Chief Executive Department of Justice and Attorney-General v Faraj [2011] QCAT 640

CITATION: Chief Executive Department of Justice and Attorney-General v Faraj [2011] QCAT 640 PARTIES: Chief Executive Department of Justice and Attorney-General v Rachel Marie Faraj APPLICATION NUMBER: OCR182-11 MATTER TYPE: Occupational regulation matters HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Peta Stilgoe, Member DELIVERED ON: 14 December 2011 DELIVERED AT: Brisbane ORDERS MADE: 1. Rachel Marie Faraj is permanently disqualified from holding a licence or registration certification under the Property Agents and Motor Dealers Act 2000. 2. Rachel Marie Faraj is permanently disqualified from being an Executive Officer of a corporation that holds a licence or registration certificate under the Property Agents and Motor Dealers Act 2000. 3. Rachel Marie Faraj shall pay to the Chief Executive Department of Justice and Attorney-General a fine of $2,250 by 24 February 2012. 4. Rachel Marie Faraj shall pay to the Chief Executive Department of Justice and Attorney-General costs fixed at $510 by 24 February 2012. CATCHWORDS: REAL ESTATE AGENT – DISCIPLINARY PROCEEDINGS – where agent failed to send bond to RTA – where agent failed to account for rent received – where agent failed to supervise employee – where agent convicted for breaches of Residential -- 1 of 5 -- 2 Tenancies Act – whether grounds for disciplinary action – penalty to be applied Property Agents and Motor Dealers Act 2000, s 496 The Chief Executive, Department of Employment, Economic Development and Innovation v Welburn [2010] QCAT 202 The Chief Executive, Department of Tourism, Fair Trading and Wine Industry Development v Cumerford [2006] CCT PD005-06 APPEARANCES and REPRESENTATION (if any): This matter was heard on the papers in accordance with section 32 of the Queensland Civil and Administrative Tribunal Act 2009. REASONS FOR DECISION [1] The Chief Executive Department of Justice and Attorney-General has applied to start disciplinary proceedings against Ms Faraj. The Chief Executive submits that proper grounds exist for disciplinary proceedings against Ms Faraj in that: a) Pursuant to s 496(1)(g)(iii) of the Property Agents and Motor Dealers Act 2000, Ms Faraj has been incompetent or acted in an unprofessional way. b) Pursuant to s 496(1)(d) of the Act, an amount had to be paid from the statutory fund because Ms Faraj’s actions gave rise to a claim against the fund. [2] Ms Faraj held a real estate agent’s licence from 8 January 2007 to 8 January 2011. McLachlan Manor Pty Ltd was incorporated in 14 August 2006 and deregistered on 16 July 2010. It, too, held a real estate agent’s licence from 8 January 2007. The business name McLachlan Manor Real Estate was registered from 7 November 2006 to 22 July 2010. Ms Faraj was the principal of the company. Acting in an incompetent or unprofessional way [3] On 10 June 2009, Ms Faraj was convicted in the Brisbane Magistrates Court of two breaches of the Residential Tenancies Act 1994 (“RT Act”). She was fined a total of $4,000 and a conviction was recorded. The basis of the conviction was that Ms Faraj, as executive officer of McLachlan Manor Pty Ltd, failed to ensure that the company complied with the RT Act. The company’s breach was the failure to pay rental bond money to the Residential Tenancies Authority within 10 days of receipt of that money. -- 2 of 5 -- 3 [4] On 27 January 2010, Ms Faraj was convicted of two further breaches of the RT Act in that she failed to comply with the requirement to give information to an inspector. She was fined a total of $1,500 and a conviction was recorded. [5] From 8 February 2008 to 14 August 2008, the company managed a rental property owned by Mr Daniel White. Mr White has provided a statement to the Chief Executive stating that the company collected $780 rent from the tenant that was not deposited to Mr White’s account. [6] As evidence of Ms Faraj’s incompetence, the Chief Executive also relies upon the acts or omissions which gave rise to the convictions referred to at [3] above. I have been provided with copies of statements which confirm that Ms Faraj received rental bond money and that she failed to pay that money to the Residential Tenancies Authority. [7] There is a final allegation of Ms Faraj’s incompetence in failing to supervise properly her employee Nathan White. On 8 January 2008, Richard Popple placed his property for sale with the company. Within a very short period, Mr Popple signed a contract of sale to Nathan White. Mr White was an employee of the company but Ms Faraj did not take any steps to ensure that, before the contract was entered into, Nathan White had received Mr Popple’s written acknowledgement, in the approved form, that he was aware of, and had consented to, Nathan White obtaining a beneficial interest in the property. Further Ms Faraj took no steps to ensure that Mr Popple did not pay any commission on that sale. [8] The Chief Executive’s evidence in relation to these matters is careful and well-documented. I am satisfied that each of the instances of incompetent or unprofessional conduct has been established. Payments from the fund [9] The Chief Executive has provided documentation showing that, because of Ms Faraj’s act or omission, the following payments have been made from the fund: a) $715.65 to Daniel White.1 b) $3,032.97 to Karen Maddison.2 c) $5,220.00 to Richard Popple.3 d) $980.00 to Angela Arthur and Adam Herd.4 [10] I am satisfied that the Chief Executive has made those payments and that the payments were necessary because of the act or omission of Ms Faraj. Penalty [11] It follows from my finding that Ms Faraj has acted incompetently or unprofessionally, and that there were payments from the statutory fund 1 Decision of the Chief Executive dated 16 March 2010. 2 Decision of the Chief Executive dated 16 March 2010. 3 Decision of the Chief Executive dated 16 March 2010. 4 Decision of the Chief Executive dated 24 August 2010. -- 3 of 5 -- 4 because of her act or omission, that proper grounds do exist for disciplinary proceedings against Ms Faraj . [12] The Chief Executive submits that the appropriate penalty should be that Ms Faraj: a) Is reprimanded. b) Pay a fine of 40 penalty units or $3,000. c) Is disqualified from being the holder of any form of licence or registration issued under PAMDA for a period of five years. d) Is disqualified from being an executive officer of a corporation that holds a licence issued under PAMDA for five years. e) Pay the Chief Executive’s costs of and incidental to this proceeding fixed at $510. [13] Ms Faraj did not make any submissions about penalty. [14] One of the objects of PAMDA is to protect consumers against particular undesirable practices associated with the promotion of residential property.5 The objects of the Act are achieved mainly through: a) Ensuring only suitable persons are licensed.6 b) Ensuring that those who carry on business maintain close personal supervision of the way the business is conducted.7 c) Providing protection for consumers in their dealings with licensees.8 [15] Ms Faraj has not demonstrated any appreciation of these matters. Public confidence in the administration of PAMDA requires that she be reprimanded and the imposition of a significant sanction. [16] The Chief Executive has referred me to the comparative cases of The Chief Executive, Department of Employment, Economic Development and Innovation v Welburn9,and The Chief Executive, Department of Tourism, Fair Trading and Wine Industry Development v Cumerford10. [17] In a seven month period, Ms Welburn collected eight rental bonds, of which two were paid into her trust account but none was paid to the Residential Tenancies Authority. She also collected rent of $30,592.50 but $18,481.93 of that amount was withheld from the owner. The owner made a successful claim against the fund for $18,481.93. Ms Welburn was disqualified from holding a licence permanently, fined 70 penalty units and ordered to pay costs of $745. The Chief Executive submits that Ms Faraj’s offending behaviour is not as serious as that of Ms Welburn, as Ms Welburn’s behaviour continued over a longer period of time and involved more money. 5 Section 10(2) PAMDA. 6 Section 10(3)(a)(i) PAMDA. 7 Section 10(3)(a)(ii) PAMDA. 8 Section 10(3)(b)(i) PAMDA. 9 [2010] QCAT 202. 10 [2006] CCT PD005-06. -- 4 of 5 -- 5 [18] Like Ms Faraj, Ms Cumerford was also convicted in the Magistrates Court for breaches of the RT Act. She, too, was permanently disqualified. She was also fined 20 penalty units and ordered to pay costs of $780. The Chief Executive considers Ms Faraj’s offending behaviour is more serious than Ms Cumerford’s offending behaviour. [19] The only material I have from Ms Faraj is a series of emails she sent to Daniel White. That email thread shows that Ms Faraj deliberately mislead Mr White about what happened to his rent: firstly, she assured Mr White that all disbursements were made correctly and that, if any further rent was paid, it was not paid to her. Then, Ms Faraj told Mr White she had made some disbursements. Finally, Ms Faraj blamed her inability to pay the outstanding amount on her inability to get statements from her bank. None of those statements was true. The email thread shows that Ms Faraj had no regard for the truth, no regard for her client Mr White, and no understanding of the very high obligations placed on real estate agents when handling money that belongs to others. The tribunal imposed a permanent disqualification in both Welburn and Cumerford. There is nothing on the file that persuades me that I should take a different view. Ms Faraj should be disqualified from holding a licence, or being the executive officer of a corporation that holds a licence, permanently. [20] In recognition of the modest amounts that were paid from the statutory fund, I order that Ms Faraj pay a penalty of 30 penalty units. At the time of Ms Faraj’s offending behaviour, the value of a penalty unit was $75. Therefore, Ms Faraj should pay a penalty of $2,250. [21] As the Chief Executive has pointed out, disciplinary proceedings are brought in the public interest. It has incurred costs to bring these proceedings to the tribunal and it is right that Ms Faraj should bear the burden of those costs. The claim for $510 is modest and justified by the Magistrates Court Scale. Orders [22] Rachel Marie Faraj is permanently disqualified from holding a licence or registration certification under the Property Agents and Motor Dealers Act 2000. [23] Rachel Marie Faraj is permanently disqualified from being an Executive Officer of a corporation that holds a licence or registration certificate under the Property Agents and Motor Dealers Act 2000. [24] Rachel Marie Faraj shall pay to the Chief Executive Department of Justice and Attorney-General a fine of $2,250 by 24 February 2012. [25] Rachel Marie Faraj shall pay to the Chief Executive Department of Justice and Attorney-General costs fixed at $510 by 24 February 2012. -- 5 of 5 --