COMMISSIONER FOR CONSUMER PROTECTION and THE KING AND I PTY LTD (ACN 060968809)
[2016] WASAT 125 (S)
•13 MARCH 2017
COMMISSIONER FOR CONSUMER PROTECTION and THE KING AND I PTY LTD (ACN 060968809) [2016] WASAT 125 (S)
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2016] WASAT 125 (S) | |
| REAL ESTATE AND BUSINESS AGENTS ACT 1978 (WA) | |||
| Case No: | VR:112/2014 | 18 JANUARY 2017 | |
| Coram: | JUSTICE J C CURTHOYS (PRESIDENT) MS D QUINLAN (MEMBER) MR R ADAMS (SESSIONAL MEMBER) | 13/03/17 | |
| 23 | Judgment Part: | 1 of 1 | |
| Result: | Third respondent disqualified from applying for a real estate sales representative's licence for 15 years Second and third respondent jointly and severally liable for Commissioner's costs | ||
| B | |||
| PDF Version |
| Parties: | COMMISSIONER FOR CONSUMER PROTECTION THE KING AND I PTY LTD (ACN 060968809) COLIN MAXWELL KING PAUL ANTHONY KING |
Catchwords: | Real estate sales representative Penalty Disqualification for fifteen years |
Legislation: | Real Estate and Business Agents Act 1968 (WA), s 27, s 61(4), s 61(5), s 102(6), s 103(3), s 103(4) Settlement Agents Act 1981 (WA), s 83 |
Case References: | A Solicitor v Council of the Law Society of NSW [2004] HCA l; (2004) 216 CLR 253 Barristers' Board v Darveniza [2000] QCA 253; (2000) 112 A Crim R 438 Barwick v Council of the Law Society of NSW [2004] NSWCA 32 Chamberlain v Law Society of the Australian Capital Territory (1993) 118 ALR 54 Commissioner for Consumer Protection and Samykannu Pty Ltd [2013] WASAT 129 (S) Commissioner for Consumer Protection and The King and I Pty Ltd (ACN 06098809) [2016] WASAT 125 Council of the Law Society (NSW) v A Solicitor [2002] NSWCA 62 Grljusich v Andrews [2003] WASCA 206 Law Society of New South Wales v Walsh [1997] NSWCA 185 Legal Practitioners Complaints Committee v Thorpe [2008] WASC 9 Legal Profession Complaints Committee and A Legal Practitioner [2013] WASAT 37 (S) Legal Profession Complaints Committee and Leask [2010] WASAT 133 Legal Profession Complaints Committee and Wells [2014] WASAT 112 Legal Profession Complaints Committee v Brickhill [2013] WASC 369 Legal Profession Complaints Committee v Detata [2012] WASCA 2014 Legal Profession Complaints Committee v Love [2014] WASC 389 Legal Profession Complaints Committee v O'Halloran [2013] WASC 430 Legal Profession Complaints Committee v Segler [2014] WASC 159 Medical Board of Western Australia and Roberman [2005] WASAT 81 (S) New South Wales Bar Association v Cummins [2001] NSWCA 284; (2001) 52 NSWLR 279 New South Wales Bar Association v Evatt (1968) 117 CLR 177 New South Wales Bar Association v Maddocks [1988] NSWCA 102 Paridis v Settlement Agents Supervisory Board [2007] WASCA 97 Quinn v Law Institute of Victoria [2007] VSCA 122 Re A Practitioner (1984) 36 SASR 590 Re H (a Barrister) [1981] 1 WLR 1257 Real Estate and Business Agents Supervisory Board and Carmello [2008] WASAT 115 Real Estate and Business Agents Supervisory Board v Landa [2009] WASCA 191 Smith v New South Wales Bar Association [1992] HCA 36; (1992) 176 CLR 256 Veterinary Surgeons Investigating Committee v Howe (No 2) [2003] NSWADT 159 |
Orders | 1. In relation to VR 112 of 2014, Paul Anthony King is disqualified for applying for a real estate sales representative's licence for 15 years.,2. Colin Maxwell King is to pay 5/6 of the Commissioner for Consumer Protection's costs in the review proceedings VR 125 of 2014.,3. Paul Anthony King is to pay 5/6 of the Commissioner for Consumer Protection's costs in the disciplinary proceedings VR 112 of 2014, fixed at $39,000.,4. Colin Maxwell King and Paul Anthony King are jointly and severally liable for the Commissioner for Consumer Protection's costs of $39,000 in VR 112 of 2014 and VR 125 of 2014. |
Summary | These reasons concerned the appropriate penalty to be imposed on the third respondent, Paul Anthony King, a real estate sales representative under the Real Estate and Business Agents Act 1978 (WA) following the Tribunal's findings in Commissioner for Consumer Protection and The King and I Pty Ltd (ACN 06098809) [2016] WASAT 125 that Paul King had committed 13 breaches of the Code of Conduct for Agents and Sales Representatives 1993 in relation to the onsale of five properties.,The Tribunal determined that Paul King be disqualified from applying for a real estate licence for 15 years. Such a long period of time was required to reflect the seriousness of his conduct.,Paul Anthony King and Colin Maxwell King were ordered to pay 5/6 of the Commissioner for Consumer Protection's costs. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL ACT : REAL ESTATE AND BUSINESS AGENTS ACT 1978 (WA) CITATION : COMMISSIONER FOR CONSUMER PROTECTION and THE KING AND I PTY LTD (ACN 060968809) [2016] WASAT 125 (S) MEMBER : JUSTICE J C CURTHOYS (PRESIDENT)
- MS D QUINLAN (MEMBER)
MR R ADAMS (SESSIONAL MEMBER)
- VR 125 of 2014
- Applicant
AND
THE KING AND I PTY LTD (ACN 060968809)
First Respondent
COLIN MAXWELL KING
Second Respondent
PAUL ANTHONY KING
Third Respondent
Catchwords:
Real estate sales representative - Penalty - Disqualification for fifteen years
Legislation:
Real Estate and Business Agents Act 1968 (WA), s 27, s 61(4), s 61(5), s 102(6), s 103(3), s 103(4)
Settlement Agents Act 1981 (WA), s 83
Result:
Third respondent disqualified from applying for a real estate sales representative's licence for 15 years
Second and third respondent jointly and severally liable for Commissioner's costs
Summary of Tribunal's decision:
These reasons concerned the appropriate penalty to be imposed on the third respondent, Paul Anthony King, a real estate sales representative under the Real Estate and Business Agents Act 1978 (WA) following the Tribunal's findings in Commissioner for Consumer Protection and The King and I Pty Ltd (ACN 06098809) [2016] WASAT 125 that Paul King had committed 13 breaches of the Code of Conduct for Agents and Sales Representatives 1993 in relation to the onsale of five properties.
The Tribunal determined that Paul King be disqualified from applying for a real estate licence for 15 years. Such a long period of time was required to reflect the seriousness of his conduct.
Paul Anthony King and Colin Maxwell King were ordered to pay 5/6 of the Commissioner for Consumer Protection's costs.
Category: B
Representation:
Counsel:
Applicant : Mr J Derby
First Respondent : Mr JM Healy
Second Respondent : Mr JM Healy
Third Respondent : Mr JM Healy
Solicitors:
Applicant : Department of Commerce
First Respondent : Culshaw Miller Lawyers
Second Respondent : Culshaw Miller Lawyers
Third Respondent : Culshaw Miller Lawyers
Case(s) referred to in decision(s):
A Solicitor v Council of the Law Society of NSW [2004] HCA l; (2004) 216 CLR 253
Barristers' Board v Darveniza [2000] QCA 253; (2000) 112 A Crim R 438
Barwick v Council of the Law Society of NSW [2004] NSWCA 32
Chamberlain v Law Society of the Australian Capital Territory (1993) 118 ALR 54
Commissioner for Consumer Protection and Samykannu Pty Ltd [2013] WASAT 129 (S)
Commissioner for Consumer Protection and The King and I Pty Ltd (ACN 06098809) [2016] WASAT 125
Council of the Law Society (NSW) v A Solicitor [2002] NSWCA 62
Grljusich v Andrews [2003] WASCA 206
Law Society of New South Wales v Walsh [1997] NSWCA 185
Legal Practitioners Complaints Committee v Thorpe [2008] WASC 9
Legal Profession Complaints Committee and A Legal Practitioner [2013] WASAT 37 (S)
Legal Profession Complaints Committee and Leask [2010] WASAT 133
Legal Profession Complaints Committee and Wells [2014] WASAT 112
Legal Profession Complaints Committee v Brickhill [2013] WASC 369
Legal Profession Complaints Committee v Detata [2012] WASCA 2014
Legal Profession Complaints Committee v Love [2014] WASC 389
Legal Profession Complaints Committee v O'Halloran [2013] WASC 430
Legal Profession Complaints Committee v Segler [2014] WASC 159
Medical Board of Western Australia and Roberman [2005] WASAT 81 (S)
New South Wales Bar Association v Cummins [2001] NSWCA 284; (2001) 52 NSWLR 279
New South Wales Bar Association v Evatt (1968) 117 CLR 177
New South Wales Bar Association v Maddocks [1988] NSWCA 102
Paridis v Settlement Agents Supervisory Board [2007] WASCA 97
Quinn v Law Institute of Victoria [2007] VSCA 122
Re A Practitioner (1984) 36 SASR 590
Re H (a Barrister) [1981] 1 WLR 1257
Real Estate and Business Agents Supervisory Board and Carmello [2008] WASAT 115
Real Estate and Business Agents Supervisory Board v Landa [2009] WASCA 191
Smith v New South Wales Bar Association [1992] HCA 36; (1992) 176 CLR 256
Veterinary Surgeons Investigating Committee v Howe (No 2) [2003] NSWADT 159
Introduction
1 These reasons concern the appropriate penalty to be imposed on the third respondent, Paul Anthony King, a real estate sales representative under the Real Estate and Business Agents Act 1978 (WA) (the REBA Act)
2 The Tribunal determined on 26 October 2016, that proper cause existed for disciplinary action against Paul King under s 103(4) of the REBA Act in that he breached clauses 2, 5(1), 5(2), 8(2) and 10(1) of the Code of Conduct for Agents and Sales Representatives 1993 (Code of Conduct) (see Commissioner for Consumer Protection and The King and I Pty Ltd (ACN 06098809) [2016] WASAT 125 (King & I)).
The Tribunal's jurisdiction
3 Paul King held a certificate of registration as a sales representative until 4 September 2014. The evidence before the Tribunal did not establish whether he ceased to be registered through expiry or surrender.
4 Section 102(6) of the REBA Act provides that notwithstanding the expiry of a certificate of registration, an allegation of proper cause for disciplinary action regarding a sales representative may be made not later than 12 months after expiry and the Tribunal may exercise the powers conferred in s 103 of the REBA Act, other than the powers of suspension or cancellation.
5 The Commissioner's application was filed on 26 June 2014. Accordingly, the Tribunal has jurisdiction to make orders for penalties against Paul King.
The available penalties
6 Section 102(1) of the REBA Act provides "The Commissioner may allege to the Tribunal that there is proper cause for disciplinary action, as mentioned under s 103(4) against a sales representative.
7 Section 103(3) of the REBA Act provides:
If, in a proceeding commenced by an allegation under section 102(1) against a sales representative, 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 sales representative;
(b) impose a fine not exceeding $3 000 on him;
(c) suspend or cancel his registration 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 being registered;
(d) where the State Administrative Tribunal is satisfied that the sales representative is acting or has acted in breach of section 64(2), order the sales representative to pay to the agent’s principal any profit that the sales representative has made, or is, in the opinion of the State Administrative Tribunal, likely to make from the transaction.
The nature and seriousness of the conduct
8 Paul King's conduct is detailed at length in King & I. His conduct breached the fundamental obligations of a sales representative.
9 Paul King was found to have committed 13 breaches of the Code of Conduct in relation to the onsale of five properties.
10 Paul King's conduct occurred over a long period of time, between 2008 and 2011. It resulted in a significant loss to the original owners, in that, they did not achieve the sale price they should have had the intermediate sale between them and the ultimate buyers not taken place. There was a total mark up of approximately $5,400,000 between the original purchase price and the on sale price of the five property transactions in which Paul King was involved. The sellers would not have sold their properties to the Palumbo companies if they knew there was another purchaser who was willing to pay a significantly higher price.
11 The duty to act fairly and honestly is an important duty for those in the real estate industry and a serious failure to observe that duty warrants a significant penalty.
12 Paul King placed his own interests and the interests of related parties ahead of his principal. This is a fundamental breach of Paul King's duty as a real estate sales representative. He actively participated in a scheme that concealed from the sellers the existence of another buyer willing to pay a premium for the land and from the ultimate purchasers that they were buying the land at a premium from an intermediary company, not the original seller. Paul King conducted negotiations and witnessed documents in each transaction subsequent to the first. Paul King misled and withheld material information about the ultimate purchaser in order to facilitate the onsales.
13 Paul King was deliberately untruthful and his evidence before the Tribunal was not credible. Paul King sought to his minimise his involvement to conceal his conduct from the Tribunal.
14 Paul King's conduct in facilitating the transactions was at the very upper end of the range of seriousness. The only way in which the breach could have been more serious was if it had been established that he personally received part of the $5,400,000 mark up.
Disciplinary sanctions general principles
15 The appropriate penalty is to be considered at the time of imposing the penalty and not at the date of the unprofessional acts (Legal Profession Complaints Committee and A Legal Practitioner [2013] WASAT 37 (S) (A Legal Practitioner (S)) at [23]; Legal Profession Complaints Committee v Segler [2014] WASC 159 at [7]; A Solicitor v Council of the Law Society of NSW [2004] HCA l; (2004) 216 CLR 253 (A Solicitor [2004] NSW) at [15]; Legal Profession Complaints Committee v Love [2014] WASC 389 at [16]).
General matters relating to sanctions
16 Where there is a choice of sanctions, the Tribunal will choose that sanction which maximises the protection of the public (Quinn v Law Institute of Victoria [2007] VSCA 122 at [31]).
17 The dominant purpose of the disciplinary provisions of the REBA Act is the protection of the public by the maintenance of proper standards within the profession. Hence, the impact which an appropriate penalty would have upon an agent guilty of misconduct, and personal hardship to an agent, are necessarily secondary considerations (see Legal Profession Complaints Committee v Detata [2012] WASCA 2014 at [47] and Legal Profession Complaints Committee v Masten [2011] WASC 71 at [29]; Legal Profession Complaints Committee and Leask [2010] WASAT 133 at [54]).
18 It is the agent's conduct that attracts any sanction (A Legal Practitioner (S) at [24]; Smith v New South Wales Bar Association [1992] HCA 36; (1992) 176 CLR 256 at 267-268 and 271-272; A Solicitor [2004] NSW).
19 As the Tribunal explained in A Legal Practitioner (S) at [24]:
... [I]n determining the appropriate penalty, care needs to be taken that the penalty reflects the matters with which the practitioner is charged and not other conduct including the defence of the action by the practitioner which is ultimately held to be unsuccessful: Smith v New South Wales Bar Association [1992] HCA 36; (1992) 176 CLR 256 (Smith) at 267-268 and 271-272[.]
Cancellation of registration
20 The jurisdiction of the Tribunal to cancel an agent's registration is exercised not for the purpose of punishing the agent concerned, but for the protection of the public and the reputation and standards of the profession: Legal Practitioners Complaints Committee v Thorpe [2008] WASC 9 at [43].
21 Where an order for cancellation of an agent's registration is contemplated, the ultimate question is whether the material demonstrates that the agent is not a fit and proper person to remain an agent: ASolicitor [2004] NSW at [15].
22 An agent is not a fit and proper person to be a registered agent and should be removed from the register where the conduct is so serious that the agent is permanently or indefinitely unfit to practise (Veterinary Surgeons Investigating Committee v Howe (No 2) [2003] NSWADT 159 at [27]; Barristers' Board v Darveniza [2000] QCA 253; (2000) 112 A Crim R 438 at [38]; Love at [17]-[18]; A Legal Practitioner (S) at [21]-[25]; Legal Profession Complaints Committee v Brickhill [2013] WASC 369 at [19][20] (Thomas JA, McMurdo P and White J agreeing); NewSouth Wales Bar Association v Cummins [2001] NSWCA 284; (2001) 52 NSWLR 279 at [26][28]); Love at [17][18]).
23 The practical effect of an order cancelling registration is that if an agent wishes to resume practice he/she must persuade the relevant regulatory authority that he/she is truly reformed and that he/she is a fit and proper person to resume practice.
Suspension
24 Suspension is a less serious result and differs from cancellation of an agent's registration because suspension is for a specified limited period.
25 The proper use of suspension is in cases where the agent has fallen below the high standards to be expected of such an agent, but not in such a way as to indicate that the agent lacks the qualities of character which are the necessary attributes of a person entrusted with the responsibilities of an agent (A Legal Practitioner (S) at [26]; Re A Practitioner (1984) 36 SASR 590 at 593 per King CJ). That is, suspension is suitable where the Tribunal is satisfied that, upon completion of the period of suspension, the agent will be fit to resume practice (A Legal Practitioner (S) at [27]).
26 The practical effect of an order suspending registration is that at the end of the period of suspension, the agent is entitled to resume practice without having to prove that he/she is a fit and proper person.
Principles relating to determining a penalty
27 In Paridis v Settlement Agents Supervisory Board [2007] WASCA 97 (Paridis), the Court of Appeal set out the principles relevant to a breach of the Code of Conduct under the Settlement Agents Act. Those principles apply equally to a breach of the Code of Conduct under the REBA Act. In Paridis at [25], Buss JA stated:
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. See, for example, Ziems v The Prothonotaryof the Supreme Court of New South Wales (1957) 97 CLR 279 at 286; Clyne v New South Wales Bar Association (1961) 104 CLR 186 at 201–202; New South Wales Bar Association v Evatt (1968) 117 CLR 177 at 183–184; Re a Barrister and Solicitor; Ex parte Attorney-General for the Commonwealth (1972) 20 FLR 234 at 244; Re a Barrister and Solicitor (1979) 40 FLR 1 at 2425; Re a Practitioner; Ex parte The Legal Practitioners Disciplinary Tribunal [2001] WASCA 204 at [6][7]. As Crawford J noted, in Law Society of Tasmania v Turner (2001) 11 Tas R 1, at 24 [61], in the context of disciplinary proceedings against a legal practitioner:
The powers of the Court are to be exercised for the purpose of, and in a manner seen to be likely to achieve, the maintenance of that high standard of conduct within the profession which will continue its good reputation, and so protect, not only the future of the profession, but also its clients from harm. The Court's task is to uphold the dignity and standards of the profession and to enable it to do so, it has many powers, including the power to impose a fine not exceeding $20,000, to order payment of costs, to suspend and to strike off. Such orders are, of course, of a punitive nature but their imposition should not be regarded as sentences as for crimes and offences. The order the Court makes should be one 'which, in its opinion, is necessary, and no more than is necessary, to maintain professional discipline and high standards of conduct'. Dickens v Law Society [42/1981] at 16.
28 In Paridis at [30], Buss JA set out the relevant factors in assessing a penalty under s 83 of the Settlement Agents Act as:
1) the conduct giving rise to the allegations and its seriousness;
2) the 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 agents;
4) the necessity for general deterrence; and
5) personal matters, of a mitigatory nature, including the agent's professional behaviour before and after the incidents in question, and the extent of the agent's rehabilitation.
29 In Legal Profession Complaints Committee and Wells [2014] WASAT 112 (Wells) the Tribunal set out a list of 12 factors to be considered. The matters set out in Wells are illustrative of the matters set out by the Court of Appeal in Paridis.
30 The matters set out below are interrelated and are not mutually exclusive. The list of matters is not exhaustive and it is not a code. The 12 factors are:
1) any need to protect the public against further misconduct by the agent (Craig v Medical Board of South Australia (2001) 79 SASR 545 (Craig) at [47]; Legal Profession Complaints Committee and Amsden [2014] WASAT 57 (S) (Amsden (S)) at [8]; Law Society of New South Wales v Foreman (1994) 34 NSWLR (Foreman) at 440C; NSW Bar Association v Hamman [1999] NSWCA 404 (Hamman) at [77]);
2) the need to protect the public through general deterrence of other agents from similar conduct (Jemielita v Medical Board of Western Australia (unreported, WASC Library No 920584, 13 November 1992); Veterinary Practitioners Board of New South Wales v Johnson [2010] NSWADT 308 (Johnson) at [103]; Hamman at[77]); Paridis at [30(4)]);
3) the need to protect the public and maintain public confidence in the profession by reinforcing high professional standard and denouncing transgressions and thereby articulating the high standards expected of the profession (Amsden (S) at [8]; Foreman at 444F; and Hamman at [77] and [79]), 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 (Craig at [64]; Johnson at [103]); Paridis at [30(3)]);
4) in the case of conduct involving misleading conduct, including dishonesty, whether the public and fellow agents can place reliance on the word and conduct of the agent (Johnson at [109]; Foreman at 445B-445G);
5) whether the agent has breached any:
a) Act;
b) Regulations;
c) Guidelines or Code of Conduct, issued by the relevant professional body; and
d) whether the practitioner 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 (Foreman at 442E-442G; New South Wales Bar Association v Evatt (1968) 117 CLR 177 at 183; Council of the Law Society (NSW) v A Solicitor [2002] NSWCA 62 at [80]; Chamberlain v Law Society of the Australian Capital Territory (1993) 118 ALR 54 at 62 and 63);
8) the agent's disciplinary history (Legal Profession Complaints Committee v O'Halloran [2013] WASC 430 at [93]);
9) whether or not the agent understands the error of his ways, including an assessment of any remorse and insight (or a lack thereof) shown by the agent, since an agent who fails to understand the significance and consequences of misconduct is a risk to the community (Law Society of New South Wales v Walsh [1997] NSWCA 185 per Beazley JJA (Walsh); Legal Profession Complaints Committee v Lashansky [2007] WASC 211 at [31]-[52] and (second) at [35]; Amsden (S) at [8]; Foreman at 444E; Love at [9]);
The agent's conduct of the defence and the veracity and candour of his testimony will often be the best evidence as to whether any mitigating circumstances, including remorse, reform, character change and subsequent good deeds, are to be accepted (A Legal Practitioner (S) at [24]; Barwick v Council of the Law Society of NSW [2004] NSWCA 32 at [108][109]; New South Wales Bar Association v Maddocks [1988] NSWCA 102).
Lack of remorse should not, in the absence of aggravating factors, be the predominate factor leading to a heavy sanction if otherwise a lighter sanction would be applied; Re H (a Barrister) [1981] 1 WLR 1257.
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 interest in the honesty and integrity of legal practitioners and in the maintenance of proper standards of legal practice (Love at [59]); Paridis at [30(5)]); and
12) the Tribunal may consider 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 (A Legal Practitioner (S) at [25]). Ingeneral, mitigating factors such as no previous misconduct or service to the profession are of considerably less significance than in the criminal process because the jurisdiction is protective not punitive (Walsh).
31 All of the above matters are to be considered in the context of the Tribunal's findings as to penalty, that is, how serious was the conduct and the agent's explanation for the conduct (Paridis at [30(1)][30(2)]).
Factor 1 Is there a need to protect the public against further misconduct by Paul King?
32 The duty to act fairly and honestly is central to an agent's obligation to their principles. Any breach of that obligation, particularly such a serious breach as Paul King's, raises the risk of further misconduct because it reflects a breach of such a fundamental obligation. The Tribunal is satisfied that there is a need to protect the public against further misconduct by Paul King.
Factor 2 Is there a need to protect the public through general deterrence of other agents?
33 The Tribunal is satisfied that, given the fundamental obligation of agents to act fairly and honestly, there is a need to protect the public through general deterrence of other agents from engaging in conduct such as Paul King's. A serious penalty is required to discourage others.
Factor 3 Is there a need to protect the public by reinforcing high professional standards and denouncing transgressions?
34 Given the fundamental obligation of agents to act fairly and honestly, there is a need to protect the public by reinforcing high professional standards and denouncing transgressions.
35 The conduct in this matter went to the fundamental obligations of a real estate agent and a sales representative. That is no less the case when considering the obligations of a sales representative which are, in effect, the same under the Code of Conduct as those of an agent.
36 Paul King's conduct involved a deliberate, calculated and egregious breach of proper professional and ethical standards of behaviour. Dishonesty by a sales representative in dealings with his principal strikes at the heart of the obligations imposed on sales representatives.
37 Conduct of this nature must be addressed by a substantial penalty in order to maintain public confidence in the standards of the profession.
38 The Tribunal is satisfied that there is a substantial need to reinforce to the real estate industry the importance of the obligations owed by agents and sales representatives and that breaches of those obligations carry serious consequences.
Factor 4 Dishonesty
39 The Tribunal is satisfied that the present case involves calculated and sustained dishonesty such that no reliance could be placed on Paul King's word.
Factor 5 Breach of an Act, Regulations, Guidelines or Code of Conduct
40 Paul King committed 13 breaches of the Code of Conduct.
Factor 6 Incompetence
41 Incompetence is not a relevant factor.
Factor 7 Was the incident isolated?
42 The Tribunal is satisfied that the conduct was an ongoing course of dishonest, misleading and unfair conduct over a protracted period of time and a number of properties. It was not isolated.
Factor 8 Paul King's disciplinary history
43 Paul King has no relevant prior disciplinary history. The weight of a previous prior disciplinary history will be of less importance when the conduct is at the upper end of seriousness.
Factor 9 Whether or not Paul King understands the error of his ways, including an assessment of any remorse and insight (or a lack thereof) shown by him
44 Paul King denied the allegations, attempted to minimise his involvement in the scheme and has not provided an explanation for the conduct. The Tribunal finds that Paul King has shown no remorse.
Factor 10 Are there any special skills possessed by Paul King?
45 Paul King has no special skills in the context of the real estate industry that would make it desirable to continue to allow him to hold a sales representative licence.
Factor 11 Paul King's personal circumstances
46 Paul King is currently 48 years of age and prior to September 2014 had worked in the real estate industry as a sales representative for 22 years
47 As a consequence of Paul King not being able to practice as a real estate agent he has been unemployed and has accumulated significant debt due to his unemployment. Outside of the skills he gained in the real estate industry, Paul King does not have any special skills and has been unable to secure employment in another industry.
48 Paul King's assets include three residential properties which are each the subject of seizure and sale orders as a consequence of mortgagee or unsecured debt recovery actions. Furthermore, he currently has unsecured consumer credit liabilities in excess of $100,000 and is reliant on the continuation of the consumer credit to provide life's necessities.
49 The Tribunal accepts that suspension or disqualification will have a significant adverse effect.
50 As is noted above the Tribunals primary obligation is the protection of the public. The weight given to Paul King's present circumstances cannot override that fundamental obligation.
51 Paul King has provided three references, all of which state that his conduct is out of character. The Tribunal has had regard to those references in fixing a penalty. However, the conduct is so serious that even though it may be out of character, the obligations of the Tribunal to the protection of the public outweighs that the conduct may be out of character.
Factor 12 Are there any other matters related to Paul King's fitness to practise?
52 Paul King submitted that although he did not wish to downplay the findings made by this Tribunal regarding the on-sale scheme and the impact that was found to have on the initial sellers, on the evidence, the initial price obtained for the sale of the properties was at the full market value.
53 'Value' is only a theoretical price. It is no answer to the fact that the sellers could have in fact obtained a higher price to say that they received the theoretical price.
54 A third party should not be able to profit by the fact that an agent or sales representative has concealed from a seller a higher price he knows the buyer is in fact prepared to pay.
55 Similarly, Paul King argued there was no complaint was made by any of the buyers of the properties in respect to the price they had paid for the properties. He argued that in that sense the conduct is not causative of any loss or damage which that second buyer has complained about.
56 The fact that the buyers did not complain of the price when they were not fully aware of the circumstances is irrelevant.
57 Paul King submitted that he did not personally profit from the onsale scheme, and as such consideration as to penalty should not proceed on the basis that he was motivated by money.
58 Although Paul King did not personally profit, he was prepared to assist his brother to make a very substantial profit. The fact that Paul King did not personally profit is a factor that the Tribunal has taken into account. Paul King submitted that the following matters should be factored in as a positive reduction in the quantum of the penalty imposed in these proceedings:
1) the facts as pleaded by the Commissioner were largely agreed by Paul King which meant that the hearing could be focused on the proper inferences that could be drawn from the evidence: King & I at [8];
2) the respondents' counsel only engaged in focused crossexamination of the Commissioner's witnesses: King & I at [264]; and
3) detailed written closing submissions were lodged by the respondents.
59 The Tribunal had regard to these matters in fixing a penalty.
Appropriate penalty
60 The Commissioner submitted that taking into account:
1) the extremely dishonest and deceitful nature of the conduct;
2) that Paul King acted in a deliberate and calculated manner to conceal information and mislead his principals;
3) that Paul King advanced his own interests and the interests of related parties ahead of his principals' interests;
4) the significant losses suffered by the original owners as a result of the on sale;
5) the conduct occurred over a long period of time demonstrating an overall disregard for the Code of Conduct and the trust and confidence placed in him by his principals; and
6) the untruthfulness of Paul King's evidence,
61 the only appropriate conclusion is that the protection of the public requires that Paul King be permanently disqualified.
62 There is no evidence that Paul King advanced his own interests. He did not provide any explanation for his conduct.
63 Paul King submitted that similarly to the consideration of the Court Grljusich v Andrews [2003] WASCA 206 at [162], the nature and extent of Paul King's conduct does not involve such a breach of public trust that it should be thought that Paul King is incapable of re-establishing himself over a period of time.
64 Paul King submitted that other than his conduct being found to be in breach of the Code of Conduct, he is otherwise of good character and up to September 2014 had maintained a good reputation in the industry in respect to the marketing and sale of Western Australian rural properties in the wheatbelt region. As seen from his references he is well liked and has a detailed knowledge of the farming properties which is of benefit to sellers and buyers alike.
65 Paul King submitted that a period of disqualification from practice as a real estate agent is not warranted when taking into consideration the whole of the relevant circumstances to determine what penalty will most properly give effect to the objects of the REBA Act.
66 Paul King further submitted that:
a) if a disqualification order is appropriate then it should be for a limited period, and also factor in that he has not been operating as a real estate agent since September 2014 because he has not had a real estate licence (a period of in excess of two years);
b) the conduct found to be in breach of the Code of Conduct was confined in respect to the circumstances as to how it arose and no other breaches of the Code of Conduct in respect to his conduct as a real estate agent. Incircumstances where he now has the benefit of the Tribunal's findings, and with further training if that were to be ordered, it is unlikely that he will repeat the conduct found to be in breach of the Code of Conduct; and
c) if a disqualification order is made, it should be for a period of 12 months during which time he should undertake such further training as REBA determines to enable him to satisfy REBA that he fulfils the requirements of s 27 of the REBA Act for the granting of a licence.
67 The Tribunal is satisfied that Paul King should be disqualified from applying for a real estate licence for 15 years. Such a long period of time is required to reflect the seriousness of his conduct.
68 Although Paul King's licence cannot be cancelled, the conditions that are relevant to whether a licence should be cancelled or suspended are relevant to determining whether Paul King should be disqualified and if so, for how long. The factors relevant to a longer period of disqualification will equate to those for cancellation and those for a shorter period will equate to suspension.
Fine
69 The Tribunal can impose a separate fine for each allegation. The Tribunal also has discretion to impose a global fine where there are multiple allegations. The maximum penalty for each allegation is $3,000. The Tribunal found that there was no evidence of Paul King's involvement in the first transaction but Paul was found to have committed 13 contraventions of the Code of Conduct in relation to the other five transactions. The Commissioner submitted that the total maximum fine is therefore $39,000.
70 Paul King submitted that the Tribunal's findings are all species of a single finding that Paul King was involved in an onsale scheme in relation to the properties.
71 Paul King submitted that a penalty:
… should only be applied to the conduct in respect to the underlying transactions that is found to be in breach of the Code [of Conduct]. … the conduct that Paul King engaged in which was in breach of multiple clauses of the Code [of Conduct] is the knowledge that he was found to have of the on-sale scheme. Paul King has not engaged in multiple acts of conduct in respect to the sale of [the] Properties … which would warrant individual consideration of sanctions in respect to the breaches of each of clauses 2, 5(2), 8(1) and 10(1) of the Code [of Conduct]. That is to be contrasted with a situation where duplicitous findings were made that there had been a breach of the Code in respect to the sale of a property and a further breach in respect to how commissions were to be paid.
On a proper interpretation of s 103(3) of the REBA Act, one penalty should be applied to Paul King's conduct in respect to the transactions involving Properties 2 and 3. Construed in this way, the maximum penalty should be $6,000, being $3,000 each for the conduct in respect of transactions involving Properties 1 and 2.
72 The Tribunal accepts the Commissioner's submissions that there are 13 separate breaches of the Code of Conduct. The maximum fine is therefore $39,000, that is 13 x $3,000.
73 However, in assessing what fine is appropriate, the Tribunal has taken into account the principles of totality and double jeopardy identified in Paul King's submissions (Real Estate and Business Agents Supervisory Board v Landa [2009] WASCA 191 at [15][18], McClure P, Newnes JA agreeing).
74 There were five separate properties and thus five separate transactions that Paul King's conduct related to. The Tribunal rejects Paul King's submissions that there was only 'one transaction' that is Paul King's involvement in the onsale scheme.
75 The Tribunal finds that the appropriate 'maximum' fine to consider is therefore $15,000, that is 5 x $3,000.
76 However, having regard to the long period of suspension imposed on Paul King and the impact as to his personal circumstances, a fine is not appropriate.
Costs
77 In Medical Board of Western Australia and Roberman [2005] WASAT 81 (S) at [30] (Roberman S), the Tribunal held that where a regulator successfully brings a complaint which justifies disciplinary action, there will usually be a strong case for the awarding of costs to that regulator.
78 Although the decision in Roberman S does not limit the discretion of the Tribunal in awarding costs, the public obligations of the Commissioner to prosecute agents who breach the Code of Conduct is an important factor to be considered.
79 The Tribunal has considered the Commissioner's schedule of costs and is satisfied that they are reasonable.
80 The Commissioner submits that the appropriate orders are that Colin King and Paul King pay 95% of the Commissioner's costs of the disciplinary proceedings and that there be no order for costs as regards The King & I Pty Ltd or in respect of the review proceedings.
81 The Commissioner submitted that he has been wholly successful in the disciplinary proceedings against Paul King and against Colin King in the review proceedings.
82 The Commissioner further submitted that whilst he was unsuccessful in the disciplinary proceedings against Colin King, he relied upon all of the same evidence in the review proceedings as he did in the disciplinary proceedings and therefore, even if the Commissioner had not continued with the disciplinary proceedings against Colin King, he would have run entirely the same case and it is highly likely that there would have been a similar joint hearing of the review application and the disciplinary proceedings against Paul King given the complete cross-over of issues and the joint defence of the respondents.
83 The Commissioner further submitted that although it may be technically appropriate to make the order for costs against Paul in the disciplinary proceedings and Colin King in the review proceedings, it would be artificial to make separate costs orders in each proceeding given the complete overlap of the evidence and issues and the joint defence of the respondents. It is simpler to make the order against Colin King in the disciplinary proceedings.
84 The Commissioner accepted that a small reduction in the costs awarded should be made in view of the Commissioner's lack of success on the jurisdictional argument. The argument occupied only a small amount of time at hearing of the matter (during counsel for the Commissioner's opening statement) and was otherwise dealt with in written submissions. Given the scope of the remainder of the case, a reduction of 5% is appropriate.
85 For the following reasons, the respondents submit that there ought to be no order as to costs. It is fair to say that there were mixed results in respect to the proceedings:
1) the primary actions against The King & I and Colin King were found to be incompetent under the REBA Act;
2) Colin King's review proceedings were unsuccessful;
3) orders were only made against Paul King in respect to the transactions involving Properties 26.
86 The respondents submitted that looking at the totality of the matter each party only achieved approximately half of what they were seeking in the matters before the Tribunal. If costs were to be ordered in respect to the matters which each party was successful in respect to, they would effectively cancel each other out.
87 If the Tribunal were to apportion costs, then the respondents say that the costs should be that the Commissioner pay 60% of their costs, with such amount to be assessed rather than fixed in an englobo amount as sought by the Commissioner. The partial success by a regulatory authority has been found to be a justification for awarding only part of that authority's costs: Commissioner for Consumer Protection and Samykannu Pty Ltd [2013] WASAT 129 (S) at [27].
88 Contrary to the position advanced by the Commissioner, the respondents also submitted that it would not be appropriate to make each of them jointly and severally responsible for the Commissioner's costs of the proceedings because each of the respondents had different complaints/matters that they were pursuing.
89 If costs were to be awarded in favour of the Commissioner, the respondents say that the costs order should not be by way of an indemnity by reference to the costs scale for proceedings in the Tribunal but in a set amount which reflects that the Commissioner has dedicated resources and funding to cover the costs of such regulatory action and that no external counsel was briefed. Awards of costs for a fixed amount were awarded in this way in Paridis at [38] in an amount of $3,000 and in Real Estate and Business Agents Supervisory Board and Carmello [2008] WASAT 115 in an amount of $1,000.
90 In determining the award of costs, the Tribunal adopts a practical broad brush approach. On that basis, the Commissioner was substantially successful.
91 The reality is that the disciplinary and review proceedings were heard together because the factual evidence was relevant to both proceedings. In Colin King's case, although he was successful in the disciplinary proceedings, he was unsuccessful in his application for a licence with the the net effect being that he lost the factual case. The Commissioner was successful against Paul King in five of the six onsales. No extra costs would have been incurred by The King & I Pty Ltd in addition to those of Colin King and Paul King.
92 The Tribunal is satisfied that the costs in the Commissioner's Schedule of Costs are reasonable.
93 Colin King and Paul King are to pay the Commissioner's Costs.
94 The Commissioner's costs in the disciplinary proceedings and the review proceedings are in effect, identical.
95 Colin King is to pay 5/6 of the Commissioner's costs in the review proceedings VR 125 of 2014.
96 Paul King is to pay 5/6 of the Commissioner's costs in the disciplinary proceedings VR 112 of 2014, fixed at $39,000.
97 Colin King and Paul King are jointly and severally liable for the Commissioner's costs of $39,000 in VR 112 of 2014 and VR 125 of 2014.
Orders
1. In relation to VR 112 of 2014, Paul Anthony King is disqualified for applying for a real estate sales representative's licence for 15 years.
2. Colin Maxwell King is to pay 5/6 of the Commissioner for Consumer Protection's costs in the review proceedings VR 125 of 2014.
3. Paul Anthony King is to pay 5/6 of the Commissioner for Consumer Protection's costs in the disciplinary proceedings VR 112 of 2014, fixed at $39,000.
4. Colin Maxwell King and Paul Anthony King are jointly and severally liable for the Commissioner for Consumer Protection's costs of $39,000 in VR 112 of 2014 and VR 125 of 2014.
I certify that this and the preceding [97] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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JUSTICE J C CURTHOYS, PRESIDENT
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