More than $1 million was allegedly "removed" from an Auckland real estate agent client trust account yet two licensees at the business failed to tell the Real Estate Authority, a tribunal heard today.

Simon Waalkens, a lawyer for a Complaints Assessment Committee of the Real Estate Authority, made the allegations before the Real Estate Agents Disciplinary Tribunal in Auckland today.

The tribunal heard this morning that Joseph Voordouw and Garry Mason, who both worked at Auckland real estate agency Preet & Co, knew about $1.2m being removed from the client trust account but failed to take appropriate action. Both are defending the case.

Waalkens said the complaints committee alleged that "$1.2m of clients' money was removed from a client account over six months in 2017".

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That was a breach of the law and the only decision for the tribunal was how serious that breach was, he said.

Voordouw had already admitted a misconduct charge under a section of the Real Estate Agents Act for seriously incompetent or negligent real estate agent work, Waalkens said.

Voordouw faces a further charge of misconduct for wilful or reckless contravention of client care rules or, alternatively, misconduct for seriously incompetent or negligent work.

Mason faces the same charge.

Waalkens alleged $1m was initially transferred and a further $200,000 followed.

Yet Voordouw and Mason did not report that to the authority, he claimed.

The charges against the two did not allege misuse of clients' funds "but that they knew or should have known to take steps and in not doing so, they failed in their duties as licensees", Waalkens said.

Gurpreet Grewal, also known as or Preet Grewal, was managing director and sole shareholder of Preet & Co, where the two men worked.

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It had undergone rapid expansion, with 10 branches in south and east Auckland, Waalkens said.

The defendants had relied in part on an external auditor and the information he provided and that was one of the reasons the financial transfers were not reported, the tribunal heard.

"The defendants are very experienced and it is not disputed that they are well thought of," Waalkens told the tribunal.

Tim Rea for Voordouw said his client had taken the matters seriously and had immediately talked to the auditor.

"He was regularly chasing Mr Grewal who was regularly checking the trust account," Rea told the tribunal.

Voordouw had further insisted that the master franchisor be contacted and sought guidance from them, Rea said.

Voordouw and Mason were "extremely experienced and well respected" and it would be clear from the evidence that they did not intentionally breach the rules, Rea said.

"Nor were they reckless. Everything they did was reasonable," Rea told the tribunal.

Both licensees had taken diligent steps to get to the bottom of the matter. If there was any breach, it was at the lower end of the scale, Rea said.

Richard Hern, who represented Mason, reiterated Rea's comments.

Under cross-examination from Waalkens, Voordouw said he became Preet's Ellerslie branch manager in 2016 and "it was an exciting time...it was a lot of pressure". In April last year, he took over the role of signing off monthly trust accounts and the first reconciliation he signed off was for the June/July period, he said.

Asked by Waalkens if he was shocked by money transfers, Voordouw said "yes I was", but he had instructed the auditor to undertake an investigation.

"This was a large company and the trust account balance was regularly $4m-plus," Voordouw said.

Asked who he thought had taken the $1m, Voordouw said: "Nobody was above or without doubt."

Voordouw agreed with Waalkens that it was client money and not to be touched but he also said he understood Preet was "from a very wealthy family in India and money was not a problem".

Voordouw said he had contacted the auditor and was "entirely comfortable" with the steps he took. He waited for the auditor to undertake the investigation in late August last year.

The tribunal made a non-publication or suppression order in one aspect of the hearing today although Waalkens did not seek any suppression orders.

The case has been set down for two days and the decision is expected to be reserved.