Phenomenon Agents Limited v Akai Universal Industries Limited

Phenomenon Agents Limited (the plaintiff) brought proceedings against Akai Universal Industries Limited (the defendant) in the Supreme Court of New South Wales. The dispute concerned the plaintiff's claim for commission allegedly owed under an agency agreement. The plaintiff asserted that it had procured a purchaser for certain commercial properties owned by the defendant, thereby entitling it to a commission pursuant to the terms of their agreement. The defendant denied liability, disputing the plaintiff's entitlement to commission on various grounds.

The central legal issues before the Court were whether the plaintiff had fulfilled the conditions precedent for the earning of its commission under the agency agreement, and if so, whether the defendant had breached the agreement by failing to pay the agreed commission. Specifically, the Court was required to interpret the terms of the agency agreement to determine what constituted the procurement of a "purchaser" and whether the plaintiff's actions met this threshold, notwithstanding that the sale ultimately did not proceed to completion.

Justice Klippan considered the express terms of the agency agreement and relevant case law concerning the entitlement of agents to commission. The Court found that the agreement stipulated that commission was earned upon the introduction of a "purchaser" who was "ready, willing and able" to complete the purchase. The evidence established that the plaintiff had introduced a party who had entered into a binding contract of sale with the defendant. While the sale did not complete, the Court held that the plaintiff had successfully discharged its obligation under the agreement by introducing such a purchaser. The defendant's subsequent actions, which led to the termination of the sale contract, did not negate the plaintiff's entitlement to commission, as the conditions for earning it had already been met.

The Court ordered that the defendant pay the plaintiff the agreed commission, together with interest and costs.