Court overturns real estate agent's suspension

A Harcourts estate agent suspended for three months for under-selling a flat to an associate has won a court case over the matter.

Anne Davis of Harcourts Shirley in Christchurch won her case against the Real Estate Institute in the High Court at Auckland.

The institute initially succeeded in its attempt to have her temporarily barred from the sector but she appealed.

The country's 12,000 agents handle about 70,000 house deals annually but few are ever found guilty of misconduct and struck off.

Even fewer then successfully appeal to the High Court.

The institute may have to pay about $30,000 in costs.

In 2005, Mrs Davis sold a New Brighton flat to another Harcourts employee, a Ms Henderson, who made a $44,500 profit on the re-sale in just three months.

The court heard that the two-bedroom unit in New Brighton was owned by a woman who had died. Her daughter - Shona Thom - was known to Mrs Davis knew because they lived in the same neighbourhood.

Mrs Davis listed the flat as a sole agency at $165,000. Ms Henderson, who also worked at Twiss-Keir Realty (trading as Harcourts), bought the unit for $160,500 and three months later sold it for $205,000.

She had said she wanted the property for her elderly mother but court documents said her mother never lived there and she did a quick make-over of the unit and resold it.

Another potential buyer, a Mr Perkins, complained to the institute about the deal. He saw a "for sale" sign go up, phoned to ask about the place but found it was already sold. The institute took the case against Mrs Davis to the Real Estate Agents Licensing Board.

Steve Haszard of the Crown Law Office represented the institute and told the board Mrs Davis had failed to market the property before submitting two offers on it: one from her colleague the Harcourts saleswoman and the other from the partner of her cleaner for $158,000.

Mr Haszard said her behaviour warranted it cancelling or suspending her certificate of approval to act as a real estate saleswoman.

The board found the offers submitted were created out of Mrs Davis's inside knowledge. It suspended her for three months and imposed a small monetary penalty.

Justice Helen Winkelmann overturned the board's decision. She ruled the sale was an isolated incident and no pattern of misconduct had been proven against the agent.