$1.25 million price fixing penalty for real estate agency Manawatu 1994

Another Palmerston North real estate agency was also fined $1.25 million earlier this year for its role in price fixing.
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Another Palmerston North real estate agency was also fined $1.25 million earlier this year for its role in price fixing.

A second Palmerston North real estate agency has been hit with a $1.25 million penalty for being part of a region-wide price fixing agreement.

LJ Hooker's Palmerston North branch was one of 13 national and regional real estate agencies that allegedly agreed to pass on the cost of Trade Me listings to property sellers.

Earlier this year Unique Realty, also of Palmerston North, was ordered to pay the same amount for its involvement in what the judge at the time described as "the Manawatu agreement".

Hamilton-based Success Realty and Bayleys have also settled in cases relating to the same agreement.

READ MORE: Palmerston North's Unique Realty pays $1.25m price-fixing settlement

The Commerce Commission filed proceedings against the company Manawatu 1994, which trades under the LJ Hooker brand, in December last year.

Attempts to contact LJ Hooker Palmerston North for comment were unsuccessful.

In the court's findings, Justice Murray Gilbert said that taking part in price fixing was "serious misconduct".

He noted that the agreement had the potential to affect a large number of consumers.

"Many vendors in the region will have been affected by the agreement because most agencies gave effect to it."

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The judge said it appeared LJ Hooker had benefited by $9000 from the scheme, an amount he described as "quite modest".

The standard fee for a Trade Me listing was $159.

The agreement was entered into in October 2013, the judge said.

Trade Me's pricing model did not take effect until February 2014. It was discontinued in August 2014, which allowed for six months of price fixing.

The judge acknowledged that the LJ Hooker branch did not initiate the agreement, that it acted in ignorance of the law and that it did not knowingly breach the Commerce Act.

However, the company's senior staff were involved in reaching the agreement and directing its implementation. 

The company had "modest financial resources" and would need time to make arrangements to pay the penalty, the judge said.

It was the same amount that Unique Realty was ordered to pay given the circumstances of the LJ Hooker case were "almost identical".

The judge said the penalty was reduced from a higher starting point because there was no indication that LJ Hooker's Palmerston North branch had previously tried to breach the Commerce Act.

He also took into consideration that LJ Hooker co-operated with the investigation and admitted its part at an early stage.

The commission continues its case against the remaining defendants.

 

 - Stuff

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