Appeal Panel - Internal CITATION: Commissioner for Fair Trading, Office of Fair Trading v Grant; Commissioner for Fair Trading, Office of Fair Trading v John B Grant Real Estate Pty Ltd (GD) [2006] NSWADTAP 24 FIRST APPELLANT Commissioner for Fair Trading, Office of Fair Trading FIRST RESPONDENT PARTIES: John Bruce Grant SECOND APPELLANT Commissioner for Fair Trading, Office of Fair Trading SECOND RESPONDENT John B Grant Real Estate Pty Ltd FILE NUMBER: 059080, 059081 HEARING DATES: 01/05/06 SUBMISSIONS CLOSED: 05/01/2006 DATE OF DECISION: 05/16/2006 BEFORE: O'Connor K - DCJ (President); Higgins S - Judicial Member; O'Neill A - Non Judicial Member CATCHWORDS: procedural fairness - relevant/irrelevant considerations MATTER FOR DECISION: Principal matter FILE NUMBER UNDER APPEAL: 053008, 053009 DATE OF DECISION UNDER APPEAL: 11/25/2005 Administrative Decisions Tribunal Act 1997 LEGISLATION CITED : Property Stock and Business Agents Act 2002 Property Stock and Business Agents Regulation 2003 Grant v Commissioner for Fair Trading; John B Grant Real Estate Pty Ltd v Commissioner for Fair Trading [2005] NSWADT 268 CASES CITED: Hughes and Vale v State of New South Wales (No 2) (1955) 93 CLR 127 Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 House v The King (1936) 55 CLR 499 FIRST AND SECOND APPELLANT M Painter of counsel instructed by B Mauro, solicitor, Office of Fair Trading REPRESENTATION: FIRST AND SECOND RESPONDENT M Parasyn, solicitor ORDERS: Both appeals allowed in part. Leave given to extend appeal to the merits.; Appeal No 059080; 1. Tribunal's order setting aside Commissioner's declaration that respondent be disqualified: affirmed; 2. Tribunal's order in substitution imposing conditions on the respondent's licence: affirmed; 3. Appeal upheld as it relates to the adequacy of the conditions; 4. Conditions to be varied upon the making of any further order by the Appeal Panel; 5. Further hearing to be held in relation to order no. 4; Appeal No 059081; 1. Tribunal's decision not to impose fine on the respondent: set aside. Commissioner's decision not restored; 2. Appeal Panel to reconsider imposition of monetary penalty, and if appropriate impose a monetary penalty; 3. Further hearing to be held in relation to order no. 3. REASONS FOR DECISION 1 The Commissioner for Fair Trading is responsible under the Property, Stock and Business Agents Act 2002 (the Act) for the licensing of real estate agents. During 2004 the Commissioner undertook an investigation into the conduct of Mr John B Grant who is a licensed real estate and business agent. Mr Grant is the managing director of John B Grant Pty Ltd (the Company), which holds a corporate licence. 2 The investigation related to various aspects of the financial management practices of the Company. Financial management practices are the subject of detailed regulation, in particular as to the receipt of and dealing with trust monies: see Property, Stock and Business Agents Regulation 2003 (the Regulation), especially cll 27 and 28. 3 By determination dated 24 December 2004, the authorised delegate of the Commissioner concluded that the following grounds as set out in s 191 of the Act for taking disciplinary action were made out in relation to Mr Grant: '(a) the person has contravened a provision of this Act or any other Act administered by the Minister, or the regulations under any such Act, whether or not the person has been prosecuted or convicted of an offence in respect of the contravention, (c) the person has, in the course of carrying on business or exercising functions under the licence or certificate of registration, acted … incompetently, (e) the person is not a fit and proper person to be involved in the direction, management or conduct of the business of a licensee'. 4 The kind of disciplinary action that the Commissioner can take against a licensed person is the subject of s 192(1). The Commissioner, by the same determination, took action against Mr Grant under paras (g) and (h) which provide for the following actions: '(g) cancel the person's licence or certificate of registration, (h) declare the person to be a disqualified person for the purposes of this Act, either permanently or for a specified period'. 5 In this instance the Commissioner cancelled Mr Grant's licence, pursuant to para (g), and declared him, pursuant to para (h), to be disqualified for a period of six months. Both orders were to be effective 10 February 2005. 6 In the case of the Company the Commissioner, by the same determination, found that ground (a) of s 191 had been established (contraventions). 7 The Commissioner took action against the Company in terms of paras (c) and (d) of s 192(1) which provide: '(c) give a direction to the person requiring the person to take specified action within a specified time in connection with the conduct of business or the exercise of functions under a licence or certificate of registration, (d) impose a monetary penalty on the person of an amount not exceeding … 200 penalty units in the case of a corporation'. 8 The Commissioner directed that by not later than 31 March 2005 the Company, at its expense, develop a financial management compliance program that fully identifies and explains its obligations in respect of money received by the Company on behalf of another person. The Commissioner specified that such program is to be certified by a registered company auditor as being reasonably capable of ensuring that the Company meets those obligations. By not later than 7 April 2005 the Company was required to provide a hard copy of the program to the Commissioner. The Company was directed to provide audit reports in addition to those required by the Act over the next two years on a six monthly basis. 9 The Company was also fined 150 penalty units ($16,500). 10 The consequence of the Commissioner's orders for Mr Grant was that he was to be excluded entirely from any role in the industry for at least six months. This follows from the declaration that he be 'disqualified'. There can be no doubt that it was the Commissioner's intention to exclude Mr Grant entirely from the industry. The final paragraph of the Commissioner's determination dated 24 December 2004 stated: 'I draw the corporation's attention to section 43 of the 2002 Act.' 11 Section 43 provides: '(1) A licensee must not employ a person in any capacity in connection with the carrying on of the business conducted by the licensee if the person: (a) is a disqualified person, or (b) has had his or her licence or certificate of registration suspended or cancelled under this Act (unless a licence or certificate of registration has subsequently been granted to the person and is not suspended or cancelled), or (c) has had an application for a licence or certificate of registration refused on the ground that the person was not a fit and proper person to hold a licence or certificate of registration (unless a licence or certificate of registration has subsequently been granted to the person and is not suspended or cancelled). Maximum penalty: 50 penalty units.' 12 Moreover, a licensed company can not have a disqualified person as a director: s 14(2)(c). A person is not eligible to hold a certificate of registration enabling them to work in the industry as a salesperson or manager if he or she is a disqualified person: s 14(3)(d). A 'disqualified person' has the meaning given by s 16: see s 3(1). Such a person includes a person declared under Part 12 (which includes s 192) to be a disqualified person: s 16(1)(j). 13 On 18 January 2005 the Tribunal heard applications by Mr Grant and the Company for the Commissioner's determination to be stayed pending determination of their application for review. The Tribunal granted the application affecting Mr Grant's licence, permitting him to continue working in the industry subject to conditions. The determination that the Company pay a fine was stayed, the audit conditions were not stayed, and the timetable in relation to the financial management compliance program was varied by consent. 14 On 25 November 2005 the Tribunal delivered its decision, setting aside the Commissioner's orders as they related to Mr Grant: Grant v Commissioner for Fair Trading; John B Grant Real Estate Pty Ltd v Commissioner for Fair Trading [2005] NSWADT 268. Instead it ordered: '44 In relation to application number 053008 John B Grant v Commissioner for Fair Trading: 1. The determination that Mr Grant's licence number 123933 be cancelled and that he be declared a disqualified person for a period of 6 months is set aside. In its place, the decision is made that the following conditions are to apply to the licence for a period of six months from the date of these orders: a) Mr Grant is not to act as a licensee in charge of any real estate agency; b) Mr Grant is not to be involved in the day-to-day management of any entity operating as a real estate agency; c) Mr Grant is not to act in any supervisory capacity in any real estate agency; d) Mr Grant is to disclose the conditions to which he is subject to any licensee by whom he is employed and such disclosure is to occur prior to the commencement of employment in a real estate agency; and e) Mr Grant is to provide the Commissioner with written confirmation from the licensee that he has disclosed the condition to which he is subject prior to the commencement of employment in a real estate agency. 45 In relation to application number 053009 John B Grant Real Estate Pty Ltd v Commissioner for Fair Trading: 1. The determination to impose a monetary penalty of 150 penalty units on John B Grant Real Estate Pty Ltd is set aside. The determination under review is otherwise affirmed.' 15 In imposing conditions of Mr Grant's licence, the Tribunal, as substitute decision-maker, exercised the power given by para (e) of s 192(1), which allows the decision-maker to: '(e) impose a condition on the person's licence or certificate of registration,' 16 The Commissioner has appealed against the Tribunal's decision. Tribunal Reasons 17 The Company operates in the outer suburbs of Sydney; and has three offices situated respectively at Moorebank, Chester Hill and Glenfield. According to Mr Grant's evidence the three offices had a combined annual sales and rental turnover at that time of approximately $107m with 39 employees. 18 There was no dispute with the Commissioner's account of the instances of non-compliance that had occurred while Mr Grant had been general manager. They included: – The Company had failed to record in its internal records within the time required the receipt of rents into its trust account by tenants using a bank direct debit system – Several breaches of requirements relating to the timely banking of trust funds – Employment of three persons who did not hold a certificate of registration or a licence as required by the Act (not disputed that these were contraventions of ss 8(1) and 11(1)) – In the case of the Moorebank office, deficiencies in the trust account arising from failure to bank some creditor funds – In the case of the Moorebank office, criminal misappropriation of nine rental bond payments and two holding deposits by an employee (total amount $11,380) – In the case of the Chester Hill office, a pattern of irregularities in the corporation's trust account records, in particular aged outstanding deposits and aged unpresented cheques, with failure to reconcile irregularities from month to month – In the case of Glenfield, an apparent deficiency according to the Commissioner (disputed by Mr Grant), due to a series of failures to balance the end of month trust account reconciliations of $22,635 (as at 20 December 2004) 19 The Tribunal referred to the audit reports that had been presented during 2005 in consequence of the statutory requirements or the additional requirements (not stayed) that had been imposed by the Commissioner. The reports made in March, May, September and October were qualified noting continuing problems with the corporation's recordkeeping and reconciliation practices. The September and October reports noted a number of breaches of the Regulation. 20 The Tribunal referred to the submissions of the Commissioner and Mr Grant, and noted the evidence of Mr Grant as to the difficulties he claims to have had in implementing computerised account keeping systems, and the difficulties he has experienced in coming to grips with the systems and their requirements. 21 Under the heading 'Findings' the Tribunal from para [36] onwards of its reasons gave its assessment of the Commissioner's decision. The grounds of appeal refer to the Tribunal's reasoning process and the final orders, already quoted. Adequacy of Disciplinary Findings Made by Tribunal 22 As already noted, three of the disciplinary standards found in s 191 were seen by the Commissioner as relevant to this case: (a), breach of regulations; (c), incompetence; and (e), not fit and proper to be involved in the direction, management or conduct of the business of a licensee. As to (a), there was no dispute that there had been numerous breaches of the Regulation attributable to Mr Grant individually and to the corporation. As to (c), the Tribunal was satisfied that Mr Grant did not possess the requisite degree of competence. 23 As to (e), the Tribunal's position is unclear. The Tribunal did not make a specific finding addressing precisely the terms of s 191(e). The Commissioner has contended that in light of some of the conclusions expressed by the Tribunal in its reasons the Tribunal must have meant to find Mr Grant not a fit and proper person. If so, the Commissioner's order should have been upheld and Mr Grant disqualified. 24 It is desirable at this point to set out the entirety of the Tribunal's reasons under the heading 'Findings': '36 It is clear from the second reading speech of Mr Aquilina, the then Minister for Fair Trading upon the introduction of the Bill for the Act into the Legislative Assembly on 9 May 2002, that the Act is consumer protection legislation. Mr Aquilina said that the intention of the Act is "to protect consumers and their investments in their homes." In the event of ambiguity, the legislation should be given an interpretation that is consistent with that intention. He explained the Act's focus on competency in the following terms: "By ensuring that those who are granted a licence or certificate of registration demonstrate certain levels of competency, consumers are protected, consumer confidence is boosted, vocational professionalism is increased, and an economically efficient property sector ensues." 37 In my view, these issues are at the heart of these applications. The Commissioner's view is that Mr Grant does not possess the requisite degree of competence and that the protection of consumers and the general public requires that he no longer operate within the industry. I agree that the Commissioner's view was justified on the material that was available to the Commissioner at the time of the making of the determination that is under review. However, the Tribunal has material before it that was not available to the Commissioner and that material must be taken into account. 38 There is no doubt that three was a pattern of irregularities in the Company's trust account records. The time that it has taken to unravel these irregularities gives some indication of the extent of the problems. Nevertheless, I am satisfied that the public has not suffered financially as a result of those irregularities. This has been because Mr Grant has personally repaid any deficit to the Trust Account. 39 I do not share Mr Grant's confidence that it was merely a case of money that was in the trust account remaining unallocated. I agree with the Commissioner that the trust accounts were in such a poor state that it was unclear whether trust monies were missing. Mr Grant must bear the responsibility for that position. 40 It seems to me that Mr Grant does not possess the requisite degree of competence to manage an operation of the size conducted by the Company. It is not merely a lack of computer skills or lack of knowledge of the Clark System. There would be real risk that consumers might suffer financially if he were to remain in that role. Nevertheless, I do not agree that he should be prevented from playing any role in the industry. Accordingly, the determination that Mr Grant's licence be cancelled and that he be declared a disqualified person for a period of 6 months should be set aside. The issue then, is one of the appropriate steps to be taken to ensure that adequate consumers protection is in place. 41 Section 20 of the Act provides that a licence may be issued subject to conditions. Section 20(a) refers to "a condition prohibiting the holder from exercising functions under the licence or certificate of registration otherwise than as an employee of a licensee whose licence does not contain such a condition". In my view, it is appropriate in the circumstances that conditions of this kind be applied in Mr Grant's case so that he can be permitted to work as an employee. The conditions imposed on the granting of the stay are appropriate to achieve this purpose. In my view those condition should remain in place for a period of 6 months. As was noted, Mr Grant is entitled to perform duties that an employee of a real estate agency is entitled to perform including training sales staff. 42 With respect to the Company, I am satisfied that the irregularities in the Company's trust account records have been resolved to the stage that the public can have confidence in the operations of the Company provided that it continues to operate under close scrutiny. The objectives of ensuring that consumers are protected and boosting consumer confidence will be achieved through that process. In my view, the imposition of a monetary penalty would be excessive and is unnecessary. Accordingly, the determination insofar as it imposed a monetary penalty of 150 penalty units on the Company should be set aside. 43 It is appropriate that the directions that the Company submits six monthly audit reports and continue to operate a financial management compliance program remain in place. This arrangement should remain in place as originally directed so that Company will be required to submit further audit reports for the period up to and including 31 March 2006 and 30 September 2006.' 25 It will be seen that the Tribunal does not go so far as to find Mr Grant so unfit that he must not have any involvement in the direction, management or conduct of a licensee. The key paragraph is para [40]. The Tribunal is satisfied that Mr Grant 'does not possess the requisite degree of competence to manage an operation of the size conducted by the Company' (emphasis added). The Tribunal is conscious that an adverse finding under s 191(e) would force Mr Grant out of the industry, and says: 'Nevertheless, I do not agree that he should be prevented from playing any role in the industry.' It then goes on to indicate that the determination of the Commissioner should be set aside, and it made an order which allowed Mr Grant to continue in the industry on a supervised basis. 26 We note that the Commissioner made it clear in his findings that he did not regard Mr Grant to be lacking in honesty and integrity. The difference of opinion between the Commissioner and the Tribunal relates to the degree of gravity of Mr Grant's incompetence. 27 We turn to the specific grounds of appeal. 28 Ground 1: Ground 1 asserts that 'the decision maker [i.e. the Tribunal] acted in excess of jurisdiction in placing conditions on Mr Grant's real estate licence'. We do not see any difficulty that raises a question of jurisdiction. The Tribunal clearly followed the same path as the Commissioner. It examined the evidence, made findings in relation to the grounds for disciplinary action in terms of s 191, and then took disciplinary action under s 192. In the case of Mr Grant, it found two grounds, not three grounds, established, and imposed a lesser penalty than that preferred by the Commissioner. There is no issue of jurisdiction. The Tribunal is a substitute decision-maker, with all the functions of the administrator in relation to the matter: see Administrative Decisions Tribunal Act 1997 (the Tribunal Act), s 63(2). 29 Failure to Make Adverse Finding re Fitness: As we interpret the case of the Commissioner, the real concern is that the Tribunal's adverse findings as to matters of competence as a manager did not give rise, expressly, to the third finding made by the Commissioner – lack of fitness. 30 The Commissioner referred to the well-known dicta of the High Court in the case of Hughes and Vale v State of New South Wales (No 2) (1955) 93 CLR 127 which emphasise that a person's knowledge or skill may be so lacking as to warrant the conclusion that he or she is not a fit and proper person to hold a particular type of licence. Dixon CJ, McTiernan and Webb JJ said at 156: 'The expression 'fit and proper person' is of course familiar enough as traditional words when used with reference to offices and perhaps vocations. But their very purpose is to give the widest scope for judgment and indeed for rejection. 'Fit' or ( 'idoneus' ) with respect to an office is said to involve three things, honesty knowledge and ability: 'honesty to execute it truly, without malice affection or partiality; knowledge to know what he ought duly to do; and ability as well in estate as in body, that he may intend and execute his office, when need is, diligently, and not for impotency or poverty neglect it' – Coke .' 31 Returning to the case before the court (grant of licences to operate motor vehicles used in interstate trade), their Honours noted at 157 that the relevant administrator was 'invested with an authority to accept or reject an applicant the exercise of which depends on no certain or definite criteria and which in truth involves a very wide discretion'. 32 This approach was reiterated by Mason CJ in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 where he dealt at some length with the wide array of factors that might be taken into account in deciding whether a person (in that case a company) was a "fit and proper" person to hold a licence. His Honour referred to the breadth that should be attached to the content of the concept having regard to the social importance of the industry regulated, in that instance commercial broadcasting. Mason CJ said at [63]: 'The question whether a person is fit and proper is one of value judgment. In that process the seriousness or otherwise of particular conduct is a matter for evaluation by the decision maker. So too is the weight, if any, to be given to matters favouring the person whose fitness and propriety are under consideration.' 33 As we have already noted, in this case there was no challenge to the honesty and integrity of Mr Grant. The Commissioner's case relied entirely on his lack of competence. There was clearly a history of mismanagement by Mr Grant of his financial compliance responsibilities. The Commissioner's reasons referred at some length to transgressions in the past of a similar kind to the ones that were discovered by the Commissioner's latest investigation. This history certainly reflected adversely on Mr Grant's capacities as a manager. 34 It is clear from the case-law that the judgement as to fitness must always be guided by the nature of the work authorised by the licence and the nature of the responsibilities, which will often have a fiduciary character. We accept, as did the Tribunal, that the licensing scheme has important consumer protection objectives, and consumers should be protected against licensed persons operating in real estate who can not be trusted to handle deposits and payment obligations in an efficient way compliant in particular with trust account obligations. But as we read the Commissioner's and the Tribunal's reasons, Mr Grant's failures were only ones as a manager of systems, and as a person with ultimate responsibility for ensuring compliance with the relevant standards. 35 Section 191(e) requires unfitness to be demonstrated which is so great that the person can not be involved in the 'direction', 'management' or 'conduct' of a licensed business. In this instance the case is very strong as it relates to direction or management. The Tribunal, as we read its reasons and the conditions it imposed, was not satisfied that Mr Grant should not have any continued involvement in the 'conduct' of the business. There were no submissions put to us as to what 'conduct' might mean in this provision. Our view is that it refers to a lesser level of involvement in a business than is conveyed by the words 'direction' and 'management'. Read in context, it is not a synonym for 'direction' or 'management', despite one of the definitions of the ordinary meaning of 'conduct' given in the Macquarie Dictionary (1st ed 1981): '2. direction or management; execution; the conduct of a business.' 36 All professional staff could be said to have an involvement in the conduct of a real estate business. This view would appear to be reflected in the terms of s 8. Section 8 is the provision which requires agents to be licensed. It provides in sub-s (1) that '[a] natural person must not act as or carry on business of … (a) a real estate agent, unless the person is the holder of a real estate agent's licence'. Section 10 allows for salespersons or managers within agencies simply to hold certificates of registration. Section 10(2) refers to an 'employed licensee', and states that such a person need not also hold a certificate of registration. This provision, in particular, suggests that it is conceivable that a licensee could be permitted to continue to work in an agency on an employment basis without being involved in higher-end management or direction of the business. 37 It is difficult to see how, on the evidence, there is any danger to the public in allowing Mr Grant to continue as a real estate agent. As we read the orders of the Tribunal it was of the view that the problems of incompetence revealed by the case could be addressed by removing him from direction and management, but he could otherwise safely be left involved in the conduct of the business stripped of that authority. He was not unfit to that degree. 38 As best we can judge from the material and having regard to the scale of his business, he has over the years been a very effective real estate agent in respect of the core activities of negotiating the sale of properties and managing rental properties for landlords. There have, it appears, never been any complaints against him in that regard. 39 There are seven other grounds (grounds 2-8) but they come down, in our view, to three points: that the Tribunal took into account irrelevant considerations at a number of points, so far as relevant considerations are concerned did not give some of them adequate weight and as to one aspect of its deliberations may have, in addition, engaged in a denial of procedural fairness. 40 Grounds 2 to 8 – Relevant/Irrelevant Considerations/Procedural Fairness: In our view the criticisms made of the Tribunal's decision relating to the taking into account of irrelevant considerations and giving undue weight to irrelevant considerations are overstated. These grounds of appeal draw on the well-known statement of the High Court in House v The King (1936) 55 CLR 499 at 504-505 per Dixon, Evatt and McTiernan JJ: 'The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material considerations, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has material for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has occurred.' 41 The Commissioner criticised the following aspects of the Tribunal's reasoning process: – the reference to the fact that the public had not suffered financially because of irregularities in the management of the trust account because Mr Grant had purportedly personally repaid any deficiency to the trust account – the inadequate weight given by the Tribunal to relevant matters relating to the pattern of irregularities in the operation of the trust accounts, the state of the records and the extent of the problems revealed – failure to give adequate weight to the legislative purpose of the scheme, the protection of consumers – giving weight to further 'unidentified' material before the Tribunal which mitigated the finding that Mr Grant did not possess the requisite degree of competence, and by not identifying the material denying procedural fairness – giving unreasonable weight to the finding that the irregularities in the corporation's trust account were resolved to a stage such that the public can have confidence in the operations of the Company; and provided that it operates under close scrutiny – the decision can not be 'reasonably supported' on the evidence. 42 We agree that the objective of trust account management requirements and the like is to assure the public that there is no risk that their money will be placed at risk while in the hands of agents. We agree with the observation in the Commissioner's reasons that the amount of money that circulates in the real estate industry is so great that strong safeguards need to be put in place to guard against temptation by licensed persons and other employees in agencies to misuse that money. We agree with the Commissioner that is of concern that the Company has, in recent years, experienced two defalcations when at the same time it was under criticism from the Commissioner for the inadequacy of its internal practices. 43 So far as the first of the first three points is concerned, in our view the Tribunal was simply at this point noting that there had been no direct consumer financial losses. It was simply differentiating this situation from one where direct financial losses have occurred. In our view it is clear from the Tribunal's reasons read as a whole that it well understood that the consumer protection objectives involved deeper considerations, and that practices of the kind revealed by the case might result in direct harm to individual consumers. The second and third points of criticism are simply reworkings of the same argument, which we reject for the same reasons. 44 The fourth point raises the possibility that the Commissioner may have been denied procedural fairness, by the Tribunal taking into account 'unidentified' material. This criticism refers back to para [37] of the reasons where the Tribunal said: 'I agree that the Commissioner's view was justified on the material that was available to the Commissioner at the time of the making of the determination that is under review. However, the Tribunal has material before it that was not available to the Commissioner and that material must be taken into account.' 45 On reviewing the Tribunal's file, and having regard to the contents of the Tribunal's decision, this statement is, in our view, unproblematic. It may have been better had the Tribunal clearly spelt out what material it was referring to. But it is clear from the record that much additional material was before the Tribunal, in the form primarily of an affidavit from Mr Grant giving his version of the surrounding circumstances and in the form of the audit reports that had been submitted since the date of the Commissioner's decision. All the Tribunal was doing at this point of its reasons was saying that had there been no more material put on than that which was before the Commissioner, it would have come to the same conclusion as the Commissioner did, but now having regard to the extra material, it had a different view. 46 The Tribunal's obligation to have regard to the most current material is, of course, consistent with general notions of justice and fairness in administrative decision making and with the terms of the Tribunal's governing legislation, the Tribunal Act, s 63(1) which provides: '(1) In determining an application for a review of a reviewable decision, the Tribunal is to decide what the correct and preferable decision is having regard to the material then before it, including the following: (a) any relevant factual material, (b) any applicable written or unwritten law.' 47 There is in our view no basis shown for interfering with the conclusions of the Tribunal, either in relation to the gravity of Mr Grant's conduct and the conclusion that his conduct is best dealt with by an order short of cancellation or disqualification. 48 As to the fifth and sixth points, these relate to the Tribunal's assessment of the Company's conduct. There was no dispute by the Commissioner that the Company should be allowed to continue to operate. We have some concerns over the Tribunal's treatment of the penalty question as it relates to the Company, and will return to this subject. 49 The grounds of appeal also dealt with the adequacy of the Orders. Adequacy of Disciplinary Orders Made by Tribunal (a) Conditions Imposed on Mr Grant's Individual Licence 50 We also have concerns about the adequacy of the conditions imposed by the Tribunal on Mr Grant's licence. The Tribunal's principal condition (requiring him not to act as a licensee in charge of any real estate agency) was inadequate. It left open the possibility that Mr Grant could continue to work in the Company in circumstances where the change in control of the Company was not at arms' length. At the hearing of the appeal, he advised that his daughter had become a director and was running the Company. His description of his daughter's involvement suggested to us that she was involved only part-time, with her principal commitment of time being personal – to the care of a young family. A condition which results in an arrangement of this kind is, we think, not consistent with the consumer protection objectives of the legislation; or the Tribunal's conclusion that he should not be involved in direction or management. 51 In our view, it was important that Mr Grant be removed practically from any management role and that there be no perception that he might still be running the Company. It is clear that the history of financial mismanagement surrounding trust accounting and similar responsibilities is a sorry one. 52 In our view, any conditional order should ensure that Mr Grant get in someone of standing, experience and demonstrable independence to run the business for a period and straighten out the accounting difficulties. As the Commissioner observed in submissions, the audit reports, while showing improvements in practice, continue to report failures and breaches. This situation needs to be turned around. 53 Accordingly we would uphold the appeal as it relates to the adequacy of conditions (a) to (e). 54 In our view there should be a further hearing to consider varying and strengthening the conditions so that the public can be assured that new management has been brought in, say for at least a 12 month period. The new manager should be a person of manifest experience and independence approved by the Commissioner; and the condition restricting Mr Grant's involvement in management should only be removed once the new manager reports that a standard of strict compliance with financial management requirements has been achieved. (b) Orders against Company 55 As to the second part of the Tribunal's decision, the decision relating to the Company, we uphold the Commissioner's appeal. The Tribunal gave no adequate reasons in our view as to why the fine should be set aside. 56 Here serious misconduct on the part of the Company had been identified – numerous contraventions of the financial management regulations. But the Commissioner and the Tribunal both concluded that it should not be stripped of its licence. Their reticence to do so is understandable, given the scale of the business and the number of employees whose livelihood depended on the business. The reasons given at [42] commence by stating the Tribunal's view that the irregularities in practice had been 'resolved to the stage that the public can have confidence in the operations of the Company provided that it continues to operate under close scrutiny'. The Tribunal continued that as this met the consumer protection objectives of the legislation the imposition of a monetary penalty 'would be excessive and unnecessary'. 57 The difficulty we have with the reasons as to penalty is that no reference is made to the past history of non-compliance or inadequate compliance with requirements, and the entire disciplinary history affecting Mr Grant and his Company. We think this was a matter to be taken into account on penalty, and was not. We are of the view that the determination not to impose a fine should be set aside, and further submissions should be considered at the resumed hearing. That said, it may be that the point at which the Commissioner pitched the fine is excessive. We are inclined to the view that a fine at 75% of the maximum allowed by the legislation is rather high. Conclusion 58 To summarise, our conclusion is that in the case of Mr Grant the principal order of the Tribunal should be affirmed, but the conditions (a) to (e) varied, and new conditions substituted. Conditions (a) to (e) are to remain operative until varied. That will mean, and we accept that, that once the date of expiry of the present conditions is reached (we understand that to be on or about 25 May 2006) Mr Grant will not be prevented from resuming as manager until such time as any further order is made by the Appeal Panel. 59 Our conclusion is that in the case of the Company, the Tribunal's order should be set aside, and further submissions heard by the Appeal Panel as to an appropriate financial penalty. 60 It will be apparent from these reasons that we are of the view that the appeal should be permitted to extend to aspects of the merits of the Tribunal's decision, and that the Appeal Panel should finalise the matter without remittal back to the Tribunal, especially as there is no dispute of any significance in this case as to the underlying facts. Order Both appeals allowed in part. Leave given to extend appeal to the merits. Appeal No 059080 1. Tribunal's order setting aside Commissioner's declaration that respondent be disqualified: affirmed. 2. Tribunal's order in substitution imposing conditions on the respondent's licence: affirmed. 3. Appeal upheld as it relates to the adequacy of the conditions. 4. Conditions to be varied upon the making of any further order by the Appeal Panel. 5. Further hearing to be held in relation to order no. 4. Appeal No 059081 1. Tribunal's decision not to impose fine on the respondent: set aside. Commissioner's decision not restored. 2. Appeal Panel to reconsider imposition of monetary penalty, and if appropriate impose a monetary penalty. 3. Further hearing to be held in relation to order no. 3. 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.