Norton Property Group Pty Ltd v Ozzy States Pty Ltd (in liq)

Norton Property Group Pty Ltd (the appellant) appealed to the Court of Appeal of the Supreme Court of New South Wales against decisions made at first instance concerning a dispute with Ozzy States Pty Ltd (in liq) (the respondent). The core of the dispute involved the appellant's entitlement to commission under a real estate agent buyers agreement. The appellant had been engaged to acquire options over seven contiguous parcels of land for the respondent, a property developer. While options were acquired over some of the land, these options were never exercised by the respondent. The appellant rendered invoices for commission as options were acquired, some of which were paid, leading to the question of whether the appellant was entitled to commission for obtaining options that were ultimately not exercised.

The Court of Appeal was required to determine two primary legal issues. Firstly, it had to consider whether the appellant was entitled to commission for the acquisition of options over land, notwithstanding that those options were never exercised by the respondent. Secondly, the Court had to assess whether the appellant's demands for commission constituted misleading or deceptive conduct in contravention of section 18 of the Australian Consumer Law, or if these demands were merely expressions of the appellant's opinion regarding its legal entitlement to the commission.

In its reasoning, the Court of Appeal analysed the terms of the buyers agreement to ascertain the parties' intentions regarding the trigger for commission entitlement. The Court concluded that the agreement stipulated commission was payable upon the acquisition of the options, not upon their exercise. Therefore, the appellant was entitled to commission for the options it had successfully acquired, irrespective of whether the respondent subsequently exercised them. Regarding the Australian Consumer Law claim, the Court found that the appellant's demands for commission were expressions of its genuine belief in its legal entitlement under the contract. Consequently, these demands were not misleading or deceptive, as they reflected the appellant's arguable interpretation of the agreement.

The Court of Appeal allowed the appeal in part. It set aside the orders made at first instance dismissing the amended statement of claim and the associated costs orders. In lieu of the dismissed claim, the Court ordered that the amended statement of claim be dismissed. The Court also set aside the costs orders made on 28 June 2019. No orders were made as to the parties’ costs at first instance or on appeal, with the intention that each party bear their own costs.