Cartwright - Complaint No C34592 [2021] NZREAA 10 (15 February 2021)

Last Updated: 22 May 2021

Before the Complaints Assessment Committee
In the matter of	Complaint No: C34592 Part 4 of the Real Estate Agents Act 2008
and
Licensee 1:	Benjamin Cartwright (20000661)

Decision on Orders

15 February 2021

Members of Complaints Assessment Committee: CAC1906 Chairperson: Paul Biddington

Deputy Chairperson: William Acton

Complaints Assessment Committee

Decision on orders

Background

1.1. On 24 September 2020 Complaints Assessment Committee 1906 (the Committee) found

Benjamin Cartwright (the Licensee) guilty of unsatisfactory conduct under section 89(2)(b) of the Real Estate Agents Act 2008 (the Act).

1.2. The Complainants and the Licensee were given the opportunity to make submissions to the Committee on orders. The Licensee chose not to provide a submission.

Orders

2.1. Having made a finding of unsatisfactory conduct against the Licensee, the Committee decided to make the following orders under section 93 of the Act:

1. Order the Licensee to pay to the Real Estate Authority a fine of $7000 within 21 working days from the date of this decision.
   
2. Order the Licensee to provide to the Complainants a written apology within 21 days from the release of this decision.
   

Promoting and protecting the interests of consumers and the public

2.2. Section 3(1) of the Act sets out the purpose of the legislation. The 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".

2.3. One of the ways in which the Act achieves this purpose is by providing accountability through an independent, transparent and effective disciplinary process (section 3(2) of the Act).

2.4. In the leading case on the principles relevant to professional disciplinary cases, Z v Dental Complaints Assessment Committee [2008] NZSC 55, [2009] 1 NZLR 1, the Supreme Court affirmed that consumer protection was a central focus of professional disciplinary cases (see at [70], [113], [128] and [145]).

Maintaining professional standards

2.5. The other central focus of professional disciplinary cases is maintaining professional standards. As already noted, section 3(1) of the Act refers to the purpose of “[promoting] public confidence in the performance of real estate agency work", and section 3(2) refers to raising industry standards and providing accountability through the disciplinary process. In Z v Dental Complaints Assessment Committee the Supreme Court confirmed that maintenance of professional standards is a fundamental purpose of professional disciplinary proceedings.

2.6. The need to maintain proper professional standards means that it is necessary to:

1. make sure that no person who is unfit because of his or her conduct is allowed to practice in the profession in question;
   
2. protect both the public and the profession itself against persons unfit to practice; and
   

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

2.7. Specific and general deterrence has an important role to play in ensuring maintenance of professional standards. The penalty imposed should be sufficient to deter the licensee from engaging in the same or similar conduct in the future. It should also be sufficient to deter other members of the profession from engaging in similar conduct, even if the Committee is satisfied that the licensee is unlikely to repeat the conduct themselves.

Other relevant factors

2.8. Although the Supreme Court in Z v Dental Complaints Assessment Committee placed particular emphasis on the purposes of consumer protection and maintenance of professional standards, the High Court has recognised other relevant factors which are

consistent with these purposes. In TSM v Professional Conduct Committee [2015] NZHC 3063, the High Court summarised these other factors as follows (at [16]):

1. Punishment of the professional;
   
2. Rehabilitating and reintegrating the professional into the profession, if the professional is capable of that;
   

100. The penalty must be comparable with the penalty imposed on others in similar circumstances;
     

4. The penalty must be based on assessment of the offending behavior against the spectrum of penalties available, with the maximum penalties being reserved for the worst offences;
   
5. The penalty must involve imposition of the least restrictive penalty that can be reasonably imposed in the circumstances; and
   
6. The penalty imposed must be fair, reasonable and proportionate in the circumstances.
   

2.9. The Committee accepts that a penalty in a professional disciplinary case is primarily about maintaining standards and protecting the public, not punishment, as may be the case in

criminal proceedings. However, if the Committee decides to impose one or more of the

penalties available under section 93 of the Act to meet the purposes summarised above, the penalty will likely be regarded as having a punitive effect from the licensee’s perspective. As the TSM decision makes clear, this is permissible and is consistent with the overall objectives of professional discipline.

Discussion

3.1. The Complainants submitted they had suffered both emotionally and financially from the conduct of the Licensee. They say they entered into the purchase of the Property with what they thought would be a straightforward procedure, only to find that their house buying experience had been ruined by the Licensee.

3.2. As part of their submission, the Complainants requested reimbursement of the monetary costs incurred by the transaction. They provided invoices for a valuation, and legal fees.

3.3. The Committee is of the view that costs can be incurred with the purchase of a property whether the transaction proceeds or not. In this instance the transaction did not proceed

and the Complainants are in a position of having incurred these costs while having lost the opportunity to purchase the Property. The Committee understands the Complainants’ position and their disappointment however, no costs order will be made against the Licensee for payment.

3.4. The Complainants say that since the cancellation of their agreement they have had no communication from the Licensee. He has made no attempt to come forward to express any remorse or wrongdoing.

3.5. Further, the Complainants say for all the heartbreak the Licensee has put them through they would be seeking a written apology from the Licensee to acknowledge the effect his conduct has had on them.

3.6. The Committee views written apologies as slightly problematic, as they must be genuine or heartfelt, and when they are ordered instead of freely given that limits their value.

3.7. The Committee understands why the Complainants would like a written apology because of the way this whole process has impacted on them and in this instance, as the Complainants specifically requested an apology, the Committee has decided to order the Licensee to provide an apology to the Complainants within 21 days from the release of this decision.

3.8. The Committee found the conduct of the Licensee fell short of the standard that a reasonable member of the public is entitled to expect from a reasonably competent licensee. For the

Licensee to be promoting the Property in a deceptive way to prospective purchasers by providing a move in date that was never going to be possible, was not dealing fairly with the parties and that is why a decision of unsatisfactory conduct was found.

3.9. In relation to the sunset clause in the agreement, the Committee was disappointed with the cavalier attitude of the Licensee and blatant disregard for the importance of this clause. The Complainants may well have understood the ramifications of the clause and even had it

referred to them by their lawyer, however for the Licensee to make the comment “don’t worry about it, it won’t affect you because you can move in next month” was misleading and not in good faith.

3.10. The Committee notes that in July 2018 a finding of misconduct was found against the

Licensee by the Real Estate Agents Disciplinary Tribunal and in July 2019 another Complaints Assessment Committee made a finding of unsatisfactory conduct against the Licensee.

3.11. The Committee has considered whether the Licensee has any respect for the current regime that all current licensees operate under, which is for the purposes of consumer protection and maintenance of professional standards which is in the public interest.

3.12. The Committee in this case considers the conduct of the Licensee to be at the upper end of unsatisfactory conduct scale and the imposition of a fine of $7000 reflects the conduct as

there are no mitigating circumstances

Publication

4.1. The Committee directs publication of its decision. 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.

4.2. 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.

Your right to appeal

5.1. If you are affected by this decision of the Committee, the right to appeal is set out in section 111 of the Act. You may appeal in writing to 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.

5.2. The Notice of Appeal form, which includes information on filing an appeal, can be located on the Ministry of Justice’s website: https://www.justice.govt.nz/tribunals/real-estate-

agents/apply/.

Provisions of the Act and Rules referred to

6.1. The provisions of the Act and the Rules referred to in this decision are set out in the Appendix.

Signed

Paul Biddington Chairperson

William Acton

Deputy Chairperson Date: 15 February 2021

Appendix: Provisions of the Act and Rules referred to

The Real Estate Agents Act 2008 provides:

3 Purpose of Act

(1) The purpose of this 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.

(2) The Act achieves its purpose by—

• (a) regulating agents, branch managers, and salespersons:
• (b) raising industry standards:
• (c) providing accountability through a disciplinary process that is independent, transparent, and effective.
  

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

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.

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;

(ha) if the Committee is satisfied that the unsatisfactory conduct involves more than a minor or technical breach of this Act or of any regulations or rules made under this Act, make an order referring the matter to the Disciplinary Tribunal for the Tribunal to consider whether to make a compensation order under section 110(5);

(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 Disciplinary Tribunal against the determination within 20 working days after the day on which

notice of the relevant decision was given under section 81 or 94, except that no appeal may be made against a determination under section 89(2)(a) that a complaint or an allegation be considered by the Disciplinary Tribunal.

(1A) The Disciplinary Tribunal may accept a late appeal no later than 60 working days after the day on which notice was given to the appellant if it is satisfied that exceptional

circumstances prevented the appeal from being made in time.

(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 (ab) the prescribed fee, if any; 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.