Ministry of Justice

Compensation referral / unsatisfactory conduct / licensees failed to disclose building reports obtained by vendor identifying weathertightness risk from insufficient window flashings / Real Estate Agents Act 2008, s50, s93, s110 / Professional Rules 2012, r10.7 / compensation considered on legally principled basis / losses must flow from unsatisfactory conduct found by Committee / liable for cost of replacement windows (retrofitting flashings not feasible), waterproofing, restoration of adjacent walls / claim for replacement blinds not casually connected / no contributory negligence by not obtaining formal building report / claim for interest costs for remediation partly successful / 25 per cent reduction for non-intentional breach / 15 per cent reduction as failure was to disclose risk, rather than known leaks / compensation of $26,486 awarded for losses, apportioned 75 per cent to lead agent

Application to review Registrar’s determination not to pursue complaint as it only disclosed inconsequential matters / Real Estate Agents Act 2008, s74, s112 / Kacem v Bashir [2010] NZSC 112 / HELD / licensee unaware of unconsented work / not liable for statement about property unless knowingly, recklessly or carelessly makes misstatement / not reckless or careless in advertising property as having rooms it physically had / no reason to question vendor’s representation there was no unconsented work / unconsented work not substandard and consistent with the era / no evidence of red flag or indicator alerting licensee of need for further enquiry / not required to inspect council records in these circumstances / no material error nor is Registrar’s decision plainly wrong / application dismissed / Registrar’s decision confirmed

Application for leave to adduce new evidence / Real Estate Agents Act 2008 s105, s111 / application opposed by agent / vendor sought to produce email and Sale and Purchase Agreement for more favourable offer / supports assertion agent’s error had material impact / HELD / evidence cogent and credible, but could have been provided to Committee with reasonable diligence / leeway afforded to elderly vendor, not legally represented / vendor raised other offer during complaint to Authority, who did not request evidence of offer / no express consideration of other offer by Committee / in interests of justice to admit evidence / application successful

Compensation referral / unsatisfactory conduct / Committee found licensee failed to disclose house had a risk of both methamphetamine contamination and a weathertightness issue / purchaser subsequently discovered it suffered from both, leading to remediation costs / Real Estate Agents Act 2008, s50, s93, s110 / Professional Rules 2012, r10.7 / compensation to be considered on legally principled basis / losses must flow from unsatisfactory conduct and substantive matters found by Committee / purchaser entitled to remediate methamphetamine contamination to below the acceptable levels stipulated in NZ Standard / claimed weathertightness losses not casually established, involved high level of contributory negligence / claimed legal costs not sufficiently connected / $24,707.75 in losses attributable to licensee’s unsatisfactory conduct reduced to $14,825, accounting for licensee’s innocent representation, purchaser’s contributory negligence, and nature of risk rather than known defect

Compensation referral / unsatisfactory conduct / Committee found licensee failed to disclose house had plaster cladding, and her overall disclosure concerning leaks in property had unjustifiably downplayed and misrepresented their potential seriousness / Committee further found licensee’s supervisor failed to adequately supervise and manage licensee / Real Estate Agents Act 2008, s50, s93, s110 / Professional Rules 2012, r5.1, r6.1, r6.4, r10.7 / purchasers’ loss of rent (over 57 weeks), invasive property inspection fee, and costs for temporary repairs were casually and closely connected to licensees’ conduct / losses exceeded Tribunal’s jurisdiction of up to $100,000 / compensation reduced by 25 per cent for licensee’s innocent misrepresentation, by 15 per cent for purchasers’ contributory negligence, and by 25 per cent to reflect non-disclosure of risk rather than known defect /  licensees ordered to pay $35,000 / licensees’ liability joint and several, split equally between themselv…

Application to review Registrar’s determination not to pursue complaint as it only disclosed inconsequential matter / purchaser of vacant residential section later discovered fence encroaching onto property / alleged licensees should have warned him to obtain a boundary survey / Real Estate Agents Act 2008, s74, s112 / Professional Conduct and Client Care Rules 2012, r5.1, r6.4, r10.7 / HELD / licensees do not have duty to identify and point out property boundaries, except where there is apparent cause for concern / licensee must be proactive when asked or the licensee might reasonably be expected to do so / no ‘red flag’ in these circumstances / presence of fence and storm tank did not suggest encroachment / Registrar correct in determining there was insufficient evidence the licensees knew or should have known of potential boundary issue / application dismissed / Registrar’s decision confirmed

Appeal / property sold ‘as is where is’, buyers advised to seek advice from builder on piles / licensee failed to disclose report as to extent of problem with piles and condition of subsoil / Committee found licensee engaged in mid-to-high level unsatisfactory conduct for withholding information that should have in fairness been provided and for failing to exercise skill, care, competence and diligence / ordered censure, $6,500 fine and compensation referral / licensee appealed against assessment of conduct and fine / Real Estate Agents 2008, s89, s111 / Professional Conduct and Client Care Rules 2012, r5.1, r6.4 / HELD / licensee failed to disclose geotechnical report containing very material and specific information and recommendation / Committee’s assessment of gravity of conduct overlooked ‘as is where is’ nature of sale, with specific recommendation to have piles examined by builder / unsatisfactory conduct properly assessed as moderate, not mid-to-high / fine reduced to $5,000

Costs / Tribunal awarded compensation to complainant in the sum of $46,875 / complainant subsequently applied seeking costs of $17,293.70, being legal costs of attendances by two barristers / Real Estate Agents Act 2008, s 110A / HELD / reasons advanced for award of costs are no more than those justifying costs on the principle they follow the event / licensee participated in good faith and facilitated Tribunal’s process / licensee entitled to defend himself / reasonable basis for defence to claim of compensation / claim for costs dismissed

Application to review Registrar’s determination / Registrar determined not to pursue complaint as it only disclosed inconsequential matter / parties filed joint memorandum inviting Tribunal to reverse Registrar’s decision by consent, so Registrar may refer matter to Committee / Real Estate Agents Act 2008, s743a / HELD / application granted, Registrar’s decision reversed.

Application to review Registrar’s determination / Registrar cancelled licence as licensee failed to pay prescribed fee / Real Estate Agents Act 2008, s54h, s55, s112 / HELD / Registrar correctly followed statutory process / Registrar must cancel licence as required by s54h / no error of fact or law / application dismissed / Registrar’s decision confirmed

Appeal / agency released deposit of $37,500 early without authority signed by all parties / transaction close to to holiday period / Committee found agency liable under s 123 and imposed $2,000 penalty / agency appealed against liability and penalty on basis of low gravity offending / Real Estate Agents Act 2008, s89, s111, s123 / Professional Conduct and Client Care Rules 2012, r5.1 / Real Estate Agents (Audit) Regulations 2009 / HELD / compliance with statutory and regulatory requirements not a ‘nice to have’ and breaches are treated seriously / public confidence underpins statutory provisions / agency’s wrongdoing at lower end of spectrum however not so low as to be below disciplinary threshold / Committee’s liability and penalty findings affirmed / appeal dismissed

Appeal / complainant vendor alleged that licensees misled him regarding ability to modify settlement date and did not recommend he seek legal advice / Committee determined it was clear to vendor that the date could only be adjusted by purchasers’ mutual agreement and that he was advised to seek legal advice / Committee took no further action / Real Estate Agents Act 2008, s111 / Professional Conduct and Client Care Rules 2012, r5.1, r6.4, r9.7 / HELD / appellant vendor must have understood that settlement was due to occur on specified date unless both parties agreed otherwise, with prior confirmation / no correspondence supported allegation that licensees represented settlement as flexible / licensees expressly reminded vendor of relevant clause and of his ability to seek legal advice / Committee’s decision confirmed / appeal dismissed

Application to review Registrar’s determination / Registrar cancelled licence as licensee failed to pay annual fee for keeping licence suspended / Real Estate Agents Act 2008, s54h, s55, s112 / HELD / licensee was required to pay suspension fee by certain date, received required communications from Registrar, and did not make payment by deadline / applicant’s misunderstanding as to second annual fee payment caused by erroneous assumption / Registrar correctly followed statutory process / Registrar must cancel licence as required by s54h / no error of fact or law / application dismissed, Registrar’s decision confirmed