Company A - Complaint No CA4043019 [2011] NZREAA 203 (11 July 2011)

Last Updated: 17 February 2013

In the Matter of Part 4 of the Real Estate Agents Act 2008

And

In the Matter of Complaint No: CA4043019

In the Matter of Company A

Licence Number: XXXXXXXX

Decision of Complaints Assessment Committee

Dated this 11th day of July 2011

Complaints Assessment Committee: CAC10060

Chairperson: Sue Matehaere-Patten

Deputy Chairperson: John Auld

Complaints Assessment Committee

Decision to take no further action

1. The Complaint

1.1 Ms C (the Complainant) has complained to the Real Estate Agents Authority (the Authority) about the conduct of Company A (the Licensee). The Licensee is licensed under the Real Estate Agents Act

2008 (the Act) as a licensed agent at the time of conduct. This Complainant is concerned about

funds invested by her in 2004 and 2007 respectively and her request to have the funds returned.

1.2 The Complainant has declined further opportunities to invest in the scheme and is endeavouring to recover her investment funds.

1.3 The Complainant alleges that she was treated in a threatening manner by Company B and the

Licensee when she was attempting to withdraw the funds.

2. Material Facts

2.1 The Complainant made an initial investment of $18,000 with Company B in 2004.

2.2 This investment was increased to $20,000 into the investment scheme for Company B on 20

November 2007. The receipt issued shows the funds were banked into Company B’s Trust Account.

2.3 On 20 November 2007, the $2,000 was moved to the Harbour B development scheme and the same amount ($2,000) receipted by the Licensee’s Trust Account.

2.4 Company B issued a Certificate of Real Property Proportional Ownership on 21 January 2008.

2.5 On 31 July 2009, Company B requested additional investment and advised that the investment would be rolled over. This was refused by the Complainant and she requested withdrawal of her funds.

2.6 The Complainant alleges she has made many telephone calls to Company B but has to date not received any payments of the funds.

2.7 Mr S, on behalf of the Licensee, outlined the role of the Licensee as that of the sales organiser and confirms that this role ceased in January 2008.

3. Relevant Provisions

3.1 A complaint can only be made in relation to the alleged unsatisfactory conduct under section 72 of the Act and for misconduct (section 73 of the Act).

3.2 The Interpretation section of the Act defines real estate agency work as

real estate agency work or agency work—

(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

(c) does not include—

(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

(iv) the lending of money on mortgage or otherwise; or

(v) the provision of investment advice; or

(vi) the provision of conveyancing services within the meaning of the Lawyers and

Conveyancers Act 2006

3.3 Section 72 of the Act defines unsatisfactory conduct:

For the purposes of this Act, a licensee is guilty of unsatisfactory conduct if the licensee carries out real estate agency work that—

(a) falls short of the standard that a reasonable member of the public is entitled to expect from a

reasonably competent licensee; or

(b) contravenes a provision of this Act or of any regulations or rules made under this Act; or

(c) is incompetent or negligent; or

(d) would reasonably be regarded by agents of good standing as being unacceptable.

3.4 Section 73 of the Act defines misconduct:

For the purposes of this Act, a licensee is guilty of misconduct if the licensee's conduct—

(a) would reasonably be regarded by agents of good standing, or reasonable members of the public, as disgraceful; or

(b) constitutes seriously incompetent or seriously negligent real estate agency work; or

(c) consists of a wilful or reckless contravention of—

(i) this Act; or

(ii) other Acts that apply to the conduct of licensees; or

(iii) regulations or rules made under this Act; or

(d) constitutes an offence for which the licensee has been convicted, being an offence that reflects adversely on the licensee's fitness to be a licensee.

4. Discussion

4.1 The Complainant has invested her money in a scheme it appears she may not have fully understood.

The rights of subscribers to sell their subscriptions and the conditions for doing so are set out in the

Offeror’s Disclosure Statement and the associated Property Management Deed.

4.2 The Complaints Assessment Committee (the Committee) considers that at this level there is a breakdown in understanding and communication by both parties.

4.3 The Committee further determines that this complaint does not fall within the scope of the Act as it does not fall within the definition of “agency work.” The Committee does not have jurisdiction to deal with this matter.

5. Decision

5.1 The Committee met to consider the complaint and pursuant to section 79(2)(e) of the Act determined to inquire into it.

5.2 After conducting an inquiry into the complaint, pursuant to section 89(1) of the Real Estate Agents Act 2008, the Committee held a hearing on 20 June 2011 with regard to that complaint. In accordance with section 90(1) of the Act, the Committee conducted the hearing on the papers, and pursuant to section 90(2) the Committee’s determination was made on the basis of the written material before it.

5.3 The Committee has determined under section 89(2)(c) of the REAA 2008 to take no further action with regard to the complaint or any issue involved in the complaint.

6. Publication

6.1 One of the Committee’s functions pursuant to section 78(h) of the Act is to publish its decisions.

6.2 Publication gives effect the purpose of the Act of ensuring that the disciplinary process remains transparent, independent and effective. The Committee also regards publication of this decision as desirable for the purposes of setting standards and that it is in the public interest that the decision be published.

6.3 The Committee directs publication of its decision, but omitting the names and identifying details of the complainant (including the address of the property), the licensee and any third parties in the publication of its decision.

6.4 The Authority will publish the Committee’s decision after the period for filing an appeal has ended.

Any application for an order preventing publication must be made to the Real Estate Agents

Disciplinary Tribunal (the Tribunal).

7. Right of Appeal

7.1 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 this notice.

7.2 Appeal is by way of written notice to the Tribunal. You should include a copy of this determination with your Appeal.

7.3 Further information on lodging an appeal is available by referring to the Guide to Lodging an

Appeal at www.justice.govt.nz/tribunals.

Signed

Sue Matehaere-Patten

Chairperson

Complaints Assessment Committee

Real Estate Agents Authority

Date: 11 July 2011