Welcome to today’s Chamberlains Selection, where we will discuss with James d’Apice on the matter of Cao v Zhu  NSWSC 321. We will talk about payment commitments between a property developer and a real estate agent.
P was a property developer. D was a real estate agent. D’s connect was developing a property. D was to be the selling agent. D angled for P to invest in his connect’s development. As an incentive, he offered to pay P $500K if he did. That amount was calculated based on D’s speculation on what commissions he might expect to receive, and what an appropriate referral fee might be.  D’s connect did not go ahead with the development, selling it to another developer before completion (meaning, obviously, D was not appointed selling agent).
Without D taking a role as selling agent, the D received no benefit of any kind.  P sought payment of the $500K. D resisted on the basis his promise was conditional on being appointed selling agent. D had entered into two written documents (one of which he prepared) that included his unconditional obligation to pay $500K in terms so clear it was “difficult to imagine clearer”.  D failed to prove the agreement was unconscionable  or that there was no common intention such that the agreement ought to be the subject of rectification:  P succeeded. D was obliged to $500K.