Riley v Commissioner for Fair Trading, New South Wales Office of Fair Trading
[2008] NSWADT 95
•25 March 2008
CITATION: Riley v Commissioner for Fair Trading, New South Wales Office of Fair Trading [2008] NSWADT 95 DIVISION: General Division PARTIES: APPLICANT
RESPONDENT
Colleen Riley
Commissioner for Fair Trading, New South Wales Office of Fair TradingFILE NUMBER: 073374 HEARING DATES: 12 March 2008 SUBMISSIONS CLOSED: 13 March 2008
DATE OF DECISION:
25 March 2008BEFORE: Handley R - Judicial Member CATCHWORDS: Conveyancer - grant of licence MATTER FOR DECISION: Principal matter LEGISLATION CITED: Conveyancers Licensing Act 2003
Property, Stock and Business Agents Act 2002CASES CITED: Australian Broadcasting Commission v Bond (1990) 170 CLR 231
Fitton v Commissioner for Fair Trading, NSW Office of Fair Trading [2007] NSWADT 72
Hughes and Vale Pty Ltd v New South Wales (No 2) (1955) 93 CLR 127
McBride v Walton (NSW Court of Appeal, unreported, 15 July 1994)
Trlin v Commissioner of Fair Trading [2003] NSWADT 222REPRESENTATION: M Parasyn, solicitor
P Griffin, solicitorORDERS: The decision under review is set aside and in substitution therefor the Applicant, Ms Riley is to be granted a conveyancer’s licence subject to the following condition:
“The Licensee must not carry out conveyancing work otherwise than as an employee of a licensee who holds an unrestricted licence or a solicitor who holds an unrestricted practising certificate until 30 June 2010. This condition will only be removed after that date if the Licensee can provide evidence that satisfies the Commissioner for Fair Trading that she has gained sufficient knowledge and experience regarding a licensee’s responsibilities in conducting a business in accordance with the requirements of the Conveyancers Licensing Act 2003.”
REASONS FOR DECISION
1 On 14 December 2007, Colleen Riley applied to the Tribunal for a review of a decision of the Commissioner for Fair Trading (‘the Commissioner’) to refuse the renewal of Ms Riley’s conveyancer’s licence on the ground that she is not a fit and proper person to hold a licence to conduct conveyancing work pursuant to the Conveyancers Licensing Act 2003 (‘the 2003 Act’).
Background
2 Over many years, Ms Riley worked for various solicitors undertaking legal secretarial work. In 2000, she commenced a licensed conveyancer’s course at Macquarie University, which she completed at the end of 2002. Ms Riley applied to the Office of Fair Trading (‘OFT’) for a conveyancer’s licence, which was granted from 1 July 2004. From January 2004, Ms Riley was employed by ‘Weldon Legal’ undertaking conveyancing work.
3 In March 2006, Ms Riley responded to an advertisement by ‘Walker Conveyancing’ for a licensed conveyancer/office manager. Ms Riley had two interviews for the position and was subsequently offered the position, commencing that employment on 1 May 2006. From about 1 June 2006, Ms Riley was registered as a new proprietor of the business Walker Conveyancing together with Sadiye Ince.
4 The business Walker Conveyancing had formerly been owned by Elizabeth and Peter Walker, the licensee being Elizabeth Walker. They sold the business to Levent Ince (Sadiye Ince’s husband) and Stephen Oakley, licensed real estate agents, on 31 January 2006. Mr Oakley is the licensee in charge of ‘Minchinbury Real Estate One’.
5 In October 2007, when looking for a file, Ms Riley and a conveyancing assistant employed by Walker Conveyancing, Diana Cremona, found a letter addressed to Mr Oakley, dated 29 May 2006, from a solicitor, Russell Kelly. Mr Kelly advised that a person could not conduct a conveyancing business for fee or reward unless the holder of a conveyancer’s licence. Moreover, the holder of a licence or certificate of registration under the Property, Stock and Business Agents Act 2002 is disqualified from holding a conveyancer’s licence.
6 On 27 June 2007, Ms Riley applied to the OFT for the renewal of her conveyancer’s licence. In completing the application, Ms Riley answered ‘Yes’ to the question “Are you carrying on the activities of a conveyancer under the Act in a business partnership?” Ms Riley stated that the name of the business was ‘Walker Conveyancing’ with the proprietors being herself and “Sadiye Ince (Silent partner)”. On receipt of the application, the OFT made inquiries concerning Ms Riley, Ms Ince, and Walker Conveyancing.
7 On 27 November 2007, a delegate of the Commissioner, Adrienne Farquhar, Acting Coordinator, Property Services Licensing, of the OFT, notified Ms Riley of her decision to refuse the renewal of Ms Riley’s licence. By letter dated 5 December 2007, Ms Riley sought an internal review of that decision. On 13 December 2007, another delegate of the Commissioner confirmed the decision after an internal review. The delegate found:
8 The delegate found that, as a result, there were grounds for disciplinary action against Ms Riley and, because of the contraventions of the Act, she was not considered a fit and proper person to hold a licence and therefore not eligible to hold a licence.
“(b) The applicant is in partnership with a person who is not a licensee under the Act and, because the partnership with the other person has not been approved by the Commissioner, the applicant has contravened section 27(1) of the Act;
(c) The applicant is sharing the receipts of a conveyancing business with two people who are not licensees under the Act and, as sharing of the receipts with the other persons has not been approved by the Commissioner, the applicant has contravened section 26(1) of the Act;”
9 On 17 December 2007, Ms Riley filed an application for review of this decision with the Tribunal. At a Directions Hearing on 18 December 2007, Deputy President Hennessy ordered a stay of the decision on condition (1) that Ms Ince was removed as a proprietor of Walker Conveyancing by 21 December 2007, and (2) that Walker Conveyancing not accept any instructions for purchase or conveyance pending further order of the Tribunal.
10 In her statement dated 11 February 2008, Ms Riley said that following the initial hearing on 15 January 2008, she resigned from Walker Conveyancing. On that day, she also signed a form transferring the business name Walker Conveyancing to Ms Walker. However, when arrangements for Ms Walker to take over the business were not concluded, Ms Riley signed a cessation of use of business name form, which was registered on 18 January 2008. On 17 January 2008, Weldon Legal took over the conveyancing work of Walker Conveyancing. On 31 January 2008, Ms Riley commenced employment with Weldon Legal. Since 15 January 2008, she has only undertaken conveyancing work as an employee of Weldon Legal, and has not conducted any activities of a licensed conveyancer.
11 At the hearing on 15 January 2008, I gave directions for the filing and serving of further evidence by the parties, following, which the Respondent was to reconsider his decision taking into account, any further evidence. On 28 February 2008, a delegate of the Commissioner notified the Tribunal that, following a review, the delegate had decided to confirm the determination for the reasons set out in the internal review.
Relevant Legislation
12 Section 8(1) provides, relevantly, that a natural person is eligible to hold a conveyancer’s licence only if the Commissioner is satisfied that the person “(b) is a fit and proper person to hold a licence”. Section 13(1) states: “A licence must not be granted to an applicant unless the applicant is eligible to be granted a licence (as provided by section 8).” Section 14 provides for a licence to be granted subject to conditions, including “(a) a condition prohibiting the licensee from carrying out conveyancing work otherwise than as an employee of a licensee whose licence does not contain such a condition”.
13 Section 10 provides, relevantly, that a person is a disqualified person for the purposes of the Act if the person “(h) is in partnership with a person who is a disqualified person” or “(q1) is the holder of a licence or certificate of registration under the Property, Stock and Business Agents Act 2002”.
14 Section 26(1) states:
15 Section 27(1) states:
“(1) A licensee must not share the receipts of a conveyancing business with another person unless:
Maximum penalty: 200 penalty units in the case of a corporation or 100 penalty units in any other case.”
(a) the other person is a licensee, or
(b) the sharing of those receipts with that other person is approved by the Director-General and does not contravene the provisions of any regulation under this section.
The Applicant’s Evidence
“(1) A licensee must not be in partnership with another person unless:
Maximum penalty: 200 penalty units in the case of a corporation or 100 penalty units in any other case.”
(a) the other person is a licensee, or
(b) the partnership with that other person is approved by the Director-General and does not contravene the provisions of any regulation under this section.
16 The Tribunal admitted into evidence the following statements tendered by the Applicant: statements by Ms Riley dated 10 January 2008 and 11 February 2008, a statement by Diana Cremona dated 10 January 2008, and a statement by Philip Weldon dated 11 March 2008. Only Ms Riley was required to give evidence at the hearing.
17 Ms Riley stated that she commenced employment in 1967 as a “junior registration clerk” in a solicitor’s office. She has undertaken conveyancing work since 1986. In 2000, with encouragement from her then employer, Ms Riley commenced a licensed conveyancer’s course at Macquarie University, which she completed in late 2002. From January 2004, she worked as a licensed conveyancer with Weldon Legal, leaving that employment on 17 March 2006 to work for another solicitor. However, shortly after, the solicitor decided that he did not need a licensed conveyancer working in his office, so Ms Riley left after about three weeks.
18 In cross-examination, Ms Riley was asked about the course she studied at Macquarie University. She said she had studied the law relevant to conveyancing including the code of conduct for conveyancers, with which she believes she has always complied. She has never had any complaint about her conveyancing work, both while working for solicitors and as a licensed conveyancer. She has been a member of the Australian Institute of Conveyancers since commencing her studies – a total of about six years, but has otherwise had no involvement in the work of the Institute. The Institute conducted regular audits of the work of Walker Conveyancing, as recently as last year, when the business achieved a 98 percent “pass”.
19 Ms Riley said that in March 2006, she saw a position described as “Licensed Conveyancer/Office Manager” posted by Elizabeth Walker on the Australian Institute of Conveyancers’ website. She contacted Ms Walker, who explained that she had sold her business and required a licensed conveyancer for the office. Ms Riley said, at that time, she knew Ms Walker was an experienced licensed conveyancer but, otherwise, she had no personal experience of her. In late March 2006, Ms Riley attended an interview with Ms Walker and Stephen Oakley, who, Ms Walker told her, was the new owner of the business. Ms Walker said the business would operate under the licence of the person employed in the advertised position, with Ms Walker ceasing to be the licensee. Ms Riley said she did not ask any questions at the interview about Mr Oakley’s background.
20 Ms Riley said she attended a second interview a few weeks later, with Ms Walker, Mr Oakley and Levent Ince present. The purpose of the interview was for her to meet Mr Ince, whom she had not met previously, and who asked her some questions about her experience. Ms Riley was by then aware that Mr Ince was the second of the two new owners of the business. Ms Walker told her that both Mr Oakley and Mr Ince were real estate agents, but Ms Riley did not ask them any questions about their background or business. She was not aware that they held the franchise for RAMS home loans for the area.
21 Ms Riley said her dealings were principally with Ms Walker who explained to her the proposed business structure, and that neither Mr Oakley nor Mr Ince would have any direct involvement in the business and would be kept at arms length. Ms Riley was aware that they were disqualified under the Act from running a conveyancing practice. Mr Ince’s wife, Sadiye Ince, was named as the person who would be the other proprietor and silent partner in Walker Conveyancing, and who would play no part in its running. Ms Ince was not a disqualified person, but her involvement would require the approval of the Commissioner. Ms Riley did not actually meet Ms Ince until December 2006. Ms Walker indicated that she had investigated the proposed structure and that it was legal. Ms Riley said she had no reason to doubt Ms Walker.
22 In cross-examination, Ms Riley said she had no knowledge of Tribunal proceedings involving Ms Walker in 2004, when Ms Walker was found guilty of professional misconduct and privately reprimanded (Commissioner for Fair Trading v Walker [2004] NSWADT 139). Ms Riley said she relied on Ms Walker’s expertise and her assurance that she, Ms Riley, need not concern herself with the business structure.
23 Ms Riley accepted the position, which was offered to her at a salary of $57,770 including superannuation, marginally more than she had been earning previously. Ms Riley commenced her new employment of 1 May 2006. Ms Walker, who had been retained as a consultant to the business until 30 June 2006, continued to come in regularly – on two or three days a week – to work on files, until the end of June 2006. There were two other employees working in the business at the time: Diana Cremona and Sonia Pisani, who were conveyancing assistants.
24 Ms Riley said that on about 9 June 2006, she signed the form removing Elizabeth and Peter Walker as proprietors of the business name Walker Conveyancing and including herself and Ms Ince as the new proprietors. Ms Riley was asked about a Deed of Indemnity dated 1 June 2006 by which Mr Oakley and Mr Ince agreed to indemnify her against any claims or liabilities during her term as licensee in the running and operating of Walker Conveyancing from 1 June 2006. Ms Riley said although the Deed is dated 1 June 2006, she did not see it until at least a couple of months later. She said she had agreed to the Deed being incorrectly dated because she was happy to have the Deed signed, which she had been promised by Ms Walker and for which Ms Riley had been pressing. She acknowledged that the incorrect date was misleading and to have allowed this was an error on her part.
25 Ms Riley acknowledged that paragraph 4 of the Deed, which stated that she would assume 51 percent ownership of Walker Conveyancing, was also incorrect and misleading. She never owned 51 percent of the business and was never a proprietor of it. At all times, she remained an employee of the business, was paid a wage, had no control over monies received from the business, and did not receive any share of the profits of the business. She was only a nominal proprietor for the purpose of allowing the business to operate.
26 Ms Riley said that on one occasion at Walker Conveyancing’s office, when she was with Mr Ince, she telephoned Mr Weldon, the solicitor for whom she had worked previously, to ask his opinion of the legality of the document. Mr Weldon said he was not familiar with the Act, he was busy at the time, and unable to answer her questions. Mr Ince had told her that he had relied on Ms Walker’s advice in relation to buying the business and the business structure, and had not sought independent legal advice. Ms Riley had a similar discussion with Mr Oakley, who had confirmed this.
27 Ms Riley said she first saw the letter of advice about the business to Mr Oakley from a solicitor, Russell Kelly, dated 29 May 2006, in October 2007. She was “flabbergasted” on seeing it, realising that the arrangement was not legal, and felt “devastated”. She approached Mr Oakley about it and said that if she had known of the letter, she would also have known that Ms Walker’s advice was incorrect. Ms Walker was responsible for arranging the transfer of the business to Mr Oakley and Mr Ince, including obtaining the approval of the Commissioner to Ms Ince being a silent partner in the business, and Ms Riley had thought that she could trust Ms Walker to do whatever was necessary. Nevertheless, Ms Riley acknowledged that the running of the business was her responsibility from 1 July 2006 when she became a registered proprietor.
28 When Ms Riley discussed the letter from Mr Kelly with Mr Oakley and the problems that she was encountering with the renewal of her licence, he said “you need to take Levent and myself to task”, meaning that she should take legal advice about her position. Mr Oakley did not deny that he had received the letter, but did not explain why neither he nor Mr Ince had done anything about it.
29 Ms Riley said she had spoken to Ms Farquhar at the OFT about her licence renewal on 13 September 2007. She answered Ms Farquhar’s questions frankly and honestly because she had nothing to hide. At that time, she still believed Ms Walker had made the necessary arrangements, as Ms Walker had assured her of this. Ms Riley thought Ms Farquhar was looking at the partnership arrangement for Walker Conveyancing, and Ms Riley stated she was not left with the impression that there was anything wrong. Ms Farquhar said she would get back to Ms Riley, but she heard nothing further until she received the refusal letter dated 27 November 2007.
30 On discovering the letter from Mr Kelly in October 2007, Ms Riley guessed the reason for the OFT investigation, but said she did not consider it appropriate to contact Ms Farquhar. Even then, she was still not aware that Ms Ince was not an approved person. Ms Riley denied that her not disclosing the letter to Ms Farquhar was an attempt to protect her position.
31 In cross-examination, Ms Riley said that Walker Conveyancing held “controlled moneys” which were invested with the Commonwealth Bank. She was the only authorised signatory for the release of moneys after settlement. The books for the business were done by an accountant. Ms Riley signed some cheques – for example for ordering certificates, but Mr Oakley was responsible for signing cheques for wages, utility bills etc. The audit by the Australian Institute of Licensed Conveyancers showed that everything was done appropriately.
32 Ms Riley said she did not inform clients of Walker Conveyancing that Mr Oakley and Mr Ince owned the business and that they also ran a real estate business. She did not then know that Mr Oakley had a RAMS home loans franchise. Ms Riley acknowledged that if clients of Walker Conveyancing had been referred from Mr Oakley’s and Mr Ince’s real estate business, then she should have disclosed to them that Mr Oakley and Mr Ince were also the owners of Walker Conveyancing. She did not think of this at the time.
33 Ms Riley said she had trusted Ms Walker to do the right thing. As a result of her experience in this matter, she would never trust a person in the same way again, but would make her own investigations.
34 Diana Cremona, a conveyancing assistant with Walker Conveyancing, in a statement dated 10 December 2008, said that in October 2007, when she was going through the files with Ms Riley in relation to another matter, looking for a letter of indemnity for Ms Walker against future claims, she discovered the letter from Mr Kelly dated 29 May 2006 which she handed to Ms Riley. Ms Cremona stated:
“7. Colleen Riley read the letter and I heard her say, “No one showed me this. This is the first I saw it. I can’t believe that no one showed me this.
35 Philip Weldon, a solicitor, who is the principal of Weldon Legal, in a statement dated 11 March 2008, confirmed that Ms Riley was employed by him from 19 January 2004 to 17 March 2006, and that she obtained her conveyancing licence shortly after commencing that employment. He recalled that at sometime in 2006, Ms Riley, who was with Mr Ince at the time, telephoned him to seek his advice concerning some legal issues over setting up a conveyancing practice, but Mr Weldon could not recall the conversation in any detail except that he did not give Ms Riley any advice in the course of that conversation or subsequently.
8. I saw the expression of Colleen’s face when she read the letter. I can describe it in my words as she was shocked and horrified to find that letter.”
36 Mr Weldon stated:
The Applicant’s Submissions
“13. Colleen Riley’s conduct and professionalism whilst in my employ was impeccable. She was reliable, responsible and performed duties as one would expect of a person devoted to her work. She was professionally competent and always acted with integrity. Clients appreciated her very much.
14. Upon Walker Conveyancing ceasing operations, I had no hesitation in re-employing Colleen Riley. In her time with me since late January 2008 she has again demonstrated a similar professionalism and integrity. She is an ideal employee.”
37 Mr Parasyn, for Ms Riley, said she relied on Ms Walker to set up an appropriate business structure, and Ms Walker assured her that a set of legitimate arrangements were in place. Under the Act, there was provision for the Commissioner to give approval for a silent partner, and it was reasonable for Ms Riley to rely on Ms Walker’s advice that this had been done and approval given for Ms Ince to be a silent partner in the business. Thus, when completing her application for renewal of her conveyancer’s licence in June 2007, Ms Riley answered ‘Yes’ to the question “Are you carrying on the activities of a conveyancer under the Act in a business partnership?”, and revealing that Ms Ince was a silent partner in the business. Mr Ince’s letter to the OFT dated 23 October 2007, shows that Mr Ince and Mr Oakley also relied on advice given by Ms Walker. Mr Ince’s account of what happened is consistent with that of Ms Riley.
38 Mr Parasyn noted that when, at the hearing on 15 January 2008, Ms Riley became aware of the implications of the breach of section 26 and section 27 of the Act, she resigned from Walker Conveyancing, thereby curing the breach.
39 With regard to whether Ms Riley is a fit and proper person, Mr Parasyn referred to relevant case law. He submitted that there is no evidence to suggest that Ms Riley is not honest, as was indicated by her full disclosure in the application for renewal of her licence in 2007. While Ms Riley, who does have the requisite knowledge of the relevant legislation, may have had an ability to investigate the proposed business structure, she relied on Ms Walker, a person whom she knew to be an experienced conveyancer. It was Ms Riley’s trusting Ms Walker that brought everything undone. Ms Riley has learned a great deal from this experience and has indicated that she would never again let this situation arise.
40 Mr Parasyn noted that the ownership arrangements for the business were outside the realm of the consumer, that there have been no complaints about Ms Riley’s work, and the Australian Institute of Conveyancers’ audit of Walker Conveyancing’s business in 2007 showed that it was 98 percent satisfactory. A consumer conducting an internet search of Walker Conveyancing would have found that the business had a licensed conveyancer. Indeed, the events under examination posed no risk to consumers, there being no question as to Ms Riley’s knowledge and ability in performing conveyancing work. Mr Weldon attests to Ms Riley’s professionalism as a conveyancer. The business itself was well run, and there were also no issues concerning the management of the business’s trust accounts.
41 Mr Parasyn submitted that the decision under review should be set aside and Ms Riley’s licence should be renewed. However, it is also open to the Tribunal to grant the licence subject to conditions, for example that Ms Riley only carry out conveyancing work under the supervision of a licensed conveyancer or solicitor until 30 June 2009.
The Respondent’s Submissions
42 Mr Griffin, for the Commissioner, noted that the statement of reasons given for the internal review decision, dated 13 December 2007, was confirmed on reconsideration on 28 February 2008. He said Ms Riley was involved in running a business where conflicts of interest arose. Ms Riley did not disclose the involvement of disqualified persons – Mr Oakley and Mr Ince - in the business to the OFT, nor, on becoming aware of the solicitor’s letter dated 29 May 2006, did she disclose this. He submitted that the evidence suggests an unwillingness by Ms Riley to recognise a conflict of interest.
43 Mr Griffin noted that Ms Riley had executed the Deed of Indemnity knowing it to be untrue and misleading in some particulars. Such conduct could lead to an action for unprofessional conduct against a solicitor and the same standard should apply to licensed conveyancers. There is an expectation that licensed conveyancers are people of integrity, can be trusted, and will comply with relevant legislation and their code of conduct. Ms Riley should have been aware of the potential conflict of interest that might arise where clients of a real estate agency are referred to a conveyancing practice owned by the agency, and be prepared to disclose this to the potential clients of the conveyancing business so that the clients can gauge whether the fees are reasonable. Ms Riley appeared not to understand the need to make this disclosure. In such a situation, it is the potential for harm that is relevant.
44 Mr Griffin made written submissions on the meaning of the phrase ‘fit and proper’, including as to relevant case law. He said while the Respondent accepts that Ms Riley is of good reputation, in considering the issue of fitness, Ms Riley’s specific conduct must be considered. In particular, she has not acted appropriately on a number of occasions, has failed to show an understanding of the inappropriateness of her conduct, and has not demonstrated that she has changed. Rather Ms Riley has sought to deflect to Ms Walker a number of steps that Ms Riley should have undertaken herself. Moreover, questions remain about why she did not query the involvement of two disqualified persons, and took no steps to raise the issue with the OFT. The obligations of a licensed conveyancer include taking such steps, and extend to the structure and legality of a conveyancing business.
45 In conclusion, Mr Griffin submitted that Ms Riley failed to act in a fit and proper way in conducting a licensed conveyancing practice. The seriousness of her behaviour and the absence of evidence of subsequent reform indicate that she is not a fit and proper person to hold such a licence, and the decision under review should be affirmed.
46 With regard to the issue of a licence subject to conditions, should the Tribunal consider this, Mr Griffin submitted that a condition should be imposed that Ms Riley not carry out conveyancing work otherwise than as an employee of a licensee or a solicitor until 30 June 2011. Further, the condition should only be removed on Ms Riley providing evidence satisfying the Commissioner that she has gained sufficient knowledge and experience regarding a licensee’s responsibilities in conducting a business in accordance with the requirements of the Act.
Discussion
47 Following her resignation from Walker Conveyancing and her disassociating herself with that business, Ms Riley is no longer a ‘disqualified person’ by reason of section 10 of the Act. The issue for the Tribunal to determine, therefore, is whether Ms Riley is a fit and proper person to hold a conveyancer’s licence.
48 Both parties in the present case referred to the discussion of ‘fit and proper person’ in Hughes and Vale Pty Ltd v New South Wales (No 2) (1955) 93 CLR 127, at paragraph 9, where Dixon CJ, McTiernan and Webb JJ said:
49 The meaning of the expression was also discussed by the High Court in Australian Broadcasting Commission v Bond (1990) 170 CLR 231. Toohey and Gaudron JJ said at paragraph 36 of their judgment:
“The expression "fit and proper person" is of course familiar enough as traditional words when used with reference to offices and perhaps vocations. 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: "honesty to execute it truly, without malice affection or partiality; knowledge to know what he ought duly to do; and ability as well in estate as in body, that he may intend and execute his office, when need is, diligently, and not for impotency or poverty neglect it" - Coke.”
50 As their Honours recognised, at paragraph 66, whether a person is a fit and proper person involves a value judgement to be made in the context of the particular activity to be licensed: see also Trlin v Commissioner of Fair Trading [2003] NSWADT 222, especially at paragraph 44 ff; Fitton v Commissioner for Fair Trading, NSW Office of Fair Trading [2007] NSWADT 72, at paragraph 35 to paragraph 40. Mr Griffin referred to the decision in McBride v Walton (NSW Court of Appeal, unreported, 15 July 1994), in particular to the judgments of Kirby P, at paragraph 21 to paragraph 26, and Powell JA, at paragraph 59 to paragraph 73: where there is evidence of misconduct, there should be consideration of any explanation for that misconduct, its seriousness to the particular activity, the motivation of the person, whether the misconduct is an isolated incident, the person’s underlying qualities of character, and the person’s conduct since the incident and whether this demonstrates recognition of the misconduct and subsequent reform.
“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.”
51 Turning to the facts of the present case, I am satisfied that there is no evidence to suggest that Ms Riley is anything but professional in fulfilling her conveyancing duties, as Mr Weldon’s statement indicates. I accept Ms Riley’s evidence that there has never been any complaint about her conduct as a licensed conveyancer and that the audit of the business of Walker Conveyancing carried out by the Australian Institute of Licensed Conveyancers found that the business was 98 percent satisfactory.
52 The improper conduct that is the focus of these proceedings relates solely to the transfer of ownership of Walker Conveyancing to Mr Oakley and Mr Ince, two licensed real estate agents who were thereby ‘disqualified persons’ under the Act, and the arrangement proposed by Ms Walker, and apparently agreed to by Mr Oakley and Mr Ince, for Ms Ince to become a silent partner in the business with Ms Riley. I accept that Ms Riley relied on Ms Walker’s advice that the proposed structure was legal and Ms Walker’s assurance that she would take the necessary steps to effect this. Clearly, Ms Riley was too trusting and, probably, naive in relying on Ms Walker. Ms Riley should have taken steps to confirm the proposed structure was legal, including the arrangements for the sharing of the receipts of the business, and to ensure that, for example, the approval of the Commissioner had been sought for Ms Ince to be a silent partner in the business.
53 With regard to the Deed of Indemnity dated 1 June 2006, Ms Riley acknowledges that this was signed several months later, and that the Deed incorrectly stated that she would assume 51 percent ownership of Walker conveyancing while employed in the business. She was never more than an employee who was paid a salary in the ordinary way. In my view, Ms Riley’s conduct in relation to the Deed of Indemnity was improper. It appears to have been borne out of her urgent desire to have an indemnity in place during her term as licensee of the business. This had been promised but had not immediately been forthcoming.
54 I accept Ms Riley’s evidence that she was not aware of approval having not been sought, and the Commissioner therefore not having approved Ms Ince as a silent partner in the business, until after she lodged the application for renewal of her licence with the OFT on 27 June 2007. I note that Ms Riley made a proper disclosure of Ms Ince’s position as a silent partner in the business when completing the application for renewal of her licence. I accept that in October 2007, having discovered the solicitor’s letter of advice to Mr Oakley dated 29 May 2006, Ms Riley was “flabbergasted” and “felt devastated”. In my view, on discovering the letter, she should have contacted Ms Farquhar, with whom she had spoken at the OFT, although I accept that, at that time, Ms Riley was still not aware that Ms Ince had not been approved as a silent partner by the Commissioner.
55 I also accept that Ms Riley was not aware that Mr Oakley held a RAMS home loans franchise for the area in which his and Mr Ince’s real estate business operated. However, I agree with the Respondent that Ms Riley should have been alert to possible conflicts of interest arising where clients of the real estate business were referred to Walker Conveyancing. Nevertheless, there is no evidence that any consumer has suffered by reason of her conduct.
56 Ms Riley has resigned from her employment with Walker Conveyancing and is no longer involved in that business. I am satisfied that she has learned an important lesson from the events described above and that it is likely she will take much greater care in attending to such business in the future, as she acknowledged in giving evidence. In my view, while having a good understanding of conveyancing practice, she had an insufficient understanding of the requirements of conducting such a business.
57 Section 14 of the Act provides for a licence to be granted to a person subject to conditions. In my view, the correct and preferable decision in this case is for Ms Riley to be granted a conveyancer’s licence but subject to a condition requiring that her work be supervised for the immediate period and ensuring that she gains sufficient knowledge and experience of a conveyancing licensee’s responsibilities in conducting a licensed conveyancing business. The wording of the condition that follows has been agreed by the parties except for the date until which the condition is to have effect. Mr Parasyn proposes 30 June 2009; Mr Griffin proposes 30 June 2011. In my view, it is reasonable to set a date of 30 June 2010.
Orders
The decision under review is set aside and in substitution therefor the Applicant, Ms Riley is to be granted a conveyancer’s licence subject to the following condition:
“The Licensee must not carry out conveyancing work otherwise than as an employee of a licensee who holds an unrestricted licence or a solicitor who holds an unrestricted practising certificate until 30 June 2010. This condition will only be removed after that date if the Licensee can provide evidence that satisfies the Commissioner for Fair Trading that she has gained sufficient knowledge and experience regarding a licensee’s responsibilities in conducting a business in accordance with the requirements of the Conveyancers Licensing Act 2003.”
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