Auckland real estate firm Premium Real Estate was ordered to pay $660,000 damages and refund commission of $67,000 for failing to tell its client material information about a prospective purchaser.
During sale negotiations it was impressed on the client that the purchaser had fallen in love with the
The court ruled the agent’s collusion in supporting the purchaser’s buying strategy was a breach of the real estate agent’s duty of loyalty to a client.
Damages were calculated on the difference between the two sale prices, after netting out the commission deducted on each sale. In addition, the real estate agent was ordered to refund the commission received on the first sale. The court ruled the agent breached a duty of trust owed to the client by deliberately and dishonestly misleading the client about the purchaser’s motives.
In a subsequent hearing before the Supreme Court, the agent wanted to revisit the calculation of damages. There had been earlier evidence that the purchaser made improvements to the property before reselling and that in the five month period between sale and resale the market for similar properties was booming, rising at a rate of 15%-16% per annum.
The court refused a further hearing. The real estate agent had the chance to argue these points at the first Supreme Court hearing, but did not.
Stevens v. Premium Real Estate – Supreme Court (6.3.09 & 3.4.09)
08.09.003