Khafam Developments Pty Limited v Zeaiter

Khafam Developments Pty Limited (the appellant) appealed to the New South Wales Court of Appeal against a decision of the Supreme Court of New South Wales. The dispute concerned the appellant's entitlement to a commission under a written agreement with the respondents, Mr. and Mrs. Zeaiter, for the sale of their property. The appellant claimed the commission was payable upon the exchange of contracts, while the respondents contended that the commission was only payable upon the settlement of the sale.

The primary legal issue before the Court of Appeal was the proper construction of clause 6 of the written agreement, which stipulated the circumstances under which the commission was payable. Specifically, the court had to determine whether the phrase "upon the exchange of contracts" meant that the commission was due and payable at the moment of exchange, or if it referred to the event that triggered the obligation to pay, with payment occurring at a later, unspecified time.

The Court of Appeal, in allowing the appeal, held that the plain and ordinary meaning of clause 6 indicated that the commission was payable upon the exchange of contracts. The court reasoned that the agreement did not specify any other event or condition that would postpone the payment of the commission beyond the exchange of contracts. Therefore, the appellant was entitled to the commission upon the exchange of contracts, and the respondents' argument that payment was contingent on settlement was rejected. The court ordered that the appeal be upheld and that the respondents pay the appellant's costs.