Podmore - Complaint No C13449 [2016] NZREAA 212 (7 October 2016)

Last Updated: 16 April 2017

Before the Complaints Assessment Committee

Complaint No: C13449

I n the matter of

Part 4 of the Real Estate Agents Act 2008

Licensee: Terence (Terry) Podmore (10016194)

Licensee: George Boyes & Company Limited (10022486)

Decision on Orders

7 October 2016

Members of Complaints Assessment Committee: CAC409

Chairperson: Jane Ross

Deputy Chairperson: Peter Brock

Panel Member: Josephine O'Donnell

Complaints Assessment Committee

Decision on orders

1. Background

1.1. On 21 July 2016 the Complaints Assessment Committee (the Committee) found Licensee Podmore and Licensee George Boyes & Company Limited (the Licensees) guilty of unsatisfactory conduct under section 89(2)(b) of the Real Estate Agents Act 2008 (the Act).

1.2. The findings were consequent on a CAC initiated com plaint.

1.3. The 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 make the following orders pursuant to s93 of the Act:

Licensee Podmore

a) Make an order reprimanding the Licensee.

b) Order the Licensee to pay to the Authority a fine of $1,000.00 within 21 working days of the date of this decision.

Licensee George Boyes & Company Limited

a) Make an order reprimanding the Licensee.

b) Order the Licensee to pay to the Authority a fine of $2,000.00 within 21 working days of the date of this decision.

3. Submissions

3.1. Licensee Podmore submits:

a) He has had lengthy experience in the real estate industry calling in excess of 900 property auctions and he has been responsible for training ma ny hundreds of new salespersons.

b) This decision questions his “... ability and desire to continue in the roles of Auctioneering and managing salespeople on a day to day basis...” He has retired from his role with Licensee George Boyes & Company Limited but will continue in a consulting role in the industry.

c) He does not have any submission on what specific orders should be made.

3.2. Mr. A, who describes himself as Principal/Director of L J Hooker Hamilton, advises on behalf of Licensee George Boyes & Co Limited that it will be making no submissions “... just waiting for the next stage before appealing ”.

4. Our reasons

The findings of unsatisfactory conduct

4.1. Whilst dealing with a complaint against a salesperson licensee (Licensee X) employed by Licensee George Boyes & Company Limited (complaint C10549) the Committee initiated a complaint against the Licensees.

Licensee Podmore

4.2. The finding of unsatisfactory conduct against Licensee Podmore related to the way he dealt with a non-consented exterior stair and his supervision of Licensee X.

4.3. The factual findings underlying the finding of unsatisfactory conduct in relation to the non-

consented exterior stair and supervision were;

a) Licensee X was engaged in his first auction and Licensee Podmore was aware he needed a more significant level of support then others in the sales team.

b) Licensee X provided verbal advice to the complainant purchaser in C10549 that the exterior stair was non-consented.

c) A number of other prospective purchasers had signed a consent document acknowledging advice received about the non-consented exterior stair.

d) There was no follow-up written advice to the complainant purchaser (about the non- consented exterior stair) and he did not sign the consent document othe r prospective purchasers signed.

e) There was no exclusion of the exterior stair from the vendor warranties in the ASP and the vendor was not advised to include an exclusion or acknowledgement or to take legal advice from his lawyer about the issue.

4.4. The Committee found unsatisfactory conduct against Licensee Podmore because he was hands-on involved in the transaction and he did not undertake the actions that Licensee X failed to undertake and he did not adeq uately supervise Licensee X and ensure adequate follow-up by him.

4.5. As a consequence, the vendor was exposed to a risk of being held to the warranty at clause

8.25 of the ASP.

Licensee George Boyes & Company Limited

4.6. The finding of unsatisfactory conduct against Licensee George Boyes & Company Limited related to the way it supervised Licensee X.

4.7. The Committee took into account that Licensee X was embarking on his first auction and was having problems saving his emails and using his employer’s email system.

Orders Licensee Podmore

4.8. Not every error or mistake by a licensee will justify a finding of unsatisfactory conduct. The Committee considered in the circumstances of this case a finding of unsatisfactory conduct was justified even though it accepts the conduct is low end unsatisfactory conduct. It considered the finding justified because of the risk posed to the vendor client of being held to

the warranty in the ASP.

4.9. The Committee notes Licensee Podmore h as no prior disciplinary findings against him and acknowledges what he says about having called in excess of 900 auctions and having recruited and trained many new salespersons in the industry.

4.10. The Committee would like to have seen an acknowledgement of f ault and such an acknowledgement may have resulted in a reduced fine, but the absence of such acknowledgement has not resulted in an increased fine.

4.11. Due to the close connection between this complaint and C 10549 involving Licensee X, the Committee is conscious of the need for there to be consistency in the way it deals with Licensee Podmore. Licensee X received a reprimand and was not fined. In delivering what would be considered a lenient response in that case it took into account his lack of experience, the fact he was engaging his first auction and the difficulties he was experiencing using his employer’s email system and that he did not consider he was adequately supported.

4.12. Because Licensee Podmore was very experienced, the Committee considers for the purpose of orders he must be treated differently from Licensee X. Although as already stated this case involves low end unsatisfactory conduct, the Committee considers a reprimand and fine of

$1000 is appropriate.

4.13. One of the purposes of disciplinary proceedings is to maintain professional standards. As part of that a finding of unsatisfactory conduct has an educative role for both the licensee and the profession.

4.14. Although it is a matter for Licensee Podmore , the Committee does not consider its finding of unsatisfactory conduct justifies his decision to retire from auctioneering and managing salespersons on a day-to-day basis. Its expectation is that he will learn from this experience and move on.

Orders Licensee George Boyes & Company Limited

4.15. The Committee is disappointed Licensee George Boyes & Company Limited did not make any submissions on orders and responded to the finding by threatening an appeal. An acknowledgement of fault or an indication of genuine remo rse is mitigation which can be taken into account when making a decision on orders (which include an element of punishment).

4.16. In his response to this investigation, Licensee Podmore described an error in the way information was entered into the Agency sys tem when a listing was loaded whereby listing authority comments about the non-consented stair did not come through onto the system, and implied this may have had a role to play in the conduct which is the basis of this complaint and complaint C10549. He advised this had been corrected. The Committee does not know if this issue was actually relevant to what happened but it does consider the fact Licensee George Boyes & Company Limited took a step to remedy a perceived fault in the way it did things, as a re sult of this complaint, as a positive thing and it has taken that into account in in its decision on orders (and notwithstanding the silence of Licensee George Boyes & Company Limited).

4.17. Matters of particular importance to the Committee when making this de cision on orders are the fact that Licensee X was embarking on his first auction and was clearly struggling with the

office email system. He also complained of a lack of support and what has happened in this case is probably indicative of that.

4.18. The comments by the Committee about consistency made above apply equal ly to Licensee George Boyes & Company Limited. Additionally, the Committee has taken into account the differing maximum fines available to it. Pursuant to section 93 of the act the maximum fine for an individual is $10,000 and for a company is $20,000.

4.19. The Committee also notes Licensee George Boyes & Co Limited has no previous disciplinary findings against it.

4.20. In all the circumstances, the Committee considers the appropriate response to the conduct of

George Boyes & Company Limited is a reprimand and a fine of $2000.

5. Principles considered

5.1. 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.

5.2. 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.

Promoting and protecting the interests of consumers and the public

5.3. 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."

5.4. 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) ).

Maintaining professional standards

5.5. This function has been recognised in professional disciplinary proceedings involving other professions (for example, in medical disciplinary proceedings: Taylor v The General Medical Council1; and in disciplinary proceedings involving valuers: Dentice v The Valuers Registration Board2.

5.6. Although different professions use different descriptions of the nature of the unprofessional

1 (1990) 2 A11 ER 263

2 (1992) 1 NZLR 720

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 practi ce.

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

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

Punishment

5.8. 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 Tribunal3).

5.9. 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 importa nt 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

5.10. 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.

6. Your right to appeal

6.1. 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 Monday, 7 November 2016 (section 111).

6.2. For further information on filing an appeal, re ad Guide to Filing an Appeal at Mi n is try o f

J u s ti ce -Tri b un als ( w w w.j u stice . gov t. nz / trib u nal s).

3 Hi gh Court, Auckl a nd, CIV 2007 -404-1818 La ng J 13 Augus t 2007.

7. Publication

7.1. 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 whi ch they work or worked for at the time of the conduct.

7.2. 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.

7.3. 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

Peter Brock

Date: 10 October 2016

Appendix: Relevant provisions

The Real Estate Agents Act 2008 provides:

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.

72 Unsatisfactory conduct

For the purposes of this Act, a licensee is guilty of unsatisfactory conduct if the licen see 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.

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.

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.