When there are several agents involved in finding a buyer for a property, things can get complicated. Commission disputes are stressful and time-consuming but are avoidable if agents understand how the law determines who was the “effective cause of sale,” writes Property & Commercial Law Senior Associate, Mieke Elzer
Proving effective cause of sale
To establish that an agent was the effective cause of sale, it is necessary for the agent to prove that there was a causal connection between the agents’ efforts and the completion of the transaction. In LJ Hooker Ltd v WJ Adams Estates Pty Ltd, Jacobs J said:
“Effective cause” means more than simply “cause”. 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.”
A Queensland Example: The Podium Project Marketing Case
One recent Queensland District Court case, Podium Project Marketing Pty Ltd v B Global (Aust) Pty Ltd [2024] QDC 219, illustrates how quickly commission disputes can escalate when the seller has engaged multiple agents. The case concerned payment of commission on a series of lots in a development, each for $40,000 plus GST. Both agencies claimed to have played a key role in the transaction.
Podium argued that it facilitated the buyer and maintained negotiations afloat, even though B Global was ultimately the agent who procured the signing of the contracts. B Global asserted Podium’s involvement was minor and was note the effective cause of the sales.
The Court went through each e-mail, call and follow-up to determine who in fact bridged the buyer and seller. Finally, it concluded that Podium’s conduct had caused the sale. Even though B Global and handled the resulting contracts., Podium was entitled to a commission.
The lesson for agents in Queensland is clear. An agent may be considered the effective cause of a sale even if the agent is not the sole cause, as long as the agent’s actions are a significant factor in bringing about the sale.
A Recent NSW Example: Freedom Development Group
Both NSW and Queensland Courts agree on the central principle that the agent’s efforts must be a significant factor in bringing about the sale, and that the mere introduction of a buyer is generally insufficient to establish an entitlement to commission. NSW case law however has demonstrated a stronger emphasis on their needing to be a direct causal relationship between the agent’s actions and the sale.
In a recent case, Freedom Development Group Pty Ltd v D’Ettorre Properties Pty Ltd t/as D’Ettorre Real Estate [2025] NSWCA, the Court of Appeal clarified that the term “effectively introduced” involves a causal element and requires the agent’s efforts to be an effective cause of the sale. The agent must, in other words, play a role in influencing the purchaser to enter a binding contract.
Why this matters to agents
Commission disputes are not just about money. They can take up valuable time, create stress, and sometimes damage relationships with other agents and clients. Both NSW and Queensland examples highlight that evidence and documentation are critical.
Agents should keep a few key points in mind:
- Know what “effective cause” means. You don’t have to be the closer of the sale, but your efforts must have led directly to the sale.
- Document everything. Maintain clean records of introductions, calls, inspections, and messages. Should you ever have to prove your involvement, this will be your strongest evidence.
- Obtain your authorities in writing. Especially on open listings – be clear about your role, commission and scope upfront.
- Keep the seller informed. Keeping everyone in the loop reduces crossed signals and lessens the chance of disputes.
- Obtain early advice. If a dispute looks inevitable, consult a lawyer before things get out of hand. It is simpler to establish your right in advance than to fight for it later on.
Steps to protect your commission
A few simple steps can save a lot of heartache:
- Use written, signed, compliant listing authorities.
- Record buyer introductions and all contact.
- Follow up buyers and sellers regularly and track your activity.
- Keep your file at settlement (disputes can arise months down the track).
- Don’t hesitate to get advice if something feels off.
The takeaway
Commission entitlement is not who just about who finalises the contract. It’s about who made the sale happen. The Podium Project Marketing and Freedom Development Group rulings demonstrate that being the effective cause of sale comes down to effort, persistence and evidence. Your skill, professionalism and time are valuable. Protecting them ensures your work is recognised and that you are paid for your contribution.
Attwood Marshall Lawyers – your property law partners
At Attwood Marshall Lawyers, our commercial and property law department is in close working relationship with principals and agents across Queensland and New South Wales, assisting to resolve disagreements and safeguard commission entitlements. We are able to review your authorities for listing, ensure that your contracts comply with laws, and help you enforce your rights in case of a disagreement.
Phone our Property and Commercial Law Department Manager, Jess Kimpton on direct line 07 5506 8214, email jkimpton@attwoodmarshall.com.au or call our 24/7 phone line on 1800 621 071. Our offices are located at Coolangatta, Kingscliff, Robina Town Centre, Southport, Brisbane, Sydney and Melbourne. Protect your hard work and make sure it is properly recognised and rewarded.
