An estate agent must not engage in conduct that is unprofessional or detrimental to the reputation or interests of the estate agency industry.

1. The applicant's particulars mix factual background with allegations. However, at the hearing, Mr Tziotis confirmed that in support of the alleged breach of regulation 13(2), reliance is placed chiefly on particulars (l) and (m).[2] If I find these particulars proved and that the regulation has been contravened, I am invited to impose penalties under s 28A of the Act.

1. The facts may be divided into events occurring before and after the auction.

1. In June 2012, Mrs Edith Cooper invited the respondent to attend her home in Hopkins Street, McKinnon to provide an appraisal. She was elderly and wanted to sell. The respondent attended and conducted an inspection. He told Mrs Cooper and her son Mr David Cooper that its selling price would be approximately $1.1 million. The respondent provided an estimate of the rental value. These facts are undisputed.

1. Mrs Edith Cooper did not give evidence. Mr David Cooper gave the following evidence.[3]
2. Mr Cooper said the respondent's rental estimate was approximately $600 to $700 a week. According to Mr Cooper, 'during these discussions, Mr Cohen appeared dejected when my mother indicated that her intentions might be to rent the property out instead. Mr Cohen then left shortly after this and I advised him I would be [in] contact'.
3. Mr Cooper rang the respondent a few days later and advised they had decided not to sell the property and it was likely to be rented instead. The respondent then expressed an interest in being the property manager. Mr Cooper did not guarantee that he would be appointed.
4. Over the next two weeks he and his mother rang the respondent 'on several occasions to discuss the possibility of him being property manager for the property. During this time Mr Cohen was never available and never returned any messages left at his office'. They also each dropped in to the respondent's office but he was always busy or out and they received no response.
5. As a result, Mrs Cooper engaged Mr Claude Mery of Buxton Bentleigh to sell the property. Mr Mery also quoted $1.1 million for the approximate market value, and $550 to $600 a week for the likely rental value. After receiving further legal and accounting advice, Mrs Cooper decided to sell the property and instructed Mr Mery to do so at an auction.
6. Shortly after the first open for inspection in about July 2012, the respondent rang Mr Cooper and 'expressed his disappointment in not getting the job and suggested that he would have got the best possible price and that by going with another real estate agent, my mother and I were making a big mistake. Mr Cooper also asked what he had done wrong, however, I just said my mother preferred Buxton Bentleigh'.
7. In this call, the respondent again expressed an interest in being property manager if the property were not sold at auction. Mr Cooper replied that 'it might be rented out if not sold at auction, however my mother and I would have to address that issue if and when that happens'. He said the respondent 'then concluded the conversation with words to the effect of: "Good luck trying to sell it"'.
8. Mr Cooper[4] described the respondent's tone in saying these words as sarcastic, 'not friendly'. He 'felt uneasy' as a result of this 'unsolicited call' from the respondent.

1. The respondent's version on various aspects of Mr Cooper's evidence above was as follows.
2. In the process of deciding whether to sell the property, Mr Cooper contacted the respondent and advised that he had been in touch with the State Revenue Office and the land tax payable on the property would be very high ($1300) when his mother moved out. 'He then advised me that renting the property would not be... the best option and they are still making decisions'. The respondent said he did not believe the land tax could be so high so he looked it up himself on the State Revenue Office website. He discussed this with Mr Cooper and an issue about title to a strip of land on the side of the property.
3. [Mr Cooper denied having had any conversation with the respondent about land tax. He says that when they were thinking of renting the property out, they could not contact the respondent. Buxtons then came down and spoke about sale or rental and his mother decided to sell it.][5]
4. The respondent says he did return calls from any messages left for him.
5. The respondent agreed he called Mr Cooper after the property was listed with Buxtons 'to find out what was the reason why he chose Buxton as his estate agent. I explained that it is important to me to "learn" from the experience, so that I would have a better chance of listing a similar property in the future with someone else. I also asked Mr Cooper if "I had done anything wrong?"' He said Mr Cooper advised him he had not done anything wrong and that his mother had just liked Mr Mery better. He said 'at no point did Mr Cooper advise me that he chose Mr Mery because he was not able to contact me'. The respondent agreed he may have indicated an interest in being the property manager in this call.[6]
6. The respondent says that although he was disappointed, he still cared about Mr Cooper's sale success and gave him information about the current market, the dangers of selling at auction in that market.[7] He says he was not 'dejected' in not getting the sale. He did not speak negatively about the Buxton agent and 'I then wished Mr Cooper "good luck with his sale" as any good agent would do'.[8] He denied saying this sarcastically.

1. The parties have different versions about what happened on auction day. The applicant called Mrs Lucia Cooper, daughter-in-law of the vendor Mrs Edith Cooper and wife of Mr David Cooper. I shall refer to her from here as Mrs Cooper.

1. Mrs Cooper's version is as follows.
2. Upon arriving at the auction, Mrs Cooper decided to remain outside and watch it unfold while her husband and other family members stayed inside. Before the auction, she observed several interested buyers during the open inspection discussing possible renovations, with some taking measurements. Mr Cooper and a neighbour (Mr Ishac) also said they observed a lot of interest from people inspecting on the day. After walking through the house, Mrs Cooper positioned herself across the road to wait for the auction. She observed about 70 people in attendance.[9]
3. The key part of Mrs Cooper's evidence, which forms the basis for the allegations, is as follows:

...I observed a man dressed in a suit, which I thought and assumed by his appearance was a real estate agent, approaching onlookers making comments and moving on from one person to the next. [He was walking up Brennan Street.][10] This man also acknowledged the agents selling the property, hence furthering my belief that he too was an estate agent. I now know this man to be Eric Cohen of Cohen Real Estate.

Before the auction began, this man approached me and told me there were several problems with the property. He claimed that it was poorly designed and that there were problems with the plumbing, in particular water seepage into the garage. He said words to the effect of:

'Are you aware there is water leaking into the garage?'

I was taken aback and upset by his comments so at my earliest opportunity, I crossed the road to put distance between him, and myself so I could attempt to understand why he would be making such unfounded comments. [I walked away from the spot.]

These comments took me by complete surprise as I did not know this man, let alone request any advice from him. This also upset me as I knew that from my experience in attending the property over many years, it had no such problems and that it was structurally sound... [At this time, I believed this man was with Buxtons, because he had been acknowledged by 'the Buxton guy'.[11] He did not introduce himself to me by name and he was not wearing a badge.[12]]

This man then continued to move around the congregation, and appeared to be discussing the property with onlookers, which included people I had earlier heard discussing the property favourably inside the house. To me it appeared he was acting as a real estate agent touting the property.[13] [The respondent 'may have turned away to talk to other people, I really don't remember'.]

1. It is not in dispute that the auction was then held and the property was passed in after only one bid (for $800,000). This was well below the reserve price. The property later sold after the auction for a price acceptable to the vendor.

27 At the hearing, Mrs Cooper confirmed she was wearing casual clothes at the auction. She further explained that she had found a spot across the road where she was standing with her back against a fence out of the wind. She was there when the respondent walked up to her and initiated conversation, saying words to the effect: 'do you know there are water problems in the garage?' She replied: 'I beg your pardon?' He repeated the statement and she did not ask him to elaborate. He walked away off down the street. She was stunned and shocked.[14]

1. Mrs Cooper denied that she had initiated conversation with the respondent or approached him. She was standing with her back to the fence across the road when the respondent said to her 'you've picked the best spot, out of the sun', or wind. She would not have moved away from this spot, which would have given her a full view of the auction, unless something had occurred (as she says it did) to make her move.[15] What occurred was the respondent approaching her to make disparaging comments. She conceded the respondent had not introduced himself as a real estate agent, nor was he wearing a badge.[16]
2. Mr Cooper said that about 10 minutes before the auction he looked out of his mother's bedroom window and saw his wife standing against the fence or tree[17] on the west side of Brennan Street, and the respondent standing by himself near the fence or tree on the west side of Brennan Street. [18]
3. The respondent put to Mrs Cooper that he did not walk along the street talking to groups of people before the auction and that instead she may have seen a Buxtons agent doing that. Mrs Cooper was adamant it was the respondent she had seen.

1. The respondent's version is as follows.[19]
2. He attended the auction because he was checking the market and land valuations for his sister who was looking to relocate to McKinnon. He was dressed in a suit because he was 'possibly' working on the day - 'I can't remember - I possibly could've opened a few rental properties after that. If I'm wearing a suit chances are I'm meeting someone or going to the office with someone'.[20]
3. He parked in Hopkins Street and walked straight from the top of the hill in Hopkins Street, to stand across the road from the auction. He did not walk along Brennan Street in front of the house that was for sale, approaching onlookers and making comments. He did not go anywhere near the fence line. He did not go inside the property.
4. The respondent was standing in position across the road by himself when Mrs Cooper walked up from his left and stood to his left. If she had been there before, he did not see her.[21] She was standing more towards the driveway, to his left, closer to the curb, 'at the mound'. She was looking in his direction. Then, according to the respondent:

Soon after, she engaged me in conversation about the weather, as it was cold, and I assumed she was one of the neighbours so I responded neighbourly, by saying 'It is cold'. At no time did I introduce myself to her, nor did she introduce herself to me by name. A short time later she asked me what I thought about the property being auctioned, and how it would go today. I said 'I think this property will probably sell to developers, as it is a corner block'. [She said: 'What do you mean'?] I also said that 'it is an old house, and you probably would build it differently these day,' when she asked me why? [She asked me the question, she wanted to know the reason why I said that.] I said '[You wouldn't mound soil against the fence.] Having soil mound against the fence can attract rising damp,' as this was visible to the naked eye from where we were standing. She even acknowledged its presence, as she looked towards the fence of the property.

Soon after, the Auctioneer, Mr C Williams walked past the fence of...[the house that was for sale], on his way inside, and acknowledged me, as we know each other well. I even called out to him 'where is the coffee truck?', as Buxton auctions usually have a coffee truck at their auctions, and it was a cold morning. At this point, the lady disappeared from sight, and immediately after was approached by one of the other neighbours in greeting of 'hello'.

After the brief exchange with this lady (Mrs L Cooper) and prior to the auction commencing, I only spoke to two groups who greeted me, which I knew as the local neighbours, the Resnik family....and the Goldschmied family.....We huddled together in a group, as it was still cold. We discussed the cold weather, and their family situation....and what the property might fetch. The conversation lasted for another 5-10 minutes before the auction began. I did not talk to anyone else, until the auction concluded and I was abruptly attacked [rather, 'accused'[22]] by Mr L Ishac.[23]

1. The respondent called Mr Goldschmied as a witness, who the respondent says was in the group he was speaking with before and after the auction. Mr Goldschmied said the only people he saw the respondent speaking to were their group standing together before the auction commenced, comprising the Resniks and the Goldschmieds.[24]
2. The respondent says that at no point in his conversation with Mrs Cooper did he mention the garage, and 'I never said any words about flooding, sewerage or a plumbing issue. None of those words were said at all. It was simply about rising damp and the fence'. He says that in his inspection of the house to appraise it he had only seen the garage for 'half a minute', and he did not see any flooding in there at all as it was full of items.
3. Mrs Cooper said the respondent's version of the conversation was 'nothing like what happened. We never spoke about the fence. You merely said to me there was water leakage or seepage problems in the garage'.
4. As to the specifics of the respondent's version of their conversation, Mrs Cooper was adamant that the respondent had mentioned nothing about the fence to the property. She could not recall if he said the property would probably sell to developers. As to the respondent's comment that it was 'an old house and you probably would build it differently these days', Mrs Cooper says this was not said in this conversation, but rather, in the later conversation with a neighbour Mr Ishac (outlined below).[25] She said he did not refer to 'having the soil mound' against the fence. She had not acknowledged the presence of the rising damp on the fence line because it was never discussed.[26]
5. The respondent denied he had attended the auction to cause mischief. He denied he had walked around acting like a real estate agent, walking past people, making negative comments about the property. He agreed that if (which he denied) he did in fact make comments to Mrs Cooper about the property being subject to flooding, such comments would have been inappropriate.[27]

Mrs Cooper's reporting of her conversation with the respondent

1. Mrs Cooper spoke about her conversation with the respondent to a neighbour who attended the auction (Mr Ishac) and to her husband.
2. Mr Cooper says[28] his wife told him later that day, that the respondent had approached her before the auction and 'made disparaging comments in relation to the property including alleged defects regarding plumbing and sewerage problems. She also advised me that she saw him speak to other people in attendance at the auction.'[29] At the hearing, Mr Cooper said his wife had told him the respondent made reference to the garage under the house, and that he was moving through the crowd approaching others as well. Mr Cooper himself did not see the respondent approach anyone at the auction.[30]
3. Mr Ishac refers[31] to Mrs Cooper having told him at the conclusion of the auction that 'a man whom she had never met before had approached her and...without invitation, he started to make false statements to her regarding the property'.[32] Mr Ishac continued:

To the best of my recollection, Mrs Cooper made statements to the effect of:

'A well-dressed man in a suit approached me just before the auction was about to start.

I believed this man to be a real estate agent due to the way that he looked and dressed.

This man proceeded to tell me that the property has a long history of flooding problems in the basement.

He also told me that the building has damage from the water and flooding issues, and asked if I was aware of these problems.

I have never seen or met this man before yet for some reason he went out of his way to tell me about so-called flooding and sewage problems on the property, even when I tried to step away from him'.[33]

1. At the hearing, Mr Ishac recalled that Mrs Cooper had reported to him in this conversation that the respondent had walked up to her before the auction and asked her if she knew there were flooding problems with the garage, that the house had design or building faults, and you could not build it that way now, that there were sewerage or drainage problems in the basement, and structural problems with the property.[34]
2. Mr Ishac also gave evidence at the hearing that Mrs Cooper told him she had seen the respondent mingling with the crowd before the auction, talking to them. She told him she had assumed the respondent was a real estate agent and she thought he was trying to put her off bidding. It was put to Mr Ishac that he did not mention in his affidavit that Mrs Cooper told him she saw the respondent 'working or touting the crowd,' nor did he mention in it that he saw the respondent doing so. Mr Ishac replied that he did not recall Mrs Cooper saying those words to him, so that was why they were not in there.
3. According to Mr Ishac, Mrs Cooper had brochures and a clipboard, and looked professional. This is inconsistent with Mrs Cooper's statement that she was casually dressed. Mr Cooper also said he did not believe his wife was carrying a clipboard.[35]
4. Mr Ishac did not tell Mrs Cooper that he too had seen the respondent moving around the crowd, and approach her, although he could not hear what was said. He also saw her 'angry walking away'.[36] Mr Ishac says the respondent was against the fence and he was in front of the respondent, on the road.
5. Describing himself as having an investigative background, Mr Ishac says he allowed Mrs Cooper to tell him what she had heard, and asked her to point out the man. She pointed out the respondent and he told her who the respondent was. Mr Ishac never said to Mrs Cooper 'that I saw what she was explaining to me had occurred'.[37] Under cross-examination, Mr Ishac said he had not mentioned in his affidavit that he had seen the respondent speak to others in the crowd before the auction, because he did not think it was relevant. He thought the relevant issue was whether the respondent had denied to him (in the conversation recounted below) that he had approached anyone.
6. The respondent put to Mrs Cooper that the version of her conversation with him as recounted to her husband and Mr Ishac seemed more exaggerated than the version in her affidavit, which did not mention 'flooding', but only 'water leaking into the garage'. In response, Mrs Cooper said the respondent had just reminded her (by this question in cross-examination) that after making that comment, the respondent had then also said in relation to the garage, that 'it floods'. She said: 'you also indicated there was flooding in the garage. Leakage and flooding were mentioned'. She explained that that was probably why she had relayed that to her husband and Mr Ishac.
7. Mrs Cooper explained at the hearing that she had written down some dot point notes of her conversation with the respondent, about a week or so after the auction, when she and her husband had complained to the applicant.[38] Although she did not have the notes with her, she recalls that she wrote these dot points: 'poorly designed', 'water problems' (which she says she paraphrased in her affidavit to 'plumbing'), and 'water leakage into the garage'.

1. Mrs Cooper observed that at the auction interest in the property 'dropped dramatically, people who had previously shown interest no longer showed same nor did they bid on the property.' After the auction, she says she 'felt aggrieved due to the fact that this man had degraded the property to onlookers and potential buyers...'.[39] She was upset and approached Mr Ishac, her mother-in-law's neighbour, who was at the auction, to explain what had occurred. Mr Ishac then identified the man she pointed out as the respondent.[40]
2. Mr Ishac asked Mrs Cooper if she would like him to speak with the respondent about it and she agreed. She was close but out of the latter's sight, so she heard Mr Ishac approach and introduce himself to the respondent. She heard Mr Ishac explain to him 'what I had told him about the degrading representations he made on the property and asked if he in fact did make such comments.'[41] She heard the respondent deny this, on numerous occasions saying words to the effect of: 'I didn't say that...That's not what I said'. Mrs Cooper's version continues[42]:

Mr Ishac continued to ask Mr Cohen about this issue, to which Mr Cohen again denied any wrongdoing.

At this point, I became extremely frustrated, stepped forward and interrupted Mr Cohen saying words to the effect of:

'Excuse me, you told me there was a water leakage problem in the garage!'

At this point Mr Cohen admitted to making such comments but claimed I was taking things out of context. Mr Cohen said words to the effect of:

'That's not what I meant, it's an old house and we wouldn't be allowed to build it like that today'.

'That's not what you were saying; you were saying it had a water leakage problem in the garage'.

All this time Mr Ishac had calmly stood by my side saying nothing.

Mr Cohen then began to get verbally aggressive towards both of us and after an ongoing discussion about the situation I then heard Mr Cohen say to Mr Ishac in an abrupt manner:

I was taken aback by this as at no time had Mr Ishac shown any aggression towards Mr Cohen, and had indeed conducted himself in a polite and courteous manner.

Mr Ishac remained calm, with his hands in his pockets, however at this point both Mr Ishac and I walked away to prevent the situation from further escalating and potentially getting out of hand.[44]

1. Mr Ishac said he went up to the respondent on Mrs Cooper's behalf and introduced himself as a close friend and neighbour of the vendor. He explained to the respondent that Mrs Cooper 'had approached me saying he had walked up to her just before the auction was to commence and made false and negative comments in relation to various water issues and flooding problems with the property'. He told the respondent that Mrs Cooper was in fact a close relative of the vendor and if he had made the comments they were inappropriate.
2. According to Mr Ishac, the respondent firmly denied he had approached anyone at the auction or discussed any water or flooding problems with anyone:

Each time I put the allegation to Mr Cohen, he replied to me in a firm and assertive manner words to the effect:

'I never spoke to anyone or any woman about this property having any water or flooding problems'.

1. Mr Ishac noticed Mrs Cooper had been listening to the exchange and says she then interjected saying: 'why did you walk up to me and tell me about a history of water flooding problems on my mother-in-law's property? There are no water problems, and it is inappropriate for you to make such false statements'.
2. Mr Ishac then continued:

I observed Mr Cohen immediately and clearly respond to Mrs Cooper with words to the effect:

'You had misunderstood what I was saying about the property...I was just mentioning what is generally known about this property'.

[Mr Ishac said the respondent said: 'I was explaining to her you wouldn't be able to build a property like that these days'.] Upon hearing this statement being repeated several times to Mrs Cooper, I asked Mr Cohen why he had denied on numerous occasions that he had approached anyone and that he had firmly told me that he had not spoken to any lady regarding water problems. [Mr Cohen said he did approach Mrs Cooper and that he had a right to do so.]

I told Mr Cohen that I now witnessed him confirm that he did in fact approach Mrs Cooper and make statements to her about the property, despite previously denying this.

Mr Cohen then enquired directly at me in a very assertive and physically aggressive manner stating words to the effect:

'Who are you and what interest do you have to question me?'

1. Mr Ishac says he replied that he believed the respondent's actions were unacceptable, following which the respondent '...took a step towards me in a direct physically aggressive and intimidating manner said "do you want to fight me?"'
2. Mr Ishac says he immediately felt threatened and, after going home to get a migraine tablet, he approached several representatives of Buxtons Bentleigh to convey the events. Half an hour later he also reported the matter to the local police and made inquiries of the Magistrates Court about seeking an intervention order.[45]

1. The respondent says Mr Ishac approached him whilst he was talking with Mr Goldschmied and immediately began to accuse him of upsetting Mrs Cooper, saying something about the property flooding.[46] He says he denied saying anything about the property flooding, whereupon Mr Goldschmied stepped in and said 'of course it floods due to the big drop from the footpath to the bottom of the garage'.
2. The respondent says Mr Ishac continued by accusing him of approaching Mrs Cooper before the auction, which he denied 'as it was Mrs Cooper who came and stood next to me, and initiated the conversation, initially about the weather and then about the property'. The respondent's version continued:

Mr Ishac went on again to allege that I had said something about 'water leaking into the garage of the property', which I denied. Now agitated, that he did not get the response that he wanted, he went on to repeat himself several times, to which Mrs L Cooper joined the conversation, and further attacked me by claiming that I had said something about 'water leakage' to her. [At the hearing, the respondent said Mrs Cooper interjected with: 'You said something about flooding'.[47]] I firmly denied the accusation, and advised them both, that she had misunderstood what was said in conversation, and that she was taking things out of context. I said that 'she misunderstood my statement about the fence and how we would not be allowed to build it like that today'.

1. According to the respondent, if Mr Ishac had asked him if he had mentioned rising damp and the fence to the property, he would have admitted saying it.[48]
2. The respondent described Mr Ishac as getting more frustrated and moving forward invading his personal space, becoming more agitated and aggressive. Repeating his accusations, Mr Ishac called him an idiot to which he replied 'and the profanity comes out...lovely.' The respondent says Mr Ishac continued to swear at him whereupon the respondent turned to him and said 'in a casual, sarcastic way': 'I don't understand...what do you want? Do you want to fight me? Is that what you want?' Mr Ishac then walked away. Mr Goldschmied witnessed the conversation and came and asked him if he was okay. The respondent then left the auction.
3. Mr Ishac denied having called the respondent an idiot or that he invaded the respondent's personal space.
4. Mr Goldschmied described the respondent as calm and Mr Ishac as aggressive during the exchange. Mr Goldschmied also said he interjected with his opinion that the property was subject to flooding, along the lines expressed by the respondent above.[49]

64 Evidence was given at the hearing about an interaction between Mr Goldschmied and Mr Ishac. Mr Goldschmied said Mr Ishac came to his house on Monday 21 October 2013 and asked if he was to be a witness for the respondent. Mr Goldschmied said he may be. He says he felt Mr Ishac was trying to intimidate him to change his story.[50] Mr Ishac confirmed he did visit and ask Mr Goldschmied if he was to be a witness for the respondent, but he was not threatening, nor did he attempt to induce him to change his evidence. He explained he visited because Mr Tziotis informed him that the respondent was suing him (Mr Ishac) in defamation. If Mr Goldschmied were to be a witness, Mr Ishac said he needed to tell his wife not to discuss anything with Mr Goldschmied.[51]

1. I do not consider any of this background is directly relevant to the issues I have to decide. However, it serves to illustrate that neither of these witnesses are truly independent.

1. It is irrelevant whether the property was in fact subject to flooding or leaking problems, or what was the state of the property's front fence. The focus is on what the respondent said about the property, not whether what he said was correct as a matter of fact. In any event, the different opinions expressed by various witnesses for both parties on this topic, are irrelevant. None are independent experts qualified to give that evidence. Mr Cooper may be a registered plumber but he is not independent.
2. To decide this case, I must make findings about what the respondent did and said at the auction.

1. None of the factual witnesses in this case could be described as completely independent. Clearly it is in the respondent's interests to deny the allegations. Mr and Mrs Cooper are related to the vendor. Mr Cooper refers in his affidavit to having lodged the complaint with Consumer Affairs Victoria (CAV), noting that 'my mother and I had hired a reputable firm to sell the property and incurred cost of approximately $8000 in having the property auctioned.'[52] The respondent suggested that this was the main motivation for the complaint. I do not accept that. The complaint has resulted in this inquiry, which is purely a regulatory matter.
2. Mr Ishac describes himself as a 'good friend' of the vendor, and a 'neighbour over 22 years'.[53] Mr Goldschmied is a friend of the respondent. It is clear from comments made in his affidavit that he does not like Mr Ishac.[54] Mr Ishac's visit to Mr Goldschmied to ask whether he would be giving evidence at the hearing, similarly displayed a lack of impartiality. Whatever might be the accepted reason for the visit, it did nothing to portray an impression of Mr Ishac as a witness with little personal stake in the outcome.
3. These witnesses' lack of independence was evident in how they gave evidence at the hearing. None of them came across in a completely detached and impersonal way.

1. In this context, I am left with the competing versions of the various witnesses. On the key issue of the conversation between Mrs Cooper and the respondent, having observed both giving their evidence at the hearing and considered the evidence as a whole, I prefer and accept Mrs Cooper's version of events.
2. Despite the fact that Mrs Cooper came across as emotional, and at times angry in her responses under cross-examination, I found her to be a reliable witness. It was understandable that she presented this way, in light of her connection with the vendor and her status as the person to whom the disparaging comments about the property were directed. Her account of events as they unfolded, and her reaction to them, was entirely believable.
3. Consistently with the fact that Mrs Cooper was upset by the conversation, I accept that she walked away, abandoning the good viewing position she had secured. Very soon after the auction was over, she approached Mr Ishac and reported to him her conversation with the respondent. This reporting at the first real opportunity after the event itself, illustrates how affected Mrs Cooper was by the conversation.
4. She and Mr Ishac then went over to the respondent. Mr Ishac (with Mrs Cooper interjecting) put the conversation to him, a fact the respondent does not deny. This confronting of the respondent also supports Mrs Cooper's version that the contents of the conversation were significant and upsetting enough to warrant taking that action. It was not just a friendly and innocuous chat, as the respondent portrayed it to be.
5. Mr Cooper's evidence that his wife reported the conversation to him that same day, also supports Mrs Cooper's version. As she explained, he was inside with his mother and other family members, so he was not as immediately accessible to her as Mr Ishac.
6. I accept Mrs Cooper's evidence that it was the respondent who approached her and started the conversation, not the other way around. I make this finding without the need to reconcile the varying accounts of exactly where Mrs Cooper was standing just before the auction. I did not find those accounts helpful in assisting me to determine exactly where she was standing.
7. Mr Ishac also said he saw the respondent approach Mrs Cooper, although he did not mention this in his affidavit because he did not think it was relevant. However, I am satisfied of this fact simply on the basis of Mrs Cooper's evidence, and on the evidence of both Mr Cooper and Mr Ishac that she reported to them (on the auction day) that the respondent had approached her.

1. As to the precise contents of the conversation, I find the respondent did volunteer to Mrs Cooper, using words to the general effect that there was water leaking or seeping into the garage, that there were water problems in the garage. This is consistent with her memory at the hearing of what she wrote in her dot point notes.
2. Although she did not mention in those notes or her affidavit that the respondent said 'flooding', she said under cross-examination that he did. She was adamant then that he 'also indicated there was flooding in the garage. Leakage and flooding were mentioned'. I accept her explanation that that was probably why she had relayed 'flooding' to Mr Ishac.
3. Indeed, that position is supported by Mr Ishac's evidence of Mrs Cooper's report to him of the contents of the conversation. He refers in his affidavit to Mrs Cooper reporting that the respondent had referred to 'flooding issues' and 'flooding problems in the basement'. In his evidence at the hearing Mr Ishac referred to Mrs Cooper reporting 'flooding problems with the garage'.
4. This is so although Mr Cooper does not refer to 'flooding' in describing his wife's report. His evidence of her report to him is more general and summarising in nature, although it does mention the garage. That may simply reflect the way he chose to summarise it.
5. Mrs Cooper was strong in her denial of the respondent's position that their conversation had simply been about rising damp and the fence, with no mention of the garage: 'We never spoke about the fence. You merely said to me there was water leakage or seepage problems in the garage'. I also accept her evidence about this.
6. Mrs Cooper's version of the conversation is also supported by the evidence of she, Mr Ishac and the respondent about what they put to the respondent when they confronted him shortly after the auction. Perhaps most relevantly, the respondent says they put to him that he had spoken of water leakage in the garage and flooding in his conversation with Mrs Cooper.
7. Based on the above analysis, and applying the standard of proof in Briginshaw v Briginshaw[55], I am reasonably and comfortably satisfied to accept Mrs Cooper's direct testimony of the substance of her conversation with the respondent just before the auction.
8. The respondent sought to make something of the fact that Mrs Cooper did not mention 'flooding' or the 'basement' in her affidavit, as Mr Ishac did in his evidence of her report to him. However, whilst the general tenor of the conversation was reported, I would not expect it to be reported and then summarised word for word with no variations whatsoever by Mr Ishac, Mr Cooper or even Mrs Cooper herself, in drafting her affidavit some eight months after the event.
9. The fact that there were slight variations in what these witnesses wrote in their affidavits tends in my view to support the fact that the witnesses were being true to their own recollections and ways of expressing themselves. I am reasonably satisfied that the gist of the conversation was as I have found.
10. In contrast, the respondent's version of the conversation and his restatement of it at the hearing, left me with the impression it had been constructed to reflect that there was a conversation about the house (a fact which might have been difficult to deny), although a much more innocuous one that that alleged.
11. The respondent presented the substance of his version of the conversation as having been initiated by Mrs Cooper. He sought to further support this presentation at the hearing, by adding to his evidence (and emphasising) that Mrs Cooper had asked him what did he mean by his statement that it would sell to developers, and why had he said the house would probably be built differently these days. I am unconvinced by this emphasis and prefer Mrs Cooper's version that his comments (her version of them) were unsolicited. This is also consistent with her walking away after the conversation and reporting it to Mr Ishac at the first available opportunity.
12. Further, the respondent recounted his version of the conversation quite precisely at the hearing more than once, which (ironically) gave the impression of it having been rehearsed.
13. I do not need to find whether the respondent mentioned the words 'plumbing', 'sewerage' problems or 'poorly designed', as these words are more summarising in nature. They do not add much to what has already been found.

1. The applicant's investigator, Mr Steers, gave evidence. Mr Steers confirmed that no other complaints had been received about the respondent's conduct at the auction. It follows that Buxtons did not make a complaint. As to whether other attendees at the auction were spoken to by the respondent, or witnessed him speaking to others, Mr Steers conceded he had not followed up other such witnesses, as his supervisor had told him not to do so.
2. I accept Mrs Cooper's evidence (in direct conflict with the respondent's evidence) that she saw the respondent walking around, approaching and talking to attendees before the auction. She was definite about this. She also reported it to Mr Ishac and her husband. Mr Ishac said he saw the respondent do so as well, although he did not mention this in his affidavit. Again, however, I am satisfied of this fact simply on the basis of Mrs Cooper's evidence.
3. Nevertheless, Mrs Cooper did not hear any of the conversations between the respondent and these other persons he approached. Neither did Mr Ishac hear them and there is no evidence about the contents of the conversations. To the extent the applicant's case relies on this, it has no evidentiary basis.
4. When asked, Mr Tziotis rightly conceded that his client's case 'assumed' the conversations would have included negative comments about the house, because of the nature of the conversation with Mrs Cooper. She said as much herself when it was put to her[56] that any comments made to her would not have influenced the auction as she was not a bidder. She replied: 'If comments were made to me they would have been made to others'.
5. Applying the Briginshaw standard, nothing can be made of these 'assumed' conversations. The auction was a public event. The respondent was entitled to attend, to approach other attendees and have conversations with them.

1. Has the respondent, an estate agent, engaged in conduct that is unprofessional or detrimental to the reputation or interests of the estate agency industry?
2. As to how the respondent conducted himself in the post-auction conversation with Mr Ishac and Mrs Cooper, there is the issue of whether he challenged Mr Ishac to a fight. I am satisfied that both men were somewhat aggressive towards each other in that conversation. Therefore, nothing flows from that.
3. The respondent sought to emphasise that he attended the auction in his personal capacity, not as an estate agent. For the purposes of this analysis, I will accept the respondent's explanation that he was simply attending to check land value in the area, on behalf of his sister. He was wearing a suit. As he said, this may well have been because he was performing other duties as an estate agent on this day. Mrs Cooper agreed that he did not introduce himself to her as an estate agent, nor was he wearing a badge.
4. Accepting all these things, and the respondent's right to attend the public event of the auction, this does not absolve him of all responsibility.
5. The respondent is and was at the relevant time the holder of an estate agent's licence.[57] He was not attending the auction simply as an interested member of the public. He was not even attending as an estate agent who had had no earlier contact with the vendor. The respondent had given an appraisal of the property and been unsuccessful in obtaining the authority to auction. Even on his own version, it was likely he expressed an interest in being property manager for the property. He had called Mr Cooper after discovering that the property was listed for auction with another agency. He engaged in all this conduct in his capacity as a licensed estate agent. These facts alone put a greater onus on the respondent to ensure that he did nothing at the auction that might detract in any way from its success. This is without needing to reconcile the various differences in versions of the respondent and Mr Cooper about their pre-auction dealings.
6. In any event, even without his prior involvement with the property, as a licensed estate agent the respondent had an obligation to do nothing to undermine the prospects of success of the auction being conducted by one of his peers.
7. In relation to the conversation with Mrs Cooper, the respondent conceded when put to him that if he had mentioned flooding to her, it would have been inappropriate. It was clearly inappropriate, as were other comments I have found he made to her in their conversation just before the auction.
8. I accept Mrs Cooper's evidence that she was waiting for the auction. Therefore, the comments were said to someone who looked like a potential bidder. Taken at face value, they might well have discouraged such a person from bidding. The fact that Mrs Cooper was not in fact a potential bidder is irrelevant. The focus is on the respondent's conduct.
9. Mr Tziotis referred to case law about the meaning of 'unprofessional conduct'. The traditional test is that the conduct would be 'reasonably regarded as disgraceful or dishonourable by...[the respondent's] professional brethren of good repute and competency'. It also captures conduct that 'fall[s] short of, to a substantial degree, the standard of professional conduct observed or approved by members of the profession of good repute and competency'.[58]
10. I accept the submission (also supported by case law) that the first limb of this test (the 'disgraceful or dishonourable conduct' limb) is not limited to conduct occurring strictly in the course of performing duties as an estate agent.[59]
11. For the reasons given in paragraphs 99 to 103 above, I find that the respondent's conduct in approaching Mrs Cooper just before the auction and making the comments he made to her about the property, would reasonably be regarded as disgraceful or dishonourable by his professional brethren of good repute and competency.
12. I also find that by this same conduct the respondent has contravened the second limb of the test for unprofessional conduct. That conduct falls short of, to a substantial degree, the standard of professional conduct observed or approved by members of the profession of good repute and competency.
13. It has been held that this second limb 'necessarily relate(s) to conduct in the course of legal practice because of the reference to "professional conduct"'.[60] For present purposes, the reference here to 'legal practice' should be taken as a reference to 'practice as an estate agent'.
14. In another case, it was observed that it is not necessary to distinguish between the notions of unprofessional conduct and professional misconduct.[61] In that context, it was also observed that there is authority in favour of extending the terminology of 'professional misconduct' to acts not occurring directly in the course of professional practice. One category of such acts was identified as 'acts sufficiently closely connected with actual practice, albeit not occurring in the course of such practice'.[62]
15. In my opinion, disparaging comments made at an auction about the property to be auctioned by another agent, where the respondent had appraised the property but been unsuccessful in obtaining the authority to auction, are sufficiently closely connected with his practice of being an estate agent. As such, this conduct is also caught by the second limb of the test for unprofessional conduct referred to above.
16. The respondent has therefore contravened the first limb of regulation 13(2) in that he has engaged in conduct that is unprofessional.
17. Further, if there is any doubt about my conclusions above, in my opinion, by virtue of his comments to Mrs Cooper, the respondent has also engaged in conduct that is 'detrimental to the reputation or interests of the estate agency industry'. There is no requirement in this wording for the respondent to have engaged in the conduct whilst directly performing his functions as an estate agent.

113 Each individual estate agent is capable of contravening this limb of regulation 13(2) by doing something that may affect the industry's reputation or interests. It is in the industry's interests for estate agents not to engage in conduct that might undermine the success of auctions. Conduct by an estate agent that might undermine that success is also detrimental to the industry's reputation.[63]

[1] The application is made under s 25 of the Act, and it seems the applicant relies on paragraph (a) of that section. The particulars are in the application for inquiry.

[2] Mr Tziotis confirmed that for this breach reliance is chiefly placed on particulars (l) and (m) of the particulars of the alleged breach of regulation 13(2) contained in the application for inquiry dated 28 May 2013. Particular (l) alleges that the vendor's daughter-in-law 'observed a man, dressed in a suit, whom she assumed was an estate agent, approaching onlookers, making comments and moving on from one person to the next. She also observed this man acknowledge the agents selling the property'. Particular (m) alleges: 'Before the auction began, this man approached her and told her that there were several problems with the property. He claimed that it was poorly designed and that there were problems with the plumbing, in particular making references to water leaking into the garage. Mrs Lucia Cooper was upset by these comments and moved away from the man'.

[6] Mr Cooper denied in Xxn that the respondent had said he wanted to 'learn from the experience' or that he had told the respondent his mother liked Mr Mery better.

[7] In contrast, Mr Cooper said the respondent, Buxtons and Ray White had all recommended an auction: Xxn.

[8] Page one respondent's affidavit, for the version outlined in the preceding paragraphs.

[9] Paras 3 to 7 her affidavit sworn 15 April 2013.

[10] Square bracketed portions are from evidence Mrs Cooper gave at hearing.

[13] From her affidavit sworn 15 April 2013, paras 8 to 12, with further evidence added at the hearing in square brackets.

[14] Xn. When asked whether the respondent had said 'in the garage' or 'into the garage', as she used both forms of wording in her affidavit, the latter being in paragraphs 20 and 22 of her affidavit, when she recounts the conversation to Mr Ishac and then later confronts the respondent about it. Mrs Cooper said that in her mind they were the same thing.

[17] In Xn he says fence, in Xxn he says tree.

[19] From his affidavit sworn 22 November 2013, and in his evidence at the hearing.

[22] The respondent corrected this wording to say 'accused' in Xxn at the hearing.

[23] These quoted paragraphs are from the respondent's affidavit, with portions he added in his evidence at the hearing in square brackets.

[24] Mr Goldschmied's affidavit sworn 22 November 2013.

[25] When she corrected the respondent in that conversation and said to him 'you said water seepage'.

[26] All this evidence about the specifics of the conversation was given in Rexn.

[32] Para 6, Mr Ishac's affidavit sworn 15 April 2013.

[38] It seems from the complaint letter, produced for the first time during the hearing, that the complainant was Mr Cooper.

[39] Mrs Cooper's affidavit, paras 13 to 15.

[40] Mrs Cooper affidavit paras 15 and 16, Mr Ishac affidavit para 13.

[43] In her Xn at the hearing she said he said: 'Do you want to have a go? Do you want to have a fight?'

[44] This version, set out in Mrs Cooper's affidavit, is consistent with her evidence given in Xn at the hearing.

[45] Xn for this statement. Mr Ishac's version as set out in the previous four paragraphs is contained in his affidavit. The square bracketed potions are added from his evidence at the hearing.

[50] Xn., generally consistent with the version he puts in a document dated 27 October 2013 attached to his affidavit sworn 22 November 2013.

[51] The respondent said he had simply sent an email to Mr Tziotis saying he may write to 'the three people who complained for a possible defamation suit if the case is found not to be valid'. Mr Ishac confirmed he did not in fact receive any letter from a solicitor for the respondent. Insofar as any of this background involves the respondent's conduct, the applicant has not sought to rely on it for the purposes of this hearing, so it is irrelevant.

[53] Paras 1, 4 and 10 of his affidavit.

[54] Mr Goldschmied describes Mr Ishac as a someone who 'always tries to get his own way, he always wants to be the boss, he is what you may call a "control freak"': para 8 his affidavit, an opinion reiterated at the hearing.

[55] [1938] HCA 34; (1938) 60 CLR 336, which case was summarised by Kaye J in Con Karakatsanis v Racing Victoria Ltd [2013] VSC 434.

[58] Cases cited in the applicant's written submissions, specifically De Pardo v Legal Practitioners Complaints Committee and Anor [2000] FCA 335; (2000) 170 ALR 709 per French and Whitlam JJ, Full Court of the Federal Court at para 41; Re A Practitioner of the Supreme Court [1927] SASA 58 at 60; Kyle v Legal Practitioners Committee [1999] WASCA 115; (1999) 21 WAR 56 per Parker J (Ipp and Steytler JJ agreeing) at 71-72. Legal Services Commissioner v Piva [2009] VCAT 1200 per Ross J (as he then was) citing NSW Bar Association v Cummins [2001] NSWCA 284; (2001) 52 NSWLR 279 at paras 120, 126 and 128.

[59] Kyle v Legal Practitioners Committee [1999] WASCA 115; (1999) 21 WAR 56 per Parker J (Ipp and Steytler JJ agreeing) at 71-72; see also De Pardo v Legal Practitioners Complaints Committee and Anor [2000] FCA 335; (2000) 170 ALR 709 per French J (as he then was) at para 41.

[60] De Pardo v Legal Practitioners Complaints Committee and Anor [2000] FCA 335; (2000) 170 ALR 709 per French J (as he then was) at para 41.

[61] NSW Bar Association v Cummins [2001] NSWCA 284; (2001) 52 NSWLR 279 per Spigelman CJ at para 50 (with whom Mason P and Handley JA agreed).

[62] Ibid para 56, for both these propositions.

[63] I reach my overall conclusions without having regard to the evidence given by Mr Steers about the warning given to the respondent as the result of an earlier complaint. However, as indicated at the hearing, that matter may be relevant to the penalty to be imposed.