Commissioner for Fair Trading v Haider (Occupational Discipline)
[2023] ACAT 40
•26 July 2023
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
COMMISSIONER FOR FAIR TRADING v HAIDER (Occupational Discipline) [2023] ACAT 40
OR 22/2022
Catchwords: OCCUPATIONAL DISCIPLINE – real estate agent – appropriate orders – disciplinary action pursuant to section 42 of the Agents Act 2003 – freeze bank accounts pursuant to section 132(1)(a) of the Agents Act on the basis that trust money appeared to have been stolen, misappropriated, or misapplied – agent dishonestly dealt with in excess of at a minimum $350,000 and possible as much as $400,000 – dishonest conduct for a period in excess of three years – failure to return all misappropriated money – applications for occupational discipline under section 65 of the ACAT Act – order for public reprimand – order for fine of $5,000 – order for agent's disqualification from apply for a real estate license for a period of ten years
List of Legislation: ACT Civil and Administrative Tribunal Act 2008 ss 9, 65, 66, 68
Agents Act 2003 ss 7, 41, 42, 107, 132, 171
Fair Trading (Australian Consumer Law) Act 1992 Dictionary
List of Subordinate
Legislation:Agents Regulation 2003 Schedule 8, Rules of Conduct
ACT Civil and Administrative Tribunal Regulation 2009 r 4
List of Cases: Chief Executive, Department of Justice and Attorney General v Sparkling Property Developments Pty Ltd & Anor [2014] QCAT 24
Chief Executive, Department of Employment, Economic Development and Innovation v Schellaars [2010] QCAT 477
Chief Executive, Department of Justice and Attorney General v D J Stringer Property Services Pty Ltd & Anor [2012] QCAT 27
Chief Executive, Department of Justice and Attorney General v Cameo Property Services Pty Ltd & Anor [2012] QCAT 509
Chief Executive, Department of Justice and Attorney General v Smart Real Estate (Qld) Pty Ltd & Anor [2013] QCAT 58
Commissioner for Fair Trading v Blinksell [2014] ACAT 11
Commissioner for Fair Trading v Tasic [2023] ACAT 26
Davidson v Commissioner for Fair Trading [2008] NSWADT 269
Foong v Director-General Department of Finance and Services [2012] NSWADT 261
NSW Bar Association v Sahade (No 3) [2006] NSWADT 39
Tribunal:Senior Member Prof T Foley
Date of Orders: 26 July 2023
Date of Reasons for Decision: 26 July 2023
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) OR 22/2022
BETWEEN:
COMMISSIONER FOR FAIR TRADING
Applicant
AND:
NICHOLAS HAIDER
Respondent
TRIBUNAL:Senior Member Prof T Foley
DATE:26 July 2023
ORDER
The Tribunal orders that:
(a)Pursuant to section 66(2)(a) of the ACT Civil and Administrative Tribunal Act 2008, the respondent is publicly reprimanded.
(b)Pursuant to section 66(2)(h) of the ACT Civil and Administrative Tribunal Act 2008, the respondent is required to pay a fine to the Territory in the sum of $5,000.
(c)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 ten years from the date of this decision.
………………………………..
Senior Member Prof T Foley
REASONS FOR DECISION
The Commissioner for Fair Trading (applicant) has by application dated 19 January 2023 applied for disciplinary action in relation to Nicholas Haider (respondent, agent) pursuant to section 42 of the Agents Act 2003 (Agents Act).
Jurisdiction to review the respondent’s decisions is conferred on the Tribunal by section 42 of the Agents Act which is an authorising law for the purposes of section 9 of the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act). The review is an application for review by the ACT Civil and Administrative Tribunal pursuant to section 68 of the ACAT Act.
In the reasons below, a reference to ‘ACAT’ or ‘tribunal’ refers to the ACT Civil and Administrative Tribunal generally, whereas ‘Tribunal’ refers to the member who heard the application.
The Hearing
The matter was heard on 16 June 2023. The applicant was represented by Ms S Kivela, solicitor. The respondent has not engaged in the ACAT proceedings in any way and was not present. At the final Directions Hearing on 1 May 2023, the tribunal noted “if there is no appearance by on behalf of the respondent at the hearing, the Tribunal may proceed to hear the application in his absence and make final orders”. The applicant arranged for personal service on the respondent of its amended application, the ACAT order, and notice of listing. Personal service was effected on him at his parent’s home on 10 June 2023. I am satisfied the hearing was brought to his attention and heard the matter ex parte the respondent.
The applicant tendered witness statements of lay witnesses, made submissions and responded to questions of the Tribunal.
At the conclusion of the hearing, the Tribunal reserved its decision and indicated it would provide written reasons. These are those reasons.
Background
The respondent is a 38-year-old man. He was first conditionally licensed as a real estate agent in October 2018. He was issued a full licence, No. 18402403 on 16 October 2019. That licence lapsed on 30 June 2022, and he is not currently licenced. Some of the conduct the subject of these proceedings occurred when he was unlicensed.
Between October 2020 and May 2022, five complaints were made against the respondent. On 19 December 2022, a further complaint against the respondent was received by Access Canberra.
On 6 May 2022, the Commissioner froze six of the agent’s ANZ bank accounts (four statutory trust accounts and two personal accounts) pursuant to section 132(1)(a) of the Agents Act on the basis that trust money appeared to have been stolen, misappropriated, or misapplied.
On 2 September 2022, Access Canberra issued a Show Cause Notice to the agent.
On 26 October 2022, two criminal charges were laid against him, namely:
(a)Dealing with trust money otherwise than as directed by the person whom the money was held on trust,[1] and
(b)Receiving trust money and not paying the money into a trust account by the next Authorised Deposit-taking Institution (ADI) business day after the day the money was received.[2]
[1] Agents Act, section 107(1)
[2] Agents Act, section 107(2)
On 30 November 2022, the respondent entered a plea of guilty to both charges in the ACT Magistrates Court.[3]
[3] On 21 July 2023, the agent was sentenced to an 18-month good behaviour order and 100 hours of community service on the criminal charges.
On the basis of these matters, the Commissioner was satisfied on reasonable grounds that a ground for occupational discipline existed and applied to the ACAT for an order for occupational discipline on 9 December 2022. In his email response to the show cause notice issued by the Commissioner, the agent had expressed remorse, saying he was “extremely sorry and disappointed in himself” and intended to ensure trust money was returned to all innocent parties. However, he has made no effort whatsoever to be involved in these proceedings and the Tribunal has had no opportunity to assess the genuineness of his remorse. There was no admissible evidence before the Tribunal as to the reason for his conduct.
The legislative scheme
The Agents Act and the Agents Regulation 2003 (Agents Regulation) set out the provisions relevant to the application and the grounds for seeking an occupational discipline order.
Section 42 of the Agents Act provides that the Commissioner must be satisfied a ground for occupational discipline exists in relation to the agent:
Application 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.
Section 41 details the grounds for occupational discipline in relation to agents:
Grounds for occupational discipline—agents
(1) Each of the following is a ground for occupational discipline in relation to an agent:
(a)the agent has contravened, or is contravening, the fair trading legislation;
(b)the agent has contravened, or is contravening, a rule of conduct;
(c)the agent has contravened, or is contravening, a condition of the agent’s licence;
(d)if the agent is a licensed agent––the agent has become ineligible for a licence under section 24 (Eligibility for licences) or for registration under section 49 (Eligibility for registration);
(e)the agent has contravened, or is contravening, an order of the ACAT;
(f)the agent’s licence was obtained by fraud or mistake;
(g)a ground prescribed by regulation for this section.
(2) However, subsection (1) (a) to (e) applies to a former licensed agent only in relation to anything that happened while the person was licensed.
Section 41(1)(a) includes as a ground for occupational discipline a contravention of fair trading legislation. Section 7 defines ‘fair trading legislation’ for the purposes of section 41(1)(a) as the Fair Trading (Australian Consumer Law) Act 1992. The dictionary of that act, in a somewhat circuitous fashion, defines ‘fair trading legislation’ to mean the Agent Act. Relevantly, section 107 of the Agents Act provides:
Dealing with trust money
(1) A licensed property 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 property 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 property 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 property 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.
(5) An offence against this section is a strict liability offence.
(6) Trust money held by a licensed property 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 property 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.
Section 41(1)(b) includes as a further ground for occupational discipline a contravention of a rule of conduct. Section 171 provides ‘rules of conduct’ may be made by regulation. Rules of Conduct are provided in Schedule 8 of the Agents Regulation. Relevantly, Rules 8.2–8.10 provide:
8.2 Knowledge of Act and other laws
An agent must have a knowledge and understanding of the Act, and any other laws relevant to the kind and class of licence or kind of registration held (including, laws relating to residential tenancy, fair trading, trade practices, anti-discrimination and privacy) that may be necessary to allow the agent to lawfully exercise their functions as agent.
8.3 Fiduciary obligations
An agent must comply with the fiduciary obligations arising as an agent.
8.4 Honesty, fairness and professionalism
(1)An agent must act honestly, fairly and professionally with all parties in a transaction.
(2)An agent must not mislead or deceive any parties in negotiations or a transaction.
8.5 Skill, care and diligence
An agent must exercise reasonable skill, care and diligence.
8.6 High pressure tactics, harassment or unconscionable conduct
An agent must not engage in high pressure tactics, harassment or harsh or unconscionable conduct.
8.7 To act in client’s best interests
An agent must act in the client’s best interest at all times unless it would be contrary to the Act or otherwise unlawful to do so.
8.8 Confidentiality
An agent must not, at any time, use or disclose any confidential information obtained while acting on behalf of a client or dealing with a customer, unless—
(a)the client or customer consents to the disclosure; or
(b)the agent is permitted or compelled by law to disclose the information.
8.9 To act in accordance with client authority
An agent must not act as an agent or represent them self as acting as an agent on behalf of a person without the written consent of the person.
8.10 To act in accordance with client’s instructions
An agent must act in accordance with a client’s instructions unless it would be contrary to the Act or otherwise unlawful to do so.
Section 65 of the ACAT Act provides that in dealing with applications for occupational discipline, the tribunal must be satisfied a ground for occupational discipline exists against a person. In doing so the tribunal must consider the factors set out in section 65(3). Section 65 provides:
Considerations 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.
Section 66 of the ACAT Act applies if the tribunal is satisfied it can make an order for occupational discipline in relation to a person. Section 66(2) details the orders that can be made. Relevantly, section 66 provides:
Orders 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.
Particulars of conduct
Following the first five complaints, the Commissioner undertook a forensic examination of the agent’s frozen accounts. Allowing for the lack of detail in the identification of some transactions in the agent’s trust and personal account records, the Commissioner identified the following dishonest conduct.
Complaint 1
In or about 2019, the agent was engaged for a time to market certain lots of land in a residential estate at Bredbo, New South Wales to purchasers of home/land packages. It would appear his ACT licence would not have permitted him to act in this way. The following deposit monies were received:
(a)On 13 July 2020, $10,000 was received into the agent’s trust account as part of the deposit for Lot 22. On the same day, $10,000 was transferred out of the trust account in four separate transactions to the agent’s personal account.
(b)On 7 May 2020, $8,000 was received into the agent’s trust account as part of the deposit for Lot 32. On 8 May 2020, $8,000 was transferred in five smaller transactions out of the trust account to the agent’s personal account.
(c)On 23 September 2020, $9,000 was received into the agent’s trust account as part of the deposit for Lot 20. On the same day, $9,000 was transferred out of the trust account to the agent’s personal account.
(d)On 31 August 2020, $1,000 was received into the agent’s trust account as a holding deposit for Lot 26. On the same day, $1,000 was transferred out of the trust account into the agent’s personal account.
(e)On 9 October 2020, $9,725 was received into the trust account as a deposit for Lot 26. On the same day, two transactions totalling $9,725 was transferred out of the trust account to the agent’s personal account.
(f)On 21 and 29 September 2020, two payments each of $1,000 were received into the trust account as a holding deposit for Lot 14. Those sums were transferred out of the trust account to the agent’s personal account.
(g)On 2 November 2020, $25,500 was received into the trust account as the balance of the deposit for Lot 14. On the same day, six transactions totalling $25,500 was transferred out of the trust account to the agent’s personal account.
These misappropriations total $65,225, but there appear to have been others. On 12 May 2022, the complainant in Complaint 1 (the solicitors for the proprietors of the estate) identified at the time of their complaint that approximately $95,000 remained outstanding from unreleased deposit monies following settlement of sales in the estate. As far as the applicant is aware, none of these funds have been released or refunded.
Complaint 2
On 6 October 2020, $1,000 was received into the trust account as part of a holding deposit for Lot 47 in the Bredbo estate. On the same day, $1,000 was transferred to the agent’s personal account.
On 13 October 2020, a further sum of $15,225 was received into the trust account as further part of the sale deposit for Lot 47. On the same day four transactions totalling $16,225 were transferred out of the account to the agent’s personal account. The additional $1,000 appears to include money from a transaction relating to Lot 35.
On 8 December 2020, Access Canberra received the complaint from the purchaser’s solicitor stating that contracts had not been exchanged, and requests had been made for the return of the deposit on 18 November 2020, 30 November 2020, and 8 December 2020 but to no avail. On 14 December 2020, a $1,000 payment and two $15,225 payments were made from the trust account to an outgoing transaction recorded in the purchaser’s name. This may indicate the monies were returned with an additional $15,225. The applicant has had no further correspondence from the complainant and is unable to determine whether the deposit has in fact been returned.
Complaint 3
Between 1 November 2021 and 18 November 2021, two persons made nine payments totalling $103,500 to the agent’s personal account as part of a sale deposit for a property in Taylor. A further sum of $1,000 was also paid to the agent’s separate personal account. On 3 November 2021, $11,050 was paid out of the personal account apparently to the vendor for the sale. Throughout this period, no part of the funds was deposited into trust. In January 2021, the intending purchasers found, much to their surprise and disappointment, that the property had been sold to another party through a different agent. Throughout February and March 2022, they and their solicitors attempted to obtain return of their deposits with no avail.
On 21 March 2022, a complaint was made to Access Canberra on behalf of the purchasers. At that stage no part of the funds had been released. On 25 August 2022, some ten months after their deposit, the purchasers received the return of their funds together with ‘compensation’ of $20,000.
Complaint 4
On 29 July 2020, $1,000 was received into the trust account as a holding deposit for Lot 28 of the Bredbo estate. On the same day, $1,000 was transferred out of the trust account to the agent’s personal account.
On 8 January 2021, $8,900 was received into the trust account as further part of the deposit for Lot 28. On 11 January 2021, two transactions totalling $8,900 were transferred out of the trust account to the agent’s personal account.
The purchase did not proceed apparently because the agent was no longer authorised to market lots in the subdivision by the developer. The intending purchaser’s solicitor sent letters of demand to the agent on her behalf on 23 September 2021, 27 October 2021, and 26 November 2021 directing the respondent to return the deposits made. This did not occur.
On a number of occasions, the agent falsely represented to the purchaser that he had paid the money to her solicitor together with an additional amount to cover legal fees. However, this money was not received by her until 28 August 2022, some seven months after her final deposit had been banked. Because of the delay, she was priced out of the market and her plan to build a retirement home came to nought.
On 4 December 2021, the purchaser made a complaint to Access Canberra that the money deposited into the agent’s trust account had not been returned to her at that time.
Complaint 5
This was an anonymous complaint, and no details were provided.
Complaint 6
An additional complaint was made to Access Canberra on 19 December 2022 relating to the agent’s engagement to market two dwellings in the course of construction in Deakin ACT by a small private developer undertaking his first residential development.
On 8 March 2021, two payments each of $40,000 were deposited into the trust account as deposit for Lot 2 in the Deakin development. On the same day, $3,000 was transferred to the agent’s personal account.
On 9 March 2021, two further payments of $35,000 and $40,000 were deposited into the trust account as deposit for Lot 1 in the Deakin development. On the same day, nine transactions of $5,000 each were transferred to the agent’s personal account.
On 10 March 2021, six transfers each of $5,000 were made to agent’s personal account.
Following settlements on 19 September (Lot 1) and 26 September (Lot 2) 2022, the agent was directed to release the deposits to the vendor. In correspondence throughout November and December 2022, the agent continued to falsely claim that he was “on his way to release the money” or that “it has already been done”. None of this had happened. The applicant says the agent has yet to release the deposits totalling $155,000 as at the date of the hearing.
Taking all of these complaints together, the agent has dishonestly dealt with in excess of at a minimum $350,000, and possibly as much as $400,000. This is an extreme level of dishonesty. It continued in some form for a period in excess of three years.[4] The culpability is considerable and is further compounded as only some of the money has been returned. On the applicant’s submission, at least $250,000 remains outstanding.[5]
[4] Applicant’s submissions dated 30 March 2023 at [61]
[5] Applicant’s submissions dated 30 March 2023 at [69]
As regards the threshold requirement in section 65(2) of the ACAT Act, the Tribunal is satisfied there is evidence available to establish grounds for occupational discipline exist against the agent.
Orders sought by the applicant
The applicant seeks orders for a public reprimand, a fine of $5,000, and the agent’s disqualification from applying for a real estate licence for a period of ten years.
The applicant seeks these orders in its regulatory capacity so as to provide a general deterrence to other real estate agents and to protect the public from an agent who has contravened the Agents Act and Agents Regulation.
The applicant seeks a public, rather than private, reprimand citing NSW Bar Association v Sahade (No 3) (concerning a legal practitioner) to the effect that there is “reasonable possibility that one or more other legal practitioners might act in the same way as the legal practitioner under consideration”.[6] The applicant says there is a reasonable possibility that other agents may act in the same way as the respondent and a public reprimand may afford a warning to other agents not to breach their obligations in a similar fashion.
[6] [2006] NSWADT 39, see discussion at [124]-[128]
The applicant says the agent’s contraventions of the Agents Act and Agents Regulation are extremely serious and at the higher end of offending compared with similar matters and therefore seeks the maximum fine of $5,000 available for occupational discipline under regulation 4(a) of the ACT Civil and Administrative Tribunal Regulation 2009.
Most significantly the applicant seeks an order disqualifying the agent from applying for a real estate licence for a lengthy period of ten years. The applicant has provided a helpful schedule of comparable interstate cases of penalties imposed on real estate agents for misuse of trust account monies.[7]
[7] Applicant’s submissions dated 30 March 2023 at [87]-[90], see also Commissioner for Fair Trading v Blinksell [2014] ACAT 11 as annexed to the Applicant’s submissions
In Chief Executive, Department of Employment, Economic Development and Innovation v Schellaars, the agent took $42,000 which was returned and was disqualified by the tribunal for five years;[8] in Chief Executive, Department of Justice and Attorney General v D J Stringer Property Services Pty Ltd & Anor, the agent pre-drew commissions of $283,000, was reprimanded and fined but not disqualified by the tribunal;[9] in Chief Executive, Department of Justice and Attorney General v Cameo Property Services Pty Ltd & Anor, the agent took $32,000 which was returned and was disqualified by the tribunal for two years;[10] in Chief Executive, Department of Justice and Attorney General v Smart Real Estate (Qld) Pty Ltd & Anor, the agent took $27,000 which was returned and was disqualified by the tribunal for five years;[11] Chief Executive, Department of Justice and Attorney General v Sparkling Property Developments Pty Ltd & Anor, the agent took $27,000 which was returned and was disqualified by the tribunal for five years;[12] in Davidson v Commissioner for Fair Trading, the agent’s employee took $435,000 and the agent was disqualified by the tribunal for 18 months;[13] and in Foong v Director-General Department of Finance and Services, the agent took $80,000 and was disqualified by the tribunal for seven years.[14]
[8] [2010] QCAT 477
[9] [2012] QCAT 27
[10] [2012] QCAT 509
[11] [2013] QCAT 58
[12] [2014] QCAT 24
[13] [2008] NSWADT 269
[14] [2012] NSWADT 261
The tribunal in Commissioner for Fair Trading v Blinksell similarly sets out comparable cases (as at 2014) where real estate agents have dealt with trust money otherwise than as directed.[15] More recently, the tribunal in Commissioner for Fair Trading v Tasic has provided a further set of comparative cases.[16] A number of the cases highlighted by the applicant have similar factual situations involving dishonest dealings with trust monies over an extended period. The applicant says what distinguishes this matter is the amount of funds stolen (up to $400,000), the period of dishonesty (in excess of three years) and the amount of money (at least $250,000) that remains outstanding.
[15] [2014] ACAT 11
[16] [2023] ACAT 26
The applicant submits that disqualifying the agent from applying for a real estate licence for a period of ten years is therefore an appropriate occupational discipline order given the gross seriousness of his conduct.
Consideration
The ACAT Act sets a three-step process for the Tribunal in exercising its powers in occupational discipline matters.
Step 1
Section 65(2) provides the tribunal may make an order for occupational discipline if it is satisfied that a ground for such an order exists against the person. For agents, the grounds listed in section 41(1)(a) of the Agents Act include “the agent has contravened, or is contravening, the fair trading legislation”. “Fair trading legislation” is defined with reference to the Fair Trading (Australian Consumer Law) Act 1992 as meaning, relevantly, the Agents Act. The Tribunal is satisfied the respondent's conduct breached sections 107(1) and (2) of the Agents Act and is therefore satisfied that a ground for occupational discipline exists. Furthermore, Section 41(1)(b) of the Agents Act provides as a further ground for occupational discipline that the agent has contravened a rule of conduct. The applicant alleges that the respondent has contravened rule 8.3 (comply with the fiduciary obligations arising as an agent) and 8.10 (act in accordance with client instructions) of the Rules of Conduct. The Tribunal is satisfied those breaches have occurred and this further ground for occupational discipline exists.
Step 2
Section 65(3) then provides a mandatory direction that in considering what form of occupational discipline to impose, the tribunal must consider a non-exhaustive list of factors. The Tribunal has considered each of these factors:
(a)Whether the person took reasonable steps to avoid the action (the contravention) that is the ground for occupational discipline: The dishonest behaviour took place over a period in excess of three years. A common pattern was evident – as soon as a deposit hit his trust account, the agent would immediately transfer funds out to his personal account. From the applicant’s forensic examination, it often appeared the trust account would begin the day with a $0 balance, have the deposit credited and quickly debited and end the day on a $0 balance, to then begin the next day in the same way. This was a wanton abuse of his fiduciary duty and there is no evidence that the respondent took reasonable, or any other steps, steps to avoid the action.
(b)Whether occupational discipline has previously been used against the person for a similar act: The respondent has not been the subject of any previous occupational discipline.
(c)Whether the person has taken steps to mitigate the effect of the contravention: With respect to Complaints 3 and 4 the respondent has taken steps to mitigate the effect of the contravention by returning their money, albeit after long delays and persistent pursuit by the complainants and their solicitors. The other complainants have received no refunds. On the applicant’s estimate there is still at least $250,000 outstanding.
(d)The impact of the contravention on any other person: One complainant faced the disappointment of missing out on the purchase of the property they had paid a deposit for; another lost the opportunity to purchase alternative land for her retirement plans; yet another lost both money and trust in his first foray into property development. These are personal, but significant impacts from the respondent’s dishonesty. More broadly, the impact of the contravention on the community’s faith in real estate agents is profoundly damaged.
(e)The likelihood that the person will act in a way that is a ground for occupational discipline in the future: The respondent has provided no insight to the Tribunal for his dishonesty. In the absence of any such insight, the Tribunal can have no faith that he will not act in the same way again unless he is prevented from having access to trust account funds.
(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: The applicant has provided clear and cogent reasons for the particular occupational discipline orders it seeks.
Step 3
Section 66(1) then provides if the Tribunal has satisfied the section 65 requirements (which it has), it may make one or more of the orders for occupational discipline listed in section 66(2). The applicant has sought a public reprimand, a fine of $5,000 and disqualification from applying for a real estate licence for ten years. The Tribunal considers each of these orders are appropriate for the reasons provided.
Public reprimand
The applicant has sought a public, rather than private, reprimand citing NSW Bar Association v Sahade (No 3) to the effect that there is a reasonable possibility that other agents may contemplate acting in the same way as the respondent and a public reprimand affords a suitable warning to them.[17] I agree with that submission and make the reprimand public.
Fine of $5,000
[17] [2006] NSWADT 39
The fine sought by the applicant is the maximum fine available for occupational discipline under section 4 of the ACT Civil and Administrative Tribunal Regulation 2009. Nonetheless, the respondent's contraventions of the Agents Act and Agents Regulation are grossly serious and on the higher end of the scale of offending compared with similar matters. As the tribunal noted “with concern” in Commissioner for Fair Trading v Blinksell, “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”.[18] Here the respondent misled, for prolonged periods, the complainants and other affected persons, though he did not mislead the applicant. I am satisfied, on this basis the maximum fine is appropriate.
Disqualification from applying for a real estate licence for ten years
[18] [2014] ACAT 11 at [69]
The period of disqualification the applicant seeks is a lengthy one. The applicant submits a period of ten years is an appropriate occupational discipline order given the gross seriousness of the conduct, the protection of the public, and the need to restore confidence in the real estate profession.
In spite of a plethora of similar cases cited in Commissioner for Fair Trading v Blinksell[19] and in Commissioner for Fair Trading v Tasic[20] together with the schedule of comparative cases provided by the applicant, I can find none that have the same level of combined seriousness constituted by dishonest dealing with up to $400,000, over a period in excess of three years and where at least $250,000 remains outstanding.
[19] [2014] ACAT 1140
[20] [2023] ACAT 26
Given this, a period of disqualification sufficient to provide a strong statement of deterrence to other real estate agents who may, or may be tempted to, participate in similar conduct and, additionally, a strong statement of the Commissioner’s intent to protect the public from agents who egregiously contravene the Agents Act and Agents Regulation is needed. I agree a period of ten years disqualification is needed to make those statements and I make that order.
Decision
The Tribunal orders that:
(a)Pursuant to section 66(2)(a) of the ACT Civil and Administrative Tribunal Act 2008, the respondent is publicly reprimanded.
(b)Pursuant to section 66(2)(h) of the ACT Civil and Administrative Tribunal Act 2008, the respondent is required to pay a fine to the Territory in the sum of $5,000.
(c)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 ten years from the date of this decision.
………………………………..
Senior Member Prof T Foley
| Date(s) of hearing: | 16 June 2023 |
| Solicitors for the Applicant: | Ms S Kivela, ACT Government Solicitor |
| Respondent: | No appearance |
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