Howell v Fine Real Estate Network Pty Ltd

In *Howell v Fine Real Estate Network Pty Ltd* [1998] NSWCA 109, the New South Wales Court of Appeal considered a dispute between a vendor, Mr. Howell, and a real estate agency, Fine Real Estate Network Pty Ltd, concerning the commission payable on the sale of Mr. Howell's property. Mr. Howell had engaged the agency to sell his property and subsequently entered into a contract of sale with a purchaser introduced by the agency. However, the sale did not proceed to completion due to the purchaser's default. The central issue was whether the agency was entitled to commission despite the non-completion of the sale.

The Court was required to determine whether the agency had earned its commission under the terms of the agency agreement, notwithstanding the purchaser's failure to complete the contract of sale. Specifically, the Court had to consider the circumstances under which a real estate agent is entitled to commission, particularly when the sale falls through due to the purchaser's default, and whether the agency agreement contained any provisions that altered the general legal principles governing commission entitlement.

The Court of Appeal held that the agency was not entitled to commission. Applying established principles, the Court found that an agent is generally entitled to commission when they have introduced a ready, willing, and able purchaser who enters into a binding contract. However, in this instance, the contract of sale was conditional upon the purchaser obtaining finance, a condition that was not satisfied. Crucially, the agency agreement stipulated that commission was payable only upon the completion of the sale. As the sale did not complete, the condition for payment of commission was not met, and therefore the agency's claim for commission failed.