Goyal Lane in Pakuranga Auckland today. Photo / Doug Sherring.
Goyal Lane in Pakuranga Auckland today. Photo / Doug Sherring.
A property investor allegedly used as a "front" for a real estate agent to buy homes signed official documents with his "eyes closed" but denies misleading investigators about his role in the transactions.
Manjit Grewal gave evidence this morning at a Real Estate Agents Disciplinary Tribunal hearing for Barfoot & Thompson agent Deepak Goyal.
Goyal is accused of wilful or reckless misconduct relating to his purchase of two neighbouring Pakuranga properties in Grassways Ave in 2015.
Prosecutors say he acted as an agent, earning commission on both sales, before later paying more than $100,000 to Grewal to cover the deposits then purchasing the properties himself through a newly formed company.
He is accused of deceiving the vendors and breaching his fiduciary duty to clients by failing to declare a personal financial interest in the two transactions.
Goyal admits unsatisfactory conduct but denies deceiving the vendors. He says the money was lent to Grewal and he only decided to purchase the properties himself to prevent the investor defaulting.
Grewal was cross examined today by Goyal's lawyer, Tim Rea.
Rea accused Grewal of misleading investigators, and suggested Grewal had always intended to buy and develop the properties himself.
Barfoot & Thompson agent Deepak Goyal is accused of wilful or reckless misconduct relating to his purchase of two neighbouring Pakuranga properties in Grassways Ave in 2015.
Those plans fell apart because Grewal had "over-extended" himself with other property deals and could not raise sufficient finance.
Rea alleged Grewal only alerted one of the vendors to the alleged scheme to get Goyal "into trouble" after he refused to transfer the properties back into Grewal's name.
Grewal denied this, saying Goyal was the intended purchasers from the outset. He agreed to help the agent buy the properties, due to their friendship and shared Indian culture.
Rea put it go Grewal that this meant he had knowingly entered into legal contracts in order to deceive the vendors and banks about the intended buyer's identity.
"You appreciate that would be dishonest to do that."
Grewal responded that he'd just done as he was asked by Goyal, signing documents without question and not bothering to read them.
"You were blindly following the instructions of Mr Goyal and you had no appreciation that what you were doing was dishonest?" Rea asked.
"He told me he take care of everything," Grewal responded.
"He said, 'Relax, don't worry about it. Everything under control'."
Rea showed Grewal a document he had signed dated March 13, 2015 "confirming Mr Goyal had lent you $130,000 and he promised to return it when demanded".
Grewal maintained the money was not loaned to him but was intended to cover the two deposit payments he had paid for 11 and 13 Grassways Ave, totalling $138,000.
"I signed this document with my eyes closed. I close my eyes and trust him."
Rea said it made no sense for Grewal to sign purchase agreements for two properties on behalf of Goyal and pay sizeable deposits out of his own funds.
"Why would you be using your own money to make payments on a development you had no interest in?"
Grewal reiterated he had trusted Goyal to eventually cover the outgoing deposit payments.
"He paid bit by bit. Some he pay first. Some he pay after.
"We just friends. In Indian culture we trust each other."
Yesterday the tribunal heard that Papatoetoe-based Goyal introduced Grewal to 11 Grassways Ave when it was listed for sale in November 2014 through Barfoot's Pakuranga office.
Grewal purchased the property at auction on November 29 for $1.16 million through his company HP & MP Properties Ltd.
Two days later, on December 1, Goyal deposited $40,000 into HP & MP Property Ltd's bank account, from which Grewal paid $58,000 deposit on the same day.
In March 2015 Goyal formed a company called VAD Properties Ltd with two fellow directors, both of whom were later removed.
The next day, Grewal transferred legal ownership of the property to Goyal's company. Settlement occurred three days later.
Then in mid-December 2014, Goyal approached the neighbouring property's owners about Grewal's interest to buy.
Grewal signed a sale and purchase agreement for 13 Grassways Ave for $1.348 million on December 18. The listed purchaser was HP & MP Properties Ltd.
Within 11 days, Goyal made six deposits into the company's bank account, totalling $60,000.
Grewal paid the $80,000 deposit into Barfoot's trust account on December 23.
In March 2015, Grewal transferred legal title to Goyal's company, VAD Properties Ltd. Settlement occurred three months later.
Real Estate Agents Authority prosecutor Jeff Simpson suggested Goyal deliberately set out to deceive the vendors and that Grewal and his company were simply "a front" to sidestep the agent's professional obligations.
"This was not a device to avoid compliance with any obligations, and it was only done because Mr Grewal was unable to arrange finance to complete the transactions himself," Rea's submissions state.
Goyal was concerned Grewal would be unable to repay his loan if the deposits were forfeited, and "reasonably believed" he was acting in the best interests of all parties by taking over the transactions, Rea said.
Goyal is giving evidence this afternoon.
If found guilty of misconduct he could be struck off.
