Porter v Department of Finance and Services

Introduction 1The applicant, Mrs Peta Jennifer Porter (Mrs Porter), first obtained a real estate agent's licence in 2005. In 2007, she became a director of the family-held company, PMD Central Coast Pty Ltd ('PMD'). NSW Fair Trading appointed a manager to PMD in 2009 and at some point in 2010, Mrs Porter resigned as director of this company. In November 2010, she returned to the family business to work as a real estate agent for PMD. Receivers were appointed to PMD on 21 April 2011 and Mrs Porter began operating as a sole trader, trading as Coastwide Real Estate, in order to take over the business from PMD. On 23 August 2012, NSW Fair Trading made a decision to:

• cancel Mrs Porter's real estate agent's licence, on the basis that she was not a fit and proper person to hold such a licence;
• declare Mrs Porter to be a disqualified person until 20 April 2014; and
• disqualify Mrs Porter from being involved in the 'direction, management and conduct of a business of a licensee' until 20 April 2014. 2Mrs Porter lodged an application for review to the Administrative Decisions Tribunal on 4 September 2012. A stay was granted on 6 September 2012 and on 27 September 2013, I set aside the decision of the Director-General, Department of Finance and Services cancelling Mrs Porter's real estate agent's licence, declaring her to be a disqualified person and disqualifying her from being involved in the 'direction, management and conduct of a business of a licensee. 3In making this decision, I found that: (a)Mrs Porter resigned as a director of PMD on 14 January 2010 shortly after discovering her brother's mismanagement of the company finances and therefore was not a disqualified person under s16 (1A)(d) of the Property, Stock and Business Agents Act 2002 (the Act); (b)it was due to an administrative error, without any dishonesty or intention on the part of Mrs Porter, that rent monies were paid into the company operating account and not the trust account as required under s86 of the Act and cl 21 of the Property, Stock and Business Agents Regulation 2003 between 27 April 2011 and 14 June 2011, and that this error was corrected without any disadvantage; (c)Mrs Porter did not intentionally breach s43 of the Act by employing her mother, Mrs Campbell, for although she was aware that she was not permitted to employ her as a real estate agent she believed that she was able to employ her in an administrative capacity given that the appointed Manager of PMD had employed Mrs Campbell as a book keeper while she was a disqualified person; and (d)the evidence did not support the conclusion that Mrs Porter was in breach of s 137 of the Act when she acted to acquire the rent roll of Coastwide Pty Ltd. 4In conclusion, I held that: (a)having considered the principles relating to fitness and propriety, Mrs Porter should not have her licence cancelled on the basis that she was not a fit and proper person to hold a licence; (b)on the evidence, Mrs Porter was not a disqualified person for the purpose of s16 of the Act despite the administrative error made in relation to the trust account monies and despite Mrs Porter employing Mrs Campbell in contravention of s43 of the Act. Her actions were not sufficient to warrant disqualification from being involved in the direction, management and conduct of the business of a licensee; and (c)the more appropriate action would be a caution or reprimand. 5On the misunderstanding that Mrs Porter's real estate licence had, in fact, been cancelled for the period of 23 August 2012 to 6 September 2012 (when a stay of proceedings was granted by the Administrative Decisions Tribunal (ADT)), I determined that no further action should be taken against Mrs Porter and the earlier decision should simply be set aside. 6On 24 October 2013, the Director General, Department of Finance and Services filed a notice of appeal against this decision. 7On 1 January 2014, the Civil and Administrative Tribunal of New South Wales (NCAT) was established and on its establishment the ADT was abolished: see Civil and Administrative Tribunal Act 2013, s 7 and cl 3 of Schedule 1. 8By operation of cl 7(1) of Schedule 1 to the Act, the appeal against my earlier decision was taken to have been commenced in NCAT and hence able to be heard and determined by NCAT. For this purpose and under cl 7(3), NCAT has and may exercise all the functions which the ADT previously had and the applicable legislation is that which would have applied if the NCAT legislation had not been enacted. Consequently, the Administrative Decisions Tribunal Act 1997 as in force at 31 December 2013 was applicable to the appeal and continues to be applicable in this matter. 9On appeal, the Director General relied on the following three grounds, formulated as questions to be addressed by the Appeal Panel: (a)Having made findings that the Applicant's contravention of ss 43 and 86 of the Property, Stock and Business Agents Act 2002 (NSW) and cl 21 of the Property Stock and Business Agents Regulation 2003 (NSW) did not involve dishonesty, did the Tribunal in assessing the Applicant's fitness and propriety to hold a real estate agent's license under the Act, fail to consider adequately or at all whether the Applicant possessed the requisite knowledge and ability to hold such a licence? (b)Did the Tribunal err in law in making a factual finding that the Applicant's license was cancelled for the period from 23 August 2012 to 6 September 2012? (c)Assuming either questions 1 or 2 above or both are answered in the affirmative; did the Tribunal misdirect itself as to the exercise of its discretion to impose a penalty on the Applicant under the Act? 10On 20 February 2014, the Appeal Panel allowed the appeal in part. 11The Appeal Panel found that I had not erred by failing to consider adequately or at all whether Mrs Porter possessed the requisite knowledge and ability to hold a real estate licence, nor had I failed to give adequate reasons for my decision in regard to Mrs Porter's fitness and propriety. 12The Appeal Panel did, however, find that I had made a factual error in finding that Mrs Porter's real estate licence had been cancelled for the period 23 August 2012 to 6 September 2012 (when a stay was granted by the ADT). Both parties had conceded that there was no evidence to support the finding that Mrs Porter's licence had, in fact, been cancelled for this period. 13The Appeal Panel found that this erroneous finding - namely that Mrs Porter's licence had been cancelled for the period from 23 August to 6 September 2012 - had played a significant part in my concluding that no further action should be taken her, as was permitted under s 193 of the Property, Stock and Business Agents Act. Because of this, the Appeal Panel found that I had erred in law in finding that Mrs Porter's licence had been cancelled in August and September 2012 and that my order therefore needed to be reconsidered. On this basis the matter was remitted to me in in accordance with cl 13(1)(b) and (2)(e) of Schedule 1 to the Act for determination of what disciplinary action, if any, should be taken against Mrs Porter. Director General, Department of Finance and Services v Porter [2014] NSWCATAP 6