Complaint No C28397 [2019] NZREAA 68 (21 May 2019)

Last Updated: 28 November 2019

Before the Complaints Assessment Committee

Complaint No: C28397

In the matter of

Part 4 of the Real Estate Agents Act 2008

and

Licensee 2: Licensee 2

Decision to take no further action

21 May 2019

Members of Complaints Assessment Committee: CAC519

Chairperson: Jane Ross

Deputy Chairperson: Sarah Eyre

Panel Member: Maria McElwee

Complaints Assessment Committee

Decision to take no further action

1. The Complaint

1.1. On 2 November 2018 the Real Estate Agents Authority (the Authority) received a complaint against Licensee 1 and Licensee 2 from the Complainants.

1.2. Licensee 1 and Licensee 2 (the Licensees) are licensed Agents under the Real Estate Agents Act

2008 (the Act).

1.3. Licensee 1 is an Agent at the Agency. Licensee 2 is also an Agent at the Agency and is Licensee

1’s supervising Agent.

1.4. The complaint relates to conduct that took place outside the property of the Complainants.

1.5. On 19 November 2018 the Complaints Assessment Committee (the Committee) considered the complaint and decided to inquire into it under section 78(a) of the Act.

1.6. The details of the complaint are that while the Complainants were selling the Property privately, Licensee 1 took advertising signs and metal stakes from outside the Property and disposed of the signs. The Complainants complained to Licensee 2 but are dissatisfied with his response.

1.7. The Complainants requested a remedy, being that:

a) The Licensees be held accountable for their conduct.

b) Restoration for their loss

1.8. The Licensees each responded to the complaint.

1.9. Licensee 1 acknowledged that he removed and threw out the signage; he described it as “illegal open home signage”. He explained he was annoyed the signage was displayed in contravention of Council rules when he had had similar signs of his removed. Licensee 1 also says he paid reparation to the Complainants after the Police advised him to.

1.10. Licensee 2 explained how he became aware of Licensee 1 taking the signage, and his own actions in response which included contacting Licensee 1 seeking an explanation and telling him to return the signs, and contacting the Agency’s Head Office. Licensee 2 also said that he apologised and offered to pay for new signs.

1.11. Relevant agreed facts:

(a) Licensee 1 took and destroyed the signage from outside the Property; he had no right to do so.

(b) The Complainants complained to Licensee 2 the same day the signs were taken;

compensation was paid after the Police complaint was filed.

1.12. There are no relevant disputed facts.

2. What we decided

2.1. On 9 April 2019 the Committee held a hearing on the papers and considered all the information gathered during the inquiry.

2.2. The Committee has decided to take no further action on the complaint in relation to Licensee

2. The Committee is considering whether to lay charges against Licensee 1 in the Real Estate Agents Disciplinary Tribunal on the basis of possible misconduct. For this reason, Licensee 1’s conduct and the reasons for the referral will not be addressed further in this decision. A separate decision will be issued in respect of Licensee 1, once the Committee has made a decision on the laying of charges.

2.3. This decision regarding Licensee 2 was made under section 89(2)(c) of the Act. The decision was also made with reference to the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012 (the Rules).

3. Our reasons for the decision

3.1. The Committee has determined not to take any further action against Licensee 2 for the following reasons:

(a) Licensee 2’s conduct in relation to this complaint is not real estate agency work; and

(b) Licensee 2’s conduct cannot be regarded as disgraceful and therefore is not misconduct.

Was Licensee 2’s conduct real estate agency work?

3.2. Section 72 of the Act provides that a finding of unsatisfactory conduct against a licensee can only be made if the conduct complained of is real estate agency work. Real estate agency work is defined as “any work done or services provided, in trade, on behalf of another person for the purpose of bringing about a transaction.”

3.3. The actions that are the subject of this complaint consist of receiving the complaint from the

Complainants about Licensee 1 taking the signage and acting upon that complaint.

3.4. The Committee finds that the handling by Licensee 2 of the complaint was not real estate agency work as it was not related in any way to work done or services provided to bring about a transaction. Nor was it a complaint relating to real estate agency work being undertaken by any licensee that Licensee 2 was responsible for supervising.

3.5. The Committee cannot make a finding of unsatisfactory conduct in relation to Licensee 2 under section 72 of the Act.

If Licensee 2’s conduct was not real estate agency work, could it be regarded as disgraceful and therefore misconduct?

3.6. Section 73 of the Act provides that a licensee is guilty of misconduct if the licensee’s conduct would be reasonably regarded by agents of good standing, or reasonable members of the public as disgraceful. It is not necessary for a finding of misconduct that the conduct be real estate agency work. Disgraceful conduct requires a “marked and serious departure from the requisite standards”1.

3.7. As the conduct of Licensee 2 in handling the complaint was not real estate agency work, the

Committee must turn its mind to whether the conduct could reasonably be regarded by agents

1 Morton-Jones v Real Estate Authority [2016] NZHC 1804 at [29]

of good standing or reasonable members of the public as disgraceful.

3.8. The Complainants say they did not receive an apology or compensation for their loss from the Licensees. However, Licensee 2 says he did apologise and offer to arrange and pay for replacement signs. Licensee 2 has also detailed the steps he took after receiving the complaint.

3.9. The Committee finds that Licensee 2 took the complaint seriously and there is nothing in his response that the Committee considers is a marked and serious departure from the necessary standards nor that any reasonable member of the public would find disgraceful. Accordingly the Committee finds Licensee 2’s conduct was not disgraceful. The Committee concludes that Licensee 2’s conduct in handling the Complainants’ complaint to the Agency would not be regarded as disgraceful conduct.

3.10. The Committee also has regard to Rule 7.2 of the Rules which requires a licensee to report to the Authority another licensee who they have reasonable grounds to suspect has engaged in misconduct.

3.11. Licensee 2 reported Licensee 1’s conduct to the Agency’s Compliance Officer straight after being notified of it, but did not report it to the Authority. Licensee 2 says the Agency’s internal policy stated that he could only make a report to the Authority with approval from the Agency. The Committee notes that the Agency’s policy cannot override the mandatory requirement to report where a Licensee has reasonable grounds to suspect misconduct. However in this instance the Committee considers it reasonable that Licensee 2 did not report the misconduct by Licensee 1 to the Authority due to the financial amount involved being relatively low, reparation having been offered, and the fact that Licensee 2 considered he was bound by the Agency’s policy in that respect and that he had therefore, fulfilled his obligations.

3.12. The Committee therefore finds Licensee 2’s failure to report Licensee 1’s conduct to the

Authority was not disgraceful conduct.

3.13. The Committee finds there is no unsatisfactory conduct by Licensee 2 and no conduct that would be misconduct. The Committee takes no further action against Licensee 2.

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 Filin g a n Ap p ea l on the Real Estate

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

ag ents/).

5. Publication

5.1. At the Committee’s discretion, the decision will be published without the names or identifying details of the Complainants (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

Sarah Eyre

Date: 21 May 2019

Appendix 1: Relevant provisions

The Real Estate Agents Act 2008 provides:

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 the 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.

73 Misconduct

For the purposes of this Act, a licensee is guilty of misconduct if the licensee’s conduct –

(a) would reasonably be regarded by agents of good standing, or reasonable members of the public, as disgraceful; or

(b) constitutes seriously incompetent or seriously negligent real estate agency work; or

(c) consists of a willful or reckless contravention of –

(i) this Act; or

(ii) other Acts that apply to the conduct of licensees; or

(iii) regulations or rules made under this Act; or

(d) constitutes an offence for which the licensee has been convicted, being an offence that reflects adversely on the licensee’s fitness to be a licensee.

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.

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

2012 are:

7.2 A licensee who has reasonable grounds to suspect that another licensee has been guilty of misconduct must make a report to the Authority

9.17 A licensee must not disclose confidential personal information relating to a client unless— (a) the client consents in writing; or

(b) disclosure is necessary to answer or defend any complaint, claim, allegation, or proceedings against the licensee by the client; or

(c) the licensee is required by law to disclose the information; or

(d) the disclosure is consistent with the information privacy principles in section 6 of the Privacy Act 1993.