BARFOOT & THOMPSON LIMITED v REAL ESTATE AGENTS AUTHORITY [2016] NZCA 105

BARFOOT & THOMPSON LIMITED v REAL ESTATE AGENTS AUTHORITY [2016] NZCA 105 [8 April 2016]IN THE COURT OF APPEAL OF NEW ZEALANDCA55/2015[2016] NZCA 105BETWEEN BARFOOT & THOMPSON LIMITEDAppellantAND REAL ESTATE AGENTS AUTHORITYRespondentHearing: 15 March 2016Court: Randerson, Harrison and Cooper JJCounsel: T D Rea and G S G Erskine for AppellantM J Hodge and N E Copeland for RespondentJudgment: 8 April 2016 at 11:30 amJUDGMENT OF THE COURTA The appeal is dismissed.B The appellant must pay the respondent costs for a standard appeal on a band A basis and usual disbursements.____________________________________________________________________REASONS OF THE COURT(Given by Randerson J)Introduction[1] This appeal raises issues about the obligations of a licensed real estate agent when the licensee or a related person wishes to buy the property the licensee'sagency has been engaged to sell.[2] For many years legislation governing the activities of real estate agents has forbidden licensees or related persons from acquiring a property in such circumstances unless certain requirements have been met. Under the Real EstateAgents Act 1963 the vendor's consent was required. The Real Estate Agents Act1976 added a requirement that an independent valuation of the property be provided to the client. These requirements are now contained in ss 134 to 137 of the Real Estate Agents Act 2008 (the Act).[3] The appellant (B&T) maintains an internal policy that applies where one of its licensees or a related person wishes to buy a property listed for sale with B&T. The policy must be followed by the licensee and is expressed as follows: When a salesperson licensee wishes to purchase a property that is ownedby a current client of the Company Licensee, those licensees are instructed that they should contact the client directly to ascertain the current situation with the property. The licensees are then authorised to commence and control all negotiations between themselves and the client provided that the provisions of section 134 to 137 of the Act have been complied with.[4] In 2013 a Complaints Assessment Committee (the Committee) established under the Act exercised its power to initiate an inquiry into the policy.1 It determined that B&T had engaged in unsatisfactory conduct in terms of s 72 of the Act.2 In a subsequent decision the Committee censured B&T; ordered it to refund fees of $5,000 charged to each of the two complainants; and required B&T to pay a fine of $2,500.3[5] B&T's appeal to the Real Estate Agents Disciplinary Tribunal (the Tribunal)was dismissed on 8 July 2014 and its subsequent appeal to the High Court was dismissed by Courtney J on 18 December 2014.4[6] In confirming that B&T was guilty of unsatisfactory conduct, the essential findings in the High Court were:1 Pursuant to s 78(b) of the Real Estate Agents Act 2008.2 Real Estate Agents Authority Complaints Assessment Committee, CAC20003, 18 November 2013.3 Real Estate Agents Authority Complaints Assessment Committee, CAC20003, 14 January 2014.4 Barfoot & Thompson Ltd v Real Estate Agents Authority [2014] NZREADT 48; Barfoot & Thompson Ltd v Real Estate Agents Authority [2014] NZHC 3309.(a) Compliance with the requirements of ss 134 to 137 of the Act does not exhaust the obligations of a licensee who wishes to acquire a property listed with his or her agency.(b) The licensee owes fiduciary obligations to the vendor including, amongst other things, a duty to obtain informed consent from the client to the acquisition of the property by the licensee.(c) B&T's policy does not address the obligation on the part of thelicensee to explain to the client the nature of the conflict between client and licensee and the consequences of giving consent.The issues on appeal[7] The case comes to this Court under s 120 of the Act which confers a right of appeal from the High Court on questions of law only.[8] For B&T, Mr Rea contended that each of the findings of the High Court was wrong in law. The essence of his argument was:(a) Sections 134 to 137 of the Act and regulations made under it constitute a code governing the obligations of a licensee seeking to acquire a property listed for sale with his or her agency. So long asthe vendor's consent was obtained on the form prescribed by regulations, and the independent valuation was provided, there was no further obligation on the licensee.(b) The Act implicitly recognised that the licensee could negotiate directly with the vendor.(c) B&T's policy was legally permissible.(d) Even if it were not legally permissible, B&T should not have been found guilty of unsatisfactory conduct.[9] Mr Rea also sought to advance an argument that, even if B&T had been guilty of unsatisfactory conduct, the Committee had failed to consider whether totake no action against the company in terms of s 80 of the Act. Mr Hodge for the respondent (the Authority) opposed this ground of appeal on two grounds. First, the point had not been raised before the Tribunal or the High Court. Second, the point did not amount to a question of law.[10] Faced with this opposition, Mr Rea did not pursue the argument but did not abandon it. We are satisfied it is now too late for this argument to be raised in this Court for the first time. We do not have the benefit of any findings on the issue in the decisions of the Tribunal and the High Court. We also note the Committee was aware that it was not required to make any of the orders specified under s 93 of the Act. In delivering its first decision, the Committee advised B&T that it wouldconduct a separate hearing on the papers to decide "what orders, if any, should be made under section 93 of the Act".5 Before making its decision on penalty, the Committee received and considered a submission made from solicitors representing B&T. There is nothing before us to suggest that the Committee overlooked, or failed to turn its mind to, its discretion to take no further action. No question of law arises.The statutory scheme[11] Section 134(1) and (2) of the Act provide:134 Contracts for acquisition by licensee or related person may be cancelled(1) No licensee may, without the consent of the client for whom he or she carries out real estate agency work in respect of a transaction, directly or indirectly, whether by himself or herself or through any partner, sub-agent, or nominee, acquire the land or business to which the transaction relates or any legal or beneficial interest in that land or business.(2) No licensee may, without the consent of the client, carry out or continue to carry out any agency work in respect of a transaction if the licensee knows or should know that the transaction will, or is likely to, result in a person related to the licensee acquiring the land or business to which the transaction relates or any legal or beneficial interest in that land or business.5 Above n 2, at [6.1].[12] The client's consent is effective only if given in the prescribed form and theclient is provided with a valuation in accordance with s 135.6 The client may cancel any contract made in contravention of s 134(1) or which has been brought about by agency work carried out in contravention of s 134(2).7 No commission is payable where there is a contravention of the requirements of s 134.8[13] The obligations in respect of the valuation are set out in s 135. The valuation, obtained at the expense of the licensee, must have been made by an independent registered valuer.9 It must be given to the client either before seeking the client'sconsent or, with the agreement of the client, within 14 days after obtaining the consent.10 Any consent given without the valuation being supplied is ineffective.11[14] If the client gives a consent and the valuation turns out to be greater than the valuation specified in the prescribed form of consent as the provisional valuation, any contract relating to the consent to which the client is a party is voidable at the option of the client.12 We were informed that, where a provisional valuation is provided, it is generally equivalent to the anticipated sale price contained in the appraisal of land that must be provided by the licensee to a client under r 10.2 of the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012.13[15] Section 136 of the Act sets out the obligation of a licensee to disclose the financial benefits the licensee stands to gain from the transaction. For the purposes of the section, an agent does not benefit financially from a transaction merely because of any commission payable to the agent under an agency agreement.14Finally, s 137 sets out definitions for the purposes of ss 134 to 136 of "licensee" and "person related to the licensee".6 Section 134(3) of the Real Estate Agents Act 2008.7 Section 134(4) of the Act.8 Section 134(5) of the Act.9 Section 135(1) and (2)(a) of the Act.10 Section 135(3) of the Act.11 Section 135(4) of the Act.12 Section 135(5) of the Act.13 See the corresponding requirement in r 9.5 of the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2009.14 Section 136(4) of the Act.[16] The form of consent required under s 134 of the Act is prescribed by the Real Estate Agents (Duties of Licensees) Regulations 2009 (the Regulations). The consent must be in the form prescribed by Form 2 of the Schedule to the Regulations.15 It is unnecessary for us to set out the prescribed form in detail.Under the heading "Important information for clients" it is stated that the form haslegally binding consequences and that the client may wish to seek legal advice before signing it. Further information is then provided setting out the substance of the requirements of ss 134 and 135 of the Act and the consequences of non-compliance with the requirements of those sections. The form of consent requires the client to state that an agency agreement was signed with the agent and that the client consents to the licensee or related person acquiring directly or indirectly an interest in the land. The form also requires confirmation from the client that a valuation or provisional valuation was provided, or is to be provided, in compliance with s 135.The Professional Conduct and Client Care Rules[17] Section 14 of the Act enables the Authority to make practice rules. Any such rules require the approval of the Minister of Justice.16 With effect from 17 November 2009, the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2009 came into force. These were later replaced by the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012 but, for present purposes, nothing turns on this. We will refer to these rules collectively as the Professional Conduct and Client Care Rules. They are expressly stated not to be an exhaustive statement of the conduct required of licensees. Rather they set a minimum standard.17 They are to be read in conjunction with the Act andregulations made under the Act and they "do not repeat duties and obligations that are included in the Act or regulations".1815 Regulation 5(1) of the Real Estate Agents (Duties of Licensees) Regulations 2009.16 Section 16 of the Act.17 Rule 3.3 of the Real Estate Agents (Professional Conduct and Client Care) Rules 2012.18 Rule 3.4.[18] Of particular relevance to the present appeal are r 6.1 which provides that "a licensee must comply with fiduciary obligations to the licensee's client" and r 9which contains general provisions relating to client and customer care, including:9.1 A licensee must act in the best interests of a client and act inaccordance with the client's instructions unless to do so would becontrary to law.9.2 A licensee must not engage in any conduct that would put a prospective client, client, or customer under undue or unfair pressure.9.16 A licensee must not use information that is confidential to a client for the benefit of any other person or of the licensee.The background facts[19] In 2013 the Committee heard two complaints involving the purchase of client properties by B&T licensees. The licensees had followed the B&T policy. We areconcerned with the subsequent inquiry into B&T's policy which the Committeeinitiated. The earlier complaints are not directly relevant to this appeal but the facts of the prior complaints provide helpful context. They were considered by the Committee, the Tribunal, and the High Court.[20] It is convenient to adopt the summary of the facts set out in the High Court judgment:19Complaint 1 – Smith[19] The first complaint concerned Mr and Mrs Smith who listed a property in Te Atatu with B&T licensees Ann Mushet and George Fong. They appraised the property at $377,166.[20] Two other B&T licensees, Mr Littler and Ms Barnett, viewed theproperty as part of a B&T "team viewing." They were looking for aninvestment property. Mr Littler contacted Mr and Mrs Smith directly, identified himself as a B&T agent and asked what interest there had been in the property. Mrs Smith told Mr Littler that there had been previous interest at around $360,000. She also told him that she and her husband were keen to sell before the current tenant vacated.19 Above n 4.[21] Mr Littler went to see Mr and Mrs Smith and presented a conditional offer for $360,000. Mr and Mrs Smith counter-offered at $370,000. Mr Littler made a further offer of $368,000 which was accepted. The original listing agents, Ms Mushet and Mr Fong, did not participate in these negotiations. After the agreement had been signed Mr Littler produced the client consent form required by s 134 REAA. Those events all occurred on the evening of 5 June 2012.[22] On 8 June 2012 Mr Littler obtained a valuation and builder's report.He and Ms Barnett contacted the listing agent, Ms Mushet, to advise they were not prepared to confirm the agreement at the original price but would proceed if the price was reduced by $10,000. Mr and Mrs Smith agreed to reduce the price by $8,000 and the sale proceeded on that basis. Mr Littler and Ms Barnett received $5,710.25 of the commission that Mr and Mrs Smith paid to the listing agents.Complaint 2 – Ms Pine[23] The second complaint was made by Ms Pine, who listed her property in Stanmore Bay with B&T licensees, Jeremy and Anne Thatcher. They appraised the property as being worth between $385,000 and $410,000. After approximately four months, with the property still not sold, Ms Pine'smother contacted another B&T licensee, Victoria Cherrington. The property was listed with Ms Cherrington for $389,000.[24] The next day Ms Cherrington presented an offer by her for $382,000 conditional on a builder's report, finance, LIM and which contained anescape clause in favour of the vendor. There were negotiations between Ms Cherrington and Ms Pine. These included Ms Pine counter-offering at $383,000. She also signed the consent form required by s 134 REAA. During this period Ms Pine told Ms Cherrington that she (Ms Pine) was under pressure to sell because the property she wanted to buy was subject to an escape clause that had been activated.[25] Ms Cherrington obtained a valuation of $380,000. She also receiveda verbal builder's report raising some matters of concern. Ms Cherringtondiscussed these issues with Ms Pine, who offered to reduce the purchase price to $375,000. There were then further negotiations between Ms Pine and Ms Cherrington before an agreement was reached at $376,000. Ms Cherrington received $5,148 of the commission payable.The Committee's decision[21] The reasons given by the Committee to support its conclusion that B&T had engaged in unsatisfactory conduct were:204.7 The Committee finds that a purchaser/employee cannot advise and protect the best interests of the client when their own agenda is to buy the property on the most favourable terms they can negotiate forthemselves. The Company Licensee's policies do not recognise this conflict of interest.20 Above n 2.4.8 The Complainants say that they felt pressured, that they knew their agent was not really working for them and that they felt out-gunned in negotiations. The Company Licensee then charged them a fee for service which they felt was not earned.4.9 While the Committee agrees that a fee is due, the appearance of a conflict could be substantially reduced if the Company Licenseechose to amend its policy to create an arm's length transaction bydirecting such purchases to be negotiated by the listing salesperson or the listing office branch manager as part of its in-house policies.4.10 The Committee concedes that this is not a legal requirement and as such, may be a point which the Company Licensee chooses to appeal. However, we consider the consumer protection requirements of an agent have often outpaced or overlapped what the law requires. By way of comparison, we note the way in which multiple offers are now handled by the industry and that failure to adhere to these policies has resulted in unsatisfactory conduct being found against these licensees.[22] In the subsequent penalty decision, the Committee noted that a purchaser licensee would be in receipt of private and confidential information which vendors were entitled to expect would not be used to their disadvantage.21 This could includeinformation about the vendor's motivation for selling the property, the vendor'sfinancial circumstances, and information about the marketing of the property such as the level of interest from other prospective purchasers. The Committee found that:3.6 there is an obvious conflict of interest if an employee of the agentbecomes privy to this information and is able to use that knowledge for their own personal benefit. This is compounded where, as aresult of the Company's policy, an employee is afforded directaccess to the client prior to commencing negotiations and thereafter has the ability to negotiate the terms of an agreement where they wish to purchase the property for themselves.[23] The Committee went on to say:3.7 The second and related matter common in both cases was the lack ofaccess to advice or counsel from the Complainant's agent duringnegotiations. Whilst the conflict of interest issues around price are dealt with under by Sections 134-137 of the Act, the Committee agrees with the Complainants that part of the service being offered by the Company was expertise in negotiation. Negotiation covers more than simply price. It may extend to any matter contained in the agreement. The Committee found that such expertise was withheld from the Complainants because they were dealing directly with the purchaser, an employee of their agent.21 Above n 3, at [3.5].3.8 The Committee suspects that the Company policy around the entitlement to the selling share of the commission is the driver for this policy. In that, to be entitled to a selling share of the fee, it is the Company policy that the person to be paid such a share must conduct the negotiations.3.9 It appears to the Committee that the Company could remedy this situation by making this type of negotiation subject to specific rules, such as having the branch manager perform the negotiations on behalf of the Company. By doing so, the parties would remain atarm's length and the best interests of the Company's clients wouldbe served. If however there is ever any doubt that the best interests of the vendor are not able to be protected then another independent person may need to be engaged.The Tribunal's decision[24] The Tribunal accepted B&T's submission that ss 134 to 137 of the Act couldbe regarded as "a type of code".22 However, the Tribunal also thought it"elementary" that those provisions did not exclude the need for the licensee toobserve the Professional Conduct and Client Care Rules.23 The Tribunal did not consider there was any conflict between the provisions of ss 134 to 137 and thoserules. It was "self-evident" that, once an agent in a real estate firm holding a listingof a particular property wishes to acquire the property, a conflict of interest arises.24Sections 134 to 137 were to be observed so as to achieve "informed consent" by thevendor. But the issue was the conduct of the licensee in the negotiation of the transaction. In that respect the Tribunal said:[47] We consider that whenever an agent assisting a vendor, orworking for the agency firm of a vendor which is marketing the vendor'sproperty, becomes interested in negotiating himself or herself with the vendor, then that agent must completely step aside from treating directly with the vendor and the vendor must be advised and assisted by another agent/licensee, preferably from another real estate firm. When such a situation develops, the manager of the listing real estate agency should take control and direct an arms-length negotiation process. If the agency comprises only the one licensee who is interested in treating with the vendor, then the property needs to be relisted with another agency, although it may be appropriate for the agent to hand negotiations over to his or her lawyer.22 Above n 4, at [43].23 Above n 4, at [43].24 Above n 4, at [46].[25] And it added:[49] When a vendor lists a property with a real estate firm, that vendor is entitled to expect experienced and independent advice given with full integrity by way of full assistance to the vendor; and there also needs to be the appearance of that. When an agent who is supposed to be advising a vendor, or who is part of the listing firm, seeks to negotiate with the vendor, then there must be a transparent and arms-length agency policy. At material times to this appeal, that has not been that situation at Barfoot & Thompson Ltd and that situation has been carefully analysed by the Committee.[26] The decision of the Committee and the penalty orders were upheld.The High Court judgment[27] While ultimately dismissing the appeal, Courtney J took a slightly differentapproach than the Tribunal. She disagreed with the Tribunal's conclusion that alicensee seeking to acquire a property listed with his or her agency should invariably step aside from the negotiation.25 The Judge considered this was inconsistent with s 134.[28] Nevertheless, Courtney J considered B&T's conduct was unsatisfactory asfound by the Committee and the Tribunal. This was because:26consent under s 134 means informed consent; whilst a client's consent willonly be effective if s 134 has been complied with, compliance with s 134 alone will not produce informed consent. There are steps that a licenseemust take in order to obtain informed consent. B&T's policy does notaddress this issue.[29] The Judge found that a prospective vendor typically engages a real estate agent to appraise and market the property, elicit and present offers and to negotiateon the vendor's behalf. In undertaking that work, an agent is frequently privy toconfidential information that would be helpful to purchasers, such as financial pressures on the vendor. In such circumstances, a real estate agent owed both contractual and fiduciary obligations to the client.[30] By reference to well established authorities Courtney J found that the fiduciary duty of loyalty had several aspects. In particular there were obligations not25 Above n 4, at [33].26 Above n 4, at [35].to act in a position of conflict and not to profit from the relationship,27 and not tomisuse confidential information coming into the licensee's hands.28 The licensee could be relieved of these obligations only if the client gave informed consent.29[31] In support of her conclusion that consent under s 134 of the Act meant informed consent, the Judge pointed to the purpose of the Act. This is stated to be the promotion and protection of the interests of consumers in real estate transactions and the promotion of public confidence in the performance of real estate agency work.30 The Judge also supported her conclusion by reference to the fiduciary duties explicitly recognised in the Professional Conduct and Client Care Rules.[32] As to the scope of the obligation to obtain the client's informed consent, theJudge said:[40] What is required to obtain informed consent depends on the circumstances of the particular case. The client is consenting to the agent acting in a position of conflict and must give consent in the knowledge of that conflict. Self-evidently, bare advice that a conflict exists is not adequate. The client must be provided with sufficient information to understand the nature and implications of a conflict.(footnotes omitted)[33] Courtney J referred by analogy to a solicitor who acts in a position of conflict between two clients. The Privy Council had stated in Clark Boyce v Mouat that the solicitor might be disabled from disclosing to each party the full knowledge he possessed as to the transaction and might be disabled from giving advice to one party which conflicts with the interest of the other.31[34] In the real estate context, Courtney J observed that a prospective vendor in circumstances such as the present was consenting to the risk that the agent would use personal information not available to other purchasers and to the risk that the agentwould not put the vendor's interests first in any negotiation. In addition, under B&T's policy, the agent would receive a commission on the sale.27 Boardman v Phipps [1967] 2 AC 46, [1966] 3 WLR 1009 (HL).28 MacLean v Arklow Investments Ltd [1998] 3 NZLR 680 (CA) at 733; Arklow Investments Ltd v MacLean [2000] 2 NZLR 1, [2000] 1 WLR 594 (PC).29 Stevens v Premium Real Estate [2009] NZSC 15, [2009] 2 NZLR 384 at [72].30 Section 3(1) of the Act.31 Clark Boyce v Mouat [1993] 3 NZLR 641 (PC) at 646.[35] The Judge did not consider the prescribed form in the Schedule to the Regulations adequately explained the risks. In particular:[45] A client who is given the prescribed form could not possibly understand from it that the reason consent is being sought is that the licensee who wishes to acquire the property is acting in a position of conflict and could use personal information acquired through the relationship for his or her own benefit and put his or her own interests ahead of the vendor'sinterests in negotiations and, moreover, will receive a commission on the sale. Yet the client could only give true consent if those risks were explained explicitly.[36] Finally, citing the judgment of Casey J in Lee v Pasley Real Estate Ltd,Courtney J concluded:32[47] B&T's policy proceeds on the wrong assumption that compliancewith ss 134-137 will be adequate to obtain true consent to licensees being relieved of their usual fiduciary obligations. It does not address the obligation on licensees to explain to the client the nature of the conflict and the consequences of giving consent. As a result, compliance with the internal policy, without more, puts both licensees and clients at risk. I therefore agree with the Tribunal's finding of unsatisfactory conduct.B&T's argument[37] Mr Rea took us through the history of the legislation governing the purchase of land by licensees in circumstances such as the present. He also referred to Parliamentary materials relating thereto. Counsel submitted that Parliament hadrecognised the conflict that could arise and had addressed the "mischief" by enactingand progressively tightening the legislative controls now reflected in ss 134 to 137 of the Act.[38] These provisions were to be read in conjunction with the Regulations including in particular the prescribed form of consent.33 There was, he submitted, nothing to suggest that Parliament intended any additional obligations to apply in this context beyond the requirements of ss 134 to 137. If Parliament had intended this, it would have said so.32 Lee v Pasley Real Estate Ltd (1979) 1 NZCPR 613 (SC) at 615.33 In effect, these provisions were a code which was intended to exhaust the obligations on the licensee to acquire a property from a client.[39] Addressing the Professional Conduct and Client Care Rules, Mr Rea submitted these were rules of general application and were not intended to apply in the specific context of ss 134 to 137 of the Act.[40] As to the terms of B&T's policy, Mr Rea submitted that, by necessary implication, s 134(1) of the Act authorised a licensee who had obtained the client'sconsent in compliance with the Act to negotiate directly with the client as part of the real estate agency work the licensee was authorised to undertake by that provision. In this respect, s 134(1) could be contrasted with s 134(2).[41] We had some difficulty in reconciling Mr Rea's submission on the need foran informed consent under s 134. As we understand it, his submission was that there was no requirement for informed consent. On the other hand, counsel accepted there was a fiduciary obligation to disclose to the client the existence, for example, of other actual or potential offers for the property, including any that exceeded thelicensee's offer or the amount of the valuation provided.Conclusions[42] We are satisfied for the reasons that follow that the appeal should be dismissed. The first reason is the clear distinction between the functions of ss 134 to 137 and the disciplinary provisions of Part 4 of the Act. The former set out the statutory requirements which must be met before there can be an enforceableagreement enabling the licensee or a related person to acquire a client's property or an interest in it. In contrast, the disciplinary functions of the Committee and the Tribunal under the Act are concerned with regulating the professional conduct oflicensees. The flaw in B&T's argument is the failure to recognise that the finding of unsatisfactory conduct in respect of B&T's policy is primarily concerned with thedisciplinary function of the bodies appointed under the Act and not with the requirements necessary to obtain an enforceable agreement under ss 134 to 137.[43] Second, we agree with Courtney J that the fiduciary obligations she identified are not inconsistent with and are not excluded by ss 134 to 137 of the Act. Rather they are intended to supplement those provisions. We do not discern anything in the materials to which we have been referred by Mr Rea which suggests the contrary.[44] Third, we agree with the Judge that consent of the client under s 134 must be an informed consent. That conclusion is consistent with the general law and withLee v Pasley Real Estate Ltd in which Casey J interpreted s 78 of the Real EstateAgents Act 1963 as requiring a "true" consent.34 In that case, the failure of the agentto disclose his entitlement to a commission meant that there was no "true" consent.35We note too that B&T accepted before the Committee that an informed consent was required.36 In Mr Rea's submission to us, a different view is now taken.[45] Fourth, we agree with the Judge that the conflict of interest between the client and the licensee is self-evident for the reasons she gave. These reasons are consistent with those given by the Committee and the Tribunal in their decisions. Insimple terms, the licensee's loyalties are divided between the duty owed as anemployee of B&T to act in the best interests of the vendor clients and the licensee'sself-interest in securing an agreement on terms favourable to himself or herself. This state of affairs is compounded by the licensee receiving a share of the commission which, as the Committee found, means the licensee is effectively obtaining the property at a discounted price.[46] The observations of White J in Christie v Harcourt & Co are apposite:37The essence of a land agent's duty being to get the best possible offer, thatduty is deemed to be affected if the possibility of conflict of interest existsthrough the agent's connection with the purchaser. The general law on this subject is stated conveniently in a sentence in Powell on Agency (2nd ed)312, "An agent has a general duty to act solely for the benefit of his principal " and the words of Lord Wynford in Rothschild v Brookman (1831) 2 Dow& Cl 188, 197; 6 ER 699, 702, are quoted: " no man ought to be trusted ina situation that gives him the opportunity of taking advantage of the personwho has reposed confidence in him."[47] This brings us to our last point on the principal issues. B&T's policy cannotbe regarded as meeting the fiduciary obligations the licensee and B&T owe to theirclients. Licensees who wish to acquire a client's property are instructed to approachthe client directly and thereafter to "commence and control all negotiations between34 Lee v Pasley Real Estate Ltd, above n 32 at 615.35 As we noted at [15] above, the payment of commission is now specifically addressed in s 136(4) of the Act.36 Above n 2, at [4.1].37 Christie v Harcourt & Co [1973] 2 NZLR 139 (SC) at 141.themselves and the client provided that the provisions of ss 134 to 137 of the Acthave been complied with". This does not comply with the fiduciary obligations bothB&T and the licensee owed to the client. We do not accept Mr Rea's submission thatsuch a course is impliedly authorised by s 134. While this section impliedly authorises the licensee to carry out real estate agency work where informed consent is given by the client, it does not authorise the licensee to carry out that work to the exclusion of B&T as the listed agency or to the exclusion of the listed licensee. Similarly, the prescribed form of consent has nothing to say about the wider fiduciary obligations we have identified. Nor, as the Judge found, does it address the obligation on the licensee to explain to the client the nature of the conflict and its consequences.[48] B&T's policy amounts to an abdication of its primary responsibility as theholder of the listing to act in the best interests of its vendor client. Instead, the policy leaves the client in the hands of a licensee whose objective as would-be purchaser necessarily conflicts with the best interests of the client as vendor. Moreover, the licensee may be in possession of information that the client could reasonably expect to be confidential and to other material information that ought properly to be disclosed to the client. To take just three obvious examples: the licensee may be in possession of information which could be used to the licensee's advantage; thelicensee may fail to disclose he or she or a related party intends to develop the property (as occurred in the Premium Real Estate case);38 or the licensee may fail to disclose interest in, or offers made for, the property by others which may be material to the price the client would accept.[49] In these circumstances, we have no hesitation in agreeing with the High Court that B&T's policy amounted to unsatisfactory conduct as found by theCommittee and upheld by the Tribunal. The reasons were clearly expressed in the findings of the Committee we have summarised at [21] above. In the absence of anyevidence of industry practice, we are unable to accept Mr Rea's assertion that, untilthe decisions under appeal, the industry view was that compliance with ss 134 to 137of the Act exhausted a licensee's obligations in this context.38 Above n 29.[50] It will be a matter for the appellant to determine in the light of this judgment how best to meet its responsibilities to the vendor in cases such as the present.[51] After the hearing of this appeal, the appellant sought to place further material before the Court said to be relevant to the interpretation of the statutory provisions at issue. The respondent opposed this application. We decline to grant leave. The material is of doubtful admissibility and we do not consider it materially assists.Result[52] The appeal is dismissed.[53] The appellant must pay the respondent costs for a standard appeal on a band A basis and usual disbursements.Solicitors:Glaister Ennor, Auckland for AppellantMeredith Connell, Auckland for Respondent