Prasad v Real Estate Agents Authority (Complaints Assessment Committee 416)
| Jurisdiction | New Zealand |
| Judge | Brewer J |
| Judgment Date | 28 February 2020 |
| Neutral Citation | [2020] NZHC 335 |
| Date | 28 February 2020 |
| Docket Number | CIV-2019-404-301 |
| Court | High Court |
UNDER Section 116 of the Real estate Agents Act 2008
IN THE MATTER of an appeal against a decision of the Real Estate Agents Disciplinary Tribunal dated 23 January 2019
UNDER Section 116 of the Real Estate Agents Act 2008
IN THE MATTER of an appeal against a decision of the Real Estate Agents Disciplinary Tribunal
[2020] NZHC 335
Brewer J
CIV-2019-404-301
CIV-2019-404-982
IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA
TĀMAKI MAKAURAU ROHE
Professional Discipline — appeal against a decision to suspend a real estate agent from practice — findings of misconduct — failure to inform prospective purchasers of roading project which would affect the property — falsifying diaries — whether the appellant's licence should have been cancelled — Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012 — Real Estate Agents Act 2008
No appearance by or on behalf of Indra Prasad
M J Mortimer for Real Estate Agents Authority
On 23 January 2019 the Real Estate Agents Disciplinary Tribunal found against Ms Prasad on two charges: 1
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[a] (First charge): A charge of misconduct under s 73(b) (seriously incompetent or seriously negligent real estate agency work) of the Real Estate Agents Act 2008 (“the Act”). The Committee alleges that in the course of marketing a property at Redoubt Road, Goodwood Heights, Auckland, and having become aware of an Auckland Council project which involved widening Redoubt Road, she failed to inform all potential purchasers of the road-widening by:
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[i] Failing to mention it during all open homes; and/or
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[ii] Failing to mention it during sales meetings or discussions with other licensees who were acting as selling agents; and/or
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[iii] Failing to bring it to the attention of potential purchasers or their representatives at the auction of the property; and/or
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[iv] Failing to mention it in any written information about the property provided to potential purchasers.
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[b] (Second charge): A charge of misconduct under s 73(a) (disgraceful conduct) of the Act. The Committee alleges that she retrospectively added or expanded entries to her diary relating to the marketing of the property, and to a transaction report relating to the property, so as to record that she had disclosed the road-widening project to potential purchasers and colleagues, and had facilitated disclosure of the road-widening at the auction of the property.
The Tribunal ordered Ms Prasad's licence to be suspended for 18 months. The Tribunal also censured Ms Prasad and ordered her to undertake further training and education.
Ms Prasad appeals the Tribunal's findings that the charges were proved.
The Real Estate Agents Authority (Complaints Assessment Committee 416) (“the Committee”) appeals the Tribunal's decision to suspend Ms Prasad's licence. It contends the Tribunal should have cancelled the licence.
This judgment decides both appeals.
Ms Prasad's notice of appeal was filed by her solicitors on 21 February 2019. On 17 June 2019 Ms Prasad advised the Court she would now act in person. The appeals were called on 18 June 2019 and, because of the change of representation, were adjourned until 16 July 2019.
On 16 July 2019 there was a further adjournment to 23 July 2019. Justice Powell provisionally set the appeals down for hearing on 11 December 2019.
On 23 July 2019 Powell J made timetabling directions. The 11 December 2019 fixture was confirmed.
On 7 November 2019, Ms Prasad not having taken any further steps, Powell J made a timetable order as to the filing of submissions.
Ms Prasad did not file any submissions. Instead, by email to the Registrar dated 3 December 2019, Ms Prasad applied for an adjournment on medical grounds. By Minute dated 5 December 2019, Wylie J declined to grant an adjournment.
Ms Prasad did not appear at the hearing before me on 11 December 2019. In the circumstances, I directed I would determine her appeal on the papers.
I heard submissions by Mr Mortimer on behalf of the Committee in relation to the Committee's appeal against penalty.
Ms Prasad was a licensed salesperson. She was, in 2016, engaged to sell a residential property. Among other duties, Ms Prasad conducted open homes from early January to 6 February 2016. During this period Ms Prasad learned that the property would be affected by the Redoubt Road-Mill Road Corridor Project. Road widening for the project would mean an area from the front of the property would be compulsorily acquired. Obviously, this would be of interest to prospective purchasers.
The property was sold at auction on 6 February 2016. Mr Verma, another salesperson engaged at the same agency as Ms Prasad, bid at the auction on behalf of the purchaser. The purchaser carried out renovations on the property and it was listed for sale by Mr Verma. The property went to auction again on 2 July 2016. Subsequently the successful bidders withdrew their offer after discovering that the road-widening project affected the property.
Eventually the purchaser lodged a complaint with the Real Estate Agents Authority. The essence of his complaint was that Ms Prasad was aware that part of the property would be acquired for road-widening, significantly diminishing its value, but Ms Prasad failed to tell him about this and failed to tell any other person either before or after the sale of the property at auction.
The purchaser alleged a financial loss of $160,000, made up of renovation costs of $40,000 and with the balance comprising a mixture of related costs and diminished property value.
On the first charge she faced, Ms Prasad's position was that after she learned of the road-widening she told open home attendees about it. The purchaser did not attend any open home but bought the property in reliance upon the marketing material.
Ms Prasad also said she told her fellow salespersons at staff sales meetings. She said she had a further conversation with Mr Verma about it at one of the open homes. Ms Prasad attended the auction and said she told the auctioneer, Mr Thorstensen.
Ms Prasad's evidence also was that before the auction she telephoned the vendor's solicitors and discussed the road-widening project, asking whether the matter should be included in the auction sale and purchase agreement. Ms Prasad said she was told not to put it in writing in the contract, but the auctioneer should be told to mention it at the auction. She said she reminded Mr Thorstensen to mention the road-widening, and he showed her an envelope with the road-widening highlighted. At the hearing she said this was an A4 size envelope, which Mr Thorstensen gave to her at the auction, and which she kept for some time in her car, then threw out.
The second charge came about because during the investigation Ms Prasad produced her diary which contained entries which she pointed to as corroborating her account of telling attendees at the open homes and her fellow salespersons about the road-widening. Ms Prasad also referred to a “Lister Transaction Report” as corroborating her account. This was a report which Ms Prasad was required to complete immediately after the auction. It contained the entry:
Total Do up — Told everyone of Rd widening check with MCC. Also Chetty came to the open home. I told him the opposite people said there is Rd widening to check with the council.
The charge alleged the diary entries and the entry in the report were inserted after Ms Prasad knew about the investigation, they were false, and intended by Ms Prasad to help avoid culpability for her conduct around not disclosing the road-widening.
Ms Prasad's notice of appeal set out her grounds of appeal as follows:
1.1 The Tribunal made an error of fact in finding that the appellant failed to disclose the road-widening issue to prospective purchasers and to other licensees, including the selling salesperson, Mr Verma.
(a) The Tribunal did not give sufficient weight to the evidence given by the appellant regarding such disclosure, or to the evidence of witnesses on the appellant's behalf, particularly open home attendees who confirmed that the appellant had made such disclosure to them.
(b) It did not consider, or give sufficient weight, to factors affecting the credibility of witnesses called on behalf of the Complaints Assessment Committee, particularly Mr Verma, who had a vested financial interest in selling the property as a result of commission that he would derive from the sale, and potential disciplinary exposure for his own failure to disclose the issue to the purchaser.
(c) Despite having the ability to regulate its own procedure, which would include the ability to adjourn the hearing and call for further evidence, the Tribunal did not seek to hear evidence from the vendors' solicitors, despite the evidence of the appellant that she specifically queried with them whether the road-widening issue should be included in the auction sale and purchase agreement but was advised that the auctioneer should be informed.
1.2 The Tribunal made an error fact in finding that the appellant backdated diary entries and other notations to record disclosures that were made.
1.3 Notwithstanding the appellants' denial that she failed to inform all open home attendees of the road-widening issues, the Tribunal made an error of law in finding that the appellant had a duty to disclose the issue to all open home...
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