Wong v Director General, Department of Fair Trading
[2002] NSWADT 197
•10/04/2002
CITATION: Wong v Director General, Department of Fair Trading [2002] NSWADT 197 DIVISION: General Division PARTIES: APPLICANT
Siang Yap Wong
RESPONDENT
Director General, Department of Fair TradingFILE NUMBER: 023177 HEARING DATES: 04/09/02 SUBMISSIONS CLOSED: 09/04/2002 DATE OF DECISION:
10/04/2002BEFORE: Montgomery S - Judicial Member APPLICATION: Fair Trading Act 1987 - Real Estate Agent - suspension of licence - Real Estate Agent - suspension of licence MATTER FOR DECISION: Principal matter LEGISLATION CITED: Administrative Decisions Tribunal Act 1997
Fair Trading Act 1987
Fair Trading Amendment (Enforcement and Compliance Powers) Act 2000
Property, Stock and Business Agents (General) Regulation 1993
Property, Stock and Business Agents Act 1941CASES CITED: REPRESENTATION: APPLICANT
In person
RESPONDENT
P Griffen, barristerORDERS: Orders made 9 September 2002:; The decision of the Director General, Department of Fair Trading to suspend the licence held by Mr Siang Yap Wong under the Property, Stock and Business Agents Act 1941 for a period of 60 days is affirmed.
1 On 11 July 2002 the Director General, Department of Fair Trading, exercising the power granted by s 64A of the Fair Trading Act 1987 (FTA), suspended for 60 days the licence held by Mr Siang Yap Wong. Mr Wong is also known as Kenny Wong.
2 The licence was issued under section 57(4G) of the Property, Stock and Business Agents Act 1941 (the PSBAA). A certificate dated 21 August 2002 issued under Section 89 of the PSBAA states that:
- “On 10 December 2001, Siang Yap (Kenny) Wong was issued with a Certificate of Registration number 1028451 for one year to expire on 9 December 2002. This certificate was suspended on 11 July 2002 for a period of 60 days to expire on 8 September 2002.”
3 Mr Wong has applied under s 64A(8) of the FTA for review of the Director-General’s decisions to suspend his licence. In so far as it is relevant to these proceedings, section 64A of the FTA provides:
- “64A. Suspension of licences
(1) In this section, "licence" means any licence, permit or other authority granted or issued (whether before or after the commencement of this section) under any legislation administered by the Minister, and "licensee" means the holder of the licence, permit or authority.
(2) If the Director-General is of the opinion that there are reasonable grounds to believe that:
- (a) a licensee has engaged in conduct that, under legislation administered by the Minister, constitutes grounds for suspension or cancellation of the licence, and
(b) it is likely that the licensee will continue to engage in that conduct, and
(c) there is a danger that a person or persons may suffer significant harm, or significant loss or damage, as a result of that conduct unless action is taken urgently,
(3) A notice under subsection (2) has effect according to its terms, whether or not the licensee has been afforded an opportunity to be heard as to whether the licence should be suspended.
(4) ...
(5) If, during the suspension of a licence under this section, the Director-General is satisfied that the facts and circumstances that gave rise to the suspension have so altered that the suspension should be terminated, it is the duty of the Director-General, by further notice specifying the date of termination, to terminate the suspension without delay and restore the licence to the licensee.
(6) Without affecting the generality of subsection (2):
- (a) a second or subsequent notice may be served on a licensee under that subsection in respect of conduct of the kind to which that subsection refers, and
(b) any such notice may be served during a period of suspension of the licence concerned.
(8) A licensee may apply to the Administrative Decisions Tribunal for a review of a decision of the Director-General under this section.”
4 It is not disputed that the requirements of section 64A(1) of the FTA have been satisfied. Nor is it disputed that the Director General has power to suspend or cancel a licence pursuant to section 60 of the PSBAA. The PSBAA is legislation administered by the Minister for Fair Trading. The relevant provisions of the PSBAA are se out below.
5 Section 51(1) states in part:
- “real estate salesperson means a person (other than the holder of a real estate agent's licence) who, as an employee of a real estate agent or a corporation that employs a real estate agent (the employer):
(a) induces or attempts to induce or negotiates with a view to inducing any person:
- to buy, sell, exchange, lease, assign or otherwise dispose of any land, or
to make an offer to buy, sell, exchange, lease, assign or otherwise dispose of any land, or
to accept an offer to buy, sell, exchange, lease, assign or otherwise dispose of any land, or
to enter into a contract for the buying, selling, exchanging, leasing, assigning or other disposal of land, or
(b) elsewhere than at a place of business of the employer:
- collects rent payable in respect of any lease of land, or
collects instalments of principal or interest payable under a mortgage of land or under a contract for the sale on terms of land, or
collects amounts payable to a company by a person whose shares in the company entitle their holder to the possession of premises, or
(c) for or on behalf of the employer, introduces or arranges for the introduction of prospective buyers, sellers, lessees or licensees of premises to a real estate agent or stock and station agent or to the owner, or to an agent of the owner, of the premises, or
(d) for or on behalf of the employer, arranges for the erection of buildings for any other person, except where the land concerned is used for agricultural or pastoral purposes and has an area of more than 2.5 hectares.
6 In so far as it is relevant to these proceedings section 57 of the PSBAA provides:
- “Procedure
(1) An application for registration or renewal of registration under this Act is to be made in a form approved by the Director-General.
…
(4) The Director-General may, in the case of an application for registration or renewal of registration, inquire into, and the reviewing officer, upon receipt of such particulars, shall, in the case of an application for registration (not being a prescribed application or an application for renewal of registration), inquire into and report upon, the fame and character of the applicant.
…
(4G) Where no objection to the grant of the application for registration has been made pursuant to subsection (4F), the Director-General shall issue the certificate of registration.”
7 Section 60(1) of the PSBAA provides:
- “Cancellation of certificate of registration
(1) Upon complaint being made to him or her by a member of the police force, with the approval of the reviewing officer, or by the Director-General any justice of the peace may summons a real estate salesperson, stock and station salesperson, business salesperson on trainee managing agent to appear before a Local Court constituted a Magistrate sitting alone to show cause why his or her certificate of registration should not be cancelled and why the salesperson or trainee managing agent, should not be disqualified either permanently or temporarily from holding a certificate of registration on the ground:
(a) that the salesperson or trainee managing agent improperly obtained his or her certificate of registration contrary to the provisions of this Act, or
(b) that the salesperson or trainee managing agent is not a fit and proper person to continue any longer to hold a certificate of registration, or
(c) that the salesperson or trainee managing agent has been guilty of such conduct or renders to salesperson or trainee managing agent unfit to continue any longer to hold a certificate of registration.”
8 Division 1 of Part 7 of the Property, Stock and Business Agents (General) Regulation 1993 provides for Licensee's responsibilities with respect to Trust Money. Clauses 26 and 27 of the Regulation provide:
- “26 Banking of trust money states:
A licensee who receives trust money must pay it into the licensee's trust account at a bank; building society or credit union:
- (a) before the end of the next banking day after the day of its receipt, if that is practicable, or
(b) if that is not practicable, as soon as practicable after that day.
27 Records of trust money to be kept by licensees
(1) Every licensee must keep the following records:
- (a) a trust receipt book containing the duplicates of all receipts issued for all amounts received and required to be paid into the trust account (the duplicates being machine numbered consecutively to correspond with the machine numbered receipts),
(b) a trust bank; building society or credit union deposit book showing all deposits made by the licensee into the trust account or some other written record showing those deposits,
(c) a trust account cash book or some other written record of all receipts of amounts required to be paid into, and of all payments made from, the trust account.
(3) A strata managing agent or community managing agent must keep either of the following additional records:
- (a) a single trust account ledger which is in a form permitting each account for an owners corporation, community association, precinct association or neighbourhood association for or on behalf of which the agent holds any money to be physically removed from the ledger, or
(b) a separate trust account ledger for each such owners corporation, community association, precinct association or neighbourhood association.
9 The Tribunal’s powers are conferred by s 63 of the Administrative Decisions Tribunal Act 1997 (the Tribunal Act) Tribunal Act, which provides:
- “63. Determination of review by Tribunal
(1) In determining an application for a review of a reviewable decision, the Tribunal is to decide what the correct and preferable decision is having regard to the material then before it, including the following:
- (a) any relevant factual material,
(b) any applicable written or unwritten law.
(3) In determining an application for the review of a reviewable decision, the Tribunal may decide:
- (a) to affirm the reviewable decision, or
(b) to vary the reviewable decision, or
(c) to set aside the reviewable decision and make a decision in substitution for the reviewable decision it set aside, or
(d) to set aside the reviewable decision and remit the matter for reconsideration by the administrator in accordance with any directions or recommendations of the Tribunal.”
10 By virtue of s 8 of the Tribunal Act, ‘[a] "reviewable decision" is a decision of an administrator that the Tribunal has jurisdiction under an enactment to review.’ Section 64A(8) of the FTA provides the Tribunal with this jurisdiction.
11 The Tribunal has adopted special procedures for hearing applications for review of suspensions, to ensure that they are dealt with expeditiously. On 18 August 2002 the Tribunal’s President dealt with an application by Mr Wong for a stay of the suspension. The application was refused. In accordance with the Practice Note time-table, the present application for review of the suspension was listed for hearing on 4 September 2002, and proceeded on that date. The Director General filed and served the material on which he relied on 30 August 2002 and Mr Wong’s material was filed and served at the hearing. Leave was granted for Mr Wong to give oral evidence and he was cross-examined by Mr. Griffin.
12 A decision on the matter was made on 6 September 2002. These reasons relate to that decision.
The Notice of Suspension
13 The Notice of Suspension was issued on 11 July 2002. The Notice asserts that the Director General was of the opinion that there are reasonable grounds for believing that Mr Wong had engaged in conduct that constitutes grounds for cancellation of the licence under section 60 of the PSBAA; it was likely that he would continue to engage in that conduct; and there is a danger that a person or persons will suffer significant harm, or significant loss or damage, as a result of that conduct unless action was taken urgently. A schedule annexed to the Notice set out the reasons for the decision. That schedule provides:
- “SCHEDULE 'A'
SCHEDULE OF CONDUCT AND REASONS FOR DECISION
For the purposes of S.64A (2) of the Fair Trading Act 1987 this schedule sets out details of the conduct that constitutes grounds for suspension of the certificate of registration referred to in the attached Notice of Suspension, and the reasons for that decision.
A. Within sub-section 64A(2)(a) of the Fair Trading Act 1987 the conduct set out below is such that it is grounds for cancellation of the certificate of registration under the Property Stock and Business Agents Act 1941 ("the Act"), the legislation under which the licence was granted.
Section 60(1) of the Act, provides (in part):
Upon complaint being made to him or her by... the Director-General, any justice of the peace may summon a real estate salesperson, stock and station sales person, business salesperson or trainee managing agent to appear before a Local Court ... to show cause why his or her certificate of registration should not be cancelled and why the salesperson or trainee managing agent should not be disqualified either permanently or temporarily from holding a certificate of registration on the ground:
(a) …
(b) that the salesperson or trainee managing agent is not a fit and proper person to continue any longer to hold a certificate of registration, or
(c) that the salesperson or trainee managing agent has been guilty of such conduct as renders the salesperson or trainee managing agent unfit to continue any longer to hold a certificate of registration.
The conduct of Siang Yap Wong that falls within the prescribed grounds for cancellation of the certificate of registration under section 60(1)(b) and (c) of the Act is:
(1) Slang Yap Wong is the holder of certificate of registration number 1028451 issued under section 57(4G) of the Act. This certificate is due to expire on 9 December 2002.
(2) The sales and property management trust accounts of Tongsing Properties Pty Ltd are apparently deficient of funds for at least $400,000.
(3) The apparent deficiency in the trust account resulted from the misappropriation of trust monies by Joseph Yang, an unlicensed person. This occurred through the negligence of Siang Yap Wong to fulfil his responsibilities as the holder of a certificate of registration.
(4) The details of the conduct set out in paragraphs 2 through 3 above shows that Siang Yap Wong is not a fit and proper person to continue any longer to hold a certificate of registration within the meaning of section 60(1)(b) of the Act.
(5) The details of the conduct set out in paragraphs 2 through 3 above shows that the Siang Yap Wong has been guilty of such conduct as renders him unfit to be the holder of a certificate of registration within the meaning of section 60(1)(c) of the Act.
B. It is likely that within the provisions of section 64A(2)(b) of the Fair Trading Act, Siang Yap Wong will continue to engage in the above conduct for the reasons set out below.
(1) In the absence of Aman Hassan, the licensee-in-charge of Tongsing Properties Pty Ltd, Siang Yap Wong has been the person responsible for, and primarily involved in the receiving of trust moneys on behalf of Tongsing Properties Pty Ltd. Siang Yap Wong allowed Joseph Yang, an unlicensed person, access to such trust monies, and to provide directions on the collection and banking of such trust moneys.
(2) As the holder of a certificate of registration Siang Yap Wong may gain employment with any other licensee or licensee in charge of any other corporation and may therefore be once again involved in the handling trust moneys.
(3) In allowing trust monies to be handled by an unlicensed person and not to have safeguarded the trust monies, Siang Yap Wong showed an ignorance of the basic knowledge required of the holder of a certificate of registration under the Act.
(4) In view of the particulars 1 to 3 above, I am of the view that Siang Yap Wong will continue to engage in the conduct.
C. Within the provisions of section 64A(2)(c) of the Fair Trading Act there is a danger that persons may suffer significant harm or significant loss because of the above conduct.
(1) Siang Yap Wong may gain employment with any other licensee or licensee in charge of any other corporation and may therefore be once again involved in the handling trust moneys.
(2) Siang Yap Wong showed an ignorance of the basic knowledge required of the holder of a certificate of registration under the Act.”
14 The Director General’s material included written submissions, a short form of company extract relating to Tongsing Properties Pty Ltd, and a Record of Interview between Investigator Merv Bird and Mr Wong, also attended by Peter Black, conducted on 3 May 2002.
15 The Director General relied on admissions made by Mr Wong in the 3 May 2002 interview and undisputed evidence of convictions of an associate of Mr Wong known as Mr Joseph Yang also known as Jackie Young and Joseph Young.
The Applicants’ Evidence
16 Mr Wong does not dispute the Director General’s outline of the statutory scheme or the evidence of Mr Joseph Yang’s conduct. Nor does he dispute the Director General’s evidence relating to Tongsing Properties Pty Ltd. He concedes that the Record of Interview in evidence is an accurate record of the interview.
17 Mr Wong gave evidence on his own behalf. His evidence is essentially that during the relevant period his scope of work was strictly confined to sales and listing and nothing else. He was only an executive director of Tongsing Properties Pty Ltd. And was not involved with the management of the company finance or its Trust Accounts.
18 Mr Wong also gave evidence of the losses he has suffered as a consequence of the circumstances surrounding this matter. He considers himself as much a victim in this case as other people who suffered as a result of Joseph Yang's actions. He sated that it is clear that Joseph Yang orchestrated the company arrangements in such a way that he could misappropriate funds from the company accounts and so that Mr Wong would be held responsible. In other words, he was “set up”. Mr Wong said that he trusted Joseph Yang because he is his brother-in-law and Joseph Yang had assisted him in the past. All Mr Wong’s share of commission from the sales of the properties amounting to approximately $12,000.00 had also been misappropriated by Joseph Yang. The matter has affected Mr Wong’s marriage, and he is facing divorce. He has no other skills which would allow him to work in Australia and wants the right to work as a real estate salesman. He states that he has learned a valuable lesson from these events and will comply with any conditions placed on his right to work in that capacity.
The Director General’s Submissions
19 As noted above, the Director General provided written submissions. The submissions set out in detail relevant background and conduct of Mr Wong and Joseph Yang. It is useful to set out that material. The general chronology of events is not in dispute. Those submissions are as follows:
- “STATUTORY SCHEME
1. Real Estate Salespersons are required to be licensed pursuant to the Property, Stock & Business Agents Act, 1941 and Regulations ("PSBA Act").
2. Without limitation the PSBA Act is concerned with the regulation of the real estate industry and imposes requirements on applicants to conduct themselves in accordance with the PSBA Act and Regulations.
3. – 9. [Submissions as to relevant legislation.]
10 The Fair Trading Act ("FTA") is an Act for the protection of consumers in the marketplace. It regulates the supply, advertising and description of goods and services and, in certain respects, the disposal of interests in land.
11. Section 64A of the FTA gives power to the Director-General to suspend licences, permits and authorities issued under legislation administered by the Minister for Fair Trading. The power was introduced by the Fair Trading Amendment (Enforcement and Compliance Powers) Act 2000. The power of suspension is additional to disciplinary provisions in other legislation administered by the Minister for Fair Trading and is limited in its application to the circumstances set out in section 64A.
12. The purpose of section 64A is to give the Director-General of the Department of Fair Trading the power to act swiftly in relation to licensees whose conduct is likely to cause consumers to suffer significant loss or damage.
13. [Section 64A of the FTA set out as above]
Relevant Background
14. Siang Yap (Kenny) Wong ("Wong") is a director and Secretary of Tongsing Properties Pty Ltd having been appointed on 5 September 2001. (Copy of Company extract attached). Wong was under a duty to act in good faith for the benefit of the Corporation, to exercise the degree of skill that may reasonably be expected, to act diligently and to avoid being in conflict of interest situations. As Secretary Wong was under a duty to ensure a record of any board decisions were recorded and carried out.
15. Wong was first issued with a certificate of registration on 19 April 1999 (number 1075451). Wong was issued with a certificate of registration on 10 December 2001 (number 1028457), which is due to, expire on 9 December 2002.
16. Tongsing Properties Pty Ltd, (the "Corporation") was issued with a corporation licence (number 1133031) on 20 November 2001, expire on 19 November 2004. The corporation uses the trading name StarEast Properties Maroubra.
17. Joseph Yang ("Yang") held a real estate licence,(number 282106), from 19 September 1995 until 2 November 2000, when the Licensing Court disqualified him for 5 years for misappropriating trust money from Champion Realty (NSW) Pty Ltd. Yang is the brother-in-law of Wong. Yang married Wong's sister, Alice who is the sole shareholder of Tongsing Properties Pty Ltd. Yang is also known as Jackie Young and Joseph Young.
18. In July 2001, the Department became aware that Yang had continued to trade whilst disqualified. On 26 July 2001, as a result of action commenced by the Department in relation to trading whilst disqualified, Yang gave undertakings to the Supreme Court that he would not be involved in the real estate industry. Shortly thereafter, Yang established Tongsing Properties Pty Ltd with his wife as the sole shareholder.
19. Aman Hassan, (''Hassan") was the licensee-in-charge but due to his wife's illness he was not regularly at the office and had no effective control. He resigned as licensee-in-charge on 2 May 2002.
Conduct by the Applicant
20. In late April 2002, the Department received a complaint relating to a property listed for sale through the Corporation. The purchaser alleged that the agent failed to account for a sales deposit of $120,000.00.
21. Investigation of the matter was commenced on 1 May 2002 and it was established that the subject property was withdrawn from sale. The deposit of $120,000.00 was subsequently repaid to the purchaser by way of a general account cheque signed by Yang. This cheque was returned by the purchaser who was given a bank cheque, which was subsequently dishonoured.
22. At the time of the inspection there were no sales files or financial records relating to sales deposits. Wong advised that the records were at the home address of Yang where Wong also resided.
23. On the 3 May 2002 an interview with Wong was conducted (Copy attached).
24. Wong agreed that the "office procedure" for the receipt of money was to place it in an envelope, put the details on the envelope and slide it into a three drawer cabinet for which only Yang and his wife had the keys.
25. In the interview in response to questions 144 to 148 Wong admits that he gave all money and cheques to Yang and didn't know what happened to the cheques except that they should have gone into the trust account.
26. In response to questions 155-160 Wong admitted that Yang did the accounts and that Yang was made all decisions about the direction of the Corporation.
27. In response to question 189, asking is there a Sales Trust Account Wong admitted he didn't know because it was not his job.
28 In response to questions 229-232 dealing with what had happened to deposits Wong admitted should be in the Trust Account but instead he handed the deposit to Yang.
29. Wong confirmed that the deposit for $120,000.00 along with other deposits of approximately $212,200.00 in total was given to Yang. Wong advised that Yang had withdrawn $24,000.00 from the Rent Trust Account.
30. During the interview Wong provided letters he had received from Alice Yang. The letters apologise for the events that occurred and state that she and Joseph Yang have abandoned the business and fled.
31. The Director-General commenced contempt proceedings against Yang.
32. On 11 July 2002, the Director-General approved a recommendation to suspend the certificate of registration issued to Wong for 60 days in the public interest.
33. In respect of section 64A (2) of the FTA Wong has not fulfilled his responsibilities as a Director of a licensed corporation. He allowed Yang, an unlicensed person to handle trust monies. Wong knew that Yang's real estate licence had been cancelled for a period of five years for misappropriating trust finds.
34. In respect of section 64A (2) (b) of the FTA, Wong was the person responsible for, and primarily involved in the receiving of trust moneys on behalf of Tongsing Properties Pty Ltd. Mr Wong allowed Mr Yang, an unlicensed person, access to such trust monies, and to provide directions on the collection and banking of such trust moneys.
35. As a holder of a certificate of registration, Wong may gain employment with any other licensee or licensee in charge of any corporation and may therefore be once again involved in the handling of trust moneys.
36. In allowing trust monies to be handled by an unlicensed person and not to have safeguarded the trust moneys, Wong displayed an ignorance of the fundamental responsibilities required of the holder of a certificate of registration under the Act, and of his responsibilities as a Director.
37. In respect of section 64A(2)(c) of the FTA there is a danger that persons may suffer significant harm or significant loss because of the above conduct. Wong may gain employment with any other licensee or licensee in charge of any other corporation and may therefore be involved in the handling of trust monies. Further, Wong has shown fundamental ignorance of the responsibilities of the PSBA Act.
38. On 14 August 2002 an Application for an Urgent Stay of Decision pursuant to section 60(2) of the Administrative Decisions Tribunal Act, ("ADTA") was heard by Judge K. O'Connor.
39. Judge O'Connor did not grant the stay, but recommended that the Department give favourable consideration to any application of Wong that allows him to work pending the substantive hearing, with conditions to safeguard the interests of the public. Wong was granted liberty to make further application for a stay on two days notice.
40. The Department has asked Wong's proposed employer to provide written confirmation that Wong has fully advised him/her of the circumstances of Tongsing Pty Ltd and Wong's role in them and a confirmation of his proposed duties.
41. On 23 August 2002 in the Supreme Court Justice Buddin found Yang guilty of contempt for holding himself out as a real estate agent and being involved in a real estate business. Yang was sentenced to nine months imprisonment from 5 July 2002. A two month non-parole period was imposed.
42. When a consumer pays money to a real estate Corporation they have a right to expect it will properly receipted and banked into a trust account.
43. As a Director and Secretary of Tongsing Properties Wong has to discharge certain statutory obligations.
44. Wong does not adequately understand the duties of a Director and Secretary and has not demonstrated the capacity to discharge them.
45. Wong has demonstrated that he is incapable of properly managing real estate agency. He failed to protect the integrity of the financial systems and allowed unauthorised person to access and deal with funds.
46. To date, claims of $247,674.40 have been made for the Property Services Compensation Fund and at least $162,080.00 in potential claims is anticipated having regard to creditors who have contacted the Department.
CONCLUSION
47. The applicant through his conduct has shown a gross-disregard for the PSBA Act and consumers rights and a failure to understand and discharge his obligations.
48. Due to all the above matters it is submitted that the Tribunal should affirm the decision by the Director-General of 11 July 2002 to suspend the certificate of registration issued to Wong.”
20 Mr Wong also provided written submissions. His oral evidence was consistent with those submissions. Those submissions are as follows:
- “I joined Nationwide Realty Maroubra Office on the 15 January 1999 as a sales man. The Licensee of Nationwide Realty Maroubra was Jean-Luc Foulon who managed the company together with Joseph Yang who was a director in Charge of the Asian Division. The Sales Division was managed by Maria Skarparis. I was one of the Salespersons at the time. The other salesman was David Chart. Nationwide Realty operated the real estate business from later part of 1998 to the year 2001 (around March 2001) when it ceased operation under that name. Then Star East Properties Maroubra (2001) was formed and commenced operation soon after with David Chart as the Licensee in charge for few months. Thereafter from 5 September 2001 to May 2002 Aman Hassan was the Licensee in charge.
During my period of employment with nationwide Realty Maroubra my scope of work was only in sales and listing of properties. Any deposit paid by purchaser of property (if it was handed to me) was immediately handed over to the management i.e. either Joseph Yang or Jean Luc Foulon or the Sales Division. I was not involved in the finance or accounts of the company in any way. I was paid on a commission basis based on the number of sales I successfully did every month. I was also paid a sum of $50.00 a week to cover cost of petrol but this payment stopped after a few months. After that my income was solely dependent on the commission calculated at the rate of 20% share to me per successful sale (exclusive agency) and 20% share commission to me for every successful listing of property by me for the company. My scope of work remained exactly the same when Star East was formed and started operating business. Other sales persons joined the newly formed company (see attached copies of the particular of the sales persons).
During my employment at Star East Maroubra, I was paid a sum of $200.00 a week plus the same commission of 20% share for every successful sale and 20% for every successful listing of property I obtained for the company.
I had no management control of the company or its finance. All management control and decision making process was done by Joseph Yang who held the position of Management Director of the company. He was also in charge of all the company's finance and the company's account(s). I was appointed a director in the name only as I was never at any time involved in the company's management. The "boss" of the company was Joseph Yang who was involved in all aspects of the company and made all the decisions. My only aim in the company was to achieve as many sales and listings for the company which I was confident I would be good at and I have no reason to believe or suspect there would be anything wrong with Joseph Yang, managing Director of Star East properties Maroubra at the material time. Further Joseph Yang is also my brother in law and had helped me a lot first in offering me a job at Nationwide Realty, Maroubra and then Star East properties Maroubra. He has also assisted me both financially and in terms of personal encouragement and finance given to me in my study for the Real Estate course which I had completed.
I would stress again that my scope of work is strictly confined to sales and listing and nothing else. I was not involved with the management of the company finance or its Trust Accounts throughout my employment with Nationwide Realty Maroubra and Star East Properties Maroubra. I only realised (after the misappropriation of the trust money by Joseph Yang) that I had been "set up" or made use of by Joseph Yang, my own brother-in-law who I had trusted all these years without questions. Also I had only recently found out that Joseph Yang I believed forged my signature to obtain a Amex Credit Card loan facilities and obtained credit and loan facility from the bank to the extent of $22,000.00 under my name which had not been paid.
I am as much a victim in this case as other people who suffered as a result of Joseph Yang's criminal act. All my share of commission from the sales of the properties by me amounting to $12,000.00 approximately had also been misappropriated by Joseph Yang.
I have learnt Joseph Yang has been arrested recently and charged in court. He had also pleaded guilty to the charges preferred against him and had fully admitted to his single handed role in the carrying out of the criminal act ie misappropriation of the trust monies.
In light of the above I strongly urge your authority to consider the particular facts and circumstances of this case and to consider lifting then suspension of my certificate. I will, if given another chance to work in my real estate profession, ensure that I shall fulfil my responsibilities as an agent and uphold the standard if my profession where required in the strictest sense of the word. I have learnt a good lesson from this case though as an innocent party in the whole affair.”
21 The three question posed by s 64A are whether there are reasonable grounds to believe that: (a) the conduct constitutes grounds for suspension or cancellation of the licence under the relevant legislation; (b) it is likely that the licensee will continue to engage in that conduct, and (c) there is a danger that a person or persons may suffer significant harm, or significant loss or damage, as a result of that conduct unless action is taken urgently.
22 I accept the Director Generals’ evidence with respect to the conduct that lead to these proceedings. Mr Wong admits that he gave all deposits from the business to Joseph Yang and that he did not inquire as to what happened to the trust moneys. He is aware that the deposits should have gone into business trust accounts. He is not aware of what trust accounts were maintained by the company. Joseph Yang prepared the accounts and made all decisions about the direction of the company.
23 Mr Wong has not fulfilled his responsibilities as a Director of Tongsing Properties Pty Ltd, a licensed corporation. Mr Wong was the person responsible for, and primarily involved in the receiving of trust money on behalf of that company. He was under a duty to exercise the degree of skill that may reasonably be expected of a person in that position, to act diligently and to avoid being in conflict of interest situations. I am satisfied that Mr Wong knew that Joseph Yang's real estate licence had been cancelled for a period of five years for misappropriating trust funds. He nevertheless allowed Joseph Yang to handle trust money, and to provide directions on the collection and banking of the trust money.
24 I accept the submission that in allowing trust money to be handled by an unlicensed person and not to have safeguarded the trust money, Mr Wong displayed an ignorance of the fundamental responsibilities required of the holder of a certificate of registration under the PSBAA, and of his responsibilities as a Director. I am satisfied that the conduct alleged against Mr Wong falls within ground (a) of section 64A(2) of the FTA. In my view there is no doubt that the conduct constitutes grounds for suspension or cancellation of the licence under the relevant legislation.
25 On the evidence before me I think it is highly likely that Mr Wong will continue to engage in that conduct in the future because he does not understand the obligations placed on the holder of a licence. Mr Wong has shown fundamental ignorance of his responsibilities under the PSBAA. Without that understanding there can be no confidence that the obligations will be met. Further, Mr Wong does not adequately understand the duties of a company director and secretary and has not demonstrated the capacity to discharge those duties. He has demonstrated that he is incapable of properly managing real estate agency. He failed to protect the integrity of the financial systems and allowed unauthorised person to access and deal with funds.
26 It follows that I am satisfied that the requirements of ground (b) of section 64A(2) of the FTA are satisfied.
27 I am also satisfied that there is a danger that a person or persons may suffer significant harm, or significant loss or damage, as a result of that conduct unless action is taken urgently.
28 In my opinion the Director-General’s decision to suspend Mr Wong’s licence were justified. I appreciate that the consequences of that decision for Mr Wong are very severe. Notwithstanding that being the case, I see no reason to set aside the Director-General’s decision.
Orders
- The decision of the Director General, Department of Fair Trading to suspend the licence held by Mr Siang Yap Wong under the Property, Stock and Business Agents Act 1941 for a period of 60 days is affirmed.
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