Chief Executive, Department of Justice and Attorney General v My House is Your House Pty Ltd (under external administration) & Anor [2012] QCAT 326

CITATION: Chief Executive, Department of Justice and Attorney General v My House is Your House Pty Ltd (under external administration) & Anor [2012] QCAT 326 PARTIES: Chief Executive, Department of Justice and Attorney General v My House is Your House Pty Ltd (under external administration) Francisco Martin Otero Carranza APPLICATION NUMBER: OCR099-12 MATTER TYPE: Occupational regulation matters HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Peta Stilgoe, Senior Member DELIVERED ON: 9 August 2012 DELIVERED AT: Brisbane ORDERS MADE: 1. Francisco Martin Otero Carranza is reprimanded. 2. Francisco Martin Otero Carranza is disqualified permanently from holding a licence or registration certification under the Property Agents and Motor Dealers Act 2000. 3. Francisco Martin Otero Carranza is disqualified permanently from being an Executive Officer of a corporation that holds a licence or registration certificate under the Property Agents and Motor Dealers Act 2000. CATCHWORDS: REAL ESTATE AGENT – where misappropriation from trust account – where no reimbursement of the fund – penalty Property Agents and Motor Dealers Act 2000, ss 10, 496 Chief Executive DTFTWID v Cornwell [2005] -- 1 of 5 -- 2 CCT X007-05 Chief Executive DEEDI v Schellaars [2010] QCAT 477 Chief Executive DJAG v Brisbane City Student Accommodation Pty Ltd OCR220- 11 APPEARANCES and REPRESENTATION (if any): This matter was heard and determined on the papers in accordance with section 32 of the Queensland Civil and Administrative Tribunal Act 2009. REASONS FOR DECISION [1] Mr Otero Carranza was the holder of a real estate agent’s licence from 8 December 2009 to 8 December 2010. At the relevant time, he was the sole director and shareholder of My House is Your House Pty Ltd. The company was a licensee from 2 April 2008 to 2 April 2011. [2] The Chief Executive has referred Mr Otero Carranza to the tribunal for disciplinary proceedings under s 496 of the Property Agents and Motor Dealers Act 2000 asserting that he is not a suitable person to hold a licence. The particulars of that assertion are: a) Mr Otero Carranza has been convicted of an indictable offence or an offence against the Act. b) Mr Otero Carranza has breached the Code of Conduct. c) Mr Otero Carranza has been incompetent or acted in an unprofessional way. d) Mr Otero Carranza was the director of a company in relation to which the tribunal has finds that grounds exist to take disciplinary action under s 529 of the Act. Preliminary matters [3] The Chief Executive has filed an affidavit of service stating that Mr Otero Carranza was served with this application by posting it to the address noted on the Office of Fair Trading licence records. There is no indication that the letter was returned to the Chief Executive. [4] A copy of the tribunal’s directions of 17 April 2012 and 8 May 2012 were sent to Mr Otero Carranza at the same address. The letters were returned. The registry has conducted White Pages searches and Google searches but can find no alternative address for Mr Otero Carranza. I am satisfied that Mr Otero Carranza has notice of the disciplinary proceedings and that, in the circumstances, the tribunal has made reasonable attempts to bring the directions to Mr Otero Carranza’s attention. It is appropriate that the tribunal determines the proceeding. The evidence -- 2 of 5 -- 3 [5] This tribunal has already found1 that Mr Otero Carranza withdrew funds from the trust account to which he was not entitled. The file records that Mr Otero Carranza admitted his misappropriation of funds during an interview with an officer of the Chief Executive. [6] On 24 March 2011, Mr Otero Carranza pleaded guilty to two charges of fraud and was sentenced to two years imprisonment, wholly suspended for three years. Those charges related to Mr Otero Carranza’s admitted misappropriation. [7] Each of the particulars identified by the Chief Executive relate to Mr Otero Carranza’s misappropriation of trust money. I find that each of the particulars is supported by the evidence and I am therefore satisfied that disciplinary proceedings are appropriate. Penalty [8] One of the objects of PAMDA is to protect consumers against particular undesirable practices associated with the promotion of residential property.2 The objects of the Act are achieved mainly through: a) Ensuring only suitable persons are licensed.3 b) Ensuring that those who carry on business maintain close personal supervision of the way the business is carried on.4 c) Providing protection for consumers in their dealings with licensees.5 [9] The Chief Executive seeks the following penalty: a) A reprimand. b) That Mr Otero Carranza be disqualified from holding any form of licence, or being an executive officer of a corporation that holds any form of licence, for a period of 20 years. c) A fine of $40,000. [10] The Chief Executive has referred me to three decisions: a) Chief Executive DTFTWID v Cornwell6 – Mr Cornwell withdrew a total of $36,612.30 over five separate transactions. He was not authorised to make the withdrawals and he used the money for business and personal expenses. He made full admissions to the Office of Fair Trading and provided references to support his assertion that the behaviour was out of character. He was disqualified for 10 years and fined $3,000. b) Chief Executive DEEDI v Schellaars7 – Ms Schellaars withdrew a total of $42,239.50 in twenty-three separate transactions. She made full admissions to the Office of Fair Trading, repaid the amount in full and no 1 De Vries v My House is Your House Pty Ltd & Anor [2011] QCAT 121. 2 Section 10(2) PAMDA. 3 Section 10(3)(a)(i) PAMDA. 4 Section 10(3)(a)(ii) PAMDA. 5 Section 10(3)(b)(i) PAMDA. 6 [2005] CCT X007-05. 7 [2010] QCAT 477. -- 3 of 5 -- 4 consumer suffered loss as a result of her actions. She was disqualified for five years and fined $5,000. c) Chief Executive DJAG v Brisbane City Student Accommodation Pty Ltd8 – That case involved a number of instances of overcharging commission. In each case, the overcharging was a small amount and inadvertent. The respondents admitted the contraventions at an early time, cooperated with the Chief Executive and took immediate steps to address the issue. The parties proposed a penalty that was accepted by the tribunal. The tribunal did not impose a period of disqualification but did impose a substantial fine. [11] As the Chief Executive has submitted, misappropriation of trust money is a very serious offence which undermines the integrity of the real estate industry. Mr Otero Carranza may have admitted the offence in an interview but he has shown no remorse and has not assisted the Chief Executive in these proceedings. Mr Otero Carranza has not repaid any of the money he misappropriated so this burden has fallen to the statutory fund. [12] In my mind, the fact that Mr Otero Carranza knew the conduct was wrong, but proceeded in any event, exacerbates the severity of his actions. Unlike Mr Cornwell, there is no suggestion that this behaviour was out of character or that, given the opportunity, Mr Otero Carranza would, in future, refrain from this type of behaviour. [13] The misappropriation of $68,000 puts Mr Otero Carranza’s conduct at the higher end of the scale of matters considered by the tribunal. [14] A substantial period of disqualification is warranted. Mr Otero Carranza is now 49 years old. Disqualification for a period of 20 years will effectively constitute a lifetime ban. That is an unsatisfactory result. A person in Mr Otero Carranza’s position should either be given a realistic opportunity to re- enter the profession or be given the courtesy of knowing for certain that he is disqualified permanently. I consider the latter course is preferable and that Mr Otero Carranza should be disqualified permanently from holding a licence. [15] I apprehend that the Chief Executive is calling for a substantial fine based upon the decision in Chief Executive DJAG v Brisbane City Student Accommodation Pty Ltd. That was a special case that turned on its particular facts. It should not be considered a precedent for the imposition of large fines in all cases. [16] The transcript from the Magistrates Court hearing at which Mr Otero Carranza was convicted and sentenced reveals that Mr Otero Carranza is the sole carer of a disabled child. He is unable to work in his chosen profession and it is likely that he will have difficulty finding employment. It is fair to assume that his primary source of income will be a government benefit. He already has the burden of reimbursing the statutory fund in the sum of $68,000. In those circumstances, I can see no utility in ordering a fine that he has no capacity to pay. To the extent that the tribunal’s decision 8 OCR220-11. -- 4 of 5 -- 5 should act as a deterrent, that function is achieved by the imposition of a permanent disqualification. Orders [1] Francisco Martin Otero Carranza is reprimanded. [2] Francisco Martin Otero Carranza is disqualified permanently from holding a licence or registration certification under the Property Agents and Motor Dealers Act 2000. [3] Francisco Martin Otero Carranza is disqualified permanently from being an Executive Officer of a corporation that holds a licence or registration certificate under the Property Agents and Motor Dealers Act 2000. -- 5 of 5 --