Court clears two property agencies
Judge says firms did not take part in price fixing
The High Court has cleared two of the 13 real estate agencies accused of price fixing by circumventing Trade Me’s pricing scheme.
The decision comes after the 11 other agencies have already paid close to $20 million in penalties and negotiated settlements following a major Commerce Commission investigation.
In late 2013, Trade Me notified a change to the fee charged to real estate agencies, from a capped subscription to a “per listing” fee, the judgment said.
The commission alleged the agencies agreed to withdraw residential real estate listings from Trade Me by January 20, 2014, not to bear any of the cost of any further listings on Trade Me, and to require vendors and/or their individual agents to pay for any new listing.
In a decision released last Thursday, Justice Pheroze Jagose concluded that Hamilton’s Lodge Real Estate and Monarch Real Estate, a franchisee of Harcourt’s, did not take part in price fixing.
Representatives for the two Two Hamilton agencies, Lodge Real Estate and Monarch Real Estate, have been cleared. companies accepted they had met with the other agencies in September 2013 but maintained any decisions about how to respond to Trade Me’s new prices were arrived at independently.
Counsel for Lodge and Monarch said they had decided in advance of the meeting to vendor-fund standard listings upon the introduction of the new fee structure.
Jagose found that the companies were “part of a consensus giving rise to expectations each would not absorb the cost of Trade Me’s proposed per listing fee”.
However, “the arrangement or understanding between the defendants did not have the purpose or effect of fixing, controlling, or maintaining . . . the price for, or any discount, allowance, rebate, or credit in relation to, real estate sales or advertising services supplied by the defendants in competition with each other”, the decision said.
Monarch’s lawyer, Mark Anderson, said the realty market had been left in an unfair position by facing huge price increases while also having a duty to protect the best interests of its vendor clients.
“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 procompetitive actions of the market,” he said.
“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.”