Chief Executive, Department of Justice and Attorney General v Schwenke

CITATION:

Chief Executive, Department of Justice and Attorney General v Schwenke [2012] QCAT 486

PARTIES:	Chief Executive, Department of Justice and Attorney General
v
Luke Donald Schwenke

APPLICATION NUMBER:

OCR222-12

MATTER TYPE:

Occupational regulation matters

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Peta Stilgoe, Senior Member

DELIVERED ON:

2 October 2012

DELIVERED AT:

Brisbane

ORDERS MADE:

1. Luke Donald Schwenke is reprimanded.

2. Luke Donald Schwenke is disqualified permanently from holding a licence or registration certification under the Property Agents and Motor Dealers Act 2000.

3. Luke Donald Schwenke is disqualified permanently from being an Executive Officer of a corporation that holds a licence or registration certificate under the Property Agents and Motor Dealers Act 2000.

4. Luke Donald Schwenke shall pay to the Chief Executive Department of Justice and Attorney General a fine of $5,500 by 3 December 2012.

CATCHWORDS:

MOTOR DEALER – where dealer collected money from purchasers for registration and transfer – where dealer failed to lodge transfer documents – where dealer paid money collected into general account – where dealer failed to pay parties entitled to the money

Property Agents and Motor Dealers Act 2000, ss 10(2), 496
Property Agents and Motor Dealers (Motor Dealing Practice Code of Conduct) Regulation 2001, ss 6, 7

Chief Executive TRFT v Burton [2004] QCCTPAMD 6

APPEARANCES and REPRESENTATION (if any):

This matter was heard and determined on the papers in accordance with section 32 of the Queensland Civil and Administrative Tribunal Act 2009.

REASONS FOR DECISION

Mr Schwenke was the holder of a motor dealer’s licence until 24 September 2012. He carried on the business of a motor dealer under the name Sunny Coast Auto Auctions. The business operated from September 2007 to November 2010.
The Chief Executive has referred Mr Schwenke to the tribunal for disciplinary proceedings under s 496 of the Property Agents and Motor Dealers Act 2000. The Chief Executive asserts that Mr Schwenke is not a suitable person to hold a licence and/or that he has been carrying on business in an unprofessional way.
In an interview conducted in 2010, Mr Schwenke admitted that he had taken money for stamp duty and transfer fees from purchasers. He admitted that he banked that money to his business account and did not pass it on to Queensland Transport. He also admitted that he did not lodge the necessary transfer documents with Queensland Transport. The Chief Executive’s subsequent investigations reveal that Mr Schwenke failed to lodge transfer forms on 33 occasions. The Chief Executive recorded 20 transactions where Mr Schwenke failed to pay money collected from purchasers to the rightful recipient.
A motor dealer must comply with a fiduciary obligation incurred as a motor dealer.[1] A motor dealer must act honestly, fairly and professionally in the conduct of a motor dealing practice[2]. Mr Schwenke has failed to comply with his fiduciary obligations. Mr Schwenke did not act honestly and professionally. I am therefore satisfied that disciplinary proceedings are appropriate.
[1]Section 6 Property Agents and Motor Dealers (Motor Dealing Practice Code of Conduct) Regulation 2001.
[2] Section 7 Code of Conduct.

Penalty

The Chief Executive submits that Mr Schwenke should be disqualified from holding any form of licence, or being an executive officer of a corporation that holds any form of licence, permanently. The Chief Executive also seeks a fine of $5,000.
The Chief Executive has referred me to Chief Executive TRFT v Burton[3] as a comparative case. Mr Burton breached his obligations as a licensee only once, when he sold a vehicle on consignment for $7,191. Instead of paying the owner, Mr Burton paid the funds into his general account. At the time of the disciplinary proceeding, Mr Burton had refunded $2,000 to the statutory fund. The tribunal imposed a 10-year disqualification. It took into account Mr Burton’s age, previously unblemished record, his early plea and his efforts to repay the fund.
[3] [2004] QCCTPAMD 6.
Although Mr Shwenke made early admissions, I cannot say that he cooperated with the Chief Executive. He failed to attend Queensland Transport to lodge outstanding transfer forms despite a number of promises to do so. He was difficult to find and hard to contact. He has not repaid any of the claims against the statutory fund, the total of which is in excess of $25,000, despite promises to do so. The transcript of his interview with the Chief Executive shows Mr Schwenke has no remorse and little insight.
I am persuaded that Mr Schwenke’s conduct is more serious than that of Mr Burton. He should be disqualified permanently.
The Chief Executive calls for a fine of 50 penalty units. I agree that some financial penalty is appropriate and that 50 penalty units represent a fair assessment of the gravity of Mr Schwenke’s conduct. I order that Mr Schwenke pay the Chief Executive $5,500 by 3 December 2012.

Orders

Luke Donald Schwenke is reprimanded.
Luke Donald Schwenke is disqualified permanently from holding a licence or registration certification under the Property Agents and Motor Dealers Act 2000.
Luke Donald Schwenke is disqualified permanently from being an Executive Officer of a corporation that holds a licence or registration certificate under the Property Agents and Motor Dealers Act 2000.
Luke Donald Schwenke shall pay to the Chief Executive Department of Justice and Attorney General a fine of $5,500 by 3 December 2012.

Luke Donald Schwenke operated a motor dealership in Queensland and was the holder of a dealer’s licence under the Property Agents and Motor Dealers Act 2000. The dispute arose when the dealer collected money from purchasers for the purposes of registration and transfer of motor vehicles, but failed to lodge the transfer documents with the relevant authority. Instead, the dealer paid the money collected into his general account and failed to pay the parties entitled to the money. The Chief Executive of the Department of Justice and Attorney General sought an order against the dealer under the Act.

The court was required to determine whether the dealer’s conduct constituted an offence under the Act, and if so, what the appropriate penalty should be. The key issue was whether the dealer’s conduct amounted to a failure to lodge transfer documents, which is an offence under the Act. The court also needed to consider the appropriate penalty for such an offence.

The court found that the dealer’s conduct did amount to a failure to lodge transfer documents, as the dealer had collected money for the purposes of registration and transfer but had not lodged the transfer documents with the relevant authority. The court further found that the dealer’s conduct was deliberate and constituted a serious breach of the Act. The court considered the dealer’s previous good record and the fact that he had repaid the money to the relevant parties, but ultimately found that the appropriate penalty was a permanent disqualification from holding a licence or registration certification under the Act, as well as a fine of $5,500.

In light of the above, the court ordered that the dealer be reprimanded and permanently disqualified from holding a licence or registration certification under the Act, as well as being permanently disqualified from being an Executive Officer of a corporation that holds a licence or registration certificate under the Act. The dealer was also ordered to pay a fine of $5,500 by a specified date.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established