Ordered to pay a $125,000 commission on sale of their Queenstown property, claims by Ross and Nona James that real estate agent Terry Spice had cancelled his agency agreement in a heated argument over negotiating strategy were dismissed in the High Court.
Litigation followed the March 2017 sale of the James’ Queenstown property for $3.15 million, sold to a Singapore buyer alerted to the listing by James’ next door neighbour. The James refused to pay commission and marketing expenses billed by listing agency Luxury Real Estate Ltd.
The James expectations were a likely sale at $3.3 million. Evidence was given of initial discussions directly between the James and eventual buyer Chivukula Bharadwaja with Mr Bharadwaja signalling he would offer $3.25 million. The James were disappointed to receive a written offer to buy at a lesser price: a flat three million dollars. They considered they were being ‘played.’
Over the following days, two more expressions of interest surfaced; both from Australia. Luxury Real Estate agent Terry Spice initiated a multi-offer process, requiring all three to submit their best and final offer by deadline. When the two Australian prospects later withdrew without making an offer, the James objected to Mr Spice then advising Mr Bharadwaja that he was the only one left in the running.
A blazing row ensued. Uncomplimentary language was exchanged. Mr Spice walked out. The James said Mr Spice’s actions amounted to cancellation of the agency agreement; no commission was payable on the subsequent sale.
Justice Osborne ruled the heated argument did not amount to cancellation. Subsequent emails between Mr Spice and the James were evidence of steps taken to progress a sale.
The James further argued that if there was no cancellation, commission was not payable because of Mr Spice’s breach of duties as an agent. Mr Spice’s disclosure to Mr Bharadwaja that there were no competing offers was a wrongful disclosure of confidential information, they said. Mr Spice said he is ethically required to tell a multi-offer bidder that all other bidders have withdrawn, otherwise he has misled a prospective purchaser and is open to liability under the Fair Trading Act.
Justice Osborne ruled that Mr Spice was in breach of his duties as an agent only to the extent that he had not fully explained to the James from the outset as to how a multi-offer process might work out. The James suffered no loss from this breach, he ruled. The sale price of $3.15 million was the price Mr Bharadwaja submitted as part of the multi-offer process. There was no evidence of this being below market value.
James v. Luxury Real Estate Ltd – High Court (10.05.23)
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