Complaint No CB7153625 [2013] NZREAA 167 (26 August 2013)

Last Updated: 1 June 2014

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

And

In the Matter of Complaint No: CB7153625

In the Matter of Licensee

License Number: XXXXXXXX

Decision of Complaints Assessment Committee

Dated this 26th day of August 2013

Complaints Assessment Committee: CAC20008

Chairperson: Graham Rossiter

Deputy Chairperson: Ellen Ryan

Panel Member: Joan Harnett-Kindley

Complaints Assessment Committee

Decision to take no further action

1. The Complaint

1.1 The Complainant has complained to the Real Estate Agents Authority (the Authority) about the conduct of The Licensee. The Licensee is licensed under the Real Estate Agents Act 2008 (the Act). She holds a salesperson’s licence and is working for The Agency.

1.2 The Complainant engaged the services of the Licensee to sell her property. The Licensee submitted an offer from her (the Licensee’s) father. That offer was accepted but conditional on finance. The condition was not fulfilled and the contract was cancelled. The Complainant alleges that the offer from the Licensee’s father was not “genuine.” She claims to have suffered loss as a result of this.

2. Material Facts

2.1 On 16 August 2012, the Complainant listed her property with the Licensee. The agency agreement preserved the Complainant’s right to sell privately. On 7 September, the Licensee submitted an offer from her father. This was for the sum of $240,000.00 but subject to finance. Her relationship with the prospective Purchaser was disclosed to the Complainant.

2.2 On the same day, i.e. 7 September, the Complainant received a private offer for $220,000.00.

This was increased to $230,000.00 but the Complainant accepted the offer from the Licensee’s

father.

2.3 The Licensee’s father was unable to raise the necessary finance. He therefore cancelled the contract he had signed. The Complainant offered to extend the time for the raising of finance but this offer was declined.

3. Relevant Provisions

3.1 The relevant law is the definitions of ‘unsatisfactory conduct’ and ‘misconduct’ in, respectively

sections 72 and 73 of the Real Estate Agents Act 2008.

3.2 Section 72 - 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.

3.3 Section 73 – 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.

3.4 Also requiring possible consideration are rules 6.1 and 6.4 of the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2009. Rule 6.1 provide that an “agent must comply with the fiduciary obligations to his or her client arising as an agent.” Rule 6.4 states that a “licensee must not mislead a customer or client...”

4. Discussion

4.1 The Complainant in this case is, in substance and effect, alleging a conspiracy between the Licensee and her father for the construction of a sham offer to enable the Licensee to extend the life of the agency contract. This is a serious allegation which, if it were true, would constitute not

‘unsatisfactory conduct’ but ‘misconduct’ pursuant to section 73 of the Act. The Complaint Assessment Committee’s (the Committee) assessment of the complaint has to, necessarily, be commensurate with the gravity of the allegation.

4.2 There is quite simply no evidence to support the Complainant’s assertion that the offer from the Licensee’s father was not genuine. The Licensee has submitted a letter from her father explaining the circumstances in which the offer was made by him and why it could not be confirmed as unconditional. In simple terms, he was unable, despite his best endeavours, to raise the required finance. We have, in our view, no reason to not accept the veracity of this statement.

4.3 Further, in considering an allegation as serious as the subject of this complaint, while accepting that the construction of a sham contract/offer is possible; we ask ourselves how probable or improbable is the scenario contended by the Complainant? We consider that it is unlikely in the extreme. Would an agent go to the extraordinary trouble of putting together a bogus ‘contract’ for the purpose of extracting the, frankly, marginal advantage of continuing her agency with respect to the property? This Committee would need some quite cogent evidence to find that this is what the Licensee has done. The Complainant, at the material time, made a business decision to accept the offer submitted by the Licensee’s father as opposed to the ‘private’ offer that had been received. That was the Complainant’s choice. There is no basis to blame the Licensee for the fact that the conditional contract entered into was not able to be confirmed.

4.4 As stated above, there is no evidence whatsoever to support this complaint. It should not have been made without something to sustain what is alleged. The Licensee is entitled to the finding that she has done nothing wrong and we make that determination.

5. Decision

5.1 After conducting an inquiry into the complaint, pursuant to section 89(1) of the Real Estate Agents Act 2008 (the Act), the Committee held a hearing 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.

5.2 The Committee has determined under section 89(2)(c) of the Act 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 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.

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 Notice with your Appeal.

7.3 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: 26 August 2013