REAL ESTATE AND BUSINESS AGENTS SUPERVISORY BOARD and PARRELLA

[2007] WASAT 122

REAL ESTATE AND BUSINESS AGENTS SUPERVISORY BOARD and PARRELLA [2007] WASAT 122

Last Update :29/05/2007

Jurisdiction:	STATE ADMINISTRATIVE TRIBUNAL	Citation No:	[2007] WASAT 122
Published:
Act:	REAL ESTATE AND BUSINESS AGENTS ACT 1978 (WA)
Case No:	VR:43/2007	Heard:	22 MARCH 2007
Coram:	JUSTICE M L BARKER (PRESIDENT), MS J HAWKINS (MEMBER), MR D LIMNIOS (SESSIONAL MEMBER)	Delivered:	21/03/2007
No Pages:	6	Judgment Part:	1 of 1
Result:	Suspension of agent Agent and bankers restrained from dealing with trust account Appointment of supervisor Costs awarded against agent
Category:	B

Parties & Catchwords


Judgment

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : VOCATIONAL REGULATION ACT : REAL ESTATE AND BUSINESS AGENTS ACT 1978 (WA) CITATION : REAL ESTATE AND BUSINESS AGENTS SUPERVISORY BOARD and PARRELLA [2007] WASAT 122 MEMBER : JUSTICE M L BARKER (PRESIDENT)

MS J HAWKINS (MEMBER)
MR D LIMNIOS (SESSIONAL MEMBER)

HEARD : 22 MARCH 2007 DELIVERED : Edited reasons delivered extemporaneously on 22 MARCH 2007 FILE NO/S : VR 43 of 2007 MATTER : REAL ESTATE AND BUSINESS AGENTS SUPERVISORY BOARD and

CARMELO CHARLES PARRELLA

BETWEEN : REAL ESTATE AND BUSINESS AGENTS SUPERVISORY BOARD

Applicant

AND

CARMELO CHARLES PARRELLA
Respondent

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Catchwords:

Vocational regulation - Real estate agent - Trust account deficiency - Suspension - Appointment of a supervisor - Restraint on dealing with trust account

Legislation:

Real Estate and Business Agents Act 1978 (WA)

Result:

Suspension of agent
Agent and bankers restrained from dealing with trust account
Appointment of supervisor
Costs awarded against agent

Category: B

Representation:

Counsel:

Applicant : Ms J King
Respondent : Mr M Hawkins

Solicitors:

Applicant : Real Estate and Business Agents Supervisory Board
Respondent : Holborn Lenhoff Massey

Case(s) referred to in decision(s):

Conlan (as Liquidator of Oakleigh Acquisitions Pty Ltd) v Registrar of Titles [2001] WASC 201, (2001) 24 WAR 299
Re Global Finance Group Pty Ltd (In Liq) (Supervisor Appointed) and Global Mortgage Investments Pty Ltd (In Liq); ex parte Read and Herbert (as Liquidators of Global Mortgage Investments Pty Ltd and as Liquidators of Global Finance Group Pty Ltd) [2002] WASC 63, (2002) 26 WAR 385

(Page 3)

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

1 Following the admission by Carmelo Charles Parrella, a real estate agent, to the Real Estate and Business Agents Supervisory Board of deficiencies in his business' trust accounts, the Board urgently sought the suspension of his registration, the appointment of a supervisor to his business and other consequential orders.

2 The agent sought a period of grace before suspension to allow him to finalise the contract of sale of his business he had made the day of the hearing of the application in the Tribunal, to assist in the repayment of the outstanding money.

3 The Tribunal determined that the public interest required the agent's immediate suspension, and appointed a supervisor to his business. The agent was also restrained from dealing with the business' bank accounts and ordered to pay the Board's costs.

Findings

4 The following remarks are an edited version of what the President said orally on behalf of the Tribunal when orders were made by the Tribunal on 22 March 2007 following an urgent hearing.

5 The members of the Tribunal have had the opportunity to discuss, in the light of the various submissions and contributions made on behalf of the parties, the application made by the Real Estate and Business Agents Board (Board) for various orders which would suspend Carmelo Charles Parrella (agent) and appoint a supervisor with other consequential orders. We believe, in the end, that those orders should be made as requested.

6 We have been told that today the agent has purported to sell his rent roll and business to a third party for a sum that, if effected, should help to cover the deficiency.

7 We recognise that in these very difficult circumstances the concluded sale of the agent's business may well produce some useful financial outcomes. I have to say, however, that even with all the information currently before it, the Tribunal is not entirely convinced that a sale would produce the win-win situation the agent contends for. The fact is that

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some $850 000 or more is being claimed against him by the Australian Taxation Office. We do not have a full financial account before us as one might get at a meeting of creditors in another situation. We appreciate that counsel have attempted to put before us the main matters known. It appears there is also a sum of $380 000 in deficiencies so far as the agent's trust accounts are concerned. We have amounts of about, just on a simple addition of the major sums, $1.2 million that remains to be paid. There is a proposed sale of the roll and business for $900 000. On these calculations, it is not clear just how the so-called win-win situation would be achieved.

8 Against all of that, we have the commendable approach that the agent appears to have taken, to have gone with his lawyers and other advisers to the Board to lay out what has happened. The result is, on the information proffered by the agent himself two days ago to the Board, there is no way he can remain licensed. The public interest is such that the Tribunal believes the public, indeed, would be aghast if we were to leave the agent practising as an agent to facilitate his proposition that there might be some good financial outcomes if he is given a period of grace to complete the contract of sale of his business.

9 We do not think it is appropriate that he should remain licensed at this point. We appreciate that the results of that may be to detrimentally affect the sale contract that has just been put in place. We say "may" because it is not entirely clear that the situation cannot contractually and in other ways, and through further discussions with the Board, still be salvaged. It is not our responsibility, of course, to try and imagine how that can be done, but it may not be beyond the wit of those advising the relevant parties.

10 So, whilst there are some interesting arguments raised by counsel for the parties concerning the functions of a supervisor under the Real Estate and Business Agents Act 1978 (WA) (the Act) in carrying on business for the purpose of concluding or disposing of matters commenced but not concluded on behalf of clients of the business, and as to whether or not that includes the power to act as a real estate agent and sell properties that are currently the subject of authorities to sell, we do not think that the resolution of those issues would really help to resolve the primary issue at hand and so we do not finally seek to resolve them.

11 I must say though that, for present purposes, I think there is much to be said so far as the law is concerned for the Board's view. In a legal sense, the suspension of an agent may well bring to an end any authority

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to sell that the agent holds, and so the supervisor would not have any authorities to sell to act under upon his or her appointment. Even if that were not the legal case, at a practical level it would mean that the supervisor, whether or not a licensed agent, would probably have to engage people who would then have to carry on the business in a more full way, and that, I suspect, is not something that the Act actually contemplates. To the extent that legal precedents bear on the legislation we are dealing with by reference to other settings, they rather support the Board's view, I think: see Conlan (as Liquidator of Oakleigh Acquisitions Pty Ltd) v Registrar of Titles [2001] WASC 201, (2001) 24 WAR 299; and Re Global Finance Group Pty Ltd (In Liq) (Supervisor Appointed) and Global Mortgage Investments Pty Ltd (In Liq); ex parte Read and Herbert (as Liquidators of Global Mortgage Investments Pty Ltd and as Liquidators of Global Finance Group Pty Ltd) [2002] WASC 63, (2002) 26 WAR 385.

12 The practical way forward that was suggested on behalf of the agent by Mr Hawkins was not, therefore, to suspend him, but to allow him, effectively, to work with the supervisor to sell properties. We think that is the sort of situation where the fundamental principles underlying the Act would be breached if we were to allow that to happen. You would have an agent continuing to act as an agent, who has just told the Board how he has brought about deficiencies in his trust account totalling some $380 000; and yet he is there, in the marketplace acting, at least in part, for his own benefit trying to bring about a situation where the contract of sale of his business can be carried into effect and the $900 000 purchase price received by him.

13 Our desire is not in any way to financially or otherwise punish anybody when it comes to dealing with this matter. We are very much concerned about the overall protection of the public interest and what appears appropriate in the administration of the Act. So for those reasons, relatively shortly stated, we do not think we can accede to the proposal put on behalf of the agent.

14 We think it is appropriate to make orders along the lines of those enumerated in the Board's minute. That is not to say we are always bound to make all the orders requested, but I think, in a case like this, most of those ought to be made. I am not quite certain that par 5 is necessary. I think Ms King made it clear earlier that she accepts that that is something that might come later and a fresh application, if necessary, can be made.

(Page 6)

Orders

15 The Tribunal ordered:

1. The agent is suspended from carrying on business as a licensed real estate agent until further order of the Tribunal.

2. The agent is restrained and his bankers and their respective servants are restrained from dealing with all or any of the bank accounts of the agent's real estate business.

3. The Board is authorised to appoint a supervisor to the business.

4. Any supervisor appointed by the Board is empowered to withdraw moneys from any bank account of the business.

5. The agent pay the costs of this application.

6. Either party has liberty to apply at short notice.

I certify that this and the preceding [15] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

___________________________________

JUSTICE M L BARKER, PRESIDENT