Chief Executive, Department of Justice and Attorney General v Hiltdeen Pty Ltd (under external administration)

[2012] QCAT 430

CITATION: Chief Executive, Department of Justice and Attorney General v Hiltdeen Pty Ltd (under external administration) and Anor [2012] QCAT 430

PARTIES:	Chief Executive, Department of Justice and Attorney General
v
Hiltdeen Pty Ltd (under external administration) Sharyn Rose Lloyd

APPLICATION NUMBER: OCR242-12

MATTER TYPE: Occupational regulation matters

HEARING DATE: On the papers

HEARD AT: Brisbane

DECISION OF: Peta Stilgoe, Senior Member

DELIVERED ON: 10 September 2012

DELIVERED AT: Brisbane

ORDERS MADE:     

1.    Hiltdeen Pty Ltd and Sharyn Rose Lloyd are reprimanded.

2.    Hiltdeen Pty Ltd is disqualified from holding a licence or registration certification under the Property Agents and Motor Dealers Act 2000 for a period of ten years.

3.    Sharyn Rose Lloyd is disqualified from being an Executive Officer of a corporation that holds a licence or registration certificate under the Property Agents and Motor Dealers Act 2000 and prohibited from being directly or indirectly involved with the management of any trust fund of any agency or organisation in which she is employed for a period of 10 years.

4.    If, in that period of ten years, Sharyn Rose Lloyd breaches any provision of PAMDA, her licence will be automatically cancelled for the balance of the 10 year period.

5.    Sharyn Rose Lloyd shall pay to the Chief Executive Department of Justice and Attorney General a fine of $5,000 by 1 December 2012.

CATCHWORDS:

REAL ESTATE AGENT – where commission pre-drawn from trust – where trust money banked to business account – where overpaid commission – where cheque drawn on trust without authority – where agent resolved not to act as principal – where agent’s husband seriously ill

Property Agents and Motor Dealers Act 2000, ss 10, 496

Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
DTFTWID v Cornwell [2005] CCT X007 – 05
Chief Executive DEEDI v Schellaars [2010] QCAT 477
Chief Executive DTFTWID v Sullivan [2004] QCCTPAMD 8
Chief Executive DTFTWID v Filippini [2006] QCCTPAMD 41
Chief Executive, Office of Fair Trading v Enmore  Real Estate and Property Management Services Pty Ltd (Under External Administration) & Dodds [2009] QCCTPAMD 52
The Chief Executive, DTFTWID v McNamara [2005] QCCTPAMD 11
The Chief Executive, Department of Justice and Attorney General v DJ Stringer Property Services Pty Ltd and Anor [2012] QCAT 27

APPEARANCES and REPRESENTATION (if any):

This matter was heard and determined on the papers in accordance with section 32 of the Queensland Civil and Administrative Tribunal Act 2009.

REASONS FOR DECISION

1. Ms Lloyd was the sole director of Hiltdeen Pty Ltd, a real estate agency which traded under the name Livinin Prestige Properties.  Both Ms Lloyd and the company were licensed real estate agents.

2. The Chief Executive has referred Ms Lloyd and Hiltdeen to the tribunal for disciplinary proceedings under s 496 of PAMDA asserting that they are not suitable persons to hold a licence and/or that they have been carrying on business in an unprofessional way.

3. Because she is the sole director of Hiltdeen, Ms Lloyd’s actions are also the actions of the company.  Ms Lloyd has admitted that she drew commissions from trust prior to settlement of the relevant transactions on seven occasions.  Ms Lloyd pre-drew a total of $142,112.50 from trust.  She has also admitted that she banked $53,000 into the business account instead of the trust account and drew a cheque for $42,025.00 from trust when she had no authority to do so.  Ms Lloyd has also admitted that she overpaid commission on one occasion although I note that the amount of overpayment was only $65.  Finally, Ms Lloyd admits that she failed to submit a trust account audit when required.

4. Ms Lloyd and the company have been convicted in the Magistrates Court of a number of offences under the Property Agents and Motor Dealers Act 2000.  No conviction was recorded.  The company was fined $15,000 and Ms Lloyd was fined $10,000.  Both were ordered to pay costs of $75.90.

5. Based on Ms Lloyd’s admissions, and the convictions in the Magistrates Court, I am satisfied that disciplinary proceedings are appropriate.

Penalty

1. One of the objects of PAMDA is to protect consumers against particular undesirable practices associated with the promotion of residential property.[1]  The objects of the Act are achieved mainly through: ensuring only suitable persons are licensed[2]; ensuring that those who carry on business maintain close personal supervision of the way the business is carried on[3]; and providing protection for consumers in their dealings with licensees.[4]

   [1] Section 10(2) PAMDA.

   [2] Section 10(3)(a)(i) PAMDA.

   [3] Section 10(3)(a)(ii) PAMDA.

   [4] Section 10(3)(b)(i) PAMDA.

2. The Chief Executive seeks the following penalty:

a)A reprimand.

b)That both Ms Lloyd and the company be disqualified from holding any form of licence, or being an executive officer of a corporation that holds any form of licence, for a period of ten years.

c)Ms Lloyd be prohibited from being an executive officer of a corporation which holds any form of licence issued under the Act for a period of ten years.

d)Ms Lloyd pay a fine of $2,000.

1. The Chief Executive has referred me to Chief Executive DTFTWID v Cornwell[5] and Chief Executive DEEDI v Schellaars.[6]

   [5]        [2005] CCT X007 - 05.

   [6] [2010] QCAT 477.

2. Ms Lloyd says that the appropriate penalty should be a formal reprimand and a fine of no more than $1,500 plus costs.  She has referred me to: Chief Executive DTFTWID v Sullivan[7]; Chief Executive DTFTWID v Filippini;[8] The Chief Executive, Office of Fair Trading v Enmore  Real Estate and Property Management Services Pty Ltd (Under External Administration) & Dodds;[9] The Chief Executive, DTFTWID v McNamara;[10] and The Chief Executive, Department of Justice and Attorney General v DJ Stringer Property Services Pty Ltd and Anor[11].

   [7]        [2004] QCCTPAMD 8.

   [8]        [2006] QCCTPAMD 41.

   [9]        [2009] QCCTPAMD 52.

   [10]        [2005] QCCTPAMD 11.

   [11] [2012] QCAT 27.

[10]  Mr Sullivan was convicted in the District Court of offences involving dishonesty and, at the time of the proceeding was an undischarged bankrupt.  He was prohibited from holding a licence for a period of 15 years.  Ms Lloyd says that she has not been convicted of any offence involving dishonesty and no conviction has been recorded against her.  That is true.  Ms Lloyd says that her penalty should be less than that given to Mr Sullivan.  I agree.

[11]  Filippini is not helpful.  The basis of the disciplinary action was very different and did not involve a direct misapplication of trust money.  If there is any similarity between the two cases, it is that, like Ms Filippini, Ms Lloyd continues to argue that her breach is a technical breach and that she has not been dishonest.

[12]  Mr Dodds was permanently prohibited from holding a licence.  Ms Lloyd says that Mr Dodds’ position is very different in that he had no contractual right to withdraw funds from trust, he did not admit the charges and he did not accept fault.

[13]  I do not consider Stringer to be helpful to Ms Lloyd.  Mr Stringer had no personal knowledge that his employee was drawing advance management fees whereas Ms Lloyd has admitted that she was the person who was responsible for the breaches of the Act.

[14]  Mr McNamara was simply reprimanded and fined for failing to account for trust money.  The learned Member stated that such conduct would normally warrant a cancellation of the licence.  The learned Member did not cancel Mr McNamara’s licence only because there was evidence that Mr McNamara was simply following established practice in the holiday letting industry.  Ms Lloyd cannot point to any industry practice to justify her actions.

[15]  One of the tests in determining whether Ms Lloyd is a fit and proper person to hold a licence is whether the improper conduct is likely to occur[12].  Ms Lloyd’s submissions in that regard are that these events were a lapse of character that occurred during a stressful period in business when her husband had been extremely ill.  She says that she is remorseful for her conduct and capable of reform.  She has decided not to be a principal in any real estate business and has withdrawn her application to maintain such a licence.

[12]        Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 380.

[16]  Ms Lloyd says that she will not be able to gain any other employment.  She says that, without employment, she will not be able to support her husband, who is unable to work.

[17]  I am not impressed by Ms Lloyd’s argument that she was simply “robbing Peter to pay Paul” due to difficult economic conditions.  Many real estate agents on the Gold Coast faced similar conditions and neither the Chief Executive nor the tribunal should condone the use of trust money to prop up a failing business.

[18]  I am also not impressed by Ms Lloyd’s argument that she will not have any other means of earning an income because she has no other relevant qualifications.  The tribunal commonly disqualifies licensees even though they have no other way of earning an income.  As I have already observed, the object of PAMDA is to protect consumers and regulate the industry, not to ensure that licensees can pay their bills.

[19]  Ordinarily, conduct of this kind would attract a substantial period of disqualification, of the order of 10 years.  However, Ms Lloyd’s decision not to work as a principal in any real estate business is a positive step to ensure that she does not engage in improper conduct in the future.  It is implicit in the Chief Executive’s submissions that this is an option that is within contemplation, although not ideal.  Because of her previously exemplary record, and the particular circumstances of her husband’s illness, in this instance I will not prohibit Ms Lloyd from working in the industry.  Instead, I will order that Ms Lloyd be prohibited from being directly or indirectly involved with the management of any trust fund of any agency or organisation in which she is employed for a period of 10 years.  I further order that, if, in that 10 year period, Ms Lloyd breaches any provision of PAMDA, her licence will be automatically cancelled for the balance of the 10 year period.

[20]  As Ms Lloyd will be able to continue in employment, she should pay a fine.  The Chief Executive has submitted that a fine of $5,000 is appropriate, and in line with the decision in Cornwell and Schellaars.  I agree.  I also agree that there is no point in making any money order against the company.

Orders

1. Hiltdeen Pty Ltd and Sharyn Rose Lloyd are reprimanded.

2. Hiltdeen Pty Ltd is disqualified from holding a licence or registration certification under the Property Agents and Motor Dealers Act 2000 for a period of ten years.

3. Sharyn Rose Lloyd is disqualified from being an Executive Officer of a corporation that holds a licence or registration certificate under the Property Agents and Motor Dealers Act 2000 and prohibited from being directly or indirectly involved with the management of any trust fund of any agency or organisation in which she is employed for a period of 10 years.

4. If, in that period of ten years, Sharyn Rose Lloyd breaches any provision of PAMDA, her licence will be automatically cancelled for the balance of the 10 year period.

5. Sharyn Rose Lloyd shall pay to the Chief Executive Department of Justice and Attorney General a fine of $5,000 by 1 December 2012.