence.

1. Subsequent to the interview the respondent discovered that the appellant was an undischarged bankrupt and issued her with a Notice to Show Cause under section 195 of the Act.

1. In January 2010, the respondent decided to take disciplinary action against the appellant under section 192 of the Act. It decided to (a) cancel the appellant's real estate licence (see paragraph 192(1)(g) of the Act); (b) declare the appellant to be a disqualified person for the purposes of the Act for a period of three years (see paragraph 192(1)(h) of the Act); and, (c) disqualify the appellant from being involved in the direction, management or conduct of the business of a real estate agents licensee (see paragraph 192(1)(h) of the Act). The effect of this decision meant that the appellant was excluded, for a period of three years, from any involvement in the real estate industry, including being the holder of a certificate of registration as a real estate salesperson.

1. In March 2010, the respondent affirmed its decision on internal review and the appellant sought external review of that decision by the Tribunal, as she was entitled to do.

1. On 18 November 2010, following a hearing on that day, the Tribunal made orders affirming the decision of the respondent to cancel the appellant's licence and to disqualify her for three years from being involved in the direction, management or conduct of the business of a real estate licensee. The Tribunal also adjourned the hearing of the appellant's application, in so far as it related to the respondent's decision to declare her to be a disqualified person under the Act for three years, to 31 January 2011. On 10 October 2011, the Tribunal affirmed the decision of the respondent and published its reasons for decision: see Campbell v Director-General, Department of Services Technology and Administration [2011] NSWADT 236.

1. During the course of the hearing before the Appeal Panel, we were informed that the appellant was discharged from her bankruptcy on 7 May 2012.

The appeal

1. An appeal may be made to the Appeal Panel from a decision of the Tribunal made in proceedings for a review of a reviewable decision: see paragraph 112(1)(b) of the Administrative Decisions Tribunal Act 1997 (the ADT Act). There is no dispute that the decision of the Tribunal at first instance was a decision in proceedings for a review of a reviewable decision. An appeal can be made on a question of law, and, by leave, extend to the merits: see subsection 113(2) of the ADT Act.

1. In this appeal, the appellant only appeals the Tribunal's decision in so far as it affirmed the decision of the respondent to declare, pursuant to paragraph 192(1)(h) of the Act, the appellant to be a disqualified person for the purposes of the Act for a period of three years.

1. The appellant's grounds of appeal, as refined in her written submission and in oral argument during the course of the hearing are as follows:

(a) the Tribunal erred in law in having regard to irrelevant material in determining the only issue that remained in issue (i.e. whether the appellant should be a disqualified person for the purpose of the Act). The irrelevant material being the appellant's bankruptcy and whether she took reasonable steps to avoid her bankruptcy,

(b) the Tribunal erred in law as its findings on 'the key matters of fact' before it were ambiguous,

(c) the Tribunal erred in making the findings it did. In this regard the appellant argues that there are inconsistencies in the Tribunal's finding, but concedes that these issues are matters going to the merits of the application.

Legislation

1. The real estate industry is regulated under the Act (i.e. Property, Stock and Business Agents Act 2002). Paragraph 8(1)(a) and subsection 9(1) of the Act prohibits a person to act as or carry on the business of a real estate agent unless the person is the holder of a real estate agents licence.

1. Paragraph 10(1)(a) prohibits a person from being in or remaining as a real estate person unless the person is the holder of a certificate of registration.

1. Section 14 of the Act sets out the eligibility for a licence or certificate of registration. That section relevantly provides as follows:

14 Eligibility for licence or certificate of registration

(1) A natural person is eligible to hold a licence only if the Director-General is satisfied that the person:

(a) ...

(2) A corporation is eligible to hold a corporation licence only if the Director-General is satisfied that:

(a) ...

(3) A person is eligible to hold a certificate of registration only if the Director-General is satisfied that the person:

(a) is an individual who is at least 16 years of age, and

(b) is a fit and proper person to hold a certificate of registration, and

(c) has the qualifications required for the issue of a certificate of registration of the type concerned, and

(d) is not a disqualified person.

Note. The grounds of disqualification in section 16 (1A) do not disqualify a person from eligibility to hold a certificate of registration.

(4) ...

1. Section 15 sets out the qualifications for a licence or certificate of registration. The issue of qualification was not a matter in issue before the Tribunal at first instance.

1. Section 16 sets out what is meant by a person being a 'disqualified person'. That section relevantly provides as follows:

16 Disqualified persons

(1) A person is a disqualified person for the purposes of this Act if the person:

(a) has a conviction ...

(1A) A person is also a disqualified person for the purposes of this Act (except for the purposes of eligibility to hold a certificate of registration) if the person:

(a) is an undischarged bankrupt, or

(b) at any time in the last 3 years was an undischarged bankrupt, applied to take the benefit of any law for the relief of bankrupt or insolvent debtors, compounded with his or her creditors or made an assignment of his or her remuneration for their benefit, or

(c) is, or was at any time in the last 3 years, concerned in the management of, or a director of, an externally-administered body corporate (within the meaning of the Corporations Act) except in a case of the voluntary winding up of the body corporate, or

(d) is a person:

(i) who was, at any time in the last 3 years, concerned in the management of, or a director of, a body corporate that, within 12 months after the person ceasing to be such a person or director, became an externally-administered body corporate (within the meaning of the Corporations Act) except in the case of a voluntary winding up of the body corporate, and

(ii) who failed (while concerned in the management of, or a director of, that body corporate) to take all reasonable steps to avoid the body corporate becoming an externally-administered body corporate.

(2) ...

(2A) ...

(2B) The Director-General may exempt a person from the operation of subsection (1A) (a), (b) or (c) by:

(a) certifying, in the case of exemption from subsection (1A) (a), that the Director-General is satisfied that the person took all reasonable steps to avoid the bankruptcy concerned, or

(b) certifying, in the case of exemption from subsection (1A)

(b), that the Director-General is satisfied that the person took all reasonable steps to avoid the bankruptcy or other financial difficulties concerned, or

(c) certifying, in the case of exemption from subsection (1A) (c), that the Director-General is satisfied that the person took all reasonable steps (while concerned in the management of, or a director of, the body corporate) to avoid the body corporate becoming an externally-administered body corporate.

(2C) Subsection (1A) (d) does not operate to make a person a disqualified person unless the Director-General has served a notice on the person giving the person the opportunity to make oral or written submissions to the Director-General within a period (not being less than 14 days) specified in the notice with respect to the grounds on which the person believes he or she took all reasonable steps to avoid the body corporate becoming an externally-administered body corporate and the Director-General is satisfied that the person failed to take all such steps.

(2D) In determining for the purposes of subsection (2B) or (2C) what reasonable steps could have been taken by a person to avoid a particular outcome, the Director-General is to have regard to the steps that could have been taken by the person from the time that the financial difficulties that gave rise to the outcome first arose.

(3) ...

1. Section 191 of the Act sets out the grounds on which the respondent can take disciplinary action against a person who is, or was the holder of a licence or certificate of registration. That section provides:

191 Grounds for disciplinary action

Disciplinary action under this Part can be taken against a person who is or was the holder of a licence or certificate of registration on any one or more of the following grounds:

(a) the person has contravened a provision of this Act or any other Act administered by the Minister, or the regulations under any such Act, whether or not the person has been prosecuted or convicted of an offence in respect of the contravention,

b) the person has contravened a condition of the licence or certificate of registration,

(c) the person has, in the course of carrying on business or exercising functions under the licence or certificate of registration, acted unlawfully, improperly, unfairly or incompetently,

(d) the person is a disqualified person or is otherwise not eligible under section 14 to hold a licence or certificate of registration,

(e) the person is not a fit and proper person to be involved in the direction, management or conduct of the business of a licensee,

(f) ...,

(g) ...,

(h) ...,

(i) ...,

(j) ...,

(k) ...

1. The disciplinary actions the respondent can take are set out in section 192 of the Act which provides:

192 Disciplinary action

(1) Each of the following actions is disciplinary action that the Director-General can take against a person under this Act:

(a) caution or reprimand the person,

(b) give a direction to the person requiring the person to give a specified undertaking to the Director-General as to the manner in which the person will conduct business or exercise functions under a licence or certificate of registration held by the person,

(c) give a direction to the person requiring the person to take specified action within a specified time in connection with the conduct of business or the exercise of functions under a licence or certificate of registration,

(d) impose a monetary penalty on the person of an amount not exceeding 100 penalty units in the case of an individual or 200 penalty units in the case of a corporation,

(e) impose a condition on the person's licence or certificate of registration,

(f) suspend the person's licence or certificate of registration for a period that does not exceed the unexpired term of the licence or certificate of registration,

(g) cancel the person's licence or certificate of registration,

(h) declare the person to be a disqualified person for the purposes of this Act, either permanently or for a specified period,

(i) disqualify the person from being involved in the direction, management or conduct of the business of a licensee.

(2) A power conferred by this Act to take disciplinary action against a person is a power to take any one or more of the actions that constitute disciplinary action.

(3) ...

1. The scope of disciplinary action under paragraph 192(1)(h) was recently considered by the Appeal Panel in Director General, Department of Finance and Services v Carr (GD) [2011] NSWADTAP 64. At [25]. The Appeal Panel held that a general order under that paragraph was not limited to one or other of the statutory grounds set out in section 191. That is, it was not limited to the ground set out in paragraph 191(d). At [28] to [30], the Appeal Panel found that the expression used in paragraph 192(1)(h) was 'an all encompassing expression' and excluded a person from eligibility from a licence and a certificate of registration under paragraphs 14(1)(d) and (3)(d). It found that it was the most 'draconian sanction' in section 192. And at [34] the Appeal Panel concluded that 'once an order is made under s 192(1)(h) it is difficult to see what if any work is left to be done by an order under s 192(1)(i).'

Errors of law

1. It is convenient to first deal with the errors of law raised by the appellant.

(a) Did the Tribunal have regard to irrelevant material?

1. The appellant's argument in regard to the Tribunal having regard to irrelevant material centres on the Tribunal's consideration as to whether the appellant took all reasonable steps to avoid her bankruptcy. This material, the appellant argued was a matter relevant to the appellant's licence and the decision to disqualify her from being involved in the direction, management or conduct of the business of a licensee (paragraph 192(i)) and it was of no relevance to the respondent's decision to declare the appellant as a disqualified person under paragraph 192(h) of the Act.

1. As pointed out by the appellant her wish was to be able to apply for a certificate of registration to be a real estate sales person and the effect of the respondent's declaration meant that she was unable to make such an application. In this regard the appellant pointed to subsection 16(1A) of the Act which expressly provided that it was of no relevance to the application for a certificate of registration.

1. In support of her argument that the Tribunal had regard to this material the appellant referred to paragraph [54] in the Tribunal's reasons for decision in which it said:

54. The essence of the applicant's case is that she took reasonable steps to avoid the bankruptcy and liquidation by seeking legal advice from Mr McCarthy, instructing him to countersue Atkinson Family Trust and following his advice.

1. In our view, the argument of the appellant is misconceived as a matter of construction and also in what was said by the Tribunal.

1. The application before the Tribunal was an application for review of the respondent's decision to take disciplinary action against the appellant in regard to her conduct as a licensee (including her continuing to trade as a licensee after she was declared bankrupt and her failure to inform the respondent of her bankruptcy). It was not a review of a decision to refuse the appellant a certificate of registration. Had it been such an application, we agree an automatic disqualification of the appellant, by reason of being an undischarged bankrupt, under subsection 16(1A) would not apply. However, this does not mean that the circumstances of her bankruptcy and the liquidation of Reda were of no relevance to that application. As we have pointed out, in order to be eligible for a certificate of registration, paragraph 14(3)(b) of the Act, the applicant must satisfy the respondent that he/she is a 'fit and proper' person to hold such a certificate. It is in this context that the circumstances surrounding an applicant's bankruptcy, former bankruptcy, or involvement in the business of a corporate licensee may be relevant.

1. For the same reasons, the circumstances surrounding the bankruptcy of a licence holder or certificate of registration holder, or the person's involvement in the business of a licensee, may be relevant to the grounds for disciplinary action as set out in paragraph 191(d) and (e) of the Act. Paragraph 191(d), includes not being eligible under section 14 to hold a licence or certificate of registration. As we have said eligibility for a licence or certificate of registration includes a requirement to be fit and proper to hold such a licence or certificate.

1. The appellant's fitness and propriety to hold a certificate of registration as a real estate salesperson, was an issue before the Tribunal. At [24], in its reasons for decision, the Tribunal noted the respondent's contention that the appellant was not fit and proper to hold a certificate of registration due to her alleged dishonesty and disregard of the requirements of the Act: see also at [29] and [31] to [35]. It was the appellant's contention that she had at all times acted honestly and truthfully and had relied on her solicitor, Mr McCarthy, to take all necessary steps to ensure she did not become a bankrupt and on the oral telephone advice he gave her that she was not a bankrupt: see at [38] to [46].

1. At [38] of its reasons for decision, the Tribunal set out the respondent's contention in regard to the appellant failing to take reasonable steps to avoid her bankruptcy and the liquidation of Reda. This contention we note was made in the context of the appellant's failure to monitor the operation of Reda's real estate business. As we have indicated, a person's conduct in the business of a licensee may be relevant to that person's fitness and propriety to be the holder of a certificate of registration. We note that the appellant's bankruptcy was related to the operation of the Reda real estate business.

1. At the hearing before the Tribunal at first instance, the appellant responded to these contentions of the respondent and asserted she had taken all reasonable steps: see at [50] to [52] of its reasons for decision.

1. Paragraph [54] of the Tribunal's reasons for decision is the second paragraph of the Tribunal's discussion of the material before it and in our view is merely a restatement of the appellant's case in so far as it relates to her fitness and propriety to be the holder of a certificate of registration. It is not a statement by the Tribunal, to the effect that subsection 16(1A) and the exception contained in subsection 16(2B) were the matters for determination before it. On the contrary, as can be seen from the paragraphs that follow, the Tribunal's considerations and findings related to the appellants fitness and propriety to be the holder of a certificate of registration.

1. Accordingly we find that the appellant has failed to establish this ground of appeal.

(b) Ambiguity in findings

1. In her written submissions, the appellant argued that the Tribunal, in its reasons for decision failed to make a finding on the key matter before it. The key matter was whether the appellant had, or had not received advice from Mr McCarthy that she was not a bankrupt. Instead, the appellant argues, the Tribunal made findings that were ambiguous/inconsistent. The appellant pointed to paragraph [56] of the Tribunal's reasons for decision where the Tribunal accepted the appellant's evidence that she had instructed Mr McCarthy to act on her behalf and that Mr McCarthy had prepared the forms he was instructed to prepare on her behalf under the Bankruptcy Act 1966 (Cth)and that 'it is possible the [sic] Mr McCarthy ...may have wrongly informed her that she had not been declared bankrupt'. This finding the appellant contended was inconsistent with the Tribunal's findings at [59] and [62] that the appellant was aware of, or should have been aware of her bankruptcy.

1. In our view, no inconsistency arises in these findings. A finding that the appellant had instructed her solicitor and that he may have informed her that she was bankrupt did not mean that the appellant was not aware that she was bankrupt.

1. As we understand it, the appellant also contends that in the absence of any evidence from Mr McCarthy, the Tribunal had no option but to accept the evidence of the appellant, namely that Mr McCarthy had advised her that she was not a bankrupt. That is, in the absence of the respondent calling Mr McCarthy to refute the evidence of the appellant, the Tribunal should have applied the principles set out in Jones v Dunkel (1959) 101 CLR 298. The principles set out in this case relate to adverse inferences that can be drawn against a party to proceedings where that party elects not to adduce evidence on a matter in issue. In our view, the principle was of no application in the proceedings before the Tribunal. What Mr McCarthy may or may not have told the appellant was ultimately not material. There was ample material before the Tribunal, including the appellant's own evidence, from which the appellant's knowledge of her bankruptcy, irrespective of what Mr McCarthy told her, could be inferred.

1. Accordingly, the appellant has failed to establish this ground of appeal.

Leave to appeal on the merits

1. The Tribunal's power to grant leave to extend an appeal to the merits is a discretionary one. In O'Sullivan v Medical Council of New South Wales [2010] NSWADTAP 64 at [24] the Appeal Panel set out the principles that apply to the exercise of that discretion as follows:

24 Legal principles for granting leave. It is not necessary for the Appeal Panel to first identify an error of law before granting leave for an appeal to be extended to the merits of the Tribunal's decision: Lloyd v Veterinary Surgeons Investigating Committee [2005] NSWCA 456. The onus of proof lies on the party applying for leave and the standard of proof is on the balance of probabilities: World Best Holdings Ltd v Sarker & Anor [2004] NSWSC 935 at [25] per Sully J. The discretion is open and unfettered but must be exercised in a fair and just manner having regard to the purpose of the relevant legislation: Jones v Ekermawi [2009] NSWSC 143 at [13]. Certain inferences can be drawn from the fact that leave is required. They include that the need for leave is a 'control filter' designed, among other things, to protect respondents from the cost of a full hearing of appeals which should not properly be entertained: World Best Holdings Ltd v Sarker & Anor, per Sully J at [25]. Circumstances which may justify leave being granted include where the Tribunal has gone about its fact finding process in such an unfair or unorthodox manner that it is likely to produce an unfair result: K v K [2000] NSWSC 1052 at [10] to [15]. However, "merely to suggest that there is a bona fide challenge to a decision of fact is not enough to require the Appeal Panel to grant leave to appeal.": Abdul-Karim v the Council of the New South Wales Bar Association [2005] NSWCA 93 at [34] per Mason P (Ipp JA and Hunt AJA agreeing).

1. The appellant's contentions in regard to extending the appeal to the merits arise from the same questions that were raised in the abovementioned questions of law. That is, they arise from alleged errors of factual findings by the Tribunal about the appellant's knowledge of her bankruptcy and her failure to take reasonable steps to monitor the business activities of Reda, a company of which she was a director, and avoid her bankruptcy.

1. In our view, the findings made by the Tribunal in this regard were clearly open to it on the evidence. Furthermore, the Tribunal had the benefit of hearing the appellant's evidence and assessing her credibility.

1. Accordingly, in these circumstances, in our opinion, it would not be fair or just to grant leave for a merits appeal.

1. For the reasons set out above, the appropriate order is to dismiss the appeal.

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Decision last updated: 27 August 2012