INSIDE THE JAMES TOSTEVIN SCANDAL

An open and shut case for the ACCC.

Article originally published JANUARY 5, 2004 –Reviewed and approved.

By Neil Jenman

Late last month, Melbourne real estate agent James Tostevin was pictured in newspapers, drink in hand, toasting his latest success.

At the end of a half-year in which Tostevin was censured by the Real Estate Institute of Victoria (REIV) for claiming qualifications he did not have, convicted and fined over his behaviour at a traffic accident and exposed in a court case as an habitual user of dummy bidders at auctions, one wonders what he was celebrating.

Clearly Tostevin believes there’s no such thing as bad publicity. He had just been through a court case in which he admitted he regularly conspired with his father to deceive bidders at his auctions.

But Tostevin was toasting the decision of the prosecutor in the dummy bidding case to drop the charges. Contrary to the REIV’s media release on the day, and some media reports, Tostevin was not found guilty. Consumer Affairs Victoria withdrew its case when the magistrate refused to allow a key witness to testify.

Tostevin said afterwards that he felt “vindicated” and posed for the media with a celebratory beer raised. Collins Simms managing director Bruce Bell, Tostevin’s employer, said he had been unwavering in his support of his man and that he had been “vindicated”. And the CEO of the REIV, Enzo Raimondo, declared in a media release: “Mr Tostevin has been legally vindicated by the judgment today.”

Raimondo’s press release was riddled with inaccuracy. Its headline (“Tostevin not guilty”) and opening statement (“The Heidelberg Magistrates Court today found Mr James Tostevin not guilty …”) were both untrue. There is a significant difference between the withdrawal of charges and a not guilty verdict. Raimondo’s statement that Tostevin had been “legally vindicated by the judgment” was also inaccurate. There was no judgment.

Far from being “vindicated”, Tostevin has been forever stained by his own admissions in the court and other events during 2003.

A year in the life of agent James Tostevin goes like this:

• In May Tostevin’s REIV membership was suspended after he had been charged with 14 offences under the Fair-Trading Act and Estate Agents (Professional Conduct) Regulations. The charges related to an auction by Tostevin at Kew, a Melbourne suburb, in October 2001.

• In June Tostevin was censured by the REIV after he sent letters to clients claiming qualifications he did not have. Tostevin sent letters to clients falsely representing his qualifications twice, once in a promotional campaign and again in letters to clients which set out his defence to the dummy bidding charges. It was all blamed on a secretary who had made a typing error.

• In October Tostevin pleaded guilty in the Melbourne Magistrates Court to charges which resulted from a car accident, followed by a scuffle with the other motorist. The court heard that Tostevin drove his luxury vehicle out of his lane to avoid a parked car and collided with an oncoming BMW. There was a short “conversation” and then a tussle erupted, with the other motorist ending up on the bonnet of Tostevin’s car. Tostevin then drove off, without leaving his details. Tostevin pleaded guilty to failing to leave a name and address after an accident. He was convicted and fined $400. He had earlier paid $1,400 for damage to the other car.

• In December Tostevin appeared in the Heidelberg Magistrates Court to defend 14 charges resulted from the Kew auction in October 2001: 10 charges of false representation in relation to service providing under the Fair Trading Act and four counts of breaching the Estate Agents (Professional Conduct) regulations.

Tostevin admitted that his father Andrew was a dummy bidder at the October 2001 auction. He admitted that his father regularly posed as a bidder in the crowd at auctions run by James Tostevin. They had regular meetings to discuss dummy bidding tactics. James Tostevin paid his father to attend multiple auctions on the one day. They worked to “a very meticulous system”. They had secret hand signals. Deceiving genuine buyers at Tostevin auctions was their modus operandi.

The only issue in contention at the trial was whether Andrew Tostevin bid beyond the $820,000 reserve price at the auction. This, apparently, was the key issue under Victorian laws that existed at the time. Tostevin’s defence was that there was a clause in the sale contract, and in the preamble to the auction, which alerted buyers that “vendor bids” could be lodged. This, apparently, legitimised dummy bids up to the reserve price.

But Prosecutor Stephen Devlin alleged Andrew Tostevin bid up to $876,000, well beyond the reserve price for the Kew home. It was claimed in court by James Tostevin’s former personal assistant, Prue Jones – who was recording the bids for her employer – that Andrew Tostevin continued to dummy bid up to $876,000, pushing the eventual buyer to $877,000.

Contrary to the testimony of Prue Jones, the Tostevins produced a witness who claimed Andrew Tostevin was not the man who kept bidding up to $876,000.

How did Bell and his colleagues at Collins Simms react to Tostevin’s tumultuous year? Censure him? Sack him? Admit publicly that he was an embarrassment?

No, they gave him their Salesperson of the Year award. Bell said Tostevin got the award because he was “deserving”.

Hey, the guy makes lots of sales and brings money into the company. Let’s not get too fussy about how he does it.

What makes this more curious is that Collins Simms took out advertisements in October 2003 claiming it was “two years ahead of the law” in its efforts to eliminate dummy bidding. The firm claimed it had banned dummy bidding in February 2002, two years ahead of the launch date for Victoria’s new laws which begin in February 2004. Collins Simms clearly made the move as damage control for the embarrassment caused by media exposure of Tostevin’s dummy bidding indiscretions in 2001.

One wonders where the Australian Competition and Consumer Commission (ACCC) is in all this.

ACCC chairman Graeme Samuel made it clear that, regardless of state laws, dummy bidding is illegal under the Trade Practices Act. It is deceptive and misleading. Fines up to $1.2 million are possible.

James Tostevin has admitted in court that he regularly took dummy bids to help his auctions along.

Sounds like an open and shut case for the ACCC.

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