‘I thought he was doing us a deal’

Areal estate agent abused his clients’ trust and deceived them about their property’s true value before buying it himself for $530,000 then on-selling it months later for $1.255 million, the Auckland District Court has heard.

It’s alleged former South Auckland Barfoot & Thompson agent Aaron John Hughes offered the family $100,000 after his windfall came to light in 2016.

The exchange was allegedly captured on a secret recording, in which Hughes also told the family he had no idea their house was worth so much or that he’d be able to flip it for a $720,000 profit.

But the Crown says this wasn’t true.

A search of his agency emails authorised by his former employer later revealed he’d secretly obtained a valua- tion for the property 11 days before the purchase, crown prosecutor Anna McConachy told the court yesterday.

The valuation said the Mt Wellington house was a “developer’s dream” and “might sell well in excess of $1.2m-$1.5m”.

The email was never disclosed to elderly Waikato vendors Jack and Walter Tata, which the Crown says was a breach of Hughes’ professional duties and a criminal offence.

Hughes went on trial yesterday facing two counts of causing loss by deception.

The charges were originally brought by the Real Estate Agents Authority but the case is being heard in the district court.

The allegations relate to two separate Auckland property deals between February and October 2015 in which companies controlled by Hughes allegedly purchased clients’ homes at significantly below market value.

He is accused of profiting through his deception by nearly $900,000 at the homeowners’ expense.

“The Crown alleges Mr Hughes abused his position as a real estate agent to take advantage of his clients’ trust,” McConachy said.

“As a real estate agent he owed duties to those vendors to act in their best interests.”

However, Hughes’ lawyer, David Jones, QC, cautioned the jury to keep an open mind.

Hughes did not set out to deceive the vendors and was not acting in his capacity as a licensed agent, Jones said.

“The status of Mr Hughes is very much at issue in terms of his relationship with the vendors. That’s important in terms of what duties he did or did not owe. It feeds into the issue of whether there was any deception and the defence says there was not.”

Jack Tata, 79, and his late brother decided to sell their inherited family home at 51 Lynton Rd in late 2014.

Tata told the court a relative put them in touch with Hughes.

Though the property had a then CV of $630,000, the Tatas told Hughes they thought it was worth about $600,000. A few weeks later he met them again, with several offers of “around $600,000” but conditional on getting LIM reports, Tata said.

Hughes then offered to buy the property himself for $530,000 through his company Az-Iz Rentals.

“He told us to keep quiet. If we were prepared to take his deal he would deal with the lawyers. We wouldn’t have to pay him commission. We were told not to let Barfoot & Thompson know about this.

“I suppose you could call it a little bit racist but I looked at him and said, ‘He’s a Maori boy, I’m a Maori boy’. I thought he was doing us a deal.”

During cross examination, Jones suggested the Tatas were embarrassed by the state of the house and wanted to sell it without marketing and avoid the “formalities” and commission fees of a Barfoot listing agreement. “Mr Hughes was simply confirming that it was a private sale.”

Jones also asked Tata about the recorded 2016 meeting in which Hughes allegedly offered the family $100,000. “Was that an attempt by you and your brother to try and negotiate some sort of deal so that Mr Hughes would pay you some money?” Jones asked.

Tata agreed. “Yes. It wasn’t fair that he should treat us like that.”

Had Hughes disclosed the valuation email, Tata said, they would have demanded more money.

The trial continues today before Judge Allan Roberts.