Brodie - Complaint No C07910 [2015] NZREAA 373 (22 December 2015)

Last Updated: 8 October 2016

Before the Complaints Assessment Committee

Complaint No: C07910

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

The Licensee Michael Brodie (10008751)

Decision on orders

22nd of December 2015

Members of Complaints Assessment Committee: CAC407

Deputy Chairperson: Marjorie Noble

Panel Member: Rex Hadley

Complaints Assessment Committee

Decision on orders

1. Background

1.1. On 4 November 2015 the Complaints Assessment Committee (the Committee) found Michael Brodie (the Licensee) guilty of unsatisfactory conduct under section 89(2)(b) of the Real Estate Agents Act 2008 (the Act).

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

Committee on orders.

1.3. The Complainant said she has been left with an apartment which will take close to $60,000 to fix. The Complainant has also to date spent $4,445.50 on legal fees to try to resolve the situation.

1.4. The Complainant says she has had to pay interest on a loan for a year and has lost the rental income she intended to receive from the Property. The problems with the apartment have caused her much distress and she now has a court case ahead of her.

1.5. The Licensee says he deeply regrets the distress and expense the matter has caused the

Complainant.

1.6. The Licensee accepts the Committee’s finding of Unsatisfactory Conduct and that he breached Rules 6.4 and 10.7. He offered his sincere unreserved apologies to the Complainant and his wishes that the matter can be resolved for the Complainant without further delay.

2. Orders

Having made a finding of unsatisfactory conduct against the Licensee, the Committee decided to make the following orders pursuant to s93 of the Act:

a) Order that the Licensee apologise to the Complainant in writing by Friday, 29 January

2016. The letter of apology has to be approved by the Committee before it gets released to the Complainant;

b) Order that the Licensee undergo training or education by completing unit standard

23136 Demonstrate knowledge of misleading and deceiving conduct and misrepresentation within 3 months from the date of this decision (22 March 2016);

c) Order the Licensee to reimburse to the Complainant legal fees charged for work concerning the non-compliant renovations to the apartment to the amount of $3,000 by Friday, 29 January 2016;

d) Order the Licensee to pay to the Authority a fine of $2,000 by Friday, 29 January 2016.

3. Our reasons

3.1. The Committee agreed the action of the Licensee in his failure to properly manage the

disclosure of the outstanding Code Compliance for the undisclosed renovations, have caused the Complainant to find herself in a very undesirable situation.

3.2. The Complainant has been forced to address this matter through the courts in her attempts to rectify the matter. Had the Licensee fully appreciated the seriousness of the disclosure that was made to him by the vendors of the Property and acted appropriately at the time, he could have ensured the Complainant did not find herself in this vulnerable position.

3.3. The Committee accepts the Licensee has recognised (in hindsight) the consequences of his conduct, however the Committee deemed it appropriate that the Licensee directly apologise to the Complainant in the form of a written apology. This may be a small comfort to the Complainant to know the Licensee recognises the position she is now in.

3.4. The Committee agreed that the Licensee would benefit from completing unit standard 23136 demonstrate knowledge of misleading and deceiving conduct and misrepresentation.

3.5. The Complainant has required substantial legal advice to assist her. The Committee considered it appropriate that the Licensee reimburse to the Complainant $3,000 to assist towards the costs of the legal fees which stands at $4,445.50 at the time of the Unsatisfactory Conduct decision. Had the Licensee spoken with both solicitors to the transaction instead of telling the Complainant the Code Compliance was imminent and inferring this was a minor matter, the Complainant could have received appropriate legal advice. The Committee considered the legal fees to be a direct cost due to the Licensee’s conduct and therefore appropriate that the Licensee reimburse the Complainant a portion of these.

3.6. Finally, the Committee deemed it also appropriate that the Licensee pay a fine to the Authority of $2,000, which reflects the seriousness of his conduct and would have been substantially higher had the Committee not made the order to reimburse legal fees to the Complainant.

Principles considered

3.7. 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.

3.8. 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.

Promoting and protecting the interests of consumers and the public

3.9. Section 3(1) of the Act 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."

3.10. 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)).

Maintaining professional standards

3.11. 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.

3.12. 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.
  

3.13. In the Committee's view, maintaining professional standards is also a function of the disciplinary processes under the Act.

Punishment

3.14. 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)).

3.15. 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...”

Where appropriate, rehabilitation of the professional must be considered

3.16. 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. 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 (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 ).

5. Publication

5.1. 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 for which they work or worked for at the time of the conduct.

5.2. 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.

5.3. 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

Marjorie Noble

Date: 22 December 2015

Appendix: 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.