Chief Executive, Department of Justice and Attorney-General v Grimsey [2015] QCAT 1

CITATION: Chief Executive, Department of Justice and Attorney-General v Grimsey [2015] QCAT 1 PARTIES: Chief Executive, Department of Justice and Attorney-General (Applicant) v Damien Stein Grimsey (Respondent) APPLICATION NUMBER: OCR108-14 MATTER TYPE: Occupational regulation matters HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Member Paratz DELIVERED ON: 7 January 2015 DELIVERED AT: Brisbane ORDERS MADE: 1. Mr Damien Grimsey is disqualified from holding any form of licence or certificate of registration issued under the Property Agents and Motor Dealers Act 2000, or any subsequent or similar Act, for a period of seven years from the date of this decision. 2. Mr Damien Grimsey is prohibited from being an executive officer of a corporation which holds any form of licence issued under the Property Agents and Motor Dealers Act 2000, or any subsequent or similar Act, for a period of seven years from the date of this decision. 3. Mr Damien Grimsey will pay a fine of $5,000 to the Chief Executive Department of Justice and Attorney-General, within 45 days of the date of this decision. 4. Mr Damien Grimsey will pay to Mr Peter Penglase the sum of $7,687.00 as compensation within 45 days of the date of this decision. -- 1 of 19 -- 2 CATCHWORDS: REAL ESTATE AGENT – DISCIPLINARY – where a person was acting as a real estate agent without a licence – where the son of a real estate agent carried on the business whilst not holding a licence or certificate of registration – where the person went on to act as a real estate agent in his own right without holding a licence or certificate of registration, and a receiver was appointed Property Agents and Motor Dealers Act 2000 (Qld), s 160, s 161, s 496, s 529, s 573 Property Occupations Act 2014 (Qld), s 237, s 258(3) Briginshaw v Briginshaw (1938) 60 CLR 366 Re Seidler [1986] 1 Qd R 486 Chief Executive, Department of Tourism, Racing and Fair Trading v Winn K.J. [2003] QCCCTPAMD 8 (13 November 2003) Chief Executive Department of Justice and Attorney General v Keyte [2012] QCAT 244 Chief Executive Department of Justice and Attorney-General v Hoppner [2014] QCAT 296 APPEARANCES: 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 [1] The Chief Executive, Department of Justice and Attorney-General, has referred four disciplinary charges against Damien Stein Grimsey to the Tribunal for contravening sections of the Property Agents and Motor Dealers Act 2000 (Qld) (the Act). [2] The Act was repealed by section 237 of the Property Occupations Act 2014, which came into force on 1 December 2014. Section 258(3) of the Property Occupations Act 2014 provides as follows:- (3) If, before the commencement, QCAT had started but not finished disciplinary action under PAMDA, the action may be finished under PAMDA as if that Act had not been repealed. [3] Accordingly, notwithstanding the repeal of the Act, the disciplinary proceedings will be determined in accordance with the Act. [4] Mr Grimsey was involved in the operation of a real estate agency known as State Invest Property Services, at Beenleigh in Queensland. -- 2 of 19 -- 3 [5] Directions were given on 31 July 2014 that if no application was made for an oral hearing, that the matter would be determined on the papers not before 25 August 2014. No application has been made, and this is the decision on the papers. [6] The disciplinary charges, as amended, are as follows: 1. Acting as a Real Estate Agent between 1 July 2008 and 30 November 2008 (Sections 496(1)(b) – Section 160(2)); or pretending to be a real estate salesperson (Section 161(1)). 2. Acting as a Real Estate Agent between 18 May 2011 and 30 January 2012 (Sections 496(1)(b) – Section 160(2)). 3. Wrongful conversion and false accounts on or about 26 July 2011 (Section 496(1)(b) – Section 573(2)). 4. Not a suitable person between 1 July 2008 and 30 January 2012 (Section 496(1)(g)(i)). [7] The Chief Executive filed particulars with the referral on 16 May 2014, and filed submissions on 8 September 2014. Mr Grimsey filed submissions on 27 June 2014. [8] The particulars set out the allegations, and the history of the matter, and it is convenient to reproduce them in full: 1. On 17 November 2003 the business name State Invest Property Services was registered by Graeme William Grimsey (father of Damien Stein Grimsey). Graeme Grimsey carried on a real estate practice under that business name from Unit 14, 69 George Street, Beenleigh, Qld. The business has been described as a boutique real estate sales and letting business. 2. Graeme Grimsey held a Real Estate Agents licence issued under the Act which authorised him to carry on the activities conducted by his business. 3. A trust account (Heritage Building Society No. 10624023) was opened on 28 November 2006 in the name of Graeme Grimsey t/a State Invest Property Services Trust Account. Unlicensed activity – July 2008 to November 2008 4. Graeme Grimsey suffered a serious illness and spent 5 months in hospital during the period July 2008 to November 2008. 5. During that time Damien Grimsey took over the day to day management and control of the business. During this time Damien Grimsey carried out such duties as negotiating for the buying, selling and/or letting of property for and on behalf of clients of the business for which he and the business received reward. 6. Damien Grimsey was not the holder of a Real Estate Agents licence or Real Estate salespersons certificate issued under the Act authorising him to carry out the duties he did during the period July 2008 to November 2008. -- 3 of 19 -- 4 Further unlicensed activity – May 2011 to January 2012 7. Damien Grimsey remained in the day to day control and management of the business from December 2008 until its closure in January 2012. 8. The nature of the activities he undertook during this period included the negotiating for the buying, selling and/or letting of property for and on behalf of clients of the business and management of domestic real estate in the Gold Coast, Toowoomba, Morayfield, and a number of suburbs in and around Brisbane for which he and the business received reward. 9. On 6 February 2009 Damien Grimsey obtained a Real Estate Agents licence (no. 3269506). 10. On 5 October 2009 the business name State Invest Property Services was transferred into Damien Grimsey’s name. He moved the business operations to 18 Ardesia Court, Burleigh Heads on the Gold Coast at some time late in 2010 or in early 2011. 11. On a later date Damien Grimsey lodged an application to renew his Real Estate Agent licence. The application was deemed “withdrawn” by operation of the Act on 17 May 2011 due to his failure to lodge a number of yearly audit reports over his trust account. Damien Grimsey was therefore acting in an unlicensed capacity from 17 May 2011. 12. During the period May 2011 to January 2012 he carried on the business without holding any form of licence or certificate of registration authorizing him to carry on the business. Penglase matter 13. Peter Penglase was a client of the real estate agency business conducted by Damien Grimsey. He had a rental property located at 22 Bonogin Street, Redbank Plains which was being managed by Damien Grimsey. 14. In early 2011 the property was damaged in a storm. A claim was lodged with the insurance company (Terri Scheer Insurance) which made a payment of $7,787.00 (the insurance money) under the insurance policy. The payment had been made after considering a quote dated 11 April 2011 provided by QMATE Property Maintenance which was accepted by the insurer. 15. On 15 November 2011 an additional quote was provided by Top Notch Handy Man Services. 16. Damien Grimsey received the payment on 25 July 2011 however did not pay this amount to QMATE to do the repair work but later in 2011 engaged Top Notch Handy Man Service to do the repair work. The insurance payment of $7,787.00 was paid into the trust account of the business on 25 July 2011. 17. On 26 July 2011 the $7,787.00 was transferred out of the trust account and deposited into the general business account. 18. Top Notch Handy Man Service had quoted $1,738.00 to repair the damage. They were only paid $100 at the completion of the repair work by Damien Grimsey. 19. Damien Grimsey was interviewed about this matter on 15 May 2014 and could offer no reasonable explanation for the distribution of the -- 4 of 19 -- 5 insurance money or why it was not distributed to its rightful owner/beneficiary Peter Penglase or repaid to the insurer. 20. The balance of the insurance money remains outstanding as at the date of this application. [9] An investigator for the Office of Fair Trading, Patrick Tully, stated1 that Graeme Grimsey was issued with a Real Estate Agent licence which expired on 2 October 2010. On 25 September 2009, the Office of Fair Trading appointed Ms Julie Williams as receiver of the trust property of Graeme Grimsey trading as State Invest Property Services, after information was received by the Trust auditor as to a trust shortfall. On 2 February 2012, Ms Williams finalised the Graeme Grimsey receivership. [10] He noted that ultimately2 a total of 121 claims relating to the Graeme Grimsey receivership totalling $291,542.59 were approved and paid by the Chief Executive. As $241,417.59 remained in trust at the finalisation of the receivership, the actual debt to the Claim fund was $50,125.02, plus receivership expenses of $175,201.96, making a total debt of $225,326.98 owing. [11] He stated that Damien Stein Grimsey was issued a Real Estate Agents licence on 6 February 2009 which expired on 17 May 2011. On 23 January 2012 the Office of Fair Trading appointed Ms Julie Williams as Receiver of the trust property of Damien Grimsey trading as State Invest Property Services, after complaints relating to his property management and unlicensed trading were received. On 9 April 2012 Ms Williams finalised the Damien Grimsey receivership. No claim reports were submitted. [12] In her final report as to the Graeme Grimsey receivership, dated 2 February 2012, she expressed the view that, despite the corporate database maintained by ASIC disclosing Mr Graeme Grimsey as the sole Director of the company, investigations reflected that Mr Graeme Grimsey had not held an active role in the management of the agency, and rather the rental operations were (in the main) directed by Damien Grimsey who acted as a “shadow director”.3 [13] Her conclusion that Damien Grimsey acted a shadow director was based on the following alleged events:4 a) Mr Grimsey asserted that during his absence from July 2008 to November 2008, his son, Mr D Grimsey was left full charge of the operation and had remained in control even after that. 1 Statement Patrick Tully 5 May 2014. 2 Statement Patrick Tully 5 May 2014 at [22]. 3 Report Insolvency and Turnaround Solutions 2 February 2012, p 19. 4 Report Insolvency and Turnaround Solutions 2 February 2012, p 31. -- 5 of 19 -- 6 b) He held the position of Property Manager and was understood to be in charge in the absence of Mr Grimsey who attended the office on twice a week (Refer Annexure M for copy of notice to owners). c) He was the point of contact for owners (Refer Annexure N – being copy of PAMD 50 of claimant indicating same). d) Indication of his control of operation can be reflected from notices issued to him being acted upon by tenants resulting to rental payments being made to another trust account set up by him. e) Intention to purchase the business. [14] She noted that Mr Damien Grimsey opened a Trust account with Heritage Building Society on 1 October 2009 styled Damien Stein Grimsey t/as State Invest ABN 43 780 011 496 Property Services Trust Account (“the secondary account”) using the same ABN as previously used by the operation.5 She described this as trying to attempt to operate the business trading as “State Invest Property Services” following her appointment as Receiver to the trust property of Mr Graeme Grimsey. [15] Ms Williams prepared an interim report dated 21 February 2012 into the receivership of Mr Damien Grimsey. She noted that from her discussions with Mr Damien Grimsey that it would appear that he took over the business name of State Invest Property Services on 5 November 2009 and continued operating the business including management of properties for clients derived from the clientele of his father.6 [16] She prepared a final report in respect of potential breaches by Mr Damien Grimsey dated 5 April 2002. She noted that her appointment on 23 January 2012 by the Department was as a result of the expiry of a Real Estate Principal licence issued to Mr Damien Grimsey, as he failed to lodge outstanding Audit requisitions with the Department within a specified timeframe.7 [17] The licence was withdrawn on 17 May 2011. She concluded that Mr Damien Grimsey had effectively been trading without a valid licence for the period from 17 May 2011 to 23 January 2012. [18] She noted that Mr Damien Grimsey had, without her consent, caused a notice dated 25 January 2012 (two days after her appointment) to be sent to the owner of at least one property reassuring that trading would resume as normal once “the audit” to be conducted by her was concluded.8 [19] She describes that statement as untrue. She had already told Mr Damien Grimsey it was unlikely that he would be granted a licence once her investigations had been completed, as he was aware that he had been operating unlicensed and effectively dealing with a trust account unlicensed. 5 Report Insolvency and Turnaround Solutions 2 February 2012, p 32. 6 Report Insolvency and Turnaround Solutions 21 February 2012, p 5. 7 Report Insolvency and Turnaround Solutions 5 April 2012, p 22. 8 Report Insolvency and Turnaround Solutions 5 April 2012, p 23. -- 6 of 19 -- 7 [20] In her opinion Mr Damien Grimsey may have circulated the same notice to all owners, and that it contained a deliberate misrepresentation and reflected Mr Damien Grimsey’s intention to continue trading without a licence. [21] An interview was conducted with Mr Damien Grimsey by Mr Tully on 14 May 2014 as to his role in the business State Investment Property Services from 2008. [22] Mr Damien Grimsey maintained that after his father suffered a minor stroke in May 2008 that his role was an administration manager.9 His father then had a major stroke in late July 2008. At no time was there a transfer of ownership or an acting licensee brought in by Mr Graham Grimsey.10 [23] It was put to Mr Damien Grimsey that he was performing the duties of a licensee after his father’s stroke.11 He replied: Okay. Well, yeah, I can’t, I don’t know, I was property managing, property manager. If I had stepped into some licensee type roles it wasn’t, I don’t know, I don’t know how to reply to that. [24] He was asked if he had any explanation why he carried on a business known as State Investment Property Services at the Gold Coast from the 17 May 2011 to the 23 January 2012 when he didn’t hold a licence under the Property Agents and Motor Dealers Act, and replied:12 Yeah, I had some troubles getting it renewed because of the audit report. I had troubles with the two auditors. One didn’t want, I gave all the information and they just took their time to get it all sorted out and then they wanted it in a different format. And I had every, I just had every good intention of you know doing the right by the owners. But yeah, so I did operate without it, but in an attempt to get it resolved. [25] He was further asked to clarify that he was acting without a licence for reward for about a seven and a half months period and replied:13 Yeah, that was definitely a mistake that I made. [26] He was unable to say what happened to the rest of the money relating to the insurance claim by Mr Penglase, and said he would have to go through the records.14 [27] Mr Tully related a summary of Ms Williams’ report to Mr Damien Grimsey as follows:15 9 Transcript of Interview 102. 10 Transcript of Interview 124. 11 Transcript of Interview 250. 12 Transcript of Interview 404. 13 Transcript of Interview 416. 14 Transcript of Interview 586. 15 Transcript of Interview 611. -- 7 of 19 -- 8 ..Julie Williams further notes Damien Grimsey’s involvement in the business is shown by him being considered as the key point of contact for clients. He also assumed a management role as shown by such acts as issuing directions to clients to pay rent into a new trust account he had set up when the receiver was appointed over the original trust account operated by the business. Many of the clients complied with that direction which supports Williams’ observation that he was in control of the business. He also expresses a desire to purchase the business. Julie Williams states that Damien Grimsey was at all times responsible for banking collection of rents and administration payments from the trust account in the business. He also transferred amounts from the trust account to the general account to keep the business running, in particular to cover wages and other business expenses. He, and she’s referring to you saying you’re responsible. And bear in mind that the admin person may well have transferred certain monies but your fathers absent she is stating here that you were in responsible, you were in charge. He’s also transferred amounts blah blah blah. He also was the principal person in the business with whom she held discussions with, this is Julie Williams, to obtain information and records about the activities of the business. And it goes on to say that Julie Williams states that from her investigation she formed the view that as a result of your conduct Damien Grimsey was the relevant person for the claims made against the claim fund. [28] Mr Damien Grimsey’s response was that:16 I can take responsibility for this sort of thing, I’m willing to. Obviously I’ve made some errors. That’s fine. But this other business I am a bit, yeah I don’t think I’m responsible for. And:17 Yeah, fine but I mean I was just relaying information to him, I wasn’t, I mean I’d be there day to day you know open up the office, close the office. Make sure people showed up. But yeah, the trust, all that was Graham’s call or the admin call. The Chief Executive’s submissions [29] The Chief Executive submits as to Charge 1 (Acting as a Real Estate Agent/ Pretending to be a salesperson July to November 2008) that it is simply not plausible to suggest that Graeme Grimsey could maintain effective control during his illness,18 and refers to the evidence supporting a finding against Mr Damien Grimsey on this charge – including his not holding any licence; his role as described by him in the record of interview; and the comments of the receiver about his conduct. [30] As to Charge 2 (Acting as a Real Estate Agent 18 May 2011 and 30 January 2012) the Chief Executive says that the allegation is admitted by Damien Grimsey, and that he seems to suggest that his conduct in 16 Transcript of Interview 620. 17 Transcript of Interview 628. 18 Submissions Chief Executive filed 8 September 2014, p 3. -- 8 of 19 -- 9 acting unlicensed was due to a failure by his auditors to carry out the necessary audit and produce the required audit report.19 [31] The Chief Executive suggests that it more probable that Mr Damien Grimsey did not manage his trust account or trust records to the required standard which prohibited the required investigations and report to be produced. [32] As to Charge 3 (Wrongful conversion and false account) which relates to the amount of $7,687 owing to Mr Penglase, the Chief Executive says that it is apparent that Mr Damien Grimsey did receive the initial insurance cheque into his trust account and he then paid it into his general account. It submits that Mr Damien Grimsey now accepts responsibility for the lost funds and such acceptance is in one view an admission to the charge.20 [33] As to Charge 4 (Not a suitable person) the Chief Executive submits that this is a broad charge which considers all aspects of Mr Damien Grimsey’s conduct, and that if the tribunal finds this charge proved, it follows that he must be disqualified from holding any form of licence or certificate of registration issued under the Act.21 [34] The Chief Executive submits that the statement of Mr Damien Grimsey could easily be viewed as self-serving and lacks any great detail, and provides no independent support by way of documents or links to other witness statements to support its claims, and does not properly address each point raised in the materials. It submits that Mr Graeme Grimsey’s statement is short on detail, lacks corroboration in any form and should be given limited weight.22 Submissions of Mr Damien Grimsey [35] Mr Damien Grimsey filed documents on 27 June 2014 in response to the Directions given on 19 May 2014 requiring him to file any document not contained in the bundle of documents provided by the Chief Executive, upon which he proposed to rely, including any witness statements. He did not apply for an oral hearing. [36] His substantive documents were comprised of a two and a half page statement of himself, and a one and a half page statement of his father, both sworn on 26 June 2014. The other documents were a copy of the Directions, and of the particulars of the charges. [37] The statement of Mr Damien Grimsey commences that it is “In response to the allegations by Patrick Tully set out in Annexure B of his affidavit”. [38] In relation to Charge 1 (Acting as a Real Estate Agent / Pretending to be a Salesperson, July to November 2008) he states that his father was not 19 Submissions Chief Executive filed 8 September 2014, p 3. 20 Submissions Chief Executive filed 8 September 2014, p 4. 21 Submissions Chief Executive filed 8 September 2014, p 4. 22 Submissions Chief Executive filed 8 September 2014, p 4. -- 9 of 19 -- 10 incapacitated for the entire 5 months after suffering the two strokes, and that his father wanted daily reports once he was in rehabilitation such as arrears reports, rent reviews, lease renewals, trust reports generated by Tara and the administration team, and updates on vacancies, which he provided on his daily visits to see him.23 He states that Mr Graeme Grimsey continued to carry out his tasks as the licensee off-site until his return. [39] He states that he always remained an employee of SIPS and continued to receive a wage on a weekly basis, and never took over the business during the five months his father was away, or receive any reward.24 He states that he only ever conducted maintenance on the properties for sale or let, and did not negotiate for the buying, selling or letting. He states that as he was on-site a lot due to the maintenance program they had, he was also available to allow prospective tenants to view the properties and return completed applications to the office for processing.25 [40] In relation to Charge 2 (Acting as a Real Estate Agent 18 May 2011 and 30 January 2012) he states that he was unable to meet the requirements to have his licence renewed due to financial difficulty and the audit report, so his father and he started to make inquiries about selling the business and remaining rent roll. He states that26 ‘Although I will confirm I was unlicensed during this time, I was still operating with the best intentions to get it all resolved with little effects to the clients’. [41] In relation to Charge 3 ( Wrongful conversion and false account) as to the monies owing to Mr Penglase he states: 17. I can confirm that the payment was received and transferred to the general fund to pay for the minor repairs that were conducted on the property whilst seeking a contractor as mentioned above, however in regards to the balance of the monies I don’t recall and will accept responsibility for it. [42] He does not make any comment in relation to Charge 4 (Not a suitable person). [43] Mr Graeme Grimsey states that he was hospitalised in August 2008 for five months following two strokes, and that during this time both his son and Tara Jones both continued in their respective roles and he maintained control of the business whilst in hospital. He states that the office manager, Tara Jones, oversaw all administrative functions and personally carried out trust account end of month balances and relative duties including payments to owners; and that his son Damien oversaw maintenance contractors and ground maintenance staff. He states that he 23 Statement Damien Grimsey filed 27 June 2014 at [4]. 24 Statement Damien Grimsey filed 27 June 2014 at [5]. 25 Statement Damien Grimsey filed 27 June 2014 at [8]. 26 Statement Damien Grimsey filed 27 June 2014 at [12]. -- 10 of 19 -- 11 kept in touch by phone and his son couriered documents to him during his daily hospital visits.27 [44] He states that there was never any plan for his son to take over his business, that he intended to work to the age of 75 years, and his son was “learning the ropes” to set up his own business. He states that his son had absolutely nothing to do with his trust fund, and was never empowered to take control of his business.28 [45] Mr Graeme Grimsey states29 that he told the Office of Fair Trading that he would take full responsibility for the deficit in the Trust Account which was brought about by “advances” being drawn from the trust fund during the month to meet operating costs, especially wages. Discussion [46] The relevant parts of the legislation are: 496 Grounds for starting disciplinary proceedings (1) The following are grounds for starting a disciplinary proceeding against a licensee or registered employee – … (b) the licensee or employee has contravened or breached – (i) this Act, including a code of conduct; or (ii) an undertaking given under chapter 16, part 2; or (iii) a corresponding law; … (g) for a licensee – (i) the licensee is not a suitable person to hold a licence 160 Acting as a real estate agent (1) A person must not, as an agent for someone else for reward, perform an activity that may be done under the authority of a real estate agent’s licence unless the person– … (2) The person must not act as a real estate agent unless– (a) holds a real estate agent’s licence and the act is done under the authority of the person’s licence; or (b) the act is otherwise permitted under this or another Act. Maximum penalty – 200 penalty units or 2 years imprisonment. 161 Pretending to be real estate salesperson 27 Statement Graeme Grimsey filed 27 June 2014, p 1. 28 Statement Graeme Grimsey filed 27 June 2014, p 2. 29 Statement Graeme Grimsey filed 27 June 2014, p 1. -- 11 of 19 -- 12 (1) A person must not act as a real estate salesperson unless the person holds a registration certificate (real estate salesperson). Maximum penalty – 200 penalty units. 573 Wrongful conversion and false accounts (1) This section applies if a licensee, in the performance of the activities of a licensee, receives an amount belonging to someone else. (2) A licensee who – (a) dishonestly converts the amount to the licensee’s own or someone else’s use; or (b) dishonestly renders an account of the amount knowing it to be false in a material particular; commits a crime. Maximum penalty – 1000 penalty units or 5 years imprisonment. 529 Orders tribunal may make on disciplinary hearing (1) The tribunal may make 1 or more of the following orders against a person in relation to whom the tribunal finds grounds exist to take disciplinary action under this Act – (summarised in italics) (a) (Reprimand) (b) (A fine of not more than 200 penalty units) (ba) (compensation) (c) (suspend licence) (d) (cancel licence or disqualify permanently from holding a licence) [47] This is a disciplinary matter. Carter J made the following comments in Re Seidler:30 In Australia and in England the appropriate standard of proof in disciplinary actions has been closely examined by the courts and this standard is regularly applied in practice by disciplinary bodies. The standard of proof is proof on the balance of probabilities possessing as that standard does the required measure of flexibility so that the more serious the allegation, the higher the degree of probability that is required. [48] In disciplinary matters the Briginshaw standard is often referred to. It can be described as reasonable satisfaction having regard to the nature and consequence of the facts to be proved. [49] Briginshaw was a decision of the High Court of Australia.31 Dixon J made the following comments as to the standard required in a matter that is not a criminal case, but goes beyond a civil case in its ramifications:32 The truth is that, when the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found. It cannot be found as a result of a mere mechanical comparison 30 [1986] 1 Qd R 486 at 490. 31 Briginshaw v Briginshaw (1938) 60 CLR 366. 32 Ibid 362. -- 12 of 19 -- 13 of probabilities independently of any belief in its reality. No doubt an opinion that a state of facts exists which may be held according to indefinite gradations of certainty; and this has led to attempts to define exactly the certainty required by the law for various purposes. Fortunately, however, at common law no third standard of persuasion was definitely developed. Except upon criminal issues to be proved by the prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. [50] As to Charge 1, Mr Damien Grimsey contends that he was just an employee involved in maintenance, and acted as a courier for his father who was absent from the business for five months. His father supports those contentions. [51] There is a clear overall pattern of behaviour discernible in the activities of Mr Graeme Grimsey and Mr Damien Grimsey. Mr Graeme Grimsey was the founder of the business, it was a small enterprise as to the numbers of staff, and his son Damien was involved in initially less responsible areas of the business such as organising maintenance, but was “being groomed” to take over the business, or to strike out in the real industry on his own behalf. [52] There were major flaws in the financial side of the business run by Mr Graeme Grimsey, resulting in the business being placed into receivership, and substantial claims of the order of $290,000 being made on and paid out by the Fund. [53] Mr Graeme Grimsey did not appoint anyone to act in his stead whilst he was in hospital. Mr Damien Grimsey suggests that the office functioned as normal, and that Ms Jones dealt with any Trust Account transactions as a matter of course. [54] The real estate office was a small office with a small staff. It is not realistic to think that Ms Jones would assume the liability and responsibility of making decisions and authorising payments from the business accounts, both in the General and Trust account, of her own volition. She would have been under the direction of some person in actual or apparent authority. [55] Mr Damien Grimsey contends that he was just dealing with maintenance matters. It appears clear however that he assumed his father’s persona in his absence. Whilst he says he was just a courier, he would have directed the staff with personal authority, which they did not challenge. [56] The suggestions put by Mr Graeme Grimsey and Mr Damien Grimsey, that Mr Graeme Grimsey was effectively and thoroughly running and -- 13 of 19 -- 14 controlling the business from his hospital bed whilst recuperating from two strokes, and that his son was just a message carrier, is fanciful. [57] Mr Damien Grimsey certainly for all practical purposes assumed and exercised control of the business in his father’s absence, and the staff of the business accepted that situation and conformed with it. [58] The difficulty in that scenario is that Mr Grimsey was not authorised, by way of possessing the necessary licence, to act in this way, and had no formal approval to do so. His actions were outside the purview of the Act. [59] The public are entitled to expect that a licenced person, who has full knowledge of the applicable regulations, and is committed to a Code of Ethics and behaviour, is actually conducting the day to day business of a real estate agency. [60] The legislation regulating the conduct of real estate agents is established to protect the public and to maintain a high quality of professional practice and procedure. It flouts these intentions to have unlicensed persons acting in a cavalier fashion without authority and oversight. [61] Whilst it is understandable that for a short period, his son might have facilitated the carrying of messages, that is not an acceptable procedure for any extended period. When Mr Graeme Grimsey suffered his second stroke, the outcome would have been unclear, and at least at that stage, proper steps should have been taken to bring a licenced person in to actually supervise and conduct the day to day running of the business. [62] In this case it is clear that there were serious long-standing shortcomings in the management of the business by Mr Graeme Grimsey, which culminated in the business being placed into receivership. A competent and licenced Manager may have been able to identify and perhaps remedy these short-comings, thereby avoiding or reducing the loss to the clients and to the fund. [63] Mr Damien Grimsey did not apply for an oral hearing, therefore I do not form an opinion based on credibility, but upon being satisfied on the material presented. In terms of the Briginshaw standard, the question becomes whether I am reasonably satisfied that Mr Damien Grimsey was acting as a real agent in that period, having regard to the serious consequences of that finding. [64] The circumstances are compelling that for five months there was no licenced person in actual attendance at the business, and that Mr Damien Grimsey was acting for all intents and purposes as the principal of the business, and was conducting the work of a real estate agent whilst not being licenced to do so, as contended by the Chief Executive. In all the circumstances, I am reasonably satisfied, and find that Charge 1 is proved. -- 14 of 19 -- 15 [65] Mr Damien Grimsey concedes as to Charge 2 that he acted as a Real Estate Agent whilst unlicensed. That concession is borne out by the material put forward by the Chief Executive, and I find that Charge 2 is proved. [66] Mr Damien Grimsey also concedes as to Charge 3 that the monies that should have been paid to Mr Penglase were not paid to him. The funds were obviously diverted to some other end, and Mr Damien Grimsey does not attempt to give any explanation. [67] The funds were received by Mr Damien Grimsey, in his performance of the activities of a licensee, as monies belonging to Mr Penglase. The funds were wrongfully converted, and were not properly accounted for. In the absence of any explanation by Mr Damien Grimsey, I am satisfied that the funds were dishonestly converted within s 573(2) of the Act. I therefore find that Charge 3 is proved. [68] Charge 4 of not being a suitable person is a serious charge in its ramifications. Mr Damien Grimsey surprisingly has made no response to this charge. [69] Mr Damien Grimsey acted as a Real Estate Agent without a licence whilst his father was recuperating from the two strokes. I would be prone to exercising leniency towards Mr Damien Grimsey as to operating without a licence whilst his father was in hospital, if that was the only charge. In isolation, this could be seen as the actions of a son mistakenly trying to help his father and trying to keep his business afloat at a difficult time. [70] However, the subsequent conduct shown by his again acting without a licence some years later, and the mishandling of the Penglase funds, shows that Mr Damien Grimsey has either a significant lack of knowledge of the rules and procedures required of a real estate agent, or a disregard for them. [71] Mr Damien Grimsey should have been well aware of his duties and obligations, having observed the consequences of failing to conform to proper standards through the receivership of his father’s business. The process of receivership should have heightened the importance of regulation to him. Nevertheless, his own business later fell into receivership after a period when he again acted without being licenced to do so. [72] The actions of Mr Damien Grimsey in setting up a separate Trust Account with a similar name and the same ABN as his father’s previous one, are very troubling, and can be seen as intending to deceive the public as to who they were dealing with, and to circumvent the receivership in his father’s business. Whilst Mr Damien Grimsey seems to suggest this was some sort of administrative oversight or mix-up, the handling of a Trust Account is a very serious matter. It is unlikely that this was not a deliberate action, or worrying if it is true as it shows a significant lack of care and competence. -- 15 of 19 -- 16 [73] The letter that Mr Damien Grimsey sent to clients after the appointment of Ms Williams as receiver of his business is also very troubling. It holds out that he would shortly be obtaining his licence back, when Ms Williams had plainly told him that was unlikely. It downplays the significance of the receivership, and gives clients the impression of a minor temporary hiccup in the handling of their affairs, and that then all would be back to normal. These representations were knowingly false and were misleading, and were designed to induce the clients to keep their business with the agency. [74] The test to determine whether a real estate agent was a fit and proper person has been expressed as:33 (a) That improper conduct has occurred (b) That improper conduct is likely to occur (c) Whether it can be assumed that improper conduct will not occur (d) Whether the general community will have confidence that it will not occur. [75] Improper conduct has occurred by Mr Damien Grimsey acting as a real estate agent whilst not licenced, and by the conversion of monies. His conduct shows that he has not had proper regard for the due regulation of the industry and for the provisions of the Act. In the absence of any expression of remorse by Mr Damien Grimsey or any acknowledgment that he has breached the Act, the general community could not have confidence that such improper conduct will not reoccur. [76] Accordingly, a finding that he is not a suitable person to act as a real estate agent is borne out by his actions and conduct. I therefore find that charge 4 is made out. [77] I therefore find that grounds exist to take disciplinary action against Mr Damien Grimsey on the basis of breaching the Act as discussed, pursuant to s 496 of the Act. Penalty [78] The Tribunal may make orders against a person in relation to whom the Tribunal finds grounds exist to take disciplinary action, pursuant to s 529 of the Act. [79] The Chief Executive submits that the conduct of Mr Damien Grimsey as a whole is most serious and requires a significant penalty be imposed so as to ensure the ongoing protection of the public and the integrity of the real estate industry, that he has shown limited remorse for his conduct, and 33 Chief Executive Department of Justice and Attorney General v Keyte [2012] QCAT 244 at [10]. -- 16 of 19 -- 17 that he was fully aware of his obligations under the Act at the time of these contraventions, and that this wilful conduct is of grave concern to it.34 [80] It refers to three comparative cases, and submits that the Tribunal should consider the protection of the public as a paramount consideration and unlicensed and fraudulent conduct as conduct which significantly undermines the integrity of the industry.35 [81] The Chief Executive seeks the following penalties: The respondent be reprimanded The respondent be disqualified from holding any form of licence or certificate of registration issued under the Act for 10 years The respondent be prohibited from being an executive officer of a corporation which holds any form of licence issued under the Act for 10 years The respondent pay a fine of $15,000 to the Chief Executive on or before 1 December 2014. [82] The comparative cases provided by the Chief Executive are as follows: 1. Chief Executive, Department of Tourism, Racing and Fair Trading v Winn K.J. [2003] QCCCTPAMD 8 (13 November 2003) [83] Mr Winn was convicted in the Magistrates Court of wrongful conversion of $39,500, and of acting as an unlicensed agent on three occasions. He had repaid $28,142.50 of the sum dishonestly converted. He had earned commission of $20,487.50 for the transactions he undertook whilst not licensed to do so. [84] The Tribunal found that he was not a suitable person to hold a licence under the Act, and he was disqualified permanently from holding licence or registration certificate, or being an executive officer of a corporation that holds a licence. 2. Chief Executive Department of Justice and Attorney General v Keyte [2012] QCAT 244 (12 June 2012) [85] Mr Keyte was convicted in the Magistrates Court of eleven breaches of the Act of acting as a real estate agent even though he was unlicensed; eleven breaches of borrowing his wife’s real estate licence; and one breach of failing to have his trust account audited within two months of stopping business. [86] The learned Senior Member found that improper conduct had occurred, and that given Mr Keyte’s lack of insight, was satisfied that improper conduct is likely to occur unless disciplinary action is taken. She was satisfied that Mr Keyte’s lack of insight, together with his breaches of his obligations, meant that he was not a suitable person to hold a licence. 34 Submissions Chief Executive, p 7. 35 Submissions Chief Executive, p 8. -- 17 of 19 -- 18 [87] The Tribunal ordered that Mr Keyte be disqualified from holding a licence or registration certificate, or being an Executive Officer of a corporation that holds a licence or registration certificate under the act for a period of seven years; and ordered he pay a fine of $2,250. 3. Chief Executive Department of Justice and Attorney-General v Hoppner [2014] QCAT 296 [88] Disciplinary grounds were found to exist on the grounds of giving rise to a claim against the fund, incompetence, and conversion. [89] Orders were made that he pay the amount of $35,398.44 paid out of the fund, and pay amounts of $8,668.11 and $4,246.36 to named persons. [90] Mr Damien Grimsey has made no submissions as to penalty. [91] The nature of the offences in this matter is most analogous to that in Keyte. It is apparent that a period of disqualification must apply for the protection of the public and to reinforce to Mr Grimsey the need to comply with the legislation. I consider that a similar period of disqualification of seven years is appropriate in this matter, in the circumstances. [92] The Chief Executive seeks a fine of $15,000. This is significantly greater than the fine in Keyte of $2,250, and in Hoppner where a fine of $10,000 was applied. I do not consider that the magnitude of these offences is as severe as those in Hoppner, but consider that having regard to the more blatant nature of Mr Grimsey’s conduct, that a higher fine than in Keyte should apply, and I find that a fine of $5,000 is appropriate in the circumstances. [93] In the Application filed on 16 May 2014, the Chief Executive seeks an order that Mr Damien Grimsey pay Peter Penglase the sum of $7,687 as compensation pursuant to s 529(1)(ba). I am satisfied on the material that this amount is due and owing to Mr Penglase. An order of this nature was made in Hoppner as noted by the Chief Executive in its submissions. I am satisfied that a compensation order should be made accordingly. [94] The Chief Executive sought an order for costs in the Application, but has made no submissions in that regard, so I will make no order as to costs. [95] I will allow Mr Damien Grimsey a period of 45 days to make the payments in the orders. [96] I order that: 1. Mr Damien Grimsey is disqualified from holding any form of licence or certificate of registration issued under the Property Agents and Motor Dealers Act 2000, or any subsequent or similar Act, for a period of seven years from the date of this decision. 2. Mr Damien Grimsey is prohibited from being an executive officer of a corporation which holds any form of licence issued under the -- 18 of 19 -- 19 Property Agents and Motor Dealers Act 2000, or any subsequent or similar Act, for a period of seven years from the date of this decision 3. Mr Damien Grimsey will pay a fine of $5,000 to the Chief Executive Department of Justice and Attorney General within 45 days of the date of this decision. 4. Mr Damien Grimsey will pay to Mr Peter Penglase the sum of $7,687.00 as compensation within 45 days of the date of this decision. -- 19 of 19 --