COKIC and EXECUTIVE DIRECTOR, CONSUMER PROTECTION AS DELEGATE OF THE CHIEF EXECUTIVE OFFICER, DEPARTMENT OF ENERGY, MINES, INDUSTRY REGULATION AND SAFETY

[2025] WASAT 76

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL

ACT: REAL ESTATE AND BUSINESS AGENTS ACT 1978 (WA)

CITATION:   COKIC and EXECUTIVE DIRECTOR, CONSUMER PROTECTION AS DELEGATE OF THE CHIEF EXECUTIVE OFFICER, DEPARTMENT OF ENERGY, MINES, INDUSTRY REGULATION AND SAFETY [2025] WASAT 76

MEMBER:   MR J O'SULLIVAN, SENIOR MEMBER

HEARD:   DETERMINED ON THE DOCUMENTS

DELIVERED          :   23 JULY 2025

FILE NO/S:   VR 39 of 2024

VR 53 of 2024

BETWEEN:   ALEXANDER COKIC

Applicant

AND

EXECUTIVE DIRECTOR, CONSUMER PROTECTION AS DELEGATE OF THE CHIEF EXECUTIVE OFFICER, DEPARTMENT OF ENERGY, MINES, INDUSTRY REGULATION AND SAFETY

Respondent

Catchwords:

Real Estate Agents - Fidelity Account - Summary dismissal - Defalcation - Misuse or misappropriation of funds - Whether applicant has reasonably arguable case

Legislation:

Competition and Consumer Act 2010 (Cth)
Fair Trading Act 1987 (WA)
Firearms Act 1973 (WA)
Property Law Act 1969 (WA)
Real Estate and Business Agents Act 1978 (WA), s 4, s 23(1), s 23(2), s 23(2)(a), s 23(2)(b), s 23(2)(c), s 23(2)(d), s 23(2)(e), s 56, s 70(5), s 71(2), s 75(a), s 75(b), s 83(1), s 88, s 100A(1)(a), s 100A(1)(b), s 104(b), s 116, s 116(1), s 117, s 117(2), s 122, Pt III, Pt IV, Pt VI
Real Estate and Business Agents and Sales Representatives Code of Conduct 2016 (WA), s 10, Pt 2
Residential Tenancies Act 1987 (WA)
State Administrative Tribunal Act 2004 (WA), s 27(2), s 29(1), s 29(3), s 32(2)(b), s 47, s 60(2)

Result:

VR 39 of 2024 and VR 53 of 2024 are dismissed

Category:    B

Representation:

Counsel:

Applicant	:	N/A
Respondent	:	N/A

Solicitors:

Applicant	:	N/A
Respondent	:	Department of Energy, Mines, Industry Regulation and Safety - Legal Services Directorate

Case(s) referred to in decision(s):

Aderemi and TAFE International WA [2024] WASAT 141

Ambrus and Churches of Christ Homes & Community Services Incorporated [2006] WASAT 141

Armstrong v Commissioner for Consumer Protection [2014] WASCA 71

Chau v Real Estate & Business Agents' Supervisory Board of Western Australia [2004] WADC 7

Cotsvend Pty Ltd v Real Estate and Business Agents Supervisory Board (2002) 29 SR (WA) 322

Daly v Sydney Stock Exchange Ltd (1986) 160 CLR 371

Ellis and Director General of the Department of Transport [2011] WASAT 142

Fagan v Minister for Corrective Services [2024] WASCA 167

Hajac Nominees Pty Ltd v Real Estate & Business Agents Supervisory Board (1999) 22 SR (WA) 267

Laurent and Commissioner of Police [2009] WASAT 254

Legal Profession Complaints Committee and Khosa [2019] WASAT 143

Mantova Holdings Pty Ltd and Commissioner for Consumer Protection [2013] WASAT 47

Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24

Re Real Estate and Business Agents Supervisory Board; Ex parte Cohen [1999] WASCA 47; (1999) 21 WAR 158

Re Rules of the Supreme Court 1971 (WA); Ex Parte Gates [2018] WASC 213

Real Estate and Business Agents Supervisory Board v Cohen [2004] WASCA 19; (2004) 28 WAR 475

Wilson and Commissioner for Consumer Protection [2012] WASAT 200

REASONS FOR DECISION OF THE TRIBUNAL:

Introduction

1. The applicant has lodged two applications seeking a review of decisions made by the respondent rejecting his claims for financial compensation from the Real Estate and Business Agents Fidelity Guarantee Account (Fidelity Account) pursuant to s 116 of the Real Estate and Business Agents Act 1978 (WA) (REBA Act).

2. VR 39 of 2024 is primarily concerned with the conduct of Trenfocus Pty Ltd (Trenfocus) with whom the applicant had an agreement to manage his rental property in Australind.  The applicant also contends Trenfocus was ultimately responsible for the delay in selling the property.  VR 53 of 2024 is primarily concerned with Robian Pty Ltd (Robian) with whom the applicant had an agreement to manage and sell his rental property in Baldivis.

3. Section 116 of the REBA Act provides that compensation is only payable in the event of and to the extent of any defalcation by a licensee. Defalcation involves some misapplication or misuse of money or property entrusted to a person. Section 4 of the REBA Act says that defalcation by a licensee includes criminal or fraudulent conduct.

4. On 30 January 2025 the respondent lodged applications under s 47 of the State Administrative Tribunal Act 2004 (WA) (SAT Act) seeking the dismissal of both proceedings on the basis they are frivolous, vexatious, misconceived, lacking in substance, being used for an improper purpose or are an abuse of process. 

5. While the applicant's claims allege a range of failures on behalf of Trenfocus and Robian, none of the factual allegations involve the misapplication and misuse of money or property and therefore do not give rise to an arguable case that the conduct of either Trenfocus or Robian involves defalcation.

6. In addition to the claims against Trenfocus and Robian the applicant has also made a series of allegations against a range of other entities. Many of these allegations are not matters that fall within the Tribunal's review jurisdiction under the REBA Act. Nor is it reasonably arguable that these allegations constitute defalcation on the part of Trenfocus, Robian or the entity concerned.

7. It follows that the applications can variously be described as frivolous and misconceived as they disclose no reasonably arguable cause of action and therefore ought to be dismissed under s 47 of the SAT Act.

The documents

1. The dismissal applications are to be determined on the documents according to orders made by the Tribunal on 12 February 2025 (see s 60(2) of the SAT Act). Given the similarities between both review applications and the fact that there are many documents common to both applications, I decided to deal with them together.

2. In the course of both proceedings the applicant lodged a large number of documents, many of which I found not to be relevant to the issues I am required to determine.

3. The primary documents to which I have had regard are as follows:

   (1)Applicant's Trenfocus SIFC;

   (2)Applicant's Robian SIFC;

   (3)Respondent's SIFC, VR 39 of 2024 (Trenfocus);

   (4)Respondent's SIFC, VR 53 of 2024 (Robian);

   (5)Applicant's Statement of Evidence, 24 July 2024;

   (6)Applicant's Statement of Intended Evidence, 20 November 2024;

   (7)Applicant's Statement of Intended Evidence, Southern Communities Advocacy Legal Education Service (SCALES), 20 November 2024;

   (8)Applicant's Statement of Evidence, 30 January 2025;

   (9)Applicant's Statement of Evidence (Tronox), 30 January 2025;

   (10)Applicant's Affidavit, 29 July 2024;

   (11)Affidavit of Mr Steven Morganti, 30 January 2025;

   (12)Respondent's Submissions for Dismissal of the Proceedings, VR 39 of 2024; and

   (13)Respondent's Submissions for Dismissal of the Proceedings, VR 53 of 2024.

4. Where there has been a need to refer to documents other than those set out above, I have identified the document in question either in the text or as a footnote.

The legal principles

1. The relevant legal principles applicable to an application for what is in effect summary dismissal are well settled and were recently set out by Senior Member Evans-Bonner:[1]

   (a)The Tribunal does not have formal pleadings because it is not a court of record. The informality of the Tribunal's procedures is set out in s 32(2)(b) of the SAT Act which provides that 'the Tribunal … is to act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms'. Thus, although the power to dismiss a proceeding at an interlocutory stage is analogous to the power of a court to summarily dismiss a proceeding where the pleadings fail to disclose any reasonable cause of action, caution should be exercised in dismissing a proceeding in the Tribunal before the substantive hearing. That is particularly so when a party is self-represented and does not have the benefit of legal representation or training which would enable them to precisely set out their claim in writing.

   (b)When considering whether a proceeding should be dismissed, the Tribunal should assume that all the factual assertions made by the applicant would be made out at a final hearing, and consider whether the proceeding is frivolous, vexatious, misconceived or lacking in substance from that perspective. If there are any questions of fact to be determined, or if factual issues may be affected by evidence in possession of a party that has not yet been filed, it may not be appropriate to dismiss the proceeding under s 47 of the SAT Act at an interlocutory stage.

   (c)The decision to dismiss should only be made after very careful consideration, and in circumstances where it is evident that the applicant has no reasonable prospect of success in the proceeding.  To allow a proceeding to continue when it is evident the applicant has no reasonable prospects of succeeding at a substantive hearing would create a substantial prejudice to the respondent.

   [1] Aderemi and TAFE International WA [2024] WASAT 141 [48] referring to Ellis and Director General of the Department of Transport [2011] WASAT 142 [63] and Laurent and Commissioner of Police [2009] WASAT 254 (Laurent).

2. While the Tribunal is mindful of a party's desire to right what they perceive as wrongs and air their grievances at a substantive hearing, the Tribunal must be fair to both sides.  Ultimately, if the proceeding has no prospect of success, the temptation to let an applicant have their day in the Tribunal is to be resisted.[2]

   [2] Ambrus and Churches of Christ Homes & Community Services Incorporated [2006] WASAT 141 (Ambrus) [44] - [45].

3. With respect to its exercise at an interlocutory stage, the power in s 47 of the SAT Act has been viewed as analogous to the power of courts to summarily dismiss a proceeding when the pleadings fail to disclose any reasonable cause of action. Further, the principles applicable to exercise of a power of summary dismissal by a court have been held to be applicable to the exercise of the power in s 47.[3]

   [3] Laurent [21].

4. In Ambrus,[4] Chaney DCJ (as he then was) observed that in order to summarily dismiss a proceeding, it should be demonstrated that it is so obviously untenable that it cannot possibly succeed or is manifestly groundless or that it discloses a case which the court is satisfied cannot succeed.

   [4] Ambrus [8].

5. I will now briefly deal with the terms used in s 47 of the SAT Act.

Frivolous or vexatious

1. In Re Rules of the Supreme Court 1971 (WA); Ex Parte Gates [2018] WASC 213 (Gates) at [30] - [33] Vaughan J (as he then was) discussed the meaning of frivolous or vexatious:

   30In the context of an application to strike out a claim or pleading the terms 'frivolous' and 'vexatious' have often been used interchangeably.  For example, an action is frivolous if it is obviously (or plainly) unsustainable and an abuse of the process of the court.  It may for the same reason be categorised as vexatious.

   31An action is frivolous when it is not worthy of serious consideration, is insupportable in law, discloses no cause of action or is groundless.  So too a matter that is without substance or is fanciful is frivolous.  The term is apt to describe proceedings in which the plaintiff's claim is so obviously untenable that it cannot possibly succeed or in which there is no serious question to be tried.  An action is vexatious if it has no reasonable prospects of success.  The term has also been said to be apt to describe an action which is a sham and which cannot possibly succeed.

   32Apart from the hopeless case - those that are obviously untenable or manifestly groundless - an action may be vexatious due to the motive of the litigant.  Proceedings are vexatious if they are instituted with the intention of annoying or embarrassing the person against whom they are brought.  So too proceedings are vexatious if they are brought for collateral purposes.

   33A proceeding will also be vexatious if it is productive of serious and unjustified trouble and harassment.

   (Footnotes omitted)

2. An action is said to be vexatious if it has no reasonable prospect of success or is a sham which cannot possibly succeed.  In addition to those cases that are obviously untenable, an application may be vexatious due to the motive of the litigant.  Proceedings are vexatious if they are instituted to annoy or embarrass the other party or if they are brought for a collateral purpose.[5]

Misconceived or lacking in substance

[5] Gates [31] - [33]; Legal Profession Complaints Committee and Khosa [2019] WASAT 143 (Khosa) [19].

1. The term misconceived refers to a misunderstanding of legal principle.  Lacking in substance on the other hand denotes an untenable proposition of law or fact.[6]

Improper purpose

[6] Laurent [23]; Aderemi [52].

1. According to the Macquarie Dictionary Online, 'improper' means 'not proper; not strictly belonging, applicable, or right; not in accordance with propriety of behaviour, manners; and unsuitable or inappropriate, as for the purpose or occasion.[7]

   [7] Khosa [20]; Aderemi [55].

2. The word 'improper' is descriptive of the purpose.  It follows that a person, by choosing to bring proceedings, is in a position to use the proceedings for a purpose which is improper.

3. What constitutes a purpose which is not proper, unsuitable or inappropriate must be assessed by reference to the statutory context, which in proceedings in the Tribunal will be the enabling Act which invests jurisdiction in the Tribunal to determine the proceedings.[8]

The Tribunal's jurisdiction in review proceedings

[8] Khosa [21]; Aderemi [55].

1. The Tribunal's jurisdiction is derived from the enabling Act, in this case the REBA Act, and the SAT Act.

2. Section 23(1) of the REBA Act provides that any person aggrieved by a reviewable decision may apply to the Tribunal for a review of the decision.

3. A 'person aggrieved' is defined in s 23(2) to mean:

   (a)a person whose licence or triennial certificate is affected by a reviewable decision or who, under Part III, applies for the grant of a licence or applies for the renewal of a triennial certificate;

   (b)a person whose certificate of registration is affected by a reviewable decision or who, under Part IV, applies for the grant or renewal of a certificate of registration;

   (c)a licensee who has, or seeks, the Commissioner's approval under section 56 to carry on business pursuant to a franchising agreement or another party to the agreement;

   (d)a person affected by a decision of the Commissioner under Part VI;

   (e)a person claiming against, or seeking the leave of the chief executive officer to commence an action in relation to, the Fidelity Account;

4. A 'reviewable decision' is defined in s 23(2) to mean:

   (a)a decision of the Commissioner under Part III other than a determination of the form in which an application is to be made;

   (b)a decision of the Commissioner under Part IV other than a determination of the form in which an application is to be made;

   (c)a decision of the Commissioner under s 56;

   (d)a decision of the Commissioner under Part VI; or

   (e)a decision of the chief executive officer under section 116 or 117.

5. Part III of the REBA Act concerns applications in relation to the licensing of agents and sales representatives respectively.

6. Section 56 deals with a licensee's ability to carry on business pursuant to a franchising agreement.

7. Part IV relates to the compliance obligations imposed in relation to agents' trust accounts.

8. As noted earlier, s 116 concerns claims made against the Fidelity Account.

9. The Tribunal's powers in exercising its review jurisdiction include those functions and discretions exercisable by the decision-maker in making the reviewable decision (see s 29(1) of the SAT Act).

10. The Tribunal may affirm, vary or set aside (including substituting its own decision or sending the matter to the decision-maker for reconsideration) the decision being reviewed, including making any order the Tribunal considers appropriate (see s 29(3) of the SAT Act).

11. While the Tribunal is empowered to make any order it considers appropriate, even an apparently unfettered power is constrained by the subject matter, scope and purpose of the legislation.[9] The evident purpose of the review is to produce the correct and preferable decision as at the time of the decision upon review (see s 27(2) of the SAT Act).

    [9] Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 per Mason J at page 40.

12. The Tribunal is to hear the matter afresh.  The applicant is not required to demonstrate any error on the part of the original decision­maker.

13. As will become apparent later in these reasons the powers available to the Tribunal upon the review of a decision under the REBA Act are critical in determining not only whether the applicant has an arguable case but whether the Tribunal possesses the power to make some of the orders the applicant seeks.

The REBA Act

1. Section 116 of the REBA Act sets out the purpose of the Fidelity Account as follows:

   (1)The Fidelity Account is to be held and applied to reimburse a person for the person's pecuniary or property loss to the extent of the defalcation of —

   (a)a licensee during any period when the licensee was the holder of a current triennial certificate; or

   (b)a person who ceased to be licenced or to hold a triennial certificate, if:

   (i)the defalcation occurred during the period of six months immediately following the day on which the person ceased to be licenced or the holder of the triennial certificate; and

   (ii)the chief executive officer considers that it is just and reasonable in the circumstances of the claim.

2. A 'licensee' is defined in s 4 of the REBA Act to mean a 'person' licensed under this Act.

3. Defalcation by a licensee is defined in s 4 of the REBA Act:

   includes criminal or fraudulent conduct —

   (a)of a licensee; or

   (b)of any one or more of the servants or agents of the licensee; or

   (c)of a person who is a partner in the business of the licensee; or

   (d)where the licensee is a firm and a body corporate is a partner in the firm or where the licensee is a body corporate, of any one or more of the directors, officers, servants, or agents of the body corporate,

   in the course of the business of the licensee and from which arises pecuniary loss or loss of property to any other person.

4. Section 117 of the REBA Act deals with claims against the Fidelity Account and sets out certain limitations:

   117.Claims against account; recovery from account

   (1)The chief executive officer may receive and, subject to section 116(2), settle any claim against the Fidelity Account at any time after the defalcation in respect of which the claim arose has occurred, but no person is entitled, without the leave of the chief executive officer, to commence any action in relation to the Fidelity Account, unless the chief executive officer has disallowed his claim and unless and until the claimant has exhausted all relevant rights of action and other legal remedies available against the defaulting licensee or any other person in respect of the loss suffered by the claimant.

   (2)A person is not entitled to recover from the Fidelity Account an amount greater than the balance of the loss suffered by him after deducting from the total amount of his loss, the amount or value of all money or other benefits received or receivable by him from any source other than the Fidelity Account in reduction of his loss, including any benefits received by reason of services rendered or payments made by the defaulting licensee.

   (3)No amount shall be charged or be chargeable to the Fidelity Account as interest on the amount of any judgment obtained or of any claim admitted against the Fidelity Account.

   (4)No right of action lies in relation to the Fidelity Account in respect of any loss suffered by any person by reason of any defalcation by a licensee at any time after the claimant has received a notice in writing from the chief executive officer warning him against the employment or continued employment of that licensee which notice the chief executive officer is hereby empowered to send.

   (5)No right of action lies in relation to the Fidelity Account in respect of any loss suffered by the spouse or de facto partner of a licensee by reason of any defalcation by that licensee, or in respect of any loss suffered by any licensee by reason of any defalcation in the course of the licensee's business by any one or more of the persons in the class of persons specified in the interpretation defalcation by a licensee in section 4.

What is defalcation?

1. Central to this case is the meaning of the term 'defalcation'. 

2. In Daly v Sydney Stock Exchange Ltd (Daly), Gibb CJ referring to the Oxford English Dictionary and the Macquarie Dictionary Online observed that defalcation means:[10]

   •'a monetary deficiency through breach of trust by one who has the management or charge of funds';

   •'misappropriation of money etc held by a trustee or other fiduciary'; and

   •'wrongful diminution or reduction of the amount of moneys held in trust or in a fiduciary capacity'.

   [10] Daly v Sydney Stock Exchange Ltd (1986) 160 CLR 371 at 380.

3. A 'fiduciary' is someone who is required to act for the benefit of another person on all matters within the scope of their relationship, one who owes to another the duties of good faith, loyalty, due care and disclosure.  It includes someone who must exercise a high standard of care in managing another's money or property.[11]

   [11] Black's Law Dictionary, 12^th Edition, page 766.

4. A 'trustee' is someone who stands in a fiduciary or confidential relation to another, especially one who having legal title to property, holds it in trust for the benefit of another and owes a fiduciary duty to that beneficiary.[12]

   [12] Black's Law Dictionary, 12^th Edition, page 1831.

5. In Mantova Holdings Pty Ltd and Commissioner for Consumer Protection[13] (Mantova) the Tribunal set down the following principles concerning the operation of s 116 and s 117 of the REBA Act:

   •the ordinary meaning of the word 'defalcation' is essentially concerned with some misapplication or misuse of money or property entrusted to a person;

   •the Fidelity Account does not operate as an indemnifier of last resort in relation to any loss suffered by any person as a result of any criminal or fraudulent conduct (which includes any breach of the REBA Act, or the Real Estate and Business Agents and Sales Representatives Code of Conduct 2016 (WA) (Code of Conduct) provided the conduct occurs in the course of the business of the licensee; and

   •the inclusion of 'criminal or fraudulent conduct' by certain persons in the course of the business of the licensee does not extend the meaning of defalcation to conduct which might be criminal or fraudulent but does not relate to money or property misapplied or misused by the licensee.  Moreover, neither Hajac Nominees Pty Ltd v Real Estate & Business Agents Supervisory Board (Hajac),[14] Cotsvend Pty Ltd v Real Estate & Business Agents Supervisory Board (Cotsvend),[15] or Chau v Real Estate & Business Agents' Supervisory Board of Western Australia (Chau),[16] are authority for any contrary proposition.

   [13] Mantova Holdings Pty Ltd and Commissioner for Consumer Protection [2013] WASAT 47 at [24] - [26].

   [14] Hajac Nominees Pty Ltd v Real Estate & Business Agents Supervisory Board (1999) 22 SR (WA) 267.

   [15] Cotsvend Pty Ltd v Real Estate and Business Agents Supervisory Board (2002) 29 SR (WA) 322.

   [16] Chau v Real Estate & Business Agents' Supervisory Board of Western Australia [2004] WADC 7.

6. Wilson and Commissioner for Consumer Protection (Wilson)[17] is instructive as to what the term 'defalcation' means in a practical sense.

   [17] Wilson and Commissioner for Consumer Protection [2012] WASAT 200.

7. In Wilson the applicants contracted to purchase proposed strata lots off the plan. At that time the vendors were yet to complete the purchase of the land to be subdivided. The contracts contained a special condition permitting the deposits to be released to the vendor for the purpose of acquiring and developing the land to be subdivided. That condition was inconsistent with s 70 of the Strata Titles Act 1985 (WA) (ST Act) which required that deposits be held in trust until issue of titles for the proposed strata lots.

8. The applicants' deposits were placed in a trust account of a settlement agent who then released the funds to the owners of the land.  The vendors completed the purchase of the land, but it was never subdivided, the vendors having gone into liquidation.  The applicants' deposits were never returned.

9. The applicants made a claim on the settlement agent's fidelity guarantee on the basis that the deposits should not have been released contrary to the requirements of the ST Act and that the special condition was of no effect.

10. The Tribunal held that the payments out of the settlement agents trust account were in breach of the terms upon which the settlement agent held the funds in trust.  Whilst those payments did not constitute fraudulent or criminal conduct, they amounted to defalcation as explained in Daly.

11. Accordingly, the applicants' deposits were reimbursed from the settlement agents fidelity guarantee account.  However, the applicants' claims for interest were refused.[18]

    [18] Wilson [109].

12. Wilson went on appeal in Armstrong v Commissioner for Consumer Protection.[19]Martin CJ (with whom Newnes and Murphy JJA agreed) endorsed the following principles from Re Real Estate and Business Agents Supervisory Board; Ex parte Cohen (Cohen No 1)[20] and Real Estate and Business Agents Supervisory Board v Cohen (Cohen No 2):[21]

    (1)where a claim for reimbursement arises from a defalcation by way of misappropriation or misapplication of trust moneys, because the claim is limited 'to the extent of the defalcation', it is limited to the amount of the trust moneys misapplied or misappropriated, and does not extend to losses consequential upon the misappropriation;

    (2)reference to recovery of the loss suffered by the claimant in s 117(2) of the REBA Act does not provide an entitlement to reimbursement for consequential losses or losses other than the trust money misapplied or misappropriated; and

    (3)the statutory claim for reimbursement from the Fidelity Account is not analogous to a common law claim for damages.

    [19] Armstrong v Commissioner for Consumer Protection [2014] WASCA 71.

    [20] Re Real Estate and Business Agents Supervisory Board; Ex parte Cohen [1999] WASCA 47; (1999) 21 WAR 158.

    [21] Real Estate and Business Agents Supervisory Board v Cohen [2004] WASCA 19; (2004) 28 WAR 475.

13. Ordinarily pecuniary loss might include a loss by way of interest foregone or other elements of loss of an indirect or consequential kind. As a matter of commonsense, losses of this kind can be seen to flow from or result from the defalcation. However, there are important words of limitation in s 116(1) of the REBA Act. Reimbursement may be 'only to the extent of the defalcation of the licensee'. The extent of the reimbursement where one is dealing with pecuniary loss, may not exceed the total sum taken or lost as a result of the criminal or fraudulent conduct of the licensee.[22] 

    [22] Cohen No 2 [32].

14. A further limitation upon the capacity to recover from the Fidelity Account emerges from s 117(2) of the REBA Act. All payments made by the defaulting licensee to the claimant and moneys otherwise recoverable is to be deducted from the amount the claimant may recover from the Fidelity Account.[23]

    [23] Cohen No 2 [33].

The applicant's case

1. Ascertaining the applicant's case has proved a difficult task.  Notwithstanding there appears to be no application to amend, the applicant has continued to raise new issues when lodging his statement of issues, facts and contentions (SIFC) and in other documents he has filed. 

2. To further complicate matters, the applicant has lodged a number of documents that are unrelated to any claim from the Fidelity Account.  Some of these documents appear to relate to workers compensation and Fair Work claims against his former employer, Tronox Management Pty Ltd and a potential conflict of interest with Department of Energy, Mines, Industry Regulation and Safety (DEMIRS).[24]  The applicant also lodged a document titled Radiological Impacts of Proposed Site Rehabilitation for Dalyellup Trailing Facility: 28 April 2011 and the 2019 - 20 Energy Price Limits Review - Final Report Public. 

   [24] Applicant's Statement of Evidence (Tronox), 30 January 2025.

3. Given the caution required in considering an application for dismissal under s 47 of the SAT Act, I have done my best to identify whether the applicant has a reasonable cause of action to be compensated from the Fidelity Account in accordance with the REBA Act.

The review applications

1. VR 39 of 2024 calls for the Tribunal to set aside a decision made by the respondent in administering the Fidelity Account dismissing a claim for $45,965.99 in relation to the conduct of Robian (Order 1) and $131,101.15 in relation to the conduct of Trenfocus (Order 2).

2. The applicant also seeks a review of the performance of the Commissioner for Consumer Protection concerning the effectiveness of administration and management duties pertaining to the enforcement of the REBA Act and the Residential Tenancies Act 1987 (WA) (RT Act) (Order 3).

3. In a subsequent application (VR 53 of 2024), Order 1 from VR 39 of 2024 concerning Robian is repeated, as is Order 3 (now Order 2) which seeks a review of the administration of the REBA Act and the RT Act by the Commissioner for Consumer Protection.

4. A further order (Order 3) concerns a claim for compensation as a consequence of Robian and the Commissioner for Consumer Protection breaching the applicant's human rights and those of his mother.

5. The basis for the orders the subject of VR 53 of 2024 is said to be:

   The delay of sale 13 Renshaw Link, Baldivis directly impacted both parties as a simultaneous settlement was required to acquire Doria Giuffre's [the applicant's mother's] home as Westpac was nearing foreclosure.

6. Notwithstanding that VR 39 of 2024 sought orders relating to both Trenfocus and Robian, the applicant's SIFCs filed in each matter appear to have proceeded on the basis that VR 39 of 2024 concerns Trenfocus whereas VR 53 of 2024 deals with Robian.

7. Furthermore, despite there being no application to amend either application, the respective SIFCs, apart from being difficult to follow, advance claims against a number of entities who are not parties to either application and seek monetary amounts well in excess of that initially claimed. The applicant also includes alternatives to the REBA Act as the basis for the payment of damages in relation to his claims which are outside the jurisdiction of the Tribunal.

The Trenfocus SIFC

1. The applicant makes the following factual assertions in relation to Trenfocus:

   (a)Trenfocus holds a real estate agents' licence and a triennial certificate and trades under the business name Ray White Bunbury.[25]

   [25] Applicant's SIFC (Trenfocus), page 18.

   (b)On 8 July 2020, the applicant appointed Trenfocus to manage his property at 11 Citrine Street, Australind (Australind property). 

   (c)The management authority included a special condition that enabled the applicant to terminate the management authority if there is a change of property manager. 

   (d)Trenfocus did not act in his best interests whilst engaged as his property manager as evidenced by the following examples:[26]

   •not issuing breach notices to the tenants for failing to maintain the upkeep of the property; and

   •not having six monthly rent review in the lease agreements.

   (e)The mismanagement by Trenfocus also gave rise to additional costs due to delays in selling the Australind property, loss of rental income and damage to the property.[27]

   (f)Due to the loss of rental income and damage to the property, the applicant incurred further expenses including travel expenses, court fees to progress and enforce the recovery of loss and damage, unpaid utility charges, unauthorised deductions for postage, printing and document search costs.[28]

   (g)The loss and damage referred to above prevented him from constructing an owner-occupied dwelling on vacant land owned by him and for which development approval was due to expire on 20 September 2024.[29]

   [26] Applicant's SIFC (Trenfocus), pages 23 - 28.

   [27] Applicant's SIFC (Trenfocus), page 28.

   [28] Applicant's SIFC (Trenfocus), page 28.

   [29] Applicant's SIFC (Trenfocus), page 28.

2. Having set out the basis of Trenfocus' liability, the applicant then advances the following broad claims:

   Pursuant to the Insurance Commission WA factsheet, cover is provided to WA Government Agencies to indemnify the agency for all sums (including legal costs) which the agency is legally liable to pay in respect of relevantly general liability, professional liability and medical treatment liability.

3. The applicant then claims the following matters under the heading 'General Liability':[30]

   •defamation, infringement of copyright, patent and trademark of design;

   •agency liability for unlawful, fraudulent, dishonest, criminal or malicious acts of employees;

   •liability arising from loss of or damage to documents.  The basis for this assertion is said to be Trenfocus 'negotiating the management authority in bad faith and sub-optimal property management which led to multiple leases being signed outside of written instructions';[31] and

   •liability for damages arising from loss arising under the Competition and Consumer Act 2010 (Cth) (Consumer Act) or the Fair Trading Act 1987 (WA) (Fair Trading Act) not otherwise covered under professional liability.

   [30] Applicant's SIFC (Trenfocus), pages 28 - 29.

   [31] Applicant's SIFC (Trenfocus), page 30.

4. Under the heading 'Professional liability' the applicant claims:[32]

   •the personal liability of employees, volunteers, work experience persons and officers of the agency whilst performing their office duties for and on behalf of the agency; and

   •damages under the Consumer Act or the Fair Trading Act which are not otherwise claimable as general liability.

   [32] Applicant's SIFC (Trenfocus), page 29.

5. The applicant seeks an order that the respondent pay from the Fidelity Account the following amounts:

   (a)Pecuniary Loss - $344,659.48 consisting of:

   $8,388.24this consists of $5,653.95 for fees and charges for property management services and $2,734.29 in lost rent.

   $7,749.28loss and damage sustained to the Australind property which would not have been incurred had Trenfocus performed their duties with diligent skill and care.

   $33,033.05direct loss associated with delay of the sale of the Australind Property from April 2022 to settlement in February 2023.

   $29,256.30indirect loss directly associated with the sale of the Australind property.  This includes $11,029.75 for Curtin University course fees and $18,226.55 as he was forced to sell a vehicle and required a loan to purchase a new vehicle.

   $35,000.00loss of opportunity being the difference between the actual sale price of the Australind property and the price that could have been achieved had there been no delay and it had not been a forced sale due to hardship.

   $195,525.40loss of opportunity related to the proposed construction of an owner-occupied dwelling on vacant land in Sinagra.

   $29,315.27consumer price index adjustments representing the inherent loss of value over a two year period.

   $1,139.80costs associated with SAT application, VR 39 of 2024.

   (b)General Damages - $678,472.00

   Although this figure is not itemised, the applicant claims this sum on the basis that the DEMIRS, the Department of Communities and the Department of Water and Environmental Regulation (DWER) breached his 'human right of self determination' for well over a decade.  It would appear this amount also includes pain and suffering, psychological trauma, stress and decline in quality of life and health.

   The total the applicant seeks is $1,023,131.48.

6. In addition to Trenfocus the following entities are alleged to have engaged in 'agency liability for fraudulent, dishonest, criminal conduct':[33]

   •Spooner Investments Pty Ltd t/a LJ Hooker Property South West - no genuine attempt to sell the Australind property and a failure to issue breach notices to the tenant.

   •South West Community Legal Centre - serving the personal agenda of the Department of Communities which delayed the removal of the tenants who were in breach and thereby the sale of the Australind property;

   •SCALES Community Legal Centre and Northern Suburbs Community Legal Centre/Rockingham Court - passing document in minor case claim 19/21 to the South West Community Legal Centre and others 'to have Ray White Bunbury [Trenfocus] terminate the management authority in less than 24 hours'.

   [33] Applicant's SIFC (Trenfocus), page 30, see also Applicant's Statement of Evidence (SCALES), 30 January 2025, page 1.

7. Although no specific monetary amount is sought in relation to the conduct of each of these entities, it is apparent the applicant contends that his 'loss and damage was sustained in conjunction with alleged malicious acts from government departments and government funded agencies and organisations'.[34]

The Robian SIFC

[34] Applicant's Statement of Intended Evidence, 20 November 2024.

1. The applicant makes the following factual assertions in relation to Robian:

   (a)Robian holds a real estate and business agents licence and a triennial certificate and trades as LJ Hooker Rockingham.[35]

   [35] Applicant's SIFC (Robian), page 22.

   (b)On 23 October 2015, the applicant appointed Robian to manage his property at 13 Revshaw Link, Baldivis (Baldivis property).[36]

   [36] Applicant's SIFC (Robian), page 25.

   (c)On 5 November 2020, the applicant alleged that he instructed Robian to prepare a lease for the Baldivis property consistent with the following instructions:[37]

   [37] Applicant's SIFC (Robian), pages 25 and 26.

   •'Rent at $330pw to increase to $350pw at the soonest opportunity'; and

   •'take your advice on rent review mechanism for future to ensure we meet the market'.

   (d)On 30 November 2020 a lease agreement was executed for the period 25 February 2021 - 31 March 2023, however, the lease did not contain a rent review clause.  Whilst from 27 March 2021 the rent was adjusted to $350 per week, it did not change until the end of lease.[38]

   [38] Applicant's SIFC (Robian), page 26.

   (e)As Robian had failed to include a rent review mechanism in the lease, the applicant entered into negotiations with Robian to settle his losses.[39]

   [39] Applicant's SIFC (Robian), page 26.

   (f)On 15 September 2021, the parties signed a settlement agreement whereby Robian would pay the applicant $4,945.71.[40]

   [40] Applicant's SIFC (Robian), page 28.

   (g)At the time the applicant did not independently calculate and check the settlement figures presented to him as he was otherwise occupied.[41]

   [41] Applicant's SIFC (Robian), pages 28 - 29.

   (h)On 10 September 2021, the sum of $4,945.71 was transferred from Robian's general account to its trust account, to be held in escrow for the applicant while the settlement agreement was being finalised.  On 14 September 2021, 'consistent with the settlement agreement', Robian paid the sum of $4,945.71 to the applicant from its trust account.[42]

   [42] Applicant's SIFC (Robian), pages 28 - 29.

   (i)Robian incorrectly calculated one of the settlement offers presented and obtained a financial advantage in doing so such that the $4,945.71 paid to him by Robian in accordance with the settlement agreement he signed was trust money that was misused or misappropriated.[43]

   [43] Applicant's SIFC (Robian), page 29.

   (j)On 14 January 2020, he instructed Robian to ensure that the tenant was to use Centrepay (Centrelink's automated payment system) so that rent payments are automatically deducted from the tenant's Centrelink payments.[44]

   [44] Applicant's SIFC (Robian), page 30.

   (k)On 23 January 2020, the applicant received a copy of the executed tenancy agreement which did not include the Centrepay arrangement.[45]

   [45] Applicant's SIFC (Robian), page 30.

   (l)Robian was in breach of Part 2 General Duties, s 10 of the Code of Conduct by not following his instructions.[46]

   [46] Applicant's SIFC (Robian), page 31.

   (m)Robian also handled the sale of the Baldivis property in July 2021.

   (n)The tenant informed the representative from Robian that she was happy to facilitate private inspections at any time, on any day, but was not willing to have general home opens.[47]

   [47] Applicant's SIFC (Robian), page 31.

   (o)On 7 August 2021, the applicant instructed Robian to act in accordance with the applicable legislation and formally advertise home opens of the Baldivis property at a time convenient to the tenant.[48]

   [48] Applicant's SIFC (Robian), page 32.

   (p)The applicant alleges that Robian did not follow his instructions and failed to issue a breach notice to the tenant for failing to allow general home opens.[49]

   [49] Appicant's SIFC (Robian), page 32.

   (q)Both the applicant and Robian were released from the property sale listing agreement as part of the settlement agreement dated 15 September 2021 referred to above.[50]

   [50] Appllicant's SIFC (Robian), page 32.

   (r)The Baldivis property was ultimately sold on 23 May 2022 using a different agent after only seven days on the market.[51]

   [51] Applicant's SIFC (Robian), page 32.

   (s)In assessing his loss, the applicant says that these events took place at a crucial time when the applicant wanted to acquire the house belonging to his mother.  This caused a great deal of stress and anxiety.[52]

   (t)The following financial outcomes were riding on the sale of the Baldivis property:[53]

   •acquisition of his mother's home, removing pressure on her from an Insurance Commission of Western Australia claim;

   •commencement of construction on vacant land at the earliest opportunity;

   •purchase of a new vehicle with cash along with the funds for the upgrade for an around Australia four-wheel drive trip; and

   •loss of the value of money given inflation over the last several years.

   (u)Robian's conduct and its flow on effects deprived him of the opportunity to set himself up for financial success by selling the Baldivis property.[54]

   (v)When the Robian and Trenfocus claims are presented sequentially, they are inextricably linked by way of agency employees that were so 'maliciously intended that general damages and pecuniary losses are warranted'.[55]

   [52] Applicant's SIFC (Robian), page 34.

   [53] Applicant's SIFC (Robian), page 34.

   [54] Applicant's SIFC (Robian), page 34.

   [55] Applicant's SIFC (Robian), page 34.

1. The applicant calculates his claim for pecuniary loss as $48,002.13 on the following basis:[56]

   $19,779.00recovery of commercial benefits received by Robian as a result of its alleged fraud.

   This figure consists of:

   $4,121.43loss of rent due to lack of rent reviews and represents the difference between the settlement sum he accepted ($4,945.71) and the highest quote figure during the negotiation ($9,067.14).

   $2,450.00 compensation the applicant was ordered to pay to the tenant for the early termination of the lease.

   $13,207.57 property agent management fees paid to Robian from 2015 to June 2021.

   $20,193.23 for direct loss associated with the sale of the Baldivis property from July 2021 to the time of settlement in May 2022.[57]

   [56] Applicant's SIFC (Robian), pages 35 - 37.

   [57] Applicant's SIFC (Robian), page 36.

2. So far as general damages are concerned, the applicant seeks $339,236.00 from the Fidelity Account for pain and suffering, psychological trauma, stress and the decline in his health and quality of life.[58]

   [58] Applicant's SIFC (Robian), page 36.

3. Alternatively, the applicant claims that the $339,236.00 should be paid from the RiskCover Fund or the Commonwealth Scheme for Compensation for Detriment caused by Defective Administration (CDDA Scheme) claim based on the breach of his 'human right of self­determination' by DEMIRS, Department of Communities and DWER.[59]

   [59] Applicant's SIFC (Robian), page 36.

4. In total the applicant seeks $387,238.13.

Other claims

1. As I foreshadowed, the applicant has raised a plethora of other matters.  For example, on 9 June 2024, the applicant sent an email to the Tribunal requesting that the scope of the review proceedings consider a broad remit including:

   (a)the performance of DEMIRS in relation to the licencing of real estate agents and compliance leading up to the reviewable decision;

   (b)'the performance of the Real Estate Agent and Property Manager(s)';

   (c)the expectations of the Real Estate Institute of Western Australia (REIWA);

   (d)the intent of the Fidelity Account 'as described on the DEMIRS website v the loophole laws and aged precedents that differ from the website which falls far from its described intent'; and

   (e)'if the Fidelity Account is operating as a captive insurer, what legislation is it operating under or what should it be operating under?  Unless I stand corrected, it seems to be a law unto itself!'.

2. In the applicant's Statement of Intended Evidence, dated 20 November 2024 the applicant also contends that s 122 of the REBA Act[60] in effect enables DEMIRS to profit from alleged criminal or fraudulent conduct either by the licensee, DEMIRS or other government agencies and organisations themselves by limiting and withholding compensation that would ordinarily be payable as an insured event under ICWA, RiskCover WA policy and limiting any compensation payable by invoking s 116 of the REBA Act.

   [60] 122.    Application of insurance payouts

   A claimant against the Fidelity Account has no right of action against any person with whom a contract of insurance is made under section 121 in respect of that contract, and has no right to claim any money paid by the insurer in accordance with any such contract; but all such money shall be credited to the Fidelity Account and shall be applied in or towards the settlement of relevant claims.

3. In an affidavit lodged on 29 July 2024 the applicant seeks orders from the Tribunal:

   (a)vesting various parcels of land in his name pursuant to the Property Law Act 1969 (WA) (PL Act);

   (b)having various proceedings in the Magistrates Court and the Tribunal determined in his favour, including a finding that he is a fit and proper person for the purposes of the Firearms Act 1973 (WA);

   (c)awarding him compensation in relation to various Australian Financial Complaints Authority (AFCA) complaints against a number of financial institutions; and

   (d)resolving District Court proceedings initiated by his mother in her favour. 

4. The respondent lodged an affidavit from Mr Morganti sworn on 30 January 2025.  The affidavit attests to the fact that VR 39 of 2024 and VR 53 of 2024 are, at the relevant time, the only proceedings on foot involving the applicant and DEMIRS.  The affidavit attaches correspondence from the applicant to DEMIRS as follows:

   (a)On 16 May 2024 the applicant lodged a complaint with the DEMIRS regarding a licenced real estate agent unrelated to these proceedings.  As part of the complaint the applicant says:

   The reason for linking this matter to you, is quite simply because I have DMIRS Consumer Protection on trial for negligence …

   (b)On 11 June 2024, the applicant sent an email to DEMIRS which said:

   There are serious allegations contained within VR 39 of 2024 and VR 53 of 2024 on which several real estate agents should be losing their licences and several officers of DMIRS have questions asked of them on top of a valid fidelity account claim.  It is most certainly an appropriate use of the Tribunal's resources and I should be commended for the efficiencies these matters will bring rather than separate matters. 

   (c)On 23 July 2024, the applicant sent an email to DEMIRS which states:

   •The Department has been targeting me deliberately for such a long period of time and is liable as such - hence these broader amounts in the documents lodged previously.  I have put forward the loss and damage I believe owed. 

   •The Department played a sizable part in my ultimate removal from my employer alongside my employer's significant contribution and likely given that the Department thought I was complicit in my employer's activities and of which it as suitably gained comfort since that I was not complicit in it and was fighting against it continuously as it became known to me in the late stages.

   •There are several other interests that serve the department and of which they will require the department to make these matters go away, more particularly that the department is liable for not taking enough proactive action to rectify the behaviours of real estate agents and this is reflected in poor compliance to license conditions and of which I have suffered loss, but so have many others that remain oblivious to their rights to claim. 

   (d)On 13 August 2024, the applicant sent another email to DEMIRS which includes the following passage:

   To put it simply, surrounding the Residue Waste Facility on Landcorp land in Dalyellup which was leased to my employer, DMIRS had been entrusted with management of this land and specifically to arrange subdivision of Crown land which later became residential development directly and surrounding land parcels.  It is clear from substantial evidence that this has not worked and the death of one of my former colleagues in 2023 that lived in Dalyellup somewhat goes to proving this and also the recent closure of the maternity ward at the hospital some 1km away from said affected land. 

The applicant's submissions

1. On 12 February 2025, the Tribunal made the following order in both VR 39 of 2024 and VR 53 of 2024:

   …

   3.By 28 February 2025, the Applicant is to lodge with the Tribunal and give to the Respondent any written submissions in respect of the Respondent's interim application dated 30 January 2025 for orders dismissing the proceedings, and in respect of costs …

2. The applicant did not avail himself of the opportunity to file submissions in either matter.  However, I note that the question as to whether there was defalcation was considered by the applicant in his SIFCs and other documents he filed.

3. While I appreciate that the applicant is not represented by a lawyer in these proceedings, nonetheless, I have found some of his submissions difficult to follow.  So as not to inadvertently misrepresent or misunderstand the applicant's submissions, where practical to do so, I have reproduced his submissions verbatim.

4. The applicant submits that the respondent's contentions have contravened s 32(2)(b) of the SAT Act which provides that the Tribunal is required to 'act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms'.[61]

   [61] Applicant's SIFC (Trenfocus), page 9; (Robian) at page 11.

5. The applicant says further that he rejects the contentions that he has not established that defalcation has occurred, referring to the concept of: 'property entrusted was a fiduciary obligation on the respondent and in breach of that fiduciary obligation by way of negligence or default required the respondent to be liable for the applicant's direct and indirect losses'.[62]

   [62] Applicant's SIFC (Trenfocus), page 11.

6. According to the applicant, defalcation has been established by Trenfocus being entrusted with the Australind property and ensuring it lost the maximum amount of market achievable rent through fraudulent conduct by falsely negotiating a management authority that was supposed to give the applicant ability to approve the property manager.  The applicant contends that Trenfocus then went on and allowed the property to be mismanaged by another unapproved property manager who failed to negotiate the lease in accordance with the applicant's instructions thereby misusing and misappropriating monies that would have been payable to the applicant.[63]

   [63] Applicant's SIFC (Trenfocus), page 11.

7. In response to the respondent's contentions that he cannot establish that pecuniary or property loss was suffered by defalcation, the applicant says, 'should the Tribunal seek to limit losses in any way, that any unrecoverable portion be portions that are recovered through a RiskCover Fund claim and/or a CDDA Scheme claim by way of an incompetent government department through their failures to manage the real estate industry and their history with the applicant have maliciously sought to ensure the applicant lost the maximum amount of money possible by department inactions by failing to take any action on behalf of the applicant against Trenfocus in the interests of the public'.[64]

   [64] Applicant's SIFC (Trenfocus), page 12.

8. The applicant also says that the execution of a management authority constituted a 'real estate transaction' such that the Australind property was entrusted to Trenfocus and as a direct result of the criminal and fraudulent conduct of Trenfocus, pecuniary loss and loss of property occurred.[65]

   [65] Applicant's SIFC (Trenfocus), page 39.

9. The applicant specifically relies on a number of provisions in the REBA Act. Section 104(b) of the REBA Act provides that 'the fraudulent rendering of an account, knowing it to be false in any material particular, in respect of money or other property entrusted to him by or on behalf of another person in the course of the licensee's business' commits an offence from which pecuniary loss or loss of property arose.[66]

   [66] Applicant's SIFC (Trenfocus), page 42; (Robian) page 39 and 40 and Applicant's Statement of Evidence, 24 July 2024, page 2.

10. With respect to Robian the applicant asserts that the settlement agreement constituted fraudulent rendering of an account in the course of the business of the licensee and by the agent of the licensee from which pecuniary loss or loss of property arose.[67]

    [67] Applicant's SIFC (Robian), page 43. 

11. The applicant says that his agreement to the settlement with Robian arose from fraudulent representations with respect to the settlement calculations such that the settlement amount agreed upon was less than it should have been.[68]

    [68] Applicant's SIFC (Robian), page 43. 

12. The applicant contends that the settlement amount related to rent to which he would have been entitled had there been a rent review clause.  According to the applicant as the settlement amount passed through the Robian general business account to the trust account and was paid in full to him rather than progressively over a period of time, this constituted the fraudulent rendering of an account specifically in the trust account itself.[69]

    [69] Applicant's SIFC (Robian), page 43.

13. The applicant says further that as Robian was technically providing compensation for loss of rent, it was misapplied and misused in a trust accounting sense when it was provided in full to him through the trust account, rather than progressively.[70]

    [70] Applicant's SIFC (Robian), page43 and Applicant's Statement of Evidence, 24 July 2024, page 4.

14. The applicant further contends that the definition of 'real estate transaction' in s 4 of the REBA Act explicitly contemplates that 'the acquisition of … any exclusive right … to the use or occupation of real estate including the leasing, and letting, and the acquisition under lease or letting of tenancy or occupation of real estate' includes the 'collection of rents or other payments for use or occupation'.[71]

    [71] Applicant's SIFC (Trenfocus), page 39.

15. It follows, according to the applicant, that an 'exclusive management authority for residential premises is a real estate transaction' executed by Trenfocus for the Australind property.[72]

    [72] Applicant's SIFC (Trenfocus), page 39.

16. It would seem that the applicant relies on the definition of 'real estate transaction' to demonstrate that a management authority established exclusive rights on behalf of Trenfocus to the Australind property and thereby, was property entrusted to Trenfocus.[73]

    [73] Applicant's SIFC (Trenfocus), page 39.

17. Finally, the applicant refers to Mantova.  He says that the Tribunal concluded that the definition of defalcation did not include criminal conduct not associated with some misuse or misapplication of funds entrusted to an agent.  Hence the decision to disallow the claim could be affirmed on that basis.[74]

    [74] Applicant's SIFC (Robian), pages 41 and 42.

18. According to the applicant, the respondent has referred to precedent in which the Tribunal disallowed the claim having found there was no criminal conduct associated with the loss, misuse or misapplication of funds entrusted to the agent.[75]

    [75] Applicant's SIFC (Robian), page 42.

19. The applicant argues, with respect to Robian, that there is a distinct and strong association between the conduct that meets the required definition of defalcation of the licensee under the REBA Act (ie criminal conduct) to that of the pecuniary loss and the loss of property he sustained.[76]

The respondent's submissions

[76] Applicant's SIFC (Robian), page 42.

1. The respondent's primary contention is that the applicant has not demonstrated that money or property was held on trust by either Trenfocus or Robian at any stage, which means that no trust money or property could have been misused or misappropriated.[77]

   [77] Respondent's Submissions VR 39/2024 at para 14 and VR 53/2024 at para 17.

2. The respondent says further that the applicant's assertion that his real property was 'under the care, custody and control' of Trenfocus and Robian because he entrusted it to them means it became trust property is misconceived as the applicant remained the sole legal and beneficial owner at all material times.[78]

   [78] Respondent's Submissions VR 39/2024 at para 15 and VR 53/2024 at para 18.

3. According to the respondent the applicant's SIFCs demonstrate multiple fundamental misconceptions about the scope of the proceedings.  These include:

   (a)asserting that s 32(2)(b) of the SAT Act requires the Tribunal to 'act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms;[79]

   (b)reliance on s 104 of the REBA Act as a basis for a claim for pecuniary loss from the Fidelity Account;[80]

   (c)notwithstanding that, any reimbursement from the Fidelity Account for pecuniary loss is limited to the extent of the defalcation which has been committed, the applicant's position assumes that anything a real estate agent does that results in any loss arising in connection with their action or inaction, however remote, can be claimed from the Fidelity Account;[81]

   (d)the applicant seeks amounts to be paid out from RiskCover and the CDDA Scheme as part of his claim. The Tribunal is not invested with jurisdiction under the REBA Act to deal with those matters. These proceedings are solely concerned with a claim from the Fidelity Account established under the REBA Act;

   (e)the applicant has listed several entities as being liable for his loss, however, he does not address how their conduct 'occurred in the course of the business of Trenfocus or Robian' or on what basis the Tribunal is empowered to make orders of any kind in relation to those entities; and

   (f)the applicant makes allegations against DEMIRS, the Department of Communities and DWER which demonstrates that he perceives the proceeding as more than a review of a Fidelity Account claim.

   [79] Respondent's Submissions VR 39/2024 at para 19.1and VR 53/2024 at para 22.1.

   [80] Respondent's Submissions VR 39/2024 at para 19.2.

   [81] Respondent's Submissions VR 39/2024 at para 17 and VR 53/2024 at para 20.

Disposition

1. As the authorities make clear, I am to approach an application for summary dismissal on the assumption that all factual assertions made by the applicant would be made out at a final hearing. While I am required to accept the facts alleged by the applicant, I am not required to accept his characterisation of the evidence or agree with any legal principle he purports to rely on unless it is reasonably arguable. For example, conduct engaged in by a licensee does not constitute defalcation for the purposes of the REBA Act merely because the applicant asserts that it is. Just because the applicant characterises the agent's conduct in that way does not make it so.

2. My task is confined to determining whether the applicant's review applications give rise to a reasonably arguable case of defalcation.  It is not for me to comment on the merit of matters that are or have been or may be the subject of litigation in other jurisdictions.

3. The starting point is to recognise that the Tribunal is a creature of statute. The Tribunal is only invested with the powers the legislature gives it and those derived from the relevant enabling legislation, in this case, the REBA Act.

4. It follows that the Tribunal's jurisdiction is limited to its powers upon review of a decision as set out in the SAT Act and more importantly what decisions it is invested with the power to review by the REBA Act.

5. The Tribunal's jurisdiction so far as the REBA Act is concerned can be summarised as follows.

6. When the definition of 'persons aggrieved' is read within the meaning of 'reviewable decision' in s 23(2) of the REBA Act, it is evident that:

   (a)only a person who has applied for or whose licence or triennial certificate is affected by a decision of the Commissioner under Part III or Part IV of the REBA Act has standing to seek a review (see s 23(2)(a) and (b)); and

   (b)only a licensee who seeks the Commissioner's approval under s 56 to carrying on business under a franchising agreement can seek a review (see s 23(2)(c)).

7. Section 23(2)(d) gives a right of review to a person affected by a decision of the Commissioner under Part VI, which is concerned with agents' trusts accounts.

8. Decisions the Commissioner is empowered to make under Part VI include:

   (a)extending time to lodge an audit report (see s 70(5));

   (b)revoking permission to fix a date up to which trust accounts are to be audited other than 31 December (see s 71(2));

   (c)cancelling or suspending the right of any person to act as auditor under Part VI or vary, revoke or cancel any other approval direction, permission or authority granted by the Commissioner under Part VI (see s 75(a) and (b));

   (d)disclosing to any persons interested in any money or security held by an agent of any report of an auditor (see s 83(1));

   (e)causing the trust accounts of an agent to be audited by an auditor nominated by the Commissioner (see s 88); and

   (f)requiring an agent or an authorised financial institution to provide information in relation to a trust account (see s 100A(1)(a) and (b)).

1. As is readily apparent, neither the SAT Act nor the REBA Act empower the Tribunal upon review to:

   (a)determine proceedings lodged in the Magistrates Court, the District Court or in the Tribunal under the Firearms Act 1973 (WA);

   (b)to vest parcels of land in the applicant's name pursuant to the PL Act;

   (c)award the applicant compensation in relation to the AFCA complaints;

   (d)make an award of compensation against DEMIRS and DWER for breaching 'his right of self-determination';

   (e)make an award of damages for defamation, infringement of copyright, patent and trademark design;

   (f)make findings as to 'agency liability for fraud, dishonest and criminal conduct' in relation to:

   (i)Spooner Investments Pty Ltd t/as LJ Hooker Property South West on the basis there was no genuine attempt to sell the Australind property and a failure to issue breach notices to the tenant;

   (ii)the South West Community Legal Centre, SCALES Community Legal Centre and Northern Suburbs Community Legal Centre;

   (g)award the applicant compensation from the 'Riskcover fund' or CDDA Scheme;

   (h)determine whether DEMIRS has been negligent and whether it is liable for not rectifying the behaviour of real estate agents;

   (i)make findings as to DEMIRS' management of Crown land and role in the applicant being terminated by his employer; and

   (j)whether the Fidelity Account is a 'captive insurer' and the expectations of REIWA.

2. To the extent that the documents lodged by the applicant can be taken to reflect an intention to litigate the matters outlined above in the course of these proceedings, in my view, such a course is misconceived.  Whatever the merits, as to which I express no opinion, these matters do not fall within the Tribunal's jurisdiction let alone constitute defalcation for the purposes of an application for compensation from the Fidelity Account.

3. I turn now to consider the claims made by the applicant pursuant to s 116 of the REBA Act against Trenfocus and Robian. The key question is whether it is arguable that the conduct allegedly engaged in by Trenfocus and Robian is capable of constituting defalcation.

4. As was explained by the Tribunal in Mantova the ordinary meaning of the word defalcation is essentially concerned with some misapplication or misuse of money or property entrusted to a person.

5. The factual assertions made by the applicant in relation to Trenfocus relate to indirectly delaying the sale of the Australind property and the following property management issues, namely changing the property manager despite a special condition requiring the applicant's approval, not acting in the applicant's best interests by failing to issue breach notices and not having six monthly rent reviews.

6. Even if these matters could be said to constitute negligence, they do not involve the misapplication or misuse of money or property entrusted to Trenfocus.

7. The situation is similar so far as Robian's conduct in relation to the Baldivis property is concerned.  The applicant alleges that Robian:

   (a)failed to include a rent review clause in the tenancy agreement;

   (b)executed a tenancy agreement which, contrary to his instructions, did not require the tenant to use Centrepay; and

   (c)failed to issue a breach notice to the tenant for failing to allow general home opens when the property was listed for sale.

8. Once again, none of these factual allegations, even if proved, involve the misapplication or misuse of money or property entrusted to Robian.

9. The applicant focuses particular attention on a settlement reached with Robian in relation to the failure to include a rent review mechanism in the tenancy agreement.

10. The applicant argues that he executed the settlement agreement without independently calculating and checking the settlement figures.  On further reflection, the applicant asserts that Robian incorrectly calculated one of the settlement offers and by doing so gained a financial advantage.

11. The applicant says further that on 10 September 2021, the settlement sum ($4,945.71) was transferred from Robian's general account into its trust account to be held in escrow for the applicant while the settlement agreement was finalised.  Consistent with the agreed terms of the settlement agreement on 14 September 2021, Robian paid $4,945.71 to the applicant from its trust account.

12. Based on these facts, the applicant contends that the settlement agreement arose from fraudulent representations with respect to the settlement calculations resulting in the settlement amount, to which he agreed, being less than it should have been.

13. The applicant advances the following arguments directed to demonstrating that Robian's conduct involves defalcation.

14. As the settlement amount passed through Robian's general business account to the trust account and was paid in full rather than progressively over a period of time (given it related to rent over a period of time), this constitutes the fraudulent rendering of an account 'specifically in the trust account itself'.

15. According to the applicant, as Robian was settling a claim for loss of rent, the settlement amount was misapplied and misused in a trust accounting sense when it was provided in full to him rather than progressively.

16. For the following reasons, I do not accept the applicant's assertion that matters associated with the payment of the settlement amount are reasonably capable of constituting defalcation.

17. First, Robian paid the applicant the agreed settlement amount.  Even if the settlement sum sitting in escrow awaiting finalisation of the settlement agreement is capable of being characterised as money entrusted to Robian, it is not suggested that Robian misused or misappropriated the settlement amount.  Robian paid the applicant the agreed amount.

18. Second, even if it is accepted that Robian fraudulently misrepresented the settlement calculations, that does not establish that Robian misused or misappropriated money entrusted to it by the applicant.

19. According to the applicant, the settlement sum represented rent he may have received had Robian included a rent review clause in a lease agreement.  The settlement sum, therefore, did not represent money entrusted to Robian by the applicant.  On the contrary it represented money which the applicant could have received had Robian complied with the applicant's instruction to include a rent review clause in the lease agreement.

20. Third, the fact that the settlement amount was moved from Robian's general account to its trust account to be held in escrow until execution of the settlement agreement does not mean that during this period it was money entrusted to Robian by the applicant.  The settlement amount would only have been capable of characterisation as money entrusted to Robian by the applicant had it been retained by Robian upon execution of the settlement agreement.  It was not.

21. Furthermore, even if Robian was entrusted with the settlement sum, there is no suggestion that Robian misused or misappropriated the settlement sum.

22. Fourth, even if the payment of the settlement amount on 14 September 2021 represented lost rent for the period 25 February 2021 to 23 May 2022 (when the property was sold), it is difficult to see how paying some of the compensation in advance is fraudulent rendering of an account.  Moreover, as I have already explained, I do not accept that settling a claim for loss of rent by paying it in full rather than progressively constitutes misusing or misappropriating the settlement sum.

23. The applicant also seeks to rely on s 104(b) of the REBA Act which appears in Part VII. Section 104 provides:

    If a licensee is convicted of an offence involving —

    (a)defalcation by the licensee; or

    (b)the fraudulent rendering of an account, knowing it to be false in any material particular, in respect of money or other property entrusted to him by or on behalf of another person in the course of the licensee's business; or

    (c)a breach of any one or more of the provisions of Part VI relating to the proper payment in and out of the trust account of the licensee of money entrusted to him by or on behalf of another person in the course of the licensee's business,

    his licence and any triennial certificate in respect thereof is thereby cancelled, and the registrar of the court convicting him shall forthwith notify the Commissioner accordingly.

24. In my view, s 104(b) of the REBA Act does not assist the applicant. First, Robian has not been convicted of an offence under s 104(b) of the REBA Act. Second, the fraudulent rendering of an account knowing it to be false does not establish there has been defalcation. This is apparent from the way that s 104 is structured. Subparagraph (a) refers to defalcation whereas (b) deals with the fraudulent rendering of an account.

25. Section 104(b) provides that it is an offence to fraudulently render an account knowing it to be false in any material particular. It does not, however, require that money or property be misused or misappropriated. It follows that even if Robian was convicted for breaching s 104(b) that would not of itself establish that defalcation occurred.

26. The applicant also relies on s 32(2)(b) of the SAT Act which provides that the Tribunal is required to 'act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms'.

27. As I understand the applicant's submission, he contends that s 32(2)(b) of the SAT Act expands the jurisdiction of the Tribunal such that, independent of other provisions of the SAT Act, the Tribunal has broad powers enabling it to consider the merits of his application in a general sense.

28. In Fagan v Minister for Corrective Services (Fagan),[82] the Court of Appeal considered the operation of s 26(1)(a) of the Industrial Relations Act 1979 (WA) (IR Act) which is identical in its terms to s 32(2)(b) of the SAT Act. Buss P observed:[83]

    The words 'according to equity, good conscience, and the substantial merits of the case' in s 26(1)(a) direct the Commission (including the Full Bench) as to the manner in which jurisdiction vested elsewhere in the Commission (including the Full Bench) is to be exercised. Those words in s 26(1)(a) are not themselves a source of additional jurisdiction. (Emphasis added)

    [82] Fagan v Minister for Corrective Services [2024] WASCA 167.

    [83] Fagan [87].

29. Smith AUJ[84] found that s 26(1)(a) of the IR Act prescribes the reasoning process the Commission is required to apply when enquiring into, and dealing with matters within its jurisdiction, which are consistent with an element of formality that apply to many statutory tribunals. Section 26(1)(a) regulates the manner by which a matter referred to the Commission is to be heard and determined but does not confer a power on the Commission to act where no power exists. Those comments are also applicable to s 32(2)(b) of the SAT Act.

    [84] Fagan [136] - [137].

30. As is readily apparent from the passages from Fagan referred to above, the applicant's submission as to the operation of s 32(2)(b) of the SAT Act is misconceived.

31. A further argument advanced by the applicant centres around an exclusive management authority for residential premises falling within the definition of a 'real estate transaction'.  According to the applicant a management authority establishes exclusive rights on behalf of Trenfocus and Robian to the Australind and Baldivis properties respectively and is therefore property entrusted to Trenfocus and Robian.

32. Even if the applicant's characterisation of his arrangement with Trenfocus and Robian is correct, which I do not accept, his case at its highest is that Trenfocus and Robian engaged in negligence, poor lease management and mismanagement of the sale process.  There is no evidence that either Trenfocus or Robian misused or misappropriated money or property entrusted to them.

33. The applicant also relies on Mantova whereby the applicant correctly sets out the Tribunal's findings to the effect that criminal conduct not associated with some misuse or misapplication of money or property entrusted to an agent does not fall within the definition of defalcation.

34. I must confess to having some difficulty understanding how the principles set down by the Tribunal in Mantova assist the applicant.

35. It would appear that the applicant seeks to argue that there are a number of decisions of the Tribunal disallowing claims where there is no criminal conduct associated with the loss, misuse or misapplication of funds entrusted to an agent.

36. According to the applicant, his case against Robian is not beset by that weakness as there is 'a distinct and strong association between the conduct that meets the required definition of defalcation of the licensee under the REBA Act (i.e. criminal conduct) to that of pecuniary loss and the loss of property'.

37. The basis of this submission is not readily identifiable as the applicant is yet to advance an arguable case that money or property entrusted to Trenfocus or Robian was misused or misappropriated.

38. In many ways the applicant's case is similar to that advanced by the applicant in Mantova in relation to which the Tribunal remarked:

    24The applicant's case turns on a proposition that any 'criminal or fraudulent conduct' by a licensee, through any of the persons mentioned in the definition of defalcation, which is done in the course of its business and which is a cause of a pecuniary loss or loss of property to any other person is a defalcation for the purposes of s 116 of the REBA Act. Critically, the applicant submits that it is not necessary that the conduct involves some form of misuse of money or property entrusted to an agent. In effect, the applicant contends that the Fidelity Account operates as an indemnifier of last resort in relation to any loss suffered by any person as a result of any criminal or fraudulent conduct (which includes any breach of the REBA Act or the Code of Conduct which might result from any misleading or deceptive conduct) provided the conduct occurs in the course of business of the agent. That is a submission which we do not accept.

39. A further difficulty confronting the applicant, even were it reasonably arguable that some form of defalcation had occurred, concerns the damages he seeks.

40. As s 116(1) of the REBA Act makes clear, a claimant is only entitled to be reimbursed for pecuniary or property loss to the extent of the defalcation. As I have already explained, this means that losses of an indirect or consequential kind that as a matter of commonsense are seen to flow from or result from the defalcation are excluded. Any reimbursement cannot exceed the total sum taken or lost as a result of the criminal or fraudulent conduct of the licensee.

41. Finally, while I am in general agreement with the submissions lodged by the respondent, there is one aspect of the submissions as to which I am required to comment.

42. The respondent's primary submission in these proceedings is that neither Trenfocus or Robian held money or property on trust for the applicant at any stage, therefore no trust money or property could have been misused or misappropriated.  Accordingly, there could never have been any defalcation by either Trenfocus or Robian.[85]  I note that the applicant takes issue with this proposition.

    [85] Applicant's SIFC (Trenfocus), contention 7, page 45.

43. In my view, a licensee who receives rent money from a tenant pursuant to a management agreement, subject to deducting the agreed management fee and other agreed expenses, holds the money in a fiduciary capacity until it is paid to the owner of the property, usually at the end of the month.  As Gibb CJ observed in Daly 'wrongful diminution or reduction of the amount of the moneys held in trust or in a fiduciary capacity can properly be called a defalcation …'.[86]  It follows that neither the existence of a trust nor the transfer of ownership of money or property is a necessary prerequisite to establishing that defalcation has occurred.

    [86] Daly [380].

44. Having regard to the circumstances in this case, I accept that Trenfocus and Robian were acting in a fiduciary capacity in relation to the Australind and Baldivis properties respectively.  However, the problem for the applicant is that based on the material before me it is not reasonably arguable that either licensee misused or misapplied the applicant's money or property.  As I have already explained, the applicant's complaint so far as Trenfocus and Robian is concerned relates to allegations of negligence and poor management not that money or property was misapplied or misused.

Conclusion

1. For the reasons given above, I have concluded that many of the claims advanced by the applicant are unrelated to defalcation by a licensee and are not within the Tribunal's jurisdiction.

2. I have also concluded that the claims against Trenfocus and Robian are frivolous and misconceived as it is not reasonably arguable that either licensee engaged in defalcation.

3. No doubt the applicant will be disappointed by this outcome.  As I have endeavoured to explain, reimbursement from the Fidelity Account is limited.  It requires that defalcation has occurred and even then, compensation is confined to the extent of the defalcation.

4. Therefore, both applications for dismissal are granted and VR 39 of 2024 and VR 53 of 2024 are dismissed.

Orders

The Tribunal orders:

1.Applications VR 39 of 2024 and VR 53 of 2024 are dismissed pursuant to s 47(2) of the State Administrative Tribunal Act 2004 (WA).

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.

MR J O'Sullivan, SENIOR MEMBER

23 JULY 2025