JAMES v LUXURY REAL ESTATE LIMITED [2023] NZHC 1104

JAMES v LUXURY REAL ESTATE LIMITED [2023] NZHC 1104 [10 May 2023]IN THE HIGH COURT OF NEW ZEALANDINVERCARGILL REGISTRYI TE KŌTI MATUA O AOTEAROAWAIHŌPAI ROHECIV-2022-425-5[2023] NZHC 1104BETWEEN ROSS HALDENBY JAMES and NONALEE JAMESAppellantsAND LUXURY REAL ESTATE LIMITEDRespondentHearing: 20 September 2022Appearances: D L Marriott for AppellantsM R Walker and B B Gresson for RespondentJudgment: 10 May 2023JUDGMENT OF OSBORNE JThis judgment was delivered by me on 10 May 2023 at 4.30 pm pursuant to Rule 11.5of the High Court RulesRegistrar/Deputy RegistrarDate:[1] This appeal is from a judgment of the District Court by which Luxury RealEstate Ltd (Luxury RE) obtained judgment against Ross and Nona James forcommission on a property sale (the Judgment).1[2] Mr and Mrs Ross owned a Queenstown property. The parties entered into asole agency agreement (the agency agreement) in January 2017. The property wassold for $3,150,000 under an agreement for sale and purchase (the sale contract) on 6March 2017, within the period of the sole agency (which was to expire on 25 April2017). Luxury RE issued an invoice to Mr and Mrs James on account ofdisbursements incurred on behalf of Mr and Mrs James. They did not pay the invoice.[3] Luxury RE, upon becoming aware of the sale contract and that it had becomeunconditional, issued an invoice to Mr and Mrs James for $125,787.50 on account ofcommission calculated in terms of the agency agreement. They did not pay thatinvoice.The claim and counterclaims[4] Luxury RE sued Mr and Mrs James in the District Court for breach of contract(that is, failure to pay commission), seeking judgment in the sum of $128,325.05 plusinterest.[5] Mr and Mrs James both defended the claim, and counterclaimed.2[6] Mr and Mrs James asserted Luxury RE was not entitled to payment because:(a) they had cancelled the agency agreement following a repudiation byLuxury RE;(b) Luxury RE was disentitled to commission because of:(i) its breaches of fiduciary duty; and/or1 Luxury Real Estate Ltd v James [2022] NZDC 21909.2 The defendants' pleading at trial was contained in their second amended statement of defence andcounterclaim.(ii) its breaches of s 9 Fair Trading Act 1986 through its misleadingand/or deceitful behaviour;(c) (in relation to the rate of commission) the entitlement to commissionwas at 3 per cent (not 3.5 per cent), through a variation of the agencyagreement; and(d) (in relation to disbursements) Luxury RE had failed, despite demand,to provide proof of the incurring of the claimed disbursements.[7] Mr and Mrs James in turn counterclaimed for damages for breach of fiduciaryduty and provisions of the Fair Trading Act 1986. They sought special damages of$100,000, representing the difference between the sale price ($3,150,000) and the saleprice they assert could have been achieved but for Luxury RE's breaches.[8] Mr and Mrs James additionally sought, on the fiduciary duty counterclaim,general damages of $30,000 for stress and anxiety.The District Court outcome and this appeal[9] Judge Tuohy gave judgment for Luxury RE on its commission claim anddismissed Mr and Mrs James' claims in relation to both fiduciary duty and breach ofthe Fair Trading Act.[10] Mr and Mrs James appeal against the commission judgment and the dismissalof their fiduciary duty counterclaim. They do not appeal in relation to their FairTrading Act cause of action.The principles on appeal[11] The appeal is brought under s 124 District Court Act 2016, which providesparties to a civil proceeding in the District Court with a general right of appeal to thisCourt.[12] In considering an appeal against a judgment of the District Court, this Court isrequired to form its own opinion as to matters of law and fact.3 The appellate court isentitled to give due weight to findings made in the lower court, particularly in relationto matters such as credibility witnesses when the lower court had the advantage ofhearing the evidence of those witnesses.4The facts[13] The Judge heard evidence over three days.[14] Luxury RE called its director, Terry Spice, the individual salesperson who dealtwith Mr and Mrs James in relation to the sale.[15] Mr and Mrs James each gave evidence.[16] In the Judgment, Judge Tuohy referred to the witnesses by their first names (asthey had used themselves during the trial), namely Terry, Ross and Nona respectively.The Judge referred to Luxury RE as "LRE" and to the agency agreement as the "SAA".The Judge referred to the ultimate purchaser, Chivukula Bharadwaja, as "CV".[17] The Judge first set out his findings as to matters of factual background. Hedealt with and made findings in relation to matters disputed by the witnesses, which Ideal with later in this judgment. At this point I set out the Judge's "FactualBackground", which represents common ground.[3] LRE has two directors, one of whom is Terry Spice (Terry) who wasthe licensed real estate agent who primarily dealt with Mr and Mrs James. Asits name suggests, LRE specialises in the top end of the Queenstown real estatemarket. Ross and Nona's home fell into that category. They contacted LREin late 2015 with a view to engaging it to market their property. Subsequentlythey entered into a sole agency agreement with LRE dated 22 March 2016.[4] That agreement was on the same printed form as the later SAA. Theclause which appointed LRE as sole agent was the same in both agreements:Sole Agency Authority3 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 [AustinNichols].4 At [13].The Client(s) appoint the Agent as sole agent with exclusive sellingrights for the sale of the Property. If the Property or any part of it issold during the term of the agency the Client agrees to pay the Agentthe fee set out in Clause 9, whether such sale is on the terms set outherein or on any other terms acceptable to the Client.This agency shall commence on the Commencement Date (or uponthe cancellation of any Existing Agencies) and shall continue untilmidnight on the Expiry Date unless cancelled by:1. Either party to this agreement by written notice to the otherany time after the expiry of the period of 90 days after theagreement being signed (in the case of the agency having aperiod of more than 90 days); or2. The client(s) by written notice to the Agent by 5pm on the firstworking day after the day on which a copy of this agreementsigned by or on behalf of the Agent is given to the Client inaccordance with the Act. For the avoidance of doubt, a copyof the agreement can be given to the Client(s) by way offacsimile or email if such details are recorded.Subject to any prior cancellation, after the Expiry Date the agencyshall continue as a General Agency, unless renewed by writtenagreement between the parties.[5] The provision relating to payment of commission was also in the sameprinted form in both agreements although there were blank spaces in whichthe commission percentage, the appraised value of the property and theestimated commission had to be inserted. The operative part of that clause isset out below:9. Commission9.1 In the event the Property or any part of it is sold:(a) By the Agent; or(b) Through the involvement of the Agent; or(c) If other than a General Agency, if at any time duringthe term of this agency; or(d) To any party materially introduced to the Property bythe Agent during the term of this Agreementregardless of when the actual sale takes place; then9.2 The Client will pay to the Agent its fees/commissions of %plus GST and any other agreed expenses as per the attachedMarketing Schedule.[6] The property was not sold during the period of the first sole agencywhich expired in late June 2016. The property was not actively marketedduring the following months as Ross and Nona were of the view that summerwas the better time to sell.[7] In November 2016 discussions again commenced with a view toactively marketing the property. This resulted in the SAA. It provided for asole agency on the terms set out above commencing on 24 January 2017 andexpiring on 25 April 2017. The figures inserted in cl 9 were a commissionpercentage of 3.5% and an appraised value of the property of $3,100,000giving an estimated commission inclusive of GST of $124,775.[8] There were some other alterations to the printed form. Clause 2relating to sale price had been amended in the first agreement to read and thisremained in the SSA:2. Sale Price2.1 The sale price of the Property is 'By Negotiation' not bemarketed as available for less than $2.995 unless agreed inwriting by client. The Agent is instructed to be mindful of thiswhen marketing, inspecting and showing the Property. TheAgent is instructed to obtain a maximum sale price, andthrough competitive bidding (where possible).2.2 The identified price (being the Appraised Value of Property)was arrived at by Agent Appraisal & CMA (ComparativeMarket Analysis).[9] The provision relating to marketing was cl 7 which is set out belowand must be read in conjunction with the marketing schedule attached to theSAA. That schedule included a number of different marketing options withthe cost of each set out. Some of the options were deleted by having a linedrawn through them. The schedule provided for two marketing phases. Thefigure inserted for 'Total Cost (Phase One)' was $1337 + GST.7. Marketing Program7.1 The Client acknowledges they have been advised how theProperty will be marketed and advertised, including anyadditional expenses that such marketing and advertising willincur.7.2 The Client confirms/declines (strike one) the need for amarketing program to commence.7.3 The Client agrees the Agent may incur disbursements onbehalf of the Client to the maximum amount shown in theattached Marketing Schedule. Payment for those items ofexpenditure will be made by the Client to the Agent prior tothat expenditure being incurred. Any amounts which have notbeen expended will be refunded to the Client once theproperty has sold.7.4 The Client agrees to a marketing budget of $1,337 + gst(Refer attached Market Schedule).[10] On 16 February 2017, [Mr Bharadwaja], the ultimate purchaser,became aware of the property. [Mr Bharadwaja] was a resident of Singaporeand a friend of Ross and Nona's neighbour Madhujeet Chimni (known as MJ).It was MJ who brought the property to his friend's attention. [Mr Bharadwaja]immediately booked a flight to Queenstown to view the property on 17February (a Friday). Ross and Nona advised Terry of this development andrequested him to attend the viewing. Terry had other commitments.[11] On the afternoon of 17 February, [Mr Bharadwaja] arrived at theproperty with MJ. He was shown around it by Ross and Nona. He asked ifhe could return to view the property again the next day with anotherQueenstown real estate agent, David Penrose. Mr Penrose contacted Ross andNona immediately after [Mr Bharadwaja] left. He advised that[Mr Bharadwaja] had asked him to come to the property and he suggested thathe could assist in facilitating a sale and negotiating a price. He asked Rossand Nona to speak to LRE about sharing a commission.[12] That information was conveyed to Terry. He was unhappy with anyinvolvement of Mr Penrose. He was unable to attend at [Mr Bharadwajas's]second viewing of the property. In the event [Mr Bharadwaja] viewed theproperty again on 18 February without either Terry or Mr Penrose inattendance after which he returned to Singapore.[13] Over the following days negotiations regarding price took placedirectly between [Mr Bharadwaja] and Ross. [Mr Bharadwaja] had made itclear that he did not want to deal through their real estate agent. Ross andNona kept Terry informed regarding these negotiations and sought his adviceon price. Ross had indicated to [Mr Bharadwaja] that a price of $3,000,000would not be acceptable. [Mr Bharadwaja] was seeking to ascertain whatprice Ross and Nona would accept.[14] On 21 February 2017, Ross sent an email to [Mr Bharadwaja]advising him that they would accept an unconditional offer of $3,330,000which he told [Mr Bharadwaja] would net them a minimum $3,200,000 aftercommission. The email indicated that further discussion could take placeregarding a deferred settlement date or them taking a tenancy of the propertyfollowing settlement. The email also indicated that they were aware that [MrBharadwaja's] Queenstown solicitor was in the course of preparing anagreement for sale and purchase and asked that a copy be sent to Terry so thathe could advise other potential purchasers as soon as the property was sold.Nona in her evidence said that Terry had verbally agreed that morning toreduce LRE's commission as recorded in the SSA from 3.5% to 3% whichTerry in his evidence flatly denied.[15] Ross stated in his evidence that in a telephone conversation with[Mr Bharadwaja] later that day, they reached a position where[Mr Bharadwaja] was offering $3,250,000 and the James had come down to$3,300,000. Earlier that day, Terry had advised them not to name a price to[Mr Bharadwaja] below $3,500,000 as if they did, they would lose the optionof a multi-offer process. The conversation between Ross and[Mr Bharadwaja] was left on the basis that [Mr Bharadwaja] would send anoffer through his solicitor the next day which Ross expected to be for$3,250,000.[16] [Mr Bharadwaja's] response was the presentation through his solicitoron 22 February of a signed unconditional agreement for sale and purchase ata price of $3,000,000 which would lapse if not accepted within 72 hours. Rossand Nona were very disappointed and offended by this offer because it waslower than a price which [Mr Bharadwaja] had verbally indicated indiscussions. They thought they had been "played" by [Mr Bharadwaja]. Inan email of 9.24 a.m. that day, they sought advice from Terry and instructedhim to negotiate with [Mr Bharadwaja] from that point on as they did not wantto deal with him directly. They informed Terry they were still prepared toaccept an offer from him for $3,300.000 but wanted to give preference toalternative offers. Terry responded at 11.14 am that he had received and notedthose instructions.[17] However, those instructions were quickly modified by an email toTerry from Nona timed at 12.44 pm which immediately followed a telephoneconversation between them. After discussing perceived cultural factorsaffecting the approach to negotiating with [Mr Bharadwaja], the emailcontinued:Based on what I read, here's what I suggest for our slightly revisedapproach. Still think the best approach is for you (as our 3rd party) totalk to Alan (Harper) (his 3rd party) so everyone can "save face"because we definitely need to signal our displeasure at this stage butdon't want to destroy the relationship that Ross has put in hours tobuild.[18] Despite that, Ross continued that same night to communicate with[Mr Bharadwaja] through his neighbour MJ who made [Mr Bharadwaja]aware of the fact that the James were in a multi-bid situation and that heneeded to make his best offer. However, this did not lead to any higher offerfrom [Mr Bharadwaja]. In fact, he communicated to MJ (and thus to theJames) that he had not earlier verbally indicated a price of $3,250,000 but thenumber was "more like 3.1 (million)".[19] Over the same period Terry was proposing to the James the initiationof a multi-offer process. He believed that there were at least two otherpotential purchasers apart from [Mr Bharadwaja] who were likely to makeoffers on the property and this process would be the best way of creating acompetitive environment. One was an Australian solicitor named LindaEvans. His communications with Ms Evans led him to believe that she wasabout to make an offer for the property at a price of $3,300,000. The other,Elgan Potter, was also an Australian, who intended to (and did) fly toQueenstown to view the property.[20] It appears that this process was actioned on 25 February. Terry statedin his evidence that prior to that he had telephone communications with[Mr Bharadwaja's] solicitor in which he was firmly advised that[Mr Bharadwaja] was not willing to pay more than the $3,000,000 pricecontained in his written offer.[21] In furtherance of this process, he sent multi-offer forms to LindaEvans, Elgan Potter and various other persons who he thought might possiblybe interested in making an offer. The form amounted to an acknowledgementto be signed by the potential purchaser that there was more than one purchaserinterested in purchasing the property; that the potential purchaser had beenadvised to put their highest and best offer in writing for presentation to thevendor; that the vendor had the right to accept or reject any offer and the rightto counter-offer or negotiate with one prospective purchaser to the exclusionof others; and that a potential purchaser might not have the opportunity ofmaking a further or better offer. It also advised that any offer would be placedin a sealed envelope to be opened in the presence of the vendor and that alloffers would be presented as near as possible at the same time to the vendor.Those who were sent the multi-offer form were advised that any offer was tobe submitted by no later than Thursday, 2 March 2017 at 5.00 pm. He hadpreviously sent a copy of this form to Ross and Nona.[22] While he did not send a copy of the multi-offer form to[Mr Bharadwaja], he did send an email to his solicitor Alan Harper on 25February advising that [Mr Bharadwaja] should submit his best offer by nolater than 5 p.m. on 2 March and that he would be meeting the James that nightto discuss all offers.[23] Only Linda Evans returned a signed copy of the multi-offer form.Elgan Potter verbally advised Terry, probably on the evening of 1 March,although the evidence is not clear as to the time, that he would not be makingan offer. Terry then contacted Nona to get Ross to contact [Mr Bharadwaja]to try to ensure he made a new offer. He did not then tell Nona that ElganPotter had withdrawn from contention. Ross spoke to [Mr Bharadwaja] onthe morning of 2 March and told him there were several offers coming in thatevening. He was advised by [Mr Bharadwaja] that he would make a furtheroffer at $3,150,000.[24] [Mr Bharadwaja's] solicitors presented an unconditional offer of$3,150,000 by email at 3.22 pm on 2 March. It provided for settlement on30 July 2017 or earlier by mutual agreement. It contained the same provisionfor lapse unless accepted within 72 hours. The box which, if completed withthe name of a real estate agent, would entitle that agent to commission fromthe vendor recorded a sale by private treaty. However, on 2 March at 4.58p.m. Linda Evans emailed Terry advising that she and her partner would notbe submitting an offer. Terry rang her immediately to find out why and whathad changed. She advised him that her mother had just been diagnosed withterminal cancer and that this had changed her priorities.[25] Terry took the view that as there remained only one potentialpurchaser, [Mr Bharadwaja], he was ethically bound to advise that potentialpurchaser that he was no longer in a multi-offer situation, that is, that therewere no longer other any other potential purchasers. He so advised[Mr Bharadwaja's] solicitors shortly after 5.00 pm on 2 March.[26] Before doing that, he advised Ross and Nona by telephone of whathad occurred and what he intended to do. They telephoned back to tell himthat he should not take that course which they considered detrimental to theirinterests, only to find he had already done so. [Mr Bharadwaja] did notwithdraw or vary his offer after receiving notice that his was the only offer.[27] It had been arranged that Terry would call on Ross and Nona at theirhome after 5.00 pm on 2 March to consider the result of the multi-offerprocess. Terry arrived at 8.00 pm. It is plain that Ross and Nona were veryupset at what had transpired and highly dissatisfied with Terry's performanceof his duties before the meeting began. All three participants at the meetingattested that it became tense and eventually ended with angry recriminations.A more detailed analysis of the evidence relating to the meeting is provided inthe section of this judgment dealing with Ross and Nona's assertion that theSSA was terminated then.[28] The next day, 3 March, Ross and Nona through their solicitor made acounter-offer to [Mr Bharadwaja] at a price of $3,250,000. This was rejectedbut the existing offer at $3,150,000 was confirmed without the 72 hour lapseprovision and with an agreement to provide 6 months rent free occupationafter settlement to Ross and Nona. On the following Monday 6 March thatoffer was apparently withdrawn by [Mr Bharadwaja's] solicitor but wasimmediately renewed after direct communications between [Mr Bharadwaja]and Ross and accepted by Ross and Nona on the same date with a variation ofthe provision relating to post-settlement occupation. The final agreementprovided for Ross and Nona to occupy the property as tenants for a fixed termof 12 months following the settlement date. No rental was payable for theterm of the tenancy but they agreed to maintain the grounds to a high standard.[29] Over the days following the meeting of 2 March, there had also beenemail communications between Terry and Ross which are further detailed inthe section of this judgment relating to termination of the SSA. Terrycontinued to respond to enquiries about the property during this time.[30] On 10 March, Ross and Nona's lawyer wrote to Terry by emailrequesting LRE's invoice for marketing already completed together with thelist of potential buyers that LRE considered it had introduced to the property.The lawyer expressed Ross and Nona's concerns about how LRE had carriedout its duties under the agency agreement, giving as an example Terry'salleged behaviour at the meeting of 2 March. The email ended: "Based on theinformation I have to date, it appears that you ended LRE's agency agreementon 2 March. The James do not wish to resume a relationship with LRE". Terryreplied on 11 March disputing the portrayal of his behaviour at the meetingand stating that on the lawyer's instructions he had arranged for the listing betaken down from all web portals. Later an invoice for the commission andmarketing expenses was sent which remains unpaid.Appeal issue 1: cancellation of the agency agreementThe affirmative defence[18] Through their solicitor, Mr Marriott, Mr and Mrs James invoked thecancellation remedies under sub-part 3 of Pt 2 of the Contracts and Commercial LawAct 2017, and in particular ss 36 and 41, which provide:36 Party may cancel contract if another party repudiates it(1) A party to a contract may cancel the contract if, by words or conduct,another party (B) repudiates the contract by making it clear that Bdoes not intend to—(a) perform B's obligations under the contract; or(b) complete the performance of B's obligations under thecontract.(2) This section is subject to the rest of this subpart.41 When cancellation may take effect(1) The cancellation of a contract by a party does not take effect—(a) before the time at which the cancellation is made known tothe other party; or(b) before the time at which the party cancelling the contractshows, by some clear means that is reasonable in thecircumstances, an intention to cancel the contract, if—(i) it is not reasonably practicable for the cancellingparty to communicate with the other party; or(ii) the other party cannot reasonably expect to receivenotice of the cancellation because of that other party'sconduct in relation to the contract.(2) The cancellation may be made known by words or by conductshowing an intention to cancel, or both. It is not necessary touse any particular form of words, so long as the intention tocancel is made known.[19] It was unclear on the defendants' pleadings whether the events of 2 March 2017were relied upon as terminating the contract through a justified cancellation or bymutual discharge. It was however confirmed by Mr Marriott at trial that Mr andMrs James relied upon cancellation upon repudiation.5 The particular conduct of MrSpice relied upon by the defendants as repudiatory was (all at the 2 March meeting):(a) shouting that he was "walking away";(b) swearing at Mr and Mrs James and behaving aggressively towardsthem; and(c) saying he could no longer work with them, including refusing tocommunicate any further with Mrs James.The Judge's findings[20] The evidence the Judge considered was the trial evidence of the threeparticipants and the correspondence between the parties immediately after the event.5 Judgment, above n 1, at [32].[21] The Judge concluded that there had been neither an unequivocal repudiationby Mr Spice of the agency agreement6 nor a cancellation of the contract by Mr andMrs James7 nor, in terms of the cancellation provisions in the agency agreement, therequired notice in writing of cancellation.8[22] To reach those conclusions the Judge analysed the evidence in the followingway:[61] I do not consider that swearing or using aggressive language of itselfindicates a repudiation of the agency contract. While I am in no doubt thatTerry did swear (as he acknowledged) and spoke in an aggressive mannerduring the discussions, I am not satisfied that he swore at Ross and Nona. Theevidence that Terry shouted "fuck [Mr Bharadwaja], he is just complicatingthings You are too fucking invested in [Mr Bharadwaja] You need toforget about [Mr Bharadwaja]" has the proverbial ring of truth. However, theswear word "fucking" is commonly used for emphasis in modern NewZealand, if not in politest society, and there is a significant difference betweensaying "fuck [Mr Bharadwaja]" and "fuck you". I am not satisfied that Terryused the latter expression.[62] I am also satisfied that when things got heated Terry stated words tothe effect that he could not work with Nona. However, I do not think thatindicates clearly that he was not prepared to continue with the agency contract.From one point of view, it may indicate the reverse in that he was making adistinction between dealing with Nona and dealing with Ross. It was Rossalone with whom Terry spoke outside the house for some minutes beforegetting into his car and driving home. It is quite feasible for an agency contractrelating to the sale of a couple's home to continue on the basis that the agentdeals directly with only one of the couple. For different reasons, the Jamescommunicated with their purchaser [Mr Bharadwaja] via Ross alone.[63] Much emphasis was also placed on Terry's statement at around thetime he left the property that he was "walking away" as the expression of anintention to abandon the agency contract. While not denying using the phrase,Terry's evidence was that what he was intending to convey was that he waswalking away from the meeting because it had been going around in circlesand he felt that everyone needed to cool off. This is a quite plausibleexplanation in the circumstances. To interpret the phrase without more as anabandonment of the agency contract is not objectively justifiable.[64] The subsequent email exchange does not indicate a clearunderstanding on either side that Terry or LRE had abandoned theperformance of the agency contract. Ross's 3 March email expressesambivalence about the state of the relationship following the meeting of thenight before. At the beginning Ross asked, "How do you propose we moveforward after you stated you'd be happy to walk away from us?" Further onhe stated that (this) "came across to us as a threat (my emphasis) to walk away6 At [68].7 Judgment, above n 1, at [69].8 At [70].from the contract, which as we understand is a breach of your responsibilitiesunder the contract". This was followed by a paragraph: "Clearly it is notfeasible for us to continue to work with you when we are concerned that theoutcome of a reasonable request from us may well be being yelled at". Thelast line of the email was "Ideas for a resolution?"[65] None of those expressions convey an understanding on Ross's partthat the agency contract had been repudiated by Terry the night before. If thathad been the case and that repudiation had been met immediately with thecancellation of the agency contract by Ross and Nona as they now allege, therewould have been no need to ask how the parties should move forward norwhat ideas Terry had for a resolution. Indeed, the characterisation by both ofthem of Terry's language as being a threat to walk away amounts in effect toan acknowledgment that it was no more than that.[66] The subsequent emails on 4 March between Terry and Ross in whichTerry requested and received an update on negotiations with [Mr Bharadwaja]do not indicate that the agency contract had been repudiated by Terry orcancelled by Ross and Nona. They are more consistent with the agencyremaining on foot. On 5 March, Terry informed Ross by email that he wasstill responding to enquiries about the property and conveyed a tentativeunderstanding that it could be sold by him if [Mr Bharadwaja] was not willingto meet Ross and Nona's price expectation of $3,300,000.[67] There was no evidence of any further communication between theparties prior to the sale to [Mr Bharadwaja]. However, in a subsequent emailto [Mr Bharadwaja] in which he was trying to establish whether[Mr Bharadwaja] was still interested in buying the property, Ross advised him,"We can't continue to avoid our realtor who is pushing us for instructions thismorning as to how he should respond to the additional enquiries he hasreceived". This amounted to a representation that the agency still existed.(Emphasis as included in the Judgment)Appellants' submissions[23] In Mr Marriott's submission, the Judge erred in the conclusion that Mr Spice'swords and conduct at the 2 March meeting did not amount to an unequivocalrepudiation of the agency agreement. He submitted the words and conduct relied uponby Mr and Mrs James (above at [17]) did unequivocally amount to Mr Spicerenouncing his agency authority.[24] Mr Marriott noted that Mrs James understood Mr Spice's words and conductto amount to a renunciation of his agency because, as she said in her evidence, sheresponded to Mr Spice:You better have meant that because you have just ended it!It's a divorce! There is no going back once you break the trust the other personhas in your commitment to a relationship.Respondent's submissions[25] Mr Walker, for Luxury RE, referred to the detail of the Judge's reasoning as towhy Mr Spice's words and conduct did not amount to repudiation, that is words orconduct that made it clear that Mr Spice did not intend to continue to perform theagency agreement. He also observed that Mr Spice, in his evidence, disputedMrs James' evidence as to "You have just ended it" and "It's a divorce".Discussion — repudiation[26] For Mr Spice's alleged repudiatory conduct, it is necessary to first focus on hisconduct and words, as the Judge did. The Judge, with the benefit of having seen andheard all three witnesses, carefully worked through the evidence as to Mr Spice'swords and conduct. The Judge focused on aspects most particularly relied on for Mrand Mrs James, such as Mr Spice's aggressive manner and swearing, his statements asto not being able to work with Mrs James and as to "walking away".[27] Each of the assessments made by the Judge was reasonably open to him on theevidence.[28] The Judge was entitled to conclude that Mr Spice's words and conduct did notamount to a repudiation by making it clear that Mr Spice would not be performing theagency agreement further.[29] The Judge was equally entitled, as he did, to find from the subsequentexchanges between the parties there was not a clear understanding on either side thatLuxury RE had repudiated the agency agreement.[30] Mr Marriott has correctly noted the Judgment does not refer in this context tothe evidence Mrs James gave as to her responses to Mr Spice's words and conductduring the 2 March meeting. When the issue under consideration is whether Mr Spicerepudiated the agency agreement, the primary focus must be on the conduct and wordsof Mr Spice himself. It is only if that conduct and language was clearly repudiatorythat Mr and Mrs James' entitlement to cancel arose. What Mrs James said in responsewas therefore more relevant to the cancellation issue than to the repudiation issue. Asimportantly, Mrs James' initial responses on the evening of 2 March had to be viewedin the light of the more measured responses through email in the following days, whichthe Judge carefully reviewed and took into account.[31] Accordingly, the appellants have not demonstrated an error in the Judge'sanalysis and conclusion in relation to the repudiation issue.Discussion — cancellation[32] Absent an error in the Judgment relating to the appellants' not havingestablished that Luxury RE had repudiated the agency agreement, any error in thefactual conclusion that the evidence did not establish that there had been a validcancellation of the contract is moot.[33] That said, the Judge was also entitled on a review of the email exchanges on 3,4 and 5 March to conclude that Mr and Mrs James had not clearly conveyed anycancellation of the agency agreement and to observe, to the contrary, that theexchanges implied the continued existence of a contractual relationship.Appeal issue 2: breach of fiduciary dutyMr and Mrs James' claim[34] It was and remains common ground that Luxury RE, as Mr and Mrs James'real estate agent, had fiduciary duties.[35] By their pleading, Mr and Mrs James made a wide range of complaints aboutMr Spice's performance of his duties, categorising all of them as breaches of fiduciaryduty.The Judge's overall findings[36] The Judge, under a heading "Breach of Fiduciary Duty" undertook anextensive review of a number of the complaints as to Mr Spice's conduct on the basisthat those particular allegations engaged, or might engage, the fiduciary duties ofLuxury RE. The matters then discussed were:(a) disclosure of information to Mr Bharadwaja;9(b) deliberate misleading of or lying to Mr and Mrs James;10(c) withholding information as to potential outcomes;11(d) aggressive, swearing behaviour;12 and(e) false assertions as to need for agency agreement.13[37] Following his consideration of those complaints, the Judge then turned to othercomplaints he categorised as complaints of breach of contractual duty.14[38] On this appeal, Mr and Mrs James assert the Judge erred in his conclusions inrelation to all heads of complaint.Applicable legal principles[39] Real estate agents, as with other canvassing agents, are subject to fiduciaryobligations towards their principal.15[40] The distinguishing obligation of a fiduciary duty is the obligation of loyalty, asexplained by Millet LJ in Bristol and Western Building Society v Mothew:16The principal is entitled to the single-minded loyalty of his fiduciary. Thiscore liability has several facets. A fiduciary must act in good faith; he mustnot make a profit out of his trust; he must not place himself in a position where9 Judgment, above n 1, at [76]–[85].10 Judgment, above n 1, at [86]–[101].11 At [102]–[108].12 At [109]–[110].13 At [111]–[114].14 At [116]–[137].15 Premium Real Estate Ltd v Stevens [2009] NZSC 15, [2009] 2 NZLR 384 at [23] per Elias CJ, perBlanchard, McGrath and Gault JJ at [68], per Tipping J at [97].16 Bristol and Western Building Society v Mothew [1998] Ch 1 at p18, adopted in Premium RealEstate Ltd v Stevens, above n 15, at [67] per Blanchard, McGrath and Gault JJ.his duty and his interest may conflict; he may not act for his own benefit orthe benefit of a third person without the informed consent of his principal.[41] The scope of a real estate agent's duties depends on the scope of duties theagent is asked to undertake.17[42] As indicated by the passage cited above (at [40]), an agent's duties may bemodified by an informed agreement or consent on the part of a principal to the agent'sacting with a potential conflict of interest.18[43] The breach of a duty of care imposed by contract or in tort will render afiduciary liable for contractual breach and/or in negligence but does not amount to abreach qua fiduciary, notwithstanding the fulfilment of the role of a fiduciary is thesetting for the negligent act or omission.19[44] These established principles were identified by Judge Tuohy in introducing hisdiscussion on the plaintiffs' fiduciary duty claims.20Aspect 1 — disclosure of confidential information[45] It was common ground at trial that Mr Spice had advised Mr Bharadwaja thatMr Bharadwaja was no longer in a multi-offer situation (as reflected in the Judge'sfactual background at [25] (above at [13])). Although Mr and Mrs James had pleadedthat Mr Spice had so communicated with Mr Bharadwaja without advising Mr andMrs James that he was doing so, the evidence at trial was that Mr Spice had told Mrand Mrs James what he intended to do (as reflected in the Judgment at [26], above at[13]). While the evidence at trial was that Mr Spice had told Mr and Mrs James of hisintention, there was no evidence indicating Mr Spice had sought at the time of hisdiscussion with Mr and Mrs James their consent to Mr Spice's making such adisclosure.17 Premium Real Estate Ltd v Stevens, above n 15, at [23] per Elias CJ.18 Bristol and Western Building Society v Mothew, above n 16, at p18; Hurstanger Ltd v Wilson[2007] 1 WLR 2351 (CA) at [35]. (Adopted in Premium Real Estate Ltd v Stevens, above n 15,at [67], [72] per Blanchard, McGrath and Gault JJ.)19 S v Attorney-General [2003] 3 NZLR 450 per Blanchard, McGrath, Anderson and Glazebrook JJat [77]–[78], adopting Bank of New Zealand v New Zealand Guardian Trust Co Ltd [1999]1 NZLR 664 at 681 and 687–688.20 Judgment, above n 1, at [72]–[75].[46] Mr and Mrs James pleaded Mr Spice had failed to act in their best interests, bydisclosing confidential information to Mr Bharadwaja without advising Mr andMrs James he was doing so or seeking their permission to make such disclosure.[47] The Judge found Mr Spice's disclosure of confidential information had notbreached his fiduciary duty because Mr and Mrs James had provided their informedconsent. In reaching that conclusion, the Judge referred to the following matters:(a) by cl 5.3 of the agency agreement Mr and Mrs James had consented toLuxury RE providing information to purchasers and potentialpurchasers in the following terms:215.3 The Client consents to the Agent providing the purchaser orpotential purchaser of the Property with information that theAgent becomes aware of at any time prior to the Expiry Dateof this agreement. Such information;(a) relating to any actual, or in the Agent's opinion likely,defects, hazards, requisitions or notices from anycouncil or other territorial local authority relating tothe Property, including those defects, hazards orrequisitions disclosed in the Property Description &Listing Details Sheet; or(b) that should by law or in the Agent's opinion infairness be provided.(b) cl 5.3(b) (information that by law or in fairness should be provided)encompasses information that an agent has ethical duties to disclose tothird parties;(c) the Real Estate Agents Act (Professional Conduct and Client Care)Rules 2012 (the "Rules"),22 which governed Luxury RE and Mr Spice,include r 6, which recognises both the agent's fiduciary obligations totheir client and the agent's duty to deal fairly with all parties engagedin the transaction, provided:236. Standards of professional conduct21 Judgment, above n 1, at [84].22 Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012, cl 12.1.23 At [80].6.1 A licensee must comply with fiduciary obligations to thelicensee's client.6.2 A licensee must act in good faith and deal fairly with allparties engaged in a transaction.6.4 A licensee must not mislead a customer or client, or providefalse information, nor withhold information that should bylaw or in fairness be provided to a customer or client.(d) the application of the Rules to multi-offers is the subject of an onlineGuidance Brochure published by the Real Estate Authority for theassistance of real estate professionals.24 The online Guidance, at theend of a section headed "Dealing with all parties fairly" states:25Equally, if a buyer pulls out of a multi-offer leaving one interestedbuyer left to make an offer, that remaining buyer should be informedin case they want to review their offer before it is presented to thevendor.(e) in more recent times, the obligations to potential purchasersencapsulated in the Rules have been recognised through statutoryrequirements such as those contained in the Fair Trading Act 1986,which create a potential conflict between an agent's fiduciary duty ofloyalty and their duty of fairness to a potential purchaser;26(f) the email exchanges between Mrs James and Mr Spice before theexecution of the agency agreement indicate that Mrs James at least hadfully and carefully read the agency agreement;27 and(g) Mr and Mrs James had also obtained legal advice when entering thefirst sole agency agreement in the same form.2824 Real Estate Authority "The Sales Process and General Guidance" https: www.rea.govt.nz/real-estate-professionals/the-sales-process-and-general-guidance/multi-offers.25 Judgment, above n 1, at [81].26 At [82].27 At [85].28 At [85].[48] For Mr and Mrs James, Mr Marriott submitted that for a number of reasons theJudge's conclusion that the disclosure to Mr Bharadwaja had not breached Mr Spice'sfiduciary duty was in error.[49] As I am satisfied that the determination was in error through a lack of informedconsent, I will only briefly refer to the other aspects of Mr Marriott's argument on thisaspect.[50] Mr Marriott referred to the fiduciary duty of loyalty as "absolute" and notsubject to ethical obligations owed to any other person. The Judge in fact made hisfinding by reference to the terms of the agency agreement (which through cl 5.3incorporates other obligations).29 The Judge's reference to fiduciary duties being"measured in the context of the ethical rules" may strictly be viewed as obiter, but inany event is immediately followed by the discussion of the provisions of the agencyagreement itself.30 The decision ultimately turned on the finding that Mr andMrs James had given their informed consent to disclosure.[51] Mr Marriott alternatively submitted Mr Spice had not been under an ethicalobligation to make disclosure to Mr Bharadwaja. This submission turned partly onthe proposition there was not a valid multi-offer process in place and Mr Spice hadmisrepresented aspects of the process to Mr Bharadwaja and/or Mr and Mrs James.I do not accept this submission, which relies on a somewhat formalistic approach towhether a multi-offer process is in play. The agent's ethical obligations involved turnon matters of fairness (and fair trading). The evidence established that Mr Bharadwajahad been given to understand that the agent was expecting to receive multi-offers. Theagent was obliged to inform Mr Bharadwaja that he was the only "bidder".[52] Mr Marriott further submitted the Judge had erred in viewing the permitteddisclosure under cl 5.3(b) of the agency agreement as extending to matters beyond thesubject matter of property listing details. The heading of cl 5 is "Property Descriptionand Indemnity". As reflected in cl 5.3(a), there is a focus running through thesubclauses of cl 5 information contained in a document to be attached to the agency29 Judgment, above n 1, at [85].30 At [83].agreement called the "Property Description & Listing Details". In short, clientssigning the agreement would reasonably have thought they were providing consent tothe disclosure of information on the grounds of "fairness" in relation to matters of"Property Description & Listing Details". In the context of the informed consentrequired to modify a fiduciary duty, I recognise the strength of Mr Marriott'ssubmission on this point. That said, counsel did not identify for me any previousjudicial discussion of a clause in the nature of cl 5. As I am in any event upholding(on other grounds) that aspect of the appeal that relates to a lack of informed consent,I refrain from determining whether cl 5.3(b) of the agency agreement is properly to begiven the confined meaning identified by Mr Marriott.[53] That brings me then to the aspect of Mr Marriott's submissions on this pointwhich I uphold.[54] The requirement upon Luxury RE and Mr Spice, if they were to depart fromthe duty of loyalty, was to obtain from Mr and Mrs James their informed consent.31The Judge's conclusion of informed consent appears to have arisen from two facts,namely:(a) Mr and Mrs James had fully and carefully read the terms of the agencyagreement; and(b) Mr and Mrs James had obtained legal advice in relation to theagreement.32[55] Those conclusions, however relate only to the obtaining of consent. They didnot address the requirement that Mr and Mrs James' consent be informed. The casefor Luxury RE in relation to informed consent is in essence that Mr and Mrs Jamesgave their consent to the disclosure that subsequently occurred to Mr Bharadwajathrough their general consent of disclosure required for "fairness" reasons in cl 5.3(b)of the terms of the agency agreement. But Luxury RE cannot suggest on the evidencethat Mr and Mrs James, in agreeing to the terms of the agency agreement, should31 Above at [36]–[38], fn 14.32 See Judgment, above n 1, at [85].reasonably have understood in any way that by having their agent arrange a multi-offer process the agent would thereby have their authority to disclose to the potentialpurchasers involved information that the agent would otherwise, because of the dutyof loyalty, have to not disclose. This was not a situation in which it is suggested forLuxury RE that explanation was provided to the clients as to how their informationmight have to be passed on to others such as by illustrative situations in which the dutyof disclosure would arise outside those specifically identified (by the expression"Property Description & Listing Details") in cl 5 of the agency agreement.[56] I accordingly conclude the Judge erred in finding Mr and Mrs James gave theirinformed consent to the disclosure to Mr Bharadwaja either by agreeing to the termsof the agency agreement or obtaining legal advice on it (or both).Aspect 2 — disobedience[57] Mr and Mrs James invoked that aspect of fiduciary duty that required LuxuryRE to act in accordance with their instructions, that is to not be disobedient.[58] In their pleading, Mr and Mrs James asserted that Luxury RE had failed tofollow their instructions when they requested Mr Spice to make contact withMr Bharadwaja and/or his solicitor and enter into negotiations for him to increase his($3 million) offer to $3.3 million.[59] The evidence as to exchanges between Mr Spice and Mr and Mrs James on22 February 2017 was summarised in the Judgment at [16]–[17] (reproduced above at[17]). The summarised evidence was supported by the documentary record.[60] In his evidence Mr Spice referred to those exchanges. He said he also had anumber of telephone conversations with Alan Harper (Mr Bharadwaja's solicitor), thatthey discussed the offer of $3 million, and that Mr Harper confirmed thatMr Bharadwaja was not willing to pay more at that stage. For his part, Mr James gaveevidence that Mr Spice never spoke to Mr and Mrs James about having actioned theirinstructions until, when queried on the night of 24 February, Mr Spice told them thathe was "absolutely positive that Mr Bharadwaja was not willing to increase his offerat all". Mrs James gave similar evidence.[61] The Judge made a factual finding that Mr Spice had not failed to followinstructions to negotiate with Mr Bharadwaja and his solicitor.33 That was a findingclearly open to the Judge on the evidence, and reflected in the Judge's observationthat:34[o]nce the solicitor had confirmed to Terry [Mr Bharadwaja's] unwillingnessto increase his offer, the appropriate means of negotiation with Mr Bharadwajawas, in Terry's strongly held view, to create a competitive environment withother purchasers.[62] While Mr Marriott submitted the Judge ought to have found Mr Spice haddisobeyed Mr and Mrs James' written instructions, the Judge was entitled on theevidence to reach the factual conclusion he did. Acceptance of Mr Spice's evidenceas to his (unsuccessful) telephone conversations with Mr Harper was reasonably opento the Judge.[63] This aspect of the appeal grounds fails at the level of the alleged breach,without consideration of the difficulties the appellants would have in identifying anyloss arising from such alleged breach.Aspect 3 — misleading and/or dishonest conduct[64] By their pleadings, Mr and Mrs James had alleged that Mr Spice breached hisfiduciary duty by misleading or lying to them on a number of occasions in relation toa number of matters. I will now deal with them under three sub-headings.Aspect 3A — 24 February 2017: contact with Mr Harper/Mr Spice's statement[65] Mr and Mrs James alleged Mr Spice misled them by stating he had negotiatedwith the purchaser as instructed and the purchaser was not willing to increase his offerabove $3 million. This allegation relates to the instructions which are the subject ofmy discussion under Aspect 2 above ([57]–[63]).33 Judgment, above n 1, at [136].34 At [136].[66] It was common ground in the evidence that Mr Spice had advised Mr andMrs James in conversations around 24 February 2017 that he had contacted Mr Harper,who had confirmed that Mr Bharadwaja was not willing to pay more than $3 million.[67] The Judge referred to the evidence relating to this pleading:[88] The most direct accusation of dishonesty on Terry's part is that he liedabout having contacted Alan Harper prior to 24 February to ascertain whether[Mr Bharadwaja] would increase his initial offer. Mr Harper was not calledto give evidence by either party. In his evidence, Terry was adamant in boththe written briefs which constituted his evidence-in-chief and in cross-examination that he had had conversations with Mr Harper by telephone andhad been advised by him that [Mr Bharadwaja] would not increase his offer.There was no note or other written record of such contact, although there wasan email of 22 February from Terry to Ross into which was pasted an advicefrom Mr Harper that he would call Terry.(footnote omitted)[68] The Judge summarised Mr Marriott's submissions as to why the Court shouldfind that Mr Spice had lied when saying he had been in contact with Mr Harper. Theeight points identified by Mr Marriott in relation to Mr Spice's statement had been:35(a) He only made that allegation to the James in the context of a phonecall in response to their email saying that unless he contacted themurgently they were about to counter-offer [Mr Bharadwaja].(b) He had not told the James any such thing prior to 24 February despitehaving allegedly contacted Alan Harper two days earlier as instructed(and despite having communicated with the James many times in theinterim).(c) [Mr Bharadwaja] did place an offer of $3.15 million one week lateron 1 March, immediately Ross James contacted him to say that heneeded to place an offer (at any level) in order to be consideredalongside the offers that Ross James had been led to believe wereforthcoming.(d) Terry Spice told Ross James to ask [Mr Bharadwaja] to make an offeron 1 March after Elgan Potter withdrew (though Terry Spice hadn'ttold Mr James about the withdrawal), rather than communicatingthrough the channel he had allegedly created with Alan Harper.(e) Terry Spice was acknowledging that [Mr Bharadwaja] could beexpected to bid higher by telling Ross James to get him to placeanother offer.35 Judgment, above n 1, at [89].(f) It became apparent when Ross James contacted [Mr Bharadwaja] that[Mr Bharadwaja] had never received any response to his $3 millionoffer.(g) [Mr Bharadwaja's] solicitor referred to the fact that the parties werecommunicating directly, in the email accompanying the 2 March offer.(h) Terry Spice told the James to counter-offer [Mr Bharadwaja] on2 March, once all other potentials had disclosed that they were nolonger interested and after he had told [Mr Bharadwaja's] solicitor thatthere were no competing bids, clearly indicating that he himselfthought there was still a prospect of him offering more.[69] Mr Spice was cross-examined for one-and-a-half days, including in detail inrelation to his communications with Mr and Mrs James and Mr Harper. Mr Spicemaintained he had discussions with Mr Harper in which the latter indicatedMr Bharadwaja was not prepared to increase his $3 million offer. Mr Spice referredto that being a "very firm discussion with Alan Harper". Mr and Mrs James did notcall Mr Harper (or Mr Bharadwaja) as a witness to contradict this evidence.[70] The Judge returned to Mr Marriott's criticism of Mr Spice's evidence (aboveat [68]) but found Mr Spice had been told by Mr Harper that Mr Bharadwaja wouldnot increase his offer above $3 million. The Judge recorded:[90] These points do not persuade me to reject Terry's repeated evidenceon oath that he did speak to Mr Harper prior to his discussions of 24 Februaryand was clearly advised by him that [Mr Bharadwaja] would not increase hisoffer of $3,000,000. The fact that there was a telephone discussion betweenthem is to some extent corroborated by [an email of 22 February 2017 in whichit was recorded that Mr Harper would call Mr Spice]. While I do consider thatMr Marriott's cross-examination of Terry raised doubts about the number oftimes Terry spoke to Mr Harper about [Mr Bharadwaja's] offer over the wholeperiod 22 February to 2 March, I do accept his evidence that he spoke withhim in the period between 22 and 24 February and received the clear messagehe related to the James on the latter date.[71] The Judge identified six particular reasons for this conclusion.36(a) It does not follow from the fact that he did not immediately advise theJames of the result of his conversation that it did not take place. Ineffect nothing changed. There would be more reason to advise themimmediately if the offer had been or might be increased.(b) The fact that [Mr Bharadwaja] increased his offer when told thatothers would or might make offers does not mean that he would have36 Judgment, above n 1, at [91].done so earlier if asked. The email of 23 February from [MadhujeetChimni] confirms that [Mr Bharadwaja] had been told then that hewas in a multi-bid situation and that he needed to make his best offerbut none was made until 2 March.(c) The fact that Terry asked Ross rather than Mr Harper to ask[Mr Bharadwaja] to make his best offer on 1 March does not mean hehad not previously spoken to Mr Harper. Terry knew that Ross wasin direct communication with [Mr Bharadwaja].(d) Terry had no way of knowing whether or not the prospect of otheroffers might cause [Mr Bharadwaja] to increase his offer but it wasobviously possible that it might. That is what Terry was hoping mighthappen.(e) There was no evidence from [Mr Bharadwaja] as to what he was toldby Mr Harper or indeed what his instructions to Mr Harper were.(f) The fact that Terry told the James to counter-offer [Mr Bharadwaja]on 2 March does not mean he thought there was much prospect of himoffering more. Although unlikely at that point it was possible andthere was nothing to lose.(footnote omitted)[72] On this appeal, Mr Marriott raised no new basis by way of attack on thecredibility of Mr Spice's evidence as to what Mr Harper had said to him.[73] There is no basis to disturb the Judge's factual finding which was supported bythe matters he identified (at [71] above). The Judge had the benefit of hearing anextended cross-examination of Mr Spice specifically in relation to what was said byMr Harper.Issue 3B — 24 February 2017: representations as to interested parties[74] Mr and Mrs James alleged that Mr Spice misled them by misrepresenting thenumber of people (other than Mr Bharadwaja) who were interested in the property.[75] By their pleadings, Mr and Mrs James alleged that Mr Spice misrepresentedthe level of interest in the property by leading Mr and Mrs James to believe thereexisted (in addition to Mr Bharadwaja's interest) at least two further offers (andpossibly more), creating a multi-offer situation. Mr and Mrs James alleged that in factthere were no offers other than Mr Bharadwaja's.[76] The Judge summarised the evidence of Mr Spice in relation to two otherpotential purchasers.37 That evidence was accepted by the Judge as the basis uponwhich Mr Spice genuinely believed there were certainly two persons (apart fromMr Bharadwaja) interested enough in the property to make an offer.38 The Judgesummarised Mr Spice's evidence:[19] Over the same period Terry was proposing to the James the initiationof a multi-offer process. He believed that there were at least two otherpotential purchasers apart from [Mr Bharadwaja] who were likely to makeoffers on the property and this process would be the best way of creating acompetitive environment. One was an Australian solicitor named LindaEvans. His communications with Ms Evans led him to believe that she wasabout to make an offer for the property at a price of $3,300,000. The other,Elgan Potter, was also an Australian, who intended to (and did) fly toQueenstown to view the property.[77] The Judge, in rejecting the allegation that Luxury RE had breached its fiduciaryduty by misrepresenting the level of interest, explained:[92] The allegation that Terry deliberately misled the James about the levelof potential interest in the property and therefore the suitability of a multi-offer process as opposed to a counter-offer to [Mr Bharadwaja] need to beconsidered in the surrounding context. After hearing the evidence of all threewitnesses and reviewing the email communications with potential purchasers,it is clear to me that on 24 February, Terry genuinely believed that there werecertainly two persons apart from [Mr Bharadwaja] and possibly more whowere interested enough in the property to make an offer and that a multi-offerprocess was the best way to achieve the highest price possible. It has to beremembered that his personal interest was the same as the James': to achievea sale at the best possible price so that LRE could earn a commission and atthe highest rate. It is illogical to think that his preference for the multi-offerprocess was motivated by anything other than the mutual interest of his clientsand his company.[78] On this appeal, Mr Marriott submitted the evidence contradicted Mr Spice'sstatements as to the interest of Ms Evans and Mr Potter in the property. In particular,Mr Marriott referred in relation to:(a) Ms Evans — to an email of 21 February 2017 in which Ms Evans statedshe was "not in a position to put in an offer at the moment"; and37 Judgment, above n 1, at [19].38 At [92].(b) Mr Potter — to evidence that as at 22 February 2017 he had not viewedthe property and was not at that point a likely bidder (in factsubsequently withdrawing his interest on 1 March 2017 afterconducting further research).[79] The way in which Mr and Mrs James alleged Mr Spice had discardedMr Potter's interest in the property was reflected in the following exchange whenMr Marriott was cross-examining Mr Spice:Q: And you also told [Mrs James] that you had a new prospect you wereworking with, an Elgan Potter.A: That's correct.Q. So, on that basis, you thought that there was an opportunity as I saidfor a multi-offer process.A. Correct.[80] As the Judge observed,39 the discussions Mr Spice had with Mr and Mrs Jamesin relation to the level of potential interest in the property had to be viewed in theirsurrounding context. Relevantly, the Judge in considering the email communications(referred to at [92] of the Judgment) had to consider the full content of thecommunications rather than particular passages emphasised in submissions for Mr andMrs James.[81] The full email sent by Ms Evans to Mr Spice on 21 February 2017 spoke of aninability to put an offer "at the moment", the email reading:Hi TerryThanks for your call yesterday. We remain very interested in the property.The bank is expediting its processes and I will be speaking with a law firmtoday. However, we are not in a position to put in an offer at the moment. Wewould be grateful if you could continue to keep us updated as we are activelypursuing things at our end.Kind regardsLinda39 Judgment, above n 1, at [92].[82] Mr Spice was justified in understanding Ms Evans, as a potential purchaserwho was expressly stating she remained "very interested in the property", as definitelyinterested in purchasing the property and as a person who, under the time limits of amulti-offer process, might make an offer.[83] In the case of Mr Potter, the fact that he had come forward only recently andwas yet to view the property were matters known to Mr and Mrs James at the timeMr Spice was discussing with them the level of interest in the property and theprospect of entering a multi-offer process. Mr Potter's subsequent withdrawal of hisinterest on 1 March 2017 (after he had conducted further research) occurred after therelevant time and is not evidence that what Mr Spice said in February was inaccurate.Aspect 3C — 1 March 2017: disclosing unlikelihood of offers[84] Mr and Mrs James alleged that Mr Spice had also breached his fiduciary dutyby misleading or failing to disclose information essential to them, while offers wereexpiring, in particular information about the probability of offers and conditions.[85] The Judge explained this particular allegation:[87] The second occasion on which it is alleged that he deliberately misledthe James on a critical matter is on 1 March 2017 when he contacted Nona toget Ross to contact [Mr Bharadwaja] to make a further offer urgently. It isalleged that he deliberately concealed from Nona, and therefore Ross as well,matters which indicated that there were unlikely to be any other acceptableoffers from the multi-offer process. It is alleged that this caused Ross tounwittingly convey to [Mr Bharadwaja] that he ought to submit a low offer asa start point for negotiations.[86] In discussing this alleged breach (by omission) the Judge noted Mr and MrsJames had pleaded three "deliberately deceptive omissions", namely:40At the time of making that request:(a) Terry Spice had concealed the fact that only one person had eversigned a multi-offer form, from the James'(b) Terry Spice was already aware that Elgan Potter would not be makingany offer;40 Judgment, above n 1, at [102].(c) Terry Spice knew that no offer had been received from Linda Evansand that even if she were to make an offer it would be conditional.[87] The Judge rejected particular (a) as irrelevant — the fact only one person hadsigned the multi-offer form did not mean only one person would participate —Mr Bharadwaja for example did not sign the form but participated.41[88] The Judge, in relation to particular (b), identified Mr Spice was aware (by1 March 2017) that Mr Potter would not be making an offer and should have toldMrs James of that. But the Judge found it most likely that Mr Spice was not dishonestor deliberately deceptive in that, instead acting with an intention not to cause Mr andMrs James more stress and believing that Ms Evans would make an offer that couldcreate competition with Mr Bharadwaja.42[89] The Judge rejected particular (c) as irrelevant, as any offer from Ms Evanswould not have been expected until a short time before closing time.43[90] The Judge, in reaching the conclusion that Mr Spice had not breached thefiduciary duty by concealment of information on 1 March 2017, rejected Mr and MrsJames' allegation that there had been a breach of the duty to act in good faith andhonestly. The Judge found on the evidence that Mr Spice had acted honestly (andimplicitly in good faith).[91] Mr Marriott submitted that for there to have been a breach of fiduciary duty, itwas sufficient that Mr Spice misled or deceived Mr and Mrs James, regardless ofwhether that was deliberate. A key passage in Mr Marriott's written submissionexplained:By failing to answer the James' questions and/or answering them in a mannerthat suited his interests as opposed to the James', Mr Spice was deliberatelymisrepresenting the true state of affairs and thus acting in bad faith or failingto act in good faith.41 Judgment, above n 1, at [103].42 At [104].43 At [105].[92] For this approach to the good faith duty of a fiduciary duty, Mr Marriottreferred to Maketu Estates Ltd v Robb.44 As described by Woolford J in that case:45Good faith is sometimes equated with candour, or the honesty with which oneholds a belief. Although honesty is an important element, the obligation is toact in good faith — in other words, to act with the right motive.46[93] Faced with the Judge's finding of fact that Mr Spice had acted in good faithand therefore not in breach of his fiduciary duty, Mr Marriott submitted that thedecision in Maketu confirms that a failure to act in good faith may be unconscious onthe part of the fiduciary. As I understood that submission, it turned on a passage in thejudgment in Maketu where Woolford J was considering the consequences of the agentin that case (a Mr Robb) acting with a subconscious bias in favour of the eventualpurchaser (a Mr Jones). But the passage in which Woolford J found Mr Robb'sconduct to have breached his fiduciary duty related not to a duty in relation to honesty(in communications) but rather in relation to undivided loyalty.47 Woolford J went onto reject an allegation of bad faith.48[94] In this case, the Judge's justified factual finding that the plaintiffs had notestablished bad faith on the part of Mr Spice correctly led the Judge to also concludethe plaintiffs had not established a breach of fiduciary duty in relation to the non-disclosure on 1 March 2017.Aspect 4 — failure to act with care and skill[95] Mr and Mrs James pleaded that Luxury RE breached its fiduciary duty byfailing to act with care and skill. In particular, they pleaded Mr Spice failed to advisethem of the risks of a multi-offer situation, despite being fully aware from them of thenegotiations that had taken place between them and Mr Bharadwaja.44 Maketu Estates Ltd v Robb [2014] NZHC 2664 at [64]–[65].45 Maketu Estates Ltd v Robb, above n 44, at [64].46 Lionel Smith "The Motive, Not the Deed" in Joshua Getzler (ed) Rationalizing Property, Equityand Trusts (LexisNexis UK, London, 2003) 53 at 103.47 Maketu Estates Ltd v Robb, above n 44, at [67].48 At [68].[96] The Judge identified this as an allegation of breach of contractual duties anddealt with it under a discrete heading.49 That was not because Mr and Mrs James hadsued for breach of ordinary contractual duties. They had not. Their claim was forbreach of fiduciary duties, of which "failure to act with care and skill" was oneallegation.[97] Notwithstanding the particular pleading in relation to breach of the duty to actwith care and skill focused on the omission referred to at [95] above, the Judge at thispoint of the Judgment considered the range of alleged breaches referred to in Mr andMrs James' pleading including those identified only in relation to the alleged breachesof the duties of obedience and loyalty (including good faith).[98] The Judge first noted not all duties owed by a fiduciary duty are necessarilyfiduciary in nature.50 The Judge observed:51It is important to recognise the distinction between the fiduciary duties owedby an agent to their principal and merely contractual duties, as theconsequences of breach may be different. In particular, a breach of fiduciaryduty will almost always disentitle an agent to their commission, but thatconsequence may not necessarily follow from the breach of a mere contractualduty.[99] The Judge recorded the primary contractual duties are to act within theauthority given to the agent and to comply with their instructions and to exercise duecare, skill and diligence in the performance of their duties.52[100] The Judge next identified that Mr and Mrs James made a number of complaintsrelating to the way in which Mr Spice performed his duties, namely:53(a) failing to keep Mr and Mrs James informed regarding prospectivepurchasers;49 Judgment, above n 1, at [116]–[137].50 At [72], [116].51 At [72].52 At [116].53 At [117].(b) failing to follow Mr and Mrs James' express instructions to negotiatewith Mr Bharadwaja and his solicitor;(c) failing to advise Mr and Mrs James of the risks of a multi-offersituation; and(d) failing to communicate information which Mr Spice knew was materialin a timely manner.[101] Because the Judge concluded the evidence did not establish that any financialloss accrued to Mr and Mrs James from the alleged breaches, in the Judgment he firstset out his conclusions in relation to Mr and Mrs James' failure to prove that anydamage accrued from such alleged breaches.54 It was after that, in the Judgment, thathe set out conclusions in relation to the alleged failure of Mr Spice to deliver serviceto the required contractual standard. In that regard, the Judge found there were twobreaches of the contractual duty in relation to exercising due care, skill and diligence.Those two breaches lay in:(a) failing to provide information to Mr and Mrs James as to Mr Spice'scommunications with Ms Evans and Mr Potter, and failing to do so ina timely way;55 and(b) failing to advise Mr and Mrs James what would have to (and did)happen if the multi-offer process produced only one offer.56[102] The Judge found that the evidence did not establish that Mr Spice had failed tofollow instructions in relation to negotiating with Mr Bharadwaja and his solicitor.57[103] On this appeal, Mr and Mrs James asserted that the Judge erred in finding thatLuxury RE's failure to exercise care and skill in the performance of its duties was not54 Judgment, above n 1, at [118]–[128].55 At [134]–[135].56 At [137].57 At [136].fiduciary in nature and also that Mr and Mrs James had failed to establish a lossflowing from breaches of such duty.[104] Mr Gresson, for Luxury RE, submitted the Judge's findings in relation to thecontractual duties alleged to have been breached were correct in each regard. LuxuryRE did not cross-appeal in relation to the Judge's findings that Luxury RE hadbreached its duty to exercise due care, skill and diligence in the communicationsconcerning Ms Evans and Mr Potter in relation to the consequences of entering amulti-offer process. On the other hand, Mr Gresson submitted that the Judge correctlydrew a distinction between breaches of fiduciary duty and other breaches ofcontractual duty (before finding no loss had been established in any event).[105] I do not find the Judgment to contain any error in relation to what Mr andMrs James alleged to have been breaches of Luxury RE's duty to exercise due care,skill and diligence in the performance of its duties.[106] First, by reason of the nature of a fiduciary duty, it is well settled as the Judgerecognised (above at [98]) that not all breaches of duty by a fiduciary are breaches oftheir fiduciary duty. In the decision in Maketu already cited, Woolford J statedprecisely that, citing Court of Appeal authority.58 Here, because of Judge Tuohy'sfactual findings which I uphold, none of the alleged failures to exercise due care, skilland diligence engages the element of infidelity or disloyalty that in turn engages afiduciary's conscience.59[107] That leaves the Judge's finding that Mr and Mrs James have not establishedthat the proven breaches of the duty to exercise due care, skill and diligence had causedMr and Mrs James the loss for which they claimed damages or compensation.[108] Mr and Mrs James had pleaded that the alleged breaches had caused them lossand, in particular, the ability to conclude a sale price with Mr Bharadwaja of at least$3.25 million.58 Maketu Estates Ltd v Robb, above n 44, at [13], citing S v Attorney-General [2003] 3 NZLR 450(CA) at [77].59 See Maketu Estates Ltd v Robb, above n 44, at [13]; Bank of New Zealand v New ZealandGuardian Trust Co Ltd [1999] 1 NZLR 664 (CA) at 687.[109] As identified in the "Factual Background" in the Judgment (above at [17]), thesequence of offers or counter-offers between Mr and Mrs James and Mr Bharadwajawas as follows:(a) Mr James notified Mr Bharadwaja that he would accept anunconditional offer for $3,330,000 (21 February 2017);(b) Mr Bharadwaja orally counter-offered at $3,250,000 (according toMr James in his evidence) (21 February 2017); and(c) However, Mr Bharadwaja counter-offered in a written offer at$3,000,000 (22 February 2017);(d) Mr Bharadwaja communicated through Mr Chimni that he had notorally offered $3,250,000 but the number was more like "3.1 (million)"(22 February 2017);(e) Mr Harper advised that Mr Bharadwaja was not willing to pay morethan the $3,000,000 referred to in the written offer (according toMr Spice in his evidence) (25 February 2017);(f) Mr Bharadwaja made a written offer of $3,150,000 (2 March 2017);(g) Mr and Mrs James made a written counter-offer at $3,250,000 (3 March2017);(h) Mr Bharadwaja renewed his existing offer of $3,150,000 (6 March2017); and(i) the sale and purchase was agreed to by signed agreement at $3,150,000(7 March 2017).[110] With this set of events, it was Mr and Mrs James' claim that breaches of dutyon the part of Luxury RE had caused them to lose the opportunity to obtain a higherprice from Mr Bharadwaja.60 As Mrs James put it in her evidence:The best and only option we had left was to accept [Mr Bharadwaja's] offerof $3.15 million even though that was $100,000 less than we knew he hadbeen prepared to pay.[111] As I have previously noted, neither Mr Bharadwaja nor his solicitor,Mr Harper, was called to give evidence — there was accordingly no evidence fromthem as to what Mr Bharadwaja was in fact prepared to pay.[112] The Judge considered what Mrs James said in her evidence as to whatMr Bharadwaja would have paid against the other evidence.61 The Judge concludedMr and Mrs James had been right to think that Mr Bharadwaja had "played" them withhis "dangled figures" in discussions with Mr James in particular.62 The Judge notedthere was no evidence that Mr Bharadwaja would have in fact increased his offer atall if he thought he was the only purchaser.63 To the contrary, the Judge consideredthe reasonable inference was that it was only because of the multi-offer process thatMr Bharadwaja increased his offer from $3,000,000 to $3,150,000.64 The Judge foundthe only reliable indicator of what Mr Bharadwaja was prepared to pay was the pricehe inserted in a written, signed offer.65[113] As a result, the Judge concluded Mr and Mrs James had not suffered any lossarising from Mr Spice's performance. To the contrary, the Judge was satisfied on theevidence they obtained the best price possible in the circumstances and onerepresenting the true market value of the property as far as that could be establishedon the evidence.66[114] Of some significance, evidence had been given (as referred to in the Judgmentat [28], above at [17]) that, through the negotiations that occurred on 3 March 2017,60 Judgment, above n 1, at [118].61 At [121]–[126].62 At [121].63 At [123].64 At [123].65 At [124].66 At [127].Mr and Mrs James were able to secure an agreement to have a rent-free tenancy of theproperty for 12 months following the settlement date (that is, until 28 April 2018).Although the Judge did not expressly refer to the "free rent" condition after identifyingit in the factual background, it was clearly a matter relevant to any assessment of loss.[115] On appeal, Mr Marriott noted the normal measure of loss for a breach offiduciary duty is the difference between the sale price and the market value.67Mr Marriott in his written submissions on this appeal recorded that Mr and Mrs James"say that the true market value of the property by all accounts was $3.3m". For thisproposition, he referred to three matters:(a) Mr Spice had conceded in his evidence $3.3m Mr and Mrs Jamesexpected to achieve on the open market was an achievable price for theproperty;(b) Mr Spice believed that Ms Evans would make an offer of $3.3m; and(c) Mr Spice gave repeated assurances to Mr and Mrs James that a saleprice of $3.3m (netting them $3.2m after commission) was achievable.[116] None of the matters relied upon by Mr Marriott indicates an error in the Judge'sfactual determinations.[117] Mr and Mrs James' pleaded basis for claiming damages lay in an assertion thatMr Bharadwaja would have paid at least $3.25 million for the property. Given Mr andMrs James called neither Mr Bharadwaja nor his solicitor, and given the Judge'sjustifiable factual conclusions relating to Mr Bharadwaja's negotiating style, thereasoning deployed by the Judge when rejecting the pleaded basis of claimingdamages is unassailable. What is more, on this appeal Mr Marriott's submissions werefocused on the different (unpleaded) proposition that the Judge erred in not finding$3.3 million represented the "true market value".67 Premium Real Estate Ltd v Stevens, above n 15, at [85]; Maketu Estates Ltd v Robb, above n 44,at [69].[118] There was no expert evidence of market valuation (presumably because Mrand Mrs James' pleadings referred not to market valuation but rather to whatMr Bharadwaja would have been prepared to pay). Mr Spice was not qualified as anexpert on valuation and any opinion expressed in his evidence was not admissible inrelation to matters of valuation. The other matters referred to by Mr Marriott inrelation to Mr Spice's expectations and discussions take matters no further — theyrepresent Mr Spice's expectation at the time and are not a substitute for qualifiedexpert opinion as to market value.[119] The Judge was accordingly correct in determining that Mr and Mrs James hadnot established a loss by reference to what Mr Bharadwaja would have paid. Equally,Mr and Mrs James could not succeed on a damages claim calculated by reference toan unestablished market value.Appeal issue 3: commission entitlementMr and Mrs James' defence[120] Mr and Mrs James pleaded Luxury RE was disentitled to commission (whetheror not the agency agreement had been cancelled) by reason of the pleaded breaches offiduciary duty.The Judgment[121] The Judge gave judgment for Luxury RE on the commission claim because theagency agreement had not been cancelled and Luxury RE had not breached itsfiduciary duties.[122] Now I have found (contrary to the Judgment) that Luxury RE breached itsfiduciary duty in one regard (disclosure of confidential information), the effect of thaton Luxury RE's entitlement to commission falls for reconsideration.Appellants' submissions[123] Mr Marriott submitted it is well-settled that a fiduciary in breach of theirfiduciary duties is not entitled to remuneration because the remuneration will not havebeen earned by good faith performance. The entitlement to commission is lost whetheror not the principal also recovers any damage for losses caused by their agent's breach.[124] Mr Marriott referred in particular to discussion of the law of Blanchard J(speaking for the plurality) in the Supreme Court decision in Premium Real Estate Ltdv Stevens.68 Blanchard J noted that, while the general rule is that any right toremuneration will be lost by breach of fiduciary duty, that may not apply in exceptionalcases where the agent is found to have acted in good faith and the transaction has beencompleted to the benefit of the principal. His Honour explained:[89] The final matter is whether, as Courtney J ordered, Premium shouldalso forfeit its commission of $67,050 by reason of its breach of fiduciary duty.In this respect the law remains as it was stated in 1926 by Atkin LJ in Keppelv Wheeler:69"Now I am quite clear that if an agent in the course of his employmenthas been proved to be guilty of some breach of fiduciary duty, inpractically every case he would forfeit any right to remuneration atall. That seems to me to be well established. On the other hand, theremay well be breaches of duty which do not go to the whole contract,and which would not prevent the agent from recovering hisremuneration; and as in this case it is found that the agents acted ingood faith, and as the transaction was completed and the appellant hashad the benefit of it, he must pay the commission."In that case the real estate agents believed, erroneously, that their duty to theirprincipal ceased when they had procured an offer to purchase which theprincipal had accepted subject to contract (and therefore, unlike the normalposition in this country, still leaving the vendor in a position to withdraw). Inthat belief, and therefore acting mistakenly but innocently, committing onlywhat the Privy Council in Kelly v Cooper70 called an honest breach, the agentsfailed to inform the vendor of a higher offer. They were found liable for breachof duty and ordered to pay damages measured by the difference between thetwo offers. But, as indicated in the passage from Atkin LJ, the Court of Appealallowed the agents' claim for commission on the sale at the lower figure,which had proceeded. It is, however, quite clear that if the agents had notacted in good faith they would have been denied their commission, or beenrequired to disgorge it if already received, notwithstanding that the plaintiffwas being "made whole" by the award of damages. That would have left theplaintiff better off than if the transaction had proceeded without any breach offiduciary duty, but the double sanction of damages and forfeiture of moneysreceived or receivable by way of remuneration is equity's method of deterringdisloyal behaviour by fiduciaries, as Jacob LJ has very recently confirmed inImageview Management Ltd v Jack:7168 Premium Real Estate Ltd v Stevens, above n 15 (the plurality being Blanchard, McGrath and GaultJJ).69 Keppel v Wheeler [1927] 1 KB 577 at p 592 (CA).70 Kelly v Cooper [1993] AC 205 (PC).71 Imageview Management Ltd v Jack [2009] EWCA Civ 63 at para [50]."The policy reason runs as follows. We are here concerned not withmerely damages such as those for a tort or breach of contract but withwhat the remedy should be when the agent has betrayed the trustreposed in him — notions of equity and conscience are brought intoplay. Necessarily such a betrayal may not come to light. If all the agenthas to pay if and when he is found out are damages the temptation tobetray the trust reposed in him is all the greater. So the strict rule isthere as a real deterrent to betrayal."[90] The remuneration is forfeited because it has not been earned by goodfaith performance in relation to a completed transaction.72 There is noinconsistency in awarding the principal both damages and the refund of thecommission, as there would be, for instance, if a court were to order adefendant fiduciary both to pay damages and to account for profits made bythe use of the principal's asset.73 Remuneration for services is not a profit ofthis kind. It is something to which an agent has no entitlement once he or shehas committed a breach of fiduciary duty save in the circumstances describedby Atkin LJ. The agent has no right to be paid or to retain any commissionand must also compensate the principal for any loss which the agent hascaused. The principal is advantaged because the property has been soldwithout commission being payable but the agent should not receive a creditagainst the damages for the fact that the commission is not payable becausethat would effectively allow the agent the benefit of the forfeitableremuneration.[91] The question then is whether Ms Riley can be said to have acted ingood faith, committing only an honest breach. The evidential burden ofshowing that must be discharged by the defaulting fiduciary.[125] In Stevens, Tipping J (concurring with Blanchard J) explained why the Courtin Keppel v Wheeler had refused to order both compensatory damages and therepayment of the agent's remuneration:74The reason for not ordering both rested essentially on the proposition that theagent had acted in good faith and his breach did not go "to the wholecontract".75 By that Atkin LJ meant that the breach did not undermine thewhole fiduciary underpinning of the contractual relationship, nor was it suchthat the agent had disentitled himself to commission.[126] In Stevens the Supreme Court found the agent, in committing the breach offiduciary duty, had deliberately misled the principal about a material matterconcerning a purchaser. The agent's conduct could not be characterised as something72 "A principal is entitled to have an honest agent, and it is only the honest agent who is entitled toany commission": Imageview at para [18].73 Personal Representatives of Tang Man Sit v Capacious Investments Ltd [1996] 1 AC 514.74 At [108].75 Keppel v Wheeler, above n 69, at p 592, per Atkin LJ.done or said in good faith. As a result, the commission was forfeited.76 As describedby Tipping J "Premium's conduct represented the anthesis of loyalty and good faith".77[127] As identified by Tipping J in Stevens, once the Court has established there hasbeen such a breach of the duty of the breach of loyalty and good faith as to disentitlethe agent to commission, there remains in the Court a discretion to allow the agent tokeep all or part of the commission.78 But on the facts of Stevens Premium did notreceive the benefit of the exercise of such a discretion because, in the words ofTipping J:79There is no basis upon which Premium should, as a matter of discretion, beallowed to keep all or part of the commission. There is a need to deter thosein Premium's shoes from breaching their fiduciary duties in this deliberateway.[128] The facts of this case are well removed from those in Stevens. As identified byTipping J, Premium's conduct in Stevens had been the anthesis of loyalty and goodfaith.[129] In this case, the Judge's careful review of the evidence led to the rejection ofMr and Mrs James' allegations that Mr Spice had been dishonest or deliberatelydeceptive. The Judge specifically rejected the suggestion that Mr Spice had promotedthe multi-offer strategy in a dishonest way.[130] The breach which I have found to have been established here — failing toobtain Mr and Mrs James' informed consent to the possible disclosure that would berequired under the multi-offer process — was not contributed to by a dishonestmotivation or bad faith. Rather, it occurred because Mr Spice did not undertake adiscussion with Mr and Mrs James of the sort of disclosures that he might be requiredto make to potential buyers depending on the outcome of the multi-offer process.76 Premium Real Estate Ltd v Stevens, above n 15, at [94] per Blanchard, McGrath and Gault JJ: at[109] per Tipping J.77 At [109].78 At [110].79 At [110].[131] Mr and Mrs James obtained within the agreed period of agency the sale of theproperty. By virtue of the terms of the agency agreement Luxury RE was to be entitledto commission in that event.[132] In these circumstances Luxury RE's claim to commission falls squarely withinthe exception (as recognised by the Supreme Court in Stevens) to what is otherwise ageneral rule that breach of fiduciary duty leads to the forfeiture of any right toremuneration at all.[133] For this reason, although I have found (contrary to the Judgment) that LuxuryRE committed a breach of its fiduciary duty in one regard, I uphold the finding in thejudgment that Luxury RE was entitled to the commission.Outcome[134] The appeal is dismissed.[135] The appellants are to pay to the respondent the costs of the appeal fixed on a2B basis together with disbursements to be fixed by the Registrar.Osborne JSolicitors:D L Marriott, Barrister, AucklandTodd & Walker Law, Queenstown