Chehade v Commissioner for Consumer Affairs

Case [2016] SASC 105

SUPREME COURT OF SOUTH AUSTRALIA

(Magistrates Appeals: Criminal)

CHEHADE v COMMISSIONER FOR CONSUMER AFFAIRS

[2016] SASC 105

Judgment of The Honourable Justice Hinton

11 July 2016

PROFESSIONS AND TRADES - AUCTIONEERS AND AGENTS - OFFENCES AND CONTRAVENTIONS - PARTICULAR CASES - HAVING INTEREST IN SALE

CRIMINAL LAW - APPEAL AND NEW TRIAL - APPEAL AGAINST SENTENCE - GROUNDS FOR INTERFERENCE  - GENERALLY

CRIMINAL LAW - SENTENCE - SENTENCING ORDERS - DISCRETION TO RECORD CONVICTION - RELEVANT CONSIDERATIONS

CRIMINAL LAW - SENTENCE - RELEVANT FACTORS  - NATURE AND CIRCUMSTANCES OF OFFENCE - CIRCUMSTANCES OF OFFENCE

Appeal against sentence imposed by Magistrate.

The appellant was retained to market and sell a residential property. Between the execution of the contract for the sale of the property and the date of settlement, it was discovered that a member of the appellant’s family, his sister, was to obtain an interest in the property. The sale proceeded. The appellant was charged with an offence contrary to s 24G(2) of the Land and Business (Sale and Conveyancing) Act 1994 as he had obtained a beneficial interest in the property by virtue of the fact that an associate of his, defined by that Act as including relatives, had attained such an interest. The respondent pleaded guilty, was convicted and fined $3600.

Whether the Magistrate erred in refusing to exercise his discretion pursuant s 16 of the Criminal Law (Sentencing) Act 1988 (SA) to impose a penalty without conviction. The appellant submitted that the Magistrate failed to appreciate the atypical and unusual nature of the offending and, therefore, erred in failing to form the opinion that good reason existed for not recording a conviction.

Held:

1. The appellant’s offending cannot be considered an atypical or unusual example of the conduct caught by s 24G(2).

2.       The Magistrate’s conclusion that he was not of the opinion that good reason existed for not recording a conviction was open on the evidence and could not be said to be plainly wrong.

3.       The appeal is dismissed.

Land and Business (Sale and Conveyancing) Act 1994 (SA) s 24G; s 37B; Criminal Law (Sentencing) Act 1988 (SA) s 16; Land Agents Act 1994 (SA) s 6A(3), referred to.
Ashton v Police [2005] SASC 460; Police v Kostoff (2014) 244 A Crim R 327, not followed.
Application by the Attorney General under section 37 The Crimes (Sentencing Procedure) Act (2004) 61 NSWLR 305; Brookes v Police (2014) 66 MVR 163; Buck v Bavone (1976) 135 CLR 110; Cameron v Holt (1980) 142 CLR 342; City of Salisbury v Ahrens Group (2010) 108 SASR 54; Cobiac v Liddy (1969) 119 CLR 257; Commissioner for Consumer Affairs v Taza [2011] SADC 192; Forgione v Police [2008] SASC 54; Goldsworthy v Police [2016] SASC 85; He Kaw Teh v The Queen (1985) 157 CLR 523; Hemming v Lukin (1996) 67 SASR 248; Hemming v Mundy (2001) 122 A Crim R 329; Hemming v Neave (1998) 51 SASR…

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Chehade v Commissioner for Consumer Affairs [2016] SASC 105
Case
[2016] SASC 105
Decision Date

CaseChat Overview and Summary

Chehade v Commissioner for Consumer Affairs is a case heard by the South Australian Supreme Court, involving a dispute regarding a contravention of the Law of Property (Sale of Land) Act 1962 by the appellant, Mr Chehade. Mr Chehade, an auctioneer, was convicted of having an undisclosed interest in a property he was selling, which was contrary to the legislative intent of the Act to deter sales representatives from obtaining beneficial interests in properties they sell. The court was required to determine whether the offence was of strict liability, as argued by the respondent, or whether the offence required a subjective intention to obtain a beneficial interest, as argued by the appellant. Additionally, the court had to consider whether the appellant's circumstances constituted extenuating factors warranting a departure from recording a conviction.

The court concluded that the offence under section 24G(2) of the Law of Property (Sale of Land) Act 1962 was indeed of strict liability. This determination was based on the legislative intent to rigorously deter sales representatives from obtaining beneficial interests in the properties they sell, even if they did not intend to do so. The court found that the appellant's failure to take reasonable care to avoid obtaining a beneficial interest was sufficient to constitute an offence. Furthermore, the court held that the appellant's circumstances, including the adverse publicity and its impact on his family, did not constitute extenuating factors under section 16(b) of the Act. Consequently, the court dismissed the appeal and affirmed the conviction against the appellant.

In light of the court's decision, the final order was that the appeal brought forth by Mr Chehade was dismissed, and the conviction against him was upheld. This decision underscores the strict liability nature of the offence under consideration and reinforces the legislative intent to protect consumers from potential conflicts of interest by sales representatives. The court's reasoning highlights the importance of adhering to regulatory standards to maintain integrity and transparency in property sales.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

HINTON J
Nothing in Mr Chehade’s character, antecedents, age, physical condition or mental condition leads me to form the opinion that good reason exists not to record a conviction. This offending cannot be considered trifling. Here I bear in mind His Honour Judge Brebner’s observation[53] and the intent behind the amendments made to the LB(SC)A in 2007.[54] I appreciate the impact the adverse publicity has had upon Mr Chehade and his family and the impact that a conviction will have on his ability to obtain finance for certain purposes. In my view, they do not amount to extenuating circumstances within the meaning of s 16(b). In the end, like the Magistrate, I do not consider that good reason exists not to proceed by recording a conviction. I am particularly influenced by the legislative intent to capture those who do not take reasonable care. Accordingly, the discretion contained in the foot of s 16 is not enlivened. [53] Commissioner for Consumer Affairs v Taza [2011] SADC 192 at [29].[54] South Australia, Parliamentary Debates, House of Assembly, 26 October 2006 at 1146-7.Conclusion and orders For the reasons I have given, I dismiss the appeal.

Ratio Decidendi

Legal Principle Established

Established by: HINTON J

For the reasons advanced above, I conclude that s 24G(2) LB(SC)A creates an offence of strict liability that may properly be described as a regulatory offence. Further, in my view, because the offence captures the sales representative who did not intend to obtain a beneficial interest in the property or business, but who failed to take reasonable care to avoid doing so, and yet is liable to a penalty including the possibility of imprisonment, the Legislature’s primary intent is to deter the obtaining of beneficial interests by sales representatives and to do so rigorously. So much so that the statute contemplates punishment of the careless. It follows that any penalty imposed for the breach of s 24G(2) LB(SC)A must reflect that intent.Consideration I turn to analyse the arguments made in support of the ground of appeal. I commence my analysis of the first argument by dealing with the underlying submission, namely, that Mr Chehade’s offending may be characterised as an atypical and unusual example of offending of the type caught by s 24G(2) LB(SC)A. That characterisation is drawn from the following facts:i.that no offence was committed as at the time the contract for sale was executed;ii.that Mr Chehade did not know of his sister’s involvement in the sale and that he stood to obtain a beneficial interest in the property within the meaning of the LB(SC)A until 25 March 2013;iii.that Mr Chehade commenced the process for obtaining the approval of the Commissioner in relation to obtaining a beneficial interest in Mrs King’s property on 26 March 2013;iv.that Mr King refused to consent to Mr Chehade being granted an approval; andv.that despite refusing to consent to Mr Chehade being granted an approval, Mr King nonetheless proceeded to sell his mother’s property to Mr and Mrs El Haj. Counsel also contrasted the circumstances of Mr Chehade’s offending with those arising in Commissioner for Consumer Affairs v Taza (Taza).[46] Her contention was that that was a case involving what may be thought a more typical example of offending of the type with which s 24G(2) is concerned. Taza was a case where a registered land agent sold a residential property to an entity controlled by his brother. The vendor knew the agent was selling the property to the agent’s brother. The sale price as paid was agreed by the vendor. There was no suggestion that it was not a fair market price. The day after settlement, the agent advertised the property for sale at a considerably greater price than that for which it was bought. Shortly thereafter, after undertaking some cleaning and repair work, the property was sold for almost $50,000 more than it was purchased. The Commissioner instituted disciplinary proceedings under s 47 of the Land Agents Act. The agent conceded that there was proper cause for taking disciplinary action against him in that he should not have acted for the vendor when the purchaser was an entity controlled by his brother. That was accepted by the Commissioner. That is, the basis for taking disciplinary action involved nothing in the way of sharp practice or the taking advantage of a vulnerable person. The agent also explained that he did not seek an exemption from the Commissioner because he did not regard himself as having an interest in the purchase. His Honour Judge Brebner reprimanded the agent and fined him $8,000. [46][2011] SADC 192.