Director of Consumer Affairs v Rakocevic (Occupational and Business Regulation) [2012] VCAT 1361

ORDER OF 5 SEPTEMBER 2012 CORRECTED PURSUANT TO S.119 OF THE VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL ACT 1998 ON 26 SEPTEMBER 2012

1. Pursuant to s 28(1)(b) of the Act the Tribunal determines that the respondent is not of good character and is not otherwise a fit and proper person to be an agent's representative.
2. Pursuant to s 28(1)(c) of the Act the Tribunal determines that the respondent has been guilty of conduct as an agent's representative which renders him unfit to be an agent's representative.
3. Pursuant to s 28(1)(d) of the Act the Tribunal determines that the respondent has contravened or failed to comply with the Estate Agents (Professional Conduct) Regulations 2008.
4. Pursuant to s 28A(1)(c) the Tribunal cancels the respondent's licence to be an agent's representative and disqualifies him from holding a licence for a period of 5 years from the date of this order.
5. Pursuant to s 28A(1)(f) the Tribunal declares the respondent ineligible to hold a licence or to be an agent's representative for a period of 5 years from the date of this order.

1. On 28 June 2011, the Director of Consumer Affairs Victoria (CAV) filed with the Tribunal an application for inquiry pursuant to s 28 of the Estate Agents Act 1980 (the Act) in relation to the alleged conduct of Mr Zoran Rakocevic, an agent's representative.
2. The application was heard over three days and I delivered reasons for decision on 3 August 2012. My findings against Mr Rakocevic are set out in paragraphs 208 and 214 of my reasons for decision (decision).
3. In essence, the findings were that Mr Rakocevic :
   • made false deposit receipts for the sale of four properties stating that Compton & Green Real Estate Pty Ltd (C&G) had received a deposit when it had not received a deposit;
   • made false statements in the contracts of sale in relation to six properties stating that C&G was the vendor's agent when C&G was not the vendor's agent; and
   • made false statements in three contracts of sale stating that the vendor had agreed to sell the property described in the contract when the vendor had not so agreed.
4. At the time Mr Rakocevic made the false deposit receipts and the false statements in the contracts of sale, he was employed as an agent's representative by C&G.
5. On 14 August 2012, I heard submissions from the parties in relation to s 28(1) and s 28A of the Act.

Section 28 Estate Agents Act 1980

1. Section 28 of the Estate Agents Act 1980 (the Act) states :

(1) At any time the Director may apply to the Tribunal for the holding of an inquiry to determine whether an agent's representative -

(b) is of good character or is otherwise a fit and proper person to be an agent's representative; or

(c) has been guilty of conduct as an agent's representative which renders him or her unfit to be an agent's representative; or

(d) has contravened or failed to comply with this Act or the regulations.

(1) After conducting an inquiry in respect of a person under section 25 or 28, the Tribunal, if it considers it appropriate, may, by order, do any one or more of the following -

(b) require the person to comply within, or for, a specified time with a requirement specified by the Tribunal;

(c) cancel any licence held by the person and disqualify the person either permanently or for a specified period from holding a licence;

(d) suspend any licence held by the person for a specified period not exceeding one year;

(e) impose any condition or limitation on any licence held by the person;

(f) declare any person to be ineligible to hold a licence or to be an agent's representative either permanently or temporarily;

(g) require the person to enter into an undertaking to perform, or not to perform, certain tasks to be specified in the undertaking.

(2) In addition to the powers conferred by subsection (1), if the Tribunal determines that the person has contravened or failed to comply with this Act or the regulations, it may impose a penalty not exceeding $5000 on the person and specify when the penalty must be paid.

(3) Any penalty imposed under subsection (2) must be paid to the Fund.

1. The Estate Agents (Professional Conduct) Regulations 2008 (Regulations) relevantly state:

An agent's representative must at all times act fairly and honestly and to the best of his or her knowledge and ability in the performance of his or her functions as an agent's representative.

(2) An agent's representative must not engage in conduct that is unprofessional or detrimental to the reputation or interests of the estate agency industry.

1. Ms Bannon, on behalf of CAV, made the submissions set out in paragraphs 137 to 145 of the decision both in relation to the findings I should make under s 28 of the Act and the orders I should make under s 28A.
2. On 14 August 2012, Ms Bannon made further submissions. She said that the Tribunal was permitted to consider the evidence of Mr Rakocevic's role in unlawful conduct, whether that conduct led to police charges or a finding of guilt with or without conviction. She submitted further that it was appropriate for the Tribunal to consider the fact that the findings against Mr Rakocevic all related to the use of his employer's documents, namely, false deposit receipts and contracts of sale, and that his conduct occurred whilst he was employed as an agent's representative at C&G.
3. Ms Bannon relied on a number of authorities including Ziems v The Prothonotary of the Supreme Court of New South Wales[1], Inglese v Estate Agents Board & Anor[2], Ruscitti v Business Licensing Authority[3], Robbins v Business Licensing Authority[4], Ex parte Tziniolis: Re Medical Practitioners Act[5] and Aavelaid v Dental Board of Victoria[6].
4. Ms Bannon submitted that the findings of facts set out in the decision supported a determination by the Tribunal that Mr Rakocevic was not of good character or otherwise a fit and proper person to be an agent's representative[7], and that he acted in contravention of the requirement to act fairly and honestly and to the best of his knowledge under the Estate Agents (Professional Conduct) Regulations 2008[8].
5. Ms Bannon sought orders from the Tribunal pursuant to s 28A of the Act disqualifying Mr Rakocevic permanently from holding an estate agent's licence, declaring him to be permanently ineligible to hold an estate agent's licence or to be an agent's representative and imposing a penalty on him of $5000 to be paid to the Victorian Property Fund. She did not seek an order for costs.

1. Mr Rakocevic relied on written submissions dated 14 August 2012 and oral submissions. Some of those submissions sought to challenge the findings of fact set out in the decision and I put them to one side. Other submissions related to alleged failure on the part of CAV to protect him and other consumers and flaws in the law relating to real estate in Victoria. Those submissions were not relevant to the matters before me.
2. Mr Rakocevic opposed the cancellation of his licence. He said that he was passionate about the real estate industry, that he could make a positive contribution to the industry and that he would be "deprived of oxygen" if he was not able to work as an agent.
3. He submitted that he was not a threat to anyone in the community, that he had a caring attitude towards his clients, that he was not the sort of agent concerned to make a "quick sale" and that he had hundreds of clients who were happy with the service he had provided. He said that he was always honest in the appraisals he provided to his clients, that he had knowledge in the "business area" and that he assisted clients to obtain a "good deal". He said he had made a positive attempt to improve the operation of the real estate industry in Victoria.
4. He referred to the contribution he had made to the community including performing the accordion free of charge in Australia and overseas. He said he acted free of charge as an interpreter for the Serbian and Croatian community in hospitals and in immigration matters. He said he looked after his parents and that he tried to do the best he could.
5. He relied on the character references provided by Mr Tony Skrekovski of Barry Plant, Mr John Will, Mr Edmund Hapsburg licenced Estate Agent of Internet House Sales and Dragana Ivanovic[9]. These testimonies spoke of Mr Rakocevic's significant contribution to the community, his international reputation as an accordion artist, his integrity and honesty and his excellent character.

1. The authorities make clear that if an estate agent is to be disqualified, the purpose which the Tribunal should have in mind is not the punishment of the individual but the importance of protecting the public from agents who are unfit to hold a licence, and the necessity to maintain standards in the conduct of an estate agent's business. See for example Inglese v Estate Agents Board; Robbins v Business Licensing Authority and Aavelaid v Dental Board of Victoria.
2. It is established that professional misconduct has a more direct bearing on the question of a person's fitness to practise than personal misconduct.[10] Further, the "good character" required in s 28(1)(b) of the Act must be good character for the purpose of making an order affecting the practise of an estate agent or agent's representative.[11]
3. Holmes JA said in Tziniolis[12] -

'Good character' is not a summation of acts alone, but relates rather to the quality of person. The quality is to be judged by acts and motives, that is to say, behaviour and the mental and emotional situations accompanying that behaviour. However, character cannot always be estimated by one act or one class of act. As much about a person as is known will form the evidence from which the interference of good character or not of good character is drawn.

Reformations of character and behaviour can doubtless occur but their occurrence is not the usual but the exceptional thing. One cannot assume that a change has occurred merely because some years have gone by and it is not proved that anything of a discreditable kind has occurred. If a man has exhibited serious deficiencies in his standards of conduct and his attitudes, it must require clear proof to show that some years later he has established himself as a different man.

1. In using the words of Kellam J in Robbins[14], Mr Rakocevic's behaviour goes to the very heart of matters of honesty, integrity and reliability of estate agents and agent's representatives. In particular, I refer to the findings set out in paragraph 3 above. His behaviour was not of a trivial nature but was deliberate, calculated and carried out over a number of months. His falsification of receipts in his employer's receipt book and false use of his employer's name and the vendor's name in the contracts of sale was an aggravating consideration.
2. Mr Rakocevic benefitted from his wrongdoing because in three of the transactions involving falsification of deposit receipts and contracts of sale the company of which he was sole director and shareholder, Montex Corporation Pty Ltd received amounts totalling $156,419.99.
3. Mr Rakocevic's behaviour was compounded by the fact that he exhibited an unwillingness to admit indisputable facts such as receipt by him of a financial benefit from the transactions[15]. In my view, this indicated a disregard for his duty of honesty and candour.
4. As a result, I am not satisfied he has demonstrated he is of good character or a fit and proper person to be an agent's representative. Further, I find that he has been guilty of conduct as an agent's representative which renders him unfit to be an agent's representative.
5. I also find that he has contravened or failed to comply with the Estate Agents (Professional Conduct) Regulations 2008 (regs 19 and 21). Regulation 19 requires that an agent's representative must at all times act fairly and honestly and to the best of his or her knowledge in ability in the performance of his or her functions as an agent's representative. Mr Rakocevic did not act honestly in the performance of his functions as an agent's representative at C&G because he falsified C&G's trust account receipts and contracts of sale.
6. Regulation 21 requires that an agent's representative must not engage in conduct that is unprofessional or detrimental to the reputation or interests of the estate agency industry. For reasons given earlier, Mr Rakocevic failed to comply with this regulation.
7. I have had regard to the written character references which Mr Rakocevic provided and to his own evidence of his contribution to the community. It is not clear whether the persons providing the references were aware of the allegations against him or whether the testimonials would have been different if the people giving them had been informed of the Tribunal's findings. Further, although the material was admitted in evidence, the referees were not called by Mr Rakocevic to give evidence and therefore the evidence could not be properly assessed. As a result, limited weight can be placed on this material.

1. There has been some effluxion of time since the falsification of the documents by Mr Rakocevic. However, Mr Rakocevic has exhibited serious deficiencies in his standards of behaviour and in his refusal to accept that he has been guilty of any wrongdoing and I cannot be confident he will not act in a similar manner or worse in the future. In such circumstances a penalty must be imposed which has regard to the need to protect the public and maintain standards in the conduct of agent's representatives.
2. In my view, permanent disqualification of Mr Rakocevic's licence as sought by Ms Bannon is too harsh a penalty in the circumstances of this case. It may be that he will be able at some time in the future to show that "he has established himself as a different man"[16]. However, I formed the view that his licence should be cancelled and he should be disqualified from holding a licence for a period of five years from the date of this order.
3. There is little to be gained in my opinion in imposing a fine as sought by Ms Bannon. The evidence establishes that Mr Rakocevic is in a precarious financial situation and he is highly unlikely to be able to raise the monies to pay the fine. Accordingly, I make no order under s 28A(2).

1. Pursuant to s 28(1)(b) of the Act the Tribunal finds that Mr Rakocevic is not of good character and is not otherwise a fit and proper person to be an agent's representative.
2. Pursuant to s 28(1)(c) of the Act the Tribunal finds that Mr Rakocevic has been guilty of conduct as an agent's representative which renders him unfit to be an agent's representative.
3. Pursuant to s 28(1)(d) of the Act the Tribunal finds that Mr Rakocevic has contravened or failed to comply with the Act and the Regulations.
4. Pursuant to s 28A(1)(c) of the Act the Tribunal cancels Mr Rakocevic's licence as an agent's representative and disqualifies him from holding a licence for a period of five years from the date of this order.
5. Pursuant to s 28A(1)(f) the Tribunal declares the respondent ineligible to hold a licence or to be an agent's representative for a period of 5 years from the date of this order.

[1] [1957] HCA 46,

[2] Supreme Court of Victoria (15 August 1988) unreported

[3] (1999) VCAT 1987

[4] 2000 VCAT 447

[5] (1966) 67 SR (NSW) 448 at 461

[6] [1999] VSC 255 at [290]

[7] Section 28(1)(b) Estate Agents Act 1980

[8] Section 28(1)(d)

[9] See paragraph [154] of my decision

[10] Ziems v Prothonotary of the Supreme Court of NSW [1957] HCA 46; (1957) 97 CLR 279 at 290.

[11] Aavelaid v Dental Board of Victoria