Cover King P/L v Stephen's Supermarkets P/L [2001] QSC 438

.C~C?D Ci5c. 43-8. State Reporting ( · Queensland Government ~ .. Bure au ~ Department oi justice ant:! /\tll)(llf!y-G,,rn:ral Transcript of Proceedings Copyright in this transcript is vested in the Crown. Copies thereof must not be made or soM without the written authority of the Director, S'tate Reporting Bureau. SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION DOUGLAS J No 9596 of 2001 COVER KING PTY LTD ACN 093 012 198 and REVISED COPIES ISSUED State Reporting Bureau Date I)_,/ I I I o I Applicant STEPHEN'S SUPERMARKETS PTY LTD ACN 076 868 749 Respondent BRISBANE .. DATE 07/11/2001 ORDER h Floor, The Law Courts, George Street, Brisbane, a. 4000 Telephone: (07) 3247 4360 fax: (07) :3247 5532 1 -- 1 of 5 -- 1 07112001 Tl/HMC9 M/T 1/2001 (Douglas J) HIS HONOUR: Two points arise in this application. The first is the entitlement of the applicant to certain documents pursuant to clause 3.1.5 of a lease of premises which are used as a supermarket in Brisbane. The clause 10 reads: "The landlord or any agent or auditor selected by the landlord may, at any time after giving reasonable prior notice to the tenant, examine the cash register tapes and totals, sales slips, sales records, sales dockets and other business records of all persons carrying on business at, in or from the lease premises." 20 The clause then goes on to set down some computations with respect to rent. The dispute in this first matter relates to the meaning of the words "and other business records". It is said that 30 those records necessarily include the following: (A) Business activity statements. (B) Bank statements. (C) Merchant statements for American Express, Diners Club and other credit cards and direct debit cards. (D) Monthly statements made by it to its franchisor, Independent Grocers Association, in relation to turn- over and other related matters. (E) Financial statements. For myself I cannot see that the business activity statements which are required to be lodged as part of the income tax collections scheme can be the type of records referred to in clause 3.1.5. Nor indeed can I see that 2 ORDER 40 50 60 -- 2 of 5 -- 07112001 Tl/HMC9 M/T 1/2001 (Douglas J) bank statements or financial statements fitted into that category. They are not in any event the source documents such as other documents described in clause 3.1.5. The type of documents which are caught by that clause are the day to day documents of the business of the supermarket. There is some doubt perhaps about credit cards and direct debit cards but to me in the absence of any evidence that sales are being made through these cards without also putting those sales through the normal computer systems of the supermarket, there can be no relevance in those records because all that they record is a transaction between the credit card holder, the credit card company and the merchant with respect to the method of payment of a sale already made and recorded on a sales slip or sales record or sales docket. They are no more than confirmatory of the documents which are caught by clause 3.1.5. Similarly the monthly statements made to the franchisor are only documents which rely upon the type of documents be the day to day documents referred to in the sam~ clause. There is a clear obligation on the respondent to supply all of the documents referred to in clause 3.1.5. A dispute arises as to some documents which were described by an accountant as wholesale sales as distinct from retail sales. I gather he means by that sales made other than 3 ORDER 1 10 20 30 40 50 60 -- 3 of 5 -- 07112001 T1/HMC9 M/T 1/2001 (Douglas J) through the retail cash registers and computers of the company. They are described as goods which are packaged at this supermarket and then passed on to other supermarkets for sale. If in fact there is a sale of those wholesale goods as between this supermarket and other supermarkets for 1 10 instance by way of a packaging fee, it seems to me that any such documents should be disclosed. If in fact there is no 20 sale at all between this supermarket and the other supermarkets and this supermarket is merely used as a packing entity which I would find, at first blush, surprising, then of course there would be no documents caught by clause 3.1.5. I respect the fact that the evidence says that there's a mere packing situation but the opponent may not have understood particularly what was meant by the type of document to be disclosed if in fact there was a sale or charge made in respect of those items. The second matter concerns a failure to pay rent or put more correctly the respondent unilaterally deducting from its current rent amounts which it says have been paid in the past. How that occurred is that the respondent apparently has been including the GST impost upon sales as part of its tenants' sales and therefore computing its rent based upon the whole of the amount including the GST. Such a computation is prohibited by clause 2.4 (A) of the Retail Shop Leases Act 1984 and it logically makes sense 4 ORDER 30 40 so 60 -- 4 of 5 -- 1 07112001 Tl/HMC9 M/T 1/2001 (Douglas J) that the amount of the GST should not be part of the tenants' sales because all the retailer is doing there is collecting a tax on behalf of the Commonwealth Government which must be remitted in full to the government at various 10 times during the year. That does not mean though that having realised the mistake they can now deduct from future rent payments the amounts said to be overpaid. The way to recover those amounts is to either negotiate or sue for the return of those amounts of money being moneys paid under a 20 mistaken fact or law. Therefore the obligation remains that since that mistake has been found out, the full amount of rent should have been and should continue to be paid in respect of the percentage of tenants' sales made in a respective period. The clause being clause 4.5.1 is very clear in its terms and does not allow the respondent to deduct the amounts alleged to be owing by the applicant to the respondent. HIS HONOUR: I will adjourn the application to a date to be fixed with no orders to costs. I give liberty to apply. 5 ORDER 30 40 50 60 -- 5 of 5 --