High profile Gold Coast real estate agent, Heather Filippini, has had her agent’s licence cancelled.
She has also been disqualified from holding a licence or salesperson’s registration under Quensland’s Property Agents and Motor Dealers Act for four years.
Finally she has been fined $3750 on one successful “insider trading” charge laid against her by the Office of Fair Trading for a breach of the above Act, and a fined a further $7500 on a second charge.
Mrs Filipinni, who did very nicely selling mansions in the up-market Sovereign Islands, faced five disciplinary charges before the Commercial and Consumer Tribunal earlier this year. She maintained her innocence throughout, but was later found guilty of two charges. These charges had alleged that Filippini illegally gained a “beneficial interest” in certain purchases because either she or her daughter Sarah and son-in-law Alexei Fedotov – bought the properties marketed through Filippini’s Island Realty.
Will these paltry penalties deter other agents from so fundamentally, but profitably, failing their seller clients? Not likely. The law must be changed to provide not only for mandatory life disqualifications but also for prison sentences for offenders. Why should agents be treated less severely than stockbrokers, bankers, company directors or solicitors who steal this way?
The Gold Coast Bulletin reported at the time that the first charge related to a property at 33 King Arthur Court owned by Brisbane couple Joseph and Katherin Fenech. The tribunal heard the Fenechs visited Island Realty in 2002 to discuss the possible sale of their home, which Mrs Filippini estimated was worth $1.4 million. The Fenechs agreed to an open listing, and soon learned that Mrs Filippini had found a buyer. A fortnight before settlement, Mrs Filippini told them the sale could not go ahead because the purchaser could not get finance. But another buyer had arrived – later revealed to be Alexei and Sarah Fedotov – offering $1.185 million. The sale went ahead at that price but, needless to say, the buyers put the property back on the market soon after and resold it for $1.45m. The Tribunal found that Mrs Filippini obtained a beneficial interest in Fenechs’ property because its purchase was made for her daughter, Sarah Filippini, who is her `associate’ in terms of the Act.’
The second charge related to a property in King Charles Drive, owned by elderly widow Denise Love. On September 9, 2003, `A Fedotov or nominee’ contracted to buy the home from Mrs Love for $1.3 million. Although Mrs Filippini sold the home to Mr Fedotov, she told the tribunal she soon realised the sale might fall through if he was not able to get approval for the purchase from the Foreign Investment Review Board. Mrs Filippini said she explained to Mrs Love that the contract might have to be transferred into her name so the sale to go ahead but, she told the tribunal, she `definitely never intended’ to purchase the property.
Mrs Love gave evidence that she did not know the property would be transferred to Mrs Filippini as she had used her married name, Heather Isobel Penney, on the transfer form. The Tribunal ruled that Mrs Filippini was considered the `nominee’ on the contract, and therefore was guilty of obtaining a beneficial interest.
No one really expected the penalties here to be particularly heavy. In June this year the same Tribunal which ruled against Filippini, found a licensed agent, Doreen Finlay, and her registered salesperson husband, Brian Finlay, guilty of similar insider trading offences.
In that case sellers of a property listed for sale with the Finlays’ Gold Coast real estate agency were not told that Brian Finlay and Doreen Finlay were shareholders in a company which contracted to buy the property. Nor was it disclosed that Mrs Finlay was a director of their family trust company.
Although the sale fortunately did not proceed (because finance failed) the Tribunal recognised as “serious matters” these were breaches of laws “designed to deter licensed and registered persons from acting in their own interests to the detriment of persons who entrusted property with them.” But wait for it – the Finlays each copped a piddling fine of $1125, and were ordered to pay Fair Trading’s mega-costs of $3000!
Of course, according to Gold Coast Bulletin and Courier Mail reports earlier last week, Mrs filippini saw her situation in a different light. Her barrister last week told the Tribunal she had been the victim of “a smear campaign” aimed at tarnishing her name, his client had been hurt by this “trial by media”, and had even been the victim of an “outlandish” news story on Today Tonight. Moreover she had been subjected to “unjustified” attacks by the Office of Fair Trading. “It would seem we are in the midst of the Salem witchcraft trials rather than a court or tribunal,” he said. His client had been “vilified and discredited’” in the media before the tribunal had handed down its sentence.
While her barrister claimed Mrs Filippini was guilty only of “technical breaches” and that a licence disqualification estate was unwarranted (because his client had an unblemished record, had shown remorse, and had pledged to improve her office systems), Fair Trading’s legal officer Larissa said the case was “the most serious case to have come before the Department of Fair Trading in relation to a real estate agent obtaining a beneficial interest in a property for sale”. Nevertheless Mrs Filippini has apparently lodged an appeal, so her real estate activities will continue until that is determined.
By Tim O’Dwyer, solicitor and real estate watchdog watchdog@argonautlegal.com.au.*
