Kumar v Director General, Department of Finance and Services
[2013] NSWADT 124
•03 June 2013
Administrative Decisions Tribunal
New South Wales
Medium Neutral Citation: Kumar v Director General, Department of Finance and Services [2013] NSWADT 124 Hearing dates: 25 September 2012; 26 September 2012; 15 November 2012 Decision date: 03 June 2013 Jurisdiction: General Division Before: S Montgomery, Judicial Member Decision: 1. The decision under review is affirmed.
2. This decision takes effect 28 days from the date of this decision.
Catchwords: Real Estate Agent - certificate of registration - cancellation - disqualification - fit and proper Legislation Cited: Administrative Decisions Tribunal Act 1997
Property Stock & Business Agents Act 2002Cases Cited: In Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321
Hughes and Vale Pty Ltd v New South Wales (No. 2) [1955] HCA 28; (1955) 93 CLR 127
Sobey v Commercial and Private Agents Board 20 SASR 70Category: Principal judgment Parties: Rakesh Soni Kumar (Applicant)
Director General, Department of Finance and Services (Respondent)Representation: Counsel
P Kintominos (Applicant)
Benjamin & Khoury, (Applicant)
Department of Finance & Services (Respondent)
File Number(s): 123187
reasons for decision
GENERAL DIVISION (S MONTGOMERY, (JUDICIAL MEMBER)): Rakesh Soni Kumar (aka Roni Soni) ("the Applicant") has applied to the Tribunal for review of a determination by a delegate of the Director General, Department of Finance and Services ("the Respondent"). The Applicant was the holder of a certificate of registration under the Property Stock and Business Agents Act 2002 ("the Act") that was granted on 30 September 2010. He has not held a licence under the Act.
The determination, dated 23 June 2012, was made under section 198 of the Act and was in the following terms:
"[C]oncerning Rakesh Soni Kumar (aka Roni Soni):
In accordance with section 192(1)(g) of the Act, I cancel the certificate of registration number 1661925 held by Rakesh Soni Kumar;
In accordance with section 192(1)(h) of the Act, I declare Rakesh Soni Kumar to be a disqualified person for the purposes of the Act for a period of five (5) years; and
In accordance with section 192(1)(i) of the Act, I also disqualify Rakesh Soni Kumar from being involved in the direction, management or conduct of the business of a licensee for a period of five (5) years."
This determination was stated to take effect 14 days from the date of the determination.
The Respondent also took action in relation to the licences held under the Act by Ms Rajni Kumar (aka Raj Soni) and The Soni Group Pty Ltd ("the Corporation").
The Corporation carried on business under the registered business name of Ray White Wentworthville ("the agency").
Ms Kumar held a real estate agents licence under the Act that was granted on 12 March 2010. She was the licensee in charge of the agency after being appointed on 13 March 2010. She is also a joint director of the Corporation after having been appointed on 16 September 2009.
Mr Ice Stefanovski and Ms Francesca Totaro were shareholders in the Corporation and were in dispute with Ms Kumar. This dispute was resolved when Ms Kumar agreed to pay an amount of money with respect to their share in the company.
Applications were brought in relation to the determinations in regard to the licences held by the Corporation and Ms Kumar. The three matters were heard together and evidence in one matter was considered as evidence in the others. The applications brought by the Corporation and Ms Kumar were subsequently discontinued. I note however that the evidence that was presented tends to support the Respondent's contentions in regard to the Corporation and Ms Kumar.
The remaining matter for determination is therefore that concerning the Applicant.
Background
The background to the Respondent's action is set out in the reasons provided as a schedule to notice of determination to take disciplinary action against the Applicant's licence. The reasons provide the background as follows:
BACKGROUND
The Corporation was registered as a company on 16 September 2009 with AS1C.
On 25 January 2012, Ice Stefanovski, director of the Corporation, became aware a trust cheque for $6,951.00 had been used to pay rent for the business. He immediately notified Fair Trading.
On 30 January 2012 Fair Trading attended the office of Ray White Wentworthville. The licensee in charge (LIC), Rajni Kumar was not available and the sales trust records were allegedly locked away.
On 31 January 2012 Fair Trading attended the office and spoke with Rajni Kumar who stated the sales trust records were with the accountant. Ms Kumar was instructed to attend Fair Trading on 1 February 2012 with the sales trust records.
On 1 February 2012 Ms Kumar attended the Fair Trading office but was unable to produce any sales trust records. She participated in a record of interview and admitted there were no records prepared.
Cheque books and bank statements for the sales trust account show evidence of business expense payments. Due to insufficient records the sales trust position and extent of any deficiency could not be determined.
In accordance with the provisions contained in sections 126 and 127 of the Act, Mr David Lombe of Deloitte Touche Tohmatsu was appointed as manager to the agency on 6 February 2012. On 22 February 2012, Mr Lomb submitted his first report to Fair Trading concerning his examination of the Corporation's records during his management of the agency. From this report and the investigation in this matter the following can be alleged.
The Soni Group Pty Ltd
1.The Corporation has misused trust funds by paying business expenses from the sales trust account as prohibited by sections 86, 88 and 211 of the Act.
2.As a result, the trust account was overdrawn by ($168.00) on 30 June 2010 and remained overdrawn until 8 July 2010.
3.Contrary to section 89 of the Act, the real estate business of the Corporation did not notify the Director-General of any overdrawn amount in the trust account.
4.On 22 February 2012, it was established that a deficiency of $99,401.71 existed in the sales trust account of the Corporation.
5.The deficiency was the result of ledger accounts with debit balances and payments made from the sales trust for business expenses contrary to sections 86, 88 and 211 of the Act.
6.The Corporation commenced trading on 18 June 2010 when monies were banked to the sales trust account.
7.The above necessitated the lodgement of an audit for 2010. This was not lodged, instead a statutory declaration dated 15 September 2010 and signed by Rajni Kumar was lodged on 5 April 2011 in contravention of section 111 of the Act.
8.On 30 September 2011, Fair Trading received an unqualified Auditor's Report concerning the Corporation for the year ending 30 June 2011.
9.In respect of the above report, contact was made with the auditor Mario Raciti who stated he has never had any association with The Soni Group Pty Ltd.
10.Mr Raciti has supplied a statement confirming the signature on the auditor's declaration is not his signature and the audit certificate is a forgery. Therefore an audit has not been lodged contrary to section 111(1)(b) of the Act.
11.Cashbooks, ledgers and trial balances have never been prepared since the Corporation commenced trading, contrary to clauses 28(1), 30(1) and 31(1) of the Property, Stock and Business Agents Regulation 2003 (the Regulation).
12. Bank reconciliations for the sales trust account of the Corporation have never been prepared on a monthly basis in contravention of clauses 28(6) and 31(2)(d) of the Regulation.
Rajni Kumar
13.Licensee in charge, Rajni Kumar is rarely in the office. Rajni Kumar's husband, Rakesh Kumar (aka Roni Soni) and has been running the day-to-day operations of the business in Rajni Kumar's absence.
14.Rakesh Kumar is a certificate holder and at the time of the alleged offences was not a director of the Corporation.
15. In alleged contravention of section 32 of the Act, Rajni Kumar has not properly supervised the real estate business of the Corporation and has let her husband operate the business in her absence.
Rakesh Soni Kumar
16.Rakesh Kumar (aka Roni Soni), who obtained his certificate on 30 September 2010 has been acting in the capacity of Licensee in Charge and running the day to day operations of the business since it commenced trading in June 2010.
17.The above has been confirmed in statements by 2 ex-employees and the Manager (Appointed) David Lambe. As Rakesh Kumar has used the licence of Rajni Kumar to manage the business and act as the licensee in charge, he is therefore knowingly concerned in the offences of the Corporation as per section 213(a), (b), (c), & (d) of the Act.
Ice Stefanovski
Ice Stefanovski is a certificate holder and was director of The Soni Group Pty Ltd at the time of the offences; he is therefore taken to have contravened the same offences as the Corporation as per section 218 of the Act.
Loses and Gains
At this stage, there have been no claims made on the Property Services Compensation Fund. However, consumers have been put to substantial risk concerning their trust account funds and it is evident that those involved in the business of the Corporation have benefited from the unlawful use of trust account funds. The deficient funds have now been repaid to the trust account.
NOTICE TO SHOW CAUSE
On 28 March 2012 a Notice to Show Cause was issued to Mr Kumar under section 195 of the Act. The Notice was issued because the delegate was of the opinion there was reasonable cause to believe that a ground existed under section 191(a), 191(c), 191(d) and 191(e) of the Act for taking disciplinary action against Mr Kumar.
Applicable legislation
The Act provides for the licensing, regulation and discipline of persons or companies carrying on a business in the real estate industry.
The terms "real estate agent" and "real estate salesperson" are defined in section 3 of the Act.
Section 8(1)(a) of the Act prohibits a natural person from carrying on the business of a real estate agent unless the person is the holder of an appropriate licence.
Section 10 of the Act provides that salespersons and managers are required to hold a certificate of registration. Section 10 provides:
10 Salespersons and managers require certificate of registration
(1) A person must not do any of the following things unless the person is the holder of a certificate of registration:
(a) be or remain as a real estate salesperson, stock and station salesperson, business salesperson or registered manager in the employment of a person licensed (or required to be licensed) under this Act,
(b) represent, whether expressly or impliedly, that the person is a real estate salesperson, stock and station salesperson, business salesperson or registered manager in the employment of a person licensed (or required to be licensed) under this Act,
(c) act as or exercise any of the functions of a real estate salesperson, stock and station salesperson, business salesperson or registered manager.
Maximum penalty: 100 penalty units.
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Section 14(1) of the Act provides among other things that a natural person is eligible to hold a licence or a certificate of registration only if the Director- General is satisfied that the person is "fit and proper" to hold the licence or certificate of registration.
Section 86 of the Act provides:
86 Trust money to be paid into trust account
(1) Money received for or on behalf of any person by a licensee in connection with the licensee's business as a licensee:
(a) is to be held by the licensee or (if the licensee is employed by a corporation) by the corporation, exclusively for that person, and
(b) is to be paid to the person or disbursed as the person directs, and
(c) until so paid or disbursed is to be paid into and retained in a trust account (whether general or separate) at an authorised deposit-taking institution in New South Wales and approved by the Director-General for the purposes of this Part.
(2) If the licence is held by a corporation, the trust account is to be in the name of the corporation and in any other case is to be in the name of the licensee or of the firm of licensees of which the licensee is a member.
(3) The name of a trust account and the description of the trust account in the books and records of the licensee and also on all cheques drawn on the trust account:
(a) must include the name of the licensee corporation, licensee or firm of licensees in whose name the trust account is kept, and
(b) must include the words "Trust Account", and
(c) may include, at the end of the account's name, a name or other matter to identify the person on whose behalf money in the account is held.
(4) When opening a trust account at an authorised deposit-taking institution for the purpose of complying with this section, the licensee concerned must ensure that the authorised deposit-taking institution is notified in writing that the account is a trust account required by this Act.
(5) A licensee must, within 14 days after closing a trust account, notify the Director-General in writing of the closure.
Maximum penalty: 100 penalty units.
Section 191 of the Act sets out certain grounds upon which disciplinary action can be taken against a person. It provides:
191 Grounds for disciplinary action
Disciplinary action under this Part can be taken against a person who is or was the holder of a licence or certificate of registration on any one or more of the following grounds:
(a) the person has contravened a provision of this Act or any other Act administered by the Minister, or the regulations under any such Act, whether or not the person has been prosecuted or convicted of an offence in respect of the contravention,
(b) the person has contravened a condition of the licence or certificate of registration,
(c) the person has, in the course of carrying on business or exercising functions under the licence or certificate of registration, acted unlawfully, improperly, unfairly or incompetently,
(d) the person is a disqualified person or is otherwise not eligible under section 14 to hold a licence or certificate of registration,
(e) the person is not a fit and proper person to be involved in the direction, management or conduct of the business of a licensee,
(f) the person has failed to pay any part of a contribution or levy that is due and payable under Part 10 (Compensation Fund),
(g) the person has breached an undertaking given by the person to the Director-General under this Act or the Fair Trading Act 1987, in respect of the person's conduct of business or exercise of functions under the licence or certificate of registration,
(h) the person has failed to comply with a direction given to the person by the Director-General pursuant to the taking of disciplinary action under this Part,
(i) the person has failed to pay a monetary penalty imposed on the person by the Director-General pursuant to the taking of disciplinary action under this Part,
(j) the issue of the person's licence or certificate of registration was obtained by fraud or mistake,
(k) grounds specified in the regulations as grounds for the taking of disciplinary action against a person under this Act.
Section 192 of the Act sets out the types of disciplinary action can be taken. It provides:
192 Disciplinary action
(1) Each of the following actions is disciplinary action that the Director-General can take against a person under this Act:
(a) caution or reprimand the person,
(b) give a direction to the person requiring the person to give a specified undertaking to the Director-General as to the manner in which the person will conduct business or exercise functions under a licence or certificate of registration held by the person,
(c) give a direction to the person requiring the person to take specified action within a specified time in connection with the conduct of business or the exercise of functions under a licence or certificate of registration,
(d) impose a monetary penalty on the person of an amount not exceeding 100 penalty units in the case of an individual or 200 penalty units in the case of a corporation,
(e) impose a condition on the person's licence or certificate of registration,
(f) suspend the person's licence or certificate of registration for a period that does not exceed the unexpired term of the licence or certificate of registration,
(g) cancel the person's licence or certificate of registration,
(h) declare the person to be a disqualified person for the purposes of this Act, either permanently or for a specified period,
(i) disqualify the person from being involved in the direction, management or conduct of the business of a licensee.
(2) A power conferred by this Act to take disciplinary action against a person is a power to take any one or more of the actions that constitute disciplinary action.
(3) When a licence or certificate of registration is suspended, it is taken not to be in force except for such provisions of this Act or the regulations as the regulations may prescribe as provisions that remain applicable to a suspended licence or certificate of registration.
Section 218 of the Act provides:
218 Liability of directors etc for offences by corporation-accessory to the commission of the offences
(1) For the purposes of this section, a corporate offence is an offence against this Act or the regulations that is capable of being committed by a corporation.
(2) A person commits an offence against this section if:
(a) a corporation commits a corporate offence, and
(b) the person is:
(i) a director of the corporation, or
(ii) an individual who is involved in the management of the corporation and who is in a position to influence the conduct of the corporation in relation to the commission of the corporate offence, and
(c) the person:
(i) aids, abets, counsels or procures the commission of the corporate offence, or
(ii) induces, whether by threats or promises or otherwise, the commission of the corporate offence, or
(iii) conspires with others to effect the commission of the corporate offence, or
(iv) is in any other way, whether by act or omission, knowingly concerned in, or party to, the commission of the corporate offence.
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The Respondent's Case
The Respondent relies on material filed pursuant to section 58 of the Administrative Decisions Tribunal Act 1997. Mr Coss provided written and oral submissions in support of the determination.
The Respondent lead evidence in relation to the breaches of the Act by the Corporation and by Ms Kumar. As noted above, it is alleged that the Corporation has misused trust funds by paying business expenses from the sales trust account, that a significant deficiency existed in the sales trust account of the Corporation and there were numerous other breaches of the Act in relation to the maintenance of accounts of the Corporation. It is alleged that the Corporation breached section 86 of the Act by failing to retain in a trust account, monies received from clients concerning the sale of properties for which the Corporation was acting as agent.
The Applicant is a certificated employee of the Corporation but not a licence holder. He was appointed as joint director of the Corporation in February 2012. The Respondent contends that, in the absence of Ms Kumar, the Corporation's licensee in charge, the Applicant was regularly running the day-to-day operations of the Corporation.
The Respondent further contends that as a person concerned in the management of the Corporation and someone who was in a position to influence the conduct of the Corporation, the Applicant is to be taken to have contravened the same provision as the Corporation: section 218 of the Act.
The Respondent relies on the evidence of Edwin Keith Paulin, a licensed real estate agents who worked for the Corporation from approximately June 2010 to February 2011. Mr Paulin provided a written statement and also attended the hearing, gave evidence and was cross-examined.
Mr Paulin's evidence was that he was interviewed for a position with the Corporation in May or June 2010. The Applicant and Mr Stefanovski conducted that interview and Mr Paulin started at the agency a few weeks later. He worked on a commission only basis.
Mr Paulin stated that the Applicant introduced himself as the Principal and Director of the Corporation. He said that he was also under the impression the Applicant was the licensee in charge because the Applicant performed the tasks of a licensee in charge; such as supervising and hiring staff, giving daily work instructions, supervising the business, drawing cheques and paying wages. On occasions he observed the Applicant doing the banking.
Mr Paulin stated that the Applicant also brought in sales business and marketed and sold properties to prospective purchasers. He gave evidence that the Applicant was selling properties when he arrived and continued to sell properties. He gave specific examples of property sales in which the Applicant was involved. He gave evidence that he was at a meeting with the Applicant and a developer in late August - early September 2010 which resulted in the Corporation receiving the exclusive agency agreement for the sale of 88 units at Pemulwuy. Mr Paulin's evidence was that the Applicant entered into negotiations, discussed finishes, colour schemes and pricing and obtained an exclusive agency agreement. At the time, the Applicant was uncertificated.
Mr Paulin said that he reported to the Applicant in office meetings and received day-to-day instructions from him. During his employment he did not receive any instructions or supervision from Ms Kumar on any day-to-day matters relating to sales. His evidence was that Ms Kumar was a "stay at home mum" - that she was often away for periods of two weeks or more and only attended the office sporadically. She sat near him and he was acutely aware of whether she was in the office or not on a daily basis. He stated that in her absence the Applicant acted as the licensee-in-charge.
Mr Paulin was subject to extensive cross-examination on these issues and his testimony was unshaken.
The Respondent also relies on the reference to the Applicant in the Corporation Business Plan dated 22 December 2010 that indicates that his role focuses on office management, sales and property management for the Corporation.
The Respondent submits that the Applicant was negotiating with developers and selling properties whilst uncertificated.
The Respondent also relies on photographs from the website and documents which include the full history of the sale of a property between June 2010 and August 2010. The documentation shows that the Applicant was the Listing Agent and the contact agent; the sale date was 5 July 2010 and the settlement date as 27 August 2010. At the time, the Applicant was uncertificated.
The Respondent submits that these documents conclusively prove that the Applicant was selling property whilst uncertificated. Further, it is submitted that this in itself is more than sufficient to justify the cancellation of the Applicant's certificate of registration and him being declared a "disqualified person" for 5 years.
The Applicant's Case
The Applicant relies on his own evidence. He provided an affidavit in which he set out his background and experience showing his success as a real estate sales person. He stated that he has never had a customer complaint in connection with his sales work. He wishes to continue in that role and to pursue and develop his career within the real estate industry.
The Applicant attended the hearing, gave evidence and was subject to cross-examination.
He gave evidence of his role with the Corporation and asserted that he was only ever involved in sales. He said that prior to obtaining his certificate of registration he was involved in setting up the agency office but did not take part in real estate sales activities.
He denied that he had ever dealt with either the trust account or general account for the agency or undertook banking for the agency. He denied that Ms Kumar's attendance at the office was only sporadic. His evidence was that she attended daily. He denied that he had ever performed the role of licensee-in-charge if Ms Kumar was away from the office.
The Applicant agreed that he interviewed Mr Paulin for a position in the agency. He said that he did so at the request of Mr Stefanovski but he denied that he was introduced as a principal of the agency.
The Applicant accepted that he referred to himself as the Sales Principal.
He gave evidence in relation to the Corporation Business Plan and said that it was prepared for submission to potential franchisors two years before the agency started. It was therefore only a proposal and not an accurate account of what arrangements were actually put in place.
He denied that he was engaged in real estate sales activities prior to receiving his certificate of registration on 30 September 2010. However, he accepted that documentation in evidence suggested otherwise. He accepted that a property at 305-317 Pastoral Circuit Pemulwuy is recorded as sold by him on 28 September 2010. He largely attributed this recording of details in the documentation to the way the software operated. He said that when Mr Paulin left the agency, the software operated in such a way that it showed all properties handled by Mr Paulin as having been handled by the Applicant.
He stated that he was not paid for his work with the agency. He said that he was interested in growing the agency and was content to receive payment later.
The Applicant stated that he provided Ms Kumar with help and assistance in the operation of the Corporation, particularly during the period of the shareholder dispute between his wife and Mr Ice Stefanovski and Ms Francesca Totaro.
The Applicant stated that prior to receiving his certificate of registration he was engaged in setting up the office. He also provided Ms Kumar with help and assistance in that regard. He denied that he undertook any real estate related activities in that period. He denied that he acted as licensee in charge of the agency or managed the business. His evidence was that after receiving his certificate of registration he was only engaged in real estate sales.
Discussion
The legislative regime outlined in the Act is intended to regulate the industry and to provide a measure of protection to consumers in their dealings with the industry.
It provides a framework that requires all licence and certificate holders to adhere to a standard that is expected within the industry. This standard enhances consumer confidence in their dealings with licensed real estate agents.
The licensing regime aims to ensure that those engaged in the business of real estate have the appropriate knowledge and skill to carry out their roles in a competent, honest and professional manner.
The legislation requires a holder of a certificate of registration to be a fit and proper person to hold the certificate. It is expected that the holder will exercise their role honestly, fairly and professionally, exercising reasonable skill, care and diligence.
An issue for determination is whether or not the Applicant can be considered to be a fit and proper person to hold the certificate of registration.
The expression "fit and proper" has been judicially considered on a number of occasions. In Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321, Chief Justice Mason explained that, at 380:
'The question whether a person is fit and proper is one of value judgment. In that process the seriousness or otherwise of particular conduct is a matter for evaluation by the decision maker. So too is the weight, if any, to be given to matters favouring the person whose fitness and propriety are under consideration. '
Toohey and Gaudron JJ said at 380:
"The expression "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 on 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. The list is not exhaustive but it does indicate that, in certain contexts, character (because it provides indication of likely future conduct) or reputation (because it provides indication of public perception as to likely future conduct) may be sufficient to ground a finding that a person is not fit and proper to undertake the activities in question. "
A person's fitness is to be gauged in the light of the nature and purpose of the activities that the person will undertake. In Hughes and Vale Pty Ltd v New South Wales (No. 2) [1955] HCA 28; (1955) 93 CLR 127 the High Court said (at 156-7):
"The expression 'fit and proper' is of course familiar enough as traditional words when used with reference to offices and perhaps vocation. But their very purpose is to give the widest scope for judgment and indeed for rejection. 'Fit' (or 'idoneus') with respect to an office is said to involve three things, honesty, knowledge and ability ... When the question was whether a man was a fit and proper person to hold a licence for the sale of liquor it was considered that it ought not to be confined to an inquiry into his character and that it would be unwise to attempt any definition of the matters which may legitimately be inquired into; each case must depend upon its own circumstances. "
In Sobey v Commercial and Private Agents Board 20 SASR 70 Walters J said:
"In my opinion what is meant by that expression is that the Applicant must show not only that he is possessed of a requisite knowledge of the duties and responsibilities evolving upon him as the holder of a particular licence ... but also that he is possessed of sufficient moral integrity and rectitude of character as to permit him to be safely accredited to the public ... as a person to be entrusted with the sort of work which the licence entails. "
I am satisfied on the evidence before me that the issues relating to the management of the agency accounts are established. That is, the Corporation misused trust funds by paying business expenses from the sales trust account, that a significant deficiency existed in the sales trust account of the Corporation and there were numerous other breaches of the Act in relation to the maintenance of accounts of the Corporation
The Applicant was appointed as a director of the Corporation on 10 February 2012. The question arises in regard to whether the Applicant was concerned in the management of the corporation prior to that date. In this regard the evidence of Mr Paulin is relevant.
Much of Mr Paulin's evidence was not contradicted and I accept that evidence.
The evidence given by Mr Paulin clearly established that the Applicant was working uncertificated prior to 30 September 2010. The Applicant was selling properties and he was also marketing to developers.
I accept the evidence that in late August and early September 2010 the Applicant entered into negotiations, discussed finishes, colour schemes and pricing with a property developer and obtained an agency agreement in relation to 88 units at Pemulwuy.
Mr Paulin's evidence also established that Ms Kumar was absent from the agency for extended periods. I accept the evidence that the Applicant was running the day-to-day operations of the agency in Ms Kumar's absence. It seems to me that it is improbable that the Applicant would not have been aware of the deficit in the Sales Trust Account at about the same time that Ms Kumar became aware of it.
While it is not necessary that I determine the issue, the evidence supports the assertion that the Applicant was concerned in the management of the corporation prior to his appointment as a director. The evidence also suggests that he would have been in a position to influence the conduct of the corporation for the purposes of section 218 of the Act.
I accept that the Respondent's contention that the Applicant was performing numerous real estate functions whilst unlicensed and uncertificated. He assumed the role of Licensee-in-Charge even and was concerned in the management of the agency business.
As noted above, it is clear from the decision in Hughes and Vale Pty Ltd v New South Wales that fitness and propriety 'involve three things, honesty, knowledge and ability'. In my view, the Applicant's conduct indicates that he does not have the 'requisite knowledge of the duties and responsibilities evolving upon him' as the holder of a certificate. He therefore cannot be held out as a person who is of "fit and proper" to hold a certificate of registration under the Act.
That being the case, it seems to me that the decision to cancel the Applicant's certificate of registration was the correct and preferable decision.
The Applicant's lack of candour in relation to the roles that he performed in the agency also casts doubt on whether his conduct could be expected to change should he be permitted to continue to work in the industry in the short term. There must be doubt as to 'whether improper conduct ... 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'.
That being the case, it is my view that some time out of the industry is warranted. The Respondent's determination was that the Applicant is a disqualified person for the purposes of the Act for a period of five years; and that he is disqualified from being involved in the direction, management or conduct of the business of a licensee for a period of five years. I agree with that determination.
Accordingly, the Respondent's determination should be affirmed. The period of disqualification is dated from 7 July 2012.
I note that a stay is in place in regard to the Applicant's certification. I am not aware of any issues having arisen during the period of the stay. Given the outcome of this matter and its significance for the Applicant, it is my view that the stay should remain in place for a period of 28 days from the date of this decision.
Orders
1. The decision under review is affirmed.
2. This decision takes effect 28 days from the date of this decision.
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Decision last updated: 03 June 2013
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