Agencies cleared of price-fixing

Two real estate agencies have won their fight against price-fixing claims.

The Commerce Commission took action against real estate agencies across the country, after Trade Me put up its prices in 2013.

A number of agencies met to discuss a plan to put their listings on Realestate.co.nz instead. The commission said they were pricefixing when they all agreed to charge vendors who wanted to list on Trade Me.

Eleven regional and national real estate agencies have negotiated settlements with the Commerce Commission and have paid nearly $20 million in fines.

But Lodge Real Estate and Monarch Real Estate were not willing to do so.

The Hamilton agencies argued that when they met to discuss strategies, they were trying to protect vendors from the added costs.

The agencies maintained that any discussion concerning the change in the pricing structure proposed by the sales listing site was not in breach of the Commerce Act.

They said the decision to not absorb the new Trade Me fee was the result of their economic ability to carry what for some agencies would be a more than a 3500 per cent price increase.

Trade Me has since backed down from the price change.

Of the five defendants in the

"The decision is a common-sense reflection of economic reality." Mark Anderson, lawyer for Monarch Real Estate

Hamilton case, three gave evidence for the Commerce Commission because they had already acknowledged they had breached the act.

But at the High Court, Justice Pheroze Jagose sided with Lodge and Monarch.

The judge concluded that although there were discussions at the agencies’ meetings with each other, there was no arrangement or understanding that had any purpose or effect of fixing, controlling, or maintaining the price for real estate or advertising services supplied and so there was no breach of the applicable provisions of the Commerce Act.

Justice Jagose cleared Lodge Real Estate and Monarch Real Estate, and their principals Jeremy O’Rourke and Brian King, of breaching Sections 27 and 30 of the Commerce Act by indulging in anti-competitive behaviour.

‘‘The realty market was left in the invidious position of facing massive price increases from a supplier of products, but also having a duty to protect the best interest of its vendor clients in obtaining the most appropriate marketing products, at the best price to sell their homes,’’ said Mark Anderson, the lawyer who acted for Monarch.

‘‘There was no collusive behaviour for gain, agents and vendors were still free to negotiate on price and, in dismissing the allegations, the court recognised the pro-competitive actions of the market.

‘‘The decision is a commonsense reflection of economic reality where even Trade Me recognised that realtors would have to pass the new price on to consumers.

‘‘Passing on the Trade Me cost was the only viable option for agencies nationally.’’

He said the other agencies had opted to settle because of the cost of litigation.

‘‘The other parties have gone ‘a bird in the hand is worth two in the bush’. Litigation can be expensive and there’s some certainty [in settling].’’

He said Monarch and Lodge were not willing to countenance paying penalties when they did not believe they had done anything wrong.

‘‘This was the last remaining case.’’