Carkeek - Complaint No CB6918689 [2012] NZREAA 324 (21 December 2012)

Last Updated: 15 February 2014

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

And

In the Matter of Complaint No: CB6918689

In the Matter of Steve Carkeek

License Number: 10017495

Decision of Complaints Assessment Committee

Dated this 21st day of December 2012

Complaints Assessment Committee: CAC20002

Chairperson: Patrick Waite Deputy Chairperson: Deidre McNabb Panel Member: Barrie Barnes

Complaints Assessment Committee

Decision on Orders

1. Background

1.1 By its decision dated 09 November 2012 the Complaints Assessment Committee (the Committee) made a determination under section 89(2)(b) of the Real Estate Agents Act 2008 (the Act) that the Mr. Steve Carkeek (Licensee 2) has engaged in unsatisfactory conduct as that term is defined in section 72 of the Act.

1.2 Having made a determination under section 89(2) (b) the Committee may make one or more of the orders set out in section 93 of the Act.

1.3 The Committee invited Licensee 2 to make any comments or submissions he wished within ten working days from the date of the Committee's determination.

1.4 A submission was received from Licensee 2 dated 16 November 2012. He acknowledges that a sale was made without a listing agreement and that ‘although it was office procedure that all contracts were to be checked by myself (as Agent Licensee) this particular contract was not shown to me until it had settled and the commission accounted for.”

1.5 In its determination the Committee viewed with some real concern that Licensee 1 and others were paid commission for the sale of the property which is in contravention of section 126: An agent is not entitled to any commission or expenses from a client for or in connection with any real estate agency work carried out by the agent for the client unless-(a) the work is performed under a written agency agreement signed by or for or on behalf of –(i) the client; and (ii) the agent. Licensee 2, whilst not disputing this, points out that the vendor of the property ‘was and still is, only to happy to pay a commission and I believe so was the complainant originally for a job well done.

2. Relevant Provisions

2.1 Having made a finding of unsatisfactory conduct against Steve Carkeek 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 The issue for the Committee in its earlier consideration of this complaint was the lack of overview undertaken by Licensee 2 of Licensee 1. The Committee would have assumed that Licensee 2 would have undertaken a review of all listings under his supervision. On the admission of Licensee 2 that did not occur. The Committee would have thought that at the least Licensee 2, once a sale and purchase agreement had been prepared would have worked through with Licensee 1 that everything was in order and in doing so would have found that no Listing Agreement was held. The Committee questions as to on what basis was the Commission calculated as that would have surely instigated a reference back to a listing agreement and in that process it would have been discovered that no such document existed. From a technical perspective the lack of a listing agreement should have put in jeopardy the charging of commission for the sale of the property.

3.2 The Committee does acknowledge that Licensee 2 was not responsible for the supervision of Licensee 1 when the property at the centre of the complaint was listed for sale. However the property was sold after the Licensee took over the position of agent licensee and assumed the subsequent responsibility for Licensee 1.

3.3 Licensee 2 has offered no defense to the fact that a sale was made without a listing agreement and that whilst all contracts were normally checked by him, the contract at the centre of the complaint was not shown to him until it had settled and the commission was accounted for.

3.4 In his submission Licensee 2 asks that the Authority take into account his exemplary record of sixteen

years in real estate and acknowledge that in a busy and stressful industry, genuine mistakes can and do occur. He asks for leniency in setting a penalty. In addition he explains that the Professionals office has since closed down and he is no longer employed as a supervising agent licensee or sales manager. He now works only as a salesperson for another company.

4. Decision

Principles considered

4.1 The Committee, when determining whether or not to make an order under section 93(1), has also had regard to the functions which the imposition of a penalty usually must serve in professional disciplinary proceedings. They include:

a. Promoting and protecting the interests of consumers and the public generally

Section 3(1) of the Act sets out the purpose of the legislation. The principal purpose of the 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." One of the ways in which the Act states it achieves this purpose is by providing accountability through an independent, transparent and effective disciplinary process (section 3 (2)).

b. Maintenance of professional standards

This function has been recognized in professional disciplinary proceedings involving other

professions (for example, in medical disciplinary proceedings; Taylor v The General Medical Council [1990] 2 All ER 263; and in disciplinary proceedings involving valuers; Dentice v The Valuers Registration Board [1992] 1 NZLR 720). In the Committee's view this function is also applicable in the disciplinary processes under the REAA.

c. Punishment

The Committee accepts that a penalty in a professional disciplinary case is primarily about the maintenance of standards and the protection of the public. However in the Committee's view there is also an element of punishment - indicated by the power the Committee has to impose a fine (section 93(l) (g); or make an order of censure (section 93(l) (a)). The element of punishment has been discussed in the context of other professional disciplinary proceedings (see Patel v Dentists Disciplinary Tribunal (High Court, Auckland, CIV 2007-404-

1818 Lang J 13 August 2007, where the Court said that disciplinary proceedings inevitably involve issues of deterrence, and penalties are designed in part to deter both the offender and others in the profession from offending in a like manner in the future.)

d. Where appropriate, rehabilitation of the professional must be considered

The Committee regards its power to make an order requiring a licensee to undergo training or education as indicative of this function applying in the context of professional disciplinary processes under the Act.

4.2 The Committee acknowledges that when making an order under section 93, the order/s made must be proportionate to the offending and to the range of available orders.

4 3 Having regard to the facts of this case as recorded in the Committee’s determination dated 09

November 2012, and the established unsatisfactory conduct and functions which the imposing of a penalty is designed to serve and recognizing that Mr. Carkeek is no longer in a position as an Agency Licensee the Committee has determined to make the following orders under section 93(1):

4.3.1 The Committee is imposing on Mr. Carkeek a fine of $500 payable to the Authority within 21 working days of this order.

4.3.2 The Committee orders that Mr. Carkeek be censured.

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 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 Authority will publish the Committee’s decision after the period for filing an appeal has ended unless an application for an order preventing publication has been made to the Real Estate Agents Disciplinary Tribunal (Tribunal). Such an application can only be made as part of an appeal to that Tribunal. In order to ensure publication of the decision does not take place it is important that you serve a copy of your application on the Authority. Publication of the decision will not take place until the Tribunal has made a decision on the application.

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

Patrick Waite

Chairperson

Complaints Assessment Committee

Real Estate Agents Authority

Date: 21 December 2012