Complaint No C03646 [2013] NZREAA 307 (23 December 2013)

Last Updated: 17 September 2014

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

And

In the Matter of Complaint No: C03646

In the Matter of Licensee

Licence Number: XXXXXXXX

Decision of Complaints Assessment Committee

Dated this 23rd day of December 2013

Complaints Assessment Committee: CAC20008

Chairperson: Graham Rossiter

Deputy Chairperson: Ellen Ryan

Complaints Assessment Committee

Decision to take no further action

1. The Complaint

1.1 This determination is in relation to, and arises from, a complaint to this Complaints Assessment Committee (the Committee) by the Real Estate Agents Authority (the Authority). The complaint is against the Licensee and relates to the actions of a Mr H and his conduct, allegedly, in acting as a real estate agent without a licence issued by the Authority. It is in substance contended (we here summarise and paraphrase) that the Licensee facilitated or aided and abetted the actions of Mr H.

1.2 The Licensee is licensed under the Real Estate Agents Act 2008 (the Act). He holds an agent’s

licence and is working for the Agency. He also trades as Agency X.

2. Material Facts

2.1 In July 2013, it came to the attention of the Authority that a Mr H had engaged in negotiations with a Mr R with respect to a possible property ‘trade’ transaction. An agreement for sale and purchase was prepared by Mr H. The agreement has the name of the Licensee as the salesperson and Agency X as the acting agent.

2.2 Mr H is currently a suspended real estate licensee. He is not lawfully able to act in the industry in any capacity.

3. Relevant Provisions

3.1 The relevant law is the definition of ‘misconduct’ in section 73 of the Real Estate Agents Act

2008.

3.2 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.

3.3 This Committee has approached this matter on the basis that if there is determined to be

sufficient evidence that the Licensee did wilfully ‘aid and abet’ Mr H to act as a real estate agent when he was not lawfully authorised to do so, that would arguably be misconduct that may justify the laying of a charge with the Real Estate Agents Disciplinary Tribunal (the Tribunal).

3.4 Also of relevance here is rule 6.3 of the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012. Rule 6.3 provides that “a licensee must not engage in any conduct likely to bring the industry into disrepute.”

4. Discussion

4.1 The Committee’s consideration of this matter proceeds on the basis or assumption that, at the material time, Mr H was, in substance, acting as a real estate salesperson when he had no lawful authority to do so. Whether that was the case is not for this Committee to substantively determine or rule on. It is suffice to say, as we do, that the evidence placed before us certainly suggests that such a contention appears to have substance.

4.2 Further to paragraph 4.1 above, Mr H, earlier this year, prepared two sale and purchase agreements for Mr R involving the swapping of a residential property for a commercial property. As stated above, an important point in this regard is that the Licensee’s name was on the agreement documents.

4.3 The key issues of fact here relate to the nature of the association or relationship between the Licensee and Mr H. This is because if, as the Authority considers may have been the case, Mr H acted as a salesperson in this transaction on the instructions of the Licensee, or Mr H acted, with the Licensee’s knowledge, in breach of the Act and the Licensee failed to report this, then the Licensee is arguably guilty of misconduct.

4.4 Mr R, Mr H and the Licensee have all been interviewed by the investigator and transcripts of the relative interviews have been placed before us. What Mr H refers to is a somewhat loose (our paraphrasing) arrangement with the Licensee, whereby the former would refer to the latter

‘leads’ for prospective property deals. With respect to the particular transaction with Mr R, he asked the Licensee about ‘putting the sale and purchase agreement together.’ The Licensee said: “well, draw one up but it will have to be put into (his) name.” Mr H then says that he and the Licensee “sort of just went from there basically.”

4.5 Mr H stated to the investigator that he used agreement for sale and purchase forms that he already had in his possession from his previous time as a licensed real estate agent. In this regard, the investigator points out and draws to our attention that the agreement forms Mr H used in this transaction were not in existence at the time he left the real estate firm he was last employed at.

4.6 The Licensee was interviewed by the investigator twice. He variously characterises Mr H as (again we paraphrase) a source of referral and, at other stages in the interviews, as an assistant, i.e. someone “only assisting” the Licensee with his real estate business. In the interview with the Licensee of 20 November 2013 he was asked with reference to a possible ‘trade’ deal, would Mr H “be remunerated for that deal?” The Licensee’s answer was: “What would happen is he would. It would all be in my name. If it ever settled, then I would discuss with him a reward, so he would get something.”

4.7 In the earlier interview of 8 October 2013 the Licensee said that the agreement with Mr H was to

the effect that “until he renewed his licence, he would need to make it absolutely clear that he was only assisting (the Licensee) and that all agreements and queries were through (the Licensee) at Agency X.” It is contended that no agreement forms were ever supplied to Mr H. Further, Mr H did not make it clear to Mr R that he, Mr H, was the Licensee’s ‘assistant.’ In giving out a business card, implying that he was active as a licensee, Mr H was acting in breach of his agreement with the Licensee.

4.8 Further to the above summarising of the interviews, the Committee takes judicial notice of the fact that very many real estate licensees will engage ‘assistants’ who provide and carry out administrative support, may well help (within limits) in necessary liaising with clients and customers and even act as a source of referrals. Such persons may not, however, at any rate lawfully, act as a salesperson and may certainly not prepare sales agreements. It would appear that Mr H did do these things. If he did so at the Licensee’s instigation or with his knowledge or authority, then the Licensee has a problem. In this regard, Mr H says, in effect, that the Licensee told him to prepare the agreement documents with Mr R, while the Licensee denies this.

4.9 The Licensee’s defence to the complaint, in essence, is that Mr H acted, in his dealings with Mr R without his knowledge, at least as far as the specifics of his actions are concerned, and certainly without his authority. Bluntly, the Licensee appears interested, at this stage, in putting, in colloquial terms, as much distance as possible between himself and Mr H.

4.10 Coming back to the key issue in this case, we have to ask ourselves whether there is sufficient evidence of the Licensee facilitating, instigating or even turning a ‘blind eye’ to Mr H’s actions such as to warrant the laying of a charge of misconduct. On balance, and possibly not by a substantial margin, we are compelled to answer this question in the negative, i.e. our conclusion is that there is just not enough evidence to justify such action. It would be right to say that the nature of the Licensee’s association and relationship with Mr H does attract a certain suspicion. Suspicion, however, is not enough in itself to justify any further action against the Licensee with respect to this particular matter and no further action will be taken.

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 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 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.

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: 23 December 2013