Advantage Retail Management Pty Ltd v Tolmie Pharma Pty Ltd t/as Atrium Plaza Pharmacy & Anor [2013] QCAT 143

CITATION: Advantage Retail Management Pty Ltd v Tolmie Pharma Pty Ltd t/as Atrium Plaza Pharmacy & Anor [2013] QCAT 143 PARTIES: Advantage Retail Management Pty Ltd (Applicant) v Tolmie Pharma Pty Ltd t/as Atrium Plaza Pharmacy CCK Holdings Pty Ltd (Respondents) APPLICATION NUMBER: MCDO1492-12 MATTER TYPE: Other minor civil dispute matters HEARING DATE: 6 March 2013 HEARD AT: Brisbane DECISION OF: K O’Hanlon, Adjudicator DELIVERED ON: 8 April 2013 DELIVERED AT: Brisbane ORDERS MADE: 1. The respondents pay to the applicant $5,000.00 within 21 days. CATCHWORDS: Contract – interpretation of terms – performance fee. APPEARANCES and REPRESENTATION (if any): APPLICANT: Advantage Retail Management Pty Ltd represented by P Chapman, Director/owner RESPONDENT: Tolmie Pharma Pty Ltd (t/as Atrium Plaza Pharmacy) represented by C Tolmie, sole Director. CCK Holdings Pty Ltd (t/as Atrium Plaza Pharmacy) represented by P Laird, Director REASONS FOR DECISION [1] Advantage Retail Management Pty Ltd (Lease 1) is claiming an amount of $17,468.61 made up of $17,138.00 as a debt due and owing; with a filing -- 1 of 4 -- 2 fee of $265.00; a business loan or company search fee in the sum of $15.95; interest in the amount of $49.66. Lease 1 claims against two companies, namely Tolmie Pharma Pty Ltd and CCK Holdings Pty Ltd. Both of these companies were trading in partnership as Atrium Plaza Pharmacy operating at Royal Brisbane and Women’s Hospital. [2] Lease 1 claims it is owed this amount as and by way of services it provided to the respondents under a written agreement to engage services of an outsource consultant dated 3 August 2011. The agreement is between Lease 1 and Tolmie Pharma Pty Ltd only. It is then signed by a Lease 1 representative and then by Tolmie Pharma Pty Ltd by Peter Laird, a director of CCK Holdings Pty Ltd. Mr Laird is not a director of Tolmie Pharma Pty Ltd but a director of CCK Holdings Pty Ltd. [3] It is contended by Lease 1 that notwithstanding the abnormality of Peter Laird’s signing under the name of Tolmie Pharma Pty Ltd that he binds Tolmie Pharma Pty Ltd and his own company CCK Holding Pty Ltd on the basis of ostensible authority. [4] The Tribunal will deal with that question first. As indicated in the hearing I have taken the view that notwithstanding the abnormality of Mr Laird, he being a director of one of the partnership companies, had the authority to bind the partnership of that respondent and therefore the action is rightfully brought against both respondent companies. [5] It therefore falls for this Tribunal to decide whether the claim for debt is made out by Lease 1. It appears that Atrium Plaza Pharmacy had two years to run on its then current lease when it engaged the services of Lease 1 to negotiate a new lease. I am satisfied that Lease 1 was responsible for the new lease being arranged and it was beyond dispute that such lease was for a five year period with an option of a further five years at the expiry of the current lease. Lease 1 then under the terms of its agreement with the pharmacy partnership rendered an account for $10,000 for a performance fee. The performance fee details are set out in the agreement under clause 6 and under clauses 11, 12 and 13. It was to be capped at $12,500. [6] The pharmacy partnership declined to pay such an amount on the basis that there was no lease savings as defined in the agreement. [7] The applicant claimed the $10,000 was based on $1,000 per year for the 10 years extra that Lease 1 claimed it had obtained for the pharmacy partnership. [8] Upon non-payment of the $10,000 invoice Lease 1 sought to withdraw that invoice and then rendered a further invoice at the full capped amount of $12,500.00. Since then due to ongoing dispute it has not been paid and Lease 1 has engaged services of a retail valuer and solicitors. Their fees are sought to be paid in addition to the $12,500 and are lumped in with the claimed amount. -- 2 of 4 -- 3 [9] I consider that the claim is not validly made for the reason that any interpretation of the agreement to engage services is based on the following:- “Lease savings” are defined in the definition section as meaning Lease Savings means the customer’s saving to its lease costs over the initial term of the lease attributable to the Provider achieving in whole or in part the objectives set out in the schedule of Services. [10] The schedule of services provides that its objectives are “to engage in negotiations for a new lease and or extension of the current lease terms to facilitate the change in business ownership; other services as agreed under separate cover; it is agreed that the performance fees shall be capped at $12,500 (excluding GST).” [11] Clause 6 of the agreement states: The provider shall be entitled to issue its invoice for the Performance Fee if: (a) Objectives or goals identified in the schedule of Services have been achieved in whole or in part [12] The respondents claim that the performance fee can only be worked out if the objectives are obtained and pursuant to clause 11 of the contract the initial fee (that was $1,650 including GST) shall be in addition to any performance fee payable as set out below. 12. Customers shall pay a Performance Fee equal to 10% of the Lease Savings. Example: where the lease savings equated to $100,000.00 the performance fees are calculated as ($100,000.00 x 10%) = $10,000.00. The invoice would reflect the performance fee less the initial fee. ($10,000.00 - $1,500.00 = $8,500.00) excluding GST. 13. It is agreed that performance fees will be capped to a total of $12,500.00 (+GST). [13] The respondents rely on clause 14 wherein it says: The Lease Savings include but are not restricted to such categories as rental reduction, rent free, fitout contributions, lessor works, outgoings reduction, marketing levy reduction, reduced annual rental reviews, relocation costs/compensation, business lease buyouts and dispute resolutions and other such commercial outcomes. [14] I accept the argument of the respondents that as provided by the definitions section and by an interpretation of clause 14 that the performance fee is restricted to savings to the lease costs over the initial term of the lease. Furthermore, the lease savings - hence the performance fee - are to be restricted to the definitions genre as defined in clause 14 and the words “other such commercial outcomes” should be confined to those sorts of rental reductions or savings. -- 3 of 4 -- 4 [15] Notwithstanding the above, there is no doubt the applicant organised a new lease. The performance fee in my opinion is restricted to the initial term of the lease. In giving evidence the applicant, through its director, Mr P Chapman, advised that he had originally worked out a 10 year performance fee on the basis of $1,000.00 for each of 10 years. Clearly under the terms of the agreement this cannot be done and is to be restricted or should have been restricted to the initial term of the lease to accord with the agreement that was signed between the parties. On that basis I am prepared to allow the applicant the sum of $1,000.00 a year for the initial term. In relation to seeking costs and his legal costs I cannot allow such. This is a minor civil dispute and r 84 does not allow for such costs to be allowed in the absence of their being set out clearly in the agreement. Clause 17 is of too general a nature for the parties to rely on as being defined. Such costings as provided by the applicant’s legal firm are too vague for it to be considered to be set out clearly in the agreement in order for this Tribunal to allow these costs to be awarded. [16] Accordingly, it is the decision of this Tribunal that the respondent company’s pay to Advantage Retail Management Pty Ltd the sum of $5,000.00 within 21 days. -- 4 of 4 --