DATE OF SUBMISSION OF RESPONDENT'S FURTHER MATERIAL

Director of Consumer Affairs Victoria v Aloysius (Review & Regulation) [2024] VCAT 945

1. Under s 25(1)(a) of the Estate Agents Act 1980 (Vic) ('EA Act'), Mr Thomas Aloysius has contravened or failed to comply with the EA Act or regulations made under the EA Act in relation to the conduct the subject of Grounds 2, 3, 4, 6 and 7 of the Application for the Holding of an Inquiry filed on 29 July 2022 ('Application').
2. Under s 25(1)(b) of the EA Act, Mr Aloysius is not a fit and proper person to hold a licence in relation to the conduct the subject of Grounds 1, 2, 3, 4, 6 and 7 of the Application.

1. The Tribunal has listed an administrative mention on 4 November 2024 by which date the parties must advise the Tribunal in writing (preferably jointly) as to whether, in respect of the determinations of the Tribunal on inquiry to be made under section 28A of the EA Act, the parties seek orders listing:

(a) a further in person hearing (and, if so, providing the anticipated duration and the availability of the parties for the six month period from December 2024; or

(b) the determinations to be made entirely on the basis of documents, without the appearance of the parties ('on the papers').

1. The principal registrar is directed to refer the administrative mention response(s) to Senior Member Tang, to list a further hearing or an on the papers determination and, in either case, for the filing and exchange of submissions in advance of the hearing or on the papers determination.

1. By application filed on 29 July 2022 ('Application') under section 25(1) of the Estate Agents Act 1980 (Vic) ('EA Act'), the Director of Consumer Affairs Victoria ('Director') has called for an inquiry into the conduct of Mr Thomas Aloysius, an estate agent. In her Application, the Director has identified eight grounds (or allegations) for taking action ('Grounds').
2. Under section 25 of the EA Act, the Director can seek an inquiry to determine whether an estate agent:
   • has contravened or failed to comply with the Act (or regulations made under the Act): section 25(1)(a);
   • is of good character or is otherwise a fit and proper person to hold a licence: section 25(1)(b); and/or
   • has been guilty of conduct as an estate agent which renders him or her unfit to hold a licence: section 25(1)(c).
3. On 18 December 2023, the parties filed a Statement of Agreed Facts ('Agreed Statement') by which Mr Aloysius admitted to engaging in the conduct particularised in respect of each of the grounds in the Application.
4. However, at the hearing, Mr Aloysius indicated that, while he accepts that he did not comply with certain conditions imposed on his licence for the purposes of section 25(1)(a) ('Ground 2'), he denies that:
   • the findings of guilt, relating to conduct in his capacity as an agent's representative in 2017, render him 'unfit to hold a licence' for the purposes of section 25(1)(c) ('Ground 1');
   • he 'knowingly authorised or permitted' Hills and Fort RealEstate Pty Ltd ('Hills and Fort') to contravene the EA Act between December 2020 and December 2021, as required in order for section 195 of the Australian Consumer Law and Fair Trading Act 2012 ('ACLFTA') to attribute the company's contraventions to him ('Grounds 3, 4 and 5');
   • he failed to 'act fairly, honestly ... and to the best of [his] knowledge and ability in performing the functions of an estate agent' in contravention of regulation 10(1) of the Estate Agents (Professional Conduct) Regulations 2018 ('2018 Conduct Regulations')('Ground 6') or 'engage[d] in conduct that is unprofessional or detrimental to the reputation or interests of the estate agent industry' in breach of regulation 13(2) ('Ground 7'); or
   • his conduct generally establishes that he is not of good character or otherwise not a fit and proper person to hold a licence for the purposes of section 25(1)(b) ('Ground 8').
5. The hearing was held on 16 August 2024. However, on 2 September 2024 (with leave), Mr Aloysius filed a reference from his wife and copies of reviews on the Rate My Agent website ('RMA Review') under cover of a note expressing remorse for his conduct.
6. For the reasons which follow, I am comfortably satisfied and find the conduct the subject of the following Grounds proven:

(a) Ground 2: Mr Aloysius did not comply with a condition imposed on his licence, in contravention of section 21A of the EA Act.

(b) Ground 3: Mr Aloysius, as a director of Hills and Fort knowingly authorised or permitted Hills and Fort to continue trading without a licence, in the period from 15 December 2020 to 25 August 2021, in contravention of section 12(2) of the EA Act.

(c) Ground 4: Mr Aloysius, as the Director of Hills and Fort, knowingly authorised or permitted Hills and Fort to fail to pay money into a financial institution to a trust account in the name of the agent in the period from 15 December 2020 to 25 August 2021 in contravention of s 59(1)(a) of the Act.

(d) Ground 6: Mr Aloysius failed to act fairly and honestly and to the best of his knowledge and ability in the performance of his functions as an estate agent, in contravention of regulation 10(1) of the 2018 Conduct Regulations.

(e) Ground 7: Mr Aloysius engaged in conduct that is unprofessional or detrimental to the reputation or interests of the estate agency industry, in contravention of regulation 13(2) of the 2018 Conduct Regulations.

(f) Ground 8: Mr Aloysius is not a fit and proper person to hold a licence.

1. However, I am not satisfied that Grounds 1 or 5 have been established.
2. Having found the conduct the subject of Grounds 2, 3, 4, 6, 7 and 8 proven, the Tribunal finds that:

(a) Under section 25(1)(a) of the EA Act, Mr Aloysius has contravened or failed to comply with the EA Act or regulations made under the EA Act in relation to the conduct the subject of Grounds 2, 3, 4, 6 and 7 of the Application.

(b) Under section 25(1)(b), Mr Aloysius is not a fit and proper person to hold a licence in relation to the conduct the subject of Grounds 1, 2, 3, 4, 6 and 7 of the Application.

1. I have made orders to progress the next stage of the proceeding, being the appropriate determinations to be made under section 28A.

Mr Aloysius' career in the real estate industry[1]

1. Mr Aloysius first became involved in the real estate industry in late 2009, working as an agent's representative with various estate agency businesses. This included a period, between March and June 2017, when Mr Aloysius was employed by MCRE AG Pty Ltd ('MCRE').
2. On 14 November 2019, Mr Aloysius was granted an estate agents' licence by the Business Licensing Authority ('BLA') and established Hills and Fort under a company estate agent licence. A condition of Mr Aloysius' licence was that he notify the BLA within 24 hours of any criminal action taken by the Director against him.
3. At all relevant times, Mr Aloysius has been a director of Hills and Fort. The company carried on a licensed estate agency business between 14 November 2019 and 8 December 2020, with Mr Aloysius as the officer in effective control ('OIEC').
4. On 4 March 2020, Mr Aloysius was charged with a number of offences under the EA Act and the Estate Agent (Professional Conduct) Regulations 2008 ('2008 Conduct Regulations') relating to his work with MCRE.
5. Despite the condition on his licence, Mr Aloysisus did not notify the BLA of the charge until he applied to renew his estate agent licence in November 2020.
6. On 8 December 2020, the estate agent licence of Hills and Fort was automatically cancelled under section 24A of the EA Act as a result of Mr Aloysius's failure to submit an annual statement for the company and to pay the applicable licence fee. The BLA advised Mr Aloysius of that fact by letter dated 15 October 2020. However, Hills and Fort continued to operate until 1 December 2021 without an estate agent's licence.
7. On 21 July 2021, Mr Aloysius pleaded guilty to, and was found guilty in the Magistrates' Court of Victoria of, four charges of breaching the EA Act and the 2008 Conduct Regulations relating to his work for MCRE. This included a charge of breaching section 59(6) of the EA Act[2] in May 2017 when he put a deposit of $20,000 he had received from a purchaser of real estate into his personal bank account, rather than MCRE's trust account. Mr Aloysius was convicted and fined $8,000.
8. Hills and Fort obtained a new estate agent licence on 2 December 2021. Conditions imposed on that licence included that Mr Aloysius be prohibited from operating or being a signatory to its trust account. A similar condition was imposed on Mr Aloysius' licence. The registration records show that Mr Maninder Jit Singh has always been a director of Hills and Fort and became the OIEC from the time the company was re-licensed, with Mr Aloysius listed as an 'Employee - Estate Agent'.[3]
9. In terms of events subsequent to the Application, Mr Aloysius gave evidence that:
   • in August 2022, Mr Robert Magnano took over as the OIEC of Hills and Fort; and
   • since July 2023, he has been operating as a sole trader on his personal estate agent licence and as he is not permitted to have a trust account under his estate agent licence:
     • - any funds received for rental properties managed by him go through an external app to the landlord (after deduction of his agency fee); and
     • - where he is involved in any property sales,[4] he ensures the funds go through the account of the solicitor or conveyancer involved.

Ground 1 - 'Mr Aloysius has been found guilty of conduct as an estate agent which renders him unfit to hold a licence'

1. The particulars of Ground 1 are set out in the Application as follows:
   1. On 4 March 2020, Mr Aloysius was charged with offences against the [EA] Act and the [2008 Conduct Regulations] in relation to his conduct as an agent's representative at [MCRE] in 2017.
   2. The offences occurred in his capacity as an agent's representative working for [MCRE]. Between May and June 2017, Mr Aloysius advised vendors of a property in Lynbrook that he had received an offer of $600,000.00 to purchase their property, when the offer made by the purchaser was $620,000.00. Mr Aloysius then accepted a $20,000.00 partial deposit from the purchaser into his personal bank account, instead of the required trust account. The purchaser subsequently visited the Vendor at the property and discovered that he was unaware of and had not received the $20,000.00 payment. As a consequence, a complaint was made to [Consumer Affairs Victoria ('CAV')].
   3. On 1 July 2021, Mr Aloysius accepted the summary of alleged facts and plead guilty to the following offences at the Magistrates' Court of Victoria in Dandenong:
      1. failing to pay trust money to the estate agent or trust account (s 59(6) of the [EA] Act);
      2. failing to act in the principal's best interest (r 20(1) of the [2008 Conduct Regulations]);
      3. acting for a principal when doing so causes a conflict of interest (r 20(2) of the [2008 Conduct Regulations]; and
      4. acting unprofessional[ly] and detrimental[ly] to the reputation and interests of estate agency industry (r 21(2) of the [2008 Conduct Regulations]).
   4. The Court ordered Mr Aloysius to pay a fine of $8,000.00, costs of $146.92 and recorded a conviction.
2. Ground 1 is brought under section 25(1)(c) of the EA Act, which concerns findings of guilt in respect of 'conduct as an estate agent'.
3. At the hearing before me, Mr Aloysius gave evidence to the effect that he only pleaded guilty to the charges against him because he had 'no proof otherwise'.
4. The Tribunal Book includes details of the charges laid against Mr Aloysius on 13 February 2020[5] and the Notice of Order Made by the Magistrates' Court of Victoria on 1 July 2021.[6]
5. Contrary to the agreed facts, the Notice of Order Made indicates that no plea was taken from Mr Aloysius. Further, it records that he was convicted of the charges and fined, it does not record findings of guilt.
6. Nevertheless, I accept that:
   • based on Mr Aloysius' evidence, which is corroborated by the Agreed Statement, he did plead guilty (a matter which may be relevant when it comes to considering his remorse and insight); and
   • as a conviction may only be recorded '[i]f a court finds a person guilty of an offence',[7] it follows that he was found guilty on the criminal standard of proof (i.e. beyond reasonable doubt).
7. Against that background, and in circumstances where Mr Aloysius has not presented any evidence to prove otherwise, I am comfortably satisfied that he was guilty of the conduct as found proven by the Magistrates' Court.
8. Despite that conclusion, Ground 1 cannot be made out as section 25(1)(c) only applies to 'conduct as an estate agent', not as an 'agent's representative'. At the relevant time (i.e. in May 2017), Mr Aloysius was an agent's representative, not an estate agent.

(For completeness, while section 28(1)(c) allows a similar inquiry to be held in relation to a finding of guilt concerning the conduct of an agent's representative, the Director has only made an application under section 25.)

1. Accordingly, regardless of the seriousness of the offending, I cannot make any finding that the conduct renders Mr Aloysius 'unfit to hold a licence' as an estate agent.
2. Ground 1 is not proven.

Ground 2 - 'It is alleged that Mr Aloysius did not comply with a condition imposed on his licence, in contravention of s 21A of the EA Act'

1. The particulars of Ground 2 are set out in the Application as follows:
   1. The particulars for Ground 1 are relied upon as particulars for this ground.
   2. On 14 November 2019, the BLA imposed a condition on Mr Aloysius' licence requiring him to notify the BLA within 24 hours of having criminal or civil legal action commenced against them by the Director of Consumer Affairs.
   3. On 4 March 2020, Mr Aloysius was served with a copy of the charge-sheets referred to at Ground 1 above.
   4. On 30 November 2020, Mr Aloysius filed an annual statement with the BLA in which he stated that criminal legal action had commenced against him by the Director of Consumer Affairs. This was the first time that Mr Aloysius had notified the BLA about the criminal legal action commenced by the Director of Consumer Affairs.
   5. On 2 December 2021, the BLA imposed conditions on Mr Aloysius's licence including that he is prohibited from receiving any trust money in relation to any transaction for which an estate agent's licence would be required and prohibited from operating and/or being a signatory to a trust account which would be required for the purposes of holding trust money relating to any transaction for which an estate agent's licence would be required.
   6. On 28 February 2022, Inspector Derriman sent an email to Mr Aloysius requesting names of the signatories to [Hills and Fort's] statutory trust account.
   7. On 28 February 2022, Mr Aloysius responded via email that Maninder Jit Singh was the sole signatory to [Hills and Fort's] statutory trust account.
   8. On 25 February 2022, Inspector Derriman issued a section 70D statutory notice requesting, amongst other things that National Australia Bank (NAB) provide details of the persons authorised to operate [Hills and Fort's] statutory trust account and copies of all bank statements for the period January 2018 to 25 February 2022.
   9. On 1 March 2022, NAB responded to the section 70D statutory notice advising that the signatories to [Hills and Fort's] statutory trust account are Mr Singh and Mr Aloysius.
2. Section 21A(2) of the EA Act provides that '[a] licensee must comply with the conditions or restrictions on a licence'.
3. Mr Aloysius became a licensed real estate agent on 14 November 2019 (see [11]). At the time of grant, the only condition on the license [8]as that he:8

notify the Business Licensing Authority within 24 hours of having criminal or civil legal action commenced against them by the Director of Consumer Affairs Victoria.

1. The criminal action to be notified under that condition is not limited to Mr Aloysius' conduct as an estate agent. It is clearly apt to cover action concerning his conduct when he was an agent's representative, provided that (as in this case) the criminal action was commenced after he obtained his estate agent licence.
2. While Mr Aloysius was charged on 13 February 2020 (see [22]), he admits that the first time he notified the BLA of the charges was when he filed an application for licence renewal on 30 No[9]ember 2020.9 That was, of course, many months later.
3. Having regard to the foregoing, I am comfortably satisfied that Mr Aloysius failed to comply with the condition on his licence.
4. Additional conditions were imposed on Mr Aloysius' licence from 2 December 2021, including that he was:[10]

prohibited from operating and/or being a signatory to a trust account which would be required for the purposes of holding trust money relating to any transaction for which an estate agent's licence would be required.

1. The date that the new conditions were imposed coincided with the date on which a new estate agent licence was granted to Hills and Fort (see [17]).
2. In response to a notice issued by the Director,[11] the National Australia Bank advised that both Mr Aloysius and Mr Singh were signatories to the trust account maintained by Hills and Fort.[12] While Mr Aloysius originally told the Director that Mr Singh was the 'sole signatory' to the trust account,[13] he does not dispute the accuracy of the information provided by the bank.[14]
3. Having regard to the foregoing, I am comfortably satisfied that Mr Aloysius also failed to comply with this condition.
4. For these reasons, Ground 2 has been proven.

Ground 3 - 'It is alleged that Mr Aloysius, as the Director of [Hills and Fort], has knowingly authorised or permitted [Hills and Fort] to continue trading without a licence, in contravention of s 12(2) of the Act'

1. The particulars of Ground 3 are set out in the Application as follows:
   1. On 8 December 2020, Mr Aloysius and the [Hills and Fort] estate agency licence was cancelled by operation of section 24 of the Act due to non-payment of the annual fee.
   2. On 15 December 2020, Mr Aloysius was notified by the BLA that his and the [Hills and Fort] licences were cancelled, effective from 8 December 2020.
   3. On 15 January 2021, CAV Inspector Erin Jobling notified Mr Aloysius that immediate enforcement action may be taken against [Hills and Fort] for contravention of s 12(2) of the Act, unless [Hills and Fort] lodged a new application for a company licence by no later than 5:00pm on Friday, 22 January 2021. Investigator Jobling stated that if [Hills and Fort] continued to carry on trading without a licence, CAV may take immediate enforcement action to prevent continued non-compliance.
   4. On 21 January 2021, Mr Aloysius, on behalf of [Hills and Fort], submitted an application for an estate agent's licence to CAV, together with the application fee for $972.60.
   5. On 2 February 2021, Inspector Hin Dan issued a statutory notice to [Hills and Fort] pursuant to s 70C of the Act and requested reasons for the delay in applying for a new company licence from the effective date of cancellation, being 8 December 2020, until an application was lodged with the BLA on the 21 January 2021.
   6. On 17 February 2021, Mr Aloysius responded to the statutory notice issued on the 2 February 2021 via e-mail. Mr Aloysius, in response to question 5 of the aforementioned notice stated that "I called Consumer Affairs to discuss about the situation reg[arding] the licence cancellation and i informed the business has rental properties and what needs to be done in this case. I was informed to lodge a new application hence my understanding was to apply and continue business and wait for the application process to be done."
   7. On 17 February 2021, after reviewing the response from Mr Aloysius, Investigator Jobling performed a [search of CAV's systems] to attempt to identify any record of the phone call that Mr Aloysius alleged he had made in which the BLA staff advised that [Hills and Fort] could continue to trade pending the outcome of a new company licence application. Investigator Jobling could not find any records relating to this call.
   8. On 4 March 2021, Investigator Jobling received an email from Melanie Gutsa, Project Officer at the Information and Dispute Services Centre (IDSC) at CAV. This email confirmed that the IDSC had received an inbound call from Mr Aloysius on 15 December 2020, but no details of the conversation or advice provided in this call were available.
   9. From 8 December 2020 until 1 December 2021, [Hills and Fort] has continued trading without a licence.
   10. From 2 December 2021, [Hills and Fort] was permitted to trade as an estate agent under the [new] Licence issued by the BLA.
2. Section 12(2) of the EA Act provides that it is an offence for a corporation to 'exercise or carry on ... the business of an estate agent' or 'act as an agent', 'unless it is a licensed estate agent'.
3. While the Agreed Statement includes an admission by Mr Aloysius that Hills and Fort continued to carry on business as an estate agent between 8 December 2020 and 2 December 2021,[15] as noted (see [4]), he denies that he knowingly authorised or permitted the company to do so.
4. In his evidence, Mr Aloysius explained that:
   • While he had taken steps to renew the licences in 2020, he only renewed his licence and did not realise that the licence held by Hills and Fort had not been renewed until he got the notice of cancellation (i.e. on 15 December 2020).
   • He re-applied for a licence for Hills and Fort.
   • In his 'ignorance', he believed that the company was entitled to continue operating the business until the BLA made a decision on the application.
   • Hills and Fort stopped trading, and the trust account was moved to his personal licence, once the Director issued a letter on 25 August 2021 requiring that Hills and Fort 'cease carrying on the business of an estate agent, unless or until the company is granted a Victorian estate agent's licence from the BLA' ('Cease and Desist Letter').[16]
5. In cross-examination, Mr Aloysius denied that, during a call on 16 April 2021,[17] Ms Jobling had informed him that 'the estate agency business could not be conducted by [Hills and Fort] until such time as it held a company licence'. However, he accepted that she had never explicitly told him that Hills and Fort could continue to operate. Instead, whenever he asked about the status of the licence for Hills and Fort, he says he was told to speak to the BLA, and so he formed the 'impression that the company can operate'.
6. Mr Aloysius says that, after receiving the Cease and Desist Letter, he told renters of properties he managed to pay their rent into the trust account maintained under his personal licence. Further, he says he told the Residential Tenancies Bond Authority ('RTBA') to update the bond records to record himself as the estate agent (although, despite being given leave, he failed to produce any evidence from the RTBA). He accepts that he had not told tenants that the Hills and Fort real estate business had been transferred to himself.
7. Section 195(1) of the ACLFTA provides that:

If a body corporate contravenes or commits an offence against any provision of this Act, each officer of the body corporate is deemed to have contravened the same provision if the officer knowingly authorised or permitted the contravention.

1. That provision also applies to the EA Act by virtue of the operation of section 93A(1) of the EA Act.
2. The contravention of section 12(2), which the Director seeks to attribute to Mr Aloysius, is a serious offence, which would expose him to a penalty of up to 1000 penalty units (i.e. currently $197,590) if prosecuted as a criminal matter. It is clear that, when considering whether the matter is proven, it is necessary for me to reach the state of 'actual persuasion' (or comfortable satisfaction) discussed in Briginshaw v Briginshaw,[18] alive to the caution expressed in that case about accepting 'inexact proofs' or drawing 'indirect inferences'.[19]
3. In the course of submissions, Ms Spee (solicitor for the Director) referred me to the decision in Australian Securities and Investment Commission v ActiveSuper Pty Ltd (In Liquidation) ('ActiveSuper'),[20] in which White J had occasion to consider when a person could be said to be 'knowingly concerned in a statutory contravention', observing:[21]

that person must have been an intentional participant, with knowledge of the essential elements constituting the contravention ... It is not, however, necessary that a person with knowledge of the essential elements making up the contravention also know that those elements do amount to a contravention ...An accessory does not have to have appreciated that the conduct was unlawful ...

1. Of course, the wording of that provision (i.e. 'knowingly concerned') differs to the requirement in the ACLFTA that a person has 'knowingly authorised or permitted' a contravention, with the latter possibly suggesting a higher degree of knowledge.
2. Ms Spee also referred me to the Federal Court decision in Director of Consumer Affairs Victoria v Gibson ('Gibson'),[22] where Mortimer J (as she then was) found that Ms Belle Gibson had 'knowingly authorised and permitted' her company to contravene the Australian Consumer Law (Victoria) ('ACL(Vic)') by publishing a book (and associated social media apps) containing false and misleading representations about her recovery from cancer and that proceeds from the sale of her book would be donated to charity. It appears that Ms Gibson:
   • was the sole director and shareholder of the company at all relevant times;
   • did not seek to defend the proceeding or participate in it; and
   • had confirmed that she controlled the content loaded onto the social media accounts,[23]

• the company was 'her company, and only hers', which she used 'as a vehicle to promote herself, and to promote the good and services she sought to sell';[24]
• her conduct was 'intertwined with the company she controlled and directed' (such that each also had accessorial liability for the acts of the other);[25] and
• 'under her control', the company had developed and promoted the apps and the book she had authored.[26]

1. It can be observed that the decision in Gibson is consistent with the decision in ActiveSuper to the extent there was no finding made (or presumably thought necessary) that Ms Gibson knew her conduct was in breach of the ACL(Vic).
2. However, there are a number of issues in the present case which raise issues for consideration:
   • Unlike Ms Gibson, Mr Aloysius was never the sole director of Hills and Fort. In this regard, the BLA's record suggest that Mr Singh has been a director since the company was established.[27] Further, while Mr Aloysius was the OIEC of Hills and Fort from 14 November 2019, the BLA records an 'end date' of 8 December 2020 for that role.[28] While this may be recorded in this way because the company ceased to be a licensed real estate agent from that date, in the absence of admissions by Mr Aloysius, it rather begs the question as to who was in control of the company from that time.
   • While a contravention may occur by undertaking conduct without knowledge of the illegality of that conduct, it seems to me that one of the 'essential elements constituting the contravention' would be the knowledge that Hills and Fort's licence had been cancelled. However, there is no evidence that Mr Aloysius was aware of that fact before he was informed by the BLA on 15 December 2020.
   • There is some evidence to support Mr Aloysius' contention that, as soon as he was specifically made aware that the continued operation of Hills and Fort (pending the grant of its new licence) contravened section 12(2) (i.e. when he received the Cease and Desist Letter on 25 August 2021), he made an effort to comply, such as by redirecting rent payments to his personal trust account and notifying the RTBA.
3. Ultimately, having regard to the evidence before me, I am only able to reach a state of comfortable satisfaction in relation to Ground 3 for a sub-set of the conduct set out in paragraph (i) of the particulars, namely that Mr Aloysius permitted Hills and Fort to conduct residential real estate services for an 8½ month period, between 15 December 2020 and 25 August 2021, knowing that Hills and Fort was not licensed to do so, in contravention of section 12(2) of the EA Act.
4. While I accept that Mr Aloysius subjectively believed that Hills and Fort could continue to trade while he was waiting for its licence to be determined, I consider that is relevant to consideration of the seriousness of the conduct and the consequent determinations in the next stage of this proceeding. While he was not the sole director of the company, given that he was the person who conducted the estate agency business, I am satisfied that he can be considered to have authorised or permitted Hills and Fort to engage in the conduct. Having regard to the decisions mentioned above, I do not consider that it is necessary that Mr Aloysius was aware that Hills and Fort breached the provision to have 'knowingly' authorised or permitted the conduct.

**_Ground 4 - 'It is alleged that Mr Aloysius, as the Director of [Hills and Fort], has knowingly authorised or permitted [Hills and Fort] to fail to pay money into a financial institution to a trust account in the name of the agent in contravention of s 59(1)(a) of the Act'

Ground 5 - 'It is alleged that Mr Aloysius, as the Director of [Hills and Fort], has failed to pay trust money into a separate current trust account in a financial institution, in contravention of s 59(3) of the Act'_**

1. Grounds 4 and 5 are dealt with together as they relate to trust accounting activity over the same period between late 2019 and late 2021.
2. The particulars of Ground 4 are set out in the Application as follows:
   1. The particulars for Ground 3 are relied upon as particulars for this ground.
   2. On 31 December 2020, Certified Practising Accountant, Suresh Ganeshan [address omitted], audited the trust accounts of [Hills and Fort] for the period from 25 February 2020 to 30 June 2020 (Auditor's report).
   3. The auditor's report found that Mr Aloysius had contravened s 59(1)(a) of the [EA] Act on the basis that the licence number used in the receipts does not belong to the company and that licence relating to [Hills and Fort] had been cancelled.
   4. The auditor's summary notes stated that "the client failed to renew the company licence by the due date, hence the licence was cancelled by consumer affairs Victoria. The client has applied for a new licence for the company. Once the new licence is received the system will be updated accordingly to reflect the new numbers in the receipts going forward."
   5. On 3 February 2021, Inspector Hin Dan issued a statutory notice to [Hills and Fort] and Mr Aloysius requesting Mr Aloysius to produce documents and answer questions under section 70C of the Act.
   6. On 6 February 2021, Investigator Jobling received an e-mail from Mr Aloysius. Mr Aloysius advised that his trust account documents were currently with a third-party trust accounting company and that he would provide them in due course.
   7. On 22 February 2021, Mr Aloysius provided Investigator Jobling with copies of the bank statements requested under the statutory notice. Investigator Jobling identified that all trust account transactions appeared to relate to rental files only, despite [Hills and Fort] also operating a sales arm of their business. Investigator Jobling also identified a receipt indicating that a purchaser had paid a deposit into a trust account that was not affiliated with [Hills and Fort], in the name of 'Property Platform Trust Account'.
   8. On 24 February 2021, Investigator Jobling sent Mr Aloysius an email asking him to confirm the details of the trust account that [Hills and Fort] used for sales transactions. On the same date, Investigator Jobling received a reply via email from Mr Aloysius confirming that [Hills and Fort] did not operate a sales trust account and used their franchisor's trust account for sale transactions.
   9. On 20 December 2021, Mr Aloysius provided an emailed spreadsheet to Inspector Derriman which showed that 44 sales transactions in the total sum of $2,592,033.00 was paid into the Property Platform Trust account ([account number redacted]) between the period November 2019 to September 2021.
3. The particulars of Ground 5 are as follows:
   1. The particulars for Ground 4 are relied upon as particulars for this ground.
   2. The Auditor's report also further identified that Mr Aloysius had failed to pay trust money received into a separate current trust account in a financial institution, in contravention of s 59(3) of the Act on the basis that the licence number used in the receipts did not belong to the company and that the licence relating to [Hills and Fort] had been cancelled.
4. Section 59(1)(a) of the EA Act provides that an estate agent:

who as such ... receives or holds any money on behalf of any person in respect of any transaction ... (a) shall pay that money into a financial institution ... to a trust account in the name of the agent -

1. Section 59(3) provides that all money paid into a trust account in accordance with section 59(1) 'shall be kept in a separate account in a financial institution'.
2. Mr Aloysius' evidence is that:
   • in the period from 15 December 2020 to 25 August 2021, Hills and Fort:
     • - continued to receive trust money relating to rental properties managed on behalf of third parties while that company was not a licensed real estate agent; and
     • - used the Property Platform Trust Account for any trust money received relating to property sales. He explained that Property Platform [Pty Ltd] was an entity associated with the franchisor of Freedom Property Realtors, to which he belonged. They made their trust account available to franchisees for a fee; and
   • from 25 August 2021:
     • - any trust money relating to managed rental properties was paid directly to the landlord via an app (after deduction of his fees); and
     • - any money relating to property sales was paid into the trust account of the lawyers or conveyancers involved in the sale.
3. As discussed with the parties at the hearing, a question arises whether the obligations under sections 59(1)(a) and/or 59(3) apply to a company that is not a licensed real estate agent.
4. The general definition of estate agent in section 3 is silent on this question, providing that an estate agent is 'any person ... who exercises or carries on ... the business of -

(a) selling buying exchanging letting or taking on lease or otherwise dealing with or disposing of;

...

(c) collecting rents for -

any real estate or business on behalf of any other person;

1. By contrast, section 70 of the EA Act includes a definition of estate agent for the purposes of Division 2 of Part VI of the EA Act (dealing with the monitoring of am estate agency business) which clearly includes both a licensed estate agent and 'any person ... whose estate agent's licence has expired' (as was the case for Hills and Fort). However, that definition does not apply to section 59.
2. The purpose of section 59 is obviously to ensure the protection of money entrusted by clients to estate agents. While it is possible for clients to check the register of licensed estate agents[29] to see if an agent remains licensed, the purpose of the provision is obviously promoted by interpreting estate agent broadly to include both licensed and formerly licensed estate agents.
3. For the reasons given in relation to Ground 3 (see [54]), Mr Aloysius can at least be held responsible for knowingly permitting Hills and Fort to conduct residential real estate services between 15 December 2020 and 25 August 2021 when the company was not licensed. Mr Aloysius was clearly aware of the manner in which that company dealt with trust moneys (see [61]), albeit that he may not have known the arrangements with the franchisor were in contravention of the requirements (which potentially goes to the seriousness of the contravention and the appropriate determinations). For this reason, I am comfortably satisfied that Ground 4 is established for the same period.
4. However, I am not satisfied that Ground 5 is established because the Director has failed to specify in the ground that Mr Aloysius 'knowingly authorised or permitted' Hills and Fort to fail to pay money into a separate trust account. Accordingly, there is no basis to attribute the company's contravention to Mr Aloysius.

Ground 6 - 'Mr Aloysius failed to act fairly and honestly and to the best of his knowledge and ability in the performance of his functions as an estate agent, in contravention of regulation 10(1) of [the 2018 Conduct Regulations]'

1. The particulars of Ground 6 are set out in the Application as follows:

a. The particulars for Grounds 1 - 5 above are relied upon as particulars for this ground.

b. Mr Aloysius, as a licensed estate agent and Director and Officer in Effective Control of the Company, was and should have been aware of his and the Company's obligations and non-compliance under the Act, especially having regard to his legislative obligation to have a working knowledge of the Act and its regulations and his significant industry experience, having been employed in the real estate industry since 2009.

1. Insofar as relevant, regulation 10(1) provides:

An estate agent ... must at all times act fairly, honestly, in good faith and to the best of the agent's ... knowledge and ability in performing the functions of an estate agent ...

1. To the extent that the particulars relied upon in support of the contravention relate to the conduct the subject of Ground 5, they cannot be established for the same reasons that the primary ground is not established.
2. Further, the inclusion of the conduct in Grounds 3 and 4 is problematic in that this relates to knowingly authorising or permitting Hills and Fort to engage in conduct which seems to me to be part of his function as a director or OIEC of Hills and Fort, rather than 'in performing the functions of an estate agent'.
3. However, I accept that - based on the conduct the subject of Ground 2 (to which Mr Aloysius admits) - it also follows that he has contravened regulation 10(1). In particular, he was not honest in his email of 28 February 2022 (see particular (g) of Ground 2) when he suggested that Mr Singh was the sole signatory of Hills and Fort's statutory trust account. Further, he did not act to the best of his knowledge and ability in failing to report the BLA charges to the Director for eleven months, when he was required to do so within 24 hours.
4. For these reasons, I find Ground 6 proven.

Ground 7: 'Mr Aloysius engaged in conduct that is unprofessional or detrimental to the reputation or interests of the estate agency industry, in contravention of regulation 13(2) of the [2018 Conduct Regulations]'

1. The particulars of Grounds 1 to 6 are relied upon as particulars for Ground 7.
2. Regulation 13(2) provides that '[a]n estate agent or agent's representative must not engage in conduct that is unprofessional or detrimental to the reputation or interests of the estate agency industry'.
3. In the Director's submissions, it is contended that the fact that MCRE 'moved quickly to terminate [Mr Aloysius'] employment as an agent's representative ... clearly indicates how seriously MCRE viewed that conduct' and, that 'there can be no doubt that [Mr Aloysius'] conduct was both unprofessional and detrimental to the reputation or interests of the estate agency industry'.[30]
4. I have indicated that, while the conduct underlying Ground 1 is established, the ground itself is not proven because the ground was brought under the wrong provision. However, regulation 13(2) applies to a person's conduct as an estate agent and/or as an agent's representative. Accordingly, it is apt to cover Mr Aloysius' conduct when working for MCRE.
5. There is no doubt that an agent's representative who receives deposit money from a client, and then deposits that money into their own bank account rather than their employer's trust account as required under the EA Act, is acting unprofessionally and such conduct is detrimental to the reputation and interest of the industry.
6. The Director also submits that 'the residual conduct', including Mr Aloysius' 'failure to comply with important licence conditions' and the trust account issues, 'show that [Mr Aloysius] engaged in both unprofessional conduct and conduct that was detrimental to the industry's reputation or interest'.[31]
7. Mr Aloysius admits (and I have found) he breached his licence conditions and, as such, clearly engaged in conduct that, at a minimum, can be described as 'unprofessional'.
8. However, because the trust account issues relate to Hills and Fort, rather than Mr Aloysius' own licence, I do not consider these give rise to a contravention of regulation 13(2).
9. For the above reasons, I find Ground 7 proven in relation to Mr Aloysius' conduct when working as an agent's representative with MCRE and in respect of his failure to comply with the conditions on his licence.

Ground 8: 'Mr Aloysius is not of good character or is otherwise not a fit and proper person to hold a licence'

1. The particulars of Ground 1 to 7 are relied upon as particulars for this ground.
2. The Director submits that 'as a result of the statutory non compliance with the [EA Act] and professional conduct regulations as described, there is sufficient basis for the Tribunal to determine that this ground ... is established'.[32]
3. As noted at [5], following the hearing, Mr Aloysius provided the RMA Reviews and a reference from his wife.
4. The RMA Reviews, spanning a lengthy period,[33] are quite positive. Mr Aloysius is given a rating of 5 (out 5) stars and a number of reviews indicate that he often exceeded the client's expectations. However, it is difficult to place much weight on this material because the identities of the reviewers are not known and it seems unlikely that they have any awareness of the Grounds raised by the Director for taking action against Mr Aloysius.
5. Mr and Mrs Aloysius have been married for 25 years and she offers the view that 'he is a man of high ethical standards', has 'never backed out from his duties as a real estate agent' and 'is the main contributor[ ] for us to be successful in our (myself and our children) careers'. She says that he is 'a person of Integrity and Honesty whether in his family life or his work life', 'even if [he] ended losing business' as a result.
6. While the reference from Mr Aloysius' wife is supportive, again it cannot be given much, if any, weight because it does not grapple with the admitted and/or proven failures in his conduct.
7. In a cover note with the material provided, Mr Aloysius expresses 'regret' (insofar as the MCRE conduct is concerned), suggesting that this 'led to a couple of years of depression' and a 'downfall in [his] real estate career'. He says the 'process has humbled [him]self and has taught [him] to be a better person and in turn a better real estate agent'. He 'assures' the Tribunal that none of the 'irregularities' were 'intentional', but rather arose because of a 'misconception of the system' and based on his dependence 'on people in the authority to lead [him] on [his] actions'. Apart from the court proceedings, which he says he was 'not able to cope with emotionally', he considers himself to 'be a person of high ethical standards'.
8. I accept that Mr Aloysius' cover note reflects some level of remorse, although the extent of insight is limited given he does not admit failings beyond the conduct when he was an agent's representative or otherwise seeks to attribute responsibility for his later conduct to 'people in the authority'.
9. As observed by Senior Member Dea in Acting Director of Consumer Affairs Victoria v Hoare,[34] the phrase 'fit and proper' is not defined in the EA Act, but rather 'allows for a wide range of matters to be considered', including:
   • the person's 'honesty, knowledge and ability'; and
   • whether the person 'is possessed of sufficient moral integrity and rectitude of character to permit him to be accredited to the public as a person to be trusted'.
10. Some of the conduct the subject of the Grounds in this inquiry raise concerns as to Mr Aloysius' honesty and hence his character. In particular, the conduct when he worked with MCRE, as well as the false information he provided in relation to the signatories to the Hills and Fort trust account.
11. More generally, the conduct - and his apparent reliance on others to tell him how to comply with the EA Act and regulations - reflects adversely on his knowledge of his obligations. Unfortunately, it appears that Mr Aloysius has not taken the opportunity in the intervening years to engage in further professional development to improve his understanding of his obligations.
12. Against this, the most concerning conduct (i.e. the conduct that led to the criminal charges), occurred seven years ago and at a time when Mr Aloysius was just starting out. Further, there is nothing to suggest that any of the more recent failures which have been found proven have resulted in any loss to Mr Aloysius' clients (or anyone else), and there is some (limited) evidence that clients have been more than satisfied with Mr Aloysius' work. Relevantly, Mr Aloysius has continued to act as a real estate agent, although more so in managing rental properties than selling in properties in recent times.
13. Nevertheless, in circumstances where Mr Aloysius has engaged in conduct that suggests doubt as to his moral integrity and rectitude of character, has yet to develop full insight into his failings and has not undertaken any rehabilitative steps, I am comfortably satisfied that he is not presently a fit and proper person to hold an estate agent's licence.
14. Accordingly, I find Ground 8 is proven.

[1] Except as otherwise indicated, the background regarding Mr Aloysius career in the real estate industry has been drawn from the Agreed Statement.

[2] The section provides an agent's representative must 'pay forthwith ... to a trust account specified by the agent [for whom he is acting] all money received from or on behalf of any person... in respect of any transaction in his capacity of agent's representative'.

[4] Mr Aloysius' evidence is that there have not been many property sales since July 2023, and none in the last 8-9 months.

[7] Sentencing Act 1991 (Vic), s 7(1).

[9] Agreed Statement [20]. See also, copy of that information (TB, 428) and email from Ms Liz Rorke to Mr Jay Derriman dated 6 April 2022 confirming that was the first notification (TB, 441).

[13] Email from Mr Aloysius to Mr Jay Derriman dated 28 February 2022: TB, 371.

[17] Referenced in the Cease and Desist Letter.

[18] [1938] HCA 34.

[19] See, for example, Director of Consumer Affairs Victoria v Bill Kaye & Co Pty Ltd [2017] VCAT 942 [55].

[20] [2015] 235 FCR 181; [2015] FCA 342.

[22] [2017] FCA 240.

[29] See https://www.consumer.vic.gov.au/licensing-and-registration/estate-agents/public-register.

[30] Outline of submissions on behalf of the applicant dated 30 July 2024 [49].

[33] The reviews vary from 'over 1 year ago' to 'over 6 years ago'.

[34] [2015] VCAT 401 [46].