Smith v Commissioner for Consumer Protection

[2012] WASC 89

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

CITATION:   SMITH -v- COMMISSIONER FOR CONSUMER PROTECTION [2012] WASC 89

CORAM:   McKECHNIE J

HEARD:   9 MARCH 2012

DELIVERED          :   16 MARCH 2012

FILE NO/S:   GDA 11 of 2011

BETWEEN:   RONALD GEORGE SMITH

Appellant

AND

COMMISSIONER FOR CONSUMER PROTECTION
Respondent

ON APPEAL FROM:

Jurisdiction              :  STATE ADMINISTRATIVE TRIBUNAL OF WESTERN AUSTRALIA

Coram  :MR C RAYMOND (SENIOR MEMBER)

MS S GILLETT (MEMBER)

MR G POTTER (SENIOR SESSIONAL MEMBER)

File No  :VR 78 of 2010

Catchwords:

Real estate and business agents - Obligation to pay funds into a trust account - Post-dated cheque - No agreement for reimbursement - State Administrative Tribunal - Appeal on error of law only - No error

Legislation:

Real Estate and Business Agents Act 1978 (WA)

Result:

Leave to appeal refused
Appeal dismissed

Category:    B

Representation:

Counsel:

Appellant:     In person

Respondent:     Ms T C Loo

Solicitors:

Appellant:     In person

Respondent:     Commissioner for Consumer Protection

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

Nil

McKECHNIE J: 

How this matter comes to court

1. Mr Smith is a real estate agent.

2. On 13 May 2008 he wrote to Mr and Mrs Kelly who traded as Seafarer Holdings Pty Ltd.  They own Lots 805, 806, 807 and 808 Thomasfield Place, Ravenswood.

3. The parties agreed that Mr Smith would market the lots.  He wanted a contribution towards initial administrative expenses of $2,000.  Mr and Mrs Kelly gave him a post‑dated cheque in that amount.  Mr Smith did not deposit it into his trust account.  He says that he did not have to.  When the standard form Selling Agency Agreement was prepared clause 16 'Marketing Charges and/or Expenses' was crossed out including the clause that an amount is to be held in the Agent's Trust Account.

4. Subsequently, the agreement was terminated.  The Kellys wanted an accounting.  It took Mr Smith some time to comply.  The Real Estate and Business Agency Supervisory Board (the predecessor to the Commissioner for Consumer Protection) brought proceedings in the State Administrative Tribunal for orders that there is proper cause for disciplinary action against Mr Smith's company, Exclusive Waterfront Properties Pty Ltd.  The Tribunal found:

   A.As against the first respondent [Mr Smith's real estate company] there is proper cause for disciplinary action in that:

   1.Contrary to s 68(1) of the Real Estate and Business Agents Act 1978 the first respondent failed to credit monies in the sum of $2,000 received by it, from Seafarer Holdings Pty Ltd (Seafarer), on 16 September 2008 in respect of a transaction to the trust account of the first respondent.

   2.Contrary to article 13(1) of the Code of Conduct for Agents and Sales Representatives (the Code) the first respondent failed to properly supply to Seafarer all relevant information in order to satisfy it that expenses which could be validly claimed were properly incurred and as to the amount of the expenses claimed.

   3.Contrary to article 15(2) of the Code the first respondent retained reimbursement for expenses incurred in respect of advertising which were not agreed to in writing by Seafarer.

   B.As against the second respondent [Mr Smith] there is proper cause for disciplinary action in that:

   1.Contrary to article 6(2) of the Code the second respondent failed to properly supervise the business of the first respondent in respect of the matters referred to in orders A 1 to A 3, above.

5. Mr Smith and his company were fined $3,400.  Mr Smith is dissatisfied with the decision and seeks leave to appeal.

The grounds of appeal

1. His grounds are not easy to follow but are set out in an affidavit of 4 July 2011.  I will number the grounds:

   1.The Tribunal Erred in that I tried on two occasions during the hearing to table my trust account receipt book and was ignored. 

   2.My defence was that agreement was reached between the parties that because the plaintiff wanted to give me a post dated cheque for a period of approx two and a half weeks that it should be made out to my company and not the trust account as the money would have been spent by the time that the cheque could be banked.  I advised the Plaintiff that I would not write a trust account receipt and they agreed and requested that I confirm the receipt by letter which was done refer attachment (A).

   3.The tribunal also erred in that all the evidence supports my position.

   (i)The cheque was not made out to my Trust account.

   (ii)No Trust account was issued.

   (iii)A letter confirming the payment of the initial amount of $2,000 to my Company was written on the 3rd Sept.

   (iv)The Authority to sell for Lot 808 Records the amount of $2000 with the reference to the amount being placed in the Trust account deleted and initialled by Mr and Mrs Kelly.

   4.It is a central tenent (sic) of our Justice System that an accused has to be found Guilty 'Beyond reasonable doubt'.  This is simply not possible given the hard evidence.

   If the court upholds my appeal the other charges 'Fall away' or should be dismissed as frivolous.

Appeal on a question of law only

1. The court can only entertain an appeal on a question of law.  The grounds of appeal do not raise any questions of law and so the appeal must be dismissed.  In any event, it would have to be dismissed on the merits.

Ground 1 - Failure to receive the trust account register into evidence

1. As to the first ground, Mr Smith was adamant in his submissions that he did not have to deposit the money in his trust cheque account as the money would have been spent by the time the cheque could be banked.  However, there is an absolute obligation to pay into a trust account 'all moneys received by him for or on behalf of any other person in respect of transactions':  Real Estate and Business Agents Act 1978 (WA) s 68.

2. It was common ground that Mr Smith did not pay the money into his trust account.  The trust account receipt book was therefore irrelevant and the Tribunal made no error in declining to receive it.

Grounds 2 and 3

1. Whether or not the cheque was made out to the trust account is not important.  What is important is that an agent deposits it into the trust account.  Mr Smith did not.

2. Counsel for the Commissioner argued that the Kellys had a right to have the moneys deposited in the trust account and a person is not competent to waive rights conferred under the Real Estate and Business Agents Act: s 141.  I have considerable doubt as to the validity of this submission and received no assistance from counsel.  But it does not matter because, as I have said, the obligation to deposit moneys into the trust account is absolute if money is received on account.  The situation might be different if the agent and client agree that the seller would pay an amount to reimburse the agent for marketing charges and expenses.  A reimbursement of expenses already incurred by an agent is not 'moneys received for or on behalf of any other person' and the Real Estate and Business Agents Act s 68(1) is inapplicable. However, that part of the Selling Agency Agreement between Mr Smith and the Kellys allowing for reimbursement was deleted.

Ground 4 - The standard of proof

1. The State Administrative Tribunal correctly applied the proper standard of proof which is on the balance of probabilities.

Conclusion

1. It is clear that Mr Smith holds strong feelings about his former clients' action and the proceedings in the State Administrative Tribunal.  He tells me that he has been in business for over 40 years without previous complaint.

2. However, the Real Estate and Business Agents Act is clear as to the necessity to have deposited the sum of $2,000 into the trust account as soon as practicable after the operative date.  Mr Smith did not do so.  The State Administrative Tribunal is correct in its conclusion and made no error of law.  Leave to appeal is refused.  The appeal is dismissed.