Civil and Administrative Tribunal New South Wales Medium Neutral Citation: PSMG Pty Ltd v Commissioner for Fair Trading [2024] NSWCATOD 117 Hearing dates: 01 August 2024 Date of orders: 05 August 2024 Decision date: 05 August 2024 Jurisdiction: Occupational Division Before: K Robinson, Senior Member Decision: The decisions made on 22 July 2024 to cancel the licences of PSMG Pty Ltd, license number 1688934 and Whitney Hong Wang, licence number 1092361, for all purposes are treated as on foot from 22 July 2024 until further order of the Tribunal. Catchwords: ADMINISTRATIVE LAW - review of decision by external decision-maker –decision of delegate to cancel strata management company and individual licences and disqualify both licence holders under the Property and Stock Agents Act 2002 PRACTICE AND PROCEDURE - interlocutory order - interim decision – stay order sought Legislation Cited: Administrative Decisions Review Act 1997 Property and Stock Agents Act 2002 Cases Cited: QLD Protection Security Pty Ltd v Commissioner of Police, NSW Police Force [2018] NSWCATAP 113 Tom v Commissioner of Fair Trading [2022] NSWCATOD 130 Texts Cited: None Category: Procedural rulings Parties: PSMG Pty Ltd (Applicant) Whitney Hong Wang (Applicant) Commissioner for Fair Trading (Respondent) Representation: Counsel: Bannerman J (Solicitor, Applicants) Douglas-Baker A (Respondent) Solicitors: Bannermans Lawyers (Applicants) Department of Customer Service (Respondent) File Number(s): 2024/00273415 Publication restriction: Nil REASONS FOR DECISION Background 1. PSMG Pty Ltd and Mr Whitney Hong Wang (the Applicants) held licences under the Property and Stock Agents Act 2002 (the PSA Act) to manage strata properties. On 22 July 2024 the Commissioner for Fair Trading (the Respondent) decided to cancel the licences held by the Applicants, to reprimand them and to disqualify each of the Applicants from holding equivalent licences for ten years (the Decision). 2. On 25 July 2024 the Applicants applied for review of the Decision. The Applicants also applied for an interim order seeking a stay of the Decision. 3. On 26 July 2024 the Respondent issued a letter appointing a manager to licensee's business under ss 126 and 127 of the PSA Act which was intended to take operational effect on 29 July 2024. 4. Also on 26 July 2024 the Tribunal made order that: The Decisions made on 22 July 2024 to cancel the licences of PSMG Pty Ltd, license number 1688934 and Whitney Hong Wang, licence number 1092361, for all purposes are treated as on foot from 22 July 2024 until 5pm on 1 August or until further order of the Tribunal. 1. On 1 August 2024 the order was amended and the current order in place (the interim order) is: The Decisions made on 22 July 2024 to cancel the licences of PSMG Pty Ltd, license number 1688934 and Whitney Hong Wang, licence number 1092361, for all purposes are treated as on foot from 22 July 2024 until further order of the Tribunal. 1. The Applicants seek the interim order to remain in place until administrative review of the Decision is finalised. Material before the Tribunal in the interlocutory proceedings 1. The Applicants provided three bundles of documents, one relating to the substantive application for review of the Decision, one relating to the interim order application, and one bundle of submissions and evidence relating to the interim order application. 2. The Respondent provided a large bundle of documents, an affidavit from the manager appointed under the PSA Act and written submissions. 3. Both parties made oral submissions at the hearing on 1 August 2024 and no witnesses were subject to cross examination. Law 1. Section 60 of the Administrative Decisions Review Act 1997 (the ADR Act) provides: (1) Subject to this section, an application to the Tribunal for an administrative review under this Act of an administratively reviewable decision does not affect the operation of the decision under review or prevent the taking of action to implement that decision. (2) On the application of any party to proceedings for an application for an administrative review under this Act of an administratively reviewable decision, the Tribunal may make such orders staying or otherwise affecting the operation of the decision under review as it considers appropriate to secure the effectiveness of the determination of the application. (3) The Tribunal may make an order under this section only if it considers that it is desirable to do so after taking into account: (a) the interests of any persons who may be affected by the determination of the application, and (b) any submission made by or on behalf of the administrator who made the decision to which the application relates, and (c) the public interest. (4) While an order is in force under this section (including an order that has previously been varied on one or more occasions under this subsection), the Tribunal may, on application by a party to the proceedings, vary or revoke the order by another order. 1. The Tribunal has power to make the interim order because it has the power to make an order staying or otherwise affecting the operation of the decision under review by operation of s 60(2) of the ADR Act. 2. In AVS Group of Companies Pty Ltd v Commissioner of Police [2010] NSWCA 81 the Court considered this power (at [96]): In the present case (unlike McBride v Walton), the Tribunal has a wider power than merely to grant a stay. It has power, under section 60(2) ADT Act, to "make such orders staying or otherwise affecting the operation of the decision under review as it considers appropriate to secure the effectiveness of the determination of the application." That power is one that is wide enough to enable the Tribunal to temporarily reinstate a licence that has been revoked pending the hearing of an application for review of a decision to revoke the licence. 1. The Court also observed (at [105]): It should at once be recognised that for the parties to apply for, and the Tribunal ultimately to grant, a "stay" of the decision of the Commissioner to revoke the licence was an inapt use of language. If ever in the future the Tribunal wished to achieve the effect that a revocation of a licence that had already taken place, was to be treated as though it had not taken place, pending the hearing of an appeal against the decision to revoke, it would be highly desirable for the Tribunal, to achieve that effect by language that made clear what the Tribunal was doing, such as that "the licence for all purposes be treated as on foot pending the hearing of the appeal". As well as clarity, use of such language has the effect of helping to make clear the seriousness of such an order. 1. Hence the language of the orders made by the Tribunal on 26 July that both licences remain on foot, effective the day of the Decision. 2. As set out in Tom v Commissioner of Fair Trading [2022] NSWCATOD 130 (Tom) at [34]: In QLD Protection Security Pty Ltd v Commissioner of Police, NSW Police Force [2018] NSWCATAP 113, the Appeal Panel of this Tribunal summarised the considerations which should be applied when considering a stay in matters such as this as including (at [32]); (1) whether the order is appropriate to secure the effectiveness of the determination of the application for review: s 60(2), ADR Act. (2) whether the order is desirable taking into account: (a) the interests of any persons who may be affected by the determination of the application for review: s 60(3)(a), ADR Act, Loveday v Commissioner for Fair Trading [2018] NSWCATAD 80 (Loveday) at [10], Re Scott and Australian Securities and Investments Commission [2009] AATA 798 (Re Scott) at [4]; (b) any submission made by or on behalf of the administrator who made the decision to which the application relates: s 60(3)(b), ADR Act, Loveday at [10], Re Scott at [4]; (c) the public interest: s 60(3)(c), ADR Act, Loveday at [10], Re Scott at [4]; (3) the applicant's prospects of success on the application for review: AVS Group of Companies Pty Ltd v Commissioner of Police [2010] NSWCA 81 (AVS Group) at [129], Loveday at [10] and [11], Re Scott at [4]. Consideration 1. The list of considerations identified in Tom citing QLD Protection Security Pty Ltd v Commissioner of Police, NSW Police Force [2018] NSWCATAP 113 are the relevant criteria to consider in this matter. 2. The onus lies with the Applicants to demonstrate why the interim order should continue. Is the order desirable? Submission made by or on behalf of the administrator who made the decision 1. The Respondent opposes the making of an interim order and submits they validly appointed a manager to continue operation of the business and that the decision to make the appointment is not a decision the Tribunal has power to review. 2. The Respondent also submits that the Tribunal should find that there will be no negative overall impacts that will occur while the Decision is under review because Mr Wang and his wife, an employee of the company could continue to maintain employment under the appointed manager and the client owners corporations can continue to be managed through the appointed manager if that is their choice. 3. The Respondent submits that Mr Wang had received a warning letter in 2019 and the company had received a fine in 2022 and that each of the Applicants had been issued with a show cause letter in May 2024 and a further show cause letter in June 2024 before the Decision. 4. The Respondent referred the Tribunal to the second reading speech relating to Division 2 of Part 9 to the PSA Act, most relevantly (see New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 12 December 2001 at 19868): In conjunction with the immediate licence suspension powers, the bill enables the director-general to appoint a manager to carry on the business of an agent whose licence has been suspended, so as to ensure that existing clients are not disadvantaged. A manager will be required to hold a licence in the category of agency business to which they are appointed or have other relevant experience or qualifications considered appropriate by the director-general. The Respondent maintains that while the appointed manager is a forensic accountant who holds no strata management qualifications, the appointment itself is sufficient to show the delegate of the Secretary of the Department of Customer Service has determined the appointed manager has relevant experience and holds appropriate qualifications to be granted such an appointment. Interests of any persons who may be affected by the determination of the application: 1. The Applicants provided affidavits from a number of witnesses outlining the negative impact the cancellation of the licences and disqualifications are likely to have on both the Applicants' financial situations and on employees of the company who are concerned for their continued employment. 2. The unchallenged evidence of the Applicants is that the business has been built from referrals and the Applicants also provided evidence of the valuation of the business and that its revenue is dependent on having strata management agreements in place with owners corporations. 3. I am satisfied on the basis of agreements in evidence (for example cl 16c. on p 11 of the index to exhibit A3) that licence cancellation is a trigger for termination of the strata management agreements in place with the owners corporation clients of the company. The Applicants also provided evidence demonstrating that since the Decision a number of owners corporations managed by the Applicants are considering taking steps to terminate their management agreements with the company. 4. The appointed manager can only perform management actions on behalf of client owners corporations once each corporation has granted consent to that occurring (s 128(2) of the PSA Act). The appointed manager has no strata management qualifications, instead has a financial background and has reviewed the financial operations of at least one owners corporation. I accept the submission of the Applicants that the appointed manager's affidavit (at [8]) discloses a misunderstanding as to the different powers of strata committees as opposed to owners corporations for strata schemes in relation to the appointment of strata managers, which suggests a lack of appropriate knowledge. These may be negative factors taken into consideration by client owners corporations when consent is sought from them by the appointed manager as required by s 268(2) of the PSA Act. 5. I am therefore satisfied the Applicants' financial interests are likely to be negatively affected if the interim order does not continue while the substantive proceedings are resolved. 6. There is also uncertainty relating to the interaction between s 9 of the PSA Act which requires a company to be licensed before it can carry out strata management activities and s 126 which allows a person to be appointed to manage a licensee's business, relevantly, if their licence is cancelled or suspended. It may be the case, as the Applicants submit, that the proper reading of the provisions is that s 126 allows an individual licensee to be replaced by a manager while a company licence continues on foot. I am satisfied this uncertainty has the potential to negatively affect not only the continued operation of the Applicants' business, but also each of the owners corporations to be managed under the appointed manager because the validity of any actions taken by the company on behalf of those owners corporations could be impacted. 7. These considerations weigh in favour of the continuation of the interim order. The public interest 1. On the material before the Tribunal there do not appear to be any issues of public safety arising as a result of a continuation of the interim order. 2. Further, certainty for the continued operations of the approximately 150 owners corporations currently managed by the Applicants is also a relevant factor in relation to consideration of the public interest in this matter. 3. As discussed at [23]-[24], the appointment of the manager is not without issue and therefore creates further uncertainty. 4. I note the Decision was made without notice to the Applicants, for example no draft notices of decision were issued to the Applicants in advance of the Decision and no time was allowed between the issuing of the Decision and the cancellation to facilitate the management of the client owners corporations. The appointment of a manager came several days after the Decision leaving approximately 150 owners corporations without management until the Tribunal made orders on the afternoon of 26 July at the request of the Applicants. Had the Tribunal not made those orders, there would have been no effective operational management for those owners corporations for a further period of time because the manager was intending to commence performing work on the following Monday 29 July. 5. There was no material before the Tribunal as to the schedule of fees to be paid to the appointed manager, therefore it is not clear the terms of the appointment specify the remuneration the manager is to be entitled to as required by s126(4) of the PSA Act which is a further issue of uncertainty. 6. I am therefore satisfied on the material before the Tribunal that public interest considerations generally weigh in favour of the continuation of the interim order. The applicant's prospects of success on the application for review 1. The Decision appears to have been made generally on the basis of four Tribunal decisions published between January 2022 and January 2024 where the Applicants were not a party to the proceedings, but findings were made as to the Applicants' conduct over the period 2020 - 2023. 2. The Applicants in their responses to the show cause and further show cause letters from the Respondent maintain the lawfulness of their conduct and oppose any disciplinary proceedings being taken against them. 3. I note the lapse in time between the first conduct identified in 2021 and the Decision. While the reasons for the Decision outline a number findings of the delegate that they were satisfied particular conduct was unlawful, the Respondent has conducted no prosecutions and no court has made findings against the Applicants in proceedings to which the Applicants were a party. 4. Further, except for the issuing of notices to show cause, the Decision is essentially untested with no internal review taking place and the evidence in relation to the Decision as it applies to the Applicants has not yet been challenged or conclusively examined by the Tribunal. The substantive proceedings will evaluate the seriousness of alleged conduct and the evidence overall as it applies to the Applicants. On the material before the Tribunal it is not possible at this stage of the proceedings to conclusively determine whether there is a proper basis for findings that the Applicants are guilty of any disqualifying conduct. 5. This consideration therefore weighs in favour of the confirmation of the interim order. Is the order appropriate to secure the effectiveness of the determination of the application for review? 1. On the material before the Tribunal and on the basis of the considerations discussed in these reasons I am satisfied the interim order should remain in place until the Decision has been subject to administrative review. 2. Given it is accepted Mr Wang is the directing mind of the company it is not practical to separate the orders applying to each individual party at this point of the proceedings therefore the Tribunal will make the same order applying to each of the Applicants. Conclusion 1. Having considered the matters referred to in s 60(3) of the ADR Act, I consider it appropriate to make the order effectively staying the Decision, confirming the interim order, to secure the effectiveness of the determination of the application for review. I have considered the submissions made by the parties and have found that the Decision will affect the interests of the Applicants, employees of the Applicants and the client owners corporations managed by the Applicants. 2. This is an interim application, the evidence in relation to the Decision has not yet been challenged or conclusively examined by the Tribunal. It is not yet possible to determine whether there is a proper basis for findings which have resulted in the cancellations. 3. On the material before the Tribunal I am not satisfied that the appointment of a manager will result in the effective management of the Applicants' business pending the outcome of the administrative review of the Decision. 4. I am also satisfied that given these proceedings are on foot and that they will be listed for directions to progress the proceedings efficiently, public interest considerations further weigh in favour of the continuation of the interim order. 5. It follows that the interim order should remain in place until the Decision has been subject to administrative review. Order 1. The decisions made on 22 July 2024 to cancel the licences of PSMG Pty Ltd, license number 1688934 and Whitney Hong Wang, licence number 1092361, for all purposes are treated as on foot from 22 July 2024 until further order of the Tribunal. ********** I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar Amendments 09 August 2024 - Paragraph [42] 1. The word "orders" now reads singular "order". 2. The word "effectively" moved to before the word "staying" instead of where it is now after "Decision". DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 09 August 2024