Nigel Marple, NZPA reports that the Supreme Court has granted leave to an Auckland real estate company to appeal a Court of Appeal decision which ordered it to pay $225,000 to an Auckland couple over the sale of their cliff-top home on the North Shore.

Premium Real Estate Ltd sold the couples' house and land in Beach Road, Milford, in April 2004 to a Trust for $2,575,000.

Six months later it was re-sold by Premium for $3,550,000 to Hong Kong buyers.

A Premium agent brought the Trust's offer to the couple and acted for the Trust on the resale.

The agent had acted previously for the Trust's principal, a property speculator, and the agent's two daughters also had a professional association with the man.

The couple, upset when they learned of the resale deal, sued for damages of $995,000 - the difference between what they paid and a valuation of $3,570,000 - and sought the return of the $67,000 commission they had paid to Premium.

The High found no breach of the Fair Trading Act 1986 or negligence by Premium, but said Premium's failure to disclose its relationship with the Trust amounted to "misleading and deceptive" conduct and found the company liable for $337,500.

It also said Premium's failure to disclose its relationship with the speculator breached its fiduciary duty to the couple and awarded $675,000, plus the commission, to the couple.

In total the High Court awarded the couple $1,080,000 over the sale of the property.

In April 2008, the Court of Appeal dismissed Premium's appeal against liability, but slashed the damages awarded against Premium to $225,000 plus interest of 7 percent since April 2004.

The Court of Appeal agreed with the High Court's finding that Premium's failure to disclose its relationship with the speculator was a breach of its fiduciary obligation to the couple, but ruled that the couple were not entitled to get the commission back.

The approved grounds for appeal by Premium were whether the company was:

• in breach of its fiduciary duty and/or the Fair Trading Act 1986 because it failed to tell the couple of its relationship with the purchaser; and
• liable to pay the couple an amount equivalent to all or part of the profit made by the trust when it resold the property six months after purchasing it.

The court also granted the couple leave to cross-appeal the Court of Appeal's decision to cut the amount of damages they were awarded.