Commissioner for Fair Trading v Flint

[2019] ACAT 80

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

COMMISSIONER FOR FAIR TRADING v FLINT (Occupational Regulation) [2019] ACAT 80

OR 13/19

Catchwords:                OCCUPATIONAL REGULATION – real estate agent – consent orders – failure of agent to provide audit of trust account in required time – public reprimand

Legislation cited:        ACT Civil and Administrative Tribunal Act 2008 ss 55, 65, 66

Agents Act 2003 ss 24, 41, 42

Subordinate

Legislation cited:        Agents Regulation 2003 sch 8

Cases cited:Nursing and Midwifery Board of Australia v Izzard [2016] ACAT 68

Tribunal:Presidential Member MT Daniel

Date of Orders:  10 July 2019

Date of Reasons for Decision:     26 August 2019

AUSTRALIAN CAPITAL TERRITORY  )

CIVIL & ADMINISTRATIVE TRIBUNAL       )          OR 13/2019

BETWEEN:

COMMISSIONER FOR FAIR TRADING

Applicant

AND:

DENISE FLINT

Respondent

TRIBUNAL:Presidential Member MT Daniel

DATE:10 July 2019

CONSENT ORDER

The Tribunal orders that:

1. Pursuant to section 66(2)(a) of the ACAT Act, the respondent is publically reprimanded in the terms set out at schedule 1.

2. Pursuant to section 66(2)(c) of the ACAT Act, the respondent must, within three months of the date of the Tribunal's order, complete to the satisfaction of the Commissioner the following real estate industry training courses, which are to be designed for the Australian Capital Territory's legislative environment and are not to count towards the respondent's continuing professional development requirements:

   (a)     NSW Real Estate Training College course CPP DSM 4006A - establish and manage agency trust accounts;

   (b)    NSW Real Estate Training College course CPP DSM 4015B - minimising agency and consumer risk;

   The respondent must provide evidence of satisfactory completion of these courses to the Commissioner via email to [email protected] within 14 days of completing each course.

3. Pursuant to section 66(2)(d) of the ACAT Act, within 21 days of the date of this order, the respondent must provide to the Commissioner, via email to [email protected] a copy of her updated policies and procedures for record keeping, trust accounting and the preparation and provision of annual audit statements to the Commissioner as required by the Agents Act 2003, including information in relation to her record and bookkeeping practices.

4. Pursuant to section 66(2)(h) of the ACAT Act, the respondent is required to pay to the Applicant the sum of $2,000.00 within 3 months of the date of these orders.

5. The directions hearing listed on 9 September 2019 is vacated.

6. The final hearing listed on 12 September 2019 is vacated.

……………Signed……………..

Presidential Member MT Daniel

SCHEDULE 1

The Tribunal has found that Denise Flint has breached section 115 of the Agents Act 2003 (Agents Act) by failing to provide the Commissioner for Fair Trading (Commissioner) with a trust audit report (audit report) for the 2016/2017 and 2017/2018 financial years within the time required by the Agents Act.

Accordingly, the Commissioner and Denise Flint have agreed to the Tribunal making orders that Denise Flint:

(a)Be publically reprimanded;

(b)Complete real estate industry training courses in respect of establishing and managing agency trust accounts and minimising agency and consumer risk;

(c)Provide to the Commissioner a copy of its updated policies and procedures for record keeping, trust accounting and the preparation and provision of annual audit statements to the Commissioner as required by the Agents Act including information in relation to her record and bookkeeping practices; and

(d)Pay $2,000.00 to the Commissioner.

REASONS FOR DECISION

1. In these proceedings the Commissioner for Fair Trading (Commissioner) sought occupational discipline orders against Ms Denise Flint (respondent) for failing, on two occasions, to submit her annual audit report within the statutory timeframe.

2. On 17 May 2019, the Commissioner filed the application for disciplinary action, and on 10 July 2019 the parties participated in a mediation. At the conclusion of the mediation, the parties filed proposed consent orders under section 55 of the ACT Civil and Administrative Act 2008 (the ACAT Act). The matter was listed before the Tribunal for hearing later that day to consider whether to make the proposed consent orders.

3. The legal framework within which the Tribunal operates to make orders by consent in an application for occupational discipline is set out in Nursing and Midwifery Board of Australia v Izzard [2016] ACAT 68 and need not be repeated here. It is sufficient to state that after hearing from the parties, I was satisfied that the Tribunal had the power to make the orders in the terms agreed, and that it was appropriate to make those orders. I made the proposed orders by consent, and advised I would publish my reasons. These are those reasons.

Background

1. The respondent is and was, at all relevant times, a licensed agent under the Agents Act 2003 (Agents Act). The respondent has been an agent for 23 years, the most recent renewal of the respondent’s licence is from 1 July 2017 until 30 June 2020.

2. Section 115 of the Agents Act requires agents to submit their trust accounts for audit annually, within three months of the end of the financial year, with the audit report to be provided to the Commissioner.

3. The respondent was therefore required to provide an audit of trust accounts by 30 September 2017 for the 2016-17 audit period, and an audit of trust accounts by 30 September 2018 for the 2017-18 audit period. However, the respondent did not provide the two outstanding audit reports until 12 February 2019.

Tribunal’s power to make the proposed consent orders

1. Section 42 of the Agents Act provides that an occupational discipline application in relation to an agent may be made to the Tribunal. Section 65 of the ACAT Act permits the Tribunal to make an order for occupational discipline against a person if satisfied that a ground for occupational discipline exists.

2. Section 41 of the Agents Act sets out the grounds for occupational discipline against a licensed agent. The Commissioner contended that the respondent was liable for occupational discipline for:

   (a)contravening fair trading legislation by failing to comply with auditing requirements;[1] and

   (b)contravening the Rules of Conduct by failing to exercise reasonable skill, care and diligence.[2]

   [1] Agents Act section 7, section 41(1)(a)

   [2] Agents Act section 41(1)(b); Agents Regulation 2003 regulation 17(1)

3. The parties agreed, and I am satisfied, that the failure to submit the audit reports constitutes grounds for occupational discipline.

4. Section 66 of the ACAT Act sets out orders that may be made on an application for occupational discipline. The orders proposed by the parties are within the power provided by section 66.

Whether the proposed orders are appropriate

1. Section 65(3) of the ACAT Act sets out factors for consideration when making orders for occupational discipline. Relevant factors in this matter include:

   (a)The respondent has been an agent for 23 years and has not previously been subject to any orders for occupational discipline.

   (b)The two audit reports confirmed there were no irregularities within the respondent’s accounts.

   (c)There is no suggestion that any member of the public was affected by the delayed provision of the reports. Nonetheless, by failing to submit audit reports within the prescribed timeframe, the risk of an adverse impact on any other person was increased.

   (d)The respondent’s failures did impact on the Commissioner who is required to enforce the regulatory requirements, however the respondent has minimised that impact by entering into an agreed outcome at an early stage of the proceedings.

Consideration

1. A licensed agent’s annual audit of accounts, and provision of audit reports is not a mere technical requirement. It is an important obligation imposed upon licensed agents, designed to protect the public who entrust an agent with their money. All licensed agents, no matter their level of experience, should be aware of their responsibility to meet this requirement. The respondent should have been aware of, and should have taken steps to prevent, the increased risk to members of the public during the period that her accounts were not audited.

2. The Tribunal considers it appropriate to reprimand the respondent for her failure to audit her accounts and provide the report on time for the two audit periods. A reprimand expresses the Tribunal’s disapproval of this conduct both to the respondent, and other licensed agents. The fine of $2,000 is also appropriate, serving as a deterrent to the respondent and other agents. The fine notifies other agents of the consequences of not meeting their obligations.

3. The Tribunal is satisfied that the respondent should complete the suggested training courses, which address the nature of the contraventions. The requirement to update the Commissioner on the respondent’s policies and procedures for record keeping will also ensure that necessary steps and safeguards are put in place to prevent similar failures in the future.

   ………………………………..

   Presidential Member MT Daniel

   HEARING DETAILS

FILE NUMBER:	OR 13/2019
PARTIES, APPLICANT:	Commissioner for Fair Trading
PARTIES, RESPONDENT:	Denise Flint
COUNSEL APPEARING, APPLICANT	N/A
COUNSEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	ACT Government Solicitor
SOLICITORS FOR RESPONDENT	N/A
TRIBUNAL MEMBERS:	Presidential Member MT Daniel
DATES OF HEARING:	10 July 2019