Kang - Complaint No C38760 [2021] NZREAA 97 (20 December 2021)

Last Updated: 21 November 2022

Before the Complaints Assessment Committee
In the matter of	Complaint No: C38760 Part 4 of the Real Estate Agents Act 2008
and
Licensee 1:	Kil Ryung (Keira) Kang (20086355)

Decision on Orders

20 December 2021

Members of Complaints Assessment Committee: CAC2104 Chairperson: Rachel Palu

Deputy Chairperson: Denise Evans Panel Member: Julian Twiss

Complaints Assessment Committee

Decision on orders

Background

1.1. On 4 May 2021 the Complaints Assessment Committee (the Committee) found Kil Ryung (Keira) Kang (the Licensee) guilty of unsatisfactory conduct under section 89(2)(b) of the Real Estate Agents Act 2008 (the Act).

1.2. The Licensee was 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. order the Licensee to pay to the Real Estate Authority a fine of $500.00 twenty-one working days after the date of this decision that being Wednesday, 9 February 2022.
   

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 McCaig v A 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 Licensee in her submission expressed her regret again for her conduct. She reiterated that her actions weren’t deliberate and arose due to a lack of knowledge and her misunderstanding that she remained involved as a salesperson when she attended the auction. The Licensee submits that upon becoming aware that she had failed to follow the correct process, she took various steps to put things right and renounced her share of the commission, apologised to all concerned and underwent a long period of training. The Licensee also advised that she has now suspended her licence and has made a decision not to work in the industry again.

4.2. The Committee found that the Licensee failed to disclose that the buyer was closely related to her and failed to follow the required process in s 134 and obtain the vendor’s consent. The Committee also found that the same failure to disclose constituted a failure to provide

information that was required to be provided to the vendor in breach of Rule 6.4. Although, the same conduct breached two different obligations, the Committee views the conduct as a single breach.

4.3. Section 134 and Rule 6.4 are important safeguards protecting the interest of consumers, and the Committee treats breaches of these provisions seriously. Fortunately, in this case the vendor was satisfied with the outcome of the sales process and no harm resulted.

4.4. The Committee also accepted that the Licensee did not intend to mislead, and rather her actions demonstrated poor judgment and a lack of knowledge which she ought to have had given the time she had been involved in the industry.

4.5. While, we accept that the Licensee was relatively inexperienced we are also satisfied that she ought to have known the importance of understanding and adhering to the Rules of professional conduct.

4.6. Overall, we consider that the degree of departure from reasonably expected standards to be at the lower end of unsatisfactory conduct.

4.7. We also consider that there are various mitigating circumstances. The Licensee immediately accepted that she had done wrong, she apologised, she agreed not to receive payment of any commission, and she immediately undertook further training from her supervisor. The Licensee also has no prior disciplinary history.

4.8. After taking into consideration the Act’s objective of protecting the interests of consumers, promoting public confidence and maintaining professional standards as well as the need for general deterrence and consistency, we consider that a fine should be imposed.

4.9. Under section 93(1)(g) of the Act the Committee may order the Licensee to pay the Authority a fine not exceeding $10,000.00. This would indicate a fine of up to $3,000.00 for low range conduct and between $3,000.00 to $7,000.00 for moderate or mid-range conduct. As we have assessed the conduct to be at the lower end of unsatisfactory conduct, we consider that a fine of $1,500.00 is appropriate.

4.10. We also consider that the mitigating factors identified above warrant a reduction to a final fine of $500.00. We consider that such a fine is fair and proportionate when taking into account the Licensee’s immediate acknowledgment of her error and steps to put things right. The overall experience and outcome have had a material effect on the Licensee and she is no longer working in the industry. We also consider that specific deterrence, accountability and the consumer projection objectives of the Act have also been achieved through the overall impact on the Licensee, the resulting determination and its ultimate publication.

Publication

5.1. The Committee directs publication of its decision. The decision will be published without the names or identifying details of the buyer and the prospective buyer, including the address of the Property. 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 and Rules referred to

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

Signed

Rachel Palu Chairperson

Denise Evans

Deputy Chairperson

Julian Twiss Member

Date: 20 December 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.

The Rules from the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012 referred to in this decision are:

Rule 6.4 A licensee must not mislead a customer or client, nor provide false information, nor withhold information that should be law or in fairness be provided to a customer or client.