Commissioner for Fair Trading v Rumble; Commissioner for Fair Trading v Lamaro (Occupational Discipline)
[2016] ACAT 159
•30 December 2016
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
COMMISSIONER FOR FAIR TRADING v RUMBLE
COMMISSIONER FOR FAIR TRADING v LAMARO (Occupational Discipline) [2016] ACAT 159
OR 29/2015 and OR 30/2015
Catchwords: OCCUPATIONAL DISCIPLINE – Estate Agents – licensed agent – registered salesperson – contravention of rules of conduct –seeking timely and appropriate instructions from lessor –responding promptly and attending to tenants’ requests for maintenance and repairs –adequacy or appropriateness of information about bond dispute – need to act in lessor’s interests – failure to record material details of bond dispute – requirement to take reasonable steps to ensure registered persons employed in business comply with the Act - agreed facts and characterisation of conduct – procedure for considering agreed submission as to penalty – consideration of factors – orders made consistent with agreed terms
Legislation: ACT Civil and Administrative Tribunal Act 2008 ss 55, 65, 66
Agents Act 2003 ss 41, 65, 127, 171
Subordinate
Legislation: Agents Regulation 2003 Schedule 8 cl 8.4(1), 8.5, 8.7, 8.34, 8.11
Cases cited:Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate; Construction, Forestry, Mining and Energy Union v Director, Fair Work Building Industry Inspectorate [2015] HCA 46
Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72
Tribunal: President L Crebbin
Date of Orders: 30 December 2016
Date of Reasons for Decision: 30 December 2016
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) OR 29/2015
OR 30/2015
BETWEEN:
COMMISSIONER FOR FAIR TRADING
Applicant
AND:
WAYNE RUMBLE
Respondent 1
(OR 29/2015)
KAREN LAMARO
Respondent 2
(OR 30/2015)
TRIBUNAL: President L Crebbin
DATE:30 December 2016
ORDER
The Tribunal Orders that:
1.Within 3 months of the date of these orders, Wayne Rumble is to make a payment to PR in the amount of $939.47.
2.Within 3 months of the date of these orders, Karen Lamaro is to make a payment to PR in the amount of $626.32
3.Within six months of the date of these orders, or such further period as is agreed with the applicant, Wayne Rumble must satisfy the applicant that he has successfully undertaken and completed the following training – or such other training as is reasonably required by the applicant – with a nationally registered training organisation:
a) CPPDSM4002A (Apply knowledge of state or territory legislative and regulatory framework);
b) CCPPDSM4020 (Present at Tribunals);
c) CCPPDSM4046A (Manage tenancy disputes); and
d) BSBRKG304B (Maintain business records).
4.Within six months of the date of these orders, or such further period as is agreed with the applicant, Karen Lamaro must satisfy the applicant that she has successfully undertaken and completed the following training – or such other training as is reasonably required by the applicant – with a nationally registered training organisation:
a) CPPDSM4002A (Apply Knowledge of state or territory legislative and regulatory framework);
b) CCPPDSM4020 (Present at Tribunals);
c) CCPPDSM4046A (Manage tenancy disputes); and
d) BSBRKG304B (Maintain business records).
5.Any training undertaking in satisfaction of orders 3 and 4 above is in addition to any training which the respondents are required to undertake to satisfy continuing professional development requirements under the Agents Act 2003 (ACT) (the Agents Act) and the Agents Regulation 2003 (the Regulations).
6.Wayne Rumble is reprimanded in accordance with section 66 (2)(a) of the ACT Civil and Administrative Tribunal Act 2008.
7.Karen Lamaro is reprimanded in accordance with section 66(2)(a) of the ACT Civil and Administrative Tribunal Act 2008.
8.Wayne Rumble is to pay the filing fee paid by the applicant for matter OR 15/29 of $313.00 within 6 months.
9.Karen Lamaro is to pay the filing fee paid by the applicant for matter OR 15/30 of $313.00 within 6 months.
10.In the event that the respondents failing to comply with these orders, the applicant has liberty to apply to the tribunal on 7 days notice.
11.The name of the lessor in orders 1 and 2 above be redacted when this decision is published.
………………………………..
President L Crebbin
REASONS FOR DECISION
The Commissioner for Fair Trading filed applications seeking disciplinary orders in relation to Mr Wayne Rumble, who at the relevant time was a registered salesperson and Ms Karen Lamaro, who was a licensed agent. Ms Lamaro was the agent responsible for the management of the business of Rumbles Realty Pty Ltd (the business). The business was also licensed as an agent and employed Mr Rumble.
In brief summary, the applications alleged that Mr Rumble breached various rules of conduct for agents while he was responsible for managing a property pursuant to an agency agreement made by the owner of the property with the business. Further, it was alleged that Ms Lamaro breached rules of conduct by failing to take reasonable steps to ensure that Mr Rumble and the business complied with the requirements of the Agents Act 2003 in respect of the management of the property.
Because the applications arose from the same facts the tribunal ordered that the matters be heard together. The parties agreed about the relevant facts and about what the outcome of the applications should be. An agreed statement of facts, an agreement about how the conduct disclosed by the facts should be characterised and a joint proposal about orders, was filed with the tribunal. A hearing was held to consider the documents. I asked the parties a number of questions about the documents, in particular about the proposed orders and commented on the agreed statement of facts as drafted. The questions concerned whether one of the proposed orders was within the tribunal’s power to make, the practical operation of the proposed orders particularly in relation to undertaking courses, whether the orders should include a reprimand, whether each respondent should be required to pay the applicant the filing fee for the application pursuant to section 48 (2)(a)(i) of the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act) and what time should be allowed for payments due under the orders.
At the end of the hearing I told the parties what I proposed to do in response to the application and asked each to comment. I indicated that a number of changes would be made to the proposed orders, including the addition of a reprimand, a requirement for the payment of the filing fee and timeframes for payments. I asked that the applicant re-draft and re-file the documents submitted in accordance with these indications and that the respondents consider the re-filed documents and indicate any objection. I said I would then consider the documents in chambers and would make orders. I acknowledge that I have taken a very long time to do this and I apologise to the parties for my delay.
The orders made today have some small changes compared to the draft proposed orders filed. The names of the respondents have been included in the orders, a time frame of 6 months has been added for the respondents to pay the filing fee in accordance with the discussion at the hearing, a mechanism has been included to enable the parties to agree a longer time frame for completion of the identified courses just in case some of the courses are not immediately available and the notice period for re-listing has been increased from 3 to 7 days. I have added an order for the name of the lessor to be redacted when the orders are published in accordance with a request of the applicant. The name is relevant for enforcement purposes but not otherwise.
The respondents were greatly concerned about the orders and the decision being made public. Mr Rumble said that previous matters in relation to him had been incorrectly reported in the media and other agents had used those reports unfairly, to gain advantage in business. Publication resulted in past matters being an on-going liability and resulted in the respondent feeling as though he was subject to on-going punishment.
I acknowledge this concern. Disciplinary orders are not intended to be punitive. But they are intended (among other purposes) to discourage the person disciplined, and others in the same occupation, from acting in a similar way in the future. They have an important educative purpose and this cannot be achieved if details of orders and the circumstances in which they are made are not made public.
A complaint can be made about media reports that are inaccurate or not presented with reasonable fairness and balance with the relevant publisher, or if necessary with the Australian Press Council. One would hope that agents use reports about disciplinary proceedings as an opportunity to reflect on their own practice rather than an opportunity to obtain a business advantage. The respondents’ concern cannot outweigh the public interest in knowing about proceedings such as these. With this concern in mind however, I note that the respondents engaged in the disciplinary process in an open, co-operative and reasonable manner.
Process for considering agreed submissions in occupational disciplinary proceedings
Disciplinary matters involve the imposition of civil penalties. The tribunal is required to exercise a discretionary judgment - it must satisfy itself that grounds for discipline exist and if so satisfied, must form its own conclusion about the orders that should be made. However, parties can reach agreement about all or some of the necessary findings and about the orders or penalties that they believe are appropriate.
A joint submission can be made setting out the agreements for the tribunal to consider. This approach to civil penalty proceedings was endorsed as permissible by the High Court in Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate; Construction, Forestry, Mining and Energy Union v Director, Fair Work Building Industry Inspectorate [2015] HCA 46.
The tribunal’s task is not to simply approve what is put before it, as it might with consent orders requested by parties in civil dispute matters,[1] but to scrutinise the submissions and make its own decision about whether the proposed orders or penalties are within power and are appropriate. Some cases may be sufficiently straightforward for this to be done on the papers in chambers, but it is preferable that a public hearing be listed so that the proposal can be properly tested in a way that is consistent with the principles of open justice. Protection of the public is the primary purpose of regulatory regimes and civil disciplinary proceedings, with a focus on specific and general deterrence, support that purpose. Holding a public hearing is consistent with the public interest in civil penalty proceedings.
[1] Section 56 (b), ACAT Act gives the tribunal power to make orders with the consent of the parties to an application
In a hearing the parties can explain the process of reasoning that justifies the proposed orders. The tribunal can satisfy itself more easily as to the accuracy of any agreement about facts. The tribunal may need to request further evidence or information.[2]
[2] See the analysis of the decision of the Full Court of the Federal Court in Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 and the discussion of the nature of civil penalty proceedings and the procedures that should be adopted for them by the majority in Commonwealth of Australia v Director, Fair Work Building Industry InspectorateConstruction, Forestry, Mining and Energy Union v Director, Fair Work Building Industry Inspectorate [2015] HCA 46 at [31]-[32] and [48] to [61]
It is usually necessary for the person who is the subject of the proposed penalty to participate in the hearing so that the tribunal can be satisfied that the penalty, and the reason for it, is understood by the person – this is relevant when the tribunal is considering factors such as the likelihood of future contravention. If a proposed penalty includes an undertaking, or some action on the part of the respondent, the tribunal should be able to satisfy itself that the undertaking is understood and properly given and that the proposed action can in fact be done.
Section 55 of the ACAT Act is usually regarded as enabling the tribunal to make orders or decisions in disciplinary proceedings “by consent”. The section permits the tribunal to make a decision, by order, in accordance with agreed terms, reduced to writing and signed, if the tribunal is satisfied that an order or decision in, or consistent with, the agreed terms would be within the powers of the tribunal and appropriate for the tribunal to make (emphasis added). Reliance on section 55 as the source of power to make orders without holding a hearing, or without completely dealing with the application at a hearing, will be appropriate in many cases. The decision does not need to be in the exact terms put forward by the parties – it is sufficient that the decision (or order) is consistent with the agreed terms. This case is an example of orders that are consistent with, rather than in, the agreed terms. Sometimes, as a result of the inquisitorial hearing process adopted, the tribunal may be more accurately described as making orders following a hearing, rather than making orders pursuant to section 55 of the ACAT Act.
Consideration in this Case
The applications filed in this matter were supported by a considerable volume of documents that established the agreed facts and also by a record of previous proceedings against Mr Rumble and the business. Having review the supporting documents I am satisfied that the agreement about the facts set out at ‘A’ below is accurate and further, that the facts establish breaches of rules of conduct as set out at ‘B’ below.
Contravention of a rule of conduct by a licensed agent[3] and by a registered salesperson[4] is a ground for occupational discipline. Section 65 of the ACAT Act sets out the factors that the tribunal must take into account when considering what occupational discipline to use when a ground for occupational discipline exists. Each factor is considered below.
[3] Section 41(1)(b), Agents Act 2003
[4] Section 65(1)(b), Agents Act 2003
Having reviewed the facts and the supporting documents, I am satisfied that the respondents did not take steps that were reasonably open to them, such as communicating with the lessor in a timely manner and making timely arrangements to attend to repair requests, to avoid these breaches.
Occupational discipline has been previously used in relation to Mr Rumble, but it cannot be said that the previous matters involved acts similar to the contraventions that occurred in this matter. The applicant’s representative contended that these proceedings were generally similar to earlier proceedings because the earlier matters involved work in the real estate industry. I don’t accept that this is what section 65(3)(b) is about. The tribunal is required to consider whether occupational discipline has been “used against the person for a similar act”. When this paragraph is read in the context of subsection 65(3) as a whole, it is clear that the act or action referred to is the contravention that is the ground for occupational discipline in the case before the tribunal. The previous proceedings against Mr Rumble did not concern contraventions similar to those identified in this application.
No occupational discipline has previously been used against Ms Lamaro.
I acknowledge that Mr Rumble attempted to mitigate the effect of his contravention as set out at paragraph 20 of the agreed facts but that his attempts were unsuccessful. I note that at the time of the hearing, neither Mr Rumble nor Ms Lamaro had apologised to their client, nor paid compensation for her losses.
I accept that the contraventions that occurred here had a significant impact on the lessor who had a judgment made against her and who had the embarrassment of Sheriff’s officers contacting her about seizure of property. She was penalised because her obligations to her tenants were not discharged by the agents she had contracted to undertake that work. The tenants were also adversely affected by the respondents’ failure to ensure that the lessor’s obligations were discharged as required by the Residential Tenancies Act 1997.
The contraventions that are the subject of these applications are different in nature from earlier matters in relation to Mr Rumble. It is not possible in my view to draw any reliable conclusion about the likelihood that either respondent will act in a way that is a ground for occupational discipline in the future, save to note that the facts strongly suggest a level of disorganisation and a neglect of communication that does not augur well for the future. The management of rental properties is demanding and requires agents to give prompt attention to communication with tenants and with the lessors on whose behalf they act, and to promptly organise inspections and repairs if the lessor’s obligations under the Residential Tenancies Act 1997 are to be met and the lessor’s interests protected.
Finally, I take into account the kind of discipline the applicant has sought. The applicant’s representative submitted that it was important that there be an order under s 66(2)(h) of the ACAT Act, requiring the respondents to pay an amount to the lessor and explained the reasons for that, and an order under s 66(2)(c) requiring that further education be undertaken. The orders made reflect those views – in other circumstances I would have made an order requiring the respondents to pay an amount to the Territory, but I accept the applicant’s concern that it is appropriate in this case to use these orders to assist to mitigate the complainant’s loss. I have included an order under section 48(2)(a)(i) of the ACAT Act for payment to the applicant of the filing fee, to assist the regulator to recoup some of the cost of bringing these matters to the tribunal.
I am satisfied that orders should be made in the terms set out above. The orders are consistent with the terms agreed by the parties and are appropriate in the circumstances of this matter.
.................................................
President L Crebbin
‘A’
AGREED STATEMENT OF FACTS
The parties to these proceedings agree and admit to the following facts.
Preliminary matters
1.As at 30 August 2010:
(a) Rumbles Rea1ty Pty Ltd (ACN 125 563 644) was a licensed agent for the purposes of the Agents Act 2003 (ACT) (the Agents Act) with licence number 18401204.
(b) The respondent to matter OR15/30 (KL) held a licence, number 18401257, issued under s. 33(2) of the Agents Act and she was therefore a licensed agent for the purposes of the Agents Act.
(c) KL was the agent responsible for the day-to-day management of Rumbles Realty Pty Ltd and in-charge at its place of business.
(d) The respondent to matter OR15/29 (WR) was a registered salesperson for the purposes of the Agents Act with registration number 18102391.
(e) WR was employed by Rumbles Realty Pty Ltd as a registered sales person.
Commencement of Lease
2.On 30 August 2010 the Lessor entered into an agency agreement (the Agency Agreement) with Rumbles Realty Pty Ltd which provided for Rumbles Realty Pty Ltd to represent her in relation to management and leasing of the property she owned (the Property).
3.WR was the registered salesperson with principal responsibility for managing the Property and acting for and on behalf of the Lessor under the Agency Agreement.
4.In November 2011 Rumbles Realty Pty Ltd represented the Lessor in a transaction with the Tenants which resulted in the Tenants taking a 12 month lease of the Property commencing 13 November 2011 (the Lease).
Maintenance of Property
5.On 14 November 2011, 22 November 2011, 29 November 2011, 12 December 2011, 14 January 2012, and 27 February 2012 the Tenants sent a series of emails to Rumbles Real Estate Pty Ltd which identified repair and maintenance that the Property required.
6.Rumbles Real Estate Pty Ltd did not respond to or address those emails until early March 2012 when it attended to the maintenance issues which the emails described.
7.On 22 June 2012, 29 June 2012, and 6 July 2012 the Tenants notified Rumbles Realty Pty Ltd that a burglary of the Property had caused damage to the Property's back and screen doors compromising its security, and that consequently the doors required repair or replacement.
8.On or after 16 July 2012 the back door of the Property was replaced.
9.On 23 July 2012 the Tenants sent a further email to Rumbles Realty Pty Ltd requesting that the Property's screen door be replaced.
10.On or after 30 July 2012 the Property's screen door was repaired.
Tribunal Proceedings
11.On or about 16 November 2012 the lease expired and the Tenants vacated the Property.
12.On 19 November 2012 the Tenants applied to the Office of Regulatory Services for a full refund of the $2,460.00 bond which they had lodged in respect of the Lease, however on 11 December 2012 Rumbles Realty Pty Ltd lodged a form of Refund of Bond with the ORS claiming that $243.66 of the Bond should be refunded to the Lessor (the Bond Dispute), and the ORS referred the dispute to the ACT Civil and Administrative Tribunal (the Tribunal).
13.On 17 December 2012 the Tribunal served Rumbles Realty Pty Ltd with a Notice to the Parties which indicated that a preliminary conference in respect of the Bond Dispute was scheduled for 21 January 2013.
14.On 15 January 2013, in response to queries the Owner made regarding whether she should pay outstanding water consumption bills:
(a) WR sent the Lessor an email which stated that “normally you pay the full amount and the consumption part is reimbursed to you. These Tenants are being difficult and we are going to the Tribunal next week”; and
(b) When asked by the Lessor in a further email if she should attend the Tribunal, WR replied with an email stating “no I will attend”.
15.The Applicant has alleged that the email exchange of 15 January 2013 was the only occasion prior to September 2013 on which WR or Rumbles Realty Pty Ltd made any reference to tribunal proceedings in relation to the Lease and the Lessor was not otherwise informed about the Bond Dispute.
16.On 21 January 2013, Registrar Thompson listed the Bond Dispute for hearing on 22 April 2013 at 10 am and ordered (inter alia) “any representative who is not a lawyer” to file a notice of representation.
17.The Tenant lodged:
(a) An “Application for Resolution of Tenancy Dispute” on 25 February 2013, which indicated that the amount of $243.46 in bond moneys was in dispute.
(b) A “Residential Tenancy Response/Submission Form” on 27 February 2013 making a counterclaim against the Lessor in the amount of $2,182.50 on the basis that the Lessor had failed to maintain the Property.
18.Rumbles Realty Pty Ltd did not lodge any documentation with the Tribunal or attend the hearing of the matter on 22 April 2013
19.The Tribunal made ex parte orders (the ACAT Orders) which required, inter alia, that:
(a) The Tenants pay any outstanding water consumption account (provisionally calculated to be $29.37).
(b) The whole of the remainder of the bond, $243.46, be disbursed to the Tenants.
(c) The Lessor pay the Tenants the “total sum of $1,227.00” for failing to maintain the Property.
(d) The Lessor repay the Tribunal's filing fee to the Tenants.
20.Although Rumbles Realty Pty Ltd applied to have the Bond Dispute reheard on two occasions the applications were both rejected by the Tribunal without a hearing.
21.On 4 July 2013, the Federal Court ordered that Rumbles Realty Pty Ltd be wound-up, KL commenced operating the business formerly operated by Rumbles Realty Pty Ltd as a sole trader under the name of Rumbles Real Estate, and employed WR as a registered sales person of that business.
22.On 12 August 2013, on the application of the Tenants, the ACT Magistrates Court made a Sale & Seizure Order against the Lessor to enforce the ACAT Orders.
23.On 3 September 2013 the Sherriff of the ACT Magistrates Court informed the Lessor of the Sale & Seizure Order against her. Prior to that contact from the Sherriff. The Lessor was not aware of the Bond Dispute, the ACAT Orders, or the Sale & Seizure Order.
24.On 18 September 2013 the Lessor paid $1,348.80 (being the amount order by the ACT of $1,227.00, plus interest of $33.80, plus the Magistrate Court enforcement officer's fees and costs of preparing the order $88.29) into the ACT Magistrate Court in satisfaction of the Sale & Seizure Orders.
Record Keeping
25.On 29 October 2013 the Lessor lodged a complaint with the Applicant alleging, in substance, that Rumbles Real Estate Pty Ltd failed to properly discharge its responsibilities under the Agency Agreement.
26.From December 2013 to May 2014 the Applicant's staff liaised with Rumbles Realty Pty Ltd in regards to the Lessor’s complaint.
(a) The Applicant's staff made five requests to WR and KL for records or information in relation to Rumbles Realty Pty Ltd's management of the Lease and Property and the conduct of the Bond Dispute.
(b) The Respondent has not retained any records which would enable it to adequately respond to those requests.
Prior Infringements
27.On two prior occasions WR has been subject to disciplinary or related orders regarding his conduct as a registered sales person (as identified in Part B of the application in Matter OR 15/29).
28.Rumbles Real Estate Pty Ltd has been subject to three prior orders regarding its conduct as a licensed agent (as identified in Part B of the application in Matter OR 15/29).
29.KL has not been subject to any prior orders regarding her conduct as a registered sales person or licensed agent, but she was the agent in charge of the place of Rumble's Real Estate Pty Ltd's business and Rumble Real Estate Pty Ltd employed WR on each of the occasions on which the incident giving rise to the disciplinary orders against WR and Rumble Real Estate Pty Ltd occurred.
‘B’
AGREED CHARACTERISATION OF CONDUCT
1.The parties agree that the facts described above in Part A:
(a) Demonstrate that WR did not:
(i)Seek appropriate and timely instructions from the Lessor with respect to maintenance issues at the property and/or address those maintenance issues in an appropriate and timely fashion or did not receive appropriate instructions from the Lessor.
(ii)Provide the Lessor with adequate or appropriate information about the Bond Dispute, seek the Lessor’s instructions with respect to the conduct of the Bond Dispute, or appropriately represent the Lessor's interests.
(iii)Record material details in relation to the Lease, the Bond Dispute or the conduct of the matter.
(b) Constitute a contravention of the rules of conduct (the Rules of Conduct) established under s 171 of the Agents Act and schedule 8 of the Agents Regulation 2003 (Schedule 8) on the part of WR for:
(i)Failing to act honestly, fairly and professionally with all parties in a transaction as required by clause 8.4(1) of Schedule 8;
(ii)Failing to exercise reasonable skill, care and diligence as required by clause 8.5 of Schedule 8; and
(iii)Failing to promptly respond to and attend to all requests by a tenant, for maintenance of, or repairs to; the property as required by clause 8.34 of Schedule 8.
(iv)Failing to act in the client's best interest at all times unless it would be contrary to the Act or otherwise unlawful to do so as required by cl. 8.7 of Schedule 8;
(v)Failing to record material details in relation to the Bond Dispute or the conduct of the matter as required by s. 127(1) of the Agents Act.
(c) Constitute a contravention of the Rules of Conduct on the part of KL for failing to take reasonable steps to ensure that WR and/or Rumbles Realty Pty Ltd complied with the Agents Act as required cl. 8.11 of Schedule 8.
2.Those matters therefore constitute grounds for occupational discipline against both WR and KL for the purposes of s. 65(1) of the ACAT Act.
Sgd by parties.
HEARING DETAILS
FILE NUMBER: | OR 29/2015 and OR 30/2015 |
PARTIES, APPLICANT: | Commissioner for Fair Trading |
PARTIES, RESPONDENT: | Wayne Rumble OR 29/15 Karen Lamaro OR 30/15 |
SOLICITORS FOR APPLICANT | ACT Government Solicitor |
SOLICITORS FOR RESPONDENT | N/A |
TRIBUNAL MEMBERS: | President L Crebbin |
DATES OF HEARING: |
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