John McMurrick sues prominent real estate agency over sale of Toorak house

A legal stoush centred around the sale price of a grand Toorak house has been largely avoided after the dispute between a former Liberal Party donor and a prominent real estate agency and one of its directors settled out of court.

The Supreme Court trial opened on Monday to a warning from Justice John Dixon that the outcome of the case brought by ardent renovator and retired insurance broker John McMurrick​ against Kay & Burton and its joint managing director Ross Savas would stand as a permanent judge of the trustworthiness of both parties.

The house at the centre of the dispute, the Wayne Gillespie-designed 46 Canberra Road, was owned by the stepmother of Geoff Stansen, a mutual friend of both men. Mr Savas was the selling agent of that house and Mr McMurrick bought it in March 2012 for $3,905,000, intending to renovate it.

Mr McMurrick and Mr Savas had been friends for at least 10 years and socialised regularly, said Peter Cawthorn​, QC, counsel for Kay & Burton and Mr Savas. Now it is the conversations leading up to that purchase under scrutiny.

Counsel for Mr McMurrick, Michael Osborne, QC, told the court that all of Mr McMurrick’s previous property deals involved Kay & Burton to some extent – Mr Savas had bid on Mr McMurrick’s behalf at auction and advised him about renovations. In a reciprocal arrangement, “you do my insurance, I’ll do your real estate”, Mr Savas is alleged to have told Mr McMurrick.

Mr McMurrick claims Mr Savas told him to expect a post-renovation sale price of between $7.5 million and $8 million, a figure Mr Savas firmly disputes. His counsel contended the figure mentioned was $6 million to $6.5 million.

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The house sold for $6.5 million in February, 2015.

Mr McMurrick is claiming $1.5 million in costs incurred in the renovation and sale process. Mr Osborne said that Mr McMurrick placed considerable weight on Mr Savas’ opinions about the proposed renovation, given their history and the agent’s experience.

“If Savas had said ‘I can’t say, it depends on the renovation’, we wouldn’t have a case,” Mr Osborne said.

Mr Cawthorn said Mr Savas had no idea about plans to renovate and that Mr McMurrick must have been aware Mr Savas was acting in the best interests of the vendor. He said the context of the discussions about price meant the conversation should not have been taken as investment advice, and could not be reasonably relied on.

Mr McMurrick quit the Liberal Party last year after 40 years of membership amid the government’s changes to superannuation, including a 15 per cent tax on nest eggs valued at more than $1.6 million. He was also a longstanding member of elite fundraising group Higgins 200 Club.

Justice Dixon described the trial as high-risk given that it was to be contested “oath on oath” because of the lack of notes from either side to support the claims about what was discussed between Mr McMurrick and Mr Savas.

After the opening addresses, Justice Dixon ordered both parties to mediation in a bid to settle the case, which succeeded confidentially late on Monday.