Colluding against a competitor costs real estate agents $62,800
24 November 1994
Working together against a competitor has cost a group of Blenheim and Picton real estate agents $62,800.
The Commerce Commission took High Court action against two real estate companies and five agents. In the Wellington High Court today, the defendants admitted breaching the Commerce Act and Justice McGechan set penalties of $60,000 and costs $2,800.
The real estate companies and agents admitted working together to prevent the Property Centre advertising in a property guide published by the Marlborough Express. They took action after the Property Centre reduced the commission it charged when it sold properties.
They threatened to boycott the property guide, leading to one issue being cancelled, if the Property Centre was allowed to advertise in the guide. The Marlborough Express accepted the conditions and future issues of the guide were published without advertising from the Property Centre. The Property Centre did continue advertising in the daily issues of the newspaper.
The Property Centre contacted the Marlborough District Sub-Branch of the Real Estate Institute and was told the other participants in the guide did not want to be seen advertising with an agent that had reduced its commission.
The Wellington Branch of the Institute would not investigate a complaint about the exclusion because it saw it as a matter between agents in the area.
Justice McGechan said whilst this was not the most serious breach of the Commerce Act, it could not be called a trivial matter.
Commerce Commission Chairman Alan Bollard said he was pleased with the substantial penalties imposed, especially as the defendants had admitted breaching the Act.
"It is a warning that should be heeded by all business sectors," Dr Bollard said.
"The Commission will take action when it finds collusion between competitors in any industry. Justice McGechan has shown how seriously courts will view breaches and that they will set substantial penalties."
Wrightson NMA Ltd $5,000, its agent Mr W.K.McLean $5,000;
McMurtry Real Estate $10,000, its agent Mr R.W.Avery $10,000;
Mr P.E.Goodin $10,000;
Mr W.H.Van Velthooven trading as the Professionals $10,000
Mr J.B.Davis trading as Harcourts Colonial Real Estate $10,000.
Costs of $400 were imposed on each defendant.
Media contact:Vince Cholewa, Communications Officer
Phone work (04) 471 0180, home (04) 479 1432