Complaint No C28859 [2019] NZREAA 102 (20 August 2019)

Last Updated: 29 November 2019

Before the Complaints Assessment Committee

Complaint No: C28859

In the Matter of	Part 4 of the Real Estate Agents Act 2008
And
In the Matter of	the Licensee (XXXXXXXX)

Decision of Complaints Assessment Committee

Decision on Orders

20 August 2019

Complaints Assessment Committee: CAC 520

Chairperson: Bernardine Hannan

Deputy Chairperson: Peter Brock

Panel Member: Craig Edwards

Complaints Assessment Committee

Decision on orders

1. Decision on orders

1.1. On 22 June 2019 the Complaints Assessment Committee (the Committee) found the Licensee guilty of unsatisfactory conduct under section 89(2)(b) of the Act.

1.2. In the decision the Committee concluded:

(a) The Licensee failed to provide a written appraisal as required by rule 10.2 at the time the agency agreement was entered into.

(b) The other aspects of the complaint were not upheld.

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

Committee on orders.

1.4. The Complainant in his submission requested that:

(a) The Licensee be ordered to make his business available for inspection

(b) The complaint and results of the inspection be published

(c) An order be made censuring the Licensee

1.5. The Licensee, in his submission, disagreed with the decision of the Committee and continues to deny that he ever entered into any “Marketing Employment Authority (vendor/agency sales agreement)” with the Complainants. The Licensee, however again admits no market analysis was ever prepared and that putting the Property up for sale by tender and marketing options were discussed.

1.6. The Licensee does not suggest any appropriate penalty.

2. Orders

2.1. Having made a finding of unsatisfactory conduct against the Licensees, the Committee decided to order that:

a) The Licensee is censured pursuant to section 93(1)(a).

3. Our reasons

3.1. The Committee understands the Licensee does not accept its finding that he did offer the Complainants an Agency Agreement without providing a written appraisal. The Complainants say they accepted this offer to market and sell the Property by return mail but never received a written appraisal. This finding is clearly outlined in paragraph 3.18 to 3.20 of the Committee order dated 22 July 2019 and is not restated here.

3.2. In reaching this finding the Committee took account of the condition of the property, the difficulty the parties had in communication particularly given the Complainants’ residence

overseas and the difficulties the Licensee had in obtaining comparative property values. However as stated in paragraph 3.20 of the same order, the Act and the Rules allow for such difficulties by providing Licensees with the option in such circumstances of providing vendors with written advice that they are unable to provide an accurate or indeed any price indication as no directly comparable or semi-comparable sales data exists. The unsatisfactory conduct finding is based on the Licensee’s failure to do so in this instance.

3.3. The Committee has carefully considered the Complainants submission as to penalty. The Committee accepts a censure is warranted in this instance given the Licensee’s continual refusal to reconsider his position in relation to the application of Rule 10.2

3.4. However, the Committee is not persuaded the conduct warrants it exercising its jurisdiction under s93 of the Act to order the Licensee to make his business available for inspection or to take advice in relation to management of the Agency. The Agency was not the subject of this complaint and there is no evidence before the Committee that the Agency is not meeting its obligations under the Act.

3.5. The Committee has considered whether a fine is justified in this instance. Whereas the Committee accepts the Complainants believe they have suffered loss through the Licensee’s management of their property, there is no evidence before the Committee that the Licensee’s failure to state in writing to the Complainants that he was unable to provide an accurate appraisal due to the condition of the Property prior to renovation and the lack of directly comparable or semi-comparable sales data has led to any loss.

3.6. The Committee accepts completing the appraisal in this instance was difficult, but for the reasons outlined in the order the Committee cannot overlook the obligation imposed by Rule

10.2, however it is persuaded, on the particular facts of this complaint, that this omission was minor and has not resulted in any loss to the Licensee’s client or other adverse outcome and therefore has determined that no fine or further penalty is warranted in this instance.

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 orders 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 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."

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 Real Estate Agents Act 2008.

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. What happens next

Your right to appeal

4.1. If you are affected by this decision of the Committee, the right to appeal is set out in section

111. You may appeal in writing to the Real Estate Agents Disciplinary Tribunal (the Tribunal) within 20 working days after the date notice is given 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. The Tribunal has a discretion to accept a late appeal filed within 60 working days after the date notice is given of this decision, but only if it is satisfied that exceptional circumstances prevented the appeal from being made in time.

4.2. For further information on filing an appeal, read Gu id e to Fi lin g a n Ap p ea l on the Real Estate

Agents Disciplinary Tribunal website ( https:/ / www. justi ce. gov t. nz/ tri bunal s/ real -estate -

agents/ ).

Publication

4.3. The Committee directs publication of its decision. The decision will be published without the names or identifying details of the Complainant or Licensee (including the address of the Property), and any third parties.

4.4. 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

Bernardine Hannan

Chairperson

For Complaints Assessment Committee 520

Real Estate Agents Authority

Date: 20 August 2015

Appendix 1: Relevant provisions

The Real Estate Agents Act 2008 provides:

89 Power of Committee to determine complaint or allegation

(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.

(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.

(2) 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 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

(c) 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 1 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.

The relevant provisions from the from the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012 are:

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