Welcome to today’s Chamberlains Selection, where we will discuss with James d’Apice on the matter of Cao v Zhu [2020] 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. [64] 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. [57] 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”. [83] D failed to prove the agreement was unconscionable [158] or that there was no common intention such that the agreement ought to be the subject of rectification: [151] P succeeded. D was obliged to $500K.