$4.9m lawsuit abandoned against Bayleys

By ANNE GIBSON

The former owner of a Bayleys North Shore franchise has withdrawn a $4.9 million lawsuit against Bayleys Realty Group after five days of a 10-day High Court hearing.

Deb McCool's Citius was suing Bayleys over the axing of her agreement with the agency less than a year into its 10-year term, a termination made when her father was dying and in the lead-up to Christmas.

But on the sixth day of a hearing set down for 10 days last week, McCool withdrew, saying outside court that she did not want to discuss why.

But Bayleys' business development manager, Trevor Stanaway, claimed victory, saying that if the matter had proceeded McCool was bound to lose and she had pulled out because she realised this part-way through the case.

"There was no basis for their claim. There never has been."

The proceedings were before Justice Patrick Keane.

McCool said she was forced to fold her company and face extensive debts after Bayleys ended the franchise.

Citius went into voluntary liquidation on June 7, 2002, placed in the hands of Gerry Rea and Paul Sargison of Gerry Rea Associates. The company's main asset was listed as its multimillion-dollar suit against Bayleys.

McCool worked for a former Bayleys North Shore franchise owner, Roger Hardie's North Shore Realty. But the court heard last week that that arrangement had also foundered and Bayleys approached McCool to take over the franchise and run its residential operation on the Shore.

McCool was seeking $4,819,000 damages and $93,334 for trading losses from Bayleys. It signed a 10-year franchise agreement in March 2000 but gave notice just before Christmas that year that she was in breach of her agreement and that the arrangement would be cancelled within 14 days if she did not take remedial action.

But because McCool received Bayleys' December 12 termination letter only on December 19 and the Christmas season was about to start, she was unable to put matters to rights, her statement said.

To complicate the situation, her statement of claim noted that her father was terminally ill.

She asked various senior Bayleys executives for help throughout the year, including chairman John Bayley, Stanaway and former general manager Ross Pickett, now with DTZ. She had assurances that Bayleys would give her guidance with management, finance, promotion and methods of operation.

Bayley said he would take care of recruiting and Stanaway was to give budgeting advice, but this never happened, the statement said.

"There were no grounds for the cancellation of the agreement because the first year had not elapsed and did not elapse until March 24, 2001," the statement of claim said. "The plaintiff had sold more than $1 million worth of properties within the term of the franchise agreement yet she claimed she received little support from Bayleys' headquarters in Auckland's Viaduct Harbour."

Bayleys failed to provide continuing support or to promote the goodwill of the North Shore franchise business, it said.

McCool challenged assertions that she had failed to achieve minimum gross revenue, sufficient to give Bayleys the right to terminate the agreement.

Projected income figures, operating expenses and pretax income schedules are attached to McCool's statement of claim.

McCool said outside the hearing that although Bayleys had offered to settle before the matter went to court, she rejected its offer. She now works at Alan Tippett Real Estate in Takapuna.