Suitability matters: recent QCAT decision to refuse licence renewal application

On 25 March 2024, the Queensland Civil and Administrative Tribunal (the Tribunal) delivered judgment in the matter of Prentis v Chief Executive, Department of Justice and Attorney General. [1]

In that case, the Tribunal confirmed the decision of the Chief Executive of the Department of Justice and Attorney-General to refuse an application to renew a real estate agent licence. 

The facts

The applicant, Mr Prentis, first obtained a real estate agent licence in 1994.  He was subsequently the sole director of Wayjac, a company which obtained a real estate agent licence in 1998.  

Both Mr Prentis and Wayjac were involved in substantial compliance issues regarding their real estate licences, including:

1. failures to lodge audit reports within the proscribed timeframes in 2006, 2011, 2014, 2015 and 2017;
2. failure to be appointed as an agent in writing in 2009;
3. entering into an enforceable undertaking in 2016 following an investigation into the following conduct by Wayjac:
   1. holding a large number of unclaimed monies within a trust account;
   2. failure to pass on monies to the persons entitled to them on 76 occasions between 2007 and 2015;
   3. failing to pass bond money on to the persons entitled to them on 29 occasions between 2011 and 2015; and
   4. failure to close a trust account which was no longer in use and which the Office of Fair Trading had directed the closure of in 2012.
4. breaching the above enforceable undertaking by failing to lodge audit reports within prescribed timeframes and failing to disburse monies and close a trust account;
5. being prosecuted in the Brisbane Magistrates Court in 2019 in relation to failures to lodge audit reports within the proscribed time frames;
6. having Wayjac’s licence suspended in 2019 for failing to lodge audit reports within the proscribed timeframes;
7. the freezing of Wayjac’s trust accounts in 2019 following investigations by the Office of Fair Trading (OFT);
8. the appointment of a receiver of Wayjac in 2019 due to the above conduct;
9. the issuance of an infringement notice on Wayjac in 2019 in relation to its failure to lodge audit reports within the proscribed timeframes; and
10. the failure to cooperate with OFT inspectors in providing information requested by letter in 2020.

In 2020, Mr Prentis applied to the Chief Executive to renew his real estate agent licence and provided information about significant health issues which had impacted him since 2006.

Mr Prentis did not provide any evidence to the effect that he had taken any steps between 2006 and 2019 to satisfy his obligations notwithstanding his significant health concerns.

Eligibility criteria for a real estate agent licence

A person applying for a real estate agent licence must be both suitable and eligible to be the holder of the licence. [2] 

Pursuant to s 36 of the Property Occupations Act 2014 (Qld) (the Act), the Chief Executive must consider certain factors in deciding whether a person is a suitable person to hold a real estate agent licence, including:

1. the character of the applicant;
2. the character of the person’s business associates;
3. whether the person held a licence that was suspended or cancelled;
4. whether the person has been disqualified from being the holder or a licence or from managing corporations;
5. whether the person has been convicted of an offence against a relevant Act; and
6. whether the applicant is capable of satisfactorily performing the activities of the licensee.

The effect of non-compliance on suitability

In this case, the Tribunal found that Mr Prentis’ history of non-compliance demonstrated a “continuous and lengthy period of failure to properly carry out and undertake the responsibilities of a licenced real estate agent from 2006 to at least 2019”. [3]

It was held that Mr Prentis’ failure to comply with his obligations as a licensed real estate agent for a prolonged period of time demonstrated that he was not capable of satisfactorily performing the activities of a licensed real estate agent pursuant to s 36(1)(h)(iv) of the Act. [4]

In light of the above, the Tribunal found that Mr Prentis was “clearly not a suitable person during that period of non-compliance” and that “the non-compliance was substantial and related to a failure to lodge trust account audits, financial matters and in the applicant’s dealing with the public”. [5] 

Health concerns

In relation to the impact which Mr Prentis’ health played in relation to his suitability, the Tribunal noted that, if an agent’s compliance with statutory obligations is impacted significantly by ill-health, it is expected that the agent would have made suitable arrangements to satisfy those obligations during the relevant period to ensure compliance. [6]

Present capability

The Tribunal thereafter considered whether there was any evidence which would show that Mr Prentis was capable of satisfactorily performing the activities of a licenced real estate agent at the present time, notwithstanding his history of non-compliance.

In his evidence, Mr Prentis referred to the improvement in his health but did not address whether he had taken any steps to ensure or to address his knowledge of the relevant timeframes he would have to meet in the event his application was approved.

In the circumstances, the Tribunal was not satisfied that Mr Prentis was capable of satisfactorily performing the activities of a licenced real estate agent as required by s 36(1)(h)(iv) of the Act, and was accordingly not suitable to hold a licence as a real estate agent. [7]

The decision is a welcome reminder that real estate agents must demonstrate that they are capable of satisfactorily performing the activities of a real estate agent if they wish to hold a licence.

Or browse our suite of agency practice articles.