Brady v The Chief Executive, Department of Tourism, Fair Trading and Wine Industry Development [2007] QDC 328

DISTRICT COURT OF QUEENSLAND CITATION: Brady v. The Chief Executive, Department of Tourism, Fair Trading and Wine Industry Development [2007] QDC 328 PARTIES: DARRELL JAMES BRADY Applicant/Appellant v THE CHIEF EXECUTIVE, DEPARTMENT OF TOURISM, FAIR TRADING AND WINE INDUSTRY DEVELOPMENT Respondent FILE NO/S: No 2853 of 2007 DIVISION: Civil PROCEEDING: Application for Leave to Appeal/Appeal ORIGINATING COURT: Commercial and Consumer Tribunal DELIVERED ON: 9 November 2007 DELIVERED AT: Brisbane HEARING DATE: 23 October 2007 JUDGE: Martin SC DCJ ORDER: 1. Application for leave to appeal granted. 2. Appeal allowed. 3. Orders as per para [1]. CATCHWORDS: COMMERCIAL AND CONSUMER TRIBUNAL – DISCIPLINARY CHARGES – CHARGE ADMITTED – ERROR OF LAW – where the applicant/appellant admitted contravention of s 385(1) of the Property Agents and Motor Dealers Act 2000 – where the material presented to the tribunal disclosed that the applicant/appellant could not in law have contravened the section – where the admitted contravention was taken into account in determining penalty Commercial and Consumer Tribunal Act 2003 (Qld) s 100 Property Agents and Motor Dealers Act 2000 (Qld) s 385(1) Meissner v The Queen (1995) 184 CLR 132 cited Australian Broadcasting Tribunal v Bond & Ors (1990) 170 CLR 321 cited Re: A Practitioner of the Supreme Court (1927) SASR 58 -- 1 of 9 -- 2 applied The Chief Executive, Department of Tourism, Fair Trading and Wine Industry Development v Reza Enterprises Pty Ltd – Commercial and Consumer Tribunal decision delivered 20 February 2007 by Mr R V Hanson QC cited COUNSEL: K. Howe for the applicant/appellant R. Vize employed by and for the respondent SOLICITORS: O’Dwyer & Bradley for the applicant/appellant [1] On 23 October 2007 I made the following orders: (i) Leave to appeal be granted. (ii) The appeal be allowed and the following orders made:- (iii) The orders of Member Bradley of 11 September 2007 be varied. (iv) Charges 1 and 3 be dismissed. (v) The appellant be fined the sum of $1,000 in respect of Charge 2 and pay the sum of $200 for costs. (vi) All licences issued under the Property Agents and Motor Dealers Act 2000 to the appellant be reinstated forthwith. (vii) The respondent pay the appellant’s costs of and incidental to the appeal to be assessed on a standard basis. (viii) The respondent be granted an Indemnity Certificate under the Appeal Costs Fund Act 1973. [2] I now give my reasons. The Charges [3] The respondent brought disciplinary charges against the appellant in the Commercial and Consumer Tribunal (“the Tribunal”). The appellant, a person with -- 2 of 9 -- 3 a lengthy and worthy career in the real estate industry, was charged with three disciplinary charges: Disciplinary Charge 1 alleged that the appellant, in breach of s 385(1) of the Property Agents and Motor Dealers Act 2000 (“the Act”) had drawn an amount from the appellant’s purported trust account to pay the appellant’s transaction fee and the draw occurred before the transaction was finalised. Disciplinary Charge 2 alleged that the appellant, in contravention of s 379 of the Act, failed to, immediately on receiving the amount, pay it into the appellant’s general trust account. Disciplinary Charge 3 alleged that the appellant, in performing an activity, acted in an unprofessional way. The conduct referred to in the charges related to four contracts of sale. The appellant was not the salesperson. There is absolutely no aspect of dishonesty in relation to this matter. [4] Before the Tribunal, the appellant admitted the three charges against him. The parties consented to the issue of penalty being decided “on the papers” without the need for a hearing. Written submissions on penalty were provided to the Tribunal by the parties. [5] Both parties submitted that the appropriate penalty for the appellant was that he be reprimanded and ordered to pay a fine. The only contest on penalty between the parties was the amount of the fine. [6] In the event, the learned Member fined the appellant $1,500, cancelled his Real Estate Agent licence and disqualified him from holding such a licence for five years, which disqualification would be suspended after six months if within that -- 3 of 9 -- 4 period he successfully completed a course approved by the respondent in dealing with trust moneys. Re: Charge 1 [7] Charge 1 ought never have been brought against the appellant. Of course, the appellant, on legal advice,1 wrongly admitted the charge. The material available to the Tribunal disclosed that the appellant had not contravened s 385(1) of the Act. Apart from the written submissions, the Tribunal also had, as part of the material before it, a statement by the appellant dated 8 June 2007. At para 15 of that statement the appellant disclosed that he had been remunerated by the owners of the agency on a weekly basis and “At no time did I receive any commission from any property sales.” [8] At para 17 of the written submissions the appellant’s position in this regard was again emphasised: “As the respondent” (now appellant) “did not act as salesperson in the sale of the four properties it follows that the respondent did not receive any commission or any other benefit in relation to the pre- drawing of commission in the sale of those properties.” [9] Notably, the learned Member’s Reasons at para 30 specifically set out the appellant’s assertions that he had been remunerated on a weekly basis and that at no time had he received any commission in relation to the pre-drawing of commission. [10] The disclosure that the appellant had not received any commission (transaction fee) ought to have been sufficient to inform the parties and the Tribunal that Charge 1 was fundamentally ill-conceived. The charge erroneously alleged that the appellant had pre-drawn his transaction fee. 1 Affidavit of the appellant sworn 22 October 2007 and filed in these proceedings. -- 4 of 9 -- 5 [11] However, the material also disclosed that contrary to the allegation in Charge 1 that the appellant pre-drew funds from his purported trust account, the appellant did not operate the relevant account. In the event that it is thought that “permitting” or “encouraging” others to pre-draw funds from the account may be relevant to this charge, as will become obvious from the evidence set out later, the appellant not only did not permit or encourage the pre-drawing of funds, he positively discouraged it. [12] The material before the Tribunal in relation to the relevant account was as follows. Sally and Martin Millard owned both the Harcourts agency at Ferny Hills/Keperra (the appellant’s agency) and a Harcourts agency at Alderley. The deposits from sales through the appellant’s agency were banked with the Harcourts Alderley account. The particulars provided by the respondent stated that the Harcourts Alderley account operated in the name of Sally Millard. In para 16 of the appellant’s statement of 8 June 2007, the appellant referred to the Harcourts Alderley trust account operated by Shane Scherf (the licensee of Harcourts Alderley). Whilst the material may have been confusing as to who of Millard or Scherf operated that particular account, it was evident that the appellant did not. [13] On the material before the Tribunal, the conduct alleged against the appellant in Charge 1 was not only not established, it was shown not to have occurred. The Parties’ Attitude on Appeal [14] By the time the matter came before me, the parties were of the one mind that Charge 1 was ill-conceived and should fall. I granted leave to appeal and, at the request of the parties, proceeded to hear the appeal. After some argument before me, at the request of the parties, time was given to the parties to enable them to discuss matters generally. -- 5 of 9 -- 6 [15] When this Court resumed, the parties jointly sought the orders which I have made and are set out in para [1] above. Error of Law [16] Section 100 of the Commercial and Consumer Tribunal Act 2003 provides relevantly as follows: “(1) A party to a proceeding before the tribunal may appeal to the District Court against a decision of the tribunal, with the court’s leave, only on the ground of – (a) error of law; or (b) excess, or want, of jurisdiction.” [17] In Meissner v The Queen2, Dawson J said this: “It is true that a person may plead guilty upon grounds which extend beyond that person’s belief in his guilt. He may do so for all manner of reasons: for example, to avoid worry, inconvenience or expense; to avoid publicity; to protect his family or friends; or in the hope of obtaining a more lenient sentence than he would if convicted after a plea of not guilty. The entry of a plea of guilty upon grounds such as these nevertheless constitutes an admission of all the elements of the offence and a conviction entered upon the basis of such a plea will not be set aside on appeal unless it can be shown that a miscarriage of justice has occurred. Ordinarily that will only be where the accused did not understand the nature of the charge or did not intend to admit he was guilty of it or if upon the facts admitted by the plea he could not in law have been guilty of the offence …”. (emphasis added) [18] Notwithstanding the appellant’s admission to Charge 1, the material presented to the Tribunal upon that admission disclosed that the appellant could not in law have contravened s 385(1) of the Act. In those circumstances it was a clear error of law by the Tribunal in accepting the appellant’s admission to the charge and in proceeding to a determination of penalty, such penalty to be reflective of the appellant’s overall misconduct, by wrongly taking into account that the appellant had contravened s 385(1) of the Act.3 2 (1995) 184 CLR 132 at 157. 3 See also Australian Broadcasting Tribunal v Bond & Ors (1990) 170 CLR 321 at 355-358. -- 6 of 9 -- 7 Re: Charge 3 – Acting in an Unprofessional Way [19] Proof that the appellant had acted in an unprofessional way as alleged in Charge 3 was dependant to a large extent on proof of the conduct alleged in Charges 1 and 2. Once Charge 1 fell, it seems clear, from the orders jointly sought, that both parties were of the view that Charge 3 must also fall. [20] With respect, I agree. Given the circumstances which comprised the contravention in Charge 2, and given the circumstances relating to the pre-drawing of funds as those circumstances concerned the appellant, there was no evidence to justify a finding that the appellant acted in an unprofessional way. [21] In Re: A Practitioner of the Supreme Court,4 the court said: “In our view unprofessional conduct is not necessarily limited to conduct which is disgraceful or dishonourable in the ordinary sense of these terms. It includes, we think, conduct that may reasonably be held to violate or fall short to a substantial degree that standard of professional conduct observed or approved of by members of the profession of good repute and competence.” [22] The uncontested circumstances giving rise to the appellant’s misconduct comprising Charge 2 may be summarised as follows. In June 2006 the appellant arranged to act as principal of Harcourts Ferny Hills/Keperra for a very short period of time whilst the owners, the Millards, obtained their principal licences. It is to be remembered that the Millards also owned Harcourts Alderley. Before taking up the position on 7 July 2006 the appellant opened a trust account for Harcourts Ferny Hills/Keperra in his name as licensee of that agency. After the appellant had taken up his position he was advised by the Millards that their accountant had provided advice that trust funds generated through the Ferny Hills/Keperra agency need not be held in a separate trust account but could be held in the Harcourts Alderley trust account. 4 (1927) SASR 58 at 60. -- 7 of 9 -- 8 The appellant had intended to query this advice, but, regrettably, he did not. In the event, deposits generated through Harcourts Ferny Hills/Keperra were lodged in the Harcourts Alderley trust account. [23] The circumstances concerning the pre-drawing of commissions may be summarised as follows. On or about 16 July 2006 the appellant discovered a clause in one of the contracts in relation to pre-drawing commission on the date the contract became unconditional. The appellant immediately spoke to the manager of Harcourts Ferny Hills/Keperra about the clause and advised him that the clause was inappropriate. The manager advised the appellant that he had received legal advice from a solicitor that the clause was lawful. The manager further advised the appellant that the clause had been used since approximately March 2005 and had become usual practice. The appellant was sufficiently concerned to contact colleagues at Tribeca Learning (Aust.) Pty Ltd, an organisation which, inter alia, trains the real estate sector. The appellant’s colleagues agreed with the appellant that the clause was inappropriate and should no longer be used. In mid August 2006 the appellant again spoke to the manager of Harcourts Ferny Hills/Keperra and told him that he was unhappy with the clause and believed that it should be removed and no longer used. The manager again informed the appellant that the legal advice confirmed that the clause could be lawfully used. It seems the appellant continued to communicate to others his dissatisfaction about the clause but did not force its removal. In mid September 2006 the appellant advised the manager that from that date onwards the clause was no longer to be used in any contract. [24] As stated above, in my view, given all of the circumstances, there could be no justification for a finding that the appellant’s conduct was unprofessional. The uncontested material showed that the appellant’s failure to use the trust account -- 8 of 9 -- 9 which he had opened specifically for use by the Ferny Hills/Keperra agency, only came about as a result of the owners’ direction, on advice from their accountant. The uncontested material showed that when the appellant attempted to dissuade the use of the pre-drawing clause in the contracts, he was, in effect, “shouted down” by assertions that the use of the clause was usual practice, lawful and confirmed to be lawful by legal advice. There is no suggestion that the appellant had any involvement whatsoever in the actual withdrawal of the pre-drawn funds. Penalty [25] The parties before me on appeal jointly sought the penalty which I imposed. I considered that the penalty sought was an appropriate penalty in lieu of the penalty imposed by the tribunal. Given the circumstances to which I have referred and taking into account the appellant’s excellent antecedents, it could not be reasonably said that it was a light penalty.5 5 Compare The Chief Executive, Department of Tourism, Fair Trading and Wine Industry Development v Reza Enterprises Pty Ltd – Commercial and Consumer Tribunal decision delivered 20 February 2007 by Mr R V Hanson QC. -- 9 of 9 --