Barfoot & Thompson failed to defend its agents who bought properties listed with the company, including receiving a cut of the commission.

Real estate agency Barfoot & Thompson will have to return commissions on two house sales where its agents bought the properties and shared the fees.

The Court of Appeal has dismissed its attempts to overturn a finding of unsatisfactory conduct, adding court costs to an earlier order to repay $10,000 to two sellers.

The case involved Barfoot & Thompson (B&T) defending its agents who bought properties listed with the company, including receiving a cut of the commission.

In 2014 the Real Estate Agents Disciplinary Tribunal ruled the company had "engaged in unsatisfactory conduct", a finding upheld by the High Court.

READ MORE: * Barfoot and Thompson real estate agents buying property share the fee

The company took the case to the Court of Appeal claiming the findings of the High Court were "wrong in law".

However, the Court of Appeal upheld the ruling, agreeing the company had failed to act in the best interests of the seller.

The case was heard after the Real Estate Agents Authority (REAA) received complaints involving the purchase of client properties by B&T agents.

The first complaint came from a couple - the Smiths - who listed their property in Te Atatu with B&T agent Ann Mushet and George Fong. The property was appraised at $377,166.

Two other licensees with the last names Littler and Barnett, viewed the property as part of the B&T's "team viewing". The pair were looking for an investment property.

Littler contacted the Smiths directly, identified himself as a B&T agent and asked what interest there had been in the property.

They told Littler there had been previous interest at about the $360,000 mark.

Following the phone call, Littler presented the Smiths with a conditional offer of $360,000. There was a counter-offer, then a further offer from Littler at $368,000 was finally accepted.

The original listing agents - Mushet and Fong - were not involved in the negotiations.

After a valuation and builder's report, the sale price was renegotiated.

Littler and Barnett - the new homeowners - received $5710 of the commission that the Smiths paid to the listing agents.

The second complaint came from a woman identified as Ms Pine, who listed her property in Stanmore Bay with B&T agents Jeremy and Anne Thatcher.

They appraised the property between $385,000 and $410,000.

Pine's home failed to sell after being on the market for four months, so Pine's mother contacted another B&T agent - Victoria Cherrington.

The property was then listed with Cherrington for $389,000.

The day after, Cherrington offered Pine $382,000 for her property - conditional on a builder's report, finance and LIM report.

During negotiations, Pine disclosed she was under pressure to sell.

Cherrington obtained a valuation of $380,00 and had a verbal discussion with a builder who raised some issues.

She took that knowledge back to Pine and negotiations continued.

They settled at $376,000 and Cherrington received $5148 commission.

According to Barfoot & Thompson's internal policy, if one of their agents, or a related person, wants to buy a property listed for sale with the agency then the agent can deal directly with the seller.

However, the court decision stated the policy was an "abdication of its primary responsibility."

"Instead, the policy leaves the client in the hands of a licensee whose objective as would-be purchaser necessarily conflicts with the best interest of the client as vendor.

"Moreover, the licensee may be in possession of information that the client could reasonably expect to be confidential."

Barfoot & Thompson compliance manager Max House said they were reviewing various aspects of the Court of Appeal decision and taking legal advice as to the impact on the agency.

"We will obviously be making any appropriate changes to our processes to ensure the protection of our vendors [but] until that process has been completed, we are not in a position to provide further commentary."

House refused to answer questions about the individual complaints which led to the case.

REAA chief executive Kevin Lampen-Smith said the Court of Appeal decision highlighted the importance of agents acting in a seller's best interests.

"This is an excellent decision that reinforces how critical it is for an agent to meet their obligations...and protect the vendor's best interests when there is a conflict of interest.

"The original decision of unsatisfactory conduct made by the complaints assessment committee has endured rigorous scrutiny through the appeal process and we are very pleased that protecting consumer interests has remained paramount throughout."

Sign up to receive our new evening newsletter Two Minutes of Stuff - the news, but different.