When is commission earned? Effective cause of sale in Queensland

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Kooky

Builder of Shaka, the payment router that pays every agent their commission on closing date.

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Most commissions are paid without anyone asking when, exactly, they were earned. The home sells, the sale settles, the agent's fee comes out of the deposit and the seller receives the rest. The question only becomes urgent in the minority of sales where something departs from that script: two agents each say the buyer was theirs, an owner sells to someone they met at a barbecue, a contract is signed and then collapses, or a buyer who inspected in March comes back in July after the appointment has ended.

Queensland law answers those cases with three tests, applied in order. Was the agent licensed and properly appointed? Did the agent do what the appointment requires to become entitled to commission? And has the event that makes the commission payable actually happened? This guide takes each in turn, using decisions of Queensland courts and of the Queensland Civil and Administrative Tribunal to show how the tests work on real facts. It explains the general position only. Every dispute turns on the words of its own appointment.

Property Occupations Act 2014 as described by the District Court in [2024] QDC 219; LJ Hooker Ltd v WJ Adams Estates Pty Ltd (1977) 138 CLR 52.

Three questions, in order

It helps to separate ideas that everyday speech runs together. People say an agent has "earned" a commission when they mean any of three different things.

The first is whether the agent is legally able to claim a commission at all. That depends on licensing and on the appointment.

The second is entitlement: whether the agent has done what the appointment says must be done. Under some appointments that means bringing about the sale. Under others it is enough that a sale happened during the term.

The third is timing: whether the commission is payable yet. An agent can be entitled in principle and still have nothing to collect, because the event the form names for payment, most often settlement, has not occurred and may never occur.

A claim has to pass all three. Disputes usually concentrate on one, and it is worth knowing which.

The first gate: a licence and a valid appointment

The District Court set out the threshold rule in Podium Project Marketing Pty Ltd v B Global (Aust) Pty Ltd [2024] QDC 219, decided by Judge Barlow KC on 12 December 2024. Section 89 of the Property Occupations Act 2014, the court explained, prevents an agent from recovering commission unless the agent held a property agent licence when the work was performed, was authorised under that licence to perform it, and was properly appointed by the client.

The court described the purpose of the section as consumer protection. It is aimed at the relationship between the agent and the client, so that a client is not left paying someone who was unlicensed or was never formally engaged.

For residential property the appointment is made on Property Occupations Form 6. The Office of Fair Trading's guidance says the appointment must state the fees, charges and commission for each service, the other expenses, when payments are due, and whether commission applies if a sale is not executed and in what circumstances. An agent who cannot produce a valid appointment has a difficulty that no amount of good work on the sale will cure.

The Podium decision also marked a limit. The developer in that case argued that the agent should lose its commission because some of the people who dealt with buyers, employed by sub-agents further down the chain, were not registered as salespersons. The court disagreed. Section 89 looks at the licence and appointment of the agent making the claim. Parliament could have written the section to cancel commission whenever an unregistered person took part, the judge observed, but had not done so. Other provisions of the Act deal with unlicensed work in other ways.

The type of agency sets the bar

Once a valid appointment exists, the kind of agency chosen on it decides how much the agent has to show.

The Office of Fair Trading puts the open listing rule in a sentence: the seller pays commission only to the agent who is the effective cause of the sale. An owner may give open listings to several agents at once, and all but one of them will be paid nothing.

Under an exclusive agency the inquiry is much narrower, because the agent is entitled whoever sells. That is the certainty an exclusive appointment gives an agent in exchange for committing to the campaign. Under a sole agency the same is true with one exception, a sale made by the owner personally.

So "effective cause" is the test that governs open listings, and it returns whenever an appointment's own wording makes commission depend on the agent introducing the buyer.

What effective cause means

The phrase comes from the High Court's decision in LJ Hooker Ltd v WJ Adams Estates Pty Ltd, reported in 1977 at volume 138 of the Commonwealth Law Reports, and Queensland courts still start there.

In Podium, the District Court adopted two statements from that case. One judge had described the test as asking whether the agent's actions really brought about the relation of buyer and seller, with a necessary causal relationship between the steps the agent took and the purchase that followed. The Chief Justice, Sir Garfield Barwick, had said commission is earned where there is a sale which has resulted wholly or partially from the efforts of the agent.

Three features of the test come out of those statements and the later cases the District Court cited.

It is about causation, not effort. An agent who works hard on a campaign that has nothing to do with the eventual buyer has not caused the sale. An agent who does comparatively little but supplies the link that produced the buyer may have.

It looks at substance. The District Court referred to the High Court's later decision in Moneywood Pty Ltd v Salamon Nominees Pty Ltd, reported in 2001, for the point that the substance of what happened controls and not its legal form.

And it is a question of fact. The court cited a New South Wales Court of Appeal decision reported in 2020 at volume 102 of the New South Wales Law Reports for the proposition that the inquiry considers all the circumstances. There is no checklist that guarantees an answer.

More than one cause

The most useful point for agents in the Podium decision is that an effective cause need not be the only cause.

The facts were these. A developer appointed a marketing agency under open listings covering 60 residential lots, across three appointments. Commission was $40,000 a lot plus GST, half payable when a contract became unconditional and half at settlement, and it was payable only if the agency was the effective cause of the sale. The agency did not find the buyers itself. It passed the project details to two sub-agents, whose own people located the buyers.

The developer said the agency had therefore not caused the sales. The court found that it had. The agency had sent the stock information to the sub-agents and so opened the sales channel. It ran the online system through which every expression of interest had to be lodged. It liaised between the sub-agents and the developer on the approval of buyers, reviewed and processed the contracts, handled the transfer of deposits, and was named as the seller's agent on every contract. Those activities, the judge said, were causal links between the seller and the buyers.

The court drew on an English case, Burney v The London Mews Co Ltd, in which an agent who supplied a property's particulars through intermediaries remained an effective cause of the sale. Dealing directly with the buyer is not required.

The result was judgment for the agency of $305,619.39, of which $52,619.39 was interest, and the dismissal of the developer's counterclaim for commission it had already paid. The Real Estate Institute of Queensland summarised the decision for its members on 22 January 2025 under the heading of more than one effective cause of sale.

When an introduction is not enough

The same test can go against an agent who did introduce someone.

The New South Wales decision cited in Podium is the standard illustration. As the Queensland law firm Attwood Marshall summarised it in a note published on 28 August 2025, a first agent introduced the buyer, but a second agent later negotiated a higher price and clarified the seller's position. The first agent's introduction was held not to be the effective cause, and the commission claim failed. The firm lists the matters courts weigh in such cases: the timing of the introduction, how actively the agent moved negotiations forward, and whether the final terms match what the agent had arranged.

A Queensland conjunction dispute makes a related point. In Equity 2 Pty Ltd v Best Price Real Estate Pty Ltd [2020] QDC 180, decided by Judge Kent on 3 August 2020, two agencies had a written agreement to share commission on the sale of Gold Coast development sites to a named prospective purchaser. That contract fell over when finance could not be arranged, and the sites were later bought by a different company on different terms. The agency that had introduced the first purchaser claimed a share. The court held that the agreement was unambiguous in requiring a sale to the named purchaser, declined to imply any wider term, and found no sufficient causal connection between the introducing agency's work and the eventual sale.

Together the cases show the boundary. An introduction that leads, by a traceable chain, to the sale can be enough even when others helped. An introduction followed by a break in the chain, with a different buyer or a deal remade by someone else, may not be.

Entitled, but not yet payable

An agent who clears the first two tests still has to wait for the event that makes the commission payable. That event is whatever the appointment says, which is why the Office of Fair Trading requires the form to state when payment is due and whether commission applies if the sale is not executed.

In most residential appointments the event is settlement. A signed contract is a promise to buy; the sale happens when the price is paid and the title passes. An appointment that ties commission to settlement makes the agent share the risk that the contract never completes.

Appointments can be drawn differently. In Podium, half of each commission fell due when the contract became unconditional and the other half at settlement, a common pattern in project sales where settlement may be a year or more away. The parties are free to agree such terms, provided they are on the form.

When the contract falls over

Contracts end before settlement for different reasons, and an appointment may treat each reason differently.

The clearest Queensland example is a claim brought by Limitless Property Qld Pty Ltd, reported as [2022] QCATA 13 and decided by the tribunal's appeal division on 3 February 2022. An agency had been appointed in May 2019 to sell a house in North Mackay. It found a buyer and a contract was signed. The building inspection then revealed leaks in the roof and a bathroom, with repairs estimated at $35,000, and the buyer terminated under the inspection condition. The sellers accepted the termination and the deposit was returned.

The appointment made commission payable in two situations: when a contract was entered into and settlement occurred, or when a contract was terminated by mutual agreement. Settlement had not occurred, so the agency relied on the second limb. It argued that because the sellers had gone along with the termination, the contract had ended by mutual agreement.

The tribunal dismissed the claim in June 2020 and the appeal tribunal refused leave to appeal. Termination by mutual agreement, it held, describes a buyer asking to be released and a seller agreeing to release them. It does not describe a buyer exercising a right the contract already gives and a seller acquiescing. The sellers might have challenged the termination, but choosing not to was not an agreement.

The decision does not mean commission can never be payable on an unsettled sale. The Office of Fair Trading's guidance is explicit that it may be, depending on the appointment. A form may provide for commission where a seller defaults on an unconditional contract, for example. What the case establishes is that each limb will be read according to its words, and an agent who wants to be paid in a particular situation needs that situation written in.

After the appointment ends

A further group of disputes concerns sales made after the term has run out, to a buyer the agent introduced while it was still running.

The principles above supply the framework. The first question is what the appointment says about sales after its term, since many forms address the point directly. If the form is silent or the appointment has become an open listing, the effective cause test applies, and the agent must show an unbroken causal link between the introduction and the later sale. The longer the gap and the more that changed in between, including the price, the terms and the involvement of another agent, the harder that becomes.

Sellers sometimes assume that the expiry of an appointment wipes the slate. Agents sometimes assume that an introduction creates a lasting claim. Neither is safe as a general statement. The answer lies in the form and the facts.

How these disputes are decided

Commission claims are claims for a debt under a contract, and they are decided on evidence. The cases reviewed here show what carries weight.

The appointment comes first: a complete form, signed before the work began, stating the commission and the event that triggers it. Then the record of the agent's part in the sale: who first gave the buyer the details of the property, who conducted the inspections, who carried offers between the parties, and on what dates. Then the contract of sale and what became of it.

The forum depends on the amount and the nature of the dispute. The cases in this guide were decided in the tribunal and in the District Court, and the Magistrates Court also hears commission claims. Before any of that, the Office of Fair Trading accepts complaints about agents and is the regulator of the appointment rules.

For agents, the cases are an argument for careful records and for appointments whose payment clauses say what the agent expects them to mean. For sellers, they are a reminder that the type of agency and the wording of the commission clause are decisions, made at the start, that determine what is owed at the end.

Commission is earned twice over: once by doing what the appointment asks, and again when the event it names for payment arrives.

Kooky, from Shaka

Kooky edits Queensland Estate and builds Shaka, the payment router he made for Queensland property professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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