BEFORE THE REAL ESTATE AGENTS DISCIPLINARY TRIBUNAL [2016] NZREADT 39 READT 039/15 IN THE MATTER OF BY a charge laid under section 91 of the Real Estate Agents Act 2008 THE REAL ESTATE AGENTS AUTHORITY (CAC 405) AGAINST KAREN PHILLIPS Defendant MEMBERS OF TRIBUNAL Ms K Davenport QC Mr J Gaukrodger Ms N Dangen Deputy Chairperson Member Member HEARD at AUCKLAND on 6 May 2016 DATE OF DECISION 10 June 2016 APPEARANCES Ms Lawson Bradshaw for the CAC Ms Philips in person DECISION OF THE TRIBUNAL [1] Karen Phillips has now retired from real estate agency work but in 2014 she was a real estate agent with United Real Estate in Warkworth. The charge that she faces arises out of her actions in allowing a third party to graze her horse on land that did not belong to Ms Phillips. She had no consent to graze the horse and received agistment for the grazing. [2] Joanne Harvey owns a vacant block of land in Whangapiro Valley Road, Whangapiro, Northland. Ms Harvey lives approximately 30 to 40 kilometres away from the property. She visits the property maybe once or twice a year. Prior to winter 2013 Ms Harvey had been trying to sell the property and a for sale board had been erected on the land. Ms Phillips saw this board and phoned Ms Harvey to ask two things, first would she be interested in having Ms Phillips try to sell the land for her and second would she allow horses to graze the block? Ms Harvey s evidence is that she told Ms Philips that she did not want to sell the land but that she would think about the grazing. She took Ms Phillip s phone number and later called her back, leaving a message on her phone saying she did not want horses on the property. Her reason for this was that the property had no water; only a small stream on the property which was normally dry.
2 [3] In November 2014 Ms Harvey heard from a friend that a horse was grazing on her property. She found out that the horse belonged to a Ms Tollenaar. She went to Ms Tollenaar s workplace, Mirrors Hair Boutique in Warkworth, and asked her whether she had a horse grazing on her property. Ms Tollenaar said she did and Ms Harvey said that she was trespassing. Ms Tollenaar and Ms Harvey discussed the matter and Ms Tollenaar told Ms Harvey that Ms Phillips had organised for the horse to be on the land. Ms Tollenaar said that Ms Phillips was one of her customers at the hair salon and had overheard her saying she needed somewhere to graze her horse. Mrs Harvey had offered Ms Tollenaar first one piece of land to graze on and then Ms Harvey s property. Ms Tollenaar told Ms Harvey that she had paid Ms Phillips $20 a week for approximately a month and then given her a free haircut in return for the grazing. Ms Tollenaar s horse had been on the land since August 2014. [4] Ms Phillips was apologetic and subsequently returned some cash to Ms Tollenaar but by agreement between Ms Tollenaar and Ms Harvey this has not yet been passed on to Ms Harvey. [5] Ms Harvey also told the Tribunal that her neighbours had her phone number. She also told the Tribunal that she had previously allowed people to graze calves on the property for short periods of time. [6] Ms Tollenaar gave evidence by telephone. She confirmed that she had been told by Ms Phillips that she might be able to provide grazing for her on Ms Harvey s land and that Ms Phillips subsequently confirmed or allowed Ms Tollenaar to believe that Ms Harvey had given permission. She said that she paid her cash for one month and then had done some hairdressing for her in lieu of grazing. [7] Ms Phillips attended the hearing and gave evidence. She essentially agreed with the evidence set out above but said that she had not asked Ms Harvey about grazing horses on the land when she made the initial contact because she had no horses that she was interested in grazing at that time. She said she had contacted Ms Harvey to ask whether it would be permissible for her three or four cattle to graze temporarily on the property on their way to the cattle yards. She said Ms Harvey had given her consent for this. She told the Tribunal that she was simply trying to help Ms Tollenaar find a grazing spot for her horse and was used to country ways where grazing on another person s land was always possible. She said that she meant to speak to Ms Harvey and made efforts to find her by trying to find her phone number and calling her last known address, but the people who answered the phone did not have any forwarding address for Ms Harvey and she could not find her any other way. She said that she had not made any profit on the grazing and the money had been returned to Ms Tollenaar in the same envelope as she had received it from Ms Tollenaar. She accepted that it was the wrong thing to do but explained at the time that she was under significant pressure because she was recently widowed and trying to keep her farm together. She told the Tribunal that she has recently retired from real estate agency work. [8] The decision for the Tribunal is whether receiving money and allowing another person to graze on a property that neither person had a right to occupy is misconduct under s 73. The conduct complained of is not real estate agency work so the Tribunal need to decide whether: (i) there is a link between the conduct complained of and Ms Phillips s real estate agency work; and
Issue 1 (ii) if so is the conduct is disgraceful conduct in terms of s 73. 3 Is there a causal link between the real estate agency work and the events described above? Answer: Yes. [9] The reason that Ms Phillips made contact with Ms Harvey initially was because of a sign on the property showing that it had been for sale. Ms Phillips wanted to see whether or not she could persuade Ms Harvey to list the property with her as a real estate agent. The initial approach was therefore for real estate purposes. Further any allegation of dishonesty or receiving money under false pretences is relevant to and directly linked to the agent s real estate work and to the honesty and integrity required from every real estate agent. It goes without saying that when an agent is entrusted to go into homes unaccompanied that they need to be reliable, trustworthy and honest. [10] Issue 2: is this disgraceful conduct? [11] Is the conduct described in the facts disgraceful conduct? Disgraceful conduct has been described by this Tribunal in CAC v Downtown Apartment Limited [2010] NZREADT 6 at [48 59]. The Tribunal said in that decision that the words disgraceful conduct were not a term of art, and that each case must be judged on its own facts but the conduct must be a marked or serious departure from accepted standards. [12] The facts in this case are not the most serious example of a party dishonestly accepting money. The Tribunal accept Ms Phillips s explanation that she genuinely wished to find Ms Harvey and seek her consent. The money that she received has been returned although there has been no accounting for the haircut that she was given in lieu of Ms Tollenaar making the agreed payments of $20 a week. However the fact remains that Ms Phillips allowed Ms Tollenaar to place her horse on land that did not belong to Ms Phillips and on land which she had no permission to use. She took money from Ms Tollenaar and allowed the situation to go on without either being able to contact Ms Harvey prior to the grazing being arranged or immediately thereafter. [13] If the grazing had been an emergency and Ms Phillips believed that Ms Harvey would consent to the grazing, but after some weeks could not find her, then the correct thing to have done was to have advised Ms Tollenaar this, to have repaid the money and advised Ms Tollenaar that she would need to move the horse. However Ms Phillips did not do this she simply gave up trying to find Ms Harvey and allowed the unauthorised grazing to continue. Is this serious enough to amount to misconduct? [14] The Tribunal have considered the statement set out by the Court of Appeal in New South Wales in Pillai v Messiter (No. 2) [1989] 16 NSWLR 197 where the Court said: Departures from elementary and generally accepted standards of which a practitioner could scarcely be heard to say that he or she was ignorant, could
4 amount to such professional misconduct but the statutory test for misconduct is not met by mere professional incompetence or by deficiencies in the practice of the profession something more is required, it requires a deliberate departure from accepted standards or such serious negligence as, although not deliberate to portray indifference and abuse of the privileges which accompany registration. [15] The Tribunal have also considered the statements made by this Tribunal in CAC v Gollins [2015] NZREADT 2. That case involved a more serious breach of the agent s obligations in that he tried to pass off an agency agreement which was signed two years after the event as a document signed at the time of the listing so as to obtain commission. In that case the Tribunal said at paragraph [42]: Dishonesty of any nature runs contrary to the principles of registration and privilege that go with any registration. As Tribunals and Courts have said in numerous cases, registration as a professional lawyer, doctor and real estate agent carries with it privileges but also the highest obligation to behave in a certain way. Dishonesty of any type is met with the highest degree of disapprobation by registration bodies and by members of the public who must retain confidence in the honesty and integrity of agents. [16] The Tribunal also notes that the purpose of professional disciplinary cases are to both maintain professional standards and to protect the public. [17] For these reasons and for the following factual reasons the Tribunal have concluded that Ms Phillips s conduct does amount to disgraceful conduct: (i) (ii) (iii) (iv) Ms Phillips arranged for the grazing knowing that she had not contacted Ms Harvey i.e. she never believed she had permission to graze. She accepted money for the grazing and a haircut in lieu of money knowing she had not contacted Ms Harvey. Despite not being able to contact Ms Harvey she made no effort to end the arrangement with Ms Tollenaar which continued for a period of three and a half months, and presumably would have continued further had Ms Harvey not discovered the grazing. Ms Phillips first contacted Ms Harvey in her role as an agent and it was as an agent that she gained the knowledge that the land was empty and would remain empty. [18] For these factors we consider that reasonable members of the public and agents of good standing would consider the conduct as disgraceful conduct. The Tribunal consider that Ms Philips unauthorised use of another s property for her own gain is disgraceful conduct. The charge is accordingly established. Penalty [19] The penalty should reflect the fact that this was not a very serious case of dishonesty and the money appears to have been returned to Ms Tollenaar. Further Ms Phillips is no longer working as an agent. Accordingly the Tribunal imposes the following penalty on Ms Phillips:
5 A. We censure Ms Phillips. B. We fine Ms Phillips the sum of $500, payable to the Real Estate Agents Authority within one calendar month of the date of this decision, which recognises that she will not be returning to work as an agent and that these events took place at a time of personal difficulty for Ms Phillips. [20] The Tribunal draws the parties attention to the provisions of s 116 of the Real Estate Agents Act 2008. Ms K Davenport QC Deputy Chairperson Mr J Gaukrodger Member Ms N Dangen Member