Auckland surgeon Mark Gittos was ordered to pay $33,900 damages after backing out of an agreement to sell a McLaren Formula One body shell. A valid contract of sale was agreed by exchange of text messages, but the buyer’s identity was disputed.
Looking to sell the Formula One body shell in March 2019, Mr Gittos approached Max Fletcher, a specialist selling European marque vehicles through his Auckland business: The Toy Shop. Mr Fletcher contacted the previous owner in Canada and found a willing buyer.
Having agreed on a price at $125,000, Mr Gittos had second thoughts and refused to go ahead. When sued by Toy Shop, Mr Gittos argued he had no contract with Toy Shop; Toy Shop’s Mr Fletcher was acting on his behalf in a sale to an undisclosed buyer, he said.
In court, text messages between the two were closely analysed. Mr Gittos pointed to a text from Mr Fletcher stating he would receive a ‘commission’ and another text from Mr Fletcher claiming to have ‘moved the guy up’ to a higher price. Mr Fletcher was acting as his agent, Mr Gittos said. It could equally mean Mr Fletcher was acting as agent for an undisclosed principal, in this case his company Toy Shop, Justice Gault said. The word ‘commission’ could be viewed as a loose expression by Mr Fletcher referencing his estimated profit.
Acknowledgement that there was a sale to Toy Shop was highlighted by one text interchange where Mr Gittos referred to GST benefits for Mr Fletcher’s Toy Shop as buyer. If Mr Gittos personally was selling off-shore in a transaction arranged by Mr Fletcher as his agent, the sale would be zero-rated as an export transaction.
Damages of $33,900 were assessed as the profit lost by Toy Shop when Mr Gittos refused to hand over the body shell for onward sale to Toy Shop’s Canadian buyer.
Gittos v. The Toy Shop (Auckland) Ltd – High Court (19.10.21)
21.171