Dominique Grubisa's ASIC win a shallow victory

Property maven Dominique Grubisa seems to have some success in the AAT. But was it really a success? IA investigates.

ON 10 OCTOBER, Deputy President Bernard McCabe of the Administrative Appeals Tribunal (AAT) handed down his decision in relation to the application by Dominique Grubisa to review a banning order made by the Australian Securities and Investments Commission (ASIC) in March last year. The order prohibited Grubisa from engaging in credit activities and financial services for a period of four years.  

In his decision, McCabe found that grounds existed for a banning order, but exercised his discretion not to impose one.

At the start of his published reasons, McCabe noted:

‘Dominique Grubisa has earned a rare if dubious distinction: she has been the subject of banning orders that prevent her from providing financial services or engaging in credit activities despite the fact she was not (and does not plan to be) in the business of doing either of those things.’

He went on to say:

‘While ASIC acknowledges that Ms Grubisa and her associated entities (a) were not involved in the provision of financial services and (b) did not engage in credit activities, ASIC’s delegates found Ms Grubisa had effectively claimed she [had].’

Time to put on the scuba gear and do a deep dive into the decision.

One of Grubisa’s companies is DGI Debt Management Pty Ltd, now in liquidation.

Ms Grubisa was the sole director of the company. 

As reported previously, since 1 July 2021, subject to transitional arrangements, providers of debt management services (such as those provided by DGI Debt Management) have been required to hold an Australian Credit Licence with an authorisation that covers debt management services. 

As the ASIC website notes, the changes mean that these debt management services were (from 1 July 2021):

‘...a “credit activity” for the purposes of the National Consumer Credit Protection Act 2009 (National Credit Act).’

However, if before 1 July 2021, someone had applied for a credit licence or variation to a credit licence that authorised such services then, during a transition period that ended when the application was withdrawn or dealt with by ASIC, the person was deemed not to be providing “debt management services”.

IA is unaware whether DGI Debt Management applied for a credit licence that authorised debt management services. But if it did by 30 June 2021, then it was not providing debt management services (as defined) until ASIC approved the application.  

In May 2021, A Current Affair aired a story in which it alleged that Grubisa’s business had falsified statements of assets and liabilities of clients to create fictional loans. Those documents, which the clients say were altered without their knowledge or consent, were then put to the Australian Financial Complaints Authority (AFCA) and/or banks by Grubisa’s business. This was done via services provided by DGI Debt Management.

As noted in the segment, former students of Ms Grubisa’s had provided statements to ASIC prior to the airing of the program.

For reasons that are inexplicable, the evidence of documents falsified by Grubisa’s business seemed to have played no part in the ASIC case.  

In his decision, Deputy President McCabe noted that:

‘ASIC points out that Ms Grubisa was an officer or shareholder in DGI Finance, so it is unclear why she would be purporting to speak on its behalf.’

DGI Finance is now called Capital Mortgage Group and its director is Grubisa’s husband, Kevin. As we reported on 4 August, that company has recently had its own application to provide debt management services rejected by ASIC and has applied for a review of that decision to the AAT. ASIC has not commented on its reason for the rejection of that application.

The Deputy President’s comments about Grubisa speaking on behalf of a company of which she is neither a director nor a shareholder are also of note in relation to Grubisa’s continued claims regarding asset protection. As we reported on 15 September, Grubisa has been purportedly making claims on behalf of Assure Lawyers (formerly known as DGI Lawyers) in relation to asset protection despite not being a director or shareholder in the company and despite no longer being entitled to practice law.

If Assure Lawyers is providing the legal service, why is it Grubisa and not James (Jim) Lyons, the sole director and principal of Assure Lawyers, who is doing the presentations and repeating the claims that the ACCC says are false? 

IA can reveal that despite the banning order made in March last year, Grubisa was still promoting services relating to debt management in a video titled Property Elite Mentoring Presentation Jun 2022 (some three months after the banning order) that is still on the internet.

Whilst Deputy President McCabe did not impose a banning order, he did make what he described as “serious adverse findings” against Grubisa. 

In conclusion, he stated:

‘In reaching the conclusion [not to impose a banning order] I do not mean to excuse the applicant’s problematic behaviour that has been uncovered through ASIC’s diligent investigations. But the issues she presents are for a different decision maker.’

His adverse findings included that:

• Grubisa’s claims that she held an Australian Financial Services Licence and Australian Credit Licence were false and amount to a “holding out” in breach of provisions of the Corporations Act;
• Grubisa did not impress him as somebody who was across her legal obligations, notwithstanding her credentials;
• Grubisa did not appear to have a commitment to orderly processes and procedures;
• there likely was a contravention of Section 121(2) of the Family Law Act in relation to her distribution of lists of parties to proceedings in the Family Court;
• the short sale strategy promoted by Grubisa appears to rely on misleading and deceptive conduct and the lack of any ready explanation of how what was described in some of the case studies was lawful, rings “so many alarm bells”;
• Grubisa’s willingness to promote sharp practice without stopping to ensure it was lawful gives reason to doubt she is a fit and proper person to engage in financial services and credit activities; and
• Grubisa’s failure to grasp the details of her obligations in relation to the credit licence of Master Wealth Control Pty Ltd gave him further reason to believe she is not a fit and proper person to undertake credit activities.

IA reported about Grubisa’s short sale strategies and use of the Family Court list in our first story about Grubisa in August 2020.

The Deputy President suggested that if Grubisa were to apply for an Australian Financial Services Licence or Australian Credit Licence, or were she to become involved in an organisation that provided financial services or carried on credit activities, she would:

‘...face an uphill battle obtaining the relevant approvals if the finding of facts I made were to be considered (and any organisation involved in those industries would think twice before engaging her).’

We do have to question why ASIC didn’t pursue the matters that were featured on the A Current Affair program which related squarely to credit-related activities. Grubisa might not have been providing credit services, because of the technicality of the transitional provisions relating to debt management services, but those issues are no doubt more directly related to the provision of credit services.

Perhaps the lesson for ASIC in all of this comes from the words of the Deputy President where he said:

‘A more convincing rationale is required that explains how the ban would further the objectives of the regulatory regime.’

We can only speculate, but perhaps that rationale would have been found in the issues aired on A Current Affair and in the material provided to ASIC ahead of that segment. Issues that related directly to credit activities.

ASIC’s investigation and enforcement performance is already a matter of scrutiny in the form of an Inquiry by the Senate Economics References Committee which is due to report to the Senate next June. 

In his judgment, McCabe referred to Grubisa’s Real Estate Rescue manual, which he described politely as making for ‘interesting reading’.

In paragraph 91 of his judgement, the Deputy President referred to the following passage from the manual [IA emphasis by underlining]:

Yes, there are people you will meet who are in dire situations. You will be tested emotionally and hear some heartbreaking stories. You did not cause it, nor can you necessarily fix it. And you don't need to take advantage of it to make a profit. When you are negotiating foreclosure transactions you should never feel guilty about what you are doing.

 

If you don't help the homeowner then someone else will. Worse still, if no-one intervenes the bank will cause untold damage and heartache for them for many months and years to come. You are their knight-in-shining-armour.

 

Nothing I ever suggest or teach in any way should be construed or used for illegal or unethical practices. Do it the right way and you will build a great reputation and make some good friends along the way.

Of that passage, only the part underlined wasn’t plagiarised from Chip Cummings’ book, Cashing in on Pre-foreclosures and Short Sales, published by John Wiley & Sons, Inc in 2009. 

Page after page of Cummings’ book was plagiarised by Grubisa, the self-described consummate professional — something else that seems to have slipped the attention of ASIC, despite IA’s story about the blatant plagiarism in September last year.

In a press statement on 19 October, ASIC advised it was ‘carefully reviewing the AAT’s decision’.

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