Sullivan - Complaint No C04468 [2015] NZREAA 145 (3 June 2015)

Last Updated: 22 February 2016

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

And

In the Matter of Complaint No: C04468

In the Matter of Andrew Sullivan

License Number: 20011695

Grenadier Real Estate Limited

License Number: 10023102

Decision of Complaints Assessment Committee

Dated this 3rd day of June 2015

Complaints Assessment Committee: CAC302

Chairperson: Alison Wallis

Deputy Chairperson: Sue Matehaere-Patten

Panel Member: Deborah Clapshaw

Complaints Assessment Committee

Decision on orders

1. Decision on orders

1.1. On 17 December 2014 the Complaints Assessment Committee (the Committee) found Andrew Sullivan (Licensee Sullivan) and Grenadier Real Estate Limited (Grenadier) guilty of unsatisfactory conduct under section 89(2)(b) of the Act.

1.2. The Complainant and Licensees were given the opportunity to make submissions to the

Committee on orders.

2. Orders

2.1. Having made a finding of unsatisfactory conduct against the Licensees, the Committee decided to order that:

2.1.1 Licensee Sullivan pays a fine of $500.00 to the Authority within 21 working days from

the date of the decision.

2.1.2. Grenadier pays a fine of $1000.00 to the Authority within 21 working days from the date of the decision.

3. Our reasons

3.1. The penalty submissions from the Complainant to some extent focus on the substance of the complaint, rather than on the penalty sought by the Complainant. However, it is clear that compensation is sought. The Committee reiterates its comments in the Unsatisfactory Conduct Decision (the Decision) that compensation is not within the Committee’s powers. There is also a suggestion in the Complainant’s submissions that commission should not have been earned.

3.2. The Complainant’s submissions, comment on the significant strain placed on the Complainant and the stress caused by delay in, and timing of, the release of the Decision. The Committee can reassure the Complainant that any delay in the Decision was unintentional and the date of release was the first date on which it was available.

3.3. Submissions on orders for Grenadier were submitted by Counsel.

3.4. Licensee Sullivan has made written submissions on his own behalf. He believes that he acted in good faith throughout, and has suffered enough because of the fact that the Committee’s finding of unsatisfactory conduct. He submits that he should not suffer financially as a result of the decision. The Committee has taken these submissions into account but has imposed a small fine, which it considers appropriate in the circumstances.

3.5. The Committee agrees with Grenadier that the mere fact of a breach of the Rules having occurred does not result in a finding of a breach of s50 of the Act. That was not the case here however.

3.6. The lack of supervision is at the heart of the situation and the finding of unsatisfactory conduct. The submissions for the Licensee also canvass in general terms, that Grenadier takes its obligations to supervise and manage very seriously, and have detailed policies and procedures as well as in house training in place. The issue here, however, is specifically about the supervision processes at the auction, as set out in the Decision.

3.7. Grenadier’s submissions suggest that Licensee Sullivan “did not in fact adhere to the high standards which Grenadier requires of all salespersons and which is implemented in training from day one with its salespersons”. The Committee has acknowledged his breach as an individual licensee salesperson in the Decision.

3.8. There remains an issue with supervision however. The Committee notes that Grenadier accepts that some alteration to its processes is indicated here, and that it will ensure that a senior person is in attendance at auctions where new salespeople are involved, which is an appropriate response to the Decision.

Principles considered

3.9. When determining whether or not to make an order under Section 93(1), the Committee 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))

b. maintaining professional standards

c. punishing offences

d. rehabilitating the professional

3.10. 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.

a. P rom oting and protecting the interests o f co nsum ers and t he public

3.11. 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."

3.12. 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. M aintaining pro fessio nal standards

3.13. This function has been recognised 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).

3.14. Although different professions use different descriptions of the nature of the unprofessional or incompetent conduct that will attract disciplinary charges, there is a common thread of scope and purpose. The aim is to enforce a high standard of propriety and professional conduct. Professions seek to:

• make sure that no person unfitted because of his or her conduct is allowed to practise

the profession in question

• protect both the public and the profession itself against persons unfit to practice

• enable the profession or calling, as a body, to ensure that the conduct of members conforms to the standards generally expected of them
  

3.15. In the Committee's view, maintaining professional standards is also a function of the disciplinary processes under the Real Estate Agents Act 2008.

c. P unishm ent

3.16. The Committee accepts that a penalty in a professional discipline case is primarily about maintaining standards and protecting 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).

3.17. At paragraph [27]-[28], the judge said:

“Such penalties may be appropriate because disciplinary proceedings inevitably involve issues of deterrence. They are designed in part to deter both the offender and others in the profession from offending in a like manner in the future. I therefore propose to proceed on the basis that, although the protection of the public is a very important consideration, nevertheless the issues of punishment and deterrence must also be taken into account in selecting the appropriate penalty to be imposed...”

d. Where appro priate, rehabilitatio n o f the pro fessio nal m ust be co nsidered

3.18. The Committee regards its power to make an order requiring a Licensee to undergo training or education (Section 93(1)(d)) as indicating that rehabilitation is a function of professional disciplinary processes under the Act.

4. What happens next

Your right to appeal

4.1. If you are affected by this decision of the Committee, you may appeal in writing to the Real Estate Agents Disciplinary Tribunal (the Tribunal) within 20 working days after the date of this decision. Your appeal must include a copy of this decision and any other information you wish the Tribunal to consider in relation to the appeal (Section 111).

4.2. For further information on filing an appeal, read Guide to Filing an Appeal at M inistry o f

Justice-Tribunals ( ww w.justice . go v t.nz/ tribunals ).

Publication

4.3. The Committee directs publication of its decision. The decision will be published without the names or identifying details of the Complainant (including the address of the Property), and any third parties. The decision will state the name of the Licensee and the Agency they work

for or worked for at the time of the conduct.

4.4. Publishing the Committee’s decision supports the purpose of the Act by ensuring that the disciplinary process remains transparent, independent and effective. The Committee also considers that publishing this decision helps to set standards and that is in the public interest.

Signed

Alison Wallis

Chairperson

For Complaints Assessment Committee 302

Real Estate Agents Authority

Date: 3 June 2015

Appendix 1: Relevant provisions

The Real Estate Agents Act 2008 provides:

Section 89 Power of Committee to determine complaint or allegation

(1) A Committee may make one or more of the determinations described in subsection (2) after both inquiring into a complaint or allegation and conducting a hearing with regard to that complaint or allegation.

(2) The determinations that the Committee may make are as follows:

(a) a determination that the complaint or allegation be considered by the

Disciplinary Tribunal:

(b) a determination that it has been proved, on the balance of probabilities, that the licensee has engaged in unsatisfactory conduct:

(c) a determination that the Committee take no further action with regard to the complaint or allegation or any issue involved in the complaint or allegation.

(3) Nothing in this section limits the power of the Committee to make, at any time, a decision under section 80 with regard to a complaint.

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.

Section 93 Power of Committee to make orders

(1) If a Committee makes a determination under section 89(2)(b), the Committee may do one 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.

Section 111 Appeal to Tribunal against determination by Committee

(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 the notice given under section 81 or 94.

(2) The appeal is by way of written notice to the Tribunal of the appellant's intention to appeal, accompanied by—

(a) a copy of the notice given to the person under section 81 or 94; and

(b) any other information that the appellant wishes the Tribunal to consider in relation to the appeal.

(3) The appeal is by way of rehearing.

(4) After considering the appeal, the Tribunal may confirm, reverse, or modify the

determination of the Committee.

(5) If the Tribunal reverses or modifies a determination of the Committee, it may exercise any of the powers that the Committee could have exercised.