The tribunal’s investigation began in October 2022, after a complaint was referred from the Immigration Advisers Authority.
The Chinese nationals, who have name suppression, claimed they lost $225,000 including $50,000 to process the New Zealand entrepreneur resident visa application and a further $175,000 on a property the deal stipulated they had to buy.
A unit was purchased for $571,000 but later sold for $396,000, a loss of $175,000, because the couple had no use for it after their visa documentation came under scrutiny and was subsequently withdrawn.
The husband and wife claimed compensation of $343,208 to cover the losses and expenses plus $189,000 for psychological and emotional damage, the tribunal’s recently released penalty decision revealed.
Chairperson David Plunkett described Sun’s misconduct as serious and although proven, he continued to deny responsibility.
“The obligations in the Code are personal to the adviser and cannot be delegated,” Plunkett said.
“An adviser must from the beginning of the instructions to the end take charge of the client engagement process and deal directly with his or her client.”
Plunkett said unlicensed staff could carry out clerical work only and Sun’s assertion the client chose to deal with the unlicensed staff in China for convenience was no justification.
Immigration NZ documentation revealed numerous concerns with the application including not being satisfied the husband met the visa requirements.
Plunkett said it clearly showed Sun’s paperwork lacked merit and he was invited to comment on the criticism.
Sun maintained it was the client’s decision to apply for the visa and then withdraw it, arguing it would be unfair and unreasonable for compensation to be awarded against him.
Plunkett, however, ruled Sun was responsible for the unmeritorious application, which should not have been filed, and the clients had been billed for a service that was of no value to them.
“There appears to have been little chance of success,” Plunkett said in the decision.
“If Mr Sun had dealt directly with the complainant and not unlawfully abrogated engagement to the unlicensed staff, he would have known this and should have advised the complainant not to proceed with the application or at least informed him of the merits (or otherwise).”
Sun refuted allegations he knew about the property purchase, however, after contacting the company he stated the unit was sold by the wife, for a profit of $21,000 and she had not repaid vendor finance of $195,000 which was waived.
He argued any immigration application ran the risk of being declined, so he was not responsible for the client’s depression.
The omission of Sun’s name and licence number from the application was acknowledged but he claimed it wasn’t dishonest or misleading conduct.
Plunkett awarded $35,000 compensation for the fee, the amount the client could prove he paid, imposed a $2500 penalty for the breaches, and dismissed the balance of the claim.
The bulk of the losses were a result of the failed investment, Plunkett said and while the tribunal believed he knew about the transaction there was no evidence he gave any investment advice.
“There is no evidence supporting the extravagant emotional damage claim.
“The sanction of compensation is intended as a modest contribution towards losses and expenses incurred or wasted due to the adviser’s wrongdoing and not an indemnity, particularly for such a large sum.”
Plunkett said it was more appropriate to seek recovery through a civil claim in the courts if he believed he was entitled to substantial damages.
Sun was also ordered to complete the LAWS 7015 paper, which covered business practices, professional skills and ethical considerations in relation to the Code of Conduct as well as competency standards.
Leighton Keith joined NZME as an Open Justice reporter based in Whanganui in 2022. He’s been a journalist for 20 years covering a variety of topics and rounds.
