Wright - Complaint No CB7008986 [2013] NZREAA 80 (6 May 2013)

Last Updated: 20 April 2014

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

And

In the Matter of Complaint No: CB7008986

In the Matter of Rachel Wright

Licence Number: 10000442

Decision of Complaints Assessment Committee

Dated this 6t h day of May 2013

Complaints Assessment Committee: CAC20005

Chairperson: Chris Rogers Deputy Chairperson: Stuart Rose Panel Member: Denise Bovaird

Complaints Assessment Committee

Decision on Orders

1. Introduction

1.1 On 23 January 2013 the Committee determined under Section 89 (2) (b) of the Real Estate Agents Act 2008 (the Act) that it had been proved, on the balance of probabilities that Licensee Rachel Wright had engaged in unsatisfactory conduct in terms of section 72 of the Act.

1.2 Parties to the complaint were given the opportunity to make submissions to the Committee on orders.

1.3 On 31 January 2013 the committee received a submission on orders from the Complainant. At the request of the Committee for more information on costs, a further submission was received on 20 March 2013.

1.4 On 12 February 2013 the Committee received a submission on orders from Rachel Wright (the Licensee). At the request of the Committee for more information on costs, a further submission was received on 8 April 2013.

2. Relevant Provisions

2.1 Having made a finding of unsatisfactory conduct against Rachel Wright 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.

2.2 Principles Considered

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:

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

Section 3(1) of the REAA 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 A11 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 discipline 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(1)(g); or make an order of censure (Section 93(1)(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).

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 REAA. 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.

3. Submissions

3.1 The Complainant has requested that the Committee consider making the following orders:

a) that the Licensee tender a written apology to the Complainant

b) that the Licensee and the Agency undergo further training and education

c) that the Licensee contribute to the Complainant’s lawyers bill of $6,185.00

3.2 In a second submission, the Complainant has outlined an agreement reached with the vendor prior to settlement of the property transaction, in which the purchase price for the Property, was reduced by the sum of $25,000 being $22,500 for remedial

work, $1,750 as a contribution by the vendors to legal costs and $750 for the cost of furniture storage.

3.3 The Complainant points out that the legal costs of $6,185.00 included only $300 of charges for work unrelated to settlement of the property transaction and the asbestos issue.

3.4 In response to the Complainant’s submission on orders, the Licensee submits that a written apology would indicate that the supply of misinformation was intentional when it was not. However the Licensee is willing to apologise if ordered to do so and is remorseful over any distress suffered.

3.5 The Licensee maintains that she is now fully aware of what to look for and what to do if there is a hint of a ceiling having asbestos content.

3.6 The Licensee submits that the agreement reached between the parties, whereby $25,000 was deducted from the purchase price as compensation to the Complainant, was in full and final settlement of the issue and it would be inconsistent with the laws of natural justice for additional payments to be ordered.

3.7 The Licensee also submits that part of the agreement reached at the meeting of the parties was a refund to the vendor of $15,000 in fees charged by Property Brokers Limited (the Agency). This payment was to be in full and final settlement of the asbestos issue between the vendor and the Agency.

3.8 In an additional submission the Licensee maintains that the Complainant’s solicitor would have been aware that their fee was likely to be in excess of the $1,750 sum incorporated as legal fee compensation in the settlement agreement.

3.9 The Licensee further submits that correspondence from solicitors acting for both the Complainant and the vendor state that the mediated agreement reached is in full and final settlement of the asbestos issue. The Licensee reiterated that she believes any orders for additional payments would not be consistent with the principals of natural justice

4. Discussion

4.1 On 27 February 2013 the vendor, the Complainant and representatives of the Agency met in mediation to resolve the issue of compensation for misinformation supplied by the Licensee.

4.2 The vendor agreed to accept $25,000 less for the Property as full and final settlement of the

Complainant’s claim for compensation.

4.3 The Agency agreed to refund the vendor $15,000 of the fees charged for the sale of the Property in full and final settlement of any claim the vendor may have against the Agency.

4.4 The figure of $1,750 for legal costs incorporated into the compensation paid to the Complainant by the vendor (by way of a sale price reduction) is clearly separate from any claim the Complainant may make against the Licensee.

4.5 Some degree of culpability has been accepted by the vendor as evidenced by the mediated agreement but significant responsibility lay with the Licensee as a real estate professional to determine the validity of important and fundamental information being passed on to the Complainant.

5. Decision

5.1 The committee finds as follows:

5.2 Having regard to the facts of this case and the finding of unsatisfactory conduct in the Committee’s determination dated 23 January 2013, as well as the submissions on orders made by both parties and the principles of penalty set out in herein, the Committee has determined to make the following orders pursuant to section 93(1) of the Act:

5.3 Licensee Rachel Wright is to be reprimanded under section 93(1)(a) of the Act.

5.4 The Licensee shall, within 20 working days of these orders, pay the sum of $2,900 to the Complainant as part relief of expenses incurred as a consequence of unsatisfactory conduct - under section 93(1)(f)(ii) of the Act.

5.5 Under the provisions of section 93(1)(d) of the Act, the Licensee shall within one month of this order provide written confirmation of enrolment in the following national unit standard courses:

Standard ID 23136 – Demonstrate knowledge of misleading and deceiving conduct and misrepresentation

In addition the Licensee must provide written evidence to the Authority of having completed and passed the course within 12 months of this decision.

The Licensee may choose any appropriate provider of the unit standard course.

5.6 No other orders are considered appropriate.

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), and any third parties in the publication of its decision. The name of the Licensee and the Company she works for should be published.

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

Chris Rogers

Chairperson

Complaints Assessment Committee

Real Estate Agents Authority

Date: 06 May 2013