Kloppers - Complaint No CA4108242 [2011] NZREAA 393 (2 December 2011)

Last Updated: 15 December 2013

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

And

In the Matter of Complaint No: CA4108242 and CA4108287

In the Matter of Sidney Kloppers and Dahnie Burton

License Number: 10003452 and 10048632 respectively

Decision of Complaints Assessment Committee

Dated this 2nd day of December 2011

Complaints Assessment Committee: CAC10067

Chairperson: Graham Rossiter

Panel Member: Peter McDermott

Complaints Assessment Committee

Decision on Orders

1 Background

1.1 This Complaints Assessment Committee (the Committee) has found that Sidney Kloppers’ and Dahnie Burton’s (the Licensees) advertising of certain so-called ‘baches’ was misleading. It was accordingly determined that there had been a breach of rule 6.4 of the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2009 and unsatisfactory conduct by the Licensees contrary to s.72(a) and s.72(b) of the Real Estate Agents Act 2088 (the Act).

1.2 The Licensees were directed to submit to the Committee, together with any other submissions they would wish to make, a form of corrected advertisement with the misleading elements determined by this Committee removed.

2 Relevant Provisions

2.1 Having made a finding of unsatisfactory conduct against Sidney Kloppers and Dahnie Burton the

Committee must now decide what orders, if any, should be made under section 93 of the Act.

Section 93 provides:

93 Power of Committee to make orders

(1) If a Committee makes a determination under section 89(2)(b), the Committee may do 1 or more of the following:

(a) make an order censuring or reprimanding the licensee;

(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;

(c) order that the licensee apologise to the complainant; (d) order that the licensee undergo training or education;

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

(f) order the licensee:

(i) to rectify, at his or her or its own expense, any error or omission; or

(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.

3 Discussion

3.1 This Committee found in its determination issued on 20 July 2011, that the advertising of the subject properties by the Licensees was misleading, particularly as that related to the use of the word ‘bach’ and the non-disclosure in the relative advertisements of the particular (and possibly somewhat unusual) form of ‘title’ or interest that would be acquired by a purchaser. We should make it clear that this is the final stage of the disciplinary process that has been carried out in dealing with this complaint. This Committee is not prepared to engage in any kind of exercise by way of re-litigating the finding already made that there has been ‘unsatisfactory conduct’ or justifying our determination. Rather, what we are concerned with here is a decision on what orders, if any, should be made to give effect to the Committee’s primary and earlier decision.

3.2 Following on from the foregoing, the submission from the Complainant is basically to the effect that the Committee’s decision was right. Nothing is said about what orders, if any, should be made following that decision. We will, therefore, say no more about what has been heard from the Complainant.

3.3 The response from the Licensees is somewhat more problematic at a number of levels. We are told in a submission from the manager of the Licensees’ principal company (paragraph 2.1) that: “neither of the licensees was given opportunity to be heard during the investigation.” That is a quite surprising submission which is, of course, quite wrong. The Licensees were informed of the complaint and given an opportunity to be heard. They chose to be heard, as is not unusual, by and through their manager. A full and comprehensive submission was received from their manager dated 1 March 2011. The content of that submission was, and has been, fully considered by this Committee. In short, the Licensees have been given an opportunity to be heard and have taken that opportunity. The assertion in paragraph 2.1 of the Licensees’ most recent submission that they “were of the view that the complaint would be dropped” is simply groundless and quite untenable.

3.4 Apart from what has just been mentioned, the submission on behalf of the Licensees with respect to orders is troubling at another level, in that it indicates a complete absence of any insight by the Licensees with respect to their conduct. The central thrust of the submission is that this Committee, in short, got it wrong. We refer here, for example, to paragraph 2.3 of the submission regarding the Committee’s key finding that the use of the word ‘bach’ is misleading. This Committee is told: “this finding is incorrect.” If the Licensees wish to continue in the belief that their advertising is not misleading, that is, we suppose, their prerogative. Where, however, a submission as to orders focuses exclusively on the proposition that this Committee was wrong in its earlier decision, what that means is that there is really nothing of a positive nature that we can take into account to the credit of the Licensees in fixing the penalty to be imposed other than possibly the point, of which we have already been advised by the Real Estate Agents Authority (the Authority), that there is no known adverse disciplinary history of Mr Kloppers and Mrs Burton.

3.5 The Committee’s view is that, as a starting point, Mr Kloppers and Mrs Burton should be censured and reprimanded for their unsatisfactory conduct. This almost, in a case such as this, goes without saying. This is not, however, sufficient. We are convinced that a fine is also called for. The Committee arrives at this view, firstly and perhaps primarily on the basis of, in an objective sense, the nature of the unsatisfactory conduct itself. In this regard, we bear in mind the objectives of our empowering Act (s.3 of the Act) which are the protection of consumers and the promotion of industry standards. Further, but secondarily, we take into account as one factor (as stated above), the complete absence on the part of the Licensees of any insight into their conduct.

3.6 The level of any fine must be appropriate for the particular circumstances of the individual case and not disproportionate. To the extent that it is necessary, a fine should be such as to send a clear

message to the individual licensees and the industry in general that behaviour of the kind which has been found to be contrary to the Act and its principles is not acceptable. In this particular case, although there is no complaint by a purchaser of these dwellings, there is a clear risk of consumers being misled. The maximum fine for an individual licensee is $10,000.00. The Committee’s finding is that an appropriate fine, taking into account all relevant factors, is one in the sum of $3,000.00 for each of the two Licensees.

3.7 The foregoing leaves at large what should be done about the Licensees’ misleading advertising?

This Committee would normally hope and expect that a finding of the kind contained in our decision of 20 July 2011 should be sufficient and would be accepted, as well as, most importantly, acted on. Clearly, this is not the case. The Licensees have made it clear that, not only do they not accept the Committee’s findings, but they will not give effect to them unless compelled to do so. Mr Kloppers and Mrs Burton (and obviously implicitly their principal) were invited to submit a revised form of advertisement. Not only have they not done that but have, through their manager/representative, contended that to modify their advertising (following our finding that this is currently misleading) would somehow breach the Act. It has to be said that this Committee finds that submission frankly astonishing.

3.8 We are loath, in what should ideally be a free and open market, to prescriptively dictate to real estate agents what should be the content of their advertising. For the reasons already given, the Licensees in this particular case unfortunately leave us no option but to do that. Accordingly, we direct that the Licensees’ advertising of these dwellings is to be modified (rectified) in the manner set out below. The Committee would wish to make it clear that the change to the advertising directed is to be permanent and indefinite. It clearly would not be in the Licensees’ interests (or their principal’s), we are sure they will appreciate, for this matter to, at some point in the future, be the subject of further disciplinary process.

4 Decision

4.1 This Committee censures and reprimands Sidney Kloppers and Dahnie Burton for, and with respect, to the unsatisfactory conduct found in the Committee’s determination of 20 July 2011 (s.93(1)(a)).

4.2 Sidney Kloppers and Dahnie Burton are each fined the sum of $3,000.00. Such fine to be paid to the Authority no later than 21 days from and exclusive of the date of issue of this decision as to orders (s.93(1)(g)).

4.3 Any and all further advertising of the dwellings that are the subject of the complaints determined by this Committee are:

a) not to include the word ‘bach’ but,

b) must include the following: “purchasers of these dwellings will occupy them pursuant to a particular form of leasehold interest, details of which can be obtained from the vendor’s agents.” (s.93(1)(f)).

4.4 The Licensees are to, within 10 days from the date of issue of this decision, identify to the Authority the current ‘owners’ of the dwellings that are the subject of the complaints determined by this Committee (i.e. provide their names and addresses). The Authority is directed to then forward to each of those owners a copy of the Committee’s decision of 20 July 2011. The cost of the Authority undertaking that action is to be met by the Licensees (their liability being joint and several) within 7 days of the issue of an invoice by the Authority (s.93(1)(f)).

5 Publication

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

5.2 Publication gives effect to 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.

5.3 The Committee directs publication of its decision, but omitting the names and identifying details of the complainant (including the address of the property), and any third parties in the publication of its decision. The names of the Licensees and the company they work for should be published.

5.4 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).

6 Right of Appeal

6.1 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.

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

6.3 Further information on filing an appeal is available by referring to the Guide to Filing an Appeal at www.justice.govt.nz/tribunals.

Signed

Graham Rossiter

Chairperson

Complaints Assessment Committee

Real Estate Agents Authority

Date: 2 December 2011