Carruthers Bros Pty Ltd v Pennell

Carruthers Bros Pty Ltd (the appellant) and Pennell (the respondent) were parties to litigation concerning a dispute over the respondent's entitlement to a commission. The case was heard in the High Court of Australia.

The central legal issue before the High Court was whether the respondent, a real estate agent, had earned a commission on the sale of a property by the appellant. Specifically, the court had to determine if the respondent had introduced the ultimate purchaser to the vendor in circumstances that entitled him to commission, notwithstanding that the sale was ultimately effected by another agent.

The High Court considered the principles governing the entitlement of a real estate agent to commission. The court affirmed that an agent earns commission if they introduce a purchaser to the vendor who is ready, willing, and able to purchase the property on the vendor's terms. However, the court also noted that if the vendor, after being introduced to a purchaser by the agent, subsequently sells to that purchaser on different terms, the agent may still be entitled to commission if the introduction was the causa causans (the decisive cause) of the sale. In this instance, the court found that the respondent had not established that he was the effective cause of the sale, as the ultimate purchaser was introduced to the vendor by another agent, and the terms of the sale were significantly altered from those initially proposed.

The High Court allowed the appeal, setting aside the judgment of the lower court and ordering that the respondent's claim for commission be dismissed.