Catchwords: OCCUPATIONAL DISCIPLINE - licensed agent - failure to provide audit of trust account in required time - failure to provide receipt of trust monies received - failure to record all transaction details - consent orders - reprimand - monetary fine - training

Legislation cited: ACT Civil and Administrative Tribunal Act 2008 ss 65, 66

Agents Act 2003 ss 41, 42, 115, 127, 130

Subordinate

Legislation cited: ACT Civil and Administrative Tribunal Procedural Directions 2010 (No 1).

1. Pursuant to section 66(2)(a) of the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act), the respondent is publically reprimanded;
2. Pursuant to section 66(2)(c) of the ACAT Act, the respondent is to ensure that a director of the respondent, within three months of the date of the Tribunal's order, completes to the satisfaction of the Commissioner the following real estate industry training courses, which are to be designed for the Australian Capital Territory's legislative environment, and are not to count towards the respondent's continuing professional development requirement:
   • (a) Establish and Manage Agency Trust Accounts;
   • (b) Minimising Agency and Consumer Risk;
   • (c) Maintaining Business Records; and
   • (d) Apply Knowledge of State or Territory Legislative and Regulatory Framework to complete Agency Work.

The respondent must provide evidence of satisfactory completion of these courses to the Commissioner via email to agentcompliance@act.gov.au within 14 days of completing each course.

1. Pursuant to s 66(2)(g) of the ACAT Act and s 34(2)(c) of the Agents Act 2003, the applicant impose the following conditions on the respondent's licence :
   • (a) within 14 days of the date of this order, the Respondent must provide to the Commissioner, via email to agentcompliance@act.gov.au a copy of his updated policies and procedures for record keeping, trust accounting and the preparation and provision of annual audit statements to the Commissioner as required by the Agents Act 2003, including information in relation to his record and bookkeeping practices;
2. Pursuant to section 66(2)(h) of the ACAT Act, the respondent is required to pay to the applicant the sum of $1700 within 3 months of the date of these orders.
3. The directions hearing listed on 23 September 2019 is vacated.

1. In these proceedings the Commissioner for Fair Trading (Commissioner) sought orders for occupational discipline against the respondent, a licensed agent. I made those orders by consent on 20 September 2019, and now publish my reasons.

1. The Commissioner filed an application for disciplinary action on 16 August 2019.
2. At a first directions hearing on 16 September 2019 the parties advised they had reached an agreement and had prepared a statement of agreed facts and proposed consent orders, which they tendered at that time. However, the respondent's representative was not properly authorised in accordance with the ACT Civil and Administrative Tribunal Procedural Directions 2010 (No 1). The matter was adjourned, and I foreshadowed that once authorisation for the respondent's representative was received, I would review the proposed consent orders in chambers to ensure that the orders sought were within power and appropriate. If so satisfied I would make the orders in chambers and publish short reasons. If not satisfied, I would relist the matter to hear further from the parties.
3. On 18 September 2019 an authority to represent corporation was filed on behalf of the respondent. On 20 September 2019, I reviewed the consent orders in chambers. I was satisfied that the orders were within power and appropriate, and made those orders.

1. The respondent is and was at all relevant times a licensed agent under the Agents Act 2003 (Agents Act).
2. Pursuant to section 115 of the Agents Act, the respondent was required to give to the Commissioner a report of its audited trust accounts (audit report) for the financial year ending 2017 by 30 September 2017, and for the financial year ending 2018 by 30 September 2018. However, both of those audit reports were provided late.
3. When the audit reports were provided, it was identified that during the two years in question, the respondent had breached other requirements of the Agents Act. The respondent had failed to give receipts for trust money received to persons who gave the respondent trust money, or to keep a copy of those receipts for its own records. Further, the respondent had failed to record the material details of transactions occurring during those financial years. These failures constituted a breach of the requirements of sections 130 and 127 of the Agents Act, respectively.

The Tribunal's power to make the proposed consent orders

1. Section 41 of the Agents Act sets out the grounds for occupational discipline in relation to licensed agents. Section 42 of the Agents Act provides that an application for occupational discipline may be made to the Tribunal where the Commissioner believes on reasonable grounds that a ground for occupational discipline exists.
2. The application asserted three grounds for disciplinary action in relation to the financial years ended 2017 and 2018:
   • (a) Failing to provide and keep a copy of a receipt for trust monies.
   • (b) Failing to record material details of every transaction conducted.
   • (c) Failing to provide audit reports within the statutory timeframe for those financial years.
3. The facts as agreed clearly constitute grounds for occupational discipline. Section 65(2) of the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act) permits orders for occupational discipline to be made where the Tribunal is satisfied that grounds for occupational discipline exist.
4. Section 66 of the ACAT Act specifies the orders that may be made on an application for occupational discipline. The orders proposed by the parties are available under section 66.

1. Section 65(3) of the ACAT Act sets out the factors the Tribunal should consider when making orders for occupational discipline.
2. In making the orders, I noted that the respondent was first licensed in 2015 and apparently initially operated without incident. It had not been the subject of disciplinary proceedings previously.
3. At the directions hearing on 16 September 2019 the representative for the respondent explained that the failures in 2017 and 2018 occurred at a time of difficult circumstances, which seem unlikely to re-occur.
4. There was no suggestion that the transgressions had any impact on any other person, other than the obvious impact of not receiving a receipt as required.
5. The respondent's swift acknowledgement of fault and immediate resolution of these proceedings, combined with the requirements for training and overhaul of internal processes, give the Tribunal some confidence that the respondent will meet its recording and reporting obligations in the future.
6. I considered that it was appropriate to reprimand the respondent for its acknowledged failures over the two years in question. A reprimand expresses to the respondent, and to licensed agents generally, the Tribunal's disapproval of this conduct.
7. Given the acknowledged failures to properly document transactions when they occurred, and to provide and keep receipts, it is no surprise that there was a failure to provide the audited account reports within the required time frame. If a licensed agent's processes fail at the outset, the preparation of audit reports will be difficult, protracted and expensive.
8. Quite apart from the practical consequences of not keeping proper records, the provision of a receipt for trust monies received, and recording of the material details of every transaction conducted, are important legal obligations of every licensed agent. These essential requirements protect the public and ensure transparency and accountability in the receipt and use of any monies received.
9. Further, the annual audit of a licensed agent's accounts, and provision of those audit reports to the Commissioner, is no mere technical requirement. The failure to undertake audit and provide these reports in a timely manner places the public at risk.
10. In addition to the reprimand, the fine imposed also serves as a deterrent both to the respondent and more generally.
11. Finally, the Tribunal was satisfied that the respondent should complete the suggested training courses, which address the nature of the contraventions. The requirement to update the Commissioner on the respondent's policies and procedures for record keeping will also ensure that necessary steps and safeguards are put in place to prevent similar failures in the future.