BEFORE THE REAL ESTATE AGENTS DISCIPLINARY TRIBUNAL
[2017] NZREADT 15
READT 069/15
IN THE MATTER OF
An appeal under section 111 of the Real
Estate Agents Act 2008
BETWEEN
IVO and INGWOR HOLMQVIST
Appellants
AND
THE REAL ESTATE AGENTS
AUTHORITY (CAC 403)
First Respondent
AND
GASTON COMA
Second Respondent
On the papers
Tribunal:
Hon P J Andrews, Chairperson
Mr J Gaukrodger, Member
Ms N Dangen, Member
Submissions received from:
The appellants, in person
Ms K Lawson-Bradshaw, on behalf of the
first respondent
Ms Lucas, on behalf of the second
respondent
Date of Decision:
13 March 2017
DECISION OF THE TRIBUNAL
Introduction
[1]
The appellants, Dr and Mrs Holmqvist, have appealed pursuant to s 111 of the
Real Estate Agents Act 2008 (“the Act”) against the decision of Complaints
Assessment Committee 403 (“the Committee”), dated 28 September 2015. In that
decision, the Committee decided to take no further action on their complaint to the
Real Estate Agents Authority (“the Authority”) against the second respondent, Mr
Coma.
[2]
At a telephone conference on 13 October 2016, the parties agreed that the
appeal would be determined on the papers. For the purposes of determining the
appeal the Tribunal has had available to it a bundle of the material that was before
the Committee, the Committee’s decision, and written submissions made by or on
behalf of the parties.
Summary of the factual background
[3]
The appellants owned a property at Laingholm, Auckland. It is a substantial
property of 1,282 m2 with a large main house, cottage, and sleepout. It was listed for
sale as a sole agency with Mr Goma, a licensed salesperson at the LJ Hooker branch
at Titirangi (“the Agency”), between 17 October 2014 and 15 January 2015. The
following is a brief timeline of events during the period in which the second
respondent had the listing.
[4]
The agency agreement with the second respondent was entered into on 17
November 2014. Before entering into the agreement, the appellants had agreed to
list the property with another agency. They withdrew from that listing in order to list
with the second respondent. The appellants agreed to a marketing campaign which
involved Open Homes, news media and internet advertising, flyers, brochures, and
sign boards, leading up to an auction at the property on 30 November 2014. Open
Homes were held during November 2014.
[5]
The appellants received a pre-auction offer for the property shortly before the
auction. The offer was withdrawn within a few hours. The auction was held on 30
November, at the property. No bids were received.
[6]
The second respondent then marketed the property for sale at $1.295 million, in
a similar manner to the pre-auction marketing. The property did not sell and the sole
agency agreement with the second respondent was not renewed on 15 January 2015.
A two-week extension of the listing was agreed to with the Agency, with Mr Craig
Smith replacing the second respondent as listing agent.
The complaint
[7]
During the period of the sole agency the appellants became critical of the
manner in which the second respondent marketed the property both before and after
the auction. On 16 February 2015 they complained to the Real Estate Agents
Authority (“the Authority”). They set out in their complaint, in detail, 14 separate
issues they had with the second respondent’s marketing campaign, and his dealings
with them (“the complaint”).
[8]
The appellants summarised their complaint by expressing their view that the
second respondent had been neither honest nor fair with them, he had shown a
remarkable lack of enthusiasm, and his contact with them after the auction was
minimal. They considered his conduct to be unethical and unprofessional, and in
breach of the “REINZ Code of Practice”.1 They also considered that the second
respondent’s denigrating comments regarding the agency which had the listing
before him were in breach of the real estate code of good practice.
[9]
The second respondent provided a detailed response to each aspect of the
complaint (“the response”).
In respect of each complaint, he either denied the
allegation, or set out the reasons for a particular action.
1
The Committee (and the Tribunal) considered the appellants’ complaint as alleging breaches of
the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012 (“the Rules”).
The Committee’s decision
[10] Set out below is a summary of the allegations made by the appellants against
the second respondent, and the Committee’s findings in respect of each allegation.
The particular allegations have been re-ordered, so that they follow the course of the
appellant’s dealings with the second respondent, as we understand it to be.
[a]
Cancellation of previous listing: the second respondent denied that he
had encouraged the appellants to cancel their previous listing with
another agency. The Committee found that the appellants “[did] not
appear … to be people easily swayed”, and that they were “intelligent
people who had made a choice to sign a listing with [the second
respondent]”.
[b]
Incorrect quote for marketing: the second respondent accepted that the
appellants had been given an incorrect quote for marketing and said that
he covered the shortfall himself.
The Committee found that the
appellants had said that “the advertisements were free”. The Committee
was “at a loss to understand why” the appellants should think that the
advertising was free, and found no breach of the Rules.
[c]
Relocated advertising signage and attempted to charge them the cost of
doing so: The Committee accepted the second respondent’s statement in
his response that the appellants agreed to the original location of the
signage, and its relocation, and that the appellants were not required to
pay the relocation fee when they objected to doing so.
[d]
Did not follow the appellant’s instructions as to the number of people
supervising Open Homes: The Committee found that the second
respondent had made an effort to have two people present for open
homes, and that the appellants were informed when his wife could not be
present on one occasion. The Committee found no evidence that the
security of the property was compromised, and that there was no breach
of the Rules.
[e]
Referred to the house as being “plaster” rather than “rough cast”: The
Committee found no evidence that supported the appellants’ complaint
that this made the property harder to sell. The Committee referred to
advertising for the property which described it as “rough cast”, and to a
building inspection report obtained by the appellants which referred to
the cladding as being a “plaster system”.
[f]
Passed on negative comments from potential buyers rather than positive:
The Committee found no evidence to support the appellants’ allegation
that the second respondent had a hidden agenda to lower the price of the
property, and that the second respondent had provided feedback from
people who viewed the property.
[g]
Made negative comments about Mrs Holmqvist’s age: The Committee
appears to have accepted the second respondent’s response that his
comment was that “older people might not appreciate the need for
internet advertising”. The Committee accepted that the comment was
“unfortunate” but noted that the second respondent had apologised to the
appellants. The Committee found that the second respondent had not
breached any rule, and that his conduct did not amount to conduct worthy
of a disciplinary finding.
[h]
Did not insert a “sunset clause” in a pre-auction offer: The appellants
complained that a pre-auction offer presented to them was withdrawn
before they had time to consider it. The Committee accepted that the
offer was presented on behalf of the offeror by a salesperson from
another branch of the Agency. The Committee observed that under r
10.102 agents are required to present all written offers to a vendor, and
the second respondent had complied with this obligation by being present
when the offer was presented to the appellants. The Committee found
the the second respondent had no role in preparing or presenting the
offer, and could not be blamed for any perceived shortcomings on the
part of the other agent or her buyer.
2
Rule 10.10 of the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012.
[i]
Approached a friend of the appellants at the auction and attempted to get
her to list her property: The Committee found that speaking to a friend of
the appellants did not breach any Rule, and that inquiring whether a
person is looking to sell is “sensible practice” by a salesperson at an
auction. The Committee also found that the appellants’ criticism of the
second respondent for “remaining positive” after the failed auction was
unfair and unwarranted.
[j]
Did not act in the appellants’ interests following the auction, and did not
provide a list of people who attended the auction:
The Committee
observed that auctions are open to the public, and lists of attendees are
not commonly taken. The Committee found that the second respondent
and the Agency could not be faulted for not taking a list.
[k]
Failed to advise the appellants that he was going on holiday:
The
Committee noted that while an email received by the appellants on 23
December 2014 advised that the second respondent would be on holiday
until 12 January, it also advised that he would react to any phone calls.
The Committee found that the appellants were unreasonable to say that
they should have been told, at the time the property was listed on 17
October, that he would have holidays over Christmas, as there was every
expectation that the property would have been sold before then. The
Committee also found that it was unreasonable of the appellants to expect
that an agent “would not take a break from work at a time in which few
or no buyers would be active”.
[l]
Did not follow up and advise the appellants when an editorial would
appear in the Herald: Having been provided with copies of emails
between the second respondent and the Herald, copied to the appellants,
the Committee found that this allegation was not made out.
The
Committee found that the second respondent had no control over the
timing of the editorial. The Committee further found that the second
respondent had been in regular communication with the appellants, and
had passed information on to them.
[m] Advertised the property after the listing had ended: The Committee
referred to email notification within the Agency that the listing had been
cancelled. The Committee also noted that other agents were marketing
the property after 15 January. It did not uphold this complaint.
Approach to an appeal against a committee’s decision not to inquire
[11] Section 111 of the Act provides for the right of appeal to the Tribunal against a
Committee’s determination. Section 111(4) provides that:
After considering the appeal, the Tribunal may confirm, reverse, or modify the
determination of the Committee.
[12] The Committee’s decision not to inquire in the appellants’ complaint was made
pursuant to its powers under s 79 of the Act:
79
Procedure on receipt of a complaint
(1)
As soon as practicable after receiving a complaint concerning a
licensee, a Committee must consider the complaint and determine
whether to inquire into it.
(2)
The Committee may–
(a) determine that the complaint alleges neither unsatisfactory conduct
nor misleading conduct and dismiss it accordingly;
(b) determine that the complaint discloses only an inconsequential
matter, and for this reason need not be pursued:
(c) determine that the complaint is frivolous or vexatious and not made
in good faith, and for this reason need not be pursued:
(d) determine that the complaint should be referred to another agency,
and refer it accordingly:
(e) determine not to inquire into the complaint.
[13] Accordingly, the Committee “must consider the complaint and determine
whether to inquire into it”, then it “may” do any of the things listed in s 79(2)(a) to
(e). The word “may” indicates that the Committee has a discretion as to which course
it takes. In its judgment in Kacem v Bashir, the Supreme Court said:3
In [an appeal against a decision made in the exercise of a discretion] the
criteria for a successful appeal are … (1) error of law or principle; (2) taking
account of irrelevant considerations; (3) failing to take account of a relevant
consideration; or (4) the decision is plainly wrong.
[14] A decision that is “plainly wrong” is one that was not reasonably open to the
Committee on the evidence before it.
[15] In the present case, the Committee’s determination was that it would not
inquire into the appellants’ complaint (s 79(2)(e)).
If the appellants’ appeal is
allowed, the only possible outcome would be that the complaint would be referred
back to the Committee, with a direction that it give further consideration to it.
Appeal issues
[16] We turn to consider the appellants’ challenge to the Committee’s decision, by
reference to the Committee’s findings, and the appellants’ submissions dated 14
November 2016. The appellants did not challenge all of the Committee’s findings,
and not all of their submissions on appeal related to the issues raised in their notice
of appeal.
Issue (a): Cancellation of listing
[17] The appellants objected to the Committee’s comment: “that they took a dislike
to [the second respondent] and were disgruntled throughout the listing period is
indicated by the tone and content of the emails they sent him and the number of
minor complaints they have made against them.” The Tribunal considers that this
comment had no apparent direct relevance to the appellants’ complaint that the
second respondent persuaded them to cancel their previous listing and list the
3
Kacem v Bashir [2010] NZSC 112, [2011] 2 NZLR 1, at [32], applied by the Tribunal: see
Fielding v Real Estate Agents Authority (CAC 10068) [2012] NZREADT 10, at [7], and Sherburn v
Real Estate Agents Authority (CAC 10068) [2012]NZREADT 33, at [16].
property with him, and it was not a matter that the Committee was required to
determine.
[18] However, it was open to the Committee to find that it was the appellants’
choice to list the property with the the second respondent, and there are no grounds
to interfere with its finding.
Issue (b): Incorrect quote for marketing
[19] The appellants referred the Tribunal to the second respondent’s response to
their complaint, in which he said:
I acknowledge there was a mistake on one of the multiple amount of my
marketing plan. It was human error and, as soon as the clients showed that
they were not agreeable to pay, I did take responsibility for the mistake and
the shortfall. … the complainants do not take into account that I provided, at
no costs for them: one free ¼ page in Western Homes, the free editorial in the
New Zealand Herald, and paid advertising in Facebook.
[20] It was clearly open to the Committee to accept that the second respondent
covered the shortfall arising out of his error. But it is also clear from the second
respondent’s statement that there was no basis on which the Committee be “at a loss
to understand why [the appellants] would think that advertising in a newspaper was
free”. There was a “free editorial” (that is, advertising of the property at no cost to
the appellants) in January 2015. As is set out later in this decision, it took some
effort for this to be achieved.
[21] However, there was no error in the Committee’s finding that the second
respondent had made good his error in the marketing quote, and that there was no
breach of a Rule.
Issue (d): Number of people present at Open Homes
[22] The appellants submitted that it was agreed with the second respondent that
there would be two people present at each Open Home. They said that as there are
three houses on the property there needed to be two people supervising Open Homes.
They submitted that if the second respondent had not agreed, they would not have
listed the property with him. The Committee found that the second respondent had
agreed to two people being present.
[23] The second respondent said in his response that his wife was present at all
Open Homes except the Open Home on 23 November 2014.
The appellants
submitted that the Committee had taken the second respondent’s word that there was
only one occasion when his wife was not present, when he had offered no proof of
that. They accepted that they could not prove otherwise, but said that if they had
been advised in advance that the second respondent’s wife could not attend on 23
November, they would not have allowed it.
[24] It is apparent from an email from Mr Holmqvist to the second respondent on 26
November 2014 that they became aware on 23 November that there had been only
one person supervising the Open Home that day. The email shows that they were
concerned. Their concern is justifiable in the light of the size and nature of the
property.
It has not been suggested that they were informed that the second
respondent’s wife would not be present at the Open Home, before the Open Home
was held.
[25] The second respondent should have advised the appellants, before the Open
Home, that his wife could not attend the Open Home so that they could (if they
thought it appropriate) either cancel it, or request that someone else take her place.
However, there are no grounds to conclude that the Committee was wrong to find
that the second respondent had not breached any Rule.
Issue (g): Negative comments about Mrs Holmqvist’s age
[26] The appellants submitted that the Committee’s finding that the second
respondent’s comment was “unfortunate” was “much too weak”, and that the
comment was “downright offensive”. The Committee appears to have accepted the
second respondent’s response that his comment was that “older people might not
appreciate the need for internet advertising”. The Committee said that the comment
was “unfortunate” but found that it did not breach any rule, or amount to conduct
worthy of a disciplinary finding.
[27] The second respondent’s comment was clearly inappropriate, and he should
have realised that even if some people would let it pass, others would be offended.
That said, we are not persuaded that the Committee was wrong to find that the
second respondent had not breached any rule.
Issue (h): Did not insert a “sunset clause” in a pre-auction offer:
[28] The appellants submitted that the Committee had missed the point: that with a
written addendum on the offer, an “oral agreement” to the effect that the offer would
be open until the next morning “would have been secured”. They also submitted that
the Committee was wrong to find that the second respondent could not be blamed for
the perceived shortcomings of another agent.
They submitted that the second
respondent could be held liable, as he and the other agent were colleagues, working
for the same company.
[29] We are not persuaded that the Committee was wrong in not upholding this
complaint. As was submitted on behalf of both the the first and second respondents,
the addition of any clause to the written offer, whether by way of a written addendum
or otherwise, required the offerors to agree in writing. The offerors’ agreement could
not have been sought by the second respondent, as they were not his clients. Further,
as the first respondent submitted, the second respondent was not under any duty to
supervise the other agent, or to direct her to obtain the offerors’ agreement to insert a
sunset clause.
Issue (i): Approached a friend of the appellants at the auction and attempted to get
her to list her property
[30] The appellants objected to the Committee’s observation that “inquiring
whether a person is looking to sell is sensible practice by a salesperson at an
auction”. They submitted that this was something they did not pay for, or instruct the
second respondent to do. They also objected to the Committee’s statement that
“most vendors would expect that salespeople attending [an auction] would make
such inquiries to identify potential buyers”.
[31] This issue was raised in the appellants’ complaint, but not in their notice of
appeal. In the complaint they said that “when his one and only “buyer” did not show
up … Gaston Coma desperately tried to persuade one of our friends, present at the
auction, to sell her house through him. … she was at the auction as a friend/observer,
he was at the auction to sell our house.”
[32] In dealing with this aspect of the appellants’ complaint the Committee also
commented on the appellants’ complaint that on the day after the auction the second
respondent sent them email in which he said (among other things) “I had a great day
today”. The appellants said in their complaint that the second respondent’s email
“only added to our unhappiness” at a time when they were “in total chaos and
disbelief and depressed after a ghastly auction”. The Committee commented that the
appellants’ “criticism of [the second respondent] was unwarranted and unfair”. This
was not an issue that the Committee was required to determine.
[33] Notwithstanding that observation, there are no grounds to find that the
Committee was wrong in finding that the second respondent was in not breach of any
Rule when he approached the appellants’ friend, and to dismiss this aspect of the
appellants’ complaint.
Issue (j): Did not provide a list of people who attended the auction
[34] This is also a matter that was raised in the appellants’ complaint and their
appeal submissions, but not in their notice of appeal. It can be dealt with quite
shortly. The Committee is a specialist body with expertise in the industry. It was not
wrong to find that it is not common for a list to be taken of people attending an
auction, and that the second respondent was not at fault in not doing so.
Issue (k): Holiday
[35] The appellants objected to the Committee’s statement that it was “unreasonable
of [them] to expect that agents would not take a break at work at a time when few or
no buyers would be active”.
They submitted that other agents they had consulted
held the opposite view – that the holiday period attracts “many house-hunters, as
they have the time at their leisure”.
[36] The second respondent’s email of 23 December advised the appellants:
I’m on holidays till the 12th of January. However, I’ll react to any phone calls.
[37] The Christmas/New Year period came reasonably soon after the appellants’
property failed to sell at auction. It would have been better practice for the second
respondent to have made personal contact with the appellants, and explained that he
was going on holiday, but would be keeping up with enquiries concerning the
property and would respond to telephone calls (and presumably emails) during his
absence. It is apparent from the material before the Committee that the second
respondent did maintain contact with the appellants, and did deal with enquiries
about the property.
[38] In the light of the Committee’s finding that the second respondent advised the
appellants of his absence, and maintained communication with them, it was not
required to determine whether the appellants’ criticism of the appellants was
“reasonable”, or “unreasonable”. However, there are no grounds for a finding that
the Committee was wrong to dismiss this aspect of the Complaint.
Issue (l): Timing of the advertisement in the Herald on Sunday
[39] The appellants accept that the date on which an advertisement appeared was
out of the second respondent’s control, but submitted that he was tardy in following
the matter up.
[40] It is apparent from the material before the Committee that if the appellants’
property was advertised in the Herald (in paid advertisements) then, entirely at the
Editor’s prerogative, an editorial about the property could also be published, at no
cost. Between 17 and 19 November there was communication between the second
respondent, the Agency’s marketing department, the Herald’s account manager for
real estate advertising, and the appellants, concerning the second respondent’s
application for a free editorial.
[41] On 19 November 2014, the Herald advised that editorial spaces were booked
up until 3 December. The Agency made a further request on 2 December, and was
told on 8 December that editorial space was booked until the end of January 2015.
The Herald offered a “backup option” for publication on 10 January. The appellants
were advised of the backup option. The editorial appeared on 17 January.
[42] We are not persuaded that the Committee was wrong to find that the second
respondent was not in breach of any Rule in respect of his effort to obtain a free
editorial, or his communication with the appellants regarding those efforts.
Issue (m): Advertising after the listing agreement was cancelled
[43] The appellants submitted that the Committee was wrong to dismiss their
complaint that their property was advertised by the Agency after the listing
agreement was cancelled, and that they had to ask the Agency on 2 February 2015 to
stop advertising it on the internet. The listing with the Agency was extended for two
weeks from 16 January 2015, with Mr Craig Smith replacing the second respondent
as agent (the Herald editorial appeared on 17 January), and ended on 30 January. An
email communication within the Agency, dated 30 January 2015, advised all
salespeople that the listing was cancelled.
[44] It is evident that the second respondent was not the listing salesperson for the
property after 15 January 2015, so was not in control of advertising from that date.
We are not persuaded that the Committee was wrong in not upholding this aspect of
the appellants’ complaint.
Overall assessment
[45] In this case the Committee considered that appellants’ complaint, as it was
required to do under s 79(1) of the Act. A determination not to inquire into the
complaint was one of the discretionary options available to it under s 79(2).
[46] While we have some concern as to the manner in which the second respondent
managed the agency and his dealings with the appellants, the appellants have not
established any grounds on which we could refer their complaint back to the
Committee for it to undertake an inquiry
Outcome
[47] The appeal is dismissed
[48] Pursuant to s 113 of the Act, the Tribunal draws the parties’ attention to s 116
of the Act, which sets out appeal rights. Any appeal must be filed in the High Court
within 20 working days of the date on which the Tribunal’s decision is served. The
procedure to be followed is set out in part 20 of the High Court Rules.
____________________
Hon P J Andrews
Chairperson
_____________________
Mr J Gaukrodger
Member
______________________
Ms N Dangen
Member
[2017]
NZREADT 15 - Holmqvist