Chief Executive, Department of Justice and Attorney-General v Sparkling Property Developments Pty Ltd Christine Jayne Jury [2014] QCAT 24

CITATION: Chief Executive, Department of Justice and Attorney-General v Sparkling Property Developments Pty Ltd Christine Jayne Jury [2014] QCAT 24 PARTIES: Chief Executive, Department of Justice and Attorney-General (Applicant) v Sparkling Property Developments Pty Ltd Christine Jayne Jury (Respondents) APPLICATION NUMBER: OCR137-13 MATTER TYPE: Occupational regulation matters HEARING DATE: 9 December 2013 HEARD AT: Brisbane DECISION OF: Member Paratz DELIVERED ON: 14 January 2014 DELIVERED AT: Brisbane ORDERS MADE: 1. Sparkling Property Developments Pty Ltd is reprimanded. 2. Sparkling Property Developments Pty Ltd is disqualified for a period of 15 (fifteen) years from holding any form of licence issued under the Property Agents and Motor Dealers Act 2000. 3. Sparkling Property Developments Pty Ltd is to pay a fine of $2,000 to the Chief Executive on or before 30 June 2014. 4. Christine Jayne Jury is reprimanded. 5. Christine Jayne Jury is disqualified for a period of 15 (fifteen) years from holding any form of licence issued under the Property Agents and Motor Dealers Act 2000. 6. Christine Jayne Jury is prohibited for a period of 15 (fifteen) years from being an executive officer of a corporation which holds any form of licence issued under the Property Agents and Motor Dealers -- 1 of 8 -- 2 Act 2000. 7. Christine Jayne Jury is to pay a fine of $2,000 to the Chief Executive on or before 30 June 2014. CATCHWORDS: Real estate agent – using trust account funds for personal and business purposes – intentional use – full reimbursement - personal difficulties Property Agents and Motor Dealers Act 2000 Chief Executive DTFTWID v Cornwell [2005] CCT X007-05 Chief Executive DEEDI v Schellaars [2010] QCAT 477 Chief Executive DJAG v DJ Stringer Property Services Pty Ltd and Anor [2012] QCAT 27 APPEARANCES and REPRESENTATION (if any): APPLICANT: R M Vize (In-House Counsel for the Chief Executive) RESPONDENT: Christine Jayne Jury (in person) REASONS FOR DECISION [1] Ms Jury was the Director of Sparkling Property Developments Pty Ltd (the company) which traded as Sparkling Real Estate situated at Moura in Queensland. [2] The Chief Executive applied on 27 May 2013 to the Tribunal to start disciplinary proceedings under the Property Agents and Motor Dealers Act 2000 (the Act) against the company and Ms Jury. [3] The grounds relied on against the company are as follows:  Section 496(1)(b) For a licensee – the licensee or employee has contravened or breached (i) this Act, including a code of conduct – namely section 7 Honest, fairness and professionalism Property Agents and Motor Dealers (Real Estate Practice Code of Conduct) Regulation 2001.  Section 496(1)(b) For a licensee – the licensee or employee has contravened or breached (i) this Act, including a code of conduct – namely section 9 Agent to act in client‟s best interest Property Agents and Motor Dealers (Real Estate Practice Code of Conduct) Regulation 2001.  Section 496(1)(g)(iii) For a licensee – the licensee has in carrying on a business or performing an activity, been incompetent or acted in an unprofessional way. -- 2 of 8 -- 3 [4] The grounds relied on against Ms Jury are as follows:  Section 496(1)(b) For a licensee – the licensee or employee has contravened or breached (i) this Act, including a code of conduct – namely section 7 Honest, fairness and professionalism Property Agents and Motor Dealers (Real Estate Practice Code of Conduct) Regulation 2001.  Section 496(1)(b) For a licensee – the licensee or employee has contravened or breached (i) this Act, including a code of conduct – namely section 9 Agent to act in client‟s best interest Property Agents and Motor Dealers (Real Estate Practice Code of Conduct) Regulation 2001.  Section 496(1)(vi) the licensee is an executive officer of a corporation in relation to whom the tribunal finds grounds exist to take disciplinary action under section 529.  Section 496(1)(g)(iii) For a licensee – the licensee has in carrying on a business or performing an activity, been incompetent or acted in an unprofessional way. [5] The Chief Executive provided a Statement of Particulars which clearly sets out the framework of the application. It is convenient to reproduce those: 1. Sparkling Property Developments Pty Ltd held a real estate corporations licence which was issued on 2 March 2011 and expires on 2 March 2015. 2. Sparkling Property Developments Pty Ltd carried on a real estate business from the premises located at 2/35 Gillespie Street, Moura, Queensland, from a date on or about 2 March 2011 using the business name Sparkling Real Estate. 3. During the period between 2 March 2011 and 27 March 2013, Christine Jayne Jury was in charge of and solely responsible for the daily management and control of the real estate practice of Sparkling Property Developments Pty Ltd. 4. Christine Jayne Jury held a real estate agent‟s licence and a property developer director‟s licence which was issued on 2 March 2011 and expires on 2 March 2015. 5. From 19 July 2010 Christine Jayne Jury was appointed a director of Sparkling Property Developments Pty Ltd and was in charge of and responsible for the daily management of the real estate practice of Sparkling Property Developments Pty Ltd since the licence was issued on 2 March 2011. 6. As at the date of this application Christine Jayne Jury is the licensed director of Sparkling Property Developments Pty Ltd. 7. Christine Jayne Jury is responsible for the Sparkling Property Developments Pty Ltd as trustee for the Jury Family Trust Account. 8. Between 4 May 2011 and 6 June 2012 there were 38 unauthorised drawings from the Sparkling Property Developments Pty Ltd as trustee for the Jury Family Trust Account. 9. The 38 unauthorised drawings from the trust account amount to a total of $27,006.51. [6] Ms Jury requested by a letter to the Tribunal written on her behalf by her Accountant, dated 13 September 2013, that the matter be listed for an oral hearing on penalty only, and that she attend the hearing by telephone from Moura. This was not objected to by the Chief Executive, and I gave -- 3 of 8 -- 4 Directions accordingly on 1 October 2013, and the matter was heard on 9 December 2013. [7] At the commencement of the hearing, Ms Jury said that she accepted all the facts and allegations as put by the Chief Executive. [8] The Chief Executive relied on a Statement of Edmond Mark Jones filed on 3 July 2013, together with 24 Exhibits. Mr Jones is the Acting Senior Investigations Officer employed by the Rockhampton Office of Fair Trading, and an inspector appointed under the Property Agents and Motor Dealers Act 2000 (the Act). [9] An audit of the trust account of Sparkling Property Developments Pty Ltd was conducted by Jane Pollard, CPA in relation to the period from 1 December 2010 to 30 November 2011 (however the audit was completed to 31 May 2012). [10] In her report to the Office of Fair Trading dated 7 June 2012, Ms Pollard notes that the trust account had not been properly maintained, and notes as follows: 15. The trust account funds were used for business and personal purposes during the initial start up of the business (list of transactions are attached) and the reasons this occurred were as follows: a. minimal working capital in starting the business, b. using the trust account cheque book instead of the general bank account cheque book in error, c. not being sufficiently trained/competent in the REST trust account software or reconciling function, d. delegation to an employee who has subsequently been terminated. The licensee understands the gravity of her actions and has, this year, taken back full control of the business, doing all administrative tasks herself, reimbursed the private expenditure and has agreed to an ongoing monthly audit by myself to assist with maintaining her trust account records. [11] The 38 unauthorised drawings from the trust account are set out in a schedule as Exhibit OFT05 to the Affidavit of Mr Jones. The dates are between 4 May 2011 and 21 March 2012, a period of about 10.5 months. The individual amounts range from $46.25 to $2,965.00. The largest amount was for business rent on 21 July 2011. The purposes of the drawings are quite diverse, and include magazine advertising, business rent, advertising, software fees, laptop purchase, printer ink, school fees, postage, phone account, doctor‟s fees, real estate application fees, RP Data fees, and newsagent charges. [12] The list of transactions attached to the audit report shows that reimbursements were made by Ms Jury to the Trust Account by reimbursement of commission, or by commission not being taken. Ten individual reimbursements are listed. The dates are between 26 August 2011 and 14 June 2012. The amounts range from $420.00 to $7,000.00. -- 4 of 8 -- 5 [13] An interview was conducted with Ms Jury by Mr Jones and Mr Page of the Office of Fair Trading on 8 November 2012. Ms Jury was forthright in giving details of the withdrawals and the reimbursements which she made. She told the inspectors:1 Ms Jury: Like I say, I admit everything, but getting that good accountant really, really helped me because the first one had my accounts – everything for about two months and then said “I can‟t help you”. So I‟m like - panic, need more help, so I‟ve reached out to Jane for help and also someone else that – and also with my REST program, they are helping me, more support. Just basically reaching out for help and not panicking and thinking, you know “I‟ve done something really, really wrong”, I – you know “I can fix this myself. I‟m going to fix it”. And then I can‟t. So I‟ve reached out for help so..”. [14] In a letter to the Chief Executive dated 9 September 2013 she recounted her history in the Moura community over the previous eight years. In 2009 she worked for a real estate agent in Moura as the property manager until that rent roll was sold to another agent where she worked in sales until she had to resign to have an operation. She obtained a real estate agent licence and started business as Sparkling Real Estate in March 2010. (Although the Certificate from the Department shows that the company was issued a licence on 2 March 2011).2 [15] She said that the business grew quickly and she had 40 houses on her books. She said that her stress levels were rising, and that she could not make sense of her bookkeeping, and made some really uneducated decisions with cheque books and the trust account. [16] She concluded her letter by saying: I understand that I have broken the rules regarding use of the trust account but my intention was never fraudulent, only short sightedness. I understand there are consequences for my actions. I hope this letter gives you some background to myself as a person and my circumstances at the time. [17] In her oral evidence Ms Jury said that she was not in the business any more, and that she was very humble and very sorry. She said she was naïve, and did her best, but was pressured by life in general. She said that she was paying bills from the trust account and then repaying it when she got commission. [18] She said that her training on trust accounts was not very clear. She said that in the beginning she made mistakes as to which cheque book to use, but that later she was intentionally taking funds from the Trust Account, and was aware that she should not have been doing so. [19] She described herself as having an emotional breakdown in 2013. She said that had suffered from depression for a long time and was now on anti-depressants. She attributed her breakdown to a marital breakup in 2012 which resulted in the end of her marriage, and that she „lost her 3 children‟ aged between 12 and 19, as they thereafter lived with her ex- 1 Transcript of Interview 8 November 2012, page 26, lines 1 -10. 2 Exhibit OFT24 to Affidavit of Edmond Mark Jones. -- 5 of 8 -- 6 husband, and she only sees them 10% to 20% of the time, as she works at nights. [20] In relation to her current situation, she said that now works as a casual bar attendant and earns between $450.00 and $550.00 a week. She spends all of her income on rent, living expenses and repaying the accountant‟s outstanding fees. She has no assets, and did not obtain anything from a property settlement from her marriage. She is now 49 years of age. She has no other qualifications other than the real estate ones. [21] The Chief Executive made written submissions. In relation to the behaviour of Ms Jury, it is submitted:3 During the record of interview the Second Respondent initially blames a staff member for failing to inform her of her errors and problems with the trust account. Later the Second Respondent states that her strategy in dealing with the errors was to tell the staff member to “go ahead and do what you need to do”. This strategy was maintained despite the employee telling the Second Respondent that professional help was needed to address the reconciliation issues with the trust account. The strategy had the predictable result in that no action was taken to address the situation. Further and more telling is the fact that the second respondent then continued to make multiple withdrawals from the trust account despite being fully aware of the errors. It is submitted that there was never any legitimate attempt to address the issues with the trust account. The „strategy‟ in place shows the second respondent‟s intention to not treat the matter seriously. In short she treated the trust account as if it was her own bank account, never manifest any real intention to address the situation and places blame onto others for her own conduct. [22] The Chief Executive submits that Ms Jury has admitted to the intentional unauthorised use of trust funds which is one of the most serious breaches that can be committed by a licensee, and that a significant penalty must be imposed to send a clear message to industry that this type of behaviour is totally unacceptable, and to deter other licensees from considering their trust account as being an alternative source of revenue for their businesses. [23] The Chief Executive refers to three comparative cases:  In Chief Executive DTFTWID v Cornwell,4 an agent withdrew $36,612.30 of trust funds over 5 separate withdrawals. His conduct was intentional, and he had used the funds for business and personal expenses. No member of the public lost money. He made admissions and expressed remorse. He was disqualified for 10 years and a fine of $3,000 was imposed.  In Chief Executive DEEDI v Schellaars,5 an agent withdrew $42,239.50 for her own use on 23 separate occasions. The full 3 Submissions Chief Executive 17 September 2013, page 4. 4 [2005] CCT X007-05. 5 [2010] QCAT 477. -- 6 of 8 -- 7 amount was repaid and full admissions were made. The tribunal reasoned that as the funds were not used in the operation of her business, that a shorter period of disqualification should be imposed. She was disqualified for 5 years, and a fine of $5,000 was imposed.  In Chief Executive DJAG v DJ Stringer Property Services Pty Ltd and Anor,6 an agent pre-drew commissions totalling $283,089.71 on 21 occasions. He made admissions and stated that the withdrawals had been done by an employee due to liquidity problems of the business and that he was unaware of this situation. The company was fined $7,000 and Mr Stringer $2,000. [24] The Chief Executive initially submitted that the company should be reprimanded, be disqualified for 20 years, and pay a fine of $2,000; and that Ms Jury be disqualified for a similar period and be prohibited from being the executive officer of a corporation which holds any form of licence issued under the Act and pay a fine of $2,000. In a later submission dated 24 October 2013, an increased penalty of $5,000 was sought. [25] In oral submissions, Counsel for the Chief Executive submitted that this matter was more serious than Cornwell because of the higher number of transactions and the frequency of them. [26] It is clear that Ms Jury was overwhelmed by the running of the business, on both a personal and business level. She did not display the appropriate understanding of her roles and responsibilities as the executive officer of a real estate agency, or of the requirements as to dealing with a trust account. She was out of her depth in every sense. [27] Ms Jury was experiencing personal difficulties at the time which would have contributed to her failure to properly address and conduct the business. She is now in a sad situation with limited income and prospects, and ongoing personal difficulties as to her children. [28] She said that she does not intend to go back to business as a real estate agent again. The Chief Executive submits that this is a reason to increase the financial penalty, as depriving her of her ability to hold a licence for any extended period of time is no deterrence or punishment to her. Against that argument, I have to balance the reality of her ability to pay a significant fine, and to take her personal mitigating factors into account. [29] Ms Jury did knowingly withdraw funds from the trust account on numerous occasions for her business and personal use. That cannot be condoned in any way, and must attract a significant penalty. [30] I do take into account mitigating factors relating to her personal difficulties, her full admissions, and her expressions of regret and remorse. Full reimbursement has been made. 6 [2012] QCAT 27. -- 7 of 8 -- 8 [31] I accept the submission of the Chief Executive that this matter is more serious then Cornwell having regard to the number of withdrawals, where a period of 10 years disqualification was imposed, but do not consider that a period double that is indicated. I therefore propose to impose a disqualification period of 15 years. [32] I do not consider it appropriate to impose a large fine, having regard to her present financial circumstances and limited future prospects. A fine does need to be imposed however, so that there is an effective detriment to her. The initial submission of the Chief Executive of a fine of $2,000 seems appropriate and reasonable to me. [33] Reprimands are in order and should be made against the company and Ms Jury to recognise the improper behaviour. [34] Accordingly, I find that the disciplinary proceedings as alleged in the Grounds are made out, and order as follows: 1. Sparkling Property Developments Pty Ltd is reprimanded. 2. Sparkling Property Developments Pty Ltd is disqualified for a period of 15 (fifteen) years from holding any form of licence issued under the Property Agents and Motor Dealers Act 2000. 3. Sparkling Property Developments Pty Ltd is to pay a fine of $2,000 to the Chief Executive on or before 30 June 2014. 4. Christine Jayne Jury is reprimanded. 5. Christine Jayne Jury is disqualified for a period of 15 (fifteen) years from holding any form of licence issued under the Property Agents and Motor Dealers Act 2000. 6. Christine Jayne Jury is prohibited for a period of 15 (fifteen) years from being an executive officer of a corporation which holds any form of licence issued under the Property Agents and Motor Dealers Act 2000. 7. Christine Jayne Jury is to pay a fine of $2,000 to the Chief Executive on or before 30 June 2014. -- 8 of 8 --