Ellison v Commissioner for Fair Trading

[2021] NSWCATAD 228

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Ellison v Commissioner for Fair Trading [2021] NSWCATAD 228

Hearing dates:

16 July 2021

Date of orders:

09 August 2021

Decision date:

09 August 2021

Jurisdiction:

Administrative and Equal Opportunity Division

Before:

Naida Isenberg, Senior Member

Decision:

The decision under review is affirmed

Catchwords:

LICENSING – real estate agent – class 1 licence -transitional provisions - mandatory requirements – carry on business

Legislation Cited:

Administrative Decisions Review Act 1997

Civil and Administrative Tribunal Act 2013 Corporations Act 2001 (Cth)

Property and Stock Agents Act 2002

Property and Stock Agents (Qualifications) Order 2019

Property, Stock and Business Agents Act 2002

Cases Cited:

McDonald v Director General of Social Security (1984) 1FCR 353

Nakad v Commissioner of Police, New South Wales Police Force [2014] NSWCATAP 10

Shi v Migration Agents Registration Authority [2008] HCA 31

Category:

Principal judgment

Parties:

Rex Ellison (Applicant)
Commissioner for Fair Trading (Respondent)

Representation:

Solicitors:
Applicant: self-represented
Respondent: Department of Customer Service

File Number(s):

2021/105751

Publication restriction:

nil

REASONS FOR DECISION

1. On 11 November 2020, the Applicant, Rex Ellison, lodged an application for a class 1 real estateagent licence under the Property and Stock Agents Act 2002 (the Act). On 3 February 2021, a notice of determination was issued advising him that his application had been refused. The decision was affirmed on internal review, and he now seeks review by this Tribunal.

Relevant legislation

2. Licensing of real estate and property services agents was previously governed by the Property, Stock and Business Agents Act 2002 (the old Act). The Act commenced on 23 March 2020 to provide stricter licensing, regulation and discipline of individuals, and corporate or other entities engaged in business in the real estate industry. These reforms aimed to enhance educational and professional standards across the industry and streamline the licensing framework. At its core, the amendments are intended to regulate the industry and to provide a measure of protection to consumers in their dealings with the industry.

3. A person cannot act or carry on the business of a real estate agent, unless the person is the holder of a real estate agent's licence: s 8(1)(a) of the Act. Section 14(1)(c) of the Act provides that a person is eligible to hold a licence only if the Secretary is satisfied that the person has the qualifications required for the issue of the licence or class of licence.

4. Section 15 of the Act provides, relevantly, that the qualifications required for the issue of a licence are such qualifications as the Minister may approve from time to time by order published on the NSW legislation website. On 23 March 2020 the Minister published the Property and Stock Agents (Qualifications) Order 2019 (the Order). The Order, relevantly, provides the qualification and experience requirements for the three new licence classifications: Certificate of Registration (“assistant agent”), class 2 licence (“licensed agent”) and class 1 licence (“licensee in charge”). A real estate agent's licence under the old Act transitioned to a Class 2 licensed agent under the Act.

5. Clauses 9 and 10 of the Order sets out “Pathways” by which a person may obtain a class 1 licence, without and with restriction condition respectively, and relevantly provide:

6. Clauses 9 and 10 of the Order sets out “Pathways” by which a person may obtain a class 1 licence, and relevantly provide:

9 Class 1 real estate agent's licence without restriction condition

(1)   A person has the qualifications required for the issue of a class 1 real estate agent's licence (the new licence) without a restriction condition if the person satisfies one of the pathways set out in this clause.

(2)   Pathway 1—holders of class 1 licence without restriction condition

The person has held a class 1 real estate agent's licence without a restriction condition within 12 months before making the application for the new licence.

(3)   Pathway 2—holders of class 1 licence with restriction condition

The person has—

(a) held a class 1 real estate agent's licence with a restriction condition within 12 months before making the application for the new licence, and

(b) satisfactorily completed the class 1 work experience requirements during a 2 year period, and

(c ) satisfactorily completed Certificate IV in Real Estate Practice.

(4)   Pathway 3—holders of class 2 licence without restriction condition

The person has—

(a) held a class 2 real estate agent's licence without a restriction condition for at least 2 years, and

(b) satisfactorily completed the class 1 work experience requirements during a 2 year period, and

(c) been issued with a relevant diploma from a registered training organisation.

(5)   Pathway 4 - holders of class 2 licence with restriction condition

The person has—

(a) held a class 2 real estate agent's licence for at least 2 years and the licence has been subject to a restriction condition during some or all of those 2 years, and

(b) satisfactorily completed the class 1 work experience requirements during a 2 year period, and

(c ) been issued with a relevant diploma from a registered training organisation, and

(d) satisfactorily completed Certificate IV in Real Estate Practice.

7. Clause 10, Part 2 “Class 1 licences”, of the Order provides:

10 Class 1 real estate agent’s licence with real estate agent restriction condition

(1) A person has the qualifications required for the issue of a class 1 real estate agent's licence (the new licence) with a restriction condition that the holder exercise no real estate agent functions other than real estate sale or leasing functions or on-site residential property manager functions (the relevant restriction condition) if the person satisfies one of the pathways set out in this clause.

(2) Pathway 1—holders of class 1 licence with relevant restriction condition

The person has held a class 1 real estate agent's licence with the relevant restriction condition within 12 months before making the application for the new licence.

(3)   Pathway 2—holders of class 2 licence with relevant restriction condition

The person has—

(a) held a class 2 real estate agent's licence with a relevant restriction condition for at least 2 years, and

(b) satisfactorily completed the class 1 work experience requirements during a 2 year period, and

(c ) been issued with a relevant diploma from a registered training organisation.

(4)   Pathway 3—transitional provision former licence holders

The person—

(a) holds a class 2 real estate agent's licence with the relevant restriction condition, and

(b)   applies for the class 1 real estate agent's licence with the relevant restriction condition within 12 months after the commencement day, and

(c)   immediately before the commencement day—

(i) held a real estate agent's licence for at least 2 years, or

(ii) held a real estate agent's licence and carried on business under the licence or was employed to be the person in charge of business carried on under a real estate agent's licence at a place of business.

8. Section 19 of the Act provides that an application for a licence must not be granted unless an applicant is eligible to be granted a licence (as provided by s 14).

Tribunal’s approach

9. Section 63 of the Administrative Decisions Review Act 1997 (ADR Act) provides that in determining an application for review the Tribunal is to make the correct and preferable decision having regard to the material before it, and any applicable written or unwritten law. The Tribunal makes its own decision in place of the Commissioner's, and there is no presumption that the decision of the Commissioner is correct: McDonald v Director General of Social Security (1984) 1FCR 353 at 357. The standard of proof that applies in these proceedings is the civil standard, that is, on the balance of probabilities. There is no onus of proof: Nakad v Commissioner of Police, New South Wales Police Force [2014] NSWCATAP 10 at [28]- [34]. Under s 28(2) of Civil and Administrative Tribunal Act 2013 (CAT Act) the Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice: s 38(2) of the CAT Act. It is well established that in considering an application for review the Tribunal is not restricted to a consideration of the material that was before the decision-maker, but may have regard to any relevant material before it at the time of the review: Shiv Migration Agents Registration Authority (Shi) [2008] HCA 31.

Evidence

10. The Applicant provided a copy of his Diploma of Property Service (Agency Management) dated 30 June 2021. He also provided a copy of the licence of Fort Coffey Pty Limited (the company), of which he is recorded as a director since 2002, with Daniel Latty as licensee in charge since 1 March 2021. He provided a full copy of his work experience log book. Other relevant documents were available to me in the documents filed under s 58 of the ADR Act.

11. In his evidence the Applicant said he had been a director of the company for about 20 years. He said that, before moving into real estate he had worked as a financial manager in a major bank, funding developments and necessarily engaging with real estate agents. Following his redundancy from the bank, he worked for about 3 years with a real estate company at Penrith which had formerly been a client. He was an investment consultant and managed the investment properties. He bought into the company and, in the course of 20 years, “did everything” in the real estate agency – including management of rent rolls of up to 800 properties, and some sales. In his capacity as property manager he has in fact appeared before the Tribunal, he said, in “several hundred” matters, on behalf of his owner clients. He also managed the office of about 20 staff up until about 12 months ago, when an office manager was engaged. His work as office manager included the supervision of staff and auditing the books. He referred to his responsibilities as a director of the licensed company.

12. Now the company is “de-merging”. There will be a new franchise, so he needs a “new” licence: see s 31(2) of the Act. He will take 3 staff with him.

13. He said that he had qualified “4 times” for a licence. In support of his internal review application he submitted that he had “qualified twice” for his licence – in 1995 and in 2020, having done a “partial refresher” in 2012. He provided a copy, relevantly, of his Advance Certificate in Property Agency from 1995, his Statement of Attainment in partial completion of Certificate IV in Property Services (Real Estate) dated 2012, and his Licensing Course (Real Estate) certificate dated 25 January 2012, and his Certificate IV in Property Services (Real Estate) dated 11 March 2020. Shortly before the hearing the Applicant provided a copy of his Diploma of Property Services (Agency Management) dated 30 June 2021, which is taken into account: per Shi.

Applicant’s licensing and employment history

14. The Applicant held a certificate of registration as a salesperson from 2 October 2001 to 22 March 2020. With the introduction of the Act, he transitioned to holding a certificate of registration as an assistant agent subject to a real estate sales or leasing condition, with an expiry date of 22 March 2024. On 22 May 2020 he was granted a class 2 real estate agent’s licence which is due to expire on 21 May 2022 with a condition restricting him to the exercise of real estate sales or leasing functions or on-site residential property manager functions.

15. The Applicant said he had only applied for a licence (as compared to a certificate of registration) 18 months ago. He said that the “exorbitant” cost of a licence was the reason he had not applied earlier.

CONSIDERATION

16. Section 14(1)(c) provides that a person is eligible to hold a licence only if the Secretary, and hence the Tribunal on review, is satisfied that the person has the qualifications required for the issue of the licence or class of licence. The qualification requirements are those set out in the Order. The Order sets out two different types of class 1 licence: without and with restriction condition – cl 9, and with restriction condition – cl 10. Clauses 9 and 10 of the Order set out “Pathways” by which a person may be eligible for each type of class 1 licence.

17. I turned to consider if the Applicant met any of those qualification requirements in relation to a class 1 licence. Despite there being a number of different Pathways set out in the Order in both clauses 9 and 10, some Pathways can immediately be discounted. For example, as the Applicant has never held a class 1 licence, Pathways with that requirement were not considered.

18. There was no dispute that the Applicant had been issued with a relevant diploma from a registered training organisation. Further, the Respondent conceded that the Applicant had satisfactorily completed the class 1 work experience requirements during a 2-year period.

19. It is important to note that, while an applicant may meet various criteria in respect of the Pathways, an applicant must meet every element of a Pathway in order for it to apply.

Clause 9

20. The Applicant has never held a class 1 licence. Hence, he cannot satisfy Pathway 1 or 2.

21. Having regard to the Respondent’s concessions, the only issue in applying in Pathway 3 was whether the Applicant held a class 2 real estate agent's licence without a restriction condition for at least 2 years. This is clearly not the case, as the Applicant was not granted a class 2 real estate agent’s licence until 22 May 2020, that is, many months short of the required 2 year period. In any event, his licence has a condition restricting him to the exercise of real estate sales or leasing functions or on-site residential property manager functions.

22. Pathway 4 applies where a person has held a real estate agent’s licence for at least 2 years and has been subject to a restriction condition for some or all of that period. This Pathway also has a 2 year requirement. However, cl 6 of the Order provides that for the purposes of determining how long a person has held a particular licence any period before the commencement day that the person held an equivalent licence is to be counted. For a class 2 real estate agent’s licence subject to a condition that the holder exercise no real estate functions other than real estate sale or leasing functions or on-site property manager functions – a real estate agent’s licence. The Applicant however, only held a certificate of registration as a salesperson from 2 October 2001 to 22 March 2020. Consequently, that period of time does not count towards the calculation of his 2 years as having held a class 2 licence.

Clause 10

23. As observed, the Applicant has never held a class 1 licence. Pathway 1 is therefore not available to him.

24. In relation to Pathway 2 the Applicant is required to have had a class 2 real estate agent's licence with a real estate agent restriction condition for at least 2 years. As observed above, although the Applicant held a certificate of registration as a salesperson for many years, he has not held a class 2 real estate agent’s licence (or its equivalent) for at least 2 years.

Pathway 3

25. Pathway 3 is more relevant to the Applicant’s circumstances because it contains transitional provisions which relate to persons who currently hold a real estate agent’s licence. In particular, it offers some alternatives to the strict new rules set out in Pathway 2.

26. There was no dispute that the Applicant holds a class 2 real estate agent’s licence with the relevant restriction condition: cl 10(4)(a), nor that he had applied for the class 1 licence with the relevant restriction condition within 12 months after the Act commenced: cl 10(4)(b).

27. Clause 10(4)(c) however only applies where, immediately before the commencement of the Act the person held a real estate agent’s licence. As discussed, the Applicant has not held a real estate agent’s licence for at least 2 years. Moreover, the Applicant’s real estate agent’s licence, as compared to his certificate of registration as an assistant agent, was not issued until 20 May 2020, that is, subsequent to the commencement day. The Applicant is unable to meet cl 10(4)(c)(i) and (ii). Consequently, the transitional provisions afforded by the Order cannot be met.

28. For the reasons given above, I have determined the decision under review was correct in refusing to grant the Applicant a class 1 licence under ss 19 and 14(1)(c) of the Act.

DECISION

29. The decision under review is affirmed.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 09 August 2021