King - Complaint No C35243 [2021] NZREAA 61 (31 March 2021)

Last Updated: 18 November 2022

Before the Complaints Assessment Committee
In the matter of	Complaint No: C35243 Part 4 of the Real Estate Agents Act 2008
and
Licensee:	Mark King (20041174)

Decision on Orders

31 March 2021

Members of Complaints Assessment Committee: CAC1906 Chairperson: Paul Biddington

Deputy Chairperson: William Acton

Complaints Assessment Committee

Decision on orders

Background

1.1. On 16 December 2020 Complaints Assessment Committee 1906 (the Committee) found Mark King (the Licensee) guilty of unsatisfactory conduct under section 89(2)(b) of the Real Estate Agents Act 2008 (the Act).

1.2. The Committee found the Licensee guilty of unsatisfactory conduct because he did not search the title to the Property before the Complainants’ contract went unconditional.

1.3. The Complainants and the Licensee were both given the opportunity to make submissions to the Committee on orders.

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. make an order censuring the Licensee
   
2. order the Licensee to pay to the Real Estate Authority a fine of $2.500.00 within 21 days from the date of this decision.
   

General principles

3.1. In determining whether to impose one or more of the orders available under section 93 of the Act, the Committee has had regard to the following general principles relevant to professional disciplinary cases.

Promoting and protecting the interests of consumers and the public

3.2. 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".

3.3. 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).

3.4. 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

3.5. 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.

3.6. 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.
     

3.7. 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

3.8. 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.
   

3.9. 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

4.1. The Complainants submitted that the Licensee showed them the wrong location of the

section they were purchasing, and prior to their agreement going unconditional, he had been provided with a new title to the section which he never searched or disclosed to the

Complainants the information it contained.

4.2. The new title disclosed that the section they were purchasing was now a different lot in a different street. The Complainants say that had the Licensee read and understood the title and disclosed the changes to them before their contract became unconditional, it would have given them an opportunity to decide whether they wanted to continue with the purchase of

the section.

4.3. The Licensee acknowledged in his submission that he had made a mistake by not searching

the title as soon as it became available. The Committee agrees, as there had been a number of red flags regarding the section’s location, with a change of lot number and street. Having said that, the Committee accepts that the situation was unusual. To have lot numbers

changed, which then became totally different sections, is something which would not have been considered by most licensees. Fortunately, the Complainants preferred the location of section they finally built on.

4.4. The Complainants says the Licensee gave them false hope by saying they would be moving

into their new house in 6 months which was one of the reasons they purchased the land and house package. The Licensee in his submission denied making such a statement and says he advised the Complainants multiple times that the home would be completed 6 months after construction started.

4.5. The Committee accepts with a change to the house design and a new location, a new

resource consent was needed and this took much longer than first anticipated, which put the Complainants under both financial and personal stress. Because of this, the relationship

between the Licensee and the Complainants broke down.

4.6. The Complainants say because of the length time, just over a year, from when they signed the contract to when they took possession, they requested the Committee make an order against the Licensee requiring him to pay their weekly rent of $355.00 from September 2019 until October 2020. The Committee is of the view that the Licensee’s mistake didn’t result in the Complainants needing to spend that amount of time paying rent, and might have been paying that rent regardless of the mistake.

4.7. The Committee considers that delays are a risk with new builds and therefore payments

stemming from such delays would need a strong causal connection to the Licensee’s error. As such, the Committee is of the view that the Licensee’s mistake didn’t result in the

Complainants needing to spend that amount of time paying rent. The link between the

error/omission of the Licensee and paying rent isn’t sufficient to base an order of relief in this case. They might have been paying that rent regardless of the mistake.

4.8. Additionally, the Committee was not provided with any receipts or a rental ledger showing

the weekly payments the Complainants made during this time and the Committee considers these types of payments to be part of purchasing a new home and no order will be made.

4.9. In his submission the Licensee provided a list of items he says he paid for, which were outside the build contract, as he tried to appease the Complainants and restore the difficult

relationship, so that house could be finished.

4.10. The Committee accepts the Licensee was in a difficult position with the new resource consent taking much longer than first thought, and the Complainants being very stressed. However,

this may have been avoided had the Licensee checked the title and become familiar with the information from the search.

4.11. The Committee’s view is that the checking of titles of properties and understanding the state of the title is one of the most essential roles of a licensee. With this mind, the Committee has to consider the level of the unsatisfactory conduct in this case. If it accepts the unsatisfactory conduct of the Licensee to be at a moderate level, justifying a fine between 4-6 thousand

dollars, it also has to consider that any 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.

4.12. The Committee has taken into consideration that any penalty must be a deterrent against similar conduct in the future. It has also accepted that the Licensee was in an unusual and difficult situation with a number of factors out of his control. In his submission he also provided a list of items that he says he paid for to try and restore and alleviate the difficult relationship and get the house finished. Further, the Licensee also admitted to his failure of not searching the title when he should have.

4.13. After having taken all these factors into consideration, is why the Committee has imposed an order of a censure and a fine of $2500.

Publication

5.1. 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.

5.2. 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

6.1. 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.

6.2. 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 referred to

7.1. The provisions of the Act referred to in this decision are set out in the Appendix.

Signed

Paul Biddington Chairperson

William Acton

Deputy Chairperson Date: 31 March 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.