Commissioner for Fair Trading v Murlton Pty Ltd trading as Act Strata Management
[2018] ACAT 111
•17 October 2018
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
COMMISSIONER FOR FAIR TRADING v MURLTON PTY LTD trading as ACT STRATA MANAGEMENT (Occupational Discipline) [2018] ACAT 111
OR 15/2018
Catchwords: OCCUPATIONAL DISCIPLINE – consent orders – considering motions without quorum – failure to adjourn AGM – failure to obtain approval from owners corporation – reprimand
Legislation cited: ACT Civil and Administrative Tribunal Act 2008 ss 65, 66
Agents Act 2003 ss 24, 41
Unit Titles (Management) Act 2011 ss 50, 75, 77, 81, 82; cl 3.13
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: 17 October 2018
Date of Reasons for Decision: 5 November 2018
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) OR 15/2018
BETWEEN:
COMMISSIONER FOR FAIR TRADING
Applicant
AND:
MURLTON PTY LTD T/AS ACT STRATA MANAGEMENT
Respondent
TRIBUNAL: Presidential Member MT Daniel
DATE:17 October 2018
ORDERS
By consent
The respondent is reprimanded in accordance with section 66(2) of the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act).
The respondent is required to pay to the Territory, within 60 days of the date of these orders, the amount of $8,000.00 pursuant to s 66(2)(h) of the ACAT Act.
Within six months of the date of these orders, pursuant to s 66(2)(c) of the ACAT Act, the licensed director of the respondent is required to complete additional training, including the following course units:
(a) CPPDSM4007A - Identify legal and ethical requirements of property management to complete agency work;
(b) CPPDSM4009A - Interpret legislation to complete agency work;
(c) CPPDSM4015A - Minimise agency and consumer risk;
(d) BSBFIM501A - Manage budgets and financial plans; and
(e) CPPDSM5009A - Coordinate risk management system in the property industry.
Any training undertaken in relation to satisfaction of the above order is in addition to any training which the licensed director of the respondent is required to undertake to satisfy continuing professional development requirements of the Agents Act and the Agents Regulation.
The respondent must provide the applicant with evidence of completion of the above courses within 28 days of completion.
The Tribunal notes that the respondent undertakes to ensure that the Owners Corporation for UP1318 is advised of its obligation regarding a sinking fund pursuant to s 81 of the Unit Titles (Management) Act 2011 at the Annual General Meeting scheduled for 22 October 2018 and within 28 days of the AGM provide evidence to the applicant of the advice provided.
The Directions Hearing dated 22 October 2018 is vacated.
……..………Signed…..………..
Presidential Member MT Daniel
REASONS FOR DECISION
In these proceedings the Commissioner for Fair Trading sought orders for occupational discipline against the respondent, a licensed agent.
The application for disciplinary action was filed on 15 August 2018. On 17 October 2018, at the conclusion of a lengthy mediation, the parties filed proposed consent orders and a statement of agreed facts.
In short, the parties agreed that from 24 December 2014 to 23 May 2016 the respondent did not have a licensed director holding the required licence – making the respondent itself ineligible to hold a licence. Further, the respondent contravened the Rules of Conduct for agents on multiple occasions between 2012 and 2016 by failing to exercise reasonable care, skill and diligence when providing services as managing agent for two owners corporations. The statement of agreed facts is reproduced at the end of these reasons.
The parties agreed that the respondent’s conduct in these respects constituted grounds for occupational discipline pursuant to section 41 of the Agents Act 2003 (Agents Act).
In Nursing and Midwifery Board of Australia v Izzard [2016] ACAT 68[1] I set out the legal framework within which the Tribunal operates when considering whether to make orders by consent in an occupational discipline matter. In accordance with the usual practice, the parties appeared before the Tribunal late on 17 October 2018 to seek the proposed orders. This gave the Tribunal the opportunity to review the consent orders proposed and satisfy itself that the orders were within power and appropriate. At the conclusion of that hearing I made the proposed orders, and now publish my reasons.
[1] [6] – [11]
The Tribunal’s power to make the proposed consent orders
Section 41 of the Agents Act sets out the grounds for occupational discipline in relation to agents. Ineligibility for a licence (such as not having a director that holds the requisite licence) and contravention of the rules of conduct (such as by not exercising reasonable care, skill and diligence) are each listed as grounds for occupational discipline. Section 42 of the Agents Act then provides that an application for occupational discipline may be made to the Tribunal.
Section 65 of the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act) sets out the factors the Tribunal should consider when making orders for occupational discipline, and section 66 sets out the orders that may be made.
The facts as agreed clearly constitute grounds for occupational discipline. Thus it was open to the Tribunal to make orders for occupational discipline under section 66 of the ACAT Act.
Are the proposed consent orders appropriate?
In making the orders, I considered the factors set out in section 65(3) of the ACAT Act, and noted that the respondent has not been the subject of disciplinary proceedings previously, and that the orders now proposed by the parties are very similar to those originally sought by the applicant. I noted that although there were a number of breaches of the rules of conduct, these were confined to two owners corporations. The nature of those breaches, being a failure to exercise reasonable care, skill and knowledge, will be addressed by the proposed requirement to undertake further education.
I considered that it was appropriate to reprimand the respondent for its failure to ensure that at least one director held the required licence, and for the multiple failures to exercise reasonable care and skill in managing owners corporations. Members of an owners corporation are usually unfamiliar with the requirements of the unit titles legislation, and they rely upon their managing agent to know those requirements and assist the owners corporation to meet them. In this case, two owners corporations were let down by the respondent failing to advise them of their requirements and assist them to meet those requirements.
A reprimand expresses to the respondent, and to licensed agents generally, the Tribunal’s disapproval of this conduct. The fine imposed also serves as a deterrent both to the respondent and more generally. I am satisfied that with the benefit of the further training now required, in addition to continuing professional development requirements, it is unlikely that there will be such failures in the future.
………………………………..
Presidential Member MT Daniel
ANNEXURE 1
Statement of Agreed Facts
On 14 August 2009, the respondent was granted a licence to carry on business as a real estate agent (Licence No. 18401358) and is therefore a licensed agent for the purposes of the Agents Act 2003 (Agents Act). That licence is due to expire on 30 June 2020.
On 23 December 2014, Mr Craig Bowditch ceased being a director of the respondent and was at that time a licensed agent for the purposes of the Agents Act and the only licensed director of the respondent (Licence No. 18401357).
On 19 January 2015, Mr Craig Bowditch notified Access Canberra of his cessation as a company director of the respondent, and requested his removal as the licensed director for the respondent.
On 28 January 2015, Access Canberra wrote to Mr David Bowditch (a director of the respondent, but not a licensed director), advising him that the respondent required a licensed director in order to maintain its eligibility to hold a licence.
On 4 February 2016, Mr Scott Hickey made a complaint to Access Canberra in relation to the respondent’s management of Units Plan 702.
On 5 May 2016, Access Canberra wrote to Mr David Bowditch, reminding him that the respondent required a licensed director.
On 6 May 2016, Mr David Bowditch applied for a real estate agent’s licence.
On 24 May 2016, Mr David Bowditch was granted a licence to carry on business as a real estate agent (Licence No. 18402078), due to expire on 30 June 2019, and was appointed the licensed director for the respondent. Mr David Bowditch’s licence is conditional and permits him to manage units plans only.
On 17 October 2016, Access Canberra obtained a Units Plan list from the respondent which included UP1318. A notation appeared in relation to UP1318 stating “Owners have not requested a sinking fund”.
On 20 December 2016, Ms Jenny Zheng lodged a complaint with Access Canberra in relation to UP2296, being a Units Plan managed by the respondent.
On 22 June 2017, the applicant issued a show-cause letter to the respondent in relation to allegations that had arisen from the material relating to UP702, UP1318 and UP2296.
The applicant did not receive a response to the show-cause notice.
On 14 September 2017, the applicant sent a further request for a response to the show‑cause notice.
On 20 September 2017, the applicant received a letter from Mr David Bowditch addressing Ms Zheng’s complaint in relation to UP2296.
On 19 July 2018, the ACT Government Solicitor, on behalf of the applicant:
(a)notified the respondent that the applicant intended to make an application to the ACT Civil & Administrative Tribunal for orders for occupational discipline in respect of contraventions by the respondent of the Agents Act;
(b)provided a copy of the proposed draft application to the Tribunal; and
(c)invited the respondent to provide a response to the proposed draft application for occupational discipline.
On 30 July, 1 August and 3 August 2018, the respondent wrote to the ACT Government Solicitor in response to the draft application.
The applicant determined to file an application in the form of the draft provided to the respondent on 19 July 2018 in relation to the breaches of the Agents Act detailed therein.
The Parties agree the follow grounds for occupational discipline pursuant to section 41 of the Agents Act exist:
(a)The respondent has contravened or is contravening a rule of conduct, as particularised below: section 41(1)(b) of the Agents Act; and
(b)The respondent was ineligible for a licence under section 24 of the Agents Act for the period 24 December 2014 until 23 May 2016, as particularised below: section 41(1)(d) of the Agents Act.
GROUNDS FOR OCCUPATIONAL DISCIPLINE
Contraventions Relating to the Rules of Conduct – s 41(1)(b) of the Agents Act
Units Plan 702
Failure to obtain approval for sinking fund plan
In contravention of Rule 8.5 of the Rules, the respondent failed to exercise reasonable skill, care and diligence by failing to obtain approval from the Owners Corporation for UP702 for the sinking fund plan dated 28 October 2015, as required by s 82(2) of the UTMA.
Failure to notify Owners Corporation of decision to terminate management services
In contravention of Rule 8.5 of the Rules, the respondent failed to exercise reasonable skill, care and diligence by failing to notify the Owners Corporation for UP702 of its decision to terminate its services to the Units Plan.
Units Plans 2296
Considering motions at AGM held on 10 September 2012 without a quorum
In contravention of Rule 8.5 of the Rules, the respondent failed to exercise reasonable skill, care and diligence by considering eight motions at the Annual General Meeting for UP2296 held on 10 September 2012 without a quorum consisting of both members of the Owners Corporation being present, as required by Schedule 3, Part 3.1, Clause 3.12(1) of the UTMA.
Considering motions at AGM held on 16 September 2013 without a quorum
In contravention of Rule 8.5 of the Rules, the respondent failed to exercise reasonable skill, care and diligence by considering eight motions at the Annual General Meeting for UP2296 held on 16 September 2013 without a quorum consisting of both members of the Owners Corporation being present, as required by Schedule 3, Part 3.1, Clause 3.12(1) of the UTMA.
Considering motions at AGM held on 22 January 2014 without a quorum
In contravention of Rule 8.5 of the Rules, the respondent failed to exercise reasonable skill, care and diligence by considering eleven motions at the Annual General Meeting for UP2296 held on 22 January 2014 without a quorum consisting of both members of the Owners Corporation being present, as required by Schedule 3, Part 3.1, Clause 3.12(1) of the UTMA.
Considering motions at AGM held on 5 September 2014 without a quorum
In contravention of Rule 8.5 of the Rules, the respondent failed to exercise reasonable skill, care and diligence by considering eight motions at the Annual General Meeting for UP2296 held on 5 September 2014 without a quorum consisting of both members of the Owners Corporation being present, as required by Schedule 3, Part 3.1, Clause 3.12(1) of the UTMA.
Considering motions at AGM held on 2 September 2015 without a quorum
In contravention of Rule 8.5 of the Rules, the respondent failed to exercise reasonable skill, care and diligence by considering eight motions at the Annual General Meeting for UP2296 held on 2 September 2015 without a quorum consisting of both members of the Owners Corporation being present, as required by Schedule 3, Part 3.1, Clause 3.12(1) of the UTMA.
Considering motions at AGM held on 23 August 2016 without a quorum
In contravention of Rule 8.5 of the Rules, the respondent failed to exercise reasonable skill, care and diligence by considering eight motions at the Annual General Meeting for UP2296 held on 23 August 2016 without a quorum consisting of both members of the Owners Corporation being present, as required by Schedule 3, Part 3.1, Clause 3.12(1) of the UTMA.
Failure to adjourn AGM held on 10 September 2012
In contravention of Rule 8.5 of the Rules, the respondent failed to exercise reasonable skill, care and diligence by failing to adjourn the Annual General Meeting for UP2296 held on 10 September 2012 without a quorum, to the same day in the next week at the same place and time, as required by Schedule 3, Part 3.1, Clause 3.12(2) of the UTMA.
Failure to adjourn AGM held on 16 September 2013
In contravention of Rule 8.5 of the Rules, the respondent failed to exercise reasonable skill, care and diligence by failing to adjourn the Annual General Meeting for UP2296 held on 16 September 2013 without a quorum, to the same day in the next week at the same place and time, as required by Schedule 3, Part 3.1, Clause 3.12(2) of the UTMA.
Failure to adjourn AGM held on 22 January 2014
In contravention of Rule 8.5 of the Rules, the respondent failed to exercise reasonable skill, care and diligence by failing to adjourn the Annual General Meeting for UP2296 held on 22 January 2014 without a quorum, to the same day in the next week at the same place and time, as required by Schedule 3, Part 3.1, Clause 3.12(2) of the UTMA.
Failure to adjourn AGM held on 5 September 2014
In contravention of Rule 8.5 of the Rules, the respondent failed to exercise reasonable skill, care and diligence by failing to adjourn the Annual General Meeting for UP2296 held on 5 September 2014 without a quorum, to the same day in the next week at the same place and time, as required by Schedule 3, Part 3.1, Clause 3.12(2) of the UTMA.
Failure to adjourn AGM held on 2 September 2015
In contravention of Rule 8.5 of the Rules, the respondent failed to exercise reasonable skill, care and diligence by failing to adjourn the Annual General Meeting for UP2296 held on 2 September 2015 without a quorum, to the same day in the next week at the same place and time, as required by Schedule 3, Part 3.1, Clause 3.12(2) of the UTMA.
Failure to adjourn AGM held on 23 August 2016
In contravention of Rule 8.5 of the Rules, the respondent failed to exercise reasonable skill, care and diligence by failing to adjourn the Annual General Meeting for UP2296 held on 23 August 2016 without a quorum, to the same day in the next week at the same place and time, as required by Schedule 3, Part 3.1, Clause 3.12(2) of the UTMA.
Acting as chairperson for AGM held on 30 September 2012 when not member of executive committee
In contravention of Rule 8.5 of the Rules, the respondent failed to exercise reasonable skill, care and diligence by acting as Chairperson for the Annual General Meeting for UP2296 held on 30 September 2012 when it was not a member of the Executive Committee and was not entitled to be elected Chairperson, as required by Schedule 3, Part 3.1, Clause 3.13(1) of the UTMA or otherwise in accordance with Clause 3.13(2) of the UTMA.
Acting as chairperson for AGM held on 16 September 2013 when not member of executive committee
In contravention of Rule 8.5 of the Rules, the respondent failed to exercise reasonable skill, care and diligence by acting as Chairperson for the Annual General Meeting for UP2296 held on 16 September 2013 when it was not a member of the Executive Committee and was not entitled to be elected Chairperson, as required by Schedule 3, Part 3.1, Clause 3.13(1) of the UTMA or otherwise in accordance with Clause 3.13(2) of the UTMA.
Acting as chairperson for AGM held on 5 September 2014 when not member of executive committee
In contravention of Rule 8.5 of the Rules, the respondent failed to exercise reasonable skill, care and diligence by acting as Chairperson for the Annual General Meeting for UP2296 held on 5 September 2014 when it was not a member of the Executive Committee and was not entitled to be elected Chairperson, as required by Schedule 3, Part 3.1, Clause 3.13(1) of the UTMA or otherwise in accordance with Clause 3.13(2) of the UTMA.
Acting as chairperson for AGM held on 2 September 2015 when not member of executive committee
In contravention of Rule 8.5 of the Rules, the respondent failed to exercise reasonable skill, care and diligence by acting as Chairperson for the Annual General Meeting for UP2296 held on 2 September 2015 when it was not a member of the Executive Committee and was not entitled to be elected Chairperson, as required by Schedule 3, Part 3.1, Clause 3.13(1) of the UTMA or otherwise in accordance with Clause 3.13(2) of the UTMA.
Acting as chairperson for AGM held on 23 August 2016 when not member of executive committee
In contravention of Rule 8.5 of the Rules, the respondent failed to exercise reasonable skill, care and diligence by acting as Chairperson for the Annual General Meeting for UP2296 held on 23 August 2016 when it was not a member of the Executive Committee and was not entitled to be elected Chairperson, as required by Schedule 3, Part 3.1, Clause 3.13(1) of the UTMA or otherwise in accordance with Clause 3.13(2) of the UTMA.
Allowing representative of Owners Corporation member to act as chairperson at AGM held on 22 January 2014
In contravention of Rule 8.5 of the Rules, the respondent failed to exercise reasonable skill, care and diligence by allowing a representative of an Owners Corporation member to act as Chairperson at the Annual General Meeting for UP2296 held on 22 January 2014 when that person was not a member of the Executive Committee and was not entitled to be elected Chairperson, as required by Schedule 3.1, Part 3.1, Clause 3.13(1) of the UTMA or otherwise in accordance with Clause 3.13(2) of the UTMA.
Failure to obtain approval for 2012-13 general fund budget
In contravention of Rule 8.5 of the Rules, the respondent failed to exercise reasonable skill, care and diligence by failing to obtain approval from the Owners Corporation for UP2296 for its general fund budget for 2012-13, as required by s 75(1) of the UTMA, in order to make administrative fund payments.
Failure to obtain approval for 2013-14 general fund budgets
In contravention of Rule 8.5 of the Rules, the respondent failed to exercise reasonable skill, care and diligence by failing to obtain approval from the Owners Corporation for UP2296 for its general fund budgets for 2013-14, as required by s 75(1) of the UTMA, in order to make administrative fund payments.
Failure to obtain approval for 2014-15 general fund budget
In contravention of Rule 8.5 of the Rules, the respondent failed to exercise reasonable skill, care and diligence by failing to obtain approval from the Owners Corporation for UP2296 for its general fund budget for 2014-15, as required by s 75(1) of the UTMA, in order to make administrative fund payments.
Failure to obtain approval for 2015-16 general fund budget
In contravention of Rule 8.5 of the Rules, the respondent failed to exercise reasonable skill, care and diligence by failing to obtain approval from the Owners Corporation for UP2296 for its general fund budget for 2015-16, as required by s 75(1) of the UTMA, in order to make administrative fund payments.
Failure to obtain approval for 2016-17 general fund budget
In contravention of Rule 8.5 of the Rules, the respondent failed to exercise reasonable skill, care and diligence by failing to obtain approval from the Owners Corporation for UP2296 for its general fund budget for 2016-17, as required by s 75(1) of the UTMA, in order to make administrative fund payments.
Making payments from administrative fund without approved general fund budget or authorisation – 2015-16
In contravention of Rule 8.5 of the Rules, the respondent failed to exercise reasonable skill, care and diligence by making payments during the period of 1 August 2015 to 31 July 2016 from the administrative fund without an approved general fund budget or authorisation by an ordinary resolution of the Owners Corporation for UP2296, as required by s 77(a) and (b) of the UTMA.
Failure to obtain approval to enter into management contract – 2016-17
In contravention of Rule 8.5 of the Rules, the respondent failed to exercise reasonable skill, care and diligence by acting without authority when carrying out functions of the Owners Corporation for UP2296 by failing to obtain approval from the Owners Corporation to enter into a management contract for the year 2016-17, as required by s 50(1) of the UTMA.
Contravention of s 24 of the Agents Act – s 41(1)(d) of the Agents Act
The respondent was ineligible to hold a licence for the period 24 December 2014 until 23 May 2016 because it did not have at least one director holding the same licence as required by s 24(3)(b) of the Agents Act.
HEARING DETAILS
FILE NUMBER: | OR 15/2018 |
PARTIES, APPLICANT: | Commissioner For Fair Trading |
PARTIES, RESPONDENT: | Murlton Pty Ltd Trading as ACT Strata Management |
COUNSEL APPEARING, APPLICANT | Ms K Katavic |
COUNSEL APPEARING, RESPONDENT | N/A |
SOLICITORS FOR APPLICANT | ACT Government Solicitor |
SOLICITORS FOR RESPONDENT | O’Connor Harris and Co |
TRIBUNAL MEMBERS: | Presidential Member MT Daniel |
DATES OF HEARING: | 17 October 2018 |
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