The Harcourts Preet businesses had 10 branches in south and east Auckland. Voordouw was branch manager of Harcourts Preet & Co in Ellerslie and Mason was chief operations officer, based in Manukau, the tribunal said.
Last year, Voordouw signed a trust account statutory declaration about the balance of the agency's funds. He was told $1m had been transferred from the agency's trust account and into another account and purchase deposits had been put in the wrong bank account, it said. A further $200,000 was also discovered to be missing from the trust account.
Read more: Real estate agents guilty of misconduct
Voordouw and Mason met Grewal to raise issues about the missing money and Voordouw made notes about a breach of the Real Estate Agents Act 2008 and "potentially fraud".
Yet the tribunal said he did not notify the Real Estate Authority, as he was bound to do under law.
Instead, he emailed the auditor to "have a look at the trust account" which did not indicated the scale of the issue or any urgency, the tribunal said. It found a number of trigger points after the initial discovery of a missing $1m from the trust account.
The tribunal found the men's conduct in failing to report issues "constituted seriously incompetent and/or seriously negligent real estate agency work" under the law. They relied on the auditor to take steps but that did not absolve them from their obligations. They should have gone to greater lengths to make the auditor aware of the seriousness of the issues and the need for urgent investigation and to query the auditor about his reference to $1m being used to finance the purchase of branches, the tribunal found.
Despite the missing money, they left the investigations up to Grewal and relied on him to seek legal advice and advise the franchisor when the proper course of action would be to notify the auditor then to report to the authority, the tribunal said.
Despite the trigger points, they did not make any report to the authority. That failure could not be justified on the basis they were waiting for the auditor, it said.
Simon Waalkens, the Meredith Connell lawyer who acted for the authority's complaints assessment committee which brought the action said the men's failure to report the issues was a serious breach of acceptable standards.
Protecting the agency's clients should have been foremost in their minds, he said. Voordouw's lawyer said the offending should not be characterised as being towards the upper range of serious negligence misconduct.
Voordouw's lawyer told the tribunal his client had admitted the charge of misconduct, had acted honestly and in good faith and believed he was acting diligently, did not get any personal gain from the conduct, had a long and unblemished career in the industry and was currently employed in the industry.
Waalkens asked that Mason be fined up to $8000 but Mason's lawyer said steps were taken to investigate the missing money, Mason had taken the matter seriously and he was only peripherally involved, not responsible for the trust account. He did not get any personal benefit from the breach, and had clearly paid for his mistake and its consequences.
The tribunal cited a Bayleys Real Estate case where a salesperson had forged or falsified a rental appraisal and presented that to prospective buyers.
It decided the men should have acted promptly but it cited mitigating factors, including the men's long industry career and character references. Both had earned excellent reputations for honesty, integrity and diligence, the tribunal found and they had both contributed significantly to the industry.
They were ordered to pay the fines within 20 working days.
