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[2026] NSWSC 681
Supreme Court of NSW
2026-06-15
Elkaim AJ
Original judgment source is linked above.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Strathfield Partners Pty Ltd v Wakim [2026] NSWSC 681
Hearing dates: 10 June 2026
Date of orders: 15 June 2026
Decision date: 15 June 2026
Jurisdiction: Common Law
Before: Elkaim AJ
Decision: 1. The summons is dismissed.
2. The plaintiff is to pay the defendant’s costs of the proceedings.
Catchwords: APPEALS — appeal from a decision of the Local Court on a question of law — construction of clause in Agency Agreement — whether plaintiff real estate agent entitled to commission — whether defendant’s failure to obtain council approval amounted to “default” owing to which the sale did not complete
Legislation Cited: Local Court Act 2007 (NSW), ss 39(1), 40
Cases Cited: Life Insurance Company of Australia Ltd v Phillips (1925) 30 CLR 60; [1925] HCA 18
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37
Northwalker Realty Pty Ltd v TFM Chatswood Land Pty Ltd (No 2) [2022] NSWSC 1409
Category: Procedural rulings
Parties: Strathfield Partners Pty Ltd (Plaintiff)
Anna Wakim (Defendant)
Representation: Counsel:
A Byrne (Plaintiff)
O Bellhouse-Smith (Defendant)
Solicitors:
Strathfield Law (Plaintiff)
Bartier Perry Lawyers (Defendant)
2025/405379
Publication restriction: No
The plaintiff, by a summons filed on 21 October 2025, has appealed from a decision of the Local Court.
All of the grounds of appeal are said to arise from errors of law. Such errors allow an appeal “as of right” pursuant to s 39(1) of the Local Court Act 2007 (NSW). The defendant disputes that the errors are of law alone, submitting that the plaintiff needs leave under s 40 of the same Act.
The matter was heard by Brender LCM on 16 September 2024 and decided on 24 September 2024. The original claim was for $64,474.86 made up of court costs, commission, advertising disbursements, and interest. His Honour dismissed the claim, other than for an amount of $997.50, on which interest of $108.91 was allowed. The plaintiff was ordered to pay the defendant’s costs of the proceedings.
The summons is supported by an affidavit of Mr David Jin-Ho Oh dated 27 February 2026. Mr Oh is the plaintiff’s solicitor. His affidavit annexes the relevant documents including the Local Court decision and transcript and the material that was put before the Magistrate.
The scope of the summons was reduced with the abandonment of Grounds 1 and 2, and some further refinement at the hearing. Ultimately the argument came down to the construction of a particular clause in an Agency Agreement. As stated by counsel for the plaintiff:
“Really this appeal is about the phrase ‘owing to the default of the principal’."
The plaintiff (in this court and in the Local Court) is a real estate agent. The defendant was the registered proprietor of a residential property in the Sydney suburb of Concord.
The defendant entered into an Agency Agreement with the plaintiff on 16 May 2022, giving the plaintiff exclusive (for three months) selling rights over the property. Under the agreement, if the sale price was less than $4.75m, the plaintiff was entitled to commission assessed at 1.5% of the sale price. The plaintiff was also entitled to advertising expenses.
The defendant paid the plaintiff a $10,000 deposit on account of disbursements. This payment explains the verdict for $997.50 in that the $10,000 deposit was deducted from the advertising costs payable.
On 3 June 2022, the plaintiff introduced the defendant to prospective purchasers who later, on 18 June 2022, entered into a contract for the sale of the property. The sale price was $3.92m, generating a commission of $58,800.
The completion date was 18 December 2022. The sale did not complete on this date. On 17 March 2023, the purchasers issued a Notice to Complete, with time to be of the essence. The new completion date was 5 April 2023. The notice envisaged the purchasers’ right to rescind the contract under Special Condition 54. Again, the sale did not complete.
On 6 April 2023, the purchasers issued a Termination Notice bringing the sale agreement to an end. The deposit paid upon the exchange of contracts was returned to the purchasers. It was accepted that despite the word “Termination”, the purchasers had exercised their right to rescind the contract.
A demand for the commission and advertising expenses, in the form of an invoice, was issued by the plaintiff to the defendant, on 16 May 2024.
There were two reasons the sale never completed:
The defendant had failed to obtain council approval retrospectively approving certain unauthorised works that had been carried out on the property by the defendant.
As at 5 April 2023, there were six caveats attached to the defendant’s title to the property.
The appeal is only concerned with the first of the above two reasons and in particular whether this constituted “default” on the part of the defendant, owing to which the sale did not complete.
“i. The Agent shall be entitled to a fee of [2% including GST for sale price over $4.75m. Anything below 1.5%] (GST incl.) … if during the Exclusive Agency Period the Property is sold either: (a) by the Agent; (b) by any other agent; or (c) by the Principal.
ii. The Agent shall be entitled to a fee at the agreed amount if at any time following the expiration of the Exclusive Agency Period the Principal enters into a contract for the sale of the Property with a purchaser effectively introduced to the Principal or the Property during the Exclusive Agency Period by the Agent, by any other agent or by the Principal.
iii. The Agent shall be entitled to a fee at the agreed amount if during the Continuing Agency Period the Agent effectively introduces to the Principal or the Property a purchaser who subsequently enters into a binding contract.
iv. The Agent's fee is calculated on the selling price. If the sale is subject to GST then the Agent's fee is calculated on the GST inclusive selling price.
v. The Agent's remuneration in the event of a sale at the Agent's estimate of selling price would equate to… [2% including GST for sale price over $4.75m. Anything below 1.5%] (GST incl.).
vi. The fee to which the Agent is entitled shall be due and payable upon demand:
(a) on completion of the sale; or
(b) if the sale is not completed owing to the default of the Principal after the parties have entered into a binding contract; or
(c) if after the making of the contract the Principal and the purchaser mutually agree not to proceed with the contract; or
(d) upon the termination of the contract by the Principal if the sale is not completed owing to the default of the Purchaser and the fee is the same or less than the amount of the deposit which is forfeited to the Principal.
…
WARNING: The term immediately above provides that a commission is payable under this agreement even if the sale of the property is not completed.
“The vendor discloses to the purchaser that there are certain works have been carried out at the property without the relevant authorities' approval. The vendor warrants that:
(a) the vendor has applied to the local government authority to obtain an unconditional approval for any and all unauthorised works.
(b) should the vendor not obtain an unconditional approval by the LGA and serve it on the purchaser prior to settlement, then the purchaser can rescind the contract.
(c) Failure to obtain an unconditional approval and to serve it on the purchaser prior to the date of settlement, then the purchaser is permitted to rescind the contract with no penalty and the entire deposit is returned to the purchaser.
(d) The purchaser is permitted to apply for a building certificate to ensure all other works comply regardless of any other condition referred to in this contract.
(e) The vendor is to attend to rectification of all works pursuant to any building certificate regardless of any condition of this contract and the works are to be undertaken at the costs of the vendor.
(f) This special condition makes this contract conditional upon the completion of the above by the vendor.
Special Condition 54 is an essential condition.”
In respect of cl 5 of the Agency Agreement, it was originally submitted that the obligation to pay commission arose under cl 5. i, and then the fee became due and payable (upon demand) under cl 5.vi(b). Therefore, a distinction was made between the obligation to pay and when payment was to be made. This point was abandoned at the commencement of the hearing.
The result was that essentially the whole of the appeal revolved around the construction of cl 5.vi. The question that was asked on the agreed facts, was whether there been a default by the defendant and, if there had been a default, whether the sale had not completed “owing” to the default.
The narrowing of the appeal I think dealt with the defendant’s submission that the appeal required leave, the issues being a mixture of law and fact. I am satisfied that the remaining construction issues were questions of law only, consistent with Life Insurance Company of Australia Ltd v Phillips (1925) 30 CLR 60 at pp 78-79; [1925] HCA 18
“As to construction, there is always one and only one true meaning to be given to fully expressed words. Sir Montague Smith, speaking to the Judicial Committee in McConnel v Murphy, said: - ‘In questions of difficult interpretation, not only two, but frequently many constructions may be suggested. And, after all, there must be one true construction; and if that true construction can be arrived at with reasonable certainty, although with difficulty, then it cannot be properly said that there are two meanings to the contract.’ Once there is established the full mutual expression of the agreement in English words, the construction of the document is, as Lindley L.J. says, a pure matter of law.” (footnotes omitted)
“The issue here is whether the sale was not completed ‘owing to the default’ of the Vendor Principal. That involves two questions - did the vendor ‘default’ in any respect, and if so, did the sale not complete ‘owing to’ any such default.”
“Ms Wakim gave evidence of bona fide efforts to obtain the certificate. No case was advanced that there was a breach of the implied obligation, however it be expressed, to make reasonable, bona fide, genuine or good faith efforts to obtain the certificate. In those circumstances there was no breach of contract, or ‘default’ in the failure to obtain the certificate.”
In respect of the “owing” requirement, Brender LCM did not make a finding, no doubt because he had found there had not been a default by the defendant and therefore the causation issue did not arise. His Honour did make finding about ‘owing’ in respect of the caveats, but this was not part of the appeal.
The plaintiff submitted that there was a real point of distinction with Northwalker arising from the different special conditions in each case.
In Northwalker, the vendor was obliged to obtain registration of the draft strata plan annexed to the contract for sale. The relevant clause requiring registration stated:
“5.1 Strata Plan
Subject to special condition 5.2, the vendor undertakes to use all reasonable endeavours and do all such things and execute all such documents to obtain the registration of the Strata Plan as shown in the Draft Strata Plan by the Sunset Date.
5.2 Variation to the Strata Plan
The vendor reserves the right to make any such alternations and amendments to the Draft Strata Plan which it deems necessary or desirable or as may be required by the Council or the LPI or other public authority to obtain the Strata Plan.” (underlining added)
“In the present case, the term ‘default’ in cl 3(vi)(d) needs to be construed in light of the nature of the transaction to which the Agency Agreement relates, which is the performance of the service of procuring the execution of off-the-plan contracts for the sale of units yet to be built which require the registration of a strata plan in order for completion to occur. Whether non-completion due to the failure to register the strata plan is due to the default of the vendor must turn on whether the vendor has failed to do something which, under the contract, it is required (i.e. has a duty or obligation) to do. In the present case the vendor does not have an obligation to procure registration by the Sunset Date but only to use all reasonable endeavours to procure that result. Hence, in my opinion, there will only be a default by the vendor if the failure to achieve registration is due to its failure to use all reasonable endeavours to achieve that result.
Put another way, the transaction has identified the extent of the responsibility of the vendor for procuring registration of the strata plan by the terms of cll 4 and 5 referred to above. In circumstances where the vendor has not undertaken to procure registration of the strata plan by a particular date but rather undertaken merely to use reasonable endeavours to procure that result (as evidenced by the fact that the vendor has a right to rescind if registration is not achieved by the Sunset Date), it cannot be said that the vendor has failed to do something which it ought to do if despite using reasonable endeavours to procure registration of the strata plan by the Sunset Date that result is not achieved and the purchaser terminates the contract.”
The plaintiff submitted that the question of default was inextricably linked to whether or not the vendor had used reasonable endeavours to obtain the necessary registration. There was no ‘reasonable endeavours’ proviso in the current case so that the failure to obtain the certificate required by SC 54 was a straightforward default for the purposes of cl 5.vi(b).
Further, submitted the plaintiff, the obligations imposed upon the defendant by SC 54 were onerous in that she was required to correct an illegality. Under SC 54 the defendant ‘warranted’ that a BIC would be obtained, she gave the purchasers a right to rescind with repayment of the deposit if there was a “failure” and the BIC was made a specific condition of completion.
SC 54 was accordingly different, and distinguishable, from the obligation to register a strata plan in Northwalker, which did not carry with it the compulsion to correct illegal works which had been constructed by the defendant.
The defendant responded that SC 54 was far from the obligatory regime suggested by the plaintiff. The only requirement imposed on the defendant was in subclause ‘a)’ which concerned the defendant making an application to the council. As stated by the subclause, the defendant had already made the application, and there was no further obligation imposed upon her to take any other action in respect of the application.
Moreover, the evidence revealed that the defendant had pursued the application, and the judgment noted that this was not challenged. I have already quoted at [15] of the judgment where his Honour referred to the defendant’s “evidence of bona fide efforts to obtain the certificate.”
Both parties sought to draw support from Northwalker. The plaintiff, referring to [39], submitted that “default” was not a technical term and was to be distinguished from a breach. The plaintiff said it was necessary to be “guided by the nature of the contract and all the circumstances of the case”, (Northwalker at [41]).
The plaintiff referred to Northwalker at [46]:
“As I read this passage, the learned author has sought to characterise the decision in Caffrey v Montano as indicating a meaning of ‘default’ in this context as ‘something like wrongful refusal to proceed to completion’. While this description may be an example of a default by the vendor, a more comprehensive statement is that ‘default’ is a relative term which connotes the failure to do something which the person ought to have done having regard to the nature of its relations to other persons interested in the relevant transaction, (see [39]-[42] above). In the present context, this directs attention to the obligations of the vendor under the contract for sale and to whether completion did not occur due to the failure of the vendor to comply with one or more of those obligations. This reflects the fact that cl 3(vi)(b) is directed at ensuring that the vendor should not, as against the agent, benefit from its own wrong under its contract with the purchaser.”
The plaintiff submitted that SC 54 imposed obligations on the defendant under the contract for sale and that completion did not occur because the defendant did not obtain the BIC.
The plaintiff also submitted that cl 5.vi of the Agency Agreement provided an ‘all purpose’ approach to ensure the agent received the commission in all circumstances excepting fault on the part of the agent. Thus, the clause catered for the payment of commission in the alternate circumstances covered by the clause.
The defendant submitted that the clause did not give an overarching cover, giving as examples there being no completion due to a force majeure or the purchaser ‘pulling out’ during a cooling-off period.
The parties were agreed on the principles of construction, in particular as stated by the High Court in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37, at [46]-[47]:
“The rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose.
In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean. That inquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract.” (footnotes omitted)
I think the plaintiff must fail, for two reasons:
The only positive action required of (or warranted by) the defendant was to apply for the BIC. This had already occurred and was followed by genuine efforts to pursue the application. Thus, there was no default on the part of the defendant.
Even if there had been a default, the sale was not completed owing to the default. Rather, it was because the BIC had not been issued before the completion date, triggering the purchasers’ rights to rescind the contract.
Elaborating on the above two reasons: the plaintiff’s case stemmed from a “plain obligation” on the part of the defendant to “correct an illegality”, the illegality being the unauthorised works present on the property. The plaintiff submitted:
“Notwithstanding some messy drafting, all of the requirements lie on the side of the vendor.”
“the vendor has applied to the local government authority to obtain an unconditional approval for any and all unauthorised works.”
The warranty under SC 54(a) is not to do something but rather to confirm that something (applying for a BIC) had been done, and in fact it had been done. In addition, the defendant had, as found by the Magistrate, earnestly pursued the application.
The balance of SC 54 relates to actions that might arise upon the BIC not being obtained. SC 54(e) does require positive action on the part of the defendant, but it only arises if a BIC has been issued, which in this case had not occurred.
Contrary to the plaintiff’s submission, it is not enough to say, as a product of the construction of cl 5.vi of the Agency Agreement, that effectively any failure to complete, other than a failure caused by the purchasers or the agent, would generate the entitlement to the commission. In my view the default referred to in cl 5.vi(b) cannot be interpreted as so wide that effectively the mere incompletion of the sale is automatically attributed, without more, to the defendant.
Turning to the “owing” required by cl 5.vi(b), I think it clear that this is a straightforward expression of causation. One must then look at why the sale did not complete. It did not complete because, exercising the rights given to them by SC 54(c), the purchasers chose to rescind the sale agreement once the settlement date arrived and, as at that date, an unconditional BIC had not been obtained. Use of the word “failure” in this subclause could not be interpreted to imply an automatic inference of fault. This would be inconsistent with the application for the BIC having been made and the uncontested finding that the defendant had taken bona fide steps to pursue the application.
Going back to cl 5.vi(b) of the Agency Agreement, on the basis that the purchasers rescinded because of their right to do so under SC 54(c), the absence of completion was caused by there being no BIC at the date of completion, or perhaps because of the failure of the council to issue the BIC, but not because of any default on the part of the defendant, the defendant having done all she was required to do under SC 54.
It follows that the Local Court Magistrate was correct and the summons must be dismissed. Costs will follow the event.
I make the following orders:
The summons is dismissed.
The plaintiff is to pay the defendant’s costs of the proceedings.
**********
Strathfield Partners Pty Ltd
Wakim