AUCTIONEER’S FEES

Sun (Auckland), Volume II, Issue 444, 28 August 1928, Page 13

AUCTIONEER’S FEES

COMMISSION PROBLEM BASIS OF COMPUTATION AVhether a land auctioneer should base commission charges upon the gross price realised upon the sale oi a mortgaged property or only on the equity of redemption was argued in the Supreme Court this morning before Mr. Justice Reed as the outcome of the sale of a property in Anzac Avenue. Alfred Ernest Bagnall (Mr. McVeagh) asked that accounts be taken of the proceeds of the realisation of a mortgage to Hubert Thomas ('U'lrients (Mr. Richmond), and that inquiries be made by the court as to what amounts were properly chargeable by the defendant against such proceeds. Plaintiff also sought judgment for the balance of the proceeds due to him as a result of the taking of the accounts. Defendant denied that moneys were owing to plaintiff. Mr. McVeagh said the question at issue was actually whether a commission of £7OO charged by Mandeno Jackson. Ltd., auctioneers, at the instance of the defendant as second mortgagee, was reasonable. He contended it was monstrous. Plaintiff had owned two sections in Anzac Avenue and "Bagnall’s Building” had been erected thereon. The land was subject to a first mortgage of £20,000. Bagnall later raised a* second mortgage of £5,600. Plaintiff got into default under this second mortgage and the second mortgagee sold the property through Messrs. Jackson. The price realised totalled £28,000. The firm charged £7OO, being commission at the rate of 2 A per cent. Mr. Richmond contended that plaintiff should be non-suited as defendant did not in fact employ the auctioneers, but they were employed by the registrar of the Supreme Court in the ordinary course of law. There was no means of recovering the commission paid, for that reason. The practice of charging on the gross proceeds of a sale had been in effect for 30 years. It was universal practice. “It Is time it was stopped,” said Mr. McVeagh. (Proceeding.)