Sarkees v Commissioner for Fair Trading

Background

1. The Applicant has held a certificate of registration or a licence under the Act since April 2006. In 2006 she was issued a certificate of registration as a real estate salesperson authorising her to carry on the activities of a real estate salespersons while employed and under supervision of a licensed real estate agent. The Applicant's certificate of registration was renewed up until April 2019.
2. In April 2018 the Applicant was issued a real estate agent licence under the Act. In March 2020 she was issued a Class 2 real estate agent licence under the Act, which authorised her to carry out real estate sales or leasing functions or on-site residential property management functions. In September 2021 she was issued a Class 1 real estate agent licence ("the licence") which authorised her to carry on a business under a licence and be in charge of that business. That licence expired in September 2022.
3. In November 2023, the Applicant applied to renew the licence. The licence renewal application was refused in February 2024. The original decision noted the Applicant's mental capacity as the reason for refusing the application. The refusal was affirmed on internal review. The internal reviewer found that the Applicant was not "fit and proper" to hold a licence.
4. The reasons for the decision stated:

• Unmatched double quotation marks in next paragraph * "The consideration of an applicant's fitness and propriety to hold a licence under the PSA Act must take into account whether the individual is of good repute, having regard to character, honesty, and integrity. This also extends to the applicant's knowledge and ability of the functions, obligations and duties of a licence holder. In considering Ms Sarkees' fitness and propriety under the PSA Act, I have taken into account that the charge, Participate criminal group contribute criminal activity, was dismissed. However, I have balanced this with the fact that section 14(2) of the Mental Health and Cognitive Impairment Forensic Provisions Act 2020 provides that an order to dismiss a charge against a defendant does not constitute a finding that the charge against the defendant is proven or otherwise. Therefore, Ms Sarkees' admission to the elements of the offence is significant and relevant to consideration concerning her fitness to hold a property licence. It is also evident that the fraud perpetrated by Ms Sarkees and others in the group represents a substantial sum, as well as serious abuse of a NSW Government program intended to assist landlords and tenants. The PSA Act offers protections to those dealing with the property industry by regulating the activities of licensed agents and others working within the industry. By issuing licences under the PSA Act, the Secretary is representing to members of the public that the agent has met the relevant standards of fitness and propriety under the PSA Act and is authorised to carry out the work specified by the licence. The conduct that. resulted in the criminal charge against Ms Sarkees is directly related to her previous employment as a property licence holder within the regulated real estate and property industry. As a class 1 agent nominated as licensee in charge of a business, Ms Sarkees would be in a position to authorise withdrawals from an agency's trust account. …
• Unmatched double quotation marks in next paragraph * Ms Sarkees is not eligible to hold a licence in accordance with section 14(1)(b) of the PSA Act because she has not shown at this time that she is a fit and proper person."

1. The finding relates to the Applicant being charged with an offence under section 93T(1) of the Crimes Act 1900 (NSW) ("the Crimes Act"). Section 93T(1) provides: 93T Participation in criminal groups (1) A person who participates in a criminal group is guilty of an offence if the person - (a) knows, or ought reasonably to know, that it is a criminal group, and (b) knows, or ought reasonably to know, that his or her participation in that group contributes to the occurrence of any criminal activity. Maximum penalty - Imprisonment for 5 years.

The charge

1. The Applicant worked at RW Partners Fairfield. She managed the rent roll. Her supervisor was Vincent Movizio. The person from whom she took instructions and to whom she reported was Antonio Fedele. It was alleged that those men, with another, Nasser Kalache, carried out a fraud on the COVID-19 Relief payments and rental bond fraud.
2. In March 2022 the Applicant was arrested and charged under section 93T of the Crimes Act with the offence of participate in a joint criminal enterprise to commit a fraudulent act at Fairfield over the period 28 September 2021 to 5 December 2021. That charge was subsequently amended so that the charge was that the Applicant had participated in a "criminal group and or reasonably to have known that it was a criminal group and her participation in that group contributed to criminal activity".
3. The Respondent has provided the following summary explaining the allegations (citations removed): The police alleged that the applicant and her two co-accused, Nasser Kalache and Antonio Fedele, were participants in a criminal group headed by Mr Kalache. The group was alleged to have made a series of fraudulent claims on funds made available by the NSW Government through the Residential Tenancy Support Package introduced by the Government in 2021 as part of a package of support to tenants and landlords during the Covid-19 pandemic. The package of support provided lump sum payments of up to $4,500 per residential tenancy agreement to compensate landlords who had reduced their tenants rent in response to Covid-I9 from 14 July 2021. On or about 15 December 2021 the Residential Tenancy Support Payment Team queried the legitimacy of 162 applications for lump sum relief, each in the full amount of $4,500, producing a total claim figure of $729,000 allegedly lodged by Vincent Movizio and Mercantile Property Group Pty Ltd, as the relevant managing agent of the tenancies concerned, using the email address admin@rwf.net.au. The email address was used only by Mr Kalache and was installed on (or accessible from) his tablet computer. Mercantile Property Group Ply Ltd operated a real estate agent business under the trading name "RW Partners Fairfield", previously "Ray White Fairfield". The trading name "RW Partners Fairfield" was owned by Master Property Services Pty Ltd but licensed to Mercantile Property Group Ply Ltd. Mr Fedele had been the director of Master Property Services Ply Ltd since 31 March 2020 and the holder of a real estate agent licence which expired on 22 March 2024. Mercantile Property Group Ply Ltd held and operated two trust accounts with the National Australia Bank Ltd (NAB), being the Rental Trust Account and the Sales Trust Account. In the period 22 October 2021 to 26 November 2021 a total of $325,500 was paid by the Department of Finance and Services (DFS) to the Rental Trust Account of Mercantile Property Group Ply Ltd in respect of 73 applications. CCTV obtained by investigators for 4 December 2021 showed Mr Fedele using Photoshop to manipulate signatures from tenancy applications and placing those signatures on documents which appeared identical with the consent letter lodged as part of the fraudulent claims. The applicant was said to be present in the office that day and to be seen to engage with Mr Fedele while he was manipulating the signatures. Analysis of the applicant's email inbox for the email sabrina@rwf.met disclosed that on 4 December 2021 the applicant had received a number of emails from Mr Fedele from his email address tony@rwf.net containing the fraudulent consent forms Mr Fedele was seen working on at his desk in the CCTV footage and matched the fraudulent claims lodged on 4 December 2021. An email sent 18 August 2021 to the applicant attached two documents, the first a draft of the tenant letter and the second a PDF of the consent form, and instructed the applicant "1 x of each letter for each property. So, 2 letters in total for each property". All 162 fraudulent claims lodged included the same letter with the particulars of each tenancy changed on each of the letters. The DFS deposited funds to the Trust Account on five separate occasions in the period 22 October 2021 to 26 November 2021. During this period, the applicant receipted all monies in the REST Software package used to record the receipt and disbursement of funds to the Rental Trust Account, her operator identification being the initials "SL". All monies received in the Rental Trust account were receipted in the REST Software except the Covid payments. The police alleged that the applicant was instructed not to receipt those payments to the REST Software or chose not to do so. During this same period, on 22 November 2021 an amount of $166,500 was debited to the Rental Trust Account to an account in the name "NK Debt Solutions" with reference "27 Peel St Refund". This was said to be a non-trust disbursement as the transaction was not recorded in the trust payment report. Corroborative of these non-trust transactions was that the $171,000 in Covid payments received was not shown as a surplus in the End of Month reconciliation for October. The non-trust disbursements to Mr Kalache and NSW Maintenance Solutions were receipted by "SL" and "TF", "TF" being a reference to Mr Fedele. Mr Kalache was the sole signatory to and operator of the account in the name "NK Debt Solutions" held at the ANZ Bank. On 28 September 2021, between 10.28am and 11.13am, the applicant made a claim for 22 rental bonds via the rental bonds online portal using her personal user identification number claiming bonds to the total value of $45,870.29 The applicant did this under instruction but accepted that she ought reasonably to have known that this was part of the criminal activities of the group.
4. The elements of the section 93T of the Crimes Act offence are that: 1. the Applicant ought reasonably to have known there was a criminal group; and 2. the Applicant ought reasonably to have known that her participation contributed to the occurrence of criminal activity.
5. The charge did not allege that the Applicant knew of any criminal activity or that she knowingly participated in any criminal activity.
6. The Applicant entered a guilty plea to the remaining charge, and the Local Court dismissed the charge without conviction under section 14 of the Mental Health and Cognitive Impairment Forensic Provisions Act 2020 (NSW) ("MHCIFP Act"). Section 14 of the MHCIFP Act provides: 14 Orders Magistrate may make (1) A Magistrate may make an order to dismiss a charge and discharge the defendant - (a) into the care of a responsible person, unconditionally or subject to conditions, or (b) on the condition that the defendant attend on a person or at a place specified by the Magistrate for assessment, treatment or the provision of support for the defendant's mental health impairment or cognitive impairment, or (c) unconditionally.
7. In support of her position, she relies on a report from a psychologist, Mr Hamid Attai, of Mindstrong Psychology.

The Issue for determination

1. The issue for determination is whether the decision to refuse the Applicant's application to renew her licence is the correct and preferable decision.

Role of the Tribunal

1. The Tribunal has jurisdiction to review an administratively reviewable decision: section 55 of the of the Administrative Decisions Review Act 1997 ("the ADR Act") The Tribunal has jurisdiction to hear and determine this application for review pursuant to section 27 of the Act.
2. When considering an application for review the Tribunal is to decide what is the correct and preferable decision having regard to the material before it (section 63(1) of the ADR Act). In doing so the Tribunal may exercise all of the functions that are conferred or imposed by any relevant legislation on the administrator who made the decision (section 63(2) of the ADR Act). The time at which the correct and preferable decision is determined is when the Tribunal makes its decision: YG and GG v Minister for Community Services [2002] NSWCA 247 at [25].
3. The Tribunal may decide to affirm or vary the administratively reviewable decision, or set it aside and either substitute a different decision or remit the matter to the administrator for reconsideration: section 63(3) of the ADR Act.
4. The Tribunal is required to base its findings of fact on logically probative material: see Minister for Immigration and Ethnic Affairs v Pochi (1980) 44 FLR 41 at 62 and 68. The standard of proof applying in this review is the balance of probabilities. There is no burden or onus of proof on either party: see Nakad v Commissioner of Police, New South Wales Police Force [2014] NSWCATAP 10 at paragraphs [28]-[34].

Applicable legislation

1. The Act provides for the licensing, regulation and discipline of individuals, and corporate or other entities carrying on a business in the real estate industry.
2. Section 14(1)(b) of the Act provides that an individual is eligible to hold a licence only if the Secretary is satisfied that the individual is a fit and proper person to hold a licence and each person with whom the individual is in partnership in connection with the business concerned is a fit and proper person to hold a licence.
3. Section 19 of the Act states that an application must not be granted unless the applicant is eligible to be granted the relevant licence or certificate of registration that has been sought.
4. As noted above, the internal reviewer found that the Applicant was not a fit and proper person to hold the licence that she was seeking.

Fit and proper person

1. The Act places an emphasis on the need for licensees to be fit and proper for the role. The Tribunal has considered the issue of whether an Applicant is a fit and proper person to hold a licence on numerous occasions.
2. The issue of an applicant's fitness and propriety is one of fact to be determined objectively, taking into account all the evidence: Smith v Commissioner of Police, New South Wales Police Force and NSW Fair Trading [2014] NSWCATAD 184. The Appeal Panel has pointed out that public interest considerations play a role in the assessment of fitness and propriety: Director- General, Transport New South Wales v AIC (GD) [2011] NSWADTAP 65, [37]; Smith, [30].
3. The question of a person's fitness to hold a licence is to be determined by reference to the activities in issue and consideration of the nature and purpose of the activities that the person will undertake. In the High Court decision in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 380 Toohey and Gaudron JJ said: The expression "fit and proper person", standing alone, carries no precise meaning. It takes its meaning from its context, from the activities in which the person is or will be engaged and the ends to be served by those activities. The concept of "fit and proper" cannot be entirely divorced from the conduct of the person who is or will be engaging in those activities. However, depending on the nature of the activities, the question may be whether improper conduct has occurred, whether it is likely to occur, whether it can be assumed that it will not occur, or whether the general community will have confidence that it will not occur. The list is not exhaustive but it does indicate that, in certain contexts, character (because it provides indication of likely future conduct) or reputation (because it provides indication of public perception as to likely future conduct) may be sufficient to ground a finding that a person is not fit and proper to undertake the activities in question.
4. They went on to say at 388: The question whether a person is fit and proper is one of value judgment. In that process the seriousness or otherwise of particular conduct is a matter for evaluation by the decision maker. So too is the weight, if any, to be given to matters favouring the person whose fitness and propriety are under consideration.
5. In Sobey v Commercial and Private Agents Board (1979) 22 SASR 70 Walters J said: In my opinion what is meant by that expression is that the 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 a particular licence ... 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 ... as a person to be entrusted with the sort of work which the licence entails.
6. In Hughes and Vale Pty Ltd v New South Wales (No. 2) (1955) 93 CLR 127 the High Court discussed the meaning of the term 'fit and proper' (at 156-7): "The expression "fit and proper person" is of course familiar enough as traditional words when used with reference to offices and perhaps vocations. But their very purpose is to give the widest scope for judgment and indeed for rejection. "Fit" (or "idoneus") with respect to an office is said to involve three things, honesty knowledge and ability: "honesty to execute it truly, without malice affection or partiality; knowledge to know what he ought duly to do ; and ability as well in estate as in body, that he may intend and execute his office, when need is, diligently, and not for impotency or poverty neglect it" - Coke. When the question was whether a man was a fit and proper person to hold a licence for the sale of liquor it was considered that it ought not to be confined to an inquiry into his character and that it would be unwise to attempt any definition of the matters which may legitimately be inquired into; each case must depend upon its own circumstances."
7. The Respondent noted the Applicant's guilty plea and contends that in light of the Applicant's conduct she is not a fit and proper person to hold a licence under the Act.

Material before the Tribunal

1. The Respondent provided a bundle of documents pursuant to section 58 of the ADR Act. The bundle contains documentation related to the charge brought against the Applicant. The Respondent's legal representative provided both written and oral submissions.
2. The Respondent contends the correct and preferable decision is to refuse the licence application because the Applicant is not a fit and proper person to hold a licence.
3. The Applicant relies on her own evidence. She provided written statements and also appeared at the hearing, gave evidence and was cross examined. She contends that she should be granted the licence because she holds the relevant qualifications, is of good character and that she was not guilty of the conduct that was the subject of the allegations against her.
4. The Applicant also relies on character references from Mr Joe Romeo and Ms Julie Dang which indicate that she is held in high regard, notwithstanding the charges brought against her. Mr Joe Romeo who is a licensee under the Act, attended the hearing, gave evidence in support of the Applicant and was cross examined. He has known the Applicant for 4 - 5 years and is aware of the charges brought against her. He understands that the Applicant was unknowingly involved in the activities of her employers. He would be prepared to employ the Applicant in his business.
5. The Applicant also relies on a psychological report from Mr Hamid Attai, Psychologist, of Mindstrong - Psychology & Consulting Services. Mr Attai concluded that the Applicant is not a mentally incapacitated person. She does not have cognitive impairment, and does not pose a risk to herself or others.
6. The Applicant's legal representative provided both written and oral submissions.

Consideration

1. The Applicant has worked in the industry since 2007. She has worked in a number of different agencies since that time. She attributed that movement between agencies to the fact that she followed her then husband in his work and that this was the result of coercive control on his part.
2. With respect to the allegations brought against her she explained her role in the agency when the offences occurred and she explained her guilty plea as follows: It is stated in the Facts Sheet that I had participated in the criminal activity by following the direction of those principals. I did not engage in any way in the criminal activity. I did not make any of the transfers alleged in the Facts Sheet as I did not have access to the bank accounts to enable that to occur. That's why the Facts sheet does not attribute any actual activity directly or expressly to me. I pleaded guilty on the basis a person in my position objectively ought to have known there was a criminal activity going on. The lawyer in the Local Court told me that by this plea of guilty I was not admitting to participating in any conduct but admitting that I ought reasonably to have known it was a criminal group. This criminal proceeding was affecting my mental health, my financial means, my ability to look after my family and my career. I wanted to put the proceedings behind me.
3. I accept that evidence.
4. As noted, the charge did not allege that the Applicant knew of any criminal activity or that she knowingly participated in any criminal activity. It alleges that she ought to have known. On the evidence before me I am not satisfied that the Applicant engaged in the criminal activity outlined above.
5. I am satisfied that with the exception of the charge brought against her in relation to the conduct outlined above, the Applicant has an unblemished record.
6. It is apparent from Mr Attai's report that there is no psychological basis on which the application should be refused.
7. In these circumstances I am satisfied that the Applicant is a fit and proper person to hold the licence that she is seeking.
8. Accordingly, I am not satisfied that the decision to refuse the application is the correct and preferable decision. It should therefore be set aside. In its place the decision is taken that the licence is to be granted.

Orders

1. The decision under review is set aside.
2. The decision is made that the Applicant's application to renew her Class 1 real estate licence is granted.

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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: 21 February 2025