Real Estate NZ accused of breaching deal

Graeme Woodley

A case against the Real Estate Institute opened in the High Court at Auckland yesterday, alleging it had breached a contract with a data service company and should pay more than $700,000 in compensation.

The case, before Justice Rhys Harrison, involves a disagreement over whether a contract existed between the parties.

Wellington-based data business RPNZ is seeking $626,179 from the institute for breach of contract and compensation for loss of future profit from a ditched business deal. A further $139,450 is sought for breach of good faith and compensation for wasted expenditure.

RPNZ counsel Pam Andrews said a contract was entered into with the institute on October 18, 2001. RPNZ was a joint venture between Australian company RP Data and property information service Quotable Value NZ.

That joint venture was initially known as QVRP Information Services, although in 2003 QV sold its half-share to RP Data and the company then changed its name to RPNZ.

RPNZ's case is that it entered into a contract with the institute to develop Project Confederation. The institute was to supply up-to-date sales information from its agents to the data service, which would then build the technology to merge information of the two entities and shoulder the cost of developing a new service.

The institute has counterclaimed, alleging misrepresentation by RPNZ, misleading and deceptive conduct in trade and breach of good faith.

Andrews said the project dated back to 1998 when there was an opportunity to merge the institute's information with the data firm's.

A project team was formed of representatives from the institute and the data firm.

Leonie Freeman was a consultant to the institute and its project manager for Project Confederation until her resignation in 2002.

Nigel Jeffries, now chief executive of RPNZ, was project manager for the QVRP side of Project Confederation.

"At no stage did REINZ indicate to QVRP, who were incurring significant expenditure in having the technology built, that they did not consider there to be an agreement," Andrews said.

When Boud Hammelburg became institute executive director in February 2002, he drafted a paper outlining what he saw as the project's flaws. A month later, senior people from both sides gathered including Max Oliver, Rex Hadley and Graeme Woodley, now all former institute presidents. They met Jeffries and Shelly Thomas, chairwoman of the QVRP board.

Both parties agreed to continue the venture and various drafts of a legal contract passed between Jeffries and Hammelburg.

But the institute refused to allow its project team members to attend a technical sign-off meeting and, throughout June and July 2002, Jeffries and Hammelburg held several meetings.

"The possibility that no agreement existed was never raised in those meetings," Andrews said.

The case is continuing.

What was Project Confederation?

* Data business RPNZ was to join the Real Estate Institute.
* The two were to develop a major property computer database.
* RPNZ was to get access to important sales data from agents.
* It was to shoulder the costs of setting up the systems.
* The institute was to get access to RPNZ's large property database.