A real estate transaction involving a Barfoot & Thompson agent who copy-pasted signatures in an attempt to “tidy up” paperwork has led to a $600,000-plus High Court lawsuit, The New Zealand Herald has reported.
Property developer OLA Homes claims it suffered major financial losses after the proposed $1.12 million sale of a townhouse in Mt Wellington, Auckland, fell through in 2022. The company later sold the property during a weaker market for $875,000, significantly below the original agreed price.
OLA initially took legal action against the buyer to recover the loss, but the case failed after a court ruled there had never been a legally valid contract due to errors in the way the documents were completed by the Barfoot & Thompson agent, Herald reported.
The developer has now filed a fresh claim in the High Court, accusing the agency of negligence and breach of fiduciary duty.
According to court documents, the agent, Prince Kapoor, allegedly used copy-and-paste methods to apply electronic signatures during the transaction.
“The copying and pasting of signatures was done to make the contract appear uniform and avoid scrutiny by lawyers,” Herald quoted the claim alleged the Barfoot & Thompson agent admitted during the previous trial in June.
Barfoot & Thompson has denied the allegations and is contesting the lawsuit. The company argues the developer either caused or contributed to the losses.
The agency claims OLA’s former director had given the agent permission to copy and paste initials and that the developer was an experienced property operator who understood the risks involved in property transactions.
The dispute stems from the attempted sale of a townhouse on Barrack Rd in Mt Wellington, one of several units being developed and sold by OLA in 2022.
The deal involved two Barfoot & Thompson agents, Prince Kapoor, who represented the seller, and Huong Tuyet Tieu, who made an offer to buy the property herself.
Tieu initially offered $1.12 million using Barfoot & Thompson’s internal system and the electronic signing platform DocuSign in March 2022. OLA responded with a counter-offer of $1.15 million, which under contract law cancelled the original offer.
However, the agent did not inform OLA that the counter-offer effectively voided the original proposal, according to the Herald’s report.
When OLA later agreed to accept $1.12 million, the agent treated the deal as completed without obtaining a fresh acceptance from the buyer, which was required since the initial offer had already been cancelled.
OLA also claims the agent added a new clause to the agreement and copied Tieu’s DocuSign initials onto the document using an iPad application called Notability, instead of requesting a new signature.
Kapoor has said the buyer was aware of the copied signatures, but Tieu has denied that claim.
Although Tieu paid a $56,000 deposit, she later refused to complete the purchase and the sale was never settled. In August last year, a judge ruled that no valid contract had been formed.
Following the failed case against the buyer, OLA filed a lawsuit seeking $600,359.96 in damages from Barfoot & Thompson. The claim includes allegations of negligence, breach of the Fair Trading Act, and breach of fiduciary duty.
OLA argues the agent failed to properly advise the company about the legal effect of the counter-offer and prioritised “the securing of its commission over the enforceability” of the contract, according to Herald.
The developer also alleges it was unaware of the copy-paste method until the agent revealed it under cross-examination during last year’s court proceedings. According to the claim, that meant the company unknowingly pursued a legal case that had little chance of success.
The company says the failed transaction resulted in $245,000 in resale losses, $205,000 in legal costs, and $66,078 in adverse costs from the unsuccessful lawsuit against the buyer.
Barfoot & Thompson disputes the claim and says the real reason the sale collapsed was because the buyer lacked the funds to complete the purchase.
The agency referred to a text message exchange between the two agents around the time the settlement was due.
In it, Kapoor texted Tieu: “u wanna lend me some money for two months on interest?”.
Tieu replied: “I can’t even settle mine. How do I have money lend u?? u shld lend me instead”, Herald quoted.
The agency also argues that OLA contributed to its own losses by deciding to sue the buyer and by selling the property at what it claims was an undervalue.
OLA Homes declined to comment on the case.
A spokesperson for Barfoot & Thompson told the Herald that the company would not comment in detail while the matter is before the courts.