A Far North Queensland motel deal developed into a courtroom drama, with a real estate agent having to fight his way to get the commission on the sale he put together.
The property at the centre of the controversy —a motel and land in Cairns—was owned by Nevgold Pty Ltd.
When Nevgold decided to sell, its managing director Brian Jorgensen appointed agent Malcolm Floyd in September 2021 under two form 6 appointments, one for the motel and the other for three parcels adjoining the motel site which had development potential.
Floyd introduced OneFin Property Pty Ltd as a buyer under a call option deed to buy the properties at $6 million. Its owner, Mitch Paul, paid $20,000 upfront and was to pay a further non-refundable sum of $500,000 on notification that due diligence was satisfied.
The option exercise date was August 2023 and the deed allowed OneFin to nominate a third party as buyer.
In May 2023, Paul told Jorgensen that Onefin was intending to “on-sell” the right to purchase the properties – presumably for a figure well above the $6 mil option price – and asked if he would agree to extend the option period.
Jorgensen refused.
OneFin hired another agent, HTL, to find a party to buy as its nominee.
HTL – to whom commission was paid by OneFin – brought in RRAF3, who stepped in as nominee. The price it agreed to pay to OneFin is not disclosed in the judgment.
OneFin exercised the option with RRAF3 as the buyer on the terms of the contract attached to the option deed.
Nevgold got their sale. But when it came time to pay Floyd, it claimed it wasn’t him that had closed the deal and that he wasn’t the “effective cause” of the sale.
Floyd sued. The case landed in the District Court at Cairns, where Judge Bernard Porter KC ruled that Floyd’s work set the whole thing in motion and was entitled to the commission. Without him, there would’ve been no option deed, no nomination clause, and no sale.
Nevgold appealed. It admitted Floyd’s work was essential but argued it wasn’t enough.
Chief Justice Helen Bowskill, President Debbie Mullins, and Justice David Boddice—shut them down. They ruled unanimously that Floyd’s efforts “flowed through” to the final sale. The fact that another agent found the nominee didn’t break the chain. The sale was exactly what Floyd had lined up—same contract, same terms, just a different buyer name.
Nevgold’s stance was in their opinion legally flawed and unfair. They said the company was trying to cash in on Floyd’s work without paying for it.
“I can see no basis to conclude that there was any error by the primary judge, that Mr Floyd was the effective cause of the sale of Nevgold’s property to RRAF3,” the Chief Justice reasoned, “and that he was, therefore, entitled to be paid commission, under the agency agreement”.
The court ordered Nevgold to cough up the $137,300 they’d paid into court, plus interest, and to pay Floyd’s legal costs.
