Chief Executive, Department of Justice and Attorney-General v Ford [2017] QCAT 4

CITATION: Chief Executive, Department of Justice and Attorney General v Ford [2017] QCAT 4 PARTIES: Chief Executive, Department of Justice and Attorney General (Applicant) v Sarah Leah Ford (Respondent) APPLICATION NUMBER: OCR060-16 MATTER TYPE: Occupational regulation matters HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Member Gordon DELIVERED ON: 10 January 2017 DELIVERED AT: Brisbane ORDERS MADE: 1. Sarah Leah Ford is reprimanded. 2. Sarah Leah Ford is ordered to pay a fine of $10,000 to the Chief Executive, Department of Justice and Attorney- General within 28 days of the date of the order. 3. Sarah Leah Ford is disqualified from holding or obtaining a licence or certificate of registration under the Property Occupations Act 2014 for a period of 10 years from the date of the order. CATCHWORDS: PROFESSIONS AND TRADES – AUCTIONEERS AND AGENTS – DISCIPLINARY PROCEEDINGS -– where real estate salesperson stole $10,965.48 over a period of over a year – where no criminal proceedings – where no repayment of the amount stolen – where no co-operation with the investigation and no reaction to the Tribunal proceedings – whether grounds for disciplinary action – considerations of the correct penalty -- 1 of 8 -- 2 Property Agents and Motor Dealers Act 2000 (Qld) s 496, s 583, s 529 Property Occupations Act 2014 (Qld) s 258 The Chief Executive, Department of Tourism, Fair Trading and Wine Industry Development v Ms Kate Maree Matheson [2006] CCT PD011- 06 The Chief Executive, DTRFT v Turner [2003] PAMDT X011-03 Chief Executive, Department of Justice and Attorney-General v Lake [2014] QCAT 282 Chief Executive, Department of Justice and Attorney-General v Sheppard [2014] QCAT 347 Schouten t/as Janet Schouten Real Estate v The Chief Executive, Department of Justice and Attorney-General [2016] QCATA 95 Chief Executive, Department of Justice and Attorney-General v Cameo Property Services Pty Ltd v Johnson [2012] QCAT 509 The Chief Executive, Department of Employment, Economic Development and Innovation v Schellaars [2010] QCAT 477 APPEARANCES AND REPRESENTATION This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act). REASONS FOR DECISION This matter is disciplinary action against Sarah Leah Ford who was a property manager who dishonestly dealt with a total of $10,965.48 which had come from tenants. Ms Ford was employed by Progress Properties Pty Ltd trading as Progress Properties, a real estate agency operating from premises at 2/24 Vanessa Boulevard, Springwood. The company and its director Robert Ford, are holders of appropriate real estate licences for letting and sales. Robert Ford is Ms Ford’s brother. In this matter the Tribunal is concerned with the period between 4 January 2013 to 24 February 2014. Over that time Ms Ford had the responsibility of receiving rental payments from tenants and ensuring that they were credited to the correct account, with particular responsibility for arrears management. Ms Ford was a tenant of premises managed by the agency, and therefore she would be expected to pay her own rental payments to the agency. On -- 2 of 8 -- 3 a number of occasions between the dates with which the Tribunal is concerned, Ms Ford diverted money paid by tenants into the agency’s trust account so that it was credited to her own rent account. From there, the money was forwarded to the owners of the property rented by Ms Ford in the usual way. This was discovered by Robert Ford when a tenant disputed their rent position. He looked at the computer records and found that the tenant’s rent payment had been credited to Ms Ford’s rent account. He questioned Ms Ford who claimed that it was an honest mistake. Mr Ford immediately corrected the error on the computer records, and credited the tenant’s account with the correct amount. Two days later Mr Ford discovered a second similar discrepancy, and he immediately reported the matter to the police and to the Office of Fair Trading. Mr Ford conducted an investigation and found that there had been 26 occasions when Ms Ford had diverted tenant’s rental money to the credit of her own rental account. The total amount involved was $10,695.48. The first 19 occasions when money was diverted in this way occurred between 4 January 2013 and 29 June 2013. Then there were a further 5 occasions between 10 January 2014 and 24 February 2014. Seventeen tenants and their corresponding owners, were affected by the thefts. Mr Ford made up all the losses to the tenants and owners concerned by crediting their accounts with the amount that that gone missing and reversed all the fraudulent transactions. This has ensured that no person has suffered loss as a result of the fraud, other than the agency. There is evidence that Ms Ford attempted to cover up the thefts. Many of the payments made by tenants were divided into smaller amounts, and separately receipted in the accounts system. On several occasions, credits were made to the account of the correct payer but for lesser amounts. On several occasions, credits were made to the account of other tenants. Because of this, from the 26 amounts received into trust, 47 incorrect receipts were created in the system. The multiple false entries into the trust account receipt records also resulted in incorrect entries in the trust account cashbooks, the tenant ledgers and the client ledgers. The division of the payments made by tenants in this way, seems to have been done to keep the fraudulent transactions concealed for as long as possible. The Office of Fair Trading delivered a written request to Ms Ford’s residential address asking her to attend a formal interview but she did not respond to this request.1 Ms Ford has failed to respond to the proceedings commenced in the Tribunal. Ms Ford has not reimbursed the money which she stole and which her employer has reimbursed to the losers. There have been no criminal proceedings. 1 Paragraph 6 of the witness statement of Sharon Lisa Rowe dated 11 February 2016. -- 3 of 8 -- 4 Ms Ford is aged 33. She held a real estate salesperson certificate which had been issued on 3 July 2012. The above information is presented to the Tribunal in witness statements and in a number of exhibits to an affidavit filed on behalf of the Chief Executive. Jurisdiction of the Tribunal On 1 December 2014 the Property Agents and Motor Dealers Act 2000 (Qld) (PAMDA) was replaced the provisions of the Property Occupations Act 2014 (Qld). By section 258 of the 2014 Act, if a ground existed before commencement of that Act for starting disciplinary action under PAMDA (as in this case) then the action can be taken as if it were under PAMDA. For the provisions to apply in the case of a registered employee, the employee must have held a registration certificate under PAMDA at any time within 1 year before a disciplinary proceeding is started. In this case Ms Ford held a registration certificate until it expired on 3 July 2015 and the disciplinary proceeding was started on 5 May 2016. Accordingly the Tribunal is able to deal with this matter. The Chief Executive may start disciplinary proceedings by section 497 of PAMDA. This is by applying to the Tribunal for the Tribunal to decide whether grounds exist under section 496 of PAMDA for taking disciplinary action against the registered employee. There are two grounds for taking disciplinary action suggested in the Chief Executive’s application to the Tribunal:- 1) Under section 496(1)(b)(i) of PAMDA, that the employee contravened section 583(3) of PAMDA, by making an entry in a document required or permitted to be made or kept under the Act knowing the entry to be false or misleading in a material particular. 2) Under section 496(1)(h)(ii) of PAMDA, that the employee in performing an activity of a licensee, was incompetent or acted in an unprofessional way. It is notable that a contravention of section 583(3) of PAMDA not only supports this disciplinary action but it amounts to a criminal offence as described in that subsection. It is punishable with a maximum penalty of 200 penalty points or 2 years imprisonment. Whether grounds exist for starting disciplinary proceedings On the evidence that I have seen, I find that on 26 occasions between 4 January 2013 and 29 June 2013 and between 10 January 2014 and 24 February 2014 when Ms Ford was processing receipts of rent on behalf of the real estate agency, she made entries in the accounts system which did not correspond with those receipts. Instead, she diverted the money to her own rental account. In all, the money came from 17 different tenants and -- 4 of 8 -- 5 totalled $10,695.48. This was obviously a deliberate act by Ms Ford. She must have known that the entries she was making in the accounts system were false or misleading in a material particular. These actions also amounted to acting in an unprofessional way. I conclude from the evidence that grounds exist for taking disciplinary action against Ms Ford under section 496 of PAMDA. The appropriate penalty Upon the Tribunal finding that grounds exist for taking disciplinary action against a person, the orders that the Tribunal can make are set out in section 529 of PAMDA. They include a reprimand, fines, and the payment of compensation. In addition, a person’s licence or registration can be suspended or cancelled. Conditions or disqualification can be imposed for the holding of a licence or registration certificate. The maximum fine in the case of an individual is 200 penalty units being a fine of $24,380.2 For a corporation the maximum is five times that much. The Chief Executive seeks a penalty of 10 years disqualification and a fine of $10,000 relying on the comparative tribunal decisions set out in a schedule. The Chief Executive points out that Ms Ford was in a position of trust, and the misappropriation occurred over a long period and the transactions were designed to conceal her behaviour. The Chief Executive points out that Ms Ford has not reimbursed the agency for its loss. She has not been charged with a criminal offence arising from these matters. Ms Ford did not respond to the Office of Fair Trading’s request for an interview and has not responded at all to the Tribunal proceedings. One effect of this is that the Office of Fair Trading has had to ensure that the necessary elements in the disciplinary case have been proved instead of being able to rely to some extent on agreed facts (which would have been more efficient). It also means that there is no explanation, or any other mitigation, offered by Ms Ford. There is nothing to show that Ms Ford has any remorse, or even appreciates her wrongdoing. There is nothing to show how burdensome upon her a disqualification or a fine would be. The Chief Executive has referred the Tribunal to various similar cases. First there is The Chief Executive, Department of Tourism, Fair Trading and Wine Industry Development v Ms Kate Maree Matheson [2006] CCT PD011-06 heard by the Commercial and Consumer Tribunal. In that case a real estate salesperson certificate holder was responsible for receiving rent and bonds on behalf of the real estate agency for which she worked. 2 By Regulation 3 of the Penalties and Sentences Regulation 2015 each penalty point is $121.90. -- 5 of 8 -- 6 She stole $13,200 over period of nearly 3 months, then gambled to try to repay the money. She admitted these matters, and had been charged and convicted of a criminal offence in respect of them, receiving an 8 months suspended sentence for 2 years. The criminal court ordered her to pay restitution which she was doing at $50 per week. She had sought help for her gambling problem. The Chief Executive did not seek a monetary order in the light of the earlier criminal proceedings. The Tribunal imposed a 10 year disqualification and ordered her to pay costs of $1,335. Then there is The Chief Executive, DTRFT v Turner [2003] PAMDT X011- 03 heard by the Property Agents and Motor Dealers Tribunal. In that case a real estate salesperson stole $12,333 over a period of 12 months. She co-operated with the investigation, and had been charged and convicted of a criminal offence, receiving a 2 year suspended sentence. The criminal court ordered her to pay $12,333 restitution. She paid $10,738 and was paying the balance of $1,595 over 12 months. The Chief Executive did not seek a monetary order in light of the earlier criminal proceedings. The Tribunal imposed a 10 year disqualification and ordered her to pay costs of $250. Then there is Chief Executive, Department of Justice and Attorney-General v Lake [2014] QCAT 282. In that case an assistant property manager who was responsible for receiving rent money and bonds stole $2,933 in three amounts over a period of 9 months. She was charged and convicted of a criminal offence, receiving 180 hours community service, 2 years’ probation and order to pay compensation of $3,380 to cover the cost of the investigation. She had repaid the stolen money but otherwise showed no remorse. She did not provide any submissions. The Chief Executive did not seek a monetary order in the light of the earlier criminal proceedings. The Tribunal imposed a 3 year disqualification and ordered her to pay costs of $250. Finally there is Chief Executive, Department of Justice and Attorney- General v Sheppard [2014] QCAT 347. In that case a senior property manager stole $3,550 on three occasions over a period of four weeks, seemingly as a result of a gambling problem. There were no criminal proceedings. She confessed to her employer before the theft was discovered, and then cooperated in the investigation and expressed remorse. She was disqualified for 5 years and fined $1,000. I agree with the submissions by the Chief Executive that Matheson is less serious than Ms Ford’s matter because in that case although the amount stolen was more, there were fewer offences over a shorter period of time, there was co-operation with the process, an attempt at redress, and there was a compensation order made by the criminal court. Turner also involves a respondent who co-operated. I agree with the Chief Executive that in Lake despite the failure of the respondent to make any submissions it is less serious than Ms Ford’s matter because the amount stolen was smaller and there were far fewer instances of the theft. Also the respondent had -- 6 of 8 -- 7 repaid the stolen money. I also agree with the Chief Executive that Sheppard is less serious than Ms Ford’s matter for similar reasons. There is also the recent case of Schouten t/as Janet Schouten Real Estate v The Chief Executive, Department of Justice and Attorney-General [2016] QCATA 95. In that case a licensed real estate agent falsified two invoices and gave false evidence under oath in two separate Tribunal proceedings where the Tribunal was dealing with disputes with tenants. She also deposited $1,980 into her general account when it should have been paid into her trust account, which was accepted on appeal was an honest mistake. On appeal, upon new evidence being admitted, it was found that she had repaid the claim fund with the amount lost by the tenants, and had responded in detail to the Chief Executive’s allegations. However, there had been previous disciplinary proceedings. The Appeal Tribunal relied on two cases as comparables: Chief Executive, Department of Justice and Attorney-General v Cameo Property Services Pty Ltd v Johnson [2012] QCAT 509 and The Chief Executive, Department of Employment, Economic Development and Innovation v Schellaars [2010] QCAT 477. The Appeal Tribunal disqualified Ms Schouten for 3½ years and imposed a fine of $3,300. In Johnson, a real estate licensee on three occasions over four months withdrew a total of $31,760 from the trust account in order to pay business expenses. This was revealed in a spot check from the Department. The money was all repaid. The licensee cooperated fully with the Department. It was accepted by the Tribunal that she was remorseful and had no intention to deprive any member of the public of trust money, and that her only means of earning an income was as a licensee. The Tribunal imposed a period of two year’s disqualification with no fine. In Schellaars, a real estate licensee on 23 separate occasions over 11 months moved money from the trust account into a holiday account and then into an interest bearing account and then back into the trust account. From the report, it would appear that $42,240 was involved. This did not cause any loss, and the licensee cooperated fully with the Department when they investigated. The licensee was disqualified for 5 years and ordered to pay a fine of $5,000. The difference between Johnson and Schellaars and Ms Ford’s case, and for that matter Schouten, is as the Tribunal expressly found in Johnson and as it would appear from Schellaars on the facts, that there was no intention permanently to deprive. Therefore if there was any dishonesty in those cases at all, it was at a much lower level than that in Ms Ford’s case and Schouten. I need to take into account that the disciplinary process is to protect the public, to ensure that only suitable persons are licensed or registered and to ensure that high standards are kept by those in the industry. I must have regard to the fact that the public entrust their money to real estate agencies -- 7 of 8 -- 8 and their employees and the utmost confidence in the industry must be maintained. In the circumstances, I think it is appropriate to reprimand Ms Ford and to disqualify her from holding or obtaining a licence or certificate of registration under the Property Occupations Act 2014 for a period of time. When considering that period of time, it is difficult to say that the period should be influenced by the amount of money stolen or the period of time over which it was stolen. The fact that any amount of money was stolen indicates a propensity in the person to steal and/or some weakness in their character and/or in their circumstances which made them more likely to do this. The Tribunal will then look to the respondent to show, taking into account the circumstances of the matter, that after the period of time has expired, the clear likelihood is that there will be no repeat of such dishonesty. In the absence of anything showing this, it is inevitable that there will be a long period of disqualification in order to protect the public and to maintain public confidence in the industry. There is no evidence at all to show that a shorter period would suffice to achieve these aims. In the circumstances it is inevitable that the period of disqualification is ten years consistent with the period of disqualification in Matheson and Turner. I also think it is appropriate to impose a fine. One reason for imposing a fine as well as a period of disqualification is that the two penalties have different roles. The importance of the period of disqualification in this case is that it is largely to protect the public. In the absence of any information from Ms Ford about her personal or work circumstances, it cannot be said that it will impact upon her at all. Therefore the important element of deterrence and the need to maintain public confidence in the industry would be missing from the penalty if there were no fine as well. As for the level of the fine, I take into account that there has been no money repaid by Ms Ford and there is nothing to show that she is remorseful in any way. The only evidence before me of Ms Ford’s reaction when her dishonesty was discovered was to say that there had been an honest mistake. Of contraventions of this type (misappropriation of money paid by tenants) this must be regarded as most serious since it involves money paid by 17 tenants and which was held in trust, where the misappropriation continued over an extended period of time and was in two batches. There is evidence of attempts to cover up the theft. The maximum possible fine is $24,380 (200 penalty units). There are only two things which save this case from attracting the maximum penalty. The first is the amount of money involved and the second is that there has been no previous disciplinary action against Ms Ford. In the circumstances I think it is appropriate to impose a fine of just under half the maximum. I impose a fine of $10,000. -- 8 of 8 --