Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Farah v Director General, Department of Finance and Services [2014] NSWCATOD 112 Hearing dates: 1 September 2014 Decision date: 10 October 2014 Jurisdiction: Occupational Division Before: S Frost, Senior Member Decision: 1. Set aside the Respondent's decision to cancel the Applicant's real estate agent's licence. 2. Remit the matter to the Respondent for reconsideration in accordance with the direction that the Applicant is a fit and proper person to hold such a licence Catchwords: ADMINISTRATIVE LAW - Civil and Administrative Tribunal - real estate agent licensing - fit and proper person Legislation Cited: Property, Stock and Business Agents Act 2002 (NSW) Cases Cited: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 Farah v Director General, Department of Finance and Services [2013] NSWADT 197 Farah v Director General, Department of Finance and Services [2014] NSWCATAP 23 Hughes & Vale Pty Ltd v New South Wales (No. 2) (1955) 93 CLR 127 Category: Principal judgment Parties: Glenn George Farah (Applicant) Director General, Department of Finance and Services (Respondent) Representation: Counsel M Pesman SC (Applicant) P Griffin (Respondent) Bay Legal (Applicant) NSW Fair Trading Legal Services (Respondent) File Number(s): 1420203 reasons for decision Introduction 1The issue before the Tribunal is whether the Applicant, Glenn Farah, is a fit and proper person to hold a real estate agent's licence. 2Previously, the Administrative Decisions Tribunal (ADT) had held that Mr Farah was a "disqualified person" for the purposes of the Property, Stock and Business Agents Act 2002 (the Agents Act) because of his conviction in 2011 for money laundering: Farah v Director General, Department of Finance and Services [2013] NSWADT 197. The ADT had concluded that the money laundering offence was an offence "involving dishonesty" and that led to Mr Farah's being a "disqualified person" within s 16(1)(a) of the Agents Act. 3An Appeal Panel of this Tribunal upheld Mr Farah's appeal against the ADT decision: Farah v Director General, Department of Finance and Services [2014] NSWCATAP 23. The Appeal Panel concluded that the money laundering offence was not an offence "involving dishonesty". The question of Mr Farah's fitness and propriety to hold a real estate agent's licence, not determined by the ADT at first instance, was remitted to this Tribunal for determination. 4I have decided that Mr F is a fit and proper person to hold a real estate agent's licence and that his licence should be restored. These are my reasons. The background 5By the time the Respondent cancelled Mr Farah's real estate agent's licence in August 2012, he had been licensed for almost 20 years and had worked in the real estate industry for over 30. He had an unblemished record as an estate agent. The only black mark against him was then, and still is now, the money laundering conviction. 6The facts leading to the commission by Mr Farah of the offence are set out in the reasons for the original ADT decision at [6]. I will not repeat them here but it is necessary to provide a brief summary of them. 7Over a period of almost two years, between July 2007 and May 2009, Mr Farah made $46,500 worth of cheque and electronic payments on behalf of Wayne Cleveland and his family. Those payments were made to enable Cleveland to pay school fees owed by Cleveland; they were evidently treated by Mr Farah as loans to Cleveland and eventually repaid. As far as Mr Farah was aware, Cleveland was not engaged in any form of employment. Cleveland was convicted in August 2010 for conspiracy to import a commercial quantity of cocaine in December 2007. 8Mr Farah pleaded guilty in the District Court to a charge under s 400.6(2) of the Schedule to the Criminal Code Act 1995 (Cth) as follows: Between July 2007 and May 2009 at Sydney in the State of New South Wales did deal with money or other property which is the proceeds of crime and was reckless as to the fact that the money or property was the proceeds of crime, and at the time of the dealing, the value of the money and other property was greater than $10,000, namely $46,500. 9It was his conviction for that offence that led the Respondent's delegate to cancel Mr Farah's licence. The delegate also declared Mr Farah to be a disqualified person until 9 September 2021 and disqualified him from being involved in the direction, management or conduct of the business of a licensee until 9 September 2021. Is Mr Farah a fit and proper person to hold a licence? 10Both parties referred me to the High Court decision in Hughes & Vale Pty Ltd v New South Wales (No. 2) (1955) 93 CLR 127 as the authority confirming that the elements of fitness and propriety are knowledge, honesty and ability. At page 156 Dixon CJ, McTiernan and Webb JJ said: 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. 11In Australian Broadcasting Tribunal v Bond (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. The concept of "fit and proper" cannot be entirely divorced from the conduct of the person who is or will be engaging in those activities. However, depending on the nature of the activities, the question may be whether improper conduct has occurred, whether it is likely to occur, whether it can be assumed that it will not occur, or whether the general community will have confidence that it will not occur. The list is not exhaustive but it does indicate that, in certain contexts, character (because it provides indication of likely future conduct) or reputation (because it provides indication of public perception as to likely future conduct) may be sufficient to ground a finding that a person is not fit and proper to undertake the activities in question. 12In this case the Respondent submits that Mr Farah was not a fit and proper person at the time of the offending conduct and he therefore bears an evidentiary onus to satisfy the Tribunal that he has reformed. 13If I accepted the premise then I would be inclined to accept the conclusion. However, I do not accept the Respondent's characterisation of Mr Farah as something other than a fit and proper person at the time of the offending conduct. 14The question as to Mr Farah's fitness and propriety at the time of the offending conduct must focus on his fitness and propriety to hold a real estate agent's licence. In that enquiry I must ask myself what it is about his behaviour - constituted by an awareness of the substantial risk that the money was the proceeds of crime but the taking of the risk anyway - that rendered him unfit, at that time, to hold an agent's licence. In my view, there is nothing that warrants such a conclusion. 15In sentencing Mr Farah on 9 September 2011, Judge Zahra in the District Court said: It is difficult to determine precisely what the offender believed about the provenance of the money he dealt with. Whilst it can be inferred from the intercepted calls that the offender was aware of the substantial risk that the money was proceeds of crime, I am not satisfied that the offender was aware that the money was derived from the importation and/or sale of narcotics. The offender was under covert electronic and physical surveillance by police over a lengthy period of time when he made contact with Cleveland. The conversations between Cleveland and the offender extracted in the statement of facts occurred between the 12 March 2008 and the 14 June 2009, a period of about one year and three months. There is nothing in the material before me upon which it could be inferred that the offender was aware of the risk that the money was derived from the importation or trafficking in drugs. 16To the extent that Mr Farah's character and reputation are relevant to his fitness and propriety to hold an agent's licence (see Bond, above), Judge Zahra recorded the following: A significant number of testimonials have been tendered during the proceedings on sentence. There are a number of common themes. Those who deal with the offender in the course of his business refer to his industry. There are those who refer to the offender as an astute businessman and refer to his role in the expansion of his business. He appears to be respected as an employer. Significantly, the offender is known for his community support, sponsoring several sporting, charitable and a wide range of community organisations including hospitals and those in involved (sic) in medical research. The offender donates a significant amount of time to events run by these community groups and it would appear that the offender is also a significant financial contributor to these organisations. 17His Honour felt that Mr Farah's offending was "an episode of poor judgment". 18Mr Farah has submitted numerous character references to the Tribunal. The referees represent various arms of Mr Farah's life, including his business, sporting and community involvement. They speak highly of Mr Farah's professionalism, trustworthiness, honesty and loyalty. Referees include some of his competitors in the real estate industry and even they are supportive of him. Many of the referees regard his offending conduct as an aberration, and out of character. 19Mr Farah himself had some trouble articulating why he did what he did. His written statement dated 17 July 2014 claimed that at the time his "moral compass was out of sync" and his oral evidence was that he "wasn't with it mentally". Beyond that he found it difficult to explain his behaviour. He was assisted, during the criminal proceedings, by sessions with a psychologist who identified some depression and anxiety, together with low self-esteem. Mr Farah said that he had learnt from those sessions that he does not need to please people and that he should watch out for people who might try to take advantage of him. He has learnt through ethics training that he needs to take time, and be more methodical, in making his decisions. 20I accept that Mr Farah's offending conduct was an isolated occurrence and that it is unlikely to be repeated, particularly given the significant impact that his criminal proceedings, his sentencing, and the intervening two years without his licence have had upon him. He had had an unblemished career as a real estate agent and had been well regarded in the industry and in his community. Significantly, his offending conduct, while serious, was not connected with and had no bearing on his activities as a real estate agent. That he made such a serious mistake does not, therefore, reflect on his ability to practise as an estate agent and to do so competently and honestly. Nor, because of its isolated nature, does it reflect on his character. I respectfully agree with Judge Zahra's assessment that the conduct was "an episode of poor judgment", of a kind that has not been evident in any of his work activities over a period of 30 years or more. 21Mindful as I am that the primary purpose of the Tribunal's disciplinary jurisdiction is to protect the public, I am satisfied that Mr Farah is a fit and proper person to hold a real estate agent's licence. Conclusion 22I set aside the Respondent's decision to cancel Mr Farah's real estate agent's licence and remit the matter to the Respondent for reconsideration in accordance with the direction that Mr Farah is a fit and proper person to hold such a licence. Registrar 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 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: 10 October 2014