Real Estate Agents Authority v Catley
[2020] NZHC 1904
•31 July 2020
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2019-404-002432
[2020] NZHC 1904
UNDER Section 116 of the Real Estate Agents Act 2008 IN THE MATTER
Of an appeal against the decision of the Real Estate Agents Disciplinary Tribunal
BETWEEN
REAL ESTATE AGENTS AUTHORITY
Appellant
AND
BRUCE CATLEY and TIMOTHY JOHN BOYLE
First Respondents
MARGARET FLANNINGAN and ROBERT FLANNIGAN
Second Respondents
Hearing: 5 May 2020 Counsel:
M J Hodge and R W Belcher for appellant
No appearance for respondents (attendances excused)
Judgment:
31 July 2020
JUDGMENT OF KATZ J
This judgment was delivered by me on 31 July 2020 at 3:00 pm pursuant to Rule 11.5 High Court Rules
Registrar/Deputy Registrar
Solicitors: Meredith Connell, Auckland Copy to: [Respondents]
REAL ESTATE AGENTS AUTHORITY v CATLEY & ORS [2020] NZHC 1904 [31 July 2020]
Introduction
[1] The Real Estate Agents Act 2008 (“Act”) sets out a process for dealing with formal complaints about registered real estate agents (“licensees”). As part of that process, complaints may be referred to a Complaints Assessment Committee.
[2] Amongst other things, the Complaints Committee may make a determination of unsatisfactory conduct against a licensee. If such a determination is made, the usual practice of Complaints Committees is to notify the parties of the unsatisfactory conduct decision (with reasons) and give them the opportunity to make submissions on what orders, if any, should be made under s 93 of the Act.
[3] The issue raised by this appeal is when time starts running for the filing of an appeal against an unsatisfactory conduct determination. Is it:
(a)when the parties are notified of the unsatisfactory conduct determination; or
(b)when the parties have been notified of both the unsatisfactory conduct determination and any orders subsequently made under s 93?
[4] The Real Estate Agents Disciplinary Tribunal found that (a) is the correct interpretation of the relevant statutory provisions. The appellant, the Real Estate Agents Authority, submits that the correct answer is (b).
Should the Court decline to determine the appeal on the basis that it is moot?
[5] Following the Tribunal’s ruling that the appeals were filed out of time (the decision under appeal) the first respondents sought leave to file late appeals under s 111(1A) of the Act. That subsection enables late appeals to be filed, within 60 working days of the date of notice of the decision being given, if the Tribunal is satisfied that exceptional circumstances prevented the appeal from being made in time.
[6] The Tribunal accepted that the first respondents’ failure to file their appeals within time was in reliance on advice from the Authority and an understanding of the
law as set out in a previous Tribunal decision, Edinburgh Realty Ltd v Real Estate Agents Authority.1 These circumstances were held to be “exceptional” and the first respondents were accordingly given leave to file late appeals.
[7] Given this background, the Authority accepts that the present appeal is moot as between the parties, as the outcome will have no practical effect on their rights. The Authority submits, however, that there are nevertheless good reasons why the Court should exercise its discretion to hear the appeal.
[8] In Baker v Hodder the Supreme Court noted that the courts will not generally hear matters that are moot but retain the discretion to do so.2 One of the situations where it may be appropriate for the court to exercise its discretion is where there is a broader public interest at stake, for example where an important legal point is raised that is relevant to a wider set of cases.3
[9] I accept the Authority’s submission that this is such a case. The question of law that is raised by this appeal is an important one under the Act. It affects parties other than just the parties to this appeal. Going forward, this appeal is potentially relevant to a significant number of cases each year. In the four years to 2019, there were an average of 63 decisions each year finding unsatisfactory conduct proved against licensees.
[10] Further, there are real practical implications. On the appellant’s view of the law, the parties can wait to see what orders are imposed on a licensee who is guilty of unsatisfactory conduct before deciding whether to appeal. On the Tribunal’s interpretation of the Act, parties must appeal against an unsatisfactory conduct decision in order to reserve their rights, even if following the subsequent decision on penalty orders they consider an appeal is not justified. I accept the Authority’s submission that this has cost and efficiency implications for consumers and licensees alike.
1 Catley v Real Estate Agents Authority [2019] NZREADT 57 at [55].
2 Baker v Hodder [2018] NZSC 78 at [32].
3 Baker v Hodder [2018] NZSC 78 at [33].
[11] It is also relevant that there is conflicting authority on the issue in the Tribunal. In the decision under appeal the Tribunal has departed from its earlier decision in Edinburgh Realty.4 The Tribunal’s view, as expressed in the decision under appeal, is that amendments made to the Act in 2018 necessitate a different interpretation of the key provisions. The Authority challenges that conclusion and asserts that Edinburgh Realty is still good law.
[12] Taking these various matters into account, I am satisfied that it is appropriate to exercise my discretion to hear and determine the appeal, notwithstanding that there are no live issues between the parties.
[13] Given this background, the facts of the underlying complaint are not relevant to the determination of the question of law raised. Further, the respondents elected not to participate in the appeal and their attendances were excused. I was, however, provided with a copy of the comprehensive written submissions (20 pages) that the second respondents submitted to the Tribunal. Those submissions support the Tribunal’s decision and contradict the arguments advanced by the Authority in this appeal. I have had regard to them when considering the issues raised by this appeal.
The legislative framework
[14] Part 4 of the Act deals with complaints and discipline of licensees. It is divided into various subparts. There are two tiers of disciplinary findings that may be made against a licensee under the Act: unsatisfactory conduct and misconduct.5 Complaints Committees have the power to find a licensee guilty of unsatisfactory conduct. Only the Tribunal may find a licensee guilty of misconduct, following the prosecution of a charge laid by a Complaints Committee.6
4 Edinburgh Realty Ltd v Real Estate Agents Authority [2014] NZREADT 16.
5 Sections 72 and 73.
6 Sections 91 and 110.
[15] Sections 75 to 99 of the Act comprise the subpart on Complaints Committees. The sections are set out in a broadly chronological sequence. The functions of Complaints Committees are set out at s 78 and include the power to:
(a)inquire into and investigate complaints;7
(b)make final determinations in relation to complaints;8
(c)lay and prosecute charges before the Tribunal;9
(d)inform the complainant and the person complained about of the Committee’s decision, reasons for the decision, and appeal rights;10 and
(e)publish their decisions.11
[16] Sections 80 and 81 set out the power of a Complaints Committee to take no action on a complaint and the obligation to notify the parties of such a decision.
[17] The next group of sections (ss 82-90) set out the procedure to be followed if the Committee decides to embark on a substantive investigation and, at s 89, set out the determinations that the Committee may make, namely:
(a)to refer the matter to the Tribunal; or
(b)to find that the licensee has engaged in unsatisfactory conduct; or
(c)to take no further action.
[18] Sections 91 to 93 set out the orders or other steps the Complaints Committee may take after it has made a determination under s 89. The Committee may frame an appropriate charge and submit it to the Tribunal. Alternatively, if the Committee has
7 Section 78(a).
8 Section 78(d).
9 Section 78(e).
10 Section 78(g).
11 Section 78(h).
found a licensee guilty of unsatisfactory conduct it may impose one or more of the orders set out in s 93 of the Act.
[19]These provisions are followed by s 94, which provides:
94 Notice of determination
(1) When a Committee makes a determination under section 89, the Committee must promptly give written notice of that determination to the complainant and to the licensee.
(2)The notice must—
(a)state the determination and the reasons for it; and
(b)specify any orders made under section 93 and be accompanied by copies of those orders; and
(c) describe the right of appeal conferred by section 111. (Emphasis added.)
[20] Section 94(2)(b) therefore contemplates that any orders made under s 93 will have been made at the time notice of appeal rights against an unsatisfactory conduct decision under s 89(2)(b) is given by a Complaints Committee.
[21] The final relevant provision is s 111, which confers rights of appeal to the Tribunal against a determination of a Complaints Committee and provides for the time limits in which to bring an appeal. It was amended in 201812 and the amended section relevantly provides:
111 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.
…
12 Tribunals Powers and Procedures Legislation Act 2018, s 245(1).
(2)After considering the appeal, the Tribunal may confirm, reverse, or modify the determination of the Committee.
(3)If the Tribunal reverses or modifies a determination of the Committee, it may exercise any of the powers that the Committee could have exercised.
The Edinburgh Realty decision
[22] Until the decision of the Tribunal in this case, the leading decision on the calculation of the appeal periods in the Act was the Tribunal’s decision in Edinburgh Realty.13 In that case, three licensees appealed against a Complaints Committee decision finding them guilty of unsatisfactory conduct, prior to the Complaints Committee having made a decision on penalty orders under s 93.
[23] The Tribunal held that the licensees’ appeal was premature. It made the following observations regarding the correct interpretation of ss 94 and 111 of the Act:
[18] …The said notice of determination under s 94 must not only state the determination of the Committee and the reasons for it but also “specify any orders made under s.93 ...” and also describe the right of appeal conferred by
s.111 on any person affected by the Committee’s determination. Inter alia,
s.111 requires that any such appeal against a determination of the Committee be made within 20 working days of the notice required under s.94 (or s.81 – where the decision is to take no action on a complaint). Section 93 empowers the Committee to make various penalty orders if it has made a determination of unsatisfactory conduct by a licensee in terms of s.89(2)(b).
[19] In terms of the Committee giving notice of its determination under s.94, it seems to us that the words in s.94(2)(b) that the notice must “specify any orders made under s.93” could be taken to mean specifying penalty orders if any, or could be inferring that there should be such orders or the addressing of penalty before there can be a notice of determination. We prefer the latter interpretation. As we have already said, it is only a determination of a Committee which can be appealed to us.
…
[25] … generally speaking the licensee needs to know the grounds upon which a Committee has found the licensee guilty so that it is practical for a Committee to first decide on liability, and provide reasons for that decision, before requiring penalty submissions to be made at a later date if a party wishes to make them. Generally then, the hearing before the Committee will involve two stages, namely, the liability hearing and decision and, later, the penalty hearing and decision and, together, they constitute the Committee’s determination for the purposes of s.94.
13 Edinburgh Realty Ltd v Real Estate Agents Authority [2014] NZREADT 16.
[26] We take the view that, until penalty has been dealt with, there has not been a determination as meant in the Act. It follows that the present appeal is premature. The Committee’s decision-making process is not complete because there is no penalty decision yet.
[24] Complaints Committees subsequently followed this approach. Parties to unsatisfactory conduct decisions were notified that time did not start running on an appeal against the decision until a decision on orders had been given. As a result, a party’s decision on whether to appeal could wait until the Complaints Committee’s process on the complaint was finalised, with both liability and penalty determined.
The Complaints Committee process in this case
[25] On 29 August 2018, the Authority received a complaint against the first respondents, Bruce Catley and Timothy John Boyle, from the second respondents, Margaret and Robert Flannigan.
[26] The Complaints Committee considered the complaint and decided to inquire into it under s 79(2)(e) of the Act. The hearing took place on the papers. In a liability decision dated 26 April 2019, the Complaints Committee held that Mr Catley and Mr Boyle had engaged in unsatisfactory conduct under s 89(2)(b) of the Act. The Complaints Committee requested submissions from the parties on what orders should be made under s 93 of the Act, following which, on 21 June 2019, it delivered its penalty decision.
[27] On 16 July 2019, within 20 working days of the penalty decision (but not within 20 days of the liability decision) Mr Catley and Mr Boyle each filed separate but identical appeals challenging the determination that they had engaged in unsatisfactory conduct.
The Tribunal decision
[28] In the decision under appeal, the Tribunal took the opportunity to revisit its earlier decision in Edinburgh Realty in light of the amendments that had been made to s 111 in 2018.
[29] At the time of the Edinburgh Realty decision, s 111(1) had been worded as follows:
111 Appeal to Tribunal against determination by Committee
(1) A person affected by a determination of a Committee may appeal to the Tribunal against a determination of the Committee within 20 working days after the date of the notice given under section 81 or 94.
[30]This was amended in 2018 to read as follows:14
111 Appeal to Tribunal against determination by Committee
(1) A person affected by a determination of a Committee may appeal to the Disciplinary Tribunal against
athe determinationof the Committeewithin 20 working days after thedateday on whichof thenotice of the relevantdecision was given under section 81 or 94.
(Amendments marked up)
[31] The Tribunal considered that the section could have been more clearly worded following the 2018 amendments. (In Edinburgh Realty a similar observation was made about the section prior to the 2018 amendments). Nevertheless, it saw the insertion of the words “of the relevant decision” after the word “notice” as being crucial and changing the interpretation of the subsection.15 As a result, Edinburgh Realty was no longer good law:16
The addition of a reference to notice of a “decision” must be taken as widening the scope of the Tribunal’s appeal jurisdiction. It is no longer correct that it is limited to “determinations”, as the Tribunal concluded in Edinburgh Realty. It includes “decisions” of which notice has been given.
[32] The Tribunal held that a liability decision constitutes a “substantive determination, finding a licensee has engaged in unsatisfactory conduct”.17 The penalty decision is a “separate decision as to penalty orders under s 93”. That decision was capable of being appealed to the Tribunal.18 The Tribunal held that the failure of Mr Catley and Mr Boyle to file an appeal against the liability decision within
14 Certain other amendments were made to the Act in 2018, but they are not relevant for present purposes.
15 Catley v Real Estate Agents Authority [2019] NZREADT 57 at [56].
16 Catley v Real Estate Agents Authority [2019] NZREADT 57 at [56].
17 Catley v Real Estate Agents Authority [2019] NZREADT 57 at [57].
18 Catley v Real Estate Agents Authority [2019] NZREADT 57 at [57].
20 working days of that decision meant that the appeal against liability was out of time.19
Did the Tribunal err in its interpretation of s 111?
[33] The Authority submits that the Tribunal erred in determining that, in circumstances where a Complaints Committee issues a determination finding a licensee guilty of unsatisfactory conduct under s 89(2)(b) of the Act, the appeal period in respect of that determination commences from the date on which notice is given of the unsatisfactory conduct finding, rather than from the date of the Committee’s consequent orders under s 93 of the Act.
[34] The key provision is s 111 of the Real Estate Agents Act 2008, which I have referred to previously. The relevant parts of that decision state:
111 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) …
(3) …
(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.
(Emphasis added)
[35]Prior to the 2018 amendments, the Tribunal’s view, as explained in
Edinburgh Realty, was that until penalty has been dealt with, there has not been a
19 Catley v Real Estate Agents Authority [2019] NZREADT 57 at [69].
determination as meant in the Act.20 The reason for this is that a right of appeal only arises in respect of determinations of which notice had been given under s 81 or 94. Section 94 relates to unsatisfactory conduct determinations. Section 94(2)(b) states that the notice of such a determination must “specify any orders made under s 93.” The Tribunal noted that this could be taken to mean specifying penalty orders “if any” or could mean that there should be such orders or the addressing of penalty before there can be a notice of determination. The Tribunal preferred the latter interpretation. In the decision under appeal, the Tribunal has adopted the former interpretation (on the basis that this is required by the 2018 amendments).
[36] The Tribunal’s interpretation of s 111, in the decision under appeal, draws a distinction between the words “determination” and “decision”. On the Tribunal’s analysis, the word “determination” is now narrower in scope and refers only to the Tribunal’s unsatisfactory conduct determination.21 It no longer includes the subsequent penalty orders, which are now encompassed by the word “decision” and are separately appealable in their own right. The addition of the word “decision” in s 111(1) has therefore widened the scope of the Tribunal’s appeal jurisdiction. It is no longer limited to determinations, as the Tribunal concluded in Edinburgh Realty, but includes decisions of which notice has been given.
[37] In my view there are a number of difficulties with this interpretation. First, the Tribunal has placed undue weight on the use of the word “decision”, as distinct from “determination”, in the amended s 111(1). The section itself uses the two words interchangeably. It provides that a person affected by a determination of a Committee may appeal to the Tribunal against the determination within 20 working days of receiving notice of the relevant decision under section 81 (a decision to take no action) or section 94 (a determination in respect of a complaint or allegation).
[38] Given that decisions under s 81 and determinations under s 94 are clearly both intended to be appealable, the word “determination” (used three times in s 111(1)) and
20 As found by the Tribunal in Edinburgh Realty Ltd v Real Estate Agents Authority [2014] NZREADT 16 at [26].
21 Catley v Real Estate Agents Authority [2019] NZREADT 57 at [57].
the word “decision” (used once) must both be read as meaning “determination or decision” in order to give the subsection its intended effect.
[39] A number of other sections in the Act also use the words determination and decision interchangeably. For example:
(a)in s 78 Complaints Committees are described as having the function of making “final determinations” as well as the function of giving reasons for their “decisions”;
(b)a Complaints Committee’s final determination may be a no action or no further action “decision” under s 80 or it may be a no further action or unsatisfactory conduct22 “determination” under s 89;
(c)s 84(2) refers to “decisions” under ss 80, 89, and 93, even though s 80 uses the word “decision”, s 89 uses the word “determination”, and s 93 does not use either “decision” or “determination”.
[40] Given this statutory context, little or no significance can be attributed to the use of the word “decision” rather than “determination” as part of the 2018 amendments to s 111(1). There is nothing to suggest that Parliament intended to substantively alter the meaning of the section. Rather, it appears that the amended wording was adopted to be consistent with the new sections 116A and 120A that were introduced into the Act at the same time. Those sections specify the appeal periods for appeals to the High Court and Court of Appeal, respectively. Previously the Act had provided for such appeals but had not specified the time period in which they had to be brought. The Explanatory Note to the Bill uses virtually identical wording to describe s116A, 120A and the relevant amendments to s 111.
[41] Further, the amendments to s 111 do not change the mechanism used in s 111(1) for conferring jurisdiction to appeal; namely, by reference to the notice provisions in ss 81 and 94. Only decisions in respect of which notice has been given under those
22 Although an unsatisfactory conduct determination under s 89 does not finally determine a complaint until the question of orders has been decided under s 93.
sections can be appealed. Section 94 is the relevant provision in this case. It requires notice to be given of a determination under s 89 (namely, a finding of unsatisfactory conduct). That notice must specify any orders made under s 93 and provide copies of those orders to the licensee and complainant. This represents a legislative assumption that any orders made under s 93 form part of, or are bound together with, the unsatisfactory conduct determination under s 89(2)(b). In this sense, an unsatisfactory conduct determination is not a final determination in relation to a complaint, to use the language of s 78(d) of the Act. A decision on orders is required to reach that point. Notice of appeal rights in compliance with s 94 can only be given at that point, as the Tribunal found in Edinburgh Realty.
[42] In the decision under appeal the Tribunal appears to have overlooked the critical importance of ss 81 and 94. They are the gateways for appeal jurisdiction. Section 111(1) provides that only decisions in respect of which notice had been given under section 81 or section 94 may be appealed. Neither of those sections provide for or require notice of orders under s 93 to be given to the parties independently of the associated liability determination. For such orders to be appealable (and clearly there must be a right of appeal in respect of them) they must form part of the notice of determination under s 94.
[43] This was the approach adopted by the Tribunal in Edinburgh Realty. There is nothing in the 2018 amendments that requires or justifies a different approach. Hence, where the Committee adopts a two stage process (liability and penalty) then the relevant decisions will together constitute the Committee’s determination for the purposes of s 94. It is only after the parties have been notified of both the liability decision, and any orders under s 93, that the time for filing an appeal will start to run.
[44] This approach is also reflected in the sequential and chronological structure of the Act, in which the notice provision (s 94) follows the provisions relating to both liability determinations (especially s 89) and penalty orders (s 93). It is also consistent with s 93(1)(b), which provides that the Complaints Committee may, following a determination of unsatisfactory conduct under s 89(2)(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”. This
supports the view that the determination is not final until after the s 93 penalty phase has been completed.
[45] As the Tribunal noted, s 111 could have been more clearly worded. Interpreted in its full legislative context, however, it is my view that the Tribunal erred in concluding that the 2018 amendments altered the correct interpretation of the section. Rather, the correct interpretation remains that set out in Edinburgh Realty.
[46] A final determination in relation to a complaint, to use the language of s 78(d), is not made until orders are decided. Notice that complies with s 94 need not be given (and indeed cannot be given) until the question of orders has been decided. The liability determination under s 89(2)(b) is not a final determination in relation to a complaint. The complaint will only have been finally determined once both a liability determination has been made and a decision made on the appropriate penalty orders. It is only then that a notice of determination that complies with s 94 can be given to the complainant and the licensee.
Result
[47] The appeal is allowed. Time does not start running under s 111(1) for the filing of an appeal against an unsatisfactory conduct determination until the affected parties have been notified of both the unsatisfactory conduct determination and any orders subsequently made under s 93 of the Act. The Tribunal erred in concluding otherwise.
[48] The first respondents’ appeal against the liability decision of the Complaints Committee was accordingly filed within the 20 working day time limit prescribed by s 111(1) of the Act.
Katz J
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