Complaint No CB6984632 [2013] NZREAA 192 (18 September 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: CB6984632

In the Matter of John Nam

License Number: 10052544

Decision of Complaints Assessment Committee

Dated this 18th day of September 2013

Complaints Assessment Committee: CAC20002

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

Complaints Assessment Committee

Decision on Orders

1. Background

1.1 By its decision dated 11 June 2013 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 Licensee John Nam of James Law Limited, Auckland 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 the Complainant Licensee Mr. Nam to make any comments or submissions they wished within ten working days from the date of the Committee's determination.

1.4 The Complainant provided a submission dated 5 July 2013 through her Solicitor. In her submission she re-iterates from her complaint that the Licensee:

• Falsely held out that there were major issues of structural soundness and weather tightness at the Property

• Did not advise the Complainant to seek advice about possible concerns at the property but instead used his suspicions to pressure the Complainant into accepting a low price;

• Deliberately took advantage of the Complainant’s absences from New Zealand to have another party to sign significant changes to an agreement;

• Failed to provide an appraisal for the Property

1.5 In relation to penalties The Complainant submits:

• The Licensee and the Agency should be fined the maximum $10,000 and $20,000 respectively.

• The Licensee should be ordered to undergo training for a minimum of six months in light of the serious breaches of his duties to the Complainant.

• The Complainant seeks an apology from the Licensee and a reimbursement of costs incurred.

1.6 The Licensee in response in a submission dated 2 August 2013 requested the Committee to consider the following:

• “There is no sale of the Property and no commission or expenses paid by the Complainant to

repay”;

• “There is no loss to the Complainant stated in the Complainant’s submission”;

• “The Complainant was not misled by the failure to complete a CMA for the Property”;

• “I did not deliberately set out to reduce my services and obligations to the claimant”;

• “There is no indication of systematic failure of process or rules that would require or benefit

from further training”;

• “The Committee finding is unsatisfactory conduct, not misconduct. The failure is at the

bottom end of the scale”;

• “The Complainant did not need to seek legal advice for this part of the process. I do not accept legal costs are appropriate given the majority of the submission is irrelevant to the issues as defined by the decision, and the submissions are unhelpful and inappropriate”;

• “I would accept a censure and fine below $750 as an appropriate penalty”.

1.7 Having satisfied itself that it had completed its inquiry into the complaint, the matter was considered by the Committee on 3 September 2013.

1.6 The hearing was conducted on the papers pursuant to section 90(2) of the Act and the Committee made its determination on the basis of the written material before it.

2. Relevant Provisions

2.1 Having made a finding of unsatisfactory conduct against Mr Nam 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 Complainant has provided in her submission detailed commentary on the background to her complaint in order which, it would appear, is intended to re-litigate her concerns as to the conduct of the Licensee. However it is important to recognise that the purpose of the process being followed by the Committee in seeking submissions from parties involved is not to re-consider the complaint but to determine penalties that should be imposed on the Licensee and to make Orders appropriately.

3.2 The finding of unsatisfactory conduct by the Committee related to the Licensee failing to provide the Complainant with a complete Current Market Appraisal (CMA) which is in direct breach of section 9.5 of the Professional Conduct and Client Care Rules 2009.

3.3 The Committee notes from Mr. Nam submission that although assistance similar to a CMA was given, it was, as he agrees, not sufficient to comply with Rule 9.5.

3.4 The Committee feels that it is appropriate that the Licensee undertakes further training particularly in relation to the Real Estate Agents Act (Professional Conduct and Client Care) Rules.

3.5 It is the Committee’s view that a financial penalty should be imposed on the Licensee to emphasize

the seriousness of its unsatisfactory conduct find

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 11th June

2013, and the established unsatisfactory conduct and functions which the imposing of a penalty is designed to serve, the Committee has determined to make the following orders under section 93(1):

4.3.1 The Committee is imposing on Mr. Nam a fine of $2,000 payable to the Authority within 21 working days of this order.

4.3.2 The Committee censures Mr. Nam.

4.3.3 The Committee orders Mr. Nam to register with the Open Polytechnic courses and attend onsite to complete unit standard 26148: Demonstrate knowledge and use of inspection, appraisal and agency agreements for real estate property. That within one month of this order he provide written confirmation of his enrolment in such a course to the Authority. In addition the Licensee must, within six months, provide written evidence of having completed and passed that course to the Authority (section 93(1)(d));

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: 18th September 2013