Court stoush over sale of $6m luxury property

The Messengers chased the original purchasers to recover their loss and in 2012 won a $2.9 million judgment in the Court of Appeal. Photo / File

A High Court lawsuit involving the botched sale of a $6 million luxury Auckland property, an allegedly negligent real estate agency and a Takapuna law firm is set to begin today.

Guernsey residents James and June Messenger put their Auckland property on the market in 2006 and asked their real estate agent son Gary to help with the sale.

Gary Messenger, whose company was to receive a 20 per cent fee on any commission, recommended listing with Stanaway Real Estate.

Law firm Simpson Western, on Auckland's North Shore, was contracted for legal services associated with the sale.

In November 2006 a Stanaway agent presented two offers and, according to a High Court judgment on a pre-trial matter in the case, the Messengers accepted one for $5.995 million. But an issue emerged on the sale and purchase agreement, which recorded the settlement date as "18 December".

The year of the settlement - either 2006 or 2008 - was important because the purchasers were to pay the almost $6 million in instalments.

If the settlement date was December 2006, the Messengers would be required to transfer the title of the property even though $3.25 million had not yet been paid, according to the court judgment.

The purchaser's lawyers took the view that the correct date was December 2006 while Simpson Western advised the Messengers to insist settlement happen in 2008, the judgment said.

The sale was not settled in either December 2006 or December 2008 and the Messengers cancelled the agreement and sold their property to someone else for about $1.5 million less than in the original deal.

The Messengers chased the original purchasers to recover their loss and in 2012 won a $2.9 million judgment in the Court of Appeal.

But the couple were unable to enforce this multimillion-dollar judgment and launched action against Stanaway.

The real estate agents, in turn, joined Gary Messenger, his firm Realty NZ and Simpson Western as third parties in the action.

According to an earlier court decision in the case, the Messengers allege Stanaway breached its duty of care and fiduciary obligations.

Stanaway says there was no breach and its case is that the Messengers brought the loss on themselves.

The hearing is before Justice Mark Woolford.