M and G Hoschke Pty Ltd v Ray Fry Investments Pty Ltd

M and G Hoschke Pty Ltd (the appellant) appealed to the Supreme Court of New South Wales from a decision of the Local Court. The dispute concerned the appellant's claim for payment of commission under a written agreement for the sale of a property. The respondent, Ray Fry Investments Pty Ltd, had agreed to pay the appellant a commission of 2.5% of the sale price of a property located at 140-142 Old South Head Road, Vaucluse, if the appellant introduced a purchaser who ultimately completed the purchase. The appellant introduced a purchaser, Mr. G, who entered into a contract for sale with the respondent. However, the sale did not complete because the respondent failed to obtain vacant possession of the property, a condition precedent to completion. The Local Court found in favour of the respondent, holding that the appellant was not entitled to commission.

The primary legal issue before the Supreme Court was whether the appellant had fulfilled its contractual obligation to introduce a purchaser who completed the purchase, notwithstanding the respondent's failure to obtain vacant possession and the subsequent termination of the sale contract. This required the Court to interpret the terms of the written agreement, particularly the conditions precedent to the appellant's entitlement to commission and the effect of the respondent's inability to satisfy a condition necessary for completion.

The Court reasoned that the agreement stipulated that commission was payable upon the introduction of a purchaser who "completes the purchase". It was not sufficient for the appellant to introduce a purchaser who entered into a contract; completion of the sale was a necessary prerequisite for the commission to become due. The Court found that the respondent's failure to obtain vacant possession, which was a condition precedent to completion under the sale contract, meant that the purchaser was not obliged to complete. Consequently, the sale did not complete, and the appellant had not satisfied the condition for earning its commission. The Court applied the principle that a party seeking to recover commission under an agency agreement must demonstrate that they have fulfilled the specific terms and conditions upon which payment is contingent.

The appeal was dismissed, and the decision of the Local Court was affirmed.