Real estate commission of $120,000 was at stake with the High Court ruling Savills (NZ) Ltd’s failure to get its agency appointment signed off before introducing a buyer for Burson Family Trust’s Auckland industrial site at Drury meant it could not claim any commission.
Real Estate Agents Act rules prohibit agents suing for commission if they do not have signed authorisation to act as agent; rules enacted to stop interminable arguments about commission on sales of real estate.
The High Court was told Savills agent Henry Mann cold-called a trustee of the Burson Family Trust in late 2023 asking if the Trust was interested in selling its Drury landholding.
Encouraged by the Trust’s response that it would sell, provided it cleared six million dollars net of agent fees, Mr Mann emailed one day later that he had a prospective purchaser.
This email included a Savills agency agreement for signature.
Meeting with Burson trustees three weeks later, after the Christmas/New Year break, Mr Mann presented an offer from Scarlett family’s Aintree Group, together with a hard copy of Savills’ as yet unsigned agency agreement. Commission rate was reduced to achieve a net six million dollar sale.
Trustees subsequently signed both contracts, after taking legal advice.
Aintree Group later withdrew its conditional offer; the deal did not go ahead.
Mr Mann emailed Burson trustees, acknowledging the property was no longer on the market, offering to assist in any future marketing programme.
Learning some seven months later that Burson Trust had now sold to one of the Scarlett family’s other companies on terms similar to the earlier abandoned contract, Savills sued for commission.
The previously signed agency contract entitled Savills to commission on any sale subsequent to the agency if the sale was to a buyer ‘introduced’ during the agency.
The Scarletts as prospective buyers were introduced before the agency agreement was signed, Associate Judge Sussock said.
Putting forward the first Aintree offer before getting a signed agency contract meant Savills did not ‘introduce’ the eventual buyer during period of the agency, she ruled.
Savills (NZ) Ltd v. Burson – High Court (27.02.26)
26.087