Director of Consumer Affairs Victoria v Parsons (Review and Regulation) [2014] VCAT 1231

The respondent, Christine Parsons also known as Christine Sung, having admitted the amended allegations numbered 1 - 4 in the Application for Inquiry, the Tribunal finds the allegations proven, and orders as follows:

1. The respondent is reprimanded in respect of each allegation proven.

1. The Tribunal accepts the respondent's undertaking to the Tribunal that she will not, at any time in the future, apply to the Business Licensing Authority or its successors to hold a licence as an estate agent.

1. The respondent is required, at her own expense and within 12 months from the date of these orders, to undertake or to retake (as the case may be), the following units of study from an approved registered training organisation, if not the REIV:

• Identify legal and ethical requirements of property management; and
• Identify legal and ethical requirements of property sales.

1. The Tribunal accepts the respondent's undertaking, personally to notify the applicant of any change of employment, including changes in the name of her employer, within 14 days of the change, for a period of two years from the date of these orders.
2. No order as to costs.

1. The Director of Consumer Affairs has made application to the Tribunal for an inquiry in relation to Ms Christine Parsons, also known as Christine Sung. The Tribunal holds the inquiry pursuant to section 25 of the Estate Agents Act 1980 ("the Act").
2. Ms Parsons held an estate agent's licence from January 2006 to January 2013, when her licence lapsed. She was also the director and secretary of Du Pont Sung International Properties Pty Ltd (ACN: 114 839 931) trading as "Du Pont Sung Estate Agents", which operated as a licensed estate agent from September 2005 to 13 September 2012, when it surrendered its licence.
3. Ms Parsons was also the officer in effective control (OIEC) of Du Pont Sung International Properties Pty Ltd.
4. These proceedings largely concern breaches of the Estate Agents Act and Regulations by Du Pont Sung International Properties Pty Ltd, for which Ms Parsons, as OIEC, is responsible.
5. As OIEC, Ms Parsons was responsible for the conduct of employees. In particular, she was responsible for the conduct of Mr Henry Claude Du Pont who she employed as an agent's representative at Du Pont Sung Estate Agents between January and March 2011, despite him being ineligible to act as an agent's representative because of previous dishonesty offences.[1]
6. There are four allegations, each of which Ms Parsons admits.
7. Because of those admissions, the hearing focussed on the question of an appropriate determination under section 28A of the Act. The parties reached an agreement about orders to propose to the Tribunal. I indicated to the parties my view that some additional orders would be required for me to be satisfied that the determination was appropriate to protect the public. I made the orders on 5 September 2014 with the agreement of the respondent.

1. The Director set out four allegations as the grounds for taking action.

Allegation 1: Breach of ss 47C(2) and 55 of the Act

1. On 20 December 2011, Ms Parsons was found guilty at Melbourne Magistrates' Court of two counts of breaching s 47C(2) and one count of breaching s 55 of the Act. In each case the Magistrate made the orders without conviction and fined Ms Parsons a total of $12,000 with $800 costs.
2. Section 47C(2) prohibits an agent, while marketing real estate, from stating as his or her estimate of the selling price, a price that is less than the estimated selling price or less than the lower limit of a range stated in the agent's engagement or appointment.
3. Ms Parsons was found guilty of two counts of breach s 47C(2).
4. The first count related to an advertisement in the Sunbury Leader in November 2010 of a property in Stringer Court, Sunbury. The advertised selling price was $500,000 - $550,000. The estimated selling price on the agency agreement with Du Pont Sung Estate Agents was $599,000 - $649,000.
5. The November 2010 advertisement is a clear breach of s 47C(2). The circumstances indicate, however, that the breach was inadvertent.
6. The advertisement in question was the last of a series of six advertisements placed in the Sunbury Leader. The previous five advertisements showed the correct estimate, which accorded with the estimate in the sales authority. The offending advertisement, I am satisfied, resulted from a mistake made by Ms Parsons' assistant in uploading the wrong price, copied from another property listing, onto the newspaper's advertising template.
7. Ms Parsons had no prior knowledge of the mistake, but nevertheless accepts responsibility.
8. The second count of a breach of s 47C(2) related to a property in Sorbonne Drive, Sunbury.
9. Du Pont Sung Estate Agents entered into an agency authority with the vendors in December 2010. The estimated selling price on the sales authority was between $310,000 - $330,000.
10. In May 2011, the relevant advertisement in the Sunbury Leader stated that the selling price was $299,000 - $329,000. Ms Parsons' explanation is that having signed the sales authority before Christmas 2010, the vendors asked Ms Parsons not to market the property until after Christmas. She says the vendors then changed their minds in early 2011 about the sale price and instructed one of her employees to advertise the property at the lower price.
11. Ms Parsons says she asked the vendors to re-sign an amended authority with the lower, estimate but the vendors refused to do so.
12. Quite properly, Ms Parsons accepts responsibility for the breach. There is no doubt that the advertisement with the lower estimate should not have been placed unless and until the vendors signed a revised authority.
13. Ms Parsons was also found guilty of one count of breaching section 55 of the Act.
14. Section 55 of the Act prohibits an estate agent, or an agent's representative, from obtaining a direct or indirect beneficial interest in any real estate or business that the estate agent has been commissioned by any principal to sell.
15. Under s 55(3), a person obtains a beneficial interest if they, or an associate, or an associated corporation,[2] purchases the real estate or business or holds an option to purchase the real estate or business.
16. Under s 55(4), a person does not contravene sub-section 1 or 2, if the person:
    • obtains the principal's written acknowledgement and consent in the approved form before the contract of sale is entered into,
    • acts fairly and honestly in relation to the transaction,
    • does not receive any commission or other reward, and
    • the principal is in substantially as good a position as the principal would be if the real estate or business were sold at fair market value.
17. Ms Parsons pleaded guilty to the charge at the Melbourne Magistrates' Court, which arose from the sale by a vendor of three lots at Anderson Road, Sunbury to a company of which Ms Parsons was a director and shareholder - Du Pont Sung Asia-Pacific Pty Ltd.
18. From the information provided to the Tribunal, it is not possible to make any detailed findings about how the transaction took place.
19. It is relevant, as submitted by Ms Parsons' Counsel, that the Magistrate recorded no conviction in relation to this and the other counts.

Allegation 2: Breach of section 16(4)(a)

1. Ms Parsons admits that as OIEC of Du Pont Sung International Properties Pty Ltd, she failed to take reasonable steps to ensure that Mr Henri Claude Du Pont was eligible to be employed as an agents' representative. She has that obligation under s 16(4)(a) of the Act which provides:

"An estate agent must not appoint a person to act as an agents' representative unless the agent, or, in the case of a corporation, the officer in effective control of the estate agency business of the corporation -

(i) a copy of the certificate from the Chief Commissioner of Police or CrimTrac that indicates that the person is not ineligible to be an agents' representative under sub-section (1)(c) and that -

(B) is more than 6 months old but that is accompanied by statutory declaration of the person stating that he or she has not been found guilty of any disqualifying office; and

1. has taken any other reasonable steps that are necessary to ensure that the person is eligible to be employed as an agents' representative.

1. As noted above, Mr Du Pont was not eligible to be an agents' representative because of previous dishonesty offences.
2. I am satisfied that Ms Parsons understood and intended to comply with her obligation to obtain a police or CrimTrac certificate.
3. Mr Du Pont had given her written confirmation from the REIV that he had completed the agent's representative course. The application form for the police check had been completed. Ms Parsons had instructed her personal assistant to send off the request. For whatever reason, her personal assistant omitted to do so.
4. As Counsel for Ms Parsons submitted, this was not "a wholesale failure" to comply with her obligations. Nevertheless Ms Parsons accepted responsibility for the failure to complete the process, which is an important part of licensing scheme, and which is aimed at protecting the public.

Allegations 3 and 4: breach of regulations 11 and 13(2) of the Estate Agents (Professional Conduct) Regulations 2008

1. Regulation 11 requires an estate agent at all times to act fairly and honestly and to the best of the agent's knowledge and ability in the performance of the agent's functions as an estate agent.
2. Regulation 13(2) prohibits an estate agent from engaging in conduct that is unprofessional or detrimental to the reputation or interests of the estate agency industry.
3. Allegations 3 and 4 arise out of the same facts.
4. Some time after meeting with the vendors of a property in Kingsley Drive, Sunbury, the sales authority signed by the vendors to be altered unilaterally and without authorisation. It is not alleged that Ms Parsons altered the authority, rather that she allowed it to happen.
5. The alteration added the estimated commission and the agent's estimated selling price. Du Pont Sung Estate Agents subsequently brought a claim against the vendors for advertising expenses, based on the altered authority. Mr Du Pont withdrew those proceedings on the day of the hearing.
6. I accept that Ms Parsons was not directly responsible for the alteration to the sales authority. The matter is nevertheless serious.
7. The authority as signed did not contain an estimated selling price. It did not comply with s 49A of the Act, because it did not contain a dollar amount for estimated commission. And for outgoings. Under section 50 of the Act, therefore, Du Pont Sung Estate Agents could not sue for, recover, or retain any commission or outgoings in respect of the transaction.
8. It may be, as Ms Parsons said, that she was not the driver of the application to the Tribunal but the letters of demands are on Du Pont Sung Estate Agents' letterhead, are in her name, her name is stated to be the contact person on the VCAT application, and she has apparently signed the application.
9. At the least, as the OIEC, she is responsible for ensuring that authorities are never altered after signing, and that invalid or altered authorities are never the subject of any civil proceeding.
10. I am satisfied that her conduct is conduct in breach of regulations 11 and 13.
11. I find the allegations proven and turn to the question of determination. Section 28A of the Act sets out the determinations the Tribunal may make. They include:
    • Reprimand
    • Compliance with a specified requirement
    • Cancellation of the licence and disqualification from holding a either permanently or for a specified period
    • Suspension of the licence for a period up to one year
    • Conditions or limitations on the licence
    • Declaration of ineligibility
    • Requirement to provide an undertaking
    • Penalty of $5,000 or less

1. In deciding the appropriate determination, the Tribunal directs its consideration to the protection of the public and the maintenance of public confidence in, and the professional standards of, the regulated industry.[3]
2. The role and the responsibilities of an OIEC are at the centre of the regulatory regime. As Senior Member Proctor observed in Director of Consumer Affairs v Stewart: [4]

The role of OIEC is created in the Act as an essential element of the protection of the public. If the OIEC fails in that role, the public is at risk. That failure can take the form of a person not in fact being in effective control, even if the person acts honestly.

1. In considering what is required to protect the public, the Tribunal takes into account a number of factors including:
   • specific deterrence - deterring the individual from offending again,
   • general deterrence - deterring others in the profession or business from offending in the same way, by signalling that to do so will attract consequences,
   • any insight or remorse shown by the person,
   • any disciplinary history,
   • the conduct of the person in the time between the offences and the hearing, and
   • any mitigating circumstances
2. Ms Parsons has no previous disciplinary history and there are no pending disciplinary matters.
3. She has admitted the allegations, as she admitted the charges in the Magistrates' Court, which is a strong indication of insight and remorse.
4. She has been cooperative during the course of the investigation and in respect of this proceeding.
5. These are all factors in her favour.
6. Significantly, she has volunteered to relinquish her right to be a licensed estate agent permanently, although she wishes to be able to continue to work as an agent's representative if possible.
7. Counsel for Ms Parsons submitted that the Tribunal can see in these allegations a short and sharp period in an otherwise unblemished career where things seemed to go "horribly wrong". That characterisation is appropriate in this case.
8. Ms Parsons' personal circumstances were both difficult and complicated at the time of the events giving rise to the allegations.
9. She met Mr Du Pont at a conference in 2010, when she was in the process of a messy and distressing divorce. She entered into a personal relationship with him in September 2010. By December 2010, Mr Du Pont had restructured her company and changed the name from Sky Raider Pty Ltd to Du Pont Sung International Properties Pty Ltd.
10. In Counsel's submission, Mr Du Pont succeeding in manipulating both Ms Parsons and her business to his advantage and her detriment. Thee is no doubt that he consequences of the personal and business relationship she had with Mr Du Pont have been disastrous for her.
11. On the evidence before me, I find that the conduct under scrutiny here is out of character and explicable, although not excusable, by the circumstances described above.
12. It is now some time since the conduct occurred. It did not continue, and has not been repeated.
13. It is appropriate in my view, and agreed to by Ms Parsons, that she be reprimanded in respect of the matters the subject of each of the allegations. A reprimand is a serious sanction, as noted by Member French in Consumer Affairs Victoria v Cohen[5], and operates to provide specific and general deterrence.
14. In this case, Ms Parsons has also offered an undertaking not to apply, at any time in the future, for a licence under the Act as an estate agent. By offering this undertaking, Ms Parsons is voluntarily precluding herself from the status and privileges of a licensed estate agent, and also from holding the office of OIEC of a licensed estate agency.
15. This is a serious and substantial step on Ms Parsons' part. The solicitor for the Director indicated that the undertaking addresses the Director's concerns that Ms Parsons had failed adequately to supervise those in her employ and had not maintained control of the conduct of those she employed. To the extent that these were failures of supervision, the solicitor submitted, the need to protect the public is addressed by acceptance of the undertaking.
16. In my view the undertaking offered goes most of the way to ensuring that the public is protected, by ensuring that in any future employment in a real estate agency, Ms Parsons will be supervised by a licensed estate agent who will be responsible for her conduct.
17. I consider that it is also appropriate for Ms Parsons to undertake some education, or re-education in the legal and ethical requirements of property sales and property management.
18. The parties suggested, and I agree that the appropriate courses are in identifying legal and ethical requirements of property sales and identifying legal and ethical requirements of property management.
19. The REIV provides both courses, and Counsel for Ms Parsons indicated that they are available for Ms Parsons to complete within the next 12 months.
20. I also invited the parties to consider whether some form of agreed monitoring or a supervision condition might be appropriate. After some discussion, they proposed a condition that Ms Parsons undertake, for the next two years, to notify the Director of any change in her employment, together with the name of her changed employer, within 14 days of any such change taking place.
21. Any employer she has in that period will have his or her own obligation to notify the Director, but I am satisfied that the proposed condition provides an additional layer of protection by making it Ms Parsons' personal responsibility to ensure that for the next two years the Director knows where she is working at any one time.
22. As framed and agreed to by Ms Parsons, the orders the Tribunal makes do not prevent Ms Parsons from acting as an agents' representative. As accepted by her Counsel, the orders carry with them the significant deterrent that should she breach any of those orders or re-offend there are likely to be very serious consequences.

[1] See section 16 of the Estate Agents Act

[2] See section 55(3)(a) to (i) for the range of circumstances in which a person may obtain a beneficial interest for the purposes of section 55(1) and (2).

[3] Re Collins v Estate Agents Board (1994) 7 VAR 394, 400

[4] [2014] VCAT 446

[5] [2014] VCAT 220 at [9]