Chief Executive, Department of Justice and Attorney-General v Soel Products Australia Pty Ltd & Creswick [2024] QCAT 114

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Chief Executive, Department of Justice and Attorney- General v Soel Products Australia Pty Ltd & James William Creswick [2024] QCAT 114 PARTIES: CHIEF EXECUTIVE, DEPARTMENT OF JUSTICE AND ATTORNEY-GENERAL (applicant) v SOEL PRODUCTS AUSTRALIA PTY LTD (first respondent) JAMES WILLIAM CRESWICK (second respondent) APPLICATION NO/S: OCR070-22 MATTER TYPE: Occupational regulation matters DELIVERED ON: 11 March 2024 HEARD AT: Brisbane DECISION OF: Member Goodman ORDERS: The first respondent is ordered to pay to the Chief Executive, Department of Justice and Attorney- General a fine of $15,000 within two months of the date of this order. The second respondent is ordered to pay to the Chief Executive, Department of Justice and Attorney- General a fine of $10,000 within two months of the date of this order. CATCHWORDS: PROFESSIONS AND TRADES – LICENSING OR REGULATION OF OTHER PROFESSIONS, TRADES OR CALLINGS – MOTOR VEHICLE TRADERS, DEALERS AND REPAIRERS – where the licensee acted for a client to sell a motor vehicle on consignment without the client first appointing the motor dealer in writing – where the licensee employed a motor salesperson who did not hold a registration certificate as a motor salesperson – where the motor dealer failed to keep a trust account for deposits and purchase monies for consignment sale transactions – where the respondents received amounts belonging to someone else and dishonestly converted the amounts to their own or someone else’s use – where the -- 1 of 8 -- 2 respondent represented something false or misleading about a sale – where the respondents have been incompetent or acted in an unprofessional way – where the second respondent is an executive officer of a corporation against whom QCAT finds grounds exist to take disciplinary action – appropriate penalty Motor Dealers and Chattel Auctioneers Act 2014 (Qld), s 81, s 121, s 191, s 215, s 216, s 194, s 199 APPEARANCES & REPRESENTATION: This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) REASONS FOR DECISION [1] On 4 April 2022, the applicant referred this disciplinary proceeding to the Tribunal, on the basis that the respondents had breached provisions of the Motor Dealers and Chattel Auctioneers Act 2014 (Qld) (‘the Act’). [2] The first respondent is a business which was selling second hand caravans and motor homes. The second respondent holds a motor dealer’s licence and is a director of the first respondent. [3] The application raised eight disciplinary grounds.1 It is agreed between the parties that seven of the disciplinary grounds are established: (a) Disciplinary Ground 1: contravention or breach of s 81(1)(a) of the Act – the licensee acted for a client to sell the client’s motor vehicle on consignment without the client first appointing the motor dealer in writing. (i) Vendor 1: It is agreed that: In January 2018, a vendor contacted the first respondent to request an appraisal. The first respondent took possession of the vendor’s caravan and offered to sell it for an agreed price of $59,000 with $2,000 commission payable. In March 2018, an offer of $46,000 was rejected by the vendor. On 20 August 2018, the vendor signed a vendor’s statement to the motor dealer provided by the first respondent. The caravan was sold in or around August 2018 for $43,000. The applicant states that the vendor agreed to sell the caravan for $45,000 with $2,000 payable as commission to the first respondent. There was no appointment in place for the sale of the van on consignment. 1 Motor Dealers and Chattel Auctioneers Act 2014 (Qld), ss 194(1)(b)(i), 194(1)(g)(ii), 194(1)(g)(iii), 194(1)(g)(vi). -- 2 of 8 -- 3 The respondent states that the vendor had initially intended to sell the caravan on consignment, and he later decided to sell the caravan outright to the respondents for $43,000. This happened, and a vendor’s statement was signed. This was not a consignment sale. (ii) Vendor 2: It is agreed that: In July 2018, a representative of the first respondent told the vendor they would sell his van for $57,000 and commission would be $5,000. A vendor statement was provided which stated an amount of $52,000 “sub to neg”. The first respondent collected the van from the vendor on 10 July 2018. Prior to December 2018, the first respondent contacted the vendor to advise they had an offer of $38,000. The vendor rejected that offer. The next day, the first respondent contacted the vendor to advise that he would receive $40,000 and the commission would be reduced to $2,000. That proposal was accepted. The van was sold for $45,000 on 11 December 2018. The first respondent paid $4,000 to the vendor on 13 December 2018, and $36,000 to the vendor on 1 February 2019. The applicant states there was no appointment in place for the sale of the van on consignment. The respondent states that the caravan was purchased by the first respondent and was not on consignment. The first payment ($4,000) on 13 December was the deposit, with the balance payable within 7 days. Around 19 December 2018, the vendor advised that he did not have authority to sell the caravan. Approximately six weeks later he provided a statement showing his ownership of the caravan. The first respondent then paid the balance purchase price ($36,000) to the vendor to complete the purchase. The first respondent sold the caravan for $45,000. (iii) Vendor 3: It is agreed that: In January 2019, the vendor contacted the first respondent seeking assistance to sell her caravan on consignment for $105,000. On 22 January 2019, the vendor was provided with a vendor’s statement to motor dealer form. The first respondent said words to the effect that it was a record of the van being left with them. Around 6 May 2019, the van was sold by the first respondent for $95,000. Around 26 July 2019, the vendor was provided with a cheque for $90,000. The applicant states that in June 2019, the purchaser of the vehicle contacted the vendor directly to enquire about the history of the van. The vendor states that was the first time she became aware that the vehicle had been sold. There was no appointment in place for the sale of the van on consignment. -- 3 of 8 -- 4 The respondent states that whilst the vendor initially intended for the motorhome to be sold on consignment, she later decided to sell the motorhome outright to the first respondent. In around May 2019, the vendor agreed to sell the motorhome to the first respondent for $90,000. A signed vendor statement was not received until 24 July 2019 when payment was able to be made. The vendor requested that a bank cheque be drawn for collection by her daughter and that cheque was drawn two days later. The first respondent incurred on-road costs of $2,797.05 and the motorhome was sold for $95,000. (iv) Vendors 4: It is agreed that: On 30 April 2019, the vendors inspected a motorhome and on the same day enquired as to the estimated trade in for their existing van. The first respondent suggested they could sell the van for $39,999 and from that, would receive $35,000. On 13 May 2019, the vendor bought the motorhome they had inspected and took possession on 15 May 2019. On 16 May 2019, the vendor’s van was sold for $40,000. On 25 June 2019, the vendor provided their bank account details. On 28 June 2019, the first respondent paid $30,000 to the vendors. The applicant states that there was no appointment in place for the sale of the vehicle on consignment. The respondent states that it was agreed that the first respondent would pay $35,000 for the caravan and a vendor statement was signed. At handover, it was agreed that the vendors would pay any out-of-pocket costs for repairs and maintenance. The first respondent paid $30,000 to the vendors and subsequently spent $2,000 on repairs and maintenance. The vendor agreed to the reduction in the purchase price due to the extent of repairs required. The van was subsequently sold by the first respondent for $40,000. (b) Disciplinary Ground 2: contravention or breach of s 121(1) of the Act – the licensee employed as a motor salesperson, a person the motor dealer knows, or ought to know, does not hold a registration certificate as a motor salesperson. It is agreed that the first respondent employed a person as a motor salesperson when their salesperson certificate had expired on 7 May 2016. The respondents state that the person did not disclose that his salesperson certificate had expired. He was initially employed to sell new caravans, coordinate service repairs for the workshop and deliver / collect caravans. He did not initially require a salesperson certificate and his representations to the respondents that he held one were accepted without further investigation. At all relevant times a licensed person was in attendance at the dealership and was overseeing operations. The person in question has had their employment terminated and they no longer have any involvement with the respondents. -- 4 of 8 -- 5 (c) Disciplinary Ground 3: contravention or breach of s 191(1) of the Act – the licensee failed to keep a trust account under the Taxation Administration Act 2001 (Qld) for deposits and purchase monies for consignment sale transactions. It is agreed that the first respondent did not hold a trust account, as required by s 191(1) of the Act, to hold any money received in the alleged consignment sales. (d) Disciplinary Ground 4: contravention or breach of s 215(2)(a) of the Act – the licensee, in performing activities as a licensed motor dealer, received amounts belonging to someone else and dishonestly converted the amounts to their own or someone else’s use. It is agreed that the licensee received money from the persons described as Vendors above. The funds were paid into a Business Account. The applicant alleges that the first respondent unlawfully converted the amounts by using them for purposes other than for the payment to the consignors. The respondents say that at all times the business account had a balance sufficient to be able to meet their obligations to the vendors. (e) Disciplinary Ground 5: contravention or breach of s 216(1) of the Act – the licensee represented in any way to someone else anything that is false or misleading about the sale. On a date between 13 December and 25 December 2018, a representative of the first respondent told Vendor 2 that the balance purchase price ($36,000) had not been paid by the “third party”. This was false and misleading as it is not disputed that the full purchase price ($45,000) was paid to the first respondent on 11 December 2018. The first respondent paid $4,000 to Vendor 2 on 13 December 2018. Around 26 June 2019, Vendor 4 discovered that the motor home had been transferred out of her name. The first respondent told Vendor 4 they would buy the motor home off her but the respondent had already sold the motor home on 16 May 2019 at the time the first respondent made the offer to buy the van. The statement of the respondent was false and misleading. (f) Disciplinary Ground 6: the respondents are not a suitable person to hold a licence. This ground was not proceeded with. (g) Disciplinary Ground 7: contravention or breach of s 194(1)(g)(iii) - the respondents have, in carrying on a business or performing an activity, been incompetent or acted in an unprofessional way. The applicant relies on the facts outlined above. (h) Disciplinary Ground 8: contravention or breach of s 194(1)(g)(vi) the second respondent is an executive officer of a corporation against whom QCAT finds grounds exist to take disciplinary action under s 199 of the Act. JOINT SUBMISSIONS ON FACTORS RELEVANT TO PENALTY [4] The parties agree that: -- 5 of 8 -- 6 (a) The respondents have failed to adhere to the standard of behaviour expected of licensees. (b) The first respondent had contravened multiple offence provisions of the Act (Grounds 1 to 5). (c) The second respondent holds a motor dealer’s licence and is an executive officer of a licensed corporation. (d) The seriousness of the breaches is demonstrated by Grounds 3 and 4 carrying maximum penalties of terms of imprisonment (two and five years). (e) On four occasions the licensee did not obtain an appointment to act prior to a vehicle being placed for sale on consignment (Ground 1). (f) It is an offence for a licensee to employ an unregistered motor salesperson that the licensee knows or ought to know does not hold a registration certificate. The respondents could have conducted a search to find that the salesperson’s certificate expired on 7 May 2016. On 28 October 2019, the salesperson was disqualified from holding a licence or certificate for four years pursuant to an order of this Tribunal (Ground 2). (g) A total of $180,000 was received for three consignment sales and was not placed in a trust account as required (Grounds 3 and 4). (h) False representations made by employees of the first respondent demonstrate a lack of integrity on the part of the employees. The behaviour is aggravated by the fact that one of the employees was not licensed and did not hold a valid salesperson’s certificate (Ground 5). (i) The second respondent was the only licensed director of the first respondent and is liable to be disciplined if one or more grounds are established against the company. While the second respondent did not personally commit the acts, the second respondent’s culpability includes not having in place adequate supervision procedures. [5] The parties further agree that there are some mitigating circumstances: (a) The first respondent was established in June 2012 and the second respondent has been a director since that time. The first respondent acquired Caravan RV CQ in 2017 as part of an acquisition that involved several entities. All allegations relate to the entity which traded as Caravan RV CQ. The business was located in Rockhampton and the second respondent was located in Brisbane, and he concedes that sufficient monitoring was not possible and that he was unable to be sufficiently involved in the dealings between the employees and the customers. (b) The second respondent had minimal to no dealings directly with the Vendors, and when he became aware of issues he stepped in to remedy complaints quickly. All vendors have since entered confidential settlement arrangements with the first respondent to their satisfaction. (c) The second respondent has taken steps to review the first respondent’s systems, policies, and procedures to ensure best practice including a full company audit. -- 6 of 8 -- 7 (d) Caravan RV CQ has permanently ceased trading. The first respondent has evolved into a Brisbane-based manufacturer and distributor of brand new caravans, and has expanded into servicing, maintenance and repairs, and supply of spare parts. The first respondent employs up to 45 staff and provides work for 50 subcontractors at any given time. All salespersons employed by the first respondent have attained the necessary qualifications and hold dealer licences where required. [6] The parties agree that: (a) The Tribunal can make orders as described in s 199 of the Act; (b) The parties do not seek an order suspending, cancelling or disqualifying the licences held by the respondents, but submit that a fine is the appropriate form of penalty. The maximum penalty for the first respondent (a company) is 1000 penalty units ($143,750) and for the second respondent is 200 penalty units ($28,750). (c) The first respondent has entered into individual settlement agreements with Vendors 2, 3 and 4 to the satisfaction of the Vendors. (d) The respondents have shown remorse and not contested the disciplinary application. (e) The second respondent has voluntarily completed all current training subjects required to obtain a motor vehicle licence and a copy of the certificate has been provided to the applicant. JOINT SUBMISSIONS AS TO APPROPRIATE ORDERS [7] The parties submit that the following orders are appropriate: (a) The first respondent is ordered to pay to the Chief Executive, Department of Justice and Attorney-General a fine of $15,000 within two months of the date of this order. (b) The second respondent is ordered to pay to the Chief Executive, Department of Justice and Attorney-General a fine of $10,000 within two months of the date of this order. (c) The first respondent or any corporation of which the second respondent is an executive officer shall immediately cease the practice of consignment sales of vehicles and will not have any future involvement in consignment sales to which the Act applies. (d) The first respondent or any corporation of which the second respondent is an executive officer must ensure that all persons engaged to act as a motor salesperson or employed licensee to which the Act applies shall hold either a current motor dealer licence or registration certificate issued under the Act. (e) The first respondent or any corporation of which the second respondent is an executive officer must keep a copy of the licence or certificate of all persons engaged to act as a motor salesperson or employed licensee to which the Act applies and produce the licence or certificate within 24 hours upon a request being made by an inspector appointed under the Act. -- 7 of 8 -- 8 (f) The first respondent or any corporation of which the second respondent is an executive officer must conduct an annual check of licensing information kept by the Office of Fair Trading of all persons engaged to act as a motor salesperson or employed licensee to which the Act applies. DECISION OF THE TRIBUNAL [8] The Tribunal finds that the Act has been breached in the circumstances set out in the agreed facts. The breaches are multiple and very serious, and grounds exist to take disciplinary action under the Act. [9] In determining the appropriate sanction, I have considered the orders which the Tribunal may make, as set out in the legislation.2 [10] I am satisfied that the first two orders proposed by the parties are expressly provided for in the legislation3 and are appropriate. [11] The parties have not referred the Tribunal to a particular section under which the other orders may be made. I am not satisfied that the other orders proposed are properly described as conditions on a licence,4 and I am not satisfied they are “appropriate to ensure the person complies with the Act”.5 [12] I understand that the respondents have already ceased the practice of consignment sales. Legislation already requires salespersons and employees to hold appropriate licences. The respondents must comply with the legislation. An order from the Tribunal requiring the respondents to comply will not advance the matter. [13] The final two proposed orders are good ideas rather than matters that should be the subject of Tribunal orders. If the parties believe that the practices will assist them in complying with and monitoring compliance with the legislation, they are arrangements they may enter into without an order of the Tribunal. 2 Ibid, s 199. 3 Ibid, s 199(1)(a). 4 Ibid, s 199(1)(f). 5 Ibid, s 199(1)(g). -- 8 of 8 --