Chief Executive, Department of Justice and Attorney General v Sheppard [2012] QCAT 164

CITATION: Chief Executive, Department of Justice and Attorney General v Sheppard [2012] QCAT 164 PARTIES: The Chief Executive, Department of Justice and Attorney General v John Patrick Sheppard APPLICATION NUMBER: OCR235-11 MATTER TYPE: Occupational regulation matters HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Peta Stilgoe, Senior Member DELIVERED ON: 12 April 2012 DELIVERED AT: Brisbane ORDERS MADE: 1. John Patrick Sheppard is reprimanded. 2. John Patrick Sheppard is disqualified from holding a licence or registration certification under the Property Agents and Motor Dealers Act 2000 for a period of 10 years. 3. John Patrick Sheppard is 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 for a period of 10 years. 4. John Patrick Sheppard shall pay to the Chief Executive Department of Justice and Attorney General a fine of $1,750 by 1 October 2012. CATCHWORDS: REAL ESTATE AGENT – DISCIPLINARY PROCEEDINGS – where agent failed to have trust account audited – where agent failed to account for trust money – where agent did not provide trust account statements – whether grounds for disciplinary proceeding – where agent’s wife -- 1 of 5 -- 2 had cancer – penalty to be applied Property Agents and Motor Dealers Act 2000, s 496 Chief Executive DTFTWID v Lumeah Office Management Pty Ltd & Sant VJ [2005] QCCTPAMD 21 Chief Executive DTFTWID v Rogers [2005] CCT X009-05 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] Mr Sheppard was the holder of a residential letting licence from 1998 to 11 January 2010. He and his wife held the property management rights at Marina Terraces, Port Douglas from September 1999 to May 2010. [2] The Chief Executive has referred Mr Sheppard 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 and/or that he has been carrying on business in an unprofessional way. The particulars of that assertion are: a) He did not lodge an audit report as required for the years 1 May 2007 to 30 April 2008, 1 May 2008 to 30 April 2009 or the final audit report. b) He did not provide monthly account statements to any clients between January 2010 and July 2010. c) He failed to account to owners of units in Marina Terraces for money received on their behalf in accordance with the following table: Unit No. Owner Amount 2 John Arthur Barton 973.75 3 Graeme Frank Barton 1,612.86 4 Helen Muriel Usher Killen & Ian Dix 2,811.48 600.00 5 Sara Dix 567.75 9 Helen & David Eizenberg 660.00 11 Norman James & Judy Barton 124.00 1,350.00 12 Peter Clifton Marshall 1,397.45 14 John Robert Craig 809.00 $10,906.29 d) He failed to disburse amounts payable to clients within 42 days after transactions were finalised. He did not disburse any funds received after January 2010. In some cases, amounts received in August and September 2009 were not disbursed. -- 2 of 5 -- 3 e) He paid a personal life insurance premium of $65.37 from trust. f) He issued a trust account receipt for $8,000 on 15 March 2010 even though this amount was never deposited to trust. g) He acted as a residential letting agent even though his licence had expired. h) He failed to keep proper trust account records as required. i) He was the subject of two infringement notices and a warning notice in relation to his conduct. [3] The Chief Executive has provided a comprehensive brief of evidence to the tribunal. Save for two amounts in the table referred to in paragraph 2(c), I am satisfied that the brief of evidence supports a finding that Mr Sheppard engaged in the conduct complained of in the particulars and that Mr Sheppard was carrying on business in an unprofessional way. I further find that, because of his unprofessional conduct, Mr Sheppard is not a suitable person to hold a licence. I am therefore satisfied that disciplinary proceedings are appropriate. [4] I should, briefly comment on the discrepancies in the table. By my reckoning, Graeme Frank Barton is owed $1,520.66, not $1,612.86 and the total amount owing to Helen Muriel Usher Killen and Ian Dix is $2,811.48. [5] The Chief Executive urges the tribunal to: reprimand Mr Sheppard; order that he pay a fine of $1,750, disqualify him permanently from being a holder of any form of licence or certificate of registration issued under the Act; and that he be prohibited permanently from being an executive officer of a corporation which holds any form of licence issued under the Act. [6] Despite a number of opportunities to do so, and repeated assertions that he would, Mr Sheppard has not filed any material in these proceedings. [7] One of the objects of PAMDA is to protect consumers against particular undesirable practices associated with the promotion of residential property.1 The objects of the Act are achieved mainly through: a) Ensuring only suitable persons are licensed.2 b) Ensuring that those who carry on business maintain close personal supervision of the way the business is carried on.3 c) Providing protection for consumers in their dealings with licensees.4 [8] I am satisfied that Mr Sheppard’s conduct is so serious that he should be reprimanded and disqualified from holding a licence for some period. [9] The Chief Executive has referred me to Chief Executive DTFTWID v Lumeah Office Management Pty Ltd & Sant VJ5 and Chief Executive 1 Section 10(2) PAMDA. 2 Section 10(3)(a)(i) PAMDA. 3 Section 10(3)(a)(ii) PAMDA. 4 Section 10(3)(b)(i) PAMDA. 5 [2005] QCCTPAMD 21. -- 3 of 5 -- 4 DTFTWID v Rogers6. Lumeah failed to issue trust account receipts on 7 occasions, failed to account to a client on 6 occasions (involving $720) and failed to lodge an audit report. Ms Sant’s partner had suffered significant health problems, she had no money and was living on social security. The tribunal disqualified Ms Sant for 10 years and imposed fines totalling $6,000. The Chief Executive submits that the conduct in Lumeah was less serious than the conduct in the present proceedings. [10] Ms Rogers acted as a resident letting agent for 4 months without holding a licence, failed to account to clients within 42 days of receiving funds and failed to have her trust account audited on 2 occasions. She issued non- compliant trust account receipts, failed to reconcile the trust account monthly and failed to ensure that transactions were posted to the trust account ledger as required. The tribunal determined that the trust account breaches struck at the very protection the legislation was intended to provide and affected the integrity of the industry and the confidence of the community. Ms Rogers was disqualified for 10 years and fined $1,335. The Chief Executive submits that Ms Rogers’ conduct was less serious than that of Mr Sheppard. [11] The Chief Executive submits that Mr Sheppard should be permanently disqualified because: $10,000 of trust money is still outstanding; Mr Sheppard has a significant period of industry experience and he has shown no remorse. [12] That submission does not take into account Mrs Sheppard’s ill-health. The statement of Raymond Beswick dated 25 October 2010 records that Mr Sheppard spoke of Mrs Sheppard’s suffering with cancer, anxiety and depression which meant she could not fulfil her duties. It appears that she was responsible for the clerical duties of the business. There is a facsimile from Mr Sheppard to Mr Beswick dated 20 May 2010 in which Mr Sheppard talks about Mrs Sheppard’s “traumas and difficult medical situations over the last three years”. That period coincides with the period during which the trust account was not audited. While Mrs Sheppard’s ill health does not excuse Mr Sheppard’s non-compliance, it does explain it and I am prepared to take some account of it in determining penalty. [13] Trust account breaches are very serious matters and, as Mr Gallagher observed in Rogers, they strike at the heart of the protection regime set up by the legislation. However, given Mrs Sheppard’s illness and its apparent effect on the business, I do not consider that a lifetime ban from the industry is appropriate. Mr Sheppard should be disqualified from holding a licence, or from being an executive officer of a corporate licensee, for 10 years. [14] I accept the Chief Executive’s submission of a fine of $1,750 as Mr Sheppard has already been penalised $800 for 2 infringement notices issued for breaches which are the subject of these proceedings. Orders [15] John Patrick Sheppard is reprimanded. 6 [2005] CCT X009-05. -- 4 of 5 -- 5 [16] John Patrick Sheppard is disqualified from holding a licence or registration certification under the Property Agents and Motor Dealers Act 2000 for a period of 10 years. [17] John Patrick Sheppard is 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 for a period of 10 years. [18] John Patrick Sheppard shall pay to the Chief Executive Department of Justice and Attorney General a fine of $1,750 by 1 October 2012. -- 5 of 5 --