Eric John Griggs v Commissioner for Consumer Affairs No. SCGRG 94/488, SCGRG 94/1981 Judgment No. 4980 Number of Pages 17 Licences Real Property

[1995] SASC 4980

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA OLSSON J

CWDS
Licences - real property - Two appeals against order made by the Commercial Tribunal.

First appeal - Tribunal appointed administrator as a result of insolvency - administrator required documentation - appellant failed to provide it - appellant found guilty of an offence - Tribunal adjourned question of penalty to allow appellant to provide documentation - appellant did not - Tribunal fined appellant and disqualified him from holding any form of licence or registration under the Land Agents, Brokers and Valuers Act "for a period of 10 years and thereafter until further order" - Tribunal in error - order for disqualification in those terms outside Tribunal's power - Tribunal in error in imposing substantial fine without an appropriate investigation of the appellant's means - Tribunal penalised appellant for conduct other than that which was the proper subject of its enquiry and occurred subsequent to its findings on that enquiry - breach of principles of natural justice - appeal allowed - orders set aside.

Second appeal - Complaint alleging appellant had acted negligently or unfairly in the course of conducting business as a licenced landbroker - tax minimisation strategy - successful on six prior occasions - unsuccessful on occasion the subject of the enquiry - strategy the product of a specific enquiry of the Land Tax Department - appellant entitled to have regard to what had already been accepted by the Department - no suggestion of fraud on part of appellant - arm's length transactions - each purchaser represented by independent broker - duty of brokers to make all usual investigations and raise appropriate requisitions to protect respective clients - appellant owed no duty to purchasers - appellant owed duty to vendor - no carelessness demonstrated - appeal allowed.

Land Agents, Brokers and Valuers Act, 1973 ss66 and 84 and Land Tax Act ss66, 15 and 42. Kirkwood v Vardon (Prior J, 15 October 1992, unreported); Fry v Bassett (1986) 44 SASR 90; The Queen v Rahme (1989) 43 A Crim R 81 and Briginshaw v Briginshaw and Anor (1938) 60 CLR 336, applied. Herrmann v The Nurses Board of South Australia and Anor (1993) 61 SASR 325; T v The Medical Board of South Australia (1992) 58 SASR 382 and Paterson v Commissioner for Consumer Affairs (1988) 148 LSJS 275, discussed.

HRNG ADELAIDE, 18 January 1995 #DATE 28:2:1995 #ADD 14:3:1995

Counsel for appellant:     Mr G K Patel

Solicitors for appellant:    Patel and Co

Counsel for respondent:     Ms A V Mclean

Solicitors for respondent: Crown Solicitor

ORDER
Appeals allowed.

JUDGE1 OLSSON J These reasons relate to what are two separate appeals by the appellant against orders made by the Commercial Tribunal ("the Tribunal") imposing periods of disqualification from holding a licence or registration as a landbroker, pursuant to the provisions of the Land Agents, Brokers and Valuers Act, 1973 ("the Act") and also imposing substantial monetary fines.

2. The proceedings to which the appeals relate arise from two quite separate complaints lodged with the Tribunal. It is necessary to recapitulate the relevant narrative facts as to each.

3. The first matter which came before the Tribunal, in point of time, was a complaint filed by the Commissioner for Consumer Affairs on 11 October 1991. This recited that the appellant had held a landbroker's licence since 4 February 1965, but that, on 20 March 1991, the Tribunal had, pursuant to section 66(1)(c) of the Act, appointed one Drabsch to administer his trust accounts. This was consequent upon the appellant's insolvency. It was averred that, on 5 July 1991, Drabsch had required the appellant to produce certain trust ledgers, journals and other documentation, but the appellant had failed to do so.

4. In accordance with section 84 of the Act the Tribunal conducted an enquiry into this complaint. In written reasons published by it on 16 June 1992, it recorded that, although, over time, the appellant had supplied some records, Drabsch had still not received all files which he required for verification purposes. No evidence of trust account deficiencies had been discerned.

5. The Tribunal went on to say that the appellant had closed his landbroking business on 1 September 1991 and transferred his incomplete files to another broker. It noted that he was no longer practicing as a landbroker and had surrendered his licence. He had, it was said, offered to continue to search for missing records and assist Drabsch as best he could. He had thought that all files and records had in fact been handed over.

6. It was said that part of the problem was that records had not been delivered in a logical sequence, but had been simply bundled up and handed over. Drabsch had, in effect, experienced problems in sorting them out.

7. The Tribunal expressed sympathy with the appellant because he had been under great stress because of business problems. These had resulted in his bankruptcy on 26 November 1991. It also accepted that health problems had been "a very significant factor in his failure to comply with" the Administrator's requirement. He had, however, tended to "bury his head in the sand" at times, due to stress.

8. The Tribunal was driven to the conclusion that there had been a failure to comply with the requirements of the Administrator which constituted an offence constituting proper cause for taking disciplinary action. On the other hand the Tribunal bore in mind that:-
    . Drabsch had found the appellant's record keeping to have been
     quite good
    . no trust account deficiencies had been discovered
    . there was no significant complaint concerning the mode of
     management of the trust account
    . due regard had to be given to the impact of the appellant's
     medical condition

9. It was initially decided to adjourn the question of penalty for three months to afford the appellant an opportunity of assisting Drabsch in completing the administration of the relevant trust accounts.

10. The matter came on again on 22 May 1992.

11. At that time Drabsch reported that the appellant had done nothing more to assist him, despite his undertaking to do so. The appellant did not attend on the due date. It was later said that this was due to his ill health.

12. The Tribunal took a very jaundiced view of that situation. It commented:-
    "The respondent has shown a blatant disregard for his obligations
    as a licensee. He has failed to comply with requests by the
    administrator for the provision of information and he has now
    failed to honour an undertaking given by him to the Tribunal.
    The matter therefore calls for disciplinary action which will
    not only serve to mark our condemnation of the respondent's
    conduct, but which will also serve as a deterrent to others who
    may be minded to display the same cavalier disregard for statutory
    obligations as the respondent has displayed.
    We must also have regard to the fact that the respondent's actions
    indicate that he is no longer a person who may safely be entrusted
    with the duties pertaining to a licence or registration under the
    Land Agents, Brokers and Valuers Act, and ensure that the public
    is protected against any further neglect of duty by the
    respondent."

13. It thereupon fined the appellant $2,500 and disqualified him from holding any form of licence or registration under the Act "for a period of 10 years and thereafter until further order". It did so, notwithstanding that it had earlier intimated that a substantial fine would ordinarily be appropriate, without first advising him that disqualification was in contemplation.

14. On 26 June 1992, having been advised of that situation, the appellant wrote to the Tribunal complaining of the severity of the decision and seeking "the approval of the Tribunal to a hearing of appeal against the severity of the discipline". On 30 June 1992 he further wrote to seek time to pay the fine.

15. The Tribunal listed the application for leave to appeal on 16 July 1992. That hearing was subsequently adjourned to 28 August 1992. It was further adjourned to 25 September 1992 and then to a date to be fixed because of the appellant's continuing ill health.

16. The matter eventually came on for hearing on 12 May 1994, when the Tribunal refused leave to appeal. In so doing the Chairman conceded that the order which had been made as to disqualification was in discord with the judgment in the matter of Kirkwood v Vardon (Prior J, 15 October 1992, unreported). He said that leave would not be required as to that, because it was a question of law.

17. On 2 December 1994 the solicitor for the appellant lodged an appeal on the grounds that:-
    "1. That the Tribunal erred in law in imposing the
    disqualification pursuant to Section 85 sub-section (1)
    sub-paragraph (d) of the Land Agents, Brokers and Valuers Act 1973
    in that the order of disqualification for a period of ten years
    and thereafter until further order is outside the power of the
    Tribunal.
    2. The penalty imposed is otherwise manifestly excessive in all
    the circumstances."

18. By order of a Master time for lodgment of that appeal was extended.

19. As to the second ground of appeal the appellant further pleaded:-
    "The Appellant states that in all the circumstances the
    penalty is disproportionate to the gravity of the conduct of
    the Appellant and in particular having regard to the following:-
    (a) There was no deficiency or fraud in relation to the trust
    account but that the administrator needed some missing files in
    order to satisfy him that movement of funds into and out of the
    trust account is supported by the prime source document.
    (b) The Tribunal having decided that the appropriate disciplinary
    action would be a fine and that in determining the amount of fine
    it would take into account the Appellant's conduct and the extent
    of his co-operation between now and the time the Tribunal
    determined the disciplinary action, erred in imposing a
    disqualification and a fine.
    (c) The Appellant was unable to comply with his undertaking to
    search for missing files or to help reconstruct the records before
    the date the Tribunal made the order of disqualification because
    of nervous breakdown he suffered and consequently was not mentally
    fit until January/February 1993 and therefor (sic) his failure to
    comply was not because of any disregard for his obligations as a
    licensee."

20. In addressing this first appeal it must at once be said that there is no question but that the Tribunal fell into error in the order which it made. As was held in Kirkwood v Vardon, it was beyond its power to make an order for disqualification in the terms which it did. The order here sought to be impugned was in precisely similar terms to that in issue in that case.

21. The Tribunal further patently fell into error in imposing a fine of $2,500. It is a moot point whether, in exercising its penal or disciplinary jurisdiction, the Tribunal can be said to be "a court of criminal jurisdiction" to which section 13 of the Criminal Law (Sentencing) Act, 1988 applies. However, it is unnecessary to decide that point, as section 13 does little more than codify what was the pre-existing general law.

22. As I pointed out in Fry v Bassett (1986) 44 SASR 90 at 92-3:-
    "... if it is appropriate to impose a fine the quantum of it must
    in any event be related to the means of a defendant in some
    logical manner, particularly in the case of persons who are of
    very limited resources. Whilst fines must, in general, constitute
    a proper reflection of the gravity of the offending, nevertheless
    subjective consideration must be given to what level of fine will
    act as a sufficient level of punishment to a defendant in his
    particular circumstances. A modest fine towards the lower end of
    a permissible spectrum may well constitute a very salutary penalty
    and impose significant hardship on an impecunious person whereas,
    in the case of a person of means, a penalty higher along the
    relevant spectrum of reasonable tariffs may be more appropriate.
    This feature has been touched on by me in Frost v Porter (1984)
116 LSJS at 456 and Williams v Fauser (unreported, No 9239). Such
    considerations are also adverted to in M Daunton-Fear, Sentencing
    in South Australia (1980), pp193-194."

23. A similar concept was adopted by the Court of Criminal Appeal (NSW) in The Queen v Rahme (1989) 43 A Crim R 81. Indeed, in that case it was accepted that a substantial fine ought not to be contemplated without an appropriate investigation of the offender's means.

24. In the instant case the Tribunal knew nothing, of a definitive nature, of the means of the appellant and took no steps to find out. What it did know, however, was that he had been declared bankrupt and had experienced what were said to have been significant medical problems. Those facts alone ought to have placed it on notice that, prima facie, the appellant had little financial capacity.

25. I am informed that, at the present time, the appellant earns about $450 per week as an inspector and has day to day basic living overheads of the order of not less than $350, without allowing for travelling costs and incidentals. It is clear that he has, and, at all material times, has had, minimal capacity to pay a substantial monetary fine.

26. With respect, it seems to me that the Tribunal became so incensed with what it perceived to be the appellant's lack of co-operation that, to some extent, it lost its sense of proportion.

27. Be that as it may, the combination of errors above identified vitiate the decision of the Tribunal and it falls to me to reconsider the question of penalty afresh.

28. In so doing it is necessary to bear firmly in mind the conduct which attracted the penalty - ie the conduct which was the subject of the findings upon the holding of the inquiry by the Tribunal pursuant to section 85 of the Act. As the Tribunal itself pointed out in its initial reasons:-
    "We have a great deal of sympathy with Mr Griggs because he has
    clearly been under a great deal of stress as a result of business
    problems which eventually resulted in him being declared bankrupt
    on 26 November 1991. We are satisfied from a medical report
    tendered that the medical condition of Mr Griggs has been a very
    significant factor in his failure to comply with the requirements
    of the administrator. We accept what Mr Griggs has put to us that
    at no time has he wantonly held back information, at no time has
    he been reluctant to comply with the requirements of the
    administrator, and that he has acted as appropriately as he could
    have in view of the circumstances. He did concede, however, that
    because of the stress under which he found himself at the relevant
    times, he did tend to bury his head in the sand and hope that some
    of the problems might go away, rather than face up to them.
    We are satisfied that the respondent has failed to comply
    forthwith with requirements of the administrator of his trust
    accounts and that an offence has therefore been committed under
    section 74(a) of the Act. We therefore must find, as a
    consequence of that, that there is proper cause for taking
    disciplinary action against the respondent on the basis that he
    has been guilty of conduct that constituted a breach of the Act,
    which is a ground for disciplinary action pursuant to section
    85a(4)(b)(i) of the Act.
    The difficulty which confronts us is the form of disciplinary
    action which is appropriate in the circumstances of this case.
    We wish to place on record some general considerations that we
    would ordinarily take into account in matters such as this.
    Where a licensed person has failed to produce records, and the
    records are available for production, and that person still holds
    the licence at the time of the inquiry, we would suggest, without
    wishing to fetter the discretion of any future Tribunal which
    hears such a matter, that the appropriate order would be to
    suspend the person's licence until such time as the records are
    produced and the requirements of the administrator are complied
    with. That, of course, is not the case here for two reasons:
    first, Mr Griggs no longer has a licence, and secondly, he is not
    sure whether the records are available to be produced or, indeed,
    whether the administrator already has them.
    Further, we consider that, because of the seriousness of a failure
    to comply with section 74(a), the disciplinary action imposed in
    consequence of such a failure should ordinarily be a quite
    substantial fine.
    However, we cannot ignore the circumstances in which this has all
    arisen and we must look at each case on its merits. Those
    circumstances include the fact that Mr Drabsch found the accounts
    kept by Mr Griggs to be in proper order - the record-keeping was
    'quite good', to use his expression; the fact that there is no
    deficiency in the trust account and the account balances; the
    fact that there has apparently been no complaint of any
    significance about the administration of the trust account while
    it was being handled by Mr Griggs; and, most importantly, in view
    of the medical report provided to us by Mr Griggs, the medical
    condition from which he was suffering at the time.
    We are in two minds as to how we should deal with the question of
    what disciplinary action should be imposed. If we were to impose
    a fine now, then that would complete the inquiry and perhaps might
    be of some assistance to Mr Griggs in the sense that one of his
    problems is at least out of the way and it might assist in
    alleviating the stress which from which he has been suffering.
    However, he might then again decide to bury his head in the sand
    and he might find it difficult to comply with the undertaking he
    has given to us to continue to try to find the files that are
    missing and to help reconstruct the records if the files cannot be
    located.
    We have therefore decided that we should make the formal finding
    which we have made, that there is proper cause for disciplinary
    action, and then to adjourn the hearing of this inquiry for a
    period of time which will enable Mr Griggs to comply with the
    undertaking he has given to us. That will serve two purposes.
    First, it will provide an added incentive on Mr Griggs to ensure
    that he does comply with that undertaking. Secondly, it will
    enable the Tribunal to take into account the level of his
    co-operation between now and the time disciplinary action is
    imposed.
    We indicate that we consider that the appropriate disciplinary
    action would be a fine and that a considerable period might have
    to be allowed for payment of that fine in view of Mr Griggs'
    circumstances. However, in determining the appropriate amount of
    that fine, we will certainly take into account the conduct of the
    respondent and the extent of his cooperation with the
    administrator between now and the time we determine the
    disciplinary action."

29. What it subsequently said on 22 May 1992 constituted a complete about face on that stance; and there seems to me to be considerable force in the argument that what the Tribunal did, in substance, was to penalise the appellant, in what can only be described as Draconian fashion, for conduct other than that which was the proper subject of its enquiry and occurred subsequent to its findings on that inquiry. Moreover, in view of its earlier intimation, what was done without further notice to the appellant was a clear breach of the principles of natural justice.

30. That is, in any event, somewhat beside the point, because it now falls to me to exercise the punishment discretion afresh. In so doing a due sense of proportion must be preserved.

31. As the Tribunal itself recognised, there was no suggestion of malpractice on the part of the appellant. The Administrator found no evidence of defalcation or misappropriation and the maintenance of the books of account was of an acceptable standard. The real problem lay in the fact that the files and records had been bundled up in boxes without sequence or inventory and delivered to the Administrator, who had experienced some difficulty in sorting them out. Prima facie, much of the subsequent problem stemmed from the unfortunate and persistent medical condition of the appellant and the debilitating effect that it had on his will to deal with the matter.

32. In reality nothing had changed, in conceptual terms, since the original assessment of the Tribunal and the medical condition of the appellant operated as a powerful mitigator of what might otherwise appear to have been circumstances of aggravation.

33. There was and is no justification for any order of disqualification by way of penalty. It is quite inappropriate to such offence as was found. On the other hand a modest fine was clearly demanded.

34. Given the situation of the appellant and his limited capacity to pay, the fine must clearly be of an amount which will act as a proper punishment to mark the degree of criminality involved, whilst not constituting a crushing, unrealistic burden. In my view a sum of $500 is appropriate.

35. I therefore grant leave to appeal insofar as it may still be required, allow the first appeal and set aside the orders of disqualification and as to the fine imposed. There will be substituted for them orders that the appellant be fined $500 and that he have twelve months within which to pay that sum.

36. The second appeal before me derives its genesis from a complaint lodged by the Commissioner for Corporate Affairs with the Tribunal on 1 June 1992. It averred that the appellant had, in the course of conducting business as a licensed landbroker, acted negligently or unfairly.

37. The complaint focused on two separate transactions, in which the appellant was to effect a transfer of properties by way of sale.

38. It was said that, in the case of one, settlement was effected on 16 December 1988, at which time multiple holding land tax was outstanding on the land. This was the subject of a statutory charge on it, payment of which the appellant failed to arrange or secure.

39. As to the second transaction, settlement of which was effected on 16 January 1989, it was asserted that a somewhat similar situation had arisen.

40. Due principally to the appellant's health problems this complaint did not come on for hearing until March 1993. The Tribunal published reasons for its decision on 7 December 1993.

41. Those reasons reveal that the transactions in question related to quite complex dealings concerning a subdivision of land at Teringie, which included a scheme intended to avoid the attraction of multiple holding land tax, which the appellant apparently thought would be successful. After a considerable contention with the Land Tax Division it was ultimately the situation that multiple holding tax was assessed and payable.

42. The relevant historical facts, as revealed by the evidence before the Tribunal and agreed by counsel for the purposes of this appeal, were as under:-
    . The two transactions which were the subject of the claims
     constituted arms length commercial sales of allotments 40, 41
     and 42 respectively at Teringie.
    . Ms Hinton, a licensed landbroker employed by the appellant,
     was responsible for the detailed brokerage in relation to them.
     One Bertram, a licensed landbroker, acted for the purchaser of
     allotment 40, whilst a Ms Denley, also a licensed landbroker,
     acted for the purchaser of allotments 41 and 42.
    . Quite apart from his landbroking business the appellant was
     heavily involved in subdivision of lands owned by his family
     companies and family. Indeed he seems to have been the
     principal in the orchestration of the project.
    . Some 7 parcels of land were subdivided and each allotment in
     those subdivisions was issued with a title before 30 June 1988.
Each allotment pursuant to section 66 of the Land Tax Act became
     chargeable for multiholding land tax, including the land subject
     to the inquiry.
    . Sometime in 1988, prior to the transfers which were the subject
     of the inquiry, the appellant instructed Ms Hinton to inquire
     from the Land Tax Department about the procedure to convert
     multiholding tax to single holding tax.
    . Ms Hinton contacted an officer of the Land Tax Department and
     was told that if some share or interest in an allotment was
     transferred to different ownership then the Land Tax Department
     would assess the land as a different assessment. She gave the
     information to the appellant.
    . In respect to the land, the subject of the inquiry, the
     appellant transferred 1/100th share in each allotment to
     associated entities by way of sale before 30 June 1988. He
     instructed Ms Hinton to lodge notices of change of ownership
     in respect of these allotments and others which had also been
     the subject of transfers, which she did on 29 July 1988.
    . One of the seven subdivisions of land referred to above included
     allotments 40, 41 and 42. This land was originally owned by the
     appellant's family company Marinost Pty ltd and, after
     subdivision was approved, a 1/100th share in each allotment was
     transferred to associate companies.
    . On 7 November 1988 Robert Cova and Anne Cova signed Deed of
     Assignment whereby they agreed to take over, as purchasers,
     contracts for the sale of lands at Lots 41 and 42 Langman Drive,
     Teringie wherein Marinost Pty Ltd, Kareda Holdings Pty Ltd,
     Heli-Aviation Pty Ltd and Ceelands Pty Ltd were vendors.
     Pursuant to clause 2 of the contracts, the vendors were to give
     vacant possession of the properties, free of all encumbrances
     and interests, to the purchaser.
    . On 15 November 1988 Alexandra Misfud signed a contract to
     purchase the land situated at Lot 40 Langman Drive, Teringie
     from Marinost Pty ltd, Kareda Holdings Pty Ltd and Lazy T
     Property Holdings Pty Ltd. Pursuant to clause 2 of the
     contract, the vendors were to give vacant possession of the
     property, free of all encumbrances and interests, to the
     purchaser.
    . Under the respective contracts of sale in respect of allotments
     40, 41 and 42, the purchasers were only liable for land tax
     adjusted on the basis of single holding. The vendors were
     therefore liable to meet any multiholding land tax properly
     assessable.
    . The Land Tax Department, in pursuance of the notice of change of
     ownership, accepted change of ownership in respect of lands in
     six subdivisions which did not include the land which was the
     subject of the disciplinary inquiry. Accordingly, multiholding
     tax was reduced to a single holding tax in respect of those
     lands for the year 1988-1989.
    . On 14 October 1988 the Department sought more information from
     the appellant's firm for it to consider change of ownership in
     respect of the parcel of land which included allotments 40, 41
     and 42. That information was supplied by Ms Hinton on 8
     November 1988.
    . In early November 1988 the Land Tax Department imposed a
     provisional land tax on the lastmentioned parcel of land on a
     multiple holding basis.
    . Bertram testified that, prior to the settlement of allotment 40,
     Ms Hinton gave him an oral undertaking to pay multiholding land
     tax in respect of that allotment.
    . Ms Hinton told the Tribunal that she could not recall any
     conversation with Bertram and stated that, if any undertaking
     was given by her to him, she would have made a note of it and
     informed the appellant. There is no evidence to suggest she
     discussed such an undertaking with the appellant.
    . Ms Hinton stated that she could not recall any conversation
     regarding multiholding land tax with Ms Denley. There is no
     evidence that any undertaking to pay multiholding land tax was
     given by Ms Hinton to Ms Denley.
    . Settlement on allotments 41 and 42 took place on 16 December
     1988 and settlement on allotment 40 took place on 16 January
     1989. At the time of respective settlements provisional
     multiholding tax was unpaid.
    . On 18 January 1989 the appellant's firm received notices of
     multiholding land tax, inter alia, in respect of the relevant
     allotments. The appellant objected to the assessment and the
     Department indicated it was going to seek Crown Law opinion.
    . On 1 June 1989 the Department wrote to the appellant that it was
     advised by the Crown Solicitor that the levying of the
     multiholding tax on the allotments was proper.
    . All the proceeds of sale of the Teringie subdivision were paid,
     under a mortgage, to Esanda, because the subdivision was slow to
     sell. No proceeds were made available to Marinost. Hence
     Marinost fell into financial difficulty and went into
     liquidation.
    . Because the unpaid land tax constituted a statutory charge on
     the land, the purchasers of the allotments did not receive a
     clear title to the lands and became liable to pay multiholding
     land tax.

43. The Tribunal summed up its conclusions as to that situation in these terms:-
    "In our view it is perfectly clear that the respondent has been
    blatantly in breach of his duties as a land broker. He
    interpreted information received from the Land Tax Division in the
    way he wanted to interpret it. No responsible and competent land
    broker could possibly believe that a sham transaction between
    associated companies which had no possible purpose other than the
    avoidance of land tax could be guaranteed to succeed in its
    objective without any difficulty. But Mr Griggs was either
    irresponsible or incompetent (or both). Not only did he consider
    that his blatant tax avoidance scheme would work, he thought that
    there was a positive obligation on the Land Tax Division to give
    effect to the scheme and alter the assessment of land tax. It
    seems clear that someone in the Land Tax Division advised Mrs
Hinton of the effect of section 15(2) of the Land Tax Act. Mr
    Griggs seemed to think that because of this advice (which he
    referred to several times as an 'instruction') the Land Tax
    Division should have given effect to his tax avoidance scheme
notwithstanding the provisions of section 15(3) and section 42
of the Land Tax Act. Mr Griggs stubbornly refused to admit any
    mistake on his part. Even at the inquiry, he was still saying
    that someone should pressure the Land Tax Division to have the
    land tax reassessed on the three Teringie Properties."

44. It held that there were grounds for disciplinary action against the appellant.

45. After a further hearing as to penalty the Tribunal, on 7 March 1994, ordered that, bearing in mind that the appellant had already been without a licence for two years, he be disqualified from holding a licence or registration under the Act for a period of 8 years. It also ordered that he pay a fine of $500 and costs of $200 within three months.

46. In so doing the Tribunal said:-
    "We note that the respondent has previously been the subject of
    disciplinary action by this tribunal in May 1992 when he was
    disqualified for 10 years and fined $2,500 for failure to comply
    with requests made by the Tribunal-appointed administrator of his
    trust account. We note that there were breaches of undertakings
    which had been given to the Tribunal in that matter.
    However, the conduct in the present enquiry occurred before the
    conduct which formed the basis of the 1992 inquiry and we
    therefore cannot take that into account, in the same way as a
    court would take into account a previous conviction for an
    offence. The respondent was engaged in a transparently obvious
    tax avoidance scheme, although it was not one which involved
    deliberate dishonesty or cheating. It was put to us that the
    respondent was not involved in the transaction as a landbroker but
    as a director of the vendor companies and that his employee, Mrs
    Hinton, was doing the landbroking work. We reject that
    submission. It is quite clear on the evidence that Mrs Hinton was
    acting under his supervision and following his instructions as far
    as the landbroking was concerned.
    It was also put to us that there was a conflict of interest
    between the respondent's duties as a director of the vendor
    company, or companies, and his duties as a landbroker. If that
    is so, it says little for the competence and professional attitude
    of the respondent for putting himself in a position in which he
    was in a conflict of interest in the first place. However, we do
    not agree that there was any such conflict. As far as his
    obligations as a director of the vendor companies were concerned,
    they could have been satisfied simply by him paying the land tax
    or having it paid by deduction from the amount payable to the
    financier at settlement and, if the land tax avoidance scheme had
    been successful, the land tax would subsequently have been
    refunded.
    We take into account the personal circumstances of the respondent,
    as put to us by his counsel. We note that he is an undischarged
    bankrupt, having guaranteed company debts totalling something in
    the vicinity of $20 million and clearly not being in a position
    to satisfy those guarantees when they were called up. We note
    that he is presently employed at a gross salary of $560 per week
    and has been so employed for over 12 months.
    The main objects of disciplinary action in this Tribunal are to
    sound a warning to other people in the relevant trade or
    occupation or profession who may be tempted to engage in similar
    conduct to that into which we have enquired, and also to ensure
    that the public is protected from any repetition of that conduct
    on the part of the respondent. The respondent's conduct in this
    matter, including his stubborn refusal to admit any responsibility
    on his part, and his negligence and unfairness which we have
    previously found, call for a period of disqualification from
    holding any form of licence or registration under the Land Agents,
    Brokers and Valuers Act. As any disqualification for less than
    eight years and one or two months would run concurrently with the
    disqualification ordered by the Tribunal in May 1992, although
    that order is apparently still subject to appeal, we think there
    ought to be a fine in addition to a period of disqualification, to
    indicate that the matter is regarded as too serious to simply be
    absorbed into the existing disqualification period.
    Having said that, we emphasise that we are not treating the
    previous disciplinary action in any way as a previous offence or
    as previous grounds for disciplinary action, which the respondent
    should have been aware of at the time of the conduct which forms
    the basis of the present enquiry."
    (The emphasis is mine.)

47. The appellant now appeals against those orders on the grounds that:-
    . The Tribunal erred in law in holding that he acted negligently
     and unfairly in failing to pay the land tax prior to settlement
     on the relevant transactions or in failing to make provision for
     it by holding money in his trust account.
    . The penalty imposed was, in any event, manifestly excessive. He
     particularised that ground as under:-
    - The appellant states that the penalty is disproportionate to the
     gravity of the conduct of the appellant and in particular having
     regard to the following matters:-
    (a) There was no evidence of dishonesty or impropriety or
        intention to cheat or deceive anyone.
    (b) The appellant acted as he did after an officer of the Land Tax
        Department confirmed the legality of the transaction to Ms
        Hinton a Licenced Broker employed by the appellant's firm.
    (c) The appellant was not involved in the actual broking of the
        transaction but is held vicariously liable for the action of
        Ms Hinton who was involved in the broking of the transaction
        and who did not communicate an undertaking given by her to the
        purchaser's broker that the land tax would be paid by the
        vendor.
    (d) It is legitimate to minimize tax and the transaction was not
        a sham. He honestly believed that what his firm was doing was
        legitimate on the ground that Tax Department had approved it
        and that the Department had actually reduced land tax to
        single holding on some allotments.

48. I now turn to the arguments advanced in relation to the second appeal.

49. As to this it must be kept firmly in mind that, as to each count in the complaint against him, the specific allegation was that, in the course of conducting his business as a licensed landbroker, the appellant acted negligently or unfairly, in that he:-
    (a) failed to ensure that the outstanding provisional multiple
        holding land tax was paid by the vendors prior to settlement
    (b) failed to ensure that funds were available at settlement
        either to pay the outstanding land tax immediately following
        settlement or to give to the purchasers' agent for payment to
        the State Taxation Office
    (c) if such provisional multiple holding land tax was in dispute,
        failed to obtain from the vendors funds to place in trust
        sufficient to cover the amount of the outstanding land tax,
        and to provide to the purchasers' agent an undertaking as to
        when and how those funds would be withdrawn.
    (d) failed to ensure that the vendors passed an unencumbered title
        to the property to the purchasers.

50. It is stating the obvious to say that the complainant bore the onus of proving the assertions made. As has been pointed out by King CJ in Herrmann v The Nurses Board of South Australia and Anor (1993) 61 SASR 325 at 327 there have been differences of opinion over time as to whether, in cases of this type, the civil or criminal onus applies. That difference is, perhaps, exemplified in T v The Medical Board of South Australia (1992) 58 SASR 382. However, at least in the instant case, I do not think that, in practical terms, the difference is critical. As in the lastmentioned case the approach espoused by the High Court in Briginshaw v Briginshaw and Another (1938) 60 CLR 336 would clearly give rise to a practical standard of proof closely approaching proof beyond reasonable doubt, in any event. The decision of the Tribunal must therefore be reviewed with that in mind.

51. It is also necessary to reflect upon the decision of Cox J in Paterson v Commissioner for Consumer Affairs (1988) 148 LSJS 275 at 280-1. He there made the point that, where the section uses the word "negligently", it is not referring to that word in the strictly tortious sense. It is employing it in its more general sense of carelessly or neglectfully, having in mind the care, skill and diligence fairly to be expected of a competent landbroker in the circumstances. The word "unfairly", as utilised in the section, is employed according to its normal grammatical sense, as connoting something that is indicative of a deceptive, dishonest practice, leading to an unjust or inequitable result.

52. The line pursued by the Tribunal, in its reasons, comes to this:-
    . no responsible and competent broker could possibly have believed
     that the transfers to avoid multiple holding land tax could be
     guaranteed to succeed without difficulty.
    . the appellant was irresponsible or incompetent in considering
     that the scheme would work or that there was a positive

     obligation on the Land Tax Department to accept it.
    . despite the apparent advice given by an officer of the
     Department, the appellant ought to have anticipated the
potential operation of sections 15(3) and 42 of the Land Tax
     Act.
    . he was both negligent and unfair.

53. It commented:-
    "Where a person is involved in a tax avoidance scheme which is
    likely to be attacked and not recognised by the relevant
    authorities, whether it involves land tax, income tax or any
    other kind of tax, no assumption should be made that the scheme
    has been effective until advice in writing is received to that
    effect. In the present case, Mr Griggs knew that the Land Tax
    Division was querying his scheme because it asked Mr Griggs to
    provide further information (not all of which was provided by
    him). He had received assessments from the Land Tax Division
    indicating the possibility of land tax being assessed on a
    multiple holding basis. At the time of settlement on the sale
    of the three Teringie Properties he had received no amended
    assessment or any indication in writing or otherwise that this
    would not be the case. In these circumstances it was both
    negligent and unfair on his part not to pay the land tax prior
    to settlement on the three transactions, knowing that the land
    tax would be refunded by the Land Tax Division if the assessment
    were to be changed, or to make provision for it by holding
    money in his trust account. Mr Griggs chose to do neither of
    these things because he could not even countenance the
    possibility that his scheme would not succeed. As far as his
    belief that it must succeed because it had succeeded before is
    concerned, it seems that the other cases in which similar
    transfers of ownership had been accepted by the Land Tax
    Division involved genuine arms length transactions, not sham
    transactions for the purpose only of tax avoidance. But even if
    some other sham transactions had slipped through the net and
    had not been picked up, there was always the possibility that
    this would not be the case with all subsequent transactions.
    We are satisfied that no responsible land broker should
    ever place a purchaser in the possible position of not obtaining
    a clear title because of non payment of land tax by the vendor."

54. In my opinion this conclusion cannot be sustained for a variety of reasons, not the least of which are its inherent illogic and the manner in which it clearly sought to confuse what it saw as the appellant's responsibility as a director of Vendor companies and his obligations as a licensed landbroker -and, in effect, to regard the one as coincident with the other. There was certainly no conflict of interest as between his two capacities.

55. However, I first deal with the factual aspects.

56. It is beyond question that the tax minimisation strategy which had been adopted in relation to six of the seven parcels of land had succeeded, prior to the transactions here in question.

57. Moreover, as already appears, that strategy had been the product of a specific enquiry made by Ms Hinton of the Department. When the Department raised the provisional assessment in November 1988, the appellant bona fide disputed it. It cannot escape comment that, although the Tribunal scathingly criticised the appellant for not anticipating the Department's resort to the sections of the statute to which it referred, there was a need for the matter to be submitted for a Crown opinion. The Tribunal's assessment was blatantly a case of wisdom borne of the benefit of hindsight; and its characterisation of the scheme as a sham tax avoidance strategy skates on very thin evidentiary ice. There is, of course, a world of difference between avoidance and evasion, in any event; and the appellant was entitled to have regard to what had already been accepted by the Department.

58. It cannot be emphasized too strongly that, whether or not he was misguided, it was never demonstrated that the appellant did not honestly believe that his stance with the Department was legally correct. There was never any suggestion of conduct akin to fraud on the part of the appellant. On the contrary, the broker Bertram was well aware of the state of play. It must be assumed that Ms Denley, the other broker involved, was equally so aware - at least there was no evidence to the contrary.

59. Perhaps more importantly, the essential reasoning of the Tribunal appears to have been that "no responsible land broker should ever place a purchaser in the possible position of not obtaining a clear title because of non payment of land tax by the Vendor". Herein lies the fallacy upon which its decision was founded.

60. In assessing whether conduct is negligent or unfair it becomes necessary to consider what duty lies upon a broker in the situation in which that person is retained. Moreover, as already appears, the concepts of negligence and unfairness are quite different and give rise to quite different considerations.

61. If it had been the case that the appellant had, as seems often the case, been acting for both vendor and purchaser, then there may well have been justification for the view of the Tribunal. That was simply not the situation.

62. As earlier recited, these were arms length transactions, with each purchaser being represented by an independent, experienced broker.

63. It was the clear duty of those brokers to make all usual investigations, which should have revealed (and apparently did reveal) the situation which existed. It was equally their duty to raise appropriate requisitions to protect their respective clients. In the instant case this would have mandated a requisition that settlement would not occur unless the tax was paid under protest, or moneys were retained, in an acceptable manner, to guarantee payment of what was ultimately found to be due. Such an approach was, of course, in accord with well established broking practices, as the expert evidence revealed.

64. Absent fraud or concealment, the appellant owed no duty - as broker - to the purchasers in that regard at all, given the bona fide dispute which existed as to liability for the tax. He was not retained by them. They were separately represented and - to the extent that a practical difference arose in the circumstances as to his several capacities as agent of the vendors and broker for them - his undoubted bounden duty was to pursue and serve the best, legitimate interests of the vendor, ie to maximise the moneys received at settlement consistently with acting according to law.

65. Furthermore, the appellant was not personally dealing with the settlements as broker. He had delegated that task to Ms Hinton. The fact that she was his employee did not detract from her personal responsibility, as a licensed broker, to act in what was a proper, professional manner. There is no suasive evidence that she failed to do so; and it is not without significance that she was not the subject of disciplinary proceedings. It is a quantum leap, in such circumstances, to seek to attach to the appellant what is tantamount to a vicarious penal responsibility, of the type sought to be sheeted home to him in this case.

66. One poses the rhetorical questions: In the circumstances as I have identified them, where was the unfair conduct? Where was the negligence?

67. Before proceeding to respond to those questions it is pertinent to point out that the Tribunal does not ever seem to have resolved the evidentiary conflict arising from Bertram's assertion that Ms Hinton gave him an oral undertaking to pay the tax in connection with allotment 40 and her evidence that she had no memory of having done so and that there was no record, conformably with what would have been a normal practice in such a case, of making a file note and advising the appellant. There is no suggestion that Ms Denley ever made a like request. The fact that the appellant acknowledged in evidence that he had earlier given a general instruction not to pay the multiple holding tax seems nothing to the point.

68. His evidence on that aspect was to this effect:-
    "Q. Before settlement of these 3 properties, you indicated that
        you knew that there was provisional tax assessed. Did you
        ring up the Land Tax office and ask them what had happened to
        your applications to have it reduced to nil.
     A. I didn't - I had nothing to do with the actual settlement of
        these particular properties but -
     Q. Did you instruct Ms Hinton to do that.
     A. Yes, but earlier I had instructed Ms Hamilton that as she had
        lodged - this is we are talking about probably 3 months
        earlier, that as we had lodged the required notifications
        of transfer for these properties, when the settlements came
        up there would be no multiple land tax payable and for her
        not to pay and deduct any multiple land tax, based on the
        pure and simple knowledge that we had done what the Land
        Tax Department had asked us to do, to make them single
        holding tax.
     Q. But they hadn't confirmed that with you.
     A. No.
     Q. Don't you agree you were negligent in not checking that they
        had agreed with your request, in the assessment of the
        position.
     A. It's easy to look back in hindsight and say yes, that's what
        I should have done, but we had the very evidence presented
        today that the majority of the notifications of sale that
        were presented to the Land Tax Department were automatically
        cleared into single holding taxes. Now I think we were
        entitled to assume that the remainder would be too."

69. However, I return to the rhetorical questions posed.

70. I completely fail to see how, in the relevant circumstances, it can be said that the complainant discharged its onus of proving that there was any unfairness on the part of the appellant in relation to either transaction.

71. He had no duty to either purchaser, each of whom was separately represented. Those representatives were the persons who, in knowledge of the situation, could and should have made requisitions and did not.

72. The appellant was not, of course, in breach of any duty to the vendors of which he was the alter ego, and to whom he owed a duty of acting in their best legitimate interests. For all practical purposes he was the vendors and he gave his general instructions in the best interests of the vendors, bona fide believing his attitude to be correct.

73. The detailed work was done by Ms Hinton and there is no evidence that she tendered any advice to him which he failed to heed. His responsibilities as broker representing the vendor were not legally coincident with what, in the event, proved to be the contractual liability of the vendors. He was not, as it were, the insurer of the vendors. It was for the purchasers' brokers to ensure that their interests were protected in an acceptable manner.

74. The same reasoning logically excludes any proper finding of negligent conduct. There was certainly no carelessness demonstrated and, to the extent that the finding was based on incompetence, it fundamentally misconceives what was the duty of the appellant at the time, in the situation as he understood it to be. No amount of expert evidence as to brokers could possibly gainsay that situation, as Ms McLean sought to contend. The general practice of brokers must necessarily be seen as no more than a broad backdrop against which relative legal duties and responsibilities are to be viewed. How it can be said that, where the detailed work was done by Ms Hinton in light of quite general instructions not unreasonably given by the appellant at the time, and she raised no relevant point apropos the particular transactions, it was proved - to the requisite standard - that the appellant was negligent is impossible to perceive.

75. The complainant's case fell far short of discharging the relevant onus of proof and the reasoning of the Tribunal was fundamentally flawed, in that its attention was distracted from the real issues.

76. The appeals must be allowed and the orders appealed against set aside. As the principal issue in this matter raised a question of law leave to appeal was not required.

77. That being so it becomes strictly unnecessary to consider the issue as to whether the disqualification and fine constituted penalties which were manifestly excessive. All that need be said in that regard is that, even if I am incorrect as to my basic conclusions they were, in combination, patently Draconian and at odds with any possible degree of delinquency of the appellant. In effect the Tribunal was attempting to produce a result which equated to a ten year disqualification. Such a period was totally disproportionate to the conduct of the appellant, even if it had properly been characterised as negligent or unfair.