COMMISSIONER FOR CONSUMER PROTECTION and SANZ PROPERTY SOLUTIONS PTY LTD and PHILLIP ANDREW SHANKS - [2024] WASAT 114

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL
ACT: REAL ESTATE AND BUSINESS AGENTS ACT 1978 (WA)
CITATION:   COMMISSIONER FOR CONSUMER PROTECTION and SANZ PROPERTY SOLUTIONS PTY LTD and PHILLIP ANDREW SHANKS [2024] WASAT 114
MEMBER:   DR M EVANS-BONNER, SENIOR MEMBER
MR M BENTER, MEMBER
MR B POUND, SESSIONAL MEMBER

HEARD:   18 JULY 2024
DELIVERED          :   8 OCTOBER 2024
FILE NO/S:   VR 93 of 2023
BETWEEN:   COMMISSIONER FOR CONSUMER PROTECTION
Applicant
AND
SANZ PROPERTY SOLUTIONS PTY LTD
First Respondent
PHILLIP ANDREW SHANKS
Second Respondent

Catchwords:

Disciplinary action - Real estate agent - Real estate agency - Property management of a residential tenancy - Proper cause for disciplinary action - Code of Conduct breached - Management agreement breached - Failure to follow instructions of Landlord - Failure to provide inspection reports to Landlord - Failure to properly undertake final inspection after tenants vacated - Failure to provide property condition report and final inspection report to Landlord - Property in state of neglect at the end of tenancy - Refusal to provide Landlord with documents required for Landlord's insurance claim - Transfer of bond monies from business trust account into personal account without lawful authority - Utilising bond monies contrary to express instructions of Landlord - Failure to account for expenditure of bond monies - Landlord required to expend substantial funds to restore property to tenantable condition - Landlord suffered financial loss due to inadequate management of property - Lack of insight into conduct - Tribunal is satisfied there is proper cause for disciplinary action

Legislation:

Agents Licensing Act 1979 (NT)
Real Estate and Business Agents Act 1978 (WA), s 27, s 29, s 31, s 68, s 68(1), s 68(3), s 68(4), s 101, s 102(1), s 102(1)(a), s 103(1), s 103(1)(a), s 103(1)(b), s 103(2), Part VII
Real Estate and Business Agents and Sales Representatives Code of Conduct 2016 (WA), r 6, r 10
Residential Tenancies Act 1987 (WA), s 29(4), s 29(4)(b), Sch 1, cl 5A(1)
State Administrative Tribunal Act 2004 (WA), s 87(2)

Result:

There is cause for disciplinary action against the First Respondent and the Second Respondent

Category: B

Representation:

Counsel:

Applicant	:	JLC Rivalland & K Posthumus
First Respondent	:	In person
Second Respondent	:	In Person

Solicitors:

Applicant	:	Consumer Protection Legal Unit
First Respondent	:	N/A
Second Respondent	:	N/A

Cases referred to in decision:

Briginshaw v Briginshaw (1938) 60 CLR 336
Georgieff v Athans (1981) 26 SASR 412
Ordogh & Ors v Whittles Body Corporate Management Pty Ltd (Agents Licensing Board of the Northern Territory, 5 May 2021)
Wyong Shire Council v Shirt (1980) 146 CLR 40

REASONS FOR DECISION OF THE TRIBUNAL:

Introduction

On 31 August 2023, the Commissioner for Consumer Protection (Commissioner) made an application to this Tribunal.
The Commissioner is responsible for the administration of the RealEstate and Business Agents Act 1978 (WA) (REBA Act). One of the purposes of the REBA Act is to provide for the regulation and supervision of real estate agents and other persons working in the real estate industry.
The Commissioner's application alleged that there was proper cause for disciplinary action against the First Respondent, Sanz Property Solutions Pty Ltd (Sanz Property) and the Second Respondent, Mr Phillip Shanks, pursuant to s 102(1)(a) of the REBA Act.
At the relevant times, Mr Shanks held a valid real estate and business agent's licence that was granted pursuant to s 27 of the REBA Act. He also held a triennial certificate granted pursuant to s 31 of the REBA Act, which he did not renew after 21 July 2023.
Mr Shanks' real estate agency business was conducted through Sanz Property, a registered company which traded under the business name 'Sanz Property Group'. Mr Shanks is the sole director and shareholder of Sanz Property which he controlled. There is no evidence that anyone other than Mr Shanks was working for Sanz Property, and as the director of the company the actions of Mr Shanks were undertaken on behalf of Sanz Property. Therefore, the actions of Mr Shanks and Sanz Property are, for most purposes, interchangeable.
Sanz Property also held a valid real estate and business agent's licence granted pursuant to s 29 of the REBA Act, and a triennial certificate that was not renewed after 21 July 2023.
The Commissioner's allegations concern the conduct of Mr Shanks and Sanz Property regarding the management of a residential investment property of which Ms J was the registered proprietor (the Property).
By an exclusive management authority agreement dated 25 November 2016 (Management Agreement), Sanz Property, through Mr Shanks, managed the Property for an approximate five-year period from November 2016. Ms J terminated the Management Agreement in early 2022.
Sanz Property found tenants for the Property, Ms C and Mr R, whose tenancy started on 19 December 2016. The tenants paid a bond of $2,140 (HB, page 149). For clarity, we note that most of the correspondence concerning the tenants only refers to one tenant, Ms C.
The Commissioner's allegations include, amongst other things, that Mr Shanks, and therefore Sanz Property:
(a)failed to lodge the bond monies with the Bond Administrator in the time prescribed by the Residential Tenancies Act 1987 (WA) (RT Act);
(b)failed to provide a property condition report and inspection reports to Ms J when she asked for them;
(c)failed to properly inspect the Property at a final inspection and insisted that the Property was in good condition when it was not in tenantable condition; and
(d)unlawfully transferred the bond monies from Sanz Property's business trust account into his personal bank account, failed to follow the client's Ms J's instructions regarding the use of these monies, and failed to properly account for how he spent them.
The Commissioner alleged that by this conduct, Sanz Property and Mr Shanks breached the RT Act, the REBA Act, the terms of the Management Agreement, and the Real Estate and Business Agents and Sales Representatives Code of Conduct 2016 (WA) (the Code).
Mr Shanks, who represented himself and Sanz Property in these proceedings, denied that he did anything wrong. He was of the view that:
(a)he was entitled to transfer the bond monies from the business trust account into his personal bank account because the tenant had authorised it;
(b)Ms J was not entitled to any reports concerning the Property;
(c)he had inspected the Property adequately, and had arranged for it to be cleaned and tidied to a satisfactory standard; and
(d)Ms J had not suffered any losses and that any damage was fair wear and tear.
For the reasons outlined below, we do not accept Mr Shanks' version of events and the explanations he gave on behalf of himself and Sanz Property. It was apparent to us that Mr Shanks misunderstood his legal and ethical obligations as a real estate agent and that he lacked insight into his conduct.
We are satisfied that disciplinary matters exist in respect of Sanz Property and Mr Shanks.

The issue

The primary issue before us was whether proper cause for disciplinary action exists against Mr Shanks and Sanz Property pursuant to s 102(1)(a) of the REBA Act.
There will be a proper cause for disciplinary action if Sanz Property and Mr Shanks breached the REBA Act or the Code. Whether there was a breach of the Management Agreement is also relevant to the specific breaches of the Code alleged by the Commissioner.
Arising from the Commissioner's allegations, and the submissions in response from Mr Shanks on behalf of himself and Sanz Property, a determination of the primary issue requires consideration as to whether Mr Shanks and Sanz Property breached:
(a)s 29(4)(b) of the RT Act, by failing to lodge the bond monies with the Bond Administrator in the 14-day time limit prescribed by the RT Act;
(b)s 68(4) of the REBA Act, by transferring the bond monies held in the business trust account into Mr Shanks' personal bank account;
(c)the Management Agreement and/or rule 10 of the Code by failing to respond to Ms J's instructions within a reasonable time, failing to follow the instructions of Ms J concerning the use of the bond monies, and failing to provide Ms J with tenancy documentation she requested, including the property condition report and final inspection report; and/or
(d)the Management Agreement and/or rule 6 of the Code by failing, amongst other things, to properly undertake a final inspection of the Property.

Legal Framework

The sections of the RT Act, REBA Act and the Code that are relevant to this application are as follows.

RT Act

Subsection 29(4) of the RT Act provides:
(4)A person who receives a security bond paid in relation to a residential tenancy agreement —
…
(b)shall pay the amount of the bond to the bond administrator in accordance with Schedule 1 clause 5A[.]
Clause 5A(1) of Sch 1 of the RT Act provides:
5A.Security bond moneys to be paid to bond administrator
(1)The payment of an amount under section 29(4)(b) must be made as soon as practicable, and in any event within 14 days, after the person's receipt of the bond.

REBA Act

Section 68 of the REBA Act addresses the requirements in respect of the trust account required to be maintained by an agent. It sets out strict rules for the operation of a trust account. Those rules include that monies can only be paid out of the trust account when charges lawfully fall due. There is also a requirement to keep full and accurate records. It provides:
68.Use of trust accounts
(1)Every agent who holds a current triennial certificate must maintain at least 1 trust account exclusively for the purposes of this Act, designated or evidenced as such, in the prescribed manner, with an authorised financial institution and must, as soon as practicable, pay to the credit of that account or those accounts all moneys received by the agent for or on behalf of any other person in respect of transactions.
(2)Moneys so paid into any such trust account shall not be available for the payment of the debt of any other creditor of the agent, or be liable to be attached or taken in execution under the order or process of any court at the instance of any such creditors.
(3)An agent may pay out of a trust account such of the proper charges relating to transactions as are payable by the persons on whose behalf the moneys are received but may do so only when those charges lawfully fall due.
(4)Moneys received by an agent for or on behalf of another person in respect of a transaction shall not be withdrawn from a trust account except for the purposes of the transaction, or as otherwise authorised by this Act, or as otherwise authorised by the person or persons lawfully entitled to the moneys.
(5)An agent shall pay moneys withdrawn from a trust account to the person or persons lawfully entitled or authorised to receive them.
(6)An agent shall —
(a)keep full and accurate accounts of all money received or held by him on account of any other person and of all payments made by him of that money; and
(b)before the end of the next business day after the day on which the money is received or paid, enter in the accounts particulars of the amount so received or paid and the person from whom it was so received or to whom it was so paid; and
(c)keep the accounts in such manner that they can be conveniently and properly audited; and
(d)correctly balance the accounts at the end of each month.
Subsections 68(1) and s 68(3) of the REBA Act confirm that the agent is holding the trust monies on behalf of another person. That is, if the agent is managing a residential tenancy, the bond monies are held on trust for the benefit of both the landlord and tenant, in respect of any amounts that the tenant may be required to pay the landlord at the conclusion of the tenancy. It follows that, if the bond is relinquished by the tenant, the bond monies are held on behalf of the landlord.

The Code

Part VII of the REBA Act concerns the discipline of agents and sales representatives.
Section 101 of the REBA Act provides for codes of conduct to be prescribed. It provides, relevantly:
101.Codes of conduct
The Commissioner may from time to time prescribe, and publish in the manner prescribed by the regulations —
(a)a code of conduct for agents; …
The Code is the applicable code of conduct that has been prescribed for agents.
Rule 6 of the Code provides that real estate agents must exercise due care and skill as follows:
6.Duty of care, diligence and skill
When acting for a client an agent or sales representative must exercise due care, diligence and skill.
In respect of this obligation, the Commissioner drew our attention to two cases in their Statement of Issues, Facts and Contentions (SIFC). These were Georgieff v Athans (1981) 26 SASR 412 and Wyong Shire Council v Shirt (1980) 146 CLR 40. We consider the latter case has limited relevance on the basis that, while it addresses the extent of what is 'reasonably necessary' to fulfil a duty, it does so in the context of a common law negligence claim against a council when a water skier was injured in shallow water.
Georgieff v Athans was discussed in Ordogh & Ors v Whittles Body Corporate Management Pty Ltd (Agents Licensing Board of the Northern Territory, 5 May 2021) (Ordogh v Whittles). In Ordogh v Whittles, the Agents Licensing Board of the Northern Territory (NT Board) considered whether a real estate agent had breached the rules of conduct for agents. The alleged breaches included that the agent had 'failed to exercise due skill, care or diligence in carrying out its duties on behalf of the principal'. As is the case in Western Australia, neither the Agents Licensing Act 1979 (NT) nor the applicable code of conduct defined those terms.
The NT Board provided the following useful overview of relevant commentary and law regarding the obligation of an agent to exercise due skill, care or diligence:
64.… a helpful extract from Halsbury's Laws of Australia, "Duties of Agent to Principal", by Professor Dal Pont. The following are useful quotes from this paper:
"Where no definite instructions have been given to the agent, or where the instructions leave a discretion to him or her, the agent must be guided by the honest exercise of his or her judgement and the interest of the principal".
And
"Where the agent is a professional agent, he or she must follow the ordinary course of business which includes the ordinary course of any previous business as between the principal and the agent and any special usages applicable to the particular case".
65.Whilst section 65(1)(d) does not incorporate the word "reasonable", Professor Dal Pont at [15-170] states a core principle, which is that "an agent for reward is required to exercise the degree of care, skill and diligence which is reasonably necessary for the due performance of the undertaking." Additionally, "the agent must show at least the level of diligence in conducting the principal's business that the principal would reasonably have been able to display if the principal had undertaken the business personally. The Professor adds "The agent is not responsible for the failure to go beyond his or her reasonable duty, even though a loss is occasioned thereby which might have been avoided by extra care, skill or diligence. (italics added)
66.Consistent with these principles, in Georgieff v Athans a decision of Walters J in the South Australian Supreme Court his Honour stated that licensed land agents as an agent for reward he was bound to "exercise such skill, care and diligence in the performance of his undertaking as [was] usual or necessary for the ordinary or proper conduct of the business or profession in which he was employed or was reasonably necessary for the proper performance of the duties undertaken by him" (Lunghi v Sinclair, per Virtue J at 176 citing Bowstead on Agency, Art.46).
67Professor Dal Pont also stated the following:
"Expert evidence may be adduced to ascertain how an ordinarily skilled and competent professional agent would have behaved in the circumstances. Yet, if the default in question is 'so rudimentary and obvious' such expert evidence will be unnecessary. The failure of an agent to take a step which was obviously necessary and prudent will entitle the Court to reach its own conclusion of negligence. A professional agent who holds himself or herself out as possessing special expertise in a particular field is likely to be subject to a higher standard of care". The agent must not be guilty of unreasonable delay in carrying out his or her instructions or in communicating to the principal any material information.
(Footnotes omitted.)
We consider that the following key principles arise from this overview:
(a)In matters that have an element of discretion, the agent must act in the interests of the principal and must honestly exercise their judgement in doing so.
(b)The agent must apply the level of diligence that is required in the ordinary course of conduct of the business in which he or she is acting, having regard to what is reasonably necessary for the performance of the commission or contract.
(c)The level of diligence required is the same level of diligence as if the client had conducted the business themselves.
(d)Expert evidence may be required, or may assist, in ascertaining how an agent should have behaved in the circumstances, but it will not be required if the default was obvious, or if the action would have been taken by a prudent agent.
(e)There will be a higher standard of care if an agent holds themselves out as having expertise in a particular field.
Rule 10 of the Code is also relevant to this application. It requires, in effect, that real estate agents must follow their client's instructions. In this case, the client was Ms J.
Rule 10 of the Code provides:
10.Client's instructions
When acting for a client an agent or sales representative must —
(a)provide each service relating to the client's instructions within a reasonable time after receiving the instructions; and
(b)act in accordance with the client's reasonable instructions.
In our view, what is a reasonable time will depend on the facts and circumstances of the individual case and the nature of the instruction from the client. For example, if the client (landlord) instructed the agent to repair a broken pool fence, a response and action (scheduling the repairs) would likely be required the same day because a broken pool fence may be a serious safety issue. However, if the landlord instructed the agent to repair a broken skimmer box in the pool, a response the same day would not be required because there is no safety issue or urgency. In that case, a response in two to three days may be appropriate.
Whether the client's instructions are reasonable will again depend on the facts and circumstances of the individual case and the nature and terms of the contract between the agent and the client. For example, in a contract to manage a residential property, an instruction from the landlord to the agent to organise a replacement for a broken dishwasher may be reasonable, but requiring the agent to oversee kitchen renovations would not be.

Alleging cause for disciplinary action

Subsection 102(1) of the REBA Act provides that the Commissioner may make an allegation to this Tribunal. It states, relevantly:
102.Disciplinary action by SAT, alleging cause for
(1)The Commissioner may allege to the State Administrative Tribunal that —
(a)there is proper cause for disciplinary action, as mentioned in section 103(2), against an agent[.]

Subsection 103(2) specifies when there will be a proper cause for disciplinary action against an agent. The relevant parts of that subsection provide:
(2)There shall be proper cause for disciplinary action against an agent if —
…
…
(c)the agent is acting or has acted in breach of —
(i)a special condition of his licence or triennial certificate; or
(ii)the requirements of this Act; or
(iii)the code of conduct for agents;
or
(d)any other cause exists that, in the opinion of the State Administrative Tribunal, renders the agent unfit to hold a licence.
If the Tribunal is satisfied that there is a proper cause for disciplinary action, it can impose one or more of the penalties in s 103(1) of the REBA Act which provides:
103.Disciplinary action, SAT's powers as to
(1)If, in a proceeding commenced by an allegation under section 102(1) against an agent, 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 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, from holding a licence or triennial certificate, or both[.]

Standard of proof

The standard of proof that we must apply in reaching our findings is the balance of probabilities, informed by the principles in Briginshaw v Briginshaw (1938) 60 CLR 336.
In Briginshaw, Dixon J stated (at 361-362):
…
Except upon criminal issues to be proved by the prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters "reasonable satisfaction" should not be produced by inexact proofs, indefinite testimony, or indirect inferences[.]
Thus, given the serious consequences of a disciplinary finding, we cannot (per Dixon J at 368):
… be reasonably satisfied of the truth of the allegation without the exercise of caution and unless the proofs survive a careful scrutiny and appear precise and not loose and inexact.

The Management Agreement

On 25 November 2016, Mr Shanks and Ms J entered into an 'exclusive management authority for residential premises' (Management Agreement). Mr Shanks, as the sole director of Sanz Property, signed the Agreement on behalf of Sanz Property.
Under the Management Agreement, Sanz Property was appointed by Ms J to exclusively manage the Property for a Management Fee which comprised 10% of the gross rent and a letting fee of two weeks' rent plus GST.
The Management Fee included a leasing fee for each new tenancy, marketing and advertising, a property condition report at the commencement of tenancy, a final bond inspection, and routine inspections (clause 7.3).
The Management Agreement included the following clauses in a section headed 'Property Manager's Obligations':
5.3Unless specified otherwise in the Schedule, the Property Manager will:
…
5.3.4account and render statements in writing to the Lessor for all monies received, paid or appropriated and to pay all remaining monies due to the Owner as specified in Item 11;
5.3.5inspect the Premises from time to time when deemed necessary by the Property Manager and, if requested by the Lessor, will report in writing to the Lessor on the general condition of the Premises;
5.3.6advise the Lessor of any major damage to or accident occurring in or on the Premises as soon as reasonably practicable upon the Property Manager becoming aware of the same;
5.3.7If the Property Manager is unable to contact the Lessor, or if the Property Manager and the Lessor agree then despite clause 5.3.6, at the expense of the Lessor, affect any maintenance or repairs to the Premises whatsoever (without regard to limits specified in item 9 of the schedule) where in the reasonable opinion of the Property Manager, such maintenance or repair relates to:
(a)repairs necessary for the supply or restoration of an essential service being electricity, gas, functioning refrigerator, sewerage, septic tank or other wastewater management treatment, and water including the supply of hot water; and/or
(b)urgent repairs to avoid exposing a person to the risk of injury, exposing property to damage or causing the tenant undue hardship or inconvenience[.]
(Original emphasis.)
Item 11, referred to in clause 5.3.4 of the Management Agreement, is titled 'Funds to be paid to the Owner' and included the BSB, account number and name of Ms J's bank account.

Overview of the proceedings

Procedural history

The Commissioner's application was filed in the Tribunal on 31 August 2023.
The application was sent to a directions hearing before the President of the Tribunal, Pritchard J (as Pritchard JA then was), on 10 October 2023, at which programming directions were made for the parties to each file a SIFC, and referring the matter to mediation.
The parties attended a mediation conference on 1 December 2023 which was adjourned to a further mediation on 29 February 2024, with the adjournment order noting that Mr Shanks had requested the opportunity to obtain legal advice. On 29 February 2024 the Member mediating the matter ordered that the mediation was concluded and adjourned the matter to a directions hearing on 26 March 2024.
At the directions hearing on 26 March 2024, President Pritchard made further programming orders, including orders granting the Commissioner leave to amend their SIFC and requiring Mr Shanks and Sanz Property to file a supplementary responsive statement. The President also ordered that each party file and exchange witness statements for the witnesses they intended to call at the final hearing.
A further directions hearing before President Pritchard was held on 30 April 2024. At that directions hearing the President made orders which included that Mr Shanks and Sanz Property were to file any further documents on which they wished to rely at the hearing as well as witness statements of any witness on whose evidence they wished to rely. President Pritchard listed the matter for a final hearing and gave the Commissioner, Mr Shanks and Sanz Property each the opportunity to file an outline of written submissions on which they wished to rely.
On 8 May 2024, President Pritchard listed the matter for a hearing on 18 July 2024.
Despite the directions made by President Pritchard, Mr Shanks did not file a witness statement. The only document filed in these proceedings that contained evidence from him was a document titled, 'Respondents Statement of Issues, Facts and Contentions' filed on 28 November 2023. We describe the contents of that document below.

The hearing

We heard the application on 18 July 2024.
Mr Shanks represented himself and Sanz Property. Mr Rivalland appeared as Counsel for the Commissioner.
The Commissioner called Ms J to give evidence. We had the benefit of a witness statement from Ms J dated 5 May 2023, as well as some proofing notes dated 2 July 2024. Ms J gave evidence at the hearing and Mr Shanks was given the opportunity to cross-examine her.
Mr Ormston, an investigator from the Department of Mines, Industry Regulation and Safety (Department), attended the hearing because Mr Shanks had previously indicated he may have questions for him. However, Mr Shanks confirmed at the hearing that he did not have any questions for Mr Ormston and, on that basis, no evidence was given by him.
Mr Shanks gave evidence and was cross-examined by Counsel for the Commissioner.
We also asked Ms J and Mr Shanks questions.
Mr Shanks had also filed a handwritten statutory declaration from one of the tenants, Ms C, dated 7 October 2023 (HB, pages 188-189), but did not call her to give evidence.

The evidence

Documents filed by the Commissioner

In accordance with the directions made by President Pritchard, the Commissioner filed a SIFC on 8 November 2023 and an amended SIFC on 26 March 2024. Further, on 4 July 2024, the Commissioner filed a document titled, 'Applicant's outline of submissions'. We did not put those documents into evidence because they comprised submissions, as opposed to evidence.
The Commissioner filed the following documents, which we put into evidence as Exhibit 1:
(a)A bundle of documents filed in two parts on 8 November 2023. The first part comprised 49 pages and included various supporting documents, together with the first 11 pages of Ms J's witness statement. The second part comprised 69 pages and included the final page of Ms J's witness statement, the annexures to her statement and other supporting documents from the Commissioner; and
(b)two pages of proofing notes from Ms J and eight pages of photographs of the Property provided by Ms J, which were filed by the Commissioner on 9 July 2024.

Documents filed by Sanz Property and Mr Shanks

From 28 November 2023 to 12 April 2024, Mr Shanks filed the following submissions and evidence on behalf of himself and Sanz Property, which we collectively admitted into evidence as Exhibit 2.
On 28 November 2023, Mr Shanks filed a bundle of documents which comprised:
(a)an email to Sanz Property and Mr Shanks from a compliance officer at the Department dated 14 December 2021;
(b)two copies of an email from the Director General of the Department to Mr Shanks dated 8 July 2019;
(c)the first page of a letter from the Department to Mr Shanks dated 5 April 2022 regarding the complaint against him concerning his management of the Property;
(d)six photographs of the Property taken on an unknown date on a single page;
(e)an email dated 9 October 2023 from Mr Shanks to the local council, and an email dated 9 October 2023 in response to confirm that a bin was picked up from the Property on 14 March 2023;
(f)a single page photograph of the front lawn area which is mainly dirt. The date of the photographs is unknown;
(g)five more photographs on a single page of the inside and outside of the Property, taken on an unknown date;
(h)a photograph taken on an unknown date showing some ripped linoleum flooring;
(i)the handwritten statutory declaration from one of the tenants, Ms C, dated 7 October 2023;
(j)a screenshot from the 'Property Tree' database titled, 'Pay Direct to Creditor Tenancy Invoicing'; and
(k)a two-page letter, enclosing an Annexure A and a notice to Mr Shanks from a Senior Investigations Officer of the Department dated 8 June 2018 requiring him to attend an interview concerning breaches of the RT Act including with respect to the lodgement of security bonds, and the REBA Act with respect to a list of properties listed in an Annexure A (which included Ms T's Property).
Also on 28 November 2023, Mr Shanks filed a document titled, 'Respondents Statement of Issues, Facts and Contentions' which was stated to have been prepared by Mr Shanks. It comprised 26 paragraphs. In those paragraphs Mr Shanks gave some evidence and made submissions about some aspects of the complaint made by Ms J and the Commissioner's application.
On 30 November 2023, Mr Shanks also filed a photograph of an undated customer service complaints and feedback form where he appears to have sought to request a review into a decision made by the Department that he had breached the Code.
On 12 April 2024, Mr Shanks filed another document titled, 'Respondents Statement of Issues, Facts and Contentions' which was also stated to have been prepared by him. That document was filed in response to the Commissioner's amended SIFC filed on 26 March 2024, in accordance with the orders of President Pritchard. That document contains very little detail. It confirms that Mr Shanks chose not to renew the licences of Sanz Property and himself, but mostly states, 'agree' or 'reject' next to the corresponding paragraph number used by the Commissioner in his SIFC. This was the last document comprising Exhibit 2.
Three days before the hearing, on 15 July 2024, Mr Shanks filed a further 12-page bundle of documents comprising an extract of the REBA Act, text messages between Mr Shanks and Ms J, a bonds management flowchart and information from the Department's website titled, 'Releasing or claiming a bond' (Bond disposal). We marked this bundle as Exhibit 3.
Two days before the hearing, on 16 July 2024, Mr Shanks filed another bundle of documents comprising five photographs of the Property from a real estate website showing that the Property was listed in June 2022, emails between Ms J and Mr Shanks from 5 January 2022 and 18 January 2022, two different copies of an email from Mr Shanks to Ms J dated 3 May 2017 with the attachments listed as being the lease and the tenancy applications of the two tenants and two pages of scanned photographs from the real estate web page showing a listing date of November 2016. We marked this bundle as Exhibit 4.
The day before the hearing, 17 July 2024, Mr Shanks filed page 8 of 20 and page 9 of 20 of a bank account statement showing transactions between 1 March 2022 and 10 March 2022. At the hearing Mr Shanks stated that this was his personal bank account. Seven entries on the statement were highlighted in yellow. They were for 'Repco', several fuel outlets, and 'Mindarie Regional Co' and another withdrawal under a person's name with the initials 'GJ'. We marked this bundle as Exhibit 5.
For completeness, we note that many of the above documents were lodged by Mr Shanks without any order or other leave of the Tribunal to do so. At the hearing, Counsel for the Commissioner submitted that these documents were being lodged in a piecemeal fashion, with no prior notice to the Commissioner. Notwithstanding issues with the approach taken to the proceedings by Mr Shanks, on his own behalf and as the sole director of Sanz Property, all the above documents were accepted into evidence in order for them to have the fullest opportunity to respond to the allegations made by the Commissioner.
The Tribunal prepared a hearing book containing all the documents on the Tribunal's file including the materials, documents and submissions filed by the parties and the orders made by the Tribunal in these proceedings. A copy of the hearing book was provided to the parties. The Exhibits we have described above, except for the documents filed in the three days before the hearing, were contained in this hearing book. Where we have referenced a document included in the hearing book, we have done so with reference to the relevant page in the hearing book (HB).

Ms J

Our impression of Ms J was that she was a credible and honest witness who gave evidence to the best of her recollection. As we explain below, the veracity of much of Ms J's evidence was corroborated by contemporaneous email correspondence with Mr Shanks.
As we have mentioned, Ms J's evidence was given in her statement dated 5 May 2023, and at the hearing. Proofing notes dated 2 July 2024 were also admitted. The statement and proofing notes were contained in Exhibit 1.
Attached to Ms J's statement were contemporaneous emails between herself and Sanz Property referred to in her statement. Those emails provide evidence concerning the timeline of events, and of Mr Shanks' and Sanz Property's failure to follow her instructions.
Ms J purchased the Property in 1996 with her former husband. The Property was transferred into her sole ownership in 2006 when she purchased her husband's share as part of their divorce settlement.
Ms J stated that the period 2016 to 2021 was a very busy one for her. She divided her time between Sydney, where she worked, and regular travel overseas. Due to the COVID-19 pandemic, she was unable to return from overseas for approximately 11 months. Occasionally she visited Perth. She did not have time to manage the Property herself, which is why she engaged Sanz Property to do so.
Ms J entered into the Management Agreement with Sanz Property in November 2016, and Sanz Property thereafter arranged for the Property to be advertised on a real estate website and found tenants for the Property, namely Ms C and Mr R.
Ms J did not receive an inspection report at the start of the tenancy.
Ms J only visited the Property after making prior arrangements with Mr Shanks. She stated that if she wanted to inspect the Property on a return visit, Mr Shanks would not usually facilitate an inspection, and so she only attended one or two inspections of the Property during the five‑year tenancy. She would also contact Mr Shanks when she wanted to access a personal storage area (a locked room) on the Property.
After one of these visits, she orally raised concerns with Mr Shanks about the state of the garden and the Property looking overcrowded with furniture and junk but, because she was so busy, she left this to Mr Shanks to manage.
Towards the end of 2021, Ms J decided to end the tenancy because she wanted to move back to Perth and to occupy the Property herself. In relation to Ms J's desire to have the tenants vacate the Property, the evidence before the Tribunal is not clear as to when Ms J first requested Mr Shanks to issue a termination notice and when, if at all, such a notice was issued. However, the documentary evidence shows that Ms J considered that she had given clear instructions to Mr Shanks to issue a termination notice, that she understood he had failed to do so, and that she had emailed Mr Shanks in relation to this apparent failure.
Ms J visited the Property in December 2021 to meet an electrician. She was considering dividing the Property and wanted to see how that would work. When she arrived, the tenant, Ms C, told her that Mr Shanks would not be attending. Ms C also told Ms J that she would not be vacating the premises because it was Christmas and she had nowhere to go. Ms J told Ms C that she would give her another two months to vacate the premises.
Ms J's evidence was that this was the first she had heard that the tenant would not be vacating the Property in the timeframe originally required based upon Ms J's instructions to Mr Shanks. She was also shocked by the state of the Property which she said, 'looked like a dump'.
Ms J also stated that the tenant 'had a go at her' for not fixing the shower, which the tenant said she could not use. This was the first Ms J had heard about the shower needing to be repaired because Mr Shanks had not contacted her about any repairs.
The tenant also told Ms J that there had not been any inspections of the Property since the COVID-19 pandemic, a period of approximately one year.
Ms J stated that she tried to contact Mr Shanks numerous times that day, but he would not return her calls. She said that she went to his office, which was his residential address, to ask what had happened with the Property. She described Mr Shanks as abusive and not happy to see her. Due to the difficulties Ms J was having communicating with Mr Shanks, she arranged for a plumber to fix the shower.
In an email from Ms J to Mr Shanks dated 5 January 2022, Ms J stated that she was giving notice to terminate the Management Agreement due to numerous breaches stated as follows (HB, pages 122 123):
…
1.Failure to provide inspection reports despite multiple requests - property inspection is required every 3 months under Item 7(f) of the agreement
2.Failure to serve the tenants with notice to vacate the property - email sent on 17/12/2021 and as at 29/12/2021 tenant has not received the notice to vacate.
3.Failure to organise pest control despite multiple requests
4.Delay in releasing owners fund - requested on 23/12/2021 - funds received on 31/12/2021
5.Failure to inform owner of the maintenance and repairs requested by tenants
6.Failure to act with due care and diligence in performing your duties[.]

Ms J did not receive a response to this email, and so on 7 January 2022, she sent a subsequent email which stated (HB, page 122):
Phillip,
I tried to call as I have not received an acknowledgement to my email. I spoke to [Ms C] today and you have not issued her the notice to vacate despite instruction to do so.
I also need the required paperwork which should have been sent to me immediately on signing of the lease and the property inspection reports.
Have you been able to organise the works required for the pool fence (the email was sent to you late December)[.]
Again, Ms J did not receive a response, and so on 11 January 2022, she sent another email which read (HB, page 121):
Phillip, I need an acknowledgement of my email from you that our agreement is terminated. [Ms C] has advised that she has to continue to pay the rent to you until we have confirmation that our agreement has been breached. This means that for the next 2 weeks you are meant to continue to act on my behalf.
1.Has the notice to vacate been issued to [Ms C]?
2.Have you organised the pool door repair?
3.Have you organised the pool cleaning and skimmer basket replacement.
Please provide:
1.all inspection reports from the start of the tenancy
2.lease agreement of the tenants
3.An [sic] handover plan
I require a response by tomorrow morning[.]
Ms J described being in a difficult position. She did not receive a response from Mr Shanks confirming the Management Agreement had been terminated, and the tenant had told her that they needed to continue to pay rent to Mr Shanks, and not to her. That was why she instructed Mr Shanks to continue to act for her for the remaining two weeks.
Following the 11 January 2022 email, Ms J received a response from Mr Shanks on 18 January 2022 (HB, page 121), sent from his personal Sanz Property email address. The email did not address Ms J's attempt to terminate the Management Agreement, nor did it contain reference to the documents she requested, or the repairs she requested clarification about. Instead, the email stated:
Hi [Ms J]
Did you lodge the court proceedings as mentioned previously?
If not, do you wish for another 60 day vacate notice to be issued?
[Ms C] has mentioned to me that you have advised her of a rent increase, can you please confirm and if so sent [sic] me a copy of the prescribed form[.]
On 22 February 2022, Ms J received an email from Mr Shanks, which in turn forwarded an email of the same date from Ms C to Mr Shanks. In that email, Ms C stated, in effect, that she had paid rent for another three days up to 25 February 2022 and that she was finding vacating and cleaning up the Property to be stressful (HB, page 85, para 20; HB, page 126).
Ms J contacted Ms C that same day, and Ms C advised Ms J that she was relinquishing the bond and was planning to vacate the Property on 25 February 2022.
Ms J then emailed Mr Shanks on the afternoon of 22 February 2022 (HB, page 125 to 126) and stated:
I have just spoken to [Ms C] who has advised that she is relinquishing the bond and will leave on Friday. Can the inspection be done on Saturday. I will need a full inspection report so that I can claim the landlord insurance if need be. I will take care of the quotes for the cleaning and garden.
On 23 February 2022 Mr Shanks responded by email to Ms J (HB, page 125). In this email he asked Ms J to confirm the bond monies would fully cover all the costs, even though he had not undertaken a final inspection. The email states:
…
Thank you for the update.
I have also spoken to [Ms C] in regards to the Bond.
Can you please confirm if the bond disposal to you is a full and final payment and you accept the property back "as is"?
It is my opinion that the bond will be more than enough to cover all cleaning and gardening requirements.
In regards to your question to completing the final bond inspection this coming Saturday, unfortunately I do not complete inspections on weekends and as previously advised, I do not book in final inspections until I have possession of the property and the tenant has been advised as to when the inspection will be taking place, as they have a right to be present.
On 25 February 2022, Ms J emailed Mr Shanks (HB, page 125) to tell him she had obtained a court order for vacation of the Property, and confirming that she would be obtaining quotes, and could not give instructions about the bond monies until there was a final inspection:
This is to inform you that there is a court order for [Ms C] to vacate today (Friday 25/02). In relation to your comment about the release of the bond, until such time as you have completed the inspection and I obtain quotes, we cannot know whether the bond money will be adequate to cover the garden and cleaning.
When she was asked at the hearing why she obtained a court order, Ms J stated that she had so much difficulty getting into the Property, that she made a complaint to the Department. She said that after she first complained, Mr Shanks had become abusive and would ignore her instructions. She explained that she had asked Mr Shanks to send a notice to the tenant to vacate, but that by mid-January he still had not done so. She was concerned that by the time a notice was issued, it would be another two months before the tenants vacated, and so she obtained the court order, and chose a date for the tenants to vacate the Property that was in two months' time.
In her statement, Ms J said that she stopped by the Property on 27 February 2022 to confirm it had been vacated. She said that the Property was left full of rubbish and furniture and that the garden was 'a mess'.
Shortly after 27 February 2022, Ms J went back to the Property. She could not access the inside of the Property and had difficulty getting around the back of the Property but took two photographs. One was a photograph of the back pergola showing a build-up of dirt and debris on the pavers as well as a pipe and wooden items. The other was a side view looking into the garage which was full of boxes of papers, and broken furniture.
Ms J also gave evidence about photographs attached to her proofing notes. Four photographs labelled A, B, C and D are of the outside of the Property. Ms J said they were taken before the final inspection and after the tenant had moved out on 25 February 2022. These photographs show rubbish, junk and old furniture left outside, external paved areas covered in dirt and debris, overgrown and dry garden areas, and dirt in place of lawn.
Ms J sent a follow up email to Mr Shanks on 28 February 2022 asking for an update as to when the final inspection would be done because the tenants should have vacated on 25 February 2022.
Ms J corresponded with Ms C by email between 1 March 2022 and 4 March 2022 (HB, pages 130 - 131). In that correspondence, Ms C had advised that she would not arranging disposal of any of the items she had left behind.
Ms J sent a further follow-up email in the morning on 1 March 2022, again asking if Mr Shanks had done the inspection.
In an email that afternoon, Mr Shanks confirmed that Ms C had vacated the Property. He stated, 'I have not completed the Final inspection as of yet, I will let you know when I have'.
Despite Ms J's instructions that she required a final inspection and report, and her written instruction that she would be obtaining quotes for cleaning and gardening, Mr Shanks sent her the following email in the morning on 4 March 2022 (HB, page 130):
The property is being tidied up for handover, items have been put in the supplied bin, remainder to be removed also and it will be cleaned out next week.
Ms J queried what Mr Shanks was doing in an email later that day, which read (HB, page 129):
Phillip, what do you mean by tidied up for handover? Can you supply me with the final inspection report. I also need all the inspection reports from the time you have started to manage the property. As per my previous email, I will organise the cleaning and gardening. It has now been a week since [Ms C] has vacated.
In an email response to Ms J dated 4 March 2022, Mr Shanks stated that the tenant had instructed him to organise the gardening and the cleaning, despite Ms J's instructions that she would do so. The tenant was copied into the email. He replied (HB, page 129):
[Ms C] has instructed me to organise the gardens and cleaning on her behalf as she didn't have time to do it.
Since it's a long weekend, I'd imagine everything will be completed by late next week.
Ms J replied to Mr Shanks and the tenant on 4 March 2022. Her somewhat exasperated reply, in which she stated that she had started obtaining quotes, was as follows (HB, page 129):
Phillip, I have been asking you about the final inspection date for over a week (even prior to the tenants' departure). I do not understand why this has not been done and why you did not communicate this to me straight away. I have started the process of obtaining quotes to put the property in its original state. From your previous email and [Ms C's] text, she has departed the property, left stuff behind and has forfeited her bond.
On 5 March 2022, Ms J sent Mr Shanks an email itemising her concerns, reminding Mr Shanks of his obligations under the Code, and instructing him again to undertake a final inspection. She also reminded him that she was getting the quotes for the cleaning and gardening. She also gave specific instructions concerning the bond monies. The relevant parts of that email state (HB, page 128):
Further to my email of yesterday, I instruct you on the following:
1.Organise for the final inspection on Tuesday 8/03/2022. It is your duty to organise this inspection within 14 days of the departure of the tenants. This inspection is to be conducted prior to any cleaning or gardening or removal is done. The tenants have vacated and left the property in the state that they have.
2.Advise me of the time of the final inspections so I can attend.
3.As per correspondence (email and text) with [Ms C], she has vacated the property on Friday 25/02/2022 and has left stuff and rubbish on the premises. She has also confirmed that the property and garden will not be cleaned. This is despite the fact that the notice to vacate was issued on 18 October 2021. [Ms C] had over four months to sort the property.
4.As per my email of 22^nd February 2022, I already informed you that I will request quotes for cleaning and gardening. This is something that I have already done. When [Ms C] confirmed that she will not remove anything from the property, I also organised quote [sic] for the rubbish removal. I cannot proceed with these until such time as you complete the final inspection.
5.I remind you that as my agent you have to act in my best interests and delaying the final inspection is further proof that you are not doing so. You are not the agent of the tenant. (Rule 5 of the Real Estate and Business Agents and Sales Representative Code of Conduct 2016).
6.I have also requested that you send all inspection reports from the date you started managing the property and the lease agreement. So far you have failed to act on my instructions. (Rule 10 of the Real Estate and Business Agents and Sales Representative Code of Conduct 2016). I also request that you send me proof the [sic] enquiries that you made prior to leasing the property to the tenants.
7.Release the bond money to me once I supply you with the quotes for rubbish removal, cleaning, gardening and pest odour treatment.
8.Organise the refund of water charges by the tenants. You failed to inform the Water Department that the tenants were vacating. I did it myself.
9.Provide me with the final property income and expenses report.
Having not received a response, Ms J forwarded her email of 5 March 2022 to Mr Shanks on 9 March 2022, and stated, 'As per my email below. I am waiting for a response from you' (HB, page 141).
Mr Shanks emailed Ms J on 9 March 2022, saying that he had scheduled the final inspection for 11.00 am on Friday (11 March 2022). Ms J responded, stating that she would attend the final inspection and that she would ask for the keys to be handed over at the same time (HB, page 141).
On 10 March 2022, Mr Shanks emailed Ms J to say that the final inspection had been postponed until 1.00 pm (HB, page 141).
Ms J attended the Property with a friend at 1.00 pm. Mr Shanks and the tenant, Ms C, were already present. Mr Shanks informed her that the inspection had already been completed.
Ms J's evidence was that Mr Shanks told her there were no issues, that the Property was in good order, with the garden and the house tidied up. According to Ms J, Mr Shanks informed her that the tenant had released the bond monies to Sanz Property on 10 March 2022 and that he had used the funds to pay for cleaners and gardeners on behalf of the tenant. Mr Shanks advised Ms J that the bond monies belonged to the tenant and that he did not have to provide Ms J with any details of the disbursements.
Ms J stated that she walked around the Property and saw the following (statement of Ms J, para 48, HB, page 89):
•There was still furniture sitting on the front lawn and the skip bin was overflowing;
•The gardens were not left in the condition that they were initially. There was no lawn in the front anymore and the garden beds were full of weeds;
•There was rubbish in the back garden;
•The linoleum in the games room was ripped;
•There was water damage on the wooden floors in the front lounge;
•There were stains in the oven; and
•The front blind was broken.
Ms J took a photograph of the front yard. We can see from this photograph that there is a full skip bin, another box that is overflowing and some old furniture and a rug. The lawn has died, and the front verge is mostly dirt (HB, page 133). Ms J also took photographs of three gas bottles left at the front of the Property next to a large patch of dirt, damaged floorboards, the inside of the oven with a pool of dirt at the bottom, a hole in the fly wire, and broken blinds. The photograph of the broken blinds shows an overgrown, dead garden through the window. There are further pictures of the pool area and the overgrown garden.
Later that day, Ms J emailed Mr Shanks to express her dissatisfaction with the inspection (HB, page 142). Her email noted that when she arrived at 1.00 pm, she was told that the inspection had been completed because Mr Shanks had arrived earlier. The email also records that Mr Shanks had told Ms J that 'there were no issues' and 'that the property was in good order, with the garden and house tidied up'. Ms J then went on to list her observations following her own inspection of the Property, which we have outlined above.
In her email, Ms J also stated that the gardens had become overgrown as there had been no garden maintenance done during the tenancy, but that Mr Shanks had advised her at the inspection that the gardens were the landlord's responsibility. She quoted from the 'Lessor Guide' which stated that the tenant was responsible for garden maintenance such as mowing and edging lawns, weeding, and pruning.
Ms J's email also records what Mr Shanks had told her about the bond monies, namely that he had released them to the agency on 10 March 2022, and had used the funds to pay for cleaners and gardeners on behalf of the tenant. Her email also confirmed Mr Shanks' advice that even though the monies were released to Sanz Property, they belonged to the tenant and Mr Shanks was not required to provide Ms J with details of the disbursements.
Ms J also stated in her email that she had forwarded Mr Shanks the water bill with the final reading for payment. She asked whether that bill had been paid before the bond was released. She further asked Mr Shanks to advise her as to how the water bill, repairs, rubbish removal, gardening and cleaning would be paid for. Ms J again requested that Mr Shanks provide her with the following documents (HB, page 142):
1.all inspection reports from the start of the management of the property
2.Proof of due diligence when you chose the tenants
3.final inspection report
4.final income and expenses statement and payment of rent to 25/02/2022
5.Proof that the property has been fumigated.
On 16 March 2022, Ms J received an email response from Mr Shanks. Amongst other things, in that email, Mr Shanks stated that the gardens were the landlord's responsibility, that the damage to the Property was wear and tear, that it was not reasonable for him to provide all inspection reports to Ms J, and that the final inspection report would be provided directly to Ms C (HB, pages 143-144).
Ms J responded to that email on 24 March 2022 (HB, page 146). She made comments in the text of Mr Shanks' email. The following is the email from Mr Shanks to Ms J. We have included Ms J's commentary in bold.
The email stated (HB, page 143):
1.The skip bin has now been removed and what has been left behind can now be collected. I AGREE EXCEPT AS PER PHOTOS AND VIDEO – SEE ITEM 3.
2.The gardens have not had any pruning or anything done by you, numerous requests had been made. It is not the tenant's responsibility to do major pruning etc SEE LESSOR GUIDE "Your tenant is responsible for garden maintenance, such as mowing and edging lawns, weeding and light pruning." The garden beds were munched and in good condition with all the trees cut back when the property was rented. At the time, I had a gardener for the maintenance which you terminated. I sent you an email on 23/03/2017 in relation to the gardener.
3.[Ms C] advised that the back garden down by the shed was never accessed. I AM REFERRING TO THE RUBBISH IN THE BACK YARD. SEE PHOTOS AND VIDEOS. [I] DO NOT HAVE ACCESS TO THE SHED AND HAVE NOT CHECKED THE INSIDE
4, 5,6
& 7.As [Ms C] leased the property for 5 yrs and the property is very dated and the items you mentioned were not intentionally/deliberately damaged this would be classed as wear and tare [sic]. THE ITEMS ARE NOT WEAR AND TEAR. SEE LESSOR GUIDE - Neglectful damage versus wear and tear
In regards to your other queries;
1.It is not considered a reasonable request for all inspections since the start of a 5yr tenancy.
2.Not considered reasonable or relevant, a tenancy database check was completed prior to offering the property to [Ms C].
3.The report has not yet been written up yet, it will be forwarded to [Ms C] in due course.
4.End of financial year statements are generated and issued after the end of the tax year.
5.There are no soft furnishings; ie carpets or curtains that would be required to be fumigated. IT IS NOT A REQUIREMENT TO HAVE CARPETS AND CURTAIN FOR THE PLACE TO BE FUMIGATED. FLEAS TREATMENT IS REQUIRED AT THE END OF THE TENANCY. THE ODOUR IN THE GAMES ROOM AND FRONT BED ROOM NEED TO BE ADDRESSED.
As well as making the comments we have just highlighted, in her email of 24 March 2022, Ms J again asked Mr Shanks to provide her with inspection reports for the Property. She asked Mr Shanks to provide her with copies of documents requested by her insurance company by 28 March 2022 so she could make a claim against her landlord's insurance policy. The requested documents included the tenancy agreement, inspection reports, invoices for any repairs that had been carried out, any breach notices issued to the tenant, and bond refund documents confirming the amount of the bond monies and where they were refunded to.
Ms J also took two photos of the Property, which she confirmed in her email of 24 March 2022, when she had visited that day. One photo appears to be of part of the garage showing white paint marks on the floor, cardboard and some planks of wood left behind. The other photo is of two black plastic tubs and some other rubbish left next to a wheelie bin near an outside wall of the house.

Did Mr Shanks and Sanz Property breach s 29(4)(b) of the RT Act by failing to lodge the bond monies with the Bond Administrator in the 14-day time limit prescribed by the RT Act?

Yes.
As discussed above, Mr Shanks thought that the late lodgement of the bond was previously investigated by the Department, who decided that no further action needed to be taken. Based on the information filed in these proceedings we could not tell what had happened, but nevertheless, this complaint was part of the referral from the Commissioner to this Tribunal.
The 'Lodgement of Security Bond Money' form states that the bond of $2,140 was paid to Sanz Property on 19 December 2016, which was the date the tenancy commenced. The bond needed to be paid to the bond administrator by 2 January 2017, being 14 days from the date the bond was paid. The form shows that the bond was paid by Mr Shanks 14 days late, on 16 January 2017.
We therefore find that Sanz Property breached s 29(4)(b) of the RT Act by failing to lodge the bond monies in the 14-day time limit prescribed by the RT Act.

Our findings about the issue

The Commissioner has alleged, pursuant to s 102(1)(a) of the REBA Act, that there is proper cause for disciplinary action, as mentioned in s 103(2) of the REBA Act, against Sanz Property and Mr Shanks.
Subsection 103(2)(c) and (d) of the REBA Act, which we outlined above, provides, amongst other things, that there will be proper cause for disciplinary action against an agent if the agent has breached the requirements of the REBA Act, or the Code, or if any other cause exists that, in the opinion of the Tribunal, renders the agent unfit to hold a licence.
Specifically, we have found that Sanz Property and Mr Shanks have breached:
(a)s 68 of the REBA Act when Mr Shanks transferred the bond monies from the business trust account into his personal bank account;
(b)rule 10 of the Code by failing to respond to Ms J within a reasonable time, and failing to follow her instructions;
(c)rule 6 of the Code by failing, amongst other things, to properly undertake a final property inspection of the property; and
(d)s 29(4)(b) of the RT Act by failing to lodge the bond monies with the Bond Administrator in the 14-day time limit.
We are satisfied, and we therefore find, that the allegation is made out.
In our view, the most serious breaches concerned Mr Shanks transferring the bond monies from the business trust account into his personal bank account. That alone would justify a finding that there is proper cause for disciplinary action against Sanz Property and Mr Shanks.
The Commissioner has sought orders that Sanz Property and Mr Shanks are fined pursuant to s 103(1)(b) of the REBA Act, that they are reprimanded pursuant to s 103(1)(a) of the REBA Act, and that they pay the Commissioner's costs of the proceedings, pursuant to s 87(2) of the State Administrative Tribunal Act 2004 (WA) (SAT Act).
Counsel for the Commissioner did not make any detailed submissions about the appropriate amount of the fine, and we do not have any information about what the Commissioner's costs of the proceedings are. We therefore require further submissions from the parties as to the appropriate penalties when they have had the opportunity to consider our findings.
There is proper cause for disciplinary action against the First Respondent, Sanz Property Solutions Pty Ltd and the Second Respondent, Mr Phillip Shanks, as mentioned in s 103(2)(c) and (d) of the REBA Act.

Orders

The Tribunal orders:
1.There is proper cause for disciplinary action against the First Respondent, Sanz Property Solutions Pty Ltd, and the Second Respondent, Mr Shanks, as mentioned in s 103(2)(c) and (d) of the Real Estate and Business Agents Act 1978 (WA).
2.By 5 November 2024 the Commissioner for Consumer Protection is to file with the Tribunal and serve on the First and Second Respondent submissions on penalties and costs.
3.By 3 December 2024 the First and Second Respondent are to file with the Tribunal and serve on the Commissioner for Consumer Protection submissions on penalties and costs.
4.Subject to any further order, the determination of penalties and costs will be determined entirely on the documents pursuant to s 60(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.
DR M EVANS-BONNER, SENIOR MEMBER
8 OCTOBER 2024