Complaint No C21107 [2019] NZREAA 164 (30 July 2019)

Last Updated: 30 June 2020

Before the Complaints Assessment Committee

Complaint No: C21107

In the matter of

Part 4 of the Real Estate Agents Act 2008

The Agency: Agency (xxxxxxxx)

Decision to take no further action

30 July 2019

Members of Complaints Assessment Committee: CAC413

Chairperson: Garry Chapman

Panel Member: Barbara Mackenzie

Complaints Assessment Committee

Decision to take no further action

1. The Complaint

1.1. On 8 August 2017 the Real Estate Agents Authority (the Authority) received a complaint against another licensee (the Licensee) and Safari Real Estate Limited (the Agency) from the Complainants.

1.2. The Licensee is a licensed Salesperson and the Agency is a licensed Company Agent under the Real Estate Agents Act 2008 (the Act). At the time of conduct the Licensee was engaged by the Agency.

1.3. The complaint relates to the sale and purchase of a property (the Property). The Complainants were the purchasers of the Property. The Licensee was the listing and selling salesperson as well as the vendor. The Agency was responsible for the supervision of the Licensee. The Licensee is subject to a separate disciplinary proceeding.

1.4. The complaint is that the Agency failed to adequately supervise the Licensee.

1.5. The Complainants did not request a specific remedy.

1.6. The Agency responded to the complaint against it.

1.7. The Agency commented that at the time the Agency did not have a policy preventing a vendor agent from continuing as sole agent in selling their own house. The Agency now has a policy prohibiting salespersons from being involved in the marketing of their own properties.

2. What we decided

2.1. On 2 October 2017 the Complaints Assessment Committee (the Committee) considered the complaint and decided to inquire into it under section 79(2)(e) of the Act.

2.2. On 22 July 2019 the Committee held a hearing on the papers and considered all the information that had been gathered during the inquiry.

2.3. The Committee has decided to take no further action on the complaint.

2.4. This decision was made under section 89(2)(c) of the Act.

3. Our reasons for the decision

3.1. The Committee concluded there is insufficient evidence of a lack of supervision measured against the standards at the time of conduct.

Supervision standards at the time of conduct

3.2. The conduct alleged took place prior to the 2008 Act coming into force on 17 November

2009. Section 172 of Act therefore applies. The Tribunal have held on a number of occasions, in cases where a defendant was licensed or approved under the Real Estate Agents Act 1976 (the 1976 Act) at the time of the conduct alleged, and where the defendant has not been

dealt with under the 1976 Act in respect of that conduct, section 172 creates the following three step process:1

(a) Step 1: could the defendant have been complained about or charged under the

1976 Act in respect of the conduct?

(b) Step 2: if so, does the conduct amount to unsatisfactory conduct or misconduct under the 2008 Act?

(c) Step 3: if so, only orders which could have been made against the defendant under the 1976 Act in respect of the conduct may be made.

At the time of the alleged conduct, the Agency was an approved agent under the 1976 Act and the Agency was not dealt with under the 1976 Act in respect of the conduct in issue. Accordingly, a complaint could have been made against the Agency. Therefore Step 1 is satisfied.

3.3. Pursuant to section 70 of the 1976 Act, professional conduct rules were made by the Real

Estate Institute of New Zealand Inc (the REINZ Rules). These included a Code of Ethics (Part

13). The REINZ Rules remained in effect until 17 November 2009, when the Real Estate

Agents Act (Professional Conduct and Client Care) Rules 2009 came into effect. The 2009

Rules remained in effect until 8 April 2013, when the Rules came into effect. Therefore, the applicable regime to assess this complaint is the 1976 Act and the REINZ Rules.

3.4. Notwithstanding that a complaint could have been made against the Agency under the 1976

Act and the REINZ Rules there is little against which to assess the standard of supervision required of the Agency at the relevant time. Supervision requirements have been developed and refined considerably in recent years, but were not so developed before that, and certainly not when the 1976 Act was in force. The purpose of the supervisory provisions under the 2008 Act is markedly different from that under the 1976 Act. There has been a shift away from a requirement for personal supervision through physical attendance at approved premises to a wider concept of direction and control, the adequacy of which is referenced by results. For that reason, we find Step 2 is not satisfied and accordingly there was no unsatisfactory conduct.

4. 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/ ).

1 See, for example, CAC v Dodd [2011] NZREADT 01 at [65] to [67].

5. Publication

5.1. At the Committee’s discretion, the decision will be published without the names or identifying details of the Complainant (including the address of the Property), the Licensee and any third parties.

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 industry standards and that is in the public interest.

Signed

Garry Chapman

Date: 30 July 2019

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.

(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.

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.