Kutup v Commissioner for Fair Trading

Legislative scheme

1. On 23 March 2020, the Property and Stock Agents Act 2002 (Act) commenced and provides for the licensing, regulation, and discipline of individuals, and corporate or other entities, carrying on a business in the real estate industry under grant of a licence or certificate of registration. The provisions of the Act and regulations are intended to regulate the industry and to provide a measure of protection to consumers in their dealings with the industry. The Act introduced significant changes to the requirements to hold a real estate agent licence and brought in Class 1 and 2 categories and provisions relating to the extension of time to restore a licence under the Act.
2. Section 8(1)(a) of the Act states that a person cannot act or carry on the business of a real estate agent unless the person is the holder of a real estate agent's licence.
3. Section 14(1)(c) of the Act states that a person is eligible to hold a licence only if the Secretary is satisfied that the person has the qualifications required for the issue of the licence or class of licence. Section 15(4) of the Act states a person does not have the qualifications required for the reissue or restoration of a licence or certificate of registration (as provided by s 26) if the person failed to comply with any condition of the licence or certificate of registration that required the holder to undertake professional development, continuing education, or a course of study, unless the Secretary otherwise determines in a particular case. Section 19 of the Act states that an application for a licence must not be granted unless the applicant is eligible to be granted the licence or certificate of registration concerned (as provided by s 14).
4. Section 25A(1) of the Act provides the time period for restoration of a licence. Application for restoration of a licence must be made: (a) within 3 months of the expiry of the licence, or (b) within the further period determined by the Secretary on the application of the person seeking restoration of the licence.
5. Under s 25A(2) of the Act the Secretary may extend the period within which an application for the restoration of a licence may be made if the Secretary is satisfied that: (a) in a case where the application failed to apply for renewal before the licence expired - the failure to apply for renewal of the licence before it expired was due to inadvertence, or (b) it is just and equitable to restore the licence.
6. Section 25A(5) states that a licence restored at any time is taken to have been restored from the day on which the licence expired.
7. Section 26(6) of the Act states if an application for the restoration of an expired licence is duly made, anything done by the holder of the expired licence between its expiry and the determination of the application for restoration (whether the application is granted or refused) is taken to have been done as the holder of a licence, except for the purposes of ss 8(1), 9(1) and 10.
8. The Tribunal has jurisdiction to review the Respondent's decision in relation to the restoration of the Applicant's licence : s 27(a) of the Act.

Issues

1. In the ordinary course, where a licence has expired, the time to seek restoration of the licence is within 3 months of the expiry of the licence: s 25A(a)(i) of the Act. The Applicant's application was made almost a year after his licence expired. Section 25A(2) of the Act provides that the time for seeking restoration may be extended if the failure to apply for renewal before the licence expired was due to inadvertence, or if it is just and equitable to restore the licence.
2. Consequently, the issue for the Tribunal is whether: 1. the Applicant's failure to apply for renewal of his licence within 3 months of its expiry was due to inadvertence? or 2. it is just and equitable to restore the Applicant's licence?

Tribunal approach

1. Section 63 of the Administrative Decisions Review Act 1997 (ADR Act) provides that in determining an application for review the Tribunal is to make the correct and preferable decision having regard to the material before it, and any applicable written or unwritten law. It is well established that the Tribunal is not restricted to a consideration of the material that was before the decision-maker, but may have regard to any relevant material before it at the time of the review: Shi v Migration Agents Registration Authority [2008] HCA 31. Under s 28(2) of the Civil and Administrative Tribunal Act 2013 (CAT Act) the Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice: s 38(2) of the CAT Act. The Tribunal makes its own decision in place of the Commissioner's, and there is no presumption that the decision of the Commissioner is correct: McDonald v Director General of Social Security (1984) 1FCR 353 at 357. The standard of proof that applies in these proceedings is the civil standard, that is, on the balance of probabilities. There is no onus of proof: Nakad v Commissioner of Police, New South Wales Police Force [2014] NSWCATAP 10 at [28]- [34].

Evidence

1. I had before me documents filed under s 58 of the ADR Act. The Applicant provided no evidence other than that filed with his application for review, although he gave evidence and was cross-examined. I also asked him questions.
2. In his evidence the Applicant said he had worked in real estate since about 2001, on the "administrative side" until about 2018, after which he applied for, and was granted from 13 March 2019, a real estate agents licence in sales and leasing, which was due to expire on 11 March 2020. The licence was forwarded to him under covering letter of 12 March 2019, sent to his then home address. The licence noted the expiry date of 11 March 2020 in bold. Similarly, the covering letter noted the expiry date in bold. The letter explained that a renewal form would be sent to him about 4 weeks before the expiry date and that, if he did not receive it, the onus was on him to request another copy. The letter noted that if he did not renew his licence by the expiry date he had only 3 months in which to seek restoration of his licence. I observe that a licensee is obliged to display details of the licence at the place of business: s 29 of the Act. He could not recall if it was in fact displayed at the office.
3. The Applicant said he became the licensee-in-charge of EK Property Group Pty Ltd (EK), a company which is owned by his son, Eren, and he became a director of the company. On 20 May 2019 EK nominated the Applicant as the licensee-in-charge and applied for a corporate real estate licence which was granted on 16 August 2019 and was to expire on 15 August 2020. The licence was forwarded under covering letter of 16 August 2019 to the company's place of business. The licence noted the expiry date of 16 August 2019 in bold. Similarly, the covering letter noted the expiry date in bold. This letter also explained that a renewal form would be sent to the company about 4 weeks before the expiry date and that, if it was not received it, the onus was on the company to request another copy. The letter noted that if the company did not renew its licence by the expiry date it had only 3 months in which to seek restoration of the licence.
4. The Applicant lodged a change of address form dated 12 September 2019 with the Respondent. He notified the Respondent of a change to his contact details as follows:

• Email address (including for renewals): a [specified] email address which included his son's first name
• Correspondence: a [specified] PO Box at Fairy Meadow NSW 2519
• a [specified] mobile telephone number
• a [specified] residential address in Fairy Meadow

1. The Applicant said that he was "on the road" a lot and hence had provided his son's contact details for email and phone. In his evidence he said that the specified residential address was his own.
2. Following the notification, on 23 September 2019, the Applicant was issued with an amended licence, again with the expiry date of 11 March 2020 noted in bold. Similarly, the covering letter dated 24 September 2019 noted the expiry date in bold. The letter explained, as before, that a renewal form would be sent to him about 4 weeks before the expiry date and that, if he did not receive it, the onus was on him to request another copy. Again, this covering letter noted that if he did not renew his licence by the expiry date, he had only 3 months in which to seek restoration of his licence.
3. The Applicant's son emailed the Respondent on 23 September 2019 seeking to correct some information that appeared on the issued corporate licence. He provided the above email address and the same mobile number.
4. The company, the Applicant said, shared premises in Wollongong with the Applicant's brother's Century 21 real estate franchise, trading as Ultimate Wollongong. The Applicant gave evidence about difficulties experienced by EK which, he said, were brought about by misconduct by his brother, who was subsequently prosecuted for his activities, served a period in prison and was bankrupted. The Applicant said his brother had fraudulently claimed he had sold numerous properties and as a result would be entitled to the commission. EK itself was, he said, caught up in his brother's activities causing significant financial distress. In about September, October or November 2019, the Applicant said, a Receiver and Manager was appointed to EK by a company who his brother had defrauded. Consistent with his evidence, according to records publicly available, on 25 September 2019, ASIC was informed of the appointment of a Receiver and Manager to EK. The Applicant gave evidence that he had little to do with the Receiver and Manager, and did not know who had been appointed. His evidence was that they were "locked out" of the premises and "they" seized "everything", including laptops and phones.
5. The Applicant said he understands 6 claims had been made to the Department of Fair Trading against EK. He said that the Department was "chasing [his] brother", but there was no further information from either party about this.
6. On 5 February 2020, the Respondent sent to the above email address a courtesy renewal notice for the Applicant's licence, which, the Applicant said, was his son's email. An SMS was also sent to the specified mobile number, which the Applicant said was the company's phone which was used by his son. Because everything had been seized, he said, neither of these notifications was received. He denied that he had any contact or liaison with the Receiver and Manager during the period the company was in administration.
7. On 10 February 2020, a courtesy renewal notice for the Applicant's licence was mailed to the Applicant at the specified Fairy Meadow PO Box. The Applicant said that the mailbox was only used for receiving contracts from developers, and as there was no work due to COVID and because the Receiver and Manager had been appointed, he did not check it.

• he would like to renew his licence under the Better Regulation Reforms
• the licence was not renewed on or before the due date of 11 March 2020 as he had ceased operating due to COVID-19
• during the past 12 months his business had experienced a huge downturn and due to this he had no option but to cease trading
• now that the pandemic is almost over, he is now ready to start a new venture

1. The Applicant's submission was that the fraud investigation, the closure of the business by administrators, followed by COVID, caused him to inadvertently overlook the renewal. He submitted that he had not in fact "ceased trading" as he had written in the email accompanying his renewal application and he was implying was that he was not working during COVID. This did not mean that he did not want his licence, nor had he deliberately decided not to renew it, as he needs a licence to earn an income.
2. At the hearing it was discussed, that in his application for restoration the Applicant failed to answer correctly the question: During the last 12 months that you held the licence were you, or are you now, a director or person concerned in the management of ANY externally-administered corporation/body corporate (within the meaning of the Corporations Act 2001)? When this was brought to his attention in the course of cross-examination he said it was an oversight and it was not intentional.

Was the Applicant's failure to apply for renewal of licence within 3 months after it expired due to "inadvertence"?: s 25A(2)(a) of the Act

1. The term "inadvertence" is not defined in the Act. However, it has been judicially considered to include "failure to advert to or understand the requirement for registration within the specified period, and innocent error in the sense of failure to register through ignorance of the legal requirement to do so, or of the consequences of not doing so.": see In the Matter of Accolade Wines Australia Limited and other companies [2016] NSWSC 1023 at [15].
2. The Applicant denied that he had intentionally allowed his licence to lapse. He sought to draw an analogy - that in not owning a car, that does not mean that someone would relinquish their driver's licence.
3. He said it was the company that had ceased trading and because of COVID he did not work. Hence, it was inadvertent that that he failed to know of the status of his licence renewal and since he did not have access to his emails or mobile, he had "no way of knowing".
4. I accept that the Applicant, when he obtained his licence, was informed by the Respondent that the expiry date was 11 March 2020, and that he would be provided with the necessary form for renewal approximately four weeks before that date. Further, he was informed that if he did not receive this form two weeks prior to the licence's expiry date, the onus was on him to contact Fair Trading to request another copy of the form. That information was repeated on 24 September 2019 following the Applicant's update of his information. I consider the Applicant was well informed about the expiry date of his licence and knew or should have known that it was his responsibility to renew it.
5. Also, when the company's licence was granted in August 2019 information was again provided about the expiry date of that licence and the renewal procedure. In my view, it is not unreasonable, in the context of arranging the company's business affairs, that the Applicant would have, or should have, turned his mind to when his personal licence expired, given that he was the nominated licencee-in-charge of the company for the purposes of its real estate licence. In any event the provision of a licence to the company should have served to remind the Applicant of the renewal process.
6. I accept that in about September 2019, a Receiver and Manager was appointed to EK, and observe that this was about the time that the Applicant changed his contact details. The Applicant provided no evidence that the Receiver and Manager would not allow him access to his emails and telephone for work purposes of renewing his licence. His evidence was that when the Receiver and Manager was appointed "everything" was seized but it is unclear if these "investigators" were associated with the Receiver and Manager or the Police. While it may be that the business' equipment was seized, I have difficulty accepting that the Applicant did not know who had been appointed, nor that he had much to do with the Receiver and Manager.
7. I also accept that on or about 5 February 2020 the Respondent notified the Applicant at the email address and telephone address he had provided as his contact details in September 2019. If the appointment of the Receiver and Manager ended early this year or possibly November/December last year, as the Applicant claimed, it was at that time that the laptops and the phone which his son used were likely to have been returned. If that is correct, then the Applicant was on notice of the need to renew his application by virtue of the Respondent's email and SMS notification, at the latest, by early 2021 or, possibly even, on his evidence, November or December 2020, although the appointment of the Receiver and Manager may have ended as early as August 2020. No action was taken by the Applicant to seek to restore his licence until 1 March 2021.
8. I also accept that on 10 February 2020 a renewal notice was sent to the Applicant's nominated mail box while the company was under administration. The Applicant did not deny that he had ongoing access to the mail box, saying instead that it was only used for receiving contracts from developers. I find this claimed limited use to be implausible, noting too, that was the nominated postal address with the Respondent for both the company and himself which he provided at about the same time as the Receiver and Manager was appointed. Further, he said, as there was no work due to COVID and because the Receiver and Manager had been appointed he did not check the post box. Had he done so, he would have seen the renewal notice in February or March 2020, and certainly, within 3 months after the expiry date. It is clear that the Applicant received the renewal form, as he applied for a restoration using this form on 1 March 2021. I do not accept that his access to the mail box only occurred a short time before the lodgment of his application for restoration.
9. The Applicant was obliged to display details of his licence at the place of business: s 29 of the Act. He could not recall if it was in fact displayed at the office. Had he done so, this would have served as a daily reminder of the expiry date of his licence. If, as he claims, he was "locked out" of the premises, the licence would not have been visible only for the duration of the company's administration, which even on the Applicant's evidence, ended well before the date he applied for restoration.
10. The Applicant claimed that a licence was critical to his ability to work. If that were the case, he is, in my view, likely to have kept track as to when his licence expired, which would impact his ability to work to work in his chosen industry.
11. I do not consider it the Applicant's failure to apply for renewal of his licence within 3 months of its expiry was due to inadvertence.

Is it "just and equitable" to restore the Applicant's licence?: s 25A(2)(b) of the Act

1. The Applicant submitted that his livelihood depends on him having a real estate licence, and I have discussed at [38] my concerns in that regard.
2. The Respondent submitted that is not "just and equitable" to restore the Applicant's licence having regard to the statutory requirements applied to licence holders. Section 25A(5) effectively permits backdating of a licence to the date on which it expired. The Respondent submitted that it would not be just and equitable to backdate the licence to 11 March 2020 in circumstances when the Applicant was not employed by another corporate licensee and had let his licence lapse. The Respondent submitted that to grant a restoration in such circumstances would circumvent the Property and Stock Agents (Qualifications) Order 2019 (Order) which has new requirements for a person to become a Class 1 real estate agent; the Order sets out the qualification and experience requirements for Class 1 licensees: see cls 9 and 10 of the Order.
3. The Respondent submitted that, as the Applicant was not working in 2020/21, there is no reason for him to have his licence restored to cover the period he was not working. I do not accept this to be a valid argument against restoration of a licence. As far as I can see, there is no obligation on a licensee to in fact utilise their licence.
4. The Respondent also submitted that to backdate the Applicant's licence would also make the Respondent's register of licensed persons during this period incorrect. I reject this contention because s 25A(5) of the Act specifically allows for backdating of a person's licence to the date it had expired. The inevitable inaccuracy of the register is a consequence of the provision.
5. I observe that in his restoration application the Applicant failed to advise that he was (or had been) a director or person concerned in the management of a company subject to administration. He claimed the error was an oversight. I find that explanation to be implausible. The Applicant's evidence was that the appointment of a Receiver and Manager to the company had been stressful and had had a significant impact on the business, and that on his evidence, the appointment had only fairly recently been terminated. In those circumstances I find it is unlikely that the receivership would have slipped his mind. The only other logical explanation for the incorrect statement would be carelessness, which I consider to be an unacceptable excuse. The Applicant failed to answer correctly the clearly worded and unambiguous question. The purpose of the Act is for the functioning of a proper system of licensing of those involved in the real estate industry, which necessarily depends on applicants providing true and correct information in a comprehensible manner: see Leatham v Commissioner of Police [2021] NSWCATAD 121 and Kogias v Commissioner of Police [2020] NSWCATAD 297 in the context of the Firearms Act 1996.
6. "Just and equitable" is not defined in the Act. In Hamdan v Commissioner for Fair Trading [2016] NSWCATOD 6 at [87] Dr Lucy Senior Member discussed the expression in the context of the licence restoration provisions of in the Home Building Act 1989 as it stood in late 2014: 87. … it would appear to be unjust for the licence to be restored in circumstances where other people, who provided correct information on their application forms at the same time, would have been refused a licence.
7. The Applicant signed the change of his contact details on 12 September 2019, at about the same time as the Receiver and Manager was appointed to the company. It was open to him, on the seizure of all the company's equipment to change that information again, so as to ensure continued contact with the Respondent, but he chose not to do so.
8. In all the circumstances, I do not consider it to be just and equitable to restore the Applicant's licence.
9. Accordingly, I consider that the correct and preferable decision is to affirm the decision of the 17 May 2021 to refuse to restore the Applicant's Real Estate Agent's licence.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 03 September 2021