Lonergan - Complaint No C04708 [2015] NZREAA 381 (27 August 2015)

Last Updated: 27 January 2017

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

And

In the Matter of Complaint No: C04708

In the Matter of Clive Lonergan

License Number: 10003710

Decision of Complaints Assessment Committee

Dated this 27th day of August 2015

Complaints Assessment Committee: CAC 403

Chairperson: Susan D'Ath Deputy Chairperson: Amelia Bardsley Panel Member: Sandra Wilson

Complaints Assessment Committee

Decision on orders

1. Decision on orders

1.1 On 25 June 2015 the Complaints Assessment Committee (the Committee) found Clive

Lonergan (the Licensee) guilty of unsatisfactory conduct under section 89(2)(b) of the Act.

1.2 The Complainant and Licensee 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 Licensee, the Committee decided to order that:

(a) the Licensee is censured;

(b) the Licensee is ordered to apologise in writing to the Complainant, such apology to

first be forwarded to the Authority for its approval within 21 working days from the date of the decision;

(c) the Licensee is to pay a fine of $4,000.00 the Authority within 21 working days from the date of the decision pursuant to section 93(1)(g);

(d) the Licensee is to pay to the Complainant the sum of $515.60 being a reimbursement of some costs she has incurred.

2.2 Our finding and this order are be published with the inclusion of the Licensee's name.

3. Our reasons

3.1 We have reached our decision as to the appropriate penalty in this matter with the assistance of written submissions on penalty from both parties.

3.2 The Complainant submits that the Licensee should be reprimanded, apologise in writing, undergo retraining, be fined the maximum allowable, make his business records available for inspection and be ordered to pay costs.

3.3 The Licensee submits that a written apology should be the only order which the Committee should make. He requests name suppression.

3.4 In the opening paragraph of her submissions the Complainant describes the upheld complaints as some of the more serious to have come before the Authority in recent years, and as being “certainly more serious than cases in which charges have been laid before the Disciplinary Tribunal”. That is not how the Committee views this case. We have found the Licensee in breaching Rules 9.5, 5.1, 10.2 and 10.6, engaged in unsatisfactory conduct not misconduct. In his submission, the Licensee has drawn our attention to a case heard by the Tribunal involving forgery (REAA v Dodd [2013] NZREADT 40), and we note others have involved physical assault (REAA v McGowan [2014] NZREADT 92) and mortgage fraud (REAA v Azimi [2014] NZREADT 69). In our opinion these, and other matters heard by the Tribunal, involve conduct which is far more serious than that of the Licensee in this case.

3.5 We consider that the conduct of the Licensee warrants a fine being imposed. The maximum fine we can impose on an individual is $10,000.00. Any fine must reflect the level of seriousness of the offending. There were the mitigating factors related to the particular circumstances of this case, outlined in paragraph 4.4 of our decision dated 25 June 2015. In addition, the Licensee is entitled to some credit for his admissions in respect of the conduct. Against this we must consider the level of the conduct and the harm to the Complainant. We accept that there could have been far more serious consequences for the Complainant had the unauthorised access to her Property been by a person with malice towards her. In the event this was not the case, balancing these factors we consider that a fine of $4,000.00 is appropriate given the level of the offending. We order that the Licensee pay to the Authority a fine of $4,000.00.

3.6 The Licensee is an experienced real estate salesperson. We do not think that there is any benefit to him or the public in ordering additional training beyond the standard annual continuing education required to maintain his license. We would hope that he has learned a lesson about the importance of maintaining strict security for properties entrusted to his care.

3.7 Nor do we consider an order that his business be inspected appropriate. That is an order usually directed towards an agency or its management rather than a salesperson. The Licensee does not run the Agency he is engaged by. There has been no evidence placed before us which would suggest that the way that the Agency is managed, contributed to the Licensee’s failings on this occasion.

3.8 In a professional context censure is of itself a serious penalty. Censure is not an automatic imposition on a finding of unsatisfactory conduct, rather it is an expression that the conduct of a Licensee was such that reasonable members of the industry consider it wrong and worthy of formal disciplinary sanction. A censure remains on the public record. We consider that on this occasion the Licensee's breaches of the Professional Conduct and Client Care Rules are sufficiently serious as to warrant a censure.

3.9 We have ordered that costs be reimbursed to the Complainant. The Complainant was put to costs, which when added up total $515.60. We think it appropriate that she be reimbursed for these expenses and order accordingly. She has made submissions about psychological harm the events caused her. There is no evidence before us to support this submission and in any event the Act does not allow for compensation to be paid for such harm even if proven.

3.10 The Committee has given the question of suppression of the Licensee’s name a great deal of consideration. The Licensee submits that we should take into account that he is a resident of a small community in the Town and that the complaint arose from a unique situation involving visitors. The Complainant submits that the Licensee should be identified and disputes his description of the Town as a tightly knit community, saying it is a suburb of the City like any other.

3.11 We do agree that the Town is to some extent different from other City suburbs, being a community comprising transient holiday makers and bach owners as well as permanent residents. We believe that the interests of the public and those of other real estate agents who live and work in the Town should be taken into account. The Licensee’s actions in allowing unauthorised people access to the Property, had the potential to lead to a very serious outcome. It is unfair for others in the real estate industry in such a small community to face speculation as to who was responsible.

3.12 Furthermore, this is not the first occasion on which a finding has been made against the Licensee. On 23 October 2013, he was censured by a Complaints Assessment Committee. Accordingly we order that our finding and order be published with the inclusion of the Licensee’s name.

4. Principles considered

4.1 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.

4.2 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. Promoting and protecting the interests of consumers and the public

4.3 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."

4.4 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. Maintaining professional standards

4.5 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).

4.6 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 practice 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.
  

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

c. Punishment

4.8 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).

4.9 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 appropriate, rehabilitation of the professional must be considered

4.10 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.

5. What happens next

Your right to appeal

5.1 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).

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

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

Publication

5.3 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.

5.4 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

Susan D'Ath

Chairperson

For Complaints Assessment Committee 403

Real Estate Agents Authority

Date: 27 August 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.

The relevant provisions from the from the Real Estate Agents Act (Professional Conduct and Client

Care) Rules 2012 are:

Rule 5.1 A licensee must exercise skill, care, competence, and diligence at all times when carrying out real estate agency work.

Rule 9.5 A licensee must take due care to—

(a) ensure the security of land and every business in respect of which the licensee is carrying out real estate agency work; and

(b) avoid risks of damage that may arise from customers, or clients that are not the owner of the land or business, accessing the land or business.

Rule 10.2 An appraisal of land or a business must—

(a) be provided in writing to a client by a licensee; and

(b) realistically reflect current market conditions; and

(c) be supported by comparable information on sales of similar land in similar locations or businesses.

Rule 10.6 Before a prospective client signs an agency agreement, a licensee must explain to the prospective client and set out in writing—

(a) the conditions under which commission must be paid and how commission is calculated, including an estimated cost (actual $ amount) of commission payable by the client, based on the appraisal provided under rule 10.2;

(b) when the agency agreement ends;

(c) how the land or business will be marketed and advertised, including any

additional expenses that such advertising and marketing will incur:

(d) that the client is not obliged to agree to the additional expenses referred to in rule 10.6(c):

(e) that further information on agency agreements and contractual documents is available from the Authority and how to access this information.