Nevgold Pty Ltd v Floyd[2025] QCA 82

SUPREME COURT OF QUEENSLAND

1. [1]
   BOWSKILL CJ:  The applicant, Nevgold Pty Ltd, applies for leave to appeal^[1] a judgment requiring it to pay the respondent, Mr Floyd, $137,300, being the commission found to be payable under a real estate agency agreement (and interest).  For the following reasons, I would refuse the grant of leave, on the basis there is no error to be corrected and, accordingly, no injustice to be corrected.^[2]
2. [2]
   Nevgold engaged Mr Floyd as a real estate agent to sell its commercial property, comprising a motel business and land.  Under the agency agreement, Nevgold agreed to pay Mr Floyd commission if a contract of sale of the property is entered into with a buyer, where Mr Floyd is the effective cause of the sale, and the contract is completed (cl 5.1).
3. [3]
   Mr Floyd introduced OneFin Property Pty Ltd to Nevgold as a buyer.  Nevgold and OneFin did not immediately enter into a contract of sale, but rather entered into a call option deed, under which Nevgold granted OneFin an irrevocable option to purchase the property on the terms set out in a contract annexed to the deed.  Under the deed, OneFin was required to pay performance security payments of $20,000, on signing the deed, and a further $500,000 in the event it was satisfied with its due diligence enquiries (cl 4).  The option was required to be exercised within 18 months of being so satisfied.  If the option was not exercised by that date, Nevgold would keep the $520,000 (cl 4(g)).  The deed also enabled OneFin to nominate another person or entity to be the buyer under the contract (cl 9).
4. [4]
   At some stage, OneFin decided that it did not want to buy the property, and so engaged its own agent to find a buyer, as its nominee.  A buyer was found, called RRAF3, and the requisite steps were taken under the deed by OneFin to nominate that buyer and exercise the option.  RRAF3 entered into a contract with Nevgold, in the terms annexed to the call option deed, and the contract was completed.
5. [5]
   Although Nevgold achieved the sale of its property, on the terms proposed in the contract annexed to the call option deed, Nevgold refused to pay Mr Floyd commission under the agency agreement, on the basis that Mr Floyd was not the effective cause of the sale to the ultimate purchaser, RRAF3.
6. [6]
   Following a trial in the District Court of Mr Floyd’s claim to recover the commission, the learned primary judge found that Mr Floyd was the effective cause of sale because:^[3]

   1. Mr Floyd was the effective cause of the call option deed, with its attached contract of sale.
   2. While Mr Floyd did not immediately bring about the contract of sale which was entered into with RRAF3, that contract of sale was in the form attached to the option deed.  As the primary judge said, “[i]t was therefore the exact sale negotiated by Mr Floyd and contemplated by the Option and its attached form of contract of sale.  There was no different contract of sale negotiated.”
   3. The option provided for OneFin or its nominee to exercise the option and enter into the contract of sale.  As the primary judge said, “[w]hile it is correct literally to say Mr Floyd did not introduce RRAF3 as a purchaser, what he did do was introduce OneFin or its nominee as the purchaser under the Option.  And RRAF3 was OneFin’s nominee in accordance with the nominee provisions under the Option”.
   4. It did not matter that RRAF3 was not a related entity of OneFin.  The seller (Nevgold) could not reject a nominee unrelated to OneFin; indeed it had “no interest in the matter” – so long as OneFin or its nominee (whoever that might be) entered into and completed the contract of sale, Nevgold must also complete it.
   5. OneFin’s efforts to find a third party nominee could be characterised as just another example of work which a purchaser or option holder might do in their own interests to bring about completion of the contract, including work which might require professional assistance.
7. [7]
   In reaching that conclusion, the primary judge rejected an argument, on behalf of Nevgold, that the chain of causation between Mr Floyd’s work and the sale contract had been broken because, first, OneFin’s agent (HTL) found the ultimate purchaser and, second, OneFin would not have completed but for HTL finding that purchaser.  The primary judge noted that OneFin’s obligations under the option exposed it to a loss of $520,000 if it did not exercise the option.  His Honour found that “pressure of that exposure to deleterious consequences drove OneFin energetically … [to] seek a buyer who would accept nomination under the Option” and “it was the obligations under the Option which played a principal role in the particular arrangements which led to the nomination of RRAF3 under the Option” (at [100]).  Further, the primary judge found that it was not necessarily the case that, but for RRAF3 “riding to the rescue”, there would have been no contract (at [101]).^[4]  His Honour also said the fact OneFin’s agent, HTL, was paid a commission for its work in introducing RRAF3 did not mean Mr Floyd could not be regarded as the effective cause of the sale, for the purposes of his agency agreement with Nevgold: for one thing, the authorities support the proposition that there can be two effective causes of a sale; for another, the contractual and factual context of the relationships between Mr Floyd and Nevgold, on the one hand, and OneFin and HTL, on the other, are quite different (at [102]).
8. [8]
   Judgment was entered for Mr Floyd for the sum of $137,300, and Nevgold was ordered to pay Mr Floyd’s costs of the proceeding.
9. [9]
   If leave is granted to appeal, the grounds relied upon by Nevgold are that the learned primary judge:

1. erred in concluding that there was a sufficient causal connection between the work performed by Mr Floyd under his agency agreement with the appellant and the sale of the land;

2. erred in concluding that Mr Floyd introduced OneFin’s nominee as the purchaser under the option; and

3. by reason of those errors:

1. erred in concluding that Mr Floyd was the effective cause of the sale of the land; and

2. erred in concluding that Mr Floyd was entitled to judgment on his claim.

10. [10]
    There is no challenge to the facts as found by the primary judge.  Nor is it said the primary judge erred in his identification of the legal principles which apply.  Nevgold’s proposed contention, if given leave to appeal, is that the primary judge should have reached a different conclusion – namely, that Mr Floyd was not the effective cause of the sale of Nevgold’s property.
11. [11]
    Nevgold, by its counsel, accepts that, but for Mr Floyd’s efforts, there would have been no option deed, OneFin would not have been able to exercise the right of nomination under that option deed, and there would have been no contract.  But Nevgold says that is not sufficient.  The key to Nevgold’s argument seems to be the involvement of OneFin’s agent, HTL, to find a nominee.
12. [12]
    In that regard, it is not suggested that, if OneFin had itself exercised the option, and so entered into the contract to purchase the property, Mr Floyd would not be regarded as “the effective cause of” that sale.  Nor is it suggested that, if OneFin had itself found a nominee, which then entered into the contract, the result would be the same.  The so-called “break in the chain” emphasised by Nevgold is the involvement of an agent, on behalf of OneFin, to find a nominee.  But there is no relationship at all between Nevgold and OneFin’s agent.  From Nevgold’s perspective it achieved the very outcome that Mr Floyd had brought about by the introduction of OneFin – that is, a sale of the property, on the terms set out in the contract annexed to the call option deed, to OneFin or its nominee.
13. [13]
    The authorities, addressed in some detail by the primary judge, establish that, when considering whether an agent is “the effective cause of sale”:

“The inquiry is whether the actions of the agent really brought about the relation of buyer and seller and it is seldom conclusive that there were other events which could each be described as a cause of the ensuing sale.  The factual inquiry is whether a sale is really brought about by the act of the agent…”^[5]

14. [14]
    It has been said that what must be shown is that the agent’s initial efforts flowed through to the purchaser so as to cause the ultimate sale.^[6]  As Gleeson CJ said in Moneywood Pty Ltd v Salamon Nominees Pty Ltd (2001) 202 CLR 351 at [30]:

“In determining whether the agent’s conduct was an effective cause, the law looks at the substance of the matter. If the sale could not have occurred until the vendor or another agent arranged finance on terms, not otherwise available to the purchaser and not contemplated at the time of the introduction, the proper conclusion will ordinarily be that the introducing agent was not the effective cause of the sale. On the other hand, the agent will be the effective cause where the person introduced nominates another person to buy the property – at all events where the person introduced directs the property to be transferred into the name of the actual purchaser.”^[7]

15. [15]
    It must be acknowledged that whether an agent is the effective cause of sale is a question of fact, which will turn on the particular facts of the case.  It is not suggested that, in either respect, the examples given in the passage just quoted establish hard and fast rules as to when causation will be established or when it will not.  But in the circumstances of this case, where the ultimate purchaser (RRAF3) entered into, and completed, a contract to purchase Nevgold’s property, on precisely the same terms and conditions which OneFin had provisionally committed to, as OneFin’s nominee, a circumstance expressly contemplated by the option, it is difficult to see any basis to argue that Mr Floyd’s efforts – which brought about the option – did not flow through to RRAF3, such as to cause the ultimate sale.  The fact that OneFin was assisted by an agent to find a nominee does not undermine that conclusion.
16. [16]
    Nevgold’s counsel acknowledged the unfairness inherent in its proposed argument, and that it could be said, if its argument were accepted, that Nevgold had a windfall, because it would have achieved the sale of its property, with the benefit of Mr Floyd’s work, without having to pay any commission.  Often, one finds on analysis that what seems an unfair outcome is not consistent with the proper application of the law.  That is so in this case.  I can see no basis to conclude that there was any error in the conclusion reached by the primary judge, that Mr Floyd was the effective cause of the sale of Nevgold’s property to RRAF3 and that he was, therefore, entitled to be paid commission, under clause 5.1 of the agency agreement.
17. [17]
    Since there is no error to correct, there is no injustice, and the application for leave to appeal should be refused, with costs.
18. [18]
    It is also appropriate to order that the Registrar is directed to pay to the respondent the sum of $137,300 paid into Court in this matter by the applicant on 27 March 2025, together with accretions.

19. [19]
    MULLINS P:  I agree with the Chief Justice.
20. [20]
    BODDICE JA:  I agree with the Chief Justice.