Realty bites: property group must cough up agents’ fees
Court deals blow to firm that ferreted away millions in commissions meant for two estate agents
Property services company Excellerate Property Services has been dealt a costly legal blow for pocketing real estate agents’ commissions worth millions of rand.
The high court ordered the company to pay Peter Collins and Omer Ginsberg R6.8m commission – plus interest – for marketing the World Trade Center in Johannesburg in 2013. The company has also been slapped with the legal bill.
The 20-storey office tower in Sandton, featuring rooftop conferencing facilities, “private lobbies, fully fitted kitchens, luxurious bathrooms and accelerated elevators”, was at the centre of the protracted multimillion-rand legal wrangle. It was sold for R360m.
Collins and Ginsberg worked for JHI Properties (now Excellerate Property Services) when they brokered the deal to exclusively market the property to a group of selected companies. And in no time they tabled their first offer.
JHI would earn a commission from the sale. Trouble started when property developer Lushaka Investments initially gave Penny Brothers agency sole mandate to sell the property. Five months later it gave the sole mandate to JHI, without telling either agency what it had done. Penny Brothers sold the building to South African Corporate, one of the companies for which the JHI had exclusive selling rights for R360m, earning R9m commission.
JHI successfully sued Lushaka, which paid R9m in damages with interest and costs, which came to total of R12.9m. JHI took the money and refused to pay Collins and Ginsberg their commissions. A bitter lawsuit ensued in the High Court in Johannesburg, with the estate agents demanding R6.8m from Excellerate for their work.
Last month, Acting Judge Paul Carstensen ruled in favour of the estate agents. Carstensen described the company’s CEO, Marna van der Walt, as a “poor witness” who conceded that “various paragraphs of her affidavit opposing summary judgment were false”.
“In addition, her evidence that Collins acted outside his authority as broker manager to approve payments of referral commission, is wholly unacceptable,” said Carstensen. “Consequently, it must have been accepted that [the estate agents] would have received a share of the Lushaka payment because [Excellerate] did not suffer damages in the amount which [the estate agents] would have earned as commission.”
The estate agents’ lawyer, Brian Aronoff, the director of Werksmans Attorneys, said: “This is a matter that should never have gone to court as Excellerate did not have a defence to the claim. They should have done the right thing and paid my clients what was rightly due to them.”
Collins said he was pleased that the court found in their favour. However, he did not rule out the possibility of further litigation.
“I feel that justice has been done, it is a sound judgment,” said Collins.
“It has been gruelling but we are hoping that they will finally pay us our share. I expect that they will continue to delay payment by appealing, but I think their chances are very slim. We are happy to wait it out.”