The Applicant did not provide any further documents other than what she had supplied to the Respondent for the purposes of the internal review, and which were therefore already available to me in the s 58 documents. She said she did not have time to do make further submissions, because her child is seriously ill. I confirmed that she wished, nonetheless, to proceed with the hearing of her application for review.
The Applicant obtained a Certificate of Registration (now called and Assistant Agent in Real Estate) on 7 April 2006, which, it would appear, entitled her to work in a real estate agent's office. She "upgraded" to a licence on 7 April 2018.
In her evidence the Applicant said that she had worked in the real estate industry for over 14 years, but has no formal qualifications. She has worked with her present employer for over 4 years, and is described as a "senior property manager". She commenced there as "team leader for property management" and was engaged to manage the rental aspect of her employer's business; another manager oversees the sales aspect of the business. She sometimes "helps out" in sales, if necessary. Her employer, the principal of the real estate agency, has overall control.
Other than herself, she manages a staff of 3 - 2 property officers and a receptionist. As office manager (rentals), she deals with any complaints by landlords or tenants that are unable to be resolved by the property officers. On only a "handful" of occasions has she been unable to resolve a complaint and the matter has required escalation to the principal. At the end of each month she organises payment to landlords and manages the invoices associated with the rental properties. She said that the principal "signs off" as he is the only cheque signatory. There have been occasions when settlement funds have needed to be electronically transferred and she is entrusted by the principal with the token code in order to make the transfer. As to hiring and firing of staff, she said she culls and short-lists applicants and then interviews with the principal, but, as he is owner of the business, the final decision is his.
She wrote that at the time of obtaining the licence, she was not aware that later she would not be able to further "upgrade" the licence within two years. Furthermore, prior to 23 March 2020 she said she would have been able to become a licensee-in-charge without "any hassle". She complained that the current "red tape" was "non-existent during [her] 14 years in real estate".
She wrote that she is currently facing financial hardship due to her current employer facing financial issues caused by COVID-19 and she is seeking to work on her own to provide a steady income, having established her own client base.
In her request for an internal review the Applicant referred to cl 23 of the Order (although that clause does not relate to class 1 licences). She asked the Respondent to show compassion and recognise there are circumstances that sit outside the "Guidelines". In particular, she observed that the application was refused due to her current licence being 16 days short of the 2 year period requirement.
[2]
Consideration
Section 19 of the Act provides, relevantly, that an application for a licence must not be granted unless an applicant is eligible to be granted the licence, as provided by s 14 of the Act. Section 14(1)(c) states that a person is eligible to hold a licence only if the Secretary, and hence the Tribunal on review, is satisfied that the person has the qualifications required for the issue of the licence or class of licence. The qualification requirements are those set out in the Order. I turned to consider if the Applicant met those qualification requirements in relation to a class 1 licence. As the current holder of what is now a class 2 licence, the Applicant must satisfy either Pathway 2 or 3 (cl 10(3) and cl 10(4) of the Order, respectively) to be eligible to be granted a restricted class 1 licence.
[3]
Pathway 2
As to Pathway 2 the Applicant had not held a class 2 real estate agent's licence with a relevant restriction condition for at least 2 years, nor had she been issued with a relevant diploma from a registered training organisation: cl 10(3)(a) and (c), respectively. As to cl 10(3)(b), the work experience criteria are defined in cl 8 as the completion of experience (to the satisfaction of the Secretary) of all tasks listed in Part 1 of Schedule 1, and at least 8 tasks listed in Part 2 of Schedule 1 of the Order. There was no direct evidence that the Applicant had satisfactorily completed the class 1 work experience requirements, as defined, during a 2 year period. I acknowledge that obtaining verification from her present employer may be problematic. While I accept the Applicant has had a very responsible role for at least 4 years, and probably longer, I observe that the requirements are very specific. The Applicant gave evidence which would satisfy me that she had met at least some of the Part 1 requirements, it is less clear whether she had met them all. In all likelihood, she has satisfactorily completed at least 8 tasks listed in Part 2, especially insofar as it relates to leasing.
Unfortunately, whether the Applicant has the requisite work experience is ultimately unhelpful: an applicant must satisfy all the requirements of cl 10(3) in relation to Pathway 2, and the Applicant, as observed above, cannot do so. Accordingly, the Applicant has not met the qualification requirements under Pathway 2 of the Order for issue of a class 1 licence.
[4]
Pathway 3
Pathway 3 is more relevant to the Applicant's circumstances because it contains transitional provisions which relate to persons who currently hold a licence. In particular, it offers some alternatives to the strict new rules set out in Pathway 2.
There was no dispute that the Applicant holds a class 2 real estate agent's licence with the relevant restriction condition: cl 10(4)(a), nor that she had applied for the class 1 licence with the relevant restriction condition within 12 months after the Order commenced: cl 10(4)(b). The Applicant conceded that immediately before the commencement day she had not held a real estate agent's licence for at least 2 years, having fallen short by some 16 days: cl 10(4)(c)(i). Although the Applicant is able to meet the requirements of cl 10(4)(a) and (b), she is unable to meet the qualification requirement under Pathway 3 to be eligible for a class 1 licence under cl 10(4)(c)(i).
I turned then to consider cl 10(4)(c)(ii), which, itself, contains 2 alternatives for an applicant who, immediately prior to the commencement day held a held a real estate agent's licence, for an unspecified period, which necessarily includes a period of less than 2 years.
[5]
Did the Applicant "carry on business under the licence"? - the first alternative
Turning to the first alterative in cl 10(4)(c)(ii), the Respondent, in its submissions, said that the provision did not apply because the Applicant did not carry on a business. This is in fact a misquote. Clause 10(4)(c)(ii) requires that the Applicant have held a real estate agent's licence and carried on business under the licence. When this was alternative was discussed at the hearing, the Respondent submitted that because the Applicant was not the owner of the business where she worked, she was not "carrying on business". "Carried on business" is not defined in the Act, the Regulation or the Order.
I turned to consider if the Corporations Act 2001 (Cth) provided some assistance as to the meaning of "carried on business". Only s 18, in the context of "carrying on business: otherwise than for profit", makes a distinction between carrying on business and carrying on a business, although does not helpfully explain the difference.
The Respondent did not refer to any authorities in relation to its submission, but instead referred me to the Second Reading Speeches dated 21 November 2017, when the new licensing regime was introduced. The then Minister for Innovation and Better Regulation, Matt Kean, said, inter alia:
… While all property businesses are currently required to have a licence holder acting as licensee in charge to supervise the operation of the business, there is currently no specific licence type or qualification for this role. ... Given the level of responsibilities of licensees in charge, these training and experience requirements are considered appropriate and they will enhance industry professionalism, and help minimise consumer detriment. These higher education requirements reflect the significant responsibilities of licensees in charge.
In the Second Reading Debate on 13 February 2018, it was observed that the Bill would introduce a new licence class with higher qualification requirements for licensees in charge, to be known as a class 1 licence. Licensees in charge have overall responsibility for supervising business operations, and these changes were to acknowledge the extra responsibilities of licensees in charge.
As to the reliance which can be placed upon the speech and debate, in Project Blue Sky Inc. v Australian Broadcasting Authority [1998] HCA 28 at [69] the High Court held that legislation and the powers that it confers must be construed and applied in such a way as to be consistent with the language and purpose of all the provisions of the Act;
In Larter v Commissioner for Fair Trading; Commissioner of Police, New South Wales Police Force [2019] NSWCATAD 81, in relation to the Tattoo Parlours Act 2012. Professor Walker, SM, observed at [57] that that Act contained no objects clause, but the Tribunal may have regard to the Minister's Second Reading Speech to ascertain the purpose of the legislation, the mischief that it was designed to cure.
The Act in this matter also has no objects clause but I accept that one intention, in introducing the reforms, was to ensure that class 1 licence holders have the skills associated with all aspects of running a real estate business, rather than just have one of the business' licence holders nominated as the "licensee in charge", as was the case under the previous regime. This stated intention, however, does not especially assist in determining the issue of whether the Applicant "carried on business under the licence".
I observe that in the PART 3 of the Act headed "GENERAL CONDUCT OF LICENSEES AND REGISTERED PERSONS" that s 28(1) requires all licensees to have a registered office in NSW. The requirement is not restricted to class 1 licence holders, that is, those who are the principals in a real estate business. That tends to suggest that a person may be engaged in carrying on business at particular premises, even though they are not the owner of the business at those premises.
On a broad view, the phrase "carry on business" may suggest that persons who held a licence could obtain a class 1 licence provided they had actually worked as a real estate agent. This would set those persons apart from those who had acquired a licence but not utilised it to facilitate their work in the industry and therefore do not have relevant experience. If this were the correct interpretation, namely that the person need only have had a licence for a short period of time (that is, less than 2 years), and had been employed in the industry, also for only an unspecified period of time, then clearly the increased qualification measures introduced would not be addressed, and the intention of the amendments would be ignored.
On the other hand, it should be recalled that, prior to the amendment, for licensing purposes there was effectively no distinction between licensees and licensees in charge. As I understand it, there was no distinction in the requirements I order to be employed as a real estate agent and to be the principal, or "licensee in charge" of a business. All licensees, on that view, could be said to have been "carrying on business", although not "carrying on a business".
Section 8(1)(a) of the Act provides that a person cannot act as, or carry on the business of, a real estate agent, unless the person is the holder of a real estate agent's licence. That section differentiates between those who act as a real estate agent and those who carry on the business of a real estate agent. Having identified this distinction in the Act, and, consistent with the expressed intention of the changes, I am confident that the correct interpretation of the first alterative in cl 10(4)(c)(ii), is that the person must have previously been actively carrying on business as a real estate agent as the principal of that business.
Further, as discussed below, the position of an employee is specifically addressed in the second alternative in cl 10(4)(c)(ii).
[6]
Was the Applicant "employed to be the person in charge of business carried on under a real estate agent's licence at a place of business"? - the second alternative
The Respondent submitted that the Applicant was not employed to be the person in charge of business carried on under a real estate agent's licence at a place of business, and consequently cannot meet the second alternative in cl 10(4)(c)(ii).
Section 32 of the Act, both before and after the amendments, helpfully contrasts responsibilities of an employed licensee and the principal of the business, and is relevant to the role undertaken by the Applicant under her licence.
32 DUTY OF LICENSEE AND PERSON IN CHARGE TO PROPERLY SUPERVISE BUSINESS
(1) …
(2) A licensee employed by another licensee ("the principal licensee") as the person in charge of business at a place of business of the principal licensee must properly supervise the business of the principal licensee carried on at that place.
(3) The requirement to properly supervise the conduct of business includes the following requirements:
(a) a requirement to properly supervise persons engaged in the business,
(b) a requirement to establish procedures designed to ensure that the provisions of this Act and any other laws relevant to the conduct of that business are complied with,
(c) a requirement to monitor the conduct of business in a manner that will ensure as far as practicable that those procedures are complied with.
(4) The Secretary may from time to time issue and notify to licensees guidelines as to what constitutes the proper supervision of the business of a licensee. A failure to comply with the requirements of any such guidelines in connection with the supervision of a business constitutes a failure to properly supervise the business.
(5) A reference in this section to a person who is engaged in a business carried on by a licensee is a reference to a person:
(a) who is engaged in the business as an employee of the licensee, or
(b) who is engaged by the licensee, other than as an employee of the licensee, to provide services in the course of the business, or
(c) whose services are provided to the licensee in the course of the business, other than as an employee of the licensee, under an arrangement entered into by the licensee with another person.
While it is correct, in my view, to say that the Applicant had been employed to be the person in charge of her employer's rental business, the Applicant was not, on her evidence, employed as the person in charge of the business conducted under the licence of her employer. To find otherwise would mean that a person employed to undertake an extremely limited role, such as managing a single apartment, could be "in charge of business". This clearly was not the legislative intention.
[7]
Conclusion as to Pathway 3
I have found that the Applicant did not carry on business under the licence, nor was she employed to be the person in charge of business carried on under a real estate agent's licence at a place of business. Consequently, the Applicant has not met the qualification requirements under Pathway 3 of the Order for issue of a class 1 licence.
[8]
Conclusion
It is unfortunate that the Applicant held a class 2 licence only days short of the 2 year qualification requirement; otherwise she would have met the requirements of cl 10(4)(c)(i) of the Order. I observe that the Bill which introduced the changes to the licensing regime was debated in Parliament in February 2018. Hence, the changes were foreshadowed well in advance of the introduction of the Act. It is highly likely, although I had no evidence to this effect, that the impending changes were well publicised within the industry, and, hence are likely to have been known to the Applicant. This may have in fact precipitated her decision to "upgrade" from a Certificate of Registration to what became a class 2 licence. The Applicant is requesting consideration be given to her previous experience and her extenuating circumstances. I accept that her personal circumstances may have prevented her focusing on the need to secure her licence in advance of 2 years before the introduction of the changes. Sections 19 and 14(1)(c) of the Act however, clearly state the Secretary, and hence the Tribunal on review, must not grant a licence unless an applicant meets the qualification requirements specified in the Order. This is a mandatory requirement under the Act, and I have no discretion to consider the Applicant's circumstances such as to exempt her from the requirements.
Based on the above, I have determined the decision under review was correct in refusing to grant the Applicant a class 1 licence under ss 19 and 14(1)(c) of the Act.
It is of course, open to the Applicant to reapply for a class 1 licence under Pathway 2, if she meets the conditions, outlined above. The internal reviewer appeared to accept that she had the relevant work experience. It is likely that, having regard to her long experience in the industry, she would be able to complete the required training with little difficulty.
[9]
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: 28 April 2021
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. 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]. Under s 28(2) of 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. It is well established that in considering an application for review 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.