Richard Michael Hayden, 56, was in charge of Skyline Developments Pty Ltd, which traded as Hayden Real Estate in Ballarat before its closure in 2019.

The County Court heard this month over two separate periods in 2018 and 2019, Hayden – who now lives in Torquay – maintained an insufficient balance of funds in his agency’s trust accounts, authorising or permitting deficiencies totalling $1.44m.

Over the course of a little more than a year and by way of 98 bank transfers, Hayden converted for his own use nearly $777,000 held by his company — some of which contributed to the trust account deficiencies.

He moved about $150,000 back into a trust account, but spent more than double that on lifestyle expenses, including on international flights, luxury hotels, medical costs, a luxury car dealership, entertainment, and clothing.

The expenditure, the court heard, was to alleviate his wife’s stress in the final year of her life – although there was some argument as to what constituted a reasonable expense even given that context.

Hayden Real Estate Ballarat was established by Richard Hayden’s grandfather in the 1920s.

More recently, it employed more than 20 people and was located on Sturt St in Ballarat from 1992.

Before the agency’s closure, staff fielded complaints from people who had not received deposits or settlement proceeds after selling their homes through Hayden Real Estate Ballarat.

The Victorian Property Fund received 76 claims for losses suffered by victims.

Hayden Real Estate Ballarat or Hayden himself paid back 35 claimants a total of about $404,000 and reimbursed two others for more than $42,000.

Others were compensated by the VPF or from funds frozen in Hayden Real Estate Ballarat’s account.

Seven were completely withdrawn.

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The period of offending was one of “immense turmoil” for Hayden and his family, the court was told, during which Hayden was “afflicted by profound, persistent distress, depression, anxiety, overwhelmed by financial demands upon his family and upon the business, which at that time had suffered somewhat of a downturn in that the wages were more than what was coming in by way of income”.

“He will not ever again work as … an estate agent. And the business that bore the family name for 100 years has gone.”

Hayden was said to have suffered “spectacular lapse of judgment” and committed a “gross breach of trust” for which he felt remorse and shame.

He pleaded guilty to two charges of deficiency in a trust account and one charge of wrongful conversion.

During sentencing on Friday, Judge Marcus Dempsey said Hayden’s actions were a “significant breach of trust” ameliorated by his “otherwise unblemished character” and the fact that at the time he was dealing with the resurgence of his wife’s cancer, the death of his brother in a car crash, the illness of staff members, declining business profitability, and a tax investigation.

Judge Dempsey said Hayden Real Estate Ballarat’s affected customers would have suffered “tremendous aguish and cruel uncertainty” by the misappropriation of funds, but that it was “inconceivable” Hayden would have offended but for an “unhappy convergence of deeply distressful events”.

Hayden was described as an “industrious, kind, generous man who raised a loving family”.

He was sentenced to prison for 12 months followed by a two-year community correction order.