Disqualification of high profile agent upheld

Business, Industry News, Journal,  Principals

A long running dispute between the Office of Fair Trading and high-profile Gold Coast real estate agent Sarah Penney-Filippini recently resurfaced in the Queensland Civil & Administrative Appeals Tribunal earlier this year as a result of appeal. 

Sarah Penney-Filippini has been involved in a long running dispute with the Office of Fair Trading (OFT), beginning in 2009 when she was fined $6,000 by the Competition & Consumer Tribunal (CCT) for breaching S496 of the Property and Motor Dealers Act (2000) (PAMD Act), [1] for carrying on a business under a licence with someone who wasn’t a suitable person to hold a licence. [2] That unsuitable person in this case was her mother, Heather Filippini, who was permanently disqualified from holding a licence or registration certificate in the same CCT proceedings in 2009.

The applicant had been acting as principal of her mother’s real estate business, Heather Filippini Island Realty (later changed to Island Realty) since her mother’s permanent disqualification.  In July 2016, QCAT found there were sufficient grounds to take disciplinary action against the applicant specifically, acting in an unprofessional way in 2012 by employing her mother in her real estate business in circumstances where she didn’t hold a registration certificate as a real estate salesperson and failing to meet several requirements relating to her business trust account, in contravention of the PAMD Act. [3]

In 2012, Filippini attended four open homes conducted by the applicant and engaged in negotiations with prospective purchasers. The QCAT found the lack of formal engagement, lack of invitation and lack of any loss suffered by any of the people Filippini engaged in negotiations with was irrelevant – the fact the applicant had allowed her mother’s actions was sufficient to initiate disciplinary proceedings.

The trust account breaches which occurred in 2012 and 2013 were relatively minor. The QCAT found the applicant had failed to keep two receipts for the 2011/2012 period, failed to sign seven receipts from 2011-2013, failed to include the year on a large number of receipts from 2011-2013, and the end-of-month reconciliations of bank statement balances and trust account cash book balances were out by 10 or 11 cents in 2011. The combination of these breaches were the ‘less serious aspect’ of the disciplinary hearing.

With the disciplinary hearing taking place in 2018, the QCAT imposed a fine of $3,000 for the various trust account breaches and disqualified the applicant from holding a registration certificate or licence under the Property Occupations Act 2004 (Qld) (PO Act) for a period of three years for her unprofessional behaviour.[4] The significance of the disqualification was intended to reflect the seriousness of the applicant’s conduct, especially in light of the previous CCT proceedings.

SEE ALSO: Don’t be tempted to touch that trust account

The preceding circumstances resulted in an appeal by the applicant before the Queensland Civil & Administrative Appeals Tribunal (Appeals Tribunal) in August 2019 with a decision handed down in December 2019. The applicant sought to have the disqualification order substituted for a fully suspended disqualification order. This would allow her to continue acting as a real estate agent, unless or until she commits another contravention of the PO Act. The Chief Executive argued that the appeal should be dismissed and the sanction confirmed.

The applicant’s first ground of appeal was that the sanction was manifestly excessive. She made a range of submissions on this ground – notably that there was no dishonesty involved, no loss or harm was suffered by anyone and that a sanction of this severity isn’t necessary to protect the public in the circumstances. The Appeals Tribunal ultimately upheld the QCAT’s judgment and concluded a reprimand or wholly suspended suspension wouldn’t adequately reflect the seriousness of the conduct or promote public confidence in the effectiveness of the regulatory system.

Another ground of appeal was that the QCAT had been misled as to the effect that a disqualified licence would have on the applicant’s ability to continue to operate the business and the effect it would have on her livelihood. The applicant submitted she would no longer be able to own her business if she were disqualified, which would have a significant impact on her career in the future. The QCAT considered this in their original decision however decided the applicant’s law degree and transferrable skills provided her with adequate opportunities for an alternate career, even if she wasn’t permitted to own her real estate business during the disqualification period.

The applicant submitted that a wholly suspended period of disqualification or reprimand would be sufficient to promote public confidence in the effectiveness of the regulatory system. The Appeals Tribunal found the QCAT’s conclusion that lesser sanctions wouldn’t promote public confidence was a reasonable discretionary judgment and was an appropriate decision to make in the circumstances. As a result, this ground of appeal was dismissed.

The applicant also submitted that the QCAT shouldn’t have relied on the 2009 penalty in isolation without considering the surrounding facts and circumstances. The Appeals Tribunal conceded there were some extenuating circumstances in 2008 when the first inappropriate conduct occurred but that the extenuating circumstances were no longer relevant in 2012 when the inappropriate conduct occurred again. The Appeals Tribunal concluded that the sanction imposed by the CCT was reasonable at the time it was made and that there was no reason to disregard its relevance.

All of the applicant’s grounds of appeal were dismissed by the Appeals Tribunal. The original decision made by the QCAT was upheld. However, the date the disqualification was to take effect was extended to allow the applicant and her staff time to get their financial affairs in order.

Fundamentally, this decision highlights the importance of ensuring all staff employed as real estate agents have the appropriate qualifications and licences and only carry out activities within the scope of their qualifications. In addition, it also demonstrates the importance of ensuring all trust accounting matters fully comply with regulatory requirements, as even seemingly minor breaches can have serious consequences.

[1] Penney-Filippini v Chief Executive, Department of Justice and Attorney-General [2019] QCATA 163
[2] The Property and Motor Dealers Act 2000 (Qld) has now been repealed and replaced with the Property Occupations Act 2004 (Qld) (PO Act). In circumstances where a disciplinary action commences under the PAMD Act, s 258(3) of the PO Act provides that the disciplinary action may be ‘finished under PAMD Act as if the Act had not been repealed’.
[3] The Chief Executive, Office of Fair Trading v Filippini, Penney also known as Filippini [2009] QCCTPAMD (29 October 2009).
[4] Chief Executive, Department of Justice and Attorney-General v Penney Filippini [2016] QCAT 253 (19 July 2016).
[5] Chief Executive, Department of Justice and Attorney-General v Penney-Filippini [2018] QCAT 262 (7 August 2018).

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