Real Estate and Business Agents Act 1978 (WA), s 23, s 43, s 47(1)(b), s 101, s 102(1)(b), s 103(4)

Penalty varied to one of disqualification for period of 5 years

Mullally v Legal Practitioners Complaints Committee, unreported; FCt SCt of WA; Library No 970671; 5 December 1997

Warwick Entertainment Centre Pty Ltd v McKenzie [2000] WASCA 280

1 This is an appeal by the appellant against the decision of his Honour Judge O'Sullivan in the District Court of Western Australia made 8 February 2002 whereby the learned Judge ordered that:

1. The appeal of the appellant before him against the decisions of the Real Estate and Business Agents' Supervisory Board made 17 August 2000 and 19 September 2000 be dismissed; and

2. The appellant do pay the respondent's costs of the appeal to be taxed.

1. The decision of his Honour Judge O'Sullivan be set aside and in lieu thereof it be ordered that:

(a) determined on 17 August 2000 that the appellant failed to act fairly and honestly contrary to Article A5(1) of the Code of Conduct;

(i) the appellant's sales representative certificate be cancelled;

(ii) the appellant be permanently disqualified from being a sales representative;

2. The respondent's complaints against the appellant be dismissed.

3. The penalty and order for costs imposed by the Board be set aside.

4. The order made by the learned Judge on appeal that the appellant pay the respondent's costs of the appeal be set aside.

5. The respondent do pay the appellant's costs of and incidental to the inquiry before the Board, the District Court appeal and this appeal to be taxed.

3 The Board held an inquiry under s 102(1)(b) of the Real Estate and Business Agents Act 1978 (WA) into the conduct of the appellant in his capacity as a sales representative. The purpose of the inquiry was to determine whether or not there was proper cause for disciplinary action against the appellant.

4 The notice of inquiry before the Board filed by the respondent, who is an inspector appointed under the Act, alleged that:

(1) in contravention of Article 5(1) of the Code of Conduct, the appellant failed to act fairly and honestly in relation to his sales of three properties by personally receiving the commission directly from the vendors on the sale from the vendors and failing to account for the commission to his employer, a licensed real estate agent;

(2) the appellant breached Article 10(1) of the Code of Conduct in relation to his sale of the property of one Mr Boenke by accepting an engagement to act, or continue to act, where to do so would place his interest in conflict with that of his principal;

(3) in relation to all three sales of property, the appellant failed to act in the best interests of his principal in breach of Article 2 of the Code of Conduct, in exposing the principal in each of the three instances to liability to the licensee for breach of contract in that the licensee remained unpaid, although entitled to payment pursuant to the listing contract.

The Code of Conduct referred to is the Code of Conduct for Agents and Sales Representatives made pursuant to s 101 of the Act and published in the Government Gazette dated 29 June 1993.

5 The articles of the Code of Conduct relevant to the Board's inquiry were as follows:

Article 2 An agent must act in the best interests of his or her principal except where it would be unreasonable or improper to do so;

Article 5(1) an agent must act fairly and honestly;

Article 10(1) an agent must not accept an engagement to act, or continue to act, where to do so would place his or her interest in conflict with that of the principal.

The Code relevantly defines an "agent" to include a sales representative, and a "principal" in relation to a sales representative to mean the principal of the agent by whom the sales representative is employed. It follows that, in a typical property sale, the principal is the vendor of the property.

6 The Board received evidence that, from 1976 to the time of the inquiry before it, the appellant had been employed as a sales representative and was the nominated manager of the registered branch office of a licensee pursuant to the provisions of cl 16 of the Schedule to the Act. In 1990, the late Mr Franklin Lavery acquired the real estate business then conducted at shop 9 Hamilton Hill Shopping Centre, Dodd Street, Hamilton Hill, Western Australia. The appellant was among the employees of the business who then came to be employed by Mr Lavery. From the time of that acquisition, the business traded as "Hunter & Lavery".

7 At material times, Mr Lavery's daughter, Ms Christine Lavery, was also a licensed real estate agent. On 1 January 1994, she acquired the business of Hunter & Lavery. The appellant was among the staff who were employed in the business and continued to be employed in the business upon its acquisition by Ms Lavery. At the time of the inquiry before the Board, the appellant remained in Ms Lavery's employment.

8 Initially, at least, Mr Lavery remained active in the business of Hunter & Lavery. However, in mid-1996, Mr Lavery was diagnosed as suffering from lymphoma. From that time on, he was much less actively involve in the business owned by his daughter. He was hospitalised in late 1997 and died on 18 February 1998. He was 68 years of age at the time of his death.

9 The Board heard about the sales of three properties. The first of these was that owned by a Mr Boenke.

10 Mr Boenke listed a vacant lot at Lot 48 Picotee Mews, Coogee with Hunter & Lavery in terms of a written authorisation dated 5 March 1997, which was executed on behalf of the firm by the appellant.

11 The appellant procured an offer to purchase the property from a Mrs Martino for $97,000 in terms of a written offer dated 5 March 1997, which Mr Boenke accepted. Priority Settlements were nominated as the settlement agent to act for Mr Boenke in the finalisation of the dealing, at the suggestion of the appellant.

12 Mr Boenke told the Board that, when the appellant communicated Mrs Martino's offer of $97,000 to him, the appellant said it was the best he was going to get and offered Mr Boenke a discount of $1000 off the agent's commission and offered to limit his fee to $2500. Mr Boenke accepted this proposition. Prior to settlement of the dealing, Mr Boenke signed a written authorisation to the settlement agency to disburse money on his behalf as follows:

"To pay Tom Grljusich the sum of $2500 being the fee agreed to by me for his assistance in selling the above-mentioned property."

13 The Board considered that this authority reflected an arrangement between the settlement agent and the appellant to direct the selling fee to him.

14 The Board noted that the offer and acceptance document did not bear the "Hunter & Lavery" stamp or name.

15 The appellant contended before the Board, and in his interviews with the inspector prior to the inquiry, that he had not taken a fee for selling Mr Boenke's property. He claimed that Mr Boenke had been short of money and that the appellant had agreed to loan him a total of $2500, which he advanced in cash. The Board considered this contention to be at odds with the authority executed by Mr Boenke.

16 The Board also noted that this contention was in direct conflict with a form of receipt signed by the appellant dated 3 April 1997 and headed "Priority Settlements", in the following terms:

"I, Tom Grljusich of Hunter & Lavery Spearwood hereby acknowledge receipt of $2500 cash received from Priority Settlements being moneys due to me on the transaction Boenke to Martino - Lot 48 Picotee Mews Coogee as per agreed selling fee with the vendor Rudiger Hans George.

(Signed) T Grljusich."

17 At the inquiry, the appellant claimed that he attended the office of the settlement agency without his spectacles and signed this document without being able to read the text and was quite unaware that he was acknowledging receipt of payment of a selling fee.

18 The appellant, in order to corroborate his evidence to the inquiry, called a Mr Peter Ferguson, a pensioner of 71 years of age. Mr Ferguson had worked as a handyman for Hunter & Lavery from some time in the early 1990s and for most of his work was paid in cash. Mr Ferguson said that he had spent protracted periods of time in the Hunter & Lavery office at Hamilton Hill. Mr Ferguson said he knew Mr Boenke. He said that he had seen Mr Boenke come into the Hamilton Hill office three and a half years prior to the inquiry and had observed the appellant give him $1400. However, when cross-examined, Mr Ferguson said he heard the figure of $1400 mentioned, but had not actually been able to see the amount handed over. The Board found that, when pressed in cross-examination, Mr Ferguson was "very vague" as to quite when this incident had occurred. The Board considered Mr Ferguson an "unsatisfactory witness", not only in respect of this transaction, but also in respect of another matter referred to below.

19 The appellant also called a Mr Phillip Fisher, who described himself as a very good friend of the appellant. Mr Fisher said that he had been with the appellant in the Hamilton Hill Hotel when the appellant had been approached by Mr Boenke and had handed to Mr Boenke some money in the form of $50 and $100 notes to the amount of $500 or $600. This had happened two years prior to the Board's inquiry. Under cross-examination, Mr Fisher said that the appellant had asked him to be a witness two or three years earlier and that he had confirmed he remembered the respondent giving "Rudy" some money. The Board found that, under cross-examination, Mr Fisher was "extremely vague" as to when this incident had occurred. The Board thought Mr Fisher an "unimpressive witness".

20 The Board preferred the "straightforward evidence" of Mr Boenke, corroborated as it was by the documents before the Board. The Board considered his evidence established that the respondent received the sum of $2500 from the settlement agent as a selling fee.

21 The Board thus formed the view that the appellant misappropriated the commission due to Hunter & Lavery on the Boenke dealing.

22 The second sale the subject of evidence at the Board's inquiry concerned the property of a Mr and Mrs Pavlovich.

23 It was an agreed fact before the Board that on or about 15 March 1997, Mr and Mrs Pavlovich entered into a selling agency agreement with Hunter & Lavery for the sale of their property. The agreement nominated the appellant as sales representative. The agreement included a specific covenant on the part of Mr and Mrs Pavlovich to pay a selling fee to the licensee.

24 The appellant marketed the property with the aid of another sales representative employed by Hunter & Lavery, a Mr Mark Damjanovich. The appellant procured an offer from a Mr and Mrs Piggin dated 25 April 1997 to purchase the property for $275,000. The offer was accepted by the vendors. Priority Settlements were again nominated as the settlement agent, this time on behalf of both the vendor and the purchaser. Mr and Mrs Pavlovich signed an agreement to pay settlement fees, which included an authority to the settlement agent in these terms:

(a) to pay my proportion of rates, taxes, land agents selling fee and other outgoings which may be due by me at settlement."

25 The settlement agent duly effected settlement on this dealing, but did not deduct an agent's commission on settlement. Instead, as Mrs Pavlovich explained in evidence at the inquiry, on the date of settlement she was cleaning the house in readiness for the purchaser to move in when she received a visit from the appellant at about midday. He said he had called to collect the key. He also asked for payment of his selling fee. At the appellant's direction, Mrs Pavlovich wrote out a cheque in favour of the appellant, payable to cash for $3500, as well as a second cheque for $2500 in favour of Mr Damjanovich. Immediately prior to this, Mrs Pavlovich had received confirmation from her bank that the proceeds of sale had been received on her behalf following settlement.

26 Mrs Pavlovich told the inquiry she subsequently received a telephone call from the appellant who warned her that she was likely to be contacted by an investigator. The appellant asked her to please not say that he received fees from selling her property. Mrs Pavlovich remonstrated that she had indeed paid the appellant. The appellant told her that he had known Mr Pavlovich at school and that the appellant could lose his job. He suggested that Mrs Pavlovich "tell them that your husband owed me the money". Mrs Pavlovich declined to do so and told the appellant that if he called her again, she would call the police.

27 The appellant said that he arranged with Mr Pavlovich, whom he said was no stranger to cash transactions, to be paid by way of cash cheque for his commission. The appellant admitted telephoning Mrs Pavlovich at the stage when he was aware that an investigation was being conducted by an inspector against him. He says he told her that she would be receiving a call. He says she "yelled at me". The appellant says he advised her to tell the truth.

28 Mr Damjanovich also gave evidence at the inquiry. He said that the appellant gave him a commission cheque for $2500. Mr Damjanovich was concerned that it was not a Hunter & Lavery cheque, but a cheque signed by Mrs Pavlovich. He queried the appellant, who told him it was "okay" and that the appellant had spoken to Frank Lavery. Mr Damjanovich said he went to Mr Lavery, who confirmed that it was "okay", and that he, Mr Lavery, had arranged it with the appellant and there was no need to go to Ms Christine Lavery about the matter.

29 The Board formed the opinion that Mr Damjanovich was untruthful in giving this evidence. The Board noted two pages of a facsimile transmission from BankWest accounts service which appeared to depict the front and reverse sides of the two cheques drawn by Mrs Pavlovich dated 6 June 1997. The first cheque was in favour of the appellant and showed Mrs Pavlovich's annotation written at the request of the respondent: "please pay cash", followed by her initials. Both cheques were drawn on the St George's Terrace branch of BankWest. The cheques were bearer cheques. Both bore the stamp of the BankWest Spearwood branch, dated 6 June 1997. Both were obviously submitted to the Spearwood branch on that date. Both bore on their reverse side the address of Mr and Mrs Pavlovich, including the address to which they were about to move. The reverse of the cheque in favour of the appellant bore a note: "Okay Julie - 449 6865 Perth". The reverse of the bearer cheque payable to Mr Damjanovich for $2500 bore the annotation: "cash taken by T Grljusich". The reverse of both cheques appeared to bear the imprint of a machine which recorded the date as 6 June 1997, followed by a number of other numerals which appeared to show the time at which the two cheques passed through a machine. During the hearing before the Board, one of the Board investigators telephoned the number 449 6865 and found that it was the head office of BankWest.

30 The Board issued a summons to require the production of the two original cheques from BankWest and the attendance at the inquiry of an officer from the bank to interpret the numerals on the reverse of the two cheques.

31 When this summons was issued, the appellant had already given his evidence. However, his counsel stated on his behalf to the Board that the appellant had, in fact, attended at the Spearwood branch with both cheques in the company of Mr Damjanovich. A bank teller had been willing to cash the cheque payable to the appellant, as he was well-known at the bank, but was reluctant to cash the cheque in favour of Mr Damjanovich, and, hence, the notation that the cash had been taken by the appellant.

32 The Board was prepared to accept this information which accorded with inferences they thought were available from the markings on the two cheques.

33 Mr Damjanovich was questioned extensively in relation to the payment to him and the form in which it was made. He told the Board that the normal arrangement was that a commission was divided equally between Hunter & Lavery and the listing sales representative. In the usual course, Hunter & Lavery would have received $3000 and the sales representative a similar amount. Where a sale was effected by a sales representative other than the sales representative who had the listing, the practice was for the sales representative to divide their share of the commission and receive a quarter each of the total commission. In the usual course, therefore, Mr Damjanovich should have received $1500 of the $6000 commission. When he was questioned as to why he had not queried the amount of the cheque of $2500 in his favour, as well as the fact that it came from a source other than Hunter & Lavery, he said he did not do so as he was simply told by the appellant that that was his commission share.

34 When Mr Damjanovich was asked by the Board what he had done with his cheque, he said that he was unable to remember whether he had banked it or whether he had given it to the appellant to cash for him. He conceded his usual practice was to bank his commission cheques in his own bank, the West Perth branch of the National Australia Bank. When the features of the cheque referred to were put to him, he professed that he was unable to remember what had happened.

35 The Board found the evidence of Mr Damjanovich "extremely unconvincing". The Board concluded that, once the appellant had determined to take the commission for himself, he had the problem that Mr Damjanovich was aware of the sale and would be expecting to be paid a share of the commission by Hunter & Lavery. The Board then stated:

"We suspect that the respondent bought the silence of Mr Damjanovich by paying him $2500 instead of the $1500 that Mr Damjanovich would normally be entitled to receive. We think that the fact that the respondent procured bearer cheques and cashed them immediately is an indication that neither the respondent nor Mr Damjanovich wished to have any record of the receipt of these amounts in their respective banking records. We entirely reject the suggestion that Mr Frank Lavery approved of the diversion of this payment to the respondent and Mr Damjanovich on 6 June 1997."

36 The third sale about which the Board heard evidence concerned the property of a Mr and Mrs Mirco.

37 Mr and Mrs Mirco executed a selling agency agreement dated 12 April 1997 with Hunter & Lavery. It named the appellant as sales representative. Condition 1 of the agreement provided:

"The vendor grants to the listing agent exclusive selling rights of the property for a period of 90 days (the exclusive rights period). Thereafter the listing agent shall continue as a non-exclusive agent for a period not exceeding one (1) year or until the vendor revokes the selling rights in writing."

38 Mr Mirco told the Board that on 29 July 1997, the appellant presented him with an offer from a Mr Anderson to purchase the property the subject of the agreement. The appellant said the agency agreement had expired. On presenting the offer, the appellant said he was going to sell the property in his own name and that if it were done that way, there would be a $1000 reduction in the commission, so that the commission would only be $3500 instead of the $4500 it would be if it were done through Hunter & Lavery. The appellant said he could offer a discounted selling fee. Mr Mirco accepted this proposition, although the Board gained the impression that he suspected that all was not well. Mr and Mrs Mirco signed their acceptance of the offer. The appellant persuaded Mr Mirco to appoint Priority Settlements as the settlement agent telling him that they would discount the conveyancing fee. Priority Settlements was appointed by both vendor and purchaser.

39 Mr and Mrs Mirco received a letter from Priority Settlements dated 14 August 1997, which included the following statement:

"We have been requested by Tom Grljusich to pay him the sum of $3500 being a cash selling fee with regard to the sale and we will require your instructions to pay this amount when you forward the certificate of title."

The letter included the settlement statement, which showed a selling fee of $3500 amongst other debit items listed. Mr Mirco responded by letter dated 18 August 1997 authorising Priority Settlements to pay the appellant $3500 as "the selling fee".

40 Some time after this dealing, Mr Mirco attended on the appellant in connection with other business. The appellant told him that the principal of Priority Settlements, Suzanne Jeffrey, had been "sent to jail for embezzlement". When Mr Mirco was contacted by an inspector on behalf of the Board, Mr Mirco initially claimed that he had paid the appellant $3500 by way of a loan. However, when asked to make a statutory declaration to that effect, Mr Mirco acknowledged as correct the fact that the appellant received $3500 at settlement as a selling fee or commission. He expressly acknowledged in a record of interview with the inspector that his earlier advice that the $3500 represented the repayment of a loan was in fact false. When asked why he had earlier provided that explanation, Mr Mirco stated:

"Well, at the time I was, I dunno [sic], I sorta [sic] panicked, I was worried about it, I didn't really know what the story was regarding the sale of the property and I basically just wanted, I didn't want people, including myself to get into a problem or into trouble if you like."

41 The appellant told the Board that Mr Frank Lavery had actually given him the offer and acceptance form without the Hunter & Lavery name on it to use in this particular transaction. The appellant said that Mr Mirco hinted that he wanted a reduction in the commission, so the appellant dropped the commission by $1000.

42 The Board found that the appellant received $3500 as a selling fee or commission without accounting for it to Hunter & Lavery.

The appellant's general defence before the Board

43 The appellant, quite apart from the specific evidence he gave to the Board concerning each of these three sales, provided a more general explanation to the Board in respect of his sales commission on these sales . He, in effect, conceded that he had personally received the commission on the three sales, but claimed he had been authorised to do so by Mr Frank Lavery as a means of recompensing him for moneys which he had laid out in paying for "breakages and everything else" on behalf of Mr Lavery prior to 1 January 1994, when Ms Lavery acquired the business, and thereafter on behalf of Ms Lavery.

44 The appellant also complained that he had not been adequately paid in respect of a rent roll that he had transferred to Mr Lavery in 1990. The Board, however, found that Mr Lavery's alleged default concerning the rent roll occurred in about 1990, and was not a matter "actively in issue in 1996".

45 As to his claim that Mr Lavery had authorised him to keep the commissions on the three sales, the appellant told the Board that, from about 1990, he had laid out his own money on three categories of expenditure on behalf of Hunter & Lavery. Hunter & Lavery conducted a substantial practice by way of selling real estate lots on behalf on an entity known as "Urban Focus" and used a transportable office on site for this purpose. Periodically, the site office had to be moved, incurring costs of $100 or more in each move. The appellant suggested to the Board that all moves were performed by a single contractor. In addition, the site office was frequently vandalised or broken into when unattended. The appellant claimed that he paid for the repairs to the site office by Mr Peter Ferguson from time to time, either entirely or to the extent of 50 per cent with Mr Frank Lavery.

46 The appellant also told the Board he paid a number of office expenses such as newspapers, tea, coffee and the like. He said that, even after the transfer of the business from Mr Lavery to Ms Lavery, Mr Lavery continued to function as the employer and source of instructions to him. He said he maintained a close working relationship with Mr Lavery. The appellant asked Mr Lavery for reimbursement of his expenditure. Mr Lavery repaid certain expenses, but at some stage "went crook" at the appellant and threatened to close the shop if Mr Lavery had to pay.

47 The appellant presented to the Board three schedules of his estimated expenditure dating from 1990 to the present. He conceded that he had never asked Ms Lavery to pay any of the amounts because he thought "she wouldn't like it". He also said he had not done so because he "didn't want her to get upset". He stated he did not want to add to her problems, although he was not aware that she had any particular financial problems.

48 The appellant conceded that he had not a single voucher to evidence his expenditure on behalf of Hunter & Lavery at any stage. Nor had he presented to either Mr Lavery or Ms Lavery any written claim for reimbursement. The appellant had claimed certain of these expenditures as tax deductions, although he had been warned by his accountant to obtain or retain vouchers for the expenditure, but had not done so. The appellant claimed he had enjoyed an income of up to $220,000 per annum and had paid as much as $100,000 per annum in tax. The Board observed that the appellant had a great incentive to document all possible deductions from his taxable income, but had not done so.

49 The appellant called a Mr Jack Misich to give evidence in support of this evidence. Mr Misich was a cartage contractor who had moved the Hunter & Lavery site office on approximately six occasions between about 1996 and early 2000, and had been paid in cash by the appellant in the amount of between $120 and $140 for each move. He did not issue an invoice or receive a receipt for his payments. This arrangement suited him. He had no records to bolster his recollection. The Board found he was "distinctly vague as to when he had first performed this work and the frequency or dates on which he had done it".

50 The appellant claimed the arrangement he had made with Mr Lavery was in 1996. On that basis, the Board considered most of Mr Misich's activities not to be relevant, as they mostly took place after the agreement allegedly made in 1996 between the appellant and Mr Lavery.

51 The appellant also called Mr Peter Ferguson, the aforementioned 71-year-old pensioner. Mr Ferguson said he had spent protracted periods of time in the Hunter & Lavery office at Hamilton Hill and had come to know the late Mr Lavery. He described Mr Lavery as a dominant personality. He claimed that Mr Lavery had told him that he had transferred the business to his daughter because he (Mr Lavery) was involved in a dispute with the R & I Bank and had transferred his business to put it out of the reach of creditors. He supported the appellant in stating that the respondent took orders from Mr Lavery after the transfer of the business to Christine Lavery. He said that Frank Lavery instructed him on the major work he had carried out in the conversion of certain premises from a Red Rooster outlet into an office. Mr Ferguson indicated to the Board that he was happy to be paid in cash and that the appellant was very generous to him.

52 Mr Ferguson claimed to have overheard a conversation between Mr Lavery and the appellant, which he initially said was in late 1997, during which Mr Lavery said words to the effect that if you are worried about the money "do a couple of commissions".

53 Mr Ferguson accepted in cross-examination that he invoiced Hunter & Lavery for some of the work that he did. When asked how he decided whether to invoice for his services or to take a cash payment, he said the decision was the appellant's.

54 The Board considered Mr Ferguson had "great difficulty" in explaining how he had been able to date the conversation which he had overheard in late 1997 between the appellant and Mr Lavery about doing commissions. This was because he acknowledged the words spoken had no meaning for him when he had overheard it, that he had overheard a lot of conversations in the hours he had spent at the office, but he was categoric nonetheless that he could remember it. In cross-examination, he said he could not really put a date on it. The Board stated that it was "dissatisfied with Mr Ferguson as a witness".

55 Ms Christine Lavery told the inquiry that she was unaware that the appellant had incurred any expenditure on her father's behalf, or on her behalf. She said that the appellant asked her from time to time to pay expenses and presented invoices from tradesmen and third parties. She always paid these expenses and had never rejected any claim for such expenditure. She confirmed that she had definitely not authorised the appellant to appropriate the commissions in issue in the inquiry.

56 The appellant gave evidence to the inquiry that, in about 1996, he had a discussion with Mr Lavery about money due to the appellant for expenditure he had made. He said Mr Lavery said words to the effect: "We have to do something about it. I'll let you do two or three deals on plain contracts and you can keep the commission and not pay tax." They agreed on "those three deals". The appellant admitted he had not mentioned this arrangement to Ms Lavery, although he was aware that, from 1999 onward, she was the proprietor and licensee of Hunter & Lavery.

57 Ms Lavery said that her father had continued to come into the office, but only in a purely advisory capacity after she had taken the business over on 1 January 1994. Her father had no management role after that time. He spent much of his time using the office to work on litigation he was involved in, rather than on the business of Hunter & Lavery.

58 The Board expressly found that it did not accept that Mr Frank Lavery ever authorised the appellant to appropriate commissions for himself. The Board considered there was an abundance of evidence indicating that the appellant carried out his misappropriations in a "clandestine way" and that he did not act openly "as we would expect if he thought he was lawfully entitled so to act".

59 Having made these various findings, the Board concluded its consideration of the matters raised in the inquiry by stating that it considered the appellant to be "untruthful". The Board stated that, whenever the appellant's evidence conflicted with that of other witnesses, it preferred those of the three vendors and Ms Lavery, who were generally acceptable.

60 The Board also found the appellant's evidence to be internally inconsistent. For example, in saying simultaneously that he was authorised by Mr Lavery to charge a commission on his own account in relation to the three sales, including the Boenke sale, and that Mr Boenke merely repaid a loan due to him, the Board considered the appellant's evidence to be inherently inconsistent.

61 The Board also noted that the appellant's statements concerning there having been a loan transaction and not a selling fee was common in his evidence in relation to each of the three transactions.

62 The Board also rejected the appellant's evidence that he had laid out significant sums on behalf of Hunter & Lavery without being repaid.

63 The Board rejected the evidence of the appellant that the late Mr Lavery had ever consented to him not accounting to the licensee in respect of the sales fees earned in the business of Hunter & Lavery. The Board noted that Hunter & Lavery marketed each of the three properties in issue. The marketing process included advertising properties in the press at the expense of Hunter & Lavery. The Hunter & Lavery management system, however, did not require the submission of listing contracts to the head office.

64 The Board noted that two of the three contracts (but not Mr Boenke's) involved payment of a deposit of $1000 and that the appellant was careful to divert the deposit to the settlement agent. Normally, deposits were banked at the trust account of Hunter & Lavery. Had this occurred, the sale would have come to the attention of Ms Lavery.

65 The Board observed that if the appellant had been authorised to conduct these three sales for his own benefit, it might be wondered why he was careful to divert the deposits to the settlement agent. The Board had no doubt that the appellant "conspired" with the settlement agent to process the settlement of these three transactions to the detriment of Hunter & Lavery. The Board also considered the appellant's normal entitlement was to receive 50 per cent on the commission of sale. As it was, the appellant managed to pocket 100 per cent of a discounted commission in the amount of $2500 in relation to the Boenke sale, $3500 from the Pavlovich sale and $3500 from the Mirco sale.

"The [appellant] would appear to have bought the complicity of Mr Mark Damjanovich by paying him $2500 from the Pavlovichs. Normally, Mr Damjanovich and the respondent would have split between them $3000 being half the $6000 commission. It is a matter for dismay that the [appellant's] conduct has involved not merely dishonest behaviour on the [appellant's] part but also the corruption of others. We are dismayed at the number of witnesses who have been prepared to give dishonest evidence on behalf of the respondent. The respondent attempted to get Mrs Pavlovich and probably Mr Mirco to disavow that a selling fee had been paid to him. He took his payments in cash so far as he was able, probably to cover his tracks. The fact that the respondent failed to declare these three receipts as income is a further indication of irregularity."

67 The Board noted that the appellant claimed not to be aware of the fact that he was not legally entitled to trade as a real estate agent and receive payment of commission on his own behalf. He had never held a real estate licence under the Act and was merely entitled to be active as an employee of a licensee. The Board considered the appellant always to have been aware of the correct position.

68 The Board further noted that the deficiencies in the management of Hunter & Lavery were such that the appellant, who was a long-term and trusted employee, was allowed a wide measure of independence and that he had abused the trust placed in him.

69 The Board further found that it was established that each of the three vendors instructed Hunter & Lavery to sell their property and undertook to pay the commission in the event of sale. The Board found that at least the Pavlovichs and the Mircos were "probably aware" that they made payment or authorised payment of the selling fee to the appellant rather than Hunter & Lavery, and, thus, became liable to Hunter & Lavery for breach of contract, even if Ms Lavery was disinclined to make a claim against them.

(1) found that the appellant breached the Code of Conduct in relation to each of the three sales in failing to act fairly and honestly;

(2) declined to find that the appellant preferred his personal interests in breach of Article 10(1) as the Board did not accept that he made any loan to Mr Boenke;

(3) found that the appellant failed to act in the best interests of the Pavlovichs and the Mircos in exposing them to civil liability to pay commission to Hunter & Lavery as well as to himself.

71 The Board, having made these findings and published them in a written decision on 17 August 2000, adjourned the inquiry to enable submissions both in writing and orally to be made on the question of penalty.

72 The Board received written submissions on penalty on behalf of the appellant, together with a book of references. The references included those from persons who knew the appellant socially, as well as in the course of his work as a sales representative. Mr C Evans, the managing director of Urban Focus, for example, provided an account of the appellant's involvement in the sale of land within the City of Cockburn area as agent of the company and concluded by saying:

"The above constitutes a factual account of the situation as I personally know and recall it and trust the Board will take full account of the meritorious commitment of Mr Grljusich to ensure the site office was kept functional at all times and to the very high level of ethics that he practised in achieving sales and acting as our agent."

A number of other persons who had had real estate dealings with the appellant spoke of his honesty and high standards, both in their dealings with him and in the community.

73 The Board noted in its written reasons for penalty delivered on 19 September 2000, that it had read with care the written submissions and the very extensive testimonials from a wide range of persons who had had dealings with the appellant. The Board then concluded as follows:

"We consider that having weighed all aspects as best we can, that there can be only one result. We consider that the dishonesty of Mr Grljusich has been so calculated and so extensive that we cannot allow him to retain a certificate as a sales representative. We therefore cancel the certificate of Mr Grljusich. We disqualify him permanently from operating in the real estate industry. We quite appreciate that it is a serious matter to eliminate a Respondent from the industry in which he has been active for many years. However we are convinced that he is incapable of attaining the personal standard of integrity which is essential."

74 In imposing this penalty and making these comments, the Board further noted that Ms Lavery had not dismissed the appellant from her employment. The Board observed that she was "entitled to consult her own best interests". It observed that the appellant was undoubtedly a large fee earner for her. The Board added, however, that, unlike Ms Lavery, it had to "consider the interests of the community as a whole". It found the fact that Ms Lavery had chosen to retain the appellant in her employment, having weighed the pros and cons of doing so, was not a factor which should determine the Board's decision.

75 The Board further directed the appellant to pay the costs of the inquiry of $2000 within 14 days.

76 The appellant appealed against the decision of the Board by lodging an appeal in the District Court pursuant to s 23 of the Act. By s 23(1):

"Any person aggrieved by a decision or order of the Board in proceedings to which the person was a party shall, subject to this section, be entitled to appeal to the District Court against the decision or order of the Board."

"The District Court may, on the hearing of the appeal, do one or more of the following, according to the nature of the case -

(a) affirm, vary, or quash the decision or order appealed against, or substitute, and make in addition, any decision or order that should have been made in the first instance;

(b) remit the subject matter of the appeal to the Board for further hearing or consideration or for rehearing;

(c) make any further or other order as to the costs or other matter that the case requires."

77 The appellant relied on a number of grounds of appeal in the District Court, claiming variously that the Board either "erred in law and in fact" or "erred in law" in a number of respects. His Honour Judge O'Sullivan, who heard the appeal, appears to have accepted that the appeal was an appeal by way of rehearing, rather than an appeal in the strict sense, or an appeal de novo. He considered, therefore, that, for the appeal to succeed on any ground, it would be necessary for the appellant to show an error of law or fact. He noted (at par 59 of his reasons) that the nature of an appeal is determined upon an examination of the legislative provisions relating to it and referred to Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd [1976] HCA 62; (1976) 135 CLR 616 at 621 per Mason J, Bradshaw v Medical Board of WA (1990) 3 WAR 323 and Moursellas v Pharmaceutical Council of Western Australia (1992) 10 WAR 240. The question had also been raised in an earlier proceeding in relation to an appeal before his Honour Judge H H Jackson in the District Court, who had ruled that proposed additional evidence from the appellant's brother and Mr Evans, the managing director of Urban Focus, could not be admitted on such an appeal as it was neither fresh nor "further evidence" in the sense of that expression as used in O 8 r 30 of the Rules of the District Court.

78 In the appeal before this Court, counsel for the appellant and the respondent respectively agree and concede that an appeal under s 23 of the Act is an appeal by way of rehearing. Thus, it was accepted before this Court that an appeal under the Act is conducted by reference to the evidence given before the Board and that the Court entertaining the appeal by way of rehearing can exercise its appellate powers only if satisfied that there was error on the part of the Board: Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194 at 203 [13] and [14] per Gleeson CJ, Gaudron and Hayne JJ.

79 That this is so has recently been restated by the High Court of Australia. In Fox v Percy [2003] HCA 22; (2003) 197 ALR 201, Gleeson CJ, Gummow and Kirby JJ, at [20], emphasise that:

"Appeal is not, as such, a common law procedure. It is a creature of statute. In Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd, Mason J distinguished between (i) an appeal stricto sensu, where the issue is whether the judgment below was right on the material before the trial court; (ii) an appeal by rehearing on the evidence before the trial court; (iii) an appeal by way of rehearing on that evidence supplemented by such further evidence as the appellate court admits under a statutory power to do so; and (iv) an appeal by way of a hearing de novo. There are different meanings to be attached to the word 'rehearing'. The distinction between an appeal by way of rehearing and a hearing de novo was further considered in Allesch v Maunz. Which of the meanings is that borne by the term 'appeal', or whether there is some other meaning, is, in the absence of an express statement in the particular provision, a matter of statutory construction in each case."

80 In Fox v Percy, the nature of the appeal was to be gleaned from s 75A of the Supreme Court Act 1970 (NSW) which expressly provided that the appeal was by way of rehearing and declared that the Supreme Court had all the powers and duties of the Court from which the appeal was brought, (including the drawing of inferences, making findings of fact, assessment of damages and the power to receive further evidence). In that context, the joint judgment pointed out, at [22], that the "rehearing" did not involve a completely fresh hearing by the appellate court of all the evidence. Rather, the court proceeds on the basis of the record and any fresh evidence that exceptionally it admits under the statutory power so to do. Their Honours, at [23], observed:

"The foregoing procedure shapes the requirements, and limitations, of such an appeal. On the one hand, the appellate court is obliged to 'give the judgment which in its opinion ought to have been given in the first instance'. On the other, it must, of necessity, observe the 'natural limitations' that exist in the case of any appellate court proceeding wholly or substantially on the record." (Citations omitted)

81 As noted above, s 23(3) of the Act here entitles the District Court on the hearing of an appeal under the Act to either affirm, vary or quash a decision or substitute or make in addition any decision or order that "should have been made in the first instance", or remit the subject matter of the appeal to the Board for further hearing, or "make any further or other order as to costs or any other matter that the case requires". While this provision does not provide for further evidence to be adduced in an appeal, there is no particular reason to doubt that such an appeal is by way of rehearing and falls into category (ii) as described by Mason J in Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd (supra).

82 In the event, while the learned Judge in the District Court found that the Board's finding that the appellant had failed to act in the best interests of the principals, Mr and Mrs Pavlovich and Mr and Mrs Mirco, could not be sustained, he otherwise dismissed the appeal, being unable to find any relevant error on the part of the Board.

83 Ground 1 of the appeal in this Court is that the learned Judge in the District Court erred in law in that he determined the appeal before him on the basis that, for the appeal to succeed, he would need to be satisfied that the Board was in error.

84 For the reasons we have set out above concerning the nature of an appeal under s 23 of the Act, this first ground cannot succeed. The appeal was plainly by way of rehearing and it was for the appellant to demonstrate to the satisfaction of the Court that there was error on the part of the primary decision-maker. His Honour plainly applied that test in considering each of seven grounds of appeal pressed before him.

85 In conducting such an appeal by way of rehearing, a Court may well undertake a broad review of the decision of the primary decision-maker, but will only uphold an appeal if error on the part of the primary decision-maker is demonstrated. On such an appeal, it is not for the Court to make such decision as it thinks would have been appropriate if it had been the primary decision-maker. To conduct the hearing of an appeal on that basis, would be to constitute the appeal as one de novo rather than as one by way of rehearing.

86 The first ground of appeal is also important in deciding the fate of the second ground of appeal pressed by the appellant before this Court in that the appellant says, if the Judge had undertaken a broad review of the decision of the Board and then reached his own conclusions on the primary facts, he ought to have come to the conclusion that none of the complaints the subject of each inquiry was made out.

87 In ground 2 the appellant seeks to challenge a number of the Board's findings that led it to conclude that the appellant had failed to act fairly and honestly.

88 The appellant specifically challenges the Board's finding that the appellant did not outlay significant funds on behalf of Hunter & Lavery without being repaid. He says the Board failed to acknowledge the evidence of Ms Lavery concerning those expenses which she did not pay and the evidence of Ms Jane Poscay, Mr Ferguson, Mr Misich and Mr Damjanovich to the effect that the appellant did in fact pay from his own funds expenses for which Hunter & Lavery were responsible.

89 The appellant contends that by reference to this evidence the Board ought to have found that the respondent did outlay significant funds on behalf of Hunter & Lavery for which he was not reimbursed and that there remained a debt due by Hunter & Lavery to him with respect to the acquisition of the rent roll.

90 In putting forward this ground, the appellant first attempts to set aside the finding of the Board that the evidence of Mr Misich was largely irrelevant because the work was undertaken substantially after the agreement was allegedly struck between the appellant and Mr Frank Lavery pursuant to which the appellant claimed an entitlement to retain the commission from the relevant transactions.

91 The appellant then seeks to attack the finding of the Board that the appellant "had bought the complicity" of Mr Damjanovich by paying him the sum of $1000 over and above the commission to which he would ordinarily be entitled, as well as the finding of the Board that the appellant "corrupted" others.

92 The appellant also seeks to attack the finding of the Board that the appellant "probably attempted" to get Mr Mirco to disavow that a selling fee had been paid to him.

93 The appellant further seeks to attack the finding of the Board that the evidence of the appellant with respect to the transaction with Mr Boenke was "internally inconsistent", as well as the finding that Mr Frank Lavery never consented to the appellant retaining commission moneys from the transactions involving Boenke, Mirco and Pavlovich.

94 We consider that, because the primary submission of the appellant concerning the proper test to be applied by his Honour in the District Court is misconceived, ground 2 of the appeal must also fail, as it is premised on ground 1 succeeding.

95 In any event, we consider the Judge was right to find in respect of each of the findings challenged by the appellant that there is no demonstrated error on the part of the Board as the primary decision-maker.

96 The first ground of appeal before the Judge was effectively replicated in ground 2 before this Court and challenged the Board's finding that the appellant had failed to act fairly and honestly by personally receiving commission moneys to which his employer was entitled and failing to account for those commission moneys to his employer. His Honour was not satisfied that there was any error made by the Board on account of such findings being against the weight of evidence, or being based upon an erroneous assessment of the evidence given by various witnesses. Without reciting the detailed reasons given by his Honour in this regard, we wholly agree with what he said about these matters in his reasons for decision at pars 33 - 45.

97 As to the appellant's claim that he was owed moneys by Mr Frank Lavery in respect of the rent roll from 1990, we agree with the Judge that the statement by the Board that "Mr Lavery's alleged default occurred in about 1990 and was not actively an issue in 1996" is to be understood against the background that the Board disbelieved the appellant and did not accept his evidence that might otherwise have been considered uncontradicted. There was no evidence, as his Honour pointed out, other than from the appellant himself that the moneys were owed to him for the transfer of the rent roll. The Board was not prepared to accept his word. It cannot be said that there is any error of fact or law in the Board's finding.

98 As to the appellant's claim that he did in fact lay out significant sums on behalf of Hunter & Lavery for which he was not recompensed, we also agree with the Judge that there were ample grounds for the Board to reject the appellant's evidence in this regard, especially given the adverse view which the Board had formed of the appellant's credibility. Moreover, we agree with his Honour that nothing in the evidence of Ms Lavery, Mr Mirco, Mr Ferguson, Mr Damjanovich or Ms Poscay impugns the Board's finding in that respect.

99 While Ms Lavery, as the Judge pointed out, did say that she did not pay every expense in the list prepared by the appellant, she did say that she was unaware of any expenditure having been incurred by the appellant on her behalf and that she had always made payments upon invoices of tradesmen and other persons presented to her. The Board's finding that Ms Lavery always paid expenses and never rejected any put to her was unexceptional in this evidentiary context.

100 The evidence of Messrs Misich, Ferguson and Damjanovich was dealt with in some detail by the Board, as set out above. As the Judge pointed out in relation to Mr Misich, his testimony was of no great relevance because the payments he received from the appellant were made after the date of the alleged agreement between the appellant and Mr Lavery. The evidence of Mr Misich might confirm a practice of paying for the cost of moving the onsite office and related material. However, it says little or nothing about such expenses having been incurred prior to 1996. It was those expenses which were said by the appellant to constitute part of the alleged "consideration" for the agreement he alleges he made with Mr Lavery in 1996.

101 As to Messrs Ferguson and Damjanovich, the Board did not accept them as witnesses of truth, just as it did not accept the appellant as a witness of truth. Again, we agree with the Judge that it has not been demonstrated that these views were wrong. Thus, it cannot be demonstrated that his Honour erred in his finding. In our opinion, having regard to the evidence recounted above, it was well within the limits of possibility that the Board might, on the evidence before it, discount the reliability of the evidence of these witnesses.

102 As to the Board's conclusion that the appellant bought the complicity of Mr Damjanovich by paying him $1000 more than he would ordinarily have been entitled to, the Judge closely considered the evidence concerning that aspect of the transaction which involved the sale of the Pavlovich property. His Honour stated, in light of the detailed evidence (the substance of which we have set out above), that it is not surprising that the Board commented as it did that it suspected the appellant had "bought the silence" of Mr Damjanovich. While the Board might simply have doubted the reliability of Mr Damjanovich's evidence, we do not think that the Board's comment, or the Judge's finding that there was no demonstrated error in respect of it, is exceptional when one takes into account the whole facts of the case.

103 Similarly, we agree with the Judge that there is, in effect, nothing exceptional in the Board's finding that the appellant "probably attempted to get Mr Mirco to disavow" that a selling fee had been paid to him. This comment, while perhaps redundant in the circumstances, nonetheless follows from a close analysis of the evidence of Mr Mirco in which he expressly admitted that he did not tell the truth about the nature of the payment he had made to the appellant when first spoken to by the inspector and the reason for his so doing remained unexplained. In those circumstances, we agree with the Judge's observation that the comment of the Board was justified. We find no error in his Honour's finding in this regard.

104 As to the evidence of Ms Poscay, as the Judge noted, her evidence was not the subject of any express finding by the Board. We agree with his Honour that there is nothing in her evidence that would justify a finding that the Board had erred in relation to the expenses which she said were from time to time met by the appellant. Her evidence was that the appellant would give her money from his pocket to pay for things such as tea, coffee, milk and the like, including fax paper required in the office. Such evidence goes to support the fact that, from time to time, the appellant did in fact meet office expenses out of his own pocket, but does not otherwise go to impugn the finding of the Board that the appellant should be disbelieved in relation to the agreement he allegedly made with Mr Lavery.

105 The third ground of appeal is that the learned Judge in the District Court erred in law by finding that, on 5 September 2000, the Board properly refused the appellant leave to reopen the inquiry in order to adduce further evidence from two witnesses, namely, his brother, Mr George Grljusich, and Mr Evans, the managing director of Urban Focus, when the Board had been informed by the appellant that such evidence materially bore upon issues as to the extent to which Frank Lavery was in actual or apparent control of the business conducted by Hunter & Lavery, the repeated damage to the site office and the payments made by the appellant in cash to Ferguson for materials and labour relating to the repair or damage of that site office.

106 After the appeal to the District Court had been lodged, the appellant sought an order that the evidence of Messrs Grljusich and Evans should be received in the appeal. His Honour Judge H H Jackson in the District Court considered such evidence to be neither fresh nor "further evidence" and refused leave. His Honour Judge O'Sullivan accepted and endorsed that ruling. The appellant now says that the issue which ought to have been determined by his Honour was not whether that evidence constituted fresh or further evidence, but whether the Board ought to have allowed the appellant to reopen his case to adduce that evidence, which application the Board rejected out of hand.

107 As his Honour Judge O'Sullivan explained in his reasons, the reasons of the Board and its conclusions were published on 17 August 2000 and the parties were then invited to make submissions on penalty. On 4 September 2000, the appellant's solicitors wrote to the Board applying to reopen and call two witnesses on the issues above described. On 5 September 2000, the Board ruled against the appellant's request to reopen. A letter from the Registrar of the Board stated:

"The Real Estate and Business Agents' Supervisory Board has considered your request to reopen the hearing in the above matter. The Board considers the hearing is closed and this matter will not be reopened."

108 While the Judge, in dealing with a similar ground of appeal to this ground, made reference to the ruling of his Honour Judge H H Jackson and inquired whether or not it was accepted by the appellant and was advised that it was, his Honour then went on in par 59 of his reasons to deal with the question whether the Board was in error in disallowing the application to reopen. At par 61, his Honour considered there was no satisfactory explanation given to the Board, or to him, for the failure to call the evidence during the hearing. As his Honour pointed out, the appellant was represented before the Board and the evidence to be called should have been anticipated. Having handed down its reasons, the Board would have been put in an invidious position if it had accepted the invitation to review them and to consider drawing different conclusions on contested issues of fact about which it had already expressed its concluded view.

109 There are well established rules governing the reopening of criminal and civil trials. First, there are rules which are applied in cases where a party seeks to call further evidence having already closed their case, but before a decision has been made by the Court. In criminal cases, the general rule is that the prosecution must present all evidence upon which its case relies before the accused is called upon to defend the charges: R v Chin [1985] HCA 35; (1985) 157 CLR 671; Killick v The Queen [1981] HCA 63; (1981) 147 CLR 565 at 569. In civil trials, the same principles apply whether it is a plaintiff or a defendant who seeks to reopen. The question always is whether the interests of justice are better served by allowing or rejecting the application to reopen: Urban Transport Authority of New South Wales v Nweiser (1992) 28 NSWLR 471.

110 However, where the application to reopen is made after the delivery of judgment, different principles apply. In Smith v New South Wales Bar Association [1992] HCA 36; (1992) 176 CLR 256 Brennan, Dawson, Toohey and Gaudron JJ, in a majority judgment said, at 266 - 267, that:

"If an application is made to re-open on the basis that new or additional evidence is available, it will be relevant, at that stage, to inquire why the evidence was not called at the hearing. If there was a deliberate decision not to call it, ordinarily that will tell decisively against the application [footnote omitted]. But assuming that that hurdle is passed, different considerations may apply depending on whether the case is simply one in which the hearing is complete [footnote omitted], or one in which reasons for judgment have been delivered [footnote omitted]. It is difficult to see why, in the former situation, the primary consideration should not be that of embarrassment or prejudice to the other side [footnote omitted]. In the latter situation the appeal rules relating to fresh evidence may provide a useful guide as to the manner in which the discretion to re-open should be exercised."

111 The appeal rules relating to fresh evidence were explained by Dixon J in Orr v Holmes [1948] HCA 16; (1948) 76 CLR 632 at 640 in the following terms:

"The discovery of fresh evidence makes no such demand upon justice unless it is almost certain that, if the evidence had been available and had been adduced, an opposite result would have been reached and unless no reasonable diligence upon the part of the defeated party would have enabled him to procure the evidence."

112 In criminal cases, the appeal rules relating to fresh evidence are perhaps less stringent. Further evidence will only be accepted if there is a significant possibility that the outcome of the earlier proceedings would have been different had the evidence been available: Gallagher v The Queen [1986] HCA 26; (1986) 160 CLR 392 at 402 per Mason and Deane JJ and at 399 per Gibbs CJ.

113 As the Board's findings and reasons had been published prior to the application to reopen, this is an instance where the appeal rules relating to fresh evidence may provide some guidance as to whether or not the Board erred in refusing the appellant's request to reopen.

114 The nature of the evidence that the appellant wished to adduce upon a reopening of the inquiry, if it had been permitted, would have gone to the authority of Mr Frank Lavery to give directions to persons working at Hunter & Lavery during the relevant period. This is an issue which had been well and truly canvassed during the hearing and upon which a number of witnesses had been called to give evidence. It is difficult to see why Mr George Grljusich, the appellant's brother, could not have been called on this issue during the course of the inquiry and before the findings and reasons were handed down.

115 Whether the appellant should have had leave to recall Ms Poscay to prove that Ms Lavery had, after the inquiry, contradicted her evidence to the inquiry concerning her father's lack of authority within the business was a matter in the discretion of the Board, having regard to the range of evidence it had received during the inquiry on that topic.

116 Other evidence, if the appellant had been permitted to reopen, would have gone to the question of the appellant's payment for repair work on behalf of Hunter & Lavery, in order to support the appellant's explanation as to why he and Mr Lavery had entered into the agreement that the appellant alleges he made with him. Again, in our view, this issue had been well and truly canvassed in evidence before the Board during the inquiry and we can see no reason why the evidence of Mr Evans from Urban Focus could not have been called prior to the publication of the findings and reasons of the Board.

117 It remains a question of discretion whether a disciplinary tribunal such as the Board should reopen in circumstances such as those before it in this case. We cannot see any basis for concluding that the exercise of the discretion by the Board in refusing the application to reopen miscarried.

118 We agree with the Judge that, in circumstances where the matters in issue, including the questions of credibility of witnesses, were patently obvious to the parties and their counsel in the proceedings before the Board, and the parties had ample opportunity during the hearing, and indeed before the decision was handed down, to apply to call further evidence relevant to the matters in issue, the Board was not obliged to reopen the inquiry after it had handed down its reasons for decision and prior to convening to impose a penalty. We can see no error in the finding made by his Honour in this regard.

119 The fourth ground of appeal is that the Judge erred in law in failing to find that the Board had not prejudged the culpability of the appellant before all of the evidence was presented to it and that such conduct did not give rise to a reasonable apprehension of bias, when the conduct of the board demonstrated that apprehension.

120 We agree fully with what the Judge said at pars 64 - 66 of his reasons in relation to this ground in the course of rejecting it.

121 It is well accepted that a judicial officer should not sit to hear a case if, in all the circumstances, the parties or the public might entertain a reasonable apprehension that the judicial officer might not bring an impartial and unprejudiced mind to the resolution of the question before it: Livesey v New South Wales Bar Association [1983] HCA 17; (1983) 151 CLR 288 at 293 - 294. The same principle applies in respect of a disciplinary tribunal such as the Board.

122 It is worthy of note that no objection or application to the Board to disqualify themselves was made by counsel for the appellant at the time the remarks now challenged by the appellant were made. Ordinarily, one would expect that a party who is legally represented will take any appropriate and well-founded objection at the relevant time and not stand by until final judgment in the matter is known in order to attack the judgment on the grounds of lack of impartiality: see Vakauta v Kelly [1989] HCA 44; (1989) 167 CLR 568 at 577 per Dawson J.

123 We do not think it can be demonstrated that the Judge was in error when he found, in effect, that a fair-minded person would not apprehend that the Board had prejudged the case before it, when one has regard to all of the passages in the transcript relied upon by the appellant, whether taken singularly or in combination. As his Honour commented, it is true that a number of comments by members of the Board suggest an increasing scepticism of the appellant in his evidence, and in the evidence of witnesses called by him, but that is not enough to establish actual or apprehended bias. As his Honour noted, the case was keenly fought, the parties were represented by counsel, blunt comments were made in the heat of proceedings and they were perhaps to be expected. None of them gives rise to a reasonable expectation that the person uttering them as a member of the Board had closed his or her mind to the issues before the Board.

124 For example, the fact that the Chairman of the Board, during the course of evidence of Ms Lavery, asked her whether any "restitution" had been made to her, cannot sustain a claim of actual or apprehended bias that the Chairman had already determined that the appellant was not innocent of the allegations made against him. It simply was, in the circumstances, a request for information as to whether or not the commission or selling fee received by the appellant in respect of each of the three transactions had been repaid in whole or in part to her.

125 Similarly, the comment of the Chairman in which he referred to the appellant as the "other obvious target" in respect of recovery of any funds, is an insufficient remark to found actual or apprehended bias. We accept the submission made on behalf of the respondent that this reference needs to be seen in context. Ms Lavery was giving evidence concerning whether she would take proceedings against the clients for recovery of commissions. The appellant's counsel, in a light-hearted manner, stated that he would give her certain advice to which the Chairman suggested that the appellant's counsel would not be the most appropriate person to advise Ms Lavery. The "target" in this context was the appellant, he being the other person who might be the target of efforts to recover funds from the transaction. The exchange appears to have had a jocular context to it.

126 When Mr Goddard, a member of the Board, thanked Ms Lavery for her patience and "going through all that" and commented that "you must have found it as difficult as I did, some parts of it", no doubt he demonstrated a degree of sympathy for the witness, but that does not convey prejudgment of the case. As his Honour suggested, it may, however, have indicated a growing scepticism concerning the matters in issue from the appellant's point of view.

127 Similarly, comments made by the Chairman suggesting some disbelief of assertions made by the appellant in answer to the complaints, and comments made by the Chairman concerning the evidence of Mr Damjanovich before his evidence were complete, in all the circumstances of this case, whilst perhaps best left unsaid, do not, when considered in context, lead the Court to consider there was any actual or apprehended bias on the part of the Board in the conduct of the inquiry. If anything, the appellant was thereby put on notice that the Board considered the matters in issue remained live and required a full response. Indeed, we think that it might be said of a disciplinary tribunal what Brennan, Deane and Gaudron JJ in Vakauta v Kelly (supra) said at 571 of a trial Judge:

"It seems to us that a trial judge who made necessary rulings, but otherwise sat completely silent throughout an non-jury trial with the result that his or her views about the issues, problems and technical difficulties involved in the case remained unknown until they emerged as final conclusions in his or her judgment would not represent a model to be emulated."

128 The fifth ground of appeal is that the Judge should have found that the penalty imposed by the Board was manifestly excessive and well outside the range of a reasonable discretion. In support of this ground, the appellant contends that:

(1) the spirit of the Real Estate and Business Agents Act is to regulate the conduct of (inter alia) sales representatives with respect to their dealings with members of the public;

(2) the complaint against the appellant related not to any real or threatened detriment or prejudice to any members of the public, but a failure on his part to account to his employer for a sum of approximately $4500 for which his employer has never claimed to be entitled to be reimbursed;

(3) as to penalty, the conduct ought to have been viewed differently from any act of unfairness or dishonesty on the part of a sales representative in dealing with a member of the public;

(4) the conduct of the appellant was not such as to warrant the imposition of such a severe penalty, especially given:

(a) the impeccable honesty with which the appellant had undertaken his work for clients over many years;

(c) the impact which a cancellation of his certificate and permanent disqualification would have on him and his family, given his age and inability to work in gainful employment outside the real estate industry.

129 In refusing to uphold this ground of appeal, the Judge noted that the Board is a specialist tribunal charged by statute with the supervision of an industry and that due weight and respect should be given to its views whether the conviction of a person renders him unfit to carry on practice: Moursellas v Pharmaceutical Council of Western Australia (1992) 10 WAR 240 at 250 per Malcolm CJ. The Judge noted that, in this case, the allegations against the appellant were of a very serious kind and the Board clearly took the view that it was relevant that the appellant had not only lied in denying the charge, but had endeavoured to corrupt others by attempting to induce them to confirm his denials. For those reasons, the Judge expressed the opinion that, while the Board's finding that the appellant had failed to act in the best interests of the Pavlovichs and the Mircos must be set aside, the finding that he had not acted fairly and honestly remained. That being so, he considered the penalty imposed should not be disturbed.

130 The Act does not specifically provide for an appeal against penalty. However, the discretion to impose a particular penalty may be the subject of appeal. Whether or not the exercise of the discretion as to penalty miscarried such that an error is manifest in the decision appealed against is, we think, to be determined by the familiar principles stated in House v The King [1936] HCA 40; (1936) 55 CLR 499 at 505:

"It must appear that some error has been made in exercising the discretion. If the Judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of a discretion is reviewed on the ground that a substantial wrong has in fact occurred."

131 Sometimes the expression "manifestly excessive" is used in relation to the reasons why a sentence imposed by a court is "plainly unjust". This expression or test may also be considered relevant to the exercise of a discretion to impose a penalty under a disciplinary Act.

132 In Dinsdale v The Queen [2000] HCA 54; (2000) 202 CLR 321, at 325 par [6], Gleeson CJ and Hayne J, having made reference to House v The King, stated as follows:

"Manifest inadequacy of sentence, like manifest excess, is a conclusion. A sentence is, or is not, unreasonable or plainly unjust; inadequacy or excess is, or is not, plainly apparent. It is a conclusion which does not depend upon attribution of identified or specific error in the reasoning of the sentencing Judge and which frequently does not admit of amplification except by stating the respect in which the sentence is inadequate or excessive. It may be inadequate or excessive because the wrong type of sentence has been imposed (for example, custodial rather than non-custodial) or because the sentence imposed is manifestly too long or too short."

133 The question raised by this ground of appeal is whether the Board's exercise of its discretion to impose the penalty it did, miscarried because it was excessive.

134 Under s 103(3) of the Act, where, after inquiry, the Board finds that proper cause exists for disciplinary action of a sales representative, the Board may do any one or more of the following things:

(c) suspend or cancel his registration and, in addition, disqualify him or her either temporarily or permanently, or until the fulfilment of any condition which may be imposed by the Board or until the further order of the Board, from being registered.

135 The Board, as in the case of other disciplinary tribunals, is given the power to discipline, not to punish persons who breach professional, business or occupational standards, but to protect the public. This is evident not only from authority, but from the terms of the Act itself. For example, s 103(5)(a) of the Act provides, amongst other things, that, where the Board suspends or cancels a licence, the suspension or cancellation shall take effect immediately and is not deferred pending an appeal unless the District Court otherwise orders, which it may do if it thinks fit, subject to such conditions "as it may impose to protect the public". Where a person is found not to be a fit and proper person to carry on a particular calling, it is necessary to determine what penalty is required to meet this end.

136 In this regard, it must be noted that, by s 47(1)(b) of the Real Estate and Business Agents Act, a sales representative may hold a certificate of registration under the Act if the Board is satisfied that he or she is a "person of good character and repute and a fit and proper person to hold a certificate of registration".

137 In Ziems v The Prothonotary of the Supreme Court of New South Wales [1957] HCA 46; (1957) 97 CLR 279, the Supreme Court of New South Wales removed a barrister's name from the roll of barristers of New South Wales on the ground of his conviction for manslaughter and sentence to two years' imprisonment with hard labour following a motor vehicle accident. In the High Court, the barrister's appeal was allowed by a majority (Fullagar, Kitto and Taylor JJ, each of whom wrote a separate judgment) and he was, instead, suspended from practice during the continuance of his term of imprisonment. Dixon CJ and McTiernan J dissented in the result. However, each of the Judges addressed the question of the appropriate penalty to be imposed for the personal misconduct of the barrister by reference to whether or not he was "fit and proper" to practise as a barrister by reason of his conviction and imprisonment.

138 In Ziems (supra), Fullagar J, at 290, accepted that there would be an incongruity if, while the barrister was serving a sentence of imprisonment, he was also entitled to hold the status of a barrister. His Honour accepted what had been said by Owen J in the New South Wales Supreme Court that, if it were permitted, the Court would be holding out the barrister to members of the public "as a fit and proper person to act for them in legal matters" while he is serving a gaol sentence. Similarly, Kitto J, at 298, stated:

"If a barrister is found to be, for any reason, an unsuitable person to share in the enjoyment of those privileges and in the effective discharge of those responsibilities, he is not a fit and proper person to remain at the Bar."

139 Dixon CJ, while dissenting in the result, also accepted that the function of a disciplinary penalty is not to punish the errant party, but to maintain standards. Dixon CJ, at 286, observed:

"The jurisdiction the court exercises has nothing to do with punishment. The purpose of the power to remove from the roll of barristers is simply to maintain a proper standard, and that is a necessarily high standard, for the Bar is a body exercising a unique but indispensable function in the administration of justice."

The Chief Justice found no "sufficient reason" for interfering with the order of the Supreme Court. However, it is worthy of notice that the Chief Justice also observed, at 286, that:

"I may add, too, that I think that it is open to the Supreme Court to suspend a barrister from practice: see In re Spensley (1864) 1 WW & a'B(L) 173. But, even so, it is probably a better course in most cases where room exists for the belief that time may give the barrister a title to resume his place at the Bar to allow him to re-apply at a subsequent time and offer positive evidence of the grounds upon which he then claims to be re-admitted."

140 In The New South Wales Bar Association v Evatt [1968] HCA 20; (1968) 117 CLR 177, decided some 11 years after Ziems, the High Court dealt with an appeal against the suspension of a barrister from practice for a period of two years for professional misconduct. The Bar Association considered the suspension to be an inadequate form of penalty for the misconduct complained of. The Court (Barwick CJ, Kitto, Taylor, Menzies and Owen JJ) held there was ample material to support a finding of professional misconduct where the barrister had actively assisted in and facilitated a systematic course of action whereby two solicitors charged extortionate and grossly excessive sums as costs to lay clients. The Court also concluded that the finding compelled the conclusion that the barrister should be disbarred, not suspended from practice for a period.

141 The Court, in finding that disbarment was required, emphasised the unfitness of the respondent to practise his profession. The Court, at 183, stated:

"The Supreme Court was, however, in error in not appreciating that its findings of misconduct demonstrated the unfitness of the respondent to be a barrister, and compelled the conclusion that he should be disbarred. The facts proved and found demonstrated unfitness to be a member of the Bar - not some isolated or passing departure from proper professional standards amounting to something less than proved unfitness."

142 The Court observed that the Supreme Court thought that, as the exercise of its disciplinary powers was, to some extent, a punishment for wrongdoing, mercy might be shown towards a young man who had not understood the error of his ways. However, the Court, at 183, made it plain that:

"The power of the court to discipline a barrister is, however, entirely protective, and, notwithstanding that its exercise may involve a great deprivation to the person disciplined, there is no element of punishment involved. ... The respondent's failure to understand the error of his ways of itself demonstrates his unfitness to belong to a profession where, in practice, the client must depend upon the standards as well as the skill of his professional adviser."

143 In The Registrar, Real Estate and Business Agents Supervisory Board v Barnett, unreported; FCt SCt of WA; Library No 970426; 26 August 1997, the Full Court of this Court considered whether the respondent, whose real estate and business agent's licence had been cancelled on account of eight breaches of trust accounts rules under the Act, was a "fit and proper" person to be registered as a sales representative under the Act. The Court found he was not. While not a decision directly concerning the appropriateness of a penalty, the Court's observations concerning the requirement that a person be "fit and proper" to obtain registration are relevant here.

144 In this regard, Kennedy J, with whose reasons Parker J agreed, endorsed what was said by Hale J in Maxwell v Dixon (1965) WAR 167 at 169 that:

"It is true that 'fit and proper' must be interpreted in the light of the subject-matter of the Act in which the expression appears. It, and the equivalent 'suitable', appears in a wide variety of licensing Acts, and it normally comprises the three characteristics of honesty, knowledge and ability: Hughes & Vale Pty Ltd v NSW (No 2) [1955] HCA 28; (1955) 93 CLR 127 at 156 - 157. Clearly different qualifications are needed by eg lawyers, transport operators, hotel keepers and land agents, but as is shown by the cases cited in the judgment referred to, it is not necessary to confine oneself to the special provisions of the Act in question in deciding whether a man is fit provided one gives weight only to matters which can fairly be seen to be relevant to the vocation in issue."

145 Kennedy J also endorsed what was said in Sobey v Commercial and Private Agents Board (1979) 22 SASR 70 at 76 by Walters J, that:

"The issue whether an appellant has shown himself to be 'a fit and proper person', within the meaning of s 16(1) of the [Commercial and Private Agents Act], is not capable of being stated with any degree of precision. But for the purposes of the case under appeal, I think all I need to say is that, in my opinion, what is meant by that expression is that an applicant must show not only that he is possessed of a requisite knowledge of the duties and responsibilities devolving upon him as the holder of the particular licence under the Act, but also that he is possessed of sufficient moral integrity and rectitude of character as to permit him to be safely accredited to the public, without further inquiry, as a person to be entrusted with the sort of work which the licence entails (cf Ex parte Meagher (1919) 19 SR (NSW) 433, at 442)."

146 Kennedy J identified the breaches of the trust account rules committed by the respondent to be serious. The question was whether they should result in the Court considering the respondent not "fit and proper" immediately thereafter to be registered under the Act as a sales representative. The Board rejected the application for registration on this ground. However, on an appeal to the District Court, a Commissioner upheld the appeal. In the light of evidence led, the Commissioner held that, on the balance of probabilities, it was unlikely the respondent would commit further breaches of the Act. Kennedy J found, however, that the Commissioner failed to make a sufficient analysis of the respondent's conduct which had led to the cancellation of his agent's licence and that the Commissioner placed too much weight upon the references and evidence of a number of close friends, some of whose attitudes towards the many breaches of the Act committed by the respondent he found "surprising". Kennedy J noted that it was not a case of some isolated instance or instances. The respondent had committed some 150 breaches of the Act over a significant period of time and he knew that when he withdrew the amounts in question totalling some $30,344 he was not entitled to do so.

147 Kennedy J also noted what was said by Walsh JA in Ex parte Tziniolis; Re Medical Practitioners Act ( 1967) 67 SR (NSW) 448 at 461, albeit in somewhat different circumstances:

"One cannot assume that a change has occurred merely because some years have gone by and it is not proved that anything of a discreditable kind has occurred. If a man has exhibited serious deficiencies in his standards of conduct and his attitudes, it must require clear proof to show that some years later he has established himself as a different man."

This dicta is redolent of what Dixon CJ said to similar effect in Ziems (supra) concerning the possible entitlement of a person who has re-established himself to apply later to be re-registered.

148 In relation to the present appeal, the Judge in the District Court considered there was no error shown in the approach taken by the Board in assessing what penalty was appropriate. His Honour noted that the Board was convinced that the appellant was "incapable of attaining a personal standard of integrity which is essential" for a person to operate as a sales representative in the real estate industry.

149 As we have noted, under s 103(3)(c) of the Act, it was open to the Board, following its inquiry and finding that the appellant was guilty of breaches of the Code of Conduct, not only to cancel the registration of the appellant as a sales representative and to disqualify him permanently, but also to consider alternatives to permanent disqualification. For example, the Board had available to it the options of disqualifying the appellant from registration for a period of time, or until he had fulfilled conditions imposed by the Board, or until further order of the Board.

150 It seems that the Board considered that no disqualification from registration other than permanent disqualification was appropriate. The Board expressly acknowledged that it was a serious matter to eliminate the appellant from an industry in which he had been active for many years. The particular factor which appears to have led the Board to decide that there must be a permanent disqualification from registration was its conviction that the appellant "is incapable of attaining the personal standard of integrity which is essential."

151 The appellant says that the penalty imposed was, in all the circumstances, manifestly excessive. It is submitted on behalf of the appellant that a penalty short of cancellation of registration, such as a modest fine, would have been sufficient in the circumstances.

152 We have no doubt, having regard to the nature of the misconduct found against the appellant, that a penalty involving cancellation of his registration as a sales representative was called for. The appellant had been found guilty of three breaches of the Code of Conduct which involved the retention of commissions due to his principal. His misconduct indicated a preparedness on his part to act outside the Code of Conduct which governs the conduct of agents, sales representatives and business agents alike. Members of the public are entitled to know, without further inquiry, that a sales representative who acts on their behalf always adheres to the Code of Conduct. By his conduct, the appellant disentitled himself to the public trust he had hitherto enjoyed.

153 Additionally, when called before the Board, the appellant was prepared to be untruthful about matters in issue. While he continues to deny this conduct, the findings of the Board plainly were open to it and we can see no reason to find that the Judge or the Board erred in that regard. In saying this, we are mindful that it is particularly important in disciplinary cases, where the honesty and candour of persons assume special significance, that the distinction between the rejection of a person's evidence and a positive finding that he or she deliberately lied be observed: Smith v New South Wales Bar Association (supra) at 268 per Brennan, Dawson, Toohey and Gaudron JJ. However, this is not a case where the Board has simply not accepted the evidence of the appellant; it has justifiably found him to have been "untruthful".

154 The conduct of the appellant thus established his present unfitness to practise as a sales representative registered under the Act. The Board appropriately considered that the appellant's registration must be cancelled.

155 However, the further question arises whether, following cancellation of the appellant's registration, his permanent disqualification from registration as a sales representative was also called for, or whether some lesser form of disqualification was appropriate.

156 The Board found that the permanent disqualification of the appellant from being registered as a sales representative was required. The Board implicitly found that the appellant's breaches of the required standards governing sales representatives were such that the appellant was incapable of re-establishing himself at any time in the future. The Judge in the District Court appears also to have accepted this view. We are not satisfied that this view was reasonably open to the Judge and the Board in the circumstances and on the materials for it.

157 The circumstances in which the appellant was required to suffer a penalty are not in dispute. On three separate occasions he secreted commissions due to his principal and either kept them for himself or, on one occasion, shared the commission with another sales representative. The commissions that he kept but was not entitled to were in the order of $4750. It is also plain that his dishonest conduct has not resulted in any person other than the licensee suffering any financial loss. In some cases, the persons who paid the commissions did so at a reduced sum. The licensee does not, in fact, expressly complain about the appellant's conduct which has caused her to suffer some financial loss.

158 It might be observed that the total commissions secreted by the appellant, some $4750, is not itself an exorbitant sum. However, in many circumstances it is the nature of the conduct and not necessarily the amount involved that results in opprobrium being expressed by a disciplinary tribunal. Nonetheless, we think that, in a case such as the present, it is not irrelevant to have regard to the amount in question and it is not irrelevant to have regard to the fact that no person complains about a financial loss.

159 The dishonest conduct of the appellant in keeping the commissions was plainly compounded by the manner in which he conducted his defence of the inquiry in the Board. He put forward a story to explain his conduct which the Board rightly found incredible. As we have said, the Board not only rejected the evidence of the appellant, but found him to have been untruthful. We think its findings in that regard are uncontestable.

160 The question is whether the dishonest conduct of the appellant in keeping the commissions, relatively small as they were in total, together with his untruthfulness at the inquiry mean that he is a person who is incapable of re-establishing himself as a person fit for registration under the Act in due course.

161 In answering that question, not only must the circumstances surrounding his conduct in keeping the commissions and in answering the questions raised in the inquiry be taken into account, but so also should the materials provided to the Board on behalf of the appellant in support of his plea in relation to penalty. Those materials included many references attesting to the professionalism of the appellant as a sales representative over many years and his former good character.

162 In our view, the nature and extent of the appellant's misconduct revealed by the inquiry before the Board, taken with the findings of untruthfulness concerning his evidence before the Board, as we have said, require that his current registration be cancelled. However, this misconduct does not involve such a breach of public trust that it should be thought the appellant is incapable of re-establishing himself over a period of time. The many professional and character references supplied to the Board strongly support the view that the appellant is, indeed, capable of re-establishing himself over a period of time.

163 We consider the object of the Act, in making available disciplinary penalties that will protect the public, would adequately have been met by the penalty of cancellation of the appellant's registration as a sales representative and his disqualification from being so registered for a period of five years from the date of the Board's determination as to penalty. The penalty of permanent disqualification was excessive.

164 For these reasons, we consider that the Judge in the District Court erred in finding that the Board did not err when it cancelled the appellant' registration and permanently disqualified him from registration as a sales representative under the Act.

165 The Court has therefore concluded that it should exercise the powers available to it under s 23(3) of the Act and to allow the appeal in part, quash the penalty order made by the Board and substitute for that penalty order an order that the registration of the appellant as a sales representative be cancelled and that he be disqualified for a period of five years from 19 September 2000 from being registered under the Act. At the end of that period, it will be necessary for the appellant to apply to the Board for re-registration. In considering any such application, it will be open to the Board, under s 50(2) of the Act, also to consider whether any special conditions should be imposed on a certificate of registration.