The Court of Appeal has overturned an earlier ruling, finding some Hamilton real estate agents colluded with their rivals to fix prices. 

The Commerce Commission successfully appealed a High Court ruling last year dismissing claims that an arrangement between Hamilton agencies amounted to price fixing.

The case centres on an agreement among several Hamilton realtors to pass on increased Trade Me listing fees to customers, rather than absorb those fees themselves, as they had done in the past.

The Commerce Commission brought the case in December 2015, and two of the real estate companies, Lodge and Monarch agencies and their respective directors Jeremy O’Rourke and Brian King, contested the allegations of collusion. 

Chairman Dr Mark Berry said the Commission was pleased the Court of Appeal had provided clarity on the law.

“The judgment confirms it is unlawful for competitors to collectively agree they will pass on cost increases, rather than letting competition take its course. The Court has endorsed our view that collusion on a start or offer price is unlawful, even where the trader retains some discretion as to the final price.”

The Court of Appeal agreed that prices had been fixed because consumers “lost the opportunity to be offered a price which had been set… in response to working competitive market forces”.

“There is no necessity for there to be an agreement or understanding that an absolute position as to price must be maintained for there to be anti-competitive conduct,” the judgment said. 

“Accepting the arrangement was a starting position, and there was room for exceptions, the arrangement or understanding would still plainly affect price adversely for customers.”

Lodge and Monarch were among 13 national and regional real estate agencies accused of fixing prices in 2013 and 2014, most of whom acknowledged wrongdoing. Another eight firms received warnings from the commission. 

The courts have imposed almost $19 million in penalties so far, with the head offices of Barfoot, Harcourts, LJ Hooker and Ray White fined $9.8 million collectively while Bayleys was fined $2.2 million.

The Appeal Court ruling declared the realtors breached the Commerce Act and remitted the case back to the High Court to set the penalty. 

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