High Court rules against five real estate agents
Five real estate agents resigned from Harcourts over a matter of days in December; by January 30, they had set up a new Bayleys office just down the road, listing properties which came from sales leads developed at their old workplace.
Harcourts has now won an interim order to stop its former real estate agents from working for the competition.
The High Court has made an interim order that four real estate agents will not be able to work in the Paremata area, from Tawa to Pukerua Bay, for three months. They will also have to return any confidential information to their former employer, Harcourts.
There was a “serious question” to be considered about how the real estate agents had used confidential information from Harcourts and whether the restraint of trade clauses should be
Justice Isac found.
There was a “tenable narrative” showing a co-ordinated movement of an entire sales team and their manager from Harcourts to a new entrant in the Paremata market, Bayleys. “The value and advantage to be gained by Bayleys is obvious,” the judge noted.
Within the space of a few days, a group of four real estate agents – Martin Cardno, Tanya Davies, Holly Williams and Ralph enforced against them,
Kindl, and sales manager Tony Fitzsimons – all resigned from Harcourts Paremata in December last year.
Two downloaded the contacts Harcourts clients before leaving.
Williams claimed she had downloaded the contacts the day before she resigned to create a mail-out, and had not yet decided to leave at that point. “I am unable to accept that explanation, even on the papers,” the judge wrote. At the end of January, Bayleys Paremata opened a rival real estate office, just 300m down the road from Harcourts, with the former Harcourts team.
All four real estate agents listed a property for sale within three days of Bayleys opening, even though both sides agreed it would normally take at least a month to develop a lead into a property listing. “The obvious inference, which the respondents do not shy away from, is that to list properties for Bayleys so quickly the respondents must have converted leads obtained while working for their with Harcourts,” Justice Isac wrote.
Seven of the nine properties listed for sale since the real estate agents moved to Bayleys were properties they had worked on at Harcourts – “using Harcourts systems, and leads otherwise obtained by them while engaged by Harcourts”.
According to Harcourts, all but one of the listings from Bayleys Paremata had come from leads which the real estate agents generated while working for Harcourts.
The Bayleys real estate agents had argued that only the listings themselves were protected, not the sales leads from Harcourts. They told the court that Harcourts had not been specific enough about what confidential information it was trying to protect, so the restraint of trade should not be enforced.
Justice Isac found that Harcourts had a “strong case” and the Bayleys agents’ case was “based on what I consider a benign view of their conduct and an optimistic interpretation of the agreements”.