Commissioner for Fair Trading v Blinksell

Case •

[2014] ACAT 11

•

3 February 2014

ACT CIVIL & ADMINISTRATIVE TRIBUNAL



COMMISSIONER FOR FAIR TRADING v BLINKSELL
(Occupational Discipline) [2014] ACAT 11

Case Number            OR 13/37

Catchwords:             OCCUPATIONAL DISCIPLINE – REAL ESTATE AGENT cancellation of real estate agent’s licence and business agent’s licence – disqualification from applying for licence or salesperson’s registration – misapplication of trust monies – whether there is a ground for occupational discipline – respondent’s failure to give evidence: Jones v Dunkel inference – considerations in relation to imposing penalty for breach of occupational discipline – not taking reasonable steps to avoid contravention – no previous contravention –  belated mitigation of the effect of contravention –  impact on real estate industry –  likelihood of repeat behaviour – specific penalty applied for.

Legislation:ACT Civil and Administrative Tribunal Act 2008, ss. 63, 65 & 66

Agents Act 2003, ss. 42, 107, 173

Subordinate

Legislation:Agents Regulation 2003, Schedule 8

Cases:Council of the Law Society of the Australian Capital Territory v The Legal Practitioner (Occupational Discipline) [2010] ACAT 2

Council of the Law Society of the ACT v Legal Practitioner E (Occupational Discipline) [2013] ACAT 7
Davidson v Commissioner for Fair Trading
[2008] NSWADT 269
Director of Consumer Affairs Victoria v Marshall (Review and Regulation) [2013] VCAT 1316

Foong v Director General Department of Finance and Services

[2012] NSWADT 261


Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298
Legal Practitioners Complaints Committee and Trowell
[2009] WASAT 42
Tassios v Commissioner for Fair Trading  

[2005] NSWADT 179


The Chief Executive , DTFTWID v Cornwell, J

[2005] QCCTPAMD 49


 The Chief Executive, Department of Employment, Economic Development and Innovation v Welburn

[2010] QCAT 202


Legal Practitioner v Council of the Law Society of the Australian Capital Territory [2014] ACTSC 9

Watson v Director General Department of Finance and Services [

2012] NSWADT 64



Tribunal:                  Ms E. Symons - Presidential Member

Date of Orders:  3 February 2014

Date of Reasons for Decision:         25 February 2014

ACT CIVIL AND ADMINISTRATIVE TRIBUNAL                   OR 13/37

COMMISSIONER FOR FAIR TRADING

Applicant

AND:  MARK BLINKSELL

Respondent

TRIBUNAL:             Ms E. Symons - Presidential Member

DATE:3 February 2014

ORDER

The Tribunal Orders that:

  1. Pursuant to section 66(2)(e), of the ACT Civil and Administrative Tribunal
    Act 2008     the respondent’s real estate agent licence is cancelled.

  2. Pursuant to section 66(2)(f), of the ACT Civil and Administrative Tribunal
    Act 2008     the respondent is disqualified from applying for a real estate agent’s licence for a period of five years from 15 November 2013.

  1. Pursuant to section 66(2)(f), of the ACT Civil and Administrative Tribunal
    Act 2008     the respondent is disqualified from applying for real estate or business salesperson’s registration for a period of three years from 15 November 2013.

  1. Pursuant to section 66(2)(e), of the ACT Civil and Administrative Tribunal
    Act 2008     the respondent’s business agent licence is cancelled.

  1. Pursuant to section 66(2)(f), of the ACT Civil and Administrative Tribunal
    Act 2008     the respondent is disqualified from applying for a business agent licence for a period of five years from 15 November 2013.

The tribunal notes:

(a)that should the respondent become eligible for and apply for any licence or registration under the Agents Act 2003, the respondent will be required to undertake training to the satisfaction of the applicant in relation to Trust Accounts, including CPPDSM40064 – Establish and Manage Agency Trust Accounts - pursuant to 66 (2)(c) of the ACT Civil and Administrative Tribunal Act 2008.

(b)The respondent through his solicitor, undertook to de-registrar Grapevine Real Estate Pty Ltd on completion of all proceedings

………………………………..

Ms E. Symons - Presidential Member

REASONS FOR DECISION

Introduction

  1. The following reasons for decision explain why the Tribunal has made orders cancelling Mr Blinksell’s real estate agent’s licence; disqualifying Mr Blinksell for a period of five years from 15 November 2013 from applying for a real estate agent’s licence; cancelling Mr Blinksell’s business agent’s licence; disqualifying Mr Blinksell for a period of five years from 15 November 2013 from applying for a business agent’s licence; and disqualifying Mr Blinksell for a period of three years from 15 November 2013 from applying for a real estate or business salesperson’s registration.

  2. The Tribunal has concluded that Mr Blinksell engaged in dishonest conduct in misapplying the deposit monies he had received on or around 7 January 2013 as the vendor’s agent. He effectively stole the vendor’s monies and compounded that dishonest behaviour by obscuring the reality of his conduct by lies and misrepresentation.

Background

  1. At all relevant times, Mr Blinksell (“the respondent”) was the Director of Grapevine Real Estate Pty Ltd (“GRE”) and the holder of a real estate agent’s licence and a business agent’s licence. GRE, at all relevant times, was the holder of a business agent’s licence and a real estate agent’s licence.

  2. On 3 October 2013, the Commissioner for Fair Trading (“the applicant”) filed an application for disciplinary action (“the application”) in the ACT Civil and Administrative Tribunal (“the Tribunal”) against the respondent. The charges identified in the application were that the respondent contravened section 107(1) of the Agents Act 2003 (the Agents Act) in that he dealt with trust money otherwise than as directed by the persons for whom the money was held on trust; and that he contravened section 107(2) of the Agents Act as he received trust money and did not pay the money into a trust account kept by the agent the next ADI (authorised deposit-taking institution) business day after he received the money.

  3. The application sought the following final orders:

    (i)pursuant to section 66(2)(e) of the ACT Civil and Administrative Tribunal Act 2008 )(the ACAT Act) cancelling both the respondent’s real estate agent’s licence and business agent’s licence, and

    (ii)pursuant to section 66(2)(f) disqualifying the respondent from applying for both a real estate agent’s licence and a business agent’s licence for a period of five years, and

    (iii)disqualifying the respondent from applying for a real estate or business salesperson’s registration for a period of five years, and

    (iv)pursuant to section 66(2)(c) of the ACAT Act, if the respondent be eligible for any licence under the Agents Act the respondent is to undertake training to the satisfaction of the applicant in relation to trust accounts including CPPDSM4006A – Establish and Manage Agency Trust Accounts.

  4. On 24 October 2013, the Commissioner filed an amended application (“the amended application”) seeking interim orders pursuant to section 53 of the ACAT Act suspending the respondent’s real estate agent’s licence for a period of three months and the final orders set out above.

  5. On 15 November 2013, the respondent consented to the Tribunal making an order pursuant to section 53 of the ACAT Act suspending his real estate agent’s licence and his business agent’s licence until the earliest of the following:


    (a) 7 February 2014; (b) the tribunal orders otherwise; or (c) the tribunal makes orders at the end of the hearing of the application.

  6. Directions were made on 15 November 2013 for the filing of a statement of agreed facts and the filing of witness statements and any other material relied upon by the parties, and the application was listed for hearing on


    3 February 2014.

  7. The respondent filed a Statement of Admitted Facts on 29 November 2013.

  8. On 13 December 2013, the applicant filed a witness statement of Wendy Harrison, Senior Investigator, dated 1 November 2013 and other material which the Tribunal will refer to below.

  9. On 28 January 2014, the respondent’s solicitor notified the Tribunal and the applicant by email:

    Mr Livingston has advised that in the circumstances we should offer no evidence and accordingly the material required on the 17th January will not be forthcoming.

    As a consequence, our client does not wish to make any further statements in this matter and accordingly we are proceeding on the basis that no evidence will be offered.

  10. At the hearing on 3 February 2014, Mr Archer of counsel appeared for the applicant and Mr Livingston of counsel appeared for the respondent. Mr Archer asked the Tribunal to consider making the findings of fact and orders set out in written submissions which he provided to the Tribunal at the commencement of the hearing, subject to one variation in relation to the length of time of the respondent’s disqualification from applying for a real estate or business salesperson registration. Mr Livingston informed the Tribunal that, subject to the disqualification orders commencing from 15 November 2013, there was an agreement to that proposed course of action.

  11. The Tribunal considered all of the material provided by the parties and the oral and detailed written submissions lodged by Mr Archer as well as the oral submissions by Mr Livingston in making its decision.

  12. At the conclusion of the hearing the Tribunal made the Orders set out in paragraph 1 above. At Mr Archer’s request, the Tribunal agreed to publish reasons.

Issues

  1. The following issues arise for determination:

    i.does a ground for occupational discipline exist; and if so

    ii.     what occupational discipline order is to be made.

Applicable Law

  1. Section 42 of the Agents Act provides:

    42Application to ACAT for occupational discipline—agents

    If the commissioner for fair trading believes on reasonable grounds that a ground for occupational discipline exists in relation to an agent, the commissioner may apply to the ACAT for an occupational discipline order in relation to the agent.

    NoteThe ACT Civil and Administrative Tribunal Act 2008, s 65 sets out when the ACAT may make an occupational discipline order, and s 66 sets out the occupational discipline orders the ACAT may make.

  2. Section 65 and section 66 of the ACAT Act state:

    65Considerations before making orders on application for occupational discipline

    (1)This section applies if the tribunal is considering an application for occupational discipline against a person (the subject person).

    (2)The tribunal may make an order for occupational discipline in relation to the subject person if satisfied that a ground for occupational discipline exists against the person.

    (3)In considering what occupational discipline to use against the subject person, the tribunal must consider the following:

    (a)whether the person took reasonable steps to avoid the action (the contravention) that is the ground for occupational discipline;

    (b)whether occupational discipline has previously been used against the person for a similar act;

    (c)whether the person has taken steps to mitigate the effect of the contravention;

    (d)the impact of the contravention on any other person;

    (e)the likelihood that the person will act in a way that is a ground for occupational discipline in the future;

    (f)whether the entity bringing the application has applied for particular occupational discipline to be used and, if so, the kind of occupational discipline applied for.

    Example—par (c)

    the person has changed a method of work or given a direction to staff to prevent further contraventions

    (4)The tribunal may consider any other relevant matter.

    66Orders for occupational discipline

    (1)This section applies if the tribunal may make an order for occupational discipline in relation to the subject person.

    (2)The tribunal may make 1 or more of the following orders for occupational discipline in relation to the subject person:

    (a)reprimand the person;

    (b)require the person to give a written undertaking;

    (c)require the person to complete a stated course of training to the satisfaction of the regulatory body or another stated person;

    (d)give the person a direction;

    (e)cancel or suspend the person’s licence or registration;

    (f)disqualify the person from applying for a licence, or registration, of a stated kind for a stated period or until a stated thing happens;

    (g)if a regulatory body may put conditions on the person’s licence or registration under an authorising law—direct the regulatory body to—

    (i)put a condition on the person’s licence or registration; or

    (ii)remove or amend a condition put on the person’s licence or registration;

    (h)require the person to pay to the Territory or someone else a stated amount (not more than any amount prescribed by regulation);

    (i)if the person gained financial advantage from the action that is the ground for occupational discipline—require the person to pay to the Territory an amount assessed as the amount of financial advantage gained by the person.

    (3)If the ACAT cancels a person’s licence or registration, the ACAT may disqualify the person from applying for a licence or registration for a stated period or indefinitely.

    (4)This section does not limit the orders the tribunal may make.

    (5)In this section:

    regulatory body means the entity responsible for issuing licences of the kind held by the subject person or for registering people in the occupation or profession in which the subject person is registered.

  1. Section 107 of the Agents Act states:

    107Dealing with trust money

    (1)A licensed agent commits an offence if the agent deals with trust money otherwise than as directed by the person for whom the money is held on trust.

    Maximum penalty:  100 penalty units.

    (2)A licensed agent commits an offence if the agent—

    (a)receives trust money; and

    (b)does not pay the money into a trust account kept by the agent by the next ADI business day after the day the agent receives the money.

    Maximum penalty:  100 penalty units.

    (3)A licensed agent commits an offence if––

    (a)trust money is paid by direct deposit or electronic funds transfer into another account kept by the agent; and

    (b)the agent does not pay the money into a trust account on the next ADI business day after the day the agent becomes aware of the payment.

    Maximum penalty:  100 penalty units.

    (4)A licensed agent commits an offence if the agent pays an amount out of a trust account maintained by the agent otherwise than—

    (a)by electronic transfer; or

    (b)by using a cheque that—

    (i)is expressed to be payable to a person specified in the cheque; and

    (ii)clearly has across the front of the cheque the addition of 2 parallel transverse lines with the words ‘not negotiable’ between, or substantially between, the lines.

    NoteThis cheque is a ‘crossed cheque’ (see Cheques Act 1986 (Cwlth), s 53).

    Maximum penalty:  100 penalty units.

    (5)An offence against this section is a strict liability offence.

    (6)Trust money held by a licensed agent—

    (a)   is not available for payment of the debts of the agent; and

    (b)must not be attached, or taken in execution, under a court order or court process at the request of a creditor of the agent.

    (7)An authorised deposit-taking institution with which a trust account is kept must not enforce any liability that the licensed agent may have towards the authorised deposit-taking institution against any amount held in the account, whether by way of claim, set-off, counterclaim, charge or otherwise.

The Evidence

  1. The applicant filed the following documents with the Application for Disciplinary Action:

    (a)a witness statement of Wendy Harrison, Investigator with Compliance Unit (Fair Trading), dated 3 September 2013 to which was annexed copies of:

    (i)     a letter to the applicant dated 17 May 2013 from Church and Grace, the solicitors for the vendor of a property which had been sold by the respondent. The letter enclosed a Grapevine Property and Business trust account disbursement statement and tax invoice dated 26 February 2013 addressed to the vendor and a National Australia Bank (NAB) dishonour notice for Grapevine Real Estate Pty Ltd cheque for $21,850.00 dated 4 March 2013;

    (ii)   an email from Wendy Harrison to the respondent enclosing a letter to the respondent dated 30 May 2013 advising of the complaint, enclosing a copy of the tax invoice, and requesting that the respondent contact the investigator to make arrangements to discuss the complaint. The letter requested the respondent bring his file relating to the sale of the property, bank reconciliations and copies of GRE’s trust account bank statements from 1 January 2013 to 30 April 2013;

    (iii)     an email from Wendy Harrison to the respondent dated 6 June 2013 attaching the earlier email, noting that she had not heard from the respondent and requesting that he contact her and an email from the respondent to Wendy Harrison dated 6 June 2013 apologising “for not getting back to you” and requesting that a meeting take place on the Tuesday following the long weekend;

    (iv)   an email from Wendy Harrison to the respondent dated 12 June 2013 requesting he attend the applicant’s offices at 10.30am Friday morning [14 June 2013] and an email from the respondent dated 12 June 2013 agreeing to that arrangement;

    (v)    an email from Wendy Harrison to the respondent dated 13 June 2013 reminding him of their meeting the next day and reminding him to bring the documents sought in her email of 12 June 2013;

    (vi)   an email from Church & Grace dated 14 June 2013 enclosing scanned copy of the dishonoured cheque from Grapevine Real Estate Pty Ltd;

    (vii)    CBA RE Trust account statements from 1 January 2013 to 1 May 2013;

    (viii)  a Property Seizure Record dated 18 June 2013 item identifying the seized item as 1 white lever file holding documents relating to the sale of the property;

    (ix)   an ANZ Bank cheque for $22,000 dated 7 December 2012 payable to Grapevine Real Estate Trust Account;

    (x)    a certified copy of a Commonwealth Bank of Australia (CBA) Deposit Receipt for $22,000 on 08.01.2013;

    (xi) a notice under Section 52 Fair Trading (Australian Consumer Law) Act 1992 to the CBA, dated 21 June 2013;

    (xii)    a letter from CBA dated 22 June 2013 to Wendy Harrison enclosing bank statements for both the GRE Trust account and the GRE business account from 1 July 2012 to 21 June 2013 and the CBA credit voucher dated 08.01.2013 for $22,000;

    (xiii) notice under Section 52 Fair Trading (Australian Consumer Law) Act 1992 to the CBA dated 9 August 2013 requesting details of the transfers made from GRE business account to Netbank Home Loan Account; and

    (xiv)   an email from CBA dated 15 August 2013 to Wendy Harrison attaching:  Payment Component details and stating that on 11 January 2013 there was a debit transfer of $10,000 from GRE business account and a credit transfer in Home Loan account in the names of Lennette Anne Blinksell and Ellen Patrice Blinksell of $10,000; and on 14 January 2013 there was a debit transfer of $5,000 from GRE business account and a credit transfer in Home Loan account in the names of Lennette Anne Blinksell and Ellen Patrice Blinksell of $5,000. Also attached to this email was a copy of the respondent’s letter to CBA dated 4 March 2010 requesting to open a real estate trust account, an Application and Authority for Business Accounts signed by the respondent for both GRE Trust and business accounts dated 3 March 2010; a copy of the respondent’s Office of Regulatory Services (“ORS”) Licence and respondent’s business card and a copy of the CBA Online Information System ASIC Company Extract printed 3/3/2010 for GRE.

    (b)a witness statement of the vendor dated 2 August 2013 in which he states that:

    (i)     he had engaged GRE’s services to sell his property as he knew the respondent because “we had worked in the same building for many years”;

    (ii)   on or about 11 February 2013 he received a document headed “Grapevine Real Estate Trust Account Disbursement Statement” which indicated he would receive $21,850 being the balance of deposit monies owed to him;

    (iii)     he did not receive this amount;

    (iv)   on 26 February 2013, he received a Tax Invoice from GRE which enclosed a cheque for $21,850 drawn on GRE’s account and which requested he not bank the cheque until 1 March;

    (v)    he deposited the cheque in his NAB account on 1 March 2103;

    (vi)   on 4 March 2013, he received a dishonour notice from NAB for this cheque;

    (vii)    on 1 March 2013, he spoke to the respondent by telephone and the respondent told him “the bank had made a mistake and [he] was sorting it out with them and everything would be OK.” ; and

    (viii)  as at 2 August 2013 [the date of his statement], he had not received the deposit monies of $21,850 and they remain outstanding; and

    (c)certificates pursuant to section 173 of the Agents Act dated 29 August 2013 and 25 September 2013.

  1. The applicant filed a further witness statement of Wendy Harrison dated 24 October 2013 to which was attached copies of the following documents:

    (a)a letter dated 11 September 2013 from the respondent’s solicitor to the applicant enclosing a letter from the respondent on GRE letterhead to the applicant also dated 11 September 2013 surrendering Grapevine Real Estate Pty Ltd’s real estate agent’s licence and its business agent’s licence and a copy of both licences issued by the ORS;

    (b)an Allhomes list of sales listings for GRE as at 18 October 2013; and

    (c)two Certificates dated 21 October 2013 issued pursuant to section 173 of the Agents Act, the first certificate certifying that Mark Gerard Blinksell was the holder of a licensed business agent’s licence from 1 August 2012 until 30 June 2014 and the second certificate certifying that Grapevine Real Estate Pty Ltd was the holder of a licensed business agent’s licence from 2 August 2012 until 16 September 2013

  2. By letter dated 13 December 2013, the applicant filed email correspondence between the applicant and the CBA obtained pursuant to a section 52 Notice dated 29 November 2013 and another witness statement of Wendy Harrison dated 1 November 2013 to which was attached copies of:

    (a)a title search dated 19 June 2013 for an address in the ACT (the respondent’s address) showing that the sole proprietor was Lennette Anne Blinksell and that the property was subject to a registered mortgage to CBA;

    (b)a copy of the CBA mortgage identifying Lennette Anne Blinksell  as mortgagor and a copy of the transfer to Lennette Anne Blinksell;

    (c)an extract of ASIC and Business Names Search dated 31 July 2013 for GRE stating that the current director was the respondent and that GRE’s registered office and principal place of business was the respondent’s address;

    (d)a letter from the ORS dated 1 August 2013 to the Compliance Department of the CBA attaching a Direction to Freeze GRE accounts;

    (e)an email from the respondent’s solicitor dated 14 August 2013, attaching a copy of a letter dated 14 August 2013 from him to the solicitors acting on behalf of the vendor, Church & Grace, referring to the letter from Church & Grace dated 30 April 2103 and offering to repay the outstanding deposit monies plus interest and costs and to provide “a written apology for the inconvenience caused by his actions”;

    (f)an email from the respondent’s solicitor to the applicant dated 20 August 2013 attaching a copy of a letter dated 16 August 2013 from  Church & Grace, offering that their clients will withdraw their complaint against the respondent and GRE upon payment of the nominated amount and receipt of a written apology;

    (g)an email from Wendy Harrison to the respondent’s solicitor dated 25 September 2013 stating the applicant’s understanding that, in addition to surrendering the company real estate licence, the respondent was proposing to surrender his personal licence and seeking clarification;

    (h)an email dated 26 September 2013 from the respondent’s solicitor attaching a letter to him from the vendor’s solicitors dated 23 September 2013, together with a trust account receipt for the agreed funds transfer of $25,576.02, a copy of the Deed of Release signed by the vendor and a copy of correspondence to the NSW Office of Fair Trading surrendering the respondent’s NSW real estate licences, and stating, in relation to the surrender of his personal licence, –

    “...Notwithstanding it was our client’s understanding that his personal licence could be held in view of the fact that it is needed for him to obtain employment in the real estate profession in the future. With the greatest respect we do think it appropriate that our client should be expected to act as a real estate agent in the employ of a third party.

    However at this point in time, our client is now gainfully employed by [a government department], as a property auditor of that department and in that capacity Mr Blinksell will not be carrying out any real estate activities as under his license.”;

    (i)an email dated 3 October 2013 from Wendy Harrison to the CBA Compliance Section, attaching a letter signed by the acting Commissioner for Fair Trading on 3 October 2013 releasing the freeze on GRE’s bank accounts; and

    (j)a copy of both GRE Trust account bank statement and Business transaction bank account statement, received on 14 October 2013, noting the closure of each account.

Admitted Facts

  1. On 2 December 2013, the respondent filed a Statement of Admitted Facts which stated:

    1.At all relevant times the respondent was the holder of a business agents licence.

    2.At all relevant times the respondent was the holder of a real estate agents licence.

    3.At all relevant times Grapevine Real Estate Pty Ltd (GRE) was the holder of a business agents licence.

    4.At all relevant times GRE was the holder of a real estate agents licence.

    5.That the respondent was a director of GRE which carried on the business of a real estate agency.

    6.That at all relevant times GRE maintained a business account and a trust account with the Commonwealth Bank, Tuggeranong.

    7.On 7 January 2013 GRE was the selling agent for a property (the property) situated at the vendor’s address in the Australian Capital Territory.

    8.On 7 January 2013 the respondent received a cheque in the sum of $22,000.00 (the cheque) being a deposit in respect of the sale of the property.

    9.On 8 January 2013 the respondent deposited the cheque at a branch of the Commonwealth Bank, and the cheque was paid into the business account of GRE.

    10.That transfers of $10,000.00 and $5,000.00 were made from the said business account to the respondent’s Home Loan account with the Commonwealth Bank, which was in arrears at the time, on 11 January and 14 January, respectively.

  2. The respondent, who attended the hearing, did not give evidence or call evidence from any witnesses.

The Applicant’s contentions

  1. The applicant asserted[1] that the actions of the respondent amounted to criminal conduct the scope of which the respondent sought to hide by dishonest and possibly criminal acts.

    [1] Applicant’s submissions, 3 February 2014, p.4

  2. The applicant contended[2]that the respondent’s conduct was a serious example of a breach of the statutory requirements in respect of trust account monies and shows a significant departure from the standards prescribed in Schedule 8 (Rules of Conduct) of the Agents Regulation 2003.

Consideration

[2] Applicant’s submissions, 3 February 2014, p.4

  1. The application to the Tribunal for an occupational discipline order is brought under section 66 of the ACAT Act. Such an order can be made if the Tribunal is satisfied under sub-section 65(2) of that Act that a ground for occupational discipline exists against the person.

  2. The Tribunal considered all of the evidence, referred to above, provided by the applicant. The respondent did not file any material or call or give evidence at the hearing. The Tribunal has considered the applicant’s evidence and the respondent’s failure to give evidence when determining the weight to be applied to the evidence.

The Evidence

The Chronology

  1. The applicant’s written submissions set out the following helpful and unchallenged chronology of events.

    (a)On or around 7 January 2013, the respondent was engaged by the vendor as the selling agent of the vendor’s property.

    (b)At that time the respondent was the director of GRE.

    (c)Contracts were exchanged on the property in early January 2013 and the respondent was given a cheque to the value of $22,000 made payable to GRE Trust Account for part of the deposit.

    (d)The respondent deposited the cheque at a branch of the CBA on 8 January 2013. The cheque was paid into GRE’s business account (“the business account”).

    (e)On or about 11 February 2013, the vendor received from GRE a document styled as “Trust Account Disbursement Statement” which indicated that in light of the deposits held ($22,000 plus $7,000) minus agent’s commission the amount payable to the vendor was $21,850.

    (f)On 26 February 2013, the vendor received a “tax invoice” from GRE enclosing a cheque for $21,850. On the tax invoice was written-

    L, as the refund of the redirected payment will be issued tomorrow, Wednesday 27th February 2013, and the banking systems clearance time frame is 3 working days, I would appreciate you depositing the cheque attached this coming Friday 1st March 2013.

    (g)The vendor complied with this request. The cheque was deposited on 1 March 2013.

    (h)On 4 March 2013, the vendor received a dishonour notice from his bank, the NAB.

    (i)On 15 March 2013, the vendor had a conversation with the respondent, during which he said -

    Mark told me that the Bank had made a mistake and he was sorting it out with them and that everything would be OK.

(j)On 16 April 2013, the legal firm acting on behalf of the vendor, Church & Grace, contacted the respondent and was told that “the deposit had been incorrectly deposited into the wrong account”.

(k)On the same day, Church & Grace demanded in writing that the respondent provide copies of any correspondence concerning his attempts to recover the deposit.

(l)On 30 April 2013, a demand was made by Church & Grace that the deposit monies be paid to the vendor by 5pm on 7 May 2013. That money was not paid, nor was there any advice from the respondent as to the attempts made to “recover” the deposit.

(m)On 17 May 2013 Church & Grace wrote to the ORS outlining, in general terms, the events detailed above. A claim was made against the Consumer Compensation Fund for the monies owed.

(n)ORS received the letter dated 17 May 2013 on 22 May 2013.

(o)On 30 May 2013, Ms Harrison, an investigating officer with ORS sent a letter to the respondent by email requesting him to contact her “as soon as possible to make arrangements to come to our office to discuss the complaint.” No response was received.

(p)On 6 June 2013, Ms Harrison sent another email to the respondent urging a response to the email of 30 May 2013.

(q)The respondent replied by email dated 6 June 2013.

(r)The following week, arrangements were made for the respondent to attend the ORS offices on 14 June 2013 to discuss the matter.

(s)On 14 June 2013, Ms Harrison received a text from the respondent indicating he “was delayed in Brisbane due to technical difficulties with his flight” and requested an appointment for another day.

(t)Arrangements were made for the respondent to attend ORS on 18 June 2013. The respondent attended on that day. In response to a question about the cheque, he produced a number of documents including a copy of the deposit receipt dated 8 January 2013 showing that the cheque had been deposited into an account ending in the numbers ‘3909.’

(u)Ms Harrison deposed[3] that the respondent said he “had deposited the cheque representing the balance of deposit monies into his general account by mistake and had meant to transfer it to his trust account” and he had offered to repay the money by two payments of $10,000 but had not received a response to this offer.

(v)On 14 August 2013, Ms Harrison received an email from the respondent’s solicitor, Mr Rod Barnett, which attached a letter from his firm to Church & Grace offering to repay the money owed plus costs and interest. There was no reference in this letter to any earlier offer or offers to repay.

(w)On 26 September 2013, Ms Harrison received correspondence from the respondent’s solicitor which indicated that the monies had been repaid on 13 September 2013.

[3] Ms Harrison, witness statement, 3 September 2013, at [16] and [17]

  1. It is clear from the applicant’s material that the respondent, while engaged as the vendor’s agent for the sale of the property, received a bank cheque payable to GRE Trust Account for $22,000 being part of the deposit monies on or around


    7 January 2013. He banked that cheque on 8 January 2013. It is equally clear that the cheque was banked into the respondent’s business account.

  2. The applicant asserted that the respondent himself banked the trust cheque into the GRE business account. The respondent claimed to the vendors and to the applicant that the deposit into the wrong bank account was a mistake and alleged that it was the bank’s mistake.

  3. As the respondent chose not to file any witness statements or to give evidence the Tribunal has considered the consequences, if any, of that choice.

The respondent’s failure to give evidence or to call evidence

  1. The respondent’s solicitor notified the Tribunal in December 2013 that the respondent would not be giving evidence (see paragraph 12 above) in answer to the evidence adduced by the applicant.

  2. The Tribunal noted that there are current criminal proceedings against the respondent which may explain his decision not to give evidence however, his decision has consequences for him in the tribunal proceedings.

  3. At the hearing Mr Livingston informed the Tribunal in response to a question from the Tribunal that the respondent was caught by the consequences of that decision.

  4. The applicant invited the Tribunal to draw a Jones v Dunkel[4] inference against the respondent.

    [4] [1959] HCA 8; (1959) 101 CLR 298

  5. The Tribunal considered an earlier tribunal decision of Council of the Law Society of the Australian Capital Territory v the Legal Practitioner (Occupational Discipline)[5] (Legal Practitioner 2010) in which the Practitioner, despite having filed affidavits sworn by him, chose not to give evidence or to submit himself to cross examination; no evidence was led to explain his failure to give evidence. That tribunal considered the following principles in Jones v Dunkel as set out by Menzies J [6]-

    In my opinion a proper direction in the circumstances should have made three things clear:       (i) that the absence of the defendant Hegedus as a witness cannot be used to make up any deficiency of evidence; (ii) that evidence which might have been contradicted by the defendant can be accepted the more readily if the defendant fails to give evidence; (iii) that where an inference is open from facts proved by direct evidence and the question is whether it should be drawn, the circumstance that the defendant disputing it might have proved the contrary had he chosen to give evidence is properly to be taken into account as a circumstance in favour of drawing the inference.

    [5] [2010] ACAT 2

    [6] See [2010] ACAT 2 at [6]; (1959) 101 CLR 298 at p.312

  6. The Tribunal noted that Mr Archer represented the Practitioner in the case referred to in the preceding paragraph and Mr Beaumont of Counsel represented the Council of the Law Society. Mr Archer invited the Tribunal, in the current proceedings, to consider Mr Beaumont’s submissions in relation to Jones v Dunkel which that tribunal accepted and which are set out in that decision.

  7. The Tribunal has considered those submissions. The Tribunal has also considered the recent ACT Supreme Court decision of The Legal Practitioner v The Council of The Law Society of the Australian Capital Territory[7] (Legal Practitioner 2014) in which Refshauge J considered Jones v Dunkel and determined that the tribunal was entitled to draw a Jones v Dunkel inference from a practitioner not giving evidence in proceedings against him. Refshauge J said:

    394. As the Legal Practitioner gave no evidence, there was nothing to contradict that evidence and, subject to what is said below about Jones v Dunkel, the ACAT was entitled to draw the inference more confidently that the Legal Practitioner was attempting to diminish the prejudice to the legal services he was providing by undue influence from the personal relationship between him and Ms N.

    417. There is to my mind, no doubt that, in the circumstances, the evidence adduced by the Council was, prima facie, evidence in the sense used by Richards AJ in Lampard v West [1926] SASR 293 at 310 and, on appeal, at 311, namely evidence which is sufficient to found a finding in favour of the proponent of that evidence unless credible contrary evidence is given. That, of course, does not shift the burden of proof, but does require the opponent to show either that the evidence does not reach this level by submission or cross-examination, or to produce contrary evidence that undermines the prima facie evidence. Merely to submit that there were other records does not do this when that does not explain why the inevitable inferences drawn from the tendered evidence should not be drawn.

    [7] [2014] ACTSC 9

  8. In both Legal Practitioner 2010 and Legal Practitioner 2014, the rules of evidence applied to the proceedings[8], whereas the current application is not restrained by the rules of evidence.

    [8] Legal Profession Act 2006 s. 420 The ACAT is bound by the rules of evidence in hearing an application under this part.

  9. In Legal Practitioners Complaints Committee and Trowell[9], the State Administrative Tribunal considered the application of the rule in Jones v Dunkel to disciplinary prosecutions in tribunals which are not bound by the rules of evidence. Deputy President, Judge Eckert, sitting in a tribunal of three, applied the evidentiary presumptions, but in a relaxed fashion allowing argument as to whether there was an explanation for the non-testimony of the kind which would render inoperable the presumption. She stated:

    69 We have taken into consideration and applied such of these principles as are relevant to the present circumstances, but with this qualification. It is to be borne in mind that this is not an ordinary civil action but rather it constitutes professional disciplinary proceedings brought by the governing body against a legal practitioner before a tribunal subject to its own statutory procedures. These include that it is not bound by the rules of evidence or the practices of courts but is to act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms (s 32 SAT Act[10]). We have so proceeded and in this respect were prepared to accept explanations from both parties as to why Ms Corby’s evidence might or might not have been available, without direct evidence in support.

    [9]  [2009] WASAT 42

    [10]   i.e. State Administrative Tribunal Act 2004 (WA),

  10. In the current proceedings, the only explanation from the respondent which could answer the question of why he was not giving evidence came from his Counsel at the commencement of the hearing; namely, that the respondent was involved in other proceedings.

  11. The Tribunal has considered the submissions in Legal Practitioner 2010, Refshauge J’s statements in Legal Practitioner 2014, the submissions currently before the Tribunal and all of the evidence provided by the applicant. It was compelling. The Tribunal will return to the evidence below. The Tribunal is satisfied that, in accordance with the rule in Jones v Dunkel, it can more readily draw a favourable inference from evidence adduced by the applicant that could otherwise have been contradicted by the respondent. The respondent appeared to the Tribunal to be in a position to cast light on whether the inferences should be drawn[11]. The Tribunal inferred that the uncalled evidence would not have assisted his case.

    [11] Jones v Dunkel (1959) 101 CLR 298 (per Kitto J at p.308), per Menzies J at p.312, and per Windeyer J at pp.320-321)

  12. The Tribunal concurs with Mr Archer’s submissions that the unanswered evidence indicative of dishonest conduct can be more readily accepted; that the assertion made to Ms Harrison and Mr Jones that an error had been made in depositing the money into the business account is against the weight of the evidence and, untested by cross examination or other evidence; and that the assertion must be given little weight no matter how many times it is repeated in submissions.

  1. Returning to the evidence, the Tribunal is not satisfied that the bank made any mistake. There was simply no evidence to support such a finding. The Tribunal is satisfied that the respondent deposited the cheque into the business account. While he did not give evidence, the Tribunal noted that the Deed of Release dated 19 September 2013 between the respondent and the vendor unambiguously states in Recital D –

    D. In breach of the condition referred to in ‘C’[12] above the Debtors [Grapevine Real Estate Pty Ltd and Mark Blinksell] in administering the Debt, deposited the monies into a Business Account [words in square brackets added].

    [12]  Recital C in the Deed of Release:  It was a condition of the Agreement that the deposit monies would be

    paid into the Trust account of Grapevine Real Estate Pty Ltd.

  2. The Tribunal is satisfied, from perusing the CBA statements and documents provided by the applicant for GRE’s trust and business bank accounts and for the transactions the subject of this complaint, that the cheque for $22,000 was deposited into the GRE’s business account on 8 January 2013; the balance in that account immediately prior to that cheque being deposited was $499.07DR and that the respondent was the only authorised person to operate this account and the GRE Trust account[13].  

    [13]  CBA Application for Authority for Business Accounts – for Grapevine Real Estate Pty Ltd (-----909) and for Grapevine Real Estate Pty Ltd Trust Account (-----917) dated 3 March 2010 Exhibit WMH 15 to witness statement of Wendy Harrison dated 3 September 2013

  3. The Tribunal is also satisfied that the amounts of $10,000 and $5,000 were transferred from the business account to “CBA A/c Netbank Home Loan" on


    11 January 2013 (leaving a balance of $12,090.86 in the business account) and on 14 January 2013 (leaving a balance of $4,530.44 in the business account) and the same amounts were deposited on the same dates into the CBA ‘No Frills” Loan account for the home loan in the name of Lennette Anne Blinksell and Ellen Patrice Blinksell with the security address being the respondent’s address.

  4. The Tribunal is satisfied that the respondent drew a post-dated “replacement cheque” for the balance of the deposit less commission which he posted to the vendor with instructions that it not be banked until 1 March 2013 and that the replacement cheque bounced.

  5. While the Tribunal is also satisfied from the evidence that the respondent repaid the money to the vendor together with solicitors’ fees and interest, the Tribunal notes that the vendor’s solicitors did not receive the money until 13 September 2013, almost seven months after the settlement of the sale of the property on 7 February 2013. This was well after the vendor had sought legal advice and Church & Grace had been in communication with the respondent. Church & Grace notified the applicant of the vendor’s predicament in June 2013 and the applicant commenced an investigation into the matter which led to the repayment in September 2013. Through no fault of his own, the vendor was denied access to his lawful share of the deposit monies between February 2013, and September 2013.

  6. The Tribunal is comfortably satisfied, from all of the matters before it, that the vendor was denied access to the deposit monies because of the respondent’s dishonest conduct. The Tribunal expects that if the respondent genuinely contested such a conclusion he would have provided relevant evidence.

  7. The Tribunal makes the following findings of fact:

    (a)The vendor engaged the respondent as a selling agent for their property in October 2012.

    (b)The respondent received a bank cheque in the sum of $ 22,000.00 payable to GRE Trust Account being deposit monies for the sale of the vendor’s property on or around 7 January 2013.

    (c)The respondent banked the cheque into his business bank account on 8 January 2013.

    (d)The respondent was the only person authorised to operate the GRE business and trust accounts.

    (e)On 10 January 2013, the respondent transferred $10,000 from GRE’s business account to a Home Loan account in the name of Lennette Anne Blinksell and Ellen Patrice Blinksell.

    (f)On 14 January 2013, the respondent transferred a further $5,000 from GRE’s business account to a Home Loan account in the name of Lennette Anne Blinksell and Ellen Patrice Blinksell.

    (g)Settlement of the sale of the property occurred on 7 February 2013.

    (h)On 11 February 2013, the vendor received from GRE a document styled as “Trust Account Disbursement Statement” which indicated that, in light of the deposits held ($22,000 plus $7,000) minus agent’s commission, the amount payable to the vendor was $21,850.

    (i)On 26 February 2013, the vendor received a “tax invoice” from the respondent asking him to deposit the enclosed post-dated cheque for $21,850 on 1 March 2013.

    (j)The vendor complied with the respondent’s request and deposited the cheque on 1 March 2013.

    (k)The vendor received a dishonour notice from his bank, the NAB, on 4 March 2013.

    (l)The vendor had a telephone conversation with the respondent on 15 March 2013, during which the respondent said that the bank had made a mistake which he was sorting out and everything would be OK.

    (m)On 16 April 2013, the legal firm acting on behalf of the vendor, Church & Grace, contacted the respondent and were told that “the deposit had been incorrectly deposited into the wrong account”.

    (n)On the same day, Church & Grace demanded in writing that the respondent provide copies of any correspondence concerning his attempts to recover the deposit.

    (o)On 30 April 2013, a demand was made by Church & Grace that the deposit monies be paid to the vendor by 5pm on 7 May 2013. The money was not paid, nor was there any advice from the respondent as to the attempts made to “recover” the deposit.

    (p)On 17 May 2013, Church & Grace wrote to the ORS outlining in general terms, the events detailed above and a claim was made against the Consumer Compensation Fund for the monies owed.

    (q)ORS received the letter dated 17 May 2013 on 22 May 2013.

    (r)On 30 May 2013, Ms Harrison, an investigating officer with ORS sent a letter to the respondent by email requesting him to contact her “as soon as possible to make arrangements to come to our office to discuss the complaint.” No response was received.

    (s)On 6 June 2013, Ms Harrison sent another email to the respondent urging a response to the email of 30 May 2013.

    (t)The respondent replied by email dated 6 June 2013.

    (u)The following week, arrangements were made for the respondent to attend the ORS offices on 14 June 2013 to discuss the matter.

    (v)On 14 June 2013, Ms Harrison received a text from the respondent indicating he “was delayed in Brisbane due to technical difficulties with his flight” and requested an appointment for another day.

    (w)Arrangements were made for the respondent to attend ORS on 18 June 2013. The respondent attended on that day. The respondent produced a number of documents including a copy of the deposit receipt dated 8 January 2013 showing that the cheque had been deposited into an account ending in the numbers ‘3909.’

    (x)Ms Harrison deposed that the respondent said he “had deposited the cheque representing the balance of deposit monies into his general business account by mistake and had meant to transfer it to his trust account” and he had offered to repay the money by two payments of $10,000 but had not received a response to this offer.

    (y)On 14 August 2013, Ms Harrison received an email from the respondent’s solicitor, Mr Rod Barnett, which attached a letter from his firm to Church & Grace, offering to repay the money owed plus costs and interest. There was no reference in this letter to any earlier offer or offers to repay.

    (z)On 26 September 2013, Mr Harrison received correspondence from the respondent’s solicitor which stated that the monies had been repaid on
    13 September 2013.

  8. The Tribunal is satisfied that these facts establish that the respondent has contravened the Agents Act and that a ground for occupational discipline exists against the respondent.

Penalty

  1. In determining what occupational discipline to use, in accordance with
    section 65(3)(a) to (f) of the ACAT Act, the Tribunal is satisfied, having considered all of the evidence before it that:

    (a)the respondent did not take reasonable steps to avoid the contravention  or conduct that is the ground for occupational discipline;

    (b)occupational discipline has not previously been used against the respondent for a similar act;

    (c)the respondent took steps, approximately seven months after the contravention, to mitigate its effect on the vendor by repaying the misapplied monies plus interest and the vendor’s legal fees;

    (d)the respondent’s contravention may have an adverse impact on the real estate industry by undermining the confidence of the community in the reliability of agents and the scheme for securing the large sums of money they handle;

    (e)in the absence of any evidence from the respondent, the Tribunal cannot rule out the likelihood that the respondent will act in a way that is a ground for occupational discipline in the future; and

    (f)the applicant has applied for particular occupational discipline to cancel the respondent’s real estate agent’s and business agent’s licences and to disqualify the respondent from applying for both a real estate agent’s licence and a business agent’s licence for a period of five years and to disqualify the respondent from applying for a real estate or business salespersons registration for a period of three years.

  2. The Tribunal notes that compliance with the trust account obligations imposed by statute on real estate agents is fundamental to ensuring community confidence in the real estate industry.

  3. Mr Archer submitted that the applicant was unable to draw the Tribunal’s attention to decisions in this jurisdiction dealing with the misapplication of trust account money in the context of real estate agents. However, he did draw attention to a case dealing with a solicitor taking trust account monies, Council of the Law Society of the ACT v Legal Practitioner E (Occupational Discipline)[14] where that tribunal made these findings:

    The tribunal finds that the conduct of taking amounts of money from the trust account of clients and paying it to himself, which amounts to theft from clients; the practitioner’s clear lack of understanding of his obligations in relation to trust accounting; his lack of credit and his cavalier attitude towards the conduct of the proceedings, results in the practitioner not being a fit and proper person to engage in legal practice and ought to be taken into account in relation to any future application to the legal profession for the granting of a practising certificate.

    [14] [2013] ACAT 7 at [119]

  4. In relation to conduct in the real estate industry Mr Archer referred the Tribunal to The Chief Executive , DTFTWID v Cornwell, J[15] (“Cornwell”); The Chief Executive, Department of Employment, Economic Development and Innovation v Welburn[16] (“Welburn”); Director of Consumer Affairs Victoria v Marshall (Review and Regulation)[17] (“Marshall”); Davidson v Commissioner for Fair Trading[18](“Davidson”);  Watson v Director General Department of Finance and Services[19](“Watson”); Tassios v Commissioner for Fair Trading[20](“Tassios”) and Foong v Director General Department of Finance and Services[21](“Foong”).

    [15] [2005] QCCTPAMD 49

    [16] [2010] QCAT 202

    [17] [2013] VCAT 1316

    [18] [2008] NSWADT 269

    [19] [2012] NSWADT 64

    [20] [2005] NSWADT 179

    [21] [2012] NSWADT 261

  5. In Cornwell multiple “thefts” were established and the tribunal relevantly found (as to fact and principle)-

    10. I regard Mr Cornwell’s offences as most serious. The provisions in the legislation relating to trust accounts are designed to protect the public and to facilitate proper monitoring by the authorities. Failure to comply with those provisions affects both the standing of the industry and the confidence the public has in licensees engaged in that industry. Conduct such as Mr Cornwell’s goes right to the core of the honesty and integrity that is required in the industry. The seriousness of the breaches is reflected by the fact that PAMD Act provides, in the event of successful prosecution, a maximum penalty of 200 penalty units or three years imprisonment.

  1. That tribunal disqualified Mr Cornwell from being a real estate agent for a period of 10 years but made no order as to registration as a salesperson.

  2. In Welburn, where bond monies were not disbursed in accordance with the statutory requirement leaving a shortfall of approximately $18,000, the tribunal said:

    DETERMINATION SOUGHT

    19. The Chief Executive Officer seeks that Tricia-Anne Welburn be permanently disqualified and that it be a fine imposed to reflect the seriousness of her actions. The Chief Executive Officer also seeks that costs of and incidental to the application in the sum of $745 be paid by Ms Welburn. The Chief Executive submits that the imposition order sought would recognise consumers need to be protected in their dealings with licensees and would also protect the standards of the industry in insuring only suitable persons are licensed. The penalty imposed would also operate to deter other licensed persons who may be minded not to comply with the legislation.

    CONCLUSION

    20.The Tribunal is satisfied that the contraventions are so serious and flagrant that Ms Welburn should be permanently disqualified from holding a license or registration certificate under the Act or from being an Executive Officer of a corporation that holds a licence.

  1. In Marshall, where the Tribunal was dealing with failure to comply with reporting and record keeping requirements, the tribunal’s findings and conclusion were-

    46.The Tribunal finds that the Respondent-

    a.     failed or refused to respond to enquiries, requests and directions made on behalf of the Applicant for approximately 3 years;

    b.     failed to retain financial records as required;

    c.     failed to provide any satisfactory explanation as to why he failed to maintain proper accounting records or obtain and file audit reports;

    d.     failed to engage or seek assistance in complying with his statutory obligations; and

    e.     as at the date of the inquiry, has continued to fail to lodge any audit reports or accounting records or otherwise respond to any enquiries made by the Applicant in relation to the relevant accounting periods

    47.The Tribunal is otherwise satisfied that the Respondent has accepted full responsibility for his conduct.

    48.  The Tribunal takes into account that the Respondent comes before the Tribunal with prior good character and there have been no prior adverse findings in relation to the Respondent, brought to the attention of the Tribunal.

    CONCLUSION

    49.   This Tribunal has consistently reinforced the fundamental importance of strict compliance with the Act and Regulations, particularly where a licence authorises the receipt of trust monies. Breaches of a kind committed in this area, as acknowledged by the Respondent, prevent a proper monitoring of statutory compliance and identification of possible trust account deficiencies or defalcations.

  2. The tribunal ordered that Mr Marshall’s real estate licence be suspended for 12 months and thereafter be subject to a permanent condition that he not be entitled to deal with trust monies.

  3. In Davidson, the principals of a company whose employee had stolen a large amount of trust money (almost $440,000) were disqualified for 18 months for failing to properly supervise that employee in the performance of trust account duties.

  4. In Watson, a real estate agent involved in running a larger company was disqualified at first instance for a period of 8 years in circumstances where, amongst other issues, trust monies had been misappropriated. Notwithstanding that the tribunal found that the agent had been manipulated by another person in acting as she did, the tribunal affirmed the decision and put the matters of principle this way:

    This behaviour is particularly apparent concerning the evident misappropriation and misuse of trust account funds in respect of strata plan 5565 and the other matters referred to in this Schedule.

    The licence issued to the Corporation was issued for the purpose of conducting business in the real estate industry. It is a fundamental concern of the legislation to ensure that those who work in the industry do so honestly, competently and fairly. Members of the community are entitled to expect that licensees and certificate holders will not mislead them and will not mishandle money that is entrust to the licensees and certificate holders.

    In my opinion, the conduct of the Corporation's business fell well short of community expectations and represents a fundamental failure to properly carry out the functions of a licence holder. I am reasonably satisfied that the conduct of the Corporation's business, through its directors, officers, employees and licensees in charge, was also improper and there are numerous examples of where there has been a blatant disregard for the legal requirements when dealing with trust funds.

    The community entrusts real estate agents with substantial sums of money when making one of the most expensive and significant decisions of their life. It is imperative that real estate agents can be trusted to protect the interests of the community. It is incumbent of each agent to uphold the standard expected of them and not to bring the industry into disrepute.

  5. In Tassios, a case which did not involve a finding of theft of trust monies, the tribunal accepted the following submissions made by the Commissioner for Fair Trading -

    15.The Commissioner has asserted various matters that Mr Tassios has not contested. The evidence tendered by the Commissioner supports the Commissioner’s contentions. In particular, the Investigator's Report of
    29 March 2004 outlines the breaches and complaints on which the Commissioner relies.

    16.The company traded for a time as Elders Real Estate Blacktown. The Commissioner has asserted that since 1 July 2001 the company failed to bank trust monies into an account maintained for that purpose. The trust account maintained by the company, and for which Mr Tassios had responsibility as licensee, had a debit balance from November 2001 to the end of January 2002. False entries were made in the tenants' ledger maintained by the company in respect of properties it managed. The evidence supports this contention.

    17.The Commissioner also asserted that the company failed to pay for repair work arranged by the company in respect of properties it managed. The company failed to properly discharge its obligations as a property manager in relation to ensuring that rent was collected and accounted to landlords, that properties were inspected and that trust accounts and tenant ledgers were kept were properly maintained.

    18.The Commissioner submits that Mr Tassios and the company committed the breaches of the 1941 Act and 2002 Act as outlined above and that these are serious breaches. He contends that the breaches relating to the failure to pay money into the company's trust account are of concern because they adversely affect consumer confidence in their dealings with intermediaries such as real estate agencies. It is important to an orderly property market that consumers have confidence in agents to demonstrate and integrity in the manner in which they handle trust creditor funds.

    19.He further contends that appropriate handling and accounting in respect of trust creditors' funds is one of the most important obligations placed on a licensee. A licensee who fails to demonstrate integrity in respect of their dealings in trust money should not be permitted to continue carrying on business. Mr Tassios failed to meet his obligations to landlords in relation to his and the company’s management of rental properties and landlords suffered as a result.

  1. That tribunal permanently disqualified the applicant from being an agent and found he could act as a salesperson.

  2. In Foong, the facts before the tribunal were that $80,000 had been diverted from the appellant’s trust account to an account controlled by her son. At first instance, the delegate declared her to be a disqualified person for five years. On review, the tribunal increased that period to seven years. The tribunal found the applicant’s failure to accept or acknowledge her wrongdoing or to exhibit any insight into the seriousness of her behaviour was a significant factor in determining that she was not a fit and proper person to be licensed as a real estate agent.

  3. Mr Archer submitted[22] that these decisions clearly indicate that compliance with trust account obligations imposed by statute are central to ensuring community confidence and trust in the real estate industry. Real estate agents who do not comply with those obligations undermine that trust and bring the industry into disrepute. The penalty called for by the Commissioner in this case is, on the evidence of outcomes elsewhere, within the range that is appropriate to deal with the significant wrongdoing that is apparent in this case. Not only was the money effectively stolen, but also the respondent took steps to obscure the reality of what he had done by lies and misrepresentation.

    [22] Applicant’s submissions, 3 February 2014, p.11

  4. When the Tribunal put to Mr Livingston that there was no evidence of the respondent’s remorse or insight of the effect of his behaviour on the vendor or on the reputation of the real estate industry, Mr Livingston informed the Tribunal that the respondent was profoundly personally sorry and deeply embarrassed and, notwithstanding the effect of his behaviour on the vendor, they still maintained a relationship with the respondent. 

  5. This Tribunal adopts Mr Archer’s submissions. The Tribunal is satisfied and finds that the respondent’s conduct amounts to a fundamental failure to properly carry out the functions of a licence holder. The Tribunal repeats the statement of principle made by the tribunal in Watson-

    The community entrusts real estate agents with substantial sums of money when making one of the most expensive and significant decisions of their life. It is imperative that real estate agents can be trusted to protect the interests of the community. It is incumbent of each agent to uphold the standard expected of them and not to bring the industry into disrepute.

  6. The Tribunal noted, with concern, that in addition to his failure to properly carry out his functions as a licence holder, the respondent engaged in abhorrent behaviour in obscuring what he had done, in lying and in misleading the vendor and the applicant. The only redeeming feature, as far as the Tribunal can determine, was that the respondent, having sought legal advice, accepted his solicitor’s advice to repay the ‘stolen’ monies with interest on that amount and the vendor’s legal fees incurred in pursuing the respondent, all of which he paid in September 2013.

  7. The Tribunal was satisfied, for the reasons set out above, that there are grounds for occupational discipline against the respondent and that the orders sought by the applicant were appropriate in all of the circumstances. Where there is trust account misappropriation and obfuscation, it is absolutely and unequivocally not acceptable or reasonable for the respondent’s solicitor to submit to the investigator that “it is appropriate that our client should be expected to act as a real estate agent in the employ of a third party.”

  8. The Tribunal decided that the respondent’s real estate agent’s licence and his business agent’s licence should be cancelled and that he should be disqualified for a period of five years from 15 November 2013 from applying for a real estate licence or a business agent’s licence and further, that he should be disqualified for a period of three years from 15 November 2013 from applying for a real estate or business salesperson’s registration.  

  9. The Tribunal noted that should the respondent become eligible for and apply for any licence or registration under the Agents Act, he will be required to undertake training to the satisfaction of the applicant in relation to trust accounts, including CPPDSM4006A - Establish and Manage Agency Trust Accounts, pursuant to section 66(2)(c) of the ACAT Act.

  10. The Tribunal also noted that the respondent, through his solicitor, undertook to the Tribunal to de-register Grapevine Real Estate Pty Ltd on the completion of all proceedings.

………………………………..

Ms E. Symons - Presidential Member

PUBLICATION DETAILS

FILE NUMBER:

OR 13/37

PARTIES, APPLICANT:

COMMISSIONER FOR FAIR          TRADING

PARTIES, RESPONDENT:

MARK BLINKSELL

COUNSEL APPEARING, APPLICANT

MR KEN ARCHER

COUNSEL APPEARING, RESPONDENT

MR RAY LIVINGSTON

SOLICITORS FOR APPLICANT

ACT GOVERNMENT SOLICITOR

SOLICITORS FOR RESPONDENT

ROD J BARNETT & ASSOCIATES

TRIBUNAL MEMBERS:

MS E. SYMONS

DATES OF HEARING:

3 FEBRUARY 2013

PLACE OF HEARING:

CANBERRA

Most Recent Citation
Cases Cited

12

Statutory Material Cited

0

Jones v Dunkel [1959] HCA 8
Luxton v Vines [1952] HCA 19
Council of the Law Society v The Legal Practitioner [2010] ACAT 2