Summers Initiative Pty Ltd v Commissioner for Fair Trading [2026] NSWCATOD 17;

(1) reprimand the Applicant pursuant to section 192(1)(a) of the Act, and

(2) require the Applicant to pay a penalty of $5,500.00 pursuant to section 192(1)(d) of the Act.

1. A number of matters are not in dispute. The Applicant was issued a real estate licence in October 2014. Ms Bernadette Summers is nominated as licensee in charge of the Applicant's agency and holds a real estate licence that was also issued in October 2014. The Applicant operates a Trust Account.
2. The Act requires trust accounts to be audited within three months after the end of the applicable audit period. The Respondent contends that the Applicant failed to meet this requirement because it had failed to submit an audit of its trust account for the period ending 30 June 2023 within three months after the end of the applicable audit period.
3. In July 2024, the Respondent issued the Applicant with a Notice to Show Cause ("NTSC") under section 195 of the Act. The NTSC invited the Applicant to explain why disciplinary action should not be taken against it. On the same day, the Respondent also issued a Notice to Suspend under section 196 of the Act.
4. In response, the Applicant submitted that the audit was complete but that the auditor was experiencing issues with submitting the report. The Applicant ultimately submitted the audit report in late July 2024.
5. It is not in dispute that the audit for the trust account was not lodged within the requisite time. The Applicant was warned and given a deadline to submit the outstanding audit, however, the audit was not submitted until approximately 9 months after the deadline had expired.
6. In April 2025, the Respondent determined to take disciplinary action against the Applicant on the ground that it had contravened that provision of the Act. The decision was affirmed on internal review.
7. The Applicant has applied to the Tribunal for external review of the Respondent's determination. The Applicant seeks orders setting aside the Respondent's determination or, alternatively, substitution of a lesser outcome.

1. The issue before the Tribunal is whether the correct and preferable decision is to take disciplinary action against the Applicant and if so, what is the appropriate outcome.

1. The Act provides a framework which requires all licence holders to adhere to standards designed to enhance consumer confidence in their dealings with licensed real estate agents. The requirements relating to trust accounts and trust account audits are vital elements that reinforce consumer confidence.
2. In his Second Reading Speech for the Property, Stock and Business Agents Amendment (Property Industry Reform) Bill on 21 November 2017 the then Minister for Innovation and Better Regulation, The Hon Matt Kean, referred to the importance of trust accounts and trust account audits:

Agents' failure to account for money held in trust is a major risk area for the industry, and a major source of consumer detriment. During the last financial year, the Property Services Compensation Fund paid out more than $500,000 to consumers. As well, there were other significant consumer repayments from businesses where Fair Trading has appointed a manager ... furthermore, if an audit is not lodged it is not clear whether the audit was unqualified and did not have to be lodged or was in fact qualified but the agent had failed to lodge a copy.

To minimise any additional administrative burden, an online audit lodgement portal is being developed. This system will be in operation before this requirement comes into effect. Additional trust account requirements will be introduced by regulation. This will include a requirement to hold separate trust accounts for sales and rental payments, and a requirement to clear rental trust accounts at the end of each month. This will help keep landlords aware if there is any shortfall in their rental income that cannot be accounted for.

(1) A person who is a licensee, a former licensee or the personal representative of a licensee must, within 3 months after the end of the audit period applicable to the person, cause the records and documents relating to any money held during that period in a trust account kept by the person in accordance with this Act to be audited by a person qualified to act as an auditor for the purposes of this Division.

(2) The Secretary may in a particular case or class of cases by order in writing extend the period of 3 months under subsection (1).

(a) 100 penalty units in the case of a corporation, or

(1) The audit period applicable to a person is the year ending on 30 June or such other period as the Secretary may fix in respect of the person under this section.

(2) The Secretary may by order in writing served on a person fix some other period as the audit period applicable to the person.

(3) Such an order may be made on the application of the person or on the Secretary's own initiative.

(4) Such an order may be made with such limitations as to time or circumstances, and subject to such conditions, as the Secretary considers appropriate.

1. The Act provides for disciplinary action against a licensee. Section 191 of the Act provides:

Disciplinary action under this Part can be taken against a person who is or was the holder of a licence or certificate of registration on any one or more of the following grounds -

(a) the person has contravened a provision of this Act or any other Act administered by the Minister (including any provision of the Australian Consumer Law (NSW)), or the regulations under any such Act, whether or not the person has been prosecuted or convicted of an offence in respect of the contravention,

(a1) the person has, in respect of the person's conduct of business or exercise of functions under the licence or certificate of registration, contravened the Competition and Consumer Act 2010 of the Commonwealth,

(b) the person has contravened a condition of the licence or certificate of registration,

(c) the person has, in the course of carrying on business or exercising functions under the licence or certificate of registration, acted unlawfully, improperly, unfairly or incompetently,

(d) the person is a disqualified person or is otherwise not eligible under section 14 to hold a licence or certificate of registration,

(e) the person is not a fit and proper person to be involved in the direction, management or conduct of the business of a licensee,

(f) the person has failed to pay any part of a contribution or levy that is due and payable under Part 10 (Compensation Fund),

(g) the person has breached an undertaking given by the person to the Secretary under this Act or the Fair Trading Act 1987, in respect of the person's conduct of business or exercise of functions under the licence or certificate of registration,

(h) the person has failed to comply with a direction given to the person by the Secretary pursuant to the taking of disciplinary action under this Part,

(i) the person has failed to pay a monetary penalty imposed on the person by the Secretary pursuant to the taking of disciplinary action under this Part,

(j) the issue of the person's licence or certificate of registration was obtained by fraud or mistake,

(k) grounds specified in the regulations as grounds for the taking of disciplinary action against a person under this Act.

1. Section 192(1) of the Act outlines the disciplinary action that the Secretary, and the Tribunal standing in the shoes of the Secretary, can take against a person if a ground for disciplinary action is established under section 191 of the Act. That is:

(1) Each of the following actions is disciplinary action that the Secretary can take against a person under this Act -

(b) give a direction to the person requiring the person to give a specified undertaking to the Secretary as to the manner in which the person will conduct business or exercise functions under a licence or certificate of registration held by the person,

(c) give a direction to the person requiring the person to take specified action within a specified time in connection with the conduct of business or the exercise of functions under a licence or certificate of registration,

(d) impose a monetary penalty on the person of an amount not exceeding 100 penalty units in the case of an individual or 200 penalty units in the case of a corporation,

(e) impose a condition on the person's licence or certificate of registration,

(f) suspend the person's licence or certificate of registration for a period that does not exceed the unexpired term of the licence or certificate of registration,

(g) cancel the person's licence or certificate of registration,

(h) declare the person to be a disqualified person for the purposes of this Act, either permanently or for a specified period,

(i) disqualify the person from being involved in the direction, management or conduct of the business of a licensee, either permanently or for a specified period.

(2) A power conferred by this Act to take disciplinary action against a person is a power to take any one or more of the actions that constitute disciplinary action.

(3) When a licence or certificate of registration is suspended, it is taken not to be in force except for such provisions of this Act or the regulations as the regulations may prescribe as provisions that remain applicable to a suspended licence or certificate of registration.

1. The Secretary may also determine to take no further action in respect of the matter:

The Secretary may at any stage of a matter that is the subject of consideration by the Secretary under this Part determine to take no further action in respect of the matter, whether or not the matter is the subject of a complaint or a show cause notice and whether or not the Secretary determines that there are grounds for taking disciplinary action in connection with the matter.

1. Section 200 of the Act confers on the Tribunal jurisdiction in respect of disciplinary action. It provides:

200 Administrative review of disciplinary action by NCAT

A person against whom disciplinary action is taken by the Secretary may apply to the Tribunal for an administrative review under the Administrative Decisions Review Act 1997 of the Secretary's decision on the disciplinary action or on a review of the disciplinary action.

1. In this matter, the Respondent determined that the Applicant contravened section 111(1) of the Act by failing to provide a trust account audit within the required time. The Respondent also determined that this was a ground for taking disciplinary action against the Applicant under section 191(a) of the Act.
2. At the hearing, I raised the issue of whether the maximum penalty of 100 penalty units in the case of a corporation provided for in section 111 of the Act has the effect of limiting the disciplinary action that can be taken pursuant to section 192(d) of the Act. That is, is the Secretary able to impose a monetary penalty of 200 penalty units in the case of a corporation notwithstanding the provision in section 111 of the Act? Each of the parties provided submissions in relation to this issue.

1. Section 63 of the Administrative Decisions Review Act 1997 ("the 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 is not restricted to 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.
2. Under section 28(2) of the Civil and Administrative Tribunal Act 2013 ("the NCAT 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: section 38(2) of the NCAT Act.
3. 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 paragraphs [28] - [34].
4. The Tribunal makes its own decision in place of the Respondent's, and there is no presumption that the decision of the Respondent is correct: McDonald v Director General of Social Security (1984) 1FCR 353 at 357.

1. The Respondent relies on a bundle of documents lodged pursuant to section 58 of the ADR Act. This bundle contains all the documents that the Respondent considers relevant to the matter before the Tribunal. The Applicant relies on a bundle of documents that sets out its position in relation to the matter.
2. Ms Summers appeared on behalf of the Applicant. She gave evidence and made submissions. Mr Hussein Osseili appeared on behalf of the Respondent and provided both written and oral submissions.

1. The Respondent contends that the Applicant had contravened section 111 of the Act by failing to cause its trust account records to be audited and the audit report lodged within the prescribed period.
2. It is not in dispute that the audit report was not lodged within the prescribed period. The Respondent's documents show that on 7 June 2024, the Applicant was advised that an audit had not been received. The Applicant was served with a NTSC which explained that section 111(1) of the Act imposed a duty on the Applicant to cause its audited trust account records to be lodged by 30 September 2023. However, the online portal remained open for the submissions of late audits until 31 December 2023. This effectively provided an extended deadline to 31 December 2023.
3. On 25 July 2024 the Respondent wrote to the Applicant in regard to the NTSC and a Notice to Suspend the Applicant's licence. Ms Summers responded on 29 July 2024 noting:

My audit is complete it was done through A1 Audits. Joseph Ranjit Reddy has tried to submit the 2023 a few times on Friday through the portal online without success. Could please allow him to submit the report.

There was a delay in formatting I am currently implementing a software packing 'Property Tree' so this makes the process a lot easier.

I established this company 2.5 years ago my technology has not kept up with the growth, that is changing now.

1. On 21 August 2024 the Respondent wrote to Ms Summers and noted that the Applicant's 2023 Trust Account Audit was received on 31 July 2024. the Respondent also advised Ms Summers that the disciplinary process commenced by the NTSC had not been brought to an end.
2. The Respondent submits that the decision taken is proportional to other matters before this tribunal in which the licensee had failed to meet the trust audit requirements.
3. In IBW Empire Pty Ltd v Commissioner for Fair Trading [2023] NSWCATOD 63, Senior Member Leal stated at paragraphs [30] - [35]:

30. There is no dispute that the proper handling of trust accounts by those in the real estate industry is vital to retaining consumer confidence and that trust account audits are important to ensuring that consumer funds are not misused.

31. There is also no dispute that by failing to lodge its trust account audit by the prescribed deadline of 31 March 2021, IBW Empire breached the provisions of the Property and Stock Agents Act 2002 and was therefore liable for disciplinary action under s193 of the Act, including a reprimand and a monetary penalty.

32. For the following reasons, however, I find that the disciplinary action imposed by NSW Fair Trading to be too harsh.

33. It is not in dispute that IBW Empire held a trust account from 2018 and that, prior to its failure to submit its 2020 trust account audit, no compliance issues had been made against the company.

34. The years 2020 and 2021 were extraordinary ones in light of the worldwide COVID pandemic that led to lengthy lockdowns and required enormous changes to work practices, particularly when childcare became unavailable. As a working mother with young children at home instead of at childcare and with no family support available during lockdown periods, I accept that this time was particularly onerous for Ms McGhee. I accept Ms McGhee's statement that trying to manage her parenting responsibilities with her business responsibilities was difficult and provides some explanation for her failure to submit her trust account audit on time.

35. NSW Fair Trading has submitted that the imposition of the reprimand and the monetary penalty on IBW Empire has an important educative function. Whilst I accept this as a general proposition, in light of the extraordinary times during which the late lodgement of the trust account audit occurred - namely in between lockdowns and while Ms McGhee was managing a business while looking after young children in the absence of childcare - I am satisfied that, given the extraordinarily circumstances, the educative function is of less relevance than it would otherwise be.

1. Senior Member Leal found the circumstances of that particular matter were extraordinary.
2. At paragraph [43] Senior Member Leal referred to a number of other Tribunal decisions and noted:

43. In other cases determined by this Tribunal, the following monetary penalties were imposed:

1. In Amazing T Investment Pty Ltd v Commissioner for Fair Trading [2022] NSWCATOD 6, a monetary penalty of $11000 was initially imposed, before being reduced by 25% to $8250 in mitigation, given that the company had ultimately lodged the audit.

2. In Cumberland Real Estate Pty Ltd v Commissioner for Fair Trading [2022] NSWCATOD 99, Cumberland Real Estate Pty Ltd was reprimanded and fined $5500. On review, the decision was set aside and the decision made to take no further action. This was because the failure to submit the audit was not deliberate (the applicant having not received notification of the audit and then having received the incorrect advice from NSW Fair Trading that no further action was required), immediate steps were taken to remedy the situation and there was no loss of damage to any person resulting from the delay in filing the audit.

3. In Option Realty Pty Ltd v Commissioner for Fair Trading [2022] NSWCATOD 27, a monetary penalty of $8250 was imposed, which included a reduction in recognition of the action taken by Option Realty Pty Ltd in submitting the 2020 audit for the trust account by the date specified in the Notice to Suspend.

1. In the present matter, the Respondent submitted that the Applicant cannot present any extraordinary factors to justify a reduced penalty.
2. The Respondent noted that the Applicant's documents were eventually audited and lodged 11 months after the required date for lodgement. The Respondent also noted that the audit report stated that the Applicant's records had not been provided to the auditor until 14 June 2024. The Respondent submitted that this shows that the records had not been provided well in advance of the deadline as the Applicant had stated. The Respondent also noted that the audit report identified ten breaches.
3. The Respondent submits that in these circumstances, public interest considerations far outweigh any detriment that the Applicant may face.

1. Ms Summers provided written submissions on behalf of the Applicant and also made oral submissions at the hearing. She said that the Applicant is a boutique agency with 20 properties currently under management. She provided a chronology indicating the growth of the agency:
   • 2022 established with 6 property management clients.
   • 2022 Audit submitted on time under guidance from Al Audit.
   • 2022 - 2023: 12 Properties under management.
   • 2023 - 2024: moved to software program Property Tree. 15 properties under management.
   • 2024 - 2025: 20 properties under management
2. Ms Summers submitted that the Applicant is a small business that had been using a manual record keeping system. As the business grew the system needed to be upgraded. In order to achieve that, she sourced software. She said that she had not disregarded her obligations but that she needed a program that she could use and understand. She met with the supplier and discussed the Applicant's needs and then trialled demonstrations etc. She provided a document which purports to show that she had completed a course with Property Tree in August 2024. This is intended as evidence to substantiate that new software was implemented.
3. Ms Summers said that the Applicant's records were up to date in June 2023. In October 2023 she contacted the auditor, A1 Audits, to conduct the audit. She had given the manual records to the auditor, but she had been told that there were issues and that they needed to be redone. She worked with A1 Audits to resolve the issues.
4. Ms Summers said that it became apparent that the Applicant's existing trust accounting system was no longer adequate, necessitating the implementation of new software. The transition was temporarily delayed due to cashflow constraints associated with procuring the new program. The Applicant's records were not submitted on time because she wanted the software program and time ran out.
5. She submitted that the penalty imposed is disproportionate to the nature of the breach and does not accurately reflect the absence of harm, misconduct or evade responsibilities. She contends that at no time were client monies at risk. All trust records were complete, reconciled, and fully auditable. She has implemented new internal processes, including a new software program. The processes now include automated compliance reminders, updated record systems, and dedicated audit calendar management.
6. She submitted that prior to this issue, the Applicant's business maintained an unblemished compliance record. She provided a number of positive reviews as evidence of client satisfaction in their dealings with the Applicant. I
7. Ms Summers submitted that integrity in trust account management has always been a core value of the Applicant's business. She disputes the Respondent's contention that the Applicant's actions had the potential to harm the integrity of the real estate industry. She submitted that this does not take into account the context of the breach. It was an isolated administrative delay with no loss or misconduct. She submitted that no client funds were compromised or mishandled; no financial harm occurred to clients or the regulator or real estate industry; and the breach was administrative, and process driven not ethical or financial in nature.
8. Ms Summers submitted that the public disciplinary record creates reputational damage disproportionate to the actual conduct. She submits that the Tribunal should set aside the Respondent's determination and substitute a lesser outcome, or, alternatively, direct that the public record of disciplinary action be removed or suppressed.

1. The background of this matter is not in dispute. It is common ground that the Applicant failed to meet its obligation to provide audited accounts as required by section 111 of the Act. The Applicant accepts that its accounts were provided on 31 July 2024 and not prior to the September 2023 deadline or the December 2023 extended deadline.
2. Section 111 of the Act imposes a mandatory audit obligation and creates an offence punishable by a maximum of 100 penalty units. A penalty unit is $110. Therefore, the section allows for a monetary penalty of $11,000.
3. As noted, the Respondent determined to reprimand the Applicant and require the Applicant to pay a penalty of $5,500. The monetary penalty was imposed pursuant to section 192(1)(d) of the Act, which empowers the Secretary to impose a disciplinary monetary penalty of an amount not exceeding 100 penalty units in the case of an individual or 200 penalty units in the case of a corporation.
4. The Respondent has argued that the imposition of the reprimand and the monetary penalty have an important educative function. I agree with that submission. The obligation is placed on the Applicant to meet the audit requirements. If this is not met, the Respondent is not in a position to know whether or not the Applicant has failed to account for money held in trust. This places an additional administrative burden on the Respondent.
5. As noted above, the Second Reading Speech of the then Minister for Innovation and Better Regulation provided a clear explanation for the trust account audit requirements.
6. In Lisimcol Pty Ltd v Commissioner for Fair Trading [2023] NSWCATOD 2 Senior Member Mulvey accepted the Respondent's submissions with respect to the significance of a failure to lodge the trust account audit. were as follows:
   • failure to lodge the trust account audit had the potential to cause harm to the integrity of the real estate industry as failure to account for money held in trust is a major risk area for the industry, and a major source of consumer detriment. The integrity of trust accounts and trust account audits are vital elements that reinforce consumer confidence in property agents in NSW;
   • real estate agents can handle very large sums of money on behalf of their clients and must be accountable and open to scrutiny in the conduct of their affairs as licensees. Requirements of the PSA Act relating to trust accounts and trust account audits are therefore important elements that reinforce consumer confidence in real estate agents;
   • failure to lodge the trust account audit had the potential to undermine public confidence in the trust account system under the PSA Act, and moreover confidence on the part of the persons whose money is being held in trust, as a delay in providing trust account audits could give the impression misappropriation or malfeasance may be occurring.
7. Senior Member Mulvey also adopted the view expressed by Senior Member Isenberg in Amazing T Investment Pty Ltd v Commissioner for Fair Trading where she stated at paragraph [26]

It is to be recognised that the Respondent, and the Tribunal on review, also, with respect to real estate agents, have an educative function when imposing an appropriate sanction for breach of statutory obligations. I consider that the imposition of a fine, in addition to the reprimand, in this matter is appropriate.

1. I agree with both Senior Member Mulvey and Senior Member Isenberg in regard to these matters.
2. On the material before me it appears that the Applicant operated a manual record keeping system and ultimately adopted the Property Tree electronic software program system. The delay in adopting that system was primarily due to the Applicant's financial circumstances. That is understandable in a new business, but it is not a relevant consideration in this matter. It was open to the Applicant to have kept the Respondent informed of the progress that it had made in meeting its obligation to have its trust accounts audited. It does not appear to have done so. If the Applicant had informed the Respondent of the difficulties that it was experiencing, it could have allowed an opportunity to discuss the Respondent's concerns in regard to the Applicant's inability to meet its audit obligations.
3. The Applicant has submitted that there is no evidence, that it had misappropriated, mishandled, or failed to properly safeguard client funds. That is correct. However, it appears that there were issues related to the Applicant's manual record keeping system. That is of concern if the consequence was that the auditor was unable to carry out the audit.
4. The Applicant has submitted that integrity in trust account management has always been a core value of the Applicant's business. However, the issues related to the Applicant's record keeping system suggests a lack of attention to detail and a lack of understanding of the significance of the audit obligations.
5. I also agree with the Respondent that the Applicant has not presented any evidence of extraordinary factors to justify a reduced penalty as was the case in IBW Empire Pty Ltd v Commissioner for Fair Trading.
6. In the circumstances I am satisfied that the approach taken by the Respondent was the correct and preferable one. I do not agree that the penalty imposed is disproportionate to the nature of the breach and the circumstances of this matter. It is proportionate to other matters in which the licensee had failed to meet the trust audit requirements.
7. The monetary penalty imposed by the Respondent is well within the penalty limit provided for by section 111 of the Act and takes account of the circumstances identified by the Applicant. I do not need to consider whether the Secretary is also able to impose a monetary penalty pursuant to section 192(1)(d) of the Act.
8. I consider that the reprimand and penalty of $5,500 is appropriate having regard to the gravity that compliance with trust accounting obligations is considered in the legislation, the educative role in imposing such a penalty, and taking into account the Applicant's ultimate compliance with the lodgement requirement. I am satisfied that the Respondent has made the correct and preferable decision and therefore it should be affirmed.

13 April 2026 - Corrections and replacement of [46] and [47].

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.

10 February 2026 - decision date amended from January to February.

13 April 2026 - 13 April 2026 - Corrections and replacement of [46] and [47].