“I introduced the buyer to the property, so I should get the commission.” Which case won?
Vendor signs non-exclusive agency agreements with real estate agents to sell property
Two property sellers owned a 55-acre property containing a macadamia plantation in the hinterland of Byron Bay.
In November 2012, they signed an agency agreement appointing Agent 2 to sell their property. This agreement provided for an exclusive agency period from November 2012 to May 2013 and for a non-exclusive period thereafter.
In August 2015, the sellers also entered into a non-exclusive agency agreement with Agent 1 to sell their property.
The agency agreements provided for the sale price of the property to be “$5 million plus” or responsive to “offers over $5 million”.
Agent 1 shows property to Ms W
On 4 December 2017, Ms W contacted Agent 1, expressing an interest in buying an income-producing property.
Agent 1 had several discussions with her about the property, arranged an inspection and provided substantial information.
Sale agreement reached but sellers withdraw
On 21 December 2017, Ms W made an offer of $4.5 million to buy the property.
Negotiations ensued and the sellers and Ms W verbally agreed to a sale at $4.7 million.
On 27 December 2017, prior to the exchange of contracts, Agent 1 forwarded to Ms W an email he had received from the sellers, withdrawing their acceptance of Ms W’s offer.
Ms W was shocked by this news.
Agent 1 goes on holiday and Ms W unsuccessfully tries to contact him
Agent 1 also advised Ms W that he could not contact the sellers and that he was leaving on an overseas holiday that afternoon.
He reassured Ms W that he would be available via email and was also leaving his mobile phone with one of his staff, so he would be contactable at any time.
Later that day, Ms W rang Agent 1’s mobile in an attempt to “try and understand if there is a way forward here”. Agent 1’s secretary answered and offered Ms W an appointment in a few weeks’ time upon his return. Ms W declined this suggestion as unhelpful.
Ms W contacts Agent 2, who contacts sellers on buyer’s behalf
Ms W decided to look at other properties and contacted Agent 2 to enquire about the market.
When Agent 2 asked Ms W if there were any properties she had already seen and liked, Ms W mentioned the property with the macadamia plantation she had been shown by Agent 1.
Agent 2 then contacted the sellers on Ms W’s behalf and was advised that they would not accept less than $5 million for the property.
Ms W buys property and Agent 2 receives sales commission
On 29 December 2017, Ms W confirmed that she was prepared to pay $5 million for the property, plus $125,000.00 for the assignment of the management contracts for the macadamia farm and the sale of other machinery.
The sellers accepted this offer and contracts were exchanged on 11 January 2018.
Settlement took place on 15 March 2018 and a sales commission of $108,086 was payable to Agent 2.
Agent 1 sues sellers for sales commission
Agent 1 was aggrieved at not receiving the sales commission and sued in the District Court to recover the commission under the terms of the agency agreement.
The primary judge rejected Agent 1’s claim and Agent 1 appealed to the NSW Court of Appeal.