COMMISSIONER FOR CONSUMER PROTECTION and DEL VALLE

[2024] WASAT 36

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL

ACT: SETTLEMENT AGENTS ACT 1981 (WA)

CITATION:   COMMISSIONER FOR CONSUMER PROTECTION and DEL VALLE [2024] WASAT 36

MEMBER:   MR D AITKEN, SENIOR MEMBER

MS C CONLEY, MEMBER

MR B POUND, SESSIONAL MEMBER

HEARD:   10 APRIL 2024

DELIVERED          :   29 APRIL 2024

FILE NO/S:   VR 55 of 2023

BETWEEN:   COMMISSIONER FOR CONSUMER PROTECTION

Applicant

AND

SHANNON MARIE DEL VALLE

Respondent

Catchwords:

Settlement agent - Proper cause for disciplinary action - Contravention of requirements relating to trust accounts - Determination of appropriate penalty - Reprimand and permanent disqualification - Costs

Legislation:

Code of Conduct for Agents and Sales Representatives 2011 (WA), s 7
Criminal Code Act Compilation Act 1913 (WA), s 82
Fair Trading Act 2010 (WA), s 55
Legal Profession Act 2008 (WA) (Repealed)
Legal Profession (State Administrative Tribunal) Determination 2022 (WA)
Legal Profession Uniform Law Application Act 2022 (WA), s 133, s 299
Real Estate and Business Agents Act 1978 (WA), s 68(4)
Real Estate and Business Agents and Sales Representatives Code of Conduct, s 7
Settlement Agents Act 1981 (WA), s 3(1), s 15, s 26(1), s 27, s 27(2), s 30(1), s 30(2), s 30(3), s, 30(3A)(a) s 30(3a)(a), s 31(1), s 31(2), s 31(2A), s 34(1), s 34(2), s 34AA, s 46(1), s 46(4), s 49, s 49(1), s 49(4), s 49(5), s 49(6), s 65(1)(a), s 74(1), s 83, s 83(2)(b), s 84, s 84(1)(b), s 84(2), s 84(2)(c), s 84(2)(c)(ii), s 84(2)(d), s 85(1)(c), s 120(1),
Settlement Agents Code of Conduct 2016 (WA), r 8, r 14, r 32, cl 5
Settlement Agents Regulations 1982 (WA)
State Administrative Tribunal 2004 (WA), s 9(b), s 63(2), s 87, s 87(1), s 87(2)

Result:

Cause exists for disciplinary action against the respondent and the respondent is reprimanded and permanently disqualified from holding a settlement agent's licence and triennial certificate

Category:    B

Representation:

Counsel:

Applicant	:	Mr Saxon King
Respondent	:	No Appearance

Solicitors:

Applicant	:	Department Of Mines, Industry Regulation And Safety – Consumer Protection Division (In House Legal Counsel)
Respondent	:	N/A

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

Briginshaw v Briginshaw (1938) 60 CLR 336

Chiropractic Board of Australia and Ebtash [2020] WASAT 86 (S)

Commissioner for Consumer Protection and Chesson [2014] WASAT 128

Commissioner for Consumer Protection and Sunrun Nominees Pty Ltd [2017] WASAT 31

Grljusich v Andrews [2002] WASCA 206

Legal Profession Complaints Committee and Goldsmith [2022] WASAT 43

Legal Services and Complaints Committee and Butler [2023] WASAT 124

Mavaddat v Real Estate & Business Agents Supervisory Board [2009] WASCA 179

Medical Board of Australia and Tan [2022] WASAT 57 (S)

Panegyres v Medical Board of Australia [2020] WASCA 58

Paridis v Settlement Agents Supervisory Board [2007] WASCA 97

Perth Central Holdings Pty Ltd and Doric Constructions Pty Ltd [No 2] [2008] WASAT 302

Ransberg Pty Ltd and City of Bayswater [2016] WASAT 43 (S)

Real Estate and Business Agents Supervisory Board and Carmello Charles Parrella T/A Charles Parrella & Associates [2008] WASAT 115

Real Estate and Business Agents Supervisory Board v LJW [2011] WASCA 35

Settlement Agents Supervisory Board and Kolaran Holdings Pty Ltd [2005] WASAT 109 (S)

Settlement Agents Supervisory Board and Paridis [2006] WASAT 292

Settlement Agents Supervisory Board and Poulton [2010] WASAT 65

Settlement Agents Supervisory Board v Property Settlement Services Pty Ltd [2009] WASCA 143

Smith and Murray Districts Carriage Driving Club Incorporated [2021] WASAT 44 (S)

Sunsie Pty Ltd as Trustee for the Sunsie Trust v KDD Conveyancing Services Pty Ltd [2023] WASC 18

The Owners of 52 Mill Point Road Strata Plan 62152 and Hanssen Pty Ltd [2021] WASAT 102 (S)

REASONS FOR DECISION OF THE TRIBUNAL:

Introduction

1. The Commissioner for Consumer Protection (applicant) is designated under s 55 of the Fair Trading Act 2010 (WA) (Fair Trading Act).

2. In 2021, the applicant commenced an investigation into the activities of Ms Shannon Marie Del Valle (respondent), a settlement agent licensed under the Settlement Agents Act 1981 (WA) (SA Act).

3. On 13 June 2023, the applicant filed an application with the Tribunal, alleging that there was proper cause for disciplinary action against the respondent under s 83 of the SA Act because the applicant had, on multiple occasions, paid moneys withdrawn from a trust account to a person or persons not lawfully entitled or authorised to receive them in contravention of s 49(5) of the SA Act and because that conduct renders her unfit to hold a settlement agent's licence (Application).[1]

   [1] Applicant's Grounds filed on 13 June 2023 at paras 19-20.

4. For the reasons which follow, the Tribunal has decided that:

   (a)there is proper cause for disciplinary action against the respondent; and

   (b)the appropriate penalty to be imposed on the respondent in respect of her conduct is a reprimand and permanent disqualification.

Issues for Determination

1. The issues for determination by the Tribunal in relation to the Application are:

   (1)whether the Tribunal has jurisdiction to deal with the Application and, in particular, whether the Application was brought within time;

   (2)whether there is proper cause for disciplinary action against the respondent and, specifically:

   (a)whether the respondent contravened s 49(5) of the SA Act; and/or

   (b)is otherwise unfit to hold a settlement agent's licence; and

   (3)if there is proper cause for disciplinary action against the respondent, what is the appropriate penalty to be imposed by the Tribunal.

The legislative framework

1. In Sunsie Pty Ltd as Trustee for the Sunsie Trust v KDD Conveyancing Services Pty Ltd [2023] WASC 18 (Sunsie) at [16], Archer J described the SA Act as follows:

   The [SA Act] provides for the licensing of settlement agents and sets out various requirements as to trust accounts.  It regulates the manner in which settlement money received by agents is to be treated.  It establishes a framework within which agents can be disciplined or prosecuted for breaching provisions of the [SA Act].  It establishes the Fidelity Guarantee Account.

Licensing requirements

1. Under the SA Act, a real estate settlement agent and a business settlement agent must be licensed and hold a triennial certificate in respect of the licence.[2]

   [2] SA Act, s 26(1).

2. The prerequisites to the issue of a licence to an individual are set out in s 27 of the SA Act. In particular, the applicant must be satisfied that the individual:

   (a)is of or over the age of 18 years; and

   (b)is a person of good character and repute and a fit and proper person[3] to hold a licence; and

   (c)has sufficient material and financial resources available to enable them to comply with the requirements of the SA Act; and

   (d)is ordinarily resident in the State; and

   (e)understands fully the duties and obligations imposed by the SA Act on settlement agents.

   [3] See also SA Act, s 27(2).

3. A licence issued under the SA Act is continuous.[4] However, a licensee under the SA Act cannot carry on a business as a real estate settlement agent or a business settlement agent unless the licensee also holds a current triennial certificate.[5]  A licensee ceases to be licensed if, inter alia, the licensee does not hold a current triennial certificate in respect of the licence.[6]

   [4] SA Act, s 30(1).

   [5] SA Act, s 30(2) and (3).

   [6] SA Act, s 30(3a)(a).

4. On the grant of a real estate settlement agent's licence and a business settlement agent's licence, the applicant grants the licensee a certificate (known as a triennial certificate) which confers on the licensee the right to carry on their respective business for a period of 3 years commencing on the date on which it is granted. [7]  A triennial certificate may be renewed for subsequent periods of 3 years.[8]

   [7] SA Act, s 31(1).

   [8] SA Act, s 31(2) and s 31(2A).

5. It is a condition of every licence that the licensee must comply with the provisions of the SA Act and the Settlement Agents Code of Conduct 2016 (WA) (Code).[9] A licensee must also comply with any special conditions to which the licensee's licence or triennial certificate is subject under s 34AA of the SA Act.[10]

Proper cause for disciplinary action

[9] SA Act, s 34(1).

[10] SA Act, s 34(2) and 34AA.

1. Section 83 of the SA Act relevantly provides:

   (1)The Commissioner may allege to the State Administrative Tribunal that there is proper cause for disciplinary action, as mentioned in section 84(2).

   (2)Despite the surrender by a person of a licence or triennial certificate or a licensee ceasing to be licensed or to hold a triennial certificate —

   (a)an allegation under subsection (1) in respect of a person may be made to the State Administrative Tribunal not later than 12 months after the day on which the licence or certificate was surrendered or the licensee ceased to be licensed or ceased holding the certificate; and

   (b)the State Administrative Tribunal may exercise the powers conferred by section 84, other than the power to suspend or cancel the person's licence or certificate.

2. Section 84(2)(c) of the SA Act relevantly provides that there shall be proper cause for disciplinary action if the settlement agent is acting or has acted in breach of the requirements of the SA Act or the Code.

3. Section 84(2)(d) of the SA Act relevantly provides that there shall be proper cause for disciplinary action if any other cause exists that, in the opinion of the State Administrative Tribunal, renders the settlement agent unfit to hold a licence.

4. Section 49 of the SA Act relevantly provides:

   …

   (4)Settlement moneys received by a settlement agent in the course of arranging or effecting a settlement shall not be withdrawn from a trust account except for the purpose of completing the settlement, or in accordance with the contract entered into between the parties to the transaction, or as otherwise authorised by this Act, or by the prior written consent of all parties to the transaction involved.

   (5)A settlement agent shall pay moneys withdrawn from a trust account to the person or persons lawfully entitled or authorised to receive them.

5. A 'settlement agent' includes a 'real estate settlement agent.'[11]

Penalty

[11] SA Act, s 3(1).

1. Section 84 of the SA Act relevantly provides:

   (1)If, in a proceeding commenced by an allegation under section 83 the State Administrative Tribunal is satisfied that proper cause exists for disciplinary action, the State Administrative Tribunal may do any one or more of the following things —

   (a)reprimand or caution the settlement agent;

   (b)impose a fine not exceeding $10 000 on him;

   (c)suspend or cancel his licence and any triennial certificate in respect thereof and, in addition, disqualify him either temporarily or permanently, or until the fulfilment of any condition which may be imposed by the State Administrative Tribunal or until the further order of the State Administrative Tribunal, from holding a licence or triennial certificate, or both.

   …

   (4)No penalty provided for elsewhere in this Act in relation to the conduct of a settlement agent is to be taken to limit the powers exercisable by the State Administrative Tribunal under subsection (1).

Proceedings in the Tribunal

1. A final hearing of the Application was held in the Tribunal on 10 April 2024 (Hearing).

2. The applicant filed a Statement of Issues, Facts and Contentions (applicant's SIFC)[12] and a Book of Documents (applicant's bundle)[13] prior to the Hearing.

   [12] Applicant's SIFC filed on 20 November 2023.

   [13] Applicant's bundle filed on 20 November 2023.

3. The applicant also filed an Outline of Submissions on Penalty (applicant's submissions)[14] and a Schedule of Costs (applicant's schedule of costs).[15]

   [14] Applicant's submissions filed on 10 April 2024.

   [15] Applicant's schedule of costs filed on 10 April 2024.

4. The respondent did not participate in the Hearing or file any documents for the purposes of the Hearing.

5. The Tribunal was satisfied that the respondent had retrieved emails notifying her of the date of the Hearing and the Hearing proceeded in the absence of the respondent pursuant to s 63(2) of the State Administrative Tribunal Act 2004 (WA) (SAT Act).

Evidence

1. At the Hearing:

   (a)a hearing book containing the applicant's SIFC, the applicant's bundle and the Orders of the Tribunal was prepared by the Tribunal and taken into evidence as Exhibit 1; and

   (b)a Current and Historical Company Extract from the Australian Securities and Investment Commission (ASIC) in respect of Real Asset Conveyancing Pty Ltd was taken into evidence as Exhibit 2.

2. Mr Michael Shanahan of McGrathNichol was the only person called to give evidence at the Hearing on behalf of the applicant.  Mr Shanahan confirmed the correctness of the contents of his forensic accounting and audit report (Forensic Audit Report).[16]

   [16] Exhibit 1 at pages 52-77.

3. We accept that Mr Shanahan is appropriately qualified as an expert in the field of forensic accounting services having regard to his qualifications and experience.[17]  We accept the evidence contained in the Forensic Audit Report as it is consistent with the banking records in evidence before the Tribunal[18] and was not disputed.

   [17] Exhibit 1 at pages 51 and 57.

   [18] Exhibit 1 at pages 85-122.

Findings of the Tribunal

1. The Tribunal has observed that 'the procedure in disciplinary proceedings is, in substance, adversarial'[19] and that it is 'appropriate to apply rules relating to the standard of proof that would apply to the proof of matters in civil proceedings'.[20]  That is, the applicant has the onus of proving the allegations against the respondent to the civil standard (i.e. on the balance of probabilities).

   [19] Legal Services and Complaints Committee and Butler [2023] WASAT 124 (Butler) at [26].

   [20] Legal Profession Complaints Committee and Goldsmith [2022] WASAT 43 at [30]; and Butler at [26].

2. In these reasons, when we express ourselves to be satisfied, and make a finding, we do so on the balance of probabilities and on the basis of evidence which we regard as clear and cogent, having regard to what was said in Briginshaw v Briginshaw.[21]

   [21] Briginshaw v Briginshaw (1938) 60 CLR 336; see also Butler at [30].

3. On the basis of the evidence before the Tribunal, which is not disputed, we find:

   (a)the respondent was the sole director, secretary and shareholder of a company, Real Asset Conveyancing Pty Ltd (Agency), which was registered with ASIC on 18 June 2013;[22]

   [22] Exhibit 1 at pages 19-23.

   (b)on 21 June 2013, the applicant granted the respondent a real estate settlement agent's licence SA66594 (Licence) and a triennial certificate;[23]

   [23] Exhibit 1 at pages 24-26.

   (c)it was a condition of both the Licence and the triennial certificate that the respondent undertake a trust account seminar within 6 months of the granting of the Licence;[24]

   [24] Exhibit 1 at pages 24 and 26.

   (d)the respondent's triennial certificate was renewed in June 2016 and June 2019;[25]

   [25] Exhibit 1 at pages 27-28.

   (e)the respondent held the Licence continuously until her triennial certificate expired on 20 June 2022;[26]

   [26] Exhibit 1 at page 28.

   (f)on 29 August 2013, the applicant granted the Agency a real estate settlement agent's licence SA67047 (Agency Licence) and a triennial certificate (Agency triennial certificate);[27]

   [27] Exhibit 1 at pages 29-31.

   (g)the Agency Licence is endorsed with a notation 'Person in bona fide control:  DEL VALLE, SHANNON-SA66594';[28]

   [28] Exhibit 1 at page 31.

   (h)it was a condition of both the Agency Licence and the Agency triennial certificate that the person in bona fide control of the Agency undertake a trust account seminar within 6 months of the granting of the Agency Licence;[29]

   [29] Exhibit 1 at pages 29 and 31.

   (i)the Agency triennial certificate was renewed in 2016 and 2019;[30]

   [30] Exhibit 1 at pages 32-33.

   (j)the Agency was deregistered by ASIC on 13 November 2022;[31]

   [31] Exhibit 2.

   (k)the Agency had a settlement agent's trust account (Agency Trust Account) with the following details:

   (i)Account Name:  REAL ESTATE CONVEYANCING P/L ATF REAL ASSET UNIT TRUST T/AS REAL ASSET CONVEYANCING TC 67047 SA TRUST ACCOUNT;

   (ii)BSB:  [redacted];[32]

   [32] Bank account details have been redacted to protect the security of the bank accounts.

   (iii)Account No:  [redacted];

   (l)on 30 August 2021, the Department of Mines, Industry Regulation and Safety (DMIRS) was advised by the Australian Institute of Conveyancers that they had received calls from settlement agents and members of the public alleging that the respondent had outstanding payments, client statements pending and unreturned calls;[33]

   [33] Exhibit 1 at page 58.

   (m)on 30 August 2021, Ms Jennifer Thomas, a senior investigator with the Department of Mines, Industry Regulation and Safety (DMIRS) attended the Agency's principal place of business at Suite 3, 435 Vincent Street, West Perth.[34]  Ms Thomas observed that the Agency's premises had been vacated and was told by the landlord that the Agency had been evicted on 18 August 2021 for outstanding rent;[35]

   [34] Exhibit 1 at page 59.

   [35] Exhibit 1 at page 59.

   (n)on 2 September 2021, DMIRS received information that the Agency's records were being stored in a storage facility;[36]

   [36] Exhibit 1 at pages 59, 123-124.

   (o)on 6 September 2021, a warrant was issued to Ms Thomas under the Fair Trading Act authorising the entry, search and seizure of premises described as Keep Safe Storage, 46 Railway Parade, Welshpool[37] and a number of boxes were seized during the execution of that warrant;[38]

   [37] Exhibit 1 at pages 125-126.

   [38] Exhibit 1 at pages 127-128.

   (p)a further box containing books and records was provided to DMIRS by an associate of the Agency;[39]

   [39] Exhibit 1 at page 59.

   (q)on 17 September 2021, the Tribunal, on the application of the applicant, made the following orders pursuant to s 74(1) of the SA Act in respect of the Agency:

   (i)an order suspending the Agency from carrying on its business until further order;

   (ii)an order freezing the bank accounts of the Agency; and

   (iii)an order giving the applicant authority to appoint a supervisor to the business of the Agency. [40]

   [40] Exhibit 1 at pages 36-37.

   (r)on 23 September 2021, Mr Shanahan was appointed as supervisor pursuant to the orders of the Tribunal;[41]

   [41] Exhibit 1 at pages 38-39.

   (s)in September 2021, the Director General of DMIRS entered into a contract with Mr Shanahan for the provision of supervisory and forensic auditing services in relation to the Agency;[42]

   [42] Exhibit 1 at pages 40-50.

   (t)the respondent's triennial certificate dated 21 June 2019 expired on 20 June 2022;[43]

   [43] Exhibit 1 at page 28.

   (u)on 1 July 2022, Mr Shanahan provided the Forensic Audit Report to DMIRS in respect of the Agency;[44]

   [44] Exhibit 1 at pages 52-84.

   (v)in the period between 2 November 2020 and 15 September 2021, the respondent made 15 withdrawals of money from the Agency Trust Account which were not connected with any settlement transaction (withdrawn monies);[45]

   [45] Exhibit 1 at pages 74-76.

   (w)the withdrawn monies were transferred from the Agency Trust Account to one of three other accounts

   (i)a personal account of the Respondent with the ANZ Bank (PA1) with the following details:

   I.Account name:  SHANNON MARIE DEL VALLE (ANZ Access Advantage Account);

   II.BSB: (redacted); and

   III.Account No. (redacted).

   (ii)a second personal account of the Respondent with the ANZ (PA2) with the following details:

   I.Account Name:  SHANNON MARIE DEL VALLE T/AS SHANNON MARIE DEL VALLE (Business Advantage Account);

   II.BSB: [redacted]; and

   III.Account No. [redacted].

   (iii)an Agency Credit Card Account (Credit Card) with the ANZ Bank with the following details:

   I.Account Name:  ANZ BUSINESS ONE REAL ASSET CONVEYANCING; and

   II.Account No. [redacted]; and

   (x)the Table below sets out the dates on which the withdrawn monies were withdrawn, the accounts to which the withdrawn monies were transferred, and the amounts involved:

No.	Date	To Account	Amount
1	2 November 2020	Credit Card	$2,000[46]
2	5 August 2021	PA1	$1,500[47]
3	5 August 2021	PA1	$5,000[48]
4	13 August 2021	PA1	$1,000[49]
5	23 August 2021	PA1	$1, 020[50]
6	23 August 2021	PA1	$2,010[51]
7	24 August 2021	PA1	$1,000[52]
8	24 August 2021	PA1	$1,000[53]
9	26 August 2021	PA1	$1,500[54]
10	26 August 2021	Credit Card	$1,000[55]
11	30 August 2021	Credit Card	$1,000[56]
12	1 September 2021	PA2	$5,000[57]
13	1 September 2021	Credit Card	$2,000[58]
14	10 September 2021	PA1	$2,000[59]
15	15 September 2021	PA1	$2,000[60]
TOTAL			$29,030

[46] Exhibit 1 at pages 86 and 115.

[47] Exhibit 1 at pages 87 and 92.

[48] Exhibit 1 at pages 87 and 92.

[49] Exhibit 1 at pages 87 and 93.

[50] Exhibit 1 at pages 88 and 96.

[51] Exhibit 1 at pages 88 and 96.

[52] Exhibit 1 at pages 88 and 96.

[53] Exhibit 1 at pages 88 and 96.

[54] Exhibit 1 at pages 88 and 97.

[55] Exhibit 1 at pages 88 and 117.

[56] Exhibit 1 at pages 88 and 118.

[57] Exhibit 1 at pages 90 and 105.

[58] Exhibit 1 at pages 90 and 118.

[59] Exhibit 1 at pages 90 and 99.

[60] Exhibit 1 at pages 90 and 107.

(y)the bank records verify the withdrawal of each of the 15 amounts constituting the withdrawn monies and the receipt of each of those amounts in PA1, PA2 or the Credit Card;[61]

(z)each of the 15 amounts constituting the withdrawn monies were transferred from the Agency Trust Account to PA1, PA2 and the Credit Card using mobile phone/internet banking;[62]

(aa)the respondent was the only name registered for internet/online banking for the Agency Trust Account;[63]and

(bb)the Agency Trust Account was in deficit in a further amount of $5,991.57.[64]

[61] Exhibit 1 at pages 85-119.

[62] Exhibit 1 at pages 101-103; 108-109; 120-122.

[63] Exhibit 1 at pages 74 and 130.

[64] Exhibit 1 at page 74.

Determination of Issues

Issue 1:  jurisdiction of the Tribunal

1. Pursuant to s 83(1) of the SA Act, the applicant may allege to the Tribunal that there is proper cause for disciplinary action, as mentioned in section 84(2). An allegation may be made to the Tribunal not later than 12 months after the day on which the licence or triennial certificate was surrendered or the licensee ceased to be licensed or ceased holding the triennial certificate.

2. The applicant's Application alleges that there is proper cause for disciplinary action against the respondent and, specifically, that the respondent has contravened a requirement of the SA Act, namely s 49(5).

3. We have found that the respondent's triennial certificate expired on 20 June 2022.[65]

   [65] See [28](t) above.

4. We also find that the respondent's Application was lodged with the Tribunal via email on 16 June 2023.[66] 

   [66] Exhibit 1 at pages 8-9.

5. We find that the Application was lodged prior to the 12-month time limitation which applies where a licence or triennial certificate was surrendered or the licensee ceased to be licensed or ceased holding the triennial certificate.

6. Accordingly, we are of the view that the Tribunal has jurisdiction to deal with the Application.

Issue 2:  proper cause for disciplinary action

1. We have found that the respondent was at all material times a settlement agent and that, on 15 occasions between 2 November 2020 and 15 September 2021, the respondent withdraw money from the Agency Trust Account and paid the money into the following bank accounts:  PA1, PA2 or Credit Card.

2. On the basis of the expert evidence of Mr Shanahan contained in the Forensic Audit Report which we have accepted, we are satisfied and find that the respondent and the Agency were not persons lawfully authorised or entitled to receive the money withdrawn from the Agency Trust Account on those 15 occasions.

3. We also find that each of the 15 transactions constituted a breach of s 49(5) of the SA Act.

4. Proper cause for disciplinary action exists if a settlement agent has acted in breach of the requirements of the SA Act.[67]

   [67] SA Act, s 84(2)(c)(ii).

5. Accordingly, we are satisfied and find that there is proper cause for disciplinary action against the respondent pursuant to s 84(2) of the SA Act because the respondent breached the requirements of s 49(5) of the SA Act on 15 occasions.

6. Proper cause for disciplinary action also exists if any other cause exists that, in the opinion of the Tribunal renders the settlement agent unfit to hold a licence.[68]

   [68] SA Act, s 84(2)(d).

7. The applicant has contended that there is proper cause for disciplinary action because the respondent's conduct in engaging in the unauthorised withdrawals renders the respondent unfit to hold a settlement agent's licence.[69]

   [69] Applicant's SIFC at paras 27 and 30 (Exhibit 1 at pages 14-15).

8. The applicant cannot rely on the same conduct alleged in respect of s 84(2)(c) of the SA Act, or alleged breaches of s 49(4) of the SA Act, as a separate cause for disciplinary action under s 84(2)(d) of the SA Act. This is because s 84(2)(d) of the SA Act refers to 'any other cause' which, in our view, means any cause other than those specified in paragraphs (a), (b) and (c) of s 84(2). A cause for the purposes of s 84(2)(d) of the SA Act might include a conviction for an offence, other than an offence contrary to the SA Act. For example, in Settlement Agents Supervisory Board and Poulton [2010] WASAT 65 (Poulton), Mr Poulton had been convicted of two offences of bribing a public officer contrary to s 82 of the Criminal CodeAct Compilation Act 1913 (WA) and the Tribunal was satisfied that there was proper cause for disciplinary action under s 84(2)(d) of the SA Act.

9. Accordingly, we are not satisfied that there is proper cause for disciplinary action against the respondent pursuant to s 84(2)(d) of the SA Act.

Issue 3:  penalty

1. We have found that there is proper cause for disciplinary action against the respondent because the respondent breached s 49(5) of the SA Act on 15 occasions. Accordingly, the Tribunal must consider the appropriate penalty to be imposed.

2. The applicant has sought the following orders against the respondent by way of penalty:

   (a)a reprimand;

   (b)a fine not exceeding $10,000; and

   (c)disqualification from holding a licence or triennial certificate until further order of the Tribunal.[70]

   [70] Applicant's Orders Sought dated 13 June 2023 (Exhibit 1 at page 1); and applicant's submissions at paras 2-3.

3. At the Hearing, the applicant did not pursue the imposition of a fine since the respondent had repeatedly said that she was impecunious.

4. In Paridis v Settlement Agents Supervisory Board [2007] WASCA 97 (Paridis 2), Buss JA, with whom Pullin and Wheeler JJA agreed, set out some general principles relating to disciplinary sanctions. His Honour said at [25]:

   The character and purpose of disciplinary proceedings against a member of a profession have been examined on numerous occasions. The object of those proceedings is the protection of the public and the maintenance of proper professional standards. The maintenance of proper professional standards is conducive to the protection of the public.  Disciplinary proceedings are not designed to punish the person who is disciplined[.]

5. In Paridis 2 at [30], Buss JA set out a number of relevant factors in assessing a penalty under s 84(1) of the SA Act. Those factors are set out below:

   (1)the conduct giving rise to the allegations and its seriousness;

   (2)the settlement agent's explanation for the conduct;

   (3)the necessity to maintain proper standards among settlement agents and maintain public confidence in relation to the professional and ethical behaviour of settlement agents;

   (4)the necessity for general deterrence; and

   (5)personal matters, of a mitigatory nature, including the settlement agent's professional behaviour before and after the incidents in question, and the extent of the settlement agent's rehabilitation.

6. In Commissioner for Consumer Protection and Sunrun Nominees Pty Ltd [2017] WASAT 31 (Sunrun) at [68], a matter involving a trust account maintained under the Real Estate and Business Agents Act 1978 (WA) (REBA Act), the Tribunal identified 12 factors to be considered, namely:

   (1)any need to protect the public against further misconduct by the agent;

   (2)the need to protect the public through general deterrence of other agents from similar conduct;

   (3)the need to protect the public and maintain public confidence in the profession by reinforcing high professional standards and denouncing transgressions and thereby articulating the high standards expected of the profession such that, even where there may be no need to deter an agent from repeating the conduct, the conduct is of such a nature that the Tribunal should give an emphatic indication of its disapproval;

   (4)in the case of conduct involving misleading conduct, including dishonesty, whether the public and fellow agents can place reliance on the word of the agent;

   (5)whether the agent has breached any Act, regulations, guidelines or code of conduct issued by the relevant professional body and whether the agent has done so knowingly;

   (6)whether the agent's conduct demonstrated incompetence, and if so, to what level;

   (7)whether or not the incident was isolated such that the Tribunal can be satisfied of his or her worthiness or reliability for the future;

   (8)the agent's disciplinary history;

   (9)whether or not the agent understands the error of his or her ways, including an assessment of any remorse and insight (or a lack thereof) shown by the practitioner, since an agent who fails to understand the significance and consequences of misconduct is a risk to the community;

   (10)the desirability of making available to the public any special skills possessed by the agent;

   (11)the agent's personal circumstances at the time of the conduct and at the time of imposing the sanction.  However, the weight given to personal circumstances cannot override the fundamental obligation of the Tribunal to provide appropriate protection of the public; and

   (12)any other matters relevant to the agent's fitness to practise and other matters which may be regarded as aggravating the conduct or mitigating its seriousness.

7. The factors set out in [48] and [49] above provide a useful framework or reference point for considering whether the penalties proposed by the applicant are appropriate, and we have adopted them in this decision.  We also note that the applicant's submissions addressed each of the factors.[71]

The conduct giving rise to the allegations and its seriousness

[71] Applicant's submissions at paras 49-74.

1. We have found that on 15 occasions between 2 November 2020 and 15 September 2021, the respondent withdrew money from the Agency's Trust Account and paid the money otherwise than to persons lawfully entitled to receive the money contrary to s 49(5) of the SA Act. The total money withdrawn amounted to $29,030. The money was paid into three accounts, namely two personal accounts of the respondent and an Agency credit card account.

2. We consider that the conduct of the respondent is very serious for the reasons which follow.

3. First, as was stated in Settlement Agents Supervisory Board and Paridis [2006] WASAT 292 (Paridis) at [93], a trust account is the core of the practice of any settlement agent. The Tribunal has previously said that '[a]ny failure on the part of a settlement agent to strictly observe the statutory requirements in relation to trust accounts is serious matter.' The payment of moneys withdrawn from the Agency's Trust Account into the personal accounts of the respondent and a credit card account of the Agency of which the respondent was the sole director, involves a serious breach of trust.

4. Second, given that the relationship between a settlement agent and its principal(s) is a fiduciary relationship,[72] we also consider that the conduct of the respondent involved a breach of the respondent's fiduciary duties to the Agency's clients.

   [72] Settlement Agents Supervisory Board v Property Settlement Services Pty Ltd [2009] WASCA 143 at [68]. See also rule 14 of the Code.

5. Third, a contravention of s 49(5) of the SA Act constitutes a criminal offence.[73]  The maximum penalty for this offence is a fine of $25,000, or 2 years' imprisonment.[74] Further, if a licensee is convicted of an offence contrary to s 49(5), then their licence and any triennial certificate is automatically cancelled.[75] The penalty for, and consequences of, a contravention of s 49(5) reflect the serious nature of a breach of this section. However, as was noted in Sunsie at [19]:

   Section 65 of the [SA Act] provides that a person who contravenes or does not observe any of the provisions of Division 2 of Part IV (in which s 49 appears) commits an offence. A person accused of an offence under s 65 would be entitled to rely on any available defence, including the defences of honest claim of right or mistake of fact that, if raised, would have to be negated by the prosecution beyond reasonable doubt. Therefore, a person whose conduct breached s 49 may ultimately be found not to be criminally responsible for that conduct and therefore not guilty of the offence created by s 65.

   [73] SA Act, s 120(1).

   [74] SA Act, s 65(1)(a).

   [75] SA Act, s 85(1)(c); Sunsie at [304].

6. Fourth, the conduct of the respondent is serious because the sums involved contributed to a total deficit in the Agency Trust Account in the sum of $35,021.57.

7. Fifth, the respondent's conduct was a very serious breach of her obligations as a settlement agent.  Her conduct involved deliberate and calculated breaches of proper professional and ethical standards of behaviour and struck at the very heart of the relationship between a settlement agent and a settlement agent's clients.

8. Sixth, as the applicant has submitted,[76] the respondent's conduct occurred in the course of carrying out her occupation as a licensed settlement agent.  Her conduct must have caused stress and anxiety to buyers and sellers who had engaged the respondent's services as a settlement agent and this is reflected in the number of complaints received by DMIRS.

   [76] Applicant's submissions at para 25.

9. In the Forensic Audit Report we note that Mr Shanahan stated that, at the time of his appointment, DMIRS had received complaints from or on behalf of the Agency's clients regarding 35 properties (two of those properties were apartments with 5 and 16 affected apartments respectively).[77]  In each case, the complainants advised that they had not been able to make contact with the respondent.[78]  Accordingly, a significant number of persons were affected by the respondent's conduct.

The settlement agent's explanation for the conduct

[77] Exhibit 1 at pages 58-59.

[78] Exhibit 1 at page 59.

1. The respondent has not provided any explanation for her conduct to the applicant or the Tribunal.  The respondent did not avail herself of the opportunity to provide a responsive Statement of Issues, Facts and Contentions or a book of documents in accordance with orders made by the Tribunal on 27 February 2024.  The respondent did not participate in the Hearing in the Tribunal either personally or by means of written submissions (although she did attend some of the directions hearings and mediations.)

Any need to protect the public against further misconduct by the settlement agent

1. The respondent's triennial certificate expired on 20 June 2022.  Accordingly, the respondent is not currently licensed to act as a settlement agent.

2. The applicant has contended as follows:

   The holding of trust money is fundamental to the role of a settlement agent.  For a settlement agent to take money belonging to their clients demonstrates a serious breach of fiduciary duty, and a lack of honesty and integrity, which render it impossible to safely accredit that person to the public.[79]

   [79] Applicant's SIFC at para 29 (Exhibit 1 at pages 5-15).

3. In Real Estate and Business Agents Supervisory Board and Carmello Charles Parrella T/A Charles Parrella & Associates [2008] WASAT 115 (Parrella) at [42], the Tribunal stated that '[t]he public must be protected from those who do not deal with trust monies in an appropriate manner'. Although that case concerned a real estate agent, the same principle applies to settlement agents since both types of agents are required to establish and maintain trust accounts.

4. We are of the view that the public must be protected from a settlement agent who has paid money withdrawn from a trust account established and maintained under the SA Act into to their own personal accounts and a credit card account of a company of which they are the sole director.

The need to protect the public through general deterrence of other settlement agents

1. In Poulton at [22]-[23] the Tribunal said:

   Settlement agents play an important role in the completion of real estate transactions, by arranging and effecting the settlement of those transactions. The range and complexity of the functions of a real estate settlement agent can be seen in cl 1 and cl 2 of Sch 2 to the SA Act. The role of a settlement agent will necessarily involve, amongst other things, the preparation of documents and the handling of large sums of money through the use of a trust account. The satisfactory conduct of the work of a settlement agent requires, amongst other things, a knowledge and understanding of the law in relation to real estate transactions and the ability to effect those transactions in compliance with the relevant legal requirements.

   Given the significance of real estate transactions to the individuals concerned in those transactions, the importance to the economy of real estate transactions, and the need for certainty and stability in those transactions, it is essential that the community can be confident that the work done by settlement agents in arranging and effecting the settlement of real estate transactions will be performed competently, honestly and in compliance with applicable legal requirements.

2. We are of the view that the public must be protected from settlement agents who pay money withdrawn from a trust account to a person who is not lawfully entitled or authorised to receive that money.  This is especially so when the settlement agent pays the money into their own personal bank accounts or into a company bank account of which they are the sole director.

3. The penalty in this case must be sufficient to provide a deterrent to settlement agents generally 'from any departure from the regulatory requirements relating to trust accounts.'[80] This factor is a compelling reason for a strong penalty in this case.

The need to protect the public by reinforcing high professional standards and denouncing transgressions

[80] Settlement Agents Supervisory Board and Kolaran Holdings Pty Ltd [2005] WASAT 109 (S) (Kolaran) at [8].

1. In Commissioner for Consumer Protection and Chesson [2014] WASAT 128 (Chesson) at [49] the Tribunal observed that '[i]t is clear from the provisions of s 46(1) and s 46(4) [of the SA Act] that all of the functions in respect of which a settlement agent is licensed are related to the arranging or effecting of a settlement'. That necessarily involves the payment of all money received in respect of that settlement into a trust account.

2. Settlement agents often receive or hold large sums of money on behalf of another person in respect of settlements to be arranged or effected, or arranged or effected, by the settlement agent.  That is a significant responsibility.

3. The significance of that responsibility is reflected in the onerous obligations imposed on a settlement agent in respect of the trust account which they are required to maintain under the SA Act. Those obligations include restrictions on payments out of the trust account and stringent record-keeping requirements. In particular, a settlement agent must keep full and accurate accounts of all money received or held by the settlement agent on account of any other person and all payments made by the settlement agent of that money.[81]

   [81] Rule 32 of the Code.

1. In Paridis at [93] the Tribunal stated:

   A trust account is the core of the practice of any settlement agent. It is into this account which settlement monies are paid. The settlement agent has stewardship of these funds and the public must have complete confidence that the funds are protected and that the trust account is maintained to the highest standards. The public is entitled to expect a trust account is being maintained in accordance with the requirements of the SA Act. If it is not, the consequence is that their funds are at risk. For that reason persons entrusted to keep such accounts in respect of certain professions or disciplines are generally licensed and regulated. In the case of settlement agents this is provided for in the SA Act and the Code. A member of the public armed with the knowledge that settlement agents are subject to the SA Act and the Code, should not have to enquire further, they should be able to proceed with the assurance that their monies will be accounted for in a consistent and meticulous way.

2. Conduct of the kind engaged in by the respondent has the potential to seriously undermine the public's confidence in settlement agents and the ability of settlement agents to maintain trust accounts in accordance with the SA Act. Accordingly, we take the view that the penalty imposed must be of sufficient severity so as to maintain public confidence in settlement agents. Further, the penalty must involve public condemnation of conduct of this nature by the Tribunal so as to reassure the public.

Dishonesty

1. In Poulton at [26], the Tribunal stated that honesty and a respect for the law are amongst the attributes which are essential to perform the functions of a settlement agent.[82]

   [82] See also Mavaddat v Real Estate & Business Agents Supervisory Board [2009] WASCA 179 (Mavaddat) at [74].

2. We consider that the respondent's conduct involved dishonesty because she withdrew money from the Agency's Trust Account on 15 occasions and placed it in either her own personal bank accounts or the Agency's credit card account.  This was calculated dishonesty.

3. The applicant submitted that the unauthorised withdrawal of client funds from a trust account is an act akin to stealing as a servant and that it is a contravention of significant dishonesty for the purposes of financial gain at the expense of clients to whom the respondent owed statutory and fiduciary duties.[83]  We agree.  The same can be said of the payment of those funds to a person or persons not authorised to receive them.

Whether the settlement agent has breached any Act, regulations, guidelines or code of conduct issued by the relevant professional body and whether the settlement agent has done so knowingly

[83] Applicant's submissions at paras 27 and 57.

1. We have found that the respondent breached s 49(5) of the SA Act on 15 occasions.

2. Under rule 8 of the Code, a licensee, when acting as a settlement agent for a client, must be honest in all dealings with the client, other settlement agents and other persons involved in a transaction. We consider that the conduct of the respondent breached rule 8 of the Code.

3. Under rule 14 of the Code, a licensee must comply with any obligation that may arise as a result of any fiduciary relationship between the licensee and a client. We consider the conduct of the respondent breached rule 14 of the Code.

4. We also find that the respondent breached the SA Act and rules 8 and 14 of the Code knowingly. This is for the following reasons.

5. First, it was a condition of the Licence and triennial certificate and the Agency Licence and Agency triennial certificate granted in 2013 that the respondent undertake a trust account seminar so the respondent must have been aware of her obligations with respect to money in the Agency Trust Account.

6. Second, under clause 5 of the Code, a licensee must have a complete knowledge of and comply with:

   (a)the SA Act, the Settlement Agents Regulations 1982 (SA Regulations) and the Code; and

   (b)the duties and obligations imposed on a licensee by the SA Act, the SA Regulations and the Code.

7. Third, all but one of the transactions occurred after the Agency was evicted from the Agency's business premises and was no longer trading.

Incompetence

1. We consider that the respondent's conduct went beyond mere incompetence. The respondent's conduct demonstrated a blatant disregard for the requirements of the SA Act relating to trust accounts which has led to the Agency Trust Account being in deficit.

Whether or not the incident was isolated such that the Tribunal can be satisfied of his or her worthiness or reliability for the future

1. We have found that the respondent withdraw money from the Agency Trust Account on 15 occasions over a period of 10 months between November 2020 and September 2021.  Accordingly, the conduct of the respondent was not an isolated incident.

The settlement agent's disciplinary history

1. The applicant submitted that the respondent has no disciplinary history[84] and there is no evidence before the Tribunal to the contrary.

Whether or not the agent understands the error of his or her ways, including an assessment of any remorse and insight (or a lack thereof) shown by the practitioner, since an agent who fails to understand the significance and consequences of misconduct is a risk to the community

[84] Applicant's submissions at para 63.

1. The respondent did not participate in the proceedings in the Tribunal.  Accordingly, we cannot make any allowance for remorse, insight or understanding.

The desirability of making available to the public any special skills possessed by the agent

1. There is no evidence that the respondent possesses special skills not otherwise available to the public in Western Australia.

The agent's personal circumstances at the time of the conduct and at the time of imposing the sanction

1. The respondent has not provided any information to the Tribunal concerning her past or current personal circumstances.

2. The applicant submitted that the respondent had indicated that she is impecunious.  However, there is no evidence before the Tribunal concerning the respondent's impecuniosity and the Tribunal is not prepared to draw an inference that the respondent is impecunious simply because she was evicted from the Agency's principal place of business for non-payment of rent.

Any other matters relevant to the agent's fitness to practise and other matters which may be regarded as aggravating the conduct or mitigating its seriousness

1. During the Hearing, and in response to questions asked by the Tribunal, Mr King advised on behalf of the applicant that as far as the applicant was aware:

   (a)no criminal charges had been laid against the respondent in respect of her conduct;

   (b)no civil proceedings had been commenced against the respondent in respect of her conduct;

   (c)the respondent had not repaid, or made any efforts to repay, any money taken from the Agency Trust Account; and

   (d)there had been claims made against the Fidelity Fund in respect of the respondent's conduct and some claims had been approved.

2. We are not aware of any other matters relevant to the respondent's fitness to practise and other matters which may be regarded as aggravating the conduct or mitigating its seriousness.

Other similar cases

1. The penalty or penalties to be imposed where the Tribunal has found that there is proper cause for disciplinary action must be determined having regard to the facts of the case before the Tribunal and the disciplinary measures which are necessary to protect the public.

2. There are a few cases to which the Tribunal has had regard in coming to a decision about an appropriate penalty. Some of the cases relate to the imposition of a penalty for a contravention of s 49(5) of the SA Act or other subsections of s 49. Other cases relate to the imposition of a penalty for a contravention of the trust account provisions of the REBA Act which are in similar terms to the trust account provisions of the SA Act.

3. In Kolaran, Kolaran Holdings Pty Ltd transferred money, which it had collected to pay stamp duty, from its trust account into an interest bearing account for a short period of time. Between 3 October 1997 and 31 July 2001, the sum of $5,796,729 was transferred and between 3 August 2001 and 31 July 2003 the sum of $6,011,768.65 was transferred. The interest on the short term deposits was then paid for the benefit of the Kolaran Holdings Pty Ltd or its nominees. The sum of $31,962.23 was paid in interest during the period in question. The conduct had the effect of depriving the Board Interest Account of the interest it would have received under the SA Act and meant the funds, once transferred, were no longer subject to the audit requirements of the SA Act. The Tribunal was of the view that the misapplication of trust funds contrary to s 49(4) of the SA Act called for a significant penalty and determined that the appropriate penalty was a fine of the maximum amount, namely $10,000, together with a reprimand.[85]  The Tribunal concluded that suspension was not warranted.[86]

   [85] Kolaran at [18].

   [86] Kolaran at [4].

4. In Paridis, Ms Paridis was found to have committed a number of breaches of the SA Act and the Code, including 19 breaches of s 49(6) of the SA Act in that she failed to correctly balance her trust account and to certify that this had been done in her records. The conduct took place over a period of 19 months. The Tribunal suspended the respondent's licence and triennial certificate for 12 months.[87]  The Tribunal disagreed with the Board's submission that the respondent's licence be cancelled and that she be permanently disqualified from holding a licence because '[t]o do so would be to find that Ms Paridis is incapable of reestablishing herself over time and that cannot be said on the evidence presented to the Tribunal (see Grljusich v Andrews [2002] WASCA 206).' Both parties sought leave to appeal against the decision of the Tribunal but each application was dismissed. However, the Court of Appeal was satisfied that the 'Tribunal's decision was within the limits of a sound exercise of the Tribunal's discretion'[88] and that 'the penalty was not disproportionate or manifestly excessive'.[89]

   [87] Paridis at [101].

   [88] Paridis 2 at [32].

   [89] Paridis 2 at [32].

5. In Chesson, Mr Chesson used his settlement agent's trust account for the receipt and distribution of funds for a purpose other than to complete a settlement transaction. Mr Chesson allowed money to be paid into and out of the trust account when the money was not directly related to the settlement of a real estate or business transaction. The Tribunal accepted that there was no financial impropriety on behalf of the respondent but that the contravention stemmed from an incorrect understanding of the requirements of the SA Act.[90] The Tribunal was of the view that the failure of the respondent to maintain a trust account exclusively for the purposes of the SA Act, contrary to s 49(1) of the SA Act, warranted a penalty at the lower end of the scale and imposed a caution.[91]

   [90] Chesson at [73] and [76]-[77].

   [91] Chesson at [79].

6. In Sunrun, Mr Torre, a real estate sales representative, was found to have contravened s 68(4) of the REBA Act in respect of 11 transactions. Nine of those transactions involved Mr Torre authorising Sunrun Nominees Pty Ltd (Sunrun Nominees), a company of which he was a director and which held a real estate agent's licence and a triennial certificate, to withdraw its commission prior to the time when the commission was payable. One of the transactions related to the transfer of a deposit received by Sunrun Nominees in respect of a real estate transaction into a separate interest-bearing account without the consent of the vendor. The final transaction related to the deposit of two amounts totalling $6,542.41 into Mr Torre's personal bank accounts when he was not entitled to those funds. Mr Torre was also found to have contravened s 7 of the Code of Conduct for Agents and Sales Representatives 2011 (WA) by obtaining the consent of the vendor of the property to the early receipt of the commission when he knew that the receipt was in contravention of the REBA Act. Mr Torre admitted those contraventions and refunded the amount of $6,542.61 to the vendor of the property.[92]  The Tribunal imposed a global penalty by which Mr Torre's licence as a real estate representative was suspended for a period of 3 months and imposing a fine of $12,000. 

   [92] Sunrun at [60].

7. In Parrella, Mr Parrella, the holder of a real estate and business licence and triennial certificate under the REBA Act, admitted that he had made unauthorised withdrawals from trust accounts which caused a deficiency in the trust funds. The funds were transferred to the general trading account of the business. There were 27 identified unlawful transactions. The total amount of funds withdrawn amounted to $668,964.51. Mr Parrella was also found to have failed to properly record all transactions and to have deliberately falsified accounts in an attempt to cover up his wrongdoing. A supervisor was appointed by the Tribunal and Mr Parrella was made bankrupt. The conduct of Mr Parrella resulted in 251 claims amounting to $399,072.29 being made to the Board under the Fidelity Guarantee Account. The Tribunal cancelled Mr Parrella's real estate and business licence and triennial certificate and permanently disqualified him from holding a real estate and business licence and triennial certificate.

8. We consider that the conduct of the respondent is significantly more serious than the conduct the subject of disciplinary action in Kolaran, Paridis and Chesson.  This is because the conduct of the respondent involved the misappropriation of funds in the trust account for her own benefit or the benefit of a company of which she was the sole director.

9. We consider that the conduct of the respondent is more serious than the conduct the subject of disciplinary action in Sunrun.  This is because the sum of money paid out of the Agency Trust Account and into PA1, PA2 and the Credit Card was significantly more than in Sunrun and in Sunrun Mr Torre admitted the contraventions.

10. We consider that the conduct of the respondent is less serious than the conduct the subject of disciplinary action in Parrella.  This is because the number of unlawful transactions and the total sum of money paid out of the Agency Trust Account and into PA1, PA2 and the Credit Card was significantly less than in Parrella.  However, it is also noted that Mr Parrella cooperated with the investigation by the Board and it was through his admissions that his misconduct was revealed.

A reprimand

1. A caution or reprimand involves 'a public censure for conduct' or 'a formal and stern warning or rebuke' to a person subject to disciplinary action which 'signals the need for them to refrain from such conduct in the future'.[93]

   [93] Chiropractic Board of Australia and Ebtash [2020] WASAT 86 (S) (Ebtash) at [126].

2. A reprimand is a means of informing the public, clients of settlement agents and other settlement agents that the standards expected of a settlement agent have not been met and that the settlement agent has been censured for their conduct.

3. The issue of a reprimand by the Tribunal following a finding that there is proper cause for disciplinary action against a settlement agent is a serious matter notwithstanding that the penalty will have no practical impact on the respondent's conduct as a settlement agent (since she is no longer licensed) and does not have the financial consequences of other penalties such as a fine or a disqualification from practice.

4. Notwithstanding that we also intend to impose a permanent disqualification upon the respondent, in this case we consider that a reprimand is an appropriate sanction for the protection of the public. The respondent's professional misconduct involved a very serious departure from proper professional standards in respect of a trust account. A reprimand by the Tribunal will serve to notify and remind members of the public, clients of settlement agents and settlement agents alike that non-compliance with the requirements of the SA Act relating to trust accounts is not acceptable.

Cancellation of licence and triennial certificate

1. We have found that the respondent's triennial certificate expired on 20 June 2022 and she is, therefore, no longer licensed under the SA Act by operation of s 30(3A)(a) of the SA Act. In these circumstances, it is not open to the Tribunal to suspend or cancel the respondent's licence or triennial certificate because s 83(2)(b) of the SA Act precludes the Tribunal from doing so.

Disqualification

1. We accept the applicant's submissions that disqualification is a penalty which the Tribunal may impose on the respondent notwithstanding that the Tribunal cannot suspend or cancel the respondent's licence or triennial certificate.[94]

   [94] Applicant's submissions at paras 5-20.

2. Under the SA Act, there are three options for disqualification: temporary disqualification (that is, disqualification for a specific period); permanent disqualification; and disqualification until further order of the Tribunal (that is, disqualification for an indeterminate period).

3. In Paridis 2, Buss JA, with whom Wheeler and Pullin JJA agreed, said at [80]:

   Ordinarily, where a settlement agent has been found unfit to practise, the appropriate order will be cancellation of his or her licence and disqualification (either temporarily or permanently, or until the fulfilment of any condition which may be imposed by the Tribunal or until the further order of the Tribunal) from holding a licence or triennial certificate or both.  Also, ordinarily, where a finding is not made that a settlement agent is unfit to practise, but there is, nevertheless, proper cause for disciplinary action, some lesser penalty will be warranted.  Plainly, however, each case must depend on its particular facts and circumstances.  Generally see New South Wales Bar Association v Evatt at 183; Grljusich v Andrews [2003] WASCA 206 at [141].

4. In Real Estate and Business Agents Supervisory Board v LJW [2011] WASCA 35 Newnes JA, with whom Pullin and Buss JJA agreed, said at [25]-[26]:

   It is, I think, plain that the criteria of 'fit and proper' and 'good character and repute' are not entirely discrete. While they are not identical, they overlap to a significant degree.

   The expression 'fit and proper' takes its meaning from its context, from the activities in which the person is or will be engaged and the ends to be served by those activities: Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321; The Registrar, Real Estate and Business Agents Supervisory Board v Barnett (Unreported, WASCA, Library No 970426, 26 August 1997). When used in connection with an office or vocation it normally comprises the three characteristics of honesty, knowledge and ability in the conduct of that office or vocation: Hughes and Vale Pty Ltd v New South Wales [No 2] [1955] HCA 28; (1955) 93 CLR 127, 156 - 157; Real Estate and Business Agents Supervisory Board v Barnett, (4 - 5).

5. In Ebtash at [14] it was stated that 'the power to order a period of disqualification is to be exercised for the protective purposes that apply to the disciplinary proceeding generally' and that 'all of the various aspects of the protection of the public will be relevant to whether the Tribunal orders a period of disqualification, and, if so, what that period should be'.

6. The aspects of the protection of the public include: the immediate need to protect the public from the respondent's conduct; the need to bring home to the respondent the seriousness of her conduct; the need to deter the respondent from future breaches; and the need to emphasise to other settlement agents, or reassure the public, that a certain type of conduct is not acceptable professional conduct.

7. In Parrella, the Tribunal concluded that the repetitive and calculated way in which the unauthorised withdrawals from the trust accounts were made called for the cancellation of, and permanent disqualification from holding, a real estate and business agent licence and triennial certificate.[95]  Similarly, the Tribunal concluded that the failure to properly record all transactions relating to the trust funds and the deliberation falsification of the accounts was also sufficiently serious to warrant cancellation of, and permanent disqualification from holding, a real estate and business agent licence and triennial certificate.[96]

   [95] Parella at [42].

   [96] Parella at [43].

1. In Mavaddat at [95], the Court of Appeal held that the question of whether or not an agent (in that case a real estate agent) is capable of re-establishing himself or herself in the future is a relevant matter for consideration on the question of penalty but is not the only matter.

2. The applicant submitted that disqualification until further order satisfied the need to protect the public and ensure the maintenance of proper standards of conduct within the profession.[97]  We disagree.

   [97] Applicant's submissions at para 37.

3. Having taken into account the general principles relating to penalties, the considerations relevant to those principles discussed above and the penalties imposed in broadly comparable cases, we are of the view that it is appropriate to permanently disqualify the respondent from holding a licence and triennial certificate.  This is for the following reasons:

4. First, we consider that the material before the Tribunal demonstrates that the respondent is not a fit and proper person to remain a settlement agent.  We are of the view that the respondent lacks the qualities of character which are the necessary attributes of a person entrusted with the responsibilities of a settlement agent.

5. Second, the serious nature of the conduct in which the respondent engaged warrants a permanent disqualification.  The conduct was engaged in over a sustained period of months and involved many thousands of dollars.  Each of the impugned transactions involved the dishonest misappropriation of trust funds.

6. Third, the respondent has not taken any responsibility for her actions. This is evidenced by her failure to explain her conduct to either the applicant or the Tribunal and where there is no evidence that she is not able to do so (for example, by reason of physical or mental disability). It is also evidenced by her failure to repay, or take steps to repay, the money paid out of the Agency Trust Account in contravention of s 49(5) of the SA Act.

7. Fourth, the respondent has not participated in the Hearing so there is no evidence of any circumstances which might explain the respondent's conduct, or which might mitigate the seriousness of her conduct, or which might lead the Tribunal to conclude that the respondent is taking steps to redeem herself.  Further, due to her non­participation, there is no evidence of any remorse or insight on the part of the respondent.  In addition, due to her non-participation, there are no professional or character references before the Tribunal which might have supported the view that the respondent was capable of re­establishing herself.

8. Accordingly, other than the fact that the respondent has no prior disciplinary history, there is nothing before the Tribunal which might found a belief that the respondent might in the future be able to re‑establish herself as a fit and proper person within the meaning of the SA Act. Given the seriousness of the respondent's conduct and her failure to take responsibility for her actions, we do not consider that the lack of a prior disciplinary history is sufficient by itself to satisfy us that she might in the future be able to re-establish herself as a fit and proper person.

9. Fifth, there is a need to protect the public from the respondent.  We are of the view that a permanent disqualification is the only way to protect the public given the seriousness nature of the respondent's conduct and her failure to take any responsibility for her actions.

10. Sixth, the respondent was an experienced settlement agent having been licensed since 2013.  Her conduct strikes at the core of the relationship between a settlement agent and their clients.   The penalty must be one which acts as a deterrent to other settlement agents from engaging in such conduct.

11. Seventh, we consider that the penalty is consistent with the objects of the disciplinary provisions of the SA Act, namely the protection of the public and the maintenance of proper professional standards for settlement agents.

A fine

1. A fine operates as a pecuniary penalty.

2. The maximum fine which may be imposed for disciplinary action is a fine of $10,000.[98]

   [98] SA Act, s 84(1)(b).

3. The Tribunal is not in possession of any information concerning the respondent's means.

4. In Parrella, the Tribunal held that the imposition of a fine in addition to permanent disqualification was not called for because the permanent disqualification was sufficient to maintain professional standards and protect the public, and the imposition of an additional fine would in the circumstances (namely Mr Parrella's recent bankruptcy) be unnecessarily punitive.[99]

   [99] Parrella at [40] and [44].

5. As has been noted above, the applicant did not pursue the imposition of a fine at the Hearing.

6. In our view, the imposition of a fine would be excessive given that the Tribunal has decided to impose a reprimand and permanent disqualification.

Costs

1. The applicant has sought an order that the respondent pay the applicant's costs of the Application pursuant to s 87(2) of theSAT Act.[100]

   [100] Applicant's Orders Sought dated 13 June 2023 (Exhibit 1 at page 1).

2. In the applicant's schedule of costs, the applicant is seeking a total of $5,577 made up as follows:

Description	Hours	Amount
Drafting application including grounds and orders sought	1 (SP)[101]	$429
Drafting Statement of Issues, Facts and Contentions and Preparing applicant's bundle of documents	2 (SP)	$858
Preparing for and attending hearing	1 day (SP)	$4, 290

[101] SP stands for Senior Practitioner.

1. The starting point for the consideration of the question of costs is s 87(1) of the SAT Act, namely that each party bears its own costs.

2. However, s 87(1) of the SAT Act is subject to any relevant provision of the enabling Act and the discretion of the Tribunal under s 87(2) of the SAT Act to make an order for the payment by a party of all or any of the costs of another party.

3. The relevant enabling Act in this case is the SA Act. There is nothing in the SA Act which precludes the Tribunal from making an award of costs in relation to a matter arising under the SA Act. Accordingly, the Tribunal may determine the applicant's application for costs in accordance with s 87 of the SAT Act.[102]

   [102] Smith and Murray Districts Carriage Driving Club Incorporated [2021] WASAT 44 (S) (Smith) at [3].

4. In Medical Board of Australia and Tan [2022] WASAT 57 (S) at [128]-[132], the Tribunal said:

   128The legal rationale for an order for costs under s 87(2) is that an order for costs is not to punish the person against whom the order is made, but to compensate or reimburse the person in whose favour it is made. Accordingly, even in the statutory context where the presumptive position is that no costs will be ordered, generally speaking, the question is whether, in the particular circumstances of the case, it is fair and reasonable that a party should be reimbursed for the costs it incurred. The onus is on the party seeking an order in its favour.

   129The Tribunal's discretion in relation to the award of costs is a wide one. Nevertheless, it is exercised judiciously and not capriciously.

   130In vocational regulatory proceedings, where a regulatory body is successful in obtaining relief for misconduct, unprofessional conduct or unsatisfactory professional performance by a respondent, it is common for the Tribunal to order that the respondent pay all or some of the costs of the regulatory body.  However, it would be incorrect to assume that, in regulatory matters or otherwise, that there is an established practice that an unsuccessful practitioner pays the regulator's costs or a contribution to their costs.

   131In Young v Legal Profession Complaints Committee Buss P said:

   The proper exercise of the Tribunal's discretionary power under s 87(2) of the SAT Act to make an award of costs depends, of course, upon all the circumstances of the particular case. Ordinarily, as a matter of fact, the Tribunal will make an award of costs in favour of a regulatory body which is successful in bringing a complaint of misconduct in professional disciplinary proceedings. However, in each case, the discretionary power to make an award of costs must be exercised having regard to the circumstances of the particular case.

   132When the Tribunal exercises its discretion to award costs in favour of a regulatory body, it reflects the public policy that regulatory bodies perform functions which promote the public interest, usually with limited resources, and the concern that the financial burden of bringing disciplinary action, if the regulatory body has no capacity to recover some or all of its costs, might act as a disincentive to bring such disciplinary action, or to ensure that all allegations against a practitioner are properly and thoroughly presented.

5. One of the objectives of the Tribunal is to 'act as speedily and with as little formality as practicable, and minimise the costs to parties'.[103]  In The Owners of 52 Mill Point Road Strata Plan 62152 and Hanssen Pty Ltd [2021] WASAT 102 (S) , the Tribunal said at [25]-[26]:

   The procedures of the Tribunal are designed to achieve the objectives prescribed by s 9 of the SAT Act. Where an order for costs is made by the Tribunal, the Tribunal's obligation to minimise the costs to parties will be reflected in the costs assessed by the Tribunal as recoverable. That approach reflects an expectation that parties will approach proceedings in a way that minimises costs of the proceeding: J & P Metals Pty Ltd and Shire of Dardanup [2006] WASAT 282 (S) at [38]. Therefore, an order for costs should be approached in a broad and relatively robust fashion: Perth Central Holdings Pty Ltd and Doric Constructions Pty Ltd [No.2] [2008] WASAT 302 at [67] and Marvelle Investments Pty Ltd and Argyle Holdings Pty Ltd [2010] WASAT 125 (S) at [49].

   Even though fixing costs involves a relatively broadbrush approach, the Tribunal must nevertheless be satisfied that the costs claimed are reasonable and not excessive in nature: Rae and Prima Homes Nominees Pty Ltd [2020] WASAT 24 at [69].

   [103] SAT Act, s 9(b).

6. It is also important to reiterate that an award of costs made by the Tribunal is not intended to be a full indemnity or reimbursement for the actual expenses incurred by a party to proceedings in the Tribunal.[104]

   [104] Perth Central Holdings Pty Ltd and Doric Constructions Pty Ltd [No 2] [2008] WASAT 302 at [67]; and Smith at [18].

7. A party seeking costs in the Tribunal must ensure that 'the Tribunal is appropriately informed as to the work done and time taken as is claimed for and the rates which are said to apply to that work'.[105]

   [105] Panegyres v Medical Board of Australia [2020] WASCA 58 at [415].

8. There is no prescribed scale of party/party costs in relation to Tribunal proceedings.  However, where the Tribunal makes an order for costs and fixes or assesses the amount of costs, the Tribunal will have regard to the hourly rates set out in the applicable costs determinations made by the Legal Costs Committee.[106]

   [106] Ransberg Pty Ltd and City of Bayswater [2016] WASAT 43 (S) at [63].

9. The applicable cost determination is the Legal Profession (State Administrative Tribunal) Determination 2022 (WA) (2022 Costs Determination) which came into operation on 1 July 2022.  Although the 2022 Costs Determination was made under the now repealed Legal Profession Act 2008 (WA), it is taken to have been made under s 133 of the Legal Profession Uniform Law Application Act 2022 (WA).[107]

   [107] Legal Profession Uniform Law Application Act 2022 (WA), s 299.

10. Taking a broadbrush approach in a robust fashion and taking into account the 2022 Costs Determination and the matters to which we have referred above in paragraphs [133] to [141], we are of the view that a total amount of $5,577 ought to be recovered by the applicant from the respondent.  This is for the following reasons.

11. First, the applicant is seeking costs in respect of 13 hours work by a Senior Practitioner at an hourly rate of $429 per hour.  We consider that this is a very modest claim for a proceeding in the vocational regulation stream.  Further, the hourly rate charged for the work of the Senior Practitioner in the applicant's schedule of costs is the maximum allowable hourly rate allowable in the 2022 Costs Determination.

12. Second, the documentation prepared by the applicant in support of the Application (standard Tribunal template, an outline of the grounds and orders, applicant's SIFC, and the applicant's bundle of documents) was lengthy and comprised over 130 pages.

13. Third, the applicant did not seek costs in respect of any of the four directions hearings and three mediation conferences held in the Tribunal in relation to the proceeding.

14. Fourth, the Hearing in the Tribunal lasted approximately two hours and the applicant provided the Tribunal with comprehensive written submissions and the applicant's schedule of costs.

15. While the amount of $5,577 has been fixed in a robust manner, it results in a total costs award which is, in our view, reasonable and not excessive in nature.  Further, in our view, the amount of costs fixed accords with the nature of the proceeding and the objectives of the Tribunal.

16. We consider that the respondent should pay the costs to the applicant within the period of 28 days, or such other time period as allowed by the applicant.

Conclusion

1. We have found that there is proper cause for disciplinary action against the respondent pursuant to s 84(2)(c) of the SA Act because the respondent breached s 49(5) of the SA Act on 15 occasions.

2. We have decided that the appropriate penalty to be imposed on the respondent is a reprimand and permanent disqualification.

3. We have also decided that the respondent should pay the applicant's costs fixed in the amount of $5,577.

Orders

The Tribunal orders:

1.Proper cause exists for disciplinary action against the respondent pursuant to s 84(2) of the Settlement Agents Act 1981 (WA).

2.The respondent is reprimanded pursuant to s 84(1)(a) of the Settlement Agents Act 1981 (WA).

3.The respondent is permanently disqualified from holding a licence and triennial certificate under the Settlement Agents Act 1981 (WA) pursuant to s 84(1)(c) of the Settlement Agents Act 1981 (WA).

4.The respondent is to pay the costs of the applicant fixed at $5,577 pursuant to s 87(2) of the State Administrative Tribunal Act 2004 (WA) within 28 days or such other time period allowed by the applicant.

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

MS C Conley, MEMBER

29 APRIL 2024