Arpan Kholi Pty Ltd v Australian Associated Advisers and Anor [2011] QCAT 601

CITATION: Arpan Kholi Pty Ltd v Australian Associated Advisers and Anor [2011] QCAT 601 PARTIES: Arpan Kholi Pty Ltd t/as Freedom Finance v Australian Associated Advisers Pty Ltd t/as Money Advisers Money Advisers Qld Pty Ltd APPLICATION NUMBER: MCDO579-11 MATTER TYPE: Other civil dispute matters HEARING DATE: 16 November 2011 HEARD AT: Brisbane DECISION OF: Peta Stilgoe, Member DELIVERED ON: 21 November 2011 DELIVERED AT: Brisbane ORDERS MADE: 1. Money Advisers Qld Pty Ltd pay Arpan Kholi Pty Ltd $992.56, being $900.56 plus the filing fee of $92 within 14 days of today’s date. CATCHWORDS: MINOR CIVIL DISPUTE – where claim for commission – where contract terminated – where principal claimed fundamental breach of contract – where contract provided proper law of contract was South Australia APPEARANCES and REPRESENTATION (if any): APPLICANT: Mr Arpan Kholi RESPONDENT: No appearance REASONS FOR DECISION [1] Mr Kholi is the sole director of Arpan Kholi Pty Ltd. On 1 October 2009, he signed an agreement with Money Advisers Qld Pty Ltd (“MAQ”) by which he would market loans as a subcontractor of MAQ. On 10 June 2010, that contract was “superseded” by a contract between Australian Associated Advisers Pty Ltd (“AAA”) and Mr Kholi. In an email of 21 June 2010, Mr -- 1 of 3 -- 2 Kholi was assured that the new agreement would not affect any previous entitlement to trail commissions. [2] Mr Kholi terminated his relationship with AAA by letter of 19 November 2010. AAA stopped paying trail commissions almost immediately thereafter so Mr Kholi brought a claim for $9,950. [3] Clause 21.1 of the AAA contract provides that the governing law of the contract is South Australia whereas the governing law of the MAQ contract is Queensland. At the hearing, Mr Kholi relied on the MAQ contract for his entitlement to trail commission. [4] Clause 9.1 of the MAQ agreement provides that either party may terminate the agreement by giving three months’ notice in writing. If the agreement is terminated prior to the third anniversary of the commencement date, then Mr Kholi’s right to trail commissions is reduced to 50%. Under clause 15.1 of the AAA contract, either party may terminate the contract by giving two weeks’ notice. If the contract is terminated prior to the third anniversary of the commencement date, Mr Kholi’s right to trail commission is terminated. [5] AAA alleges that its agreement was terminated due to Mr Kholi’s breach of contract. It states that Mr Kholi was under investigation for dishonest conduct at the time he terminated and that AAA has since terminated the contract for dishonesty. AAA and MAQ claim that, because Mr Kholi has breached an essential term of the AAA agreement, he has lost his right to payment of any commission. [6] AAA gave the tribunal no details about the alleged dishonesty or the date on which Mr Kholi’s contract was terminated. If the AAA contract applies to all Mr Kholi’s entitlements, I do not see why AAA alleges dishonesty because clause 15.1 effectively ends Mr Kholi’s right to any trail commission. [7] I am satisfied that MAQ terminated its agreement with Mr Kholi when AAA required him to enter into a new contract in June 2010. I am further satisfied that Mr Kholi’s right to trail commission survives that agreement and that any alleged dishonesty in relation to the AAA contract cannot affect his rights under the MAQ contract. [8] Mr Kholi has claimed commission at 100% based upon an email from a Mr Kildare of Money Advisers dated 21 June 2010 in which he states: This contract will supersede your other contact but will not affect any previous trail etc. [9] I read this statement as an acknowledgement that, even though the MAQ agreement has been terminated, Mr Kholi would continue to receive trail commission at 100%. However, I consider that the right to commission at 100% was contingent upon Mr Kholi continuing as a subcontractor of AAA. As Mr Kholi terminated the new agreement within the three-year period, I consider that his right to trail commission must revert to 50% for loans written pursuant to the MAQ contract. [10] Mr Kholi has provided me with a spreadsheet showing calculations for up front commission and training commissions. The amount of $2,092.53 for trailing commissions includes $291.41 for loans written after 21 June 2010. Those commissions must be considered in light of the AAA contract and -- 2 of 3 -- 3 must be deducted, leaving $1,801.12. That sum must be halved, as Mr Kholi has claimed at the full rate for trailing commission and I have already found that he is entitled to only 50%. That leaves an amount of $900.56. [11] Mr Kholi also claims $18,140.55 for up front commissions under the AAA agreement. This is a claim under the AAA agreement, the proper law of which is South Australia. Mr Kholi conceded that he had to bring proceedings in South Australia to recover all of the funds to which he may be entitled. I decline to determine Mr Kholi’s right to $18,140.55 as, presumably, that will be a matter for the South Australian claim. [12] I order Money Advisers Qld Pty Ltd pay Arpan Kholi Pty Ltd $992.56, being $900.56 plus the filing fee of $92 within 14 days of today’s date. -- 3 of 3 --