A real estate agent who bought a house from two elderly brothers for $530,000 and sold it months later for $1.255 million has been acquitted of criminal charges.
Former Barfoot & Thompson agent Aaron John Hughes was found not guilty today on two counts of causing loss by deception by a jury of three women and eight men.
The jury had been deliberating since yesterday afternoon following a six-day trial in Auckland District Court before Judge Allan Roberts.
The charges related to two separate property deals involving Hughes.
The first was his February 2015 purchase of Jack and Walter Tata's inherited Mt Wellington house at 51 Lynton Rd.
The court heard that Hughes was helping the brothers to sell the property before offering to buy it himself.
He purchased it privately through his company Az-Iz Rentals then sold it through Barfoot's Panmure branch without any significant improvement work in June that year for a $720,000 profit.
The Crown said Hughes obtained a valuation for the property showing it was a "developer's dream" and worth at least $1.2 million 11 days before offering $530,000 - which was $100,000 below CV.
The valuation was not disclosed to the Tatas. It was only revealed when Barfoot ended Hughes' contract and authorised a search of his emails after the deal came to light in a Weekend Herald investigation in April 2016.
The Crown argued Hughes had abused his clients' trust and deceived them about the property's true value in breach of his professional obligations.
However, Hughes' lawyer David Jones QC argued Hughes did not set out to deceive the vendors and was not acting in his capacity as a licensed agent.
Giving evidence in his own defence last week, Hughes denied acting as the Tatas' agent, and said he disregarded the valuation figure as "pie in the sky".
Hughes told the court that during a meeting in early 2015, the Tatas said they weren't interested in auctioning the home, marketing it, or signing a listing agreement, but still wanted his help. As a favour he made preliminary inquiries about the property's value, Hughes said.
Asked about the Morley valuer's estimate figure, Hughes said: "I was surprised.
"For want of a better term, it was pie in the sky. I'd seen the property and it didn't correlate with the figure he mentioned."
Hughes described the estimate as "exceedingly high".
"I thought, 'Well, let's just put [the property] out to a couple of people and see what they're prepared to pay'."
Hughes told the court he consulted two potential investors who offered $590,000 and $500,000 conditional on building reports, LIM reports and finance.
He presented those offers to the Tatas and made a personal bid of $530,000 conditional only on finance, intending to rent the property out.
The Tatas gave him their blessing, he said.
"Their term was, 'Good on you boy'."
Hughes claimed he recommended the family go with the top offer and was "quite surprised" when they accepted his.
Crown prosecutor Michael Hodge expressed disbelief that Hughes didn't present the valuation to the Tatas and disputed Hughes' claim that the estimate wasn't official.
"[The valuer] is a professional, he didn't just put his finger up to the wind did he?" Hodge said.
"It's still information the Tatas deserved and should have had, right?"
After his windfall was revealed, Hughes met for mediation with the Tatas and was recorded telling them he had no idea what the property had been worth, the court heard. He offered them $100,000 but declined their request for $300,000.
Jones told the jury the Crown's case was "superficial" and without context.
"It wasn't, 'I'll buy it at a discount and then flick it on'. He was in there for the long haul but as it turned out, that didn't work."
Hughes declined to comment after his acquittal.