Stanaway real estate ruled 'negligent' in botched $6m mansion sale

A real estate agency has been ordered to pay more than $2 million after the botched sale of a seaside mansion on Auckland's North Shore.

The three-story Milford home, which boasts an indoor swimming pool and views to Rangitoto, was meant to be a holiday getaway for James and June Messenger of Guernsey Island, off England.

But the retirees spent only a single four-week vacation in the house that has been embroiled in a dispute for almost 10 years.

According to a real estate listing, the couple were unable to return after James required heart surgery.

In 2006, they sold the property for $6m with the help of real estate firm Stanaway, which owns a Bayleys franchise on the North Shore.

But a poorly drafted contract led to confusion over the settlement date, and two years later no payments had been made.

By that time the property market had slumped and the Messengers were forced to re-sell the home for just $4.4m.

They won a court judgment against the original buyers, John Goodman and Deborah Rattray, for more than $2.8m, but the buyers were declared bankrupt shortly afterwards.

The Messengers then switched their attention to Stanaway, alleging in the High Court that it had been negligent.

Justice Mark Woolford has now handed down his judgment, ruling in the Messengers favour.

He said a competent real estate agent would have clarified the settlement date, and known that the offer presented to the Messengers "seriously disadvantaged them".

"In my view, Stanaway is liable for all the foreseeable consequences of its negligence," he said.

However, the judge discounted the sum payable by 20 per cent because of the Messengers' failure to take the contract to their lawyers.

"A prudent businessman would have sought advice in order to safeguard his position," the judge said.

Justice Woolford dismissed Stanaway's attempt to get the Messenger's law firm and their son Gary, who had referred them the sale, to share liability.

He ordered the Messengers be paid $2.2m, which comprised lost resale value, mortgage interest costs, and legal costs.

Interest and the costs of the High Court case would be added to that sum.

Stanaway's lawyer, Michael Ring QC, could not immediately be reached for comment on whether an appeal was likely.

When Bayleys realtor Sheryl Campbell gave evidence to the Court last year, she said she felt "very nervous" about the Goodman-Rattray agreement.

"At the time I felt like they were all ignoring my advice."

Campbell said she had repeatedly told the Messengers to take legal advice and had pointed out her concerns with the agreement.

After the sale fell through, she said, James Messenger had told her "he didn't blame me" and that he wished he had listened to her.

Campbell denied she had pushed hard to get the sale locked in, and said an alternative offer from more credible buyers had been rejected by the vendors.

 Source - Stuff