KEY POINTS:
A disgruntled house seller has won an out-of-court settlement after complaining about close relationships between agents who worked at the firm that sold his house.
Now the annoyed vendor wants to go a step further and have the sale contract cancelled and get his house back.
But the head of the real estate agency that made the payout says nothing has gone wrong and the vendor should be delighted with the deal.
Hong Kong-based Chris Bilham, who owned a Castor Bay house on the North Shore, is taking legal action after Pinkney Real Estate (now trading under the First National banner) sold his house in Aberdeen Rd.
But just before a court hearing in Auckland this month, he received a payment from Pinkney that he says was "to my satisfaction".
The payment was made on the basis that it was confidential, he says, and the terms of the agreement must stay a secret.
Fresh from that victory, Mr Bilham says he now wants to cancel the contract for the sale of his house for $450,000 in 2002.
He claims the agency sold it cheaply and close personal relationships between the agents and the buyer compromised the deal.
But Michael Pinkney, licensee of the agency and a Real Estate Institute national councillor, said that although a payment had been made, no admission of guilt was made and the terms of the payment were confidential.
"And when I give my word on something, I stick to it."
Mr Pinkney also defended the house sale, saying his firm had got a "fantastic" price for Mr Bilham.
The relationship by marriage between the people was fully disclosed to Mr Bilham, who had no reason to complain, Mr Pinkney said.
Mr Bilham had claimed back commission paid on the sale and the only reason for the payment was to avoid a costly drawn-out process involving lawyers, Mr Pinkney said.
"Most of the facts in this case are disputed by the parties. They will be resolved by the court. Mr Bilham commissioned a registered valuation before he sold the property.
"He then achieved the value recommended by that valuer. So it is difficult to see on what basis he claims he was made to sell under value," Mr Pinkney said.
But Mr Bilham said he would continue with legal action. A summary judgment application due to be heard on July 9 to get the commission back had been cancelled after he got a payout.
But he will now continue to go to court, this time attempting to have the deal declared void.
The deal started when an agent working at Pinkney contacted him overseas. The agent sought to value the Castor Bay house, which was rented, then offered to sell it, Mr Bilham said.
A sole agency agreement was signed giving Pinkney authorisation to be the only agents handling the sale by tender.
An offer of $420,000 was presented from an interested buyer. Two Pinkney agents strongly recommended it be accepted.
"I was bombarded with faxes and phone calls," Mr Bilham said of communication.
A price of $450,000 was eventually agreed on and the sale was completed.
Mr Bilham said the buyer had once been married to one of the Pinkney agents - the very agent who had recommended the deal.
Although they were no longer married, the agent was then in a relationship with another Pinkney agent.
That agent then moved into the house that Mr Bilham now regrets selling for $450,000.
One of the former Pinkney agents who lived in the house said she only heard about the settlement on Wednesday morning but she had nothing further to say about the transaction.
Associate Justice Minister Clayton Cosgrove said: "This is like the Mickey Mouse Club, the Keystone Cops or a C-grade movie. Another consumer bites the dust. Everyone walks away feeling brassed off and that no justice has been done.
"I can't comment on the details of this case, but one would expect the highest level of accountability from the senior leaders of the industry."
The rules
* Real estate agents must disclose when they have an interest in a property.
* The Real Estate Agents Act spells out disclosure requirements.
* Agents need the consent of their principal before they trade property.
Stricter rules urged to end conflict of interest
How close is too close?
The Real Estate Institute and Mr Clayton Cosgrove have called for an overhaul of rules governing transactions where agents play two roles: representing a seller as well as being associated with the buyer - or even buying for themselves.
The institute proposed resolving this conflict of interest through stricter rules.
"Persons associated with real estate agents should not be able to buy or lease property that the agent has been commissioned to sell or lease. What constitutes an associated person could be defined in a manner similar to the meaning of associate in the Takeovers Code," the institute said.
David Russell, spearheading the Government's campaign to overhaul the sector, said many people would think an agent had a conflict of interest in representing a buyer and being friends with parties buying the house.
"But if you go into a deal with your eyes open and the agent follows the rules and discloses that information, there's nothing wrong. But there are very strict rules about this. There's got to be a declaration."
