Hawke - Complaint No C06785 [2015] NZREAA 187 (9 July 2015)

Last Updated: 25 March 2016

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

And

In the Matter of Complaint No: C06785

In the Matter of Catherine Hawke

License Number: 10008659

Brendan Mason

License Number: 10017534

Decision of Complaints Assessment Committee

Dated this 9th day of July 2015

Complaints Assessment Committee: CAC 406

Chairperson: Paul Biddington Deputy Chairperson: Bernardine Hannan Panel Member: David Bennett

Complaints Assessment Committee

Decision to take no further action

1. The Complaint

1.1. On 11 February 2015 the Real Estate Agents Authority (the Authority) received a complaint against Catherine Hawke (Licensee Hawke) and Brendan Mason (Licensee Mason) from the Maree Wilks (the Complainant).

1.2. Licensee Hawke is a licensed salesperson under the Real Estate Agents Act 2008 (the Act), employed by Mason Realty Limited at the date of the conduct being complained about, but currently working for Progressive Realty Group Limited.

1.3. Licensee Mason is a licensed agent also employed by Mason Realty Limited at the time of the complaint but currently working for Progressive Realty Group Limited.

1.4. The complaint relates to a property situated at 7 Morton Street, Georgetown, Invercargill

9812 (the Property).

1.5. The details of the complaint are that the Complainant claims that the Licensees did not disclose property defects to her prior to her making an offer and entering into a contract to buy the Property. In particular, the Complainant refers to major leaks both on the roof and around the water cylinder. The Complainant also alleges that Licensee Hawke discouraged her from obtaining a builder’s report which may have identified these defects.

1.6. The Complainant says that when she viewed the Property with her daughter, Rose Wilks, she was not made aware of any defects, and was told by Licensee Hawke that the Property was sound and in good condition. The Complainant also claims that she was told by Licensee Hawke that they did not need to spend extra money to pay for a builder’s report.

1.7. The Complainant states the conversation arose when she pointed out to Licensee Hawke that she was worried about increasing her offer and therefore did not have the funds to pay for a builder’s report. The Complainant states she was concerned at not having the Property checked by a builder, however she trusted Licensee Hawke’s judgement and her expertise in the real estate industry.

1.8. This view is support by the Complainant’s daughter Ms. Rose Wilks.

1.9. The Complainant goes on to state that on settlement day she moved into the Property and discovered the water cylinder was leaking into several rooms, and immediately called a plumber. While waiting for the water cylinder to be repaired she also noticed the lounge ceiling was leaking quite profusely into the room.

1.10. The Complainant states the Licensees must have been aware of these leaks as her plumber Mr. Frank Quinn estimated the water cylinder would have been leaking for 6 to 12 months. Further, the Complainant says there was a mark on the ceiling in the lounge where the leak in the roof came through, and this was never pointed out to her by Licensee Hawke. The Complainant says that after she moved in she discovered the drapes in the lounge were

water-stained on the linings, but claims not to have noticed this at the viewings as she could not pull the curtains open due, she thought, to an old railing.

1.11. Further, the Complainant believes she was forced to increase her offer by $15,000.00, after being advised by Licensee Hawke of another offer from an interested buyer.

1.12. The Complainant says that she put an initial offer on the Property of $170,000, and that Licensee Mason informed her she could possibly buy it for this amount as the vendor was very keen to sell. The Complainant says that later in the evening Licensee Mason called into her house and said there was another offer on the Property, and she would have to raise her offer by $15,000.00 to ensure she would buy it. She subsequently had her finance approved and increased her offer. The Complainant says she felt at the time the other buyer was “bogus”.

1.13. The Complainant now concedes that another interested buyer existed however she believes they did not make a written offer as she was led to believe. The Complainant claims she was advised to increase her offer by Licensee Mason on the understanding there was another offer, and not just an interested buyer who did not commit their offer to writing.

1.14. The Complainant also submits that her requests for remedy were ignored. The Complainant claims that upon advising the Licensee Mason of the leak in the lounge, and the leaking water cylinder, she was told that he would sort it for her, but the Licensees have failed to do so. The Complainant also alleges that the Licensee Mason was abusive towards her.

1.15. The Complainant requested a remedy, being: (a) reimbursement of water cylinder;

(b) repairs to ceiling in lounge; (c) new roof for house;

(d) an apology for the abusive phone call and for the delay in rectifying problems to the

Property discovered on possession date.

1.16. The Complainant says that due to the lack of assistance from the Licensees she has now taken this matter to the Disputes Tribunal for resolution.

1.17. The Licensees responded to the complaint against them and deny any breaches of the Act or rules.

1.18. In particular Licensee Mason stated that he was not aware of any defects with the Property, that he had not noticed anything unusual about the Property, and that the vendor had not disclosed any defects to him. Further Licensee Mason stated that even though the vendor was 98 years old at the time of listing, he was a very astute person who lived by himself and was still looking after a high maintenance garden. By the time Licensee Mason went through the disclosure questions with the vendor, the vendor already knew what they meant as it had been discussed with a previous agency who had listed the Property. Licensee Mason explained to the vendor that defects are any leaks or water-tightness issues, including chattels not working. The vendor knew exactly what he was talking about and Licensee Mason claims that if he suspected the vendor was under duress at that time he would have made contact with his solicitor, which he did not.

1.19. Licensee Hawke says she took the Complainant to view the Property in March 2012. She says the Complainant, and her family and friends, made several visits to the Property, spending

quite a lot of time in the house. Licensee Hawke says the Property was forty years old and in its original condition. Licensee Hawke says that during her visits to the Property she did not observe any musty odours and was not alerted to any water-tightness issues. She claims no defects were made known to her by Licensee Mason.

1.20. Licensee Hawke refutes the Complainant’s claims that she told her on several occasions not to obtain a LIM or builders report. She says the Complainant said no to a builder’s report and LIM as shown on the sale and purchase agreement. The Committee notes that the sale and purchase agreement only records ‘no’ to a LIM report, not to a builder’s report as claimed.

1.21. In relation to the claim that there were no other written offers on the Property, Licensee Mason claims Licensee Hawke received an offer for the Property from the Complainant, which he presented to the vendor. Licensee Mason claims that during the negotiations he received a phone call from the vendor advising him of interested buyers, John and Jennifer Miller, who were known to the vendor.

1.22. Licensee Mason says he contacted the Millers, who requested he appraise their property, which he did. The Millers then made an offer of $199,500.00. Licensee Mason advised Licensee Hawke that he had two offers, and asked Licensee Hawke to advise the Complainant of this and to submit her best offer. Licensee Mason says he presented both offers to the vendor who chose the Complainant’s offer of $185,000.00 as it had fewer conditions, which meant he could vacate the Property earlier.

1.23. Licensee Hawke says the Complainant made an initial conditional offer of $170,000, which was $29.500.00 less than the listed price. The offer was rejected. Licensee Hawke says that during the time the offer was made, and before negotiations concluded, she was made aware of another buyer who made a conditional offer of the asking price. Licensee Hawke refutes the claim the offer was from a “bogus” buyer. Licensee Hawke confirms that the vendor accepted the Complainant’s increased offer of $185,000.00.

1.24. In regard to the Complainant’s concerns about the way the complaint was handled by the Licensees, Licensee Mason says when the issues with the Property were brought to his attention by Licensee Hawke, he advised her no effects had been reported to him by the vendor and advised her to seek legal advice from her solicitor. Licensee Mason says he saw the situation to be the vendor’s responsibility and as time passed he assumed the issue had been sorted, until he received a letter from the Complainant’s solicitor on 12 March 2014.

1.25. Licensee Mason is clear that he did not see compensating the Complainant as their responsibly, and he referred the Complainant to the REAA if she was not satisfied with the Licensees conduct. Licensee Mason refutes the accusation he abused the Complainant on the phone and claims he is astonished at the claim.

1.26. Licensee Hawke also refutes this claim, and claims to have told the Complainant that she would get Licensee Mason to address the issue. Licensee Hawke also advised the Complainant to seek compensation through the vender, and claims that it was not her role to sort the matter with the vendor as this was the responsibility of the Complainant’s solicitor. Licensee Hawke says she acted in a professional manner at all times during the marketing of the Property and when she was made aware of the issues raised by the Complainant.

2. What we decided

2.1. On 5 March 2015 the Complaints Assessment Committee (the Committee) considered the complaint and decided to inquire into it.

2.2. On 18 June 2015 the Committee held a hearing on the papers and considered all the information gathered during the inquiry.

2.3. The Committee has decided to take no further action on the complaint.

2.4. This decision was made under section 89(2)(c) of the Act. The decision was also made with reference to the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2009 as the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012 did not take effect until 8 April 2013. Standards of Professional Conduct rules 6.2, 6.4 and 6.5.

3. Our reasons for the decision

3.1. The Committee concluded:

a) The Committee is not persuaded that the Licensees have misled the Complainant, nor withheld information that should by law or in fairness have been provided to her. Further the Committee is not persuaded that the Licensees failed to disclose any hidden or underlying defects known to them or defects a reasonably competent licensee would have been aware of.

b) The Committee is not persuaded that the Licensees unfairly pressured the Complainant into making an offer on the Property by falsely stating to the Complainant that there was another offer on the Property.

c) The Committee is not persuaded that the Licensees have failed to act reasonably in

addressing the Complainant’s complaint.

Reason One

3.2. The Complainant claims that the Licensees did not disclose property defects to her, and also alleges that Licensee Hawke discouraged her from obtaining a builder’s report which may have identified these defects. The Committee carefully considered the Complainant’s evidence as outlined above, along with the Licensees submissions and evidence from other interested parties.

3.3. The Licensees claim that they were not aware of any defects with the Property, that they had not noticed anything unusual about the Property, and that the vendor had not disclosed any defects to them. Licensee Hawke denies that she either encouraged or told the Complainant not to get a building report completed.

3.4. The Committee has also considered the evidence of Mr. John Miller, an unsuccessful perspective buyer who also visited the Property. When Mr. Miller inquired about the Property the vendor did not mention the roof. Further, the vendor told Mr. Miller that he was

98 years old which Mr. Miller found very hard to believe, he was amazed at how mentally alert and “on to it” he was. Mr. Miller was very impressed with the vendor’s honestly and openness regarding the Property.

3.5. Mr. M claims that had he been successful he would have considered his purchase a bargain, and he had been prepared to replace the roof if necessary though when he looked at the Property he saw no signs of leaking. Mr. M considered that Licensee Mason was very helpful and answered all his questions.

3.6. The Committee also considered the evidence of Mr. David Dunlevey, of the Public Trust, who confirmed Licensee Mason’s assessment of the vendor as having the capacity to sign documents and who viewed the vendor “as a pretty determined sort of a character.” Mr. B. W. Crofts, a roof painter, Mr. Tony Green, a roofing contractor, and Mr. Frank Quinn, a plumber and drain layer, all confirmed that work was necessary on the roof and water cylinder as advised by the Complainant.

3.7. The onus of proof rests on the Complainant to substantiate the allegations made - Hodgson v Arnold [2011] NZREADT 03. The Complainant alleges that the Licensees did not disclose the leaking roof and water cylinder and that the Licensees knew of or ought to have known of these leaks. The Committee has considered the evidence of the Complainant, the Licensees, and other witnesses in this matter. The Committee accepts that both the roof and water cylinder required work once the Complainant took possession of the Property; however that is not the question before the Tribunal. Whereas the Committee accepts that the Complainant believes that the Licensees knew or ought to have known of these issues, and should have told her about them, there is little evidence to support this claim. The onus of proof rests on the Complainant to substantiate this allegation, and having reference to the documents and also to the explanation provided by the licensees, the Committee accepts that the onus has not been discharged by the Complainant in this instance.

3.8. Further the Tribunal is not satisfied that Licensee Hawke advised the Complainant not to obtain a builder’s report. In fact the evidence suggests the opposite. The issue of a builder’s report was clearly discussed between Licensee Hawke and the Complainant. The Committee is firmly of the view that the issue of builder’s reports should be raised with prospective purchasers. Whether or not the Complainant wished to proceed with obtaining and paying for such a report is ultimately a matter for her. This part of the complaint is dismissed.

Reason Two

3.9. The Complainant believes she was misled into making a higher offer for the Property by being told that there was another interested purchaser who had submitted an offer.

3.10. The Committee has considered the evidence of the Complainant, the Licensees, and Mr.

Miller. Mr. Miller has confirmed to the Committee that he made an offer in writing for the Property. This offer was not accepted. Mr. Miller has expressed some disappointment in not securing the Property claiming that had he done so he would have considered his purchase a bargain.

3.11. The evidence is clear that Mr. and Mrs. Miller did make a written offer to purchase the

Property, which was rejected by the vendor in favour of the Complainant’s offer.

3.12. The Committee accepts the very clear evidence before it that the Licensees did not mislead the Complainant into increasing her offer by misinforming her of the true situation regarding these competing offers. The Committee is persuaded that the Complainant was kept fully informed of the competing offers. In all likelihood, had the Complainant not increased her offer, she was unlikely to have secured the Property.

Reason Three

3.13. The Complainant believes that her attempts to obtain a remedy form the Licensees were ignored and that this lack of response amounts to unsatisfactory conduct.

3.14. The Committee has carefully reviewed the evidence of the parties in this matter. The Committee is satisfied that the Licensees did not act in an unprofessional manner in addressing the Complainant’s concerns. On the evidence the Licensees were entitled to resist providing compensation until liability, if any, was established against them. Further the Licensees provided the correct advice to the Complainant that is to seek the advice of either her solicitor or the REAA.

3.15. This part of the complaint is also not proved.

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. Refer to Appendix section 111.

4.2. For further information on filing an appeal, read Guide to Filing an Appeal at Ministry of

Justice-Tribunals (www.justice.govt.nz/tribunals).

Publication

4.3. At the Committee’s discretion, the decision will be published with the names or identifying details of the Complainant (including the address of the Property), the Licensee and any third parties.

4.4. The Authority will publish the Committee’s decision after the period for filing an appeal has ended, unless the Tribunal receives an application for an order preventing publication. The Authority will not publish the Committee’s decision until the Tribunal has made a decision on the application.

4.5. 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 industry standards and that is in the public interest.

Signed

Bernardine Hannan

Deputy Chairperson

For Complaints Assessment Committee 406

Real Estate Agents Authority

Date: 9 July 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 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.