MA v Auckland Council
[2017] NZHC 1274
•12 June 2017
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CRI-2017-404-115
CRI-2017-404-116 [2017] NZHC 1274
BETWEEN QIANLI MA (ALSO KNOWN AS
CHARLIE MA) First Appellant
YAO LU (ALSO KNOWN AS ELAINE LU)
Second Appellant
AND
AUCKLAND COUNCIL Respondent
Hearing: 6 June 2017 Counsel:
M Keall for Appellants
V Tamatea for RespondentJudgment:
12 June 2017
JUDGMENT OF BREWER J
This judgment was delivered by me on 12 June 2017 at 3:00 pm pursuant to Rule 11.5 High Court Rules.
Registrar/Deputy Registrar
Solicitors:
Duncan King (Auckland) for Appellants
Auckland Council (Auckland) for Respondent
MA & LU v AUCKLAND COUNCIL [2017] NZHC 1274 [12 June 2017]
Introduction
[1] The appellants are licensed real estate agents. Every year they must apply for renewal of their licences if they wish to continue to work as real estate agents.1 A criterion for renewal of their licences is that they satisfy the Registrar2 that they are (individually) fit and proper persons to hold a licence.3
[2] In 2016, the appellants each pleaded guilty to three charges of carrying out building work without the required building consent.4 They attempted to persuade Judge M-E Sharp that they should be discharged without conviction. They did not succeed.5 They were convicted and fined $7,500 each.6 They now appeal the Judge’s refusal to discharge them without conviction. Their fear is that if their convictions stand then the Registrar (to whom they would have to report their convictions) might not renew their licences because he might not be satisfied they are fit and proper persons.
[3] I will allow the appeal if I am satisfied that Judge Sharp made an error and should have discharged the appellants without conviction.7
How does an offender get discharged without conviction?
[4] The law recognises that sometimes the consequences for an offender of being convicted of their offending will be so harsh that justice is better served by not entering a conviction. The test is set out in s 107 of the Sentencing Act 2002:
The court must not discharge an offender without conviction unless the court is satisfied that the direct and indirect consequences of a conviction would be out of all proportion to the gravity of the offence.
[5] This test raises a high threshold between an offender and a discharge without conviction. It is not enough to satisfy the Judge that the consequences of a
1 Real Estate Agents Act 2008, s 52.
2 The Registrar of the register of licences appointed by the Real Estate Agents Authority pursuant to s 12 of the Real Estate Agents Act 2008.
3 Real Estate Agents Act 2008, s 36(1)(c).
4 Building Act 2004, s 40(2).
5 Auckland Council v Lu & Ma [2017] NZDC 5491.
6 The Judge must have considered that one charge each could be representative of the offending.
On the other two charges each appellant was discharged without conviction.
7 Criminal Procedure Act 2011, s 250.
conviction would be disproportionate to the gravity of the offence. The Judge must be satisfied that the consequences would be out of all proportion to the gravity of the offence.
[6] To apply the test properly, a Judge must (as did Judge Sharp) conduct a three- step analysis:8
(a) Assess the gravity of the offending. That means first looking at all the relevant circumstances of the offending and of the offender, and then standing back and deciding how serious the offending is.
(b)Determine the direct and indirect consequences of a conviction for the offender.
(c) Determine whether those consequences are out of all proportion to the gravity of the offending.
Did the Judge make an error such that the appellants should be discharged without conviction?
(a) The gravity of the offending
[7] Judge Sharp assessed the gravity of the offending as moderate. The appellants submit it was not so grave. They argue that the Judge focused unduly on some of the aggravating features of the offending without giving proper weight to the mitigating factors.
[8] Having looked at the circumstances of the offending and of the appellants, I find myself in agreement with Judge Sharp. The gravity of the offending cannot be characterised as less than moderate.
[9] The unauthorised work done by the appellants was extensive. They took a single residential home and converted it to three flats. There was significant
structural work to the garage and lower level. There was significant sanitary work.
8 Z (CA447/12) v R [2012] NZCA 599 at [8]-[9].
[10] The appellants knew they needed building consents. They chose not to apply for them. They have not said why they made that choice. It is submitted that the appellants should be given credit for being candid in their admission that their offending was deliberate. However, it is difficult to see how licensed real estate agents could profess ignorance of such a basic requirement.
[11] The motive for the offending was commercial gain. The appellants intended to make money by converting a single family home into three separate flats which they could rent out.
[12] There was a potential for harm. It is submitted for the appellants that a mitigating feature is that there was no actual harm and there is no criticism of the standard of the unconsented work. I take that as the absence of an aggravating feature. The point is that a policy underpinning the Building Act 2004 in requiring consents for alterations to residential properties is the protection of the public. Allowing tenants to rent properties with unconsented works has the potential for harm. That is why it is an offence not to have building consents and that is why the maximum fines are $200,000.
[13] It is submitted on behalf of the appellants that credit should be given because no commercial gain was actually made and the offending was of relatively short duration. I do not see that any credit is due. The offending ceased only because it was discovered. At the time it was discovered, the total rentals obtained by the appellants had not quite met the cost of the unauthorised work. It would have been a different story if the offending had gone undetected for a longer period.
[14] I regard the mitigating features as:
(a) Although having very little choice, the appellants entered early guilty pleas.
(b) The appellants were first time offenders.
(c) The appellants co-operated with the Council and eventually returned the property to its original state.
(d) There is some evidence of good character.
[15] I have had regard to two cases involving the Auckland Council to which I was referred.9 I do not find them particularly useful because cases in this area tend to be fact-specific.
(b) Consequences of a conviction
[16] As I have said, the consequence most feared by the appellants is that convictions will likely ensure that the Registrar will decline their applications for renewal of their real estate agents licences because he might not be satisfied they are fit and proper persons. Judge Sharp accepted this as a “real and appreciable risk”.10
I agree. I add that when determining the direct and indirect consequences of a conviction for the offender, the Court does not need to be satisfied that a consequence is inevitable. A real and appreciable risk is enough.
[17] The reason why the appellants fear this consequence is principally that their work as real estate agents is their only work. If they could not work as real estate agents then there would be severe financial consequences for their family. They have no qualifications or relevant work experience that would allow them to bring in the income they have consistently earned as real estate agents. Further, Mr Ma suffered a severe injury to one of his eyes. It is submitted that further study or retraining would be particularly difficult for him.
[18] Judge Sharp accepted also that there is a “real and appreciable risk” that Ms Lu would be unable to obtain New Zealand citizenship for at least three years if she is convicted.11 That is because a person convicted of any offence must wait a
minimum of three years before applying for citizenship.12 Once that period has
9 Auckland Council v Hannay DC Auckland CRI-2014-004-4045, 2 October 2014; Ba v Auckland
City Council [2015] NZHC 1639.
10 At [21]. See also DC (CA47/2013) v R [2013] NZCA 255 at [43].
11 At [23].
12 Citizenship Act 1977, s 9A(1)(c).
passed, the applicant must satisfy a number of requirements, including a good character requirement.13 A conviction will, it is submitted, “at least cast a shadow over her ability to meet the good character requirements as she would need to disclose all convictions.”14 Therefore, the appellants submit that a conviction would jeopardise Ms Lu’s citizenship application for at least the seven years required under the Criminal Records (Clean Slate) Act 2004.15
(c) Proportionality assessment
[19] There is one point which bears heavily on my assessment of proportionality that was not mentioned by counsel for the appellants. That surprised me since it is well known. I raised it with Mr Keall but his submission was that the identified potential consequence is so serious that the Court should intervene.
[20] The point is that the Court, when considering whether the consequences of a conviction would be out of all proportion to the gravity of the offence, usually leaves professional matters to the appropriate regulatory body.16 As has been held previously, the Court “should be hesitant to usurp the role of a professional body or a particular employer to decide the significance of a particular conviction.”17
[21] In this case, the appellants are real estate agents, and were real estate agents when they offended. The nature of the offending is broadly within the ambit of the work of a real estate agent. Real estate agents work with people who are buying and selling property, as well as with people who have property to let or who want to rent property as tenants.
[22] Parliament has recognised that because of the significance of the work that real estate agents do, they must be regulated. The purpose of the Real Estate Agents
Act 2008 (“the Act”) is:
13 Citizenship Act, s 8(2)(c).
14 Ba v Auckland Council, above n 9, at [41].
15 Sections 6-7.
16 Maraj v Police [2016] NZCA 279; Stewart v Police [2015] NZHC 165.
17 Stewart v Police, above n 16, at [30].
3 Purpose of Act
(1) The purpose of this 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.
(2) The Act achieves its purpose by—
(a) regulating agents, branch managers, and salespersons: (b) raising industry standards:
(c) providing accountability through a disciplinary process that is independent, transparent, and effective.
[23] Part of the process of regulation is that people who want to be, or continue to be, real estate agents must be identified as fit and proper people. It is the statutory responsibility of the Registrar (and the Real Estate Agents Authority) to decide whether licences should be issued to particular people. Section 36(1)(c) of the Act states specifically that an applicant must satisfy the Registrar that he or she is a fit and proper person to hold a licence. The Act contemplates that all relevant information will be supplied.
[24] Notwithstanding the above, the ultimate test in this case is still whether the consequences of a conviction on the appellants’ future employment would be out of all proportion to the gravity of the offence. Like Judge Sharp, I do not consider it is.
[25] The appellants intentionally committed moderate level offending in order to make a commercial gain. There is a potential for harm in cases of unconsented building works. There is a very significant need for denunciation and deterrence in offending of this kind. In my view, it would be quite wrong to hold that offenders who work within an industry related to the area of offending should be discharged without conviction to forestall the risk that the Registrar, exercising his statutory responsibility, might decide to refuse to renew the appellants’ licences.
[26] The Registrar is not permitted to act capriciously or unreasonably. He must take into account all of the factors that have been submitted to me. These include the mitigating factors. That is part of the exercise of his statutory responsibility. It is not one which, on the facts of this case, the Courts should attempt to forestall.
[27] So far as Ms Lu’s citizenship status is concerned, similar considerations apply, with the most serious potential consequence identified being merely delay. I do not give this potential consequence real weight. It is not enough to affect my overall evaluation of her case.
Conclusion
[28] The appeals are dismissed.
Brewer J
0
3
1