Perth settlements agent fined $8,000 for misuse of trust account funds

Ballajura settlements agent, Natalie Jane Briggs, has been fined $8,000 by the Midland Magistrates Court over the misuse of trust account funds.

This follows her pleading guilty to 13 charges related to failures to comply with the Settlement Agents Act and the agency’s inability to finalise the financial settlement of four property transactions due to the agent’s misuse of her clients’ trust money.

Briggs, who trading as Frontline Settlements, surrendered her licence and triennial certificate in September 2010.

An August 2011 audit found the agency’s trust account only had a balance of $80.69 and was therefore unable to settle a total of $89,357.78 in financial commitments.

Lawyers for Western Australia’s Consumer Protection told the court that an investigation was launched after Briggs surrendered her licence, but then refused to cooperate with a mandatory termination audit of the agency’s trust account.

The investigation into Frontline Settlements found that:

• Vendors in the settlement of a Jurien Bay property in 2011 were owed $49,085.86 by the agency and were later compensated by the Fidelity Guarantee Account.
• A mortgage broker loaned Ms Briggs $36,790 which was subsequently misappropriated by the agent. The broker was not eligible to be compensated by the Fidelity Guarantee Account as the transaction was not in the course of a real estate settlement.
• A cheque for $981.92 from the agent’s trust account to pay for a client’s council rates was dishonoured due to inadequate funds. Ms Briggs then paid the rates from a personal account. The transaction related to the settlement of a Nollamara property.
• Another settlement agent claimed Ms Briggs failed to finalise the settlement of a Shelley property and then made a payment of $2,500 which did not come from the trust account, as required by law.

Magistrate Benn said the series of offences represented a serious decline in the performance of the settlement agent, despite being well aware of her obligations and responsibilities.

The magistrate said the offences demonstrated a conscious and deliberate disregard for the responsibility of looking after trust monies and cast the profession in a poor light, resulting in community distrust. He said the community has a legitimate expectation to have matters such as this dealt with by way of a serious penalty.

Commissioner for Consumer Protection Anne Driscoll said settlement agents were entrusted with the proper handling of funds related to property transactions.

“To betray this trust and misuse these funds is a very serious offence, so it’s imperative that agents comply completely with the strict rules that apply to these transactions which often involve large amounts of other people’s money,” Driscoll said.