![Troubled waters: Businessman John McMurrick's case against agency Kay and Burton and director Ross Savas was adjourned ...](http://web.archive.org./web/20170731043658/http://www.afr.com/content/dam/images/g/r/w/b/t/q/image.related.afrArticleLead.620x350.gxkilp.png/1501472921871.jpg)
There's turbulence in Toorak. Melbourne blue blood John McMurrick is taking real estate agency Kay & Burton to court on Monday in a misleading conduct case that could make agents accountable for the prices they promise ahead of a sale.
Mr McMurrick, a former Liberal Party donor who quit the party last year over its proposed superannuation changes, is seeking almost $1.5 million in damages in Victoria's Supreme Court. At issue is the sale of a house he renovated at 46 Canberra Road in Melbourne's most prestigious suburb, and which expected to sell for up to $8 million, but which sold for only $6.5 million.
Mr McMurrick sold his insurance brokerage Freeman McMurrick to Aon in 2006 and had renovated and sold a number of properties in Toorak – including the 2 Hopetoun Road house he sold to former ANZ boss Mike Smith for $9.65 million in 2007. He said he based the project on an estimate by Kay & Burton director Ross Savas that failed to take into account the effect a flooding overlay would have on the property's value.
"Kay & Burton failed to warn, or warn adequately, John McMurrick about the material risks to which he would expose himself," Mr McMurrick's statement of claim alleges.
"Kay & Burton failed to supervise, monitor or control Ross Savas in his dealings with John McMurrick in respect of the property and the advice... Kay & Burton made the pre-contractual representations without qualification or any sufficient qualification."
In its defence document, Kay & Burton says Mr Savas only gave an estimated sale price of between $6 million and $6.5 million. The agency admits Mr Savas did not disclose any factors that could lower the sale price, but says it was not requested to disclose any such factors, nor was it under any duty to do so.
Real estate agents have long promised vendors what they could get for their properties. But very few of them get hauled into court to account for it.
"The simple fact is that the maths didn't work," said David Morrell, a buyers' advocate based in Melbourne eastern suburbs. "The funny part is that he and Savas were best mates. This is a fallout of major proportions."
The risk for the industry is that it sets a precedent holding agents to their promises.
"Where this might set a precedent is that what an agent promises to get you prior to selling it and doesn't get it – has the owner now got a right to action against them?" Mr Morrell said.
"If they do set a precedent like this, all hell will break loose. There are a lot of agitated owners who've been promised the world and it's not delivered. It's a Pandora's box in terms of real estate agency practice."
Mr McMurrick's solicitor Isaac Apel declined to comment. Kay & Burton gave a short statement supporting its position.
"Kay & Burton will not be commenting on the matter, other than to say the agency is fully confident of its position and that the legal process, which is being run by its insurers, will vindicate that position," it said.