De Jong - Complaint No C05797 [2015] NZREAA 170 (24 June 2015)

Last Updated: 8 March 2016

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

And

In the Matter of Complaint No: C05797

In the Matter of Rosemary De Jong

Licence Number: 10005587

Adam Heazlewood

Licence Number: 10052969

Decision of Complaints Assessment Committee

Dated this 24th day of June 2015

Complaints Assessment Committee: CAC304

Chairperson: Chris Rogers

Deputy Chairperson: Stuart Rose

Panel Member: Sandy Gill

Complaints Assessment Committee

Decision on Orders

1. Background

1.1 On 26 March 2015 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 Rosemary De Jong and Adam Heazlewood had engaged in unsatisfactory conduct in terms of section 72 of the Act. Terms used below follow the same definitions as in the Decision.

1.2 Parties to the complaint were given the opportunity to attend mediation to resolve the issue and then the opportunity to make submissions to the Committee on orders. The parties were unable to reach agreement at mediation

1.3 On 14 April 2015 the Committee received a submission on orders from the Complainants.

1.4 On 4 May 2015 the Committee received a submission on orders from the Licensees’ lawyers.

2. Relevant Provisions

2.1 Real Estate Agents Act 2008

Section 93 provides:

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.

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 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). 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 In the submissions on penalty the Complainants have made the following points:

(a) They say that they are disappointed that the Authority has not taken the complaint more seriously.

(b) They say that the Committee’s report failed to mention that they cannot advertise the Property in the same manner as it was presented to them, meaning that buyers wishing to send their children to a nearby school are removed from being potential buyers. They say that buying a house is the largest financial decision the people make, as this was for them,

and the lack of empathy from the Licensees’ agency was alarming and left them feeling simply a number and a commission for the month.

(c) The purchase the Property was an important decision for their family’s future with regards to schooling of their children. They were led to believe the Property fulfilled their needs based on the advertising on print, on the Billboard and as spoken by the agent. They had looked at another property with the agent of in the school zone they knew it was important. Some of the statements made by the Licensees’ lawyers in disputing this are incorrect, unjustified and completely unprofessional.

(d) The initial response from Bayley’s to the complaint was disturbing to say the least.

Eventually once we engaged their lawyer they took it more seriously and offered to sell the Property for no fees and rear bass basis for all reasonable cost this outcome would have been simple if this offered from the start rather than the response received. Because of this we have no trust in based was in the sale about largest asset.

(b) In section 4.5 of the Committee’s decision they say that Bayley’s defence of their error is that we are lying and these comments are emotionally hurtful and simply unjustified.

(c) This case is simple. They have been led into the purchase of a house that is not fit for the purpose it was bought for because of incorrect advertising. The have sought mediation but Bayley’s refused to take part.

(d) They are therefore seeking a cash settlement for the full costs involved in selling their house including agent’s commission, relocation, costs and lawyers’ costs including those involved in the case to date.

3.2 The Licensee’s solicitors made detailed submissions which we summarise as follows:

(a) They say that the finding of unsatisfactory conduct, publication of the decision, and in order for payment of costs incurred by the Complainants in relation to the investigation of the complaint is sufficient penalty given the circumstances of this complaint.

(b) They say that the Licensee’s conduct fell at the lower end of the spectrum of unsatisfactory conduct and the Committee should take into account that the Licensees through their agency have made a very reasonable offer of settlement which is now been rejected by the Complainants.

4. Discussion

4.1 We have reviewed the parties’ submissions carefully. As a committee we have taken the complaint very seriously and empathise with the position the Complainants find themselves in. As a committee we have to work within the legal framework of the Real Estate Agents Act 2008, as previously explained in our decision this places limits on the legal remedies available to us.

4.2 In clause 4.18 and 4.19 of our decision we said, “The parties have previously been advised of our powers under section 93 of the Act to make orders. The parties should be aware of the High Court decision in Quinn V Real Estate Agents Authority (2012) NZHC 3557 which involved misrepresentations regarding the boundary and access.

4.3 The High Court held that Complaints Assessment Committees cannot order compensatory damages under section 93 (1)(f) for Unsatisfactory Conduct. Only the Tribunal can order a licensee to pay

compensatory damages up to $100,000, and for misconduct only.”

4.4 We agree with the Licensee’s submissions that the Complainant’s are yet to show any quantified loss in that they have not confirmed that their children are unable to attend a nearby school and have not produced any evidence to show that their Property is worth any less because it is not located within the school zone.

4.5 The Complainants have taken legal advice and as result should be aware that notwithstanding their comments to us the Authority is not there only avenue to seek a resolution and that our role is primarily designed around the maintaining of standards and public confidence in the real estate industry.

4.6 As part of this decision we have reviewed recent decisions and penalties imposed in similar cases heard by the Tribunal. While we believe that this error by the Licensees should not have occurred and could easily have been prevented if adequate checking had occurred, we do view the Licensees’ conduct at the lower end of unsatisfactory conduct. We also take into account what we believe was a very fair offer of compensation made by the Licensees and the agency to the Complainants. We acknowledge that it was entirely for the Complainants to decide whether or not to accept that offer but note that it did appear on its face to be a good way of remedying the situation for them.

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 26 March 2015, as well as the submissions on orders made by both parties and the principles of penalty set out herein, the Committee has determined to make the following orders pursuant to section 93(1) of the Act:

5.3 The Committee order that Ms Rosemary De Jong pay a contribution to the legal fees and expenses incurred by the Complainants in relation to this complaint of $1,250 - under section 93 (1)(i) of the Act within 21 working days of this order.

5.4 The Committee is imposing on Ms Rosemary De Jong a fine of $1000 - under section 93 (1)(g)

payable to the Authority within 21 working days of this order.

5.5 The Committee order that Mr Adam Heazlewood pay a contribution to the legal fees and expenses incurred by the Complainants in relation to this complaint of $1,250 - under section 93 (1)(i) of the Act within 21 working days of this order.

5.6 The Committee is imposing on Mr Adam Heazlewood a fine of $1000 - under section 93 (1)(g)

payable to the Authority within 21 working days of this order.

5.7 No other orders were considered appropriate or necessary.

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 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 Licensees and the Company that they work 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

Stuart Rose

Deputy Chairperson

Complaints Assessment Committee 304

Real Estate Agents Authority

Date: 24 June 2015