COMMISSIONER FOR CONSUMER PROTECTION -v- CAREY [2014] WASCA 7 | Case summary

Court of Appeal (WA)|2014-01-09|Before: Mr J, Lure P, Buss JA, Murphy JA

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : COMMISSIONER FOR CONSUMER PROTECTION -v- CAREY [2014] WASCA 7

Jurisdiction : STATE ADMINISTRATIVE TRIBUNAL OF WESTERN AUSTRALIA

Citation : CAREY and COMMISSIONER FOR CONSUMER PROTECTION [2012] WASAT 237

Vocational regulation - Real estate agents - Appeal by Commissioner from SAT's decision to renew real estate agent's triennial certificate - Whether agent remained of good character and repute and a fit and proper person to hold real estate agent's licence - Agent convicted under Fair Trading Act 1987 (WA) as director of corporation that made knowingly false representations to purchasers concerning the nature of interests in land - Whether Commissioner's failure to bring disciplinary proceedings against agent following conviction an irrelevant consideration in deciding whether to renew certificate - Whether any evidence capable of supporting SAT's finding that Department of Commerce had confidence in agent's integrity and character - Whether SAT mischaracterised agent's offending conduct

Application to renew triennial certificate to carry on business as real estate agent refused

Respondent : Mony de Kerloy Barristers and Solicitors

Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1; [1948] 1 KB 223

Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321

B & L Linings Pty Ltd v Chief Commissioner of State Revenue [2008] NSWCA 187; 2008) 74 NSWLR 481

Carey and Real Estate and Business Agents Supervisory Board [2008] WASAT 304

Carey v Commissioner for Consumer Protection [2012] WASC 8

Carey v Commissioner for Consumer Protection [2013] WASCA 195

Catholic Education Office of WA v Granitto [2012] WASCA 266

Cichello v Estate Agents Licensing Authority [1998] 4 VR 477

Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194

Collector of Customs v Agfa-Gevaert Ltd [1996] HCA 36; (1996) 186 CLR 389

Daming He v Aloe & Co Pty Ltd [2006] VSCA 235

Darwin Bakery Pty Ltd v Sully [1981] FCA 115; (1981) 51 FLR 90

Health Department of Western Australia v Prosser [2004] WASCA 83

Highmoon Pty Ltd v City of Fremantle [2006] WASCA 21

Hughes & Vale Pty Ltd v New South Wales (No 2) [1955] HCA 28; (1955) 93 CLR 127

Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32; (2010) 241 CLR 390

Lourey v Legal Profession Complaints Committee [2012] WASCA 112

Osland v Secretary, Department of Justice (No 2) [2010] HCA 24; (2010) 241 CLR 320

Paridis v Settlement Agents Supervisory Board [2007] WASCA 97; (2007) 33 WAR 361

Re Carey; Ex parte Exclude Holdings Pty Ltd [2006] WASCA 219; (2006) 32 WAR 501

Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 [2003] HCA 30; (2003) 198 ALR 59

Real Estate and Business Agents Supervisory Board v Carey [2010] WASCA 109

Roberts v The State of Western Australia [2005] WASCA 37; (2005) 29 WAR 445

Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (Vic) [2001] HCA 49; (2001) 207 CLR 72

Ruhamah Property Co Ltd v Federal Commissioner of Taxation [1928] HCA 22; (1928) 41 CLR 148

Silkchime Pty Ltd v Warwick Entertainment Centre Pty Ltd [No 2] [2013] WASCA 224

Sudath v Health Care Complaints Commission [2012] NSWCA 171

Tasty Chicks Pty Ltd v Chief Commissioner of State Revenue (NSW) [2011] HCA 41; (2011) 245 CLR 446

TNT Skypak International (Aust) Pty Ltd v Federal Commissioner of Taxation [1988] FCA 119; (1988) 82 ALR 175

Warwick Entertainment Centre Pty Ltd v Silkchime Pty Ltd [No 2] [2012] WASC 275

1 McLURE P: This is an appeal from the decision of the State Administrative Tribunal (the Tribunal) to set aside the decision of the appellant to refuse to renew the respondent's triennial certificate to carry on business as a real estate agent and in lieu thereof to grant the renewal of the triennial certificate on conditions.

2 The appellant's decision to refuse to renew the respondent's triennial certificate was made under s 31(3) of the Real Estate and Business Agents Act 1978 (WA) (REBA Act). Any person aggrieved by a reviewable decision of the Commissioner (which includes a decision under s 31) may apply to the Tribunal for a review of the decision (s 23).

3 On the respondent's application, the Tribunal exercised its review jurisdiction under pt 3 div 3 of the State Administrative Tribunal Act 2004 (WA) (the SAT Act). A review is by way of a hearing de novo and is not confined to matters that were before the appellant (s 27).

4 The issues before the Tribunal were whether the Tribunal was satisfied that the respondent no longer (a) was a person of good character and repute and a fit and proper person to hold a licence (in accordance with s 27(1)(b) of the REBA Act) and (b) understood fully the duties and obligations imposed by the REBA Act on agents (in accordance with s 27(1)(d)).

5 The appeal to this court is pursuant to s 105 of the SAT Act. A party to tribunal proceedings may appeal only if the court gives leave to appeal and the appeal can only be brought on a question of law. The parties disagree as to the scope of the matters litigated in the Tribunal and thus what can be raised in this appeal.

6 However, there is no dispute that the credibility of the respondent as a witness featured prominently below. The respondent had been the subject of adverse findings and comment in a number of proceedings in which he had given evidence on oath. It is necessary to detail the relevant factual background.

7 The respondent has held a real estate agent's licence under the REBA Act since January 1980. He was at all material times the sole director of Westpoint Realty Pty Ltd (Westpoint Realty) which was licensed under s 29 of the REBA Act in 1992.

8 Westpoint Realty was part of a large group of related companies connected with Westpoint Corporation Pty Ltd (the Westpoint Group). From 2004, Westpoint Realty was the selling agent for a land development called the 'Regent Apartments Project', a development carried out by Lanepoint Enterprises Pty Ltd (Lanepoint), another company in the Westpoint Group of which the respondent was a director. The Westpoint Group collapsed in 2005 - 2006.

9 In December 2006, the respondent lodged an application with the Real Estate and Business Agents Supervisory Board (the Board) to renew his triennial certificate. A triennial certificate is required in order to carry on business as a real estate agent. In June 2007, the Board refused the respondent's application based on, inter alia, his evidence given in Federal Court proceedings.

10 In March 2006, the Australian Securities and Investments Commission (ASIC) commenced proceedings in the Federal Court pursuant to s 1323 of the Corporations Act 2001 (Cth) seeking, among other things, the appointment of receivers to the property of officers and former officers of companies in the Westpoint Group. The respondent was named as a defendant. On 20 April 2006, French J (as he then was) made asset preservation orders and the respondent, along with others, was ordered to provide detailed affidavits about his assets and liabilities. The respondent did so and was cross-examined on the affidavit in proceedings before a Deputy Registrar of the Federal Court on 5 July 2006.

11 The respondent applied to the Tribunal to review the Board's decision to refuse to renew his triennial certificate. In December 2008 the Tribunal conducted a review and set aside the Board's decision. The Tribunal substituted a decision granting the respondent's application to renew his triennial certificate: Carey and Real Estate and Business Agents Supervisory Board [2008] WASAT 304 (the earlier SAT decision). An issue before the Tribunal was the truthfulness of the respondent's evidence in cross-examination during the Federal Court proceedings. The Tribunal said:

It is not possible in the context of these proceedings to make any findings as to the truthfulness of Mr Carey's evidence. We do consider, however, that it is reasonable to conclude that Mr Carey's evidence to the Deputy Registrar in relation to the [Hilton] trust was somewhat evasive and uncooperative and his evidence to the Tribunal on this point was unreliable [25].

12 The Tribunal came to its decision notwithstanding concerns it expressed in relation to the frankness of the respondent's evidence in the Federal Court and in the Tribunal proceedings. The Tribunal described the respondent's evidence in relation to the trust as 'troubling' and the level of his claimed ignorance as 'very difficult to accept'.

13 The Tribunal also rejected the respondent's evidence that he personally managed the agency business of Westpoint Realty as required by the Code of Conduct under the REBA Act [63].

14 The Board applied for an extension of time within which to appeal to the Court of Appeal from the decision of the Tribunal. In June 2010 the Court of Appeal refused the Board's application for an extension of time after assessing the merits of the proposed appeal: Real Estate and Business Agents Supervisory Board v Carey [2010] WASCA 109. One of the proposed grounds of appeal was that the Tribunal's decision to renew the respondent's triennial certificate was unreasonable in the Wednesbury sense (Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1; [1948] 1 KB 223). Owen JA, with whom Buss and Newnes JA agreed, was not satisfied that the Tribunal's decision was so unreasonable that no decision maker, acting reasonably, could have made the same decision [64]. Owen JA summarised the Tribunal's view as being that 'until concrete findings of misconduct or dishonesty were made against [Mr] Carey, he ought to be entitled to earn a living' [62]. This approach clearly influenced the Tribunal's decision now under appeal.

15 In February 2011, the respondent was convicted after a trial in the Perth Magistrates Court of five breaches of s 12(2)(b) of the Fair Trading Act 1987 (WA) (the FTA) in respect of false representations made by three real estate agents who were registered representatives of Westpoint Realty (Unreported, Magistrates Court of Western Australia, Malone M, 11 February 2011) (the Magistrates Court decision). The three real estate agents pleaded guilty. Westpoint Realty and the respondent pleaded not guilty. Westpoint Realty did not actively participate in the trial.

16 What follows is largely taken from the Tribunal's summary of matters relating to the respondent's convictions. The false representations made by the three agents related to the Regent Apartments Project. Originally that project consisted of the refurbishment and conversion of 77 motel units into 40 residential apartments, known as Stage 1A, and the construction of a new two-storey building comprising 12 residential apartments, known as Stage 1B. In late 2004 and early 2005 each of the 40 units in Stage 1A were sold to purchasers 'off the plan'. The sale contracts provided the purchasers with a certain entitlement to common property within the development comprising both Stage 1A and Stage 1B.

17 The local government authority, the City of Belmont, approved Stage 1A in April 2005 but was not happy with the proposed Stage 1B development, preferring a higher, 'landmark' building in place of the proposed two-storey building. The City of Belmont did not approve the Stage 1B development within the legislated time, which gave rise to a deemed refusal against which Lanepoint appealed to the Tribunal.

18 The Tribunal proceedings between Lanepoint and the City of Belmont were settled by agreement in May 2005 on the basis that the proposed building the subject of Stage 1B would be five storeys with an increase in the number of units from 12 to 20. The Tribunal made consent orders giving effect to the settlement on 29 July 2005. The consequence of this was that, although the modified Stage 1B development did not affect the physical form of the units in Stage 1A, those units had an entitlement to common property under the sale contracts which could not now be met because of the increase in the total number of units in Stages 1A and 1B from 52 to 60.

19 In late October 2005, the respondent wrote a memorandum to the three agents and their immediate superiors (the respondent's October memorandum) in which he required the agents to meet with the Stage 1A purchasers and resolve the problem. Magistrate Malone was highly critical of the respondent's October memorandum, describing various statements in it as 'a gross over-simplification', 'not true', and of 'doubt[ful] ... accuracy'. The magistrate regarded the respondent's October memorandum as 'reflect[ing] directly, and adversely, on Mr Carey's credibility'.

20 After receiving the respondent's October memorandum, the three agents met with the purchasers of the units in Stage 1A. The magistrate found that the three agents made knowingly false representations to five purchasers concerning the use to which the land the subject of the development was capable of being put, contrary to s 12(2)(b) of the FTA. The agents represented that the project, including Stage 1A, 'was not going ahead', 'might never be finished', 'was indefinitely delayed', or 'was not going anywhere'. The purchasers agreed to terminate their contracts. Shortly thereafter, the units were sold to other purchasers at a higher price.

21 Pursuant to s 82(2) of the FTA (which deems conduct engaged in by an agent of a body corporate to have been engaged in also by the body corporate) Westpoint Realty was also convicted of five counts of making false representations contrary to s 12(2)(b).

22 The respondent, as a director of Westpoint Realty, was deemed to have committed the same offences as the company unless he could prove that he came within s 81(1) of the FTA. He failed in that regard.

23 Section 81 of the FTA relevantly provided:

(1) Where a corporation ... is convicted of an offence against this Act, each person who, at the time of the commission of that offence, was a director of the corporation ... is also guilty of an offence unless he proves -

(a) that the offence was committed without his knowledge, or that he did not authorise or permit the commission of the offence; and

(b) that he was not in a position to influence the conduct of that corporation or body or, being in such a position, could not by the exercise of reasonable diligence have prevented the commission of the offence,

and is liable to a penalty not exceeding the penalty prescribed for the offence of which the corporation ... was convicted.

24 The magistrate found that the respondent did not authorise or permit the offences in which event par (a) of s 81(1) was proven. However, the magistrate concluded that the respondent was part of the process whereby the agents understood they were to obtain termination of all the Stage 1A contracts on the basis that each of the properties were to be resold to others and that the respondent wanted that outcome and it was achieved.

25 The magistrate also found that the respondent was in a position to influence the conduct of Westpoint Realty and its agents and that he could, by the exercise of reasonable diligence, have prevented the commission of the offences. As the respondent did not prove either of the matters in s 81(1)(b) he was convicted of the five offences.

26 The respondent appealed against his convictions under pt 2 of the Criminal Appeals Act 2004 (WA). The appeal came before Murray J who dismissed it: Carey v Commissioner for Consumer Protection [2012] WASC 8 (the single judge appeal).

27 The respondent sought and obtained leave to appeal from Murray J's decision to the Court of Appeal. At the time of delivery of the Tribunal decision that appeal had not been heard or determined. The appeal from Murray J was dismissed by the Court of Appeal on 28 August 2013, prior to the hearing of this appeal: Carey v Commissioner for Consumer Protection [2013] WASCA 195 (the Convictions Appeal). In the reasons for judgment in both appeals the judges made observations concerning the scope and effect of the findings and conclusions of the magistrate. It is fair to say that the leading judgment of the Chief Justice (with whom Newnes JA agreed) in the Convictions Appeal presents a strikingly different picture of the nature and extent of the respondent's involvement in the circumstances leading to the offences committed by the three agents than that painted by the Tribunal. That is a matter to which I will return.

28 The final set of proceedings relate to two companies who had been members of, or associated with, the Westpoint Group, Warwick Entertainment Centre Pty Ltd (Warwick) and Silkchime Pty Ltd (Silkchime). As a result of the collapse of the Westpoint Group, receivers and managers were appointed to both Warwick and Silkchime. Warwick sued Silkchime for repayment of intercompany loans in excess of $12.7 million. The respondent was a director of both Warwick and Silkchime during the time of the loans. Silkchime defended the claim on the basis that the loans were non-interest bearing and non-recourse pursuant to an oral joint venture agreement made in about 1994 and reduced to writing in July 1995. Silkchime called the respondent who gave evidence at trial that he had signed a joint venture agreement between Silkchime and Warwick and applied the Silkchime company seal to it in July 1995 and gave the executed agreement to the then financial controller of the Westpoint Group.

29 The trial judge, Le Miere J, rejected the respondent's evidence relating to the execution of the joint venture agreement and his evidence that he did not look at management accounts of Warwick and Silkchime that were inconsistent with the alleged joint venture agreement. The judgment at first instance was published shortly after the Tribunal hearing: Warwick Entertainment Centre Pty Ltd v Silkchime Pty Ltd [No 2] [2012] WASC 275 (the Silkchime decision). However, both parties to the Tribunal proceedings filed written submissions in relation to the significance of that judgment.

30 Silkchime appealed to the Court of Appeal against the decision of Le Miere J. After the Tribunal published its reasons but before the hearing of this appeal, the Court of Appeal heard Silkchime's appeal which it subsequently dismissed: Silkchime Pty Ltd v Warwick Entertainment Centre Pty Ltd [No 2] [2013] WASCA 224 (the Silkchime Appeal). The Court of Appeal was required to examine the nature and extent of the adverse findings affecting the respondent. That is also a matter to which I will return.

The Tribunal's decision and the scope of the litigated issues

31 In its reasons for decision the Tribunal identified three bases on which the Commissioner contended that the respondent was not a fit and proper person to hold a licence. The first basis was that the respondent had been shown by the adverse findings in relation to him in the earlier SAT decision, the Magistrates Court decision, the Silkchime decision, and by his cross-examination in the Tribunal proceedings, to lack the necessary attribute of honesty which is central to practice as a real estate agent [28].

32 The Tribunal concluded that, notwithstanding that the magistrate's findings were expressed in very strong and robust terms, they did not, even taken together with the adverse findings in relation to the respondent's evidence in the earlier SAT decision and the Silkchime decision, demonstrate that the respondent is a dishonest person and therefore not a fit and proper person to hold a real estate agent's licence [32]. The Tribunal noted that the respondent had not been found guilty in any proceedings of any dishonesty offence. In the Magistrates Court proceedings the respondent was found guilty of offences of which he was deemed, as a director of Westpoint Realty, to have committed; the respondent had proved that the offences were committed without his knowledge, authorisation or permission; and that ultimately the respondent was convicted because of a 'systems failure', not because of any dishonesty on his part [33].

33 The Tribunal said there had been no finding in any proceeding that the respondent deliberately lied or was dishonest. In particular, the Tribunal concluded that the adverse findings in relation to the respondent did not constitute concrete findings of dishonesty which would demonstrate that he is no longer a fit and proper person to hold a licence [36].

34 The Commissioner also contended that the rejection of the respondent's evidence in proceedings in the Tribunal, the Magistrates Court and the Supreme Court demonstrated that the respondent lacked good character and that the adverse credibility findings, being on the public record, meant he lacked good repute [37]. The Tribunal said:

We have given some anxious consideration to the question of whether the findings of the Magistrate's [sic] Court, when taken together with adverse findings about Mr Carey's evidence in the earlier SAT proceeding and in the Supreme Court proceeding, demonstrate that he has serious deficiencies in his moral character, or that his public estimation or repute is no longer good, or that he is not possessed of sufficient moral integrity and rectitude of character as to permit him to be safely accredited as a real estate agent. Although, as we have said, the Magistrate's findings were expressed in very strong and robust terms, for the reasons set out earlier and for the following three reasons, we do not consider that those findings, on their own or taken with findings in the earlier SAT decision and the Supreme Court decision, show that Mr Carey is no longer a person of good character and repute and a fit and proper person to be licensed as a real estate agent.

First, Mr Carey has been a real estate agent for 32 years and, with the exception of the convictions in the Magistrate's [sic] Court decision, has an apparently unblemished professional record.

Second, the Commissioner did not bring disciplinary proceedings in the Tribunal under s 102(1) of the REBA Act alleging that there is proper cause for disciplinary action against Mr Carey when the Magistrate's [sic] Court's decision was published. Under s 103(1) of the REBA Act, if the Tribunal is satisfied that proper cause exists for disciplinary action against an agent, it may impose a range of penalties, including the suspension or cancellation of the agent's licence and triennial certificate and the disqualification of the agent from holding a licence and/or triennial certificate, whether permanently, temporarily or until the fulfilment of any condition. The Commissioner did not seek to prevent Mr Carey from practising as a real estate agent for over 12 months after the Magistrate's [sic] Court decision, but rather waited for the expiry of his triennial certificate and then refused to renew it.

Third, the liquidator of Westpoint Realty, apparently with the knowledge of the Department of Commerce, has relied on Mr Carey to facilitate the reconciliation of the Westpoint Realty trust account. This demonstrates confidence in Mr Carey's integrity and character [38] - [41].

35 The second basis on which the Commissioner contended that the respondent was not a fit and proper person to hold a licence was that the offences of which he was convicted involved the respondent failing to:

- adequately supervise the sales representatives, in breach of r 6(2) of the Code of Conduct;

- be diligent concerning the management of Westpoint Realty in breach of r 7 of the Code of Conduct; and

- take decisive action over the period July to late October 2005 (when he wrote the October memorandum) on an important issue directly concerning the purchasers' interests in land, in breach of r 7 of the Code of Conduct.

36 The Tribunal rejected that submission on the basis that the magistrate's findings meant no more than that the system of compliance was not adequate or appropriate and could not lead to a conclusion that the respondent had a disregard for the interests of purchasers [44]. Further, the magistrate's finding was not equivalent to a determination that the respondent inadequately supervised sales representatives or was not diligent concerning the management of Westpoint Realty [44].

37 Two further factors taken into account by the Tribunal in determining the significance of the respondent's convictions were that the offences occurred seven years previously and that the respondent had worked as a real estate agent for approximately 32 years without any other conviction or adverse disciplinary determination over that period [47].

38 The third basis relied on by the Commissioner for the contention that the respondent was not a fit and proper person to hold a real estate agent's licence was that the respondent's conduct since his conviction demonstrated a lack of insight and contrition and a failure to understand the obligations of a licensed real estate agent. The Tribunal dismissed this claim. It accepted the respondent's submissions that the decision to appeal against the convictions could not demonstrate lack of contrition, insight or understanding because of the complexity of s 81(1). The Tribunal also had regard to the fact that the respondent had indicated a willingness to attend specific educational training courses prior to the Commissioner refusing to renew the respondent's triennial certificate [48].

39 The Commissioner also contended that the respondent no longer understood fully the duties and obligations imposed by the REBA Act. The Tribunal was not satisfied of that, noting that his convictions demonstrated a failure of his compliance system, not a failure to understand fully the duties and obligations imposed by the REBA Act on agents [52]. Further, the Tribunal said he could not be fairly criticised for having maintained a legal position on appeal in relation to s 81(1) of the FTA having regard to its complexity. The Tribunal again relied on the fact that the respondent had been willing to undertake specific educational training courses required by the Commissioner.

40 The Commissioner's original three grounds of appeal are that the Tribunal erred in law in:

(1) taking into account an irrelevant consideration, namely, that the appellant did not, following the respondent's convictions for offences against the FTA in February 2011, commence proceedings pursuant to s 102(1) of the REBA Act alleging that there was a proper cause for disciplinary action against the respondent;

(2) finding that the reliance by the liquidator of Westpoint Realty on the respondent to facilitate the reconciliation of Westpoint Realty's trust account demonstrated that the liquidator and/or the Department of Commerce had confidence in the respondent's integrity and character when there was no basis in the evidence before the Tribunal to support that finding;

(3) failing to take into account a relevant consideration, namely, whether the respondent had the ability to comply with his duties and obligations as a real estate agent.

41 After filing the Appellant's Case, the appellant filed supplementary submissions to address matters arising from the Convictions Appeal. The respondent filed responsive submissions.

42 During the course of the hearing of this appeal the appellant foreshadowed an application for leave to amend ground 3 to identify the error as being a mischaracterisation of the nature of the respondent's convictions under the FTA. The appellant was given leave to file a proposed amended ground 3 and written submissions in support thereof. The proposed amended ground 3 is in the following terms:

The Tribunal erred in law in that, in determining whether for the purposes of ss 27(1)(b) and 31(3) of the REBA Act the respondent was a fit and proper person to hold a licence, it mischaracterised the nature of the respondent's convictions under the [FTA].

(a) the Tribunal mischaracterised the nature of the respondent's offences against ss 12(2)(b) and 81 of the [FTA] as merely a 'systems failure' or 'failure of compliance';

(b) the making of a false or misleading representation is an element of an offence in s 12(2)(b) of the [FTA];

(c) the respondent's offences against s 12(2)(b) and s 81 of the [FTA] were properly characterised as offences of dishonesty;

(d) the Tribunal failed to properly characterise the respondent's offences in s 12(2)(b) of the [FTA] and s 81, by finding:

(i) [the] respondent 'ha[d] not been found guilty, in the Magistrates Court proceedings or any other proceedings, of any dishonesty offence';

(ii) '[that the Tribunal did not] consider that the adverse findings in relation to [the respondent] constitute concrete findings of dishonesty which would demonstrate that he is no longer a fit and proper person to hold a licence'; and

(iii) [the respondent's offence meant] no more than that the system of compliance was not adequate or appropriate and cannot lead to a conclusion that [the respondent] has disregard for the interests of purchasers.

43 The respondent objects to the proposed amendment on the basis that, not only were the issues not raised before the Tribunal, they were expressly disavowed by the appellant and if they had been raised, the respondent would have adduced different evidence and taken a different approach before the Tribunal.

44 Insofar as the proposed ground contends that dishonesty is a legal element of the offences of which the respondent was convicted, I would refuse leave. The proposition is inconsistent with the appellant's case before the Tribunal. Further, for the reasons given below, the claim is without merit.

45 However, the proposed ground also goes to the proper characterisation of the magistrate's findings relating to the respondent's conduct underlying the convictions (the factual foundation claim).

46 The respondent's objection to the factual foundation claim is premised on the submission that the only aspect of his conduct in issue before the Tribunal was his credibility as a witness, there being no claim that he was otherwise dishonest or had conducted himself in a dishonest way.

47 That submission cannot be accepted. It is inconsistent with the appellant's amended substituted Statement of Issues Facts and Contentions before the Tribunal ([32] - [37], [87], [88]), the appellant's aide memoire as to the magistrate's findings, and the appellant's closing submissions in which it was submitted that the Tribunal's assessment of the respondent's fitness and character should be informed by the magistrate's adverse findings concerning both his conduct and his credit [27], [29].

48 The respondent's submission is also inconsistent with the Tribunal's identification and determination of the issues in [28] - [33] of its reasons referred to above. Moreover, central to all aspects of the Tribunal's findings is its characterisation of the respondent's offending as, in effect, arising from a systems failure.

49 Indeed, it was the respondent in opening (it being a hearing de novo, the respondent went first) who raised the characterisation of his conduct underlying the convictions as an issue. In oral submissions to the Tribunal, counsel for the respondent emphasised that his client had no involvement in the commission of the underlying offences and that he had been convicted because of a systems failure (31/7/12, ts 10, 11, 29, 30).

50 Further, the credibility findings made by the magistrate are inextricably linked with the magistrate's positive adverse findings relating to the respondent's conduct which formed the factual foundation for his convictions.

51 I am satisfied that the factual foundation claim was raised and litigated in the Tribunal and would grant leave to amend in terms of proposed ground 3 so confined.

52 Before going to the grounds of appeal it is necessary to say something about the relevant statutory framework.

53 Section 27 of the REBA Act relates to the licensing of natural persons. Section 27(1) relevantly provides that a person who applies to the Commissioner for a licence and pays the prescribed fee shall be granted and may hold a licence if the Commissioner is satisfied that, inter alia,:

(b) he is a person of good character and repute and a fit and proper person to hold a licence; and

...

(d) he understands fully the duties and obligations imposed by [the REBA] Act on agents.

54 Section 31(1) provides that the Commissioner shall on the grant of a licence grant the licensee a certificate which confers on the licensee the right to carry on business as an agent for the period of three years. Section 31(3) relevantly provides:

The Commissioner may refuse to renew a licensee's triennial certificate if:

(a) the Commissioner is satisfied that s 27(1)(b) ... or (d) ... does not apply, or no longer applies, in relation to the licensee.

55 The condition enlivening the power to refuse to renew in s 31(3) is not the same as the condition that enlivens the obligation under s 27(1) to grant a licence, namely the Commissioner's satisfaction of each of the matters in pars (a) - (d) inclusive. The Tribunal correctly identified the issues arising under s 31(3) as being whether the Tribunal is satisfied that the respondent no longer:

- is a person of good character and repute and a fit and proper person to hold a licence; or

- understands fully the duties and obligations imposed by the REBA Act and the associated code of conduct on real estate agents.

56 The Commissioner had addressed herself to the wrong question. She refused to renew the triennial certificate because she was not satisfied of the matters in s 27(1)(b) and (d).

57 Section 101 empowers the Commissioner, from time to time, to prescribe and publish a code of conduct for real estate agents, a breach of which shall be a proper cause for disciplinary action under s 103(2).

58 Under the Acts Amendment (Fair Trading) Act 2010 (WA) the Commissioner replaced the Board as the repository of the functions and powers under the REBA Act, including in s 27, s 31 and s 102. That took effect from 1 July 2011.

59 The Board, and after 1 July 2011 the Commissioner, had the power under s 102 to allege to the Tribunal that there was proper cause for disciplinary action against an agent under s 103(2).

60 Section 12(2) of the FTA relevantly provided:

A person shall not, in trade or commerce, in connection with the disposal, or the possible disposal, of an interest in land -

...

(b) make a false or misleading representation concerning the nature of the interest in the land ...

61 Section 13 of the FTA delineates the scope of the expression 'false representation'. It relevantly provides:

For the purposes of this Act, and without limiting the generality of s 12, a statement shall be taken to be a false representation if -

(a) it is false, or deceives, or if it or any information thereby provided is materially inaccurate and that statement is intended or is apparently intended -

(i) to promote ... the disposal of any interest in land.

62 The definition of 'materially inaccurate' in s 13(2) does not require knowledge of the inaccuracy. The parties assumed that a false representation for the purposes of s 12(2) was a knowingly untrue representation as distinct from a representation that is 'contrary to fact' without knowledge on the part of the person making the representation of its falsity.

63 The meaning of the word 'false' varies according to its context. See Murphy v Farmer (1988) 165 CLR 19. However, there is majority judicial support for the view that 'false' in s 12 means incorrect in fact, not knowingly incorrect. See Miller, RV, Miller's Annotated Trade Practices Act (31st ed) [1.53.15]; Darwin Bakery Pty Ltd v Sully [1981] FCA 115; (1981) 51 FLR 90.

64 Having regard to s 13, I would conclude that a representation may be false for the purpose of s 12(2)(b) without the representor having knowledge of its falsity.

65 The appellant contended that an appeal from a Tribunal decision under s 105(2) is an appeal by way of rehearing and that the appeal court has the power to admit evidence in the appeal. The submission is wrong on both counts.

66 Under s 105(2), the appeal can only be brought on a question of law. Section 105(9) of the SAT Act lists the appeal court's powers. It provides:

The court dealing with the appeal may -

(a) affirm, vary, or set aside the decision of the Tribunal; or

(b) make any decision that the Tribunal could have made in the proceeding; or

(c) send the matter back to the Tribunal for reconsideration, either with or without the hearing of further evidence, in accordance with any directions or recommendations that the court considers appropriate,

and, in any case, may make any order the court considers appropriate.

67 The High Court in Osland v Secretary, Department of Justice (No 2) [2010] HCA 24; (2010) 241 CLR 320, considered the nature and scope of the jurisdiction and powers of an appeal court in appeals from orders of the Victorian Civil and Administrative Tribunal (VCAT) under s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (VCAT Act). Section 148(1) and (7) of the VCAT Act are in materially the same terms as s 105(2) and (9) of the SAT Act.

68 The plurality in Osland (French CJ, Gummow & Bell JJ) held that s 148(1), despite describing proceedings under the section as appeals, confers original not appellate jurisdiction, describing the proceedings as being 'in the nature of judicial review' [18]. See also, Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (Vic) [2001] HCA 49; (2001) 207 CLR 72 [15]. The appeal court does not have jurisdiction to make findings of fact. As a result, the appeal court may make substitutive orders pursuant to s 148(7) where only one conclusion is open on the correct application of the law to the facts found by the Tribunal [20]. The plurality noted that although the language of s 148(7) was sufficiently wide to allow substitutive orders to be made in other circumstances, s 148(7) did not enlarge the jurisdiction conferred by s 148(1). Accordingly, the court's powers under s 148(7) must be exercised having regard to the limited nature of an appeal under s 148(1) [20].

69 It necessarily follows from Osland that an appeal under s 148(1) is not an appeal by way of rehearing: Catholic Education Office of WA v Granitto [2012] WASCA 266 [65].

70 The decisions in Osland and Roy Morgan relating to the Victorian legislation have been held to apply to s 105 of the SAT Act (Lourey v Legal Profession Complaints Committee [2012] WASCA 112 [27]) and to the equivalent provision in New South Wales (B & L Linings Pty Ltd v Chief Commissioner of State Revenue [2008] NSWCA 187; (2008) 74 NSWLR 481 [75]).

71 It has also been held that, as a consequence of the limited scope of the jurisdiction under s 148(1), the appeal court does not have the express or implied power to receive additional evidence in the 'appeal': Daming He v Aloe & Co Pty Ltd [2006] VSCA 235 [97]. That must also be the case under s 105 of the SAT Act.

72 An appeal under s 105(2) of the SAT Act is analogous to judicial review in the sense that the error both enlivens and limits the scope of the jurisdiction. However, it is not analogous in the sense that the jurisdiction under s 105(2) is (subject to the availability of certiorari for error of law on the face of the record) confined to jurisdictional errors of law. That is, s 105(2) applies to all errors of law, jurisdictional or otherwise: Re Carey; Ex parte Exclude Holdings Pty Ltd [2006] WASCA 219; (2006) 32 WAR 501 [138]. The (common law) review jurisdiction is preserved by s 19 of the SAT Act.

73 The scope of appellate jurisdiction is wider where an appeal 'involves' a question of law: Ruhamah Property Co Ltd v Federal Commissioner of Taxation [1928] HCA 22; (1928) 41 CLR 148, 151. Where a question of law is 'involved', the whole of the decision appealed from is open to review, not merely the question of law.

74 A determination as to whether an applicant for a triennial certificate no longer satisfies the requirements in s 27(1)(b) involves an evaluative judgment of a discretionary kind on which reasonable minds may differ. In that event, to take into account an irrelevant consideration (and a failure to take into account a relevant consideration) gives rise to an error of law. So much is accepted by the parties.

75 At first blush, it is difficult to identify any relevant connection, legal or factual, between the specific matter that was in issue in the de novo Tribunal review, being whether the respondent was of good character and repute and a fit and proper person to hold a real estate agent's licence, and the fact that the Commissioner did not bring disciplinary proceedings in the Tribunal under s 102(1) of the REBA Act when the Magistrates Court decision was published. The Tribunal noted that the Commissioner did not 'seek to prevent [the respondent] from practising as a real estate agent for over 12 months after the Magistrates Court decision, but rather waited for the expiry of his triennial certificate and then refused to renew it'.

76 Relevance is to be assessed by reference to the surrounding circumstances known to the Tribunal. The chronology is as follows. Magistrate Malone delivered his judgment on 11 February 2011. The respondent commenced his single judge appeal on 4 March 2011. The appellant replaced the Board as the person responsible for licensing functions under the REBA Act on 1 July 2011. The respondent lodged his application to renew his triennial certificate on 22 December 2011. The judgment in the single judge appeal was delivered on 10 January 2012. The appellant advised the respondent by letter dated 22 February 2012 of the preliminary decision to refuse to renew his triennial certificate and invited submissions. The respondent provided submissions by letter dated 27 February 2012. On 8 March 2012 the appellant refused the respondent's application to renew his triennial certificate.

77 The Tribunal does not suggest that an interim injunctive order under s 90 of the SAT Act would have been reasonable or appropriate. Accordingly, the only reasonable inference is that the Tribunal considered that the alternative route under s 102(1) of the REBA Act could and should have been taken while the single judge appeal was pending and that such course could or should have resulted in a speedier final determination. Both of those inferences may be regarded as highly contestable. However, they can have no legal or factual relevance to the Tribunal's de novo assessment of whether the respondent remained a person of good character and repute and a fit and proper person to hold a licence. In a hearing de novo the matter is heard afresh and decided on the evidence presented at that hearing. The Tribunal is required to exercise anew the powers of the original decision-maker whether or not there was an error by that decision-maker: Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194 [14]; Allesch v Maunz (2000) 203 CLR 172.

78 If the further inference is intended to be that the delay undermines the Board and later the Commissioner's opinion of the respondent's fitness to continue to carry on business as a real estate agent, then that too must be irrelevant. The Tribunal's role is to make its own de novo decision on the issues in contention. I would uphold ground of appeal 1.

79 The appellant contends that there is no evidence to support the finding that the liquidator of Westpoint Realty and the Department of Commerce had confidence in the respondent's integrity and character.

80 Courts have frequently lamented that no satisfactory test of universal application has yet been formulated for distinguishing between errors of fact and errors of law: Collector of Customs v Agfa-Gevaert Ltd [1996] HCA 36; (1996) 186 CLR 389, 394; Highmoon Pty Ltd v City of Fremantle [2006] WASCA 21 [37].

81 In Health Department of Western Australia v Prosser [2004] WASCA 83, Steytler J reviewed the authorities and concluded that the statement that most accurately reflects the contemporary Australian position remained that of Mason CJ in Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321, 355 - 356. Mason CJ's propositions are to the following effect. The question whether there is any evidence of a particular fact is a question of law. Likewise, the question whether a particular inference can be drawn from facts found or agreed is a question of law. This is because, before the inference is drawn, there is the preliminary question whether the evidence reasonably admits of different conclusions. In the context of judicial review, it has been accepted that the making of findings and the drawing of inferences in the absence of evidence is an error of law. But there is no error of law simply in making a wrong finding of fact. Even if the reasoning whereby the decision-maker reached its conclusion of fact were demonstrably unsound, this would not amount to an error of law. So long as there is some basis for an inference - in other words, the particular inference is reasonably open - even if that inference appears to have been drawn as a result of illogical reasoning, no error of law has taken place.

82 Mason CJ's statement of the principles remains good law at least in cases that do not depend on having to establish a jurisdictional error of law: Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 [2003] HCA 30; (2003) 198 ALR 59 [57].

83 The respondent gave evidence on this subject in a witness statement tendered in evidence in the Tribunal. By way of background, he states that in 2007 the Board appointed a Supervisor to Westpoint Realty. A dispute arose between the Board and the Supervisor over the level of his fees and he resigned with a considerable sum of money in the Westpoint Realty trust account being undistributed. That money was transferred to the Commissioner. Over this period, a liquidator was appointed to Westpoint Realty. The liquidator and the Commissioner could not agree on who was to pay for the reconciliation of the trust account. Frustrated and concerned for the owners of the moneys, he offered to carry out a proper reconciliation. He continued:

The liquidator of Westpoint Realty and the Commissioner placed trust in me to carry out a trust reconciliation and ha[d] placed reliance on my knowledge and understanding of the [REBA] Act and its requirements to do so. This work was carried out by me and my assistant Lori D'Antonio without any supervision from the liquidator or the Commissioner.

84 There was a series of correspondence between one of the liquidators of Westpoint Realty and his agent (both from Ferrier Hodgson) and the respondent. By letter dated 14 December 2011 the liquidator informed the respondent that the reconciliation of Westpoint Realty's trust accounts had to be resolved by the liquidators prior to the finalisation of the liquidation; the Department of Commerce was considering the issue of a demand to the respondent for the reconciliation of the trust accounts, which totalled approximately $173,000; and that the Department required information and supporting documentation for the payment of trust moneys held by the Department. The liquidator informed the respondent that it was in everybody's interests for the respondent and his staff to complete the process and that the liquidator was prepared to pay his reasonable costs. He also asked whether Ms D'Antonio could be utilised to complete the reconciliation.

85 Subject to the settlement and payment of an outstanding account and payment of a further sum of $10,000, the respondent agreed to complete the reconciliation and provide the associated documentation. He said the work would be carried out by Lori D'Antonio who was employed by the respondent's company, Keyworld Investments Pty Ltd.

86 In a letter dated 11 April 2012 to the respondent the liquidator emphasised that his requirement was that Ms D'Antonio do the reconciliation and provide adequate supporting documentation. Subsequent communications confirm that the trust reconciliation was undertaken for which the respondent's company was paid by the liquidator.

87 The issue in the appeal is whether the primary facts are capable (as a matter of law) of supporting the inference that the liquidator and perhaps the Department of Commerce had confidence in the respondent's integrity and character, based on their reliance on the respondent to facilitate the reconciliation of the trust account.

88 It is clear from the objective evidence that there were strong, pragmatic commercial considerations driving the request to the respondent. The additional time and cost for the liquidator or other person unfamiliar with the detail of the transactions underlying the payments into the trust account was the explanation for the request. In addition, the liquidator expressly sought the involvement of Ms D'Antonio and required documentation to support the reconciliation.

89 Further, character, fitness and integrity are very broad concepts. An assessment as to the likelihood of the respondent stealing trust funds in the circumstances, against a background of misconduct of a different kind, is incapable of supporting an inference as to his general character and integrity.

90 In my view, the primary facts are incapable as a matter of law of supporting the inference drawn by the Tribunal. I would uphold ground 2.

91 I will deal with the original ground 3 for the sake of completeness. The appellant contends the Tribunal failed to take into account the respondent's 'ability' to comply with his duties and obligations under the REBA Act.

92 It is apparent from the written submissions that the appellant contends 'ability' to mean something different from the 'understanding' required for the purpose of s 27(1)(d) which the Tribunal expressly addressed in its reasons at [50] - [52].

93 In its natural and ordinary meaning 'ability' means competence from the possession of capacity (mental, intellectual, emotional), skill, financial means or other similar qualification. The respondent's ability in this sense was never under challenge in the Tribunal proceedings and was not a relevant consideration in the present context.

94 The appellant relies on the meaning of 'ability' adopted by the High Court in Hughes & Vale Pty Ltd v New South Wales (No 2) [1955] HCA 28; (1955) 93 CLR 127. The plurality (Dixon CJ, McTiernan & Webb JJ) said:

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' ... 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' (156).

95 It is contended that the respondent's ability to 'intend and execute his office' was in issue before the Tribunal. The scope of the alleged error is better understood by considering the matters the appellant claims that the Tribunal should have, but did not, consider. They are as follows. First, in the earlier SAT decision the Tribunal found that the respondent had not carried out his duties and obligations as the person bona fide in control of Westpoint Realty in that he had failed to personally manage the agency's business.

96 Second, the appellant says the Tribunal attributed the respondent's offences to a systems failure and inadequate and inappropriate systems of compliance but failed to consider whether those matters directly and adversely impacted on the respondent's ability to execute his duties and obligations under the REBA Act.

97 Third, the appellant contends the Tribunal erred in failing to find that the respondent had not established the s 81 FTA defence because the magistrate had found that he was in a position to adequately supervise the agents and did not do so. It is apparent from these examples that the appellant relies on the respondent's failure to control, manage and supervise Westpoint Realty's agents.

98 In my view the matters relied on by the appellant are outside the intended scope of the notion of 'ability', which, consistently with Hughes & Vale, has its natural and ordinary meaning. The focus is not on the acts or omissions of the agent in the management of others but on the competency or qualification based cause(s) of the agent's failure to comply with his duties and obligations.

99 In the appellant's supplementary submission addressing the Convictions Appeal, it is contended as a further aspect of the original ground 3, that the Tribunal erred in its characterisation of the respondent's offences as a failure of compliance, which error stemmed from its failure to consider the circumstances of the offending, including the magistrate's finding that the respondent deliberately gave false and misleading information to the agents. The appellant relies on the Chief Justice's summary of the magistrate's findings that the respondent was:

[T]he author and perpetrator of a scheme fraught with the risk of misrepresentation and did nothing to prevent the likely consequences of that scheme, but to the contrary, significantly increased the risk of misrepresentation being made by giving false information to the agents [76].

The mischaracterisation of the offence resulted in the Tribunal misinforming itself as to the criteria it must be satisfied of under section 27(1)(b) ... ,[being the failure] to take into account the respondent's ability to comply with his duties under the REBA Act [16]. (emphasis in original)

101 As I understand the argument, the mischaracterisation of the offences as a systems failure led to the further error of failing to accept the magistrate's findings as to the circumstances of the offending which in turn led to the further error of failing to take into account the respondent's ability to comply with his duties. This is a highly contrived and artificial attempt to squeeze a square peg (characterisation of the respondent's conduct in the majority judgment in the Convictions Appeal) into a round hole (original ground 3). I will deal with the claim of mischaracterisation of the offence in the context of the proposed amended ground 3.

102 The appellant has failed to demonstrate that the respondent's 'ability' in any sense was a live issue before the Tribunal. Moreover, putting to one side the issue of mischaracterisation, there is nothing in the material raised by the appellant to suggest that any omission was capable of altering the outcome in the Tribunal.

103 The proposed new ground 3 is unhappily drafted. On one view it may be read as a claim that an offence under s 12(2)(b) by virtue of the operation of s 81 of the FTA is a dishonesty offence.

104 A dishonesty offence is understood in the criminal law to mean one in which dishonesty is an element of the offence, such as stealing or fraud. For the reasons given earlier, a breach of s 12(2)(b) of the FTA, on its own or by virtue of s 81, is not a dishonesty offence in that narrow sense. That is, it is not an element of s 12(2)(b) that there be a knowingly false representation.

105 However, the circumstances of the offending may involve dishonest conduct as was the case with the three agents in this case who engaged in deceit. Having regard to the facts and circumstances of their offending, the offences they committed can be broadly described as dishonesty offences.

106 Indeed, for the purpose of assessing vocational fitness, character and reputation, the focus should ordinarily be widened to include the facts and circumstances of the offending (and the circumstances of the offender). That approach is consistent with Cichello v Estate Agents Licensing Authority [1998] 4 VR 477. In that case the applicant for a real estate agent's licence had been convicted of intentionally causing injury contrary to s 18 of the Crimes Act 1958 (Vic) for which the maximum penalty was 7 1/2 years' imprisonment. The applicant was fined $1,500. The only evidence in the tribunal proceedings of the circumstances of the offence was that of the applicant who portrayed it as minor. That evidence was accepted by the tribunal. The tribunal refused the applicant's licence application because he had committed what it described as 'a serious offence of violence under the Crimes Act'. The Victorian Court of Appeal held that the tribunal had made an error of law by falsely characterising the offence by reference to its legal incidents rather than by reference to the facts and circumstances of the offending.

107 The Tribunal in this case did not err by wrongly characterising the offences committed by the respondent by reference to their legal incidents or elements. Counsel for the Commissioner expressly disavowed reliance on any claim that the offences of which the respondent had been convicted were, in the technical sense, dishonesty offences. Any attempt to do so in this appeal must be resisted if only because they are not dishonesty offences in the narrow sense.

108 However, the proposed ground of appeal is clearly intended to embrace the findings made by the magistrate as to the circumstances of the respondent's offending. The primary focus of the attack in proposed ground 3 is on the Tribunal's 'characterisation' of the findings made by the magistrate as to the circumstances of the offences. In particular, the focus is on the Tribunal's characterisation of the respondent's offending conduct variously as follows:

- that the magistrate's adverse findings against the respondent did not constitute concrete findings of dishonesty[36];

- the respondent's offending did not sustain a conclusion that he had disregard for the interests of purchasers [44].

109 The claim of mischaracterisation is not a challenge to the Tribunal's findings of fact. What the magistrate found in relation to the circumstances of the respondent's offending is to be objectively determined from his reasons for decision. The respondent's convictions and the magistrate's findings in support thereof were relevant and admissible evidence of the truth of those matters: Roberts v The State of Western Australia [2005] WASCA 37; (2005) 29 WAR 445 [144] - [146]; Sudath v Health Care Complaints Commission [2012] NSWCA 171 [83] - [101].

110 The reasons for judgment in the single judge appeal and the Convictions Appeal involve an analysis of the facts found by the magistrate for the purpose of determining whether the magistrate had erred. The appellate judgments are not additional evidence in any relevant sense. It follows, that the reasons for judgment in the Convictions Appeal and the Silkchime Appeal can be taken into account in this 'appeal', notwithstanding that they were delivered after the Tribunal's decision.

111 However, I propose to make my own assessment of the magistrate's reasons and apply the test in relation to the drawing of inferences from primary facts, namely whether the Tribunal's characterisation of the circumstances of the respondent's offending is, as a matter of law, open. In my view it is not.

112 The dramatis personae include Sean Niven, a senior officer of Westpoint Realty, Bernard Worthington, a senior officer of Westpoint Realty, Daniel Hubbard, sales manager of Westpoint Realty and Halga James, in-house lawyer of the Westpoint Group. The three agents convicted of making false representations were David Lewis, Daniel Egan and Thomas Haynes. Niven, Worthington, Hubbard, Lewis and Egan gave evidence in the Magistrates Court. So too did the respondent.

113 The findings of Magistrate Malone and the objective evidence on which they are based are as follows. By 25 August 2005, the respondent, James and Worthington were aware that there was a major problem with the Stage 1A contracts because of the approval of the larger development the subject of Stage 1B (M 77).

114 On 14 October 2005 the respondent gave instructions to start selling the Stage 1B units. James pointed out that this could not be done without sorting out the Stage 1A contracts.

115 James sent a memorandum dated 17 October 2005 to Worthington, copied to the respondent, stating, inter alia:

You have instructed me that Lanepoint ... wishes to terminate every contract is [sic] has entered into for Stage 1A, and then re-sell at a higher price (M 78, M 107 - 108).

- raises GST, deed of amalgamation and re-subdivision issues;

- instructs on what documents are required to vary the Stage 1A contracts;

- advises that she is not sure Lanepoint has 'a clear basis for terminating the contracts';

- suggests giving purchasers a 'right to terminate' their contracts for the return of deposits and finance fees;

- states the view that termination is the only commercially safe way forward.

117 The magistrate found that prior to the respondent's October 2005 memorandum, he had made the only realistic commercial decision, which was to obtain the termination of the Stage 1A contracts and had so informed Messrs Niven and Hubbard before the dispatch of his October memorandum (M 110 - 111). Niven and Hubbard conveyed that decision to the three agents.

118 The respondent's October memorandum was addressed to Messrs Niven and Worthington and directed that it be given to Messrs Lewis, Egan and Haynes. I will deal with that memorandum separately.

119 By 3 November 2005 Worthington advised James of the decision to rescind the Stage 1A contracts and resell the units and requested a draft rescission letter for clients (M 105). James responded by supporting the decision and cautioning about the rescission process as follows:

Please don't forget that our right to rescind is 'shaky' at best - so of course if we can get the purchasers to agree to rescind the contract then we are in the best possible position (M 105).

120 A draft letter dated 10 November to clients was prepared. It invited discussions or contract cancellation.

121 On 11 November 2005 Messrs Lewis and Haynes were provided with cancellation agreements ahead of their prospective appointments with purchasers (M 106).

122 The false representations were made by the agents in November and December 2005. Lewis represented to Mr and Mrs Hall 'that the project ... was not going ahead. There were problems, effectively the only answer to which was for them to withdraw from their contract' (M 51).

123 Lewis represented to Ms Hutchins that 'the project was indefinitely delayed. The problems were such that again, waiting wasn't a solution ..., and the best thing was to terminate the contract' (M 52).

COMMISSIONER FOR CONSUMER PROTECTION -v- CAREY [2014] WASCA 7 (9 January 2014)

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (272 paragraphs)

COMMISSIONER FOR CONSUMER PROTECTION -v- CAREY [2014] WASCA 7 (9 January 2014)

(b) Given the height and bulk of this building [Stage 1B] it will impact negatively on the amenity of the Stage 1A apartments, particularly blocking light, views and cast[ing] shadows over Stage 1A apartments during the afternoon.

(c) On the basis of the terms and conditions of the planning approval for Stage 1B, Lanepoint can legally terminate all current purchase contracts by serving written notice under clause 6.3(a).

Legislation Cited (8)

Cases Cited (19)