Director of Consumer Affairs Victoria v Hoban (Amended) (Review and Regulation) [2016] VCAT 1322

1. Under section 28A(1)(a) of the Estate Agents Act 1980 (Vic) (the Act), the respondent is reprimanded.
2. Under section 28A(1)(c) of the Act, the respondent's estate agent's licence is cancelled effective from 4 September 2016 and the respondent is disqualified from holding an estate agent's licence for a period of three years.

1. This proceeding concerns Mr Michael Hoban's conduct as an estate agent and has been brought under the Estate Agents Act 1980 (Vic) (the Act).
2. Mr Hoban has held an estate agent's licence in his own name since March 2007. From May 2007, Mr Hoban was the sole director and officer in effective control of Hoban Real Estate Pty Ltd (the company).
3. The Director of Consumer Affairs Victoria (CAV) alleged that Mr Hoban is not fit to hold an estate agent's licence because of his conduct as officer in effective control of the company. CAV relied on alleged breaches of the Act and the Estate Agents (Professional Conduct) Regulations 2008 (Vic) (Conduct Regulations).[2]
4. On 14 April 2016, following a hearing, I made findings about Mr Hoban's conduct. I will come to the detail of those findings shortly but, in summary, I found that Mr Hoban:
   • Knowingly authorised the company to cause the company trust account to be in a recurring state of deficiency of between $45,676.37 and $111,149.40 from June 2013 until April 2014, without having a sufficient and satisfactory explanation for causing the deficiency;
   • Knowingly authorised, or permitted, the company to, fail to properly complete the reconciliation of its trust account between June 2013 to April 2014;
   • Knowingly authorised the company to fail to comply with its trust account audit obligations between 30 June 2012 and 30 June 2014; and
   • On two occasions, knowingly authorised the company to obtain commission without holding a signed written engagement or appointment from the vendors.
5. The detailed findings I made are contained in Attachment A to these Reasons.
6. After making the findings, I adjourned the hearing to allow the parties time to consider what action, if any, should be taken in relation to Mr Hoban's licence. There was a further hearing on 14 June 2016 and I reserved my decision.
7. I have decided to reprimand Mr Hoban for his conduct and to cancel his estate agent's licence. I have also decided that Mr Hoban shall be disqualified from holding an estate agent's licence for a period of three years.

The allegations and statement of agreed facts

1. CAV alleged that, because he had authorised or permitted a range of breaches of the Act and the Estate Agents (General, Accounts and Audit Regulations) 2008 (Vic) (Accounts and Audit Regulations) by the company, Mr Hoban had personally:
   • Contravened or failed to comply with the Act and the Conduct Regulations;
   • Was not a fit and proper person to hold an estate agent's licence; and
   • Had been guilty of conduct as an estate agent which rendered him unfit to hold an estate agent's licence.
2. The parties signed a detailed statement of agreed facts which set out each of the alleged breaches by the company and by Mr Hoban personally. On 14 April 2016, Mr Hoban confirmed to me that he had reviewed the document and understood its content. The statement of agreed facts included his agreement that he had acted in a manner which meant he had breached the Act and the Conduct Regulations.
3. Before turning to the findings made, I will describe the relevant parts of the Act and regulatory regime.

1. A key objective of the Act is to ensure that the highest standards are observed in the real estate industry.[3] It has often been stated that the purchase and sale of a home is the most significant financial transaction that will be made by many members of the Victorian community. It is imperative that vendors are well informed about the terms on which an estate agent is to be engaged, the work which is to be completed and the sum the estate agent will earn for his or her work via a commission payment.
2. The amounts of money involved in property transactions can be very large. Estate agents act for vendors in these transactions and that includes holding deposit funds on behalf of the vendor. Landlords rely on estate agents to manage their investment properties. That management includes not only ensuring the asset is protected but also collecting and disbursing rent. An estate agent's daily work involves handling their client's money.
3. As a consequence, the estate agent's industry is highly regulated, particularly in respect of the handling of client's funds and the proper maintenance and use of trust accounts. The provisions of the Act which have arisen in this case, reflect Parliament's intention that estate agents will meet high standards so that the public can trust them to handle these significant transactions and large amounts of funds. The trust account provisions and provisions directed at ensuring that estate agency businesses are properly managed are at the heart of the regulatory regime reflected in the Act.
4. Compliance with provisions of this kind is not a matter of technicalities and behind the scenes paper work and book keeping. A failure to properly inform and contract with a vendor about the sale process and the claimed commission runs the risk that the vendor might be uncertain about their liability to pay commission and also that excessive amounts might be deducted from the proceeds of sale. The proper maintenance and auditing of trust accounts ensures that the client's money is held and distributed in the client's interests only and not for any other purpose. The best means to ensure the many obligations of estate agents can be met and can readily be shown to have been met is by setting up appropriate systems of work and management. CAV, as the regulator cannot undertake its responsibilities unless there are, amongst other things, appropriate records about how an estate agent has dealt with his or her client's money.
5. The provisions in issue in this case are as follows:
   • Section 29B(2)(e) of the Act which requires an officer in effective control to establish procedures designed to ensure that the business is conducted in accordance with the law and good estate agency practice;
   • Section 49A(1) of the Act which states that an estate agent must not obtain, or seek to obtain, any payment from a person in respect of work done by, or on behalf of, the agent or in respect of any outgoings incurred by the agent unless certain requirements are met, including that the agent holds a written engagement or appointment that is signed by the person (or the person's representative);
   • Section 63(1) of the Act which requires an estate agent to keep full and accurate accounting records so as to show the true position of all moneys received and required to be dealt with in accordance with section 59 of the Act and any disbursements or disposal of, or dealing with, those moneys. The records must be kept in a manner that discloses at any time the entitlement to those moneys, shows particulars of every transaction to which the accounting records relate, specifies the day on which, or the period during which, every such transaction took place and enables the accounts of those moneys to be conveniently and properly audited in accordance with the Act;
   • Section 63(1) also requires an agent to enter details of all money received, disbursed, disposed of or dealt with by the end of the next business day and correctly balance the accounts at the end of each month;
   • Section 64(1) of the Act which requires estate agent's trust accounts to be audited within three months after 30 June each year;
   • Section 90(1) of the Act which requires an estate agent to provide a sufficient and satisfactory explanation of any trust account deficiency or otherwise be guilty of an indictable offence;
   • Regulation 11 of the Conduct Regulations which states, relevantly, that an estate agent must at all times act to the best of the agent's knowledge and ability in the performance of the agent's functions as an estate agent; and
   • Regulation 13 of the Conduct Regulations which provides that an estate agent must exercise all due skill, care and diligence in performing the agent's functions as an estate agent and that an estate agent must not engage in conduct that is unprofessional or detrimental to the reputation or interests of the estate agency industry.
6. Section 25 of the Act empowers the Tribunal to make a range of determinations.
7. The Tribunal may determine under section 25(1)(a) that an estate agent has contravened or failed to comply with specific provisions of the Act and/or the regulations.
8. Under section 25(1)(b), the Tribunal may determine that an estate agent is not of good character or otherwise a fit and proper person to hold an estate agent's licence. CAV did not allege that Mr Hoban was not of good character, but rather contended that his conduct was such that he was not fit to hold a licence. The term 'fit and proper person' is not defined in the Act but its meaning has been the subject of much judicial comment in a range of circumstances. It does not carry defined criteria but allows for a wide range of matters to be considered. It includes whether a person has the necessary knowledge and ability to undertake the functions of an estate agent and, where applicable, the functions of an officer in effective control.[4]
9. The Tribunal may determine under section 25(1)(c) that an estate agent has been guilty of conduct which renders him or her unfit to be a licensed agent. That calls for an assessment of the conduct in issue. While there is likely to be some commonality with the matters in issue in respect of being a fit and proper person to be licenced, attention must be focussed on the conduct. The question is whether, separate from the agent's character and fitness to hold a licence, the conduct of the agent was such that he or she is not fit to hold a licence.
10. I will next turn to Mr Hoban's circumstances and evidence.

1. Mr Hoban gave evidence before me as summarised below.
2. Mr Hoban explained that, when he commenced running the company and estate agency business, he had had no prior experience of that work. Initially, he worked as an employee of the previous business owner. After about three months he obtained his estate agent's licence and took over management of the office. Mr Hoban said, very frankly, that he had no experience managing an office or knowledge of the estate agency business at that time.
3. Until 2011, he and his staff made the basic financial records and then sent them to the auditor/accountant. Consistent with the then applicable provisions of the Act, the auditor prepared the audit report and submitted it to CAV. After 2011, estate agents were required to submit audit reports to CAV themselves. Mr Hoban, again very frankly, conceded that he did not inform himself about the new requirements and so failed to submit various records, including the required annual audit reports.
4. In around mid-2012, Mr Hoban's father was diagnosed with cancer. Mr Hoban took on primary responsibility for assisting his parents to travel from Cobram to Melbourne for his father's medical appointments and treatment. That led to Mr Hoban having little time, not only for his own family, but also the estate agency. He said he only spent around one to two days per week at the office. He left the running of the office to his staff. Mr Hoban said that the situation was very difficult - he would be sitting with his father and trying to make business decisions over the telephone. He stated he spent about 90% of his time over 10 to 12 months at the Peter Maccallum Hospital in Melbourne.
5. Mr Hoban said that it was not the fault of his staff that the financial records were not properly kept and maintained as they did not have the required knowledge or experience. He explained that he had purchased an accounting software package and then just signed what he was asked to sign by his staff. While Mr Hoban said it was his fault that the records were not properly kept, he also seemed to lay blame at the feet of the previous business owner, saying that proper training had not been provided.
6. Mr Hoban also explained that the businesses financial problems arose from thefts. He found a staff member had been stealing funds from the business. Thieves broke into the agency's business premises and stole $13,000 in cash. Later, he purchased a rent roll from another agent and found that another property manager had been stealing funds. Mr Hoban said he replaced all stolen funds, including those stolen during the break in after his insurance claim was refused.
7. Mr Hoban considered his reputation to be very good. He said he was well regarded in the community and was proud that, through purchasing the business, he had been able to provide employment to six staff who would otherwise have had great difficulty obtaining work because of the economic circumstances in and around Cobram at the time.
8. Mr Hoban stated that he had received no complaints about any matters relating to the business. Mr Hoban said, and CAV agreed, that no calls had been made on the Victorian Property Fund in respect of any irregularities.
9. Mr Hoban emphasised that at all times he had co-operated with CAV and its investigators and provided them with all information and records they requested.
10. In summary, he contended that he had a bad 12 months and that he had made some wrong decisions but that did not mean he was not fit to hold an estate agent's licence.
11. Mr Hoban was asked to explain entries in the accounts. In particular, he was asked to comment on the following entry dated 30 July 2013:

1. The above entry appeared in subsequent trust account reconciliation statements with the sum shown increasing to $63,104.65 as at 30 October 2013 and to $111,149.40 as at 30 December 2013. The sum reduced to $98,353.65 for the period 29 January 2014 to 30 April 2014. Mr Hoban was unable to provide an explanation or describe what was meant by the comment 'See Mick for explanation'. Although Mr Hoban agreed that he had used trust funds to keep the business going and stated he had replaced all funds over time, he was nevertheless unable to say what explanation he would have provided if asked about the various entries.
2. As to the failure to have vendors sign agreements prior to obtaining commission payments, Mr Hoban explained that the sales happened in a hurry and there was no time or that he had failed to obtain an authority due to an 'oversight'. He said words to the effect that, things were different in the country, that it operates on 'old mate stuff' and that there is a blasé attitude towards proper processes.
3. Mr Hoban's attention was drawn to the fact that settlement of the sales did not happen for some time after the sale contracts were signed and so there would have been time to attend to signing an appropriate sale agreement. Mr Hoban could not comment or offer an explanation for his failure to attend to that. Mr Hoban told me that, soon before the hearing he had sold another property in the same way - that is in a rush without having obtained a proper written authority.

1. On 14 April 2016, I made the following findings of fact:
   • The vendor of the estate agency business was not responsible for Mr Hoban and his staff's lack of training - once he purchased the business and obtained his licence, it was his responsibility to ensure that the company was capable of complying with its legal obligations;
   • It was of concern that Mr Hoban simply signed what was presented to him given that he represented the company and was in so doing authorising financial records which were inadequate;
   • The materials presented by CAV showed that the business's files were incomplete with contracts, statements made under section 32 of the Sale of Land Act 1962 (Vic) and various ledgers absent. The material did not make it clear whether those documents were missing or were never held;
   • I acknowledged Mr Hoban's efforts to employ people in the surrounding area and the way he had dealt with his heavy family responsibilities;
   • Despite being largely unavailable for around 12 months Mr Hoban made no alternative arrangements for the proper management of the business, such as engaging a manager or closing the office temporarily. While I did not criticise him for the care he showed to his parents and his father in particular, that could not excuse the shortcomings in the operation and management of the business during the 12 month period;
   • Of most concern was the fact that the financial and others records did not allow anyone to know:
     • what the trust account balance should have been at relevant times taking into account the transactions which had been made;
     • for whose benefit the trust account funds were being held; and
     • where the trust account funds had gone.

These three questions must be capable of being answered because the trust account holds other people's money;

• I accepted that Mr Hoban cooperated with CAV and that the CAV inspectors undertook their enquiries as best they could on the available information. However, if CAV was still unable to answer the three questions set out above after he and his staff had co-operated, that confirmed that proper records were simply not held. It was concerning that, at the time of the hearing, Mr Hoban was still unable to answer those questions;
• On the material before me, Mr Hoban did not or was unable to appreciate or understand the responsibility that comes with being a licenced estate agent;
• Mr Hoban's conduct in selling properties without having first entered into proper written engagement, was troubling. In doing so he had deprived those clients of information they were entitled to in order to ensure that their rights were protected;
• While pleased to hear that no calls had been made on the Victorian Property Fund or otherwise and that that Mr Hoban considered he was regarded as having a good reputation, that was not the end of the matter. It was necessary for me to objectively assess whether the conduct was unprofessional from the stand point of an agent who is informed and of good repute and competence;
• The state of the financial records and particularly the 'See Mick' entries, led to grave concerns. Mr Hoban's conduct had meant that CAV could not make sense of the financial records in a way which allowed it to know what funds the trust account ought to have held, who was entitled to the benefit of those funds and how they were dispersed. That meant that the regulatory regime could not operate as it should;
• While Mr Hoban may not have acted wilfully in respect of these matters, he had displayed a reckless disregard of his obligations to know and comply with the law in respect of the maintenance of proper trust accounts;
• Given some of the allegations related to events which pre-dated his father's illness, they could not be explained by him being otherwise occupied with those family concerns; and
• Nothing Mr Hoban said at the hearing demonstrated that he then understood the nature of his responsibilities and obligations to comply with the law and act professionally.

Determinations under section 25 of the Act

1. CAV's application to the Tribunal was made under section 25 of the Act and it asked me to make certain determinations having regard to the agreed statement and the agreed breaches of provisions of the Act and the Conduct and Accounts and Audit Regulations.
2. The detailed findings I made are set out in Attachment A to these Reasons. As stated earlier, in summary, the parties agreed, and I found, that Mr Hoban had:
   • Knowingly authorised the company to cause the company trust account to be in a recurring state of deficiency of between $45,676.37 and $111,149.40 from June 2013 until April 2014, without having a sufficient and satisfactory explanation for causing the deficiency (breach of section 90(1));
   • Knowingly authorised, or permitted, the company to fail to properly complete the reconciliation of its trust account between June 2013 to April 2014 (breach of section 63);
   • Knowingly authorised the company to fail to comply with its trust account audit obligations between 30 June 2012 and 30 June 2014 (breach of section 64); and
   • On two occasions, knowingly authorised the company to obtain commission without holding a signed written engagement or appointment from the vendors (breach of section 49A).
3. On the basis of these agreed findings, I made determinations under section 25(1) of the Act.
4. I was not asked to and did not make any adverse finding against Mr Hoban in respect of his character.
5. Having regard to Mr Hoban's:
   • Demonstrated failings in respect of the proper management of the estate agency business, including his failure to inform himself and his staff as to the state of the trust account and as to the requirements of the Act,
   • Failure to equip himself and his staff with the skills and resources to comply with the various requirements of the Act and the Account and Audit Regulations, including the audit requirements of section 64 of the Act;
   • His failure to ensure that he was satisfied accounts he signed were correct; and
   • His repeated failure to obtain vendors' written authority to sell their properties and charge commission,

I determined that Mr Hoban, as officer in effective control,

• Had failed to establish procedures designed to ensure that the business is conducted in accordance with the law and good estate agency practice (section 29B(2)(e));
• Had failed to act to the best of his knowledge and ability in the performance of the functions as an estate agent and had failed to exercise all due skill, care and diligence in performing the agent's functions as an estate agent (regulations 11 and 13 of the Conduct Regulations);
• Had engaged in conduct that was unprofessional or detrimental to the reputation or interests of the estate agency industry (regulation 13 of the Conduct Regulations);
• Was not a fit person to hold an estate agent's licence in the sense that he did not have the necessary knowledge and ability to undertake the functions of an agent and particularly those of an officer in effective control (section 25(1)(b) of the Act); and
• Had been guilty of conduct as an estate agent which rendered him unfit to hold a licence (section 25(1)(c) of the Act).

1. As described earlier, the hearing was adjourned to allow Mr Hoban time to reflect on the findings which had been made and so he could seek legal or other advice before I considered what determinations should be made.
2. Section 28A of the Act empowers the Tribunal to make a range of orders after completing an inquiry. They include an order reprimanding the person, requiring the person to comply with a requirement specified by the Tribunal and/or cancelling any cancel any licence held by the person and disqualifying the person either permanently or for a specified period from holding a licence.

1. CAV asked me to make the following orders under section 28A of the Act:
   1. Mr Hoban be reprimanded;
   2. Mr Hoban be required to repay two improperly obtained amounts of commission totalling $12,375; and
   3. Mr Hoban's estate agent licence be cancelled effective two weeks from the date of the Tribunal's orders and he be disqualified from holding an estate agent's licence for a period of 10 years.
2. In support of these proposed orders, CAV made submissions discussing the role of the regulatory regime and the policy considerations which underpin that regime, the way in which punitive considerations may arise in these matters, the need for specific and general deterrence and a range of previous decisions of the Tribunal. It is sufficient to note here that CAV contended that Mr Hoban had displayed no insight into the seriousness of his conduct, had shown no remorse and had failed to take personal responsibility for the many breaches of the Act and regulations.
3. CAV stated that it would not oppose a month's delay in a cancellation order taking effect to allow Mr Hoban time to make the necessary arrangements.

1. At the further hearing on 14 June 2016, Mr Hoban made submissions about the orders CAV had sought. I note that he had been aware since the April hearing that CAV would be seeking cancellation of his estate agent's licence and for the imposition of a lengthy period of time before he could re-apply.
2. Mr Hoban reiterated many of the background matters set out above. He was still unable to provide any explanation for the trust account entries. He repeated the fact that no claims had been made against him and no one had said they had lost funds.
3. Mr Hoban expressed concern at having been found not to be a fit and proper person to hold a licence. He described how he has assisted vulnerable people to deal with their properties. He stated he always put the person first and confirmed he had never had a complaint made against him.
4. He denied having no remorse for what had occurred. He stated that no funds had gone into his pocket. He referred to the fact that CAV had all of his personal bank records and had not shown that he had benefitted from any transactions. Mr Hoban said he had inherited problems with the trust accounts, had tried to identify what had gone wrong and rectify the shortfall with the assistance of his staff. He said he still could not identify the source of the deficiencies. Mr Hoban agreed with CAV's submissions that the trust account was a 'no go zone' because it contained other people's money.
5. Mr Hoban confirmed that the two property sales which raised issues relating to commission and written authority happened very quickly. Mr Hoban stated he understood that the written authority was required in order to protect both parties. He confirmed that he had only charged the amount of commission he had quoted and which had been verbally agreed with the vendors. He noted that the commission had been paid to the company not him personally.
6. Mr Hoban did not believe that his estate agent's licence should be suspended or cancelled. He stated that he had worked for more than 12 years without issue and had only made a couple of errors and misjudgements. He submitted that it would be unfair to take his licence due to what had happened over a short period of time when he was facing family problems. Mr Hoban contended that suspending or cancelling his licence would not help anyone and would mean he could not earn an income to support his family. He asked that a fine be imposed instead.
7. Mr Hoban stated that his role in the industry would be all over even if he was unable to work for 12 months. He explained he has a wife, daughter and granddaughter to support. Mr Hoban also has a son but it was not clear to me whether he lives at home or independently. Mr Hoban expressed concern about his capacity to obtain alternative employment in a country town at his age and explained he needed to work for another 20 years. As I understood it, Mr Hoban has limited assets and no investment properties or other assets he can sell. He asked that, if his licence was to be cancelled he be given the maximum time possible to prepare, suggesting at least four weeks.
8. Mr Hoban informed me that he is working for another licensed estate agent and wishes to continue to do so. He stated that he has no involvement in financial records or the trust account and will not in the future. While he said that the officer in effective control of that business was aware in general terms of these proceedings, it became apparent that Mr Hoban had not told that officer any details or explained the nature of the findings which had been made.
9. Mr Hoban's position was that he was good at selling real estate and ought to be able to continue to do so. He intended to have no involvement in the business side of an estate agency and so the trust account and other issues could not arise again.

1. The Tribunal's powers to make disciplinary orders are primarily protective, even though they may have a punitive effect on the particular agent. When considering whether a person should continue to work as a licensed estate agent, there are two matters raised which focus on the public interest: the protection of the public and the necessity of maintaining standards in the conduct of the profession. A very high standard of care, compliance and honesty is required for estate agents. The Tribunal is to have regard to specific deterrence and general deterrence. In respect of the latter, the Tribunal should consider the effect its orders will have on agents' understanding as to the requirements and the standards expected, to prevent others from engaging in similar misconduct in the future. Agents who do not deal with trust funds and monies according to the law need to know that serious consequences for their participation in the industry will follow. Another matter to take into account is the agent's level of insight into the conduct in issue.[5]
2. A very significant factor in this case arises from the fact that the findings primarily concern dealings with a trust account. While no allegation is made that Mr Hoban converted the funds to his own use, it is apparent that he made use of trust account funds to run the business. He also failed to ensure that the company complied with a range of requirements in respect of the proper management and reconciliation of those accounts. The failure to produce audited accounts for two financial years as required by section 64 of the Act meant that CAV as the regulator was unable to readily satisfy itself that the company was complying with the law and that the interests of the true owners of the trust account funds were protected.
3. Despite having the opportunity at two hearings before me to do so, Mr Hoban displayed no understanding of the nature of the responsibilities of a licenced agent in respect of financial records and compliance with legal obligations, including those relevant to selling properties for commission. Mr Hoban has not shown that he accepts as officer in effective control that he was responsible for the shortcomings in the running of the business. He has not at any stage provided a coherent explanation as to the meaning and basis for the 'See Mick' entries in the trust account reconciliations. While I accept that Mr Hoban might not have personally profited from those entries and the other shortcomings in the financial records, that does absolve Mr Hoban from his obligation to meet his professional obligations. He has neither recognised nor accepted that a licenced estate agent has an absolute obligation to comply with the Act and regulations.
4. I will now turn to the specific orders sought by CAV.

1. I am satisfied that it is appropriate that Mr Hoban be reprimanded under section 28A(1)(a) of the Act. A reprimand is not a trivial determination and has the potential for serious adverse implications.[6] It tells the public and other estate agents that the standards expected have not been met and that the agent has been censured.

1. As I understood it, Mr Hoban considered it would be unfair to require him personally to refund the commission given it was paid to the company.
2. CAV relies on section 50(1)(b) of the Act which relevantly provides that an estate agent is not entitled to retain any commission unless the requirements of section 49A(1) of the Act in respect of the required written authority have been met. CAV contended at the hearing that the fact the commission was paid to the company ought not to prevent Mr Hoban from being required to refund it personally. Mr Ventrice, appearing for CAV, noted that it was Mr Hoban himself, rather than a staff member, who had failed to comply with the statutory requirements. He referred me to section 195 of the Australian Consumer Law and Fair Trading Act 2012 (Vic) (ACLFTA). That provision says that an officer of a body corporate who knowingly authorised or permitted a contravention of that Act by a body corporate is deemed to have also committed the contravention.
3. Section 93A of the Act has the effect that section 195 of the ACLFTA applies to officers of bodies corporate, such as Mr Hoban. The consequence is that the Tribunal has the power to find that Mr Hoban is personally liable for conduct of the company. For the reasons given in Director of Consumer Affairs Victoria v Hoban (No 2) [2016] VCAT 1574 no order for the refund of commission will be made.

1. CAV referred me to a range of previous Tribunal decisions dealing with estate agents who have improperly dealt with trust account funds or failed to comply with audit and like requirements of the Act.[7] CAV correctly stated that, while previous decisions of the Tribunal may assist in setting some broad principles and provide guidance, each case must be considered on its own facts and having regard to the particular conduct and circumstances of the individual.
2. I agree with CAV's submissions that the extent and nature of Mr Hoban's failings in respect of the proper management of the estate agency business and the trust account mean that cancellation of his estate agent's licence is appropriate and necessary. Appropriate because the conduct is very serious and it must be made plain to the industry that, what might be described as slap dash business processes and management, are entirely unacceptable. I very much doubt that competent and reputable estate agents based in rural and regional locations would agree that Mr Hoban's conduct represented the country way of behaving. Cancellation is necessary in this case because Mr Hoban has demonstrated an unwillingness or inability to accept responsibility for what has occurred and has failed to show he understands how his conduct undermines confidence in the industry and is entirely inconsistent with that of reputable estate agents.
3. Accordingly, I will order that Mr Hoban's estate agent's licence be cancelled. My order will come into effect in one month.

1. CAV contended that a lengthy period of disqualification from holding an estate agent's licence should be set due to the seriousness of the conduct in issue combined with Mr Hoban's lack of remorse and insight. CAV submitted that there is no material the Tribunal could rely on to take comfort that, if the same circumstances were to arise again, Mr Hoban would act differently. On this basis CAV sought a period of disqualification of 10 years.
2. As indicated earlier, Mr Hoban expressed serious concerns about his capacity to earn an income to support his family if he was unable to work as an estate agent for even 12 months.
3. In deciding what period of disqualification to impose, I have been mindful that elements of specific and general deterrence are relevant. Decisions of this kind will necessarily have a punitive effect because the estate agent will be unable to earn an income in that profession. Like Mr Hoban they might find themselves with limited alternatives. Also relevant is the need to ensure that other estate agents are aware conduct like this will not be tolerated and will attract significant negative consequences.
4. CAV relied on my decision in Consumer Affairs v Hoare (No 2),[8] as the basis for seeking disqualification for 10 years. I do not consider Mr Hoban's circumstances to be directly comparable. In Hoare I found that Mr Hoare had fraudulently converted to his own use and/or knowingly permitted the company of which he was a director convert to its own use, trust monies. I also found that Mr Hoare had failed to act fairly and honestly in the performance of his functions as an estate agent. Other cases involving findings of dishonesty and of an agent benefiting from misuse of trust funds have also been less useful here. I have rather taken into account cases dealing with breaches of trust account related provisions which have not included findings of dishonesty.[9]
5. I have given particular weight to Mr Hoban's failure to inform himself about his legal obligations and to establish proper office procedures for the estate agency business. I have taken account of the time over which the breaches occurred and the number of them. I have noted his failure to take responsibility for his conduct or to demonstrate an appreciation of the potential risks that might have arisen.
6. Given that Mr Hoban has not informed his current employer about the subject matter of these proceedings, I am not satisfied that the public would be protected if Mr Hoban were to continue in his current position. I consider a period of disqualification of more than 12 months is appropriate given Mr Hoban's failure to show he appreciates the significance of what has occurred, particularly in respect of his obligations when selling properties and obtaining commission. I have been mindful that the reputation of the industry suffers from conduct of this kind.
7. I have concluded that Mr Hoban is to be disqualified from holding an estate agent's licence for a period of three years.

Having regard to the signed statement of agreed facts dated 31 July 2015 and the evidence heard, the Tribunal finds that the respondent has:

1. By knowingly authorising the company to cause the Victorian Trust Account to be in a recurring state of deficiency of between $45,676.37 and $111,149.40 from June 2013 until April 2014, without having a sufficient and satisfactory explanation for causing the deficiency, contravened section 90(1) of the Estate Agents Act 1980 (the Act).
2. By knowingly authorising, or permitting, the company to, when completing trust account reconciliation statements from June 2013 to April 2014, fail to correctly bring forward the cash book balance from the previous month's reconciliation, failed to comply with section 63(1) of the Act.
3. By knowingly authorising the company to fail to provide an audit report for the financial year ending 30 June 2012 to the applicant until 17 April 2014, failed to comply with section 64(1) of the Act.
4. By knowingly authorising the company to fail to provide an audit report for the financial year ending 30 June 2013 to the applicant, failed to comply with section 64(1) of the Act.
5. By knowingly authorising the company to fail to provide an audit report for the financial year ending 30 June 2014 to the applicant, failed to comply with section 64(1) of the Act.
6. By completing its trust account reconciliation for the months of July 2013, August 2013, October 2013, November 2013, December 2013, January 2014 and March 2014 before the end of that month, failed to comply with section 63(1)(c) of the Act.
7. By not correctly balancing its trust account reconciliation statements for the months of July 2013, September 2013, December 2013, January 2014 and March 2014, failed to comply with section 63(1)(c) of the Act.
8. By knowingly authorising the company to obtain commission in the amount of $8,085 from Gerald and Maureen Thomas without holding a signed written engagement or appointment from them, failed to comply with section 49A(1) of the Act.
9. By knowingly authorising the company to obtain commission in the amount of $4,290 from Andrew and Penelope Brown without holding a signed written engagement or appointment from them, failed to comply with section 49A(1) of the Act.
10. By reason of all the matters referred to in paragraphs 1 to 9 above:

(a) Failed to comply with section 29B(2)(e) of the Act and regulations 11, 13(1) and 13(2) of the Estate Agents (Professional Conduct) Regulations 2008; and

(b) Is not a fit and proper person to hold a licence; and

(c) Has been guilty of conduct as an estate agent which renders him unfit to hold a licence.

[1] These reasons for decision were amended by order made on 16 September 2016 - see Director of Consumer Affairs Victoria v Hoban (No 2) [2016] VCAT 1574.

[2] CAV also brought a proceeding against the company (proceeding Z208/2015) and on 14 April 2016, I made findings about allegations relevant to the company. On 14 June 2016, I struck out that proceeding after being informed that the company had been placed into external administration in December 2015 and, as a consequence, the Tribunal was unable to make final orders as no court has given leave for that proceeding to continue as required by section 500(2) of the Corporations Act 2001 (Cth).

[3] Second Reading Speech for the Estate Agents Bill, Hansard, Legislative Assembly, 1 May 1980, page 8972.

[4] See Australian Broadcasting Tribunal v Bond [1990] HCA 33; Hughes and Vale Pty Ltd v State of New South Wales (No 2) [1955] HCA 28.

[5] See generally, Mario Inglese and M Inglese Pty Ltd and Estate Agents Board, Supreme Court of Victoria, 15 August 1989; Quinn v Law Institute of Victoria Limited [2007] VSCA 122; Director of Consumer Affairs Victoria v Marshall [2013] VCAT 1316, Director of Consumer Affairs Victoria v Talia [2010] VCAT 1107 Director of Consumer Affairs Victoria v Rounds [2013] VCAT 1882; Acting Director of Consumer Affairs v Moularas [2014] VCAT 474; Consumer Affairs Victoria v Hoare (No 2) [2015] VCAT 1077.

1. [6] Peeke v Medical Board of Victoria, Unreported, Supreme Court of Victoria, 19 January 1993 at p 6 - while this case concerns a medical practitioner, given the responsibility estate agents carry in respect of funds and their responsibility to act honestly, those serious adverse implications equally apply to the estate agency industry.

[7] Including Director of Consumer Affairs v Marshall [2013] VCAT 1316; Director of Consumer Affairs v Baycrown Management Pty Ltd [2015] VCAT 380; Consumer Affairs v Hoare (No 2) [2015] VCAT 1077; Director of Consumer Affairs Victoria v Rounds [2013] VCAT 1882; Director of Consumer Affairs Victoria v Shaba [2014] VCAT 815; and Director of Consumer Affairs Victoria v Worldwide Scope Pty Ltd [2013] VCAT 702.

[8] [2015] VCAT 1077.

[9] Director of Consumer Affairs v Murray, proceeding Z188/2015, findings and orders made on 22 September 2015; Department of Consumer Affairs Victoria v McDonald [2015] VCAT 1625; and Department of Consumer Affairs Victoria v Roberts [2015] VCAT 1627.