Morris v Real Estate Agents Authority - [2016] NZHC 2383

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2016-404-176 [2016] NZHC 2383

BETWEEN
WALLACE LIONEL MORRIS

Appellant

AND

THE REAL ESTATE AGENTS AUTHORITY

Respondent

Hearing: 28 June 2016

Appearances:

R O Parmenter for Appellant
C P Paterson for Respondent

Judgment:

7 October 2016

JUDGMENT OF PAUL DAVISON J

This judgment was delivered by me on 7 October 2016 at 10am pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:
Meredith Connell, Auckland

MORRIS v THE REAL ESTATE AGENTS AUTHORITY [2016] NZHC 2383 [7 October 2016]

[1] The appellant is a licensed salesperson under the Real Estate Agents Act 2008 (the Act).

[2] He appeals the decision of the Real Estate Agents Disciplinary Tribunal (the

Tribunal), wherein it was found that he was guilty of misconduct pursuant to s

73(c)(iii) of the Act by wilfully or recklessly contravening the following rules contained in the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012:

(a) Rule 6.1: a licensee must comply with fiduciary obligations to the licensee's client;

(b)Rule 6.2: a licensee must act in good faith and deal fairly with all parties engaged in a transaction; and

(c) Rule 6.4: a licensee must not mislead a customer or client, nor provide false information, nor withhold information that should by law or in fairness be provided to a customer or client.

Background

[3] The appellant is a shareholder in and a salesperson for Space Realty Ltd.

[4] On 12 June 2012, the appellant, as “advisor”, attended a meeting held by the

trustees of the Maranatha Charitable Trust (MCT).

[5] The trustees of MCT are Mr Massam and Ms Ruissen.

[6] The appellant was well known to Mr Massam, but not Ms Ruissen.1

[7] At the time of the meeting, MCT owned 63 Great North Road (“the Battery

Building”); 65 Great North Road (“Maranatha Building”) and 3 Pollen Street. The

1 Mr Ruissen met the appellant for the second time on 12 June 2012, having previously met him on 16 December 2011.

purpose of the meeting was to discuss options in respect of MCT’s properties. Ms

Ruissen explained:

Options discussed included retaining and renovating the properties, or selling the properties and reinvesting the funds. One of the options discussed, should the Great North Road Properties be sold, was the Trust investing in the 297A Church Street site.

The meeting minutes record that I asked [the appellant] for his advice on the options.

He advised that money spent renovating the Great North Road Properties might not be recovered in any future sale. He also gave advice on the possibility of selling the 63 Great North Road site separately.

…

The minutes record that “after considerable discussion”, we agreed to seek to sell the Great North Road Properties at a premium and that we authorised [the appellant] to “continue negotiations to that end.”

The minutes further record that it was agreed that proceeds from the sale of
the Great North Road Properties could be used… for the purchase of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] NZHC 2383
Decision Date: 7 October 2016

CaseChat Overview and Summary

The appeal by Wallace Lionel Morris, a licensed real estate salesperson, against a decision of the Real Estate Agents Disciplinary Tribunal was dismissed by Justice Paul Davison. The Tribunal had found Morris guilty of misconduct for breaching fiduciary obligations, acting in bad faith, and misleading a client. Morris had failed to disclose his prior dealings with one of the trustees of the Maranatha Charitable Trust, which owned several properties, during a meeting to discuss selling those properties. Justice Davison upheld the Tribunal's decision, stating that Morris's failure to disclose relevant information about the properties and his financial interests in the transactions constituted a breach of professional conduct rules. The judge rejected Morris's arguments that disclosing the information would not have affected the trustee's decisions and that he owed a duty of confidentiality to the other trustee. The Court held that Morris's conduct was a clear departure from professional standards, warranting the Tribunal's decision. The respondent was awarded costs on a 2B basis, along with reasonable disbursements.

Orders