A savvy overseas buyer and a fall-out over a luxury Queenstown house sale have led to a couple being ordered to pay their real estate agent almost $130,000 in commission.
Ross and Nona James listed the Alpine Retreat home for exclusive sale with Terry Spice at Luxury Real Estate Ltd in 2017. It sold for $3.15 million.
However, as the relationship between the couple and their agent deteriorated, the agent swore and spoke “in an aggressive manner”, before refusing to work with Nona James.
After the property sold, Luxury Real Estate sent the couple an invoice for $125,787.50, which they did not pay.
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The company sued Ross and Nona James in the District Court for not paying the commission and were awarded $128,325.05, plus interest.
The couple appealed that decision to the High Court. Justice Rob Osborne dismissed the appeal, in a judgment on May 10.
The judgment says the James’ claimed Luxury Real Estate was not entitled to payment because it had cancelled the agency agreement and that Spice’s behaviour was misleading or deceitful.
They sought $100,000 in damages, as they believed they would have achieved a higher sale price without the breaches by Luxury Real Estate.
While the property was on the market, Singaporean resident Chivukula Bharadwaja became aware of it from his friend, Madhujeet Chimni, who was a neighbour of Ross and Nona James.
Debbie Jamieson/Stuff
The view from Alpine Retreat, near Queenstown.
On February 17, 2017, he flew to Queenstown to view the property and again the next day.
Spice was unavailable to assist with the viewing and price negotiations started between Ross James and Bharadwaja.
The couple kept Spice informed of these discussions.
Bharadwaja verbally offered them $3.25m for the house but on February 22 presented them with a signed unconditional agreement for $3m.
The couple were disappointed and felt they had been “played” by Bharadwaja.
They asked Spice to negotiate directly from Bharadwaja, but Ross James continued to communicate with him.
At the same time, Spice encouraged the couple to initiate a multi-offer process as he had at least two other potential purchasers who were likely to make offers on the property and he believed he could get a price of $3.3m.
Despite Bharadwaja’s solicitors insisting he would not pay more than $3m, they presented an unconditional offer of $3.15m at the end of the multi-offer period. No other offers were made.
Spice advised the couple and Bharadwaja that he was the only buyer remaining, as he believed it was the ethical thing to do.
Spice and the couple met that same evening, where relations became tense and ended with angry recriminations, the judgment says.
The couple claim that was when the professional relationship ended due to Spice shouting that he was “walking away”, swearing and behaving aggressively.
He said he could no longer work with them, and refused to communicate further with Nona James.
The District Court judge had found that while Spice did swear and speak aggressively during the discussions, but did not swear at Ross and Nona James.
The swear word “f…” is commonly used for emphasis in modern New Zealand, if not in politest society, and there is a significant difference between saying “f… Mr Bharadwaja” and “f… you”.
“I am not satisfied that Terry used the latter expression,” the judge said.
He also accepted that by not working with Nona James, Spice was still working with Ross James, and that the expression “walking away” referred to walking away from the meeting, not the business relationship.
Debbie Jamieson/Stuff
House sellers and their real estate agents disagreed over a $125,000 commission due on the luxury home.
In assessing the appeal, Justice Osborne found the District Court judge did make an error when he found the couple had given informed consent around the multi-buyer agreement, because they did not understand how the process worked.
However, he did not uphold any of the other complaints about Spice and the performance of his duties as their real estate agent, including claims he misrepresented the level of interest in the property and did not advise them of the risks of the multi-buyer scenario.
“The best and only option we had left was to accept [Mr Bharadwaja’s] offer of $3.15 million even though that was $100,000 less than we knew he had been prepared to pay,” the couple told the court.
Justice Osborne said there was no evidence Bharadwaja would have paid a higher price and said the couple had been right to think that Bharadwaja had “played” them with his “dangled figures”.
He dismissed the appeal and ordered Ross and Nona James to also pay the costs of the appeal.