Luo - Complaint No C01189 [2013] NZREAA 333 (11 November 2013)

Last Updated: 19 October 2014

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

And

In the Matter of Complaint No: C01189

In the Matter of Lei (Nancy) Luo

License Number: 10009278

Decision of Complaints Assessment Committee

Dated this 11th day of November 2013

Complaints Assessment Committee: CAC20008

Chairperson: Graham Rossiter

Deputy Chairperson: Ellen Ryan

Panel Member: Joan Harnett-Kindley

Complaints Assessment Committee

Decision on Orders

1. Background

1.1 The respondent Licensee, Lei (Nancy) Luo, has been found guilty of unsatisfactory conduct, contrary to section 72 of the Real Estate Agents Act 2008 (the Act). This was because she failed to disclose to the Complainant the fact that the Vendor of a Property she was marketing (and selling to the Complainant) was her husband. The only material disclosure of a ‘relationship’ with the Vendor was a statement in the agreement for sale and purchase prepared by her which stated: “the purchasers aware (sic) that the vendor is associate with Barfoot and Thompson.”

1.2 The non-disclosure of the fact that the Vendor of the subject Property was her husband constituted a breach of, more particularly and specifically, section 136(1) of the Act. This provides that a “licensee who carries out real estate agency work in respect of a transaction must disclose in writing to every party to the transaction whether or not the licensee, or any person related to the licensee, may benefit financially from the transaction.” A person is related to a Licensee if (amongst other categories) that person is the “licensee’s spouse.”

2. Relevant Provisions

2.1 Having made a finding of unsatisfactory conduct against Lei Luo, the Complaints Assessment Committee (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 Any determination as to what orders, if any, should be made following, as in this case, a finding of unsatisfactory conduct, must, as a starting point, be in terms of and with reference to the basic objects and purposes of this Committee’s empowering statute, i.e. the Real Estate Agents Act 2008. These are set out in section 3 of the Act and are 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.” Thus, it follows that the Act is all about a) consumer protection and b) the maintenance of industry standards.

3.2 Further to the ‘background’ as stated in paragraphs 1.1 and 1.2 above, the facts and the Committee’s findings are as referred to in our substantive decision with respect to the liability of Ms Luo. Apart from the statement in the agreement for sale and purchase quoted in paragraph 1.1, the Complainant was only told that the Vendor was “known to (Ms Luo’s) agency.” The Complainant inferred from that the Vendor was probably a Developer who had had successive dealings with Barfoot and Thompson.

3.3 The Complainant states in his submission to the Committee that he does “not seek any particular orders to be made against” Ms Luo. He does “not seek nor desire an apology.” The Complainant goes on to say that “perhaps the process has been enough and will cause her (the licensee) to think twice before doing anything similar in the future.”

3.4 There are reasonably lengthy submissions from Ms Luo’s counsel. These include a comprehensive survey of other CAC decisions in which breaches of section 136 of the Act have been found. The point is made that in only one of these other cases was a fine imposed. With respect to the circumstances of this particular case, it is submitted that “there was at least an attempt at written disclosure by Ms Luo, however unclear that disclosure is regarded.”

3.5 Further to paragraph 3.4 above, it is contended by counsel that use of the word “associate(d)” by

Ms Luo is a “not unreasonable attempt at disclosing the fact of relationship, which is what section

136 requires.” In addition, it is drawn to our attention that English is not Ms Luo’s first language and

that fact should be taken into account in judging the wording of the disclosure. A reprimand or censure would, it is argued, be a sufficient order of this Committee.

3.6 The submission of the Complainant that he does not seek any particular order and perhaps the complaint process has been enough is, if we might say so, magnanimous. With respect to the extensive submissions of counsel for Ms Luo relating to other matters, we make the possibly trite observation that a decision as to what orders should be made where there has been a finding of unsatisfactory conduct must turn on the particular facts of each individual case.

3.7 The crucial factor in this case is that the breach of section 136 of the Act was deliberate and calculated. Ms Luo was perfectly well aware of her obligations under this provision. She could have complied with this requirement by simply, in the manner required by the statute, informing the

Complainant that the Vendor was her husband. Bearing in mind that English is not her first language, this would have been the most straightforward way to ensure compliance with the statute rather than using the frankly disingenuous expression, “associate.”

3.8 In these circumstances, a censure and reprimand is just not sufficient to maintain the standards of the industry and protect its consumers (see paragraph 3.1 above). A fine is unavoidable and the Committee is of the view that that should be in the sum of $1,000.00. A fine in this amount is imposed together with a censure and reprimand.

4. Decision

4.1 Lei Luo is:

a) Censured and reprimanded by this Committee for the unsatisfactory conduct determined by this Committee to have been committed by her.

b) Fined the sum of $1,000.00. The fine is to be paid to the Real Estate Agents Authority no later than 20 working days from the date on which this decision is issued.

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 name of the Licensee and the company she works for should be published.

5.4 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.

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: 11 November 2013