Administrative Decisions Tribunal New South Wales Medium Neutral Citation: Singh v Director-General, Department of Finance and Services [2011] NSWADT 296 Decision date: 14 December 2011 Jurisdiction: General Division Before: S Frost, Judicial Member Decision: Set aside the decision under review; substitute a decision to: (1)Disqualify the Applicant from being involved in the direction, management or conduct of the business of a licensee; (2)Impose a condition on the Applicant's certificate of registration that he not receive, access, handle or deal with trust money, or undertake the recording of financial transactions into the system of any licensee that employs him. Catchwords: Real estate salesperson - holder of a certificate of registration - Applicant's name previously removed from the roll of legal practitioners for professional misconduct - whether the Applicant is a "fit and proper person to be involved in the direction, management or conduct of the business of a licensee" - consideration of the appropriate sanction Legislation Cited: Property, Stock and Business Agents Act 2002 Cases Cited: Haining v Commissioner of Police, NSW Police Service [1999] NSWADT 6 Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 Law Society of NSW v Foreman (1994) 34 NSWLR 408 Category: Principal judgment Parties: Jaswinder Singh (Applicant) Director-General, Department of Finance and Services, NSW Fair Trading (Respondent) Representation: Counsel A Combe (Applicant) Low Doherty & Stratford Lawyers (Applicant) F Campora (Respondent) File Number(s): 113179 REASONS FOR DECISION 1GENERAL DIVISION (S FROST (JUDICIAL MEMBER)): Jaswinder Singh has worked in the real estate industry since 1989, apparently without incident or complaint. 2On 25 May 2011 a delegate of the Respondent issued a notice to Mr Singh under s 195 of the Property, Stock and Business Agents Act 2002 (PSBA Act) to show cause why disciplinary action should not be taken against him under that Act. 3The basis for the decision to issue the show cause notice was that the Legal Services Division of this Tribunal had found on 9 March 2011 that Mr Singh was guilty of professional misconduct as a legal practitioner, and ordered that his name be removed from the roll of legal practitioners: Law Society of New South Wales v Singh [2011] NSWADT 47 (the Law Society proceedings). 4After considering Mr Singh's response to the show cause notice, the delegate: * cancelled Mr Singh's certificate of registration under the PSBA Act; * declared him to be a disqualified person for the purposes of the Act, permanently; and * disqualified him from being involved in the direction, management or conduct of the business of a licensee under the Act. 5Mr Singh applied to the Tribunal, under s 200 of the PSBA Act, for review of that decision. 6On 15 July 2011 the Tribunal granted a stay of the decision, on condition that Mr Singh not receive, access, handle or deal with trust money, or undertake the recording of financial transactions into the system of his employer, who is a licensee under the PSBA Act. Mr Singh has apparently complied with the conditions imposed upon him. Factual background 7Mr Singh first obtained a certificate of registration to sell real estate in 1989. Over the years he has worked for several agencies in various suburban locations in Sydney. Since 2002 he has been in full-time employment as a real estate salesperson with an agency in Merrylands. 8In 1995 he commenced part-time external legal studies through the Legal Practitioners Admission Board (LPAB) course. He completed his studies in 1998 and then undertook a six-month full-time practical legal training course at the College of Law. He was admitted as a legal practitioner in New South Wales on 7 April 2000. 9He worked for a short time with the Crown Solicitor's Office and was then employed as an associate to a Federal Court Magistrate. In about the middle of 2002 he returned to his full-time real estate job with the agency in Merrylands. 10In August 2002 he obtained a Solicitor's Practising Certificate issued by the Law Society of New South Wales. It was a restricted practising certificate which did not entitle him to practice as a solicitor on his own account. 11The circumstances surrounding the removal of Mr Singh's name from the roll of legal practitioners are set out fully in the Tribunal's decision in the Law Society proceedings. In summary, during the period March 2006 to April 2007, he conducted three conveyancing transactions on behalf of "clients", deriving fees for himself when he was not entitled to do so; he handled trust moneys contrary to the conditions of his practising certificate; and then he tried to conceal his actions when applying for renewal of his practising certificate, and on subsequent investigation by the Law Society. 12The Tribunal found that he was guilty of professional misconduct in that his conduct "would reasonably be regarded as disgraceful or dishonourable by professional colleagues of good repute and competency". 13It was directly, and solely, as a result of the Tribunal's decision in the Law Society proceedings that the show cause notice was served on Mr Singh: s 58 documents (Exhibit R1), page 23, Section 2. The delegate expressed herself to be "of the opinion that there is reasonable cause to believe there are grounds for taking disciplinary action against" Mr Singh: Ex R1, p. 22, the particular ground being that he was "not a fit and proper person to be involved in the direction, management or conduct of the business of a licensee". The relevant law 14The PSBA Act is the legislation under which people in the real estate industry (and other industries) are regulated. The Act provides for the issuing of licences to "real estate agents" and the issuing of certificates of registration to "real estate salespersons". 15Mr Singh has never held a licence under the Act; he holds, and has only ever held, a certificate of registration . As the holder of a certificate of registration, Mr Singh must be employed and supervised by a licensee: s 11. 16Section 14(3) of the PSBA Act provides that a person is eligible to hold a certificate of registration only if the Director-General is satisfied that the person: (a)is an individual who is at least 16 years of age, and (b)is a fit and proper person to hold a certificate of registration, and (c)has the qualifications required for the issue of a certificate of registration of the type concerned, and (d)is not a disqualified person. 17Disciplinary action can be taken against the holder of a certificate of registration on any of the grounds set out in s 191 of the Act. The ground relied on in Mr Singh's case - that he is "not a fit and proper person to be involved in the direction, management or conduct of the business of a licensee" - is specified in paragraph (e). The possible types of disciplinary action that can be taken against a person, assuming that disciplinary action is considered appropriate, are specified in s 192. The delegate thought it appropriate to cancel Mr Singh's certificate of registration (paragraph (g)), declare him to be a disqualified person, permanently (paragraph (h)) and disqualify him from being involved in the direction, management or conduct of the business of a licensee (paragraph (i)). Alternative disciplinary action could have been any of the following, or a combination of any of them: * Cautioning or reprimanding him - paragraph (a); * Requiring him to give an undertaking as to the way he would exercise his functions under his certificate of registration - paragraph (b); * Requiring him to take specified action within a specified time - paragraph (c); * Imposing a monetary penalty - paragraph (d); * Imposing a condition on his certificate - paragraph (e); * Suspending his certificate - paragraph (f); or * Declaring him to be a disqualified person for a specified period, rather than permanently - paragraph (h). The "fit and proper person" requirement 18Occupational licensing legislation commonly imposes a requirement that a person wishing to participate in a given occupation be a "fit and proper person" to do so. The expression is found in legislation regulating occupations or professions as diverse as architects, driving instructors, travel agents, taxi drivers, and owners and trainers of racing greyhounds. 19However, that is not to say that a person who is considered a "fit and proper person" to be a greyhound trainer will necessarily be considered a "fit and proper person" to be an architect, or vice versa. As the President of this Tribunal said in Haining v Commissioner of Police, NSW Police Service [1999] NSWADT 6, at [41]: Whether a person is "fit and proper" to hold a licence in a regulated industry will be affected by general considerations relating to the character of the person, special considerations that take account of the nature of the industry in issue and the public policy objectives leading the legislature to regulate the industry. 20In Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321, Toohey and Gaudron JJ said at 380: The expression "fit and proper person", standing alone, carries no precise meaning. It takes its meaning from its context, from the activities in which the person is or will be engaged and the ends to be served by those activities. 21What must first be noted in Mr Singh's case is that the Respondent contends, and disciplinary action against Mr Singh hinges upon whether, Mr Singh is not a "fit and proper person to be involved in the direction, management or conduct of the business of a licensee". That poses quite a different question to the one posed at the time when the grant (or renewal) of a certificate of registration to Mr Singh was under consideration. At that time the question was simply whether Mr Singh was a "fit and proper person to hold a certificate of registration" - without which, according to s 10 of the Act, he would not be entitled to "be or remain as a real estate salesperson". A "real estate salesperson" is, relevantly, a person who, as an employee , exercises any of the functions of a real estate agent; that is to be contrasted with a "real estate agent", who is a person who carries on business as such. 22Mr Singh's current employer, Mr Joseph Michael, who has employed Mr Singh continuously since 1996 (except for the three-year period when he was at the College of Law and then working in the legal profession), says in Ex A3 that Mr Singh "does not have any role to play in the management or conduct" of Mr Michael's real estate agency business. I infer from that statement that Mr Singh also does not play any role in the "direction" of the business. Indeed, it is difficult to see how a person who holds not a licence but a certificate of registration, and who is therefore not authorised to carry on business as a real estate agent but can only be employed by one, can ever be involved in the "direction, management or conduct" of the business of a licensee. Moreover, it is hard to imagine why a licensee would wish to jeopardise his licence by entrusting the direction, management or conduct of the business to a person who is himself not authorised to carry on such a business. 23There is an argument that a person such as Mr Singh, as an employee of an agency, is (through that status alone) involved in the conduct of the business of a licensee. But I think the better view is that the word "conduct" in s 191(e) of the PSBA Act takes its flavour from the words "direction" and "management", so that some active participation in the affairs of the business is required before one can be said to be "involved in the ... conduct of the business of a licensee". Consideration 24Mr Singh submits that there is sufficient basis to find that he is a "fit and proper person to be involved in the direction, management or conduct of the business of a licensee". The submission is based on two propositions: that the Respondent's case against him is based "solely on the findings of the Administrative Decisions Tribunal with respect to a complaint by the Law Society of New South Wales"; and that those complaints have been "fully admitted by the Applicant and he is regretful and contrite". 25I accept the first of those propositions. However, it is appropriate to emphasise that there were two broad elements to the Law Society's complaint, and to the findings of the Tribunal in the Law Society proceedings. The first element was Mr Singh's breach of the conditions of his practising certificate. The second was the concealment of the fact, and the subsequent misleading of the investigators. The Respondent submits that the concealment and the misleading of the investigators demonstrate not an isolated transgression but a pattern of behaviour which reflects poorly on Mr Singh's character. As Mahoney JA said in Law Society of NSW v Foreman (1994) 34 NSWLR 408 at 449: Character is tested not by what one does in good times but in bad. 26The second proposition is supported by the following unchallenged statements from Exhibit A1 in these proceedings, none of which is inconsistent with any of the findings of the Tribunal in the Law Society proceedings: "I admit that I was not truthful and misled the investigator" [40]; "At the hearing, I did not dispute the application by the tribunal to have me removed. I knew that I should not have undertaken those conveyancing matters and I was ashamed at the way I dealt with the investigator" [44]; "I admitted to everything alleged by the Law Society and told the Tribunal that I was sorry for it" [45] - and see the decision in the Law Society proceedings at [26]. 27I regard these statements as unchallenged because the Respondent chose not to test them by cross-examination of Mr Singh. Furthermore, I have decided to give no weight to two sets of materials which are before me in evidence, but which relate to the Law Society proceedings: the Tribunal file (Ex R2) and the transcript of the hearing (Ex R3). That material formed the basis of the decision of the Tribunal as constituted for those proceedings. That Tribunal, so constituted, formed its own view of the relative significance of the various elements of that material. It chose to refer to some of the elements in its reasons for decision, and not to refer to others. It heard submissions in relation to the material, and those submissions helped it to assess the material as a whole and to decide what it would ultimately rely on in coming to its decision. It is not appropriate for the Tribunal differently constituted (and sitting in a different Division) to form its own view as to the strength of the case against Mr Singh in those proceedings, or to decide for itself that it may have viewed the material differently or been more influenced by elements of the material that the earlier Tribunal considered less influential or, perhaps, did not even mention in its reasons. 28It is also not challenged that, despite his lapse, Mr Michael remains supportive of Mr Singh. Mr Michael is fully aware of the circumstances that led to the removal of Mr Singh's name from the roll of legal practitioners (Ex A3 at [9]) and yet he says (at [17]) that he would have "no hesitation in continuing to employ Jas and if necessary with the restrictions as set out in my letter [which are those imposed by the Tribunal at the time of granting the stay] on a permanent basis". 29Also supportive of Mr Singh is one of his long-standing clients, Mr Enrico Cappelletto, who in Ex A4 also notes that he has read the decision of the Tribunal in the Law Society proceedings. He describes Mr Singh (at [7]) as "honest, reliable and professional", and "always acting in the best interest of the client". Mr Singh remains Mr Cappelletto's "agent of choice". 30The Respondent submits that there are many parallels between solicitors and participants in the real estate sector. In particular, the Respondent notes that it is expected of both classes of practitioner that they will act with ability, integrity and honesty. That much may be accepted. But it may also be observed that the PSBA Act distinguishes between two broad categories of authorised practitioners in the real estate industry: a licensee, on the one hand, and the holder of a certificate of registration, on the other. 31A licensee may, but a certificate holder may not, carry on business as a real estate agent. A licensee may, but a certificate holder may not, employ and supervise a certificate holder; in fact, a certificate holder must be so employed and supervised: s 11(1) and (2) of the Act. The regulatory regime imposes greater obligations on licensees than it does on holders of certificates of registration, and it expects more of them. In particular, it is implicit in the structure of the regime that a person who is a fit and proper person to hold a certificate of registration might not be a fit and proper person to carry out the additional obligations (whether actual or potential) of a licensee such as the direction, management and conduct of a business and the mentoring, guidance and general supervision of employed certificate holders. 32The focused question in this case is whether Mr Singh is a fit and proper person to be involved in the direction, management or conduct of the business of a licensee. In addressing that question it must be acknowledged that an involvement in those activities creates the very real potential that Mr Singh would be required to supervise certificate holders in his employ. The conduct which led to the removal of Mr Singh's name from the roll of legal practitioners renders Mr Singh, in my view, not a fit and proper person to be involved in those activities. 33It follows that s 191(e) is engaged, and that means that disciplinary action "can be" taken against him under Part 12 of the PSBA Act, although it does not have to be: s 193. 34I consider that some disciplinary action against Mr Singh is warranted. The Respondent took three discrete actions against Mr Singh. The first, authorised by s 192(g), was to cancel his certificate of registration. The second, authorised by s 192(h), was to declare him to be a disqualified person for the purposes of the Act, permanently. And the third, authorised by s 192(i), was to disqualify him from being involved in the direction, management or conduct of the business of a licensee. 35The third, in my view, is entirely warranted. While it does not follow automatically from a finding as to the circumstances in s 191(e), the disqualification of Mr Singh under s 192(i) is an appropriate protective order and one which is consistent with the regulatory objects of the Act. I note that taking action in relation to Mr Singh under s 192(i) does not have the consequence that he is a "disqualified person" for the purposes of s 16 of the Act and, for the avoidance of doubt, I observe that this sanction does not have the effect, within s 16(j), of declaring him to be a disqualified person under Part 12. 36On the other hand, I do not consider the first and second disciplinary actions to be the correct or preferable decision in the circumstances. It is a severe step to cancel a person's certificate of registration and to declare the person a disqualified person under s 192(h). No doubt it was not so much Mr Singh's breaches of the conditions of his solicitor's practising certificate as it was the concealment and the misleading of the Law Society and the trust account investigators that weighed heavily in the mind of the delegate when the disciplinary action was decided upon. The conduct undoubtedly falls well short of community expectations. But I do not agree that it is either necessary or desirable, on the basis of that conduct, to deprive Mr Singh of the opportunity to earn his livelihood as a real estate salesperson. Nor do I consider it necessary for the protection of the public to do so. 37There are in-built structural constraints on the activities that Mr Singh can lawfully carry out as the holder of a certificate of registration. I have dealt with these at [31] of these reasons. Those constraints provide a natural limitation on the potential for harm to consumers or other industry participants. In addition to that, there is Mr Singh's lengthy unblemished career as a real estate salesperson which weighs significantly in his favour as an indicator of the likelihood (albeit not the certainty) of future acceptable conduct. 38Despite that factor, I do consider it appropriate, not only for the protection of the public, but also to serve as a continuing reminder to Mr Singh that certain elements of his conduct have been found to fall short of community expectations, that the condition imposed by the Tribunal at the time of granting the stay of the original decision should remain as a condition on his certificate of registration. The imposition of a condition of that nature is authorised by s 192(e) of the PSBA Act. Order 39The Tribunal sets aside the decision under review and substitutes the following decision: (1)Disqualify the Applicant from being involved in the direction, management or conduct of the business of a licensee; (2)Impose a condition on the Applicant's certificate of registration that he not receive, access, handle or deal with trust money, or undertake the recording of financial transactions into the system of any licensee that employs him. ********** 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: 14 December 2011