Department of Justice and Attorney-General v Ball and Anor [2012] QCAT 28

CITATION: Department of Justice and Attorney- General v Ball and Anor [2012] QCAT 28 APPLICANT: Department of Justice and Attorney- General v RESPONDENTS Kevin Robert Ball In Style Projects Australia Pty Ltd APPLICATION NUMBER: OCR167-11 / OCR168-11 MATTER TYPE: Occupational regulation matters HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Susan Gardiner, Member DELIVERED ON: 11 January 2012 DELIVERED AT: Brisbane ORDERS MADE: 1. That Kevin Robert Ball is reprimanded. 2. That In Style Projects Australia Pty Ltd is reprimanded. 3. That Kevin Robert Ball pay a fine of $1,000 to the Chief Executive by 4.00pm on 2 February 2012. 4. That In Style Projects Australia Pty Ltd pay a fine of $1,500 to the Chief Executive by 2 February 2012. 5. That Kevin Robert Ball and In Style Projects Australia Pty Ltd pay to Sunstruct Pty Ltd the sum of $822.86 by payment to Sunstruct Pty Ltd’s account BSB 014-650 number 493991315 by 4.00pm on 2 February 2012. CATCHWORDS: REAL ESTATE AGENTS – where a real estate agent deducted fees for cleaning a property twice – once from rent and again from a bond repayment – where the respondents wilfully refused to refund the overpayment even when the second deduction was identified – where criteria met -- 1 of 5 -- 2 for company and executive officer to be reprimanded and fined Property Agents and Motor Dealers Act 2000, ss 10, 85, 86, 501 Queensland Civil and Administrative Tribunal Act 2009, ss 10, 496, 497, 529 The Chief Executive, DTFTWID v McNamara [2005] CCT X022-04 The Chief Executive, Department of Justice and Attorney General Unreported PDO15-07 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] Sunstruct Pty Ltd owned a rental property at Coolum Beach in Queensland. Sunstruct appointed In Style Projects Australia Pty Ltd (trading as Coolum Property Sales and Rentals), to manage the property in July 2006. In Style Projects’ principal Kevin Ball tenanted the property from 1 August 2006 and a bond of $1,440 was paid to the Residential Tenancies Authority. [2] The tenant abandoned the property on 2 April 2007. Mr Ball arranged the cleaning and re-letting of the property and the fees incurred in this process were deducted from the tenant’s rent forwarded to Sunstruct in the period 31 March 2007 to 30 April 2007. The rental statement for that period shows that on 30 April 2007, an amount of $910 was paid for cleaning the property. In Style Projects paid $910 to Venita Ball on 10 April 2007. [3] After the abandonment, the bond for the property of $1,440 was returned to In Style Projects on 24 May 2007 but the full bond amount was not repatriated to Sunstruct. In Style Projects again deducted the costs of the cleaning and reletting of the property and returned the balance of $617.14 to Sunstruct, some $822.86 short of the full bond amount. [4] It appears from the documentation that In Style Projects had double dipped on the cleaning fees. This was pointed out to In Style Projects in a letter from the accounts manager of Sunstruct to In Style Projects dated 2 April 2009. [5] In response to the Sunstruct letter on 16 April 2009, Mr Ball records in a letter to Sunstruct that the RTA did refund the bond of $1,440 wherein he again deducted the expenses of cleaning and maintenance of the property of $910 less fuel and cleaning products used of $87.14 (being net $822.86) in order, to make the property habitable and presentable for reletting and/or sale. Mr Ball then returned $617.14 to Sunstruct. -- 2 of 5 -- 3 [6] Mr Ball gives no explanation in his reply to Sunstruct as to why he took the amount for the cleaning fees for what appears to be a second time. He makes no reference in his reply to Sunstruct of the amount paid and recorded in the March-April 2007 tax invoice. [7] In his response filed with this Tribunal, Mr Ball acknowledges the accounting error and, although he says he deeply regrets the events that occurred between himself and Sunstruct (Mr Ball makes reference in his response to other matters that have arisen between the parties but which are not relevant to these proceedings), there has been no recorded refund of the overpaid amount. [8] The Chief Executive asks the Tribunal to decide whether disciplinary grounds are established against In Style Projects and Mr Ball under sections 496 and 497 of the Property Agents and Motor Dealers Act 2000 and for the imposition of a penalty under section 529 of that Act if the disciplinary grounds are established. [9] The Chief Executive applies for two charges. They were: For Kevin Ball a) that Kevin Ball was an Executive Officer of In Style Projects Australia Pty Ltd a corporation in relation to whom the Tribunal finds grounds exist to take disciplinary action under section 529 of the PAMD Act (s 529(1)(g)(vi)); For In Style Projects Australia Pty Ltd a) that In Style Projects Australia Pty Ltd has acted in an unprofessional way carrying on a business or performing an activity (s 529(1)(g)(iii)). [10] I am satisfied that the cleaning fees were deducted twice from the monies returned to Sunstruct, once on 30 April 2007 from rental received at that time and again from the bond returned to In Style Projects in May 2007. The full bond should have been paid to Sunstruct and the amount short of that full payment is $822.86. I am further satisfied that, despite this overpayment being twice raised with Mr Ball, once by Sunstruct in April 2009 and once by the regulatory authority in March 2010 in the course of its investigations of this matter, the amount of $822.86 remains unrefunded to Sunstruct. [11] The Chief Executive submits that the company and Mr Ball (as the executive officer and person in charge of the day to day running of the company) have acted unprofessionally by not complying with the statutory requirements to retain money in the trust account until paid out under the Act, by retaining $822.86 from the bond and by failing to rectify the error once attention was drawn to it. -- 3 of 5 -- 4 [12] Mr Ball, while admitting the accounting error in his response to this Tribunal, has taken no steps to refund the amount, despite these proceedings being commenced against both himself and his company. It is now over two years since this “accounting error” was made known to Mr Ball. [13] I am satisfied that these actions amount to unprofessional conduct on the part of In Style Projects Australia Pty Ltd and Mr Ball. [14] The public interest is an important factor in disciplinary proceedings because a primary object of such proceedings is to protect members of the public from unprofessional conduct1. In Style Projects and Mr Ball have wilful refused to repay this amount, particularly after the matter was drawn to Mr Ball’s attention two years ago, without any reason or justification of their inaction. [15] I am satisfied that the grounds for bringing the disciplinary proceedings against In Style Projects Australia Pty Ltd and Mr Ball have been made out and I find both In Style Projects Australia Pty Ltd and Mr Ball guilty of the charges of unprofessional conduct under section 496(g)(iii) of the PAMD Act. I am satisfied that both In Style Projects Australia Pty Ltd and Mr Ball should be reprimanded for their unprofessional conduct under section 529(1)(a) of the PAMD Act. I am also satisfied it is appropriate to order that the company and Mr Ball refund the withheld bond monies to Sunstruct in the sum of $822.86 within 21 days of the issue of this Tribunal’s order. Submissions on penalty [16] The Chief Executive submits that it is central to the maintenance of real estate industry standards and integrity the money acquired by agents in the course of their business be dealt with in accordance with the Act. The Chief Executive says that the company and Mr Ball have failed to refund the second deduction despite being notified of the second deduction by Sunstruct in April 2009 and by the regulatory authority in March 2010 after the complaint was received. The failure to reply to the authority in particular has caused the expense of these current proceedings before this Tribunal. [17] The Chief Executive indicates that this is not the first disciplinary proceeding brought against the company and Mr Ball. In a previous disciplinary proceeding in 2007 before the Commercial and Consumer Tribunal (the predecessor to this Tribunal), the company and Mr Ball were fined $2,000 and $500 respectively with an award of costs made against the company. In a further disciplinary proceeding before this Tribunal in 2010, the company and Mr Ball were again fined $1,000 and $500 respectively. The breaches in both these disciplinary proceedings involved the misuse of monies received and are, in that regard, similar to the current events. [18] The Chief Executive submits that on the facts disclosed, a fine is warranted and does not seek disqualification. However, because of the previous 1 Property Agents and Motor Dealers Act 2000, ss 10(1)(a), 10(2). -- 4 of 5 -- 5 breaches of the Act by the parties and the fact that the matter has not been resolved by the company or Mr Ball for over two years, the Chief Executive seeks a fine imposed on the company and Mr Ball of $4,000 and $2,000 respectively, with an order that In Style Projects and Mr Ball pay Sunstruct the amount of $822.86 to a nominated account. The Chief Executive provided two comparative decisions on penalty to assist the Tribunal, McNamara2 and Harmatz3. [19] In mitigation, Mr Ball has admitted the accounting error. He asks this Tribunal to take into account that he deeply regrets the events that occurred and says he conducted himself in a manner that fulfilled his fiduciary obligations. He asks not to incur any further financial duress to the company or personally. [20] Although the money amount is not large, what mitigates against Mr Ball’s submissions are that first, the monies have not been repaid, despite Mr Ball’s admission of an accounting error and second, that this is not the first time there has been inappropriate handling of monies by the company and Mr Ball. [21] I am satisfied that a penalty by way of a fine should be imposed on both In Style Projects Australia Pty Ltd and Mr Ball for deterrent purposes. I consider the appropriate penalty to be a fine of 150 penalty units being $1,500 against the company and a fine of 100 penalty units being $1,000 against Mr Ball. [22] Although initially sought in the application, the Chief Executive does not now pursue an order for costs. 2 The Chief Executive, DTFTWID v McNamara [2005] CCT X022-04. 3 The Chief Executive, Department of Justice and Attorney General Unreported PDO15- 07. -- 5 of 5 --