By: James Dymock and Victoria Waalkens

Kenny v NZIV [2025] NZDC 17928

On 18 August 2025, the Valuers Board of Appeal (VBOA) allowed Mr Kenny’s appeal against the decision of the Valuers Registration Board (VRB), which found that he acted in a conflict of interest. A great result for Mr Kenny, who spent nearly six years fighting the charge. Unfortunately, the decision offers little clarity on conflicts of interest to the profession generally.  

Background

On 10 May 2010, a former employee of Telfer Young prepared a valuation report for a commercial property in Maungaturoto (Property) for a prospective purchaser. The purpose of the valuation was “market value for finance purposes” and included a rent analysis. The purchaser subsequently purchased the Property and became the landlord (Landlord).  

Nearly a decade later, on 10 June 2019, the Landlord obtained rental advice from Bob Malone. Mr Malone assessed the market rent at $14,115 per annum plus GST and outgoings as at 1 June 2019.  

On 30 June 2019, the tenant instructed Mr Kenny of Telfer Young to provide an assessment of market rent of the Property for rent review purposes. Later that day the tenant advised the Landlord of the engagement. The Landlord replied saying “no problem” and asked the tenant to “ensure Telfer Young provide a full rental assessment – as per the Lease Agreement”. These emails were forwarded to Mr Kenny. 

On 4 July 2019, Mr Kenny appraised the market rent at $12,000 per annum plus GST and outgoings as at 1 September 2018.  

On 12 July 2019, the landlord complained to the Registrar of the VRB that Mr Kenny’s 2019 appraisal was biased and “playing favourites to his customer’s (the tenant’s) advantage”. The complaint was referred to the New Zealand Institute of Valuers (NZIV) for investigation.  

On 13 August 2019, an investigator appointed by the NZIV engaged an independent valuer (Check Valuer) to complete a retrospective market rental valuation. Later on 20 August 2019, the investigator also asked the Check Valuer to consider whether there was a conflict of interest.  

On 4 September 2019, the Check Valuer made two reports. The first assessed the market rent for the Property as at 1 September 2018 to be $12,545 per annum plus GST and outgoings, which was consistent with Mr Kenny’s assessment. The second determined there was, or may reasonably be construed to have been, a conflict of interest.  

On 18 December 2019, the VRB resolved to hold an inquiry. The NZIV acting as prosecutor charged Mr Kenny with unethical conduct under s 31(c) of the Valuers Act 1948 for breaching clause 2.2 of the Code of Ethics – acting in a conflict of interest.  

Valuers Board of Appeal Decision

The VBOA considered that while a valuer owes a fiduciary duty not to act against the interests of their clients, there were good policy reasons against deciding that a valuer’s obligation of absolute fidelity to a client lasts indefinity.   

Instead, the VBOA set out several factors that valuers should take account in deciding whether a conflict of interest exists. These factors included: 

What were the terms of engagement/scope of works, were they completed, and are there lingering responsibilities to the previous client, such as confidentiality, that could be adversely affected by accepting the new instructions. 

How much time has passed between the completion of the service for the previous client and the request to act for the potential new client.  

Is there evidence that the previous client has ended the relationship with the valuer who performed the service for the previous client.  

Is there evidence that the previous client is aware of, and consents to, the valuer performing the service for the potential new client. 

The VBOA was of the view that: 

Having considered these factors, the valuer should step back and ask whether a reasonable or fair-minded person would think there is a conflict of interest, or the appearance of a conflict of interest, that warrants either a withdrawal or disclosure to the relevant parties. If the answer is no, then the valuer has greater assurance that there is no conflict of interest and the valuer may accept the instructions. 

Applying these factors to the current circumstances, the VBOA considered there was no conflict. The valuation was completed by a different employee who had since retired, the limited three-month currency of the earlier valuation, and the absence of evidence that the earlier terms of engagement contained any ongoing obligations that could be adversely affected by accepting instructions from the tenant. There is no evidence that accepting new instructions from the tenant breached any ongoing obligation of confidentiality to the Landlord. Further, nine years had passed, the Landlord was aware and had emailed “no problem” and the client had instructed another valuer to complete the rental assessment. Taking all these factors into account, the VBOA considered that a reasonable person would not perceive a conflict of interest. 

Wotton Kearney Comment 

The decision does not provide any certainty to valuers. There are no rules that can be followed, and instead there are a bunch of discretionary factors, which may be difficult apply in other factual situations.  

Nor is it clear what actual continuing obligations a valuer owes. The standard position for professionals is there is no general duty to a former client, there is instead a continuing obligation to protect the confidentiality of the former client. This will not apply to most valuation engagements or will expire in a few months, as there is no confidential information and the value conclusion has limited currency.   

More fundamental is why does the valuation profession in New Zealand consider they owe fiduciary obligations and a corresponding duty of loyalty to their clients when undertaking valuations and rental assessments given it is not a relationship of trust and confidence. They are not like a real estate agent who is acting on behalf of their client to get the best price.  A valuer is providing an objective assessment independent of their client’s views and interests. For example, when engaged to prepare a valuation by a borrow for mortgage finance purposes, they are not engaged to help a client obtain the maximum amount of borrowing from the bank. In fact, guidance paper ANZVGP 112 Valuations for Mortgage and Loan Security Purposes, requires the valuer to inform the lender of areas of risk that could impact value and marketability, even if that is contrary to the interests of any client. As noted by the authors of the leading professional negligence textbook, Jackson & Powell on Professional Liability:  

In theory, like any other professional, a [valuer] can put himself in a position in which he owes fiduciary duties to his client. Such duties might, for example, accrue where the [valuer] acts as the client’s agent. However, the nature of a [valuer’s] services is such that the type of relationship is the exception rather than the rule. 

This commentary makes perfect sense. A valuer assisting a client to locate and negotiate the acquisition of a property would arguably be acting in a relationship of trust and confidence, whereas when they are undertaking a market valuation they are not.   

Wotton Kearney acted for Mr Kenny.