Simeon Property Pty Ltd v Chadban; Chadban v Simeon Property Pty Ltd

THE CLAIMS OF THE PARTIES AND THE PROCEDURAL HISTORY OF THE MATTERS IN THE TRIBUNAL

1. On 4 March 2020, Simeon commenced proceedings in the Local Court against the owners for payment of the commission ($68,200) plus interest and legal costs.
2. On 25 May 2020, the proceedings were transferred by consent of the parties to NCAT. Those proceedings became Matter Gen 20/23138.
3. As part of its Defence to the Local Court proceedings, the owners had asserted that they were not liable to pay commission to Simeon, and sought orders under s 36 of the Property and Stock Agents Act 2002 (NSW) that: 1. Simeon is not entitled in whole or part to the commission. 2. Simeon's clam for the commission is not reasonable, and 3. If Simeon's claim for the commission was upheld, it be reduced to a "reasonable sum".
4. When the Local Court proceedings were transferred to NCAT, the NCAT Registry established two files. Matter Gen 20/23128 was Simeon's claim for payment of the commission. Matter Gen 20/25824 was the owners claim that they not have to pay the commission, or in the alternative, that the commission amount be reduced to a "reasonable sum".
5. The proceedings were listed for a directions hearing on 5 August 2020. By consent, both parties were granted leave to be legally represented, and there was a timetable for the filing and serving of documentary evidence.
6. The matter was listed for hearing at the Tribunal on 23 September 2020. The hearing was conducted by telephone. At the conclusion of the hearing, Counsel for both parties made oral submissions, but sought to supplement the oral submissions with written submissions.
7. A timetable was made for the filing and serving of written submissions, and the filing of an agreed transcript. That timetable was subsequently extended for reasons including a delay in obtaining a transcript.
8. Ultimately, the following documents were provided by the parties: 1. Agreed transcript of hearing. 2. Simeon's submissions dated 12 November 2020. 3. Chadban's submissions dated 2 December 2020. 4. Simeon's submissions in reply dated 8 December 2020.
9. In respect of s 36 of the Property and Stock Agents Act 2002 (NSW) no submission was made by the Chadban's that a claim for the commission had not been made by Simeon in accordance with s 36 (1) of that Act.
10. The submissions of the parties focussed upon two issues: 1. Did Simeon, in the period prior to 6 September 2020 (when the owners terminated the "open agency agreement" with Simeon) "effectively introduce" Ms Zhang to the property so as to enliven the contractual right for payment of a commission to Simeon under Clause 2 of the "open agency agreement"; and 2. If so, should the commission be held not to be payable or be reduced on the basis that the amount, in whole or part, is not reasonable (s 36 (4) (b) of the Property and Stock Agents Act 2002 (NSW))?

JURISDICTION OF THE TRIBUNAL

1. Section 36 of the Property and Stock Agents Act 2002 (NSW) states as follows: 36 Review of commission and fees (1) An action or other proceedings cannot be commenced by a licensee for the recovery of remuneration or any sum as reimbursement for expenses until the expiration of 28 days after a statement of claim has been served personally or by post on the person to be charged with the remuneration or expenses. (2) The statement of claim must be in writing, set out the amount claimed and contain details of the services performed by the licensee in respect of which the remuneration or expenses are claimed. (3) If money has been paid to or is or has been retained by a licensee (out of money received by or paid to the licensee) in respect of any transaction by or with the licensee as a licensee and has been so paid or retained as remuneration or as reimbursement for expenses in connection with the transaction, the person paying the money or the person who would be entitled to the money had the money not been retained, may require the licensee to furnish the person with an itemised account of the transaction in accordance with the regulations. (3A) A requirement by a person under subsection (3) must be in writing. (4) A person who is served with a statement of claim under this section or is provided with an itemised account of a transaction as provided by this section may apply to the Tribunal for the determination of a consumer claim within the meaning of Part 6A of the Fair Trading Act 1987 in relation to - (a) the entitlement of the licensee to the whole or any part of the amount specified in the statement of claim or the itemised account, or (b) whether the whole or any part of the amount is reasonable, or both. (5) For the purpose of the application of Part 6A of the Fair Trading Act 1987 to that person, a reference in that Part to a consumer is taken to include a reference to that person. (6) The Tribunal has jurisdiction to hear and determine any such consumer claim despite - (a) the terms or conditions of any agreement or contract entered into between the licensee and the applicant, and (b) the amount being more or less than the maximum amount (if any) of remuneration to which a licensee is entitled under this Act. (7) This section does not limit Part 6A of the Fair Trading Act 1987. (8) In this section - expenses means expenses or charges incurred in connection with services performed by a licensee in his or her capacity as a licensee. remuneration means remuneration by way of commission, fee, gain or reward for services performed by a licensee in his or her capacity as a licensee.
2. By reason of s 79S (6) (b) of the Fair Trading Act 1987 (NSW) ('the FT Act'), the monetary jurisdictional limit of $40,000 for consumer claim disputes in the Tribunal does not apply to this dispute.
3. The owners were "consumers" within the definition of s 79D of the FT Act, as Simeon supplied services to them in trade or commerce pursuant to the written "open sales agency agreement".
4. The owners claim is a "consumer claim" under s 79E (1) (c) of the FT Act, because they seek the remedy of relief from payment of a specified sum of money arising from the supply of services to them in trade or commerce by Simeon.
5. As the relevant events occurred in 2019, it is clear that that the cause of action of the owners to determine whether or not Simeon is entitled to payment of the commission accrued within 3 years of the date of commencement of proceedings under s 79L of the FT Act (Evans v Baystate Pty Ltd t/as Domaine Plus Real Estate [2020] NSWCATAP 275).
6. Accordingly, the Tribunal has jurisdiction to determine the owners proceedings in Matter Gen 20/25824. Pursuant to s 79N (d) of the FT Act, the Tribunal can order relief from payment of monies in consumer claim proceedings.
7. In determining the owners proceedings, by reason of s 79O of the FT Act, the Tribunal (if it is satisfied it is appropriate to do so) can make orders in favour of Simeon.
8. Section 79O of the FT Act states as follows: 79O Orders in favour of respondent (cf CC Act 1998, s 8 (2)) In determining a consumer claim wholly or partly in favour of a respondent to the claim, the Tribunal may make any one or more of the following orders that it considers appropriate - (a) an order dismissing the claim or a part of the claim, (b) an order that requires the claimant to pay to the respondent a specified amount of money, (c) an order that requires the claimant to return to the respondent specified goods which are in the possession or under the control of the claimant, whether the property in the goods has passed or not.
9. The Tribunal has jurisdiction in Matter Gen 20/25824 and by reason of ss 79N and 79O of the FT Act, can make the orders that each party seeks in the proceedings.

EVIDENCE OF THE PARTIES

1. The parties relied upon the following documentary evidence:

Simeon 1. Statements of Richard Simeon dated 18 June 2020 and 24 August 2020. 2. Statement of Mark Manners dated 24 August 2020.

Owners 1. Statements of Mark Jones dated 31 July 2020 and 17 September 2020 2. Statement of Alexandra Chadban dated 31 July 2020.

1. Mr Simeon is the sole director and principal of Simeon Property Pty Ltd. Mr Jones, as discussed previously, was the agent formerly employed by Simeon and currently employed by Stone.
2. Mr Manners is an agent who was a former employee and partner at Simeon. He worked at Simeon during the time period relevant to this dispute and had known Mr Jones in a personal capacity for over 20 years. According to Mr Manners, he had assisted Mr Jones to enter the real estate industry by obtaining employment at Simeon.
3. It is unclear whether Mr Manners was an employee of Simeon (which is how he referred to himself in evidence) or an independent contractor (which is how Mr Simeon referred to him during cross examination), but his precise employment status at Simeon has little or no relevance to the real issues in dispute. He was clearly working for Simeon during the relevant period.
4. At the hearing, Mr Simeon; Mr Manners; Ms Chadban and Mr Jones were called to give evidence and were cross examined.
5. The evidence of the witnesses can be relevantly summarised as follows:

Mr Simeon

1. Mr Simeon asserted that Mr Jones was, in his capacity as an employee and agent of Simeon, the agent with primary responsibility for the marketing and sale of the property, but Mr Jones was "supported" by Mr Manners, whose contact details were also included in marketing material for the property.
2. Mr Simeon stated that Simeon took steps to market the property including the online marking of the property to Simeon's database of potential purchasers; marketing the property to external buyers agencies; and producing or developing marketing materials of "eBooks" and full colour brochures.
3. Mr Simeon did not have any personal involvement in the marketing or the property or engaging potential purchasers other than a brief conversation with Mr Jones after Mr Jones had shown him the "open agency agreement" signed on 14 May 2019. According to Mr Jones, Mr Simeon remarked with words to the effect of "You're not going to sell that". According to Mr Simeon, he said words to the effect "You're not going to sell that for $3.5 million".
4. In cross examination, Mr Simeon agreed that Mr Jones was the "listing agent" with primary responsibility for the marketing of the property in his capacity as an employee of Simeon, and that, if the property was sold, Mr Jones would receive a percentage proportion of the commission as part of his employment agreement with Simeon. Mr Simeon did not accept that Mr Manners had "little or no" involvement in the marketing of the property.
5. Mr Simeon stated that an "eBook" and brochure of the property had been created by Simeon, which was standard practice. He believed that Mr Manners had done this, but he was not involved in supervising agents on a day-to-day basis. He believed that the property had been the subject of "weekly email blasts" to potential purchasers on Simeon's database, including during the period after Mr Jones resigned and before termination of the "open agency agreement".
6. Mr Simeon denied that the agency had taken no active measures to market the property after Mr Jones resigned and asserted Simeon still wanted to sell the property on behalf of the owners. According to Mr Simeon, the reason Simeon had not contacted Ms Zhang was that when Mr Jones resigned Mr Jones made no mention that any potential purchaser was interested in the property; and none of the email correspondence between Mr Jones and Ms Zhang (and the owners) had been copied to anyone else in the agency or details entered into the Simeon database.
7. It was put to Mr Simeon in cross examination that the email of Ms Zhang dated 8 August 2019 to Mr Jones indicated she was "not interested" in the property after having inspected it. Mr Simeon disagreed with this proposition and believed that Ms Zhang was clearly showing interest in purchasing the property and that Mr Jones should have informed him of this when he resigned.

Mr Manners

1. Mr Manners asserted that the Chadbans had come into contact with Simeon when Ms Chadban had attended an "open house" for a property in the vicinity of their property which Simeon was the agent and Mr Manners the listing agent. Mr Jones was "assisting" Mr Manners in respect of this property and attended the "open house" inspection. This occurred in about March 2019.
2. At this inspection, Mr Manners and Mr Jones had conversed with Ms Chadban about selling her property, and the difficulties she was having. Mr Manners and Mr Jones expressed that Simeon could be of assistance. On or about 2 April 2019 Mr Manners and Mr Jones met with Ms Chadban and discussed entering into an agency agreement.
3. According to Mr Manners, after the meeting on 2 April 2019, Mr Jones asked if he could "take the lead" on the Chadban property, and Mr Manners agreed.
4. Mr Manners stated that he prepared the "initial eBook" that was used to market the Chadban property and he performed work to market the Chadban property for sale. Such work involved sending emails to potential purchasers and showing the property to potential purchasers. Mr Manners provided evidence of emails to 4 persons who he had emailed and referred to the Chadban's property. Mr Manners stated that "to the best of his recollection" he had attended the Chadban property and showed it to "5 or 6 groups".
5. Mr Manners stated that around the time Mr Jones resigned from Simeon, he spoke to Mr Manners as to whether or not he could "take" the Chadban property with him when he left Simeon. Mr Manners responded by stating that he did not think that was appropriate. Mr Jones concluded the conversation by stating he would ask Mr Simeon whether he could 'take the property' with him to his new employer.
6. In cross examination, it was put to Mr Manners that he only attended the Chadban property on one occasion. Mr Manners stated that he attended the property on 5 or 6 occasions with "three different purchasers". Mr Manners did not recall an offer of $2.3 million being made during this period but stated that if such an offer was made it would only have been an oral offer and he would not have regarded it as genuine because it was far below the Chadban's asking price.
7. It was put to Mr Manners that the Chadban's property was being "advertised by other agencies" and he agreed he was aware of this. Mr Manners denied that he had not conducted any marketing campaign in respect of the property. Mr Manners stated that there was not "an email blast per se" from Simeon to potential purchasers after Mr Jones resigned, but he "sent the property to a couple of groups on 19 August, which is after Mark Jones had resigned".
8. Mr Manners did not agree that Mr Jones was the sole agent responsible for the marketing of the Chadban's property, but asserted it was a "joint listing". He agreed that Mr Jones was the "lead agent". Mr Manners did not contact the Chadban's to tell them Mr Jones had resigned. Mr Manners did not "follow up" Ms Zhang's enquiry about the property because Mr Jones did not tell him about the enquiry; no emails were copied or forwarded to him in regard to the enquiry; and he did not have access to Mr Jones emails.
9. When questioned about why he did not contact the Chadban's after Mr Jones resigned, Mr Manners stated that it was his understanding that Mr Jones was going to speak to Mr Simeon about 'taking' the Chadban property with him when he resigned, so Mr Manners did not think it was appropriate to contact the Chadbans until this issue had been resolved.

Ms Chadban

1. Ms Chadban stated that on 6 August 2019 Mr Jones brought Ms Zhang to inspect the property. At that stage, the property was on the market for $3.3-$3.5 million. Ms Chadban stated that Ms Zhang indicated she could not afford that price and showed "no further interest" as she left the property.
2. According to Ms Chadban, she had her husband found out "two or three weeks later" that Mr Jones had left Simeon and had gone on an overseas holiday. Ms Chadban and her husband then noticed that after Mr Jones left Simeon the weekly email list from Simeon to clients of Simeon looking for houses "off market" no longer had their property listed.
3. According to Ms Chadban, Simeon's "lack of communication and obvious disinterest in wanting to find a buyer" after Mr Jones left Simeon caused them to terminate the "open agency agreement" with Simeon on 6 September 2019.
4. Ms Chadban stated that she and her husband went overseas for a short period and were informed by Mr Jones that Ms Zhang had returned from overseas and was "back in the market but not at our previous price point". There were then "discussions" and "back and forth negotiations" with Ms Zhang, with Ms Zhang ultimately offering $3,100,000 to purchase the property.
5. Ms Chadban stated that "prior to the acceptance" of Ms Zhang's offer of $3,100,000 she and her husband "executed a new open agency agreement with Mark's new agency Stone".
6. Ms Chadban stated that she was aware that Mr Jones then attempted to "ensure" that prior to exchange of contracts that Simeon would not attempt to claim payment of a commission.
7. Ms Chadban stated that, in her opinion, it was Mr Jones efforts whilst employed by Stone and after he left Simeon that was "solely responsible" for Ms Zhang being sufficiently interested in the property to the point Ms Zhang was prepared to make an offer and was the "effective cause" of the sale.
8. In cross examination, Ms Chadban was asked about how she became aware Mr Jones had left Simeon. She stated she "hadn't heard from him for a while" and she "believed" she called the agency.
9. Ms Chadban stated that the first time she heard from Mr Jones after showing Ms Zhang the Chadban's residential premises was on 9 September 2019, when Mr Jones told her he was overseas and on holidays. Mr Jones made no mention of having a potential buyer for the property.
10. Ms Chadban stated she "didn't recall" whether Mr Jones asked her on 9 September 2019 to sign an agency agreement with Stone. Ms Chadban was asked whether it was Mr Jones idea or her idea to sign an agency agreement with Stone. Ms Chadban did not recall, but it was "probably" her idea. Ms Chadban was pressed as to whether Mr Jones suggested to her that she and her husband sign an agency agreement with Stone, in circumstances where she spoke to Mr Jones on 9 September 2019, and signed a written "open agency agreement" with Stone on 10 September 2019. Ms Chadban stated that it was "so long ago" she couldn't remember the conversation.
11. Ms Chadban was asked about when Mr Jones informed her that Ms Zhang had sent an email on 25 August 2019 expressing interest in the property, and when she was informed Ms Zhang was going to attend a further inspection with Mr Jones. Ms Chadban couldn't recall when this occurred. She recalled that she had her husband went overseas on 25 September 2019 and that Ms Zhang had expressed an interested in the property, but "not at our price point".
12. Ms Chadban was asked whether she was aware that Ms Zhang was inspecting the property with Mr Jones on 14 September 2019. She recalled being aware Ms Zhang was inspecting the property for the second time; but did not recall the date; and "I'd say I was outside the house and I'd gone for a drive with the dog" (T: 49:37-40).
13. Ms Chadban was asked when she and her husband first agreed with Ms Zhang in respect of a purchase price of $3,100,000. Ms Chadban stated she believed it may have been when she and her husband were overseas. When it was pointed out to Ms Chadban that a written sales advice was issued by Mr Jones for the sale of the property with a price of $3,100,000 on 16 September 2019, Ms Chadban stated she was "aware" of the sales advice but could not remember when the price of $3,100,000 was agreed upon because it was "it's a while ago" (T: 51: 11-12).
14. Ms Chadban was then questioned about the circumstances of exchanging contracts; settlement; the issue of when the possibility that both Simeon and Stone would claim a commission was raised with her and her husband; and her opinion that Mr Jones actions at Stone were the "effective" cause of the sale.
15. Ms Chadban stated that she had her husband had been informed about the possibility of separate agencies claiming payment of commission "a couple of weeks" prior to exchange of contracts, and that after she and her husband discussed the matter they decided to proceed with the sale. Ms Chadban maintained that she had her husband believed that Mr Jones' efforts whilst employed by Stone had been the "effective" cause of the sale.
16. As discussed previously, Ms Chadban disclosed in cross examination that Stone had agreed to indemnify her, and her husband should a Court or Tribunal find that Simeon was entitled to a commission.

Mr Jones

1. Mr Jones in his statement of 31 July 2020, stated that he only showed the Chadban's property to Ms Zhang whilst employed by Simeon on 6 August 2019. He asserted that Ms Zhang had "made it clear to me she had no further interest in the property, particularly at the price guide of $3.5 million, and no offer, formal or otherwise, was made".
2. Mr Jones stated that he was next contacted by Ms Zhang when she called him on 26 August 2019. According to Mr Jones, he told her he was no longer working for Simeon, but would be happy to assist Ms Zhang when she returned to Australia on 13 September 2019.
3. Mr Jones stated he was "aware" the Chadbans were "dissatisfied" with Simeon after his resignation and had terminated the "open agency agreement" with Simeon on 6 September 2019.
4. According to Mr Jones, he started work at Stone on 9 September 2019, and Stone signed an "open agency agreement" with Mr and Ms Chadban on 10 September 2019.
5. Mr Jones stated that he conducted an inspection of the property with Ms Zhang on 14 September 2019 and after "extensive negotiations" she agreed to purchase the property for $3,100,000. A "formal sales advice" was issued by Stone on 16 September 2019.
6. Mr Jones asserted that, during his time at Simeon, he was the person who had done the vast majority of the work in marketing the Chadban's property and Mr Manners had minimal, if any, involvement.
7. Mr Jones asserted that he had contacted Mr Simeon after Ms Zhang had agreed to purchase the property in regard to the issue of commission, but this was done "purely to put the purchasers at ease" and Mr Jones did not believe that Simeon was entitled to a commission.
8. In cross examination, Mr Jones stated that he was originally employed by Simeon on a salary, but by 2019 he was being renumerated on the basis of commission. Of the commission on a sale, Simeon would pay the agent a percentage of the commission, with the "lead agent" getting the majority of the percentage in comparison to the "supporting agent".
9. As discussed previously, Mr Jones gave evidence about the circumstances in which he resigned from Simeon and commenced employment at Stone.
10. Mr Jones was questioned about whether he had entered details regarding Ms Zhang's enquiry about the Chadban's property and attendance at the inspection on 6 August 2019 prior to his resignation on 15 August 2019. Mr Jones stated he could not recall whether or not he entered such details, but he, Mr Manners and Mr Simeon had regular discussions and meetings about the agency's listings. Mr Jones stated that Mr Manners would have "absolutely" been aware of Ms Zhang's enquiry.
11. Mr Jones was questioned about his email exchange with Ms Zhang after her inspection on 6 August 2019. Mr Jones accepted that he had sent her the agency 'eBook' and DA approvals for the property. However, Mr Jones did not accept that his email of 7 August 2019 was an attempt to encourage Ms Zhang to purchase the property. According to Mr Jones, the email was only "underpinning the value proposition" that the property was worth the price guide amount of $3,300,000 (T:66-68).
12. According to Mr Jones, he believed that Ms Zhang's response to his email of 7 August 2019 was simply that she "appreciated the email that I'd sent her underpinning the value proposition" (T:69:1-7) but that the price was "not appropriate in her mind".
13. Mr Jones denied having seen Ms Zhang's email of 25 August 2019 as he had "departed the company well before then" (T: 69:25-26).
14. Mr Jones was questioned about Ms Zhang's telephone call to him on 26 August 2019 when Mr Jones was overseas on holiday. According to Mr Jones, he told her that he had left Simeon, and that when Ms Zhang returned to the Australia in September 2019 he would be "happy" to assist her to "find a suitable property in Mosman" (T: 70:15-19).
15. Mr Jones stated that he had not spoken to Ms Chadban about the property after resigning from Simeon on 15 August 2019 until he telephoned Ms Chadban on 9 September 2019. This was his first day of employment at Stone. According to Mr Jones, Ms Chadban told him the Chadban's had terminated their "open agency agreement" with Simeon. Mr Jones then requested that the Chadbans enter into an "open agency agreement" with Stone.
16. According to Mr Jones, he made no mention of Ms Zhang being potentially interested in the property has he did not know when Ms Zhang was returning to Australia and was waiting on her to contact him when she returned to Australia. Mr Jones stated he did not make any mention of Ms Zhang to Mr and Ms Chadban until after the "open agency agreement" had been signed with Stone on 10 September 2019 (T:70-72).
17. Mr Jones stated that he conducted an inspection with Ms Zhang and her husband on 14 September 2019. He was not asked in cross examination when he and Ms Zhang had contact to arrange this inspection. Ms Zhang's husband also attended the inspection.
18. According to Mr Jones, Ms Zhang made an offer of $2,900,000 which was "rejected". Negotiations then occurred "over several weeks" (T:73: 24-33). Eventually, Mr Jones obtained an offer of $3,100,000, which he "presented" to the Chadbans.
19. Mr Jones agreed that a written sales advice is not issued until there is an agreement between a purchaser and vendor on price. He agreed that a written sales advice was issued on 16 September 2019, two days after the inspection on 14 September 2019 (14 September 2019 being a Saturday, and 16 September 2019 being a Monday). It was put to Mr Jones that it was "nonsense" that negotiations occurred over several weeks, and that Mr Jones evidence in that regard was not untruthful, but his recollection was incorrect. Mr Jones responded by stating (T: 73:14-15): "Based on my statements of receiving formal sales advice on the 16th of September, is correct., but the negotiations are also correct."
20. Mr Jones stated that he had not had any conversation with Mr Simeon about 'taking the Chadban's property with him' when he resigned from Simeon, as he did not believe there was any prospect Mr Simeon would agree to that course of action.
21. Mr Jones was questioned about the circumstances of his request to Mr Simeon that Simeon not make a claim for commission. Mr Jones maintained the position enunciated in his evidence in chief; being that he was only seeking confirmation from Mr Simeon that the owners would not face a claim for payment of two sets of commission for their "peace of mind". Mr Jones asserted that he had done nothing wrong, and Stone was entitled to the commission because an "open agency agreement" is different from an "exclusive agency agreement".
22. Mr Jones denied that he had sold the property through Stone because he would obtain a higher percentage of the commission than if the property was sold through Simeon.

APPLICABLE LEGAL PRINCIPALS

1. The first issue for consideration is whether, during the period of the Agency agreement between Simeon and the owners (i.e., the period from 14 May 2019 to 6 September 2019) Simeon "effectively introduced" Ms Zhang to the Chadbans, or to the property, and Ms Zhang subsequently entered into a binding contract to purchase the property.
2. The key authorities referred to by the respective parties in submissions are as follows: 1. LJ Hooker Ltd v WJ Adams Estates Pty Ltd [1977] HCA 13; (1977) 138 CLR 52 ('LJ Hooker'). 2. TP Carroll Realty Pty Ltd t/as LJ Hooker Neutral Bay v Moyes [1997] NSWCA 321. 3. Coolangatta Property Pty Ltd t/as LJ Hooker Murwillumbah v Dyason [2011] NSWSC 884 ('Coolangatta Property'). 4. Moneywood Pty Ltd v Salamon Nominees Pty Ltd [2001] HCA 2; (2001) 202 CLR 351. 5. Outerbridge t/as Plateau Lifestyle Real Estate v Hall [2020] NSWCA 205 ('Outerbridge').
3. Of the above authorities, Outerbridge is of particular relevance, because it is a very recent decision, and the NSW Court of Appeal discussed the majority of the earlier authorities referred to by the parties in submissions. It also discussed in detail the NSW Court of Appeal decision in Emmons Mount Gambier Pty Ltd v Specialist Solicitors Network Pty Ltd [2005] NSWCA 17.
4. Of the authorities cited above, Coolangatta Property is of little assistance in respect of the applicable legal principles. That case involved an exclusive agency agreement between an agent and vendor and did not involve a dispute where there were two consecutive agency agreements. Briefly, the facts of Coolangatta Property were that a company controlled by the vendor's father made an offer of sale through Coolangatta Property. The vendor subsequently told the agent that the property had been "withdrawn' from sale, and then soon afterwards entered an agreement to sell the property to the company controlled by her father. Contracts were then exchanged after the exclusive agency period had expired.
5. The decision was an ex-tempore decision of Ball J and the defendant did not appear at the hearing. In Coolangatta Property, Ball J stated at [11] that Clause 3 of the agency agreement (which used the phrase "effectively introduced") was "designed, amongst other things, to guard against the possibility that the purchaser and the vendor might collude to defeat the agent's right to a commission by exchanging contracts after the exclusive agency period expired".
6. There is no suggestion in this dispute that the Chadbans and Ms Zhang colluded in any way to attempt to circumvent the payment of a commission.
7. Outerbridge involved a dispute where there had been two "open agency agreements" with different agents. As in this dispute, the second agent was acting when the property was sold, and the first agent sought payment of commission.
8. The terms of the "open agency agreement" in Outerbridge was different to the terms of Clause 2 of the "open agency agreement" between the Chadbans and Simeon. In Clause 3.1 of the agreement in Outerbridge the agent needed to be the "effective cause" of the sale which was defined as follows: "If a person has been effectively introduced to the Principal or the Property by the Licensee during the Agency Period, (including another person who is introduced to the Principal or the Property by such person), and that person, either during the Agency Period or thereafter, enters into a contract to purchase the property or an interest in the property (which Includes by way of exercise of an option; and includes whether it be alone or jointly with another or others
9. Neither party in it submissions referred to the Tribunal decision in McGrath and Ors v Y Corp Developments Pty Ltd [2018] NSWCATCD 68 ('McGrath'). That decision did not involve an "open agency agreement", but the "exclusive agency agreement" subject to the dispute in McGrath entitled the agent to be paid commission if the agent "effectively introduced" the eventual purchaser to the property.
10. In McGrath, the Tribunal (Member Ringrose) summarised the relevant legal principles as follows (at [32]-[35]): Evidence has been provided by Mr McGrath, Mr Brennan and Mr Gerathy and the whole of that evidence expressly denies that the respondent agents had any involvement in the introduction of the sale. The High Court of Australia considered the principals related to agents commission in L J Hooker Ltd v W K Adams Estate Pty Ltd [1977] 13 ALR 161 where His Honour Justice Gibbs observed at p 172:- 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. Notwithstanding what was said in earlier decisions of this court it has become clear since Luxor Eastbourne Pty Ltd v Cooper that in such a case it is at least necessary that a binding contract of sale should have been executed. His Honour continued:- In the words of Erle C J in Green v Bartlett [1863] 14CB (NS681) "if the relation of buyer and seller is really brought about by the act of the agent he is entitled to commission although the actual sale has not been effected by him or in the words of the later authorities the plaintiffs must shew that some act of his was the causa causans of the sale … like all questions of causation this is ultimately a question of fact. In Moneywood Pty Ltd v Salamon Nominees Pty Ltd [2001] HCA 2 the High Court was again required to consider in some detail entitlement to agents commission. Gummow J observed at para 81:- (81) The starting point of the criterion of "effective cause" relied upon in the Queensland courts and in the submissions in this court. The requirement of "effective cause" is one of the various concepts understood as terms implied by the law which are found in a body of common law learning applicable to real estate agencies. At paragraph 82 His Honour observed:- (82) 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 introduce a purchaser was a step without the taking of which the sale would not have been affected. Something more immediate is required if the criterion of contractual liability is to be satisfied. This is because, as McPherson J put it in Doyle v Mt Kidston Mining and Exploration Pty Ltd [1984] 2 Qld R 286:- "it would be quite artificial to suppose that the parties intended that the agent should earn his commission by simply finding or locating an individual who independently of any further action by the agent later agreed to buy the subject property". The cases illustrate Lord Hoffmann's proposition in Environment Agency v Empress Car Company Abertillery Ltd [1999] 2 AC 22 that one cannot give a "common sense" answer to a question of causation for the purpose of attributing responsibility (and creating rights) without knowing the purpose and scope of the rule or criterion under which responsibility is imposed. In Ken Wolf Real Estate Pty Ltd v O'Holloran [2012] NSWSC 993 His Honour Justice Beech-Jones reviewed established authorities and observed:- (46) The concept of a real estate agent being an "effective cause" of a sale was discussed by Gummow J in Moneywood Pty Ltd v Salamon Nominees Pty Ltd (supra). Effective introduction would have a similar meaning. It suffices to state that it does not necessarily follow from the fact that the plaintiff earned a fee for the first contact that it or another agent "effectively introduced purchases".
11. Further, neither party referred in submissions to the NSW Court of Appeal decision in Prestige Residential Marketing Pty Limited v Depune Pty Limited [2008] NSWCA 179 ('Depune')
12. In Depune, the NSW Court of Appeal considered whether the first agent had "effectively introduced" the purchaser to the property, in circumstances where there was a subsequent agent involved. After reviewing and discussing authorities including LJ Hooker and Emmons, Bell JA (with whom Beazley JA and Matthews AJA agreed) stated at para [66]: "I have concluded that Prestige established that it was in a real sense the cause of the sale. It introduced Mr Casaceli to the property and by 18 February it had worked him into a position in which he made an offer to purchase it for the nominated sale price. His offer was made on the basis of the payment of a reduced deposit, which was not then acceptable to Depune. Subsequently he and Depune compromised their differences as to the provision of the deposit. It is to be observed that around the time, or shortly after, Mr Casaceli made his final offer through Prestige, Mr Priddle had come to the view that the nominated sale price was too low. The evidence does not establish the content of any negotiations conducted by Gunning with Mr Casaceli. It is clear that by 31 May Mr Priddle no longer considered that $3,950,000 plus GST was too cheap a price at which to sell the property. By that date he was willing to sell the property for $50,000 less than the offer that Mr Casaceli had earlier made. On these facts, I am satisfied that the inference to be drawn is that the work done by Prestige during the currency of the agency agreement was an effective cause of the sale. It follows that Prestige has established its entitlement to commission on the sale under clause 2. The sum claimed in the Statement of Liquidated Claim is $85,800. The accuracy of this figure was not in issue."
13. Having considered the relevant authorities, the following legal principles are applicable: 1. Interpretation of the provisions of an agency agreement involve applicable principles of construction of contractual terms; and a factual finding as to whether or not the contractual clause is enlivened (Outerbridge at [2]). 2. Although "effective cause" of a sale and "effectively introduced…the purchaser to the property" are not necessarily identical concepts, the concepts are interrelated (Outerbridge at [59]; Ken Wolf Real Estate Pty Ltd v O'Holloran [2012] NSWSC 993 at [46]; Depune at [61]). That is because an agent is not entitled to a commission from its principal if it does nothing more than finding a person who is ready, willing, and able to purchase, or makes an offer to purchase (LJ Hooker at p 172); or merely locating or finding an individual who independently of any further action by the agent later agreed to purchase the subject property (Moneywood at [82]). To be an "effective introduction" there must be a sufficient casual nexus between the "introduction" of the purchaser and the ultimate sale of the property to the purchaser (Depune at [61]). 3. The actions of more than one agent can be an effective cause of the sale. The test is not whether the actions of the agent were the sole cause of the sale. The appropriate analysis is whether the actions of the agent were "an effective cause" of the sale (Outerbridge at [60]). 4. Although it is possible that two agents are independently an effective cause of the sale and thus both entitled to a commission, this will only arise in "rare cases" (L.J Hooker at pp 61 and 86; Emmons Mount Gambier Pty Ltd v Specialist Solicitors Network Pty Ltd [2005] NSWCA 117 ('Emmons') at [47]). 5. Whether the actions of the agent were sufficient to be an effective cause of the sale involves consideration of all circumstances which may have had some causal relationship to the sale. If there are two successive agents involved, this includes consideration of the work performed by the second agent (Outerbridge at [62]-[64]). 6. To determine whether the actions of an agent were sufficient to be an effective cause of the sale, the Tribunal must consider whether the actions of the agent "really brought about the relation of buyer and seller; that is, whether a sale is really brought about by the actions of the agent" (Outerbridge at [61] applying the principle set out in LJ Hooker and subsequently applied in Moneywood). 7. The actions of the agent must have "flowed through…thus causing the ultimate sale" and the purchaser "continued to be influenced" by the actions of the agent in the decision to purchase (Emmons at [45]). As stated in Outerbridge at [80] "Ultimately, the issue is not so much whether the purchaser has been influenced but the extent of the influence on the sale that in fact eventuated including its price." 8. The mere fact that an agent introduces a prospective purchaser to a property and that person (who ultimately purchases the property) makes an offer is not, of itself, sufficient to establish the actions of the agent were an effective cause of sale. Relevantly, if a second agent conducts negotiations on price which were commenced during the period of the first agency, the Tribunal must consider whether the first agent "could and would have overcome" the difference in the positions of the parties if it had not been deprived of the opportunity to do so (Emmons at [3]; Outerbridge at [68])). 9. If the first agent, by its actions, renders itself unable to sell the property; or there is an "apparently unbridgeable gap" in negotiations conducted under the auspices of the first agent; or the second agent's intervention "resuscitates the transaction" then the actions of the first agent are not "an effective cause" of the sale even if the first agent introduced the ultimate purchaser to the property (Outerbridge at [65]-[66]).
14. The second issue for consideration is whether, in accordance with s 36 (4) (b) of the Property and Stock Agent Act 2002 (NSW) ('the PSA Act') "the whole or any part of the amount" claimed as commission is "reasonable".
15. The submissions of each party only referred to a small number of authorities on this issue, and none that directly interpreted s 36 (4) (b) of the PSA Act.
16. Simeon's submissions sated that Counsel was unaware of any decision that directly interpreted s 36 (4) (b) of the PSA Act.
17. However, Simeon's submissions referred to RL Time Realty Ltd v R & R Realty (1996) 39 NSWLR 24 ('RL Time Realty') which involved s 42A of the Property, Stock and Business Agents Act 1941 (NSW) (the predecessor to the PSA Act).
18. The provisions of s 42A of the Property, Stock and Business Agents Act 1941 (NSW) that was dealt with in RL Time Realty did not have an equivalent provision to s 36 (4) (b) of the PSA Act.
19. Rather, the provision being dealt with in RL Time Realty involved circumstances in which a person served with a statement of claim by an agent seeking payment of a commission could apply for a review of such a claim to the Real Estate Services Council, and the matters to be considered by the Council in respect of determination of "reasonable renumeration" to the agent for the services performed by the agent.
20. In RL Time Realty, the Supreme Court (Sperling J) held that the provision only applied to dealings between a licenced real estate agent and a member of the public, not in a dispute between two agents regarding whether a commission should be shared.
21. Simeon relies upon the part of the decision where Sperling J referred to the Parliamentary Second Reading Speech regarding the introduction of s 42A, and that the purpose or object of the provision was to protect the public from agents charging grossly excessive commissions (RL Time Realty at pp 28-29).
22. Simeon submits that, when interpreting s 36 (4) (b) of the PSA Act, the Tribunal's consideration of whether the amount of commission claimed by Simeon is reasonable is confined to whether the amount is obviously excessive or arises from "sharp practice"; not reducing the amount payable to Simeon because the Chadbans paid a commission to Stone; or 'apportioning' the commission to Simeon by a percentage to reflect the amount of work done by Simeon in comparison to Stone.
23. The owners submit that RL Time Realty is inapplicable, although the submissions do not clearly set out why this is the case. The owners referred to a passage (paragraph [59) in Investmentsource v Knox [2002] NSWSC 710 where Barrett J referred to there being nothing in the decision of RL Time Realty to suggest that statutory protection is not intended to exist for all members to the community who entrust business to real estate agents. It is unclear how this passage assists in the interpretation of s 36 (4) (b) of the PSA Act.
24. Most of owners submissions referred to whether Simeon had been the "effective cause" of the sale, rather than s 36 (4) (b) of the Act. In respect of s 36 (4) (b) of the PSA Act it was submitted that it imposes "certain standards of conduct upon licensees for the protection of the public such as the Chadbans" and Simeon had "failed in that regard" because Simeon had failed to inform them of the departure of Mr Jones; failed to send out the "off market email" after Mr Jones left; and other than Mr Jones "non one at Simeon took any interest in selling the property". Further it was submitted that members of the public who had multiple open agency agreements with multiple agents faced the "peril" of having to pay multiple commissions.
25. Neither party's submissions made any reference to any legislation analogous to s 36 (4) (b) of the PSA Act or authorities dealing with the interpretation of "reasonableness" in the context of such legislation, such as the provisions of s 172 (1) of the Legal Profession Uniform Law (NSW) that legal costs charged by legal practitioners must be "no more than fair and reasonable in the circumstances".
26. The parties also make no reference to any Consumer Trader and Tenancy Tribunal decisions that dealt with the issue of "reasonableness" under s 42A (4) (b) of the Property, Stock and Business Agents Act 1941 (NSW) as it applied in the period post the decision in RL Realty and prior to the introduction of the PSA Act, such as Alarcon v F & C Property Management Pty Ltd v Raine & Horne Rockdale [2003] NSWCTTT 321. However, the Tribunal decisions reviewed dealing with s 42A (4) (b) of the Property, Stock and Business Agents Act 1941 (NSW) do not engage in any analysis of the applicable legal principles regarding whether the commission amount claimed by the agent is not reasonable. Rather, they focus upon making brief factual findings and then concluding whether or not the amount is "reasonable". Accordingly, they are not helpful in elucidating the applicable legal principles.
27. When interpreting s 36 (4) (b) of the PSA Act, the Tribunal is satisfied that it is appropriate to give the word "reasonable" its plain meaning, and not constrain the circumstances which may be relevant. However, the inquiry is whether the amount (or any part of the amount) of the commission is reasonable, not whether payment of a commission is reasonable at all. Accordingly, the factors of most relevance to determining whether (and to what extent) the claim for payment of the commission amount is reasonable will involve matters such as: 1. Whether the amount claimed for commission is beyond the scope of usual rates charged for commission by agents for the type of sale. 2. Whether the amount claimed is excessive and unreasonable in comparison to the actual work performed by the agent. 3. Whether there was unreasonable conduct (such as, for example, unconscionable conduct) by the agent in forming the agreement to charge a particular amount of commission.

Did Simeon Effectively Introduce Ms Zhang to the Property In The Period Between 14 May 2019 and 6 September 2019?

1. It is trite to point out that Mr Jones, pursuant to his position as an employee of Simeon, was acting on behalf of Simeon in the period between 14 May 2019 and his resignation on 15 August 2019. The documents that Mr Jones provided to Ms Zhang during that period, or that Ms Zhang became aware of by reason of Simeon marketing the property, were documents of Simeon, other than the Development Application documents (which were the documents of the Chadbans but provided as part of the marketing of the property).
2. Concomitantly, Mr Jones actions from 9 September 2019 onwards were pursuant to his employment at Stone, and he was acting on behalf of Stone during this period.
3. Whilst employed at Simeon, Mr Jones was clearly the "lead agent" in regard to the Simeon property. In this capacity, Mr Jones had the majority of involvement in marketing the property for sale. The Tribunal accepts that Mr Manners had some minor involvement, including emailing potential purchasers about the property and showing the property to potential purchases on various occasions.
4. There is no evidence that any offer to purchase the Chadban's property through the agency of Simeon occurred in the period from 14 May 2019 to 6 September 2019. Mr Manners evidence was that he could not recall an offer of $2.3 million being made to him, but if this occurred, he did not regard the offer as "serious" and would not have passed on such an oral offer to the Chadbans. The evidence of Mr Jones was that no offers were made during his period of employment that ceased on 15 August 2019.
5. Ms Zhang was introduced to the property through Simeon (there being no evidence that she became aware of the property other than by reason of the marketing efforts of Simeon) and attended her first inspection of the property through the marketing of Simeon.
6. Although Ms Zhang did not make on offer to purchase at the first inspection on 6 August 2019 (the "price guide" for the property at that stage being $3.3 million) Mr Jones, on behalf of Simeon, followed the inspection by sending the email of 7 August 2019.
7. Assessed objectively, Mr Jones email of 7 August 2019 is clearly focussed upon promoting the benefits of the Chadban's property and explaining why it would be a good commercial decision for Ms Zhang to purchase the property, in circumstances where it would "very difficult, if not impossible" to find a comparable property for less than $3,000,000.
8. The Tribunal does not accept Mr Jones subjective characterisation of the email of 7 August 2019 in evidence as merely being to explain why the property had a "price guide" of $3,300,000 and explain the "value proposition" of that price guide. Assessed objectively, the email of 7 August 2019 is clearly promoting the benefits of purchasing the property.
9. Although it refers to Ms Zhang making a decision on what will be her "best option" and "supporting" Ms Zhang on "any decision she makes", the email makes no reference as to why the property is worth no less than $3,300,000 and does not state that the vendor will not accept any offer less than $3,300,000. Rather, it promotes the benefits of purchasing the property and why Ms Zhang would not be able to purchase a similar property for less than $3,000,000.
10. The Tribunal is satisfied that the email of 7 August 2019 was to elicit interest from Ms Zhang in making an offer to purchase the property, with a view to eliciting an offer in the vicinity of $3,000,000.
11. The Tribunal is satisfied that Ms Zhang's email of 8 August 2019 did not indicate that she was not interested in purchasing the property, or not interested in purchasing the property for an amount in the vicinity of $3,000,000. Rather, that email assessed objectively indicates that Ms Zhang was "thinking about" whether or not to make an offer on the property but was "concerned" about the road ahead which would affect whether she was prepared to make an offer; and what she was prepared to offer.
12. The Tribunal accepts that Mr Jones did not see Ms Zhang's email of 25 August 2019. It was not put to Mr Jones that his evidence that he had not seen that email until after Ms Zhang had ultimately agreed to purchase the property was inaccurate or untruthful.
13. The evidence of Mr Jones was that when he spoke to Ms Zhang on 26 August 2019 (in the period between ceasing employment with Simeon and commencing employment with Stone) he told her he would be "happy to assist" Ms Zhang in finding a property to purchase in Mosman when she returned to Australia from overseas.
14. However, it is inferred that reasons why Ms Zhang contacted Mr Jones on 26 August 2019 was that Mr Jones had showed her the Chadban's property; had provided prior to the first inspection documents of Simeon including the 'eBook' of the property and sent her the email of 7 August 2019 explaining the benefits of purchasing the property. There was no evidence he had shown Ms Zhang any other properties whilst employed by Simeon.
15. When Mr Jones spoke to Ms Zhang on 26 August 2019, clearly, she must still have had an interest in purchasing a property in the Mosman area, or there is no reason why she would have telephoned Mr Jones. Further, her email of 25 August 2019 clearly refers to being interested in the Chadban's property.
16. Mr Jones asserted that as of 26 August 2019, he did not know when, or if, Ms Zhang would return to Australia. However, there was never any indication by Ms Zhang that she was not returning to Australia, or not interested in purchasing a property in Mosman. Rather, it is clear by the fact that she telephoned Mr Jones on 26 August 2019 that she was still interested in purchasing a property in Mosman, and the Tribunal infers that she was interested in purchasing the Chadban's property. Whether or not Ms Zhang specifically referred to the Chadban's property to Mr Jones in the conversation with Mr Jones on 26 September 2019, her email of 25 August 2019 supports the drawing of an inference that she was interested in purchasing the Chadban's property at that time.
17. When Ms Zhang did return from overseas and contact Mr Jones, an inspection of the Chadban's property was arranged quickly. There was no evidence from Mr Jones that he suggested Ms Zhang inspect any other properties. Rather, Mr Jones arranged for there to be a second inspection of the Chadban's property.
18. The Tribunal does not accept the evidence of Mr Jones that negotiations with Ms Zhang regarding price occurred over a period of a number of weeks. The second inspection of Ms Zhang at the property occurred on 14 September 2019 and a sales advice was created on 16 September 2019. Mr Jones conceded that a sales advice could not be created unless there was an agreement on price. The Tribunal is satisfied that there was an intensive period of negotiations between Ms Zhang and Mr Jones regarding offers on the property, and these negotiations occurred in the period from 14 September 2019 to 16 September 2019. The Tribunal is satisfied that the offer to purchase for $3,100,000 was accepted by the Chadbans on 16 September 2019.
19. The Tribunal has considered the actions of Stone in respect of bringing about the sale. Mr Jones, whilst employed by Stone, had some telephone contact with Ms Zhang; arranged for a second inspection of the Chadban property; and conducted negotiations to conclude the sale price. Those actions were very significant in bringing about the sale.
20. The Tribunal is satisfied that after Mr Jones resigned from Simeon, Simeon took minimal actions to market the Chadban's property. No 'weekly email blast' was performed, and the evidence of Mr Manners that "some emails" had been sent to prospective purchasers about the property was vague, and not supported by any documentary evidence.
21. Mr Simeon asserts that, after Mr Jones resigned, his agency was still interested in marketing and selling the Chadban's property. However, after Mr Jones left Simeon, no one from Simeon contacted the Chadbans to discuss what measures would be taken the market the property. Mr Simeon asserts that this was because Mr Jones did not tell him that Ms Zhang was interested in the property or provide details of the enquiries; and Mr Manners asserted that he did not contact the Chadbans because he thought Mr Jones and Mr Simeon were having a discussion as to whether Mr Jones could "take" the Chadban's property to Stone.
22. However, Simeon (through Mr Simeon or other agents working at Simeon), being aware that Mr Jones was the "lead agent' on the Chadban property and had resigned, could have made contact with the Chadbans to ascertain from them (i) what, if any, interest had been expressed in regard to the property; and (ii) what measures Simeon would now take to appoint a "lead agent" and market the Chadban property. It took no such measures.
23. Further, on 6 September 2019 the Chadban's terminated the open agency agreement with Simeon. It was not suggested that the Chadban's were not entitled to terminate the open agency agreement; or that the Chadban's and Mr Jones had colluded in regard to the decision of the Chadbans to terminate the open agency agreement with Simeon because Ms Zhang was interested in purchasing the property; or that Mr Jones had influenced in any way the Chadban's decision to terminate the open agency agreement.
24. The evidence of Ms Chadban was that Mr Jones had not contacted her after the first inspection by Ms Zhang until 9 September 2019, and did not make any reference to having a potential purchaser for the property prior to the Chadban's signing the agency agreement with Stone on 10 September 2019 (T: 46: 4-39; T: 47; 47-50; T: 48: 1). That evidence was consistent with Mr Jones' recollection of events and there is no reason for the Tribunal not to accept that Mr Jones made no mention to Ms Chadban that Ms Zhang was interested in purchasing the property.
25. The oral evidence of Ms Chadban was that she and her husband were dissatisfied with Simeon's efforts to market the property after Mr Jones' resignation (by failing to include it in the weekly 'email blast') and the Chadban's email dated 6 September 2019 also refers to dissatisfaction about not being informed Mr Jones was leaving Simeon. As discussed previously, there was no evidence to suggest that Mr Jones had encouraged the Chadban's to terminate the open agency agreement with Simeon.
26. Having terminated the open agency agreement with Simeon, Simeon was not able to then conduct negotiations with any potential purchasers, including Ms Zhang.
27. Although the Tribunal accepts that Ms Zhang had first viewed the property by reason of the open agency agreement with Simeon; Mr Jones whilst employed by Simeon had promoted the benefits to Ms Zhang of purchasing the property; and Ms Zhang had become aware of Mr Jones' telephone number whist he was employed by Simeon; there had never been any offer made by Ms Zhang prior to the termination of the open agency agreement between the Chadban's and Simeon on 6 September 2019.
28. The first time that Ms Zhang had made an offer to purchase was after the commencement of Stone's open agency agreement and during or immediately after the second inspection. Further, it was not the case that Ms Zhang made a single offer. According to Mr Jones evidence, Ms Zhang offered $2,900,000, which was then increased to $2,950,000; and then $3,030,000 before the offer of $3,100,000 which was accepted by the Chadbans (T:73: 17-33).
29. Both parties made submissions on the facts of Outerbridge, and why the facts of this matter were, or were not, distinguishable. Such submissions are of limited assistance, in circumstances where the legal authorities clearly show that whether an agent "effectively introduced" a person who subsequently purchased the property in the sense of being "an effective cause" of the sale depends upon the particular factual circumstances.
30. Simeon submits that its actions were not "spent" and continued to influence Ms Zhang's decision to purchase the property. Simeon submits that, unlike Outerbridge, the first agent did not go overseas and was uncontactable by the prospective purchaser and unlike Emmons it was not clear that the first agent did not regard further negotiations as being of utility.
31. However, the task of the Tribunal is to assess on the evidence whether the actions of Simeon were sufficient to be "an effective cause" of the purchase by Ms Zhang. It is clear that there was a causal nexus between the actions of Simeon and Ms Zhang's eventual decision to purchase the property because she was first introduced to the property by Simeon and Simeon had promoted the benefits to Ms Zhang of purchasing the property. Ms Zhang had also contacted Mr Jones on 26 August 2019.
32. However, the applicable test is not whether there was a causal nexus between the actions of Simeon and the ultimate agreement by the Chadbans and Ms Zhang for Ms Zhang to purchase the property for $3,100,000, The applicable test is whether the actions of Simeon were sufficient to constitute "an effective cause" of the sale. A person being "interested" in a property during the agency period is not the same thing as being "an effective cause" of the ultimate sale to that person.
33. In circumstances where Simeon had not contacted the Chadban's after Mr Jones resignation; had made minimal efforts to continue to market the property after 15 August 2019; the Chadbans had terminated the open agency agreement with Simeon; Stone had arranged the second inspection of the property; and all of the negotiations regarding purchase price had occurred after 6 September 2019, the Tribunal is not satisfied that Simeon was an effective cause of the sale of the Chadban's property. Consequently, Simeon did not "effectively introduce" Ms Zhang to the property.
34. Accordingly, there is no contractual entitlement to payment of a commission to Simeon by the Chadbans.

Should the Amount of Commission Be Reduced Because the Commission Claimed By Simeon Is, In Whole or Part, Is Not Reasonable?

1. As the Tribunal has found that the actions of Simeon were not an effective cause of the sale, it is strictly unnecessary to consider the s 36 (4) (b) of the PSA Act issue.
2. However, for the sake of completeness and if the decision of the Tribunal is appealed, it is important to deal with the issue.
3. If the Tribunal is incorrect in its finding that Simeon was not an effective cause of the sale, and if Simeon was an effective cause of the sale, then the Tribunal is not satisfied that any part of the commission claimed is not reasonable.
4. The amount of commission of 2.2% of the sale price set out in the Simeon open agency agreement is the same amount as set out in the Stone agency agreement.
5. There is nothing in the evidence that satisfies the Tribunal that the amount of the commission claimed by Simeon is unreasonable, and the amount should be reduced in whole or part. There was no evidence, for example, that Simeon pressured the Chadbans to enter into the agreement; or the commission fee is excessively above market rates; or that there was overcharging by Simeon; or the amount claimed is grossly excessive.
6. If the Tribunal had found that the actions of Simeon were an effective cause of the sale; or found that both the actions of Simeon and Stone were both independently an effective cause of the sale, the mere possibility that the Chadbans may be exposed to liability for payment of two commissions would not be a sufficient reason to order the amount of commission payable to Simeon be reduced.

ORDERS 1. Alexandra Chadban and David Chadban are not liable to pay to Simeon Property Pty Ltd the commission fee of $68,200 claimed by Simeon Property Pty Ltd pursuant to the agency agreement dated 14 May 2019. 2. Any costs application is to be made in writing to the Tribunal within 21 days of the date of this decision. 3. If there is a costs application, the Tribunal will issue further directions regarding the filing and serving of costs submissions.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 30 March 2022