Dalkic v Director-General, Department of Services, Technology and Administration (GD) [2010] NSWADTAP 78

Appeal Panel - Internal

CITATION: Dalkic v Director-General, Department of Services, Technology and Administration (GD) [2010] NSWADTAP 78

APPELLANT Nursen Dalkic

PARTIES: RESPONDENT Director-General, Department of Services, Technology and Administration

FILE NUMBER: 109032

HEARING DATES: 16 August 2010

SUBMISSIONS CLOSED: 16 August 2010

DATE OF DECISION: 2 December 2010

BEFORE: O'Connor K - DCJ (President); Montgomery S - Judicial Member; Bolt M - Non-Judicial Member

CATCHWORDS: Real Estate Agent Licence - Refusal of Application - Not Fit and Proper Person - Objections to Factual Findings of Tribunal - Appeal dismissed

DECISION UNDER APPEAL: Dalkic v Commissioner for Fair Trading, NSW Office of Fair Trading [2010] NSWADT 89

FILE NUMBER UNDER APPEAL: 093138

DATE OF DECISION UNDER APPEAL: 04/09/2010

Administrative Decisions Tribunal Act 1997 LEGISLATION CITED : Property, Stock and Business Agents Act 2002 Supreme Court Act 1970

CASES CITED: Saglimbeni v Commissioner for Fair Trading, NSW Office of Fair Trading [2008] NSWADT 1

APPELLANT S El-Hanania, solicitor REPRESENTATION: RESPONDENT J Coss, legal officer

ORDERS: Appeal dismissed

REASONS FOR DECISION 1 The Tribunal has affirmed a decision by a delegate of the Commissioner of Fair Trading (as the office was then known) that the appellant, Mrs Nursen Dalkic is ineligible under s 14 of the Property, Stock and Business Agents Act 2002 ('the Act') to be issued with a real estate agent's licence on the ground that she is not a fit and proper person to hold such a licence. 2 Mrs Dalkic now appeals. An appeal may be made on a question of law, and, by leave of the Appeal Panel, extended to the merits: Administrative Decisions Tribunal Act 1997 (ADT Act), s 113. Both parties filed written submissions, and the hearing was held on 16 August 2010. 3 The circumstances giving rise to the conclusion that Mrs Dalkic is not fit to hold a licence relate to her involvement in the business of Parker and McCue Real Estate Pty Ltd, of which she was a director from 10 November 2004 to 19 June 2008, along with her husband, Mustafa Dalkic. The company operated the business of 'Parker and McCue Real Estate', Auburn. It held a corporation licence between 22 August 2003 and 18 December 2007. The business name, 'Ray White (Auburn)' was registered to Parker and McCue from 31 May 2007 to 8 April 2008. 4 On 9 July 2008, on the application of the Commissioner, the Supreme Court issued injunctions against Mr and Mrs Dalkic restraining them from carrying on business as real estate agents, and the company was placed in receivership, with Mr Richard Porter appointed as manager of Parker and McCue Real Estate Pty Ltd. Mrs Dalkic continued to work in the business as a bookkeeper. 5 Mrs Dalkic made the licence application under notice in February 2009. The Commissioner's reasons for considering her not fit and proper to be granted a licence relate mainly to Mrs Dalkic's conduct in the period of administration. The Commissioner relied on the following matters: (1) she had acted as or carried on the business of a real estate agent without holding the required licence under the Act; (2) as a director of the company, she had allowed Parker and McCue Real Estate Pty Ltd to act as or carry on the business of a real estate agent without holding the required corporation licence under the Act; (3) she had not informed Mr Porter of her actions in taking on new business for Parker and McCue Real Estate Pty Ltd; and (4) she had given inaccurate information to a Fair Trading officer about the date that she had arranged to put advertisements back on the website, www.realestate.com.au 6 The Commissioner also decided that she was ineligible as she fell within the category of a 'disqualified' person, having regard to her involvement as a director in another company which collapsed, Auburn Central Real Estate Pty Ltd. The Tribunal disagreed with the Commissioner because Mrs Dalkic had, in its opinion, taken all reasonable steps to avoid that collapse, and therefore fell within the exception allowing such a person not to be deemed disqualified. 7 The Commissioner raised a question of law in submissions as to this aspect of the ruling, submitting that there had been a misconstruction of the relevant law by the Tribunal. The ADT Act's appeal provisions do not provide expressly for a point to be raised in this way (in effect as a notice of contention). The difficulty is recognised in the Tribunal's appeal practice note. We will deal with this issue briefly at the end of these reasons, see [19] ff. Grounds of Appeal 8 At para [96] ff of its reasons the Tribunal sets out well-known statements in the case-law as to what is encompassed by the expression 'fit and proper' and as to the approach that should be taken to its consideration. There is no dispute with the Tribunal's treatment of these matters. The dispute is about the way the Tribunal judged the evidence and other material going to this point. 9 Mrs Dalkic challenges as inaccurate and giving rise to error a number of the statements made by the Tribunal in the following paragraphs: 101 I find that, on several occasions, Mrs Dalkic carried on business as a real estate agent when she did not hold a real estate agent's licence to do so and when Parker and McCue Real Estate Pty Ltd did not hold a corporate licence entitling the company to trade as a real estate agency. I accept the evidence contained in the affidavit of Mr Mildwater [the Office of Fair Trading investigator] dated 3 July 2008 that on 13 May 2008, 27 May 2008 and 4 June 2008, Mr Mildwater found the premises of Parker and McCue Real Estate Pty Ltd open for business and Mrs Dalkic in attendance there. I accept that on these dates, Parker and McCue Real Estate Pty Ltd did not hold a corporate licence and that Mrs Dalkic did not hold a real estate agent's licence. I also accept the evidence contained in Mr Mildwater's affidavit that on 24 April 2008, 11 June 2008 and 19 June 2008 properties were advertised on www.realestate.com by the company. I accept that on these dates, Parker and McCue Real Estate Pty Ltd did not hold a corporate licence. 102 I find that, as a director of the company at this time, Mrs Dalkic acted improperly in allowing the company to open for business whilst being unlicensed and in allowing advertisements to be placed on www.realestate.com.au. 103 On the basis of the Supreme Court documents contained on file, I am satisfied that Mr Richard Porter was appointed as manager of Parker and McCue Real Estate Pty Ltd on 15 August 2008 and that Mrs Dalkic was then employed to undertake administrative duties at Parker and McCue Real Estate Pty Ltd under the direction of Mr Porter. 104 I further find that between 8 and 20 May 2009, when she did not hold a real estate agent's licence, Mrs Dalkic posted advertisements on the website www.realestate.com.au. In her own evidence, Mrs Dalkic agreed that she acted contrary to the directions of Mr Porter when, having removed advertisements from the website, she put some back up following complaints from vendors. I find that in doing this, she was not acting under the authority of Mr Porter. 10 Her first ground of appeal raises as a question of law the validity of the Supreme Court order dated 9 July 2008 appointing Mr Porter as manager. The jurisdiction exercised was that given by s 126(1) of the Act. Mrs Dalkic, who continued as an employee of the business, was obliged to work under the authority and supervision of Mr Porter and not engage in any activities that could only be performed by a person with a licence. 11 The contention is that the order was defective in that it did not specify the remuneration to be paid to Mr Porter. In our view, this is not a matter that can be agitated in this Tribunal. 12 The Tribunal and the Commissioner were entitled to treat the order as valid on its face. The appropriate place to challenge the order as defective is by appeal to the Court of Appeal (see Supreme Court Act 1970, s 101(1)(a)), not the Tribunal by way of a ground in a licensing dispute. 13 The next ground objects to the date given in para [103] of the reasons for the appointment of Mr Porter, '15 August 2008'. The right date is 9 July 2008. Mrs Dalkic relies on this as an error of law. The Tribunal made a mistake in the nature of a slip as to a date. There is no error of law involved. The mistake did not in any way prejudice Mrs Dalkic in relation to the ultimate outcome. 14 The other grounds challenge factual findings of the Tribunal. There was ample material before the Tribunal to support the factual findings it made. The hearing took two days with about half of the time devoted to the fitness and propriety issues, i.e. Mrs Dalkic's involvement with the business of Parker and McCue Pty Ltd. 15 Where there are conflicts in evidence heard by a court or tribunal, there is little that can be done to challenge the court or tribunal's ultimate resolution of that conflict. Error of law only arises in very narrow circumstances, such as there is no evidence to support a finding, critical evidence has been overlooked or there is an absence of probative evidence. None of these objections were made in this case. 16 As to point (4) of the Commissioner's decision endorsed at para [104] of the Tribunal's reasons, weight is placed on Mrs Dalkic's evidence that the advertisements had first appeared on the web site prior to Mr Porter's appointment. This evidence is not helpful to Mrs Dalkic's position. The company was trading without a corporation licence as from 19 December 2007. The evidence is that they remained on the web site after it ceased to hold a licence. The evidence was also that Mrs Dalkic took the advertisements down, and then re-posted them. 17 We agree with the Commissioner's submissions that, in criticising the Tribunal's reasons on this point, Mrs Dalkic seeks to exclude from consideration that part of the Tribunal's findings for which there was ample evidence. There is no evidence that Mr Porter gave an instruction to her to re-post the advertisements, other than her assertion to that effect, which it rejected. 18 In these circumstances, it was open to the Commissioner and the Tribunal to conclude as it did that Mrs Dalkic was 'carrying on business' as an agent without a licence, in contravention of s 8(1)(a) of the Act. Postscript: Reasons as they relate to the Disqualified Persons Provisions 19 Section 16(1A) relevantly provided as at the date of the Commissioner's primary decision (21 May 2009) and internal review decision (30 June 2009): (1A) A person is also a disqualified person for the purposes of this Act (except for the purposes of eligibility to hold a certificate of registration) if the person: … (d) is a person: (i) who was, at any time in the last 3 years, concerned in the management of, or a director of, a body corporate that, within 12 months after the person ceasing to be such a person or director, became an externally-administered body corporate (within the meaning of the Corporations Act) except in the case of a voluntary winding up of the body corporate, and (ii) who failed (while concerned in the management of, or a director of, that body corporate) to take all reasonable steps to avoid the body corporate becoming an externally-administered body corporate. 20 This provision took effect on 1 March 2007. The Tribunal referred to the provision in its reasons, see para [11]. 21 As enacted in 2002, the analogous provision was s 16(1)(e) which provided: A person is a disqualified person for the purposes of this Act if the person: (e) at any time in the 3 years preceding the application for the licence or certificate of registration, was concerned in the management of a corporation when the corporation was the subject of a winding up order or when a controller or administrator was appointed, unless the Director-General is satisfied that the person took all reasonable steps to avoid the liquidation or administration, or … 22 In examining the adequacy of Mrs Dalkic's conduct as a director of Auburn Central Real Estate Pty Ltd when it faced potential insolvency, the Tribunal had regard to an approach adopted by Judicial Member Montgomery in Saglimbeni v Commissioner for Fair Trading, NSW Office of Fair Trading [2008] NSWADT 1. The original provision was in force at the time of the Commissioner's decision in that case, and accordingly Montgomery JM addressed the issue on the basis of the original provision. 23 The Tribunal in this case is said to have erred in applying the criteria used by Montgomery JM to inform his discretion, as they concerned the old provision. Those criteria were: (i) When did Mrs Dalkic know, or ought she to have known, that external administration in question was a possibility? (ii) What steps did Mrs Dalkic take to avoid the external administration? (iii) What steps would a reasonable, informed person in Mrs Dalkic's situation have taken to avoid the external administration? 24 The main difference between the original and current provision is the inclusion in the current provision of the words 'who failed (while concerned in the management of, or a director of, that body corporate) to take' all reasonable steps, etc. 25 In its original form the Commissioner was required to be 'satisfied' that the person took all reasonable steps, while there is no reference in the later formulation to the Commissioner being satisfied as to the matter and a person is disqualified if they failed to take all reasonable steps. 26 It is not immediately obvious that the new provision is significantly different in effect to the old provision. It appears to be more in the nature of a tidying up of the old provisions on this subject (which also dealt with bankruptcy (s 16(1)(c)) and schemes of arrangement (s 16(1)(d)). 27 The respondent's submissions asserted that the Minister's second reading speech (Hansard, 8 November 2005 (LA); and 7 March 2006 (LC), Property, Stock and Business Agents Amendment Bill) gave a policy reason for the amendment which makes reliance on the old authorities under the earlier provisions questionable. We can see nothing in the speech attaching any significance to the reformulation under notice, i.e. that affecting the entry into external administration of licensed corporations. The text to which the Commissioner's submissions refer arises in the context of an explanation of changes to the provisions dealing with individuals affected by bankruptcy. 28 On this occasion, we will simply note the submission. There is no cross-appeal against the decision itself. The submission is open to be pressed and considered more closely on a future occasion. Order