Manawatu 1994 Limited, trading under the LJ Hooker banner, has been ordered to pay a penalty of $1.25 million following a hearing in the Auckland High Court.

Manawatu 1994 is the second Manawatu real estate agency to appear in Court after it reached a settlement with the Commerce Commission admitting its conduct breached the prohibition on price fixing in the Commerce Act.

The Commission filed proceedings in December last year alleging Manawatu 1994, Unique Realty and Property Brokers breached the Commerce Act by agreeing with each other, and other Manawatu agencies, that they would each pass on to vendors the full cost of advertising a property on Trade Me.

In his ruling released today Justice Gilbert said: “Participation in price fixing agreements is regarded as serious misconduct. In this case, the agreement involved at least 11 real estate agencies representing most of the relevant market in the region. The agreement therefore had the potential to affect a large number of consumers. Balanced against this, the agreement did not eliminate all price competition, nor was this the aim, and Manawatu did not initiate the agreement.”

A copy of the High Court judgment is available on the Enforcement Response Register.

Unique Realty was earlier this year fined $1.25 million for its role in the Manawatu agreement. The Commission’s case against the remaining Manawatu defendants remains before the Court.

Background

In December 2015, the Commission filed proceedings in the Auckland High Court for alleged price fixing and anti-competitive behaviour by 13 national and regional real estate agencies, a company owned by a number of national real estate agencies, and three individuals. The Commission also issued warnings to an additional eight agencies for their role in the conduct.

The proceedings relate to alleged conduct in 2013 and 2014 by the national head offices of five major real estate companies, and separately by agencies in Hamilton and Manawatu. The alleged conduct occurred in response to Trade Me’s change from a monthly subscription fee to a per-listing fee for properties advertised for sale on its website. Further information can be found in the media release.

In addition to the settlement agreed with Manawatu 1994, the Commission has agreed settlements with Unique Realty, Hamilton-based Success Realty and Bayleys at the national level. Court-imposed penalties currently total $5.6 million.