SETTLEMENT AGENTS SUPERVISORY BOARD and WATSON - [2011] WASAT 73

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: VOCATIONAL REGULATION

ACT: SETTLEMENT AGENTS ACT 1981 (WA)

CITATION: SETTLEMENT AGENTS SUPERVISORY BOARD and WATSON [2011] WASAT 73

MEMBER: JUSTICE J A CHANEY (PRESIDENT)
MR G POTTER (SENIOR SESSIONAL MEMBER)
MS C WINSOR (SESSIONAL MEMBER)

HEARD: 19 APRIL 2011

DELIVERED : 19 MAY 2011

FILE NO/S: VR 195 of 2010

BETWEEN: SETTLEMENT AGENTS SUPERVISORY BOARD
Applicant
AND
DAWN LORRAINE WATSON
Respondent

Catchwords:

Professional discipline Settlement agent Allegation of failure to act efficiently Whether obligation applies to employee of settlement agency

Legislation:

Settlement Agents' Code of Conduct 1982 (WA), cl 13 19
Settlement Agents Act 1981 (WA), s 3, s 82
Strata Titles Act 1985 (WA), s 43(1)(c), s 43(1)(d), s 69

Result:

Application dismissed

Category: B

Representation:

Counsel:

Applicant: Ms Lee
Respondent: Mr D Solomon

Solicitors:

Applicant: Julia King
Respondent: Solomon Brothers

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

Motor Vehicle Industry Board v Dawson [2006] WASAT 8

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

The Settlement Agents Supervisory Board brought a complaint against Mrs Dawn Watson, a conveyancer employed by a licensed corporate settlement agent. The complaint alleged that she had not acted efficiently as required by cl 15 of the Settlement Agents' Code of Conduct 1982 (WA). Mrs Watson held a licence as a settlement agent, but was not carrying on business under that licence.
Mrs Watson argued that cl 15 of the Code of Conduct imposed an obligation on the licensee who had been engaged to act on the settlement, in this case, her employer. She argued that it did not apply to her personally and that she was not exercising any function as a licensee for the purpose of the clause. The Tribunal agreed with that contention and the application was dismissed.

Application

On 12 October 2010, the Settlement Agents Supervisory Board (Board) referred allegations to the Tribunal against the respondent, Mrs Dawn Lorraine Watson, a second respondent, Ms Suzanne Jane Ackley, and a third respondent, Romaine Pty Ltd. Romaine Pty Ltd was the holder of a real estate settlement agents licence and traded as a real estate settlement agent under the name Able Settlements. Mrs Watson and Ms Ackley were employees of Romaine Pty Ltd and worked in the business Able Settlements. Both Ms Watson and Ms Ackley held real estate settlement agents licences themselves, and at different times were nominated as the person in bona fide control of the business carried on by Romaine Pty Ltd as Able Settlements. The allegations arise from a failure to effect the registration of a transfer of a strata titled unit over a period of some years after instructions to act on the settlement were received. The full circumstances surrounding the delay in completing the settlement will be explained in more detail below.
The proceedings in relation to each of Romaine Pty Ltd and Ms Ackley were resolved through a mediation process in the Tribunal, and were ultimately the subject of consent orders. The proceedings between the Board and Mrs Watson were not resolved through mediation, and proceeded to hearing.
Able Settlements acted for both parties in the transaction the subject of these proceedings. The Board makes two allegations against Mrs Watson. The first of those allegations reads as follows:
1.IT IS ALLEGED THAT from on or about 1 December 2005 to 1 September 2008 whilst representing Holdage Pty Ltd, in its sale of lots 1 and 2, 3 Warambie Road, Karratha the First Respondent failed to carry out all services efficiently contrary to rule 15 of the Code of Conduct for Settlement Agents 1982 in that she failed to arrange or effect settlement of the sale of lot 2, being one of 2 lots comprised in the real estate transaction.
Particulars
(a)The real estate transactions the First Respondent was instructed by Holdage Pty Ltd to arrange and effect was the sale of 'Lots 1 & 2, 3 Warambie Road, Karratha WA 6714': Contract for Sale of Land or Strata Title of 1 December 2005.
(b)Settlement of the sale of both lots 1 and 2 was due on 20 December 2005.
(c)The sale of lot 1 was settled on 23 December 2005.
(d)The final settlement statement sent by the First Respondent to Holdage Pty Ltd for the sale of 3 Warambie Road included an apportionment of strata levies for both lots 1 and 2: Letter dated 4 January 2006, with enclosure.
(e)The First Respondent did not otherwise arrange the settlement of the sale of lot 2 between 1 December 2005 and 1 September 2006.
(f)The First Respondent became the person in bona fide control of the Third Respondent on 1 September 2006.
(g)Between on or about 5 September 2006 and 17 October 2006, the First Respondent took steps to arrange the settlement of the sale of lot 2.
(h)The First Respondent never effected settlement of the sale of lot 2.
(i)The First Respondent left the Third Respondent on or about 1 September 2008.
(j)The Applicant otherwise relies upon the relevant matters referred to in paragraphs 1 to 47 below.
The second allegation is identical to the first, save that it relates to representation of the purchaser of the two lots, Stanley Holdings Pty Ltd.
Clause 15 of the Settlement Agents' Code of Conduct 1982 (WA) (Code of Conduct) provides:
15. Deception and misleading representatives
A licensee shall carry out all services efficiently, honestly and without concealment or any form of deception or misleading representation.

The respondent's defence

Mrs Watson's defence was founded on two contentions. The first is that cl 15 of the Code of Conduct did not apply to the capacity in which she acted in relation to the relevant transaction. The second contention was that, if cl 15 of the Code of Conduct did apply, Mrs Watson did not, in any event, fail to carry out all of the services related to the particular transaction efficiently.

Mrs Watson's role in Able Settlements

Mrs Watson has approximately 33 years' experience working as a conveyancer. She commenced employment with Romaine Pty Ltd in the business of Able Settlements in approximately 2000. She was initially employed as a conveyancer, a role which, when carried out on behalf of a licensed settlement agent, does not in itself require a licence under the Settlement Agents Act 1981 (WA) (SA Act). She was at no time an officer or shareholder of Romaine Pty Ltd.
From the time Mrs Watson commenced employment with Able Settlements until 1 September 2006, the licensee and bona fide control of Able Settlements was a Mr Alan Ovens.
In September 2004, Mrs Watson obtained a real estate settlement agents licence and triennial certificate. Her role after obtaining that licence remained as a conveyancer within Able Settlements.
Upon Mr Ovens' retirement in 2006, Mrs Watson was appointed by the directors of Romaine Pty Ltd as the person in bona fide control of the business. She remained in that position until 2 September 2008, when she resigned her employment, and Ms Ackley became the person in bona fide control of Able Settlements.
The allegations against Mrs Watson in this matter are directed to her conduct as the person responsible for the particular transaction the subject of the proceedings. The allegations do not rely upon any aspect of Mrs Watson's role as the person in bona fide control of the business after September 2006.

The transaction in question

On 2 December 2005, a real estate agency, Ray White Karratha, wrote to Able Settlements enclosing a contract of sale and certain other documents and advising that Able Settlements had been nominated to act on behalf of the seller and buyer in relation to the transactions. The contract named the vendor as Holdage Pty Ltd (Holdage) and the buyer as Stanley Holdings Pty Ltd (Stanley Holdings). The property was described as follows:
The land situated at and known as Lots 1 and 2, 3 Warambie Road, Karratha, WA 6714 and being Lot[s] 1 and 2 on Strata/Survey Strata/Deposited/Plan/Diagram 21043 and being the whole of the land in Certificate of Title Volume 1902 Folio 137.
Amongst the other documents enclosed was a Form 28 disclosure statement pursuant to s 69 of the Strata Titles Act 1985 (WA) (ST Act) which contained a description of the lot to be sold as 'Lot[s] 1 and 2 on Strata Plan 21043'. The description 'Lot 1 & 2 3 Warambie Road, Karratha' was also handwritten on an annexure to the contract relating to GST.
The Certificate of Title recited in the contract comprised the title only for Lot 1. The Certificate of Title for Lot 2 was Volume 1902 Folio 138. There was, therefore, an ambiguity in the description of the property contained in the contract, the ambiguity being whether the inclusion of the reference to Lot 2 was an error, or the failure to recite the title particulars of Lot 2 was an error.
Upon receipt of the instructions to act, the matter was referred to Mrs Watson for action. It was clear that she acted promptly because on 6 December 2005 she wrote to both Holdage and Stanley Holdings in relation to the instructions. In both letters she enclosed a Form 1 Appointment of Settlement Agent for execution by each of Holdage and Stanley Holdings. The appointment was, of course, an appointment of Romaine Pty Ltd, trading as Able Settlements, to act on the transaction. The letters also contained a 'Form 2 Disclosure of Interest'. Those forms contained a description of the property the subject of the transaction which was described as:
3 Warambie Road, Karratha and more particularly described as Lot 1 on Strata Plan 21043, Volume Folio No 1902/137, pursuant to Contract of Sale dated 1 December 2005.
The letters also enclosed a 'Sellers Authority' and a 'Buyers Authority' respectively. Those documents again described the property to be transferred by reference only to Lot 1, and contained a confirmation, to be signed by the vendor and purchaser respectively, 'that the correct property is being transferred'. The letter also enclosed a copy of the Strata Plan, showing only Lot 1, 'to confirm that we have the correct lot'.
The various authorities were duly signed and returned to Able Settlements by both Holdage and Stanley Holdings. At that point, both the buyer and seller had confirmed, as it happened erroneously, that the property to be transferred was only Lot 1, and not Lot 2.
Mrs Watson said that although she did not recall whether she noticed the discrepancy in the title description in the sale contract, she thought it likely that she did, and that she took steps to clarify the position. She observed that, by the time she had the opportunity to inspect Romaine Pty Ltd's file after the complaint the subject of these proceedings arose, there were very few handwritten notes of the kind which she routinely made on a file. As a result the file did not assist her recollection of events in a number of respects, including as to whether she sought clarification from Ray White Karratha as to what lots were to be transferred.
We consider it is unlikely that Mrs Watson took steps to clarify the discrepancy. Had she done so, it is reasonable to assume that she would not have reached the conclusion that only Lot 1 was to be transferred. Rather, it is likely that the assumption as to the property to be transferred was made on the basis of the Certificate of Title volume and folio number noted in the contract of sale, which was only the Certificate of Title for Lot 1. That assumption was maintained after each of the seller and purchaser signed their respective authorities for Able Settlements to act, and in that process confirmed that the correct description of the property to be transferred was Lot 1. No doubt, each of them failed to properly consider the title description before executing the authority and confirming the title description.

In preparation for settlement, settlement statements dated 6 December 2005 were forwarded to both seller and buyer. Those statements showed 'Strata levies Nil adjustment.' Subsequently, on 19 December 2005, Ray White Karratha provided certificates under s 43(1)(c) and (d) of the Strata Titles Act 1985 (WA) which disclosed the amount of the strata levies for each of Lot 1 and Lot 2. On 4 January 2006, Able Settlements confirmed to both seller and buyer that settlement took place on 23 December 2005 and in that correspondence enclosed final settlement statements to both the seller and the buyer adjusting the levies based on the total levy for both lots. It would appear that all other rates and taxes adjustments made in the settlement statement only brought to account charges referable to Lot 1. Mrs Watson was unable to explain that discrepancy, other than that the inclusion of the strata levies for both lots appears to have been an error.
The evidence does not make it clear whose responsibility it was to prepare the first draft of the settlement statement. Mrs Watson said that Able Settlements employed conveyancing assistants, and that she worked with a conveyancing assistant at that time. It may be that the settlement statement was initially prepared by a conveyancing assistant and Mrs Watson simply failed to check the source information as to the amount of the strata titled levies.
Shortly before 13 December 2005, Mrs Watson caused Able Settlements to prepare a Landgate transfer of land form for Lot 1, and it was sent to the buyer who executed it. The transfer of land form was then sent to the seller for execution and was returned duly executed. Neither the buyer or the seller altered the title description which referred only to Lot 1, or queried why there was no transfer form for Lot 2.
Settlement of the transfer of Lot 1 took place on or about 23 December 2005. A mortgage over Lot 1 was discharged at settlement. Apparently, Lot 2 was subject to a mortgage which secured the same debt, but no discharge of that mortgage was provided.
Nothing further occurred until 29 August 2006 when Able Settlements received an email from Ray White Karratha. That email inquired why the name of the registered proprietor of Lot 2 had not been changed. The email was referred to Mrs Watson. She said, and we accept, that until she read that email, she had not been informed by any party, nor otherwise had any reason to suspect, that there was any error in the property transfer in the December settlement. Because there had clearly been an error, Mrs Watson referred the email to Mr Ovens in accordance with the practice at Able Settlements where an error had been made on a file. Mr Ovens asked Mrs Watson to go ahead and address the issue.
Mrs Watson investigated and found that the file had been archived. On reviewing the file, she immediately took steps to arrange the transfer of Lot 2 from Holdage to Stanley Holdings. She made an inquiry to the local shire as to the rates and charges position in relation to the property. On 5 September 2006, Mrs Watson sent a letter to the purchaser enclosing a transfer of land form in relation to Lot 2 for execution. That was duly signed and returned to Able Settlements, who then, on 15 September 2006, sent a letter to the seller informing it that Lot 2 had not been transferred and requesting execution of the transfer form.
On 3 October 2006, Mrs Watson caused a fax to be sent on behalf of Holdage to ANZ Bank to arrange discharge of the mortgage over Lot 2. Followup inquiries were made by Ms Wilkinson, the conveyancing assistant who worked with Mrs Watson, by telephone to the ANZ Bank on 11 and 17 October 2006, and 8, 9, 16 and 22 November 2006, inquiring as to progress with the preparation of a discharge of mortgage. The file does not reveal any subsequent communications between Able Settlements and the ANZ Bank.
The discharge of the mortgage over Lot 2 was lodged by the ANZ Bank on 28 November 2006. It is apparent that the duplicate Certificate of Title was returned to the ANZ Bank, as the lodging party, following discharge of the mortgage.
The next thing which appears to have occurred in relation to the file was that on 7 February 2007 it was archived. The evidence surrounding the circumstances of that occurring is vague. Mrs Watson said that, to the best of her recollection, she did not give instructions for the file to be archived. She said, 'if I did, I did not realise at the time that it was a file with an outstanding matter to be dealt with and I did so merely because the trust ledger showed a nil balance and I assumed the file was completed.' This may have occurred, she suggested, in the context of someone gathering up all files which showed a nil balance and then giving them to the receptionist for file closing and archiving.
Mrs Watson said that she kept a diary on her desk in which she wrote down milestones for her files and follow-ups to be made. She acknowledged, in evidence, that she must not have had a diary note or follow-up in relation to the completion of the transfer of Lot 2.
Mrs Watson said that, the file having been archived, she did not see it until issues arose late in 2008, and, before that, did not turn her mind to the issues outstanding on the file.
On 14 August 2008, a firm of solicitors, Morgan Alteruthemeyer wrote to Able Settlements on behalf of Stanley Holdings. They enclosed title searches for Lot 1 and Lot 2 and noted that Holdage remained the registered proprietor of Lot 2. They asked that Able Settlements' file be reviewed. The letter was referred to Mrs Watson. She investigated the query and discovered that the file had been archived. She retrieved the file. She said that she was unable to find an original copy of the transfer of land form executed by the parties in relation to Lot 2, although she later acknowledged that that document must have been on file. Having not found the original transfer, she caused Able Settlements to send a response to Morgan Alteruthemeyer enclosing a new transfer form in respect of Lot 2 for execution. So far as Mrs Watson was able to recall, nothing further happened on the file until she left the employ of Romaine Pty Ltd on 2 September 2008.
Eventually, the transfer of Lot 2, being the transfer prepared in October 2006, and executed by the parties in that month, was registered at Landgate on 13 March 2009.

Failing to act efficiently

Efficient is described in the Shorter Oxford English Dictionary (5th ed, 2002) as 'effective, producing the desired result with the minimum wasted effort; (of a person) capable, competent'.
There are three distinct time periods which call for consideration in relation to whether or not the settlement of the transaction between Stanley Holdings and Holdage was carried out efficiently.
The first is the period from 5 December 2005, when instructions were received, until the file was archived on the first occasion. The settlement and transfer in relation to Lot 1 was undoubtedly carried out efficiently. It was not 'efficient' in the sense that the transfer of Lot 2 was not achieved, and thus 'the desired result' was not produced. That occurred by reason of a mistake made as to the property description. An erroneous assumption as to the title description made by Mrs Watson, and possibly others within Able Settlements, was able to continue because neither the seller nor the purchaser corrected the position, notwithstanding being specifically asked to confirm that the description of the land to be transferred was accurate. The mistake made stemmed from the error by the real estate agent in the title description on the contract of sale, which referred only to the Certificate of Title volume and folio numbers of Lot 1.
In the circumstances, we do not consider that Mrs Watson can be said to have acted inefficiently in relation to the transaction, albeit that she acted in error. The error was explicable and was not corrected by the parties for whom Able Settlements acted, despite them being asked to confirm the title description.

We do consider that Mrs Watson acted inefficiently in relation to effecting the transfer of Lot 2 in November or early December 2006. It is apparent that, by that time, she was in possession of an executed transfer of Lot 2, and that that transfer could have been lodged at Landgate as soon as the mortgage was discharged by the ANZ Bank. It is not clear whether the fact of discharge of the mortgage by the bank was communicated to Able Settlements. If it was, then the transfer should have been registered. If it was not, then inquiries should have continued to have been made, as they were up until 22 November 2006, as to when the mortgage was to be discharged. Mrs Watson had responsibility for the file. She should have caused further inquiries to be made, or if she had caused further inquiries to be made, she should have acted after the mortgage was discharged, and the transfer should have been registered. Whether or not Mrs Watson was personally responsible for archiving the file in February 2007 is of no moment. The transaction should have been completed before then, and Mrs Watson acted inefficiently in failing to ensure that that occurred.
Upon being further advised that the transfer had not been effected by Morgan Alteruthemeyer's letter of 14 August 2008, Mrs Watson took steps to have the transaction completed. She left the employment of Able Settlements some 18 days later, within which time steps had been taken by her. We do not consider that she can said to have acted inefficiently in August 2008.

Does cl 15 of Code of Conduct apply?

Clause 15 of the Code of Conduct appears as one of a series of clauses imposing obligations on 'a licensee'. The context of cl 15 is relevant to the question of its construction. Clauses 13 to 19 read as follows:
13.Supervision and control of employees
A licensee shall be responsible for the supervision and control of the work of unlicensed persons engaged in assisting in the conduct of his business, and for that purpose
(a)where the licensee of the business is a natural person
(i)he shall give substantial attendance at his registered office and shall ensure that the managers of all branch offices of the business respectively give substantial attendance at the respective branch offices; and
(ii)the manager of a branch office of the business shall give substantial attendance at that office;
and
(b)where the licensee of the business is a firm or a body corporate
(i)the partners of the firm or the directors of the body corporate, as the case requires, shall ensure that the person in bona fide control of the business gives substantial attendance at the registered office of the business;
(ii)the person in bona fide control of the business shall give substantial attendance at the registered office of the business;
(iii)the partners of the firm or the directors of the body corporate, as the case requires, and the person in bona fide control of the business shall ensure that the managers of all branch offices of the business respectively give substantial attendance at the respective branch offices; and
(iv)the manager of a branch office of the business shall give substantial attendance at that office.
14.Confidentiality
Subject to any statutory provisions to the contrary and save as he may be otherwise instructed by his client a licensee shall not disclose any information which has come to him in his capacity as licensee for the client and in the legitimate course of his appointment as a settlement agent by such client.
15.Deception and misleading representatives
A licensee shall carry out all services efficiently, honestly and without concealment or any form of deception or misleading representation.
16.Client to be fully informed
A licensee shall ascertain and communicate to his client (when requested by the client or when it is necessary or prudent to do so), all available pertinent facts concerning any service or transaction he undertakes as a settlement agent so that in providing the service and handling the transaction he will avoid error, deception or misrepresentation.
17.Licensee responsible for employees
A licensee is at all times responsible for his actions, and those of his employees in business relations with other settlement agents, solicitors, clients and the public.
18.Work to be completed expeditiously
A licensee shall at all times use his best endeavours to complete any work on behalf of his client as soon as is reasonably possible.
19.Harsh or unconscionable conduct
A licensee shall not engage in any harsh or unconscionable conduct discreditable to him or likely to bring settlement agents into disrepute.
It is not in issue that Mrs Watson held a licence as a real estate settlement agent. It is also not in issue that the licensee instructed to act on the relevant transaction was Romaine Pty Ltd, and that Holdage and Stanley Holdings were clients of Romaine Pty Ltd.
The Code of Conduct is made pursuant to s 82 of the SA Act, which permits rules to be made prescribing a Code of Conduct for settlement agents. 'Settlement agent' includes a person who is a real estate settlement agent. Section 3 of the SA Act defines real estate settlement agents to mean 'any person who arranges or effects settlement of a real estate transaction for reward or who, whether for reward or otherwise, carries on business arranging or effecting settlements of real estate transactions … '. Licensee means a person licensed as a settlement agent under the SA Act.
Section 3 defines 'reward' as meaning:
…
[A]ny valuable consideration in money or moneys worth paid or received as commission or remuneration
(a)whether payable in cash or kind;
(b)whether paid or received directly or indirectly; and
(c)whether paid or received separately or as a component of a composite price or fee paid or received in respect of any transaction or service.
In this case, there is no doubt that Romaine Pty Ltd was a 'licensee' for the purposes of cl 15. That is because it carried on the business of a settlement agent, and was the licensed settlement agent instructed to act in relation to the Romaine Pty Ltd transaction. It was the entity entitled to remuneration for the relevant real estate transaction. Prior to 2004, Mrs Watson acted as a conveyancer employed by Able Settlements. She did not herself hold a licence. Although she was paid for her work for Romaine Pty Ltd, there is no suggestion that her income was referable to any particular real estate transaction or transactions. After she qualified for the licence in 2004, she continued work as a conveyancer, and her role within Able Settlements did not alter until she became the nominated person in bona fide control in September 2006. The allegations against her in these proceedings do not rely upon any obligation by Mrs Watson in her capacity as person in bona fide control. The complaint against Mrs Watson does not, in its terms, go beyond her role in the personal conduct of the relevant transaction.
Counsel for the Board accepted that Holdage and Stanley Holdings were clients of Romaine Pty Ltd, and were not clients, in the sense that word is used in the Code of Conduct, of Mrs Watson. Counsel advised that the approach of the Board to the Code of Conduct was that those clauses of the Code of Conduct which imposed duties on a licensee in respect to 'his client', such as cl 14, 16 and 18, would have no application to the actions of a person employed by the settlement agent carrying on the business, even if that employee themselves held a licence. That is because the client is not a client of the employee. It follows that, if that construction is accepted, the words 'a licensee' refer to a broader class of persons in cl 15 than in cl 14, cl 16 and cl 18.
The respondent argues that the words 'a licensee', in cl 15 (and indeed the other clauses set out above) is, in each case, a reference to the licensee carrying on the business, being the licensee engaged by the client to undertake a real estate transaction. That is the construction with which we agree.
Romaine Pty Ltd, as the licensee carrying on the business of Able Settlements, was responsible for the efficient provision of services and for the other obligations cast upon it by the Code of Conduct. Mrs Watson was not acting as a licensee in performing the work which she performed. Rather, she was acting as a conveyancer employed by Romaine Pty Ltd. A licence was not necessary for her to fulfil that role. We do not consider that she had personal liability under the relevant provisions of the Code of Conduct simply because she happened to have qualified for, and been issued with, a real estate settlement agents' licence.
It follows that cl 15 of the Code of Conduct has no application to the actions of Mrs Watson. The complaints against her, being based upon that clause, must fail. The application should be dismissed.

Costs

The respondent, arguing that the complaints against Mrs Watson should be dismissed, argues that an order for costs should be made against the Board on the basis that the application should never have been commenced against Mrs Watson.
In making that submission, counsel for Mrs Watson acknowledged, and did not urge a departure from, the general approach to the question of costs in vocational proceedings before the Tribunal. That approach was explained by the then President of the Tribunal in Motor Vehicle Industry Board v Dawson [2006] WASAT 8 at [44] [48] where he said:
Where proceedings are commenced by a vocational regulatory body (such as the Board) against a person affected by a vocational Act (such as Mr Dawson), the Tribunal will usually make an order for costs in favour of the vocational regulatory body where it is successful in obtaining an order in the proceedings. In Medical Board of Western Australia and Roberman [2005] WASAT 81(S) at [30] the Tribunal (Judge John A Chaney SC, Deputy President, presiding member) observed in relation to s 87(2) that:
"Where a regulatory authority successfully brings a complaint of conduct which, if proved, justifies disciplinary action by the Tribunal, there will usually be a strong case for the exercise of that discretion in favour of the regulatory body. That is because such bodies perform a function which promotes the public interest, and usually with limited resources. The financial burden of bringing disciplinary action if the body had no capacity to recover some or all of its costs may be such as to provide a disincentive to bring disciplinary action, or when brought, to ensure that the allegations against the practitioner concerned are properly and thoroughly presented. It is in the public interest that such bodies have an expectation that, if the allegations are made out, the offending professional will meet or at least contribute to the costs incurred in bringing the application. The question of an award of costs is, of course, a matter of discretion to be exercised in the circumstances of each case."
With those observations the Tribunal concurs.
In the Roberman case, however, the Medical Board of Western Australia was unsuccessful in relation to some of the allegations made against the medical practitioner. For that reason the Tribunal in its discretion considered it was appropriate that the practitioner only pay one-third of the costs of the Medical Board. In so doing the Tribunal implicitly recognised that a person affected by proceedings instituted by a vocational regulatory body should not have to bear the costs of the proceedings or contribute to the costs of those part of the proceedings which were not successfully maintained.
The decision in the Roberman case does not support the view, however, that an affected person in such proceedings is entitled to an award of costs for the portion of the proceedings in which they were successful. If this approach were to be adopted, vocational regulatory bodies may well feel inhibited in commencing proceedings that should be commenced and maintained in the public interest even though "success" cannot be guaranteed. Consequently, the Tribunal considers that, ordinarily, unless it can be demonstrated that an application made by a vocational regulatory body lacked any reasonable basis or was not made in good faith, costs should not be awarded against a vocational regulatory body simply because the application was not successful.
Of course, in every case the Tribunal retains the discretion under s 87(2) of the SAT Act to order costs in the circumstances of the case.
The respondent argues that the application should have never been commenced against Mrs Watson because 'had the facts been completely investigated, there was no reasonable basis for complaint against Mrs Watson and the matter should not have proceeded after having been resolved against Romaine [Pty Ltd].'
A significant part of Mrs Watson's defence was that she had not acted inefficiently. That is a contention we have not accepted. Had cl 15 of the Code of Conduct applied to Mrs Watson, then we would have found the allegation against her established at least in relation to the period October to November 2006.
The application has failed on a question which appears not to have been previously the subject of any decisions either by the Tribunal or the Board. Counsel for the Board advised that the Board took a particular view of the ambit of cl 15. That is a view with which we have disagreed. It is not, however, a construction which is unarguable, and we do no consider that it can be said that the application lacked any reasonable basis or was not made in good faith.
We do not consider that there is cause to depart from the Tribunal's usual approach to costs in vocational proceedings. There will, therefore, be no order for costs.

Order

The application is dismissed.

I certify that this and the preceding [56] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
JUSTICE J A CHANEY, PRESIDENT