Carpenter - Complaint No C19762 [2018] NZREAA 89 (11 June 2018)

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Before the Complaints Assessmen	t Committee
Complaint No: In the matter of Part 4 of the R	C19762 eal Estate Agents Act 2008
Licensee 1: Glen Carpente	r (10017481)
Licensee 2 Faye White (2	0028003)

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

1.1. On 2 February 2018 the Complaints Assessment Committee (the Committee) found Glenn Carpenter and Faye White (Licensee 1 and Licensee 2) guilty of unsatisfactory conduct under section 89(2)(b) of the Real Estate Agents Act 2008 (the Act).

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

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:

3.1. We have received written submissions from the Complainant in respect of the Penalty to be imposed.

3.2. The submissions note that the Complainant's concern that a similar situation arise for others dealing with the Licensees in the future. He further notes that he incurred legal costs not only in respect of the original offer he made but also in regard to the complaint. We note

that the complainant's first language is not English and that his lawyer made the complaint to the authority on his behalf. He asked that he be financially compensated for his mental anguish, his lawyer’s costs and expressed that the Licensees should lose their Licenses.

3.4. In these he noted that the issue arose out of a genuine mistake and was not, as the complainant asserts, malicious. He further submitted that he had made efforts to mitigate the position for the Complainant by arranging for a back- up offer to be submitted. He noted that the Agency waived its commission fee to the vendor.

3.6. She submits that she has been open with the Committee that she made an honest mistake.

She notes that she has voluntarily suspended her license. She further notes that the vendor was not charged a commission by the Agency.

4.1. The Committee found that both Licensees had engaged in unsatisfactory conduct falling short of the standard that a reasonable member of the public is entitled to expect from a reasonably competent Licensee. The situation was one in which a multi-offer process should have been put in place and it was not. This disadvantaged the Complainant (whose offer was not presented until it could only be a back-up offer) and the vendor who did not receive all the offers contemporaneously he might have otherwise have had.

4.2. This disadvantage to the vendor was remedied in part by the Agency not charging commission. The Complainant does not receive any benefit from this action.

4.3. The Committee accepts that there is no evidence to support an allegation that the failure to engage in a proper multi offer process was anything other than a genuine mistake. The Committee also accepts that both Licensees acknowledged the error at an early stage and that Licensee 1 made efforts to try to put things right. The Complainant has asked for his legal fees to be repaid and that we make an order compensating him and reflecting “mental damage”.

4.4. An order for compensation as requested by the Complainants is not one we can make. In Quin v Real Estate Agents Authority [2012] NZHC 3557 the High Court held that a Complaints Assessment Committee cannot order compensatory damages under section 93(1)(f) of the Act on a finding of unsatisfactory conduct.

4.5. It is open to the Committee to make an order for costs under s93(1)(i) of the Act but those costs must be limited to any costs or expenses which were specifically incurred in respect of the inquiry, investigation, or hearing by the Committee.

4.6. The Committee has been provided with information about the Complainant’s legal costs which specifically relate to the bringing of the Complaint. These came to a total of $3,259.75 inclusive of GST. The Committee considers that the Complainant should be largely compensated for those costs.

4.7. Removal of a Licensees ability to work, which is what cancellation of a License entails, would be greatly out of proportion in the current situation and is not an option available to the Committee on the findings of unsatisfactory conduct.

4.8. Neither of the Licensees have any record of previous disciplinary findings against them and they are entitled to credit for that.

4.9. The Committee decided that Licensee 1 should be penalised to a degree which reflects his relative seniority to Licensee 2, his responsibility as supervisor, but which also recognises his early remedial actions and his previous clean record. We find that Licensee 1 should be censured and pay the Complainant $2,000. This amount is awarded under s93(1)(i) as payment towards his legal costs incurred in bringing his complaint.

4.10. Regarding Licensee 2, we find she pay the Complainant $1,000. This amount is also awarded under s93(1)(i) as payment towards the Complainants legal costs. This amount reflects the open manner Licensee 2 has acknowledged her mistake and her previous clean record in some 7 years in the industry.

4.11. The fine imposed on Licensee 1 is higher than that imposed on Licensee 2 reflecting that Licensee 1 was in the position of supervisor of Licensee 2 with the greater responsibility that role carries with it.

4.12. 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

4.13. 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.

4.14. 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."

4.15. 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)).

4.16. 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.

4.17. 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:

• protect both the public and the profession itself against persons unfit to practice

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

4.19. 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

“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...”

4.21. 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.

5.1. 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).

6.1. 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.

6.2. 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.

6.3. 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.

(1) A Committee may make 1 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.

(a) a determination that the complaint or allegation be considered by the Disciplinary

(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.

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

(d) would reasonably be regarded by agents of good standing as being unacceptable.

(1) If a Committee makes a determination under section 89(2)(b), the Committee may do 1 or more of the following:

(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;

(e) order the licensee to reduce, cancel, or refund fees charged for work where that work is the subject of the complaint;

(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.

(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—

(b) any other information that the appellant wishes the Tribunal to consider in relation to the appeal.

(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.

New Zealand Real Estate Agents Authority

Carpenter - Complaint No C19762 [2018] NZREAA 89 (11 June 2018)