Underselling an orchard costs real estate agent $1m

Stan Robb

A Te Puke real estate agent has been ordered to pay more than $1 million after underselling a kiwifruit orchard.

In a judgment from the Tauranga High Court, Justice J Woolford ruled that Stan Robb, an agent with PGG Wrightson Real Estate, had behaved with misleading or deceptive conduct when he acted for Maketu Estates in the sale of its 66ha Maketu Rd orchard.

Brothers Ross and Colin Stevenson chose to sell their orchard in October 2012 and signed with Wrightsons, of which Mr Robb was a listed agent.

In the agency agreement, the brothers gave Mr Robb, the appraised price was changed from $4 million to $5 million.

Mr Robb rang several people in the kiwifruit industry to advise them of the sale, including the eventual buyer, Paul Jones, who was associated with DMS packhouse.

In the judgment, Mr Robb said Mr Jones asked whether the brothers would "wear" a purchase price of $3.5 million but this was disputed by Mr Jones.

Mr Jones was authorised by his business partners to offer $3.6 million up to a maximum of $4 million and a meeting was arranged.

However, during this time Mr Robb was contacted by another interested party - Craig Lemon, associated with MPAC, a rival packhouse to DMS.

The judgment stated Mr Lemon enquired about vendor price expectations and was told by Mr Robb that "3 mill won't work" but "3.8 might", to which Mr Lemon said he was pleased to hear because it was less than they were prepared to pay.

Despite ongoing inquiries from Mr Lemon for the sale, Mr Robb "skated" over any mention of Mr Lemon to the brothers - who were aware of Mr Lemon's role in the packhouse industry.

Justice Woolford said if the Stevensons had been made aware of Mr Lemon's interest, it is unlikely they would have sold to Mr Jones for $3.8 million.

Justice Woolford said Mr Robb acted in breach of his duty of loyalty in a manner that went "beyond mere carelessness on his part".

Mr Robb and Wrightsons were ordered to pay $1.101 million in damages to the Stevensons.