Before the Complaints Assessment Committee
Complaint No: C31322
In the matter of

Part 4 of the Real Estate Agents Act 2008

and
Licensee 1:

Brett Phillip Smith (20037989)

Decision on Orders
4 March 2020

Members of Complaints Assessment Committee: CAC520
Chairperson:
Bernardine Hannan
Deputy Chairperson:
Peter Brock
Panel Member:
Craig Edwards
C31322 Orders

 Complaints Assessment Committee
Decision on orders
1.

Background

1.1.

On 26 November 2019 the Complaints Assessment Committee (the Committee) found Brett
Phillip Smith (the Licensee) guilty of unsatisfactory conduct under section 89(2)(b) of the Real
Estate Agents Act 2008 (the Act).

1.2.

The Complainant and the Licensee were given the opportunity to make submissions to the
Committee on orders.

2.

Orders

2.1.

Having made a finding of unsatisfactory conduct, the Committee makes the following orders
against the Licensee pursuant to section 93(1) of the Act:
a) He is censured;
b) He is ordered to pay the Authority a fine of $6,000 within 21 working days of the date of
this decision.

3.

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 1.

3.4.

In the leading case on the principles relevant to professional disciplinary cases, Z v Dental
Complaints Assessment Committee2, the Supreme Court affirmed that consumer protection
was a central focus of professional disciplinary cases.

Maintaining professional standards
3.5.

1
2

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

Section 3(2)
[2008] NZSC 55

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 proceedings.
3.6.

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

3.7.

make sure that no person who is unfit because of his or her conduct is allowed to practice
in the profession in question;
protect both the public and the profession itself against persons unfit to practice; and
enable the profession or calling, as a body, to ensure that the conduct of members
conforms to the standards generally expected of them.

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 practitioner
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 practitioner 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 Committee3 the High Court
summarised these other factors as follows:
a.

Punishment of the professional;

b.

Rehabilitating and reintegrating the professional into the profession, if the professional is
capable of that;

c.

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

d.

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;

e.

The penalty must involve imposition of the least restrictive penalty that can be
reasonably imposed in the circumstances; and

f.

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

4.

Discussion
The decision

4.1.

3

The Committee made four separate findings of unsatisfactory conduct against the Licensee,

[2015] NZHC 3063 at paragraph 16

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 being he:
a) Provided false and misleading advice to the Complainant about when he followed up
with five open home attendees;
b) Provided false and misleading advice when he told the purchasers he had spoken to the
Complainant about rotten weatherboards when he had not;
c) Failed to advise prospective purchasers an offer had been made;
d) Failed to follow the Complainant’s instruction for a counteroffer.
4.2.

The Committee found that the Licensee had deliberately misled the Complainant by telling
her he had contacted all open home attendees when he had not. This conduct is aggravated
by the Licensee backdating the time he contacted prospective purchasers in the agency
software.

4.3.

The Committee also found that the Licensee deliberately mislead the purchasers by telling
them he had spoken with the Complainant about rotten weatherboards when he had not.

4.4.

The Licensee failed to advise prospective purchasers an offer had been made despite telling
the Complainant he would do so.

4.5.

The Licensee deliberately failed to follow the Complainant’s instruction about the amount of
her counteroffer.

4.6.

Submissions

4.7.

The Complainant submits:
a) The Licensee should be fined;
b) The commission she paid to the agency for the transaction should be refunded to her;
c) Dealing with “them” was stressful;
d) The Licensee deliberately left her out of email conversations regarding the final
inspection and hand over [settlement] of the Property;
e) The Licensee does not do a fair and honest job;
f)

The Property was not sold for a premium price.

4.8.

The director of the agency the Licensee works for made a submission on the Licensee’s
behalf.

4.9.

The director of the agency submits:
a) The allegation that the Complainant was left out of communications relevant to final
inspection and hand over is false;
b) It is malicious for the Complainant to refer to the Licensee and the agency as liars, cheats
and dishonest;
c) The Licensee is one of the highest independently rated agents in the country;
d) The Licensee and the agency can do better and the Licensee has undertaken additional
non-verifiable training and workshops;
e) The sale price achieved was a premium sale price, the commission had already been
heavily reduced to $5,000 including GST and commission is only refunded for serious
misconduct;

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 f)

The Licensee is prepared to provide a written apology;

g) Any fine should be very low because the conduct is at the low end of severity;
h) The decision should not be published because “they” did act in the best interests of the
Complainant and to publish the decision will have an impact on the Licensee’s mental
state and livelihood and on the agency business.

Reasons for the orders
Agency and fresh allegation

4.10.

In her submissions the Complainant refers to “them” and in the agency director’s submissions
he refers to “we”.

4.11.

The Committee has not investigated a complaint against the agency and has made no findings
against the agency. The document which outlined the complaint was titled “Complaint from
[Complainant] in regards to Brett Smith.” Nothing in the text of the complaint indicated it
was against the agency as well. Prior to the complaint being referred to the Committee an
Authority facilitator confirmed a summary of concerns with the Complainant and those
concerns only related to the Licensee.

4.12.

The Committee does not express any opinion about the conduct of the agency. Its decision
deals solely with the conduct of the Licensee.

4.13.

The Complainant raises a fresh allegation in her submissions. She says the Licensee
deliberately left her out of email conversations relevant to settlement of the sale of the
Property. This allegation was not part of the complaint and the Committee has not
investigated it. It is not relevant to this orders decision.
Censure and fine

4.14.

Honesty and good faith are central to the fiduciary duty which an agent owes to a client. The
Licensee was required to act honestly and in good faith in his dealings with the Complainant.
He did not act honestly and in good faith when he deliberately misled the Complainant by
telling her he had contacted all open home attendees when he had not and by backdating the
agency software to support his false and misleading statement. He did not act honestly and
in good faith when he told the purchasers that he had spoken to the Complainant about the
rotten weatherboards, when he had not. He also breached his fiduciary duty to the
Complainant when he failed to follow her specific instruction as to the amount of a
counteroffer and when he told her he would advise prospective purchasers of an offer and
did not.

4.15.

The penalty aspect of the orders made by the Committee must reflect the Licensee’s breach
of fiduciary duty to the Complainant, the fact four separate unsatisfactory conduct findings
are made and that those unsatisfactory conduct findings involve breaches of five different
rules4.

4.16.

The agency director submits any fine should be low because the conduct of the Licensee “...is
at the low end of severity.” He refers to three Complaints Assessment Committee (CAC)
decisions as much more serious. He does not say how the circumstances of these decisions
and the penalties imposed are relevant to, or compare with, the Licensee’s conduct in this
case.

4

Rules 6.1, 6.2, 6.3, 6.4 and 9.1 as set out in the Committee’s substantive decision dated 26 November 2019

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 4.17.

C24399 is not comparable to this case. It involved offering a property for sale when the
agency agreement had expired. The vendor had not signed a renewal which had been
presented for signature. The vendor continued to engage with the licensees despite there
being no signed agency agreement. The CAC described the breach as “not trivial” and fined
the most culpable licensee $3,000.

4.18.

C28344 involved a licensee interested in a purchase who failed to comply with the conflict of
interest provisions of the Act5 and who failed to complete a Form 2. While involving a breach
of fiduciary duty, this case did not involve the licensee misleading a client. The CAC described
the conduct as being at the “lower end” and fined the licensee $1,500.

4.19.

C26065 is not comparable to this case. It involved a failure to exercise proper care and skill
where two licensees failed to notice a clause inserted by a purchaser was not in the
agreement presented to the vendor for signature. The CAC described the conduct as not
deliberate and fined one licensee $3,500 and the other (who was considered less culpable)
$1,000.

4.20.

The Committee does not agree with the submission that the conduct of the Licensee is at the
low end of severity. The CAC decisions referred to provide no support for an argument that
the conduct in this case is at the low end of severity. Those cases did not involve multiple
breaches of the rules, several breaches of fiduciary duty and deliberately misleading a client.

4.21.

However, the Committee has taken into account that the Licensee has no previous
disciplinary findings against him when deciding on the orders made.

4.22.

The Committee places the Licensee’s conduct in the high range for unsatisfactory conduct.
The Committee has jurisdiction to impose a fine up to a maximum of $10,000.6 A high fine is
justified. The fine is discounted to reflect the Licensee has no previous disciplinary findings
against him.

4.23.

The Committee censures the Licensee and fines him $6,000.
Apology

4.24.

The agency director says the Licensee would accept a direction for a written apology. The
Complainant does not seek an apology.

4.25.

The Committee considers that, in the circumstances of this case, an apology would be
ineffective. The Licensee and the agency seem not to comprehend the seriousness of the
Licensee’s conduct and the reference to her allegations against the Licensee being
“malicious” suggest an apology would not achieve anything for the Complainant.

4.26.

An apology is not ordered.
Commission

4.27.

The Complainant seeks a refund of commission.

4.28.

On behalf of the Licensee, the agency director submits that a premium price was achieved for
sale of the Property. The Complainant disputes this saying she sold it for what she purchased
it for. The property sold for $565,000. The appraisal advised comparable properties ranged
between $516,500 and $590,000, provided an appraisal range of $525,000 to $575,000 and a

5
6

Section 134-136 of the Act
Section 93(1)(g) of the Act

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 recommended asking price of $575,000. The Committee has no evidence from which it could
infer the Property sold for a premium or that it was sold for less than could otherwise have
been achieved in the market at the time.
4.29.

The Committee does not accept the submission that the commission paid by the
Complainant had been “heavily reduced” because the average commission in the area is
much higher than what she was charged. There is no evidence from which the Committee
could infer the agency offered the Complainant a commission which was discounted from its
normal commission. If the agency charges less than other agencies that does not mean the
commission has been “heavily reduced”.

4.30.

The Committee has the jurisdiction to order a licensee to “…reduce, cancel or refund fees
charged for work where that work is the subject of the complaint.”7 The jurisdiction is not
limited to “serious misconduct” as argued by the agency director and there is no requirement
that a complainant suffer a loss or financial detriment. However, the Committee accepts that
the seriousness of the conduct and the consequences of it are factors to be taken into
account when considering whether to order a refund of fees charged/commission.

4.31.

As the agency is not a party to the complaint and no findings are made against it the
Committee has only considered whether it is appropriate to order the Licensee to reduce or
refund his commission share.

4.32.

The Committee has decided not to order the Licensee to reduce or refund his commission
share. In making this decision, it has taken into account that there is no evidence the
Property sold for less than what was achievable at the time or that the Complainant has
suffered a loss of any kind. The Committee considers the level of fine imposed on the
Licensee appropriately reflects his conduct.

5.

What happens next
Publication

5.1.

The agency director requests that the decision not be published.

5.2.

One of the functions of a Committee is to publish its decisions.8 However, subject to acting in
a way consistent with natural justice, a Committee “…may… direct such publication of its
decisions…as it considers necessary or desirable in the public interest.”9

5.3.

By section 66 of the Act the public register must contain the details of “…any action taken on a
disciplinary matter in respect of [a licensee] in the last 3 years…” If the Committee directed
this decision not be published to achieve the de facto suppression of the Licensee’s name, the
direction would be made ineffective as a consequence of section 66 of the Act.

5.4.

The Tribunal (in proceedings before it) has a wider power to restrict publication and suppress
names “…having regard to the interest of any person (including (without limitation) the privacy
of the complainant (if any)) and to the public interest…”10 In Y v Attorney-General11 the Court
of Appeal outlined how name suppression should be approached in civil cases. It confirmed
the principle of the open justice means there is a presumption of disclosure in civil proceedings
and a court would need to have sound reasons for displacing the presumption. Further an

Section 93(1)(e) of the Act
Section 78(h) of the Act
9
Section 84(1) and (2) of the Act
10
Section 108(1) of the Act
11
[2016] NZCA 474
7
8

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 applicant for name suppression would need to point to factual material justifying departure
from the presumption of open justice.
5.5.

Notwithstanding the fact that directing non-publication would be ineffective, the Committee
has considered the merits of the submission seeking non-publication of its decision. It is not
persuaded there is any basis for directing non-publication of its decision. In making this
decision the Committee has taken guidance from section 108(1) of the Act and Y v Attorney
General (supra).

5.6.

The agency director’s argument is that despite the findings against the Licensee, he acted in
the best interests of the Complainant and publication could be damaging for the business
“…and we will feel upset and unjust if a decision is made to publish.” There is no evidence of
any specific consequence of publication. Some damage to reputation is always a likely
consequence of publication of a disciplinary decision but that is far outweighed by the
purposes of publication. No evidence has been provided to the Committee which would justify
displacing the presumption of open justice. Further, publishing the Committee’s decision
supports the purpose of the Act by ensuring that the disciplinary process remains transparent,
independent and effective.

5.7.

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
he worked at the time of the conduct.

Your right to appeal
5.8.

If you are affected by this decision of the Committee, the right to appeal is set out in section
111. You may appeal in writing to the Real Estate Agents Disciplinary Tribunal (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.

5.9.

For further information on filing an appeal, refer to the Real Estate Agents Disciplinary Tribunal
website (https://www.justice.govt.nz/tribunals/real-estate-agents/).

Signed

Peter Brock
Date: 4 March 2020

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 Appendix: Relevant provisions
The Real Estate Agents Act 2008 provides:
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

89

(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.

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:

(3)
93

(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.

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.

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)

Decision on Orders

to rectify, at his or her or its own expense, any error or omission; or

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 (g)
(h)

(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;
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;
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)
(2)
111

order the licensee to pay the complainant any costs or expenses incurred in
respect of the inquiry, investigation, or hearing by the Committee.

An order under this section may be made on and subject to any terms and conditions
that the Committee thinks fit.

Appeal to Tribunal against determination by Committee

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.

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