Jureidini v Commissioner for Fair Trading

[2008] NSWADT 234

CITATION:	Jureidini v Commissioner for Fair Trading [2008] NSWADT 234
DIVISION:	General Division
PARTIES:	APPLICANT John Jureidini RESPONDENT Commissioner for Fair Trading
FILE NUMBER:	073249
HEARING DATES:	18 April 2008
SUBMISSIONS CLOSED:	18 April 2008
DATE OF DECISION:	22 August 2008
BEFORE:	Montgomery S - Judicial Member
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Licensing and Registration (Uniform Procedures) Act 2002 Property, Stock and Business Agents Act 2002
CASES CITED:	Australian Broadcasting Tribunal v Bond (1990) 170 CLR 32 Ex parte Tziniolis; re The Medical Practitioners Act (1966) 84 WN (Pt 2(NSW) 275 Health Care Complaints Commission v Litchfield (1997) 41 NSWLR 630 Hughes and Vale Ply Limited v State of New South Wales (1955) 93CLR 127 Law Society of New South Wales v Bannister Supreme Court of New South Wales Court of Appeal 27 August 1993 Maio v Superintendent of Licences New South Wales Police (1987) ASC 55-551
REPRESENTATION:	APPLICANT H Packer, barrister RESPONDENT B Mauro, solicitor
ORDERS:	The decision under review is varied. The ‘supervision’ condition that is the subject of these proceedings is removed. In its place I order that Mr Jureidini’s licence is subject to the following condition: (b) The holder of this real estate agent's licence is prohibiting from exercising functions under the licence otherwise than as an employee of a licensee whose licence does not contain such a condition.

1 The applicant holds a real estate agent's licence granted under the Property, Stock and Business Agents Act 2002 ("the Act"). The licence is subject to the following conditions:

(a) During each year in which you are a licence holder, you must complete further educational training relating to the activities that may be carried on in respect of your licence. The suitability of that education and the manner of calculating the time which you spend on it must satisfy the requirements set by the Office of Fair Trading.

(b) The holder of this real estate agent's licence is restricted from exercising the functions of a real estate agent unless under the supervision of an unrestricted real estate agent licence holder. (“the ‘supervision’ condition”)

(c) The holder of this real estate agent's licence is restricted from the operation of a trust account.

2 The applicant sought to have the ‘supervision’ condition removed. A delegate of the Commissioner for Fair Trading determined to refuse that application and the refusal was affirmed on internal review. The applicant has applied to this Tribunal for external review of that decision.

Background

3 The applicant held a real estate agent's licence from 1979 to 1988. He held a real estate salesperson certificate from 1988 to 1990.

4 In November 1992 the Applicant was convicted for the offence of obtaining valuable thing by deception. The Applicant faked his own death to obtain $250,000 from a Life Insurance Policy. He was sentenced to three years imprisonment. The Court of Appeal upheld the conviction and the Applicant's application for leave to Appeal to the High Court of Australia was refused.

5 In January 1998 the Applicant made an application for a real estate agents licence under the now repealed Property Stock & Business Agents Act 1941. The Director-General of Fair Trading objected to the application on the grounds that the Applicant was not of good frame and character or otherwise a fit and proper person to hold a licence. The matter was heard in the Local Court and the application was refused.

6 In August 2003, he applied for a conveyancer's licence, proposing to work with Chris Peacock Lawyers. This licence was granted under the Conveyancers Licensing Act 1995 with the condition that he completes 5 points of continuing education. This conveyancer's licence expired in June 2004 and the applicant applied for its renewal. At that time he was advised that the full licence had been granted in error and that it should have been subject to the condition that any conveyancing work undertaken by him must be as an employee of a licensee without such a condition. The restricted licence was granted on 1 July 2004.

7 In February 2006 the Applicant again applied for a real estate agents licence. Prior to a determination being made the Applicant was requested to provide evidence that he had been rehabilitated and that he was now a fit and proper person to hold a licence. The Commissioner was not satisfied that the Applicant could carry out the activities of a real estate agent without supervision and the licence was granted subject to the conditions set out above. In May 2007 he applied to amend his licence by requesting that the ‘supervision’ condition be removed from his licence. This application was refused and the refusal was affirmed on internal review. He has applied to the Tribunal for external review of the determination.

Applicable Legislation

8 Section 8(1)(a) of the Act provides that a person can not act or carry on the business of a real estate agent, unless the person is the holder of a real estate agent's licence.

9 Section 14(1) of the Act provides in part:

14 Eligibility for licence or certificate of registration

(1) A natural person is eligible to hold a licence only if the Director-General is satisfied that the person:

(b) is a fit and proper person to hold a licence and each person with whom the person is in partnership in connection with the business concerned is a fit and proper person to hold a licence, and

10 Section 20 of the Act provides that a licence or certificate of registration may be granted subject to conditions, including (but not limited to) conditions of the following kind:

a) a condition prohibiting the holder from exercising functions under the licence or certificate of registration otherwise than as an employee of a licensee whose licence does not contain such a condition,

(b) a condition requiring the holder to undertake or complete a specified course of studies within a specified period of time,

(c) a condition requiring a licensee or holder of a certificate of registration to undertake by way of professional development specified further education or training during the term of the licence or certificate of registration,

(d) a condition prohibiting the holder from exercising functions under the authority of the licence or certificate of registration in relation to specified activities, or prohibiting the holder from exercising functions under the authority of the licence or certificate of registration except in relation to specified activities.

11 Section 17(3)(b) of the Act provides that for the purpose of applying part 2 of the Licensing and Registration (Uniform Procedures) Act 2002 ("the applied Act") to a licence or a certificate of registration, the licence or certificate of registration may be amended under section7 of the applied Act.

12 Section 7 of the applied Act provides:

7 Applications for amendment of licences

(1) This section applies to any licence that, pursuant to the relevant licensing legislation, may be amended.

(2) An application for the amendment of a licence may be made to the relevant licensing authority by the licensee at any time while the licence is in force.

13 Section 18(1) of the applied Act provides:

18 Decision on applications

(1) A licensing authority may make either of the following decisions with respect to an application:

(a) a decision to grant the application, either unconditionally or subject to such conditions as are authorised or required by the relevant licensing legislation,

(b) a decision to refuse the application.

14 Section 31 of the Act provides:

31 Each place of business to be in charge of licensee

(1) An individual who carries on business under a licence at more than one place of business must employ at each of those places of business (except the place at which the licensee is personally in charge) as the person in charge of business at that place a person who is the holder of a licence that an individual is required to hold to carry on that business.

(2) A corporation that holds a corporation licence must employ as the person in charge at each place of business at which the corporation carries on business under the licence a person who is the holder of a licence that an individual is required to hold to carry on that business.

15 Section 32 of the Act provides:

32 Duty of licensee and person in charge to properly supervise business

(1) A licensee must properly supervise the business carried on by the licensee.

(2) A licensee employed by another licensee (the principal licensee) as the person in charge of business at a place of business of the principal licensee must properly supervise the business of the principal licensee carried on at that place.

(3) The requirement to properly supervise the conduct of business includes the following requirements:

(a) a requirement to properly supervise employees engaged in the business,

(b) a requirement to establish procedures designed to ensure that the provisions of this Act and any other laws relevant to the conduct of that business are complied with,

(c) a requirement to monitor the conduct of business in a manner that will ensure as far as practicable that those procedures are complied with.

(4) The Director-General may from time to time issue and notify to licensees guidelines as to what constitutes the proper supervision of the business of a licensee. A failure to comply with the requirements of any such guidelines in connection with the supervision of a business constitutes a failure to properly supervise the business.

Maximum penalty:

(a) 200 penalty units in the case of a corporation, or

(b) 100 penalty units in any other case.

16 The Office of Fair Trading has also issued "Guidelines" with respect to the supervision provisions.

The Commissioner’s case

17 The Commissioner contends that the decision not to remove the ‘supervision’ condition should be maintained. She says that the ‘supervision’ condition means that Mr Jureidini cannot obtain employment as a licensee in charge or work as a sole trader. The condition does not prohibit nor should it prevent Mr Jureidini from working as an employed licensee. Mr Jureidini should not be permitted to occupy a position of licensee in charge with its supervisory and compliance responsibilities or to establish his own real estate business.

18 Section 14(1)(b) of the Act states that a person must be a "fit and proper person" to hold a licence. The decision to refuse amendment to Mr Jureidini's licence by removal of the ‘supervision’ condition was a consequence of his conviction in 1992 of a serious offence of dishonesty and primarily because the delegate was not satisfied that he had proven that he was sufficiently rehabilitated to carry out the duties of a licensee without supervision.

19 The Commissioner relies on a number of authorities in regard to the expression "fit and proper". In Hughes and Vale Pty Limited v State of New South Wales (1955) 93CLR 127 the characteristics of "fit and proper" were said to be knowledge, honesty and ability. In Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 Toohey and Gaudron JJ stated:

"the expression "a fit and proper person" standing alone, carries no precise meaning. It takes its meaning from its context, from the activities in which the person is or will be engaged and the ends to be served by those activities. The concept of "fit and proper" cannot be entirely divorced from the conduct of the person who is or will be engaging in those activities. However depending upon the nature of the activities the question may be whether improper conduct has occurred, whether it is likely to occur, whether it can be assumed that it will not occur, or whether the general community will have confidence that it will not occur.

20 The Commissioner accepts that there is no indication that Mr Jureidini has breached the law in the last 10 years. Mr Jureidini's 1992 offence forms the basis of these proceedings. The Commissioner argues that Mr Jureidini's crime is one of serious dishonesty and that this is relevant given the activities of a real estate agent. An agent handles money deposited in trust by purchasers of homes and tenants and in generally dealing with the public. The Commissioner further argues that Mr Jureidini has shown a lack of appreciation of the significance of his actions.

21 The Commissioner repeats the view expressed by the Court in relation to Mr Jureidini's 1998 application. The Court concluded that it could not be satisfied on the evidence that it could certify to the community at large that Mr Jureidini had shown himself to be a person who could be trusted with a licence where he held and dispersed substantial sums of money and/or property belonging to other members of the community.

22 Mr Jureidini provided a number of references in support of his application. The Commissioner says that these are insufficient to establish that Mr Jureidini should be given an "unrestricted" real estate agent's licence. The Commissioner relies on views expressed by the Court of Appeal in Ex parte Tziniolis; re The Medical Practitioners Act (1966) 84 WN (Pt 2(NSW) 275 where it considered an application for registration by a medical practitioner. In determining that the Applicant was not a fit and proper person, the court said at page 286:

Reformation of character and behaviour can doubtless occur but their occurrence is not the usual but the exceptional thing. One cannot assume that a change has occurred merely because some years have gone by and it is not proved that anything of a discreditable kind has occurred. If a man has exhibited serious deficiencies in his standard of conduct and his attitudes, it must require clear proof to show that some years later he has established himself as a different man.

23 The Commissioner submits that Mr Jureidini has not provided sufficient evidence to the prove rehabilitation to enable the condition to be removed from his licence.

24 It is submitted that the Act's objective in regulating the "real estate industry" is to ensure that licensees and salespersons have knowledge, ability and honesty. the jurisdiction of courts and tribunals is not to punish the offender but to protect the public Law Society of New South Wales v Bannister Supreme Court of New South Wales Court of Appeal 27 August 1993.

25 The granting of a licence is meant to give the public confidence that its holder has the knowledge, ability and honesty to perform the duties of a real estate agent. The imposition of conditions on Mr Jureidini's licence is primarily in the public interest and is a protective measure while giving him an opportunity to work in the industry. The condition that Mr Jureidini work under supervision is not an extraordinary condition since the Act provides that persons working within a real estate agency must be supervised by a licensee in charge. The ‘supervision’ condition therefore is not meant to prohibit nor should it prevent Mr Jureidini from finding employment in the industry.

26 The Commissioner contends that the ultimate question is whether Mr Jureidini can be safely accredited to the public without further inquiry as a person to be entrusted with the sort of work which the licence entails: Maio v Superintendent of Licences New South Wales Police (1987) ASC 55-551. Mr Jureidini was given the opportunity in 2006 to prove himself in the relevant environment. It would be relevant to a decision to remove the ‘supervision’ condition, for Mr Jureidini to demonstrate a substantial period of supervised activity as a licensee and to support any future application by providing relevant testimonials from employers in the real estate industry. He has been unable to do so.

27 It is submitted that Mr Jureidini has not provided clear proof to show that he should be permitted to occupy a position of licensee in charge with its supervisory and compliance responsibilities or to establish his own real estate business. The decision not to remove the ‘supervision’ condition should be maintained. Therefore, the decision to refuse to remove the condition from his licence should be upheld.

Mr Jureidini's case

28 Mr Jureidini does not dispute the Commissioner’s outline of the background to this matter. He accepts that the relevant issue in this case is whether or not he has been sufficiently rehabilitated to have the ‘supervision’ condition removed from his licence. Mr Packer submitted that in the material Mr Jureidini placed before the Tribunal there is evidence of rehabilitation and specific material going to the question of whether supervision is still required. He says that Mr Jureidini has expressed contrition and accepts the basis of the conviction and the Commissioner's legitimate concern about it. He says that this is demonstrated in Mr Jureidini's words in support of his application and in his deeds.

29 He argues that over the 21 years since the commission of the offence, and particularly in the last 10 years, Mr Jureidini has shown himself to be someone who has tried to better himself and others. He has been honest in his commercial dealings with customers vulnerable to computer fraud. He has established a life and reputation for himself, which he would not be likely to throw away.

30 Mr Jureidini relies on his own evidence and a number of written references.

31 Mr Jureidini evidence is that during his incarceration he commenced study doing the Advanced Diploma in Conveyancing. After release he continued as a full time student and completed the Advanced Diploma in Conveyancing and two other courses: Private Inquiry and Commercial Agency Practice. He has been continued studying since that time. It has been his habit to continue studying something every year.

32 Following his incarceration he worked part time as a property officer with some casual work with the Australian military as a civilian contractor. In 1997 he opened a web, database design firm called SOS Internet Page Design Group (“SOS Internet”). His role in the group was to liaise with clients and to supervise the technical work to ensure that the clients’ needs were fulfilled. He had two primary subcontractors: Ms Anna Dytz and Mr Cornel Robinson. Mr Jureidini has no computer qualifications and is not involved in the actual programming and design of websites. The business relies on the skills of Ms Dytz and Mr Robinson as programmer and web designer. Both Mr Cornel and Ms Dytz are aware of Mr Jureidini’s conviction for dishonesty and nevertheless support this application.

33 The main function of S0S Internet was to design website that would stand out from the crowd along with e-commerce sites that would store credit card details and have means to procure monies from credit card transactions online. They created a number of e-commerce websites and had several high profile clients. Mr Jureidini said that the amount of web design work available to SOS Internet is decreasing due to the availability of templates. He therefore wishes to pursue alternative employment.

34 Mr Jureidini gave evidence of the attempts he had made to obtain employment in the real estate industry and the limited success he has had in that regard. He stated that the ‘supervision’ condition is an obstacle to gaining that employment. His evidence was that this situation was confirmed by direct feedback that he had received from one potential employer, LH Brown and Company. Another firm, Belmore Real Estate, was willing to offer him work as a real estate subcontractor. He said that this offer did not proceed because of the ‘supervision’ condition. He said that he has found others reluctant to give feedback but he thinks that it is probable that the ‘supervision’ condition has prevented him from gaining employment. He conceded that he doesn’t know for sure that this is the case and that he had not informed all prospective employers of the ‘supervision’ condition.

35 Most of the fresh material that Mr Jureidini supplied in support of this application goes to the issue of whether he has demonstrated that he has been subjected to the sort of temptations that would test his probity and his resolve to behave differently in society in the future.

36 Mr Jureidini subsequently worked as a Conveyancer with Mr Chris Peacock, a solicitor. Mr Peacock attended the hearing and gave evidence in support of Mr Jureidini’s application and was subjected to cross-examination. Mr Peacock stated that Mr Jureidini worked for him as a conveyancer on a part-time basis. Mr Jureidini attended to the exchange of contracts, settlements and advice to clients in regard to cooling off periods. The work was sporadic - two or three occasions per month over a period of 18 months to two years. Mr Peacock is aware of Mr Jureidini’s conviction for dishonesty and he nevertheless supports this application.

37 Mr Ken Batten is the Director of Peninsula Mortgage Brokers. He also holds a real estate licence. Mr Batten attended the hearing and gave evidence in support of Mr Jureidini’s application and was subjected to cross-examination. He was the General Manager of Macquarie Group Services from 1999 to 2002. This service company functioned to supply the accounting and legal professions with legal documents, precedents and training online, with relation to tax matters. Being an online service, the client would pay and receive their documents in real time. He contracted the construction of the web site and e-commerce process to SOS Internet. The brief was to build a dynamic automated online system with a secure direct payment credit card merchant facility. The project was completed with minimum supervision as per the project plan and was launched successfully in late 2000. Mr Batten stated that Mr Jureidini and his colleagues were outstanding in their honesty and professionalism.

38 He is aware of Mr Jureidini’s conviction for dishonesty and he supports this application. It is Mr Batten’s view that Mr Jureidini is fully rehabilitated from the events that resulted in his conviction. Mr Batten stated that he would have no hesitation in recommending the services of Mr Jureidini and his colleagues at SOS Internet. He stated that he considered the ‘supervision’ condition on Mr Jureidini’s licence to be stupid, as he does not think Mr Jureidini needs supervision.

39 Mr Carlton Wood stated that he has known Mr Jureidini for many years and have used his services in constructing internet sites many times over the years for his wholesale fertilizers and plant nutrients business. He stated that Mr Jureidini and his team carried out all works were with the utmost of professionalism and panache. Mr Wood is aware of Mr Jureidini’s conviction for dishonesty and he supports this application. He noted in particular Mr Jureidini’s ability to manage his team as all works submitted were on time and with stunning results.

40 Mr Fred Jaher is the proprietor of White Rose Limousines and member of the Lebanese Chamber of Commerce. He stated that he has known Mr Jureidini for many years and has used his website services many times over the years for his limousine services, and more recently the website for his reception centre. He stated that Mr Jureidini has fulfilled all his expectations and is beyond reproach in his integrity and there have never been any problems in his dealing with Mr Jureidini's firm in relation to security. Mr Jaher is aware of Mr Jureidini’s conviction for dishonesty and he nevertheless supports this application.

41 Mr Jureidini also relies on two older references. Both relate to periods either before Mr Jureidini committed the crime or before he was convicted. Mr Constantine Polites, Chairman of Directors of the Polites Princes Group with interests in hotels, motels and investment properties. In 1982, he dealt with Mr Jureidini in relation to the purchase of an investment property at Oxford Street, Paddington. He stated that he found Mr Jureidini to be obliging and pleasant and he was very satisfied of his attention. He subsequently engaged Mr Jureidini to negotiate in relation to the purchase of other properties. He stated that without hesitation would again recommend Mr Jureidini to look after his Company's interests if the occasion arose again.

42 A further reference from Mr David Sanders of Peter Brand Real Estate indicates that Mr Jureidini was employed at the agency between November 1988 and February 1989 and that he was extremely thorough in his work. There is no indication that Mr Jureidini’s employer was aware of his conviction.

43 Mr Sam Iskandar of Marrickville Council also supports this application. Mr Iskandar makes no reference to having knowledge of Mr Jureidini's conviction.

44 Mr Packer submitted that the starting point for the Tribunal is to consider whether the ‘supervision’ condition on Mr Jureidini’s licence is necessary for the protection of the community. This requires consideration of whether Mr Jureidini has rehabilitated himself such that the community is protected.

45 Mr Packer submitted that it is very difficult for a person in Mr Jureidini's position because until he can demonstrate that he has been subjected to the sort of temptations that would test his probity, he will not be allowed to be subjected to the sort of temptations that would test his probity. Nevertheless, he has attempted to work to the best of his capacity within the legitimate restrictions that his own behaviour has brought upon him.

46 Mr Packer argues that by setting up and operating SOS Internet Mr Jureidini has demonstrated three things. Firstly, that he is able to work without supervision. Secondly, that he is able to deliver to customers those things that a real estate agent dealing with members of the public would be expected to deliver - timeliness; working to a brief; understanding of customer needs; and a history of not overstating or misrepresenting a situation. Thirdly, that he has been subjected to significant temptation in the form of being able to access secure information from which a criminal person in Mr Jureidini's position could make a large financial gain. He has not given into that temptation. In fact he has put in place procedures to ensure that no one within his organization can misuse the information with which customers entrust them. It is submitted that these matters address the concerns raised by the Commissioner.

47 It is further submitted that Mr Jureidini has handled money in his role as a conveyancer. Mr Jureidini does not seek to have the trust account condition removed from his licence.

Findings and Conclusion

48 There are numerous decisions in which the Tribunal has considered the issues of whether a person is "fit and proper". It is clear from the views from Australian Broadcasting Tribunal v Bond referred to above that the determination of whether a person is "fit and proper" is contextual. There should be some 'nexus' between the conduct complained of and the activities to which the licence relates. Thus, whether Mr Jureidini is a fit and proper person must be determined in the light of the activities likely to be undertaken by the holder of a real estate licence.

49 The references presented on behalf of Mr Jureidini support his contention that he is a fit and proper person to hold a real estate licence. On the other hand, the Commissioner has argued that this may not be the case. She contends that the decision to refuse to remove the condition from Mr Jureidini's licence should be upheld as a protective measure in the public interest. She says that the condition that Mr Jureidini must work under supervision is not an extraordinary condition since the Act provides that the licensee in charge must supervise persons working within a real estate agency. She says that the condition is not meant to prohibit nor should it prevent Mr Jureidini from finding employment in the industry. The Commissioner has argued that it is by no means clear that the ‘supervision’ condition has in fact prevented him from gaining employment. Mr Jureidini conceded that he did not always inform potential employers of the condition and that he did not always seek feedback as to why he was unsuccessful in obtaining a position. There may well be other factors that have affected the situation.

50 Care must be taken to ensure that conditions attached to a licence are consistent with the overall objectives of the relevant scheme: see generally, Health Care Complaints Commission v Litchfield (1997) 41 NSWLR 630. The conditions are to be imposed for a purely protective purpose, and involve no element of punishment.

51 In my view the evidence supports Mr Jureidini’s contention that he has been rehabilitated. It is clear that he has been honest in his commercial dealings with customers. Through his work with SOS Internet he has been exposed to situations in which he had the ability to access secure information from which he could have made a large financial gain. There is no suggestion that he breached the trust placed in him. He also demonstrated that is able to work without supervision to meet his clients’ expectations. I have no reason to doubt his honesty or that he has gone to great lengths to better his position. I do not share the Commissioner’s concerns in regard to Mr Jureidini’s character.

52 My concern is whether or not Mr Jureidini has sufficient experience and ability to occupy a position as licensee in charge. I do not think that this is the case. I agree with the Commissioner’s submission that Mr Jureidini should not be permitted to occupy a position with those supervisory and compliance responsibilities. The ‘supervision’ condition prevents him from doing so. However, in my view the condition may have wider implications than the Commissioner intended.

53 I note that Mr Jureidini has indicated that he has no desire to act as of licensee in charge or to operate his own business. In my view such a restriction should be maintained as a protective measure. The appropriate condition is that expressed in section 20(a) of the Act. That is:

(a) a condition prohibiting the holder from exercising functions under the licence or certificate of registration otherwise than as an employee of a licensee whose licence does not contain such a condition,

54 In my view this situation could change if Mr Jureidini were able to demonstrate further relevant industry experience. Given my finding as to Mr Jureidini’s character, I recommend that if Mr Jureidini were able to demonstrate a period of six months continuous experience and were to again apply for the removal of this condition the Commissioner may well reach a different conclusion.

Order

The decision under review is varied. The ‘supervision’ condition that is the subject of these proceedings is removed. In its place I order that Mr Jureidini’s licence is subject to the following condition:
(b) The holder of this real estate agent's licence is prohibiting from exercising functions under the licence otherwise than as an employee of a licensee whose licence does not contain such a condition.