The Chief Executive, Department of Justice and Attorney General v DJ Stringer Property Services Pty Ltd
[2012] QCAT 27
•24 January 2012
| CITATION: | The Chief Executive, Department of Justice and Attorney General v DJ Stringer Property Services Pty Ltd and Anor [2012] QCAT 27 |
| PARTIES: | The Chief Executive, Department of Justice and Attorney General |
| v | |
| DJ Stringer Property Services Pty Ltd David John Stringer |
| APPLICATION NUMBER: | OCR165-11 / OCR166-11 |
| MATTER TYPE: | Occupational regulation matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Peta Stilgoe, Senior Member |
| DELIVERED ON: | 24 January 2012 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | 1. DJ Stringer Property Services Pty Ltd and David John Stringer are reprimanded. 2. DJ Stringer Property Services Pty Ltd pay a fine of $7,000 (70 penalty units) within 30 days. 3. David John Stringer pay a fine of $2,000 (20 penalty units) within 30 days. 4. DJ Stringer Property Services Pty Ltd and David John Stringer pay the Chief Executive’s costs of the proceedings in the sum of $765 within 30 days. |
| CATCHWORDS: | PROPERTY AGENTS AND MOTOR DEALERS – REAL ESTATE AGENTS – where agent drew pre-commission – where no loss occasioned to third party – where respondent conceded breach – penalty Property Agents and Motor Dealers Act 2000, ss 385, 496 The Chief Executive, Department Of Tourism, Fair Trading and Wine Industry Development v Ruffo Pty Ltd and Ruffo [2006] CCT PD012-06 The Chief Executive, Department of Tourism, Fair Trading & Wine Industry Development v John Cornwell [2005] CCT X007-05 |
APPEARANCES and REPRESENTATION (if any):
This matter was heard on the papers in accordance with section 32 of the Queensland Civil and Administrative Tribunal Act 2009.
REASONS FOR DECISION
Both DJ Stringer Property Services Pty Ltd and Mr Stringer are licensed real estate agents under the Property Agents and Motor Dealers Act 2000. Mr Stringer is a director of the company.
Between 7 April 2008 and 9 August 2008, on 21 occasions, the company pre-drew commissions from trust in breach of section 385 of the Act. The total of the withdrawals was $283,089.71.
The Chief Executive has referred the company and Mr Stringer to the tribunal for disciplinary proceedings under s 497 of the Act on the basis that:
The company has, in carrying on business, acted in an unprofessional way within the meaning of s 496(2)(g)(iii) of the Act.
Mr Stringer was an executive officer of the company in relation to whom the tribunal finds grounds exist to take disciplinary action[1].
[1] Section 496(1)(g)(vi).
Both the company and Mr Stringer have admitted that the company has committed a breach of the Act and that disciplinary proceedings are appropriate. Having considered the material submitted by the Chief Executive, I am satisfied that the company did, on 21 occasions, pre-draw its commission from trust. I am satisfied that the withdrawal of money from trust was in breach of s 385(1)(b) of the Act and that the total amount of the money withdrawn in breach of its obligations is $283,089.71. I am also satisfied that, at all relevant times, Mr Stringer was an executive officer of the company and therefore responsible for its acts or omissions.
The Chief Executive points out that the primary object of disciplinary proceedings is to protect members of the public from professional misconduct and to maintain the standards of the profession. The Act imposes a clear prohibition against drawing money from trust before a licensee’s entitlement to that money has accrued. A proper account of trust funds is central to the integrity of the real estate industry.
The Chief Executive submits that disqualification is not warranted but urges the tribunal to impose a penalty of $15,000 on the company and $7,500 on Mr Stringer. In support of such high penalties, the Chief Executive submits:
The criminal penalty for a breach of s 385(1)(b) of the act is a maximum of 3 years imprisonment. This is one of the heaviest penalties available under the Act and demonstrates that the Legislature considered a breach of this section of the Act as potentially very serious.
Mr Stringer’s argument that he did not know his company was having liquidity problems to the extent that his office manager pre-drew commissions over a four month period does not reflect well on him. It is the responsible officer’s obligation to know what is happening in his business.
Mr Stringer and the company submit that a penalty of $7,500 for the company and $1,000 for him personally would be more appropriate:
The pre-drawings were advance management fees, so the company was, ultimately, entitled to that money in any event.
No third party has suffered any loss.
The pre-drawings occurred because of the financial administrator’s error of judgment and were not deliberate breaches of the Act.
Mr Stringer had no personal knowledge of the breaches until the auditor advised him of the pre-drawings. The practice ceased immediately Mr Stringer became aware of it.
The Chief Executive has provided the tribunal with a table of comparative cases. All of the cases in that table involve amounts totalling less than $100,000. The Chief Executive urges the tribunal to consider the case of Reda Holdings Pty Ltd determined in the Magistrates Court as Southport, as the benchmark for imposing penalties in this case.
The decision is unreported so the only information available is that provided by the Chief Executive. The respondent in that case withdrew $57,150 on one occasion. There was no loss to beneficiaries but the respondent did take time to repay the money withdrawn. That the respondent had to repay money suggests that the withdrawal from trust was not a pre-drawing but some other misuse of trust money. I am not persuaded that Reda Holdings is the closest analogy in the cases referred to the tribunal by the Chief Executive.
[10] The table of cases shows that there is little consistency in the imposition of penalties.
In an instance of five withdrawals totalling $24,500[2], the tribunal disqualified the licensees for ten years, suspended the disqualification and imposed a penalty of 30 penalty units for the company and 20 for the director.
The tribunal disqualified a licensee who had five withdrawals totalling $36,600 without loss to any third party and imposed a penalty of 40 penalty units.[3]
[2]The Chief Executive, Department Of Tourism, Fair Trading and Wine Industry Development v RuffoPty Ltd and Ruffo [2006] CCT PD012-06.
[3]The Chief Executive, Department of Tourism, Fair Trading & Wine Industry Development v John Cornwell [2005] CCT X007-05.
[11] The decision which is closest to the situation before me is The Chief Executive, Department Of Tourism, Fair Trading and Wine Industry Development vReza Enterprises Pty Ltd and Malihi[4]. Reza Enterprises drew pre-commission on 39 occasions over 15 months totalling $89,000. Like the present case, the respondents admitted the breaches and there was no loss to any third party. The tribunal imposed a penalty of 20 penalty units on each of the company and the director. The tribunal also ordered Mr Malihi attend a course of study in the requirements for handling trust money.
[4] [2007] CCT PD015-06.
[12] While the amount of money the subject of the withdrawals by DJ Stringer Property Services Pty Ltd is considerably higher, the number of breaches is lower and the period of time over which the breaches took place is shorter. I am not persuaded, therefore, that the company and Mr Stringer should bear a significantly higher fine simply because of the “considerably larger” sums withdrawn.
[13] I am satisfied that a penalty of 20 penalty units, or $2,000, is an appropriate fine for Mr Stringer personally. I am persuaded, and Mr Stringer concedes, that the company should pay a higher penalty for the breach. The highest penalty recorded in the Chief Executive’s table of cases is $5,000, imposed in 2007 and 2008[5]. Using a penalty unit value of $75, that equates to a fine of 66.66 penalty units. Using the current value of $100 and rounding up, I find that a fine of 70 penalty units, or $7,000 is appropriate. A fine of that magnitude is in line with the tribunal’s decision in The Chief Executive, Department of Employment, Economic Development and Innovation v Welburn[6].
[5]Unreported The Chief Executive v Mirracle Pty Ltd and Anor 2008 and Reda Holdings Pty Ltd 2007.
[6] [2010] QCAT 202.
[14] The Chief Executive asks that the respondents pay its costs of the proceeding but has submitted no material about the quantum of those costs. It is appropriate that the costs of disciplinary proceedings are borne by those whose actions necessitate the proceedings, rather than the burden being borne by the public purse. The company and Mr Stringer should pay the Chief Executive’s costs of these proceedings. Given that the total of the fines imposed is less than $10,000, I find that the costs should be the determined in accordance with Item 1 (instructions to sue) on the Magistrates Court Scale E, an amount of $765.
[15] The orders should be:
DJ Stringer Property Services Pty Ltd and David John Stringer are reprimanded.
DJ Stringer Property Services Pty Ltd pay a fine of $7,000 (70 penalty units) within 30 days.
David John Stringer pay a fine of $2,000 (20 penalty units) within 30 days.
DJ Stringer Property Services Pty Ltd and David John Stringer pay the Chief Executive’s costs of the proceedings in the sum of $765 within 30 days.
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