Edinburgh Realty Limited v Scandrett [2016] NZHC 2898 (1 December 2016)

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IN THE MATTER OF	an appeal under s 116 of the Real Estate Agents Act 2008
BETWEEN	EDINBURGH REALTY LIMITED First Appellant BARCLAY SIEVWRIGHT, CLAYTON SIEVWRIGHT AND LANE SIEVWRIGHT Second Appellants
AND	GLENYS ANNE SCANDRETT First Respondent REAL ESTATE AGENTS AUTHORITY Second Respondent

Hearing:	20 September 2016
Appearances:	C Withnall QC for First and Second Appellants B Gray for First Respondent M Hodge for Second Respondent
_Judgment:	_{1 December 2016}

[1] Following a complaint made by Ms Glenys Scandrett to the Real Estate Agents Authority (the Authority), a Complaints Assessment Committee (the Committee) found a real estate agency, Edinburgh Realty Limited (Edinburgh Realty), and three licensees, Barclay, Clayton and Lane Sievwright (the

¹Re Complaint No CB7002092 Real Estate Agents Authority Complaints Assessment Committee,

EDINBURGH REALTY LIMITED & ANOR v SCANDRETT & ANOR [2016] NZHC 2898 [1 December 2016]

[2] Edinburgh Realty and the Sievwrights appealed this finding to the Real Estate Agents Disciplinary Tribunal (the Tribunal). Ms Scandrett cross-appealed the Committee’s decision dismissing her allegation of deliberate non-disclosure by the Sievwrights of defects in the property sold to her by the appellants. The Tribunal quashed the Committee’s findings and referred the case back to it with a direction it

[3] In late November 2009, Ms Scandrett purchased a property in Maori Hill, Dunedin, (the property) from the trustees of the Sievwright Family Trust (the Trust). The trustees are the appellants, Barclay and Lane Sievwright, and Barclay’s wife, Ngaire Sievwright. Barclay, Lane and Clayton Sievwright are all licensed real estate sales persons employed by Edinburgh Realty. Each of them are contingent beneficiaries of the Trust.

[4] The Trust purchased the property in August 2006 as an addition to its residential rental portfolio. The property was tenanted. In June 2009 the trustees decided to sell the property when the existing tenancy expired. The property was listed for sale in October 2009. An information pack was produced by Edinburgh Realty which included brochures listing Lane and Clayton as Edinburgh Realty’s agents for the property, together with their contact details. A copy of the title and rating information was also included, both of which named the trustees as the owners of the property.

[5] On 21 November, Ms Scandrett inspected the property in the company of another Edinburgh Realty salesperson, Mr Matthew Shepherd. She was provided with a copy of the information pack. At the time of Ms Scandrett’s visit she noted the house had a musty smell. Mr Shepherd subsequently relayed Ms Scandrett’s observation to Barclay, who suggested that any offer be made subject to Ms Scandrett obtaining a satisfactory building report. Ms Scandrett agreed to

²_{Edinburgh Realty Ltd v Real Estate Agents Authority
[2016] NZREADT 5 [Tribunal decision].}

[6] A subsequent building inspection raised an issue regarding the roof. Ms Scandrett obtained an extension of the conditional contract to enable a second inspection to take place before she ultimately confirmed the contract on the agreed basis the vendors would repair the roof flashing and reduce the price by $5,000. Settlement was completed in December.

[7] After taking possession of the house, Ms Scandrett continued to have concerns about the musty smell. She employed a firm to investigate the matter further. After a number of holes were cut in the floor it was discovered there were areas of decay in the floors and that the subfloor area was damp due to a lack of ventilation. Access to the subfloor area revealed decayed timber floor framing and moist ground with decay and damage to perimeter wall linings. Extensive remedial work was recommended.

$237,000. She subsequently made a complaint to the Authority about the actions of those involved in the sale of the property to her, including Edinburgh Realty and the Sievwrights. In a letter to the Authority of 30 June 2012, Ms Scandrett detailed three themes. Firstly, that misrepresentations had been made regarding the state of the property, and that there had been a deliberate failure to disclose latent defects which had been the subject of cosmetic repairs. Secondly, that there had been a failure to disclose the licensees’ family interest as vendors of the property. Thirdly, that Edinburgh Realty had failed to appropriately respond to her complaints.

[9] In October 2012 the Authority advised Ms Scandrett that her complaint had been referred to the Committee which had resolved to investigate the matter. In the course of its investigation the Committee found that no agency agreement had been entered into, nor an appraisal obtained in respect of the property. When this was raised with the Sievwrights they submitted they were not required to take such steps because they had been acting for themselves. They contended that neither the Real Estate Agents Act 2008 (the Act) nor the Real Estate Agents (Conduct and Client Care) Rules 2009 (the Rules) applied. A related aspect to that submission was that

Edinburgh Realty had an arrangement with its employees whereby they could sell one property per year using the agency without payment of any fee or commission. Essentially, they submitted it had been a private sale.

[10] In October the following year the Committee released its determination.⁴It found the Sievwrights’ and Edinburgh Realty’s involvement in the sale of the property constituted real estate agency work and that they were therefore subject to the Act and the Rules.⁵

[11] The Committee found Edinburgh Realty and the Sievwrights had failed to disclose that the Trust and its beneficiaries would benefit from the transaction in breach of the Act. Further, they had breached the Rules; Edinburgh Realty by failing to have an appraisal undertaken and by not entering into an agency agreement; the

Sievwrights by not entering into an agency agreement.⁶These breaches resulted in a

finding that the Sievwrights and Edinburgh Realty had engaged in unsatisfactory conduct.

[12] The Committee held that Ms Scandrett had failed to establish the Sievwrights knew the property was subject to underlying defects, or that they had concealed those defects. Accordingly, the Committee dismissed this aspect of the complaint. The Committee also dismissed the complaint that Edinburgh Realty had failed to deal with Ms Scandrett’s concerns adequately.

[13] The Sievwrights were each censured and ordered to pay a fine of $3,750. Edinburgh Realty was censured and fined $6,000.

[14] In November 2013 Edinburgh Realty and the Sievwrights appealed the Committee’s findings of unsatisfactory conduct. Ms Scandrett cross-appealed various parts of the Committee’s decision in respect of which it decided to take no

_{further action. In her notice of appeal Ms Scandrett named a director
of Edinburgh}

Realty, Mr Peter Wilson, and Barclay as the other parties to the determination she was appealing. She alleged the Committee had erred in finding there was insufficient evidence that Barclay knew about the defects in the property and that Mr Wilson, as Edinburgh Realty’s representative, had not followed a complaints procedure. Ms Scandrett did not name either Lane or Clayton as a party in her notice of appeal.

[15] The Tribunal conducted a two day hearing during which it heard extensive evidence from a number of witnesses, including from the Sievwrights, and submissions from counsel. In January 2016 it released its decision.⁷

[16] The Tribunal found the Sievwrights and Edinburgh Realty had marketed the property on behalf of the Trust in a way which constituted real estate agency work. As a result, they were under an obligation to disclose to a prospective purchaser whether they or a person related to them may benefit from the transaction. In failing to do so the Tribunal found the Sievwrights and Edinburgh Realty to have breached s 136 of the Act. The Tribunal also agreed with the Committee’s findings they had breached the Rules in failing to have obtained a written appraisal and to have omitted to enter into a listing agreement.

[17] Notwithstanding those conclusions, the Tribunal considered the appropriate course was to quash the Committee’s determinations and remit the case back to it. The Tribunal’s reason for adopting this course was because it determined the evidence disclosed a prima facie case of disgraceful or wilful misconduct. The Tribunal considered the Committee had failed to put before it the appropriate charges. It held as follows:

[130] Under s 89 of the Act, a Committee may make one or more of the determinations set out in s 89(2) of the Act. In this case, the Committee determined that there had been unsatisfactory conduct in relation to some of the complaints and that there be no further action taken with regard to other complaints. The Committee could have determined that the complaints be considered by us. Had it done that then, in terms of s 91 it needed to lay an appropriate charge before us in writing and give written notice of that

determination and a copy of the charge to the relevant licensees. It is not appropriate for the current determinations of the Committee to remain standing if we find that the most just course is that the complaint be referred to us by way of an appropriate charge. We do so find the evidence adduced to us which was far more extensive than that before the Committee.

[131] Accordingly, we quash the findings of the Committee and refer the complaints back to it with our direction that the Committee now, forthwith, formulate an appropriate charge or charges and lay it or them before us in terms of the procedures of the Act and its Regulations.

[132] We are conscious that one of our functions, in terms of s 102 of the Act, is to hear and determine any charge against a licensee brought by the Committee but the Act does not empower us to lay charges even though it might seem more cost-efficient that, having heard the complaints de novo, we make final determinations, perhaps, amounting to misconduct. There is no dispute that in terms of s 111(4) we may, after considering the appeal, confirm, reverse, or modify the determination of the Committee.

[133] Simply put, when we stand back and take an objective look at the evidence overall with sensible inferences, we do not find it credible that the Sievwright licensees were unaware of the state of the property at material times. We think that there is a prima facie case that their conduct would reasonably be regarded by agents of good standing, or reasonable members of the public, as disgraceful; or constitute seriously incompetent or seriously negligent real estate work; or consists of a wilful or reckless contravention of the Act and/or of its Regulations or Rules.

[134] Accordingly, we refer this case back to the Committee to a [sic] lay a charge or charges on the basis we have indicated above. We contemplate that when our Tribunal hears any such charges, none of the three of us will hear them.

[18] Edinburgh Realty and the Sievwrights have appealed the Tribunal’s decision, alleging:

(a) the Tribunal had no jurisdiction to make findings against Lane, Clayton or Edinburgh Realty regarding the issue of the condition of the property sold to Ms Scandrett;

(b) the Tribunal erred by failing to consider the individual position of each of the Sievwrights and illegitimately made collective findings against them;

(f) if the Tribunal did have jurisdiction, it exercised it improperly and contrary to law.

Did the Tribunal have jurisdiction in respect of Edinburgh Realty and Lane and

(1) A person affected by a determination of a Committee may appeal to the Tribunal against a determination of the Committee within 20 working days after the date of the notice given under section 81 or

(b) any other information that the appellant wishes the Tribunal to consider in relation to the appeal.

(4) After considering the appeal, the Tribunal may confirm, reverse, or modify the determination of the Committee.

(5) If the Tribunal reverses or modifies a determination of the Committee, it may exercise any of the powers that the Committee could have exercised.

[20] It was submitted on behalf of Edinburgh Realty and Lane and Clayton that Ms Scandrett had not appealed the Committee’s determination to take no action against them in relation to their alleged knowledge of the condition of the property.⁸

The Tribunal therefore had no jurisdiction to review the Committee’s determination in respect of that part of Ms Scandrett’s original complaint as it related to Lane, Clayton and Edinburgh Realty.

[21] Ms Scandrett submitted in reply that it was open to the Tribunal to direct charges be laid against Clayton and Lane notwithstanding neither of them having been named in her cross-appeal because they both appeared at the Tribunal’s hearing and gave evidence. Ms Scandrett submitted they were not unfairly prejudiced and the Tribunal was entitled to include them in its findings in the circumstances of this case.

[22] For its part, the Authority acknowledged the Tribunal did not have jurisdiction to make disciplinary findings in respect of wholly new matters, but submitted the issue of the licensees’ knowledge of the property’s defects was not a “wholly new matter”, but rather one that had been considered by the Committee.⁹

The Authority submitted Lane and Clayton were parties to their own appeal and had given evidence before the Tribunal about their knowledge of the defects.

[23] While the Authority initially submitted there was no unfair prejudice to Lane and Clayton in not having been included by Ms Scandrett in her appeal, it accepted the overriding consideration was one of natural justice. It argued the Tribunal had the ability to clarify who the parties were that were before them and place them on notice because of its power to regulate its own procedure as it saw fit. There is,

[24] A person affected by a determination of a Committee may by written notice appeal to the Tribunal against that determination.¹⁰The Tribunal is a statutory body and its functions include hearing any appeal under s 111 against a determination by the Committee (including a determination to take no action).¹¹Subject to the rules of natural justice and to the provisions of the Act itself, including any regulations made under the Act, the Tribunal may regulate its procedures as it thinks fit.¹²

[25] In the present case, the Committee dismissed Ms Scandrett’s complaint regarding the knowledge of the defects by the licensees involved in the sale of the property. It held:¹³

1.13 The second aspect of the complaint relates to the condition of the house. The complainant says that the Family trust, and Matthew Shepherd, knew the property was subject to underlying defects, and that there was a failure to disclose those defects to her. Associated with this is her complaint that the vendors tried to conceal these defects (by painting and carpeting). Both aspects of this part of the complaint are dismissed.

4.10 The complainant bears the onus of establishing a complaint, on the balance of probabilities...¹⁴The Committee considers that the complainant has failed to establish that any of the licensees knew about structural defects to the house. You cannot conceal what you don’t know about. This aspect of the complaint is dismissed.

[27] In the formal notice of appeal lodged by Ms Scandrett against the Committee’s determination to take no further action in relation to this aspect of her complaint she was required to state the “other party” to the determination against which she was appealing. Ms Scandrett listed as the “other party” Peter Wilson (a director of Edinburgh Realty) and Barclay Sievwright. Ms Scandrett describes their status as the “licensee”. Where the form provides for the “company name (if applicable)” she wrote Edinburgh Realty Ltd. Ms Scandrett’s notice of appeal made

[28] The notice of appeal also required the reasons for the appeal to be stated. Ms Scandrett attached an addendum setting out in some detail the grounds and particulars of her appeal. The relevant ground of appeal was articulated in the following terms:

2. The Committee erred in finding that there was insufficient evidence to find that Barclay Sievwright, an agent of Edinburgh Realty and a Trustee of the owners of the property, knew about the Rotten foundations, wall support system, floor support system and flooring.

Barclay is also referred to in the particulars provided in the addendum relating to this ground of the appeal but again no mention is made by Ms Scandrett of either Lane or Clayton.

21 November 2014, the Authority filed a memorandum with the Tribunal raising the need for Ms Scandrett to clarify who the parties to her appeal were:

5. If the complainant wishes to maintain her appeal, it would be helpful if clarification is provided as to who the parties are. It is noted that the complainant named Peter Wilson and Barclay Sievwright on her notice of appeal, however, it may be that her appeal is solely against the agency, Edinburgh Realty Ltd, itself.

5, 21 November 2014, we note our appeal has been filed, and it seems patently clear. However, we apologise if there is confusion and accordingly

clarification over their question relating to the parties to the appeal. Particularly how they have drawn a conclusion that the appeal is against Edinburgh Realty.

Ms Scandrett further advised in her memorandum that she had briefed a barrister to act for her and provided his contact details. However, it does not appear the issue was progressed or any clarification of the parties achieved before the Tribunal commenced hearing the matter on 12 November 2015, almost a year later and two years after the notice of appeal was filed.

[31] Although Ms Scandrett was unrepresented at the time she filed her notice of appeal, she obtained legal advice and representation some 12 months prior to the

Tribunal’s hearing. The issue of who Ms Scandrett considered to be the parties to her appeal had been identified to her as requiring clarification and she was on notice of this potential issue. It does not appear this jurisdictional difficulty was brought to the Tribunal’s attention, and it made no ruling as to its understanding of the ambit of Ms Scandrett’s appeal as it related to the Committee’s determination on this issue.

[32] The record reveals that the Committee’s determination to dismiss Ms Scandrett’s complaint regarding Clayton and Lane’s knowledge of the property’s defects was not appealed by Ms Scandrett. The knowledge of the licensees was assessed by the Committee and it determined the evidence fell short of establishing the complaint. Ms Scandrett chose to appeal that finding only as it related to Barclay (together with a director of Edinburgh Realty) and it was that determination by the Committee in respect of that licensee which the Tribunal had jurisdiction to consider on the appeal before it.

[33] In the body of the Tribunal’s decision it purports to set out the grounds of Ms Scandrett’s appeal, including that the Committee erred in finding there was insufficient evidence to find “the licensees” knew about the defects in the property. That summary, however, does not accurately record Ms Scandrett’s challenge to the Committee’s determination as articulated in both her notice of appeal and the detailed addendum. The Tribunal appears to have assumed that Clayton and Lane were parties to Ms Scandrett’s appeal. This may have been because each had appealed the Committee’s determination of unsatisfactory conduct based on breaches of the Act and the Rules, and gave evidence at the hearing.

[34] The Tribunal’s appellate function is to hear an appeal brought under s 11 against a determination by the Committee (including a determination to take no action).¹⁵The appeal must be brought by way of written notice to the Tribunal by a

_{person affected by a determination of a Committee. Its appellate
jurisdiction is}

[35] The determination of the Committee which Ms Scandrett appealed was its finding that there was insufficient evidence to establish that Barclay, as an agent of Edinburgh Reality and a trustee of the vendor of the property, knew about the property’s defects. The Committee’s determination regarding the insufficiency of the evidence regarding the knowledge of Clayton and Lane was not appealed. In the absence of that determination being appealed, the Tribunal did not have jurisdiction.

[36] Nor do I consider the Tribunal’s power to regulate its procedures extends to a power to widen its jurisdiction. The fact both Clayton and Lane gave evidence before the Tribunal about their knowledge of the defects does not result in any de facto jurisdiction being conferred on the Tribunal to join them as parties to Ms Scandrett’s appeal. Because of the explicit ambit of her appeal, neither Clayton nor Lane had notice of their potential jeopardy before the Tribunal. Nor does the fact that Clayton and Lane were parties to their own appeal, in respect of discrete determinations by the Committee regarding breaches of the legislation, widen the Tribunal’s jurisdiction in respect of Ms Scandrett’s appeal to include persons who were never a party to it.

[37] In Wyatt v Real Estate Agents Authority an issue emerged for the first time on the hearing of an appeal before the Tribunal about whether a licensee had a conflict of interest.¹⁷The issue had not been the subject of a determination by the Committee, nor had it been argued before it. On appeal, Woodhouse J held that in the absence of any determination by the Committee the Tribunal had no jurisdiction to decide the point.

[38] The present case is distinguishable because the issue of proof of Clayton and Lane’s knowledge of the property’s defects was before the Committee. However, in response to the suggestion that jurisdiction could be implied from the parties having

_{voluntarily engaged in the issue at the hearing before the Tribunal,
Woodhouse J}

observed that jurisdiction could not “effectively be granted by agreement”. Because of the carefully prescribed procedures for bringing a complaint involving the investigation and determination by a Complaints Assessment Committee and the associated limited statutory appellate jurisdiction of the Tribunal, confined as it is to being from a Committee’s determination, the jurisdiction of the Tribunal could not be widened.

[39] I agree with Woodhouse J’s observation that the appeal process is governed by a prescribed statutory procedure. In the absence of formal challenge to a Committee’s determination regarding the conduct of a particular licensee, the Tribunal cannot assume jurisdiction over persons who were never parties to the appeal. Clayton and Lane’s appeal must therefore be allowed on this point insofar as it relates to the Tribunal’s decision to quash the Committee determination regarding proof of their knowledge of the property’s defects and the accompanying direction that it lay charges of misconduct.

[40] Insofar as this ground of appeal relates to the position of Edinburgh Realty, I do not understand that it was ever contended by Ms Scandrett that her complaint about the Sievwrights’ knowledge of the property’s defects extended to the agency. The Committee noted that Ms Scandrett’s complaint related to the “Family Trust” and “Mr Shepherd”. In dismissing that aspect of the complaint, the Committee referred to a lack of proof to establish that any of the “licensees” knew about structural defects to the house. Similarly, the Tribunal confined its conclusions regarding knowledge of the state of the property to the “Sievwright licensees”. Neither in Ms Scandrett’s complaint nor the decision of the Committee or the Tribunal does it appear to have been contemplated that the agency, Edinburgh Realty, was facing an allegation or complaint based on its knowledge of the property’s defects. I do not therefore consider such an issue was before the Tribunal or that it sought to claim jurisdiction on hearing Ms Scandrett’s appeal over Edinburgh Realty in respect of the issue of knowledge of the property’s defects.

Did the Tribunal fail to consider the individual position of the Sievwrights?

[41] The Sievwrights submitted the Tribunal failed to consider the evidence of knowledge as it related to each of them separately. As individual licensees it was submitted it was incumbent on the Tribunal to assess the individual circumstances as it related to each of them before reaching any conclusion as to whether there was a prima facie case of misconduct based upon their knowledge and concealment of the property’s defects. The Sievwrights submitted the Tribunal erred in making a “global” finding that it did not find it credible that they, “the Sievwright licensees”, were unaware of the state of the property at material times, and that “their” conduct, prima facie, would reasonably be regarded as constituting misconduct.

[42] Ms Scandrett accepted that each of the three Sievwrights had different levels of involvement in the events and had varying and different opportunities to acquire knowledge of the state of the property, but submitted the evidence disclosed each had sufficient opportunities nonetheless. Such knowledge would be sufficient, in Ms Scandrett’s submission, to justify the Tribunal’s finding of a prima facie case of misconduct under the Act in respect of each of them.

[43] The Authority made the general observation that before the Tribunal could direct charges to be laid against the licensees it was required to consider the conduct of each licensee separately and then to determine in respect of each licensee that there was a case to answer on the charge of misconduct. However, the Authority submitted the Tribunal was entitled to conclude as it did that a prima facie case had been made out in respect of the Sievwright licensees without making specific culpability findings in respect of each of them, only that there was a case to answer.

[44] The Sievwrights’ submission was focussed on that part of the Tribunal’s decision which is set out at [17] of this judgment. At the end of its decision the Tribunal summarised its conclusion based upon its overall assessment of the evidence, that it did not find it credible the Sievwright licensees were unaware of the

state of the property. That finding was recorded by the Tribunal as having been made after its review of the evidence adduced before it, and hearing the parties’ submissions, including those which addressed the Sievwrights’ knowledge of the property’s defects at the time of its sale to Ms Scandrett.

[45] I accept the individual conduct of each licensee must be considered separately. The way the Tribunal couched its finding in such generic terms is likely to attract criticism. The Tribunal’s analysis and reasoning for its conclusion that it did not find it credible that the Sievwright licensees were unaware of the state of the property is limited, although before reaching that conclusion the Tribunal did set out the evidence and submissions in some detail. When regard is had to the course the Tribunal had decided upon, to remit the matter back to the Committee for the purpose of laying charges of misconduct before a differently constituted Tribunal, it is perhaps understandable the Tribunal did not set out their reasoning in any greater detail as it related to each of the licensees lest it be seen to be influencing the Tribunal which was to hear the charges de novo.

[46] It does not follow from the Tribunal having couched its conclusion in a collective way by reference to “the Sievwright licensees” that it did not consider the individual position of each licensee and their respective knowledge of the property. However, it is not necessary for me to come to any concluded view on this ground of the appeal because the issue has been superseded by my finding that the Tribunal lacked jurisdiction over Clayton and Lane in respect of Ms Scandrett’s appeal.

Did the Tribunal err in finding the respective actions of the licensees constituted

[47] The appellant’s dispute the finding that their involvement in the sale of the property to Ms Scandrett constituted real estate agency work, and that the Act and its rules thereby had application to the transaction. This is essentially the argument that the property transaction involved a private sale. This issue is of critical importance because neither the Committee nor the Tribunal can make a finding of unsatisfactory conduct unless the relevant conduct is within the statutory definition of “real estate agency work”.

[48] Real estate agency work or agency work is defined in s 4 of the Act as follows:

(a) means any work done or services provided, in trade, on behalf of another person for the purpose of bringing about a transaction; and

(b) includes any work done by a branch manager or salesperson under the direction of, or on behalf of an agent to enable the agent to do the work or provide the services described in paragraph (a); but

(i) the provision of general advice or materials to assist owners to locate and negotiate with potential buyers; or

(ii) the publication of newspapers, journals, magazines, or websites that include advertisements for the sale or other disposal of any land or business; or

(iii) the broadcasting of television or radio programmes that include advertisements for the sale or other disposal of any land or business; or

[126] The transaction in issue was not a private sale. The licensees and their agency were marketing the property for the said Family Trust in the usual way. That activity was clearly real estate agency work as defined in s

4 of the Act. It was in the usual course of the licensees’ and Agency’s trade.

That concept is not abrogated...by the agency’s in-house rule that some transactions need not incur commission. The benefit of that was to the Sievwright Family Trust and family including the licensees and Mrs Sievwright.

[50] I agree that the internal arrangement between Edinburgh Realty and the Sievwrights regarding the non-payment of commission is irrelevant to this issue. However, the Tribunal did not further articulate its reasoning for finding that the licensees’ conduct and actions constituted real estate agency work, other than by

[51] Edinburgh Realty and the Sievwrights submitted the Tribunal, in concluding they had marketed the property in the usual way, ignored the balance of the statutory definition which requires their actions not only be “in trade” but to be performed on behalf of another person and for the purpose of bringing about a transaction.

[52] They submitted the provision of general advice or material to assist owners to locate and negotiate with potential buyers, and the publication in newspapers, journals, magazines, or websites of advertisements for the sale or disposal of any land or business, are activities specifically excluded from the definition. It was contended any actions undertaken by them in respect of the sale fell into that excluded activity.

[53] Edinburgh Realty and the Sievwrights submitted the inclusion of names and email addresses on advertising material did not constitute further “work done or services provided”. They argued the provision of such material fell into the category of general advertising information designed to provide knowledge of a property being available for purchase and how contact could be made by a potential purchaser with the owners’ agent. Such activity, it was submitted, was not “for the purpose of bringing about a transaction”. It was argued the explicit exclusions set out in the definition made it clear the provision of such material was not sufficiently proximate to the “bringing about a transaction” to qualify as real estate work under the Act.

[54] In a separate submission Edinburgh Realty and the Sievwrights maintained no transaction was in contemplation when the material was prepared and there needed to be some nexus between the “real estate work” and the bringing about of the transaction. It was contended that because Ms Scandrett did not see the advertising material until after the contract was signed, they had not engaged in real estate work in respect of the property as defined under the Act.

[55] Edinburgh Realty and the Sievwrights also disputed that any work was done “on behalf of another person”. They submitted the Trust was not in law “another person”. Because the Trust had no separate legal identity there existed no relationship of trade between any of the Sievwrights and the Trust or its trustees.

[56] In assessing whether the work engaged in by Edinburgh Realty and its employees constituted real estate agency work regulated by the Act, the purpose of the legislation must be kept in mind. Section 3 of the Act provides as follows:

(1) The purpose of this Act is to promote and protect the interests of consumers in respect of transactions that relate to real estate and to promote public confidence in the performance of real estate agency work.

(a) regulating agents, branch managers, and salespersons: (b) raising industry standards:

[57] This provision reflects the policy behind the Act which was to introduce a new regulatory framework to provide better consumer protection from the risks associated with real estate transactions.¹⁹

[58] The essential combination of requirements to meet the statutory definition of real estate agency work are:²⁰

¹⁹Ministry of Justice Renovating the Real Estate Agents Act: Reasonable Offers Considered

[45] It is plain from the statement of statutory purpose in s 3 of the Act that the main object of the legislation is the promotion and protection of the interests of consumers in respect of real estate transactions, and the promotion of public confidence in the performance of real estate agency work. I accept that given that statutory purpose and the regulatory apparatus contained in the Act, a narrow and literal approach to the definition of “real estate agency work” would be inappropriate.

[60] The property was marketed by Edinburgh Realty utilising its brand in a way that was indistinguishable from any other properties listed by the agency. Advertising material was published in its name which warranted the property as having been listed with it as an agency licensed under the Real Estate Agents Act

2008. Photographs of two of its agents, Lane and Clayton, together with their contact details, were displayed in this material. Those contact details also referenced Barclay who shared the same email address with Lane. In marketing the property in this way, Lane and Clayton, and arguably Barclay, held themselves out as licensed salespersons rather than as vendors selling their own property, or on behalf of their family trust.

[61] Another agent of Edinburgh Realty and a colleague of the Sievwrights, Matthew Shepherd, introduced Ms Scandrett to the property. He was her main point of contact, however, there was evidence that when the issue of the condition of the house was first raised by Ms Scandrett, Mr Shepherd reverted to Barclay who suggested that any offer she may wish to make could be made subject to her obtaining a satisfactory building report.

21 November, settlement was not until 21 December. A stipulated condition of the contract was that during the intervening period the vendor could receive other offers and require Ms Scandrett to confirm the contract within two working days if that other offer was preferred. This is of some significance because Clayton was in

_{attendance at two open homes in respect of the property on 21 and 29
November}

2009. Ms Scandrett’s brother attended the first open home at her behest to provide her with his opinion of the property. Ms Scandrett’s evidence was that Clayton conducted the second open home and answered her questions about the property. Also, during this period, Ms Scandrett had direct contact with Barclay regarding her concerns about the condition of the property.

[63] In House v Real Estate Agents Authority, Cooper J held that the statutory definition of real estate agency work applies to the overall task the agency is required to perform:²²

... once the relationship of principal and agent has been established anything (be it an act or omission) that is related directly or indirectly to that work is liable to be within the definition. This accords with the pivotal nature of the definition in the scheme of the Act and its importance for the achievement of the statutory purpose.

[64] In my view, it is clear that Edinburgh Realty, as the agency, was selling the property as a normal part of its ordinary business. To the outside world the Sievwrights direct and indirect involvement with the property was as licensed salespersons of Edinburgh Realty, both when initially marketing the property and subsequently prior to its settlement. Their role both as real estate agents and as vendors was not in the circumstances mutually exclusive. Barclay, Lane and Clayton each did work or provided services as defined by s 4.

[65] This element of the statutory meaning of real estate agency work does not appear to be in dispute. The term “in trade” is not defined in the Act, however, the Authority in its submissions referred to s 2 of the Fair Trading Act 1986 which defines “trade” as:

... any trade, business, industry, profession, occupation, activity of commerce, or undertaking relating to the supply or acquisition of goods or services or to the disposition or acquisition of any interest in land.

[66] This Court has previously examined the meaning of “in trade” in the context

_{of real estate agents activities under the Fair Trading Act
1986.}²³_{In Hamid v}

England the first defendant was a real estate agent with Barfoot and Thompson. The house which was the subject of the sale belonged to the agent’s wife. It was marketed both by Barfoot and Thompson pursuant to a sole agency agreement and, with that agency’s permission, by the agent himself on Trade Me, ostensibly for the purposes of a private sale.

[67] The purchasers attended an open home where they saw a Barfoot and Thompson “for sale” billboard outside. The agent showed them around the property. In doing so he gave them a business card and a Barfoot and Thompson flyer about the property. The house was sold and the sale and purchase agreement marked “private sale”. A dispute subsequently arose in relation to serious moisture ingress issues.

[68] Whata J held the agent was acting in trade at the time he dealt with the purchaser. Both he and Barfoot and Thompson were found to have objectively held themselves out to the public as overtly managing the sale in a professional capacity, as displayed by the flyer, business card and advertising sign.²⁴While there was evidence the purchaser had engaged with the agent in a manner consistent with a private sale, the Court held the purchaser would have perceived the agent to have been acting in his professional capacity. In the absence of the agent explicitly informing the purchaser that he was selling the property in a private capacity, the purchaser was entitled to assume that Barfoot and Thompson was responsible for the management of its sale.²⁵

[69] While Whata J’s approach in Hamid v England was in relation to different legislation, both the Fair Trading Act 1986 and Real Estate Agents Act 2008 are directed at providing consumer protection. The arrangement between the Sievwrights and Edinburgh Realty regarding the non-payment of commission and their view they were acting in a private capacity on their own behalf is not determinative and is largely immaterial. I accept the Authority’s submission that,

_{even if the sale was a private sale, it was still one that was carried
out “in trade”.}

[70] Any prospective purchaser’s engagement with the property, as was the case with Ms Scandrett, was on the basis the property was being marketed and sold by Edinburgh Realty and that its employees, be it the Sievwrights or Mr Shepherd, were acting in their capacity as sales agents. The property was presented for sale to the public on that platform. The agreement for sale and purchase expressly stated the sale was by Edinburgh Realty, licensed under the Real Estate Agents Act 2008.

[71] Any purchaser signing the contract was entitled to consider that any person with whom they dealt, either before or subsequent to the entering into the contract in relation to the property, did so with the authority of Edinburgh Realty and was acting in trade. It follows that both Edinburgh Realty and the Sievwrights were acting “in trade” in involving themselves in any actions associated with or in furtherance of the property’s marketing and sale, or when dealing with the purchaser in relation to the property, either before or after the contract was signed and before settlement, in the absence of any external indicia to the contrary, of which there was little, if any.

[72] The property was owned by the Trust and the vendors were the trustees, Barclay, Lane and Ngaire Sievwright.

[73] Edinburgh Realty is a distinct legal entity from the trustees. Clearly, the work done by its employees in respect of the marketing and sale of the property in its name was on behalf of other persons distinct from its corporate identity. Equally clearly, while it may have been arguable that Barclay and Lane have the same personal legal identity, whether as a trustee or as an agent, Ngaire Sievwright was a separate legal person. Barclay and Lane in their capacity as agents were acting on her behalf. No difficulty arises in respect of Clayton who was not a trustee of the Trust.

[74] Edinburgh Realty and the Sievwrights submitted the provision of general advertising information about the property to the public was not sufficient to constitute work for the purpose of bringing about a transaction so as to qualify as

real estate work. I reject that submission. The publication and distribution to the general market of information advertising a property to be sold, together with contact details of agents who can be contacted in respect of the property, constitutes work or a service provided to the vendor for the purpose of bringing about a transaction.

[75] In support of their argument, Edinburgh Realty and the Sievwrights sought to rely on the statutory exclusions contained in the statutory definition of “real estate agency work”, set out at [48]. These statutory exclusions were designed to ensure the definition of real estate agency work was not overly-inclusive and did not inadvertently capture the publication of advertisements by publishing and other media organisations. The publication and distribution of marketing material, however, is a core part of a real estate agents work and the service licensees provide to clients. Such activities are directly undertaken for the purpose of bringing about a transaction in respect of properties listed with the agency.

[76] I do not accept the related submission that there be some causal nexus or connection between the “real estate work” and the bringing about of Ms Scandrett’s transaction in respect of the property as a prerequisite to either the agency or licensee having engaged in real estate agency work in respect of the property. Neither the definition of real estate work, nor its application, is dependent on proof that the transaction in question was directly brought about as a result of the licensee’s or agency’s activities. It is sufficient that the work done or services provided in respect of the property were undertaken for the purpose of bringing about a transaction. In respect of the disclosure obligation contained in s 136 of the Act, the obligation is owed to every prospective party to the transaction. It is not necessary that there be proof that the licensee’s real estate agency work brought about the transaction.

[77] A “transaction” is defined under the Act as including the sale, purchase, or other disposal or acquisition of a freehold estate or interest in land. In House v Real Estate Agents Authority, Cooper J found that a complaint made of an agency’s customer relations manager’s involvement with a client fell outside the definition of real estate agency work because by that stage the transaction had settled and the

purchasers had become registered on the title.²⁶Actions taken after that point could not properly be described as having been taken “for the purpose of bringing about a transaction”. In the present case, the real estate work relied upon by Ms Scandrett in respect of the complaint occurred prior to settlement.

[78] Ms Scandrett had seen Edinburgh Realty’s advertisement for the property on the weekend of 21 November 2009, when she had viewed it at her friend’s apartment. She contacted Mr Shepherd who was an agent with whom she had already dealt in her search for a suitable property. There was subsequently both direct and indirect engagement and involvement by the Sievwrights with Ms Scandrett in relation to the property before it settled on 21 December 2009. This included arrangements for the sale and purchase agreement to be made subject to the obtaining of a suitable building report and interactions at the open homes, either indirectly through Ms Scandrett’s brother or directly with Ms Scandrett when she questioned Clayton about the state of the property. Barclay also directly spoke with Ms Scandrett about the state of the property before the date of settlement.

[79] I am satisfied the Sievwrights’ conduct in respect of the property fell within the definition of real estate agency work. In particular, that having carried out real estate agency work in respect of a transaction involving the property, they were required to disclose to every prospective purchaser, and in this case to Ms Scandrett, that they, or a person related to them, may benefit financially from the transaction. Similarly, their obligations under the Rules as licensees applied.

[80] Section 136(3) requires disclosure to be made before or at the time the licensee provides the prospective party with any contractual documents that relate to the transaction. It was argued that because the Sievwrights were unaware the agreement papers had been provided to Ms Scandrett by Mr Shepherd on

21 November 2009, they did not have the opportunity to make disclosure and could

[81] I do not consider that argument to be persuasive. The obligation on the Sievwrights to disclose their interest was required to be discharged, at the latest, before contractual documents were presented to a prospective purchaser. They failed to discharge that responsibility. It is no answer to claim they were unaware of the timing of the presentation of the documents to the prospective party. In any event, the obligation did not end at the time the documents were provided to Ms Scandrett.

[82] The disclosure obligation is an ongoing one and it was the licensees’ responsibility, having marketed the property for sale as licensees and Barclay, having been instrumental in allaying concerns expressed about the property’s condition by suggesting the contract be made subject to a building report, to disclose their interests. Their involvement in the continued marketing of the property after the conditional agreement had been entered into and with Ms Scandrett herself, up until the date of settlement, placed an ongoing duty on them to disclose their interests in accordance with the obligation contained in s 136(1).

[83] The parties are agreed the Tribunal erred in failing to dismiss Ms Scandrett’s appeal as it related to the conduct of Mr Wilson, a director of Edinburgh Realty. Ms Scandrett did not pursue this ground of appeal against Mr Wilson before the Tribunal. That aspect of Ms Scandrett’s appeal should have been recorded by the Tribunal to have been withdrawn or dismissed. Arguably, that was the Tribunal’s intended effect when regard is had to its recorded observation that it considered the other complaints of Ms Scandrett to be of little significance in view of its finding as it related to the licensees and Edinburgh Realty regarding breaches of the Act and the Rules, and of Mr Wilson’s evidence before the Tribunal having not been challenged. By consent, I confirm that to be the position.

Did the Tribunal have jurisdiction to remit the case back to the Committee with a direction to lay charges of misconduct?

Tribunal’s appellate jurisdiction was defined by statute and that it had no authority to

make an order referring the case back to the Committee to lay charges of misconduct.

[85] Section 111(4) of the Act provides that, after considering the appeal, “the Tribunal may confirm, reverse, or modify the determination of the Committee”. Subsection (5) further provides that if the Tribunal reverses or modifies a determination of the Committee, “it may exercise any of the powers the Committee could have exercised”.

[86] The powers that the Committee could have exercised to determine a complaint are set out in s 89:

(1) A Committee may make 1 or more of the determinations described in subsection (2) after both inquiring into a complaint or allegation and conducting a hearing with regard to that complaint or allegation.

(a) a determination that the complaint or allegation be considered by the Disciplinary Tribunal:

(b) a determination that it has been proved, on the balance of probabilities, that the licensee has engaged in unsatisfactory conduct:

(c) a determination that the Committee take no further action with regard to the complaint or allegation or any issue involved in the complaint or allegation.

(3) Nothing in this section limits the power of the Committee to make, at any time, a decision under section 80 with regard to a complaint.

If a Committee makes a determination that the complaint or allegation be determined by the Disciplinary Tribunal, the Committee must—

(a) frame an appropriate charge and lay it before the Disciplinary Tribunal by submitting it in writing to the Tribunal; and

(b) give written notice of that determination and a copy of the charge to the person to whom the charge relates and to the complainant.

(b) order that all or some of the terms of an agreed settlement between the licensee and the complainant are to have effect, by consent, as all or part of a final determination of the complaint:

(e) order the licensee to reduce, cancel, or refund fees charged for work where that work is the subject of the complaint:

(ii) where it is not practicable to rectify the error or omission, to take steps to provide, at his or her or its own expense, relief, in whole or in part, from the consequences of the error or omission:

(g) order the licensee to pay to the Authority a fine not exceeding $10,000 in the case of an individual or $20,000 in the case of a company:

(h) order the licensee, or the agent for whom the person complained about works, to make his or her business available for inspection or take advice in relation to management from persons specified in the order:

(i) order the licensee to pay the complainant any costs or expenses incurred in respect of the inquiry, investigation, or hearing by the Committee.

(2) An order under this section may be made on and subject to any terms and conditions that the Committee thinks fit.

[89] Edinburgh Realty and the Sievwrights submitted that without statutory authority the Tribunal had purported to set aside the entire process to date and to

commence new proceedings, directing the Committee as to how it should exercise its statutory powers by determining that charges of misconduct be laid pursuant to s 89(2)(a). It submitted it had no statutory authority to determine the appeal in that way.

[90] Two arguments were made. Firstly, that s 111(4) of the Act makes no provision for the Tribunal, after considering an appeal, to remit the case back to the Committee. It was submitted that any power to remit a matter back to the Committee must be found in the statute, and no such power existed under the Act. This was contrasted, by way of example, with the Criminal Procedure Act 2011

which expressly provides for the appeal Court to direct a retrial or a rehearing.²⁷

Similarly, the High Court Rules provide for the appeal Court to dispose of an appeal by directing the decision maker to rehear the proceeding.²⁸

[91] Secondly, if the Tribunal’s decision to remit the case back is interpreted as a decision by it to “reverse or modify” the determination of the Committee, it was argued that the Tribunal is limited when making such a decision to the exercise of the powers the Committee could have exercised. It was submitted that because the Committee had made findings of unsatisfactory conduct, such powers did not include the power to lay charges of misconduct. The Tribunal itself did not have any power to lay such charges and was dependent upon the Committee determining that such a charge should be considered by the Tribunal. The Committee had declined to do so.

[92] In response, the Authority submitted the Tribunal does have jurisdiction to remit cases back to a Committee for charges to be laid, although it acknowledged such a course should only be adopted in rare or exceptional cases. It submitted there was a high threshold to be reached before the Tribunal would allow an appeal from a Committee’s determination not to lay charges of misconduct for its consideration. The Tribunal’s remitting of the case back with a direction that misconduct charges be laid was a challenge to the exercise of the Committee’s discretion to lay charges, and

_{it was acknowledged by the Authority that such a step needs to be
considered in light}

of the exercise of the Committee’s prosecutorial discretion when making its decision not to lay such charges.

[93] The Authority acknowledged the Tribunal could not make a finding of misconduct without having such a charge laid before it. It submitted that while the Tribunal can downgrade a misconduct charge to unsatisfactory conduct, it cannot elevate an unsatisfactory conduct finding to one of misconduct, or find misconduct in the absence of such a charge having been laid before it.²⁹

[94] For the purpose of this part of the argument, Ms Scandrett was content to adopt the submissions of the Authority.

[95] After inquiring into a complaint and conducting a hearing, the Committee may make one or more of the following determinations:³⁰

(b) that it has been proved, on the balance of probabilities, that the licensee has engaged in unsatisfactory conduct;

(c) that the Committee take no further action with regard to the complaint, or allegation, or any issue involved in the complaint or allegation.

[96] Where the Committee decides that a complaint or allegation should be determined by the Tribunal, it is its responsibility to frame an appropriate charge and lay it before the Tribunal with written notice of that determination and a copy of the

[97] That did not happen in the present case. The Committee found in relation to some aspects of Ms Scandrett’s complaint, that Edinburgh Realty and the Sievwrights had engaged in unsatisfactory conduct as a result of breaches of the Act and the Rules. In respect to the balance of Ms Scandrett’s complaint, and in particular as it related to the Sievwrights’ knowledge of the property’s defects, the Committee determined that no further action was to be taken. The Committee was not satisfied that Ms Scandrett had proved her allegation. The parties’ respective appeals to the Tribunal lay against those determinations.

[98] Ms Scandrett clearly had a right of appeal under s 111 as a person affected by a determination of the Committee to challenge the Committee’s determination to take no further action regarding her complaint about the state of the property.³²Had the Committee found, in respect of that aspect of her complaint, that the licensees had engaged in unsatisfactory conduct but declined to frame a charge of misconduct for determination by the Tribunal, she would similarly have had available to her a right of appeal under s 111. The Tribunal must therefore have jurisdiction to review the Committee’s discretion not to lay misconduct charges. This Court has previously

accepted the jurisdiction of the Tribunal to hear an appeal against the decision of the Committee not to bring charges of misconduct.³³The alternative would be to accept that the Committee has an unfettered discretion and that, illogically, one of the three determinations available to the Committee under s 89(2) of the Act is immune from oversight by the Tribunal.³⁴

[99] Having accepted that the Tribunal, in the exercise of its appeal jurisdiction, may consider a Committee’s determination regarding whether charges should be brought before it, the next question to consider is what are the Tribunal’s powers should it determine that charges should have been laid. Section 111(4) provides that the Tribunal, after considering an appeal, may “confirm, reverse, or modify the determination of the Committee”.

[100] The wording “confirm, modify, or reverse”, in the context of the powers of an appeal body, has been considered in the context of the sale of liquor legislation. In

³⁴See Maketu Estate Ltd v Real Estate Agents Authority, above n 29, at [31].

particular, whether such a formula permits the appeal body to remit a matter back for determination. The question was left open by Blanchard J in Chef & Brewer Bar and Cafe Ltd v Police.³⁵Although, in Cats Nightclub (1991) Ltd v Police, Panckhurst J doubted whether the jurisdiction to direct a rehearing was conferred on an appellate Tribunal by such wording.³⁶More recently, however, this Court has determined such a course to be available. In Triveni Puri Ltd v Commissioner of Police, Kos J considered that although there was no express power in the statute to remit a proceeding back to the authority, he was satisfied that such power existed as a matter of necessary implication in the provision.³⁷

[101] In the recent decision of Christchurch Medical Officer of Health v J & G Vaudrey Ltd, Gendall J reviewed previous authorities in the context of the sale of liquor legislation and concluded:³⁸

[22] I will therefore dispose of this issue by holding that inherent in the concept of a reversal is the ability to revoke or nullify a decision under appeal. The natural corollary of this is that there is the power to refer back for rehearing should the appellate body consider that necessary (it will also ordinarily have power to hear further evidence on appeal). This conclusion, in my view, applies as much to appeals to the Authority as it does to appeals to this Court.

[24] I therefore conclude the ability to “confirm, modify, or reverse” a decision appealed against, outlined in s 161(7) of the Act, includes the power to nullify the decision altogether, which then triggers the ability to refer the matter back to the Court under appeal for reconsideration. Had I not reached this conclusion on this basis, I would have nonetheless reached the same view on the basis of the inherent powers of the Court on appeal (as Kos J concluded in Triveni Puri Ltd v Commissioner of Police) ...

[102] The Court of Appeal recently confirmed the interpretation adopted by Gendall J, that “reverse” includes the revocation or annulment of a decision.³⁹The Court of Appeal also confirmed the power of the relevant appeal authority to refer

_{the matter back to the original decision-maker in appropriate cases. I
also note the}

³⁷_{Triveni Puri Ltd v Commissioner of Police [2012]
NZHC 2913, [2013] NZAR 88 at [38].}

³⁸Christchurch Medical Officer of Health v J & G Vaudrey Ltd [2015] NZHC 2749, [2016] 2

³⁹J & C Vaudry Ltd v Canterbury Medical Officer of Health [2016] NZCA 539 at [77].

obiter comment of this Court in Nottingham v Real Estate Agents Authority.⁴⁰

Thomas J observed in that case that if the appellants had been successful in their appeal from the decision of the Committee, the Tribunal would have remitted the matter to the Committee with a direction that it lay a misconduct charge.

[103] These recent decisions reflect the approach taken by the Court of Appeal to the meaning of “reverse”, which was discussed in Director-General of Social Welfare v W in the context of the Social Security Act 1964:⁴¹

[20] In our view the term “reverse” appearing in s 12M(7) includes “revoke”. One of the meanings of “reverse” noted in the Concise Oxford Dictionary is “revoke or annul”. More particularly, given the Authority’s status, by virtue of s 121(1) as a “judicial authority”, we observe that in a legal context of appellate or reviewing powers, “reverse” has the included meaning. Jowitts Dictionary of English Law (2nd ed, 1977) defines “reverse” as “to undo, repeal or make void. A judgment is said to be reversed when it is set aside by a court of appeal”. Black’s Law Dictionary (7th ed,

1999) defines “reversal” as “1. An appellate court’s overturning of a lower court’s decision”. The Dictionary of Canadian Law (1991) defines “reverse” as “to make void, repeal or undo. A judgment is reversed when a court of appeal sets it aside”.

[21] Both counsel, surprisingly, resisted this suggestion from the Bench but that inclusive meaning is necessary to give efficacy to the Authority’s functions when dealing, for example, with a decision to discontinue the payment of a benefit. Such a situation may often arise. It would seem very odd if, in such circumstances, by virtue of a more restricted meaning of “reverse” the relief was a decision not to discontinue a continuing benefit. Further, there may well be situations where a decision should not stand but should be reheard in the light of directions, pursuant to a subs (8) reference.

[22] In our opinion the Authority may confirm a decision under appeal, or modify it, or reverse it by turning it round, or reverse it in the sense of revoking it either with or without a direction for rehearing. But it must do one of those things. It cannot simply dismiss without passing on the correctness or otherwise wholly or in part of the decision appealed against.

[104] The Committee’s finding of inadequate proof of Ms Scandrett’s complaint that the Sievwrights knew about defects in the property resulted in a determination that no further action was required. That part of Ms Scandrett’s complaint was dismissed. The Tribunal’s decision effectively reversed the Committee’s

_{determination. The Tribunal could have substituted a finding
of unsatisfactory}

⁴¹Director-General of Social Welfare v W [2004] NZCA 305; [2005] NZAR 258 (CA).

conduct, however, it was unable to make any finding of misconduct without such a charge being before it. To give effect to the reversal of the Committee’s decision in the way the Tribunal considered appropriate, it was necessary for it to refer the matter back to the Committee.

[105] I consider it either inherent in the statutory power of the Tribunal to reverse a decision, or, as part of its powers, exercised in accordance with the rules of natural justice to regulate its procedures pursuant to s 105(1) of the Act, that the Tribunal has jurisdiction to adopt that course. That approach is consistent with that taken in recent cases where an appeal body has a power to confirm, modify or reverse a decision but no explicit power bestowed to remit the proceeding back. I consider an ability to remit a matter the subject of an appeal back to a Committee to be a necessary and ancillary form of disposition intrinsic to and comparable with the Tribunal’s power to reverse a determination.

[106] I conclude the Tribunal did have jurisdiction to remit the case back to the Committee. I consider the Tribunal’s finding on the appeal, which proceeded by way of rehearing, is to be construed as a reversal of the Committee’s decision. In the absence of the Tribunal being able to hear and determine charges of misconduct without such charges having been formally laid before it, the Tribunal was at least able to remit the matter back to the Committee to reconsider its determination about Ms Scandrett’s complaint. It is not disputed that, in fact, the Tribunal chose to remit the whole case back to the Committee, including the Committee’s findings of unsatisfactory conduct in relation to breaches of the Act and Rules. Whether the Tribunal could legitimately direct the Committee as to the nature of charges it should lay I consider to be a separate issue to which I now turn.

[107] The Sievwrights and Edinburgh Realty argued that in approaching its decision on the appeal in the way it did, the Tribunal had failed to confirm, reverse, or modify the determinations of the Committee as required under the statute, but

instead had applied what was described as a vague test of what it considered to be

the “most just” course of action, and that such an approach was misconceived.

[108] They submitted that should it be found the Tribunal did have jurisdiction to remit the matter back to the Committee for its consideration, it exercised that jurisdiction improperly and contrary to law. It was submitted that it was inappropriate for the appellate body to direct the Committee as to how it should exercise its prosecutorial discretion, and had effectively taken a hand in the formulation of the charges. Because the Committee was itself a judicial body charged with the responsibility of deciding whether or not to lay charges, it was inappropriate for the Tribunal to direct the charges to be laid for its hearing, albeit

[109] The Authority submitted that the decision of the Tribunal to remit the matter back to the Committee must be interpreted as having been based on a finding that the decision of the Committee not to lay charges of misconduct was plainly wrong. The Authority recorded itself as being neutral on the issue of whether or not the Tribunal was correct in making that finding. It was content to acknowledge that the appeal will be successful if this Court considers that it was reasonably open to the Committee not to file misconduct charges. The Authority submitted that should the appeal be successful on that ground, the Committee’s decision should be reinstated and the Committee’s unsatisfactory conduct findings against Edinburgh Realty and the Sievwrights upheld.

[110] Ms Scandrett submitted that the Tribunal had not applied the wrong test, nor misconceived its task. While acknowledging that appeals from decisions not to lay charges are discretionary and were required to be considered in light of the prosecutorial context in which they were made, it was submitted that the Tribunal was entitled to conclude, as it did, that charges of misconduct should be laid by the

[111] The power of the Committee to refer a misconduct charge to the Tribunal is a determination that the Committee may make, in the exercise of its discretion, after inquiring into a complaint and conducting a hearing.⁴³The Supreme Court, in Kacem v Bashir, clarified that the approach by an appeal Court to a decision made in the exercise of a lower Court’s discretion is different than when exercising jursidiction over general appeals:⁴⁴

In this context a general appeal is to be distinguished from an appeal against a decision made in the exercise of a discretion. In that kind of case the criteria for a successful appeal are stricter: (1) error of law or principle; (2) taking account of irrelevant considerations; (3) failing to take account of a relevant consideration; or (4) the decision is plainly wrong.

[112] Section 111(3) of the Act provides that an appeal to the Tribunal against a determination by the Committee is by way of rehearing. Ordinarily, when applying the principles set out in Austin, Nichols & Co Inc v Stichting Lodestar, those exercising general rights of appeal are entitled to judgement in accordance with the opinion of the appellate Court.⁴⁵If the appeal to the Tribunal had been confined to whether the Committee had been correct in its determination that no further action be taken in regard to Ms Scandrett’s complaint and the Tribunal had limited itself to a consideration of that decision and whether it should substitute a finding of

unsatisfactory conduct, it would have been free to have substituted its own view of that issue.

[113] However, the Tribunal went much further. It ultimately focussed on whether the Committee should have laid charges of misconduct. That decision is the sole responsibility of the Committee. Whether to refer a charge to the Tribunal for its consideration involves the exercise of its discretion. The Tribunal itself has recognised that such a decision involves the exercise of prosecutorial discretion, and that any appeal from a Complaints Assessment Committee’s decision not to lay a

⁴⁵_{Austin, Nichols & Co Inc v Stichting Lodestar
[2007] NZSC 103, [2008] 2 NZLR 141.}

⁴⁶Dunn v Real Estate Agents Authority [2012] NZREADT 56, followed in Win v Real Estate

Agents Authority [2016] NZREADT 54, and Maketu Estate Ltd v Real Estate Agents Authority

[114] The Tribunal, in Dunn v Real Estate Agents Authority, observed that it would only consider such an appeal if it could be said the decision was an error of law, took into account irrelevant considerations, or failed to take into account relevant considerations, or was plainly wrong. It was noted that such an approach permitted an appeal under s 111, but recognised many of the policy reasons applicable to the

[115] This Court tacitly approved that approach in Nottingham v Real Estate Agents Authority.⁴⁸Thomas J observed that “the Court may be slower to interfere in a decision of a prosecutorial nature given the policy considerations which arise”.⁴⁹

The Judge noted that notwithstanding the statutory right of appeal, it would be necessary for the Court to be persuaded that the prosecutorial decision the subject of the appeal was not one reasonably open to the decision maker.⁵⁰

[116] There are differences between a prosecution brought in a criminal context and a prosecution taken as part of a disciplinary process under the Real Estate Agents Act. Various constitutional considerations, such as the separation of powers and the respective roles of the executive and the Courts, are highly influential considerations when assessing the ambit of review of criminal prosecution decisions which will have limited application to civil disciplinary matters. The jurisdiction to prosecute under the Real Estate Agents Act is obviously exercised within relatively confined parameters in comparison to prosecutorial decisions under the general criminal law. The context in which such prosecutorial decisions are made will affect the factors which may bear on the exercise of the discretion. This may be particularly acute in assessing the public interest in pursuing a disciplinary prosecution, having regard to such considerations as delay, the health of the licensee, or whether that person is any longer in practice.

[117] An important competing consideration in the exercise of prosecutorial discretion in this context will be the consumer protection focus of the legislation. I

have already noted the purpose of the legislation, which is to protect the interests of consumers in respect of transactions that relate to real estate, and to promote public confidence in the performance of real estate agency work. This purpose is sought to be achieved by the regulation of agents, the raising of industry standards, and by providing accountability through a disciplinary process that is independent, transparent and effective. Accordingly, while a decision to prosecute necessarily involves the exercise of a discretion as was recognised by the Supreme Court in Kacem v Bashir, the context may be such that the same level of deference may not need to be afforded to the responsible charging body as would be the case when the police or Crown make such charging decisions.

[118] In assessing whether the Tribunal wrongly exercised its jurisdiction to remit the matter back to the Committee, it is necessary to consider whether it applied the appropriate test, namely whether the Tribunal considered the Committee to be “plainly wrong” not to lay a charge. In its submission, the Authority acknowledged this high threshold of “plainly wrong” should be considered akin to Wednesbury unreasonableness or irrationality, such that no Committee properly informed of all the relevant circumstances could have decided other than to lay charges of misconduct. This high threshold has recently been acknowledged by the Tribunal as

[119] Having heard the matter de novo and received oral evidence over the course of some two days, the Tribunal concluded that it did not find it credible that the “Sievwright licensees” were unaware of the state of the property. It held that a prima facie case had been made which showed their conduct would reasonably be regarded as seriously incompetent or negligent real estate work, in wilful or reckless contravention of the Act or the rules. The Tribunal came to that conclusion based on evidence which was far more extensive than that presented before the Committee and which dealt with Ms Scandrett’s complaint without the benefit of an oral hearing

[120] The Tribunal clearly concluded that the Committee erred in determining that Ms Scandrett’s complaint about the Sievwrights’ knowledge of the property’s defects did not warrant taking further action. It is also apparent from the Tribunal’s decision that it considered the Sievwrights’ conduct in that regard at least constituted unsatisfactory conduct. Both those conclusions were findings open to the Tribunal which it was entitled to substitute for the Committee’s determination in the exercise

of its own opinion as the appellate Court.⁵²However, the Tribunal went further. It

did not consider it credible that the Sievwrights were not aware of the state of the property. The Tribunal considered a prima facie case of misconduct had been established on the evidence presented before it.

[121] I consider that conclusion reached by the Tribunal constituted a finding that the Committee was plainly wrong not to have laid charges of misconduct for its consideration. Having found a prima facie case established there would need to have been a compelling reason why the Committee would not have determined that the complaint or allegation be considered by the Tribunal and have framed appropriate charges. However, while the Tribunal was entitled to have come to that conclusion on the evidence before it, I do not consider the Tribunal could then proceed to simply direct such charges to be laid. The Tribunal could not usurp what still remained the sole responsibility and function of the Committee by directing, or effectively ordering, it to lay charges.

[122] At first blush, it may be thought that having concluded the Committee was plainly wrong in not laying charges of misconduct, it automatically follows that the Committee would be required to lay such charges for the Tribunal’s determination. That approach, however, overlooks the enduring statutory responsibility of the Committee to independently inquire into the complaint and decide whether, in the exercise of its discretion, it will determine the complaint to be one which should be considered by the Tribunal. In my view, the Tribunal did not have the power to

[123] The Tribunal, rather than individually dealing with each of the Committee’s

determinations put in issue before it on the appeal and cross-appeal, concluded:⁵³

... It is not appropriate for the current determinations of the Committee to remain standing if we find that the most just course is that the complaint be referred to us by way of an appropriate charge. We do so find the evidence adduced to us which was far more extensive than that before the Committee.

[131] Accordingly, we quash the finding of the Committee and refer the complaints back to it with our direction that the Committee now, forthwith, formulate an appropriate charge or charges and lay it or them before us in terms of the procedures of the Act and its regulations.

[125] The effect of the Tribunal’s order to quash the findings of the Committee was to extinguish all the Committee’s determinations that had been the subject of the appeal and cross-appeal. Thus, while the Tribunal had observed that it was satisfied as to the Committee’s findings of unsatisfactory conduct in relation to breaches of s

136 of the Act and the rules, rather than upholding those determinations, the Tribunal decided the appropriate course was for the whole matter to be remitted back to the Committee in order for it to reconsider the formulation of new charges. This included the Committee’s findings that Edinburgh Realty breached rr 9.5 and 9.15, and s 136 of the Act; and that each of the Sievwrights breached r 9.15 and s 136. The related “unsatisfactory conduct” determinations based upon those breaches were also therefore quashed.

[126] I heard some argument from Edinburgh Realty and the Sievwrights as well as from the Authority regarding the merits of the Committee’s determination finding breaches s 136 of the Act and rr 9.5 and 9.15. However, as was recognised by counsel for Edinburgh Realty and the Sievwrights, the effect of the Tribunal’s decision was to quash the Committee’s determinations. As I have found the Tribunal was entitled to remit the matter back to the Committee for its reconsideration, the merits of those aspects of the Committee’s original decision will now need to be assessed afresh by the new committee which will need to hear from Edinburgh Realty and the Sievwrights before reaching any determinations. It will also no doubt

[127] I note that the Tribunal’s assessment of the need to remit the matter back to the Committee was based on a finding that on the evidence adduced before it charges of misconduct should be considered in relation to the issue of the Sievwright licensees’ knowledge of the state of the property.⁵⁴The Tribunal considered that having regard to the licensees’ own appeal from the Committee’s determinations of unsatisfactory conduct, the “most just course” was to refer all the Committee’s determinations back to it for appropriate charges.⁵⁵I do not consider therefore that the Tribunal concluded that the Committee was plainly wrong to proceed without laying misconduct charges in relation to the matters it made determinations of unsatisfactory conduct about. The Tribunal appears to have considered that because of its findings in relation to Ms Scandrett’s appeal the “most just outcome” was to remit all matters back to the Committee for its reconsideration.

[128] After the elapse of such a period of time since Ms Scandrett’s original complaint, the Committee, in assessing its approach to the matter afresh, and in particular in the exercise of its discretion to lay charges, will no doubt take into account the evidence adduced before the Tribunal, but it will also need, after all these years, to identify the nub of Ms Scandrett’s complaint which needs to be heard and determined, and those more peripheral issues which, while perhaps being of some general relevance to consumer protection concerns, are secondary to dealing with the issues that directly affect Ms Scandrett.

[129] The Tribunal, having concluded the Committee was plainly wrong not to have referred charges to it for its consideration, was entitled to remit the whole matter back to the Committee for its reassessment. It, however, had no jurisdiction to direct the Committee as to how it should exercise its discretion in the wake of the Tribunal’s decision. As this case is perhaps illustrative, there are many considerations other than purely evidential sufficiency relating to matters of policy which may need to be considered by a Committee when determining whether a

_{complaint or allegation should be considered by the Tribunal and charges
laid.}

[130] Simply because the matter has been remitted back by the Tribunal for the Committee’s reconsideration of appropriate charges does not mean the Committee can omit to undertake the necessary appraisal of the appropriateness of proceeding in a particular way in relation to a matter that includes a range of allegations and issues. It remains a decision for the Committee to make in the exercise of its discretion.

(a) With the exception of the allegations relating to Lane and Clayton’s knowledge of the property’s defects, the Tribunal’s direction to remit the matter back to the Committee for its consideration stands.

(b) Because Ms Scandrett did not appeal the Committee’s determination to take no further action in regard to the allegations relating to Lane and Clayton’s knowledge of the property’s defects, the Tribunal had no jurisdiction to disturb the Committee’s determination as it related to that part of Ms Scandrett’s complaint. The Committee’s original determinations relating to Lane and Clayton’s knowledge of the property’s defects are therefore reinstated.

(c) The Tribunal had no jurisdiction to direct the Committee as to the charges it should lay, but only to direct its reconsideration of the matter to decide whether and what charges should be laid.

(d) The Tribunal concluded that Edinburgh Realty and the Sievwrights each breached s 136 of the Act and rr 9.5 and 9.15. However, as was acknowledged by the Authority, the Committee did not in fact find Barclay, Lane or Clayton to be in breach of r 9.5. Ms Scandrett did not appeal any failure by the Committee to find such a breach by the Sievwrights, nor, obviously, did the Sievwrights. It follows therefore that in the absence of any appeal putting in contest the Sievwrights’ obligations under r 9.5, the Tribunal had no jurisdiction to make such a finding in respect of those licensees.

(e) In the absence of any appeal being pursued by Ms Scandrett before the Tribunal in relation to Mr Wilson, a director of Edinburgh Realty, I formally record that aspect of Ms Scandrett’s appeal to have been formally withdrawn or dismissed. As with the allegations relating to Lane and Clayton’s knowledge of the property’s defects, it does not form part of the case remitted back to the Committee for its consideration.

[132] The Authority advised that in the wake of the Tribunal’s quashing of the Committee’s decision and its referral of the matter back with directions that charges of misconduct be laid, a new assessment committee (the new committee), has conducted an inquiry, held a hearing and determined to lay charges. Those charges include allegations of wilful or reckless breaches of s 136 of the Act, rr 9.15 and 9.5 of the Rules, and of wilful or reckless non-disclosure of defects affecting the property in breach of rr 6.4 and 6.5 of the Rules. The new committee has also determined to lay an alternative charge of serious negligence as well pursuant to s 73(b) of the Act.

[133] On 5 July 2016, I made an order by consent staying the proceedings pending the determination of this appeal. The Authority, in a memorandum filed in response to the application for a stay, did not oppose the stay, although, I note its non- opposition was based on a stay of the “Tribunal proceedings” pending the outcome of the appeal. The order I made was not so confined, however, I accept that the Authority proceeded on the understanding that any new charges laid would not be considered by the Tribunal until the appeal to this Court had been determined.

[134] Notwithstanding any confusion as to the ambit of the stay, it is apparent that the action of the new committee in deciding to lay new charges was premature. The new committee should no longer consider itself bound by any direction of the Tribunal to lay charges of misconduct, and particularly so in relation to alleged breaches of s 136 of the Act and the Rules. It will need to apply its own independent assessment to the matter. In particular, it will need to exercise its discretion afresh,

taking into account all matters that may bear on the determination of Ms Scandrett’s extant complaints and allegations, including, if it considers it appropriate, the nature of any charges to be laid.

[135] Because the Committee’s original determination of Ms Scandrett’s complaint against Clayton and Lane in respect of the defects of the property remains intact, and therefore has already been determined, it would be an abuse of the complaint process to lay any further charges in respect of that issue in relation to those two licensees.

[136] I consider both sets of parties can claim some level of success on the appeal. Unfortunately, this judgment does not bring finality to the matter and the ultimate merits of the parties’ respective positions on the substantive issues remain to be determined. While I have not heard the parties on the issue of costs, in the circumstances, I can indicate that I consider it appropriate to let costs lie where they fall. If one of the parties feels particularly strongly they wish to be heard on costs, memoranda should be exchanged and filed in the ordinary way (not more than three pages).

High Court of New Zealand Decisions

Edinburgh Realty Limited v Scandrett [2016] NZHC 2898 (1 December 2016)