High Court nullifies 'landmark conviction'

Welllington real estate agent Tim Whitehead has won a "discharge without conviction" by appealing to the High Court over his landmark convictions for misleading home buyers.

Whitehead complained to the court that legislation passed after his sentencing prohibited agents with such a conviction from holding a real estate licence for five years - and the High Court at Napier has ruled the law change made the consequences of the conviction greater than the seriousness of the offence.

Justice Rhys Harrison discharged him yesterday without conviction on each of three charges.

Whitehead advertised a house in the Wellington suburb of Northland in 2004 as "buyer enquiry over $380,000" when the vendor was not willing to accept less than $400,000 "in her hand".

The Commerce Commission prosecuted him in 2005, and in July 2006 in the Wellington District Court, Judge Bridget Mackintosh dismissed the Fair Trading Act charges.

The commission successfully appealed to the High Court, and the case was sent back to the District Court. Mr Whitehead was convicted and in December, 2007, fined $2500 on each of three charges of breaching the Fair Trading Act.

Judge Mackintosh said Whitehead knew that in three advertisements the price was too low: property owner Leah Kermode had repeatedly said she wanted $410,000.

Potential buyers should not be led to waste time and money when there was no prospect of their offer being accepted, the judge said.

The case also prompted calls for reform of the real estate industry which lead to the Real Estate Agents Act (REAA).

The Act came into force after Mr Whitehead was sentenced.

But Justice Harrison yesterday issued a stern warning to the real estate industry that contraventions of the Fair Trading Act now carry a serious consequence.

"The purpose and policy of the REAA is unequivocal," he said.

"It is a legislative response to public concern about the unacceptable practices of a small but damaging minority in the real estate profession."

It was designed to exclude from the profession agents convicted of contravening the Fair Trading Act.

"The message is now unmistakeable," Justice Harrison said.

The commission today said it neither supported not opposed the most recent appeal.

"A decision to discharge without conviction ultimately involved the exercise of the court's discretion," said the commission's fair trading manager, Greg Allan.

"Mr Whitehead faced significant financial consequences arising from conduct which occurred well before the REAA was envisaged".

Mr Whitehead, a former currency dealer, today declined comment on the case and referred callers to his lawyer.

His website described him as "well regarded within the industry for ... high levels of professionalism and integrity".

- NZPA