Pullen & Anor v Lambert Willcox Estate Agents Pty Ltd [2019] QDC 104

District Court of Queensland|2019-06-27

APPEAL - CIVIL APPEAL - OPEN AGENCY AGREEMENT - ENTITLEMENT TO COMMISSION - whether the first agent is entitled to its commission for the sale of property when the second agent has an exclusive agency agreement - whether the first agent was the effective cause of sale - onus of proof - break in necessary causal relationship - question of fact

Uniform Civil Procedure Rules 1999 (Qld), rr 765(1), 783, 785

Chambers v Jobling (1986) 7 NSWLR 1

Dat & Anor v Gregory [2016] QCATA 36

Dearman v Dearman [1908] HCA 84; (1908) 7 CLR 549

Emmons Mount Gambier Pty Ltd v Specialist Solicitors Network Pty Ltd [2005] NSWCA 117

Farmcrest Pty Ltd (trading as Ray White Ascot) v Jager [2013] QDC 290

JJ Richard & Sons Pty Ltd v Precast Concrete Pty Ltd [2010] QDC 272

LJ Hooker Ltd v W J Adams Estates Pty Ltd [1977] HCA 13; (1977) 138 CLR 52

Mbuzi v Torcetti [2008] QCA 231

Moneywood Pty Ltd v Salamon Nominees Pty Ltd [2001] HCA 2; (2001) 202 CLR 351

Prestige Residential Marketing Pty Limited v Depune Pty Limited [2008] NSWCA 179

Rasmussen and Russo Pty Ltd v Gaviglio [1982] Qd R 571

Robinson Helicopter Company Incorporated v McDermott [2016] HCA 22; (2016) 90 ALJR 679

Teelow v Commissioner of Police [2009] QCA 84

Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531

[1] The appellants Mark and Tiana Pullen, appeal under s 45 of the Magistrates Court Act 1921 (Qld) ("the MCA"), against the decision of a Magistrate on 22 March 2018, ordering them to pay $38,500.00 to the respondent Lambert Willcox Estate Agents Pty Ltd for real estate commission on the sale of the appellant's Property at 19 Cheval Court Benowa.[1]

[2] Whilst a number of errors have been identified and argued on this appeal, the central issue for my determination is whether the Magistrate erred in finding that the respondent was the effective cause of sale of the Property.

[3] By section s 45(1) of the MCA, a party dissatisfied with a judgment in an action in which the amount involved is more than the minor civil dispute limit may appeal to the District Court as prescribed by the rules.[2] On an appeal from a Magistrates Court this court has the same powers as the Court of Appeal has to hear an appeal.[3]

[4] It follows that this appeal is one as of right and is made under Chapter 18 r 783 of the Uniform Civil Procedure Rules 1999 ("UCPR").

[5] On appeal, this court may relevantly: draw inferences of fact from facts found by the magistrate, or from admitted facts or facts not disputed; order a new trial on such terms as it thinks just; order judgment to be entered for any party; and make any order on such terms as it thinks proper.[4]

[6] Rule 765(1) [made applicable by r 785] provides that an appeal under Chapter 18 of the UCPR is an appeal by way of rehearing. A rehearing involves a "real" review of the original record of proceedings below rather than a fresh hearing.[5] The appeal judge is required to review the evidence, to weigh the conflicting evidence, and to draw his or her own conclusions.[6] This may mean overturning finding of primary facts made by a magistrate.[7] In undertaking this task, the judge should afford respect to the decision of the magistrate and bear in mind any advantage the magistrate had in seeing and hearing witnesses.[8] But an appeal court may interfere if the conclusion is "contrary to compelling inferences" in the case.[9] An appeal court will not usually disturb findings of fact if the evidence is capable of supporting the conclusion.[10] If this court concludes that an error has been shown such that the decision of the magistrate is wrong, the decision below should be corrected.[11]

[7] On 29 February 2016, the appellants appointed the respondent in writing to be their exclusive agent to sell the Property.[12] The relevant directors of the respondent at this time were Jesse Willcox and Mitchell Lambert. The respondent's appointment agreement with the appellants created an exclusive agency within the meaning of s 23 of the Property Occupations Act 2014 ("POA") from 29 February 2016 until 28 May 2016 and an open listing agency within the meaning of s 20 of that Act from 28 May 2016.[13]

[8] During the period of the exclusive agency the respondent undertook an extensive "no-price" marketing campaign to take the Property to auction. This campaign cost the appellants approximately $9,000.00[14] to $13,000.00.[15] The paraphernalia included illuminated signboards at the front and the back of the Property, professional photo shots, a floor plan, videos and coloured brochures. The Property was uploaded onto a number of internet real estate sites including a 45 day premiere on realestate.com and domain.com.au and a Gold Coast Bulletin editorial. The respondent also arranged and attended open home and private inspections of the Property and distributed brochures about the Property at similar open homes and through a letter box drop. The respondent provided written progress reports to the appellants on 30 March 2016, 5 April 2016, 19 April 2016 and 17 May 2016.[16] Despite this campaign, the Property was passed in at the auction held on 23 April 2016.[17] The highest offer to buy the Property received by the respondent during the exclusive agency was one of $1.5M on 23 May 2016.[18]

[9] After the auction, there were discussions back and forth between the respondent and the appellants about placing an asking price on the Property. This was somewhere between $1.9M to $2M, although Mr Lambert thought it may have been around $1.895M.[19]

[10] On 24 May 2016, the appellants sent the respondent a letter as follows:[20]

Thank you for the attached document and thank you for the letter of offer last night. Marks blunt response made me smirk! That's Mark!

I want you to know that both Mark and I have very high regard for you both. We think you are fabulous operators, highly professional, super to work with and will go far. I guess timing re selling Cheval Court has been a key factor in why we could not get this property away with you. Such is life and damn elections! Mark and I wish to thank you both for all of your assistance in attempting to sell 19 Cheval Court.

As Mark said, we are not totally sure what we will do once our Exclusive expires with you on May 28 (this Saturday). We are currently considering our options. We think we will give the property a marketing break before we try again. As you know, we are considering giving the property to Sam and Julia to market. We will keep you informed."

[11] The Property went to an open listing with the respondent after 28 May 2016. At the same time the appellants also listed the Property on this basis with a number of other real estate agents.[21]

[12] On 13 June 2016, the ultimate buyer of the Property Ms Cindy Zhu, first came onto the scene. Ms Zhu did not give evidence at the trial but it was uncontroversial that she spoke in broken English.[22] At 7.31pm on this day, the respondent received notification of a "new lead" through its listing of the Property on realestate.com.au. This lead was an inquiry by Ms Zhu stating she would like to: "Get an indication of price, Inspect the property."[23] Shortly afterwards Mr Willcox and Mr Lambert contacted Ms Zhu by telephone and email and arrangements were made for her to inspect the Property at 2.00pm on 15 June 2016.[24]

[13] Mr Willcox and Mr Lambert were running late for this inspection so Ms Pullen initially showed Ms Zhu (and her husband and her elderly parents) around the Property. Once they arrived, Mr Willcox and Mr Lambert took Ms Zhu [and her entourage] on a thorough walk around the Property and ran through all the things agents would typically do. Mr Lambert described it as "basically a normal inspection we conduct." [25] Mr Willcox estimated it took about 45 minutes to one hour.[26] It turned out that Ms Zhu was on the respondent's database as a result of her interest in an earlier campaign.[27] At this point Mr Willcox and Mr Lambert "were quite excited, because she's indicated interest".[28]

[14] Prior to 23 June 2016 and after a second inspection, Ms Zhu made a written offer of $1.65M. The respondent then negotiated a series of offers between Ms Zhu and the appellants.[29] During these negotiations the appellants made offers of $1.824M, $1.810M with a final offer of $1.795M. The appellant's offer of $1.795M came about as a result of the respondent agreeing to reduce its commission by $5,000.00. At this point the appellants' position was that they would not accept anything under $1.8M. But Mr Lambert and Mr Willcox on behalf of the respondent considered it prudent to keep the negotiations going as they knew Ms Zhu was going on a cruise and they felt Ms Zhu was very keen on the property.[30]

[15] On 21 June 2016 Ms Pullen send a text message to Mr Willcox as follows:[31]

"Jesse, I'm just talking with Mark via text re the meeting tonight and we both think we are wasting everyone's time re this offer as we won't get her up another 150K and we won't go below a figure without an 8 after the $1. We greatly appreciate your and Mitch's efforts but very much doubt we will get what we want for this place at this time. We are happy to discuss that one but we are still thinking, let's pull it, rest and give it our best shot in a month or two. T" [Emphasis added]

[16] Mr Willcox responded on the same day stating "I think it is worth the shot. Please give us the opportunity". [32]

[17] Shortly afterwards [sometime between 21 June and 23 June] Ms Zhu made a further offer of $1.71M. This offer brought the negotiations to a halt. Ms Zhu refused to raise her offer and the appellants refused to lower their offer. Ms Zhu told the respondent that she did not think the Property was worth $1.795M and that she needed more movement from the appellants before she was willing to go up any further.[33] The respondent told the appellants of Ms Zhu's lament but the appellants did not make a further offer at this point in time.[34]

[18] Ms Pullen accepted that the respondent told them all along that they were going to have to move down to meet the market. In a text to Mr Willcox on 23 June 2016 she said "Jesse. I mean it. I will not go below $1.8M Really. No. T"[35]

[19] At some point after 23 June 2016, Ms Zhu left on her cruise. There was some contact by email and telephone between the respondent [Mr Willcox] and Ms Zhu during this time.

[20] On 29 June 2016, Mr Willcox sent an email to Ms Zhu enquiring about the cruise and requesting she contact him on her return. This email also stated: "[i]n the meantime. I have attached the page of the contract with the sellers last countersign, if anything changes please let us know, even if you are still at $1,710,000." [36] On 3 July 2016 Ms Zhu responded with pleasantries but no reference to the Property.

[21] On 18 July 2016, the respondent was notified of a "new lead" through real estate.com.au. This enquiry came from Ms Zhu and asked "are you still the agent for this property? Cindy."[37] Mr Willcox met up again with Ms Zhu and tried to persuade her to "up" her offer of $1.71M. He also persisted in trying to get the appellants down from $1.795M. Neither party would budge.[38]

[22] On 19 July 2016, Ms Pullen sent a text message to Mr Willcox as follows: [39]

"Hello Jesse. I'm just here with the old boy chatting about the house and we think it's time to give it that break and take it off the net for a few weeks. Good thinking? It's still for sale of course but won't be exposed to the market. Things are pretty quiet so we think now is a good time to play it cool." [Emphasis added]

[23] Mr Willcox responded "done" on the same day. It follows that from 19 July 2016, the Property was no longer advertised for sale on realestate.com [or any other sites] as being on the respondent's books.[40] The respondent's signage at the Property was also taken down.

Appointment of third party agent to sell the Property

[24] On 8 September 2016, the appellants appointed Scott Anthony Euler and Nicola Corinne Buchanan of @realty Pty Ltd ("third party agent") in writing to be their exclusive agent to sell the Property.[41] Relevantly, this second agreement created a further exclusive agency within the meaning of s 23 of the POA, from 8 September 2016 to 23 October 2016 and an open listing agency at the expiration of that term.

[25] From early September 2016, the third party agent embarked on a fresh marketing campaign and a "re-launch" of the Property - revising the existing floor plans and updating photos.[42] There was no evidence that this campaign enticed any relevant offers.

[26] At 2.03pm on 20 September 2016 Mr Euler sent a text message to Mr Willcox stating:[43]

"Hi Jesse, Tiana mentioned to me that you still have your buyer interested in 19 Cheval at $1.72m. Is there anything you would like from us to try and get her to their ask of $1.8m? We would love to try and work with you guys to get it over the line. Kind regards, Scott Euler - @Realty"

[27] Mr Willcox did not recall receiving this message. His evidence was "[h]owever, we were of the believing that regardless of who put the deal together, we were entitled [to commission] anyway."[44]

[28] Shortly after sending the text message, Mr Euler received a phone call from Mr Willcox. Mr Euler's version of this conversation was that Mr Willcox told him that the respondent was not working with Ms Zhu, she had left for China and would not pay any more than where they had got her to previously [$1.71M].[45]

[29] Mr Willcox's version of this conversation was initially vague but under cross examination he denied "verbalising" that he told Mr Euler that Ms Zhu was looking elsewhere and was no longer interested in the Property.[46] Mr Willcox's version was that he told Mr Euler that Ms Zhu was "our premium buyer, and at that stage she would not go over 1.71 until the 1.795 came down."[47]

[30] On 5 October 2016, Mr Willcox sent an email with the subject line "touching base" to Ms Zhu asking her to call him. Ms Zhu simply responded that she had just come back from overseas.[48]

[31] At 12.12am on 11 October 2016, the third party agent received a "new lead" from realestate.com.au about the Property. This inquiry came from Ms Zhu stating:[49]

"I did show my interest last time this property was on market however price could not be agreed. Could u let me know the lowest possible price they would like to sell? Cindy"

[32] Mr Euler responded that same day as follows:[50]

Thank you so much for your enquiry and interest in this property.

I am going to give you a ring this morning so as I can help you finally buy this amazing property."

[33] As promised, the following day Mr Euler spoke to Ms Zhu. This was when the third party agent's "negotiation's and conversations [with Ms Zhu] started".[51] Mr Euler's evidence about this conversation was:[52]

"first, she was asking, you know, what would it take for the vendors to sell the property, what number did she need to be at, and I clearly intimated, as we were advertising, it needed to be around the 1.8, and we'd love to try and help her slowly move in that direction. She said she really liked the property, would possibly need another inspection, which we were going to help her with, and slowly encouraged her to come forward with an offer, and so I emailed back an offer to purchase." [Emphasis added]

[34] Following this exchange, there were a series of further telephone conversations and follow up text messages between Mr Euler and Ms Zhu. Mr Euler liked to follow up conversations with text messages because Ms Zhu "was Chinese with broken English".[53]

[35] Initially on 11 October 2016, Mr Euler emailed an "offer to purchase" form. This form he described as "just a non-legally binding document whereby a - - buyer can express interest on a particular property by putting down a purchase price, some conditions around that, and signing it, and then handing it back to the agent".[54] Also on 11 October 2016, Mr Euler sent a further two text messages to Ms Zhu confirming he had sent through this form and asking if she would like him to organise a private inspection of the Property. Ms Zhu responded: "thank you and will ask if needed." [55]

Offers exchanged during the third party agent's exclusive agency

[36] Following his earlier request to make an offer, on the afternoon of 12 October 2016, Mr Euler received a written offer (by email) of $1.728M from Ms Zhu.[56] On the afternoon of 12 October 2016, Mr Euler thanked Ms Zhu [by text] for this offer which he took to the appellants who did not make a counter offer but who he said "thanked me kindly for the offer but certainly well short of where they were still with their price."[57]

[37] Mr Euler continued to work with Ms Zhu, knowing that he needed to get her "well north" of $1.728M.[58] At 7.19pm on 12 October 2016 he sent her a text message stating that: "I really hope for you and your family you can get your offer to $1,778,000 for 19 Cheval Crt. Amazing buying for an amazing home. I look forward to hearing back from you".[59]

[38] Ms Zhu responded by text in the evening of 13 October 2016 asking Mr Euler to arrange a private inspection at lunchtime the next day.[60]

[39] In a text to the appellants on 13 October 2016 Mr Euler stated:[61]

"Hi guys, after lengthy discussion between the wife and the husband. They have increased their offer by another $10K. Latest offer: $1,738,000. I am still trying for more, but I am really unsure if I can get it out of them. I don't think they are going to pay anymore. We just have to keep punching on and hope someone walks through and offers more..." [Emphasis added]

[40] The appellants responded on 13 October 2016 as follows:[62]

"Good work Scott. Getting there. Another $42k and they have a deal. (: That's 1/43rd of the total price they would need to increase it by. Not much..."

[41] This text is consistent with what Mr Euler said at trial - that when he presented this offer to the appellants their response was: "great that we were moving in the right direction but certainly wasn't enough to buy the property at that time."[63]

[42] Mr Euler was not surprised by this response from the appellants because "I just know it's the work I'm doing to (a) walk a buyer up and bring a vendor down; that's part of [the] skill set".[64]

[43] Mr Euler met Ms Zhu for an inspection of the Property at midday on 14 October 2016. There was no cogent evidence about how long this inspection took or who exactly was present.[65]

[44] Around this time Mr Euler told Ms Zhu that she would need to go higher than $1.738M. He suggested to her that she really needed to offer at least $1.75M and he told her that "if we can get to that level, we've got a chance, but let's get it to a contract at that stage".[66] Mr Euler explained his reasoning behind the figure of $1.75M relevantly as follows:[67]

"Well, I just felt that I was having great success in slowly walking Cindy up, and I felt, if I got her emotionally attached by presenting it on a contract, that I could hopefully continue to move her northward again."

[45] At some point around 14 or 15 October 2016 Ms Zhu made an offer in a written REIQ Contract of $1.75M.[68]

[46] Following this offer the appellants countersigned the Contract with an offer at $1.758M.[69]

[47] At 12.04pm on 15 October 2016, Mr Euler sent Ms Zhu a text message as follows:[70]

"Hi Cindy, just seeing if you have spoken with your husband about 19 Cheval. If I was you, I would consider an increase to $1,758,000 and I will try my hardest to get the owners to agree."

[48] In his evidence at trial Mr Euler explained this text message as follows:[71]

"This - this text message above at the 1758 - we've already got the 175 on contract, and it's at that point that Mark and Tiana - I managed to walk them down with their high expectation - walk them back to countering at 1758, and - so that's where I was trying to get Cindy to move, and as you can see there, at that time at 8.04 pm on Saturday, the 15th, she was being steadfast in her offer of 1.75." [Emphasis added]

[49] At 8.04pm on 15 October 2016, Ms Zhu responded by text message as follows:[72]

"Hi Scott I had discussed with my husband and our last and final offer is now 1,750,000. We tried very hard to get to this number and hope you can get it for us".

[50] As the parties were $8,000 apart, Mr Euler approached the negotiations with Ms Zhu as follows:[73]

"Well, it was me saying to them how close they are since we did get the counter at 1758. We were talking $8000 difference, so I said, you know, "Cindy, you need to continue to work with us. We can get you there. We need to go a little bit more." She was going to offer the 2000, and I said, "Well, look, let's go the 2000 and throw 888 in there just for good measure."

[51] Mr Euler's evidence was that after this conversation he met again with Ms Zhu and she countersigned the Contract offer of $1,758M from the appellants with an offer of $1.752888M.

[52] The appellants accepted this offer and a Final Contract for the sale of the Property for $1.752888M was fully executed on 17 October 2016.[74]

[53] It was not in issue at trial or on appeal that other than price, the terms of the contract as had been negotiated to a point by the respondent and the third party agent were materially the same. Both contracts provided for 21 day finance. The only slight and immaterial difference was that the respondent's incomplete contract provided for a 14 day pest and building inspection and the Final Contract provided for a 7 day pest inspection clause.

[54] In finding for the respondent, the Magistrate reasoned relevantly as follows:[75]

"[7] It is not disputed that the defendants were unwilling to consider an offer of less than $1,800,000. The plaintiff procured their counter offer of $1,750,000 by offering to forgo $5,000 in commission.[76]

[12] It is not disputed that the defendant's decision to reduce their offer from $1,800,000 to $1,752,888 was unprompted by anything the other agency said.

'... you've now moved from your $1.8... to an offer of $l,780,000? - Probably.

...And that's without any prompting from Scott or Nicola, is it? - No, well... we adjusted our... what we wanted.

... Okay. And that's a move you've made in an attempt to meet the market. Do you accept that? - yep

Okay. And thereafter the offers and counteroffers moved towards each other? - Yes, they do, absolutely.'[77]

[13] It is not disputed that the defendants had not terminated their

agreement with the plaintiff at the time the sale was effected.

[15] The defendants' own evidence is that the plaintiff's agents advised the defendants from the beginning that they would have to lower their price expectation in order to sell the property. They acknowledge that they did not receive this advice from the third party agent nor did third party agent prompt them to lower their price. The defendants concede that as soon as they did lower their price the offers flowed between them and the buyer, and the property then quickly sold. The final negotiations have to be considered against the backdrop of the work undertaken by the plaintiff in the preceding months, including their advice to the defendants. I do not accept the defendants' contention that it was solely the marketing and negotiation skills of the third party agent that closed the sale.

[16] Not only did the plaintiff's advertising campaign capture the interest of the buyer in the first place, but it was the plaintiff's work that caused the buyer to be introduced to the defendants, inspect the property and enter into negotiations with the defendants. Relevantly this buyer was the only genuine prospect they had while the property was on the market. At no point did they receive an offer from anyone else that was close to the $1.8 million bottom limit they had set for themselves, against the advice of the plaintiff's agents. I find that, but for the defendants' failure to heed the advice of the plaintiff's agents, it is probable that the same result could have been achieved when the first round of negotiations took place. Despite this the plaintiff's agents got back in touch with the buyer upon her return from overseas. They also continued to try and contact the defendants in the hope that the might reignite the negotiations. Again it was the defendants' refusal to make any real counter offer and their decision to engage a new agent that stymied those efforts.

[17] It is clear on the evidence, when viewed objectively, that it was the defendants' refusal to accept the plaintiff's clear and repeated advice to lower their price expectations below $1.8 million that stymied the sale of the property.

[18] In my view the combination of those elements prove, on the balance of probabilities, that the plaintiff's agents were the 'effective cause' of the sale.

[19] It is clear on the evidence that the third party agent would not have been able to effect the sale without the plaintiff's efforts to attract, retain and remain in contact with the buyer, whilst they also continued to try and remain in contact with the defendants and impress upon them the need to lower their expectations." [Emphasis added]

[55] Before turning to each of the specific grounds of appeal, it is instructive to first consider the statutory basis of the respondent's claim for commission and the meaning of "effective cause of sale" as it is expressed in that legislation. Understanding the meaning of this expression is the key to resolving this appeal.

Effective cause of sale: relevant legal principles

[56] At the time of the sale of the Property, there was an open listing agency between the appellant and the respondent.

[57] An open listing is defined under s 20 of the POA to mean:

"An open listing is a written agreement entered into between a person (seller) and a property agent (selling agent) under which the seller appoints the selling agent, in accordance with the terms of the agreement, to sell stated property and under the agreement -

(i) to sell the seller's property during the term of the agreement; or

(ii) to appoint additional property agents as selling agents to sell the property on terms similar to those under the agreement; and

(b) the appointed selling agent is entitled to remuneration only if he or she is the effective cause of sale; and

(i) the seller giving the selling agent written notice of the ending of the appointment; or

(ii) the selling agent giving the seller written notice of the ending of the appointment." [Emphasis added]

[58] Clause 5 of the terms and conditions of the agency agreement between the appellants and the respondent relevantly states as follows:

"5.1 The client agrees to pay the Agent Commission as specified in Part 7 of the Appointment of Property Agent if a Contract of Sale of the Property is entered into with a Buyer, whether within the Term or after the Term, where the Relevant Person is "the effective cause of the sale within the Term..."

5.2 For the purposes of Clause 5.1 a Relevant Person is, where the Appointment of the Property Agent is for:

5.2.1 an Exclusive Agency, any person (including the client); or

5.2.2 a Sole Agency, any person other than the Client; or

5.2.3 an Open Listing, the Agent only." [Emphasis added]

[59] It follows that the respondent was not entitled to its commission unless it was the "the effective cause of sale" of the Property. This term is not defined in the POA. The authorities establish that whether a person was an effective cause of sale is a question of fact,[78] with the onus on the agent claiming commission.[79]

[60] In LJ Hooker Ltd v W J Adams Estates Pty Ltd [1977] HCA 13; (1977) 138 CLR 52 Jacob J observed that the enquiry is a factual one and there is no real distinction between the phrases "the effective cause" and "an effective cause", identifying relevantly that:[80]

"'Effective cause' means more than simply 'cause'. The inquiry is whether the actions of the agent really brought about the relation of buyer and seller and it is seldom conclusive that there were other events which could each be described as a cause of the ensuing sale." [Emphasis added]

[61] In Moneywood Pty Ltd v Salamon Nominees Pty Ltd [2001] HCA 2; (2001) 202 CLR 351 Gummow J observed that:[81]

"The notion of "effective cause" reflects the requirement expressed in a long line of cases that it is not enough that the engagement of the agent to find a purchaser or to introduce a purchaser was a step without the taking of which the sale would not have been effected. Something more immediate is required if the criterion of contractual liability is to be satisfied." [Emphasis added]

[62] There needs to be a causal connection between the work done by the real estate agent and the ultimate sale of the property.[82] In the case of Rasmussen and Russo Pty Ltd v Gaviglio [1982] Qd R 571, the court found that there had been a break in the causal relationship between the agent's actions and the ultimate sale, which disentitled the agent to commission. The contract in this case was subject to finance. The first real estate agent was unable to obtain finance for the purchaser; whereas the second real estate agent was able to secure finance through a financier that did business only through that agent. Subsequently, the purchasers entered into a new contract with the vendor through the new real estate agent and the new agent was entitled to commission as it had satisfied the condition of finance. The original real estate agent sued for its commission. The trial judge found in favour of the original agent, however the Full Court allowed an appeal by the vendor, holding that there had been a "break in the necessary 'causal relationship' between the actions of the agent and the sale."[83]

[63] To satisfy the issue of causation, the agent is required to prove that its initial efforts flowed through such that it was, in a real sense, the cause of the ultimate sale or that its efforts continued to influence the purchaser in its eventual decision to buy. [84]

[64] It follows that the onus is on the respondent in claiming an entitlement to commission to show that its actions really brought about the relationship of buyer and seller between the appellants and Ms Zhu.

[65] With these facts and principles in mind I now turn to deal with the appeal grounds.

[66] Grounds 1 and 2 raise the central issue in this appeal. Ground 1 is that the Magistrate erred in fact and in law in finding that the respondent was the effective cause of sale. Ground 2 is that Magistrate erred in failing to find that, on the weight of the evidence, the respondent was not the effective cause of sale. My conclusion in relation to these issues flows from my findings in relation to grounds 4 and 6, which I will address first.

[67] There is an overlap between grounds 4 and 6 of the Appeal so I will deal with them together.

[68] By ground 4 the appellants submitted that the learned Magistrate erred in finding first that the appellants' reduction in purchase price was not prompted by the conduct of the third party agent and second that the appellants conceded that as soon as they did lower their price the offers flowed between them and Ms Zhu.[85] By ground 6 the appellants submitted that the Magistrate erred in finding, without any contextual analysis, that the appellants were not willing to reduce their price during the respondent's negotiations on their behalf.[86]

[69] The findings at paragraph [12] and [15] of the Judgment need to be considered in the context of all of the evidence.

[70] The reality was that the respondent was unable to obtain further offers from Ms Zhu above $1.71M after 23 June 2016.

[71] But four months later the third-party agent was able to obtain three further offers from Ms Zhu, without any movement from the appellants. The offers from Ms Zhu were:

[72] It is reasonable to infer that her making these offers was as a result of the third party agents negotiations skills.

[73] It was only after these three offers were made to them that the appellants dropped their asking price.

[74] On or about 16 October 2016, the third-party agent obtained a counteroffer from the appellants in the sum of $1.758M. At this point Ms Zhu refused to move from the offer of $1.75M.

[75] Again on or about 16 October 2016, the third-party agent was able to obtain a counteroffer from Ms Zhu of $1.752888M. It was this offer that was ultimately accepted by the appellants on 17 October 2016. The efforts of the third-party agent resulted in an offer from Ms Zhu that was $52,888 more than the offer obtained by the respondent.

[76] In my view the alleged concession by the appellants under cross examination, relied upon by the Magistrate at [15] of the Judgment, ought to have been considered in the context of the uncontroverted evidence that offers had flowed from Ms Zhu prior to any movement from the appellants. I accept the appellants' submission that in that sense the Magistrate's finding misconceived evidence as uncontested when it was not.

[77] It is correct that the appellants conceded at trial that the asking price had been reduced to meet market demands. However, even if it was to meet market demands, it was subsequent to the three further offers obtained by the third-party agent from Ms Zhu.

[78] It was uncontested that the respondent was unable to obtain an increased offer above the offer of $1.71M from Ms Zhu subsequent to 23 June 2016. What the Magistrate's findings fail to take into account in my view is that the appellants refused to reduce their asking price with the third party agent until such time they were able to obtain three further offers from Ms Zhu. The respondent had been unable to elicit such offers from Ms Zhu.

[79] It follows and I find that the appellants were prompted by both the third-party agent and market demands to reduce the asking price.

[80] The appellants submitted that the Magistrate erred in finding, without any contextual analysis, that the appellants were not willing to reduce their price during the respondent's negotiations on their behalf.[87] The respondent relies on the evidence that it had advised the appellants to reduce their asking price for the Property and the appellants failed to act on this advice. The respondent submits that because the appellants reduced their price to meet the demands of the market, this means that it was not prompted by the third-party agent and therefore the causal connection was not broken.[88]

[81] My conclusion at [77] above deals with this ground also.

[82] By ground 3 the appellants submitted that the Magistrate erred in finding that it was the respondent's marketing campaign that captured Ms Zhu's interest in the first place. [89]

[83] The uncontroverted evidence was that the respondent undertook an extensive marketing campaign during the period of the exclusive agency. The marketing campaign included uploading the property onto a number of internet sites including realestate.com. When the Property went to an open listing agency with the respondent, this site (and others) remained up until 19 July 2016. The evidence was that about two weeks into the open listing agency Ms Zhu contacted the respondent through realestate.com.

[84] It is not readily apparent from the Judgment what aspect of the advertising campaign the Magistrate was referring to and there was no evidence from Ms Zhu. But in my view, it is reasonable to infer (and I do) that the Magistrate was referring to the advertising on realestate.com which was part of the respondent's advertising campaign. It follows and I find that this ground is without merit.

[85] Further, and again whilst Ms Zhu did not give evidence, it was a reasonable inference open on the evidence for the Magistrate to accept [and it was uncontroversial at trial] that it was the respondent who: was contacted by Ms Zhu [through her contact with the respondent on realestate.com] during the term of the open agency listing; introduced Ms Zhu to the appellants; conducted inspections of the Property with Ms Zhu; and entered into contract negotiations on behalf of the appellants with Ms Zhu.[90]

[86] But an introduction is not sufficient. As Justice Gibbs relevantly observed in the LJ Hooker decision: [91]

"when an agent is employed to sell a property, or to find a buyer, he does not earn his commission simply by finding someone who is ready, willing and able to buy, or who offers to buy."[92]

[87] In my view this ground distracts from the real issue in this case - has the respondent established on the evidence that it was the effective cause of sale.

[88] The appellants submitted that the learned Magistrate erred in finding that it was undisputed that the open listing was not terminated. [93]

[89] Part 5 of Form 6 provides,[94] that the appellants "may terminate [an open listing] in writing...at any time". The appellants submit that the use of the word "may" is of importance.[95]

[90] Section 20(c) of the POA relevantly provides:

"(c) the appointment of the selling agent can be ended, at any time, by either -

(i) the seller giving the selling agent written notice of the ending of the appointment; or

(ii) the selling agent giving the seller written notice of the ending of the appointment."

[91] The appellants submit that neither Form 6 nor section 20(c) of the POA prescribes a mandatory regime for termination of an open listing and that the termination can be done by conduct in mutually agreeing that the open listing has come to an end.[96]

[92] The appellants allege that the open listing was terminated by agreement in early September 2016 when the appellants notified the respondent, through Mr Willcox, to the effect that the agency was at an end on the appointment of the third party agent as exclusive agents and Mr Willcox advising his disappointment but accepting this to be the case.[97]

[93] The respondent submitted that this ground is without merit because of the fact that there was an open listing which remained in place at the relevant time was not a controversial fact at trial.

[95] Prior to the commencement of the trial, the Magistrate asked the parties to clarify whether commission was sought on an exclusive or open listing basis.[98] Consequently, the respondent's counsel amended the statement of claim to reflect the respondent's case to be that: "the agency agreement was one for an exclusive agency within the meaning of section 22 of the Property Occupations Act between 29 February 2016 and 28 May 2016, and thereafter, one for an open listing within the meaning of section 20 of the Property Occupation Act 2014." This contention was accepted by counsel for the appellants.[99] It was also admitted on the pleadings.[100]

[96] This ground is another distraction. Both parties are in agreement that the relevance of this issue is limited - with the relevant question being whether the respondent was the effective cause of sale.

[97] It follows and I find that this ground is without merit.

Other issue - the terms of the open listing agency agreement

[98] The appellants sought to argue by this appeal that under clause 5.2.3 of the terms of the respondent's appointment for the open listing, the respondent is only entitled to commission in the event that it is found to be the only effective cause of sale.[101] This issue was not raised at the hearing below, nor was it raised on the pleadings. Given my ultimate findings in this case it is unnecessary for me to consider this issue further.

[99] In my view, there was a break in the necessary causation in this case. The evidence does not support a finding that the respondent's initial efforts flowed through such that it continued to influence Ms Zhu in her eventual decision to buy the Property. It was not the appellants' refusal to counteroffer that prevented the sale during the negotiations with Ms Zhu by the respondent. It was the respondent's inability to obtain any higher offer from Ms Zhu after 23 June 2016.

[100] Once the third party agent obtained three further offers from Ms Zhu, the appellants agreed to lower their price below $1.795M. Ms Pullen comments under cross examination that "[t]he proposition that I accept is that Scott was very, very good at talking one of us up and the other down" is most apposite and consistent with this finding. [102]

[101] On the above analysis and having reviewed all of the evidence and the Judgment, in my view the evidence does not support a finding that the respondent's action really brought about the relationship of buyer and seller between the appellants and Ms Zhu.

[102] It follows and I find that the respondent was not the effective cause of sale of the Property.

[103] On the above analysis I therefore order that the:

2. Judgment of the Magistrates Court dated 22 March 2018 is set aside;

[104] Given my decision, ordinarily the appropriate order would be that the respondent pay the appellants costs of the appeal and the proceedings below. But I will hear the parties as to costs. To that end I direct that any submissions in respect of costs, or alternatively a proposed draft order if the parties are agreed, be exchanged and emailed to my Associate by 4.00pm Friday 26 July 2019.

[1] Lambert Willcox Estate Agents Pty Ltd ACN 608 390 834 v Pullen &Anor (unreported, Brisbane Magistrates Court, 22 March 2018, Hay P) ("Judgment"). Whilst the claim was for $38,500.00, the exact amount of the judgment (i.e. the total of the claim, costs and interest) was not apparent from a review of the original record or from the parties' submissions.

[2] The minor civil dispute limit is defined under s 45(5) of the MCA as being "the amount that is, for the time being, the prescribed amount under the Queensland Civil and Administrative Tribunal Act 2009." Schedule 3 of that Act provides that the prescribed amount is $25,000.

[3] District Court of Queensland Act 1967 (Qld), s 113. The powers of the Court of Appeal are set out in UCPR r 766.

[4] Magistrates Court Act 1921 (Qld), s 47. As this is an appeal under the UCPR, this court also has powers under r 766(1) of the UCPR.

[5] Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at 126.

[6] Mbuzi v Torcetti [2008] QCA 231 at [17].

[7] JJ Richard & Sons Pty Ltd v Precast Concrete Pty Ltd [2010] QDC 272 at [16] per McGill SC DCJ;

[8] Robinson Helicopter Company Incorporated v McDermott [2016] HCA 22 at [43]; (2016)

[2016] HCA 22; 90 ALJR 679 at 686 [43]; Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at 126-127, citing Dearman v Dearman [1908] HCA 84; (1908) 7 CLR 549 at 564; [1908] HCA 84.

[9] Chambers v Jobling (1986) 7 NSWLR 1 at 10; see Dat & Anor v Gregory [2016] QCATA 36 at [7].

[10] Dearman v Dearman [1908] HCA 84; (1908) 7 CLR 549 at 561; Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at 125-126.

[11] Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at 127 - 128, [27]; see Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531 at 551; see the discussion by McGill SC in JJ Richard & Sons Pty Ltd v Precast Concrete Pty Ltd [2010] QDC 272 at [8]- [19] with reference to Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172 at 180-181 and Teelow v Commissioner of Police [2009] QCA 84 at [4].

[12] The Property Occupations Form 6 dated 29 February 2016 entered into pursuant to the Property Occupations Act 2014 (Qld) is at Exhibit 1, Doc 5.

[13] Amended statement of claim [3A]; admitted by the amended defence [3A].

[16] Exhibit 1, Doc 8, 10, 11, 12 and 15.

[18] Exhibit 1, Doc 35 is the text message from Mr Willcox to the appellants confirming this offer.

[19] Mr Lambert's evidence in chief at T1-22 L6-7, 28.

[21] These listings were not relevant to the trial so unsurprisingly there was no other evidence about them at trial.

[22] Mr Euler's evidence in chief at T1-72 L46.

[24] The email from Mr Willcox to Ms Zhu making the arrangements is located at Exhibit 1, Doc 18.

[25] Mr Lambert's evidence in chief at T1-24 L15-16.

[26] Mr Willcox's evidence in chief at T1-42 L23, 34.

[28] Mr Lambert's evidence in chief at T1-24 L10-11.

[29] The uncompleted REIQ contract reflecting these offers is at Exhibit 1, Doc 9.

[30] Mr Lambert's evidence in chief T1-28 L20-35.

At a glance

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Judgment (245 paragraphs)

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Legislation Cited (5)

Cases Cited (9)